As
filed with the Securities and Exchange Commission on November 2,
2006
Registration
No.
333-[ ]
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-4
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
BERRY
PLASTICS HOLDING CORPORATION
(Exact
names of registrants as specified in its charter)
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
3089
(Primary
Standard Industrial
Classification
Code Number)
|
35-1814673
(I.R.S.
Employer Identification No.)
|
101
Oakley Street
Evansville,
Indiana 47710
(812)
424-2904
(Address,
including zip code, and telephone number, including area code,
the
registrant’s principal executive offices)
Ira
G. Boots
Chief
Executive Officer
Berry
Plastics Holding Corporation
101
Oakley Street
Evansville,
Indiana 47710
(812)
424-2904
(Name,
address, including zip code, and telephone number, including area code, of
agent
for service)
SEE
TABLE OF ADDITIONAL REGISTRANT GUARANTORS
Copies
to:
Jeffrey
D. Thompson
Vice
President and General Counsel
Berry
Plastics Holding Corporation
101
Oakley Street
Evansville,
Indiana 47710
(812)
424-2904
|
Andrew
J. Nussbaum, Esq.
Wachtell,
Lipton, Rosen & Katz
51
West 52
nd
Street
New
York, New York 10019
(
212)
403-1000
|
Approximate
date of commencement of proposed exchange offer:
As
soon
as practicable after the effective date of this registration
statement.
If
any of
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.
o
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
o
If
this
form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.
o
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of
Securities
to be Registered
|
Amount
to be Registered
|
Proposed
Maximum Offering Price
per
Note(1)
|
Proposed
Maximum Aggregate
Offering
Price(1)
|
Amount
of Registration
Fee(1)
|
8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014
|
$525,000,000
|
100%
|
$525,000,000
|
$56,175
|
Second
Priority Senior Secured Floating Rate Notes due 2014
|
$225,000,000
|
100%
|
$225,000,000
|
$24,075
|
Guarantees
of the 8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014 and Second
Priority Senior Secured Floating Rate Notes due 2014
|
$750,000,000
|
N/A
|
N/A
|
(2)
|
(1)
Estimated solely for the purpose of calculating the registration fee pursuant
to
Rule 457(f)
(2)
under
the Securities Act.
(2)
Pursuant
to Rule 457(n) under the Securities Act, no
additional registration fee is due for guarantees
.
(3)
The entities listed on the Table of Additional Registrant Guarantors on the
following page have guaranteed the notes being registered hereby.
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 which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Table
of Additional Registrant Guarantors
Exact
Name
|
Jurisdiction
of
Organization
|
Primary
Standard Industrial Classification Code Number
|
I.R.S.
Employer Identification No.
|
Name,
Address and Telephone Number of Principal Executive
Offices
|
Berry
Plastics Corporation
|
Delaware
|
3089
|
35-1813708
|
101
Oakley Street, Evansville, Indiana 47710
|
Aerocon,
Inc.
|
Delaware
|
3089
|
35-1948748
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Iowa Corporation
|
Delaware
|
3089
|
42-1382173
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Design Corporation
|
Delaware
|
3089
|
62-1689708
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Technical Services, Inc.
|
Delaware
|
3089
|
57-1028638
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Sterling Corporation
|
Delaware
|
3089
|
54-1749681
|
101
Oakley Street, Evansville, Indiana 47710
|
CPI
Holding Corporation
|
Delaware
|
3089
|
34-1820303
|
101
Oakley Street, Evansville, Indiana 47710
|
Knight
Plastics, Inc.
|
Delaware
|
3089
|
35-2056610
|
101
Oakley Street, Evansville, Indiana 47710
|
Packerware
Corporation
|
Delaware
|
3089
|
48-0759852
|
101
Oakley Street, Evansville, Indiana 47710
|
Pescor,
Inc.
|
Delaware
|
3089
|
74-3002028
|
101
Oakley Street, Evansville, Indiana 47710
|
Poly-Seal
Corporation
|
Delaware
|
3089
|
52-0892112
|
101
Oakley Street, Evansville, Indiana 47710
|
Venture
Packaging, Inc.
|
Delaware
|
3089
|
51-0368479
|
101
Oakley Street, Evansville, Indiana 47710
|
Venture
Packaging Midwest, Inc.
|
Delaware
|
3089
|
34-1809003
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation III
|
Delaware
|
3089
|
37-1445502
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation V
|
Delaware
|
3089
|
36-4509933
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation VII
|
Delaware
|
3089
|
30-0120989
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation VIII
|
Delaware
|
3089
|
32-0036809
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation IX
|
Delaware
|
3089
|
35-2184302
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation X
|
Delaware
|
3089
|
35-2184301
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation XI
|
Delaware
|
3089
|
35-2184300
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation XII
|
Delaware
|
3089
|
35-2184299
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation XIII
|
Delaware
|
3089
|
35-2184298
|
101
Oakley Street, Evansville, Indiana 47710
|
Berry
Plastics Acquisition Corporation XV, LLC
|
Delaware
|
3089
|
35-2184293
|
101
Oakley Street, Evansville, Indiana 47710
|
Kerr
Group, Inc.
|
Delaware
|
3089
|
95-0898810
|
101
Oakley Street, Evansville, Indiana 47710
|
Saffron
Acquisition Corporation
|
Delaware
|
3089
|
94-3293114
|
101
Oakley Street, Evansville, Indiana 47710
|
Setco,
LLC
|
Delaware
|
3089
|
56-2374074
|
101
Oakley Street, Evansville, Indiana
47710
|
Sun
Coast Industries, Inc.
|
Delaware
|
3089
|
59-1952968
|
101
Oakley Street, Evansville, Indiana 47710
|
Tubed
Products, LLC
|
Delaware
|
3089
|
56-2374082
|
101
Oakley Street, Evansville, Indiana 47710
|
Cardinal
Packaging, Inc.
|
Ohio
|
3089
|
34-1396561
|
101
Oakley Street, Evansville, Indiana 47710
|
Landis
Plastics, Inc.
|
Illinois
|
3089
|
36-2471333
|
101
Oakley Street, Evansville, Indiana
47710
|
The
information in this prospectus is not complete and may be changed. We may
not
sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to
sell
these securities and we are not soliciting an offer to buy these securities
in
any state where the offer or sale is not permitted.
Subject
to completion, dated , 2006
PROSPECTUS
Berry
Plastics Holding Corporation
OFFER
TO EXCHANGE
$750,000,000
Second Priority Senior Secured Fixed and Floating Rate Notes due 2014, comprised
of $525,000,000 8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000
Second
Priority Senior Secured Floating Rate Notes due 2014 registered under the
Securities Act of 1933
For
A
Like Principal Amount of Second Priority Senior Secured Fixed and Floating
Rate
Notes
($750,000,000
Aggregate Principal Amount)
We
offer
to exchange up to $750,000,000 aggregate principal amount of our Second Priority
Senior Secured Fixed and Floating Rate Notes due 2014, comprised of $525,000,000
8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000 Second
Priority Senior Secured Floating Rate Notes due 2014 that are registered
under
the Securities Act of 1933, or the “exchange notes,” for an equal principal
amount of our Second Priority Senior Secured Fixed and Floating Rate Notes
due
2014, comprised of $525,000,000 8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000 Second
Priority Senior Secured Floating Rate Notes due 2014, or the “outstanding
notes,” which we issued previously without registration under the Securities
Act. We refer to the outstanding notes and the exchange notes collectively
in
this prospectus as the “notes.” The exchange notes are substantially identical
to the outstanding notes, except that the exchange notes will not be subject
to
transfer restrictions or entitled to registration rights, and the additional
interest provisions applicable to the outstanding notes in some circumstances
relating to the timing of the exchange offer will not apply to the exchange
notes. The outstanding notes are, and the exchange notes will be, issued
by
Berry Plastics Holding Corporation and guaranteed by Berry Plastics Corporation,
Aerocon, Inc., Berry Iowa Corporation, Berry Plastics Design Corporation,
Berry
Plastics Technical Services, Inc., Berry Sterling Corporation, CPI Holding
Corporation, Knight Plastics, Inc., Packerware Corporation, Pescor, Inc.,
Poly-Seal Corporation, Venture Packaging, Inc., Venture Packaging Midwest,
Inc.,
Berry Plastics Acquisition Corporation III, Berry Plastics Acquisition
Corporation V, Berry Plastics Acquisition Corporation VII, Berry Plastics
Acquisition Corporation VIII, Berry Plastics Acquisition Corporation IX,
Berry
Plastics Acquisition Corporation X, Berry Plastics Acquisition Corporation
XI,
Berry Plastics Acquisition Corporation XII, Berry Plastics Acquisition
Corporation XIII, Berry Plastics Acquisition Corporation XV, LLC, Kerr Group,
Inc., Saffron Acquisition Corporation, Setco, LLC, Sun Coast Industries,
Inc.,
Tubed Products, LLC, Cardinal Packaging, Inc. and Landis Plastics, Inc.,
all
wholly-owned subsidiaries of Berry Plastics Holding Corporation. The exchange
notes will represent the same debt as the outstanding notes and we will issue
the exchange notes under the same Indentures.
Terms
of the Exchange Offer
The
exchange offer expires at 5:00 p.m., New York City time, on , 2006, unless
extended. Completion of the exchange offer is subject to certain customary
conditions, which we may waive. The exchange offer is not conditioned upon
any
minimum principal amount of the outstanding notes being tendered for exchange.
You may withdraw tenders of outstanding notes at any time before the exchange
offer expires.
All
outstanding notes that are validly tendered and not withdrawn will be exchanged
for exchange notes. The exchange of outstanding notes for exchange notes
pursuant to the exchange offer should not be a taxable event for U.S. federal
income tax purposes.
There
is
no existing market for the exchange notes to be issued, and we do not intend
to
apply for listing or quotation on any exchange or other securities
market.
See
“Risk
Factors” beginning on page 26 for a discussion of the factors you should
consider in connection with the exchange offer and exchange of outstanding
notes
for exchange notes.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMI
SSION
HAS APPROVED OR DISAPPROVED THE OUTSTANDING NOTES OR THE EXCHANGE NOTES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION
TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The
date of this prospectus is
,
2006.
You
should rely only on the information contained in this prospectus. We have not
authorized anyone to provide you with different information. We are not making
an offer of these securities in any state or other jurisdiction where the offer
is not permitted. You should not assume that the information contained in this
prospectus is accurate as of any date other than the date on the front of this
prospectus.
TABLE
OF CONTENTS
Where
You Can Find More Information About Us
|
1
|
Prospectus
Summary
|
5
|
Risk
Factors
|
26
|
The
Exchange Offer
|
44
|
Use
of Proceeds
|
56
|
Capitalization
|
57
|
Selected
Historical Financial Data
|
65
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
67
|
Business
|
82
|
Management
|
94
|
Certain
Relationships and Related Party Acquisition
|
101
|
Principal
Stockholders of Holdings
|
102
|
Description
of Other Indebtedness
|
104
|
Description
of the Exchange Notes
|
107
|
Material
United States Federal Income Tax Consequences
|
181
|
Plan
of Distribution
|
183
|
Legal
Matters
|
184
|
Experts
|
184
|
Where
You Can Find Additional Information
|
184
|
Index
to Financial Statements
|
F-1
|
Each
broker-dealer that receives exchange notes for its own account pursuant to
this
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the exchange notes. The accompanying letter of transmittal
relating to the exchange offer states that by so acknowledging and delivering
a
prospectus, a broker-dealer will not be deemed to admit that it is an
“underwriter” within the meaning of the Securities Act of 1933, as amended. This
prospectus, as it may be amended or supplemented from time to time, may be
used
by a broker-dealer in connection with resales of exchange notes received
in
exchange for outstanding notes where such outstanding notes were acquired
by
such broker-dealer as a result of market-making activities or other trading
activities. We have agreed that, for a period of 180 days after consummation
of
the registered exchange offer, we will make this prospectus available to
any
broker-dealer for use in connection with any resale. See “Plan of
Distribution.”
We
have
filed with the U.S. Securities and Exchange Commission, or the “SEC,” a
registration statement on Form S-4, which we refer to as the “exchange offer
registration statement,” under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, which we refer to collectively as the
“Securities Act,” covering the exchange notes being offered. This prospectus
does not contain all the information in the exchange offer registration
statement. For further information with respect to Berry Plastics Holding
Corporation 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 documents referred to are not necessarily
complete. For a more complete understanding of each contract, agreement or
other
document filed as an exhibit to the exchange offer registration statement,
we
encourage you to read the documents contained in the exhibits.
After
the
registration statement becomes effective, we will file annual, quarterly
and
current reports and other information with the SEC. You may read and copy
any
document we file with the SEC at the SEC’s public reference room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for
further information on the public reference room. Our SEC filings are also
available to the public at the SEC’s website at
http://www.sec.gov
.
You
may
obtain copies of the information and documents referenced in this prospectus
at
no charge by accessing the SEC’s website at
http://www.sec.gov
or by
requesting them from us in writing or by telephone at:
Berry
Plastics Holding Corporation
101
Oakley Street
Evansville,
Indiana 47710
(812)
424-2904
To
obtain
timely delivery of any of our filings, agreements or other documents, you
must
make your request to us no later than
, 2006. In the event
that we extend the exchange offer, you must submit your request at least
five
business days before the expiration date of the exchange offer, as extended.
We
may extend the exchange offer in our sole discretion. See “Exchange Offer” for
more detailed information.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains “forward-looking statements,” within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), with respect to our
financial condition, results of operations and business and our expectations
or
beliefs concerning future events. Such statements include, in particular,
statements about our plans, strategies and prospects under the headings
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and “Business.” You can identify certain forward-looking statements
by our use of forward-looking terminology such as, but not limited to,
“believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,”
“targets,” “likely,” “will,” “would,” “could” and similar expressions that
identify forward-looking statements. All forward-looking statements involve
risks and uncertainties. Many risks and uncertainties are inherent in our
industry and markets. Others are more specific to our operations. The occurrence
of the events described and the achievement of the expected results depend
on
many events, some or all of which are not predictable or within our control.
Actual results may differ materially from the forward-looking statements
contained in this prospectus. Factors that could cause actual results to
differ
materially from those expressed or implied by the forward-looking statements
include:
·
|
risks
associated with our substantial indebtedness and debt service;
|
·
|
changes
in prices and availability of resin and other raw materials and
our
ability to pass on changes in raw material prices on a timely basis;
|
·
|
risks
of competition, including foreign competition, in our existing
and future
markets;
|
·
|
risks
related to our acquisition strategy and integration of acquired
businesses;
|
·
|
reliance
on unpatented proprietary know-how and trade secrets;
|
·
|
increases
in the cost of compliance with laws and regulations, including
environmental laws and regulations;
|
·
|
catastrophic
loss of one of our key manufacturing facilities;
|
·
|
increases
in the amounts we are required to contribute to our pension plans;
|
·
|
our
ownership structure following the Acquisition;
|
·
|
reduction
in net worth; and
|
·
|
the
other factors discussed in the section of this prospectus titled
“Risk
Factors.”
|
We
caution you that the foregoing list of important factors may not contain
all of
the material factors that are important to you. In addition, in light of
these
risks and uncertainties, the matters referred to in the forward-looking
statements contained in this prospectus may not in fact occur. We undertake
no
obligation to publicly update or revise any forward-looking statement as
a
result of new information, future events or otherwise, except as otherwise
required by law.
TERMS
USED IN THIS
PROSPECTUS
Unless
otherwise indicated, in this prospectus:
·
|
the
term “Holdings” refers to Berry Plastics Holding Corporation (f/k/a BPC
Holding Corporation), the parent company of Berry Plastics
Corporation;
|
·
|
the
terms “we,” “us” and the “Company” refer to Holdings and its predecessors
and consolidated subsidiaries, which are being acquired pursuant
to the
Acquisition;
|
·
|
the
term “BPC Holding Corporation” refers to Berry Plastics Holding
Corporation prior to the consummation of the Acquisition and before
it
changed its name to Berry Plastics Holding
Corporation;
|
·
|
the
term “Berry Plastics Group” refers to Berry Plastics Group, Inc., a
Delaware corporation;
|
·
|
the
term “Merger Sub” refers to BPC Acquisition Corp., a Delaware corporation
and wholly-owned subsidiary of Berry Plastics Group which merged
with and
into BPC Holding Corporation pursuant to the Merger Agreement;
|
·
|
the
term “Apollo” refers to Apollo Management, L.P. and its affiliates;
|
·
|
the
term “Graham Partners” refers to Graham Partners, Inc. and its affiliates;
|
·
|
the
term “Sponsors” refers to Apollo and Graham Partners;
|
·
|
the
term “guarantors” refers to each of the existing and future domestic
subsidiaries of Holdings that will guarantee the notes;
|
·
|
the
term “outstanding notes” refers to the 8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014 and the
Second
Priority Senior Secured Floating Rate Notes due 2014 which we issued
previously without registration under the Securities Act.
|
·
|
the
term “exchange notes” refers to 8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014 and the
Second
Priority Senior Secured Floating Rate Notes due 2014 that are registered
under the Securities Act of 1933, and which we are hereby offering
to
exchange for the outstanding notes;
|
·
|
the
term “fixed rate notes” refers to the portion of the exchange notes
comprised of the 8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014;
|
·
|
the
term “floating rate notes” refers to the portion of the exchange notes
comprised of the Second Priority Senior Secured Floating Rate Notes
due
2014;
|
·
|
the
term “Goldman” refers to The Goldman Sachs Group, Inc. and its
affiliates;
|
·
|
the
term “notes” refers to the outstanding notes and the exchange
notes;
|
·
|
the
term “PE” refers to polyethylene;
|
·
|
the
term “PET” refers to polyethylene terephthalate;
|
·
|
the
term “PP” refers to polypropylene;
|
·
|
the
term “HDPE” refers to high density polyethylene; and
|
·
|
the
term “LDPE” refers to low density polyethylene.
|
Our
fiscal years are 52- or 53-week periods ending generally on the Saturday
closest
to December 31. All references herein to “fiscal 2005,” “fiscal 2004,” and
“fiscal 2003” relate to the fiscal years ended December 31,
2005, January 1, 2005, and December 27, 2003, respectively.
The
following summary highlights information contained elsewhere in this prospectus
and is qualified in its entirety by the more detailed information and
consolidated financial statements included elsewhere in this prospectus.
This
summary is not complete and may not contain all of the information that may
be
important to you. You should carefully read the entire prospectus, including
the
“Risk Factors” section and our consolidated financial statements and notes to
those statements, before making an investment decision.
Our
Company
We
believe we are one of the world’s leading manufacturers and suppliers of
value-added plastic packaging products. We manufacture a broad range of
innovative, high quality packaging solutions using our collection of over
1,500
proprietary molds and an extensive set of internally developed processes
and
technologies. Our principal products include open top containers, drink cups,
bottles, closures and overcaps, tubes and prescription vials which we sell
into
a diverse selection of attractive and stable end markets, including food
and
beverage, healthcare, personal care, quick service and family dining
restaurants, custom and retail. We sell our packaging solutions to over 12,000
customers comprised of a favorable balance of leading national blue-chip
customers as well as a collection of smaller local specialty businesses.
We
believe that our proprietary tools and technologies, low-cost manufacturing
capabilities and significant operating and purchasing scale provide us with
a
competitive advantage in the marketplace. Our unique combination of leading
market positions, proven management team, product and customer diversity
and
manufacturing and design innovation provides access to a variety of growth
opportunities and has allowed us to achieve consistent organic volume growth
in
excess of market growth rates.
Industry
Overview
We
operate in the plastic segment of the $109 billion U.S. packaging sector,
which
accounted for $39 billion, or 36%, of total packaging industry sales in 2003,
the most recently reported year. Demand for plastic packaging products is
driven
by the consumption of consumer products including food, beverages,
pharmaceuticals and personal care products. Plastic packaging has gained,
and is
expected to continue to gain, market share versus other packaging materials,
driven by factors including consumer preference, weight advantages, shatter
resistance and barrier properties. The Freedonia Group, Inc. (“Freedonia”)
estimates annual plastic packaging market growth of 5.2% through 2013, compared
to 3.4% annual growth for the overall packaging industry.
The
product categories on which we focus utilize similar manufacturing processes,
share common raw materials (principally PP and PE resin) and sell into end
markets where customers demand innovative packaging solutions and quick and
seamless design and delivery. We organize our business into two operating
divisions: open top and closed top.
Open
Top
We
believe our open top division offers one of the broadest product lines of
injection molded containers and drink cups among U.S.-based manufacturers
and is
an innovator in
thermoforming
technology, with a leading position in thermoformed drink cups. The open
top
division is organized into the following product lines:
Containers.
Our
container offerings include 4-ounce to 5-gallon plastic containers and
lids. We
believe that we have leading positions in attractive injection-molded plastic
container segments including dairy (yogurt, frozen dessert and institutional),
thinwall (household products and food) and pry-off (building materials),
as well
as a leading position in clear PP containers (high value food and consumer
applications). We use industry-leading decorating technology, including
offset
printing, heat transfer labels and in-mold labels. We have long-standing
supply
relationships with many of the nation’s leading food and consumer products
companies, including Dean Foods, General Mills, Kraft, Kroger and Unilever.
Drink
cups.
We are
the leading producer of thermoformed deep draw PP plastic drink cups, driven
by
our development of an innovative manufacturing process that provides a
superior
combination of value and performance relative to competing processes. In
addition, we believe we are the largest provider of injection-molded plastic
drink cups in the United States. Principal markets for our drink cups include
quick service and family dining restaurants, convenience stores, stadiums
and
retail stores. Many of our cups are decorated, often as promotional items,
and
we have a reputation in the industry for innovative, state-of-the-art design
and
graphics. Selected drink cup customers and end users include Hardee’s,
McDonald’s, Quik Trip, Subway and Yum! Brands.
Housewares.
We
produce semi-disposable plastic housewares and garden products, including
plates, bowls, pitchers, tumblers and outdoor flowerpots. We believe we
are the
nation’s largest provider of injection-molded seasonal semi-disposable
housewares. We sell these products using our recognized PackerWare brand
name to
major national retail marketers and chain stores, such as Wal-Mart, Target
and
Family Dollar. We believe our outstanding service and the ability to deliver
products in a timely manner with an extensive selection of colors and designs
further enhance our position in this market. As a result of these strengths,
we
now act as Wal-Mart’s category manager for its seasonal housewares department.
Closed
Top
Our
closed top division provides injection, compression, extruded and blow
molded
plastic products, which are organized into the following product lines:
Closures
and overcaps.
We are a
leading provider of closures in the pharmaceutical, vitamin and nutritional,
food, hot-fill beverage, spirits and personal care markets. Our technical
expertise and broad product offering in areas such as child-resistant,
continuous threaded, dispensing and tamper evident closures provide significant
competitive advantages. In addition, we believe we are the leading domestic
producer of injection-molded aerosol overcaps. We supply closures and aerosol
overcaps to food and beverage, healthcare and consumer products customers
including Bayer, Diageo, Pepsico and S.C. Johnson.
Prescription
vials and bottles.
We
are a
leading producer of prescription vials and supply some of the largest pharmacy
chains in the United States and Canada, including CVS, Target and Wal-Mart.
We
are also a leading producer of HDPE bottles for the pharmaceutical and
spice
markets. We sell these products to personal care, pharmaceutical, food
and
consumer product customers, including McCormick, Nature’s Bounty, John Paul
Mitchell and Novartis. The diversity of our prescription vials and bottles
offerings, our innovative designs and our ability to leverage our extensive
selection of closures position us to further expand our share in these
steadily
growing markets.
Tubes.
We
believe we are one of the largest suppliers of extruded plastic squeeze
tubes in
the United States. We principally serve the personal care market for products
such as
facial/cold
creams, shampoos, conditioners, bath/shower gels, lotions, sun care, hair
gels
and anti-aging creams. We believe that our ability to provide creative package
designs with state-of-the-art decorating, combined with a complementary line
of
dispensing closures, makes us an attractive supplier for many customers in
our
target markets including Kao Brands, L’Oreal and Procter &
Gamble.
Our
Strengths
Our
strengths include:
Leading
positions across a broad product offering.
Through
quality manufacturing, innovation in product design, a focus on customer
service
and a skilled and dedicated workforce, we have achieved leading competitive
positions in many of our major product lines including thinwall, pry-off,
dairy
and clear PP containers; drink cups; spice and pharmaceutical bottles and
prescription vials; and spirits, continuous thread and pharmaceutical closures.
We believe that our leading market positions enable us to attract and expand
our
business with blue chip customers, cross-sell products, launch new products
and
maintain high margins.
Large,
diverse and stable customer base.
We
sell
our products to over 12,000 customers in a diverse base of industries, including
pharmaceuticals, food, dairy and health and beauty. Our top 10 customers
accounted for less than 30% of net sales and our largest customer accounted
for
less than 7% of net sales for
fiscal
2005
.
Our
co-design capabilities and proactive approach to customer service makes us
an
integral part of our customers’ long-term marketing and packaging decisions.
This commitment to service and quality has resulted in numerous single-source
and long-term relationships. For example, the average term of our relationships
with our top 10 customers is 21 years. We have received numerous service,
quality and package design awards from customers including Alberto Culver,
Bayer, Clorox, Kraft and Perseco (McDonald’s).
Strong
organic growth through continued focus on best-in-class technology and
innovation.
We
believe that our manufacturing technology and expertise are among the best
in
the industry and that we are a leader in manufacturing expertise and new
product
innovation, as evidenced by our offering of an extensive proprietary product
line of value-added plastic packaging in North America. We currently own
over
1,500 proprietary molds and have pioneered a variety of production processes
such as what we believe to be the world’s largest deep draw PP thermoforming
system for drink cups. Other recent examples of product design successes
include
an innovative prescription package for Target Stores, a proprietary flip-top
closure for tubes and our Vent Band
™
compression closure for isotonic beverages (
e.g.
,
Gatorade
®
).
This
skill set has allowed us to consistently achieve annual organic volume growth
in
excess of market growth rates. We focus our research and development efforts
on
high value-added products that offer unique performance characteristics and
provide opportunities to achieve premium pricing and further enhance our
strategic position with our customers. Our sales force of over 100 dedicated
professionals works collaboratively with our customers’ marketing departments in
identifying and delivering new package designs.
Scale
and
low-cost operations drive profitability.
We are
one of the largest domestic manufacturers and suppliers of plastic packaging
products and we believe we are one of the lowest cost manufacturers in the
industry. We believe our size enables us to achieve superior operating
efficiencies and financial results through several scale-driven advantages.
Our
large, high volume equipment and flexible, cross-facility manufacturing
capabilities result in lower unit-production costs than many of our competitors
as we can leverage our fixed costs, higher capacity utilization and longer
production runs. Our scale also enhances our purchasing power
and
lowers our cost of raw materials such as resin. In addition, as a result
of the
strategic location of our 25 manufacturing facilities and our national footprint
of several warehouse and distribution facilities which are located throughout
the United States near our customers, we have broad distribution capabilities,
which reduce shipping costs and allow for quick turnaround times to our
customers. In addition, each of our over 240 managers is charged with meeting
specific cost reduction and productivity improvement targets each year, with
a
material amount of their compensation tied to their performance versus these
targets.
Ability
to pass through changes in the price of resin.
We
have
generally been able to pass through to our customers increases in costs of
raw
materials, especially resin, the principal raw material used in manufacturing
our products. Historically, we have consistently grown our earnings even
during
periods of volatility in raw material markets. We have contractual price
escalators/de-escalators tied to the price of resin with customers representing
more than 60% of net sales that result in relatively rapid price adjustments
to
these customers. In addition, we have experienced high success rates in quickly
passing through increases and decreases in the price of resin to customers
without indexed price agreements. We plan to pursue opportunities to jointly
purchase resin with other Apollo portfolio companies. These joint-purchasing
opportunities should generate further benefits in terms of our ability to
manage
our material.
Track
record of strong, stable free cash flow.
Our
strong earnings, combined with our modest capital expenditure profile, limited
working capital requirements and relatively low cash taxes due to various
tax
attributes, result in the generation of significant free cash flow. We have
a
consistent track record of generating high free cash flow as a percentage
of net
sales relative to our plastic packaging peers. In addition, the capital
expenditures required to support our targeted manufacturing platforms and
market
segments is lower than in many other areas of the plastic packaging industry.
Motivated
management team with highly successful track record.
We
believe our management team is among the deepest and most experienced in
the
packaging industry. Our 12 senior executives possess an average of 20 years
of
packaging industry experience, and have combined experience of over 236 years
at
Berry. The senior management team includes President and CEO Ira Boots, who
has
been with us for 28 years, and COO Brent Beeler and CFO Jim Kratochvil, who
have
each been with us for over 21 years. This team has been responsible for
developing and executing our strategy that has generated a track record of
earnings growth and strong free cash flow. In addition, management has
successfully integrated 22 acquisitions since 1988, and has generally achieved
significant reductions in manufacturing and overhead costs of acquired companies
by introducing advanced manufacturing processes, reducing headcount,
rationalizing facilities and tools, applying best practices and capitalizing
on
economies of scale. Members of our senior management team and other employees
own approximately 23% of the equity of Berry Plastics Group. on a fully diluted
basis.
Business
Strategy
Our
business strategy is to maintain and enhance our market position and leverage
our core strengths to increase profitability and maximize free cash flow
through
the continued implementation of the following:
Increase
sales to our existing customers
.
We
believe we have significant opportunities to increase our share of the packaging
purchases made by our over 12,000 existing customers as we expand our product
portfolio and extend our existing product lines.
For
example, our open top and closed top divisions are penetrating new markets
with
new products such as plastic ice cream containers, thermoformed PP containers
in
the prepared foods and deli packaging market, extruded bottles for shaving
can
systems in the shave gel market, and plastic pry-off containers in the home
improvement market. We believe our broad and growing product lines will allow
us
to capitalize on the corporate consolidation occurring among our customers
and
the continuing consolidation of their vendor relationships. With our extensive
manufacturing capabilities, product breadth and national distribution
capabilities, we can provide our customers with a cost-effective, single
source
from which to purchase a broad range of their plastic packaging needs. For
example, we were recently awarded all the cultured dairy container business
from
Dean Foods, in addition to the single source position we already maintain
with
respect to Dean Foods frozen foods plastic packaging.
Aggressively
pursue new customers
.
We
intend
to aggressively pursue new customer relationships in order to drive additional
organic growth. We believe that our national direct sales force, our ability
to
offer new customers a cost-effective, single source from which to purchase
a
broad range of plastic packaging products and our proven ability to design
innovative new products position us well to continue to grow and diversify
our
customer base. For example, our proprietary deep draw PP thermoforming
technology has allowed us to recently add Yum! Brands as a customer.
Manage
costs and capital expenditures to drive free cash flow and returns on
capital
.
We
continually focus on reducing our costs in order to maintain and enhance
our
low-cost position. We employ a team culture of continuous improvement operating
under an ISO management system and employing Six Sigma throughout the
organization. Our principal cost-reduction strategies include
(i) leveraging our scale to reduce material costs, (ii) efficiently
reinvesting capital into our manufacturing processes to maintain technological
leadership and achieve productivity gains, (iii) focusing on ways to
streamline operations through plant and overhead rationalization and
(iv) monitoring and rationalizing the number of vendors from which we
purchase materials in order to increase our purchasing power. In addition,
each
of our over 240 managers is charged with meeting specific cost reduction
and
productivity improvement targets each year, with a material amount of their
compensation tied to their performance versus these targets. Return on capital
is a key metric throughout the organization and we require that capital
expenditures meet certain return thresholds, which encourages prudent levels
of
spending on expansion and cost saving opportunities.
Selectively
pursue strategic acquisitions
.
In
addition to the significant growth in earnings and cash flow we expect to
generate from organic volume growth and continued cost reductions, we believe
that there is an opportunity for future growth through selective and prudent
acquisitions. Our industry is highly fragmented and our customers are focused
on
working with a small set of key vendors. We have a successful track record
of
executing and integrating acquisitions, having completed 22 acquisitions
since
1988, and have developed an expertise in synergy realization. We intend to
continue to apply a selective and disciplined acquisition strategy, which
is
focused on improving our financial performance in the long-term and further
developing our scale and diversity in new or existing product lines.
Recent
Developments
On
September 20, 2006, Merger Sub merged with and into BPC Holding Corporation
pursuant to an agreement and plan of merger (the “Merger Agreement”) with BPC
Holding Corporation, Berry Plastics Group (f/k/a BPC Holding Acquisition
Corp.)
and Merger Sub (a wholly-owned subsidiary of Berry Plastics Group). Following
the consummation of the merger of BPC Holding Corporation and Merger Sub,
BPC
Holding Corporation changed its name to
Berry
Plastics Holding Corporation. Pursuant to the Merger Agreement, we are now
a
wholly-owned subsidiary of Berry Plastics Group, the principal stockholders
of
which are Apollo Investment Fund VI, L.P., AP Berry Holdings, LLC and Graham
Partners II, L.P. Apollo Investment Fund VI, L.P. and AP Berry Holdings,
LLC are
affiliates of Apollo, which is a private investment firm that was founded
in
1990. Companies owned or controlled by Apollo or in which Apollo or its
affiliates have a significant equity investment include, among others, Goodman
Global, Inc., Hexion Specialty Chemicals, Inc., Nalco Company, MetalsUSA,
Inc.,
United Agri Products and Covalence Specialty Materials Holdings Corp. Graham
Partners II, L.P. is an affiliate of Graham Partners, Inc., a private equity
firm with over $850 million under management which has global interests in
plastics, packaging, machinery, building products and outsource manufacturing.
Companies owned or controlled by Graham Partners or in which Graham Partners
have significant equity investment include, among others, National Diversified
Sales, Inc., Supreme Corq LLC, Infiltrator Systems, Inc., Nailite International,
Inc., Line-X LLC and Western Industries, Inc. We refer to the merger and
payment
of merger consideration as the “Acquisition.”
The
Acquisition was funded with
shareholders’ equity and the following debt components:
·
|
Proceeds
from o
ur
issuance of $750.0 million aggregate principal amount of outstanding
notes;
|
·
|
New
borrowings of $675.0 million in Term B loans and $20.0 million under
the revolving credit facility, both as available under the senior
secured
credit facilities; and
|
·
|
Proceeds
from our issuance of $425.0 million aggregate principal amount of
senior
subordinated notes to affiliates of Goldman.
|
Pursuant
to the Merger Agreement, certain members of our senior management team and
other
employees have invested in shares of Berry Plastics Group’s common stock (the
“management shares”). Options to purchase shares of Berry Plastics Group’s
common stock have also been granted to all members of our senior management
team. We expect to grant additional options to purchase common stock of Berry
Plastics Group to other employees in the future from time to time. Approximately
23% of the outstanding common stock of Berry Plastics Group on a fully-diluted
basis is currently owned by members of our senior management team and other
employees.
On
September 20, 2006, we used a portion of the proceeds of the Acquisition
funding
to repay the outstanding term loans under our old senior secured credit
agreement and to repurchase all of the $335.0 million in aggregate outstanding
principal amount of our 10 ¾
%
Senior
Subordinated Notes due 2012 (the “old notes”) pursuant to a previously launched
tender offer (the “tender offer”). This prospectus is not an offer to exchange,
a solicitation of an offer to exchange or a solicitation of consents with
respect to the old notes. This exchange offer has been made solely pursuant
to a
registration rights agreement, dated as of September 20, 2006 (the “registration
rights agreement”).
Unless
the context indicates otherwise, references in this prospectus to the “senior
secured credit facilities” refers to such facilities following the Acquisition.
Risk
Factors
You
should consider carefully all the information set forth in this prospectus
and,
in particular, you should evaluate the specific factors set forth under “Risk
Factors” for risks you should consider in connection with the exchange
offer.
Additional
Information
Berry
Plastics Holding Corporation is a Delaware Corporation. Our principal executive
offices are located at 101 Oakley Street, Evansville, Indiana 47710. Our
telephone number is (812) 424-2904. Our website address is located at
www.berryplastics.com
.
The
information that appears on our website is not a part of, and is not
incorporated into, this prospectus.
Summary
of the Exchange Offer
The
following is a brief summary of the terms of the exchange offer. For a more
complete description of the exchange offer, see “The Exchange
Offer.”
Securities
Offered
|
Up
to $750,000,000 aggregate principal amount of the exchange notes
which
have been registered under the Securities Act.
|
|
The
form and terms of these exchange notes are identical in all material
respects to those of the outstanding notes of the same series except
that:
|
|
·
the
exchange notes have been registered under the U.S. federal securities
laws
and will not bear any legend restricting their transfer;
|
|
·
the
exchange notes bear a different CUSIP number than the outstanding
notes;
|
|
·
the
exchange notes will not be subject to transfer restrictions or entitled
to
registration rights; and
|
|
·
the
exchange notes will not be entitled to additional interest provisions
applicable to the outstanding notes in some circumstances relating
to the
timing of the exchange offer. See “The Ex
change
Offer―
Terms
of the Exchange Offer; Acceptance of Tendered Notes.”
|
The
Exchange Offer
|
We
are offering to exchange the exchange notes for a like principal
amount of
the outstanding notes.
|
|
We
will accept any and all outstanding notes validly tendered and not
withdrawn prior to 5:00 p.m., New York City time, on , 2006. Holders
may
tender some or all of their outstanding notes pursuant to the exchange
offer. However, outstanding notes may be tendered only in integral
multiples of $1,000 in principal amount, subject to a minimum denomination
of $2,000.
|
|
In
order to be exchanged, an outstanding note must be properly tendered
and
accepted. All outstanding notes that are validly tendered and not
withdrawn will be exchanged. As of the date of this prospectus, there
are
$750,000,000 aggregate principal amount of outstanding notes, comprised
of
$525,000,000 8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000
Second Priority Senior Secured Floating Rate Notes due 2014. We will
issue
exchange notes promptly after the expiration of the exchange offer.
See
“The Exchange Of
fer―Terms
of the Exchange Offer―Acceptance of Tendered Notes.”
|
Transferability
of Exchange Notes
|
Based
on interpretations by the staff of the SEC, as detailed in previous
no-action letters issued to third parties, we believe that the exchange
notes issued in the exchange offer may be offered for resale, resold
or
otherwise transferred by you without compliance with the registration
and
prospectus delivery requirements of the Securities Act as long
as:
|
|
·
you
are acquiring the exchange notes in the ordinary course of your
business;
|
|
·
you
are not participating, do not intend to participate and have no
arrangement or understanding with any person to participate in a
distribution of the exchange notes; and
|
|
·
you
are not our “affiliate” as defined in Rule 405 under the Securities
Act.
|
|
If
you are an affiliate of ours, or are engaged in or intend to engage
in or
have any arrangement or understanding with any person to participate
in
the distribution of the exchange notes:
|
|
·
you
cannot rely on the applicable interpretations of the staff of the
SEC;
|
|
·
you
will not be entitled to participate in the exchange offer;
and
|
|
·
you
must comply with the registration and prospectus delivery requirements
of
the Securities Act in connection with any resale transaction.
|
|
Each
broker or dealer that receives exchange notes for its own account
in the
exchange offer for outstanding notes that were acquired as a result
of
market-making or other trading activities must acknowledge that it
will
comply with the prospectus delivery requirements of the Securities
Act in
connection with any offer to resell or other transfer of the exchange
notes issued in the exchange offer.
|
|
Furthermore,
any broker-dealer that acquired any of its outstanding notes directly
from
us, in the absence of an exemption therefrom,
|
|
·
may
not rely on the applicable interpretation of the staff of the SEC’s
position contained in Exxon Capital Holdings Corp., SEC no-action
letter
(April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action letter
(June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2,
1993); and
|
|
·
must
comply with the registration and prospectus delivery requirements
of the
Securities Act in connection with any resale of the exchange
notes.
|
|
See
“Plan of Distribution.”
|
|
We
do not intend to apply for listing of the exchange notes on any securities
exchange or to seek approval for quotation through an automated quotation
system. Accordingly, there can be no assurance that an active market
will
develop upon completion of the exchange offer or, if developed, that
such
market will be sustained or as to the liquidity of any
market.
|
Expiration
Date
|
The
exchange offer will expire at 5:00 p.m., New York City time, on
, 2006, unless we extend the expiration
date.
|
Exchange
Date; Issuance of Exchange Notes
|
The
date of acceptance for exchange of the outstanding notes is the exchange
date, which will be the first business day following the expiration
date
of the exchange offer. We will issue the exchange notes in exchange
for
the outstanding notes tendered and accepted in the exchange offer
promptly
following the exchange date. See “The Exchange Of
fer―Terms
of the Exchange Offer; Acceptance of Tendered Notes.”
|
Conditions
to the Exchange Offer
|
The
exchange offer is subject to customary conditions. We may assert
or waive
these conditions in our reasonable discretion. See “The Exchange
Of
fer―Conditi
ons
to the Exchange Offer” for more information regarding conditions to the
exchange offer.
|
Special
Procedures for Beneficial Holders
|
If
you beneficially own outstanding notes that are registered in the
name of
a broker, dealer, commercial bank, trust company or other nominee
and you
wish to tender in the exchange offer, you should contact such registered
holder promptly and instruct such person to tender on your behalf.
See
“The Ex
change
Offer―Procedures for Tendering Ou
tstanding
Notes.”
|
Effect
of Not Tendering
|
Any
outstanding notes that are not tendered in the exchange offer, or
that are
not accepted in the exchange, will remain subject to the restrictions
on
transfer. Since the outstanding notes have not been registered under
the
U.S. federal securities laws, you will not be able to offer or sell
the
outstanding notes except under an exemption from the requirements
of the
Securities Act or unless the outstanding notes are registered under
the
Securities Act. Upon the completion of the exchange offer, we will
have no
further obligations, except under limited circumstances, to provide
for
registration of the outstanding notes under the U.S. federal securities
laws. See “The Exchan
ge
Offer―Effect of Not Tendering.”
|
Withdrawal
Rights
|
You
may withdraw your tender at any time before the exchange offer
expires.
|
Interest
on Exchange Notes and the Outstanding Notes
|
The
exchange notes will bear interest from the most recent interest payment
date to which interest has been paid on the outstanding notes, or,
if no
interest has been paid, from September 20, 2006. Interest on the
outstanding notes accepted for exchange will cease to accrue upon
the
issuance of the exchange notes.
|
Acceptance
of Outstanding Notes and Delivery of Exchange Notes
|
Subject
to the condit
ions
stated in the section “The Exchange Offer―Conditions to the Exchange
O
ffer”
of this prospectus, we will accept for exchange any and all outstanding
notes which are properly tendered in the exchange offer before 5:00
p.m.,
New York City time, on the ex
piration
date. The exchange notes will be delivered promptly after the expiration
date. See “The Exchange Offer―Terms of the Exchange Offer; Acceptance of
Tendered Notes.”
|
Material
United States Federal Income Tax Considerations
|
The
exchange by a holder of outstanding notes for exchange notes to be
issued
in the exchange offer should not result in a taxable transaction
for U.S.
federal income tax purposes. See “Material United States Federal Income
Tax Consequences.”
|
Accounting
Treatment
|
We
will not recognize any gain or loss for accounting purposes upon
the
completion of the exchange offer. The expenses of the exchange offer
that
we pay will be charged to expense in accordance with generally accepted
accounting principles. See “The
Exchange Offer―Accounting Treatment.”
|
Exchange
Agent
|
Wells
Fargo Bank, National Association, the trustee under the Indenture,
is
serving as exchange agent in connection with the exchange offer.
The
address and telephone number of the exchange agent are listed under
the
heading “The Exchange Of
fer―Exchange
Agent.”
|
Use
of Proceeds
|
We
will not receive any proceeds from the issuance of exchange notes
in the
exchange offer. We will pay all expenses incident to the exchange
offer.
See “Use of Proceeds.”
|
Summary
of the Terms of the Exchange Notes
The
form
and terms of the exchange notes and the outstanding notes are identical in
all
material respects, except that the transfer restrictions, registration rights
and additional interest provisions in some circumstances relating to the timing
of the exchange offer, which are applicable to the outstanding notes, do not
apply to the exchange notes. The exchange notes will evidence the same debt
as
the outstanding notes and will be governed by the same Indenture.
Issuer
|
Holdings
|
Securities
|
$750,000,000
aggregate principal amount of Second Priority Senior Secured Notes
due
2014, comprised of $525,000,000 aggregate principal amount of our
8
7
/
8
%
second priority senior secured fixed rate notes due 2014 and $225,000,000
aggregate principal amount of our second priority senior secured
floating
rate notes due 2014.
|
Maturity
Date
|
September
15, 2014.
|
Fixed
Rate Notes
|
The
fixed rate notes will bear interest at a rate of 8
7
/
8
%
per annum, payable semiannually on March 15 and September 15 of
each year, commencing March 15, 2007.
|
Floating
Rate Notes
|
The
floating rate notes will bear interest at a rate of LIBOR plus 3.875%
per
annum, which will reset quarterly. Interest on the floating rate
notes
will be payable quarterly on March 15, June 15,
September 15 and December 15 of each year, commencing December
15, 2006.
|
Collateral
|
The
exchange notes and the guarantees of the exchange notes will be secured
by
a second priority security interest in the collateral granted to
the
collateral agent for the benefit of the holders of the exchange notes
and
other future parity lien debt that may be issued pursuant to the
terms of
the Indenture governing the exchange notes. These liens will be junior
in
priority to the liens on the same collateral securing our senior
secured
credit facilities and to all other permitted prior liens, including
liens
securing certain hedging obligations and cash management obligations.
The
liens securing priority lien obligations are held by the collateral
agent
under our senior secured credit facilities.
|
|
The
collateral securing the exchange notes will be substantially all
of our
and the guarantors’ property and assets that will secure our senior
secured credit facilities, which excludes (i) any license, contract
or
agreement of ours or the guarantors, if and only for so long as the
grant
of a security interest under the security documents would result
in a
breach or default under, or abandonment, invalidation or unenforceability
of that license, contract or agreement; (ii) any bank accounts, securities
accounts or cash and (iii) certain other limited exclusions. While
the collateral securing our senior secured credit facilities will
include
the equity interests of substantially all of our domestic subsidiaries
and
“first-tier” foreign subsidiaries, the collateral securing the exchange
notes will not include securities and other equity interests of our
subsidiaries. For more information, see
“Description
of the Notes—Security for the Exchange Notes.”
|
Intercreditor
Agreement
|
The
trustee under the Indenture governing the exchange notes and the
collateral agent under our senior secured credit facilities have
entered
into an intercreditor agreement as to the relative priorities of
their
respective security interests in our assets securing the exchange
notes
and borrowings under our senior secured credit facilities and certain
other matters relating to the administration of security interests.
The
terms of the intercreditor agreement are set forth under “Description of
the Notes—Security for the Exchange Notes.”
|
Optional
Redemption
|
|
Fixed
Rate Notes
|
Prior
to September 15, 2010, we may redeem some or all of the fixed rate
exchange notes at a price equal to 100% of the principal amount of
the
fixed rate exchange notes redeemed plus accrued and unpaid interest
and
additional interest, if any, to the redemption date plus the “applicable
premium.” On or after September 15, 2010, we may redeem some or all of the
fixed rate exchange notes at the redemption prices set forth in this
prospectus. Additionally, on or prior to September 15, 2009, we may
redeem
up to 35% of the aggregate principal amount of the fixed rate exchange
notes with the net proceeds of specified equity offerings at the
redemption price set forth in this prospectus. See “Description of the
Exchange Notes—Optional Redemption—Fixed Rate Exchange
Notes.”
|
Floating
Rate Notes
|
On
or after September 15, 2008, we may redeem some or all of the floating
rate exchange notes at the redemption prices set forth in this prospectus.
Additionally, on or prior to September 15, 2008, we may redeem up
to 35%
of the aggregate principal amount of the floating rate exchange notes
with
the net proceeds of specified equity offerings at the redemption
price set
forth in this prospectus. See “Description of the Exchange Notes—Optional
Redemption—Floating Rate Exchange Notes.”
|
Change
of Control
|
If
a change of control occurs, we must give holders of the exchange
notes an
opportunity to sell to us their exchange notes at a purchase price
of 101%
of the principal amount of such exchange notes, plus accrued and
unpaid
interest to the date of purchase. The term “Change of Control” is defined
under “Description of the Exchange Notes—Change of Control.”
|
Guarantees
|
The
exchange notes will be guaranteed, jointly and severally, on a second
priority senior secured basis, by each of our domestic subsidiaries
that
guarantees our senior secured credit facilities.
|
Ranking
|
The
exchange notes and the guarantees thereof will be our and the guarantors’
second priority senior secured obligations and will:
|
|
·
rank
equally in right of payment with all of our and the guarantors’ existing
and future senior indebtedness;
|
|
·
rank
senior to all of our and the guarantors’ existing and future subordinated
indebtedness, including the senior subordinated notes; and
|
|
·
be
effectively subordinated to all of our first priority secured debt,
including the borrowings under the senior secured credit facilities,
to
the extent of the collateral securing such debt.
|
|
The
exchange notes will also be effectively junior to liabilities of
the
non-guarantor subsidiaries. As of July 1, 2006, our non-guarantor
subsidiaries had liabilities of $56.5 million.
|
|
As
of September 20, 2006, we had outstanding on a consolidated
basis:
|
|
·
$720.4
million of secured senior indebtedness constituting first priority
lien
obligations, primarily consisting of the term B loans under the senior
secured credit facilities;
|
|
·
$1,470.4
million of secured senior indebtedness, consisting primarily of the
term B
loans under the senior secured credit facilities and the outstanding
notes; and
|
|
·
$425.0
million of unsecured senior subordinated indebtedness, consisting
of the
senior subordinated notes.
|
Restrictive
Covenants
|
The
Indenture governing the exchange notes contains covenants that will
limit
our ability and certain of our subsidiaries’ ability to:
|
|
·
incur
or guarantee additional indebtedness;
·
pay
dividends and make other restricted payments;
·
create
restrictions on the payment of dividends or other distributions to
us from
our restricted subsidiaries;
·
create
or incur certain liens;
·
make
certain investments;
·
engage
in sales of assets and subsidiary stock; and
·
transfer
all or substantially all of our assets or enter into merger or
consolidation Acquisition.
|
|
These
covenants are subject to a number of important limitations and exceptions
as described under “Description of the Exchange Notes—Certain Covenants.”
Certain covenants will cease to apply to the exchange notes at all
times
after the exchange notes have investment grade ratings from both
Moody’s
Investors Service, Inc., or Moody’s, and Standard & Poor’s
Ratings Group, or S&P; provided that no event of default has occurred
and is continuing. Similarly, the “Change of Control” covenant will be
suspended with respect to the exchange notes during all periods when
the
notes have investment grade ratings from Moody’s and S&P; provided
that no event of default has occurred and is
continuing.
|
Listing
|
We
expect that the exchange notes will be eligible for trading in PORTAL,
a
subsidiary of The Nasdaq Stock Market, Inc.
|
Summary
Historical and Unaudited Pro Forma Financial Data
The
following table sets forth
certain of our historical and pro forma financial data. Our fiscal years are
52-
or 53-week periods ending generally on the Saturday closest to December 31.
All
references herein to “fiscal 2005,” “fiscal 2004” and “fiscal 2003” relate to
the fiscal years ended December 31, 2005, January 1, 2005 and December 27,
2003,
respectively. The summary historical financial data for fiscal 2005, fiscal
2004
and fiscal 2003 have been derived from our consolidated financial statements
and
related notes thereto included elsewhere in this prospectus, which have been
audited by Ernst & Young LLP, an independent registered public accounting
firm.
The
summary historical
financial data as of and for the 26 weeks ended July 1, 2006 and July 2, 2005
is
derived from our unaudited financial statements included elsewhere in this
prospectus. The summary historical financial data set forth below should be
read
in conjunction with and is qualified in its entirety by reference to the audited
and unaudited consolidated financial statements and the related notes included
elsewhere in this prospectus.
The
following table also includes summary unaudited pro forma financial information
as of and for fiscal 2005 and for the 26 week periods ended July 2, 2005 and
July 1, 2006.
The
summary unaudited pro forma financial information has been derived from the
pro
forma financial information set forth under “Unaudited Pro Forma Condensed
Consolidated Financial Information,” which has been prepared to give pro forma
effect to the Acquisition. The summary unaudited pro forma condensed
consolidated statement of income data gives effect to the Acquisition as if
it
had occurred on the first day of the applicable period. The summary unaudited
pro forma condensed consolidated balance sheet data as of July 1, 2006 gives
effect to the Acquisition as if it had occurred on July 1, 2006.
The
Acquisition has been accounted for using the purchase method of accounting.
The
final allocation of the purchase price in the Acquisition will be determined
at
a later date and depend on a number of factors, including the final valuation
of
our tangible and identifiable intangible assets acquired and liabilities assumed
in the Acquisition. An independent third-party appraiser will perform a
valuation of these assets as of the closing date of the Acquisition, and upon
a
final valuation the purchase allocation will be adjusted. Such final
adjustments, including increases to depreciation and amortization resulting
from
the allocation of purchase price to amortizable tangible and intangible assets,
may be material. This valuation will be based on the actual net tangible and
intangible assets and liabilities that existed as of the closing date of the
Acquisition. In addition, we will record an adjustment to stockholders’ equity
at a later date to adjust the carryover basis of continuing ownership.
As
a
result of the Acquisition, Holdings is a wholly-owned subsidiary of Berry
Plastics Group with assets liabilities and an equity structure that will not
be
comparable to historical periods. Consequently, our historical consolidated
financial information may not be comparable to or indicative of our future
performance.
The
summary unaudited pro forma financial information is for informational purposes
only and does not purport to represent what our results of operation or
financial position would have been if the Acquisition had occurred as of the
dates indicated or what such results will be for future periods, and such
information does not purport to project the results of operations for any future
period.
The
following data should be read in conjunction with “Risk Factors,” “Unaudited Pro
Forma Condensed Consolidated Financial Information,” “Selected Historical
Financial Data,” “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and our consolidated financial statements and related
notes thereto included elsewhere in this prospectus.
|
|
Historical
|
|
Pro
Forma
|
|
|
|
|
|
|
|
|
|
26
Weeks Ended
|
|
|
|
26
Weeks Ended
|
|
|
|
Fiscal
2003
|
|
Fiscal
2004
|
|
Fiscal
2005
|
|
July 2,
2005
|
|
July 1,
2006
|
|
Fiscal
2005
|
|
July
2,
2005
|
|
July 1,
2006
|
|
|
|
|
|
|
|
(dollars
in t
housands)
|
|
|
|
|
|
|
|
|
|
Statement
of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
551,876
|
|
$
|
814,213
|
|
$
|
1,169,704
|
|
$
|
508,181
|
|
$
|
731,078
|
|
$
|
1,338,019
|
|
$
|
676,496
|
|
$
|
731,078
|
|
Cost
of goods sold
|
|
|
420,750
|
|
|
639,329
|
|
|
943,370
|
|
|
417,493
|
|
|
583,941
|
|
|
1,082,478
|
|
|
556,601
|
|
|
583,941
|
|
Gross
profit
|
|
|
131,126
|
|
|
174,884
|
|
|
226,334
|
|
|
90,688
|
|
|
147,137
|
|
|
255,541
|
|
|
119,895
|
|
|
147,137
|
|
Operating
expenses
|
|
|
59,936
|
|
|
81,008
|
|
|
110,545
|
|
|
40,227
|
|
|
70,282
|
|
|
134,162
|
|
|
62,344
|
|
|
71,921
|
|
Operating
income
|
|
|
71,190
|
|
|
93,876
|
|
|
115,789
|
|
|
50,461
|
|
|
76,855
|
|
|
121,379
|
|
|
57,551
|
|
|
75,216
|
|
Other
expenses (income)
(1)
|
|
|
(7
|
)
|
|
—
|
|
|
1,354
|
|
|
1,569
|
|
|
(299
|
)
|
|
8,705
|
|
|
8,920
|
|
|
(299
|
)
|
Loss
on extinguished debt
(2)
|
|
|
250
|
|
|
—
|
|
|
7,045
|
|
|
7,045
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Interest
expense, net
(3)
|
|
|
45,413
|
|
|
53,185
|
|
|
73,274
|
|
|
30,123
|
|
|
44,511
|
|
|
167,861
|
|
|
83,815
|
|
|
84,114
|
|
Income
(loss)before income taxes
|
|
|
25,534
|
|
|
40,691
|
|
|
34,116
|
|
|
11,724
|
|
|
32,643
|
|
|
(55,187
|
)
|
|
(35,184
|
)
|
|
(8,599
|
)
|
Income
taxes (benefit)
|
|
|
12,486
|
|
|
17,740
|
|
|
14,325
|
|
|
6,174
|
|
|
14,731
|
|
|
(24,835
|
)
|
|
(15,832
|
)
|
|
(3,869
|
)
|
Net
income (loss)
|
|
$
|
13,048
|
|
$
|
22,951
|
|
$
|
19,791
|
|
$
|
5,550
|
|
$
|
17,912
|
|
$
|
(30,352
|
)
|
$
|
(19,352
|
)
|
$
|
(4,730
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheet Data
(at
period end):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working
capital
(4)
|
|
$
|
88,850
|
|
$
|
118,981
|
|
$
|
211,118
|
|
$
|
154,675
|
|
$
|
196,032
|
|
|
|
|
|
|
|
$
|
196,032
|
|
Total
assets
|
|
|
1,015,806
|
|
|
1,005,144
|
|
|
1,647,830
|
|
|
1,553,641
|
|
|
1,673,286
|
|
|
|
|
|
|
|
|
2,672,929
|
|
Total
debt
|
|
|
751,605
|
|
|
697,558
|
|
|
1,160,620
|
|
|
1,167,554
|
|
|
1,135,820
|
|
|
|
|
|
|
|
|
1,896,659
|
|
Stockholders’
equity
|
|
|
152,591
|
|
|
183,891
|
|
|
203,388
|
|
|
182,692
|
|
|
227,669
|
|
|
|
|
|
|
|
|
483,519
|
|
Other
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and Amortization
(5)
|
|
$
|
44,078
|
|
$
|
60,816
|
|
$
|
88,720
|
|
$
|
34,149
|
|
$
|
53,996
|
|
$
|
100,034
|
|
$
|
45,463
|
|
$
|
53,996
|
|
Capital
Expenditure
(6)
|
|
|
29,949
|
|
|
52,624
|
|
|
57,829
|
|
|
32,303
|
|
|
52,217
|
|
|
68,681
|
|
|
43,155
|
|
|
52,217
|
|
Ratio
of Earnings to Fixed Charges
(7)
|
|
|
1.5
X
|
|
|
1.7
X
|
|
|
1.4
X
|
|
|
1.4X
|
|
|
1.7
X
|
|
|
(7
|
)
|
|
(7
|
)
|
|
(7
|
)
|
EBITDA
(8)
|
|
|
115,275
|
|
|
154,692
|
|
|
203,155
|
|
|
83,041
|
|
|
131,150
|
|
|
212,708
|
|
|
94,094
|
|
|
129,511
|
|
Bank
Compliance EBITDA
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
250,602
|
|
$
|
113,059
|
|
$
|
149,547
|
|
(1)
Other
expenses (income) consist of net losses (gains) on disposal of property and
equipment and unrealized loss (gain) on investment in Southern
Packaging.
(2)
In
2005,
the loss on extinguished debt represents unamortized deferred financing costs
on
the term loan expensed as a result of an amendment to our existing senior
secured credit facilities. The loss on extinguished debt in 2003 represents
the
legal costs associated with amending our existing senior secured credit
facilities in connection with the acquisition (the “Landis Acquisition”) of
Landis Plastics, Inc. (“Landis”).
(3)
Includes
non-cash interest expense of $2,318, $1,862, $1,945, $982 and $954, in fiscal
2003, 2004 and 2005 and the 26 weeks ended July 2, 2005 and July 1, 2006,
respectively, and pro forma non-cash interest expense of $5,230 for fiscal
2005
and $2,615 for the twenty-six week periods ended July 2, 2005 and July 1,
2006.
(4)
Represents
total current assets (other than cash) less total current liabilities (other
than accrued interest and the current portion of long-term debt).
(5)
Depreciation
and amortization excludes non-cash amortization of deferred financing fees
and
debt premium/discount amortization, which are included in interest
expense.
(6)
Pro
Forma
capital expenditures include purchases made by Kerr Group, Inc. prior to our
acquisition of the company.
(7)
For
the
purposes of calculating the ratio of earnings to fixed charges, earnings
represent income (loss) before income taxes plus fixed charges. Fixed charges
consist of financing costs and the portion of operational rental expense which
management believes is representative of interest within rent expense. The
ratio
of earnings to fixed charges should be read in conjunction with the financial
statements and other financial data included in this prospectus. Pro forma
fiscal 2005 and the pro forma 26 weeks ended July 2, 2005 and July 1, 2006
have
a shortfall of $53,957, $34,697 and $7,465 respectively.
(8)
EBITDA
represents net income before interest expense, net, income taxes and
depreciation and amortization. Bank Compliance EBITDA represents EBITDA as
further adjusted. Bank Compliance EBITDA is a financial measure used in the
indentures governing the notes being offered hereby and the new senior
subordinated notes and in our new senior secured credit facilities as a
component of a coverage ratio that is used to test whether certain transactions
are permitted. Adjustments to arrive at
Bank
Compliance EBITDA
are
permitted in calculating covenant compliance in the indenture governing the
notes. We believe that the inclusion of these adjustments to net income applied
in presenting
Bank
Compliance EBITDA
are
appropriate to provide additional information to investors about certain
non-cash items and about unusual items that we do not expect to continue at
the
same level in the future.
Bank
Compliance EBITDA
differs
from the term “EBITDA” as it is commonly used. EBITDA and
Bank
Compliance EBITDA
are
not
measures of financial performance under GAAP and may not be comparable to
similarly titled measures of other companies. You should not consider our EBITDA
or
Bank
Compliance EBITDA
as
alternatives to operating or net income, determined in accordance with GAAP,
as
indicators of our operating performance, or as an alternative to cash flows
from
operating activities, determined in accordance with GAAP.
Reconciliation
of net income (loss) to EBITDA and Bank Compliance EBITDA
|
|
Historical
|
|
Pro
Forma
|
|
|
|
|
|
|
|
|
|
26
Weeks Ended
|
|
|
|
26
Weeks Ended
|
|
|
|
Fiscal
2003
|
|
Fiscal
2004
|
|
Fiscal
2005
|
|
July 2,
2005
|
|
July 1,
2006
|
|
Fiscal
2005
|
|
July
2, 2005
|
|
July
1, 2006
|
|
|
|
(dollars
in thousands)
|
|
Net
income (loss)
|
|
$
|
13,048
|
|
$
|
22,951
|
|
$
|
19,791
|
|
$
|
5,550
|
|
$
|
17,912
|
|
$
|
(30,352
|
)
|
$
|
(19,352
|
)
|
$
|
(4,730
|
)
|
Interest
expense, net
(a)
|
|
|
45,663
|
|
|
53,185
|
|
|
80,319
|
|
|
37,168
|
|
|
44,511
|
|
|
167,861
|
|
|
83,815
|
|
|
84,114
|
|
Income
taxes (benefit)
|
|
|
12,486
|
|
|
17,740
|
|
|
14,325
|
|
|
6,174
|
|
|
14,731
|
|
|
(24,835
|
)
|
|
(15,832
|
)
|
|
(3,869
|
)
|
Depreciation
and amortization
|
|
|
44,078
|
|
|
60,816
|
|
|
88,720
|
|
|
34,149
|
|
|
53,996
|
|
|
100,034
|
|
|
45,463
|
|
|
53,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
115,275
|
|
$
|
154,692
|
|
$
|
203,155
|
|
$
|
83,041
|
|
$
|
131,150
|
|
$
|
212,708
|
|
$
|
94,094
|
|
$
|
129,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
to Pro Forma EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,000
|
|
|
1,500
|
|
|
1,639
|
|
Non-cash
compensation
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,152
|
|
|
—
|
|
|
1,976
|
|
One-time
expenses
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,742
|
|
|
2,965
|
|
|
7,921
|
|
Pro
forma synergies
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,000
|
|
|
14,500
|
|
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank
Compliance EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
250,602
|
|
$
|
113,059
|
|
$
|
149,547
|
|
__________________
(a)
Includes
loss on extinguished debt.
(b)
Represents
equity-based compensation paid to management.
(c)
Represents
non-recurring items such as expenses related to the integration of the June
2005
acquisition (the “Kerr Acquisition”) of the Kerr Group, Inc. (“Kerr”), gains on
investment and project start-up costs from July 3, 2005.
(d)
Represents
the estimated pro forma impact of synergies from the Kerr Acquisition and from
the joint purchasing of resin and other materials and services with other
companies owned by Apollo.
Reconciliation
of net cash provided by operating activities to Bank Compliance
EBITDA.
|
|
Pro
Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26
Weeks Ended
|
|
|
|
Fiscal
2005
|
|
July
2, 2005
|
|
July
1, 2006
|
|
|
|
|
|
|
|
|
|
Net
cash provided by operating activities (historical)
|
|
|
101,546
|
|
|
51,385
|
|
|
87,142
|
|
Pro
forma adjustments:
|
|
|
|
|
|
|
|
|
|
|
Management
fees
|
|
|
(3,000
|
)
|
|
(1,500
|
)
|
|
(1,639
|
)
|
Kerr
acquisition
|
|
|
11,199
|
|
|
11,199
|
|
|
-
|
|
Cash
interest expense
|
|
|
(91,132
|
)
|
|
(51,974
|
)
|
|
(37,857
|
)
|
Net
cash provided by operating activities (pro forma)
|
|
|
18,613
|
|
|
9,110
|
|
|
47,646
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
income taxes
|
|
|
1,556
|
|
|
533
|
|
|
898
|
|
Cash
interest expense
|
|
|
162,461
|
|
|
81,115
|
|
|
81,414
|
|
Increase
in working capital
|
|
|
32,230
|
|
|
3,336
|
|
|
1,529
|
|
Management
fees
|
|
|
3,000
|
|
|
1,500
|
|
|
1,639
|
|
One-time
expenses (See Note (c) in previous table)
|
|
|
9,742
|
|
|
2,965
|
|
|
7,921
|
|
Pro
forma synergies (See Note (d) in previous table)
|
|
|
23,000
|
|
|
14,500
|
|
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank
Compliance EBITDA
|
|
|
250,602
|
|
|
113,059
|
|
|
149,547
|
|
Investing
in the notes involves a high degree of risk. You should carefully consider
the
following risk factors and all other information contained in this
prospectus,
including our financial statements and the related notes, before deciding to
participate in the exchange offer. The risks described below are not the only
risks facing us. Additional risks and uncertainties not currently known to
us or
those we currently view to be immaterial may also materially and adversely
affect our business, financial condition or results of operations. If any of
the
following risks materialize, our business, financial condition or results of
operations could be materially and adversely affected. In that case, you may
lose some or all of your investment.
Risks
Related to our Exchange
Notes
and the Exchange Offer
If
you fail to exchange your outstanding notes, they will continue to be restricted
s
ecurities
and may become less liquid.
Outstanding
notes that you do not tender or that we do not accept will, following the
exchange offer, continue to be restricted securities, and you may not offer
to
sell them except under an exemption from, or in a transaction not subject to,
the Securities Act and applicable state securities laws. We will issue the
exchange notes in exchange for the outstanding notes in the exchange offer
only
following the satisfaction of the procedures and conditions set forth in “The
Exchange Offer―Procedures for Tendering Outstanding Notes.” Such procedures and
conditions include timely receipt by the exchange agent of such outstanding
notes and of a p
roperly
completed and duly executed letter of transmittal. Because we anticipate that
most holders of the outstanding notes will elect to exchange their outstanding
notes, we expect that the liquidity of the market for the outstanding notes
remaining after the completion of the exchange offer will be substantially
limited. Any outstanding notes tendered and exchanged in the exchange offer
will
reduce the aggregate principal amount at maturity of the outstanding notes.
Further, following the exchange offer, if you did not tender your outstanding
notes, you generally will not have any further registration rights, and such
outstanding notes will continue to be subject to certain transfer
restrictions.
You
may find it difficult to sell your exchange notes because there is no existing
trading market for the exchange notes.
The
exchange notes are being offered to the holders of the outstanding notes. The
outstanding notes were issued on September 20, 2006, primarily to a small number
of institutional investors. There is no existing trading market for the exchange
notes and there can be no assurance regarding the future development of a market
for the exchange notes, or the ability of the holders of the exchange notes
to
sell their exchange notes or the price at which such holders may be able to
sell
their exchange notes. If such a market were to develop, the exchange notes
could
trade at prices that may be higher or lower than the initial offering price
of
the outstanding notes depending on many factors, including prevailing interest
rates, our financial position, operating results and the market for similar
securities. We do not intend to apply for listing or quotation of the exchange
notes on any exchange and we do not know the extent to which investor interest
will lead to the development of a trading market or how liquid that market
might
be. The initial purchasers of the outstanding notes are not obligated to make
a
market in the exchange notes, and any market-making may be discontinued at
any
time
without
notice. Therefore, there can be no assurance as to the liquidity of any trading
market for the exchange notes or that an active market for the exchange notes
will develop. As a result, the market price of the exchange notes, as well
as
your ability to sell the exchange notes, could be adversely
affected.
Historically,
the market for non-investment grade debt has been subject to disruptions that
have caused substantial volatility in the prices of such securities. There
can
be no assurance that the market for the exchange notes will not be subject
to
similar disruptions. Any such disruptions may have an adverse effect on holders
of the exchange notes.
Broker-dealers
may become subject to the registration and prospectus delivery
r
equirements
of the Securities Act and any profit on the resale of the exchange notes may
be
deemed to be underwriting compensation under the Securities
Act.
Any
broker-dealer that acquires exchange notes in the exchange offer for its own
account in exchange for outstanding notes which it acquired through
market-making or other trading activities must acknowledge that it will comply
with the registration and prospectus delivery requirements of the Securities
Act
in connection with any resale transaction by that broker-dealer. Any profit
on
the resale of the exchange notes and any commission or concessions received
by a
broker-dealer may be deemed to be underwriting compensation under the Securities
Act.
You
may not receive the exchange notes in the exchange offer if the exchange offer
procedures are not properly followed.
We
will
issue the exchange notes in exchange for your outstanding notes only if you
properly tender the outstanding notes before expiration of the exchange offer.
Neither we nor the exchange agent are under any duty to give notification of
defects or irregularities with respect to the tenders of the outstanding notes
for exchange. If you are the beneficial holder of outstanding notes that are
held through your broker, dealer, commercial bank, trust company or other
nominee, and you wish to tender such notes in the exchange offer, you should
promptly contact the person through whom your outstanding notes are held and
instruct that person to tender on your behalf.
Our
substantial indebtedness could affect our ability to meet our obligations under
the exchange notes and may otherwise restrict our activities.
We
have a
significant amount of indebtedness. On September 20, 2006, we had a total
indebtedness of
$1,895.4
million (of which $750.0 million consists of outstanding notes) and we would
have been able to borrow a further $165.1 million under the revolving portion
of
our senior secured credit facilities.
We
are
permitted by the terms of the exchange notes and our other debt instruments
to
incur substantial additional indebtedness, subject to the restrictions therein.
Our inability to generate sufficient cash flow to satisfy our debt obligations,
or to refinance our obligations on commercially reasonable terms, would have
a
material adverse effect on our business, financial condition and results of
operations.
Our
substantial indebtedness could have important consequences to you. For example,
it could:
·
|
make
it more difficult for us to satisfy our obligations under our
indebtedness, i
ncluding
the exchange notes;
|
·
|
limit
our ability to borrow money for our working capital, capital expenditures,
debt service requirements or other corporate purposes;
|
·
|
require
us to dedicate a substantial portion of our cash flow to payments
on our
indebtedness, which would reduce the amount of cash flow available
to fund
working capital, capital expenditures, product development and other
corporate requirements;
|
·
|
increase
our vulnerability to general adverse economic and industry conditions;
|
·
|
limit
our ability to respond to business opportunities; and
|
·
|
subject
us to financial and other restrictive covenants, which, if we fail
to
comply with these covenants and our failure is not waived or cured,
could
result in an event of default under our debt.
|
Despite
our substantial indebtedness, we and our subsidiaries may still be able to
i
ncur
significantly more debt. This could intensify the risks described above.
The
terms
of the Indentures governing the exchange notes and the senior subordinated
notes
and the terms of our senior secured credit facilities will contain restrictions
on our and our subsidiaries’ ability to incur additional indebtedness, including
senior secured indebtedness that will be effectively senior to the exchange
notes to the extent of the assets securing such indebtedness. However, these
restrictions will be subject to a number of important qualifications and
exceptions, and the indebtedness incurred in compliance with these restrictions
could be substantial. Accordingly, we or our subsidiaries could incur
significant additional indebtedness in the future, much of which could
constitute secured or senior indebtedness. As of September
20,
2006,
we had $165.1 million available for additional borrowing under the revolving
credit facility,
all
of
which is secured. In addition to the exchange notes, the senior subordinated
notes and our borrowings under the senior secured credit facilities, the
covenants under any other existing or future debt instruments could allow us
to
borrow a significant amount of additional indebtedness. The more leveraged
we
become, the more we, and in turn our security holders, become exposed to the
risks described above under “
—
Our
substantial indebtedness could affect our ability to meet our obligations under
the exchange notes and may otherwise restrict our activities.”
We
may not be able to generate sufficient cash to service all of our indebtedness,
including the e
xchange
notes, and may be forced to take other actions to satisfy our obligations under
our indebtedness that may not be successful.
Our
ability to pay principal and interest on the exchange notes and to satisfy
our
other debt obligations will depend upon, among other things:
·
|
our
future financial and operating performance, which will be affected
by
prevai
ling
economic conditions and financial, business, regulatory and other
factors,
many of which are beyond our control; and
|
·
|
the
future availability of borrowings under our senior secured credit
facilities, which depends on, among other things, our complying with
the
covenants in our senior secured credit facilities.
|
We
cannot
assure you that our business will generate sufficient cash flow from operations,
or that future borrowings will be available to us under our senior secured
credit
facilities
or otherwise, in an amount sufficient to fund our liquidity needs, including
the
payment of principal and interest on the exchange notes. See “Forward-Looking
Statements” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Liquidity and Capital Resources Following the
Acquisition.”
If
our
cash flows and capital resources are insufficient to service our indebtedness,
we may be forced to reduce or delay capital expenditures, sell assets, seek
additional capital or restructure or refinance our indebtedness, including
the
exchange notes. These alternative measures may not be successful and may not
permit us to meet our scheduled debt service obligations. Our ability to
restructure or refinance our debt will depend on the condition of the capital
markets and our financial condition at such time. Any refinancing of our debt
could be at higher interest rates and may require us to comply with more onerous
covenants, which could further restrict our business operations. In addition,
the terms of existing or future debt agreements, including our senior secured
credit facilities and the Indentures governing the exchange notes and the senior
subordinated notes, may restrict us from adopting some of these alternatives.
In
the absence of such operating results and resources, we could face substantial
liquidity problems and might be required to dispose of material assets or
operations to meet our debt service and other obligations. We may not be able
to
consummate those dispositions for fair market value or at all. Furthermore,
any
proceeds that we could realize from any such dispositions may not be adequate
to
meet our debt service obligations then due.
Repayment
of our debt, including the exchange notes, is dependent on cash flow generated
by our subsidiaries.
Our
subsidiaries own a significant portion of our assets and conduct a significant
portion of our operations. Accordingly, repayment of our indebtedness, including
the exchange notes, is dependent, to a significant extent, on the generation
of
cash flow by our subsidiaries and (if they are not guarantors of the exchange
notes) their ability to make such cash available to us, by dividend, debt
repayment or otherwise. Unless they are guarantors of the exchange notes, our
subsidiaries do not have any obligation to pay amounts due on the exchange
notes
or to make funds available for that purpose. Our subsidiaries may not be able
to, or may not be permitted to, make distributions to enable us to make payments
in respect of our indebtedness, including the exchange notes. Each subsidiary
is
a distinct legal entity and, under certain circumstances, legal and contractual
restrictions may limit our ability to obtain cash from our subsidiaries. While
the Indenture governing the exchange notes limits the ability of our
subsidiaries to incur consensual restrictions on their ability to pay dividends
or make other intercompany payments to us, these limitations are subject to
certain qualifications and exceptions. In the event that we do not receive
distributions from our non-guarantor subsidiaries, we may be unable to make
required principal and interest payments on our indebtedness, including the
exchange notes.
The
collateral securing the exchange notes is su
bject
to control by creditors with first priority liens. If there is a default, the
value of the collateral may not be sufficient to repay both the first priority
creditors and the holders of the exchange notes.
The
exchange notes will be secured on a second priority basis by substantially
all
of the collateral securing our senior secured credit facilities on a first
priority basis. In addition, under the terms of the Indenture governing the
exchange notes, we will be permitted in the future to incur additional
indebtedness and other obligations that may share in the second priority liens
on the collateral securing the exchange notes, and in certain circumstances,
in
the first priority liens on the collateral securing our senior secured credit
facilities.
The
holders of obligations secured by the first priority liens on the collateral
will be entitled to receive proceeds from any realization of the collateral
to
repay their obligations in full before the holders of the exchange notes and
other obligations secured by second priority liens will be entitled to any
recovery from the collateral. We cannot assure you that, in the event of a
foreclosure, the proceeds from the sale of all of such collateral would be
sufficient to satisfy the amounts outstanding under the exchange notes and
other
obligations secured by the second priority liens, if any, after payment in
full
of all obligations secured by the first priority liens on the collateral. If
such proceeds were not sufficient to repay amounts outstanding under the
exchange notes, then holders of the exchange notes (to the extent not repaid
from the proceeds of the sale of the collateral) would only have an unsecured
claim against our remaining assets, which claim will rank equal in priority
to
the unsecured claims with respect to any unsatisfied portion of the obligations
secured by the first priority liens and our other unsecured senior indebtedness.
On September 20, 2006, the aggregate amount of senior secured indebtedness
outstanding and constituting first priority lien obligations was approximately
$720.4 million (excluding $165.1 million borrowing availability under the
revolving credit facility). Under the Indenture governing the exchange notes,
we
could also incur additional indebtedness secured by first priority liens and
second priority liens so long as such first and second priority liens are
securing indebtedness permitted to be incurred by the covenants described under
“Description of the Exchange Notes” and certain other conditions are met. Our
ability to designate future debt as either first priority secured or second
priority secured and, in either event, to enable the holders thereof to share
in
the collateral on either a priority basis or a pari passu basis with holders
of
the exchange notes and our senior secured credit facilities, may have the effect
of diluting the ratio of the value of such collateral to the aggregate amount
of
the obligations secured by the collateral.
It
may be difficult to realize the value of the colla
teral
securing the exchange notes.
The
collateral securing the exchange notes will be subject to any and all
exceptions, defects, encumbrances, liens and other imperfections as may be
accepted by the trustee for the exchange notes and any other creditors that
also
have the benefit of first liens on the collateral securing the exchange notes
from time to time, whether on or after the date the exchange notes are issued.
The initial purchasers have neither analyzed the effect of, nor participated
in
any negotiations relating to such exceptions, defects, encumbrances, liens
and
other imperfections. The existence of any such exceptions, defects,
encumbrances, liens and other imperfections could adversely affect the value
of
the collateral securing the exchange notes as well as the ability of the
collateral agent, to realize or foreclose on such collateral.
The
collateral securing the exchange notes does not include all of our or the
guarantors’ assets. In particular, the collateral does not include (i) any
property or assets owned by our foreign subsidiaries and two of our domestic
subsidiaries, (ii) any license, contract or agreement, if and only for so long
as the grant of a security interest under the security documents relating to
the
exchange notes would result in a breach or default under, or abandonment,
invalidation or unenforceability of, such license, contract or agreement, (iii)
any securities or other equity interests of our subsidiaries, (iv) any vehicle,
(v) any bank accounts, securities accounts or cash, (vi) real property held
by
us or any of our subsidiaries as a lessee under a lease, and (vii) certain
other
exceptions described in such security documents. No appraisals of any collateral
have been prepared in connection with this offering. The value of the collateral
at any time will depend on market and other economic conditions, including
the
availability of suitable buyers. By their nature, some or all of the pledged
assets may be illiquid and may have no readily ascertainable market value.
We
cannot assure you that the fair market value of the collateral as of the date
of
this prospectus exceeds the principal amount of the debt
secured
thereby. The value of the assets pledged as collateral for the exchange notes
could be impaired in the future as a result of changing economic conditions,
our
failure to implement our business strategy, competition and other future trends.
In the event that a bankruptcy case is commenced by or against us, if the value
of the collateral is less than the amount of principal and accrued and unpaid
interest on the exchange notes and all other senior secured obligations,
interest may cease to accrue on the exchange notes from and after the date
the
bankruptcy petition is filed.
The
security interest of the collateral agent will be subject to practical problems
generally associated with the realization of security interests in collateral.
For example, the collateral agent may need to obtain the consent of a third
party to obtain or enforce a security interest in a contract. We cannot assure
you that the collateral agent will be able to obtain any such consent. We also
cannot assure you that the consents of any third parties will be given when
required to facilitate a foreclosure on such assets. Accordingly, the collateral
agent may not have the ability to foreclose upon those assets and the value
of
the collateral may significantly decrease.
The
lien-ranking provisions set forth in the Inde
nture
governing the exchange notes and the intercreditor agreement will substantially
limit the rights of the holders of the exchange notes with respect to the
collateral securing the exchange notes.
The
rights of the holders of the exchange notes with respect to the collateral
securing the exchange notes will be substantially limited pursuant to the terms
of the lien-ranking provisions set forth in the Indenture governing the exchange
notes and the intercreditor agreement. Under those lien-ranking provisions,
at
any time that obligations that have the benefit of the first priority liens
are
outstanding, any actions that may be taken in respect of the collateral,
including the ability to cause the commencement of enforcement proceedings
against the collateral and to control the conduct of such proceedings, and
the
approval of amendments to, releases of collateral from the lien of, and waivers
of past defaults under, the collateral documents, will be at the direction
of
the holders of the obligations secured by the first priority liens. The trustee,
on behalf of the holders of the exchange notes, will not have the ability to
control or direct such actions, even if the rights of the holders of the
exchange notes are adversely affected. Additional releases of collateral from
the second priority lien securing the exchange notes are permitted under some
circumstances. The holders will also waive certain rights normally accruing
to
secured creditors in a bankruptcy. See “Description of the Exchange
Notes—Security for the Exchange Notes.”
Your
rights in the collateral may be adversely a
ffected
by the failure to perfect security interests in collateral.
Applicable
law provides that a security interest in certain tangible and intangible assets
can only be properly perfected and its priority retained through certain actions
undertaken by the secured party. The liens in the collateral securing the
exchange notes may not be perfected with respect to the claims of the exchange
notes if the collateral agent is not able to take the actions necessary to
perfect any of these liens on or prior to the date of the Indenture governing
the exchange notes. There can be no assurance that the lenders under our senior
secured credit facilities will have taken all actions necessary to create
properly perfected security interests in the collateral securing the exchange
notes, which, as a result of the intercreditor agreement, may result in the
loss
of the priority of the security interest in favor of the holders of exchange
notes to which they would have been entitled as a result of such non-perfection.
In addition, applicable law provides that certain property and rights acquired
after the grant of a
general
security interest, such as real property, equipment subject to a certificate
and
certain proceeds, can only be perfected at the time such property and rights
are
acquired and identified. We and our guarantors have limited obligations to
perfect the security interest of the holders of exchange notes in specified
collateral. There can be no assurance that the trustee, as collateral agent
for
the exchange notes, will monitor, or that we will inform the trustee of, the
future acquisition of property and rights that constitute collateral, and that
the necessary action will be taken to properly perfect the security interest
in
such after-acquired collateral. The collateral agent for the exchange notes
has
no obligation to monitor the acquisition of additional property or rights that
constitute collateral or the perfection of any security interest. Such failure
may result in the loss of the security interest in the collateral or the
priority of the security interest in favor of the exchange notes against third
parties.
Bankruptcy
laws may limit your ability to realize value from the collateral.
The
right
of the collateral agent to repossess and dispose of the collateral upon the
occurrence of an event of default under the Indenture governing the exchange
notes is likely to be significantly impaired by applicable bankruptcy law if
a
bankruptcy case were to be commenced by or against us before the collateral
agent repossessed and disposed of the collateral. Upon the commencement of
a
case under the bankruptcy code, a secured creditor such as the collateral agent
is prohibited from repossessing its security from a debtor in a bankruptcy
case,
or from disposing of security repossessed from such debtor, without bankruptcy
court approval, which may not be given. Moreover, the bankruptcy code permits
the debtor to continue to retain and use collateral even though the debtor
is in
default under the applicable debt instruments, provided that the secured
creditor is given “adequate protection.” The meaning of the term “adequate
protection” may vary according to circumstances, but it is intended in general
to protect the value of the secured creditor’s interest in the collateral as of
the commencement of the bankruptcy case and may include cash payments or the
granting of additional security if and at such times as the bankruptcy court
in
its discretion determines that the value of the secured creditor’s interest in
the collateral is declining during the pendency of the bankruptcy case. A
bankruptcy court may determine that a secured creditor may not require
compensation for a diminution in the value of its collateral if the value of
the
collateral exceeds the debt it secures.
In
view
of the lack of a precise definition of the term “adequate protection” and the
broad discretionary power of a bankruptcy court, it is impossible to predict:
·
|
how
long payments under the exchange notes could be delayed following
co
mmencement
of a bankruptcy case;
|
·
|
whether
or when the collateral agent could repossess or dispose of the collateral;
|
·
|
the
value of the collateral at the time of the bankruptcy petition; or
|
·
|
whether
or to what extent holders of the exchange notes would be compensated
for
any delay in payment or loss of value of the collateral through the
requirement of “adequate protection.”
|
In
addition, the intercreditor agreement provides that, in the event of a
bankruptcy, the trustee, as the collateral agent for the exchange notes, may
not
object to a number of important matters following the filing of a bankruptcy
petition so long as any first lien debt is outstanding. After such a filing,
the
value of the collateral securing the exchange notes could materially deteriorate
and you would be unable to raise an objection. The right of the holders of
obligations secured by first priority liens on the collateral to foreclose
upon
and sell the collateral
upon
the
occurrence of an event of default also would be subject to limitations under
applicable bankruptcy laws if we or any of our subsidiaries become subject
to a
bankruptcy proceeding.
Any
disposition of the collateral during a bankruptcy case would also require
permission from the bankruptcy court. Furthermore, in the event a bankruptcy
court determines the value of the collateral is not sufficient to repay all
amounts due on first priority lien debt and, thereafter, the exchange notes,
the
holders of the exchange notes would hold a secured claim to the extent of the
value of the collateral to which the holders of the exchange notes are entitled
and unsecured claims with respect to such shortfall. The bankruptcy code only
permits the payment and accrual of post-petition interest, costs and attorney’s
fees to a secured creditor during a debtor’s bankruptcy case to the extent the
value of its collateral is determined by the bankruptcy court to exceed the
aggregate outstanding principal amount of the obligations secured by the
collateral.
Any
future pledge of collateral might be avoidable in bankruptcy.
Any
future pledge of collateral in favor of the collateral agent for the exchange
notes, including pursuant to security documents delivered after the date of
the
Indenture governing the exchange notes, might be avoidable by the pledgor (as
debtor in possession) or by its trustee in bankruptcy if certain events or
circumstances exist or occur, including, among others, if the pledgor is
insolvent at the time of the pledge, the pledge permits the holders of the
exchange notes to receive a greater recovery than if the pledge had not been
given and a bankruptcy proceeding in respect of the pledgor is commenced within
90 days following the pledge, or, in certain circumstances, a longer period.
If
we default on our obligations to pay our other i
ndebtedness,
we may not be able to make payments on the exchange notes.
Any
default under the agreements governing our indebtedness, including a default
under our senior secured credit facilities that is not waived by the required
lenders, and the remedies sought by the holders of such indebtedness could
prohibit us from making payments of principal, premium, if any, or interest
on
the exchange notes and could substantially decrease the market value of the
exchange notes. If we are unable to generate sufficient cash flow and are
otherwise unable to obtain funds necessary to meet required payments of
principal, premium, if any, or interest on our indebtedness, or if we otherwise
fail to comply with the various covenants, including financial and operating
covenants, in the instruments governing our indebtedness (including our senior
secured credit facilities), we could be in default under the terms of the
agreements governing such indebtedness. In the event of such default, the
holders of such indebtedness could elect to declare all the funds borrowed
thereunder to be due and payable, together with accrued and unpaid interest.
More specifically, the lenders under the revolving credit facility could elect
to terminate their commitments, cease making further loans and institute
foreclosure proceedings against our assets, and we could be forced into
bankruptcy or liquidation. If our operating performance declines, we may in
the
future need to seek waivers from the required lenders under our senior secured
credit facilities to avoid being in default. If we breach our covenants under
our senior secured credit facilities and seek a waiver, we may not be able
to
obtain a waiver from the required lenders. If this occurs, we would be in
default under our senior secured credit facilities, the lenders could exercise
their rights as described above, and we could be forced into bankruptcy or
liquidation. See “Description of Other Indebtedness” and “Description of the
Exchange Notes.”
The
exchange notes will be structurally subordinated to all liabilities of our
non-guarantor subsidiaries
.
The
exchange notes are structurally subordinated to the indebtedness and other
liabilities of our subsidiaries that are not guaranteeing the exchange notes,
which include two of our domestic subsidiaries and all of our non-U.S.
subsidiaries. These non-guarantor subsidiaries are separate and distinct legal
entities and have no obligation, contingent or otherwise, to pay any amounts
due
pursuant to the exchange notes, or to make any funds available therefor, whether
by dividends, loans, distributions or other payments. In fiscal 2005, the
subsidiaries that are not guaranteeing the exchange notes had net sales of
$27.3
million and held $56.0 million of our total assets. Any right that we or the
subsidiary guarantors have to receive any assets of any of the non-guarantor
subsidiaries upon the liquidation or reorganization of those subsidiaries,
and
the consequent rights of holders of exchange notes to realize proceeds from
the
sale of any of those subsidiaries’ assets, will be effectively subordinated to
the claims of those subsidiaries’ creditors, including trade creditors and
holders of preferred equity interests of those subsidiaries. Accordingly, in
the
event of a bankruptcy, liquidation or reorganization of any of our non-guarantor
subsidiaries, these non-guarantor subsidiaries will pay the holders of their
debts, holders of preferred equity interests and their trade creditors before
they will be able to distribute any of their assets to us.
Federal
and state fraudulent transfer laws permit a court, under certain circumstances,
to void the e
xchange
notes and the guarantees of the exchange notes, and, if that occurs, you may
not
receive any payments on the exchange notes.
The
issuance of the exchange notes and the guarantees of the exchange notes may
be
subject to review under federal and state fraudulent transfer and conveyance
statutes if a bankruptcy, liquidation or reorganization case or a lawsuit,
including under circumstances in which bankruptcy is not involved, were
commenced at some future date by us, by the exchange Note Guarantors or on
behalf of our unpaid creditors or the unpaid creditors of an exchange Note
Guarantor. While the relevant laws may vary from state to state, under such
laws
the payment of consideration in the Acquisition, including the proceeds from
the
issuance of the exchange notes will generally be a fraudulent conveyance if
(i) the consideration was paid with the intent of hindering, delaying or
defrauding creditors or (ii) we or any of our subsidiary exchange Note
Guarantors, as applicable, received less than reasonably equivalent value or
fair consideration in return for issuing either the exchange notes or an
exchange note guarantee, and, in the case of (ii) only, one of the
following is also true:
·
|
we
or any of our subsidiary exchange Note Guarantors were or was insolvent
or
rendered insolvent by reason of issuing the exchange notes or the
exchange
note guarantees;
|
·
|
payment
of the consideration left us or any of our subsidiary exchange Note
Guarantors with an unreasonably small amount of capital to carry
on the
business; or
|
·
|
we
or any of our subsidiary exchange Note Guarantors intended to, or
believed
that we or it would, incur debts beyond our or its ability to pay
as they
mature.
|
If
a
court were to find that the issuance of the exchange notes or an exchange note
guarantee was a fraudulent conveyance, the court could void the payment
obligations under the exchange notes or such exchange note guarantee or further
subordinate the exchange notes or such exchange note guarantee to presently
existing and future indebtedness of ours or such subsidiary exchange Note
Guarantor, or require the holders of the exchange notes to repay
any
amounts
received with respect to the exchange notes or such exchange note guarantee.
In
the event of a finding that a fraudulent conveyance occurred, you may not
receive any repayment on the exchange notes. Further, the voidance of the
exchange notes could result in an event of default with respect to our other
debt and that of our subsidiary exchange Note Guarantors that could result
in
acceleration of such debt.
The
measures of insolvency for purposes of fraudulent conveyance laws vary depending
upon the law of the jurisdiction that is being applied. Generally, an entity
would be considered insolvent if, at the time it incurred indebtedness:
·
|
the
sum of its debts, including contingent liabilities, was greater than
the
fair sal
eable
value of all its assets;
|
·
|
the
present fair saleable value of its assets was less than the amount
that
would be required to pay its probable liability on its existing debts
and
liabilities, including contingent liabilities, as they become absolute
and
mature; or
|
·
|
it
could not pay its debts as they become due.
|
We
cannot
be certain as to the standards a court would use to determine whether or not
we
or the subsidiary guarantors were solvent at the relevant time, or regardless
of
the standard used, that the issuance of the exchange notes and the guarantees
would not be subordinated to our or any subsidiary guarantor’s other debt.
If
the
exchange note guarantees were legally challenged, any exchange note guarantee
could also be subject to the claim that, since the exchange note guarantee
was
incurred for our benefit, and only indirectly for the benefit of the subsidiary
exchange Note Guarantor, the obligations of the applicable subsidiary exchange
Note Guarantor were incurred for less than fair consideration. A court could
thus void the obligations under the exchange note guarantees, subordinate them
to the applicable subsidiary exchange Note Guarantor’s other debt or take other
action detrimental to the holders of the exchange notes.
Because
each exchange Note Guarantor’s liability under its exchange note guarantees may
be reduced to zero, avoided or released under certain circu
mstances,
you may not receive any payments from some or all of the exchange Note
Guarantors.
You
have
the benefit of the exchange note guarantees of the exchange Note Guarantors.
However, the exchange note guarantees by the exchange Note Guarantors are
limited to the maximum amount that the exchange Note Guarantors are permitted
to
guarantee under applicable law. As a result, an exchange Note Guarantor’s
liability under its exchange note guarantee could be reduced to zero, depending
on the amount of other obligations of such exchange Note Guarantor. Further,
under the circumstances discussed more fully above, a court under Federal or
state fraudulent conveyance and transfer statutes could void the obligations
under an exchange note guarantee or further subordinate it to all other
obligations of the exchange Note Guarantor. In addition, you will lose the
benefit of a particular exchange note guarantee if it is released under certain
circumstances described under “Description of the Exchange Notes—Exchange Note
Guarantees.”
The
terms of our senior secured credit facilities and the Indentures governing
the
exchange notes and the senior subordinated notes may restrict our current and
future operations, particularly our ability to respond to changes in our
business or to take certain actions.
Our
senior secured credit facilities and the Indentures governing the exchange
notes
and the senior subordinated notes will contain, and any future indebtedness
of
ours would likely contain, a number of restrictive covenants that will impose
significant operating and financial restrictions on us, including restrictions
on our ability to, among other things:
·
|
incur
or guarantee additional debt;
|
·
|
pay
dividends and make other restricted payments;
|
·
|
create
or incur certain liens;
|
·
|
make
certain investments;
|
·
|
engage
in sales of assets and subsidiary stock;
|
·
|
enter
into transactions with affiliates;
|
·
|
transfer
all or substantially all of our assets or enter into merger or
consolidation transactions; and
|
·
|
make
capital expenditures.
|
In
addition, our senior secured credit facilities will require us to maintain
a
maximum total net first lien leverage ratio. As a result of these covenants,
we
will be limited in the manner in which we conduct our business, and we may
be
unable to engage in favorable business activities or finance future operations
or capital needs.
A
failure
to comply with the covenants contained in our senior secured credit facilities,
the Indentures governing the exchange notes and the senior subordinated notes
or
any other existing indebtedness could result in an event of default under our
senior secured credit facilities, the Indentures governing the exchange notes
and the senior subordinated notes or any other existing agreements, which,
if
not cured or waived, could have a material adverse affect on our business,
financial condition and results of operations. In the event of any default
under
our senior secured credit facilities, the Indentures governing the exchange
notes and senior subordinated notes or any other indebtedness, the lenders
thereunder:
·
|
will
not be required to lend any additional amounts to us;
|
·
|
could
elect to declare all borrowings outstanding, together with accrued
and
unpaid interest and fees, to be due and payable;
|
·
|
may
have the ability to require us to apply all of our available cash
to repay
these borrowings; or
|
·
|
may
prevent us from making debt service payments under our other agreements,
including the Indenture governing the exchange notes, any of which
could
result in an event of default under the exchange notes.
|
If
the
indebtedness under our senior secured credit facilities or our other
indebtedness, including the exchange notes, were to be accelerated, there can
be
no assurance that our assets would be sufficient to repay such indebtedness
in
full. See “Description of Other Indebtedness” and “Description of the Exchange
Notes.”
We
may not be able to repurchase the exchange notes upon a change of control.
Upon
a
change of control as defined in the Indenture governing the exchange notes,
we
will be required to make an offer to repurchase all outstanding exchange notes
at 101% of their principal amount and an offer to repurchase all outstanding
senior subordinated notes at 101% of their principal amount, in each case plus
accrued and unpaid interest, unless we have previously given notice of our
intention to exercise our right to redeem the exchange notes. We may not have
sufficient financial resources to purchase all of the exchange notes that are
tendered upon a change of control offer or, if then permitted under the
Indenture governing the exchange notes, to redeem the exchange notes. A failure
to make the applicable change of control offer or to pay the applicable change
of control purchase price when due would result in a default under each of
the
Indentures. The occurrence of a change of control would also constitute an
event
of default under our senior secured credit facilities and may constitute an
event of default under the terms of our other indebtedness. The terms of the
loan and security agreement governing our senior secured credit facilities
limit
our right to purchase or redeem certain indebtedness. In the event any purchase
or redemption is prohibited, we may seek to obtain waivers from the required
lenders under our senior secured credit facilities to permit the required
repurchase or redemption, but the required lenders have no obligation to grant,
and may refuse to grant such a waiver. A change of control is defined in the
Indenture governing the exchange notes and would not include all transactions
that could involve a change of control of our day-to-day operations, including
a
transaction involving the Management Group as defined in the Indenture governing
the exchange notes. See “Description of the Exchange Notes—Change of Control.”
There
may be no active trading market for the e
xchange
notes, and if one develops, it may not be liquid.
The
exchange notes constitute a new issue of securities for which there is no
established trading market. We do not intend to list the exchange notes on
any
national securities exchange or to seek the admission of the exchange notes
for
quotation through the National Association of Securities Dealers Automated
Quotation System. Although the initial purchasers have advised us that they
currently intend to make a market in the exchange notes, they are not obligated
to do so and may discontinue such market making activity at any time without
notice. In addition, market-making activity will be subject to the limits
imposed by the Securities Act and the Securities Exchange Act of 1934, as
amended, or the Exchange Act, and may be limited during the exchange offer
and
the pendency of any shelf registration statement. Although we expect that the
notes will be eligible for trading in PORTAL, there can be no assurance as
to
the development or liquidity of any market for the exchange notes, the ability
of the holders of the exchange notes to sell their exchange notes or the price
at which the holders would be able to sell their exchange notes. Future trading
prices of the exchange notes will depend on many factors, including:
·
|
our
operating performance and financial condition;
|
·
|
our
ability to complete this offer to exchange the outstanding notes
for the
exchange notes;
|
·
|
the
interest of securities dealers in making a market; and
|
·
|
the
market for similar securities.
|
Historically,
the market for non-investment grade debt has been subject to disruptions that
have caused substantial volatility in the prices of securities similar to the
exchange notes
offered
hereby. The market for the exchange notes, if any, may be subject to similar
disruptions. Any such disruptions may adversely affect the value of your
exchange notes.
RISKS
RELATED TO OUR BUSINESS
Increases
in resin prices or a shortage of available resin could harm our financial
condition and results of operations.
To
produce our products, we use large quantities of plastic resins, which accounted
for 41% of our cost of goods sold in fiscal 2005. Plastic resins are subject
to
price fluctuations, including those arising from supply shortages and changes
in
the prices of natural gas, crude oil and other petrochemical intermediates
from
which resins are produced. Over the past several years, we have at times
experienced rapidly increasing resin prices. If rapid increases in resin prices
continue, our revenue and profitability may be materially and adversely
affected, both in the short-term as we attempt to pass through changes in the
price of resin to customers under current agreements and in the long-term as
we
negotiate new agreements or if our customers seek product substitution.
While
customers representing more than 60% of our net sales are subject to contractual
price escalators and de-escalators tied to resin prices, and while historically,
we have generally been able to pass on a significant portion of the increases
in
resin prices to our customers over a period of time, there have nonetheless
been
negative short-term impacts to our financial performance. Certain of our
customers (currently accounting for fewer than 10% of our net sales) purchase
our products pursuant to arrangements that exhibit fixed-price characteristics
in respect of which we have at times and may continue to enter into hedging
or
similar arrangements, although such hedging arrangements may not always be
available. In the future, we may not be able to pass on substantially all of
the
increases in resin prices to our customers on a timely basis, if at all, which
may have a material adverse effect on our competitive position and financial
performance.
We
source
plastic resin primarily from major industry suppliers such as Basell, Chevron,
Dow, Exxon, Mobil, Huntsman, Lyondell, Nova, Sunoco and Total. We have
long-standing relationships with certain of these suppliers but have not entered
into a firm supply contract with any of them. We may not be able to arrange
for
other sources of resin in the event of an industry-wide general shortage of
resins used by us, or a shortage or discontinuation of certain types of grades
of resin purchased from one or more of our suppliers. Any such shortage may
materially negatively impact our competitive position versus companies that
are
able to better or more cheaply source resin.
We
plan
to pursue opportunities to purchase resin jointly with other Apollo portfolio
companies.
While
we
anticipate that these joint-purchasing opportunities should generate benefits
in
terms of our ability to manage our material, w
e
cannot
assure you that we will be able to execute such arrangements effectively or
that
we will realize any or all of the anticipated benefits from them.
We
may not be able to compete successfully and our customers may not continue
to
purchase our products.
We
face
intense competition in the sale of our products and compete with multiple
companies in each of our product lines. We compete on the basis of a number
of
considerations, including price, service, quality, product characteristics
and
the ability to supply
products
to customers in a timely manner. Our products also compete with metal, glass,
paper and other packaging materials as well as plastic packaging materials
made
through different manufacturing processes. Some of these competitive products
are not subject to the impact of changes in resin prices which may have a
significant and negative impact on our competitive position versus substitute
products. Our competitors may have financial and other resources that are
substantially greater than ours and may be better able than us to withstand
price competition. In addition, some of our customers do and could in the future
choose to manufacture the products they require for themselves. Each of our
product lines faces a different competitive landscape. Competition could result
in our products losing market share or our having to reduce our prices, either
of which would have a material adverse effect on our business and results of
operations and financial condition. In addition, since we do not have long-term
arrangements with many of our customers these competitive factors could cause
our customers to shift suppliers and/or packaging material quickly.
We
may pursue and execute acquisitions, which could adversely affect our business.
As
part
of our growth strategy, we plan to consider the acquisition of other companies,
assets and product lines that either complement or expand our existing business
and create economic value. We cannot assure you that we will be able to
consummate any such transactions or that any future acquisitions will be
consummated at acceptable prices and terms. We continually evaluate potential
acquisition opportunities in the ordinary course of business, including those
that could be material in size and scope. Acquisitions involve a number of
special risks, including:
·
|
the
diversion of management’s attention to the assimilation of the acquired
co
mpanies
and their employees and on the management of expanding operations;
|
·
|
the
incorporation of acquired products into our product line;
|
·
|
the
increasing demands on our operational systems;
|
·
|
possible
adverse effects on our reported operating results, particularly during
the
first several reporting periods after such acquisitions are completed;
and
|
·
|
the
loss of key employees and the difficulty of presenting a unified
corporate
image.
|
We
may
become responsible for unexpected liabilities that we failed or were unable
to
discover in the course of performing due diligence in connection with historical
acquisitions and any future acquisitions. We have typically required selling
stockholders to indemnify us against certain undisclosed liabilities. However,
we cannot assure you that indemnification rights we have obtained, or will
in
the future obtain, will be enforceable, collectible or sufficient in amount,
scope or duration to fully offset the possible liabilities associated with
the
business or property acquired. Any of these liabilities, individually or in
the
aggregate, could have a material adverse effect on our business, financial
condition and results of operations.
In
addition, we may not be able to successfully integrate future acquisitions
without substantial costs, delays or other problems. The costs of such
integration could have a material adverse effect on our operating results and
financial condition. In addition, although we conduct what we believe to be
a
prudent level of investigation regarding the businesses we purchase, in light
of
the circumstances of each transaction, an unavoidable level of risk remains
regarding the actual condition of these businesses. Until we actually assume
operating control of such
business
assets and their operations, we may not be able to ascertain the actual value
or
understand the potential liabilities of the acquired entities and their
operations.
We
may not be successful in protecting our intelle
ctual
property rights, including our unpatented proprietary know-how and trade
secrets, or in avoiding claims that we infringed on the intellectual property
rights of others.
In
addition to relying on patent and trademark rights, we rely on unpatented
proprietary know-how and trade secrets, and employ various methods, including
confidentiality agreements with employees and consultants, to protect our
know-how and trade secrets. However, these methods and our patents and
trademarks may not afford complete protection and there can be no assurance
that
others will not independently develop the know-how and trade secrets or develop
better production methods than us. Further, we may not be able to deter current
and former employees, contractors and other parties from breaching
confidentiality agreements and misappropriating proprietary information and
it
is possible that third parties may copy or otherwise obtain and use our
information and proprietary technology without authorization or otherwise
infringe on our intellectual property rights. Additionally, we have licensed,
and may license in the future, patents, trademarks, trade secrets, and similar
proprietary rights to third parties. While we attempt to ensure that our
intellectual property and similar proprietary rights are protected when entering
into business relationships, third parties may take actions that could
materially and adversely affect our rights or the value of our intellectual
property, similar proprietary rights or reputation. In the future, we may also
rely on litigation to enforce our intellectual property rights and contractual
rights, and, if not successful, we may not be able to protect the value of
our
intellectual property. Any litigation could be protracted and costly and could
have a material adverse effect on our business and results of operations
regardless of its outcome.
Our
success depends in part on our ability to obtain, or license from third parties,
patents, trademarks, trade secrets and similar proprietary rights without
infringing on the proprietary rights of third parties. Although we believe
our
intellectual property rights are sufficient to allow us to conduct our business
without incurring liability to third parties, our products may infringe on
the
intellectual property rights of such persons. Furthermore, no assurance can
be
given that we will not be subject to claims asserting the infringement of the
intellectual property rights of third parties seeking damages, the payment
of
royalties or licensing fees and/or injunctions against the sale of our products.
Any such litigation could be protracted and costly and could have a material
adverse effect on our business and results of operations.
Current
and future environmental and other go
vernmental
requirements could adversely affect our financial condition and our ability
to
conduct our business.
Our
operations are subject to federal, state, local and foreign environmental laws
and regulations that impose limitations on the discharge of pollutants into
the
air and water and establish standards for the treatment, storage and disposal
of
solid and hazardous wastes and require clean up of contaminated sites. While
we
have not been required historically to make significant capital expenditures
in
order to comply with applicable environmental laws and regulations, we cannot
predict with any certainty our future capital expenditure requirements because
of continually changing compliance standards and environmental technology.
Furthermore, violations or contaminated sites that we do not know about
(including contamination caused by prior owners and operators of such sites)
(or
newly discovered information) could result in additional compliance or
remediation costs or other liabilities, which
could
be
material. We have limited insurance coverage for potential environmental
liabilities associated with historic and current operations and we do not
anticipate increasing such coverage in the future. We may also assume
significant environmental liabilities in acquisitions. In addition, federal,
state, local and foreign governments could enact laws or regulations concerning
environmental matters that increase the cost of producing, or otherwise
adversely affect the demand for, plastic products. Legislation that would
prohibit, tax or restrict the sale or use of certain types of plastic and other
containers, and would require diversion of solid wastes such as packaging
materials from disposal in landfills, has been or may be introduced in the
U.S.
Congress, in state legislatures and other legislative bodies. While container
legislation has been adopted in a few jurisdictions, similar legislation has
been defeated in public referenda in several states, local elections and many
state and local legislative sessions. Although we believe that the laws
promulgated to date have not had a material adverse effect on us, there can
be
no assurance that future legislation or regulation would not have a material
adverse effect on us. Furthermore, a decline in consumer preference for plastic
products due to environmental considerations could have a negative effect on
our
business.
The
Food
and Drug Administration (“FDA”) regulates the material content of direct-contact
food and drug packages we manufacture pursuant to the Federal Food, Drug and
Cosmetic Act. Furthermore, some of our products are regulated by the Consumer
Product Safety Commission (“CPSC”) pursuant to various federal laws, including
the Consumer Product Safety Act and the Poison Prevention Packaging Act. Both
the FDA and the CPSC can require the manufacturer of defective products to
repurchase or recall these products and may also impose fines or penalties
on
the manufacturer. Similar laws exist in some states, cities and other countries
in which we sell products. In addition, laws exist in certain states restricting
the sale of packaging with certain levels of heavy metals and imposing fines
and
penalties for noncompliance. Although we use FDA-approved resins and pigments
in
our products that directly contact food and drug products and we believe our
products are in material compliance with all applicable requirements, we remain
subject to the risk that our products could be found not to be in compliance
with these and other requirements. A recall of any of our products or any fines
and penalties imposed in connection with non-compliance could have a materially
adverse effect on us. See “Business—Environmental Matters and Government
Regulation.”
In
the event of a catastrophic loss of one of our key manufacturing facilities,
our
business would be adversely affected.
While
we
manufacture our products in a large number of diversified facilities and
maintain insurance covering our facilities, including business interruption
insurance, a catastrophic loss of the use of all or a portion of one of our
key
manufacturing facilities due to accident, labor issues, weather conditions,
natural disaster or otherwise, whether short or long-term, could have a material
adverse effect on us.
Our
future required cash contributions to our pe
nsion
plans may increase.
Congress
recently passed legislation (which was signed into law by President Bush) to
reform funding requirements for underfunded pension plans. The legislation,
among other things, increases the percentage funding target from 90% to 100%
and
requires the use of a more current mortality table in the calculation of minimum
yearly funding requirements. In fiscal 2005, we contributed $0.5 million to
our
U.S. defined benefit pension plans. Our future required cash contributions
to
our U.S. defined benefit pension plans may increase based on the funding reform
provisions that were enacted into law. In addition, if the performance of assets
in our
pension
plans does not meet our expectations, if the Pension Benefit Guaranty
Corporation, or PBGC, requires additional contributions to such plans as a
result of the Acquisition, or if other actuarial assumptions are modified,
our
future required cash contributions could increase. Any such increases could
have
a material and adverse effect on our business, financial condition or results
of
operations.
The
need
to make these cash contributions may reduce the cash available to meet our
other
obligations, including our obligations with respect to the exchange notes,
or to
meet the needs of our business. In addition, the PBGC may terminate our defined
benefit pension plans under limited circumstances, including in the event the
PBGC concludes that its risk may increase unreasonably if such plans continue.
In the event a plan is terminated for any reason while it is underfunded, we
could be required to make an immediate payment to the PBGC of all or a
substantial portion of such plan’s underfunding, as calculated by the PBGC based
on its own assumptions (which might result in a larger pension obligation than
that based on the assumptions we have used to fund such plan), and the PBGC
could assert a lien on material amounts of our assets.
Our
business operations could be significantly di
srupted
if members of our senior management team were to leave.
Our
success depends to a significant degree upon the continued contributions of
our
senior management team. Our senior management team has extensive manufacturing,
finance and engineering experience, and we believe that the depth of our
management team is instrumental to our continued success. While we have entered
into employment agreements with certain executive officers, the loss of any
of
our key executive officers in the future could significantly impede our ability
to successfully implement our business strategy, financial plans, expansion
of
services, marketing and other objectives.
Goodwill
and other intangibles represent a signif
icant
amount of our net worth, and a write-off could result in lower reported net
income and a reduction of our net worth.
As
of
July 1, 2006, on a pro forma basis, the net value of our goodwill and other
intangibles was approximately $1,848.3 million.
In
July
2001, the Financial Accounting Standards Board issued Statements of Financial
Accounting Standards No. 142,
Goodwill
and Other Intangible Assets
.
Under
this accounting standard, we are no longer required or permitted to amortize
goodwill reflected on our balance sheet. We are, however, required to evaluate
goodwill reflected on our balance sheet when circumstances indicate a potential
impairment, or at least annually, under the impairment testing guidelines
outlined in the standard. Future changes in the cost of capital, expected cash
flows, or other factors may cause our goodwill to be impaired, resulting in
a
non-cash charge against results of operations to write-off goodwill for the
amount of impairment. If a significant write-off is required, the charge would
have a material adverse effect on our reported results of operations and net
worth in the period of any such write-off.
We
are controlled by Apollo, and its interests as an equity holder may conflict
with yours as a creditor.
A
majority of the common stock of our parent company, Berry Plastics Group, on
a
fully-diluted basis, is held by Apollo. Apollo controls Berry Plastics Group
and
therefore us as a wholly-owned subsidiary of Berry Plastics Group. As a result,
Apollo has the power to elect a
majority
of the members of our board of directors, appoint new management and approve
any
action requiring the approval of the holders of Berry Plastics Group’s stock,
including approving acquisitions or sales of all or substantially all of our
assets. The directors elected by Apollo have the ability to control decisions
affecting our capital structure, including the issuance of additional capital
stock, the implementation of stock repurchase programs and the declaration
of
dividends. Apollo’s interests may not in all cases be aligned with your
interests as a holder of the exchange notes. For example, if we encounter
financial difficulties or are unable to pay our debts as they mature, Apollo’s
interests, as equity holders, might conflict with your interests as a holder
of
the exchange notes. Affiliates of Apollo may also have an interest in pursuing
acquisitions, divestitures, financings and other transactions that, in their
judgment, could enhance their equity investments, even though such transactions
might involve risks to you as a holder of the exchange notes. Additionally,
Apollo is in the business of investing in companies and may, from time to time,
acquire and hold interests in businesses that compete directly or indirectly
with us. Furthermore, Apollo has no continuing obligation to provide us with
debt or equity financing or to provide us with joint purchasing or similar
opportunities with its other portfolio companies. Apollo may also pursue
acquisition opportunities that may be complementary to our business and, as
a
result, those acquisition opportunities may not be available to us.
Purpose
and Effect of the Exchange Offer
We
entered into a registration rights agreement with the initial purchasers of
the
outstanding notes, in which we agreed to file a registration statement relating
to an offer to exchange the outstanding notes for the exchange notes. The
registration statement of which this prospectus forms a part was filed in
compliance with this obligation. We also agreed to use our commercially
reasonable efforts to file the registration statement as soon as practicable
with the SEC and to use all commercially reasonable efforts to cause it to
become effective under the Securities Act as promptly as possible but in no
event later than the 365
th
day
after September 20, 2006. The exchange notes will have terms substantially
identical to the outstanding notes except that the exchange notes do not contain
terms with respect to transfer restrictions and registration rights and
additional interest payable for the failure to consummate the exchange offer.
Within
180 days of the occurrence of any of the circumstances outlined below, we have
agreed to file a shelf registration statement with the SEC to cover the resale
of the outstanding notes by the holders thereof. We have further agreed that
we
will use our commercially reasonable efforts to cause the SEC to declare such
a
shelf registration statement effective within 365 days of the occurrence of
such
an event and to keep the shelf registration statement effective for up to two
years after the effective date of the shelf registration statement. The
circumstances are:
·
|
the
exchange offer is not permitted by applicable law or SEC policy;
|
·
|
the
exchange offer is not consummated within 30 days of the date on which
the
exchange offer is required to be mailed to the holders of outstanding
notes; or
|
·
|
any
holder of outstanding notes notifies us prior to the 20th day following
consummation of the exchange offer that:
|
(a)
|
it
is prohibited by law or SEC policy from participating in the exchange
offer; or
|
(b)
|
that
it may not resell the exchange notes acquired by it in the exchange
offer
to the public without delivering a prospectus (other than by reason
of
such holder’s status as our affiliate) and the prospectus contained in
this exchange offer registration statement is not appropriate or
available
for such resales; or
|
(c)
|
that
it is a broker-dealer and owns outstanding notes acquired directly
from us
or our affiliate.
|
Transferability
of the Exchange Notes
We
are
making this exchange offer in reliance on interpretations of the staff of the
SEC set forth in several no-action letters. However, we have not sought our
own
no-action letter. Based upon these interpretations, we believe that you, or
any
other person receiving exchange notes, may offer for resale, resell or otherwise
transfer such exchange notes without complying with the registration and
prospectus delivery requirements of the U.S. federal securities laws,
if:
·
|
you,
or the person or entity receiving such exchange notes, is acquiring
such
e
xchange
notes in the ordinary course of business;
|
·
|
neither
you nor any such person or entity is participating in or intends
to
partic
ipate
in a distribution of the exchange notes within the meaning of the
U.S.
federal securities laws;
|
·
|
neither
you nor any such person or entity has an arrangement or understanding
with
any person or entity to participate in any distribution of the exchange
notes;
|
·
|
neither
you nor any such person or entity is our “affiliate” as such term is
defined under Rule 405 under the Securities Act;
and
|
·
|
you
are not acting on behalf of any person or entity who could not truthfully
make these statements.
|
In
order
to participate in the exchange offer, each holder of exchange notes must
represent to us that each of these statements is true:
·
|
such
holder is not an affiliate of ours;
|
·
|
such
holder is not engaged in and does not intend to engage in, and has
no
arrangement or understanding with any person to participate in a
distribution of the exchange notes;
and
|
·
|
any
exchange notes such holder receives will be acquired in the ordinary
course business.
|
Broker-dealers
and each holder of outstanding notes intending to use the exchange offer to
participate in a distribution of exchange notes (1) may not rely under the
SEC’s
policy, as of September 20, 2006, on the applicable interpretation of the staff
of the SEC’s position contained in Exxon Capital Holdings Corp., SEC no-action
letter (April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action letter
(June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1993)
and (2) must comply with the registration and prospectus requirements of the
Securities Act in connection with a secondary resale transaction and will
deliver a prospectus in connection with any such resale of the exchange notes.
This prospectus, as it may be amended or supplemented from time to time, may
be
used by a broker-dealer in connection with resales of the exchange notes
received in exchange for the outstanding notes where such outstanding notes
were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. We have agreed that for a period of not less than 180 days
after the expiration date for the exchange offer, we will make this prospectus
available to broker-dealers for use in connection with any such resale, if
requested by the initial purchasers or by a broker-dealer that receives the
exchange notes for its own account in the exchange offer in exchange for the
outstanding notes, as a result of market-making activities or other trading
activities.
Maturity
and Interest on the Exchange Notes
Interest
will accrue at a per annum rate of 8
7
/
8
%
on the
fixed rate exchange notes and LIBOR (reset quarterly) plus 3.875% on the
floating rate exchange notes from the most recent date to which interest on
the
outstanding notes has been paid or, if no interest has been paid, from September
20, 2006.
Interest
on the fixed rate exchange notes will be paid semiannually to holders of record
at the close of business on March 1 and September 1 immediately preceding the
interest payment date on March 15 and September 15 of each year, commencing
on
March 15, 2007.
Interest
on the floating rate exchange notes will be paid quarterly to holders of record
at the close of business on March 1, June 1, September 1 and December 1
immediately preceding the interest payment date on March 15, June 15, September
15 and December 15 of each year, commencing on December 15, 2006.
The
exchange notes will mature on September 15, 2014.
Terms
of the Exchange Offer; Acceptance of Te
ndered
Notes
Upon
the
terms and subject to the conditions of the exchange offer, we will accept any
and all outstanding notes validly tendered and not withdrawn prior to 5:00
p.m.,
New York City time, on
, 2006. The date of
acceptance for exchange of the outstanding notes, and completion of the exchange
offer, is the exchange date, which will be the first business day following
the
expiration date (unless extended as described in this prospectus). We will
issue, on or promptly after the exchange date, an aggregate principal amount
of
up to $750,000,000 of exchange notes in exchange for a like principal amount
of
outstanding notes tendered and accepted in the exchange offer. Holders may
tender some or all of their outstanding notes pursuant to the exchange offer.
However, outstanding notes may be tendered only in integral multiples of $1,000,
subject to a minimum denomination of $2,000.
The
form
and terms of the exchange notes will be identical in all material respects
to
the form and terms of the outstanding notes except that:
·
|
the
exchange notes have been registered under the U.S. federal securities
laws
and will not bear any legend restricting their
transfer;
|
·
|
the
exchange notes bear a different CUSIP number from the outstanding
notes;
|
·
|
the
exchange notes will not be subject to transfer restrictions or entitled
to
registration rights; and
|
·
|
the
holders of the exchange notes will not be entitled to certain rights
under
the registration rights agreement, including the provisions for an
increase in the interest rate on the outstanding notes in some
circumstances relating to the timing of the exchange
offer.
|
The
exchange notes will evidence the same debt as the outstanding notes. Holders
of
exchange notes will be entitled to the benefits of the Indenture.
As
of the
date of this prospectus, $750.0 million aggregate principal amount of the
outstanding notes was outstanding. The exchange notes offered will be limited
to
$750.0 million in aggregate principal amount.
In
connection with the issuance of the outstanding notes, we have arranged for
the
outstanding notes to be issued in the form of global notes through the
facilities of The Depository Trust Company, or “DTC” acting as depositary. The
exchange notes will also be issued in the form of global notes registered in
the
name of DTC or its nominee and each beneficial owner’s interest in it will be
transferable in book-entry form through DTC.
Holders
of outstanding notes do not have any appraisal or dissenters’ rights in
connection with the exchange offer. Outstanding notes which are not tendered
for
exchange or are tendered but not accepted in connection with the exchange offer
will remain outstanding and be entitled to the benefits of the Indenture under
which they were issued, including accrual of interest, but, subject to a limited
exception, will not be entitled to any registration rights under the applicable
registration rights agreement. See “Effect of Not Tendering.”
We
will
be deemed to have accepted validly tendered outstanding notes when and if we
have given oral or written notice to the exchange agent of our acceptance.
The
exchange agent will act as agent for the tendering holders for the purpose
of
receiving the exchange notes from us. If any tendered outstanding notes are
not
accepted for exchange because of an invalid tender, the occurrence of other
events described in this prospectus or otherwise, we will return the
certificates for any unaccepted outstanding notes, at our expense, to the
tendering holder promptly after expiration of the exchange offer.
Holders
who tender outstanding notes in the exchange offer will not be required to
pay
brokerage commissions or fees with respect to the exchange of outstanding notes.
Tendering holders will also not be required to pay transfer taxes in the
exchange offer. We will pay all charges and expenses in connection with the
exchange offer as described under the subheading “Solicitation of Tenders; Fees
and Expenses.” However, we will not pay any taxes incurred in connection with a
holder’s request to have exchange notes or non-exchanged notes issued in the
name of a person other than the registered holder. See “Transfer Taxes” in this
section below.
Expiration
Date; Extensions; Amendment
The
exchange offer will expire at 5:00 p.m., New York City time, on , 2006, or
the
“expiration date,” unless we extend the exchange offer. To extend the exchange
offer, we will notify the exchange agent and each registered holder of
outstanding notes of any extension before 9:00 a.m. New York City time, on
the
next business day after the previously scheduled expiration date. We reserve
the
right to extend the exchange offer, delay accepting any tendered outstanding
notes or, if any of the conditions described below under the heading “Conditions
to the Exchange Offer” have not been satisfied, to terminate the exchange offer.
Subject to the terms of the registration rights agreement, we also reserve
the
right to amend the terms of the exchange offer in any manner.
We
will
give oral or written notice of such delay, extension, termination or amendment
to the exchange agent.
If
we
amend the exchange offer in a manner that we consider material, we will disclose
such amendment by means of a prospectus supplement, and we will extend the
exchange offer for a period of five to ten business days.
If
we
determine to make a public announcement of any delay, extension, amendment
or
termination of the exchange offer, we will do so by making a timely release
through an appropriate news agency.
If
we
delay accepting any outstanding notes or terminate the exchange offer, we
promptly will pay the consideration offered, or return any outstanding notes
deposited, pursuant to the exchange offer as required by Rule 14e-1(c) under
the
Exchange Act.
Procedures
for Tendering Outstanding Notes
We
understand that the exchange agent has confirmed with DTC that any financial
institution that is a participant in DTC’s system may use its Automated Tender
Offer Program, or “ATOP,” to tender outstanding notes. We further understand
that the exchange agent will request, within two business days after the date
the exchange offer commences, that DTC establish an account relating to the
outstanding notes for the purpose of facilitating the exchange offer, and any
participant may make book-entry delivery of outstanding notes by
causing
DTC to transfer the outstanding notes into the exchange agent’s account in
accordance with ATOP procedures for transfer. Although delivery of the
outstanding notes may be effected through book-entry transfer into the exchange
agent’s account at DTC, unless an agent’s message is received by the exchange
agent in compliance with ATOP procedures, 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 the
procedures.
The
term
“agent’s message” means a message, transmitted by DTC and received by the
exchange agent and forming part of a book-entry confirmation, stating that
DTC
has received an express acknowledgment from a participant tendering outstanding
notes that are the subject of the book-entry confirmation and that the
participant has received and agrees to be bound by the terms of the letter
of
transmittal and that we may enforce such agreement against the participant.
An
agent’s message must, in any case, be transmitted to and received or confirmed
by the exchange agent, at its address set forth under the caption “Exchange
Agent” below, prior to 5:00 p.m., New York City time, on the expiration date.
Delivery of documents to DTC in accordance with its procedures does not
constitute delivery to the exchange agent.
Unless
the tender is being made in book-entry form, to tender in the exchange offer,
you must:
·
|
complete,
sign and date the letter of transmittal, or a facsimile of the letter
of
transmittal;
|
·
|
have
the signatures guaranteed if required by the letter of transmittal;
and
|
·
|
mail
or otherwise deliver the letter of transmittal or such facsimile,
together
with the outstanding notes and any other required documents, to the
exchange agent prior to 5:00 p.m., New York City time, on the expiration
date.
|
By
executing the letter of transmittal, you will make to us the representations
set
forth in the second paragraph under the heading “Transferability of the Exchange
Notes.”
All
tenders not withdrawn before the expiration date and the acceptance of the
tender by us will constitute agreement between you and us under the terms and
subject to the conditions in this prospectus and in the letter of transmittal
including an agreement to deliver good and marketable title to all tendered
notes prior to the expiration date free and clear of all liens, charges, claims,
encumbrances, adverse claims and rights and restrictions of any
kind.
The
method of delivery of outstanding notes and the letter of transmittal and all
other required documents to the exchange agent is at the election and sole
risk
of the holder. Instead of delivery by mail, you should use an overnight or
hand
delivery service. In all cases, you should allow for sufficient time to ensure
delivery to the exchange agent before the expiration of the exchange offer.
You
may request your broker, dealer, commercial bank, trust company or nominee
to
effect these transactions for you. You should not send any note, letter of
transmittal or other required document to us.
Any
beneficial owner whose outstanding 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 behalf of
the
beneficial owner. If the beneficial owner wishes to tender on that owner’s own
behalf, the beneficial owner must, prior to completing and executing the letter
of transmittal and delivering such beneficial owner’s outstanding notes, either
make appropriate arrangements to register ownership of the outstanding notes
in
such beneficial owner’s name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
The
exchange of outstanding notes will be made only after timely receipt by the
exchange agent of certificates for outstanding notes, a letter of transmittal
and all other required documents, or timely completion of a book-entry transfer.
If any tendered notes are not accepted for any reason or if outstanding notes
are submitted for a greater principal amount than the holder desires to
exchange, the exchange agent will return such unaccepted or non-exchanged notes
to the tendering holder promptly after the expiration or termination of the
exchange offer. In the case of outstanding notes tendered by book-entry
transfer, the exchange agent will credit the non-exchanged notes to an account
maintained with The Depository Trust Company.
Guarantee
of Signatures
Signatures
on letters of transmittal or notices of withdrawal must be guaranteed by a
member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or another “eligible
guarantor institution” within the meaning of Rule 17Ad-15 under the Exchange
Act, unless the original notes tendered pursuant thereto are
tendered:
·
|
by
a registered holder who has not completed the box entitled “Special
Issuance Instructions” or “Special Delivery Instructions” on the letter of
transmittal; and
|
·
|
for
the account of an eligible guarantor
institution.
|
In
the
event that a signature on a letter of transmittal or a notice of withdrawal
is
required to be guaranteed, such guarantee must be made by:
·
|
a
member firm of a registered national securities exchange of the National
Ass
ociation
of Securities Dealers, Inc.;
|
·
|
a
commercial bank or trust company having an office or correspondent
in the
United States; and
|
·
|
another
eligible guarantor institution.
|
Signature
on the Letter of Transmittal; Bond Powers and Endorsements
If
the
letter of transmittal is signed by a person other than the registered holder
of
the outstanding notes, the registered holder must endorse the outstanding notes
or provide a properly completed bond power. Any such endorsement or bond power
must be signed by the registered holder as that registered holder’s name appears
on the outstanding notes. Signatures on such outstanding notes and bond powers
must be guaranteed by an “eligible guarantor institution.”
If
you
sign the letter of transmittal or any outstanding notes or bond power as a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation, fiduciary or in any other representative capacity, you must so
indicate when signing. You must submit satisfactory evidence to the exchange
agent of your authority to act in such capacity.
Determination
of Valid Tenders; Our Rights under the Exchange Offer
All
questions as to the validity, form, eligibility, time of receipt, acceptance
and
withdrawal of tendered notes will be determined by us in our sole discretion,
which determination will be final and binding on all parties. We expressly
reserve the absolute right, in our sole discretion, to reject any or all
outstanding notes not properly tendered or any outstanding notes the acceptance
of which would, in the opinion of our counsel, be unlawful. We also reserve
the
absolute right in our sole discretion to waive or amend any conditions of the
exchange offer or to waive any defects or irregularities of tender for any
particular note, whether or not similar defects or irregularities are waived
in
the case of other notes. Our interpretation of the terms and conditions of
the
exchange offer will be final and binding on all parties. No alternative,
conditional or contingent tenders will be accepted. Unless waived, any defects
or irregularities in connection with tenders of outstanding notes must be cured
by the tendering holder within such time as we determine.
Although
we intend to request the exchange agent to notify holders of defects or
irregularities in tenders of outstanding notes, neither we, the exchange agent
nor any other person will have any duty to give notification of defects or
irregularities in such tenders or will incur any liability to holders for
failure to give such notification. Holders will be deemed to have tendered
outstanding notes only when such defects or irregularities have been cured
or
waived. Any outstanding 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
If
you
desire to tender outstanding notes pursuant to the exchange offer and (1)
certificates representing such outstanding notes are not immediately available,
(2) time will not permit your letter of transmittal, certificates representing
such outstanding notes and all other required documents to reach the exchange
agent on or prior to the expiration date, or (3) the procedures for book-entry
transfer (including delivery of an agent’s message) cannot be completed on or
prior to the expiration date, you may nevertheless tender such outstanding
notes
with the effect that such tender will be deemed to have been received on or
prior to the expiration date if all the following conditions are
satisfied:
·
|
you
must effect your tender through an “eligible guarantor institution,” which
is defined above under the heading “Guarantee of
Signatures.”
|
·
|
a
properly completed and duly executed notice of guaranteed delivery,
substantially in the form provided by us herewith, or an agent’s message
with respect to guaranteed delivery that is accepted by us, is received
by
the exchange agent on or prior to the expiration date as provided
below;
and
|
·
|
the
certificates for the tendered notes, in proper form for transfer
(or a
book entry confirmation of the transfer of such notes into the exchange
agent account at DTC as described above), together with a letter
of
transmittal (or a manually signed facsimile of the letter of transmittal)
properly completed and duly executed, with any signature guarantees
and
any other documents required by the letter of transmittal or a properly
transmitted agent’s message, are received by the exchange agent within
three New York Stock Exchange, Inc. trading days after the date of
execution of the notice of guaranteed
delivery.
|
The
notice of guaranteed delivery may be sent by hand delivery, facsimile
transmission or mail to the exchange agent and must include a guarantee by
an
eligible guarantor institution in the form set forth in the notice of guaranteed
delivery.
Withdrawal
Rights
Except
as
otherwise provided in this prospectus, you may withdraw tendered notes at any
time before 5:00 p.m., New York City time, on the expiration date. For a
withdrawal of tendered notes to be effective, a written or facsimile
transmission notice of withdrawal must be received by the exchange agent on
or
prior to the expiration of the exchange offer at the address set forth herein.
Any notice of withdrawal must:
·
|
specify
the name of the person having tendered the outstanding notes to be
wit
hdrawn;
|
·
|
identify
the outstanding notes to be withdrawn (including the certificate
number(s)
of the outstanding notes physically delivered) and principal amount
of
such notes, or, in the case of notes transferred by book-entry transfer,
the name and number of the account at
DTC;
|
·
|
be
signed by the holder in the same manner as the original signature
on the
letter of transmittal by which such outstanding notes were tendered,
with
any required signature guarantees, or be accompanied by documents
of
transfer sufficient to have the trustee with respect to the outstanding
notes register the transfer of such outstanding notes into the name
of the
person withdrawing the tender; and
|
·
|
specify
the name in which any such notes are to be registered, if different
from
that of the registered holder.
|
If
the
outstanding notes have been tendered under the book entry delivery procedure
described above, any notice of withdrawal must specify the name and number
of
the account at DTC to be credited with the withdrawn outstanding notes and
otherwise comply with the procedures of DTC’s book entry transfer
facility.
We
will
determine all questions as to the validity, form and eligibility (including
time
of receipt) of such outstanding notes in our sole discretion, and our
determination will be final and binding on all parties. Any permitted withdrawal
of notes may not be rescinded. Any notes properly withdrawn will thereafter
be
deemed not to have been validly tendered for purposes of the exchange offer.
The
exchange agent will return any withdrawn notes without cost to the holder
promptly after withdrawal of the notes. Holders may retender properly withdrawn
notes at any time before the expiration of the exchange offer by following
one
of the procedures described above under the heading “Procedures for Tendering
Outstanding Notes.”
Conditions
to the Exchange Offer
Notwithstanding
any other term of the exchange offer, we will not be required to accept for
exchange, or issue any exchange notes for, any outstanding notes, and may
terminate or amend the exchange offer before the acceptance of the outstanding
notes, if:
·
|
we
determine that the exchange offer violates any law, statute, rule,
regulation or interpretation by the staff of the SEC or any order
of any
governmental agency or court of competent jurisdiction;
or
|
·
|
any
action or proceeding is instituted or threatened in any court or
by or
before any governmental agency relating to the exchange offer which,
in
our judgment, could reasonably be expected to impair our ability
to
proceed with the exchange offer.
|
The
conditions listed above are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any of these conditions. We
may
waive these conditions in our reasonable discretion in whole or in part at
any
time and from time to time prior to the expiration date. The failure by us
at
any time to exercise any of the above rights shall not be considered a waiver
of
such right, and such right shall be considered an ongoing right which may be
asserted at any time and from time to time.
In
addition, we will not accept for exchange any outstanding notes tendered, and
no
exchange notes will be issued in exchange for those outstanding notes, if at
any
time any stop order is threatened or issued with respect to the registration
statement for the exchange offer and the exchange notes or the qualification
of
the Indenture under the Trust Indenture Act of 1939. In any such event, we
must
use commercially reasonable efforts to obtain the withdrawal or lifting of
any
stop order at the earliest possible moment.
Effect
of Not Tendering
To
the
extent outstanding notes are tendered and accepted in the exchange offer, the
principal amount of outstanding notes will be reduced by the amount so tendered
and a holder’s ability to sell untendered outstanding notes could be adversely
affected. In addition, after the completion of the exchange offer, the
outstanding notes will remain subject to restrictions on transfer. Because
the
outstanding notes have not been registered under the U.S. federal securities
laws, they bear a legend restricting their transfer absent registration or
the
availability of a specific exemption from registration. The holders of
outstanding notes not tendered will have no further registration rights, except
that, under limited circumstances, we may be required to file a “shelf”
registration statement for a continuous offer of outstanding notes.
Accordingly,
the outstanding notes not tendered may be resold only:
·
|
to
us or our subsidiaries;
|
·
|
pursuant
to a registration statement which has been declared effective under
the
Securities Act;
|
·
|
for
so long as the outstanding notes are eligible for resale pursuant
to Rule
144A under the Securities Act to a person the seller reasonably believes
is a qualified institutional buyer that purchases for its own account
or
for the account of a
qualified
institutional buyer to whom notice is given that the transfer is
being
made in reliance on Rule 144A;
or
|
·
|
pursuant
to any other available exemption from the registration requirements
of the
Securities Act (in which case we and the trustee shall have the right
to
require the delivery of an opinion of counsel, certifications and/or
other
information satisfactory to us and the trustee), subject in each
of the
foregoing cases to any requirements of law that the disposition of
the
seller’s property or the property of such investor account or accounts be
at all times within its or their control and in compliance with any
applicable state securities laws.
|
Upon
completion of the exchange offer, due to the restrictions on transfer of the
outstanding notes and the absence of such restrictions applicable to the
exchange notes, it is likely that the market, if any, for outstanding notes
will
be relatively less liquid than the market for exchange notes. Consequently,
holders of outstanding notes who do not participate in the exchange offer could
experience significant diminution in the value of their outstanding notes,
compared to the value of the exchange notes.
Regulatory
Approvals
Other
than the U.S. federal securities laws, there are no U.S. federal or state
regulatory requirements that we must comply with and there are no approvals
that
we must obtain in connection with the exchange offer.
Solicitation
of Tenders; Fees and Expenses
We
will
bear the expenses of soliciting tenders and are mailing the principal
solicitation. However, our officers and regular employees and those of our
affiliates may make additional solicitation by telegraph, telecopy, telephone
or
in person.
We
have
not retained any dealer-manager in connection with the exchange offer. We will
not make any payments to brokers, dealers, or others soliciting acceptances
of
the exchange offer. However, we may pay the exchange agent reasonable and
customary fees for its services and may reimburse it for its reasonable
out-of-pocket expenses.
We
will
pay the cash expenses incurred in connection with the exchange offer. These
expenses include fees and expenses of the exchange agent and trustee, accounting
and legal fees and printing costs, among others.
Fees
and Expenses
We
will
not make any payment to brokers, dealers or others soliciting acceptances of
the
exchange offer. We will pay certain other expenses to be incurred in connection
with the exchange offer, including the fees and expenses of the exchange agent
and certain accounting and legal fees.
Holders
who tender their outstanding notes for exchange will not be obligated to pay
transfer taxes. However, if:
·
|
exchange
notes are to be delivered to, or issued in the name of, any person
other
than the registered holder of the outstanding notes
tendered;
|
·
|
tendered
outstanding notes are registered in the name of any person other
than the
person signing the letter of transmittal;
or
|
·
|
a
transfer tax is imposed for any reason other than the exchange of
outstanding notes in connection with the exchange
offer,
|
then
the
amount of any such transfer taxes (whether imposed on the registered holder
or
any other person) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption from them is not submitted with
the letter of transmittal, the amount of such transfer taxes will be billed
directly to the tendering holder.
Transfer
Taxes
We
will
pay all transfer taxes, if any, required to be paid by us in connection with
the
exchange of the outstanding notes for the exchange notes. However, holders
who
instruct us to register exchange notes in the name of, or request that
outstanding notes not tendered or not accepted for exchange be returned to,
a
person other than the registered holder, will be responsible for the payment
of
any transfer tax arising from such transfer.
Accounting
Treatment
The
exchange notes will be recorded at the same carrying value as the outstanding
notes as reflected in our accounting records on the date of the exchange.
Accordingly, we will not recognize any gain or loss for accounting purposes
upon
the completion of the exchange offer. The expenses of the exchange offer that
we
pay will be charged to expense in accordance with generally accepted accounting
principles.
The
Exchange Agent
Wells
Fargo Bank, National Association is serving as the exchange agent for the
exchange offer. ALL EXECUTED LETTERS OF TRANSMITTAL SHOULD BE SENT TO THE
EXCHANGE AGENT AT THE ADDRESS LISTED BELOW. Questions, requests for assistance
and requests for additional copies of this prospectus or the letter of
transmittal should be directed to the exchange agent at the address or telephone
number listed below.
|
|
|
By
Registered or Certified Mail:
|
|
Wells
Fargo Bank, N.A.
Corporate
Trust Operations
MAC
N9303-121
P.O.
Box 1517
Minneapolis,
MN 55480
|
By
Overnight Courier or Regular Mail:
|
|
Wells
Fargo Bank, N.A.
Corporate
Trust Operations
MAC
N9303-121
6th
& Marquette Avenue
Minneapolis,
MN 55479
|
By
Hand Delivery:
|
|
Wells
Fargo Bank, N.A.
Corporate
Trust Services
608
2nd Avenue South
Northstar
East
Building―12th Floor
Minneapolis,
MN 55402
|
Confirm
by Telephone:
|
|
(800)
344-5128
|
|
|
|
Originals
of all documents sent by facsimile should be promptly sent to the exchange
agent
by registered or certified mail, by hand, or by overnight delivery
service.
DELIVERY
TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
We
will
not receive any proceeds from the issuance of exchange notes in the exchange
offer. The net proceeds from the issuance of the outstanding notes were used
to
consummate the Acquisition. The outstanding notes bear interest at a rate of
8
7
/
8
%
per
annum, in respect of the outstanding fixed rate notes and LIBOR (adjusted
quarterly) plus 3.875% per annum, in respect of the outstanding floating rate
notes, and mature on September 15, 2014. In consideration for issuing the
exchange notes, we will receive in exchange the outstanding notes of like
principal amount. The outstanding 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 in our indebtedness.
We
have agreed to bear the expenses of the exchange offer. No underwriter is being
used in connection with the exchange offer
.
CAPITALIZATION
The
following table sets forth our cash and capitalization as of July 1, 2006 both
on an actual basis and on a pro forma basis to give effect to the Acquisition.
You should read this table in conjunction with the “Unaudited Pro Forma
Condensed Consolidated Financial Information,” “Selected Historical Financial
Data” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and the related notes included elsewhere in this
prospectus.
|
|
|
|
|
|
|
|
As
of July 1, 2006
|
|
|
|
Actual
|
|
Pro Forma
|
|
|
|
(in
millions)
|
|
Cash
|
|
$
|
35.3
|
|
$
|
20.0
|
|
|
|
|
|
|
|
|
|
Long-term
debt, including current portion:
|
|
|
|
|
|
|
|
Revolving
Credit Facility
(1)
|
|
$
|
—
|
|
$
|
20.0
|
|
Term
B loans
|
|
|
—
|
|
|
675.0
|
|
Notes
offered hereby
|
|
|
—
|
|
|
750.0
|
|
Senior
subordinated notes
|
|
|
—
|
|
|
425.0
|
|
Other
existing debt
|
|
|
1,135.8
|
|
|
26.7
(2
|
)
|
|
|
|
|
|
|
|
|
Total
long-term debt, including current portion
|
|
|
1,135.8
|
|
|
1,896.7
|
|
Total
stockholders’ equity
|
|
|
227.7
|
|
|
483.5
(3
|
)
|
|
|
|
|
|
|
|
|
Total
capitalization
|
|
$
|
1,363.5
|
|
$
|
2,380.2
|
|
|
|
|
|
|
|
|
|
(1)
|
Our
current revolving credit facility provides for available borrowings
of
$200.0 million. On the closing date of the Acquisition, $165.1 million
of
the revolving credit facility was available for borrowing.
|
(2)
|
Consists
of capital leases that remained outstanding after the Acquisition.
|
(3)
|
Pro
forma stockholders’ equity consists of cash equity investments in Berry
Plastics Group.
|
The
following tables set forth unaudited pro forma condensed consolidated financial
information of Holdings as of and for the 26 weeks ended July 1, 2006 and
July 2, 2005 and fiscal 2005 and have been derived by application of pro
forma adjustments to our audited and unaudited historical consolidated financial
statements included elsewhere in this prospectus. The unaudited pro forma
condensed consolidated statements of operations give effect to the Acquisition
as if it had occurred on the first day of the applicable period. The unaudited
pro forma balance sheet gives effect to the Acquisition as if it had occurred
on
July 1, 2006.
The
unaudited pro forma condensed consolidated financial information includes
adjustments directly attributable to the Kerr Acquisition and the Acquisition
that are expected to have a continuing impact on us. The pro forma adjustments
are described in the notes accompanying the unaudited pro forma condensed
consolidated financial information. The pro forma adjustments are based upon
available information and certain assumptions we believe are reasonable.
The
Acquisition has been accounted for using the purchase method of accounting.
The
final allocation of the purchase price in the Acquisition will be determined
at
a later date and depend on a number of factors, including the final valuation
of
our tangible and identifiable intangible assets acquired and liabilities assumed
in the Acquisition. An independent third-party appraiser will perform a
valuation of these assets as of the closing date of the Acquisition, and upon
a
final valuation the purchase allocation will be adjusted. Such final
adjustments, including increases to depreciation and amortization resulting
from
the allocation of purchase price to amortizable tangible and intangible assets,
may be material. This valuation will be based on the actual net tangible and
intangible assets and liabilities that existed as of the closing date of the
Acquisition. In addition, we will record an adjustment to stockholders’ equity
at a later date to adjust the carryover basis of continuing ownership.
As
a
result of the Acquisition, Holdings is a wholly-owned by Berry Plastics Group
with assets, liabilities and an equity structure that will not be comparable
to
historical periods.
The
unaudited pro forma condensed consolidated financial information does not
purport to represent what our results of operations and financial condition
would have been had the Kerr Acquisition and the Acquisition actually occurred
as of the dates indicated, nor does it project our results of operations for
any
future period or our financial condition at any future date.
The
unaudited pro forma condensed consolidated financial information should be
read
in conjunction with “Risk Factors,” “Selected Historical Financial Data,”
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and our historical consolidated financial statements included
elsewhere in this prospectus.
BPC
Holding Corporation
Unaudited
Pro Forma Condensed Consolidated Balance Sheet
As
of July 1, 2006
(dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
Historical
|
|
Pro
Forma
Adjustments
|
|
Pro
Forma
|
|
Assets
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
35,251
|
|
$
|
(15,251
(a
|
)
)
|
$
|
20,000
|
|
Accounts
receivable (less allowance for doubtful accounts of $6,376 at July
1,
2006)
|
|
|
166,924
|
|
|
—
|
|
|
166,924
|
|
Inventories
|
|
|
163,354
|
|
|
—
|
|
|
163,354
|
|
Other
current assets
|
|
|
37,868
|
|
|
—
|
|
|
37,868
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
403,397
|
|
|
(15,251
|
)
|
|
388,146
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment (less accumulated depreciation)
|
|
|
436,470
|
|
|
—
|
|
|
436,470
|
|
Intangible
assets
|
|
|
833,419
|
|
|
1,014,894
(b
|
)
|
|
1,848,313
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
1,673,286
|
|
$
|
999,643
|
|
$
|
2,672,929
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
97,310
|
|
$
|
—
|
|
$
|
97,310
|
|
Accrued
interest
|
|
|
17,046
|
|
|
(17,046
(c
|
)
)
|
|
—
|
|
Other
current liabilities
|
|
|
74,804
|
|
|
—
|
|
|
74,804
|
|
Current
portion of long-term debt
|
|
|
14,419
|
|
|
(1,200
(d
|
)
)
|
|
13,219
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
203,579
|
|
|
(18,246
|
)
|
|
185,333
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt, less current portion
|
|
|
1,121,401
|
|
|
762,039
(e
|
)
|
|
1,883,440
|
|
Other
liabilities
|
|
|
120,637
|
|
|
—
|
|
|
120,637
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
1,445,617
|
|
|
743,793
|
|
|
2,189,410
|
|
Total
stockholders’ equity
|
|
|
227,669
|
|
|
255,850
(f
|
)
|
|
483,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders’ equity
|
|
$
|
1,673,286
|
|
$
|
999,643
|
|
$
|
2,672,929
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
to Unaudited Pro Forma Condensed Consolidated Balance
Sheet
(dollars
in thousands)
(a)
This
adjustment reflects the elimination of cash of $35,251 not being acquired in
the
Acquisition plus a draw of $20,000 on the revolving line of credit at closing
for general working capital purposes.
(b)
The
Acquisition will be accounted for as a purchase. Preliminarily, we have
allocated the excess of the purchase price over the net assets acquired to
goodwill (included in intangible assets). Under GAAP, goodwill is not amortized
but is reviewed for impairment annually. We have not begun the process of
reviewing our net assets to determine the amount of any write-up or write-down
to fair value of the net assets acquired in connection with the Acquisition.
Accordingly, the allocation described below is subject to change. If our
non-goodwill assets are written up to fair value in connection with the
Acquisition, our expenses in the future will be higher as a result of increased
depreciation and amortization of our assets. Similarly, if our non-goodwill
assets are written down to fair value, our depreciation and amortization will
decrease in the future.
|
|
|
|
Purchase
price
|
|
$
|
2,223,300
|
|
Estimated
transaction costs
|
|
|
110,219
|
|
|
|
|
|
|
Total
consideration
|
|
|
2,333,519
|
|
Less:
Net assets acquired
(1)
|
|
|
1,318,625
|
|
|
|
|
|
|
Net
adjustments
(2)
|
|
$
|
1,014,894
|
|
|
|
|
|
|
(1)
Net
assets acquired equals the historical basis of the assets acquired $(1,638,035)
less liabilities assumed in
the
Acquisition not
reflected in the purchase price above $(319,410).
(2)
Assumes
a
100% step up in basis pursuant to purchase accounting. The final net adjustments
will be lower to reflect an adjustment to stockholders’ equity at a later date
relating to the carryover basis of continuing ownership. The Company currently
estimates the step up will be limited by 11%.
(c)
This
adjustment reflects the elimination of the accrued interest as of July 1,
2006 on the debt being repurchased or repaid in connection with the Acquisition.
(d)
This
adjustment reflects the elimination of the current portion of long-term debt
being repurchased or repaid in connection with the Acquisition offset by the
current portion of the long-term debt being incurred to finance the Acquisition.
|
|
|
|
Current
portion of debt being repurchased or repaid
|
|
$
|
(7,950
|
)
|
Current
portion of debt being incurred
|
|
|
6,750
|
|
|
|
|
|
|
Net
adjustment
|
|
$
|
(1,200
|
)
|
|
|
|
|
|
(e)
This
adjustment reflects the incurrence of the long-term debt being incurred to
finance the Acquisition offset by the elimination of the long-term debt being
repurchased or repaid in connection with the Acquisition. This adjustment
assumes all of the old notes are repurchased in the tender offer at the closing
of the Acquisition.
|
|
|
|
Term
B loans
|
|
$
|
675,000
|
|
Revolving
Credit Facility
|
|
|
20,000
|
|
Senior
subordinated notes
|
|
|
425,000
|
|
Outstanding
notes
|
|
|
750,000
|
|
Long-term
debt being repurchased or repaid, less current portion
|
|
|
(1,107,961
|
)
|
|
|
|
|
|
Net
adjustment
|
|
$
|
762,039
|
|
|
|
|
|
|
(f)
This
adjustment reflects the increase to stockholders’ equity resulting from the
equity capital being contributed.
BPC
Holding Corporation
Unaudited
Pro Forma Condensed Consolidated Statement of Operations
For
the 26 Weeks Ended July 1, 2006
(dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
Historical
|
|
Pro
Forma
Adjustments
|
|
Pro Forma
|
|
Net
sales
|
|
$
|
731,078
|
|
$
|
—
|
|
$
|
731,078
|
|
Cost
of goods sold
|
|
|
583,941
|
|
|
—
|
|
|
583,941
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
147,137
|
|
|
—
|
|
|
147,137
|
|
Operating
expenses
|
|
|
70,282
|
|
|
1,639
(a,h
|
)
|
|
71,921
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
76,855
|
|
|
(1,639)
|
|
|
75,216
|
|
Other
income
|
|
|
(299
|
)
|
|
—
|
|
|
(299
|
)
|
Interest
expense, net
|
|
|
44,511
|
|
|
39,603
(b
|
)
|
|
84,114
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before taxes
|
|
|
32,643
|
|
|
(41,242
|
)
|
|
(8,599
|
)
|
Taxes
(benefit)
|
|
|
14,731
|
|
|
(18,600
(c
|
)
)
|
|
(3,869
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
17,912
|
|
$
|
(22,642
|
)
|
$
|
(4,730
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Berry
Plastics Holding Corporation
Unaudited
Pro Forma Condensed Consolidated Statement of Operations
For
the 26 Weeks Ended July 2, 2005
(dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
Kerr
(d)
|
|
Adjustments
Relating
to
Kerr Acquisition
|
|
Adjustments
Relating
to
the Transactions
|
|
Pro Forma
|
|
Net
sales
|
|
$
|
508,181
|
|
$
|
168,315
|
|
$
|
—
|
|
$
|
—
|
|
$
|
676,496
|
|
Cost
of goods sold
|
|
|
417,493
|
|
|
139,108
|
|
|
—
|
|
|
—
|
|
|
556,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
90,688
|
|
|
29,207
|
|
|
—
|
|
|
—
|
|
|
119,895
|
|
Operating
expenses
|
|
|
40,227
|
|
|
15,283
|
|
|
5,334
(e
|
)
|
|
1,500
(a,h)
|
|
|
62,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
50,461
|
|
|
13,924
|
|
|
(5,334
|
)
|
|
(1,500)
|
|
|
57,551
|
|
Other
expenses
|
|
|
1,569
|
|
|
7,351
|
|
|
—
|
|
|
—
|
|
|
8,920
|
|
Interest
expense, net
|
|
|
30,123
|
|
|
4,343
|
|
|
8,081
(f
|
)
|
|
41,268
(b
|
)
|
|
83,815
|
|
Debt
extinguishment fee
|
|
|
7,045
|
|
|
—
|
|
|
—
|
|
|
(7,045
(g
|
)
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before taxes
|
|
|
11,724
|
|
|
2,230
|
|
|
(13,415
|
)
|
|
(35,723
|
)
|
|
(35,184
|
)
|
Taxes
(benefit)
|
|
|
6,174
|
|
|
701
|
|
|
(5,138
|
)
|
|
(17,569
(c
|
)
)
|
|
(15,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
5,550
|
|
$
|
1,529
|
|
$
|
(8,277
|
)
|
$
|
(18,154
|
)
|
$
|
(19,352
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BPC
Holding Corporation
Unaudited
Pro Forma Condensed Consolidated Statement of Operations
For
Fiscal 2005
(dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
Kerr
(d)
|
|
Adjustments
Relating
to
Kerr Acquisition
|
|
Adjustments
Relating
to
the Transactions
|
|
Pro Forma
|
|
Net
sales
|
|
$
|
1,169,704
|
|
$
|
168,315
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,338,019
|
|
Cost
of goods sold
|
|
|
943,370
|
|
|
139,108
|
|
|
—
|
|
|
—
|
|
|
1,082,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
226,334
|
|
|
29,207
|
|
|
—
|
|
|
—
|
|
|
255,541
|
|
Operating
expenses
|
|
|
110,545
|
|
|
15,283
|
|
|
5,334
(e
|
)
|
|
3,000(ah
|
)
|
|
134,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
115,789
|
|
|
13,924
|
|
|
(5,334
|
)
|
|
(3,000)
|
|
|
121,379
|
|
Other
expenses
|
|
|
1,354
|
|
|
7,351
|
|
|
—
|
|
|
—
|
|
|
8,705
|
|
Interest
expense, net
|
|
|
73,274
|
|
|
4,343
|
|
|
8,081
(f
|
)
|
|
82,163
(b
|
)
|
|
167,861
|
|
Debt
extinguishment fee
|
|
|
7,045
|
|
|
—
|
|
|
—
|
|
|
(7,045
(g
|
)
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before taxes
|
|
|
34,116
|
|
|
2,230
|
|
|
(13,415
|
)
|
|
(78,118
|
)
|
|
(55,187
|
)
|
Taxes
(benefit)
|
|
|
14,325
|
|
|
701
|
|
|
(5,138
|
)
|
|
(34,723
(c
|
)
)
|
|
(24,835
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
19,791
|
|
$
|
1,529
|
|
$
|
(8,277
|
)
|
$
|
(43,395
|
)
|
$
|
(30,352
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
to Unaudited Pro Forma Condensed Consolidated Statements of
Operations
(dollars
in thousands)
(a)
This
adjustment reflects the estimated management fees that will be paid to the
Sponsors after the Acquisition. It is calculated as the greater of $3,000 or
1.25% of Adjusted EBITDA per year.
(b)
This
adjustment reflects the elimination of the historical interest expense incurred
on the debt being repurchased or repaid in connection with the Acquisition,
including the elimination of the amortization of debt financing costs, offset
by
the estimated interest expense on the debt being incurred in connection with
the
Acquisition and the amortization of deferred financing costs incurred in
connection therewith. New annual cash interest expense is assumed to be $162,930
related to the $750,000 in aggregate principal amount of outstanding notes,
the $425,000 in aggregate principal amount of the senior subordinated notes,
the
term B loans under the senior secured credit facilities in the principal amount
of $675,000 and existing capital leases. LIBOR used in the calculation of our
assumed interest rates was 5.25%. A 0.125% increase in the variable interest
rate on our variable rate borrowings would increase the foregoing annual cash
interest expense by $1,125. This adjustment also assumes amortization of $43,063
of debt issuance costs on a straight-line basis over the life of the related
debt. This would have resulted in non-cash interest expense for fiscal 2005,
on
a pro forma basis, of $600 for the revolving portion of the senior secured
credit facilities, $1,700 for the term B loans under the senior secured credit
facilities, $1,800 for the outstanding notes and $1,300 for the senior
subordinated notes.
(c)
This
adjustment reflects the elimination of the historic tax expense on the income
of
the Company and Kerr and the new calculation of tax expense (benefit) based
on a
rate of 45% on pro forma pre-tax income.
(d)
Reflects
Kerr’s historical results of operations from January 2, 2005 through June 3,
2005.
(e)
This
adjustment reflects the addition of intangible amortization in connection with
the Kerr Acquisition.
(f)
This
adjustment reflects the addition of interest expense in connection with the
Kerr Acquisition.
(g)
This
adjustment reflects the elimination of deferred financing fees written off
in
connection with an amendment to our old senior secured credit facilities in
2005.
(h)
The
pro
forma statements assume that the excess of the purchase price over the net
assets acquired will all be allocated to goodwill. We have not begun the process
of reviewing our assets to determine the amount of any write up or write down
to
fair value of our fixed assets or definite lived intangible assets. A $10,000
adjustment to our definite lived intangible assets would be a $500 annual
adjustment to our amortization expense. A $5,000 adjustment to our fixed assets
would be a $1,000 annual adjustment to our depreciation expense.
SELECTED
HISTORICAL FINANCIAL DATA
The
following selected financial data are derived from our consolidated financial
statements. The data should be read in connection with the consolidated
financial statements, related notes and other financial information included
herein. Our fiscal years are 52- or 53-week periods ending generally on the
Saturday closest to December 31. All references herein to “2005,” “2004,”
“2003,” “2002,” and “2001” relate to the fiscal years ended December 31, 2005,
January 1, 2005, December 27, 2003, December 28, 2002, and December 29, 2001,
respectively. The results under Holding’s prior ownership have been combined
with results subsequent to the merger on July 22, 2002, whereby GS Berry
Acquisition Corp., a newly formed entity controlled by various private equity
funds affiliated with Goldman, Sachs & Co., merged with and into BPC Holding
Corporation (the “Goldman merger”). The selected historical consolidated
financial information for the 26 weeks ended July 1, 2006 and July 2, 2005
have
been derived from our unaudited consolidated financial statements included
elsewhere in this prospectus. Our historical consolidated financial information
may not be comparable to or indicative of our future performance. For a
discussion of certain factors that materially affect the comparability of the
consolidated financial data or cause the data reflected herein not to be
indicative of our future financial condition or results of operations, see
“Risk
Factors.”
For
the
purpose of this table, “Predecessor” refers to BPC Holding Corporation before
the Goldman merger, and “Company” refers to BPC Holding Corporation after the
Goldman merger but before the consummation of the Acquisition.
|
|
Predecessor
|
|
Combined
Company
&
Predecessor
|
|
Company
|
|
Company
|
|
Company
|
|
26
Weeks Ended
|
|
|
|
Fiscal Year
|
|
July 2,
2005
|
|
July 1,
2006
|
|
|
|
2001
|
|
2002
|
|
2003
|
|
2004
|
|
2005
|
|
|
|
(dollars in
thousands)
(
u
naudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement
of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
461,659
|
|
$
|
494,303
|
|
$
|
551,876
|
|
$
|
814,213
|
|
$
|
1,169,704
|
|
$
|
508,181
|
|
$
|
731,078
|
|
Cost
of goods sold
|
|
|
338,000
|
|
|
371,273
|
|
|
420,750
|
|
|
639,329
|
|
|
943,370
|
|
|
417,493
|
|
|
583,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
123,659
|
|
|
123,030
|
|
|
131,126
|
|
|
174,884
|
|
|
226,334
|
|
|
90,688
|
|
|
147,137
|
|
Operating
expenses
(1)
|
|
|
70,192
|
|
|
77,467
|
|
|
59,936
|
|
|
81,008
|
|
|
110,545
|
|
|
40,227
|
|
|
70,282
|
|
Operating
income
|
|
|
53,467
|
|
|
45,563
|
|
|
71,190
|
|
|
93,876
|
|
|
115,789
|
|
|
50,461
|
|
|
76,855
|
|
Other
expenses (income)
(2)
|
|
|
473
|
|
|
299
|
|
|
(7
|
)
|
|
—
|
|
|
1,354
|
|
|
1,569
|
|
|
(299
|
)
|
Loss
on extinguished debt
(3)
|
|
|
—
|
|
|
25,328
|
|
|
250
|
|
|
—
|
|
|
7,045
|
|
|
7,045
|
|
|
—
|
|
Interest
expense, net
(4)
|
|
|
54,355
|
|
|
49,254
|
|
|
45,413
|
|
|
53,185
|
|
|
73,274
|
|
|
30,123
|
|
|
44,511
|
|
Income
(loss) before income taxes
|
|
|
(1,361
|
)
|
|
(29,318
|
)
|
|
25,534
|
|
|
40,691
|
|
|
34,116
|
|
|
11,724
|
|
|
32,643
|
|
Income
taxes
|
|
|
734
|
|
|
3,298
|
|
|
12,486
|
|
|
17,740
|
|
|
14,325
|
|
|
6,174
|
|
|
14,731
|
|
Net
income (loss)
|
|
|
(2,095
|
)
|
|
(32,616
|
)
|
|
13,048
|
|
|
22,951
|
|
|
19,791
|
|
|
5,550
|
|
|
17,912
|
|
Preferred
stock dividends
|
|
|
9,790
|
|
|
6,468
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization
of preferred stock discount
|
|
|
1,024
|
|
|
574
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
income (loss) attributable to common stockholders
|
|
$
|
(12,909
|
)
|
$
|
(39,658
|
)
|
$
|
13,048
|
|
$
|
22,951
|
|
$
|
19,791
|
|
$
|
5,550
|
|
$
|
17,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working
capital
(5)
|
|
$
|
48,351
|
|
$
|
71,468
|
|
$
|
88,850
|
|
$
|
118,981
|
|
$
|
211,118
|
|
$
|
154,675
|
|
$
|
196,032
|
|
Total
assets
|
|
|
446,876
|
|
|
760,576
|
|
|
1,015,806
|
|
|
1,005,144
|
|
|
1,647,830
|
|
|
1,553,641
|
|
|
1,673,286
|
|
Total
debt
|
|
|
485,881
|
|
|
609,943
|
|
|
751,605
|
|
|
697,558
|
|
|
1,160,620
|
|
|
1,167,554
|
|
|
1,135,820
|
|
Stockholders’
equity (deficit)
|
|
|
(139,601
|
)
|
|
75,163
|
|
|
152,591
|
|
|
183,891
|
|
|
203,388
|
|
|
182,692
|
|
|
227,669
|
|
Other
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
(6)
|
|
|
50,907
|
|
|
41,965
|
|
|
44,078
|
|
|
60,816
|
|
|
88,720
|
|
|
34,149
|
|
|
53,996
|
|
Capital
expenditures
|
|
|
32,834
|
|
|
28,683
|
|
|
29,949
|
|
|
52,624
|
|
|
57,829
|
|
|
32,303
|
|
|
52,217
|
|
(1)
|
Operating
expenses include $20,987 related to the Goldman merger during fiscal
2002.
|
(2)
|
Other
expenses (income) consist of net losses (gains) on disposal of property
and equipment and unrealized loss (gain) on investment in Southern
Packaging.
|
(3)
|
In
2005, the loss on extinguished debt represents unamortized deferred
financing costs on our existing term loan expensed as a result of
an
amendment to our old senior secured credit facilities. The loss on
extinguished debt in 2003 represents the legal costs associated with
amending our old senior secured credit facilities in connection with
the
Landis Acquisition. As a result of the retirement of outstanding
indebtedness, $6,600 of existing deferred financing fees and $18,700
of
prepayment fees and related charges were charged to expense in 2002
as a
loss on extinguished debt.
|
(4)
|
Includes
non-cash interest expense of $11,268, $2,476, $2,318, $1,862, $1,945,
$982
and $954 in fiscal 2001, 2002, 2003, 2004, and 2005 and the 26 weeks
ended
July 2, 2005 and July 1, 2006, respectively.
|
(5)
|
Represents
total current assets (other than cash) less total current liabilities
(other than accrued interest and the current portion of long-term
debt).
|
(6)
|
Depreciation
and amortization excludes non-cash amortization of deferred financing
fees
and debt premium/discount amortization, which are included in interest
expense.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of our results of operations and financial
condition covers periods prior to the consummation of the
Acquisition.
Accordingly, the discussion and analysis of historical periods does not reflect
the significant impact that the Acquisition will have on us, including
significantly increased leverage and liquidity requirements. You should read
the
following discussion of our results of operations and financial condition with
the “Unaudited Pro Forma Condensed Consolidated Financial Information,”
“Selected Historical Financial Data” and the audited condensed consolidated
financial statements and related notes included elsewhere in this prospectus.
This discussion contains forward-looking statements and involves numerous risks
and uncertainties, including, but not limited to, those described in the “Risk
Factors” section of this prospectus. Actual results may differ materially from
those contained in any forward looking statements. See “Disclosure Regarding
Forward-Looking Statements.”
Overview
We
believe we are one of the world’s leading manufacturers and suppliers of
value-added plastic packaging products. We manufacture a broad range of
innovative, high quality packaging solutions using our collection of over 1,500
proprietary molds and an extensive set of internally developed processes and
technologies. We sell our packaging solutions to over 12,000 customers comprised
of a favorable balance of leading national blue-chip customers as well as a
collection of smaller local specialty businesses. We believe that our
proprietary tools and technologies, low-cost manufacturing capabilities and
significant operating and purchasing scale provide us with a competitive
advantage in the marketplace. Our unique combination of leading market
positions, proven management team, product and customer diversity and
manufacturing and design innovation provides access to a variety of growth
opportunities and has allowed us to achieve consistent organic volume growth
in
excess of market growth rates.
The
Acquisition
On
September 20, 2006, Merger Sub merged with and into Holdings pursuant to the
Merger Agreement with Holdings, Berry Plastics Group and Merger Sub (a
wholly-owned subsidiary of Berry Plastics Group). Pursuant to the Merger
Agreement, we are now a wholly-owned subsidiary of Berry Plastics Group, the
principal stockholder of which is Apollo.
In
connection with the Acquisition, affiliates of the Sponsors, a minority
investor,
and
certain members of our senior management team and other employees have invested
cash of approximately $483.5 million in shares of Berry Plastics Group’s common
stock.
The
Acquisition was funded with shareholders’ equity and following debt components:
·
|
Proceeds
from o
ur
issuance of $750.0 million aggregate principal amount of outstanding
notes;
|
·
|
New
borrowings of $675.0 million in Term B loans and $20.0 million under
the revolving credit facility, both as available under the senior
secured
credit facilities; and
|
·
|
Proceeds
from our issuance of $425.0 million aggregate principal amount of
senior
subordinated notes to Goldman.
|
Debt
Service Obligations
Because
we have a significant amount of indebtedness, our ability to generate sufficient
cash flow from operations to pay our debt service obligations is a principal
focus of management in our business planning and budgeting.
Among
the
important factors that affect our cash flow is the extent to which we can offset
the impact of plastic resin costs by maintaining a stable material spread,
which
is the difference between selling prices and resin costs on a per-pound basis.
As discussed in more detail below under “Resin Cost Sensitivity”, our
maintenance of a stable material spread is challenged in periods of rapid
changes in raw material costs.
Our
net
cash provided by operating activities for the 26 weeks ended July 1, 2006
(“YTD”) was $87.1 million, compared to $51.4 million for the 26 weeks ended July
2, 2005 (“Prior YTD”). The increase of $35.7 million is primarily the result of
improved operations as operating income before depreciation and amortization
increased $46.2 million over the Prior YTD. While we anticipate that we will
continue to generate sufficient cash flow to service our indebtedness over
the
next several years, a number of factors could adversely affect our ability
to
repay or refinance indebtedness, including those described under “Risk
Factors—To service our indebtedness, we will require a significant amount of
cash. Our ability to generate or borrow cash depends on many factors beyond
our
control”.
Critical
Accounting Policies and Estimates
We
disclose those accounting policies that we consider to be significant in
determining the amounts to be utilized for communicating our consolidated
financial position, results of operations and cash flows in the second note
to
our consolidated financial statements included elsewhere in this prospectus.
Our
discussion and analysis of our financial condition and results of operations
are
based on our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of financial statements in conformity with these principles
requires management to make estimates and assumptions that affect amounts
reported in the financial statements and accompanying notes. Actual results
are
likely to differ from these estimates, but management does not believe such
differences will materially affect our financial position or results of
operations, although no assurance can be given as to such effect. We believe
that the following accounting policies are the most critical because they have
the greatest impact on the presentation of our financial condition and results
of operations.
Allowance
for doubtful accounts
.
We
evaluate our allowance for doubtful accounts on a quarterly basis and review
any
significant customers with delinquent balances to determine future
collectibility. We base our determinations on legal issues (such as bankruptcy
status), past history, current financial and credit agency reports, and the
experience of our credit representatives. We reserve accounts that we deem
to be
uncollectible in the quarter in which we make the determination. We maintain
additional reserves based on our historical bad debt experience. We believe
that, based on past history and our credit policies, the net accounts receivable
are of good quality. A ten percent increase or decrease in our bad debt
experience would not have a material impact on our results of operations. Our
allowance for doubtful accounts was $6.4 million and $5.8 million as of
July 1, 2006 and December 31, 2005, respectively.
Inventory
obsolescence
.
We
evaluate our reserve for inventory obsolescence on a quarterly basis and review
inventory on-hand to determine future salability. We base our determinations
on
the age of the inventory and the experience of our personnel. We reserve
inventory that we deem to be not salable in the quarter in which we make the
determination. We believe, based on past history and our policies and
procedures, that our net inventory is salable. A ten percent increase or
decrease in our inventory obsolescence experience would not have a material
impact on our results of operations. Our reserve for inventory obsolescence
was
$8.4 million and $8.5 million as of July 1, 2006 and December 31,
2005, respectively.
Medical
insurance
.
We
offer our employees medical insurance that is primarily self-insured by us.
As a
result, we accrue a liability for known claims as well as the estimated amount
of expected claims incurred but not reported. We evaluate our medical claims
liability on a quarterly basis and obtain an independent actuarial analysis
on
an annual basis. Based on our analysis, we believe that our recorded medical
claims liability should be sufficient. A ten percent increase or decrease in
our
medical claims experience would not have a material impact on our results of
operations. Our accrued liability for medical claims was $5.1 million, including
reserves for expected medical claims incurred but not reported, as of
July 1, 2006 and December 31, 2005.
Workers’
compensation insurance.
Starting
in fiscal 2000, we converted the majority of our facilities to a large
deductible program for workers’ compensation insurance. On a quarterly basis, we
evaluate our liability based on third-party adjusters’ independent analyses by
claim. Based on our analysis, we believe that our recorded workers’ compensation
liability should be sufficient. A ten percent increase or decrease in our
workers’ compensations claims experience would not have a material impact on our
results of operations. Our accrued liability for workers’ compensation claims
was $4.3 million and $4.7 million as of July 1, 2006 and December 31,
2005, respectively.
Revenue
recognition.
Revenue
from sales of products is recognized at the time product is shipped to the
customer at which time title and risk of ownership transfer to the purchaser.
Impairments
of Long-Lived Assets.
In
accordance with the methodology described in FASB Statement No. 144, “Accounting
for the Impairment or Disposal of Long-Lived Assets,” we review long-lived
assets for impairment whenever events or changes in circumstances indicate
the
carrying amount of such assets may not be recoverable. Impairment losses are
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets’ carrying amounts. The impairment loss is
measured by comparing the fair value of the asset to its carrying amount. No
impairments were recorded in the financial statements included elsewhere in
this
prospectus.
Goodwill
and Other Indefinite Lived Intangible Assets.
In
accordance with the methodology described in SFAS No. 142,
Goodwill
and Other Intangible Assets
,
we
review our goodwill and other indefinite lived intangible assets for impairment
whenever events or changes in circumstances indicate the carrying amount of
such
assets may not be recoverable. Impairment losses are recorded when indicators
of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets’ carrying amounts. The impairment loss
is measured by comparing the fair value of the asset to its carrying amount.
In
addition, we annually review our goodwill and other indefinite lived intangible
assets for impairment. No impairments were recorded in the financial statements
included elsewhere in this prospectus.
Deferred
Taxes and Effective Tax Rates.
We
estimate the effective tax rates and associated liabilities or assets for each
of our legal entities in accordance with FAS 109. We use tax-planning to
minimize or defer tax liabilities to future periods. In recording effective
tax
rates and related liabilities and assets, we rely upon estimates, which are
based upon our interpretation of United States and local tax laws as they apply
to our legal entities and our overall tax structure. Audits by local tax
jurisdictions, including the U.S. government, could yield different
interpretations from our own and cause us to owe more taxes than originally
recorded. For interim periods, we accrue our tax provision at the effective
tax
rate that we expect for the full year. As the actual results from our various
businesses vary from our estimates earlier in the year, we adjust the succeeding
interim periods’ effective tax rates to reflect our best estimate for the
year-to-date results and for the full year. As part of the effective tax rate,
if we determine that a deferred tax asset arising from temporary differences
is
not likely to be utilized, we will establish a valuation allowance against
that
asset to record it at its expected realizable value.
Pension.
Pension
benefit costs include assumptions for the discount rate, retirement age, and
expected return on plan assets. Retiree medical plan costs include assumptions
for the discount rate, retirement age, and health-care-cost trend rates. These
assumptions have a significant effect on the amounts reported. Periodically,
we
evaluate the discount rate and the expected return on plan assets in our defined
benefit pension and retiree health benefit plans. In evaluating these
assumptions, we consider many factors, including an evaluation of the discount
rates, expected return on plan assets and the health-care-cost trend rates
of
other companies; our historical assumptions compared with actual results; an
analysis of current market conditions and asset allocations; and the views
of
advisers. In evaluating our expected retirement age assumption, we consider
the
retirement ages of our past employees eligible for pension and medical benefits
together with our expectations of future retirement ages. We believe our pension
and retiree medical plan assumptions are appropriate based upon the above
factors. A one percent increase or decrease in our health-care-cost trend rates
would not have a material impact on our results of operations. Also, a one
quarter percentage point change in our discount rate or expected return on
plan
assets would not have a material impact on our results of operations.
Based
on
a critical assessment of our accounting policies and the underlying judgments
and uncertainties affecting the application of those policies, we believe that
our consolidated financial statements provide a meaningful and fair perspective
of Holdings and its consolidated subsidiaries. This is not to suggest that
other
risk factors such as changes in economic conditions, changes in material costs
and others could not adversely impact our consolidated financial position,
results of operations and cash flows in future periods.
Recent
Acquisitions
On
November 20, 2003, we acquired Landis for aggregate consideration of
approximately $229.7 million, pursuant to which our wholly-owned subsidiary,
Berry Plastics Acquisition Corporation IV, merged with and into Landis, and
Landis became our wholly-owned subsidiary. The Landis Acquisition was funded
through (i) the issuance of $85.0 million aggregate principal amount of the
old notes, which resulted in gross proceeds of $95.2 million,
(ii) aggregate net term loan borrowings of $54.1 million under our old
senior secured credit facilities, after giving effect to the refinancing of
our
prior term loan, (iii) an aggregate common equity contribution of $62.0
million, consisting of contributions of $35.4 million by GS Capital Partners
2000, L.P. and its affiliates, $16.1 million by J.P. Morgan Partners Global
Investors, L.P. and its affiliates, and an aggregate of $10.5 million from
existing Landis shareholders and
(iv) cash
on hand. We also agreed to acquire, for $32.0 million, four facilities that
Landis leased from certain of its affiliates. Prior to the closing of the Landis
Acquisition, we assigned our rights and obligations to purchase the four
facilities owned by affiliates of Landis to an affiliate of W.P.
Carey & Co., L.L.C. and then leased those four facilities from them.
On
April 11, 2005, one of our subsidiaries, Berry Plastics de México, S. de
R.L. de C.V., acquired all of the injection molding aerosol overcap and closure
assets from Euromex Plastics, S.A. de C.V. (“Euromex”), an injection molding
manufacturer located in Toluca, Mexico (the “Mexico Acquisition”), for aggregate
consideration of approximately $8.2 million. The purchase was financed through
borrowings under our revolving line of credit under our old senior secured
credit facilities and cash on hand. The operations from the Mexico Acquisition
have been included in our operations since the acquisition date.
On
June 3, 2005, we acquired Kerr, a manufacturer and marketer of closures,
bottles, vials, and tubes, for aggregate consideration of approximately $454.8
million, including direct costs associated with the acquisition. The operations
from the Kerr Acquisition have been included in our operations since the
acquisition date. The purchase price was financed through additional term loan
borrowings under an amendment to our old senior secured credit facilities and
cash on hand.
13
Weeks Ended July 1, 2006 (the “Quarter”) co
mpared
to the 13 Weeks Ended July 2, 2005 (the “Prior Quarter”)
Net
Sales
.
Net
sales increased 33% to $375.1 million for the Quarter from $282.9 million for
the Prior Quarter. This $92.2 million increase included approximately $14.6
million or 5% due to the pass through of higher resin costs to our customers,
increased base business volume of approximately $2.3 million or 1%, and
acquisition volume of $75.3 million primarily attributable to the Kerr
Acquisition or 27%. Our resin pounds sold, excluding acquired businesses,
increased by 1% in the Quarter over the Prior Quarter. The following discussion
in this section provides a comparison of net sales by business segment. Open
top
net sales increased $18.3 million from the Prior Quarter to $222.8 million
for
the Quarter. The increase in open top net sales was primarily a result of
increased selling prices and base business volume growth in several of the
division’s product lines with significant volume growth in the thermoformed PP
drink cup line of 26%. Closed top net sales increased $73.9 million from the
Prior Quarter to $152.3 million for the Quarter. The increase in closed top
net
sales can be primarily attributed to net sales in the Quarter from the Kerr
Acquisition of $75.3 million and increased selling prices on base business
partially offset by softness in the overcaps and base closure businesses.
Gross
Profit
.
Gross
profit increased by $26.4 million to $75.8 million (20% of net sales) for the
Quarter from $49.4 million (17% of net sales) for the Prior Quarter. This 53%
dollar increase
includes
the combined impact of the additional sales volume noted above, productivity
improvement
initiatives, our financial and mechanical resin hedging programs, and the timing
effect of the 5% increase in net selling prices due to higher resin costs passed
through to our customers. The increase in gross profit percentage from 17%
in
the Prior Quarter to 20% in the Quarter can be primarily attributed to the
5%
increase in net selling prices due to higher resin costs passed through to
our
customers and improvements in the margins of acquired businesses, partially
offset by increased raw material costs. In addition, in the Prior Quarter,
an
expense of $0.7 million was charged to cost of goods sold related to the
write-up and subsequent sale of Kerr’s finished goods inventory to fair market
value in accordance with purchase accounting. Significant productivity
improvements were made since the Prior Quarter, including the installation
of
state-of-the-art equipment at several of our facilities. These
productivity
improvements were more than offset by increased costs from inflation such as
higher energy prices.
Operating
Expenses
.
Selling
expenses increased by $2.1 million to $9.7 million for the Quarter from $7.6
million for the Prior Quarter principally as a result of increased selling
expenses associated with higher sales, including the Kerr Acquisition, partially
offset by cost reduction efforts. General and administrative expenses increased
by $7.5 million from $9.5 million for the Prior Quarter to $17.0 million for
the
Quarter primarily as a result of general and administrative expenses from the
Kerr Acquisition, increased accrued employee bonus expense, and $1.0 million
of
stock option expense recorded in the Quarter. Research and development expenses
increased by $0.5 million over the Prior Quarter primarily due to the Kerr
Acquisition and increased development efforts. Amortization of intangibles
increased $3.3 million from the Prior Quarter to $5.3 million in the Quarter
primarily due to the amortization of intangible assets from the Kerr
Acquisition. Transition expenses related to integrating acquired businesses
were
$2.7 million and $0.4 million in the Quarter and Prior Quarter, respectively.
This increase of $2.3 million is primarily due to costs associated with the
Kerr
Acquisition in the Quarter.
Interest
Expense, Net
.
Net
interest expense decreased $0.9 million to $22.5 million for the Quarter
compared to $23.4 million for the Prior Quarter primarily due to a write off
of
unamortized deferred financing fees of $7.0 million as a result of an amendment
to our old senior secured credit facilities in the Prior Quarter partially
offset by interest expense on additional indebtedness utilized to finance the
Kerr Acquisition.
Income
Taxes.
For
the
Quarter, we recorded income tax expense of $7.4 million or an effective tax
rate
of 43%. The effective tax rate is greater than the statutory rate due to the
impact of state taxes and foreign location losses for which no benefit was
currently provided. The increase of $5.0 million from $2.4 million in the Prior
Quarter, or an effective tax rate of 57%, was primarily attributed to the
increase in income before income taxes.
Net
Income
.
Net
income was $9.7 million for the Quarter compared to $1.8 million for the Prior
Quarter for the reasons discussed above.
26
Weeks Ended July 1, 2006 (“YTD”) Compared to 26 Weeks Ended July 2,
2005 (“Prior YTD”)
Net
Sales
.
Net
sales increased $222.9 million, or 43%, to $731.1 million for the YTD from
$508.2 million for the Prior YTD with an approximate 7% increase in net selling
price due to higher resin costs passed through to our customers. Our base
business volume, excluding selling price changes and acquired business,
increased by approximately $3.6 million or 1% in the YTD over the Prior YTD.
Including acquired business, on a pro forma basis, but excluding selling price
changes, our total sales volume increased by approximately 3% in the YTD over
the Prior YTD. Our resin pounds sold, excluding acquired businesses, increased
by 1% in the YTD over the Prior YTD. The following discussion in this section
provides a comparison by business segment. Open top net sales increased $40.7
million from the Prior YTD to $429.1 million for the YTD. The increase in open
top net sales was primarily a result of increased selling prices and base
business volume growth in several of the division’s product lines
with significant volume growth in the thermoformed PP drink cup line of
24%. Closed top net sales increased $182.2 million from the Prior YTD to $302.0
million for the YTD. The increase in closed top net sales can be primarily
attributed to net sales in the YTD from the Kerr Acquisition and Mexico
Acquisition of $181.9 million and $1.8 million, respectively, and
increased
selling prices partially offset by softness in the overcaps and base closure
businesses.
G
ross
Profit
.
Gross
profit increased by $56.4 million to $147.1 million (20% of net sales) for
the
YTD from $90.7 million (18% of net sales) for the Prior YTD. This 62% dollar
increase was primarily attributed to the increased sales volume noted above.
The
increase in gross profit percentage from 18% in the Prior YTD to 20% in the
YTD
can be primarily attributed to the 7% increase in net selling prices due to
higher resin costs passed through to our customers as well as improvements
in
the margins of acquired businesses, partially offset by increased raw material
costs. In addition, in the Prior YTD, an expense of $0.7 million was charged
to
cost of goods sold related to the write-up and subsequent sale of Kerr’s
finished goods inventory to fair market value in accordance with purchase
accounting. Significant productivity improvements were made since the Prior
YTD,
including the addition of state-of-the-art injection molding, thermoforming
and
post molding equipment at several of our facilities.
Operating
Expenses
.
Selling
expenses increased by $5.2 million to $20.1 million for the YTD from $14.9
million for the Prior YTD principally as a result of increased selling expenses
associated with higher sales partially offset by cost reduction efforts. General
and administrative expenses increased $13.4 million from $18.4 million for
the
Prior YTD to $31.8 million for the YTD primarily as a result of general and
administrative expenses from the Kerr Acquisition, increased accrued employee
bonus expense, and $2.0 million of stock option expense recorded YTD. Research
and development expenses increased by $1.4 million over the Prior YTD primarily
due to the Kerr Acquisition and increased development efforts. An increase
of
amortization of intangibles of $6.9 million for the YTD from the Prior YTD
is
primarily due to the amortization of intangible assets from the Kerr
Acquisition. Transition expenses related to integrating acquired businesses
were
$3.8 million and $0.7 million in the YTD and Prior YTD, respectively. This
increase of $3.1 million is primarily due to costs associated with the Kerr
Acquisition.
Interest
Expense, Net
.
Net
interest expense increased $7.3 million to $44.5 million for the YTD compared
to
$37.2 million for the Prior YTD primarily due to increased rates of interest
on
borrowings and increased borrowings to finance the Kerr Acquisition partially
offset by a write off of unamortized deferred financing fees of $7.0 million
as
a result of an amendment to our old senior secured credit facilities in the
Prior YTD.
Income
Taxes.
For
the
YTD, we recorded income tax expense of $14.7 million or an effective tax rate
of
45%. The effective tax rate was greater than the statutory rate due to the
impact of state taxes and foreign location losses for which no benefit was
currently provided. The increase of $8.5 million from $6.2 million in the Prior
YTD, or an effective tax rate of 53%, was attributed to the increase in income
before income taxes.
Net
Income
.
Net
income was $17.9 million for the YTD compared to $5.6 million for the Prior
YTD
for the reasons discussed above.
Year
Ended December 31, 2005 Compared to Year Ended January 1, 2005
Net
Sales.
Net
sales
increased 44% to $1,169.7 million in 2005 from $814.2 million in 2004. This
$355.5 million increase included approximately $89.5 million or 11% due to
the
pass through of higher resin costs to our customers, increased base business
volume of approximately $32.7 million or 4%, and acquisition volume of $233.3
million or 29%. In 2005, we reorganized our operations into two reportable
segments: open top and closed top. The realignment occurred in an effort to
integrate the operations of acquired businesses, better service our customers,
and provide a more efficient organization. Prior periods have been
restated
to be aligned with the new reporting structure in order to provide comparable
results. Open top net sales increased $116.4 million in 2005 primarily due
to
the higher selling prices noted above and strong base business volume growth.
The open top division recorded base business volume growth in several product
categories with the thermoformed drink cup product line volume increasing over
40% in 2005. Closed top net sales increased $239.0 million with the Kerr
Acquisition and Mexico Acquisition providing closed top net sales of
approximately $229.1 million and $4.2 million, respectively in 2005. The
increase in closed top net sales was primarily a result of the Kerr Acquisition
and Mexico Acquisition and increased selling prices on base business.
Gross
Profit.
Gross
profit increased $51.4 million from $174.9 million (21% of net sales) in 2004
to
$226.3 million (19% of net sales) in 2005. This increase of 29% includes the
combined impact of the additional sales volume, productivity improvement
initiatives, our financial and mechanical resin hedging programs, and the timing
effect of the 11% increase in net selling prices due to higher resin costs
passed through to our customers. This was partially offset by increased raw
material costs and increased manufacturing costs primarily due to cost
inflation. The decline in gross profit percentage from 21% in 2004 to 19% in
2005 can be attributed in part to the mathematical effect of the 11% increase
in
net selling prices due to higher resin costs passed through to our customers.
Also, the historical margin percentage of the business acquired in the Kerr
Acquisition was significantly less than our historical gross margin percentage,
which reduced our consolidated margin percentage. In addition, an expense of
$0.7 million was charged to cost of goods sold in 2005 related to the write-up
and subsequent sale of Kerr’s finished good inventory to fair market value in
accordance with purchase accounting. We have continued to consolidate products
and business of recent acquisitions to the most efficient tooling and plant
location, providing customers with improved products and customer service.
Operating
Expenses.
Selling
expenses increased by $7.7 million to $34.1 million for 2005 from $26.4 million
for 2004 principally as a result of increased selling expenses associated with
higher sales partially offset by cost reduction efforts. General and
administrative expenses increased from $38.5 million to $49.5 million in 2005.
This increase of $11.0 million can be primarily attributed to general and
administrative expenses from the Kerr Acquisition and increased accrued bonus
expenses. Research and development costs increased $2.3 million to $6.1 million
in 2005 primarily as a result of the Kerr Acquisition and increased development
efforts. Intangible asset amortization increased from $6.5 million in 2004
to
$15.6 million for 2005, primarily as a result of additional intangible assets
resulting from the Kerr Acquisition. Other expenses were $5.2 million for 2005
compared to $5.8 million for 2004. Other expenses in 2005 primarily relate
to
transition expenses as a result of the Kerr Acquisition and Mexico Acquisition.
Other expenses in 2004 include transition expenses of $4.0 million related
to
the Landis Acquisition and $1.8 million related to the shutdown and
reorganization of facilities.
Interest
Expense, Net.
Net
interest expense, including amortization of deferred financing costs and debt
premium, for 2005 was $80.3 million (7% of net sales) compared to $53.2 million
(7% of net sales) in 2004, an increase of $27.1 million. This increase is
primarily attributed to a write off of unamortized deferred financing fees
of
$7.0 million as a result of an amendment to our old senior secured credit
facilities, additional indebtedness utilized to finance the Kerr Acquisition,
and increased rates of interest on borrowings.
Income
Taxes.
In
2005,
we recorded income tax expense of $14.3 million, or an effective tax rate of
42%, compared to $17.7 million, or an effective tax rate of 44%, in 2004. The
decrease of $3.4 million can be attributed to a decrease in net income before
income taxes for the reasons stated above. The effective tax rate is greater
than the statutory rate due to the impact of state taxes and foreign location
losses.
Net
Income.
We
recorded net income of $19.8 million in 2005 compared to $23.0 million in 2004
for the reasons stated above.
Year
Ended January 1, 2005 Compared to Year Ended December 27, 2003
Net
Sales.
Net
sales
increased 48% to $814.2 million in 2004 from $551.9 million in 2003. This $262.3
million increase included approximately $23.5 million or 4% due to the pass
through of higher resin costs to our customers, increased base business volume
of approximately $29.5 million or 6%, and acquisition volume of $209.3 million
or 38%. In 2005, we reorganized our operations into two reportable segments:
open top and closed top. The realignment occurred in an effort to integrate
the
operations of acquired businesses, better service our customers, and provide
a
more efficient organization. Prior periods have been restated to be aligned
with
the new reporting structure in order to provide comparable results. Open top
net
sales increased $254.6 million in 2004 primarily due to the higher selling
prices noted above, acquisition volume, and strong base business volume growth.
The Landis Acquisition provided open top net sales of approximately $227.9
million in 2004 versus $20.1 million in 2003. Due to the movement of business
between the acquired Landis facilities and our pre-existing facilities, the
amount of sales related to the Landis Acquisition is estimated. The open top
division recorded base business volume growth in several product categories
with
the thermoformed drink cup product line volume increasing over 93% in 2004.
Closed top net sales increased $7.7 million primarily due to the higher selling
prices noted above and increased volume in the U.S. closure product line.
Gross
Profit.
Gross
profit increased $43.8 million from $131.1 million (24% of net sales) in 2003
to
$174.9 million (21% of net sales) in 2004. This increase of 33% includes the
combined impact of the additional sales volume, productivity improvement
initiatives, and the timing effect of the 4% increase in net selling prices
due
to higher resin costs passed through to our customers partially offset by
increased raw material costs. The historical margin percentage of the business
acquired in the Landis Acquisition was significantly less than our historical
gross margin percentage, which reduced our consolidated margin percentage.
We
have continued to consolidate products and business of recent acquisitions
to
the most efficient tooling, providing customers with improved products and
customer service. As part of the Landis integration, in the fourth quarter
of
2003, we closed our Monticello, Indiana facility, which was acquired in the
Landis Acquisition. The business from this location was distributed throughout
our facilities. In addition, we completed the integration of the Landis
facilities in 2004 to our integrated computer software system. Also, significant
productivity improvements were made on the base business in 2004, including
the
addition of state-of-the-art injection molding, thermoforming and post molding
equipment at several of our facilities.
Operating
Expenses.
Selling
expenses increased by $2.5 million to $26.4 million for 2004 from $23.9 million
principally as a result of increased selling expenses associated with higher
sales partially offset by cost reduction efforts. General and administrative
expenses increased from $25.7 million to $38.5 million in 2004. This increase
of
$12.8 million can be primarily attributed to the Landis Acquisition and
increased accrued bonus expenses. Research and development costs increased
$0.3
million to $3.8 million in 2004 primarily as a result of the Landis Acquisition.
Intangible asset amortization increased from $3.3 million in 2003 to $6.5
million for 2004, primarily as a result of additional intangible assets
resulting from the Landis Acquisition. Other expenses were $5.8 million for
2004
compared to $3.6 million for 2003. Other expenses in 2004 include transition
expenses of $4.0 million related to the Landis Acquisition and $1.8 million
related to the shutdown and reorganization of facilities. Other expenses in
2003
include transition expenses of $1.5 million related to recently
acquired
businesses
and reorganization of facilities, $1.1 million related to the shutdown of
facilities, and $1.0 million related to an acquisition that was not completed.
Interest
Expense, Net.
Net
interest expense, including amortization of deferred financing costs and debt
premium, for 2004 was $53.2 million (7% of net sales) compared to $45.7 million
(8% of net sales) in 2003, an increase of $7.5 million. This increase is
primarily attributed to additional indebtedness utilized to finance the Landis
Acquisition partially offset by decreased rates of interest on borrowings and
debt principal reductions.
Income
Taxes.
In
2004,
we recorded income tax expense of $17.7 million for income taxes, or an
effective tax rate of 44%, compared to $12.5 million, or an effective tax rate
of 49%, for fiscal 2003. The effective tax rate is greater than the statutory
rate due to the impact of state taxes and foreign location losses for which
no
benefit was currently provided. The increase of $5.2 million over 2003 can
be
primarily attributed to improved operating performance.
Net
Income.
We
recorded net income of $23.0 million in 2004 compared to $13.0 million in 2003
for the reasons stated above.
Income
Tax Matters
As
of
December 31, 2005, we had unused operating loss carryforwards of $65.9
million for federal income tax purposes which begin to expire in 2012.
Alternative minimum tax credit carryforwards of approximately $6.4 million
are
available to us indefinitely to reduce future years’ federal income taxes. As a
result of the Acquisition and Kerr Acquisition, the unused operating loss
carryforward is subject to an annual limitation. We are in the process of
finalizing the computation to determine the limitation due to the Acquisition
and the Kerr Acquisition and have preliminarily estimated the aggregate limit
as
a result of the Acquisition and Kerr Acquisition to be approximately $29.6
million per year. As part of the effective tax rate calculation, if we determine
that a deferred tax asset arising from temporary differences is not likely
to be
utilized, we will establish a valuation allowance against that asset to record
it at its expected realizable value. Our valuation allowance against deferred
tax assets was $6.7 million and $6.2 million as of December 31, 2005 and
January 1, 2005, respectively.
Liquidity
and Capital Resources
We
are a
highly leveraged company, having incurred substantial debt as part of the
Acquisition, including the outstanding notes which we are hereby offering to
exchange for the exchange notes, which will result in a significant increase
in
our interest expense in future periods. Payments required to service this
indebtedness will substantially increase our liquidity requirements as compared
to prior years. Our primary sources of liquidity are cash flow from operations
and funds available under our senior secured credit facilities. We expect that
ongoing requirements for debt service and capital expenditures will be funded
from these sources of funds.
The
Acquisition was funded with
shareholders’ equity and the following debt components:
·
|
Proceeds
from our issuance of $750.0 million aggregate principal amount of
outstanding notes;
|
·
|
New
borrowings of $675.0 million in Term B loans and $20.0 million under
the revolving credit facility, both as available under the senior
secured
credit facilities; and
|
·
|
Proceeds
from our issuance of $425.0 million aggregate principal amount of
senior
subordinated notes to Goldman.
|
As
of
September 20, 2006, we had $1,895.4 million of total indebtedness
outstanding as follows (in $ millions):
|
|
Total Debt at
September
20, 2006
|
|
Short-Term Debt
and
Current
Maturities
of
Long-Term Debt
|
|
Long-Term
Portion
|
|
Senior
secured credit facilities:
|
|
|
|
|
|
|
|
Term
B Loans
|
|
$
|
675.0
|
|
$
|
5.1
|
|
$
|
669.9
|
|
Revolving
Credit Facility
|
|
|
20.0
|
|
|
—
|
|
|
20.0
|
|
Senior
Subordinated notes
|
|
|
425.0
|
|
|
—
|
|
|
425.0
|
|
Outstanding
Notes
|
|
|
750.0
|
|
|
—
|
|
|
750.0
|
|
Capital
Leases
|
|
|
25.4
|
|
|
6.3
|
|
|
19.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,895.4
|
|
$
|
11.4
|
|
$
|
1,884.0
|
|
We
have a
further $165.1 million available under the revolving credit facility, which
is
part of our senior secured credit facilities. Any borrowings under the revolving
credit facility would be available to fund our working capital requirements,
capital expenditures and for other general corporate purposes. The term B loans
under the senior secured facilities require scheduled quarterly payments
beginning in December 2006, each equal to 0.25% of the original principal amount
of the loans for the first 6 years and 3 quarters. The remaining balance of
the
term B loans is due and payable in full in September 2013. The revolving credit
facility is available until September 2012. The outstanding notes will, and
if
exchanged the exchange notes will, mature on September 15, 2014 and the
senior subordinated notes will mature on September 15, 2016. Our senior
secured credit facilities, the outstanding notes and the senior subordinated
notes are guaranteed by substantially all of our existing, and certain of our
future, domestic subsidiaries.
Our
senior secured credit facilities contain various restrictive covenants. They
prohibit us from prepaying indebtedness that is junior to such debt (subject
to
certain exceptions) and require us to maintain our secured leverage ratio below
a maximum ratio. In addition, our senior secured credit facilities, among
other things, limit our ability to incur indebtedness or liens, make investments
or declare or pay dividends. The Indentures governing the notes and the senior
subordinated notes, among other things: (i) limit our ability and the
ability of our subsidiaries to incur additional indebtedness, incur liens,
pay
dividends or make certain other restricted payments and enter into certain
transactions with affiliates; and (ii) place restrictions on our ability
and the ability of our subsidiaries to merge or consolidate with any other
person or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of our assets. However, all of these covenants are subject
to
significant exceptions. For more information, see “Description of Other
Indebtedness” and “Description of the Notes.”
Our
ability to make scheduled payments of principal, to pay interest on, or to
refinance our indebtedness, including the outstanding notes or, if exchanged,
the exchange notes, or to fund planned capital expenditures will depend on
our
ability to generate cash in the future. This
ability,
to a certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond our control.
Based
on
our current level of operations, we believe that cash flow from operations
and
available cash, together with available borrowings under our senior secured
credit facilities, will be adequate to meet our short-term liquidity needs.
We
cannot
assure you, however, that our business will generate sufficient cash flow from
operations or that future borrowings will be available to us under our senior
secured credit facilities in an amount sufficient to enable us to pay our
indebtedness, including the outstanding notes or, if exchanged, the exchange
notes, or to fund our other liquidity needs. If we consummate an acquisition,
our debt service requirements could increase. We may need to refinance all
or a
portion of our indebtedness, including the outstanding notes or, if exchanged,
the exchange notes, on or before maturity. In addition, upon the occurrence
of
certain events, such as a change of control, we could be required to repay
or
refinance our indebtedness. We cannot assure you that we will be able to
refinance any of our indebtedness, including our senior secured credit
facilities and the outstanding notes or, if exchanged, the exchange notes,
on
commercially reasonable terms or at all. See “Risk Factors—Risk Factors Related
to an Investment in the Notes—We may not be able to generate sufficient cash to
service all of our indebtedness, including the notes, and may be forced to
take
other actions to satisfy our obligations under our indebtedness that may not
be
successful.”
Contractual
Obligations and Off Balance Sheet Transactions
As
of
December 31, 2005, after givi
ng
pro
forma effect to the Acquisition, our contractual obligations would have included
the following:
|
|
Payments
Due by Period at December 31, 2005
|
|
Pro
Forma Contractual Obligations
|
|
Total
|
|
<
1 year
|
|
1-3
years
|
|
4-5
years
|
|
>
5 years
|
|
|
|
(dollars
in thousands)
|
|
Term
B loans
|
|
$
|
675,000
|
|
$
|
6,750
|
|
$
|
13,500
|
|
$
|
13,500
|
|
$
|
641,250
|
|
Revolving
Credit Facility
|
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
Outstanding
notes
|
|
|
750,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
750,000
|
|
Senior
subordinated notes
|
|
|
425,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
425,000
|
|
Other
long-term debt—capital leases
|
|
|
31,048
|
|
|
6,925
|
|
|
9,743
|
|
|
6,351
|
|
|
8,029
|
|
Interest
on long-term debt obligations
(1)
|
|
|
1,335,063
|
|
|
161,313
|
|
|
322,625
|
|
|
322,625
|
|
|
528,500
|
|
Operating
lease obligations
|
|
|
187,804
|
|
|
25,015
|
|
|
40,797
|
|
|
33,157
|
|
|
88,835
|
|
Purchase
obligations
(2)
|
|
|
61,504
|
|
|
61,504
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Totals
|
|
$
|
3,485,419
|
|
$
|
261,507
|
|
$
|
386,665
|
|
$
|
375,633
|
|
$
|
2,461,614
|
|
(1)
|
Based
on long-term debt obligations outstanding as of July 1, 2006 after
giving pro forma effect to the Acquisition.
|
(2)
|
Represents
open purchase commitments for purchases of resin and capital expenditures
in the normal course of operations.
|
Cash
Flow
Net
cash
provided by operating activities was $87.1 million for the YTD compared to
$51.4
million for the Prior YTD. The increase of $35.7 million is primarily the result
of improved operations as operating income before depreciation and amortization
increased $46.2 million over the Prior YTD. Net cash provided by operating
activities was $101.5 million in 2005 as compared to $75.2 million in 2004.
This
increase of $26.3 million can be primarily attributed to improved operating
performance partially offset by increased working capital needs due to revenue
growth and increased resin costs. Net cash provided by operating activities
was
$75.2 million in 2004 as compared to $79.8 million in 2003. This decrease of
$4.6 million can be primarily attributed to increased working capital needs
due
to revenue growth, increased resin costs, and increased quantities of resin
as a
result of strategic prepurchases of resins partially offset by improved
operating performance.
Net
cash
used for investing activities decreased from $498.7 million for the Prior YTD
to
$52.2 million for the YTD primarily as a result of the Kerr Acquisition in
the
Prior YTD. Capital spending of $52.2 million in the YTD included $6.1 million
for buildings and systems, $14.2 million for molds, $22.4 million for molding
and decorating machines, and $9.5 million for accessory equipment and systems.
Net cash used for investing activities increased from $45.5 million in 2004
to
$520.0 million in 2005 primarily as a result of the Kerr Acquisition and Mexico
Acquisition in 2005. Our capital expenditure budget for 2006 is expected to
be
approximately $90.0 million, which includes a significant amount of expenditures
for capacity additions and other growth opportunities across our business,
as
well as expenditures related to cost-saving opportunities and our estimated
annual level of maintenance capital expenditures of approximately $22.0
million.
Net
cash
used for investing activities decreased from $265.7 million in 2003 to $45.5
million in 2004 primarily as a result of the Landis Acquisition in 2003 and
the
receipt of $7.4 million in 2004 related to the working capital adjustment from
the Landis Acquisition. In addition, Berry Plastics U.K. Limited, one of our
foreign subsidiaries, sold the manufacturing equipment, inventory, and accounts
receivable of its U.K. milk cap business to Portola Packaging U.K. Limited.
The
transaction valued at approximately $4.0 million closed in April 2004. The
U.K.
milk cap business represented less than $3.0 million of our annual consolidated
net sales. Capital expenditures in 2005 were $57.8 million, an increase of
$5.2
million from $52.6 million in 2004. Capital expenditures in 2005 included
investments of $9.0 million for facility additions and renovations, production
systems and offices necessary to support production operating levels throughout
the company, $19.7 million for molds, $10.4 million for molding and decorating
equipment, and $18.7 million for accessory equipment and systems.
Net
cash
used for financing activities was $24.6 million for the YTD compared to $452.7
million provided by financing activities in the Prior YTD. This change of $477.3
million can be primarily attributed to the financing obtained in connection
with
the Kerr Acquisition in the Prior YTD. In addition, in June 2006, we made a
voluntary prepayment of $20.0 million on our old senior term loan facility.
Net
cash provided by financing activities was $443.2 million in 2005 as compared
to
cash used for financing activities of $55.7 million in 2004. The change can
be
primarily attributed to the financing of the Kerr Acquisition and Mexico
Acquisition in 2005. Net cash used for financing activities was $55.7 million
in
2004 as compared to cash provided by financing activities of $196.8 million
in
2003. The change can be primarily attributed to the Landis Acquisition financing
in 2003 and the voluntary prepayment of $45.0 million on our old senior term
loans in 2004.
Increased
working capital needs occur whenever we experience strong incremental demand
or
a significant rise in the cost of raw material, particularly plastic resin.
However, we
anticipate
that our cash interest, working capital and capital expenditure requirements
for
2006 will be satisfied through a combination of funds generated from operating
activities and cash on hand, together with borrowings under our senior secured
credit facilities. We base such belief on historical experience and the
substantial funds available under our senior secured credit facilities. However,
we cannot predict our future results of operations and our ability to meet
our
obligations involves numerous risks and uncertainties, including, but not
limited to, those described in the “Risk Factors” section. In particular,
increases in the price of resin which we are unable to pass through to our
customers or significant acquisitions could severely impact our liquidity.
Interest
Rate Sensitivity
We
are
exposed to market risk from changes in interest rates primarily through our
senior secured credit facilities. Our senior secured credit facilities comprise
of (i) a $675.0 million term loan and (ii) a $200.0 million revolving
credit facility. Borrowings under our senior secured credit facilities bear
interest, at our option, at either an alternate base rate or an adjusted
LIBOR rate for a one-, two-, three- or six month interest period, or a nine-
or
twelve-month period, if available to all relevant lenders, in each case, plus
an
applicable margin. The alternate base rate is the mean the greater of
(i) Credit Suisse’s prime rate and (ii) one-half of 1.0% over the
weighted average of rates on overnight Federal Funds as published by the Federal
Reserve Bank of New York. The adjusted LIBOR rate is determined by reference
to
settlement rates established for deposits in dollars in the London interbank
market for a period equal to the interest period of the applicable loan and
the
maximum reserve percentages established by the Board of Governors of the U.S.
Federal Reserve to which our lenders are subject.
Resin
Cost Sensitivity
We
are
exposed to market risk from changes in plastic resin prices that could impact
our results of operations and financial condition. We purchased approximately
$385.0 million of resin in fiscal 2005 with approximately 23% of our resin
pounds, on a pro forma basis, being HDPE, 11% LDPE, 62% PP, 3% PET and 1% other.
We have contractual price escalators and de-escalators tied to the price of
resin with customers representing more than 60% of net sales that result in
price increases/decreases to these customers in a relatively short period of
time, typically quarterly. In addition, we have historically had success in
passing through price increases and decreases in the price of resin to customers
without indexed price agreements. Less than 10% of our net sales are generated
from arrangements that exhibit fixed-price characteristics, and we have at
times
and may continue to enter into negotiated purchase agreements with resin
suppliers to lock-in a level of profitability on these arrangements. We also
opportunistically pursue resin forward hedging transactions in order to manage
our resin spend and further align our costs with our prices to our customers.
We
can further seek to mitigate the effect of resin price movements through our
ability to accommodate raw material switching for certain products between
HDPE
and PP as prices fluctuate and reducing the quantity of resin in certain of
our
products. We believe that using the methods described above we have a proven
strategy for managing changes in resin prices as evidenced by our consistent
profitability and earnings growth throughout recent periods of historically
high
resin volatility. We plan to pursue opportunities to purchase resin jointly
with
other Apollo portfolio companies which we anticipate should generate further
benefits in terms of our ability to further manage our material.
Our
plastic resin purchasing strategy is to deal with only high-quality, dependable
suppliers, such as Basell, Chevron, Dow, ExxonMobil, Huntsman, Lyondell, Nova,
Sunoco and Total. We believe that we have maintained strong relationships with
these key suppliers and expect that such relationships will continue into the
foreseeable future. The resin market is a global market and, based on our
experience, we believe that adequate quantities of plastic resins will be
available at market prices, but we can give you no assurances as to such
availability or the prices thereof.
Our
Company
We
believe we are one of the world’s leading manufacturers and suppliers of
value-added plastic packaging products. We manufacture a broad range of
innovative, high quality packaging solutions using our collection of over 1,500
proprietary molds and an extensive set of internally developed processes and
technologies. Our principal products include open top containers, drink cups,
bottles, closures and overcaps, tubes and prescription vials which we sell
into
a diverse selection of attractive and stable end markets, including food and
beverage, healthcare, personal care, quick service and family dining
restaurants, custom and retail. We sell our packaging solutions to over 12,000
customers comprised of a favorable balance of leading national blue-chip
customers as well as a collection of smaller local specialty businesses. We
believe that our proprietary tools and technologies, low-cost manufacturing
capabilities and significant operating and purchasing scale provide us with
a
competitive advantage in the marketplace. Our unique combination of leading
market positions, proven management team, product and customer diversity and
manufacturing and design innovation provides access to a variety of growth
opportunities and has allowed us to achieve consistent organic volume growth
in
excess of market growth rates.
We
operate in the plastic packaging segment of the $109 billion U.S. packaging
sector, which accounted for $39 billion, or 36%, of total U.S. packaging
industry sales in 2003. Demand for plastic packaging products is driven by
the
consumption of consumer products including food, beverages, pharmaceuticals
and
personal care products. The U.S. plastic packaging industry is expected to
grow
5.2% per year to $65 billion in sales, or 43% of the total U.S. packaging
market, by 2013. According to Freedonia, while the packaging industry as a
whole
is expected to grow at 3.4% per year, plastic packaging has and is expected
to continue to outpace the growth of other packaging types as a result of
conversions from paper, metal and glass to plastic due to cost and performance
advantages. These advantages include plastic’s inherent weight benefits, shatter
resistance, barrier properties, printability, strength, resistance to rust
and
ease of dispensing. In addition, further growth in plastic packaging has been
enhanced by technological advances that continue to reduce product costs,
enhance plastic performance and improve graphics characteristics.
Our
Strengths
We
believe that our consistent financial performance is the direct result of the
following competitive strengths:
Leading
positions across a broad product offering.
Through
quality manufacturing, innovative product design, a focus on customer service
and a skilled and dedicated workforce, we have achieved leading competitive
positions in the majority of our major product lines including thinwall,
pry-off, dairy and clear PP containers; drink cups; spice and pharmaceutical
bottles and prescription vials; and spirits, continuous thread and
pharmaceutical closures. We believe that our leading market positions enable
us
to attract blue chip customers, cross-sell products, launch new products and
maintain high margins relative to our competitors.
Large,
diverse and stable customer base.
We
sell
our products to over 12,000 customers in a diverse base of industries, including
pharmaceuticals, food, dairy and health and beauty. Our top 10 customers
accounted for less than 30% of net sales and our largest
customer
accounted for less than 7%
of
net
sales for
fiscal
2005.
Our
co-design capabilities and proactive approach to customer service makes us
an
integral part of our customers’ long-term marketing and packaging decisions.
This commitment to service and quality has resulted in numerous single-source
and long-term relationships. For example, the average term of our relationships
with our top 10 customers is 21 years. We have received numerous service,
quality and package design awards from customers including Alberto Culver,
Bayer, Clorox, Kraft and Perseco (McDonald’s).
Strong
organic growth through continued focus on best-in-class technology and
innovation.
We
believe that our manufacturing technology and expertise are among the best
in
the industry and that we are a leader in manufacturing expertise and new product
innovation, as evidenced by our offering of an extensive proprietary product
line of value-added plastic packaging in North America. We currently own over
1,500 proprietary molds and have pioneered a variety of production processes
such as what we believe to be the world’s largest deep draw PP thermoforming
system for drink cups. Other recent examples of product design successes include
an innovative prescription package for Target Stores, a proprietary flip-top
closure for tubes and our Vent Band™ compression closure for isotonic beverages
(
e.g.
,
Gatorade
®
).
This
skill set has allowed us to consistently achieve annual organic volume growth
in
excess of market growth rates. We focus our research and development efforts
on
high value-added products that offer unique performance characteristics and
provide opportunities to achieve premium pricing and further enhance our
strategic position with our customers. Our sales force of over 100 dedicated
professionals works collaboratively with our customers’ marketing departments in
identifying and delivering new package designs.
Scale
and low-cost operations drive profitability.
We
are
one of the largest domestic manufacturers and suppliers of plastic packaging
products and we believe we are one of the lowest cost manufacturers in the
industry. We believe our size enables us to achieve superior operating
efficiencies and financial results through several scale-driven advantages.
Our
large, high volume equipment and flexible, cross-facility manufacturing
capabilities result in lower unit-production costs than many of our competitors
as we can leverage our fixed costs, higher capacity utilization and longer
production runs. Our scale also enhances our purchasing power and lowers our
cost of raw materials such as resin. In addition, as a result of the strategic
location of our 25 manufacturing facilities and our national footprint of
several warehouse and distribution facilities which are located near our
customers, we have broad distribution capabilities, which reduce shipping costs
and allow for quick turnaround times to our customers. In addition, each of
our
over 240 managers is charged with meeting specific productivity improvement
targets each year, with a material amount of their compensation tied to their
performance versus these targets.
Ability
to pass through changes in the price of resin.
We
have
generally been able to pass through to our customers increases in costs of
raw
materials, especially resin, the principal raw material used in manufacturing
our products. Historically, we have consistently grown our earnings even during
periods of volatility in raw material markets. We have contractual price
escalators/de-escalators tied to the price of resin with customers representing
more than 60% of net sales that result in relatively rapid price adjustments
to
these customers. In addition, we have experienced high success rates in quickly
passing through increases and decreases in the price of resin to customers
without indexed price agreements.
We
plan
to pursue opportunities to purchase resin jointly with other Apollo portfolio
companies which we anticipate should generate further benefits in terms of
our
ability to further manage our material.
Track
record of strong, stable free cash flow.
Our
strong earnings, combined with our modest capital expenditure profile, limited
working capital requirements and relatively low cash taxes due to various tax
attributes result in the generation of significant free cash flow. We have
a
consistent track record of generating high free cash flow as a percentage of
net
sales relative to our plastic packaging peers. In addition, the capital
expenditures required to support our targeted manufacturing platforms and market
segments is lower than in many other areas of the plastic packaging industry.
Motivated
management team with highly successful track record.
We
believe our management team is among the deepest and most experienced in the
packaging industry. Our 12 senior executives possess an average of 20 years
of
packaging industry experience, and have combined experience of over 236 years
at
Berry. The senior management team includes President and CEO Ira Boots, who
has
been with us for 28 years, and COO Brent Beeler and CFO Jim Kratochvil, who
have
each been with us for over 21 years. This team has been responsible for
developing and executing our strategy that has generated a track record of
earnings growth and strong free cash flow. In addition, management has
successfully integrated 22 acquisitions since 1988, and has generally achieved
significant reductions in manufacturing and overhead costs of acquired companies
by introducing advanced manufacturing processes, reducing headcount,
rationalizing facilities and tools, applying best practices and capitalizing
on
economies of scale. Members of our senior management team and certain other
employees own approximately 23% of the equity of Berry Plastics Group on a
fully
diluted basis.
Our
Strategy
Our
goal
is to maintain and enhance our market position and leverage our core strengths
to increase profitability and maximize free cash flow. Our strategy to achieve
these goals includes the following elements:
Increase
sales to our existing customers
.
We
believe we have significant opportunities to increase our share of the packaging
purchases made by our over 12,000 existing customers as we expand our product
portfolio and extend our existing product lines. For example, our open top
and
closed top divisions are penetrating new markets with new products such as
plastic ice cream containers, thermoformed PP containers in the prepared foods
and deli packaging market, extruded bottles for shaving can systems in the
shave
gel market, and plastic pry-off containers in the home improvement market.
We
believe our broad and growing product lines will allow us to capitalize on
the
corporate consolidation occurring among our customers and the continuing
consolidation of their vendor relationships. With our extensive manufacturing
capabilities, product breadth and national distribution capabilities, we can
provide our customers with a cost-effective, single source from which to
purchase a broad range of their plastic packaging needs. For example, we were
recently awarded all the cultured dairy container business from Dean Foods,
in
addition to the single source position we already maintain with respect to
Dean
Foods frozen foods plastic packaging.
Aggressively
pursue new customers
.
We
intend
to aggressively pursue new customer relationships in order to drive additional
organic growth. We believe that our national direct sales force, our ability
to
offer new customers a cost-effective, single source from which to purchase
a
broad range of plastic packaging products and our proven ability to design
innovative new products position us well to continue to grow and diversify
our
customer base. For example, our proprietary deep draw polypropylene
thermoforming technology has allowed us to recently add Yum! Brands as a
customer.
Manage
costs and capital expenditures to drive free cash flow and returns on
capital
.
We
continually focus on reducing our costs in order to maintain and enhance our
low-cost position. We employ a team culture of continuous improvement operating
under an ISO management system and employing Six Sigma throughout the
organization. Our principal cost-reduction strategies include
(i) leveraging our scale to reduce material costs, (ii) efficiently
reinvesting capital into our manufacturing processes to maintain technological
leadership and achieve productivity gains, (iii) focusing on ways to
streamline operations through plant and overhead rationalization and
(iv) monitoring and rationalizing the number of vendors from which we
purchase materials in order to increase our purchasing power. Return on capital
is a key metric throughout the organization and we require that capital
expenditures meet certain return thresholds, which encourages prudent levels
of
spending on expansion and cost saving opportunities.
Selectively
pursue strategic acquisitions
.
In
addition to the significant growth in earnings and cash flow we expect to
generate from organic volume growth and continued cost reductions, we believe
that there is an opportunity for future growth through selective and prudent
acquisitions. Our industry is highly fragmented and our customers are focused
on
working with a small set of key vendors. We have a successful track record
of
executing and integrating acquisitions, having completed 22 acquisitions since
1988, and have developed an expertise in synergy realization. We intend to
continue to apply a selective and disciplined acquisition strategy, which is
focused on improving our financial performance in the long-term and further
developing our scale and diversity in new or existing product lines.
Products,
Markets and Customers
The
product categories on which we focus utilize similar manufacturing processes,
share common raw materials (principally PP and PE resin) and sell into end
markets where customers demand innovative packaging solutions and quick and
seamless design and delivery. We organize our business into two operating
divisions: open top and closed top.
The
following table displays our net sales by division for each of the past five
fiscal years. Additional financial information about our business segments
is
provided in “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Notes to Consolidated Financial Statements”, which
are included elsewhere in this prospectus.
($
in millions)
|
|
2001
|
|
2002
|
|
2003
|
|
2004
|
|
2005
|
|
Open
Top
|
|
$
|
329.3
|
|
$
|
360.4
|
|
$
|
404.6
|
|
$
|
659.2
|
|
$
|
775.7
|
|
Closed
Top
|
|
|
132.4
|
|
|
133.9
|
|
|
147.3
|
|
|
155.0
|
|
|
394.0
|
|
Total
Net Sales
|
|
$
|
461.7
|
|
$
|
494.3
|
|
$
|
551.9
|
|
$
|
814.2
|
|
$
|
1,169.7
|
|
Open
Top
Our
open
top division is comprised of three product categories: containers, drink cups,
and housewares. The largest end-uses for our containers are food products,
building products,
chemicals
and dairy products. We believe that we offer one of the broadest product lines
among U.S.-based injection-molded plastic container and drink cup manufacturers
and are a leader in thermoformed container and drink cup offerings, which
provide a superior combination of value and quality relative to competing
processes. Many of our open top products are manufactured from proprietary
molds
that we develop and own, which results in significant switching costs
to our customers. In addition to a complete product line, we have
sophisticated printing capabilities and in-house graphic arts and tooling
departments, which allow us to integrate ourselves into, and add material value
to, our customers’ packaging design process. Our product engineers work directly
with customers to design and commercialize new drink cups and containers. In
order to identify new markets and applications for existing products and
opportunities to create new products, we rely extensively on our national sales
force. Once these opportunities are identified, our sales force works with
our
product design engineers and artists to satisfy customers’ needs. Our low-cost
manufacturing capability with plants strategically located throughout the United
States and a dedication to high-quality products and customer service have
allowed us to further develop and maintain strong relationships with our
attractive base of franchise customers. We have a diverse customer base for
our
open top products, and no single open top customer exceeded 7% of our total
net
sales in fiscal 2005. Our primary competitors include Airlite, Huhtamaki,
Letica, Polytainers, Radnor Holdings and Solo. These competitors individually
only compete on certain of our open top products, whereas we offer the entire
selection of open top products described below.
Containers.
We
manufacture a collection of nationally branded container products and also
seek
to develop customized container products for niche applications by leveraging
of
our state-of-the-art design, decoration and graphic arts capabilities. This
mix
allows us to both achieve significant economies of scale, while also maintaining
an attractive portfolio of specialty products. Our container capacities range
from 4 ounces to 5 gallons and are offered in various styles with accompanying
lids, bails and handles, some of which we produce, as well as a wide array
of
decorating options.
Drink
Cups.
We
believe that we are the largest provider of large size thermoformed PP
and injection-molded plastic drink cups in the United States. We are the
leading producer of 32 ounce or larger thermoformed PP drink cups and offer
a product line with sizes ranging from 12 to 44 ounces. Our thermoform
process uses PP instead of more expensive polystyrene in producing deep draw
drink cups to generate a cup of superior quality with a material competitive
cost advantage versus thermoformed polystyrene drink cups. Additionally, we
produce injection-molded plastic cups that range in size from 12 to 64 ounces.
Primary markets for our plastic drink cups are quick service and family dining
restaurants, convenience stores, stadiums and retail stores. Many of our cups
are decorated, often as promotional items, and we believe we have a reputation
in the industry for innovative, state-of-the-art graphics.
Housewares.
Our
participation in the housewares market is focused on producing semi-disposable
plastic housewares and plastic garden products. Examples of our products include
plates, bowls, pitchers, tumblers and outdoor flowerpots. We sell virtually
all
of our products in this market through major national retail marketers and
national chain stores, such as Wal-Mart. PackerWare is our recognized brand
name
in these markets and PackerWare branded products are often co-branded by our
customers. Our strategy in this market has been to provide high value to
consumers at a relatively modest price, consistent with the key price points
of
the retail marketers. We believe outstanding service and the ability to deliver
products with timely combination of color and design further enhance our
position in this market. This focus allowed PackerWare to be named Wal-Mart’s
category manager for its entire seasonal housewares department.
Closed
Top
Our
closed top division is comprised of three product categories; closures and
overcaps, prescription vials and bottles and tubes. We believe that this line
of
products gives us a competitive advantage in being able to provide a complete
plastic package to our customers. We have a number of leading positions in
which
we have been able to leverage this capability such as prescription vial packages
and Tab II
®
pharmaceutical packages. Our design center and product development engineers,
combined with our world class manufacturing facilities, give us the ability
to
take projects from concept to end product. We utilize the latest in
manufacturing technology, from mold design to vision systems, to meet our high
quality standards. We have a diverse customer base for our closed top products,
and no single closed top customer exceeded 3% of our total net sales in fiscal
2005. Our primary competitors include Alcoa, Cebal, Graham Packaging,
Owens-Illinois, Phoenix, Rexam, Seaquist and Silgan. These competitors
individually only compete on certain of our closed top products. We believe
that
we are the only industry participant that offers the entire product line of
closed top products described below.
Closures
and Overcaps.
We
are a
leading producer of closures and overcaps in many of our product lines including
continuous thread and child resistant closures and aerosol overcaps. We
currently sell our closures into numerous end markets, including pharmaceutical,
vitamin and nutritional, healthcare, food and beverage and personal care. In
addition to traditional closures, we are a provider of a wide selection of
custom closure solutions including fitments and plugs for medical applications,
cups and spouts for liquid laundry detergent and dropper bulb assemblies for
medical and personal care applications. Further, we believe that we are the
leading domestic producer of injection-molded aerosol overcaps. Our aerosol
overcaps are used in a wide variety of consumer goods including spray paints,
household and personal care products, insecticides and numerous other commercial
and consumer products. We believe our technical capabilities, expertise and
low
cost position have allowed us to become the leading provider of closures and
overcaps to a diverse set of leading companies in the markets we serve. Our
manufacturing advantage is driven by our position on the forefront of various
processes including the latest in single and bi-injection technology, molding
of
thermoplastic and thermoset resins, compression molding of thermoplastic resins,
accurate reproduction of colors and proprietary packing technology that
minimizes freight cost and warehouse space. Many of our overcaps and closures
are manufactured from proprietary molds, which we develop and own and which
results in significant switching costs to our customers. In addition, we utilize
state of the art lining, assembly, and decorating equipment in secondary
operations. We have a strong reputation for quality and have received numerous
“Supplier Quality Achievement Awards” from customers in different markets.
Prescription
Vials and Bottles.
Our
prescription vial and bottle businesses target similar markets as our closure
business. We believe we are the leading supplier of spice containers in the
United States and have a leadership position in various vitamin and nutritional
markets, as well as selling bottles into prescription and pharmaceutical
applications. Additionally, we are a leading supplier in the prescription vial
market, supplying a complete line of amber plastic vials with both one-piece
and
two-piece child-resistant closures. We offer a variety of personal care
packages, and see the personal care market as a strong opportunity to grow
our
business. While offering a set of stock bottles in the vitamin and nutritional
markets, our design capabilities, along with internal engineering strength
give
us the ability to compete on customized designs to provide differentiation
from
traditional packages. We expect our bottle segment to experience continued
growth in the healthcare product line, as the patented child resistant and
senior friendly Tab II
®
product
offering gains popularity. Our strong product offerings in continuous threaded,
child-resistant, and tamper-evident closures, make “one-stop”
shopping
available to many key customers. We offer our customers decorated bottles with
hot stamping, silk screening and labeling.
Tubes.
We
believe that we are one of the largest suppliers of plastic squeeze tubes in
the
United States. We offer a complete line of tubes from ½
”
to
2
3
/
16
”
in
diameter. Our focus has been to
ensure
that we are able to meet the increasing trend towards large diameter tubes
with
high-end decoration. The majority of our tubes are sold in the personal care
market, focusing on products like facial/cold creams, shampoos, conditioners,
bath/shower gels, lotions, sun care, hair gels and anti-aging creams. We also
sell our tubes into the pharmaceutical and household
chemical
markets. We believe that our ability to provide creative package designs, with
state of the art decorating, combined with a complementary line of dispensing
closures, makes us a preferred supplier for many customers in our target
markets.
Marketing
and sales
We
reach
our large and diversified base of over 12,000 customers primarily through our
direct field sales force of over 100 dedicated professionals. Our field sales,
production and support staff meet with customers to understand their needs
and
improve our product offerings and services. While certain of these field sales
representatives are focused on individual product lines, our team is encouraged
to sell all of our products to serve the needs of our customers. We believe
that
a direct field sales force is able to better focus on target markets and
customers, with the added benefit of permitting us to control pricing decisions
centrally. We also utilize the services of third party manufacturing
representatives to assist our direct sales force. Highly skilled customer
service representatives are strategically located throughout our facilities
to
support the national field sales force. In addition, telemarketing
representatives, marketing managers and sales/marketing executives oversee
the
marketing and sales efforts. Manufacturing and engineering personnel work
closely with field sales personnel and customer service representatives to
satisfy customers’ needs through the production of high-quality, value-added
products and on-time deliveries.
Our
sales
force is also supported by technical specialists and our in-house graphics
and
design personnel. Our graphic arts department includes computer-assisted graphic
design capabilities and in-house production of photopolymer printing plates.
We
also have a centralized color matching and materials blending department that
utilizes a computerized spectrophotometer to insure that colors match those
requested by customers.
Manufacturing
We
manufacture our products utilizing several primary molding methods including:
injection, thermoforming, compression, tube extrusion and blow molding. These
processes begin with raw plastic pellets, which are then converted into finished
products. In the injection process, the raw pellets are melted to a liquid
state
and injected into a multi-cavity steel mold where the resin is allowed to
solidify to take the final shape of the part. In the thermoform process, the
raw
resin is softened to the point where sheets of material are drawn into
multi-cavity molds and formed over the molds to form the desired shape.
Compression molding is a high-speed process that begins with a continuously
extruded plastic melt stream that is cut while remaining at molding temperature
and carried to the mold cavity. Independent mold cavities close around the
molten plastic, compressing it to form the part, which is cooled and ejected.
In
the tube extrusion process, we extrude resin that is solidified in the shape
of
a tube and then cut to length. The tube then has the head added by using another
extruder that extrudes molten resin into a steel die where the cut tube is
inserted into the steel die. In blow molding we use
three
blow molding systems: injection, extrusion, and stretch blow. Injection blow
molding involves injecting molten resin into a multiple cavity steel die and
allowing it to solidify into a preform. The parts are then indexed to a blow
station where high-pressure air is used to form the preform into the bottle.
In
extrusion blow molding, we extrude molten plastic into a long tube and then
aluminum dies clamp around the tube and high-pressure air is used to form the
bottle. In stretch blow molding, we inject molten plastic into a multi-cavity
steel mold where the parts are allowed to cool in the mold until they are
solidified. The parts are then brought to a stretch blow molding machine where
they are reheated and then placed in aluminum dies where high pressure air
is
used to form the bottle.
The
final
cured parts are transferred from the primary molding process to corrugated
containers for shipment to customers or for post-molding secondary operations
(offset printing, labeling, lining, silkscreening, handle applications, etc.).
We believe that our molding, handling, and post-molding capabilities are among
the best in the industry. Our overall manufacturing philosophy is to be a
low-cost producer by using (1) high-speed molding machines, (2) modern
multi-cavity hot runner, cold runner and insulated runner molds,
(3) extensive material handling automation and (4) sophisticated
post-molding technology. We utilize state-of-the-art robotic packaging processes
for large volume products, which enable us to reduce breakage while lowering
warehousing and shipping costs. Each plant has maintenance capability to support
molding and post-molding operations. We have historically made, and intend
to
continue to make, significant capital investments in plant and equipment because
of our objectives to improve productivity, maintain competitive advantages
and
foster continued growth. Capital expenditures for 2006 are expected to be
approximately $90.0 million, which includes a significant amount of expenditures
for capacity additions and other growth opportunities across our business as
well as expenditures related to cost-saving opportunities and our estimated
annual level of maintenance capital expenditures of approximately $22.0 million.
Research
and product development and design
We
believe our technology base and research and development support are among
the
best in the plastics packaging industry. Using three-dimensional computer aided
design technology, our full time product designers develop innovative product
designs and models for the packaging market. We can simulate the molding
environment by running unit-cavity prototype molds in small injection-molding
machines for research and development of new products. Production molds are
then
designed and outsourced for production by various companies with which we have
extensive experience and established relationships or built by one of our two
in-house tooling divisions located in Evansville and Chicago. Our engineers
oversee the mold-building process from start to finish. We currently have a
collection of over 1,500 proprietary molds. Many of our customers work in
partnership with our technical representatives to develop new, more competitive
products. We have enhanced our relationships with these customers by providing
the technical service needed to develop products combined with our internal
graphic arts support.
Additionally,
at our technical center in Lancaster, Pennsylvania, we prototype new ideas,
conduct research and development of new products and processes, and qualify
production molding systems that go directly to our facilities and into
production. We also have a complete product testing and quality laboratory
at
our technical center. With this combination of manufacturing simulation and
quality systems support we are able to improve time to market and reduce cost.
We spent $3.9 million, $6.1 million, $3.8 million and $3.5 million on research
and development in the 26 weeks ended July 1, 2006 and fiscal years 2005, 2004,
and 2003, respectively.
We
also
utilize our in-house graphic design department to develop color and styles
for
new products. Our design professionals work directly with our customers to
develop new styles and use computer-generated graphics to enable our customers
to visualize the finished product.
Quality
assurance
Each
plant extensively utilizes Total Quality Management philosophies, including
the
use of statistical process control and extensive involvement of employee teams
to increase productivity. This teamwork approach to problem-solving increases
employee participation and provides necessary training at all levels. Our teams
also utilize the Six Sigma methodology to improve internal processes and provide
a systematic approach to problem solving resulting in improved customer service.
The drive for team work and continuous improvement is an ongoing quality focus.
All of our facilities are ISO9001/2000 certified or are working toward such
certification. Certification requires a demonstrated compliance by a company
with a set of shipping, trading and technology standards promulgated by the
International Organization for Standardization (“ISO”). Extensive testing of
parts for size, color, strength and material quality using statistical process
control techniques and sophisticated technology is also an ongoing part of
our
quality assurance activities.
Systems
All
of
our facilities are on the same integrated accounting and control system that
allows for consistency in reporting and efficient consolidation. This enterprise
resource planning (“ERP”) system produces complete financial and operational
reports and is expandable to add new features and/or locations as we grow.
All
of our facilities, excluding the Milan facility and two of the Kerr facilities,
utilize the manufacturing applications of our standard ERP system. The two
remaining Kerr facilities are scheduled to be converted to the manufacturing
applications of the system by the end of the first quarter of fiscal 2007.
We
also utilize many other applications to support business processes.
Sources
and availability of raw materials
The
most
important raw material purchased by us is plastic resin. We purchased
approximately $385.0 million of resin in fiscal 2005 with approximately 23%
of
our resin pounds, on a pro forma basis, being HDPE, 11% LDPE, 62% PP, 3% PET
and
1% other. We have contractual price escalators and de-escalators tied to the
price of resin with customers representing more than 60% of net sales that
result in price increases/decreases to these customers in a relatively short
period of time, typically quarterly. In addition, we have historically had
success in passing through price increases and decreases in the price of resin
to customers without indexed price agreements. Less than 10% of our net sales
are generated from arrangements that exhibit fixed-price characteristics, and
we
have at times and may continue to enter into negotiated purchase agreements
with
resin suppliers to lock-in a level of profitability on these arrangements.
We
also opportunistically pursue resin forward hedging transactions in order to
manage our resin spend and further align our costs with our prices to our
customers. We can further seek to mitigate the effect of resin price movements
through our ability to accommodate raw material switching for certain products
between HDPE and PP as prices fluctuate and reducing the quantity of resin
in
certain of our products. We feel that based upon the combination of the methods
described above we have the ability to manage changes in resin prices as
evidenced by our consistent profitability and earnings growth throughout recent
periods of historically high resin volatility. We plan to pursue opportunities
to jointly
purchase
resin with other Apollo portfolio companies. These joint-purchasing
opportunities should generate further benefits in terms of our ability to manage
our material.
Our
plastic resin purchasing strategy is to deal with only high-quality, dependable
suppliers, such as Basell, Chevron, Dow, ExxonMobil, Huntsman, Lyondell, Nova,
Sunoco and Total. We believe that we have maintained strong relationships with
these key suppliers and expect that such relationships will continue into the
foreseeable future. The resin market is a global market and, based on our
experience, we believe that adequate quantities of plastic resins will be
available at market prices, but we can give you no assurances as to such
availability or the prices thereof.
Employees
As
of
July 1, 2006, we had approximately 6,800 employees. Poly-Seal Corporation,
a
wholly owned subsidiary, and the United Steelworkers of America are parties
to a
collective bargaining agreement which expires in April 2009. As of July 1,
2006,
approximately 300 employees of Poly-Seal Corporation, all of which are located
in our Baltimore facility, were covered by this agreement. None of our other
domestic employees are covered by collective bargaining agreements. We believe
our relations with our employees are good.
Patents
and trademarks
We
rely
on a combination of patents, trade secrets, unpatented know-how, trademarks,
copyrights and other intellectual property rights, nondisclosure agreements
and
other protective measures to protect our proprietary rights. We do not believe
that any individual item of our intellectual property portfolio is material
to
our current business. We employ various methods, including confidentiality
and
non-disclosure agreements with third parties, employees and consultants, to
protect our trade secrets and know-how. We have licensed, and may license in
the
future, patents, trademarks, trade secrets, and similar proprietary rights
to
and from third parties.
Properties
We
believe that our property and equipment are well maintained, in good operating
condition and adequate for our present needs.
The
following table sets forth our principal manufacturing facilities:
Location
|
Square Footage
|
Use
|
Owned/Leased
|
Evansville,
IN
|
552,000
|
Headquarters and manufacturing
|
Owned
|
Evansville,
IN
|
223,000
|
Manufacturing
|
Leased
|
Henderson,
NV
|
175,000
|
Manufacturing
|
Owned
|
Iowa
Falls, IA
|
100,000
|
Manufacturing
|
Owned
|
Charlotte,
NC
|
150,000
|
Manufacturing
|
Owned
|
Lawrence,
KS
|
424,000
|
Manufacturing
|
Owned
|
Suffolk,
VA
|
110,000
|
Manufacturing
|
Owned
|
Monroeville,
OH
|
350,000
|
Manufacturing
|
Owned
|
Norwich,
England
|
88,000
|
Manufacturing
|
Owned
|
Woodstock,
IL
|
170,000
|
Manufacturing
|
Owned
|
Streetsboro,
OH
|
140,000
|
Manufacturing
|
Owned
|
Baltimore,
MD
|
244,000
|
Manufacturing
|
Owned
|
Milan,
Italy
|
125,000
|
Manufacturing
|
Leased
|
Chicago,
IL
|
472,000
|
Manufacturing
|
Leased
|
Richmond,
IN
|
160,000
|
Manufacturing
|
Owned
|
Syracuse,
NY
|
215,000
|
Manufacturing
|
Leased
|
Phoenix,
AZ
|
266,000
|
Manufacturing
|
Leased
|
Ahoskie,
NC
|
150,000
|
Manufacturing
|
Owned
|
Bowling
Green, KY
|
168,000
|
Manufacturing
|
Leased
|
Sarasota,
FL
|
74,000
|
Manufacturing
|
Owned
|
Jackson,
TN
|
211,000
|
Manufacturing
|
Leased
|
Anaheim,
CA
|
248,000
|
Manufacturing
|
Leased
|
Cranbury,
NJ
|
204,000
|
Manufacturing
|
Leased
|
Easthampton,
MA
|
210,000
|
Manufacturing
|
Leased
|
Oxnard,
CA
|
110,000
|
Manufacturing
|
Leased
|
Toluca,
Mexico
|
172,000
|
Manufacturing
|
Leased
|
|
5,511,000
|
|
|
Environmental
matters and government regulation
Our
past
and present operations and our past and present ownership and operations of
real
property are subject to extensive and changing federal, state, local and foreign
environmental laws and regulations pertaining to the discharge of materials
into
the environment, the handling and disposition of wastes, and cleanup of
contaminated soil and ground water, or otherwise relating to the protection
of
the environment. We believe that we are in substantial compliance with
applicable environmental laws and regulations. However, we cannot predict with
any certainty that we will not in the future incur liability, which could be
significant under environmental statutes and regulations with respect to
non-compliance with environmental laws, contamination of sites formerly or
currently owned or operated by us (including contamination caused by prior
owners and operators of such sites) or the off-site disposal of regulated
materials, which could be material.
We
may
from time to time be required to conduct remediation of releases of regulated
materials at our owned or operated facilities. None of our pending remediation
projects are expected to result in material costs. Like any manufacturer, we
are
also subject to the possibility that we may receive notices of potential
liability in connection with materials that were sent to third-party recycling,
treatment, and/or disposal facilities under the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
(“CERCLA”), and comparable state statutes, which impose liability for
investigation and remediation of contamination without regard to fault or the
legality of the conduct that contributed to the contamination, and for damages
to natural resources. Liability under CERCLA is retroactive, and, under certain
circumstances, liability for the entire cost of a cleanup can be imposed on
any
responsible party. No such notices are currently pending which are expected
to
result in material costs.
The
Food
and Drug Administration (“FDA”) regulates the material content of direct-contact
food and drug packages, including certain packages we manufacture pursuant
to
the Federal Food, Drug and Cosmetics Act. Certain of our products are also
regulated by the Consumer Product Safety Commission (“CPSC”) pursuant to various
federal laws, including the
Consumer
Product Safety Act and the Poison Prevention Packaging Act. Both the FDA and
the
CPSC can require the manufacturer of defective products to repurchase or recall
such products and may also impose fines or penalties on the manufacturer.
Similar laws exist in some states, cities and other countries in which we sell
our products. In addition, laws exist in certain states restricting the sale
of
packaging with certain levels of heavy metals, imposing fines and penalties
for
non-compliance. Although we use FDA approved resins and pigments in our products
that directly contact food and drug products and believe they are in material
compliance with all such applicable FDA regulations, and we believe our products
are in material compliance with all applicable requirements, we remain subject
to the risk that our products could be found not to be in compliance with such
requirements.
The
plastics industry, including us, is subject to existing and potential federal,
state, local and foreign legislation designed to reduce solid wastes by
requiring, among other things, plastics to be degradable in landfills, minimum
levels of recycled content, various recycling requirements, disposal fees and
limits on the use of plastic products. In particular, certain states have
enacted legislation requiring products packaged in plastic containers to comply
with standards intended to encourage recycling and increased use of recycled
materials. In addition, various consumer and special interest groups have
lobbied from time to time for the implementation of these and other similar
measures. We believe that the legislation promulgated to date and such
initiatives to date have not had a material adverse effect on us. There can
be
no assurance that any such future legislative or regulatory efforts or future
initiatives would not have a material adverse effect on us.
Legal
proceedings
We
are
party to various legal proceedings involving routine claims which are incidental
to our business. Although our legal and financial liability with respect to
such
proceedings cannot be estimated with certainty, we believe that any ultimate
liability would not be material to our financial condition.
Executive
Officers, Officer and Directors
The
following table provides information regarding the executive officers, officers
and certain members of the board of directors of Berry Plastics Group, of which
we are a wholly owned subsidiary, following the consummation of the Acquisition.
Name
|
Age
|
Title
|
Ira
G. Boots
|
52
|
President,
Chief Executive Officer and Director
|
R.
Brent Beeler
|
53
|
Executive
Vice President and Chief Operating Officer
|
James
M. Kratochvil
|
50
|
Executive
Vice President, Chief Financial Officer, Treasurer and
Secretary
|
Anthony
M. Civale
|
32
|
Director
|
Patrick
J. Dalton
|
38
|
Director
|
Donald
C. Graham
|
73
|
Director
|
Steven
C. Graham
|
47
|
Director
|
Joshua
J. Harris
|
41
|
Director
|
Robert
V. Seminara
|
34
|
Director
|
|
|
|
The
following table provides information regarding the executive officers, officers
and certain members of the board of directors of Berry Plastics Holding
Corporation following the consummation of the Acquisition.
Name
|
Age
|
Title
|
Ira
G. Boots
|
52
|
President,
Chief Executive Officer and Director
|
R.
Brent Beeler
|
53
|
Executive
Vice President and Chief Operating Officer
|
James
M. Kratochvil
|
50
|
Executive
Vice President, Chief Financial Officer, Treasurer and
Secretary
|
Anthony
M. Civale
|
32
|
Director
|
Robert
V. Seminara
|
34
|
Director
|
Ira
G. Boots
has been
President and Chief Executive Officer since June 2001 of Holdings and Berry
Plastics Corporation, and a Director of Holdings and Berry Plastics Corporation
since April 1992. Prior to that, Mr. Boots served as Chief Operating Officer
of
Berry Plastics Corporation since August 2000 and Vice President of Operations,
Engineering and Product Development of Berry Plastics Corporation since April
1992. Mr. Boots was employed by our predecessor company from 1984 to December
1990 as Vice President, Operations.
R.
Brent Beeler
was
named Executive Vice President and Chief Operating Officer of Holdings and
Berry
Plastics Corporation in May 2005. He formerly served as President—Containers and
Consumer Products of Berry Plastics Corporation since October 2003 and has
been
an Executive Vice President of Holdings since July 2002. He had been Executive
Vice President and General Manager—Containers and Consumer Products of Berry
Plastics Corporation since October 2002 and was Executive Vice President and
General Manager—Containers since August 2000. Prior to that, Mr. Beeler was
Executive Vice President, Sales and Marketing of Berry Plastics Corporation
since February 1996 and Vice President, Sales and Marketing of Berry Plastics
Corporation since December 1990. Mr. Beeler was employed by
our
predecessor company from October 1988 to December 1990 as Vice President, Sales
and Marketing and from 1985 to 1988 as National Sales Manager.
James
M. Kratochvil
has been
Executive Vice President, Chief Financial Officer, Treasurer and Secretary
of
Holdings and Berry Plastics Corporation since December 1997. He formerly served
as Vice President, Chief Financial Officer and Secretary of Berry Plastics
Corporation since 1991, and as Treasurer of Berry Plastics Corporation since
May
1996. He formerly served as Vice President, Chief Financial Officer and
Secretary of Holdings since 1991. Mr. Kratochvil was employed by our predecessor
company from 1985 to 1991 as Controller.
Anthony M.
Civale
has been
a member of our Board of Directors since the consummation of the Acquisition.
Mr. Civale is a Partner at Apollo, where he has worked since 1999. Prior to
that
time, Mr. Civale was employed by Deutsche Bank Securities in the Corporate
Finance Department. Mr. Civale also serves on the boards of directors of Goodman
Global Holdings, Inc. and Covalence Specialty Materials Corp.
Patrick
J. Dalton
has
been
a member of our Board of Directors since the consummation of the Acquisition.
Mr. Dalton is a Partner and member of the Investment Committee of Apollo
Investment Management, L.P., Apollo’s business development corporation, where he
has worked since 2004. Prior to that time, Mr. Dalton was employed by Goldman,
Sachs & Co. in the Principal Investment Area. Mr. Dalton has served, or
was an observer, on the boards of directors of Berry Plastics Corporation,
Playpower Inc., Pro Mach Inc., and Hanley Wood, LLC as well as a number of
other
private companies.
Donald
C. Graham
founded
the Graham Group, an industrial and investment concern, and has been a member
of
our Board of Directors since the consummation of the Acquisition. The Graham
Group is engaged in a broad array of businesses, including industrial process
technology development, capital equipment production, and consumer and
industrial products manufacturing. Mr. Graham founded Graham Packaging Company,
in which he sold a controlling interest in 1998. The Graham Group’s three legacy
industrial businesses operate in more than 80 locations worldwide, with combined
sales of more than $2.75 billion. Mr. Graham currently serves on the board
of
directors of Western Industries, Inc., Supreme Corq LLC, National Diversified
Sales, Inc., Infiltrator Systems, Inc., Touchstone Wireless Repair and Logistics
LP, Nurture, Inc., Graham Engineering Corporation and Graham Architectural
Products Corporation.
Steven
C. Graham
founded
Graham Partners and has been a member of our Board of Directors since the
consummation of the Acquisition. Prior to founding Graham Partners in 1998,
Mr.
Graham oversaw the Graham Group’s corporate finance division starting in 1988.
Prior to 1988, Mr. Graham was a member of the investment banking division of
Goldman, Sachs & Co., and was an Acquisition Officer for the RAF Group,
a private equity investment group. Mr. Graham currently serves on the board
of
directors of Graham Architectural Products Corporation, Western Industries,
Inc., National Diversified Sales, Inc., HB&G Building Products, Inc.,
Nailite International, Inc., Dynojet, Inc., Supreme Corq LLC, Line-X, LLC,
Abrisa Industrial Glass, Inc., Infiltrator Systems, Inc., The Masonry Group
LLC,
and ICG Commerce Holdings, Inc.
Joshua J.
Harris
has
been
a member of our Board of Directors since the consummation of the Acquisition.
Mr. Harris is a founding Senior Partner at Apollo and has served as an officer
of certain affiliates of Apollo since 1990. Prior to that time, Mr. Harris
was a
member of the Mergers and Acquisitions Department of Drexel Burnham Lambert
Incorporated. Mr. Harris is also a director of Hexion Specialty Chemicals,
Inc.,
Allied Waste Industries, Inc., Metals USA, Inc., Nalco Corporation, Covalence
Specialty Materials Corp., Quality Distribution Inc., United Agri Products
and
Verso Paper Inc.
Robert V.
Seminara
has been
a member of our Board of Directors since the consummation of the Acquisition.
Mr. Seminara is a Partner at Apollo, where he has worked since 2003. Prior
to
that time, Mr. Seminara was a managing director of Evercore Partners LLC. Mr.
Seminara also serves on the boards of directors of Hexion Specialty Chemicals,
Inc., Covalence Specialty Materials Corp. and World Kitchen
Inc.
Board
Committees
Our
Board
of Directors has a Compensation Committee, an Audit Committee and Executive
Committee. The Compensation Committee makes recommendations concerning salaries
and incentive compensation for our employees and consultants. The Audit
Committee recommends the annual appointment of auditors with whom the Audit
Committee reviews the scope of audit and non-audit assignments and related
fees,
accounting principles we use in financial reporting, internal auditing
procedures and the adequacy of our internal control procedures.
Compensation
for Directors
Non-employee
directors receive $12,500 per quarter plus $2,000 for each meeting they attend
and are reimbursed for out of pocket expenses incurred in connection with their
duties as directors. Non-employee directors each received 2,000 stock options
in
connection with the consummation of the Acquisition. 1,334 of these options
were
vested and exercisable immediately and have a fixed exercise price of $100
per
share, which was the fair market value at the date of grant. The remaining
666
options vest and become exercisable over a five year period, beginning January
1, 2007, and have an exercise price that commenced at the fair market value
of
$100 per share and increases at a rate of 15% per year.
Employees
who are directors receive no cash consideration for serving on our Board of
Directors, but they are reimbursed for out-of-pocket expenses incurred in
connection with their duties as directors.
Executive
Compensation
Our
executive officers receive no cash consideration for their services to Holdings,
but are reimbursed for out-of-pocket expenses incurred in connection with their
duties as executive officers of Holdings. The following table sets forth a
summary of the compensation paid by Berry Plastics Corporation, a wholly owned
subsidiary of Holdings, to the individual who has acted as its Chief Executive
Officer since the date of the Acquisition and the four other most highly
compensated executive officers of Berry Plastics Corporation as of the date
of
this prospectus (collectively, the “Named Executive Officers”) for services
rendered in all capacities to us during fiscal 2005, 2004 and 2003.
SUMMARY
COMPENSATION TABLE
|
|
Annual
Compensation
|
Long
Term
Compensation
|
|
Name
and Principal Position
|
Fiscal
Year
|
Salary
|
Bonus
|
Securities
Underlying
Options
(#)
|
Other
Compensation
(1)
|
|
|
|
|
|
|
Ira
G. Boots
President
and Chief Executive Officer
|
2005
|
$
455,749
|
$
299,323
|
—
|
$
15,494
|
2004
|
442,226
|
214,200
|
—
|
15,494
|
2003
|
432,836
|
150,231
|
2,383
|
12,343
|
James
M. Kratochvil
Executive
Vice President, Chief Financial Officer, Treasurer and
Secretary
|
2005
|
$
293,373
|
$
192,422
|
—
|
$
11,685
|
2004
|
284,909
|
137,700
|
—
|
11,576
|
2003
|
278,867
|
96,577
|
1,356
|
10,151
|
R.
Brent Beeler
Executive
Vice President and Chief Operating Officer
|
2005
|
$
382,828
|
$
236,325
|
3,000
|
$
5,034
|
2004
|
345,995
|
156,503
|
—
|
4,028
|
2003
|
313,761
|
111,476
|
1,356
|
3,105
|
Randall
J. Hobson
President
- Closed Top Division
|
2005
|
$
177,805
|
$
95,900
|
1,256
|
$
3,021
|
2004
|
140,374
|
66,634
|
—
|
2,774
|
2003
|
133,662
|
46,734
|
432
|
2,733
|
G.
Adam Unfried
President
- Open Top Division
|
2005
|
$
183,447
|
$
90,420
|
1,256
|
$
3,262
|
2004
|
132,556
|
53,550
|
—
|
3,244
|
2003
|
107,436
|
35,471
|
432
|
2,660
|
__________________
(1)
Amounts
shown reflect contributions by the Company under the Company’s 401(k) plan and
the personal use of a Company vehicle.
Option
Grants Following the Acquisition
The
following table shows all grants of options to acquire shares of common stock
of
Berry Plastics Group made to the Named Executive Officers since the
Acquisition.
|
Individual
Grants
|
Exercise
Price($)
|
Expiration
Date
|
Potential
Realizable
Value
at Assumed
Rates
of Stock Price
Appreciation
for
Option
Term
|
Number
of
Securities
Underlying
Options
Granted
(#)
|
%
of Total
Options
Granted
to
Employees
per
Fiscal
Year
|
Name
|
5%($)
|
10%($)
|
|
|
|
|
|
|
|
Ira
Boots
(1)
|
12,141
|
2.4
|
100
|
9/19/2016
|
763,547
|
1,934,911
|
Ira
Boots
(2)
|
12,141
|
2.4
|
100
|
9/19/2016
|
763,547
|
1,934,911
|
Ira
Boots
(3)
|
12,141
|
2.4
|
100
|
9/19/2016
|
—
|
—
|
James
M. Kratochvil
(1)
|
6,954
|
1.4
|
100
|
9/19/2016
|
437,337
|
1,108,259
|
James
M. Kratochvil
(2)
|
6,954
|
1.4
|
100
|
9/19/2016
|
437,337
|
1,108,259
|
James
M. Kratochvil
(3)
|
6,954
|
1.4
|
100
|
9/19/2016
|
—
|
—
|
R.
Brent Beeler
(1)
|
6,954
|
1.4
|
100
|
9/19/2016
|
437,337
|
1,108,259
|
R.
Brent Beeler
(2)
|
6,954
|
1.4
|
100
|
9/19/2016
|
437,337
|
1,108,259
|
R.
Brent Beeler
(3)
|
6,954
|
1.4
|
100
|
9/19/2016
|
—
|
—
|
Randall
J. Hobson
(1)
|
4,560
|
0.9
|
100
|
9/19/2016
|
286,778
|
726,727
|
Randall
J. Hobson
(2)
|
4,560
|
0.9
|
100
|
9/19/2016
|
286,778
|
726,727
|
Randall
J. Hobson
(3)
|
4,560
|
0.9
|
100
|
9/19/2016
|
—
|
—
|
G.
Adam Unfried
(1)
|
4,560
|
0.9
|
100
|
9/19/2016
|
286,778
|
726,727
|
G.
Adam Unfried
(2)
|
4,560
|
0.9
|
100
|
9/19/2016
|
286,778
|
726,727
|
G.
Adam Unfried
(3)
|
4,560
|
0.9
|
100
|
9/19/2016
|
—
|
—
|
___________________
(1)
|
Represents
options granted on September 20, 2006, which (i) have an exercise
price
fixed at $100 per share, which was the fair market value of a share
of
Berry Plastics Group’s common stock on the date of grant, and (ii) vest
and become exercisable over a five year period beginning on January
1,
2007 and ending on the last day of 2011 based on continued service
with
the Company.
|
(2)
|
Represents
options granted on September 20, 2006, which (i) have an exercise
price
fixed at $100 per share, which was the fair market value of a share
of
Berry Plastics Group’s common stock on the date of grant, and (ii) vest
and become exercisable based on the achievement by Holdings of certain
financial targets, or if such targets are not achieved, based on
continued
service with the Company.
|
(3)
|
Represents
options granted on September 20, 2006, which (i) have an exercise
price
which commenced at $100 per share, which was the fair market value
of a
share of Berry Plastics Group’s common stock on the date of grant and will
increase at the rate of 15% per year during the term of the option,
and
(ii) vest and become exercisable over a five year period beginning
on
January 1, 2007 and ending on the last day of 2011 based on continued
service with the Company.
|
Employment
Agreements
In
connection with the Acquisition, Berry Plastics Corporation entered into
employment agreements with each of Messrs. Boots, Beeler, and Kratochvil that
supersede their previous employment agreements with Berry Plastics Corporation
and that expire on December 31, 2011. In addition, Messrs. Hobson and Unfried
entered into amendments to their existing employment agreements with Berry
Plastics Corporation that extend the terms of such agreements through December
31, 2011 (each of the agreements with Messrs. Boots, Beeler, Kratochvil, Hobson
and Unfried, as amended, an “Employment Agreement” and, collectively, the
“Employment Agreements”). The Employment Agreements provided for fiscal 2005
base compensation as disclosed in the “Summary Compensation Table” above.
Salaries are subject in each case to annual adjustment at the discretion of
the
Compensation Committee of the Board of Directors of Berry Plastics Corporation.
The Employment Agreements entitle each executive to participate in all other
incentive compensation plans established for executive officers of Holdings.
Holdings may terminate each Employment Agreement for “cause” or a “disability”
(as such terms are defined in the Employment Agreements). Specifically, if
any
of Messrs. Boots, Beeler, Kratochvil, Hobson, and Unfried is terminated by
Berry
Plastics Corporation without ‘‘cause’’ or resigns for ‘‘good reason’’ (as such
terms are defined in the
Employment
Agreements), that individual is entitled to: (1) the greater of (a) base salary
until the later of one year after termination or (b) 1/12 of 1 year’s base
salary for each year of employment up to 30 years with Berry Plastics
Corporation or a predecessor in interest (excluding Messrs. Hobson and Unfried
which would be entitled to (a) only) and (2) the pro rata portion of his annual
bonus. Each Employment Agreement also includes customary noncompetition,
nondisclosure and nonsolicitation provisions.
In
addition, in connection with each of the Employment Agreements, the Named
Executive Officers purchased Berry Plastics Group common stock, as described
under “ - Management Equity Buy-In”, and were granted options to purchase Berry
Plastics Group Common Stock, as described under “- Option Grants Following the
Acquisition.”
Management
Equity Buy-In
In
connection
with
the
Acquisition, members of our management team have made equity investments in
Berry Plastics Group through the purchase of common stock in Berry Plastics
Group. Such members of senior management and other employees have made their
equity investments in Berry Plastics Group by using a portion of the
compensation they received, or would have otherwise received, in connection
with
the Acquisition. The purchase price paid for their equity was based on the
purchase price paid by the Sponsors. The equity securities that they have
purchase are subject to restrictions on transfer, repurchase rights and other
limitations set forth in a stockholders agreement. See “Certain Relationships
and Related Party Transactions.” In total, our employees, including members of
our senior management team, own approximately 23% of the equity of Berry
Plastics Group on a fully diluted basis. We have made, and from time to time
in
the future we may make, secured loans to certain of our employees who are not
executive officers to finance the purchase of Berry Plastics Group common stock
by such employees.
2006
Equity
Incentive Plan
In
connection with the Acquisition, we have adopted an equity incentive plan for
the benefit of certain of our employees, which we refer to as the 2006 Equity
Incentive Plan. The purpose of the 2006 Equity Incentive Plan is to further
our
growth and success, to enable our directors, executive officers and employees
to
acquire shares of our common stock, thereby increasing their personal interest
in our growth and success, and to provide a means of rewarding outstanding
performance by such persons. Options granted under the 2006 Equity Incentive
Plan may not be assigned or transferred, except to us or by will or the laws
of
descent or distribution. The 2006 Equity Incentive Plan will terminate ten
years
after its adoption and no options may be granted under the plan thereafter.
The
2006 Equity Incentive Plan allows for the issuance of non-qualified options,
options intended to qualify as “incentive stock options” within the meaning of
the Internal Revenue Code of 1986, as amended, and stock appreciation rights.
The
employees participating in the 2006 Equity Incentive Plan will receive options
and stock appreciation rights under the 2006 Equity Incentive Plan pursuant
to
individual option and stock appreciation rights agreements, the terms and
conditions of which will be substantially identical. Each option agreement
will
provide for the issuance of options to purchase common stock of Berry Plastics
Group.
As
of
September 30, 2006, there were outstanding options to purchase 494,720 shares
of
Berry Plastics Group common stock and stock appreciation rights with respect
to
5,464 shares of Berry Plastics Group common stock.
We
will
make cash payments to Berry Plastics Group to enable it to pay any
(i) federal, state or local income taxes to the extent that such income
taxes are directly attributable to our and our subsidiaries’ income,
(ii) franchise taxes and other fees required to maintain Berry Plastics
Group’s legal existence and (iii) corporate overhead expenses incurred in
the ordinary course of business and salaries or other compensation of employees
who perform services for both Berry Plastics Group and us.
In
connection with the Acquisition, the Sponsors and certain of our employees
who
invested in Berry Plastics Group entered into a stockholders agreement. The
stockholders agreement provides for, among other things, a restriction on the
transferability of each such person’s equity ownership in us, tag-along rights,
drag-along rights, piggyback registration rights and repurchase rights by us
in
certain circumstances.
The
Sponsors have entered into a management agreement with us and Berry Plastics
Group relating to the provision of certain financial and strategic advisory
services and consulting services. We pay the Sponsors an
annual management fee equal to the greater of $3.0 million and 1.25%
of our Adjusted EBITDA, as defined in the indenture, and reimburse the Sponsors
for out-of-pocket expenses incurred in the performance of their obligations
under the agreement. We have agreed to indemnify the Sponsors and each of their
affiliates and their directors, officers and representatives for losses relating
to the services contemplated by the management agreement. The
management agreement expires on December 31, 2012, subject to automatic yearly
extensions unless terminated by any party upon prior notice. In
addition, the Sponsors have the right to terminate the agreement at any time,
in
which case the Sponsors will receive additional consideration equal to the
present value of $21 million less the aggregate amount of annual management
fees
previously paid to the Sponsors and the employee stockholders will receive
a
payment based on such amount. We paid the Sponsors a fee of $20.0 million
for services rendered in connection with the Acquisition and reimbursed the
Sponsors for certain expenses incurred in rendering those services.
We
are a
wholly-owned subsidiary of Berry Plastics Group. The following table sets
forth
certain information regarding the beneficial ownership of the common stock,
of
Berry Plastics Group with respect to each person that is a beneficial owner
of
more than 5% of its outstanding common stock and beneficial ownership of
its
common stock by each director and each executive officer named in the Summary
Compensation Table and all directors and executive officers as a group as
of
September 20, 2006:
Name
and Address of Owner
(1)
|
|
Number
of Shares of
Common
Stock
(1)
|
Percent
of Class
|
Apollo
Investment Fund VI, L.P.
(2)
|
|
3,559,930
|
|
72.1
|
%
|
AP
Berry Holdings, LLC
(3)
|
|
1,641,269
|
|
33.3
|
%
|
Graham
Berry Holdings, LP
(4)
|
|
500,000
|
|
10.1
|
%
|
Ira
G. Boots
(5)
|
|
119,395
|
|
2.4
|
%
|
R.
Brent Beeler
(5)
|
|
68,010
|
|
1.4
|
%
|
James
M. Kratochvil
(5)
|
|
67,787
|
|
1.4
|
%
|
Anthony
M. Civale
(6),(7)
|
|
1,334
|
|
*
|
|
Patrick
J. Dalton
(6),(7)
|
|
1,334
|
|
*
|
|
Donald
C. Graham
(6),(8)
|
|
1,334
|
|
*
|
|
Steven
C. Graham
(6),(8)
|
|
1,334
|
|
*
|
|
Joshua
J. Harris
(6),(7)
|
|
1,334
|
|
*
|
|
Robert
V. Seminara
(6),(7)
|
|
1,334
|
|
*
|
|
All
directors and executive officers
as
a group (9 persons)
(6)
|
|
263,196
|
|
5.3
|
%
|
*
Less
than 1% of common stock outstanding.
(1)
|
The
amounts and percentages of common stock beneficially owned are reported
on
the basis of regulations of the SEC governing the determination of
beneficial ownership of securities. Under the rules of the SEC, a
person
is deemed to be a “beneficial owner” of a security if that person has or
shares voting power, which includes the power to vote or direct the
voting
of such security, or investment power, which includes the power to
dispose
of or to direct the disposition of such security. A person is also
deemed
to be a beneficial owner of any securities of which that person has
a
right to acquire beneficial ownership within 60 days. Securities
that can
be so acquired are deemed to be outstanding for purposes of computing
such
person’s ownership percentage, but not for purposes of computing any other
person’s percentage. Under these rules, more than one person may be deemed
beneficial owner of the same securities and a person may be deemed
to be a
beneficial owner of securities as to which such person has no economic
interest. Except as otherwise indicated in these footnotes, each
of the
beneficial owners has, to our knowledge, sole voting and investment
power
with respect to the indicated shares of common
stock.
|
(2)
|
Represents
all equity interests of Berry Plastics Group held of record by controlled
affiliates of Apollo Investment Fund VI, L.P., including AP Berry
Holdings, LLC and BPC Co-Investment Holdings, LLC. Apollo Management
VI,
L.P. has the voting and investment power over the shares held on
behalf of
Apollo. Each of Messrs. Civale,
|
|
Dalton,
Harris, and Seminara, who have relationships with Apollo, disclaim
beneficial ownership of any shares of Berry Plastics Group that may
be
deemed beneficially owned by Apollo Management VI, L.P., except to
the
extent of any pecuniary interest therein. Each of Apollo Management
VI,
L.P., AP Berry Holdings, LLC and its affiliated investment funds
disclaims
beneficial ownership of any such shares in which it does not have
a
pecuniary interest. The address of Apollo Management VI, L.P., Apollo
Investment Fund VI, L.P., and AP Berry Holdings LLC is c/o Apollo
Management, L.P., 9 West 57th Street, New York, New York
10019.
|
(3)
|
The
address of AP Berry Holdings LLC is c/o Apollo Management, L.P.,
9 West
57th Street, New York, New York 10019.
|
(4)
|
Represents
all equity interests of Berry Plastics Group held of record by controlled
affiliates of Graham Berry Holdings, LLC. Graham Partners II, L.P.
has the
voting and investment power over the shares held by Graham Berry
Holdings,
LLC. Each of Messrs. Steven Graham and Donald Graham, who have
relationships with Graham Partners II, L.P., disclaim beneficial
ownership
of any shares of Berry Plastics Group that may be deemed beneficially
owned by Graham Partners II, L.P. except to the extent of any pecuniary
interest therein. Each of Graham Partners II, L.P. and its affiliates
disclaims beneficial ownership of any such shares in which it does
not
have a pecuniary interest. The address of Graham Partners II, L.P.
and
Graham Berry Holdings, LLC is 3811 West Chester Pike, Building 2,
Suite
200 Newton Square, Pennsylvania 19073.
|
(5)
|
The
address of Messrs. Boots, Beeler and Kratochvil is c/o Berry Plastics
Holding Corporation, 101 Oakley Street, Evansville, Indiana
47710
|
(6)
|
Includes
1,334 shares underlying options that are vested or scheduled to vest
within 60 days of September 20, 2006 for each of Messrs. Civale,
Dalton,
Donald Graham, Steven Graham, Harris and
Seminara.
|
(7)
|
The
address of Messrs. Civale, Harris, Seminara and Dalton is c/o Apollo
Management, L.P., 9 West 57th Street, New York, New York
10019.
|
(8)
|
The
address of Messrs. Steven Graham and Donald Graham is c/o Graham
Partners
II, L.P. is 3811 West Chester Pike, Building 2, Suite 200 Newton
Square,
Pennsylvania 19073.
|
Senior
Secured Credit Facilities
Our
senior secured credit facilities are provided by a syndicate of banks and
other
financial institutions. Our senior secured credit facilities provides financing
of up to $875.0 million, consisting of:
·
|
$675.0
million in term B loans that mature on September 20, 2013, all of
which
has been drawn in connection with the consummation of the Acquisition;
and
|
·
|
a
$200.0 million revolving credit facility, that matures on September
20,
2012, $20.0 million of which has been drawn in connection with the
consummation of the Acquisition, which includes borrowing capacity
available for letters of credit and for borrowings on same-day notice,
referred to as swingline loans.
|
Interest
Rate and Fees
The
interest rates per annum applicable to loans under our senior secured credit
facilities are, at our option, equal to either an alternate base rate or
an
adjusted LIBOR rate for a one-, two-, three- or six-month interest period,
or a
nine- or twelve-month period, if available from all relevant lenders, in
each
case, plus an applicable margin. The alternate base rate means the greater
of
(i) Credit Suisse’s prime rate and (ii) one-half of 1.0% over the
weighted average of rates on overnight Federal Funds as published by the
Federal
Reserve Bank of New York. The Adjusted LIBOR rate is determined by reference
to
settlement rates established for deposits in dollars in the London interbank
market for a period equal to the interest period of the applicable loan and
the
maximum reserve percentages established by the Board of Governors of the
U.S.
Federal Reserve to which our lenders are subject.
In
addition to paying interest on outstanding principal under our senior secured
credit facilities, we are required to pay a commitment fee to the lenders
under
the revolving credit facility in respect of the unutilized commitments
thereunder at a rate equal to 0.50% per annum (subject to reduction upon
attainment of certain leverage ratios). We also pay customary letter of credit
and agency fees.
Prepayments
Our
senior secured credit facilities requires us to prepay outstanding term loans,
subject to certain exceptions, with:
·
|
beginning
with our first full fiscal year after the closing, 50% (which percentage
is subject to a minimum of 0% upon the achievement of certain leverage
ratios) of excess cash flow (as defined in the credit agreement)
less the
amount of certain voluntary prepayments as described in the credit
agreement;
|
·
|
so
long as our total net first lien leverage ratio is above a certain
threshold, 100% of the net cash proceeds of any incurrence of debt
other
than excluded debt issuances (as defined in the credit agreement);
and
|
·
|
so
long as our total net first lien leverage ratio is above a certain
threshold, 100% of the net cash proceeds of all non-ordinary course
asset
sales and casualty and condemnation events, if we do not reinvest
or
commit to reinvest those proceeds
|
·
|
in
assets to be used in our business or to make certain other permitted
investments within 15 months.
|
We
may
voluntarily repay outstanding loans under the senior secured credit facilities
at any time without premium or penalty, other than customary “breakage” costs
with respect to eurocurrency loans.
Amortization
The
term
B loans amortize each year in an amount equal to 1% per annum in equal
quarterly installments for the first six years and nine months, with the
remaining amount payable on September 20, 2013.
Principal
amounts outstanding under the revolving credit facility will be due and payable
in full on September 20, 2012.
Guarantee
and Security
All
obligations under our senior secured credit facilities are unconditionally
guaranteed by Berry Plastics Group and, subject to certain exceptions, each
of
our existing and future direct and indirect domestic subsidiaries, which
we
refer to collectively as “U.S. Guarantors.”
All
obligations under our senior secured credit facilities, and the guarantees
of
those obligations (as well as any interest-hedging or other swap agreements),
are secured by substantially all of our assets as well as those of Berry
Plastics Group and each U.S. Guarantor, including, but not limited to, the
following and subject to certain exceptions:
·
|
a
first priority pledge of all of our equity interests by Holdings,
a pledge
of 100% of the equity interests of all U.S. Guarantors and a first
priority pledge of 65% of the vo
ting
equity interests of certain of our foreign subsidiaries; and
|
·
|
a
first priority security interest in substantially all of our tangible
and
intangible assets as well as those of Berry Plastics Group and each
U.S.
Guarantor.
|
Certain
Covenants and Events of Default
The
senior secured credit facilities contains customary covenants that, among
other
things, restrict, subject to certain exceptions, our ability, and the ability
of
our subsidiaries, to incur indebtedness, sell assets, make investments, engage
in acquisitions, mergers or consolidations and make dividend and other
restricted payments.
In
addition, the senior secured credit facilities requires us to maintain a
maximum
total net first lien leverage ratio.
The
senior secured credit facilities also contains certain customary affirmative
covenants and events of default.
Senior
Subordinated Notes
Pursuant
to a note purchase agreement (the “Senior Subordinated Note Purchase Agreement”)
and a related Indenture, we have issued $425.0 million in aggregate
principal amount of senior subordinated notes to Goldman in a private placement
that is exempt from registration under the Securities Act. The senior
subordinated notes are unsecured, senior
subordinated
obligations and are guaranteed on an unsecured, senior subordinated basis
by
each of our subsidiaries that guarantees our senior secured credit facilities
and the outstanding notes which we are hereby offering to exchange for the
exchange notes. The senior subordinated notes will mature in 2016.
The
senior subordinated notes bear interest at a rate of 11% per annum. Such
interest is payable quarterly in cash;
provided,
however
,
that on
any quarterly interest payment date on or prior to the third anniversary
of the
issuance of the senior subordinated notes, we may elect to pay up to 3% of
the
interest payable on such date by capitalizing such interest and adding it
to the
outstanding principal amount of the senior subordinated notes. After the
third
anniversary of the issuance of the senior subordinated notes, all interest
on
the senior subordinated notes will be payable only in cash.
The
senior subordinated notes may be redeemed at our option under circumstances
and
at redemption prices set forth in the Indenture governing the senior
subordinated notes. Upon the occurrence of a change of control, we are required
to offer to repurchase all of the senior subordinated notes. Such Indenture
sets
forth covenants and events of default that are substantially similar to those
set forth in the Indenture governing the outstanding notes which we are hereby
offering to exchange for the exchange notes. The Senior Subordinated Note
Purchase Agreement contains additional affirmative covenants and certain
customary representations, warranties and conditions.
The
terms
of the exchange notes and the outstanding notes are identical in all material
respects, except:
·
|
the
exchange notes will have been registered under the Securities
Act;
|
·
|
the
exchange notes will not contain transfer restrictions and registration
rights that relate to the outstanding notes;
and
|
·
|
the
exchange notes will not contain provisions relating to the payment
of
additional interest to the holders of the outstanding notes under
the
circumstances related to the timing of the exchange
offer.
|
Any
outstanding notes that remain outstanding after the exchange offer, together
with the exchange notes issued in the exchange offer, will be treated as
a
single class of securities for voting purposes under the applicable Indenture
under which they were issued. You can find the definitions of certain terms
used
in this description under the subheading “Certain Definitions.” In this
description, the words “Issuer” and “we,” “us” and “our” mean Holdings, a
Delaware corporation, and not any of its subsidiaries. References to the
“notes”
refer to the outstanding and exchange notes.
We
issued
$750.0 million in aggregate principal amount of the outstanding notes to
the
initial purchasers on September 20, 2006. The initial purchasers sold the
outstanding notes to “qualified institutional buyers,” as defined in Rule 144A
under the Securities Act. The terms of the exchange notes are substantially
identical to the terms of the outstanding notes. However, the exchange notes
are
not subject to transfer restrictions, registration rights or additional interest
provisions unless held by certain broker-dealers, affiliates of Holdings
or
certain other persons. See “The Exchange Of
fer―Transferability
of the Exchange Notes.”
In
addition, we do not plan to list the exchange notes on any securities exchange
or seek quotation on any automated quotation system. The outstanding notes
are
traded on Nasdaq’s PORTAL system.
For
purposes of this summary, the term “notes” refers to both the outstanding notes
and the exchange notes.
The
following description is a summary of the material provisions of the Indenture.
It does not restate the Indenture in its entirety. We urge you to read the
Indenture because it, and not this description, define your rights as holders
of
the notes. Copies of the Indenture are available upon request to us at the
address indicated under “Where You Can Find More Information About Us.” Certain
defined terms used in this description but not defined below under “Certain
Definitions” have the meanings assigned to them in the Indenture.
The
registered holder of a note will be treated as the owner of it for all purposes.
Only registered holders will have rights under the Indenture.
General
The
outstanding notes are and the exchange notes will be issued under an Indenture
(the “Indenture”), dated as of September 20, 2006, among the Issuer, the Note
Guarantors, and Wells Fargo Bank, N.A., as Trustee. Copies of the Indenture
may
be obtained from the Issuer upon request.
The
following summary of certain provisions of the Indenture, the notes and the
Registration Rights Agreement does not purport to be complete and is subject
to,
and is qualified in its entirety by reference to, all the provisions of the
Indenture and the Registration Rights Agreement, including the definitions
of
certain terms therein and those terms made a part
thereof
by the TIA. Capitalized terms used in this “Description of the Notes” section
and not otherwise defined have the meanings set forth in the section “—Certain
Definitions.”
We
will
issue the exchange notes with an initial aggregate principal amount of $750.0
million, comprised of $525.0 million in initial aggregate principal amount
of fixed rate notes (the “fixed rate notes”) and $225.0 million in initial
aggregate principal amount of floating rate notes (the “floating rate notes”).
The Issuer may issue additional notes from time to time after this offering.
Any
offering of additional notes is subject to the covenants described below
under
the caption “—Certain Covenants—Limitation on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock” and “—Certain
Covenants—Liens.” The fixed rate notes and any additional fixed rate notes
subsequently issued under the Indenture will be treated as a single class
for
all purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase. Unless the context otherwise
requires, for all purposes of the Indenture and this “Description of the Notes,”
references to the fixed rate notes include any additional fixed rate notes
actually issued. The floating rate notes and any additional floating rate
notes
subsequently issued under the Indenture will be treated as a single class
for
all purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase. Unless the context otherwise
requires, for all purposes of the Indenture and this “Description of the Notes,”
references to the floating rate notes include any additional floating rate
notes
actually issued.
Principal
of, premium, if any, and interest on the notes will be payable, and the notes
may be exchanged or transferred, at the office or agency designated by the
Issuer (which initially shall be the principal corporate trust office of
the
Trustee).
The
notes
will be issued only in fully registered form, without coupons, in minimum
denominations of $2,000 and any integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of notes, but the
Issuer may require payment of a sum sufficient to cover any transfer tax
or
other similar governmental charge payable in connection therewith.
References
herein to the notes include the fixed rate notes and the floating rate notes.
However, the fixed rate notes and the floating rate notes are two separate
series of notes under the Indenture for purposes of, among other things,
payments of principal and interest, rescinding certain Events of Default
and
consenting to certain amendments to the Indenture and the notes.
Terms
of the Notes
Fixed
Rate Notes
The
fixed
rate notes, which are senior obligations of the Issuer, have the benefit
of the
second-priority security interest in the Collateral described below under
“—Security for the Notes” and mature on September 15, 2014. Each fixed rate
note bears interest at a rate per annum of 8
7
/
8
%
from
September 20, 2006 or from the most recent date to which interest has been
paid
or provided for, payable semiannually to holders of record at the close of
business on March 1 or September 1 immediately preceding the interest
payment date on March 15 and September 15 of each year, commencing
March 15, 2007.
Floating
Rate Notes
The
floating rate notes, which are senior obligations of the Issuer, have the
benefit of the second-priority security interest in the Collateral described
below under “—Security for the Notes” and mature on September 15, 2014.
Interest on the floating rate notes accrues at a rate per annum, reset
quarterly, equal to LIBOR plus 3.875%, as determined by the calculation agent
(the “Calculation Agent”), which initially is the Trustee. Interest on the
floating rate notes will be payable quarterly in arrears on March 15,
June 15, September 15 and December 15, commencing on
December 15, 2006. The Issuer will make each interest payment to the
holders of record of the floating rate notes on the immediately preceding
March 1, June 1, September 1 and December 1. Interest on the
floating rate notes accrues from the September 20, 2006.
The
amount of interest for each day that the floating rate notes are outstanding
(the “Daily Interest Amount”) is calculated by dividing the interest rate in
effect for such day by 360 and multiplying the result by the principal amount
of
the floating rate notes. The amount of interest to be paid on the floating
rate
notes for each Interest Period is calculated by adding the Daily Interest
Amounts for each day in the Interest Period.
All
percentages resulting from any of the above calculations are rounded, if
necessary, to the nearest one hundred thousandth of a percentage point, with
five one-millionths of a percentage point being rounded upwards (
e.g.
,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all
dollar
amounts used in or resulting from such calculations are rounded to the nearest
cent (with one-half cent being rounded upwards).
The
interest rate on the floating rate notes will in no event be higher than
the
maximum rate permitted by New York law as the same may be modified by U.S.
law
of general application.
The
Calculation Agent will, upon the request of any holder of floating rate notes,
provide the interest rate then in effect with respect to the floating rate
notes. All calculations made by the Calculation Agent in the absence of manifest
error are conclusive for all purposes and binding on the Issuer, the Note
Guarantors and the holders of the floating rate notes.
Optional
Redemption
Fixed
Rate Notes
On
or
after September 15, 2010, the Issuer may redeem the fixed rate notes at its
option, in whole at any time or in part from time to time, upon not less
than 30
nor more than 60 days’ prior notice mailed by first-class mail to each holder’s
registered address, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and additional
interest, if any, to the redemption date (subject to the right of holders
of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing
on
September 15 of the years set forth below:
Period
|
Redemption Price
|
2010
|
104.438%
|
2011
|
102.219%
|
2012
and thereafter
|
100.000%
|
|
|
|
|
In
addition, prior to September 15, 2010, the Issuer may redeem the fixed rate
notes at its option, in whole at any time or in part from time to time, upon
not
less than 30 nor more than 60 days’ prior notice mailed by first-class mail to
each holder’s registered address, at a redemption price equal to 100% of the
principal amount of the fixed rate notes redeemed plus the Applicable Premium
as
of, and accrued and unpaid interest and additional interest, if any, to,
the
applicable redemption date (subject to the right of holders of record on
the
relevant record date to receive interest due on the relevant interest payment
date).
Notwithstanding
the foregoing, at any time and from time to time on or prior to
September 15, 2009, the Issuer may redeem in the aggregate up to 35% of the
original aggregate principal amount of the fixed rate notes (calculated after
giving effect to any issuance of additional fixed rate notes) with the net
cash
proceeds of one or more Equity Offerings (1) by the Issuer or (2) by
any direct or indirect parent of the Issuer, in each case to the extent the
net
cash proceeds thereof are contributed to the common equity capital of the
Issuer
or used to purchase Capital Stock (other than Disqualified Stock) of the
Issuer
from it, at a redemption price (expressed as a percentage of principal
amount thereof) of 108.875%, plus accrued and unpaid interest and additional
interest, if any, to the redemption date (subject to the right of holders
of
record on the relevant record date to receive interest due on the relevant
interest payment date);
provided
,
however
,
that at
least 65% of the original aggregate principal amount of the fixed rate notes
(calculated after giving effect to any issuance of additional fixed rate
notes)
remain outstanding after each such redemption;
provided
,
further
,
that
such redemption shall occur within 90 days after the date on which any such
Equity Offering is consummated upon not less than 30 nor more than 60 days’
notice mailed to each holder of fixed rate notes being redeemed and otherwise
in
accordance with the procedures set forth in the Indenture.
Notice
of
any redemption upon any Equity Offering may be given prior to the completion
thereof, and any such redemption or notice may, at the Issuer’s discretion, be
subject to one or more conditions precedent, including, but not limited to,
completion of the related Equity Offering.
Floating
Rate Notes
On
or
after September 15, 2008, the Issuer may redeem the floating rate notes at
its option, in whole at any time or in part from time to time, upon not less
than 30 nor more than 60 days’ prior notice mailed by first-class mail to each
holder’s registered address, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and additional
interest, if any, to the redemption date (subject to the right of holders
of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the twelve-month period commencing
on
September 15 of the years set forth below:
Period
|
Redemption Price
|
2008
|
102.000%
|
2009
|
101.000%
|
2010
and thereafter
|
100.000%
|
|
|
Notwithstanding
the foregoing, at any time and from time to time on or prior to
September 15, 2008, the Issuer may redeem in the aggregate up to 35% of the
original aggregate principal amount of the floating rate notes (calculated
after
giving
effect
to any issuance of additional floating rate notes) with the net cash proceeds
of
one or more Equity Offerings (1) by the Issuer or (2) by any direct or
indirect parent of the Issuer, in each case to the extent the net cash proceeds
thereof are contributed to the common equity capital of the Issuer or used
to
purchase Capital Stock (other than Disqualified Stock) of the Issuer from
it, at
a redemption price (expressed as a percentage of principal amount thereof)
of
100% plus a premium (expressed as a percentage of principal amount thereof)
equal to the interest rate per annum on the floating rate notes applicable
on
the date on which notice of redemption is given, plus accrued and unpaid
interest and additional interest, if any, to the redemption date (subject
to the
right of holders of record on the relevant record date to receive interest
due
on the relevant interest payment date);
provided
,
however
,
that at
least 65% of the original aggregate principal amount of the floating rate
notes
(calculated after giving effect to any issuance of additional floating rate
notes) must remain outstanding after each such redemption; provided, further,
that such redemption shall occur within 90 days after the date on which any
such
Equity Offering is consummated upon not less than 30 nor more than 60 days’
notice mailed to each holder of floating rate notes being redeemed and otherwise
in accordance with the procedures set forth in the Indenture.
Notice
of
any redemption upon any Equity Offering may be given prior to the completion
thereof, and any such redemption or notice may, at the Issuer’s discretion, be
subject to one or more conditions precedent, including, but not limited to,
completion of the related Equity Offering.
In
the
case of any partial redemption, selection of fixed rate notes or floating
rate
notes, as the case may be, for redemption will be made by the Trustee on
a pro
rata basis to the extent practicable;
provided
that no
notes of $2,000 or less shall be redeemed in part. If any note is to be redeemed
in part only, the notice of redemption relating to such note shall state
the
portion of the principal amount thereof to be redeemed. A new note in 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 so long as the Issuer has deposited with the Paying
Agent
funds sufficient to pay the principal of, plus accrued and unpaid interest
and
additional interest (if any) on, the notes to be redeemed.
Mandatory
Redemption; Offers to Purchase; Open Market Purchases
The
Issuer is not required to make any mandatory redemption or sinking fund payments
with respect to the notes. However, under certain circumstances, the Issuer
may
be required to offer to purchase notes as described under the captions “—Change
of Control” and “—Certain Covenants—Asset Sales.” We may at any time and from
time to time purchase notes in the open market or otherwise.
Ranking
The
indebtedness evidenced by the notes is senior Indebtedness of the Issuer,
is
equal in right of payment to all existing and future Pari Passu Indebtedness
of
the Issuer, has the benefit of the second-priority security interest in the
Collateral described below under “—Security for the Notes” and is senior in
right of payment to all existing and future Subordinated Indebtedness of
the
Issuer. Pursuant to the Security Documents and the Intercreditor
Agreement,
the security interests securing the notes is second in priority (subject
to
Permitted Liens and to exceptions described under “—Security for the Notes”) to
all security interests at any time granted to secure First Priority Lien
Obligations.
The
indebtedness evidenced by the note guarantees is senior Indebtedness of the
applicable Note Guarantor, is equal in right of payment to all existing and
future Pari Passu Indebtedness of such Note Guarantor, has the benefit of
the
second-priority security interest in the Collateral described below under
“—Security for the Notes” and is senior in right of payment to all existing and
future Subordinated Indebtedness of such Note Guarantor. Pursuant to the
Security Documents and the Intercreditor Agreement, the security interests
securing the note guarantees is second in priority (subject to Permitted
Liens,
including exceptions described under “—Security for the Notes”) to all security
interests at any time granted to secure First Priority Lien Obligations.
As
of
September 20, 2006:
(1)
the
Issuer and its Subsidiaries had $720.4 million of Secured Indebtedness
outstanding (excluding $165.1 million of availability under the revolving
credit facility) constituting First Priority Lien Obligations (as defined
in
this “Description of the Notes”);
(2)
the
Issuer and its Subsidiaries had $1,470.4 million of Secured Indebtedness
outstanding (excluding $165.1 million of availability under the revolving
credit facility); and
(3)
the
Issuer and its Subsidiaries had $425.0 million of Subordinated Indebtedness
outstanding consisting of the Senior Subordinated Notes.
Although
the Indenture limits the Incurrence of Indebtedness by the Issuer and its
Restricted Subsidiaries and the issuance of Disqualified Stock and Preferred
Stock by the Restricted Subsidiaries, such limitation is subject to a number
of
significant qualifications and exceptions. Under certain circumstances, the
Issuer and its Subsidiaries may be able to Incur substantial amounts of
Indebtedness. Such Indebtedness may be Secured Indebtedness constituting
First
Priority Lien Obligations. See “—Certain Covenants—Limitation on Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock.”
A
significant portion of the operations of the Issuer are conducted through
its
Subsidiaries. Unless a Subsidiary is a Note Guarantor, claims of creditors
of
such Subsidiary, including trade creditors, and claims of preferred stockholders
(if any) of such Subsidiary generally will have priority with respect to
the
assets and earnings of such Subsidiary over the claims of creditors of the
Issuer, including holders of the notes. The notes, therefore, are effectively
subordinated to creditors (including trade creditors) and preferred stockholders
(if any) of Subsidiaries of the Issuer that are not Note Guarantors. The
Issuer’s Subsidiaries that are not Note Guarantors had $56.5 million of total
liabilities outstanding as of July 1, 2006.
See
“Risk
Factors—Risk Factors Related to an Investment in the Notes.”
Security
for the Notes
The
notes
and the Note Guarantees are secured by second-priority security interests
(subject to Permitted Liens) in the Collateral and the floating rate notes
and
the fixed rate notes share in the benefit of such security interest based
on the
respective amounts of the Obligations thereunder. The Collateral consists
of
substantially all of the property and assets, in each case, that are held
by the
Issuer or any of the Note Guarantors, to the extent that such assets secure
the
First Priority Lien Obligations and to the extent that a second-priority
security interest is able to be granted or perfected therein, subject to
the
exceptions described below. The initial
Collateral
does not include (i) any property or assets owned by any Foreign
Subsidiaries and two of the Issuer’s U.S. Subsidiaries, (ii) any license,
contract or agreement of the Issuer or any of the Note Guarantors, if and
only
for so long as the grant of a security interest under the
Security
Documents would result in a breach or default under, or abandonment,
invalidation or unenforceability of, that license, contract or agreement,
(iii) any securities or other equity interests of any of the Issuer’s
Subsidiaries, (iv) any vehicle, (v) any bank accounts, securities
accounts or cash, (vi) any real property held by the Issuer or any of the
Issuer’s Subsidiaries under a lease and (vii) certain other exceptions described
in the Security Documents. Except for securities or other equity interests
of
certain of our Domestic Subsidiaries or “first-tier” Foreign Subsidiaries, the
foregoing excluded property and assets do not secure the First Priority Lien
Obligations. The security interests securing the notes are second in priority
to
any and all security interests at any time granted to secure the First Priority
Lien Obligations and are also subject to all other Permitted Liens. The First
Priority Lien Obligations include Secured Bank Indebtedness and related
obligations, as well as certain Hedging Obligations and certain other
obligations in respect of cash management services. The Person holding such
First Priority Lien Obligations may have rights and remedies with respect
to the
property subject to such Liens that, if exercised, could adversely affect
the
value of the Collateral or the ability of the First Lien Agent to realize
or
foreclose on the Collateral on behalf of holders of the notes.
The
Issuer and the Note Guarantors are able to incur additional indebtedness
in the
future that could share in the Collateral, including additional First Priority
Lien Obligations and additional Indebtedness that would be secured on a
second-priority basis with the notes. The amount of such First Priority Lien
Obligations and additional Indebtedness is limited by the covenants described
under “—Certain Covenants—Liens” and “—Certain Covenants—Limitation on
Incurrence of Indebtedness and Issuances of Disqualified Stock and Preferred
Stock.” Under certain circumstances, the amount of such First Priority Lien
Obligations and additional Indebtedness could be significant.
Post-Acquisition
Collateral
From
September 20, 2006, subject to certain limitations and exceptions (including
the
exclusion of any securities or other equity interests of any of the Issuer’s
Subsidiaries), if the Issuer or any Note Guarantor creates any additional
security interest upon any property or asset to secure any First Priority
Lien
Obligations (which include Obligations in respect of the Credit Agreement),
it
must concurrently grant a second priority security interest (subject to
Permitted Liens, including the first priority lien that secures obligations
in
respect of the First Priority Lien Obligations) upon such property as security
for the notes. Also, if granting a security interest in such property requires
the consent of a third party, the Issuer will use commercially reasonable
efforts to obtain such consent with respect to the second priority security
interest for the benefit of the Trustee on behalf of the holders of the Notes.
If such third party does not consent to the granting of the second priority
security interest after the use of such commercially reasonable efforts,
the
applicable entity will not be required to provide such security interest.
Security
Documents and Intercreditor Agreement
The
Issuer, the Note Guarantors and the Trustee have entered into the Security
Documents defining the terms of the security interests that secure the notes
and
the Note Guarantees. These security interests secure the payment and performance
when due of all of the Obligations of the Issuer and the Note Guarantors
under
the notes, the Indenture, the Note Guarantees and the Security Documents,
as
provided in the Security Documents.
The
Trustee, the First Lien Agent, the Issuer, the Note Guarantors and Berry
Plastics Group have entered into the Intercreditor Agreement, which may be
amended from time to time to add other parties holding Other Second-Lien
Obligations and other First Priority Lien Obligations permitted to be incurred
under the Indenture. The First Lien Agent is initially the
administrative
agent under the Credit Agreement. Pursuant to the terms of the Intercreditor
Agreement, at any time prior to the Discharge of Senior Lender Claims, the
First
Lien Agent determines the time and method by which the security interests
in the
Collateral are enforced. The Trustee is not permitted to enforce the security
interests even if an Event of Default under the Indenture has occurred and
the
notes have been accelerated except (a) in any insolvency or liquidation
proceeding, as necessary to file a proof of claim or statement of interest
with
respect to such notes or (b) as necessary to take any action in order to
create, prove, perfect, preserve or protect (but not enforce) its rights
in, and
the perfection and priority of its Lien on, the Collateral securing the second
priority Liens. See “Risk Factors—Risk Factors Related to an Investment in the
Notes—The collateral securing the notes is subject to control by creditors with
first priority liens. If there is a default, the value of the collateral
may not
be sufficient to repay both the first priority creditors and the holders
of the
notes.” After the Discharge of Senior Lender Claims, the Trustee in accordance
with the provisions of the Indenture and the Security Documents will distribute
all cash proceeds (after payment of the costs of enforcement and collateral
administration and any other amounts owed to the Trustee) of the Collateral
received by it under the Security Documents for the ratable benefit of the
holders of the notes and holders of Other Second-Lien Obligations. The proceeds
from the sale of the Collateral remaining after the satisfaction of all First
Priority Lien Obligations may not be sufficient to satisfy the obligations
owed
to the holders of the notes. By its nature some or all of the Collateral
is and
will be illiquid and may have no readily ascertainable market value.
Accordingly, the Collateral may not be able to be sold in a short period
of
time, if salable. See “Risk Factors—Risk Factors Related to an Investment in the
Notes—It may be difficult to realize the value of the collateral securing the
notes.”
In
addition, the Intercreditor Agreement provides that, prior to the Discharge
of
Senior Lender Claims, (1) the holders of First Priority Lien Obligations
and the First Lien Agent shall have the exclusive right to make determinations
regarding the release of Collateral without the consent of the holders of
the
notes, (2) the Intercreditor Agreement may be amended, without the consent
of the Trustee and the holders of the notes, to add additional secured creditors
holding Other Second-Lien Obligations so long as such Other Second-Lien
Obligations are not prohibited by the provisions of the Credit Agreement
or the
Indenture and (3) the holders of the First Priority Lien Obligations may
change, waive, modify or vary the Security Documents without the consent
of the
holders of the notes, provided that any such change, waiver or modification
does
not materially adversely affect the rights of the holders of the notes and
not the other secured creditors in a like or similar manner. Any provider
of
additional extensions of credit shall be entitled to rely on the determination
of officers that such modifications do not expressly violate the provisions
of
the Credit Agreement or the Indenture if such determination is set forth
in an
Officers’ Certificate delivered to such provider; provided, however, that such
determination will not affect whether or not the Issuer has complied with
its
undertakings in the Indenture, the Security Documents or the Intercreditor
Agreement.
In
addition, if the Issuer or any Note Guarantor is subject to any insolvency
or
liquidation proceeding, the Trustee and the holders will agree that:
(1)
|
if
the First Lien Agent shall desire to permit the use of cash collateral
or
to permit the Issuer or any Note Guarantor to obtain financing under
Section 363 or Section 364 of Title 11 of the United States Code
or any similar provision in any Bankruptcy Law (“DIP
Financing”),
then
the Trustee and the holders agree not to
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|
object
to such use of cash collateral or DIP Financing and will not request
adequate protection or any other relief in connection therewith (except
to
the extent permitted by the clause 5 below) and, to the extent the
Liens
securing the First Priority Lien Obligations are subordinated or
pari
passu with such DIP Financing, will subordinate its Liens in the
Collateral to such DIP Financing (and all Obligations relating thereto)
on
the same basis as they are subordinated to the First Priority Lien
Obligations;
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(2)
|
they
will not object to, and will not otherwise contest any motion for
relief
from the automatic stay or from any injunction against foreclosure
or
enforcement in respect of the First Priority Lien Obligations made
by the
First Lien Agent or any holder of such obligations;
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(3)
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they
will not object to, and will not otherwise contest any order relating
to a
sale of assets of the Issuer or any Note Guarantor for which the
First
Lien Agent has consented that provides, to the extent the sale is
to be
free and clear of Liens, that the Liens securing the First Priority
Lien
Obligations and the notes will attach to the proceeds of the sale
on the
same basis of priority as the existing Liens in accordance with the
Intercreditor Agreement;
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(4)
|
until
the Discharge of Senior Lender Claims, none of them will seek relief
from
the automatic stay or any other stay in any insolvency or liquidation
proceeding in respect of the Collateral, without the prior written
consent
of the First Lien Agent and the required lenders under the Credit
Agreement;
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(5)
|
none
of them shall contest (or support any other Person contesting)
(a) any request by the First Lien Agent or the holders of First
Priority Lien Obligations for adequate protection or (b) any
objection by the First Lien Agent or the holders of First Priority
Lien
Obligations to any motion, relief, action or proceeding based on
the First
Lien Agent’s or the holders of First Priority Lien Obligations’ claiming a
lack of adequate protection. Notwithstanding the foregoing, in any
insolvency or liquidation proceeding, (i) if the holders of First
Priority Lien Obligations (or any subset thereof) are granted adequate
protection in the form of additional collateral in connection with
any DIP
Financing or use of cash collateral under Section 363 or
Section 364 of Title 11 of the United States Bankruptcy Code or any
similar law, then the Trustee (A) may seek or request adequate protection
in the form of a replacement Lien on such additional collateral,
which
Lien is subordinated to the Liens securing the First Priority Lien
Obligations and such DIP Financing (and all Obligations relating
thereto)
on the same basis as the other Liens securing the notes are so
subordinated to the Liens securing First Priority Lien Obligations
under
the Intercreditor Agreement and (B) agrees that it will not seek
or
request, and will not accept, adequate protection in any other form,
and
(ii) in the event the Trustee seeks or requests adequate protection
and such adequate protection is granted in the form of additional
collateral, then the Trustee and the noteholders agree that the holders
of
the First Priority Lien Obligations shall also be granted a senior
Lien on
such additional collateral as security for the applicable First Priority
Lien Obligations and any such DIP Financing and that any Lien on
such
additional collateral securing the notes shall be subordinated to
the
Liens on such collateral securing the First Priority Lien Obligations
and
any such DIP Financing (and all Obligations relating thereto) and
any
other Liens granted to the holders of First Priority Lien Obligations
as
adequate protection on the same basis as the other Liens securing
the
notes are
so
subordinated to such Liens securing First Priority Lien Obligations
under
the Intercreditor Agreement; and
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(6)
|
until
the Discharge of Senior Lender Claims has occurred, the Trustee,
on behalf
of itself and each noteholder, (i) will not assert or enforce any
claim
under Section 506(c) of the United States Bankruptcy Code senior to
or on a parity with the Liens securing the First Priority Lien Obligations
for costs or expenses of preserving or disposing of any collateral,
and
(ii) will waive any claim it may have arising out of the election
by any
holder of First Priority Lien Obligations of the application of Section
1111(b)(2) of the United States Bankruptcy Code.
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Subject
to the terms of the Security Documents, the Issuer and the Note Guarantors
have
the right to remain in possession and retain exclusive control of the Collateral
securing the notes (other than any cash, securities, obligations and Cash
Equivalents constituting part of the Collateral and deposited with the First
Lien Agent in accordance with the provisions of the Security Documents and
other
than as set forth in the Security Documents), to freely operate the Collateral
and to collect, invest and dispose of any income therefrom.
Release
of Collateral
The
Issuer and the Note Guarantors are entitled to the releases of property and
other assets included in the Collateral from the Liens securing the notes
under
any one or more of the following circumstances:
(7)
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upon
the Discharge of Senior Lender Claims and concurrent release of all
other
Liens on such property or assets securing First Priority Lien Obligations
(including all commitments and letters of credit thereunder);
provided,
however
,
that if the Issuer or any Note Guarantor subsequently incurs First
Priority Lien Obligations that are secured by Liens on property or
assets
of the Issuer or any Note Guarantor of the type constituting the
Collateral and the related Liens are incurred in reliance on clause
(6)(B) of the definition of Permitted Liens, then the Issuer and its
Restricted Subsidiaries will be required to reinstitute the security
arrangements with respect to the Collateral in favor of the notes,
which,
in the case of any such subsequent First Priority Lien Obligations,
will
be second priority Liens on the Collateral securing such First Priority
Lien Obligations to the same extent provided by the Security Documents
and
on the terms and conditions of the security documents relating to
such
First Priority Lien Obligations, with the second priority Lien held
either
by the administrative agent, collateral agent or other representative
for
such First Priority Lien Obligations or by a collateral agent or
other
representative designated by the Issuer to hold the second priority
Liens
for the benefit of the holders of the notes and subject to an
intercreditor agreement that provides the administrative agent or
collateral agent substantially the same rights and powers as afforded
under the Intercreditor Agreement;
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(8)
|
to
enable us to consummate the disposition of such property or assets
to the
extent not prohibited under the covenant described under “—Certain
Covenants—Asset Sales”;
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(9)
|
in
the case of a Note Guarantor that is released from its Note Guarantee
with
respect to the notes, the release of the property and assets of such
Note
Guarantor; or
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(10)
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as
described under “—Amendments and Waivers” below.
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If
an
Event of Default under the Indenture exists on the date of Discharge of
Senior
Lender Claims, the second priority Liens on the Collateral securing the
notes
will not be released, except to the extent the Collateral or any portion
thereof
was disposed of in order to repay the First Priority Lien Obligations secured
by
the Collateral, and thereafter the Trustee (or
another
designated representative acting at the direction of the holders of a majority
of outstanding principal amount of the notes and Other Second-Lien Obligations)
will have the right to direct the First Lien Agent to foreclose upon the
Collateral (but in such event, the Liens on the Collateral securing the
notes
will be released when such Event of Default and all other Events of Default
under the Indenture cease to exist).
The
second priority security interests in all Collateral securing the notes also
will be released upon (i) payment in full of the principal of, together
with accrued and unpaid interest (including additional interest, if any)
on, the
notes and all other Obligations under the Indenture, the Note Guarantees
and the
Security Documents that are due and payable at or prior to the time such
principal, together with accrued and unpaid interest (including additional
interest, if any), are paid (including pursuant to a satisfaction and discharge
of the Indenture as described below under “—Satisfaction and Discharge”) or
(ii) a legal defeasance or covenant defeasance under the Indenture as
described below under “—Defeasance.”
Note
Guarantees
Each
of
the Issuer’s direct and indirect Restricted Subsidiaries that were Domestic
Subsidiaries on the Issue Date, that have guaranteed Indebtedness under the
Credit Agreement, have jointly and severally, irrevocably and unconditionally,
guaranteed on a senior basis, the performance and punctual payment when due,
whether at Stated Maturity, by acceleration or otherwise, of all obligations
of
the Issuer under the Indenture and the notes, whether for payment of principal
of, premium, if any, or interest or additional interest on the notes, expenses,
indemnification or otherwise (all such obligations guaranteed by such Note
Guarantors being herein called the “Guaranteed Obligations”). The Guaranteed
Obligations of each Note Guarantor are secured by second priority security
interests (subject to Permitted Liens) in the Collateral owned by such Note
Guarantor. Such Note Guarantors have agreed to pay, in addition to the amount
stated above, any and all expenses (including reasonable counsel fees and
expenses) incurred by the Trustee or the holders in enforcing any rights
under
the Note Guarantees.
Each
Note
Guarantee is limited in amount to an amount not to exceed the maximum amount
that can be guaranteed by the applicable Note Guarantor without rendering
the
Note Guarantee, as it relates to such Note Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally. See “Risk Factors—Risk Factors
Related to an Investment in the Notes—Because each guarantor’s liability under
its guarantees may be reduced to zero, avoided or released under certain
circumstances, you may not receive any payments from some or all of the
guarantors.” After the Issue Date, the Issuer is obliged to cause each
Restricted Subsidiary that is a Domestic Subsidiary (unless such Subsidiary
is a
Receivables Subsidiary) that Incurs or guarantees certain Indebtedness of
the
Issuer or any of its Restricted Subsidiaries or issues shares of Disqualified
Stock to execute and deliver to the Trustee a supplemental Indenture pursuant
to
which such Restricted Subsidiary will guarantee payment of the notes on the
same
unsecured senior basis. See “—Certain Covenants—Future Note Guarantors.”
Each
Note
Guarantee is a continuing guarantee and shall:
(1)
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remain
in full force and effect until payment in full of all the Guaranteed
Obligations;
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(2)
|
subject
to the next succeeding paragraph, be binding upon each such Note
Guarantor
and its successors; and
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(3)
|
inure
to the benefit of and be enforceable by the Trustee, the holders
and their
successors, transferees and assigns.
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A
Note
Guarantee of a Note Guarantor is automatically released upon:
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(1)
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(a)
|
the
sale, disposition or other transfer (including through merger or
consolidation) of the Capital Stock (including any sale, disposition
or
other transfer following which the applicable Note Guarantor is
no longer
a Restricted Subsidiary), of the applicable Note Guarantor if such
sale,
disposition or other transfer is made in compliance with the
Indenture,
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(b)
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the
Issuer designating such Note Guarantor to be an Unrestricted Subsidiary
in
accordance with the provisions set forth under “—Certain
Covenants—Limitation on Restricted Payments” and the definition of
“Unrestricted Subsidiary,”
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(c)
|
in
the case of any Restricted Subsidiary that after September 20,
2006, is
required to guarantee the notes pursuant to the covenant described
under
“—Certain Covenants—Future Note Guarantors,” the release or discharge of
the guarantee by such Restricted Subsidiary of Indebtedness of
the Issuer
or any Restricted Subsidiary of the Issuer or such Restricted Subsidiary
or the repayment of the Indebtedness or Disqualified Stock, in
each case,
which resulted in the obligation to guarantee the notes, and
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(d)
|
the
Issuer’s exercise of its legal defeasance option or covenant defeasance
option as described under “—Defeasance,”
provided,
however
,
that in the case of this clause (4), no floating rate notes are then
outstanding, or if the Issuer’s obligations under the Indenture are
discharged in accordance with the terms of the Indenture; and
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(2)
|
in
the case of clause (1)(a) above, such Note Guarantor is released from
its guarantees, if any, of, and all pledges and security, if any,
granted
in connection with, the Credit Agreement and any other Indebtedness
of the
Issuer or any Restricted Subsidiary of the Issuer.
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A
Note
Guarantee is also automatically released upon the applicable Subsidiary ceasing
to be a Subsidiary as a result of any foreclosure of any pledge or security
interest securing First Priority Lien Obligations, subject to, in each case,
the
application of the proceeds of such foreclosure in the manner described under
“—Security for the Notes,” or if such Subsidiary is released from its guarantees
of, and all pledges and security interests granted in connection with, the
Credit Agreement and any other Indebtedness of the Issuer or any Restricted
Subsidiary of the Issuer which results in the obligation to guarantee the
notes.
Change
of Control
Upon
the
occurrence of any of the following events (each, a “Change of Control”), each
holder will have the right to require the Issuer to repurchase all or any
part
of such holder’s
notes
at
a purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of repurchase (subject to
the
right of holders of record on the relevant record date to receive interest
due
on the relevant interest payment date), except to the extent the Issuer has
previously elected to redeem notes as described under “—Optional Redemption”:
(1)
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the
sale, lease or transfer, in one or a series of related transactions,
of
all or substantially all the assets of the Issuer and its Subsidiaries,
taken as a whole, to a Person other than any of the Permitted Holders;
or
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(2)
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the
Issuer becomes aware (by way of a report or any other filing pursuant
to
Section 13(d) of the Exchange Act, proxy, vote, written notice or
otherwise) of the acquisition by any Person or group (within the
meaning
of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or
any successor provision), including any group acting for the purpose
of
acquiring, holding or disposing of securities (within the meaning
of Rule
13d-5(b)(1) under the Exchange Act), other than any of the Permitted
Holders, in a single transaction or in a related series of transactions,
by way of merger, consolidation or other business combination or
purchase
of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, or any successor provision), of more than 50% of the
total
voting power of the Voting Stock of the Issuer or any direct or indirect
parent of the Issuer.
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In
the
event that at the time of such Change of Control the terms of the Bank
Indebtedness restrict or prohibit the repurchase of notes pursuant to this
covenant, then prior to the mailing of the notice to holders provided for
in the
immediately following paragraph but in any event within 30 days following
any
Change of Control, the Issuer shall:
(1)
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repay
in full all Bank Indebtedness or, if doing so will allow the purchase
of
notes, offer to repay in full all Bank Indebtedness and repay the
Bank
Indebtedness of each lender who has accepted such offer; or
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(2)
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obtain
the requisite consent under the agreements governing the Bank Indebtedness
to permit the repurchase of the notes as provided for in the immediately
following paragraph.
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See
“Risk
Factors—Risk Factors Related to an Investment in the Notes—We may not be able to
repurchase the notes upon a change of control.”
Within
30
days following any Change of Control, except to the extent that the Issuer
has
exercised its right to redeem the notes as described under “—Optional
Redemption,” the Issuer shall mail a notice (a “Change of Control Offer”) to
each holder with a copy to the Trustee stating:
(1)
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that
a Change of Control has occurred and that such holder has the right
to
require the Issuer to repurchase such holder’s notes at a repurchase price
in cash equal to 101% of the principal amount thereof, plus accrued
and
unpaid interest and additional interest, if any, to the date of repurchase
(subject to the right of holders of record on a record date to receive
interest on the relevant interest payment date);
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(2)
|
the
circumstances and relevant facts and financial information regarding
such
Change of Control;
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(3)
|
the
repurchase date (which shall be no earlier than 30 days nor later
than 60
days from the date such notice is mailed); and
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(4)
|
the
instructions determined by the Issuer, consistent with this covenant,
that
a holder must follow in order to have its notes purchased.
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A
Change
of Control Offer may be made in advance of a Change of Control, and conditioned
upon such Change of Control, if a definitive agreement is in place for the
Change of Control at the time of making of the Change of Control Offer.
In
addition, the Issuer will not be required to make a Change of Control Offer
upon
a Change of Control if a third party makes the Change of Control Offer in
the
manner, at the times and otherwise in compliance with the requirements set
forth
in the Indenture applicable to a Change of Control Offer made by the Issuer
and
purchases all notes validly tendered and not withdrawn under such Change
of
Control Offer.
Notes
repurchased by the Issuer pursuant to a Change of Control Offer will have
the
status of notes issued but not outstanding or will be retired and canceled
at
the option of the Issuer. notes purchased by a third party pursuant to the
preceding paragraph will have the status of notes issued and outstanding.
The
Issuer will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Issuer will comply
with the applicable securities laws and regulations and will not be deemed
to
have breached its obligations under this covenant by virtue thereof.
This
Change of Control repurchase provision is a result of negotiations between
the
Issuer and the initial purchasers. The Issuer has no present intention to
engage
in a transaction involving a Change of Control, although it is possible that
the
Issuer could decide to do so in the future. Subject to the limitations discussed
below, the Issuer could, in the future, enter into certain transactions,
including acquisitions, refinancings or other recapitalizations, that would
not
constitute a Change of Control under the Indenture, but that could increase
the
amount of indebtedness outstanding at such time or otherwise affect the Issuer’s
capital structure or credit rating.
The
occurrence of events which would constitute a Change of Control would constitute
a default under the Credit Agreement. Future Bank Indebtedness of the Issuer
may
contain prohibitions on certain events which would constitute a Change of
Control or require such Bank Indebtedness to be repurchased upon a Change
of
Control. Moreover, the exercise by the holders of their right to require
the
Issuer to repurchase the Notes could cause a default under such Bank
Indebtedness, even if the Change of Control itself does not, due to the
financial effect of such repurchase on the Issuer. Finally, the Issuer’s ability
to pay cash to the holders upon a repurchase may be limited by the Issuer’s then
existing financial resources. There can be no assurance that sufficient funds
will be available when necessary to make any required repurchases. See “Risk
Factors—Risk Factors Related to an Investment in the Notes—We may not be able to
repurchase the notes upon a change of control.”
The
definition of Change of Control includes a phrase relating to the sale, lease
or
transfer of “all or substantially all” the assets of the Issuer and its
Subsidiaries taken as a whole. Although there is a developing body of case
law
interpreting the phrase “substantially all,” there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of
a
holder of notes to require the Issuer to repurchase such notes as a result
of a
sale, lease or transfer of less than all of the assets of the Issuer and
its
Subsidiaries taken as a whole to another Person or group may be uncertain.
The
provisions under the Indenture relating to the Issuer’s obligation to make an
offer to repurchase the notes as a result of a Change of Control may be waived
or modified with the written consent of the holders of a majority in principal
amount of the notes.
Certain
Covenants
Set
forth
below are summaries of certain covenants that will be contained in the
Indenture. If, on any date following the Issue Date, (i) the notes have
Investment Grade Ratings from both Rating Agencies, and the Issuer has delivered
written notice of such Investment Grade Ratings to the Trustee, and (ii) no
Default has occurred and is continuing under the Indenture then, beginning
on
that day and continuing at all times thereafter regardless of any subsequent
changes in the rating of the notes, the covenants specifically listed under
the
following captions in this “Description of the Notes” section of this prospectus
will no longer be applicable to the notes:
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(1)
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“—Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock
and
Preferred Stock”;
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(2)
“—Limitation
on Restricted Payments”;
(3)
“—Dividend
and Other Payment Restrictions Affecting Subsidiaries”;
(4)
“—Asset
Sales”;
(5)
“—Transactions
with Affiliates”;
(6)
“—Future
Note Guarantors”; and
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(7)
|
clause
(4) of the first paragraph of “—Merger, Amalgamation, Consolidation
or Sale of All or Substantially All Assets.”
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In
addition, during any period of time that (i) the notes have Investment
Grade Ratings from both Rating Agencies, and the Issuer has delivered written
notice of such Investment Grade Ratings to the Trustee, and (ii) no Default
has occurred and is continuing under the Indenture (the occurrence of the
events
described in the foregoing clauses (i) and (ii) being collectively
referred to as a “Covenant Suspension Event”), the Issuer and its Restricted
Subsidiaries will not be subject to the covenant described under “Change of
Control” (the “Suspended Covenant”). In the event that the Issuer and its
Restricted Subsidiaries are not subject to the Suspended Covenant under the
Indenture for any period of time as a result of the foregoing, and on any
subsequent date (the “Reversion Date”) one or both of the Rating Agencies
(a) withdraw their Investment Grade Rating or downgrade the rating assigned
to the notes below an Investment Grade Rating and/or (b) the Issuer or any
of its Affiliates enters into an agreement to effect a transaction that would
result in a Change of Control and one or more of the Rating Agencies indicate
that if consummated, such transaction (alone or together with any related
recapitalization or refinancing transactions) would cause such Rating Agency
to
withdraw its Investment Grade Rating or downgrade the ratings assigned to
the
notes below an Investment Grade Rating, then the Issuer and its Restricted
Subsidiaries will thereafter again be subject to the Suspended Covenant under
the Indenture with respect to future events, including, without limitation,
a
proposed transaction described in clause (b) above.
There
can
be no assurance that the notes will ever achieve or maintain Investment Grade
Ratings.
Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock.
The
Indenture provides that:
(1)
the
Issuer will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness)
or issue any shares of Disqualified Stock; and
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(2)
|
the
Issuer will not permit any of its Restricted Subsidiaries (other
than a
Note Guarantor) to issue any shares of Preferred Stock;
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provided
,
however
,
that
the Issuer and any Restricted Subsidiary that is a Note Guarantor or a Foreign
Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue
shares of Disqualified Stock and any Restricted Subsidiary may issue shares
of
Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Issuer
for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which
such
additional Indebtedness is Incurred or such Disqualified Stock or Preferred
Stock is issued would have been at least 2.00 to 1.00 determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been Incurred, or the
Disqualified Stock or Preferred Stock had been issued, as the case may be,
and
the application of proceeds therefrom had occurred at the beginning of such
four-quarter period.
The
foregoing limitations will not apply to:
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(a)
|
the
Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness
under the Credit Agreement and the issuance and creation of letters
of
credit and bankers’ acceptances thereunder (with letters of credit and
bankers’ acceptances being deemed to have a principal amount equal to the
face amount thereof) in the aggregate principal amount of
$875.0 million plus an aggregate additional principal amount
outstanding at any one time that does not cause the Secured Indebtedness
Leverage Ratio of the Issuer to exceed 4.00 to 1.00, determined
on a pro
forma basis (including a pro forma application of the net proceeds
therefrom);
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(b)
|
the
Incurrence by the Issuer and the Note Guarantors of Indebtedness
represented by (i) the notes and the Note Guarantees and
(ii) the Senior Subordinated Notes and the related guarantees
thereof;
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(c)
|
Indebtedness
existing on the Issue Date (other than Indebtedness described in
clauses
(a) and (b));
|
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(d)
|
Indebtedness
(including Capitalized Lease Obligations) Incurred by the Issuer
or any of
its Restricted Subsidiaries, Disqualified Stock issued by the Issuer
or
any of its Restricted Subsidiaries and Preferred Stock issued by
any
Restricted Subsidiaries of the Issuer to finance (whether prior
to or
within 270 days after) the purchase, lease, construction or improvement
of
property (real or personal) or equipment (whether through the direct
purchase of assets or the Capital Stock of any Person owning such
assets
(but no other material assets));
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(e)
|
Indebtedness
Incurred by the Issuer or any of its Restricted Subsidiaries constituting
reimbursement obligations with respect to letters of credit and
bank
guarantees issued in the ordinary course of business, including
without
limitation letters of credit in respect of workers’ compensation claims,
health, disability or other benefits to employees or former employees
or
their families or property, casualty or liability insurance or
self-insurance, and letters of credit in connection with the maintenance
of, or pursuant to the requirements of, environmental or other
permits or
licenses from governmental authorities, or other Indebtedness with
respect
to reimbursement type obligations regarding workers’ compensation claims;
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(f)
|
Indebtedness
arising from agreements of the Issuer or a Restricted Subsidiary
providing
for indemnification, adjustment of purchase price or similar obligations,
in each case, Incurred in connection with the Acquisition or any
other
acquisition or disposition of any business, assets or a Subsidiary
of the
Issuer in accordance with the terms of the Indenture, other than
guarantees of Indebtedness Incurred by any Person acquiring all
or any
portion of such business, assets or Subsidiary for the purpose
of
financing such acquisition;
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(g)
|
Indebtedness
of the Issuer to a Restricted Subsidiary;
provided
that any such Indebtedness owed to a Restricted Subsidiary that
is not a
Note Guarantor is subordinated in right of payment to the obligations
of
the Issuer under the notes;
provided
,
further
,
that any subsequent issuance or transfer of any Capital Stock or
any other
event which results in any such Restricted Subsidiary ceasing to
be a
Restricted Subsidiary or any other subsequent transfer of any such
Indebtedness (except to the Issuer or another Restricted Subsidiary)
shall
be deemed, in each case, to be an Incurrence of such Indebtedness;
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(h)
|
shares
of Preferred Stock of a Restricted Subsidiary issued to the Issuer
or
another Restricted Subsidiary;
provided
that any subsequent issuance or transfer of any Capital Stock or
any other
event which results in any Restricted Subsidiary that holds such
shares of
Preferred Stock of another Restricted Subsidiary ceasing to be
a
Restricted Subsidiary or any other subsequent transfer of any such
shares
of Preferred Stock (except to the Issuer or another Restricted
Subsidiary)
shall be deemed, in each case, to be an issuance of shares of Preferred
Stock;
|
|
(i)
|
Indebtedness
of a Restricted Subsidiary to the Issuer or another Restricted
Subsidiary;
provided
that if a Note Guarantor incurs such Indebtedness to a Restricted
Subsidiary that is not a Note Guarantor, such Indebtedness is subordinated
in right of payment to the Note Guarantee of such Note Guarantor;
provided
,
further
,
that any subsequent issuance or transfer of any Capital Stock or
any other
event which results in any Restricted Subsidiary holding such Indebtedness
ceasing to be a Restricted Subsidiary or any other subsequent transfer
of
any such Indebtedness (except to the Issuer or another Restricted
Subsidiary) shall be deemed, in each case, to be an Incurrence
of such
Indebtedness;
|
|
(j)
|
Hedging
Obligations that are not incurred for speculative purposes and
either
(1) for the purpose of fixing or hedging interest rate risk with
respect to any Indebtedness that is permitted by the terms of the
Indenture to be outstanding; (2) for the purpose of fixing or hedging
currency exchange rate risk with respect to any currency exchanges;
or
(3) for the purpose of fixing or hedging commodity price risk
(including resin price risk) with respect to any commodity purchases
or
sales;
|
|
(k)
|
obligations
in respect of performance, bid, appeal and surety bonds and completion
guarantees provided by the Issuer or any Restricted Subsidiary
in the
ordinary course of business;
|
|
(l)
|
Indebtedness
or Disqualified Stock of the Issuer or any Restricted Subsidiary
of the
Issuer and Preferred Stock of any Restricted Subsidiary of the
Issuer not
otherwise permitted hereunder in an aggregate principal amount,
which
when
|
aggregated
with the principal amount or
liquidation preference of all other Indebtedness, Disqualified Stock and
Preferred Stock then outstanding and Incurred pursuant to this clause (l),
does
not exceed the greater of $100.0 million and 4.5% of Total Assets at the
time of Incurrence (it being understood that any Indebtedness Incurred under
this clause (l) shall cease to be deemed Incurred or outstanding for
purposes of this clause (l) but shall be deemed Incurred for purposes of
the first paragraph of this covenant from and after the first date on which
the
Issuer, or the Restricted Subsidiary, as the case may be, could have Incurred
such Indebtedness under the first paragraph of this covenant without reliance
upon this clause (l));
|
(m)
|
any
guarantee by the Issuer or a Note
Guarantor
of
Indebtedness or other obligations of the Issuer or any of its Restricted
Subsidiaries so long as the Incurrence of such Indebtedness Incurred
by
the Issuer or such Restricted Subsidiary is permitted under the
terms of
the Indenture;
provided
that if such Indebtedness is by its express terms subordinated
in right of
payment to the notes or the Note Guarantee of such Restricted Subsidiary,
as applicable, any such guarantee of such Note Guarantor with respect
to
such Indebtedness shall be subordinated in right of payment to
such Note
Guarantor’s Note Guarantee with respect to the notes substantially to the
same extent as such Indebtedness is subordinated to the notes or
the Note
Guarantee of such Restricted Subsidiary, as applicable;
|
|
(n)
|
the
Incurrence by the Issuer or any of its Restricted Subsidiaries
of
Indebtedness or Disqualified Stock or Preferred Stock of a Restricted
Subsidiary of the Issuer which serves to refund, refinance or defease
any
Indebtedness Incurred or Disqualified Stock or Preferred Stock
issued as
permitted under the first paragraph of this covenant and clauses
(b), (c),
(d), (n), (o), (s) and (t) of this paragraph or any
Indebtedness, Disqualified Stock or Preferred Stock Incurred to
so refund
or refinance such Indebtedness, Disqualified Stock or Preferred
Stock,
including any Indebtedness, Disqualified Stock or Preferred Stock
Incurred
to pay premiums and fees in connection therewith (subject to the
following
proviso, “Refinancing Indebtedness”) prior to its respective maturity;
provided
,
however
,
that such Refinancing Indebtedness:
|
|
(1)
|
has
a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is Incurred which is not less than the remaining Weighted
Average Life to Maturity of the Indebtedness, Disqualified Stock
or
Preferred Stock being refunded or refinanced;
|
|
(2)
|
has
a Stated Maturity which is not earlier than the earlier of (x) the
Stated Maturity of the Indebtedness being refunded or refinanced
or
(y) 91 days following the maturity date of the notes;
|
|
(3)
|
to
the extent such Refinancing Indebtedness refinances (a) Indebtedness
junior to the notes or the Note Guarantee of such Restricted Subsidiary,
as applicable, such Refinancing Indebtedness is junior to the notes
or the
Note Guarantee of such Restricted Subsidiary, as applicable, or
(b) Disqualified Stock or Preferred Stock, such Refinancing
Indebtedness is Disqualified Stock or Preferred Stock;
|
|
(4)
|
is
Incurred in an aggregate amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than
the
aggregate amount (or if issued with original issue discount, the
aggregate
accreted
value) then outstanding of the Indebtedness being refinanced plus
premium,
fees and expenses Incurred in connection with such refinancing;
|
|
(5)
|
shall
not include (x) Indebtedness of a Restricted Subsidiary of the Issuer
that is not a Note Guarantor that refinances Indebtedness of the
Issuer or
a Restricted Subsidiary that is a Note Guarantor, or (y) Indebtedness
of the Issuer or a Restricted Subsidiary that refinances Indebtedness
of
an Unrestricted Subsidiary; and
|
|
(6)
|
in
the case of any Refinancing Indebtedness Incurred to refinance
Indebtedness outstanding under clause (d) or (t), shall be deemed to
have been Incurred and to be outstanding under such clause (d) or
(t), as applicable, and not this clause (n) for purposes of
determining amounts outstanding under such clauses (d) and (t);
provided
,
further
,
that subclauses (1) and (2) of this clause (n) will not
apply to any refunding or refinancing of any Secured Indebtedness
constituting First Priority Lien Obligations.
|
|
(o)
|
Indebtedness,
Disqualified Stock or Preferred Stock of (x) the Issuer or any of its
Restricted Subsidiaries incurred to finance an acquisition or
(y) Persons that are acquired by the Issuer or any of its Restricted
Subsidiaries or merged with or into the Issuer or any of its Restricted
Subsidiaries in accordance with the terms of the Indenture;
provided,
however
,
that after giving effect to such acquisition or merger, either
|
|
(1)
|
the
Issuer would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in
the first sentence of this covenant; or
|
|
(2)
|
the
Fixed Charge Coverage Ratio of the Issuer would be greater than
immediately prior to such acquisition or merger;
|
|
(p)
|
Indebtedness
Incurred by a Receivables Subsidiary in a Qualified Receivables
Financing
that is not recourse to the Issuer or any Restricted Subsidiary
other than
a Receivables Subsidiary (except for Standard Securitization
Undertakings);
|
|
(q)
|
Indebtedness
arising from the honoring by a bank or other financial institution
of a
check, draft or similar instrument drawn against insufficient funds
in the
ordinary course of business;
provided
that such Indebtedness is extinguished within five Business Days
of its
Incurrence;
|
|
(r)
|
Indebtedness
of the Issuer or any Restricted Subsidiary supported by a letter
of credit
or bank guarantee issued pursuant to the Credit Agreement, in a
principal
amount not in excess of the stated amount of such letter of credit;
|
|
(s)
|
Contribution
Indebtedness;
|
|
(t)
|
Indebtedness
of Foreign Subsidiaries;
provided,
however
,
that the aggregate principal amount of Indebtedness Incurred under
this
clause (t), when aggregated with the principal amount of all other
Indebtedness then outstanding and Incurred pursuant to this
clause (t), does not exceed $25.0 million at any one time
outstanding;
|
|
(u)
|
Indebtedness
of the Issuer or any Restricted Subsidiary consisting of (x) the
financing of insurance premiums or (y) take-or-pay obligations
contained in supply arrangements, in each case, in the ordinary
course of
business; and
|
|
(v)
|
Indebtedness
incurred on behalf of, or representing Guarantees of Indebtedness
of,
joint ventures of the Issuer or any Restricted Subsidiary not in
excess,
at any one time outstanding, of $7.5 million.
|
For
purposes of determining compliance with this covenant, in the event that
an item
of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria
of
more than one of the categories of permitted Indebtedness described in clauses
(a) through (v) above or is entitled to be Incurred pursuant to the
first paragraph of this covenant, the Issuer shall, in its sole discretion,
classify or reclassify, or later divide, classify or reclassify, such item
of
Indebtedness in any manner that complies with this covenant. Accrual of
interest, the accretion of accreted value, the payment of interest in the
form
of additional Indebtedness with the same terms, the payment of dividends
on
Preferred Stock in the form of additional shares of Preferred Stock of the
same
class, accretion of original issue discount or liquidation preference and
increases in the amount of Indebtedness outstanding solely as a result of
fluctuations in the exchange rate of currencies will not be deemed to be
an
Incurrence of Indebtedness for purposes of this covenant. Guarantees of,
or
obligations in respect of letters of credit relating to, Indebtedness which
is
otherwise included in the determination of a particular amount of Indebtedness
shall not be included in the determination of such amount of Indebtedness;
provided
that the
Incurrence of the Indebtedness represented by such guarantee or letter of
credit, as the case may be, was in compliance with this covenant.
For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount
of Indebtedness denominated in a foreign currency shall be calculated based
on
the relevant currency exchange rate in effect on the date such Indebtedness
was
Incurred, in the case of term debt, or first committed or first Incurred
(whichever yields the lower U.S. dollar equivalent), in the case of revolving
credit debt;
provided
that if
such Indebtedness is Incurred to refinance other Indebtedness denominated
in a
foreign currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded
so long
as the principal amount of such refinancing Indebtedness does not exceed
the
principal amount of such Indebtedness being refinanced.
Limitation
on Restricted Payments.
The
Indenture provides that the Issuer will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:
|
(1)
|
declare
or pay any dividend or make any distribution on account of the
Issuer’s or
any of its Restricted Subsidiaries’ Equity Interests, including any
payment made in connection with any merger, amalgamation or consolidation
involving the Issuer (other than (A) dividends or distributions by
the Issuer payable solely in Equity Interests (other than Disqualified
Stock) of the Issuer; or (B) dividends or distributions by a
Restricted Subsidiary so long as, in the case of any dividend or
distribution payable on or in respect of any class or series of
securities
issued by a Restricted Subsidiary other than a Wholly Owned Restricted
Subsidiary, the Issuer or a Restricted Subsidiary receives at least
its
pro rata share of such dividend or distribution in accordance with
its
Equity Interests in such class or series of securities);
|
|
(2)
|
purchase
or otherwise acquire or retire for value any Equity Interests of
the
Issuer or any direct or indirect parent of the Issuer;
|
|
(3)
|
make
any principal payment on, or redeem, repurchase, defease or otherwise
acquire or retire for value, in each case prior to any scheduled
repayment
or
|
scheduled
maturity, any Subordinated Indebtedness of the Issuer or any of its Restricted
Subsidiaries (other than the payment, redemption, repurchase, defeasance,
acquisition or retirement of (A) Subordinated Indebtedness in anticipation
of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of such payment,
redemption, repurchase, defeasance, acquisition or retirement and
(B) Indebtedness permitted under clauses (g) and (i) of the
second paragraph of the covenant described under “—Limitation on Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock”); or
|
(4)
|
make
any Restricted Investment
|
(all
such
payments and other actions set forth in clauses (1) through (4) above
being collectively referred to as “Restricted Payments”), unless, at the time of
such Restricted Payment:
(a)
no
Default shall have occurred and be continuing or would occur as a consequence
thereof;
|
(b)
|
immediately
after giving effect to such transaction on a pro forma basis, the
Issuer
could Incur $1.00 of additional Indebtedness under the provisions
of the
first paragraph of the covenant described under “—Limitation on Incurrence
of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock”;
and
|
|
(c)
|
such
Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Issuer and its Restricted Subsidiaries
after the Issue Date (including Restricted Payments permitted by
clauses
(1), (4) (only to the extent of one-half of the amounts paid pursuant
to such clause), (6) and (8) of the next succeeding paragraph,
but excluding all other Restricted Payments permitted by the next
succeeding paragraph), is less than the amount equal to the Cumulative
Credit.
|
“Cumulative
Credit” means the sum of (without duplication):
|
(1)
|
50%
of the Consolidated Net Income of the Issuer for the period (taken
as one
accounting period, the “Reference Period”) from July 1, 2006 to the
end of the Issuer’s most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment
(or, in the case such Consolidated Net Income for such period is
a
deficit, minus 100% of such deficit), plus
|
|
(2)
|
100%
of the aggregate net proceeds, including cash and the Fair Market
Value
(as determined in good faith by the Issuer) of property other than
cash,
received by the Issuer after the Issue Date from the issue or sale
of
Equity Interests of the Issuer (excluding Refunding Capital Stock
(as
defined below), Designated Preferred Stock, Excluded Contributions,
Disqualified Stock and the Cash Contribution Amount), including
Equity
Interests issued upon conversion of Indebtedness or Disqualified
Stock or
upon exercise of warrants or options (other than an issuance or
sale to a
Restricted Subsidiary of the Issuer or an employee stock ownership
plan or
trust established by the Issuer or any of its Subsidiaries), plus
|
|
(3)
|
100%
of the aggregate amount of contributions to the capital of the
Issuer
received in cash and the Fair Market Value (as determined in good
faith by
the Issuer) of property other than cash after the Issue Date (other
than
Excluded
|
Contributions,
Refunding Capital Stock, Designated Preferred Stock, Disqualified Stock and
the
Cash Contribution Amount), plus
|
(4)
|
the
principal amount of any Indebtedness, or the liquidation preference
or
maximum fixed repurchase price, as the case may be, of any Disqualified
Stock of the Issuer or any Restricted Subsidiary thereof issued
after the
Issue Date (other than Indebtedness or Disqualified Stock issued
to a
Restricted Subsidiary) which has been converted into or exchanged
for
Equity Interests in the Issuer (other than Disqualified Stock)
or any
direct or indirect parent of the Issuer (provided in the case of
any
parent, such Indebtedness or Disqualified Stock is retired or
extinguished), plus
|
|
(5)
|
100%
of the aggregate amount received by the Issuer or any Restricted
Subsidiary in cash and the Fair Market Value (as determined in
good faith
by the Issuer) of property other than cash received by the Issuer
or any
Restricted Subsidiary from:
|
|
(A)
|
the
sale or other disposition (other than to the Issuer or a Restricted
Subsidiary of the Issuer) of Restricted Investments made by the
Issuer and
its Restricted Subsidiaries and from repurchases and redemptions
of such
Restricted Investments from the Issuer and its Restricted Subsidiaries
by
any Person (other than the Issuer or any of its Restricted Subsidiaries)
and from repayments of loans or advances which constituted Restricted
Investments (other than in each case to the extent that the Restricted
Investment was made pursuant to clause (7) or (10) of the
succeeding paragraph),
|
|
(B)
|
the
sale (other than to the Issuer or a Restricted Subsidiary of the
Issuer)
of the Capital Stock of an Unrestricted Subsidiary, or
|
|
(C)
|
a
distribution or dividend from an Unrestricted Subsidiary,
plus
|
|
(6)
|
in
the event any Unrestricted Subsidiary of the Issuer has been redesignated
as a Restricted Subsidiary or has been merged, consolidated or
amalgamated
with or into, or transfers or conveys its assets to, or is liquidated
into, the Issuer or a Restricted Subsidiary, the Fair Market Value
(as
determined in good faith by the Issuer or, if such Fair Market
Value may
exceed $25.0 million, in writing by an Independent Financial Advisor)
of
the Investment of the Issuer in such Unrestricted Subsidiary at
the time
of such redesignation, combination or transfer (or of the assets
transferred or conveyed, as applicable), after taking into account
any
Indebtedness associated with the Unrestricted Subsidiary so designated
or
combined or any Indebtedness associated with the assets so transferred
or
conveyed (other than in each case to the extent that the designation
of
such Subsidiary as an Unrestricted Subsidiary was made pursuant
to clause
(7) or (10) of the succeeding paragraph or constituted a
Permitted Investment).
|
The
foregoing provisions will not prohibit:
|
(1)
|
the
payment of any dividend or distribution within 60 days after the
date of
declaration thereof, if at the date of declaration such payment
would have
complied with the provisions of the Indenture;
|
|
(2)
|
(a)
|
the
repurchase, retirement or other acquisition of any Equity Interests
(“Retired Capital Stock”) of the Issuer or any direct or indirect parent
of the Issuer or Subordinated Indebtedness of the Issuer, any direct
or
|
indirect
parent of the Issuer or any Note Guarantor in exchange for, or out of the
proceeds of, the substantially concurrent sale of, Equity Interests of the
Issuer or any direct or indirect parent of the Issuer or contributions to
the
equity capital of the Issuer (other than any Disqualified Stock or any Equity
Interests sold to a Subsidiary of the Issuer or to an employee stock ownership
plan or any trust established by the Issuer or any of its Subsidiaries)
(collectively, including any such contributions, “Refunding Capital Stock”);
and
|
(b)
|
the
declaration and payment of accrued dividends on the Retired Capital
Stock
out of the proceeds of the substantially concurrent sale (other
than to a
Subsidiary of the Issuer or to an employee stock ownership plan
or any
trust established by the Issuer or any of its Subsidiaries) of
Refunding
Capital Stock;
|
|
(3)
|
the
redemption, repurchase or other acquisition or retirement of Subordinated
Indebtedness of the Issuer or any Note Guarantor made by exchange
for, or
out of the proceeds of the substantially concurrent sale of, new
Indebtedness of the Issuer or a Note Guarantor which is Incurred
in
accordance with the covenant described under “—Limitation on Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock” so
long as
|
|
(a)
|
the
principal amount of such new Indebtedness does not exceed the principal
amount of the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired for value (plus the amount of any premium required
to
be paid under the terms of the instrument governing the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired
plus any
fees incurred in connection therewith),
|
|
(b)
|
such
Indebtedness is subordinated to the notes or the related Note Guarantee,
as the case may be, at least to the same extent as such Subordinated
Indebtedness so purchased, exchanged, redeemed, repurchased, acquired
or
retired for value,
|
|
(c)
|
such
Indebtedness has a final scheduled maturity date equal to or later
than
the earlier of (x) the final scheduled maturity date of the
Subordinated Indebtedness being so redeemed, repurchased, acquired
or
retired or (y) 91 days following the maturity date of the notes, and
|
|
(d)
|
such
Indebtedness has a Weighted Average Life to Maturity at the time
Incurred
which is not less than the remaining Weighted Average Life to Maturity
of
the Subordinated Indebtedness being so redeemed, repurchased, acquired
or
retired;
|
|
(4)
|
the
repurchase, retirement or other acquisition (or dividends to any
direct or
indirect parent of the Issuer to finance any such repurchase, retirement
or other acquisition) for value of Equity Interests of the Issuer
or any
direct or indirect parent of the Issuer held by any future, present
or
former employee, director or consultant of the Issuer or any direct
or
indirect parent of the Issuer or any Subsidiary of the Issuer pursuant
to
any management equity plan or stock option plan or any other management
or
employee benefit plan or other agreement or arrangement;
provided
,
however
,
that the aggregate amounts paid under this clause (4) do not exceed
$15.0 million in any calendar year (with unused amounts in any
calendar year being permitted to be carried over for the
two
|
succeeding
calendar years);
provided
,
further
,
however
,
that
such amount in any calendar year may be increased by an amount not to exceed:
|
(a)
|
the
cash proceeds received by the Issuer or any of its Restricted Subsidiaries
from the sale of Equity Interests (other than Disqualified Stock)
of the
Issuer or any direct or indirect parent of the Issuer (to the extent
contributed to the Issuer) to members of management, directors
or
consultants of the Issuer and its Restricted Subsidiaries or any
direct or
indirect parent of the Issuer that occurs after the Issue Date
(
provided
that the amount of such cash proceeds utilized for any such repurchase,
retirement, other acquisition or dividend will not increase the
amount
available for Restricted Payments under clause (c) of the first
paragraph under “—Limitation on Restricted Payments”);
plus
|
|
(b)
|
the
cash proceeds of key man life insurance policies received by the
Issuer or
any direct or indirect parent of the Issuer (to the extent contributed
to
the Issuer) or the Issuer’s Restricted Subsidiaries after the Issue Date;
|
provided
that the
Issuer may elect to apply all or any portion of the aggregate increase
contemplated by clauses (a) and (b) above in any calendar year;
|
(5)
|
the
declaration and payment of dividends or distributions to holders
of any
class or series of Disqualified Stock of the Issuer or any of its
Restricted Subsidiaries issued or incurred in accordance with the
covenant
described under “—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock”;
|
|
(6)
|
the
declaration and payment of dividends or distributions (a) to holders
of any class or series of Designated Preferred Stock (other than
Disqualified Stock) issued after the Issue Date and (b) to any direct
or indirect parent of the Issuer, the proceeds of which will be
used to
fund the payment of dividends to holders of any class or series
of
Designated Preferred Stock (other than Disqualified Stock) of any
direct
or indirect parent of the Issuer issued after the Issue Date;
provided
,
however
,
that, (x) for the most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding
the date of issuance of such Designated Preferred Stock, after
giving
effect to such issuance (and the payment of dividends or distributions)
on
a pro forma basis, the Issuer would have had a Fixed Charge Coverage
Ratio
of at least 2.00 to 1.00 and (y) the aggregate amount of dividends
declared and paid pursuant to this clause (6) does not exceed the net
cash proceeds actually received by the Issuer from any such sale
of
Designated Preferred Stock (other than Disqualified Stock) issued
after
the Issue Date;
|
|
(7)
|
Investments
in Unrestricted Subsidiaries having an aggregate Fair Market Value,
taken
together with all other Investments made pursuant to this clause
(7) that are at that time outstanding, not to exceed the greater of
$25.0 million and 1.0% of Total Assets at the time of such Investment
(with the Fair Market Value of each Investment being measured at
the time
made and without giving effect to subsequent changes in value);
|
|
(8)
|
the
payment of dividends on the Issuer’s common stock (or the payment of
dividends to any direct or indirect parent of the Issuer to fund
the
payment by such direct or indirect parent of the Issuer of dividends
on
such entity’s common
|
stock)
of
up to 6% per annum of the net proceeds received by the Issuer from any
public offering of common stock of the Issuer or any direct or indirect parent
of the Issuer;
|
(9)
|
Investments
that are made with Excluded Contributions;
|
|
(10)
|
other
Restricted Payments in an aggregate amount not to exceed the greater
of
$50.0 million and 2.0% of Total Assets at the time made;
|
|
(11)
|
the
distribution, as a dividend or otherwise, of shares of Capital
Stock of,
or Indebtedness owed to the Issuer or a Restricted Subsidiary of
the
Issuer by, Unrestricted Subsidiaries;
|
|
(12)
|
the
payment of dividends or other distributions to any direct or indirect
parent of the Issuer in amounts required for such parent to pay
federal,
state or local income taxes (as the case may be) imposed directly
on such
parent to the extent such income taxes are attributable to the
income of
the Issuer and its Restricted Subsidiaries (including, without
limitation,
by virtue of such parent being the common parent of a consolidated
or
combined tax group of which the Issuer and/or its Restricted Subsidiaries
are members);
|
|
(13)
|
the
payment of dividends, other distributions or other amounts or the
making
of loans or advances by the Issuer, if applicable:
|
|
(a)
|
in
amounts required for any direct or indirect parent of the Issuer,
if
applicable, to pay fees and expenses (including franchise or similar
taxes) required to maintain its corporate existence, customary
salary,
bonus and other benefits payable to, and indemnities provided on
behalf
of, officers and employees of any direct or indirect parent of
the Issuer,
if applicable, and general corporate overhead expenses of any direct
or
indirect parent of the Issuer, if applicable, in each case to the
extent
such fees and expenses are attributable to the ownership or operation
of
the Issuer, if applicable, and its Subsidiaries;
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|
(b)
|
in
amounts required for any direct or indirect parent of the Issuer,
if
applicable, to pay interest and/or principal on Indebtedness the
proceeds
of which have been contributed to the Issuer or any of its Restricted
Subsidiaries and that has been guaranteed by, or is otherwise considered
Indebtedness of, the Issuer Incurred in accordance with the covenant
described under “—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock”; and
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|
(c)
|
in
amounts required for any direct or indirect parent of the Issuer
to pay
fees and expenses, other than to Affiliates of the Issuer, related
to any
unsuccessful equity or debt offering of such parent.
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|
(14)
|
cash
dividends or other distributions on the Issuer’s Capital Stock used to, or
the making of loans to any direct or indirect parent of the Issuer
to,
fund the Acquisition and the payment of fees and expenses incurred
in
connection with the Acquisition or owed by the Issuer or any direct
or
indirect parent of the Issuer, as the case may be, or Restricted
Subsidiaries of the Issuer to Affiliates, in each case to the extent
permitted by the covenant described under “—Transactions with Affiliates”;
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|
(15)
|
repurchases
of Equity Interests deemed to occur upon exercise of stock options
or
warrants if such Equity Interests represent a portion of the exercise
price of such options or warrants;
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|
(16)
|
purchases
of receivables pursuant to a Receivables Repurchase Obligation
in
connection with a Qualified Receivables Financing and the payment
or
distribution of Receivables Fees;
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|
(17)
|
payments
of cash, or dividends, distributions or advances by the Issuer
or any
Restricted Subsidiary to allow the payment of cash in lieu of the
issuance
of fractional shares upon the exercise of options or warrants or
upon the
conversion or exchange of Capital Stock of any such Person;
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|
(18)
|
the
repurchase, redemption or other acquisition or retirement for value
of any
Subordinated Indebtedness pursuant to the provisions similar to
those
described under the captions “—Change of Control” and “—Asset Sales”;
provided
that all notes tendered by holders of the notes in connection with
a
Change of Control or Asset Sale Offer, as applicable, have been
repurchased, redeemed or acquired for value; and
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|
(19)
|
any
payments made, including any such payments made to any direct or
indirect
parent of the Issuer to enable it to make payments, in connection
with the
consummation of the Acquisition or as contemplated by the Acquisition
Documents (other than payments to any Permitted Holder or any Affiliate
thereof);
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provided
,
however
,
that at
the time of, and after giving effect to, any Restricted Payment permitted
under
clauses (6), (7), (10) and (11), no Default shall have occurred and be
continuing or would occur as a consequence thereof.
As
of the
Issue Date, all of the Issuer’s Subsidiaries are Restricted Subsidiaries. The
Issuer is prohibited from permitting any Unrestricted Subsidiary to become
a
Restricted Subsidiary except pursuant to the definition of “Unrestricted
Subsidiary.” For purposes of designating any Restricted Subsidiary as an
Unrestricted Subsidiary, all outstanding Investments by the Issuer and its
Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so
designated will be deemed to be Restricted Payments in an amount determined
as
set forth in the last sentence of the definition of “Investments.” Such
designation will only be permitted if a Restricted Payment in such amount
would
be permitted at such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.
Dividend
and Other Payment Restrictions Affecting Subsidiaries.
The
Indenture provides that the Issuer will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or
suffer to exist or become effective any consensual encumbrance or consensual
restriction on the ability of any Restricted Subsidiary to:
|
(a)
|
(i) pay
dividends or make any other distributions to the Issuer or any
of its
Restricted Subsidiaries (1) on its Capital Stock; or (2) with
respect to any other interest or participation in, or measured
by, its
profits; or (ii) pay any Indebtedness owed to the Issuer or any of
its Restricted Subsidiaries;
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|
(b)
|
make
loans or advances to the Issuer or any of its Restricted Subsidiaries;
or
|
|
(c)
|
sell,
lease or transfer any of its properties or assets to the Issuer
or any of
its Restricted Subsidiaries;
|
except
in
each case for such encumbrances or restrictions existing under or by reason
of:
|
(1)
|
contractual
encumbrances or restrictions in effect on the Issue Date, including
pursuant to the Credit Agreement and the other Credit Agreement
Documents;
|
|
(2)
|
(i) the
Indenture, the notes, the Security Documents and the Intercreditor
Agreement and (ii) the Senior Subordinated Note Purchase Agreement
(as defined under “Description of Other Indebtedness”), the Senior
Subordinated Notes and the indenture governing the Senior Subordinated
Notes;
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|
(3)
|
applicable
law or any applicable rule, regulation or order;
|
|
(4)
|
any
agreement or other instrument relating to Indebtedness of a Person
acquired by the Issuer or any Restricted Subsidiary which was in
existence
at the time of such acquisition (but not created in contemplation
thereof
or to provide all or any portion of the funds or credit support
utilized
to consummate such acquisition), which encumbrance or restriction
is not
applicable to any Person, or the properties or assets of any Person,
other
than the Person, or the property or assets of the Person, so acquired;
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|
(5)
|
contracts
or agreements for the sale of assets, including any restriction
with
respect to a Restricted Subsidiary imposed pursuant to an agreement
entered into for the sale or disposition of the Capital Stock or
assets of
such Restricted Subsidiary pending the closing of such sale or
disposition;
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|
(6)
|
Secured
Indebtedness otherwise permitted to be Incurred pursuant to the
covenants
described under “—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock” and “—Liens” that limit the right
of the debtor to dispose of the assets securing such Indebtedness;
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|
(7)
|
restrictions
on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business;
|
|
(8)
|
customary
provisions in joint venture agreements and other similar agreements
entered into in the ordinary course of business;
|
|
(9)
|
purchase
money obligations for property acquired in the ordinary course
of business
that impose restrictions of the nature discussed in clause (c) above
on the property so acquired;
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|
(10)
|
customary
provisions contained in leases, licenses and other similar agreements
entered into in the ordinary course of business that impose restrictions
of the type described in clause (c) above on the property subject to
such lease;
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|
(11)
|
any
encumbrance or restriction of a Receivables Subsidiary effected
in
connection with a Qualified Receivables Financing;
provided
,
however
,
that such restrictions apply only to such Receivables Subsidiary;
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|
(12)
|
other
Indebtedness, Disqualified Stock or Preferred Stock of any Restricted
Subsidiary of the Issuer (i) that is a Note Guarantor that is
Incurred subsequent to the Issue Date pursuant to the covenant
described
under “—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock” or (ii) that is Incurred by a
Foreign Subsidiary of the Issuer subsequent to the Issue Date pursuant
to
clause (d), (l) or (t) of the second paragraph of the covenant
described under “—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock”;
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|
(13)
|
any
Restricted Investment not prohibited by the covenant described
under
“—Limitation on Restricted Payments” and any Permitted Investment; or
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|
(14)
|
any
encumbrances or restrictions of the type referred to in clauses
(a),
(b) and (c) above imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements
or refinancings of the contracts, instruments or obligations referred
to
in clauses (1) through (13) above;
provided
that
such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the
good
faith judgment of the Issuer, no more restrictive with respect
to such
dividend and other payment restrictions than those contained in
the
dividend or other payment restrictions prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
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For
purposes of determining compliance with this covenant, (1) the priority of
any Preferred Stock in receiving dividends or liquidating distributions prior
to
dividends or liquidating distributions being paid on common stock shall not
be
deemed a restriction on the ability to make distributions on Capital Stock
and
(2) the subordination of loans or advances made to the Issuer or a
Restricted Subsidiary of the Issuer to other Indebtedness Incurred by the
Issuer
or any such Restricted Subsidiary shall not be deemed a restriction on the
ability to make loans or advances.
Asset
Sales.
The
Indenture provides that the Issuer will not, and will not permit any of its
Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) the
Issuer or any of its Restricted Subsidiaries, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value (as determined in good faith by the Issuer) of the assets sold or
otherwise disposed of, and (y) at least 75% of the consideration therefor
received by the Issuer or such Restricted Subsidiary, as the case may be,
is in
the form of Cash Equivalents;
provided
that the
amount of:
|
(a)
|
any
liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most
recent balance sheet or in the notes thereto) of the Issuer or
any
Restricted Subsidiary of the Issuer (other than liabilities that
are by
their terms subordinated to the notes or any Note Guarantee) that
are
assumed by the transferee of any such assets,
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|
(b)
|
any
notes or other obligations or other securities or assets received
by the
Issuer or such Restricted Subsidiary of the Issuer from such transferee
that are converted by the Issuer or such Restricted Subsidiary
of the
Issuer into cash within 180 days of the receipt thereof (to the
extent of
the cash received), and
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|
(c)
|
any
Designated Non-cash Consideration received by the Issuer or any
of its
Restricted Subsidiaries in such Asset Sale having an aggregate
Fair Market
Value, taken together with all other Designated Non-cash Consideration
received pursuant to this clause (c) that is at that time
outstanding, not to exceed the greater of 2.0% of Total Assets
and $50.0
million at the time of the receipt of such Designated Non-cash
Consideration (with the Fair Market Value of each item of Designated
Non-cash Consideration being measured at the time received and
without
giving effect to subsequent changes in value)
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shall
be
deemed to be Cash Equivalents for the purposes of this provision.
Within
365 days after the Issuer’s or any Restricted Subsidiary of the Issuer’s receipt
of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary
of the Issuer may apply the Net Proceeds from such Asset Sale, at its option:
|
(1)
|
to
repay Indebtedness constituting First Priority Lien Obligations
(and, if
the Indebtedness repaid is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto), Indebtedness
of
a Foreign Subsidiary or Pari Passu Indebtedness (
provided
that if the Issuer or any Note Guarantor shall so reduce Obligations
under
Pari Passu Indebtedness (other than any First Priority Lien Obligation),
the Issuer will equally and ratably reduce Obligations under the
notes
through open-market purchases (
provided
that such purchases are at or above 100% of the principal amount
thereof)
or by making an offer (in accordance with the procedures set forth
below
for an Asset Sale Offer) to all holders to purchase at a purchase
price
equal to 100% of the principal amount thereof, plus accrued and
unpaid
interest and additional interest, if any, the pro rata principal
amount of
notes) or Indebtedness of a Restricted Subsidiary that is not a
Note
Guarantor, in each case other than Indebtedness owed to the Issuer
or an
Affiliate of the Issuer,
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|
(2)
|
to
make an investment in any one or more businesses (provided that
if such
investment is in the form of the acquisition of Capital Stock of
a Person,
such acquisition results in such Person becoming a Restricted Subsidiary
of the Issuer), assets, or property or capital expenditures, in
each case
used or useful in a Similar Business, or
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|
(3)
|
to
make an investment in any one or more businesses (provided that
if such
investment is in the form of the acquisition of Capital Stock of
a Person,
such acquisition results in such Person becoming a Restricted Subsidiary
of the Issuer), properties or assets that replace the properties
and
assets that are the subject of such Asset Sale.
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In
the
case of clauses (2) and (3) above, a binding commitment shall be
treated as a permitted application of the Net Proceeds from the date of such
commitment;
provided
that in
the event such binding commitment is later canceled or terminated for any
reason
before such Net Proceeds are so applied, the Issuer or such Restricted
Subsidiary enters into another binding commitment within nine months of such
cancellation or termination of the prior binding commitment;
provided
,
further
that the
Issuer or such Restricted Subsidiary may only enter into such a commitment
under
the foregoing provision one time with respect to each Asset Sale.
Pending
the final application of any such Net Proceeds, the Issuer or such Restricted
Subsidiary of the Issuer may temporarily reduce Indebtedness under a revolving
credit facility, if any, or otherwise invest such Net Proceeds in Cash
Equivalents or Investment Grade Securities. Any Net Proceeds from any Asset
Sale
that are not applied as provided and within the time period set forth in
the
first sentence of this paragraph (it being understood that any portion of
such
Net Proceeds used to make an offer to purchase notes, as described in clause
(1) above, shall be deemed to have been invested whether or not such offer
is accepted) will be deemed to constitute “Excess Proceeds.” When the aggregate
amount of Excess Proceeds exceeds $15.0 million, the Issuer shall make an
offer
to all holders of notes (and, at the option of the Issuer, to holders of
any
Pari Passu Indebtedness) (an “Asset Sale Offer”) to purchase the maximum
principal amount of notes (and such Pari Passu Indebtedness), that is at
least
$2,000 and an integral multiple of $1,000 that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof (or, in the event such Pari Passu Indebtedness was
issued with significant original issue discount, 100% of the
accreted
value thereof), plus accrued and unpaid interest and additional interest,
if any
(or, in respect of such Pari Passu Indebtedness, such lesser price, if any,
as
may be provided for by the terms of such Pari Passu Indebtedness), to the
date
fixed for the closing of such offer, in accordance with the procedures set
forth
in the Indenture. The Issuer will commence an Asset Sale Offer with respect
to
Excess Proceeds within ten (10) Business Days after the date that Excess
Proceeds exceeds $15.0 million by mailing the notice required pursuant to
the
terms of the Indenture, with a copy to the Trustee. To the extent that the
aggregate amount of notes (and such Pari Passu Indebtedness) tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use
any
remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount of notes (and such Pari Passu Indebtedness) surrendered
by
holders thereof exceeds the amount of Excess Proceeds, the Trustee shall
select
the notes to be purchased in the manner described below. Upon completion
of any
such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The
Issuer will comply with the requirements of Rule 14e-1 under the Exchange
Act
and any other securities laws and regulations to the extent such laws or
regulations are applicable in connection with the repurchase of the notes
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of the Indenture,
the Issuer will comply with the applicable securities laws and regulations
and
shall not be deemed to have breached its obligations described in the Indenture
by virtue thereof.
If
more
notes (and such Pari Passu Indebtedness) are tendered pursuant to an Asset
Sale
Offer than the Issuer is required to purchase, selection of such notes for
purchase 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 so listed, on a pro rata basis, by lot or by such
other
method as the Trustee shall deem fair and appropriate (and in such manner
as
complies with applicable legal requirements);
provided
that no
notes of $2,000 or less shall be purchased in part. Selection of such Pari
Passu
Indebtedness will be made pursuant to the terms of such Pari Passu Indebtedness.
Notices
of an Asset Sale Offer shall be mailed by first class mail, postage prepaid,
at
least 30 but not more than 60 days before the purchase date to each holder
of
notes at such holder’s registered address. If any note is to be purchased in
part only, any notice of purchase that relates to such note shall state the
portion of the principal amount thereof that has been or is to be purchased.
The
Credit Agreement provides that certain asset sale events with respect to
the
Issuer constitute a default under the Credit Agreement. Any future credit
agreements or similar agreements to which the Issuer becomes a party may
contain
similar restrictions and provisions. In the event that an Asset Sale occurs
at a
time when the Issuer is prohibited from purchasing notes, the Issuer could
seek
the consent of its lenders, including the lenders under the Credit Agreement,
to
purchase the notes or could attempt to refinance the borrowings that contain
such prohibition. If the Issuer does not obtain such a consent or repay such
borrowings, the Issuer will remain prohibited from purchasing notes. In such
case, the Issuer’s failure to purchase tendered notes would constitute an Event
of Default under the Indenture that would, in turn, constitute a default
under
the Issuer’s other Indebtedness.
Transactions
with Affiliates.
The
Indenture provides that the Issuer will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any payment to,
or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend
any
transaction or series of transactions, contract, agreement, understanding,
loan,
advance or guarantee with, or for the
benefit
of, any Affiliate of the Issuer (each of the foregoing, an “Affiliate
Transaction”) involving aggregate consideration in excess of $10.0 million,
unless:
|
(a)
|
such
Affiliate Transaction is on terms that are not materially less favorable
to the Issuer or the relevant Restricted Subsidiary than those
that could
have been obtained in a comparable transaction by the Issuer or
such
Restricted Subsidiary with an unrelated Person; and
|
|
(b)
|
with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $25.0
million,
the Issuer delivers to the Trustee a resolution adopted in good
faith by
the majority of the Board of Directors of the Issuer, approving
such
Affiliate Transaction and set forth in an Officers’ Certificate certifying
that such Affiliate Transaction complies with clause (a) above.
|
The
foregoing provisions will not apply to the following:
|
(1)
|
transactions
between or among the Issuer and/or any of its Restricted Subsidiaries
and
any merger of the Issuer and any direct parent of the Issuer;
provided
that such parent shall have no material liabilities and no material
assets
other than cash, Cash Equivalents and the Capital Stock of the
Issuer and
such merger is otherwise in compliance with the terms of the Indenture
and
effected for a bona fide business purpose;
|
|
(2)
|
Restricted
Payments permitted by the provisions of the Indenture described
above
under the covenant “—Limitation on Restricted Payments” and Permitted
Investments;
|
|
(3)
|
(x) the
entering into of any agreement (and any amendment or modification
of any
such agreement) to pay, and the payment of, annual management,
consulting,
monitoring and advisory fees to the Sponsors in an aggregate amount
in any
fiscal year not to exceed the greater of (A) $3.0 million and
(B) 1.25% of EBITDA of the Issuer and its Restricted Subsidiaries for
the immediately preceding fiscal year, and out-of-pocket expense
reimbursement;
provided,
however
,
that any payment not made in any fiscal year may be carried forward
and
paid in the following two fiscal years and (y) the payment of the
present value of all amounts payable pursuant to any agreement
described
in clause 3(x) in connection with the termination of such agreement;
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|
(4)
|
the
payment of reasonable and customary fees and reimbursement of expenses
paid to, and indemnity provided on behalf of, officers, directors,
employees or consultants of the Issuer or any Restricted Subsidiary
or any
direct or indirect parent of the Issuer;
|
|
(5)
|
payments
by the Issuer or any of its Restricted Subsidiaries to the Sponsors
made
for any financial advisory, financing, underwriting or placement
services
or in respect of other investment banking activities, including,
without
limitation, in connection with acquisitions or divestitures, which
payments are (x) made pursuant to certain agreements between the
Issuer and the Sponsors described in this prospectus or (y) approved
by a majority of the Board of Directors of the Issuer in good faith;
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|
(6)
|
transactions
in which the Issuer or any of its Restricted Subsidiaries, as the
case may
be, delivers to the Trustee a letter from an Independent Financial
Advisor
stating that such transaction is fair to the Issuer or such Restricted
Subsidiary
|
from
a
financial point of view or meets the requirements of clause (a) of the
preceding paragraph;
|
(7)
|
payments
or loans (or cancellation of loans) to employees or consultants
which are
approved by a majority of the Board of Directors of the Issuer
in good
faith;
|
|
(8)
|
any
agreement as in effect as of the Issue Date or any amendment thereto
(so
long as any such agreement together with all amendments thereto,
taken as
a whole, is not more disadvantageous to the holders of the notes
in any
material respect than the original agreement as in effect on the
Issue
Date) or any transaction contemplated thereby as determined in
good faith
by senior management or the Board of Directors of the Issuer;
|
|
(9)
|
the
existence of, or the performance by the Issuer or any of its Restricted
Subsidiaries of its obligations under the terms of, Acquisition
Documents,
any stockholders agreement (including any registration rights agreement
or
purchase agreement related thereto) to which it is a party as of
the Issue
Date, and any transaction, agreement or arrangement described in
this
prospectus and, in each case, any amendment thereto or similar
transactions, agreements or arrangements which it may enter into
thereafter;
provided
,
however
,
that the existence of, or the performance by the Issuer or any
of its
Restricted Subsidiaries of its obligations under, any future amendment
to
any such existing transaction, agreement or arrangement or under
any
similar transaction, agreement or arrangement entered into after
the Issue
Date shall only be permitted by this clause (9) to the extent that
the terms of any such existing transaction, agreement or arrangement
together with all amendments thereto, taken as a whole, or new
transaction, agreement or arrangement are not otherwise more
disadvantageous to the holders of the notes in any material respect
than
the original transaction, agreement or arrangement as in effect
on the
Issue Date;
|
|
(10)
|
the
execution of the Acquisition and the payment of all fees and expenses
related to the Acquisition, including fees to the Sponsors;
|
|
(11)
|
(a) transactions
with customers, clients, suppliers or purchasers or sellers of
goods or
services, or transactions otherwise relating to the purchase or
sale of
goods or services, in each case in the ordinary course of business
and
otherwise in compliance with the terms of the Indenture, which
are fair to
the Issuer and its Restricted Subsidiaries in the reasonable determination
of the Board of Directors or the senior management of the Issuer,
or are
on terms at least as favorable as might reasonably have been obtained
at
such time from an unaffiliated party or (b) transactions with joint
ventures or Unrestricted Subsidiaries entered into in the ordinary
course
of business;
|
|
(12)
|
any
transaction effected as part of a Qualified Receivables Financing;
|
|
(13)
|
the
issuance of Equity Interests (other than Disqualified Stock) of
the Issuer
to any Person;
|
|
(14)
|
the
issuances of securities or other payments, awards or grants in
cash,
securities or otherwise pursuant to, or the funding of, employment
arrangements, stock option and stock ownership plans or similar
employee
benefit plans approved by the Board of Directors of the Issuer
or any
direct or indirect parent of the Issuer or of a Restricted Subsidiary
of
the Issuer, as appropriate, in good faith;
|
|
(15)
|
the
entering into of any tax sharing agreement or arrangement and any
payments
permitted by clause (12) of the second paragraph of the covenant
described under “—Limitation on Restricted Payments”;
|
|
(16)
|
any
contribution to the capital of the Issuer;
|
|
(17)
|
transactions
permitted by, and complying with, the provisions of the covenant
described
under “—Merger, Amalgamation, Consolidation or Sale of All or
Substantially All Assets”;
|
|
(18)
|
transactions
between the Issuer or any of its Restricted Subsidiaries and any
Person, a
director of which is also a director of the Issuer or any direct
or
indirect parent of the Issuer;
provided
,
however
,
that such director abstains from voting as a director of the Issuer
or
such direct or indirect parent, as the case may be, on any matter
involving such other Person;
|
|
(19)
|
pledges
of Equity Interests of Unrestricted Subsidiaries;
|
|
(20)
|
any
employment agreements entered into by the Issuer or any of its
Restricted
Subsidiaries in the ordinary course of business; and
|
|
(21)
|
intercompany
transactions undertaken in good faith (as certified by a responsible
financial or accounting officer of the Issuer in an Officers’ Certificate)
for the purpose of improving the consolidated tax efficiency of
the Issuer
and its Subsidiaries and not for the purpose of circumventing any
covenant
set forth in the Indenture.
|
Liens
.
The
Indenture provides that the Issuer will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer
to
exist (i) any Lien on any asset or property of the Issuer or such
Restricted Subsidiary securing Indebtedness unless the notes are equally
and
ratably secured with (or on a senior basis to, in the case of obligations
subordinated in right of payment to the notes) the obligations so secured
until
such time as such obligations are no longer secured by a Lien or (ii) any
Lien securing any First Priority Lien Obligation of the Issuer or any Note
Guarantor without effectively providing that the notes or the applicable
Note
Guarantee, as the case may be, shall be granted a second priority security
interest (subject to Permitted Liens) upon the assets or property constituting
the collateral for such First Priority Lien Obligations, except as set forth
under “—Security for the Notes”;
provided,
however,
that
if
granting such second priority security interest requires the consent of a
third
party, the Issuer will use commercially reasonable efforts to obtain such
consent with respect to the second priority security interest for the benefit
of
the Trustee on behalf of the holders of the notes;
provided,
further, however,
that
if
such third party does not consent to the granting of such second priority
security interest after the use of commercially reasonable efforts, the Issuer
will not be required to provide such security interest.
Clause (i)
of the preceding paragraph will not require the Issuer or any Restricted
Subsidiary of the Issuer to secure the notes if the Lien consists of a Permitted
Lien. Any Lien which is granted to secure the notes or such Note Guarantee
under
clause (i) of the preceding paragraph (unless also granted pursuant to
clause (ii) of the preceding paragraph) shall be automatically released and
discharged at the same time as the release of the Lien that gave rise to
the
obligation to secure the notes or such Note Guarantee under such
clause (i).
Reports
and Other Information.
The
Indenture provides that notwithstanding that the Issuer may not be subject
to
the reporting requirements of Section 13 or 15(d) of the Exchange Act or
otherwise report on an annual and quarterly basis on forms provided for such
annual and quarterly reporting pursuant to rules and regulations promulgated
by
the SEC, the Issuer will file
with
the
SEC (and provide the Trustee and holders with copies thereof, without cost
to
each holder, within 15 days after it files them with the SEC),
|
(1)
|
within
the time period specified in the SEC’s rules and regulations, annual
reports on Form 10-K (or any successor or comparable form) containing
the
information required to be contained therein (or required in such
successor or comparable form),
|
|
(2)
|
within
the time period specified in the SEC’s rules and regulations, reports on
Form 10-Q (or any successor or comparable form) containing the
information
required to be contained therein (or required in such successor
or
comparable form),
|
|
(3)
|
promptly
from time to time after the occurrence of an event required to
be therein
reported (and in any event within the time period specified in
the SEC’s
rules and regulations), such other reports on Form 8-K (or any
successor
or comparable form), and
|
|
(4)
|
any
other information, documents and other reports which the Issuer
would be
required to file with the SEC if it were subject to Section 13 or
15(d) of the Exchange Act;
|
provided
,
however
,
that
the Issuer shall not be so obligated to file such reports with the SEC if
the
SEC does not permit such filing, in which event the Issuer will make available
such information to prospective purchasers of notes, including by posting
such
reports on the primary website of the Issuer or its subsidiaries, in addition
to
providing such information to the Trustee and the holders, in each case within
15 days after the time the Issuer would be required to file such
information with the SEC if it were subject to Section 13 or 15(d) of the
Exchange Act.
In
the
event that:
|
(a)
|
the
rules and regulations of the SEC permit the Issuer and any direct
or
indirect parent of the Issuer to report at such parent entity’s level on a
consolidated basis; and
|
|
(b)
|
such
parent entity of the Issuer is not engaged in any business in any
material
respect other than incidental to its ownership, directly or indirectly,
of
the capital stock of the Issuer,
|
such
consolidated reporting at such parent entity’s level in a manner consistent with
that described in this covenant for the Issuer will satisfy this covenant.
In
addition, the Issuer has agreed that, for so long as any notes remain
outstanding during any period when it is not subject to Section 13 or 15(d)
of the Exchange Act, or otherwise permitted to furnish the SEC with certain
information pursuant to Rule 12g3-2(b) of the Exchange Act, it will furnish
to
the holders of the notes and to prospective investors, upon their request,
the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Notwithstanding
the foregoing, the Issuer will be deemed to have furnished such reports referred
to above to the Trustee and the holders if the Issuer has filed such reports
with the SEC via the EDGAR filing system and such reports are publicly
available. In addition, such requirements shall be deemed satisfied prior
to the
commencement of the exchange offer covered by this prospectus by the filing
with
the SEC of the exchange offer registration statement and/or shelf registration
statement in accordance with the provisions of such Registration Rights
Agreement, and any amendments thereto, and such registration
statement
and/or
amendments thereto are filed at times that otherwise satisfy the time
requirements set forth in the first paragraph of the description of this
covenant.
In
the
event that any direct or indirect parent of the Issuer is or becomes a Note
Guarantor of the notes, the Indenture will permit the Issuer to satisfy its
obligations in this covenant with respect to financial information relating
to
the Issuer by furnishing financial information relating to such direct or
indirect parent;
provided
that the
same is accompanied by consolidating information that explains in reasonable
detail the differences between the information relating to such direct or
indirect parent and any of its Subsidiaries other than the Issuer and its
Subsidiaries, on the one hand, and the information relating to the Issuer,
the
Note Guarantors and the other Subsidiaries of the Issuer on a standalone
basis,
on the other hand.
Future
Note Guarantors.
The
Indenture provides that the Issuer will cause each Restricted Subsidiary
that is
a Domestic Subsidiary (unless such Subsidiary is a Receivables Subsidiary)
that:
|
(a)
|
guarantees
any Indebtedness of the Issuer or any of its Restricted Subsidiaries;
or
|
|
(b)
|
incurs
any Indebtedness or issues any shares of Disqualified Stock permitted
to
be Incurred or issued pursuant to clauses (a) or (l) of the
second paragraph of the covenant described under “—Limitation on
Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock” or not permitted to be Incurred by such
covenant,
|
to
execute and deliver to the Trustee a supplemental indenture pursuant to which
such Subsidiary will guarantee payment of the notes. Each Note Guarantee
will be
limited to an amount not to exceed the maximum amount that can be guaranteed
by
that Restricted Subsidiary without rendering the Note Guarantee, as it relates
to such Restricted Subsidiary, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
Each
Note
Guarantee shall be released in accordance with the provisions of the Indenture
described under “—Note Guarantees.”
Amendment
of Security Documents.
The
Issuer shall not amend, modify or supplement, or permit or consent to any
amendment, modification or supplement of, the Security Documents in any way
that
would be adverse to the holders of the notes in any material respect, except
as
described above under “—Security for the Notes” or as permitted under
“—Amendments and Waivers.”
After-Acquired
Property.
The
Indenture will provide that upon the acquisition by any Issuer or any Note
Guarantor of any First Priority After-Acquired Property, the Issuer or such
Note
Guarantor shall execute and deliver such mortgages, deeds of trust, security
instruments, financing statements and certificates and opinions of counsel
as
shall be reasonably necessary to vest in the Trustee a perfected security
interest, subject only to Permitted Liens, in such First Priority After-Acquired
Property and to have such First Priority After-Acquired Property (but subject
to
certain limitations, if applicable, including as described under “—Security for
the Notes”) added to the Collateral, and thereupon all provisions of the
Indenture relating to the Collateral shall be deemed to relate to such First
Priority After-Acquired Property to the same extent and with the same force
and
effect;
provided,
however,
that
if
granting such second priority security interest in such First Priority
After-Acquired Property requires the consent of a third party, the Issuer
will
use commercially reasonable efforts to obtain such consent with respect to
the
second priority interest for the benefit of the Trustee on behalf of the
holders
of
the
notes;
provided
further, however
,
that if
such third party does not consent to the granting of such second priority
security interest after the use of such commercially reasonable efforts,
the
Issuer or such Note Guarantor, as the case may be, will not be required to
provide such security interest.
Merger,
Amalgamation, Consolidation or Sale of All or Substantially All Assets
The
Indenture provides that the Issuer may not, directly or indirectly, consolidate,
amalgamate or merge with or into or wind up or convert into (whether or not
the
Issuer is the surviving Person), or sell, assign, transfer, lease, convey
or
otherwise dispose of all or substantially all of its properties or assets
in one
or more related transactions, to any Person unless:
|
(1)
|
the
Issuer is the surviving person or the Person formed by or surviving
any
such consolidation, amalgamation, merger, winding up or conversion
(if
other than the Issuer) or to which such sale, assignment, transfer,
lease,
conveyance or other disposition will have been made is a corporation,
partnership or limited liability company organized or existing
under the
laws of the United States, any state thereof, the District of Columbia,
or
any territory thereof (the Issuer or such Person, as the case may
be,
being herein called the “Successor Company”);
provided
that in the case where the surviving Person is not a corporation,
a
co-obligor of the notes is a corporation;
|
|
(2)
|
the
Successor Company (if other than the Issuer) expressly assumes
all the
obligations of the Issuer under the Indenture, the notes and the
Security
Documents pursuant to supplemental indentures or other documents
or
instruments in form reasonably satisfactory to the Trustee;
|
|
(3)
|
immediately
after giving effect to such transaction (and treating any Indebtedness
which becomes an obligation of the Successor Company or any of
its
Restricted Subsidiaries as a result of such transaction as having
been
Incurred by the Successor Company or such Restricted Subsidiary
at the
time of such transaction) no Default shall have occurred and be
continuing;
|
|
(4)
|
immediately
after giving pro forma effect to such transaction, as if such transaction
had occurred at the beginning of the applicable four-quarter period
(and
treating any Indebtedness which becomes an obligation of the Successor
Company or any of its Restricted Subsidiaries as a result of such
transaction as having been Incurred by the Successor Company or
such
Restricted Subsidiary at the time of such transaction), either
|
|
(a)
|
the
Successor Company would be permitted to Incur at least $1.00 of
additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in
the first sentence of the covenant described under “—Certain
Covenants—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock”; or
|
|
(b)
|
the
Fixed Charge Coverage Ratio for the Successor Company and its Restricted
Subsidiaries would be greater than such ratio for the Issuer and
its
Restricted Subsidiaries immediately prior to such transaction;
|
|
(5)
|
each
Note Guarantor, unless it is the other party to the transactions
described
above, shall have by supplemental indenture confirmed that its
Note
Guarantee shall apply to such Person’s obligations under the Indenture and
the notes; and
|
|
(6)
|
the
Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger
or
transfer and such supplemental indentures (if any) comply with
the
Indenture.
|
The
Successor Company (if other than the Issuer) will succeed to, and be substituted
for, the Issuer under the Indenture, the notes and the Security Documents,
and
in such event the Issuer will automatically be released and discharged from
its
obligations under the Indenture, the notes and the Security Documents.
Notwithstanding the foregoing clauses (3) and (4), (a) any Restricted
Subsidiary may merge, consolidate or amalgamate with or transfer all or part
of
its properties and assets to the Issuer or to another Restricted Subsidiary,
and
(b) the Issuer may merge, consolidate or amalgamate with an Affiliate
incorporated solely for the purpose of reincorporating the Issuer in another
state of the United States, the District of Columbia or any territory of
the
United States or may convert into a limited liability company, so long as
the
amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not
increased thereby. This “—Merger, Amalgamation, Consolidation or Sale of All or
Substantially All Assets” will not apply to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Issuer and
its
Restricted Subsidiaries.
The
Indenture further provides that, subject to certain provisions in the Indenture
governing release of a Note Guarantee upon the sale or disposition of a
Restricted Subsidiary of the Issuer that is a Note Guarantor, no Note Guarantor
will, and the Issuer will not permit any Note Guarantor to, consolidate,
amalgamate or merge with or into or wind up into (whether or not such Note
Guarantor is the surviving Person), or sell, assign, transfer, lease, convey
or
otherwise dispose of all or substantially all of its properties or assets
in one
or more related transactions to, any Person (other than any such sale,
assignment, transfer, lease, conveyance or disposition in connection with
the
Acquisition) unless:
|
(1)
|
either
(a) such Note Guarantor is the surviving Person or the Person formed
by or surviving any such consolidation, amalgamation or merger
(if other
than such Note Guarantor) or to which such sale, assignment, transfer,
lease, conveyance or other disposition will have been made is a
corporation, partnership or limited liability company organized
or
existing under the laws of the United States, any state thereof,
the
District of Columbia, or any territory thereof (such Note Guarantor
or
such Person, as the case may be, being herein called the “Successor Note
Guarantor”) and the Successor Note Guarantor (if other than such Note
Guarantor) expressly assumes all the obligations of such Note Guarantor
under the Indenture, such Note Guarantors’ Note Guarantee and the Security
Documents pursuant to a supplemental indenture or other documents
or
instruments in form reasonably satisfactory to the Trustee, or
(b) such sale or disposition or consolidation, amalgamation or merger
is not in violation of the covenant described above under the caption
“—Certain Covenants—Asset Sales”; and
|
|
(2)
|
the
Successor Note Guarantor (if other than such Note Guarantor) shall
have
delivered or caused to be delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that such
consolidation, amalgamation, merger or transfer and such supplemental
indenture (if any) comply with the Indenture.
|
Subject
to certain limitations described in the Indenture, the Successor Note Guarantor
(if other than such Note Guarantor) will succeed to, and be substituted for,
such Note Guarantor under the Indenture, such Note Guarantor’s Note Guarantee
and the Security Documents, and such Note Guarantor will automatically be
released and discharged from its obligations under the Indenture, such Note
Guarantor’s Note Guarantee and the Security Documents.
Notwithstanding
the foregoing, (1) a Note Guarantor may merge, amalgamate or consolidate
with an Affiliate incorporated solely for the purpose of reincorporating
such
Note Guarantor in another state of the United States, the District of Columbia
or any territory of the United States so long as the amount of Indebtedness
of
the Note Guarantor is not increased thereby and (2) a Note Guarantor may
merge, amalgamate or consolidate with another Note Guarantor or the Issuer.
In
addition, notwithstanding the foregoing, any Note Guarantor may consolidate,
amalgamate or merge with or into or wind up into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets (collectively, a “Transfer”) to (x) the Issuer or any Note
Guarantor or (y) any Restricted Subsidiary of the Issuer that is not a Note
Guarantor;
provided
that at
the time of each such Transfer pursuant to clause (y) the aggregate amount
of all such Transfers since the Issue Date shall not exceed 5.0% of the
consolidated assets of the Issuer and the Note Guarantors as shown on the
most
recent available balance sheet of the Issuer and the Restricted Subsidiaries
after giving effect to each such Transfer and including all Transfers occurring
from and after the Issue Date (excluding Transfers in connection with the
Acquisition).
Upon
consummation of the Acquisition, the Issuer executed and delivered to the
Trustee a supplemental indenture of the type referred to in the first clause
(2) under this heading “—Merger, Amalgamation, Consolidation or Sale of All
or Substantially All Assets,” pursuant to which the Issuer is the Successor
Company and has succeeded to, and been substituted for, and may exercise
every
right and power of, Merger Sub under the Indenture.
Defaults
An
Event
of Default is defined in the Indenture as:
|
(1)
|
a
default in any payment of interest (including any additional interest)
on
any note of such series when due, continued for 30 days,
|
|
(2)
|
a
default in the payment of principal or premium, if any, of any
note of
such series when due at its Stated Maturity, upon optional redemption,
upon required repurchase, upon declaration or otherwise,
|
|
(3)
|
the
failure by the Issuer or any of Restricted Subsidiaries to comply
with the
covenant described under “—Merger, Amalgamation, Consolidation or Sale of
All or Substantially All Assets” above,
|
|
(4)
|
the
failure by the Issuer or any of Restricted Subsidiaries to comply
for 60
days after notice with its other agreements contained in the notes
of such
series or the Indenture,
|
|
(5)
|
the
failure by the Issuer or any Significant Subsidiary to pay any
Indebtedness (other than Indebtedness owing to the Issuer or a
Restricted
Subsidiary) within any applicable grace period after final maturity
or the
acceleration of any such Indebtedness by the holders thereof because
of a
default, in each case, if the total amount of such Indebtedness
unpaid or
accelerated exceeds $25.0 million or its foreign currency equivalent
(the
“cross-acceleration provision”),
|
|
(6)
|
certain
events of bankruptcy, insolvency or reorganization of the Issuer
or a
Significant Subsidiary (the “bankruptcy provisions”),
|
|
(7)
|
failure
by the Issuer or any Significant Subsidiary to pay final judgments
aggregating in excess of $25.0 million or its foreign currency
equivalent
(net of
|
any
amounts which are covered by enforceable insurance policies issued by solvent
carriers), which judgments are not discharged, waived or stayed for a period
of
60 days (the “judgment default provision”),
|
(8)
|
any
Note Guarantee of a Significant Subsidiary with respect to such
series of
notes ceases to be in full force and effect (except as contemplated
by the
terms thereof) or any Note Guarantor denies or disaffirms its obligations
under the Indenture or any Note Guarantee with respect to such
series of
Notes and such Default continues for 10 days,
|
|
(9)
|
unless
all of the Collateral has been released from the second priority
Liens in
accordance with the provisions of the Security Documents with respect
to
such series of notes, the Issuer shall assert or any Note Guarantor
shall
assert, in any pleading in any court of competent jurisdiction,
that any
such security interest is invalid or unenforceable and, in the
case of any
such Person that is a Subsidiary of the Issuer, the Issuer fails
to cause
such Subsidiary to rescind such assertions within 30 days after
the Issuer
has actual knowledge of such assertions, or
|
|
(10)
|
the
failure by the Issuer or any Note Guarantor to comply for 60 days
after
notice with its other agreements contained in the Security Documents
except for a failure that would not be material to the holders
of the
notes of such series and would not materially affect the value
of the
Collateral taken as a whole (together with the defaults described
in
clauses (8) and (9) the “security default provisions”).
|
The
foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected
by
operation of law or pursuant to any judgment, decree or order of any court
or
any order, rule or regulation of any administrative or governmental body.
However,
a default under clauses (4) or (10) will not constitute an Event of
Default until the Trustee or the holders of 25% in principal amount of
outstanding notes of such series notify the Issuer of the default and the
Issuer
does not cure such default within the time specified in clause (4) or
(10) hereof after receipt of such notice.
If
an
Event of Default (other than a Default relating to certain events of bankruptcy,
insolvency or reorganization of the Issuer) occurs with respect to a series
of
notes and is continuing, the Trustee or the holders of at least 25% in principal
amount of outstanding notes of such series by notice to the Issuer may declare
the principal of, premium, if any, and accrued but unpaid interest on all
the
Senior Subordinated Notes of such series to be due and payable;
provided
,
however
,
that so
long as any Bank Indebtedness remains outstanding, no such acceleration shall
be
effective until the earlier of (1) five Business Days after the giving of
written notice to the Issuer and the Representative under the Credit Agreement
and (2) the day on which any Bank Indebtedness is accelerated. Upon such a
declaration, such principal and interest will be due and payable immediately.
If
an Event of Default relating to certain events of bankruptcy, insolvency
or
reorganization of the Issuer occurs, the principal of, premium, if any, and
interest on all the notes will become immediately due and payable without
any
declaration or other act on the part of the Trustee or any holders. Under
certain circumstances, the holders of a majority in principal amount of
outstanding notes may rescind any such acceleration with respect to the notes
and its consequences.
In
the
event of any Event of Default specified in clause (5) of the first
paragraph above, such Event of Default and all consequences thereof (excluding,
however, any resulting payment default) will be annulled, waived and rescinded,
automatically and without any action by the
Trustee
or the holders of the notes, if within 20 days after such Event of Default
arose
the Issuer deliver an Officers’ Certificate to the Trustee stating that
(x) the Indebtedness or guarantee that is the basis for such Event of
Default has been discharged or (y) the holders thereof have rescinded or
waived the acceleration, notice or action (as the case may be) giving rise
to
such Event of Default or (z) the default that is the basis for such Event
of Default has been cured, it being understood that in no event shall an
acceleration of the principal amount of the notes as described above be
annulled, waived or rescinded upon the happening of any such events.
Subject
to the provisions of the Indenture relating to the duties of the Trustee,
in
case an Event of Default occurs and is continuing, the Trustee will be under
no
obligation to exercise any of the rights or powers under the Indenture at
the
request or direction of any of the holders unless such holders have offered
to
the Trustee reasonable indemnity or security against any loss, liability
or
expense. Except to enforce the right to receive payment of principal, premium
(if any) or interest when due, no holder may pursue any remedy with respect
to
the Indenture or the notes unless:
|
(1)
|
such
holder has previously given the Trustee notice that an Event of
Default is
continuing,
|
|
(2)
|
holders
of at least 25% in principal amount of the outstanding notes of
the
applicable series have requested the Trustee to pursue the remedy,
|
|
(3)
|
such
holders have offered the Trustee reasonable security or indemnity
against
any loss, liability or expense,
|
|
(4)
|
the
Trustee has not complied with such request within 60 days after
the
receipt of the request and the offer of security or indemnity,
and
|
|
(5)
|
the
holders of a majority in principal amount of the outstanding notes
of the
applicable series have not given the Trustee a direction inconsistent
with
such request within such 60-day period.
|
Subject
to certain restrictions, the holders of a majority in principal amount of
outstanding notes are given the right to direct the time, method and place
of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture
or
that the Trustee determines is unduly prejudicial to the rights of any other
holder or that would involve the Trustee in personal liability. Prior to
taking
any action under the Indenture, the Trustee will be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses
caused
by taking or not taking such action.
The
Indenture provides that if a Default occurs and is continuing and is actually
known to the Trustee, the Trustee must mail to each holder of notes notice
of
the Default within the earlier of 90 days after it occurs or 30 days after
it is
actually known to a Trust Officer or written notice of it is received by
the
Trustee. Except in the case of a Default in the payment of principal of,
premium
(if any) or interest on any note, the Trustee may withhold notice if and
so long
as a committee of its Trust Officers in good faith determines that withholding
notice is in the interests of the noteholders. In addition, the Issuer is
required to deliver to the Trustee, within 120 days after the end of each
fiscal
year, a certificate indicating whether the signers thereof know of any Default
that occurred during the previous year. The Issuer also is required to deliver
to the Trustee, within 30 days after the occurrence thereof, written notice
of
any event which would constitute certain Defaults, their status and what
action
the Issuer is taking or proposes to take in respect thereof.
Amendments
and Waivers
Subject
to certain exceptions, the Indenture and the Security Documents may be amended
with respect to each series of notes with the consent of the holders of a
majority in principal amount of the notes of such series then outstanding
and
any past default or compliance with any provisions may be waived with the
consent of the holders of a majority in principal amount of the notes of
such
series then outstanding. However, without the consent of each holder of an
outstanding note affected, no amendment may, among other things:
|
(1)
|
reduce
the amount of notes whose holders must consent to an amendment,
|
|
(2)
|
reduce
the rate of or extend the time for payment of interest on any note,
|
|
(3)
|
reduce
the principal of or change the Stated Maturity of any note,
|
|
(4)
|
reduce
the premium payable upon the redemption of any note or change the
time at
which any note may be redeemed as described under “—Optional Redemption”
above,
|
|
(5)
|
make
any note payable in money other than that stated in such note,
|
|
(6)
|
expressly
subordinate the notes or any Note Guarantee to any other Indebtedness
of
the Issuer or any Note Guarantor;
|
|
(7)
|
impair
the right of any holder to receive payment of principal of, premium,
if
any, and interest on such holder’s notes on or after the due dates
therefor or to institute suit for the enforcement of any payment
on or
with respect to such holder’s notes,
|
|
(8)
|
make
any change in the amendment provisions which require each holder’s consent
or in the waiver provisions,
|
|
(9)
|
modify
any Note Guarantee in any manner adverse to the holders, or
|
|
(10)
|
make
any change in the provisions in the Intercreditor Agreement or
the
Indenture dealing with the application of proceeds of Collateral
that
would adversely affect the holders of the notes.
|
Without
the consent of the holders of at least two-thirds in aggregate principal
amount
of the notes of a series then outstanding, no amendment or waiver may release
all or substantially all of the Collateral from the Lien of the Indenture
and
the Security Documents with respect to the notes of such series.
Without
the consent of any holder, the Issuer and Trustee may amend the Indenture,
any
Security Document or the Intercreditor Agreement to cure any ambiguity,
omission, defect or inconsistency, to provide for the assumption by a Successor
Company of the obligations of the Issuer under the Indenture and the notes,
to
provide for the assumption by a Successor Guarantor of the obligations of
a Note
Guarantor under the Indenture and its Note Guarantee, to provide for
uncertificated notes in addition to or in place of certificated notes
(
provided
that the
uncertificated notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated
notes are described in Section 163(f)(2)(B) of the Code), to add a Note
Guarantee with respect to the notes, to secure the notes, to add additional
assets as Collateral, to release Collateral from the Lien pursuant to the
Indenture, the Security Documents and the Intercreditor Agreement when permitted
or required by the Indenture or the Security Documents, to modify the Security
Documents and/or the Intercreditor Agreement to secure additional extensions
of
credit and add additional secured creditors holding Other Second-Lien
Obligations so long as such Other Second-Lien Obligations are not prohibited
by
the provisions of the Credit Agreement or the Indenture, to add to the covenants
of the Issuer
for
the
benefit of the holders or to surrender any right or power conferred upon
the
Issuer, to make any change that does not adversely affect the rights of any
holder, to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA to effect any provision of the
Indenture or to make certain changes to the Indenture to provide for the
issuance of additional fixed rate notes or floating rate notes. In addition,
the
Intercreditor Agreement will provide that subject to certain exceptions,
any
amendment, waiver or consent to any of the collateral documents with respect
to
First Priority Lien Obligations will apply automatically to the comparable
Security Documents with respect to the Notes.
The
consent of the noteholders is not necessary under the Indenture to approve
the
particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
After
an
amendment under the Indenture becomes effective, the Issuer is required to
mail
to the respective noteholders a notice briefly describing such amendment.
However, the failure to give such notice to all noteholders entitled to receive
such notice, or any defect therein, will not impair or affect the validity
of
the amendment.
No
Personal Liability of Directors, Officers, Employees, Managers and Stockholders
No
director, officer, employee, manager, incorporator or holder of any Equity
Interests in the Issuer or any direct or indirect parent corporation, as
such,
will have any liability for any obligations of the Issuer under the notes,
the
Indenture, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of notes by accepting a note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the notes. The waiver may not be effective
to
waive liabilities under the federal securities laws.
Transfer
and Exchange
A
noteholder may transfer or exchange notes in accordance with the Indenture.
Upon
any transfer or exchange, the registrar and the Trustee may require a
noteholder, among other things, to furnish appropriate endorsements and transfer
documents and the Issuer may require a noteholder to pay any taxes required
by
law or permitted by the Indenture. The Issuer is not required to transfer
or
exchange any note selected for redemption or to transfer or exchange any
note
for a period of 15 days prior to a selection of notes to be redeemed. The
notes
will be issued in registered form and the registered holder of a note will
be
treated as the owner of such note for all purposes.
Satisfaction
and Discharge
The
Indenture will be discharged and will cease to be of further effect (except
as
to surviving rights of registration or transfer or exchange of notes, as
expressly provided for in the Indenture) as to all outstanding notes when:
|
(1)
|
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 Issuer and thereafter repaid
to the
Issuer or discharged from such trust) have been delivered to the
Trustee
for cancellation or (b) all of the notes (i) have become due and
payable, (ii) will become due and payable at
their
|
stated
maturity within one year (or, in the case of floating rate notes, within
the
remaining term of the then current Interest Period) or (iii) if redeemable
at the option of the Issuer, are to be called for redemption within one year
(or, in the case of floating rate notes, within the remaining term of the
then
current Interest Period) 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 Issuer, and the Issuer 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 Issuer
directing the Trustee to apply such funds to the payment thereof at maturity
or
redemption, as the case may be;
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(2)
|
the
Issuer and/or the Note Guarantors have paid all other sums payable
under
the Indenture; and
|
|
(3)
|
the
Issuer 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.
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Defeasance
The
Issuer at any time may terminate all its obligations under the notes and
the
Indenture with respect to the holders of the fixed rate notes (“legal
defeasance”), except for certain obligations, including those respecting the
defeasance trust and obligations to register the transfer or exchange of
the
notes, to replace mutilated, destroyed, lost or stolen notes and to maintain
a
registrar and paying agent in respect of the notes. The Issuer at any time
may
terminate its obligations under the covenants described under “—Certain
Covenants” for the benefit of the holders of the fixed rate notes, the operation
of the cross acceleration provision, the bankruptcy provisions with respect
to
Significant Subsidiaries, the judgment default provision and the security
default provisions described under “—Defaults” (but only to the extent that
those provisions relate to the Defaults with respect to the fixed rate notes)
and the undertakings and covenants contained under “—Change of Control” and
“—Merger, Amalgamation, Consolidation or Sale of All or Substantially All
Assets” (“covenant defeasance”) for the benefit of the holders of the fixed rate
notes. If the Issuer exercises its legal defeasance option or its covenant
defeasance option, each Note Guarantor will be released from all of its
obligations with respect to its Note Guarantee and the Security Documents
so
long as no floating rate notes are then outstanding.
The
Issuer may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If the Issuer exercises its legal
defeasance option, payment of the notes may not be accelerated because of
an
Event of Default with respect thereto. If the Issuer exercises its covenant
defeasance option, payment of the notes may not be accelerated because of
an
Event of Default specified in clause (3), (4), (5), (6), (7) (with respect
only to Significant Subsidiaries), (8), (9) or (10) under “—Defaults”
or because of the failure of the Issuer to comply with the first clause
(4) under “—Merger, Amalgamation, Consolidation or Sale of All or
Substantially All Assets.”
In
order
to exercise its defeasance option, the Issuer must irrevocably deposit in
trust
(the “defeasance trust”) with the Trustee money or U.S. Government Obligations
for the payment of principal, premium (if any) and interest on the fixed
rate
notes to redemption or maturity, as the case may be, and must comply with
certain other conditions, including delivery
to
the
Trustee of an Opinion of Counsel to the effect that holders of the fixed
rate
notes will not recognize income, gain or loss for Federal income tax purposes
as
a result of such deposit and defeasance 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 deposit and defeasance had not occurred (and,
in the
case of legal defeasance only, such Opinion of Counsel must be based on a
ruling
of the Internal Revenue Service or change in applicable Federal income tax
law).
Concerning
the Trustee
Wells
Fargo Bank, N.A. is the Trustee under the Indenture and has been appointed
by
the Issuer as Registrar and a Paying Agent with regard to the notes.
Governing
Law
The
Indenture provides that it and the notes will be governed by, and construed
in
accordance with, the laws of the State of New York.
Registration
Rights; Additional Interest
The
following description is a summary of the material provisions of the
Registration Rights Agreement. It does not restate that agreement in its
entirety. We urge you to read the proposed form of Registration Rights Agreement
in its entirety because it, and not this description, defines your registration
rights as holders of the notes.
The
Issuer, the Note Guarantors and the initial purchasers entered into the
Registration Rights Agreement on September 20, 2006. Pursuant to the
Registration Rights Agreement, the Issuer and the Note Guarantors agreed
to use
their commercially reasonable efforts to file with the SEC and cause to become
effective a registration statement, on the appropriate form under the Securities
Act, relating to the exchange notes. Upon the effectiveness of the exchange
offer registration statement, the Issuer and the Note Guarantors will offer
to
the holders of the outstanding notes who are able to make certain
representations the opportunity to exchange their outstanding notes for the
exchange notes.
If,
with
respect to either or both of the fixed rate notes or the floating rate notes,
as
the case may be:
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(1)
|
the
Issuer and the Note Guarantors are not permitted to consummate
the
exchange offer because the exchange offer is not permitted by applicable
law or SEC policy; or
|
|
(2)
|
any
holder of fixed rate notes or the floating rate notes, as the case
may be,
notifies us prior to the 20th day following consummation of the
exchange
offer that:
|
|
(a)
|
it
is prohibited by law or SEC policy from participating in the exchange
offer; or
|
|
(b)
|
that
it may not resell the exchange notes acquired by it in the exchange
offer
to the public without delivering a prospectus (other than by reason
of
such holder’s status as our affiliate) and the prospectus contained in the
exchange offer registration statement is not appropriate or available
for
such resales; or
|
|
(c)
|
that
it is a broker-dealer and owns fixed rate notes or the floating
rate
notes, as the case may be, acquired directly from us or our affiliate,
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the
Issuer and the Note Guarantors will, with respect to either or both of the
fixed
rate notes or the floating rate notes, as the case may be, file with the
SEC a
shelf registration statement to cover resales of the notes by the holders
thereof who satisfy certain conditions relating to the provision of information
in connection with the shelf registration statement.
The
Issuer and the Note Guarantors will use their commercially reasonable efforts
to
cause the applicable registration statement to be declared effective as promptly
as possible by the SEC.
The
Registration Rights Agreement provides that:
|
(1)
|
the
Issuer and the Note Guarantors will use their commercially reasonable
efforts to have the exchange offer registration statement declared
effective by the SEC on or prior to 365 days after the Issue Date;
|
|
(2)
|
unless
the exchange offer would not be permitted by applicable law or
SEC policy,
the Issuer and the Note Guarantors will
|
|
(a)
|
commence
the exchange offer; and
|
|
(b)
|
issue
exchange notes in exchange for all outstanding notes tendered prior
thereto in the exchange offer; and
|
|
(3)
|
if
obligated to file the shelf registration statement, the Issuer
and the
note guarantors will file the shelf registration statement with
the SEC on
or prior to 180 days after such filing obligation arises and will
use
their commercially reasonable efforts to cause the Shelf Registration
to
be declared effective by the SEC on or prior to 365 days after
such
obligation arises.
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If:
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(1)
|
any
of such registration statements is not declared effective by the
SEC on or
prior to the date specified for such effectiveness (the “Effectiveness
Target Date”); or
|
|
(2)
|
the
Issuer and the Note Guarantors fail to consummate the exchange
offer
within 30 business days of the Effectiveness Target Date with respect
to
the exchange offer registration statement; or
|
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(3)
|
the
shelf registration statement or the exchange offer registration
statement
is declared effective but thereafter ceases to be effective or
usable,
subject to certain exceptions, in connection with resales or exchanges
of
outstanding notes during the periods specified in the Registration
Rights
Agreement (each such event referred to in clauses (1) through
(3) above, a “Registration Default”),
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then
the
Issuer and the Note Guarantors will pay additional interest to each holder
of
the affected series of outstanding notes, with respect to the first 90-day
period immediately following the occurrence of the first Registration Default,
in an amount equal to 0.25% per annum of the principal amount of
outstanding notes held by such holder.
The
amount of the additional interest will increase by an additional 0.25% per
annum of the principal amount of such outstanding notes with respect to each
subsequent 90-day period until all Registration Defaults have been cured,
up to
a maximum amount of additional interest
for
all
Registration Defaults of 1.0% per annum of the principal amount of such
outstanding notes.
All
references in the Indenture, in any context, to any interest payable on or
with
respect to the outstanding notes shall be deemed to include any additional
interest payable pursuant to the Registration Rights Agreement.
All
accrued additional interest will be paid by the Issuer and the Guarantors
on
each interest payment date to the Global Note holder (as defined below) by
wire
transfer of immediately available funds or by federal funds check and to
holders
of certificated notes by wire transfer to the accounts specified by them
or by
mailing checks to their registered addresses if no such accounts have been
specified.
Following
the cure of all Registration Defaults, the accrual of additional interest
will
cease.
Holders
of outstanding notes will be required to make certain representations to
the
Issuer (as described in the Registration Rights Agreement) in order to
participate in the exchange offer and will be required to deliver certain
information to be used in connection with the shelf registration statement
within the time periods set forth in the Registration Rights Agreement in
order
to have their outstanding notes included in the shelf registration statement
and
benefit from the provisions regarding additional interest set forth above.
By
acquiring outstanding notes, a holder will be deemed to have agreed to indemnify
the Issuer and the Note Guarantors against certain losses arising out of
information furnished by such holder in writing for inclusion in any shelf
registration statement. Holders of outstanding notes will also be required
to
suspend their use of the prospectus included in the shelf registration statement
under certain circumstances upon receipt of written notice to that effect
from
the Issuer.
Certain
Definitions
“Acquired
Indebtedness” means, with respect to any specified Person:
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(1)
|
Indebtedness
of any other Person existing at the time such other Person is merged,
consolidated or amalgamated with or into or became a Restricted
Subsidiary
of such specified Person, and
|
|
(2)
|
Indebtedness
secured by a Lien encumbering any asset acquired by such specified
Person.
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“Acquisition”
means the acquisition by Affiliates of the Sponsors of substantially all
of the
outstanding shares of capital stock of the Issuer, pursuant to the Merger
Agreement.
“Acquisition
Documents” means the Merger Agreement and any other document entered into in
connection therewith, in each case as amended, supplemented or modified from
time to time prior to the Issue Date or thereafter (so long as any amendment,
supplement or modification after the Issue Date, together with all other
amendments, supplements and modifications after the Issue Date, taken as
a
whole, is not more disadvantageous to the holders of the Notes in any material
respect than the Acquisition Documents as in effect on the Issue Date).
“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the
direction
of
the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.
“Applicable
Premium” means, with respect to any Fixed Rate Note on any applicable redemption
date, the greater of:
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(1)
|
1%
of the then outstanding principal amount of the Fixed Rate Note;
and
|
|
(a)
|
the
present value at such redemption date of (i) the redemption price of
the Fixed Rate Note, at September 15, 2010 (such redemption price
being set forth in the applicable table appearing above under “—Optional
Redemption”) plus (ii) all required interest payments due on the
Fixed Rate Note through September 15, 2010 (excluding accrued but
unpaid interest), computed using a discount rate equal to the Treasury
Rate as of such redemption date plus 50 basis points; over
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|
(b)
|
the
then outstanding principal amount of the Fixed Rate Note.
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“Asset
Sale” means:
|
(1)
|
the
sale, conveyance, transfer or other disposition (whether in a single
transaction or a series of related transactions) of property or
assets
(including by way of a Sale/ Leaseback Transaction) outside the
ordinary
course of business of the Issuer or any Restricted Subsidiary of
the
Issuer (each referred to in this definition as a “disposition”) or
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|
(2)
|
the
issuance or sale of Equity Interests (other than directors’ qualifying
shares and shares issued to foreign nationals or other third parties
to
the extent required by applicable law) of any Restricted Subsidiary
(other
than to the Issuer or another Restricted Subsidiary of the Issuer)
(whether in a single transaction or a series of related transactions),
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in
each
case other than:
|
(a)
|
a
disposition of Cash Equivalents or Investment Grade Securities
or obsolete
or worn out property or equipment in the ordinary course of business;
|
|
(b)
|
the
disposition of all or substantially all of the assets of the Issuer
in a
manner permitted pursuant to the provisions described above under
“—Merger, Amalgamation, Consolidation or Sale of All or Substantially
All
Assets” or any disposition that constitutes a Change of Control;
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|
(c)
|
any
Restricted Payment or Permitted Investment that is permitted to
be made,
and is made, under the covenant described above under “—Certain
Covenants—Limitation on Restricted Payments”;
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|
(d)
|
any
disposition of assets or issuance or sale of Equity Interests of
any
Restricted Subsidiary, which assets or Equity Interests so disposed
or
issued have an aggregate Fair Market Value of less than $7.5 million;
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(e)
|
any
disposition of property or assets, or the issuance of securities,
by a
Restricted Subsidiary of the Issuer to the Issuer or by the Issuer
or a
Restricted Subsidiary of the Issuer to a Restricted Subsidiary
of the
Issuer;
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|
(f)
|
any
exchange of assets (including a combination of assets and Cash
Equivalents) for assets related to a Similar Business of comparable
or
greater market value or usefulness to the business of the Issuer
and its
Restricted Subsidiaries as a whole, as determined in good faith
by the
Issuer;
|
|
(g)
|
foreclosure
on assets of the Issuer or any of its Restricted Subsidiaries;
|
|
(h)
|
any
sale of Equity Interests in, or Indebtedness or other securities
of, an
Unrestricted Subsidiary;
|
|
(i)
|
the
lease, assignment or sublease of any real or personal property
in the
ordinary course of business;
|
|
(j)
|
any
sale of inventory or other assets in the ordinary course of business;
|
|
(k)
|
any
grant in the ordinary course of business of any license of patents,
trademarks, know-how or any other intellectual property;
|
|
(l)
|
a
transfer of accounts receivable and related assets of the type
specified
in the definition of “Receivables Financing” (or a fractional undivided
interest therein) by a Receivables Subsidiary in a Qualified Receivables
Financing; and
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|
(m)
|
the
sale of any property in a Sale/Leaseback Transaction within six
months of
the acquisition of such property.
|
“Bank
Indebtedness” means any and all amounts payable under or in respect of the
Credit Agreement and the other Credit Agreement Documents as amended, restated,
supplemented, waived, replaced, restructured, repaid, refunded, refinanced
or
otherwise modified from time to time (including after termination of the
Credit
Agreement), including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Issuer whether or not a claim for post-filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
“Board
of
Directors” means, as to any Person, the board of directors or managers, as
applicable, of such Person (or, if such Person is a partnership, the board
of
directors or other governing body of the general partner of such Person)
or any
duly authorized committee thereof.
“Business
Day” means a day other than a Saturday, Sunday or other day on which banking
institutions are authorized or required by law to close in New York City.
“Calculation
Agent” means a financial institution appointed by the Issuer to calculate the
interest rate payable on the Floating Rate Notes in respect of each Interest
Period, which shall initially be the Trustee.
“Capital
Stock” means:
|
(1)
|
in
the case of a corporation, corporate stock or shares;
|
|
(2)
|
in
the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
|
|
(3)
|
in
the case of a partnership or limited liability company, partnership
or
membership interests (whether general or limited); and
|
|
(4)
|
any
other interest or participation that confers on a Person the right
to
receive a share of the profits and losses of, or distributions
of assets
of, the issuing Person.
|
“Capitalized
Lease Obligation” means, at the time any determination thereof is to be made,
the amount of the liability in respect of a capital lease that would at such
time be required
to
be
capitalized and reflected as a liability on a balance sheet (excluding the
footnotes thereto) in accordance with GAAP.
“
Cash
Contribution Amount
”
means
the aggregate amount of cash contributions made to the capital of the Issuer
described in the definition of “Contribution Indebtedness.”
“
Cash
Equivalents
”
means:
|
(1)
|
U.S.
dollars, pounds sterling, euros, the national currency of any member
state
in the European Union or, in the case of any Foreign Subsidiary
that is a
Restricted Subsidiary, such local currencies held by it from time
to time
in the ordinary course of business;
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|
(2)
|
securities
issued or directly and fully guaranteed or insured by the U.S.
government
or any country that is a member of the European Union or any agency
or
instrumentality thereof in each case maturing not more than two
years from
the date of acquisition;
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|
(3)
|
certificates
of deposit, time deposits and eurodollar time deposits with maturities
of
one year or less from the date of acquisition, bankers’ acceptances, in
each case with maturities not exceeding one year and overnight
bank
deposits, in each case with any commercial bank having capital
and surplus
in excess of $250.0 million and whose long-term debt is rated “A” or the
equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings
of another internationally recognized ratings agency);
|
|
(4)
|
repurchase
obligations for underlying securities of the types described in
clauses
(2) and (3) above entered into with any financial institution
meeting the qualifications specified in clause (3) above;
|
|
(5)
|
commercial
paper issued by a corporation (other than an Affiliate of the Issuer)
rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or
reasonably equivalent ratings of another internationally recognized
ratings agency) and in each case maturing within one year after
the date
of acquisition;
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|
(6)
|
readily
marketable direct obligations issued by any state of the United
States of
America or any political subdivision thereof having one of the
two highest
rating categories obtainable from either Moody’s or S&P (or reasonably
equivalent ratings of another internationally recognized ratings
agency)
in each case with maturities not exceeding two years from the date
of
acquisition;
|
|
(7)
|
Indebtedness
issued by Persons (other than the Sponsors or any of their Affiliates)
with a rating of “A” or higher from S&P or “A-2” or higher from
Moody’s in each case with maturities not exceeding two years from the
date
of acquisition; and
|
|
(8)
|
investment
funds investing at least 95% of their assets in securities of the
types
described in clauses (1) through (7) above.
|
“
Code
”
means
the Internal Revenue Code of 1986, as amended.
“
Collateral
”
means
all property subject or purported to be subject, from time to time, to a
Lien
under any Security Documents.
“
Collateral
Agent
”
means
the Trustee in its capacity as “Collateral Agent” under the Indenture and under
the Security Documents and any successor thereto in such capacity.
“
Consolidated
Interest Expense
”
means,
with respect to any Person for any period, the sum, without duplication,
of:
|
(1)
|
consolidated
interest expense of such Person and its Restricted Subsidiaries
for such
period, to the extent such expense was deducted in computing Consolidated
Net Income (including amortization of original issue discount,
the
interest component of Capitalized Lease Obligations, and net payments
and
receipts (if any) pursuant to interest rate Hedging Obligations
and
excluding amortization of deferred financing fees and expensing
of any
bridge or other financing fees);
plus
|
|
(2)
|
consolidated
capitalized interest of such Person and its Restricted Subsidiaries
for
such period, whether paid or accrued;
plus
|
|
(3)
|
commissions,
discounts, yield and other fees and charges Incurred in connection
with
any Receivables Financing which are payable to Persons other than
the
Issuer and its Restricted Subsidiaries;
minus
|
|
(4)
|
interest
income for such period.
|
“
Consolidated
Net Income
”
means,
with respect to any Person for any period, the aggregate of the Net Income
of
such Person and its Restricted Subsidiaries for such period, on a consolidated
basis;
provided
,
however
,
that:
|
(1)
|
any
net after-tax extraordinary, nonrecurring or unusual gains or losses
or
income, expenses or charges (less all fees and expenses relating
thereto),
including, without limitation, any severance expenses, any expenses
related to any reconstruction, recommissioning or reconfiguration
of fixed
assets for alternate uses and fees, expenses or charges relating
to new
product lines, plant shutdown costs, acquisition integration costs,
expenses or charges related to any Equity Offering, Permitted Investment,
acquisition or Indebtedness permitted to be Incurred by the Indenture
(in
each case, whether or not successful), including any such fees,
expenses,
charges or change in control payments made under the Acquisition
Documents
or otherwise related to the Transactions, in each case, shall be
excluded;
|
|
(2)
|
any
increase in amortization or depreciation or any one-time non-cash
charges
or increases or reductions in Net Income, in each case resulting
from
purchase accounting in connection with the Transactions or any
acquisition
that is consummated after the Issue Date shall be excluded;
|
|
(3)
|
the
Net Income for such period shall not include the cumulative effect
of a
change in accounting principles during such period;
|
|
(4)
|
any
net after-tax income or loss from discontinued operations and any
net
after-tax gains or losses on disposal of discontinued operations
shall be
excluded;
|
|
(5)
|
any
net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to business dispositions or asset
dispositions other than in the ordinary course of business (as
determined
in good faith by the Board of Directors of the Issuer) shall be
excluded;
|
|
(6)
|
any
net after-tax gains or losses (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of indebtedness
shall be excluded;
|
|
(7)
|
the
Net Income for such period of any Person that is not a Subsidiary
of such
Person, or is an Unrestricted Subsidiary, or that is accounted
for by the
equity method of accounting, shall be included only to the extent
of the
amount of dividends or distributions or other payments paid in
cash (or to
the extent converted into cash) to the referent Person or a Restricted
Subsidiary thereof in respect of such period;
|
|
(8)
|
solely
for the purpose of determining the amount available for Restricted
Payments under clause (1) of the definition of Cumulative Credit
contained in “—Certain Covenants—Limitation on Restricted Payments,” the
Net Income for such period of any Restricted Subsidiary (other
than any
Note Guarantor) shall be excluded to the extent that the declaration
or
payment of dividends or similar distributions by such Restricted
Subsidiary of its Net Income is not at the date of determination
permitted
without any prior governmental approval (which has not been obtained)
or,
directly or indirectly, by the operation of the terms of its charter
or
any agreement, instrument, judgment, decree, order, statute, rule
or
governmental regulation applicable to that Restricted Subsidiary
or its
stockholders, unless such restrictions with respect to the payment
of
dividends or similar distributions have been legally waived;
provided
that the Consolidated Net Income of such Person shall be increased
by the
amount of dividends or other distributions or other payments actually
paid
in cash (or converted into cash) by any such Restricted Subsidiary
to such
Person, to the extent not already included therein;
|
|
(9)
|
an
amount equal to the amount of Tax Distributions actually made to
any
parent of such Person in respect of such period in accordance with
clause
(12) of the second paragraph under “—Certain Covenants—Limitation on
Restricted Payments” shall be included as though such amounts had been
paid as income taxes directly by such Person for such period;
|
|
(10)
|
any
non-cash impairment charges resulting from the application of Statement
of
Financial Accounting Standards (“
SFAS
”)
Nos. 142 and 144 and the amortization of intangibles arising pursuant
to
SFAS No. 141 shall be excluded;
|
|
(11)
|
any
non-cash expense realized or resulting from stock option plans,
employee
benefit plans or post-employment benefit plans, grants of stock
appreciation or similar rights, stock options or other rights to
officers,
directors and employees of such Person or any of its Restricted
Subsidiaries shall be excluded;
|
|
(12)
|
any
(a) severance or relocation costs or expenses, (b) one-time
non-cash compensation charges, (c) the costs and expenses after the
Issue Date related to employment of terminated employees, (d) costs
or expenses realized in connection with, resulting from or in anticipation
of the Transactions or (e) costs or expenses realized in connection
with or resulting from stock appreciation or similar rights, stock
options
or other rights existing on the Issue Date of officers, directors
and
employees, in each case of such Person or any of its Restricted
Subsidiaries, shall be excluded;
|
|
(13)
|
accruals
and reserves that are established within 12 months after the Issue
Date
and that are so required to be established in accordance with GAAP
shall
be excluded;
|
|
(14)
|
solely
for purposes of calculating EBITDA, (a) the Net Income of any Person
and its Restricted Subsidiaries shall be calculated without deducting
the
income
attributable
to, or adding the losses attributable to, the minority equity interests
of
third parties in any non-wholly-owned Restricted Subsidiary except
to the
extent of dividends declared or paid in respect of such period
or any
prior period on the shares of Capital Stock of such Restricted
Subsidiary
held by such third parties and (b) any ordinary course dividend,
distribution or other payment paid in cash and received from any
Person in
excess of amounts included in clause (7) above shall be included;
|
|
(15)
|
(a)
(i) the non-cash portion of “straight-line” rent expense shall be excluded
and (ii) the cash portion of “straight-line” rent expense which
exceeds the amount expensed in respect of such rent expense shall
be
included and (b) non-cash gains, losses, income and expenses
resulting from fair value accounting required by Statement of Financial
Accounting Standards No. 133 shall be excluded;
|
|
(16)
|
unrealized
gains and losses relating to hedging transactions and mark-to-market
of
Indebtedness denominated in foreign currencies resulting from the
applications of Financial Accounting Standard 52 shall be excluded;
and
|
|
(17)
|
solely
for the purpose of calculating Restricted Payments, the difference,
if
positive, of the Consolidated Taxes of the Issuer calculated in
accordance
with GAAP and the actual Consolidated Taxes paid in cash by the
Issuer
during any Reference Period shall be included.
|
Notwithstanding
the foregoing, for the purpose of the covenant described under “—Certain
Covenants—Limitation on Restricted Payments” only, there shall be excluded from
Consolidated Net Income any dividends, repayments of loans or advances or
other
transfers of assets from Unrestricted Subsidiaries of the Issuer or a Restricted
Subsidiary of the Issuer to the extent such dividends, repayments or transfers
increase the amount of Restricted Payments permitted under such covenant
pursuant to clauses (4) and (5) of the definition of Cumulative Credit
contained therein.
“
Consolidated
Non-cash Charges
”
means,
with respect to any Person for any period, the aggregate depreciation,
amortization and other non-cash expenses of such Person and its Restricted
Subsidiaries reducing Consolidated Net Income of such Person for such period
on
a consolidated basis and otherwise determined in accordance with GAAP, but
excluding any such charge which consists of or requires an accrual of, or
cash
reserve for, anticipated cash charges for any future period.
“
Consolidated
Taxes
”
means
provision for taxes based on income, profits or capital, including, without
limitation, state, franchise and similar taxes and any Tax Distributions
taken
into account in calculating Consolidated Net Income.
“
Contingent
Obligations
”
means,
with respect to any Person, any obligation of such Person guaranteeing any
leases, dividends or other obligations that do not constitute Indebtedness
(“
primary
obligations
”)
of any
other Person (the “
primary
obligor
”)
in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent:
|
(1)
|
to
purchase any such primary obligation or any property constituting
direct
or indirect security therefor,
|
|
(2)
|
to
advance or supply funds:
|
|
(a)
|
for
the purchase or payment of any such primary obligation; or
|
|
(b)
|
to
maintain working capital or equity capital of the primary obligor
or
otherwise to maintain the net worth or solvency of the primary
obligor; or
|
|
(3)
|
to
purchase property, securities or services primarily for the purpose
of
assuring the owner of any such primary obligation of the ability
of the
primary obligor to make payment of such primary obligation against
loss in
respect thereof.
|
“
Contribution
Indebtedness
”
means
Indebtedness of the Issuer or any Note Guarantor in an aggregate principal
amount not greater than twice the aggregate amount of cash contributions
(other
than Excluded Contributions) made to the capital of the Issuer or such Note
Guarantor after the Issue Date;
provided
that:
|
(1)
|
such
cash contributions have not been used to make a Restricted Payment,
|
|
(2)
|
if
the aggregate principal amount of such Contribution Indebtedness
is
greater than the aggregate amount of such cash contributions to
the
capital of the Issuer or such Note Guarantor, as the case may be,
the
amount in excess shall be Indebtedness (other than Secured Indebtedness)
with a Stated Maturity later than the Stated Maturity of the Notes,
and
|
|
(3)
|
such
Contribution Indebtedness (a) is Incurred within 180 days after the
making of such cash contributions and (b) is so designated as
Contribution Indebtedness pursuant to an Officers’ Certificate on the
Incurrence date thereof.
|
“
Credit
Agreement
”
means
(i) the credit agreement entered into in connection with, and on or prior
to, the consummation of the Acquisition, as amended, restated, supplemented,
waived, replaced (whether or not upon termination, and whether with the original
lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise
modified from time to time, including any agreement or indenture extending
the
maturity thereof, refinancing, replacing or otherwise restructuring all or
any
portion of the Indebtedness under such agreement or agreements or indenture
or
indentures or any successor or replacement agreement or agreements or indenture
or indentures or increasing the amount loaned or issued thereunder or altering
the maturity thereof, among the Issuer, the guarantors named therein, the
financial institutions named therein, and Credit Suisse, as Administrative
Agent, and (ii) whether or not the credit agreement referred to in clause
(i) remains outstanding, if designated by the Issuer to be included in the
definition of “Credit Agreement,” one or more (A) debt facilities or
commercial paper facilities, providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to lenders
or
to special purpose entities formed to borrow from lenders against such
receivables) or letters of credit, (B) debt securities, indentures or other
forms of debt financing (including convertible or exchangeable debt instruments
or bank guarantees or bankers’ acceptances), or (C) instruments or
agreements evidencing any other Indebtedness, in each case, with the same
or
different borrowers or issuers and, in each case, as amended, supplemented,
modified, extended, restructured, renewed, refinanced, restated, replaced
or
refunded in whole or in part from time to time.
“
Credit
Agreement Documents
”
means
the collective reference to the Credit Agreement, any notes issued pursuant
thereto and the guarantees thereof, and the collateral documents relating
thereto, as amended, supplemented, restated, renewed, refunded, replaced,
restructured, repaid, refinanced or otherwise modified from time to time.
“
Default
”
means
any event which is, or after notice or passage of time or both would be,
an
Event of Default.
“
Designated
Non-cash Consideration
”
means
the Fair Market Value of non-cash consideration received by the Issuer or
one of
its Restricted Subsidiaries in connection with an Asset Sale that is so
designated as Designated Non-cash Consideration pursuant to an Officers’
Certificate,
setting forth the basis of such valuation, less the amount of Cash Equivalents
received in connection with a subsequent sale of such Designated Non-cash
Consideration.
“
Designated
Preferred Stock
”
means
Preferred Stock of the Issuer or any direct or indirect parent of the Issuer
(other than Disqualified Stock), that is issued for cash (other than to the
Issuer or any of its Subsidiaries or an employee stock ownership plan or
trust
established by the Issuer or any of its Subsidiaries) and is so designated
as
Designated Preferred Stock, pursuant to an Officers’ Certificate, on the
issuance date thereof.
“
Determination
Date
”
with
respect to an Interest Period will be the second London Banking Day preceding
the first day of such Interest Period.
“
Discharge
of Senior Lender Claims
”
shall
mean, except to the extent otherwise provided in the Intercreditor Agreement,
payment in full in cash (except for contingent indemnities and cost and
reimbursement obligations to the extent no claim has been made) of (a) all
Obligations in respect of all outstanding First Priority Lien Obligations
and,
with respect to letters of credit or letter of credit guaranties outstanding
thereunder, delivery of cash collateral or backstop letters of credit in
respect
thereof in compliance with the Credit Agreement, in each case after or
concurrently with the termination of all commitments to extend credit thereunder
and (b) any other First Priority Lien Obligations that are due and payable
or
otherwise accrued and owing at or prior to the time such principal and interest
are paid; provided that the Discharge of Senior Lender Claims shall not be
deemed to have occurred if such payments are made with the proceeds of other
First Priority Lien Obligations that constitute an exchange or replacement
for
or a refinancing of such Obligations or First Priority Lien Obligations.
In the
event the First Priority Lien Obligations are modified and the Obligations
are
paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy
Code, the First Priority Lien Obligations shall be deemed to be discharged
when
the final payment is made, in cash, in respect of such indebtedness and any
obligations pursuant to such new indebtedness shall have been satisfied.
“
Disqualified
Stock
”
means,
with respect to any Person, any Capital Stock of such Person which, by its
terms
(or by the terms of any security into which it is convertible or for which
it is
redeemable or exchangeable), or upon the happening of any event:
|
(1)
|
matures
or is mandatorily redeemable, pursuant to a sinking fund obligation
or
otherwise (other than as a result of a change of control or asset
sale;
provided
that the relevant asset sale or change of control provisions, taken
as a
whole, are no more favorable in any material respect to holders
of such
Capital Stock than the asset sale and change of control provisions
applicable to the Notes and any purchase requirement triggered
thereby may
not become operative until compliance with the asset sale and change
of
control provisions applicable to the Notes (including the purchase
of any
Notes tendered pursuant thereto)),
|
|
(2)
|
is
convertible or exchangeable for Indebtedness or Disqualified Stock
of such
Person, or
|
|
(3)
|
is
redeemable at the option of the holder thereof, in whole or in
part
,
|
in
each
case prior to 91 days after the maturity date of the Notes;
provided
,
however
,
that
only the portion of Capital Stock which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to such date shall be deemed to be Disqualified Stock;
provided
,
further
,
however
,
that if
such Capital Stock is issued to any employee or to any plan for the benefit
of
employees of the Issuer or its Subsidiaries or by any such plan to such
employees, such Capital Stock shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the Issuer in order to satisfy
applicable statutory or regulatory obligations or as a result of such employee’s
termination, death or
disability;
provided
,
further
,
that
any class of Capital Stock of such Person that by its terms authorizes such
Person to satisfy its obligations thereunder by delivery of Capital Stock
that
is not Disqualified Stock shall not be deemed to be Disqualified Stock.
“
Domestic
Subsidiary
”
means
a
Restricted Subsidiary that is not a Foreign Subsidiary.
“
EBITDA
”
means,
with respect to any Person for any period, the Consolidated Net Income of
such
Person for such period plus, without duplication, to the extent the same
was
deducted in calculating Consolidated Net Income:
|
(1)
|
Consolidated
Taxes;
plus
|
|
(2)
|
Consolidated
Interest Expense;
plus
|
|
(3)
|
Consolidated
Non-cash Charges;
plus
|
|
(4)
|
business
optimization expenses and other restructuring charges or expenses
(which,
for the avoidance of doubt, shall include, without limitation,
the effect
of inventory optimization programs, plant closures, retention,
systems
establishment costs and excess pension charges);
provided
that with respect to each business optimization expense or other
restructuring charge, the Issuer shall have delivered to the Trustee
an
Officers’ Certificate specifying and quantifying such expense or charge
and stating that such expense or charge is a business optimization
expense
or other restructuring charge, as the case may be;
plus
|
|
(5)
|
the
amount of management, monitoring, consulting and advisory fees
and related
expenses paid to the Sponsors (or any accruals relating to such
fees and
related expenses) during such period pursuant to the terms of the
agreements between the Sponsors and the Issuer and its Subsidiaries
as
described with particularity in this prospectus and as in effect
on the
Issue Date;
|
less,
without duplication,
|
(6)
|
non-cash
items increasing Consolidated Net Income for such period (excluding
the
recognition of deferred revenue or any items which represent the
reversal
of any accrual of, or cash reserve for, anticipated cash charges
in any
prior period and any items for which cash was received in a prior
period).
|
“
Equity
Interests
”
means
Capital Stock and all warrants, options or other rights to acquire Capital
Stock
(but excluding any debt security that is convertible into, or exchangeable
for,
Capital Stock).
“
Equity
Offering
”
means
any public or private sale after the Issue Date of common stock or Preferred
Stock of the Issuer or any direct or indirect parent of the Issuer, as
applicable (other than Disqualified Stock), other than:
|
(1)
|
public
offerings with respect to the Issuer’s or such direct or indirect parent’s
common stock registered on Form S-8; and
|
|
(2)
|
any
such public or private sale that constitutes an Excluded Contribution.
|
“
Exchange
Act
”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC promulgated thereunder.
“
Excluded
Contributions
”
means
the Cash Equivalents or other assets (valued at their Fair Market Value as
determined in good faith by senior management or the Board of Directors of
the
Issuer) received by the Issuer after the Issue Date from:
(1)
contributions
to its common equity capital, and
|
(2)
|
the
sale (other than to a Subsidiary of the Issuer or to any Subsidiary
management equity plan or stock option plan or any other management
or
employee benefit plan or agreement) of Capital Stock (other than
Disqualified Stock and Designated Preferred Stock) of the Issuer,
|
in
each
case designated as Excluded Contributions pursuant to an Officers’ Certificate
executed by an Officer of the Issuer on or promptly after the date such capital
contributions are made or the date such Capital Stock is sold, as the case
may
be.
“
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.
“
First
Lien Agent
”
has
the
meaning given to such term in the Intercreditor Agreement.
“
First
Priority After-Acquired Property
”
means
any property (other than the initial collateral) of the Issuer or any Note
Guarantor that secures any Secured Bank Indebtedness.
“
First
Priority Lien Obligations
”
means
(i) all Secured Bank Indebtedness, (ii) all other Obligations (not
constituting Indebtedness) of the Issuer and its Restricted Subsidiaries
under
the agreements governing Secured Bank Indebtedness and (iii) all other
Obligations of the Issuer or any of its Restricted Subsidiaries in respect
of
Hedging Obligations or Obligations in respect of cash management services
in
each case owing to a Person that is a holder of Indebtedness described in
clause
(i) or Obligations described in clause (ii) or an Affiliate of such
holder at the time of entry into such Hedging Obligations or Obligations
in
respect of cash management services.
“
Fixed
Charge Coverage Ratio
”
means,
with respect to any Person for any period, the ratio of EBITDA of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the Issuer or any of its Restricted Subsidiaries Incurs, repays,
repurchases or redeems any Indebtedness (other than in the case of revolving
credit borrowings or revolving advances under any Qualified Receivables
Financing, in which case interest expense shall be computed based upon the
average daily balance of such Indebtedness during the applicable period)
or
issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio
is
being calculated but prior to the event for which the calculation of the
Fixed
Charge Coverage Ratio is made (the “
Calculation
Date
”),
then
the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to
such Incurrence, repayment, repurchase or redemption of Indebtedness, or
such
issuance, repurchase or redemption of Disqualified Stock or Preferred Stock,
as
if the same had occurred at the beginning of the applicable four-quarter
period.
For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as determined
in accordance with GAAP), in each case with respect to an operating unit
of a
business, and any operational changes that the Issuer or any of its Restricted
Subsidiaries has determined to make and/or made after the Issue Date and
during
the four-quarter reference period or subsequent to such reference period
and on
or prior to or simultaneously with the Calculation Date (each, for purposes
of
this definition, a “
pro
forma event
”)
shall
be calculated on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, mergers, consolidations (including the
Transactions), discontinued operations and operational changes (and the change
of any associated fixed charge obligations and the change in EBITDA
resulting
therefrom)
had occurred on the first day of the four-quarter reference period. If since
the
beginning of such period any Person that subsequently became a Restricted
Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary
since the beginning of such period shall have made any Investment, acquisition,
disposition, merger, consolidation, discontinued operation or operational
change, in each case with respect to an operating unit of a business, that
would
have required adjustment pursuant to this definition, then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect thereto for such
period as if such Investment, acquisition, disposition, discontinued operation,
merger, consolidation or operational change had occurred at the beginning
of the
applicable four-quarter period.
For
purposes of this definition, whenever pro forma effect is to be given to
any pro
forma event, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Issuer. Any such pro forma
calculation may include adjustments appropriate, in the reasonable good faith
determination of the Issuer as set forth in an Officers’ Certificate, to reflect
(1) operating expense reductions and other operating improvements or
synergies reasonably expected to result from the applicable pro forma event
(including, to the extent applicable, from the Transactions), and (2) all
adjustments of the nature used in connection with the calculation of “Adjusted
EBITDA” as set forth in footnote 4 to the “Summary Historical and Unaudited
Pro Forma Financial Data” under “Prospectus Summary” in this prospectus to the
extent such adjustments, without duplication, continue to be applicable to
such
four-quarter period.
If
any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate
in
effect on the Calculation Date had been the applicable rate for the entire
period (taking into account any Hedging Obligations applicable to such
Indebtedness if such Hedging Obligation has a remaining term in excess of
12
months). Interest on a Capitalized Lease Obligation shall be deemed to accrue
at
an interest rate reasonably determined by a responsible financial or accounting
officer of the Issuer to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP. For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period. Interest
on
Indebtedness that 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 rate, shall be deemed to have been based upon the rate actually chosen,
or, if none, then based upon such optional rate chosen as the Issuer may
designate.
“
Fixed
Charges
”
means,
with respect to any Person for any period, the sum, without duplication,
of:
|
(1)
|
Consolidated
Interest Expense of such Person for such period, and
|
|
(2)
|
all
cash dividend payments (excluding items eliminated in consolidation)
on
any series of Preferred Stock or Disqualified Stock of such Person
and its
Restricted Subsidiaries.
|
“
Foreign
Subsidiary
”
means
a
Restricted Subsidiary not organized or existing under the laws of the United
States of America or any state or territory thereof or the District of Columbia
and any direct or indirect subsidiary of such Restricted Subsidiary.
“
GAAP
”
means
generally accepted accounting principles in the United States 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 have been
approved
by a significant segment of the accounting profession, which are in effect
on
the Issue Date. For the purposes of the Indenture, the term “consolidated” with
respect to any Person shall mean such Person consolidated with its Restricted
Subsidiaries, and shall not include any Unrestricted Subsidiary, but the
interest of such Person in an Unrestricted Subsidiary will be accounted for
as
an Investment.
“
guarantee
”
means
a
guarantee (other than by endorsement of negotiable instruments for collection
in
the ordinary course of business), direct or indirect, in any manner (including,
without limitation, letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness or other obligations.
“
Hedging
Obligations
”
means,
with respect to any Person, the obligations of such Person under:
|
(1)
|
currency
exchange, interest rate or commodity swap agreements, currency
exchange,
interest rate or commodity cap agreements and currency exchange,
interest
rate or commodity collar agreements; and
|
|
(2)
|
other
agreements or arrangements designed to protect such Person against
fluctuations in currency exchange, interest rates or commodity
prices.
|
“
holder
”
or
“
noteholder
”
means
the Person in whose name a Note is registered on the Registrar’s books.
“
Incur
”
means
issue, assume, guarantee, incur or otherwise become liable for;
provided
,
however
,
that
any Indebtedness or Capital Stock of a Person existing at the time such person
becomes a Subsidiary (whether by merger, amalgamation, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Person at
the
time it becomes a Subsidiary.
“
Indebtedness
”
means,
with respect to any Person:
|
(1)
|
the
principal and premium (if any) of any indebtedness of such Person,
whether
or not contingent, (a) in respect of borrowed money,
(b) evidenced by bonds, notes, debentures or similar instruments or
letters of credit or bankers’ acceptances (or, without duplication,
reimbursement agreements in respect thereof), (c) representing the
deferred and unpaid purchase price of any property, except any
such
balance that constitutes a trade payable or similar obligation
to a trade
creditor due within six months from the date on which it is Incurred,
in
each case Incurred in the ordinary course of business, which purchase
price is due more than six months after the date of placing the
property
in service or taking delivery and title thereto, (d) in respect of
Capitalized Lease Obligations, or (e) representing any Hedging
Obligations, if and to the extent that any of the foregoing indebtedness
(other than letters of credit and Hedging Obligations) would appear
as a
liability on a balance sheet (excluding the footnotes thereto)
of such
Person prepared in accordance with GAAP;
|
|
(2)
|
to
the extent not otherwise included, any obligation of such Person
to be
liable for, or to pay, as obligor, guarantor or otherwise, on the
Indebtedness of another Person (other than by endorsement of negotiable
instruments for collection in the ordinary course of business);
|
|
(3)
|
to
the extent not otherwise included, Indebtedness of another Person
secured
by a Lien on any asset owned by such Person (whether or not such
Indebtedness is assumed by such Person);
provided
,
however
,
that the amount of such Indebtedness will be the lesser of: (a) the
Fair Market Value of such asset at
such
date of determination, and (b) the amount of such Indebtedness of
such other Person; and
|
|
(4)
|
to
the extent not otherwise included, with respect to the Issuer and
its
Restricted Subsidiaries, the amount then outstanding (
i.e.
,
advanced, and received by, and available for use by, the Issuer
or any of
its Restricted Subsidiaries) under any Receivables Financing (as
set forth
in the books and records of the Issuer or any Restricted Subsidiary
and
confirmed by the agent, trustee or other representative of the
institution
or group providing such Receivables Financing);
|
provided,
however
,
that
notwithstanding the foregoing, Indebtedness shall be deemed not to include
(1) Contingent Obligations incurred in the ordinary course of business and
not in respect of borrowed money; (2) deferred or prepaid revenues;
(3) purchase price holdbacks in respect of a portion of the purchase price
of an asset to satisfy warranty or other unperformed obligations of the
respective seller; (4) Obligations under or in respect of Qualified
Receivables Financing or (5) obligations under the Acquisition Documents.
Notwithstanding
anything in the Indenture to the contrary, Indebtedness shall not include,
and
shall be calculated without giving effect to, the effects of Statement of
Financial Accounting Standards No. 133 and related interpretations to the
extent
such effects would otherwise increase or decrease an amount of Indebtedness
for
any purpose under the Indenture as a result of accounting for any embedded
derivatives created by the terms of such Indebtedness; and any such amounts
that
would have constituted Indebtedness under the Indenture but for the application
of this sentence shall not be deemed an Incurrence of Indebtedness under
the
Indenture.
“
Independent
Financial Advisor
”
means
an accounting, appraisal or investment banking firm or consultant, in each
case
of nationally recognized standing, that is, in the good faith determination
of
the Issuer, qualified to perform the task for which it has been engaged.
“
Intercreditor
Agreement
”
means
the intercreditor agreement among Credit Suisse, as agent under the Credit
Agreement Documents, the Trustee, the Issuer, Berry Plastics Group, Inc.
and
each Note Guarantor, as it may be amended from time to time in accordance
with
the Indenture.
“
Interest
Period
”
means
the period commencing on and including an interest payment date and ending
on
and including the day immediately preceding the next succeeding interest
payment
date, with the exception that the first Interest Period shall commence on
and
include the Issue Date and end on and include December 14, 2006.
“
Investment
Grade Rating
”
means
a
rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or
the equivalent) by S&P, or an equivalent rating by any other Rating Agency.
“
Investment
Grade Securities
”
means:
|
(1)
|
securities
issued or directly and fully guaranteed or insured by the U.S.
government
or any agency or instrumentality thereof (other than Cash Equivalents),
|
|
(2)
|
securities
that have a rating equal to or higher than Baa3 (or equivalent)
by Moody’s
or BBB- (or equivalent) by S&P, or an equivalent rating by any other
Rating Agency, but excluding any debt securities or loans or advances
between and among the Issuer and its Subsidiaries,
|
|
(3)
|
investments
in any fund that invests exclusively in investments of the type
described
in clauses (1) and (2) which fund may also hold immaterial
amounts of cash pending investment and/or distribution, and
|
|
(4)
|
corresponding
instruments in countries other than the United States customarily
utilized
for high quality investments and in each case with maturities not
exceeding two years from the date of acquisition.
|
“
Inve
stments”
means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the form of loans (including guarantees),
advances or capital contributions (excluding accounts receivable, trade credit
and advances to customers and commission, travel and similar advances to
officers, employees and consultants made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities issued by any other Person and investments
that
are required by GAAP to be classified on the balance sheet of the Issuer
in the
same manner as the other investments included in this definition to the extent
such transactions involve the transfer of cash or other property. For purposes
of the definition of “Unrestricted Subsidiary” and the covenant described under
“—Certain Covenants—Limitation on Restricted Payments”:
|
(1)
|
“Investments”
shall include the portion (proportionate to the Issuer’s equity interest
in such Subsidiary) of the Fair Market Value of the net assets
of a
Subsidiary of the Issuer at the time that such Subsidiary is designated
an
Unrestricted Subsidiary;
provided
,
however
,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Issuer shall be deemed to continue to have a permanent “Investment” in
an Unrestricted Subsidiary equal to an amount (if positive) equal
to:
|
|
(a)
|
the
Issuer’s “Investment” in such Subsidiary at the time of such redesignation
less
|
|
(b)
|
the
portion (proportionate to the Issuer’s equity interest in such Subsidiary)
of the Fair Market Value of the net assets of such Subsidiary at
the time
of such redesignation; and
|
|
(2)
|
any
property transferred to or from an Unrestricted Subsidiary shall
be valued
at its Fair Market Value at the time of such transfer, in each
case as
determined in good faith by the Board of Directors of the Issuer.
|
“
Issue
Date
”
means
the date on which the Notes are originally issued.
“
LIBOR
,”
with
respect to an Interest Period, will be the rate (expressed as a percentage
per
annum) for deposits in U.S. dollars for a three-month period beginning on
the
second London Banking Day after the Determination Date that appears on Telerate
Page 3750 as of 11:00 a.m., London time, on the Determination Date. If Telerate
Page 3750 does not include such a rate or is unavailable on a Determination
Date, the Calculation Agent will request the principal London office of each
of
four major banks in the London interbank market, as selected by the Calculation
Agent, to provide such bank’s offered quotation (expressed as a percentage per
annum), as of approximately 11:00 a.m., London time, on such Determination
Date,
to prime banks in the London interbank market for deposits in a Representative
Amount in U.S. dollars for a three-month period beginning on the second London
Banking Day after the Determination Date. If at least two such offered
quotations are so provided, the rate for the Interest Period will be the
arithmetic mean of such quotations. If fewer than two such quotations are
so
provided, the Calculation Agent will request each of three major banks in
New
York City, as selected by the Calculation Agent, to provide such bank’s rate
(expressed as a percentage per annum), as
of
approximately 11:00 a.m., New York City time, on such Determination Date,
for
loans in a Representative Amount in U.S. dollars to leading European banks
for a
three-month period beginning on the second London Banking Day after the
Determination Date. If at least two such rates are so provided, the rate
for the
Interest Period will be the arithmetic mean of such rates. If fewer than
two
such rates are so provided, then the rate for the Interest Period will be
the
rate in effect with respect to the immediately preceding Interest Period.
“
Lien
”
means,
with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset, whether or not filed,
recorded or otherwise perfected under applicable law (including any conditional
sale or other title retention agreement, any lease in the nature thereof,
any
option or other agreement to sell or give a security interest in and any
filing
of or agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction);
provided
that in
no event shall an operating lease be deemed to constitute a Lien.
“
London
Banking Day
”
is
any
day on which dealings in U.S. dollars are transacted or, with respect to
any
future date, are expected to be transacted in the London interbank market.
“
Management
Group
”
means
the group consisting of the directors, executive officers and other management
personnel of the Issuer or any direct or indirect parent of the Issuer, as
the
case may be, on the Issue Date together with (1) any new directors whose
election by such boards of directors or whose nomination for election by
the
shareholders of the Issuer or any direct or indirect parent of the Issuer,
as
applicable, was approved by a vote of a majority of the directors of the
Issuer
or any direct or indirect parent of the Issuer, as applicable, then still
in
office who were either directors on the Issue Date or whose election or
nomination was previously so approved and (2) executive officers and other
management personnel of the Issuer or any direct or indirect parent of the
Issuer, as applicable, hired at a time when the directors on the Issue Date
together with the directors so approved constituted a majority of the directors
of the Issuer or any direct or indirect parent of the Issuer, as applicable.
“
Merger
Agreement
”
means
the agreement and plan of merger, dated as of June 28, 2006, by and among
Holdings, Merger Sub and Berry Plastics Group, as amended, supplemented or
modified from time to time prior to the Issue Date or thereafter (so long
as any
amendment, supplement or modification after the Issue Date, together with
all
other amendments, supplements and modifications after the Issue Date, taken
as a
whole, is not more disadvantageous to the holders of the Notes in any material
respect than the Merger Agreement as in effect on the Issue Date).
“
Moody’s
”
means
Moody’s Investors Service, Inc. or any successor to the rating agency business
thereof.
“
Net
Income
”
means,
with respect to any Person, the net income (loss) of such Person, determined
in
accordance with GAAP and before any reduction in respect of Preferred Stock
dividends.
“
Net
Proceeds
”
means
the aggregate cash proceeds received by the Issuer or any of its Restricted
Subsidiaries in respect of any Asset Sale (including, without limitation,
any
cash received in respect of or upon the sale or other disposition of any
Designated Non-cash Consideration received in any Asset Sale and any cash
payments received by way of deferred payment of principal pursuant to a note
or
installment receivable or otherwise, but only as and when received, but
excluding the assumption by the acquiring person of Indebtedness relating
to the
disposed assets or other consideration received in any other non-cash form),
net
of the direct costs relating to such Asset Sale and the sale or disposition
of
such Designated Non-cash Consideration (including, without limitation, legal,
accounting and investment banking fees, and
brokerage
and sales commissions), and any relocation expenses Incurred as a result
thereof, taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements
related
thereto), amounts required to be applied to the repayment of principal, premium
(if any) and interest on Indebtedness required (other than pursuant to the
second paragraph of the covenant described under “—Certain Covenants—Asset
Sales”) to be paid as a result of such transaction, and any deduction of
appropriate amounts to be provided by the Issuer as a reserve in accordance
with
GAAP against any liabilities associated with the asset disposed of in such
transaction and retained by the Issuer after such sale or other disposition
thereof, including, without limitation, pension and other post-employment
benefit liabilities and liabilities related to environmental matters or against
any indemnification obligations associated with such transaction.
“
Note
Guarantee
”
means
any guarantee of the obligations of the Issuer under the Indenture and the
Notes
by any Person in accordance with the provisions of the Indenture.
“
Note
Guarantor
”
means
any Person that Incurs a Note Guarantee;
provided
that
upon the release or discharge of such Person from its Note Guarantee in
accordance with the Indenture, such Person ceases to be a Note Guarantor.
“
Obligations
”
means
any principal, interest, penalties, fees, indemnifications, reimbursements
(including, without limitation, reimbursement obligations with respect to
letters of credit and bankers’ acceptances), damages and other liabilities
payable under the documentation governing any Indebtedness;
provided
that
Obligations with respect to the Notes shall not include fees or indemnifications
in favor of the Trustee and other third parties other than the holders of
the
Notes.
“
Officer
”
means
the Chairman of the Board, Chief Executive Officer, Chief Financial Officer,
President, any Executive Vice President, Senior Vice President or Vice
President, the Treasurer or the Secretary of the Issuer.
“
Officers’
Certificate
”
means
a
certificate signed on behalf of the Issuer by two Officers of the Issuer,
one of
whom must be the principal executive officer, the principal financial officer,
the treasurer or the principal accounting officer of the Issuer that meets
the
requirements set forth in the Indenture.
“
Opinion
of Counsel
”
means
a
written opinion from legal counsel who is acceptable to the Trustee. The
counsel
may be an employee of or counsel to the Issuer or the Trustee.
“
Other
Second-Lien Obligations
”
means
other Indebtedness of the Issuer and its Restricted Subsidiaries that is
equally
and ratably secured with the Notes and is designated by the Issuer as an
Other
Second-Lien Obligation.
“
Pari
Passu Indebtedness
”
means:
|
(1)
|
with
respect to the Issuer, the Notes and any Indebtedness which ranks
pari
passu in right of payment to the Notes; and
|
|
(2)
|
with
respect to any Note Guarantor, its Note Guarantee and any Indebtedness
which ranks pari passu in right of payment to such Note Guarantor’s Note
Guarantee.
|
“
Paying
Agent
”
means
an office or agency maintained by the Issuer where the notes may be presented
for payment.
“
Permitted
Holders
”
means,
at any time, each of (i) the Sponsors and (ii) the Management Group.
Any Person or group whose acquisition of beneficial ownership constitutes
a
Change of Control in respect of which a Change of Control Offer is made in
accordance
with the requirements of the Indenture will thereafter, together with its
Affiliates, constitute an additional Permitted Holder.
“
Permitted
Investments
”
means:
|
(1)
|
any
Investment in the Issuer or any Restricted Subsidiary;
|
|
(2)
|
any
Investment in Cash Equivalents or Investment Grade Securities;
|
|
(3)
|
any
Investment by the Issuer or any Restricted Subsidiary of the Issuer
in a
Person if as a result of such Investment (a) such Person becomes a
Restricted Subsidiary of the Issuer, or (b) such Person, in one
transaction or a series of related transactions, is merged, consolidated
or amalgamated with or into, or transfers or conveys all or substantially
all of its assets to, or is liquidated into, the Issuer or a Restricted
Subsidiary of the Issuer;
|
|
(4)
|
any
Investment in securities or other assets not constituting Cash
Equivalents
and received in connection with an Asset Sale made pursuant to
the
provisions of “—Certain Covenants—Asset Sales” or any other disposition of
assets not constituting an Asset Sale;
|
|
(5)
|
any
Investment existing on, or made pursuant to binding commitments
existing
on, the Issue Date;
|
|
(6)
|
advances
to employees, taken together with all other advances made pursuant
to this
clause (6), not to exceed $15.0 million at any one time
outstanding;
|
|
(7)
|
any
Investment acquired by the Issuer or any of its Restricted Subsidiaries
(a) in exchange for any other Investment or accounts receivable held
by the Issuer or any such Restricted Subsidiary in connection with
or as a
result of a bankruptcy, workout, reorganization or recapitalization
of the
issuer of such other Investment or accounts receivable, or (b) as a
result of a foreclosure by the Issuer or any of its Restricted
Subsidiaries with respect to any secured Investment or other transfer
of
title with respect to any secured Investment in default;
|
|
(8)
|
Hedging
Obligations permitted under clause (j) of the second paragraph of the
covenant described under “—Certain Covenants—Limitation on Incurrence of
Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;
|
|
(9)
|
any
Investment by the Issuer or any of its Restricted Subsidiaries
in a
Similar Business having an aggregate Fair Market Value, taken together
with all other Investments made pursuant to this clause (9) that are
at that time outstanding, not to exceed the greater of (x) $100.0
million and (y) 4.5% of Total Assets at the time of such Investment
(with the Fair Market Value of each Investment being measured at
the time
made and without giving effect to subsequent changes in value);
provided
,
however
,
that if any Investment pursuant to this clause (9) is made in any
Person that is not a Restricted Subsidiary of the Issuer at the
date of
the making of such Investment and such Person becomes a Restricted
Subsidiary of the Issuer after such date, such Investment shall
thereafter
be deemed to have been made pursuant to clause (1) above and shall
cease to have been made pursuant to this clause (9) for so long as
such Person continues to be a Restricted Subsidiary;
|
|
(10)
|
additional
Investments by the Issuer or any of its Restricted Subsidiaries
having an
aggregate Fair Market Value, taken together with all other Investments
made pursuant to this clause (10) that are at that time outstanding,
not to exceed the greater of (x) $100.0 million and (y) 4.5% of
Total Assets at the time of such
Investment
(with the Fair Market Value of each Investment being measured at
the time
made and without giving effect to subsequent changes in value);
|
|
(11)
|
loans
and advances to officers, directors and employees for business-related
travel expenses, moving expenses and other similar expenses, in
each case
Incurred in the ordinary course of business;
|
|
(12)
|
Investments
the payment for which consists of Equity Interests of the Issuer
(other
than Disqualified Stock) or any direct or indirect parent of the Issuer,
as applicable;
provided
,
however
,
that such Equity Interests will not increase the amount available
for
Restricted Payments under clause (3) of the definition of Cumulative
Credit contained in “—Certain Covenants—Limitation on Restricted
Payments”;
|
|
(13)
|
any
transaction to the extent it constitutes an Investment that is
permitted
by and made in accordance with the provisions of the second paragraph
of
the covenant described under “—Certain Covenants—Transactions with
Affiliates” (except transactions described in clauses (2), (6),
(7) and (11)(b) of such paragraph);
|
|
(14)
|
Investments
consisting of the licensing or contribution of intellectual property
pursuant to joint marketing arrangements with other Persons;
|
|
(15)
|
guarantees
issued in accordance with the covenants described under “—Certain
Covenants—Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock” and “—Certain Covenants—Future
Note Guarantors”;
|
|
(16)
|
Investments
consisting of or to finance purchases and acquisitions of inventory,
supplies, materials, services or equipment or purchases of contract
rights
or licenses or leases of intellectual property, in each case in
the
ordinary course of business;
|
|
(17)
|
any
Investment in a Receivables Subsidiary or any Investment by a Receivables
Subsidiary in any other Person in connection with a Qualified Receivables
Financing, including Investments of funds held in accounts permitted
or
required by the arrangements governing such Qualified Receivables
Financing or any related Indebtedness;
provided
,
however
,
that any Investment in a Receivables Subsidiary is in the form
of a
Purchase Money Note, contribution of additional receivables or
an equity
interest;
|
|
(18)
|
additional
Investments in joint ventures of the Issuer or any of its Restricted
Subsidiaries existing on the Issue Date not to exceed at any one
time in
the aggregate outstanding, $15.0 million; and
|
|
(19)
|
Investments
of a Restricted Subsidiary of the Issuer acquired after the Issue
Date or
of an entity merged into, amalgamated with, or consolidated with
the
Issuer or a Restricted Subsidiary of the Issuer in a transaction
that is
not prohibited by the covenant described under “—Merger, Amalgamation,
Consolidation or Sale of All or Substantially All Assets” after the Issue
Date to the extent that such Investments were not made in contemplation
of
such acquisition, merger, amalgamation or consolidation and were
in
existence on the date of such acquisition, merger, amalgamation
or
consolidation.
|
“
Permitted
Liens
”
means,
with respect to any Person:
|
(1)
|
pledges
or deposits by such Person under workmen’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in
connection
with bids, tenders, contracts (other than for the payment of Indebtedness)
or leases to which such Person is a party, or deposits to secure
public or
statutory obligations of such Person or deposits of cash or U.S.
government bonds to secure surety or appeal bonds to which such
Person is
a party, or deposits as security for contested taxes or import
duties or
for the payment of rent, in each case Incurred in the ordinary
course of
business;
|
|
(2)
|
Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in
each case for sums not yet due or being contested in good faith
by
appropriate proceedings or other Liens arising out of judgments
or awards
against such Person with respect to which such Person shall then
be
proceeding with an appeal or other proceedings for review;
|
|
(3)
|
Liens
for taxes, assessments or other governmental charges not yet due
or
payable or subject to penalties for nonpayment or which are being
contested in good faith by appropriate proceedings;
|
|
(4)
|
Liens
in favor of issuers of performance and surety bonds or bid bonds
or with
respect to other regulatory requirements or letters of credit issued
pursuant to the request of and for the account of such Person in
the
ordinary course of its business;
|
|
(5)
|
minor
survey exceptions, minor encumbrances, easements or reservations
of, or
rights of others for, licenses, rights-of-way, sewers, electric
lines,
telegraph and telephone lines and other similar purposes, or zoning
or
other restrictions as to the use of real properties or Liens incidental
to
the conduct of the business of such Person or to the ownership
of its
properties which were not Incurred in connection with Indebtedness
and
which do not in the aggregate materially adversely affect the value
of
said properties or materially impair their use in the operation
of the
business of such Person;
|
|
(6)
|
(A) Liens
on assets of a Restricted Subsidiary that is not a Note Guarantor
securing
Indebtedness of such Restricted Subsidiary permitted to be Incurred
pursuant to the covenant described under “—Certain Covenants—Limitation on
Incurrence of Indebtedness and Issuance of Disqualified Stock and
Preferred Stock”, (B) Liens securing an aggregate principal amount of
First Priority Lien Obligations not to exceed the greater of (x) the
aggregate amount of Indebtedness permitted to be incurred pursuant
to
clause (a) of the second paragraph of the covenant described under
“—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance
of Disqualified Stock and Preferred Stock” and (y) the maximum
principal amount of Indebtedness that, as of the date such Indebtedness
was Incurred, and after giving effect to the Incurrence of such
Indebtedness and the application of proceeds therefrom on such
date, would
not cause the Secured Indebtedness Leverage Ratio of the Issuer
to exceed
4.00 to 1.00 and (C) Liens securing Indebtedness permitted to be
Incurred pursuant to clause (d), (l) or (t) of the second
paragraph of the covenant described under “—Certain Covenants—Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock
and
Preferred Stock” (
provided
that in the case of clause (t), such Lien does not extend to the
property
or assets of any Subsidiary of the Issuer other than a Foreign
Subsidiary);
|
|
(7)
|
Liens
existing on the Issue Date;
|
|
(8)
|
Liens
on assets, property or shares of stock of a Person at the time
such Person
becomes a Subsidiary;
provided
,
however
,
that such Liens are not created or Incurred in connection with,
or in
contemplation of, such other Person becoming such a Subsidiary;
provided
,
further
,
however
,
that such Liens may not extend to any other property owned by the
Issuer
or any Restricted Subsidiary of the Issuer;
|
|
(9)
|
Liens
on assets or property at the time the Issuer or a Restricted Subsidiary
of
the Issuer acquired the assets or property, including any acquisition
by
means of a merger, amalgamation or consolidation with or into the
Issuer
or any Restricted Subsidiary of the Issuer;
provided
,
however
,
that such Liens are not created or Incurred in connection with,
or in
contemplation of, such acquisition;
provided
,
further
,
however
,
that the Liens may not extend to any other property owned by the
Issuer or
any Restricted Subsidiary of the Issuer;
|
|
(10)
|
Liens
securing Indebtedness or other obligations of a Restricted Subsidiary
owing to the Issuer or another Restricted Subsidiary of the Issuer
permitted to be Incurred in accordance with the covenant described
under
“—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance
of Disqualified Stock and Preferred Stock”;
|
|
(11)
|
Liens
securing Hedging Obligations not incurred in violation of the Indenture;
provided
that with respect to Hedging Obligations relating to Indebtedness,
such
Lien extends only to the property securing such Indebtedness;
|
|
(12)
|
Liens
on 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;
|
|
(13)
|
leases
and subleases of real property which do not materially interfere
with the
ordinary conduct of the business of the Issuer or any of its Restricted
Subsidiaries;
|
|
(14)
|
Liens
arising from Uniform Commercial Code financing statement filings
regarding
operating leases entered into by the Issuer and its Restricted
Subsidiaries in the ordinary course of business;
|
|
(15)
|
Liens
in favor of the Issuer or any Note Guarantor;
|
|
(16)
|
Liens
on accounts receivable and related assets of the type specified
in the
definition of “Receivables Financing” Incurred in connection with a
Qualified Receivables Financing;
|
|
(17)
|
deposits
made in the ordinary course of business to secure liability to
insurance
carriers;
|
|
(18)
|
Liens
on the Equity Interests of Unrestricted Subsidiaries;
|
|
(19)
|
grants
of software and other technology licenses in the ordinary course
of
business;
|
|
(20)
|
Liens
to secure any refinancing, refunding, extension, renewal or replacement
(or successive refinancings, refundings, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured
by any
Lien referred to in the foregoing clauses (6)(B), (7), (8), (9),
(10),
(11) and (15);
provided
,
however
,
that (x) such new Lien shall be limited to all or part of the same
property that secured
the
original Lien (plus improvements on such property), and (y) the
Indebtedness secured by such Lien at such time is not increased
to any
amount greater than the sum of (A) the outstanding principal amount
or, if greater, committed amount of the Indebtedness described
under
clauses (6)(B), (7), (8), (9), (10), (11) and (15) at the time
the original Lien became a Permitted Lien under the Indenture,
and
(B) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancing, refunding, extension, renewal
or
replacement;
provided
further, however,
that
in the case of any Liens to secure any refinancing, refunding,
extension
or renewal of Indebtedness secured by a Lien referred to in clause
(6)(B),
the principal amount of any Indebtedness Incurred for such refinancing,
refunding, extension or renewal shall be deemed secured by a Lien
under
clause (6)(B) and not this clause (20) for purposes of
determining the principal amount of Indebtedness outstanding under
clause
(6)(B), for purposes of clause (1) under “—Security for the Notes
—Release of Collateral” and for purposes of the definition of Secured Bank
Indebtedness;
|
|
(21)
|
Liens
on equipment of the Issuer or any Restricted Subsidiary granted
in the
ordinary course of business to the Issuer’s or such Restricted
Subsidiary’s client at which such equipment is located;
|
|
(22)
|
judgment
and attachment Liens not giving rise to an Event of Default and
notices of
lis pendens and associated rights related to litigation being contested
in
good faith by appropriate proceedings and for which adequate reserves
have
been made;
|
|
(23)
|
Liens
arising out of conditional sale, title retention, consignment or
similar
arrangements for the sale of goods entered into in the ordinary
course of
business;
|
|
(24)
|
Liens
incurred to secure cash management services in the ordinary course
of
business; and
|
|
(25)
|
other
Liens securing obligations incurred in the ordinary course of business
which obligations do not exceed $20.0 million at any one time
outstanding.
|
“
Person
”
means
any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
“
Preferred
Stock
”
means
any Equity Interest with preferential right of payment of dividends or upon
liquidation, dissolution, or winding up.
“
Purchase
Money Note
”
means
a
promissory note of a Receivables Subsidiary evidencing a line of credit,
which
may be irrevocable, from the Issuer or any Subsidiary of the Issuer to a
Receivables Subsidiary in connection with a Qualified Receivables Financing,
which note is intended to finance that portion of the purchase price that
is not
paid by cash or a contribution of equity.
“
Qualified
Receivables Financing
”
means
any Receivables Financing of a Receivables Subsidiary that meets the following
conditions:
|
(1)
|
the
Board of Directors of the Issuer shall have determined in good
faith that
such Qualified Receivables Financing (including financing terms,
covenants, termination events and other provisions) is in the aggregate
economically fair and reasonable to the Issuer and the Receivables
Subsidiary;
|
|
(2)
|
all
sales of accounts receivable and related assets to the Receivables
Subsidiary are made at Fair Market Value (as determined in good
faith by
the Issuer); and
|
|
(3)
|
the
financing terms, covenants, termination events and other provisions
thereof shall be market terms (as determined in good faith by the
Issuer)
and may include Standard Securitization Undertakings.
|
The
grant
of a security interest in any accounts receivable of the Issuer or any of
its
Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank
Indebtedness, Indebtedness in respect of the Notes or any Refinancing
Indebtedness with respect to the Notes shall not be deemed a Qualified
Receivables Financing.
“
Rating
Agency
”
means
(1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases
to rate the Notes for reasons outside of the Issuer’s control, a “nationally
recognized statistical rating organization” within the meaning of
Rule 15cs-1(c)(2)(vi)(F) under the Exchange Act selected by the Issuer or
any direct or indirect parent of the Issuer as a replacement agency for Moody’s
or S&P, as the case may be.
“
Receivables
Fees
”
means
distributions or payments made directly or by means of discounts with respect
to
any participation interests issued or sold in connection with, and all other
fees paid to a Person that is not a Restricted Subsidiary in connection with,
any Receivables Financing.
“
Receivables
Financing
”
means
any transaction or series of transactions that may be entered into by the
Issuer
or any of its Subsidiaries pursuant to which the Issuer or any of its
Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables
Subsidiary (in the case of a transfer by the Issuer or any of its Subsidiaries);
and (b) any other Person (in the case of a transfer by a Receivables
Subsidiary), or may grant a security interest in, any accounts receivable
(whether now existing or arising in the future) of the Issuer or any of its
Subsidiaries, and any assets related thereto including, without limitation,
all
collateral securing such accounts receivable, all contracts and all guarantees
or other obligations in respect of such accounts receivable, proceeds of
such
accounts receivable and other assets which are customarily transferred or
in
respect of which security interests are customarily granted in connection with
asset securitization transactions involving accounts receivable and any Hedging
Obligations entered into by the Issuer or any such Subsidiary in connection
with
such accounts receivable.
“
Receivables
Repurchase Obligation
”
means
any obligation of a seller of receivables in a Qualified Receivables Financing
to repurchase receivables arising as a result of a breach of a representation,
warranty or covenant or otherwise, including as a result of a receivable
or
portion thereof becoming subject to any asserted defense, dispute, off-set
or
counterclaim of any kind as a result of any action taken by, any failure
to take
action by or any other event relating to the seller.
“
Receivables
Subsidiary
”
means
a
Wholly Owned Restricted Subsidiary of the Issuer (or another Person formed
for
the purposes of engaging in Qualified Receivables Financing with the Issuer
in
which the Issuer or any Subsidiary of the Issuer makes an Investment and
to
which the Issuer or any Subsidiary of the Issuer transfers accounts receivable
and related assets) which engages in no activities other than in connection
with
the financing of accounts receivable of the Issuer and its Subsidiaries,
all
proceeds thereof and all rights (contractual or other), collateral and other
assets relating thereto, and any business or activities incidental or related
to
such business, and which is designated by the Board of Directors of the Issuer
(as provided below) as a Receivables Subsidiary and:
(a)
|
(a)
no
portion of the Indebtedness or any other obligations (contingent
or
otherwise) of which (i) is guaranteed by the Issuer or any other
Subsidiary
of
the Issuer (excluding guarantees of obligations (other than the principal
of and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings), (ii) is recourse to or obligates the Issuer or any
other Subsidiary of the Issuer in any way other than pursuant to
Standard
Securitization Undertakings, or (iii) subjects any property or asset
of the Issuer or any other Subsidiary of the Issuer, directly or
indirectly, contingently or otherwise, to the satisfaction thereof,
other
than pursuant to Standard Securitization Undertakings;
|
(b)
|
with
which neither the Issuer nor any other Subsidiary of the Issuer has
any
material contract, agreement, arrangement or understanding other
than on
terms which the Issuer reasonably believes to be no less favorable
to the
Issuer or such Subsidiary than those that might be obtained at the
time
from Persons that are not Affiliates of the Issuer; and
|
(c)
|
to
which neither the Issuer nor any other Subsidiary of the Issuer has
any
obligation to maintain or preserve such entity’s financial condition or
cause such entity to achieve certain levels of operating results.
|
Any
such
designation by the Board of Directors of the Issuer shall be evidenced to
the
Trustee by filing with the Trustee a certified copy of the resolution of
the
Board of Directors of the Issuer giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing conditions.
“
Registrar
”
means
an office or agency maintained by the Issuer where the notes may be presented
for registration of transfer or for exchange.
“
Representative
”
means
the trustee, agent or representative (if any) for an issue of Indebtedness;
provided
that if,
and for so long as, such Indebtedness lacks such a Representative, then the
Representative for such Indebtedness shall at all times constitute the holder
or
holders of a majority in outstanding principal amount of obligations under
such
Indebtedness.
“
Representative
Amount
”
means
a
principal amount of not less than $1,000,000 for a single transaction in
the
relevant market at the relevant time.
“
Restricted
Investment
”
means
an Investment other than a Permitted Investment.
“
Restricted
Subsidiary
”
means,
with respect to any Person, any Subsidiary of such Person other than an
Unrestricted Subsidiary of such Person. Unless otherwise indicated in this
“Description of the Notes,” all references to Restricted Subsidiaries shall mean
Restricted Subsidiaries of the Issuer.
“
Sale/Leaseback
Transaction
”
means
an arrangement relating to property now owned or hereafter acquired by the
Issuer or a Restricted Subsidiary whereby the Issuer or a Restricted Subsidiary
transfers such property to a Person and the Issuer or such Restricted Subsidiary
leases it from such Person, other than leases between the Issuer and a
Restricted Subsidiary of the Issuer or between Restricted Subsidiaries of
the
Issuer.
“
S&P
”
means
Standard & Poor’s Ratings Group or any successor to the rating agency
business thereof.
“
SEC
”
means
the Securities and Exchange Commission.
“
Secured
Bank Indebtedness
”
means
any Bank Indebtedness that is secured by a Permitted Lien incurred or deemed
incurred pursuant to clause (6)(B) of the definition of Permitted Lien.
“
Secured
Indebtedness
”
means
any Indebtedness secured by a Lien.
“
Secured
Indebtedness Leverage Ratio
”
means,
with respect to any Person, at any date the ratio of (i) Secured
Indebtedness of such Person and its Restricted Subsidiaries as of such date
of
calculation (determined on a consolidated basis in accordance with GAAP)
that
constitutes First Priority Lien Obligations to (ii) EBITDA of such Person
for the four full fiscal quarters for which internal financial statements
are
available immediately preceding such date on which such additional Indebtedness
is Incurred. In the event that the Issuer or any of its Restricted Subsidiaries
Incurs, repays, repurchases or redeems any Indebtedness subsequent to the
commencement of the period for which the Secured Indebtedness Leverage Ratio
is
being calculated but prior to the event for which the calculation of the
Secured
Indebtedness Leverage Ratio is made (the “
Secured
Leverage Calculation Date
”),
then
the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma
effect to such Incurrence, repayment, repurchase or redemption of Indebtedness
as if the same had occurred at the beginning of the applicable four-quarter
period;
provided
that
the
Issuer may elect pursuant to an Officers’ Certificate delivered to the Trustee
to treat all or any portion of the commitment under any Indebtedness as being
Incurred at such time, in which case any subsequent Incurrence of Indebtedness
under such commitment shall not be deemed, for purposes of this calculation,
to
be an Incurrence at such subsequent time.
For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as determined
in accordance with GAAP), in each case with respect to an operating unit
of a
business, and any operational changes that the Issuer or any of its Restricted
Subsidiaries has determined to make and/or made after the Issue Date and
during
the four-quarter reference period or subsequent to such reference period
and on
or prior to or simultaneously with the Secured Leverage Calculation Date
(each,
for purposes of this definition, a “
pro
forma event
”)
shall
be calculated on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, mergers, consolidations (including the
Transactions), discontinued operations and other operational changes (and
the
change of any associated Indebtedness and the change in EBITDA resulting
therefrom) had occurred on the first day of the four-quarter reference period.
If since the beginning of such period any Person that subsequently became
a
Restricted Subsidiary or was merged with or into the Issuer or any Restricted
Subsidiary since the beginning of such period shall have made any Investment,
acquisition, disposition, merger, consolidation, discontinued operation or
operational change, in each case with respect to an operating unit of a
business, that would have required adjustment pursuant to this definition,
then
the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma
effect thereto for such period as if such Investment, acquisition, disposition,
discontinued operation, merger, consolidation or operational change had occurred
at the beginning of the applicable four-quarter period.
For
purposes of this definition, whenever pro forma effect is to be given to
any pro
forma event, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Issuer. Any such pro forma
calculation may include adjustments appropriate, in the reasonable good faith
determination of the Issuer as set forth in an Officers’ Certificate, to reflect
(1) operating expense reductions and other operating improvements or
synergies reasonably expected to result from the applicable pro forma event
(including, to the extent applicable, from the Transactions) and (2) all
adjustments of the nature used in connection with the calculation of “Adjusted
EBITDA” as set forth in footnote 4 to the “Summary
Historical
and Unaudited Pro Forma Financial Data” under “Prospectus Summary” in this
prospectus to the extent such adjustments, without duplication, continue
to be
applicable to such four-quarter period.
“
Securities
Act
”
means
the Securities Act of 1933, as amended, and the rules and regulations of
the SEC
promulgated thereunder.
“
Security
Documents
”
means
the security agreements, pledge agreements, collateral assignments and related
agreements, as amended, supplemented, restated, renewed, refunded, replaced,
restructured, repaid, refinanced or otherwise modified from time to time,
creating the security interests in the Collateral as contemplated by the
Indenture.
“
Senior
Subordinated Notes
”
means
the 11% Senior Subordinated Notes due 2016 of the Issuer to be issued on
the
Issue Date to affiliates of The Goldman Sachs Group, Inc.
“
Significant
Subsidiary
”
means
any Restricted Subsidiary that would be a “Significant Subsidiary” of the Issuer
within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
“
Similar
Business
”
means
a
business, the majority of whose revenues are derived from the activities
of the
Issuer and its Subsidiaries as of the Issue Date or any business or activity
that is reasonably similar or complementary thereto or a reasonable extension,
development or expansion thereof or ancillary thereto.
“
Sponsors
”
means
(i) Apollo Management, L.P., Graham Partners, Inc. and any of their
respective Affiliates (collectively, the “
Apollo
Sponsors
”)
and
(ii) any Person that forms a group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
successor provision) with any Apollo Sponsors;
provided
that any
Apollo Sponsor (x) owns a majority of the voting power and (y) controls a
majority of the Board of Directors of the Issuer.
“
Standard
Securitization Undertakings
”
means
representations, warranties, covenants, indemnities and guarantees of
performance entered into by the Issuer or any Subsidiary of the Issuer which
the
Issuer has determined in good faith to be customary in a Receivables Financing
including, without limitation, those relating to the servicing of the assets
of
a Receivables Subsidiary, it being understood that any Receivables Repurchase
Obligation shall be deemed to be a Standard Securitization Undertaking.
“
Stated
Maturity
”
means,
with respect to any security, the date specified in such security as the
fixed
date on which the final payment of principal of such security is due and
payable, including pursuant to any mandatory redemption provision (but excluding
any provision providing for the repurchase of such security at the option
of the
holder thereof upon the happening of any contingency beyond the control of
the
issuer unless such contingency has occurred).
“
Subordinated
Indebtedness
”
means
(a) with respect to the Issuer, any Indebtedness of the Issuer which is by
its terms subordinated in right of payment to the Notes, and (b) with
respect to any Note Guarantor, any Indebtedness of such Note Guarantor which
is
by its terms subordinated in right of payment to its Note Guarantee.
“
Subsidiary
”
means,
with respect to any Person, (1) any corporation, association or other
business entity (other than a partnership, joint venture or limited liability
company) of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to vote
in
the election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person
or one
or more of the other Subsidiaries of that Person or a combination thereof,
and
(2) any partnership, joint venture or limited liability company of which
(x) more than 50% of the capital
accounts,
distribution rights, total equity and voting interests or general and limited
partnership interests, as applicable, are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof, whether in the form of membership, general,
special or limited partnership interests or otherwise, and (y) such Person
or any Subsidiary of such Person is a controlling general partner or otherwise
controls such entity.
“
Tax
Distributions
”
means
any distributions described in clause (12) of the covenant entitled
“—Certain Covenants—Limitation on Restricted Payments.”
“
TIA
”
means
the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect
on the date of the Indenture.
“
Total
Assets
”
means
the total consolidated assets of the Issuer and its Restricted Subsidiaries,
as
shown on the most recent balance sheet of the Issuer.
“
Transactions
”
means
the Acquisition and the transactions related thereto, the offering of the
Notes, the issuance and sale of the Senior Subordinated Notes on the Issue
Date
and borrowings made pursuant to the Credit Agreement on the Issue Date.
“
Treasury
Rate
”
means,
with respect to the Fixed Rate Notes, as of the applicable redemption date,
the
yield to maturity as of such redemption date of United States Treasury
securities with a constant maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15 (519) that has become
publicly available at least two business days prior to such redemption date
(or,
if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from such
redemption date to September 15, 2010;
provided
,
however
,
that if
the period from such redemption date to September 15, 2010 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be used.
“
Trust
Officer
”
means:
|
(1)
|
any
officer within the corporate trust department of the Trustee, including
any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the
Trustee who
customarily performs functions similar to those performed by the
Persons
who at the time shall be such officers, respectively, or to whom
any
corporate trust matter is referred because of such person’s knowledge of
and familiarity with the particular subject, and
|
|
(2)
|
who
shall have direct responsibility for the administration of the
Indenture.
|
“
Trustee
”
means
the party named as such in the Indenture until a successor replaces it and,
thereafter, means the successor.
“
Unrestricted
Subsidiary
”
means:
|
(1)
|
any
Subsidiary of the Issuer that at the time of determination shall
be
designated an Unrestricted Subsidiary by the Board of Directors
of such
Person in the manner provided below; and
|
|
(2)
|
any
Subsidiary of an Unrestricted Subsidiary.
|
The
Board
of Directors of the Issuer may designate any Subsidiary of the Issuer (including
any newly acquired or newly formed Subsidiary of the Issuer) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries
owns
any Equity Interests or Indebtedness of, or owns or holds any Lien on any
property of, the Issuer or any other Subsidiary of the Issuer that is not
a
Subsidiary of the Subsidiary to be so designated;
provided
,
however
,
that
the Subsidiary to be so designated and its Subsidiaries do not at the time
of
designation have and do not thereafter Incur any Indebtedness pursuant to
which
the lender has recourse to any of the assets of the Issuer or any of its
Restricted Subsidiaries;
provided
,
further
,
however
,
that
either:
(a)
|
the
Subsidiary to be so designated has total consolidated assets of $1,000
or
less; or
|
(b)
|
if
such Subsidiary has consolidated assets greater than $1,000, then
such
designation would be permitted under the covenant described under
“—Certain Covenants—Limitation on Restricted Payments.”
|
The
Board
of Directors of the Issuer may designate any Unrestricted Subsidiary to be
a
Restricted Subsidiary;
provided
,
however
,
that
immediately after giving effect to such designation:
(x)
|
(1) the
Issuer could Incur $1.00 of additional Indebtedness pursuant to the
Fixed
Charge Coverage Ratio test described under “—Certain Covenants—Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock
and
Preferred Stock,” or (2) the Fixed Charge Coverage Ratio for the
Issuer and its Restricted Subsidiaries would be greater than such
ratio
for the Issuer and its Restricted Subsidiaries immediately prior
to such
designation, in each case on a pro forma basis taking into account
such
designation, and
|
(y)
|
no
Event of Default shall have occurred and be continuing.
|
Any
such
designation by the Board of Directors of the Issuer shall be evidenced to
the
Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors of the Issuer giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing provisions.
“
U.S.
Government
Obligations
”
means
securities that are:
|
(1)
|
direct
obligations of the United States of America for the timely payment
of
which its full faith and credit is pledged, or
|
|
(2)
|
obligations
of a Person controlled or supervised by and acting as an agency
or
instrumentality of the United States of America, the timely payment
of
which is unconditionally guaranteed as a full faith and credit
obligation
by the United States of America,
|
which,
in
each case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank (as defined
in
Section 3(a)(2) of the Securities Act) as custodian with respect to any
such U.S. Government Obligations or a specific payment of principal of or
interest on any such U.S. Government Obligations held by such custodian for
the
account of the holder of such depository receipt;
provided
that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S.
Government Obligations evidenced by such depository receipt.
“
Voting
Stock
”
of
any
Person as of any date means the Capital Stock of such Person that is at the
time
entitled to vote in the election of the Board of Directors of such Person.
“
Weighted
Average Life to Maturity
”
means,
when applied to any Indebtedness or Disqualified Stock, as the case may be,
at
any date, the quotient obtained by dividing (1) the sum of the products of
the number of years from the date of determination to the date of each
successive scheduled principal payment of such Indebtedness or redemption
or
similar payment with respect to such Disqualified Stock multiplied by the
amount
of such payment, by (2) the sum of all such payments.
“
Wholly
Owned Restricted Subsidiary
”
is
any
Wholly Owned Subsidiary that is a Restricted Subsidiary.
“
Wholly
Owned Subsidiary
”
of
any
Person means a Subsidiary of such Person 100% of the outstanding Capital
Stock
or other ownership interests of which (other than directors’ qualifying shares
or shares required to be held by Foreign Subsidiaries) shall at the time
be
owned by such Person or by one or more Wholly Owned Subsidiaries of such
Person.
The
following is a summary of the material U.S. federal income tax consequences
relating to the exchange of the outstanding notes for exchange notes in the
exchange offer, but does not purport to be a complete analysis of all the
potential tax considerations relating thereto. This summary is based upon
the
Internal Revenue Code of 1986, as amended, Treasury Regulations, Internal
Revenue Service (“IRS”) rulings and pronouncements, and judicial decisions now
in effect, all of which are subject to change at any time by legislative,
administrative, or judicial action, possibly with retroactive effect. We
have
not sought and will not seek any rulings from the IRS with respect to the
statements made and the conclusions reached in the following summary, and
accordingly, there can be no assurance that the IRS will not successfully
challenge the tax consequences described below. This summary only applies
to you
if you exchange your outstanding notes for exchange notes in the exchange
offer.
This summary also does not discuss the effect of any state, local, foreign
or
other tax laws or any U.S. federal estate, gift or alternative minimum tax
considerations. In addition, this summary does not describe every aspect
of U.S.
federal income taxation that may be relevant to you in light of your particular
circumstances or if you are subject to special tax rules, including, without
limitation, if you are:
·
|
a
financial institution;
|
·
|
a
broker or dealer in securities or
currencies;
|
·
|
a
trader in securities that elects to use a mark-to-market method of
accounting for securities holdings;
|
·
|
a
person whose functional currency is not the U.S.
dollar;
|
·
|
a
tax-exempt organization;
|
·
|
an
investor in a pass-through entity holding the
notes;
|
·
|
an
S-corporation, a partnership or other entity treated as a partnership
for
tax purposes;
|
·
|
a
person holding notes as a part of a hedging, conversion or other
risk-reduction transaction or a straddle for tax purposes;
or
|
·
|
a
foreign person or entity.
|
YOU
ARE
URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION OF THE
UNITED
STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION AS WELL AS ANY
TAX
CONSEQUENCES ARISING UNDER THE U.S. FEDERAL ESTATE, GIFT OR ALTERNATIVE MINIMUM
TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING
JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
The
exchange of the outstanding notes for the exchange notes in the exchange
offer
should not constitute a taxable exchange for U.S. federal income tax
purposes,
because
the exchange notes should not be considered to differ materially in kind
or
extent from the
outstanding
notes. As a result, for U.S. federal income tax purposes (1) you should not
recognize any income, gain or loss as a result of exchanging the outstanding
notes for the exchange notes; (2) the holding period of the exchange notes
should include the holding period of the outstanding notes exchanged therefor;
and (3) the adjusted tax basis of the exchange notes should be the same as
the adjusted tax basis of the outstanding notes
exchanged
therefor immediately before such exchange.
PLAN
OF DISTRIBUTION
Each
broker-dealer that receives exchange notes for its own account in the exchange
offer must acknowledge that it will deliver a prospectus in connection
with any
resale of the exchange notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for outstanding notes
where
the outstanding notes were acquired as a result of market-making activities
or
other trading activities. We have agreed that, for a period ending 180
days from
the date on which this registration statement is declared effective, we
will
make this prospectus, as amended or supplemented, available to any broker-dealer
for use in connection with any resale. In addition, until , 2006, all dealers
effecting transactions in the exchange notes may be required to deliver
a
prospectus.
We
will
not receive any proceeds from any sale of exchange notes by broker-dealers.
Exchange notes received by broker-dealers for their own account in 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 these methods of resale.
These
resales may be made at market prices prevailing at the time of resale,
at prices
related to these prevailing market prices or negotiated prices. Any 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
broker-dealer and/or the purchasers of any of the exchange notes. Any
broker-dealer that resells exchange notes that were received by it for
its own
account in the exchange offer and any broker or dealer that participates
in a
distribution of the exchange notes may be deemed to be an underwriter within
the
meaning of the Securities Act, and any profit on the resale of exchange
notes
and any commission or concessions received by those persons may be deemed
to be
underwriting compensation under the Securities Act. Any such broker-dealer
must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, including the
delivery
of a prospectus that contains information with respect to any selling holder
required by the Securities Act in connection with any resale of the exchange
notes. By delivering a prospectus, however, a broker-dealer will not be
deemed
to admit that it is an underwriter within the meaning of the Securities
Act.
Furthermore,
any broker-dealer that acquired any of its outstanding notes directly from
us:
·
|
may
not rely on the applicable interpretation of the staff of the SEC’s
position co
ntained
in Exxon Capital Holdings Corp., SEC no-action letter (April 13,
1988),
Morgan, Stanley & Co. Inc., SEC no-action letter (June 5, 1991) and
Shearman & Sterling, SEC no-action letter (July 2, 1993);
and
|
·
|
must
comply with the registration and prospectus delivery requirements
of the
Securities Act in connection with any resale of the exchange
notes.
|
We
have
agreed to pay all expenses incident to the performance of our obligations
in
relation to the exchange offer (including the expenses of one counsel for
the
holder of the outstanding notes) other than commissions or concessions
of any
brokers or dealers. We will indemnify the holders of the exchange notes,
including any broker
-
dealers,
against various liabilities, including liabilities under the Securities
Act.
LEGAL
MATTERS
The
validity of the exchange notes and guarantees offered hereby will be passed
upon
for us by Jeffrey D. Thompson, our Vice President and General Counsel.
Mr.
Thompson owns shares of common stock of Berry Plastics Group and has options
to
purchase shares of common stock of Berry Plastics Group.
The
consolidated financial statements of Holdings as of December 31, 2005 and
January 1, 2005, and the related consolidated statements of income,
shareholders’ equity, and cash flows for each of the years ended
December 31, 2005, January 1, 2005 and December 27, 2003
appearing in this prospectus have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their report
thereon appearing elsewhere herein, and are included in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
The
indenture governing the notes requires us to file annual and quarterly
reports
and other information with the Securities and Exchange Commission. You
may read
and copy any reports, statements and other information we file at the
Commission’s public reference room in Washington, D.C. You may request copies of
the documents, upon payment of a duplicating fee, by writing the Public
Reference Section of the SEC. Please call 1-800-SEC-0330 for further information
on the public reference rooms. Our filings will also be available to the
public
from commercial document retrieval services and at the website maintained
by the
SEC at http://www.sec.gov. Our reports and other information that we have
filed,
or may in the future file, with the SEC are not incorporated by reference
into
and do not constitute part of this prospectus.
BPC
HOLDING CORPORATION
|
|
|
Page
|
Unaudited
Consolidated Financial Statements
|
|
|
|
Consolidated
Balance Sheets at July 1, 2006 and December 31,
2005
|
F-2
|
|
|
Consolidated
Statements of Income for the 13 weeks ended July 1, 2006 and
July 2, 2005 and the 26 weeks ended July 1, 2006 and
July 2, 2005
|
F-4
|
|
|
Consolidated
Statements of Changes in Stockholders’ Equity for the 26 weeks ended
July 1, 2006
|
F-5
|
|
|
Consolidated
Statements of Cash Flows for the 26 weeks ended July 1, 2006 and
July 2, 2005
|
F-6
|
|
|
Notes
to Unaudited Consolidated Financial Statements
|
F-7
|
|
|
Audited
Consolidated Financial Statements
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-18
|
|
|
Consolidated
Balance Sheets at December 31, 2005 and January 1,
2005
|
F-19
|
|
|
Consolidated
Statements of Income for the periods ended December 31,
2005, January 1, 2005 and December 27, 2003
|
F-20
|
|
|
Consolidated
Statements of Changes in Stockholders’ Equity for the periods ended
December 31, 2005, January 1, 2005 and December 27,
2003
|
F-21
|
|
|
Consolidated
Statements of Cash Flows for the periods ended December 31,
2005, January 1, 2005 and December 27, 2003
|
F-22
|
|
|
Notes
to Audited Consolidated Financial Statements
|
F-23
|
BPC
Holding Corporation
Consolidated
Balance Sheets
(in
thousands of dollars, except share information)
|
|
|
|
|
|
|
|
July 1,
2006
|
|
December 31,
2005
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
35,251
|
|
$
|
24,756
|
|
Accounts
receivable (less allowance for doubtful accounts of $6,376
at July 1,
2006 and $5,766 at December 31, 2005)
|
|
|
166,924
|
|
|
140,443
|
|
Inventories:
|
|
|
|
|
|
|
|
Finished
goods
|
|
|
113,560
|
|
|
101,632
|
|
Raw
materials and supplies
|
|
|
49,794
|
|
|
50,716
|
|
|
|
|
163,354
|
|
|
152,348
|
|
Deferred
income taxes
|
|
|
8,623
|
|
|
22,905
|
|
Prepaid
expenses and other current assets
|
|
|
29,245
|
|
|
39,037
|
|
Total
current assets
|
|
|
403,397
|
|
|
379,489
|
|
|
|
|
|
|
|
|
|
Property
and equipment:
|
|
|
|
|
|
|
|
Land
|
|
|
12,345
|
|
|
12,292
|
|
Buildings
and improvements
|
|
|
95,139
|
|
|
92,810
|
|
Equipment
and construction in progress
|
|
|
551,547
|
|
|
497,364
|
|
|
|
|
659,031
|
|
|
602,466
|
|
Less
accumulated depreciation
|
|
|
222,561
|
|
|
179,022
|
|
|
|
|
436,470
|
|
|
423,444
|
|
|
|
|
|
|
|
|
|
Intangible
assets:
|
|
|
|
|
|
|
|
Deferred
financing fees, net
|
|
|
16,783
|
|
|
18,333
|
|
Customer
relationships, net
|
|
|
248,662
|
|
|
255,981
|
|
Goodwill
|
|
|
495,693
|
|
|
495,258
|
|
Trademarks,
net
|
|
|
45,131
|
|
|
47,065
|
|
Other
intangibles, net
|
|
|
27,150
|
|
|
28,260
|
|
|
|
|
833,419
|
|
|
844,897
|
|
Total
assets
|
|
$
|
1,673,286
|
|
$
|
1,647,830
|
|
|
|
|
|
|
|
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Consolidated
Balance Sheets (continued)
(in
thousands of dollars, except share information)
|
|
|
|
|
|
|
|
July 1,
2006
|
|
December 31,
2005
|
|
|
|
(Unaudited)
|
|
|
|
Liabilities
and stockholders’ equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
|
97,310
|
|
$
|
64,970
|
|
Accrued
interest
|
|
|
17,046
|
|
|
20,165
|
|
Employee
compensation, payroll and other taxes
|
|
|
44,472
|
|
|
43,915
|
|
Accrued
expenses and other current liabilities
|
|
|
30,332
|
|
|
34,730
|
|
Current
portion of long-term debt
|
|
|
14,419
|
|
|
13,928
|
|
Total
current liabilities
|
|
|
203,579
|
|
|
177,708
|
|
Long-term
debt, less current portion
|
|
|
1,121,401
|
|
|
1,146,692
|
|
Deferred
income taxes
|
|
|
94,466
|
|
|
94,934
|
|
Other
long-term liabilities
|
|
|
26,171
|
|
|
25,108
|
|
Total
liabilities
|
|
|
1,445,617
|
|
|
1,444,442
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity:
|
|
|
|
|
|
|
|
Preferred
Stock; $.01 par value: 500,000 shares authorized; 0 shares
issued and
outstanding at July 1, 2006 and December 31,
2005
|
|
|
—
|
|
|
—
|
|
Common
Stock; $.01 par value: 5,000,000 shares authorized; 3,398,807
shares
issued and 3,374,351 shares outstanding at July 1, 2006; and
3,398,807 shares issued and 3,374,348 shares outstanding at
December 31, 2005
|
|
|
34
|
|
|
34
|
|
Additional
paid-in capital
|
|
|
348,715
|
|
|
346,943
|
|
Adjustment
of the carryover basis of continuing stockholders
|
|
|
(196,603
|
)
|
|
(196,603
|
)
|
Notes
receivable—common stock
|
|
|
(11,389
|
)
|
|
(14,273
|
)
|
Treasury
stock: 23,196 and 24,459 shares of common stock at July 1, 2006 and
December 31, 2005, respectively
|
|
|
(3,525
|
)
|
|
(3,547
|
)
|
Retained
earnings
|
|
|
76,881
|
|
|
58,969
|
|
Accumulated
other comprehensive income
|
|
|
13,556
|
|
|
11,865
|
|
Total
stockholders’ equity
|
|
|
227,669
|
|
|
203,388
|
|
Total
liabilities and stockholders’ equity
|
|
$
|
1,673,286
|
|
$
|
1,647,830
|
|
|
|
|
|
|
|
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Consolidated
Statements of Income
(in
thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks
Ended
|
|
Twenty-six
Weeks
Ended
|
|
|
|
July 1,
2006
|
|
July 2,
2005
|
|
July 1,
2006
|
|
July 2,
2005
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Net
sales
|
|
$
|
375,114
|
|
$
|
282,871
|
|
$
|
731,078
|
|
$
|
508,181
|
|
Cost
of goods sold
|
|
|
299,320
|
|
|
233,477
|
|
|
583,941
|
|
|
417,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
75,794
|
|
|
49,394
|
|
|
147,137
|
|
|
90,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
|
9,723
|
|
|
7,593
|
|
|
20,143
|
|
|
14,895
|
|
General
and administrative
|
|
|
16,991
|
|
|
9,546
|
|
|
31,794
|
|
|
18,425
|
|
Research
and development
|
|
|
1,899
|
|
|
1,428
|
|
|
3,875
|
|
|
2,456
|
|
Amortization
of intangibles
|
|
|
5,325
|
|
|
1,985
|
|
|
10,689
|
|
|
3,758
|
|
Other
expenses
|
|
|
2,724
|
|
|
389
|
|
|
3,781
|
|
|
693
|
|
Operating
income
|
|
|
39,132
|
|
|
28,453
|
|
|
76,855
|
|
|
50,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
loss (gain) on investment in Southern Packaging
|
|
|
(515
|
)
|
|
937
|
|
|
(299
|
)
|
|
1,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before interest and taxes
|
|
|
39,647
|
|
|
27,516
|
|
|
77,154
|
|
|
48,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
22,721
|
|
|
16,513
|
|
|
45,123
|
|
|
30,535
|
|
Loss
on extinguished debt
|
|
|
—
|
|
|
7,045
|
|
|
—
|
|
|
7,045
|
|
Income
|
|
|
(218
|
)
|
|
(208
|
)
|
|
(612
|
)
|
|
(412
|
)
|
Income
before income taxes
|
|
|
17,144
|
|
|
4,166
|
|
|
32,643
|
|
|
11,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
|
7,412
|
|
|
2,415
|
|
|
14,731
|
|
|
6,174
|
|
Net
income
|
|
$
|
9,732
|
|
$
|
1,751
|
|
$
|
17,912
|
|
$
|
5,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Consolidated
Statements of Changes in Stockholders’ Equity
(Unaudited)
(in
thousands of dollars)
|
Common
Stock
|
Additional
Paid-In
Capital
|
Adjustment
of
the
carryover
basis
of
continuing
stockholders
|
Notes
receivable—
common
stock
|
Treasury
Stock
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
(Losses)
|
Total
|
Balance
at
December 31,
2005
|
$
34
|
$
346,943
|
$
(196,603
)
|
$
(14,273
)
|
$
(3,547
)
|
$
58,969
|
$
11,865
|
$
203,388
|
Collection
on
notes
receivable
|
—
|
—
|
—
|
3,234
|
—
|
—
|
—
|
3,234
|
Purchase
of
treasury
stock
|
—
|
(204
)
|
—
|
—
|
(827
)
|
—
|
—
|
(1,031
)
|
Sale
of
treasury
stock
|
—
|
—
|
—
|
—
|
849
|
—
|
—
|
849
|
Interest
on
notes
receivable
|
—
|
—
|
—
|
(350
)
|
—
|
—
|
—
|
(350
)
|
Stock-based
compensation
|
—
|
1,976
|
—
|
—
|
—
|
—
|
—
|
1,976
|
Translation
gains
|
—
|
—
|
—
|
—
|
—
|
—
|
1,758
|
1,758
|
Other
compre-
hensive
losses
|
—
|
—
|
—
|
—
|
—
|
—
|
(67
)
|
(67
)
|
Net
income
|
—
|
—
|
—
|
—
|
—
|
17,912
|
—
|
17,912
|
Balance
at
July 1,
2006
|
$
34
|
$
348,715
|
$
(196,603
)
|
$
(11,389
)
|
$
(3,525
)
|
$
76,881
|
$
13,556
|
$
227,669
|
|
|
|
|
|
|
|
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Consolidated
Statements of Cash Flows
(in
thousands of dollars)
|
|
Twenty-six
Weeks Ended
|
|
|
|
July 1,
2006
|
|
July 2,
2005
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Operating
activities:
|
|
|
|
|
|
Net
income
|
|
$
|
17,912
|
|
$
|
5,550
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
43,307
|
|
|
30,391
|
|
Non-cash
interest expense
|
|
|
954
|
|
|
982
|
|
Write
off of deferred financing fees
|
|
|
—
|
|
|
7,045
|
|
Amortization
of intangibles
|
|
|
10,689
|
|
|
3,758
|
|
Non-cash
compensation
|
|
|
1,976
|
|
|
—
|
|
Unrealized
(gain) loss on investment in Southern Packaging
|
|
|
(299
|
)
|
|
1,569
|
|
Deferred
income taxes
|
|
|
13,833
|
|
|
5,641
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable, net
|
|
|
(26,077
|
)
|
|
(21,910
|
)
|
Inventories
|
|
|
(10,783
|
)
|
|
8,697
|
|
Prepaid
expenses and other assets
|
|
|
9,452
|
|
|
4,007
|
|
Accrued
interest
|
|
|
(3,118
|
)
|
|
1,759
|
|
Payables
and accrued expenses
|
|
|
29,296
|
|
|
3,896
|
|
Net
cash provided by operating activities
|
|
|
87,142
|
|
|
51,385
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Additions
to property and equipment
|
|
|
(52,217
|
)
|
|
(32,303
|
)
|
Proceeds
from disposal of property and equipment
|
|
|
23
|
|
|
1,710
|
|
Acquisitions
of businesses
|
|
|
—
|
|
|
(468,106
|
)
|
Net
cash used for investing activities
|
|
|
(52,194
|
)
|
|
(498,699
|
)
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Proceeds
from long-term borrowings
|
|
|
—
|
|
|
466,457
|
|
Payments
on long-term borrowings
|
|
|
(27,624
|
)
|
|
(13,900
|
)
|
Proceeds
from notes receivable
|
|
|
3,234
|
|
|
—
|
|
Purchase
of treasury stock
|
|
|
(1,031
|
)
|
|
—
|
|
Sale
of treasury stock
|
|
|
849
|
|
|
134
|
|
Net
cash provided by (used for) financing activities
|
|
|
(24,572
|
)
|
|
452,691
|
|
Effect
of exchange rate changes on cash
|
|
|
119
|
|
|
12
|
|
Net
increase in cash and cash equivalents
|
|
|
10,495
|
|
|
5,389
|
|
Cash
and cash equivalents at beginning of period
|
|
|
24,756
|
|
|
264
|
|
Cash
and cash equivalents at end of period
|
|
$
|
35,251
|
|
$
|
5,653
|
|
|
|
|
|
|
|
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Notes
to Consolidated Financial Statements
(In
thousands of dollars, except as otherwise noted)
(Unaudited)
1.
Basis of Presentation
The
accompanying unaudited consolidated financial statements of BPC Holding
Corporation (the “Company”) have been prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”) for interim
financial information and with the instructions for Form 10-Q and Article
10 of
Regulation S-X. Accordingly, they do not include all of the information
and
footnotes required by GAAP for complete financial statements. In the opinion
of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the periods presented are not necessarily indicative of the
results
that may be expected for the full fiscal year. The accompanying financial
statements include the results of the Company and its wholly-owned subsidiary,
Berry Plastics Corporation (“Berry”), and Berry’s wholly-owned subsidiaries.
Certain amounts in the prior year financial statements have been reclassified
to
conform to the current year presentation.
2.
Recent Development
On
June 28, 2006, the Company and affiliates of Apollo Management, L.P.
(“Apollo”) and Graham Partners, Inc. (“Graham Partners” and, together with
Apollo, the “Sponsors”) signed a definitive agreement for the Sponsors to
acquire the Company for an enterprise value of $2.25 billion in aggregate
consideration (subject to adjustments in accordance with the definitive
agreement) (the “Acquisition”). The Acquisition was consummated on September 20,
2006. As a result of the Acquisition, the Company is a wholly-owned subsidiary
of Berry Plastics Group, Inc., the majority shareholder of which is
Apollo.
3.
Recent Acquisitions
On
April 11, 2005, a subsidiary of Berry, Berry Plastics de México, S. de R.L.
de C.V., acquired all of the injection molding closure assets of Euromex
Plastics, S.A. de C.V. (“Euromex”), an injection molding manufacturer located in
Toluca, Mexico (“the Mexico Acquisition”), for aggregate consideration of
approximately $8.2 million. The purchase price was allocated to fixed assets
($4.1 million), inventory ($1.6 million), goodwill ($0.7 million), and
other
intangibles ($1.8 million). The purchase was financed through borrowings
under
the Company’s existing revolving credit facility and cash on hand. The
operations from the Mexico Acquisition are included in our results of operations
since the acquisition date.
On
June 3, 2005, Berry acquired Kerr Group, Inc. (“Kerr”) for aggregate
consideration of approximately $454.8 million (the “Kerr Acquisition”),
including direct costs associated with the acquisition. The operations
from the
Kerr Acquisition are included in our results of operations since the acquisition
date. The purchase price was financed through additional term loan borrowings
under an amendment to our existing senior secured credit facility and cash
on
hand. The following table summarizes the allocation of purchase price and
the
estimated fair values of the assets acquired and liabilities assumed at
the date
of the acquisition.
|
|
|
|
Current
assets
|
|
$
|
85,417
|
|
Property
and equipment
|
|
|
145,688
|
|
Goodwill
|
|
|
134,003
|
|
Customer
relationships
|
|
|
182,094
|
|
Trademarks
|
|
|
16,140
|
|
Other
intangibles
|
|
|
22,291
|
|
Total
assets
|
|
|
585,633
|
|
|
|
|
|
|
Current
liabilities
|
|
|
56,862
|
|
Long-term
liabilities
|
|
|
73,942
|
|
Total
liabilities
|
|
|
130,804
|
|
Net
assets acquired
|
|
$
|
454,829
|
|
In
accordance with the criteria stated in Emerging Issues Task Force (“EITF”) Issue
No. 95-3, “Recognition of Liabilities in Connection with a Purchase Business
Combination” (“EITF 95-3”), the Company established opening balance sheet
reserves related to plant shutdown and severance costs. The opening balances
and
current year activity is presented in the following table.
|
|
|
|
|
|
Established
at
Opening
Balance
Sheet
|
|
|
January 1,
2006
|
Payments
|
July 1,
2006
|
EITF
95-3 reserves
|
$
2,700
|
$
2,221
|
$
(588
)
|
$
1,633
|
The
pro
forma financial results presented below are unaudited and assume that the
Kerr
Acquisition occurred at the beginning of the respective period. Pro forma
results have not been adjusted to reflect the Mexico Acquisition as they
do not
differ materially from the pro forma results presented below. Pro forma
net
sales and net income were $352,963 and $5,503, respectively, for the thirteen
weeks ended July 2, 2005. Pro forma net sales and net income were $676,496
and $7,227, respectively, for the twenty-six weeks ended July 2, 2005. The
financial results for the thirteen and twenty-six weeks ended July 1, 2006
have not been adjusted as the acquired businesses were owned by Berry for
the
entire period. The information presented is for informational purposes
only and
is not necessarily indicative of the operating results that would have
occurred
had the Kerr Acquisition been consummated at the beginning of the respective
period, nor are they necessarily indicative of future operating results.
Further, the information reflects only pro forma adjustments for additional
amortization,
additional
interest expense, elimination of Berry’s write off of deferred financing fees,
and elimination of Kerr’s closing expenses, net of the applicable income tax
effects.
4.
Long-Term Debt
Long
term
consists of the following:
|
|
|
|
|
|
|
|
July 1,
2006
|
|
December 31,
2005
|
|
Outstanding
Notes
|
|
$
|
335,000
|
|
$
|
335,000
|
|
Debt
premium on existing 10
3
/4%
Notes, net
|
|
|
7,111
|
|
|
7,699
|
|
Existing
term loans
|
|
|
767,050
|
|
|
791,025
|
|
Capital
leases
|
|
|
26,659
|
|
|
26,896
|
|
|
|
|
1,135,820
|
|
|
1,160,620
|
|
Less
current portion of long-term debt
|
|
|
14,419
|
|
|
13,928
|
|
|
|
$
|
1,121,401
|
|
$
|
1,146,692
|
|
The
current portion of long-term debt consists of $7.9 million of quarterly
installments on the existing term loans and $6.5 million of principal payments
related to capital lease obligations.
On
July 22, 2002, the Company entered into a credit and guaranty agreement and
a related pledge security agreement with a syndicate of lenders led by
Goldman
Sachs Credit Partners L.P., as administrative agent (as heretofore amended
and
restated, the “Existing Credit Facility”). The Existing Credit Facility provides
(1) a $795.0 million term loan and (2) a $150.0 million revolving
credit facility. The Existing Credit Facility permits the Company to borrow
up
to an additional $150.0 million of incremental senior term indebtedness
from
lenders willing to provide such loans subject to certain restrictions.
The
maturity date of the term loan is December 2, 2011, and the maturity date
of the revolving credit facility is March 31, 2010. The indebtedness under
the Existing Credit Facility is guaranteed by Holding and all of its domestic
subsidiaries. The obligations of Berry under the Existing Credit Facility
and
the guarantees thereof are secured by substantially all of the assets of
such
entities. At July 1, 2006, there were no borrowings outstanding on this
revolving credit facility. The revolving credit facility allows up to $35.0
million of letters of credit to be issued instead of borrowings under the
revolving credit facility. At July 1, 2006 and December 31, 2005, the
Company had $14.7 million in letters of credit outstanding under the revolving
credit facility.
The
Existing Credit Facility contains significant financial and operating covenants,
including prohibitions on the ability to incur certain additional indebtedness
or to pay dividends, and restrictions on the ability to make capital
expenditures. The Existing Credit Facility also contains borrowing conditions
and customary events of default, including nonpayment of principal or interest,
violation of covenants, inaccuracy of representations and warranties,
cross-defaults to other indebtedness, bankruptcy and other insolvency events
(other than in the case of certain foreign subsidiaries). The Company was
in
compliance with all the financial and operating covenants at July 1, 2006.
The term loan amortizes quarterly as follows: $1,987,500 each quarter which
began on September 30, 2005 and ends September 30, 2010 and
$188,315,625 each quarter beginning December 31, 2010 and ending
September 30, 2011. In June 2005, the Company made a voluntary
prepayment of $20.0 million on the Company’s senior term loan.
Borrowings
under the Existing Credit Facility bear interest, at the Company’s option, at
either (i) a base rate (equal to the greater of the prime rate and the
federal funds rate plus 0.5%) plus the applicable margin (the “Base Rate Loans”)
or (ii) an adjusted eurodollar LIBOR (adjusted for reserves) plus the
applicable margin (the “Eurodollar Rate Loans”). With respect to the term loan,
the “applicable margin” is (i) with respect to Base Rate Loans,
1.00% per annum and (ii) with respect to Eurodollar Rate Loans,
2.00% per annum. In addition, the applicable margins with respect to the
term loan can be further reduced by an additional .25% per annum subject to
the Company meeting a leverage ratio target, which was met based on the
results
through July 1, 2006. With respect to the revolving credit facility, the
“applicable margin” is subject to a pricing grid which ranges from
2.75% per annum to 2.00% per annum, depending on the leverage ratio
(2.50% based on results through July 1, 2006). The “applicable margin” with
respect to Base Rate Loans will always be 1.00% per annum less than the
“applicable margin” for Eurodollar Rate Loans. In October 2002, Berry entered
into an interest rate collar arrangement to protect $50.0 million of the
outstanding variable rate term loan debt from future interest rate volatility.
The collar floor is set at 1.97% LIBOR (London Interbank Offering Rate)
and
capped at 6.75% LIBOR. The agreement was effective January 15, 2003 and
expires on July 15, 2006. In June 2005, Berry entered into three separate
interest rate swap transactions to protect $300.0 million of the outstanding
variable rate term loan debt from future interest rate volatility. The
agreements were effective June 3, 2005 and expire on June 3, 2008. The
agreements swap three month variable LIBOR contracts for a fixed rate three
year
rate of 3.897%. All of the Company’s interest rate hedge transactions are
accounted for under the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities”
(SFAS No. 133”). At July 1, 2006, the Company had unused borrowing capacity
under the New Credit Facility’s revolving line of credit of $135.3 million.
Although the $135.3 million was available at July 1, 2006, the covenants
under our New Credit Facility may limit our ability to make such borrowings
in
the future.
5.
Stock-Based Compensation
The
Company previously applied the intrinsic value method prescribed in Accounting
Principles Board Opinion 25, “Accounting for Stock Issued to Employees.” In
December 2004, the FASB issued SFAS No. 123R (Revised 2004,) Share-Based
Payment
(“SFAS 123R”), which requires that the compensation cost relating to share-based
payment transactions be recognized in financial statements based on alternative
fair value models. The share-based compensation cost will be measured based
on
the fair value of the equity or liability instruments issued. The Company
adopted SFAS 123R on January 1, 2006 using the modified prospective method
and recorded $2.0 million in the twenty-six week period ended July 1, 2006
of
non-cash charges for stock compensation related to amortization of the
fair
value of unvested stock options. Under this method, the Company will recognize
compensation cost, on a prospective basis, for the portion of outstanding
awards
for which the requisite service has not yet been rendered as of January 1,
2006. In addition, the Company will recognize compensation cost on any
new
grants based upon the grant date fair value of those awards calculated
under
SFAS 123 for pro forma disclosure purposes. Accordingly, we have not restated
prior period amounts. The following table illustrates the pro forma effect
on
net income for periods prior to adoption of SFAS 123R as if we had applied
the
fair value recognition provisions of SFAS 123 during such periods.
|
|
Thirteen Weeks
Ended
July 2,
2005
|
|
Twenty-six Weeks
Ended
July 2,
2005
|
|
Reported
net income
|
|
$
|
1,751
|
|
$
|
5,550
|
|
Total
stock-based employee compensation expense determined under fair
value
based method, for all awards, net of tax
|
|
|
(571
|
)
|
|
(1,143
|
)
|
Pro
forma net income
|
|
$
|
1,180
|
|
$
|
4,407
|
|
6.
Comprehensive Income
Comprehensive
income is comprised of net income, other comprehensive income (losses),
and
gains or losses resulting from currency translations of foreign investments.
Other comprehensive income (losses) includes unrealized gains or losses
on
derivative financial instruments and minimum pension liability adjustments.
The
details of comprehensive income (losses) are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks
Ended
|
|
Twenty-six
Weeks
Ended
|
|
|
|
July 1,
2006
|
|
July 2,
2005
|
|
July 1,
2006
|
|
July 2,
2005
|
|
Net
income
|
|
$
|
9,732
|
|
$
|
1,751
|
|
$
|
17,912
|
|
$
|
5,550
|
|
Other
comprehensive income (losses)
|
|
|
675
|
|
|
(3,468
|
)
|
|
(67
|
)
|
|
(3,488
|
)
|
Currency
translation income (losses)
|
|
|
1,422
|
|
|
(1,819
|
)
|
|
1,758
|
|
|
(2,904
|
)
|
Comprehensive
income (losses)
|
|
$
|
11,829
|
|
$
|
(3,536
|
)
|
$
|
19,603
|
|
$
|
(842
|
)
|
7.
Income Taxes
A
reconciliation of income tax expense, computed at the federal statutory
rate, to
income tax expense, as provided for in the financial statements, is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks
Ended
|
|
Twenty-six
Weeks
Ended
|
|
|
|
July 1,
2006
|
|
July 2,
2005
|
|
July 1,
2006
|
|
July 2,
2005
|
|
Income
tax expense computed at statutory rate
|
|
$
|
6,000
|
|
$
|
1,458
|
|
$
|
11,425
|
|
$
|
4,103
|
|
State
income tax expense, net of federal taxes
|
|
|
815
|
|
|
258
|
|
|
1,551
|
|
|
727
|
|
Expenses
not deductible for income tax purposes
|
|
|
189
|
|
|
120
|
|
|
359
|
|
|
241
|
|
Change
in valuation allowance
|
|
|
810
|
|
|
666
|
|
|
1,618
|
|
|
1,205
|
|
Other
|
|
|
(402
|
)
|
|
(87
|
)
|
|
(222
|
)
|
|
(102
|
)
|
Income
tax expense
|
|
$
|
7,412
|
|
$
|
2,415
|
|
$
|
14,731
|
|
$
|
6,174
|
|
8.
Employee Retirement Plans
In
connection with the Kerr Acquisition, the Company acquired two defined
benefit
pension plans which cover substantially all former employees and former
union
employees at Kerr’s former Lancaster facility. The Company also acquired a
retiree health plan from Kerr, which covers certain healthcare and life
insurance benefits for certain retired employees and their spouses. The
Company
also maintains a defined benefit pension plan covering the Poly-Seal employees
under a collective bargaining agreement. The Company’s defined benefit and
retiree health benefit plans have a minimum pension liability of $19.9
million
at July 1, 2006 and December 31, 2005, which are recorded as other
liabilities in the consolidated balance sheets. Net pension and retiree
health
benefit expense included the following components:
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks
Ended
|
|
Twenty-six
Weeks
Ended
|
|
|
|
July 1,
2006
|
|
July 2,
2005
|
|
July 1,
2006
|
|
July 2,
2005
|
|
Components
of net period benefit cost:
|
|
|
|
|
|
|
|
|
|
Defined
Benefit Pension Plans
|
|
|
|
|
|
|
|
|
|
Service
cost
|
|
$
|
64
|
|
$
|
70
|
|
$
|
128
|
|
$
|
140
|
|
Interest
cost
|
|
|
562
|
|
|
317
|
|
|
1,124
|
|
|
417
|
|
Expected
return on plan assets
|
|
|
(634
|
)
|
|
(284
|
)
|
|
(1,268
|
)
|
|
(394
|
)
|
Amortization
of prior service cost
|
|
|
23
|
|
|
28
|
|
|
46
|
|
|
56
|
|
Recognized
actuarial loss
|
|
|
4
|
|
|
2
|
|
|
8
|
|
|
4
|
|
Net
periodic benefit cost
|
|
$
|
19
|
|
$
|
133
|
|
$
|
38
|
|
$
|
223
|
|
Retiree
Health Benefit Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
cost
|
|
$
|
4
|
|
$
|
2
|
|
$
|
8
|
|
$
|
2
|
|
Interest
cost
|
|
|
97
|
|
|
50
|
|
|
194
|
|
|
50
|
|
Recognized
actuarial loss
|
|
|
(23
|
)
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
Net
periodic benefit cost
|
|
$
|
78
|
|
$
|
52
|
|
$
|
156
|
|
$
|
52
|
|
The
Company expects to contribute approximately $2.2 million during fiscal
2006, of
which $0.1 million and $0.2 million was made in the thirteen weeks and
twenty-six weeks ended July 1, 2006, respectively, to the defined benefit
pension plans and the retiree health benefit plan.
9.
Contingencies
The
Company is party to various legal proceedings involving routine claims
which are
incidental to the business. Although the legal and financial liability
with
respect to such proceedings cannot be estimated with certainty, the Company
believes that any ultimate liability would not be material to the Company’s
financial condition or results of operations.
10.
Operating Segments
In
connection with the Kerr Acquisition, Berry reorganized its operations
into two
reportable segments: open top and closed top. The realignment occurred
in an
effort to integrate the operations of Kerr, better service the Company’s
customers, and provide a more
efficient
organization. Prior periods have been restated to be aligned with the new
reporting structure in order to provide comparable results. The Company
evaluates performance and allocates resources to segments based on operating
income before depreciation and amortization of intangibles adjusted to
exclude
(1) uncompleted acquisition expense, (2) acquisition integration
expense, (3) plant shutdown expense, and (4) non-cash compensation
(collectively, “Adjusted EBITDA”). The accounting policies of the reportable
segments are the same as those described in the summary of significant
accounting policies.
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks Ended
|
|
Twenty-six
Weeks Ended
|
|
|
|
July 1,
2006
|
|
July 2,
2005
|
|
July 1,
2006
|
|
July 2,
2005
|
|
Net
sales:
|
|
|
|
|
|
|
|
|
|
Open
Top
|
|
$
|
222,835
|
|
$
|
204,470
|
|
$
|
429,066
|
|
$
|
388,378
|
|
Closed
Top
|
|
|
152,279
|
|
|
78,401
|
|
|
302,012
|
|
|
119,803
|
|
Total
net sales
|
|
|
375,114
|
|
|
282,871
|
|
|
731,078
|
|
|
508,181
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open
Top
|
|
|
40,951
|
|
|
34,156
|
|
|
79,999
|
|
|
64,986
|
|
Closed
Top
|
|
|
29,446
|
|
|
13,769
|
|
|
56,617
|
|
|
21,020
|
|
Total
Adjusted EBITDA
|
|
|
70,397
|
|
|
47,925
|
|
|
136,616
|
|
|
86,006
|
|
Total
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open
Top
|
|
|
885,252
|
|
|
800,096
|
|
|
885,252
|
|
|
800,096
|
|
Closed
Top
|
|
|
788,034
|
|
|
753,545
|
|
|
788,034
|
|
|
753,545
|
|
Total
assets
|
|
|
1,673,286
|
|
|
1,553,641
|
|
|
1,673,286
|
|
|
1,553,641
|
|
Reconciliation
of Adjusted EBITDA to net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA for reportable segments
|
|
$
|
70,397
|
|
$
|
47,925
|
|
$
|
136,616
|
|
$
|
86,006
|
|
Net
interest expense
|
|
|
(22,503
|
)
|
|
(23,350
|
)
|
|
(44,511
|
)
|
|
(37,168
|
)
|
Depreciation
|
|
|
(22,222
|
)
|
|
(16,395
|
)
|
|
(43,307
|
)
|
|
(30,391
|
)
|
Amortization
|
|
|
(5,325
|
)
|
|
(1,985
|
)
|
|
(10,689
|
)
|
|
(3,758
|
)
|
Income
taxes
|
|
|
(7,412
|
)
|
|
(2,415
|
)
|
|
(14,731
|
)
|
|
(6,174
|
)
|
Unrealized
gain (loss) on investment in Southern Packaging
|
|
|
515
|
|
|
(937
|
)
|
|
299
|
|
|
(1,569
|
)
|
Acquisition
integration expense
|
|
|
(2,730
|
)
|
|
(1,092
|
)
|
|
(3,789
|
)
|
|
(1,396
|
)
|
Non-cash
compensation
|
|
|
(988
|
)
|
|
—
|
|
|
(1,976
|
)
|
|
—
|
|
Net
income
|
|
$
|
9,732
|
|
$
|
1,751
|
|
$
|
17,912
|
|
$
|
5,550
|
|
11.
Condensed Consolidating Financial Information
Holding
conducts its business through its wholly owned subsidiary, Berry. Holding
and
all of Berry’s domestic subsidiaries fully, jointly, severally, and
unconditionally guarantee on a senior subordinated basis the $335.0 million
aggregate principal amount of 10
3
/
4
%
Berry
Plastics Corporation’s Senior Subordinated Notes due 2012. Each of Berry’s
subsidiaries is 100% owned, directly or indirectly, by Berry. Separate
narrative
information or financial statements of
guarantor
subsidiaries have not been included as management believes they would not
be
material to investors. Presented below is condensed consolidating financial
information for Holding, Berry, and its subsidiaries at July 1, 2006 and
December 31, 2005 and for the thirteen and twenty-six week periods ended
July 1, 2006 and July 2, 2005. The equity method has been used with
respect to investments in subsidiaries.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 1,
2006
|
|
|
|
BPC Holding
Corporation
(Parent)
|
|
Berry Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Balance
Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
$
|
—
|
|
$
|
134,178
|
|
$
|
244,146
|
|
$
|
25,073
|
|
$
|
—
|
|
$
|
403,397
|
|
Net
property and equipment
|
|
|
—
|
|
|
92,996
|
|
|
322,238
|
|
|
21,236
|
|
|
—
|
|
|
436,470
|
|
Other
noncurrent assets
|
|
|
227,669
|
|
|
1,308,083
|
|
|
693,392
|
|
|
13,669
|
|
|
(1,409,394
|
)
|
|
833,419
|
|
Total
assets
|
|
$
|
227,669
|
|
$
|
1,535,257
|
|
$
|
1,259,776
|
|
$
|
59,978
|
|
$
|
(1,409,394
|
)
|
$
|
1,673,286
|
|
Current
liabilities
|
|
$
|
—
|
|
$
|
97,241
|
|
$
|
96,614
|
|
$
|
9,724
|
|
$
|
—
|
|
$
|
203,579
|
|
Noncurrent
liabilities
|
|
|
—
|
|
|
1,210,347
|
|
|
1,349,490
|
|
|
46,806
|
|
|
(1,364,605
|
)
|
|
1,242,038
|
|
Equity
(deficit)
|
|
|
227,669
|
|
|
227,669
|
|
|
(186,328
|
)
|
|
3,448
|
|
|
(44,789
|
)
|
|
227,669
|
|
Total
liabilities and equity (deficit)
|
|
$
|
227,669
|
|
$
|
1,535,257
|
|
$
|
1,259,776
|
|
$
|
59,978
|
|
$
|
(1,409,394
|
)
|
$
|
1,673,286
|
|
|
|
|
|
|
|
December 31,
2005
|
|
|
|
BPC
Holding
Corporation
(Parent)
|
|
Berry
Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
$
|
—
|
|
$
|
132,192
|
|
$
|
224,471
|
|
$
|
22,826
|
|
$
|
—
|
|
$
|
379,489
|
|
Net
property and equipment
|
|
|
—
|
|
|
91,831
|
|
|
311,649
|
|
|
19,964
|
|
|
—
|
|
|
423,444
|
|
Other
noncurrent assets
|
|
|
203,388
|
|
|
1,292,315
|
|
|
703,500
|
|
|
13,214
|
|
|
(1,367,520
|
)
|
|
844,897
|
|
Total
assets
|
|
$
|
203,388
|
|
$
|
1,516,338
|
|
$
|
1,239,620
|
|
$
|
56,004
|
|
$
|
(1,367,520
|
)
|
$
|
1,647,830
|
|
Current
liabilities
|
|
$
|
—
|
|
$
|
81,349
|
|
$
|
87,269
|
|
$
|
9,090
|
|
$
|
—
|
|
$
|
177,708
|
|
Noncurrent
liabilities
|
|
|
—
|
|
|
1,231,601
|
|
|
1,333,925
|
|
|
40,783
|
|
|
(1,339,575
|
)
|
|
1,266,734
|
|
Equity
(deficit)
|
|
|
203,388
|
|
|
203,388
|
|
|
(181,574
|
)
|
|
6,131
|
|
|
(27,945
|
)
|
|
203,388
|
|
Total
liabilities and equity (deficit)
|
|
$
|
203,388
|
|
$
|
1,516,338
|
|
$
|
1,239,620
|
|
$
|
56,004
|
|
$
|
(1,367,520
|
)
|
$
|
1,647,830
|
|
|
|
Thirteen
Weeks Ended July 1, 2006
|
|
|
|
BPC Holding
Corporation
(Parent)
|
|
Berry Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
—
|
|
$
|
86,928
|
|
$
|
279,706
|
|
$
|
8,480
|
|
$
|
—
|
|
$
|
375,114
|
|
Cost
of goods sold
|
|
|
—
|
|
|
64,320
|
|
|
226,213
|
|
|
8,787
|
|
|
—
|
|
|
299,320
|
|
Gross
profit
|
|
|
—
|
|
|
22,608
|
|
|
53,493
|
|
|
(307
|
)
|
|
—
|
|
|
75,794
|
|
Operating
expenses
|
|
|
988
|
|
|
10,387
|
|
|
24,339
|
|
|
948
|
|
|
—
|
|
|
36,662
|
|
Operating
income (loss)
|
|
|
(988
|
)
|
|
12,221
|
|
|
29,154
|
|
|
(1,255
|
)
|
|
—
|
|
|
39,132
|
|
Other
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(515
|
)
|
|
—
|
|
|
(515
|
)
|
Interest
expense (income), net
|
|
|
(159
|
)
|
|
(10,214
|
)
|
|
31,983
|
|
|
893
|
|
|
—
|
|
|
22,503
|
|
Income
taxes
|
|
|
14
|
|
|
7,206
|
|
|
66
|
|
|
126
|
|
|
—
|
|
|
7,412
|
|
Equity
in net (income) loss from subsidiary
|
|
|
(10,575
|
)
|
|
4,654
|
|
|
1,759
|
|
|
—
|
|
|
4,162
|
|
|
—
|
|
Net
income (loss)
|
|
$
|
9,732
|
|
$
|
10,575
|
|
$
|
(4,654
|
)
|
$
|
(1,759
|
)
|
$
|
(4,162
|
)
|
$
|
9,732
|
|
|
|
Thirteen
Weeks Ended July 2, 2005
|
|
|
|
BPC
Holding
Corporation
(Parent)
|
|
Berry
Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
—
|
|
$
|
79,937
|
|
$
|
195,520
|
|
$
|
7,414
|
|
$
|
—
|
|
$
|
282,871
|
|
Cost
of goods sold
|
|
|
—
|
|
|
59,815
|
|
|
166,359
|
|
|
7,303
|
|
|
—
|
|
|
233,477
|
|
Gross
profit
|
|
|
—
|
|
|
20,122
|
|
|
29,161
|
|
|
111
|
|
|
—
|
|
|
49,394
|
|
Operating
expenses
|
|
|
—
|
|
|
7,773
|
|
|
12,230
|
|
|
938
|
|
|
—
|
|
|
20,941
|
|
Operating
income (loss)
|
|
|
—
|
|
|
12,349
|
|
|
16,931
|
|
|
(827
|
)
|
|
—
|
|
|
28,453
|
|
Other
expenses
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
937
|
|
|
—
|
|
|
937
|
|
Interest
expense (income), net
|
|
|
(197
|
)
|
|
1,517
|
|
|
21,723
|
|
|
307
|
|
|
—
|
|
|
23,350
|
|
Income
taxes
|
|
|
14
|
|
|
2,278
|
|
|
50
|
|
|
73
|
|
|
—
|
|
|
2,415
|
|
Equity
in net (income) loss from subsidiary
|
|
|
(1,568
|
)
|
|
6,986
|
|
|
2,144
|
|
|
—
|
|
|
(7,562
|
)
|
|
—
|
|
Net
income (loss)
|
|
$
|
1,751
|
|
$
|
1,568
|
|
$
|
(6,986
|
)
|
$
|
(2,144
|
)
|
$
|
7,562
|
|
$
|
1,751
|
|
|
|
Twenty-six
Weeks Ended July 1, 2006
|
|
|
|
BPC Holding
Corporation
(Parent)
|
|
Berry Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
—
|
|
$
|
157,488
|
|
$
|
557,036
|
|
$
|
16,554
|
|
$
|
—
|
|
$
|
731,078
|
|
Cost
of goods sold
|
|
|
—
|
|
|
115,458
|
|
|
451,175
|
|
|
17,308
|
|
|
—
|
|
|
583,941
|
|
Gross
profit
|
|
|
—
|
|
|
42,030
|
|
|
105,861
|
|
|
(754
|
)
|
|
—
|
|
|
147,137
|
|
Operating
expenses
|
|
|
1,976
|
|
|
19,258
|
|
|
46,755
|
|
|
2,293
|
|
|
—
|
|
|
70,282
|
|
Operating
income (loss)
|
|
|
(1,976
|
)
|
|
22,772
|
|
|
59,106
|
|
|
(3,047
|
)
|
|
—
|
|
|
76,855
|
|
Other
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(299
|
)
|
|
—
|
|
|
(299
|
)
|
Interest
expense (income), net
|
|
|
(349
|
)
|
|
(20,268
|
)
|
|
63,576
|
|
|
1,552
|
|
|
—
|
|
|
44,511
|
|
Income
taxes
|
|
|
21
|
|
|
14,276
|
|
|
293
|
|
|
141
|
|
|
—
|
|
|
14,731
|
|
Equity
in net (income) loss from subsidiary
|
|
|
(19,560
|
)
|
|
9,204
|
|
|
4,441
|
|
|
—
|
|
|
5,915
|
|
|
—
|
|
Net
income (loss)
|
|
$
|
17,912
|
|
$
|
19,560
|
|
$
|
(9,204
|
)
|
$
|
(4,441
|
)
|
$
|
(5,915
|
)
|
$
|
17,912
|
|
Consolidating
Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
17,912
|
|
$
|
19,560
|
|
$
|
(9,204
|
)
|
$
|
(4,441
|
)
|
$
|
(5,915
|
)
|
$
|
17,912
|
|
Non-cash
expenses
|
|
|
1,976
|
|
|
22,642
|
|
|
43,496
|
|
|
2,346
|
|
|
—
|
|
|
70,460
|
|
Equity
in net (income) loss from subsidiary
|
|
|
(19,560
|
)
|
|
9,204
|
|
|
4,441
|
|
|
—
|
|
|
5,915
|
|
|
—
|
|
Changes
in working capital
|
|
|
(350
|
)
|
|
8,203
|
|
|
(9,806
|
)
|
|
723
|
|
|
—
|
|
|
(1,230
|
)
|
Net
cash provided by (used for operating activities
|
|
|
(22
|
)
|
|
59,609
|
|
|
28,927
|
|
|
(1,372
|
)
|
|
—
|
|
|
87,142
|
|
Net
cash used for investing activities
|
|
|
—
|
|
|
(5,115
|
)
|
|
(44,234
|
)
|
|
(2,845
|
)
|
|
—
|
|
|
(52,194
|
)
|
Net
cash provided by (used for) financing activities
|
|
|
22
|
|
|
(45,048
|
)
|
|
15,288
|
|
|
5,166
|
|
|
—
|
|
|
(24,572
|
)
|
Effect
of exchange rate changes on cash
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
119
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
—
|
|
|
9,446
|
|
|
(19
|
)
|
|
1,068
|
|
|
—
|
|
|
10,495
|
|
Cash
and cash equivalents at beginning of period
|
|
|
—
|
|
|
22,814
|
|
|
313
|
|
|
1,629
|
|
|
—
|
|
|
24,756
|
|
Cash
and cash equivalents at end of period
|
|
$
|
—
|
|
$
|
32,260
|
|
$
|
294
|
|
$
|
2,697
|
|
$
|
—
|
|
$
|
35,251
|
|
|
|
Twenty-six
Weeks Ended July 2, 2005
|
|
|
|
BPC Holding
Corporation
(Parent)
|
|
Berry Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
—
|
|
$
|
140,959
|
|
$
|
353,523
|
|
$
|
13,699
|
|
$
|
—
|
|
$
|
508,181
|
|
Cost
of goods sold
|
|
|
—
|
|
|
104,532
|
|
|
299,193
|
|
|
13,768
|
|
|
—
|
|
|
417,493
|
|
Gross
profit
|
|
|
—
|
|
|
36,427
|
|
|
54,330
|
|
|
(69
|
)
|
|
—
|
|
|
90,688
|
|
Operating
expenses
|
|
|
—
|
|
|
15,113
|
|
|
23,392
|
|
|
1,722
|
|
|
—
|
|
|
40,227
|
|
Operating
income (loss)
|
|
|
—
|
|
|
21,314
|
|
|
30,938
|
|
|
(1,791
|
)
|
|
—
|
|
|
50,461
|
|
Other
expenses
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,569
|
|
|
—
|
|
|
1,569
|
|
Interest
expense (income), net
|
|
|
(397
|
)
|
|
(3,157
|
)
|
|
40,229
|
|
|
493
|
|
|
—
|
|
|
37,168
|
|
Income
taxes
|
|
|
21
|
|
|
6,001
|
|
|
56
|
|
|
96
|
|
|
—
|
|
|
6,174
|
|
Equity
in net (income) loss from subsidiary
|
|
|
(5,174
|
)
|
|
13,296
|
|
|
3,949
|
|
|
—
|
|
|
(12,071
|
)
|
|
—
|
|
Net
income (loss)
|
|
$
|
5,550
|
|
$
|
5,174
|
|
$
|
(13,296
|
)
|
$
|
(3,949
|
)
|
$
|
12,071
|
|
$
|
5,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidating
Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
5,550
|
|
$
|
5,174
|
|
$
|
(13,296
|
)
|
$
|
(3,949
|
)
|
$
|
12,071
|
|
$
|
5,550
|
|
Non-cash
expenses
|
|
|
—
|
|
|
21,375
|
|
|
24,487
|
|
|
3,524
|
|
|
—
|
|
|
49,386
|
|
Equity
in net (income) loss from subsidiary
|
|
|
(5,174
|
)
|
|
13,296
|
|
|
3,949
|
|
|
—
|
|
|
(12,071
|
)
|
|
—
|
|
Changes
in working capital
|
|
|
(396
|
)
|
|
(19,736
|
)
|
|
20,315
|
|
|
(3,734
|
)
|
|
—
|
|
|
(3,551
|
)
|
Net
cash provided by (used for) operating activities
|
|
|
(20
|
)
|
|
20,109
|
|
|
35,455
|
|
|
(4,159
|
)
|
|
—
|
|
|
51,385
|
|
Net
cash used for investing activities
|
|
|
—
|
|
|
(473,294
|
)
|
|
(11,678
|
)
|
|
(13,727
|
)
|
|
—
|
|
|
(498,699
|
)
|
Net
cash provided by (used for) financing activities
|
|
|
20
|
|
|
453,149
|
|
|
(18,821
|
)
|
|
18,343
|
|
|
—
|
|
|
452,691
|
|
Effect
of exchange rate changes on cash
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
—
|
|
|
(36
|
)
|
|
4,956
|
|
|
469
|
|
|
—
|
|
|
5,389
|
|
Cash
and cash equivalents at beginning of period
|
|
|
—
|
|
|
85
|
|
|
42
|
|
|
137
|
|
|
—
|
|
|
264
|
|
Cash
and cash equivalents at end of period
|
|
$
|
—
|
|
$
|
49
|
|
$
|
4,998
|
|
$
|
606
|
|
$
|
—
|
|
$
|
5,653
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Stockholders and Board of Directors
BPC
Holding Corporation
We
have
audited the accompanying consolidated balance sheets of BPC Holding Corporation
as of December 31, 2005 and January 1, 2005, and the related
consolidated statements of income, stockholders’ equity, and cash flows for each
of the years ended December 31, 2005, January 1, 2005 and
December 27, 2003. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform the audit to obtain reasonable assurance about whether the
financial
statements are free of material misstatement. We were not engaged to perform
an
audit of the Company’s internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as
a basis
for designing audit procedures that are appropriate in the circumstances,
but
not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and
evaluating the overall financial statement presentation. We believe that
our
audits provide a reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in
all
material respects, the consolidated financial position of BPC Holding
Corporation at December 31, 2005 and January 1, 2005, and the
consolidated results of its operations and its cash flows for each of the
years
ended December 31, 2005, January 1, 2005 and December 27,
2003, in conformity with U.S. generally accepted accounting principles.
/s/
ERNST & YOUNG LLP
Indianapolis,
Indiana
February 17,
2006
BPC
Holding Corporation
Consolidated
Balance Sheets
(In
thousands of dollars, except per share information)
|
|
|
|
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
24,756
|
|
$
|
264
|
|
Accounts
receivable (less allowance for doubtful accounts of $5,766 at
December 31, 2005 and $3,207 at January 1, 2005)
|
|
|
140,443
|
|
|
83,162
|
|
Inventories:
|
|
|
|
|
|
|
|
Finished
goods
|
|
|
101,632
|
|
|
70,371
|
|
Raw
materials and supplies
|
|
|
50,716
|
|
|
38,663
|
|
|
|
|
152,348
|
|
|
109,034
|
|
Deferred
income taxes
|
|
|
22,905
|
|
|
—
|
|
Prepaid
expenses and other current assets
|
|
|
39,037
|
|
|
27,339
|
|
Total
current assets
|
|
|
379,489
|
|
|
219,799
|
|
|
|
|
|
|
|
|
|
Property
and equipment:
|
|
|
|
|
|
|
|
Land
|
|
|
12,292
|
|
|
10,016
|
|
Buildings
and improvements
|
|
|
92,810
|
|
|
64,758
|
|
Equipment
and construction in progress
|
|
|
497,364
|
|
|
317,784
|
|
|
|
|
602,466
|
|
|
392,558
|
|
Less
accumulated depreciation
|
|
|
179,022
|
|
|
110,586
|
|
|
|
|
423,444
|
|
|
281,972
|
|
|
|
|
|
|
|
|
|
Intangible
assets:
|
|
|
|
|
|
|
|
Deferred
financing fees, net
|
|
|
18,333
|
|
|
19,883
|
|
Customer
relationships, net
|
|
|
255,981
|
|
|
84,959
|
|
Goodwill
|
|
|
495,258
|
|
|
358,883
|
|
Trademarks,
net
|
|
|
47,065
|
|
|
33,448
|
|
Other
intangibles, net
|
|
|
28,260
|
|
|
6,106
|
|
|
|
|
844,897
|
|
|
503,279
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
—
|
|
|
94
|
|
Total
assets
|
|
$
|
1,647,830
|
|
$
|
1,005,144
|
|
Liabilities
and stockholders’ equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
64,970
|
|
$
|
55,671
|
|
Accrued
interest
|
|
|
20,165
|
|
|
18,816
|
|
Employee
compensation, payroll and other taxes
|
|
|
43,915
|
|
|
28,190
|
|
Accrued
expenses and other current liabilities
|
|
|
34,730
|
|
|
16,693
|
|
Current
portion of long-term debt
|
|
|
13,928
|
|
|
10,335
|
|
Total
current liabilities
|
|
|
177,708
|
|
|
129,705
|
|
|
|
|
|
|
|
|
|
Long-term
debt, less current portion
|
|
|
1,146,692
|
|
|
687,223
|
|
Deferred
income taxes
|
|
|
94,934
|
|
|
1,030
|
|
Other
long-term liabilities
|
|
|
25,108
|
|
|
3,295
|
|
Total
liabilities
|
|
|
1,444,442
|
|
|
821,253
|
|
|
|
|
|
|
|
Stockholders’
equity:
|
|
|
|
|
|
Preferred
stock; $;01 par value: 500,000 shares authorized; 0 shares issued
and
outstanding at December 31, 2005 and January 1,
2005
|
|
|
—
|
|
|
—
|
|
Common
stock; $.01 par value: 5,000,000 shares authorized; 3,398,807
shares
issued and 3,374,348 shares outstanding at December 31, 2005; and
3,398,807 shares issued and 3,377,923 shares outstanding at
January 1, 2005
|
|
|
34
|
|
|
34
|
|
Additional
paid-in capital
|
|
|
346,943
|
|
|
345,001
|
|
Adjustment
of the carryover basis of continuing stockholders
|
|
|
(196,603
|
)
|
|
(196,603
|
)
|
Notes
receivable—common stock
|
|
|
(14,273
|
)
|
|
(14,856
|
)
|
Treasury
stock: 24,459 shares and 20,502 shares of common stock at
December 31, 2005 and January 1, 2005,
respectively
|
|
|
(3,547
|
)
|
|
(2,049
|
)
|
Retained
earnings
|
|
|
58,969
|
|
|
39,178
|
|
Accumulated
other comprehensive income
|
|
|
11,865
|
|
|
13,186
|
|
Total
stockholders’ equity
|
|
|
203,388
|
|
|
183,891
|
|
Total
liabilities and stockholders’ equity
|
|
$
|
1,647,830
|
|
$
|
1,005,144
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Consolidated
Statements of Income
(in
thousands of dollars)
|
|
Year
Ended
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
December 27,
2003
|
|
Net
sales
|
|
$
|
1,169,704
|
|
$
|
814,213
|
|
$
|
551,876
|
|
Cost
of goods sold
|
|
|
943,370
|
|
|
639,329
|
|
|
420,750
|
|
Gross
profit
|
|
|
226,334
|
|
|
174,884
|
|
|
131,126
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
|
34,145
|
|
|
26,361
|
|
|
23,883
|
|
General
and administrative
|
|
|
49,477
|
|
|
38,518
|
|
|
25,699
|
|
Research
and development
|
|
|
6,131
|
|
|
3,825
|
|
|
3,459
|
|
Amortization
of intangibles
|
|
|
15,574
|
|
|
6,513
|
|
|
3,326
|
|
Other
expenses
|
|
|
5,218
|
|
|
5,791
|
|
|
3,569
|
|
Operating
income
|
|
|
115,789
|
|
|
93,876
|
|
|
71,190
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense (income)
|
|
|
|
|
|
|
|
|
|
|
Gain
on disposal of property and equipment
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
Unrealized
loss on investment in Southern Packaging
|
|
|
1,354
|
|
|
—
|
|
|
—
|
|
Income
before interest and taxes
|
|
|
114,435
|
|
|
93,876
|
|
|
71,197
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest:
|
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
74,445
|
|
|
54,076
|
|
|
46,251
|
|
Loss
on extinguished debt
|
|
|
7,045
|
|
|
—
|
|
|
250
|
|
Income
|
|
|
(1,171
|
)
|
|
(891
|
)
|
|
(838
|
)
|
Income
before income taxes
|
|
|
34,116
|
|
|
40,691
|
|
|
25,534
|
|
Income
taxes
|
|
|
14,325
|
|
|
17,740
|
|
|
12,486
|
|
Net
income
|
|
$
|
19,791
|
|
$
|
22,951
|
|
$
|
13,048
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Consolidated
Statements of Changes in Stockholders’ Equity
(in
thousands of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Adjustment of
the
carryover
basis
of
continuing
stockholders
|
|
Notes
receivable—
common
stock
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
|
|
Comprehensive
Income
|
|
Balance
at
December 28,
2002
|
|
$
|
28
|
|
$
|
281,816
|
|
$
|
(196,603
|
)
|
$
|
(14,399
|
)
|
$
|
—
|
|
$
|
3,179
|
|
$
|
1,142
|
|
$
|
75,163
|
|
$
|
4,321
|
|
Issuance
of
common
stock
|
|
|
6
|
|
|
62,547
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,553
|
|
|
—
|
|
Purchase
of
treasury
stock
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
999
|
|
|
(1,972
|
)
|
|
—
|
|
|
—
|
|
|
(973
|
)
|
|
—
|
|
Interest
on
notes
receivable
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(757
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(757
|
)
|
|
—
|
|
Translation
gain
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,645
|
|
|
3,645
|
|
|
3,645
|
|
Other
comprehensive
losses
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
(88
|
)
|
|
(88
|
)
|
Net
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,048
|
|
|
—
|
|
|
13,048
|
|
|
13,048
|
|
Balance
at
December 27,
2003
|
|
|
34
|
|
|
344,363
|
|
|
(196,603
|
)
|
|
(14,157
|
)
|
|
(1,972
|
)
|
|
16,227
|
|
|
4,699
|
|
|
152,591
|
|
|
16,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of
common
stock
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
—
|
|
Collection
on
notes
receivable
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
Purchase
of
treasury
stock
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(192
|
)
|
|
—
|
|
|
—
|
|
|
(192
|
)
|
|
—
|
|
Sale
of
treasury
stock
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
—
|
|
Interest
on
notes
receivable
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(772
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(772
|
)
|
|
—
|
|
Stock-based
compensation
|
|
|
—
|
|
|
585
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
585
|
|
|
|
|
Translation
gain
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,743
|
|
|
2,743
|
|
|
2,743
|
|
Other
comprehensive
gains
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,744
|
|
|
5,744
|
|
|
5,744
|
|
Net
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,951
|
|
|
—
|
|
|
22,951
|
|
|
22,951
|
|
Balance
at
January 1,
2005
|
|
|
34
|
|
|
345,001
|
|
|
(196,603
|
)
|
|
(14,856
|
)
|
|
(2,049
|
)
|
|
39,178
|
|
|
13,186
|
|
|
183,891
|
|
|
31,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collection
on
notes
receivable
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,361
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,361
|
|
|
—
|
|
Purchase
of
treasury
stock
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(5,498
|
)
|
|
—
|
|
|
—
|
|
|
(5,513
|
)
|
|
—
|
|
Sale
of
treasury
stock
|
|
|
—
|
|
|
(195
|
)
|
|
—
|
|
|
—
|
|
|
4,000
|
|
|
—
|
|
|
—
|
|
|
3,805
|
|
|
—
|
|
Interest
on
notes
receivable
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(778
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(778
|
)
|
|
—
|
|
Stock-based
compensation
|
|
|
—
|
|
|
2,152
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,152
|
|
|
—
|
|
Translation
losses
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,225
|
)
|
|
(3,225
|
)
|
|
(3,225
|
)
|
Other
comprehensive
gains
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,904
|
|
|
1,904
|
|
|
1,904
|
|
Net
income
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,791
|
|
|
—
|
|
|
19,791
|
|
|
19,791
|
|
Balance
at
December 31,
2005
|
|
$
|
34
|
|
$
|
346,943
|
|
$
|
(196,603
|
)
|
$
|
(14,273
|
)
|
$
|
(3,547
|
)
|
$
|
58,969
|
|
$
|
11,865
|
|
$
|
203,388
|
|
$
|
18,470
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Consolidated
Statements of Cash Flows
(in
thousands of dollars)
|
|
Year
Ended
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
December 27,
2003
|
|
Operating
activities
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
19,791
|
|
$
|
22,951
|
|
$
|
13,048
|
|
Adjustments
to reconcile net income to net cash
provided
by operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
73,146
|
|
|
54,303
|
|
|
40,752
|
|
Non-cash
interest expense
|
|
|
1,945
|
|
|
1,862
|
|
|
2,318
|
|
Write
off of deferred financing fees
|
|
|
7,045
|
|
|
—
|
|
|
—
|
|
Amortization
of intangibles
|
|
|
15,574
|
|
|
6,513
|
|
|
3,326
|
|
Non-cash
compensation
|
|
|
2,152
|
|
|
585
|
|
|
—
|
|
Unrealized
loss on investment in Southern Packaging
|
|
|
1,354
|
|
|
—
|
|
|
—
|
|
Gain
on sale of property and equipment
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
Deferred
income taxes
|
|
|
12,769
|
|
|
16,772
|
|
|
11,791
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable, net
|
|
|
(13,004
|
)
|
|
(7,216
|
)
|
|
(598
|
)
|
Inventories
|
|
|
(8,720
|
)
|
|
(27,200
|
)
|
|
5,600
|
|
Prepaid
expenses and other assets
|
|
|
309
|
|
|
(7,022
|
)
|
|
(2.550
|
)
|
Accrued
interest
|
|
|
1,349
|
|
|
683
|
|
|
3,894
|
|
Payables
and accrued expenses
|
|
|
(12,164
|
)
|
|
13,002
|
|
|
2,199
|
|
Net
cash provided by operating activities
|
|
|
101,546
|
|
|
75,233
|
|
|
79,773
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
|
Additions
to property and equipment
|
|
|
(57,829
|
)
|
|
(52,624
|
)
|
|
(29,949
|
)
|
Proceeds
from disposal of property and equipment
|
|
|
2,223
|
|
|
2,986
|
|
|
7
|
|
Proceeds
from working capital settlement on business acquisition
|
|
|
—
|
|
|
7,397
|
|
|
—
|
|
Investment
in Southern Packaging
|
|
|
—
|
|
|
(3,236
|
)
|
|
—
|
|
Acquisitions
of businesses
|
|
|
(464,392
|
)
|
|
—
|
|
|
(235,710
|
)
|
Net
cash used for investing activities
|
|
|
(519,998
|
)
|
|
(45,477
|
)
|
|
(265,652
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from long-term borrowings
|
|
|
465,052
|
|
|
880
|
|
|
149,944
|
|
Payments
on long-term borrowings
|
|
|
(12,882
|
)
|
|
(55,996
|
)
|
|
(10,111
|
)
|
Issuance
of common stock
|
|
|
—
|
|
|
53
|
|
|
62,553
|
|
Purchase
of treasury stock
|
|
|
(5,513
|
)
|
|
(192
|
)
|
|
(973
|
)
|
Proceeds
from notes receivable
|
|
|
1,361
|
|
|
73
|
|
|
—
|
|
Sale
of treasury stock
|
|
|
3,805
|
|
|
115
|
|
|
—
|
|
Debt
financing costs
|
|
|
(8,637
|
)
|
|
(641
|
)
|
|
(4,592
|
)
|
Net
cash provided by (used for) financing activities
|
|
|
443,186
|
|
|
(55,708
|
)
|
|
196,821
|
|
Effect
of exchange rate changes on cash
|
|
|
(242
|
)
|
|
24
|
|
|
(363
|
)
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
24,492
|
|
|
(25,928
|
)
|
|
10,579
|
|
Cash
and cash equivalents at beginning of year
|
|
|
264
|
|
|
26,192
|
|
|
15,613
|
|
Cash
and cash equivalents at end of year
|
|
$
|
24,756
|
|
$
|
264
|
|
$
|
26,192
|
|
See
notes
to consolidated financial statements.
BPC
Holding Corporation
Notes
to Consolidated Financial Statements
(In
thousands of dollars, except as otherwise noted)
Note
1. Organization
BPC
Holding Corporation (“Holding”), through its subsidiary Berry Plastics
Corporation (“Berry” or the “Company”) and its subsidiaries, manufactures and
markets plastic packaging products through its facilities located in Evansville,
Indiana; Henderson, Nevada; Iowa Falls, Iowa; Charlotte, North Carolina;
Suffolk, Virginia; Lawrence, Kansas; Monroeville, Ohio; Norwich, England;
Woodstock, Illinois; Streetsboro, Ohio; Baltimore, Maryland; Milan, Italy;
Chicago, Illinois; Richmond, Indiana; Syracuse, New York; Phoenix, Arizona;
Ahoskie, North Carolina; Bowling Green, Kentucky; Sarasota, Florida; Jackson,
Tennessee; Anaheim, California; Cranbury, New Jersey; Easthampton,
Massachusetts; Oxnard, California; and Toluca, Mexico.
Holding’s
fiscal year is a 52/53 week period ending generally on the Saturday closest
to
December 31. All references herein to “2005”, “2004,” and “2003,” relate to
the fiscal years ended December 31, 2005, January 1, 2005, and
December 27, 2003, respectively.
Note
2. Summary of Significant Accounting Policies
Consolidation
and Business
The
consolidated financial statements include the accounts of Holding and its
subsidiaries, all of which are wholly owned. Intercompany accounts and
transactions have been eliminated in consolidation. Holding, through its
wholly
owned subsidiaries, operates in two primary segments: open top and closed
top.
The Company’s customers are located principally throughout the United States,
without significant concentration in any one region or with any one customer.
The Company performs periodic credit evaluations of its customers’ financial
condition and generally does not require collateral.
Purchases
of various densities of plastic resin used in the manufacture of the Company’s
products aggregated approximately $385.0 million and $283.0 million in
2005 and
2004, respectively. Dow Chemical Corporation was the largest supplier of
the
Company’s total resin material requirements, representing approximately 29% and
32% of such resin requirements in 2005 and 2004, respectively. The Company
also
uses other suppliers such as Basell, Nova, Total, Lyondell, Chevron, Exxon,
Mobil, Sunoco, and Huntsman to meet its resin requirements.
Cash
and Cash Equivalents
All
highly liquid investments with maturity of three months or less at the
date of
purchase are considered to be cash equivalents.
Accounts
Receivable
The
allowance for doubtful accounts is analyzed in detail on a quarterly basis
and
all significant customers with delinquent balances are reviewed to determine
future collectibility. The determinations are based on legal issues (such
as
bankruptcy status), past history, current financial and credit agency reports,
and the experience of the credit representatives. Reserves are established
in
the quarter in which the Company makes the determination that the account
is
deemed uncollectible. The Company maintains additional reserves based on
its
historical bad debt experience. Additionally, the allowance for doubtful
accounts includes a reserve for cash discounts that are offered to some
customers for prompt payment. The following table summarizes the activity
by
period for the allowance for doubtful accounts, excluding the activity
related
to cash discounts due to its volume.
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
December 27, 2003
|
|
Balance
at beginning of period
|
|
$
|
3,207
|
|
$
|
2,717
|
|
$
|
1,990
|
|
Charged
to costs and expenses
|
|
|
592
|
|
|
323
|
|
|
150
|
|
Charged
to other accounts
(1)
|
|
|
1,851
|
|
|
—
|
|
|
545
|
|
Deductions
and currency translation
(2)
|
|
|
116
|
|
|
167
|
|
|
32
|
|
Balance
at end of period
|
|
$
|
5,766
|
|
$
|
3,207
|
|
$
|
2,717
|
|
(1)
Primarily
relates to purchase of accounts receivable and related allowance through
acquisitions.
(2)
Uncollectible
accounts written off, net of recoveries, and currency translation on foreign
operations.
Inventories
Inventories
are valued at the lower of cost (first in, first out method) or market.
Property
and Equipment
Property
and equipment are stated at cost. Depreciation is computed primarily by
the
straight-line method over the estimated useful lives of the assets ranging
from
15 to 25 years for buildings and improvements and two to 10 years for machinery,
equipment, and tooling. Leasehold improvements are depreciated over the
shorter
of the useful life of the improvement and the lease life. Repairs and
maintenance costs are charged to expense as incurred.
Intangible
Assets
Deferred
financing fees are being amortized using the straight-line method over
the lives
of the respective debt agreements.
Customer
relationships are being amortized using the straight-line method over the
estimated life of the relationships ranging from three to 20 years.
The
goodwill acquired represents the excess purchase price over the fair value
of
the net assets acquired in the Merger (see Note 3 below) and businesses
acquired
since the Merger. These costs are reviewed annually for impairment pursuant
to
Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other
Intangible Assets.
Trademarks
that are expected to remain in use, which are indefinite lived intangible
assets, are reviewed for impairment annually pursuant to SFAS No. 142,
and those
trademarks that are expected to be phased out are being amortized using
the
straight-line method over the estimated life of five years.
Other
intangibles, which include covenants not to compete and technology-based
intangibles, are being amortized using the straight-line method over the
respective lives of the agreements or estimated life of the technology
ranging
from one to twenty years.
Long-lived
Assets
Long-lived
assets are reviewed for impairment in accordance with SFAS No. 144 whenever
facts and circumstances indicate that the carrying amount may not be
recoverable. Specifically, this process involves comparing an asset’s carrying
value to the estimated undiscounted future cash flows the asset is expected
to
generate over its remaining life. If this process were to result in the
conclusion that the carrying value of a long-lived asset would not be
recoverable, a write-down of the asset to fair value would be recorded
through a
charge to operations. Fair value is determined based upon discounted cash
flows
or appraisals as appropriate. Long-lived assets that are held for sale
are
reported at the lower of the assets’ carrying amount or fair value less costs
related to the assets’ disposition. No impairments were recorded in these
financial statements.
Derivative
Financial Instruments
The
Company uses interest rate hedge instruments to manage a portion of its
interest
rate exposures. In 2004, the Company also entered into resin forward contracts,
which became effective in 2005, to manage certain resin price exposures.
These
instruments are entered into to manage market risk exposures and are not
used
for trading purposes.
Derivatives
used for hedging purposes must be designated as, and effective as, a hedge
of
the identified risk exposure at the designation of the contract. Accordingly,
changes in the market value of the derivative contract must be highly correlated
with changes in the market value of the underlying hedged item at inception
of
the hedge and over the life of the hedge contract. Any derivative instrument
terminated, designated but no longer effective as a hedge, or initially
not
effective as a hedge would be recorded at market value and the related
gains and
losses would be recognized in earnings. Derivatives not designated as hedges
are
adjusted to fair value through the consolidated statement of income. Management
routinely reviews the effectiveness of the use of derivative instruments.
Gains
and
losses from hedges of anticipated transactions are classified in the statement
of income consistent with the accounting treatment of the items being hedged.
The Company has recognized the interest rate hedge instruments and resin
forward
contracts at fair value in the consolidated balance sheets.
Foreign
Currency Translation
Assets
and liabilities of most foreign subsidiaries are translated at exchange
rates in
effect at the balance sheet date, and the statements of income are translated
at
the average monthly exchange rates for the period. Translation gains and
losses
are recorded as a component of accumulated other comprehensive income in
stockholders’ equity. Foreign currency transaction gains and losses are included
in net income.
Revenue
Recognition
The
Company recognizes revenue in accordance with SEC Staff Accounting Bulletin
No.
101, “Revenue Recognition in Financial Statements” (“SAB 101”) and SEC Staff
Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”). Revenue is
recognized when the title
and
risk
of loss have passed to the customer, there is persuasive evidence of an
arrangement, delivery has occurred or services have been rendered, the
sales
price is fixed or determinable, and collectibility is reasonably assured.
Stock-Based
Compensation
SFAS
No.
123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148,
“Accounting for Stock-Based Compensation—Transition and Disclosure,” established
accounting and disclosure requirements using a fair-value-based method
of
accounting for stock-based employee compensation plans. As provided for
under
SFAS 123, the Company accounts for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion 25, “Accounting
for Stock Issued to Employees.” Compensation cost for stock options, if any, is
measured as the excess of the fair value of the Company’s stock at the date of
grant over the amount an employee must pay to acquire the stock. The fair
value
for options granted by Holding have been estimated at the date of grant
using a
Black Scholes option pricing model with the following weighted average
assumptions:
|
|
Year
Ended
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
December 27, 2003
|
|
Risk-free
interest rate
|
|
|
4.5
|
%
|
|
3.1
|
%
|
|
3.0
|
%
|
Dividend
yield
|
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
Volatility
factor
|
|
|
.25
|
|
|
.25
|
|
|
.25
|
|
Expected
option life
|
|
|
5.0
years
|
|
|
5.0
years
|
|
|
5.0
years
|
|
For
purposes of the pro forma disclosures, the estimated fair value of the
stock
options are amortized to expense over the related vesting period. Because
compensation expense is recognized over the vesting period, the initial
impact
on pro forma net income may not be representative of compensation expense
in
future years, when the effect of amortization of multiple awards would
be
reflected in the Consolidated Statement of Income. The following is a
reconciliation of reported net income to net income as if the Company used
the
fair value method of accounting for stock-based compensation.
|
|
Year
Ended
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
December 27, 2003
|
|
Reported
net income
|
|
$
|
19,791
|
|
$
|
22,951
|
|
$
|
13,048
|
|
Stock-based
employee compensation expense included in reported income, net
of
tax
|
|
|
1,291
|
|
|
351
|
|
|
—
|
|
Total
stock-based employee compensation expense determined under fair
value
based method, for all awards, net of tax
|
|
|
(2,508
|
)
|
|
(2,294
|
)
|
|
(2,044
|
)
|
Pro
forma net income
|
|
$
|
18,574
|
|
$
|
21,008
|
|
$
|
11,004
|
|
Income
Taxes
The
Company accounts for income taxes under the asset and liability approach,
which
requires the recognition of deferred tax assets and liabilities for the
expected
future tax consequence of events that have been recognized in the Company’s
financial statements or income tax returns. Income taxes are recognized
during
the year in which the underlying transactions are reflected in the Consolidated
Statements of Income. Deferred taxes are provided for temporary differences
between amounts of assets and liabilities as recorded for
financial
reporting purposes and such amounts as measured by tax laws. If the Company
determines that a deferred tax asset arising from temporary differences
is not
likely to be utilized, the Company will establish a valuation allowance
against
that asset to record it at its expected realizable value.
Comprehensive
Income
Comprehensive
income is comprised of net income and other comprehensive income. Other
comprehensive income includes unrealized gains or losses on derivative
financial
instruments, unrealized gains or losses resulting from currency translations
of
foreign investments, and adjustments to record the minimum pension liability.
Pension
Pension
benefit costs include assumptions for the discount rate, retirement age,
and
expected return on plan assets. Retiree medical plan costs include assumptions
for the discount rate, retirement age, and health-care-cost trend rates.
Periodically, the Company evaluates the discount rate and the expected
return on
plan assets in its defined benefit pension and retiree health benefit plans.
In
evaluating these assumptions, the Company considers many factors, including
an
evaluation of the discount rates, expected return on plan assets and the
health-care-cost trend rates of other companies; historical assumptions
compared
with actual results; an analysis of current market conditions and asset
allocations; and the views of advisers.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
disclosure of any contingent assets and liabilities at the financial statement
date and reported amounts of revenue and expenses during the reporting
period.
On an on-going basis, the Company reviews its estimates and assumptions.
The
Company’s estimates were based on its historical experience and various other
assumptions that the Company believes to be reasonable under the circumstances.
Actual results are likely to differ from those estimates under different
assumptions or conditions, but management does not believe such differences
will
materially affect the Company’s financial position or results of operations.
Reclassifications
Certain
amounts in the prior year financial statements and related notes have been
reclassified to conform to the current year presentation.
Impact
of Recently Issued Accounting Standards
In
November 2004, the FASB issued Statement of Financial Accounting Standards
No.
151, Inventory Costs, an amendment of ARB No. 43, Chapter 4 (“SFAS 151”). SFAS
151 requires the exclusion of certain costs from inventories and the allocation
of fixed production overheads to inventories to be based on normal capacity
of
the production facilities. The provisions of SFAS 151 are effective for
costs
incurred during fiscal years beginning after June 15, 2005. Earlier
adoption is permitted for inventory costs incurred during fiscal years
beginning
after the issuance date of SFAS 151. The Company does not expect the adoption
of
this
new
standard to have a material effect on the Company’s financial position or
results of operations.
In
December 2004, the FASB issued Statement of Financial Accounting Standards
No.
123R (Revised 2004,) Share-Based Payment (“SFAS No. 123R”), which requires that
the compensation cost relating to share-based payment transactions be recognized
in financial statements based on alternative fair value models. The share-based
compensation cost will be measured based on the fair value of the equity
or
liability instruments issued. The Company currently discloses pro forma
compensation expense quarterly and annually by calculating the stock option
grants’ fair value using the Black-Scholes model and disclosing the impact on
net income in a Note to the Consolidated Financial Statements. Upon adoption,
pro forma disclosure will no longer be an alternative. For nonpublic companies,
as defined, the effective date of SFAS No. 123R is the beginning of the
first
annual reporting period that begins after December 15, 2005, although early
adoption is allowed. The Company will adopt SFAS No. 123R in the first
quarter
of 2006. Based upon outstanding options as of December 31, 2005, after-tax
expense, as calculated using the Black-Scholes model would be approximately
$2.3
million in 2006.
In
2005,
the FASB issued FASB Interpretation No. 47, Accounting for Conditional
Asset
Retirement Obligations, an interpretation of FASB Statement No. 143, Asset
Retirement Obligations (“FIN 47”). FIN 47 provides clarification of the term
“conditional asset retirement obligation” as used in SFAS 143, defined as a
legal obligation to perform an asset retirement activity in which the timing
or
method of settlement are conditional on a future event that may or may
not be
within the control of the Company. Under this standard, a company must
record a
liability for a conditional asset retirement obligation if the fair value
of the
obligation can be reasonably estimated. FIN 47 became effective for the
Company’s year ended December 31, 2005. The adoption of FIN 47 did not have
a material effect on our financial position or results of operations.
Note
3. The Merger
On
July 22, 2002, GS Berry Acquisition Corp., (the “Buyer”) a newly formed
entity controlled by various private equity funds affiliated with Goldman,
Sachs & Co., merged (the “Merger”) with and into Holding, pursuant to
an agreement and plan of merger, dated as of May 25, 2002. At the effective
time of the Merger, (i) each share of common stock of Holding Corporation
issued and outstanding immediately prior to the effective time of the Merger
was
converted into the right to receive cash pursuant to the terms of the Merger
Agreement, and (ii) each share of common stock of the Buyer issued and
outstanding immediately prior to the effective time of the Merger was converted
into one share of common stock of Holding. Immediately following the Merger,
the
Buyer and its affiliates owned approximately 63% of the common stock of
Holding.
The remaining common stock of Holding is held by J.P. Morgan Partners Global
Investors, L.P. and other private equity funds affiliated with J.P. Morgan
Partners, LLC, the private equity investment arm of J.P. Morgan Chase &
Co., which own approximately 29% of Holding’s common stock and by members of
Berry’s management, which own the remaining 8%.
The
Merger has been accounted for under the purchase method of accounting,
and
accordingly, the purchase price was allocated to the identifiable assets
and
liabilities based on estimated fair values at the acquisition date. The
Company
applied the provisions of Emerging Issues Task Force 88-16, Basis in Leveraged
Buyout Transactions, whereby, the carryover equity interests of certain
shareholders from the Predecessor to the Company were recorded at
their
Company basis. The application of these provisions reduced stockholder’s equity
and intangibles by $196.6 million.
Note
4. Recent Acquisitions, Investment, and Disposal
On
February 25, 2003, Berry acquired the 400 series continuous threaded
injection molded closure assets from CCL Plastic Packaging located in Los
Angeles, California (“CCL Acquisition”) for aggregate consideration of
approximately $4.6 million. The purchase price was allocated to fixed assets
($2.7 million), inventory ($1.1 million), customer relationships ($0.5
million),
goodwill ($0.2 million), and other intangibles ($0.1 million). The purchase
was
financed through borrowings under the Company’s revolving line of credit. The
operations from the CCL Acquisition are included in Berry’s operations since the
acquisition date.
On
May 30, 2003, Berry acquired the injection molded overcap lid assets from
APM Inc. located in Benicia, California (“APM Acquisition”) for aggregate
consideration of approximately $0.6 million. The purchase price was allocated
to
fixed assets ($0.3 million), inventory ($0.1 million), goodwill ($0.1 million)
and other intangibles ($0.1 million). The purchase was financed through
cash
provided by operations. The operations from the APM Acquisition are included
in
Berry’s operations since the acquisition date.
On
November 20, 2003, Berry acquired Landis Plastics, Inc. (the “Landis
Acquisition”) for aggregate consideration of approximately $229.7 million,
including deferred financing fees. The operations from the Landis Acquisition
are included in Berry’s operations since the acquisition date using the purchase
method of accounting. The purchase was financed through the issuance by
Berry of
$85.0 million aggregate principal amount of 10
3
/
4
%
senior
subordinated notes to various institutional buyers, which resulted in gross
proceeds of $95.2 million, aggregate net borrowings of $54.1 million under
Berry’s amended and restated senior secured credit facility from new term loans
after giving effect to the refinancing of the prior term loan, an aggregate
common equity contribution of $62.0 million, and cash on hand. Berry also
agreed
to acquire, for $32.0 million, four facilities that Landis leased from
certain
of its affiliates. Prior to the closing of the Landis Acquisition, the
rights
and obligations to purchase the four facilities owned by affiliates of
Landis
were assigned to an affiliate of W.P. Carey & Co., L.L.C., which
affiliate subsequently entered into a lease with Landis for the four facilities.
In accordance with EITF 95-3, the Company established opening balance sheet
reserves of $3.2 million related to plant shutdown, severance and unfavorable
lease arrangement costs. The balance of these reserves at January 1, 2005
was $1.3 million and was reduced to $0.4 million at December 31, 2005 as a
result of $0.5 million of payments in fiscal 2005 and a reduction in the
estimate of $0.4 million in fiscal 2005.
On
November 1, 2004, the Company entered into a series of agreements with
Southern Packaging Group Ltd. (“Southern Packaging”), and its principal
shareholder, Mr. Pan Shun Ming, to jointly expand participation in the
plastic
packaging business in China and the surrounding region. In connection therewith,
Berry acquired a 10% stake in Southern Packaging, which has been recorded
as an
other current asset as a trading security at its fair market value of $1.8
million and $3.2 million as of December 31, 2005 and January, 1, 2005,
respectively, representing an unrealized loss of $1.4 million as of
December 31, 2005 and consistent with the cost basis at January 1,
2005.
Berry
Plastics U.K. Limited, a foreign subsidiary of Berry, sold the manufacturing
equipment, inventory, and accounts receivable of its U.K. milk cap business
to
Portola Packaging U.K. Limited. The transaction valued at approximately
$4.0
million closed in April
2004.
The
U.K. milk cap business represented less than $3.0 million of annual consolidated
net sales.
On
April 11, 2005, a subsidiary of Berry, Berry Plastics de México, S. de R.L.
de C.V., acquired all of the injection molding closure assets from Euromex,
an
injection molding manufacturer located in Toluca, Mexico, for aggregate
consideration of approximately $8.2 million. The purchase price was allocated
to
fixed assets ($4.1 million), inventory ($1.6 million), goodwill ($0.7 million),
and other intangibles ($1.8 million). The allocation of purchase price
is
preliminary and subject to change based on actual expenses and adjustments
of
estimates. The purchase was financed through borrowings under the Company’s
revolving line of credit and cash on hand. The operations from the Mexico
Acquisition are included in Berry’s operations since the acquisition date.
On
June 3, 2005, Berry acquired Kerr Group, Inc. (“Kerr”) for aggregate
consideration of approximately $455.8 million, including direct costs associated
with the acquisition. The operations from the Kerr Acquisition are included
in
our operations since the acquisition date. The purchase price was financed
through additional term loan borrowings under an amendment to our existing
senior secured credit facility and cash on hand. In accordance with EITF
95-3,
we established opening balance sheet reserves of $2.7 million related to
plant
shutdown and severance costs, of which payments totaling $0.5 million were
made
in 2005. The following table summarizes the allocation of purchase price
and the
estimated fair values of the assets acquired and liabilities assumed at
the date
of the acquisition. The allocation is preliminary and subject to change
based on
actual expenses and adjustments to estimated receivables and reserves.
|
|
June 3, 2005
|
|
Current
assets
|
|
$
|
85,088
|
|
Property
and equipment
|
|
|
145,690
|
|
Goodwill
|
|
|
134,280
|
|
Customer
relationships
|
|
|
182,094
|
|
Trademarks
|
|
|
16,140
|
|
Other
intangibles
|
|
|
22,291
|
|
Total
assets
|
|
|
585,583
|
|
Current
liabilities
|
|
|
55,802
|
|
Long-term
liabilities
|
|
|
73,942
|
|
Total
liabilities
|
|
|
129,744
|
|
Net
assets acquired
|
|
$
|
455,839
|
|
The
pro
forma financial results presented below are unaudited and assume that the
Landis
Acquisition and Kerr Acquisition occurred at the beginning of the respective
period. Pro forma results have not been adjusted to reflect the CCL Acquisition,
APM Acquisition, or Mexico Acquisition as they do not differ materially
from the
pro forma results presented below. The information presented is for
informational purposes only and is not necessarily indicative of the operating
results that would have occurred had the Kerr Acquisition been consummated
at
the beginning of the respective period, nor are they necessarily indicative
of
future operating results. Further, the information reflects only pro forma
adjustments for additional interest expense, elimination of Berry’s write off of
deferred financing fees, and elimination of Kerr’s closing expenses, net of the
applicable income tax effects.
|
|
Year
Ended
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
December 27, 2003
|
|
Pro
forma net sales
|
|
$
|
1,338,019
|
|
$
|
1,189,059
|
|
$
|
1,094,920
|
|
Pro
forma net income (loss)
|
|
|
21,468
|
|
|
16,448
|
|
|
(4,267
|
)
|
Note
5. Intangible Assets and Deferred Costs
Intangible
assets and deferred costs consist of the following:
|
|
|
|
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
Deferred
financing fees
|
|
$
|
24,402
|
|
$
|
26,681
|
|
Customer
relationships
|
|
|
275,614
|
|
|
93,641
|
|
Goodwill
|
|
|
495,258
|
|
|
358,883
|
|
Trademarks
|
|
|
49,588
|
|
|
33,448
|
|
Technology-based
|
|
|
27,206
|
|
|
5,115
|
|
Covenants
not to compete and other
|
|
|
4,613
|
|
|
2,622
|
|
Accumulated
amortization
|
|
|
(31,784
|
)
|
|
(17,111
|
)
|
|
|
$
|
844,897
|
|
$
|
503,279
|
|
The
increase in the intangible assets is primarily the result of intangible
assets
acquired in connection with the Kerr Acquisition. Also, as a result of
the
Second Amendment to the Second Amended and Restated Credit Facility, the
Company
expensed $7.0 million of unamortized deferred financing costs. The remaining
changes in intangible assets are primarily the result of the amortization
of
definite lived intangibles.
Future
amortization expense for definite lived intangibles at December 31, 2005
for the next five fiscal years is approximately $23.1 million, $23.0 million,
$22.8 million, $22.6 million, and $20.2 million for fiscal 2006, 2007,
2008,
2009, and 2010, respectively.
Note
6. Long-Term Debt
Long-term
debt consists of the following:
|
|
|
|
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
Berry
10
3
/
4
%
Senior Subordinated Notes
|
|
$
|
335,000
|
|
$
|
335,000
|
|
Debt
premium on 10
3
/
4
%
Notes, net
|
|
|
7,699
|
|
|
8,876
|
|
Term
loans
|
|
|
791,025
|
|
|
330,780
|
|
Revolving
lines of credit
|
|
|
—
|
|
|
480
|
|
Nevada
Industrial Revenue Bonds
|
|
|
—
|
|
|
1,500
|
|
Capital
leases
|
|
|
26,896
|
|
|
20,922
|
|
|
|
|
1,160,620
|
|
|
697,558
|
|
Less
current portion of long-term debt
|
|
|
13,928
|
|
|
10,335
|
|
|
|
$
|
1,146,692
|
|
$
|
687,223
|
|
Berry
10
3
/4%
Senior Subordinated Notes
On
July 22, 2002, Berry completed an offering of $250.0 million aggregate
principal amount of 10
3
/
4
%
Senior
Subordinated Notes due 2012 (the “2002 Notes”). The net proceeds to Berry from
the sale of the 2002 Notes, after expenses, were $239.4 million. The proceeds
from the 2002 Notes were used in the financing of the Merger. On
November 20, 2003, Berry completed an offering of $85.0 million aggregate
principal amount of 10
3
/
4
%
Senior
Subordinated Notes due 2012 (the “Add-on Notes”). The net proceeds to Berry from
the sale of the Add-on Notes, after expenses, were $91.8 million. The proceeds
from the Add-on Notes were used in the financing of the Landis Acquisition.
The
2002 Notes and Add-on Notes mature on July 15, 2012. Interest is payable
semi-annually on January 15 and July 15 of each year, which commenced
on January 15, 2003 with respect to the 2002 Notes and commenced on
January 15, 2004 with respect to the Add-on Notes. Holding and all of
Berry’s domestic subsidiaries fully, jointly, severally, and unconditionally
guarantee on a senior subordinated basis the 2002 Notes and Add-on Notes.
The
2002 Notes and Add-on Notes are not guaranteed by the Company’s foreign
subsidiaries.
Berry
is
not required to make mandatory redemption or sinking fund payments with
respect
to the 2002 Notes and Add-on Notes. On or subsequent to July 15, 2007, the
2002 Notes and Add-on Notes may be redeemed at the option of Berry, in
whole or
in part, at redemption prices ranging from 105.375% in 2007 to 100% in
2010 and
thereafter. Upon a change in control, as defined in the indenture under
which
the 2002 Notes and Add-on Notes were issued (the “Indenture”), each holder of
notes will have the right to require Berry to repurchase all or any part
of such
holder’s notes at a repurchase price in cash equal to 101% of the aggregate
principal amount thereof plus accrued interest. The 2002 Notes and Add-on
Notes
are treated as a single class under the Indenture.
New
Credit Facility
In
connection with the Merger in 2002, the Company entered into a credit and
guaranty agreement and a related pledge security agreement with a syndicate
of
lenders led by Goldman Sachs Credit Partners L.P., as administrative agent
(the
“Credit Facility”). On November 10, 2003, in connection with the Landis
Acquisition, the Credit Facility was amended and restated (the “Amended and
Restated Credit Facility”). On August 9, 2004, the Amended and Restated
Credit Facility was amended and restated (the “Second Amended and Restated
Credit Facility”). On January 1, 2005, a First Amendment to the Second
Amended and Restated Credit Facility was entered into to permit Fifth Third
Bank
to assume the role of Administrative Agent and for Goldman Sachs Credit
Partners, L.P. to resign as Administrative Agent. On June 3, 2005, the
Company entered into a Second Amendment to the Second Amended and Restated
Credit Agreement with Deutsche Bank Trust Company Americas assuming the
role of
Administrative Agent. As a result of the Second Amendment to the Second
Amended
and Restated Credit Agreement, the Company expensed $7.0 million of unamortized
deferred financing and increased our term loan borrowings by $465.1 million
in
connection with the financing of the Kerr Acquisition. On October 26, 2005,
the Company entered into a Third Amendment to the Second Amended and Restated
Credit Agreement (the “New Credit Facility”) that reduced the applicable margin
on the term loan.
The
New
Credit Facility provides (1) a $795.0 million term loan and (2) a
$150.0 million revolving credit facility. The proceeds from the new term
loan
were used to repay the outstanding balance of the term loans from the Second
Amendment to the Second Amended and Restated Credit Facility and fund the
Kerr
Acquisition. The New Credit Facility permits the
Company
to borrow up to an additional $150.0 million of incremental senior term
indebtedness from lenders willing to provide such loans subject to certain
restrictions. The terms of the additional indebtedness will be determined
by the
market conditions at the time of borrowing. The maturity date of the term
loan
is December 2, 2011, and the maturity date of the revolving credit facility
is March 31, 2010. The indebtedness under the New Credit Facility is
guaranteed by Holding and all of its domestic subsidiaries. The obligations
of
Berry Plastics under the New Credit Facility and the guarantees thereof
are
secured by substantially all of the assets of such entities. At
December 31, 2005 and January 1, 2005, there were no borrowings
outstanding on the revolving credit facility. The revolving credit facility
allows up to $35.0 million of letters of credit to be issued instead of
borrowings under the revolving credit facility and up to $10.0 million
of
swingline loans. At December 31, 2005 and January 1, 2005, the Company
had $14.7 million and $8.5 million, respectively, in letters of credit
outstanding under the revolving credit facility.
The
New
Credit Facility contains significant financial and operating covenants,
including prohibitions on the ability to incur certain additional indebtedness
or to pay dividends, and restrictions on the ability to make capital
expenditures. The New Credit Facility also contains borrowing conditions
and
customary events of default, including nonpayment of principal or interest,
violation of covenants, inaccuracy of representations and warranties,
cross-defaults to other indebtedness, bankruptcy and other insolvency events
(other than in the case of certain foreign subsidiaries). The Company was
in
compliance with all the financial and operating covenants at December 31,
2005. The term loan amortizes quarterly as follows: $1,987,500 each quarter
which began September 30, 2005 and ends September 30, 2010 and
$188,315,625 each quarter beginning December 31, 2010 and ending
September 30, 2011.
Borrowings
under the New Credit Facility bear interest, at the Company’s option, at either
(i) a base rate (equal to the greater of the prime rate and the federal
funds rate plus 0.5%) plus the applicable margin (the “Base Rate Loans”) or
(ii) an adjusted eurodollar LIBOR (adjusted for reserves) plus the
applicable margin (the “Eurodollar Rate Loans”). With respect to the term loan,
the “applicable margin” is (i) with respect to Base Rate Loans,
1.25% per annum and (ii) with respect to Eurodollar Rate Loans,
2.00% per annum (6.45% at December 31, 2005 and 4.22% at
January 1, 2005). In addition, the applicable margins with respect to the
term loan can be further reduced by an additional .25% per annum subject to
the Company meeting a leverage ratio target, which was met based on the
results
through December 31, 2005. With respect to the revolving credit facility,
the “applicable margin” is subject to a pricing grid which ranges from
2.75% per annum to 2.00% per annum, depending on the leverage ratio
(2.75% based on results through December 31, 2005). The “applicable margin”
with respect to Base Rate Loans will always be 1.00% per annum less than
the “applicable margin” for Eurodollar Rate Loans. In October 2002, Berry
entered into an interest rate collar arrangement to protect $50.0 million
of the
outstanding variable rate term loan debt from future interest rate volatility.
The collar floor is set at 1.97% LIBOR (London Interbank Offering Rate)
and
capped at 6.75% LIBOR. The agreement was effective January 15, 2003 and
expires on July 15, 2006. In June 2005, Berry entered into three separate
interest rate swap transactions to protect $300.0 million of the outstanding
variable rate term loan debt from future interest rate volatility. The
agreements were effective June 3, 2005 and expire on June 3, 2008. The
agreements swap three month variable LIBOR contracts for a fixed rate three
year
rate of 3.897%. At December 31, 2005 and January 1, 2005,
shareholders’ equity has been increased (reduced) by $3,548 and ($4),
respectively, to adjust the interest rate collar and swap agreements to
fair
market value. At December 31, 2005, the Company had unused borrowing
capacity under the New Credit Facility’s revolving line of credit of $135.3
million.
Future
maturities of long-term debt at December 31, 2005 are as follows:
|
|
2006
|
$
13,928
|
2007
|
12,216
|
2008
|
14,193
|
2009
|
10,384
|
2010
|
194,369
|
Thereafter
|
907,831
|
|
$
1,152,921
|
Interest
paid was $71,151, $53,393, and $40,040, for 2005, 2004, and 2003, respectively.
Interest capitalized was $1,230, $1,120, and $860, for 2005, 2004, and
2003,
respectively.
Note
7. Lease and Other Commitments
Certain
property and equipment are leased using capital and operating leases. In
2005
and 2004, Berry Plastics entered into various capital lease obligations
with no
immediate cash flow effect resulting in capitalized property and equipment
of
$11,482 and $2,101, respectively. Total capitalized lease property consists
of a
building and manufacturing equipment with a cost of $39,113 and $35,148
and
related accumulated amortization of $11,132 and $14,353 at December 31,
2005 and January 1, 2005, respectively. Capital lease amortization is
included in depreciation expense. Total rental expense from operating leases
was
approximately $23,210, $14,879, and $11,216 for 2005, 2004, and 2003,
respectively.
Future
minimum lease payments for capital leases and noncancellable operating
leases
with initial terms in excess of one year are as follows:
|
|
|
|
|
|
|
|
At
December 31, 2005
|
|
|
|
Capital Leases
|
|
Operating Leases
|
|
2006
|
|
$
|
6,925
|
|
$
|
25,015
|
|
2007
|
|
|
4,842
|
|
|
21,628
|
|
2008
|
|
|
4,901
|
|
|
19,169
|
|
2009
|
|
|
5,658
|
|
|
17,305
|
|
2010
|
|
|
693
|
|
|
15,852
|
|
Thereafter
|
|
|
8,029
|
|
|
88,835
|
|
|
|
$
|
31,048
|
|
$
|
187,804
|
|
Less:
amount representing interest
|
|
|
(4,152
|
)
|
|
|
|
Present
value of net minimum lease payments
|
|
$
|
26,896
|
|
|
|
|
The
Company is party to various legal proceedings involving routine claims
which are
incidental to its business. Although the Company’s legal and financial liability
with respect to such proceedings cannot be estimated with certainty, the
Company
believes that any ultimate liability would not be material to its financial
position or results of operations.
The
Company has various purchase commitments for raw materials, supplies and
property and equipment incidental to the ordinary conduct of business.
At
December 31, 2005,
the
Company had committed approximately $52.7 million for resin on order that
had
not yet been received and $8.8 million to complete capital projects.
Note
8. Income Taxes
For
financial reporting purposes, income (loss) before income taxes, by tax
jurisdiction, is comprised of the following:
|
|
Year
Ended
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
December 27, 2003
|
|
Domestic
|
|
$
|
43,519
|
|
$
|
44,841
|
|
$
|
29,556
|
|
Foreign
|
|
|
(9,403
|
)
|
|
(4,150
|
)
|
|
(4,022
|
)
|
|
|
$
|
34,116
|
|
$
|
40,691
|
|
$
|
25,534
|
|
Deferred
income taxes reflect the net tax effects of temporary differences between
the
carrying amounts of assets and liabilities for financial reporting purposes
and
the amounts used for income tax purposes. Significant components of deferred
tax
assets and liabilities are as follows:
|
|
December 31, 2005
|
|
January 1, 2005
|
|
Deferred
tax assets:
|
|
|
|
|
|
Allowance
for doubtful accounts
|
|
$
|
1,877
|
|
$
|
804
|
|
Inventory
|
|
|
1,918
|
|
|
1,409
|
|
Compensation
and benefit accruals
|
|
|
17,114
|
|
|
4,032
|
|
Insurance
reserves
|
|
|
1,557
|
|
|
363
|
|
Net
operating loss carryforwards
|
|
|
32,843
|
|
|
29,318
|
|
Alternative
minimum tax (AMT) credit carryforwards
|
|
|
6,398
|
|
|
3,821
|
|
Other
|
|
|
96
|
|
|
—
|
|
Total
deferred tax assets
|
|
|
61,803
|
|
|
39,747
|
|
Valuation
allowance
|
|
|
(6,741
|
)
|
|
(6,184
|
)
|
Deferred
tax assets, net of valuation allowance
|
|
|
55,062
|
|
|
33,563
|
|
Deferred
tax liabilities:
|
|
|
|
|
|
|
|
Intangibles
|
|
|
88,837
|
|
|
14,793
|
|
Property
and equipment
|
|
|
35,888
|
|
|
19,418
|
|
Other
|
|
|
2,366
|
|
|
382
|
|
Total
deferred tax liabilities
|
|
|
127,091
|
|
|
34,593
|
|
Net
deferred tax liability
|
|
$
|
(72,029
|
)
|
$
|
(1,030
|
)
|
Income
tax expense consists of the following:
|
|
Year
Ended
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
December 27, 2003
|
|
Current:
|
|
|
|
|
|
|
|
Federal
|
|
$
|
735
|
|
$
|
363
|
|
$
|
402
|
|
Foreign
|
|
|
189
|
|
|
133
|
|
|
61
|
|
State
|
|
|
632
|
|
|
472
|
|
|
232
|
|
Total
current
|
|
|
1,556
|
|
|
968
|
|
|
695
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
11,779
|
|
|
13,543
|
|
|
8,608
|
|
Foreign
|
|
|
—
|
|
|
(173
|
)
|
|
—
|
|
State
|
|
|
990
|
|
|
3,402
|
|
|
3,183
|
|
Total
deferred
|
|
|
12,769
|
|
|
16,772
|
|
|
11,791
|
|
Income
tax expense
|
|
$
|
14,325
|
|
$
|
17,740
|
|
$
|
12,486
|
|
Holding
has unused operating loss carryforwards of approximately $65.9 million
for
federal and state income tax purposes which begin to expire in 2012. AMT
credit
carryforwards are available to Holding indefinitely to reduce future years’
federal income taxes. As a result of the Merger and Kerr Acquisition, the
unused
operating loss carryforward is subject to an annual limitation. The Company
is
in the process of finalizing the computation to determine the limitation
due to
the Kerr Acquisition and have preliminarily estimated the aggregate limit
as a
result of the Merger and Kerr Acquisition to be approximately $29.6 million
per
year.
I
ncome
taxes paid during 2005, 2004, and 2003 approximated $1,152, $764, and $484,
respectively.
A
reconciliation of income tax expense, computed at the federal statutory
rate, to
income tax expense, as provided for in the financial statements, is as
follows:
|
|
Year
Ended
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
December 27,
2003
|
|
Income
tax expense computed at statutory rate
|
|
$
|
11,941
|
|
$
|
14,244
|
|
$
|
8,721
|
|
State
income tax expense, net of federal taxes
|
|
|
1,622
|
|
|
2,518
|
|
|
2,220
|
|
Expenses
not deductible for income tax purposes
|
|
|
375
|
|
|
394
|
|
|
160
|
|
Change
in valuation allowance
|
|
|
557
|
|
|
1,288
|
|
|
1,285
|
|
Other
|
|
|
(170
|
)
|
|
(704
|
)
|
|
100
|
|
Income
tax expense
|
|
$
|
14,325
|
|
$
|
17,740
|
|
$
|
12,486
|
|
Note
9. Employee Retirement Plans
In
connection with the Kerr Acquisition, the Company acquired two defined
benefit
pension plans which cover substantially all former employees and former
union
employees at Kerr’s former Lancaster facility. The Company also acquired a
retiree health plan from Kerr, which covers certain healthcare and life
insurance benefits for certain retired employees and their spouses. The
two
defined benefit plans of Kerr and the retiree health plan are all inactive
plans
and are included in the beginning of year totals in the table below for
the year
ended December 31, 2005 as a result of the Kerr Acquisition on June 3,
2005. The Company also maintains a defined benefit pension plan covering
the
Poly-Seal employees under a collective bargaining agreement. The Company
uses
December 31 as a measurement date for the retirement plans.
|
|
|
|
|
|
|
|
|
|
Defined
Benefit
Pension
Plans
|
|
Retiree
Health
Plan
|
|
|
|
Year
Ended
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
December 31,
2005
|
|
Change
in benefit obligation:
|
|
|
|
|
|
|
|
Benefit
obligation at beginning of year
|
|
$
|
44,026
|
|
$
|
5,639
|
|
$
|
9,338
|
|
Service
cost
|
|
|
257
|
|
|
269
|
|
|
11
|
|
Interest
cost
|
|
|
1,457
|
|
|
352
|
|
|
268
|
|
Actuarial
loss (gain)
|
|
|
(1,186
|
)
|
|
42
|
|
|
(1,589
|
)
|
Benefits
paid
|
|
|
(2,269
|
)
|
|
(198
|
)
|
|
(364
|
)
|
Benefit
obligation at end of year
|
|
|
42,285
|
|
|
6,104
|
|
|
7,664
|
|
Change
in plan assets:
|
|
|
|
|
|
|
|
|
|
|
Fair
value of plan assets at beginning of year
|
|
|
33,558
|
|
|
4,775
|
|
|
—
|
|
Actual
return on plan assets
|
|
|
1,898
|
|
|
190
|
|
|
—
|
|
Employer
contribution
|
|
|
494
|
|
|
415
|
|
|
364
|
|
Benefits
paid
|
|
|
(2,269
|
)
|
|
(198
|
)
|
|
(364
|
)
|
Fair
value of plan assets at end of year
|
|
|
33,681
|
|
|
5,182
|
|
|
—
|
|
Funded
status
|
|
|
(8,604
|
)
|
|
(922
|
)
|
|
(7,664
|
)
|
Unrecognized
net actuarial loss (gain)
|
|
|
(645
|
)
|
|
765
|
|
|
(1,589
|
)
|
Unrecognized
prior service cost
|
|
|
597
|
|
|
686
|
|
|
—
|
|
Net
amount recognized
|
|
$
|
(8,652
|
)
|
$
|
529
|
|
$
|
(9,253
|
)
|
|
|
|
|
|
|
|
|
|
|
Defined
Benefit
Pension
Plans
|
|
Retiree
Health
Plan
|
|
|
|
Year
Ended
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
December 31,
2005
|
|
Amounts
recognized in the consolidation balance sheet consisted
of:
|
|
|
|
|
|
|
|
Prepaid
pension
|
|
$
|
413
|
|
$
|
529
|
|
$
|
—
|
|
Accrued
benefit liability
|
|
|
(10,624
|
)
|
|
(1,456
|
)
|
|
(9,253
|
)
|
Intangible
assets
|
|
|
597
|
|
|
685
|
|
|
—
|
|
Accumulated
other comprehensive losses before income taxes
|
|
|
962
|
|
|
771
|
|
|
—
|
|
Net
amount recognized
|
|
$
|
(8,652
|
)
|
$
|
529
|
|
$
|
(9,253
|
)
|
|
|
|
|
|
|
|
|
|
|
Defined
Benefit
Pension
Plans
|
|
Retiree
Health
Plan
|
|
|
|
Year
Ended
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
December 31,
2005
|
|
|
|
|
|
(Percents)
|
|
|
|
Weighted
average assumptions
|
|
|
|
|
|
|
|
Discount
rate for benefit obligation
|
|
|
5.5
|
|
|
6.3
|
|
|
5.5
|
|
Discount
rate for net benefit cost
|
|
|
5.3
|
|
|
6.3
|
|
|
5.0
|
|
Expected
return on plan assets for net benefit costs
|
|
|
8.0
|
|
|
8.0
|
|
|
—
|
|
In
evaluating the expected return on plan assets, the Company considered its
historical assumptions compared with actual results, an analysis of current
market conditions, asset allocations, and the views of advisers.
Health-care-cost trend rates were assumed to increase at an annual rate
of 9.0
percent in 2006 trending down to 4.5 percent in 2011 and thereafter.
The
following benefit payments, which reflect expected future service, as
appropriate, are expected to be paid as follows:
|
|
Defined
Benefit
Pension Plans
|
|
Retiree
Health Plan
|
|
2006
|
|
$
|
3,482
|
|
$
|
1,277
|
|
2007
|
|
|
3,412
|
|
|
1,173
|
|
2008
|
|
|
3,353
|
|
|
1,005
|
|
2009
|
|
|
3,311
|
|
|
819
|
|
2010
|
|
|
3,247
|
|
|
684
|
|
2011-2015
|
|
|
16,253
|
|
|
2,485
|
|
In
2006,
the Company expects to contribute approximately $2.2 million to its retirement
plans to satisfy minimum funding requirements for the year.
Net
pension and retiree health benefit expense included the following components:
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
December 27,
2003
|
|
Components
of net period benefit cost:
|
|
|
|
|
|
|
|
Defined
Benefit Pension Plans
|
|
|
|
|
|
|
|
Service
cost
|
|
$
|
257
|
|
$
|
269
|
|
$
|
223
|
|
Interest
cost
|
|
|
1,457
|
|
|
352
|
|
|
320
|
|
Expected
return on plan assets
|
|
|
(1,692
|
)
|
|
(399
|
)
|
|
(345
|
)
|
Amortization
of prior service cost
|
|
|
91
|
|
|
94
|
|
|
83
|
|
Recognized
actuarial loss
|
|
|
60
|
|
|
36
|
|
|
12
|
|
Net
periodic benefit cost
|
|
$
|
173
|
|
$
|
352
|
|
$
|
293
|
|
Retiree
Health Benefit Plan
|
|
|
|
|
|
|
|
|
|
|
Service
cost
|
|
$
|
11
|
|
$
|
—
|
|
$
|
—
|
|
Interest
cost
|
|
|
268
|
|
|
—
|
|
|
—
|
|
Net
periodic benefit cost
|
|
$
|
279
|
|
$
|
—
|
|
$
|
—
|
|
Our
defined benefit pension plan asset allocations are as follows:
|
|
Year
Ended
|
|
|
|
December 31, 2005
|
|
January 1, 2005
|
|
Asset
Category
|
|
|
|
|
|
Equity
securities and equity-like instruments
|
|
|
51
|
%
|
|
60
|
%
|
Debt
securities
|
|
|
47
|
|
|
34
|
|
Other
|
|
|
2
|
|
|
6
|
|
Total
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
The
Company’s retirement plan assets are invested with the objective of providing
the plans the ability to fund current and future benefit payment requirements
while minimizing annual Company contributions. The plans’ asset allocation
strategy reflects a long-term growth
strategy
with approximately 51% allocated to growth investments and 47% allocated
to
fixed income investments. The Company re-addresses the allocation of its
investments on an annual basis.
Berry
Plastics also sponsors two defined contribution 401(k) retirement plans
covering
substantially all employees. Contributions are based upon a fixed dollar
amount
for employees who participate and percentages of employee contributions
at
specified thresholds. Contribution expense for these plans were approximately
$2,801, $2,020, and $1,408 for 2005, 2004, and 2003, respectively.
Note
10. Stockholders’ Equity
Common
and Preferred Stock
On
July 22, 2002, GS Berry Acquisition Corp., (the “Buyer”) a newly formed
entity controlled by various private equity funds affiliated with Goldman,
Sachs & Co., merged (the “Merger”) with and into Holding, pursuant to
an agreement and plan of merger, dated as of May 25, 2002. At the effective
time of the Merger, (i) each share of common stock of BPC Holding
Corporation issued and outstanding immediately prior to the effective time
of
the Merger was converted into the right to receive cash pursuant to the
terms of
the Merger Agreement, and (ii) each share of common stock of the Buyer
issued and outstanding immediately prior to the effective time of the Merger
was
converted into one share of common stock of Holding.
Notes
Receivable from Management
In
connection with the Merger, certain senior employees of Holding acquired
shares
of Holding Common Stock pursuant to an employee stock purchase program.
Such
employees paid for these shares with any combination of (i) shares of
Holding common stock that they held prior to the Merger; (ii) their cash
transaction bonus, if any; and (iii) a promissory note. In addition,
Holding adopted an employee stock purchase program pursuant to which a
number of
employees had the opportunity to invest in Holding on a leveraged basis.
Employees participating in this program were permitted to finance two-thirds
of
their purchases of shares of Holding common stock under the program with
a
promissory note. The promissory notes are secured by the shares purchased
and
such notes accrue interest which compounds semi-annually at rates ranging
from
4.97% to 5.50% per year. Principal and all accrued interest is due and
payable on the earlier to occur of (i) the end of the ten-year term,
(ii) the ninetieth day following such employee’s termination of employment
due to death, “disability”, “redundancy” (as such terms are defined in the 2002
Option Plan) or retirement, or (iii) the thirtieth day following such
employee’s termination of employment for any other reason. As of
December 31, 2005 and January 1, 2005, the Company had $14,273 and
$14,856, respectively, in outstanding notes receivable (principal and interest),
which has been classified as a reduction to stockholders’ equity in the
consolidated balance sheet, due from employees under this program.
Stock
Option Plans
Holding
maintains the BPC Holding Corporation 1996 Stock Option Plan (“1996 Option
Plan”), as amended, pursuant to which nonqualified options to purchase 126,700
shares are outstanding. All outstanding options under the 1996 Option Plan
are
scheduled to expire on July 22, 2012 and no additional options will be
granted under it. Option agreements issued pursuant to the 1996 Option
Plan
generally provide that options become vested and exercisable
at
a rate
of 10% per year based on continued service. Additional options also vest in
years during which certain financial targets are attained. Notwithstanding
the
vesting provisions in the option agreements, all options that were scheduled
to
vest prior to December 31, 2002 accelerated and became vested immediately
prior to the Merger.
Holding
has adopted an employee stock option plan (“2002 Option Plan”), as amended,
pursuant to which options to acquire up to 603,248 shares of Holding’s common
stock may be granted to its employees, directors and consultants. Options
granted under the 2002 Option Plan have an exercise price per share that
either
(1) is fixed at the fair market value of a share of common stock on the
date of grant or (2) commences at the fair market value of a share of
common stock on the date of grant and increases at the rate of 15% per year
during the term. Generally, options have a ten-year term, subject to earlier
expiration upon the termination of the option holder’s employment and other
events. Some options granted under the plan become vested and exercisable
over a
five-year period based on continued service with Holding. Other options
become
vested and exercisable based on the achievement by Holding of certain financial
targets, or if such targets are not achieved, based on continued service
with
Holding. Upon a change in control of Holding, the vesting schedule with
respect
to certain options accelerate for a portion of the shares subject to such
options.
Financial
Accounting Standards Board Statement 123, Accounting for Stock-Based
Compensation (“Statement 123”), prescribes accounting and reporting standards
for all stock-based compensation plans. Statement 123 provides that companies
may elect to continue using existing accounting requirements for stock-based
awards or may adopt a new fair value method to determine their intrinsic
value.
Holding has elected to continue following Accounting Principles Board Opinion
No. 25, Accounting For Stock Issued to Employees (“APB 25”) to account for its
employee stock options. Under APB 25, because the exercise price of Holding’s
employee stock options equals the market price of the underlying stock
on the
date of grant, no compensation expense is recognized at the grant date.
Information
related to the 1996 Option Plan and 2002 Option Plan is as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2005
|
January 1,
2005
|
December 27,
2003
|
|
Number
of
Shares
|
|
Weighted
Average
Exercise
Price
|
Number
Of
Shares
|
|
Weighted
Average
Exercise
Price
|
Number
Of
Shares
|
|
Weighted
Average
Exercise
Price
|
Options
outstanding,
beginning
of
period
|
$
590,156
|
|
$
102
|
$
530,662
|
|
$
94
|
$
545,684
|
|
$
86
|
Options
granted
|
96,051
|
|
145
|
65,465
|
|
120
|
38,713
|
|
100
|
Options
exercised
|
(31,652
)
|
|
105
|
(1,640
)
|
|
53
|
(9,757
)
|
|
57
|
Options
forfeited
|
(29,346
)
|
|
117
|
(4,331
)
|
|
93
|
(43,978
)
|
|
101
|
Options
outstanding,
end
of
period
|
625,209
|
|
113
|
590,156
|
|
102
|
530,662
|
|
94
|
Option
price range
at
end of price
|
|
$
32-$163
|
|
|
$
32-$142
|
|
|
$
32-$124
|
|
Options
exercisable
at end
of
period
|
|
365,265
|
|
|
291,879
|
|
|
203,326
|
|
Options
available
for
grant at period
end
|
|
4,216
|
|
|
43,489
|
|
|
22,588
|
|
Weighted
average
fair
value of
options
granted
during
period
|
|
$
45
|
|
|
$
34
|
|
|
$
28
|
|
The
following table summarizes information about the options outstanding at
December 31, 2005:
|
|
|
|
|
Range
of
Exercise
Prices
|
Number
Outstanding
At
December 31,
2005
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
at
December 31,
2005
|
$32
- $72
|
126,700
|
7 years
|
$49
|
118,586
|
$100
|
209,297
|
7
years
|
$100
|
111,722
|
$120
|
45,526
|
8
years
|
$120
|
18,210
|
$145
|
92,946
|
9
years
|
$145
|
11,233
|
$163
|
150,740
|
7
years
|
$163
|
105,514
|
|
625,209
|
|
|
365,265
|
Stockholders
Agreements
In
connection with the Merger, Holding entered into a stockholders’ agreement with
GSCP 2000 and other private equity funds affiliated with Goldman,
Sachs & Co., which in the aggregate own a majority of the common stock,
and J.P. Morgan Partners Global Investors, L.P. and other private equity
funds
affiliated with J.P. Morgan Securities Inc., which own approximately 28%
of the
common stock. GSCP 2000 and other private equity funds affiliated with
Goldman,
Sachs & Co., have the right to designate seven members of the board of
directors, one of which shall be a member of management, and J.P. Morgan
Partners Global Investors, L.P. and other private equity funds affiliated
with
J.P. Morgan Securities Inc. have the right to designate two members of
the board
of directors. The stockholders’ agreement contains customary terms including
terms regarding transfer restrictions, rights of first offer, tag along
rights,
drag along rights, preemptive rights and veto rights.
Note
11. Related Party Transactions
In
connection with the Landis Acquisition, the Company paid $1.7 million to
entities affiliated with Goldman, Sachs & Co. and $0.8 million to J.P.
Morgan Securities Inc., an affiliate of J.P. Morgan Chase & Co., for
advisory and other services. Goldman Sachs and J.P. Morgan acted as joint
book-running managers in the issuance of the Add-on Notes and received
fees of
approximately $1.0 million and $1.0 million, respectively, for services
performed. Goldman Sachs Credit Partners, L.P., an affiliate of Goldman
Sachs,
acted as the administrative agent, joint lead arranger and joint bookrunner
for
the Amended and Restated Credit Facility and received fees of $0.5 million
for
services provided. JP Morgan Chase Bank, an affiliate of J.P. Morgan, acted
as
the joint lead arranger and joint bookrunner for the Amended and Restated
Credit
Facility for consideration of $0.5 million.
Goldman
Sachs Credit Partners, L.P., an affiliate of Goldman Sachs, acted as the
administrative agent, joint lead arranger and joint bookrunner for the
Second
Amended and Restated Credit Facility without separate compensation. JP
Morgan
Chase Bank, an affiliate of J.P. Morgan, acted as the joint lead arranger
and
joint bookrunner for the Second Amended and Restated Credit Facility for
consideration of approximately $0.4 million. In addition, the Company entered
into four resin forward contracts in the fourth quarter of 2004 ranging
from
6.0 million to 33.6 million annual pounds of resin with J.
Aron & Company, a division of Goldman, Sachs & Co., and enters
into foreign currency transactions through its normal course of business
with
Goldman, Sachs & Co. In June 2005, Berry entered into two separate
interest rate swap transactions for $100.0 million each with an affiliate
of
Goldman Sachs and an affiliate
of
J.P.
Morgan to protect a portion of the outstanding variable rate term loan
debt from
future interest rate volatility.
In
connection with the Kerr Acquisition, the Company paid $2.7 million to
entities
affiliated with Goldman, Sachs & Co. and $1.3 million to entities
affiliated with J.P. Morgan Chase & Co., for advisory and other
services. Goldman Sachs and J.P. Morgan Chase Bank, an affiliate of J.P.
Morgan,
acted as co-syndication agents, joint lead arrangers, and joint bookrunners
for
the Second Amendment to the Second Amended and Restated Credit Facility
for
consideration of $2.7 million and $2.4 million, respectively. Goldman Sachs
Credit Partners, L.P., an affiliate of Goldman Sachs, acted as the
co-syndication agent, joint lead arranger and joint bookrunner for the
Third
Amendment to the Second Amended and Restated Credit Facility without separate
compensation. JP Morgan Chase Bank, an affiliate of J.P. Morgan, acted
as the
co-syndication agent, joint lead arranger, and joint bookrunner for the
Third
Amendment to the Second Amended and Restated Credit Facility for consideration
of $0.5 million. Also, affiliates of Goldman Sachs & Co. and J.P.
Morgan invest in a portion of the Company’s credit facilities in its normal
course of business.
Note
12. Financial Instruments
Holding’s
and the Company’s financial instruments generally consist of cash and cash
equivalents, the investment in Southern Packaging, interest rate hedge
contracts, resin hedge contracts, and long-term debt. The carrying amounts
of
Holding’s and the Company’s financial instruments approximate fair value at
December 31, 2005 except for the 2002 Notes and Add-on Notes for which the
fair value exceeded the carrying value by $25.1 million.
In
October 2002, Berry entered into an interest rate collar arrangement to
protect
$50.0 million of the outstanding variable rate term loan debt from future
interest rate volatility. In June 2005, Berry entered into three separate
interest rate swap transactions to protect $300.0 million of the outstanding
variable rate term loan debt from future interest rate volatility. The
collar
and interest rate swaps are accounted for as fair value hedges and the
gains and
losses arising from the instruments are recorded concurrently with gains
and
losses arising from the underlying transactions.
The
Company consumes plastic resin during the normal course of production.
The
fluctuations in the cost of plastic resin can vary the costs of production.
As
part of its risk management strategy, the Company entered into resin forward
hedging transactions constituting approximately 15% of its estimated 2005
resin
needs and 10% of its 2006 estimated resin needs based on 2004 volumes prior
to
the Kerr Acquisition. These contracts obligate the Company to make or receive
a
monthly payment equal to the difference in the unit cost of resin per the
contract and an industry index times the contracted pounds of plastic resin.
Such contracts are designated as hedges of a portion of the Company’s forecasted
purchases through 2006 and are effective in hedging the Company’s exposure to
changes in resin prices during this period. The contracts qualify as cash
flow
hedges under SFAS No. 133 and accordingly are marked to market with unrealized
gains and losses deferred through other comprehensive income and recognized
in
earnings when realized as an adjustment to cost of goods sold. The fair
values
of these contracts at December 31, 2005 and January 1, 2005 was an
unrealized gain, after taxes, of $3.7 million and $5.2 million, respectively.
Note
13. Accumulated Other Comprehensive Income
The
accumulated balances related to each component of the other comprehensive
income
consist of the following:
|
|
|
|
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
Currency
translation
|
|
$
|
5,214
|
|
$
|
8,479
|
|
Minimum
pension liability adjustment
|
|
|
(577
|
)
|
|
(462
|
)
|
Unrealized
loss on interest rate collar
|
|
|
—
|
|
|
(4
|
)
|
Unrealized
gain on interest rate hedges
|
|
|
3,548
|
|
|
—
|
|
Unrealized
gain on resin hedge contracts
|
|
|
3,680
|
|
|
5,173
|
|
|
|
$
|
11,865
|
|
$
|
13,186
|
|
Note
14. Operating Segments
In
connection with the Kerr Acquisition, Berry reorganized its operations
into two
reportable segments: open top and closed top. The realignment occurred
in an
effort to integrate the operations of Kerr, better service the Company’s
customers, and provide a more efficient organization. Prior periods have
been
restated to be aligned with the new reporting structure in order to provide
comparable results. The Company evaluates performance and allocates resources
to
segments based on operating income before depreciation and amortization
of
intangibles adjusted to exclude (1) uncompleted acquisition expense,
(2) acquisition integration expense, (3) plant shutdown expense, and
(4) non-cash compensation. The accounting policies of the reportable
segments are the same as those described in the summary of significant
accounting policies.
|
|
Year
Ended
|
|
|
|
December 31,
2005
|
|
January 1,
2005
|
|
December 27,
2003
|
|
Net
sales:
|
|
|
|
|
|
|
|
Closed
Top
|
|
$
|
394,027
|
|
$
|
154,956
|
|
$
|
147,297
|
|
Open
Top
|
|
|
775,677
|
|
|
659,257
|
|
|
404,579
|
|
Total
net sales
|
|
|
1,169,704
|
|
|
814,213
|
|
|
551,876
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Closed
Top
|
|
|
71,154
|
|
|
29,880
|
|
|
30,228
|
|
Open
Top
|
|
|
141,432
|
|
|
131,188
|
|
|
88,609
|
|
Total
adjusted EBITDA
|
|
|
212,586
|
|
|
161,068
|
|
|
118,837
|
|
Total
assets:
|
|
|
|
|
|
|
|
|
|
|
Closed
Top
|
|
|
789,275
|
|
|
215,552
|
|
|
237,848
|
|
Open
Top
|
|
|
858,555
|
|
|
789,592
|
|
|
777,958
|
|
Total
assets
|
|
|
1,647,830
|
|
|
1,005,144
|
|
|
1,015,806
|
|
Goodwill,
net:
|
|
|
|
|
|
|
|
|
|
|
Closed
Top
|
|
|
210,614
|
|
|
78,375
|
|
|
85,756
|
|
Open
Top
|
|
|
284,644
|
|
|
280,508
|
|
|
291,013
|
|
Total
goodwill, net
|
|
|
495,258
|
|
|
358,883
|
|
|
376,769
|
|
Reconciliation
of Adjusted EBITDA to net income:
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA for reportable segments
|
|
$
|
212,586
|
|
$
|
161,068
|
|
$
|
118,837
|
|
Net
interest expense
|
|
|
(73,274
|
)
|
|
(53,185
|
)
|
|
(45,413
|
)
|
Depreciation
|
|
|
(73,146
|
)
|
|
(54,303
|
)
|
|
(40,752
|
)
|
Amortization
|
|
|
(15,574
|
)
|
|
(6,513
|
)
|
|
(3,326
|
)
|
Income
Taxes
|
|
|
(14,325
|
)
|
|
(17,740
|
)
|
|
(12,486
|
)
|
Gain
on disposal of property and equipment
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Loss
on investment in Southern Packaging
|
|
|
(1,354
|
)
|
|
—
|
|
|
—
|
|
Loss
on extinguished debt
|
|
|
(7,045
|
)
|
|
—
|
|
|
(250
|
)
|
Uncompleted
acquisition expense
|
|
|
—
|
|
|
—
|
|
|
(1,041
|
)
|
Acquisition
integration expense
|
|
|
(5,925
|
)
|
|
(3,969
|
)
|
|
(1,424
|
)
|
Plant
shutdown expense
|
|
|
—
|
|
|
(1,822
|
)
|
|
(1,104
|
)
|
Non-cash
compensation
|
|
|
(2,152
|
)
|
|
(585
|
)
|
|
—
|
|
Net
income
|
|
$
|
19,791
|
|
$
|
22,951
|
|
$
|
13,048
|
|
Note
15. Condensed Consolidating Financial Information
Holding
conducts its business through its wholly owned subsidiary, Berry. Holding
and
all of Berry’s domestic subsidiaries fully, jointly, severally, and
unconditionally guarantee on a senior subordinated basis the 2002 Notes
and
Add-on Notes issued by Berry. Berry and all of Berry’s subsidiaries are 100%
directly or indirectly owned by Holding. Separate narrative information
or
financial statements of guarantor subsidiaries have not been included as
management believes they would not be material to investors. Presented
below is
condensed consolidating financial information for Holding, Berry, and its
subsidiaries at December 31, 2005 and January 1, 2005 and for the
fiscal years ended December 31, 2005, January 1, 2005, and
December 27, 2003. The equity method has been used with respect to
investments in subsidiaries.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2005
|
|
|
|
BPC Holding
Corporation
(Parent)
|
|
Berry
Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Current
assets
|
|
$
|
—
|
|
$
|
132,192
|
|
$
|
224,471
|
|
$
|
22,826
|
|
$
|
—
|
|
$
|
379,489
|
|
Net
property and
equipment
|
|
|
—
|
|
|
91,831
|
|
|
311,649
|
|
|
19,964
|
|
|
—
|
|
|
423,444
|
|
Other
non-current
assets
|
|
|
203,388
|
|
|
1,292,315
|
|
|
703,500
|
|
|
13,214
|
|
|
(1,367,520
|
)
|
|
844,897
|
|
Total
assets
|
|
$
|
203,388
|
|
$
|
1,516,338
|
|
$
|
1,239,620
|
|
$
|
56,004
|
|
$
|
(1,367,520
|
)
|
$
|
1,647,830
|
|
Current
liabilities
|
|
$
|
—
|
|
$
|
81,349
|
|
$
|
87,269
|
|
$
|
9,090
|
|
$
|
—
|
|
$
|
177,708
|
|
Noncurrent
liabilities
|
|
|
—
|
|
|
1,231,601
|
|
|
1,333,925
|
|
|
40,783
|
|
|
(1,339,575
|
)
|
|
1,266,734
|
|
Equity
(deficit)
|
|
|
203,388
|
|
|
203,388
|
|
|
(181,574
|
)
|
|
6,131
|
|
|
(27,945
|
)
|
|
203,388
|
|
Total
liabilities and
equity
(deficit)
|
|
$
|
203,388
|
|
$
|
1,516,338
|
|
$
|
1,239,620
|
|
$
|
56,004
|
|
$
|
(1,367,520
|
)
|
$
|
1,647,830
|
|
|
|
|
|
|
January 1,
2005
|
|
Balance
Sheets
|
|
BPC
Holding
Corporation
(Parent)
|
|
Berry
Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Current
assets
|
|
$
|
—
|
|
$
|
68,449
|
|
$
|
139,338
|
|
$
|
12,012
|
|
$
|
—
|
|
$
|
219,799
|
|
Net
property and
equipment
|
|
|
—
|
|
|
76,555
|
|
|
188,841
|
|
|
16,576
|
|
|
—
|
|
|
281,972
|
|
Other
non-current assets
|
|
|
183,891
|
|
|
770,971
|
|
|
363,091
|
|
|
12,328
|
|
|
(826,908
|
)
|
|
503,373
|
|
Total
assets
|
|
$
|
183,891
|
|
$
|
915,975
|
|
$
|
691,270
|
|
$
|
40,916
|
|
$
|
(826,908
|
)
|
$
|
1,005,144
|
|
Current
liabilities
|
|
$
|
—
|
|
$
|
81,053
|
|
$
|
42,004
|
|
$
|
6,648
|
|
$
|
—
|
|
$
|
129,705
|
|
Noncurrent
liabilities
|
|
|
—
|
|
|
651,031
|
|
|
747,720
|
|
|
27,258
|
|
|
(734,461
|
)
|
|
691,548
|
|
Equity
(deficit)
|
|
|
183,891
|
|
|
183,891
|
|
|
(98,454
|
)
|
|
7,010
|
|
|
(92,447
|
)
|
|
183,891
|
|
Total
liabilities and equity (deficit)
|
|
$
|
183,891
|
|
$
|
915,975
|
|
$
|
691,270
|
|
$
|
40,916
|
|
$
|
(826,908
|
)
|
$
|
1,005,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2005
|
|
|
|
BPC
Holding
Corporation
(Parent)
|
|
Berry
Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
—
|
|
$
|
283,261
|
|
$
|
859,192
|
|
$
|
27,251
|
|
$
|
—
|
|
$
|
1,169,704
|
|
Cost
of goods sold
|
|
|
—
|
|
|
202,631
|
|
|
712,325
|
|
|
28,414
|
|
|
—
|
|
|
943,370
|
|
Gross
profit
|
|
|
—
|
|
|
80,630
|
|
|
146,867
|
|
|
(1,163
|
)
|
|
—
|
|
|
226,334
|
|
Operating
expenses
|
|
|
(55,315
|
)
|
|
41,578
|
|
|
119,540
|
|
|
4,742
|
|
|
—
|
|
|
110,545
|
|
Operating
income (loss)
|
|
|
55,315
|
|
|
39,052
|
|
|
27,327
|
|
|
(5,905
|
)
|
|
—
|
|
|
115,789
|
|
Other
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,354
|
|
|
—
|
|
|
1,354
|
|
Interest
expense (income), net
|
|
|
(778
|
)
|
|
(26,219
|
)
|
|
98,127
|
|
|
2,144
|
|
|
—
|
|
|
73,274
|
|
Loss
on extinguished debt
|
|
|
—
|
|
|
7,045
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,045
|
|
Income
taxes
|
|
|
35
|
|
|
13,835
|
|
|
266
|
|
|
189
|
|
|
—
|
|
|
14,325
|
|
Equity
in net (income) loss from subsidiary
|
|
|
36,267
|
|
|
80,658
|
|
|
9,592
|
|
|
—
|
|
|
(126,517
|
)
|
|
—
|
|
Net
income (loss)
|
|
$
|
19,791
|
|
$
|
(36,267
|
)
|
$
|
(80,658
|
)
|
$
|
(9,592
|
)
|
$
|
126,517
|
|
$
|
19,791
|
|
Consolidating
Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
19,791
|
|
$
|
(36,267
|
)
|
$
|
(80,658
|
)
|
$
|
(9,592
|
)
|
$
|
126,517
|
|
$
|
19,791
|
|
Non-cash
expenses
|
|
|
2,152
|
|
|
36,861
|
|
|
69,302
|
|
|
5,670
|
|
|
—
|
|
|
113,985
|
|
Equity
in net (income) loss from subsidiary
|
|
|
36,267
|
|
|
80,658
|
|
|
9,592
|
|
|
—
|
|
|
(126,517
|
)
|
|
—
|
|
Changes
in working capital
|
|
|
(776
|
)
|
|
(17,902
|
)
|
|
(10,141
|
)
|
|
(3,411
|
)
|
|
—
|
|
|
(32,230
|
)
|
Net
cash provided by (used for) operating activities
|
|
|
57,434
|
|
|
63,350
|
|
|
(11,905
|
)
|
|
(7,333
|
)
|
|
—
|
|
|
101,546
|
|
Net
cash used for investing activities
|
|
|
—
|
|
|
(478,962
|
)
|
|
(24,219
|
)
|
|
(16,817
|
)
|
|
—
|
|
|
(519,998
|
)
|
Net
cash provided by (used for) financing activities
|
|
|
(57,434
|
)
|
|
438,341
|
|
|
36,395
|
|
|
25,884
|
|
|
—
|
|
|
443,186
|
|
Effect
on exchange rate changes on cash
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(242
|
)
|
|
—
|
|
|
(242
|
)
|
Net
increase in cash and cash equivalents
|
|
|
—
|
|
|
22,729
|
|
|
271
|
|
|
1,492
|
|
|
—
|
|
|
24,492
|
|
Cash
and cash equivalents at beginning of year
|
|
|
—
|
|
|
85
|
|
|
42
|
|
|
137
|
|
|
—
|
|
|
264
|
|
Cash
and cash equivalents at end of year
|
|
$
|
—
|
|
$
|
22,814
|
|
$
|
313
|
|
$
|
1,629
|
|
$
|
—
|
|
$
|
24,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended January 1, 2005
|
|
|
|
BPC
Holding
Corporation
(Parent)
|
|
Berry
Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
—
|
|
$
|
236,448
|
|
$
|
554,107
|
|
$
|
23,658
|
|
$
|
—
|
|
$
|
814,213
|
|
Cost
of goods sold
|
|
|
—
|
|
|
166,248
|
|
|
449,760
|
|
|
23,321
|
|
|
—
|
|
|
639,329
|
|
Gross
profit
|
|
|
—
|
|
|
70,200
|
|
|
104,347
|
|
|
337
|
|
|
—
|
|
|
174,884
|
|
Operating
expenses
|
|
|
(39,306
|
)
|
|
37,072
|
|
|
79,493
|
|
|
3,749
|
|
|
—
|
|
|
81,008
|
|
Operating
income (loss)
|
|
|
39,306
|
|
|
33,128
|
|
|
24,854
|
|
|
(3,412
|
)
|
|
—
|
|
|
93,876
|
|
Interest
expense (income), net
|
|
|
(772
|
)
|
|
(15,007
|
)
|
|
68,226
|
|
|
738
|
|
|
—
|
|
|
53,185
|
|
Income
taxes (benefit)
|
|
|
42
|
|
|
17,458
|
|
|
281
|
|
|
(41
|
)
|
|
—
|
|
|
17,740
|
|
Equity
in net (income) loss from subsidiary
|
|
|
17,085
|
|
|
47,762
|
|
|
4,109
|
|
|
—
|
|
|
(68,956
|
)
|
|
—
|
|
Net
income (loss)
|
|
$
|
22,951
|
|
$
|
(17,085
|
)
|
$
|
(47,762
|
)
|
$
|
(4,109
|
)
|
$
|
68,956
|
|
$
|
22,951
|
|
Consolidating
Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
22,951
|
|
$
|
(17,085
|
)
|
$
|
(47,762
|
)
|
$
|
(4,109
|
)
|
$
|
68,956
|
|
$
|
22,951
|
|
Non-cash
expenses
|
|
|
585
|
|
|
33,596
|
|
|
42,565
|
|
|
3,485
|
|
|
—
|
|
|
80,231
|
|
Equity
in net (income) loss from subsidiary
|
|
|
17,085
|
|
|
47,762
|
|
|
4,109
|
|
|
—
|
|
|
(68,956
|
)
|
|
—
|
|
Changes
in working capital
|
|
|
(775
|
)
|
|
10,520
|
|
|
(36,689
|
)
|
|
(1,005
|
)
|
|
—
|
|
|
(27,949
|
)
|
Net
cash provided by (used for) operating activities
|
|
|
39,846
|
|
|
74,793
|
|
|
(37,777
|
)
|
|
(1,629
|
)
|
|
—
|
|
|
75,233
|
|
Net
cash provided by (used for) investing activities
|
|
|
—
|
|
|
(21,125
|
)
|
|
(26,426
|
)
|
|
2,074
|
|
|
—
|
|
|
(45,477
|
)
|
Net
cash provided by (used for) financing activities
|
|
|
(39,846
|
)
|
|
(77,869
|
)
|
|
62,575
|
|
|
(568
|
)
|
|
—
|
|
|
(55,708
|
)
|
Effect
on exchange rate changes on cash
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
—
|
|
|
(24,201
|
)
|
|
(1,628
|
)
|
|
(99
|
)
|
|
—
|
|
|
(25,928
|
)
|
Cash
and cash equivalents at beginning of year
|
|
|
—
|
|
|
24,286
|
|
|
1,670
|
|
|
236
|
|
|
—
|
|
|
26,192
|
|
Cash
and cash equivalents at end of year
|
|
$
|
—
|
|
$
|
85
|
|
$
|
42
|
|
$
|
137
|
|
$
|
—
|
|
$
|
264
|
|
|
|
Year
Ended December 27, 2003
|
|
|
|
BPC
Holding
Corporation
(Parent)
|
|
Berry
Plastics
Corporation
(Issuer)
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
|
Consolidating
Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
—
|
|
$
|
200,886
|
|
$
|
328,984
|
|
$
|
22,006
|
|
$
|
—
|
|
$
|
551,876
|
|
Cost
of goods sold
|
|
|
—
|
|
|
140,139
|
|
|
259,720
|
|
|
20,891
|
|
|
—
|
|
|
420,750
|
|
Gross
profit
|
|
|
—
|
|
|
60,747
|
|
|
69,264
|
|
|
1,115
|
|
|
—
|
|
|
131,126
|
|
Operating
expenses
|
|
|
(25,840
|
)
|
|
34,536
|
|
|
47,545
|
|
|
3,695
|
|
|
—
|
|
|
59,936
|
|
Operating
income (loss)
|
|
|
25,840
|
|
|
26,211
|
|
|
21,719
|
|
|
(2,580
|
)
|
|
—
|
|
|
71,190
|
|
Other
income
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
Interest
expense, net
|
|
|
(763
|
)
|
|
(592
|
)
|
|
45,326
|
|
|
1,442
|
|
|
—
|
|
|
45,413
|
|
Loss
on extinguished debt
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
Income
taxes
|
|
|
27
|
|
|
12,388
|
|
|
10
|
|
|
61
|
|
|
—
|
|
|
12,486
|
|
Equity
in net (income) loss from subsidiary
|
|
|
13,528
|
|
|
27,693
|
|
|
4,083
|
|
|
—
|
|
|
(45,304
|
)
|
|
—
|
|
Net
income (loss)
|
|
$
|
13,048
|
|
$
|
(13,528
|
)
|
$
|
(27,693
|
)
|
$
|
(4,083
|
)
|
$
|
45,304
|
|
$
|
13,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidating
Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
13,048
|
|
$
|
(13,528
|
)
|
$
|
(27,693
|
)
|
$
|
(4,083
|
)
|
$
|
45,304
|
|
$
|
13,048
|
|
Non-cash
expenses
|
|
|
—
|
|
|
26,817
|
|
|
28,136
|
|
|
3,227
|
|
|
—
|
|
|
58,180
|
|
Equity
in net (income) loss from subsidiary
|
|
|
13,528
|
|
|
27,693
|
|
|
4,083
|
|
|
—
|
|
|
(45,304
|
)
|
|
—
|
|
Changes
in working capital
|
|
|
(758
|
)
|
|
1,159
|
|
|
7,463
|
|
|
681
|
|
|
—
|
|
|
8,545
|
|
Net
cash provided by (used for) operating activities
|
|
|
25,818
|
|
|
42,141
|
|
|
11,989
|
|
|
(175
|
)
|
|
—
|
|
|
79,773
|
|
Net
cash used for investing activities
|
|
|
—
|
|
|
(244,511
|
)
|
|
(16,474
|
)
|
|
(4,667
|
)
|
|
—
|
|
|
(265,652
|
)
|
Net
cash provided by (used for) financing activities
|
|
|
(25,819
|
)
|
|
211,499
|
|
|
5,891
|
|
|
5,250
|
|
|
—
|
|
|
196,821
|
|
Effect
on exchange rate changes on cash
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(363
|
)
|
|
—
|
|
|
(363
|
)
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
(1
|
)
|
|
9,129
|
|
|
1,406
|
|
|
45
|
|
|
—
|
|
|
10,579
|
|
Cash
and cash equivalents at beginning of year
|
|
|
1
|
|
|
15,157
|
|
|
264
|
|
|
191
|
|
|
—
|
|
|
15,613
|
|
Cash
and cash equivalents at end of year
|
|
$
|
—
|
|
$
|
24,286
|
|
$
|
1,670
|
|
$
|
236
|
|
$
|
—
|
|
$
|
26,192
|
|
Note
16. Quarterly Financial Data (Unaudited)
The
following table contains selected unaudited quarterly financial data for
fiscal
years 2005 and 2004.
|
|
2005
|
|
2004
|
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Net
sales
|
|
$
|
225,310
|
|
$
|
282,871
|
|
$
|
342,305
|
|
$
|
319,218
|
|
$
|
191,726
|
|
$
|
211,041
|
|
$
|
204,803
|
|
$
|
206,643
|
|
Cost
of
sales
|
|
|
184,016
|
|
|
233,477
|
|
|
273,129
|
|
|
252,748
|
|
|
148,615
|
|
|
164,565
|
|
|
160,824
|
|
|
165,325
|
|
Gross
profit
|
|
$
|
41,294
|
|
$
|
49,394
|
|
$
|
69,176
|
|
$
|
66,470
|
|
$
|
43,111
|
|
$
|
46,476
|
|
$
|
43,979
|
|
$
|
41,318
|
|
Net
income
|
|
$
|
3,799
|
|
$
|
1,751
|
|
$
|
9,085
|
|
$
|
5,156
|
|
$
|
4,822
|
|
$
|
7,391
|
|
$
|
6,641
|
|
$
|
4,097
|
|
Note
17. Subsequent Event (Unaudited)
On
June
28, 2006 Berry announced that the private equity firms Apollo Management,
L.P.
and Graham Partners had signed a definitive agreement to acquire Holdings
from
Goldman
Sachs
Capital Partners and JPMorgan Partners for an enterprise value of $2.25
billion
in aggregate consideration. The transaction closed September 20, 2006.
Following
the transaction, Apollo owns the majority of the Company's common stock.
The
transaction was primarily funded through equity contributions of approximately
$484 million and the issuance of $750 million of second priority senior
notes,
$675 million of term B loans, and $425 million of senior subordinated notes.
Adjustments related to this transaction are not reflected in these financial
statements.
Berry
Plastics Holding Corporation
OFFER
TO EXCHANGE
8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014 and Second Priority
Senior Secured Floating Rate Notes due 2014 registered under the Securities
Act
For
A
Like Principal Amount of Second Priority Senior Secured Fixed and Floating
Rate
Notes
($750,000,000
Aggregate Principal Amount)
Prospectus
Dated November
,
2006
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
Item
20. Indemnification of Directors and Officers.
Berry
Plastics Holding Corporation is a Delaware Corporation. Section 145(a)
of the
General Corporation Law of the State of Delaware (the “DGCL”), provides that a
Delaware corporation may indemnify 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
(other than an action by or in the right of the corporation) by reason
of the
fact that he 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, partnership, joint venture, trust
or
other enterprise, 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 if he acted in good faith
and in
a manner he reasonably believed to be in or not opposed to the best interests
of
the corporation, and, with respect to any criminal action or proceeding,
had no
cause to believe his conduct was unlawful.
Section
145(b) of the DGCL provides that a Delaware corporation may indemnify any
person
who was or is a party or is threatened to be made a party to nay threatened,
pending or completed action or suit by or in the right of the corporation
to
procure a judgment in its favor by reason of the fact that such person
acted in
any of the capacities set forth above, including attorneys’ fees actually and
reasonably incurred by him in connection with the defense or settlement
of such
action or suit if he acted under similar standards set forth above, except
that
no indemnification may be made in respect of any claim, issue or matter
as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that a court of appropriate jurisdiction
in which
such action or suit was brought shall determine that despite the adjudication
of
liability, such person is fairly and reasonably entitled to be indemnified
for
such expenses which such court shall deem proper.
Article
8
of Berry Plastics Holding Corporation’s Certificate of Incorporation, as
amended, provides for the indemnification of directors, officers, employees
or
agents to the fullest extent authorized by the DGCL. Article 8 also provides
that, in any action initiated by a person seeking indemnification, Berry
Plastics Holding Corporation shall bear the burden of proof that the person
is
not entitled to indemnification.
Section
102(b)(7) of the DGCL provides that a Delaware corporation may, with certain
limitations, set forth in its certificate of incorporation a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of a fiduciary duty
as a
director, provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director’s duty of loyalty to
the registrant 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 DGCL or (iv) for any transaction from which the
director derived an improper personal benefit. Article 8 of Berry Plastics
Holding Corporation’s Certificate of Incorporation, as amended, includes such a
provision.
Section
145(g) of the DGCL provides that a Delaware corporation has the power to
purchase and maintain insurance on behalf of any director, officer, employee
or
other agent of the corporation or, if serving in such capacity at the request
of
the corporation, of another enterprise, against any liability asserted
against
such person and incurred by such person in any such capacity, or arising
out of
such person’s status as such, whether or not the corporation
has
the
power to indemnify such person against such liability under the DGCL. Article
8
of Berry Plastics Holding Corporation’s Certificate of Incorporation, as
amended, permits the corporation to maintain insurance, at the corporation’s
expense, to protect itself or any of its directors, officers, employees
or
agents or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not
the
corporation would have the power to indemnify such person against such
expense,
liability or loss under the DGCL.
Item
21.
Exhibits and Financial Statement Schedules.
(a)
Exhibits
EXHIBITS
Exhibit
No.
|
Description
of Exhibit
|
|
|
2.1
|
Agreement
and Plan of Merger by and among Berry Plastics Holding Corporation,
BPC
Holding Acquisition Corp. (now known as Berry Plastics Group,
Inc.), and
BPC Acquisition Corp., dated June 28, 2006 (incorporated herein
by
reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed
with the SEC on July 3, 2006).
|
3.1*
|
Amended
and Restated Certificate of Incorporation of Berry Plastics Holding
Corporation
|
3.2*
|
Certificate
of Amendment to the Amended and Restated Certificate of Incorporation
of
Berry Plastics Holding Corporation
|
3.3*
|
Amended
and Restated By-laws of Berry Plastics Holding
Corporation
|
3.4*
|
Board
Consent amending the Amended and Restated By-laws of BPC Holding
Corporation, dated October 24, 2006.
|
4.1*
|
Indenture,
by and between BPC Acquisition Corp. (and following the merger
of BPC
Acquisition Corp. with and into BPC Holding Corporation, BPC
Holding
Corporation, as Issuer, and certain Guarantors) and Wells Fargo
Bank,
National Association, as Trustee, relating to $525,000,000 8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014 and
$225,000,000
Second Priority Senior Secured Floating Rate Notes due 2014,
dated as of
September 20, 2006
|
4.2*
|
First
Supplemental Indenture, by and among BPC Holding Corporation,
certain
guarantors, BPC Acquisition Corp., and Wells Fargo Bank, National
Association, as Trustee, dated as of September 20, 2006
|
4.3*
|
Registration
Rights Agreement, by and among BPC Acquisition Corp., BPC Holding
Corporation, the subsidiaries of BPC Holding Corporation, Deutsche
Bank
Securities Inc., Credit Suisse Securities (USA) LLC, Citigroup
Global
Markets Inc., J.P. Morgan Securities Inc., Banc of America Securities
LLC,
Lehman Brothers Inc., Bear, Stearns & Co., and GE Capital Markets,
Inc., dated as of September 20,
2006
|
4.4*
|
Collateral
Agreement, by and among BPC Acquisition Corp., as Borrower, each
Subsidiary of the Borrower identified therein, and Wells Fargo
Bank, N.A.,
as Collateral Agent, dated as of September 20, 2006
|
4.5*
|
Intercreditor
Agreement by and among Credit Suisse, Cayman Islands Branch (“Credit
Suisse”), as First Lien Agent, Wells Fargo Bank, N.A., as Trustee, Berry
Plastics Group, Inc., BPC Acquisition Corp., (which on the Closing
Date
was merged with and into BPC Holding Corporation, with BPC Holding
Corporation surviving the merger as the Borrower), and each Subsidiary
of
the Borrower identified therein, dated as of September 20,
2006.
|
5.1*
|
Opinion
of Jeffrey D. Thompson, Vice President and General Counsel of
Berry
Plastics Holding Corporation
|
10.1*
|
Credit
Agreement, by and among Berry Plastics Group, Inc., BPC Acquisition
Corp.,
as Borrower, the Lenders Party thereto, Credit Suisse, Cayman
Islands
Branch, as Administrative Agent, Citicorp North America, Inc.,
as
Syndication Agent, Deutsche Bank Securities Inc. and J.P. Morgan
Securities Inc., as Co-Documentation Agents, Credit Suisse Securities
(USA) LLC, Deutsche Bank Securities, Inc., J.P. Morgan Securities
Inc. and
Citigroup Global Markets Inc., as Joint Bookrunners, Credit Suisse
Securities (USA) LLC and Citigroup Global Markets Inc., as Joint
Lead
Arrangers, dated as of September 20, 2006
|
10.2*
|
Guarantee
& Collateral Agreement, by and among Berry Plastics Group, Inc.,
BPC
Acquisition Corp. as Borrower (which on the Closing Date was
merged with
and into BPC Holding Corporation, with BPC Holding Corporation
surviving
the merger as the Borrower), each Subsidiary of the Borrower
acting as a
guarantor, and Credit Suisse, Cayman Islands Branch, as Administrative
Agent, dated as of September 20, 2006
|
10.3*
|
Note
Purchase Agreement, among BPC Acquisition Corp. and Goldman,
Sachs &
Co., as Initial Purchaser, and GSMP 2006 Onshore US, Ltd., GSMP
2006
Offshore US, Ltd., GSMP 2006 Institutional US, Ltd., GS Mezzanine
Partners
2006 Institutional, L.P., as Subsequent Purchasers, relating
to
$425,000,000 Senior Subordinated Notes due 2016, dated as of
September 20,
2006
|
10.4*
|
Indenture,
by and between BPC Acquisition Corp. (and following the merger
of BPC
Acquisition Corp. with and into BPC Holding Corporation, BPC
Holding
Corporation, as Issuer, and certain Guarantors) and Wells Fargo
Bank,
National Association, as Trustee, relating to 11% Senior Subordinated
Notes due 2016, dated as of September 20, 2006
|
10.5*
|
First
Supplemental Indenture, by and among BPC Holding Corporation,
certain
guarantors, BPC Acquisition Corp., and Wells Fargo Bank, National
Association, as Trustee, dated as of September 20, 2006
|
10.6*
|
Exchange
and Registration Rights Agreement, by and among BPC Acquisition
Corp. and
Goldman, Sachs & Co., GSMP 2006 Onshore US, Ltd., GSMP 2006 Offshore
US, Ltd., and GSMP 2006 Institutional US, Ltd., dated as of September
20,
2006
|
10.7*
|
Management
Agreement, among Berry Plastics Corporation, Berry Plastics Group,
Inc.,
Apollo Management VI, L.P., and Graham Partners, INC., dated
as of
September 20, 2006
|
10.8*
|
2006
Equity Incentive Plan
|
10.9*
|
Form
of Performance-Based Stock Option Agreement of Berry Plastics Group,
Inc.
|
10.10*
|
Form
of Accreting Stock Option Agreement of Berry Plastics Group,
Inc.
|
10.11*
|
Form
of Time-Based Stock Option Agreement of Berry Plastics Group,
Inc.
|
10.12*
|
Form
of Performance-Based Stock Appreciation Rights Agreement of Berry
Plastics
Group, Inc.
|
10.13*
|
Employment
Agreement, dated September 20, 2006, between Berry Plastics Corporation
and Ira G. Boots
|
10.14*
|
Employment
Agreement, dated September 20, 2006, between Berry Plastics Corporation
and James M. Kratochvil
|
10.15*
|
Employment
Agreement, dated September 20, 2006, between Berry Plastics Corporation
and R. Brent Beeler
|
10.16
|
Employment
Agreement, dated November 22, 1999 between Berry Plastics Corporation
and
G. Adam Unfried (incorporated herein by reference to Exhibit
10.23 of the
Company’s Current Annual Report on Form 10-K filed with the SEC on March
22, 2006).
|
10.17
|
Amendment
No. 1 to Employment Agreement, dated November 22, 1999 between
Berry
Plastics Corporation and G. Adam Unfried dated November 23, 2004
(incorporated herein by reference to Exhibit 10.24 of the Company’s
Current Annual Report on Form 10-K filed with the SEC on March
22,
2006).
|
10.18
|
Amendment
No. 2 to Employment Agreement, dated November 22, 1999 between
Berry
Plastics Corporation and G. Adam Unfried dated March 10, 2006
(incorporated herein by reference to Exhibit 10.25 of the Company’s
Current Annual Report on Form 10-K filed with the SEC on March
22,
2006).
|
10.19*
|
Amendment
No. 3 to Employment Agreement, dated November 22, 1999 between
Berry
Plastics Corporation and G. Adam Unfried dated September 20,
2006.
|
10.20
|
Employment
Agreement, dated October 4, 1996 between Berry Plastics Corporation
and
Randall J. Hobson (incorporated herein by reference to Exhibit
10.21 of
the Company’s Current Annual Report on Form 10-K filed with the SEC on
March 22, 2006).
|
10.21
|
Amendment
No. 1 to Employment Agreement, dated October 4, 1996, between
Berry
Plastics Corporation and Randall J. Hobson, dated June 30, 2001
(incorporated herein by reference to Exhibit 10.22 of the Company’s
Current Annual Report on Form 10-K filed with the SEC on March
22,
2006).
|
10.22*
|
Amendment
No. 2 to Employment Agreement, dated October 4, 1996, between
Berry
Plastics Corporation and Randall J. Hobson, dated September 20,
2006
|
12.1*
|
Computation
of Ratio of Earnings to Fixed Charges
|
21.1*
|
Subsidiaries
of the Registrant
|
23.1
|
Consent
of Jeffrey D. Thompson, Vice President and General Counsel of
Berry
Plastics Holding Corporation (incorporated herein by reference
to Exhibit
5.1)
|
23.2*
|
Consent
of Ernst & Young LLP, Independent Registered Public Accounting Firm
|
24.1*
|
Power
of Attorney (included on signature Pages attached
hereto)
|
25.1*
|
Statement
of Eligibility on Form T−1 of Wells Fargo Bank, N.A.
|
99.1*
|
Form
of Notice of Guaranteed Delivery
|
99.2*
|
Form
of Letter of Transmittal
|
_______________
*
filed
herewith
(b)
Financial Statement Schedules
No
financial statement schedules are included herein. All other schedules
for which
provision is made in the applicable accounting regulation of the SEC are
not
required under the related instructions, are inapplicable, or the information
is
included in the consolidated financial statements, and have therefore been
omitted.
(c)
Reports, Opinions and Appraisals
None.
Item
22. Undertakings
The
undersigned registrants hereby undertake:
(a)
|
(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 the 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 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in
the effective registration statement; and
|
|
(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 therein,
and the
offering of such securities at that 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.
|
(4)
|
That,
for the purpose of determining liability under the Securities Act
of 1933
to any purchaser, if the registrants are subject to Rule 430C,
each
prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance
on Rule
430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness.
Provided,
however
,
that no statement made in a registration statement or prospectus
that is
part of the registration statement or made in a document incorporated
or
deemed incorporated by reference into the registration statement
or
prospectus that is part of the registration statement will, as
to a
purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement
or
made in any such document immediately prior to such date of first
use;
|
(5)
|
That,
for the purpose of determining liability of the registrants under
the
Securities Act of 1933 to any purchaser in the initial distribution
of the
securities: The undersigned registrants undertake that in a primary
offering of securities of the undersigned registrants pursuant
to this
registration statement, regardless of the underwriting method used
to sell
the securities to the purchaser, if the securities are offered
or sold to
such purchaser by means of any of the following communications,
the
undersigned registrants will be sellers to the purchaser and will
be
considered to offer or sell such securities to such
purchaser:
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrants
relating to the offering required to be filed pursuant to Rule
424;
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by
or on behalf
of the undersigned registrants or used or referred to by the
undersigned
registrants;
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the
offering
containing material information about the undersigned registrants
or their
securities provided by or on behalf of the undersigned registrants;
and
|
|
(iv)
|
Any
other communication that is an offer in the offering made by
the
undersigned registrants to the purchaser.
|
|
(6)
|
The
undersigned registrants hereby undertake to supply by means of
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.
|
Insofar
as indemnification for liabilities arising under the Securities Act of
1933 may
be permitted to directors, officers and controlling persons of the registrants
pursuant to the foregoing provisions, or otherwise, the registrants have
been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act 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 director, officer or controlling person of a 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 Act and will be governed by final adjudication
of
such issue.
SIGNATURES
- BERRY PLASTICS HOLDING CORPORATION
Pursuant
to the requirements of the Securities Act of 1933, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, State
of
Indiana, on November 2 , 2006.
BERRY
PLASTICS HOLDING CORPORATION
By:
|
|
/s/
Ira G. Boots
Name:
Ira G. Boots
Title:
President, Director and Chief Executive
Officer
|
POWER
OF ATTORNEY
Each
person whose signature appears below constitutes and appoints Ira G. Boots
and
James M. Kratochvil and each of them, his true and lawful attorneys-in-fact
and
agents, each with full power of substitution and resubstitution, severally,
for
him and in his name, place and stead, in any and all capacities, to sign
any and
all amendments (including post-effective amendments) to this 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 substitute
or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature
|
|
Title
|
|
Date
|
/s/
Ira G. Boots
(Ira
G. Boots)
|
|
Chief
Executive Officer, Director and President
|
|
November
2, 2006
|
/
s/
Anthony M. Civale
(Anthony
M. Civale)
|
|
Director
|
|
November
2, 2006
|
/
s/
Robert V. Seminara
(Robert
V. Seminara)
|
|
Director
|
|
November
2, 2006
|
/
s/
James M. Kratochvil
(James
M. Kratochvil)
|
|
Chief
Financial Officer, Treasurer, Secretary and Executive
Vice-President
|
|
November
2, 2006
|
SIGNATURES
- ADDITIONAL REGISTRANT GUARANTORS SIGNATURE
Pursuant
to the requirements of the Securities Act of 1933, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, State
of
Indiana, on November 2 , 2006.
Each
Additional Registrant Guarantor
By:
|
|
/s/
Ira G. Boots
Name:
Ira G. Boots
Title:
(1)
|
POWER
OF ATTORNEY
Each
person whose signature appears below constitutes and appoints Ira G. Boots
and
James M. Kratochvil and each of them, his true and lawful attorneys-in-fact
and
agents, each with full power of substitution and resubstitution, severally,
for
him and in his name, place and stead, in any and all capacities, to sign
any and
all amendments (including post-effective amendments) to this 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 substitute
or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature
|
|
Title
|
|
Date
|
/s/
Ira G. Boots
(Ira
G. Boots)
|
|
(1)
|
|
November
2, 2006
|
/
s/
Anthony M. Civale
(Anthony
M. Civale)
|
|
(2)
|
|
November
2, 2006
|
/
s/
Robert V. Seminara
(Robert
V. Seminara)
|
|
(3)
|
|
November
2, 2006
|
/
s/
James M. Kratochvil
(James
M. Kratochvil)
|
|
(4)
|
|
November
2, 2006
|
/
s/
R. Brent Beeler
(R.
Brent Beeler)
|
|
(5)
|
|
November
2, 2006
|
(1)
|
Ira
G. Boots has signed this registration statement as: Chief Executive
Officer, Director and President of Berry Plastics Corporation,
Aerocon,
Inc., Berry Iowa Corporation, Berry Plastics Design Corporation,
Berry
Plastics Technical Services, Inc., Berry Sterling Corporation,
CPI Holding
Corporation, Knight Plastics, Inc., Packerware Corporation, Pescor,
Inc.,
Poly-Seal Corporation, Venture Packaging, Inc., Venture Packaging
Midwest,
Inc., Berry Plastics Acquisition Corporation III, Berry Plastics
Acquisition Corporation V, Berry Plastics Acquisition Corporation
VII,
Berry Plastics Acquisition Corporation VIII, Berry Plastics Acquisition
Corporation IX, Berry Plastics Acquisition Corporation X, Berry
Plastics
Acquisition Corporation XI, Berry Plastics Acquisition Corporation
XII,
Berry Plastics Acquisition Corporation XIII, Saffron Acquisition
Corporation, Sun Coast Industries, Inc., Cardinal Packaging, Inc.,
Landis
Plastics, Inc., Kerr Group, Inc., for itself and as sole member
of Tubed
Products, LLC and Setco, LLC; and as a manager of Berry Plastics
Acquisition Corporation XV, LLC.
|
(2)
|
Anthony
M. Civale has signed this registration statement as Director of
Berry
Plastics Corporation.
|
(3)
|
Robert
V. Seminara has signed this registration statement as Director
of Berry
Plastics Corporation.
|
(4)
|
James
M. Kratochvil has signed this registration statement as Chief Financial
Officer, Treasurer, Secretary and Executive Vice-President of Berry
Plastics Corporation, Aerocon, Inc., Berry Iowa Corporation, Berry
Plastics Design Corporation, Berry Plastics Technical Services,
Inc.,
Berry Sterling Corporation, CPI Holding Corporation, Knight Plastics,
Inc., Packerware Corporation, Pescor, Inc., Poly-Seal Corporation,
Venture
Packaging, Inc., Venture Packaging Midwest, Inc., Berry Plastics
Acquisition Corporation III, Berry Plastics Acquisition Corporation
V,
Berry Plastics Acquisition Corporation VII, Berry Plastics Acquisition
Corporation VIII, Berry Plastics Acquisition Corporation IX, Berry
Plastics Acquisition Corporation X, Berry Plastics Acquisition
Corporation
XI, Berry Plastics Acquisition Corporation XII, Berry Plastics
Acquisition
Corporation XIII, Saffron Acquisition Corporation, Sun Coast Industries,
Inc., Cardinal Packaging, Inc., Landis Plastics, Inc., Kerr Group,
Inc.,
for itself and as sole member of Tubed Products, LLC and Setco,
LLC; and
as a manager of Berry Plastics Acquisition Corporation XV,
LLC.
|
(5)
|
R.
Brent Beeler has signed this registration statement as: Executive
Vice-President and Chief Operating Officer of Berry Plastics Corporation,
Aerocon, Inc., Berry Iowa Corporation, Berry Plastics Design Corporation,
Berry Plastics Technical Services, Inc., Berry Sterling Corporation,
CPI
Holding Corporation, Knight Plastics, Inc., Packerware Corporation,
Pescor, Inc., Poly-Seal Corporation, Venture Packaging, Inc., Venture
Packaging Midwest, Inc., Berry Plastics Acquisition Corporation
III, Berry
Plastics Acquisition Corporation V, Berry Plastics Acquisition
Corporation
VII, Berry Plastics Acquisition Corporation VIII, Berry Plastics
Acquisition Corporation IX, Berry Plastics Acquisition Corporation
X,
Berry Plastics Acquisition Corporation XI, Berry Plastics Acquisition
Corporation XII, Berry Plastics Acquisition Corporation XIII, Saffron
Acquisition Corporation, Sun Coast Industries, Inc., Cardinal Packaging,
Inc., Landis Plastics, Inc. and Kerr Group, Inc., for itself and
as sole
member of Tubed Products, LLC and Setco, LLC.
|
EXHIBITS
Exhibit
No.
|
Description
of Exhibit
|
|
|
2.1
|
Agreement
and Plan of Merger by and among Berry Plastics Holding Corporation,
BPC
Holding Acquisition Corp. (now known as Berry Plastics Group,
Inc.), and
BPC Acquisition Corp., dated June 28, 2006 (incorporated herein
by
reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed
with the SEC on July 3, 2006).
|
3.1*
|
Amended
and Restated Certificate of Incorporation of Berry Plastics Holding
Corporation
|
3.2*
|
Certificate
of Amendment to the Amended and Restated Certificate of Incorporation
of
Berry Plastics Holding Corporation
|
3.3*
|
Amended
and Restated By-laws of Berry Plastics Holding
Corporation
|
3.4*
|
Board
Consent amending the Amended and Restated By-laws of BPC Holding
Corporation, dated October 24, 2006.
|
4.1*
|
Indenture,
by and between BPC Acquisition Corp. (and following the merger
of BPC
Acquisition Corp. with and into BPC Holding Corporation, BPC
Holding
Corporation, as Issuer, and certain Guarantors) and Wells Fargo
Bank,
National Association, as Trustee, relating to $525,000,000 8
7
/
8
%
Second Priority Senior Secured Fixed Rate Notes due 2014 and
$225,000,000
Second Priority Senior Secured Floating Rate Notes due 2014,
dated as of
September 20, 2006
|
4.2*
|
First
Supplemental Indenture, by and among BPC Holding Corporation,
certain
guarantors, BPC Acquisition Corp., and Wells Fargo Bank, National
Association, as Trustee, dated as of September 20, 2006
|
4.3*
|
Registration
Rights Agreement, by and among BPC Acquisition Corp., BPC Holding
Corporation, the subsidiaries of BPC Holding Corporation, Deutsche
Bank
Securities Inc., Credit Suisse Securities (USA) LLC, Citigroup
Global
Markets Inc., J.P. Morgan Securities Inc., Banc of America Securities
LLC,
Lehman Brothers Inc., Bear, Stearns & Co., and GE Capital Markets,
Inc., dated as of September 20, 2006
|
4.4*
|
Collateral
Agreement, by and among BPC Acquisition Corp., as Borrower, each
Subsidiary of the Borrower identified therein, and Wells Fargo
Bank, N.A.,
as Collateral Agent, dated as of September 20, 2006
|
4.5*
|
Intercreditor
Agreement by and among Credit Suisse, Cayman Islands Branch (“Credit
Suisse”), as First Lien Agent, Wells Fargo Bank, N.A., as Trustee, Berry
Plastics Group, Inc., BPC Acquisition Corp., (which on the Closing
Date
was merged with and into BPC Holding Corporation, with BPC Holding
Corporation surviving the merger as the Borrower), and each Subsidiary
of
the Borrower identified therein, dated as of September 20,
2006.
|
5.1*
|
Opinion
of Jeffrey D. Thompson, Vice President and General Counsel of
Berry
Plastics Holding Corporation
|
10.1*
|
Credit
Agreement, by and among Berry Plastics Group, Inc., BPC Acquisition
Corp.,
as Borrower, the Lenders Party thereto, Credit Suisse, Cayman
Islands
Branch, as Administrative Agent, Citicorp North America, Inc.,
as
Syndication Agent, Deutsche Bank Securities Inc. and J.P. Morgan
Securities Inc., as Co-Documentation Agents, Credit Suisse Securities
(USA) LLC, Deutsche Bank Securities, Inc., J.P. Morgan Securities
Inc. and
Citigroup Global Markets Inc., as Joint Bookrunners, Credit Suisse
Securities (USA) LLC and Citigroup Global Markets Inc., as Joint
Lead
Arrangers, dated as of September 20, 2006
|
10.2*
|
Guarantee
& Collateral Agreement, by and among Berry Plastics Group, Inc.,
BPC
Acquisition Corp. as Borrower (which on the Closing Date was
merged with
and into BPC Holding Corporation, with BPC Holding Corporation
surviving
the merger as the Borrower), each Subsidiary of the Borrower
acting as a
guarantor, and Credit Suisse, Cayman Islands Branch, as Administrative
Agent, dated as of September 20, 2006
|
10.3*
|
Note
Purchase Agreement, among BPC Acquisition Corp. and Goldman,
Sachs &
Co., as Initial Purchaser, and GSMP 2006 Onshore US, Ltd., GSMP
2006
Offshore US, Ltd., GSMP 2006 Institutional US, Ltd., GS Mezzanine
Partners
2006 Institutional, L.P., as Subsequent Purchasers, relating
to
$425,000,000 Senior Subordinated Notes due 2016, dated as of
September 20,
2006
|
10.4*
|
Indenture,
by and between BPC Acquisition Corp. (and following the merger
of BPC
Acquisition Corp. with and into BPC Holding Corporation, BPC
Holding
Corporation, as Issuer, and certain Guarantors) and Wells Fargo
Bank,
National Association, as Trustee, relating to 11% Senior Subordinated
Notes due 2016, dated as of September 20, 2006
|
10.5*
|
First
Supplemental Indenture, by and among BPC Holding Corporation,
certain
guarantors, BPC Acquisition Corp., and Wells Fargo Bank, National
Association, as Trustee, dated as of September 20, 2006
|
10.6*
|
Exchange
and Registration Rights Agreement, by and among BPC Acquisition
Corp. and
Goldman, Sachs & Co., GSMP 2006 Onshore US, Ltd., GSMP 2006 Offshore
US, Ltd., and GSMP 2006 Institutional US, Ltd., dated as of September
20,
2006
|
10.7*
|
Management
Agreement, among Berry Plastics Corporation, Berry Plastics Group,
Inc.,
Apollo Management VI, L.P., and Graham Partners, INC., dated
as of
September 20, 2006
|
10.8*
|
2006
Equity Incentive Plan
|
10.9*
|
Form
of Performance-Based Stock Option Agreement of Berry Plastics Group,
Inc.
|
10.10*
|
Form
of Accreting Stock Option Agreement of Berry Plastics Group,
Inc.
|
10.11*
|
Form
of Time-Based Stock Option Agreement of Berry Plastics Group,
Inc.
|
10.12*
|
Form
of Performance-Based Stock Appreciation Rights Agreement of Berry
Plastics
Group, Inc.
|
10.13*
|
Employment
Agreement, dated September 20, 2006, between Berry Plastics Corporation
and Ira G. Boots
|
10.14*
|
Employment
Agreement, dated September 20, 2006, between Berry Plastics Corporation
and James M. Kratochvil
|
10.15*
|
Employment
Agreement, dated September 20, 2006, between Berry Plastics Corporation
and R. Brent Beeler
|
10.16
|
Employment
Agreement, dated November 22, 1999 between Berry Plastics Corporation
and
G. Adam Unfried (incorporated herein by reference to Exhibit
10.23 of the
Company’s Current Annual Report on Form 10-K filed with the SEC on March
22, 2006).
|
10.17
|
Amendment
No. 1 to Employment Agreement, dated November 22, 1999 between
Berry
Plastics Corporation and G. Adam Unfried dated November 23, 2004
(incorporated herein by reference to Exhibit 10.24 of the Company’s
Current Annual Report on Form 10-K filed with the SEC on March
22,
2006).
|
10.18
|
Amendment
No. 2 to Employment Agreement, dated November 22, 1999 between
Berry
Plastics Corporation and G. Adam Unfried dated March 10, 2006
(incorporated herein by reference to Exhibit 10.25 of the Company’s
Current Annual Report on Form 10-K filed with the SEC on March
22,
2006).
|
10.19*
|
Amendment
No. 3 to Employment Agreement, dated November 22, 1999 between
Berry
Plastics Corporation and G. Adam Unfried dated September 20,
2006.
|
10.20
|
Employment
Agreement, dated October 4, 1996 between Berry Plastics Corporation
and
Randall J. Hobson (incorporated herein by reference to Exhibit
10.21 of
the Company’s Current Annual Report on Form 10-K filed with the SEC on
March 22, 2006).
|
10.21
|
Amendment
No. 1 to Employment Agreement, dated October 4, 1996, between
Berry
Plastics Corporation and Randall J. Hobson, dated June 30, 2001
(incorporated herein by reference to Exhibit 10.22 of the Company’s
Current Annual Report on Form 10-K filed with the SEC on March
22,
2006).
|
10.22*
|
Amendment
No. 2 to Employment Agreement, dated October 4, 1996, between
Berry
Plastics Corporation and Randall J. Hobson, dated September 20,
2006
|
12.1*
|
Computation
of Ratio of Earnings to Fixed Charges
|
21.1*
|
Subsidiaries
of the Registrant
|
23.1
|
Consent
of Jeffrey D. Thompson, Vice President and General Counsel of
Berry
Plastics Holding Corporation (incorporated herein by reference
to Exhibit
5.1)
|
23.2*
|
Consent
of Ernst & Young LLP, Independent Registered Public Accounting Firm
|
24.1*
|
Power
of Attorney (included on signature Pages attached
hereto)
|
25.1*
|
Statement
of Eligibility on Form T−1 of Wells Fargo Bank, N.A.
|
99.1*
|
Form
of Notice of Guaranteed Delivery
|
99.2*
|
Form
of Letter of Transmittal
|
AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION
OF
BPC
HOLDING CORPORATION
ARTICLE
I
The
name of
the corporation (which is hereinafter referred to as the "Corporation")
is:
BPC
HOLDING CORPORATION
ARTICLE
II
The
address
of the Corporation's registered office in the State of Delaware is c/o The
Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County
of New Castle, State of Delaware 19801. The name of the Corporation's registered
agent at such address is The Corporation Trust Company.
ARTICLE
III
The
purpose
of the Corporation shall be to engage in any lawful act or activity for which
corporations may be organized and incorporated under the General Corporation
Law
of the State of Delaware.
ARTICLE
IV
Section
1.
The
Corporation shall be authorized to issue 100 shares of capital stock, of
which
100 shares shall be shares of Common Stock, $0.01 par value ("Common
Stock").
Section
2.
Except
as otherwise provided by law, the Common Stock shall have the exclusive right
to
vote for the election of directors and for all other purposes. Each share
of
Common Stock shall have one vote, and the Common Stock shall vote together
as a
single class.
ARTICLE
V
Unless
and
except to the extent that the Bylaws of the Corporation shall so require,
the
election of directors of the Corporation need not be by written
ballot.
ARTICLE
VI
In
furtherance and not in limitation of the powers conferred by law, the Board
of
Directors of the Corporation (the "Board") is expressly authorized and empowered
to make, alter and repeal the Bylaws of the Corporation by a majority vote
at
any regular or special meeting of the Board or by written consent, subject
to
the power of the stockholders of the Corporation to alter or repeal any Bylaws
made by the Board.
ARTICLE
VII
The
Corporation reserves the right at any time from time to time to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
and any other provisions authorized by the laws of the State of Delaware
at the
time in force may be added or inserted, in the manner now or hereafter
prescribed by law; and all rights, preferences and privileges of whatsoever
nature conferred upon stockholders, directors or any other persons whomsoever
by
and pursuant to this Certificate of Incorporation in its present form or
as
hereafter amended are granted subject to the right reserved in this
Article.
ARTICLE
VIII
Section
1.
Elimination
of Certain Liability of Directors
. A director of the Corporation shall not
be personally liable to the Corporation or its stockholders for monetary
damages
for breach of fiduciary duty as a director, except to the extent such exemption
from liability or limitation thereof is not permitted under the General
Corporation Law of the State of Delaware as the same exists or may hereafter
be
amended.
Any
repeal or
modification of the foregoing paragraph shall not adversely affect any right
or
protection of a director of the Corporation existing hereunder with respect
to
any act or omission occurring prior to such repeal or modification.
Section
2.
Indemnification
and Insurance.
(a)
Right
to
Indemnification. 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
or
agent of another corporation or of a partnership, joint venture, trust or
other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as
a
director, officer, employee or agent or in any other capacity while serving
as a
director, officer, employee or agent, shall be indemnified and held harmless
by
the Corporation to the fullest extent authorized 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, to the fullest extent permitted by law,
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,
judgments, fines, amounts paid or to be paid in settlement, and excise taxes
or
penalties arising under the Employee Retirement Income Security Act of 1974)
reasonably incurred or suffered by such person in connection therewith and
such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators;
provided
,
however
, that, except as
provided in paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in this Section
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;
provided
,
however
, that, if the General
Corporation Law of the State of Delaware requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered
by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined that such director or officer
is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of the Board, provide indemnification to employees
and agents of the Corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
(b)
Right
of Claimant to Bring Suit
. If a claim under paragraph (a) of this Section is
not paid in full by the Corporation within thirty days after a written claim
has
been received by the Corporation, the claimant may at any time thereafter
bring
suit against the Corporation to recover the unpaid amount of the claim and,
if
successful in whole or in part, the claimant shall be entitled to be paid
also
the expense of prosecuting such claim. 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 is required, 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 proving
such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board, 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, 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.
(c)
Non
Exclusivity of Rights
. The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this Section 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.
(d)
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
such expense, liability or loss, whether or not the Corporation would have
the
power to indemnify such person against such expense, liability or loss under
the
General Corporation Law of the State of Delaware.
CERTIFICATE
OF AMENDMENT OF AMENDED
AND
RESTATED CERTIFICATE OF INCORPORATION
OF
BPC
HOLDING CORPORATION
BPC
Holding Corporation (hereinafter called the “corporation”), a corporation
organized and existing under and by virtue of the General Corporation Law of
the
State of Delaware, does hereby certify:
1.
The
name of the corporation is BPC Holding Corporation.
2.
The
amended and restated certificate of incorporation of the corporation is hereby
amended by striking out Article I thereof and by substituting in lieu of said
Article the following new Article:
The
name
of the corporation (which is hereinafter referred to as the “Corporation”) is:
BERRY
PLASTICS HOLDING CORPORATION
3.
The
amendment of the amended and restated certificate of incorporation of the
corporation herein certified was duly adopted, pursuant to the provisions of
Sections 228 and 242 of the General Corporation Law of the State of Delaware.
Executed
on this 24th day of October, 2006.
___________________________________
Ira
G.
Boots
President,
Director and Chief Executive Officer
AMENDED
AND RESTATED BY-LAWS
OF
BPC
HOLDING CORPORATION
ARTICLE
I
OFFICES
SECTION
1.01
REGISTE
RED
OFFICE -- The registered office of BPC Holding Corporation (the “Corporation”)
shall be established and maintained at the office of The Corporation Trust
Company,
The
Corporation Trust Center, 1209 Orange Street Wilmington, County of New Castle,
Delaware 19801
,
and The
Corporation Trust Company shall be the registered agent of the Corporation
in
charge thereof.
SECTION
1.02
OTHER
OFFICES -- The Corporation may have other offices, either within or without
the
State of Delaware, at such place or places as the Board of Directors may from
time to time select or the business of the Corporation may require.
ARTICLE
II
MEETINGS
OF STOCKHOLDERS
SECTION
2.01
ANNUAL
MEETINGS -- Annual meetings of stockholders for the election of directors,
and
for such other business as may be stated in the notice of the meeting, shall
be
held at such place, either within or without the State of Delaware, and at
such
time and date as the Board of Directors, by resolution, shall determine and
as
set forth in the notice of the meeting. At each annual meeting, the stockholders
entitled to vote shall elect a Board of Directors and they may transact such
other corporate business as shall be stated in the notice of the
meeting.
SECTION
2.02
SPECIAL
MEETINGS -- Special meetings of the stockholders for any purpose or purposes
may
be called by the Chairman of the Board, the President or the Secretary, or
by
resolution of the Board of Directors.
SECTION
2.03
VOTING
--
Each stockholder entitled to vote in accordance with the terms of the Amended
and Restated Certificate of Incorporation of the Corporation and these Amended
and Restated By-Laws may vote in person or by proxy, but no proxy shall be
voted
after three years from its date unless such proxy provides for a longer period.
All elections for directors shall be decided by plurality vote; all other
questions shall be decided by majority vote except as otherwise provided by
the
Amended and Restated Certificate of Incorporation or the laws of the State
of
Delaware.
A
complete list of the stockholders entitled to vote at the meeting, arranged
in
alphabetical order, with the address of each, and the number of shares held
by
each, 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
ten 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
entitled to be present.
SECTION
2.04
QUORUM
--
Except as otherwise required by law, by the Amended and Restated Certificate
of
Incorporation of the Corporation or by these Amended and Restated By-Laws,
the
presence, in person or by proxy, of stockholders holding shares constituting
a
majority of the voting power of the Corporation shall constitute a quorum at
all
meetings of the stockholders. In case a quorum shall not be present at any
meeting, a majority in interest of the stockholders entitled to vote thereat,
present in person or by proxy, shall have the power to adjourn the meeting
from
time to time, without notice other than announcement at the meeting, until
the
requisite amount of stock entitled to vote shall be present. At any such
adjourned meeting at which the requisite amount of stock entitled to vote shall
be represented, any business may be transacted that might have been transacted
at the meeting as originally noticed; but only those stockholders entitled
to
vote at the meeting as originally noticed shall be entitled to vote at any
adjournment or adjournments thereof.
SECTION
2.05
NOTICE
OF
MEETINGS -- Written notice, stating the place, date and time of the meeting,
and
the general nature of the business to be considered, shall be given to each
stockholder entitled to vote thereat, at his or her address as it appears on
the
records of the Corporation, not less than ten nor more than sixty days before
the date of the meeting. No business other than that stated in the notice shall
be transacted at any meeting without the unanimous consent of all the
stockholders entitled to vote thereat.
SECTION
2.06
ACTION
WITHOUT MEETING -- Unless otherwise provided by the Amended and Restated
Certificate of Incorporation of the Corporation, any action required or
permitted to be taken at any annual or special meeting of stockholders may
be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, 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. 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.
ARTICLE
III
DIRECTORS
SECTION
3.01
NUMBER
AND TERM -- The business and affairs of the Corporation shall be managed under
the direction of a Board of Directors which shall consist of not less than
one
person. The exact number of directors shall initially be two and may thereafter
be fixed from time to time by the Board of Directors. Directors shall be elected
at the annual meeting of stockholders and each director shall be elected to
serve until his or her successor shall be elected and shall qualify. A director
need not be a stockholder.
SECTION
3.02
RESIGNATIONS
-- Any director may resign at any time. Such resignation shall be made in
writing, and shall take effect at the time specified therein, and if no time
be
specified, at the time of its receipt by the Chairman of the Board, the
President or the Secretary. The acceptance of a resignation shall not be
necessary to make it effective.
SECTION
3.03
VACANCIES
-- If the office of any director becomes vacant, the remaining directors in
the
office, though less than a quorum, by a majority vote, may appoint any qualified
person to fill such vacancy, who shall hold office for the unexpired term and
until his or her successor shall be duly chosen. If the office of any director
becomes vacant and there are no remaining directors, the stockholders, by the
affirmative vote of the holders of shares constituting a majority of the voting
power of the Corporation, at a special meeting called for such purpose, may
appoint any qualified person to fill such vacancy.
SECTION
3.04
REMOVAL
-- Except as hereinafter provided, any director or directors may be removed
either for or without cause at any time by the affirmative vote of the holders
of a majority of the voting power entitled to vote for the election of
directors, at an annual meeting or a special meeting called for the purpose,
and
the vacancy thus created may be filled, at such meeting, by the affirmative
vote
of holders of shares constituting a majority of the voting power of the
Corporation.
SECTION
3.05
COMMITTEES
-- The Board of Directors may, by resolution or resolutions passed by a majority
of the whole Board of Directors, designate one or more committees, each
committee to consist of one or more directors of the Corporation.
Any
such
committee, to the extent provided in the resolution of the Board of Directors,
or in these Amended and Restated By-Laws, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation, and may authorize the seal of the Corporation
to
be affixed to all papers which may require it.
SECTION
3.06
MEETINGS
-- The newly elected directors may hold their first meeting for the purpose
of
organization and the transaction of business, if a quorum be present,
immediately after the annual meeting of the stockholders; or the time and place
of such meeting may be fixed by consent of all the Directors.
Regular
meetings of the Board of Directors may be held without notice at such places
and
times as shall be determined from time to time by resolution of the Board of
Directors.
Special
meetings of the Board of Directors may be called by the Chairman of the Board
or
the President, or by the Secretary on the written request of any director,
on at
least one day’s notice to each director (except that notice to any director may
be waived in writing by such director) and shall be held at such place or places
as may be determined by the Board of Directors, or as shall be stated in the
call of the meeting.
Unless
otherwise restricted by the Amended and Restated Certificate of Incorporation
of
the Corporation or these Amended and Restated By-Laws, members of the Board
of
Directors, or any committee designated by the Board of Directors, may
participate in any meeting of the Board of Directors or any committee thereof
by
means of a conference telephone or similar communications equipment by means
of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the
meeting.
SECTION
3.07
QUORUM
--
A majority of the Directors shall constitute a quorum for the transaction of
business. If at any meeting of the Board of Directors there shall be less than
a
quorum present, a majority of those present may adjourn the meeting from time
to
time until a quorum is obtained, and no further notice thereof need be given
other than by announcement at the meeting which shall be so adjourned. The
vote
of the majority of the Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors unless the Amended and
Restated Certificate of Incorporation of the Corporation or these Amended and
Restated By-Laws shall require the vote of a greater number.
SECTION
3.08
COMPENSATION
-- Directors shall not receive any stated salary for their services as directors
or as members of committees, but by resolution of the Board of Directors a
fixed
fee and expenses of attendance may be allowed for attendance at each meeting.
Nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity as an officer, agent or otherwise,
and receiving compensation therefor.
SECTION
3.09
ACTION
WITHOUT MEETING -- 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 a written consent thereto is signed by all members of the Board
of
Directors or of such committee, as the case may be, and such written consent
is
filed with the minutes of proceedings of the Board of Directors or such
committee.
ARTICLE
IV
OFFICERS
SECTION
4.01
OFFICERS
-- The officers of the Corporation shall be a Chairman of the Board, a
President, one or more Vice Presidents, a Treasurer and a Secretary, all of
whom
shall be elected by the Board of Directors and shall hold office until their
successors are duly elected and qualified. In addition, the Board of Directors
may elect such Assistant Secretaries and Assistant Treasurers as they may deem
proper. The Board of Directors may appoint such other officers and agents as
it
may deem advisable, who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time
to
time by the Board of Directors. Any number of offices may be held by the same
person.
SECTION
4.02
CHAIRMAN
OF THE BOARD -- The Chairman of the Board shall be the Chief Executive Officer
of the Corporation. He or she shall preside at all meetings of the Board of
Directors and shall have and perform such other duties as may be assigned to
him
or her by the Board of Directors. The Chairman of the Board shall have the
power
to execute bonds, mortgages and other contracts on behalf of the Corporation,
and to cause the seal of the Corporation to be affixed to any instrument
requiring it, and when so affixed the seal shall be attested to by the signature
of the Secretary or the Treasurer or an Assistant Secretary or an Assistant
Treasurer.
SECTION
4.03
PRESIDENT
-- The President shall be the Chief Operating Officer of the Corporation. He
or
she shall have the general powers and duties of supervision and management
usually vested in the office of President of a corporation. The President shall
have the power to execute bonds, mortgages and other contracts on behalf of
the
Corporation, and to cause the seal to be affixed to any instrument requiring
it,
and when so affixed the seal shall be attested to by the signature of the
Secretary or the Treasurer or an Assistant Secretary or an Assistant
Treasurer.
SECTION
4.04
VICE
PRESIDENTS -- Each Vice President shall have such powers and shall perform
such
duties as shall be assigned to him or her by the Board of
Directors.
SECTION
4.05
TREASURER
-- The Treasurer shall be the Chief Financial Officer of the Corporation. He
or
she shall have the custody of the Corporate funds and securities and shall
keep
full and accurate account of receipts and disbursements in books belonging
to
the Corporation. He or she shall deposit all moneys and other valuables in
the
name and to the credit of the Corporation in such depositaries as may be
designated by the Board of Directors. He or she shall disburse the funds of
the
Corporation as may be ordered by the Board of Directors, the Chairman of the
Board, or the President, taking proper vouchers for such disbursements. He
or
she shall render to the Chairman of the Board, the President and Board of
Directors at the regular meetings of the Board of Directors, or whenever they
may request it, an account of all his or her transactions as Treasurer and
of
the financial condition of the Corporation. If required by the Board of
Directors, he or she shall give the Corporation a bond for the faithful
discharge of his or her duties in such amount and with such surety as the Board
of Directors shall prescribe.
SECTION
4.06
SECRETARY
-- The Secretary shall give, or cause to be given, notice of all meetings of
stockholders and of the Board of Directors and all other notices required by
law
or by these Amended and Restated By-Laws, and in case of his or her absence
or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the Chairman of the Board or the President, or by the
Board of Directors, upon whose request the meeting is called as provided in
these Amended and Restated By-Laws. He or she shall record all the proceedings
of the meetings of the Board of Directors, any committees thereof and the
stockholders of the Corporation in a book to be kept for that purpose, and
shall
perform such other duties as may be assigned to him or her by the Board of
Directors, the Chairman of the Board or the President. He or she shall have
the
custody of the seal of the Corporation and shall affix the same to all
instruments requiring it, when authorized by the Board of Directors, the
Chairman of the Board or the President, and attest to the same.
SECTION
4.07
ASSISTANT
TREASURERS AND ASSISTANT SECRETARIES -- Assistant Treasurers and Assistant
Secretaries, if any, shall be elected and shall have such powers and shall
perform such duties as shall be assigned to them, respectively, by the Board
of
Directors.
ARTICLE
V
MISCELLANEOUS
SECTION
5.01
CERTIFICATES
OF STOCK -- A certificate of stock shall be issued to each stockholder
certifying the number of shares owned by such stockholder in the Corporation.
Certificates of stock of the Corporation shall be of such form and device as
the
Board of Directors may from time to time determine.
SECTION
5.02
LOST
CERTIFICATES -- A new certificate of stock may be issued in the place of any
certificate theretofore issued by the Corporation, alleged to have been lost
or
destroyed, and the Board of Directors may, in its discretion, require the owner
of the lost or destroyed certificate, or such owner’s legal representatives, to
give the Corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the Corporation against any claim
that may be made against it on account of the alleged loss of any such
certificate, or the issuance of any such new certificate.
SECTION
5.03
TRANSFER
OF SHARES -- The shares of stock of the Corporation shall be transferable only
upon its books by the holders thereof in person or by their duly authorized
attorneys or legal representatives, and upon such transfer the old certificates
shall be surrendered to the Corporation by the delivery thereof to the person
in
charge of the stock and transfer books and ledgers, or to such other person
as
the Board of Directors may designate, by whom they shall be cancelled, and
new
certificates shall thereupon be issued. A record shall be made of each transfer
and whenever a transfer shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer.
SECTION
5.04
STOCKHOLDERS
RECORD DATE -- 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, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights
in
respect of any change, conversion or exchange of stock or for the purpose 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 by the Board of Directors and which record date: (1) in the case
of
determination of stockholders entitled to vote at any meeting of stockholders
or
adjournment thereof, shall, unless otherwise required by law, not be more than
sixty nor less than ten days before the date of such meeting; (2) in the case
of
determination of stockholders entitled to express consent to corporate action
in
writing without a meeting, shall not be more than ten days from the date upon
which the resolution fixing the record date is adopted by the Board of
Directors; and (3) in the case of any other action, shall not be more than
sixty
days prior to such other action. If no record date is fixed: (1) the record
date
for determining stockholders entitled to notice of or to vote at a meeting
of
stockholders shall be at the close of business on the day next 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; (2) the record
date
for determining stockholders entitled to express consent to corporate action
in
writing without a meeting when no prior action of the Board of Directors is
required by law, shall be the first day on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day
on
which the Board of Directors adopts the resolution taking such prior action;
and
(3) the record date for determining stockholders for any other purpose shall
be
at the close of business on the day on which the Board of Directors adopts
the
resolution relating thereto. 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
5.05
DIVIDENDS
-- Subject to the provisions of the Amended and Restated Certificate of
Incorporation of the Corporation, the Board of Directors may, out of funds
legally available therefor at any regular or special meeting, declare dividends
upon stock of the Corporation as and when they deem appropriate. Before
declaring any dividend there may be set apart out of any funds of the
Corporation available for dividends, such sum or sums as the Board of Directors
from time to time in their discretion deem proper for working capital or as
a
reserve fund to meet contingencies or for equalizing dividends or for such
other
purposes as the Board of Directors shall deem conducive to the interests of
the
Corporation.
SECTION
5.06
SEAL
--
The corporate seal of the Corporation shall be in such form as shall be
determined by resolution of the Board of Directors. Said seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced
or
otherwise imprinted upon the subject document or paper.
SECTION
5.07
FISCAL
YEAR -- The fiscal year of the Corporation shall be determined by resolution
of
the Board of Directors.
SECTION
5.08
CHECKS
--
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the Corporation shall be signed
by such officer or officers, or agent or agents, of the Corporation, and in
such
manner as shall be determined from time to time by resolution of the Board
of
Directors.
SECTION
5.09
NOTICE
AND WAIVER OF NOTICE -- Whenever any notice is required to be given under these
Amended and Restated By-Laws, personal notice is not required unless expressly
so stated, and any notice so required shall be deemed to be sufficient if given
by depositing the same in the United States mail, postage prepaid, addressed
to
the person entitled thereto at his or her address as it appears on the records
of the Corporation, and such notice shall be deemed to have been given on the
day of such mailing. Stockholders not entitled to vote shall not be entitled
to
receive notice of any meetings except as otherwise provided by law. Whenever
any
notice is required to be given under the provisions of any law, or under the
provisions of the Amended and Restated Certificate of Incorporation of the
Corporation or of these Amended and Restated By-Laws, a waiver thereof, in
writing and signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent to such
required notice.
ARTICLE
VI
AMENDMENTS
These
Amended and Restated By-Laws may be altered, amended or repealed at any annual
meeting of the stockholders (or at any special meeting thereof if notice of
such
proposed alteration, amendment or repeal to be considered is contained in the
notice of such special meeting) by the affirmative vote of the holders of shares
constituting a majority of the voting power of the Corporation. Except as
otherwise provided in the Amended and Restated Certificate of Incorporation
of
the Corporation, the Board of Directors may by majority vote of those present
at
any meeting at which a quorum is present alter, amend or repeal these Amended
and Restated By-Laws, or enact such other Amended and Restated By-Laws as in
their judgment may be advisable for the regulation and conduct of the affairs
of
the Corporation.
BPC
HOLDING CORPORATION
CONSENT
OF DIRECTORS IN LIEU OF
BOARD
OF DIRECTORS’ MEETING
The
undersigned, being all of the directors of BPC Holding Corporation, a Delaware
corporation (the “Corporation”), do hereby consent without a Board of Directors’
meeting, pursuant to Section 141(f) of the General Corporation Law of the State
of Delaware, to the adoption of the following resolutions:
RESOLVED,
that the Amended and Restated Certificate of Incorporation of the Corporation
be
amended by striking out Article I thereof and by submitting in lieu of said
Article the following new Article:
The
name
of the corporation (which is hereinafter referred to as the “Corporation”)
is:
BERRY
PLASTICS HOLDING CORPORATION
RESOLVED,
that the Board of Directors finds the adoption of the amendment set forth in
the
foregoing resolution advisable and in the best interests of the Corporation
and
its stockholder.
RESOLVED,
that the Corporation seek the approval and adoption (collectively, the
“Approval”) by the stockholders of the Corporation of the Amendment (as defined
below) pursuant to Section 228 and 242 of the General Corporation Law of the
State of Delaware (the “GCL”).
RESOLVED,
that the Certificate of Amendment (the “Amendment”) of the Amended and Restated
Certificate of Incorporation attached hereto as Exhibit A be adopted, in
accordance with Section 228 and 242 of the GCL, and, following the Approval,
if
any, be filed with the Secretary of State of the State of Delaware.
RESOLVED,
that the Amended and Restated By-Laws of the Corporation be, and hereby are,
amended by striking out the title “AMENDED AND RESTATED
BY-LAWS
OF BPC HOLDING CORPORATION” and by submitting in lieu of said title the
following new title:
“AMENDED
AND RESTATED BY-LAWS OF BERRY PLASTICS HOLDING CORPORATION”.
RESOLVED,
that the Amended and Restated By-Laws of the Corporation be, and hereby are,
further amended by striking out Section 1.01 thereof and by submitting in lieu
of said Section 1.01 the following new Section 1.01:
“REGISTERED
OFFICE The registered office of Berry Plastics Holding Corporation (the
“Corporation”) shall be established and maintained at the office of The
Corporation Trust Company, The Corporation Trust Center, 1209 Orange Street
Wilmington, County of New Castle, Delaware 19801, and The Corporation Trust
Company shall be the registered agent of the Corporation in charge
thereof.”
RESOLVED,
that the officers of the Corporation be, and each of them hereby is, in
accordance with the foregoing resolutions, authorized and directed, for and
on
behalf of the Corporation, to take all action and execute all documents and
make
such filings pursuant to federal, state, local and foreign laws as any of them
may deem appropriate to effectuate and carry out the purposes of the foregoing
resolutions.
RESOLVED,
that all actions heretofore taken by any of the officers, representatives or
agents of the Corporation, by or on behalf of the Corporation or any of its
affiliates in connection with the foregoing resolutions be, and each of the
same
hereby is, ratified and approved.
DATED
as
of the 24th day of October, 2006.
______________________________________
Anthony
Civale
Director
______________________________________
Robert
Seminara
Director
_______________________________________
Ira
G.
Boots
Director
EXHIBIT
A
[to
be
inserted]
BPC
ACQUISITION CORP.
and
(following
the merger of BPC Acquisition Corp.
with
and
into BPC Holding Corporation,
BPC
HOLDING CORPORATION,
as
Issuer,
and
certain Guarantors)
$525,000,000
Second Priority Senior Secured Fixed Rate Notes due 2014
$225,000,000
Second Priority Senior Secured Floating Rate Notes due 2014
________________________
INDENTURE
Dated
as
of September 20, 2006
________________________
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as
Trustee
TABLE
OF
CONTENTS
Article
1
|
DEFINITIONS
AND INCORPORATION BY REFERENCE
|
1
|
SECTION
1.01.
|
Definitions
|
1
|
SECTION
1.02.
|
Other
Definitions
|
36
|
SECTION
1.03.
|
Incorporation
by Reference of Trust Indenture Act
|
37
|
SECTION
1.04.
|
Rules
of Construction
|
38
|
Article
2
|
THE
SECURITIES
|
39
|
SECTION
2.01.
|
Amount
of Securities
|
39
|
SECTION
2.02.
|
Form
and Dating
|
40
|
SECTION
2.03.
|
Execution
and Authentication
|
40
|
SECTION
2.04.
|
Registrar
and Paying Agent
|
41
|
SECTION
2.05.
|
Paying
Agent to Hold Money in Trust
|
41
|
SECTION
2.06.
|
Holder
Lists
|
42
|
SECTION
2.07.
|
Transfer
and Exchange
|
42
|
SECTION
2.08.
|
Replacement
Securities
|
43
|
SECTION
2.09.
|
Outstanding
Securities
|
43
|
SECTION
2.10.
|
Temporary
Securities
|
44
|
SECTION
2.11.
|
Cancellation
|
44
|
SECTION
2.12.
|
Defaulted
Interest
|
44
|
SECTION
2.13.
|
CUSIP
Numbers, ISINs, etc
|
44
|
SECTION
2.14.
|
Calculation
of Principal Amount of Securities
|
44
|
Article
3
|
REDEMPTION
|
45
|
SECTION
3.01.
|
Redemption
|
45
|
SECTION
3.02.
|
Applicability
of Article
|
45
|
SECTION
3.03.
|
Notices
to Trustee
|
45
|
SECTION
3.04.
|
Selection
of Securities to Be Redeemed
|
45
|
SECTION
3.05.
|
Notice
of Optional Redemption
|
45
|
SECTION
3.06.
|
Effect
of Notice of Redemption
|
46
|
SECTION
3.07.
|
Deposit
of Redemption Price
|
46
|
SECTION
3.08.
|
Securities
Redeemed in Part
|
47
|
Article
4
|
COVENANTS
|
47
|
SECTION
4.01.
|
Payment
of Securities
|
47
|
TABLE
OF
CONTENTS
(cont’d)
SECTION
4.02.
|
Reports
and Other Information
|
47
|
SECTION
4.03.
|
Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock
and
Preferred Stock
|
49
|
SECTION
4.04.
|
Limitation
on Restricted Payments
|
54
|
SECTION
4.05.
|
Dividend
and Other Payment Restrictions Affecting Subsidiaries
|
59
|
SECTION
4.06.
|
Asset
Sales
|
61
|
SECTION
4.07.
|
Transactions
with Affiliates
|
64
|
SECTION
4.08.
|
Change
of Control
|
67
|
SECTION
4.09.
|
Compliance
Certificate
|
69
|
SECTION
4.10.
|
Further
Instruments and Acts
|
70
|
SECTION
4.11.
|
Future
Guarantors
|
70
|
SECTION
4.12.
|
Liens
|
70
|
SECTION
4.13.
|
Maintenance
of Office or Agency
|
71
|
SECTION
4.14.
|
Amendment
of Security Documents
|
71
|
SECTION
4.15.
|
After-Acquired
Property
|
71
|
SECTION
4.16.
|
Termination
and Suspension of Certain Covenants
|
71
|
Article
5
|
SUCCESSOR
COMPANY
|
72
|
SECTION
5.01.
|
When
Issuer May Merge or Transfer Assets
|
72
|
Article
6
|
DEFAULTS
AND REMEDIES
|
75
|
SECTION
6.01.
|
Events
of Default
|
75
|
SECTION
6.02.
|
Acceleration
|
77
|
SECTION
6.03.
|
Other
Remedies
|
78
|
SECTION
6.04.
|
Waiver
of Past Defaults
|
78
|
SECTION
6.05.
|
Control
by Majority
|
78
|
SECTION
6.06.
|
Limitation
on Suits
|
79
|
SECTION
6.07.
|
Rights
of the Holders to Receive Payment
|
79
|
SECTION
6.08.
|
Collection
Suit by Trustee
|
79
|
SECTION
6.09.
|
Trustee
May File Proofs of Claim
|
79
|
SECTION
6.10.
|
Priorities
|
80
|
SECTION
6.11.
|
Undertaking
for Costs
|
80
|
SECTION
6.12.
|
Waiver
of Stay or Extension Laws
|
80
|
TABLE
OF
CONTENTS
(cont’d)
Article
7
|
TRUSTEE
|
80
|
SECTION
7.01.
|
Duties
of Trustee
|
81
|
SECTION
7.02.
|
Rights
of Trustee
|
82
|
SECTION
7.03.
|
Individual
Rights of Trustee
|
83
|
SECTION
7.04.
|
Trustee’s
Disclaimer
|
83
|
SECTION
7.05.
|
Notice
of Defaults
|
83
|
SECTION
7.06.
|
Reports
by Trustee to the Holders
|
84
|
SECTION
7.07.
|
Compensation
and Indemnity
|
84
|
SECTION
7.08.
|
Replacement
of Trustee
|
85
|
SECTION
7.09.
|
Successor
Trustee by Merger
|
86
|
SECTION
7.10.
|
Eligibility;
Disqualification
|
86
|
SECTION
7.11.
|
Preferential
Collection of Claims Against the Issuer
|
86
|
Article
8
|
DISCHARGE
OF INDENTURE; DEFEASANCE
|
86
|
SECTION
8.01.
|
Discharge
of Liability on Securities; Defeasance
|
86
|
SECTION
8.02.
|
Conditions
to Defeasance
|
88
|
SECTION
8.03.
|
Application
of Trust Money
|
89
|
SECTION
8.04.
|
Repayment
to Company
|
89
|
SECTION
8.05.
|
Indemnity
for U.S. Government Obligations
|
89
|
SECTION
8.06.
|
Reinstatement
|
90
|
Article
9
|
AMENDMENTS
AND WAIVERS
|
90
|
SECTION
9.01.
|
Without
Consent of the Holders
|
90
|
SECTION
9.02.
|
With
Consent of the Holders
|
91
|
SECTION
9.03.
|
Compliance
with Trust Indenture Act
|
92
|
SECTION
9.04.
|
Revocation
and Effect of Consents and Waivers
|
92
|
SECTION
9.05.
|
Notation
on or Exchange of Securities
|
93
|
SECTION
9.06.
|
Trustee
to Sign Amendments
|
93
|
SECTION
9.07.
|
Payment
for Consent
|
93
|
SECTION
9.08.
|
Additional
Voting Terms; Calculation of Principal Amount
|
93
|
Article
10
|
RANKING
OF NOTE LIENS
|
94
|
SECTION
10.01.
|
Relative
Rights
|
94
|
Article
11
|
COLLATERAL
|
95
|
TABLE
OF
CONTENTS
(cont’d)
SECTION
11.01.
|
Security
Documents
|
95
|
SECTION
11.02.
|
Collateral
Agent
|
95
|
SECTION
11.03.
|
Authorization
of Actions to Be Taken
|
96
|
SECTION
11.04.
|
Release
of Liens
|
97
|
SECTION
11.05.
|
Filing,
Recording and Opinions
|
99
|
SECTION
11.06.
|
[Intentionally
omitted]
|
99
|
SECTION
11.07.
|
Powers
Exercisable by Receiver or Trustee
|
99
|
SECTION
11.08.
|
Release
Upon Termination of the Issuer’s Obligations
|
99
|
SECTION
11.09.
|
Designations
|
100
|
SECTION
11.10.
|
Taking
and Destruction
|
100
|
Article
12
|
GUARANTEES
|
100
|
SECTION
12.01.
|
Guarantees
|
100
|
SECTION
12.02.
|
Limitation
on Liability
|
102
|
SECTION
12.03.
|
Successors
and Assigns
|
103
|
SECTION
12.04.
|
No
Waiver
|
103
|
SECTION
12.05.
|
Modification
|
104
|
SECTION
12.06.
|
Execution
of Supplemental Indenture for Future Guarantors
|
104
|
SECTION
12.07.
|
Non-Impairment
|
104
|
Article
13
|
MISCELLANEOUS
|
104
|
SECTION
13.01.
|
Trust
Indenture Act Controls
|
104
|
SECTION
13.02.
|
Notices
|
104
|
SECTION
13.03.
|
Communication
by the Holders with Other Holders
|
105
|
SECTION
13.04.
|
Certificate
and Opinion as to Conditions Precedent
|
105
|
SECTION
13.05.
|
Statements
Required in Certificate or Opinion
|
105
|
SECTION
13.06.
|
When
Securities Disregarded
|
106
|
SECTION
13.07.
|
Rules
by Trustee, Paying Agent and Registrar
|
106
|
SECTION
13.08.
|
Legal
Holidays
|
106
|
SECTION
13.09.
|
GOVERNING
LAW
|
106
|
SECTION
13.10.
|
No
Recourse Against Others
|
106
|
SECTION
13.11.
|
Successors
|
107
|
SECTION
13.12.
|
Multiple
Originals
|
107
|
TABLE
OF
CONTENTS
(cont’d)
SECTION
13.13.
|
Table
of Contents; Headings
|
107
|
SECTION
13.14.
|
Indenture
Controls
|
107
|
SECTION
13.15.
|
Severability
|
107
|
Appendix
A
|
-
|
Provisions
Relating to Initial Securities, Additional Securities and
Exchange
Securities
|
EXHIBIT
INDEX
Exhibit
A-1
-
Initial
Security (Fixed Rate Notes)
Exhibit
A-2
-
Initial
Security (Floating Rate Notes)
Exhibit
B-1
-
Exchange
Security (Fixed Rate Notes)
Exhibit
B-2
-
Exchange
Security (Floating Rate Notes)
Exhibit
C
-
Form
of
Transferee Letter of Representation
Exhibit
D
-
Form
of
Supplemental Indenture
CROSS-REFERENCE
TABLE
TIA
Indenture
Section
Section
310
|
(a)(1)
|
7.10
|
|
(a)(2)
|
7.10
|
|
(a)(3)
|
N.A.
|
|
(a)(4)
|
N.A.
|
|
(b)
|
7.08;
7.10
|
|
(c)
|
N.A.
|
311
|
(a)
|
7.11
|
|
(b)
|
7.11
|
|
(c)
|
N.A.
|
312
|
(a)
|
2.06
|
|
(b)
|
13.03
|
|
(c)
|
13.03
|
313
|
(a)
|
7.06
|
|
(b)(1)
|
N.A.
|
|
(b)(2)
|
7.06
|
|
(c)
|
7.06
|
|
(d)
|
4.02;
4.09
|
314
|
(a)
|
4.02;
4.09
|
|
(b)
|
N.A.
|
|
(c)(1)
|
13.04
|
|
(c)(2)
|
13.04
|
|
(c)(3)
|
N.A.
|
|
(d)
|
N.A.
|
|
(e)
|
13.05
|
|
(f)
|
4.10
|
315
|
(a)
|
7.01
|
|
(b)
|
7.05
|
|
(c)
|
7.01
|
|
(d)
|
7.01
|
|
(e)
|
6.11
|
316
|
(a)(last
sentence)
|
13.06
|
|
(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)
|
2.05
|
318
|
(a)
|
13.01
|
|
|
|
N.A.
Means Not Applicable.
Note:
|
This
Cross-Reference Table shall not, for any purposes, be deemed to be
part of
this Indenture.
|
INDENTURE
dated as of September 20, 2006 among BPC ACQUISITION CORP., a Delaware
corporation (“Merger Sub”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association, as trustee (the “Trustee”), and, upon execution
and delivery of a supplemental indenture, BPC Holding Corporation (the
“Company”) and the Guarantors (as defined herein).
Each
party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of (a) $750,000,000 aggregate principal
amount of second priority senior secured fixed and floating rate notes
consisting of (x) $525,000,000 aggregate principal amount of the Issuer’s 8⅞%
Second Priority Senior Secured Fixed Rate Notes due 2014 (the “Original Fixed
Rate Notes”) and (y) $225,000,000 aggregate principal amount of the Issuer’s
Second Priority Senior Secured Floating Rate Notes due 2014 (the “Original
Floating Rate Notes” and, together with the Original Fixed Rate Notes, (each of
which constitutes a separate series hereunder), the “Original Securities”)
issued on the date hereof, (b) any Additional Securities (as defined herein)
that may be issued after the date hereof in the form of Exhibits A-1 and A-2
(all such securities in clauses (a) and (b) being referred to collectively
as
the “Initial Securities”) and (c) if and when issued as provided in the
Registration Agreement (as defined in Appendix A hereto (the “Appendix”)) or
otherwise registered under the Securities Act and issued, $525,000,000 aggregate
principal amount of the Issuer’s 8⅞% Second Priority Senior Secured Fixed Rate
Notes due 2014 (the “Exchange Fixed Rate Notes”) and $225,000,000 aggregate
principal amount of the Issuer’s Second Priority Senior Secured Floating Rate
Notes due 2014, (the “Exchange Floating Rate Notes” and, together with the
Exchange Fixed Rate Notes (each of which constitutes a separate series
hereunder) and any exchange notes issued in respect of Additional Securities,
the “Exchange Securities” and, together with the Initial Securities, the
“Securities”) issued in the Registered Exchange Offer (as defined in the
Appendix) in exchange for any Initial Securities or otherwise registered under
the Securities Act and issued in the form of Exhibits B-1 and B-2. The Original
Fixed Rate Notes, any Additional Fixed Rate Notes (as defined herein) and the
Exchange Fixed Rate Notes are referred to collectively as the “Fixed Rate Notes”
(and constitute a single series hereunder); the Original Floating Rate Notes,
any Additional Floating Rate Notes (as defined herein) and the Exchange Floating
Rate Notes are referred to collectively as the “Floating Rate Notes” (and
constitute a single series hereunder). Subject to the conditions and compliance
with the covenants set forth herein, the Issuer may issue an unlimited aggregate
principal amount of Additional Securities.
ARTICLE
1
DEFINITIONS
AND INCORPORATION BY REFERENCE
SECTION
1.01.
Definitions
.
“
Acquired
Indebtedness
”
means,
with respect to any specified Person:
(1)
Indebtedness
of any other Person existing at the time such other Person is merged,
consolidated or amalgamated with or into or became a Restricted Subsidiary
of
such specified Person, and
(2)
Indebtedness
secured by a Lien encumbering any asset acquired by such specified
Person.
“
Acquisition
”
means
the acquisition by Affiliates of the Sponsors of substantially all of the
outstanding shares of capital stock of the Company pursuant to the terms of
the
Merger Agreement.
“Acquisition
Documents” means the Merger Agreement and any other document entered into in
connection therewith, in each case as amended, supplemented or modified from
time to time prior to the Issue Date or thereafter (so long as any amendment,
supplement or modification after the Issue Date, together with all other
amendments, supplements and modifications after the Issue Date, taken as a
whole, is not more disadvantageous to the holders of the Securities in any
material respect than the Acquisition Documents as in effect on the Issue
Date).
“Additional
Fixed Rate Notes” means 8⅞% Second Priority Senior Secured Fixed Rate Notes due
2014 issued under the terms of this Indenture subsequent to the Issue
Date.
“Additional
Floating Rate Notes” means Second Priority Senior Secured Floating Rate Notes
due 2014 issued under the terms of this Indenture subsequent to the Issue
Date.
“Additional
Securities” means Additional Fixed Rate Notes and Additional Floating Rate
Notes.
“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.
“Applicable
Premium” means, with respect to any Fixed Rate Note on any applicable redemption
date, the greater of:
(1)
1%
of the
then outstanding principal amount of the Fixed Rate Note; and
(2)
the
excess of:
(a)
the
present value at such redemption date of (i) the redemption price of the Fixed
Rate Note, at September 15, 2010 as set forth in Paragraph 5 of the applicable
Security plus (ii) all required interest payments due on such Fixed Rate Note
through September 15, 2010 (excluding accrued but unpaid interest), computed
using a discount rate equal to the Treasury Rate as of such redemption date
plus
50 basis points; over
(b)
the
then
outstanding principal amount of the Fixed Rate Note.
“Asset
Sale” means:
(1)
the
sale,
conveyance, transfer or other disposition (whether in a single transaction
or a
series of related transactions) of property or assets (including by way of
a
Sale/Leaseback Transaction) outside the ordinary course of business of the
Issuer or any Restricted Subsidiary of the Issuer (each referred to in this
definition as a “disposition”) or
(2)
the
issuance or sale of Equity Interests (other than directors
’
qualifying shares and shares issued to foreign nationals or other third parties
to the extent required by applicable law) of any Restricted Subsidiary (other
than to the Issuer or another Restricted Subsidiary of the Issuer) (whether
in a
single transaction or a series of related transactions),
in
each
case other than:
(a)
a
disposition of Cash Equivalents or Investment Grade Securities or obsolete
or
worn out property or equipment in the ordinary course of business;
(b)
the
disposition of all or substantially all of the assets of the Issuer in a manner
permitted pursuant to Section 5.01 or any disposition that constitutes a Change
of Control;
(c)
any
Restricted Payment or Permitted Investment that is permitted to be made, and
is
made, under Section 4.04;
(d)
any
disposition of assets or issuance or sale of Equity Interests of any Restricted
Subsidiary, which assets or Equity Interests so disposed or issued have an
aggregate Fair Market Value of less than $7.5 million;
(e)
any
disposition of property or assets, or the issuance of securities, by a
Restricted Subsidiary of the Issuer to the Issuer or by the Issuer or a
Restricted Subsidiary of the Issuer to a Restricted Subsidiary of the
Issuer;
(f)
any
exchange of assets (including a combination of assets and Cash Equivalents)
for
assets related to a Similar Business of comparable or greater market value
or
usefulness to the business of the Issuer and its Restricted Subsidiaries as
a
whole, as determined in good faith by the Issuer;
(g)
foreclosure
on assets of the Issuer or any of its Restricted Subsidiaries;
(h)
any
sale
of Equity Interests in, or Indebtedness or other securities of, an Unrestricted
Subsidiary;
(i)
the
lease, assignment or sublease of any real or personal property in the ordinary
course of business;
(j)
any
sale
of inventory or other assets in the ordinary course of business;
(k)
any
grant
in the ordinary course of business of any license of patents, trademarks,
know-how or any other intellectual property;
(l)
a
transfer of accounts receivable and related assets of the type specified in
the
definition of
“
Receivables
Financing
”
(or a
fractional undivided interest therein) by a Receivables Subsidiary in a
Qualified Receivables Financing; and
(m)
the
sale
of any property in a Sale/Leaseback Transaction within six months of the
acquisition of such property.
“Bank
Indebtedness” means any and all amounts payable under or in respect of the
Credit Agreement and the other Credit Agreement Documents as amended, restated,
supplemented, waived, replaced, restructured, repaid, refunded, refinanced
or
otherwise modified from time to time (including after termination of the Credit
Agreement), including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Issuer whether or not a claim for post-filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
“Board
of
Directors” means, as to any Person, the board of directors or managers, as
applicable, of such Person (or, if such Person is a partnership, the board
of
directors or other governing body of the general partner of such Person) or
any
duly authorized committee thereof.
“Business
Day” means a day other than a Saturday, Sunday or other day on which banking
institutions are authorized or required by law to close in New York
City.
“Calculation
Agent” means a financial institution appointed by the Issuer to calculate the
interest rate payable on the Floating Rate Notes in respect of each Interest
Period, which shall initially be the Trustee.
“Capital
Stock” means:
(1)
in
the
case of a corporation, corporate stock or shares;
(2)
in
the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;
(3)
in
the
case of a partnership or limited liability company, partnership or membership
interests (whether general or limited); and
(4)
any
other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing
Person.
“Capitalized
Lease Obligation” means, at the time any determination thereof is to be made,
the amount of the liability in respect of a capital lease that would at such
time be required to be capitalized and reflected as a liability on a balance
sheet (excluding the footnotes thereto) in accordance with GAAP.
“Cash
Contribution Amount” means the aggregate amount of cash contributions made to
the capital of the Issuer described in the definition of “Contribution
Indebtedness.”
“Cash
Equivalents” means:
(1)
U.S.
Dollars, pounds sterling, euros, the national currency of any member state
in
the European Union or, in the case of any Foreign Subsidiary that is a
Restricted Subsidiary, such local currencies held by it from time to time in
the
ordinary course of business;
(2)
securities
issued or directly and fully guaranteed or insured by the U.S. government or
any
country that is a member of the European Union or any agency or instrumentality
thereof in each case maturing not more than two years from the date of
acquisition;
(3)
certificates
of deposit, time deposits and eurodollar time deposits with maturities of one
year or less from the date of acquisition, bankers
’
acceptances, in each case with maturities not exceeding one year and overnight
bank deposits, in each case with any commercial bank having capital and surplus
in excess of $250 million and whose long-term debt is rated
“
A
”
or the
equivalent thereof by Moody
’
s
or
S&P (or reasonably equivalent ratings of another internationally recognized
ratings agency);
(4)
repurchase
obligations for underlying securities of the types described in clauses (2)
and
(3) above entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5)
commercial
paper issued by a corporation (other than an Affiliate of the Issuer) rated
at
least
“
A-1
”
or the
equivalent thereof by Moody
’
s
or
S&P (or reasonably equivalent ratings of another internationally recognized
ratings agency) and in each case maturing within one year after the date of
acquisition;
(6)
readily
marketable direct obligations issued by any state of the United States of
America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody
’
s
or
S&P (or reasonably equivalent ratings of another internationally recognized
ratings agency) in each case with maturities not exceeding two years from the
date of acquisition;
(7)
Indebtedness
issued by Persons (other than the Sponsors or any of their Affiliates) with
a
rating of
“
A
”
or
higher from S&P or
“
A-2
”
or
higher from Moody
’
s
in each
case with maturities not exceeding two years from the date of acquisition;
and
(8)
investment
funds investing at least 95% of their assets in securities of the types
described in clauses (1) through (7) above.
“Change
of Control” means the occurrence of any of the following events:
(i)
the
sale,
lease or transfer, in one or a series of related transactions, of all or
substantially all the assets of the Issuer and its Subsidiaries, taken as a
whole, to a Person other than any of the Permitted Holders; or
(ii)
the
Issuer becomes aware (by way of a report or any other filing pursuant to Section
13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the
acquisition by any Person or group (within the meaning of Section 13(d)(3)
or
Section 14(d)(2) of the Exchange Act, or any successor provision), including
any
group acting for the purpose of acquiring, holding or disposing of securities
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than
any
of the Permitted Holders, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination
or
purchase of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, or any successor provision), of more than 50% of the total voting
power of the Voting Stock of the Issuer or any direct or indirect parent of
the
Issuer.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Collateral”
means all property subject or purported to be subject, from time to time, to
a
Lien under any Security Documents.
“Collateral
Agent” means the Trustee in its capacity as “Collateral Agent” under this
Indenture and under the Security Documents and any successor thereto in such
capacity.
“Company”
means the party named as such in the Preamble to this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes
of
any provision contained herein and required by the TIA, each other obligor
on
the Securities.
“consolidated”
means, with respect to any Person, such Person consolidated with its Restricted
Subsidiaries, and shall not include any Unrestricted Subsidiary, but the
interest of such Person in an Unrestricted Subsidiary shall be accounted for
as
an Investment.
“Consolidated
Interest Expense” means, with respect to any Person for any period, the sum,
without duplication, of:
(1)
consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
to the extent such expense was deducted in computing Consolidated Net Income
(including amortization of original issue discount, the interest component
of
Capitalized Lease Obligations, and net payments and receipts (if any) pursuant
to interest rate Hedging Obligations and excluding amortization of deferred
financing fees and expensing of any bridge or other financing fees);
plus
(2)
consolidated
capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued; plus
(3)
commissions,
discounts, yield and other fees and charges Incurred in connection with any
Receivables Financing which are payable to Persons other than the Issuer and
its
Restricted Subsidiaries; minus
(4)
interest
income for such period.
“Consolidated
Net Income” means, with respect to any Person for any period, the aggregate of
the Net Income of such Person and its Restricted Subsidiaries for such period,
on a consolidated basis;
provided,
however
,
that:
(1)
any
net
after-tax extraordinary, nonrecurring or unusual gains or losses or income,
expenses or charges (less all fees and expenses relating thereto), including,
without limitation, any severance expenses, any expenses related to any
reconstruction, recommissioning or reconfiguration of fixed assets for alternate
uses, any fees, expenses or charges relating to new product lines, plant
shutdown costs, acquisition integration costs and expenses or charges related
to
any Equity Offering, Permitted Investment, acquisition or Indebtedness permitted
to be Incurred by this Indenture (in each case, whether or not successful),
including any such fees, expenses, charges or change in control payments made
under the Acquisition Documents or otherwise related to the Transactions, in
each case, shall be excluded;
(2)
any
increase in amortization or depreciation or any one-time non-cash charges
increases or reductions in Net Income, in each case resulting from purchase
accounting in connection with the Transactions or any acquisition that is
consummated after the Issue Date shall be excluded;
(3)
the
Net
Income for such period shall not include the cumulative effect of a change
in
accounting principles during such period;
(4)
any
net
after-tax income or loss from discontinued operations and any net after-tax
gains or losses on disposal of discontinued operations shall be
excluded;
(5)
any
net
after-tax gains or losses (less all fees and expenses or charges relating
thereto) attributable to business dispositions or asset dispositions other
than
in the ordinary course of business (as determined in good faith by the Board
of
Directors of the Issuer) shall be excluded;
(6)
any
net
after-tax gains or losses (less all fees and expenses or charges relating
thereto) attributable to the early extinguishment of indebtedness shall be
excluded;
(7)
the
Net
Income for such period of any Person that is not a Subsidiary of such Person,
or
is an Unrestricted Subsidiary, or that is accounted for by the equity method
of
accounting, shall be included only to the extent of the amount of dividends
or
distributions or other payments paid in cash (or to the extent converted into
cash) to the referent Person or a Restricted Subsidiary thereof in respect
of
such period;
(8)
solely
for the purpose of determining the amount available for Restricted Payments
under clause (1) of the definition of Cumulative Credit, the Net Income for
such
period of any Restricted Subsidiary (other than any Guarantor) shall be excluded
to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of its Net Income is not at the
date
of determination permitted without any prior governmental approval (which has
not been obtained) or, directly or indirectly, by the operation of the terms
of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, unless such restrictions with respect to the payment of dividends
or similar distributions have been legally waived; provided that the
Consolidated Net Income of such Person shall be increased by the amount of
dividends or other distributions or other payments actually paid in cash (or
converted into cash) by any such Restricted Subsidiary to such Person, to the
extent not already included therein;
(9)
an
amount
equal to the amount of Tax Distributions actually made to any parent of such
Person in respect of such period in accordance with Section 4.04(b)(xii) shall
be included as though such amounts had been paid as income taxes directly by
such Person for such period;
(10)
any
non-cash impairment charges resulting from the application of Statement of
Financial Accounting Standards (
“
SFAS
”
)
Nos.
142 and 144 and the amortization of intangibles arising pursuant to SFAS No.
141
shall be excluded;
(11)
any
non-cash expense realized or resulting from stock option plans, employee benefit
plans or post-employment benefit plans, grants of stock appreciation or similar
rights, stock options or other rights to officers, directors and employees
of
such Person or any of its Restricted Subsidiaries shall be
excluded;
(12)
any
(a)
severance or relocation costs or expenses, (b) one-time non-cash compensation
charges, (c) the costs and expenses after the Issue Date related to employment
of terminated employees, (d) costs or expenses realized in connection with,
resulting from or in anticipation of the Transactions or (e) costs or expenses
realized in connection with or resulting from stock appreciation or similar
rights, stock options or other rights existing on the Issue Date of officers,
directors and employees, in each case of such Person or any of its Restricted
Subsidiaries, shall be excluded;
(13)
accruals
and reserves that are established within 12 months after the Issue Date and
that
are so required to be established in accordance with GAAP shall be
excluded;
(14)
solely
for purposes of calculating EBITDA, (a) the Net Income of any Person and its
Restricted Subsidiaries shall be calculated without deducting the income
attributable to, or adding the losses attributable to, the minority equity
interests of third parties in any non-wholly-owned Restricted Subsidiary except
to the extent of dividends declared or paid in respect of such period or any
prior period on the shares of Capital Stock of such Restricted Subsidiary held
by such third parties and (b) any ordinary course
dividend,
distribution or other payment paid in cash and received from any Person in
excess of amounts included in clause (7) above shall be included;
(15)
(a)(i)
the non-cash portion of
“
straight-line
”
rent
expense shall be excluded and (ii) the cash portion of
“
straight-line
”
rent
expense which exceeds the amount expensed in respect of such rent expense shall
be included and (b) non-cash gains, losses, income and expenses resulting from
fair value accounting required by Statement of Financial Accounting Standards
No. 133 shall be excluded;
(16)
unrealized
gains and losses relating to hedging transactions and mark-to-market of
Indebtedness denominated in foreign currencies resulting from the applications
of Financial Accounting Standards 52 shall be excluded; and
(17)
solely
for the purpose of calculating Restricted Payments, the difference, if positive,
of the Consolidated Taxes of the Issuer calculated in accordance with GAAP
and
the actual Consolidated Taxes paid in cash by the Issuer during any Reference
Period shall be included.
Notwithstanding
the foregoing, for the purpose of Section 4.04 only, there shall be excluded
from Consolidated Net Income any dividends, repayments of loans or advances
or
other transfers of assets from Unrestricted Subsidiaries of the Issuer or a
Restricted Subsidiary of the Issuer to the extent such dividends, repayments
or
transfers increase the amount of Restricted Payments permitted under clauses
(E)
and (F) of the definition of “Cumulative Credit.”
“Consolidated
Non-cash Charges” means, with respect to any Person for any period, the
aggregate depreciation, amortization and other non-cash expenses of such Person
and its Restricted Subsidiaries reducing Consolidated Net Income of such Person
for such period on a consolidated basis and otherwise determined in accordance
with GAAP, but excluding any such charge which consists of or requires an
accrual of, or cash reserve for, anticipated cash charges for any future
period.
“Consolidated
Taxes” means provision for taxes based on income, profits or capital, including,
without limitation, state, franchise and similar taxes and any Tax Distributions
taken into account in calculating Consolidated Net Income.
“Contingent
Obligations” means, with respect to any Person, any obligation of such Person
guaranteeing any leases, dividends or other obligations that do not constitute
Indebtedness (“primary obligations”) of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent:
(1)
to
purchase any such primary obligation or any property constituting direct or
indirect security therefor,
(2)
to
advance or supply funds:
(a)
for
the
purchase or payment of any such primary obligation; or
(b)
to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; or
(3)
to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation against loss in respect
thereof.
“Contribution
Indebtedness” means Indebtedness of the Issuer or any Guarantor in an aggregate
principal amount not greater than twice the aggregate amount of cash
contributions (other than Excluded Contributions) made to the capital of the
Issuer or any such Guarantor after the Issue Date; provided that:
(1)
such
cash
contributions have not been used to make a Restricted Payment,
(2)
if
the
aggregate principal amount of such Contribution Indebtedness is greater than
the
aggregate amount of such cash contributions to the capital of the Issuer or
any
such Guarantor, as the case may be, the amount in excess shall be Indebtedness
(other than Secured Indebtedness) with a Stated Maturity later than the Stated
Maturity of the Securities, and
(3)
such
Contribution Indebtedness (a) is Incurred within 180 days after the making
of
such cash contributions and (b) is so designated as Contribution Indebtedness
pursuant to an Officers
’
Certificate on the Incurrence date thereof.
“Credit
Agreement” means (i) the credit agreement entered into in connection with, and
on or prior to, the consummation of the Acquisition, as amended, restated,
supplemented, waived, replaced (whether or not upon termination, and whether
with the original lenders or otherwise), restructured, repaid, refunded,
refinanced or otherwise modified from time to time, including any agreement
or
indenture extending the maturity thereof, refinancing, replacing or otherwise
restructuring all or any portion of the Indebtedness under such agreement or
agreements or indenture or indentures or any successor or replacement agreement
or agreements or indenture or indentures or increasing the amount loaned or
issued thereunder or altering the maturity thereof, among the Issuer, the
guarantors named therein, the financial institutions named therein, and Credit
Suisse, as Administrative Agent, and (ii) whether or not the credit agreement
referred to in clause (i) remains outstanding, if designated by the Issuer
to be
included in the definition of “Credit Agreement,” one or more (A) debt
facilities or commercial paper facilities, providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables
to
lenders or to special purpose entities formed to borrow from lenders against
such receivables) or letters of credit, (B) debt securities, indentures or
other
forms of debt financing (including convertible or exchangeable debt instruments
or bank guarantees or bankers’ acceptances), or (C) instruments or agreements
evidencing any other Indebtedness, in each case, with the same or different
borrowers or issuers and, in each case, as amended, supplemented, modified,
extended, restructured, renewed, refinanced, restated, replaced or refunded
in
whole or in part from time to time.
“Credit
Agreement Documents” means the Credit Agreement, any notes issued pursuant
thereto and the guarantees thereof, and the collateral documents relating
thereto, as
amended,
supplemented, restated, renewed, refunded, replaced, restructured, repaid,
refinanced or otherwise modified from time to time.
“Cumulative
Credit” means the sum of (without duplication):
(A)
50%
of
the Consolidated Net Income of the Issuer for the period (taken as one
accounting period, the
“
Reference
Period
”
)
from
July 1, 2006 to the end of the Issuer
’
s
most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, in the case such
Consolidated Net Income for such period is a deficit, minus 100% of such
deficit), plus
(B)
100%
of
the aggregate net proceeds, including cash and the Fair Market Value (as
determined in good faith by Issuer) of property other than cash, received by
the
Issuer after the Issue Date from the issue or sale of Equity Interests of the
Issuer (excluding Refunding Capital Stock, Designated Preferred Stock, Excluded
Contributions, Disqualified Stock and the Cash Contribution Amount), including
Equity Interests issued upon conversion of Indebtedness or Disqualified Stock
or
upon exercise of warrants or options (other than an issuance or sale to a
Restricted Subsidiary of the Issuer or an employee stock ownership plan or
trust
established by the Issuer or any of its Subsidiaries), plus
(C)
100%
of
the aggregate amount of contributions to the capital of the Issuer received
in
cash and the Fair Market Value (as determined in good faith by the Issuer)
of
property other than cash after the Issue Date (other than Excluded
Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified
Stock and the Cash Contribution Amount), plus
(D)
the
principal amount of any Indebtedness, or the liquidation preference or maximum
fixed repurchase price, as the case may be, of any Disqualified Stock of the
Issuer or any Restricted Subsidiary thereof issued after the Issue Date (other
than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary)
which
has been converted into or exchanged for Equity Interests in the Issuer (other
than Disqualified Stock) or any direct or indirect parent of the Issuer
(provided in the case of any parent, such Indebtedness or Disqualified Stock
is
retired or extinguished), plus
(E)
100%
of
the aggregate amount received by the Issuer or any Restricted Subsidiary in
cash
and the Fair Market Value (as determined in good faith by the Issuer) of
property other than cash received by the Issuer or any Restricted Subsidiary
from:
(I)
the
sale
or other disposition (other than to the Issuer or a Restricted Subsidiary of
the
Issuer) of Restricted Investments made by the Issuer and its Restricted
Subsidiaries and from repurchases and redemptions of such Restricted Investments
from the Issuer and its Restricted Subsidiaries by any Person (other than the
Issuer or any of its Restricted Subsidiaries) and from repayments of loans
or
advances which constituted Restricted Investments (other than in each case
to
the extent that the Restricted Investment was made pursuant to clause (vii)
or
(x) of Section 4.04(b)),
(II)
the
sale
(other than to the Issuer or a Restricted Subsidiary of the Issuer) of the
Capital Stock of an Unrestricted Subsidiary, or
(III)
a
distribution or dividend from an Unrestricted Subsidiary, plus
(F)
in
the
event any Unrestricted Subsidiary of the Issuer has been redesignated as a
Restricted Subsidiary or has been merged, consolidated or amalgamated with
or
into, or transfers or conveys its assets to, or is liquidated into, the Issuer
or a Restricted Subsidiary, the Fair Market Value (as determined in good faith
by the Issuer or, if such Fair Market Value may exceed $25.0 million, in writing
by an Independent Financial Advisor) of the Investment of the Issuer in such
Unrestricted Subsidiary at the time of such redesignation, combination or
transfer (or of the assets transferred or conveyed, as applicable), after taking
into account any Indebtedness associated with the Unrestricted Subsidiary so
designated or combined or any Indebtedness associated with the assets so
transferred or conveyed (other than in each case to the extent that the
designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant
to clause (vii) or (x) of Section 4.04(b) or constituted a Permitted
Investment).
“Default”
means any event which is, or after notice or passage of time or both would
be,
an Event of Default.
“Designated
Non-cash Consideration” means the Fair Market Value of non-cash consideration
received by the Issuer or one of its Restricted Subsidiaries in connection
with
an Asset Sale that is so designated as Designated Non-cash Consideration
pursuant to an Officers’ Certificate, setting forth the basis of such valuation,
less the amount of Cash Equivalents received in connection with a subsequent
sale of such Designated Non-cash Consideration.
“Designated
Preferred Stock” means Preferred Stock of the Issuer or any direct or indirect
parent of the Issuer, as applicable (other than Disqualified Stock), that is
issued for cash (other than to the Issuer or any of its Subsidiaries or an
employee stock ownership plan or trust established by the Issuer or any of
its
Subsidiaries) and is so designated as Designated Preferred Stock, pursuant
to an
Officers’ Certificate, on the issuance date thereof.
“Destruction”
means any damage to, loss or destruction of all or any portion of the
Collateral.
“Determination
Date” with respect to an Interest Period will be the second London Banking Day
preceding the first day of such Interest Period.
“Discharge
of Senior Lender Claims” shall mean, except to the extent otherwise provided in
the Intercreditor Agreement, payment in full in cash (except for contingent
indemnities and cost and reimbursement obligations to the extent no claim has
been made) of (a) all Obligations in respect of all outstanding First Priority
Lien Obligations and, with respect to letters of credit or letter of credit
guaranties outstanding thereunder, delivery of cash collateral or backstop
letters of credit in respect thereof in compliance with the Credit Agreement,
in
each case after or concurrently with the termination of all commitments to
extend credit thereunder and (b) any other First Priority Lien Obligations
that
are due and payable or otherwise accrued and owing at or prior to the time
such
principal and interest are paid; provided that the Discharge
of
Senior
Lender Claims shall not be deemed to have occurred if such payments are made
with the proceeds of other First Priority Lien Obligations that constitute
an
exchange or replacement for or a refinancing of such Obligations or First
Priority Lien Obligations. In the event the First Priority Lien Obligations
are
modified and the Obligations are paid over time or otherwise modified pursuant
to Section 1129 of the Bankruptcy Code, the First Priority Lien Obligations
shall be deemed to be discharged when the final payment is made, in cash, in
respect of such indebtedness and any obligations pursuant to such new
indebtedness shall have been satisfied.
“Disqualified
Stock” means, with respect to any Person, any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is redeemable or exchangeable), or upon the
happening of any event:
(1)
matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than as a result of a change of control or asset sale;
provided
that the
relevant asset sale or change of control provisions, taken as a whole, are
no
more favorable in any material respect to holders of such Capital Stock than
the
asset sale and change of control provisions applicable to the Securities and
any
purchase requirement triggered thereby may not become operative until compliance
with the asset sale and change of control provisions applicable to the
Securities (including the purchase of any Securities tendered pursuant
thereto)),
(2)
is
convertible or exchangeable for Indebtedness or Disqualified Stock of such
Person, or
(3)
is
redeemable at the option of the holder thereof, in whole or in
part,
in
each
case prior to 91 days after the maturity date of the Securities;
provided
,
however
,
that
only the portion of Capital Stock which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to such date shall be deemed to be Disqualified Stock;
provided
,
further
,
however, that if such Capital Stock is issued to any employee or to any plan
for
the benefit of employees of the Issuer or its Subsidiaries or by any such plan
to such employees, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Issuer in order
to
satisfy applicable statutory or regulatory obligations or as a result of such
employee’s termination, death or disability;
provided
,
further
,
that
any class of Capital Stock of such Person that by its terms authorizes such
Person to satisfy its obligations thereunder by delivery of Capital Stock that
is not Disqualified Stock shall not be deemed to be Disqualified
Stock.
“Domestic
Subsidiary” means a Restricted Subsidiary that is not a Foreign
Subsidiary.
“EBITDA”
means, with respect to any Person for any period, the Consolidated Net Income
of
such Person for such period plus, without duplication, to the extent the same
was deducted in calculating Consolidated Net Income:
(1)
Consolidated
Taxes; plus
(2)
Consolidated
Interest Expense;
plus
(3)
Consolidated
Non-cash Charges;
plus
(4)
business
optimization expenses and other restructuring charges or expenses (which, for
the avoidance of doubt, shall include, without limitation, the effect of
inventory optimization programs, plant closures, retention, systems
establishment costs and excess pension charges);
provided
that
with respect to each business optimization expense or other restructuring
charge, the Issuer shall have delivered to the Trustee an Officers
’
Certificate specifying and quantifying such expense or charge and stating that
such expense or charge is a business optimization expense or other restructuring
charge, as the case may be;
plus
(5)
the
amount of management, monitoring, consulting and advisory fees and related
expenses paid to the Sponsors (or any accruals relating to such fees and related
expenses) during such period pursuant to the terms of the agreements between
the
Sponsors and the Issuer and its Subsidiaries as described with particularity
in
the Offering Memorandum and as in effect on the Issue Date;
less,
without duplication,
(6)
non-cash
items increasing Consolidated Net Income for such period (excluding the
recognition of deferred revenue or any items which represent the reversal of
any
accrual of, or cash reserve for, anticipated cash charges in any prior period
and any items for which cash was received in a prior period).
“Equity
Interests” means Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible
into,
or exchangeable for, Capital Stock).
“Equity
Offering” means any public or private sale after the Issue Date of common stock
or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer,
as applicable (other than Disqualified Stock), other than:
(1)
public
offerings with respect to the Issuer
’
s
or such
direct or indirect parent
’
s
common
stock registered on Form S-8; and
(2)
any
such
public or private sale that constitutes an Excluded Contribution.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.
“Exchange
Offer Registration Statement” means the registration statement filed with the
SEC in connection with the Registered Exchange Offer.
“Excluded
Contributions” means the Cash Equivalents or other assets (valued at their Fair
Market Value as determined in good faith by senior management or the Board
of
Directors of the Issuer) received by the Issuer after the Issue Date
from:
(1)
contributions
to its common equity capital, and
(2)
the
sale
(other than to a Subsidiary of the Issuer or to any Subsidiary management equity
plan or stock option plan or any other management or employee benefit plan
or
agreement) of Capital Stock (other than Disqualified Stock and Designated
Preferred Stock) of the Issuer,
in
each
case designated as Excluded Contributions pursuant to an Officers’ Certificate
on or promptly after the date such capital contributions are made or the date
such Capital Stock is sold, as the case may be.
“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.
“First
Lien Agent” has the meaning given to such term in the Intercreditor Agreement.
“First
Priority After-Acquired Property” means any property (other than the initial
collateral) of the Issuer or any Guarantor that secures any Secured Bank
Indebtedness.
“First
Priority Lien Obligations” means (i) all Secured Bank Indebtedness, (ii) all
other Obligations (not constituting Indebtedness) of the Issuer and its
Restricted Subsidiaries under the agreements governing Secured Bank Indebtedness
and (iii) all other Obligations of the Issuer or any of its Restricted
Subsidiaries in respect of Hedging Obligations or Obligations in respect of
cash
management services, in each case owing to a Person that is a holder of
Indebtedness described in clause (i) or Obligations described in clause (ii)
or
an Affiliate of such holder at the time of entry into such Hedging Obligations
or Obligations in respect of cash management services.
“Fixed
Charge Coverage Ratio” means, with respect to any Person for any period, the
ratio of EBITDA of such Person for such period to the Fixed Charges of such
Person for such period. In the event that the Issuer or any of its Restricted
Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other
than
in the case of revolving credit borrowings or revolving advances under any
Qualified Receivables Financing, in which case interest expense shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period) or issues, repurchases or redeems Disqualified Stock or
Preferred Stock subsequent to the commencement of the period for which the
Fixed
Charge Coverage Ratio is being calculated but prior to the event for which
the
calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such Incurrence, repayment, repurchase or redemption of Indebtedness, or
such
issuance, repurchase or redemption of Disqualified Stock or Preferred Stock,
as
if the same had occurred at the beginning of the applicable four-quarter
period.
For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as determined
in accordance with GAAP), in each case with respect to an operating unit of
a
business, and any
operational
changes that the Issuer or any of its Restricted Subsidiaries has determined
to
make and/or made after the Issue Date and during the four-quarter reference
period or subsequent to such reference period and on or prior to or
simultaneously with the Calculation Date (each, for purposes of this definition,
a “pro forma event”) shall be calculated on a pro forma basis assuming that all
such Investments, acquisitions, dispositions, mergers, consolidations (including
the Transactions) discontinued operations and operational changes (and the
change of any associated fixed charge obligations and the change in EBITDA
resulting therefrom) had occurred on the first day of the four-quarter reference
period. If since the beginning of such period any Person that subsequently
became a Restricted Subsidiary or was merged with or into the Issuer or any
Restricted Subsidiary since the beginning of such period shall have made any
Investment, acquisition, disposition, merger, consolidation, discontinued
operation or operational change, in each case with respect to an operating
unit
of a business, that would have required adjustment pursuant to this definition,
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
thereto for such period as if such Investment, acquisition, disposition,
discontinued operation, merger, consolidation or operational change had occurred
at the beginning of the applicable four-quarter period.
For
purposes of this definition, whenever pro forma effect is to be given to any
pro
forma event, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Issuer. Any such pro forma
calculation may include adjustments appropriate, in the reasonable good faith
determination of the Issuer as set forth in an Officers’ Certificate, to reflect
(1) operating expense reductions and other operating improvements or synergies
reasonably expected to result from the applicable pro forma event (including,
to
the extent applicable, from the Transactions), and (2) all adjustments of the
nature used in connection with the calculation of “Adjusted EBITDA” as set forth
in footnote 4 to the “Summary Historical and Unaudited Pro Forma Financial Data”
under “Offering Memorandum Summary” in the Offering Memorandum to the extent
such adjustments, without duplication, continue to be applicable to such
four-quarter period.
If
any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate
in
effect on the Calculation Date had been the applicable rate for the entire
period (taking into account any Hedging Obligations applicable to such
Indebtedness if such Hedging Obligation has a remaining term in excess of 12
months). Interest on a Capitalized Lease Obligation shall be deemed to accrue
at
an interest rate reasonably determined by a responsible financial or accounting
officer of the Issuer to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP. For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period. Interest on
Indebtedness that 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 rate, shall be deemed to have been based upon the rate actually chosen,
or, if none, then based upon such optional rate chosen as the Issuer may
designate.
“Fixed
Charges” means, with respect to any Person for any period, the sum, without
duplication, of:
(1)
Consolidated
Interest Expense of such Person for such period, and
(2)
all
cash
dividend payments (excluding items eliminated in consolidation) on any series
of
Preferred Stock or Disqualified Stock of such Person and its Restricted
Subsidiaries.
“Foreign
Subsidiary” means a Restricted Subsidiary not organized or existing under the
laws of the United States of America or any state or territory thereof or the
District of Columbia and any direct or indirect subsidiary of such Restricted
Subsidiary.
“GAAP”
means generally accepted accounting principles in the United States 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 have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date.
“Guarantee”
means any guarantee of the obligations of the Issuer under this Indenture and
the Securities by any Person in accordance with the provisions of this
Indenture.
“guarantee”
means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any
manner (including, without limitation, letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Indebtedness or other
obligations.
“Guarantor”
means any Person that Incurs a Guarantee;
provided
that
upon the release or discharge of such Person from its Guarantee in accordance
with this Indenture, such Person ceases to be a Guarantor.
“Hedging
Obligations” means, with respect to any Person, the obligations of such Person
under:
(1)
currency
exchange, interest rate or commodity swap agreements, currency exchange,
interest rate or commodity cap agreements and currency exchange, interest rate
or commodity collar agreements; and
(2)
other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange, interest rates or commodity prices.
“Holder”
means the Person in whose name a Security is registered on the Registrar’s
books.
“Incur”
means issue, assume, guarantee, incur or otherwise become liable for;
provided
,
however
,
that
any Indebtedness or Capital Stock of a Person existing at the time such Person
becomes a Subsidiary (whether by merger, amalgamation, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Person at
the
time it becomes a Subsidiary.
“Indebtedness”
means, with respect to any Person:
(1)
the
principal and premium (if any) of any indebtedness of such Person, whether
or
not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes,
debentures or similar instruments or letters of credit or bankers’ acceptances
(or, without duplication, reimbursement agreements in respect thereof), (c)
representing the deferred and unpaid purchase price of any property, except
any
such balance that constitutes a trade payable or similar obligation to a trade
creditor due within six months from the date on which it is Incurred, in each
case Incurred in the ordinary course of business, which purchase price is due
more than six months after the date of placing the property in service or taking
delivery and title thereto, (d) in respect of Capitalized Lease Obligations,
or
(e) representing any Hedging Obligations, if and to the extent that any of
the
foregoing indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability on a balance sheet (excluding the footnotes thereto)
of such Person prepared in accordance with GAAP;
(2)
to
the
extent not otherwise included, any obligation of such Person to be liable for,
or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another
Person (other than by endorsement of negotiable instruments for collection
in
the ordinary course of business);
(3)
to
the
extent not otherwise included, Indebtedness of another Person secured by a
Lien
on any asset owned by such Person (whether or not such Indebtedness is assumed
by such Person);
provided
,
however
,
that
the amount of such Indebtedness will be the lesser of: (a) the Fair Market
Value
of such asset at such date of determination, and (b) the amount of such
Indebtedness of such other Person; and
(4)
to
the
extent not otherwise included, with respect to the Issuer and its Restricted
Subsidiaries, the amount then outstanding (
i.e.
,
advanced, and received by, and available for use by, the Issuer or any of its
Restricted Subsidiaries) under any Receivables Financing (as set forth in the
books and records of the Issuer or any Restricted Subsidiary and confirmed
by
the agent, trustee or other representative of the institution or group providing
such Receivables Financing);
provided
,
however
,
that
notwithstanding the foregoing, Indebtedness shall be deemed not to include
(1)
Contingent Obligations incurred in the ordinary course of business and not
in
respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price
holdbacks in respect of a portion of the purchase price of an asset to satisfy
warranty or other unperformed obligations of the respective seller; (4)
Obligations under or in respect of Qualified Receivables Financing or (5)
obligations under the Acquisition Documents.
Notwithstanding
anything in this Indenture to the contrary, Indebtedness shall not include,
and
shall be calculated without giving effect to, the effects of Statement of
Financial Accounting Standards No. 133 and related interpretations to the extent
such effects would otherwise increase or decrease an amount of Indebtedness
for
any purpose under this Indenture as a result of accounting for any embedded
derivatives created by the terms of such Indebtedness; and any such amounts
that
would have constituted Indebtedness under this Indenture but for the application
of this sentence shall not be deemed an Incurrence of Indebtedness under this
Indenture.
“Indenture”
means this Indenture as amended or supplemented from time to time.
“Independent
Financial Advisor” means an accounting, appraisal or investment banking firm or
consultant, in each case of nationally recognized standing, that is, in the
good
faith determination of the Issuer, qualified to perform the task for which
it
has been engaged.
“Intercreditor
Agreement” means the intercreditor agreement among Credit Suisse, as agent under
the Credit Agreement Documents, the Trustee, the Issuer, Berry Plastics Group,
Inc. and each Guarantor, as it may be amended from time to time in accordance
with this Indenture.
“Interest
Period” means the period commencing on and including an interest payment date
and ending on and including the day immediately preceding the next succeeding
interest payment date, with the exception that the first Interest Period shall
commence on and include the Issue Date and end on and include December 14,
2006.
“Investment
Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any
other Rating Agency.
“Investment
Grade Securities” means:
(1)
securities
issued or directly and fully guaranteed or insured by the U.S. government or
any
agency or instrumentality thereof (other than Cash Equivalents),
(2)
securities
that have a rating equal to or higher than Baa3 (or equivalent) by
Moody
’
s
or BBB-
(or equivalent) by S&P, or an equivalent rating by any other Rating Agency,
but excluding any debt securities or loans or advances between and among the
Issuer and its Subsidiaries;
(3)
investments
in any fund that invests exclusively in investments of the type described in
clauses (1) and (2) which fund may also hold immaterial amounts of cash pending
investment and/or distribution, and
(4)
corresponding
instruments in countries other than the United States customarily utilized
for
high quality investments and in each case with maturities not exceeding two
years from the date of acquisition.
“Investments”
means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the form of loans (including guarantees),
advances or capital contributions (excluding accounts receivable, trade credit
and advances to customers and commission, travel and similar advances to
officers, employees and consultants made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities issued by any other Person and investments that
are required by GAAP to be classified on the balance sheet of the Issuer in
the
same manner as the other investments included in this definition to the extent
such transactions involve the transfer of cash or other property. For purposes
of the definition of “Unrestricted Subsidiary” and Section 4.04:
(1)
“Investments”
shall include the portion (proportionate to the Issuer’s equity interest in such
Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the
Issuer at the time that such Subsidiary is designated an Unrestricted
Subsidiary;
provided
,
however
,
that
upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer
shall be deemed to continue to have a permanent “Investment” in an Unrestricted
Subsidiary equal to an amount (if positive) equal to:
(a)
the
Issuer
’
s
“
Investment
”
in such
Subsidiary at the time of such redesignation less
(b)
the
portion (proportionate to the Issuer
’
s
equity
interest in such Subsidiary) of the Fair Market Value of the net assets of
such
Subsidiary at the time of such redesignation; and
(2)
any
property transferred to or from an Unrestricted Subsidiary shall be valued
at
its Fair Market Value at the time of such transfer, in each case as determined
in good faith by the Board of Directors of the Issuer.
“Issue
Date” means September 20, 2006, the date on which the Securities are originally
issued.
“Issuer”
means (i) Merger Sub, prior to the merger of Merger Sub with and into the
Company pursuant to the Merger Agreement, and (ii) the Company, but not any
of its Subsidiaries, following the merger.
“LIBOR,”
with respect to an Interest Period, will be the rate (expressed as a percentage
per annum) for deposits in U.S. dollars for a three-month period beginning
on
the second London Banking Day after the Determination Date that appears on
Telerate Page 3750 as of 11:00 a.m., London time, on the Determination Date.
If
Telerate Page 3750 does not include such a rate or is unavailable on a
Determination Date, the Calculation Agent will request the principal London
office of each of four major banks in the London interbank market, as selected
by the Calculation Agent, to provide such bank’s offered quotation (expressed as
a percentage per annum), as of approximately 11:00 a.m., London time, on such
Determination Date, to prime banks in the London interbank market for deposits
in a Representative Amount in U.S. dollars for a three-month period beginning
on
the second London Banking Day after the Determination Date. If at least two
such
offered quotations are so provided, the rate for the Interest Period will be
the
arithmetic mean of such quotations. If fewer than two such quotations are so
provided, the Calculation Agent will request each of three major banks in New
York City, as selected by the Calculation Agent, to provide such bank’s rate
(expressed as a percentage per annum), as of approximately 11:00 a.m., New
York
City time, on such Determination Date, for loans in a Representative Amount
in
U.S. dollars to leading European banks for a three-month period beginning on
the
second London Banking Day after the Determination Date. If at least two such
rates are so provided, the rate for the Interest Period will be the arithmetic
mean of such rates. If fewer than two such rates are so provided, then the
rate
for the Interest Period will be the rate in effect with respect to the
immediately preceding Interest Period.
“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest
in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction);
provided
that in
no event shall an operating lease be deemed to constitute a Lien.
“London
Banking Day” is any day on which dealings in U.S. dollars are transacted or,
with respect to any future date, are expected to be transacted in the London
interbank market.
“Management
Group” means the group consisting of the directors, executive officers and other
management personnel of the Issuer or any direct or indirect parent of the
Issuer, as the case may be, on the Issue Date together with (1) any new
directors whose election by such boards of directors or whose nomination for
election by the shareholders of the Issuer or any direct or indirect parent
of
the Issuer, as applicable, was approved by a vote of a majority of the directors
of the Issuer or any direct or indirect parent of the Issuer, as applicable,
then still in office who were either directors on the Issue Date or whose
election or nomination was previously so approved and (2) executive officers
and
other management personnel of the Issuer or any direct or indirect parent of
the
Issuer, as applicable, hired at a time when the directors on the Issue Date
together with the directors so approved constituted a majority of the directors
of the Issuer or any direct or indirect parent of the Issuer, as
applicable.
“Merger
Agreement” means the agreement and plan of merger, dated as of June 28, 2006, by
and among BPC Holding Corporation, Merger Sub and BPC Holding Acquisition Corp.,
a Delaware corporation, as amended, supplemented or modified from time to time
prior to the Issue Date or thereafter (so long as any amendment, supplement
or
modification after the Issue Date, together with all other amendments,
supplements and modifications after the Issue Date, taken as a whole, is not
more disadvantageous to the Holders in any material respect than the Merger
Agreement as in effect on the Issue Date).
“Merger
Sub” has the meaning given such term in the Preamble of this Indenture.
“Moody’s”
means Moody’s Investors Service, Inc. or any successor to the rating agency
business thereof.
“Net
Income” means, with respect to any Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of
Preferred Stock dividends.
“Net
Insurance Proceeds” means the insurance proceeds (excluding liability insurance
proceeds payable to the Trustee for any loss, liability or expense incurred
by
it and excluding the proceeds of business interruption insurance) or
condemnation awards actually received by the Issuer or any Restricted Subsidiary
as a result of the Destruction or Taking of all or any portion of the
Collateral, net of:
(1)
reasonable
out-of-pocket expenses and fees relating to such Taking or Destruction
(including, without limitation, expenses of attorneys and insurance adjusters);
and
(2)
repayment
of Indebtedness that is secured by the property or assets that are the subject
of such Taking or Destruction; provided that, in the case of any Destruction
or
Taking involving Collateral, the Lien securing such Indebtedness constitutes
a
Lien permitted by this Indenture to be senior to the Second Priority
Liens.
“Net
Proceeds” means the aggregate cash proceeds received by the Issuer or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received in respect of or upon the sale or other
disposition of any Designated Non-cash Consideration received in any Asset
Sale
and any cash payments received by way of deferred payment of principal pursuant
to a note or installment receivable or otherwise, but only as and when received,
but excluding the assumption by the acquiring Person of Indebtedness relating
to
the disposed assets or other consideration received in any other non-cash form),
net of the direct costs relating to such Asset Sale and the sale or disposition
of such Designated Non-cash Consideration (including, without limitation, legal,
accounting and investment banking fees, and brokerage and sales commissions),
and any relocation expenses Incurred as a result thereof, taxes paid or payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements related thereto), amounts required
to be applied to the repayment of principal, premium (if any) and interest
on
Indebtedness required (other than pursuant to Section 4.06(b)(i)) to be paid
as
a result of such transaction, and any deduction of appropriate amounts to be
provided by the Issuer as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such transaction and
retained by the Issuer after such sale or other disposition thereof, including,
without limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction.
“Obligations”
means any principal, interest, penalties, fees, indemnifications, reimbursements
(including, without limitation, reimbursement obligations with respect to
letters of credit and bankers’ acceptances), damages and other liabilities
payable under the documentation governing any Indebtedness;
provided
that
Obligations with respect to the Securities shall not include fees or
indemnifications in favor of the Trustee and other third parties other than
the
Holders of the Securities.
“Offering
Memorandum” means the offering memorandum relating to the offering of the
Original Securities dated September 15, 2006.
“Officer”
means the Chairman of the Board, Chief Executive Officer, Chief Financial
Officer, President, any Executive Vice President, Senior Vice President or
Vice
President, the Treasurer or the Secretary of the Issuer.
“Officers’
Certificate” means a certificate signed on behalf of the Issuer by two Officers
of the Issuer, one of whom must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer
of the Issuer that meets the requirements set forth in this
Indenture.
“Opinion
of Counsel” means a written opinion from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the Issuer or the
Trustee.
“Other
Second-Lien Obligations” means other Indebtedness of the Issuer and its
Restricted Subsidiaries that is equally and ratably secured with the Securities
and is designated by the Issuer as an Other Second-Lien Obligation.
“Pari
Passu Indebtedness” means:
(1)
with
respect to the Issuer, the Securities and any Indebtedness which ranks pari
passu in right of payment to the Securities; and
(2)
with
respect to any Guarantor, its Guarantee and any Indebtedness which ranks pari
passu in right of payment to such Guarantor
’
s
Guarantee.
“Permitted
Holders” means, at any time, each of (i) the Sponsors and (ii) the Management
Group. Any person or group whose acquisition of beneficial ownership constitutes
a Change of Control in respect of which a Change of Control Offer is made in
accordance with the requirements of this Indenture will thereafter, together
with its Affiliates, constitute an additional Permitted Holder.
“Permitted
Investments” means:
(1)
any
Investment in the Issuer or any Restricted Subsidiary;
(2)
any
Investment in Cash Equivalents or Investment Grade Securities;
(3)
any
Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person
if as a result of such Investment (a) such Person becomes a Restricted
Subsidiary of the Issuer, or (b) such Person, in one transaction or a series
of
related transactions, is merged, consolidated or amalgamated with or into,
or
transfers or conveys all or substantially all of its assets to, or is liquidated
into, the Issuer or a Restricted Subsidiary of the Issuer;
(4)
any
Investment in securities or other assets not constituting Cash Equivalents
and
received in connection with an Asset Sale made pursuant to the provisions of
Section 4.06 or any other disposition of assets not constituting an Asset
Sale;
(5)
any
Investment existing on, or made pursuant to binding commitments existing on,
the
Issue Date;
(6)
advances
to employees, taken together with all other advances made pursuant to this
clause (6), not to exceed $15.0 million at any one time
outstanding;
(7)
any
Investment acquired by the Issuer or any of its Restricted Subsidiaries (a)
in
exchange for any other Investment or accounts receivable held by the Issuer
or
any
such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable, or (b) as a result of a foreclosure by the
Issuer or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment
in
default;
(8)
Hedging
Obligations permitted under Section 4.03(b)(x);
(9)
any
Investment by the Issuer or any of its Restricted Subsidiaries in a Similar
Business having an aggregate Fair Market Value, taken together with all other
Investments made pursuant to this clause (9) that are at that time outstanding,
not to exceed the greater of (x) $100.0 million and (y) 4.5% of Total Assets
at
the time of such Investment (with the Fair Market Value of each Investment
being
measured at the time made and without giving effect to subsequent changes in
value); provided, however, that if any Investment pursuant to this clause (9)
is
made in any Person that is not a Restricted Subsidiary of the Issuer at the
date
of the making of such Investment and such Person becomes a Restricted Subsidiary
of the Issuer after such date, such Investment shall thereafter be deemed to
have been made pursuant to clause (1) above and shall cease to have been made
pursuant to this clause (9) for so long as such Person continues to be a
Restricted Subsidiary;
(10)
additional
Investments by the Issuer or any of its Restricted Subsidiaries having an
aggregate Fair Market Value, taken together with all other Investments made
pursuant to this clause (10) that are at that time outstanding, not to exceed
the greater of (x) $100.0 million and (y) 4.5% of Total Assets at the time
of
such Investment (with the Fair Market Value of each Investment being measured
at
the time made and without giving effect to subsequent changes in
value);
(11)
loans
and
advances to officers, directors and employees for business-related travel
expenses, moving expenses and other similar expenses, in each case Incurred
in
the ordinary course of business;
(12)
Investments
the payment for which consists of Equity Interests of the Issuer (other than
Disqualified Stock) or any direct or indirect parent of the Issuer, as
applicable; provided, however, that such Equity Interests will not increase
the
amount available for Restricted Payments under clause (C) of the definition
of
“
Cumulative
Credit
”
;
(13)
any
transaction to the extent it constitutes an Investment that is permitted by
and
made in accordance with the provisions of Section 4.07(b) (except transactions
described in clauses (ii), (vi), (vii) and (xi)(b) of such
Section);
(14)
Investments
consisting of the licensing or contribution of intellectual property pursuant
to
joint marketing arrangements with other Persons;
(15)
guarantees
issued in accordance with Sections 4.03 and 4.11;
(16)
Investments
consisting of or to finance purchases and acquisitions of inventory, supplies,
materials, services or equipment or purchases of contract rights or licenses
or
leases of intellectual property, in each case in the ordinary course of
business;
(17)
any
Investment in a Receivables Subsidiary or any Investment by a Receivables
Subsidiary in any other Person in connection with a Qualified Receivables
Financing, including Investments of funds held in accounts permitted or required
by the arrangements governing such Qualified Receivables Financing or any
related Indebtedness;
provided
,
however
,
that
any Investment in a Receivables Subsidiary is in the form of a Purchase Money
Note, contribution of additional receivables or an equity interest;
(18)
additional
Investments in joint ventures of the Issuer or any of its Restricted
Subsidiaries existing on the Issue Date not to exceed at any one time in the
aggregate outstanding, $15.0 million; and
(19)
Investments
of a Restricted Subsidiary of the Issuer acquired after the Issue Date or of
an
entity merged into, amalgamated with, or consolidated with the Issuer or a
Restricted Subsidiary of the Issuer in a transaction that is not prohibited
by
Section 5.01 after the Issue Date to the extent that such Investments were
not
made in contemplation of such acquisition, merger, amalgamation or consolidation
and were in existence on the date of such acquisition, merger, amalgamation
or
consolidation.
“Permitted
Liens” means, with respect to any Person:
(1)
pledges
or deposits by such Person under workmen
’
s
compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts (other than for
the
payment of Indebtedness) or leases to which such Person is a party, or deposits
to secure public or statutory obligations of such Person or deposits of cash
or
U.S. government bonds to secure surety or appeal bonds to which such Person
is a
party, or deposits as security for contested taxes or import duties or for
the
payment of rent, in each case Incurred in the ordinary course of
business;
(2)
Liens
imposed by law, such as carriers
’
,
warehousemen
’
s
and
mechanics
’
Liens,
in each case for sums not yet due or being contested in good faith by
appropriate proceedings or other Liens arising out of judgments or awards
against such Person with respect to which such Person shall then be proceeding
with an appeal or other proceedings for review;
(3)
Liens
for
taxes, assessments or other governmental charges not yet due or payable or
subject to penalties for nonpayment or which are being contested in good faith
by appropriate proceedings;
(4)
Liens
in
favor of issuers of performance and surety bonds or bid bonds or with respect
to
other regulatory requirements or letters of credit issued pursuant to the
request of and for the account of such Person in the ordinary course of its
business;
(5)
minor
survey exceptions, minor encumbrances, easements or reservations of, or rights
of others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions
as
to the use of real properties or Liens incidental to the conduct of the business
of such Person or to the ownership of its properties which were not Incurred
in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of said properties or materially impair their use
in
the operation of the business of such Person;
(6)
(A)
Liens
on assets of a Restricted Subsidiary that is not a Guarantor securing
Indebtedness of such Restricted Subsidiary, permitted to be Incurred pursuant
to
Section 4.03, (B) Liens securing an aggregate principal amount of First Priority
Lien Obligations not to exceed the greater of (x) the aggregate amount of
Indebtedness permitted to be incurred pursuant to clause (i) of Section 4.03(b)
and (y) the maximum principal amount of Indebtedness that, as of the date such
Indebtedness was Incurred, and after giving effect to the Incurrence of such
Indebtedness and the application of proceeds therefrom on such date, would
not
cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed 4.00
to
1.00, and (C) Liens securing Indebtedness permitted to be Incurred pursuant
to
clause (iv), (xii) or (xx) of Section 4.03(b) (
provided
that in
the case of clause (xx), such Lien does not extend to the property or assets
of
any Subsidiary of the Issuer other than a Foreign Subsidiary);
(7)
Liens
existing on the Issue Date;
(8)
Liens
on
assets, property or shares of stock of a Person at the time such Person becomes
a Subsidiary;
provided
,
however
,
that
such Liens are not created or Incurred in connection with, or in contemplation
of, such other Person becoming such a Subsidiary;
provided
,
further
,
however, that such Liens may not extend to any other property owned by the
Issuer or any Restricted Subsidiary of the Issuer);
(9)
Liens
on
assets or property at the time the Issuer or a Restricted Subsidiary of the
Issuer acquired the assets or property, including any acquisition by means
of a
merger, amalgamation or consolidation with or into the Issuer or any Restricted
Subsidiary of the Issuer; provided, however, that such Liens are not created
or
Incurred in connection with, or in contemplation of, such acquisition;
provided
,
further
,
however
,
that
the Liens may not extend to any other property owned by the Issuer or any
Restricted Subsidiary of the Issuer;
(10)
Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing
to
the Issuer or another Restricted Subsidiary of the Issuer permitted to be
Incurred in accordance with Section 4.03;
(11)
Liens
securing Hedging Obligations not incurred in violation of this Indenture;
provided
that
with respect to Hedging Obligations relating to Indebtedness, such Lien extends
only to the property securing such Indebtedness;
(12)
Liens
on
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;
(13)
leases
and subleases of real property which do not materially interfere with the
ordinary conduct of the business of the Issuer or any of its Restricted
Subsidiaries;
(14)
Liens
arising from Uniform Commercial Code financing statement filings regarding
operating leases entered into by the Issuer and its Restricted Subsidiaries
in
the ordinary course of business;
(15)
Liens
in
favor of the Issuer or any Guarantor;
(16)
Liens
on
accounts receivable and related assets of the type specified in the definition
of
“
Receivables
Financing
”
Incurred
in connection with a Qualified Receivables Financing;
(17)
deposits
made in the ordinary course of business to secure liability to insurance
carriers;
(18)
Liens
on
the Equity Interests of Unrestricted Subsidiaries;
(19)
grants
of
software and other technology licenses in the ordinary course of
business;
(20)
Liens
to
secure any refinancing, refunding, extension, renewal or replacement (or
successive refinancings, refundings, extensions, renewals or replacements)
as a
whole, or in part, of any Indebtedness secured by any Lien referred to in the
foregoing clauses (6)(B), (7), (8), (9), (10), (11) and (15);
provided
,
however
,
that
(x) such new Lien shall be limited to all or part of the same property that
secured the original Lien (plus improvements on such property), and (y) the
Indebtedness secured by such Lien at such time is not increased to any amount
greater than the sum of (A) the outstanding principal amount or, if greater,
committed amount of the Indebtedness described under clauses (6)(B), (7), (8),
(9), (10), (11) and (15) at the time the original Lien became a Permitted Lien
under this Indenture, and (B) an amount necessary to pay any fees and expenses,
including premiums, related to such refinancing, refunding, extension, renewal
or replacement;
provided
further
,
however
,
that in
the case of any Liens to secure any refinancing, refunding, extension or renewal
of Indebtedness secured by a Lien referred to in clause (6)(B), the principal
amount of any Indebtedness Incurred for such refinancing, refunding, extension
or renewal shall be deemed secured by a Lien under clause (6)(B) and not this
clause (20) for purposes of determining the principal amount of Indebtedness
outstanding under clause (6)(B), for purposes of clause (1) under Section
11.04(a) and for purposes of the definition of Secured Bank
Indebtedness;
(21)
Liens
on
equipment of the Issuer or any Restricted Subsidiary granted in the ordinary
course of business to the Issuer
’
s
or such
Restricted Subsidiary
’
s
client
at which such equipment is located;
(22)
judgment
and attachment Liens not giving rise to an Event of Default and notices of
lis
pendens and associated rights related to litigation being contested in good
faith by appropriate proceedings and for which adequate reserves have been
made;
(23)
Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of
business;
(24)
Liens
incurred to secure cash management services in the ordinary course of business;
and
(25)
other
Liens securing obligations incurred in the ordinary course of business which
obligations do not exceed $20.0 million at any one time
outstanding.
“Person”
means any individual, corporation, partnership, limited liability company,
joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other
entity.
“Preferred
Stock” means any Equity Interest with preferential right of payment of dividends
or upon liquidation, dissolution, or winding up.
“Purchase
Money Note” means a promissory note of a Receivables Subsidiary evidencing a
line of credit, which may be irrevocable, from the Issuer or any Subsidiary
of
the Issuer to a Receivables Subsidiary in connection with a Qualified
Receivables Financing, which note is intended to finance that portion of the
purchase price that is not paid by cash or a contribution of
equity.
“Qualified
Receivables Financing” means any Receivables Financing of a Receivables
Subsidiary that meets the following conditions:
(1)
the
Board
of Directors of the Issuer shall have determined in good faith that such
Qualified Receivables Financing (including financing terms, covenants,
termination events and other provisions) is in the aggregate economically fair
and reasonable to the Issuer and the Receivables Subsidiary;
(2)
all
sales
of accounts receivable and related assets to the Receivables Subsidiary are
made
at Fair Market Value (as determined in good faith by the Issuer);
and
(3)
the
financing terms, covenants, termination events and other provisions thereof
shall be market terms (as determined in good faith by the Issuer) and may
include Standard Securitization Undertakings.
The
grant
of a security interest in any accounts receivable of the Issuer or any of its
Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank
Indebtedness, Indebtedness in respect of the Securities or any Refinancing
Indebtedness with respect to the Securities shall not be deemed a Qualified
Receivables Financing.
“Rating
Agency” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P
ceases to rate the Securities for reasons outside of the Issuer’s control, a
“nationally
recognized
statistical rating organization” within the meaning of Rule 15cs-1(c)(2)(vi)(F)
under the Exchange Act selected by the Issuer or any direct or indirect parent
of the Issuer as a replacement agency for Moody’s or S&P, as the case may
be.
“Receivables
Fees” means distributions or payments made directly or by means of discounts
with respect to any participation interests issued or sold in connection with,
and all other fees paid to a Person that is not a Restricted Subsidiary in
connection with, any Receivables Financing.
“Receivables
Financing” means any transaction or series of transactions that may be entered
into by the Issuer or any of its Subsidiaries pursuant to which the Issuer
or
any of its Subsidiaries may sell, convey or otherwise transfer to (a) a
Receivables Subsidiary (in the case of a transfer by the Issuer or any of its
Subsidiaries); and (b) any other Person (in the case of a transfer by a
Receivables Subsidiary), or may grant a security interest in, any accounts
receivable (whether now existing or arising in the future) of the Issuer or
any
of its Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing such accounts receivable, all contracts
and
all guarantees or other obligations in respect of such accounts receivable,
proceeds of such accounts receivable and other assets which are customarily
transferred or in respect of which security interests are customarily granted
in
connection with asset securitization transactions involving accounts receivable
and any Hedging Obligations entered into by the Issuer or any such Subsidiary
in
connection with such accounts receivable.
“Receivables
Repurchase Obligation” means any obligation of a seller of receivables in a
Qualified Receivables Financing to repurchase receivables arising as a result
of
a breach of a representation, warranty or covenant or otherwise, including
as a
result of a receivable or portion thereof becoming subject to any asserted
defense, dispute, off-set or counterclaim of any kind as a result of any action
taken by, any failure to take action by or any other event relating to the
seller.
“Receivables
Subsidiary” means a Wholly Owned Restricted Subsidiary of the Issuer (or another
Person formed for the purposes of engaging in Qualified Receivables Financing
with the Issuer in which the Issuer or any Subsidiary of the Issuer makes an
Investment and to which the Issuer or any Subsidiary of the Issuer transfers
accounts receivable and related assets) which engages in no activities other
than in connection with the financing of accounts receivable of the Issuer
and
its Subsidiaries, all proceeds thereof and all rights (contractual or other),
collateral and other assets relating thereto, and any business or activities
incidental or related to such business, and which is designated by the Board
of
Directors of the Issuer (as provided below) as a Receivables Subsidiary
and:
(a)
no
portion of the Indebtedness or any other obligations (contingent or otherwise)
of which (i) is guaranteed by the Issuer or any other Subsidiary of the Issuer
(excluding guarantees of obligations (other than the principal of and interest
on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates the Issuer or any other Subsidiary of the Issuer in
any
way other than pursuant to Standard Securitization Undertakings, or (iii)
subjects any property or asset of the Issuer or any other Subsidiary of the
Issuer, directly or indirectly, contingently or
otherwise,
to the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings;
(b)
with
which neither the Issuer nor any other Subsidiary of the Issuer has any material
contract, agreement, arrangement or understanding other than on terms which
the
Issuer reasonably believes to be no less favorable to the Issuer or such
Subsidiary than those that might be obtained at the time from Persons that
are
not Affiliates of the Issuer; and
(c)
to
which
neither the Issuer nor any other Subsidiary of the Issuer has any obligation
to
maintain or preserve such entity
’
s
financial condition or cause such entity to achieve certain levels of operating
results.
Any
such
designation by the Board of Directors of the Issuer shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors of the Issuer giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing conditions.
“Representative”
means the trustee, agent or representative (if any) for an issue of
Indebtedness; provided that if, and for so long as, such Indebtedness lacks
such
a Representative, then the Representative for such Indebtedness shall at all
times constitute the holder or holders of a majority in outstanding principal
amount of obligations under such Indebtedness.
“Representative
Amount” means a principal amount of not less than $1,000,000 for a single
transaction in the relevant market at the relevant time.
“Restricted
Investment” means an Investment other than a Permitted Investment.
“Restricted
Subsidiary” means, with respect to any Person, any Subsidiary of such Person
other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated
in this Indenture, all references to Restricted Subsidiaries shall mean
Restricted Subsidiaries of the Issuer.
“Sale/Leaseback
Transaction” means an arrangement relating to property now owned or hereafter
acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a
Restricted Subsidiary transfers such property to a Person and the Issuer or
such
Restricted Subsidiary leases it from such Person, other than leases between
the
Issuer and a Restricted Subsidiary of the Issuer or between Restricted
Subsidiaries of the Issuer.
“S&P”
means Standard & Poor’s Ratings Group or any successor to the rating agency
business thereof.
“SEC”
means the Securities and Exchange Commission.
“Security
Agreement” means the Collateral Agreement dated as of the date hereof among the
Issuer, the Guarantors and the Collateral Agent, as the same may be amended,
amended and restated or otherwise modified from time to time.
“Second
Priority Liens” means the Liens securing the Securities
Obligations.
“Secured
Bank Indebtedness” means any Bank Indebtedness that is secured by a Permitted
Lien incurred or deemed incurred pursuant to clause (6)(B) of the definition
of
Permitted Lien.
“Secured
Indebtedness” means any Indebtedness secured by a Lien.
“Secured
Indebtedness Leverage Ratio” means, with respect to any Person at any date, the
ratio of (i) Secured Indebtedness of such Person and its Restricted Subsidiaries
as of such date of calculation (determined on a consolidated basis in accordance
with GAAP) that constitutes First Priority Lien Obligations to (ii) EBITDA
of
such Person for the four full fiscal quarters for which internal financial
statements are available immediately preceding such date on which such
additional Indebtedness is Incurred. In the event that the Issuer or any of
its
Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness
subsequent to the commencement of the period for which the Secured Indebtedness
Leverage Ratio is being calculated but prior to the event for which the
calculation of the Secured Indebtedness Leverage Ratio is made (the “Secured
Leverage Calculation Date”), then the Secured Indebtedness Leverage Ratio shall
be calculated giving pro forma effect to such Incurrence, repayment, repurchase
or redemption of Indebtedness as if the same had occurred at the beginning
of
the applicable four-quarter period;
provided
that the
Issuer may elect, pursuant to an Officers’ Certificate delivered to the Trustee
to treat all or any portion of the commitment under any Indebtedness as being
Incurred such time, in which case any subsequent Incurrence of Indebtedness
under such commitment shall not be deemed, for purposes of this calculation,
to
be an Incurrence at such subsequent time.
For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as determined
in accordance with GAAP), in each case with respect to an operating unit of
a
business, and any operational changes that the Issuer or any of its Restricted
Subsidiaries has determined to make and/or made after the Issue Date and during
the four-quarter reference period or subsequent to such reference period and
on
or prior to or simultaneously with the Secured Leverage Calculation Date (each,
for purposes of this definition, a “pro forma event”) shall be calculated on a
pro forma basis assuming that all such Investments, acquisitions, dispositions,
mergers, consolidations (including the Transactions), discontinued operations
and other operational changes (and the change of any associated Indebtedness
and
the change in EBITDA resulting therefrom) had occurred on the first day of
the
four-quarter reference period. If since the beginning of such period any Person
that subsequently became a Restricted Subsidiary or was merged with or into
the
Issuer or any Restricted Subsidiary since the beginning of such period shall
have made any Investment, acquisition, disposition, merger, consolidation,
discontinued operation or operational change, in each case with respect to
an
operating unit of a business, that would have required adjustment pursuant
to
this definition, then the Secured Indebtedness Leverage Ratio shall be
calculated giving pro forma effect thereto for such period as if such
Investment, acquisition, disposition, discontinued operation, merger,
consolidation or operational change had occurred at the beginning of the
applicable four-quarter period.
For
purposes of this definition, whenever pro forma effect is to be given to any
pro
forma event, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Issuer. Any such pro forma
calculation may include adjustments appropriate, in the reasonable good faith
determination of the Issuer as set forth in an Officers’ Certificate, to reflect
(1) operating expense reductions and other operating improvements or synergies
reasonably expected to result from the applicable pro forma event (including,
to
the extent applicable, from the Transactions), and (2) all adjustments of the
nature used in connection with the calculation of “Adjusted EBITDA” as set forth
in footnote 4 to the “Summary Historical and Unaudited Pro Forma Financial Data”
under “Offering Memorandum Summary” in the Offering Memorandum to the extent
such adjustments, without duplication, continue to be applicable to such
four-quarter period.
“Securities”
has the meaning given such term in the Preamble to this Indenture.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the SEC promulgated thereunder.
“Securities
Obligations” means all Obligations in respect of the Securities, the Guarantees
and the Indenture.
“Security
Documents” means the security agreements, pledge agreements, mortgages,
collateral assignments and related agreements, as amended, supplemented,
restated, renewed, refunded, replaced, restructured, repaid, refinanced or
otherwise modified from time to time, creating the security interests in the
Collateral as contemplated by this Indenture.
“Senior
Subordinated Note Purchase Agreement” means the note purchase agreement, dated
as of the date hereof, by and among the Issuer, GS Mezzanine Partners 2006
Onshore Fund, L.P. and its affiliated mezzanine investment funds and their
subsidiaries and Goldman, Sachs & Co., providing for the issuance of the
Senior Subordinated Notes.
“Senior
Subordinated Notes” means the 11% Senior Subordinated Notes due 2016 of the
Issuer to be issued on the Issue Date.
“Significant
Subsidiary” means any Restricted Subsidiary that would be a “Significant
Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
“Similar
Business” means a business, the majority of whose revenues are derived from the
activities of the Issuer and its Subsidiaries as of the Issue Date or any
business or activity that is reasonably similar or complementary thereto or
a
reasonable extension, development or expansion thereof or ancillary
thereto.
“Sponsors”
means (1) Apollo Management, L.P., Graham Partners, Inc. and any of their
respective Affiliates (collectively, the “Apollo Sponsors”) and (2) any Person
that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act, or any successor provision) with any Apollo Sponsors;
provided
that any
Apollo Sponsor (x) owns a majority of the voting power and (y) controls a
majority of the Board of Directors of the Issuer.
“Standard
Securitization Undertakings” means representations, warranties, covenants,
indemnities and guarantees of performance entered into by the Issuer or any
Subsidiary of the Issuer which the Issuer has determined in good faith to be
customary in a Receivables Financing including, without limitation, those
relating to the servicing of the assets of a Receivables Subsidiary, it being
understood that any Receivables Repurchase Obligation shall be deemed to be
a
Standard Securitization Undertaking.
“Stated
Maturity” means, with respect to any security, the date specified in such
security as the fixed date on which the final payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
“Subordinated
Indebtedness” means (a) with respect to the Issuer, any Indebtedness of the
Issuer which is by its terms subordinated in right of payment to the Securities,
and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which
is by its terms subordinated in right of payment to its Guarantee.
“Subsidiary”
means, with respect to any Person, (1) any corporation, association or other
business entity (other than a partnership, joint venture or limited liability
company) of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to vote
in
the election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person or
one
or more of the other Subsidiaries of that Person or a combination thereof,
and
(2) any partnership, joint venture or limited liability company of which (x)
more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general and limited partnership interests, as applicable,
are owned or controlled, directly or indirectly, by such Person or one or more
of the other Subsidiaries of that Person or a combination thereof, whether
in
the form of membership, general, special or limited partnership interests or
otherwise, and (y) such Person or any Subsidiary of such Person is a controlling
general partner or otherwise controls such entity.
“Taking”
means any taking of all or any portion of the Collateral by condemnation or
other eminent domain proceedings, pursuant to any law, general or special,
or by
reason of the temporary requisition of the use or occupancy of all or any
portion of the Collateral by any governmental authority, civil or military,
or
any sale pursuant to the exercise by any such governmental authority of any
right which it may then have to purchase or designate a purchaser or to order
a
sale of all or any portion of the Collateral.
“Tax
Distributions” means any distributions described in Section
4.04(b)(xii).
“TIA”
means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as
in
effect on the date of this Indenture.
“Total
Assets” means the total consolidated assets of the Issuer and its Restricted
Subsidiaries, as shown on the most recent balance sheet of the
Issuer.
“Transactions”
means the Acquisition and the transactions related thereto, the offering of
the
Securities, the issuance and sale of the Senior Subordinated Notes on the Issue
Date and borrowings made pursuant to the Credit Agreement on the Issue
Date.
“Treasury
Rate” means, with respect to the Fixed Rate Notes, as of the applicable
redemption date, the yield to maturity as of such redemption date of United
States Treasury securities with a constant maturity (as compiled and published
in the most recent Federal Reserve Statistical Release H.15 (519) that has
become publicly available at least two business days prior to such redemption
date (or, if such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to the period from
such redemption date to September 15, 2010; provided, however, that if the
period from such redemption date to September 15, 2010 is less than one year,
the weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year will be used.
“Trust
Officer” means:
(1)
any
officer within the corporate trust department of the Trustee, including any
vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such Person
’
s
knowledge of and familiarity with the particular subject, and
(2)
who
shall
have direct responsibility for the administration of this
Indenture.
“Trustee”
means the party named as such in this Indenture until a successor replaces
it
and, thereafter, means the successor.
“Uniform
Commercial Code” means the New York Uniform Commercial Code as in effect from
time to time.
“Unrestricted
Subsidiary” means:
(1)
any
Subsidiary of the Issuer that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors of such Person in the
manner provided below; and
(2)
any
Subsidiary of an Unrestricted Subsidiary.
The
Board
of Directors of the Issuer may designate any Subsidiary of the Issuer (including
any newly acquired or newly formed Subsidiary of the Issuer) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Equity Interests or Indebtedness of, or owns or holds any Lien on any
property of, the Issuer or any other Subsidiary of the Issuer that is not a
Subsidiary of the Subsidiary to be so designated; provided, however, that the
Subsidiary to be so designated and its Subsidiaries do not at the time of
designation have and do not thereafter Incur any Indebtedness pursuant to which
the lender has recourse to any of
the
assets of the Issuer or any of its Restricted Subsidiaries; provided, further,
however, that either:
(a)
the
Subsidiary to be so designated has total consolidated assets of $1,000 or less;
or
(b)
if
such
Subsidiary has consolidated assets greater than $1,000, then such designation
would be permitted under Section 4.04.
The
Board
of Directors of the Issuer may designate any Unrestricted Subsidiary to be
a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation:
(x)
(1)
the
Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.03(a) or (2) the Fixed Charge
Coverage Ratio for the Issuer and its Restricted Subsidiaries would be greater
than such ratio for the Issuer and its Restricted Subsidiaries immediately
prior
to such designation, in each case on a pro forma basis taking into account
such
designation, and
(y)
no
Event
of Default shall have occurred and be continuing.
Any
such
designation by the Board of Directors of the Issuer shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors of the Issuer giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing provisions.
“U.S.
Government Obligations” means securities that are:
(1)
direct
obligations of the United States of America for the timely payment of which
its
full faith and credit is pledged, or
(2)
obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the timely payment of which
is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America,
which,
in
each case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any such
U.S. Government Obligations or a specific payment of principal of or interest
on
any such U.S. Government Obligations held by such custodian for the account
of
the holder of such depository receipt;
provided
that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S.
Government Obligations evidenced by such depository receipt.
“Voting
Stock” of any Person as of any date means the Capital Stock of such Person that
is at the time entitled to vote in the election of the Board of Directors of
such Person.
“Weighted
Average Life to Maturity” means, when applied to any Indebtedness or
Disqualified Stock, as the case may be, at any date, the quotient obtained
by
dividing (1) the sum of the products of the number of years from the date of
determination to the date of each successive scheduled principal payment of
such
Indebtedness or redemption or similar payment with respect to such Disqualified
Stock multiplied by the amount of such payment, by (2) the sum of all such
payments.
“Wholly
Owned Restricted Subsidiary” is any Wholly Owned Subsidiary that is a Restricted
Subsidiary.
“Wholly
Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the
outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares or shares required to be held by Foreign
Subsidiaries) shall at the time be owned by such Person or by one or more Wholly
Owned Subsidiaries of such Person.
SECTION
1.02.
Other
Definitions
.
Term
|
Defined
in
Section
|
|
|
“Additional
Interest”
|
Appendix
A
|
“Affiliate
Transaction”
|
4.07
|
“Appendix”
|
Preamble
|
“Asset
Sale Offer”
|
4.06(b)
|
“Bankruptcy
Law”
|
6.01
|
“Blockage
Notice”
|
10.03
|
“covenant
defeasance option”
|
8.01(c)
|
“Custodian”
|
6.01
|
“Definitive
Security”
|
Appendix
A
|
“Depository”
|
Appendix
A
|
“Euroclear”
|
Appendix
A
|
“Event
of Default”
|
6.01
|
“Excess
Proceeds”
|
4.06(b)
|
“Exchange
Fixed Rate Notes”
|
Preamble
|
“Exchange
Floating Rate Notes”
|
Preamble
|
“Exchange
Securities”
|
Preamble
|
“Fixed
Rate Notes”
|
Preamble
|
“Floating
Rate Notes”
|
Preamble
|
“Global
Securities Legend”
|
Appendix
A
|
“Guarantee
Blockage Notice”
|
12.03
|
“Guarantee
Payment Blockage Period”
|
12.03
|
“Guaranteed
Obligations”
|
12.01(a)
|
“IAI”
|
Appendix
A
|
“incorporated
provision”
|
13.01
|
“Initial
Purchasers”
|
Appendix
A
|
“Initial
Securities”
|
Preamble
|
“legal
defeasance option”
|
8.01
|
“Notice
of Default”
|
6.01
|
“Offer
Period”
|
4.06(d)
|
“Original
Fixed Rate Notes”
|
Preamble
|
“Original
Floating Rate Notes”
|
Preamble
|
“Original
Securities”
|
Preamble
|
“pay
its Guarantee”
|
12.03
|
“pay
the Securities”
|
10.03
|
“Paying
Agent”
|
2.04(a)
|
“Payment
Blockage Period”
|
10.03
|
“protected
purchaser”
|
2.08
|
“Purchase
Agreement”
|
Appendix
A
|
“QIB”
|
Appendix
A
|
“Refinancing
Indebtedness”
|
4.03(b)
|
“Refunding
Capital Stock”
|
4.04(b)
|
“Registered
Exchange Offer”
|
Appendix
A
|
“Registration
Agreement”
|
Appendix
A
|
“Registrar”
|
2.04(a)
|
“Regulation
S”
|
Appendix
A
|
“Regulation
S Securities”
|
Appendix
A
|
“Restricted
Payment”
|
4.04(a)
|
“Restricted
Period”
|
Appendix
A
|
“Restricted
Securities Legend”
|
Appendix
A
|
“Retired
Capital Stock”
|
4.04(b)
|
“Rule
501”
|
Appendix
A
|
“Rule
144A”
|
Appendix
A
|
“Rule
144A Securities”
|
Appendix
A
|
“Securities
Custodian”
|
Appendix
A
|
“Shelf
Registration Statement”
|
Appendix
A
|
“Successor
Company”
|
5.01(a)
|
“Successor
Guarantor”
|
5.01(b)
|
“Transfer”
|
5.01(b)
|
“Transfer
Restricted Securities”
|
Appendix
A
|
“Unrestricted
Definitive Security
|
Appendix
A
|
|
|
SECTION
1.03.
Incorporation
by Reference of Trust Indenture Act
.
This
Indenture incorporates by reference certain provisions of the TIA. The following
TIA terms have the following meanings:
“indenture
securities” means the Securities and the Guarantees.
“indenture
security holder” means a Holder.
“indenture
to be qualified” means this Indenture.
“indenture
trustee” or “institutional trustee” means the Trustee.
“obligor”
on the indenture securities means the Company, the Guarantors and any other
obligor on the Securities.
All
other
TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned
to them by such definitions.
SECTION
1.04.
Rules
of Construction
.
Unless
the context otherwise requires:
(a)
a
term
has the meaning assigned to it;
(b)
an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
(c)
“
or
”
is not
exclusive;
(d)
“
including
”
means
including without limitation;
(e)
words
in
the singular include the plural and words in the plural include the
singular;
(f)
unsecured
Indebtedness shall not be deemed to be subordinate or junior to Secured
Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(g)
the
principal amount of any non-interest bearing or other discount security at
any
date shall be the principal amount thereof that would be shown on a balance
sheet of the issuer dated such date prepared in accordance with
GAAP;
(h)
the
principal amount of any Preferred Stock shall be (i) the maximum liquidation
value of such Preferred Stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred Stock, whichever
is
greater;
(i)
unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP;
(j)
“
$
”
and
“
U.S.
Dollars
”
each
refer to United States dollars, or such other money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; and
(k)
whenever
in this Indenture or the Securities there is mentioned, in any context,
principal, interest or any other amount payable under or with respect to any
Securities, such mention shall be deemed to include mention of the payment
of
Additional
Interest, to the extent that, in such context, Additional Interest are, were
or
would be payable in respect thereof.
ARTICLE
2
THE
SECURITIES
SECTION
2.01.
Amount
of Securities
.
The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture on the Issue Date is $750,000,000, consisting
of
$525,000,000 in initial aggregate principal amount of Fixed Rate Notes and
$225,000,000 in initial aggregate principal amount of Floating Rate Notes.
The
Issuer may from time to time after the Issue Date issue Additional Securities
under this Indenture in an unlimited principal amount, so long as (i) the
Incurrence of the Indebtedness represented by such Additional Securities is
at
such time permitted by Section 4.03 and (ii) such Additional Securities are
issued in compliance with the other applicable provisions of this Indenture.
With respect to any Additional Securities issued after the Issue Date (except
for Securities authenticated and delivered upon registration of transfer of,
or
in exchange for, or in lieu of, other Securities pursuant to Section 2.07,
2.08,
2.09, 2.10, 3.06, 4.08(c) or the Appendix), there shall be (a) established
in or
pursuant to a resolution of the Board of Directors and (b) (i) set forth or
determined in the manner provided in an Officers’ Certificate or (ii)
established in one or more indentures supplemental hereto, prior to the issuance
of such Additional Securities:
(1)
the
aggregate principal amount of such Additional Securities which may be
authenticated and delivered under this Indenture,
(2)
the
issue
price and issuance date of such Additional Securities, including the date from
which interest on such Additional Securities shall accrue;
(3)
if
applicable, that such Additional Securities shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the
respective depositaries for such Global Securities, the form of any legend
or
legends which shall be borne by such Global Securities in addition to or in
lieu
of those set forth in Exhibits A-1 and A-2 hereto and any circumstances in
addition to or in lieu of those set forth in Section 2.2 of the Appendix in
which any such Global Security may be exchanged in whole or in part for
Additional Securities registered, or any transfer of such Global Security in
whole or in part may be registered, in the name or names of Persons other than
the depositary for such Global Security or a nominee thereof; and
(4)
if
applicable, that such Additional Securities that are not Transfer Restricted
Securities shall not be issued in the form of Initial Securities as set forth
in
Exhibits A-1 and A-2, but shall be issued in the form of Exchange Securities
as
set forth in Exhibits B-1 and B-2.
If
any of
the terms of any Additional Securities are established by action taken pursuant
to a resolution of the Board of Directors, a copy of an appropriate record
of
such action shall be certified by the Secretary or any Assistant Secretary
of
the Company and delivered to the
Trustee
at or prior to the delivery of the Officers’ Certificate or the indenture
supplemental hereto setting forth the terms of the Additional
Securities.
The
Fixed
Rate Notes, including any Additional Fixed Rate Notes, shall be treated as
a
single class for all purposes under this Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase. The
Floating Rate Notes, including any Additional Floating Rate Notes, shall be
treated as a single class for all purposes under this Indenture, including,
without limitation, waivers, amendments, redemptions and offers to
purchase.
SECTION
2.02.
Form
and Dating
.
Provisions relating to the Initial Securities, Additional Securities and the
Exchange Securities are set forth in the Appendix, which is hereby incorporated
in and expressly made a part of this Indenture. The (i) Initial Securities
and
the Trustee
’
s
certificate of authentication and (ii) any Additional Securities (if issued
as
Transfer Restricted Securities) and the Trustee
’
s
certificate of authentication shall each be substantially in the form of
Exhibits A-1 and A-2 hereto, which is hereby incorporated in and expressly
made
a part of this Indenture. The (i) Exchange Securities and the
Trustee
’
s
certificate of authentication and (ii) any Additional Securities issued other
than as Transfer Restricted Securities and the Trustee
’
s
certificate of authentication shall each be substantially in the form of
Exhibits B-1 and B-2 hereto, which is hereby incorporated in and expressly
made
a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Issuer or any Guarantor is subject, if any, or usage (
provided
that any
such notation, legend or endorsement is in a form acceptable to the Issuer).
Each Security shall be dated the date of its authentication. The Securities
shall be issuable only in registered form without interest coupons and in
denominations of $2,000 and any integral multiples of $1,000.
SECTION
2.03.
Execution
and Authentication
.
The
Trustee shall authenticate and make available for delivery upon a written order
of the Issuer signed by one Officer (a) Original Securities for original issue
on the date hereof in an aggregate principal amount of $750,000,000, consisting
of $525,000,000 in initial aggregate principal amount of Fixed Rate Notes and
$225,000,000 in initial aggregate principal amount of Floating Rate Notes (b)
subject to the terms of this Indenture, Additional Securities in an aggregate
principal amount to be determined at the time of issuance and specified therein
and (c) the Exchange Securities for issue in a Registered Exchange Offer
pursuant to the Registration Agreement for a like principal amount of Initial
Securities exchanged pursuant thereto or otherwise pursuant to an effective
registration statement under the Securities Act. Such order shall specify the
amount of the Securities to be authenticated, the date on which the original
issue of Securities is to be authenticated and whether the Securities are to
be
Initial Securities or Exchange Securities. Notwithstanding anything to the
contrary in the Indenture or the Appendix, any issuance of Additional Securities
after the Issue Date shall be in a principal amount of at least $2,000 and
integral multiples of $1,000 in excess of $2,000.
One
Officer shall sign the Securities for the Issuer by manual or facsimile
signature.
If
an
Officer whose signature is on a Security no longer holds that office at the
time
the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A
Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under
this
Indenture.
The
Trustee may appoint one or more authenticating agents reasonably acceptable
to
the Issuer to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall
be
furnished to the Issuer. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities 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
any
Registrar, Paying Agent or agent for service of notices and
demands.
SECTION
2.04.
Registrar
and Paying Agent
.
i)
The
Issuer shall maintain (i) an office or agency where Securities may be presented
for registration of transfer or for exchange (the
“
Registrar
”
)
and
(ii) an office or agency where Securities may be presented for payment (the
“
Paying
Agent
”
).
The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Issuer may have one or more co-registrars and one or more
additional paying agents. The term
“
Registrar
”
includes
any co-registrars. The term
“
Paying
Agent
”
includes
the Paying Agent and any additional paying agents. The Issuer initially appoints
the Trustee as Registrar, Paying Agent and the Securities Custodian with respect
to the Global Securities.
(b)
The
Issuer may enter into an appropriate agency agreement with any Registrar or
Paying Agent not a party to this Indenture, which shall incorporate the terms
of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such agent. The Issuer shall notify the Trustee of the name and
address of any such agent. If the Issuer fails to maintain a Registrar or Paying
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Issuer or any of its
domestically organized Wholly Owned Subsidiaries may act as Paying Agent or
Registrar.
(c)
The
Issuer may remove any Registrar or Paying Agent upon written notice to such
Registrar or Paying Agent and to the Trustee;
provided
,
however
,
that no
such removal shall become effective until (i) if applicable, acceptance of
an
appointment by a successor as evidenced by an appropriate agreement entered
into
by the Issuer and such successor Registrar or Paying Agent, as the case may
be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent
may
resign at any time upon written notice to the Issuer and the Trustee;
provided
,
however
,
that
the Trustee may resign as Paying Agent or Registrar only if the Trustee also
resigns as Trustee in accordance with Section 7.08.
SECTION
2.05.
Paying
Agent to Hold Money in Trust
.
Prior
to each due date of the principal of and interest on any Security, the Issuer
shall deposit with each Paying Agent (or if the Issuer or a Wholly Owned
Subsidiary is acting as Paying Agent, segregate and hold in trust for the
benefit of the Persons entitled thereto) a sum sufficient to pay such principal
and interest when so becoming due. The Issuer shall require each Paying Agent
(other than the Trustee) to agree in writing that a Paying Agent shall hold
in
trust for the benefit of Holders or
the
Trustee all money held by a Paying Agent for the payment of principal of and
interest on the Securities, and shall notify the Trustee of any default by
the
Issuer in making any such payment. If the Issuer or a Wholly Owned Subsidiary
of
the Issuer acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it in trust for the benefit of the Persons entitled
thereto. The Issuer at any time may require a Paying Agent to pay all money
held
by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section, a Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION
2.06.
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 Holders. If
the
Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar
to furnish, to the Trustee, in writing at least five Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders.
SECTION
2.07.
Transfer
and Exchange
.
The
Securities shall be issued in registered form and shall be transferable only
upon the surrender of a Security for registration of transfer and in compliance
with the Appendix. When a Security is presented to the Registrar with a request
to register a transfer, the Registrar shall register the transfer as requested
if its requirements therefor are met. When Securities are presented to the
Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Issuer shall execute and the Trustee shall authenticate
Securities at the Registrar
’
s
request. The Issuer may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section. The Issuer shall not be required to make,
and
the Registrar need not register, transfers or exchanges of Securities selected
for redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or of any Securities for a period of 15
days
before a selection of Securities to be redeemed.
Prior
to
the due presentation for registration of transfer of any Security, the Issuer,
the Guarantors, the Trustee, the Paying Agent and the Registrar may deem and
treat the Person in whose name a Security is registered as the absolute owner
of
such Security for the purpose of receiving payment of principal of and interest,
if any, on such Security and for all other purposes whatsoever, whether or
not
such Security is overdue, and none of the Issuer, any Guarantor, the Trustee,
the Paying Agent or the Registrar shall be affected by notice to the
contrary.
Any
Holder of a beneficial interest in a Global Security shall, by acceptance of
such beneficial interest, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained
by
(a) the Holder of such Global Security (or its agent) or (b) any Holder of
a
beneficial interest in such Global Security, and that ownership of a beneficial
interest in such Global Security shall be required to be reflected in a book
entry.
All
Securities issued upon any transfer or exchange pursuant to the terms of this
Indenture shall evidence the same debt and shall be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
SECTION
2.08.
Replacement
Securities
.
If a
mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Issuer shall issue and the Trustee shall authenticate a replacement Security
if the requirements of Section 8-405 of the Uniform Commercial Code are met,
such that the Holder (a) satisfies the Issuer or the Trustee within a reasonable
time after such Holder has notice of such loss, destruction or wrongful taking
and the Registrar does not register a transfer prior to receiving such
notification, (b) makes such request to the Issuer or the Trustee prior to
the
Security being acquired by a protected purchaser as defined in Section 8-303
of
the Uniform Commercial Code (a
“
protected
purchaser
”
)
and (c)
satisfies any other reasonable requirements of the Trustee. If required by
the
Trustee or the Issuer, such Holder shall furnish an indemnity bond sufficient
in
the judgment of the Trustee or the Issuer to protect the Issuer, the Trustee,
a
Paying Agent and the Registrar from any loss that any of them may suffer if
a
Security is replaced. The Issuer and the Trustee may charge the Holder for
their
expenses in replacing a Security (including without limitation,
attorneys
’
fees and
disbursements in replacing such Security). In the event any such mutilated,
lost, destroyed or wrongfully taken Security has become or is about to become
due and payable, the Issuer in its discretion may pay such Security instead
of
issuing a new Security in replacement thereof.
Every
replacement Security is an additional obligation of the Issuer.
The
provisions of this Section 2.08 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, lost, destroyed or wrongfully taken Securities.
SECTION
2.09.
Outstanding
Securities
.
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding. Subject to Section
13.06, a Security does not cease to be outstanding because the Issuer or an
Affiliate of the Issuer holds the Security.
If
a
Security is replaced pursuant to Section 2.08 (other than a mutilated Security
surrendered for replacement), it ceases to be outstanding unless the Trustee
and
the Issuer receive proof satisfactory to them that the replaced Security is
held
by a protected purchaser. A mutilated Security ceases to be outstanding upon
surrender of such Security and replacement thereof pursuant to Section
2.08.
If
a
Paying Agent segregates and holds in trust, in accordance with this Indenture,
on a redemption date or maturity date money sufficient to pay all principal
and
interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, and no Paying Agent
is
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest on them ceases to
accrue.
SECTION
2.10.
Temporary
Securities
.
In the
event that Definitive Securities are to be issued under the terms of this
Indenture, until such Definitive Securities are ready for delivery, the Issuer
may prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but
may
have variations that the Issuer considers appropriate for temporary Securities.
Without unreasonable delay, the Issuer shall prepare and the Trustee shall
authenticate Definitive Securities and make them available for delivery in
exchange for temporary Securities upon surrender of such temporary Securities
at
the office or agency of the Issuer, without charge to the Holder. Until such
exchange, temporary Securities shall be entitled to the same rights, benefits
and privileges as Definitive Securities.
SECTION
2.11.
Cancellation
.
The
Issuer at any time may deliver Securities to the Trustee for cancellation.
The
Registrar and each Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Securities surrendered for registration
of transfer, exchange, payment or cancellation and shall dispose of canceled
Securities in accordance with its customary procedures. The Issuer may not
issue
new Securities to replace Securities it has redeemed, paid or delivered to
the
Trustee for cancellation. The Trustee shall not authenticate Securities in
place
of canceled Securities other than pursuant to the terms of this
Indenture.
SECTION
2.12.
Defaulted
Interest
.
If the
Issuer defaults in a payment of interest on the Securities, the Issuer shall
pay
the defaulted interest then borne by the Securities (plus interest on such
defaulted interest to the extent lawful) in any lawful manner. The Issuer may
pay the defaulted interest to the Persons who are Holders on a subsequent
special record date. The Issuer shall fix or cause to be fixed any such special
record date and payment date to the reasonable satisfaction of the Trustee
and
shall promptly mail or cause to be mailed to each affected Holder a notice
that
states the special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION
2.13.
CUSIP
Numbers, ISINs, etc.
The
Issuer in issuing the Securities may use CUSIP numbers, ISINs and
“
Common
Code
”
numbers
(if then generally in use) and, if so, the Trustee shall use CUSIP numbers,
ISINs and
“
Common
Code
”
numbers
in notices of redemption as a convenience to Holders; provided, however, that
any such notice may state that no representation is made as to the correctness
of such numbers, either as printed on the Securities or as contained in any
notice of a redemption that reliance may be placed only on the other
identification numbers printed on the Securities and that any such redemption
shall not be affected by any defect in or omission of such numbers. The Issuer
shall advise the Trustee of any change in the CUSIP numbers, ISINs and
“
Common
Code
”
numbers.
SECTION
2.14.
Calculation
of Principal Amount of Securities
.
The
aggregate principal amount of the Securities, at any date of determination,
shall be the principal amount of the Securities outstanding at such date of
determination. With respect to any matter requiring consent, waiver, approval
or
other action of the Holders of a specified percentage of the principal amount
of
all the Securities, such percentage shall be calculated, on the relevant date
of
determination, by dividing (a) the principal amount, as of such date of
determination, of Securities, the Holders of which have so consented, by (b)
the
aggregate principal amount, as of such date of determination, of the Securities
then outstanding, in each case, as determined in
accordance
with the preceding sentence, Section 2.09 and Section 13.06 of this Indenture.
Any such calculation made pursuant to this Section 2.14 shall be made by the
Issuer and delivered to the Trustee pursuant to an Officers
’
Certificate.
ARTICLE
3
REDEMPTION
SECTION
3.01.
Redemption
.
The
Securities may be redeemed, in whole, or from time to time in part, subject
to
the conditions and at the redemption prices set forth in Paragraph 5 of the
form
of Securities set forth in Exhibits A-1 and A-2 and Exhibits B-1 and B-2 hereto,
which are hereby incorporated by reference and made a part of this Indenture,
together with accrued and unpaid interest to the redemption date.
SECTION
3.02.
Applicability
of Article
.
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION
3.03.
Notices
to Trustee
.
If the
Issuer elects to redeem Securities pursuant to the optional redemption
provisions of Paragraph 5 of the Security, it shall notify the Trustee in
writing of (i) the Section of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Securities
to be redeemed and (iv) the redemption price. The Issuer shall give notice
to
the Trustee provided for in this paragraph at least 30 days but not more than
60
days before a redemption date if the redemption is pursuant to Paragraph 5
of
the Security, unless a shorter period is acceptable to the Trustee. Such notice
shall be accompanied by an Officers
’
Certificate and Opinion of Counsel from the Issuer to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption
shall
be selected by the Company and given to the Trustee, which record date shall
be
not fewer than 15 days after the date of notice to the Trustee. Any such notice
may be canceled at any time prior to notice of such redemption being mailed
to
any Holder and shall thereby be void and of no effect.
SECTION
3.04.
Selection
of Securities to Be Redeemed
.
In the
case of any partial redemption, selection of Fixed Rate Notes or Floating Rate
Notes, as the case may be, for redemption will be made by the Trustee on a
pro
rata basis to the extent practicable; provided that no Securities of $2,000
or
less shall be redeemed in part. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $2,000. Securities and portions of them the Trustee
selects shall be in amounts of $2,000 or any integral multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption
also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be
redeemed.
SECTION
3.05.
Notice
of Optional Redemption
.
ii)
At least
30 days but not more than 60 days before a redemption date pursuant to Paragraph
5 of the Security, the Issuer shall mail or cause to be mailed by first-class
mail a notice of redemption to each Holder whose Securities are to be
redeemed.
Any
such
notice shall identify the Securities to be redeemed and shall
state:
(i)
the
redemption date;
(ii)
the
redemption price and the amount of accrued interest to the redemption
date;
(iii)
the
name
and address of the Paying Agent;
(iv)
that
Securities called for redemption must be surrendered to the Paying Agent to
collect the redemption price, plus accrued interest;
(v)
if
fewer
than all the outstanding Securities are to be redeemed, the certificate numbers
and principal amounts of the particular Securities to be redeemed, the aggregate
principal amount of Securities to be redeemed and the aggregate principal amount
of Securities to be outstanding after such partial redemption;
(vi)
that,
unless the Issuer defaults in making such redemption payment or the Paying
Agent
is prohibited from making such payment pursuant to the terms of this Indenture,
interest on Securities (or portion thereof) called for redemption ceases to
accrue on and after the redemption date;
(vii)
the
CUSIP
number, ISIN and/or
“
Common
Code
”
number,
if any, printed on the Securities being redeemed; and
(viii)
that
no
representation is made as to the correctness or accuracy of the CUSIP number
or
ISIN and/or
“
Common
Code
”
number,
if any, listed in such notice or printed on the Securities.
(b)
At
the
Issuer
’
s
request, the Trustee shall give the notice of redemption in the
Issuer
’
s
name
and at the Issuer
’
s
expense. In such event, the Issuer shall provide the Trustee with the
information required by this Section at least one Business Day prior to the
date
such notice is to be provided to Holders and such notice may not be canceled.
SECTION
3.06.
Effect
of Notice of Redemption
.
Once
notice of redemption is mailed in accordance with Section 3.05, Securities
called for redemption become due and payable on the redemption date and at
the
redemption price stated in the notice, except as provided in the final sentence
of paragraph 5 of the Securities. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price stated in the notice, plus
accrued interest, to, but not including, the redemption date;
provided
,
however
,
that if
the redemption date is after a regular record date and on or prior to the
interest payment date, the accrued interest shall be payable to the Holder
of
the redeemed Securities registered on the relevant record date. Failure to
give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
SECTION
3.07.
Deposit
of Redemption Price
.
With
respect to any Securities, prior to 10:00 a.m., New York City time, on the
redemption date, the Issuer shall deposit with the
Paying
Agent (or, if the Issuer or a Wholly Owned Subsidiary is the Paying Agent,
shall
segregate and hold in trust) money sufficient to pay the redemption price of
and
accrued interest on all Securities or portions thereof to be redeemed on that
date other than Securities or portions of Securities called for redemption
that
have been delivered by the Issuer to the Trustee for cancellation. On and after
the redemption date, interest shall cease to accrue on Securities or portions
thereof called for redemption so long as the Issuer has deposited with the
Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid
interest on, the Securities to be redeemed, unless the Paying Agent is
prohibited from making such payment pursuant to the terms of this
Indenture.
SECTION
3.08.
Securities
Redeemed in Part
.
Upon
surrender of a Security that is redeemed in part, the Issuer shall execute
and
the Trustee shall authenticate for the Holder (at the Issuer
’
s
expense) a new Security equal in principal amount to the unredeemed portion
of
the Security surrendered.
ARTICLE
4
COVENANTS
SECTION
4.01.
Payment
of Securities
.
The
Issuer shall promptly pay the principal of and interest on the Securities on
the
dates and in the manner provided in the Securities and in this Indenture. An
installment of principal of or interest shall be considered paid on the date
due
if on such date the Trustee or the Paying Agent holds as of 12:00 p.m. New
York
City time money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Holders on that date pursuant to the terms of this
Indenture.
The
Issuer shall pay interest on overdue principal at the rate specified therefor
in
the Securities, and it shall pay interest on overdue installments of interest
at
the same rate borne by the Securities to the extent lawful.
SECTION
4.02.
Reports
and Other Information
.
Notwithstanding that the Issuer may not be subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual
and
quarterly basis on forms provided for such annual and quarterly reporting
pursuant to rules and regulations promulgated by the SEC, the Issuer shall
file
with the SEC (and provide the Trustee and Holders with copies thereof, without
cost to each Holder, within 15 days after it files them with the
SEC),
(i)
within
the time period specified in the SEC
’
s
rules
and regulations, annual reports on Form 10-K (or any successor or comparable
form) containing the information required to be contained therein (or required
in such successor or comparable form),
(ii)
within
the time period specified in the SEC
’
s
rules
and regulations, reports on Form 10-Q (or any successor or comparable form)
containing the information required to be contained therein (or required in
such
successor or comparable form),
(iii)
promptly
from time to time after the occurrence of an event required to be therein
reported (and in any event within the time period specified in the
SEC
’
s
rules
and regulations), such other reports on Form 8-K (or any successor or comparable
form), and
(iv)
any
other
information, documents and other reports which the Issuer would be required
to
file with the SEC if it were subject to Section 13 or 15(d) of the Exchange
Act;
provided
,
however
,
that
the Issuer shall not be so obligated to file such reports with the SEC if the
SEC does not permit such filing, in which event the Issuer shall make available
such information to prospective purchasers of Securities, including by posting
such reports on the primary website of the Issuer or its Subsidiaries in
addition to providing such information to the Trustee and the Holders, in each
case within 15 days after the time the Issuer would be required to file such
information with the SEC if it were subject to Section 13 or 15(d) of the
Exchange Act.
(b)
In
the
event that:
(i)
the
rules
and regulations of the SEC permit the Issuer and any direct or indirect parent
of the Issuer to report at such parent entity
’
s
level
on a consolidated basis and
(ii)
such
parent entity of the Issuer is not engaged in any business in any material
respect other than incidental to its ownership, directly or indirectly, of
the
capital stock of the Issuer,
such
consolidated reporting at such parent entity’s level in a manner consistent with
that
described
in this Section 4.02 for the Issuer shall satisfy this Section
4.02.
(c)
The
Issuer shall make such information available to prospective investors upon
request. In addition, the Issuer shall, for so long as any Securities remain
outstanding during any period when it is not subject to Section 13 or 15(d)
of
the Exchange Act, or otherwise permitted to furnish the SEC with certain
information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the
Holders of the Securities and to prospective investors, upon their request,
the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Notwithstanding
the foregoing, the Issuer will be deemed to have furnished such reports referred
to above to the Trustee and the Holders if the Issuer has filed such reports
with the SEC via the EDGAR filing system and such reports are publicly
available. In addition, such requirements shall be deemed satisfied prior to
the
commencement of the exchange offer contemplated by the Registration Agreement
relating to the Securities or the effectiveness of the shelf registration
statement by the filing with the SEC of the Exchange Offer Registration
Statement and/or Shelf Registration Statement in accordance with the provisions
of such Registration Agreement, and any amendments thereto and such Registration
Statement and/or amendments thereto are filed at times that otherwise satisfy
the time requirements set forth in Section 4.02(a).
In
the
event that any direct or indirect parent of the Issuer is or becomes a Guarantor
of the Securities, the Issuer may satisfy its obligations under this Section
4.02 with respect to financial information relating to the Issuer by furnishing
financial information relating to such direct or indirect parent;
provided
that the
same is accompanied by consolidating information that explains in reasonable
detail the differences between the information relating to such direct or
indirect parent and any of its Subsidiaries other than the Issuer and its
Subsidiaries, on the one hand, and the information relating to the Issuer,
the
Guarantors and the other Subsidiaries of the Issuer on a standalone basis,
on
the other hand.
SECTION
4.03.
Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock
.
iii)
( i) The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness)
or issue any shares of Disqualified Stock; and (ii) the Issuer shall not permit
any of its Restricted Subsidiaries (other than a Guarantor) to issue any shares
of Preferred Stock; provided, however, that the Issuer and any Restricted
Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness
(including Acquired Indebtedness) or issue shares of Disqualified Stock and
any
Restricted Subsidiary may issue shares of Preferred Stock, in each case if
the
Fixed Charge Coverage Ratio of the Issuer for the most recently ended four
full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is Incurred
or such Disqualified Stock or Preferred Stock is issued would have been at
least
2.00 to 1.00 determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
Incurred, or the Disqualified Stock or Preferred Stock had been issued, as
the
case may be, and the application of proceeds therefrom had occurred at the
beginning of such four-quarter period.
(b)
The
limitations set forth in Section 4.03(a) shall not apply to:
(i)
the
Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under
the Credit Agreement and the issuance and creation of letters of credit and
bankers
’
acceptances thereunder (with letters of credit and bankers
’
acceptances being deemed to have a principal amount equal to the face amount
thereof) in the aggregate principal amount of $875.0 million plus an aggregate
principal amount outstanding at any one time that does not cause the Secured
Indebtedness Leverage Ratio of the Issuer to exceed 4.00 to 1.00, determined
on
a pro forma basis (including a pro forma application of the net proceeds
therefrom);
(ii)
the
Incurrence by the Issuer and the Guarantors of Indebtedness represented by
(i)
the Securities (not including any Additional Securities) and the Guarantees,
as
applicable (including the Exchange Securities and related guarantees thereof)
and (ii) the Senior Subordinated Notes (not including any additional Senior
Subordinated Notes) and the related guarantees thereof (including Senior
Subordinated Notes or exchange Senior Subordinated Notes issued as interest
thereon, exchange Senior Subordinated Notes and related guarantees
thereof);
(iii)
Indebtedness
existing on the Issue Date (other than Indebtedness described in clauses (i)
and
(ii) of this Section 4.03(b));
(iv)
Indebtedness
(including Capitalized Lease Obligations) Incurred by the Issuer or any of
its
Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of
its
Restricted Subsidiaries and Preferred Stock issued by any Restricted
Subsidiaries of the Issuer to finance (whether prior to or within 270 days
after) the purchase, lease, construction or improvement of property (real or
personal) or equipment (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets (but no other material
assets))
(v)
Indebtedness
Incurred by the Issuer or any of its Restricted Subsidiaries constituting
reimbursement obligations with respect to letters of credit and bank guarantees
issued in the ordinary course of business, including without limitation letters
of credit in respect of workers
’
compensation claims, health, disability or other benefits to employees or former
employees or their families or property, casualty or liability insurance or
self-insurance, and letters of credit in connection with the maintenance of,
or
pursuant to the requirements of, environmental or other permits or licenses
from
governmental authorities, or other Indebtedness with respect to reimbursement
type obligations regarding workers
’
compensation claims;
(vi)
Indebtedness
arising from agreements of the Issuer or a Restricted Subsidiary providing
for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred in connection with the Transactions or any other acquisition
or
disposition of any business, assets or a Subsidiary of the Issuer in accordance
with the terms of this Indenture, other than guarantees of Indebtedness Incurred
by any Person acquiring all or any portion of such business, assets or
Subsidiary for the purpose of financing such acquisition;
(vii)
Indebtedness
of the Issuer to a Restricted Subsidiary;
provided
that any
such Indebtedness owed to a Restricted Subsidiary that is not a Guarantor is
subordinated in right of payment to the obligations of the Issuer under the
Securities;
provided
,
further
,
that
any subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such Indebtedness (except
to
the Issuer or another Restricted Subsidiary) shall be deemed, in each case,
to
be an Incurrence of such Indebtedness;
(viii)
shares
of
Preferred Stock of a Restricted Subsidiary issued to the Issuer or another
Restricted Subsidiary;
provided
that any
subsequent issuance or transfer of any Capital Stock or any other event which
results in any Restricted Subsidiary that holds such shares of Preferred Stock
of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
other subsequent transfer of any such shares of Preferred Stock (except to
the
Issuer or another Restricted Subsidiary) shall be deemed, in each case, to
be an
issuance of shares of Preferred Stock;
(ix)
Indebtedness
of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary;
provided
that if
a Guarantor incurs such Indebtedness to a
Restricted
Subsidiary that is not a Guarantor, such Indebtedness is subordinated in right
of payment to the Guarantee of such Guarantor;
provided
,
further
,
that
any subsequent issuance or transfer of any Capital Stock or any other event
which results in any Restricted Subsidiary holding such Indebtedness ceasing
to
be a Restricted Subsidiary or any other subsequent transfer of any such
Indebtedness (except to the Issuer or another Restricted Subsidiary) shall
be
deemed, in each case, to be an Incurrence of such Indebtedness;
(x)
Hedging
Obligations that are not incurred for speculative purposes and either:
(1) for the purpose of fixing or hedging interest rate risk with respect to
any Indebtedness that is permitted by the terms of this Indenture to be
outstanding; (2) for the purpose of fixing or hedging currency exchange rate
risk with respect to any currency exchanges; or (3) for the purpose of fixing
or
hedging commodity price risk (including resin price risk) with respect to any
commodity purchases or sales;
(xi)
obligations
in respect of performance, bid, appeal and surety bonds and completion
guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary
course of business;
(xii)
Indebtedness
or Disqualified Stock of the Issuer or any Restricted Subsidiary of the Issuer
and Preferred Stock of any Restricted Subsidiary of the Issuer not otherwise
permitted hereunder in an aggregate principal amount, which when aggregated
with
the principal amount or liquidation preference of all other Indebtedness,
Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant
to
this clause (xii), does not exceed the greater of $100.0 million and 4.5% of
Total Assets at the time of Incurrence (it being understood that any
Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred
or outstanding for purposes of this clause (xii) but shall be deemed Incurred
for purposes of Section 4.03(a) from and after the first date on which the
Issuer, or the Restricted Subsidiary, as the case may be, could have Incurred
such Indebtedness under Section 4.03(a) without reliance upon this clause
(xii));
(xiii)
any
guarantee by the Issuer or a Guarantor of Indebtedness or other obligations
of
the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of
such Indebtedness Incurred by the Issuer or such Restricted Subsidiary is
permitted under the terms of this Indenture;
provided
that if
such Indebtedness is by its express terms subordinated in right of payment
to
the Securities or the Guarantee of such Restricted Subsidiary, as applicable,
any such guarantee of such Guarantor with respect to such Indebtedness shall
be
subordinated in right of payment to such Guarantor
’
s
Guarantee with respect to the Securities substantially to the same extent as
such Indebtedness is subordinated to the Securities or the Guarantee of such
Restricted Subsidiary, as applicable;
(xiv)
the
Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness
or Disqualified Stock or Preferred Stock of a Restricted Subsidiary
of
the
Issuer which serves to refund, refinance or defease any Indebtedness Incurred
or
Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a)
and clauses (ii), (iii), (iv), (xiv), (xv), (xix) and (xx) of this Section
4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred
to
so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock,
including any Indebtedness, Disqualified Stock or Preferred Stock Incurred
to
pay premiums and fees in connection therewith (subject to the following proviso,
“
Refinancing
Indebtedness
”
)
prior
to its respective maturity;
provided
,
however
,
that
such Refinancing Indebtedness:
(1)
has
a
Weighted Average Life to Maturity at the time such Refinancing Indebtedness
is
Incurred which is not less than the remaining Weighted Average Life to Maturity
of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or
refinanced;
(2)
has
a
Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity
of the Indebtedness being refunded or refinanced or (y) 91 days following the
last maturity date of the Securities;
(3)
to
the
extent such Refinancing Indebtedness refinances (a) Indebtedness junior to
the
Securities or the Guarantee of such Restricted Subsidiary, as applicable, such
Refinancing Indebtedness is junior to the Securities or the Guarantee of such
Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred
Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred
Stock;
(4)
is
Incurred in an aggregate amount (or if issued with original issue discount,
an
aggregate issue price) that is equal to or less than the aggregate amount (or
if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced plus premium, fees and expenses
Incurred in connection with such refinancing;
(5)
shall
not
include (x) Indebtedness of a Restricted Subsidiary of the Issuer that is not
a
Guarantor that refinances Indebtedness of the Issuer or a Restricted Subsidiary
that is a Guarantor, or (y) Indebtedness of the Issuer or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
and
(6)
in
the
case of any Refinancing Indebtedness Incurred to refinance Indebtedness
outstanding under clause (iv) or (xx) of this Section 4.03(b), shall be deemed
to have been Incurred and to be outstanding under such clause (iv) or (xx)
of
this Section 4.03(b), as applicable, and not this clause (xiv) for purposes
of
determining amounts outstanding under such clauses (iv) and (xix) of this
Section 4.03(b);
provided
,
further
,
that
subclauses (1) and (2) of this clause (xiv) shall not apply to any refunding
or
refinancing of any Secured Indebtedness constituting First Priority Lien
Obligations.
(xv)
Indebtedness,
Disqualified Stock or Preferred Stock of (x) the Issuer or any of its Restricted
Subsidiaries incurred to finance an acquisition or (y) Persons that are acquired
by the Issuer or any of its Restricted Subsidiaries or merged with or into
the
Issuer or any of its Restricted Subsidiaries in accordance with the terms of
this Indenture;
provided
,
however
,
that
after giving effect to such acquisition or merger either:
(1)
the
Issuer would be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence
of Section 4.03(a); or
(2)
the
Fixed
Charge Coverage Ratio of the Issuer would be greater than immediately prior
to
such acquisition or merger;
(xvi)
Indebtedness
Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that
is not recourse to the Issuer or any Restricted Subsidiary other than a
Receivables Subsidiary (except for Standard Securitization
Undertakings);
(xvii)
Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course of business;
provided
that
such Indebtedness is extinguished within five Business Days of its
Incurrence;
(xviii)
Indebtedness
of the Issuer or any Restricted Subsidiary supported by a letter of credit
or
bank guarantee issued pursuant to the Credit Agreement, in a principal amount
not in excess of the stated amount of such letter of credit;
(xix)
Contribution
Indebtedness;
(xx)
Indebtedness
of Foreign Subsidiaries, provided, however, that the aggregate principal amount
of Indebtedness Incurred under this clause (xx), when aggregated with the
principal amount of all other Indebtedness then outstanding and Incurred
pursuant to this clause (xx), does not exceed $25.0 million at any one time
outstanding;
(xxi)
Indebtedness
of the Issuer or any Restricted Subsidiary consisting of (x) the financing
of
insurance premiums or (y) take-or-pay obligations contained in supply
arrangements, in each case, in the ordinary course of business; and
(xxii)
Indebtedness
incurred on behalf of, or representing Guarantees of Indebtedness of, joint
ventures of the Issuer or any Restricted Subsidiary not in excess, at any one
time outstanding, of $7.5 million.
For
purposes of determining compliance with this Section 4.03, in the event that
an
item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria
of more than one of the categories of permitted Indebtedness described in
clauses (i) through (xxii) above or is entitled to be Incurred pursuant to
Section 4.03(a), the Issuer shall, in its sole discretion, classify or
reclassify, or later divide, classify or reclassify, such item of Indebtedness
in any manner that complies with this Section 4.03. Accrual of interest, the
accretion of accreted value, the payment of interest in the form of additional
Indebtedness with the same terms, the payment of dividends on Preferred Stock
in
the form of additional shares of Preferred Stock of the same class, accretion
of
original issue discount or liquidation preference and increases in the amount
of
Indebtedness outstanding solely as a result of fluctuations in the exchange
rate
of currencies shall not be deemed to be an Incurrence of Indebtedness for
purposes of this Section 4.03. Guarantees of, or obligations in respect of
letters of credit relating to, Indebtedness which is otherwise included in
the
determination of a particular amount of Indebtedness shall not be included
in
the determination of such amount of Indebtedness; provided that the Incurrence
of the Indebtedness represented by such guarantee or letter of credit, as the
case may be, was in compliance with this Section 4.03.
For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount
of Indebtedness denominated in a foreign currency shall be calculated based
on
the relevant currency exchange rate in effect on the date such Indebtedness
was
Incurred, in the case of term debt, or first committed or first Incurred
(whichever yields the lower U.S. dollar equivalent), in the case of revolving
credit debt; provided that if such Indebtedness is Incurred to refinance other
Indebtedness denominated in a foreign currency, and such refinancing would
cause
the applicable U.S. dollar-denominated restriction to be exceeded if calculated
at the relevant currency exchange rate in effect on the date of such
refinancing, such U.S. dollar-denominated restriction shall be deemed not to
have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced.
SECTION
4.04.
Limitation
on Restricted Payments
.
iv)
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly:
(i)
declare
or pay any dividend or make any distribution on account of the
Issuer
’
s
or any
of its Restricted Subsidiaries
’
Equity
Interests, including any payment made in connection with any merger,
amalgamation or consolidation involving the Issuer (other than (A) dividends
or
distributions by the Issuer payable solely in Equity Interests (other than
Disqualified Stock) of the Issuer; or (B) dividends or distributions by a
Restricted Subsidiary so long as, in the case of any dividend or distribution
payable on or in respect of any class or series of securities issued by a
Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the
Issuer or a Restricted Subsidiary receives at least its pro rata share of such
dividend or distribution in accordance with its Equity Interests in such class
or series of securities);
(ii)
purchase
or otherwise acquire or retire for value any Equity Interests of the Issuer
or
any direct or indirect parent of the Issuer;
(iii)
make
any
principal payment on, or redeem, repurchase, defease or otherwise acquire or
retire for value, in each case prior to any scheduled repayment or scheduled
maturity, any Subordinated Indebtedness of the Issuer or any of its Restricted
Subsidiaries (other than the payment, redemption, repurchase, defeasance,
acquisition or retirement of (A) Subordinated Indebtedness in anticipation
of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of such payment, redemption,
repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted
under clauses (vii) and (ix) of Section 4.03(b)); or
(iv)
make
any
Restricted Investment
(all
such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as “Restricted Payments”), unless, at the time of such
Restricted Payment:
(1)
no
Default shall have occurred and be continuing or would occur as a consequence
thereof;
(2)
immediately
after giving effect to such transaction on a pro forma basis, the Issuer could
Incur $1.00 of additional Indebtedness under Section 4.03(a); and
(3)
such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Issuer and its Restricted Subsidiaries after the Issue
Date
(including Restricted Payments permitted by clauses (i), (iv) (only to the
extent of one-half of the amounts paid pursuant to such clause), (vi) and (viii)
of Section 4.04(b), but excluding all other Restricted Payments permitted by
Section 4.04(b)), is less than the amount equal to the Cumulative
Credit.
(b)
The
provisions of Section 4.04(a) shall not prohibit:
(i)
the
payment of any dividend or distribution within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Indenture;
(ii)
1.
the
repurchase, retirement or other acquisition of any Equity Interests
(
“
Retired
Capital Stock
”
)
of the
Issuer or any direct or indirect parent of the Issuer or Subordinated
Indebtedness of the Issuer, any direct or indirect parent of the Issuer or
any
Guarantor in exchange for, or out of the proceeds of, the substantially
concurrent sale of, Equity Interests of the Issuer or any direct or indirect
parent of the Issuer or contributions to the equity capital of the Issuer (other
than any Disqualified Stock or any Equity Interests sold to a Subsidiary of
the
Issuer or to an employee stock ownership plan or any trust established by the
Issuer or any of its Subsidiaries) (collectively, including any such
contributions,
“
Refunding
Capital Stock
”
);
and
(B)
the
declaration and payment of accrued dividends on the Retired Capital Stock out
of
the proceeds of the substantially concurrent sale (other than to a Subsidiary
of
the Issuer or to an employee stock ownership plan or any trust established
by
the Issuer or any of its Subsidiaries) of Refunding Capital Stock;
(iii)
the
redemption, repurchase or other acquisition or retirement of Subordinated
Indebtedness of the Issuer or any Guarantor made by exchange for, or out of
the
proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer
or a Guarantor which is Incurred in accordance with Section 4.03 so long
as
(A)
the
principal amount of such new Indebtedness does not exceed the principal amount
of the Subordinated Indebtedness being so redeemed, repurchased, acquired or
retired for value (plus the amount of any premium required to be paid under
the
terms of the instrument governing the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired plus any fees incurred in connection
therewith),
(B)
such
Indebtedness is subordinated to the Securities or the related Guarantee, as
the
case may be, at least to the same extent as such Subordinated Indebtedness
so
purchased, exchanged, redeemed, repurchased, acquired or retired for
value,
(C)
such
Indebtedness has a final scheduled maturity date equal to or later than the
earlier of (x) the final scheduled maturity date of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired or (y) 91
days
following the maturity date of the Securities, and
(D)
such
Indebtedness has a Weighted Average Life to Maturity at the time Incurred which
is not less than the remaining Weighted Average Life to Maturity of the
Subordinated Indebtedness being so redeemed, repurchased, acquired or
retired;
(iv)
the
repurchase, retirement or other acquisition (or dividends to any direct or
indirect parent of the Issuer to finance any such repurchase, retirement or
other acquisition) for value of Equity Interests of the Issuer or any direct
or
indirect parent of the Issuer held by any future, present or former employee,
director or consultant of the Issuer or any direct or indirect parent of the
Issuer or any Subsidiary of the Issuer pursuant to any management equity plan
or
stock option plan or any other management or employee benefit plan or other
agreement or arrangement;
provided
,
however
,
that
the aggregate amounts paid under this clause (iv) do not exceed $15.0 million
in
any calendar year (with unused amounts in any calendar year being permitted
to
be carried over for the two succeeding calendar years);
provided
,
further
,
however
,
that
such amount in any calendar year may be increased by an amount not to
exceed:
(A)
the
cash
proceeds received by the Issuer or any of its Restricted Subsidiaries from
the
sale of Equity Interests (other than Disqualified Stock) of the Issuer or any
direct or indirect parent of the Issuer (to the extent contributed to the
Issuer) to
members
of management, directors or consultants of the Issuer and its Restricted
Subsidiaries or any direct or indirect parent of the Issuer that occurs after
the Issue Date (
provided
that the
amount of such cash proceeds utilized for any such repurchase, retirement,
other
acquisition or dividend shall not increase the amount available for Restricted
Payments under Section 4.04(a)(3));
plus
(2)
the
cash
proceeds of key man life insurance policies received by the Issuer or any direct
or indirect parent of the Issuer (to the extent contributed to the Issuer)
or
the Issuer’s Restricted Subsidiaries after the Issue Date;
provided
that the
Issuer may elect to apply all or any portion of the aggregate increase
contemplated by clauses (A) and (B) above in any calendar year;
(v)
the
declaration and payment of dividends or distributions to holders of any class
or
series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries
issued or incurred in accordance with Section 4.03;
(vi)
the
declaration and payment of dividends or distributions (a) to holders of any
class or series of Designated Preferred Stock (other than Disqualified Stock)
issued after the Issue Date and (b) to any direct or indirect parent of the
Issuer, the proceeds of which will be used to fund the payment of dividends
to
holders of any class or series of Designated Preferred Stock (other than
Disqualified Stock) of any direct or indirect parent of the Issuer issued after
the Issue Date;
provided
,
however
,
that,
(A) for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date of issuance
of
such Designated Preferred Stock, after giving effect to such issuance (and
the
payment of dividends or distributions) on a pro forma basis, the Issuer would
have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the
aggregate amount of dividends declared and paid pursuant to this clause (vi)
does not exceed the net cash proceeds actually received by the Issuer from
any
such sale of Designated Preferred Stock (other than Disqualified Stock) issued
after the Issue Date;
(vii)
Investments
in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken
together with all other Investments made pursuant to this clause (vii) that
are
at that time outstanding, not to exceed the greater of $25.0 million and 1.0%
of
Total Assets at the time of such Investment (with the Fair Market Value of
each
Investment being measured at the time made and without giving effect to
subsequent changes in value);
(viii)
the
payment of dividends on the Issuer
’
s
common
stock (or the payment of dividends to any direct or indirect parent of the
Issuer to fund the payment by such direct or indirect parent of the Issuer
of
dividends on such entity
’
s
common
stock) of up to 6% per annum of the net proceeds received by the Issuer from
any
public offering of common stock of the Issuer or any direct or indirect parent
of the Issuer;
(ix)
Investments
that are made with Excluded Contributions;
(x)
other
Restricted Payments in an aggregate amount not to exceed the greater of $50.0
million and 2.0% of Total Assets at the time made;
(xi)
the
distribution, as a dividend or otherwise, of shares of Capital Stock of, or
Indebtedness owed to the Issuer or a Restricted Subsidiary of the Issuer by,
Unrestricted Subsidiaries;
(xii)
the
payment of dividends or other distributions to any direct or indirect parent
of
the Issuer in amounts required for such parent to pay federal, state or local
income taxes (as the case may be) imposed directly on such parent to the extent
such income taxes are attributable to the income of the Issuer and its
Restricted Subsidiaries (including, without limitation, by virtue of such parent
being the common parent of a consolidated or combined tax group of which the
Issuer and/or its Restricted Subsidiaries are members);
(xiii)
the
payment of dividends, other distributions or other amounts or the making of
loans or advances by the Issuer, if applicable:
(A)
in
amounts required for any direct or indirect parent of the Issuer, if applicable,
to pay fees and expenses (including franchise or similar taxes) required to
maintain its corporate existence, customary salary, bonus and other benefits
payable to, and indemnities provided on behalf of, officers and employees of
any
direct or indirect parent of the Issuer, if applicable, and general corporate
overhead expenses of any direct or indirect parent of the Issuer, if applicable,
in each case to the extent such fees and expenses are attributable to the
ownership or operation of the Issuer, if applicable, and its Subsidiaries;
and
(B)
in
amounts required for any direct or indirect parent of the Issuer, if applicable,
to pay interest and/or principal on Indebtedness the proceeds of which have
been
contributed to the Issuer or any of its Restricted Subsidiaries and that has
been guaranteed by, or is otherwise considered Indebtedness of, the Issuer
Incurred in accordance with Section 4.03; and
(C)
in
amounts required for any direct or indirect parent of the Issuer to pay fees
and
expenses, other than to Affiliates of the Issuer, related to any unsuccessful
equity or debt offering of such parent.
(xiv)
cash
dividends or other distributions on the Issuer
’
s
Capital
Stock used to, or the making of loans to any direct or indirect parent of the
Issuer to, fund the Transactions and the payment of fees and expenses incurred
in connection with the Transactions or owed by the Issuer or any direct or
indirect parent of the Issuer, as the case may be, or Restricted Subsidiaries
of
the Issuer to Affiliates, in each case to the extent permitted by Section
4.07;
(xv)
repurchases
of Equity Interests deemed to occur upon exercise of stock options or warrants
if such Equity Interests represent a portion of the exercise price of such
options or warrants;
(xvi)
purchases
of receivables pursuant to a Receivables Repurchase Obligation in connection
with a Qualified Receivables Financing and the payment or distribution of
Receivables Fees;
(xvii)
payments
of cash, or dividends, distributions or advances by the Issuer or any Restricted
Subsidiary to allow the payment of cash in lieu of the issuance of fractional
shares upon the exercise of options or warrants or upon the conversion or
exchange of Capital Stock of any such Person;
(xviii)
the
repurchase, redemption or other acquisition or retirement for value of any
Subordinated Indebtedness pursuant to the provisions similar to those described
under Sections 4.06 and 4.08; provided that all Securities tendered by Holders
in connection with a Change of Control Offer or Asset Sale Offer, as applicable,
have been repurchased, redeemed or acquired for value; and
(xix)
any
payments made, including any such payments made to any direct or indirect parent
of the Issuer to enable it to make payments, in connection with the consummation
of the Transactions or as contemplated by the Acquisition Documents (other
than
payments to any Permitted Holder or any Affiliate thereof);
provided
,
however
,
that at
the time of, and after giving effect to, any Restricted Payment permitted under
clauses (vi), (vii), (x) and (xi) of this Section 4.04(b), no Default shall
have
occurred and be continuing or would occur as a consequence thereof.
(c)
As
of the
Issue Date, all of the Issuer
’
s
Subsidiaries shall be Restricted Subsidiaries. The Issuer shall not permit
any
Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to
the
definition of
“
Unrestricted
Subsidiary.
”
For
purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary,
all outstanding Investments by the Issuer and its Restricted Subsidiaries
(except to the extent repaid) in the Subsidiary so designated shall be deemed
to
be Restricted Payments in an amount determined as set forth in the last sentence
of the definition of
“
Investments.
”
Such
designation shall only be permitted if a Restricted Payment in such amount
would
be permitted at such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.
SECTION
4.05.
Dividend
and Other Payment Restrictions Affecting Subsidiaries
.
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or consensual restriction on the ability
of
any Restricted Subsidiary to:
(a)
(i)
pay
dividends or make any other distributions to the Issuer or any of its Restricted
Subsidiaries (1) on its Capital Stock; or (2) with respect to any other interest
or
participation
in, or measured by, its profits; or (ii) pay any Indebtedness owed to the Issuer
or any of its Restricted Subsidiaries;
(b)
make
loans or advances to the Issuer or any of its Restricted Subsidiaries;
or
(c)
sell,
lease or transfer any of its properties or assets to the Issuer or any of its
Restricted Subsidiaries;
except
in
each case for such encumbrances or restrictions existing under or by reason
of:
(1)
contractual
encumbrances or restrictions in effect on the Issue Date, including pursuant
to
the Credit Agreement and the other Credit Agreement Documents;
(2)
this
Indenture, the Securities (and any Exchange Securities and guarantees thereof),
the Security Documents and the Intercreditor Agreement and (ii) the Senior
Subordinated Note Purchase Agreement, the Senior Subordinated Notes (and any
exchange Senior Subordinated Notes and guarantees thereof) and the indenture
governing the Senior Subordinated Notes;
(3)
applicable
law or any applicable rule, regulation or order;
(4)
any
agreement or other instrument relating to Indebtedness of a Person acquired
by
the Issuer or any Restricted Subsidiary which was in existence at the time
of
such acquisition (but not created in contemplation thereof or to provide all
or
any portion of the funds or credit support utilized to consummate such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired;
(5)
contracts
or agreements for the sale of assets, including any restriction with respect
to
a Restricted Subsidiary imposed pursuant to an agreement entered into for the
sale or disposition of the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition;
(6)
Secured
Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.03 and
4.12 that limit the right of the debtor to dispose of the assets securing such
Indebtedness;
(7)
restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business;
(8)
customary
provisions in joint venture agreements and other similar agreements entered
into
in the ordinary course of business;
(9)
purchase
money obligations for property acquired in the ordinary course of business
that
impose restrictions of the nature discussed in Section 4.05(c) above on the
property so acquired;
(10)
customary
provisions contained in leases, licenses and other similar agreements entered
into in the ordinary course of business that impose restrictions of the type
described in clause (c) above on the property subject to such
lease;
(11)
any
encumbrance or restriction of a Receivables Subsidiary effected in connection
with a Qualified Receivables Financing; provided, however, that such
restrictions apply only to such Receivables Subsidiary;
(12)
other
Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary
of the Issuer (i) that is a Guarantor that is Incurred subsequent to the Issue
Date pursuant to Section 4.03 or (ii) that is Incurred by a Foreign Subsidiary
of the Issuer subsequent to the Issue Date pursuant to clause (iv), (xii) or
(xx) of Section 4.03(b);
(13)
any
Restricted Investment not prohibited by Section 4.04 and any Permitted
Investment; or
(14)
any
encumbrances or restrictions of the type referred to in clauses (a), (b) and
(c)
above imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (1) through (13)
above;
provided
that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment of
the
Issuer, no more restrictive with respect to such dividend and other payment
restrictions than those contained in the dividend or other payment restrictions
prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing.
For
purposes of determining compliance with this Section 4.05, (i) the priority
of
any Preferred Stock in receiving dividends or liquidating distributions prior
to
dividends or liquidating distributions being paid on common stock shall not
be
deemed a restriction on the ability to make distributions on Capital Stock
and
(ii) the subordination of loans or advances made to the Issuer or a Restricted
Subsidiary of the Issuer to other Indebtedness Incurred by the Issuer or any
such Restricted Subsidiary shall not be deemed a restriction on the ability
to
make loans or advances.
SECTION
4.06.
Asset
Sales
v)
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
cause or make an Asset Sale, unless (x) the Issuer or any of its Restricted
Subsidiaries, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value (as determined in good faith
by the Issuer) of the assets sold or otherwise disposed of, and (y) at least
75%
of the consideration therefor received by the Issuer or such Restricted
Subsidiary, as the case may be, is in the form of Cash Equivalents;
provided
that the
amount of:
(i)
any
liabilities (as shown on the Issuer
’
s
or such
Restricted Subsidiary
’
s
most
recent balance sheet or in the notes thereto) of the Issuer or any Restricted
Subsidiary of the Issuer (other than liabilities that are by their
terms
subordinated
to the Securities or any Guarantee) that are assumed by the transferee of any
such assets,
(ii)
any
notes
or other obligations or other securities or assets received by the Issuer or
such Restricted Subsidiary of the Issuer from such transferee that are converted
by the Issuer or such Restricted Subsidiary of the Issuer into cash within
180
days of the receipt thereof (to the extent of the cash received),
and
(iii)
any
Designated Non-cash Consideration received by the Issuer or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Non-cash Consideration received
pursuant to this clause (iii) that is at that time outstanding, not to exceed
the greater of 2.0% of Total Assets and $50.0 million at the time of the receipt
of such Designated Non-cash Consideration (with the Fair Market Value of each
item of Designated Non-cash Consideration being measured at the time received
and without giving effect to subsequent changes in value)
shall
be
deemed to be Cash Equivalents for the purposes of this Section
4.06(a).
(b)
Within
365 days after the Issuer
’
s
or any
Restricted Subsidiary of the Issuer
’
s
receipt
of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary
of the Issuer may apply the Net Proceeds from such Asset Sale, at its
option:
(i)
to
repay
Indebtedness constituting First Priority Lien Obligations (and, if the
Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce
commitments with respect thereto), Indebtedness of a Foreign Subsidiary or
Pari
Passu Indebtedness (
provided
that if
the Issuer or any Guarantor shall so reduce Obligations under Pari Passu
Indebtedness (other than any First Priority Lien Obligation), the Issuer shall
equally and ratably reduce Obligations under the Securities through open-market
purchases (
provided
that
such purchases are at or above 100% of the principal amount thereof) or by
making an offer (in accordance with the procedures set forth below for an Asset
Sale Offer) to all Holders to purchase at a purchase price equal to 100% of
the
principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, the pro rata principal amount of Securities) or Indebtedness
of a Restricted Subsidiary that is not a Guarantor, in each case other than
Indebtedness owed to the Issuer or an Affiliate of the Issuer,
(ii)
to
make
an investment in any one or more businesses (provided that if such investment
is
in the form of the acquisition of Capital Stock of a Person, such acquisition
results in such Person becoming a Restricted Subsidiary of the Issuer), assets,
or property or capital expenditures, in each case used or useful in a Similar
Business, or
(iii)
to
make
an investment in any one or more businesses (provided that if such investment
is
in the form of the acquisition of Capital Stock of a Person, such acquisition
results in such Person becoming a Restricted Subsidiary
of
the
Issuer), properties or assets that replace the properties and assets that are
the subject of such Asset Sale.
In
the
case of Sections 4.06(b)(ii) and (iii), a binding commitment shall be treated
as
a permitted application of the Net Proceeds from the date of such commitment;
provided that in the event such binding commitment is later canceled or
terminated for any reason before such Net Proceeds are so applied, the Issuer
or
such Restricted Subsidiary enters into another binding commitment within nine
months of such cancellation or termination of the prior binding commitment;
provided
,
further
that the
Issuer or such Restricted Subsidiary may only enter into such a commitment
under
the foregoing provision one time with respect to each Asset Sale.
Pending
the final application of any such Net Proceeds, the Issuer or such Restricted
Subsidiary of the Issuer may temporarily reduce Indebtedness under a revolving
credit facility, if any, or otherwise invest such Net Proceeds in Cash
Equivalents or Investment Grade Securities. Any Net Proceeds from any Asset
Sale
that are not applied as provided and within the time period set forth in the
first sentence of this Section 4.06(b) (it being understood that any portion
of
such Net Proceeds used to make an offer to purchase Securities, as described
in
clause (i) of this Section 4.06(b), shall be deemed to have been invested
whether or not such offer is accepted) shall be deemed to constitute “Excess
Proceeds.”
When
the
aggregate amount of Excess Proceeds exceeds $15.0 million, the Issuer shall
make
an offer to all Holders of Securities (and, at the option of the Issuer, to
holders of any Pari Passu Indebtedness) (an “Asset Sale Offer”) to purchase the
maximum principal amount of Securities (and such Pari Passu Indebtedness),
that
is at least $2,000 and an integral multiple of $1,000 that may be purchased
out
of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of
the principal amount thereof (or, in the event such Pari Passu Indebtedness
was
issued with significant original issue discount, 100% of the accreted value
thereof), plus accrued and unpaid interest and Additional Interest, if any
(or,
in respect of such Pari Passu Indebtedness, such lesser price, if any, as may
be
provided for by the terms of such Pari Passu Indebtedness), to the date fixed
for the closing of such offer, in accordance with the procedures set forth
in
this Section 4.06. The Issuer shall commence an Asset Sale Offer with respect
to
Excess Proceeds within 10 Business Days after the date that Excess Proceeds
exceeds $15.0 million by mailing the notice required pursuant to the terms
of
Section 4.06(f), with a copy to the Trustee. To the extent that the aggregate
amount of Securities (and such Pari Passu Indebtedness) tendered pursuant to
an
Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any
remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount of Securities (and such Pari Passu Indebtedness) surrendered
by
holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Securities to be purchased in the manner described in Section 4.06(e).
Upon
completion of any such Asset Sale Offer, the amount of Excess Proceeds shall
be
reset at zero.
(c)
The
Issuer shall comply with the requirements of Rule 14e-1 under the Exchange
Act
and any other securities laws and regulations to the extent such laws or
regulations are applicable in connection with the repurchase of the Securities
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Indenture,
the Issuer shall comply with the applicable securities laws and regulations
and
shall not be deemed to have breached its obligations described in this Indenture
by virtue thereof.
(d)
Not
later
than the date upon which written notice of an Asset Sale Offer is delivered
to
the Trustee as provided above, the Issuer shall deliver to the Trustee an
Officers
’
Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation
of
the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer
is
being made and (iii) the compliance of such allocation with the provisions
of
Section 4.06(b). On such date, the Issuer shall also irrevocably deposit with
the Trustee or with a paying agent (or, if the Issuer or a Wholly Owned
Restricted Subsidiary is acting as the Paying Agent, segregate and hold in
trust) an amount equal to the Excess Proceeds to be invested in Cash
Equivalents, as directed in writing by the Issuer, and to be held for payment
in
accordance with the provisions of this Section 4.06. Upon the expiration of
the
period for which the Asset Sale Offer remains open (the
“
Offer
Period
”
),
the
Issuer shall deliver to the Trustee for cancellation the Securities or portions
thereof that have been properly tendered to and are to be accepted by the
Issuer. The Trustee (or the Paying Agent, if not the Trustee) shall, on the
date
of purchase, mail or deliver payment to each tendering Holder in the amount
of
the purchase price. In the event that the Excess Proceeds delivered by the
Issuer to the Trustee are greater than the purchase price of the Securities
tendered, the Trustee shall deliver the excess to the Issuer immediately after
the expiration of the Offer Period for application in accordance with Section
4.06.
(e)
Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Company at the address
specified in the notice at least three Business Days prior to the purchase
date.
Holders shall be entitled to withdraw their election if the Trustee or the
Issuer receives not later than one Business Day prior to the Purchase Date,
a
telegram, telex, facsimile transmission or letter setting forth the name of
the
Holder, the principal amount of the Security which was delivered by the Holder
for purchase and a statement that such Holder is withdrawing his election to
have such Security purchased. If at the end of the Offer Period more Securities
(and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer
than the Issuer is required to purchase, selection of such Securities for
purchase shall be made by the Trustee in compliance with the requirements of
the
principal national securities exchange, if any, on which such Securities are
listed, or if such Securities are not so listed, on a pro rata basis, by lot
or
by such other method as the Trustee shall deem fair and appropriate (and in
such
manner as complies with applicable legal requirements); provided that no
Securities of $2,000 or less shall be purchased in part. Selection of such
Pari
Passu Indebtedness shall be made pursuant to the terms of such Pari Passu
Indebtedness.
(f)
Notices
of an Asset Sale Offer shall be mailed by first class mail, postage prepaid,
at
least 30 but not more than 60 days before the purchase date to each Holder
of
Securities at such Holder
’
s
registered address. If any Security is to be purchased in part only, any notice
of purchase that relates to such Security shall state the portion of the
principal amount thereof that has been or is to be purchased.
SECTION
4.07.
Transactions
with Affiliates
vi)
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction or
series of transactions,
contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Issuer (each of the foregoing, an
“
Affiliate
Transaction
”
)
involving aggregate consideration in excess of $10.0 million,
unless:
(i)
such
Affiliate Transaction is on terms that are not materially less favorable to
the
Issuer or the relevant Restricted Subsidiary than those that could have been
obtained in a comparable transaction by the Issuer or such Restricted Subsidiary
with an unrelated Person; and
(ii)
with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $25.0 million, the Issuer
delivers to the Trustee a resolution adopted in good faith by the majority
of
the Board of Directors of the Issuer, approving such Affiliate Transaction
and
set forth in an Officers
’
Certificate certifying that such Affiliate Transaction complies with clause
(i)
above.
(b)
The
provisions of Section 4.07(a) shall not apply to the following:
(i)
transactions
between or among the Issuer and/or any of its Restricted Subsidiaries and any
merger of the Issuer and any direct parent of the Issuer;
provided
that
such parent shall have no material liabilities and no material assets other
than
cash, Cash Equivalents and the Capital Stock of the Issuer and such merger
is
otherwise in compliance with the terms of this Indenture and effected for a
bona
fide business purpose;
(ii)
Restricted
Payments permitted by Section 4.04 and Permitted Investments;
(iii)
(x)
the
entering into of any agreement (and any amendment or modification of any such
agreement) to pay, and the payment of, annual management, consulting, monitoring
and advisory fees to the Sponsors in an aggregate amount in any fiscal year
not
to exceed the greater of (A) $3.0 million and (B) 1.25% of EBITDA of the Issuer
and its Restricted Subsidiaries for the immediately preceding fiscal year,
and
out-of-pocket expense reimbursement; provided, however, that any payment not
made in any fiscal year may be carried forward and paid in the following two
fiscal years and (y) the payment of the present value of all amounts payable
pursuant to any agreement described in clause (iii)(x) of this Section 4.07(b)
in connection with the termination of such agreement;
(iv)
the
payment of reasonable and customary fees and reimbursement of expenses paid
to,
and indemnity provided on behalf of, officers, directors, employees or
consultants of the Issuer or any Restricted Subsidiary or any direct or indirect
parent of the Issuer;
(v)
payments
by the Issuer or any of its Restricted Subsidiaries to the Sponsors made for
any
financial advisory, financing, underwriting or placement services or in respect
of other investment banking activities, including, without
limitation,
in connection with acquisitions or divestitures, which payments are (x) made
pursuant to the agreements with the Sponsors described in the Offering
Memorandum or (y) approved by a majority of the Board of Directors of the Issuer
in good faith;
(vi)
transactions
in which the Issuer or any of its Restricted Subsidiaries, as the case may
be,
delivers to the Trustee a letter from an Independent Financial Advisor stating
that such transaction is fair to the Issuer or such Restricted Subsidiary from
a
financial point of view or meets the requirements of clause (i) of Section
4.07(a);
(vii)
payments
or loans (or cancellation of loans) to employees or consultants which are
approved by a majority of the Board of Directors of the Issuer in good
faith;
(viii)
any
agreement as in effect as of the Issue Date or any amendment thereto (so long
as
any such agreement together with all amendments thereto, taken as a whole,
is
not more disadvantageous to the Holders of the Securities in any material
respect than the original agreement as in effect on the Issue Date) or any
transaction contemplated thereby as determined in good faith by senior
management or the Board of Directors of the Issuer;
(ix)
the
existence of, or the performance by the Issuer or any of its Restricted
Subsidiaries of its obligations under the terms of, Acquisition Documents,
any
stockholders agreement (including any registration rights agreement or purchase
agreement related thereto) to which it is a party as of the Issue Date and
any
transaction, agreement or arrangement described in the Offering Memorandum
and,
in each case, any amendment thereto or similar transactions, agreements or
arrangements which it may enter into thereafter;
provided
,
however
,
that
the existence of, or the performance by the Issuer or any of its Restricted
Subsidiaries of its obligations under, any future amendment to any such existing
transaction, agreement or arrangement or under any similar transaction,
agreement or arrangement entered into after the Issue Date shall only be
permitted by this clause (ix) to the extent that the terms of any such existing
transaction, agreement or arrangement together with all amendments thereto,
taken as a whole, or new transaction, agreement or arrangement are not otherwise
more disadvantageous to the Holders of the Securities in any material respect
than the original transaction, agreement or arrangement as in effect on the
Issue Date;
(x)
the
execution of the Transactions and the payment of all fees and expenses related
to the Transactions, including fees to the Sponsors, which are described in
the
Offering Memorandum or contemplated by the Acquisition Documents;
(xi)
(A)
transactions with customers, clients, suppliers or purchasers or sellers of
goods or services, or transactions otherwise relating to the purchase or sale
of
goods or services, in each case in the ordinary course of business
and
otherwise
in compliance with the terms of this Indenture, which are fair to the Issuer
and
its Restricted Subsidiaries in the reasonable determination of the Board of
Directors or the senior management of the Issuer, or are on terms at least
as
favorable as might reasonably have been obtained at such time from an
unaffiliated party or (B) transactions with joint ventures or Unrestricted
Subsidiaries entered into in the ordinary course of business;
(xii)
any
transaction effected as part of a Qualified Receivables Financing;
(xiii)
the
issuance of Equity Interests (other than Disqualified Stock) of the Issuer
to
any Person;
(xiv)
the
issuances of securities or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
option and stock ownership plans or similar employee benefit plans approved
by
the Board of Directors of the Issuer or any direct or indirect parent of the
Issuer or of a Restricted Subsidiary of the Issuer, as appropriate, in good
faith;
(xv)
the
entering into of any tax sharing agreement or arrangement and any payments
permitted by Section 4.04(b)(xii);
(xvi)
any
contribution to the capital of the Issuer;
(xvii)
transactions
permitted by, and complying with, Section 5.01;
(xviii)
transactions
between the Issuer or any of its Restricted Subsidiaries and any Person, a
director of which is also a director of the Issuer or any direct or indirect
parent of the Issuer;
provided
,
however
,
that
such director abstains from voting as a director of the Issuer or such direct
or
indirect parent, as the case may be, on any matter involving such other
Person;
(xix)
pledges
of Equity Interests of Unrestricted Subsidiaries;
(xx)
any
employment agreements entered into by the Issuer or any of its Restricted
Subsidiaries in the ordinary course of business; and
(xxi)
intercompany
transactions undertaken in good faith (as certified by a responsible financial
or accounting officer of the Issuer in an Officers
’
Certificate) for the purpose of improving the consolidated tax efficiency of
the
Issuer and its Subsidiaries and not for the purpose of circumventing any
covenant set forth in this Indenture.
SECTION
4.08.
Change
of Control
.
vii)
Upon a
Change of Control, each Holder shall have the right to require the Issuer to
repurchase all or any part of such Holder
’
s
Securities at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of the Holders of record
on
the
relevant record date to receive interest due on the relevant interest payment
date), in accordance with the terms contemplated in this Section 4.08;
provided
,
however
,
that
notwithstanding the occurrence of a Change of Control, the Issuer shall not
be
obligated to purchase any Securities pursuant to this Section 4.08 in the event
that it has exercised its right to redeem such Securities in accordance with
Article 3 of this Indenture. In the event that at the time of such Change of
Control the terms of the Bank Indebtedness restrict or prohibit the repurchase
of Securities pursuant to this Section 4.08, then prior to the mailing of the
notice to the Holders provided for in Section 4.08(b) but in any event within
30
days following any Change of Control, the Issuer shall (i) repay in full all
Bank Indebtedness or, if doing so will allow the purchase of Securities, offer
to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each
lender who has accepted such offer, or (ii) obtain the requisite consent under
the agreements governing the Bank Indebtedness to permit the repurchase of
the
Securities as provided for in Section 4.08(b).
(b)
Within
30
days following any Change of Control, except to the extent that the Issuer
has
exercised its right to redeem the Securities in accordance with Article 3 of
this Indenture, the Issuer shall mail a notice (a
“
Change
of
Control Offer
”
)
to each
Holder with a copy to the Trustee stating:
(i)
that
a
Change of Control has occurred and that such Holder has the right to require
the
Issuer to repurchase such Holder
’
s
Securities at a repurchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and Additional Interest, if any,
to
the date of repurchase (subject to the right of the Holders of record on a
record date to receive interest on the relevant interest payment
date);
(ii)
the
circumstances and relevant facts and financial information regarding such Change
of Control;
(iii)
the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed); and
(iv)
the
instructions determined by the Issuer, consistent with this Section 4.08, that
a
Holder must follow in order to have its Securities purchased.
(c)
Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Issuer at the address
specified in the notice at least three Business Days prior to the purchase
date.
The Holders shall be entitled to withdraw their election if the Trustee or
the
Issuer receives not later than one Business Day prior to the purchase date
a
telegram, telex, facsimile transmission or letter setting forth the name of
the
Holder, the principal amount of the Security which was delivered for purchase
by
the Holder and a statement that such Holder is withdrawing his election to
have
such Security purchased. Holders whose Securities are purchased only in part
shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered.
(d)
On
the
purchase date, all Securities purchased by the Issuer under this Section shall
be delivered to the Trustee for cancellation, and the Issuer shall pay the
purchase price plus accrued and unpaid interest to the Holders entitled
thereto.
(e)
A
Change
of Control Offer may be made in advance of a Change of Control, and conditioned
upon such Change of Control, if a definitive agreement is in place for the
Change of Control at the time of making of the Change of Control
Offer.
(f)
Notwithstanding
the foregoing provisions of this Section, the Issuer shall not be required
to
make a Change of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in Section 4.08 applicable to a
Change of Control Offer made by the Issuer and purchases all Securities validly
tendered and not withdrawn under such Change of Control Offer.
(g)
Securities
repurchased by the Issuer pursuant to a Change of Control Offer will have the
status of Securities issued but not outstanding or will be retired and canceled
at the option of the Issuer. Securities purchased by a third party pursuant
to
the preceding clause (f) will have the status of Securities issued and
outstanding.
(h)
At
the
time the Issuer delivers Securities to the Trustee which are to be accepted
for
purchase, the Issuer shall also deliver an Officers
’
Certificate stating that such Securities are to be accepted by the Issuer
pursuant to and in accordance with the terms of this Section 4.08. A Security
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(i)
Prior
to
any Change of Control Offer, the Issuer shall deliver to the Trustee an
Officers
’
Certificate stating that all conditions precedent contained herein to the right
of the Issuer to make such offer have been complied with.
(j)
The
Issuer shall comply, to the extent applicable, with the requirements of Section
14(e) of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to this Section. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this Section 4.08, the Issuer shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.08 by virtue thereof.
SECTION
4.09.
Compliance
Certificate
.
The
Issuer shall deliver to the Trustee within 120 days after the end of each fiscal
year of the Issuer, beginning with the fiscal year end on December 30, 2006,
an
Officers
’
Certificate stating that in the course of the performance by the signers of
their duties as Officers of the Issuer they would normally have knowledge of
any
Default and whether or not the signers know of any Default that occurred during
such period. If they do, the certificate shall describe the Default, its status
and what action the Issuer is taking or proposes to take with respect thereto.
The Issuer also shall comply with Section 314(a)(4) of the TIA.
SECTION
4.10.
Further
Instruments and Acts
.
Upon
request of the Trustee, the Issuer shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to
carry out more effectively the purpose of this Indenture.
SECTION
4.11.
Future
Guarantors
.
The
Issuer shall cause each Restricted Subsidiary that is a Domestic Subsidiary
(unless such Subsidiary is a Receivables Subsidiary) that
(i)
guarantees
any Indebtedness of the Issuer or any of its Restricted Subsidiaries,
or
(ii)
incurs
any Indebtedness or issues any shares of Disqualified Stock permitted to be
Incurred or issued pursuant to clauses (i) or (xii) of Section 4.03(b) or not
permitted to be Incurred by Section 4.03,
to
execute and deliver to the Trustee a supplemental indenture substantially in
the
form of Exhibit D pursuant to which such Subsidiary shall guarantee the Issuer’s
Obligations under the Securities and the Indenture; and (b) to become a party
to
the Security Agreement and to execute and file all documents and instruments
necessary to grant to the Collateral Agent a perfected security interest in
the
Collateral of such Restricted Subsidiary.
SECTION
4.12.
Liens
.
viii)
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, Incur or suffer to exist (i) any Lien on any
asset or property of the Issuer or such Restricted Subsidiary securing
Indebtedness unless the Securities are equally and ratably secured with (or
on a
senior basis to, in the case of obligations subordinated in right of payment
to
the Securities) the obligations so secured until such time as such obligations
are no longer secured by a Lien or (ii) any Lien securing any First Priority
Lien Obligation of the Issuer or any Guarantor without effectively providing
that the Securities or the applicable Guarantee, as the case may be, shall
be
granted a second priority security interest (subject to Permitted Liens) upon
the assets or property constituting the collateral for such First Priority
Lien
Obligations, except as set forth under the Security Documents; provided,
however, that if granting such second priority security interest requires the
consent of a third party, the Issuer will use commercially reasonable efforts
to
obtain such consent with respect to the second priority security interest for
the benefit of the Trustee on behalf of the holders of the Securities;
provided
,
further
,
however, that if such third party does not consent to the granting of such
second priority security interest after the use of commercially reasonable
efforts, the Issuer will not be required to provide such security interest.
(b)
Clause
(i) of Section 4.12(a) shall not require the Issuer or any Restricted Subsidiary
of the Issuer to secure the Securities if the Lien consists of a Permitted
Lien.
Any Lien which is granted to secure the Securities or such Guarantee under
clause (i) of Section 4.12(a) (unless also granted pursuant to clause (ii)
of
Section 4.12(a)) shall be automatically released and discharged at the same
time
as the release of the Lien that gave rise to the obligation to secure the
Securities or such Guarantee under clause (i) of Section 4.12(a).
SECTION
4.13.
Maintenance
of Office or Agency
.
ix)
The
Issuer shall maintain an office or agency (which may be an office of the Trustee
or an affiliate of the Trustee or Registrar) where Securities may be surrendered
for registration of transfer or for exchange and where notices and demands
to or
upon the Issuer in respect of the Securities and this Indenture may be served.
The Issuer shall give prompt written notice to the Trustee of the location,
and
any change in the location, of such office or agency. If at any time the Issuer
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 corporate trust office of
the
Trustee as set forth in Section 13.02.
(b)
The
Issuer may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations;
provided
,
however
,
that no
such designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency for such purposes. The Issuer shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or
agency.
(c)
The
Issuer hereby designates the corporate trust office of the Trustee or its Agent
as such office or agency of the Issuer in accordance with Section
2.04.
SECTION
4.14.
Amendment
of Security Documents
.
The
Issuer shall not amend, modify or supplement, or permit or consent to any
amendment, modification or supplement of, the Security Documents in any way
that
would be adverse to the holders of the Securities in any material respect,
except as contemplated by the Intercreditor Agreement or as permitted under
Article 9.
SECTION
4.15.
After-Acquired
Property
.
Upon
the acquisition by the Issuer or any Guarantor of any First-Priority
After-Acquired Property, the Issuer or such Guarantor shall execute and deliver
such mortgages, deeds of trust, security instruments, financing statements
and
certificates and opinions of counsel as shall be reasonably necessary to vest
in
the Trustee a perfected security interest, subject only to Permitted Liens,
in
such First-Priority After-Acquired Property and to have such First-Priority
After-Acquired Property (but subject to certain limitations, if applicable)
added to the Collateral, and thereupon all provisions of this Indenture relating
to the Collateral shall be deemed to relate to such First-Priority
After-Acquired Property to the same extent and with the same force and effect;
provided, however, that if granting such second-priority security interest
in
such First-Priority After-Acquired Property requires the consent of a third
party, the Issuer shall use commercially reasonable efforts to obtain such
consent with respect to the second-priority interest for the benefit of the
Trustee on behalf of the Holders; provided further, however, that if such third
party does not consent to the granting of such second-priority security interest
after the use of such commercially reasonable efforts, the Issuer or such
Guarantor, as the case may be, will not be required to provide such security
interest.
SECTION
4.16.
Termination
and Suspension of Certain Covenants
.
(a)
If,
on
any date following the Issue Date, (i) the Securities have Investment Grade
Ratings from
both
Rating Agencies, and the Issuer has delivered notice of such Investment Grade
Ratings to the Trustee, and (ii) no Default has occurred and is continuing
under this Indenture, then beginning on that day and continuing at all times
thereafter regardless of any subsequent changes in the ratings of the
Securities, the Issuer and its Restricted Subsidiaries shall no longer be
subject to Section 4.03 hereof, Section 4.04 hereof, Section 4.05 hereof,
Section 4.06 hereof, Section 4.07 hereof, Section 4.11 hereof and clause (iv)
of
Section 5.01 hereof.
(b)
During
any period of time when (i) the Securities have Investment Grade Ratings from
both Rating Agencies, and the Issuer has delivered notice of such Investment
Grade Ratings to the Trustee, and (ii) no Default has occurred and is
continuing under this Indenture (the occurrence of the events described in
the
foregoing clauses (i) and (ii) being collectively referred to as a
“
Covenant
Suspension Event
”
),
the
Issuer and its Restricted Subsidiaries will not be subject to Section 4.08
hereof (the
“
Suspended
Covenant
”
).
(c)
In
the
event that the Issuer and its Restricted Subsidiaries are not subject to the
Suspended Covenant under this Indenture for any period of time as a result
of
the foregoing, and on any subsequent date (the
“
Reversion
Date
”
)
one or
both of the Rating Agencies withdraw their Investment Grade Rating or downgrade
the rating assigned to the Securities below an Investment Grade Rating then
the
Issuer and its Restricted Subsidiaries shall thereafter again be subject to
the
Suspended Covenant under this Indenture. The period of time between the Covenant
Suspension Event and the Reversion Date is referred to herein as the
“
Suspension
Period
”
.
(d)
In
the
event that the Issuer and its Restricted Subsidiaries are not subject to the
Suspended Covenants and the Issuer or any of its Affiliates enter into an
agreement to effect a transaction that would result in a Change of Control
and
one or more of the Rating Agencies indicate that if consummated, such
transaction (alone or together with any related recapitalization or refinancing
transactions) would cause such Rating Agency to withdraw its Investment Grade
Rating or downgrade the ratings assigned to the Securities below an Investment
Grade Rating, then the Issuer and its Restricted Subsidiaries shall thereafter
again be subject the Suspended Covenants hereof with respect to future events,
including, without limitation, a proposed transaction described in this clause
(c).
(e)
The
Issuer shall deliver promptly to the Trustee an Officer
’
s
Certificate notifying it of any occurrence under this Section 4.15.
ARTICLE
5
SUCCESSOR
COMPANY
SECTION
5.01.
When
Issuer May Merge or Transfer Assets
.
The
Issuer shall not, directly or indirectly, consolidate, amalgamate or merge
with
or into or wind up or convert into (whether or not the Issuer is the surviving
Person), or sell, assign, transfer, lease, convey or
otherwise
dispose of all or substantially all of its properties or assets in one or more
related transactions, to any Person unless:
(i)
the
Issuer is the surviving Person or the Person formed by or surviving any such
consolidation, amalgamation, merger, winding up or conversion (if other than
the
Issuer) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation, partnership or limited
liability company organized or existing under the laws of the United States,
any
state thereof, the District of Columbia, or any territory thereof (the Issuer
or
such Person, as the case may be, being herein called the
“
Successor
Company
”
);
provided
that in
the case where the surviving Person is not a corporation, a co-obligor of the
Securities is a corporation;
(ii)
the
Successor Company (if other than the Issuer) expressly assumes all the
obligations of the Issuer under this Indenture, the Securities and the Security
Documents pursuant to supplemental indentures or other documents or instruments
in form reasonably satisfactory to the Trustee;
(iii)
immediately
after giving effect to such transaction (and treating any Indebtedness which
becomes an obligation of the Successor Company or any of its Restricted
Subsidiaries as a result of such transaction as having been Incurred by the
Successor Company or such Restricted Subsidiary at the time of such transaction)
no Default or shall have occurred and be continuing;
(iv)
immediately
after giving pro forma effect to such transaction, as if such transaction had
occurred at the beginning of the applicable four-quarter period (and treating
any Indebtedness which becomes an obligation of the Successor Company or any
of
its Restricted Subsidiaries as a result of such transaction as having been
Incurred by the Successor Company or such Restricted Subsidiary at the time
of
such transaction), either
(A)
the
Successor Company would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.03(a); or
(B)
the
Fixed
Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries
would be greater than such ratio for the Issuer and its Restricted Subsidiaries
immediately prior to such transaction;
(v)
each
Guarantor, unless it is the other party to the transactions described above,
shall have by supplemental indenture confirmed that its Guarantee shall apply
to
such Person
’
s
obligations under this Indenture and the Securities; and
(vi)
the
Issuer shall have delivered to the Trustee an Officers
’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indentures (if any) comply with this
Indenture.
The
Successor Company (if other than the Issuer) shall succeed to, and be
substituted for, the Issuer under this Indenture, the Securities and the
Security Documents, and in such event the Issuer will automatically be released
and discharged from its obligations under this Indenture, the Securities and
the
Security Documents. Notwithstanding the foregoing clauses (iii) and (iv) of
this
Section 5.01(a), (A) any Restricted Subsidiary may merge, consolidate or
amalgamate with or transfer all or part of its properties and assets to the
Issuer or to another Restricted Subsidiary, and (B) the Issuer may merge,
consolidate or amalgamate with an Affiliate incorporated solely for the purpose
of reincorporating the Issuer in another state of the United States, the
District of Columbia or any territory of the United States or may convert into
a
limited liability company, so long as the amount of Indebtedness of the Issuer
and its Restricted Subsidiaries is not increased thereby. This Article 5 will
not apply to a sale, assignment, transfer, conveyance or other disposition
of
assets between or among the Issuer and its Restricted Subsidiaries.
(b)
Subject
to the provisions of Section 12.02(b) (which govern the release of a Guarantee
upon the sale or disposition of a Restricted Subsidiary of the Issuer that
is a
Guarantor), no Guarantor shall, and the Issuer shall not permit any Guarantor
to, consolidate, amalgamate or merge with or into or wind up into (whether
or
not such Guarantor is the surviving Person), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, any Person (other than any such
sale, assignment, transfer, lease, conveyance or disposition in connection
with
the Transactions described in the Offering Memorandum) unless:
(i)
either
(A) such Guarantor is the surviving Person or the Person formed by or surviving
any such consolidation, amalgamation or merger (if other than such Guarantor)
or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation, partnership or limited liability company
organized or existing under the laws of the United States, any state thereof,
the District of Columbia, or any territory thereof (such Guarantor or such
Person, as the case may be, being herein called the
“
Successor
Guarantor
”
) and
the Successor Guarantor (if other than such Guarantor) expressly assumes all
the
obligations of such Guarantor under this Indenture, such Guarantors
’
Guarantee and the Security Documents pursuant to a supplemental indenture or
other documents or instruments in form reasonably satisfactory to the Trustee,
or (b) such sale or disposition or consolidation, amalgamation or merger is
not
in violation of Section 4.06; and
(ii)
the
Successor Guarantor (if other than such Guarantor) shall have delivered or
caused to be delivered to the Trustee an Officers
’
Certificate and an Opinion of Counsel, each stating that such consolidation,
amalgamation, merger or transfer and such supplemental indenture (if any) comply
with this Indenture.
Except
as
otherwise provided in this Indenture, the Successor Guarantor (if other than
such Guarantor) will succeed to, and be substituted for, such Guarantor under
this Indenture,
such
Guarantor’s Guarantee and the Security Documents, and such Guarantor will
automatically be released and discharged from its obligations under this
Indenture, such Guarantor’s Guarantee and the Security Documents.
Notwithstanding the foregoing, (1) a Guarantor may merge, amalgamate or
consolidate with an Affiliate incorporated solely for the purpose of
reincorporating such Guarantor in another state of the United States, the
District of Columbia or any territory of the United States so long as the amount
of Indebtedness of the Guarantor is not increased thereby and (2) a Guarantor
may merge, amalgamate or consolidate with another Guarantor or the
Issuer.
In
addition, notwithstanding the foregoing, any Guarantor may consolidate,
amalgamate or merge with or into or wind up into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets (collectively, a “Transfer”) to (x) the Issuer or any Guarantor or (y)
any Restricted Subsidiary of the Issuer that is not a Guarantor; provided that
at the time of each such Transfer pursuant to clause (y) the aggregate amount
of
all such Transfers since the Issue Date shall not exceed 5.0% of the
consolidated assets of the Issuer and the Guarantors as shown on the most recent
available balance sheet of the Issuer and the Restricted Subsidiaries after
giving effect to each such Transfer and including all Transfers occurring from
and after the Issue Date (excluding Transfers in connection with the
Transactions described in the Offering Memorandum).
Upon
consummation of the Transactions, the Company shall execute and deliver to
the
Trustee a supplemental indenture of the type referred to in Section 5.01(a)(ii),
whereupon the Issuer shall be the Successor Company and shall succeed to, and
be
substituted for, and may exercise every right and power of, Merger Sub under
this Indenture. Notwithstanding anything in this Article 5 to the contrary,
the
merger of Merger Sub with and into the Company on the Issue Date as described
in
the Merger Agreement shall be permitted under this Indenture.
ARTICLE
6
DEFAULTS
AND REMEDIES
SECTION
6.01.
Events
of Default
.
An
“
Event
of
Default
”
with
respect to the Fixed Rate Notes or the Floating Rate Notes, as applicable,
occurs if:
(a)
there
is
a default in any payment of interest (including any additional interest) on
any
Fixed Rate Note or Floating Rate Note, as the case may be, when the same becomes
due and payable, and such default continues for a period of 30
days,
(b)
there
is
a default in the payment of principal or premium, if any, of any Fixed Rate
Note
or Floating Rate Note, as the case may be, when due at its Stated Maturity,
upon
optional redemption, upon required repurchase, upon declaration or
otherwise,
(c)
the
Issuer or any of the Restricted Subsidiaries fails to comply with its
obligations under Section 5.01,
(d)
the
Issuer or any of the Restricted Subsidiaries fails to comply with any of its
agreements in the Securities or this Indenture (other than those referred to
in
clause
(a),
(b)
or (c) above) and such failure continues for 60 days after the notice specified
below,
(e)
the
Issuer or any Significant Subsidiary fails to pay any Indebtedness (other than
Indebtedness owing to the Issuer or a Restricted Subsidiary) within any
applicable grace period after final maturity or the acceleration of any such
Indebtedness by the holders thereof because of a default, in each case, if
the
total amount of such Indebtedness unpaid or accelerated exceeds $25.0 million
or
its foreign currency equivalent,
(f)
the
Issuer or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
(i)
commences
a voluntary case;
(ii)
consents
to the entry of an order for relief against it in an involuntary
case;
(iii)
consents
to the appointment of a Custodian of it or for any substantial part of its
property; or
(iv)
makes
a
general assignment for the benefit of its creditors or takes any comparable
action under any foreign laws relating to insolvency,
(g)
a
court
of competent jurisdiction enters an order or decree under any Bankruptcy Law
that:
(i)
is
for
relief against the Issuer or any Significant Subsidiary in an involuntary
case;
(ii)
appoints
a Custodian of the Issuer or any Significant Subsidiary or for any substantial
part of its property; or
(iii)
orders
the winding up or liquidation of the Issuer or any Significant
Subsidiary;
or
any
similar relief is granted under any foreign laws and the order or decree remains
unstayed and in effect for 60 days,
(h)
the
Issuer or any Significant Subsidiary fails to pay final judgments aggregating
in
excess of $25.0 million or its foreign currency equivalent (net of any amounts
which are covered by enforceable insurance policies issued by solvent carriers),
which judgments are not discharged, waived or stayed for a period of 60 days
following the entry thereof,
(i)
any
Guarantee of a Significant Subsidiary with respect to such Fixed Rate Notes
or
Floating Rate Notes, as the case may be, ceases to be in full force and effect
(except as contemplated by the terms thereof) or any Guarantor denies or
disaffirms its
obligations
under this Indenture or any Guarantee with respect to such Securities and such
Default continues for 10 days,
(j)
unless
all of the Collateral has been released from the Second Priority Liens in
accordance with the provisions of the Security Documents with respect to such
Fixed Rate Notes or Floating Rate Notes, as the case may be, the Issuer shall
assert or any Guarantor shall assert, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable and,
in the case of any such Person that is a Subsidiary of the Issuer, the Issuer
fails to cause such Subsidiary to rescind such assertions within 30 days after
the Issuer has actual knowledge of such assertions, or
(k)
the
Issuer or any Guarantor fails to comply for 60 days after notice with its other
agreements contained in the Security Documents except for a failure that would
not be material to the holders of such Fixed Rate Notes or Floating Rate Notes,
as the case may be, and would not materially affect the value of the Collateral
taken as a whole (together with the defaults described in clauses (i) and (j)
the
“
security
default provisions
”
).
The
foregoing shall constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected
by
operation of law or pursuant to any judgment, decree or order of any court
or
any order, rule or regulation of any administrative or governmental
body.
The
term
“Bankruptcy Law” means Title 11, United States Code, or any similar Federal or
state law for the relief of debtors. The term “Custodian” means any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A
Default
under clause (d) or (k) above shall not constitute an Event of Default until
the
Trustee notifies the Issuer or the Holders of at least 25% in principal amount
of the outstanding Securities notify the Issuer and the Trustee of the Default
and the Issuer does not cure such Default within the time specified in clause
(d) or (k) above after receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such notice is a “Notice of
Default.” The Issuer shall deliver to the Trustee, within five (5) Business Days
after the occurrence thereof, written notice in the form of an Officers’
Certificate of any event which is, or with the giving of notice or the lapse
of
time or both would become, an Event of Default, its status and what action
the
Issuer is taking or propose to take with respect thereto.
SECTION
6.02.
Acceleration
.
If an
Event of Default (other than an Event of Default specified in Section 6.01(f)
or
(g) with respect to the Issuer) occurs with respect to a series of securities
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Securities of such series, by notice to the Issuer may
declare the principal of, premium, if any, and accrued but unpaid interest
on
all the Securities of such series to be due and payable;
provided
,
however
,
that so
long as any Bank Indebtedness remains outstanding, no such acceleration shall
be
effective until the earlier of (i) five (5) Business Days after the giving
of
written notice to the Issuer and the Representative under the Credit Agreement
and (ii) the day on which any Bank Indebtedness is accelerated. Upon such a
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.01(f)
or
(g)
with respect to the Issuer occurs, the principal of, premium, if any, and
interest on all the Securities shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.
The Holders of a majority in principal amount of the Securities of a series
by
notice to the Trustee may rescind any such acceleration and its
consequences.
In
the
event of any Event of Default specified in Section 6.01(e), such Event of
Default and all consequences thereof (excluding, however, any resulting payment
default) shall be annulled, waived and rescinded, automatically and without
any
action by the Trustee or the Holders of the Securities, if within 20 days after
such Event of Default arose the Issuer delivers an Officers’ Certificate to the
Trustee stating that (x) the Indebtedness or guarantee that is the basis for
such Event of Default has been discharged or (y) the holders thereof have
rescinded or waived the acceleration, notice or action (as the case may be)
giving rise to such Event of Default or (z) the default that is the basis for
such Event of Default has been cured, it being understood that in no event
shall
an acceleration of the principal amount of the Securities of a series as
described above be annulled, waived or rescinded upon the happening of any
such
events.
SECTION
6.03.
Other
Remedies
.
If an
Event of Default with respect to a series occurs and is continuing, the Trustee
may pursue any available remedy at law or in equity to collect the payment
of
principal of or interest on the Securities or to enforce the performance of
any
provision of the Securities of such series, this Indenture or the Security
Documents.
The
Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder 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. To the extent required by law, all available remedies are
cumulative.
SECTION
6.04.
Waiver
of Past Defaults
.
Provided the Securities of a series are not then due and payable by reason
of a
declaration of acceleration, the Holders of a majority in principal amount
of
the Securities of such series by written notice to the Trustee may waive an
existing Default or Event of Default and its consequences except (a) a Default
in the payment of the principal of or interest on a Security of such series,
(b)
a Default arising from the failure to redeem or purchase any Security of such
series when required pursuant to the terms of this Indenture or (c) a Default
in
respect of a provision that under Section 9.02 cannot be amended without the
consent of each Holder affected. When a Default is waived, it is deemed cured
and the Issuer, the Trustee and the Holders will be restored to their former
positions and rights under this Indenture, but no such waiver shall extend
to
any subsequent or other Default or impair any consequent right.
SECTION
6.05.
Control
by Majority
.
The
Holders of a majority in principal amount of the Securities of a series may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Section 7.01, that the Trustee
determines is unduly prejudicial to
the
rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under this Indenture, the Trustee shall
be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION
6.06.
Limitation
on Suits
.
x)
Except
to enforce the right to receive payment of principal, premium (if any) or
interest when due, no Holder may pursue any remedy with respect to this
Indenture or the Securities unless:
(i)
the
Holder gives to the Trustee written notice stating that an Event of Default
is
continuing;
(ii)
the
Holders of at least 25% in principal amount of the Securities of the applicable
series make a written request to the Trustee to pursue the remedy;
(iii)
such
Holder or Holders offer to the Trustee reasonable security or indemnity
satisfactory to it against any loss, liability or expense;
(iv)
the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and
(v)
the
Holders of a majority in principal amount of the Securities of the applicable
series do not give the Trustee a direction inconsistent with the request during
such 60-day period.
(b)
A
Holder
may not use this Indenture to prejudice the rights of another Holder or to
obtain a preference or priority over another Holder.
SECTION
6.07.
Rights
of the Holders to Receive Payment
.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed or provided for in the
Securities, 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 specified in Section 6.01(a) or (b) occurs and is continuing
with respect to Securities of either series, the Trustee may recover judgment
in
its own name and as trustee of an express trust against the Issuer or any other
obligor on the Securities of such series for the whole amount then due and
owing
(together with interest on overdue principal and (to the extent lawful) on
any
unpaid interest at the rate provided for in such Securities) and the amounts
provided for in Section 7.07.
SECTION
6.09.
Trustee
May File Proofs of Claim
.
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 reasonable compensation, expenses disbursements and advances of the
Trustee (including counsel, accountants, experts or such other professionals
as
the Trustee deems necessary, advisable or appropriate)) and the Holders of
the
Securities of a series then outstanding allowed in any judicial proceedings
relative to the Issuer or any Guarantor, its creditors or its property, shall
be
entitled to participate as a member, voting
or
otherwise, of any official committee of creditors appointed in such matters
and,
unless prohibited by law or applicable regulations, may vote on behalf of the
Holders of each series in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of such series, to pay to the Trustee any amount due
it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee
under
Section 7.07.
SECTION
6.10.
Priorities
.
Subject
to the provisions of the Security Documents, if the Trustee collects any money
or property pursuant to this Article 6, it shall pay out the money or property
in the following order:
FIRST:
to
the Trustee for amounts due under Section 7.07;
SECOND:
to the Holders for amounts due and unpaid on the Securities (of the applicable
series, if only received in respect of one series) for principal, premium,
if
any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
THIRD:
to
the Issuer.
The
Trustee may fix a record date and payment date for any payment to the Holders
pursuant to this Section. At least 15 days before such record date, the Trustee
shall mail to each Holder and the Issuer a notice that states the record date,
the payment date and amount to be paid.
SECTION
6.11.
Undertaking
for Costs
.
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 and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This
Section does not apply to a suit by the Trustee, a suit by a Holder pursuant
to
Section 6.07 or a suit by Holders of more than 10% in principal amount of the
Securities.
SECTION
6.12.
Waiver
of Stay or Extension Laws
.
Neither
the Issuer nor any Guarantor (to the extent it may lawfully do so) shall at
any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or
at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Issuer and each Guarantor (to the extent that it
may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every
such
power as though no such law had been enacted.
ARTICLE
7
TRUSTEE
SECTION
7.01.
Duties
of Trustee
.
xi)
If an Event of Default has occurred and is continuing, the Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent person would exercise
or
use under the circumstances in the conduct of such person’s own
affairs.
(b)
Except
during the continuance of an Event of Default:
(i)
the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee (it being agreed that
the
permissive right of the Trustee to do things enumerated in this Indenture shall
not be construed as a duty); and
(ii)
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 or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee shall be under no duty to make
any
investigation as to any statement contained in any such instance, but may accept
the same as conclusive evidence of the truth and accuracy of such statement
or
the correctness of such opinions. However, in the case of certificates or
opinions required by any provision hereof to be provided to it, the Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c)
The
Trustee may not be relieved from liability for its own gross negligent action,
its own gross negligent failure to act or its own willful misconduct, except
that:
(i)
this
paragraph does not limit the effect of paragraph (b) of this
Section;
(ii)
the
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;
(iii)
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
6.05; and
(iv)
no
provision of this Indenture shall require the Trustee to expend or risk its
own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers.
(d)
Every
provision of this Indenture that in any way relates to the Trustee is subject
to
paragraphs (a), (b) and (c) of this Section.
(e)
The
Trustee shall not be liable for interest on any money received by it except
as
the Trustee may agree in writing with the Issuer.
(f)
Money
held in trust by the Trustee need not be segregated from other funds except
to
the extent required by law.
(g)
Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions
of
this Section and to the provisions of the TIA.
SECTION
7.02.
Rights
of Trustee
.
xii)
The
Trustee may conclusively rely on 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 require an Officers
’
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers
’
Certificate or Opinion of Counsel.
(c)
The
Trustee may act through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.
(d)
The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers;
provided, however, that the Trustee
’
s
conduct
does not constitute willful misconduct or gross negligence.
(e)
The
Trustee may consult with counsel of its own selection and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect of any action taken, omitted or suffered by it hereunder
in
good faith and in accordance with the advice or opinion of such
counsel.
(f)
The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, note or other paper
or document unless requested in writing to do so by the Holders of not less
than
a majority in principal amount of the Securities of a series at the time
outstanding, 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 to examine the books, records and premises of the Issuer, personally
or by agent or attorney, at the expense of the Issuer and shall incur no
liability of any kind by reason of such inquiry or investigation.
(g)
The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(h)
The
rights, privileges, protections, immunities and benefits given to the Trustee,
including its right to be indemnified, are extended to, and shall be enforceable
by, the Trustee in each of its capacities hereunder, and each agent, custodian
and other Person employed to act hereunder.
(i)
The
Trustee shall not be liable for any action taken or omitted by it in good faith
at the direction of the Holders of not less than a majority in principal amount
of the Securities of a series as to the time, method and place of conducting
any
proceedings for any remedy available to the Trustee or the exercising of any
power conferred by the Indenture.
(j)
Any
action taken, or omitted to be taken, by the Trustee in good faith pursuant
to
this Indenture upon the request or authority or consent of any person who,
at
the time of making such request or giving such authority or consent, is the
Holder of any Security shall be conclusive and binding upon future Holders
of
Securities and upon Securities executed and delivered in exchange therefor
or in
place thereof.
SECTION
7.03.
Individual
Rights of Trustee
.
The
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Issuer or their Affiliates with
the same rights it would have if it were not Trustee. Any Paying Agent or
Registrar 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
.
The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, any Guarantee or the Securities, it
shall not be accountable for the Issuer
’
s
use of
the proceeds from the Securities, and it shall not be responsible for any
statement of the Issuer or any Guarantor in this Indenture or in any document
issued in connection with the sale of the Securities or in the Securities other
than the Trustee
’
s
certificate of authentication. The Trustee shall not be charged with knowledge
of any Default or Event of Default under Sections 6.01(c), (d), (e), (h), or
(i)
or of the identity of any Significant Subsidiary unless either (a) a Trust
Officer shall have actual knowledge thereof or (b) the Trustee shall have
received written notice thereof in accordance with Section 13.02 hereof from
the
Issuer, any Guarantor or any Holder. In accepting the trust hereby created,
the
Trustee acts solely as Trustee for the Holders of the Securities and not in
its
individual capacity and all persons, including without limitation the Holders
of
Securities and the Issuer having any claim against the Trustee arising from
this
Indenture shall look only to the funds and accounts held by the Trustee
hereunder for payment except as otherwise provided herein.
SECTION
7.05.
Notice
of Defaults
.
If a
Default occurs and is continuing and if it is actually known to the Trustee,
the
Trustee shall mail to each Holder of the affected series notice of the Default
within the earlier of 90 days after it occurs or 30 days after it is actually
known to a Trust Officer or written notice of it is received by the Trustee.
Except in the case of a Default in the payment of principal of, premium (if
any)
or interest on any Security, the Trustee may withhold the notice if and so
long
as a committee of its Trust Officers in good faith determines that withholding
the notice is in the interests of the Holders of the affected
series.
SECTION
7.06.
Reports
by Trustee to the Holders
.
As
promptly as practicable after each June 30 beginning with the June 30 following
the date of this Indenture, and in any event prior to June 30 in each year,
the
Trustee shall mail to each Holder a brief report dated as of such June 30 that
complies with Section 313(a) of the TIA if and to the extent required thereby.
The Trustee shall also comply with Section 313(b) of the TIA.
A
copy of
each report at the time of its mailing to the Holders shall be filed with the
SEC and each stock exchange (if any) on which the Securities are listed. The
Issuer agrees to notify promptly the Trustee whenever the Securities become
listed on any stock exchange and of any delisting thereof.
SECTION
7.07.
Compensation
and Indemnity
.
The
Issuer shall pay to the Trustee from time to time reasonable compensation for
its services. The Trustee
’
s
compensation shall not be limited by any law on compensation of a trustee of
an
express trust. The Issuer shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee
’
s
agents,
counsel, accountants and experts. The Issuer and each Guarantor, jointly and
severally shall indemnify the Trustee against any and all loss, liability,
claim, damage or expense (including reasonable attorneys
’
fees and
expenses) incurred by or in connection with the acceptance or administration
of
this trust and the performance of its duties hereunder, including the costs
and
expenses of enforcing this Indenture or Guarantee against the Issuer or a
Guarantor (including this Section 7.07) and defending itself against or
investigating any claim (whether asserted by the Issuer, any Guarantor, any
Holder or any other Person). The obligation to pay such amounts shall survive
the payment in full or defeasance of the Securities or the removal or
resignation of the Trustee. The Trustee shall notify the Issuer of any claim
for
which it may seek indemnity promptly upon obtaining actual knowledge thereof;
provided, however, that any failure so to notify the Issuer shall not relieve
the Issuer or any Guarantor of its indemnity obligations hereunder. The Issuer
shall defend the claim and the indemnified party shall provide reasonable
cooperation at the Issuer
’
s
expense
in the defense. Such indemnified parties may have separate counsel and the
Issuer and the Guarantors, as applicable shall pay the fees and expenses of
such
counsel; provided, however, that the Issuer shall not be required to pay such
fees and expenses if it assumes such indemnified parties
’
defense
and, in such indemnified parties
’
reasonable judgment, there is no conflict of interest between the Issuer and
the
Guarantors, as applicable, and such parties in connection with such defense.
The
Issuer need not reimburse any expense or indemnify against any loss, liability
or expense incurred by an indemnified party through such party
’
s
own
willful misconduct, negligence or bad faith.
To
secure
the Issuer’s and the Guarantors’ payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property
held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The
Issuer’s and the Guarantors’ payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. Without prejudice to any other rights available to
the
Trustee under applicable law, when the Trustee
incurs
expenses after the occurrence of a Default specified in Section 6.01(f) or
(g)
with respect to the Issuer, the expenses are intended to constitute expenses
of
administration under the Bankruptcy Law.
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
repayment of such funds or adequate indemnity against such risk or liability
is
not assured to its satisfaction.
SECTION
7.08.
Replacement
of Trustee
.
xiii)
The
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee. The Issuer shall
remove the Trustee if:
(i)
the
Trustee fails to comply with Section 7.10;
(ii)
the
Trustee is adjudged bankrupt or insolvent;
(iii)
a
receiver or other public officer takes charge of the Trustee or its property;
or
(iv)
the
Trustee otherwise becomes incapable of acting.
(b)
If
the
Trustee resigns, is removed by the Issuer or by the Holders of a majority in
principal amount of the Securities and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the office of Trustee
for
any reason (the Trustee in such event being referred to herein as the retiring
Trustee), the Issuer shall promptly appoint a successor Trustee.
(c)
A
successor Trustee shall deliver a written acceptance of its appointment to
the
retiring Trustee and to the Issuer. Thereupon 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. The
successor Trustee shall mail a notice of its succession to the Holders. The
retiring Trustee shall promptly transfer all property held by it as Trustee
to
the successor Trustee, subject to the Lien provided for in Section
7.07.
(d)
If
a
successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee or the Holders of 10% in principal
amount of the Securities may petition at the expense of the Issuer any court
of
competent jurisdiction for the appointment of a successor Trustee.
(e)
If
the
Trustee fails to comply with Section 7.10, unless the Trustee
’
s
duty to
resign is stayed as provided in Section 310(b) of the TIA, any Holder who has
been a bona fide holder of a Security for at least six months may petition
any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(f)
Notwithstanding
the replacement of the Trustee pursuant to this Section, the Issuer
’
s
obligations under Section 7.07 shall continue for the benefit of the retiring
Trustee.
SECTION
7.09.
Successor
Trustee by Merger
.
If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
In
case
at the time such successor or successors by merger, conversion or consolidation
to the Trustee shall succeed to the trusts created by this Indenture any of
the
Securities shall have been authenticated but not delivered, any such successor
to the Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Securities so authenticated; and in case at that
time
any of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the
Securities or in this Indenture provided that the certificate of the Trustee
shall have.
SECTION
7.10.
Eligibility;
Disqualification
.
The
Trustee shall at all times satisfy the requirements of Section 310(a) of the
TIA. The Trustee shall have a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
The Trustee shall comply with Section 310(b) of the TIA, subject to its right
to
apply for a stay of its duty to resign under the penultimate paragraph of
Section 310(b) of the TIA; provided, however, that there shall be excluded
from
the operation of Section 310(b)(1) of the TIA any series of securities issued
under this Indenture and any indenture or indentures under which other
securities or certificates of interest or participation in other securities
of
the Issuer are outstanding if the requirements for such exclusion set forth
in
Section 310(b)(1) of the TIA are met.
SECTION
7.11.
Preferential
Collection of Claims Against the Issuer
.
The
Trustee shall comply with Section 311(a) of the TIA, excluding any creditor
relationship listed in Section 311(b) of the TIA. A Trustee who has resigned
or
been removed shall be subject to Section 311(a) of the TIA to the extent
indicated.
ARTICLE
8
DISCHARGE
OF INDENTURE; DEFEASANCE
SECTION
8.01.
Discharge
of Liability on Securities; Defeasance
.
This
Indenture shall be discharged and shall cease to be of further effect (except
as
to surviving rights of registration of transfer or exchange of Securities,
as
expressly provided for in this Indenture) as to all outstanding Securities
when:
(a)
either
(i) all the Securities theretofore authenticated and delivered (other than
Securities pursuant to Section 2.08 which have been replaced or paid and
Securities for whose payment money has theretofore been deposited in trust
or
segregated and held
in
trust
by the Issuer and thereafter repaid to the Issuer or discharged from such trust)
have been delivered to the Trustee for cancellation or (ii) all of the
Securities (a) have become due and payable, (b) will become due and payable
at
their stated maturity within one year (or, in the case of Floating Rate Notes,
within the remaining term of the then current Interest Period) or (c) if
redeemable at the option of the Issuer, are to be called for redemption within
one year (or, in the case of Floating Rate Notes, within the remaining term
of
the then current Interest Period) 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 Issuer, and the Issuer has irrevocably deposited or caused
to be
deposited with the Trustee cash in U.S. Dollars, U.S. Government Obligations
or
a combination thereof in an amount sufficient in the written opinion of a firm
of independent public accountants delivered to the Trustee (which delivery
shall
only be required if U.S. Government Obligations have been so deposited) to
pay
and discharge the entire Indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, for principal of, premium, if any,
and interest on the Securities to the date of deposit together with irrevocable
instructions from the Issuer directing the Trustee to apply such funds to the
payment thereof at maturity or redemption, as the case may be;
(b)
the
Issuer and/or the Guarantors have paid all other sums payable under this
Indenture; and
(c)
the
Issuer 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.
Subject
to Sections 8.01(c) and 8.02, the Issuer at any time may terminate (i) all
of
its obligations under the Fixed Rate Notes and this Indenture (with respect
to
such Fixed Rate Notes) (“legal defeasance option”) or (ii) its obligations under
Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11 and 4.12 for
the
benefit of the Fixed Rate Notes and the operation of Section 5.01 and Sections
6.01(c), 6.01(d), 6.01(e), 6.01(f) (with respect to Significant Subsidiaries
of
the Company only), 6.01(g) (with respect to Significant Subsidiaries of the
Company only), 6.01(h), 6.01(i), 6.01(j) and 6.01(k) (but only to the extent
that those provisions relate to defaults with respect to the Fixed Rate Notes)
(“covenant defeasance option”) for the benefit of the Fixed Rate Notes. The
Issuer may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. In the event that the Issuer
terminates all of its obligations under the Fixed Rate Notes and this Indenture
(with respect to such Fixed Rate Notes) by exercising its legal defeasance
option or its covenant defeasance option, the obligations of each Guarantor
under its Guarantee of such Securities and all obligations under the Security
Documents shall be terminated simultaneously with the termination of such
obligations so long as no Floating Rate Notes are outstanding at such
time.
If
the
Issuer exercises its legal defeasance option, payment of the Securities so
defeased may not be accelerated because of an Event of Default. If the Issuer
exercises its covenant defeasance option, payment of the Securities so defeased
may not be accelerated because of an Event of Default specified in Section
6.01(c), 6.01(d), 6.01(e), 6.01(f) (with respect to Significant Subsidiaries
of
the Company only), 6.01(g) (with respect to Significant
Subsidiaries
of the Company only), 6.01(h), 6.01(i), 6.01(j) or because of the failure of
the
Issuer to comply with Section 5.01.
Upon
satisfaction of the conditions set forth herein and upon request of the Issuer,
the Trustee shall acknowledge in writing the discharge of those obligations
that
the Issuer terminates.
(d)
Notwithstanding
clauses (a) and (b) above, the Issuer
’
s
obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and
in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Issuer
’
s
obligations in Sections 7.07, 8.05 and 8.06 shall survive such satisfaction
and
discharge.
SECTION
8.02.
Conditions
to Defeasance
.
xiv)
The
Issuer may exercise its legal defeasance option or its covenant defeasance
option, in each case, with respect to the Fixed Rate Notes only if:
(i)
the
Issuer irrevocably deposits in trust with the Trustee cash in U.S. Dollars,
U.S.
Government Obligations or a combination thereof in an amount sufficient or
U.S.
Government Obligations, the principal of and the interest on which will be
sufficient, or a combination thereof sufficient, to pay the principal of and
premium (if any) and interest on the Fixed Rate Notes when due at maturity
or
redemption, as the case may be, including interest thereon to maturity or such
redemption date;
(ii)
the
Issuer delivers to the Trustee a certificate from a nationally recognized firm
of independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the deposited U.S.
Government Obligations plus any deposited money without investment will provide
cash at such times and in such amounts as will be sufficient to pay principal,
premium, if any, and interest when due on all the Fixed Rate Notes to maturity
or redemption, as the case may be;
(iii)
123
days
pass after the deposit is made and during the 123-day period no Default
specified in Section 6.01(f) or (g) with respect to the Issuer occurs which
is
continuing at the end of the period;
(iv)
the
deposit does not constitute a default under any other agreement binding on
the
Issuer;
(v)
in
the
case of the legal defeasance option, the Issuer shall have delivered to the
Trustee an Opinion of Counsel stating that (1) the Issuer has received from,
or
there has been published by, the Internal Revenue Service a ruling, or (2)
since
the date of this 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 deposit and
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
deposit and defeasance had not occurred;
(vi)
such
exercise does not impair the right of any Holder to receive payment of
principal, premium, if any, and interest on such Holder
’
s
Fixed
Rate Notes on or after the due dates therefore or to institute suit for the
enforcement of any payment on or with respect to such Holder
’
s
Fixed
Rate Notes;
(vii)
in
the
case of the covenant defeasance option, the Issuer shall have delivered to
the
Trustee an Opinion of Counsel to the effect that the Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit
and 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
deposit and defeasance had not occurred; and
(viii)
the
Issuer delivers to the Trustee an Officers
’
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Fixed Rate Notes to be so
defeased and discharged as contemplated by this Article 8 have been complied
with.
(b)
Before
or
after a deposit, the Issuer may make arrangements satisfactory to the Trustee
for the redemption of such Fixed Rate Notes at a future date in accordance
with
Article 3.
SECTION
8.03.
Application
of Trust Money
.
The
Trustee shall hold in trust money or U.S. Government Obligations (including
proceeds thereof) deposited with it pursuant to this Article 8. It shall apply
the deposited money and the money from U.S. Government Obligations through
each
Paying Agent and in accordance with this Indenture to the payment of principal
of and interest on the Securities so discharged or defeased.
SECTION
8.04.
Repayment
to Company
.
Each of
the Trustee and each Paying Agent shall promptly turn over to the Issuer upon
request any money or U.S. Government Obligations held by it as provided in
this
Article which, in the written opinion of nationally recognized firm of
independent public accountants delivered to the Trustee (which delivery shall
only be required if U.S. Government Obligations have been so deposited), are
in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent discharge or defeasance in accordance with this Article
8.
Subject
to any applicable abandoned property law, the Trustee and each Paying Agent
shall pay to the Issuer upon written request any money held by them for the
payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Issuer for payment
as
general creditors, and the Trustee and each Paying Agent shall have no further
liability with respect to such monies.
SECTION
8.05.
Indemnity
for U.S. Government Obligations
.
The
Issuer shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations
or
the principal and interest received on such U.S. Government
Obligations.
SECTION
8.06.
Reinstatement
.
If the
Trustee or any Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with this Article 8 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
Issuer
’
s
obligations under this Indenture and the Securities so discharged or defeased
shall be revived and reinstated as though no deposit had occurred pursuant
to
this Article 8 until such time as the Trustee or any Paying Agent is permitted
to apply all such money or U.S. Government Obligations in accordance with this
Article 8; provided, however, that, if the Issuer has made any payment of
principal of or interest on, any such Securities because of the reinstatement
of
its obligations, the Issuer shall be subrogated to the rights of the Holders
of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or any Paying Agent.
ARTICLE
9
AMENDMENTS
AND WAIVERS
SECTION
9.01.
Without
Consent of the Holders
.
The
Issuer and the Trustee may amend this Indenture, the Securities, any Security
Document or the Intercreditor Agreement with respect to each series of
Securities without notice to or consent of any Holder:
(i)
to
cure
any ambiguity, omission, defect or inconsistency;
(ii)
to
provide for the assumption by a Successor Company of the obligations of the
Issuer under this Indenture and the Securities;
(iii)
to
provide for the assumption by a Successor Guarantor of the obligations of a
Guarantor under this Indenture and its Guarantee;
(iv)
to
provide for uncertificated Securities in addition to or in place of certificated
Securities;
provided
,
however
,
that
the uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(v)
to
add
additional Guarantees with respect to the Securities of such series or to secure
the Securities of such series;
(vi)
to
add
additional assets as Collateral;
(vii)
to
release Collateral from the Lien pursuant to the Indenture, the Security
Documents and the Intercreditor Agreement when permitted or required by the
Indenture or the Security Documents;
(viii)
to
add to
the covenants of the Issuer for the benefit of the Holders of such series or
to
surrender any right or power herein conferred upon the Issuer;
(ix)
to
modify
the Security Documents and/or the Intercreditor Agreement to secure First
Priority Lien Obligations and Other Second-Lien
Obligations
so long as such First Priority Lien Obligations and Other Second-Lien
Obligations are not prohibited by the provisions of the Credit Agreement or
this
Indenture;
(x)
to
comply
with any requirement of the SEC in connection with qualifying or maintaining
the
qualification of, this Indenture under the TIA;
(xi)
to
make
any change that does not adversely affect the rights of any Holder;
(xii)
to
effect
any provision of the Indenture or to make certain changes to the Indenture
to
provide for the issuance of Additional Fixed Rate Notes or Floating Rate Notes;
or
(xiii)
to
provide for the issuance of the Exchange Securities or Additional Securities,
which shall have terms substantially identical in all material respects to
the
Initial Securities, and which shall be treated, together with any outstanding
Initial Securities, as a single issue of securities.
After
an
amendment under this Section 9.01 becomes effective, the Issuer shall mail
to
the Holders a notice briefly describing such amendment. The failure to give
such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.01.
SECTION
9.02.
With
Consent of the Holders
.
The
Issuer and the Trustee may amend this Indenture, the Securities and the Security
Documents with respect to each series of Securities with the written consent
of
the Holders of at least a majority in principal amount of the Securities of
such
series then outstanding voting as a single class (including consents obtained
in
connection with a tender offer or exchange for the Securities). However, without
the consent of each Holder of an outstanding Security affected, an amendment
may
not:
(i)
reduce
the amount of Securities whose Holders must consent to an
amendment,
(ii)
reduce
the rate of or extend the time for payment of interest on any
Security,
(iii)
reduce
the principal of or change the Stated Maturity of any Security,
(iv)
reduce
the premium payable upon the redemption of any Security or change the time
at
which any Security may be redeemed in accordance with Article 3,
(v)
make
any
Security payable in money other than that stated in such Security,
(vi)
expressly
subordinate the Securities or any Guarantees to any other Indebtedness of the
Issuer or any Guarantor,
(vii)
impair
the right of any Holder to receive payment of principal of, premium, if any,
and
interest on such Holder
’
s
Securities on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder
’
s
Securities,
(viii)
make
any
change in Section 6.04 or 6.07 or the second sentence of this Section
9.02,
(ix)
modify
any Guarantees in any manner adverse to the Holders, or
(x)
make
any
change in the provisions in the Intercreditor Agreement or the Indenture dealing
with the application of proceeds of Collateral that would adversely affect
the
holders of the Securities.
Subject
to Section 11.04, without the consent of the holders of at least two-thirds
in
aggregate principal amount of the Securities of such series then outstanding,
no
amendment or waiver may release all or substantially all of the Collateral
from
the Lien of the Indenture and the Security Documents with respect to the
Securities of such series.
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, but it shall be
sufficient if such consent approves the substance thereof.
After
an
amendment under this Section 9.02 becomes effective, the Issuer shall promptly
mail to the Holders a notice briefly describing such amendment. The failure
to
give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.02.
SECTION
9.03.
Compliance
with Trust Indenture Act
.
From
the date on which this Indenture is qualified under the TIA, every amendment,
waiver or supplement to this Indenture or the Securities shall comply with
the
TIA as then in effect.
SECTION
9.04.
Revocation
and Effect of Consents and Waivers
.
xv)
A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder
’
s
Security, even if notation of the consent or waiver is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent or waiver
as to such Holder
’
s
Security or portion of the Security if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers
’
Certificate from the Issuer certifying that the requisite principal amount
of
Securities have consented. After an amendment or waiver becomes effective,
it
shall bind every Holder. An amendment or waiver becomes effective upon the
(i)
receipt by the Issuer or the Trustee of consents by the Holders of the requisite
principal amount of securities, (ii) satisfaction of conditions to effectiveness
as set forth in this Indenture and any indenture supplemental hereto containing
such amendment or waiver
and
(iii)
execution of such amendment or waiver (or supplemental indenture) by the Issuer
and the Trustee.
(b)
The
Issuer may, but shall not be obligated to, fix a record date for the purpose
of
determining the Holders entitled to give their consent or take any other action
described above or required or permitted to be taken pursuant to this Indenture.
If a record date is fixed, then notwithstanding 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 give such
consent or to revoke any consent previously given or to take any such action,
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.
SECTION
9.05.
Notation
on or Exchange of Securities
.
If an
amendment, supplement or waiver changes the terms of a Security of a series,
the
Issuer may require the Holder of the Security of such series to deliver it
to
the Trustee. The Trustee may place an appropriate notation on the Security
of
such series regarding the changed terms and return it to the Holder.
Alternatively, if the Issuer or the Trustee so determines, the Issuer in
exchange for the Security of such series shall issue and the Trustee shall
authenticate a new Security of the same series that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security of such
series shall not affect the validity of such amendment, supplement or
waiver.
SECTION
9.06.
Trustee
to Sign Amendments
.
The
Trustee shall sign any amendment, supplement or waiver authorized pursuant
to
this Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may but need
not sign it. In signing such amendment, the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and shall be provided with, and (subject
to Section 7.01) shall be fully protected in relying upon, an
Officers
’
Certificate and an Opinion of Counsel stating that such amendment, supplement
or
waiver is authorized or permitted by this Indenture and that such amendment,
supplement or waiver is the legal, valid and binding obligation of the Issuer
and the Guarantors, enforceable against them in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).
SECTION
9.07.
Payment
for Consent
.
Neither
the Issuer nor any Affiliate of the Issuer shall, directly or indirectly, pay
or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid to all Holders that so consent,
waive or agree to amend in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
SECTION
9.08.
Additional
Voting Terms; Calculation of Principal Amount
.
Except
as otherwise set forth herein, all Securities of a series issued under this
Indenture shall vote and consent separately on all matters as to which any
of
such Securities may vote. Determinations as to whether Holders of the requisite
aggregate principal amount of Securities have concurred in any direction, waiver
or consent shall be made in accordance with this Article 9 and Section
2.14.
ARTICLE
10
RANKING
OF NOTE LIENS
SECTION
10.01.
Relative
Rights
.
The
Intercreditor Agreement defines the relative rights, as lienholders, of holders
of Second Priority Liens and holders of First Priority Liens. Nothing in this
Indenture or the Intercreditor Agreement will:
(a)
impair,
as between the Issuer and Holders of each series of Securities, the obligation
of the Issuer, which is absolute and unconditional, to pay principal of, premium
and interest on such series of Securities in accordance with their terms or
to
perform any other obligation of the Issuer or any other Obligor under this
Indenture, the Securities, the Guarantees and the Security
Documents;
(b)
restrict
the right of any Holder to sue for payments that are then due and owing, in
a
manner not inconsistent with the provisions of the Intercreditor
Agreement;
(c)
prevent
the Trustee, the Collateral Agent or any Holder from exercising against the
Issuer or any other Obligor any of its other available remedies upon a Default
or Event of Default (other than its rights as a secured party, which are subject
to the Intercreditor Agreement); or
(d)
restrict
the right of the Trustee, the Collateral Agent or any Holder:
(i)
to
file
and prosecute a petition seeking an order for relief in an involuntary
bankruptcy case as to any Obligor or otherwise to commence, or seek relief
commencing, any insolvency or liquidation Proceeding involuntarily against
any
Obligor;
(ii)
to
make,
support or oppose any request for an order for dismissal, abstention or
conversion in any insolvency or liquidation proceeding;
(iii)
to
make,
support or oppose, in any insolvency or liquidation proceeding, any request
for
an order extending or terminating any period during which the debtor (or any
other Person) has the exclusive right to propose a plan of reorganization or
other dispositive restructuring or liquidation plan therein;
(iv)
to
seek
the creation of, or appointment to, any official committee representing
creditors (or certain of the creditors) in any insolvency or liquidation
proceedings and, if appointed, to serve and act as a member of such committee
without being in any respect restricted or bound by, or liable for, any of
the
obligations under this Article 10;
(v)
to
seek
or object to the appointment of any professional person to serve in any capacity
in any insolvency or liquidation proceeding or to support or object to any
request for compensation made by any professional person or others
therein;
(vi)
to
make,
support or oppose any request for order appointing a trustee or examiner in
any
insolvency or liquidation proceedings; or
(vii)
otherwise
to make, support or oppose any request for relief in any insolvency or
liquidation proceeding that it is permitted by law to make, support or
oppose:
if
it
were a holder of unsecured claims; or
(x)
as to
any matter relating to any plan of reorganization or other
(y)
restructuring or liquidation plan or as to any matter relating to the
administration of the estate or the disposition of the case or proceeding (in
each case except as set forth in the Intercreditor Agreement).
ARTICLE
11
COLLATERAL
SECTION
11.01.
Security
Documents
.
The
payment of the principal of and interest and premium, if any, on the Securities
of each series when due, whether on an interest payment date, at maturity,
by
acceleration, repurchase, redemption or otherwise and whether by the Issuer
pursuant to the Securities or by any Guarantor pursuant to its Guarantees,
the
payment of all other Obligations and the performance of all other obligations
of
the Issuer and the Guarantors under this Indenture, the Securities, the
Guarantees and the Security Documents are secured as provided in the Security
Documents which the Issuer and the Guarantors have entered into simultaneously
with the execution of this Indenture and will be secured by Security Documents
hereafter delivered as required or permitted by this Indenture. The Issuer
shall, and shall cause each Restricted Subsidiary to, and each Restricted
Subsidiary shall, do all filings (including filings of continuation statements
and amendments to UCC financing statements that may be necessary to continue
the
effectiveness of such UCC financing statements) and all other actions as are
necessary or required by the Security Documents to maintain (at the sole cost
and expense of the Issuer and its Restricted Subsidiaries) the security interest
created by the Security Documents in the Collateral (other than with respect
to
any Collateral the security interest in which is not required to be perfected
under the Security Documents) as a perfected second priority security interest
subject only to Permitted Liens.
SECTION
11.02.
Collateral
Agent
.
xvi)
The
Collateral Agent is authorized and empowered to appoint one or more
co-Collateral Agents as it deems necessary or appropriate.
(b)
Subject
to Section 7.01, neither the Trustee nor the Collateral Agent nor any of their
respective officers, directors, employees, attorneys or agents will be
responsible or liable for the existence, genuineness, value or protection of
any
Collateral, for the legality, enforceability, effectiveness or sufficiency
of
the Security Documents, for the creation, perfection, priority, sufficiency
or
protection of any Second Priority Lien, or for any defect or deficiency as
to
any such matters, or for any failure to demand, collect, foreclose or realize
upon or otherwise enforce any of the Second Priority Liens or Security Documents
or any delay in doing so.
(c)
The
Collateral Agent will be subject to such directions as may be given it by the
Trustee from time to time (as required or permitted by this Indenture). Except
as directed by the Trustee as required or permitted by this Indenture and any
other representatives, the Collateral Agent will not be obligated:
(i)
to
act
upon directions purported to be delivered to it by any other
Person;
(ii)
to
foreclose upon or otherwise enforce any Second Priority Lien; or
(iii)
to
take
any other action whatsoever with regard to any or all of the Second Priority
Liens, Security Documents or Collateral.
(d)
The
Collateral Agent will be accountable only for amounts that it actually receives
as a result of the enforcement of the Second Priority Liens or Security
Documents.
(e)
In
acting
as Collateral Agent or Co-Collateral Agent, the Collateral Agent and each
Co-Collateral Agent may rely upon and enforce each and all of the rights,
powers, immunities, indemnities and benefits of the Trustee under Article 7
hereof.
(f)
[Intentionally
omitted].
(g)
If
the
Issuer (i) Incurs First Priority Lien Obligations at any time when no
intercreditor agreement is in effect or at any time when Indebtedness
constituting First Priority Lien Obligations entitled to the benefit of an
existing Intercreditor Agreement is concurrently retired, and (ii) delivers
to
the Collateral Agent an Officers
’
Certificate so stating and requesting the Collateral Agent to enter into an
intercreditor agreement (on substantially the same terms as the Intercreditor
Agreement in effect on the Issue Date) in favor of a designated agent or
representative for the holders of the First Priority Lien Obligations so
Incurred, the Collateral Agent shall (and is hereby authorized and directed
to)
enter into such intercreditor agreement, bind the Holders on the terms set
forth
therein and perform and observe its obligations thereunder.
SECTION
11.03.
Authorization
of Actions to Be Taken
.
xvii)
Each
Holder of Securities of each such series, by its acceptance thereof, consents
and agrees to the terms of each Security Document and the Intercreditor
Agreement, as originally in effect and as amended, supplemented or replaced
from
time to time in accordance with its terms or the terms of this Indenture,
authorizes and directs the Trustee and the Collateral Agent to enter into the
Security Documents to which it is a party, authorizes and empowers the Trustee
to direct the Collateral Agent to enter into, and the Collateral Agent to
execute and deliver, the Intercreditor Agreement, and authorizes and empowers
the Trustee and the Collateral Agent to bind the Holders of Securities of each
such series and other holders of Obligations as set forth in the Security
Documents to which it is a party and the Intercreditor Agreement and to perform
its obligations and exercise its rights and powers thereunder.
(b)
The
Collateral Agent and the Trustee are authorized and empowered to receive for
the
benefit of the Holders of Securities of each series any funds collected or
distributed under the Security Documents to which the Collateral Agent or
Trustee is a party and to make further distributions of such funds to the
Holders of Securities of each series according to the provisions of this
Indenture.
(c)
Subject
to the provisions of Section 7.01, Section 7.02, and the Intercreditor
Agreement, the Trustee may, in its sole discretion and without the consent
of
the Holders, direct, on behalf of the Holders, the Collateral Agent to take
all
actions it deems necessary or appropriate in order to:
(i)
foreclose
upon or otherwise enforce any or all of the Second Priority Liens;
(ii)
enforce
any of the terms of the Security Documents to which the Collateral Agent or
Trustee is a party; or
(iii)
collect
and receive payment of any and all Obligations.
Subject
to the Intercreditor Agreement, the Trustee is authorized and empowered to
institute and maintain, or direct the Collateral Agent to institute and
maintain, such suits and proceedings as it may deem expedient to protect or
enforce the Second Priority Liens or the Security Documents to which the
Collateral Agent or Trustee is a party or to prevent any impairment of
Collateral by any acts that may be unlawful or in violation of the Security
Documents to which the Collateral Agent or Trustee is a party or this Indenture,
and such suits and proceedings as the Trustee or the Collateral Agent may deem
expedient to preserve or protect its interests and the interests of the Holders
of Securities of such series in the Collateral, including power to institute
and
maintain suits or proceedings to restrain the enforcement of or compliance
with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder
or be
prejudicial to the interests of
Holders,
the Trustee or the Collateral Agent.
SECTION
11.04.
Release
of Liens
.
xviii)
Subject
to subsections (b) and (c) of this Section 11.04, Collateral may be released
from the Lien and security interest created by the Security Documents at any
time or from time to time in accordance with the provisions of the Security
Documents, the Intercreditor Agreement or as provided hereby. Upon the request
of the Issuer pursuant to an Officers
’
Certificate and Opinion of Counsel certifying that all conditions precedent
hereunder have been met, the Issuer and the Guarantors will be entitled to
the
release of assets included in the Collateral from the Liens securing the
Securities, and the Collateral Agent and the Trustee (if the Trustee is not
then
the Collateral Agent) shall release the same from such Liens at the
Issuer
’
s
sole
cost and expense, under any one or more of the following
circumstances:
(1)
subject
to the following paragraph, upon the Discharge of Senior Lender Claims and
concurrent release of all other Liens on such property or assets securing First
Priority Lien Obligations (including all commitments and letters of credit
thereunder);
provided
,
however
,
that if
the Issuer or any Guarantor subsequently incurs First Priority Lien Obligations
that are secured by Liens on property or assets of the Issuer or any Guarantor
of the type constituting the Collateral and the related Liens are incurred
in
reliance on clause (6)(B) of the definition of Permitted Liens, then the Issuer
and its Restricted Subsidiaries will be required to reinstitute the security
arrangements with respect to the Collateral in favor of the Securities, which,
in the case of any such subsequent First Priority Lien Obligations, will be
Second Priority Liens on the Collateral securing such First Priority Lien
Obligations to the same extent provided by the Security Documents and on the
terms and conditions of the security documents relating to such First Priority
Lien Obligations, with the Second Priority Lien held either by the
administrative agent, collateral agent or other representative for such First
Priority Lien Obligations or by a collateral agent or other representative
designated by the Issuer to hold the Second Priority Liens for the benefit
of
the holders of the Securities and subject to an intercreditor agreement that
provides the administrative agent or collateral agent substantially the same
rights and powers as afforded under the Intercreditor Agreement;
(2)
to
enable
the Issuer or any Guarantor to consummate the disposition of such property
or
assets to the extent not prohibited under Section 4.06;
(3)
in
the
case of a Guarantor that is released from its Guarantee with respect to the
Securities, the release of the property and assets of such Guarantor;
or
(4)
as
described under Article 9.
If
an
Event of Default under the Indenture exists on the date of Discharge of Senior
Lender Claims, the Second Priority Liens on the Collateral securing the
Securities will not be released, except to the extent the Collateral or any
portion thereof was disposed of in order to repay the First Priority Lien
Obligations secured by the Collateral, and thereafter the Trustee (or another
designated representative acting at the direction of the holders of a majority
of outstanding principal amount of the Securities and Other Second-Lien
Obligations) will have the right to direct the First Lien Agent to foreclose
upon the Collateral (but in such event, the Liens on the Collateral securing
the
Securities will be released when such Event of Default and all other Events
of
Default under the Indenture cease to exist).
Upon
the
receipt of an Officers’ Certificate from the Issuer, as described above, and any
necessary or proper instruments of termination, satisfaction or release prepared
by the Issuer, the Collateral Agent shall execute, deliver or acknowledge such
instruments or releases to evidence the release of any Collateral permitted
to
be released pursuant to this Indenture or the Security Documents or the
Intercreditor Agreement.
(b)
Except
as
otherwise provided in the Intercreditor Agreement, no Collateral may be released
from the Lien and security interest created by the Security Documents unless
the
Officers
’
Certificate required by this Section 11.04 has been delivered to the Collateral
Agent and the Trustee not less than five days prior to the date of such
release.
(c)
At
any
time when a Default or Event of Default has occurred and is continuing and
the
maturity of the Securities has been accelerated (whether by declaration or
otherwise) and the Trustee has delivered a notice of acceleration to
the
Collateral
Agent, no release of Collateral pursuant to the provisions of this Indenture
or
the Security Documents will be effective as against the Holders, except as
otherwise provided in the Intercreditor Agreement.
SECTION
11.05.
Filing,
Recording and Opinions
.
xix)
The
Issuer will comply with the provisions of TIA
§
314(b)
and 314(d), in each case following qualification of this Indenture pursuant
to
the TIA and except to the extent not required as set forth in any SEC regulation
or interpretation (including any no-action letter issued by the Staff of the
SEC, whether issued to the Issuer or any other Person). Following such
qualification, to the extent the Issuer is required to furnish to the Trustee
an
Opinion of Counsel pursuant to TIA
§
314(b)(2),
the Issuer will furnish such opinion not more than 60 but not less than 30
days
prior to each September 30.
Any
release of Collateral permitted by Section 11.04 hereof will be deemed not
to
impair the Liens under the Indenture and the Security Documents in contravention
thereof and any person that is required to deliver an Officers’ Certificate or
Opinion of Counsel pursuant to Section 314(d) of the TIA, shall be entitled
to
rely upon the foregoing as a basis for delivery of such certificate or opinion.
The Trustee may, to the extent permitted by Section 7.01 and 7.02 hereof, accept
as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such documents and Opinion of
Counsel.
(b)
If
any
Collateral is released in accordance with this Indenture or any Security
Document and if the Issuer has delivered the certificates and documents required
by the Security Documents and Section 11.04, the Trustee will determine whether
it has received all documentation required by TIA
§
314(d)
in connection with such release and, based on such determination and the Opinion
of Counsel delivered pursuant to Section 11.04, will, upon request, deliver
a
certificate to the Collateral Agent setting forth such
determination.
SECTION
11.06.
[Intentionally
omitted].
SECTION
11.07.
Powers
Exercisable by Receiver or Trustee
.
In case
the Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article 11 upon the Issuer or a
Guarantor with respect to the release, sale or other disposition of such
property may be exercised by such receiver or trustee, and an instrument signed
by such receiver or trustee shall be deemed the equivalent of any similar
instrument of the Issuer or a Guarantor or of any officer or officers thereof
required by the provisions of this Article 11; and if the Trustee shall be
in
the possession of the Collateral under any provision of this Indenture, then
such powers may be exercised by the Trustee.
SECTION
11.08.
Release
Upon Termination of the Issuer
’
s
Obligations
.
In the
event (i) that the Issuer delivers to the Trustee, in form and substance
acceptable to it, an Officers
’
Certificate and Opinion of Counsel certifying that all the obligations under
this Indenture, the Securities and the Security Documents have been satisfied
and discharged by the payment in full of the Issuer
’
s
obligations under the Securities, this Indenture and the Security Documents,
and
all such obligations have been so satisfied, or (ii) a discharge, legal
defeasance or covenant defeasance of this Indenture occurs under Article 8
(provided that in the case of this
clause
(ii), no Floating Rate Notes are then outstanding), the Trustee shall deliver
to
the Issuer and the Collateral Agent a notice stating that the Trustee, on behalf
of the Holders, disclaims and gives up any and all rights it has in or to the
Collateral, and any rights it has under the Security Documents, and upon receipt
by the Collateral Agent of such notice, the Collateral Agent shall be deemed
not
to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause
to be done all acts reasonably necessary to release such Lien as soon as is
reasonably practicable.
SECTION
11.09.
Designations
.
Except
as provided in the next sentence, for purposes of the provisions hereof and
the
Intercreditor Agreement requiring the Issuer to designate Indebtedness for
the
purposes of the terms First Priority Lien Obligations and Other Second-Lien
Obligations or any other such designations hereunder or under the Intercreditor
Agreement, any such designation shall be sufficient if the relevant designation
provides in writing that such First Priority Lien Obligations or Other
Second-Lien Obligations are permitted under this Indenture and is signed on
behalf of the Issuer by an Officer and delivered to the Trustee, the Collateral
Agent and the First Lien Agent. For all purposes hereof and the Intercreditor
Agreement, the Issuer hereby designates the Obligations pursuant to the Credit
Agreement as in effect on the Issue Date as First Priority Lien
Obligations.
SECTION
11.10.
Taking
and Destruction
.
Following the Discharge of Senior Lender Claims, upon any Taking or Destruction
of any Collateral, all Net Insurance Proceeds received by the Issuer or any
Restricted Subsidiary shall be deemed Net Proceeds and shall be applied in
accordance with Section 4.06.
ARTICLE
12
GUARANTEES
SECTION
12.01.
Guarantees
.
xx)
Each
Guarantor hereby jointly and severally, irrevocably and unconditionally
guarantees on a second priority senior secured basis, as a primary obligor
and
not merely as a surety, to each Holder and to the Trustee and its successors
and
assigns (i) the full and punctual payment when due, whether at Stated Maturity,
by acceleration, by redemption or otherwise, of all obligations of the Issuer
under this Indenture (including obligations to the Trustee) and the Securities,
whether for payment of principal of, premium, if any, or interest on in respect
of the Securities and all other monetary obligations of the Issuer under this
Indenture and the Securities and (ii) the full and punctual performance within
applicable grace periods of all other obligations of the Issuer whether for
fees, expenses, indemnification or otherwise under this Indenture and the
Securities (all the foregoing being hereinafter collectively called the
“
Guaranteed
Obligations
”
).
Each
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed, in whole or in part, without notice or further assent from each such
Guarantor, and that each such Guarantor shall remain bound under this Article
12
notwithstanding any extension or renewal of any Guaranteed
Obligation.
(b)
Each
Guarantor waives presentation to, demand of payment from and protest to the
Issuer of any of the Guaranteed Obligations and also waives notice of protest
for nonpayment. Each Guarantor waives notice of any default under the Securities
or the Guaranteed Obligations. The obligations of each Guarantor
hereunder
shall
not
be affected by (i) the failure of any Holder or the Trustee to assert any claim
or demand or to enforce any right or remedy against the Issuer or any other
Person under this Indenture, the Securities or any other agreement or otherwise;
(ii) any extension or renewal of this Indenture, the Securities or any other
agreement; (iii) any rescission, waiver, amendment or modification of any of
the
terms or provisions of this Indenture, the Securities or any other agreement;
(iv) the release of any security held by any Holder or the Trustee for the
Guaranteed Obligations or any Guarantor; (v) the failure of any Holder or
Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (vi) any change in the ownership of such Guarantor,
except as provided in Section 12.02(b).
(c)
Each
Guarantor hereby waives any right to which it may be entitled to have its
obligations hereunder divided among the Guarantors, such that such
Guarantor
’
s
obligations would be less than the full amount claimed. Each Guarantor hereby
waives any right to which it may be entitled to have the assets of the Issuer
first be used and depleted as payment of the Issuer
’
s
or such
Guarantor
’
s
obligations hereunder prior to any amounts being claimed from or paid by such
Guarantor hereunder. Each Guarantor hereby waives any right to which it may
be
entitled to require that the Issuer be sued prior to an action being initiated
against such Guarantor.
(d)
Each
Guarantor further agrees that its Guarantee herein constitutes a guarantee
of
payment, performance and compliance when due (and not a guarantee of collection)
and waives any right to require that any resort be had by any Holder or the
Trustee to any security held for payment of the Guaranteed
Obligations.
(e)
The
Guarantee of each Guarantor is, to the extent and in the manner set forth in
Article 12, equal in right of payment to all existing and future Pari Passu
Indebtedness and senior in right of payment to all existing and future
Subordinated Indebtedness of the Issuer and is made subject to such provisions
of this Indenture.
(f)
Except
as
expressly set forth in Sections 8.01(b), 12.02 and 12.06, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing,
the
obligations of each Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities
or
any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk
of
any Guarantor or would otherwise operate as a discharge of any Guarantor as
a
matter of law or equity.
(g)
Each
Guarantor agrees that its Guarantee shall remain in full force and effect until
payment in full of all the Guaranteed Obligations. Each Guarantor
further
agrees
that its Guarantee herein shall continue to be effective or be reinstated,
as
the case may be, if at any time payment, or any part thereof, of principal
of or
interest on any Guaranteed Obligation is rescinded or must otherwise be restored
by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer
or otherwise.
(h)
In
furtherance of the foregoing and not in limitation of any other right which
any
Holder or the Trustee has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Issuer to pay the principal of or interest
on
any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform or comply
with any other Guaranteed Obligation, each Guarantor hereby promises to and
shall, upon receipt of written demand by the Trustee, forthwith pay, or cause
to
be paid, in cash, to the Holders or the Trustee an amount equal to the sum
of
(i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued
and
unpaid interest on such Guaranteed Obligations (but only to the extent not
prohibited by applicable law) and (iii) all other monetary obligations of the
Issuer to the Holders and the Trustee.
(i)
Each
Guarantor agrees that it shall not be entitled to any right of subrogation
in
relation to the Holders in respect of any Guaranteed Obligations guaranteed
hereby until payment in full of all Guaranteed Obligations. Each Guarantor
further agrees that, as between it, on the one hand, and the Holders and the
Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of any Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guaranteed
Obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article 6, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by such Guarantor for the purposes of this Section
12.01.
(j)
Each
Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys
’
fees and
expenses) incurred by the Trustee or any Holder in enforcing any rights under
this Section 12.01.
(k)
Upon
request of the Trustee, each Guarantor shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to
carry out more effectively the purpose of this Indenture.
SECTION
12.02.
Limitation
on Liability
.
xxi)
Any term
or provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Guaranteed Obligations guaranteed hereunder by any
Guarantor shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Indenture, as it relates to such Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer
or
similar laws affecting the rights of creditors generally.
(b)
A
Guarantee as to any Guarantor shall terminate and be of no further force or
effect and such Guarantor shall be deemed to be released from all obligations
under this Article 12 upon:
(i)
the
sale,
disposition or other transfer (including through merger or consolidation) of
the
Capital Stock (including any sale, disposition or other transfer following
which
the applicable Guarantor is no longer a Restricted Subsidiary) of the applicable
Guarantor if such sale, disposition or other transfer is made in compliance
with
this Indenture,
(ii)
the
Issuer designating such Guarantor to be an Unrestricted Subsidiary in accordance
with the provisions set forth under Section 4.04 and the definition of
“
Unrestricted
Subsidiary,
”
(iii)
in
the
case of any Restricted Subsidiary that after the Issue Date is required to
guarantee the Securities pursuant to Section 4.11, the release or discharge
of
the guarantee by such Restricted Subsidiary of Indebtedness of the Issuer or
any
Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the
repayment of the Indebtedness or Disqualified Stock, in each case, which
resulted in the obligation to guarantee the Securities, and
(iv)
the
Issuer
’
s
exercise of its defeasance option under Article 8,
provided,
however
,
that in
the case of this clause (iv), no Floating Rate Notes are then outstanding,
or if
the Issuer
’
s
obligations under this Indenture are discharged in accordance with the terms
of
this Indenture.
In
the
case of clause (b)(i) above, such Guarantor shall be released from its
guarantees, if any, of, and all pledges and security, if any, granted in
connection with, the Credit Agreement and any other Indebtedness of the Issuer
or any Restricted Subsidiary of the Issuer.
A
Guarantee also shall be automatically released upon the applicable Subsidiary
ceasing to be a Subsidiary as a result of any foreclosure of any pledge or
security interest securing First Priority Lien Obligations, subject to, in
each
case, the application of the proceeds of such foreclosure in the manner set
forth in the Security Documents or if such Subsidiary is released from its
guarantees of, and all pledges and security interests granted in connection
with, the Credit Agreement and any other Indebtedness of the Issuer or any
Restricted Subsidiary of the Issuer which results in the obligation to guarantee
the Securities.
SECTION
12.03.
Successors
and Assigns
.
This
Article 12 shall be binding upon each Guarantor and its successors and assigns
and shall inure to the benefit of the successors and assigns of the Trustee
and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges conferred upon that party
in
this Indenture and in the Securities shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and conditions of
this
Indenture.
SECTION
12.04.
No
Waiver
.
Neither
a failure nor a delay on the part of either the Trustee or the Holders in
exercising any right, power or privilege under this Article 12 shall operate
as
a waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Trustee and the Holders herein expressly specified are
cumulative and not exclusive of any other rights,
remedies
or benefits which either may have under this Article 12 at law, in equity,
by
statute or otherwise.
SECTION
12.05.
Modification
.
No
modification, amendment or waiver of any provision of this Article 12, nor
the
consent to any departure by any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance
and
for the purpose for which given. No notice to or demand on any Guarantor in
any
case shall entitle such Guarantor to any other or further notice or demand
in
the same, similar or other circumstances.
SECTION
12.06.
Execution
of Supplemental Indenture for Future Guarantors
.
Each
Subsidiary and other Person which is required to become a Guarantor pursuant
to
Section 4.11 shall promptly execute and deliver to the Trustee a supplemental
indenture in the form of Exhibit D hereto pursuant to which such Subsidiary
or
other Person shall become a Guarantor under this Article 12 and shall guarantee
the Guaranteed Obligations. Concurrently with the execution and delivery of
such
supplemental indenture, the Issuer shall deliver to the Trustee an Opinion
of
Counsel and an Officers
’
Certificate to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such Subsidiary or other Person and that,
subject to the application of bankruptcy, insolvency, moratorium, fraudulent
conveyance or transfer and other similar laws relating to creditors
’
rights
generally and to the principles of equity, whether considered in a proceeding
at
law or in equity, the Guarantee of such Guarantor is a valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms and/or to such other matters as the Trustee may reasonably
request.
SECTION
12.07.
Non-Impairment
.
The
failure to endorse a Guarantee on any Security shall not affect or impair the
validity thereof.
ARTICLE
13
MISCELLANEOUS
SECTION
13.01.
Trust
Indenture Act Controls
.
If and
to the extent that any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by, or with another provision (an
“
incorporated
provision
”
)
included in this Indenture by operation of, Sections 310 to 318 of the TIA,
inclusive, such imposed duties or incorporated provision shall
control.
SECTION
13.02.
Notices
.
xxii)
Any
notice or communication required or permitted hereunder shall be in writing
and
delivered in person, via facsimile or mailed by first-class mail addressed
as
follows:
if
to the
Issuer or a Guarantor:
Berry
Plastics Holding Corporation
101
Oakley Street
Evansville,
Indiana 47710
Attention
of: General Counsel
Facsimile:
(812) 424-0128
if
to the
Trustee:
Wells
Fargo Bank, N.A.
Corporate
Trust Services
213
Court
Street, Suite 703
Middletown,
CT 06457
Facsimile:
860-704-6219
The
Issuer or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
(b)
Any
notice or communication mailed to a Holder shall be mailed, first class mail,
to
the Holder at the Holder
’
s
address
as it appears on the registration books of the Registrar and shall be
sufficiently given if so mailed within the time prescribed.
(c)
Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it, except that notices to the Trustee are
effective only if received.
SECTION
13.03.
Communication
by the Holders with Other Holders
.
The
Holders may communicate pursuant to Section 312(b) of the TIA with other Holders
with respect to their rights under this Indenture or the Securities. The Issuer,
the Trustee, the Registrar and other Persons shall have the protection of
Section 312(c) of the TIA.
SECTION
13.04.
Certificate
and Opinion as to Conditions Precedent
.
Upon
any request or application by the Issuer to the Trustee to take or refrain
from
taking any action under this Indenture, the Issuer shall furnish to the Trustee
at the request of the Trustee:
(a)
an
Officers
’
Certificate in form reasonably satisfactory to the Trustee stating that, in
the
opinion of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with;
and
(b)
an
Opinion of Counsel in form reasonably satisfactory to the Trustee stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
SECTION
13.05.
Statements
Required in Certificate or Opinion
.
Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.09) shall
include:
(a)
a
statement that the individual making such certificate or opinion has read such
covenant or condition;
(b)
a
brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based;
(c)
a
statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion
as
to whether or not such covenant or condition has been complied with;
and
(d)
a
statement as to whether or not, in the opinion of such individual, such covenant
or condition has been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers
’
Certificate or certificates of public officials.
SECTION
13.06.
When
Securities Disregarded
.
In
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the
Issuer, any Guarantor or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer or
any
Guarantor shall be disregarded and deemed not to be outstanding, except that,
for the purpose of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which the Trustee
knows are so owned shall be so disregarded. Subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION
13.07.
Rules
by Trustee, Paying Agent and Registrar
.
The
Trustee may make reasonable rules for action by or a meeting of the Holders.
The
Registrar and a Paying Agent may make reasonable rules for their
functions.
SECTION
13.08.
Legal
Holidays
.
If a
payment date is not a Business Day, payment shall be made on the next succeeding
day that is a Business Day, and no interest shall accrue on any amount that
would have been otherwise payable on such payment date if it were a Business
Day
for the intervening period. If a regular record date is not a Business Day,
the
record date shall not be affected.
SECTION
13.09.
GOVERNING
LAW
.
THIS
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
SECTION
13.10.
No
Recourse Against Others
.
No
director, officer, employee, manager, incorporator or holder of any Equity
Interests in the Issuer or of any Guarantor or any direct or indirect parent
corporation, as such, shall have any liability for any obligations of the Issuer
or the Guarantors under the Securities or this Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Securities by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of
the Securities.
SECTION
13.11.
Successors
.
All
agreements of the Issuer and each Guarantor in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall
bind its successors.
SECTION
13.12.
Multiple
Originals
.
The
parties may sign any number of copies of this Indenture. Each signed copy shall
be an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Indenture.
SECTION
13.13.
Table
of Contents; Headings
.
The
table of contents, cross-reference sheet and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only,
are not intended to be considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.
SECTION
13.14.
Indenture
Controls
.
If and
to the extent that any provision of the Securities limits, qualifies or
conflicts with a provision of this Indenture, such provision of this Indenture
shall control.
SECTION
13.15.
Severability
.
In case
any provision in this Indenture shall be invalid, illegal or unenforceable,
the
validity, legality and enforceability of the remaining provisions shall not
in
any way be affected or impaired thereby and such provision shall be ineffective
only to the extent of such invalidity, illegality or
unenforceability.
IN
WITNESS WHEREOF, the parties have caused this Indenture to be duly executed
as
of the date first written above.
BPC
ACQUISITION CORP.
By:
________________________________
Name:
Title:
WELLS
FARGO BANK, NATIONAL ASSOCIATION, as Trustee and Collateral
Agent
By:
_________________________________
Name:
Title:
APPENDIX
A
PROVISIONS
RELATING TO INITIAL SECURITIES, ADDITIONAL SECURITIES AND EXCHANGE
SECURITIES
1.
Definitions.
1.1
Definitions.
For
the
purposes of this Appendix A the following terms shall have the meanings
indicated below:
“Additional
Interest” has the meaning set forth in the Registration Agreement.
“Definitive
Security” means a certificated Initial Security or Exchange Security (bearing
the Restricted Securities Legend if the transfer of such Security is restricted
by applicable law) that does not include the Global Securities
Legend.
“Depository”
means The Depository Trust Company, its nominees and their respective
successors.
“Global
Securities Legend” means the legend set forth under that caption in the
applicable Exhibit to this Indenture.
“IAI”
means an institutional “accredited investor” as described in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act.
“Initial
Purchasers” means Deutsche Bank Securities Inc., Credit Suisse Securities (USA)
LLC, Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Banc of America
Securities LLC, Lehman Brothers Inc., Bear, Stearns & Co. Inc. and GE
Capital Markets, Inc. and such other initial purchasers party to the Purchase
Agreement entered into in connection with the offer and sale of the
Securities.
“Purchase
Agreement” means (a) the Purchase Agreement dated September 15, 2006, among the
Merger Sub and the Initial Purchasers and, upon execution of the joinder thereto
on the date hereof, the Company and the Guarantors and (b) any other similar
Purchase Agreement relating to Additional Securities.
“QIB”
means a “qualified institutional buyer” as defined in Rule 144A.
“Registered
Exchange Offer” means the offer by the Company, pursuant to the Registration
Agreement, to certain Holders of Initial Securities, to issue and deliver to
such Holders, in exchange for their Initial Securities, a like aggregate
principal amount of Exchange Securities registered under the Securities
Act.
“Registration
Agreement” means (a) the Registration Rights Agreement dated as of September 20,
2006 among the Issuer, the Guarantors and the Initial Purchasers relating to
the
Securities
and (b) any other similar registration rights agreement relating to Additional
Securities.
“Regulation
S” means Regulation S under the Securities Act.
“Regulation
S Securities” means all Initial Securities offered and sold outside the United
States in reliance on Regulation S.
“Restricted
Period,” with respect to any Securities, means the period of 40 consecutive days
beginning on and including the later of (a) the day on which such Securities
are
first offered to persons other than distributors (as defined in Regulation
S
under the Securities Act) in reliance on Regulation S, notice of which day
shall
be promptly given by the Company to the Trustee, and (b) the Issue Date, and
with respect to any Additional Securities that are Transfer Restricted
Securities, it means the comparable period of 40 consecutive days.
“Restricted
Securities Legend” means the legend set forth in Section 2.2(f)(i)
herein.
“Rule
501” means Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
“Rule
144A” means Rule 144A under the Securities Act.
“Rule
144A Securities” means all Initial Securities offered and sold to QIBs in
reliance on Rule 144A.
“Securities
Custodian” means the custodian with respect to a Global Security (as appointed
by the Depository) or any successor person thereto, who shall initially be
the
Trustee.
“Shelf
Registration Statement” means a registration statement filed by the Company in
connection with the offer and sale of Initial Securities pursuant to the
Registration Agreement.
“Transfer
Restricted Securities” means Definitive Securities and any other Securities that
bear or are required to bear or are subject to the Restricted Securities
Legend.
“Unrestricted
Definitive Security” means Definitive Securities and any other Securities that
are not required to bear, or are not subject to, the Restricted Securities
Legend.
1.2
Other
Definitions
.
Term
:
|
Defined
in Section
:
|
|
|
Agent
Members
|
2.1(b)
|
Global
Securities
|
2.1(b)
|
Regulation
S Global Securities
|
2.1(b)
|
Regulation
S Permanent Global Security
|
2.1(b)
|
Regulation
S Temporary Global Security
|
2.1(b)
|
Rule
144A Global Securities
|
2.1(b)
|
2.
The
Securities.
2.1
Form
and Dating; Global Securities
.
(a)
The
Initial Securities issued on the date hereof will be (i) offered and sold by
the
Issuer pursuant to the Purchase Agreement and (ii) resold, initially only to
(1)
QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as
defined in Regulation S) in reliance on Regulation S. Such Initial Securities
may thereafter be transferred to, among others, QIBs, purchasers in reliance
on
Regulation S and, except as set forth below, IAIs in accordance with Rule 501.
Additional Securities offered after the date hereof may be offered and sold
by
the Issuer from time to time pursuant to one or more purchase agreements in
accordance with applicable law.
(b)
Global
Securities
.
(1)
Rule
144A Securities initially shall be represented by one or more Securities in
definitive, fully registered, global form without interest coupons
(collectively, the “Rule 144A Global Securities”).
Regulation
S Securities initially shall be represented by one or more Securities in fully
registered, global form without interest coupons (collectively, the “Regulation
S Temporary Global Security” and, together with the Regulation S Permanent
Global Security (defined below), the “Regulation S Global Securities”), which
shall be registered in the name of the Depository or the nominee of the
Depository for the accounts of designated agents holding on behalf of Euroclear
or Clearstream.
The
Restricted Period shall be terminated upon the receipt by the Trustee of: (1)
a
written certificate from the Depository, together with copies of certificates
from Euroclear and Clearstream certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Security (except to the extent
of
any beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who shall take delivery of a beneficial ownership interest
in
a 144A Global Security bearing a Private Placement Legend, all as contemplated
by this Appendix A); and (2) an Officers’ Certificate from the
Company.
Following
the termination of the Restricted Period, beneficial interests in the Regulation
S Temporary Global Security shall be exchanged for beneficial interests in
a
permanent Global Security (the “Regulation S Permanent Global Security”)
pursuant to the applicable procedures of the Depository. Simultaneously with
the
authentication of the Regulation S Permanent Global Security, the Trustee shall
cancel the Regulation S Temporary Global Security. The aggregate principal
amount of the Regulation S Temporary Global Security and the Regulation S
Permanent Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
The
provisions of the “Operating Procedures of the Euroclear System” and “Terms and
Conditions Governing Use of Euroclear” and the “General Terms and Conditions
of
Clearstream
Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers
of beneficial interests in the Regulation S Temporary Global Security and the
Regulation S Permanent Global Security that are held by Participants through
Euroclear or Clearstream.
The
term
“Global Securities” means the Rule 144A Global Securities and the Regulation S
Global Securities. The Global Securities shall bear the Global Security Legend.
The Global Securities initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, in each case for credit to an
account of an Agent Member, (ii) be delivered to the Trustee as custodian for
such Depository and (iii) bear the Restricted Securities Legend.
Members
of, or direct or indirect participants in, the Depository shall have no rights
under this Indenture with respect to any Global Security held on their behalf
by
the Depository, or the Trustee as its custodian, or under the Global Securities.
The Depository may be treated by the Issuer, the Trustee and any agent of the
Issuer or the Trustee as the absolute owner of the Global Securities for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Issuer, the Trustee or any agent of the Issuer 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 its Agent Members,
the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(ii)
Transfers
of Global Securities shall be limited to transfer in whole, but not in part,
to
the Depository, its successors or their respective nominees. Interests of
beneficial owners in the Global Securities may be transferred or exchanged
for
Definitive Securities only in accordance with the applicable rules and
procedures of the Depository and the provisions of Section 2.2. In addition,
a
Global Security shall be exchangeable for Definitive Securities if (x) the
Depository (1) notifies the Company that it is unwilling or unable to continue
as depository for such Global Security and the Company thereupon fails to
appoint a successor depository or (2) has ceased to be a clearing agency
registered under the Exchange Act or (y) there shall have occurred and be
continuing an Event of Default with respect to such Global Security; provided
that in no event shall the Regulation S Temporary Global Security be exchanged
by the Issuer for Definitive Securities prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act. In all
cases, Definitive Securities delivered in exchange for any Global Security
or
beneficial interests therein shall be registered in the names, and issued in
any
approved denominations, requested by or on behalf of the Depository in
accordance with its customary procedures.
(iii)
In
connection with the transfer of a Global Security as an entirety to beneficial
owners pursuant to subsection (i) of this Section 2.1(b), such Global Security
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and make available
for
delivery, to each beneficial owner identified by the Depository in writing
in
exchange for its beneficial interest in such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized
denominations.
(iv)
Any
Transfer Restricted Security delivered in exchange for an interest in a Global
Security pursuant to Section 2.2 shall, except as otherwise provided in Section
2.2, bear the Restricted Securities Legend.
(v)
Notwithstanding
the foregoing, through the Restricted Period, a beneficial interest in such
Regulation S Global Security may be held only through Euroclear or Clearstream
unless delivery is made in accordance with the applicable provisions of Section
2.2.
(vi)
The
Holder of any Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under
this
Indenture or the Securities.
2.2
Transfer
and Exchange.
(a)
Transfer
and Exchange of Global Securities
.
A
Global Security may not be transferred as a whole except as set forth in Section
2.1(b). Global Securities will not be exchanged by the Issuer for Definitive
Securities except under the circumstances described in Section 2.1(b)(ii).
Global Securities also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.08 and 2.10 of this Indenture. Beneficial interests
in a
Global Security may be transferred and exchanged as provided in Section 2.2(b)
or 2.2(g).
(b)
Transfer
and Exchange of Beneficial Interests in Global Securities
.
The
transfer and exchange of beneficial interests in the Global Securities shall
be
effected through the Depository, in accordance with the provisions of this
Indenture and the applicable rules and procedures of the Depository. Beneficial
interests in Restricted Global Securities shall be subject to restrictions
on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Beneficial interests in Global Securities shall be transferred
or exchanged only for beneficial interests in Global Securities. Transfers
and
exchanges of beneficial interests in the Global Securities also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well
as
one or more of the other following subparagraphs, as applicable:
(i)
Transfer
of Beneficial Interests in the Same Global Security
.
Beneficial interests in any Restricted Global Security may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Restricted Global Security in accordance with the transfer restrictions
set
forth in the Restricted Securities Legend;
provided,
however
,
that
prior to the expiration of the Restricted Period, transfers of beneficial
interests in a Regulation S Global Security may not be made to a U.S. Person
or
for the account or benefit of a U.S. Person (other than an Initial Purchaser).
A
beneficial interest in an Unrestricted Global Security may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Security. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described
in
this Section 2.2(b)(i).
(ii)
All
Other Transfers and Exchanges of Beneficial Interests in Global
Securities
.
In
connection with all transfers and exchanges of beneficial interests in any
Global Security that is not subject to Section 2.2(b)(i), the transferor of
such
beneficial
interest
must deliver to the Registrar (1) a written order from an Agent Member given
to
the Depository in accordance with the applicable rules and procedures of the
Depository directing the Depository to credit or cause to be credited a
beneficial interest in another Global Security in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given
in
accordance with the applicable rules and procedures of the Depository containing
information regarding the Agent Member account to be credited with such
increase. Upon satisfaction of all of the requirements for transfer or exchange
of beneficial interests in Global Securities contained in this Indenture and
the
Securities or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Security pursuant to Section
2.2(g).
(iii)
Transfer
of Beneficial Interests to Another Restricted Global Security
.
A
beneficial interest in a Transfer Restricted Global Security may be transferred
to a Person who takes delivery thereof in the form of a beneficial interest
in
another Transfer Restricted Global Security if the transfer complies with the
requirements of Section 2.2(b)(ii) above and the Registrar receives the
following:
(A)
if
the
transferee will take delivery in the form of a beneficial interest in a Rule
144A Global Security, then the transferor must deliver a certificate in the
form
attached to the applicable Security; and
(B)
if
the
transferee will take delivery in the form of a beneficial interest in a
Regulation S Global Security, then the transferor must deliver a certificate
in
the form attached to the applicable Security.
(iv)
Transfer
and Exchange of Beneficial Interests in a Transfer Restricted Global Security
for Beneficial Interests in an Unrestricted Global Security
.
A
beneficial interest in a Transfer Restricted Global Security may be exchanged
by
any holder thereof for a beneficial interest in an Unrestricted Global Security
or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security if the exchange or
transfer complies with the requirements of Section 2.2(b)(ii) above and the
Registrar receives the following:
(A)
if
the
holder of such beneficial interest in a Restricted Global Security proposes
to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Security, a certificate from such holder in the form attached to the
applicable Security; or
(B)
if
the
holder of such beneficial interest in a Restricted Global Security proposes
to
transfer such beneficial interest to a Person who shall take delivery thereof
in
the form of a beneficial interest in an Unrestricted Global Security, a
certificate from such holder in the form attached to the applicable
Security,
and,
in
each such case, if the Company or the Registrar so requests or if the applicable
rules and procedures of the Depository so require, an Opinion of Counsel in
form
reasonably
acceptable to the Registrar to the effect that such exchange or transfer is
in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Restricted Securities Legend are no longer required
in order to maintain compliance with the Securities Act. If any such transfer
or
exchange is effected pursuant to this subparagraph (iv) at a time when an
Unrestricted Global Security has not yet been issued, the Issuer shall issue
and, upon receipt of an written order of the Company in the form of an Officers’
Certificate in accordance with Section 2.01, the Trustee shall authenticate
one
or more Unrestricted Global Securities in an aggregate principal amount equal
to
the aggregate principal amount of beneficial interests transferred or exchanged
pursuant to this subparagraph (iv).
(v)
Transfer
and Exchange of Beneficial Interests in an Unrestricted Global Security for
Beneficial Interests in a Restricted Global Security
.
Beneficial interests in an Unrestricted Global Security cannot be exchanged
for,
or transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Security.
(c)
Transfer
and Exchange of Beneficial Interests in Global Securities for Definitive
Securities
.
A
beneficial interest in a Global Security may not be exchanged for a Definitive
Security except under the circumstances described in Section 2.1(b)(ii). A
beneficial interest in a Global Security may not be transferred to a Person
who
takes delivery thereof in the form of a Definitive Security except under the
circumstances described in Section 2.1(b)(ii). In any case, beneficial interests
in Global Securities shall be transferred or exchanged only for Definitive
Securities.
(d)
Transfer
and Exchange of Definitive Securities for Beneficial Interests in Global
Securities
.
Transfers and exchanges of beneficial interests in the Global Securities also
shall require compliance with either subparagraph (i), (ii) or (ii) below,
as
applicable:
(i)
Transfer
Restricted Securities to Beneficial Interests in Restricted Global
Securities
.
If any
Holder of a Transfer Restricted Security proposes to exchange such Transfer
Restricted Security for a beneficial interest in a Restricted Global Security
or
to transfer such Transfer Restricted Security to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Security,
then, upon receipt by the Registrar of the following documentation:
(A)
if
the
Holder of such Transfer Restricted Security proposes to exchange such Transfer
Restricted Security for a beneficial interest in a Restricted Global Security,
a
certificate from such Holder in the form attached to the applicable
Security;
(B)
if
such
Transfer Restricted Security is being transferred to a Qualified Institutional
Buyer in accordance with Rule 144A under the Securities Act, a certificate
from
such Holder in the form attached to the applicable Security;
(C)
if
such
Transfer Restricted Security is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule
904
under
the Securities Act, a certificate from such Holder in the form attached to
the
applicable Security;
(D)
if
such
Transfer Restricted Security is being transferred pursuant to an exemption
from
the registration requirements of the Securities Act in accordance with Rule
144
under the Securities Act, a certificate from such Holder in the form attached
to
the applicable Security;
(E)
if
such
Transfer Restricted Security is being transferred to an Institutional Accredited
Investor in reliance on an exemption from the registration requirements of
the
Securities Act other than those listed in subparagraphs (B) through (D) above,
a
certificate from such Holder in the form attached to the applicable Security,
including the certifications, certificates and Opinion of Counsel, if
applicable; or
(F)
if
such
Transfer Restricted Security is being transferred to the Company or a Subsidiary
thereof, a certificate from such Holder in the form attached to the applicable
Security;
the
Trustee shall cancel the Transfer Restricted Security, and increase or cause
to
be increased the aggregate principal amount of the appropriate Restricted Global
Security.
(ii)
Transfer
Restricted Securities to Beneficial Interests in Unrestricted Global
Securities
.
A
Holder of a Transfer Restricted Security may exchange such Transfer Restricted
Definitive Security for a beneficial interest in an Unrestricted Global Security
or transfer such Transfer Restricted Security to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Security
only if the Registrar receives the following:
(A)
if
the
Holder of such Transfer Restricted Security proposes to exchange such Transfer
Restricted Security for a beneficial interest in an Unrestricted Global
Security, a certificate from such Holder in the form attached to the applicable
Security; or
(B)
if
the
Holder of such Transfer Restricted Securities proposes to transfer such Transfer
Restricted Security to a Person who shall take delivery thereof in the form
of a
beneficial interest in an Unrestricted Global Security, a certificate from
such
Holder in the form attached to the applicable Security,
and,
in
each such case, if the Company or the Registrar so requests or if the applicable
rules and procedures of the Depository so require, an Opinion of Counsel in
form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions
on
transfer contained herein and in the Restricted Securities Legend are no longer
required in order to maintain compliance with the Securities Act. Upon
satisfaction of the conditions of this subparagraph (ii), the Trustee shall
cancel the Transfer Restricted Securities and increase or cause to be increased
the aggregate principal amount of the Unrestricted Global Security. If any
such
transfer or exchange is effected pursuant to this subparagraph (ii)
at
a
time
when an Unrestricted Global Security has not yet been issued, the Company shall
issue and, upon receipt of a written order of the Company in the form of an
Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted
Global Securities in an aggregate principal amount equal to the aggregate
principal amount of Transfer Restricted Securities transferred or exchanged
pursuant to this subparagraph (ii).
(iii)
Unrestricted
Definitive Securities to Beneficial Interests in Unrestricted Global
Securities
.
A
Holder of an Unrestricted Definitive Security may exchange such Unrestricted
Definitive Security for a beneficial interest in an Unrestricted Global Security
or transfer such Unrestricted Definitive Security to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Security
at any time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Security and
increase or cause to be increased the aggregate principal amount of one of
the
Unrestricted Global Securities. If any such transfer or exchange is effected
pursuant to this subparagraph (iii) at a time when an Unrestricted Global
Security has not yet been issued, the Issuer shall issue and, upon receipt
of an
written order of the Company in the form of an Officers’ Certificate, the
Trustee shall authenticate one or more Unrestricted Global Securities in an
aggregate principal amount equal to the aggregate principal amount of
Unrestricted Definitive Securities transferred or exchanged pursuant to this
subparagraph (iii).
(iv)
Unrestricted
Definitive Securities to Beneficial Interests in Restricted Global
Securities
.
An
Unrestricted Definitive Security cannot be exchanged for, or transferred to
a
Person who takes delivery thereof in the form of, a beneficial interest in
a
Restricted Global Security.
(e)
Transfer
and Exchange of Definitive Securities for Definitive Securities
.
Upon
request by a Holder of Definitive Securities and such Holder’s compliance with
the provisions of this Section 2.2(e), the Registrar shall register the transfer
or exchange of Definitive Securities. Prior to such registration of transfer
or
exchange, the requesting Holder shall present or surrender to the Registrar
the
Definitive Securities duly endorsed or accompanied by a written instruction
of
transfer in form satisfactory to the Registrar duly executed by such Holder
or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.2(e).
(i)
Transfer
Restricted Securities to Transfer Restricted Securities
.
A
Transfer Restricted Security may be transferred to and registered in the name
of
a Person who takes delivery thereof in the form of a Transfer Restricted
Security if the Registrar receives the following:
(A)
if
the
transfer will be made pursuant to Rule 144A under the Securities Act, then
the
transferor must deliver a certificate in the form attached to the applicable
Security;
(B)
if
the
transfer will be made pursuant to Rule 903 or Rule 904 under the Securities
Act,
then the transferor must deliver a certificate in the form attached to the
applicable Security;
(C)
if
the
transfer will be made pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate in the form attached to the applicable
Security;
(D)
if
t
he
transfer will be made to an IAI in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (A) through (D) above, a certificate in the form attached to
the
applicable Security; and
(E)
if
such
transfer will be made to the Company or a Subsidiary thereof, a certificate
in
the form attached to the applicable Security.
(ii)
Transfer
Restricted Securities to Unrestricted Definitive Securities
.
Any
Transfer Restricted Security may be exchanged by the Holder thereof for an
Unrestricted Definitive Security or transferred to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Security if the Registrar
receives the following:
(1)
if
the
Holder of such Transfer Restricted Security proposes to exchange such Transfer
Restricted Security for an Unrestricted Definitive Security, a certificate
from
such Holder in the form attached to the applicable Security; or
(2)
if
the
Holder of such Transfer Restricted Security proposes to transfer such Securities
to a Person who shall take delivery thereof in the form of an Unrestricted
Definitive Security, a certificate from such Holder in the form attached to
the
applicable Security,
and,
in
each such case, if the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions
on
transfer contained herein and in the Restricted Securities Legend are no longer
required in order to maintain compliance with the Securities Act.
(iii)
Unrestricted
Definitive Securities to Unrestricted Definitive Securities
.
A
Holder of an Unrestricted Definitive Security may transfer such Unrestricted
Definitive Securities to a Person who takes delivery thereof in the form of
an
Unrestricted Definitive Security at any time. Upon receipt of a request to
register such a transfer, the Registrar shall register the Unrestricted
Definitive Securities pursuant to the instructions from the Holder
thereof.
(iv)
Unrestricted
Definitive Securities to Transfer Restricted Securities
.
An
Unrestricted Definitive Security cannot be exchanged for, or transferred to
a
Person who takes delivery thereof in the form of, a Transfer Restricted
Security.
At
such
time as all beneficial interests in a particular Global Security have been
exchanged for Definitive Securities or a particular Global Security has been
redeemed, repurchased or canceled in whole and not in part, each such Global
Security shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for or transferred to
a
Person who will take delivery thereof in the form of a beneficial interest
in
another Global Security or for Definitive Securities, the principal amount
of
Securities represented by such Global Security shall be reduced accordingly
and
an endorsement shall be made on such Global Security by the Trustee or by the
Depository at the direction of the Trustee to reflect such reduction; and if
the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Security, such other Global Security shall be increased accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depository at the direction of the Trustee to reflect such
increase.
(f)
Legend
.
(i)
Except
as
permitted by the following paragraph (ii), (iii) or (iv), each Security
certificate evidencing the Global Securities and the Definitive Securities
(and
all Securities issued in exchange therefor or in substitution thereof) shall
bear a legend in substantially the following form (each defined term in the
legend being defined as such for purposes of the legend only):
“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION
S
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (IV)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS
OF ANY STATE OF THE UNITED
STATES,
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY
PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.”
Each
Definitive Security shall bear the following additional legends:
“IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.”
“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY
EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE
“SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN
TO
THEM IN REGULATION S UNDER THE SECURITIES ACT.”
(ii)
Upon
any
sale or transfer of a Transfer Restricted Security that is a Definitive
Security, the Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Security that does not bear the
legends set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security if the Holder certifies in writing to the Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Initial
Security).
(iii)
After
a
transfer of any Initial Securities during the period of the effectiveness of
a
Shelf Registration Statement with respect to such Initial Securities, all
requirements pertaining to the Restricted Securities Legend on such Initial
Securities shall cease to apply and the requirements that any such Initial
Securities be issued in global form shall continue to apply.
(iv)
Upon
the
consummation of a Registered Exchange Offer with respect to the Initial
Securities pursuant to which Holders of such Initial Securities are offered
Exchange Securities in exchange for their Initial Securities, all requirements
pertaining to Initial Securities that Initial Securities be issued in global
form shall continue to apply, and Exchange Securities in global form without
the
Restricted Securities Legend shall be available to Holders that exchange such
Initial Securities in such Registered Exchange Offer.
(v)
Upon
a
sale or transfer after the expiration of the Restricted Period of any Initial
Security acquired pursuant to Regulation S, all requirements that such Initial
Security bear the Restricted Securities Legend shall cease to apply and the
requirements requiring any such Initial Security be issued in global form shall
continue to apply.
(vi)
Any
Additional Securities sold in a registered offering shall not be required to
bear the Restricted Securities Legend.
(g)
Cancellation
or Adjustment of Global Security
.
At such
time as all beneficial interests in a particular Global Security have been
exchanged for Definitive Securities or a particular Global Security has been
redeemed, repurchased or canceled in whole and not in part, each such Global
Security shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11 of this Indenture. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged
for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Security or for Definitive Securities,
the
principal amount of Securities represented by such Global Security shall be
reduced accordingly and an endorsement shall be made on such Global Security
by
the Trustee or by the Depository at the direction of the Trustee to reflect
such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Security, such other Global Security shall be increased
accordingly and an endorsement shall be made on such Global Security by the
Trustee or by the Depository at the direction of the Trustee to reflect such
increase.
(h)
Obligations
with Respect to Transfers and Exchanges of Securities
.
(i)
To
permit
registrations of transfers and exchanges, the Issuer shall execute and the
Trustee shall authenticate, Definitive Securities and Global Securities at
the
Registrar’s request.
(ii)
No
service charge shall be made for any registration of transfer or exchange,
but
the Issuer may require payment of a sum sufficient to cover any transfer tax,
assessments, or similar governmental charge payable in connection therewith
(other than any such transfer taxes, assessments or similar governmental charge
payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this
Indenture).
(iii)
Prior
to
the due presentation for registration of transfer of any Security, the Issuer,
the Trustee, a Paying Agent or the Registrar may deem and treat the person
in
whose name a Security is registered as the absolute owner of such Security
for
the purpose of receiving payment of principal of and interest on such Security
and for all other purposes whatsoever, whether or not such Security is overdue,
and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall
be
affected by notice to the contrary.
(iv)
All
Securities issued upon any transfer or exchange pursuant to the terms of this
Indenture shall evidence the same debt and shall be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
(i)
No
Obligation of the Trustee
.
(i)
The
Trustee shall have no responsibility or obligation to any beneficial owner
of a
Global Security, a member of, or a participant in the Depository or any other
Person with respect to the accuracy of the records of the Depository or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the
Depository)
of
any
notice (including any notice of redemption or repurchase) or the payment of
any
amount, under or with respect to such Securities. All notices and communications
to be given to the Holders and all payments to be made to the Holders under
the
Securities shall be given or made only to the registered Holders (which shall
be
the Depository or its nominee in the case of a Global Security). The rights
of
beneficial owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the Depository.
The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members, participants and any
beneficial owners.
(ii)
The
Trustee shall have no obligation or duty to monitor, determine or inquire as
to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Depository participants,
members or beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
EXHIBIT
A-1
[FORM
OF
FACE OF INITIAL SECURITY]
[Global
Securities Legend]
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS 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 SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART,
TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED
TO
ON THE REVERSE HEREOF.
[Restricted
Securities Legend]
“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION
S
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER
THE SECURITIES ACT PROVIDED BY
RULE
144
THEREUNDER (IF APPLICABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE.”
Each
Temporary Regulation S Security shall bear the following additional
legend:
“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY
EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE
“SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN
TO
THEM IN REGULATION S UNDER THE SECURITIES ACT.”
Each
Definitive Security shall bear the following additional legends:
“IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.”
[FORM
OF
INITIAL SECURITY]
No.
$__________
8⅞%
Second Priority Senior Secured Fixed Rate Notes due 2014
CUSIP
No.
ISIN
No.
BPC
Acquisition corp., a Delaware corporation, promises to pay to Cede & Co., or
registered assigns, the principal sum [of Dollars] [listed on the Schedule
of
Increases or Decreases in Global Security attached hereto]
1
USE
THE SCHEDULE OF INCREASES AND DECREASES LANGUAGE IF SECURITY IS IN GLOBAL FORM.
on
September 15, 2014.
Interest
Payment Dates: March 15 and September 15
Record
Dates: March 1 and September 1
Additional
provisions of this Security are set forth on the other side of this
Security.
IN
WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
BPC
ACQUISITION CORP.
By:__________________________________
Name:
Title:
Dated:
TRUSTEE’S
CERTIFICATE OF
AUTHENTICATION
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as
Trustee, certifies
that this is
one
of the Securities
referred
to in the
Indenture.
By:_________________________________
A
uthorized
Signatory
*
/
If
the
Security is to be issued in global form, add the Global Securities Legend and
the attachment from Exhibit A-1 captioned “TO BE ATTACHED TO GLOBAL SECURITIES -
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.
[FORM
OF
REVERSE SIDE OF INITIAL SECURITY]
8⅞%
Second Priority Senior Secured Fixed Rate Notes due 2014
(a)
BPC
ACQUISITION CORP., a Delaware corporation (such corporation, and following
the
merger of such corporation with and into BPC Holding Corporation, a Delaware
corporation, BPC Holding Corporation, and its successors and assigns under
the
Indenture hereinafter referred to, being herein called the “Company”), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company shall pay interest semiannually on March 15 and
September 15 of each year, commencing March 15, 2007. Interest on the Securities
shall accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from
September 20, 2006 until the principal hereof is due. Interest shall be computed
on the basis of a 360-day year of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
(b)
Registration
Rights Agreement
.
The
Holder of this Security is entitled to the benefits of a Registration Rights
Agreement, dated as of September 20, 2006, among BPC Acquisition Corp., BPC
Holding Corporation, the Guarantors and the Initial Purchasers.
The
Company shall pay interest on the Securities (except defaulted interest) to
the
Persons who are registered Holders at the close of business on the March 1
or
September 1 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date
(whether or not a Business Day). Holders must surrender Securities to the Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments
in
respect of the Securities represented by a Global Security (including principal,
premium, if any, and interest) shall be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company or
any
successor depositary. The Company shall make all payments in respect of a
certificated Security (including principal, premium, if any, and interest)
at
the office of the Paying Agent, except that, at the option of the Company,
payment of interest may be made by mailing a check to the registered address
of
each Holder thereof; provided, however, that payments on the Securities may
also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained
by
the payee with a bank in the United States if such Holder elects payment by
wire
transfer by giving written notice to the Trustee or Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept
in
its discretion).
3.
Paying
Agent and Registrar
Initially,
Wells Fargo Bank, National Association, a national banking association (the
“Trustee”), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any of
its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent
or
Registrar.
The
Company issued the Securities under an Indenture dated as of September 20,
2006
(the “Indenture”), among the Company and the Trustee. The terms of the
Securities 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. §§
77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and the Holders (as defined in the Indenture) are referred
to
the Indenture and the TIA for a statement of such terms and
provisions
The
Securities are second priority senior secured obligations of the Company. This
Security is one of the Initial Securities referred to in the Indenture. The
Securities include the Original Fixed Rate Notes, any Additional Fixed Rate
Notes and any Exchange Fixed Rate Notes issued in exchange for the Original
Fixed Rate Notes or any Additional Fixed Rate Notes pursuant to the Indenture.
The Original Fixed Rate Notes, any Additional Fixed Rate Notes and any Exchange
Fixed Rate Notes are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon
the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of the Company and such Restricted
Subsidiaries, enter into or permit certain transactions with Affiliates, create
or incur Liens and make Asset Sales. The Indenture also imposes limitations
on
the ability of the Company and each Guarantor to consolidate or merge with
or
into any other Person or convey, transfer or lease all or substantially all
of
its property.
To
guarantee the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture
and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Securities
and the Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a second priority senior secured basis
pursuant to the terms of the Indenture.
Except
as
set forth in the following two paragraphs, the Securities shall not be
redeemable at the option of the Company prior to September 15, 2010. Thereafter,
the Securities shall be redeemable at the option of the Company, in whole at
any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption
prices
(expressed as a percentage of principal amount), plus accrued and unpaid
interest and additional interest, if any, to the redemption date (subject to
the
right of the Holders of record on the relevant record date to receive interest
due on the relevant interest payment date), if redeemed during the 12-month
period commencing on September 15 of the years set forth below:
Year
|
Redemption
Price
|
|
|
2010
|
104.438%
|
2011
|
102.219%
|
2012
and thereafter
|
100.000%
|
In
addition, prior to September 15, 2010, the Company may redeem the Securities
at
their option, in whole at any time or in part from time to time, upon not less
than 30 nor more than 60 days’ prior notice mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the
principal amount of the Securities redeemed plus the Applicable Premium as
of,
and accrued and unpaid interest and additional interest, if any, to, the
applicable redemption date (subject to the right of the Holders of record on
the
relevant record date to receive interest due on the relevant interest payment
date).
Notwithstanding
the foregoing, at any time and from time to time on or prior to September 15,
2009, the Company may redeem in the aggregate up to 35% of the original
aggregate principal amount of the Securities (calculated after giving effect
to
any issuance of Additional Securities), with the net cash proceeds of one or
more Equity Offerings (1) by the Company or (2) by any direct or indirect parent
of the Company, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from it, at a
redemption price equal to 108.875% of the principal amount thereof plus accrued
and unpaid interest and additional interest, if any, to the redemption date
(subject to the right of the Holders of record on the relevant record date
to
receive interest due on the relevant interest payment date); provided, however,
that at least 65% of the original aggregate principal amount of the Securities
(calculated after giving effect to any issuance of Additional Securities) must
remain outstanding after each such redemption; and
provided,
further
,
that
such redemption shall occur within 90 days after the date on which any such
Equity Offering is consummated upon not less than 30 nor more than 60 days’
notice mailed to each Holder of Securities being redeemed and otherwise in
accordance with the procedures set forth in the Indenture. Notice of any
redemption upon any Equity Offering may be given prior to the completion
thereof, and any such redemption or notice may, at the Company’s discretion, be
subject to one or more conditions precedent, including, but not limited to,
completion of the related Equity Offering.
The
Securities are not subject to any sinking fund.
7.
Notice
of
Redemption
Notice
of
redemption will be mailed by first-class mail at least 30 days but not more
than
60 days before the redemption date to each Holder of Securities to be redeemed
at his, her or its registered address. Securities in denominations larger than
$2,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest on
all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with a Paying Agent on or before the redemption date and certain
other
conditions are satisfied, on and after such date, interest ceases to accrue
on
such Securities (or such portions thereof) called for redemption.
8.
|
Repurchase
of Securities at the Option of
the
|
Holders
upon Change of Control and Asset Sales
Upon
the occurrence of a Change
of Control, each Holder shall have the right, subject to certain conditions
specified in the Indenture, to cause the Company to repurchase all or any part
of such Holder’s Securities at a purchase price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
date
of repurchase (subject to the right of the Holders of record on the relevant
record date to receive interest due on the relevant interest payment date),
as
provided in, and subject to the terms of, the Indenture.
In
accordance with Section 4.06 of the Indenture, the Company will be required
to
offer to purchase Securities upon the occurrence of certain events.
9.
|
Ranking
and Collateral
|
These
Securities and the Guarantees are secured by a second-priority security interest
in the Collateral pursuant to certain Security Documents. The Second Priority
Liens upon any and all Collateral are, to the extent and in the manner provided
in the Intercreditor Agreement, subordinate in ranking to all present and future
First Priority Liens and will be of equal ranking with all present and future
Liens securing Other Second-Lien Obligations as set forth in the Intercreditor
Agreement.
10.
|
Denominations;
Transfer; Exchange
|
The
Securities are in registered form, without coupons, in denominations of $2,000
and any integral multiple of $1,000. A Holder shall register the transfer of
or
exchange of Securities in accordance with the Indenture. Upon any registration
of transfer or exchange, the Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or to transfer or exchange any
Securities for a period of 15 days prior to a selection of Securities to be
redeemed.
11.
Persons
Deemed Owners
The
registered Holder of this Security shall be treated as the owner of it for
all
purposes.
If
money
for the payment of principal or interest remains unclaimed for two years, the
Trustee and a Paying Agent shall pay the money back to the Company at their
written request unless an abandoned property law designates another Person.
After any such payment, the Holders entitled to the money must look to the
Company for payment as general creditors and the Trustee and a Paying Agent
shall have no further liability with respect to such monies.
13.
|
Discharge
and Defeasance
|
Subject
to certain conditions, the Company at any time may terminate some of or all
its
obligations under the Securities and the Indenture if the Company deposits
with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Securities to redemption or maturity, as the case may
be.
Subject
to certain exceptions set forth in the Indenture, (i) the Indenture, the
Security Documents, the Intercreditor Agreement or the Securities may be amended
with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities (voting as a single class) and
(ii) any past default or compliance with any provisions may be waived with
the
written consent of the Holders of at least a majority in principal amount of
the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company and the Trustee may
amend the Indenture, Security Documents, the Intercreditor Agreement or the
Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii)
to
provide for the assumption by a Successor Company of the obligations of the
Company under the Indenture and the Securities; (iii) to provide for the
assumption by a Successor Guarantor of the obligations of a Guarantor under
the
Indenture and its Guarantee; (iv) to provide for uncertificated Securities
in
addition to or in place of certificated Securities (
provided
that the
uncertificated Securities are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated Securities
are
described in Section 163(f)(2)(B) of the Code); (v) to add a Guarantee with
respect to the Securities; (vi) to secure the Securities; (vii) to add
additional assets as Collateral; (viii) to release Collateral from the Lien
pursuant to the Indenture, the Security Documents and the Intercreditor
Agreement when permitted or required by the Indenture or the Security Documents,
(ix) to modify the Security Documents and/or the Intercreditor Agreement to
secure First Priority Lien Obligations and Other Second-Lien Obligations so
long
as such First Priority Lien Obligations and Other Second-Lien Obligations are
not prohibited by the provisions of the Credit Agreement or this Indenture,
(x)
to add additional covenants of the Company for the benefit of the Holders or
to
surrender rights and powers conferred on the Company; (xi) to comply with the
requirements of the SEC in order to effect or maintain the qualification of
the
Indenture under
the
TIA;
(xii) to make any change that does not adversely affect the rights of any
Holder; or (xiii) to provide for the issuance of the Exchange Securities or
Additional Securities.
15.
|
Defaults
and Remedies
|
If
an
Event of Default occurs (other than an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company) and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of
the outstanding Securities of the series, in each case, by notice to the
Company, may declare the principal of, premium, if any, and accrued but unpaid
interest on all the Securities of this series to be due and payable;
provided,
however
,
that so
long as any Bank Indebtedness remains outstanding, no such acceleration shall
be
effective until the earlier of (i) five (5) Business Days after the giving
of
written notice to the Issuer and the Representative under the Credit Agreement
and (ii) the day on which any Bank Indebtedness or Indebtedness is accelerated.
Upon such a declaration, such principal and interest shall be due and payable
immediately. If an Event of Default relating to certain events of bankruptcy,
insolvency or reorganization of the Company occurs, the principal of, premium,
if any, and interest on all the Securities shall become immediately due and
payable without any declaration or other act on the part of the Trustee or
any
Holders. Under certain circumstances, the Holders of a majority in principal
amount of the outstanding Securities of this series may rescind any such
acceleration with respect to the Securities and its consequences.
If
an
Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered
to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due,
no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event
of
Default is continuing, (ii) the Holders of at least 25% in principal amount
of
the outstanding Securities of this series have requested the Trustee in writing
to pursue the remedy, (iii) such Holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense, (iv) the Trustee
has not complied with such request within 60 days after the receipt of the
request and the offer of security or indemnity and (v) the Holders of a majority
in principal amount of the outstanding Securities of this series have not given
the Trustee a direction inconsistent with such request within such 60-day
period. Subject to certain restrictions, the Holders of a majority in principal
amount of the outstanding Securities of this series are given the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall
be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
16.
Trustee
Dealings with the Company
Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture,
in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not
Trustee.
17.
|
No
Recourse Against Others
|
No
director, officer, employee, incorporator or holder of any equity interests
in
the Company or of any Guarantor or any direct or indirect parent corporation,
as
such, shall have any liability for any obligations of the Company or the
Guarantors under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
of
Securities by accepting a Security waives and releases all such
liability.
This
Security shall not be valid until an authorized signatory of the Trustee (or
an
authenticating agent) manually signs the certificate of authentication on the
other side of this Security.
Customary
abbreviations may be used in the name of a Holder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
The
Company has caused CUSIP numbers and ISINs to be printed on the Securities
and
has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption
as a convenience to the Holders. No representation is made as to the accuracy
of
such numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The
Company will furnish to any Holder of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of
this Security.
ASSIGNMENT
FORM
To
assign
this Security, fill in the form below:
I
or we
assign and transfer this Security to:
_________________________________________________
(Print
or
type assignee’s name, address and zip code)
_________________________________________________
(Insert
assignee’s soc. sec. or tax I.D. No.)
and
irrevocably appoint
agent to transfer
this Security on the books of the Company. The agent may substitute another
to
act for him.
____________________________________________________
Date:
____________________________
Your
Signature: _______________________
____________________________________________________
Sign
exactly as your name appears on the other side of this Security.
Signature
Guarantee:
Date: ____________________________________________
|
___________________________________
|
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
Signature
of Signature Guarantee
|
CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION
OF TRANSFER RESTRICTED SECURITIES
This
certificate relates to $_________ principal amount of Securities held in (check
applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The
undersigned (check one box below):
o
has
requested the Trustee by written
order to deliver in exchange for its beneficial interest in the Global
Security
held
by the Depository a Security or
Securities in definitive, registered form of authorized denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated above);
o
has
requested the Trustee by
written order to exchange or register the transfer of a Security or
Securities.
In
connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule
144(k) under the Securities Act, the undersigned confirms that such Securities
are being transferred in accordance with its terms:
CHECK
ONE
BOX BELOW
(1)
|
o
|
to
the Company; or
|
(2)
|
o
|
to
the Registrar for registration in the name of the Holder, without
transfer; or
|
(3)
|
o
|
pursuant
to an effective registration statement under the Securities Act of
1933;
or
|
(4)
|
o
|
inside
the United States to a “qualified institutional buyer” (as defined in Rule
144A under the Securities Act of 1933) that purchases for its own
account
or for the account of a qualified institutional buyer to whom notice
is
given that such transfer is being made in reliance on Rule 144A,
in each
case pursuant to and in compliance with Rule 144A under the Securities
Act
of 1933; or
|
(5)
|
o
|
outside
the United States in an offshore transaction within the meaning of
Regulation S under the Securities Act in compliance with Rule 904
under
the Securities Act of 1933 and such Security shall be held immediately
after the transfer through Euroclear or Clearstream until the expiration
of the Restricted Period (as defined in the Indenture); or
|
(6)
|
o
|
to
an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act of 1933) that has furnished to
the
Trustee a signed letter containing certain representations and agreements;
or
|
(7)
|
o
|
pursuant
to another available exemption from registration provided by Rule
144
under the Securities Act of 1933.
|
Unless
one of the boxes is checked, the Trustee will refuse to register any of the
Securities evidenced by this certificate in the name of any Person other than
the registered Holder thereof;
provided,
however
,
that if
box (5), (6) or (7) is checked, the Company or the Trustee may require, prior
to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company or the Trustee 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 1933.
Date:_________________________________
Your
Signature:_______________________________________________
Signature
Guarantee:
Date:
_____________________________________________
|
____________________________________
|
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
Signature
of Signature Guarantee
|
TO
BE
COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The
undersigned represents and warrants that it is purchasing this Security 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 “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act of 1933, 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
[TO
BE
ATTACHED TO GLOBAL SECURITIES]
SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY
The
initial principal amount of this Global Security is $______________. The
following increases or decreases in this Global Security have been
made:
Date
of Exchange
|
Amount
of decrease in Principal Amount of this Global Security
|
Amount
of increase in Principal Amount of this Global Security
|
Principal
amount of this Global Security following such decrease or
increase
|
Signature
of authorized signatory of Trustee or Securities
Custodian
|
|
|
|
|
|
OPTION
OF HOLDER TO ELECT PURCHASE
If
you want to elect to have this Security purchased by the Company pursuant to
Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check
the box:
Asset
Sale
o
|
Change
of Control
o
|
|
|
If
you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, state the amount ($2,000 or any integral multiple of
$1,000):
$
Date:
_____________________________________
Your
Signature: _____________________________________________
(Sign
exactly as your name appears on the other side of this
Security)
Signature
Guarantee: _________________________________________________________
Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor program reasonably acceptable to the
Trustee
EXHIBIT
A-2
[FORM
OF
FACE OF INITIAL SECURITY]
[Global
Securities Legend]
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS 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 SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART,
TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED
TO
ON THE REVERSE HEREOF.
[Restricted
Securities Legend]
“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION
S
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER
THE SECURITIES ACT PROVIDED BY
RULE
144
THEREUNDER (IF APPLICABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE.”
Each
Temporary Regulation S Security shall bear the following additional
legend:
“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY
EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE
“SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN
TO
THEM IN REGULATION S UNDER THE SECURITIES ACT.”
Each
Definitive Security shall bear the following additional legends:
“IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.”
[FORM
OF
INITIAL SECURITY]
No.
$__________
Second
Priority Senior Secured Floating Rate Notes due 2014
CUSIP
No.
ISIN
No.
BPC
ACQUISITION CORP., a Delaware corporation, promises to pay to Cede & Co., or
registered assigns, the principal sum [of
Dollars] [listed on
the Schedule of Increases or Decreases in Global Security attached
hereto]
2
on
September 15, 2014.
Interest
Payment Dates: March 15, June 15, September 15 and December 15
Record
Dates: March 1, June 1, September 1 and December 1
Additional
provisions of this Security are set forth on the other side of this
Security.
IN
WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
BPC
ACQUISITION CORP.
By:__________________________________________
Name:
Title:
Dated:
TRUSTEE’S
CERTIFICATE OF
AUTHENTICATION
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as
Trustee, certifies that this is
one
of
the Securities
referred
to in the Indenture.
By:__________________________________
Authorized
Signatory
*
/
If
the
Security is to be issued in global form, add the Global Securities Legend and
the attachment from Exhibit A-2
captioned
“TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN
GLOBAL SECURITY”.
[FORM
OF
REVERSE SIDE OF INITIAL SECURITY]
Second
Priority Senior Secured Floating Rate Notes due 2014
(a)
BPC
ACQUISITION CORP., a Delaware corporation (such corporation, and following
the
merger of such corporation with and into BPC Holding Corporation, a Delaware
corporation, BPC Holding Corporation, and its successors and assigns under
the
Indenture hereinafter referred to, being herein called the “Company”), promises
to pay interest on the principal amount of this Security at a rate per annum,
reset quarterly, equal to LIBOR (as defined in the Indenture) plus 3.875%,
as
determined by the Calculation Agent. Interest on the Securities will be payable
quarterly in arrears March 15, June 15, September 15 and December 15 commencing
December 15, 2006. The Issuers shall make each interest payment to the holders
of record of the Securities on the immediately preceding March 1, June 1,
September 1 or December 1. Interest shall accrue from September 20, 2006.
The
amount of interest for each day that the Securities are outstanding (the Daily
Interest Amount ) will be calculated by dividing the interest rate in effect
for
such day by 360 and multiplying the result by the principal amount of the
Securities. The amount of interest to be paid on the Securities for each
Interest Period will be calculated by adding the Daily Interest Amounts for
each
day in the Interest Period.
All
percentages resulting from any of the above calculations will be rounded, if
necessary, to the nearest one hundred thousandth of a percentage point, with
five one-millionths of a percentage point being rounded upwards (e.g., 9.876545%
(or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts
used in or resulting from such calculations will be rounded to the nearest
cent
(with one-half cent being rounded upwards).
The
interest rate on the Securities will in no event be higher than the maximum
rate
permitted by New York law as the same may be modified by United States law
of
general application. The Calculation Agent will, upon the request of any holder
of Securities, provide the interest rate then in effect with respect to the
Securities. All calculations made by the Calculation Agent in the absence of
manifest error will be conclusive for all purposes and binding on the Issuer,
the Guarantors and the Holders of the Securities.
The
Issuer will pay interest on overdue principal at 1% per annum in excess of
the
Daily Interest Amount and will pay interest on overdue installments of interest
at such higher rate to the extent lawful.
(b)
Registration
Rights Agreement
.
The
Holder of this Security is entitled to the benefits of a Registration Rights
Agreement, dated as of September 20, 2006, among BPC Acquisition Corp., BPC
Holding Corporation, the Guarantors and the Initial Purchasers.
The
Company shall pay interest on the Securities (except defaulted interest) to
the
Persons who are registered Holders at the close of business on the March 1,
June
1, September 1
or
December 1 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date
(whether or not a Business Day). Holders must surrender Securities to the Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments
in
respect of the Securities represented by a Global Security (including principal,
premium, if any, and interest) shall be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company or
any
successor depositary. The Company shall make all payments in respect of a
certificated Security (including principal, premium, if any, and interest)
at
the office of the Paying Agent, except that, at the option of the Company,
payment of interest may be made by mailing a check to the registered address
of
each Holder thereof; provided, however, that payments on the Securities may
also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained
by
the payee with a bank in the United States if such Holder elects payment by
wire
transfer by giving written notice to the Trustee or Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept
in
its discretion).
3.
|
Paying
Agent and Registrar
|
Initially,
Wells Fargo Bank, National Association, a national banking association (the
“Trustee”), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any of
its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent
or
Registrar.
The
Company issued the Securities under an Indenture dated as of September 20,
2006
(the “Indenture”), among the Company and the Trustee. The terms of the
Securities 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. §§
77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and the Holders (as defined in the Indenture) are referred
to
the Indenture and the TIA for a statement of such terms and
provisions
The
Securities are second priority senior secured obligations of the Company. This
Security is one of the Initial Securities referred to in the Indenture. The
Securities include the Original Floating Rate Notes, any Additional Floating
Rate Notes and any Exchange Floating Rate Notes issued in exchange for the
Original Floating Rate Notes or any Additional Floating Rate Notes pursuant
to
the Indenture. The Original Floating Rate Notes, any Additional Floating Rate
Notes and any Exchange Floating Rate Notes are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on
the
ability of the Company and its Restricted Subsidiaries to, among other things,
make certain Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon
the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of the Company and such
Restricted
Subsidiaries,
enter into or permit certain transactions with Affiliates, create or incur
Liens
and make Asset Sales. The Indenture also imposes limitations on the ability
of
the Company and each Guarantor to consolidate or merge with or into any other
Person or convey, transfer or lease all or substantially all of its
property.
To
guarantee the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture
and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Securities
and the Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a second priority senior secured basis
pursuant to the terms of the Indenture.
Except
as
set forth in the following two paragraphs, the Securities shall not be
redeemable at the option of the Company prior to September 15, 2008. Thereafter,
the Securities shall be redeemable at the option of the Company, in whole at
any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and additional
interest, if any, to the redemption date (subject to the right of the Holders
of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
September 15 of the years set forth below:
Year
|
Redemption
Price
|
|
|
2008
|
102.000%
|
2009
|
101.000%
|
2010
and thereafter
|
100.000%
|
Notwithstanding
the foregoing, at any time and from time to time on or prior to September 15,
2008, the Company may redeem in the aggregate up to 35% of the original
aggregate principal amount of the Securities (calculated after giving effect
to
any issuance of Additional Securities), with the net cash proceeds of one or
more Equity Offerings (1) by the Company or (2) by any direct or indirect parent
of the Company, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from it, at a
redemption price (expressed as a percentage of principal amount thereof) of
100%
plus a premium (expressed as a percentage of principal amount thereof) equal
to
the interest rate per annum on the Securities applicable on the date on which
notice of redemption is given, plus accrued and unpaid interest and Additional
Interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date); p
rovided
,
however, that at least 65% of the original aggregate principal amount of the
Securities (calculated after giving effect to any issuance of Additional
Securities) must remain outstanding after each such redemption; and
provided
,
further
,
that
such redemption shall occur within 90 days after the date on which any such
Equity Offering is consummated
upon
not
less than 30 nor more than 60 days’ notice mailed to each Holder of Securities
being redeemed and otherwise in accordance with the procedures set forth in
the
Indenture. Notice of any redemption upon any Equity Offering may be given prior
to the completion thereof, and any such redemption or notice may, at the
Company’s discretion, be subject to one or more conditions precedent, including,
but not limited to, completion of the related Equity Offering.
The
Securities are not subject to any sinking fund.
Notice
of
redemption will be mailed by first-class mail at least 30 days but not more
than
60 days before the redemption date to each Holder of Securities to be redeemed
at his, her or its registered address. Securities in denominations larger than
$2,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest on
all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with a Paying Agent on or before the redemption date and certain
other
conditions are satisfied, on and after such date, interest ceases to accrue
on
such Securities (or such portions thereof) called for redemption.
8.
|
Repurchase
of Securities at the Option of the
|
Holders upon Change of Control and Asset Sales
Upon
the
occurrence of a Change of Control, each Holder shall have the right, subject
to
certain conditions specified in the Indenture, to cause the Company to
repurchase all or any part of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), as provided in, and subject to the terms of, the
Indenture.
In
accordance with Section 4.06 of the Indenture, the Company will be required
to
offer to purchase Securities upon the occurrence of certain events.
9.
|
Ranking
and Collateral
|
These
Securities and the Guarantees are secured by a second-priority security interest
in the Collateral pursuant to certain Security Documents. The Second Priority
Liens upon any and all Collateral are, to the extent and in the manner provided
in the Intercreditor Agreement, subordinate in ranking to all present and future
First Priority Liens and will be of equal ranking with all present and future
Liens securing Other Second-Lien Obligations as set forth in the Intercreditor
Agreement.
10.
|
Denominations;
Transfer; Exchange
|
The
Securities are in registered form, without coupons, in denominations of $2,000
and any integral multiple of $1,000. A Holder shall register the transfer of
or
exchange
of
Securities in accordance with the Indenture. Upon any registration of transfer
or exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay
any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for
a
period of 15 days prior to a selection of Securities to be
redeemed.
11.
|
Persons
Deemed Owners
|
The
registered Holder of this Security shall be treated as the owner of it for
all
purposes.
If
money
for the payment of principal or interest remains unclaimed for two years, the
Trustee and a Paying Agent shall pay the money back to the Company at their
written request unless an abandoned property law designates another Person.
After any such payment, the Holders entitled to the money must look to the
Company for payment as general creditors and the Trustee and a Paying Agent
shall have no further liability with respect to such monies.
Subject
to certain exceptions set forth in the Indenture, (i) the Indenture, the
Security Documents, the Intercreditor Agreement or the Securities may be amended
with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities (voting as a single class) and
(ii) any past default or compliance with any provisions may be waived with
the
written consent of the Holders of at least a majority in principal amount of
the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company and the Trustee may
amend the Indenture, Security Documents, the Intercreditor Agreement or the
Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii)
to
provide for the assumption by a Successor Company of the obligations of the
Company under the Indenture and the Securities; (iii) to provide for the
assumption by a Successor Guarantor of the obligations of a Guarantor under
the
Indenture and its Guarantee; (iv) to provide for uncertificated Securities
in
addition to or in place of certificated Securities (provided that the
uncertificated Securities are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated Securities
are
described in Section 163(f)(2)(B) of the Code); (v) to add a Guarantee with
respect to the Securities; (vi) to secure the Securities; (vii) to add
additional assets as Collateral; (viii) to release Collateral from the Lien
pursuant to the Indenture, the Security Documents and the Intercreditor
Agreement when permitted or required by the Indenture or the Security Documents,
(ix) to modify the Security Documents and/or the Intercreditor Agreement to
secure First Priority Lien Obligations and Other Second-Lien Obligations so
long
as such First Priority Lien Obligations and Other Second-Lien Obligations are
not prohibited by the provisions of the Credit Agreement or this Indenture,
(x)
to add additional covenants of the Company for the benefit of the Holders or
to
surrender rights and powers conferred on the Company; (xi) to comply with the
requirements of the SEC in order to effect or maintain the qualification of
the
Indenture under
the
TIA;
(xii) to make any change that does not adversely affect the rights of any
Holder; or (xiii) to provide for the issuance of the Exchange Securities or
Additional Securities.
14.
|
Defaults
and Remedies
|
If
an
Event of Default occurs (other than an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company) and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of
the outstanding Securities of the series, in each case, by notice to the
Company, may declare the principal of, premium, if any, and accrued but unpaid
interest on all the Securities of this series to be due and payable;
provided,
however
,
that so
long as any Bank Indebtedness remains outstanding, no such acceleration shall
be
effective until the earlier of (i) five (5) Business Days after the giving
of
written notice to the Issuer and the Representative under the Credit Agreement
and (ii) the day on which any Bank Indebtedness or Indebtedness is accelerated.
Upon such a declaration, such principal and interest shall be due and payable
immediately. If an Event of Default relating to certain events of bankruptcy,
insolvency or reorganization of the Company occurs, the principal of, premium,
if any, and interest on all the Securities shall become immediately due and
payable without any declaration or other act on the part of the Trustee or
any
Holders. Under certain circumstances, the Holders of a majority in principal
amount of the outstanding Securities may rescind any such acceleration with
respect to the Securities of this series and its consequences.
If
an
Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered
to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due,
no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event
of
Default is continuing, (ii) the Holders of at least 25% in principal amount
of
the outstanding Securities of this series have requested the Trustee in writing
to pursue the remedy, (iii) such Holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense, (iv) the Trustee
has not complied with such request within 60 days after the receipt of the
request and the offer of security or indemnity and (v) the Holders of a majority
in principal amount of the outstanding Securities of this series have not given
the Trustee a direction inconsistent with such request within such 60-day
period. Subject to certain restrictions, the Holders of a majority in principal
amount of the outstanding Securities of this series are given the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall
be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
15.
Trustee
Dealings with the Company
Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture,
in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not
Trustee.
16.
|
No
Recourse Against Others
|
No
director, officer, employee, incorporator or holder of any equity interests
in
the Company or of any Guarantor or any direct or indirect parent corporation,
as
such, shall have any liability for any obligations of the Company or the
Guarantors under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
of
Securities by accepting a Security waives and releases all such
liability.
This
Security shall not be valid until an authorized signatory of the Trustee (or
an
authenticating agent) manually signs the certificate of authentication on the
other side of this Security.
Customary
abbreviations may be used in the name of a Holder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
The
Company has caused CUSIP numbers and ISINs to be printed on the Securities
and
has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption
as a convenience to the Holders. No representation is made as to the accuracy
of
such numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The
Company will furnish to any Holder of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of
this Security.
ASSIGNMENT
FORM
To
assign
this Security, fill in the form below:
I
or we
assign and transfer this Security to:
____________________________________________
(Print
or
type assignee’s name, address and zip code)
____________________________________________
(Insert
assignee’s soc. sec. or tax I.D. No.)
and
irrevocably appoint
agent to transfer
this Security on the books of the Company. The agent may substitute another
to
act for him.
____________________________________________
Date:
_______________________
Your
Signature:__________________
____________________________________________
Sign
exactly as your name appears on the other side of this Security.
Signature
Guarantee:
Date:
___________________________________________
|
____________________________________
|
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
Signature
of Signature Guarantee
|
CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION
OF TRANSFER RESTRICTED SECURITIES
This
certificate relates to $_________ principal amount of Securities held in (check
applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The
undersigned (check one box below):
o
has
requested the Trustee by
written order to deliver in exchange for its beneficial interest in the Global
Security
held
by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an
aggregate principal amount equal to its beneficial interest in such Global
Security (or the portion thereof indicated
above);
o
has requested the Trustee by written order to exchange or register the transfer
of a Security or Securities.
In
connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule
144(k) under the Securities Act, the undersigned confirms that such Securities
are being transferred in accordance with its terms:
CHECK
ONE
BOX BELOW
(1)
|
o
|
to
the Company; or
|
(2)
|
o
|
to
the Registrar for registration in the name of the Holder, without
transfer; or
|
(3)
|
o
|
pursuant
to an effective registration statement under the Securities Act of
1933;
or
|
(4)
|
o
|
inside
the United States to a “qualified institutional buyer” (as defined in Rule
144A under the Securities Act of 1933) that purchases for its own
account
or for the account of a qualified institutional buyer to whom notice
is
given that such transfer is being made in reliance on Rule 144A,
in each
case pursuant to and in compliance with Rule 144A under the Securities
Act
of 1933; or
|
(5)
|
o
|
outside
the United States in an offshore transaction within the meaning of
Regulation S under the Securities Act in compliance with Rule 904
under
the Securities Act of 1933 and such Security shall be held immediately
after the transfer through Euroclear or Clearstream until the expiration
of the Restricted Period (as defined in the Indenture); or
|
(6)
|
o
|
to
an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act of 1933) that has furnished to
the
Trustee a signed letter containing certain representations and agreements;
or
|
(7)
|
o
|
pursuant
to another available exemption from registration provided by Rule
144
under the Securities Act of 1933.
|
Unless
one of the boxes is checked, the Trustee will refuse to register any of the
Securities evidenced by this certificate in the name of any Person other than
the registered Holder thereof; provided, however, that if box (5), (6) or (7)
is
checked, the Company or the Trustee may require, prior to registering any such
transfer of the Securities, such legal opinions, certifications and other
information as the Company or the Trustee 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 1933.
Date:
_______________________________
Your
Signature:_________________________________________________
Signature
Guarantee:
Date:
_____________________________________________
|
____________________________________
|
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
Signature
of Signature Guarantee
|
TO
BE
COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The
undersigned represents and warrants that it is purchasing this Security 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 “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act of 1933, 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
[TO
BE
ATTACHED TO GLOBAL SECURITIES]
SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY
The
initial principal amount of this Global Security is $______________. The
following increases or decreases in this Global Security have been
made:
Date
of Exchange
|
Amount
of decrease in Principal Amount of this Global Security
|
Amount
of increase in Principal Amount of this Global Security
|
Principal
amount of this Global Security following such decrease or
increase
|
Signature
of authorized signatory of Trustee or Securities
Custodian
|
|
|
|
|
|
OPTION
OF HOLDER TO ELECT PURCHASE
If
you want to elect to have this Security purchased by the Company pursuant to
Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check
the box:
Asset
Sale
o
|
Change
of Control
o
|
|
|
If
you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, state the amount ($2,000 or any integral multiple of
$1,000):
$
Date:
_________________________________
Your
Signature: ______________________________________________
(Sign
exactly as your name appears on the other side of this
Security)
Signature
Guarantee: ____________________________________________________________
Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature
guarantor
program reasonably acceptable to the Trustee
EXHIBIT
B-1
[FORM
OF
FACE OF EXCHANGE SECURITY]
[Global
Securities Legend]
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS 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 SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART,
TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED
TO
ON THE REVERSE HEREOF.
No.
$__________
8⅞%
Second Priority Senior Secured Fixed Rate Notes due 2014
CUSIP
No.
______
ISIN
No.
______
BPC
ACQUISITION CORP., a Delaware corporation, promises to pay to Cede & Co., or
registered assigns, the principal sum [of Dollars] [listed on the Schedule
of
Increases or Decreases in Global Security attached hereto]
3
USE
THE SCHEDULE OF INCREASES AND DECREASES LANGUAGE IF SECURITY IS IN GLOBAL FORM.
on
September 15, 2014.
Interest
Payment Dates: March 15 and September 15
Record
Dates: March 1 and September 1
Additional
provisions of this Security are set forth on the other side of this
Security.
IN
WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
BPC
ACQUISITION CORP.
By:______________________________________
Name:
Title:
Dated:
TRUSTEE’S
CERTIFICATE OF
AUTHENTICATION
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as
Trustee, certifies that this is
one
of
the Securities
referred
to in the Indenture.
By:
________________________________________
Authorized
Signatory
______________________
*
/
If
the
Security is to be issued in global form, add the Global Securities Legend and
the attachment from Exhibit B-1
captioned
“TO
BE ATTACHED
TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
SECURITY”.
[FORM
OF
REVERSE SIDE OF EXCHANGE SECURITY]
8⅞%
Second Priority Senior Secured Fixed Rate Notes due 2014
(a)
BPC
ACQUISITION CORP., a Delaware corporation (such corporation, and following
the
merger of such corporation with and into BPC Holding Corporation, a Delaware
corporation, BPC Holding Corporation, and its successors and assigns under
the
Indenture hereinafter referred to, being herein called the “Company”), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company shall pay interest semiannually on March 15 and
September 15 of each year, commencing March 15, 2007. Interest on the Securities
shall accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from
September 20, 2006 until the principal hereof is due. Interest shall be computed
on the basis of a 360-day year of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
The
Company shall pay interest on the Securities (except defaulted interest) to
the
Persons who are registered Holders at the close of business on the March 1
or
September 1 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date
(whether or not a Business Day). Holders must surrender Securities to the Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments
in
respect of the Securities represented by a Global Security (including principal,
premium, if any, and interest) shall be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company or
any
successor depositary. The Company shall make all payments in respect of a
certificated Security (including principal, premium, if any, and interest),
at
the office of the Paying Agent, except that, at the option of the Company,
payment of interest may be made by mailing a check to the registered address
of
each Holder thereof; provided, however, that payments on the Securities may
also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained
by
the payee with a bank in the United States if such Holder elects payment by
wire
transfer by giving written notice to the Trustee or Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept
in
its discretion).
3.
|
Paying
Agent and Registrar
|
Initially,
Wells Fargo Bank, National Association, a national banking association (the
“Trustee”), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any of
its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent
or
Registrar.
4.
Indenture
The
Company issued the Securities under an Indenture dated as of September 20,
2006
(the “Indenture”), among the Company and the Trustee. The terms of the
Securities 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. §§
77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and the Holders (as defined in the Indenture) are referred
to
the Indenture and the TIA for a statement of such terms and
provisions.
The
Securities are second priority senior secured obligations of the Company. This
Security is one of the Exchange Securities referred to in the Indenture. The
Securities include the Original Fixed Rate Notes, any Additional Fixed Rate
Notes and any Exchange Fixed Rate Notes issued in exchange for the Original
Fixed Rate Notes or any Additional Fixed Rate Notes pursuant to the Indenture.
The Original Fixed Rate Notes, any Additional Fixed Rate Notes and any Exchange
Fixed Rate Notes are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon
the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of the Company and such Restricted
Subsidiaries, enter into or permit certain transactions with Affiliates, create
or incur Liens and make Asset Sales. The Indenture also imposes limitations
on
the ability of the Company and each Guarantor to consolidate or merge with
or
into any other Person or convey, transfer or lease all or substantially all
of
its property.
To
guarantee the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture
and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Securities
and the Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a second priority senior secured basis
pursuant to the terms of the Indenture.
Except
as
set forth in the following two paragraphs, the Securities shall not be
redeemable at the option of the Company prior to September 15, 2010. Thereafter,
the Securities shall be redeemable at the option of the Company, in whole at
any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and additional
interest, if any, to the redemption date (subject to the right of the Holders
of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
September 15 of the years set forth below:
Year
|
Redemption
Price
|
|
|
2010
|
104.438%
|
2011
|
102.219%
|
2012
and thereafter
|
100.000%
|
|
|
In
addition, prior to September 15, 2010, the Company may redeem the Securities
at
its option, in whole at any time or in part from time to time, upon not less
than 30 nor more than 60 days’ prior notice mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the
principal amount of the Securities redeemed plus the Applicable Premium as
of,
and accrued and unpaid interest and additional interest, if any, to, the
applicable redemption date (subject to the right of the Holders of record on
the
relevant record date to receive interest due on the relevant interest payment
date).
Notwithstanding
the foregoing, at any time and from time to time on or prior to September 15,
2009, the Company may redeem in the aggregate up to 35% of the original
aggregate principal amount of the Securities (calculated after giving effect
to
any issuance of Additional Securities), with the net cash proceeds of one or
more Equity Offerings (1) by the Company or (2) by any direct or indirect parent
of the Company, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from it, at a
redemption price equal to 108.875% of the principal amount thereof plus accrued
and unpaid interest and additional interest, if any, to the redemption date
(subject to the right of the Holders of record on the relevant record date
to
receive interest due on the relevant interest payment date); provided, however,
that at least 65% of the original aggregate principal amount of the Securities
(calculated after giving effect to any issuance of Additional Securities) must
remain outstanding after each such redemption; and
provided,
further
,
that
such redemption shall occur within 90 days after the date on which any such
Equity Offering is consummated upon not less than 30 nor more than 60 days’
notice mailed to each Holder of Securities being redeemed and otherwise in
accordance with the procedures set forth in the Indenture. Notice of any
redemption upon any Equity Offering may be given prior to the completion
thereof, and any such redemption or notice may, at the Company’s discretion, be
subject to one or more conditions precedent, including, but not limited to,
completion of the related Equity Offering.
The
Securities are not subject to any sinking fund.
Notice
of
redemption will be mailed by first-class mail at least 30 days but not more
than
60 days before the redemption date to each Holder of Securities to be redeemed
at his, her or its registered address. Securities in denominations larger than
$2,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest on
all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with a Paying Agent on or before the redemption date and
certain
other
conditions are satisfied, on and after such date interest ceases to accrue
on
such Securities (or such portions thereof) called for redemption.
8.
|
Repurchase
of Securities at the Option of the
|
Holders upon Change of Control and Asset Sales
Upon
the
occurrence of a Change of Control, each Holder shall have the right, subject
to
certain conditions specified in the Indenture, to cause the Company to
repurchase all or any part of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), as provided in, and subject to the terms of, the
Indenture.
In
accordance with Section 4.06 of the Indenture, the Company will be required
to
offer to purchase Securities upon the occurrence of certain events.
9.
|
Ranking
and Collateral
|
These
Securities and the Guarantees are secured by a second-priority security interest
in the Collateral pursuant to certain Security Documents. The Second Priority
Liens upon any and all Collateral are, to the extent and in the manner provided
in the Intercreditor Agreement, subordinate in ranking to all present and future
First Priority Liens and will be of equal ranking with all present and future
Liens securing Other Second-Lien Obligations as set forth in the Intercreditor
Agreement.
10.
|
Denominations;
Transfer; Exchange
|
The
Securities are in registered form, without coupons, in denominations of $2,000
and any integral multiple of $1,000. A Holder shall register the transfer of
or
exchange of Securities in accordance with the Indenture. Upon any registration
of transfer or exchange, the Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or to transfer or exchange any
Securities for a period of 15 days prior to a selection of Securities to be
redeemed.
11.
|
Persons
Deemed Owners
|
The
registered Holder of this Security shall be treated as the owner of it for
all
purposes.
If
money
for the payment of principal or interest remains unclaimed for two years, the
Trustee and a Paying Agent shall pay the money back to the Company at their
written request unless an abandoned property law designates another Person.
After any such payment, the
Holders
entitled to the money must look to the Company for payment as general creditors
and the Trustee and a Paying Agent shall have no further liability with respect
to such monies.
13.
|
Discharge
and Defeasance
|
Subject
to certain conditions, the Company at any time may terminate some of or all
its
obligations under the Securities and the Indenture if the Company deposits
with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Securities to redemption or maturity, as the case may
be.
Subject
to certain exceptions set forth in the Indenture, (i) the Indenture, the
Security Documents, the Intercreditor Agreement or the Securities may be amended
with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities (voting as a single class) and
(ii) any past default or compliance with any provisions may be waived with
the
written consent of the Holders of at least a majority in principal amount of
the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company and the Trustee may
amend the Indenture, Security Documents, the Intercreditor Agreement or the
Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii)
to
provide for the assumption by a Successor Company of the obligations of the
Company under the Indenture and the Securities; (iii) to provide for the
assumption by a Successor Guarantor of the obligations of a Guarantor under
the
Indenture and its Guarantee; (iv) to provide for uncertificated Securities
in
addition to or in place of certificated Securities (provided that the
uncertificated Securities are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated Securities
are
described in Section 163(f)(2)(B) of the Code); (v) to add a Guarantee with
respect to the Securities; (vi) to secure the Securities; (vii) to add
additional assets as Collateral; (viii) to release Collateral from the Lien
pursuant to the Indenture, the Security Documents and the Intercreditor
Agreement when permitted or required by the Indenture or the Security Documents,
(ix) to modify the Security Documents and/or the Intercreditor Agreement to
secure First Priority Lien Obligations and Other Second-Lien Obligations so
long
as such First Priority Lien Obligations and Other Second-Lien Obligations are
not prohibited by the provisions of the Credit Agreement or this Indenture,
(x)
to add additional covenants of the Company for the benefit of the Holders or
to
surrender rights and powers conferred on the Company; (xi) to comply with the
requirements of the SEC in order to effect or maintain the qualification of
the
Indenture under the TIA; (xii) to make any change that does not adversely affect
the rights of any Holder; or (xiii) to provide for the issuance of the Exchange
Securities or Additional Securities.
15.
|
Defaults
and Remedies
|
If
an
Event of Default occurs (other than an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company) and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of
the outstanding Securities of the series, in each case, by notice to the
Company, may declare the principal of, premium, if any, and accrued but unpaid
interest on all the Securities of this series to be due and payable. If
an
Event
of
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company occurs, the principal of, premium, if any, and interest on all
the Securities shall become immediately due and payable without any declaration
or other act on the part of the Trustee or any Holders. Under certain
circumstances, the Holders of a majority in principal amount of the outstanding
Securities of this series may rescind any such acceleration with respect to
the
Securities and its consequences.
If
an
Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered
to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due,
no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event
of
Default is continuing, (ii) the Holders of at least 25% in principal amount
of
the outstanding Securities of this series have requested the Trustee in writing
to pursue the remedy, (iii) such Holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense, (iv) the Trustee
has not complied with such request within 60 days after the receipt of the
request and the offer of security or indemnity and (v) the Holders of a majority
in principal amount of the outstanding Securities of this series have not given
the Trustee a direction inconsistent with such request within such 60-day
period. Subject to certain restrictions, the Holders of a majority in principal
amount of the outstanding Securities of this series are given the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall
be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
16.
|
Trustee
Dealings with the Company
|
Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture,
in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not
Trustee.
17.
|
No
Recourse Against Others
|
No
director, officer, employee, incorporator or holder of any equity interests
in
the Company or of any Guarantor or any direct or indirect parent corporation,
as
such, shall have any liability for any obligations of the Issuer or the
Guarantors under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
of
Securities by accepting a Security waives and releases all such
liability.
18.
Authentication
This
Security shall not be valid until an authorized signatory of the Trustee (or
an
authenticating agent) manually signs the certificate of authentication on the
other side of this Security.
Customary
abbreviations may be used in the name of a Holder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
The
Company has caused CUSIP numbers and ISINs to be printed on the Securities
and
has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption
as a convenience to the Holders. No representation is made as to the accuracy
of
such numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The
Company will furnish to any Holder of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of
this Security.
ASSIGNMENT
FORM
To
assign
this Security, fill in the form below:
I
or we
assign and transfer this Security to:
(Print
or
type assignee’s name, address and zip code)
(Insert
assignee’s soc. sec. or tax I.D. No.)
and
irrevocably appoint
agent to transfer
this Security on the books of the Company. The agent may substitute another
to
act for him.
Date:
_____________________________________
Your
Signature:______________________________________________
Sign
exactly as your name appears on the other side of this Security.
Signature
Guarantee:
Date:
_______________________________________________
|
___________________________________
|
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
Signature
of Signature Guarantee
|
OPTION
OF HOLDER TO ELECT PURCHASE
If
you want to elect to have this Security purchased by the Company pursuant to
Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check
the box:
Asset
Sale
o
|
Change
of Control
o
|
|
|
If
you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, state the amount ($2,000 or any integral multiple of
$1,000):
$
Date:
________________________________________
Your
Signature: _____________________________________________
(Sign
exactly as your name appears on the other side of this
Security)
Signature
Guarantee:
_____________________________________________________________________________________
Signature
must be guaranteed by a
participant in a recognized signature guaranty medallion program
or
other
signature guarantor program reasonably acceptable to the
Trustee
[TO
BE
ATTACHED TO GLOBAL SECURITIES]
SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY
The
initial principal amount of this Global Security is $______________. The
following increases or decreases in this Global Security have been
made:
Date
of Exchange
|
Amount
of decrease in Principal Amount of this Global Security
|
Amount
of increase in Principal Amount of this Global Security
|
Principal
amount of this Global Security following such decrease or
increase
|
Signature
of authorized signatory of Trustee or Securities
Custodian
|
|
|
|
|
|
EXHIBIT
B-2
[FORM
OF
FACE OF EXCHANGE SECURITY]
[Global
Securities Legend]
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS 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 SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART,
TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED
TO
ON THE REVERSE HEREOF.
No.
$__________
Second
Priority Senior Secured Floating Rate Note due 2014
CUSIP
No.
______
ISIN
No.
______
BPC
ACQUISITION CORP.,
a
Delaware corporation, promises to pay to Cede & Co., or registered assigns,
the principal sum [of Dollars] [listed on the Schedule of Increases or Decreases
in Global Security attached hereto]
4
USE
THE SCHEDULE OF INCREASES AND DECREASES LANGUAGE IF SECURITY IS IN GLOBAL FORM.
on
September 15, 2014.
Interest
Payment Dates: March 15, June 15, September 15 and December 15
Record
Dates: March 1, June 1, September 1 and December 1
Additional
provisions of this Security are set forth on the other side of this
Security.
IN
WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
BPC
ACQUISITION CORP.
By:
______________________________________________
Name:
Title:
Dated:
TRUSTEE’S
CERTIFICATE OF
AUTHENTICATION
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as
Trustee, certifies that this is
one
of
the Securities
referred
to in the Indenture.
By:
___________________________________________
Authorized
Signatory
______________________
*
/
If
the
Security is to be issued in global form, add the Global Securities Legend and
the attachment from Exhibit B-2
captioned
“TO
BE
ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN
GLOBAL
SECURITY”.
[FORM
OF
REVERSE SIDE OF EXCHANGE SECURITY]
Second
Priority Senior Secured Floating Rate Note due 2014
BPC
ACQUISITION CORP.,
a
Delaware corporation (such corporation, and following the merger of such
corporation with and into BPC Holding Corporation, a Delaware corporation,
and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the “Company”), promises to pay interest on the principal amount
of this Security at a rate per annum, reset quarterly, equal to LIBOR (as
defined in the indenture) plus 3.875%, as determined by the Calculation Agent.
Interest on the Securities will be payable quarterly in arrears on March 15,
June 15, September 15 and December 15, commencing December 15, 2006. The Issuers
shall make each interest payment to the holders of record of the Securities
on
the immediately preceding March 1, June 1, September 1 or December 1. Interest
shall accrue from September 20, 2006.
The
amount of interest for each day that the Securities are outstanding (the Daily
Interest Amount ) will be calculated by dividing the interest rate in effect
for
such day by 360 and multiplying the result by the principal amount of the
Securities. The amount of interest to be paid on the Securities for each
Interest Period will be calculated by adding the Daily Interest Amounts for
each
day in the Interest Period.
All
percentages resulting from any of the above calculations will be rounded, if
necessary, to the nearest one hundred thousandth of a percentage point, with
five one-millionths of a percentage point being rounded upwards (e.g., 9.876545%
(or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts
used in or resulting from such calculations will be rounded to the nearest
cent
(with one-half cent being rounded upwards).
The
interest rate on the Securities will in no event be higher than the maximum
rate
permitted by New York law as the same may be modified by United States law
of
general application. The Calculation Agent will, upon the request of any holder
of Securities, provide the interest rate then in effect with respect to the
Securities. All calculations made by the Calculation Agent in the absence of
manifest error will be conclusive for all purposes and binding on the Issuer,
the Guarantors and the Holders of the Securities.
The
Issuer will pay interest on overdue principal at 1% per annum in excess of
the
Daily Interest Amount and will pay interest on overdue installments of interest
at such higher rate to the extent lawful.
The
Company shall pay interest on the Securities (except defaulted interest) to
the
Persons who are registered Holders at the close of business on the March 1,
June
1 September 1 or December 1 next preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date (whether or not a Business Day). Holders must surrender Securities
to the Paying Agent to collect principal payments. The Company shall pay
principal, premium, if any, and interest in money of the United States of
America that at the
time
of
payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including principal,
premium, if any, and interest) shall be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company or
any
successor depositary. The Company shall make all payments in respect of a
certificated Security (including principal, premium, if any, and interest),
at
the office of the Paying Agent, except that, at the option of the Company,
payment of interest may be made by mailing a check to the registered address
of
each Holder thereof; provided, however, that payments on the Securities may
also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained
by
the payee with a bank in the United States if such Holder elects payment by
wire
transfer by giving written notice to the Trustee or Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept
in
its discretion).
3.
|
Paying
Agent and Registrar
|
Initially,
Wells Fargo Bank, National Association, a national banking association (the
“Trustee”), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any of
its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent
or
Registrar.
The
Company issued the Securities under an Indenture dated as of September 20,
2006
(the “Indenture”), among the Company and the Trustee. The terms of the
Securities 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. §§
77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and the Holders (as defined in the Indenture) are referred
to
the Indenture and the TIA for a statement of such terms and
provisions.
The
Securities are second priority senior secured obligations of the Company. This
Security is one of the Exchange Securities referred to in the Indenture. The
Securities include the Original Floating Rate Notes, any Additional Floating
Rate Notes and any Exchange Floating Rate Notes issued in exchange for the
Original Floating Rate Notes or any Additional Floating Rate Notes pursuant
to
the Indenture. The Original Floating Rate Notes, any Additional Floating Rate
Notes and any Exchange Floating Rate Notes are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on
the
ability of the Company and its Restricted Subsidiaries to, among other things,
make certain Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon
the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of the Company and such Restricted
Subsidiaries, enter into or permit certain transactions with Affiliates, create
or incur Liens and make Asset Sales. The Indenture also imposes limitations
on
the ability of the Company and each Guarantor to consolidate or merge with
or
into any other Person or convey, transfer or lease all or substantially all
of
its property.
To
guarantee the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture
and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Securities
and the Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a second priority senior secured basis
pursuant to the terms of the Indenture.
Except
as
set forth in the following two paragraphs, the Securities shall not be
redeemable at the option of the Company prior to September 15, 2008. Thereafter,
the Securities shall be redeemable at the option of the Company, in whole at
any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and additional
interest, if any, to the redemption date (subject to the right of the Holders
of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
September 15 of the years set forth below:
Year
|
Redemption
Price
|
|
|
2008
|
102.000%
|
2009
|
101.000%
|
2010
and thereafter
|
100.000%
|
|
|
Notwithstanding
the foregoing, at any time and from time to time on or prior to September 15,
2008, the Company may redeem in the aggregate up to 35% of the original
aggregate principal amount of the Securities (calculated after giving effect
to
any issuance of Additional Securities), with the net cash proceeds of one or
more Equity Offerings (1) by the Company or (2) by any direct or indirect parent
of the Company, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from it, at a
redemption price (expressed as a percentage of principal amount thereof) of
100%
plus a premium (expressed as a percentage of principal amount thereof) equal
to
the interest rate per annum on the Securities applicable on the date on which
notice of redemption is given, plus accrued and unpaid interest and Additional
Interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the original
aggregate principal amount of the Securities (calculated after giving effect
to
any issuance of Additional Securities) must remain outstanding after each such
redemption; and
provided,
further
,
that
such redemption shall occur within 90 days after the date on which any such
Equity Offering is consummated upon not less than 30 nor more than 60 days’
notice mailed to each Holder of Securities being redeemed and otherwise in
accordance with the procedures set forth in the Indenture. Notice of any
redemption upon any Equity Offering may be given prior to the completion
thereof, and any such redemption or notice may, at the Company’s discretion, be
subject to one or more conditions precedent, including, but not limited to,
completion of the related Equity Offering.
6.
Sinking
Fund
The
Securities are not subject to any sinking fund.
Notice
of
redemption will be mailed by first-class mail at least 30 days but not more
than
60 days before the redemption date to each Holder of Securities to be redeemed
at his, her or its registered address. Securities in denominations larger than
$2,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest on
all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with a Paying Agent on or before the redemption date and certain
other
conditions are satisfied, on and after such date interest ceases to accrue
on
such Securities (or such portions thereof) called for redemption.
8.
|
Repurchase
of Securities at the Option of the
|
Holders upon Change of Control and Asset Sales
Upon
the
occurrence of a Change of Control, each Holder shall have the right, subject
to
certain conditions specified in the Indenture, to cause the Company to
repurchase all or any part of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), as provided in, and subject to the terms of, the
Indenture.
In
accordance with Section 4.06 of the Indenture, the Company will be required
to
offer to purchase Securities upon the occurrence of certain events.
9.
|
Ranking
and Collateral
|
These
Securities and the Guarantees are secured by a second-priority security interest
in the Collateral pursuant to certain Security Documents. The Second Priority
Liens upon any and all Collateral are, to the extent and in the manner provided
in the Intercreditor Agreement, subordinate in ranking to all present and future
First Priority Liens and will be of equal ranking with all present and future
Liens securing Other Second-Lien Obligations as set forth in the Intercreditor
Agreement.
10.
|
Denominations;
Transfer; Exchange
|
The
Securities are in registered form, without coupons, in denominations of $2,000
and any integral multiple of $1,000. A Holder shall register the transfer of
or
exchange of Securities in accordance with the Indenture. Upon any registration
of transfer or exchange, the Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or to transfer or exchange any
Securities for a period of 15 days prior to a selection of Securities to be
redeemed.
11.
Persons
Deemed Owners
The
registered Holder of this Security shall be treated as the owner of it for
all
purposes.
If
money
for the payment of principal or interest remains unclaimed for two years, the
Trustee and a Paying Agent shall pay the money back to the Company at their
written request unless an abandoned property law designates another Person.
After any such payment, the Holders entitled to the money must look to the
Company for payment as general creditors and the Trustee and a Paying Agent
shall have no further liability with respect to such monies.
Subject
to certain exceptions set forth in the Indenture, (i) the Indenture, the
Security Documents, the Intercreditor Agreement or the Securities may be amended
with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities (voting as a single class) and
(ii) any past default or compliance with any provisions may be waived with
the
written consent of the Holders of at least a majority in principal amount of
the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company and the Trustee may
amend the Indenture, Security Documents, the Intercreditor Agreement or the
Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii)
to
provide for the assumption by a Successor Company of the obligations of the
Company under the Indenture and the Securities; (iii) to provide for the
assumption by a Successor Guarantor of the obligations of a Guarantor under
the
Indenture and its Guarantee; (iv) to provide for uncertificated Securities
in
addition to or in place of certificated Securities (
provided
that the
uncertificated Securities are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated Securities
are
described in Section 163(f)(2)(B) of the Code); (v) to add a Guarantee with
respect to the Securities; (vi) to secure the Securities; (vii) to add
additional assets as Collateral; (viii) to release Collateral from the Lien
pursuant to the Indenture, the Security Documents and the Intercreditor
Agreement when permitted or required by the Indenture or the Security Documents,
(ix) to modify the Security Documents and/or the Intercreditor Agreement to
secure First Priority Lien Obligations and Other Second-Lien Obligations so
long
as such First Priority Lien Obligations and Other Second-Lien Obligations are
not prohibited by the provisions of the Credit Agreement or this Indenture,
(x)
to add additional covenants of the Company for the benefit of the Holders or
to
surrender rights and powers conferred on the Company; (xi) to comply with the
requirements of the SEC in order to effect or maintain the qualification of
the
Indenture under the TIA; (xii) to make any change that does not adversely affect
the rights of any Holder; or (xiii) to provide for the issuance of the Exchange
Securities or Additional Securities.
14.
|
Defaults
and Remedies
|
If
an
Event of Default occurs (other than an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company) and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of
the outstanding Securities of the
series,
in each case, by notice to the Company, may declare the principal of, premium,
if any, and accrued but unpaid interest on all the Securities of this series
to
be due and payable. If an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company occurs, the principal
of, premium, if any, and interest on all the Securities shall become immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holders. Under certain circumstances, the Holders of a majority in
principal amount of the outstanding Securities of this series may rescind any
such acceleration with respect to the Securities and its
consequences.
If
an
Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered
to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due,
no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event
of
Default is continuing, (ii) the Holders of at least 25% in principal amount
of
the outstanding Securities of this series have requested the Trustee in writing
to pursue the remedy, (iii) such Holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense, (iv) the Trustee
has not complied with such request within 60 days after the receipt of the
request and the offer of security or indemnity and (v) the Holders of a majority
in principal amount of the outstanding Securities of this series have not given
the Trustee a direction inconsistent with such request within such 60-day
period. Subject to certain restrictions, the Holders of a majority in principal
amount of the outstanding Securities of this series are given the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall
be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
15.
|
Trustee
Dealings with the Company
|
Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture,
in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not
Trustee.
16.
|
No
Recourse Against Others
|
No
director, officer, employee, incorporator or holder of any equity interests
in
the Company or of any Guarantor or any direct or indirect parent corporation,
as
such, shall have any liability for any obligations of the Issuer or the
Guarantors under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
of
Securities by accepting a Security waives and releases all such
liability.
17.
Authentication
This
Security shall not be valid until an authorized signatory of the Trustee (or
an
authenticating agent) manually signs the certificate of authentication on the
other side of this Security.
Customary
abbreviations may be used in the name of a Holder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
The
Company has caused CUSIP numbers and ISINs to be printed on the Securities
and
has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption
as a convenience to the Holders. No representation is made as to the accuracy
of
such numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The
Company will furnish to any Holder of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of
this Security.
ASSIGNMENT
FORM
To
assign
this Security, fill in the form below:
I
or we
assign and transfer this Security to:
(Print
or
type assignee’s name, address and zip code)
(Insert
assignee’s soc. sec. or tax I.D. No.)
and
irrevocably appoint
agent to transfer
this Security on the books of the Company. The agent may substitute another
to
act for him.
Date:
__________________________________
Your
Signature:_________________________________________________
Sign
exactly as your name appears on the other side of this Security.
Signature
Guarantee:
Date: _____________________________________________
|
____________________________________
|
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
Signature
of Signature Guarantee
|
OPTION
OF HOLDER TO ELECT PURCHASE
If
you want to elect to have this Security purchased by the Company pursuant to
Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check
the box:
Asset
Sale
o
|
Change
of Control
o
|
|
|
If
you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, state the amount ($2,000 or any integral multiple of
$1,000):
$
Date:
________________________________
Your
Signature: ______________________________________________
(
Sign
exactly as your name appears on the other side of this
Security)
Signature
Guarantee: _____________________________________________________________________________
Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other
signature
guarantor program
reasonably acceptable to the Trustee
[TO
BE
ATTACHED TO GLOBAL SECURITIES]
SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY
The
initial principal amount of this Global Security is $______________. The
following increases or decreases in this Global Security have been
made:
Date
of Exchange
|
Amount
of decrease in Principal Amount of this Global Security
|
Amount
of increase in Principal Amount of this Global Security
|
Principal
amount of this Global Security following such decrease or
increase
|
Signature
of authorized signatory of Trustee or Securities
Custodian
|
|
|
|
|
|
EXHIBIT
C
[FORM
OF]
TRANSFEREE
LETTER OF REPRESENTATION
Berry
Plastics Holding Corporation
c/o
Wells
Fargo Bank, National Association
●
●
Attention:
Vice President
Ladies
and Gentlemen:
This
CERTIFICATE IS DELIVERED TO REQUEST A TRANSFER OF $[ ] PRINCIPAL AMOUNT OF
THE
[
%
PRIORITY
SENIOR SECURED FIXED RATE NOTES] [SECOND PRIORITY SENIOR SECURED FLOATING RATE
NOTES] DUE 2014 (THE “SECURITIES”) OF BERRY PLASTICS HOLDING CORPORATION (THE
“ISSUER”).
Upon
transfer, the Securities would be registered in the name of the new beneficial
owner as follows:
Name:
________________________
Address:
_____________________
Taxpayer
ID Number: __________
The
undersigned represents and warrants to you that:
1)
We
are an
institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act of 1933, as amended (the “Securities Act”)),
purchasing for our own account or for the account of such an institutional
“accredited investor” at least $100,000 principal amount of the Securities, and
we are acquiring the Securities not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act. We 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 Securities, and
we
invest in or purchase securities similar to the Securities in the normal course
of our business. We, and any accounts for which we are acting, are each able
to
bear the economic risk of our or its investment.
2)
We
understand that the Securities have not been registered under the Securities
Act
and, unless so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account
for
which we are purchasing Securities to offer, sell or otherwise transfer such
Securities prior to the date that is two years after the later of the date
of
original issue and the last date on which either the Issuer or any affiliate
of
such Issuer was the owner of such Securities (or any predecessor thereto) (the
“Resale Restriction Termination Date”) only (a) in the United States to a person
whom we reasonably believe is a qualified institutional buyer (as defined in
rule 144A under the Securities Act) in a transaction meeting the requirements
of
Rule 144A, (b) outside the United States in an
offshore
transaction in accordance with Rule 904 of Regulation S under the Securities
Act, (c) pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if applicable) or (d) pursuant to an effective
registration statement under the Securities Act, in each of cases (a) through
(d) in accordance with any applicable securities laws of any state of the United
States. In addition, we will, and each subsequent holder is required to, notify
any purchaser of the Security evidenced hereby of the resale restrictions set
forth above. The foregoing restrictions on resale will not apply subsequent
to
the Resale Restriction Termination Date. If any resale or other transfer of
the
Securities is proposed to be made to an institutional “accredited investor”
prior to the Resale Restriction Termination Date, the transferor shall deliver
a
letter from the transferee substantially in the form of this letter to the
Issuer and the Trustee, which shall provide, among other things, that the
transferee is an institutional “accredited investor” within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation
of
the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee
reserve the right prior to the offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Securities pursuant to clause 1(b), 1(c)
or
1(d) above to require the delivery of an opinion of counsel, certifications
or
other information satisfactory to the Issuer and the Trustee.
Dated:
____________________
TRANSFEREE:
____________________,
By:
___________________________________
TRDOCS01/76765.8
C-
NY1:1657728.6
EXHIBIT
D
[FORM
OF
SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”) dated as of
[ ],
among [GUARANTOR] (the “New Guarantor”), a subsidiary of BPC Holding Corporation
(or its successor), a Delaware corporation (the “Issuer”) and WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, as trustee under the
indenture referred to below (the “Trustee”).
W
I T N E
S S E T H :
WHEREAS
the Issuer and the existing Guarantors have heretofore executed and delivered
to
the Trustee an indenture (as amended, supplemented or otherwise modified, the
“Indenture”) dated as of September 20, 2006, providing initially for the
issuance of $525,000,000 in aggregate principal amount of the Issuer’s 8⅞%
Second Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000 in
aggregate principal amount of the Issuer’s Second Priority Senior Secured
Floating Rate Notes due 2014 collectively, (the “Securities”);
WHEREAS
Section 4.11 of the Indenture provides that under certain circumstances the
Issuer are required to cause the New Guarantor to execute and deliver to the
Trustee a supplemental indenture pursuant to which the New Guarantor shall
unconditionally guarantee all the Issuer’s. Obligations under the Securities and
the Indenture pursuant to a Guarantee on the terms and conditions set forth
herein; and
WHEREAS
pursuant to Section 9.01 of the Indenture, the Trustee, the Issuer and the
existing Guarantors are authorized to execute and deliver this Supplemental
Indenture;
NOW
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor,
the Issuer and the Trustee mutually covenant and agree for the equal and ratable
benefit of the holders of the Securities as follows:
1.
Defined
Terms
.
As used
in this Supplemental Indenture, terms defined in the Indenture or in the
preamble or recital hereto are used herein as therein defined, except that
the
term “Holders” in this Guarantee shall refer to the term “Holders” as defined in
the Indenture and the Trustee acting on behalf of and for the benefit of such
Holders. The words “herein,” “hereof” and “hereby” and other words of similar
import used in this Supplemental Indenture refer to this Supplemental Indenture
as a whole and not to any particular section hereof.
2.
Agreement
to Guarantee
.
The New
Guarantor hereby agrees, jointly and severally with all existing Guarantors
(if
any), to unconditionally guarantee the Issuer’s Obligations under the Securities
and the Indenture on the terms and subject to the conditions set forth in
Article 12 of the Indenture and to be bound by all other applicable provisions
of the Indenture and the Securities and to perform all of the obligations and
agreements of a Guarantor under the Indenture.
3.
Notices
.
All
notices or other communications to the New Guarantor shall be given as provided
in Section 13.02 of the Indenture.
4.
Ratification
of Indenture; Supplemental Indentures Part of Indenture
.
Except
as expressly amended hereby, the Indenture is in all respects ratified and
confirmed and all the terms, conditions and provisions thereof shall remain
in
full force and effect. This Supplemental Indenture shall form a part of the
Indenture for all purposes, and every holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.
5.
Governing
Law
.
THIS
SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF
LAW.
6.
Trustee
Makes No Representation
.
The
Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture.
7.
Counterparts
.
The
parties may sign any number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
8.
Effect
of Headings
.
The
Section headings herein are for convenience only and shall not effect the
construction thereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to
be duly executed as of the date first above written.
[NEW
GUARANTOR]
By: ________________________________________
Name:
Title:
WELLS
FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE
By:
_______________________________________
Name:
Title:
FIRST
SUPPLEMENTAL INDENTURE
(this
“
First
Supplemental Indenture
”),
dated
as of September 20, 2006, by and among BPC Holding Corporation, a Delaware
corporation (the “
Company
”),
the
guarantors listed on Schedule A attached hereto (the “
Guarantors
”),
BPC
Acquisition Corp., a Delaware corporation
(“
Merger
Sub
”),
and
Wells Fargo Bank, National Association, as Trustee (the “
Trustee
”).
WITNESSETH:
WHEREAS
,
Merger
Sub has heretofore executed and delivered to the Trustee an Indenture (the
“
Indenture
”),
dated
as of September 20, 2006, providing for the issuance of $525,000,000 in
aggregate principal amount of its 8⅞% Second Priority Senior Secured Fixed Rate
Notes due 2014 (the “
Fixed
Rate Notes
”)
and
$225,000,000 aggregate principal amount of its Second Priority Senior Secured
Floating Rate Notes due 2014 (the “
Floating
Rate Notes
”
and,
together with the Fixed Rate Notes, the “
Notes
”);
WHEREAS
,
the
Company desires to execute and deliver this First Supplemental Indenture to
the
Trustee for the purpose of becoming liable for all of Merger Sub’s obligations
under the Indenture and the Notes;
WHEREAS
the
Guarantors desire to execute and deliver this First Supplemental Indenture
to
the Trustee for the purpose of guaranteeing the payment of all obligations
of
the Company under the Indenture and the Notes and the performance within
applicable grace periods of all other obligations of the Company under the
Indenture and the Notes, on the terms and conditions set
forth in
Article 12 of the Indenture; and
WHEREAS
,
pursuant to Section 9.01 of the Indenture, the Trustee and Merger Sub are
authorized to execute and deliver this First Supplemental
Indenture.
NOW
THEREFORE
,
in
consideration of the foregoing and for good and valuable consideration, the
receipt of which is hereby acknowledged, the Company, the Guarantors, Merger
Sub
and the Trustee mutually covenant and agree for the equal and ratable benefit
of
the Holders of the Notes as follows:
SECTION
1.
Capitalized
Terms.
Capitalized terms used herein but not defined shall have the meanings assigned
to them in the Indenture.
SECTION
2.
Issuer.
The
Company hereby agrees that it is henceforth liable, as an issuer of the Notes,
for all of Merger Sub’s obligations under the Indenture and the Notes, on the
terms and conditions set forth therein.
SECTION
3.
Guarantees.
Each of
the Guarantors hereby agrees, jointly and severally with all other Guarantors,
to guarantee the Company’s obligations under the Notes on the terms and subject
to the conditions set forth in Article 12 of the Indenture and to be bound
by all applicable provisions of the Indenture.
SECTION
4.
Ratification
of Indenture; Supplemental Indenture Part of Indenture.
Except
as expressly amended hereby, the Indenture is in all respects ratified
and
confirmed
and all the terms, conditions and provisions thereof shall remain in full force
and effect. This First Supplemental Indenture shall form a part of the Indenture
for all purposes, and every holder of Notes heretofore or hereafter
authenticated and delivered shall be bound hereby.
SECTION
5.
Governing
Law.
THIS
FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION
6.
The
Trustee
.
The
Trustee shall not be responsible in any manner whatsoever for or in respect
of
the validity or sufficiency of this First Supplemental Indenture or for or
in
respect of the recitals contained herein, all of which are made solely by the
Company, Merger Sub and the Guarantors. Except as otherwise expressly provided
herein, no duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed by the Trustee by reason of this First Supplemental
Indenture. This First Supplemental Indenture is executed and accepted by the
Trustee subject to all the terms and conditions set forth in the Indenture
with
the same force and effect as if those terms and conditions were repeated at
length herein and made applicable to the Trustee with respect hereto. In
entering into this First Supplemental Indenture, the Trustee shall be entitled
to the benefit of every provision of the Indenture relating to the conduct
or
affecting the liability or affording protection to the Trustee, whether or
not
elsewhere herein so provided.
SECTION
7.
Counterparts.
The
parties may sign any number of copies of this First Supplemental Indenture.
Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION
8.
Effect
of Headings.
The
Section headings herein are for convenience only and shall not effect the
construction of this First Supplemental Indenture.
[
The
rest of this page has been intentionally left blank.
]
IN
WITNESS WHEREOF, the
par
t
ies
have
caused this First Supplemental Indenture
to
be
duly executed as of the date first written above.
ISSUER
BPC
HOLDING CORPORATION
By:
_________________________________________
Name:
James
M.
Kratochvil
Title:
Executive
Vice President, Chief
Financial
Officer, Treasurer and Secretary
BPC
ACQUISITION CORP.
By:__________________________________________
Name:
Michael
Jupiter
Title:
Vice
President and Secretary
IN
WITNESS WHEREOF, the
par
t
ies
have
caused this First Supplemental Indenture
to
be
duly executed as of the date first written above.
GUARANTORS
BERRY
PLASTICS CORPORATION
AEROCON,
INC.
BERRY
IOWA CORPORATION
BERRY
PLASTICS DESIGN CORPORATION
BERRY
PLASTICS TECHNICAL SERVICES, INC.
BERRY
STERLING CORPORATION
CPI
HOLDING CORPORATION
KNIGHT
PLASTICS, INC.
PACKERWARE
CORPORATION
PESCOR,
INC.
POLY-SEAL
CORPORATION
VENTURE
PACKAGING, INC.
VENTURE
PACKAGING MIDWEST, INC.
KERR
GROUP, INC.
SAFFRON
ACQUISITION CORP.
SUN
COAST
INDUSTRIES, INC.
SETCO,
LLC
TUBED
PRODUCTS, LLC
CARDINAL
PACKAGING, INC.
LANDIS
PLASTICS, INC.
BERRY
PLASTICS ACQUISITION CORPORATION III
BERRY
PLASTICS ACQUISITION CORPORATION V
BERRY
PLASTICS ACQUISITION CORPORATION VII
BERRY
PLASTICS ACQUISITION CORPORATION VIII
BERRY
PLASTICS ACQUISITION CORPORATION IX
BERRY
PLASTICS ACQUISITION CORPORATION X
BERRY
PLASTICS ACQUISITION CORPORATION XI
BERRY
PLASTICS ACQUISITION CORPORATION XII
BERRY
PLASTICS ACQUISITION CORPORATION XIII
By:
______________________________
Name:
James M. Kratochvil
Title:
Executive Vice President, Chief
Financial
Officer, Treasurer and
S
ecretary
of each Guarantor
BERRY
PLASTICS ACQUISITION CORPORATION XV, LLC
By:
________________________________
Name:
James M. Kratochvil
Title:
Manager
IN
WITNESS WHEREOF, the
par
t
ies
have
caused this First Supplemental Indenture
to
be
duly executed as of the date first written above.
TRUSTEE
WELLS
FARGO BANK, NATIONAL ASSOCIATION, as trustee
By:
______________________________________________
Name:
Title:
REGISTRATION
RIGHTS AGREEMENT
by
and
among
BPC
Acquisition Corp.
BPC
Holding Corporation
the
subsidiaries of BPC Holding Corporation parties hereto
and
Deutsche
Bank Securities Inc.
Credit
Suisse Securities (USA) LLC
Citigroup
Global Markets Inc.
J.P.
Morgan Securities Inc.
Banc
of America Securities LLC
Lehman
Brothers Inc.
Bear,
Stearns & Co.
GE
Capital Markets, Inc.
Dated
as
of September 20, 2006
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and entered into as of
September 20, 2006, by and among BPC Acquisition Corp., a Delaware
corporation (“Merger Sub”), BPC Holding Corporation, a Delaware corporation (the
“Company”), the subsidiaries of the Company listed on Schedule A hereto
(collectively, the “Guarantors”), Deutsche Bank Securities Inc., Credit Suisse
Securities (USA) LLC, Citigroup Global Markets Inc., J.P. Morgan Securities
Inc., Banc of America Securities LLC, Lehman Brothers Inc., Bear, Stearns &
Co. and GE Capital Markets, Inc. (collectively, the “Initial Purchasers”), each
of whom has agreed to purchase, pursuant to the Purchase Agreement (as defined
below), the 8⅞% Second Priority Senior Secured Fixed Rate Notes due 2014 (the
“
Fixed
Rate Notes
”)
and
the Second Priority Senior Secured Floating Rate Notes due 2014 (the
“
Floating
Rate Notes
”
and,
together with the Fixed Rate Notes, the “Initial Notes”) issued by Merger Sub.
Upon consummation of the Acquisition (as defined in the Purchase Agreement),
the
Company, the Guarantors and the Trustee will execute a supplemental indenture
to
the Indenture, pursuant to which the Company will assume, and the Guarantors
will fully and unconditionally guarantee on a senior secured basis (the “Initial
Guarantees”), Merger Sub’s obligations under the Initial Notes. The Initial
Notes and the Initial Guarantees are herein collectively referred to as the
“Initial Securities.”
This
Agreement is made pursuant to the Purchase Agreement, dated September 15,
2006 (the “Purchase Agreement”), among Merger Sub and the Initial Purchasers,
and the Joinder Agreement, dated September 20, 2006, among the Company and
the
subsidiaries of the Company parties thereto (i) for the benefit of the Initial
Purchasers and (ii) for the benefit of the holders from time to time of the
Initial Securities, including the Initial Purchasers. In order to induce the
Initial Purchasers to purchase the Initial Securities, the Company, Merger
Sub
and the Guarantors have agreed to provide the registration rights set forth
in
this Agreement. The execution and delivery of this Agreement is a condition
to
the obligations of the Initial Purchasers set forth in Section 6(g) of the
Purchase Agreement. This Agreement shall become effective automatically and
without further action with respect to the Company and the Guarantors only
immediately upon the completion of the Acquisition described in the Purchase
Agreement.
The
parties hereby agree as follows:
Section
1.
Definitions.
As
used
in this Agreement, the following capitalized terms shall have the following
meanings:
Additional
Interest Payment Date:
With
respect to the Initial Securities, each Interest Payment Date.
Broker-Dealer:
Any
broker or dealer registered under the Exchange Act.
Business
Day:
Any day
other than a Saturday, Sunday or U.S. federal holiday or a day on which banking
institutions or trust companies located in New York, New York are authorized
or
obligated to be closed.
Closing
Date:
The
date
of this Agreement.
Commission:
The
U.S.
Securities and Exchange Commission.
Consummate:
A
registered Exchange Offer shall be deemed “Consummated” for purposes of this
Agreement upon the occurrence of (i) the filing and effectiveness under the
Securities Act of the Exchange Offer Registration Statement relating to the
Exchange Securities to be issued in the Exchange Offer, (ii) the maintenance
of
such Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof, and (iii) the delivery by the Company to the
Registrar under the Indenture of Exchange Securities in the same aggregate
principal amount as the aggregate principal amount of Initial Securities that
were tendered by Holders thereof pursuant to the Exchange Offer.
Effectiveness
Target Date:
As
defined in Section 5 hereof.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Exchange
Offer:
The
registration by the Company under the Securities Act of the Exchange Securities
pursuant to a Registration Statement pursuant to which the Company offers the
Holders of all outstanding Transfer Restricted Securities the opportunity to
exchange all such outstanding Transfer Restricted Securities held by such
Holders for Exchange Securities in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange
Offer Effectiveness Target Date:
As
defined in Section 5 hereof.
Exchange
Offer Registration Statement:
The
Registration Statement relating to the Exchange Offer, including the related
Prospectus.
Exempt
Resales:
The
transactions in which the Initial Purchasers propose to sell the Initial
Securities to certain “qualified institutional buyers,” as such term is defined
in Rule 144A under the Securities Act and to certain non-U.S. persons pursuant
to Regulation S under the Securities Act.
Exchange
Securities:
The
8⅞%
Second Priority Senior Secured Fixed Rate Notes due 2014 and the Second Priority
Senior Secured Floating Rate Notes due 2014, in each case, of the same series
under the Indenture as the Initial Notes of such series and the guarantees
of
such notes, to be issued to Holders in exchange for Transfer Restricted
Securities pursuant to this Agreement.
Free
Writing Prospectus:
Any
free
writing prospectus, as such term is defined in Rule 405 under the Securities
Act, relating to any portion of the Initial Securities and the Exchange
Securities.
Holders:
As
defined in Section 2(b) hereof.
Indemnified
Holder:
As
defined in Section 8(a) hereof.
Indenture:
The
Indenture dated as of September 20, 2006, by and between Merger Sub and
Wells Fargo Bank, N.A., as trustee (the “Trustee”), pursuant to which the
Initial Notes and the Exchange Securities are to be issued, as supplemented
by
the supplemental indenture thereto, dated as of the date hereof, pursuant to
which the Company will assume and the Guarantors will guarantee on a senior
secured basis, all of Merger Sub’s obligations thereunder, as such Indenture may
be further amended or supplemented from time to time in accordance with the
terms thereof.
Initial
Guarantees:
As
defined in the preamble hereto.
Initial
Notes:
As
defined in the preamble hereto.
Initial
Placement:
The
issuance and sale by the Company of the Initial Securities to the Initial
Purchasers pursuant to the Purchase Agreement.
Initial
Purchasers:
As
defined in the preamble hereto.
Initial
Securities:
As
defined in the preamble hereto.
Interest
Payment Date:
As
defined in the Securities.
NASD:
NASD
Inc.
Person:
An
individual, partnership, corporation, trust or unincorporated organization,
or a
government or agency or political subdivision thereof.
Prospectus:
The
prospectus included in a Registration Statement, as amended or supplemented
by
any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into
such
Prospectus.
Registration
Default:
As
defined in Section 5 hereof.
Registration
Statement:
Any
registration statement of the Company relating to (a) an offering of Exchange
Securities pursuant to an Exchange Offer or (b) the registration for resale
of
Transfer Restricted Securities pursuant to the Shelf Registration Statement,
which is filed pursuant to the provisions of this Agreement, in each case,
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Securities:
As
defined in the Indenture.
Securities
Act:
The
Securities Act of 1933, as amended.
Shelf
Filing Deadline:
As
defined in Section 4(a) hereof.
Shelf
Registration Effectiveness Date:
As
defined in Section 5 hereof.
Shelf
Registration Statement:
As
defined in Section 4(a) hereof.
Transfer
Restricted Securities:
Each
Initial Security, until the earliest to occur of (a) the date on which such
Initial Security is exchanged in the Exchange Offer for an Exchange Security
entitled to be resold to the public by the Holder thereof without complying
with
the prospectus delivery requirements of the Securities Act, (b) the date on
which such Initial Security has been effectively registered under the Securities
Act and disposed of in accordance with a Shelf Registration Statement and (c)
the date on which such Initial Security is distributed to the public pursuant
to
Rule 144 under the Securities Act or by a Broker-Dealer pursuant to the “Plan of
Distribution” contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein).
Trust
Indenture Act:
The
Trust
Indenture Act of 1939, as amended.
Underwritten
Registration or Underwritten Offering:
A
registration in which securities of the Company are sold to an underwriter
for
reoffering to the public.
Section
2.
Securities
Subject to this Agreement.
(a)
Transfer
Restricted Securities.
The
securities entitled to the benefits of this Agreement are the Transfer
Restricted Securities.
(b)
Holders
of Transfer Restricted Securities.
A
Person
is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”)
whenever such Person owns Transfer Restricted Securities.
Section
3.
Registered
Exchange Offer.
(a)
Unless the Exchange Offer shall not be permissible under applicable law or
Commission policy, each of the Company and the Guarantors shall (i) use its
commercially reasonable efforts to cause to be filed with the Commission as
soon
as practicable after the Closing Date, the Exchange Offer Registration
Statement, (ii) use its commercially reasonable efforts to cause such
Registration Statement to become effective as promptly as possible (unless
it
becomes effective automatically upon filing), but in no event later than 365
days after the Closing Date (or if such 365th day is not a Business Day, the
next succeeding Business Day), (iii) in connection with the foregoing, file
(A)
all pre-effective amendments to such Registration Statement as may be necessary
in order to cause such Registration Statement to become effective, (B) if
applicable, a post-effective amendment to such Registration Statement pursuant
to Rule 430A under the Securities Act and (C) cause all necessary filings in
connection with the registration and qualification of the Exchange Securities
to
be made under the state securities or blue sky laws of such jurisdictions as
are
necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer.
The
Exchange Offer Registration Statement shall be on the appropriate form
permitting registration of the Exchange Securities to be offered in exchange
for
the Transfer Restricted Securities and to permit resales of Initial Securities
held by Broker-Dealers as contemplated by Section 3(c) hereof.
(b)
The
Company and the Guarantors shall cause the Exchange Offer Registration Statement
to be effective continuously and shall keep the Exchange Offer open for a period
of
not
less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer;
provided,
however
,
that in
no event shall such period be less than 30 days after the date notice of the
Exchange Offer is mailed to the Holders. The Company shall cause the Exchange
Offer to comply with all applicable federal and state securities laws. No
securities other than the Exchange Securities shall be included in the Exchange
Offer Registration Statement. The Company shall use its commercially reasonable
efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 30 days after the date notice of the
Exchange Offer is required to be mailed to the Holders (or if such 30th day
is
not a Business Day, the next succeeding Business Day).
(c)
The
Company shall indicate in a “Plan of Distribution” section contained in the
Prospectus forming a part of the Exchange Offer Registration Statement that
any
Broker-Dealer who holds Initial Securities that are Transfer Restricted
Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company) may exchange such
Initial Securities pursuant to the Exchange Offer; however, such Broker-Dealer
may be deemed to be an “underwriter” within the meaning of the Securities Act
and must, therefore, deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of the Exchange Securities
received by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of the
Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of
Distribution” section shall also contain all other information with respect to
such resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such “Plan of Distribution” shall not
name any such Broker-Dealer or disclose the amount of Initial Securities held
by
any such Broker-Dealer except to the extent required by the
Commission.
Each
of
the Company and the Guarantors shall use its commercially reasonable efforts
to
keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 6(c) hereof
to
the extent necessary to ensure that it is available for resales of Initial
Securities acquired by Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period ending on the earlier of (i) 180 days from the date on which
the Exchange Offer Registration Statement is declared effective and (ii) the
date on which a Broker-Dealer is no longer required to deliver a prospectus
in
connection with market-making or other trading activities.
The
Company shall provide sufficient copies of the latest version of such Prospectus
to Broker-Dealers promptly upon request at any time during such 180-day (or
shorter as provided in the foregoing sentence) period in order to facilitate
such resales.
Section
4.
Shelf
Registration.
(a)
Shelf
Registration.
If
with
respect to either or both of the Fixed Rate Notes or the Floating Rate Notes,
as
the case may be: (i) the Company and the Guarantors are not permitted
to
consummate
the Exchange Offer because the Exchange Offer is not permitted by applicable
law
or Commission policy, (ii) for any reason the Exchange Offer is not Consummated
within 30 days after the date notice of the Exchange Offer is required to be
mailed to the Holders (or if such 30th day is not a Business Day, the next
succeeding Business Day), or (iii) with respect to any Holder of Transfer
Restricted Securities (A) such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) such Holder
may not resell the Exchange Securities acquired by it in the Exchange Offer
to
the public without delivering a prospectus (other than by reason of such
Holder’s status as an affiliate of the Company) and the Prospectus contained in
the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder, or (C) such Holder is a Broker-Dealer and
holds Initial Securities acquired directly from the Company or one of its
affiliates, then, upon such Holder’s request prior to the 20
th
day
following consummation of the Exchange Offer, the Company and the Guarantors
shall, with respect to either or both of the Fixed Rate Notes or the Floating
Rate Notes, as the case may be:
(x)
cause
to be filed a shelf registration statement pursuant to Rule 415 under the
Securities Act, which may be an amendment to the Exchange Offer Registration
Statement (in either event, the “Shelf Registration Statement”) as soon as
practicable but in any event on or prior to 180 days after such filing
obligation arises (or if such 180th day is not a Business Day, the next
succeeding Business Day) (such date being the “Shelf Filing Deadline”), which
Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof; and
(y)
use
their commercially reasonable efforts to cause such Shelf Registration Statement
to be declared effective by the Commission as promptly as possible (unless
it
becomes effective automatically upon filing), and in any event on or before
the
365th day after the obligation to file such Shelf Registration Statement arises
(or if such 365th day is not a Business Day, the next succeeding Business
Day).
Each
of
the Company and the Guarantors shall use its commercially reasonable efforts
to
keep such Shelf Registration Statement continuously effective, supplemented
and
amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Initial
Securities by the Holders of Transfer Restricted Securities entitled to the
benefit of this Section 4(a), and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules
and
regulations of the Commission as announced from time to time, for a period
of at
least two years following the effective date of such Shelf Registration
Statement (or shorter period that will terminate when all the Initial Securities
covered by such Shelf Registration Statement have been sold pursuant to such
Shelf Registration Statement). During the period during which the Company is
required to maintain an effective Shelf Registration Statement pursuant to
this
Agreement, the Company will, prior to the expiration of that Shelf Registration
Statement, file, and use its commercially reasonable efforts to cause to be
declared effective (unless it becomes effective automatically upon filing)
within a period that avoids any interruption in the ability of Holders of
Securities covered by the expiring Shelf Registration Statement to make
registered dispositions, a new registration statement
relating
to the Securities, which shall be deemed the “Shelf Registration Statement” for
purposes of this Agreement.
(b)
Provision
by Holders of Certain Information in Connection with the Shelf Registration
Statement.
No
Holder
of Transfer Restricted Securities may include any of its Transfer Restricted
Securities in any Shelf Registration Statement pursuant to this Agreement unless
and until such Holder furnishes to the Company in writing, within 20 Business
Days after receipt of a request therefor, such information as the Company may
reasonably request for use in connection with any Shelf Registration Statement
or Prospectus or preliminary Prospectus included therein or amendment or
supplement thereto or Free Writing Prospectus. Each Holder as to which any
Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
Section
5.
Additional
Interest.
If
(i)
unless the Exchange Offer shall not be permissible under applicable law or
Commission policy, the Exchange Offer Registration Statement has not been
declared effective by the Commission (or become automatically effective) on
or
prior to 365 days after the Closing Date (the “Exchange Offer Effectiveness
Target Date”), (ii) in the event the Company and the Guarantors are required to
file a Shelf Registration Statement pursuant to Section 4(a) hereof, the Shelf
Registration Statement has not been declared effective by the Commission (or
become automatically effective) on or prior to 365 days after the obligation
to
file a Shelf Registration Statement arises (the “Shelf Registration
Effectiveness Target Date” and, together with the Exchange Offer Effectiveness
Date, the “Effectiveness Target Date”), (iii) the Exchange Offer has not been
Consummated within 30 Business Days after the Exchange Offer Effectiveness
Target Date with respect to the Exchange Offer Registration Statement, or (iv)
any Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded immediately by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself immediately declared or automatically effective (except in the case
of a
Registration Statement that ceases to be effective or usable as specifically
permitted by the last paragraph of Section 6 hereof) (each such event referred
to in clauses (i) through (iv), a “Registration Default”), the Company and the
Guarantors hereby agree that the interest rate borne by the affected series
of
Transfer Restricted Securities shall be increased by 0.25% per annum during
the
90-day period immediately following the occurrence of any Registration Default
and shall increase by 0.25% per annum at the end of each subsequent 90-day
period, but in no event shall such increase exceed 1.00% per annum. Following
the earliest of (x) the cure of all Registration Defaults relating to any
particular Transfer Restricted Securities, (y) the date on which such Transfer
Restricted Security ceases to be a Transfer Restricted Security or otherwise
becomes freely transferable by Holders other than affiliates of the Company
without further registration under the Securities Act and (z) the date that
is
two years after the Closing Date, the interest rate borne by the relevant
Transfer Restricted Securities will be reduced to the original interest rate
borne by such Transfer Restricted Securities;
provided,
however,
that, if
after any such reduction in interest rate, a different Registration Default
occurs, the interest rate borne by the relevant Transfer Restricted Securities
shall again be increased pursuant to the foregoing provisions.
Notwithstanding
the foregoing, (i) the amount of Additional Interest payable shall not increase
because more than one Registration Default has occurred and is pending and
(ii)
a Holder of Transfer Restricted Securities that is not entitled to the benefits
of the Shelf Registration Statement (because, e.g., such Holder has not elected
to include information or has not timely delivered such information to the
Company pursuant to Section 4(b) hereof) shall not be entitled to Additional
Interest with respect to a Registration Default that pertains to the Shelf
Registration Statement.
All
obligations of the Company and the Guarantors set forth in the preceding
paragraph that are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
Section
6.
Registration
Procedures.
(a)
Exchange
Offer Registration Statement.
In
connection with the Exchange Offer, the Company and the Guarantors shall comply
with all of the provisions of Section 6(c) hereof, shall use their
commercially reasonable efforts to effect such exchange to permit the sale
of
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof, and shall comply with all of the following
provisions:
(i)
If in
the reasonable opinion of counsel to the Company there is a question as to
whether the Exchange Offer is permitted by applicable law, each of the Company
and the Guarantors hereby agrees to seek a favorable decision from the
Commission allowing the Company and the Guarantors to Consummate an Exchange
Offer for such Initial Securities. Each of the Company and the Guarantors hereby
agrees to pursue the issuance of such a decision to the Commission staff level
but shall not be required to take commercially unreasonable action to effect
a
change of Commission policy. Each of the Company and the Guarantors hereby
agrees, however, to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by counsel
to the Company setting forth the legal bases, if any, upon which such counsel
has concluded that such an Exchange Offer should be permitted and (C) diligently
pursue a favorable resolution by the Commission staff of such
submission.
(ii)
As a
condition to its participation in the Exchange Offer pursuant to the terms
of
this Agreement, each Holder of Transfer Restricted Securities shall furnish,
upon the request of the Company, prior to the Consummation thereof, a written
representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an affiliate of the Company, (B) it is not engaged
in,
and does not intend to engage in, and has no arrangement or understanding with
any Person to participate in, a distribution of the Exchange Securities to
be
issued in the Exchange Offer and (C) it is acquiring the Exchange Securities
in
its ordinary course of business. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Company’s preparations
for the Exchange Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to participate in
a
distribution of
the
securities to be acquired in the Exchange Offer (1) could not under Commission
policy as in effect on the date of this Agreement rely on the position of the
Commission enunciated in
Morgan
Stanley and Co., Inc.
(available June 5, 1991) and
Exxon
Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission’s letter to Shearman
& Sterling dated July 2, 1993, and similar no-action letters (which may
include any no-action letter obtained pursuant to clause (i) above), and (2)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction and that such
a
secondary resale transaction should be covered by an effective registration
statement containing the selling security holder information required by Item
507 or 508, as applicable, of Regulation S-K if the resales are of Exchange
Securities obtained by such Holder in exchange for Initial Securities acquired
by such Holder directly from the Company.
(b)
Shelf
Registration Statement.
In
connection with the Shelf Registration Statement, each of the Company and the
Guarantors shall comply with all the provisions of Section 6(c) hereof and
shall
use its commercially reasonable efforts to effect such registration (unless
automatically declared effective) to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto each of the Company and the
Guarantors will as expeditiously as is commercially reasonable prepare and
file
with the Commission a Registration Statement relating to the registration on
any
appropriate form under the Securities Act, which form shall be available for
the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
(c)
General
Provisions.
In
connection with any Registration Statement and any Prospectus required by this
Agreement to permit the sale or resale of Transfer Restricted Securities and
any
Free Writing Prospectus (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Initial
Securities by Broker-Dealers and any Free Writing Prospectus related thereto),
each of the Company and the Guarantors shall:
(i)
use
its commercially reasonable efforts to keep such Registration Statement
continuously effective during the period required by this Agreement and provide
all requisite financial statements (including, if required by the Securities
Act
or any regulation thereunder, financial statements of the Guarantors for the
period specified in Section 3 or 4 hereof, as applicable); upon the occurrence
of any event that would cause any such Registration Statement or the Prospectus
contained therein (A) to contain a material misstatement or omission or (B)
not
to be effective and usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Registration Statement, in the case of clause
(A),
correcting any such misstatement or omission, and, in the case of either clause
(A) or (B), use its commercially reasonable efforts to cause such amendment
to
be declared effective (unless automatically declared effective) and such
Registration Statement and the related Prospectus to become usable for their
intended purpose(s) as soon as practicable thereafter;
(ii)
prepare and file with the Commission such amendments and post-effective
amendments to the applicable Registration Statement as may be necessary to
keep
the Registration Statement effective for the applicable period set forth in
Section 3 or 4 hereof, as applicable, or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration Statement
have been sold; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule
424
under the Securities Act, and to comply fully with the applicable provisions
of
Rules 424 and 430A under the Securities Act in a timely manner; and comply
with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus;
(iii)
advise the underwriter(s), if any, and selling Holders promptly and, if
requested by such Persons, to confirm such advice in writing, (A) when the
Prospectus, any Prospectus supplement, any post-effective amendment or any
Free
Writing Prospectus has been filed, and, with respect to any Registration
Statement or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement
under the Securities Act, of the suspension by any state securities commission
of the qualification of the Transfer Restricted Securities for offering or
sale
in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, of the issuance by the Commission of a notification of
objection to the use of the form on which the Registration Statement has been
filed, or of the happening of any event that causes the Company to become an
“ineligible issuer,” as defined in Commission Rule 405, (D) of the
existence of any fact or the happening of any event that makes any statement
of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in
the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order
suspending the effectiveness of the Registration Statement or a notification
of
objection to the use of the form on which the Registration Statement has been
filed or if any state securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption from qualification
of
the Transfer Restricted Securities under state securities or blue sky laws,
each
of the Company and the Guarantors shall use its commercially reasonable efforts
to obtain the withdrawal or lifting of such order at the earliest practicable
time;
(iv)
(A)(1) furnish without charge to each of the Initial Purchasers, each selling
Holder named in any Registration Statement that has requested such copies,
if
any, and each of the underwriter(s), if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein or
any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial filing
of
such Registration Statement), which
documents
will be subject to the review and comment of such requesting Holders and
underwriter(s) in connection with such sale, if any, for a period of at least
five Business Days, and (2) not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration Statement
or
Prospectus (including all such documents incorporated by reference) to which
an
Initial Purchaser of Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s), if any, shall reasonably object in writing
within five Business Days after the receipt thereof (such objection to be deemed
timely made upon confirmation of telecopy transmission within such period).
The
objection of an Initial Purchaser or underwriter, if any, shall be deemed to
be
reasonable if such Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains a material misstatement or
omission;
(B)
(1)
furnish without charge to each of the Initial Purchasers before filing with
the
Commission, a copy of any Free Writing Prospectus, which will be subject to
the
consent of the Initial Purchasers, and (2) not file any such Free Writing
Prospectus to which the Initial Purchasers of Transfer Restricted Securities
covered by such Registration Statement have not consented
(such
consent not to be unreasonably withheld, conditioned or delayed);
(v)
promptly prior to the filing of any document that is to be incorporated by
reference into a Registration Statement or Prospectus, provide copies of such
document to the Initial Purchasers, each selling Holder named in any
Registration Statement that has requested such documents, if any, and to the
underwriter(s), if any, make the Company’s and the Guarantors’ representatives
available for discussion of such document and other customary due diligence
matters, subject to customary confidentiality agreements, and include such
information in such document prior to the filing thereof as such selling Holders
or underwriter(s), if any, reasonably may request;
(vi)
make
available, subject to customary confidentiality agreements, at reasonable times
for inspection by the Initial Purchasers, the managing underwriter(s), if any,
participating in any disposition pursuant to such Registration Statement and
any
attorney or accountant retained by such Initial Purchasers or any of the
underwriter(s), all financial and other records, pertinent corporate documents
and properties of each of the Company and the Guarantors, and cause the
Company’s and the Guarantors’ officers, directors and employees to supply all
information, in each case as shall be reasonably necessary to enable any such
Holder, underwriter, attorney or accountant to exercise any applicable
responsibilities in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and prior
to
its effectiveness and to participate in meetings with investors to the extent
reasonably requested by the managing underwriter(s), if any;
(vii)
if
requested by any selling Holders or the underwriter(s), if any, promptly
incorporate in any Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as such
selling Holders and underwriter(s), if any, may reasonably request to have
included therein, including,
without
limitation, information relating to the “Plan of Distribution” of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the purchase
price being paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required filings
of such Prospectus supplement or post-effective amendment as soon as practicable
after the Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(viii)
cause the Transfer Restricted Securities covered by the Registration Statement
to be rated with the appropriate rating agencies, if so requested by the Holders
of a majority in aggregate principal amount of Securities covered thereby or
the
underwriter(s), if any;
(ix)
furnish to each Initial Purchaser, each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment thereto,
including financial statements and schedules, all documents incorporated by
reference therein and all exhibits (including exhibits incorporated therein
by
reference);
(x)
deliver to each selling Holder and each of the underwriter(s), if any, without
charge, as many copies of the Prospectus (including each preliminary prospectus)
and any amendment or supplement thereto as such Persons reasonably may request;
each of the Company and the Guarantors hereby consents to the use of the
Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities covered by the Prospectus
or
any amendment or supplement thereto;
(xi)
enter into such agreements (including an underwriting agreement), and make
such
representations and warranties, and take all such other commercially reasonable
actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any Registration
Statement contemplated by this Agreement, all to such extent as may be
reasonably requested by any Initial Purchaser or by any Holder of Transfer
Restricted Securities or underwriter in connection with any sale or resale
pursuant to any Registration Statement contemplated by this Agreement; and
whether or not an underwriting agreement is entered into and whether or not
the
registration is an Underwritten Registration, each of the Company and the
Guarantors shall:
(A)
furnish to each Initial Purchaser, each selling Holder and each underwriter,
if
any, in such substance and scope as they may reasonably request and as are
customarily made by issuers to underwriters in primary underwritten offerings,
upon the date of the effectiveness of the Shelf Registration
Statement:
(1)
a
certificate, dated the date of effectiveness of the Shelf Registration
Statement, as the case may be, signed by (y) the President or any Vice President
and (z) a principal financial or accounting officer of
each
of
the Company and the Guarantors, confirming, as of the date thereof, the matters
set forth in Section 6(c) of the Purchase Agreement and such other matters
as
such parties may reasonably request;
(2)
if
requested by a majority of selling Holders, an opinion, dated the date of
effectiveness of the Shelf Registration Statement, as the case may be, of
counsel for the Company and the Guarantors, covering the matters set forth
in
the opinion delivered pursuant to Section 6(a)(i) of the Purchase Agreement
and
such other matter as such parties may reasonably request, and in any event
including a statement to the effect that such counsel has participated in
conferences with officers and other representatives of the Company and the
Guarantors, representatives of the independent public accountants for the
Company and the Guarantors, representatives of the underwriter(s), if any,
and
counsel to the underwriter(s), if any, in connection with the preparation of
such Registration Statement and the related Prospectus and have considered
the
matters required to be stated therein and the statements contained therein,
although such counsel has not independently verified the accuracy, completeness
or fairness of such statements; and that such counsel advises that, on the
basis
of the foregoing, no facts came to such counsel’s attention that caused such
counsel to believe that the applicable Registration Statement, (A) at the
date of the opinion and at the time such Registration Statement or any
post-effective amendment thereto became effective, (B) at the applicable
time identified by such Holders or managing underwriters, and (C) in the
case of the Exchange Offer Registration Statement, as of the date of
Consummation, in the case of (A), (B) and (C) contained an untrue statement
of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus contained in such Registration Statement as of its date and, in
the
case of the opinion dated the date of Consummation of the Exchange Offer, as
of
the date of Consummation, contained an untrue statement of a material fact
or
omitted to state a material fact necessary in order to make the statements
therein not misleading. Without limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial data included in any
Registration Statement contemplated by this Agreement or the related Prospectus;
and
(3)
a
customary comfort letter, dated the date of effectiveness of the Shelf
Registration Statement, from the Company’s independent accountants, in the
customary form and covering matters of the type customarily requested to be
covered in comfort letters by underwriters in connection with primary
underwritten offerings, and covering or affirming
the
matters set forth in the comfort letters delivered pursuant to Section 6(d)
of
the Purchase Agreement, without exception;
(B)
set
forth in full or incorporate by reference in the underwriting agreement, if
any,
the indemnification provisions and procedures of Section 8 hereof with respect
to all parties to be indemnified pursuant to said Section; and
(C)
deliver such other documents and certificates as may be reasonably requested
by
such parties to evidence compliance with Section 6(c)(xi)(A) hereof and with
any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company or any of the Guarantors pursuant to this Section
6(c)(xi), if any.
If
at any
time the representations and warranties of the Company and the Guarantors
contemplated in Section 6(c)(xi)(A)(1) hereof cease to be true and correct,
the
Company or the Guarantors shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if requested
by
such Persons, shall confirm such advice in writing;
(xii)
prior to any public offering of Transfer Restricted Securities, cooperate with
the selling Holders, the underwriter(s), if any, and their respective counsel
in
connection with the registration and qualification of the Transfer Restricted
Securities under the state securities or blue sky laws of such jurisdictions
as
the selling Holders or underwriter(s), if any, may request and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement;
provided,
however
,
that
none of the Company or the Guarantors shall be required to register or qualify
as a foreign corporation where it is not then so qualified or to take any action
that would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration Statement,
in
any jurisdiction where it is not then so subject;
(xiii)
issue, upon the request of any Holder of Initial Securities covered by the
Shelf
Registration Statement, Exchange Securities having an aggregate principal amount
equal to the aggregate principal amount of Initial Securities surrendered to
the
Company by such Holder in exchange therefor or being sold by such Holder; such
Exchange Securities to be registered in the name of such Holder or in the name
of the purchaser(s) of such Securities, as the case may be; in return, the
Initial Securities held by such Holder shall be surrendered to the Company
for
cancellation;
(xiv)
subject to the terms of the Indenture, cooperate with the selling Holders and
the underwriter(s), if any, to facilitate the timely preparation and delivery
of
certificates representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and enable such Transfer Restricted Securities
to be in such denominations and registered in such names as the Holders or
the
underwriter(s), if any, may request at least two Business Days prior to any
sale
of Transfer Restricted Securities made by such Holders or
underwriter(s);
(xv)
use
its commercially reasonable efforts to cause the Transfer Restricted Securities
covered by the Registration Statement to be registered with or approved by
such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter(s), if any, to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in Section 6(c)(xii) hereof;
(xvi)
if
any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist or
have occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not
misleading;
(xvii)
provide a CUSIP number for all Securities not later than the effective date
of
the Registration Statement covering such Securities and provide the Trustee
under the applicable Indenture with printed certificates for such Securities
which are in a form eligible for deposit with the Depository Trust Company
and
take all other action necessary to ensure that all such Securities are eligible
for deposit with the Depository Trust Company;
(xviii)
cooperate and assist in any filings required to be made with the NASD and in
the
performance of any due diligence investigation by any underwriter (including
any
“qualified independent underwriter”) that is required to be retained in
accordance with the rules and regulations of the NASD;
(xix)
otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to its
security holders, as soon as practicable, a consolidated earning statement
meeting the requirements of Rule 158 (which need not be audited) for the
twelve-month period (A) commencing at the end of any fiscal quarter in
which Transfer Restricted Securities are sold to underwriters in a firm
commitment or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company’s first fiscal quarter commencing after the effective date of the
Registration Statement;
(xx)
cause the Indenture to be qualified under the Trust Indenture Act not later
than
the effective date of the first Registration Statement required by this
Agreement, and, in connection therewith, cooperate with the Trustee and the
Holders of Securities to effect such changes to the Indenture as may be required
for such Indenture to be so qualified in accordance with the terms of the Trust
Indenture Act; and to execute, and to use its commercially reasonable efforts
to
cause the Trustee to execute, all documents that may be required to effect
such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
(xxi)
maintain the listing of all Securities covered by the Registration Statement
on
The PORTAL
SM
Market;
and
(xxii)
provide promptly to each Holder upon request each document filed with the
Commission pursuant to the requirements of Section 13 and Section 15 of the
Exchange Act.
Each
Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice from the Company of the existence of any fact of the
kind
described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or
until it is advised in writing (the “Advice”) by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.
If so
directed by the Company, each Holder will deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days (a “Delay Period”) during
the period from and including the date of the giving of such notice pursuant
to
Section 6(c)(iii)(D) hereof to and including the date when each selling Holder
covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof
or
shall have received the Advice;
provided
that
there shall not be more than 75 days of Delay Periods during any 12-month
period;
provided
further, however,
that
(except as provided in Section 5(iv) hereof) no such extension shall be taken
into account in determining whether Additional Interest is due pursuant to
Section 5 hereof or the amount of such Additional Interest, it being agreed
that the Company’s option to suspend use of a Registration Statement pursuant to
this paragraph shall be treated as a Registration Default for purposes of
Section 5 hereof.
Section
7.
Registration
Expenses.
(a)
All
expenses incident to the Company’s and the Guarantor’s performance of or
compliance with this Agreement will be borne by the Company and the Guarantors,
jointly and severally, regardless of whether a Registration Statement becomes
effective, including, without limitation: (i) all registration and filing fees
and expenses (including filings made by any Initial Purchaser or Holder with
the
NASD (and, if applicable, the fees and expenses of any “qualified independent
underwriter”, and one counsel to such person, that may be required by the rules
and regulations of the NASD)); (ii) all fees and expenses of compliance with
federal securities and state securities or blue sky laws (including the
reasonable fees and disbursements of one counsel to the Holder of Transfer
Restricted Securities); (iii) all expenses of printing (including printing
certificates for the Exchange Securities to be issued in the Exchange Offer
and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company and the Guarantors and,
subject to Section 7(b) hereof, one counsel to the Holders of Transfer
Restricted Securities; (v) all application and filing fees in
connection
with
listing the Exchange Securities on a securities exchange or automated quotation
system pursuant to the requirements thereof; and (vi) all fees and disbursements
of independent certified public accountants of the Company and the Guarantors
(including the expenses of any special audit and comfort letters required by
or
incident to such performance).
Each
of
the Company and the Guarantors will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company or the Guarantors.
(b)
In
connection with any Registration Statement required by this Agreement
(including, without limitation, the Exchange Offer Registration Statement and
the Shelf Registration Statement), the Company and the Guarantors, jointly
and
severally, will reimburse the Initial Purchasers and the Holders of Transfer
Restricted Securities being tendered in the Exchange Offer and/or resold
pursuant to the “Plan of Distribution” contained in the Exchange Offer
Registration Statement or registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not
more
than one counsel, who shall be Cahill Gordon & Reindel
llp
or such
other counsel as may be chosen by the Holders of a majority in principal amount
of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared.
Section
8.
Indemnification.
(a)
The
Company and the Guarantors, jointly and severally, agree to indemnify and hold
harmless (i) each Holder and (ii) each Person, if any, who controls (within
the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
any Holder (any of the Persons referred to in this clause (ii) being hereinafter
referred to as a “controlling person”) and (iii) the respective officers,
directors, partners, employees, representatives and agents of any Holder or
any
controlling person (any Person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an “Indemnified Holder”), to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities,
judgments, actions and expenses (including, without limitation, and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing,
settling, compromising, paying or defending any claim or action, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Holder), joint or several, directly or indirectly caused by, related
to, based upon, arising out of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus (or any amendment or supplement thereto) or Free Writing
Prospectus, or any omission or alleged omission to state therein a material
fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses are caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in conformity with
information relating to any of the Holders furnished in writing to the Company
by any of the Holders expressly for use therein. This indemnity agreement shall
be in addition to any liability that the Company or any of the Guarantors may
otherwise have.
In
case
any action or proceeding (including any governmental or regulatory investigation
or proceeding) shall be brought or asserted against any of the Indemnified
Holders with respect to which indemnity may be sought against the Company or
the
Guarantors, such Indemnified Holder (or the Indemnified Holder controlled by
such controlling person) shall promptly notify the Company and the Guarantors
in
writing;
provided,
however,
that the
failure to give such notice shall not relieve any of the Company or the
Guarantors of its obligations pursuant to this Agreement. Such Indemnified
Holder shall have the right to employ its own counsel in any such action and
the
fees and expenses of such counsel shall be paid, as incurred, by the Company
and
the Guarantors (regardless of whether it is ultimately determined that an
Indemnified Holder is not entitled to indemnification hereunder). The Company
and the Guarantors shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for such Indemnified Holders, which firm shall be designated by the Holders.
The
Company and the Guarantors shall be liable for any settlement of any such action
or proceeding effected with the Company’s and the Guarantors’ prior written
consent, which consent shall not be withheld unreasonably, and each of the
Company and the Guarantors agrees to indemnify and hold harmless any Indemnified
Holder from and against any loss, claim, damage, liability or expense by reason
of any settlement of any action effected with the written consent of the Company
and the Guarantors. The Company and the Guarantors shall not, without the prior
written consent of each Indemnified Holder, settle or compromise or consent
to
the entry of judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Holder is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Holder from all liability arising out of such action, claim, litigation or
proceeding.
(b)
Each
Holder of Transfer Restricted Securities agrees, severally and not jointly,
to
indemnify and hold harmless the Company, the Guarantors and their respective
directors, officers of the Company and the Guarantors who sign a Registration
Statement, and any Person controlling (within the meaning of Section 15 of
the
Securities Act or Section 20 of the Exchange Act) the Company or any of the
Guarantors, and the respective officers, directors, partners, employees,
representatives and agents of each such Person, to the same extent as the
foregoing indemnity from the Company and the Guarantors to each of the
Indemnified Holders, but only with respect to claims and actions based on
information relating to such Holder furnished in writing by such Holder
expressly for use in any Registration Statement. In case any action or
proceeding shall be brought against the Company, the Guarantors or their
respective directors or officers or any such controlling person in respect
of
which indemnity may be sought against a Holder of Transfer Restricted
Securities, such Holder shall have the rights and duties given the Company
and
the Guarantors, and the Company, the Guarantors, their respective directors
and
officers and such controlling person shall have the rights and duties given
to
each Holder by the preceding paragraph.
(c)
If
the indemnification provided for in this Section 8 is unavailable to an
indemnified party under Section 8(a) or (b) hereof (other than by reason of
exceptions provided in those
Sections)
in respect of any losses, claims, damages, liabilities, judgments, actions
or
expenses referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid
or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one hand,
and the Holders, on the other hand, from the Initial Placement (which in the
case of the Company and the Guarantors shall be deemed to be equal to the total
gross proceeds to the Company and the Guarantors from the Initial Placement),
the amount of Additional Interest which did not become payable as a result
of
the filing of the Registration Statement resulting in such losses, claims,
damages, liabilities, judgments actions or expenses, and such Registration
Statement, or if such allocation is not permitted by applicable law, the
relative fault of the Company and the Guarantors, on the one hand, and the
Holders, on the other hand, in connection with the statements or omissions
which
resulted in such losses, claims, damages, liabilities or expenses, as well
as
any other relevant equitable considerations. The relative fault of the Company
and the Guarantors, on the one hand, and of the Indemnified Holder on the other
shall be determined by reference to, among other things, whether the untrue
or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or
any
of the Guarantors, on the one hand, or the Indemnified Holders, on the other
hand, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
or
payable by a party as a result of the losses, claims, damages, liabilities
and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a) hereof, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The
Company, the Guarantors and each Holder of Transfer Restricted Securities agree
that it would not be just and equitable if contribution pursuant to this
Section 8(c) were determined by pro rata allocation (even if the Holders
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses referred to in the immediately preceding paragraph shall be deemed
to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, none of the Holders (and its related Indemnified Holders) shall
be
required to contribute, in the aggregate, any amount in excess of the amount
by
which the total discount received by such Holder with respect to the Initial
Securities exceeds the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders’ obligations to contribute pursuant to this
Section 8(c) are several in proportion to the respective principal amount of
Initial Securities held by each of the Holders hereunder and not
joint.
Section
9.
Rule
144A.
Each
of
the Company and the Guarantors hereby agrees with each Holder, for so long
as
any Transfer Restricted Securities remain outstanding, to make available to
any
Holder or beneficial owner of Transfer Restricted Securities in connection
with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A under the Securities
Act.
Section
10.
Participation
in Underwritten Registrations.
No
Holder
may participate in any Underwritten Registration hereunder unless such Holder
(a) agrees to sell such Holder’s Transfer Restricted Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of
such
underwriting arrangements.
Section
11.
Selection
of Underwriters.
The
Holders of Transfer Restricted Securities covered by the Shelf Registration
Statement who desire to do so may sell such Transfer Restricted Securities
in an
Underwritten Offering. In any such Underwritten Offering, the investment
banker(s) and managing underwriter(s) that will administer such offering will
be
selected by the Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities included in such offering;
provided,
however
,
that
such investment banker(s) and managing underwriter(s) must be reasonably
satisfactory to the Company.
Section
12.
Miscellaneous.
(a)
Remedies.
Each
of
the Company and the Guarantors hereby agrees that monetary damages would not
be
adequate compensation for any loss incurred by reason of a breach by it of
the
provisions of this Agreement and hereby agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b)
No
Inconsistent Agreements.
Each
of
the Company and the Guarantors will not on or after the date of this Agreement
enter into any agreement with respect to its securities that conflicts with
the
provisions hereof. The rights granted to the Holders hereunder do not in any
way
conflict with the rights granted to the holders of the Company’s or any of the
Guarantors’ securities under any agreement in effect on the date
hereof.
(c)
Adjustments
Affecting the Securities.
The
Company will not effect any change, or permit any change to occur, in each
case,
with respect to the terms of the Securities that would materially and adversely
affect the ability of the Holders to Consummate any Exchange Offer.
(d)
Amendments
and Waivers.
The
provisions of this Agreement may not be amended, modified or supplemented,
and
waivers or consents to or departures from the provisions hereof may not be
given
unless the Company has (i) in the case of Section 5 hereof and this Section
12(d)(i), obtained the written consent of Holders of all outstanding Transfer
Restricted Securities and (ii) in the case of all other provisions hereof,
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities (excluding any Transfer
Restricted Securities held by the Company or their Affiliates). Notwithstanding
the
foregoing,
a waiver or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant
to
such Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities being tendered or registered;
provided,
however,
that,
with respect to any matter that directly or indirectly affects the rights of
any
Initial Purchaser hereunder, the Company shall obtain the written consent of
each such Initial Purchaser with respect to which such amendment, qualification,
supplement, waiver, consent or departure is to be effective.
(e)
Notices.
All
notices and other communications provided for or permitted hereunder shall
be
made in writing by hand-delivery, first-class mail (registered or certified,
return receipt requested), telex, telecopier, or air courier guaranteeing
overnight delivery:
(i)
if to
a Holder, at the address set forth on the records of the Registrar under the
Indenture, with a copy to the Registrar under the Indenture; and
(ii)
if
to the Company or the Guarantors:
Berry
Plastics Holding Corporation
101
Oakley Street
Evansville,
Indiana 47710
Telecopier
No.: (812) 424-0128
Attention:
General Counsel
With
a
copy to:
O’Melveny
& Myers LLP
Times
Square Tower
7
Times
Square
New
York,
NY 10036
Telecopier
No.: (212) 326-2061
Attention:
Gregory Ezring
All
such
notices and communications shall be deemed to have been duly given: at the
time
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next Business
Day,
if timely delivered to an air courier guaranteeing overnight
delivery.
Copies
of
all such notices, demands or other communications shall be concurrently
delivered by the Person giving the same to the Trustee at the address specified
in the Indenture.
(f)
Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
assigns of each of the parties, including, without limitation, and without
the
need for an express assignment, subsequent Holders of Transfer Restricted
Securities;
provided,
however
,
that
this Agreement shall not inure to the benefit of or be binding upon
a
successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g)
Counterparts.
This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and
the
same agreement.
(h)
Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(i)
Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES
THEREOF.
(j)
Severability.
In
the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(k)
Entire
Agreement.
This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein with respect to the registration
rights granted by the Company and the Guarantors with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject
matter.
[[NYCORP:2621874v2:3642D:07/20/06--10:39
a]]
NY1:1660195.4
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
ISSUER
BPC
ACQUISITION CORP.
By:
________________________________
Name:
Title:
BPC
HOLDING CORPORATION
By:
________________________________
Name:
James M.
Kratochvil
Title:
Executive
Vice President,
Chief
Financial
Officer, Treasurer and
Secretary
GUARANTORS
BERRY
PLASTICS CORPORATION
AEROCON,
INC.
BERRY
IOWA CORPORATION
BERRY
PLASTICS DESIGN CORPORATION
BERRY
PLASTICS TECHNICAL SERVICES, INC.
BERRY
STERLING CORPORATION
CPI
HOLDING CORPORATION
KNIGHT
PLASTICS, INC.
PACKERWARE
CORPORATION
PESCOR,
INC.
POLY-SEAL
CORPORATION
VENTURE
PACKAGING, INC.
VENTURE
PACKAGING MIDWEST, INC.
BERRY
PLASTICS ACQUISITION CORPORATION III
BERRY
PLASTICS ACQUISITION CORPORATION V
BERRY
PLASTICS ACQUISITION CORPORATION VII
BERRY
PLASTICS ACQUISITION CORPORATION VIII
BERRY
PLASTICS ACQUISITION CORPORATION IX
BERRY
PLASTICS ACQUISITION CORPORATION X
BERRY
PLASTICS ACQUISITION CORPORATION XI
BERRY
PLASTICS ACQUISITION CORPORATION XII
BERRY
PLASTICS ACQUISITION CORPORATION XIII
KERR
GROUP, INC.
SAFFRON
ACQUISITION CORP.
SETCO,
LLC
SUN
COAST
INDUSTRIES, INC.
TUBED
PRODUCTS, LLC
CARDINAL
PACKAGING, INC.
LANDIS
PLASTICS, INC.
By:
________________________________
Name:
James M.
Kratochvil
Title: Executive
Vice
President, Chief
Financial Officer, Treasurer and Secretary of each
Guarantor
BERRY
PLASTICS ACQUISITION CORPORATION XV, LLC
By:
________________________________
Name:
James M. Kratochvil
Title:
Manager
The
foregoing Registration Rights Agreement is hereby confirmed and accepted as
of
the date first above written:
DEUTSCHE
BANK SECURITIES INC.
CREDIT
SUISSE SECURITIES (USA) LLC
CITIGROUP
GLOBAL MARKETS INC.
J.P.
MORGAN SECURITIES INC.
BANC
OF
AMERICA SECURITIES LLC
LEHMAN
BROTHERS INC.
BEAR,
STEARNS & CO.
GE
CAPITAL MARKETS, INC.
DEUTSCHE
BANK SECURITIES INC.
,
a
cting
on behalf of itself and as a Representative of the several Initial
Purchasers
,
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By:
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Name:
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Title:
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By:
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Name:
|
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Title:
|
Schedule
A
Guarantors
BERRY
PLASTICS CORPORATION,
a
Delaware corporation
AEROCON,
INC.,
a
Delaware corporation
BERRY
IOWA CORPORATION,
a
Delaware corporation
BERRY
PLASTICS DESIGN CORPORATION,
a
Delaware corporation
BERRY
PLASTICS TECHNICAL SERVICES, INC.,
a
Delaware corporation
BERRY
STERLING CORPORATION,
a
Delaware corporation
CPI
HOLDING CORPORATION,
a
Delaware corporation
KNIGHT
PLASTICS, INC.,
a
Delaware corporation
PACKERWARE
CORPORATION,
a
Delaware corporation
PESCOR,
INC.,
a
Delaware corporation
POLY-SEAL
CORPORATION,
a
Delaware corporation
VENTURE
PACKAGING, INC.,
a
Delaware corporation
VENTURE
PACKAGING MIDWEST, INC.,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION III,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION V,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION VII,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION VIII,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION IX,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION X,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION XI,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION XII,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION XIII,
a
Delaware corporation
BERRY
PLASTICS ACQUISITION CORPORATION XV, LLC,
a
Delaware limited liability company
KERR
GROUP, INC.,
a
Delaware corporation
SAFFRON
ACQUISITION CORP.,
a
Delaware corporation
SETCO,
LLC,
a
Delaware limited liability company
SUN
COAST
INDUSTRIES, INC.,
a
Delaware corporation
TUBED
PRODUCTS, LLC,
a
Delaware limited liability company
CARDINAL
PACKAGING, INC.,
an
Ohio
corporation
LANDIS
PLASTICS, INC., an Illinois corporation
dated
and
effective as of
September
20, 2006,
among
BPC
ACQUISITION CORP.,
(which
on
the Closing Date shall be merged with and into
BPC
Holding Corporation,
with
BPC
Holding Corporation surviving such merger as the issuer,
as
Issuer
each
Subsidiary of the Issuer
identified
herein,
and
WELLS
FARGO BANK, N.A
.
,
as
Collateral Agent
THIS
COLLATERAL AGREEMENT IS SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT
OF EVEN DATE HEREWITH AMONG BERRY PLASTICS GROUP, INC., THE ISSUER, CERTAIN
OF
ITS SUBSIDIARIES, CREDIT SUISSE, CAYMAN ISLANDS BRANCH, AS FIRST LIEN AGENT,
AND
WELLS FARGO BANK, N.A., AS TRUSTEE, AS SET FORTH MORE FULLY IN SECTION 7.18
HEREOF. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY
INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED
PARTIES, PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY
BY
THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO
THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT.
TABLE
OF
CONTENTS
ARTICLE
I
|
DEFINITIONS
|
2
|
Section
1.01.
|
Indenture
|
2
|
Section
1.02.
|
Other
Defined Terms
|
2
|
ARTICLE
II
|
[RESERVED]
|
8
|
ARTICLE
III
|
PLEDGE
OF SECURITIES
|
8
|
Section
3.01.
|
Pledge
|
8
|
Section
3.02.
|
Delivery
of the Pledged Collateral
|
8
|
Section
3.03.
|
Representations,
Warranties and Covenants
|
9
|
Section
3.04.
|
Registration
in Nominee Name; Denominations
|
11
|
Section
3.05.
|
Voting
Rights; Dividends and Interest, Etc.
|
11
|
ARTICLE
IV
|
SECURITY
INTERESTS IN OTHER PERSONAL PROPERTY
|
13
|
Section
4.01.
|
Security
Interest
|
13
|
Section
4.02.
|
Representations
and Warranties
|
15
|
Section
4.03.
|
Covenants
|
18
|
Section
4.04.
|
Other
Actions
|
21
|
Section
4.05.
|
Covenants
Regarding Patent, Trademark and Copyright Collateral
|
22
|
ARTICLE
V
|
REMEDIES
|
24
|
Section
5.01.
|
Remedies
Upon Default
|
24
|
Section
5.02.
|
Application
of Proceeds
|
26
|
Section
5.03.
|
Securities
Act, Etc.
|
27
|
ARTICLE
VI
|
OTHER
SECOND-LIEN OBLIGATIONS
|
27
|
Section
6.01.
|
Other
Second-Lien Obligations
|
27
|
ARTICLE
VII
|
MISCELLANEOUS
|
28
|
Section
7.01.
|
Notices
|
28
|
Section
7.02.
|
Security
Interest Absolute
|
28
|
Section
7.03.
|
Limitation
By Law
|
28
|
Section
7.04.
|
Binding
Effect; Several Agreement
|
29
|
Section
7.05.
|
Successors
and Assigns
|
29
|
Section
7.06.
|
Collateral
Agent’s Fees and Expenses; Indemnification
|
29
|
Section
7.07.
|
Collateral
Agent Appointed Attorney-in-Fact
|
30
|
Section
7.08.
|
GOVERNING
LAW
|
31
|
Section
7.09.
|
Waivers;
Amendment
|
31
|
Section
7.10.
|
WAIVER
OF JURY TRIAL
|
31
|
Section
7.11.
|
Severability
|
32
|
Section
7.12.
|
Counterparts
|
32
|
Section
7.13.
|
Headings
|
32
|
Section
7.14.
|
Jurisdiction;
Consent to Service of Process
|
32
|
Section
7.15.
|
Termination
or Release
|
33
|
Section
7.16.
|
Additional
Subsidiaries
|
33
|
Section
7.17.
|
Right
of Set-off
|
33
|
Section
7.18.
|
Subject
to Intercreditor Agreement
|
33
|
Section
7.19.
|
Senior
Collateral Documents
|
33
|
Schedules
Schedule
I
Subsidiary
Parties
Schedule
II
Debt
Securities
Schedule
III
Intellectual
Property
Schedule
IV
Filing
Offices
Exhibits
Exhibit
I
Form
of
Supplement to the Collateral Agreement
Exhibit
II
Form
of
Perfection Certificate
Exhibit
III
Form
of
Additional Secured Creditor Consent
COLLATERAL
AGREEMENT dated and effective as of September 20, 2006 (this “
Agreement
”),
among
BPC ACQUISITION CORP., a Delaware corporation, which will merge (the
“
Merger
”)
with
and into BPC Holding Corporation, a Delaware corporation, with BPC Holding
Corporation surviving such merger as the issuer (the “
Issuer
”),
upon
consummation of the Merger, each subsidiary of the Issuer identified herein
as a
party (each, a “
Subsidiary
Party
”)
and
WELLS FARGO BANK, N.A., as collateral agent (in such capacity, the “
Collateral
Agent
”)
for
the Secured Parties (as defined below).
WHEREAS,
pursuant to the terms, conditions and provisions of (a) the Indenture dated
as
of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “
Indenture
”),
among
the Issuer, the Subsidiary Parties and Wells Fargo Bank, N.A., as Trustee (the
“
Trustee
”),
and
(b) the Purchase Agreement dated as of September 15, 2006 (as amended, restated,
supplemented, waived or otherwise modified from time to time, the “
Purchase
Agreement
”),
among
BPC Acquisition Corp., the several parties named in Schedule I thereto (the
“
Initial
Purchasers
”)
and,
upon the consummation of the merger on the date hereof, BPC Holding Corporation
and the Subsidiary Parties thereto, the Issuer is issuing $525,000,000 aggregate
principal amount of its 8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes due 2014 (the “
Fixed
Rate Notes
”)
and
$225,000,000 aggregate principal amount of its Second Priority Senior Secured
Floating Rate Notes due 2014 (the “
Floating
Rate Notes
”
and,
together with (i) the Fixed Rate Notes, (ii) any and all additional Second
Priority Senior Secured Floating Rate Notes and 8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes, in each case, issued pursuant to
the
Indenture and (iii) any and all exchange notes issued pursuant to the Indenture,
collectively, the “
Notes
”),
which
will be guaranteed on a second priority senior secured basis by each of the
Subsidiary Parties;
WHEREAS,
pursuant to the Credit Agreement dated as of the date hereof (as amended,
restated, supplemented, waived or otherwise modified from time to time, the
“
Credit
Agreement
”),
among
Berry Plastics Group, Inc., a Delaware corporation (“
Holdings
”),
BPC
Acquisition Corp., which on the Closing Date (as defined in the Credit
Agreement) will merge with and into BPC Holding Corporation (which will change
its name to Berry Plastics Holding Corporation), with Berry Plastics Holding
Corporation surviving such merger as the borrower, each subsidiary of Berry
Plastics Holding Corporation, the lenders party thereto from time to time,
Credit
Suisse, Cayman Islands Branch, as administrative agent and collateral agent
for
the lenders (the “
First
Lien Agent
”),
and
the other agents party thereto, the Pledgors (as defined below) have granted
to
the First Lien Agent (as defined below) a first-priority lien and security
interest in the Collateral (as defined below);
WHEREAS,
the Issuer, the Subsidiary Parties, the Collateral Agent and the First Lien
Agent have entered into an Intercreditor Agreement dated as of the date hereof
(as amended, restated, supplemented or otherwise modified from time to time,
the
“
Intercreditor
Agreement
”),
pursuant to which the lien upon and security interest in the Collateral granted
by this Agreement are and shall be subordinated in all respects to the lien
upon
and security interest in the Collateral granted pursuant to, and subject to
the
terms and conditions of, the Senior Lender Documents (as defined
below);
WHEREAS,
each Pledgor is executing and delivering this Agreement pursuant to the terms
of
the Indenture to induce the Trustee to enter into the Indenture and pursuant
to
the terms of the Purchase Agreement to induce the Initial Purchasers to purchase
the Notes;
WHEREAS,
the Subsidiary Parties are affiliates of the Issuer, will derive substantial
benefits from the extension of credit to the Issuer pursuant to the Indenture
and are willing to execute and deliver this Agreement in order to induce the
Trustee to enter into the Indenture and to induce the Initial Purchasers to
purchase the Notes; and
WHEREAS,
each Pledgor has duly authorized the execution, delivery and performance of
this
Agreement.
NOW,
THEREFORE, for and in consideration of the premises, and of the mutual covenants
herein contained, and in order to induce the Trustee to enter into the Indenture
and the Initial Purchasers to purchase the Notes, each Pledgor and the
Collateral Agent, on behalf of itself and each Secured Party (and each of their
respective successors or assigns), hereby agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01.
Indenture
(a)
Capitalized
terms used in this Agreement and not otherwise defined herein have the
respective meanings assigned thereto in the Indenture. All terms defined in
the
New York UCC (as defined herein) and not defined in this Agreement have the
meanings specified therein. The term “instrument” shall have the meaning
specified in Article 9 of the New York UCC. If the First-Lien Termination Date
(as defined below) has occurred, a reference in this Agreement to the First
Lien
Agent shall, unless the context requires otherwise, be construed as a reference
to the Collateral Agent and this agreement shall be interpreted
accordingly.
(b)
The
rules
of construction specified in Section 1.04 of the Indenture also apply to this
Agreement.
Section
1.02.
Other
Defined Terms
.
As used in this Agreement, the following terms have the meanings specified
below:
“
Account
Debtor
”
means
any person who is or who may become obligated to any Pledgor under, with respect
to or on account of an Account, Chattel Paper, General Intangibles, Instruments
or Investment Property.
“
Additional
Secured Debt Documents
”
means
any document or instrument executed and delivered with respect to any Other
Second-Lien Obligations.
“
Additional
Secured Party Consent
”
shall
mean a completed additional secured party consent in the form of
Exhibit III
hereto.
“
Article
9 Collateral
”
has
the
meaning assigned to such term in Section 4.01.
“
Authorized
Representative
”
with
respect to any Other Second-Lien Obligations means the agent or trustee under
the agreement pursuant to which such Other Second-Lien Obligations are issued
or
incurred.
“
Collateral
”
means
Article 9 Collateral and Pledged Collateral.
“
Collateral
Agent
”
means
the party named as such in this Agreement until a successor replaces it and,
thereafter, means the successor.
“
Copyright
License
”
means
any written agreement, now or hereafter in effect, granting any right to any
Pledgor under any Copyright now or hereafter owned by any third party, and
all
rights of any Pledgor under any such agreement (including, without limitation,
any such rights that such Pledgor has the right to license).
“
Copyright
Security Agreement
”
means
a
security agreement in the form hereof or a short form hereof, in each case,
which form shall be reasonably acceptable to the Collateral Agent.
“
Copyrights
”
means
all of the following now owned or hereafter acquired by any Pledgor: (a) all
copyright rights in any work subject to the copyright laws of the United States
or any other country, whether as author, assignee, transferee or otherwise,
(b)
all registrations and applications for registration of any such copyright in
the
United States or any other country, including registrations, supplemental
registrations and pending applications for registration in the United States
Copyright Office and the right to obtain all renewals thereof, including those
listed on
Schedule
III
,
(c) all
claims for, and rights to sue for, past or future infringements of any of the
foregoing, and (d) all income, royalties, damages and payments now or hereafter
due and payable with respect to any of the foregoing, including damages and
payments for past or future infringement thereof.
“
Credit
Agreement
”
has
the
meaning assigned to such term in the recitals of this Agreement.
“
Discharge
of Senior Lender Claims
”
has
the
meaning assigned to such term in the Intercreditor Agreement.
“
Federal
Securities Laws
”
has
the
meaning assigned to such term in Section 5.03.
“
First
Lien Agent
”
has
the
meaning assigned to such term in the Intercreditor Agreement.
“
First-Lien
Termination Date
”
means,
subject to Section 5.7 of the Intercreditor Agreement, the date on which the
Discharge of Senior Lender Claims occurs;
provided
that if,
at any time after the First-Lien Termination Date, the Discharge of Senior
Lender Claims is deemed not to have occurred pursuant to Section 5.7 of the
Intercreditor Agreement, the First-Lien Termination Date shall automatically
be
deemed not to have occurred for all purposes of this Agreement (other than
with
respect to any actions taken prior to the date of incurrence and designation
of
any new Senior Lender Claims as a result of the occurrence of such first
Discharge of Senior Lender Claims).
“
General
Intangibles
”
means
all “General Intangibles” as defined in the New York UCC, including all choses
in action and causes of action and all other intangible personal property of
any
Pledgor of every kind and nature (other than Accounts) now owned or hereafter
acquired by any Pledgor, including corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Swap Agreements and other agreements),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any guarantee, claim, security interest or other security held by or granted
to any Pledgor to secure payment by an Account Debtor of any of the
Accounts.
“
Governmental
Authority
”
shall
mean any federal, state, local or foreign court or governmental agency,
authority, instrumentality or regulatory or legislative body.
“
Holder
”
has
the
meaning assigned to such term in the Indenture.
“
Indenture
”
has
the
meaning assigned to such term in the recitals of this Agreement.
“
Indenture
Documents
”
means
(a) the Indenture, the Notes, the Security Documents and this Agreement and
(b)
any other related documents or instruments executed and delivered pursuant
to
the Indenture or any Security Document, in each case, as such agreements may
be
amended, restated, supplemented or otherwise modified from time to
time.
“
Indenture
Parties
”
means
the Issuer and the Subsidiary Parties.
“
Initial
Purchasers
”
has
the
meaning assigned to such term in the recitals of this Agreement.
“
Intellectual
Property
”
means
all intellectual property of every kind and nature now owned or hereafter
acquired by any Pledgor, including, inventions, designs, Patents, Copyrights,
Trademarks, Patent Licenses, Copyright Licenses, Trademark Licenses, trade
secrets, domain names, confidential or proprietary technical and business
information, know-how, show-how or other data or information and all related
documentation.
“
Intellectual
Property Security Agreements
”
means
the Copyright Security Agreement, Patent Security Agreement and Trademark
Security Agreement.
“
Intercreditor
Agreement
”
has
the
meaning assigned to such term in the recitals of this Agreement.
“
IP
Agreements
”
means
all material Copyright Licenses, Patent Licenses, Trademark Licenses, and all
other agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any material Intellectual Property
to
which a Pledgor, now or hereafter, is a party or a beneficiary, including,
without limitation, the agreements set forth on
Schedule
III
hereto.
“
Issuer
”
has
the
meaning assigned to such term in the preliminary statement of this
Agreement.
“
Material
Adverse Effect
”
has
the
meaning assigned to such term in the Credit Agreement.
“
New
York UCC
”
means
the Uniform Commercial Code as from time to time in effect in the State of
New
York.
“
Notes
”
has
the
meaning assigned to such term in the recitals of this Agreement.
“
Obligations
”
shall
mean (i) all obligations, liabilities and indebtedness (including, without
limitation, principal, premium, interest (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of any Pledgor at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed
in
any such proceeding)) owing to the Collateral Agent, the Trustee and the holders
under the Notes, the Indenture and the Security Documents and the due
performance and compliance by the Pledgors with all of the terms, conditions
and
agreements contained in the Notes, the Indenture and in Security Documents;
(ii)
any and all sums advanced by the Collateral Agent in accordance with the
Indenture or any of the Security Documents in order to preserve the Collateral
or preserve its security interest in the Collateral; (iii) in the event of
any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of the Pledgors referred to in clause (i) above, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys’
fees and court costs; and (iv) if any Other Second-Lien Obligations are
incurred, all obligations, liabilities and indebtedness (including, without
limitation, principal, premium, interest (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of any Pledgor at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed
in
any such proceeding)) owing to any holder of Other Second-Lien Obligations
(that
has been designated as Obligations pursuant to
Section 6.01
)
under
any Additional Secured Debt Documents.
“
Patent
License
”
means
any written agreement, now or hereafter in effect, granting to any Pledgor
any
right to make, use or sell any invention covered by a Patent, now or hereafter
owned by any third party (including, without limitation, any such rights that
such Pledgor has the right to license).
“
Patent
Security Agreement
”
means
a
security agreement in the form hereof or a short form hereof, in each case,
which form shall be reasonably acceptable to the Collateral Agent.
“
Patents
”
means
all of the following now owned or hereafter acquired by any Pledgor: (a) all
letters patent of the United States or the equivalent thereof in any other
country or jurisdiction, including those listed on
Schedule
III
,
and all
applications for letters patent of the United States or the equivalent thereof
in any other country or jurisdiction, including those listed on
Schedule
III
,
(b) all
provisionals, reissues, extensions, continuations, divisions,
continuations-in-part, reexaminations or revisions thereof, and the inventions
disclosed or claimed therein, including the right to make, use, import and/or
sell the inventions disclosed or claimed therein, (c) all claims for, and rights
to sue for, past or future infringements of any of the foregoing and (d) all
income, royalties, damages and payments now or hereafter due and payable with
respect to any of the foregoing, including damages and payments for past or
future infringement thereof.
“
Perfection
Certificate
”
means
the Perfection Certificate with respect to the Pledgors substantially in the
form of
Exhibit
II
,
completed and supplemented with the schedules and attachments contemplated
thereby, and duly executed by a Financial Officer of the Issuer and the chief
legal officer of the Issuer.
“
Pledged
Collateral
”
has
the
meaning assigned to such term in Section 3.01.
“
Pledged
Debt Securities
”
has
the
meaning assigned to such term in Section 3.01.
“
Pledged
Securities
”
means
any promissory notes or other certificated securities now or hereafter included
in the Pledged Collateral, including all certificates, instruments or other
documents representing or evidencing any Pledged Collateral.
“
Pledgor
”
shall
mean the Issuer and each Subsidiary Party.
“
Purchase
Agreement
”
has
the
meaning assigned to such term in the recitals of this Agreement.
“
Secured
Parties
”
means
(a) the Collateral Agent, (b) each Holder, (c) the beneficiaries of each
indemnification obligation undertaken by any Indenture Party under any Indenture
Document, (d) the Trustee, (e) holders of Other Second-Lien Obligations and
their Authorized Representative;
provided
that
such holders and their Authorized Representative comply with
Section
6.01
hereof
and such Authorized Representative executes an Additional Secured Party Consent,
and (f) the successors and permitted assigns of each of the
foregoing.
“
Security
Documents
”
means
this Agreement, any agreement pursuant to which assets are added to the
Collateral or otherwise pledged to secure the Obligations and any other
instruments or documents entered into and delivered in connection with any
of
the foregoing, as such agreements, instruments or documents may from time to
time be amended, restated, supplemented or otherwise modified from time to
time.
“
Senior
Collateral Documents
”
has
the
meaning assigned to such term in the Intercreditor Agreement.
“
Senior
Lender Claims
”
has
the
meaning assigned to such term in the Intercreditor Agreement.
“
Senior
Lender Documents
”
has
the
meaning assigned to such term in the Intercreditor Agreement.
“
Senior
Lenders
”
has
the
meaning assigned to such term in the Intercreditor Agreement.
“
Subsidiary
Party
”
has
the
meaning assigned to such term in the preliminary statement of this Agreement,
and any Subsidiary that becomes a party hereto pursuant to Section
7.16.
“
Trademark
License
”
means
any written agreement, now or hereafter in effect, granting to any Pledgor
any
right to use any Trademark now or hereafter owned by any third party (including,
without limitation, any such rights that such Pledgor has the right to
license).
“
Trademark
Security Agreement
”
means
a
security agreement in the form hereof or a short form hereof, in each case,
which form shall be reasonably acceptable to the Collateral Agent.
“
Trademarks
”
means
all of the following now owned or hereafter acquired by any Pledgor: (a) all
trademarks, service marks, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or
business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations thereof (if any),
and all registration and recording applications filed in connection therewith,
including registrations and registration applications in the United States
Patent and Trademark Office or any similar offices in any State of the United
States or any other country or any political subdivision thereof (except for
“intent-to-use” applications for trademark or service mark registrations filed
pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until
an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d)
of
Lanham Act has been filed, to the extent, if any, that any assignment of an
“intent-to-use” application prior to such filing would violate the Lanham Act),
and all renewals thereof, including those listed on
Schedule
III
,
(b) all
goodwill associated therewith or symbolized thereby, (c) all claims for, and
rights to sue for, past or future infringements of any of the foregoing and
(d)
all income, royalties, damages and payments now or hereafter
due
and
payable with respect to any of the foregoing, including damages and payments
for
past or future infringement thereof.
“
Transactions
”
has
the
meaning assigned to such term in the Credit Agreement.
ARTICLE
II
[RESERVED]
ARTICLE
III
PLEDGE
OF
SECURITIES
Section
3.01.
Pledge.
As
security for the payment or performance when due (whether at the stated
maturity, by acceleration or otherwise), as the case may be, in full of its
Obligations, each Pledgor hereby assigns and pledges to the Collateral Agent,
its successors and permitted assigns, for the benefit of the Secured Parties,
and hereby grants to the Collateral Agent, its successors and permitted assigns,
for the benefit of the Secured Parties, a security interest in all of such
Pledgor’s right, title and interest in, to and under (a) (i) the debt
obligations listed opposite the name of such Pledgor on
Schedule
II
,
(ii)
any debt securities in the future issued to such Pledgor having, in the case
of
each instance of debt securities, an aggregate principal amount in excess of
$3.0 million, and (iii) the certificates, promissory notes and any other
instruments, if any, evidencing such debt securities (the “
Pledged
Debt Securities
”);
(b)
subject to Section 3.05 hereof, all payments of principal or interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or upon
the
conversion of, and all other proceeds received in respect of, the property
referred to in clause (a) above; (c) subject to Section 3.05 hereof, all rights
and privileges of such Pledgor with respect to the securities and other property
referred to in clauses (a) and (b) above; and (d) all proceeds of any of the
foregoing (the items referred to in clauses (a) through (d) above being
collectively referred to as the “
Pledged
Collateral
”).
TO
HAVE
AND TO HOLD, to the extent consistent with the terms of the Intercreditor
Agreement, the Pledged Collateral, together with all right, title, interest,
powers, privileges and preferences pertaining or incidental thereto, unto the
Collateral Agent, its successors and permitted assigns, for the benefit of
the
Secured Parties, forever;
subject
,
however
,
to the
terms, covenants and conditions hereinafter set forth.
Section
3.02.
Delivery
of the Pledged Collateral
(a)
Each
Pledgor agrees promptly to deliver or cause to be delivered to the First Lien
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent), for the benefit of the Secured Parties, any and all Pledged Securities
to the extent such Pledged Securities, in the case of promissory notes or other
instruments evidencing Indebtedness, are required to be delivered pursuant
to
paragraph (b) of this Section 3.02.
(b)
Each
Pledgor will cause any Indebtedness for borrowed money having an aggregate
principal amount in excess of $3.0 million (other than (i) intercompany current
liabilities incurred in the ordinary course of business in connection with
the
cash management operations of the Issuer and its Subsidiaries or (ii) to the
extent that a pledge of such promissory note or instrument would violate
applicable law) owed to such Pledgor by any person to be evidenced by a duly
executed promissory note that is pledged and delivered to the First Lien Agent
(or, if the First Lien Termination Date has occurred, the Collateral Agent),
for
the benefit of the Secured Parties, pursuant to the terms hereof. To the extent
any such promissory note is a demand note, each Pledgor party thereto agrees,
if
requested by the First Lien Agent (or, if the First Lien Termination Date has
occurred, the Collateral Agent), to immediately demand payment thereunder upon
an Event of Default specified under Section 6.01(a), (b), (e), (f) or (g) of
the
Indenture unless such demand would not be commercially reasonable or would
otherwise expose Pledgor to liability to the maker as determined by the
applicable Pledgor.
(c)
Upon
delivery to the First Lien Agent (or, if the First Lien Termination Date has
occurred, the Collateral Agent), (i) any Pledged Securities required to be
delivered pursuant to the foregoing paragraphs (a) and (b) of this Section
3.02
shall be accompanied by note powers, duly executed in blank or other instruments
of transfer reasonably satisfactory to the First Lien Agent (or, if the First
Lien Termination Date has occurred, the Collateral Agent) and by such other
instruments and documents as the First Lien Agent (or, if the First Lien
Termination Date has occurred, the Collateral Agent) may reasonably request
and
(ii) all other property comprising part of the Pledged Collateral delivered
pursuant to the terms of this Agreement shall be accompanied to the extent
necessary to perfect the security interest in or allow realization on the
Pledged Collateral by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents (including issuer
acknowledgments in respect of uncertificated securities) as the Collateral
Agent
may reasonably request. Each delivery of Pledged Securities shall be accompanied
by a schedule describing the securities, which schedule shall be attached hereto
as
Schedule
II
(or a
supplement to
Schedule
II
,
as
applicable) and made a part hereof;
provided
that
failure to attach any such schedule hereto shall not affect the validity of
such
pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.
Section
3.03.
Representations,
Warranties and Covenants
.
The Pledgors, jointly and severally, represent, warrant and covenant to
and with the Collateral Agent, for the benefit of the Secured Parties,
that:
(a)
Schedule
II
includes
all debt securities and promissory notes or instruments evidencing Indebtedness
required to be delivered pursuant to Section 3.02;
(b)
the
Pledged Securities (solely with respect to Pledged Debt Securities issued by
a
person that is not a Subsidiary of the Issuer or an Affiliate of any such
Subsidiary, to the best of each Pledgor’s knowledge) have been duly and validly
authorized and issued by the issuer thereof and solely with respect to Pledged
Debt Securities issued by a person that is not a Subsidiary of the Issuer or
an
Affiliate of any such Subsidiary, to the best of each Pledgor’s knowledge) are
legal, valid and binding obligations of the
issuers
thereof, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding at law or in equity) and an implied covenant of
good
faith and fair dealing;
(c)
except
for the security interests granted hereunder, each Pledgor (i) is and, subject
to any transfers made in compliance with the Indenture, will continue to be
the
direct owner, beneficially and of record, of the Pledged Securities indicated
on
Schedule
II
as owned
by such Pledgor, (ii) holds the same free and clear of all Liens, other than
Permitted Liens, (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or permit to exist any security interest in or other
Lien
on, the Pledged Collateral, other than pursuant to a transaction permitted
by
the Indenture and other than Permitted Liens and (iv) subject to the rights
of
such Pledgor under the Indenture Documents to dispose of Pledged Collateral,
will use commercially reasonable efforts to defend its title or interest hereto
or therein against any and all Liens (other than Permitted Liens), however
arising, of all persons;
(d)
[Intentionally
Omitted.];
(e)
each
Pledgor has the power and authority to pledge the Pledged Collateral pledged
by
it hereunder in the manner hereby done or contemplated;
(f)
other
than as set forth in the Indenture or this Agreement or the schedules thereto
or
hereto, no consent or approval of any Governmental Authority, any securities
exchange or any other person was or is necessary to the validity of the pledge
effected hereby or the transfer of the Pledged Securities upon a foreclosure
thereof (other than compliance with any securities law applicable to the
transfer of securities), in each case other than such as have been obtained
and
are in full force and effect;
(g)
by
virtue
of the execution and delivery by the Pledgors of this Agreement, when any
Pledged Securities are delivered to the First Lien Agent or the Collateral
Agent, for the benefit of the Secured Parties, in accordance with this Agreement
and a financing statement covering such Pledged Securities is filed in the
appropriate filing office, the Collateral Agent will obtain, for the benefit
of
the Secured Parties, a legal, valid and perfected lien upon and security
interest in such Pledged Securities under the New York UCC, subject only to
Permitted Liens permitted under the Indenture, as security for the payment
and
performance of the Obligations; and
(h)
each
Pledgor that is an issuer of the Pledged Collateral confirms that it has
received notice of the security interest granted hereunder and consents to
such
security interest and agrees to transfer record ownership of the Pledged
Securities issued by it in connection with any request by the Collateral
Agent.
Section
3.04.
Registration
in Nominee Name; Denominations
.
The First Lien Agent (or, if the First-Lien Termination Date has occurred,
the Collateral Agent), on behalf of the Secured Parties, shall have the right
(in its sole and absolute discretion) to hold the Pledged Securities in the
name
of the applicable Pledgor, endorsed or assigned in blank or in favor of the
First Lien Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) or, if an Event of Default shall have occurred and be
continuing, in its own name as pledgee or the name of its nominee (as pledgee
or
as sub-agent). Each Pledgor will promptly give to the First Lien Agent (or,
if
the First-Lien Termination Date has occurred, the Collateral Agent) copies
of
any notices or other communications received by it with respect to Pledged
Securities registered in the name of such Pledgor. If an Event of Default shall
have occurred and be continuing, the First Lien Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) shall have the right to
exchange the certificates representing Pledged Securities for certificates
of
smaller or larger denominations for any purpose consistent with this Agreement.
Each Pledgor shall use its commercially reasonable efforts to cause any
Indenture Party that is not a party to this Agreement to comply with a request
by the First Lien Agent (or, if the First-Lien Termination Date has occurred,
the Collateral Agent), pursuant to this Section 3.04, to exchange certificates
representing Pledged Securities of such Indenture Party for certificates of
smaller or larger denominations.
Section
3.05.
Voting
Rights; Dividends and Interest, Etc
.
(a)
Unless
and until an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have given notice to the relevant Pledgors of the
Collateral Agent’s intention to exercise its rights hereunder:
(i)
Each
Pledgor shall be entitled to exercise any and all voting and/or other consensual
rights and powers inuring to an owner of Pledged Collateral or any part thereof
for any purpose consistent with the terms of this Agreement, the Indenture
and
the other Indenture Documents;
provided
,
that,
except as expressly permitted under the Indenture, such rights and powers shall
not be exercised in any manner that could materially and adversely affect the
rights inuring to a holder of any Pledged Collateral, the rights and remedies
of
any of the Collateral Agent or the other Secured Parties under this Agreement,
the Indenture or any other Indenture Document or the ability of the Secured
Parties to exercise the same.
(ii)
The
Collateral Agent shall promptly execute and deliver to each Pledgor, or cause
to
be executed and delivered to such Pledgor, all such proxies, powers of attorney
and other instruments as such Pledgor may reasonably request for the purpose
of
enabling such Pledgor to exercise the voting and/or consensual rights and powers
it is entitled to exercise pursuant to subparagraph (i) above.
(iii)
Each
Pledgor shall be entitled to receive and retain any and all dividends, interest,
principal and other distributions paid on or distributed in respect of the
Pledged Collateral to the extent and only to the extent that such dividends,
interest, principal and other distributions are permitted by, and otherwise
paid
or distributed in accordance with, the terms and conditions of the
Indenture,
the other Indenture Documents and applicable laws;
provided
,
that
(A) any noncash dividends, interest, principal or other distributions, payments
or other consideration in respect thereof, including any rights to receive
the
same to the extent not so distributed or paid, that would constitute Pledged
Securities, to the extent such Pledgor has the rights to receive such Pledged
Securities if they were declared, distributed and paid on the date of this
Agreement, whether resulting from a subdivision, combination or reclassification
of the outstanding Equity Interests of the issuer of any Pledged Securities,
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or otherwise or
(B)
any non-cash dividends and other distributions paid or payable in respect of
any
Pledged Securities that would constitute Pledged Securities, to the extent
such
Pledgor has the rights to receive such Pledged Securities if they were declared,
distributed and paid on the date of this Agreement, in connection with a partial
or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid in surplus, shall be and become part of the
Pledged Collateral, and, if received by any Pledgor, shall not be commingled
by
such Pledgor with any of its other funds or property but shall be held separate
and apart therefrom, shall be held in trust for the benefit of the First Lien
Agent and the Collateral Agent, for the benefit of the Secured Parties, and
shall be forthwith delivered to the First Lien Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent), for the benefit of the
Secured Parties, in the same form as so received (endorsed in a manner
reasonably satisfactory to the First Lien Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent)).
(b)
Subject
to the terms of the Intercreditor Agreement, upon the occurrence and during
the
continuance of an Event of Default and after notice by the Collateral Agent
to
the Issuer of the Collateral Agent’s intention to exercise its rights hereunder,
all rights of any Pledgor to dividends, interest, principal or other
distributions that such Pledgor is authorized to receive pursuant to paragraph
(a)(iii) of this Section 3.05 shall cease, and all such rights shall thereupon
become vested, for the benefit of the Secured Parties, in the First Lien Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent)
which shall have the sole and exclusive right and authority to receive and
retain such dividends, interest, principal or other distributions. All
dividends, interest, principal or other distributions received by any Pledgor
contrary to the provisions of this Section 3.05 shall not be commingled by
such
Pledgor with any of its other funds or property but shall be held separate
and
apart therefrom, shall be held in trust for the benefit of the First Lien Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent),
for
the benefit of the Secured Parties, and shall be forthwith delivered to the
First Lien Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent), for the benefit of the Secured Parties, in the same form
as
so received (endorsed in a manner reasonably satisfactory to the First Lien
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent)). Any and all money and other property paid over to or received by the
First Lien Agent (or, if the First-Lien Termination Date has
occurred,
the Collateral Agent) pursuant to the provisions of this paragraph (b) shall
be
retained by the First Lien Agent (or, if the First-Lien Termination Date
has
occurred, the Collateral Agent) in an account to be established by the First
Lien Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent) upon receipt of such money or other property and shall be applied
in
accordance with the provisions of Section 5.02 hereof. After all Events of
Default have been cured or waived and the Issuer has delivered to the First
Lien
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent) a certificate to that effect, the First Lien Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) shall promptly repay
to
each Pledgor (without interest) all dividends, interest, principal or other
distributions that such Pledgor would otherwise be permitted to retain pursuant
to the terms of paragraph (a)(iii) of this Section 3.05 and that remain in
such
account established pursuant to this Section 3.05(b).
(c)
Subject
to the terms of the Intercreditor Agreement, upon the occurrence and during
the
continuance of an Event of Default and after notice by the Collateral Agent
to
the Issuer of the Collateral Agent’s intention to exercise its rights hereunder,
all rights of any Pledgor to exercise the voting and/or consensual rights and
powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section
3.05, and the obligations of the Collateral Agent under paragraph (a)(ii) of
this Section 3.05, shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, for the benefit of the Secured Parties, which
shall have the sole and exclusive right and authority to exercise such voting
and consensual rights and powers;
provided
that,
subject to the terms of the Intercreditor Agreement and the Indenture, unless
the Collateral Agent shall have received written objections from Holders of
at
least 25% in principal amount of the Notes then outstanding, the Collateral
Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Pledgors to exercise such
rights. After all Events of Default have been cured or waived and the Issuer
has
delivered to the Collateral Agent a certificate to that effect, each Pledgor
shall have the right to exercise the voting and/or consensual rights and powers
that such Pledgor would otherwise be entitled to exercise pursuant to the terms
of paragraph (a)(i) above.
ARTICLE
IV
SECURITY
INTERESTS IN OTHER PERSONAL PROPERTY
Section
4.01.
Security
Interest
(a)
As
security for the payment or performance when due (whether at the stated
maturity, by acceleration or otherwise), as the case may be, in full of its
Obligations, each Pledgor hereby assigns and pledges to the Collateral Agent,
its successors and permitted assigns, for the benefit of the Secured Parties,
and hereby grants to the Collateral Agent, its successors and permitted assigns,
for the benefit of the Secured Parties, a security interest (the “
Security
Interest
”)
in all
right, title and interest in or to any and all of the following assets and
properties now owned or at any time hereafter acquired by such Pledgor or in
which such Pledgor now has or at any time in the future may acquire any right,
title or interest (collectively, the “
Article
9 Collateral
”):
(i)
all
Accounts;
(ii)
all
Chattel Paper;
(iii)
all
cash
and Deposit Accounts;
(iv)
all
Documents;
(v)
all
Equipment;
(vi)
all
General Intangibles;
(vii)
all
Instruments;
(viii)
all
Inventory and all other Goods not otherwise described above;
(ix)
all
Investment Property;
(x)
all
Letter of Credit Rights;
(xi)
all
Commercial Tort Claims;
(xii)
all
other
personal property not otherwise described above (except for property
specifically excluded from any defined term used in any of the foregoing
clauses);
(xiii)
all
books
and records pertaining to the Article 9 Collateral; and
(xiv)
to
the
extent not otherwise included, all proceeds, Supporting Obligations and products
of any and all of the foregoing and all collateral security and guarantees
given
by any person with respect to any of the foregoing.
Notwithstanding
anything to the contrary in this Agreement, this Agreement shall not constitute
a grant of a security interest in (a) any vehicle covered by a certificate
of
title or ownership, whether now owned or hereafter acquired, (b) any Equity
Interests in any Subsidiary of the Issuer, (c) any assets whether now owned
or
hereafter acquired, with respect to which the Collateral and Guarantee
Requirement (as such term is defined in the Credit Agreement) or the other
paragraphs of Section 5.10 of the Credit Agreement as in effect on the date
hereof would not be required to be satisfied by reason of Section 5.10(g) of
the
Credit Agreement if hereafter acquired, (d) any Letter of Credit Rights to
the
extent any Pledgor, is required by applicable law to apply the proceeds of
a
drawing of such Letter of Credit for a specified purpose, (e) any Pledgor’s
right, title or interest in any license, contract or agreement to which such
Pledgor is a party or any of its right, title or interest thereunder to the
extent, but only to the extent, that such a grant would, under the terms of
such
license, contract or agreement, result in a breach of the terms of, or
constitute a default under, or result in the abandonment, invalidation or
unenforceability of, any license, contract or agreement to which such Pledgor
is
a party (other than to the extent that any such term would be rendered
ineffective pursuant to
Section
9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law
(including, without limitation, Title 11 of the United States Code) or
principles of equity);
provided
,
that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect or (f) any Equipment owned by any Pledgor
that is subject to a purchase money lien or a Capital Lease Obligation if the
contract or other agreement in which such Lien is granted (or the documentation
providing for such Capital Lease Obligation) prohibits or requires the consent
of any person other than the Pledgors as a condition to the creation of any
other security interest on such Equipment.
(b)
Each
Pledgor hereby irrevocably authorizes the Collateral Agent at any time and
from
time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Collateral or any
part thereof and amendments thereto that contain the information required by
Article 9 of the Uniform Commercial Code of each applicable jurisdiction for
the
filing of any financing statement or amendment, including (i) whether such
Pledgor is an organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) in the case of a financing
statement filed as a fixture filing, a sufficient description of the real
property to which such Article 9 Collateral relates and (iii) a description
of
collateral that describes such property in any other manner as the Collateral
Agent may reasonably determine is necessary or advisable to ensure the
perfection of the security interest in the Article 9 Collateral granted under
this Agreement, including describing such property as “all assets” or “all
property”. Each Pledgor agrees to provide such information to the Collateral
Agent promptly upon request.
The
Collateral Agent is further authorized to file with the United States Patent
and
Trademark Office or United States Copyright Office (or any successor office
or
any similar office in any other country) such documents as may be reasonably
necessary or advisable for the purpose of perfecting, confirming, continuing,
enforcing or protecting the Security Interest granted by each Pledgor, without
the signature of such Pledgor, and naming such Pledgor or the Pledgors as
debtors and the Collateral Agent as secured party.
(c)
The
Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Pledgor with respect to or arising out of
the
Article 9 Collateral.
Section
4.02.
Representations
and Warranties
.
The Pledgors jointly and severally represent and warrant to the Collateral
Agent and the other Secured Parties that:
(a)
Each
Pledgor has good and valid rights in and title to the Article 9 Collateral
with
respect to which it has purported to grant a Security Interest hereunder and
has
full power and authority to grant to the Collateral Agent the Security Interest
in such Article 9 Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Agreement, without the
consent or approval of any other person other than any consent or approval
that
has been obtained and is
in
full
force and effect or has otherwise been disclosed herein or in the
Indenture.
(b)
The
Perfection Certificate has been duly prepared, completed and executed and the
information set forth therein, including the exact legal name of each Pledgor,
is correct and complete, in all material respects, as of the Closing Date.
The
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations containing
a description of the Article 9 Collateral that have been prepared based upon
the
information provided to the Collateral Agent in the Perfection Certificate
for
filing in each governmental, municipal or other office specified in
Schedule
IV
hereto
(or specified by notice from the Issuer to the Collateral Agent after the
Closing Date in the case of filings, recordings or registrations required by
Section 4.10 or Section 4.11 of the Indenture) constitute all the filings,
recordings and registrations (other than filings required to be made in the
United States Patent and Trademark Office and the United States Copyright Office
in order to perfect the Security Interest in Article 9 Collateral consisting
of
United States Patents, United States registered Trademarks and United States
registered Copyrights) that are necessary to publish notice of and protect
the
validity of and to establish a legal, valid and perfected security interest
in
favor of the Collateral Agent (for the benefit of the Secured Parties) in
respect of all Article 9 Collateral in which the Security Interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration
or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or
amendments. Each Pledgor represents and warrants that fully executed
Intellectual Property Security Agreements containing a description of all
Article 9 Collateral consisting of Intellectual Property with respect to United
States Patents (and Patents for which United States registration applications
are pending), United States registered Trademarks (and Trademarks for which
United States registration applications are pending) and United States
registered Copyrights (and Copyrights for which United States registration
applications are pending) has been delivered for recording with the United
States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the
regulations thereunder, as applicable, and reasonably requested by the
Collateral Agent, to protect the validity of and to establish a legal, valid
and
perfected security interest in favor of the Collateral Agent, for the benefit
of
the Secured Parties, in respect of all Article 9 Collateral consisting of such
Intellectual Property in which a security interest may be perfected by recording
with the United States Patent and Trademark Office and the United States
Copyright Office, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary (other than such
actions as are necessary to perfect the Security Interest with respect to any
Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or
registration or application for registration thereof) acquired or
developed
after the date hereof). The Collateral Agent shall not be responsible for the
preparation of the Uniform Commercial Code financing statements and the
Intellectual Property Security Agreements and the filings thereof at any time
or
times.
(c)
The
Security Interest constitutes (i) a legal and valid security interest in all
the
Article 9 Collateral securing the payment and performance of the Obligations,
(ii) subject to the filings described in Section 4.02(b), a perfected security
interest in all Article 9 Collateral in which a security interest may be
perfected by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other
applicable law in such jurisdictions and (iii) a security interest that shall
be
perfected in all Article 9 Collateral in which a security interest may be
perfected upon the receipt and recording of the Intellectual Property Security
Agreements with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable. The Security Interest is and shall
be a
second priority Security Interest, prior to any other Lien on any of the Article
9 Collateral, other than Liens in respect of Senior Lender Claims, subject
to
Permitted Liens.
(d)
The
Article 9 Collateral is owned by the Pledgors free and clear of any Lien, other
than Permitted Liens. None of the Pledgors has filed or consented to the filing
of (i) any financing statement or analogous document under the Uniform
Commercial Code or any other applicable laws covering any Article 9 Collateral,
(ii) any assignment in which any Pledgor assigns any Article 9 Collateral or
any
security agreement or similar instrument covering any Article 9 Collateral
with
the United States Patent and Trademark Office or the United States Copyright
Office or (iii) any assignment in which any Pledgor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article
9 Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Permitted
Liens.
(e)
None
of
the Pledgors holds any Commercial Tort Claim individually in excess of $3.0
million as of the Closing Date except as indicated on the Perfection
Certificate.
(f)
Except
as
set forth in the Perfection Certificate, as of the Closing Date, all Accounts
have been originated by the Pledgors and all Inventory has been produced or
acquired by the Pledgors in the ordinary course of business.
(g)
As
to
itself and its Article 9 Collateral consisting of Intellectual Property (the
“
Intellectual
Property Collateral
”),
to
the best of each Pledgor’s knowledge:
(i)
The
Intellectual Property Collateral set forth on
Schedule
III
includes
all of the material Patents, domain names, Trademarks, Copyrights and IP
Agreements owned by such Pledgor as of the date hereof.
(ii)
The
Intellectual Property Collateral is subsisting and has not been adjudged invalid
or unenforceable in whole or part, and to the best of such Pledgor’s knowledge,
is valid and enforceable, except as would not reasonably be expected to have
a
Material Adverse Effect. Such Pledgor is not aware of any uses of any item
of
Intellectual Property Collateral that would be expected to lead to such item
becoming invalid or unenforceable, except as would not reasonably be expected
to
have a Material Adverse Effect.
(iii)
Such
Pledgor has made or performed all commercially reasonable acts, including
without limitation filings, recordings and payment of all required fees and
taxes, required to maintain and protect its interest in each and every item
of
Intellectual Property Collateral in full force and effect in the United States
and such Pledgor has used proper statutory notice in connection with its use
of
each Patent, Trademark and Copyright in the Intellectual Property Collateral,
in
each case, except to the extent that the failure to do so would not reasonably
be expected to have a Material Adverse Effect.
(iv)
With
respect to each IP Agreement, the absence, termination or violation of which
would reasonably be expected to have a Material Adverse Effect: (A) such Pledgor
has not received any notice of termination or cancellation under such IP
Agreement; (B) such Pledgor has not received any notice of a breach or default
under such IP Agreement, which breach or default has not been cured or waived;
and (C) neither such Pledgor nor any other party to such IP Agreement is in
breach or default thereof in any material respect, and no event has occurred
that, with notice or lapse of time or both, would constitute such a breach
or
default or permit termination, modification or acceleration under such IP
Agreement.
(v)
Except
as
would not reasonably be expected to have a Material Adverse Effect, no Pledgor
or Intellectual Property Collateral is subject to any outstanding consent,
settlement, decree, order, injunction, judgment or ruling restricting the use
of
any Intellectual Property Collateral or that would impair the validity or
enforceability of such Intellectual Property Collateral.
Section
4.03.
Covenants
(a)
Each
Pledgor agrees promptly to notify the Collateral Agent in writing of any change
(i) in its corporate or organization name, (ii) in its identity or type of
organization or corporate structure, (iii) in its Federal Taxpayer
Identification Number or organizational identification number or (iv) in its
jurisdiction of organization. Each Pledgor agrees promptly to provide the
Collateral Agent with certified organizational documents reflecting any of
the
changes described in the immediately preceding sentence. Each Pledgor agrees
not
to effect or permit any change referred to in the first sentence of this
paragraph (a) unless all filings have been made, or will have been made within
any applicable statutory period, under the Uniform Commercial Code or otherwise
that are required in order for the Collateral Agent to
continue
at all times following such change to have a valid, legal and perfected first
priority security interest in all the Article 9 Collateral, for the benefit
of
the Secured Parties. Each Pledgor agrees promptly to notify the Collateral
Agent
if any material portion of the Article 9 Collateral owned or held by such
Pledgor is damaged or destroyed.
(b)
Subject
to the rights of such Pledgor under the Indenture Documents to dispose of
Collateral, each Pledgor shall, at its own expense, use commercially reasonable
efforts to defend title to the Article 9 Collateral against all persons and
to
defend the Security Interest of the Collateral Agent, for the benefit of the
Secured Parties, in the Article 9 Collateral and the priority thereof against
any Lien that is not a Permitted Lien.
(c)
Each
Pledgor agrees, at its own expense, to execute, acknowledge, deliver and cause
to be duly filed all such further instruments and documents and take all such
actions that, subject to the terms of the Intercreditor Agreement and the
Indenture, the Holders of at least 25% in principal amount of the Notes then
outstanding or the Collateral Agent may from time to time reasonably request
to
better assure, preserve, protect, defend and perfect the second priority
Security Interest and the rights and remedies created hereby, including, without
limitation, the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement and the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith. If any amount payable
under or in connection with any of the Article 9 Collateral that is in excess
of
$3.0 million shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be promptly pledged to the Collateral
Agent and delivered to the First Lien Agent (or, if the First-Lien Termination
Date has occurred, the Collateral Agent), for the benefit of the Secured
Parties, duly endorsed in a manner reasonably satisfactory to the First Lien
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent).
Without
limiting the generality of the foregoing, each Pledgor hereby authorizes the
Collateral Agent, with prompt notice thereof to the Pledgors, to supplement
this
Agreement by supplementing
Schedule
III
or
adding additional schedules hereto to specifically identify any asset or item
that may constitute material Copyrights, Patents, Trademarks, Copyright
Licenses, Patent Licenses or Trademark Licenses;
provided
that any
Pledgor shall have the right, exercisable within 30 days after the Issuer has
been notified by the Collateral Agent of the specific identification of such
Article 9 Collateral, to advise the Collateral Agent in writing of any
inaccuracy of the representations and warranties made by such Pledgor hereunder
with respect to such Article 9 Collateral. Each Pledgor agrees that it will
use
its commercially reasonable efforts to take such action as shall be necessary
in
order that all representations and warranties hereunder shall be true and
correct with respect to such Article 9 Collateral within 30 days after the
date
it has been notified by Collateral Agent of the specific identification of
such
Article 9 Collateral.
(d)
Subject
to the terms of the Intercreditor Agreement, after the occurrence of an Event
of
Default and during the continuance thereof, the Collateral Agent shall have
the
right to verify under reasonable procedures the validity, amount, quality,
quantity,
value,
condition and status of, or any other matter relating to, the Article 9
Collateral, including, in the case of Accounts or Article 9 Collateral in
the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such
a
verification. The Collateral Agent shall have the right to share any information
it gains from such inspection or verification with any Secured
Party.
(e)
Subject
to the terms of the Intercreditor Agreement, at its option, the Collateral
Agent
may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Article
9
Collateral and not a Permitted Lien, and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Pledgor fails to
do
so as required by the Indenture or this Agreement, and each Pledgor jointly
and
severally agrees to reimburse the Collateral Agent on demand for any reasonable
payment made or any reasonable expense incurred by the Collateral Agent pursuant
to the foregoing authorization;
provided
,
however
,
that
nothing in this Section 4.03(e) shall be interpreted as excusing any Pledgor
from the performance of, or imposing any obligation on the Collateral Agent
or
any Secured Party to cure or perform, any covenants or other promises of any
Pledgor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Indenture Documents.
(f)
Each
Pledgor (rather than the Collateral Agent or any Secured Party) shall remain
liable for the observance and performance of all the conditions and obligations
to be observed and performed by it under each contract, agreement or instrument
relating to the Article 9 Collateral and each Pledgor jointly and severally
agrees to indemnify and hold harmless the Collateral Agent and the Secured
Parties from and against any and all liability for such
performance.
(g)
None
of
the Pledgors shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral, except as expressly permitted by the
Indenture and the other provisions hereof. None of the Pledgors shall make
or
permit to be made any transfer of the Article 9 Collateral and each Pledgor
shall remain at all times in possession of the Article 9 Collateral owned by
it,
except as permitted by the Indenture and the other provisions
hereof.
(h)
None
of
the Pledgors will, without the Collateral Agent’s prior written consent (which
consent shall not be unreasonably withheld), grant any extension of the time
of
payment of any Accounts included in the Article 9 Collateral, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with prudent business practices.
(i)
Each
Pledgor irrevocably makes, constitutes and appoints the First Lien Agent (or,
if
the First-Lien Termination Date has occurred, the Collateral Agent) (and all
officers, employees or agents designated by the First Lien Agent (or, if the
First-Lien Termination
Date
has
occurred, the Collateral Agent)) as such Pledgor’s true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Pledgor
on
any check, draft, instrument or other item of payment for the proceeds of
such
policies of insurance and for making all determinations and decisions with
respect thereto. In the event that any Pledgor at any time or times shall
fail
to obtain or maintain any of the policies of insurance required hereby or
to pay
any premium in whole or part relating thereto, the First Lien Agent (or,
if the
First-Lien Termination Date has occurred, the Collateral Agent) may, without
waiving or releasing any obligation or liability of the Pledgors hereunder
or
any Event of Default, in its sole discretion, obtain and maintain such policies
of insurance and pay such premium and take any other actions with respect
thereto as the First Lien Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent) reasonably deems advisable. All sums disbursed
by the First Lien Agent (or, if the First-Lien Termination Date has occurred,
the Collateral Agent) in connection with this Section 4.03(i), including
reasonable attorneys’ fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Pledgors to the First Lien
Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent)
and
shall be additional Obligations secured hereby.
(j)
In the
event any Pledgor shall create any additional security interest upon any
property or assets (other than any assets excluded pursuant to clause (b) of
the
last paragraph of Section 4.01(a)) to secure any Senior Lender Claims it shall
concurrently grant a security interest (second in priority only to Liens in
respect of Senior Lender Claims subject to Permitted Liens) upon such property
as security for the Obligations; provided that if granting a security interest
in such property requires the consent of a third party, such Pledgor shall
use
commercially reasonable efforts to obtain such consent, and if such third party
shall not consent to the granting of such security interest after the use
of such commercially reasonable efforts, such Pledgor shall not be required
to
provide such security interest.
(k)
In
the
event any Pledgor shall undertake any actions to perfect or protect any liens
on
any assets pledged in connection with the Credit Agreement or other Senior
Lender Claims, such Pledgor shall also at the same time undertake such actions
with respect to the Collateral for the benefit of the Collateral Agent
without request by the Collateral Agent.
Section
4.04.
Other
Actions
.
In order to further ensure the attachment, perfection and priority of, and
the ability of the Collateral Agent to enforce, for the benefit of the Secured
Parties, the Collateral Agent’s security interest in the Article 9 Collateral,
each Pledgor agrees, in each case at such Pledgor’s own expense, to take the
following actions with respect to the following Article 9
Collateral:
(a)
Instruments
and Tangible Chattel Paper
.
If any
Pledgor shall at any time hold or acquire any Instruments (other than checks
received and processed in the ordinary course of business) or Tangible Chattel
Paper evidencing an amount in excess of $3.0 million, such Pledgor shall
forthwith endorse, assign and deliver the same to the First Lien Agent (or,
if
the First-Lien
Termination
Date has occurred, the Collateral Agent), accompanied by such instruments of
transfer or assignment duly executed in blank as the First Lien Agent (or,
if
the First-Lien Termination Date has occurred, the Collateral Agent) may from
time to time reasonably request.
(i)
(b)
Investment
Property
.
Except
to the extent otherwise provided in
Article
III
,
if any
Pledgor shall at any time hold or acquire any Certificated Security constituting
Pledged Collateral or Article 9 Collateral, such Pledgor shall forthwith
endorse, assign and deliver the same to the First Lien Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent), accompanied
by
such instruments of transfer or assignment duly executed in blank as the First
Lien Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent) may from time to time reasonably specify. If any security of a domestic
issuer now owned or hereafter acquired by any Pledgor is uncertificated and
is
issued to such Pledgor or its nominee directly by the issuer thereof, such
Pledgor shall promptly notify the First Lien Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) of such uncertificated
securities and (a) upon the First Lien Agent’s (or, if the First-Lien
Termination Date has occurred, the Collateral Agent’s) reasonable request and
(b) upon the occurrence and during the continuance of an Event of Default,
such
Pledgor shall, pursuant to an agreement in form and substance reasonably
satisfactory to the First Lien Agent (or, if the First-Lien Termination Date
has
occurred, the Collateral Agent), either (i) cause the issuer to agree to comply
with instructions from the First Lien Agent (or, if the First-Lien Termination
Date has occurred, the Collateral Agent) as to such security, without further
consent of any Pledgor or such nominee, or (ii) cause the issuer to register
the
First Lien Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) as the registered owner of such security.
(c)
Commercial
Tort Claims
.
If any
Pledgor shall at any time hold or acquire a Commercial Tort Claim in an amount
reasonably estimated to exceed $2.0 million, such Pledgor shall promptly notify
the Collateral Agent thereof in a writing signed by such Pledgor, including
a
summary description of such claim, and grant to the Collateral Agent in writing
a security interest therein and in the proceeds thereof, all under the terms
and
provisions of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Collateral Agent.
Section
4.05.
Covenants
Regarding Patent, Trademark and Copyright Collateral
.
(a)
Each
Pledgor agrees that it will not knowingly do any act or omit to do any act
(and
will exercise commercially reasonable efforts to prevent its licensees from
doing any act or omitting to do any act) whereby any Patent that is material
to
the normal conduct of such Pledgor’s business may become prematurely
invalidated, abandoned, lapsed or dedicated to the public, and agrees that
it
shall take commercially reasonable steps with respect to any material products
covered by any such Patent as necessary and sufficient to establish and preserve
its rights under applicable patent laws.
(b)
Each
Pledgor will, and will use its commercially reasonable efforts to cause its
licensees or its sublicensees to, for each material Trademark necessary to
the
normal conduct of such Pledgor’s business, (i) maintain such Trademark in full
force free from any adjudication of abandonment or invalidity for non-use,
(ii)
maintain the quality of products and services offered under such Trademark,
(iii) display such Trademark with notice of federal or foreign registration
or
claim of trademark or service mark as required under applicable law and (iv)
not
knowingly use or knowingly permit its licensees’ use of such Trademark in
violation of any third-party rights.
(c)
Each
Pledgor will, and will use its commercially reasonable efforts to cause its
licensees or its sublicensees to, for each work covered by a material Copyright
necessary to the normal conduct of such Pledgor’s business that it publishes,
displays and distributes, use a copyright notice as required under applicable
copyright laws.
(d)
Each
Pledgor shall notify the First Lien Agent (or, if the First-Lien Termination
Date has occurred, the Collateral Agent) promptly if it knows that any Patent,
Trademark or Copyright material to the normal conduct of such Pledgor’s business
may imminently become abandoned, lapsed or dedicated to the public, or of any
materially adverse determination or development, excluding office actions and
similar determinations or developments in the United States Patent and Trademark
Office, United States Copyright Office, any court or any similar office of
any
country, regarding such Pledgor’s ownership of any such material Patent,
Trademark or Copyright or its right to register or to maintain the
same.
(e)
Each
Pledgor, either itself or through any agent, employee, licensee or designee,
shall (i) inform the Collateral Agent on an annual basis of each application
by
itself, or through any agent, employee, licensee or designee, for any Patent
with the United States Patent and Trademark Office and each registration of
any
Trademark or Copyright with the United States Patent and Trademark Office,
the
United States Copyright Office or any comparable office or agency in any other
country filed during the preceding twelve-month period, and (ii) execute and
deliver any and all agreements, instruments, documents and papers necessary
or
as the Collateral Agent may otherwise reasonably request to evidence the
Collateral Agent’s security interest in such Patent, Trademark or Copyright and
the perfection thereof.
(f)
Each
Pledgor shall exercise its reasonable business judgment consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any comparable office or agency in any
other country with respect to maintaining and pursuing each application relating
to any Patent, Trademark and/or Copyright (and obtaining the relevant grant
or
registration) material to the normal conduct of such Pledgor’s business and to
maintain (i) each issued Patent and (ii) the registrations of each Trademark
and
each Copyright that is material to the normal conduct of such Pledgor’s
business, including, when applicable and necessary in such Pledgor’s reasonable
business judgment, timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
any
Pledgor believes necessary in its reasonable business judgment, to initiate
opposition, interference and cancellation proceedings against third
parties.
(g)
In
the
event that any Pledgor knows or has reason to know that any Article 9
Collateral consisting of a Patent, Trademark or Copyright material to the normal
conduct of its business has been or is about to be materially infringed,
misappropriated or diluted by a third party, such Pledgor shall promptly notify
the First Lien Agent (or, if the First-Lien Termination Date has occurred,
the
Collateral Agent) and shall, if such Pledgor deems it necessary in its
reasonable business judgment, promptly sue and recover any and all damages,
and
take such other actions as are reasonably appropriate under the
circumstances.
ARTICLE
V
REMEDIES
Section
5.01.
Remedies
Upon Default
.
Subject to the terms of the Intercreditor Agreement, upon the occurrence
and during the continuance of an Event of Default, each Pledgor agrees to
deliver each item of Collateral to the First Lien Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) on demand, and it is agreed
that the Collateral Agent shall have the right to take any of or all the
following actions at the same or different times: (a) with respect to any
Article 9 Collateral consisting of Intellectual Property, on demand, to cause
the Security Interest to become an assignment, transfer and conveyance of any
of
or all such Article 9 Collateral by the applicable Pledgors to the Collateral
Agent or to license or sublicense, whether general, special or otherwise, and
whether on an exclusive or a nonexclusive basis, any such Article 9 Collateral
throughout the world on such terms and conditions and in such manner as the
Collateral Agent shall determine (other than in violation of any then-existing
licensing arrangements to the extent that waivers thereunder cannot be obtained
with the use of commercially reasonable efforts, which each Pledgor hereby
agrees to use) and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Article 9 Collateral
and without liability for trespass to the applicable Pledgor to enter any
premises where the Article 9 Collateral may be located for the purpose of taking
possession of or removing the Article 9 Collateral and, generally, to exercise
any and all rights afforded to a secured party under the applicable Uniform
Commercial Code or other applicable law or in equity. Without limiting the
generality of the foregoing, each Pledgor agrees that the Collateral Agent
shall
have the right, subject to the mandatory requirements of applicable law, to
sell
or otherwise dispose of all or any part of the Collateral at a public or private
sale or at any broker’s board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized in connection with any sale of a
security (if it deems it advisable to do so) pursuant to the foregoing to
restrict the prospective bidders or purchasers to persons who represent and
agree that they are purchasing such security for their own account, for
investment, and not with a view to the distribution or sale thereof. Upon
consummation of any such sale of Collateral pursuant to this Section 5.01 the
Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser
at
any such sale shall hold the property sold absolutely, free from any claim
or
right on the part of any Pledgor, and each Pledgor hereby waives and releases
(to the extent permitted by law) all rights of redemption, stay, valuation
and
appraisal that such Pledgor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted.
To
the
extent any notice is required by applicable law, the Collateral Agent shall
give
the applicable Pledgors 10 Business Days’ written notice (which each Pledgor
agrees is reasonable notice within the meaning of Section 9-611 of the New
York
UCC or its equivalent in other jurisdictions) of the Collateral Agent’s
intention to make any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale
at
a broker’s board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice (if any) of such sale. At any such sale, the Collateral, or the portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of
any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and
place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In the case of any sale of all
or
any part of the Collateral made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid
by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in the event that any such purchaser or purchasers shall fail
to
take up and pay for the Collateral so sold and, in the case of any such failure,
such Collateral may be sold again upon notice given in accordance with
provisions above. At any public (or, to the extent permitted by law, private)
sale made pursuant to this Section 5.01, any Secured Party may bid for or
purchase for cash, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Pledgor (all such
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and such Secured Party
may,
upon compliance with the terms of sale, hold, retain and dispose of such
property in accordance with Section 5.02 hereof without further accountability
to any Pledgor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Pledgor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall
have
been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent may proceed
by
a suit or suits at law or in equity to foreclose under this Agreement and to
sell the Collateral or any portion thereof pursuant to a judgment or decree
of a
court or courts having competent jurisdiction or pursuant to a proceeding by
a
court-appointed receiver. Any sale pursuant to the provisions of this Section
5.01 shall be deemed to conform to the commercially reasonable standards as
provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.
Section
5.02.
Application
of Proceeds
.
The Collateral Agent shall promptly apply the proceeds, moneys or balances
of any collection or sale of Collateral, as well as any Collateral consisting
of
cash, as follows:
FIRST,
to
the payment of all costs and expenses incurred by the Collateral Agent or the
Trustee in connection with such collection or sale or otherwise in connection
with this Agreement, any other Indenture Document or any of the Obligations,
including without limitation all court costs and the fees and expenses of its
agents and legal counsel, the repayment of all advances made by the Collateral
Agent or the Trustee hereunder or under any other Indenture Document on behalf
of any Pledgor, any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Indenture Document,
and all other fees, indemnities and other amounts owing or reimbursable to
the
Collateral Agent or the Trustee under any Indenture Document in its capacity
as
such;
SECOND,
to interest due in respect of the Obligations which such Collateral
secures;
THIRD,
to
the principal of the Obligations which such Collateral secured; and
FOURTH,
to the Issuer, its successors or assigns, or as a court of competent
jurisdiction may otherwise direct (provided that the Issuer and Pledgors may
separately allocate such excess proceeds among themselves after delivery by
the
Collateral Agent to the Issuer).
The
Collateral Agent shall have absolute discretion as to the time of application
of
any such proceeds, moneys or balances in accordance with this Agreement. Upon
the request of the Collateral Agent prior to any distribution under this
Section
5.02
,
each
Authorized Representative shall provide to the Collateral Agent certificates,
in
form and substance reasonably satisfactory to the Collateral Agent, setting
forth the respective amounts referred to in this
Section
5.02
,
that
each applicable Secured Party or their Authorized Representative believes it
is
entitled to receive, and the Collateral Agent shall be fully entitled to rely
on
such certificates. Upon any sale of Collateral by the Collateral Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the purchase money by the Collateral Agent or of
the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall
not
be obligated to see to the application of any part of the purchase money paid
over to the Collateral Agent or such officer or be answerable in any way for
the
misapplication thereof. If, despite the provisions of this Agreement, any
Secured Party shall receive any payment or other recovery in excess of its
portion of payments on account of the Obligations to which it is then entitled
in accordance with this Agreement, such Secured Party shall hold such payment
or
other recovery in trust for the benefit of all Secured Parties hereunder for
distribution in accordance with this
Section
5.02
.
Section
5.03.
Securities
Act, Etc
.
In
view
of the position of the Pledgors in relation to the Pledged Collateral, or
because of other current or future circumstances, a question may arise under
the
Securities Act of 1933, as now or hereafter in effect, or any similar federal
statute hereafter enacted analogous in purpose or effect (such Act and any
such
similar statute as from time to time in effect being called the “
Federal
Securities Laws
”)
with
respect to any disposition of the Pledged Collateral permitted hereunder. Each
Pledgor understands that compliance with the Federal Securities Laws might
very
strictly limit the course of conduct of the Collateral Agent if the Collateral
Agent were to attempt to dispose of all or any part of the Pledged Collateral,
and might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Collateral could dispose of the same. Similarly,
there
may be other legal restrictions or limitations affecting the Collateral Agent
in
any attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose
or
effect. Each Pledgor acknowledges and agrees that in light of such restrictions
and limitations, the Collateral Agent, in its sole and absolute discretion,
(a)
may proceed to make such a sale whether or not a registration statement for
the
purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws or, to the extent applicable, Blue
Sky
or other state securities laws and (b) may approach and negotiate with a single
potential purchaser to effect such sale. Each Pledgor acknowledges and agrees
that any such sale might result in prices and other terms less favorable to
the
seller than if such sale were a public sale without such restrictions. In the
event of any such sale, the Collateral Agent shall incur no responsibility
or
liability for selling all or any part of the Pledged Collateral at a price
that
the Collateral Agent, in its sole and absolute discretion, may in good faith
deem reasonable under the circumstances, notwithstanding the possibility that
a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 5.03 will apply notwithstanding
the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent
sells.
ARTICLE
VI
OTHER
SECOND-LIEN OBLIGATIONS
Section
6.01.
Other
Second-Lien Obligations
.
On or after the Closing Date and so long as permitted by the Indenture,
the Issuer may from time to time designate Other Second-Lien Obligations
permitted to be Incurred under the Indenture and to be secured by a Lien on
the
Collateral as Obligations hereunder by delivering to the Collateral Agent (a)
a
certificate signed by an Officer of the Issuer (i) identifying Other Second-Lien
Obligations so designated and the aggregate principal amount or face amount
thereof, stating that such Other Second-Lien Obligations are designated as
Obligation for purposes hereof, (ii) representing that such designation of
such
obligations as Obligation complies with the terms of each of the Indenture
Documents and Additional Secured Debt Documents and (iii) specifying the name
and address of the Authorized Representative for the holders of such Other
Second-Lien Obligations, (b) a fully executed Additional Secured Party Consent
(in the form attached as Exhibit III hereto); and (c) an opinion of counsel
to
the effect that the designation of such
obligations
as “Other Second-Lien Obligations” is in compliance with the terms of the
Indenture and the Notes. The Collateral Agent agrees that upon the satisfaction
of all conditions set forth in the preceding sentence, the Collateral Agent
shall act as agent under and subject to the terms of this Agreement for the
benefit of all Secured Parties, including without limitation, any secured
parties that hold any such Other Second-Lien Obligations, and the Authorized
Representative for the holders of such Other Second-Lien Obligations agrees
to
the appointment, and acceptance of the appointment, of the Collateral Agent
as
agent for the holders of such Other Second-Lien Obligations as set forth
in each
Additional Secured Party Consent and agrees, on behalf of itself and each
secured party it represents, to be bound by this Agreement.
ARTICLE
VII
MISCELLANEOUS
Section
7.01.
Notices
.
All communications and notices hereunder shall (except as otherwise permitted
herein) be in writing and given as provided in Section 13.02 of the Indenture.
All communications and notices hereunder to any Subsidiary Party shall be given
to it in care of the Issuer, with such notice to be given as provided in Section
13.02 of the Indenture.
Section
7.02.
Security
Interest Absolute
.
All rights of the Collateral Agent hereunder, the Security Interest in the
Article 9 Collateral, the security interest in the Pledged Collateral and all
obligations of each Pledgor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Indenture,
any
other Indenture Document, any agreement with respect to any of the Obligations
or any other agreement or instrument relating to any of the foregoing, (b)
any
change in the time, manner or place of payment of, or in any other term of,
all
or any of the Obligations, or any other amendment or waiver of or any consent
to
any departure from the Indenture, any other Indenture Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of any
Lien
on other collateral, or any release or amendment or waiver of or consent under
or departure from any guarantee, securing or guaranteeing all or any of the
Obligations or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of the
Obligations or this Agreement (other than a defense of payment or
performance).
Section
7.03.
Limitation
By Law
.
All rights, remedies and powers provided in this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Agreement are
intended to be subject to all applicable mandatory provisions of law that may
be
controlling and to be limited to the extent necessary so that they shall not
render this Agreement invalid, unenforceable, in whole or in part, or not
entitled to be recorded, registered or filed under the provisions of any
applicable law.
Section
7.04.
Binding
Effect; Several Agreement
.
This Agreement shall become effective as to any party to this Agreement
when a counterpart hereof executed on behalf of such party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding
upon
such party and the Collateral Agent and their
respective
permitted successors and assigns, and shall inure to the benefit of such
party,
the Collateral Agent and the other Secured Parties and their respective
permitted successors and assigns, except that no party shall have the right
to
assign or transfer its rights or obligations hereunder or any interest herein
or
in the Collateral (and any such assignment or transfer shall be void) except
as
expressly contemplated by this Agreement or the Indenture. This Agreement
shall
be construed as a separate agreement with respect to each party and may be
amended, modified, supplemented, waived or released with respect to any party
without the approval of any other party and without affecting the obligations
of
any other party hereunder.
Section
7.05.
Successors
and Assigns
.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any
Pledgor or the Collateral Agent that are contained in this Agreement shall
bind
and inure to the benefit of their respective permitted successors and assigns;
provided
that no
Pledgor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Collateral Agent.
Written notice of resignation by the Collateral Agent as trustee pursuant to
the
Indenture shall also constitute notice of resignation as the Collateral Agent
under this Agreement. Upon the acceptance of any appointment as the trustee
under the Indenture by a successor Collateral Agent, that successor trustee
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent pursuant
hereto.
Section
7.06.
Collateral
Agent’s Fees and Expenses; Indemnification
(a)
Subject
to the terms of the Intercreditor Agreement, each Pledgor jointly and severally
agrees to pay upon demand to the Collateral Agent the amount of any and all
reasonable expenses, including the reasonable fees, disbursements and other
charges of its counsel and of any experts or agents, which the Collateral Agent
may incur in connection with (i) the administration of this Agreement, (ii)
the
custody or preservation of, or the sale of, collection from or other realization
upon any of the Collateral, (iii) the exercise, enforcement or protection of
any
rights of the Collateral Agent hereunder or (iv) the failure of any Pledgor
to
perform or observe any of the provisions hereof applicable to it.
(b)
Without
limitation of its indemnification obligations under the other Indenture
Documents, each Pledgor jointly and severally agrees to indemnify the Collateral
Agent, the Trustee, the Holders and each Affiliate of the foregoing Persons
(each such Person being called an “
Indemnitee
”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of, (i) the execution,
delivery or performance of this Agreement or any other Indenture Document or
any
agreement or instrument contemplated hereby or thereby, the performance by
the
parties hereto and thereto of their respective obligations thereunder or the
consummation of the Transactions and other transactions contemplated hereby,
(ii) the use of proceeds of the Notes or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, or to the
Collateral, whether or not any Indemnitee is a party
thereto;
provided
that
such indemnity shall not, as to any Indemnitee, be available to the extent
that
such losses, claims, damages, liabilities or related expenses are determined
by
a court of competent jurisdiction by final and nonappealable judgment to
have
resulted from the gross negligence or willful misconduct of such
Indemnitee.
(c)
Any
such
amounts payable as provided hereunder shall be additional Obligations secured
hereby and by the other Security Documents. The provisions of this Section
7.06
shall remain operative and in full force and effect regardless of the
termination of this Agreement or any other Indenture Document, the consummation
of the transactions contemplated hereby, the repayment of any of the
Obligations, the invalidity or unenforceability of any term or provision of
this
Agreement or any other Indenture Document, or any investigation made by or
on
behalf of the Collateral Agent or any other Secured Party. All amounts due
under
this Section 7.06 shall be payable on written demand therefor.
Section
7.07.
Collateral
Agent Appointed Attorney-in-Fact
.
Subject to the terms of the Intercreditor Agreement, each Pledgor hereby
appoints the Collateral Agent the attorney-in-fact of such Pledgor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. The Collateral Agent shall have the right, upon
the occurrence and during the continuance of an Event of Default, with full
power of substitution either in the Collateral Agent’s name or in the name of
such Pledgor, (a) to receive, endorse, assign or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Collateral or any part thereof; (b) to demand, collect, receive payment
of, give receipt for and give discharges and releases of all or any of the
Collateral; (c) to ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue
of
any Collateral; (d) to sign the name of any Pledgor on any invoice or bill
of
lading relating to any of the Collateral; (e) to send verifications of Accounts
to any Account Debtor; (f) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce
any
rights in respect of any Collateral; (g) to settle, compromise, compound, adjust
or defend any actions, suits or proceedings relating to all or any of the
Collateral; and (h) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the Collateral, and to
do
all other acts and things necessary to carry out the purposes of this Agreement,
as fully and completely as though the Collateral Agent were the absolute owner
of the Collateral for all purposes;
provided
,
that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present
or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or
any
property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Pledgor
for
any act or failure to act hereunder, except for their own gross negligence
or
willful misconduct.
Section
7.08.
GOVERNING
LAW
.
THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF
NEW YORK.
Section
7.09.
Waivers;
Amendment
(a)
No
failure or delay by the Collateral Agent or any Secured Party in exercising
any
right, power or remedy hereunder or under any other Indenture Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy, or any abandonment or discontinuance of steps
to
enforce such a right, power or remedy, preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The rights, powers
and remedies of the Collateral Agent and the Secured Parties hereunder and
under
the other Indenture Documents are cumulative and are not exclusive of any
rights, powers or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Indenture Party
therefrom shall in any event be effective unless the same shall be permitted
by
paragraph (b) of this Section 7.09, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
No
notice or demand on any Indenture Party in any case shall entitle any Indenture
Party to any other or further notice or demand in similar or other
circumstances.
(b)
Neither
this Agreement nor the Intercreditor Agreement or any provision hereof may
be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Indenture Party or
Indenture Parties with respect to which such waiver, amendment or modification
is to apply, subject to the limitations in the Indenture and the Intercreditor
Agreement or as otherwise provided in the Indenture or the Intercreditor
Agreement.
Section
7.10.
WAIVER
OF JURY TRIAL
.
EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY
OTHER INDENTURE DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
7.10.
Section
7.11.
Severability
.
In the event any one or more of the provisions contained in this Agreement
or in any other Indenture Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that
of the invalid, illegal or unenforceable provisions.
Section
7.12.
Counterparts
.
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section
7.04 hereof. Delivery of an executed counterpart to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed
original.
Section
7.13.
Headings
.
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section
7.14.
Jurisdiction;
Consent to Service of Process
(a)
Each
party to this Agreement hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York
City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Indenture Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any
such action or proceeding may be heard and determined in such New York State
or,
to the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall
be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law. Nothing in this Agreement shall affect
any
right that the Collateral Agent or any Secured Party may otherwise have to
bring
any action or proceeding relating to this Agreement or any other Indenture
Document against any Pledgor, or its properties, in the courts of any
jurisdiction.
(b)
Each
party to this Agreement hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Indenture Document
in
any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of
an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
Section
7.15.
Termination
or Release
.
This Agreement, the Security Interest and all other security interests
granted hereby shall terminate only in accordance with the Indenture and
consistent with the Intercreditor Agreement.
Section
7.16.
Additional
Subsidiaries
.
If, pursuant to the Indenture, the Issuer is required to cause any
Subsidiary that is not a Subsidiary Guarantor to become a Subsidiary Party
to
guarantee the Obligations of the Issuer under the Indenture, upon execution
and
delivery by the Collateral Agent and such Subsidiary of an instrument in the
form of
Exhibit
I
hereto,
such Subsidiary shall become a Subsidiary Party hereunder with the same force
and effect as if originally named as a Subsidiary Party herein. The execution
and delivery of any such instrument shall not require the consent of any other
party to this Agreement. The rights and obligations of each party to this
Agreement shall remain in full force and effect notwithstanding the addition
of
any new party to this Agreement.
Section
7.17.
Right
of Set-off
.
If an Event of Default shall have occurred and be continuing, each Secured
Party is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set-off and apply any and all deposits (general
or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Secured Party to or for the credit or
the
account of any party to this Agreement against any of and all the obligations
of
such party now or hereafter existing under this Agreement owed to such Secured
Party, irrespective of whether or not such Secured Party shall have made any
demand under this Agreement and although such obligations may be unmatured.
The
rights of each Secured Party under this Section 7.17 are in addition to other
rights and remedies (including other rights of set-off) that such Secured Party
may have. Any amounts received by any Holder pursuant to this Section 7.17
should be applied pursuant to Section 5.02.
Section
7.18.
Subject
to Intercreditor Agreement
.
Notwithstanding anything herein to the contrary, (i) the liens and
security interests granted to the Collateral Agent pursuant to this Agreement
are expressly subject and subordinate to the liens and security interests
granted to (a) the First Lien Agent pursuant to the Credit Agreement, or (b)
any
agent or trustee for any other Senior Lenders and (ii) the exercise of any
right
or remedy by the Collateral Agent hereunder is subject to the limitations and
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and the terms of this Agreement, the
terms of the Intercreditor Agreement shall govern.
Section
7.19.
Senior
Collateral Documents
.
The Collateral Agent acknowledges and agrees, on behalf of itself and any
Secured Party, that any provision of this Agreement to the contrary
notwithstanding, until the First-Lien Termination Date, the Indenture Parties
shall not be required to act or refrain from acting pursuant to the Security
Documents or with respect to any Collateral on which the First Lien Agent has
a
Lien superior in priority to the Collateral Agent’s Lien thereon in any manner
that would result in a default under the terms and provisions of the Senior
Collateral Documents.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
day and year first above written.
BPC
ACQUISITION CORP.
By:
___________________________
Name:
Title:
Upon
consummation of the Merger:
BPC
HOLDING CORPORATION
BERRY
PLASTICS CORPORATION
AEROCON,
INC.
BERRY
IOWA CORPORATION
BERRY
PLASTICS DESIGN CORPORATION
BERRY
STERLING CORPORATION
BERRY
PLASTICS TECHNICAL SERVICES, INC.
CARDINAL
PACKAGING, INC.
CPI
HOLDING CORPORATION
KNIGHT
PLASTICS, INC.
LANDIS
PLASTICS, INC.
PACKERWARE
CORPORATION
PESCOR,
INC.
POLY-SEAL
CORPORATION
VENTURE
PACKAGING, INC.
VENTURE
PACKAGING MIDWEST, INC.
BERRY
PLASTICS ACQUISITION CORPORATION III
BERRY
PLASTICS ACQUISITION CORPORATION V
BERRY
PLASTICS ACQUISITION CORPORATION VII
BERRY
PLASTICS ACQUISITION CORPORATION VIII
BERRY
PLASTICS ACQUISITION CORPORATION IX
BERRY
PLASTICS ACQUISITION CORPORATION X
BERRY
PLASTICS ACQUISITION CORPORATION XI
BERRY
PLASTICS ACQUISITION CORPORATION XII
BERRY
PLASTICS ACQUISITION CORPORATION XIII
KERR
GROUP, INC.
SAFFRON
ACQUISITION CORP.
SUN
COAST
INDUSTRIES, INC.
BERRY
PLASTICS ACQUISITION CORPORATION XV, LLC
SETCO,
LLC
TUBED
PRODUCTS, LLC
By:
____________________________________
Name:
Title:
WELLS
FARGO BANK, N.A.,
as
Collateral Agent
By:
___________________________
Name:
Title:
Exhibit
I
to
Collateral Agreement
SUPPLEMENT
NO. ______ dated as of _____________ (this “
Supplement
”),
to
the Collateral Agreement dated as of September 20, 2006 (the “
Collateral
Agreement
”),
among
BPC HOLDING CORPORATION (as the surviving entity of the merger on Closing Date
between BPC Acquisition Corp. and BPC Holding Corporaiton), a Delaware
corporation, (the “
Issuer
”),
each
subsidiary of the Issuer identified herein as a party (each, a “
Subsidiary
Party
”)
and
WELLS FARGO BANK, N.A., as collateral agent (in such capacity, the “
Collateral
Agent
”)
for
the Secured Parties (as defined therein).
A.
Reference
is made to (i) the Indenture dated as of September 20, 2006 (as amended,
restated, supplemented, waived or otherwise modified from time to time, the
“
Indenture
”),
among
the Issuer, the Subsidiary Parties and Wells Fargo Bank, N.A., as Trustee (the
“
Trustee
”)
and
(ii) the Purchase Agreement dated as of September 15, 2006 (as amended,
restated, supplemented, waived or otherwise modified from time to time, the
“
Purchase
Agreement
”),
among
BPC Acquisition Corp., the several parties named in Schedule I thereto (the
“
Initial
Purchasers
”)
and,
upon the consummation of the merger on the date of the Collateral Agreement,
BPC
Holding Corporation and the Subsidiary Parties thereto.
B.
Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Indenture and the Collateral Agreement referred
to
therein.
C.
The
Pledgors have entered into the Collateral Agreement in order to induce the
Trustee to enter into the Indenture and the Initial Purchasers to purchase
the
Notes. Section 7.16 of the Collateral Agreement provides that additional
Subsidiaries may become Subsidiary Parties under the Collateral Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the “
New
Subsidiary
”)
is
executing this Supplement in accordance with the requirements of the Indenture
to become a Subsidiary Party under the Collateral Agreement as consideration
for
credit previously extended to the Issuer.
Accordingly,
the Collateral Agent and the New Subsidiary agree as follows:
SECTION
1.
In
accordance with Section 7.16 of the Collateral Agreement, the New Subsidiary
by
its signature below becomes a Subsidiary Party and a Pledgor under the
Collateral Agreement with the same force and effect as if originally named
therein as a Subsidiary Party and a Pledgor, and the New Subsidiary hereby
(a)
agrees to all the terms and provisions of the Collateral Agreement applicable
to
it as a Subsidiary Party and a Pledgor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Pledgor
thereunder are true and correct, in all material respects, on and as of the
date
hereof. In furtherance of the foregoing, the New Subsidiary, as security for
the
payment and performance in full of the Obligations (as defined in the Collateral
Agreement), does hereby create and grant to the Collateral Agent, for the
benefit of the Secured Parties, a security interest in and Lien on all the
New
Subsidiary’s right, title and interest in and to the Collateral (as defined in
the Collateral Agreement) of the New Subsidiary. Each reference to a “Subsidiary
Party” or a “Pledgor” in the Collateral Agreement shall be deemed to include the
New Subsidiary. The Collateral Agreement is hereby incorporated herein by
reference.
SECTION
2.
The
New
Subsidiary represents and warrants to the Collateral Agent and the other Secured
Parties that this Supplement has been duly authorized, executed and delivered
by
it and constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, subject to (i) the effects of bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or other similar
laws affecting creditors’ rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (iii) implied covenants of good faith and fair
dealing.
SECTION
3.
This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute
but
one contract. This Supplement shall become effective when (a) the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and (b) the Collateral Agent has executed a
counterpart hereof.
SECTION
4.
The
New
Subsidiary hereby represents and warrants that (a) set forth on
Schedule
I
attached
hereto is a true and correct schedule of the location of any and all Article
9
Collateral of the New Subsidiary as of the date hereof, (b) set forth on
Schedule
II
attached
hereto is a true and correct schedule of all the Pledged Securities of the
New
Subsidiary and (c) set forth under its signature hereto, is the true and correct
legal name of the New Subsidiary, its jurisdiction of formation and the location
of its chief executive office.
SECTION
5.
Except
as
expressly supplemented hereby, the Collateral Agreement shall remain in full
force and effect.
SECTION
6.
THIS
SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF
NEW YORK.
SECTION
7.
In
the
event any one or more of the provisions contained in this Supplement should
be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and in the
Collateral Agreement shall not in any way be affected or impaired thereby.
The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION
8.
All
communications and notices hereunder shall be in writing and given as provided
in Section 7.01 of the Collateral Agreement.
SECTION
9.
The
New
Subsidiary agrees to reimburse the Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the
reasonable fees, disbursements and other charges of counsel for the Collateral
Agent.
IN
WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed
this Supplement to the Collateral Agreement as of the day and year first above
written.
[Name
of
New Subsidiary]
By:_____________________________
Name:
Title:
Legal
Name:
Jurisdiction
of Formation:
Location
of Chief Executive Office:
WELLS
FARGO BANK, N.A., as Collateral Agent
By:______________________________
Name:
Title:
Exhibit
II
to
Collateral Agreement
[Form
of]
PERFECTION
CERTIFICATE
Exhibit
III
to
Collateral Agreement
[Form
of]
ADDITIONAL
SECURED CREDITOR CONSENT
[Name
of
Additional Secured Creditor]
[Address
of Additional Secured Creditor]
[Date]
The
undersigned is the agent or trustee (the “Authorized Representative”) for
persons wishing to become “
Secured
Parties
”
(the
“
New
Secured Parties
”)
under
the Collateral Agreement dated as of September 20, 2006 (as heretofore amended
and/or supplemented, the “
Collateral
Agreement
”
(terms
used without definition herein have the meanings assigned to such term by the
Collateral Agreement)) among BPC HOLDING CORPORATION (as the surviving entity
of
the merger on Closing Date between BPC Acquisition Corp. and BPC Holding
Corporation), a Delaware corporation, (the “
Issuer
”),
each
subsidiary of the Issuer identified herein as a party (each, a “
Subsidiary
Party
”)
and
WELLS FARGO BANK, N.A., as collateral agent (in such capacity, the “
Collateral
Agent
”)
for
the Secured Parties (as defined therein).
In
consideration of the foregoing, the undersigned hereby:
(i)
represents
that the Authorized Representative has been authorized by the New Secured
Parties to become a party to the Collateral Agreement on behalf of the New
Secured Parties under that [DESCRIBE OPERATIVE AGREEMENT] (the “
New
Secured Obligation
”)
and to
act as the Authorized Representative for the New Secured Parties;
(ii)
acknowledges
that the New Secured Parties has received a copy of the Collateral
Agreement;
(iii)
appoints
and authorizes the Collateral Agent to take such action as agent on its behalf
and on behalf of all other Secured Parties and to exercise such powers under
the
Collateral Agreement as are delegated to the Collateral Agent by the terms
thereof, together with all such powers as are reasonably incidental thereto;
and
(iv)
accepts
and acknowledges the terms of the Collateral Agreement applicable to it and
the
New Secured Parties and agrees to serve as Authorized Representative for the
New
Secured Parties with respect to the New Secured Obligations and agrees on its
own behalf and on behalf of the New Secured Parties to be bound by the terms
hereof applicable to holders of Other Second-Lien Obligations, with all the
rights and obligations of a Secured Party thereunder and bound by all the
provisions thereof as fully as if it had been a Secured Party on the effective
date of the Collateral Agreement.
The
Collateral Agent, by acknowledging and agreeing to this Additional Secured
Creditor Consent, accepts the appointment set forth in clause (ii)
above.
The
name
and address of the Authorized Representative for purposes of Section 6.01 of
the
Collateral Agreement are as follows:
[name
and address of Authorized Representative]
THIS
ADDITIONAL SECURED PARTY CONSENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN
WITNESS WHEREOF, the undersigned has caused this Additional Secured Party
Consent to be duly executed by its authorized officer as of the ___ day of
20__.
[NAME
OF
AUTHORIZED REPRESENTATIVE]
By:_____________________________________
Name:
T
itle:
Acknowledged
and Agreed
WELLS
FARGO BANK, N.A.,
as
Collateral Agent
By:_________________________________
Name:
Title:
BPC
ACQUISITION CORP.
By:
________________________________
Name:
Title:
Upon
consummation of the Merger:
BPC
HOLDING CORPORATION
AEROCON,
INC.
BERRY
IOWA CORPORATION
BERRY
PLASTICS DESIGN CORPORATION
BERRY
STERLING CORPORATION
BERRY
PLASTICS TECHNICAL SERVICES, INC.
CARDINAL
PACKAGING, INC.
CPI
HOLDING CORPORATION
KNIGHT
PLASTICS, INC.
LANDIS
PLASTICS, INC.
PACKERWARE
CORPORATION
PESCOR,
INC.
POLY-SEAL
CORPORATION
VENTURE
PACKAGING, INC.
VENTURE
PACKAGING MIDWEST, INC.
BERRY
PLASTICS ACQUISITION CORPORATION III
BERRY
PLASTICS ACQUISITION CORPORATION V
BERRY
PLASTICS ACQUISITION CORPORATION VII
BERRY
PLASTICS ACQUISITION CORPORATION VIII
BERRY
PLASTICS ACQUISITION CORPORATION IX
BERRY
PLASTICS ACQUISITION CORPORATION X
BERRY
PLASTICS ACQUISITION CORPORATION XI
BERRY
PLASTICS ACQUISITION CORPORATION XII
BERRY
PLASTICS ACQUISITION CORPORATION XIII
KERR
GROUP, INC.
SAFFRON
ACQUISITION CORP.
SUN
COAST
INDUSTRIES, INC.
BERRY
PLASTICS ACQUISITION CORPORATION XV, LLC
SETCO,
LLC
TUBED
PRODUCTS, LLC
,
each
as
Pledgor
By:_________________________________
Name:
Title:
Schedule
IV
to
Collateral Agreement
Filings
Offices
[TO
BE
ATTACHED]
EXECUTION
COPY
INTERCREDITOR
AGREEMENT
INTERCREDITOR
AGREEMENT dated as of September 20, 2006, among CREDIT SUISSE, CAYMAN ISLANDS
BRANCH (“
Credit
Suisse
”),
as
First Lien Agent, WELLS FARGO BANK, N.A., as Trustee, BERRY PLASTICS GROUP,
INC., a Delaware corporation (“
Holdings
”),
BPC
ACQUISITION CORP., a Delaware corporation which, at the time of the acquisition,
will merge (the “
Merger
”)
with
and into BPC Holding Corporation, a Delaware corporation, with BPC Holding
Corporation surviving such merger as the borrower under the Credit Agreement
(as
defined below) and the obligor under the Notes (as defined below) (the
“
Company
”),
and
each Subsidiary of the Company listed on Schedule I hereto or that becomes
a
party hereto pursuant to Section 8.21 below.
A.
The
Company is party to the Credit Agreement dated as of September 20, 2006 (as
amended, amended and restated, supplemented or otherwise modified from time
to
time, the “
Credit
Agreement
”)
among
Holdings, the Company, the lenders party thereto from time to time, Credit
Suisse, as administrative agent, Citicorp North America, Inc., as syndication
agent, and Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as
co-documentation agents.
B.
The
Company is party to the Indenture dated as of September 20, 2006 (as amended,
restated, supplemented or otherwise modified from time to time, the
“
Second
Priority Senior Secured Notes Indenture
”),
under
which the Second Lien Fixed Rate Notes and the Second Lien Floating Rate Notes
were issued, among the Company, as obligor, the note guarantors as set forth
therein (the “
Note
Guarantors
”)
and
Wells Fargo Bank, N.A., as Trustee. The Obligations of the Company and the
Note
Guarantors under the Second Priority Senior Secured Notes Indenture, the Notes,
and the other Noteholder Documents constitute Second Priority
Claims.
Accordingly,
in consideration of the foregoing, the mutual covenants and obligations herein
set forth and for other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto, intending to
be
legally bound, hereby agree as follows:
Section
1. Definitions.
1.1.
Defined
Terms
.
As used
in this Agreement, the following terms have the meanings specified
below:
“
Affiliate
”
shall
have the meaning set forth in the Credit Agreement.
“
Agreement
”
shall
mean this Agreement, as amended, renewed, extended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
“
Bankruptcy
Law
”
shall
mean Title 11 of the United States Code and any similar Federal, state or
foreign law for the relief of debtors.
|
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“
Closing
Date
”
shall
have the meaning set forth in the Credit Agreement.
“
Common
Collateral
”
shall
mean all of the assets of any Grantor, whether real, personal or mixed,
constituting both Senior Lender Collateral and Second Priority Collateral,
including without limitation any assets in which the First Lien Agent is
automatically deemed to have a Lien pursuant to the provisions of Section
2.3.
“
Company
”
shall
have the meaning set forth in the preamble.
“
Comparable
Second Priority Collateral Document
”
shall
mean, in relation to any Common Collateral subject to any Lien created under
any
Senior Collateral Document, those Second Priority Collateral Documents that
create a Lien on the same Common Collateral, granted by the same
Grantor.
“
Credit
Agreement
”
shall
have the meaning set forth in the recitals.
“
DIP
Financing
”
shall
have the meaning set forth in Section 6.1.
“
Discharge
of Senior Lender Claims
”
shall
mean, except to the extent otherwise provided in Section 5.7 below, payment
in
full in cash (except for contingent indemnities and cost and reimbursement
obligations to the extent no claim has been made) of (a) all Obligations in
respect of all outstanding Senior Lender Claims and, with respect to letters
of
credit or letter of credit guaranties outstanding thereunder, delivery of cash
collateral or backstop letters of credit in respect thereof in compliance with
the Credit Agreement, in each case after or concurrently with the termination
of
all commitments to extend credit thereunder and (b) any other Senior Lender
Claims that are due and payable or otherwise accrued and owing at or prior
to
the time such principal and interest are paid; provided that the Discharge
of
Senior Lender Claims shall not be deemed to have occurred if such payments
are
made with the proceeds of other Senior Lender Claims that constitute an exchange
or replacement for or a refinancing of such Obligations or Senior Lender Claims.
In the event the Senior Lender Claims are modified and the Obligations are
paid
over time or otherwise modified pursuant to Section 1129 of the Bankruptcy
Code,
the Senior Lender Claims shall be deemed to be discharged when the final payment
is made, in cash, in respect of such indebtedness and any obligations pursuant
to such new indebtedness shall have been satisfied.
“
First
Lien Agent
”
shall
mean Credit Suisse, in its capacity as administrative agent and collateral
agent
for the Senior Lenders under the Credit Agreement and the other Senior Lender
Documents entered into pursuant to the Credit Agreement, together with its
successors (or, if there is more than one Credit Agreement, such agent or
trustee as is designated “First Lien Agent” by Senior Lenders holding a majority
of the Senior Lender Claims then outstanding) and permitted assigns under the
Credit Agreement exercising substantially the same rights and
powers.
“
Future
Second Lien Indebtedness
”
shall
mean Indebtedness or Obligations (other than Noteholder Claims) of the Company
and its Subsidiaries that are to be equally and ratably secured with the
Noteholder Claims and are so designated by the Company as Future Second Lien
Indebtedness; provided, however, that such Future Second Lien Indebtedness
is
|
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||
permitted
to be so incurred in accordance with any Senior Lender Documents and any Second
Priority Documents, as applicable.
“
Grantors
”
shall
mean the Company, and each of the Company’s Subsidiaries that has executed and
delivered a Second Priority Collateral Document or a Senior Collateral
Document.
“
Indebtedness
”
shall
mean and include all obligations that constitute “Indebtedness” within the
meaning of the Second Priority Senior Secured Notes Indenture or the Credit
Agreement.
“
Indenture
Secured Parties
”
shall
mean the Persons holding Noteholder Claims, including the Trustee.
“
Insolvency
or Liquidation Proceeding
”
shall
mean (a) any voluntary or involuntary case or proceeding under any Bankruptcy
Law with respect to any Grantor, (b) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to any Grantor or with respect to any of its assets, (c) any
liquidation, dissolution, reorganization or winding up of any Grantor whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (d) any assignment for the benefit of creditors or any other marshalling
of
assets and liabilities of any Grantor.
“
Lien
”
shall
mean, with respect to any asset, (a) any mortgage, deed of trust, lien,
hypothecation, pledge, charge, security interest or similar encumbrance in
or on
such asset and
(b)
the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or an financing lease having substantially
the same economic effect as any of the foregoing) relating to such
asset.
“
Loan
Party
”
shall
have the meaning set forth in the Credit Agreement.
“
Note
Guarantors
”
shall
have the meaning set forth in the recitals.
“
Noteholder
Claims
”
shall
mean all Obligations in respect of the Notes or arising under the Noteholder
Documents or any of them, including all fees and expenses of the Trustee
thereunder.
“
Noteholder
Collateral
”
shall
mean all of the assets of any Grantor, whether real, personal or mixed, with
respect to which a Lien is granted as security for any Noteholder
Claim.
“
Noteholder
Collateral Agreement
”
shall
mean the Collateral Agreement dated as of September 20, 2006, among the Company,
certain other Grantors and the Trustee in respect of the Second Priority Senior
Secured Notes Indenture.
“
Noteholder
Collateral Documents
”
shall
mean the Noteholder Collateral Agreement and any other document or instrument
pursuant to which a Lien is granted by any Grantor to secure any Noteholder
Claims or under which rights or remedies with respect to any such Lien are
governed.
|
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“
Noteholder
Documents
”
shall
mean (a) the Second Priority Senior Secured Notes Indenture, the Notes, the
Noteholder Collateral Documents and (b) any other related document or instrument
executed and delivered pursuant to any Noteholder Document described in clause
(a) above evidencing or governing any Obligations thereunder.
“
Notes
”
shall
mean (a) (i) the initial $525,000,000 in aggregate principal amount of 8⅞%
second priority senior secured fixed rate notes due 2014 and (ii) the initial
$225,000,000 in aggregate principal amount of second priority senior secured
floating rate notes due 2014, each issued by the Company pursuant to the Second
Priority Senior Secured Notes Indenture, (b) the exchange notes issued in
exchange therefor as contemplated by the Registration Rights Agreement dated
as
of September 20, 2006, among the Company, certain of the Company's Subsidiaries
and the initial purchasers party thereto and (c) any additional notes issued
under the Second Priority Senior Secured Notes Indenture by the Company, to
the
extent permitted by the Second Priority Senior Secured Notes Indenture, the
Credit Agreement, any other Senior Lender Documents and any Second Priority
Document, as applicable.
“
Obligations
”
shall
mean, with respect to any Person, any payment, performance or other obligations
of such Person of any kind, including, without limitation, any liability of
such
Person on any claim, whether or not the right of any creditor to payment in
respect of such claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable, secured or
unsecured, and whether or not such claim is discharged, stayed or otherwise
affected by any Insolvency or Liquidation Proceeding. Without limiting the
generality of the foregoing, the Obligations of any Grantor under any Senior
Lender Document or Second Priority Document include the obligations to pay
principal, interest (including interest accrued on or accruing after the
commencement of any Insolvency or Liquidation Proceeding, whether or not a
claim
for post-filing interest is allowed in such proceeding) or premium on any
Indebtedness, letter of credit commissions (if applicable), charges, expenses,
fees, attorneys’ fees and disbursements, indemnities and other amounts payable
by such Grantor to reimburse any amount in respect of any of the foregoing
that
any Senior Lender or Second Priority Secured Party, in its sole discretion,
many
elect to pay or advance on behalf of such Grantor.
“
Officers’
Certificate
”
shall
have the meaning set forth in the Second Priority Senior Secured Notes
Indenture.
“
Person
”
shall
mean an individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
“
Pledged
Collateral
”
shall
mean the Common Collateral in the possession of the First Lien Agent (or its
agents or bailees), to the extent that possession thereof perfects a Lien
thereon under the Uniform Commercial Code.
“
Recovery
”
shall
have the meaning set forth in Section 6.4.
“
Required
Lenders
”
shall
mean, with respect to any Credit Agreement, those Senior Lenders the approval
of
which is required to approve an amendment or modification of, termination or
waiver of any provision of or consent to any departure from such
Credit
|
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Agreement
(or would be required to effect such consent under this Agreement if such
consent were treated as an amendment of the Credit Agreement).
“
Second
Lien Fixed Rate Notes
”
shall
mean the Borrower’s 8⅞% Second Priority Senior Secured Notes due 2014, issued
pursuant to the Second Lien Notes Indenture and any notes issued by the Company
in exchange for, and as contemplated by, the Second Lien Fixed Rate Notes and
the related registration rights agreement with substantially identical terms
as
the Second Lien Fixed Rate Notes.
“
Second
Lien Floating Rate Notes
”
shall
mean the Borrower’s floating rate Second Priority Senior Secured Notes due 2014,
issued pursuant to the Second Lien Notes Indenture and any notes issued by
the
Company in exchange for, and as contemplated by, the Second Lien Floating Rate
Notes and the related registration rights agreement with substantially identical
terms as the Second Lien Floating Rate Notes.
“
Second
Priority Agents
”
shall
mean (a) the Trustee as agent for the Indenture Secured Parties and (b) the
collateral agent for any Future Second Lien Indebtedness (including the
Trustee).
“
Second
Priority Claims
”
shall
mean the Noteholder Claims and all other Obligations in respect of, or arising
under, the Second Priority Documents, including all fees and expenses of the
collateral agent for any Future Second Lien Indebtedness.
“
Second
Priority Collateral
”
shall
mean the Noteholder Collateral and all of the assets of any Grantor, whether
real, personal or mixed, with respect to which a Lien is granted as security
for
any Future Second Lien Indebtedness.
“
Second
Priority Collateral Agreements
”
shall
mean the Noteholder Collateral Agreement and any comparable agreement with
respect to any Future Second Lien Indebtedness.
“
Second
Priority Collateral Documents
”
shall
mean the Noteholder Collateral Documents and any other agreement, document
or
instrument pursuant to which a Lien is now or hereafter granted securing any
Second Priority Claims or under which rights or remedies with respect to such
Liens are at any time governed.
“
Second
Priority Designated Agent
”
shall
mean such agent or trustee as is designated “Second Priority Designated Agent”
by Second Priority Secured Parties holding a majority in principal amount of
the
Second Priority Claims then outstanding; it being understood that as of the
date
of this Agreement and for so long as any Obligations under the Second Priority
Secured Notes Indenture remain outstanding, the Trustee shall be so designated
Second Priority Designated Agent.
“
Second
Priority Documents
”
shall
mean the Noteholder Documents and any other document or instrument evidencing
or
governing any Future Second Lien Indebtedness.
“
Second
Priority Lien
”
shall
mean any Lien on any assets of the Company or any other Grantor securing any
Second Priority Claims.
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“
Second
Priority Secured Parties
”
shall
mean the Indenture Secured Parties and all other Persons holding any Second
Priority Claims, including the collateral agent for any Future Second Lien
Indebtedness.
“
Second
Priority Senior Secured Notes Indenture
”
shall
have the meaning set forth in the recitals.
“
Secured
Hedge Agreements
”
shall
mean each Swap Agreement that (i) is in effect on the Closing Date with a
counterparty that is a Senior Lender or an Affiliate of a Senior Lender as
of
the Closing Date or (ii) is entered into after the Closing Date with any
counterparty that is a Senior Lender or an Affiliate of a Senior Lender at
the
time such Swap Agreement is entered into.
“
Securities
Account
”
shall
have the meaning set forth in the Uniform Commercial Code.
“
Senior
Collateral Agreement
”
shall
mean the Guarantee and Collateral Agreement dated as of September 20, 2006,
among the Company, the other Grantors, Holdings and Credit Suisse, as
administrative agent for the secured parties referred to therein.
“
Senior
Collateral Documents
”
shall
mean the Senior Collateral Agreement and any security agreement, mortgage or
other agreement, document or instrument pursuant to which a Lien is now or
hereafter granted securing any Senior Lender Claims or under which rights or
remedies with respect to such Lien are at any time governed.
“
Senior
Lender Cash Management Obligations
”
shall
mean, with respect to any Grantor, the due and punctual payment and performance
of all obligations of such Grantor in respect of overdrafts and related
liabilities owed to a Senior Lender or any of its Affiliates (or any other
Person designated by the Company as a provider of cash management services
and
entitled to the benefit of the Senior Collateral Agreement) and arising from
cash management services (including treasury, depository, overdraft, credit
or
debit card, electronic funds transfer, Automated Clearing House services and
other cash management arrangements).
“
Senior
Lender Claims
”
shall
mean all Obligations arising under the Credit Agreement or any other Senior
Lender Document, whether or not such Obligations constitute Indebtedness,
including, without limitation, (a) Obligations arising under Secured Hedge
Agreements, (b) Senior Lender Cash Management Obligations and (c) Obligations
under any credit agreement that is an exchange or replacement for or an
extension, increase or refinancing of any other Senior Lender Claims. Senior
Lender Claims shall include all interest and expenses accrued or accruing (or
that would, absent the commencement of an Insolvency or Liquidation Proceeding,
accrue) after the commencement of an Insolvency or Liquidation Proceeding in
accordance with and at the rate specified in the relevant Senior Lender
Documents whether or not the claim for such interest or expenses is allowed
or
allowable as a claim in such Insolvency or Liquidation Proceeding.
“
Senior
Lender Collateral
”
shall
mean all of the assets of any Grantor, whether real, personal or mixed, with
respect to which a Lien is granted as security for any Senior Lender
Claim.
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“
Senior
Lender Documents
”
shall
mean the Credit Agreement, the Senior Collateral Documents and each of the
other
agreements, documents and instruments (including each agreement, document or
instrument providing for or evidencing a Senior Lender Hedging Obligation or
Senior Lender Cash Management Obligation) providing for, evidencing or securing
any Obligation under the Credit Agreement and any other related document or
instrument executed or delivered pursuant to any such document at any time
or
otherwise evidencing or securing any Indebtedness arising under any such
document.
“
Senior
Lender Hedging Obligations
”
shall
mean any Obligations under Secured Hedge Agreements.
“
Senior
Lenders
”
shall
mean the Persons holding Senior Lender Claims, including the First Lien
Agent.
“
Subsidiary
”
shall
mean any “Subsidiary” of the Company as defined in the Credit
Agreement.
“
Trustee
”
shall
mean Wells Fargo Bank, N.A., in its capacity as trustee under the Second
Priority Senior Secured Notes Indenture and as collateral agent under the
Noteholder Collateral Documents, and its permitted successors.
“
Swap
Agreement
”
shall
have the meaning set forth in the Credit Agreement.
“
Uniform
Commercial Code
”
or
“
UCC
”
shall
mean the Uniform Commercial Code as from time to time in effect in the State
of
New York.
1.2.
Terms
Generally
.
The
definitions of terms herein shall apply equally to the singular and plural
forms
of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or
other document as from time to time amended, supplemented or otherwise modified
in accordance with this Agreement, (b) any reference herein to any Person shall
be construed to include such Person’s successors and assigns, (c) the words
“herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Sections shall be construed
to
refer to Sections of this Agreement and (e) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any
and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
Section
2. Lien Priorities.
2.1.
Subordination
of Liens
.
Notwithstanding (i) the date, time, method, manner or order of filing or
recordation of any document or instrument or grant, attachment or
perfection
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(including
any defect or deficiency or alleged defect or deficiency in any of the
foregoing) of any Liens granted to the Second Priority Secured Parties on the
Common Collateral or of any Liens granted to the First Lien Agent or the Senior
Lenders on the Common Collateral, (ii) any provision of the UCC, the Bankruptcy
Code, or any applicable law or the Second Priority Documents or the Senior
Lender Documents, (iii) whether the First Lien Agent, either directly or through
agents, holds possession of, or has control over, all or any part of the Common
Collateral, (iv) the fact that any such Liens may be subordinated, voided,
avoided, invalidated or lapsed or (v) any other circumstance of any kind or
nature whatsoever, each Second Priority Agent, on behalf of itself and each
applicable Second Priority Secured Party, hereby agrees that: (a) any Lien
on
the Common Collateral securing any Senior Lender Claims now or hereafter held
by
or on behalf of the First Lien Agent or any Senior Lenders or any agent or
trustee therefor regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall have priority over and be
senior in all respects and prior to any Lien on the Common Collateral securing
any Second Priority Claims and (b) any Lien on the Common Collateral securing
any Second Priority Claims now or hereafter held by or on behalf of the Trustee
or any Second Priority Secured Parties or any agent or trustee therefor
regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to
all
Liens on the Common Collateral securing any Senior Lender Claims. All Liens
on
the Common Collateral securing any Senior Lender Claims shall be and remain
senior in all respects and prior to all Liens on the Common Collateral securing
any Second Priority Claims for all purposes, whether or not such Liens securing
any Senior Lender Claims are subordinated to any Lien securing any other
obligation of the Company, any other Grantor or any other Person.
2.2.
Prohibition
on Contesting Liens
.
Each
Second Priority Agent, for itself and on behalf of each applicable Second
Priority Secured Party, and the First Lien Agent, for itself and on behalf
of
each Senior Lender, agrees that it shall not (and hereby waives any right to)
take any action to challenge, contest or support any other Person in contesting
or challenging, directly or indirectly, in any proceeding (including any
Insolvency or Liquidation Proceeding), the validity, perfection, priority or
enforceability of (a) a Lien securing any Senior Lender Claims held (or
purported to be held) by or on behalf of the First Lien Agent or any of the
Senior Lenders or any agent or trustee therefor in any Senior Lender Collateral
or (b) a Lien securing any Second Priority Claims held (or purported to be
held)
by or on behalf of any Second Priority Secured Party in the Common Collateral,
as the case may be; provided, however, that nothing in this Agreement shall
be
construed to prevent or impair the rights of the First Lien Agent or any Senior
Lender to enforce this Agreement (including the priority of the Liens securing
the Senior Lender Claims as provided in Section 2.1) or any of the Senior Lender
Documents.
2.3.
No
New
Liens
.
So long
as the Discharge of Senior Lender Claims has not occurred, each Second Priority
Agent agrees, for itself and on behalf of each applicable Second Priority
Secured Party, whether or not any Insolvency or Liquidation Proceeding has
been
commenced by or against the Company or any other Grantor, that it shall not
acquire or hold any Lien on any assets of the Company or any other Grantor
securing any Second Priority Claims that are not also subject to the
first-priority Lien in respect of the Senior Lender Claims under the Senior
Lender Documents. If any Second Priority Agent or any Second Priority Secured
Party shall (nonetheless and in breach hereof) acquire or hold any Lien on
any
collateral that is not also subject to the first-priority Lien in respect of
the
Senior Lender Claims under the Senior Lender
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Documents,
then such Second Priority Agent shall, without the need for any further consent
of any party and notwithstanding anything to the contrary in any other document,
be deemed to also hold and have held such lien for the benefit of the First
Lien
Agent as security for the Senior Lender Claims (subject to the lien priority
and
other terms hereof) and shall promptly notify the First Lien Agent in writing
of
the existence of such Lien and in any event take such actions as may be
requested by the First Lien Agent to assign or release such Liens to the First
Lien Agent (and/or its designee) as security for the applicable Senior Lender
Claims.
2.4.
Perfection
of Liens
.
Neither
the First Lien Agent nor the Senior Lenders shall be responsible for perfecting
and maintaining the perfection of Liens with respect to the Common Collateral
for the benefit of the Second Priority Agents and the Second Priority Secured
Parties. The provisions of this Agreement are intended solely to govern the
respective Lien priorities as between the Senior Lenders and the Second Priority
Secured Parties and shall not impose on the First Lien Agent, the Second
Priority Agents, the Second Priority Secured Parties or the Senior Lenders
or
any agent or trustee therefor any obligations in respect of the disposition
of
proceeds of any Common Collateral which would conflict with prior perfected
claims therein in favor of any other Person or any order or decree of any court
or governmental authority or any applicable law.
2.5.
Waiver
of Marshalling
.
Until
the Discharge of the Senior Lender Claims, the Second Priority Agent, on behalf
of itself and the Second Priority Secured Parties, agrees not to assert and
hereby waives, to the fullest extent permitted by law, any right to demand,
request, plead or otherwise assert or otherwise claim the benefit of, any
marshalling, appraisal, valuation or other similar right that may otherwise
be
available under applicable law with respect to the Common Collateral or any
other similar rights a junior secured creditor may have under applicable
law.
Section
3. Enforcement.
3.1.
Exercise
of Remedies
.
(a)
So
long as the Discharge of Senior Lender Claims has not occurred, whether or
not
any Insolvency or Liquidation Proceeding has been commenced by or against the
Company or any other Grantor, (i) no Second Priority Agent or any Second
Priority Secured Party will (x) exercise or seek to exercise any rights or
remedies (including setoff or recoupment) with respect to any Common Collateral
or any other security in respect of any applicable Second Priority Claims,
or
exercise any right under any lockbox agreement, control agreement, landlord
waiver or bailee’s letter or similar agreement or arrangement, or institute any
action or proceeding with respect to such rights or remedies (including any
action of foreclosure), (y) contest, protest or object to any foreclosure
proceeding or action brought with respect to the Common Collateral or any other
collateral by the First Lien Agent or any Senior Lender in respect of the Senior
Lender Claims, the exercise of any right by the First Lien Agent or any Senior
Lender (or any agent or sub-agent on their behalf) in respect of the Senior
Lender Claims under any lockbox agreement, control agreement, landlord waiver
or
bailee’s letter or similar agreement or arrangement to which any Second Priority
Agent or any Second Priority Secured Party either is a party or may have rights
as a third party beneficiary, or any other exercise by any such party, of any
rights and remedies relating to the Common Collateral or any other collateral
under the Senior Lender
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Documents
or otherwise in respect of Senior Lender Claims, or (z) object to the
forbearance by the Senior Lenders from bringing or pursuing any foreclosure
proceeding or action or any other exercise of any rights or remedies relating
to
the Common Collateral or any other collateral in respect of Senior Lender Claims
and (ii) except as otherwise provided herein, the First Lien Agent and the
Senior Lenders shall have the exclusive right to enforce rights, exercise
remedies (including setoff and the right to credit bid their debt) and make
determinations regarding the release, disposition or restrictions with respect
to the Common Collateral without any consultation with or the consent of any
Second Priority Agent or any Second Priority Secured Party; provided, however,
that (A) in any Insolvency or Liquidation Proceeding commenced by or against
the
Company or any other Grantor, each Second Priority Agent may file a proof of
claim or statement of interest with respect to the applicable Second Priority
Claims and (B) each Second Priority Agent may take any action (not adverse
to
the prior Liens on the Common Collateral securing the Senior Lender Claims,
or
the rights of the First Lien Agent or the Senior Lenders to exercise remedies
in
respect thereof) in order to create, prove, perfect, preserve or protect (but
not enforce) its rights in, and perfection and priority of its Lien on, the
Common Collateral. In exercising rights and remedies with respect to the Senior
Lender Collateral, the First Lien Agent and the Senior Lenders may enforce
the
provisions of the Senior Lender Documents and exercise remedies thereunder,
all
in such order and in such manner as they may determine in the exercise of their
sole discretion. Such exercise and enforcement shall include the rights of
an
agent appointed by them to sell or otherwise dispose of Common Collateral or
other collateral upon foreclosure, to incur expenses in connection with such
sale or disposition, and to exercise all the rights and remedies of a secured
lender under the uniform commercial code of any applicable jurisdiction and
of a
secured creditor under Bankruptcy Laws of any applicable
jurisdiction.
(b)
So
long as the Discharge of Senior Lender Claims has not occurred, each Second
Priority Agent, on behalf of itself and each applicable Second Priority Secured
Party, agrees that it will not take or receive any Common Collateral or other
collateral or any proceeds of Common Collateral or other collateral in
connection with the exercise of any right or remedy (including setoff or
recoupment) with respect to any Common Collateral or other collateral in respect
of the applicable Second Priority Claims. Without limiting the generality of
the
foregoing, unless and until the Discharge of Senior Lender Claims has occurred,
except as expressly provided in the proviso in clause (ii) of Section 3.1(a),
the sole right of the Second Priority Agents and the Second Priority Secured
Parties with respect to the Common Collateral or any other collateral is to
hold
a Lien on the Common Collateral or such other collateral in respect of the
applicable Second Priority Claims pursuant to the Second Priority Documents,
as
applicable, for the period and to the extent granted therein and to receive
a
share of the proceeds thereof, if any, after the Discharge of Senior Lender
Claims has occurred.
(c)
Subject to the proviso in clause (ii) of Section 3.1(a) above, (i) each Second
Priority Agent, for itself and on behalf of each applicable Second Priority
Secured Party, agrees that no Second Priority Agent or any Second Priority
Secured Party will take any action that would hinder any exercise of remedies
undertaken by the First Lien Agent or the Senior Lenders with respect to the
Common Collateral or any other collateral under the Senior Loan Documents,
including any sale, lease, exchange, transfer or other disposition of the Common
Collateral or such other collateral, whether by foreclosure or otherwise, and
(ii) each Second Priority Agent,
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for
itself and on behalf of each applicable Second Priority Secured Party, hereby
waives any and all rights it or any Second Priority Secured Party may have
as a
junior lien creditor or otherwise to object to the manner in which the First
Lien Agent or the Senior Lenders seek to enforce or collect the Senior Lender
Claims or the Liens granted in any of the Senior Lender Collateral, regardless
of whether any action or failure to act by or on behalf of the First Lien Agent
or Senior Lenders is adverse to the interests of the Second Priority Secured
Parties.
(d)
Each
Second Priority Agent hereby acknowledges and agrees that no covenant, agreement
or restriction contained in any applicable Second Priority Document shall be
deemed to restrict in any way the rights and remedies of the First Lien Agent
or
the Senior Lenders with respect to the Senior Lender Collateral as set forth
in
this Agreement and the Senior Lender Documents.
3.2.
Cooperation
.
Subject
to the proviso in clause (ii) of Section 3.1(a), each Second Priority Agent,
on
behalf of itself and each applicable Second Priority Secured Party, agrees
that,
unless and until the Discharge of Senior Lender Claims has occurred, it will
not
commence, or join with any Person (other than the Senior Lenders and the First
Lien Agent upon the request thereof) in commencing, any enforcement, collection,
execution, levy or foreclosure action or proceeding with respect to any Lien
held by it in the Common Collateral or any other collateral under any of the
applicable Second Priority Documents or otherwise in respect of the applicable
Second Priority Claims relating to the Common Collateral.
3.3
Actions
Upon Breach
.
If any
Second Priority Secured Party, in contravention of the terms of this Agreement,
in any way take, attempt to or threaten to take any action with respect to
the
Common Collateral (including, without limitation, any attempt to realize upon
or
enforce any remedy with respect to this Agreement), this Agreement shall create
an irrebutable presumption and admission by such Second Party Secured Party
that
relief against such Second Priority Secured Party by injunction, specific
performance and/or other appropriate equitable relief is necessary to prevent
irreparable harm to the Senior Lenders, it being understood and agreed by the
Trustee on behalf of each Second Priority Secured Party that (i) the Senior
Lenders’ damages from its actions may at that time be difficult to ascertain and
may be irreparable, and (ii) each Second Priority Secured Party waives any
defense that the Grantors and/or the Senior Lenders cannot demonstrate damage
and/or be made whole by the awarding of damages.
Section
4. Payments.
4.1.
Application
of Proceeds
.
So long
as the Discharge of Senior Lender Claims has not occurred, the Common Collateral
and any other collateral in respect of the Second Priority Claims or proceeds
thereof received in connection with the sale or other disposition of, or
collection on, such Common Collateral or other collateral upon the exercise
of
remedies as a secured party, shall be applied by the First Lien Agent to the
Senior Lender Claims in such order as specified in the relevant Senior Lender
Documents until the Discharge of Senior Lender Claims has occurred. Upon the
Discharge of Senior Lender Claims, subject to Section 5.7 hereof, the First
Lien
Agent shall deliver promptly to the Second Priority Designated Agent
any
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Common
Collateral or proceeds thereof held by it in the same form as received, with
any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct to be applied by the Second Priority Designated Agent ratably to the
Second Priority Claims in such order as specified in the Second Priority
Documents.
4.2.
Payments
Over
.
Any
Common Collateral or other collateral in respect of the Second Priority Claims
or proceeds thereof received by any Second Priority Agent or any Second Priority
Secured Party in connection with the exercise of any right or remedy (including
setoff or recoupment) relating to the Common Collateral or such other collateral
prior to the Discharge of Senior Lender Claims shall be segregated and held
in
trust for the benefit of and forthwith paid over to the First Lien Agent (and/or
its designees) for the benefit of the Senior Lenders in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The First Lien Agent is hereby authorized
to
make any such endorsements as agent for any Second Priority Agent or any such
Second Priority Secured Party. This authorization is coupled with an interest
and is irrevocable.
Section
5. Other Agreements.
5.1.
Releases
.
(a)
If,
at any time any Grantor or the holder of any Senior Lender Claim delivers notice
to each Second Priority Agent that any specified Common Collateral (including
all or substantially all of the equity interests of a Grantor or any of its
Subsidiaries) (including for such purpose, in the case of the sale of equity
interests in any Subsidiary, any Common Collateral held by such Subsidiary
or
any direct or indirect Subsidiary thereof) is (A) sold, transferred or otherwise
disposed of:
(i)
by
the owner of such Common Collateral in a transaction permitted under the Credit
Agreement, the Second Priority Senior Secured Notes Indenture and each other
Second Priority Document (if any); or
(ii)
during the existence of any Event of Default under (and as defined in) the
Credit Agreement to the extent the First Lien Agent has consented to such sale,
transfer or disposition; or
(B)
is
otherwise released as permitted by the Credit Agreement,
then
(whether or not any Insolvency or Liquidation Proceeding is pending at the
time)
the Liens in favor of the Second Priority Secured Parties upon such Collateral
will automatically be released and discharged as and when, but only to the
extent, such Liens on such Collateral securing Senior Lender Claims are released
and discharged. Upon delivery to each Second Priority Agent of a notice from
the
First Lien Agent stating that any release of Liens securing or supporting the
Senior Lender Claims has become effective (or shall become effective upon each
Second Priority Agent’s release) (whether in connection with a sale of such
assets by the relevant Grantor pursuant to the preceding sentence or otherwise),
each Second Priority Agent will promptly execute and deliver such instruments,
releases, termination statements or other documents confirming such release
on
customary terms at the expense of the Company. In the
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case
of
the sale of all or substantially all of the capital stock of a Grantor or any
of
its Subsidiaries, the guarantee in favor of the Second Priority Secured Parties,
if any, made by such Grantor or Subsidiary will automatically be released and
discharged as and when, but only to the extent, the guarantee by such Grantor
or
Subsidiary of Senior Lender Claims is released and discharged.
(b)
Each
Second Priority Agent, for itself and on behalf of each applicable Second
Priority Secured Party, hereby irrevocably constitutes and appoints the First
Lien Agent and any officer or agent of the First Lien Agent, with full power
of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of each Second Priority Agent or
such
holder or in the First Lien Agent’s own name, from time to time in the First
Lien Agent’s discretion, for the purpose of carrying out the terms of this
Section 5.1, to take any and all appropriate action and to execute any and
all
documents and instruments that may be necessary or desirable to accomplish
the
purposes of this Section 5.1, including any termination statements, endorsements
or other instruments of transfer or release.
(c)
Unless and until the Discharge of Senior Lender Claims has occurred, each Second
Priority Agent, for itself and on behalf of each applicable Second Priority
Secured Party, hereby consents to the application, whether prior to or after
a
default, of proceeds of Common Collateral or other collateral to the repayment
of Senior Lender Claims pursuant to the Credit Agreement; provided that nothing
in this Section 5.1(c) shall be construed to prevent or impair the rights of
the
Second Priority Agents or the Second Priority Secured Parties to receive
proceeds in connection with the Second Priority Claims not otherwise in
contravention of this Agreement.
5.2.
Insurance
.
Unless
and until the Discharge of Senior Lender Claims has occurred, the First Lien
Agent and the Senior Lenders shall have the sole and exclusive right, subject
to
the rights of the Grantors under the Senior Lender Documents, to adjust
settlement for any insurance policy covering the Common Collateral or any other
collateral in respect of the Second Priority Claims in the event of any loss
thereunder and to approve any award granted in any condemnation or similar
proceeding affecting the Common Collateral or such other collateral. Unless
and
until the Discharge of Senior Lender Claims has occurred, all proceeds of any
such policy and any such award if in respect of the Common Collateral or such
other collateral shall be paid (a) first, prior to the occurrence of the
Discharge of Senior Lender Claims, to the First Lien Agent for the benefit
of
Senior Lenders pursuant to the terms of the Senior Lender Documents, (b) second,
after the occurrence of the Discharge of Senior Lender Claims, to the Second
Priority Agents for the benefit of the Second Priority Secured Parties pursuant
to the terms of the applicable Second Priority Documents and (c) third, if
no
Second Priority Obligations are outstanding, to the owner of the subject
property, such other person as may be entitled thereto or as a court of
competent jurisdiction may otherwise direct. If any Second Priority Agent or
any
Second Priority Secured Party shall, at any time, receive any proceeds of any
such insurance policy or any such award in contravention of this Agreement,
it
shall pay such proceeds over to the First Lien Agent in accordance with the
terms of Section 4.2.
5.3.
Amendments
to Second Priority Collateral Documents
.
(a)
So
long as the Discharge of Senior Lender Claims has not occurred, without the
prior written consent of the First Lien Agent and the Required Lenders, no
Second Priority Collateral
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Document
may be amended, supplemented or otherwise modified or entered into to the extent
such amendment, supplement or modification, or the terms of any new Second
Priority Collateral Document, would be prohibited by or inconsistent with any
of
the terms of this Agreement. Each Second Priority Agent agrees that each
applicable Second Priority Collateral Document shall include the following
language (or language to similar effect approved by the First Lien
Agent):
“Notwithstanding
anything herein to the contrary, (i) the liens and security interests granted
to
the [applicable Second Priority Agent] pursuant to this agreement are expressly
subject and subordinate to the liens and security interests granted to Credit
Suisse, Cayman Islands Branch, as collateral agent (and its permitted
successors), for the benefit of the lenders referred to below, pursuant to
the
Guarantee and Collateral Agreement dated as of September 20, 2006 (as amended,
amended and restated, supplemented or otherwise modified from time to time),
from the Company and the other “Pledgors” referred to therein, in favor of
Credit Suisse, Cayman Islands Branch, as collateral agent, and (ii) the exercise
of any right or remedy by the [applicable Second Priority Agent] hereunder
is
subject to the limitations and provisions of the Intercreditor Agreement dated
as of September 20, 2006 (as amended, restated, supplemented or otherwise
modified from time to time, the “Intercreditor Agreement”), by and among Credit
Suisse, Cayman Islands Branch, as First Lien Agent, Holdings, the Company and
the subsidiaries party thereto. In the event of any conflict between the terms
of the Intercreditor Agreement and the terms of this agreement, the terms of
the
Intercreditor Agreement shall govern.”
(b)
In
the event that the First Lien Agent or the Senior Lenders under the Credit
Agreement or, if there is no Credit Agreement, any other Senior Lenders, enter
into any amendment, waiver or consent in respect of or replace any of the Senior
Collateral Documents for the purpose of adding to, or deleting from, or waiving
or consenting to any departures from any provisions of, any Senior Collateral
Document or changing in any manner the rights of the First Lien Agent, the
Senior Lenders, the Company or any other Grantor thereunder (including the
release of any Liens in Senior Lender Collateral), then such amendment, waiver
or consent shall apply automatically to any comparable provision of each
Comparable Second Priority Collateral Document without the consent of any Second
Priority Agent or any Second Priority Secured Party and without any action
by
any Second Priority Agent, the Company or any other Grantor; provided, that
such
amendment, waiver or consent does not materially adversely affect the rights
of
the Second Priority Secured Parties or the interests of the Second Priority
Secured Parties in the Second Priority Collateral and not the other creditors
of
the Company or such Grantor, as the case may be, that have a security interest
in the affected collateral in a like or similar manner (without regard to the
fact that the Lien of such Senior Collateral Document is senior to the Lien
of
the Comparable Second Priority Collateral Document). The First Lien Agent shall
give written notice of such amendment, waiver or consent to each Second Priority
Agent; provided that the failure to give such notice shall not affect the
effectiveness of such amendment, waiver or consent with respect to the
provisions of any Second Priority Collateral Document as set forth in this
Section 5.3(b).
(c)
Anything contained herein to the contrary notwithstanding, until the Discharge
of Senior Lender Claims has occurred, no Second Priority Collateral Document
may
be amended, supplemented or otherwise modified or entered into without the
prior
written consent of the First
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Lien
Agent and, without limitation on the foregoing, no Second Priority Collateral
Document shall be entered into unless the collateral covered thereby is also
subject to a perfected first-priority interest in favor of the First Lien Agent
for the benefit of the Senior Lenders pursuant to the Senior Collateral
Documents.
5.4.
Rights
As Unsecured Creditors
.
Notwithstanding anything to the contrary in this Agreement, the Second Priority
Agents and the Second Priority Secured Parties may exercise rights and remedies
as an unsecured creditor against the Company or any Subsidiary that has
guaranteed the Second Priority Claims in accordance with the terms of the
applicable Second Priority Documents and applicable law, in each case to the
extent not inconsistent with the provisions of this Agreement. Nothing in this
Agreement shall prohibit the receipt by any Second Priority Agent or any Second
Priority Secured Party of the required payments of interest and principal so
long as such receipt is not the direct or indirect result of (a) the exercise
by
any Second Priority Agent or any Second Priority Secured Party of rights or
remedies as a secured creditor in respect of Common Collateral or other
collateral or (b) enforcement in contravention of this Agreement of any Lien
in
respect of Second Priority Claims held by any of them. In the event any Second
Priority Agent or any Second Priority Secured Party becomes a judgment lien
creditor or other secured creditor in respect of Common Collateral or other
collateral as a result of its enforcement of its rights as an unsecured creditor
in respect of Second Priority Claims or otherwise, such judgment or other lien
shall be subordinated to the Liens securing Senior Lender Claims on the same
basis as the other Liens securing the Second Priority Claims are so subordinated
to such Liens securing Senior Lender Claims under this Agreement. Nothing in
this Agreement impairs or otherwise adversely affects any rights or remedies
the
First Lien Agent or the Senior Lenders may have with respect to the Senior
Lender Collateral.
5.5.
First
Lien Agent as Gratuitous Bailee for Perfection
.
(a)
The
First Lien Agent agrees to hold the Pledged Collateral that is part of the
Common Collateral in its possession or control (or in the possession or control
of its agents or bailees) as gratuitous bailee for each Second Priority Agent
and any assignee solely for the purpose of perfecting the security interest
granted in such Pledged Collateral pursuant to the Second Priority Collateral
Agreements, subject to the terms and conditions of this Section 5.5 (such
bailment being intended, among other things, to satisfy the requirements of
Sections 8-106(d)(3), 8-301(a)(2) and 9-313(c) of the UCC).
(b)
In
the event that the First Lien Agent (or its agent or bailees) has Lien filings
against Intellectual Property that is part of the Common Collateral that are
necessary for the perfection of Liens in such Common Collateral, the First
Lien
Agent agrees to hold such Liens as gratuitous bailee for each Second Priority
Agent and any assignee solely for the purpose of perfecting the security
interest granted in such Liens pursuant to the Second Priority Collateral
Agreements, subject to the terms and conditions of this Section
5.5.
(c)
Except as otherwise specifically provided herein (including Sections 3.1 and
4.1), until the Discharge of Senior Lender Claims has occurred, the First Lien
Agent shall be entitled to deal with the Pledged Collateral in accordance with
the terms of the Senior Lender Documents as if the Liens under the Second
Priority Collateral Documents did not exist. The rights of the Second Priority
Agents and the Second Priority Secured Parties with respect to such
Pledged
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Collateral
shall at all times be subject to the terms of this Agreement.
(d)
The
First Lien Agent shall have no obligation whatsoever to any Second Priority
Agent or any Second Priority Secured Party to assure that the Pledged Collateral
is genuine or owned by the Grantors or to protect or preserve rights or benefits
of any Person or any rights pertaining to the Common Collateral except as
expressly set forth in this Section 5.5. The duties or responsibilities of
the
First Lien Agent under this Section 5.5 shall be limited solely to holding
the
Pledged Collateral as gratuitous bailee for each Second Priority Agent for
purposes of perfecting the Lien held by the Second Priority Secured
Parties.
(e)
The
First Lien Agent shall not have by reason of the Second Priority Collateral
Documents or this Agreement or any other document a fiduciary relationship
in
respect of any Second Priority Agent or any Second Priority Secured Party and
the Second Priority Agents and the Second Priority Secured Parties hereby waive
and release the First Lien Agent from all claims and liabilities arising
pursuant to the First Lien Agent’s role under this Section 5.5, as agent and
gratuitous bailee with respect to the Common Collateral.
(f)
Upon
the Discharge of Senior Lender Claims, the First Lien Agent shall deliver to
the
Second Priority Designated Agent, to the extent that it is legally permitted
to
do so, the remaining Pledged Collateral (if any) together with any necessary
endorsements (or otherwise allow the Second Priority Designated Agent to obtain
control of such Pledged Collateral) or as a court of competent jurisdiction
may
otherwise direct. The Company shall take such further action as is required
to
effectuate the transfer contemplated hereby and shall indemnify the First Lien
Agent for loss or damage suffered by the First Lien Agent as a result of such
transfer except for loss or damage suffered by the First Lien Agent as a result
of its own willful misconduct, gross negligence or bad faith. The First Lien
Agent has no obligation to follow instructions from any Second Priority Agent
in
contravention of this Agreement.
(g)
Neither the First Lien Agent nor the Senior Lenders shall be required to marshal
any present or future collateral security for the Company’s or its Subsidiaries’
obligations to the First Lien Agent or the Senior Lenders under the Credit
Agreement or the Senior Collateral Documents or any assurance of payment in
respect thereof or to resort to such collateral security or other assurances
of
payment in any particular order, and all of their rights in respect of such
collateral security or any assurance of payment in respect thereof shall be
cumulative and in addition to all other rights, however existing or
arising.
5.6.
Second
Priority Designated Agent as Gratuitous Bailee for Perfection
.
(a)
Upon
the Discharge of Senior Lender Claims, the Second Priority Designated Agent
agrees to hold the Pledged Collateral that is part of the Common Collateral
in
its possession or control (or in the possession or control of its agents or
bailees) as gratuitous bailee for the other Second Priority Agents and any
assignee solely for the purpose of perfecting the security interest granted
in
such Pledged Collateral pursuant to the applicable Second Priority Collateral
Agreement, subject to the terms and conditions of this Section 5.6.
(b)
In
the event that the Second Priority Designated Agent (or its agent or bailees)
has
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Lien
filings against Intellectual Property that is part of the Common Collateral
that
are necessary for the perfection of Liens in such Common Collateral, upon the
Discharge of Senior Lender Claims, the Second Priority Designated Agent agrees
to hold such Liens as gratuitous bailee for the other Second Priority Agents
and
any assignee solely for the purpose of perfecting the security interest granted
in such Liens pursuant to the applicable Second Priority Collateral Agreement,
subject to the terms and conditions of this Section 5.6.
(c)
The
Second Priority Designated Agent, in its capacity as gratuitous bailee, shall
have no obligation whatsoever to the other Second Priority Agents to assure
that
the Pledged Collateral is genuine or owned by the Grantors or to protect or
preserve rights or benefits of any Person or any rights pertaining to the Common
Collateral except as expressly set forth in this Section 5.6. The duties or
responsibilities of the Second Priority Designated Agent under this Section
5.6
upon the Discharge of Senior Lender Claims shall be limited solely to holding
the Pledged Collateral as gratuitous bailee for the other Second Priority Agents
for purposes of perfecting the Lien held by the applicable Second Priority
Secured Parties.
(d)
The
Second Priority Designated Agent shall not have by reason of the Second Priority
Collateral Documents or this Agreement or any other document a fiduciary
relationship in respect of the other Second Priority Agents (or the Second
Priority Secured Parties for which such other Second Priority Agents are agents)
and the other Second Priority Agents hereby waive and release the Second
Priority Designated Agent from all claims and liabilities arising pursuant
to
the Second Priority Designated Agent’s role under this Section 5.6, as agent and
gratuitous bailee with respect to the Common Collateral.
(e)
In
the event that the Second Priority Designated Agent shall cease to be so
designated the Second Priority Designated Agent pursuant to the definition
of
such term, the then Second Priority Designated Agent shall deliver to the
successor Second Priority Designated Agent, to the extent that it is legally
permitted to do so, the remaining Pledged Collateral (if any), together with
any
necessary endorsements (or otherwise allow the successor Second Priority
Designated Agent to obtain control of such Pledged Collateral) or as a court
of
competent jurisdiction may otherwise direct, and such successor Second Priority
Designated Agent shall perform all duties of the Second Priority Designated
Agent as set forth herein. The Company shall take such further action as is
required to effectuate the transfer contemplated hereto and shall indemnify
the
Second Priority Designated Agent for loss or damage suffered by the Second
Priority Designated Agent as a result of such transfer except for loss or damage
suffered by the Second Priority Designated Agent as a result of its own willful
misconduct, gross negligence or bad faith. The Second Priority Designated Agent
has no obligation to follow instructions from the successor Second Priority
Designated Agent in contravention of this Agreement.
5.7.
Release
Upon Discharge of Senior Lender Claims; No Release If Event of Default;
Reinstatement
.
(a)
Except
as
otherwise provided in clause (b) of this Section 5.7, upon the Discharge of
Senior Lender Claims and the concurrent release of the Liens securing Senior
Lender Claims, the Liens in favor of the Second Priority Secured Parties shall
automatically be released and discharged.
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(b)
Notwithstanding
any other provisions contained in this Agreement, if an Event of Default (as
defined in the Second Priority Senior Secured Notes Indenture or any other
Second Priority Document, as applicable) exists on the date of Discharge of
Senior Lender Claims, the Second Priority Liens on the Second Priority
Collateral securing the Second Priority Claims relating to such Event of Default
will not be released, except to the extent such Second Priority Collateral
or
any portion thereof was disposed of in order to repay Senior Lender Claims
secured by such Second Priority Collateral, and thereafter the applicable Second
Priority Agent will have the right to direct the First Lien Agent to foreclose
upon such Second Priority Collateral (but in such event, the Liens on such
Second Priority Collateral securing the applicable Second Priority Claims will
be released when such Event of Default and all other Events of Default under
the
Second Priority Senior Secured Notes Indenture or any other Second Priority
Document, as applicable, cease to exist).
(c)
If,
at
any time after the Discharge of Senior Lender Claims has occurred, the Company
incurs and designates any Senior Lender Claims, then such Discharge of Senior
Lender Claims shall automatically be deemed not to have occurred for all
purposes of this Agreement (other than with respect to any actions taken prior
to the date of such designation as a result of the occurrence of such first
Discharge of Senior Lender Claims), and the applicable agreement governing
such
Senior Lender Claims shall automatically be treated as the Credit Agreement
for
all purposes of this Agreement, including for purposes of the Lien priorities
and rights in respect of Common Collateral set forth herein and the granting
by
the First Lien Agent of amendments, waivers and consents hereunder. Upon receipt
of notice of such designation (including the identity of the new First Lien
Agent), each Second Priority Agent shall promptly (i) enter into such documents
and agreements (at the expense of the Company), including amendments or
supplements to this Agreement, as the Company or such new First Lien Agent
shall
reasonably request in writing in order to provide the new First Lien Agent
the
rights of the First Lien Agent contemplated hereby and (ii) to the extent then
held by any Second Priority Agent, deliver to the First Lien Agent the Pledged
Collateral that is Common Collateral together with any necessary endorsements
(or otherwise allow such First Lien Agent to obtain possession or control of
such Pledged Collateral).
Section
6. Insolvency or Liquidation Proceedings.
6.1.
Financing
Issues
.
If the
Company or any other Grantor shall be subject to any Insolvency or Liquidation
Proceeding and the First Lien Agent shall desire to permit the use of cash
collateral or to permit the Company or any other Grantor to obtain financing
under Section 363 or Section 364 of Title 11 of the United States Code or any
similar provision in any Bankruptcy Law (“
DIP
Financing
”),
then
each Second Priority Agent, on behalf of itself and each applicable Second
Priority Secured Party, agrees that it will raise no objection to, and will
not
support any objection to, and will not otherwise contest (a) such use of cash
collateral or DIP Financing and will not request adequate protection or any
other relief in connection therewith (except to the extent permitted by Section
6.3) and, to the extent the Liens securing the Senior Lender Claims under the
Credit Agreement or, if no Credit Agreement exists, under the other Senior
Lender Documents are subordinated or pari passu with such DIP Financing, will
subordinate its Liens in the Common Collateral and any other collateral to
such
DIP Financing (and all Obligations relating thereto) on the same basis as the
other Liens securing the Second
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Priority
Claims are so subordinated to Liens securing Senior Lender Claims under this
Agreement, (b) any motion for relief from the automatic stay or from any
injunction against foreclosure or enforcement in respect of Senior Lender Claims
made by the First Lien Agent or any holder of Senior Lender Claims, (c) any
lawful exercise by any holder of Senior Lender Claims of the right to credit
bid
Senior Lender Claims at any sale in foreclosure of Senior Lender Collateral,
(d)
any other request for judicial relief made in any court by any holder of Senior
Lender Claims relating to the lawful enforcement of any Lien on Senior Lender
Collateral or
(e)
any
order relating to a sale of assets of any Grantor for which the First Lien
Agent
has consented that provides, to the extent the sale is to be free and clear
of
Liens, that the Liens securing the Senior Lender Claims and the Second Priority
Claims will attach to the proceeds of the sale on the same basis of priority
as
the Liens securing the Senior Lender Collateral do to the Liens securing the
Second Priority Collateral in accordance with this Agreement.
6.2.
Relief
from the Automatic Stay
.
Until
the Discharge of Senior Lender Claims has occurred, each Second Priority Agent,
on behalf of itself and each applicable Second Priority Secured Party, agrees
that none of them shall seek relief from the automatic stay or any other stay
in
any Insolvency or Liquidation Proceeding in respect of the Common Collateral
or
any other collateral, without the prior written consent of the First Lien Agent
and the Required Lenders.
6.3.
Adequate
Protection
.
Each
Second Priority Agent, on behalf of itself and each applicable Second Priority
Secured Party, agrees that none of them shall contest (or support any other
Person contesting) (a) any request by the First Lien Agent or the Senior Lenders
for adequate protection or (b) any objection by the First Lien Agent or the
Senior Lenders to any motion, relief, action or proceeding based on the First
Lien Agent’s or the Senior Lenders’ claiming a lack of adequate protection.
Notwithstanding the foregoing, in any Insolvency or Liquidation Proceeding,
(i)
if the Senior Lenders (or any subset thereof) are granted adequate protection
in
the form of additional collateral in connection with any DIP Financing or use
of
cash collateral under Section 363 or Section 364 of Title 11 of the United
States Code or any similar Bankruptcy Law, then each Second Priority Agent,
on
behalf of itself and any applicable Second Priority Secured Party, (A) may
seek
or request adequate protection in the form of a replacement Lien on such
additional collateral, which Lien is subordinated to the Liens securing the
Senior Lender Claims and such DIP Financing (and all Obligations relating
thereto) on the same basis as the other Liens securing the Second Priority
Claims are so subordinated to the Liens securing Senior Lender Claims under
this
Agreement and (B) agrees that it will not seek or request, and will not accept,
adequate protection in any other form, and (ii) in the event any Second Priority
Agent, on behalf of itself or any applicable Second Priority Secured Party,
seeks or requests adequate protection and such adequate protection is granted
in
the form of additional collateral, then such Second Priority Agent, on behalf
of
itself or each such Second Priority Secured Party, agrees that the First Lien
Agent shall also be granted a senior Lien on such additional collateral as
security for the applicable Senior Lender Claims and any such DIP Financing
and
that any Lien on such additional collateral securing the Second Priority Claims
shall be subordinated to the Liens on such collateral securing the Senior Lender
Claims and any such DIP Financing (and all Obligations relating thereto) and
any
other Liens granted to the Senior Lenders as adequate protection on the same
basis as the other Liens securing the Second Priority Claims are so subordinated
to such Liens securing Senior Lender Claims under this Agreement.
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6.4.
Avoidance
Issues
.
If any
Senior Lender is required in any Insolvency or Liquidation Proceeding or
otherwise to turn over or otherwise pay to the estate of the Company or any
other Grantor (or any trustee, receiver or similar person therefor), because
the
payment of such amount was declared to be fraudulent or preferential in any
respect or for any other reason, any amount (a “
Recovery
”),
whether received as proceeds of security, enforcement of any right of setoff
or
otherwise, then as among the parties hereto the Senior Lender Claims shall
be
deemed to be reinstated to the extent of such Recovery and to be outstanding
as
if such payment had not occurred and the Senior Lenders shall be entitled to
a
Discharge of Senior Lender Claims with respect to all such recovered amounts
and
shall have all rights hereunder until such time. If this Agreement shall have
been terminated prior to such Recovery, this Agreement shall be reinstated
in
full force and effect, and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties
hereto.
6.5.
Application
.
This
Agreement shall be applicable prior to and after the commencement of any
Insolvency or Liquidation Proceeding. All references herein to any Grantor
shall
apply to any trustee for such Person and such Person as debtor in possession.
The relative rights as to the Common Collateral and other collateral and
proceeds thereof shall continue after the filing thereof on the same basis
as
prior to the date of the petition, subject to any court order approving the
financing of, or use of cash collateral by, any Grantor.
6.6.
Waivers
.
Until
the Discharge of Senior Lender Claims has occurred, each Second Priority Agent,
on behalf of itself and each applicable Second Priority Secured Party, (a)
will
not assert or enforce any claim under Section 506(c) of the United States
Bankruptcy Code senior to or on a parity with the Liens securing the Senior
Lender Claims for costs or expenses of preserving or disposing of any Common
Collateral or other collateral, and (b) waives any claim it may now or hereafter
have arising out of the election by any Senior Lender of the application of
Section 1111(b)(2) of the Bankruptcy Code.
Section
7. Reliance; Waivers; etc.
7.1.
Reliance
.
The
consent by the Senior Lenders to the execution and delivery of the Second
Priority Documents to which the Senior Lenders have consented and all loans
and
other extensions of credit made or deemed made on and after the date hereof
by
the Senior Lenders to the Company or any Subsidiary shall be deemed to have
been
given and made in reliance upon this Agreement. Each Second Priority Agent,
on
behalf of itself and each applicable Second Priority Secured Party, acknowledges
that it and the applicable Second Priority Secured Parties is not entitled
to
rely on any credit decision or other decisions made by the First Lien Agent
or
any Senior Lender in taking or not taking any action under the applicable Second
Priority Document or this Agreement.
7.2.
No
Warranties or Liability
.
Neither
the First Lien Agent nor any Senior Lender shall have been deemed to have made
any express or implied representation or warranty upon which the Second Priority
Agent or the Second Priority Secured Parties may rely, including with respect
to
the execution, validity, legality, completeness, collectibility or
enforceability of any of the Senior Lender Documents, the ownership of any
Common Collateral or the perfection or priority of any Liens thereon. The Senior
Lenders will be entitled to manage and supervise their respective loans and
extensions of credit under the Senior Lender Documents in
accordance
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with
law
and as they may otherwise, in their sole discretion, deem appropriate, and
the
Senior Lenders may manage their loans and extensions of credit without regard
to
any rights or interests that any Second Priority Agent or any of the Second
Priority Secured Parties have in the Common Collateral or otherwise, except
as
otherwise provided in this Agreement. Neither the First Lien Agent nor any
Senior Lender shall have any duty to any Second Priority Agent or any Second
Priority Secured Party to act or refrain from acting in a manner that allows,
or
results in, the occurrence or continuance of an event of default or default
under any agreements with the Company or any Subsidiary thereof (including
the
Second Priority Documents), regardless of any knowledge thereof that they may
have or be charged with. Except as expressly set forth in this Agreement, the
First Lien Agent, the Senior Lenders, the Second Priority Agents and the Second
Priority Secured Parties have not otherwise made to each other, nor do they
hereby make to each other, any warranties, express or implied, nor do they
assume any liability to each other with respect to (a) the enforceability,
validity, value or collectibility of any of the Second Priority Claims, the
Senior Lender Claims or any guarantee or security which may have been granted
to
any of them in connection therewith,
(b)
the
Company’s title to or right to transfer any of the Common Collateral or (c) any
other matter except as expressly set forth in this Agreement.
7.3.
Obligations
Unconditional
.
All
rights, interests, agreements and obligations of the First Lien Agent and the
Senior Lenders, and the Second Priority Agents and the Second Priority Secured
Parties, respectively, hereunder shall remain in full force and effect
irrespective of:
(a)
any
lack
of validity or enforceability of any Senior Lender Documents or any Second
Priority Documents;
(b)
any
change in the time, manner or place of payment of, or in any other terms of,
all
or any of the Senior Lender Claims or Second Priority Claims, or any amendment
or waiver or other modification, including any increase in the amount thereof,
whether by course of conduct or otherwise, of the terms of the Credit Agreement
or any other Senior Lender Document or of the terms of the Second Priority
Senior Secured Notes Indenture or any other Second Priority
Document;
(c)
any
exchange of any security interest in any Common Collateral or any other
collateral, or any amendment, waiver or other modification, whether in writing
or by course of conduct or otherwise, of all or any of the Senior Lender Claims
or Second Priority Claims or any guarantee thereof;
(d)
the
commencement of any Insolvency or Liquidation Proceeding in respect of the
Company or any other Grantor; or
(e)
any
other
circumstances that otherwise might constitute a defense available to, or a
discharge of, the Company or any other Grantor in respect of the Senior Lender
Claims, or of any Second Priority Agent or any Second Priority Secured Party
in
respect of this Agreement.
Section
8. Miscellaneous.
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8.1.
Conflicts
.
Subject
to Section 8.19, in the event of any conflict between the provisions of this
Agreement and the provisions of any Senior Lender Document or any Second
Priority Document, the provisions of this Agreement shall govern.
8.2.
Continuing
Nature of this Agreement; Severability
.
Subject
to Section 6.4, this Agreement shall continue to be effective until the
Discharge of Senior Lender Claims shall have occurred or such later time as
all
the Obligations in respect of the Second Priority Claims shall have been paid
in
full. This is a continuing agreement of lien subordination and the Senior
Lenders may continue, at any time and without notice to each Second Priority
Agent or any Second Priority Secured Party, to extend credit and other financial
accommodations and lend monies to or for the benefit of the Company or any
other
Grantor constituting Senior Lender Claims in reliance hereon. The terms of
this
Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding. Any provision of this Agreement that
is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
8.3.
Amendments;
Waivers
.
No
amendment, modification or waiver of any of the provisions of this Agreement
by
any Second Priority Agent or any First Lien Agent shall be deemed to be made
unless the same shall be in writing signed on behalf of the party making the
same or its authorized agent and each waiver, if any, shall be a waiver only
with respect to the specific instance involved and shall in no way impair the
rights of the parties making such waiver or the obligations of the other parties
to such party in any other respect or at any other time. The Company and the
other Grantors shall not have any right to consent to or approve any amendment,
modification or waiver of any provision of this Agreement except to the extent
their rights are affected. Notwithstanding anything in this Section 8.3 to
the
contrary, this Agreement may be amended from time to time at the request of
the
Company, at the Company’s expense, and without the consent of any Second
Priority Agent, the First Lien Agent, any Senior Lender or any Second Priority
Secured Party to (i) add other parties holding Future Second Lien Indebtedness
(or any agent or trustee therefor) to the extent such Indebtedness is not
prohibited by the Credit Agreement, the Second Priority Senior Secured Notes
Indenture or any other Second Priority Document governing Future Second Lien
Indebtedness and (ii) in the case of Future Second Lien Indebtedness, (a)
establish that the Lien on the Common Collateral securing such Future Second
Lien Indebtedness shall be junior and subordinate in all respects to all Liens
on the Common Collateral securing any Senior Lender Claims and shall share
in
the benefits of the Common Collateral equally and ratably with all Liens on
the
Common Collateral securing any Second Priority Claims, and (b) provide to the
holders of such Future Second Lien Indebtedness (or any agent or trustee
thereof) the comparable rights and benefits (including any improved rights
and
benefits that have been consented to by the First Lien Agent) as are provided
to
the holders of Second Priority Claims under this Agreement. Any such additional
party and each Second Priority Agent shall be entitled to rely on the
determination of officers of the Company that such modifications do not violate
the Credit Agreement, the Second Priority Senior Secured Notes Indenture or
any
other Second Priority Document governing Future Second Lien Indebtedness if
such
determination is set forth in an Officers’ Certificate delivered to such party,
the First Lien Agent and each Second Priority Agent; provided, however, that
such determination will not affect whether or not the Company has complied
with
its undertakings in the Credit Agreement, the Senior Collateral Documents,
the
Second Priority Senior Secured
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Notes
Indenture, any other Second Priority Document governing Future Second Lien
Indebtedness, the Second Priority Collateral Documents or this
Agreement.
8.4.
Information
Concerning Financial Condition of the Company and the
Subsidiaries
.
Neither
the First Lien Agent nor any Senior Lender shall have any obligation to the
Second Priority Agent or any Second Priority Secured Party to keep the
Second Priority Agent or any Second Priority Secured Party informed of, and
the
Second Priority Agent and the Second Priority Secured Parties shall not be
entitled to rely on the First Lien Agent or the Senior Lenders with respect
to,
(a) the financial condition of the Company and the Subsidiaries and all
endorsers and/or guarantors of the Second Priority Claims or the Senior Lender
Claims and (b) all other circumstances bearing upon the risk of nonpayment
of
the Second Priority Claims or the Senior Lender Claims. The First Lien Agent,
the Senior Lenders, each Second Priority Agent and the Second Priority Secured
Parties shall have no duty to advise any other party hereunder of information
known to it or them regarding such condition or any such circumstances or
otherwise. In the event that the First Lien Agent, any Senior Lender, any Second
Priority Agent or any Second Priority Secured Party, in its or their sole
discretion, undertakes at any time or from time to time to provide any such
information to any other party, it or they shall be under no obligation (w)
to
make, and the First Lien Agent, the Senior Lenders, the Second Priority Agents
and the Second Priority Secured Parties shall not make, any express or implied
representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of any such information so provided,
(x)
to provide any additional information or to provide any such information on
any
subsequent occasion, (y) to undertake any investigation or (z) to disclose
any
information that, pursuant to accepted or reasonable commercial finance
practices, such party wishes to maintain confidential or is otherwise required
to maintain confidential.
8.5.
Subrogation
.
Each
Second Priority Agent, on behalf of itself and each applicable Second Priority
Secured Party, hereby waives any rights of subrogation it may acquire as a
result of any payment hereunder until the Discharge of Senior Lender Claims
has
occurred.
8.6.
Application
of Payments
.
Except
as otherwise provided herein, all payments received by the Senior Lenders may
be
applied, reversed and reapplied, in whole or in part, to such part of the Senior
Lender Claims as the Senior Lenders, in their sole discretion, deem appropriate,
consistent with the terms of the Senior Lender Documents. Except as otherwise
provided herein, each Second Priority Agent, on behalf of itself and each
applicable Second Priority Secured Party, assents to any such extension or
postponement of the time of payment of the Senior Lender Claims or any part
thereof and to any other indulgence with respect thereto, to any substitution,
exchange or release of any security that may at any time secure any part of
the
Senior Lender Claims and to the addition or release of any other Person
primarily or secondarily liable therefor.
8.7.
Consent
to Jurisdiction; Waivers
.
The
parties hereto consent to the nonexclusive jurisdiction of any state or federal
court located in New York, New York (the “
New
York Courts
”),
and
consent that all service of process may be made by registered mail directed
to
such party as provided in Section 8.8 for such party. Service so made shall
be
deemed to be completed three days after the same shall be posted as aforesaid.
The parties hereto waive any objection to any action instituted hereunder in
any
such court based on forum non conveniens, and any objection to the venue of
any
action instituted hereunder in any such
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court.
Each of the parties hereto waives any right it may have to trial by jury in
respect of any litigation based on, or arising out of, under or in connection
with this Agreement, or any course of conduct, course of dealing, verbal or
written statement or action of any party hereto in connection with the subject
matter hereof. Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Agreement
in the courts of any jurisdiction, except that each Loan Party, each Second
Priority Secured Party and each Second Priority Agent agrees that (a) it will
not bring any such action or proceeding in any court other than New York Courts
(it being acknowledged and agreed by the parties hereto that any other forum
would be inconvenient and inappropriate in view of the fact that more of the
holders of Senior Lender Claims and Second Priority Claims who would be affected
by any such action or proceeding have contacts with the State of New York than
any other jurisdiction), and (b) in any such action or proceeding brought
against any Second Priority Agent or any Loan Party or any Second Priority
Secured Party in any other court, it will not assert any cross-claim,
counterclaim or setoff, or seek any other affirmative relief, except to the
extent that the failure to assert the same will preclude such Loan Party or
such
Second Priority Secured Party from asserting or seeking the same in the New
York
Courts.
8.8.
Notices
.
All
notices to the Second Priority Secured Parties and the Senior Lenders permitted
or required under this Agreement may be sent to the Trustee, the First Lien
Agent or any Second Priority Agent as provided in the Second Priority Senior
Secured Notes Indenture, the Credit Agreement, the other relevant Senior Lender
Documents or the other relevant Second Priority Documents, as applicable. Unless
otherwise specifically provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telecopied, electronically mailed or sent by courier service or U.S.
mail and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of a telecopy or electronic mail or upon receipt
via U.S. mail (registered or certified, with postage prepaid and properly
addressed). For the purposes hereof, the addresses of the parties hereto shall
be as set forth below each party’s name on the signature pages hereto, or, as to
each party, at such other address as may be designated by such party in a
written notice to all of the other parties. The First Lien Agent hereby agrees
to promptly notify each Second Priority Agent upon payment in full in cash
of
all Indebtedness under the applicable Senior Lender Documents (except for
contingent indemnities and cost and reimbursement obligations to the extent
no
claim therefor has been made).
8.9.
Further
Assurances
.
Each of
the Second Priority Agents, on behalf of itself and each applicable Second
Priority Secured Party, and the First Lien Agent, on behalf of itself and each
Senior Lender, agrees that each of them shall take such further action and
shall
execute and deliver to the First Lien Agent and the Senior Lenders such
additional documents and instruments (in recordable form, if requested) as
the
First Lien Agent or the Senior Lenders may reasonably request, at the expense
of
the Company, to effectuate the terms of and the lien priorities contemplated
by
this Agreement.
8.10.
Governing
Law
.
This
Agreement has been delivered and accepted in and shall be deemed to have been
made in New York, New York and shall be interpreted, and the rights and
liabilities of the parties bound hereby determined, in accordance with the
laws
of the State of New York.
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8.11.
Binding
on Successors and Assigns
.
This
Agreement shall be binding upon the First Lien Agent, the Senior Lenders, the
Second Priority Agents, the Second Priority Secured Parties, Holdings, the
Company, the Company’s Subsidiaries party hereto and their respective permitted
successors and assigns.
8.12.
Specific
Performance
.
The
First Lien Agent may demand specific performance of this Agreement. Each Second
Priority Agent, on behalf of itself and each applicable Second Priority Secured
Party, hereby irrevocably waives any defense based on the adequacy of a remedy
at law and any other defense that might be asserted to bar the remedy of
specific performance in any action that may be brought by the First Lien
Agent.
8.13.
Section
Titles
.
The
section titles contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of this
Agreement.
8.14.
Counterparts
.
This
Agreement may be executed in one or more counterparts, including by means of
facsimile, each of which shall be an original and all of which shall together
constitute one and the same document.
8.15.
Authorization
.
By its
signature, each Person executing this Agreement on behalf of a party hereto
represents and warrants to the other parties hereto that it is duly authorized
to execute this Agreement. The First Lien Agent represents and warrants that
this Agreement is binding upon the Senior Lenders. The Trustee represents and
warrants that this Agreement is binding upon the Indenture Secured
Parties.
8.16.
No
Third Party Beneficiaries; Successors and Assigns
.
This
Agreement and the rights and benefits hereof shall inure to the benefit of,
and
be binding upon, each of the parties hereto and their respective successors
and
assigns and shall inure to the benefit of each of, and be binding upon, the
holders of Senior Lender Claims and Second Priority Claims. No other Person
shall have or be entitled to assert rights or benefits hereunder.
8.17.
Effectiveness
.
This
Agreement shall become effective when executed and delivered by the parties
hereto. This Agreement shall be effective both before and after the commencement
of any Insolvency or Liquidation Proceeding. All references to the Company
or
any other Grantor shall include the Company or any other Grantor as debtor
and
debtor-in-possession and any receiver or trustee for the Company or any other
Grantor (as the case may be) in any Insolvency or Liquidation
Proceeding.
8.18.
First
Lien Agent and Second Priority Agents
.
It is
understood and agreed that (a) Credit Suisse is entering into this Agreement
in
its capacity as administrative agent under the Credit Agreement and the
provisions of Article VIII of the Credit Agreement applicable to Credit Suisse
as administrative agent thereunder shall also apply to Credit Suisse as First
Lien Agent hereunder, (b) Wells Fargo is entering in this Agreement in its
capacity as Trustee, and the provisions of Article 7 of the Second Priority
Senior Secured Notes Indenture applicable to the Trustee thereunder shall also
apply to the Trustee hereunder.
8.19.
Relative
Rights
.
Notwithstanding anything in this Agreement to the contrary (except to the extent
contemplated by Section 5.3(b)), nothing in this Agreement is intended to or
will (a) amend, waive or otherwise modify the provisions of the Credit
Agreement, the Second Priority Senior Secured Notes Indenture or any other
Senior Lender Documents or Second Priority Documents entered into in connection
with the Credit Agreement, the Second Priority Senior Secured Notes Indenture
or
any other Senior Lender Document or Second Priority Document or permit Holdings,
the Company or any Subsidiary to take any action, or fail to take any action,
to
the extent such action or failure would otherwise constitute a breach of, or
default under, the Credit Agreement or any other Senior Lender Documents entered
into in connection with the Credit Agreement, the Second Priority Senior Secured
Notes Indenture or any other Second Priority Documents, (b) change the relative
priorities of the Senior Lender Claims or the Liens granted under the Senior
Lender Documents on the Common Collateral (or any other assets) as among the
Senior Lenders, (c) otherwise change the relative rights of the Senior Lenders
in respect of the Common Collateral as among such Senior Lenders or (d) obligate
Holdings, the Company or any Subsidiary to take any action, or fail to take
any
action, that would otherwise constitute a breach of, or default under, the
Credit Agreement or any other Senior Lender Document entered into in connection
with the Credit Agreement, the Second Priority Senior Secured Notes Indenture
or
any other Second Priority Documents.
8.20.
References
.
Notwithstanding anything to the contrary in this Agreement, any references
contained herein to any Section, clause, paragraph, definition or other
provision of the Second Priority Senior Secured Notes Indenture (including
any
definition contained therein) shall be deemed to be a reference to such Section,
clause, paragraph, definition or other provision as in effect on the date of
this Agreement; provided that any reference to any such Section, clause,
paragraph or other provision shall refer to such Section, clause, paragraph
or
other provision of the Second Priority Senior Secured Notes Indenture, as
applicable (including any definition contained therein), as amended or modified
from time to time if such amendment or modification has been (1) made in
accordance with the Second Priority Senior Secured Notes Indenture, and (2)
approved in writing by, or on behalf of, the requisite Senior Lenders as are
needed under the terms of the Credit Agreement to approve such amendment or
modification.
8.21.
Supplements
.
Upon
the execution by any Subsidiary of the Company of a supplement hereto in form
and substance satisfactory to the First Lien Agent, such Subsidiary shall be
a
party to this Agreement and shall be bound by the provisions hereof to the
same
extent as the Company and each other Grantor are so bound.
[Remainder
of page intentionally left blank]
|
NY\1176130.13
||
|
038263-0065
||
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
CREDIT
SUISSE, CAYMAN ISLANDS BRANCH,
as
First
Lien Agent
By:
__________________________________
Name:
Title:
By:
__________________________________
Name:
Title:
Address:
Eleven Madison Avenue, New York, NY 10010, Attention: Agency Group
Telecopier:
(212) 325-8304
Intercreditor
Agreement Signature Page
|
NY\1176130.13
||
|
038263-0065
||
WELLS
FARGO BANK, N.A.,
as
Trustee
By:
__________________________________
Name:
Title:
Address:
Corporate Trust Services, 213 Court Street,
Suite
703, Middletown, CT 06457
Attention:
Joseph P. O'Donnell
Telecopier:
860-704-6219
Intercreditor
Agreement Signature Page
|
NY\1176130.13
||
|
038263-0065
||
BERRY
PLASTICS GROUP, INC.
By:
__________________________________
Name:
Title:
Address:
101 Oakley St., Evansville, IN 47710,
Attention:
James M. Kratochvil
Telecopier:
(812) 424-0128
Intercreditor
Agreement Signature Page
|
NY\1176130.13
||
|
038263-0065
||
BPC
ACQUISITION CORP.
By:
__________________________________
Name:
Title:
Address:
101 Oakley St., Evansville, IN 47710,
Attention:
James M. Kratochvil
Telecopier:
(812) 424-0128
Intercreditor
Agreement Signature Page
|
NY\1176130.13
||
|
038263-0065
||
Upon
consummation of the Merger:
BPC
Holding Corporation
|
Berry
Plastics Corporation
|
AeroCon,
Inc.
|
Berry
Iowa Corporation
|
Berry
Plastics Design Corporation
|
Berry
Sterling Corporation
|
Berry
Plastics Technical Services, Inc.
|
Cardinal
Packaging, Inc.
|
CPI
Holding Corporation
|
Knight
Plastics, Inc.
|
Landis
Plastics, Inc.
|
Packerware
Corporation
|
Pescor,
Inc.
|
Poly-Seal
Corporation
|
Venture
Packaging, Inc.
|
Venture
Packaging Midwest, Inc.
|
Berry
Plastics Acquisition Corporation III
|
Berry
Plastics Acquisition Corporation V
|
Berry
Plastics Acquisition Corporation VII
|
Berry
Plastics Acquisition Corporation VIII
|
Berry
Plastics Acquisition Corporation IX
|
Berry
Plastics Acquisition Corporation X
|
Berry
Plastics Acquisition Corporation XI
|
Berry
Plastics Acquisition Corporation XII
|
Berry
Plastics Acquisition Corporation XIII
|
Kerr
Group, Inc.
|
Saffron
Acquisition Corp.
|
Sun
Coast Industries, Inc.
|
Berry
Plastics Acquisition Corporation XV, LLC
|
Setco,
LLC
|
Tubed
Products, LLC
|
By:
__________________________________
Name:
Title:
Address:
101 Oakley St., Evansville, IN 47710,
Attention:
James M. Kratochvil
Telecopier:
(812) 424-012
39
|
NY\1176130.13
||
|
038263-0065
||
SCHEDULE
I
BPC
Holding Corporation
|
Berry
Plastics Corporation
|
AeroCon,
Inc.
|
Berry
Iowa Corporation
|
Berry
Plastics Design Corporation
|
Berry
Sterling Corporation
|
Berry
Plastics Technical Services, Inc.
|
Cardinal
Packaging, Inc.
|
CPI
Holding Corporation
|
Knight
Plastics, Inc.
|
Landis
Plastics, Inc.
|
Packerware
Corporation
|
Pescor,
Inc.
|
Poly-Seal
Corporation
|
Venture
Packaging, Inc.
|
Venture
Packaging Midwest, Inc.
|
Berry
Plastics Acquisition Corporation III
|
Berry
Plastics Acquisition Corporation V
|
Berry
Plastics Acquisition Corporation VII
|
Berry
Plastics Acquisition Corporation VIII
|
Berry
Plastics Acquisition Corporation IX
|
Berry
Plastics Acquisition Corporation X
|
Berry
Plastics Acquisition Corporation XI
|
Berry
Plastics Acquisition Corporation XII
|
Berry
Plastics Acquisition Corporation XIII
|
Kerr
Group, Inc.
|
Saffron
Acquisition Corp.
|
Sun
Coast Industries, Inc.
|
Berry
Plastics Acquisition Corporation XV, LLC
|
Setco,
LLC
|
Tubed
Products, LLC
|
October
31, 2006
Berry
Plastics Holding Corporation
101
Oakley Street
Evansville,
IN 47710
|
RE:
|
Berry
Plastics Holding Corporation
|
|
|
Registration
Statement on Form S-4
|
Ladies
and Gentlemen:
Reference
is made to the Registration Statement on Form S-4 (the “Registration Statement”)
filed under the Securities Act of 1933, as amended (the “Act”), with the
Securities and Exchange Commission (the “SEC”) by Berry Plastics Holding
Corporation (the “Company”) and by the entities listed on Exhibit A
attached hereto (the “Guarantors”). The Registration Statement relates to the
proposed offer by the Company and the Guarantors to exchange up to $750,000,000
aggregate principal amount of new Second Priority Senior Secured Fixed and
Floating Rate Notes due 2014, comprised of $525,000,000 8 7/8% Second
Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000 Second
Priority Senior Secured Floating Rate Notes due 2014 (the “Exchange Notes”) for
the Company’s outstanding 8 7/8% Second Priority Senior Secured Fixed Rate
Notes and Second Priority Senior Secured Floating Rate Notes (the “Outstanding
Notes”). The Exchange Notes will be issued under an Indenture dated as of
September 20, 2006 (the “Indenture”) among the Company, the Guarantors and Wells
Fargo Bank, National Association, as trustee (the “Trustee”). The Exchange Notes
will be guaranteed (the “Guarantees”) by the Guarantors pursuant to the
Indenture.
As
General Counsel of the Company and in connection with this opinion letter,
I
have examined the Registration Statement, the Indenture originals, or copies
(certified or otherwise identified to my satisfaction) of the organizational
documents of the Company and each of the Guarantors and such other documents,
records and instruments as I have deemed appropriate for purposes of the opinion
set forth herein.
I
have
assumed the genuineness of all signatures, the legal capacity of all natural
persons, the authenticity of the documents submitted to me as originals, the
conformity with the originals of all documents submitted to me as certified,
facsimile or photostatic copies and the authenticity of the originals of all
documents submitted to me as copies.
I
have
also assumed for purposes of this opinion that the Indenture has been duly
authorized, executed and delivered by the Trustee, that the Indenture
constitutes a legal, valid and binding obligation of the Trustee, and that
the
Trustee has the requisite organizational and legal power and authority to
perform its obligations under the Indenture.
Berry
Plastics Holding Corporation
October
30, 2006
Page
2
of
3
Based
upon the foregoing, I am of the opinion that when the Exchange Notes, in the
form included in the Indenture, have been duly executed and authenticated in
accordance with the Indenture, and are duly issued and delivered by the Company
in exchange for the Outstanding Notes as described in the Registration
Statement, (a) the Exchange Notes will constitute valid and binding obligations
of the Company enforceable against the Company in accordance with their
respective terms and (b) each Guarantee will constitute valid and binding
obligations of the Guarantor that is a party thereto, enforceable against such
Guarantor in accordance with its terms.
The
opinions expressed herein are subject to bankruptcy, insolvency, fraudulent
transfer and other similar laws affecting the rights and remedies of creditors
generally and general principles of equity.
Under
applicable law, guarantors may be entitled to certain rights or protections,
which as a matter of statutory or common law may not be waived or altered.
I
express no opinion herein as to the enforceability of any provisions of a
Guarantee that purports to waive or alter such rights of protections, except
to
the extent permitted by law.
The
opinions expressed herein are limited to the laws of the State of
Indiana.
I
hereby
consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to me under the caption “Legal Matters” in the
prospectus included in the Registration Statement. In giving such consent,
I do
not hereby admit that I am acting within the category of persons whose consent
is required under Section 7 of the Act or the rules or regulations of the
SEC thereunder.
Very
truly yours,
Jeffrey
D. Thompson
Vice
President and General Counsel
JDT/klh
Enclosure
K:\Legal\SEC\S
4 - Apollo Deal\GC Opinion.doc
EXHIBIT
A
Guarantor
|
State
of Incorporation
|
Federal
EIN
|
Berry
Plastics Corporation
|
Delaware
|
35-1813708
|
Aerocon,
Inc.
|
Delaware
|
35-1948748
|
Berry
Iowa Corporation
|
Delaware
|
42-1382173
|
Berry
Plastics Design Corporation
|
Delaware
|
62-1689708
|
Berry
Plastics Technical Services, Inc.
|
Delaware
|
57-1028638
|
Berry
Sterling Corporation
|
Delaware
|
54-1749681
|
CPI
Holding Corporation
|
Delaware
|
34-1820303
|
Knight
Plastics, Inc.
|
Delaware
|
35-2056610
|
Packerware
Corporation
|
Delaware
|
48-0759852
|
Pescor,
Inc.
|
Delaware
|
74-3002028
|
Poly-Seal
Corporation
|
Delaware
|
52-0892112
|
Venture
Packaging, Inc.
|
Delaware
|
51-0368479
|
Venture
Packaging Midwest, Inc.
|
Delaware
|
34-1809003
|
Berry
Plastics Acquisition Corporation III
|
Delaware
|
37-1445502
|
Berry
Plastics Acquisition Corporation V
|
Delaware
|
36-4509933
|
Berry
Plastics Acquisition Corporation VII
|
Delaware
|
30-0120989
|
Berry
Plastics Acquisition Corporation VIII
|
Delaware
|
32-0036809
|
Berry
Plastics Acquisition Corporation IX
|
Delaware
|
35-2184302
|
Berry
Plastics Acquisition Corporation X
|
Delaware
|
35-2184301
|
Berry
Plastics Acquisition Corporation XI
|
Delaware
|
35-2184300
|
Berry
Plastics Acquisition Corporation XII
|
Delaware
|
35-2184299
|
Berry
Plastics Acquisition Corporation XIII
|
Delaware
|
35-2184298
|
Berry
Plastics Acquisition Corporation XV, LLC
|
Delaware
|
35-2184293
|
Kerr
Group, Inc.
|
Delaware
|
95-0898810
|
Saffron
Acquisition Corporation
|
Delaware
|
94-3293114
|
Setco,
LLC
|
Delaware
|
56-2374074
|
Sun
Coast Industries, Inc.
|
Delaware
|
59-1952968
|
Tubed
Products, LLC
|
Delaware
|
56-2374082
|
Cardinal
Packaging, Inc.
|
Ohio
|
34-1396561
|
Landis
Plastics, Inc.
|
Illinois
|
36-2471333
|
$875,000,000
CREDIT
AGREEMENT
Dated
as
of September 20, 2006,
among
BERRY
PLASTICS GROUP, INC.,
BPC
ACQUISITION CORP.,
(which
on
the Closing Date shall be merged with and into BPC Holding Corporation,
with
BPC
Holding Corporation surviving such merger as the borrower),
as
Borrower,
THE
LENDERS PARTY HERETO,
CREDIT
SUISSE, CAYMAN ISLANDS BRANCH,
as
Administrative Agent,
CITICORP
NORTH AMERICA, INC.,
as
Syndication Agent,
DEUTSCHE
BANK SECURITIES INC.
and
J.P.
MORGAN SECURITIES INC.,
as
Co-Documentation Agents
CREDIT
SUISSE SECURITIES (USA) LLC
DEUTSCHE
BANK SECURITIES, INC.
J.P.
MORGAN SECURITIES INC.
and
CITIGROUP
GLOBAL MARKETS INC.
,
as
Joint
Bookrunners
_________________
CREDIT
SUISSE SECURITIES (USA) LLC
and
CITIGROUP
GLOBAL MARKETS INC.,
as
Joint
Lead Arrangers
|
NY\1169071.12
||
|
038263-0065
||
TABLE
OF
CONTENTS
ARTICLE
I
Definitions
SECTION
1.01.
|
Defined
Terms
|
1
|
SECTION
1.02.
|
Terms
Generally
|
48
|
SECTION
1.03.
|
Effectuation
of Transactions
|
49
|
SECTION
1.04.
|
Exchange
Rates; Currency Equivalents.
|
49
|
ARTICLE
II
The
Credits
SECTION
2.01.
|
Commitments
|
49
|
SECTION
2.02.
|
Loans
and Borrowings
|
50
|
SECTION
2.03.
|
Requests
for Borrowings
|
51
|
SECTION
2.04.
|
Swingline
Loans
|
51
|
SECTION
2.05.
|
Letters
of Credit
|
53
|
SECTION
2.06.
|
Funding
of Borrowings
|
58
|
SECTION
2.07.
|
Interest
Elections
|
59
|
SECTION
2.08.
|
Termination
and Reduction of Commitments
|
60
|
SECTION
2.09.
|
Repayment
of Loans; Evidence of Debt
|
61
|
SECTION
2.10.
|
Repayment
of Term Loans and Revolving Facility Loans
|
62
|
SECTION
2.11.
|
Prepayment
of Loans
|
64
|
SECTION
2.12.
|
Fees
|
65
|
SECTION
2.13.
|
Interest
|
66
|
SECTION
2.14.
|
Alternate
Rate of Interest
|
67
|
SECTION
2.15.
|
Increased
Costs
|
67
|
SECTION
2.16.
|
Break
Funding Payments
|
69
|
SECTION
2.17.
|
Taxes
|
69
|
SECTION
2.18.
|
Payments
Generally; Pro Rata Treatment; Sharing of Set offs
|
71
|
SECTION
2.19.
|
Mitigation
Obligations; Replacement of Lenders
|
73
|
SECTION
2.20.
|
Illegality
|
74
|
SECTION
2.21.
|
Incremental
Commitments
|
74
|
ARTICLE
III
Representations
and Warranties
SECTION
3.01.
|
Organization;
Powers
|
76
|
SECTION
3.02.
|
Authorization
|
77
|
SECTION
3.03.
|
Enforceability
|
77
|
SECTION
3.04.
|
Governmental
Approvals
|
77
|
SECTION
3.05.
|
Financial
Statements
|
77
|
SECTION
3.06.
|
No
Material Adverse Effect
|
78
|
SECTION
3.07.
|
Title
to Properties; Possession Under Leases
|
78
|
SECTION
3.08.
|
Subsidiaries
|
79
|
SECTION
3.09.
|
Litigation;
Compliance with Laws
|
79
|
SECTION
3.10.
|
Federal
Reserve Regulations
|
80
|
SECTION
3.11.
|
Investment
Company Act
|
80
|
SECTION
3.12.
|
Use
of Proceeds
|
80
|
SECTION
3.13.
|
Tax
Returns
|
80
|
SECTION
3.14.
|
No
Material Misstatements
|
81
|
SECTION
3.15.
|
Employee
Benefit Plans
|
81
|
SECTION
3.16.
|
Environmental
Matters
|
82
|
SECTION
3.17.
|
Security
Documents
|
82
|
SECTION
3.18.
|
Location
of Real Property and Leased Premises
|
83
|
SECTION
3.19.
|
Solvency
|
84
|
SECTION
3.20.
|
Labor
Matters
|
84
|
SECTION
3.21.
|
Insurance
|
85
|
SECTION
3.22.
|
No
Default
|
85
|
SECTION
3.23.
|
Intellectual
Property; Licenses, Etc.
|
85
|
SECTION
3.24.
|
Senior
Debt
|
85
|
ARTICLE
IV
Conditions
of Lending
SECTION
4.01.
|
All
Credit Events
|
85
|
SECTION
4.02.
|
First
Credit Event
|
86
|
ARTICLE
V
Affirmative
Covenants
SECTION
5.01.
|
Existence;
Businesses and Properties
|
90
|
SECTION
5.02.
|
Insurance
|
90
|
SECTION
5.03.
|
Taxes
|
91
|
SECTION
5.04.
|
Financial
Statements, Reports, etc.
|
91
|
SECTION
5.05.
|
Litigation
and Other Notices
|
94
|
SECTION
5.06.
|
Compliance
with Laws
|
95
|
SECTION
5.07.
|
Maintaining
Records; Access to Properties and Inspections
|
95
|
SECTION
5.08.
|
Use
of Proceeds
|
95
|
SECTION
5.09.
|
Compliance
with Environmental Laws
|
95
|
SECTION
5.10.
|
Further
Assurances; Additional Security
|
95
|
SECTION
5.11.
|
Rating
|
97
|
SECTION
5.12.
|
Compliance
with Material Contracts
|
97
|
ARTICLE
VI
Negative
Covenants
SECTION
6.01.
|
Indebtedness
|
98
|
SECTION
6.02.
|
Liens
|
102
|
SECTION
6.03.
|
Sale
and Lease Back Transactions
|
106
|
SECTION
6.04.
|
Investments,
Loans and Advances
|
106
|
SECTION
6.05.
|
Mergers,
Consolidations, Sales of Assets and Acquisitions
|
110
|
SECTION
6.06.
|
Dividends
and Distributions
|
113
|
SECTION
6.07.
|
Transactions
with Affiliates
|
115
|
SECTION
6.08.
|
Business
of the Borrower and the Subsidiaries
|
118
|
SECTION
6.09.
|
Limitation
on Modifications of Indebtedness; Modifications of Certificate
of
|
|
|
Incorporation,
By Laws and Certain Other Agreements; etc.
|
118
|
SECTION
6.10.
|
[Intentionally
Omitted]
|
120
|
SECTION
6.11.
|
Total
Net First Lien Leverage Ratio
|
120
|
SECTION
6.12.
|
[Intentionally
Omitted]
|
120
|
SECTION
6.13.
|
No
Other “Designated Senior Debt”
|
120
|
SECTION
6.14.
|
Fiscal
Year; Accounting
|
121
|
ARTICLE
VIA
Holdings
Negative Covenants
ARTICLE
VII
Events
of
Default
SECTION
7.01.
|
Events
of Default
|
121
|
SECTION
7.02.
|
Exclusion
of Immaterial Subsidiaries
|
125
|
SECTION
7.03.
|
Right
to Cure; Holdings’ Right to Cure
|
125
|
ARTICLE
VIII
The
Agents
SECTION
8.01.
|
Appointment
|
125
|
SECTION
8.02.
|
Delegation
of Duties
|
127
|
SECTION
8.03.
|
Exculpatory
Provisions
|
128
|
SECTION
8.04.
|
Reliance
by Administrative Agent
|
129
|
SECTION
8.05.
|
Notice
of Default
|
129
|
SECTION
8.06.
|
Non-Reliance
on Agents and Other Lenders
|
129
|
SECTION
8.07.
|
Indemnification
|
130
|
SECTION
8.08.
|
Agent
in Its Individual Capacity
|
131
|
SECTION
8.09.
|
Successor
Administrative Agent
|
131
|
SECTION
8.10.
|
Agents
and Arrangers
|
131
|
ARTICLE
IX
Miscellaneous
SECTION
9.01.
|
Notices;
Communications
|
131
|
SECTION
9.02.
|
Survival
of Agreement
|
133
|
SECTION
9.03.
|
Binding
Effect
|
133
|
SECTION
9.04.
|
Successors
and Assigns
|
133
|
SECTION
9.05.
|
Expenses;
Indemnity
|
137
|
SECTION
9.06.
|
Right
of Set off
|
139
|
SECTION
9.07.
|
Applicable
Law
|
139
|
SECTION
9.08.
|
Waivers;
Amendment
|
139
|
SECTION
9.09.
|
Interest
Rate Limitation
|
141
|
SECTION
9.10.
|
Entire
Agreement
|
142
|
SECTION
9.11.
|
WAIVER
OF JURY TRIAL
|
142
|
SECTION
9.12.
|
Severability
|
142
|
SECTION
9.13.
|
Counterparts
|
142
|
SECTION
9.14.
|
Headings
|
143
|
SECTION
9.15.
|
Jurisdiction;
Consent to Service of Process
|
143
|
SECTION
9.16.
|
Confidentiality
|
143
|
SECTION
9.17.
|
Platform;
Borrower Materials
|
144
|
SECTION
9.18.
|
Release
of Liens and Guarantees
|
144
|
SECTION
9.19.
|
Judgment
Currency
|
145
|
SECTION
9.20.
|
USA
PATRIOT Act Notice
|
145
|
|
NY\1169071.12
||
|
038263-0065
||
Exhibits
and Schedules
Exhibit
A
|
Form
of Assignment and Acceptance
|
Exhibit B
|
Form
of Solvency Certificate
|
Exhibit C-1
|
Form
of Borrowing Request
|
Exhibit C-2
|
Form
of Swingline Borrowing Request
|
Exhibit D
|
Form
of Mortgage
|
Exhibit E
|
Form
of Collateral Agreement
|
Schedule 1.01(a)
|
Certain
U.S. Subsidiaries
|
Schedule 1.01(b)
|
Mortgaged
Properties
|
Schedule 1.01(c)
|
Existing
Letters of Credit
|
Schedule
1.01(d)
|
Immaterial
Subsidiaries
|
Schedule
1.01(e)
|
Pro
Forma Adjustments
|
Schedule
1.01(f)
|
Unrestricted
Subsidiaries
|
Schedule 2.01
|
Commitments
|
Schedule 3.01
|
Organization
and Good Standing
|
Schedule 3.04
|
Governmental
Approvals
|
Schedule
3.07(b)
|
Leased
Properties
|
Schedule 3.07(c)
|
Intellectual
Property
|
Schedule 3.08(a)
|
Subsidiaries
|
Schedule 3.08(b)
|
Subscriptions
|
Schedule 3.16
|
Environmental
Matters
|
Schedule 3.23
|
Intellectual
Property
|
Schedule 4.02(b)
|
Local
Counsel
|
Schedule 4.02(d)
|
Post-Closing
Interest Deliveries
|
Schedule 6.01
|
Indebtedness
|
Schedule 6.04
|
Investments
|
Schedule 6.07
|
Transactions
with Affiliates
|
Schedule 9.01
|
Notice
Information
|
|
NY\1169071.12
||
|
038263-0065
||
CREDIT
AGREEMENT dated as of September 20, 2006 (this “
Agreement
”),
among
BERRY PLASTICS GROUP, INC. (formerly known as BPC Holding Acquisition Corp.),
a
Delaware corporation (“
Holdings
”),
BPC
ACQUISITION CORP., a Delaware corporation, which on the Closing Date shall
be
merged with and into BPC Holding Corporation, a Delaware corporation, with
BPC
Holding Corporation surviving such merger as the borrower (the “
Borrower
”),
the
LENDERS party hereto from time to time, CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
as
administrative agent and collateral agent (in such capacities, the “
Administrative
Agent
”)
for
the Lenders, CITICORP NORTH AMERICA, INC., as syndication agent (in such
capacity, the “
Syndication
Agent
”),
and
DEUTSCHE BANK SECURITIES INC. and J.P. MORGAN SECURITIES INC., as
co-documentation agents (in such capacities, the “
Documentation
Agents
”).
WHEREAS,
affiliates of Apollo Management VI, L.P. and Graham Partners Inc. (collectively,
the “
Funds
”)
have
formed Holdings and BPC Acquisition Corp. for the purpose of entering into
that
certain Agreement and Plan of Merger dated as of June 28, 2006 (the
“
Acquisition
Agreement
”)
by and
among BPC HOLDING CORPORATION (“
Target
”),
BPC
Holding Acquisition Corp and BPC Acquisition Corp., pursuant to which BPC
Acquisition Corp. will merge with and into the Target, with Target surviving
such merger (the “
Acquisition
”);
WHEREAS,
in connection with the consummation of the Acquisition, the Borrower has
requested the Lenders to extend credit in the form of (a) Term B Loans on the
Closing Date, in an aggregate principal amount not in excess of $675.0 million,
and (b) Revolving Facility Loans and Letters of Credit at any time and from
time
to time prior to the Revolving Facility Maturity Date, in an aggregate principal
amount at any time outstanding not in excess of $200.0 million;
NOW,
THEREFORE, the Lenders are willing to extend such credit to the Borrower on
the
terms and subject to the conditions set forth herein. Accordingly, the parties
hereto agree as follows:
ARTICLE
I
Definitions
SECTION
1.01.
Defined
Terms
.
As used in this Agreement, the following terms shall have the meanings specified
below:
“
ABR
”
shall
mean, for any day, a fluctuating rate per annum equal to the higher of (a)
the
Federal Funds Effective Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as announced from time to time by Credit Suisse as its
“prime rate” at its principal office in New York, New York. Any change in such
rate announced by Credit Suisse shall take effect at the opening of business
on
the day specified in the announcement of such change.
“
ABR
Borrowing
”
shall
mean a Borrowing comprised of ABR Loans.
“
ABR
Loan
”
shall
mean any ABR Term Loan, ABR Revolving Loan or Swingline Loan.
“
ABR
Revolving Facility Borrowing
”
shall
mean a Borrowing comprised of ABR Revolving Loans.
“
ABR
Revolving Loan
”
shall
mean any Revolving Facility Loan bearing interest at a rate determined by
reference to the ABR in accordance with the provisions of
Article II.
“
ABR
Term Loan
”
shall
mean any Term Loan bearing interest at a rate determined by reference to the
ABR
in accordance with the provisions of Article II.
“
Acceptance
Credit
”
shall
mean a commercial Letter of Credit in which the applicable Issuing Bank engages
with the beneficiary of such Letter of Credit to accept a time
draft.
“
Acceptance
Documents
”
shall
mean such general acceptance agreements, applications, certificates and other
documents as the applicable Issuing Bank may require in connection with the
creation of Bankers’ Acceptances.
“
Acquisition
”
shall
have the meaning assigned to such term in the first recital hereto.
“
Acquisition
Agreement
”
shall
have the meaning assigned to such term in the first recital hereto.
“
Acquisition
Documents
”
shall
mean the collective reference to the Acquisition Agreement, all material
exhibits and schedules thereto and all agreements expressly contemplated
thereby.
“
Additional
Mortgage
”
shall
have the meaning assigned to such term in Section 5.10(c).
“
Adjusted
LIBO Rate
”
shall
mean, with respect to any Eurocurrency Borrowing for any Interest Period, an
interest rate per annum equal to (a) the LIBO Rate in effect for such Interest
Period divided by (b) one minus the Statutory Reserves applicable to such
Eurocurrency Borrowing, if any.
“
Adjustment
Date
”
shall
have the meaning assigned to such term in the definition of “Pricing
Grid.”
“
Administrative
Agent
”
shall
have the meaning assigned to such term in the introductory paragraph of this
Agreement.
“
Administrative
Agent Fees
”
shall
have the meaning assigned to such term in Section 2.12(c).
“
Administrative
Questionnaire
”
shall
mean an Administrative Questionnaire in a form supplied by the Administrative
Agent.
“
Affiliate
”
shall
mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the person specified.
“
Agents
”
shall
mean the Administrative Agent, the Syndication Agent and the Documentation
Agents.
“
Agreement
”
shall
have the meaning assigned to such term in the introductory paragraph of this
Agreement.
“
Alternate
Currency
”
shall
mean, with respect to any Letter of Credit, Canadian Dollars or Euros and any
other currency other than Dollars as may be acceptable to the Administrative
Agent and the Letter of Credit Issuer with respect thereto in their sole
discretion.
“
Alternate
Currency Letter of Credit
”
shall
mean any Letter of Credit denominated in an Alternate Currency.
“
Applicable
Commitment Fee
”
shall
mean for any day 0.50% per annum; provided, that on and after the first
Adjustment Date occurring after delivery of the financial statements and
certificates required by Section 5.04 upon the completion of one full fiscal
quarter of the Borrower after the Closing Date, the Applicable Commitment Fee
will be determined pursuant to the Pricing Grid.
“
Applicable
Margin
”
shall
mean for any day (i) with respect to any Term B Loan, 1.75% per annum in the
case of any Eurocurrency Loan and 0.75% per annum in the case of any ABR Loan
and (ii) with respect to any Revolving Facility Loan, 2.00% per annum in the
case of any Eurocurrency Loan and 1.00% per annum in the case of any ABR Loan;
provided
,
that on
and after the first Adjustment Date occurring after delivery of the financial
statements and certificates required by Section 5.04 upon the completion of
one
full fiscal quarter of the Borrower after the Closing Date, the Applicable
Margin with respect to Revolving Facility Loans and Swingline Loans will be
determined pursuant to the Pricing Grid.
“
Applicable
Period
”
means
an Excess Cash Flow Period or an Excess Cash Flow Interim Period, as the case
may be.
“
Approved
Fund
”
shall
have the meaning assigned to such term in Section 9.04(b).
“
Asset
Sale
”
shall
mean any loss, damage, destruction or condemnation of, or any sale, transfer
or
other disposition (including any sale and leaseback of assets and any mortgage
or lease of Real Property) to any person of any asset or assets of the Borrower
or any Subsidiary.
“
Assignee
”
shall
have the meaning assigned to such term in Section 9.04(b).
“
Assignment
and Acceptance
”
shall
mean an assignment and acceptance entered into by a Lender and an Assignee,
and
accepted by the Administrative Agent and the Borrower (if required by such
assignment and acceptance), in the form of
Exhibit A
or such
other form as shall be approved by the Administrative Agent.
“
Availability
Period
”
shall
mean the period from and including the Closing Date to but excluding the earlier
of the Revolving Facility Maturity Date and in the case of each of the Revolving
Facility Loans, Revolving Facility Borrowings, Swingline Loans, Swingline
Borrowings and Letters of Credit, the date of termination of the Revolving
Facility Commitments.
“
Available
Unused Commitment
”
shall
mean, with respect to a Revolving Facility Lender at any time, an amount equal
to the amount by which (a) the Revolving Facility Commitment of such Revolving
Facility Lender at such time exceeds (b) the Revolving Facility Credit Exposure
of such Revolving Facility Lender at such time;
provided
,
that
with respect to any Swingline Lender, the Available Unused Commitment at any
time shall be reduced by the principal amount of any Swingline Loans made by
such Swingline Lender outstanding at such time.
“
Bankers’
Acceptance
”
shall
mean a time draft, drawn by the beneficiary under an Acceptance Credit and
accepted by the applicable Issuing Bank upon presentation of documents by the
beneficiary of an Acceptance Credit pursuant to Section 2.05 hereof, in the
standard form for bankers’ acceptances of such Issuing Bank.
“
Bank
Guarantee
”
shall
mean any bank guarantee issued by an Issuing Bank for the account and on behalf
of the Borrower pursuant to Section 2.05 in such form as may be approved by
such
Issuing Bank in its reasonable discretion.
“
Board
”
shall
mean the Board of Governors of the Federal Reserve System of the United States
of America.
“
Board
of Directors
”
shall
mean, as to any person, the board of directors or other governing body of such
person, or if such person is owned or managed by a single entity, the board
of
directors or other governing body of such entity.
“
Borrower
”
shall
have the meaning assigned to such term in the introductory paragraph of this
Agreement.
“
Borrowing
”
shall
mean a group of Loans of a single Type under a single Facility and made on
a
single date and, in the case of Eurocurrency Loans, as to which a single
Interest Period is in effect.
“
Borrowing
Minimum
”
shall
mean $5.0 million, except in the case of Swingline Loans, $1.0
million.
“
Borrowing
Multiple
”
shall
mean $1.0 million, except in the case of Swingline Loans, $500,000.
“
Borrowing
Request
”
shall
mean a request by a Borrower in accordance with the terms of Section 2.03
and substantially in the form of
Exhibit C-1
.
“
Budget
”
shall
have the meaning assigned to such term in Section 5.04(e).
“
Business
Day
”
shall
mean any day that is not a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to remain closed;
provided
,
that
when used in connection with a Eurocurrency Loan, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in deposits in
the
applicable currency in the London interbank market.
“
Capital
Expenditures
”
shall
mean, for any person in respect of any period, the aggregate of all expenditures
incurred by such person during such period that, in accordance with GAAP, are
or
should be included in “additions to property, plant or equipment” or similar
items reflected in the statement of cash flows of such person,
provided
,
however
,
that
Capital Expenditures for the Borrower and the Subsidiaries shall not
include:
(a)
expenditures
to the extent they are made with proceeds of the issuance of Equity Interests
of
Holdings after the Closing Date or funds that would have constituted any Net
Proceeds under clause (a) of the definition of the term “Net Proceeds” (but
for the application of the first proviso to such clause (a)),
(b)
expenditures
with proceeds of insurance settlements, condemnation awards and other
settlements in respect of lost, destroyed, damaged or condemned assets,
equipment or other property to the extent such expenditures are made to replace
or repair such lost, destroyed, damaged or condemned assets, equipment or other
property or otherwise to acquire, maintain, develop, construct, improve, upgrade
or repair assets or properties useful in the business of the Borrower and the
Subsidiaries within 15 months of receipt of such proceeds (or, if not made
within such period of 15 months, are committed to be made during such
period),
(c)
interest
capitalized during such period,
(d)
expenditures
that are accounted for as capital expenditures of such person and that actually
are paid for by a third party (excluding Holdings, the Borrower or any
Subsidiary thereof) and for which neither Holdings, the Borrower nor any
Subsidiary has provided or is required to provide or incur, directly or
indirectly, any consideration or obligation to such third party or any other
person (whether before, during or after such period),
(e)
the
book
value of any asset owned by such person prior to or during such period to the
extent that such book value is included as a capital expenditure during such
period as a result of such person reusing or beginning to reuse such asset
during such period without a corresponding expenditure actually having been
made
in such period;
provided
,
that
(i) any expenditure necessary in order to permit such asset to be reused shall
be included as a Capital Expenditure during the period that such expenditure
actually is made and (ii) such book value shall have been included in Capital
Expenditures when such asset was originally acquired,
(f)
the
purchase price of equipment purchased during such period to the extent the
consideration therefor consists of any combination of (i) used or surplus
equipment traded in at the time of such purchase
and
(ii) the proceeds of a concurrent sale of used or surplus equipment, in each
case, in the ordinary course of business,
(g)
Investments
in respect of a Permitted Business Acquisition,
(h)
the
Acquisition, or
(i)
the
purchase of property, plant or equipment made within 15 months of the sale
of
any asset to the extent purchased with the proceeds of such sale (or, if not
made within such period of 15 months, to the extent committed to be made during
such period and actually made within an 18-month period from such
sale).
“
Capital
Lease Obligations
”
of
any
person shall mean the obligations of such person to pay rent or other amounts
under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required
to
be classified and accounted for as capital leases on a balance sheet of such
person under GAAP and, for purposes hereof, the amount of such obligations
at
any time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
“
Cash
Interest Expense
”
shall
mean, with respect to the Borrower and the Subsidiaries on a consolidated basis
for any period, Interest Expense for such period, less the sum of, without
duplication, (a) pay in kind Interest Expense or other noncash Interest Expense
(including as a result of the effects of purchase accounting), (b) to the extent
included in Interest Expense, the amortization of any financing fees paid by,
or
on behalf of, the Borrower or any Subsidiary, including such fees paid in
connection with the Transactions or upon entering into a Permitted Receivables
Financing, (c) the amortization of debt discounts, if any, or fees in respect
of
Swap Agreements and (d) cash interest income of Borrower and its Subsidiaries
for such period;
provided
,
that
Cash Interest Expense shall exclude any one time financing fees, including
those
paid in connection with the Transactions, or upon entering into a Permitted
Receivables Financing or any amendment of this Agreement.
A
“
Change
in Control
”
shall
be deemed to occur if:
(a)
at
any
time, (i) Holdings shall fail to own, directly or indirectly, beneficially
and
of record, 100% of the issued and outstanding Equity Interests of the Borrower,
(ii) a majority of the seats (other than vacant seats) on the Board of Directors
of Holdings shall at any time be occupied by persons who were neither (A)
nominated by the Board of Directors of Holdings or a Permitted Holder, (B)
appointed by directors so nominated nor (C) appointed by a Permitted Holder,
or
(iii) a “change of control” (or similar event) shall occur under the Second Lien
Notes Indenture, the Senior Subordinated Notes Indenture, any Material
Indebtedness or any Permitted Refinancing Indebtedness in respect of any of
the
foregoing or any Disqualified Stock;
(b)
at
any
time prior to a Qualified IPO, any combination of Permitted Holders shall fail
to own beneficially (within the meaning of Rule 13d-5 of the Exchange Act as
in
effect on the Closing Date), directly or indirectly, in the aggregate Equity
Interests representing at least a majority of the aggregate ordinary voting
power represented by the issued and outstanding Equity Interests of Holdings;
or
(c)
at
any
time after a Qualified IPO, any person or “group” (within the meaning of
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934 as in
effect on the Closing Date), other than any combination of the Permitted Holders
or any “group” including any Permitted Holders, shall have acquired beneficial
ownership of 35% or more on a fully diluted basis of the voting interest in
Holdings’ Equity Interests and the Permitted Holders shall own, directly or
indirectly, less than such person or “group” on a fully diluted basis of the
voting interest in Holdings’ Equity Interests.
“
Change
in Law
”
shall
mean (a) the adoption of any law, rule or regulation after the Closing Date,
(b)
any change in law, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the Closing Date or (c) compliance
by any Lender or Issuing Bank (or, for purposes of Section 2.15(b), by any
lending office of such Lender or by such Lender’s or Issuing Bank’s holding
company, if any) with any written request, guideline or directive (whether
or
not having the force of law) of any Governmental Authority made or issued after
the Closing Date.
“
Charges
”
shall
have the meaning assigned to such term in Section 9.09.
“
Closing
Date
”
shall
mean September 20, 2006.
“
Code
”
shall
mean the Internal Revenue Code of 1986, as amended from time to time and the
regulations promulgated and rulings issued thereunder.
“
Collateral
”
shall
mean all the “Collateral” as defined in any Security Document and shall also
include the Mortgaged Properties and all other property that is subject to
any
Lien in favor of the Administrative Agent or any Subagent for the benefit of
the
Lenders pursuant to any Security Document.
“
Collateral
Agreement
”
shall
mean the Guarantee and Collateral Agreement, as amended, supplemented or
otherwise modified from time to time, in the form of
Exhibit E
,
among
Holdings, the Borrower, each Subsidiary Loan Party and the Administrative
Agent.
“
Collateral
and Guarantee Requirement
”
shall
mean the requirement that:
(a)
on
the
Closing Date, the Administrative Agent shall have received (i) from Holdings,
the Borrower and each Subsidiary Loan Party, a counterpart of the Collateral
Agreement duly executed and delivered on behalf of such person and (ii) an
Acknowledgment and Consent in the form attached to the Collateral Agreement,
executed and delivered by each issuer of Pledged Collateral (as defined in
the
Collateral Agreement), if any, that is not a Loan Party;
(b)
on
the
Closing Date, (i) the Administrative Agent shall have received (A) a pledge
of
all the issued and outstanding Equity Interests of (x) the Borrower and (y)
each
Domestic Subsidiary (other than Subsidiaries listed on Schedule 1.01(a))
owned
on the Closing Date directly by or on behalf of the Borrower or any Subsidiary
Loan Party and (B) a pledge of 100% of the outstanding nonvoting Equity
Interests and of 65% of the outstanding voting Equity Interests of each (1)
“first tier” Foreign Subsidiary directly owned by any Loan Party and (2) each
“first tier” Qualified CFC Holding Company directly owned by any Loan Party
(other than
Subsidiaries
listed on Schedule 1.01(a)) and (ii) the Administrative Agent shall have
received all certificates or other instruments (if any) representing such
Equity
Interests, together with stock powers or other instruments of transfer with
respect thereto endorsed in blank;
(c)
(i)
all
Indebtedness of the Borrower and each Subsidiary having, in the case of each
instance of Indebtedness, an aggregate principal amount in excess of $5.0
million (other than (A) intercompany current liabilities incurred in the
ordinary course of business in connection with the cash management operations
of
Holdings and its Subsidiaries or (B) to the extent that a pledge of such
promissory note or instrument would violate applicable law) that is owing to
any
Loan Party shall be evidenced by a promissory note or an instrument and shall
have been pledged pursuant to the Collateral Agreement (or other applicable
Security Document as reasonably required by the Administrative Agent), and
(ii)
the Administrative Agent shall have received all such promissory notes or
instruments, together with note powers or other instruments of transfer with
respect thereto endorsed in blank;
(d)
in
the
case of any person that becomes a Subsidiary Loan Party after the Closing Date,
the Administrative Agent shall have received a supplement to the Collateral
Agreement, in the form specified therein, duly executed and delivered on behalf
of such Subsidiary Loan Party;
(e)
in
the
case of any person that becomes a “first tier” Foreign Subsidiary directly owned
by the Borrower or a Subsidiary Loan Party after the Closing Date, the
Administrative Agent shall have received, as promptly as practicable following
such event, a Foreign Pledge Agreement, duly executed and delivered on behalf
of
such Foreign Subsidiary and the direct parent company of such Foreign
Subsidiary;
(f)
after
the
Closing Date, (i) all the outstanding Equity Interests of (A) any person that
becomes a Subsidiary Loan Party after the Closing Date and (B) subject to
Section 5.10(g), all the Equity Interests that are acquired by a Loan Party
after the Closing Date (including, without limitation, the Equity Interests
of
any Special Purpose Receivables Subsidiary established after the Closing Date),
shall have been pledged pursuant to the Collateral Agreement;
provided
,
that in
no event shall more than 65% of the issued and outstanding voting Equity
Interests of any “first tier” Foreign Subsidiary or any “first tier” Qualified
CFC Holding Company directly owned by such Loan Party be pledged to secure
Obligations, and in no event shall any of the issued and outstanding Equity
Interests of any Foreign Subsidiary that is not a “first tier” Foreign
Subsidiary of a Loan Party or any Qualified CFC Holding Company that is not
a
“first tier” Subsidiary of a Loan Party be pledged to secure Obligations, and
(ii) the Administrative Agent shall have received all certificates or other
instruments (if any) representing such Equity Interests, together with stock
powers or other instruments of transfer with respect thereto endorsed in
blank;
(g)
except
as
otherwise contemplated by any Security Document, all documents and instruments,
including Uniform Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent to be filed, registered
or
recorded to create the Liens intended to be created by the Security Documents
(in each case, including any supplements thereto) and perfect such Liens to
the
extent required by, and with the priority required by, the Security Documents,
shall have been filed, registered or recorded or delivered to the Administrative
Agent for filing, registration or the recording on the Closing Date or, with
respect to Collateral acquired after the Closing Date, concurrently with, or
promptly following, the execution and delivery of each such Security
Document;
(h)
on
the
Closing Date, the Administrative Agent shall have received (i) counterparts
of
each Mortgage to be entered into with respect to each Mortgaged Property set
forth on
Schedule 1.01(b)
duly
executed and delivered by the record owner of such Mortgaged Property and
suitable for recording or filing and (ii) such other documents including, but
not limited to, any consents, agreements and confirmations of third parties,
as
the Administrative Agent may reasonably request with respect to any such
Mortgage or Mortgaged Property;
(i)
on
the
Closing Date the Administrative Agent shall have received (i) a policy or
policies or marked-up unconditional binder of title insurance, as applicable,
paid for by the Borrower, issued by a nationally recognized title insurance
company insuring the Lien of each Mortgage to be entered into on the Closing
Date as a valid first Lien on the Mortgaged Property described therein, free
of
any other Liens except Permitted Liens, together with such customary
endorsements (including zoning endorsements where reasonably appropriate and
available), coinsurance and reinsurance as the Administrative Agent may
reasonably request, and with respect to any such property located in a state
in
which a zoning endorsement is not available, a zoning compliance letter from
the
applicable municipality in a form reasonably acceptable to the Administrative
Agent, and (ii) a survey of each Mortgaged Property (including all improvements,
easements and other customary matters thereon reasonably required by the
Administrative Agent), or foreign equivalent thereof, as applicable, for which
all necessary fees (where applicable) have been paid, which is (A) dated (or
redated) not earlier than six months prior to the date of delivery thereof
unless there shall have occurred within six months prior to such date of
delivery any exterior construction on the site of such Mortgaged Property,
in
which event such survey shall be dated (or redated) after the completion of
such
construction or if such construction shall not have been completed as of such
date of delivery, not earlier than 20 days prior to such date of delivery,
(B) certified by the surveyor (in a manner reasonably acceptable to the
Administrative Agent) to the Administrative Agent and the title insurance
company insuring the Mortgage, (C) complying in all respects with the
minimum detail requirements of the American Land Title Association and American
Congress of Surveying and Mapping as such requirements are in effect on the
date
of preparation of such survey and (D) sufficient for such title insurance
company to remove all standard survey exceptions from the title insurance policy
relating to such Mortgaged Property or otherwise reasonably acceptable to the
Administrative Agent;
(j)
evidence
of the insurance required by the terms of the Mortgages;
(k)
except
as
otherwise contemplated by any Security Document, each Loan Party shall have
obtained all consents and approvals required to be obtained by it in connection
with (i) the execution and delivery of all Security Documents (or supplements
thereto) to which it is a party and the granting by it of the Liens thereunder
and (ii) the performance of its obligations thereunder; and
(l)
after
the
Closing Date, the Administrative Agent shall have received (i) such other
Security Documents as may be required to be delivered pursuant to Section 5.10,
and (ii) upon reasonable request by the Administrative Agent, evidence of
compliance with any other requirements of Section 5.10.
“
Commitment
Fee
”
shall
have the meaning assigned to such term in Section 2.12(a).
“
Commitments
”
shall
mean (a) with respect to any Lender, such Lender’s Revolving Facility Commitment
(including any Incremental Revolving Facility Commitment), Term B Loan
Commitment and Incremental Term Loan Commitment and (b) with respect to any
Swingline Lender, its Swingline Commitment.
“
Conduit
Lender
”
shall
mean any special purpose corporation organized and administered by any Lender
for the purpose of making Loans otherwise required to be made by such Lender
and
designated by such Lender in a written instrument;
provided
,
that
the designation by any Lender of a Conduit Lender shall not relieve the
designating Lender of any of its obligations to fund a Loan under this Agreement
if, for any reason, its Conduit Lender fails to fund any such Loan, and the
designating Lender (and not the Conduit Lender) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Lender;
provided
,
further
,
that no
Conduit Lender shall (a) be entitled to receive any greater amount pursuant
to Section 2.15, 2.16, 2.17 or 9.05 than the designating Lender would have
been entitled to receive in respect of the extensions of credit made by such
Conduit Lender or (b) be deemed to have any Commitment.
“
Consolidated
Debt
”
at
any
date shall mean the sum of (without duplication) all Indebtedness (other than
letters of credit or bank guarantees, to the extent undrawn) consisting of
Capital Lease Obligations, Indebtedness for borrowed money, Disqualified Stock
and Indebtedness in respect of the deferred purchase price of property or
services of the Borrower and the Subsidiaries determined on a consolidated
basis
on such date.
“
Consolidated
Net Income
”
shall
mean, with respect to any person for any period, the aggregate of the Net Income
of such person and its subsidiaries for such period, on a consolidated basis;
provided
,
however
,
that,
without duplication,
(i)
any
net
after tax extraordinary, nonrecurring or unusual gains or losses or income
or
expense or charge (less all fees and expenses relating thereto) including,
without limitation, any severance, relocation or other restructuring expenses,
any expenses related to any reconstruction, recommissioning or reconfiguration
of fixed assets for alternative uses and fees, expenses or charges relating
to
new product lines, plant shutdown costs, acquisition integration costs, expenses
or charges related to any offering of
Equity
Interests of Holdings, any Investment, acquisition or Indebtedness permitted
to
be incurred hereunder (in each case, whether or not successful), including
any
such fees, expenses, charges or change in control payments related to the
Transactions (including any transition-related expenses incurred before, on
or
after the Closing Date), in each case, shall be excluded,
(ii)
any
net
after-tax income or loss from discontinued operations and any net after-tax
gain
or loss on disposal of discontinued operations shall be excluded,
(iii)
any
net
after-tax gain or loss (less all fees and expenses or charges relating thereto)
attributable to business dispositions or asset dispositions other than in the
ordinary course of business (as determined in good faith by the Board of
Directors of the Borrower) shall be excluded,
(iv)
any
net
after-tax income or loss (less all fees and expenses or charges relating
thereto) attributable to the early extinguishment of indebtedness shall be
excluded,
(v)
(A)
the
Net Income for such period of any person that is not a subsidiary of such
person, or is an Unrestricted Subsidiary, or that is accounted for by the equity
method of accounting, shall be included only to the extent of the amount of
dividends or distributions or other payments actually paid in cash (or to the
extent converted into cash) to the referent person or a subsidiary thereof
in
respect of such period and (B) the Net Income for such period shall include
any
ordinary course dividend distribution or other payment in cash received from
any
person in excess of the amounts included in clause (A),
(vi)
Consolidated
Net Income for such period shall not include the cumulative effect of a change
in accounting principles during such period,
(vii)
any
increase in amortization or depreciation or any non-cash charges resulting
from
purchase accounting in connection with the Transactions or any acquisition
that
is consummated after the Closing Date shall be excluded,
(viii)
any
non-cash impairment charges resulting from the application of Statement of
Financial Accounting Standards No. 142 and 144, and the amortization of
intangibles arising pursuant to No. 141, shall be excluded,
(ix)
any
non-cash expenses realized or resulting from stock option plans, employee
benefit plans or post-employment benefit plans, grants of stock appreciation
or
similar rights, stock options, restricted stock grants or other rights to
officers, directors and employees of such person or any of its subsidiaries
shall be excluded,
(x)
accruals
and reserves that are established within twelve months after the Closing Date
and that are so required to be established in accordance with GAAP shall be
excluded,
(xi)
non-cash
gains, losses, income and expenses resulting from fair value accounting required
by Statement of Financial Accounting Standards No. 133 shall be excluded,
and
(xii)
non-cash
charges for deferred tax asset valuation allowances shall be excluded.
“
Consolidated
Total Assets
”
shall
mean, as of any date, the total assets of the Borrower and the consolidated
Subsidiaries, determined in accordance with GAAP, as set forth on the
consolidated balance sheet of the Borrower as of such date.
“
Control
”
shall
mean the possession, directly or indirectly, of the power to direct or cause
the
direction of the management or policies of a person, whether through the
ownership of voting securities, by contract or otherwise, and “
Controlling
”
and
“
Controlled
”
shall
have meanings correlative thereto.
“
Covalence
Plastics
”
shall
mean Covalence Specialty Materials Corp. and its subsidiaries.
“
Credit
Event
”
shall
have the meaning assigned to such term in Article IV.
“
Cumulative
Credit
”
shall
mean, at any date, an amount, not less than zero in the aggregate, determined
on
a cumulative basis equal to, without duplication:
(a)
$50
million,
plus
:
(b)
the
Cumulative Retained Excess Cash Flow Amount at such time,
plus
(c)
the
aggregate amount of proceeds received after the Closing Date and prior to such
time that would have constituted Net Proceeds pursuant to clause (a) of the
definition thereof except for the operation of clause (x), (y) or (z) of the
second proviso thereof (the “
Below
Threshold Asset Sale Proceeds
”),
plus
(d)
the
cumulative amount of proceeds (including cash and the fair market value of
property other than cash) from the sale of Equity Interests of Holdings or
any
Parent Entity after the Closing Date and on or prior to such time (including
upon exercise of warrants or options) which proceeds have been contributed
as
common equity to the capital of the Borrower and common Equity Interests of
the
Borrower issued upon conversion of Indebtedness of the Borrower or any
Subsidiary owed to a person other than the Borrower or a Subsidiary not
previously applied for a purpose other than use in the Cumulative Credit;
provided
,
that
this clause (d) shall exclude Permitted Cure Securities and the proceeds
thereof, sales of Equity Interests financed as contemplated by Section 6.04(e)
and any amounts used to finance the payments or distributions in respect of
any
Junior Financing pursuant to Section 6.09(b),
plus
(e)
100%
of
the aggregate amount of contributions to the common capital of the Borrower
received in cash (and the fair
market
value of property other than cash) after the Closing Date (subject to the
same
exclusions as are applicable to clause (d) above); provided that the Borrower
and its Subsidiaries shall be in Pro Forma Compliance,
plus
(f)
the
principal amount of any Indebtedness (including the liquidation preference
or
maximum fixed repurchase price, as the case may be, of any Disqualified Stock)
of Borrower or any Subsidiary thereof issued after the Closing Date (other
than
Indebtedness issued to a Subsidiary), which has been converted into or exchanged
for Equity Interests (other than Disqualified Stock) in Holdings or any Parent
Entity,
plus
(g)
100%
of
the aggregate amount received by Borrower or any Subsidiary in cash (and the
fair market value of property other than cash received by Borrower or any
Subsidiary) after the Closing Date from:
(A)
the
sale
(other than to Borrower or any Subsidiary) of the Equity Interests of an
Unrestricted Subsidiary, or
(B)
any
dividend or other distribution by an Unrestricted Subsidiary,
plus
(h)
in
the
event any Unrestricted Subsidiary has been redesignated as a Subsidiary or
has
been merged, consolidated or amalgamated with or into, or transfers or conveys
its assets to, or is liquidated into, Holdings, Borrower or any Subsidiary,
the
fair market value of the Investments of Holdings, Borrower or any Subsidiary
in
such Unrestricted Subsidiary at the time of such redesignation, combination
or
transfer (or of the assets transferred or conveyed, as applicable),
plus
(i)
an
amount
equal to any returns (including dividends, interest, distributions, returns
of
principal, profits on sale, repayments, income and similar amounts) actually
received by the Borrower or any Subsidiary in respect of any Investments made
pursuant to Section 6.04(j),
minus
(j)
any
amounts thereof used to make Investments pursuant to Section 6.04(b)(y) after
the Closing Date prior to such time,
minus
(k)
any
amounts thereof used to make Investments pursuant to Section 6.04(j)(ii) after
the Closing Date prior to such time,
minus
(l)
the
cumulative amount of dividends paid and distributions made pursuant to Section
6.06(e) prior to such time,
minus
(m)
payments
or distributions in respect of Junior Financings pursuant to Section 6.09(b)(i)
(other than payments made with proceeds from the issuance of Equity Interests
that were excluded from the calculation of the Cumulative Credit pursuant to
clause (d) above);
provided
,
however
,
for
purposes of Section 6.06(e), the calculation of the Cumulative Credit shall
not
include any Below Threshold Asset Sale Proceeds except to the extent they are
used as contemplated in clauses (j) and (k) above.
“
Cumulative
Retained Excess Cash Flow Amount
”
shall
mean, at any date, an amount, not less than zero in the aggregate, determined
on
a cumulative basis equal to:
(a)
the
aggregate cumulative sum of the Retained Percentage of Excess Cash Flow for
all
Excess Cash Flow Periods ending after the Closing Date and prior to such date,
plus
(b)
for
each
Excess Cash Flow Interim Period ended prior to such date but as to which the
corresponding Excess Cash Flow Period has not ended, an amount equal to the
Retained Percentage of Excess Cash Flow for such Excess Cash Flow Interim
Period,
minus
(c)
the
cumulative amount of all Retained Excess Cash Flow Overfundings as of such
date.
“
Cure
Amount
”
shall
have the meaning assigned to such term in Section 7.03(a).
“
Cure
Right
”
shall
have the meaning assigned to such term in Section 7.03(a).
“
Current
Assets
”
shall
mean, with respect to the Borrower and the Subsidiaries on a consolidated basis
at any date of determination, the sum of (a) all assets (other than cash and
Permitted Investments or other cash equivalents) that would, in accordance
with
GAAP, be classified on a consolidated balance sheet of the Borrower and the
Subsidiaries as current assets at such date of determination, other than amounts
related to current or deferred Taxes based on income or profits, and (b) in
the
event that a Permitted Receivables Financing is accounted for off balance sheet,
(x) gross accounts receivable comprising part of the Receivables Assets subject
to such Permitted Receivables Financing less (y) collections against the amounts
sold pursuant to clause (x).
“
Current
Liabilities
”
shall
mean, with respect to the Borrower and the Subsidiaries on a consolidated basis
at any date of determination, all liabilities that would, in accordance with
GAAP, be classified on a consolidated balance sheet of the Borrower and the
Subsidiaries as current liabilities at such date of determination, other than
(a) the current portion of any Indebtedness, (b) accruals of Interest Expense
(excluding Interest Expense that is due and unpaid), (c) accruals for current
or
deferred Taxes based on income or profits, (d) accruals, if any, of transaction
costs resulting from the Transactions, (e) accruals of any costs or
expenses related to (i) severance or termination of employees prior to the
Closing Date or (ii) bonuses, pension and other post-retirement benefit
obligations, and (f) accruals for add-backs to EBITDA included in
clauses (a)(iv) through (a)(vi) of the definition of such
term.
“
Debt
Service
”
shall
mean, with respect to the Borrower and the Subsidiaries on a consolidated basis
for any period, Cash Interest Expense for such period plus scheduled principal
amortization of Consolidated Debt for such period.
“
Declining
Lender
”
shall
have the meaning assigned to such term in Section 2.11(f)
“
Default
”
shall
mean any event or condition that upon notice, lapse of time or both would
constitute an Event of Default.
“
Defaulting
Lender
”
shall
mean any Lender with respect to which a Lender Default is in
effect.
“
Designated
Non-Cash Consideration
”
mean
the fair market value of non-cash consideration received by the Borrower or
one
of its Subsidiaries in connection with an Asset Sale that is so designated
as
Designated Non-Cash Consideration pursuant to a certificate of a Responsible
Officer, setting forth the basis of such valuation, less the amount of cash
equivalents received in connection with a subsequent sale of such Designated
Non-Cash Consideration.
“
Disqualified
Stock
”
shall
mean, with respect to any person, any Equity Interests of such person that,
by
its terms (or by the terms of any security or other Equity Interests into which
it is convertible or for which it is redeemable or exchangeable), or upon the
happening of any event or condition (a) matures or is mandatorily redeemable
(other than solely for Qualified Equity Interests), pursuant to a sinking fund
obligation or otherwise (except as a result of a change of control or asset
sale
so long as any rights of the holders thereof upon the occurrence of a change
of
control or asset sale event shall be subject to the prior repayment in full
of
the Loans and all other Obligations that are accrued and payable and the
termination of the Commitments), (b) is redeemable at the option of the holder
thereof (other than solely for Qualified Equity Interests), in whole or in
part,
(c) provides for the scheduled payments of dividends in cash, or (d) is or
becomes convertible into or exchangeable for Indebtedness or any other Equity
Interests that would constitute Disqualified Stock, in each case, prior to
the
date that is ninety-one (91) days after the Term B Facility Maturity Date;
provided
,
however
,
that
only the portion of the Equity Interests that so mature or are mandatorily
redeemable, are so convertible or exchangeable or are so redeemable at the
option of the holder thereof prior to such date shall be deemed to be
Disqualified Stock;
provided
further
,
however
,
that if
such Equity Interests are issued to any employee or to any plan for the benefit
of employees of the Borrower or the Subsidiaries or by any such plan to such
employees, such Equity Interests shall not constitute Disqualified Stock solely
because they may be required to be repurchased by the Borrower in order to
satisfy applicable statutory or regulatory obligations or as a result of such
employee’s termination, death or disability.
“
Documentation
Agents
”
shall
have the meaning assigned to such term in the introductory paragraph of this
Agreement.
“
Dollar
Equivalent
”
means,
at any time, (a) with respect to any amount denominated in Dollars, such amount,
and (b) with respect to any amount denominated in any currency other than
Dollars, the equivalent amount thereof in Dollars as determined by the
Administrative Agent at such time on the basis of the Spot Rate (determined
in
respect of the most recent Revaluation Date or other applicable date of
determination) for the purchase of Dollars with such currency.
“
Dollars
”
or
“
$
”
shall
mean lawful money of the United States of America.
“
Domestic
Subsidiary
”
shall
mean any Subsidiary that is not a Foreign Subsidiary, a Qualified CFC Holding
Company or a subsidiary listed on Schedule 1.01(a).
“
EBITDA
”
shall
mean, with respect to the Borrower and the Subsidiaries on a consolidated basis
for any period, the Consolidated Net Income of the Borrower and the Subsidiaries
for such period
plus
(a) the
sum of (in each case without duplication and to the extent the respective
amounts described in subclauses (i) through (vii) of this clause (a)
reduced such Consolidated Net Income (and were not excluded therefrom) for
the
respective period for which EBITDA is being determined):
(i)
provision
for Taxes based on income, profits or capital of the Borrower and the
Subsidiaries for such period, including, without limitation, state, franchise
and similar taxes,
(ii)
Interest
Expense of the Borrower and the Subsidiaries for such period (net of interest
income of the Borrower and its Subsidiaries for such period),
(iii)
depreciation
and amortization expenses of the Borrower and the Subsidiaries for such
period,
(iv)
business
optimization expenses and other restructuring charges (which, for the avoidance
of doubt, shall include, without limitation, the effect of inventory
optimization programs, plant closure, retention, severance, systems
establishment costs and excess pension charges);
provided
,
that
with respect to each business optimization expense or other restructuring
charge, the Borrower shall have delivered to the Administrative Agent an
officers’ certificate specifying and quantifying such expense or
charge,
(v)
any
other
non-cash charges;
provided
,
that,
for purposes of this subclause (v) of this clause (a), any non-cash
charges or losses shall be treated as cash charges or losses in any subsequent
period during which cash disbursements attributable thereto are made,
(vi)
the
amount of management, consulting, monitoring, transaction and advisory fees
and
related expenses paid to the Fund or any Fund Affiliates (or any accruals
related to such fees and related expenses) during such period;
provided
,
that
such amount shall not exceed in any four quarter period the sum of (i) the
greater of $3.0 million and 2.00% of EBITDA for such four quarter period,
plus
(ii) the
amount of deferred fees (to the extent such fees would otherwise have been
permitted to be included in clause (i) if paid, but were not included in such
clause (i)),
plus
(iii)
2.00% of the value of transactions permitted hereunder and entered into by
the
Borrower or any of the Subsidiaries with respect to which the Funds or any
Fund
Affiliates provides any of the aforementioned types of services,
and
(vii)
non-operating
expenses.
minus
(b) the
sum of (without duplication and to the extent the amounts described in this
clause (b) increased such Consolidated Net Income for the respective period
for which EBITDA is being determined) non-cash items increasing Consolidated
Net
Income of the Borrower and the Subsidiaries for such period (but excluding
any
such items (A) in respect of which cash was received in a prior period or will
be received
in
a
future period or (B) which represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any prior period).
For
purposes of determining EBITDA under this Agreement for any quarter ending
prior
to the first full quarter ending after the Closing Date, EBITDA for such fiscal
quarter shall be calculated on a Pro Forma Basis giving effect to the
Acquisition and the other Transactions occurring on the Closing
Date.
“
environment
”
shall
mean ambient and indoor air, surface water and groundwater (including potable
water, navigable water and wetlands), the land surface or subsurface strata,
natural resources such as flora and fauna, the workplace or as otherwise defined
in any Environmental Law.
“
Environmental
Laws
”
shall
mean all applicable laws (including common law), rules, regulations, codes,
ordinances, orders, decrees or judgments, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation
or
reclamation of natural resources, the generation, management, Release or
threatened Release of, or exposure to, any Hazardous Material or to occupational
health and safety matters (to the extent relating to the environment or
Hazardous Materials).
“
Equity
Financing
”
shall
mean, in connection with the consummation of the Acquisition, the purchase
or
contribution by the Permitted Holders, directly or indirectly, of cash common
equity to or of Holdings(or rollover of existing equity by the Management Group)
in an aggregate amount of not less than $480.0 million, which amount shall
be
contributed by Holdings to the Borrower as cash common equity.
“
Equity
Interests
”
of
any
person shall mean any and all shares, interests, rights to purchase or otherwise
acquire, warrants, options, participations or other equivalents of or interests
in (however designated) equity or ownership of such person, including any
preferred stock, any limited or general partnership interest and any limited
liability company membership interest, and any securities or other rights or
interests convertible into or exchangeable for any of the
foregoing.
“
ERISA
”
shall
mean the Employee Retirement Income Security Act of 1974, as the same may be
amended from time to time and any final regulations promulgated and the rulings
issued thereunder.
“
ERISA
Affiliate
”
shall
mean any trade or business (whether or not incorporated) that, together with
Holdings, the Borrower or a Subsidiary, is treated as a single employer under
Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
“
ERISA
Event
”
shall
mean (a) any Reportable Event
or
the
requirements of Section 4043(b) of ERISA apply with respect to a
Plan
;
(b) the
existence with respect to any Plan of an “accumulated funding deficiency” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether
or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan, the failure to make by its due date
a
required installment
under
Section 412(m) of the Code with respect to any Plan or the failure to make
any required contribution to a Multiemployer Plan; (d) the incurrence by
Holdings, the Borrower, a Subsidiary or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Plan or
Multiemployer Plan; (e) the receipt by Holdings, the Borrower, a Subsidiary
or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or to appoint a trustee to administer
any
Plan under Section 4042 of ERISA; (f) the incurrence by Holdings, the
Borrower, a Subsidiary or any ERISA Affiliate of any liability with respect
to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan;
(g)
the receipt by Holdings, the Borrower, a Subsidiary or any ERISA Affiliate
of
any notice, or the receipt by any Multiemployer Plan from Holdings, the
Borrower, a Subsidiary or any ERISA Affiliate of any notice, concerning the
impending imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA;
(h) the
conditions for imposition of a lien under Section 302(f) of ERISA shall have
been met with respect to any Plan; or (i) the adoption of an amendment to
a Plan
requiring the provision of security to such Plan pursuant to Section 307
of
ERISA
.
“
Eurocurrency
Borrowing
”
shall
mean a Borrowing comprised of Eurocurrency Loans.
“
Eurocurrency
Loan
”
shall
mean any Eurocurrency Term Loan or Eurocurrency Revolving Loan.
“
Eurocurrency
Revolving Facility Borrowing
”
shall
mean a Borrowing comprised of Eurocurrency Revolving Loans.
“
Eurocurrency
Revolving Loan
”
shall
mean any Revolving Facility Loan bearing interest at a rate determined by
reference to the Adjusted LIBO Rate in accordance with the provisions of
Article II.
“
Eurocurrency
Term Loan
”
shall
mean any Term Loan bearing interest at a rate determined by reference to the
Adjusted LIBO Rate in accordance with the provisions of
Article II.
“
Event
of Default
”
shall
have the meaning assigned to such term in Section 7.01.
“
Excess
Cash Flow
”
shall
mean, with respect to the Borrower and its Subsidiaries on a consolidated basis
for any Applicable Period, EBITDA of the Borrower and its Subsidiaries on a
consolidated basis for such Applicable Period,
minus
,
without
duplication,
(a)
Debt
Service for such Applicable Period,
(b)
the
amount of any voluntary prepayment permitted hereunder of term Indebtedness
during such Applicable Period (other than any voluntary prepayment of the Loans,
which shall be the subject of Section 2.11(c)), so long as the amount of such
prepayment is not already reflected in Debt Service,
(c)
(i)
Capital Expenditures by the Borrower and the Subsidiaries on a consolidated
basis during such Applicable Period that are paid in cash (to the extent
permitted under this Agreement) and (ii) the aggregate consideration paid in
cash during the Applicable Period in respect of Permitted Business Acquisitions
and other Investments permitted hereunder
less
any
amounts received in respect thereof as a return of capital,
(d)
Capital
Expenditures that the Borrower or any Subsidiary shall, during such Applicable
Period, become obligated to make but that are not made during such Applicable
Period (to the extent permitted under this Agreement);
provided
,
that
(i) Holdings shall deliver a certificate to the Administrative Agent not
later than 90 days after the end of such Applicable Period, signed by a
Responsible Officer of the Borrower and certifying that such Capital
Expenditures and the delivery of the related equipment will be made in the
following Applicable Period, and (ii) any amount so deducted shall not be
deducted again in a subsequent Applicable Period,
(e)
Taxes
paid in cash by Holdings and its Subsidiaries on a consolidated basis during
such Applicable Period or that will be paid within six months after the close
of
such Applicable Period;
provided
,
that
with respect to any such amounts to be paid after the close of such Applicable
Period, (i) any amount so deducted shall not be deducted again in a subsequent
Applicable Period, and (ii) appropriate reserves shall have been established
in
accordance with GAAP,
(f)
an
amount
equal to any increase in Working Capital of the Borrower and its Subsidiaries
for such Applicable Period,
(g)
cash
expenditures made in respect of Swap Agreements during such Applicable Period,
to the extent not reflected in the computation of EBITDA or Interest
Expense,
(h)
permitted
dividends or distributions or repurchases of its Equity Interests paid in cash
by the Borrower during such Applicable Period and permitted dividends paid
by
any Subsidiary to any person other than Holdings, the Borrower or any of the
Subsidiaries during such Applicable Period, in each case in accordance with
Section 6.06 (other than Section 6.06(e)),
(i)
amounts
paid in cash during such Applicable Period on account of (A) items that
were accounted for as noncash reductions of Net Income in determining
Consolidated Net Income or as noncash reductions of Consolidated Net Income
in
determining EBITDA of the Borrower and its Subsidiaries in a prior Applicable
Period and (B) reserves or accruals established in purchase accounting,
(j)
to
the
extent not deducted in the computation of Net Proceeds in respect of any asset
disposition or condemnation giving rise thereto, the amount of any mandatory
prepayment of Indebtedness (other than Indebtedness created hereunder or under
any other Loan Document), together with any interest, premium or penalties
required to be paid (and actually paid) in connection therewith,
and
(k)
the
aggregate amount of items that were added to or not deducted from Net Income
in
calculating Consolidated Net Income or were added to or not deducted from
Consolidated Net Income in calculating EBITDA to the extent such items
represented a cash payment (which had not reduced Excess Cash Flow upon the
accrual thereof in a prior Applicable Period), or an accrual for a cash payment,
by the Borrower and its Subsidiaries or did not represent cash received by
the
Borrower and its Subsidiaries, in each case on a consolidated basis during
such
Applicable Period,
plus
,
without
duplication,
(a)
an
amount
equal to any decrease in Working Capital for such Applicable
Period,
(b)
all
amounts referred to in clauses (b), (c), (d) and (h) above to the extent
funded with the proceeds of the issuance or the incurrence of Indebtedness
(including Capital Lease Obligations and purchase money Indebtedness, but
excluding, solely as relating to Capital Expenditures, proceeds of Revolving
Facility Loans), the sale or issuance of any Equity Interests (including any
capital contributions) and any loss, damage, destruction or condemnation of,
or
any sale, transfer or other disposition (including any sale and leaseback of
assets and any mortgage or lease of Real Property) to any person of any asset
or
assets, in each case to the extent there is a corresponding deduction from
Excess Cash Flow above,
(c)
to
the
extent any permitted Capital Expenditures referred to in clause (d) above
and the delivery of the related equipment do not occur in the following
Applicable Period of the Borrower specified in the certificate of the Borrower
provided pursuant to clause (d) above, the amount of such Capital
Expenditures that were not so made in such following Applicable
Period,
(d)
cash
payments received in respect of Swap Agreements during such Applicable Period
to
the extent (i) not included in the computation of EBITDA or (ii) such payments
do not reduce Cash Interest Expense,
(e)
any
extraordinary or nonrecurring gain realized in cash during such Applicable
Period (except to the extent such gain consists of Net Proceeds subject to
Section 2.11(b)),
(f)
to
the
extent deducted in the computation of EBITDA, cash interest income,
and
(g)
the
aggregate amount of items that were deducted from or not added to Net Income
in
connection with calculating Consolidated Net Income or were deducted from or
not
added to Consolidated Net Income in calculating EBITDA to the extent either
(i)
such items represented cash received by the Borrower or any Subsidiary or (ii)
such items do not represent cash paid by the Borrower or any Subsidiary, in
each
case on a consolidated basis during such Applicable Period.
“
Excess
Cash Flow Interim Period
”
shall
mean, (x) during any Excess Cash Flow Period, any one-, two-, or three-quarter
period (a) commencing on the later of (i) the end of the immediately preceding
Excess Cash Flow Period and (ii) if applicable, the end of any prior Excess
Cash
Flow Interim Period occurring during the same Excess Cash Flow Period and (b)
ending on the last day of the most recently ended fiscal quarter (other than
the
last day of the Fiscal Year) during such Excess Cash Flow Period for which
financial statements are available and (y) during the period from the Closing
Date until the beginning of the first Excess Cash Flow Period, any period
commencing on the Closing Date and ending on the last day of the most recently
ended fiscal quarter for which financial statements are available.
“
Excess
Cash Flow Period
”
shall
mean each fiscal year of the Borrower, commencing with the fiscal year of the
Borrower ending on December 29, 2007.
“
Exchange
Act
”
means
the Securities Exchange Act of 1934, as amended.
“
Excluded
Indebtedness
”
shall
mean all Indebtedness permitted to be incurred under Section 6.01 (other
than Section 6.01(v)).
“
Excluded
Taxes
”
shall
mean, with respect to the Administrative Agent, any Lender, any Issuing Bank
or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) any income taxes imposed on (or measured by)
its
net income (or franchise taxes imposed in lieu of net income taxes) by the
United States of America (or any state or locality thereof) or the jurisdiction
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending
office is located or any other jurisdiction as a result of such recipient
engaging in a trade or business in such jurisdiction for tax purposes (provided
that no such person shall be deemed to be located or engaged in a trade or
business in the United States solely as a result of lending under this
Agreement), (b) any branch profits tax or any similar tax that is imposed by
any
jurisdiction described in clause (a) above, (c) in the case of a Lender
making a Loan to the Borrower, any tax (including any backup withholding tax)
imposed by the United States (or the jurisdiction under the laws of which such
Lender is organized or in which its principal office is located or in which
its
applicable lending office is located or any other jurisdiction as a result
of
such Lender engaging in a trade or business in such jurisdiction for tax
purposes) that (x) is in effect and would apply to amounts payable hereunder
to
such Lender at the time such Lender becomes a party to such Loan to the Borrower
(or designates a new lending office), except to the extent that the assignor
to
such Lender in the case of an assignment or the Lender in the case of a
designation of a new lending office (for the absence of doubt, other than the
lending office at the time such Lender becomes a party to such Loan) was
entitled, at the time of such assignment or designation of a new lending office,
respectively, to receive additional amounts from a Loan Party with respect
to
any withholding tax pursuant to Section 2.17(a) or Section 2.17(c) or
(y) is attributable to such Lender’s failure to comply with Section 2.17(e)
or (f) with respect to such Loan and (d) any taxes that are imposed as a result
of any event occurring after the Lender becomes a Lender (other than an event
described in clause (a) or (b) of the definition of Change in Law and other
than
as a result of any actions taken by a Loan Party) in the case of clause (a),
(b), (c) and (d), together with any and all interest and penalties related
thereto.
“
Existing
Credit Agreement
”
means
that certain Second Amended and Restated Credit and Guaranty Agreement, dated
as
of August 9, 2004, as amended or amended and restated from time to time, by
and
among Berry Plastics Corporation, BPC Holding Corporation, certain subsidiaries
of Berry Plastics Corporation, Deutsche Bank Trust Company Americas, as
administrative agent, Goldman Sachs Credit Partners L.P., JPMorgan Chase Bank,
N.A., Fleet National Bank and the Royal Bank of Scotland.
“
Existing
Letters of Credit
”
means
those Standby Letters of Credit or Trade Letters of Credit issued and
outstanding as of the date hereof set forth on Schedule 1.01(c).
“
Facility
”
shall
mean the respective facility and commitments utilized in making Loans and credit
extensions hereunder, it being understood that as of the date of this Agreement
there are two Facilities,
i.e.
,
the
Term B Facility and the Revolving Facility (and no Incremental Term Facility
or
Incremental Revolving Facility Commitments), and thereafter, may include the
Incremental Term Facility and Incremental Revolving Facility
Commitments.
“
Federal
Funds Effective Rate
”
shall
mean, for any day, the rate per annum equal to the weighted average of the
rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day;
provided
that (a)
if such day is not a Business Day, the Federal Funds Effective Rate for such
day
shall be such rate on such transactions on the next preceding Business Day
as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Effective
Rate
for such day shall be the average rate (rounded upward, if necessary, to a
whole
multiple of 1/100 of 1%) charged to Credit Suisse on such day on such
transactions as determined by the Administrative Agent.
“
Fee
Letter
”
shall
mean that certain Amended and Restated Fee Letter dated as of August 2, 2006
by
and among the Borrower, Credit Suisse Securities (USA) LLC, Credit Suisse,
Deutsche Bank Trust Company Americas, Deutsche Bank Cayman Islands Branch and
Deutsche Bank Securities Inc.
“
Fees
”
shall
mean the Commitment Fees, the L/C Participation Fees, the Issuing Bank Fees
and
the Administrative Agent Fees.
“
Financial
Officer
”
of
any
person shall mean the Chief Financial Officer, principal accounting officer,
Treasurer, Assistant Treasurer or Controller of such person.
“
Financial
Performance Covenant
”
shall
mean the covenant of the Borrower set forth in Section 6.11.
“
First
Lien Debt
”
at
any
date shall mean (i) the aggregate principal amount of Consolidated Debt of
the
Borrower and its Subsidiaries outstanding at such date that consists of, without
duplication, Indebtedness that in each case is then secured by first priority
Liens on property or assets of the Borrower and its Subsidiaries (other than
property or assets held in a defeasance or similar trust or arrangement for
the
benefit of the Indebtedness secured thereby), less (ii) without duplication,
the
Unrestricted Cash and Permitted Investments of the Borrower and its Subsidiaries
on such date.
“
Foreign
Pledge Agreement
”
shall
mean a pledge agreement with respect to the Pledged Collateral that constitutes
Equity Interests of a “first tier” Foreign Subsidiary, governed by the law of
the jurisdiction of organization of such Foreign Subsidiary, in form and
substance reasonably satisfactory to the Administrative Agent;
provided
,
that in
no event shall more than 65% of the issued and outstanding voting Equity
Interests of such Foreign Subsidiary be pledged to secure Obligations of the
Borrower.
“
Foreign
Subsidiary
”
shall
mean any Subsidiary that is incorporated or organized under the laws of any
jurisdiction other than the United States of America, any State thereof or
the
District of Columbia.
“
Funds
”
shall
have the meaning assigned to such term in the first recital hereto.
“
Fund
Affiliates
”
shall
mean (i) each Affiliate of a Fund, (ii) any individual who is a partner or
employee of Apollo Management, L.P., Apollo Management IV, L.P. or Apollo
Management V, L.P. and (iii) Graham BPC Investment Holdings, LP.
“
Fund
Termination Fees
”
shall
have the meaning specified in Section 6.07(b)(xiv).
“
GAAP
”
shall
mean generally accepted accounting principles in effect from time to time in
the
United States, applied on a consistent basis, subject to the provisions of
Section 1.02;
provided
that any
reference to the application of GAAP in Sections 3.13(b), 3.20, 5.03, 5.07
and
6.02(e) to a Foreign Subsidiary (and not as a consolidated Subsidiary of the
Borrower) shall mean generally accepted accounting principles in effect from
time to time in the jurisdiction of organization of such Foreign
Subsidiary.
“
Governmental
Authority
”
shall
mean any federal, state, local or foreign court or governmental agency,
authority, instrumentality or regulatory or legislative body.
“
Guarantee
”
of
or
by any person (the “
guarantor
”)
shall
mean (a) any obligation, contingent or otherwise, of the guarantor guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other
obligation of any other person (the “
primary
obligor
”)
in any
manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay or
otherwise) or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness or other obligation, (ii)
to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof,
(iii)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, (iv) entered into for
the
purpose of assuring in any other manner the holders of such Indebtedness or
other obligation of the payment thereof or to protect such holders against
loss
in respect thereof (in whole or in part) or (v) as an account party in respect
of any letter of credit, bank guarantee or other letter of guaranty issued
to
support such Indebtedness or other obligation, or (b) any Lien on any assets
of
the guarantor securing any Indebtedness (or any existing right, contingent
or
otherwise, of
the
holder of Indebtedness to be secured by such a Lien) of any other person,
whether or not such Indebtedness or other obligation is assumed by the
guarantor;
provided
,
however
,
the
term “Guarantee” shall not include endorsements of instruments for deposit or
collection in the ordinary course of business or customary and reasonable
indemnity obligations in effect on the Closing Date or entered into in
connection with any acquisition or disposition of assets permitted by this
Agreement (other than such obligations with respect to Indebtedness). The
amount
of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the Indebtedness in respect of which such Guarantee
is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
“
guarantor
”
shall
have the meaning assigned to such term in the definition of the term
“Guarantee.”
“
Hazardous
Materials
”
shall
mean all pollutants, contaminants, wastes, chemicals, materials, substances
and
constituents, including, without limitation, explosive or radioactive substances
or petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls or radon gas, of any nature subject to
regulation or which can give rise to liability under any Environmental
Law.
“
Holdings
”
shall
have the meaning assigned to such term in the introductory paragraph of this
Agreement.
“
Immaterial
Subsidiary
”
shall
mean any Subsidiary that, as of the last day of the fiscal quarter of the
Borrower most recently ended, (a) did not have assets with a value in excess
of
5.0% of the Consolidated Total Assets or revenues representing in excess of
5.0%
of total revenues of the Borrower and the Subsidiaries on a consolidated basis
as of such date and (b) when taken together with all other Immaterial
Subsidiaries as of such date, did not have assets with a value in excess of
10.0% of the Consolidated Total Assets or revenues representing in excess of
10.0% of total revenues of the Borrower and the Subsidiaries on a consolidated
basis as of such date. Each Immaterial Subsidiary as of the Closing Date shall
be set forth in Schedule 1.01(d).
“
Increased
Amount Date
”
shall
have the meaning assigned to such term in Section 2.21.
“
Incremental
Amount
”
shall
mean, at any time, the excess, if any, of (a) $200.0 million
over
(b) the
aggregate amount of all Incremental Term Loan Commitments and Incremental
Revolving Facility Commitments established prior to such time pursuant to
Section 2.21.
“
Incremental
Assumption Agreement
”
shall
mean an Incremental Assumption Agreement in form and substance reasonably
satisfactory to the Administrative Agent, among the Borrower, the Administrative
Agent and one or more Incremental Term Lenders and/or Incremental Revolving
Facility Lenders.
“
Incremental
Revolving Facility Commitment
”
shall
mean any increased or incremental Revolving Facility Commitment provided
pursuant to Section 2.21.
“
Incremental
Revolving Facility Lender
”
shall
mean a Lender with a Revolving Facility Commitment or an outstanding Revolving
Facility Loan as a result of an Incremental Revolving Facility
Commitment.
“
Incremental
Term Borrowing
”
shall
mean a Borrowing comprised of Incremental Term Loans.
“
Incremental
Term Facility
”
shall
mean the Incremental Term Loan Commitments and the Incremental Term Loans made
hereunder.
“
Incremental
Term Facility Maturity Date
”
shall
mean, with respect to any series or tranche of Incremental Term Loans
established pursuant to an Incremental Assumption Agreement, the maturity date
for as set forth in such Incremental Assumption Agreement.
“
Incremental
Term Lender
”
shall
mean a Lender with an Incremental Term Loan Commitment or an outstanding
Incremental Term Loan.
“
Incremental
Term Loan Commitment
”
shall
mean the commitment of any Lender, established pursuant to Section 2.21, to
make Incremental Term Loans to the Borrower.
“
Incremental
Term Loan Installment Date
”
shall
have, with respect to any series or tranche of Incremental Term Loans
established pursuant to an Incremental Assumption Agreement, the meaning
assigned to such term in Section 2.10(a)(ii).
“
Incremental
Term Loans
”
shall
mean Term Loans made by one or more Lenders to the Borrower pursuant to Section
2.01(c). Incremental Term Loans may be made in the form of additional Term
B
Loans or, to the extent permitted by Section 2.21 and provided for in the
relevant Incremental Assumption Agreement, Other Term Loans.
“
Indebtedness
”
of
any
person shall mean, without duplication, (a) all obligations of such person
for
borrowed money, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
under conditional sale or other title retention agreements relating to property
or assets purchased by such person, (d) all obligations of such person issued
or
assumed as the deferred purchase price of property or services, to the extent
that the same would be required to be shown as a long term liability on a
balance sheet prepared in accordance with GAAP, (e) all Capital Lease
Obligations of such person, (f) all net payments that such person would have
to
make in the event of an early termination, on the date Indebtedness of such
person is being determined, in respect of outstanding Swap Agreements, (g)
the
principal component of all obligations, contingent or otherwise, of such person
as an account party in respect of letters of credit and bank guarantees, (h)
the
principal component of all obligations of such person in respect of bankers’
acceptances, (i) all Guarantees by such person of Indebtedness described in
clauses (a) to (h) above) and (j) the amount of all obligations of such person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock (excluding accrued dividends that have not increased the
liquidation preference of such Disqualified Stock);
provided
,
that
Indebtedness shall not
include
(A) trade payables, accrued expenses and intercompany liabilities arising
in the
ordinary course of business, (B) prepaid or deferred revenue arising in the
ordinary course of business, (C) purchase price holdbacks arising in the
ordinary course of business in respect of a portion of the purchase price
of an
asset to satisfy unperformed obligations of the seller of such asset or (D)
earn-out obligations until such obligations become a liability on the balance
sheet of such person in accordance with GAAP. The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is
a
general partner, other than to the extent that the instrument or agreement
evidencing such Indebtedness expressly limits the liability of such person
in
respect thereof. To the extent not otherwise included, Indebtedness shall
include the amount of any Receivables Net Investment.
“
Indemnified
Taxes
”
shall
mean all Taxes other than Excluded Taxes.
“
Indemnitee
”
shall
have the meaning assigned to such term in Section 9.05(b).
“
Ineligible
Institution
”
shall
mean the persons identified in writing to the Administrative Agent by the
Borrower on the Closing Date, and as may be identified in writing to the
Administrative Agent by the Borrower from time to time thereafter, with the
written consent of the Administrative Agent, by delivery of a notice thereof
to
the Administrative Agent setting forth such person or persons (or the person
or
persons previously identified to the Administrative Agent that are to be no
longer considered “Ineligible Institutions”).
“
Information
”
shall
have the meaning assigned to such term in Section 3.14(a).
“
Information
Memorandum
”
shall
mean the Confidential Information Memorandum dated August 2006, as modified
or
supplemented prior to the Closing Date.
“
Initial
Pro Forma Adjustment
”
shall
mean an amount equal to $3.125 million for each quarterly period ending
September 30, 2006 and December 31, 2006.
“
Intercreditor
Agreement
”
shall
mean the Intercreditor Agreement, dated as of September 20, 2006, by and among
Credit Suisse, Cayman Islands Branch, as first lien agent, Wells Fargo Bank,
N.A., as trustee, Holdings, the Borrower and the Subsidiary Loan Parties, as
in
effect on the Closing Date.
“
Interest
Election Request
”
shall
mean a request by the Borrower to convert or continue a Term Borrowing or
Revolving Facility Borrowing in accordance with Section 2.07.
“
Interest
Expense
”
shall
mean, with respect to any person for any period, the sum of (a) gross interest
expense of such person for such period on a consolidated basis, including (i)
the amortization of debt discounts, (ii) the amortization of all fees (including
fees with respect to Swap Agreements) payable in connection with the incurrence
of Indebtedness to the extent included in interest expense and (iii) the portion
of any payments or accruals with respect to Capital Lease Obligations allocable
to interest expense, (b) capitalized interest of such person, and (c)
commissions, discounts, yield and other fees and charges incurred in connection
with any Permitted Receivables Financing which are payable to any person other
than the Borrower or a Subsidiary Loan Party. For purposes of the foregoing,
gross interest
expense
shall be determined after giving effect to any net payments made or received
and
costs incurred by the Borrower and the Subsidiaries with respect to Swap
Agreements.
“
Interest
Payment Date
”
shall
mean, (a) with respect to any Eurocurrency Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the
case
of a Eurocurrency Borrowing with an Interest Period of more than three months’
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months’ duration been applicable to such Borrowing
and, in addition, the date of any refinancing or conversion of such Borrowing
with or to a Borrowing of a different Type and (b) with respect to any ABR
Loan
the last Business Day of each March, June, September and December.
“
Interest
Period
”
shall
mean, as to any Eurocurrency Borrowing, the period commencing on the date of
such Borrowing or on the last day of the immediately preceding Interest Period
applicable to such Borrowing, as applicable, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter (or 9 or
12
months, if at the time of the relevant Borrowing, all relevant Lenders consent
to such interest periods), as the Borrower may elect, or the date any
Eurocurrency Borrowing is converted to an ABR Borrowing in accordance with
Section 2.07 or repaid or prepaid in accordance with Section 2.09,
2.10 or 2.11;
provided
,
however
,
that if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
“
Investment
”
shall
have the meaning assigned to such term in Section 6.04.
“
Issuing
Bank
”
shall
mean Credit Suisse and each other Issuing Bank designated pursuant to
Section 2.05(k), in each case in its capacity as an issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in
Section 2.05(i). An Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of such Issuing Bank, in
which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
“
Issuing
Bank Fees
”
shall
have the meaning assigned to such term in Section 2.12(b).
“
Joint
Lead Arrangers
”
shall
mean Citigroup Global Markets Inc. and Credit Suisse, in their capacities as
joint lead arrangers.
“
Junior
Financing
”
shall
have the meaning assigned to such term in Section 6.09(b).
“
L/C
Disbursement
”
shall
mean (i) a payment or disbursement made by an Issuing Bank pursuant to a Letter
of Credit (other than an Acceptance Credit) or (ii) a payment of a Bankers’
Acceptance upon presentation.
“
L/C
Participation Fee
”
shall
have the meaning assigned such term in Section 2.12(b).
“
Lender
”
shall
mean each financial institution listed on
Schedule 2.01
,
as well
as any person that becomes a “Lender” hereunder pursuant to
Section 9.04.
“
Lender
Default
”
shall
mean (i) the refusal (which has not been retracted) of a Lender to make
available its portion of any Borrowing, to acquire participations in a Swingline
Loan pursuant to Section 2.04 or to fund its portion of any unreimbursed
payment under Section 2.05(e), or (ii) a Lender having notified the
Borrower and/or the Administrative Agent in writing that it does not intend
to
comply with its obligations under Section 2.04, 2.05 or 2.06.
“
Letter
of Credit
”
shall
mean any letter of credit and any bank guarantee issued pursuant to
Section 2.05, including any Acceptance Credit and any Alternate Currency
Letter of Credit. Each Existing Letter of Credit shall be deemed to constitute
a
Letter of Credit issued hereunder on the Closing Date for all purposes of the
Loan Documents.
“
Letter
of Credit Commitment
”
shall
mean, with respect to each Issuing Bank, the commitment of such Issuing Bank
to
issue Letters of Credit pursuant to Section 2.05.
“
Letter
of Credit Sublimit
”
shall
mean the aggregate Letter of Credit Commitments of the Issuing Banks, in an
amount not to exceed $50.0 million (or the equivalent thereof in an Alternate
Currency).
“
LIBO
Rate
”
shall
mean, with respect to any Eurocurrency Borrowing for any Interest Period, the
rate per annum equal to the British Bankers Association LIBOR Rate
(“
BBA
LIBOR
”),
as
published by Bloomberg (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time
to
time) at approximately 11:00 a.m., London time, two Business Days prior to
the
commencement of such Interest Period, for Dollar deposits (for delivery on
the
first day of such Interest Period) with a term equivalent to such Interest
Period;
provided
,
that if
such rate is not available at such time for any reason, then the “LIBO Rate” for
such Interest Period shall be the rate per annum determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery
on
the first day of such Interest Period in same day funds in the approximate
amount of the Eurocurrency Rate Loan being made, continued or converted by
Credit Suisse and with a term equivalent to such Interest Period would be
offered by Credit Suisse’s London Branch to major banks in the London interbank
Eurocurrency market at their request at approximately 11:00 a.m. (London time)
two Business Days prior to the commencement of such Interest
Period.
“
Lien
”
shall
mean, with respect to any asset, (a) any mortgage, deed of trust, lien,
hypothecation, pledge, charge, security interest or similar encumbrance in
or on
such asset and (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset, provided, that in no event shall an operating lease
or
an agreement to sell be deemed to constitute a Lien.
“
Loan
Documents
”
shall
mean this Agreement, the Letters of Credit, the Security Documents, the
Intercreditor Agreement and any Note issued under Section 2.09(e), and
solely for the purposes of Sections 4.02 and 7.01 hereof, the Fee
Letter.
“
Loan
Parties
”
shall
mean Holdings, the Borrower and the Subsidiary Loan Parties.
“
Loans
”
shall
mean the Term B Loans, the Incremental Term Loans (if any), the Revolving
Facility Loans and the Swingline Loans.
“
Local
Time
”
shall
mean New York City time.
“
Majority
Lenders
”
of
any
Facility shall mean, at any time, Lenders under such Facility having Loans
and
unused Commitments representing more than 50% of the sum of all Loans
outstanding under such Facility and unused Commitments under such Facility
at
such time.
“
Management
Group
”
means
the group consisting of the directors, executive officers and other key
management personnel of the Borrower, Holdings and their Subsidiaries, as the
case may be, on the Closing Date together with (a) any new directors whose
election by such boards of directors or whose nomination for election by the
shareholders of the Borrower or Holdings, as the case may be, was approved
by a
vote of a majority of the directors of the Borrower or Holdings, as the case
may
be, then still in office who were either directors on the Closing Date or whose
election or nomination was previously so approved and (b) executive officers
and
other key management personnel of the Borrower or Holdings and their
Subsidiaries, as the case may be, hired at a time when the directors on the
Closing Date together with the directors so approved constituted a majority
of
the directors of the Borrower or Holdings, as the case may be.
“
Margin
Stock
”
shall
have the meaning assigned to such term in Regulation U.
“
Material
Adverse Effect
”
shall
mean a material adverse effect on the business, property, operations or
condition of the Borrower and its Subsidiaries, taken as a whole, or the
validity or enforceability of any of the material Loan Documents or the rights
and remedies of the Administrative Agent and the Lenders thereunder;
provided
,
however
,
that
solely for purposes of determining whether the condition in Section 4.01(b)
has
been satisfied in connection with the first Credit Event on the Closing Date,
any reference to “Material Adverse Effect” in any of the representations and
warranties referred to in Section 4.01(b) shall mean, “Company Material Adverse
Effect” as defined in the Acquisition Agreement.
“
Material
Indebtedness
”
shall
mean Indebtedness (other than Loans and Letters of Credit) of any one or more
of
Holdings, the Borrower or any Subsidiary in an aggregate principal amount
exceeding $20.0 million.
“
Material
Subsidiary
”
shall
mean any Subsidiary other than Immaterial Subsidiaries.
“
Maximum
Rate
”
shall
have the meaning assigned to such term in Section 9.09.
“
Moody’s
”
shall
mean Moody’s Investors Service, Inc.
“
Mortgaged
Properties
”
shall
mean the Real Properties owned in fee by the Loan Parties that are set forth
on
Schedule 1.01(b)
and each
additional Real Property encumbered by a Mortgage pursuant to
Section 5.10.
“
Mortgages
”
shall
mean, collectively, the mortgages, trust deeds, deeds of trust, deeds to secure
debt, assignments of leases and rents, and other security documents delivered
with respect to Mortgaged Properties, each substantially in the form of
Exhibit D
(with
such changes as are reasonably consented to by the Administrative Agent to
account for local law matters), as amended, supplemented or otherwise modified
from time to time.
“
Multiemployer
Plan
”
shall
mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA to
which the Borrower, Holdings or any Subsidiary or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or
(o) of Code Section 414) is making or accruing an obligation to make
contributions, or has within any of the preceding six plan years made or accrued
an obligation to make contributions.
“
Net
Income
”
shall
mean, with respect to any person, the net income (loss) of such person,
determined in accordance with GAAP and before any reduction in respect of
preferred stock dividends.
“
Net
Proceeds
”
shall
mean:
(a)
100%
of
the cash proceeds actually received by the Borrower or any Subsidiary Loan
Party
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise and including casualty insurance settlements and
condemnation awards, but only as and when received) from any Asset Sale (other
than those pursuant to Section 6.05(a), (b), (c), (d) (except as contemplated
by
Section 6.03(b)(ii)), (e), (f), (h), (i) or (j)), net of (i) attorneys’ fees,
accountants’ fees, investment banking fees, survey costs, title insurance
premiums, and related search and recording charges, transfer taxes, deed or
mortgage recording taxes, required debt payments and required payments of other
obligations relating to the applicable asset to the extent such debt or
obligations are secured by a Lien permitted hereunder (other than pursuant
to
the Loan Documents) on such asset, other customary expenses and brokerage,
consultant and other customary fees actually incurred in connection therewith,
(ii) Taxes paid or payable as a result thereof, and (iii) the amount of any
reasonable reserve established in accordance with GAAP against any adjustment
to
the sale price or any liabilities (other than any taxes deducted pursuant to
clause (i) above) (x) related to any of the applicable assets and (y) retained
by the Borrower or any of the Subsidiaries including, without limitation,
pension and other post-employment benefit liabilities and liabilities related
to
environmental matters or against any indemnification obligations (however,
the
amount of any subsequent reduction of such reserve (other than in connection
with a payment in respect of any such liability) shall be deemed to be Net
Proceeds of such Asset Sale occurring on the date of such reduction);
provided
,
that,
if no Event of Default exists and the Borrower shall deliver a certificate
of a
Responsible Officer of the Borrower to the Administrative Agent promptly
following receipt of any
such
proceeds setting forth the Borrower’s intention to use any portion of such
proceeds, to acquire, maintain, develop, construct, improve, upgrade or repair
assets useful in the business of the Borrower and the Subsidiaries or to make
investments in Permitted Business Acquisitions, in each case within 15 months
of
such receipt, such portion of such proceeds shall not constitute Net Proceeds
except to the extent not, within 15 months of such receipt, so used or
contractually committed to be so used (it being understood that if any portion
of such proceeds are not so used within such 15-month period but within such
15-month period are contractually committed to be used, such proceeds shall
be
used within a period of 18 months from the receipt thereof, then, upon the
termination of such contract or expiration of the 18-month period, such
remaining portion shall constitute Net Proceeds as of the date of such
termination or expiry without giving effect to this proviso);
provided
,
further
,
that
(x) no proceeds realized in a single transaction or series of related
transactions shall constitute Net Proceeds unless such proceeds shall exceed
$5.0 million, (y) no proceeds shall constitute Net Proceeds in any fiscal year
until the aggregate amount of all such proceeds in such fiscal year shall exceed
$10.0
million,
and (z) at any time during the 18-month reinvestment period contemplated by
the
immediately preceding proviso above, if, on a Pro Forma Basis after giving
effect to the Asset Sale and the application of the proceeds thereof, the Total
Net First Lien Leverage Ratio is less than or equal to 2.00 to 1.00, up to
$75.0
million of such proceeds shall not constitute Net Proceeds; and
(b)
100%
of
the cash proceeds from the incurrence, issuance or sale by the Borrower or
any
Subsidiary Loan Party of any Indebtedness (other than Excluded Indebtedness),
net of all taxes and fees (including investment banking fees), commissions,
costs and other expenses, in each case incurred in connection with such issuance
or sale.
For
purposes of calculating the amount of Net Proceeds, fees, commissions and other
costs and expenses payable to the Borrower or any Affiliate of the Borrower
shall be disregarded, except for financial advisory fees customary in type
and
amount paid to Affiliates of the Fund and otherwise not prohibited from being
paid hereunder.
“
Non-Consenting
Lender
”
shall
have the meaning assigned to such term in Section 2.19(c).
“
Note
”
shall
have the meaning assigned to such term in Section 2.09(e).
“
Obligations
”
shall
mean all amounts owing to the Administrative Agent, or any Lender pursuant
to
the terms of this Agreement or any other Loan Document.
“
Other
Revolving Loans
”
shall
have the meaning assigned to such term in Section 2.21.
“
Other
Taxes
”
shall
mean any and all present or future stamp or documentary taxes or any other
excise, transfer, sales, property, intangible, mortgage recording, or similar
taxes, charges or levies arising from any payment made hereunder or from the
execution,
delivery
or enforcement of, or otherwise with respect to, the Loan Documents, and
any and
all interest and penalties related thereto (but not Excluded Taxes described
in
clause (a), clause (b) and, to the extent the Borrower has reasonably requested
applicable certificates and/or forms from the Lender, clause (c)(y) of the
definition of Excluded Taxes).
“
Other
Term Loans
”
shall
have the meaning assigned to such term in Section 2.21.
“
Overdraft
Line
”
shall
have the meaning assigned to such term in Section 6.01(w).
“
Parent
Entity
”
means
any direct or indirect parent of Holdings.
“
Participant
”
shall
have the meaning assigned to such term in Section 9.04(c).
“
PBGC
”
shall
mean the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.
“
Perfection
Certificate
”
shall
mean the Perfection Certificate with respect to Borrower and the other Loan
Parties in a form reasonably satisfactory to the Administrative
Agent.
“
Permitted
Business Acquisition
”
shall
mean any acquisition of all or substantially all the assets of, or all the
Equity Interests (other than directors’ qualifying shares) in, or merger or
consolidation with, a person or division or line of business of a person (or
any
subsequent investment made in a person, division or line of business previously
acquired in a Permitted Business Acquisition), if immediately after giving
effect thereto: (i) no Event of Default shall have occurred and be continuing
or
would result therefrom; (ii) all transactions related thereto shall be
consummated in accordance with applicable laws; (iii) with respect to any such
acquisition or investment with a fair market value in excess of $20.0 million,
the Borrower and its Subsidiaries shall be in Pro Forma Compliance after giving
effect to such acquisition or investment and any related transactions; (iv)
any
acquired or newly formed Subsidiary shall not be liable for any Indebtedness
except for Indebtedness permitted by Section 6.01; (v) to the extent required
by
Section 5.10, any person acquired in such acquisition, if acquired by the
Borrower or a Domestic Subsidiary, shall be merged into the Borrower or a
Subsidiary Loan Party or become upon consummation of such acquisition a
Subsidiary Loan Party, and (vi) the aggregate amount of such acquisitions and
investments in assets that are not owned by the Borrower or Subsidiary Loan
Parties or in Equity Interests in persons that are not Subsidiary Loan Parties
or persons that do not become Subsidiary Loan Parties upon consummation of
such
acquisition shall not exceed the greater (x) 3.50% of Consolidated Total Assets
as of the end of the fiscal quarter immediately prior to the date of such
acquisition or investment for which financial statements have been delivered
pursuant to Section 5.04 and (y) $75.0 million.
“
Permitted
Cure Securities
”
shall
mean any equity securities of Holdings other than Disqualified Stock (a) which
have no mandatory redemption, repurchase or similar requirements and (b) upon
which all dividends or distributions (if any) shall, prior to 91 days after
the
Term B Facility Maturity Date, be payable solely in additional shares of such
equity security.
“
Permitted
Holder
”
shall
mean each of (i) the Funds and the Fund Affiliates, and (ii) the Management
Group.
“
Permitted
Investments
”
shall
mean:
(a)
direct
obligations of the United States of America or any member of the European Union
or any agency thereof or obligations guaranteed by the United States of America
or any member of the European Union or any agency thereof, in each case with
maturities not exceeding two years;
(b)
time
deposit accounts, certificates of deposit and money market deposits maturing
within 180 days of the date of acquisition thereof issued by a bank or trust
company that is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
having capital, surplus and undivided profits in excess of $250 million and
whose long-term debt, or whose parent holding company’s long-term debt, is rated
A (or such similar equivalent rating or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under
the Securities Act));
(c)
repurchase
obligations with a term of not more than 180 days for underlying securities
of
the types described in clause (a) above entered into with a bank meeting
the qualifications described in clause (b) above;
(d)
commercial
paper, maturing not more than one year after the date of acquisition, issued
by
a corporation (other than an Affiliate of the Borrower) organized and in
existence under the laws of the United States of America or any foreign country
recognized by the United States of America with a rating at the time as of
which
any investment therein is made of P-1 (or higher) according to Moody’s, or A-1
(or higher) according to S&P;
(e)
securities
with maturities of two years or less from the date of acquisition issued or
fully guaranteed by any State, commonwealth or territory of the United States
of
America, or by any political subdivision or taxing authority thereof, and rated
at least A by S&P or A by Moody’s;
(f)
shares
of
mutual funds whose investment guidelines restrict 95% of such funds’ investments
to those satisfying the provisions of clauses (a) through (e)
above;
(g)
money
market funds that (i) comply with the criteria set forth in Rule 2a-7 under
the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000.0 million;
and
(h)
time
deposit accounts, certificates of deposit and money market deposits (in each
case with or from a bank meeting the qualifications described in clause (b)
above) in an aggregate face amount not in excess of 0.5% of the total assets
of
the Borrower and the Subsidiaries, on a consolidated basis, as of the end of
the
Borrower’s most recently completed fiscal year; and
(i)
instruments
equivalent to those referred to in clauses (a) through (h) above denominated
in
any foreign currency comparable in credit quality and tenor to those referred
to
above and commonly used by corporations for cash management purposes in any
jurisdiction outside the United States to the extent reasonably required in
connection with any business conducted by any Subsidiary organized in such
jurisdiction.
“
Permitted
Liens
”
shall
have the meaning assigned to such term in Section 6.02.
“
Permitted
Receivables Documents
”
shall
mean all documents and agreements evidencing, relating to or otherwise governing
a Permitted Receivables Financing.
“
Permitted
Receivables Financing
”
shall
mean one or more transactions pursuant to which (i) Receivables Assets or
interests therein are sold to or financed by one or more Special Purpose
Receivables Subsidiaries, and (ii) such Special Purpose Receivables Subsidiaries
finance their acquisition of such Receivables Assets or interests therein,
or
the financing thereof, by selling or borrowing against Receivables Assets;
provided that (A) recourse to the Borrower or any Subsidiary (other than the
Special Purpose Receivables Subsidiaries) in connection with such transactions
shall be limited to the extent customary for similar transactions in the
applicable jurisdictions (including, to the extent applicable, in a manner
consistent with the delivery of a “true sale”/“absolute transfer” opinion with
respect to any transfer by the Borrower or any Subsidiary (other than a Special
Purpose Receivables Subsidiary)), and (B) the aggregate Receivables Net
Investment since the Closing Date shall not exceed $100 million at any
time.
“
Permitted
Refinancing Indebtedness
”
shall
mean any Indebtedness issued in exchange for, or the net proceeds of which
are
used to extend, refinance, renew, replace, defease or refund (collectively,
to
“
Refinance
”),
the
Indebtedness being Refinanced (or previous refinancings thereof constituting
Permitted Refinancing Indebtedness);
provided
,
that
(a) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so Refinanced (plus unpaid accrued
interest and premium thereon and underwriting discounts, fees, commissions
and
expenses), (b) except with respect to Section 6.01(i), the average life to
maturity of such Permitted Refinancing Indebtedness is greater than or equal
to
the earlier of (i) the weighted average life to maturity of the Indebtedness
being Refinanced and (ii) 90 days after the Term B Facility Maturity Date,
(c)
if the Indebtedness being Refinanced is subordinated in right of payment to
the
Obligations under this Agreement, such Permitted Refinancing Indebtedness shall
be subordinated in right of payment to such Obligations on terms at least as
favorable to the Lenders as those contained in the documentation governing
the
Indebtedness being Refinanced, (d) no Permitted Refinancing Indebtedness shall
have different obligors, or greater guarantees or security, than the
Indebtedness being Refinanced and (e) if the Indebtedness being Refinanced
is
secured by any collateral (whether equally and ratably with, or junior to,
the
Secured Parties or otherwise), such Permitted Refinancing Indebtedness may
be
secured by such collateral (including in respect of working capital facilities
of Foreign Subsidiaries otherwise permitted under this Agreement only, any
collateral pursuant to after-acquired property clauses to the extent any such
collateral secured the Indebtedness being Refinanced) on terms no less favorable
to the Secured Parties than those contained in the documentation governing
the
Indebtedness being Refinanced;
provided
further
,
that
with respect to a Refinancing of
(x)
the
Senior Subordinated Notes or other subordinated Indebtedness permitted to
be
incurred herein, such Permitted Refinancing Indebtedness shall (i) be
subordinated to the guarantee by Holdings and the Subsidiary Loan Parties
of the
Facilities, and (ii) be otherwise on terms not materially less favorable
to the
Lenders than those contained in the documentation governing the Indebtedness
being refinanced and (y) the Second Lien Notes, (i) the Liens, if any securing
such Permitted Refinancing Indebtedness shall be subject to an intercreditor
agreement that is substantially consistent with and no less favorable to
the
Lenders in all material respects with the Intercreditor Agreement and (ii)
such
Permitted Refinancing Indebtedness shall be otherwise on terms not materially
less favorable to the Lenders than those contained in the documentation
governing the Indebtedness being Refinanced.
“
person
”
shall
mean any natural person, corporation, business trust, joint venture,
association, company, partnership, limited liability company or government,
individual or family trusts, or any agency or political subdivision
thereof.
“
Plan
”
shall
mean any employee pension benefit plan, as such term is defined in Section
3(2)
of ERISA, (other than a Multiemployer Plan), (i) subject to the provisions
of
Title IV of ERISA, (ii) sponsored or maintained (at the time of determination
or
at any time within the five years prior thereto) by Holdings, the Borrower
or
any ERISA Affiliate, or (iii) in respect of which Holdings, the Borrower, any
Subsidiary or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.
“
Platform
”
shall
have the meaning assigned to such term in Section 9.17(b).
“
Pledged
Collateral
”
shall
have the meaning assigned to such term in the Collateral Agreement.
“
Pricing
Grid
”
shall
mean, with respect to the Revolving Facility Loans, the table set forth below:
Total
Net First Lien
Leverage
Ratio
|
Applicable
Margin for
ABR
Loans
|
Applicable
Margin for
Eurocurrency
Loans
|
Applicable
Commitment
Fee
|
Greater
than 2.00 to 1.0
|
1.00%
|
2.00%
|
0.50%
|
Less
than or equal to 2.00 to 1.0, but greater than 1.50 to 1.0
|
0.75%
|
1.75%
|
0.375%
|
Less
than or equal to 1.50 to 1.0
|
0.50%
|
1.50%
|
0.375%
|
For
the
purposes of the Pricing Grid, changes in the Applicable Margin and Applicable
Commitment Fee resulting from changes in the Total Net First Lien Leverage
Ratio
shall become effective on the date (the “
Adjustment
Date
”)
that
is three Business Days after the date on which
financial
statements are delivered to the Lenders pursuant to Section 5.04, commencing
with the delivery of such financial statements for the first full fiscal quarter
of the Borrower commencing after the Closing Date, and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified in Section 5.04, then, at the option of the Administrative Agent
or
the Required Lenders, until the date that is three Business Days after the
date
on which such financial statements are delivered, the pricing level that is
one
pricing level higher than the pricing level theretofore in effect shall apply
as
of the first Business Day after the date on which such financial statements
were
to have been delivered but were not delivered. Each determination of the Total
Net First Lien Leverage Ratio pursuant to the Pricing Grid shall be made in
a
manner consistent with the determination thereof pursuant to Section 6.11.
“
primary
obligor
”
shall
have the meaning given such term in the definition of the term
“Guarantee.”
“
Pro
Forma Adjusted EBITDA
”
shall
have the meaning assigned to such term in Section 3.05.
“
Pro
Forma Basis
”
shall
mean, as to any person, for any events as described below that occur subsequent
to the commencement of a period for which the financial effect of such events
is
being calculated, and giving effect to the events for which such calculation
is
being made, such calculation as will give pro forma effect to such events as
if
such events occurred on the first day of the four consecutive fiscal quarter
period ended on or before the occurrence of such event (the “
Reference
Period
”):
(i)
in making any determination of EBITDA, effect shall be given to any Asset Sale,
any acquisition (or any similar transaction or transactions not otherwise
permitted under Section 6.04 or 6.05 that require a waiver or consent of the
Required Lenders and such waiver or consent has been obtained), any dividend,
distribution or other similar payment, any designation of any Subsidiary as
an
Unrestricted Subsidiary and any Subsidiary Redesignation, the Initial Pro Forma
Adjustment for the first two quarters ending after the Closing Date, and any
restructurings of the business of the Borrower or any of its Subsidiaries that
are expected to have a continuing impact and are factually supportable, which
would include cost savings resulting from head count reduction, closure of
facilities and similar operational and other cost savings, which adjustments
the
Borrower determines are reasonable as set forth in a certificate of a Financial
Officer of the Borrower (the foregoing, together with any transactions related
thereto or in connection therewith, the “relevant transactions”), in each case
that occurred during the Reference Period (or, in the case of determinations
made pursuant to the definition of the term “Permitted Business Acquisition” or
pursuant to Sections 2.11(b), 6.01(r), or 6.06(e), occurring during the
Reference Period or thereafter and through and including the date upon which
the
respective Permitted Business Acquisition or incurrence of Indebtedness or
Liens
or dividend is consummated), (ii) in making any determination on a Pro Forma
Basis, (x) all Indebtedness (including Indebtedness issued, incurred or assumed
as a result of, or to finance, any relevant transactions and for which the
financial effect is being calculated, whether incurred under this Agreement
or
otherwise, but excluding normal fluctuations in revolving Indebtedness incurred
for working capital purposes and amounts outstanding under any Permitted
Receivables Financing, in each case not to finance any acquisition) issued,
incurred, assumed or permanently repaid during the Reference Period (or, in
the
case of determinations made pursuant to the definition of the term “Permitted
Business Acquisition” or pursuant to Sections 2.11(b), 6.01
(r)
or
6.06(e), occurring during the Reference Period or thereafter and through
and
including the date upon which the respective Permitted Business Acquisition
or
incurrence of Indebtedness or Liens or dividend is consummated) shall be
deemed
to have been issued, incurred, assumed or permanently repaid at the beginning
of
such period and (y) Interest Expense of such person attributable to interest
on
any Indebtedness, for which pro forma effect is being given as provided in
preceding clause (x), bearing floating interest rates shall be computed on
a pro
forma basis as if the rates that would have been in effect during the period
for
which pro forma effect is being given had been actually in effect during
such
periods and (iii) (A) any Subsidiary Redesignation then being designated,
effect
shall be given to such Subsidiary Redesignation and all other Subsidiary
Redesignations after the first day of the relevant Reference Period and on
or
prior to the date of the respective Subsidiary Redesignation then being
designated, collectively, and (B) any designation of a Subsidiary as an
Unrestricted Subsidiary, effect shall be given to such designation and all
other
designations of Subsidiaries as Unrestricted Subsidiaries after the first
day of
the relevant Reference Period and on or prior to the date of the then applicable
designation of a Subsidiary as an Unrestricted Subsidiary,
collectively.
Calculations
made pursuant to the definition of the term “Pro Forma Basis” shall be
determined in good faith by a Responsible Officer of the Borrower and may
include adjustments to reflect (1) operating expense reductions and other
operating improvements or synergies reasonably expected to result from such
relevant transaction, as follows: (x) for purposes of determining the Applicable
Margin, such adjustments shall reflect demonstrable operating expense reductions
and other demonstrable operating improvements or synergies that would be
includable in
pro
forma
financial statements prepared in accordance with Regulation S-X under the
Securities Act; and (y) for purposes of determining compliance with the
Financial Performance Covenant and achievement of other financial measures
provided for herein, such adjustments may reflect additional operating expense
reductions and other additional operating improvements and synergies that would
not be includable in
pro
forma
financial statements prepared in accordance with Regulation S-X but that are
reasonably anticipated by the Borrower to be realizable in connection with
such
relevant transaction (or any similar transaction or transactions made in
compliance with this Agreement or that require a waiver or consent of the
Required Lenders), are estimated on a good faith basis by the Borrower, and
are
reasonably satisfactory to the Administrative Agent and (2) all adjustments
of
the type set forth on Schedule 1.01(e) to the extent such adjustments, without
duplication, continue to be applicable. The Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer of the Borrower
setting forth such demonstrable or additional operating expense reductions
and
other operating improvements or synergies and information and calculations
supporting them in reasonable detail.
“
Pro
Forma Compliance
”
shall
mean, at any date of determination, that the Borrower and its Subsidiaries
shall
be in compliance, on a Pro Forma Basis after giving effect on a Pro Forma Basis
to the relevant transactions (including the assumption, the issuance, incurrence
and permanent repayment of Indebtedness), with the Financial Performance
Covenant recomputed as at the last day of the most recently ended fiscal quarter
of the Borrower and its Subsidiaries for which the financial statements and
certificates required pursuant to Section 5.04 have been delivered, and the
Borrower shall have delivered to the Administrative Agent a certificate of
a
Responsible Officer of the Borrower to such effect, together with all relevant
financial information.
“
Pro
Forma EBITDA
”
shall
have the meaning assigned to such term in Section 3.05(a).
“
Pro
Forma Financial Statements
”
shall
have the meaning assigned to such term in Section 3.05(a).
“
Projections
”
shall
mean the projections of Holdings, the Borrower and the Subsidiaries included
in
the Information Memorandum and any other projections and any forward-looking
statements (including statements with respect to booked business) of such
entities furnished to the Lenders or the Administrative Agent by or on behalf
of
Holdings, the Borrower or any of the Subsidiaries prior to the Closing
Date.
“
Qualified
CFC Holding Company
”
shall
mean a Wholly Owned Subsidiary of the Borrower that is a Delaware limited
liability company that is treated as a disregarded entity for U.S. federal
income tax purposes, that
(a)
is in
compliance with Section 6.15 and (b) the primary asset of which consists of
Equity Interests in either (i) a Foreign Subsidiary or(ii) a Delaware limited
liability company that is in compliance with Section 6.15 and the primary asset
of which consists of Equity Interests in a Foreign Subsidiary
.
“
Qualified
Equity Interests
”
means
any Equity Interests other than Disqualified Stock.
“
Qualified
IPO
”
shall
mean an underwritten public offering of the Equity Interests of Holdings (or
any
direct or indirect parent of Holdings) which generates cash proceeds of at
least
$50.0 million.
“
Real
Property
”
means,
collectively, all right, title and interest (including any leasehold estate)
in
and to any and all parcels of or interests in real property owned in fee or
leased by any Loan Party, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures incidental to the ownership or lease thereof.
“
Receivables
Assets
”
shall
mean accounts receivable (including any bills of exchange) and related assets
and property from time to time originated, acquired or otherwise owned by the
Borrower or any Subsidiary.
“
Receivables
Net Investment
”
shall
mean the aggregate cash amount paid by the lenders or purchasers under any
Permitted Receivables Financing in connection with their purchase of, or the
making of loans secured by, Receivables Assets or interests therein, as the
same
may be reduced from time to time by collections with respect to such Receivables
Assets or otherwise in accordance with the terms of the Permitted Receivables
Documents (but excluding any such collections used to make payments of items
included in clause (c) of the definition of Interest Expense); provided,
however, that if all or any part of such Receivables Net Investment shall have
been reduced by application of any distribution and thereafter such distribution
is rescinded or must otherwise be returned for any reason, such Receivables
Net
Investment shall be increased by the amount of such distribution, all as though
such distribution had not been made.
“
Reference
Period
”
shall
have the meaning assigned to such term in the definition of the term “Pro Forma
Basis.”
“
Refinance
”
shall
have the meaning assigned to such term in the definition of the term “Permitted
Refinancing Indebtedness,” and “
Refinanced
”
shall
have a meaning correlative thereto.
“
Refinanced
Indebtedness
”
shall
mean the Target’s 10¾% Senior Subordinated Notes due 2012 and the Second Amended
and Restated Credit and Guarantee Agreement by and among the Borrower, Holdings,
and certain Subsidiaries, Goldman Sachs Credit Partners, L.P., JPMorgan Chase
Bank, Fleet National Bank, the Royal Bank of Scotland and General Electric
Corporation (as amended or amended and restated from time to time).
“
Register
”
shall
have the meaning assigned to such term in Section 9.04(b).
“
Regulation
U
”
shall
mean Regulation U of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.
“
Regulation
X
”
shall
mean Regulation X of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.
“
Related
Fund
”
shall
mean, with respect to any Lender that is a fund that invests in bank or
commercial loans and similar extensions of credit, any other fund that invests
in bank or commercial loans and similar extensions of credit and is advised
or
managed by (a) such Lender, (b) an Affiliate of such Lender or (c) an entity
(or
an Affiliate of such entity) that administers, advises or manages such
Lender.
“
Related
Parties
”
shall
mean, with respect to any specified person, such person’s Affiliates and the
respective directors, trustees, officers, employees, agents and advisors of
such
person and such person’s Affiliates.
“
Release
”
shall
mean any spilling, leaking, seepage, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing, depositing,
emanating or migrating in, into, onto or through the environment.
“
Remaining
Present Value
”
shall
mean, as of any date with respect to any lease, the present value as of such
date of the scheduled future lease payments with respect to such lease,
determined with a discount rate equal to a market rate of interest for such
lease reasonably determined at the time such lease was entered
into.
“
Reportable
Event
”
shall
mean any reportable event as defined in Section 4043(c) of ERISA or the
regulations issued thereunder, other than those events as to which the 30-day
notice period referred to in Section 4043(c) of ERISA has been waived, with
respect to a Plan (other than a Plan maintained by an ERISA Affiliate that
is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code).
“
Required
Lenders
”
shall
mean, at any time, Lenders having (a) Loans (other than Swingline Loans)
outstanding, (b) Revolving L/C Exposures, (c) Swingline Exposures, and (d)
Available Unused Commitments, that taken together, represent more than 50%
of
the
sum
of (w) all Loans (other than Swingline Loans) outstanding, (x) Revolving
L/C
Exposures, (y) Swingline Exposures, and (z) the total Available Unused
Commitments at such time.
“
Required
Prepayment Date
”
shall
have the meaning assigned to such term in Section 2.11(f).
“
Required
Percentage
”
shall
mean, with respect to an Excess Cash Flow Period (or Excess Cash Flow Interim
Period), 50%;
provided
,
that
(a) if the Total Net First Lien Leverage Ratio at the end of the Applicable
Period (or Excess Cash Flow Interim Period) is greater than 1.50:1.00 but less
than or equal to 2.00:1.00, such percentage shall be 25%, and (b) if the
Total Net First Lien Leverage Ratio at the end of the Applicable Period (or
Excess Cash Flow Interim Period) is less than or equal to 1.50:1.00, such
percentage shall be 0%.
“
Responsible
Officer
”
of
any
person shall mean any executive officer or Financial Officer of such person
and
any other officer or similar official thereof responsible for the administration
of the obligations of such person in respect of this Agreement.
“
Retained
Excess Cash Flow Overfunding
”
shall
mean, at any time, in respect of any Excess Cash Flow Interim Period as to
which
the corresponding Excess Cash Flow Period has ended at such time, a portion
of
the cumulative Excess Cash Flow for such Excess Cash Flow Interim Period equal
to the amount, if any, by which the Retained Percentage of Excess Cash Flow
for
such Excess Cash Flow Interim Period exceeds the Retained Percentage of Excess
Cash Flow for such corresponding Excess Cash Flow Period.
“
Retained
Percentage
”
shall
mean, with respect to any Excess Cash Flow Period (or Excess Cash Flow Interim
Period), (a) 100% minus (b) the Required Percentage with respect to such Excess
Cash Flow Period (or Excess Cash Flow Interim Period).
“
Revaluation
Date
”
means,
with respect to any Alternate Currency Letter of Credit, each of the following:
(i) each date of issuance of an Alternate Currency Letter of Credit,
(ii) each date of an amendment of an Alternate Currency Letter of Credit
having the effect of increasing the amount thereof, (iii) each date of any
payment by the Issuing Bank under an Alternate Currency Letter of Credit, and
(iv) such additional dates as the Administrative Agent or the Issuing Bank
shall
determine or the Required Lenders shall require.
“
Revolving
Facility
”
shall
mean the Revolving Facility Commitments (including any Incremental Revolving
Facility Commitments) and the extensions of credit made hereunder by the
Revolving Facility Lenders.
“
Revolving
Facility Borrowing
”
shall
mean a Borrowing comprised of Revolving Facility Loans.
“
Revolving
Facility Commitment
”
shall
mean, with respect to each Revolving Facility Lender, the commitment of such
Revolving Facility Lender to make Revolving Facility Loans pursuant to
Section 2.01, expressed as an amount representing the maximum aggregate
permitted amount of such Revolving Facility Lender’s Revolving Facility Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08,
(b)
reduced or increased from time to time pursuant to assignments by or to such
Lender under Section 9.04, and (c) increased or provided under Section
2.21. The initial amount of each Lender’s Revolving Facility Commitment is set
forth on
Schedule
2.01
,
or in
the Assignment and Acceptance or Incremental Assumption Agreement pursuant
to
which such Lender shall have assumed its Revolving Facility Commitment (or
Incremental Revolving Facility Commitment), as applicable. The initial aggregate
amount of the Lenders’ Revolving Facility Commitments prior to any Incremental
Revolving Facility Commitments) is $200.0 million.
“
Revolving
Facility Credit Exposure
”
shall
mean, at any time, the sum of (a) the aggregate principal amount of the
Revolving Facility Loans outstanding at such time, (b) the Swingline Exposure
at
such time and (c) the Revolving L/C Exposure at such time. The Revolving
Facility Credit Exposure of any Revolving Facility Lender at any time shall
be
the product of (x) such Revolving Facility Lender’s Revolving Facility
Percentage and (y) the aggregate Revolving Facility Credit Exposure of all
Revolving Facility Lenders, collectively, at such time.
“
Revolving
Facility Lender
”
shall
mean a Lender (including an Incremental Revolving Facility Lender) with a
Revolving Facility Commitment or with outstanding Revolving Facility
Loans.
“
Revolving
Facility Loan
”
shall
mean a Loan made by a Revolving Facility Lender pursuant to
Section 2.01.
“
Revolving
Facility Maturity Date
”
shall
mean September 20, 2012.
“
Revolving
Facility Percentage
”
shall
mean, with respect to any Revolving Facility Lender, the percentage of the
total
Revolving Facility Commitments represented by such Lender’s Revolving Facility
Commitment. If the Revolving Facility Commitments have terminated or expired,
the Revolving Facility Percentages shall be determined based upon the Revolving
Facility Commitments most recently in effect, giving effect to any assignments
pursuant to Section 9.04.
“
Revolving
L/C Exposure
”
shall
mean at any time the sum of (a) the aggregate undrawn amount of all Letters
of
Credit outstanding at such time (calculated, in the case of Alternate Currency
Letters of Credit, based on the Dollar Equivalent thereof), (b) the sum of
the
maximum aggregate amount that is, or at any time thereafter may become, payable
by the Issuing Banks under all then outstanding Bankers’ Acceptances
(calculated, in the case of Alternate Currency Letters of Credit, based on
the
Dollar Equivalent thereof) and (c) the aggregate principal amount of all L/C
Disbursements that have not yet been reimbursed at such time (calculated, in
the
case of Alternate Currency Letters of Credit, based on the Dollar Equivalent
thereof). The Revolving L/C Exposure of any Revolving Facility Lender at any
time shall mean its Revolving Facility Percentage of the aggregate Revolving
L/C
Exposure at such time. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the
International Standby Practices (ISP98), such Letter of Credit shall be deemed
to be “outstanding” in the amount so remaining available to be drawn. Unless
otherwise specified herein, the amount of a Letter of Credit at any time shall
be deemed to be the
stated
amount of such Letter of Credit in effect at such time;
provided
,
that
with respect to any Letter of Credit that, by its terms or the terms of any
document related thereto, provides for one or more automatic increases in
the
stated amount thereof, the amount of such Letter of Credit shall be deemed
to be
the maximum stated amount of such Letter of Credit after giving effect to
all
such increases, whether or not such maximum stated amount is in effect at
such
time.
“
S&P
”
shall
mean Standard & Poor’s Ratings Group, Inc.
“
Sale
and Lease-Back Transaction
”
shall
have the meaning assigned to such term in Section 6.03.
“
SEC
”
shall
mean the Securities and Exchange Commission or any successor
thereto.
“
Second
Lien Fixed Rate Notes
”
shall
mean the Borrower’s 8⅞% Second Priority Senior Secured Notes due 2014, issued
pursuant to the Second Lien Notes Indenture and any notes issued by the Borrower
in exchange for, and as contemplated by, the Second Lien Fixed Rate Notes and
the related registration rights agreement with substantially identical terms
as
the Second Lien Fixed Rate Notes.
“
Second
Lien Floating Rate Notes
”
shall
mean the Borrower’s floating rate Second Priority Senior Secured Notes due 2014,
issued pursuant to the Second Lien Notes Indenture and any notes issued by
the
Borrower in exchange for, and as contemplated by, the Second Lien Floating
Rate
Notes and the related registration rights agreement with substantially identical
terms as the Second Lien Floating Rate Notes.
“
Second
Lien Note Documents
”
shall
mean the Second Lien Notes, the Second Lien Notes Indenture and the Second
Lien
Security Documents.
“
Second
Lien Notes
”
shall
mean the collective reference to the Second Lien Fixed Rate Notes and the Second
Lien Floating Rate Notes.
“
Second
Lien Notes Indenture
”
shall
mean the Indenture dated as of
September
20
,
2006
under which the Second Lien Fixed Rate Notes and Second Lien Floating Rate
Notes
were issued, among the Borrower and certain of the Subsidiaries party thereto
and the trustee named therein from time to time, as in effect on the Closing
Date and as amended, restated, supplemented or otherwise modified from time
to
time in accordance with the requirements thereof and of this
Agreement.
“
Second
Lien Notes Offering Memorandum
”
shall
mean the Offering Memorandum, dated September 15, 2006, in respect of the Second
Lien Notes.
“
Second
Lien Security Documents
”
shall
mean the “Security Documents” as defined in the Second Lien Notes
Indenture.
“
Secured
Parties
”
shall
mean the “Secured Parties” as defined in the Collateral Agreement.
“
Securities
Act
”
shall
mean the Securities Act of 1933, as amended.
“
Security
Documents
”
shall
mean the Mortgages, the Collateral Agreement, the Foreign Pledge Agreements
and
each of the security agreements and other instruments and documents executed
and
delivered pursuant to any of the foregoing or pursuant to
Section 5.10.
“
Senior
Subordinated Note Documents
”
shall
mean the Senior Subordinated Notes and the Senior Subordinated Notes
Indenture.
“
Senior
Subordinated Notes
”
shall
mean the Borrower’s 11% Senior Subordinated Notes due 2016, issued pursuant to
the Senior Subordinated Notes Indenture and any notes issued by the Borrower
in
exchange for, and as contemplated by, the Senior Subordinated Notes and the
related registration rights agreement with substantially identical terms as
the
Senior Subordinated Notes.
“
Senior
Subordinated Notes Indenture
”
shall
mean the Indenture dated as of September 20, 2006 under which the Senior
Subordinated Notes were issued, among the Borrower and certain of the
Subsidiaries party thereto and the trustee named therein from time to time,
as
in effect on the Closing Date and as amended, restated, supplemented or
otherwise modified from time to time in accordance with the requirements thereof
and of this Agreement.
“
Special
Purpose Receivables Subsidiary
”
shall
mean a direct or indirect Subsidiary of the Borrower established in connection
with a Permitted Receivables Financing for the acquisition of Receivables Assets
or interests therein, and which is organized in a manner intended to reduce
the
likelihood that it would be substantively consolidated with Holdings, the
Borrower or any of the Subsidiaries (other than Special Purpose Receivables
Subsidiaries) in the event Holdings, the Borrower or any such Subsidiary becomes
subject to a proceeding under the U.S. Bankruptcy Code (or other insolvency
law).
“
Spot
Rate
”
for
a
currency means the rate determined by the Administrative Agent or the Issuing
Bank, as applicable, to be the rate quoted by the person acting in such capacity
as the spot rate for the purchase by such person of such currency with another
currency through its principal foreign exchange trading office at approximately
11:00 a.m. on the date three Business Days prior to the date as of which the
foreign exchange computation is made or if such rate cannot be computed as
of
such date such other date as the Administrative Agent or the Issuing Bank shall
reasonably determine is appropriate under the circumstances;
provided
that the
Administrative Agent or the Issuing Bank may obtain such spot rate from another
financial institution designated by the Administrative Agent or the Issuing
Bank
if the person acting in such capacity does not have as of the date of
determination a spot buying rate for any such currency.
“
Standby
Letter of Credit
”
shall
have the meaning provided in Section 2.05(a).
“
Statutory
Reserves
”
shall
mean, with respect to any currency, any reserve, liquid asset or similar
requirements established by any Governmental Authority of the United States
of
America or of the jurisdiction of such currency or any jurisdiction in which
Loans in
such
currency are made to which banks in such jurisdiction are subject for any
category of deposits or liabilities customarily used to fund loans in such
currency or by reference to which interest rates applicable to Loans in such
currency are determined.
“
Subagent
”
shall
have the meaning assigned to such term in Section 8.02.
“
Subordinated
Intercompany Debt
”
shall
have the meaning assigned to such term in Section 6.01(e).
“
subsidiary
”
shall
mean, with respect to any person (herein referred to as the “parent”), any
corporation, partnership, association or other business entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or more than 50% of the general
partnership interests are, at the time any determination is being made, directly
or indirectly, owned, Controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of
the
parent.
“
Subsidiary
”
shall
mean, unless the context otherwise requires, a subsidiary of the Borrower.
Notwithstanding the foregoing (and except for purposes of Sections 3.09, 3.13,
3.15, 3.16, 5.03, 5.09 and 7.01(k), and the definition of Unrestricted
Subsidiary contained herein), an Unrestricted Subsidiary shall be deemed not
to
be a Subsidiary of the Borrower or any of its Subsidiaries for purposes of
this
Agreement.
“
Subsidiary
Loan Party
”
shall
mean (a) each Domestic Subsidiary of the Borrower on the Closing Date and (b)
each Domestic Subsidiary of the Borrower that becomes, or is required to become,
a party to the Collateral Agreement after the Closing Date.
“
Subsidiary
Redesignation
”
shall
have the meaning provided in the definition of “Unrestricted Subsidiary”
contained in this Section 1.01.
“
Swap
Agreement
”
shall
mean any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities (including, for the avoidance
of
doubt, resin), equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions;
provided
,
that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants
of
Holdings, the Borrower or any of the Subsidiaries shall be a Swap
Agreement.
“
Swingline
Borrowing
”
shall
mean a Borrowing comprised of Swingline Loans.
“
Swingline
Borrowing Request
”
shall
mean a request by a Borrower substantially in the form of
Exhibit C-2
.
“
Swingline
Commitment
”
shall
mean, with respect to each Swingline Lender, the commitment of such Swingline
Lender to make Swingline Loans pursuant to Section 2.04. The aggregate
amount of the Swingline Commitments on the Closing Date is $20.0
million.
“
Swingline
Exposure
”
shall
mean at any time the aggregate principal amount of all outstanding Swingline
Borrowings at such time. The Swingline Exposure of any Revolving Facility Lender
at any time shall mean its Revolving Facility Percentage of the aggregate
Swingline Exposure at such time.
“
Swingline
Lender
”
shall
mean Credit Suisse, Cayman Islands Branch in its capacity as a lender of
Swingline Loans.
“
Swingline
Loans
”
shall
mean the swingline loans made to the Borrower pursuant to
Section 2.04.
“
Syndication
Agent
”
shall
have the meaning assigned to such term in the introductory paragraph of this
Agreement.
“
Target
”
shall
have the meaning assigned to such term in the first recital hereto.
“
Taxes
”
shall
mean any and all present or future taxes, levies, imposts, duties (including
stamp duties), deductions, withholdings or similar charges (including
ad
valorem
charges)
imposed by any Governmental Authority and any and all interest and penalties
related thereto.
“
Term
B
Borrowing
”
shall
mean a Borrowing comprised of Term B Loans.
“
Term
B
Facility
”
shall
mean the Term B Loan Commitments and the Term B Loans made
hereunder.
“
Term
B
Facility Maturity Date
”
shall
mean September 20, 2013.
“
Term
B
Loan Commitment
”
shall
mean with respect to each Lender, the commitment of such Lender to make Term
B
Loans as set forth in Section 2.01(a) or Incremental Term Loans in the form
of Term B Loans as set forth in Section 2.01(c). The initial amount of each
Lender’s Term B Loan Commitment is set forth on
Schedule
2.01
,
or in
the Assignment and Acceptance or Incremental Assumption Agreement pursuant
to
which such Lender shall have assumed its Term B Loan Commitment (or its
Incremental Term Commitment), as applicable. The aggregate amount of the Term
B
Loan Commitments on the Closing Date is $675.0 million.
“
Term
B
Loan Installment Date
”
shall
have the meaning assigned to such term in Section 2.10(a)(i).
“
Term
B
Loans
”
shall
mean the term loans made by the Lenders to the Borrower pursuant to
Section 2.01(a) and any Incremental Term Loans in the form of Term B Loans
made by the Incremental Term Lenders to the Borrower pursuant to
Section 2.01(c).
“
Term
Borrowing
”
shall
mean any Term B Borrowing or any Incremental Term Borrowing.
“
Term
Facility
”
shall
mean the Term Facility and/or any or all of the Incremental Term
Facilities.
“
Term
Facility Maturity Date
”
shall
mean the latest of the Term B Facility Maturity Date and any Incremental Term
Facility Maturity Date.
“
Term
Loan Commitment
”
shall
mean any Term B Loan Commitment or any Incremental Term Commitment.
“
Term
Loan Installment Date
”
shall
mean any Term B Loan Installment Date or any Incremental Term Loan Installment
Date.
“
Term
Loans
”
shall
mean the Term B Loans and/or the Incremental Term Loans.
“
Test
Period
”
shall
mean, on any date of determination, the period of four consecutive fiscal
quarters of the Borrower then most recently ended (taken as one accounting
period).
“
Total
Net First Lien Leverage Ratio
”
means,
on any date, the ratio of (a) First Lien Debt as of such date to (b) EBITDA
for
the period of four consecutive fiscal quarters of the Borrower most recently
ended as of such date, all determined on a consolidated basis in accordance
with
GAAP;
provided
,
that
EBITDA shall be determined for the relevant Test Period on a Pro Forma
Basis.
“
Trade
Letter of Credit
”
shall
have the meaning provided in Section 2.05(a).
“
Transaction
Documents
”
shall
mean the Acquisition Documents, the Second Lien Note Documents, the Senior
Subordinated Note Documents and the Loan Documents.
“
Transaction
Expenses
”
means
any fees or expenses incurred or paid by the Funds, Holdings, the Borrower
(or
any direct or indirect parent of the Borrower) or any of its Subsidiaries in
connection with the Transactions, this Agreement and the other Loan Documents
(including expenses in connection with Swap Agreements) and the transactions
contemplated hereby and thereby.
“
Transactions
”
shall
mean, collectively, the transactions to occur pursuant to the Transaction
Documents, including (a) the consummation of the Acquisition; (b) the execution
and delivery of the Loan Documents, the creation of the Liens pursuant to the
Security Documents, and the initial borrowings hereunder; (c) the Equity
Financing; (d) the sale and issuance of the Second Lien Notes and the Senior
Subordinated Notes and the creation of the Liens pursuant to the Second Lien
Security Documents; (e) the refinancing (or discharge) of the Refinanced
Indebtedness; and (f) the payment of all fees and expenses to be paid on or
prior to the Closing Date and owing in connection with the
foregoing.
“
Type
”
shall
mean, when used in respect of any Loan or Borrowing, the Rate by reference
to
which interest on such Loan or on the Loans comprising such Borrowing is
determined. For purposes hereof, the term “
Rate
”
shall
include the Adjusted LIBO Rate and the ABR.
“
Unfunded
Pension Liability
”
means
the excess of a Plan’s benefit liabilities under Section 4001(a)(16) of ERISA,
over the
current
value of that Plan’s assets, determined in accordance with the assumptions used
for funding the Plan pursuant to Section 412 of the Code for the applicable
plan
year.
“
Uniform
Commercial Code
”
means
the Uniform Commercial Code as the same may from time to time be in effect
in
the State of New York or the Uniform Commercial Code (or similar code or
statute) of another jurisdiction, to the extent it may be required to apply
to
any item or items of Collateral.
“
Unrestricted
Cash
”
shall
mean domestic cash or cash equivalents of the Borrower or any of its
Subsidiaries that would not appear as “restricted” on a consolidated balance
sheet of the Borrower or any of its Subsidiaries.
“
Unrestricted
Subsidiary
”
shall
mean (i) any subsidiary of the Borrower identified on Schedule 1.01(f) and
(ii)
any subsidiary of the Borrower that is acquired or created after the Closing
Date and designated by the Borrower as an Unrestricted Subsidiary hereunder
by
written notice to the Administrative Agent;
provided
,
that
the Borrower shall only be permitted to so designate a new Unrestricted
Subsidiary after the Closing Date and so long as (a) no Default or Event of
Default has occurred and is continuing or would result therefrom, (b)
immediately after giving effect to such designation (as well as all other such
designations theretofore consummated after the first day of such Reference
Period), the Borrower shall be in Pro Forma Compliance
,
(c)
such
Unrestricted Subsidiary shall be capitalized (to the extent capitalized by
the
Borrower or any of its Subsidiaries) through Investments as permitted by, and
in
compliance with, Section 6.04(j), and any prior or concurrent Investments
in such Subsidiary by the Borrower or any of its Subsidiaries shall be deemed
to
have been made under Section 6.04(j), (d) without duplication of clause
(c), any assets owned by such Unrestricted Subsidiary at the time of the initial
designation thereof shall be treated as Investments pursuant to
Section 6.04(j),
and (e)
such Subsidiary shall have been designated an “unrestricted subsidiary” (or
otherwise not be subject to the covenants and defaults) under the Second Lien
Notes Indenture, the Senior Subordinated Notes Indenture, any other Indebtedness
permitted to be incurred herein and all Permitted Refinancing Indebtedness
in
respect of any of the foregoing and all Disqualified Stock
;
provided
,
further
,
that at
the time of the initial Investment by the Borrower or any of its Subsidiaries
in
such Subsidiary, the Borrower shall designate such entity as an Unrestricted
Subsidiary in a written notice to the Administrative Agent. The Borrower may
designate any Unrestricted Subsidiary to be a Subsidiary for purposes of this
Agreement (each, a “
Subsidiary
Redesignation
”);
provided
,
that
(i) such Unrestricted Subsidiary, both before and after giving effect to such
designation, shall be a Wholly Owned Subsidiary of the Borrower, (ii) no Default
or Event of Default has occurred and is continuing or would result therefrom,
(iii) immediately after giving effect to such Subsidiary Redesignation (as
well
as all other Subsidiary Redesignations theretofore consummated after the first
day of such Reference Period), the Borrower shall be in Pro Forma Compliance,
(iii) all representations and warranties contained herein and in the other
Loan
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as
of
the date of such Subsidiary Redesignation (both before and after giving effect
thereto), unless stated to relate to a specific earlier date, in which case
such
representations and warranties shall be true and correct in all material
respects as of such earlier date, and (iv) the Borrower shall have delivered
to
the Administrative Agent an officer’s certificate executed by a Responsible
Officer of the Borrower, certifying to the best of such officer’s knowledge,
compliance with the requirements of
preceding
clauses (i) through (iii), inclusive, and containing the calculations and
information required by the preceding clause (ii).
“
U.S.
Bankruptcy Code
”
shall
mean Title 11 of the United States Code, as amended, or any similar federal
or
state law for the relief of debtors.
“
Waivable
Mandatory Prepayment
”
shall
have the meaning assigned to such term in Section 2.11(f).
“
Wholly
Owned Subsidiary
”
of
any
person shall mean a subsidiary of such person, all of the Equity Interests
of
which (other than directors’ qualifying shares or nominee or other similar
shares required pursuant to applicable law) are owned by such person or another
Wholly Owned Subsidiary of such person.
“
Withdrawal
Liability
”
shall
mean liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part
I of
Subtitle E of Title IV of ERISA.
“
Working
Capital
”
shall
mean, with respect to the Borrower and the Subsidiaries on a consolidated basis
at any date of determination, Current Assets at such date of determination
minus
Current
Liabilities at such date of determination;
provided
,
that,
for purposes of calculating Excess Cash Flow, increases or decreases in Working
Capital shall be calculated without regard to any changes in Current Assets
or
Current Liabilities as a result of (a) any reclassification in accordance with
GAAP of assets or liabilities, as applicable, between current and noncurrent
or
(b) the effects of purchase accounting.
SECTION
1.02.
Terms
Generally
.
The
definitions set forth or referred to in Section 1.01 shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine
and
neuter forms. The words “include,” “includes” and “including” shall be deemed to
be followed by the phrase “without limitation.” All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, any reference in this Agreement to any Loan Document shall mean such
document as amended, restated, supplemented or otherwise modified from time
to
time in accordance with the requirements hereof and thereof. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time;
provided
,
that,
if the Borrower notifies the Administrative Agent that the Borrower requests
an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Closing Date in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have
been
withdrawn or such provision amended in accordance herewith.
SECTION
1.03.
Effectuation
of
Transactions
.
Each of
the representations and warranties of Holdings and the Borrower contained in
this Agreement (and all corresponding definitions) are made after giving effect
to the Transactions, unless the context otherwise requires.
SECTION
1.04.
Exchange
Rates; Currency Equivalents.
i)
The
Administrative Agent shall determine the Spot Rate as of each Revaluation Date
to be used for calculating Dollar Equivalent amounts of Alternate Currency
Letters of Credit. Such Spot Rate shall become effective as of such Revaluation
Date and shall be the Spot Rate employed in converting any amounts between
the
Dollars and each Alternate Currency until the next Revaluation Date to occur.
Except for purposes of financial statements delivered by Loan Parties hereunder
or calculating financial covenants hereunder or except as otherwise provided
herein, the applicable amount of any currency (other than Dollars) for purposes
of the Loan Documents shall be such Dollar Equivalent amount as so determined
by
the Administrative Agent. No Default or Event of Default shall arise as a result
of any limitation or threshold set forth in U.S. Dollars in Article VI or
paragraph (f) or (j) of Section 7.01 being exceeded solely as a result of
changes in currency exchange rates from those rates applicable on the first
day
of the fiscal quarter in which such determination occurs or in respect of which
such determination is being made.
(b)
Wherever
in this Agreement in connection with an Alternate Currency Letter of Credit,
an
amount, such as a required minimum or multiple amount, is expressed in Dollars,
such amount shall be the Dollar Equivalent of such Dollar amount (rounded to
the
nearest unit of such Alternate Currency, with 0.5 of a unit being rounded
upward), as determined by the Administrative Agent.
ARTICLE
II
The
Credits
SECTION
2.01.
Commitments
.
Subject
to the terms and conditions set forth herein:
(a)
each
Lender having a Term B Loan Commitment agrees to make Term B Loans to the
Borrower on the Closing Date in a principal amount not to exceed its Term B
Loan
Commitment;
(b)
each
Revolving Facility Lender agrees to make Revolving Facility Loans to the
Borrower from time to time during the Availability Period in an aggregate
principal amount that will not result in (i) such Lender’s Revolving Facility
Credit Exposure exceeding such Lender’s Revolving Facility Commitment or (ii)
the Revolving Facility Credit Exposure exceeding the total Revolving Facility
Commitments;
provided
,
that
the aggregate principal amount of Revolving Facility Loans made on the Closing
Date shall not exceed $30.0 million. Within the foregoing limits and subject
to
the terms and conditions set forth herein, the Borrower may borrow, prepay
and
reborrow Revolving Facility Loans; and
(c)
each
Lender having an Incremental Term Loan Commitment agrees, subject to the terms
and conditions set forth in the applicable Incremental Assumption Agreement,
to
make Incremental Term Loans to the Borrower, in an aggregate principal amount
not to exceed its Incremental Term Loan Commitment.
(d)
Amounts
borrowed under Section 2.01(a) or 2.01(c) and repaid or prepaid may not be
reborrowed.
SECTION
2.02.
Loans
and Borrowings
.
ii)
Each
Loan shall be made as part of a Borrowing consisting of Loans under the same
Facility and of the same Type made by the Lenders ratably in accordance with
their respective Commitments under the applicable Facility (or, in the case
of
Swingline Loans, in accordance with their respective Swingline Commitments);
provided
,
however
,
that
Revolving Facility Loans shall be made by the Revolving Facility Lenders ratably
in accordance with their respective Revolving Facility Percentages on the date
such Loans are made hereunder. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder;
provided
,
that
the Commitments of the Lenders are several and no Lender shall be responsible
for any other Lender’s failure to make Loans as required.
(b)
Subject
to Section 2.14, each Borrowing (other than a Swingline Borrowing) shall be
comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may
request in accordance herewith. Each Swingline Borrowing shall be an ABR
Borrowing. Each Lender at its option may make any ABR Loan or Eurocurrency
Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan;
provided
,
that
any exercise of such option shall not affect the obligation of the Borrower
to
repay such Loan in accordance with the terms of this Agreement and such Lender
shall not be entitled to any amounts payable under Section 2.15 or 2.17
solely in respect of increased costs resulting from such exercise and existing
at the time of such exercise.
(c)
At
the
commencement of each Interest Period for any Eurocurrency Revolving Facility
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of the Borrowing Multiple and not less than the Borrowing Minimum.
At
the time that each ABR Revolving Facility Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of the Borrowing
Multiple and not less than the Borrowing Minimum;
provided
,
that an
ABR Revolving Facility Borrowing may be in an aggregate amount that is equal
to
the entire unused balance of the Revolving Facility Commitments or that is
required to finance the reimbursement of an L/C Disbursement as contemplated
by
Section 2.05(e). Each Swingline Borrowing shall be in an amount that is an
integral multiple of the Borrowing Multiple and not less than the Borrowing
Minimum. Borrowings of more than one Type and under more than one Facility
may
be outstanding at the same time;
provided
,
that
there shall not at any time be more than a total of (i) 5 Eurocurrency
Borrowings outstanding under the Term Facility and (ii) 10 Eurocurrency
Borrowings outstanding under the Revolving Facility.
(d)
Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to
convert
or continue, any Borrowing if the Interest Period requested with respect
thereto
would end after the Revolving Facility Maturity Date or the applicable Term
Facility Maturity Date, as applicable.
SECTION
2.03.
Requests
for Borrowings
.
To
request a Revolving Facility Borrowing and/or a Term Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurocurrency Borrowing, not later than 12:00 p.m., Local Time, three
Business Days before the date of the proposed Borrowing or (b) in the case
of an
ABR Borrowing, not later than 12:00 noon, Local Time, one Business Day before
the date of the proposed Borrowing;
provided
,
that
any such notice of an ABR Revolving Facility Borrowing to finance the
reimbursement of an L/C Disbursement as contemplated by Section 2.05(e) may
be given not later than 10:00 a.m., Local Time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and
shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with
Section 2.02:
(i)
Whether
such Borrowing is to be a Borrowing of Revolving Facility Loans, Other Revolving
Loans, Term B Loans or Other Term Loans;
(ii)
the
aggregate amount of the requested Borrowing;
(iii)
the
date
of such Borrowing, which shall be a Business Day;
(iv)
whether
such Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing;
(v)
in
the
case of a Eurocurrency Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and
(vi)
the
location and number of the Borrower’s account to which funds are to be
disbursed.
If
no
election as to the Type of Revolving Facility Borrowing is specified, then
the
requested Revolving Facility Borrowing shall be an ABR Borrowing. If no Interest
Period is specified with respect to any requested Eurocurrency Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
SECTION
2.04.
Swingline
Loans
.
iii)
Subject
to the terms and conditions set forth herein, the Swingline Lender agrees to
make Swingline Loans to the Borrower from time to time during the Availability
Period, in an aggregate principal amount at any time outstanding that will
not
result in (i) the aggregate principal amount of outstanding Swingline Loans
exceeding the Swingline Commitment or (ii) the Revolving Facility Credit
Exposure exceeding the total Revolving Facility Commitments;
provided
,
that
the Swingline Lender shall not
be
required to make a Swingline Loan to refinance an outstanding Swingline
Borrowing. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Swingline
Loans.
(b)
To
request a Swingline Borrowing, the Borrower shall notify the Administrative
Agent and the Swingline Lender of such request by telephone (confirmed by a
Swingline Borrowing Request by telecopy), not later than 1:00 p.m., Local Time,
on the day of a proposed Swingline Borrowing. Each such notice and Swingline
Borrowing Request shall be irrevocable and shall specify (i) the requested
date
(which shall be a Business Day) and (ii) the amount of the requested Swingline
Borrowing. The Swingline Lender shall consult with the Administrative Agent
as
to whether the making of the Swingline Loan is in accordance with the terms
of
this Agreement prior to the Swingline Lender funding such Swingline Loan. The
Swingline Lender shall make each Swingline Loan in accordance with
Section 2.02(a) on the proposed date thereof by wire transfer of
immediately available funds by 3:00 p.m., Local Time, to the account of the
Borrower (or, in the case of a Swingline Borrowing made to finance the
reimbursement of an L/C Disbursement as provided in Section 2.05(e), by
remittance to the applicable Issuing Bank).
(c)
The
Swingline Lender may by written notice given to the Administrative Agent not
later than 10:00 a.m., Local Time, on any Business Day require the Revolving
Facility Lenders to acquire participations on such Business Day in all or a
portion of the outstanding Swingline Loans made by it. Such notice shall specify
the aggregate amount of such Swingline Loans in which the Revolving Facility
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each such Revolving Facility
Lender, specifying in such notice such Revolving Facility Lender’s Revolving
Facility Percentage of such Swingline Loan or Loans. Each Revolving Facility
Lender hereby absolutely and unconditionally agrees, promptly upon receipt
of
notice as provided above, to pay to the Administrative Agent for the account
of
the Swingline Lender, such Revolving Facility Lender’s Revolving Facility
Percentage of such Swingline Loan or Loans. Each Revolving Facility Lender
acknowledges and agrees that its respective obligation to acquire participations
in Swingline Loans pursuant to this paragraph is absolute and unconditional
and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments,
and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Revolving Facility Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 2.06 with respect to Loans made
by such Revolving Facility Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by
it
from the Revolving Facility Lenders. The Administrative Agent shall notify
the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph (c), and thereafter payments in respect of such Swingline Loan
shall be made to the Administrative Agent and not to the Swingline Lender.
Any
amounts received by the Swingline Lender from the Borrower (or other party
on
behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall
be
promptly remitted to the Administrative Agent; any such amounts received by
the
Administrative Agent shall be promptly remitted by the Administrative Agent
to
the Revolving Facility Lenders that shall have made their payments pursuant
to
this paragraph and to the Swingline Lender, as their interests
may
appear;
provided
,
that
any such payment so remitted shall be repaid to the Swingline Lender or to
the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.
SECTION
2.05.
Letters
of Credit
.
iv)
General
.
Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of (x) trade letters of credit and bank guarantees in support of trade
obligations of the Borrower and its Subsidiaries incurred in the ordinary course
of business (such letters of credit and bank guarantees issued for such
purposes, “
Trade
Letters of Credit
”)
and
(y) standby letters of credit and bank guarantees issued for any other lawful
purposes of the Borrower and its Subsidiaries (such letters of credit and bank
guarantees issued for such purposes, “
Standby
Letters of Credit
”)
for
its own account in a form reasonably acceptable to the applicable Issuing Bank,
at any time and from time to time during the Availability Period and prior
to
the date that is five Business Days prior to the Revolving Facility Maturity
Date. In the event of any inconsistency between the terms and conditions of
this
Agreement and the terms and conditions of any form of letter of credit or bank
guarantee application or other agreement (including any Acceptance Documents)
submitted by the Borrower to, or entered into by the Borrower with, an Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
Unless
otherwise expressly agreed by the Issuing Bank and the Borrower, when a Letter
of Credit is issued (including any such agreement applicable to an Existing
Letter of Credit), (i) the rules of the International Standby Practices shall
apply to each Standby Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by
the
International Chamber of Commerce at the time of issuance, shall apply to each
commercial Letter of Credit.
“Letters
of Credit” shall include Trade Letters of Credit and Standby Letters of
Credit.
(b)
Notice
of Issuance, Amendment, Renewal, Extension: Certain Conditions
.
To
request the issuance of a Letter of Credit (or the amendment, renewal (other
than an automatic extension in accordance with paragraph (c) of this Section)
or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the applicable Issuing Bank) to the applicable Issuing
Bank and the Administrative Agent (three Business Days in advance of the
requested date of issuance, amendment or extension or such shorter period as
the
Administrative Agent and the Issuing Bank in their sole discretion may agree)
a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended or extended, and specifying the date of issuance,
amendment or extension (which shall be a Business Day), the date on which such
Letter of Credit (and, in the case of an Acceptance Credit, all Bankers’
Acceptances created thereunder is) to expire (which shall comply with
paragraph (c) of this Section), the amount and currency (which may be
Dollars or an Alternate Currency) of such Letter of Credit, the name and address
of the beneficiary thereof, whether such letter of credit or bank guarantee
constitutes a Standby Letter of Credit or a Trade Letter of Credit, and such
other information as shall be necessary to issue, amend or extend such Letter
of
Credit (including whether such Letter of Credit is an Acceptance Credit). If
requested by the applicable Issuing Bank, the Borrower also shall submit a
letter of credit or bank guarantee application on such Issuing Bank’s standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended or extended only if (and upon issuance, amendment
or
extension of each Letter of Credit the Borrower shall be deemed to
represent
and warrant that), after giving effect to such issuance, amendment or extension
(i) the Revolving L/C Exposure shall not exceed the Letter of Credit Sublimit,
(ii) the Revolving Facility Credit Exposure shall not exceed the total Revolving
Facility Commitments, (iii) all conditions precedent in Section 4.01 have
been
satisfied (or waived by the Revolving Facility Lenders with Revolving Facility
Credit Exposure representing greater than 50% of the total Revolving Facility
Credit Exposure) and (iv) in the case of any Acceptance Credit, the creation
of
any related Bankers’ Acceptances would not cause the applicable Issuing Bank to
exceed the maximum amount of outstanding bankers’ acceptances permitted by
applicable law).
(c)
Expiration
Date
.
Each
Standby Letter of Credit shall expire (and in the case of an Acceptance Credit,
shall provide that all Bankers’ Acceptances created thereunder (which shall in
no event have a maturity of less than 30 or more than 120 days after creation
thereof) shall expire) at or prior to the close of business on the earlier
of
(i) the date one year (unless otherwise agreed upon by the Administrative Agent
and the Issuing Bank in their sole discretion) after the date of the issuance
of
such Standby Letter of Credit (or, in the case of any extension thereof, one
year (unless otherwise agreed upon by the Administrative Agent and the Issuing
Bank in their sole discretion) after such renewal or extension) and (ii) the
date that is five Business Days prior to the Revolving Facility Maturity Date;
provided
,
that
any Standby Letter of Credit with one year tenor may provide for automatic
extension thereof for additional one year periods (which, in no event, shall
extend beyond the date referred to in clause (ii) of this paragraph (c)) so
long
as such Standby Letter of Credit permits the Issuing Bank to prevent any such
extension at least once in each twelve-month period (commencing with the date
of
issuance of such Standby Letter of Credit) by giving prior notice to the
beneficiary thereof not later than five days in each such twelve-month period
to
be agreed upon at the time such Standby Letter of Credit is issued;
provided
,
further
,
that if
the Issuing Bank and the Administrative Agent each consent in their sole
discretion, the expiration date on any Standby Letter of Credit (or, in the
case
of an Acceptance Credit, any Bankers’ Acceptances thereunder) may extend beyond
the date referred to in clause (ii) above,
provided
,
that if
any such Standby Letter of Credit is outstanding or the expiration date is
extended to a date after the date that is 30 days prior to the Revolving
Facility Maturity Date the Borrower shall, upon the later to occur of (x) the
date such Standby Letter of Credit is issued or (y) the date the expiration
date
of such Standby Letter of Credit is so extended, provide cash collateral
pursuant to documentation reasonably satisfactory to the Administrative Agent
and the relevant Issuing Bank in an amount equal to 105% of the face amount
of
each such Standby Letter of Credit on or prior to the date that is 30 days
prior
to the Revolving Facility Maturity Date or, if later, such date of issuance.
Each Trade Letter of Credit shall expire not later than (x) 180 days after
such
Trade Letter of Credit’s date of issuance, or (y) the date five Business Days
prior to the Revolving Facility Maturity Date.
(d)
Participations
.
By the
issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing
the amount thereof) (or the creation of a Bankers’ Acceptance in respect of an
Acceptance Credit,) and without any further action on the part of the applicable
Issuing Bank or the Revolving Facility Lenders, such Issuing Bank hereby grants
to each Revolving Facility Lender, and each Revolving Facility Lender hereby
acquires from such Issuing Bank, a participation in such Letter of Credit or
Bankers’ Acceptance equal to such Revolving Facility Lender’s Revolving Facility
Percentage of the aggregate amount available to be drawn under such Letter
of
Credit (or the aggregate amount of such Bankers’ Acceptance) (calculated, in the
case of Alternate Currency Letters of Credit, based on the Dollar
Equivalent
thereof). In consideration and in furtherance of the foregoing, each Revolving
Facility Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the applicable Issuing Bank, in
Dollars, such Revolving Facility Lender’s Revolving Facility Percentage of each
L/C Disbursement made by such Issuing Bank and not reimbursed by the Borrower
on
the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason
(calculated, in the case of any Alternate Currency Letter of Credit, based
on
the Dollar Equivalent thereof). Each Revolving Facility Lender acknowledges
and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not
be
affected by any circumstance whatsoever, including any amendment, renewal
or
extension of any Letter of Credit or the occurrence and continuance of a
Default
or reduction or termination of the Commitments, and that each such payment
shall
be made without any offset, abatement, withholding or reduction
whatsoever.
(e)
Reimbursement
.
If the
applicable Issuing Bank shall make any L/C Disbursement in respect of a Letter
of Credit (or Bankers’ Acceptance), the Borrower shall reimburse such L/C
Disbursement by paying to the Administrative Agent an amount in Dollars equal
to
such L/C Disbursement (or, in the case of a Alternate Currency Letter of Credit,
the Dollar Equivalent thereof) not later than 2:00 p.m., Local Time, on the
next
Business Day after the Borrower receives notice under paragraph (g) of this
Section of such L/C Disbursement, together with accrued interest thereon
from the date of such L/C Disbursement at the rate applicable to ABR Loans;
provided
,
that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 or 2.04 that such payment be
financed with an ABR Revolving Facility Borrowing or a Swingline Borrowing,
as
applicable, in an equivalent amount and, to the extent so financed, the
Borrower’s obligation to make such payment shall be discharged and replaced by
the resulting ABR Revolving Facility Borrowing or Swingline Borrowing. If the
Borrower fails to reimburse any L/C Disbursement when due, then the
Administrative Agent shall promptly notify the applicable Issuing Bank and
each
other Revolving Facility Lender of the applicable L/C Disbursement, the payment
then due from the Borrower in respect thereof and, in the case of a Revolving
Facility Lender, such Lender’s Revolving Facility Percentage thereof. Promptly
following receipt of such notice, each Revolving Facility Lender shall pay
to
the Administrative Agent in Dollars its Revolving Facility Percentage of the
payment then due from the Borrower in the same manner as provided in
Section 2.06 with respect to Loans made by such Lender (and
Section 2.06 shall apply,
mutatis
mutandis
,
to the
payment obligations of the Revolving Facility Lenders), and the Administrative
Agent shall promptly pay to the applicable Issuing Bank the amounts so received
by it from the Revolving Facility Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
applicable Issuing Bank or, to the extent that Revolving Facility Lenders have
made payments pursuant to this paragraph to reimburse such Issuing Bank, then
to
such Lenders and such Issuing Bank as their interests may appear. Any payment
made by a Revolving Facility Lender pursuant to this paragraph to reimburse
an
Issuing Bank for any L/C Disbursement (other than the funding of an ABR
Revolving Loan or a Swingline Borrowing as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such L/C Disbursement.
(f)
Obligations
Absolute
.
The
obligation of the Borrower to reimburse L/C Disbursements as provided in
paragraph (e) of this Section shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective
of
(i) any lack of validity or enforceability of any Letter of Credit, (any
Bankers’ Acceptance or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit or Bankers’
Acceptance proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment
by
the applicable Issuing Bank under a Letter of Credit or Bankers’ Acceptance
against presentation of a draft or other document that does not comply with
the
terms of such Letter of Credit or Bankers’ Acceptance or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither the Administrative Agent, the Lenders nor any Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility
by
reason of or in connection with the issuance or transfer of any Letter of Credit
or Bankers’ Acceptance or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to
any
Letter of Credit or Bankers’ Acceptance (including any document required to make
a drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of such Issuing Bank, or
any
of the circumstances referred to in clauses (i), (ii) or (iii) of the first
sentence;
provided
,
that
the foregoing shall not be construed to excuse the applicable Issuing Bank
from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are determined by a final and binding decision of a court of competent
jurisdiction to have been caused by such Issuing Bank’s failure to exercise care
when determining whether drafts and other documents presented under a Letter
of
Credit or Bankers’ Acceptance) comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the applicable Issuing Bank, such Issuing Bank shall be deemed
to
have exercised care in each such determination. In furtherance of the foregoing
and without limiting the generality thereof, the parties agree that, with
respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit (or Bankers’ Acceptance,) the
applicable Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary or refuse to accept
and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.
(g)
Disbursement
Procedures
.
The
applicable Issuing Bank shall, promptly following its receipt thereof, examine
all documents purporting to represent a demand for payment (or creation of
a
Bankers’ Acceptance under a Letter of Credit or any presentation for payment of
a Bankers’ Acceptance. Such Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy)
of
any such demand for payment or Bankers’ Acceptance) and whether such Issuing
Bank has made or will make a L/C Disbursement thereunder;
provided
,
that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation
to
reimburse such Issuing Bank and the Revolving Facility Lenders with respect
to
any such L/C Disbursement.
(h)
Interim
Interest
.
If an
Issuing Bank shall make any L/C Disbursement, then, unless the Borrower shall
reimburse such L/C Disbursement in full on the date such L/C Disbursement is
made, the unpaid amount thereof shall bear interest, for each day from and
including the date such L/C Disbursement is made to but excluding the date
that
the Borrower reimburses such L/C Disbursement, at the rate per annum then
applicable to ABR Revolving Loans;
provided
,
that,
if such L/C Disbursement is not reimbursed by the Borrower when due pursuant
to
paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
applicable Issuing Bank, except that interest accrued on and after the date
of
payment by any Revolving Facility Lender pursuant to paragraph (e) of this
Section to reimburse such Issuing Bank shall be for the account of such
Revolving Facility Lender to the extent of such payment.
(i)
Replacement
of an Issuing Bank
.
An
Issuing Bank may be replaced at any time by written agreement among the
Borrower, the Administrative Agent, the replaced Issuing Bank and the successor
Issuing Bank. The Administrative Agent shall notify the Lenders of any such
replacement of an Issuing Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of
the
replaced Issuing Bank pursuant to Section 2.12. From and after the
effective date of any such replacement, (i) the successor Issuing Bank shall
have all the rights and obligations of the replaced Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term “Issuing Bank” shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require. After the replacement of an Issuing
Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of such Issuing Bank under
this
Agreement with respect to Letters of Credit or Bankers’ Acceptances issued by it
prior to such replacement but shall not be required to issue additional Letters
of Credit.
(j)
Cash
Collateralization
.
If any
Event of Default shall occur and be continuing, (i) in the case of an Event
of
Default described in Section 7.01(h) or (i), on the Business Day or (ii) in
the case of any other Event of Default, on the third Business Day, in each
case,
following the date on which the Borrower receives notice from the Administrative
Agent (or, if the maturity of the Loans has been accelerated, Revolving Facility
Lenders with Revolving L/C Exposure representing greater than 50% of the total
Revolving L/C Exposure) demanding the deposit of cash collateral pursuant to
this paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to the Revolving L/C Exposure as of such date
plus any accrued and unpaid interest thereon;
provided
,
that
upon the occurrence of any Event of Default with respect to the Borrower
described in clause (h) or (i) of Section 7.01, the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind. Each such deposit pursuant to this paragraph shall be held by
the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent
shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and
sole
discretion
of (i) for so long as an Event of Default shall be continuing, the
Administrative Agent and (ii) at any other time, the Borrower, in each case,
in
Permitted Investments and at the risk and expense of the Borrower, such deposits
shall not bear interest. Interest or profits, if any, on such investments
shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse each Issuing Bank for L/C Disbursements
for
which such Issuing Bank has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations
of
the Borrower for the Revolving L/C Exposure at such time or, if the maturity
of
the Loans has been accelerated (but subject to the consent of Revolving Facility
Lenders with Revolving L/C Exposure representing greater than 50% of the
total
Revolving L/C Exposure), be applied to satisfy other obligations of the Borrower
under this Agreement. If the Borrower is required to provide an amount of
cash
collateral hereunder as a result of the occurrence of an Event of Default,
such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been
cured
or waived.
(k)
Additional
Issuing Banks
.
From
time to time, the Borrower may by notice to the Administrative Agent designate
any Revolving Facility Lender (in addition to Credit Suisse) each of which
agrees (in its sole discretion) to act in such capacity and is reasonably
satisfactory to the Administrative Agent as an Issuing Bank. Each such
additional Issuing Bank shall execute a counterpart of this Agreement upon
the
approval of the Administrative Agent (which approval shall not be unreasonably
withheld) and shall thereafter be an Issuing Bank hereunder for all
purposes.
(l)
Reporting
.
Unless
otherwise requested by the Administrative Agent, each Issuing Bank shall (i)
provide to the Administrative Agent copies of any notice received from the
Borrower pursuant to Section 2.05(b) no later than the next Business Day
after receipt thereof and (ii) report in writing to the Administrative Agent
(A)
on or prior to each Business Day on which such Issuing Bank expects to issue,
amend or extend any Letter of Credit, the date of such issuance, amendment
or
extension, and the aggregate face amount of the Letters of Credit to be issued,
amended or extended by it and outstanding after giving effect to such issuance,
amendment or extension occurred (and whether the amount thereof changed), and
the Issuing Bank shall be permitted to issue, amend or extend such Letter of
Credit if the Administrative Agent shall not have advised the Issuing Bank
that
such issuance, amendment or extension would not be in conformity with the
requirements of this Agreement, (B) on each Business Day on which such Issuing
Bank makes any L/C Disbursement (or creates any Bankers’ Acceptance), the date
of such L/C Disbursement (or Bankers’ Acceptance) and the amount of such L/C
Disbursement (or Bankers’ Acceptance) and (C) on any other Business Day, such
other information as the Administrative Agent shall reasonably request,
including but not limited to prompt verification of such information as may
be
requested by the Administrative Agent.
SECTION
2.06.
Funding
of Borrowings
.
v)
Each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds by 12:00 noon, Local
Time, to the account of the Administrative Agent most recently designated by
it
for such purpose by notice to the Lenders;
provided
,
that
Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like
funds,
to
an account of the Borrower as specified in the Borrowing Request;
provided
,
that
ABR Revolving Loans and Swingline Borrowings made to finance the reimbursement
of a L/C Disbursement and reimbursements as provided in Section 2.05(e)
shall be remitted by the Administrative Agent to the applicable Issuing
Bank.
(b)
Unless
the Administrative Agent shall have received notice from a Lender prior to
the
proposed date of any Borrowing that such Lender will not make available to
the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date
in
accordance with paragraph (a) of this Section and may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. In
such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
(without duplication) such corresponding amount with interest thereon, for
each
day from and including the date such amount is made available to the Borrower
to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of (A) the Federal Funds Effective Rate and
(B)
a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans at such time. If such Lender pays
such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.
SECTION
2.07.
Interest
Elections
.
vi)
Each
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurocurrency Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each
such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b)
To
make
an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made
on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery
or
telecopy to the Administrative Agent of a written Interest Election Request
in a
form approved by the Administrative Agent and signed by the
Borrower.
(c)
Each
telephonic and written Interest Election Request shall be irrevocable and shall
specify the following information in compliance with
Section 2.02:
(i)
the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case
the
information to be
specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii)
the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;
(iii)
whether
the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;
and
(iv)
if
the
resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by clause (a) of the definition of the term “Interest
Period.”
If
any
such Interest Election Request requests a Eurocurrency Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration.
(d)
Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender to which such Interest Election Request relates of
the
details thereof and of such Lender’s portion of each resulting
Borrowing.
(e)
If
the
Borrower fails to deliver a timely Interest Election Request with respect to
a
Eurocurrency Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end
of
such Interest Period such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the written request
(including a request through electronic means) of the Required Lenders, so
notifies the Borrower, then, so long as an Event of Default is continuing (i)
no
outstanding Borrowing may be converted to or continued as a Eurocurrency
Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable
thereto.
SECTION
2.08.
Termination
and Reduction of Commitments
.
vii)
Unless
previously terminated, the Revolving Facility Commitments shall terminate on
the
Revolving Facility Maturity Date.
(b)
The
Borrower may at any time terminate, or from time to time reduce, the Revolving
Facility Commitments;
provided
,
that
(i) each reduction of the Revolving Facility Commitments shall be in an amount
that is an integral multiple of $1.0 million and not less than $5.0 million
(or,
if less, the remaining amount of the Revolving Facility Commitments) and (ii)
the Borrower shall not terminate or reduce the Revolving Facility Commitments
if, after giving effect to any concurrent prepayment of the Revolving Facility
Loans in accordance with Section 2.11, the Revolving Facility Credit
Exposure would exceed the total Revolving Facility Commitments.
(c)
The
Borrower shall notify the Administrative Agent of any election to terminate
or
reduce the Revolving Facility Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction,
specifying
such election and the effective date thereof. Promptly following receipt
of any
notice, the Administrative Agent shall advise the applicable Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this
Section
shall be irrevocable;
provided
,
that a
notice of termination of the Revolving Facility Commitments delivered by
the
Borrower may state that such notice is conditioned upon the effectiveness
of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or reduction
of the Commitments shall be permanent. Each reduction of the Commitments
shall
be made ratably among the Lenders in accordance with their respective
Commitments.
SECTION
2.09.
Repayment
of Loans; Evidence of Debt
.
viii)
The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Revolving Facility Lender the then unpaid principal
amount of each Revolving Facility Loan to the Borrower on the Revolving Facility
Maturity Date, (ii) to the Administrative Agent for the account of each Lender
the then unpaid principal amount of each Term Loan of such Lender as provided
in
Section 2.10 and (iii) to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the Revolving Facility Maturity
Date.
(b)
Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.
(c)
The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Facility and Type thereof and the
Interest Period (if any) applicable thereto, (ii) the amount of any principal
or
interest due and payable or to become due and payable from the Borrower to
each
Lender hereunder and (iii) any amount received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share
thereof.
(d)
The
entries made in the accounts maintained pursuant to paragraph (b) or (c) of
this Section shall be prima facie evidence of the existence and amounts of
the
obligations recorded therein;
provided
,
that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this
Agreement.
(e)
Any
Lender may request that Loans made by it be evidenced by a promissory note
(a
“
Note
”).
In
such event, the Borrower shall prepare, execute and deliver to such Lender
a
promissory note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by
the
Administrative Agent and reasonably acceptable to the Borrower. Thereafter,
the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one
or more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and
its
registered assigns).
SECTION
2.10.
Repayment
of Term Loans and Revolving Facility Loans
.
ix)
Subject
to the other paragraphs of this Section, (i) the Borrower shall repay Term
B
Borrowings on each date set forth below in the aggregate principal amount set
forth opposite such date (each such date being referred to as a “
Term
B
Loan Installment Date
”)
(if
any such date is not a Business Day, then the applicable Term B Loan Installment
Date shall be deemed to be the immediately preceding Business Day):
Date
|
Amount
of Term B Borrowings
to
Be Repaid
|
December
31, 2006
|
$1,687,500
|
March
31, 2007
|
$1,687,500
|
June
30, 2007
|
$1,687,500
|
September
30, 2007
|
$1,687,500
|
December
31, 2007
|
$1,687,500
|
March
31, 2008
|
$1,687,500
|
June
30, 2008
|
$1,687,500
|
September
30, 2008
|
$1,687,500
|
December
31, 2008
|
$1,687,500
|
March
31, 2009
|
$1,687,500
|
June
30, 2009
|
$1,687,500
|
September
30, 2009
|
$1,687,500
|
December
31, 2009
|
$1,687,500
|
March
31, 2010
|
$1,687,500
|
June
30, 2010
|
$1,687,500
|
September
30, 2010
|
$1,687,500
|
December
31, 2010
|
$1,687,500
|
March
31, 2011
|
$1,687,500
|
June
30, 2011
|
$1,687,500
|
September
30, 2011
|
$1,687,500
|
December
31, 2011
|
$1,687,500
|
March
31, 2012
|
$1,687,500
|
June
30, 2012
|
$1,687,500
|
September
30, 2012
|
$1,687,500
|
December
31, 2012
|
$1,687,500
|
March
31, 2013
|
$1,687,500
|
June
30, 2013
|
$1,687,500
|
|
|
Term
B Facility Maturity Date
|
$629,437,500
or remainder
|
|
|
(ii)
in
the
event that any Incremental Term Loans are made on an Increased Amount Date,
the
Borrower shall repay such Incremental Term Loans on the dates and in the amounts
set forth in the Incremental Assumption Agreement (each such date being referred
to as an “
Incremental
Term Loan Installment Date
”);
and
(iii)
to
the
extent not previously paid, outstanding Term Loans shall be due and payable
on
the applicable Term Facility Maturity Date.
(b)
To
the
extent not previously paid, outstanding Revolving Facility Loans shall be due
and payable on the Revolving Facility Maturity Date.
(c)
Prepayment
of the Term Loans from:
(i)
all
Net
Proceeds pursuant to Section 2.11(b) and Excess Cash Flow pursuant to
Section 2.11(c) shall be applied to the Term Loans pro rata among the Term
Facilities, with the application thereof (x) to reduce in order of maturity
the
unpaid quarterly scheduled amortization payments under clause (a) above for
the
next 24 calendar months, and (y) thereafter, to reduce on a pro rata basis
(based on the amount of such amortization payments) the remaining scheduled
amortization payments in respect of Term Loans.
(ii)
any
optional prepayments of the Term Loans pursuant to Section 2.11(a) shall be
applied as the Borrower may direct.
(d)
Any
mandatory prepayment of Term Loans pursuant to Section 2.11(b) or (c) shall
be
applied so that the aggregate amount of such prepayment is allocated among
the
Term B Loans and Other Term Loans, if any,
pro
rata
based on
the aggregate principal amount of outstanding Term B Loans and Other Term Loans,
if any (unless, with respect to Other Term Loans, the Incremental Assumption
Agreement relating thereto does not so require) irrespective of whether such
outstanding Term Loans are Base Rate Loans or Eurodollar Rate Loans; provided
that if no Lenders exercise the right to waive a given mandatory prepayment
of
the Term Loans pursuant to Section 2.11(f), then, with respect to such mandatory
prepayment, prior to the repayment of any Term Loan, the Borrower may select
the
Borrowing or Borrowings to be repaid and shall notify the Administrative Agent
by telephone (confirmed by telecopy) of such selection not later than 1:00
p.m.,
Local Time, (i) in the case of an ABR Borrowing, one Business Day before the
scheduled date of such repayment and (ii) in the case of a Eurocurrency
Borrowing, three Business Days before the scheduled date of such repayment.
Prior to any repayment of any Revolving Facility Loans, the Borrower shall
select the Borrowing or Borrowings under the Revolving Facility to be repaid
and
shall notify the Administrative Agent by telephone (confirmed by telecopy)
of
such selection not later than 1:00 p.m., Local Time, (i) in the case of an
ABR
Borrowing, one Business Day before the scheduled date of such repayment and
(ii)
in the case of a Eurocurrency Borrowing, three Business Days before the
scheduled date of such repayment. Each repayment of a Borrowing (x) in the
case
of the Revolving Facility, shall be applied to the Revolving Facility Loans
included in the repaid Borrowing such that each Revolving Facility Lender
receives its ratable share of such repayment (based upon the respective
Revolving Facility Credit Exposures of the Revolving Facility Lenders at the
time of such repayment) and (y) in all other cases, shall be applied ratably
to
the Loans included in the repaid Borrowing. Notwithstanding anything to the
contrary in the immediately preceding sentence, prior to any repayment of a
Swingline Loan hereunder, the Borrower shall select the Borrowing or Borrowings
to be repaid and shall notify the Administrative Agent by telephone (confirmed
by telecopy) of such selection not
later
than 1:00 p.m., Local Time, on the scheduled date of such repayment. Repayments
of Eurocurrency Borrowings shall be accompanied by accrued interest on the
amount repaid.
SECTION
2.11.
Prepayment
of Loans
.
x)
The
Borrower shall have the right at any time and from time to time to prepay any
Loan in whole or in part, without premium or penalty (but subject to
Section 2.16), in an aggregate principal amount that is an integral
multiple of the Borrowing Multiple and not less than the Borrowing Minimum
or,
if less, the amount outstanding, subject to prior notice in accordance with
Section 2.10(d), which notice shall be irrevocable except to the extent
conditioned on a refinancing of all or any portion of the
Facilities.
(b)
The
Borrower shall apply all Net Proceeds promptly upon receipt thereof to prepay
Term Loans in accordance with paragraphs (c) and (d) of Section 2.10.
Notwithstanding the foregoing, the Borrower may retain Net Proceeds pursuant
to
clause (b) of the definition thereof, provided, that the Total Net First Lien
Leverage Ratio on the last day of the Borrower’s then most recently completed
fiscal quarter for which financial statements are available shall be less than
or equal to 2.00 to 1.00.
(c)
Not
later
than 90 days after the end of each Excess Cash Flow Period, the Borrower shall
calculate Excess Cash Flow for such Excess Cash Flow Period and shall apply
an
amount equal to (i) the Required Percentage of such Excess Cash Flow,
minus
(ii) to
the extent not financed, using the proceeds of, without duplication, the
incurrence of Indebtedness and the sale or issuance of any Equity Interests
(including any capital contributions), the sum of (A) the amount of any
voluntary prepayments during such Excess Cash Flow Period of Term Loans (and
with respect to the Excess Cash Flow Period ending December 29, 2007, plus
the
amount of any voluntary prepayments of Term Loans made prior to such Excess
Cash
Flow Period) and (B) the amount of any permanent voluntary reductions during
such Excess Cash Flow Period of Revolving Facility Commitments to the extent
that an equal amount of Revolving Facility Loans was simultaneously repaid,
to
prepay Term Loans in accordance with paragraphs (c) and (d) of
Section 2.10. Not later than the date on which the Borrower is required to
deliver financial statements with respect to the end of each Excess Cash Flow
Period under Section 5.04(a), the Borrower will deliver to the
Administrative Agent a certificate signed by a Financial Officer of the Borrower
setting forth the amount, if any, of Excess Cash Flow for such fiscal year
and
the calculation thereof in reasonable detail.
(d)
In
the
event and on such occasion that the total Revolving Facility Credit Exposure
exceeds the total Revolving Facility Commitments, the Borrower shall prepay
Revolving Facility Borrowings or Swingline Borrowings (or, if no such Borrowings
are outstanding, deposit cash collateral in an account with the Administrative
Agent pursuant to Section 2.05(j)) in an aggregate amount equal to such
excess.
(e)
In
the
event and on such occasion as the Revolving L/C Exposure exceeds the Letter
of
Credit Sublimit, the Borrower shall deposit cash collateral in an account with
the Administrative Agent pursuant to Section 2.05(j) in an amount equal to
such
excess.
(f)
Anything
contained herein to the contrary notwithstanding, in the event the Borrower
is
required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of
the Term Loans, not less than three Business Days prior to the date
(the
“Required
Prepayment Date”) on which the Borrower elects (or is otherwise required) to
make such Waivable Mandatory Prepayment, the Borrower shall notify
Administrative Agent of the amount of such prepayment, and Administrative
Agent
will promptly thereafter notify each Lender holding an outstanding Term Loan
of
the amount of such Lender’s pro rata share of such Waivable Mandatory Prepayment
and such Lender’s option to refuse such amount. Each such Lender may exercise
such option by giving written notice to the Administrative Agent of its election
to do so on or before the second Business Day prior to the Required Prepayment
Date (it being understood that any Lender which does not notify the
Administrative Agent of its election to exercise such option on or before
the
first Business Day prior to the Required Prepayment Date shall be deemed
to have
elected, as of such date, not to exercise such option). On the Required
Prepayment Date, the Borrower shall pay to Administrative Agent the amount
of
the Waivable Mandatory Prepayment, which amount shall be applied (i) in an
amount equal to that portion of the Waivable Mandatory Prepayment payable
to
those Lenders that have elected not to exercise such option (each, a “Declining
Lender”), to prepay the Term Loans of such Declining Lenders (which prepayment
shall be applied to the scheduled Installments of principal of the Term Loans
in
accordance with Section 2.11(b)), and (ii) in an amount equal to that portion
of
the Waivable Mandatory Prepayment otherwise payable to those Lenders that
have
elected to exercise such option, to the Borrower.
(g)
If
as a
result of changes in currency exchange rates, on any Revaluation Date, (i)
the
total Revolving Credit Facility Credit Exposure exceeds the total Revolving
Facility Commitments, (ii) the Revolving L/C Exposure exceeds the Letter of
Credit Sublimit or (iii) the Revolving L/C Exposure with respect to all
Alternate Currency Letters of Credit exceeds $15.0 million, the Borrower shall
within five days of such Revaluation Date (x) prepay Revolving Facility
Borrowings or Swingline Borrowings or (y) deposit cash collateral in an account
with the Administrative Agent pursuant to Section 2.05(j), in an aggregate
amount such that the applicable exposure does not exceed the applicable
commitment, sublimit or amount set forth above.
SECTION
2.12.
Fees
.
xi)
The
Borrower agrees to pay to each Lender (other than any Defaulting Lender),
through the Administrative Agent, three Business Days after the last Business
Day of March, June, September and December in each year, and three Business
Days
after the date on which the Revolving Facility Commitments of all the Lenders
shall be terminated as provided herein, a commitment fee (a “
Commitment
Fee
”)
on the
daily amount of the Available Unused Commitment of such Lender during the
preceding quarter (or other period commencing with the Closing Date or ending
with the date on which the last of the Commitments of such Lender shall be
terminated) at a rate equal to the Applicable Commitment Fee. All Commitment
Fees shall be computed on the basis of the actual number of days elapsed in
a
year of 360 days. For the purpose of calculating any Lender’s Commitment Fee,
the outstanding Swingline Loans during the period for which such Lender’s
Commitment Fee is calculated shall be deemed to be zero. The Commitment Fee
due
to each Lender shall commence to accrue on the Closing Date and shall cease
to
accrue on the date on which the last of the Commitments of such Lender shall
be
terminated as provided herein.
(b)
The
Borrower from time to time agrees to pay (i) to each Revolving Facility Lender
(other than any Defaulting Lender),
through
the Administrative Agent, three Business Days after the last day of March,
June,
September and December of each year and three Business Days after the date
on
which the Revolving Facility Commitments of all the Lenders shall be terminated
as provided herein, a fee (an “
L/C
Participation Fee
”)
on
such Lender’s Revolving Facility Percentage of the daily aggregate Revolving L/C
Exposure (excluding the portion thereof attributable to unreimbursed L/C
Disbursements), during the preceding quarter (or shorter period commencing
with
the Closing Date or ending with the Revolving Facility Maturity Date or the
date
on which the Revolving Facility Commitments shall be terminated) at the rate
per
annum equal to the Applicable Margin for Eurocurrency Revolving Facility
Borrowings effective for each day in such period, and (ii) to each Issuing
Bank,
for its own account (x) three Business Days after the last Business Day of
March, June, September and December of each year and three Business Days
after
the date on which the Revolving Facility Commitments of all the Lenders shall
be
terminated as provided herein, a fronting fee in respect of each Letter of
Credit issued by such Issuing Bank for the period from and including the
date of
issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate equal to 1/8 of 1% per annum of the
daily
stated amount of such Letter of Credit (or, in the case of a Bank Guarantee,
such other fee as agreed to between the Borrower and the applicable Issuing
Bank), plus (y) in connection with the issuance, amendment or transfer of
any
such Letter of Credit or any L/C Disbursement thereunder, such Issuing Bank’s
customary documentary and processing fees and charges (collectively,
“
Issuing
Bank Fees
”).
All
L/C Participation Fees and Issuing Bank Fees that are payable on a per annum
basis shall be computed on the basis of the actual number of days elapsed
in a
year of 360 days.
(c)
The
Borrower agrees to pay to the Administrative Agent, for the account of the
Administrative Agent, the agency fees set forth in the Fee Letter, as amended,
restated, supplemented or otherwise modified from time to time, at the times
specified therein (the “
Administrative
Agent Fees
”).
(d)
All
Fees
shall be paid on the dates due, in immediately available funds, to the
Administrative Agent for distribution, if and as appropriate, among the Lenders,
except that Issuing Bank Fees shall be paid directly to the applicable Issuing
Banks. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION
2.13.
Interest
.
xii)
The
Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear
interest at the ABR plus the Applicable Margin.
(b)
The
Loans
comprising each Eurocurrency Borrowing shall bear interest at the Adjusted
LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Margin.
(c)
Notwithstanding
the foregoing, if any principal of or interest on any Loan or any Fees or other
amount payable by the Borrower hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i)
in
the case of overdue principal of any Loan, 2% plus the rate otherwise applicable
to such Loan as provided in the preceding paragraphs of this Section or
(ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans
as provided in paragraph (a) of this Section;
provided
,
that
this paragraph (c) shall not apply to any Event of Default that has been
waived by the Lenders pursuant to Section 9.08.
(d)
Accrued
interest on each Loan shall be payable in arrears (i) on each Interest Payment
Date for such Loan, (ii) in the case of Revolving Facility Loans, upon
termination of the Revolving Facility Commitments and (iii) in the case of
the
Term Loans, on the applicable Term Facility Maturity Date;
provided
,
that
(i) interest accrued pursuant to paragraph (c) of this Section shall
be payable on demand, (ii) in the event of any repayment or prepayment of any
Loan (other than a prepayment of an ABR Revolving Loan or Swingline Loans prior
to the end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurocurrency Loan prior to
the
end of the current Interest Period therefor, accrued interest on such Loan
shall
be payable on the effective date of such conversion.
(e)
All
interest hereunder shall be computed on the basis of a year of 360 days, except
that interest computed by reference to the ABR at times when the ABR is based
on
the Prime Rate shall be computed on the basis of a year of 365 days (or 366
days
in a leap year), and in each case shall be payable for the actual number of
days
elapsed (including the first day but excluding the last day). The applicable
ABR, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest
error.
SECTION
2.14.
Alternate
Rate of Interest
.
If
prior to the commencement of any Interest Period for a Eurocurrency
Borrowing:
(a)
the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period; or
(b)
the
Administrative Agent is advised by the Required Lenders or the Majority Lenders
under the Revolving Facility that the Adjusted LIBO Rate or the LIBO Rate,
as
applicable, for such Interest Period will not adequately and fairly reflect
the
cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;
then
the
Administrative Agent shall give notice thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurocurrency Borrowing denominated in such
currency shall be ineffective and such Borrowing shall be converted to or
continued as on the last day of the Interest Period applicable thereto an ABR
Borrowing, and (ii) if any Borrowing Request requests a Eurocurrency Borrowing,
such Borrowing shall be made as an ABR Borrowing.
SECTION
2.15.
Increased
Costs
.
xiii)
If any
Change in Law shall:
(i)
impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or
for
the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or Issuing Bank;
or
(ii)
impose
on
any Lender or Issuing Bank or the London interbank market any other condition
affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter
of Credit or participation therein;
and
the
result of any of the foregoing shall be to increase the cost to such Lender
of
making or maintaining any Eurocurrency Loan (or of maintaining its obligation
to
make any such Loan) or to increase the cost to such Lender or Issuing Bank
of
participating in, issuing or maintaining any Letter of Credit or to reduce
the
amount of any sum received or receivable by such Lender or Issuing Bank
hereunder (whether of principal, interest or otherwise), then the Borrower
will
pay to such Lender or Issuing Bank, as applicable, such additional amount or
amounts as will compensate such Lender or Issuing Bank, as applicable, for
such
additional costs incurred or reduction suffered.
(b)
If
any
Lender or Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on
such
Lender’s or Issuing Bank’s capital or on the capital of such Lender’s or Issuing
Bank’s holding company, if any, as a consequence of this Agreement or the Loans
made by, or participations in Letters of Credit or Swingline Loans held by,
such
Lender, or the Letters of Credit issued by such Issuing Bank, to a level below
that which such Lender or such Issuing Bank or such Lender’s or such Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or such Issuing Bank’s policies and the
policies of such Lender’s or such Issuing Bank’s holding company with respect to
capital adequacy), then from time to time the Borrower shall pay to such Lender
or such Issuing Bank, as applicable, such additional amount or amounts as will
compensate such Lender or such Issuing Bank or such Lender’s or such Issuing
Bank’s holding company for any such reduction suffered.
(c)
A
certificate of a Lender or an Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or Issuing Bank or its holding company,
as
applicable, as specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or Issuing Bank, as applicable, the amount shown
as due on any such certificate within 10 days after receipt
thereof.
(d)
Promptly
after any Lender or any Issuing Bank has determined that it will make a request
for increased compensation pursuant to this Section 2.15, such Lender or
Issuing Bank shall notify the Borrower thereof. Failure or delay on the part
of
any Lender or Issuing Bank to demand compensation pursuant to this Section
shall
not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such
compensation;
provided
,
that
the Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or Issuing Bank, as applicable,
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s or Issuing Bank’s intention to claim
compensation therefor;
provided
,
further
,
that,
if the Change in Law giving rise to such increased costs or reductions
is
retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.
(e)
The
foregoing provisions of this Section 2.15 shall not apply in the case of any
Change in Law in respect of Taxes, which shall instead be governed by Section
2.17.
SECTION
2.16.
Break
Funding Payments
.
In the
event of (a) the payment of any principal of any Eurocurrency Loan other than
on
the last day of an Interest Period applicable thereto (including as a result
of
an Event of Default), (b) the conversion of any Eurocurrency Loan other than
on
the last day of the Interest Period applicable thereto (including as a result
of
Section 2.20), (c) the failure to borrow, convert, continue or prepay any
Eurocurrency Loan on the date specified in any notice delivered pursuant hereto
or (d) the assignment of any Eurocurrency Loan other than on the last day of
the
Interest Period applicable thereto as a result of a request by a Borrower
pursuant to Section 2.19, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurocurrency Loan, such loss, cost or expense to any
Lender shall be deemed to be the amount determined by such Lender (it being
understood that the deemed amount shall not exceed the actual amount) to be
the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted
LIBO
Rate that would have been applicable to such Loan, for the period from the
date
of such event to the last day of the then current Interest Period therefor
(or,
in the case of a failure to borrow, convert or continue a Eurocurrency Loan,
for
the period that would have been the Interest Period for such Loan), over (ii)
the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at
the
commencement of such period, for deposits in dollars of a comparable amount
and
period from other banks in the Eurocurrency market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt
thereof.
SECTION
2.17.
Taxes
.
xiv)
Any and
all payments by or on account of any obligation of any Loan Party hereunder
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes;
provided
,
that if
a Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary
so
that after making all required deductions (including deductions applicable
to
additional sums payable under this Section) the Administrative Agent, any Lender
or any Issuing Bank, as applicable, receives an amount equal to the sum it
would
have received had no such deductions been made, (ii) such Loan Party shall
make
such deductions and (iii) such Loan Party shall timely pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b)
In
addition, the Loan Parties shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c)
Each
Loan
Party shall indemnify the Administrative Agent, each Lender and each Issuing
Bank, within 10 days after written demand therefor, for the full amount of
any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender
or such
Issuing
Bank, as applicable, on or with respect to any payment by or on account of
any
obligation of any Loan Party hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate
as to
the amount of such payment or liability delivered to such Loan Party by a
Lender
or an Issuing Bank, or by the Administrative Agent on its own behalf, on
behalf
of another Agent or on behalf of a Lender or an Issuing Bank, shall be
conclusive absent manifest error.
(d)
As
soon
as practicable after any payment of Indemnified Taxes or Other Taxes by a Loan
Party to a Governmental Authority, such Loan Party shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e)
Any
Lender that is entitled to an exemption from or reduction of withholding Tax
under the law of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), to the extent such Lender is legally entitled to do so, at the time
or
times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law as may reasonably be requested by
the
Borrower to permit such payments to be made without such withholding tax or
at a
reduced rate;
provided
,
that no
Lender shall have any obligation under this paragraph (e) with respect to
any withholding Tax imposed by any jurisdiction other than the United States
if
in the reasonable judgment of such Lender such compliance would subject such
Lender to any material unreimbursed cost or expense or would otherwise be
disadvantageous to such Lender in any material respect.
(f)
Each
Lender shall deliver to the Borrower and the Administrative Agent on the date
on
which such Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), two original copies of whichever of the following is applicable: (i)
duly completed copies of Internal Revenue Service Form W-8BEN (or any subsequent
versions thereof or successors thereto), claiming eligibility for benefits
of an
income tax treaty to which the United States of America is a party, (ii) duly
completed copies of Internal Revenue Service Form W- 8ECI (or any subsequent
versions thereof or successors thereto), (iii) in the case of a Foreign Lender
claiming the benefits of the exemption for portfolio interest under
section 871(h) or 881(c) of the Code, (x) a certificate to the effect that
such Lender qualifies for such exemption and (y) duly completed copies of
Internal Revenue Service Form W-8BEN (or any subsequent versions thereof or
successors thereto), (iv) duly completed copies of Internal Revenue Service
Form
W-8IMY, together with forms and certificates described in clauses (i) through
(iii) above (and additional Form W-8IMYs) as may be required or (v) any other
form prescribed by applicable law as a basis for claiming exemption from or
a
reduction in United States federal withholding tax duly completed together
with
such supplementary documentation as may be prescribed by applicable law to
permit the Borrower to determine the withholding or deduction required to be
made. In addition, in each of the foregoing circumstances, each Lender shall
deliver such forms, if legally entitled to deliver such forms, promptly upon
the
obsolescence, expiration or invalidity of any form previously
delivered
by
such
Lender. Each Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered
certificate to the Borrower (or any other form of certification adopted by
the
United States of America or other taxing authorities for such purpose). In
addition, each Lender shall deliver to the Borrower and the Administrative
Agent
two copies of Internal Revenue Service Form W-9 (or any subsequent versions
thereof or successors thereto) on or before the date such Lender becomes
a party
and upon the expiration of any form previously delivered by such Lender.
Notwithstanding any other provision of this paragraph, a Lender shall not
be
required to deliver any form pursuant to this paragraph that such Lender
is not
legally able to deliver.
(g)
If
the
Administrative Agent or a Lender receives a refund of any Indemnified Taxes
or
Other Taxes as to which it has been indemnified by a Loan Party or with respect
to which such Loan Party has paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to such Loan Party (but only to
the extent of indemnity payments made, or additional amounts paid, by such
Loan
Party under this Section 2.17 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender (including any Taxes imposed with respect
to
such refund) as is determined by the Administrative Agent or such Lender, as
applicable, in good faith and in its sole discretion, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund);
provided
,
that
such Loan Party, upon the request of the Administrative Agent or such Lender,
agrees to repay as soon as reasonably practicable the amount paid over to such
Loan Party (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender
in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section 2.17(g) shall not be
construed to require the Administrative Agent or any Lender to make available
its Tax returns (or any other information relating to its Taxes which it deems
confidential) to the Loan Parties or any other person.
SECTION
2.18.
Payments
Generally; Pro Rata Treatment; Sharing of Set-offs
.
xv)
Unless
otherwise specified, the Borrower shall make each payment required to be made
by
it hereunder (whether of principal, interest, fees or reimbursement of L/C
Disbursements, or of amounts payable under Section 2.15, 2.16, or 2.17, or
otherwise) prior to 2:00 p.m., Local Time, on the date when due, in immediately
available funds, without condition or deduction for any defense, recoupment,
set-off or counterclaim. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent to the
applicable account designated to the Borrower by the Administrative Agent,
except payments to be made directly to the applicable Issuing Bank or the
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.05 shall be made directly to the persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on
a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under the Loan Documents shall be made in Dollars. Any payment required to
be
made by the Administrative Agent hereunder shall be deemed to have been made
by
the time required if the Administrative Agent shall, at or
before
such time, have taken the necessary steps to make such payment in accordance
with the regulations or operating procedures of the clearing or settlement
system used by the Administrative Agent to make such payment.
(b)
If
at any
time insufficient funds are received by and available to the Administrative
Agent from the Borrower to pay fully all amounts of principal, unreimbursed
L/C
Disbursements, interest and fees then due from the Borrower hereunder, such
funds shall be applied (i) first, towards payment of interest and fees then
due
from the Borrower hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties,
(ii)
second, towards payment of principal Swingline Loans and unreimbursed L/C
Disbursements then due from the Borrower hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed
L/C Disbursements then due to such parties, and (iii) third, towards payment
of
principal then due from the Borrower hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed
L/C Disbursements then due to such parties.
(c)
If
any
Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Term
Loans, Revolving Facility Loans or participations in L/C Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Term Loans, Revolving Facility Loans
and participations in L/C Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Term Loans, Revolving Facility Loans and participations
in
L/C Disbursements and Swingline Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest
on
their respective Term Loans, Revolving Facility Loans and participations in
L/C
Disbursements and Swingline Loans;
provided
,
that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph (c) shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained
by a
Lender as consideration for the assignment of or sale of a participation in
any
of its Loans or participations in L/C Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph (c) shall apply). The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrower rights of
set-off and counterclaim with respect to such participation as fully as if
such
Lender were a direct creditor of the Borrower in the amount of such
participation.
(d)
Unless
the Administrative Agent shall have received notice from the Borrower prior
to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the applicable Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower
has
made such payment on such date in accordance herewith and may, in reliance
upon
such assumption, distribute to the Lenders or the applicable Issuing Bank,
as
applicable, the amount due. In such
event,
if
the Borrower has not in fact made such payment, then each of the Lenders
or the
applicable Issuing Bank, as applicable, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective
Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e)
If
any
Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(c), 2.05(d) or (e), 2.06(b) or 2.18(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully
paid.
SECTION
2.19.
Mitigation
Obligations; Replacement of Lenders
.
xvi)
If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office
for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or Affiliates, if, in the
reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as
applicable, in the future and (ii) would not subject such Lender to any material
unreimbursed cost or expense and would not otherwise be disadvantageous to
such
Lender in any material respect. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b)
If
any
Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or is a
Defaulting Lender, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment);
provided
,
that
(i) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if in respect of any Revolving Facility Commitment
or
Revolving Facility Loan, the Swingline Lender and the Issuing Bank), which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in L/C Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest
and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17,
such assignment will result in a reduction in such compensation or payments.
Nothing in this Section 2.19 shall be deemed to prejudice any rights that
the Borrower may have against any Lender that is a Defaulting
Lender.
(c)
If
any
Lender (such Lender, a “
Non-Consenting
Lender
”)
has
failed to consent to a proposed amendment, waiver, discharge or termination
which pursuant to the terms of Section 9.08 requires the consent of all of
the Lenders affected and with respect to which the Required Lenders shall have
granted their consent, then the Borrower shall have the right (unless such
Non-Consenting Lender grants such consent) at its sole expense (including with
respect to the processing and recordation fee referred to in Section
9.04(b)(ii)(B)) to replace such Non-Consenting Lender by deeming such
Non-Consenting Lender to have assigned its Loans, and its Commitments hereunder
to one or more assignees reasonably acceptable to (i) the Administrative Agent
(unless, in the case of an assignment of Term Loans, such assignee is a Lender,
an Affiliate of a Lender or an Approved Fund) and (ii) if in respect of any
Revolving Facility Commitment or Revolving Facility Loan, the Swingline Lender
and the Issuing Bank);
provided
,
that:
(a) all Obligations of the Borrower owing to such Non-Consenting Lender
(including accrued Fees and any amounts under Sections 2.15, 2.16 and 2.17)
being replaced shall be paid in full to such Non-Consenting Lender concurrently
with such assignment, and (b) the replacement Lender shall purchase the
foregoing by paying to such Non-Consenting Lender a price equal to the principal
amount thereof plus accrued and unpaid interest thereon. No action by or consent
of the Non-Consenting Lender shall be necessary in connection with such
assignment, which shall be immediately and automatically effective upon payment
of such purchase price. In connection with any such assignment the Borrower,
Administrative Agent, such Non-Consenting Lender and the replacement Lender
shall otherwise comply with Section 9.04; provided, that if such
Non-Consenting Lender does not comply with Section 9.04 within three Business
Days after Borrower’s request, compliance with Section 9.04 shall not be
required to effect such assignment.
SECTION
2.20.
Illegality
(a)
.
If any
Lender reasonably determines that any change in law has made it unlawful, or
that any Governmental Authority has asserted after the Closing Date that it
is
unlawful, for any Lender or its applicable lending office to make or maintain
any Eurocurrency Loans, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligations of such Lender to make or
continue Eurocurrency Loans or to convert ABR Borrowings to Eurocurrency
Borrowings shall be suspended until such Lender notifies the Administrative
Agent and the Borrower that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, the Borrower shall upon demand
from such Lender (with a copy to the Administrative Agent), either convert
all
Eurocurrency Borrowings of such Lender to ABR Borrowings, either on the last
day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurocurrency Borrowings to such day, or immediately, if such
Lender may not lawfully continue to maintain such Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted.
SECTION
2.21.
Incremental
Commitments
.
(a) The Borrower may, by written notice to the Administrative Agent from
time to time, request Incremental Term Loan Commitments and/or Incremental
Revolving Facility Commitments, as applicable, in an amount not to exceed the
Incremental Amount from one or more Incremental Term Lenders and/or Incremental
Revolving Facility Lenders (which may include any existing Lender) willing
to
provide such Incremental Term Loans and/or Incremental Revolving Facility
Commitments, as the case may be, in their own discretion;
provided
,
that
each Incremental Revolving Facility Lender shall be subject to the approval
of
the
Administrative
Agent and the Issuing Bank (which approval shall not be unreasonably withheld)
unless such Incremental Revolving Lender is a Lender, an Affiliate of a Lender
or an Approved Fund. Such notice shall set forth (i) the amount of the
Incremental Term Loan Commitments and/or Incremental Revolving Facility
Commitments being requested (which shall be in minimum increments of $5.0
million and a minimum amount of $25.0 million or equal to the remaining
Incremental Amount), (ii) the date on which such Incremental Term Loan
Commitments and/or Incremental Revolving Facility Commitments are requested
to
become effective (the “
Increased
Amount Date
”),
(iii)
in the case of Incremental Revolving Facility Commitments, whether such
Incremental Revolving Facility Commitments are to be Revolving Loan Commitments
or commitments to make revolving loans with pricing and/or amortization terms
different from the Revolving Loans (“
Other
Revolving Loans
”),
and
(iv) in the case of Incremental Term Loan Commitments, whether such Incremental
Term Loan Commitments are to be Term Loan Commitments or commitments to make
term loans with pricing and/or amortization terms different from the Term
B
Loans (“
Other
Term Loans
”).
(b)
The
Borrower and each Incremental Term Lender and/or Incremental Revolving Facility
Lender shall execute and deliver to the Administrative Agent an Incremental
Assumption Agreement and such other documentation as the Administrative Agent
shall reasonably specify to evidence the Incremental Term Loan Commitment of
such Incremental Term Lender and/or Incremental Revolving Facility Commitment
of
such Incremental Revolving Facility Lender. Each Incremental Assumption
Agreement shall specify the terms of the applicable Incremental Term Loans
and/or Incremental Revolving Facility Commitments;
provided
,
that
(i) the Other Term Loans shall rank pari passu or junior in right of payment
and
of security with the Term B Loans and, except as to pricing, amortization and
final maturity date, shall have (x) the same terms as the Term Loans, as
applicable, or (y) such other terms as shall be reasonably satisfactory to
the
Administrative Agent, (ii) the final maturity date of any Other Term Loans
shall
be no earlier than the Term B Facility Maturity Date, (iii) the weighted average
life to maturity of any Other Term Loans shall be no shorter than the remaining
weighted average life to maturity of the Term B Loans, (iv) the Other
Revolving Loans shall rank pari passu or junior in right of payment and of
security with the Revolving Loans and except as to pricing, amortization and
final maturity date, shall have (x) the same terms as the Revolving Facility
Loans, as applicable, or (y) such other terms as shall be reasonably
satisfactory to the Administrative Agent, (v) the final maturity date of any
Other Revolving Loans shall be no earlier than the Revolving Facility Maturity
Date, and (vi) the Borrower shall have no senior unsecured bridge term
loans or senior subordinated bridge terms loans outstanding at the time such
Other Term Loans or Other Revolving Loans are incurred unless such bridge loans
are repaid in full with the proceeds of the Other Term Loans or Other Revolving
Loans. Each of the parties hereto hereby agrees that, upon the effectiveness
of
any Incremental Assumption Agreement, this Agreement shall be amended to the
extent (but only to the extent) necessary to reflect the existence and terms
of
the Incremental Term Loan Commitments and/or Incremental Revolving Facility
Commitments evidenced thereby as provided for in Section 9.08(e). Any such
deemed amendment may be memorialized in writing by the Administrative Agent
with
the Borrower’s consent (not to be unreasonably withheld) and furnished to the
other parties hereto.
(c)
Notwithstanding
the foregoing, no Incremental Term Loan Commitment or Incremental Revolving
Facility Commitment shall become effective under this Section 2.21 unless (i)
on
the date of such effectiveness, the conditions set forth in paragraphs (b)
and
(c)
of
Section 4.01 shall be satisfied and the Administrative Agent shall have received
a certificate to that effect dated such date and executed by a Responsible
Officer of the Borrower, (ii) the Administrative Agent shall have received
customary legal opinions, board resolutions and other customary closing
certificates and documentation as required by the relevant Incremental
Assumption Agreement and, to the extent required by the Administrative Agent,
consistent with those delivered on the Closing Date under Section 4.02 and
such
additional customary documents and filings (including amendments to the
Mortgages and other Security Documents and title endorsement bringdowns)
as the
Administrative Agent may reasonably require to assure that the Incremental
Term
Loans and/or Revolving Facility Loans in respect of Incremental Revolving
Facility Commitments are secured by the Collateral ratably with (or, to the
extent agreed by the applicable Incremental Term Lenders or Incremental
Revolving Facility Lenders in the applicable Incremental Assumption Agreement,
junior to) the existing Term B Loans and Revolving Facility Loans and (iii)
the
Borrower shall be in Pro Forma Compliance after giving effect to such
Incremental Term Loan Commitment and/or Incremental Revolving Facility
Commitments and the Loans to be made thereunder and the application of the
proceeds therefrom as if made and applied on such date.
(d)
Each
of
the parties hereto hereby agrees that the Administrative Agent may take any
and
all action as may be reasonably necessary to ensure that (i) all Incremental
Term Loans (other than Other Term Loans) in the form of additional Term B Loans,
when originally made, are included in each Borrowing of outstanding Term B
Loans
on a pro rata basis, and (ii) all Revolving Facility Loans in respect of
Incremental Revolving Facility Commitments (other than Other Revolving Loans),
when originally made, are included in each Borrowing of outstanding Revolving
Facility Loans on a pro rata basis. The Borrower agrees that Section 2.16 shall
apply to any conversion of Eurocurrency Loans to ABR Loans reasonably required
by the Administrative Agent to effect the foregoing.
ARTICLE
III
Representations
and Warranties
On
the
date of each Credit Event as provided in Section 4.01, the Borrower represents
and warrants to each of the Lenders that:
SECTION
3.01.
Organization;
Powers
.
Except
as set forth on
Schedule 3.01
,
each of
Holdings, the Borrower and each of the Material Subsidiaries (a) is a
partnership, limited liability company or corporation duly organized, validly
existing and in good standing (or, if applicable in a foreign jurisdiction,
enjoys the equivalent status under the laws of any jurisdiction of organization
outside the United States) under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own its property
and
assets and to carry on its business as now conducted, (c) is qualified to do
business in each jurisdiction where such qualification is required, except
where
the failure so to qualify would not reasonably be expected to have a Material
Adverse Effect, and (d) has the power and authority to execute, deliver and
perform its obligations under each of the Loan Documents and each other
agreement or instrument contemplated thereby to which it is or will be a party
and, in the case of the Borrower, to borrow and otherwise obtain credit
hereunder.
SECTION
3.02.
Authorization
.
The
execution, delivery and performance by Holdings, the Borrower and each of the
Subsidiary Loan Parties of each of the Loan Documents to which it is a party,
and the borrowings hereunder and the transactions forming a part of the
Transactions (a) have been duly authorized by all corporate, stockholder,
partnership or limited liability company action required to be obtained by
Holdings, the Borrower and such Subsidiary Loan Parties and (b) will not (i)
violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents
(including any partnership, limited liability company or operating agreements)
or by-laws of Holdings, the Borrower or any such Subsidiary Loan Party, (B)
any
applicable order of any court or any rule, regulation or order of any
Governmental Authority or (C) any provision of any indenture, certificate of
designation for preferred stock, agreement or other instrument to which
Holdings, the Borrower or any such Subsidiary Loan Party is a party or by which
any of them or any of their property is or may be bound, (ii) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of
time
or both) a default under, give rise to a right of or result in any cancellation
or acceleration of any right or obligation (including any payment) or to a
loss
of a material benefit under any such indenture, certificate of designation
for
preferred stock, agreement or other instrument, where any such conflict,
violation, breach or default referred to in clause (i) or (ii) of this
Section 3.02(b), would reasonably be expected to have, individually or in
the aggregate a Material Adverse Effect, or (iii) result in the creation or
imposition of any Lien upon or with respect to any property or assets now owned
or hereafter acquired by Holdings, the Borrower or any such Subsidiary Loan
Party, other than the Liens created by the Loan Documents and Permitted
Liens.
SECTION
3.03.
Enforceability
.
This
Agreement has been duly executed and delivered by Holdings and the Borrower
and
constitutes, and each other Loan Document when executed and delivered by each
Loan Party that is party thereto will constitute, a legal, valid and binding
obligation of such Loan Party enforceable against each such Loan Party in
accordance with its terms, subject to (i) the effects of bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or other similar laws
affecting creditors’ rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (iii) implied covenants of good faith and fair
dealing.
SECTION
3.04.
Governmental
Approvals
.
No
action, consent or approval of, registration or filing with or any other action
by any Governmental Authority or third party is or will be required in
connection with the Transactions, the perfection or maintenance of the Liens
created under the Security Documents or the exercise by any Agent or any Lender
of its rights under the Loan Documents or the remedies in respect of the
Collateral, except for (a) the filing of Uniform Commercial Code financing
statements, (b) filings with the United States Patent and Trademark Office
and
the United States Copyright Office and comparable offices in foreign
jurisdictions and equivalent filings in foreign jurisdictions, (c) recordation
of the Mortgages, (d) such as have been made or obtained and are in full force
and effect, (e) such actions, consents and approvals the failure of which to
be
obtained or made would not reasonably be expected to have a Material Adverse
Effect and (f) filings or other actions listed on
Schedule 3.04
.
SECTION
3.05.
Financial
Statements
.
xvii)
The
unaudited
pro
forma
consolidated balance sheet and related consolidated statements of income and
cash flows of the Borrower, together with its consolidated Subsidiaries
(including the notes thereto) (the “
Pro
Forma
Financial Statements
”)
and
pro
forma
adjusted
EBITDA (the “
Pro
Forma Adjusted EBITDA
”),
for
the fiscal year ending December 31, 2005, copies of which have heretofore
been furnished to each Lender (via inclusion in the Information Memorandum),
have been prepared giving effect (as if such events had occurred on such
date)
to the Transactions. Each of the Pro Forma Financial Statements and the Pro
Forma Adjusted EBITDA has been prepared in good faith based on assumptions
believed by the Borrower to have been reasonable as of the date of delivery
thereof (it being understood that such assumptions are based on good faith
estimates of certain items and that the actual amount of such items on the
Closing Date is subject to change), and presents fairly in all material respects
on a Pro Forma Basis the estimated financial position of the Borrower and
its
consolidated Subsidiaries as at December 31, 2005, assuming that the
Transactions had actually occurred at such date, and the results of operations
of Borrower and its consolidated subsidiaries for the twelve-month period
ended
December 31, 2005, assuming that the Transactions had actually occurred on
the first day of such twelve-month period.
(b)
The
audited combined balance sheets of the Target as at the end of the 2003, 2004
and 2005 fiscal years (which fiscal years ended, in each case, on the Saturday
nearest the end of such calendar year), and the related audited combined
statements of income, stockholders’ equity, and cash flows for such fiscal
years, reported on by and accompanied by a report from Ernst & Young, copies
of which have heretofore been furnished to each Lender, present fairly in all
material respects the combined financial position of the Target as at such
date
and the combined results of operations, stockholders’ equity, and cash flows of
the Target for the years then ended.
SECTION
3.06.
No
Material Adverse Effect
.
Since
December 31, 2005, there has been no event, development or circumstance
that has or would reasonably be expected to have a Material Adverse
Effect.
SECTION
3.07.
Title
to Properties; Possession Under Leases
.
xviii)
Each
of Holdings, the Borrower and the Subsidiaries has valid fee simple title to,
or
valid leasehold interests in, or easements or other limited property interests
in, all its Real Properties (including all Mortgaged Properties) and has valid
title to its personal property and assets, in each case, except for Permitted
Liens and except for defects in title that do not materially interfere with
its
ability to conduct its business as currently conducted or to utilize such
properties and assets for their intended purposes and except where the failure
to have such title would not reasonably be expected to have, individually or
in
the aggregate, a Material Adverse Effect. All such properties and assets are
free and clear of Liens, other than Permitted Liens.
(b)
Each
of
the Borrower and the Subsidiaries has complied with all obligations under all
leases to which it is a party, except where the failure to comply would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and all such leases are in full force and effect, except leases
in respect of which the failure to be in full force and effect would not
reasonably be expected to have a Material Adverse Effect. Except as set forth
on
Schedule 3.07(b), the Borrower and each of the Subsidiaries enjoys peaceful
and
undisturbed possession under all such leases, other than leases in respect
of
which the failure to enjoy peaceful and undisturbed possession would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(c)
Each
of
the Borrower and the Subsidiaries owns or possesses, or is licensed to use,
all
patents, trademarks, service marks, trade names and copyrights, all applications
for any of the foregoing and all licenses and rights with respect to any of
the
foregoing necessary for the present conduct of its business, without any
conflict (of which the Borrower has been notified in writing) with the rights
of
others, and free from any burdensome restrictions on the present conduct of
the
Target, except where such conflicts and restrictions would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
or
except as set forth on
Schedule 3.07(c)
.
(d)
As
of the
Closing Date, none of the Borrower or the Subsidiaries has received any notice
of any pending or contemplated condemnation proceeding affecting any material
portion of the Mortgaged Properties or any sale or disposition thereof in lieu
of condemnation that remains unresolved as of the Closing Date.
(e)
None
of
the Borrower or the Subsidiaries is obligated on the Closing Date under any
right of first refusal, option or other contractual right to sell, assign or
otherwise dispose of any Mortgaged Property or any interest therein, except
as
permitted by Section 6.02 or 6.05.
SECTION
3.08.
Subsidiaries
.
xix)
Schedule 3.08(a)
sets
forth as of the Closing Date the name and jurisdiction of incorporation,
formation or organization of each direct and indirect subsidiary of Holdings
and, as to each such subsidiary, the percentage of each class of Equity
Interests owned by Holdings or by any such subsidiary.
(b)
As
of the
Closing Date, there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted
to
employees or directors and directors’ qualifying shares) of any nature relating
to any Equity Interests of Holdings, the Borrower or any of the Subsidiaries,
except rights of employees to purchase Equity Interests of Holdings in
connection with the Transactions or as set forth on
Schedule 3.08(b)
.
SECTION
3.09.
Litigation;
Compliance with Laws
.
xx)
There
are no actions, suits or proceedings at law or in equity or, to the knowledge
of
the Borrower, investigations by or on behalf of any Governmental Authority
or in
arbitration now pending, or, to the knowledge of Holdings or the Borrower,
threatened in writing against or affecting Holdings or the Borrower or any
of
the Subsidiaries or any business, property or rights of any such person which
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(b)
None
of
Holdings, the Borrower, the Subsidiaries and their respective properties or
assets is in violation of (nor will the continued operation of their material
properties and assets as currently conducted violate) any law, rule or
regulation (including any zoning, building, ordinance, code or approval or
any
building permit, but excluding any Environmental Laws, which are subject to
Section 3.16) or any restriction of record or agreement affecting any
Mortgaged Property, or is in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority, where such violation or
default would reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
SECTION
3.10.
Federal
Reserve Regulations
.
xxi)
None
of Holdings, the Borrower or the Subsidiaries is engaged principally, or as
one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock.
(b)
No
part
of the proceeds of any Loan will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (i) to purchase or carry Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
Margin Stock or to refund indebtedness originally incurred for such purpose,
or
(ii) for any purpose that entails a violation of, or that is inconsistent with,
the provisions of the Regulations of the Board, including Regulation U or
Regulation X.
SECTION
3.11.
Investment
Company Act
.
None of
Holdings, the Borrower and the Subsidiaries is an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended.
SECTION
3.12.
Use
of
Proceeds
.
The
Borrower will use the proceeds of the Revolving Facility Loans and Swingline
Loans, and may request the issuance of Letters of Credit, solely for general
corporate purposes (including, without limitation, for Permitted Business
Acquisitions) and, in the case of up to $30.0 million of Revolving Facility
Loans made on the Closing Date, to fund a portion of the consideration for
the
Acquisition. The Borrower will use the proceeds of the Term B Loans (a) to
fund a portion of the merger consideration for the Acquisition, (b) to
refinance the Refinanced Indebtedness and (c) to pay the Transaction
Expenses.
SECTION
3.13.
Tax
Returns
.
Except
as set forth on
Schedule 3.13
:
(a)
Except
as
would not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect, (i) each of Holdings, the Borrower and the Subsidiaries
has filed or caused to be filed all federal, state, local and non-U.S. Tax
returns required to have been filed by it and (ii) taken as a whole, and each
such Tax return is true and correct;
(b)
Each
of
Holdings, the Borrower and the Subsidiaries has timely paid or caused to be
timely paid all Taxes shown to be due and payable by it on the returns referred
to in clause (a) and all other Taxes or assessments (or made adequate
provision (in accordance with GAAP) for the payment of all Taxes due) with
respect to all periods or portions thereof ending on or before the Closing
Date
(except Taxes or assessments that are being contested in good faith by
appropriate proceedings in accordance with Section 5.03 and for which
Holdings, the Borrower or any of the Subsidiaries (as the case may be) has
set
aside on its books adequate reserves in accordance with GAAP), which Taxes,
if
not paid or adequately provided for, would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
(c)
Other
than as would not be, individually or in the aggregate, reasonably expected
to
have a Material Adverse Effect: as of the Closing Date, with respect to each
of
Holdings, the Borrower and the Subsidiaries, (i) there are no claims being
asserted in writing with respect to any Taxes, (ii) no presently effective
waivers or extensions of statutes of limitation with respect to
Taxes
have
been given or requested and (iii) no Tax returns are being examined by, and
no
written notification of intention to examine has been received from, the
Internal Revenue Service or any other Taxing authority.
SECTION
3.14.
No
Material Misstatements
.
xxii)
All
written information (other than the Projections, estimates and information
of a
general economic nature or general industry nature) (the “
Information
”)
concerning Holdings, the Borrower, the Subsidiaries, the Transactions and any
other transactions contemplated hereby included in the Information Memorandum
or
otherwise prepared by or on behalf of the foregoing or their representatives
and
made available to any Lenders or the Administrative Agent in connection with
the
Transactions or the other transactions contemplated hereby, when taken as a
whole, was true and correct in all material respects, as of the date such
Information was furnished to the Lenders and as of the Closing Date and did
not,
taken as a whole, contain any untrue statement of a material fact as of any
such
date or omit to state a material fact necessary in order to make the statements
contained therein, taken as a whole, not materially misleading in light of
the
circumstances under which such statements were made.
(b)
The
Projections and estimates and information of a general economic nature prepared
by or on behalf of the Borrower or any of its representatives and that have
been
made available to any Lenders or the Administrative Agent in connection with
the
Transactions or the other transactions contemplated hereby (i) have been
prepared in good faith based upon assumptions believed by the Borrower to be
reasonable as of the date thereof (it being understood that actual results
may
vary materially from the Projections), as of the date such Projections and
estimates were furnished to the Lenders and as of the Closing Date, and (ii)
as
of the Closing Date, have not been modified in any material respect by the
Borrower.
SECTION
3.15.
Employee
Benefit Plans
.
xxiii)
Except
as would not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect: (i) each Plan is in compliance in all material respects
with the applicable provisions of ERISA and the Code; (ii) no Reportable Event
has occurred during the past five years as to which the Borrower, Holdings,
any
of their Subsidiaries or any ERISA Affiliate was required to file a report
with
the PBGC, other than reports that have been filed; (iii) no Plan has any
Unfunded Pension Liability in excess of $20.0 million; (iv) no ERISA Event
has
occurred or is reasonably expected to occur; (v) none of Holdings, Borrower
and
the Subsidiaries has engaged in a “prohibited transaction” (as defined in
Section 406 of ERISA and Code Section 4975) in connection with any employee
pension benefit plan (as defined in Section 3(2) of ERISA) that would subject
Holdings, Borrower or any subsidiary to tax; and (vi) none of the Borrower,
Holdings, the Subsidiaries and the ERISA Affiliates (A) has received any written
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, or has knowledge that any
Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated or (B) has incurred or is reasonably expected to incur any withdrawal
liability to any Multiemployer Plan.
(b)
Each
of
Holdings, the Borrower and the Subsidiaries is in compliance (i) with all
applicable provisions of law and all applicable regulations and published
interpretations thereunder with respect to any employee pension benefit plan
or
other employee benefit plan governed by the laws of a jurisdiction other than
the United States and (ii) with the terms of any such plan, except, in each
case, for
such
noncompliance that would not reasonably be expected to have a Material Adverse
Effect.
(c)
Except
as
would not reasonably be expected to result in a Material Adverse Effect, there
are no pending, or to the knowledge of the Borrower, threatened claims (other
than claims for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any person as fiduciary or sponsor
of
any Plan that could result in liability to Holdings, Borrower, any Subsidiaries
or the ERISA Affiliates.
(d)
Within
the last five years, no Plan of Holdings, Borrower, any Subsidiaries or the
ERISA Affiliates has been terminated, whether or not in a “standard termination”
as that term is used in Section 404(b)(1) of ERISA, that would reasonably be
expected to result in liability to Holdings, Borrower, any Subsidiaries of
the
ERISA Affiliates in excess of $20.0 million, nor has any Plan of Holdings,
Borrower, any Subsidiaries or the ERISA Affiliates (determined at any time
within the past five years) with Unfunded Pension Liabilities been transferred
outside of the “controlled group” (with the meaning of Section 4001(a)(14) of
ERISA) of Holdings, Borrower, any Subsidiaries or the ERISA Affiliates that
has
or would reasonably be expected to result in a Material Adverse
Effect.
SECTION
3.16.
Environmental
Matters
.
Except
as set forth in Schedule 3.16 and except as to matters that would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect: (i) no written notice, request for information, order, complaint
or penalty has been received by the Borrower or any of its Subsidiaries, and
there are no judicial, administrative or other actions, suits or proceedings
pending or, to the Borrower’s knowledge, threatened which allege a violation of
or liability under any Environmental Laws, in each case relating to the Borrower
or any of its Subsidiaries, (ii) each of the Borrower and its Subsidiaries
has
all environmental permits, licenses and other approvals necessary for its
operations to comply with all applicable Environmental Laws and is, and during
the term of all applicable statutes of limitation, has been, in compliance
with
the terms of such permits, licenses and other approvals and with all other
applicable Environmental Laws, (iii) to the Borrower’s knowledge, no Hazardous
Material is located at, on or under any property currently owned, operated
or
leased by the Borrower or any of its Subsidiaries that would reasonably be
expected to give rise to any cost, liability or obligation of the Borrower
or
any of its Subsidiaries under any Environmental Laws, and no Hazardous Material
has been generated, owned, treated, stored, handled or controlled by the
Borrower or any of its Subsidiaries and transported to or Released at any
location in a manner that would reasonably be expected to give rise to any
cost,
liability or obligation of the Borrower or any of its Subsidiaries under any
Environmental Laws and (iv) there are no agreements in which the Borrower or
any
of its Subsidiaries has expressly assumed or undertaken responsibility for
any
known or reasonably likely liability or obligation of any other person arising
under or relating to Environmental Laws, which in any such case has not been
made available to the Administrative Agent prior to the date
hereof.
SECTION
3.17.
Security
Documents
.
xxiv)
The
Collateral Agreement is effective to create in favor of the Administrative
Agent
(for the benefit of the Secured Parties) a legal, valid and enforceable fully
perfected first priority security interest in the Collateral described therein
and proceeds thereof. In the case of the Pledged Collateral described in the
Collateral Agreement, when certificates or
promissory
notes, as applicable, representing such Pledged Collateral are delivered
to the
Administrative Agent, and in the case of the other Collateral described in
the
Collateral Agreement (other than the Intellectual Property (as defined in
the
Collateral Agreement)), when financing statements and other filings specified
in
the Perfection Certificate are filed in the offices specified in the Perfection
Certificate, the Administrative Agent (for the benefit of the Secured Parties)
shall have a fully perfected first priority Lien on, and security interest
in,
all right, title and interest of the Loan Parties in such Collateral and,
subject to Section 9-315 of the New York Uniform Commercial Code, the
proceeds thereof, as security for the Obligations to the extent perfection
can
be obtained by filing Uniform Commercial Code financing statements, in each
case
prior and superior in right to any other person (except, in the case of
Collateral other than Pledged Collateral and Permitted
Liens).
(b)
When
the
Collateral Agreement or a summary thereof is properly filed in the United States
Patent and Trademark Office and the United States Copyright Office, and, with
respect to Collateral in which a security interest cannot be perfected by such
filings, upon the proper filing of the financing statements referred to in
paragraph (a) above, the Administrative Agent (for the benefit of the
Secured Parties) shall have a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the Loan Parties
thereunder in all domestic Intellectual Property, in each case prior and
superior in right to any other person (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United
States Copyright Office may be necessary to perfect a lien on registered
trademarks and patents, trademark and patent applications and registered
copyrights acquired by the grantors after the Closing Date) (except Permitted
Liens).
(c)
Each
Foreign Pledge Agreement, if any, shall be effective to create in favor of
the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and
enforceable fully perfected first priority security interest in the Collateral
described therein and proceeds thereof to the fullest extent permissible under
applicable law. In the case of the Pledged Collateral described in a Foreign
Pledge Agreement, when certificates representing such Pledged Collateral (if
any) are delivered to the Administrative Agent (for the benefit of the Secured
Parties) shall have a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Obligations, in each case prior and
superior in right to any other person.
(d)
Notwithstanding
anything herein (including this Section 3.17) or in any other Loan Document
to
the contrary, other than to the extent set forth in the applicable Foreign
Pledge Agreements, no Borrower or any other Loan Party makes any representation
or warranty as to the effects of perfection or non-perfection, the priority
or
the enforceability of any pledge of or security interest in any Equity Interests
of any Foreign Subsidiary that is not a Loan Party, or as to the rights and
remedies of the Agents or any Lender with respect thereto, under foreign
law.
SECTION
3.18.
Location
of Real Property and Leased Premises
.
xxv)
The
Perfection Certificate completely and correctly sets forth and identifies,
in
all material respects, as of the Closing Date all material Real Property owned
by Holdings, the Borrower and the Subsidiary Loan Parties and the addresses
thereof. As of the Closing Date, Holdings, the Borrower and the Subsidiary
Loan
Parties own in fee all the Real Property set forth as being owned by them on
such schedules to the Perfection Certificate.
(b)
The
Perfection Certificate completely and correctly sets forth and identifies,
in
all material respects, as of the Closing Date, all material Real Property leased
by Holdings, the Borrower and the Subsidiary Loan Parties and the addresses
thereof and the leases pursuant to which the Real Property is leased. As of
the
Closing Date, Holdings, the Borrower and the Subsidiary Loan Parties have in
all
material respects valid leases in all the Real Property set forth as being
leased by them on such schedules to the Perfection Certificate.
SECTION
3.19.
Solvency
.
xxvi)
Immediately
after giving effect to the Transactions on the Closing Date, (i) the fair value
of the assets of the Borrower (individually) and Holdings, the Borrower and
its
Subsidiaries on a consolidated basis, at a fair valuation, will exceed the
debts
and liabilities, direct, subordinated, unmatured, unliquidated, contingent
or
otherwise, of the Borrower (individually) and Holdings, the Borrower and its
Subsidiaries on a consolidated basis, respectively; (ii) the present fair
saleable value of the property of the Borrower (individually) and Holdings,
the
Borrower and its Subsidiaries on a consolidated basis will be greater than
the
amount that will be required to pay the probable liability of the Borrower
(individually) and Holdings, the Borrower and its Subsidiaries on a consolidated
basis, respectively, on their debts and other liabilities, direct, subordinated,
unmatured, unliquidated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (iii) the Borrower (individually)
and
Holdings, the Borrower and its Subsidiaries on a consolidated basis will be
able
to pay their debts and liabilities, direct, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (iv)
the Borrower (individually) and Holdings, the Borrower and its Subsidiaries
on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted following the Closing
Date.
(b)
On
the
Closing Date, neither Holdings nor the Borrower intends to, and neither Holdings
nor the Borrower believes that it or any of its subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing and amounts of cash to be received by it or any such subsidiary and
the
timing and amounts of cash to be payable on or in respect of its Indebtedness
or
the Indebtedness of any such subsidiary.
SECTION
3.20.
Labor
Matters
.
Except
as, individually or in the aggregate, would not reasonably be expected to have
a
Material Adverse Effect: (a) there are no strikes or other labor disputes
pending or threatened against Holdings, the Borrower or any of the Subsidiaries;
(b) the hours worked and payments made to employees of Holdings, the Borrower
and the Subsidiaries have not been in violation of the Fair Labor Standards
Act
or any other applicable law dealing with such matters; and (c) all payments
due
from Holdings, the Borrower or any of the Subsidiaries or for which any claim
may be made against Holdings, the Borrower or any of the Subsidiaries, on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as a liability on the books of Holdings, the Borrower
or such Subsidiary to the extent required by GAAP. Except as, individually
or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect, the consummation of the Transactions will not give rise to a right
of
termination or right of renegotiation on the part of any union under any
material collective bargaining agreement to which Holdings, the Borrower or
any
of the Subsidiaries (or any predecessor) is a party or by which Holdings, the
Borrower or any of the Subsidiaries (or any predecessor) is bound.
SECTION
3.21.
Insurance
.
Schedule 3.21
sets
forth a true, complete and correct description of all material insurance
maintained by or on behalf of Holdings, the Borrower or the Subsidiaries as
of
the Closing Date. As of such date, such insurance is in full force and effect.
SECTION
3.22.
No
Default
.
No
Default or Event of Default has occurred and is continuing or would result
from
the consummation of the transactions contemplated by this Agreement or any
other
Loan Document.
SECTION
3.23.
Intellectual
Property; Licenses, Etc
.
Except
as
would not reasonably be expected to have a Material Adverse Effect and as set
forth in Schedule 3.23, (a) the Borrower and each of its Subsidiaries owns,
or
possesses the right to use, all of the patents, patent rights, trademarks,
service marks, trade names, copyrights, mask works, domain names, and any and
all applications or registrations for any of the foregoing (collectively,
“
Intellectual
Property Rights
”)
that
are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other person, (b) to the best knowledge
of the Borrower, neither the Borrower nor its Subsidiaries nor any intellectual
property right, proprietary right, product, process, method, substance, part,
or
other material now employed, sold or offered by or contemplated to be employed,
sold or offered by the Borrower or its Subsidiaries, is interfering with,
infringing upon, misappropriating or otherwise violating any intellectual
property rights of any person, and (c) no claim or litigation regarding any
of
the foregoing is pending or, to the best knowledge of the Borrower, threatened.
SECTION
3.24.
Senior
Debt
.
The
Obligations constitute “Senior Debt” (or the equivalent thereof) and “Designated
Senior Debt” (or the equivalent thereof) under the Senior Subordinated Notes
Indenture and under the documentation governing any other Indebtedness permitted
to be incurred hereunder constituting subordinated Indebtedness or any Permitted
Refinancing Indebtedness in respect of the Senior Subordinated Notes or such
other Indebtedness permitted to be incurred hereunder constituting subordinated
Indebtedness.
ARTICLE
IV
Conditions
of Lending
The
obligations of (a) the Lenders (including the Swingline Lender) to make Loans
and (b) any Issuing Bank to issue Letters of Credit or increase the stated
amounts of Letters of Credit hereunder (each, a “
Credit
Event
”)
are
subject to the satisfaction of the following conditions:
SECTION
4.01.
All
Credit Events
.
On the
date of each Borrowing and on the date of each issuance, amendment, extension
or
renewal of a Letter of Credit:
(a)
The
Administrative Agent shall have received, in the case of a Borrowing, a
Borrowing Request as required by Section 2.03 (or a Borrowing Request shall
have been deemed given in accordance with the last paragraph of
Section 2.03) or, in the case of the issuance of a Letter of Credit, the
applicable Issuing Bank and the Administrative Agent shall have received a
notice
requesting
the issuance of such Letter of Credit as required by
Section 2.05(b).
(b)
(i)
In
the case of each Credit Event that occurs on the Closing Date, the conditions
in
Section 8.2(a)of the Acquisition Agreement (but only with respect to
representations and warranties that are material to the interests of the
Lenders) shall be satisfied, and the representations and warranties made in
Sections 3.01(b) and (d), 3.02(a), 3.03, 3.10, 3.11 and 3.24 shall be true
and
correct in all material respects; and (ii) in the case of each other Credit
Event, the representations and warranties set forth in the Loan Documents shall
be true and correct in all material respects as of such date (other than an
amendment, extension or renewal of a Letter of Credit without any increase
in
the stated amount of such Letter of Credit), as applicable, with the same effect
as though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date).
(c)
In
the
case of each Credit Event that occurs after the Closing Date, at the time of
and
immediately after such Borrowing or issuance, amendment, extension or renewal
of
a Letter of Credit (other than an amendment, extension or renewal of a Letter
of
Credit without any increase in the stated amount of such Letter of Credit),
as
applicable, no Event of Default or Default shall have occurred and be continuing
or would result therefrom.
Each
such
Borrowing and each issuance, amendment, extension or renewal of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date of such Borrowing, issuance, amendment, extension or
renewal as applicable, as to the matters specified in paragraphs (b) and
(c) of this Section 4.01.
SECTION
4.02.
First
Credit Event
.
On the
Closing Date (which shall in no event be a date that occurs after December
28,
2006):
(a)
The
Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or
(ii) written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this Agreement)
that
such party has signed a counterpart of this Agreement.
(b)
The
Administrative Agent shall have received, on behalf of itself, the Lenders
and
each Issuing Bank on the Closing Date, a favorable written opinion of
(i) Wachtell, Lipton, Rosen & Katz, special counsel for the Loan
Parties, in form and substance reasonably satisfactory to the Administrative
Agent, (ii) Jeff Thompson, in-house counsel for the Loan Parties, in form and
substance reasonably satisfactory to the Administrative Agent and (iii) local
counsel reasonably satisfactory to the Administrative Agent as specified on
Schedule 4.02(b)
,
in each
case (A) dated the Closing Date, (B) addressed to each Issuing Bank on the
Closing Date, the Administrative Agent and the Lenders and (C) in form and
substance reasonably satisfactory to the Administrative Agent
and
covering such other matters relating to the Loan Documents as the Administrative
Agent shall reasonably request.
(c)
The
Administrative Agent shall have received in the case of each Loan Party each
of
the items referred to in clauses (i), (ii), (iii) and (iv)
below:
(i)
a
copy of
the certificate or articles of incorporation, certificate of limited partnership
or certificate of formation, including all amendments thereto, of each Loan
Party, (A) in the case of a corporation, certified as of a recent date by the
Secretary of State (or other similar official) of the jurisdiction of its
organization, and a certificate as to the good standing (to the extent such
concept or a similar concept exists under the laws of such jurisdiction) of
each
such Loan Party as of a recent date from such Secretary of State (or other
similar official) or (B) in the case of a partnership or limited liability
company, certified by the Secretary or Assistant Secretary of each such Loan
Party;
(ii)
a
certificate of the Secretary or Assistant Secretary or similar officer of each
Loan Party dated the Closing Date and certifying
(A)
that
attached thereto is a true and complete copy of the by-laws (or partnership
agreement, limited liability company agreement or other equivalent governing
documents) of such Loan Party as in effect on the Closing Date and at all times
since a date prior to the date of the resolutions described in clause (B)
below,
(B)
that
attached thereto is a true and complete copy of resolutions duly adopted by
the
Board of Directors (or equivalent governing body) of such Loan Party (or its
managing general partner or managing member) authorizing the execution, delivery
and performance of the Loan Documents to which such person is a party and,
in
the case of the Borrower, the borrowings hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full force and effect
on
the Closing Date,
(C)
that
the
certificate or articles of incorporation, certificate of limited partnership
or
certificate of formation of such Loan Party has not been amended since the
date
of the last amendment thereto disclosed pursuant to clause (i)
above,
(D)
as
to the
incumbency and specimen signature of each officer executing any Loan Document
or
any other document delivered in connection herewith on behalf of such Loan
Party
and
(E)
as
to the
absence of any pending proceeding for the dissolution or liquidation of such
Loan Party or, to the knowledge of such person, threatening the existence of
such Loan Party;
(iii)
a
certificate of a director or another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary or similar officer executing
the certificate pursuant to clause (ii) above; and
(iv)
such
other documents as the Administrative Agent, the Lenders and any Issuing Bank
on
the Closing Date may reasonably request (including without limitation, tax
identification numbers and addresses).
(d)
The
elements of the Collateral and Guarantee Requirement required to be satisfied
on
the Closing Date shall have been satisfied (other than in the case of any
security interest in the intended Collateral or any deliverable related to
the
perfection of security interests in the intended Collateral (other than any
Collateral the security interest in which may be perfected by the filing of
a
UCC financing statement or the delivery of stock certificates and the security
agreement giving rise to the security interest therein) that is not provided
on
the Closing Date after the Borrower’s use of commercially reasonable efforts to
do so, which such security interest or deliverable shall be delivered within
the
time periods specified with respect thereto in Schedule 4.02(d)) and the
Administrative Agent shall have received a completed Perfection Certificate
dated the Closing Date and signed by a Responsible Officer of the Borrower,
together with all attachments contemplated thereby, and the results of a search
of the Uniform Commercial Code (or equivalent) filings made with respect to
the
Loan Parties in the jurisdictions contemplated by the Perfection Certificate
and
copies of the financing statements (or similar documents) disclosed by such
search and evidence reasonably satisfactory to the Administrative Agent that
the
Liens indicated by such financing statements (or similar documents) are
Permitted Liens or have been released.
(e)
The
Acquisition shall have been consummated or shall be consummated simultaneously
with or immediately following the closing under this Agreement in accordance
with the terms and conditions of the Acquisition as set forth in the Acquisition
Documents, without material amendment, supplement, modification or waiver
thereof which is materially adverse to the Lenders without the prior written
consent of the Joint Lead Arrangers.
(f)
The
Equity Financing shall have been consummated.
(g)
The
Borrower shall have received gross cash proceeds of (i) $750.0 million from
the
issuance of the Second Lien Notes or from senior unsecured bridge term loans
and
(ii) $425.0 million from the issuance of the Senior Subordinated Notes or from
senior subordinated bridge term loans.
(h)
The
terms
and conditions of the Second Lien Notes and the Senior Subordinated Notes
(including terms and conditions relating to the interest rate, fees,
amortization, maturity, subordination (in the case of the Senior Subordinated
Notes), security (in the case of the Second Lien Notes), covenants, defaults
and
remedies) shall be as set forth in the Second Lien Notes Offering Memorandum
and
the Senior Subordinated Notes Indenture or otherwise reasonably satisfactory
to
the Administrative Agent.
(i)
All
amounts due or outstanding in respect of the Existing Credit Agreement shall
have been (or substantially simultaneously with the closing under this Agreement
shall be) paid in full, all commitments in respect thereof terminated and all
guarantees thereof and security therefore discharged and released, and the
Administrative Agent shall have received reasonably satisfactory evidence
thereof.
(j)
The
Lenders shall have received the financial statements referred to in
Section 3.05.
(k)
On
the
Closing Date, after giving effect to the Transactions and the other transactions
contemplated hereby, Holdings shall have outstanding no Indebtedness and the
Borrower and the Subsidiaries shall have outstanding no Indebtedness other
than
(i) the Loans and other extensions of credit under this Agreement, (ii) the
Second Lien Notes or senior unsecured bridge term loans, (iii) the Senior
Subordinated Notes or senior subordinated bridge term loans and (iv) other
Indebtedness permitted pursuant to Section 6.01.
(l)
The
Lenders shall have received a solvency certificate substantially in the form
of
Exhibit B
and
signed by the Chief Financial Officer of the Borrower confirming the solvency
of
Borrower and its Subsidiaries on a consolidated basis after giving effect to
the
Transactions on the Closing Date.
(m)
The
Agents shall have received all fees payable thereto or to any Lender on or
prior
to the Closing Date and, to the extent invoiced, all other amounts due and
payable pursuant to the Loan Documents on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all reasonable
out-of-pocket expenses (including reasonable fees, charges and disbursements
of
Latham & Watkins LLP) required to be reimbursed or paid by the Loan Parties
hereunder or under any Loan Document.
(n)
The
Administrative Agent shall have received all insurance certificates satisfying
the requirements of Section 5.02 of this Agreement. The Administrative Agent
shall have received all documentation and other information required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation, the USA PATRIOT
Act.
For
purposes of determining compliance with the conditions specified in this Section
4.02, each Lender shall be deemed to have consented to, approved or accepted
or
to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
prior to the Closing Date specifying its objection thereto and such Lender
shall
not have made available to the Administrative Agent such Lender’s ratable
portion of the initial Borrowing.
ARTICLE
V
Affirmative
Covenants
The
Borrower covenants and agrees with each Lender that so long as this Agreement
shall remain in effect (other than in respect of contingent indemnification
obligations for which no claim has been made) and until the Commitments have
been terminated and the Obligations (including principal of and interest on
each
Loan, all Fees and all other expenses or amounts payable under any Loan
Document) shall have been paid in full and all Letters of Credit and Bankers’
Acceptances have been canceled or have expired and all amounts drawn or paid
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and will cause each of the
Material Subsidiaries to:
SECTION
5.01.
Existence;
Businesses and Properties
.
xxvii)
Do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except, in the case of a Subsidiary of
the
Borrower, where the failure to do so would not reasonably be expected to have
a
Material Adverse Effect, and except as otherwise expressly permitted under
Section 6.05, and except for the liquidation or dissolution of Subsidiaries
if the assets of such Subsidiaries to the extent they exceed estimated
liabilities are acquired by the Borrower or a Wholly Owned Subsidiary of the
Borrower in such liquidation or dissolution;
provided
,
that
Subsidiary Loan Parties may not be liquidated into Subsidiaries that are not
Loan Parties and Domestic Subsidiaries may not be liquidated into Foreign
Subsidiaries.
(b)
Except
where the failure to do so would not reasonably be expected to have a Material
Adverse Effect, do or cause to be done all things necessary to (i) lawfully
obtain, preserve, renew, extend and keep in full force and effect the permits,
franchises, authorizations, patents, trademarks, service marks, trade names,
copyrights, licenses and rights with respect thereto necessary to the normal
conduct of its business, (ii) comply in all material respects with all
applicable laws, rules, regulations (including any zoning, building ordinance,
code or approval or any building permits or any restrictions of record or
agreements affecting the Mortgaged Properties) and judgments, writs,
injunctions, decrees and orders of any Governmental Authority, whether now
in
effect or hereafter enacted, and (iii) at all times maintain and preserve all
property necessary to the normal conduct of its business and keep such property
in good repair, working order and condition and from time to time make, or
cause
to be made, all needful and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith, if any, may be properly conducted at all times (in each
case except as expressly permitted by this Agreement).
SECTION
5.02.
Insurance
.
xxviii)
Maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by similarly
situated companies engaged in the same or similar businesses operating in the
same or similar locations and cause the Administrative Agent to be listed as
a
co-loss payee on property and casualty policies and as an additional insured
on
liability policies.
(b)
With
respect to any Mortgaged Properties, if at any time the area in which the
Premises (as defined in the Mortgages) are located is designated a “flood hazard
area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency
(or
any
successor agency), obtain flood insurance in such reasonable total amount
as the
Administrative Agent may from time to time reasonably require, and otherwise
comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973, as it may be amended from time to
time.
(c)
In
connection with the covenants set forth in this Section 5.02, it is understood
and agreed that:
(i)
none
of
the Administrative Agent, the Lenders, the Issuing Bank and their respective
agents or employees shall be liable for any loss or damage insured by the
insurance policies required to be maintained under this Section 5.02, it being
understood that (A) the Loan Parties shall look solely to their insurance
companies or any other parties other than the aforesaid parties for the recovery
of such loss or damage and (B) such insurance companies shall have no rights
of
subrogation against the Administrative Agent, the Lenders, any Issuing Bank
or
their agents or employees. If, however, the insurance policies, as a matter
of
the internal policy of such insurer, do not provide waiver of subrogation rights
against such parties, as required above, then each of Holdings and the Borrower,
on behalf of itself and behalf of each of its subsidiaries, hereby agrees,
to
the extent permitted by law, to waive, and further agrees to cause each of
their
Subsidiaries to waive, its right of recovery, if any, against the Administrative
Agent, the Lenders, any Issuing Bank and their agents and employees;
and
(ii)
the
designation of any form, type or amount of insurance coverage by the
Administrative Agent under this Section 5.02 shall in no event be deemed a
representation, warranty or advice by the Administrative Agent or the Lenders
that such insurance is adequate for the purposes of the business of Holdings,
the Borrower and the Subsidiaries or the protection of their
properties.
SECTION
5.03.
Taxes
.
Pay and
discharge promptly when due all material Taxes imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims which, if unpaid, might
give rise to a Lien upon such properties or any part thereof;
provided
,
however
,
that
such payment and discharge shall not be required with respect to any such Tax
or
claim so long as the validity or amount thereof shall be contested in good
faith
by appropriate proceedings, and Holdings, the Borrower or the affected
Subsidiary, as applicable, shall have set aside on its books reserves in
accordance with GAAP with respect thereto.
SECTION
5.04.
Financial
Statements, Reports, etc.
Furnish
to the Administrative Agent (which will promptly furnish such information to
the
Lenders):
(a)
Within
90
days (or, if applicable, such shorter period as the SEC shall specify for the
filing of annual reports on Form 10-K), after the end of each fiscal year
(commencing with the fiscal year ending December 30, 2006), a consolidated
balance sheet and related statements of operations, cash flows and owners’
equity showing the financial position of the Borrower and its Subsidiaries
as of
the close of such fiscal year and the consolidated results of its operations
during such year and, starting with the
fiscal
year ending December 30, 2006, setting forth in comparative form the
corresponding figures for the prior fiscal year, which consolidated balance
sheet and related statements of operations, cash flows and owners’ equity shall
be audited by independent public accountants of recognized national standing
and
accompanied by an opinion of such accountants (which opinion shall not be
qualified as to scope of audit or as to the status of the Borrower or any
Material Subsidiary as a going concern) to the effect that such consolidated
financial statements fairly present, in all material respects, the financial
position and results of operations of the Borrower and its Subsidiaries on
a
consolidated basis in accordance with GAAP (it being understood that the
delivery by the Borrower of annual reports on Form 10-K of the Borrower and
its
consolidated Subsidiaries shall satisfy the requirements of this Section 5.04(a)
to the extent such annual reports include the information specified
herein);
(b)
within
45
days (or, if applicable, such shorter period as the SEC shall specify for the
filing of quarterly reports on Form 10-Q) after the end of each of the first
three fiscal quarters of each fiscal year (or, in the case of the first fiscal
quarter for which quarterly financial statements are required to be delivered
hereunder, within 75 days following the end of such fiscal quarter), for
each of the first three fiscal quarters of each fiscal year, (i) a consolidated
balance sheet and related statements of operations and cash flows showing the
financial position of the Borrower and its Subsidiaries as of the close of
such
fiscal quarter and the consolidated results of its operations during such fiscal
quarter and the then-elapsed portion of the fiscal year and setting forth in
comparative form the corresponding figures for the corresponding periods of
the
prior fiscal year, and (ii) management’s discussion and analysis of significant
operational and financial developments during such quarterly period, all of
which shall be in reasonable detail and which consolidated balance sheet and
related statements of operations and cash flows shall be certified by a
Financial Officer of the Borrower on behalf of the Borrower as fairly
presenting, in all material respects, the financial position and results of
operations of the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP (subject to normal year-end audit adjustments and the
absence of footnotes) (it being understood that the delivery by the Borrower
of
quarterly reports on Form 10-Q of the Borrower and its consolidated Subsidiaries
shall satisfy the requirements of this Section 5.04(b) to the extent such
quarterly reports include the information specified herein);
(c)
(x)
concurrently with any delivery of financial statements under paragraphs (a)
or
(b) above, a certificate of a Financial Officer of the Borrower (i) certifying
that no Event of Default or Default has occurred or, if such an Event of Default
or Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto, and (ii)
commencing with the fiscal quarter ending September 30, 2006 (or December 30,
2006 in order to effect any change in the Pricing Grid), setting forth
computations in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the Financial Performance Covenant, (iii) setting
forth the calculation and uses of the Cumulative Credit for the fiscal period
then ended if the Borrower shall have used the Cumulative Credit for any purpose
during such fiscal period, (iv) certifying a list of names of all Immaterial
Subsidiaries, that each Subsidiary set forth on such list individually qualifies
as an Immaterial Subsidiary and that all
such
Subsidiaries in the aggregate (together with all Unrestricted Subsidiaries)
do
not exceed the limitation set forth in clause (b) of the definition of the
term
Immaterial Subsidiary, and (v) certifying a list of names of all Unrestricted
Subsidiaries, that each Subsidiary set forth on such list individually qualifies
as an Unrestricted Subsidiary, and (z) concurrently with any delivery of
financial statements under paragraph (a) above, if the accounting firm is not
restricted from providing such a certificate by its policies of its national
office, a certificate of the accounting firm opining on or certifying such
statements stating whether they obtained knowledge during the course of their
examination of such statements of any Default or Event of Default (which
certificate may be limited to accounting matters and disclaim responsibility
for
legal interpretations);
(d)
promptly
after the same become publicly available, copies of all periodic and other
publicly available reports, proxy statements and, to the extent requested by
the
Administrative Agent, other materials filed by Holdings, the Borrower or any
of
the Subsidiaries with the SEC, or after an initial public offering, distributed
to its stockholders generally, as applicable; provided, however, that such
reports, proxy statements, filings and other materials required to be delivered
pursuant to this clause (d) shall be deemed delivered for purposes of this
Agreement when posted to the website of the Borrower;
(e)
within
90
days after the beginning of each fiscal year, a reasonably detailed consolidated
annual budget for such fiscal year (including a projected consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the following fiscal
year, and the related consolidated statements of projected cash flow and
projected income), including a description of underlying assumptions with
respect thereto (collectively, the “
Budget
”),
which
Budget shall in each case be accompanied by the statement of a Financial Officer
of the Borrower to the effect that the Budget is based on assumptions believed
by such Financial Officer to be reasonable as of the date of delivery
thereof;
(f)
upon
the
reasonable request of the Administrative Agent, an updated Perfection
Certificate (or, to the extent such request relates to specified information
contained in the Perfection Certificate, such information) reflecting all
changes since the date of the information most recently received pursuant to
this paragraph (f) or Section 5.10(f);
(g)
promptly,
from time to time, such other information regarding the operations, business
affairs and financial condition of Holdings, the Borrower or any of the
Subsidiaries, or compliance with the terms of any Loan Document, or such
consolidating financial statements as in each case the Administrative Agent
may
reasonably request (for itself or on behalf of any Lender);
(h)
in
the
event that (i) in respect of the Second Lien Notes or the Senior Subordinated
Notes, and any Refinancing Indebtedness with respect thereto, the rules and
regulations of the SEC permit the Borrower, Holdings or any Parent Entity to
report at Holdings’ or such Parent Entity’s level on a consolidated basis and
(ii) Holdings or such Parent Entity, as the case may be, is not
engaged
in any business or activity, and does not own any assets or have other
liabilities, other than those incidental to its ownership directly or indirectly
of the capital stock of the Borrower and the incurrence of Indebtedness for
borrowed money (and, without limitation on the foregoing, does not have any
subsidiaries other than the Borrower and the Borrower’s Subsidiaries and any
direct or indirect parent companies of the Borrower that are not engaged in
any
other business or activity and do not hold any other assets or have any
liabilities except as indicated above) such consolidated reporting at such
Parent Entity’s level in a manner consistent with that described in paragraphs
(a) and (b) of this Section 5.04 for the Borrower
(together
with a reconciliation showing the adjustments necessary to determine compliance
by the Borrower and its Subsidiaries with the Financial Performance
Covenant)
will
satisfy the requirements of such paragraphs;
(i)
promptly
upon request by the Administrative Agent, copies of: (i) each Schedule B
(Actuarial Information) to the most recent annual report (Form 5500 Series)
filed with the Internal Revenue Service with respect to a Plan; (ii) the most
recent actuarial valuation report for any Plan; (iii) all notices received
from
a Multiemployer Plan sponsor, a plan administrator or any governmental agency,
or provided to any Multiemployer Plan by Holdings, the Borrower, a Subsidiary
or
any ERISA Affiliate, concerning an ERISA Event; and (iv) such other documents
or
governmental reports or filings relating to any Plan or Multiemployer Plan
as
the Administrative Agent shall reasonably request; and
(j)
promptly
upon Holdings, Borrower or Subsidiaries becoming aware of any fact or condition
which would reasonably be expected to result in an ERISA Event, Borrower shall
deliver to Administrative Agent a summary of such facts and circumstances and
any action it or Holdings or Subsidiaries intend to take regarding such facts
or
conditions.
SECTION
5.05.
Litigation
and Other Notices
.
Furnish
to the Administrative Agent (which will promptly thereafter furnish to the
Lenders) written notice of the following promptly after any Responsible Officer
of Holdings or the Borrower obtains actual knowledge thereof:
(a)
any
Event
of Default or Default, specifying the nature and extent thereof and the
corrective action (if any) proposed to be taken with respect
thereto;
(b)
the
filing or commencement of, or any written threat or notice of intention of
any
person to file or commence, any action, suit or proceeding, whether at law
or in
equity or by or before any Governmental Authority or in arbitration, against
Holdings, the Borrower or any of the Subsidiaries as to which an adverse
determination is reasonably probable and which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect;
(c)
any
other
development specific to Holdings, the Borrower or any of the Subsidiaries that
is not a matter of general public knowledge and that has had, or would
reasonably be expected to have, a Material Adverse Effect; and
(d)
the
development of any ERISA Event that, together with all other ERISA Events that
have developed or occurred, would reasonably be expected to have a Material
Adverse Effect.
SECTION
5.06.
Compliance
with Laws
.
Comply
with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, would not reasonably be expected to result
in
a Material Adverse Effect;
provided
,
that
this Section 5.06 shall not apply to Environmental Laws, which are the
subject of Section 5.09, or to laws related to Taxes, which are the subject
of Section 5.03.
SECTION
5.07.
Maintaining
Records; Access to Properties and Inspections
.
Maintain all financial records in accordance with GAAP and permit any persons
designated by the Administrative Agent or, upon the occurrence and during the
continuance of an Event of Default, any Lender to visit and inspect the
financial records and the properties of Holdings, the Borrower or any of the
Subsidiaries at reasonable times, upon reasonable prior notice to Holdings
or
the Borrower, and as often as reasonably requested and to make extracts from
and
copies of such financial records, and permit any persons designated by the
Administrative Agent or, upon the occurrence and during the continuance of
an
Event of Default, any Lender upon reasonable prior notice to Holdings or the
Borrower to discuss the affairs, finances and condition of Holdings, the
Borrower or any of the Subsidiaries with the officers thereof and independent
accountants therefor (subject to reasonable requirements of confidentiality,
including requirements imposed by law or by contract).
SECTION
5.08.
Use
of
Proceeds
.
Use the
proceeds of the Revolving Facility Loans and the Swingline Loans and request
issuance of Letters of Credit solely for general corporate purposes; and use
the
proceeds of the Term B Loans and up to $30.0 million of the Revolving Facility
Loans to consummate the Acquisition and the other Transactions.
SECTION
5.09.
Compliance
with Environmental Laws
.
Comply,
and make reasonable efforts to cause all lessees and other persons occupying
its
properties to comply, with all Environmental Laws applicable to its operations
and properties; and obtain and renew all material authorizations and permits
required pursuant to Environmental Law for its operations and properties, in
each case in accordance with Environmental Laws, except, in each case with
respect to this Section 5.09, to the extent the failure to do so would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
SECTION
5.10.
Further
Assurances; Additional Security
.
xxix)
Execute
any and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of
financing statements, fixture filings, Mortgages and other documents and
recordings of Liens in stock registries), that may be required under any
applicable law, or that the Administrative Agent may reasonably request, to
satisfy the Collateral and Guarantee Requirement and to cause the Collateral
and
Guarantee Requirement to be and remain satisfied, all at the expense of the
Loan
Parties and provide to the Administrative Agent, from time to time upon
reasonable request, evidence reasonably satisfactory to the Administrative
Agent
as to the perfection and priority of the Liens created or intended to be created
by the Security Documents.
(b)
If
any
asset (including any Real Property (other than Real Property covered by
paragraph (c) below) or improvements thereto or any interest therein) that
has an individual fair market value in an amount greater than $3.0 million
is
acquired by the Borrower or any other Loan Party after the Closing Date or
owned
by an entity at the time it becomes a Subsidiary Loan Party (in each case other
than (x) assets constituting Collateral under a Security Document that
become subject to the Lien of such Security Document upon acquisition thereof
and (y) assets that are not required to become subject to Liens in favor of
the
Administrative Agent pursuant to Section 5.10(g) or the Security Documents)
will
(i) notify the Administrative Agent thereof, (ii) if such asset is comprised
of
Real Property, deliver to Administrative Agent an updated Schedule 1.01(b)
reflecting the addition of such asset, and (iii) cause such asset to be
subjected to a Lien securing the Obligations and take, and cause the Subsidiary
Loan Parties to take, such actions as shall be necessary or reasonably requested
by the Administrative Agent to grant and perfect such Liens, including actions
described in paragraph (a) of this Section, all at the expense of the Loan
Parties, subject to paragraph (g) below.
(c)
Promptly
notify the Administrative Agent of the acquisition of and grant and cause each
of the Subsidiary Loan Parties to grant to the Administrative Agent security
interests and mortgages in such Real Property of the Borrower or any such
Subsidiary Loan Parties as are not covered by the original Mortgages, to the
extent acquired after the Closing Date and having a value at the time of
acquisition in excess of $3.0 million pursuant to documentation substantially
in
the form of the Mortgages delivered to the Administrative Agent on the Closing
Date or in such other form as is reasonably satisfactory to the Administrative
Agent (each, an “
Additional
Mortgage
”)
and
constituting valid and enforceable Liens subject to no other Liens except
Permitted Liens, at the time of perfection thereof, record or file, and cause
each such Subsidiary to record or file, the Additional Mortgage or instruments
related thereto in such manner and in such places as is required by law to
establish, perfect, preserve and protect the Liens in favor of the
Administrative Agent required to be granted pursuant to the Additional Mortgages
and pay, and cause each such Subsidiary to pay, in full, all Taxes, fees and
other charges payable in connection therewith, in each case subject to
paragraph (g) below. Unless otherwise waived by the Administrative Agent,
with respect to each such Additional Mortgage, the Borrower shall deliver to
the
Administrative Agent contemporaneously therewith a title insurance policy,
and a
survey.
(d)
If
any
additional direct or indirect Subsidiary of the Borrower (following a Qualified
IPO) is formed or acquired after the Closing Date (with any Subsidiary
Redesignation resulting in an Unrestricted Subsidiary becoming a Subsidiary
being deemed to constitute the acquisition of a Subsidiary) and if such
Subsidiary is a Subsidiary Loan Party, within five Business Days after the
date
such Subsidiary is formed or acquired, notify the Administrative Agent and
the
Lenders thereof and, within 20 Business Days after the date such Subsidiary
is
formed or acquired or such longer period as the Administrative Agent shall
agree, cause the Collateral and Guarantee Requirement to be satisfied with
respect to such Subsidiary and with respect to any Equity Interest in or
Indebtedness of such Subsidiary owned by or on behalf of any Loan Party, subject
to paragraph (g) below.
(e)
If
any
additional Foreign Subsidiary of the Borrower is formed or acquired after the
Closing Date (with any Subsidiary Redesignation resulting in an Unrestricted
Subsidiary becoming a Subsidiary being deemed to constitute the acquisition
of a
Subsidiary) and
if
such
Subsidiary is a “first tier” Foreign Subsidiary, within five Business Days after
the date such Foreign Subsidiary is formed or acquired, notify the
Administrative Agent and the Lenders thereof and, within 20 Business Days
after
the date such Foreign Subsidiary is formed or acquired or such longer period
as
the Administrative Agent shall agree, cause the Collateral and Guarantee
Requirement to be satisfied with respect to any Equity Interest in such Foreign
Subsidiary owned by or on behalf of any Loan Party, subject to paragraph
(g)
below.
(f)
(i)
Furnish to the Administrative Agent prompt written notice of any change (A)
in
any Loan Party’s corporate or organization name, (B) in any Loan Party’s
identity or organizational structure or (C) in any Loan Party’s organizational
identification number;
provided
,
that
the Borrower shall not effect or permit any such change unless all filings
have
been made, or will have been made within any statutory period, under the Uniform
Commercial Code or otherwise that are required in order for the Administrative
Agent to continue at all times following such change to have a valid, legal
and
perfected security interest in all the Collateral for the benefit of the Secured
Parties and (ii) promptly notify the Administrative Agent if any material
portion of the Collateral is damaged or destroyed.
(g)
The
Collateral and Guarantee Requirement and the other provisions of this
Section 5.10 need not be satisfied with respect to (i) any Real Property
held by the Borrower or any of its Subsidiaries as a lessee under a lease,
(ii)
any vehicle, (iii) cash, deposit accounts and securities accounts, (iv) any
Equity Interests acquired after the Closing Date (other than Equity Interests
in
the Borrower or, in the case of any person which is a Subsidiary, Equity
Interests in such person issued or acquired after such person became a
Subsidiary) in accordance with this Agreement if, and to the extent that, and
for so long as (A) such Equity Interests constitute less than 100% of all
applicable Equity Interests of such person and the person holding the remainder
of such Equity Interests are not Affiliates, (B) doing so would violate
applicable law or a contractual obligation binding on such Equity Interests
and
(C) with respect to contractual obligations, such obligation existed at the
time
of the acquisition thereof and was not created or made binding on such Equity
Interests in contemplation of or in connection with the acquisition of such
Subsidiary, (v) any assets acquired after the Closing Date, to the extent that,
and for so long as, taking such actions would violate an enforceable contractual
obligation binding on such assets that existed at the time of the acquisition
thereof and was not created or made binding on such assets in contemplation
or
in connection with the acquisition of such assets (except in the case of assets
acquired with Indebtedness permitted pursuant to Section 6.01(i) that is
secured by a Permitted Lien) or (vi) those assets as to which the Administrative
Agent shall reasonably determine that the costs of obtaining or perfecting
such
a security interest are excessive in relation to the value of the security
to be
afforded thereby;
provided
,
that,
upon the reasonable request of the Administrative Agent, the Borrower shall,
and
shall cause any applicable Subsidiary to, use commercially reasonable efforts
to
have waived or eliminated any contractual obligation of the types described
in
clauses (iv) and (v) above.
SECTION
5.11.
Rating
.
Exercise commercially reasonable efforts to maintain corporate ratings from
each
of Moody’s and S&P for the Term B Loans.
SECTION
5.12.
Compliance
with Material Contracts
.
Perform
and observe all of the terms and conditions of each material agreement to be
performed or observed by it, maintain each such material agreement in full
force
and effect, enforce each such material
agreement
in accordance with its terms, except where the failure to do so, either
individually or in the aggregate, would not be reasonably likely to have
a
Material Adverse Effect.
Negative
Covenants
The
Borrower covenants and agrees with each Lender that, so long as this Agreement
shall remain in effect (other than in respect of contingent indemnification
obligations) and until the Commitments have been terminated and the Obligations
(including principal of and interest on each Loan, all Fees and all other
expenses or amounts payable under any Loan Document) have been paid in full
and
all Letters of Credit and Bankers’ Acceptances have been canceled or have
expired and all amounts drawn or paid thereunder have been reimbursed in full,
unless the Required Lenders shall otherwise consent in writing, the Borrower
will not, and will not permit any of the Material Subsidiaries to:
SECTION
6.01.
Indebtedness
.
Incur,
create, assume or permit to exist any Indebtedness, except:
(a)
Indebtedness
existing on the Closing Date and set forth on Schedule 6.01 and any Permitted
Refinancing Indebtedness incurred to Refinance such Indebtedness (other than
intercompany indebtedness Refinanced with Indebtedness owed to a person not
affiliated with the Borrower or any Subsidiary);
(b)
Indebtedness
created hereunder and under the other Loan Documents and any Permitted
Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c)
Indebtedness
of the Borrower or any Subsidiary pursuant to Swap Agreements;
(d)
Indebtedness
of the Borrower and the Subsidiaries owed to (including obligations in respect
of letters of credit or bank guarantees or similar instruments for the benefit
of) any person providing workers’ compensation, health, disability or other
employee benefits or property, casualty or liability insurance to the Borrower
or any Subsidiary, pursuant to reimbursement or indemnification obligations
to
such person, in each case in the ordinary course of business;
provided
,
that
upon the incurrence of Indebtedness with respect to reimbursement obligations
regarding workers’ compensation claims, such obligations are reimbursed not
later than 30 days following such incurrence;
(e)
Indebtedness
of the Borrower to Holdings or any Subsidiary and of any Subsidiary to Holdings,
the Borrower or any other Subsidiary;
provided
,
that
(i) Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing
to
the Loan Parties shall be subject to Section 6.04(b) and (ii) Indebtedness
of the Borrower to Holdings or any Subsidiary and Indebtedness of any other
Loan
Party to Holdings or any Subsidiary that is not a Subsidiary Loan Party (the
“
Subordinated
Intercompany Debt
”)
shall
be subordinated to the Obligations on terms reasonably satisfactory to the
Administrative Agent;
(f)
Indebtedness
of the Borrower and the Subsidiaries in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and completion guarantees and similar obligations,
in
each case provided in the ordinary course of business, including those incurred
to secure health, safety and environmental obligations in the ordinary course
of
business;
(g)
Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course of business or other cash management services in the ordinary course
of
business;
provided
,
that
(x) such Indebtedness (other than credit or purchase cards) is extinguished
within ten Business Days of notification to the Borrower of its incurrence
and
(y) such Indebtedness in respect of credit or purchase cards is extinguished
within 60 days from its incurrence;
(h)
(i)
Indebtedness of a Subsidiary acquired after the Closing Date or an entity merged
into or consolidated with the Borrower or any Subsidiary after the Closing
Date
and Indebtedness assumed in connection with the acquisition of assets, which
Indebtedness in each case exists at the time of such acquisition, merger or
consolidation and is not created in contemplation of such event and where such
acquisition, merger or consolidation is permitted by this Agreement and (ii)
any
Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
provided
,
(A) no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, and (B) immediately after giving effect to such acquisition,
merger or consolidation, the assumption and incurrence of any Indebtedness
and
any related transactions, the Borrower shall be in Pro Forma
Compliance;
(i)
Capital
Lease Obligations, mortgage financings and purchase money Indebtedness incurred
by the Borrower or any Subsidiary prior to or within 270 days after the
acquisition, lease or improvement of the respective asset permitted under this
Agreement in order to finance such acquisition or improvement, and any Permitted
Refinancing Indebtedness in respect thereof, in an aggregate principal amount
that at the time of, and after giving effect to, the incurrence thereof,
together with the Remaining Present Value of outstanding leases permitted under
Section 6.03, would not exceed the greater of $85.0 million and 4.0% of
Consolidated Total Assets as of the end of the fiscal quarter immediately prior
to the date of such incurrence for which financial statements have been
delivered pursuant to Section 5.04;
(j)
Capital
Lease Obligations incurred by the Borrower or any Subsidiary in respect of
any
Sale and Lease-Back Transaction that is permitted under Section 6.03 and
any Permitted Refinancing Indebtedness in respect thereof;
(k)
other
Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount
that at the time of, and after giving effect to, the incurrence thereof, would
not exceed the greater of $85.0 million and 4.0% of Consolidated Total Assets
as
of the end of the fiscal quarter immediately prior to the date of such
incurrence for which financial statements have been delivered pursuant to
Section 5.04;
(l)
Indebtedness
of the Borrower pursuant to (i) the Second Lien Notes and senior unsecured
bridge term loans, in an aggregate principal amount that is not in excess of
$750.0 million, (ii) the Senior Subordinated Notes and senior subordinated
bridge term loans in an aggregate principal amount that is not in excess of
$425.0 million, and (iii) any Permitted Refinancing Indebtedness incurred
to Refinance any such Indebtedness;
(m)
Guarantees
(i) by the Subsidiary Loan Parties of the Indebtedness of the Borrower described
in paragraph (1) of this Section 6.01, so long as the Guarantee of the Senior
Subordinated Notes or any Permitted Refinancing Indebtedness in respect thereof
is subordinated substantially on terms as set forth in the Senior Subordinated
Notes Indenture with respect to the Senior Subordinated Notes, and so long
as
any Liens securing the Guarantee of the Second Lien Notes or any Permitted
Refinancing Indebtedness in respect thereof are subject to the Intercreditor
Agreement, (ii) by the Borrower or any Subsidiary Loan Party of any Indebtedness
of the Borrower or any Subsidiary Loan Party expressly permitted to be incurred
under this Agreement, (iii) by the Borrower or any Subsidiary Loan Party of
Indebtedness otherwise permitted hereunder of Holdings or any Subsidiary that
is
not a Subsidiary Loan Party to the extent such Guarantees are permitted by
Section 6.04 (other than Section 6.04(v)), (iv) by any Foreign Subsidiary of
Indebtedness of another Foreign Subsidiary, and (v) by the Borrower of
Indebtedness of Foreign Subsidiaries incurred for working capital purposes
in
the ordinary course of business on ordinary business terms so long as such
Indebtedness is permitted to be incurred under Section 6.01 (s) to the
extent such Guarantees are permitted by 6.04 (other than Section 6.04(v));
provided
,
that
Guarantees by the Borrower or any Subsidiary Loan Party under this
Section 6.01(m) of any other Indebtedness of a person that is subordinated
to other Indebtedness of such person shall be expressly subordinated to the
Obligations to at least the same extent as the Guarantee of the Senior
Subordinated Notes is under the Senior Subordinated Notes
Indenture;
(n)
Indebtedness
arising from agreements of the Borrower or any Subsidiary providing for
indemnification, adjustment of purchase or acquisition price or similar
obligations, in each case, incurred or assumed in connection with the
Transactions and any Permitted Business Acquisition or the disposition of any
business, assets or a Subsidiary not prohibited by this Agreement, other than
Guarantees of Indebtedness incurred by any person acquiring all or any portion
of such business, assets or a Subsidiary for the purpose of financing such
acquisition;
(o)
Indebtedness
in respect of letters of credit, bank guarantees, warehouse receipts or similar
instruments issued to support performance obligations and trade letters of
credit (other than obligations in respect of other Indebtedness) in the ordinary
course of business;
(p)
Indebtedness
of the Borrower and the Subsidiaries supported by a Letter of Credit, in a
principal amount not in excess of the stated amount of such Letter of
Credit;
(q)
Indebtedness
consisting of (i) the financing of insurance premiums or (ii) take-or-pay
obligations contained in supply arrangements, in each case, in the ordinary
course of business;
(r)
(i)
Other Indebtedness incurred by the Borrower or any Subsidiary Loan Party;
provided that (A) at the time of the incurrence of such Indebtedness and after
giving effect thereto, no Default or Event of Default shall have occurred and
be
continuing or would result therefrom, (B) the Borrower and its Subsidiaries
shall be in Pro Forma Compliance after giving effect to the issuance incurrence
or assumption of such Indebtedness and (C) in the case of any such Indebtedness
that is secured, immediately after giving effect to the issuance, incurrence
or
assumption of such Indebtedness, the Total Net First Lien Leverage Ratio on
a
Pro Forma Basis shall not be greater than 3.75:1.00 and (ii) Permitted
Refinancing Indebtedness in respect thereof;
(s)
Indebtedness
of Foreign Subsidiaries;
provided
that the
aggregate amount of Indebtedness incurred under this clause (s), when aggregated
with all other Indebtedness incurred and outstanding pursuant to this clause
(s), shall not exceed the greater of $60.0 million and 10.0% of the consolidated
assets of the Foreign Subsidiaries at the time of such incurrence;
(t)
unsecured
Indebtedness in respect of obligations of the Borrower or any Subsidiary to
pay
the deferred purchase price of goods or services or progress payments in
connection with such goods and services;
provided
,
that
such obligations are incurred in connection with open accounts extended by
suppliers on customary trade terms (which require that all such payments be
made
within 60 days after the incurrence of the related obligations) in the ordinary
course of business and not in connection with the borrowing of money or any
Swap
Agreements;
(u)
Indebtedness
representing deferred compensation to employees of the Borrower or any
Subsidiary incurred in the ordinary course of business;
(v)
Indebtedness
in connection with Permitted Receivables Financings; provided that the proceeds
thereof are applied in accordance with Section 2.11(b);
(w)
Indebtedness
of the Borrower and the Subsidiaries incurred under lines of credit or overdraft
facilities (including, but not limited to, intraday, ACH and purchasing
card/T&E services) extended by one or more financial institutions reasonably
acceptable to the Administrative Agent or one or more of the Lenders and (in
each case) established for the Borrower’s and the Subsidiaries’ ordinary course
of operations (such Indebtedness, the “
Overdraft
Line
”),
which
Indebtedness may be secured as, but only to the extent, provided in Section
6.02(b) and in the Security Documents (it being understood, however, that for
a
period of 30 consecutive days during each fiscal year of the Borrower the
principal amount of Indebtedness under the Overdraft Line shall not exceed
$10.0
million);
(x)
Indebtedness
incurred on behalf of, or representing Guarantees of Indebtedness of, joint
ventures not in excess, at any
one
time outstanding, of the greater of $20.0 million or 5.0% of Consolidated Total
Assets as of the end of the fiscal quarter immediately prior to the date of
such
incurrence for which financial statements have been delivered pursuant to
Section 5.04;
(y)
all
premium (if any), interest (including post-petition interest), fees, expenses,
charges and additional or contingent interest on obligations described in
paragraphs (a) through (x) above;
(z)
Indebtedness
consisting of promissory notes issued by the Borrower or any Subsidiary to
current or former officers, directors and employees, their respective estates,
spouses or former spouses to finance the purchase or redemption of Equity
Interests of Holdings or any Parent Entity permitted by Section 6.06;
and
(aa)
Indebtedness
consisting of obligations of the Borrower or any Subsidiary under deferred
compensation or other similar arrangements incurred by such Person in connection
with the Transactions and Permitted Business Acquisitions or any other
Investment expressly permitted hereunder.
SECTION
6.02.
Liens
.
Create,
incur, assume or permit to exist any Lien on any property or assets (including
stock or other securities of any person, including the Borrower and any
Subsidiary) at the time owned by it or on any income or revenues or rights
in
respect of any thereof, except the following (collectively, “
Permitted
Liens
”):
(a)
Liens
on
property or assets of the Borrower and the Subsidiaries existing on the Closing
Date and set forth on Schedule 6.02(a) or, to the extent not listed in such
Schedule, where such property or assets have a fair market value that does
not
exceed $10.0 million in the aggregate, and any modifications, replacements,
renewals or extensions thereof; provided, that such Liens shall secure only
those obligations that they secure on the Closing Date (and any Permitted
Refinancing Indebtedness in respect of such obligations permitted by Section
6.01(a)) and shall not subsequently apply to any other property or assets of
the
Borrower or any Subsidiary other than (A) after-acquired property that is
affixed or incorporated into the property covered by such Lien, and (B) proceeds
and products thereof;
(b)
any
Lien
created under the Loan Documents (including, without limitation, Liens created
under the Security Documents securing obligations in respect of Swap Agreements
owed to a person that is a Lender or an Affiliate of a Lender at the time of
entry into such Swap Agreements) or permitted in respect of any Mortgaged
Property by the terms of the applicable Mortgage;
provided
,
however
,
in no
event shall the holders of the Indebtedness under the Overdraft Line have the
right to receive proceeds in respect of a claim in excess of $10.0 million
in
the aggregate (plus (i) any accrued and unpaid interest in respect of
Indebtedness incurred by the Borrower and the Subsidiaries under the Overdraft
Line and (ii) any accrued and unpaid fees and expenses owing by the
Borrower and the Subsidiaries under the Overdraft Line) from the enforcement
of
any remedies available to the Secured Parties under all of the Loan
Documents;
(c)
any
Lien
on any property or asset of the Borrower or any Subsidiary securing Indebtedness
or Permitted Refinancing Indebtedness permitted by Section 6.01(h);
provided
,
that
such Lien (i) does not apply to any other property or assets of the Borrower
or
any of the Subsidiaries not securing such Indebtedness at the date of the
acquisition of such property or asset (other than after acquired property
subjected to a Lien securing Indebtedness and other obligations incurred prior
to such date and which Indebtedness and other obligations are permitted
hereunder that require a pledge of after acquired property, it being understood
that such requirement shall not be permitted to apply to any property to which
such requirement would not have applied but for such acquisition), (ii) such
Lien is not created in contemplation of or in connection with such acquisition
and (iii) in the case of a Lien securing Permitted Refinancing Indebtedness,
any
such Lien is permitted, subject to compliance with clause (e) of the
definition of the term “Permitted Refinancing Indebtedness”;
(d)
Liens
for
Taxes, assessments or other governmental charges or levies not yet delinquent
or
that are being contested in compliance with Section 5.03;
(e)
Liens
imposed by law, such as landlord’s, carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, construction or other like Liens arising in the
ordinary course of business and securing obligations that are not overdue by
more than 30 days or that are being contested in good faith by appropriate
proceedings and in respect of which, if applicable, the Borrower or any
Subsidiary shall have set aside on its books reserves in accordance with
GAAP;
(f)
(i)
pledges and deposits and other Liens made in the ordinary course of business
in
compliance with the Federal Employers Liability Act or any other workers’
compensation, unemployment insurance and other social security laws or
regulations and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements in respect of such obligations and
(ii)
pledges and deposits and other Liens securing liability for reimbursement or
indemnification obligations of (including obligations in respect of letters
of
credit or bank guarantees for the benefit of) insurance carriers providing
property, casualty or liability insurance to the Borrower or any
Subsidiary;
(g)
deposits
to secure the performance of bids, trade contracts (other than for
Indebtedness), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance and return of money bonds,
bids, leases, government contracts, trade contracts, agreements with utilities,
and other obligations of a like nature (including letters of credit in lieu
of
any such bonds or to support the issuance thereof) incurred in the ordinary
course of business, including those incurred to secure health, safety and
environmental obligations in the ordinary course of business;
(h)
zoning
restrictions, survey exceptions and such matters as an accurate survey would
disclose, easements, trackage rights, leases (other than Capital Lease
Obligations), licenses, special assessments, rights-of-way, covenants,
conditions, restrictions and declaration on or with respect to the use of Real
Property, servicing agreements, development agreements, site plan
agreements
and other similar encumbrances incurred in the ordinary course of business
and
title defects or irregularities that are of a minor nature and that, in the
aggregate, do not interfere in any material respect with the ordinary conduct
of
the business of the Borrower or any Subsidiary;
(i)
Liens
securing Indebtedness permitted by Section 6.01(i) (limited to the assets
subject to such Indebtedness);
(j)
Liens
arising out of capitalized lease transactions permitted under Section 6.03,
so long as such Liens attach only to the property sold and being leased in
such
transaction and any accessions thereto or proceeds thereof and related
property;
(k)
Liens
securing judgments that do not constitute an Event of Default under Section
7.01(j); provided that such Liens, to the extent that they secure aggregate
amounts of more than $50.0 million, shall be discharged within 60 days of the
creation thereof;
(l)
Liens
disclosed by the title insurance policies delivered on or subsequent to the
Closing Date and pursuant to Section 5.10 and any replacement, extension or
renewal of any such Lien;
provided
,
that
such replacement, extension or renewal Lien shall not cover any property other
than the property that was subject to such Lien prior to such replacement,
extension or renewal;
provided
,
further
,
that
the Indebtedness and other obligations secured by such replacement, extension
or
renewal Lien are permitted by this Agreement;
(m)
any
interest or title of a lessor or sublessor under any leases or subleases entered
into by the Borrower or any Subsidiary in the ordinary course of
business;
(n)
Liens
that are contractual rights of set-off (i) relating to the establishment of
depository relations with banks not given in connection with the issuance of
Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Borrower
or any Subsidiary to permit satisfaction of overdraft or similar obligations
incurred in the ordinary course of business of the Borrower or any Subsidiary
or
(iii) relating to purchase orders and other agreements entered into with
customers of the Borrower or any Subsidiary in the ordinary course of
business;
(o)
Liens
arising solely by virtue of any statutory or common law provision relating
to
banker’s liens, rights of set-off or similar rights;
(p)
Liens
securing obligations in respect of trade-related letters of credit or bank
guarantees permitted under Section 6.01(f), (k) or (o) and covering the
goods (or the documents of title in respect of such goods) financed by such
letters of credit or bank guarantees and the proceeds and products
thereof;
(q)
leases
or
subleases, licenses or sublicenses (including with respect to intellectual
property and software) granted to others in the ordinary course of business
not
interfering in any material respect with the business of the Borrower and its
Subsidiaries, taken as a whole;
(r)
Liens
in
favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of
goods;
(s)
Liens
solely on any cash earnest money deposits made by the Borrower or any of the
Subsidiaries in connection with any letter of intent or purchase agreement
in
respect of any Investment permitted hereunder;
(t)
Liens
with respect to property or assets of any Foreign Subsidiary securing
Indebtedness of a Foreign Subsidiary permitted under
Section 6.01;
(u)
other
Liens with respect to property or assets of the Borrower or any Subsidiary;
provided
that (i)
after giving effect to any such Lien and the incurrence of Indebtedness, if
any,
secured by such Lien is created, incurred, acquired or assumed (or any prior
Indebtedness becomes so secured) on a Pro Forma Basis, the Total Net First
Lien
Leverage Ratio on the last day of the Borrower’s then most recently completed
fiscal quarter for which financial statements are available shall be less than
or equal to 3.75 to 1.00, (ii) at the time of the incurrence of such Lien and
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing or would result therefrom, (iii) the Indebtedness or other
obligations secured by such Lien are otherwise permitted by this Agreement,
and
(iv) to the extent such Liens are pari passu or subordinated to the Liens
granted hereunder, an intercreditor agreement reasonably satisfactory to the
Administrative Agent shall be entered into providing that such new liens will
be
secured equally and ratably with the Liens granted hereunder, or, as applicable,
subordinated to the Liens granted hereunder, in each case, on customary
terms;
(v)
the
prior
rights of consignees and their lenders under consignment arrangements entered
into in the ordinary course of business;
(w)
Liens
arising from precautionary Uniform Commercial Code financing statements or
consignments entered into in connection with any transaction otherwise permitted
under this Agreement;
(x)
Liens
on
Equity Interests in joint ventures securing obligations of such joint venture;
(y)
Liens
on
securities that are the subject of repurchase agreements constituting Permitted
Investments under clause (c) of the definition thereof;
(z)
Liens
in
respect of Permitted Receivables Financings that extend only to the receivables
subject thereto;
(aa)
Liens
on
goods or inventory the purchase, shipment or storage price of which is financed
by a documentary letter of credit, bank guarantee or bankers’ acceptance issued
or created for the account of the Borrower or any Subsidiary in the ordinary
course of business;
provided
,
that
such Lien secures only the obligations of the Borrower or such Subsidiaries
in
respect of such letter of credit or bank guarantee to the extent permitted
under
Section 6.01;
(bb)
Liens
securing insurance premiums financing arrangements,
provided
,
that
such Liens are limited to the applicable unearned insurance premiums;
(cc)
Liens
in
favor of the Borrower or any Subsidiary Loan Party;
provided
that if
any such Lien shall cover any Collateral, the holder of such Lien shall execute
and deliver to the Administrative Agent a subordination agreement in form and
substance reasonably satisfactory to the Administrative Agent;
(dd)
Liens
securing obligations under the Second Lien Note Documents and any Permitted
Refinancing Indebtedness in respect thereof, to the extent such Liens are
subject to the Intercreditor Agreement;
(ee)
Liens
on
not more than $20.0 million of deposits securing Swap Agreements;
and
(ff)
other
Liens with respect to property or assets of the Borrower or any Subsidiary
securing obligations in an aggregate principal amount outstanding at any time
not to exceed $15.0 million.
SECTION
6.03.
Sale
and Lease-Back Transactions
.
Enter
into any arrangement, directly or indirectly, with any person whereby it shall
sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property being sold or transferred (a “
Sale
and Lease-Back Transaction
”);
provided
,
that a
Sale and Lease-Back Transaction shall be permitted (a) with respect to property
(i) owned by the Borrower or any Domestic Subsidiary that is acquired after
the
Closing Date so long as such Sale and Lease-Back Transaction is consummated
within 180 days of the acquisition of such property or (ii) by any Foreign
Subsidiary regardless of when such property was acquired, and (b) with respect
to any property owned by the Borrower or any Domestic Subsidiary, (i) if at
the
time the lease in connection therewith is entered into, and after giving effect
to the entering into of such lease, the Remaining Present Value of such lease,
together with Indebtedness outstanding pursuant to Section 6.01(i) and the
Remaining Present Value of outstanding leases previously entered into under
this
Section 6.03(b), would not exceed the greater of $85.0 million and 4.0% of
Consolidated Total Assets as of the end of the fiscal quarter immediately prior
to the date the lease was entered into for which financial statements have
been
delivered pursuant to Section 5.04 and (ii) if such Sale and Lease-Back
Transaction is of property owned by the Borrower or any Domestic Subsidiary
as
of the Closing Date, the Net Proceeds therefrom are used to prepay the Term
Loans to the extent required by Section 2.11(b).
SECTION
6.04.
Investments,
Loans and Advances
.
Purchase, hold or acquire (including pursuant to any merger with a person that
is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity
Interests, evidences of Indebtedness or other securities of, make or permit
to
exist any loans or advances to or Guarantees of the obligations of, or make
or
permit to exist any investment or any other interest in (each, an “
Investment
”),
any
other person, except:
(a)
the
Transactions;
(b)
(i)
Investments by the Borrower or any Subsidiary in the Equity Interests of the
Borrower or any Subsidiary; (ii) intercompany loans from the Borrower or any
Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the
Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly
permitted hereunder of the Borrower or any Subsidiary;
provided
,
that
the sum of (A) Investments (valued at the time of the making thereof and without
giving effect to any write-downs or write-offs thereof) made after the Closing
Date by the Loan Parties pursuant to clause (i) in Subsidiaries that are
not Subsidiary Loan Parties,
plus
(B) net
intercompany loans made after the Closing Date to Subsidiaries that are not
Subsidiary Loan Parties pursuant to clause (ii),
plus
(C)
Guarantees of Indebtedness after the Closing Date of Subsidiaries that are
not
Subsidiary Loan Parties pursuant to clause (iii), shall not exceed an
aggregate net amount equal to (x) the greater of (1) $100.0 million and
(2) 4.50% of Consolidated Total Assets as of the end of the fiscal quarter
immediately prior to the date of such Investment for which financial statements
have been delivered pursuant to Section 5.04 (
plus
any
return of capital actually received by the respective investors in respect
of
Investments theretofore made by them pursuant to this paragraph (b));
plus
(y) the portion, if any, of the Cumulative Credit on the date of such
election that the Borrower elects to apply to this Section 6.04(b)(y), such
election to be specified in a written notice of a Responsible Officer of the
Borrower calculating in reasonable detail the amount of Cumulative Credit
immediately prior to such election and the amount thereof elected to be so
applied;
provided
,
further
,
that
intercompany current liabilities incurred in the ordinary course of business
in
connection with the cash management operations of the Borrower and the
Subsidiaries shall not be included in calculating the limitation in this
paragraph at any time.
(c)
Permitted
Investments and Investments that were Permitted Investments when
made;
(d)
Investments
arising out of the receipt by the Borrower or any Subsidiary of noncash
consideration for the sale of assets permitted under
Section 6.05;
(e)
loans
and
advances to officers, directors, employees or consultants of the Borrower or
any
Subsidiary (i) in the ordinary course of business not to exceed the greater
of
$15.0 million and 2.0% of Consolidated Total Assets as of the end of the fiscal
quarter immediately prior to the date of such loan or advance for which
financial statements have been delivered pursuant to Section 5.04, in the
aggregate at any time outstanding (calculated without regard to write downs
or
write offs thereof), (ii) in respect of payroll payments and expenses in the
ordinary course of business and (iii) in connection with such person’s purchase
of Equity Interests of Holdings (or any direct or indirect parent of Holdings)
solely to the extent that the amount of such loans and advances shall be
contributed to the Borrower in cash as common equity;
(f)
accounts
receivable, security deposits and prepayments arising and trade credit granted
in the ordinary course of business and any assets or securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss
and
any prepayments and other credits to suppliers made in the ordinary course
of
business;
(g)
Swap
Agreements;
(h)
Investments
existing on, or contractually committed as of, the Closing Date and set forth
on
Schedule 6.04
and any
extensions, renewals or reinvestments thereof, so long as the aggregate amount
of all Investments pursuant to this clause (h) is not increased at any time
above the amount of such Investment existing on the Closing Date;
(i)
Investments
resulting from pledges and deposits under Sections 6.02(f), (g), (k), (r),
(s), and (u);
(j)
other
Investments by the Borrower or any Subsidiary in an aggregate amount (valued
at
the time of the making thereof, and without giving effect to any write-downs
or
write-offs thereof) not to exceed (i) the greater of $100.0 million and 4.50%
of
Consolidated Total Assets as of the end of the fiscal quarter immediately prior
to the date of such incurrence for which financial statements have been
delivered pursuant to Section 5.04 (
plus
any
returns of capital actually received by the respective investor in respect
of
investments theretofore made by it pursuant to this paragraph (j))
plus
(ii) the
portion, if any, of the Cumulative Credit on the date of such election that
the
Borrower elects to apply to this Section 6.04(j)(ii), such election to be
specified in a written notice of a Responsible Officer of the Borrower
calculating in reasonable detail the amount of Cumulative Credit immediately
prior to such election and the amount thereof elected to be so
applied;
(k)
Investments
constituting Permitted Business Acquisitions;
(l)
intercompany
loans between Foreign Subsidiaries and Guarantees by Foreign Subsidiaries
permitted by Section 6.01(m);
(m)
Investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with or judgments against, customers and
suppliers, in each case in the ordinary course of business or Investments
acquired by the Borrower as a result of a foreclosure by the Borrower or any
of
the Subsidiaries with respect to any secured Investments or other transfer
of
title with respect to any secured Investment in default;
(n)
Investments
of a Subsidiary acquired after the Closing Date or of an entity merged into
the
Borrower or merged into or consolidated with a Subsidiary after the Closing
Date, in each case, to the extent permitted under this Section 6.04 and, in
the
case of any merger or consolidation, in accordance with Section 6.05 to the
extent that such Investments were not made in contemplation of or in connection
with such acquisition, merger or consolidation and were in existence on the
date
of such acquisition, merger or consolidation;
(o)
acquisitions
by the Borrower of obligations of one or more officers or other employees of
Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection
with
such officer’s or employee’s acquisition of Equity Interests of Holdings or
any
Parent
Entity, so long as no cash is actually advanced by the Borrower or any of the
Subsidiaries to such officers or employees in connection with the acquisition
of
any such obligations;
(p)
Guarantees
by the Borrower or any Subsidiary of operating leases (other than Capital Lease
Obligations) or of other obligations that do not constitute Indebtedness, in
each case entered into by the Borrower or any Subsidiary in the ordinary course
of business;
(q)
Investments
to the extent that payment for such Investments is made with Equity Interests
of
Holdings (or any direct or indirect parent of Holdings);
(r)
Investments
in the equity interests of one or more newly formed persons that are received
in
consideration of the contribution by Holdings, the Borrower or the applicable
Subsidiary Loan Party of assets (including Equity Interests and cash) to such
person or persons;
provided
,
that
(i) the fair market value of such assets, determined on an arms’-length basis,
so contributed pursuant to this paragraph (r) shall not in the aggregate exceed
$20.0 million and (ii) in respect of each such contribution, a Responsible
Officer of the Borrower shall certify, in a form to be agreed upon by the
Borrower and the Administrative Agent (x) after giving effect to such
contribution, no Default or Event of Default shall have occurred and be
continuing, (y) the fair market value of the assets so contributed and (z)
that
the requirements of paragraph (i) of this proviso remain satisfied;
(s)
Investments
consisting of the redemption, purchase, repurchase or retirement of any Equity
Interests permitted under Section 6.06;
(t)
Investments
in the ordinary course of business consisting of Uniform Commercial Code Article
3 endorsements for collection or deposit and Uniform Commercial Code Article
4
customary trade arrangements with customers consistent with past practices;
(u)
Investments
in Foreign Subsidiaries not to exceed the greater of $20.0 million and 2.0%
of
Consolidated Total Assets as of the end of the fiscal quarter immediately prior
to the date of such Investment for which financial statements have been
delivered pursuant to Section 5.04, in the aggregate, as valued at the fair
market value of such Investment at the time such Investment is
made;
(v)
Guarantees
permitted under Section 6.01 (except to the extent such Guarantee is expressly
subject to Section 6.04);
(w)
advances
in the form of a prepayment of expenses, so long as such expenses are being
paid
in accordance with customary trade terms of the Borrower or such
Subsidiary;
(x)
Investments
by Borrower and its Subsidiaries, including loans to any direct or indirect
parent of the Borrower, if the Borrower or any other Subsidiary would otherwise
be permitted to make a dividend or distribution in such amount (provided
that
the
amount of any such investment shall also be deemed to be a distribution under
the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y)
Investments
arising as a result of Permitted Receivables Financings;
(z)
Investments
received substantially contemporaneously in exchange for Equity Interests of
any
Parent Entity;
provided
that
such Investments are not included in any determination of the Cumulative Credit;
(aa)
Investments
in joint ventures not in excess of the greater of $20.0 million and 2.0% of
Consolidated Total Assets as of the end of the fiscal quarter immediately prior
to the date of such Investment for which financial statements have been
delivered pursuant to Section 5.04, in the aggregate; and
(bb)
Investments
in a joint venture between Borrower and Covalence Plastics.
The
amount of Investments that may be made at any time pursuant to Section 6.04(b)
or 6.04(j) (such Sections, the “
Related
Sections
”)
may,
at the election of the Borrower, be increased by the amount of Investments
that
could be made at such time under the other Related Section;
provided
that the
amount of each such increase in respect of one Related Section shall be treated
as having been used under the other Related Section.
SECTION
6.05.
Mergers,
Consolidations, Sales of Assets and Acquisitions
.
Merge
into or consolidate with any other person, or permit any other person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose
of
(in one transaction or in a series of transactions) all or any part of its
assets (whether now owned or hereafter acquired), or issue, sell, transfer
or
otherwise dispose of any Equity Interests of the Borrower or any Subsidiary,
or
purchase, lease or otherwise acquire (in one transaction or a series of
transactions) all or any substantial part of the assets of any other person
or
any division, unit or business of any person, except that this
Section shall not prohibit:
(a)
(i)
the
purchase and sale of inventory in the ordinary course of business by the
Borrower or any Subsidiary, (ii) the acquisition or lease (pursuant to an
operating lease) of any other asset in the ordinary course of business by the
Borrower or any Subsidiary, (iii) the sale of surplus, obsolete or worn out
equipment or other property in the ordinary course of business by the Borrower
or any Subsidiary or (iv) the sale of Permitted Investments in the ordinary
course of business;
(b)
if
at the
time thereof and immediately after giving effect thereto no Event of Default
shall have occurred and be continuing or would result therefrom, (i) the merger
of any Subsidiary into the Borrower in a transaction in which the Borrower
is
the survivor, (ii) the merger or consolidation of any Subsidiary into or with
any Subsidiary Loan Party in a transaction in which the surviving or resulting
entity is a Subsidiary Loan Party and, in the case of each of clauses (i)
and (ii), no person other than the Borrower or Subsidiary Loan Party receives
any consideration, (iii) the merger or consolidation of any Subsidiary that
is
not a Subsidiary Loan Party into or with any other Subsidiary that is not a
Subsidiary Loan Party, (iv) the liquidation or dissolution or change in form
of
entity of any Subsidiary (other than the Borrower) if the Borrower determines
in
good faith that such liquidation,
dissolution
or change in form is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders or (v) any Subsidiary may merge with any other
person in order to effect an Investment permitted pursuant to Section 6.04
so
long as the continuing or surviving person shall be a Subsidiary, which shall
be
a Loan Party if the merging Subsidiary was a Loan Party and which together
with
each of its Subsidiaries shall have complied with the requirements of
Section 5.10;
(c)
sales,
transfers, leases or other dispositions to the Borrower or a Subsidiary (upon
voluntary liquidation or otherwise);
provided
,
that
any sales, transfers, leases or other dispositions by a Loan Party to a
Subsidiary that is not a Subsidiary Loan Party in reliance on this
paragraph (c) shall be made in compliance with Section 6.07 and the
aggregate gross proceeds of any such sales, transfers, leases or other
dispositions plus the aggregate gross proceeds of any or all assets sold,
transferred or leases in reliance on clause (g) below, shall not exceed, in
any
fiscal year of the Borrower, the greater of (x) $110.0 million and (y) 5.0%
of
Consolidated Total Assets as of the end of the fiscal quarter immediately prior
to the date of such sale, transfer, lease or other disposition for which
financial statements have been delivered pursuant to Section 5.04;
(d)
Sale
and
Lease-Back Transactions permitted by Section 6.03;
(e)
Investments
permitted by Section 6.04, Permitted Liens, Dividends permitted by Section
6.06;
(f)
the
sale
of defaulted receivables in the ordinary course of business and not as part
of
an accounts receivables financing transaction;
(g)
sales,
transfers, leases or other dispositions of assets not otherwise permitted by
this Section 6.05 (or required to be included in this clause (g) pursuant
to Section 6.05(c));
provided
,
that
(i) the aggregate gross proceeds (including noncash proceeds) of any or all
assets sold, transferred, leased or otherwise disposed of in reliance upon
this
paragraph (g) shall not exceed, in any fiscal year of the Borrower, the
greater of (x) $110.0 million and (y) 5.0% of Consolidated Total
Assets as of the end of the fiscal quarter immediately prior to the date of
such
incurrence for which financial statements have been delivered pursuant to
Section 5.04, (ii) no Default or Event of Default exists or would result
therefrom (iii) with respect to any such sale, transfer, lease or other
disposition with aggregate gross proceeds (including noncash proceeds) in excess
of $10.0, immediately after giving effect thereto, the Borrower shall be in
Pro
Forma Compliance, and (iv) the Net Proceeds thereof are applied in accordance
with Section 2.11(b);
(h)
Permitted
Business Acquisitions (including any merger or consolidation in order to effect
a Permitted Business Acquisition);
provided
,
that
following any such merger or consolidation (i) involving the Borrower, the
Borrower is the surviving corporation, (ii) involving a Domestic Subsidiary,
the
surviving or resulting entity shall be a Subsidiary Loan Party that is a Wholly
Owned Subsidiary and (iii) involving a Foreign Subsidiary, the surviving or
resulting entity shall be a Wholly Owned Subsidiary;
(i)
leases,
licenses (on a non-exclusive basis with respect to intellectual property),
or
subleases or sublicenses (on a non-exclusive basis with respect to intellectual
property) of any real or personal property in the ordinary course of
business;
(j)
sales,
leases or other dispositions of inventory of the Borrower and its Subsidiaries
determined by the management of the Borrower to be no longer useful or necessary
in the operation of the business of the Borrower or any of the Subsidiaries;
provided, that the Net Proceeds thereof are applied in accordance with Section
2.11(b);
(k)
acquisitions
and purchases made with the proceeds of any Asset Sale pursuant to the first
proviso of paragraph (a) of the definition of “Net Proceeds”;
(l)
the
purchase and sale or other transfer (including by capital contribution) of
Receivables Assets pursuant to Permitted Receivables Financings; provided that
the Net Proceeds thereof are applied in accordance with Section 2.11(b);
and
(m)
any
exchange of assets for services and/or other assets of comparable or greater
value;
provided
,
that
(i) at least 90% of the consideration received by the transferor consists of
assets that will be used in a business or business activity permitted hereunder,
(ii) in the event of a swap with a fair market value in excess of $10.0 million,
the Administrative Agent shall have received a certificate from a Responsible
Officer of the Borrower with respect to such fair market value and (iii) in
the
event of a swap with a fair market value in excess of $20.0 million, such
exchange shall have been approved by at least a majority of the Board of
Directors of Holdings or the Borrower;
provided
,
that
the Net Proceeds, if any, thereof are applied in accordance with
Section 2.11(b); provided, further, that (A) the aggregate gross
consideration (including exchange assets, other noncash consideration and cash
proceeds) of any or all assets exchanged in reliance upon this paragraph (m)
shall not exceed, in any fiscal year of the Borrower, the greater of $110.0
million and 5.0% of Consolidated Total Assets as of the end of the fiscal
quarter immediately prior to the date of such incurrence for which financial
statements have been delivered pursuant to Section 5.04, (B) no Default or
Event
of Default exists or would result therefrom, and (C) with respect to any such
exchange with aggregate gross consideration in excess of $10.0 million,
immediately after giving effect thereto, the Borrower shall be in Pro Forma
Compliance.
Notwithstanding
anything to the contrary contained in Section 6.05 above, (i) no sale,
transfer or other disposition of assets shall be permitted by this
Section 6.05 (other than sales, transfers, leases, licenses or other
dispositions to Loan Parties pursuant to paragraph (c) of this Section
6.05) unless such disposition is for fair market value, (ii) no sale, transfer
or other disposition of assets shall be permitted by paragraph (a) or (d) of
this Section 6.05 unless such disposition is for at least 75% cash consideration
and (iii) no sale, transfer or other disposition of assets in excess of $15.0
million shall be permitted by paragraph (g) of this Section 6.05
unless such disposition is for at least 75% cash consideration;
provided
,
the
provisions of clause (ii) shall not apply to any individual transaction or
series of related transactions involving assets with a fair market value of
less
than $10.0 million or to other transactions involving assets with a fair market
value of not more than the greater of $45.0 million and 10% of Consolidated
Total Assets as of the end of the fiscal quarter immediately prior to the date
of
such
sale, transfer or disposition for which financial statements have been delivered
pursuant to Section 5.04, in the aggregate for all such transactions during
the
term of this Agreement;
provided
further
,
that
for purposes of clause (iii), (a) the amount of any liabilities (as shown
on the Borrower’s or any Subsidiary’s most recent balance sheet or in the notes
thereto) of the Borrower or any Subsidiary of the Borrower (other than
liabilities that are by their terms subordinated to the Obligations) that are
assumed by the transferee of any such assets, (b) any notes or other obligations
or other securities or assets received by the Borrower or such Subsidiary of
the
Borrower from such transferee that are converted by the Borrower or such
Subsidiary of the Borrower into cash within 180 days of the receipt thereof
(to
the extent of the cash received) and (c) any Designated Non-Cash Consideration
received by the Borrower or any of its Subsidiaries in such Asset Sale having
an
aggregate fair market value, taken together with all other Designated Non-Cash
Consideration received pursuant to this clause (c) that is at that time
outstanding, not to exceed $35.0 million at the time of the receipt of such
Designated Non-Cash Consideration (with the fair market value of each item
of
Designated Non-Cash Consideration being measured at the time received and
without giving effect to subsequent changes in value) shall be deemed to be
cash. To the extent any Collateral is disposed of in a transaction expressly
permitted by this Section 6.05 to any Person other than Holdings, the Borrower
or any Subsidiary, such Collateral shall be sold free and clear of the Liens
created by the Loan Documents, and the Administrative Agent shall take, and
shall be authorized by each Lender to take, any actions reasonably requested
by
the Borrower in order to evidence the foregoing.
SECTION
6.06.
Dividends
and Distributions
.
Declare
or pay any dividend or make any other distribution (by reduction of capital
or
otherwise), whether in cash, property, securities or a combination thereof,
with
respect to any of its Equity Interests (other than dividends and distributions
on Equity Interests payable solely by the issuance of additional Equity
Interests (other than Disqualified Stock) of the person paying such dividends
or
distributions) or directly or indirectly redeem, purchase, retire or otherwise
acquire for value (or permit any Subsidiary to purchase or acquire) any of
its
Equity Interests or set aside any amount for any such purpose (other than
through the issuance of additional Equity Interests (other than Disqualified
Stock) of the person redeeming, purchasing, retiring or acquiring such shares);
provided
,
however
,
that:
(a)
any
Subsidiary of the Borrower may declare and pay dividends to, repurchase its
Equity Interests from or make other distributions to the Borrower or to any
Wholly Owned Subsidiary of the Borrower (or, in the case of non-Wholly Owned
Subsidiaries, to the Borrower or any Subsidiary that is a direct or indirect
parent of such Subsidiary and to each other owner of Equity Interests of such
Subsidiary on a
pro
rata
basis
(or more favorable basis from the perspective of the Borrower or such
Subsidiary) based on their relative ownership interests so long as any
repurchase of its Equity Interests from a person that is not the Borrower or
a
Subsidiary is permitted under Section 6.04);
(b)
the
Borrower may declare and pay dividends or make other distributions to Holdings
in respect of (i) overhead, legal, accounting and other professional fees and
expenses of Holdings or any Parent Entity, (ii) fees and expenses related to
any
public offering or private placement of debt or equity securities of Holdings
or
any Parent Entity whether or not consummated, (iii)
franchise
taxes and other fees, taxes and expenses in connection with the maintenance
of
its existence and its (or any Parent Entity’s indirect) ownership of the
Borrower, (iv) payments permitted by Section 6.07(b), (v) the tax liability
to
each relevant jurisdiction in respect of consolidated, combined, unitary or
affiliated returns for the relevant jurisdiction of Holdings (or any Parent
Entity) attributable to the Borrower or its Subsidiaries and (vi) customary
salary, bonus and other benefits payable to, and indemnities provided on behalf
of, officers and employees of Holdings or any Parent Entity, in each case in
order to permit Holdings or any Parent Entity to make such payments;
provided
,
that in
the case of clauses (i), (ii) and (iii), the amount of such dividends and
distributions shall not exceed the portion of any amounts referred to in such
clauses (i), (ii) and (iii) that are allocable to the Borrower and its
Subsidiaries (which shall be 100% for so long as Holdings or such Parent Entity,
as the case may be, owns no assets other than the Equity Interests in the
Borrower, Holdings or another Parent Entity);
(c)
the
Borrower may declare and pay dividends or make other distributions to Holdings
the proceeds of which are used to purchase or redeem the Equity Interests of
Holdings or any Parent Entity (including related stock appreciation rights
or
similar securities) held by then present or former directors, consultants,
officers or employees of Holdings, the Borrower or any of the Subsidiaries
or by
any Plan or shareholders’ agreement then in effect upon such person’s death,
disability, retirement or termination of employment or under the terms of any
such Plan or any other agreement under which such shares of stock or related
rights were issued;
provided
,
that
the aggregate amount of such purchases or redemptions under this
paragraph (c) shall not exceed in any fiscal year $15.0 million (plus the
amount of net proceeds contributed to the Borrower that were (x) received by
Holdings or any Parent Entity during such calendar year from sales of Equity
Interests of Holdings or any Parent Entity of Holdings to directors,
consultants, officers or employees of Holdings, any Parent Entity, the Borrower
or any Subsidiary in connection with permitted employee compensation and
incentive arrangements and (y) of any key-man life insurance policies received
during such calendar year), which, if not used in any year, may be carried
forward to any subsequent calendar year;
(d)
noncash
repurchases of Equity Interests deemed to occur upon exercise of stock options
if such Equity Interests represent a portion of the exercise price of such
options;
(e)
the
Borrower may pay dividends to Holdings in an aggregate amount equal to the
portion, if any, of the Cumulative Credit on such date that the Borrower elects
to apply to this Section 6.06(e), such election to be specified in a written
notice of a Responsible Officer of the Borrower calculating in reasonable detail
the amount of Cumulative Credit immediately prior to such election and the
amount thereof elected to be so applied;
provided
,
that no
Default or Event of Default has occurred and is continuing or would result
therefrom and, after giving effect thereto, that the Borrower and its
Subsidiaries shall be in Pro Forma Compliance;
(f)
the
Borrower may pay dividends on the Closing Date to consummate the Transactions;
(g)
the
Borrower may pay dividends or distributions to allow Holdings or any Parent
Entity to make payments in cash, in lieu of the issuance of fractional shares,
upon the exercise of warrants or upon the conversion or exchange of Equity
Interests of any such person;
(h)
after
a
Qualified IPO, the Borrower may pay dividends and make distributions to, or
repurchase or redeem shares from, its equity holders in an amount equal to
6.0%
per annum of the net proceeds received by the Borrower from any public offering
of Equity Interests of the Borrower or any direct or indirect parent of the
Borrower; and
(i)
the
Borrower may make distributions to Holdings or any Parent Entity to finance
any
Investment permitted to be made pursuant to Section 6.04;
provided
that (A)
such distribution shall be made substantially concurrently with the closing
of
such Investment and (B) such parent shall, immediately following the closing
thereof, cause (1) all property acquired (whether assets or Equity Interests)
to
be contributed to the Borrower or a Subsidiary or (2) the merger (to the extent
permitted in Section 6.05) of the Person formed or acquired into the Borrower
or
a Subsidiary in order to consummate such Permitted Business Acquisition or
Investment, in each case, in accordance with the requirements of Section
5.10.
SECTION
6.07.
Transactions
with Affiliates
.
xxx)
Sell
or transfer any property or assets to, or purchase or acquire any property
or
assets from, or otherwise engage in any other transaction with, any of its
Affiliates or any known direct or indirect holder of 10% or more of any class
of
capital stock of Holdings or the Borrower in a transaction involving aggregate
consideration in excess of $5.0 million, unless such transaction is (i)
otherwise permitted (or required) under this Agreement or (ii) upon terms no
less favorable to the Borrower or such Subsidiary, as applicable, than would
be
obtained in a comparable arm’s-length transaction with a person that is not an
Affiliate.
(b)
The
foregoing paragraph (a) shall not prohibit, to the extent otherwise
permitted under this Agreement,
(i)
any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, equity
purchase agreements, stock options and stock ownership plans approved by the
Board of Directors of Holdings or of the Borrower,
(ii)
loans
or
advances to employees or consultants of Holdings (or any direct or indirect
parent of Holdings), the Borrower or any of the Subsidiaries in accordance
with
Section 6.04(e),
(iii)
transactions
among the Borrower or any Subsidiary or any entity that becomes a Loan Party
as
a result of such transaction (including via merger or consolidation in which
a
Subsidiary is the surviving entity) not prohibited by this
Agreement,
(iv)
the
payment of fees, reasonable out-of-pocket costs and indemnities to directors,
officers, consultants and employees of Holdings, any Parent Entity, the Borrower
and the Subsidiaries in the ordinary course of business
(limited,
in the case of any Parent Entity, to the portion of such fees and expenses
that
are allocable to the Borrower and its Subsidiaries (which shall be 100% for
so
long as Holdings or such Parent Entity, as the case may be, owns no assets
other
than the Equity Interests in the Borrower, Holdings or another Parent Entity
and
assets incidental to the ownership of the Borrower and its
Subsidiaries))
,
(v)
subject
to the limitations set forth in Section 6.07(b)(xiv), if applicable,
transactions pursuant to the Transaction Documents and permitted agreements
in
existence on the Closing Date and set forth on
Schedule 6.07
or any
amendment thereto to the extent such amendment is not adverse to the Lenders
in
any material respect and other transactions, agreements and arrangements
described on Schedule 6.07 and any amendment thereto or similar transactions,
agreements or arrangements entered into by the Borrower or any of its
Subsidiaries to the extent such amendment is not adverse to the Lenders in
any
material respect.
(vi)
(A)
any
employment agreements entered into by the Borrower or any of the Subsidiaries
in
the ordinary course of business, (B) any subscription agreement or similar
agreement pertaining to the repurchase of Equity Interests pursuant to put/call
rights or similar rights with employees, officers or directors, and (C) any
employee compensation, benefit plan or arrangement, any health, disability
or
similar insurance plan which covers employees, and any reasonable employment
contract and transactions pursuant thereto,
(vii)
dividends,
redemptions and repurchases permitted under Section 6.06, including
payments to Holdings (and any Parent Entity),
(viii)
any
purchase by Holdings of the equity capital of the Borrower;
provided
,
that
any Equity Interests of the Borrower purchased by Holdings shall be pledged
to
the Administrative Agent on behalf of the Lenders pursuant to the Collateral
Agreement,
(ix)
payments
by the Borrower or any of the Subsidiaries to the Funds or any Fund Affiliates
made for any financial advisory, financing, underwriting or placement services
or in respect of other investment banking activities, including in connection
with acquisitions or divestitures, which payments are approved by the majority
of the Board of Directors of the Borrower, or a majority of disinterested
members of the Board of Directors of the Borrower, in good faith,
(x)
transactions
with Wholly Owned Subsidiaries for the purchase or sale of goods, products,
parts and services entered into in the ordinary course of business in a manner
consistent with past practice,
(xi)
any
transaction in respect of which the Borrower delivers to the Administrative
Agent (for delivery to the Lenders) a letter addressed to the Board of Directors
of the Borrower from an accounting, appraisal or investment banking firm, in
each case of
nationally
recognized standing that is (A) in the good faith determination of the Borrower
qualified to render such letter and (B) reasonably satisfactory to the
Administrative Agent, which letter states that such transaction is on terms
that
are no less favorable to the Borrower or such Subsidiary, as applicable, than
would be obtained in a comparable arm’s-length transaction with a person that is
not an Affiliate,
(xii)
subject
to paragraph (xiv) below, the payment of all fees, expenses, bonuses and awards
related to the Transactions contemplated by the Second Lien Notes Offering
Memorandum, including fees to the Funds or any Fund Affiliates and as set forth
on Schedule 6.07,
(xiii)
transactions
with joint ventures for the purchase or sale of goods, equipment and services
entered into in the ordinary course of business and in a manner consistent
with
past practice,
(xiv)
any
agreement to pay, and the payment of, monitoring, management, transaction,
advisory or similar fees payable to the Funds or any Fund Affiliates (A) in
an
aggregate amount in any fiscal year not to exceed the sum of (1) the greater
of
$3.0 million and 2.00% of EBITDA for such fiscal year, plus reasonable out
of
pocket costs and expenses in connection therewith and unpaid amounts accrued
for
prior periods; plus (2) any deferred fees (to the extent such fees were within
such amount in clause (A) (1) above originally), plus (B) 2.00% of the value
of
transactions with respect to which the Fund or any Fund Affiliate provides
any
transaction, advisory or other services, plus (C) a transaction fee of not
more
than $20.0 million to be paid to the Fund or a Fund Affiliate in connection
with
the Transactions on the Closing Date, plus (D) so long as no Event of Default
has occurred and is continuing, in the event of a Qualified IPO, the present
value of all future amounts payable pursuant to any agreement referred to in
clause (A) (1) above in connection with the termination of such agreement with
the Fund and its Fund Affiliates (the “
Fund
Termination Fee
”);
provided
,
that if
any such payment pursuant to clause (D) is not permitted to be paid as a result
of an Event of Default, such payment shall accrue and may be payable when no
Events of Default are continuing to the extent that no further Event of Default
would result therefrom,
(xv)
the
issuance, sale, transfer of Equity Interests of Borrower to Holdings and capital
contributions by Holdings to Borrower,
(xvi)
without
duplication of any amounts otherwise paid with respect to taxes, payments by
Holdings (and any Parent Entity), the Borrower and the Subsidiaries pursuant
to
tax sharing agreements among Holdings (and any such parent Entity), the Borrower
and the Subsidiaries on customary terms that require each party to make payments
when such taxes are due or refunds received of amounts equal to the income
tax
liabilities and refunds generated by each such party calculated on a separate
return basis and payments to the party generating tax benefits and credits
of
amounts equal to the value of such tax benefits and credits made available
to
the group by such party,
or
(xvii)
transactions
pursuant to any Permitted Receivables Financing.
SECTION
6.08.
Business
of the Borrower and the Subsidiaries
.
Notwithstanding any other provisions hereof, engage at any time in any business
or business activity other than any business or business activity conducted
by
any of them on the Closing Date and any business or business activities
incidental or related thereto, or any business or activity that is reasonably
similar or complementary thereto or a reasonable extension, development or
expansion thereof or ancillary thereto, and in the case of a Special Purpose
Receivables Subsidiary, Permitted Receivables Financings.
SECTION
6.09.
Limitation
on Modifications of Indebtedness; Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc.
xxxi)
Amend
or modify in any manner materially adverse to the Lenders, or grant any waiver
or release under or terminate in any manner (if such granting or termination
shall be materially adverse to the Lenders), the articles or certificate of
incorporation, by-laws, limited liability company operating agreement,
partnership agreement or other organizational documents of the Borrower or any
of the Subsidiaries or the Acquisition Agreement.
(b)
(a)
Make,
or agree or offer to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect
of
principal of or interest on the loans under the Second Lien Notes, Senior
Subordinated Notes or any Permitted Refinancing Indebtedness in respect of
any
of the foregoing or any preferred Equity Interests or any Disqualified Stock
(“
Junior
Financing
”),
or
any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination
in
respect of any Junior Financing except for (A) Refinancings permitted by
Section 6.01(l) or (r)
1
,
(B)
payments of regularly scheduled interest, and, to the extent this Agreement
is
then in effect, principal on the scheduled maturity date of any Junior
Financing, (C) payments or distributions in respect of all or any portion of
the
Junior Financing with the proceeds contributed to the Borrower by Holdings
from
the issuance, sale or exchange by Holdings (or any direct or indirect parent
of
Holdings) of Equity Interests made within eighteen months prior thereto, (D)
the
conversion of any Junior Financing to Equity Interests of Holdings or any of
its
direct or indirect parents; and (E) so long as no Default or Event of Default
has occurred and is continuing or would result therefrom and after giving effect
to such payment or distribution the Borrower would be in Pro Forma Compliance,
payments or distributions in respect of Junior Financings prior to their
scheduled maturity made, in an aggregate amount, not to exceed the sum of (x)
$50.0 million and (y) the Cumulative Credit; or
(b)
Amend
or
modify, or permit the amendment or modification of, any provision of Junior
Financing, any Permitted Receivables Document, or any agreement, document or
instrument evidencing or relating thereto, other than amendments or
modifications that (A) are not in any manner materially adverse to Lenders
and that do not affect the subordination or payment provisions thereof (if
any)
in a manner adverse to the Lenders and (B) otherwise comply with the
definition of “Permitted Refinancing Indebtedness”.
1
|
Will
need to be modified if the Bridge is funded on the Closing
Date.
|
(c)
Permit
any Material Subsidiary to enter into any agreement or instrument that by its
terms restricts (i) the payment of dividends or distributions or the making
of
cash advances to the Borrower or any Subsidiary that is a direct or indirect
parent of such Subsidiary or (ii) the granting of Liens by the Borrower or
such
Material Subsidiary pursuant to the Security Documents, in each case other
than
those arising under any Loan Document, except, in each case, restrictions
existing by reason of:
1.
restrictions
imposed by applicable law;
2.
contractual
encumbrances or restrictions in effect on the Closing Date under Indebtedness
existing on the Closing Date and set forth on
Schedule 6.01
,
the
Second Lien Notes, the Senior Subordinated Notes or any agreements related
to
any Permitted Refinancing Indebtedness in respect of any such Indebtedness
that
does not expand the scope of any such encumbrance or restriction;
3.
any
restriction on a Subsidiary imposed pursuant to an agreement entered into for
the sale or disposition of the Equity Interests or assets of a Subsidiary
pending the closing of such sale or disposition;
4.
customary
provisions in joint venture agreements and other similar agreements applicable
to joint ventures entered into in the ordinary course of business;
5.
any
restrictions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement to the extent that such restrictions apply only to the
property or assets securing such Indebtedness;
6.
any
restrictions imposed by any agreement relating to Indebtedness incurred pursuant
to section 6.01(r), to the extent such restrictions are not more restrictive,
taken as a whole, than the restrictions contained in the Senior Subordinated
Note Documents and Second Lien Note Documents;
7.
customary
provisions contained in leases or licenses of intellectual property and other
similar agreements entered into in the ordinary course of business;
8.
customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest;
9.
customary
provisions restricting assignment of any agreement entered into in the ordinary
course of business;
10.
customary
restrictions and conditions contained in any agreement relating to the sale,
transfer, lease or other disposition of any asset permitted under Section 6.05
pending the consummation of such sale, transfer, lease or other disposition;
11.
customary
restrictions and conditions contained in the document relating to any Lien,
so
long as (1) such Lien is a Permitted Lien and such restrictions or conditions
relate only to the specific asset subject to such Lien, and (2) such
restrictions and
conditions
are not created for the purpose of avoiding the restrictions imposed by this
Section 6.09;
12.
customary
net worth provisions contained in Real Property leases entered into by
Subsidiaries of the Borrower, so long as the Borrower has determined in good
faith that such net worth provisions would not reasonably be expected to impair
the ability of the Borrower and its Subsidiaries to meet their ongoing
obligations;
13.
any
agreement in effect at the time such subsidiary becomes a Subsidiary, so long
as
such agreement was not entered into in contemplation of such person becoming
a
Subsidiary other than Subsidiaries of such new Subsidiary;
14.
restrictions
in agreements representing Indebtedness permitted under Section 6.01 of a
Subsidiary of the Borrower that is not a Subsidiary Loan Party;
15.
customary
restrictions on leases, subleases, licenses or Equity Interests or asset sale
agreements otherwise permitted hereby as long as such restrictions relate to
the
Equity Interests and assets subject thereto;
16.
restrictions
on cash or other deposits imposed by customers under contracts entered into
in
the ordinary course of business;
17.
restrictions
contained in any Permitted Receivables Document with respect to any Special
Purpose Receivables Subsidiary; or
18.
any
encumbrances or restrictions of the type referred to in Sections 6.09(c)(i)
and
6.09(c)(ii) above imposed by any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
of
the contracts, instruments or obligations referred to in clauses (A) through
(Q)
above; provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Company, no more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividend
or
other payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or
refinancing.
SECTION
6.10.
[Intentionally
Omitted]
SECTION
6.11.
Total
Net First Lien Leverage Ratio
(a)
.
Commencing with the fiscal quarter ending September 30, 2006, permit the
Total Net First Lien Leverage Ratio as of the end of any fiscal quarter to
exceed 4.00 to 1.00.
SECTION
6.12.
[Intentionally
Omitted]
SECTION
6.13.
No
Other “Designated Senior Debt”
.
Designate, or permit the designation of, any Indebtedness as “Designated Senior
Debt” or any other similar term for the purpose of the definition of the same or
the subordination provisions contained in the Senior Subordinated Notes
Indenture or any indenture governing other Indebtedness permitted to be incurred
hereunder that are senior
subordinated
notes or any Permitted Refinancing thereof or of the Senior Subordinated
Notes
other than (a) the Obligations under this Agreement and the other Loan
Documents, and (b) the Second Lien Notes and senior unsecured bridge term
loans.
SECTION
6.14.
Fiscal
Year; Accounting
.
In the
case of the Borrower, permit its fiscal year to end on any date other than
the
Saturday nearest the end of the calendar year without prior notice to the
Administrative Agent given concurrently with
any
required notice to the SEC.
SECTION
6.15.
Qualified
CFC Holding Companies
.
Permit
any Qualified CFC Holding Company to (a) create, incur or assume any
Indebtedness or other liability, or create, incur, assume or suffer to exist
any
Lien on, or sell, transfer or otherwise dispose of, other than in a transaction
permitted under Section 6.05, any of the Equity Interests of a Foreign
Subsidiary held by such Qualified CFC Holding Company, or any other assets,
or
(b) engage in any business or activity or acquire or hold any assets other
than
the Equity Interests of one or more Foreign Subsidiaries of the Borrower and/or
one or more other Qualified CFC Holding Companies and the receipt and
distribution of dividends and distributions in respect thereof.
ARTICLE
VIA
Holdings
Covenants
Holdings
covenants and agrees with each Lender that, so long as this Agreement shall
remain in effect (other than in respect of contingent indemnification
obligations) and until the Commitments have been terminated and the Obligations
(including principal of and interest on each Loan, all Fees and all other
expenses or amounts payable under any Loan Document) have been paid in full
and
all Letters of Credit have been canceled or have expired and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, (a) Holdings will not create, incur, assume or
permit to exist any Lien
(other
than Liens of a type described in Section 6.02(d), (e) or (k))
on
any of
the Equity Interests issued by the Borrower other than the Liens created under
the Loan Documents, (b) Holdings shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence;
provided
,
that so
long as no Default exists or would result therefrom, Holdings may merge with
any
other person, and (c) Holdings shall at all times own directly 100% of the
Equity Interests of the Borrower and shall not sell, transfer or otherwise
dispose of the Equity Interests in the Borrower.
ARTICLE
VII
Events
of Default
SECTION
7.01.
Events
of Default
.
In case
of the happening of any of the following events (each, an “
Event
of Default
”):
(a)
any
representation or warranty made or deemed made by Holdings, the Borrower or
any
other Loan Party herein or in
any
other Loan Document or any certificate or document delivered pursuant hereto
or
thereto shall prove to have been false or misleading in any material respect
when so made or deemed made;
(b)
default
shall be made in the payment of any principal of any Loan when and as the same
shall become due and payable, whether at the due date thereof or at a date
fixed
for prepayment thereof or by acceleration thereof or otherwise;
(c)
default
shall be made in the payment of any interest on any Loan or the reimbursement
with respect to any L/C Disbursement or in the payment of any Fee or any other
amount (other than an amount referred to in (b) above) due under any Loan
Document, when and as the same shall become due and payable, and such default
shall continue unremedied for a period of five Business Days;
(d)
default
shall be made in the due observance or performance by Holdings, the Borrower
or
any of the Subsidiaries of any covenant, condition or agreement contained in
Section 2.05(c), 5.01(a), 5.05(a) or 5.08 or in Article VI or
VIA;
(e)
default
shall be made in the due observance or performance by Holdings, the Borrower
or
any of the Subsidiaries of any covenant, condition or agreement contained in
any
Loan Document (other than those specified in paragraphs (b), (c) and (d)
above) and such default shall continue unremedied for a period of 30 days (or
60
days if such default results solely from a Foreign Subsidiary’s failure to duly
observe or perform any such covenant, condition or agreement) after notice
thereof from the Administrative Agent to the Borrower;
(f)
(i)
any
event or condition occurs that (A) results in any Material Indebtedness becoming
due prior to its scheduled maturity or (B) enables or permits (with all
applicable grace periods having expired) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity or (ii)
Holdings, the Borrower or any of the Subsidiaries shall fail to pay the
principal of any Material Indebtedness at the stated final maturity thereof;
provided that this clause (f) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness if such sale or transfer is permitted
hereunder and under the documents providing for such Indebtedness;
(g)
there
shall have occurred a Change in Control;
(h)
an
involuntary proceeding shall be commenced or an involuntary petition shall
be
filed in a court of competent jurisdiction seeking (i) relief in respect of
Holdings, the Borrower or any of the Subsidiaries, or of a substantial part
of
the property or assets of Holdings, the Borrower or any Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended, or any
other federal, state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any of the
Subsidiaries or for a
substantial
part of the property or assets of Holdings, the Borrower or any of the
Subsidiaries or (iii) the winding-up or liquidation of Holdings, the Borrower
or
any Subsidiary (except, in the case of any Subsidiary, in a transaction
permitted by Section 6.05); and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of
the
foregoing shall be entered;
(i)
Holdings,
the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or
file any petition seeking relief under Title 11 of the United States Code,
as
now constituted or hereafter amended, or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in paragraph (h) above,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Holdings, the Borrower or
any
of the Subsidiaries or for a substantial part of the property or assets of
Holdings, the Borrower or any Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v)
make a general assignment for the benefit of creditors or (vi) become unable
or
admit in writing its inability or fail generally to pay its debts as they become
due;
(j)
the
failure by Holdings, the Borrower or any Subsidiary to pay one or more final
judgments aggregating in excess of $20.0 million (to the extent not covered
by
insurance), which judgments are not discharged or effectively waived or stayed
for a period of 45 consecutive days, or any action shall be legally taken by
a
judgment creditor to levy upon assets or properties of Holdings, the Borrower
or
any Subsidiary to enforce any such judgment;
(k)
(i)
a
trustee shall be appointed by a United States district court to administer
any
Plan, (ii) an ERISA Event or ERISA Events shall have occurred with respect
to
any Plan or Multiemployer Plan, (iii) the PBGC shall institute proceedings
(including giving notice of intent thereof) to terminate any Plan or Plans,
(iv)
Holdings, the Borrower or any Subsidiary or any ERISA Affiliate shall have
been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan
is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, (v) Holdings, the Borrower or any Subsidiary shall engage in any
“prohibited transaction” (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan; and in each case in
clauses (i) through (v) above, such event or condition, together with all
other such events or conditions, if any, would reasonably be expected to have
a
Material Adverse Effect; or
(l)
(i)
any
Loan Document shall for any reason be asserted in writing by Holdings, the
Borrower or any Subsidiary not to be a legal, valid and binding obligation
of
any party thereto, (ii) any security interest purported to be created by any
Security Document and to extend to assets that are not immaterial to Holdings,
the Borrower and the Subsidiaries on a consolidated basis shall cease to be,
or
shall be asserted in writing by the Borrower or any other Loan Party not to
be,
a valid and perfected security interest (perfected as or having the priority
required by this Agreement or the relevant Security Document and subject to
such
limitations and restrictions as are set forth herein and therein) in the
securities, assets or properties covered thereby, except to the
extent
that any such loss of perfection or priority results from the limitations of
foreign laws, rules and regulations as they apply to pledges of Equity Interests
in Foreign Subsidiaries or the application thereof, or from the failure of
the
Administrative Agent to maintain possession of certificates actually delivered
to it representing securities pledged under the Collateral Agreement or to
file
Uniform Commercial Code continuation statements or take the actions described
on
Schedule 3.04
and
except to the extent that such loss is covered by a lender’s title insurance
policy and the Administrative Agent shall be reasonably satisfied with the
credit of such insurer, or (iii) the Guarantees pursuant to the Security
Documents by Holdings, the Borrower or the Subsidiary Loan Parties of any of
the
Obligations shall cease to be in full force and effect (other than in accordance
with the terms thereof), or shall be asserted in writing by Holdings or the
Borrower or any Subsidiary Loan Party not to be in effect or not to be legal,
valid and binding obligations; or
(m)
(i) the
Obligations shall fail to constitute “Senior Debt” (or the equivalent thereof)
and “Designated Senior Debt” (or the equivalent thereof) under the Senior
Subordinated Notes Indenture and under the documentation governing any other
Indebtedness permitted herein constituting subordinated Indebtedness or any
Permitted Refinancing Indebtedness in respect of the Senior Subordinated Notes
or such other Indebtedness permitted herein constituting subordinated
Indebtedness, or (ii) the subordination provisions thereunder shall be
invalidated or otherwise cease, or shall be asserted in writing by Holdings,
the
Borrower or any Subsidiary Loan Party to be invalid or to cease to be legal,
valid and binding obligations of the parties thereto, enforceable in accordance
with their terms;
then,
and
in every such event (other than an event with respect to the Borrower described
in paragraph (h) or (i) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate forthwith
the
Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared
to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which
are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding and (iii) if the Loans
have
been declared due and payable pursuant to clause (ii) above, demand cash
collateral pursuant to Section 2.05(j) and (iv) exercise all rights and
remedies granted to it under any Loan Document and all its rights under any
other applicable law or in equity; and in any event with respect to the Borrower
described in paragraph (h) or (i) above, the Commitments shall
automatically terminate, the principal of the Loans then outstanding, together
with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable and the Administrative Agent shall
be
deemed to have made a demand for cash collateral to the full extent permitted
under Section 2.05(j), without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.
SECTION
7.02.
Exclusion
of Immaterial Subsidiaries
.
Solely
for the purposes of determining whether an Event of Default has occurred under
clause (h), (i) or (l) of Section 7.01, any reference in any such
clause to any Subsidiary shall be deemed not to include any Immaterial
Subsidiary affected by any event or circumstance referred to in any such
clause.
SECTION
7.03.
Right
to Cure
SECTION
7.04.
.
Holdings’
Right to Cure
.
xxxii)
Notwithstanding anything to the contrary contained in Section 7.01, in the
event that the Borrower fails to comply with the requirements of the Financial
Performance Covenant, until the expiration of the 10th day subsequent to the
date the certificate calculating such Financial Performance Covenant is required
to be delivered pursuant to Section 5.04(c), Holdings shall have the right
to issue Permitted Cure Securities for cash or otherwise receive cash
contributions to the capital of Holdings, and, in each case, to contribute
any
such cash to the capital of the Borrower (collectively, the “
Cure
Right
”),
and
upon the receipt by the Borrower of such cash (the “
Cure
Amount
”)
pursuant to the exercise by Holdings of such Cure Right such Financial
Performance Covenant shall be recalculated giving effect to the following pro
forma adjustment:
(i)
EBITDA
shall be increased with respect to such applicable quarter and any four-quarter
period that contains such quarter, solely for the purpose of measuring the
Financial Performance Covenant and not for any other purpose under this
Agreement, by an amount equal to the Cure Amount; and
(ii)
If,
after
giving effect to the foregoing pro forma adjustment, the Borrower shall then
be
in compliance with the requirements of the Financial Performance Covenant,
the
Borrower shall be deemed to have satisfied the requirements of the Financial
Performance Covenant as of the relevant date of determination with the same
effect as though there had been no failure to comply therewith at such date,
and
the applicable breach or default of the Financial Performance Covenant that
had
occurred shall be deemed cured for this purposes of the Agreement.
(b)
Notwithstanding
anything herein to the contrary, (i) in each four-fiscal-quarter period there
shall be at least one fiscal quarter in which the Cure Right is not exercised
and (ii) for purposes of this Section 7.03, the Cure Amount shall be no
greater than the amount required for purposes of complying with the Financial
Performance Covenant.
The
Agents
SECTION
8.01.
Appointment
.
(
b)
Each
Lender (in its capacities as a Lender and the Swingline Lender (if applicable)
and on behalf of itself and its Affiliates as potential counterparties to Swap
Agreements) and each Issuing Bank (in such capacities and on behalf of itself
and its Affiliates as potential counterparties to Swap Agreements) hereby
irrevocably designates and appoints the Administrative Agent as the agent of
such Lender under this Agreement and the other Loan Documents, including as
the
Administrative Agent for such Lender and the other Secured Parties under the
Security Documents, and each such Lender irrevocably authorizes the
Administrative Agent,
in
such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the
terms
of this Agreement and the other Loan Documents, together with such other
powers
as are reasonably incidental thereto. In addition, to the extent required
under
the laws of any jurisdiction other than the United States, each of the Lenders
and the Issuing Banks hereby grants to the Administrative Agent any required
powers of attorney to execute any Security Document governed by the laws
of such
jurisdiction on such Lender’s or Issuing Bank’s behalf. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Administrative
Agent
shall not have any duties or responsibilities, except those expressly set
forth
herein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read
into this Agreement or any other Loan Document or otherwise exist against
the
Administrative Agent. To the extent required by any applicable law, the
Administrative Agent may withhold from any payment to any Lender an amount
equivalent to any applicable withholding Tax. If the Internal Revenue Service
or
any other Governmental Authority asserts a claim that the Administrative
Agent
did not properly withhold Tax from amounts paid to or for the account of
any
Lender because the appropriate form was not delivered or was not properly
executed or because such Lender failed to notify the Administrative Agent
of a
change in circumstance which rendered the exemption from, or reduction of,
withholding Tax ineffective or for any other reason, such Lender shall indemnify
the Administrative Agent fully for all amounts paid, directly or indirectly,
by
the Administrative Agent as Tax or otherwise, including any penalties or
interest and together with all expenses (including legal expenses, allocated
internal costs and out-of-pocket expenses) incurred.
(b)
In
furtherance of the foregoing, each Lender (in its capacities as a Lender and
the
Swingline Lender (if applicable) and on behalf of itself and its Affiliates
as
potential counterparties to Swap Agreements) and each Issuing Bank (in such
capacities and on behalf of itself and its Affiliates as potential
counterparties to Swap Agreements) hereby appoints and authorizes the
Administrative Agent to act as the agent of such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by
any
of the Loan Parties to secure any of the Obligations, together with such powers
and discretion as are reasonably incidental thereto. In this connection, the
Administrative Agent (and any Subagents appointed by the Administrative Agent
pursuant to Section 8.02 for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Security Documents, or
for
exercising any rights or remedies thereunder at the direction of the
Administrative Agent) shall be entitled to the benefits of this Article VIII
(including, without limitation, Section 8.07) as though the Administrative
Agent
(and any such Subagents) were an “Agent” under the Loan Documents, as if set
forth in full herein with respect thereto.
(c)
Each
Lender (in its capacities as a Lender and the Swingline Lender (if applicable)
and on behalf of itself and its Affiliates as potential counterparties to Swap
Agreements) and each Issuing Bank (in such capacities and on behalf of itself
and its Affiliates as potential counterparties to Swap Agreements) irrevocably
authorizes the Administrative Agent, at its option and in its discretion, (i)
to
release any Lien on any property granted to or held by the Administrative Agent
under any Loan Document (A) upon termination of the Commitments and payment
in
full of all Obligations (other than contingent indemnification obligations)
and
the expiration, termination or cash collateralization of all Letters of Credit
and Bankers’ Acceptances, (B) that is sold or to be sold as part of or in
connection with any sale
permitted
hereunder or under any other Loan Document, or (C) if approved, authorized
or
ratified in writing in accordance with Section 9.08 hereof, (ii) to release
any
Guarantor from its obligations under the Loan Documents if such person ceases
to
be a Subsidiary as a result of a transaction permitted hereunder; and (iii)
to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property
that is
permitted by Section 6.02(i) and (j). Upon request by the Administrative
Agent
at any time, the Required Lenders will confirm in writing the Administrative
Agent’s authority to release its interest in particular types or items of
property, or to release any Guarantor from its obligations under the Loan
Documents.
(d)
In
case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, (i) the Administrative Agent
(irrespective of whether the principal of any Obligation shall then be due
and
payable as herein expressed or by declaration or otherwise and irrespective
of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise
(A) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of any or all of the Obligations that are owing
and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders, the Issuing Banks and the
Administrative Agent and any Subagents allowed in such judicial proceeding,
and
(B) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same, and (ii) any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender and Issuing Bank
to
make such payments to the Administrative Agent and, if the Administrative Agent
shall consent to the making of such payments directly to the Lenders and the
Issuing Banks, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due
the
Administrative Agent under the Loan Documents. Nothing contained herein shall
be
deemed to authorize the Administrative Agent to authorize or consent to or
accept or adopt on behalf of any Lender or Issuing Bank any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or Issuing Bank or to authorize the Administrative
Agent to vote in respect of the claim of any Lender or Issuing Bank in any
such
proceeding.
SECTION
8.02.
Delegation
of Duties
(a)
.
The
Administrative Agent may execute any of its duties under this Agreement and
the
other Loan Documents (including for purposes of holding or enforcing any Lien
on
the Collateral (or any portion thereof) by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent may also from time to time, when the Administrative Agent
deems it to be necessary or desirable, appoint one or more trustees,
co-trustees, collateral co-agents, collateral subagents or attorneys-in-fact
(each, a “
Subagent
”)
with
respect to all or any part of the Collateral;
provided
,
that no
such Subagent shall be authorized to take any action with respect to any
Collateral unless and except to the extent expressly authorized in writing
by
the Administrative Agent. Should any instrument in writing from the Borrower
or
any other Loan Party be required by any Subagent so appointed by the
Administrative Agent to
more
fully or certainly vest in and confirm to such Subagent such rights, powers,
privileges and duties, the Borrower shall, or shall cause such Loan Party
to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by the Administrative Agent. If any Subagent, or successor thereto,
shall die, become incapable of acting, resign or be removed, all rights,
powers,
privileges and duties of such Subagent, to the extent permitted by law, shall
automatically vest in and be exercised by the Administrative Agent until
the
appointment of a new Subagent. The Administrative Agent shall not be responsible
for the negligence or misconduct of any agent, attorney-in-fact or Subagent
that
it selects in accordance with the foregoing provisions of this Section 8.02
in
the absence of the Administrative Agent’s gross negligence or willful
misconduct.
SECTION
8.03.
Exculpatory
Provisions
.
Neither
any Agent or its Affiliates nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (a) liable for
any
action lawfully taken or omitted to be taken by it or such person under or
in
connection with this Agreement or any other Loan Document (except to the extent
that any of the foregoing are found by a final and nonappealable decision of
a
court of competent jurisdiction to have resulted from its or such person’s own
gross negligence or willful misconduct) or (b) responsible in any manner to
any
of the Lenders for any recitals, statements, representations or warranties
made
by any Loan Party or any officer thereof contained in this Agreement or any
other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agents under or in connection
with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
or
any other Loan Document or for any failure of any Loan Party a party thereto
to
perform its obligations hereunder or thereunder. The Agents shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance
or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party. The Administrative Agent shall not have any duties
or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default or Event of Default has occurred and
is
continuing, and (b) the Administrative Agent shall not, except as expressly
set
forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the
Borrower or any of its Affiliates that is communicated to or obtained by the
person serving as the Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall be deemed not to have knowledge of
any
Default or Event of Default unless and until written notice describing such
Default or Event of Default is given to the Administrative Agent by the
Borrower, a Lender or an Issuing Bank. The Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or
any
other Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Security
Documents, (v) the value or the sufficiency of any Collateral, or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere herein,
other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
SECTION
8.04.
Reliance
by Administrative Agent
.
The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) or
conversation believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper person. The Administrative Agent also
may
rely upon any statement made to it orally or by telephone and believed by it
to
have been made by the proper person, and shall not incur any liability for
relying thereon. In determining compliance with any condition hereunder to
any
Credit Event, that by its terms must be fulfilled to the satisfaction of a
Lender or any Issuing Bank, the Administrative Agent may presume that such
condition is satisfactory to such Lender or Issuing Bank unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the Issuing Bank prior to such Credit Event. The Administrative Agent may
consult with legal counsel (including counsel to Holdings or the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice
of
any such counsel, accountants or experts. The Administrative Agent may deem
and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or
any
other Loan Document unless it shall first receive such advice or concurrence
of
the Required Lenders (or, if so specified by this Agreement, all or other
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that
may
be incurred by it by reason of taking or continuing to take any such action.
The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all or other Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
SECTION
8.05.
Notice
of Default
.
The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Administrative Agent
has received written notice from a Lender, Holdings or the Borrower referring
to
this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default.” In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed
by
the Required Lenders (or, if so specified by this Agreement, all or other
Lenders);
provided
,
that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the
Lenders.
SECTION
8.06.
Non-Reliance
on Agents and Other Lenders
.
Each
Lender expressly acknowledges that neither the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties
to
it and
that no act by any Agent hereafter taken, including any review of the affairs
of
a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute
any
representation or warranty by any Agent to any Lender. Each Lender represents
to
the Agents that it has, independently and without reliance upon any Agent
or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness
of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that
it
will, independently and without reliance upon any Agent or any other Lender,
and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions
in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as
to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by
the Administrative Agent hereunder, the Administrative Agent shall not have
any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Loan Party or any affiliate
of a Loan Party that may come into the possession of the Administrative Agent
or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
SECTION
8.07.
Indemnification
.
The
Lenders agree to indemnify the Administrative Agent and each Issuing Bank in
its
capacity as such (to the extent not reimbursed by Holdings or the Borrower
and
without limiting the obligation of Holdings or the Borrower to do so), in the
amount of its pro rata share (based on its aggregate Revolving Facility
Exposure, outstanding Term Loans and unused Commitments hereunder;
provided
,
that
the aggregate principal amount of Swingline Loans owing to the Swingline Lender
and of L/C Disbursements owing to any Issuing Bank shall be considered to be
owed to the Revolving Facility Lenders ratably in accordance with their
respective Revolving Facility Exposure), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred
by or
asserted against the Administrative Agent or such Issuing Bank in any way
relating to or arising out of the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Administrative Agent or such Issuing Bank under or in connection
with any of the foregoing;
provided
,
that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from the Administrative
Agent’s or such Issuing Bank’s gross negligence or willful misconduct. The
failure of any Lender to reimburse the Administrative Agent or any Issuing
Bank,
as the case may be, promptly upon demand for its ratable share of any amount
required to be paid by the Lenders to the Administrative Agent or such Issuing
Bank, as the case may be, as provided herein shall not relieve any other Lender
of its obligation hereunder to reimburse the Administrative Agent or such
Issuing Bank, as the case may be, for its ratable share of such amount, but
no
Lender shall be responsible for the failure of any other Lender to reimburse
the
Administrative Agent or such Issuing Bank, as the case may be, for such other
Lender’s ratable share of such amount. The agreements in this
Section
shall
survive the payment of the Loans and all other amounts payable
hereunder.
SECTION
8.08.
Agent
in Its Individual Capacity
.
Each
Agent and its affiliates may make loans to, accept deposits from, and generally
engage in any kind of business with any Loan Party as though such Agent were
not
an Agent. With respect to its Loans made or renewed by it and with respect
to
any Letter of Credit issued, or Letter of Credit or Swingline Loan participated
in, by it, each Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not an Agent, and the terms “Lender” and “Lenders” shall include each
Agent in its individual capacity.
SECTION
8.09.
Successor
Administrative Agent
.
The
Administrative Agent may resign as Administrative Agent upon 10 days’ notice to
the Lenders and the Borrower. If the Administrative Agent shall resign as
Administrative Agent under this Agreement and the other Loan Documents, then
the
Required Lenders shall appoint from among the Lenders a successor agent for
the
Lenders, which successor agent shall (unless an Event of Default under Section
7.01(b), (c), (h) or (i) shall have occurred and be continuing) be subject
to
approval by the Borrower (which approval shall not be unreasonably withheld
or
delayed), whereupon such successor agent shall succeed to the rights, powers
and
duties of the Administrative Agent, and the term “Administrative Agent” shall
mean such successor agent effective upon such appointment and approval, and
the
former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or
any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective, and the
retiring Administrative Agent shall, on behalf of the Lenders and the Issuing
Bank, appoint a successor agent which shall (unless an Event of Default under
Section 7.01(b), (c), (h) or (i) shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed). After any retiring Administrative Agent’s resignation as
Administrative Agent, the provisions of this Section 8.09 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan
Documents.
SECTION
8.10.
Agents
and Arrangers
.
Neither
the Syndication Agent, the Documentation Agents nor any of the Joint Lead
Arrangers shall have any duties or responsibilities hereunder in its capacity
as
such.
ARTICLE
IX
Miscellaneous
SECTION
9.01.
Notices;
Communications
.
i)
Except
in the case of notices and other communications expressly permitted to be given
by telephone (and except as provided in Section 9.01(b) below), all notices
and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows, and
all
notices and other communications expressly permitted hereunder to be given
by
telephone shall be made to the applicable telephone number, as
follows
(i)
if
to any
Loan Party, the Administrative Agent, the Issuing Bank or the Swingline Lender,
to the address, telecopier number, electronic mail address or telephone number
specified for such person on
Schedule
9.01
;
and
(ii)
if
to any
other Lender, to the address, telecopier number, electronic mail address or
telephone number specified in its Administrative Questionnaire.
(b)
Notices
and other communications to the Lenders and the L/C Issuer hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent;
provided
that the
foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant
to Article II if such Lender or the Issuing Bank, as applicable, has notified
the Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to
it
hereunder by electronic communications pursuant to procedures approved by it,
provided
that
approval of such procedures may be limited to particular notices or
communications.
(c)
Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received. Notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 9.01(b) above shall be effective as provided in such Section
9.01(b).
(d)
Any
party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.
(e)
Documents
required to be delivered pursuant to Section 5.04 (to the extent any such
documents are included in materials otherwise filed with the SEC) may be
delivered electronically (including as set forth in Section 9.17) and if so
delivered, shall be deemed to have been delivered on the date (i) on which
the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on
Schedule
9.01
,
or (ii)
on which such documents are posted on the Borrower’s behalf on an Internet or
intranet website, if any, to which each Lender and the Administrative Agent
have
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent);
provided
,
that
(A) the Borrower shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests the Borrower to deliver such
paper copies until a written request to cease delivering paper copies is given
by the Administrative Agent or such Lender, and (B) the Borrower shall notify
the Administrative Agent and each Lender (by telecopier or electronic mail)
of
the posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (
i.e.
,
soft
copies) of such documents. Notwithstanding anything contained herein, in every
instance the Borrower shall be
required
to provide paper copies of the certificates required by Section 5.04(c) to
the
Administrative Agent. Except for such certificates required by Section 5.04(c),
the Administrative Agent shall have no obligation to request the delivery
or to
maintain copies of the documents referred to above, and in any event shall
have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.
SECTION
9.02.
Survival
of Agreement
.
All
covenants, agreements, representations and warranties made by the Loan Parties
herein, in the other Loan Documents and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the Lenders
and each Issuing Bank and shall survive the making by the Lenders of the Loans,
the execution and delivery of the Loan Documents and the issuance of the Letters
of Credit, regardless of any investigation made by such persons or on their
behalf, and shall continue in full force and effect as long as the principal
of
or any accrued interest on any Loan or L/C Disbursement or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. Without prejudice to the survival of any other
agreements contained herein, indemnification and reimbursement obligations
contained herein (including pursuant to Sections 2.15, 2.17 and 9.05) shall
survive the payment in full of the principal and interest hereunder, the
expiration of the Letters of Credit and the termination of the Commitments
or
this Agreement.
SECTION
9.03.
Binding
Effect
.
This
Agreement shall become effective when it shall have been executed by Holdings,
the Borrower and the Administrative Agent and when the Administrative Agent
shall have received copies hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of Holdings, the Borrower, each Issuing Bank,
the
Administrative Agent and each Lender and their respective permitted successors
and assigns.
SECTION
9.04.
Successors
and Assigns
.
ii)
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and assigns permitted hereby
(including any affiliate of the Issuing Bank that issues any Letter of Credit
or
Bankers’ Acceptance), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void), except pursuant to the
Acquisition, and (ii) no Lender may assign or otherwise transfer its rights
or
obligations hereunder except in accordance with this Section 9.04. Nothing
in this Agreement, expressed or implied, shall be construed to confer upon
any
person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of
this Section 9.04), and, to the extent expressly contemplated hereby, the
Related Parties of each of the Agents, the Issuing Bank and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement
or the other Loan Documents.
(b)
(a)
Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees (each, an “
Assignee
”)
all or
a portion of its rights and obligations under this Agreement (including all
or a
portion of its Commitments and
the
Loans
at the time owing to it) with the prior written consent (such consent not to
be
unreasonably withheld) of:
(A)
the
Borrower;
provided
,
that no
consent of the Borrower shall be required for an assignment to a Lender, an
affiliate of a Lender, an Approved Fund (as defined below) or, if an Event
of
Default under Sections 7.01(b), (c), (h) or (i) has occurred and is continuing,
any other person;
(B)
the
Administrative Agent;
provided
,
that no
consent of the Administrative Agent shall be required for an assignment of
all
or any portion of a Term Loan to a Lender, an Affiliate of a Lender or an
Approved Fund; and
(C)
the
Issuing Bank and the Swingline Lender;
provided
,
that no
consent of the Issuing Bank and the Swingline Lender shall be required for
an
assignment of all or any portion of a Term Loan.
(ii)
Assignments
shall be subject to the following additional conditions:
(A)
except
in
the case of an assignment to a Lender, an affiliate of a Lender or an Approved
Fund or an assignment of the entire remaining amount of the assigning Lender’s
Commitments or Loans under any Facility, the amount of the Commitments or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than (x) $1.0 million in the
case
of Term Loans and (y) $5.0 million in the case of Revolving Facility Loans
or
Revolving Facility Commitments, unless each of the Borrower and the
Administrative Agent otherwise consent;
provided
,
that
(1) no such consent of the Borrower shall be required if an Event of Default
under Sections 7.01(b), (c), (h) or (i) has occurred and is continuing and
(2)
such amounts shall be aggregated in respect of each Lender and its Affiliates
or
Approved Funds (with simultaneous assignments to or by two or more Related
Funds
shall be treated as one assignment), if any;
(B)
the
parties to each assignment shall execute and deliver to the Administrative
Agent
an Assignment and Acceptance via an electronic settlement system acceptable
to
the Administrative Agent (or, if previously agreed with the Administrative
Agent, manually), and shall pay to the Administrative Agent a processing and
recordation fee
of
$3,500
(which fee may be waived or reduced in the sole discretion of the Administrative
Agent);
(C)
the
Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent
an Administrative Questionnaire and all applicable tax forms; and
(D)
the
Assignee shall not be the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.
For
the
purposes of this Section 9.04, “
Approved
Fund
”
means
any person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course and that is administered or managed by
(a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an
entity that administers or manages a Lender. Notwithstanding the foregoing,
no
Lender shall be permitted to assign or transfer any portion of its rights and
obligations under this Agreement to any entity previously identified in that
certain letter dated as of the date hereof from the Borrower to the
Administrative Agent.
(b)
Subject
to acceptance and recording thereof pursuant to paragraph (b)(v) below,
from and after the effective date specified in each Assignment and Acceptance
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and
Acceptance, be released from its obligations under this Agreement (and, in
the
case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be
a
party hereto but shall continue to be entitled to the benefits of Sections
2.15,
2.16, 2.17 and 9.05). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with
paragraph (c) of this Section 9.04.
(c)
The
Administrative Agent, acting for this purpose as an agent of the Borrower,
shall
maintain at one of its offices a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of
the Lenders, and the Commitments of, and principal amount of the Loans and
Revolving L/C Exposure owing to, each Lender pursuant to the terms hereof from
time to time (the “
Register
”).
The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d)
Upon
its
receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an Assignee, the Assignee’s completed Administrative Questionnaire
(unless the Assignee shall already be a Lender hereunder), all applicable tax
forms, the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall promptly
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment, whether or not evidenced by a promissory
note, shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph (b)(v).
(c)
(e)
Any
Lender may, without the consent of the Borrower or the Administrative Agent,
sell participations to one or more banks or other entities (a “
Participant
”)
in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing to it);
provided
,
that
(A) such Lender’s obligations under this Agreement shall remain unchanged, (B)
such Lender shall remain solely responsible to the other parties hereto for
the
performance of such obligations and (C) the
Borrower,
the Administrative Agent, the Issuing Bank and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement pursuant to which
a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and the other Loan Documents and
to
approve any amendment, modification or waiver of any provision of this Agreement
and the other Loan Documents;
provided
,
that
(x) such agreement may provide that such Lender will not, without the consent
of
the Participant, agree to any amendment, modification or waiver that (1)
requires the consent of each Lender directly affected thereby pursuant to
Section 9.04(a)(i) or clauses (i), (ii), (iii), (iv), (v) or (vi) of
the first proviso to Section 9.08(b) and (2) directly affects such
Participant and (y) no other agreement with respect to amendment, modification
or waiver may exist between such Lender and such Participant. Subject to
paragraph (c)(ii) of this Section 9.04, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and
2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 9.04. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 9.06 as though it were a Lender,
provided
such
Participant shall be subject to Section 2.18(c) as though it were a
Lender.
(f)
A
Participant shall not be entitled to receive any greater payment under
Section 2.15, 2.16 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent. A Participant shall not be entitled to the
benefits of Section 2.17 to the extent such Participant fails to comply
with Section 2.17(e) and (f) as though it were a Lender.
(d)
Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including (i) any pledge or assignment to secure obligations to a Federal
Reserve Bank, (ii)
the
case
of any Lender that is a Fund, any pledge or assignment to any holders of
obligations owed, or securities issued, by such Lender including to any trustee
for, or any other representative of, such holders
and in
each case, this Section 9.04 shall not apply to any such pledge or
assignment of a security interest;
provided
,
that no
such pledge or assignment of a security interest shall release a Lender from
any
of its obligations hereunder or substitute any such pledgee or Assignee for
such
Lender as a party hereto.
(e)
The
Borrower, upon receipt of written notice from the relevant Lender, agrees to
issue Notes to any Lender requiring Notes to facilitate transactions of the
type
described in paragraph (d) above.
(f)
Notwithstanding
the foregoing, any Conduit Lender may assign any or all of the Loans it may
have
funded hereunder to its designating Lender without the consent of the Borrower
or the Administrative Agent. Each of Holdings, the Borrower, each Lender and
the
Administrative Agent hereby confirms that it will not institute against a
Conduit Lender or join any other person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one
day
after the payment in full of the latest maturing commercial paper note issued
by
such Conduit Lender;
provided
,
however, that each Lender designating any Conduit Lender hereby agrees to
indemnify, save and hold harmless each other party
hereto
and each Loan Party for any loss, cost, damage or expense arising out of
its
inability to institute such a proceeding against such Conduit Lender during
such
period of forbearance.
(g)
If
the
Borrower wishes to replace the Loans or Commitments under any Facility with
ones
having different terms, it shall have the option, with the consent of the
Administrative Agent and subject to at least three Business Days’ advance notice
to the Lenders under such Facility, instead of prepaying the Loans or reducing
or terminating the Commitments to be replaced, to (i) require the Lenders under
such Facility to assign such Loans or Commitments to the Administrative Agent
or
its designees and (ii) amend the terms thereof in accordance with
Section 9.08 (with such replacement, if applicable, being deemed to have
been made pursuant to Section 9.08(d)). Pursuant to any such assignment,
all Loans and Commitments to be replaced shall be purchased at par (allocated
among the Lenders under such Facility in the same manner as would be required
if
such Loans were being optionally prepaid or such Commitments were being
optionally reduced or terminated by the Borrower), accompanied by payment of
any
accrued interest and fees thereon and any other amounts owing pursuant to
Section 9.05(b). By receiving such purchase price, the Lenders under such
Facility shall automatically be deemed to have assigned the Loans or Commitments
under such Facility pursuant to the terms of the form of Assignment and
Acceptance attached hereto as
Exhibit A
,
and
accordingly no other action by such Lenders shall be required in connection
therewith. The provisions of this paragraph (g) are intended to facilitate
the maintenance of the perfection and priority of existing security interests
in
the Collateral during any such replacement.
(h)
Notwithstanding
the foregoing, no assignment may be made or participation sold to an Ineligible
Institution without the prior written consent of the Borrower.
SECTION
9.05.
Expenses;
Indemnity
.
iii)
The
Borrower agrees to pay (i) all reasonable out-of-pocket expenses (including
Other Taxes) incurred by the Administrative Agent in connection with the
preparation of this Agreement and the other Loan Documents, or by the
Administrative Agent in connection with the syndication of the Commitments
or
the administration of this Agreement (including expenses incurred in connection
with due diligence and initial and ongoing Collateral examination to the extent
incurred with the reasonable prior approval of the Borrower and the reasonable
fees, disbursements and charges for no more than one counsel in each
jurisdiction where Collateral is located) or in connection with the
administration of this Agreement and any amendments, modifications or waivers
of
the provisions hereof or thereof (whether or not the Transactions hereby
contemplated shall be consummated), including the reasonable fees, charges
and
disbursements of Latham & Watkins LLP, counsel for the Administrative Agent
and the Joint Lead Arrangers, and, if necessary, the reasonable fees, charges
and disbursements of one local counsel per jurisdiction, and (ii) all
out-of-pocket expenses (including Other Taxes) incurred by the Administrative
Agent or any Lender in connection with the enforcement or protection of their
rights in connection with this Agreement and the other Loan Documents, in
connection with the Loans made or the Letters of Credit issued hereunder,
including the fees, charges and disbursements of counsel for the Administrative
Agent (including any special and local counsel).
(b)
The
Borrower agrees to indemnify the Administrative Agent, the Agents, the Joint
Lead Arrangers, each Issuing Bank, each Lender, each of their respective
Affiliates and each of their respective directors, trustees, officers,
employees, agents, trustees and
advisors
(each such person being called an “
Indemnitee
”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
charges and disbursements (except the allocated costs of in-house counsel),
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto and thereto of their
respective obligations thereunder or the consummation of the Transactions
and
the other transactions contemplated hereby, (ii) the use of the proceeds
of the
Loans or the use of any Letter of Credit or Bankers’ Acceptance or (iii) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, and regardless of whether
any
of the foregoing is raised or initiated by a third party or Holdings, the
Borrower or any other Loan Party or any Subsidiary;
provided
,
that
such indemnity shall not, as to any Indemnitee, be available to the extent
that
such losses, claims, damages, liabilities or related expenses are determined
by
a final, non-appealable judgment of a court of competent jurisdiction to
have
resulted from the gross negligence or willful misconduct of such Indemnitee
(for
purposes of this proviso only, each of the Administrative Agent, any Joint
Lead
Arranger, any Issuing Bank or any Lender shall be treated as several and
separate Indemnitees, but each of them together with its respective Related
Parties, shall be treated as a single Indemnitee). Subject to and without
limiting the generality of the foregoing sentence, the Borrower agrees to
indemnify each Indemnitee against, and hold each Indemnitee harmless from,
any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel or consultant fees, charges and disbursements (limited
to not
more than one counsel, plus, if necessary, one local counsel per jurisdiction)
(except the allocated costs of in-house counsel), incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a
result
of (A) any claim related in any way to Environmental Laws and Holdings, the
Borrower or any of their Subsidiaries, or (B) any actual or alleged presence,
Release or threatened Release of Hazardous Materials at, under, on or from
any
Property;
provided
,
that
such indemnity shall not, as to any Indemnitee, be available to the extent
that
such losses, claims, damages, liabilities or related expenses are determined
by
a court of competent jurisdiction by final and nonappealable judgment to
have
resulted from the gross negligence or willful misconduct of such Indemnitee
or
any of its Related Parties. None of the Indemnitees (or any of their respective
affiliates) shall be responsible or liable to Holdings, the Borrower or any
of
their respective subsidiaries, Affiliates or stockholders or any other person
or
entity for any special, indirect, consequential or punitive damages, which
may
be alleged as a result of the Facilities or the Transactions. The provisions
of
this Section 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation
of
the transactions contemplated hereby, the repayment of any of the Obligations,
the invalidity or unenforceability of any term or provision of this Agreement
or
any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, any Issuing Bank or any Lender. All amounts due under
this
Section 9.05 shall be payable on written demand therefor accompanied by
reasonable documentation with respect to any reimbursement, indemnification
or
other amount requested.
(c)
Except
as
expressly provided in Section 9.05(a) with respect to Other Taxes, which
shall not be duplicative with any amounts paid pursuant to Section 2.17,
this Section 9.05 shall not apply to Taxes.
(d)
To
the
fullest extent permitted by applicable law, Holdings and the Borrower shall
not
assert, and hereby waive, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof. No Indemnitee shall
be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby
or
thereby.
(e)
The
agreements in this Section 9.05 shall survive the resignation of the
Administrative Agent, any Issuing Bank, the replacement of any Lender, the
termination of the Commitments and the repayment, satisfaction or discharge
of
all the other Obligations and the termination of this Agreement.
SECTION
9.06.
Right
of Set-off
.
If an
Event of Default shall have occurred and be continuing, each Lender and each
Issuing Bank is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and
other indebtedness at any time owing by such Lender or such Issuing Bank to
or
for the credit or the account of Holdings (prior to a Qualified IPO), the
Borrower or any Subsidiary against any of and all the obligations of Holdings
(prior to a Qualified IPO) or the Borrower now or hereafter existing under
this
Agreement or any other Loan Document held by such Lender or such Issuing Bank,
irrespective of whether or not such Lender or such Issuing Bank shall have
made
any demand under this Agreement or such other Loan Document and although the
obligations may be unmatured. The rights of each Lender and each Issuing Bank
under this Section 9.06 are in addition to other rights and remedies
(including other rights of set-off) that such Lender or such Issuing Bank may
have.
SECTION
9.07.
Applicable
Law
.
THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS
EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION
9.08.
Waivers;
Amendment
.
iv)
No
failure or delay of the Administrative Agent, any Issuing Bank or any Lender
in
exercising any right or power hereunder or under any Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of
any
other right or power. The rights and remedies of the Administrative Agent,
each
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by Holdings, the Borrower or any other
Loan
Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
No
notice or demand on
Holdings,
the Borrower or any other Loan Party in any case shall entitle such person
to
any other or further notice or demand in similar or other
circumstances.
(b)
Neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except (x) as provided in Section 2.21,
(y)
in the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings (prior to a Qualified IPO), the Borrower and the
Required Lenders, and (z) in the case of any other Loan Document, pursuant
to an
agreement or agreements in writing entered into by each party thereto and the
Administrative Agent and consented to by the Required Lenders;
provided
,
however
,
that no
such agreement shall
(i)
decrease
or forgive the principal amount of, or extend the final maturity of, or decrease
the rate of interest on, any Loan or any L/C Disbursement, or extend the stated
expiration of any Letter of Credit or Bankers’ Acceptance beyond the Revolving
Facility Maturity Date, without the prior written consent of each Lender
directly affected thereby, except as provided in Section 2.05(c);
provided
,
that
any amendment to the financial covenant definitions in this Agreement shall
not
constitute a reduction in the rate of interest for purposes of this
clause (i),
(ii)
increase
or extend the Commitment of any Lender or decrease the Commitment Fees or L/C
Participation Fees or other fees of any Lender without the prior written consent
of such Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the aggregate Commitments shall not constitute an increase of the Commitments
of any Lender),
(iii)
extend
or
waive any Term Loan Installment Date or reduce the amount due on any Term Loan
Installment Date or extend any date on which payment of interest on any Loan
or
any L/C Disbursement or any Fees is due, without the prior written consent
of
each Lender adversely affected thereby,
(iv)
amend
the
provisions of Section 5.02 of the Collateral Agreement in a manner that would
by
its terms alter the
pro
rata
sharing
of payments required thereby, without the prior written consent of each Lender
adversely affected thereby,
(v)
amend
or
modify the provisions of this Section 9.08 or the definition of the terms
“Required Lenders,” “Majority Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the prior written consent of each Lender adversely affected thereby
(it
being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Lenders on substantially the same basis as the
Loans and Commitments are included on the Closing Date),
(vi)
release
all or substantially all the Collateral or release any of Holdings (prior to
a
Qualified IPO), the Borrower or all or
substantially
all of the Subsidiary Loan Parties from their respective Guarantees under the
Collateral Agreement, unless, in the case of a Subsidiary Loan Party, all or
substantially all the Equity Interests of such Subsidiary Loan Party is sold
or
otherwise disposed of in a transaction permitted by this Agreement, without
the
prior written consent of each Lender;
(vii)
effect
any waiver, amendment or modification that by its terms adversely affects the
rights in respect of payments or collateral of Lenders participating in any
Facility differently from those of Lender participating in another Facility,
without the consent of the Majority Lenders participating in the adversely
affected Facility (it being agreed that the Required Lenders may waive, in
whole
or in part, any prepayment or Commitment reduction required by Section 2.11
so long as the application of any prepayment or Commitment reduction still
required to be made is not changed);
provided
,
further
,
that no
such agreement shall amend, modify or otherwise affect the rights or duties
of
the Administrative Agent or an Issuing Bank hereunder without the prior written
consent of the Administrative Agent or such Issuing Bank acting as such at
the
effective date of such agreement, as applicable. Each Lender shall be bound
by
any waiver, amendment or modification authorized by this Section 9.08 and
any consent by any Lender pursuant to this Section 9.08 shall bind any
assignee of such Lender.
(c)
Without
the consent of the Syndication Agent, the Documentation Agent or any Joint
Lead
Arranger or Lender or Issuing Bank, the Loan Parties and the Administrative
Agent may (in their respective sole discretion, or shall, to the extent required
by any Loan Document) enter into any amendment, modification or waiver of any
Loan Document, or enter into any new agreement or instrument, to effect the
granting, perfection, protection, expansion or enhancement of any security
interest in any Collateral or additional property to become Collateral for
the
benefit of the Secured Parties, or as required by local law to give effect
to,
or protect any security interest for the benefit of the Secured Parties, in
any
property or so that the security interests therein comply with applicable
law.
(d)
Notwithstanding
the foregoing, this Agreement may be amended (or amended and restated) with
the
written consent of the Required Lenders, the Administrative Agent, Holdings
and
the Borrower (a) to add one or more additional credit facilities to this
Agreement and to permit the extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof to share ratably
in the benefits of this Agreement and the other Loan Documents with the Term
Loans and the Revolving Facility Loans and the accrued interest and fees in
respect thereof and (b) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders.
(e)
Notwithstanding
the foregoing, technical and conforming modifications to the Loan Documents
may
be made with the consent of the Borrower and the Administrative Agent to the
extent necessary to integrate any Incremental Term Loan Commitments or
Incremental Revolving Facility Commitments on substantially the same basis
as
the Term Loans or Revolving Facility Loans, as applicable.
SECTION
9.09.
Interest
Rate Limitation
.
Notwithstanding anything herein to the contrary, if at any time the
applicable
interest
rate, together with all fees and charges that are treated as interest under
applicable law (collectively, the “
Charges
”),
as
provided for herein or in any other document executed in connection herewith,
or
otherwise contracted for, charged, received, taken or reserved by any Lender
or
any Issuing Bank, shall exceed the maximum lawful rate (the “
Maximum
Rate
”)
that
may be contracted for, charged, taken, received or reserved by such Lender
in
accordance with applicable law, the rate of interest payable hereunder, together
with all Charges payable to such Lender or such Issuing Bank, shall be limited
to the Maximum Rate;
provided
,
that
such excess amount shall be paid to such Lender or such Issuing Bank on
subsequent payment dates to the extent not exceeding the legal
limitation.
SECTION
9.10.
Entire
Agreement
.
This
Agreement, the other Loan Documents and the agreements regarding certain Fees
referred to herein constitute the entire contract between the parties relative
to the subject matter hereof. Any previous agreement among or representations
from the parties or their Affiliates with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents. Notwithstanding
the foregoing, the Fee Letter shall survive the execution and delivery of this
Agreement and remain in full force and effect. Nothing in this Agreement or
in
the other Loan Documents, expressed or implied, is intended to confer upon
any
party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.
SECTION
9.11.
WAIVER
OF JURY TRIAL
.
EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY
OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.11.
SECTION
9.12.
Severability
.
In the
event any one or more of the provisions contained in this Agreement or in any
other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal
or
unenforceable provisions.
SECTION
9.13.
Counterparts
.
This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which, when taken together, shall constitute
but one contract, and shall become effective as provided in Section 9.03.
Delivery of an executed counterpart to this Agreement by facsimile transmission
(or other electronic transmission pursuant to procedures approved by the
Administrative Agent) shall be as effective as delivery of a manually signed
original.
SECTION
9.14.
Headings
.
Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
SECTION
9.15.
Jurisdiction;
Consent to Service of Process
.
v)
Each
of the parties hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or federal court of the United States of America sitting in New York City,
and
any appellate court from any thereof (collectively, “
New
York Courts
”),
in
any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of
the
other Loan Documents in the courts of any jurisdiction, except that each of
the
Loan Parties agrees that (a) it will not bring any such action or proceeding
in
any court other than New York Courts (it being acknowledged and agreed by the
parties hereto that any other forum would be inconvenient and inappropriate
in
view of the fact that more of the Lenders who would be affected by any such
action or proceeding have contacts with the State of New York than any other
jurisdiction), and (b) in any such action or proceeding brought against any
Loan
Party in any other court, it will not assert any cross-claim, counterclaim
or
setoff, or seek any other affirmative relief, except to the extent that the
failure to assert the same will preclude such Loan Party from asserting or
seeking the same in the New York Courts.
(b)
Each
of
the parties hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now
or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New
York
State or federal court. Each of the parties hereto hereby irrevocably waives,
to
the fullest extent permitted by law, the defense of an inconvenient forum to
the
maintenance of such action or proceeding in any such court.
SECTION
9.16.
Confidentiality
.
Each of
the Lenders, each Issuing Bank and each of the Agents agrees that it shall
maintain in confidence any information relating to Holdings, the Borrower and
any Subsidiary furnished to it by or on behalf of Holdings, the Borrower or
any
Subsidiary (other than information that (a) has become generally available
to
the public other than as a result of a disclosure by such party, (b) has been
independently developed by such Lender, such Issuing Bank or such Agent without
violating this Section 9.16 or (c) was available to such Lender, such
Issuing Bank or such Agent from a third party having, to such person’s
knowledge, no obligations of confidentiality to Holdings, the Borrower or any
other Loan Party) and shall not reveal the same other than to its directors,
trustees, officers, employees and advisors with a need to know or to any person
that approves or administers the Loans on behalf of such Lender (so long as
each
such person shall have been instructed to keep the same confidential in
accordance with this Section 9.16), except: (A) to the extent necessary to
comply with law or any legal process or the requirements of any Governmental
Authority, the National Association of
Insurance
Commissioners or of any securities exchange on which securities of the
disclosing party or any Affiliate of the disclosing party are listed or traded,
(B) as part of normal reporting or review procedures to, or examinations
by,
Governmental Authorities or self-regulatory authorities, including the National
Association of Insurance Commissioners or the National Association of Securities
Dealers, Inc., (C) to its parent companies, Affiliates or auditors (so long
as
each such person shall have been instructed to keep the same confidential
in
accordance with this Section 9.16), (D) in order to enforce its rights
under any Loan Document in a legal proceeding, (E) to any pledgee under
Section 9.04(d) or any other prospective assignee of, or prospective
Participant in, any of its rights under this Agreement (so long as such person
shall have been instructed to keep the same confidential in accordance with
this
Section 9.16) and (F) to any direct or indirect contractual counterparty in
Swap Agreements or such contractual counterparty’s professional advisor (so long
as such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this
Section 9.16).
SECTION
9.17.
Platform;
Borrower Materials
(a)
.
The
Borrower hereby acknowledges that (a) the Administrative Agent and/or the Joint
Lead Arrangers will make available to the Lenders and the Issuing Bank materials
and/or information provided by or on behalf of the Borrower hereunder
(collectively, “
Borrower
Materials
”)
by
posting the Borrower Materials on IntraLinks or another similar electronic
system (the “
Platform
”),
and
(b) certain of the Lenders may be “public-side” Lenders (
i.e.
,
Lenders
that do not wish to receive material non-public information with respect to
the
Borrower or its securities) (each, a “
Public
Lender
”).
The
Borrower hereby agrees that it will use commercially reasonable efforts to
identify that portion of the Borrower Materials that may be distributed to
the
Public Lenders and that (i) all such Borrower Materials shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof, (ii) by marking
Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Arranger, the Issuing Bank and the Lenders to treat
such Borrower Materials as either publicly available information or not material
information (although it may be sensitive and proprietary) with respect to
the
Borrower or its securities for purposes of United States Federal and state
securities laws, (iii) all Borrower Materials marked “PUBLIC” are permitted to
be made available through a portion of the Platform designated “Public
Investor;” and (iv) the Administrative Agent and the Joint Lead Arrangers shall
be entitled to treat any Borrower Materials that are not marked “PUBLIC” as
being suitable only for posting on a portion of the Platform not designated
“Public Investor.”
SECTION
9.18.
Release
of Liens and Guarantees
(a)
.
In the
event that any Loan Party conveys, sells, leases, assigns, transfers or
otherwise disposes of all or any portion of any of the Equity Interests or
assets of any Subsidiary Loan Party to a person that is not (and is not required
to become) a Loan Party in a transaction not prohibited by Section 6.05,
the Administrative Agent shall promptly (and the Lenders hereby authorize the
Administrative Agent to) take such action and execute any such documents as
may
be reasonably requested by Holdings or the Borrower and at the Borrower’s
expense to release any Liens created by any Loan Document in respect of such
Equity Interests or assets, and, in the case of a disposition of the Equity
Interests of any Subsidiary Loan Party in a transaction permitted by
Section 6.05 and as a result of which such Subsidiary Loan Party would
cease to be a Subsidiary, terminate such Subsidiary Loan Party’s obligations
under its Guarantee. In addition, the Administrative Agent agrees to take such
actions as are reasonably requested by Holdings
or
the
Borrower and at the Borrower’s expense to terminate the Liens and security
interests created by the Loan Documents when all the Obligations (other than
contingent indemnification Obligations) are paid in full and all Letters
of
Credit and Commitments are terminated. In addition, immediately prior to
the
consummation of a Qualified IPO, the Guarantee incurred by Holdings of the
Obligations and any related security and/or pledge arrangements shall
automatically terminate. Any representation, warranty or covenant contained
in
any Loan Document relating to any such Equity Interests, asset or subsidiary
of
Holdings shall no longer be deemed to be made once such Equity Interests
or
asset is so conveyed, sold, leased, assigned, transferred or disposed of.
SECTION
9.19.
Judgment
Currency
.
If, for
the purposes of obtaining judgment in any court, it is necessary to convert
a
sum due hereunder or any other Loan Document in one currency into another
currency, the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase the first
currency with such other currency on the Business Day preceding that on which
final judgment is given. The obligation of the Borrower in respect of any such
sum due from it to the Administrative Agent or the Lenders hereunder or under
the other Loan Documents shall, notwithstanding any judgment in a currency
(the
“
Judgment
Currency
”)
other
than that in which such sum is denominated in accordance with the applicable
provisions of this Agreement (the “
Agreement
Currency
”),
be
discharged only to the extent that on the Business Day following receipt by
the
Administrative Agent of any sum adjudged to be so due in the Judgment Currency,
the Administrative Agent may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency. If the amount of
the
Agreement Currency so purchased is less than the sum originally due to the
Administrative Agent from the Borrower in the Agreement Currency, the Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or the person to whom such obligation was
owing against such loss. If the amount of the Agreement Currency so purchased
is
greater than the sum originally due to the Administrative Agent in such
currency, the Administrative Agent agrees to return the amount of any excess
to
the Borrower (or to any other person who may be entitled thereto under
applicable law).
SECTION
9.20.
USA
PATRIOT Act Notice
.
Each
Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA
PATRIOT
A
ct
(Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “
Act
”),
it is
required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of each Loan Party and
other information that will allow such Lender or the Administrative Agent,
as
applicable, to identify each Loan Party in accordance with the Act.
[Signature
Pages Follow]
|
NY\1169071.12
||
|
038263-0065
||
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
written above.
BERRY
PLASTICS GROUP, INC.
By:_________________________
Name:
Title:
BPC
ACQUISITION CORP.
By:_________________________
Name:
Title:
|
Credit
Agreement Signature Page
||
CREDIT
SUISSE, CAYMAN ISLANDS BRANCH
as
Administrative Agent and as a Lender
By:_________________________________
Name:
Title:
By:_________________________________
N
ame:
Title:
|
Credit
Agreement Signature Page
||
CITICORP
NORTH AMERICA, INC.,
as
Syndication Agent and as a Lender
By:________________________________
Name:
Title:
|
Credit
Agreement Signature Page
||
SIGNATURE
PAGE TO THE CREDIT AGREEMENT DATED AS OF SEPTEMBER 20, 2006 AMONG BERRY PLASTICS
GROUP, INC., BPC ACQUISITION CORP., THE LENDERS PARTY HERETO AND CREDIT SUISSE,
CAYMAN ISLANDS BRANCH, AS ADMINISTRATIVE AGENT
Name
of
Institution:
________________________________________
By:_____________________________________
Name:
Title:
GUARANTEE
AND COLLATERAL AGREEMENT
dated
and
effective as of
September
20, 2006,
among
BERRY
PLASTICS GROUP, INC.
BPC
ACQUISITION CORP.
(which
on
the Closing Date shall be merged with and into
BPC
Holding Corporation,
with
BPC
Holding Corporation surviving such merger as the borrower),
as
Borrower.
each
Subsidiary of the Borrower
identified
herein,
and
CREDIT
SUISSE, CAYMAN ISLANDS BRANCH,
as
Administrative Agent
TABLE
OF
CONTENTS
Page
ARTICLE
I
DEFINITIONS
Section
1.01.
|
Credit
Agreement
|
1
|
Section
1.02.
|
Other
Defined Terms
|
1
|
ARTICLE
II
GUARANTEE
Section
2.01.
|
Guarantee
|
5
|
Section
2.02.
|
Guarantee
of Payment
|
5
|
Section
2.03.
|
No
Limitations, Etc.
|
5
|
Section
2.04.
|
Reinstatement
|
7
|
Section
2.05.
|
Agreement
To Pay; Contribution; Subrogation
|
7
|
Section
2.06.
|
Information
|
8
|
Section
2.07.
|
Maximum
Liability
|
8
|
Section
2.08.
|
Payment
Free and Clear of Taxes
|
8
|
ARTICLE
III
PLEDGE
OF
SECURITIES
Section
3.01.
|
Pledge
|
8
|
Section
3.02.
|
Delivery
of the Pledged Collateral
|
9
|
Section
3.03.
|
Representations,
Warranties and Covenants
|
10
|
Section
3.04.
|
Registration
in Nominee Name; Denominations
|
12
|
Section
3.05.
|
Voting
Rights; Dividends and Interest, Etc.
|
12
|
ARTICLE
IV
SECURITY
INTERESTS IN OTHER PERSONAL PROPERTY
Section
4.01.
|
Security
Interest
|
14
|
Section
4.02.
|
Representations
and Warranties
|
16
|
Section
4.03.
|
Covenants
|
19
|
Section
4.04.
|
Other
Actions
|
21
|
Section
4.05.
|
Covenants
Regarding Patent, Trademark and Copyright Collateral
|
22
|
ARTICLE
V
REMEDIES
Section
5.01.
|
Remedies
Upon Default
|
23
|
Section
5.02.
|
Application
of Proceeds
|
25
|
Section
5.03.
|
Securities
Act, Etc.
|
26
|
ARTICLE
VI
Indemnity,
Subrogation and Subordination
Section
6.01.
|
Indemnity
|
26
|
Section
6.02.
|
Contribution
and Subrogation
|
27
|
Section
6.03.
|
Subordination;
Subrogation
|
27
|
ARTICLE
VII
MISCELLANEOUS
Section
7.01.
|
Notices
|
29
|
Section
7.02.
|
Security
Interest Absolute
|
29
|
Section
7.03.
|
Limitation
By Law
|
29
|
Section
7.04.
|
Binding
Effect; Several Agreement
|
29
|
Section
7.05.
|
Successors
and Assigns
|
30
|
Section
7.06.
|
Administrative
Agent’s Fees and Expenses; Indemnification
|
30
|
Section
7.07.
|
Administrative
Agent Appointed Attorney-in-Fact
|
30
|
Section
7.08.
|
GOVERNING
LAW
|
31
|
Section
7.09.
|
Waivers;
Amendment
|
31
|
Section
7.10.
|
WAIVER
OF JURY TRIAL
|
32
|
Section
7.11.
|
Severability
|
32
|
Section
7.12.
|
Counterparts
|
32
|
Section
7.13.
|
Headings
|
32
|
Section
7.14.
|
Jurisdiction;
Consent to Service of Process
|
32
|
Section
7.15.
|
Termination
or Release
|
33
|
Section
7.16.
|
Additional
Subsidiaries
|
34
|
Section
7.17.
|
Right
of Set-off
|
34
|
Schedules
Schedule
I
Subsidiary
Parties
Schedule
II
Pledged
Stock; Debt Securities
Schedule
III
Intellectual
Property
Schedule
IV
Filing
Offices
Exhibits
Exhibit
I
Form
of
Supplement to the Guarantee and Collateral Agreement
Exhibit
II
Form
of
Perfection Certificate
GUARANTEE
AND COLLATERAL AGREEMENT dated and effective as of September 20, 2006 (this
“
Agreement
”),
among
BERRY PLASTICS GROUP INC., a Delaware corporation (“
Holdings
”),
BPC
ACQUISITION CORP., a Delaware corporation, which on the Closing Date shall
be
merged (the “
Merger
”)
with
and into BPC Holding Corporation, a Delaware corporation, with BPC Holding
Corporation surviving such merger as the borrower (the “
Borrower
”),
upon
the consummation of the Merger, each Subsidiary of the Borrower identified
herein as a party (each, a “
Subsidiary
Party
”)
and
CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as administrative agent and collateral
agent (in such capacities, the “
Administrative
Agent
”)
for
the Secured Parties (as defined below).
Reference
is made to the Credit Agreement dated as of September 20, 2006 (as amended,
restated, supplemented, waived or otherwise modified from time to time, the
“
Credit
Agreement
”),
among
Holdings, the Borrower, the LENDERS party thereto from time to time, CREDIT
SUISSE, CAYMAN ISLANDS BRANCH, as administrative agent and collateral agent
for
the Lenders, CITICORP NORTH AMERICA, INC., as syndication agent (in such
capacity, the “
Syndication
Agent
”),
and
DEUTSCHE BANK SECURITIES INC. and J.P. MORGAN SECURITIES INC., as
co-documentation agents (in such capacities, the “
Documentation
Agents
”).
The
Lenders have agreed to extend credit to the Borrower subject to the terms and
conditions set forth in the Credit Agreement. The obligations of the Lenders
to
extend such credit are conditioned upon, among other things, the execution
and
delivery of this Agreement. Holdings and the Subsidiary Parties are affiliates
of the Borrower, will derive substantial benefits from the extension of credit
to the Borrower pursuant to the Credit Agreement and are willing to execute
and
deliver this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01.
Credit
Agreement
.
(a)
Capitalized terms used in this Agreement and not otherwise defined herein have
the respective meanings assigned thereto in the Credit Agreement. All terms
defined in the New York UCC (as defined herein) and not defined in this
Agreement have the meanings specified therein. The term “instrument” shall have
the meaning specified in Article 9 of the New York UCC.
(b)
The
rules
of construction specified in Section 1.02 of the Credit Agreement also apply
to
this Agreement.
Section
1.02.
Other
Defined Terms
.
As used
in this Agreement, the following terms have the meanings specified
below:
“
Account
Debtor
”
means
any person who is or who may become obligated to any Pledgor under, with respect
to or on account of an Account, Chattel Paper, General Intangibles, Instruments
or Investment Property.
“
Article
9 Collateral
”
has
the
meaning assigned to such term in Section 4.01.
“
Collateral
”
means
Article 9 Collateral and Pledged Collateral.
“
Copyright
License
”
means
any written agreement, now or hereafter in effect, granting any right to any
Pledgor under any Copyright now or hereafter owned by any third party, and
all
rights of any Pledgor under any such agreement (including, without limitation,
any such rights that such Pledgor has the right to license).
“
Copyrights
”
means
all of the following now owned or hereafter acquired by any Pledgor: (a) all
copyright rights in any work subject to the copyright laws of the United States
or any other country, whether as author, assignee, transferee or otherwise;
(b)
all registrations and applications for registration of any such Copyright in
the
United States or any other country, including registrations, supplemental
registrations and pending applications for registration in the United States
Copyright Office and the right to obtain all renewals thereof, including those
listed on
Schedule
III
;
(c) all
claims for, and rights to sue for, past or future infringements of any of the
foregoing; and (d) all income, royalties, damages and payments now or hereafter
due and payable with respect to any of the foregoing, including damages and
payments for past or future infringement thereof.
“
Credit
Agreement
”
has
the
meaning assigned to such term in the preliminary statement of this
Agreement.
“
Federal
Securities Laws
”
has
the
meaning assigned to such term in Section 5.03.
“
General
Intangibles
”
means
all “General Intangibles” as defined in the New York UCC, including all choses
in action and causes of action and all other intangible personal property of
any
Pledgor of every kind and nature (other than Accounts) now owned or hereafter
acquired by any Pledgor, including corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, Swap Agreements and other agreements),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any guarantee, claim, security interest or other security held by or granted
to any Pledgor to secure payment by an Account Debtor of any of the
Accounts.
“
Guarantors
”
means,
initially, Holdings and upon the consummation of the Merger, Holdings and the
Subsidiary Parties set forth on
Schedule
I
.
“
Intellectual
Property
”
means
all intellectual property of every kind and nature now owned or hereafter
acquired by any Pledgor, including, inventions, designs, Patents, Copyrights,
Trademarks, Patent Licenses, Copyright Licenses, Trademark Licenses, trade
secrets, domain names, confidential or proprietary technical and business
information, know-how, show-how or other data or information and all related
documentation.
“
Intellectual
Property Security Agreement
”
means
a
security agreement in the form hereof or a short form hereof, in each case,
which form shall be reasonably acceptable to the Administrative
Agent.
“
IP
Agreements
”
means
all material Copyright Licenses, Patent Licenses, Trademark Licenses, and all
other agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any material Intellectual Property
to
which a Pledgor, now or hereafter, is a party or a beneficiary, including,
without limitation, the agreements set forth on
Schedule
III
hereto.
“
Loan
Document Obligations
”
means
(a) the due and punctual payment by the Borrower of (i) the unpaid principal
of
and interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans made to the Borrower,
when
and as due, whether at maturity, by acceleration, upon one or more dates set
for
prepayment or otherwise, (ii) each payment required to be made by the Borrower
under the Credit Agreement in respect of any Letter of Credit, when and as
due,
including payments in respect of reimbursement of disbursements, interest
thereon (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) and obligations to provide cash
collateral and (iii) all other monetary obligations of the Borrower to any
of
the Secured Parties under the Credit Agreement and each of the other Loan
Documents, including obligations to pay fees, expense and reimbursement
obligations and indemnification obligations, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding),
(b)
the due and punctual performance of all other obligations of the Borrower under
or pursuant to the Credit Agreement and each of the other Loan Documents and
(c)
the due and punctual payment and performance of all the obligations of each
other Loan Party under or pursuant to this Agreement and each of the other
Loan
Documents.
“
New
York UCC
”
means
the Uniform Commercial Code as from time to time in effect in the State of
New
York.
“
Obligations
”
means
(a) the Loan Document Obligations, (b) the due and punctual payment and
performance of all obligations of each Loan Party under each Swap Agreement
that
(i) is in effect on the Closing Date with a counterparty that is a Lender or
an
Affiliate of a Lender as of the Closing Date or (ii) is entered into after
the
Closing Date with any counterparty that is a Lender or an Affiliate of a Lender
at the time such Swap Agreement is entered into and (c) the due and punctual
payment and performance of all obligations of the Borrower and any of its
Subsidiaries in respect of overdrafts and related liabilities owed to a Lender
or any of its Affiliates (or any other Person designated by the Borrower as
a
provider of cash management services and entitled to the benefit of this
Agreement) and arising from cash management services (including treasury,
depository, overdraft, credit or debit card, electronic funds transfer, ACH
services and other cash management arrangements).
“
Patent
License
”
means
any written agreement, now or hereafter in effect, granting to any Pledgor
any
right to make, use or sell any invention covered by a Patent, now or hereafter
owned by any third party (including, without limitation, any such rights that
such Pledgor has the right to license).
“
Patents
”
means
all of the following now owned or hereafter acquired by any Pledgor: (a) all
letters patent of the United States or the equivalent thereof in any other
country or jurisdiction, including those listed on
Schedule
III
,
and all
applications for letters patent of the United States or the equivalent thereof
in any other country or jurisdiction, including those listed on
Schedule
III
,
(b) all
provisionals, reissues, extensions, continuations, divisions, continuations-in-
part, reexaminations or revisions thereof, and the inventions disclosed or
claimed therein, including the right to make, use, import and/or sell the
inventions disclosed or claimed therein, (c) all claims for, and rights to
sue
for, past or future infringements of any of the foregoing and (d) all income,
royalties, damages and payments now or hereafter due and payable with respect
to
any of the foregoing, including damages and payments for past or future
infringement thereof.
“
Perfection
Certificate
”
means
the Perfection Certificate with respect to the Pledgors substantially in the
form of
Exhibit
II
,
completed and supplemented with the schedules and attachments contemplated
thereby, and duly executed by a Financial Officer of the Borrower and the chief
legal officer of the Borrower.
“
Permitted
Liens
”
means
any Lien permitted by Section 6.02 of the Credit Agreement.
“
Pledged
Collateral
”
has
the
meaning assigned to such term in Section 3.01.
“
Pledged
Debt Securities
”
has
the
meaning assigned to such term in Section 3.01.
“
Pledged
Securities
”
means
any promissory notes, stock certificates or other certificated securities now
or
hereafter included in the Pledged Collateral, including all certificates,
instruments or other documents representing or evidencing any Pledged
Collateral.
“
Pledged
Stock
”
has
the
meaning assigned to such term in Section 3.01.
“
Pledgor
”
shall
mean, initially, Holdings and BPC Acquisition Corp. and upon the consummation
of
the Merger, Holdings, the Borrower and each Subsidiary Party.
“
Secured
Parties
”
means
(a) the Lenders (and any Affiliate of a Lender designated by the Borrower as
a
provider of cash management services to which any obligation referred to in
clause (c) of the definition of the term “Obligations” is owed), (b) the
Administrative Agent, (c) each Issuing Bank, (d) each counterparty to any Swap
Agreement entered into with a Loan Party or any Affiliate of a Loan Party,
the
obligations under which constitute Obligations, (e) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document
and (f) the successors and permitted assigns of each of the
foregoing.
“
Security
Interest
”
has
the
meaning assigned to such term in Section 4.01.
“
Subsidiary
Party
”
has
the
meaning assigned to such term in the preliminary statement of this Agreement,
and any Subsidiary that becomes a party hereto pursuant to Section
7.16.
“
Trademark
License
”
means
any written agreement, now or hereafter in effect, granting to any Pledgor
any
right to use any Trademark now or hereafter owned by any third party (including,
without limitation, any such rights that such Pledgor has the right to
license).
“
Trademarks
”
means
all of the following now owned or hereafter acquired by any Pledgor: (a) all
trademarks, service marks, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or
business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations thereof (if any),
and all registration and recording applications filed in connection therewith,
including registrations and registration applications in the United States
Patent and Trademark Office or any similar offices in any State of the United
States or any other country or any political subdivision thereof (except for
“intent-to-use” applications for trademark or service mark registrations filed
pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until
an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d)
of
Lanham Act has been filed, to extent, if any, that any assignment of an
“intent-to-use” application prior to such filing would violate the Lanham Act),
and all renewals thereof, including those listed on
Schedule
III
,
(b) all
goodwill associated therewith or symbolized thereby, (c) all claims for, and
rights to sue for, past or future infringements of any of the foregoing and
(d)
all income, royalties, damages and payments now or hereafter due and payable
with respect to any of the foregoing, including damages and payments for past
or
future infringement thereof.
ARTICLE
II
GUARANTEE
Section
2.01.
Guarantee
.
Each Guarantor unconditionally and irrevocably guarantees, jointly with
the other Guarantors and severally, to the Administrative Agent, for the ratable
benefit of the Secured Parties, as a primary obligor and not merely as a surety,
the due and punctual payment and performance of the Obligations. Each Guarantor
further agrees that the Obligations may be extended or renewed, in whole or
in
part, without notice to or further assent from it, and that it will remain
bound
upon its guarantee notwithstanding any extension or renewal of any Obligation.
Each Guarantor waives presentment to, demand of payment from and protest to
the
Borrower or any other Loan Party of any of the Obligations, and also waives
notice of acceptance of its guarantee and notice of protest for
nonpayment.
Section
2.02.
Guarantee
of Payment
.
Each Guarantor further agrees that its guarantee hereunder constitutes a
guarantee of payment when due (whether at the stated maturity, by acceleration
or otherwise) and not of collection, and waives any right to require that any
resort be had by the Administrative Agent or any other Secured Party to any
security held for the payment of the Obligations or to any balance of any
deposit account or credit on the books of the Administrative Agent or any other
Secured Party in favor of the Borrower or any other person.
Section
2.03.
No
Limitations, Etc.
(b)
Except
for termination of a Guarantor’s obligations hereunder as expressly provided for
in Section 7.15, the obligations of each
Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise (other than
defense of payment or performance). Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder, to the fullest extent
permitted by applicable law, shall not be discharged or impaired or otherwise
affected by, and each Guarantor hereby waives any defense to the enforcement
hereof by reason of:
(i)
the
failure of the Administrative Agent or any other Secured Party to assert any
claim or demand or to exercise or enforce any right or remedy under the
provisions of any Loan Document or otherwise;
(ii)
any
rescission, waiver, amendment or modification of, or any release from any of
the
terms or provisions of, any Loan Document or any other agreement, including
with
respect to any other Guarantor under this Agreement;
(iii)
the
failure to perfect any security interest in, or the exchange, substitution,
release or any impairment of, any security held by the Administrative Agent
or
any other Secured Party for the Obligations;
(iv)
any
default, failure or delay, willful or otherwise, in the performance of the
Obligations;
(v)
any
other
act or omission that may or might in any manner or to any extent vary the risk
of any Guarantor or otherwise operate as a discharge of any Guarantor as a
matter of law or equity (other than the payment in full in cash or immediately
available funds of all the Obligations);
(vi)
any
illegality, lack of validity or enforceability of any Obligation;
(vii)
any
change in the corporate existence, structure or ownership of the Borrower,
or
any insolvency, bankruptcy, reorganization or other similar proceeding affecting
the Borrower or its assets or any resulting release or discharge of any
Obligation;
(viii)
the
existence of any claim, set-off or other rights that the Guarantor may have
at
any time against the Borrower, the Administrative Agent, or any other
corporation or person, whether in connection herewith or any unrelated
transactions, provided that nothing herein will prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(ix)
any
action permitted or authorized hereunder; or
(x)
any
other
circumstance (including without limitation, any statute of limitations) or
any
existence of or reliance on any representation by the Administrative Agent
that
might otherwise constitute a defense to, or a legal or equitable discharge
of,
the Borrower or the Guarantor or any other guarantor or surety.
Each
Guarantor expressly authorizes the Secured Parties to take and hold security
for
the payment and performance of the Obligations, to exchange, waive or release
any or all such security (with or without consideration), to enforce or apply
such security and direct the order and manner of any sale thereof in their
sole
discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.
(b)
To
the
fullest extent permitted by applicable law, each Guarantor waives any defense
based on or arising out of any defense of any other Loan Party or the
unenforceability of the Obligations or any part thereof from any cause, or
the
cessation from any cause of the liability of any other Loan Party, other than
the payment in full in cash or immediately available funds of all the
Obligations (other than contingent or unliquidated obligations or liabilities).
The Administrative Agent and the other Secured Parties may, at their election,
foreclose on any security held by one or more of them by one or more judicial
or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Loan Party or exercise any other right or remedy
available to them against any other Loan Party, without affecting or impairing
in any way the liability of any Guarantor hereunder except to the extent the
Obligations (other than contingent or unliquidated obligations or liabilities)
have been paid in full in cash or immediately available funds. To the fullest
extent permitted by applicable law, each Guarantor waives any defense arising
out of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against any other Loan
Party, as the case may be, or any security.
Section
2.04.
Reinstatement
.
Each
Guarantor agrees that its guarantee hereunder shall continue to be effective
or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any Obligation is rescinded or must otherwise be restored by the
Administrative Agent or any other Secured Party upon the bankruptcy or
reorganization of the Borrower or any other Loan Party or
otherwise.
Section
2.05.
Agreement
To Pay; Contribution; Subrogation
.
In
furtherance of the foregoing and not in limitation of any other right that
the
Administrative Agent or any other Secured Party has at law or in equity against
any Guarantor by virtue hereof, upon the failure of the Borrower to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Administrative
Agent for distribution to the applicable Secured Parties in cash the amount
of
such unpaid Obligation. Each Guarantor hereby unconditionally and irrevocably
agrees that in the event any payment shall be required to be made to any Secured
Party under this guarantee or any other guarantee, such Guarantor will
contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid
to the Secured Parties under or in respect of the Loan Documents. Upon payment
by any Guarantor of any sums to the Administrative Agent as provided above,
all
rights of such Guarantor against the Borrower, or other Loan Party or any other
Guarantor arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.
Section
2.06.
Information
.
Each
Guarantor assumes all responsibility for being and keeping itself informed
of
the financial condition and assets of the Borrower and each other Loan Party,
and of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that none of the Administrative Agent
or the other Secured Parties will have any duty to advise such Guarantor of
information known to it or any of them regarding such circumstances or
risks.
Section
2.07.
Maximum
Liability
.
Each
Guarantor, and by its acceptance of this guarantee, the Administrative Agent
and
each Lender hereby confirms that it is the intention of all such Persons that
this guarantee and the Obligations of each Guarantor hereunder not constitute
a
fraudulent transfer or conveyance for purposes of the U.S. Bankruptcy Code
or
any other federal, state or foreign bankruptcy, insolvency, receivership or
similar law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar foreign, federal or state law to the extent
applicable to this guarantee and the Obligations of each Guarantor hereunder.
To
effectuate the foregoing intention, the Administrative Agent, the Lenders and
the Guarantors hereby irrevocably agree that the Obligations of each Guarantor
under this guarantee at any time shall be limited to the maximum amount as
will
result in the Obligations of such Guarantor under this guarantee not
constituting a fraudulent transfer or conveyance.
Section
2.08.
Payment
Free and Clear of Taxes
.
Any and
all payments by or on account of any obligation of any Guarantor hereunder
or
under any other Loan Document shall be made free and clear of, and without
deduction for, any Indemnified Taxes or Other Taxes on the same terms and to
the
same extent that payments by the Borrower and Holdings are required to be made
pursuant to the terms of Section 2.17 of the Credit Agreement. The provisions
of
Section 2.17 of the Credit Agreement shall apply to each Guarantor
mutatis
mutandis
.
ARTICLE
III
PLEDGE
OF
SECURITIES
Section
3.01.
Pledge
.
As
security for the payment or performance, as the case may be, in full of its
Obligations, each Pledgor hereby assigns and pledges to the Administrative
Agent, its successors and permitted assigns, for the ratable benefit of the
Secured Parties, and hereby grants to the Administrative Agent, its successors
and permitted assigns, for the ratable benefit of the Secured Parties, a
security interest in all of such Pledgor’s right, title and interest in, to and
under (a) the Equity Interests directly owned by it (including those listed
on
Schedule
II
)
and any
other Equity Interests obtained in the future by such Pledgor and any
certificates representing all such Equity Interests (the “
Pledged
Stock
”);
provided
that the
Pledged Stock shall not include (i) (A) more than 65% of the issued and
outstanding voting Equity Interests of any “first tier” Foreign Subsidiary
directly owned by such Pledgor, (B) more than 65% of the issued and outstanding
voting Equity Interests of any “first tier” Qualified CFC Holding Company
directly owned by such Pledgor, (C) any issued and outstanding Equity Interest
of any Foreign Subsidiary that is not a “first tier” Foreign Subsidiary, or (D)
any issued and outstanding Equity Interests of any Qualified CFC Holding Company
that is not a “first tier” Qualified CFC Holding Company, (ii) to the extent
applicable law requires that a Subsidiary of such Pledgor
issue
directors’ qualifying shares, such shares or nominee or other similar shares,
(iii) any Equity Interests with respect to which the Collateral and Guarantee
Requirement or the other paragraphs of Section 5.10 of the Credit Agreement
need
not be satisfied by reason of Section 5.10(g) of the Credit Agreement, or (iv)
any Equity Interests of a person that is not directly or indirectly a
Subsidiary; (b) (i) the debt obligations listed opposite the name of such
Pledgor on
Schedule
II
,
(ii)
any debt securities in the future issued to such Pledgor having, in the case
of
each instance of debt securities, an aggregate principal amount in excess of
$3.0 million, and (iii) the certificates, promissory notes and any other
instruments, if any, evidencing such debt securities (the “
Pledged
Debt Securities
”);
(c)
subject to Section 3.05 hereof, all payments of principal or interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or upon
the
conversion of, and all other proceeds received in respect of, the property
referred to in clauses (a) and (b) above; (d) subject to Section 3.05 hereof,
all rights and privileges of such Pledgor with respect to the securities and
other property referred to in clauses (a), (b) and (c) above; and (e) all
proceeds of any of the foregoing (the items referred to in clauses (a) through
(e) above being collectively referred to as the “
Pledged
Collateral
”).
TO
HAVE
AND TO HOLD the Pledged Collateral, together with all right, title, interest,
powers, privileges and preferences pertaining or incidental thereto, unto the
Administrative Agent, its successors and permitted assigns, for the ratable
benefit of the Secured Parties, forever;
subject
,
however
,
to the
terms, covenants and conditions hereinafter set forth.
Section
3.02.
Delivery
of the Pledged Collateral
.
(c)
Each
Pledgor agrees promptly to deliver or cause to be delivered to the
Administrative Agent, for the ratable benefit of the Secured Parties, any and
all Pledged Securities to the extent such Pledged Securities are either
(i) Equity Interests or (ii) in the case of promissory notes or other
instruments evidencing Indebtedness, are required to be delivered pursuant
to
paragraph (b) of this Section 3.02.
(b)
Each
Pledgor will cause any Indebtedness for borrowed money having an aggregate
principal amount in excess of $3.0 million (other than (i) intercompany current
liabilities incurred in the ordinary course of business in connection with
the
cash management operations of Holdings, the Borrower and its Subsidiaries or
(ii) to the extent that a pledge of such promissory note or instrument would
violate applicable law) owed to such Pledgor by any person to be evidenced
by a
duly executed promissory note that is pledged and delivered to the
Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to the terms hereof. To the extent any such promissory note is a demand note,
each Pledgor party thereto agrees, if requested by the Administrative Agent,
to
immediately demand payment thereunder upon an Event of Default specified under
Section 7.01(b), (c), (f), (h) or (i) of the Credit Agreement unless such demand
would not be commercially reasonable or would otherwise expose Pledgor to
liability to the maker.
(c)
Upon
delivery to the Administrative Agent, (i) any Pledged Securities required to
be
delivered pursuant to the foregoing paragraphs (a) and (b) of this Section
3.02
shall be accompanied by stock powers or note powers, as applicable, duly
executed in blank or other instruments of transfer reasonably satisfactory
to
the Administrative Agent and by such other instruments and documents as the
Administrative Agent may reasonably request and (ii) all other property
comprising part of the Pledged Collateral delivered pursuant to the terms of
this
Agreement
shall be accompanied to the extent necessary to perfect the security interest
in
or allow realization on the Pledged Collateral by proper instruments of
assignment duly executed by the applicable Pledgor and such other instruments
or
documents (including issuer acknowledgments in respect of uncertificated
securities) as the Administrative Agent may reasonably request. Each delivery
of
Pledged Securities shall be accompanied by a schedule describing the securities,
which schedule shall be attached hereto as
Schedule
II
(or a
supplement to
Schedule
II
,
as
applicable) and made a part hereof;
provided
that
failure to attach any such schedule hereto shall not affect the validity of
such
pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.
(d)
In
the
event any Pledged Securities constitute uncertificated securities, each Pledgor
shall, pursuant to an agreement in form and substance reasonably satisfactory
to
the Administrative Agent, either (i) cause the issuer to agree to comply with
instructions from the Administrative Agent without further consent of any
Pledgor or (ii) cause the issuer to register the Administrative Agent as the
registered owner of such uncertificated security.
Section
3.03.
Representations,
Warranties and Covenants
.
The
Pledgors, jointly and severally, represent, warrant and covenant to and with
the
Administrative Agent, for the ratable benefit of the Secured Parties,
that:
(a)
Schedule
II
correctly sets forth the percentage of the issued and outstanding shares of
each
class of the Equity Interests of the issuer thereof represented by such Pledged
Stock and includes all Equity Interests, debt securities and promissory notes
or
instruments evidencing Indebtedness required to be (i) pledged in order to
satisfy the Collateral and Guarantee Requirement, or (ii) delivered pursuant
to
Section 3.02;
(b)
the
Pledged Stock and Pledged Debt Securities (solely with respect to Pledged Debt
Securities issued by a person that is not a Subsidiary of Holdings or an
Affiliate of any such subsidiary, to the best of each Pledgor’s knowledge) have
been duly and validly authorized and issued by the issuers thereof and (i)
in
the case of Pledged Stock, are fully paid and nonassessable and (ii) in the
case
of Pledged Debt Securities (solely with respect to Pledged Debt Securities
issued by a person that is not a Subsidiary of Holdings or an Affiliate of
any
such subsidiary, to the best of each Pledgor’s knowledge) are legal, valid and
binding obligations of the issuers thereof, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, general
equitable principles (whether considered in a proceeding at law or in equity)
and an implied covenant of good faith and fair dealing;
(c)
except
for the security interests granted hereunder, each Pledgor (i) is and, subject
to any transfers made in compliance with the Credit Agreement, will continue
to
be the direct owner, beneficially and of record, of the Pledged Securities
indicated on
Schedule
II
as owned
by such Pledgor, (ii) holds the same free and clear of all Liens, other than
Permitted Liens, (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or permit to exist any security interest in or other
Lien
on, the Pledged Collateral, other than pursuant to a transaction permitted
by
the Credit Agreement and other than Permitted Liens and (iv) subject to the
rights of such Pledgor
under
the
Loan Documents to dispose of Pledged Collateral, will use commercially
reasonable efforts to defend its title or interest hereto or therein against
any
and all Liens (other than Permitted Liens), however arising, of all
persons;
(d)
other
than as set forth in the Credit Agreement or the schedules thereto, and except
for restrictions and limitations imposed by the Loan Documents or securities
laws generally or otherwise permitted to exist pursuant to the terms of the
Credit Agreement, the Pledged Stock (other than partnership interests) is and
will continue to be freely transferable and assignable, and none of the Pledged
Stock is or will be subject to any option, right of first refusal, shareholders
agreement, charter or by-law provisions or contractual restriction of any nature
that might prohibit, impair, delay or otherwise affect the pledge of such
Pledged Stock hereunder, the sale or disposition thereof pursuant hereto or
the
exercise by the Administrative Agent of rights and remedies
hereunder;
(e)
each
Pledgor has the power and authority to pledge the Pledged Collateral pledged
by
it hereunder in the manner hereby done or contemplated;
(f)
other
than as set forth in the Credit Agreement or the schedules thereto, no consent
or approval of any Governmental Authority, any securities exchange or any other
person was or is necessary to the validity of the pledge effected hereby (or
the
transfer of the Pledged Securities upon a foreclosure thereof (other than
compliance with any securities law applicable to the transfer of securities),
in
each case other than such as have been obtained and are in full force and
effect;
(g)
by
virtue
of the execution and delivery by the Pledgors of this Agreement and the Foreign
Pledge Agreements, when any Pledged Securities (including Pledged Stock of
any
Domestic Subsidiary or any Qualified CFC Holding Company and any foreign stock
covered by a Foreign Pledge Agreement) are delivered to the Administrative
Agent, for the ratable benefit of the Secured Parties, in accordance with this
Agreement and a financing statement covering such Pledge Securities is filed
in
the appropriate filing office, the Administrative Agent will obtain, for the
ratable benefit of the Secured Parties, a legal, valid and perfected lien upon
and security interest in such Pledged Securities under the New York UCC, subject
only to Permitted Liens permitted under the Credit Agreement, as security for
the payment and performance of the Obligations;
(h)
each
Pledgor that is an issuer of the Pledged Collateral confirms that it has
received notice of the security interest granted hereunder and consents to
such
security interest and agrees to transfer record ownership of the securities
issued by it in connection with any request by the Administrative Agent;
(i)
as
of the
Closing Date, each of the Equity Interests in limited liability companies or
partnerships that is pledged by the Pledgors hereunder constitutes a security
under Section 8-103 of the Uniform Commercial Code or the corresponding code
or
statute of any other applicable jurisdiction; and
(j)
the
Pledgors shall not amend, or permit to be amended, the limited liability company
agreement (or operating agreement or similar agreement) or partnership agreement
of any Subsidiary of any Loan Party whose Equity Interests are, or are required
to be, Collateral in a manner to cause such Equity Interests to not constitute
a
security under Section 8-103 of the Uniform Commercial Code in the State of
New
York or the corresponding code or statute of any other applicable jurisdiction
unless such Loan Party shall have first delivered 30 days written notice to
the
Administrative Agent and shall have taken all actions contemplated hereby and
as
otherwise reasonably required by the Administrative Agent to maintain the
security interest of the Administrative Agent therein as a valid, perfected,
first priority security interest.
Section
3.04.
Registration
in Nominee Name; Denominations
.
The
Administrative Agent, on behalf of the Secured Parties, shall have the right
(in
its sole and absolute discretion) to hold the Pledged Securities in the name
of
the applicable Pledgor, endorsed or assigned in blank or in favor of the
Administrative Agent or, if an Event of Default shall have occurred and be
continuing, in its own name as pledgee or the name of its nominee (as pledgee
or
as sub-agent). Each Pledgor will promptly give to the Administrative Agent
copies of any notices or other communications received by it with respect to
Pledged Securities registered in the name of such Pledgor. If an Event of
Default shall have occurred and be continuing, the Administrative Agent shall
have the right to exchange the certificates representing Pledged Securities
for
certificates of smaller or larger denominations for any purpose consistent
with
this Agreement. Each Pledgor shall use its commercially reasonable efforts
to
cause any Loan Party that is not a party to this Agreement to comply with a
request by the Administrative Agent, pursuant to this Section 3.04, to exchange
certificates representing Pledged Securities of such Loan Party for certificates
of smaller or larger denominations.
Section
3.05.
Voting
Rights; Dividends and Interest, Etc.
(a)
Unless
and until an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the relevant Pledgors of the
Administrative Agent’s intention to exercise its rights hereunder:
(i)
Each
Pledgor shall be entitled to exercise any and all voting and/or other consensual
rights and powers inuring to an owner of Pledged Collateral or any part thereof
for any purpose consistent with the terms of this Agreement, the Credit
Agreement and the other Loan Documents;
provided
,
that,
except as expressly permitted under the Credit Agreement, such rights and powers
shall not be exercised in any manner that could materially and adversely affect
the rights inuring to a holder of any Pledged Collateral, the rights and
remedies of any of the Administrative Agent or the other Secured Parties under
this Agreement, the Credit Agreement or any other Loan Document or the ability
of the Secured Parties to exercise the same.
(ii)
The
Administrative Agent shall promptly execute and deliver to each Pledgor, or
cause to be executed and delivered to such Pledgor, all such proxies, powers
of
attorney and other instruments as such Pledgor may reasonably request for the
purpose of enabling such Pledgor to exercise the voting and/or consensual rights
and powers it is entitled to exercise pursuant to subparagraph (i)
above.
(iii)
Each
Pledgor shall be entitled to receive and retain any and all dividends, interest,
principal and other distributions paid on or distributed in respect of the
Pledged Collateral to the extent and only to the extent that such dividends,
interest, principal and other distributions are permitted by, and otherwise
paid
or distributed in accordance with, the terms and conditions of the Credit
Agreement, the other Loan Documents and applicable laws;
provided
,
that
(A) any noncash dividends, interest, principal or other distributions, payments
or other consideration in respect thereof, including any rights to receive
the
same to the extent not so distributed or paid, that would constitute Pledged
Securities to the extent such Pledgor has the rights to receive such Pledged
Securities if they were declared, distributed and paid on the date of this
Agreement, whether resulting from a subdivision, combination or reclassification
of the outstanding Equity Interests of the issuer of any Pledged Securities,
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or otherwise or
(B)
any non-cash dividends and other distributions paid or payable in respect of
any
Pledged Securities that would constitute Pledged Securities to the extent such
Pledgor has the rights to receive such Pledged Securities if they were declared,
distributed and paid on the date of this Agreement, in connection with a partial
or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid in surplus, shall be and become part of the
Pledged Collateral, and, if received by any Pledgor, shall not be commingled
by
such Pledgor with any of its other funds or property but shall be held separate
and apart therefrom, shall be held in trust for the benefit of the
Administrative Agent, for the ratable benefit of the Secured Parties, and shall
be forthwith delivered to the Administrative Agent, for the ratable benefit
of
the Secured Parties, in the same form as so received (endorsed in a manner
reasonably satisfactory to the Administrative Agent).
(b)
Upon
the
occurrence and during the continuance of an Event of Default and after notice
by
the Administrative Agent to the Borrower of the Administrative Agent’s intention
to exercise its rights hereunder, all rights of any Pledgor to dividends,
interest, principal or other distributions that such Pledgor is authorized
to
receive pursuant to paragraph (a)(iii) of this Section 3.05 shall cease, and
all
such rights shall thereupon become vested, for the ratable benefit of the
Secured Parties, in the Administrative Agent which shall have the sole and
exclusive right and authority to receive and retain such dividends, interest,
principal or other distributions. All dividends, interest, principal or other
distributions received by any Pledgor contrary to the provisions of this Section
3.05 shall not be commingled by such Pledgor with any of its other funds or
property but shall be held separate and apart therefrom, shall be held in trust
for the benefit of the Administrative Agent, for the ratable benefit of the
Secured Parties, and shall be forthwith delivered to the Administrative Agent,
for the ratable benefit of the Secured Parties, in the same form as so received
(endorsed in a manner reasonably satisfactory to the Administrative Agent).
Any
and all money and other property paid over to or received by the Administrative
Agent pursuant to the provisions of this paragraph (b) shall be retained by
the
Administrative Agent in an account to be established by the Administrative
Agent
upon receipt of such money or other property and shall be applied in accordance
with the provisions of Section 5.02 hereof. After all Events of Default have
been cured or waived and the Borrower has delivered to the Administrative Agent
a certificate to that effect, the Administrative Agent shall promptly repay
to
each Pledgor (without interest) all dividends, interest, principal or
other
distributions
that such Pledgor would otherwise be permitted to retain pursuant to the terms
of paragraph (a)(iii) of this Section 3.05 and that remain in such
account.
(c)
Upon
the
occurrence and during the continuance of an Event of Default and after notice
by
the Administrative Agent to the Borrower of the Administrative Agent’s intention
to exercise its rights hereunder, all rights of any Pledgor to exercise the
voting and/or consensual rights and powers it is entitled to exercise pursuant
to paragraph (a)(i) of this Section 3.05, and the obligations of the
Administrative Agent under paragraph (a)(ii) of this Section 3.05, shall cease,
and all such rights shall thereupon become vested in the Administrative Agent,
for the ratable benefit of the Secured Parties, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights
and
powers;
provided
that,
unless otherwise directed by the Required Lenders, the Administrative Agent
shall have the right from time to time following and during the continuance
of
an Event of Default to permit the Pledgors to exercise such rights. After all
Events of Default have been cured or waived and the Borrower has delivered
to
the Administrative Agent a certificate to that effect, each Pledgor shall have
the right to exercise the voting and/or consensual rights and powers that such
Pledgor would otherwise be entitled to exercise pursuant to the terms of
paragraph (a)(i) above.
ARTICLE
IV
SECURITY
INTERESTS IN OTHER PERSONAL PROPERTY
Section
4.01.
Security
Interest
.
(a)
As
security for the payment or performance when due (whether at the stated
maturity, by acceleration or otherwise), as the case may be, in full of its
Obligations, each Pledgor, other than Holdings (all references to a Pledgor
or
to the Pledgors in the Article IV shall be deemed to be a reference to each
Pledgor other than Holdings) hereby assigns and pledges to the Administrative
Agent, its successors and permitted assigns, for the ratable benefit of the
Secured Parties, and hereby grants to the Administrative Agent, its successors
and permitted assigns, for the ratable benefit of the Secured Parties, a
security interest (the “
Security
Interest
”)
in all
right, title and interest in or to any and all of the following assets and
properties now owned or at any time hereafter acquired by such Pledgor or in
which such Pledgor now has or at any time in the future may acquire any right,
title or interest (collectively, the “
Article
9 Collateral
”):
(i)
all
Accounts;
(ii)
all
Chattel Paper;
(iii)
all
cash
and Deposit Accounts;
(iv)
all
Documents;
(v)
all
Equipment;
(vi)
all
General Intangibles;
(vii)
all
Instruments;
(viii)
all
Inventory and all other Goods not otherwise described above;
(ix)
all
Investment Property;
(x)
all
Letter of Credit Rights;
(xi)
all
Commercial Tort Claims;
(xii)
all
other
personal property not otherwise described above (except for property
specifically excluded from any defined term used in any of the foregoing
clauses);
(xiii)
all
books
and records pertaining to the Article 9 Collateral; and
(xiv)
to
the
extent not otherwise included, all proceeds, Supporting Obligations and products
of any and all of the foregoing and all collateral security and guarantees
given
by any person with respect to any of the foregoing.
Notwithstanding
anything to the contrary in this Agreement, this Agreement shall not constitute
a grant of a security interest in (a) any vehicle covered by a certificate
of
title or ownership, whether now owned or hereafter acquired, (b) any assets
(including Equity Interests), whether now owned or hereafter acquired, with
respect to which the Collateral and Guarantee Requirement or the other
paragraphs of Section 5.10 of the Credit Agreement would not be required to
be
satisfied by reason of Section 5.10(g) of the Credit Agreement if hereafter
acquired, (c) any property excluded from the definition of Pledged Collateral
by
virtue of the proviso to Section 3.01 hereof, (d) any Letter of Credit Rights
to
the extent any Pledgor, is required by applicable law to apply the proceeds
of a
drawing of such Letter of Credit for a specified purpose (e) any Pledgor’s
right, title or interest in any license, contract or agreement to which such
Pledgor is a party or any of its right, title or interest thereunder to the
extent, but only to the extent, that such a grant would, under the terms of
such
license, contract or agreement, result in a breach of the terms of, or
constitute a default under, or result in the abandonment, invalidation or
unenforceability of, any license, contract or agreement to which such Pledgor
is
a party (other than to the extent that any such term would be rendered
ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the New York
UCC
or any other applicable law (including, without limitation, Title 11 of the
United States Code) or principles of equity);
provided
,
that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect or (f) any Equipment owned by any Pledgor
that is subject to a purchase money lien or a Capital Lease Obligation if the
contract or other agreement in which such Lien is granted (or the documentation
providing for such Capital Lease Obligation) prohibits or requires the consent
of any person other than the Pledgors as a condition to the creation of any
other security interest on such Equipment.
(b)
Each
Pledgor, hereby irrevocably authorizes the Administrative Agent at any time
and
from time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Article 9 Collateral
or any part thereof and amendments thereto that contain the information required
by Article 9 of the Uniform
Commercial
Code of each applicable jurisdiction for the filing of any financing statement
or amendment, including (i) whether such Pledgor is an organization, the type
of
organization and any organizational identification number issued to such
Pledgor, (ii) in the case of a financing statement filed as a fixture filing,
a
sufficient description of the real property to which such Article 9 Collateral
relates and (iii) a description of collateral that describes such property
in
any other manner as the Administrative Agent may reasonably determine is
necessary or advisable to ensure the perfection of the security interest in
the
Article 9 Collateral granted under this Agreement, including describing such
property as “all assets” or “all property”. Each Pledgor, agrees to provide such
information to the Administrative Agent promptly upon request.
The
Administrative Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be reasonably
necessary or advisable for the purpose of perfecting, confirming, continuing,
enforcing or protecting the Security Interest granted by each Pledgor, without
the signature of such Pledgor, and naming such Pledgor or the Pledgors as
debtors and the Administrative Agent as secured party.
(c)
The
Security Interest is granted as security only and shall not subject the
Administrative Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Pledgor with respect to or arising
out of the Article 9 Collateral.
Section
4.02.
Representations
and Warranties
.
The
Pledgors jointly and severally represent and warrant to the Administrative
Agent
and the Secured Parties that:
(a)
Each
Pledgor has good and valid rights in and title to the Article 9 Collateral
with
respect to which it has purported to grant a Security Interest hereunder and
has
full power and authority to grant to the Administrative Agent the Security
Interest in such Article 9 Collateral pursuant hereto and to execute, deliver
and perform its obligations in accordance with the terms of this Agreement,
without the consent or approval of any other person other than any consent
or
approval that has been obtained and is in full force and effect or has otherwise
been disclosed herein or in the Credit Agreement.
(b)
The
Perfection Certificate has been duly prepared, completed and executed and the
information set forth therein, including the exact legal name of each Pledgor,
is correct and complete, in all material respects, as of the Closing Date.
The
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations containing
a description of the Article 9 Collateral that have been prepared by the
Administrative Agent based upon the information provided to the Administrative
Agent in the Perfection Certificate for filing in each governmental, municipal
or other office specified in
Schedule
IV
(or
specified by notice from the Borrower to the Administrative Agent after the
Closing Date in the case of filings, recordings or registrations required by
Section 5.10 of the Credit Agreement) constitute all the filings, recordings
and
registrations (other than filings required to be made in the United States
Patent and Trademark Office and the United States Copyright Office in order
to
perfect the Security Interest in Article 9 Collateral consisting of
United
States
Patents, United States registered Trademarks and United States registered
Copyrights) that are necessary to publish notice of and protect the validity
of
and to establish a legal, valid and perfected security interest in favor of
the
Administrative Agent (for the ratable benefit of the Secured Parties) in respect
of all Article 9 Collateral in which the Security Interest may be perfected
by
filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or
amendments. Each Pledgor represents and warrants that a fully executed
Intellectual Property Security Agreement containing a description of all Article
9 Collateral consisting of Intellectual Property with respect to United States
Patents (and Patents for which United States registration applications are
pending), United States registered Trademarks (and Trademarks for which United
States registration applications are pending) and United States registered
Copyrights (and Copyrights for which United States registration applications
are
pending) has been delivered to the Administrative Agent for recording with
the
United States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the
regulations thereunder, as applicable, and reasonably requested by the
Administrative Agent, to protect the validity of and to establish a legal,
valid
and perfected security interest in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, in respect of all Article 9 Collateral
consisting of such Intellectual Property in which a security interest may be
perfected by recording with the United States Patent and Trademark Office and
the United States Copyright Office, and no further or subsequent filing,
refiling, recording, rerecording, registration or reregistration is necessary
(other than such actions as are necessary to perfect the Security Interest
with
respect to any Article 9 Collateral consisting of Patents, Trademarks and
Copyrights (or registration or application for registration thereof) acquired
or
developed after the date hereof).
(c)
The
Security Interest constitutes (i) a legal and valid security interest in all
the
Article 9 Collateral securing the payment and performance of the Obligations,
(ii) subject to the filings described in Section 4.02(b), a perfected security
interest in all Article 9 Collateral in which a security interest may be
perfected by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other
applicable law in such jurisdictions and (iii) a security interest that shall
be
perfected in all Article 9 Collateral in which a security interest may be
perfected upon the receipt and recording of the Intellectual Property Security
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable. The Security Interest is and shall
be
prior to any other Lien on any of the Article 9 Collateral other than Permitted
Liens.
(d)
The
Article 9 Collateral is owned by the Guarantors free and clear of any Lien,
other than Permitted Liens. None of the Pledgors has filed or consented to
the
filing of (i) any financing statement or analogous document under the Uniform
Commercial Code or any other applicable laws covering any Article 9 Collateral,
(ii) any assignment in which any Pledgor assigns any Article 9 Collateral or
any
security
agreement
or similar instrument covering any Article 9 Collateral with the United States
Patent and Trademark Office or the United States Copyright Office or (iii)
any
assignment in which any Pledgor assigns any Article 9 Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with any
foreign governmental, municipal or other office, which financing statement
or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Permitted Liens.
(e)
None
of
the Pledgors holds any Commercial Tort Claim individually in excess of $3.0
million as of the Closing Date except as indicated on the Perfection
Certificate.
(f)
Except
as
set forth in the Perfection Certificate, as of the Closing Date, all Accounts
have been originated by the Pledgors and all Inventory has been produced or
acquired by the Pledgors in the ordinary course of business.
(g)
As
to
itself and its Article 9 Collateral consisting of Intellectual Property (the
“
Intellectual
Property Collateral
”),
to
the best of each Pledgor’s knowledge:
(i)
The
Intellectual Property Collateral set forth on
Schedule
III
includes
all of the material Patents, domain names, Trademarks, Copyrights and IP
Agreements owned by such Pledgor as of the date hereof.
(ii)
The
Intellectual Property Collateral is subsisting and has not been adjudged invalid
or unenforceable in whole or part, and to the best of such Pledgor’s knowledge,
is valid and enforceable, except as would not reasonably be expected to have
a
Material Adverse Effect. Such Pledgor is not aware of any uses of any item
of
Intellectual Property Collateral that would be expected to lead to such item
becoming invalid or unenforceable, except as would not reasonably be expected
to
have a Material Adverse Effect.
(iii)
Such
Pledgor has made or performed all commercially reasonable acts, including
without limitation filings, recordings and payment of all required fees and
taxes, required to maintain and protect its interest in each and every item
of
Intellectual Property Collateral in full force and effect in the United States
and such Pledgor has used proper statutory notice in connection with its use
of
each Patent, Trademark and Copyright in the Intellectual Property Collateral,
in
each case, except to the extent that the failure to do so would not reasonably
be expected to have a Material Adverse Effect.
(iv)
With
respect to each IP Agreement, the absence, termination or violation of which
would reasonably be expected to have a Material Adverse Effect: (A) such Pledgor
has not received any notice of termination or cancellation under such IP
Agreement; (B) such Pledgor has not received any notice of a breach or default
under such IP Agreement, which breach or default has not been cured or waived;
and (C) neither such Pledgor nor any other party to such IP Agreement is in
breach or default thereof in any material respect, and no
event
has
occurred that, with notice or lapse of time or both, would constitute such
a
breach or default or permit termination, modification or acceleration under
such
IP Agreement.
(v)
Except
as
would not reasonably be expected to have a Material Adverse Effect, no Pledgor
or Intellectual Property Collateral is subject to any outstanding consent,
settlement, decree, order, injunction, judgment or ruling restricting the use
of
any Intellectual Property Collateral or that would impair the validity or
enforceability of such Intellectual Property Collateral.
Section
4.03.
Covenants
.
(a)
Each
Pledgor agrees promptly to notify the Administrative Agent in writing of any
change (i) in its corporate or organization name, (ii) in its identity or type
of organization or corporate structure, (iii) in its Federal Taxpayer
Identification Number or organizational identification number or (iv) in its
jurisdiction of organization. Each Pledgor agrees promptly to provide the
Administrative Agent with certified organizational documents reflecting any
of
the changes described in the immediately preceding sentence. Each Pledgor agrees
not to effect or permit any change referred to in the first sentence of this
paragraph (a) unless all filings have been made, or will have been made within
any applicable statutory period, under the Uniform Commercial Code or otherwise
that are required in order for the Administrative Agent to continue at all
times
following such change to have a valid, legal and perfected first priority
security interest in all the Article 9 Collateral, for the ratable benefit
of
the Secured Parties. Each Pledgor agrees promptly to notify the Administrative
Agent if any material portion of the Article 9 Collateral owned or held by
such
Pledgor is damaged or destroyed.
(b)
Subject
to the rights of such Pledgor under the Loan Documents to dispose of Collateral,
each Pledgor shall, at its own expense, use commercially reasonable efforts
to
defend title to the Article 9 Collateral against all persons and to defend
the
Security Interest of the Administrative Agent, for the ratable benefit of the
Secured Parties, in the Article 9 Collateral and the priority thereof against
any Lien that is not a Permitted Lien.
(c)
Each
Pledgor agrees, at its own expense, to execute, acknowledge, deliver and cause
to be duly filed all such further instruments and documents and take all such
actions as the Administrative Agent may from time to time reasonably request
to
better assure, preserve, protect, defend and perfect the first priority Security
Interest and the rights and remedies created hereby, including, without
limitation, the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement and the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith. If any amount payable
under or in connection with any of the Article 9 Collateral that is in excess
of
$3.0 million shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be promptly pledged and delivered
to
the Administrative Agent, for the ratable benefit of the Secured Parties, duly
endorsed in a manner reasonably satisfactory to the Administrative
Agent.
Without
limiting the generality of the foregoing, each Pledgor hereby authorizes the
Administrative Agent, with prompt notice thereof to the Pledgors, to supplement
this Agreement by supplementing
Schedule
III
or
adding additional schedules hereto to specifically
identify
any asset or item that may constitute material Copyrights, Patents, Trademarks,
Copyright Licenses, Patent Licenses or Trademark Licenses;
provided
that any
Pledgor shall have the right, exercisable within 30 days after the Borrower
has
been notified by the Administrative Agent of the specific identification of
such
Article 9 Collateral, to advise the Administrative Agent in writing of any
inaccuracy of the representations and warranties made by such Pledgor hereunder
with respect to such Article 9 Collateral. Each Pledgor agrees that it will
use
its commercially reasonable efforts to take such action as shall be necessary
in
order that all representations and warranties hereunder shall be true and
correct with respect to such Article 9 Collateral within 30 days after the
date
it has been notified by the Administrative Agent of the specific identification
of such Article 9 Collateral.
(d)
After
the
occurrence of an Event of Default and during the continuance thereof, the
Administrative Agent shall have the right to verify under reasonable procedures
the validity, amount, quality, quantity, value, condition and status of, or
any
other matter relating to, the Article 9 Collateral, including, in the case
of
Accounts or Article 9 Collateral in the possession of any third person, by
contacting Account Debtors or the third person possessing such Article 9
Collateral for the purpose of making such a verification. The Administrative
Agent shall have the right to share any information it gains from such
inspection or verification with any Secured Party.
(e)
At
its
option, the Administrative Agent may discharge past due taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time
levied or placed on the Article 9 Collateral and not a Permitted Lien, and
may
pay for the maintenance and preservation of the Article 9 Collateral to the
extent any Pledgor fails to do so as required by the Credit Agreement or this
Agreement, and each Pledgor jointly and severally agrees to reimburse the
Administrative Agent on demand for any reasonable payment made or any reasonable
expense incurred by the Administrative Agent pursuant to the foregoing
authorization;
provided
,
however
,
that
nothing in this Section 4.03(e) shall be interpreted as excusing any Pledgor
from the performance of, or imposing any obligation on the Administrative Agent
or any Secured Party to cure or perform, any covenants or other promises of
any
Pledgor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.
(f)
Each
Pledgor (rather than the Administrative Agent or any Secured Party) shall remain
liable for the observance and performance of all the conditions and obligations
to be observed and performed by it under each contract, agreement or instrument
relating to the Article 9 Collateral and each Pledgor jointly and severally
agrees to indemnify and hold harmless the Administrative Agent and the Secured
Parties from and against any and all liability for such
performance.
(g)
None
of
the Pledgors shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral, except as expressly permitted by the Credit
Agreement. None of the Pledgors shall make or permit to be made any transfer
of
the Article 9 Collateral and each Pledgor shall remain at all times in
possession of the Article 9 Collateral owned by it, except as permitted by
the
Credit Agreement.
(h)
None
of
the Pledgors will, without the Administrative Agent’s prior written consent
(which consent shall not be unreasonably withheld), grant any extension of
the
time of payment of any Accounts included in the Article 9 Collateral,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises or settlements granted or made in the ordinary course
of
business and consistent with prudent business practices.
(i)
Each
Pledgor irrevocably makes, constitutes and appoints the Administrative Agent
(and all officers, employees or agents designated by the Administrative Agent)
as such Pledgor’s true and lawful agent (and attorney-in-fact) for the purpose,
during the continuance of an Event of Default, of making, settling and adjusting
claims in respect of Article 9 Collateral under policies of insurance, endorsing
the name of such Pledgor on any check, draft, instrument or other item of
payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that any Pledgor
at any time or times shall fail to obtain or maintain any of the policies of
insurance required hereby or to pay any premium in whole or part relating
thereto, the Administrative Agent may, without waiving or releasing any
obligation or liability of the Pledgors hereunder or any Event of Default,
in
its sole discretion, obtain and maintain such policies of insurance and pay
such
premium and take any other actions with respect thereto as the Administrative
Agent reasonably deems advisable. All sums disbursed by the Administrative
Agent
in connection with this Section 4.03(i), including reasonable attorneys’ fees,
court costs, expenses and other charges relating thereto, shall be payable,
upon
demand, by the Pledgors to the Administrative Agent and shall be additional
Obligations secured hereby.
Section
4.04.
Other
Actions
.
In
order to further ensure the attachment, perfection and priority of, and the
ability of the Administrative Agent to enforce, for the ratable benefit of
the
Secured Parties, the Administrative Agent’s security interest in the Article 9
Collateral, each Pledgor agrees, in each case at such Pledgor’s own expense, to
take the following actions with respect to the following Article 9
Collateral:
(a)
Instruments
and Tangible Chattel Paper
.
If any
Pledgor shall at any time hold or acquire any Instruments (other than checks
received and processed in the ordinary course of business) or Tangible Chattel
Paper evidencing an amount in excess of $3.0 million, such Pledgor shall
forthwith endorse, assign and deliver the same to the Administrative Agent,
accompanied by such instruments of transfer or assignment duly executed in
blank
as the Administrative Agent may from time to time reasonably
request.
(b)
Investment
Property
.
Except
to the extent otherwise provided in
Article
III
,
if any
Pledgor shall at any time hold or acquire any Certificated Security, such
Pledgor shall forthwith endorse, assign and deliver the same to the
Administrative Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Administrative Agent may from time to time
reasonably specify. If any security of a domestic issuer now owned or hereafter
acquired by any Pledgor is uncertificated and is issued to such Pledgor or
its
nominee directly by the issuer thereof, such Pledgor shall promptly notify
the
Administrative Agent of such uncertificated securities and (a) upon the
Administrative Agent’s reasonable request and (b) upon the occurrence and
during
the
continuance of an Event of Default, pursuant to an agreement in form and
substance reasonably satisfactory to the Administrative Agent, either (i) cause
the issuer to agree to comply with instructions from the Administrative Agent
as
to such security, without further consent of any Pledgor or such nominee, or
(ii) cause the issuer to register the Administrative Agent as the registered
owner of such security.
(c)
Commercial
Tort Claims
.
If any
Pledgor shall at any time hold or acquire a Commercial Tort Claim in an amount
reasonably estimated to exceed $2.0 million, such Pledgor shall promptly notify
the Administrative Agent thereof in a writing signed by such Pledgor, including
a summary description of such claim, and grant to the Administrative Agent
in
writing a security interest therein and in the proceeds thereof, all under
the
terms and provisions of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Administrative Agent.
Section
4.05.
Covenants
Regarding Patent, Trademark and Copyright Collateral
.
(a)
Each
Pledgor agrees that it will not knowingly do any act or omit to do any act
(and
will exercise commercially reasonable efforts to prevent its licensees from
doing any act or omitting to do any act) whereby any Patent that is material
to
the normal conduct of such Pledgor’s business may become prematurely
invalidated, abandoned, lapsed or dedicated to the public, and agrees that
it
shall take commercially reasonable steps with respect to any material products
covered by any such Patent as necessary and sufficient to establish and preserve
its rights under applicable patent laws.
(b)
Each
Pledgor will, and will use its commercially reasonable efforts to cause its
licensees or its sublicensees to, for each material Trademark necessary to
the
normal conduct of such Pledgor’s business, (i) maintain such Trademark in full
force free from any adjudication of abandonment or invalidity for non-use,
(ii)
maintain the quality of products and services offered under such Trademark,
(iii) display such Trademark with notice of federal or foreign registration
or
claim of trademark or service mark as required under applicable law and (iv)
not
knowingly use or knowingly permit its licensees’ use of such Trademark in
violation of any third-party rights.
(c)
Each
Pledgor will, and will use its commercially reasonable efforts to cause its
licensees or its sublicensees to, for each work covered by a material Copyright
necessary to the normal conduct of such Pledgor’s business that it publishes,
displays and distributes, use copyright notice as required under applicable
copyright laws.
(d)
Each
Pledgor shall notify the Administrative Agent promptly if it knows that any
Patent, Trademark or Copyright material to the normal conduct of such Pledgor’s
business may imminently become abandoned, lapsed or dedicated to the public,
or
of any materially adverse determination or development, excluding office actions
and similar determinations or developments in the United States Patent and
Trademark Office, United States Copyright Office, any court or any similar
office of any country, regarding such Pledgor’s ownership of any such material
Patent, Trademark or Copyright or its right to register or to maintain the
same.
(e)
Each
Pledgor, either itself or through any agent, employee, licensee or designee,
shall (i) inform the Administrative Agent on an annual basis of each application
by itself, or through any agent, employee, licensee or designee, for any Patent
with the United States Patent and Trademark Office and each registration of
any
Trademark or Copyright with the United States Patent and Trademark Office,
the
United States Copyright Office or any comparable office or agency in any other
country filed during the preceding twelve-month period, and (ii) execute and
deliver any and all agreements, instruments, documents and papers necessary
or
as the Administrative Agent may otherwise reasonably request to evidence the
Administrative Agent’s security interest in such Patent, Trademark or Copyright
and the perfection thereof.
(f)
Each
Pledgor shall exercise its reasonable business judgment consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any comparable office or agency in any
other country with respect to maintaining and pursuing each application relating
to any Patent, Trademark and/or Copyright (and obtaining the relevant grant
or
registration) material to the normal conduct of such Pledgor’s business and to
maintain (i) each issued Patent and (ii) the registrations of each Trademark
and
each Copyright that is material to the normal conduct of such Pledgor’s
business, including, when applicable and necessary in such Pledgor’s reasonable
business judgment, timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
any
Pledgor believes necessary in its reasonable business judgment, to initiate
opposition, interference and cancellation proceedings against third
parties.
(g)
In
the
event that any Pledgor knows or has reason to know that any Article 9
Collateral consisting of a Patent, Trademark or Copyright material to the normal
conduct of its business has been or is about to be materially infringed,
misappropriated or diluted by a third party, such Pledgor shall promptly notify
the Administrative Agent and shall, if such Pledgor deems it necessary in its
reasonable business judgment, promptly sue and recover any and all damages,
and
take such other actions as are reasonably appropriate under the
circumstances.
ARTICLE
V
REMEDIES
Section
5.01.
Remedies
Upon Default
.
Upon
the occurrence and during the continuance of an Event of Default, each Pledgor
agrees to deliver each item of Collateral to the Administrative Agent on demand,
and it is agreed that the Administrative Agent shall have the right to take
any
of or all the following actions at the same or different times: (a) with respect
to any Article 9 Collateral consisting of Intellectual Property, on demand,
to
cause the Security Interest to become an assignment, transfer and conveyance
of
any of or all such Article 9 Collateral by the applicable Pledgors to the
Administrative Agent or to license or sublicense, whether general, special
or
otherwise, and whether on an exclusive or a nonexclusive basis, any such Article
9 Collateral throughout the world on such terms and conditions and in such
manner as the Administrative Agent shall determine (other than in violation
of
any then-existing licensing arrangements to the extent that waivers thereunder
cannot be obtained with the use of
commercially
reasonable efforts, which each Pledgor hereby agrees to use) and (b) with or
without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to the applicable Pledgor to enter any premises where
the
Article 9 Collateral may be located for the purpose of taking possession of
or
removing the Article 9 Collateral and, generally, to exercise any and all rights
afforded to a secured party under the applicable Uniform Commercial Code or
other applicable law or in equity. Without limiting the generality of the
foregoing, each Pledgor agrees that the Administrative Agent shall have the
right, subject to the mandatory requirements of applicable law, to sell or
otherwise dispose of all or any part of the Collateral at a public or private
sale or at any broker’s board or on any securities exchange, for cash, upon
credit or for future delivery as the Administrative Agent shall deem
appropriate. The Administrative Agent shall be authorized in connection with
any
sale of a security (if it deems it advisable to do so) pursuant to the foregoing
to restrict the prospective bidders or purchasers to persons who represent
and
agree that they are purchasing such security for their own account, for
investment, and not with a view to the distribution or sale thereof. Upon
consummation of any such sale of Collateral pursuant to this Section 5.01 the
Administrative Agent shall have the right to assign, transfer and deliver to
the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser
at
any such sale shall hold the property sold absolutely, free from any claim
or
right on the part of any Pledgor, and each Pledgor hereby waives and releases
(to the extent permitted by law) all rights of redemption, stay, valuation
and
appraisal that such Pledgor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted.
To
the
extent any notice is required by applicable law, the Administrative Agent shall
give the applicable Pledgors 10 Business Days’ written notice (which each
Pledgor agrees is reasonable notice within the meaning of Section 9-611 of
the
New York UCC or its equivalent in other jurisdictions) of the Administrative
Agent’s intention to make any sale of Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case
of a
sale at a broker’s board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Administrative Agent may
fix
and state in the notice (if any) of such sale. At any such sale, the Collateral,
or the portion thereof, to be sold may be sold in one lot as an entirety or
in
separate parcels, as the Administrative Agent may (in its sole and absolute
discretion) determine. The Administrative Agent shall not be obligated to make
any sale of any Collateral if it shall determine not to do so, regardless of
the
fact that notice of sale of such Collateral shall have been given. The
Administrative Agent may, without notice or publication, adjourn any public
or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In the case
of
any sale of all or any part of the Collateral made on credit or for future
delivery, the Collateral so sold may be retained by the Administrative Agent
until the sale price is paid by the purchaser or purchasers thereof, but the
Administrative Agent shall not incur any liability in the event that any such
purchaser or purchasers shall fail to take up and pay for the Collateral so
sold
and, in the case of any such failure, such Collateral may be sold again upon
notice given in accordance with provisions above. At any public (or, to the
extent permitted by law, private) sale made pursuant to this Section 5.01,
any
Secured Party may bid for or purchase for cash, free (to the extent permitted
by
law) from any right of redemption, stay,
valuation
or appraisal on the part of any Pledgor (all such rights being also hereby
waived and released to the extent permitted by law), the Collateral or any
part
thereof offered for sale and such Secured Party may, upon compliance with the
terms of sale, hold, retain and dispose of such property in accordance with
Section 5.02 hereof without further accountability to any Pledgor therefor.
For
purposes hereof, a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof; the Administrative Agent shall
be
free to carry out such sale pursuant to such agreement and no Pledgor shall
be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Administrative Agent shall have entered
into such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Administrative Agent may proceed by a suit or
suits at law or in equity to foreclose this Agreement and to sell the Collateral
or any portion thereof pursuant to a judgment or decree of a court or courts
having competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver. Any sale pursuant to the provisions of this Section 5.01 shall be
deemed to conform to the commercially reasonable standards as provided in
Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.
Section
5.02.
Application
of Proceeds
.
The
Administrative Agent shall promptly apply the proceeds, moneys or balances
of
any collection or sale of Collateral, as well as any Collateral consisting
of
cash, as follows:
FIRST,
to
the payment of all costs and expenses incurred by the Administrative Agent
in
connection with such collection or sale or otherwise in connection with this
Agreement, any other Loan Document or any of the Obligations, including without
limitation all court costs and the fees and expenses of its agents and legal
counsel, the repayment of all advances made by the Administrative Agent
hereunder or under any other Loan Document on behalf of any Pledgor, any other
costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document, and all other fees,
indemnities and other amounts owing or reimbursable to the Administrative Agent
under any Loan Document in its capacity as such;
SECOND
,
to
payment of all fees, indemnities and other amounts (other than principal and
interest) payable to the Issuing Bank in capacity as such and of any amount
required to be paid to the Issuing Bank by any Revolving Facility Lender
pursuant to
Section
2.05(e)
and
(h)
of the
Credit Agreement and not paid by such Revolving Facility Lender (which shall
be
payable to the Administrative Agent if the Administrative Agent advanced such
payment to the Issuing Bank in anticipation of such payment by such Revolving
Facility Lender and otherwise, to the Issuing Bank); and
THIRD,
to
the payment in full of the Obligations (the amounts so applied to be distributed
among the Secured Parties
pro
rata
in
accordance with the respective amounts of the Obligations owed to them on the
date of any such distribution, which in the case of Letters of Credit, shall
be
paid by deposit in an account with the Administrative Agent, in the name of
the
Administrative Agent and for the benefit of the Issuing Bank and the Lenders,
an
amount in cash in U.S. Dollars equal to the aggregate L/C Exposure as of such
date plus any accrued and unpaid interest thereon).
The
Administrative Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Administrative Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Administrative Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid
over
to the Administrative Agent or such officer or be answerable in any way for
the
misapplication thereof.
Section
5.03.
Securities
Act, Etc.
In
view
of the position of the Pledgors in relation to the Pledged Collateral, or
because of other current or future circumstances, a question may arise under
the
Securities Act of 1933, as now or hereafter in effect, or any similar federal
statute hereafter enacted analogous in purpose or effect (such Act and any
such
similar statute as from time to time in effect being called the “
Federal
Securities Laws
”)
with
respect to any disposition of the Pledged Collateral permitted hereunder. Each
Pledgor understands that compliance with the Federal Securities Laws might
very
strictly limit the course of conduct of the Administrative Agent if the
Administrative Agent were to attempt to dispose of all or any part of the
Pledged Collateral, and might also limit the extent to which or the manner
in
which any subsequent transferee of any Pledged Collateral could dispose of
the
same. Similarly, there may be other legal restrictions or limitations affecting
the Administrative Agent in any attempt to dispose of all or part of the Pledged
Collateral under applicable Blue Sky or other state securities laws or similar
laws analogous in purpose or effect. Each Pledgor acknowledges and agrees that
in light of such restrictions and limitations, the Administrative Agent, in
its
sole and absolute discretion, (a) may proceed to make such a sale whether or
not
a registration statement for the purpose of registering such Pledged Collateral
or part thereof shall have been filed under the Federal Securities Laws or,
to
the extent applicable, Blue Sky or other state securities laws and (b) may
approach and negotiate with a single potential purchaser to effect such sale.
Each Pledgor acknowledges and agrees that any such sale might result in prices
and other terms less favorable to the seller than if such sale were a public
sale without such restrictions. In the event of any such sale, the
Administrative Agent shall incur no responsibility or liability for selling
all
or any part of the Pledged Collateral at a price that the Administrative Agent,
in its sole and absolute discretion, may in good faith deem reasonable under
the
circumstances, notwithstanding the possibility that a substantially higher
price
might have been realized if the sale were deferred until after registration
as
aforesaid or if more than a single purchaser were approached. The provisions
of
this Section 5.03 will apply notwithstanding the existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Administrative Agent sells.
ARTICLE
VI
INDEMNITY,
SUBROGATION AND SUBORDINATION
Section
6.01.
Indemnity
.
In
addition to all such rights of indemnity and subrogation as the Guarantors
may
have under applicable law (but subject to Section 6.03 hereof), the Borrower
agrees that (a) in the event a payment shall be made by any
Guarantor
under
this Agreement in respect of any Obligation of the Borrower, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the person to whom such payment shall
have
been made to the extent of such payment and (b) in the event any assets of
any
Guarantor shall be sold pursuant to this Agreement or any other Security
Document to satisfy in whole or in part an Obligation of the Borrower, the
Borrower shall indemnify such Guarantor in an amount equal to the greater of
the
book value or the fair market value of the assets so sold.
Section
6.02.
Contribution
and Subrogation
.
Each
Guarantor (other than Holdings and the Borrower) (a “
Contributing
Guarantor
”)
agrees
(subject to Section 6.03 hereof) that, in the event a payment shall be made
by
any other Guarantor (other than Holdings and the Borrower) hereunder in respect
of any Obligation or assets of any other Guarantor (other than Holdings and
the
Borrower) shall be sold pursuant to any Security Document to satisfy any
Obligation owed to any Secured Party and such other Guarantor (the “
Claiming
Guarantor
”)
shall
not have been fully indemnified by the Borrower as provided in Section 6.01
hereof, the Contributing Guarantor shall indemnify the Claiming Guarantor in
an
amount equal to the amount of such payment or the greater of the book value
or
the fair market value of such assets, as applicable, in each case multiplied
by
a fraction of which the numerator shall be the net worth of such Contributing
Guarantor on the date hereof and the denominator shall be the aggregate net
worth of all the Guarantors on the date hereof (or, in the case of any Guarantor
becoming a party hereto pursuant to Section 7.16 hereof, the date of the
supplement hereto executed and delivered by such Guarantor). Any Contributing
Guarantor making any payment to a Claiming Guarantor pursuant to this Section
6.02 shall be subrogated to the rights of such Claiming Guarantor under Section
6.01 hereof to the extent of such payment.
Section
6.03.
Subordination;
Subrogation
.
(a)
Each
Guarantor hereby subordinates any and all debts, liabilities and other
Obligations owed to such Guarantor by each other Loan Party (the “
Subordinated
Obligations
”)
to the
Obligations to the extent and in the manner hereinafter set forth in this
Section 6.03:
(i)
Prohibited
Payments, Etc
.
Except
during the continuance of an Event of Default, each Guarantor may receive
regularly scheduled payments from any other Loan Party on account of the
Subordinated Obligations. After the occurrence and during the continuance of
any
Event of Default, however, unless the Required Lenders otherwise agree, no
Guarantor shall demand, accept or take any action to collect any payment on
account of the Subordinated Obligations until the Obligations have been paid
in
full in cash.
(ii)
Prior
Payment of Guaranteed Obligations
.
In any
proceeding under the U.S. Bankruptcy Code or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law relating to any other Loan
Party, each Guarantor agrees that the Secured Parties shall be entitled to
receive payment in full in cash of all Obligations (including all interest
and
expenses accruing after the commencement of a proceeding under any U.S.
Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency,
receivership or similar law, whether or not constituting an allowed claim in
such proceeding (“
Post-Petition
Interest
”))
before such Guarantor receives payment of any Subordinated
Obligations.
(iii)
Turn-Over
.
After
the occurrence and during the continuance of any Event of Default, each
Guarantor shall, if the Administrative Agent so requests, collect, enforce
and
receive payments on account of the Subordinated Obligations as trustee for
the
Secured Parties and deliver such payments to the Administrative Agent on account
of the Obligations (including all Post-Petition Interest), together with any
necessary endorsements or other instruments of transfer, but without reducing
or
affecting in any manner the liability of such Guarantor under the other
provisions of this Guaranty.
(iv)
Administrative
Agent Authorization
.
After
the occurrence and during the continuance of any Event of Default, the
Administrative Agent is authorized and empowered (but without any obligation
to
so do), in its discretion, (i) in the name of each Guarantor, to collect and
enforce, and to submit claims in respect of, the Subordinated Obligations and
to
apply any amounts received thereon to the Obligations (including any and all
Post-Petition Interest), and (ii) to require each Guarantor (A) to collect
and
enforce, and to submit claims in respect of, the Subordinated Obligations and
(B) to pay any amounts received on such obligations to the Administrative Agent
for application to the Guaranteed Obligations (including any and all
Post-Petition Interest).
(b)
Each
Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against the Borrower, any
other
Loan Party or any other insider guarantor that arise from the existence,
payment, performance or enforcement of such Guarantor’s Obligations under or in
respect of the guarantee set forth in Article II or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in
any
claim or remedy of any Secured Party against the Borrower, any other Loan Party
or any other insider guarantor or any Collateral, 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 Borrower,
any other Loan Party or any other insider guarantor, 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, remedy or right, unless and until all of the
Obligations and all other amounts payable under the guarantee set forth in
Article II shall have been paid in full in cash, all Letters of Credit and
all
Swap Agreements secured hereunder shall have expired or been terminated and
the
Commitments shall have expired or been terminated. If any amount shall be paid
to any Guarantor in violation of the immediately preceding sentence at any
time
prior to the latest of (a) the payment in full in cash of the Obligations and
all other amounts payable under the guarantee set forth in Article II and (b)
the latest date of expiration or termination of all Letters of Credit and all
Swap Agreements secured hereunder, such amount shall be received and held in
trust for the benefit of the Secured Parties, shall be segregated from other
property and funds of such Guarantor and shall forthwith be paid or delivered
to
the Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Obligations and
all
other amounts payable under the guarantee set forth in Article II, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or
to
be held as Collateral for any Obligations or other amounts payable under such
guarantee thereafter arising. If (i) any Guarantor shall make payment to any
Secured Party of all or any part of the Obligations, (ii) all of the Obligations
and all other amounts payable under the guarantee set forth in Article II shall
have been paid in full in cash, (iii) the Term Facility Maturity Date shall
have
occurred and (iv) all Letters of Credit and all Swap Agreements secured
hereunder shall
have
expired or been terminated, the Administrative Agent will, at such Guarantor’s
request and expense, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary
to
evidence the transfer by subrogation to such Guarantor of an interest in the
Obligations resulting from such payment made by such Guarantor pursuant to
such
guarantee.
ARTICLE
VII
MISCELLANEOUS
Section
7.01.
Notices
.
All
communications and notices hereunder shall (except as otherwise expressly
permitted herein) be in writing and given as provided in Section 9.01 of the
Credit Agreement. All communications and notices hereunder to any Subsidiary
Party shall be given to it in care of the Borrower, with such notice to be
given
as provided in Section 9.01 of the Credit Agreement.
Section
7.02.
Security
Interest Absolute
.
All
rights of the Administrative Agent hereunder, the Security Interest in the
Article 9 Collateral, the security interest in the Pledged Collateral and all
obligations of each Pledgor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document, any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in
any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment
or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Pledgor in respect of the Obligations or this Agreement (other than a defense
of
payment or performance).
Section
7.03.
Limitation
By Law
.
All
rights, remedies and powers provided in this Agreement may be exercised only
to
the extent that the exercise thereof does not violate any applicable provision
of law, and all the provisions of this Agreement are intended to be subject
to
all applicable mandatory provisions of law that may be controlling and to be
limited to the extent necessary so that they shall not render this Agreement
invalid, unenforceable, in whole or in part, or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
Section
7.04.
Binding
Effect; Several Agreement
.
This
Agreement shall become effective as to any party to this Agreement when a
counterpart hereof executed on behalf of such party shall have been delivered
to
the Administrative Agent and a counterpart hereof shall have been executed
on
behalf of the Administrative Agent, and thereafter shall be binding upon such
party and the Administrative Agent and their respective permitted successors
and
assigns, and shall inure to the benefit of such party, the Administrative Agent
and the other Secured Parties and their respective permitted successors and
assigns, except that no party shall have the right to assign or transfer its
rights or obligations hereunder or any interest herein or in the
Collateral
(and
any
such assignment or transfer shall be void) except as expressly contemplated
by
this Agreement or the Credit Agreement. This Agreement shall be construed as
a
separate agreement with respect to each party and may be amended, modified,
supplemented, waived or released with respect to any party without the approval
of any other party and without affecting the obligations of any other party
hereunder.
Section
7.05.
Successors
and Assigns
.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any
Pledgor or the Administrative Agent that are contained in this Agreement shall
bind and inure to the benefit of their respective permitted successors and
assigns;
provided
that no
Pledgor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative
Agent.
Section
7.06.
Administrative
Agent’s Fees and Expenses; Indemnification
.
(a)
The
parties hereto agree that the Administrative Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.05
of
the Credit Agreement.
(b)
Without
limitation of its indemnification obligations under the other Loan Documents,
each Pledgor jointly and severally agrees to indemnify the Administrative Agent
and the other Indemnitees (as defined in Section 9.05 of the Credit Agreement)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of, (i) the execution,
delivery or performance of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by
the
parties hereto and thereto of their respective obligations thereunder or the
consummation of the Transactions and other transactions contemplated hereby,
(ii) the use of proceeds of the Loans or the use of any Letter of Credit or
(iii) any claim, litigation, investigation or proceeding relating to any of
the
foregoing, or to the Collateral, whether or not any Indemnitee is a party
thereto;
provided
that
such indemnity shall not, as to any Indemnitee, be available to the extent
that
such losses, claims, damages, liabilities or related expenses are determined
by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such
Indemnitee.
(c)
Any
such
amounts payable as provided hereunder shall be additional Obligations secured
hereby and by the other Security Documents. The provisions of this Section
7.06
shall remain operative and in full force and effect regardless of the
termination of this Agreement or any other Loan Document, the consummation
of
the transactions contemplated hereby, the repayment of any of the Obligations,
the invalidity or unenforceability of any term or provision of this Agreement
or
any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent or any other Secured Party. All amounts due under this
Section 7.06 shall be payable on written demand therefor.
Section
7.07.
Administrative
Agent Appointed Attorney-in-Fact
.
Each
Pledgor hereby appoints the Administrative Agent the attorney-in-fact of such
Pledgor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any
instrument
that the Administrative Agent may deem necessary or advisable to accomplish
the
purposes hereof, which appointment is irrevocable and coupled with an interest.
The Administrative Agent shall have the right, upon the occurrence and during
the continuance of an Event of Default, with full power of substitution either
in the Administrative Agent’s name or in the name of such Pledgor, (a) to
receive, endorse, assign or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral
or
any part thereof, (b) to demand, collect, receive payment of, give receipt
for
and give discharges and releases of all or any of the Collateral; (c) to ask
for, demand, sue for, collect, receive and give acquittance for any and all
moneys due or to become due under and by virtue of any Collateral; (d) to sign
the name of any Pledgor on any invoice or bill of lading relating to any of
the
Collateral; (e) to send verifications of Accounts to any Account Debtor; (f)
to
commence and prosecute any and all suits, actions or proceedings at law or
in
equity in any court of competent jurisdiction to collect or otherwise realize
on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (g) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; and (h) to use,
sell, assign, transfer, pledge, make any agreement with respect to or otherwise
deal with all or any of the Collateral, and to do all other acts and things
necessary to carry out the purposes of this Agreement, as fully and completely
as though the Administrative Agent were the absolute owner of the Collateral
for
all purposes;
provided
,
that
nothing herein contained shall be construed as requiring or obligating the
Administrative Agent to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by the Administrative Agent,
or to
present or file any claim or notice, or to take any action with respect to
the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Administrative Agent and the other
Secured Parties shall be accountable only for amounts actually received as
a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to
any
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
Section
7.08.
GOVERNING
LAW
.
THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF
NEW YORK.
Section
7.09.
Waivers;
Amendment
.
(a)
No
failure or delay by the Administrative Agent, any Issuing Bank or any Lender
in
exercising any right, power or remedy hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise
of
any such right, power or remedy, or any abandonment or discontinuance of steps
to enforce such a right, power or remedy, preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The rights, powers
and remedies of the Administrative Agent, any Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights, powers or remedies that they would otherwise have.
No
waiver of any provision of this Agreement or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall
be
permitted by paragraph (b) of this Section 7.09, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
or
the issuance of a Letter of
Credit
shall not be construed as a waiver of any Default or Event of Default,
regardless of whether the Administrative Agent, any Lender or any Issuing Bank
may have had notice or knowledge of such Default or Event of Default at the
time. No notice or demand on any Loan Party in any case shall entitle any Loan
Party to any other or further notice or demand in similar or other
circumstances.
(b)
Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.08 of the Credit Agreement.
Section
7.10.
WAIVER
OF JURY TRIAL
.
EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY
OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.
Section
7.11.
Severability
.
In the
event any one or more of the provisions contained in this Agreement or in any
other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal
or
unenforceable provisions.
Section
7.12.
Counterparts
.
This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute
but
one contract, and shall become effective as provided in Section 7.04 hereof.
Delivery of an executed counterpart to this Agreement by facsimile transmission
shall be as effective as delivery of a manually signed original.
Section
7.13.
Headings
.
Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
Section
7.14.
Jurisdiction;
Consent to Service of Process
.
(a)
Each
party to this Agreement hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York
City,
and any appellate court from any thereof, in any action or
proceeding
arising out of or relating to this Agreement or any other Loan Documents, or
for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any
such action or proceeding may be heard and determined in such New York State
or,
to the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall
be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law. Nothing in this Agreement shall affect
any
right that the Administrative Agent, any Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
or
any other Loan Document against any Pledgor, or its properties, in the courts
of
any jurisdiction.
(b)
Each
party to this Agreement hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in
any
New York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such
court.
Section
7.15.
Termination
or Release
.
(a)
This
Agreement, the guarantees made herein, the pledges made herein, the Security
Interest and all other security interests granted hereby shall terminate when
all the Loan Document Obligations (other than contingent or unliquidated
obligations or liabilities not then due) have been paid in full in cash or
immediately available funds and the Lenders have no further commitment to lend
under the Credit Agreement, the Revolving L/C Exposure has been reduced to
zero
and each Issuing Bank has no further obligations to issue Letters of Credit
under the Credit Agreement.
(b)
A
Subsidiary Party shall automatically be released from its obligations hereunder
and the security interests in the Collateral of such Subsidiary Party shall
be
automatically released upon the consummation of any transaction permitted by
the
Credit Agreement as a result of which such Subsidiary Party ceases to be a
Subsidiary of the Borrower or otherwise ceases to be a Guarantor;
provided
that the
Required Lenders shall have consented to such transaction (to the extent such
consent is required by the Credit Agreement) and the terms of such consent
did
not provide otherwise.
(c)
Upon
any
sale or other transfer by any Pledgor of any Collateral that is permitted under
the Credit Agreement to any person that is not a Pledgor, or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 9.08 of the Credit
Agreement, the security interest in such Collateral shall be automatically
released.
(d)
In
connection with any termination or release pursuant to paragraph (a), (b) or
(c)
of this Section 7.15, the Administrative Agent shall execute and deliver to
any
Pledgor, at such Pledgor’s, expense all documents that such Pledgor shall
reasonably request to evidence such termination or release; provided, that
the
Administrative Agent shall not be required to take any action under this Section
7.15(d) unless such Pledgor shall have delivered to the Administrative Agent
together with such request, which may be incorporated into such request, (i)
a
reasonably detailed description of the Collateral, which in any event shall
be
sufficient to
effect
the appropriate termination or release without affecting any other Collateral,
and (ii) a certificate of a Responsible Officer of the Borrower or such Pledgor
certifying that the transaction giving rise to such termination or release
is
permitted by the Credit Agreement and was consummated in compliance with the
Loan Documents. Any execution and delivery of documents pursuant to this Section
7.15 shall be without recourse to or warranty by the Administrative
Agent.
Section
7.16.
Additional
Subsidiaries
.
Upon
execution and delivery by the Administrative Agent and any Subsidiary that
is
required to become a party hereto by Section 5.10 of the Credit Agreement of
an
instrument in the form of
Exhibit
I
hereto,
such subsidiary shall become a Subsidiary Party hereunder with the same force
and effect as if originally named as a Subsidiary Party herein. The execution
and delivery of any such instrument shall not require the consent of any other
party to this Agreement. The rights and obligations of each party to this
Agreement shall remain in full force and effect notwithstanding the addition
of
any new party to this Agreement.
Section
7.17.
Right
of Set-off
.
If an
Event of Default shall have occurred and be continuing, each Lender and each
Issuing Bank is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and
other indebtedness at any time owing by such Lender or such Issuing Bank to
or
for the credit or the account of any party to this Agreement against any of
and
all the obligations of such party now or hereafter existing under this Agreement
owed to such Lender or such Issuing Bank, irrespective of whether or not such
Lender or such Issuing Bank shall have made any demand under this Agreement
and
although such obligations may be unmatured. The rights of each Lender under
this
Section 7.17 are in addition to other rights and remedies (including other
rights of set-off) that such Lender or such Issuing Bank may have.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
day and year first above written.
BPC
ACQUISITION CORP.
By:________________________________
Name:
Title:
BERRY
PLASTICS GROUP, INC.
By:_________________________________
Name:
Title:
Upon
the
consummation of the Merger:
BPC
Holding Corporation
Berry
Plastics Corporation
AeroCon,
Inc.
Berry
Iowa Corporation
Berry
Plastics Design Corporation
Berry
Sterling Corporation
Berry
Plastics Technical Services, Inc.
Cardinal
Packaging, Inc.
CPI
Holding Corporation
Knight
Plastics Inc.
Landis
Plastics Inc.
Packerware
Corporation
Pescor,
Inc.
Poly-Seal
Corporation
Venture
Packaging, Inc.
Venture
Packaging Midwest, Inc.
Berry
Plastics Acquisition III
Berry
Plastics Acquisition V
Berry
Plastics Acquisition VII
Berry
Plastics Acquisition VIII
Berry
Plastics Acquisition IX
Berry
Plastics Acquisition X
Berry
Plastics Acquisition XI
Berry
Plastics Acquisition XII
Berry
Plastics Acquisition XIII
Kerry
Group, Inc.
Saffron
Acquisition Corp.
Sun
Coast
Industries, Inc.
Berry
Plastics Acquisition Corporation XV, LLC
Setco,
LLC
Tubed
Products, LLC
By:_______________________________________
Name:
Title:
CREDIT
SUISSE, CAYMAN ISLANDS BRANCH
as
Administrative Agent
By:_________________________________________
Name:
Title:
Exhibit
I
to
Guarantee and
Collateral
Agreement
SUPPLEMENT
NO. ______ dated as of _____________ (this “
Supplement
”),
to
the Guarantee and Collateral Agreement dated as of September 20, 2006 (the
“
Guarantee
and Collateral Agreement
”),
among
BERRY PLASTICS GROUP, INC. (formerly known as BPC Holding Acquisition Corp.),
a
Delaware corporation (“
Holdings
”),
BPC
HOLDING CORPORATION (as the surviving entity of the merger on the Closing Date
between BPC Acquisition Corp. and BPC Holding Corporation), a Delaware
corporation (the “
Borrower
”),
each
Subsidiary of the Borrower identified herein as a party (each, a “
Subsidiary
Party
”)
and
CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as administrative agent and collateral
agent (in such capacities, the “
Administrative
Agent
”)
for
the Secured Parties (as defined in the Guarantee and Collateral
Agreement).
A.
Reference
is made to the Credit Agreement dated as of September 20, 2006 (as amended,
restated, supplemented, waived or otherwise modified from time to time, the
“
Credit
Agreement
”),
among
Holdings, the Borrower, the LENDERS party thereto from time to time, CREDIT
SUISSE, CAYMAN ISLANDS BRANCH, as administrative agent and collateral agent
for
the Lenders, CITICORP NORTH AMERICA, INC., as syndication agent (in such
capacity, the “
Syndication
Agent
”),
and
DEUTSCHE BANK SECURITIES INC. and J.P. MORGAN SECURITIES INC., as
co-documentation agents (in such capacities, the “
Documentation
Agents
”).
B.
Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement and the Guarantee and Collateral
Agreement referred to therein.
C.
The
Pledgors have entered into the Guarantee and Collateral Agreement in order
to
induce the Lenders to make Loans and each Issuing Bank to issue Letters of
Credit. Section 7.16 of the Guarantee and Collateral Agreement provides that
additional Subsidiaries may become Subsidiary Parties under the Guarantee and
Collateral Agreement by execution and delivery of an instrument in the form
of
this Supplement. The undersigned Subsidiary (the “
New
Subsidiary
”)
is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Party under the Guarantee and Collateral
Agreement in order to induce the Lenders to make additional Loans and each
Issuing Bank to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.
Accordingly,
the Administrative Agent and the New Subsidiary agree as follows:
SECTION
1.
In
accordance with Section 7.16 of the Guarantee and Collateral Agreement, the
New
Subsidiary by its signature below becomes a Subsidiary Party, a Guarantor and
a
Pledgor under the Guarantee and Collateral Agreement with the same force and
effect as if originally named therein as a Subsidiary Party, a Guarantor and
a
Pledgor, and the New Subsidiary hereby (a) agrees to all the terms and
provisions of the Guarantee and Collateral Agreement applicable to it as a
Subsidiary Party, a Guarantor and a Pledgor thereunder and (b)
represents
and warrants that the representations and warranties made by it as a Guarantor
and a Pledgor thereunder are true and correct, in all material respects, on
and
as of the date hereof. In furtherance of the foregoing, the New Subsidiary,
as
security for the payment and performance in full of the Obligations (as defined
in the Guarantee and Collateral Agreement), does hereby create and grant to
the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in and Lien on all the New Subsidiary’s right, title and interest in
and to the Collateral (as defined in the Guarantee and Collateral Agreement)
of
the New Subsidiary. Each reference to a “Subsidiary Party” or a “Guarantor” a
“Pledgor” in the Guarantee and Collateral Agreement shall be deemed to include
the New Subsidiary. The Guarantee and Collateral Agreement is hereby
incorporated herein by reference.
SECTION
2.
The
New
Subsidiary represents and warrants to the Administrative Agent and the other
Secured Parties that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to (i) the effects
of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance
or
other similar laws affecting creditors’ rights generally, (ii) general
principles of equity (regardless of whether such enforceability is considered
in
a proceeding in equity or at law) and (iii) implied covenants of good faith
and
fair dealing.
SECTION
3.
This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute
but
one contract. This Supplement shall become effective when (a) the Administrative
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and (b) the Administrative Agent has executed
a
counterpart hereof.
SECTION
4.
The
New
Subsidiary hereby represents and warrants that (a) set forth on
Schedule
I
attached
hereto is a true and correct schedule of the location of any and all Article
9
Collateral of the New Subsidiary, (b) set forth on
Schedule
II
attached
hereto is a true and correct schedule of all the Pledged Securities of the
New
Subsidiary and (c) set forth under its signature hereto, is the true and correct
legal name of the New Subsidiary, its jurisdiction of formation and the location
of its chief executive office.
SECTION
5.
Except
as
expressly supplemented hereby, the Guarantee and Collateral Agreement shall
remain in full force and effect.
SECTION
6.
THIS
SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF
NEW YORK.
SECTION
7.
In
the
event any one or more of the provisions contained in this Supplement should
be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and in the
Guarantee and Collateral Agreement shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal
or
unenforceable provisions.
SECTION
8.
All
communications and notices hereunder shall be in writing and given as provided
in Section 7.01 of the Guarantee and Collateral Agreement.
SECTION
9.
The
New
Subsidiary agrees to reimburse the Administrative Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the
reasonable fees, disbursements and other charges of counsel for the
Administrative Agent.
IN
WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly
executed this Supplement to the Guarantee and Collateral Agreement as of the
day
and year first above written.
[Name
of
New Subsidiary]
By:______________________________________
Name:
Title:
Legal
Name:
Jurisdiction
of Formation:
Location
of Chief Executive Office:
CREDIT
SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent
By:________________________________________
Name:
Title:
NOTE
PURCHASE AGREEMENT
AMONG
BPC
ACQUISITION CORP.
AND
GOLDMAN,
SACHS & CO.
as
Initial Purchaser
AND
GSMP
2006 ONSHORE US, LTD.
GSMP
2006 OFFSHORE US, LTD.
GSMP
2006 INSTITUTIONAL US, LTD.
GS
MEZZANINE
PARTNERS 2006 INSTITUTIONAL, L.P.
as
Subsequent Purchasers
Dated
as of:
September
20, 2006
Relating
to:
$425,000,000
SENIOR
SUBORDINATED NOTES DUE 2016
TABLE
OF CONTENTS
SECTION
1.
|
DEFINITIONS
AND ACCOUNTING TERMS
|
2
|
1.1.
|
Definitions.
|
2
|
1.2.
|
Computation
of Time Periods.
|
10
|
1.3.
|
Terms
Generally.
|
10
|
1.4.
|
Accounting
Terms.
|
10
|
SECTION
2.
|
AUTHORIZATION
AND ISSUANCE OF NOTES
|
10
|
2.1.
|
Authorization
of Issue.
|
10
|
2.2.
|
Sale
and Purchase of the Notes to the Initial Purchaser.
|
10
|
2.3.
|
Resale
of the Notes to the Subsequent Purchasers.
|
10
|
2.4.
|
Closing.
|
11
|
SECTION
3.
|
CONDITIONS
TO CLOSING
|
11
|
3.1.
|
Conditions
to Closing.
|
11
|
SECTION
4.
|
REPRESENTATIONS
AND WARRANTIES
|
14
|
4.1.
|
Due
Organization; Power and Authority.
|
14
|
4.2.
|
Capital
Stock and Ownership of HoldCo.
|
14
|
4.3.
|
Capital
Stock and Ownership of Company and Subsidiaries.
|
15
|
4.4.
|
Due
Authorization, Execution and Delivery.
|
15
|
4.5.
|
Non-Contravention;
Authorizations and Approvals.
|
16
|
4.6.
|
Financial
Statements and Projections.
|
16
|
4.7.
|
No
Material Adverse Effect.
|
17
|
4.8.
|
No
Actions or Proceedings.
|
17
|
4.9.
|
Title
to Properties.
|
17
|
4.10.
|
Intellectual
Property Rights.
|
18
|
4.11.
|
Taxes.
|
18
|
4.12.
|
Employee
Benefit Plans.
|
18
|
4.13.
|
Private
Offering; No Integration or General Solicitation; Rule 144A
Eligibility.
|
19
|
4.14.
|
Status
under Certain Statutes.
|
20
|
4.15.
|
Insurance.
|
20
|
4.16.
|
Use
of Proceeds; Margin Regulations.
|
20
|
4.17.
|
Compliance
with Laws; Permits; Environmental Matters.
|
20
|
4.18.
|
Solvency.
|
21
|
4.19.
|
Labor
and Employment Matters.
|
21
|
4.20.
|
Brokerage
Fees.
|
22
|
4.21.
|
Final
Memorandum.
|
22
|
SECTION
5.
|
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE
SUBSEQUENT
PURCHASERS
|
22
|
5.1.
|
Purchase
for Investment.
|
22
|
5.2.
|
Due
Organization; Corporate Power; Authorization;
Enforceability.
|
23
|
5.3.
|
No
Actions or Proceedings.
|
23
|
5.4.
|
Final
Memorandum.
|
23
|
5.5.
|
Investment
Decision.
|
23
|
SECTION
5A.
|
OFFERING
BY INITIAL PURCHASER
|
24
|
5A.1.
|
Offering
by Initial Purchaser.
|
24
|
SECTION
6.
|
COVENANTS
TO PROVIDE INFORMATION
|
24
|
6.1.
|
Reports
to Subsequent Purchasers and GSMP VCOC.
|
24
|
SECTION
7
|
.
OTHER AFFIRMATIVE COVENANTS
|
25
|
7.1.
|
Board
Representation.
|
25
|
7.2.
|
Access.
|
26
|
7.3.
|
Rule
144A.
|
26
|
7.4.
|
Corporate
Existence; Businesses and Properties.
|
26
|
7.5.
|
Taxes
and Other Claims.
|
26
|
7.6.
|
Books
and Records.
|
27
|
7.7.
|
Insurance.
|
27
|
SECTION
8.
|
PROVISIONS
RELATING TO RESALES OF NOTES
|
27
|
8.1.
|
Private
Offerings.
|
27
|
8.2.
|
Procedures
and Management Cooperation in Private Offerings.
|
28
|
8.3.
|
No
Integration.
|
28
|
SECTION
9.
|
EXPENSES,
INDEMNIFICATION AND CONTRIBUTION
|
28
|
9.1.
|
Expenses
of Subsequent Purchasers.
|
28
|
9.2.
|
Indemnification
of the Subsequent Purchasers.
|
29
|
9.3.
|
Waiver
of Punitive Damages.
|
29
|
9.4.
|
Survival.
|
30
|
9.5.
|
Tax
Treatment of Indemnification Payments.
|
30
|
9.6.
|
Indemnification
of the Initial Purchaser.
|
30
|
SECTION
10.
|
MISCELLANEOUS
|
30
|
10.1.
|
Notices.
|
30
|
10.2.
|
Benefit
of Agreement and Assignments.
|
31
|
10.3.
|
No
Waiver; Remedies Cumulative.
|
31
|
10.4.
|
Amendments,
Waivers and Consents.
|
31
|
10.5.
|
Counterparts.
|
32
|
10.6.
|
Reproduction.
|
32
|
10.7.
|
Headings.
|
32
|
10.8.
|
Survival
of Representations, Warrants, Covenants and Indemnities.
|
32
|
10.9.
|
Governing
Law; Submission to Jurisdiction; Venue.
|
32
|
10.10.
|
Severability.
|
33
|
10.11.
|
Entirety.
|
33
|
10.12.
|
Construction.
|
33
|
10.13.
|
Incorporation.
|
33
|
10.14.
|
Confidentiality.
|
34
|
10.15.
|
No
Personal Obligations.
|
35
|
10.16.
|
Currency.
|
35
|
10.17.
|
No
Fiduciary Duty.
|
35
|
EXHIBITS:
Exhibit
A
-
Form
of
Indenture
Exhibit
B
-
Form
of
Exchange and Registration Rights Agreement
Exhibit
C
-
Indemnification
Provisions for the Initial Purchaser
Exhibit
3.1(c)(i)
-
Form
of
Secretary’s Certificate
Exhibit
3.1(c)(ii)
-
Form
of
Officer’s Certificate
Exhibit
3.1(c)(iii)
-
Form
of
Solvency Certificate
SCHEDULES:
Schedule 2.2
-
Information
relating to the Subsequent Purchasers
Schedule 4.2
-
Capital
Stock and Ownership
Schedule 4.3
-
Subsidiaries
Schedule
4.5
-
Governmental
Approvals
Schedule
4.9
-
Leased
Properties
Schedule
4.10
-
Intellectual
Property
Schedule
4.11
-
Taxes
Schedule
4.15
-
Insurance
Schedule
4.17
-
Environmental
Matters
Schedule
4.20
-
Brokerage
Fees
NOTE
PURCHASE AGREEMENT
NOTE
PURCHASE AGREEMENT, dated as of September 20, 2006, among
BPC
Acquisition Corp.
,
a
Delaware corporation (“
Merger
Sub
”);
Goldman,
Sachs & Co.
,
a New
York partnership (“
Initial
Purchaser
”);
GSMP
2006 Onshore US, Ltd.
,
an
exempted Cayman Islands limited liability company (“
GSMP
Onshore
”);
GSMP
2006 Offshore US, Ltd.
,
an
exempted Cayman Islands limited liability company (“
GSMP
Offshore
”);
GSMP
2006 Institutional US, Ltd.
,
an
exempted Cayman Islands limited liability company (“
GSMP
Institutional
”
and,
together with GSMP Onshore and GSMP Offshore, the “
Subsequent
Purchasers
”,
and
together with the Initial Purchaser, the “
Purchasers
”);
and
GS
Mezzanine Partners 2006 Institutional, L.P.
,
an
exempted Cayman Islands limited partnership (the “
GSMP
VCOC
”).
W
I T
N E S S E T H
:
WHEREAS,
pursuant to that certain Agreement and Plan of Merger, dated as of June 28,
2006, substantially in the form previously furnished to the Purchasers (the
“
Acquisition
Agreement
”),
among
Merger Sub, BPC Holding Corporation, a Delaware corporation (the “
Company
”
or
the
“
Issuer
”)
and
BPC Holding Acquisition Corp. (which entity has changed its name to Berry
Plastics Group, Inc.) (“
HoldCo
”
or
“
Holdings
”),
Merger Sub will be merged with and into the Company, with the Company as the
surviving corporation of the merger (the “
Acquisition
”);
WHEREAS,
upon consummation of the Acquisition, HoldCo will be a holding company owned,
directly or indirectly, by affiliates of Apollo Management, L.P. and certain
other investors (collectively, the “
Sponsor
”),
and
HoldCo will directly own all of the outstanding capital stock of the Company
as
the surviving entity of the merger pursuant to which the Acquisition is effected
and thus HoldCo will have acquired the Company from Goldman Sachs Capital
Partners and JPMorgan Partners (collectively, the “
Sellers
”);
WHEREAS,
in order to finance the Acquisition, refinance certain existing indebtedness
of
the Company in connection with the Acquisition, and pay related transaction
fees
and expenses (collectively, the “
Transactions
”),
the
Issuer will require funds to be provided from:
(a)
the
issuance by HoldCo of its common stock (the “
HoldCo
Stock
”)
to the
Sponsor and certain other equity investors, including the Subsequent Purchasers
(collectively, the “Equity Investors”) for cash proceeds that, together with the
“rollover” of certain existing equity investments in the Company by certain
management and employees of the Company, shall represent at least 20% of the
total debt and equity financing required by the Issuer to complete the
Acquisition (the “
Equity
Contribution
”),
which
cash proceeds will be contributed by HoldCo to the common equity of Merger
Sub;
(b)
the
borrowing by the Issuer of approximately $675 million aggregate principal amount
of term loans under a senior secured credit facility (such term loans, together
with a revolving credit facility of approximately $200 million (a portion of
which may be outstanding immediately following the consummation of the
Transactions), the “
Senior
Credit Facilities
”),
pursuant to the Credit Agreement (as defined herein);
(c)
the
receipt by the Issuer of $750 million of gross proceeds from the issuance by
Merger Sub of its second lien senior notes (the “
Senior
Notes
”
and
the
financing contemplated thereby, the “
Senior
Financing
”)
in a
public offering or in a Rule 144A or other private placement (less the amount
of
the fee for the placement of such notes); and
(d)
the
issuance and sale by the Issuer to the Initial Purchaser of its senior
subordinated notes (the “
Notes
”)
on the
terms set forth herein in an original principal amount of $425
million.
WHEREAS,
on the Closing date, immediately following the Closing of the issuance to the
Initial Purchaser of the Notes, the Initial Purchaser will resell all of the
Notes to the Subsequent Purchasers on the terms and conditions set forth
herein.
WHEREAS,
in connection with the issuance and the Resale (as defined herein) of the Notes,
the Company has prepared and delivered to the Initial Purchaser on the date
hereof a final offering memorandum (including any amendment or supplement
thereto the “
Final
Memorandum
”)
relating to the Notes.
WHEREAS,
the Company, by its execution hereof, hereby confirms that it has authorized
the
use and delivery of the Final Memorandum by the Initial Purchaser (and only
by
the Initial Purchaser) to the Subsequent Purchasers (and only to the Subsequent
Purchasers) in connection with the Resale of the Notes by the Initial Purchaser
to the Subsequent Purchasers.
NOW,
THEREFORE, the parties hereto agree as follows:
SECTION
1.
DEFINITIONS
AND ACCOUNTING TERMS
1.1.
Definitions.
Capitalized
terms that are used herein without definition and are defined in the Indenture
shall have the respective meanings ascribed to them in the Indenture. As used
herein the following terms shall have the meanings specified herein (it being
understood that defined terms shall include in the singular number, the plural,
and in the plural, the singular):
“
Accredited
Investor
”
means
any Person that is an “accredited investor” within the meaning of Rule
501.
“
Acquisition
”
is
defined in the Recitals.
“
Acquisition
Agreement
”
is
defined in the Recitals.
“
Acquisition
Documents
”
means
the Acquisition Agreement and all Schedules thereto.
“
Agreement
”
is
defined in
Section 10.4
.
“
Affiliate
”
is
defined in the Indenture.
“
Applicable
Law
”
is
defined in the Indenture.
“
Board
”
or
“
Board
of Directors
”
are
defined in the Indenture.
“
Business
Day
”
is
defined in the Indenture.
“
Capital
Stock
”
is
defined in the Indenture.
“
Closing
”
is
defined in
Section 2.3(a)
.
“
Closing
Date
”
is
defined in
Section 2.3(a)
.
“
Closing
Payment
”
means,
with respect to the Initial Purchaser, on the Closing Date, an amount in cash
equal to
2
%
of the
aggregate principal amount of Notes purchased by the Initial Purchaser on the
Closing Date.
“
Code
”
means
the Internal Revenue Code of 1986, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time.
“
Commission
”
is
defined in the Indenture.
“
Common
Stock
”
means
common stock, par value, $0.01 per share of HoldCo.
“
Company
”
means
Merger Sub, and from and after the merger of Merger Sub with and into the
Company pursuant to the Acquisition and the execution and delivery by the
parties thereto of the Assumption Agreement, the Company, as the surviving
corporation of the Acquisition.
“
Consent
Solicitation
”
is
defined in Section 3.1(b).
“
Contractual
Obligation
”
means,
as applied to any Person, any provision of any security issued by that Person
or
of any indenture, mortgage, deed of trust, contract, undertaking, agreement
or
other instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is
subject.
“
Credit
Agreement
”
is
defined in the Indenture.
“
Credit
Documents
”
means
the Credit Agreement and all certificates, instruments, and other documents
and
agreements made or delivered in connection therewith and related
thereto.
“
Debt
Tender Offer
”
is
defined in Section 3.1(b).
“
Default
”
is
defined in the Indenture.
“
Discharge
”
is
defined in Section 3.1(b).
“
DTC
”
is
defined in
Section
8.2(a)
.
“
EBITDA
”
is
defined in the Indenture.
“
Enforceability
Exceptions
”
means,
with respect to any specified obligation, any limitations on the enforceability
of such obligation due to (i) the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally,
(ii)
general equitable principles (whether considered in a proceeding in equity
or at
law), (iii) an implied covenant of good faith and fair dealing, and (iv)
considerations of public policy.
“
Entity
”
is
defined in
Section 7.1(a)
.
“
Environmental
Laws
”
shall
mean all applicable laws (including common law), rules, regulations, codes,
ordinances, orders, decrees or judgments, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation
or
reclamation of natural resources, the generation, management, Release or
threatened Release of, or exposure to, any Hazardous Material or to occupational
health and safety matters (to the extent relating to the environment or
Hazardous Materials).
“
Equity
Contribution
”
is
defined in the Recitals.
“
Equity
Interests
”
is
defined in the Indenture.
“
Equity
Financing
”
means
the purchase by the Equity Investors on the Closing Date of HoldCo’s common
stock pursuant to the Equity Contribution.
“
Equity
Financing Documents
”
means
collectively the Equity Subscription Agreements, the Stockholders Agreement
and
all certificates, instruments, and other documents made or delivered in
connection with the Equity Financing.
“
Equity
Investors
”
is
defined in the Recitals.
“
Equity
Subscription Agreements
”
mean
those certain Equity Subscription Agreements, dated as of the date hereof,
between HoldCo and each of the Equity Investors, as amended, supplemented,
restated or otherwise modified from time to time, and shall include Subsequent
Purchaser Equity Subscription Agreements.
“
ERISA
”
means
the Employee Retirement Income Security Act of 1974 (and any successor
provision), as amended from time to time.
“
ERISA
Affiliate
”
shall
mean any trade or business (whether or not incorporated) that, together with
the
Company or any of its Subsidiaries, is treated as a single employer under
Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
“
ERISA
Event
”
shall
mean (a) any Reportable Event or the requirements of Section 4043(b) of ERISA
apply with respect to a Plan; (b) the existence with respect to any Plan of
an
“accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver
of
the minimum funding standard with respect to any Plan, the failure to make
by
its due date a required installment under Section 412(m) of the Code with
respect to any Plan or the failure to make any required contribution to a
Multiemployer Plan; (d) the incurrence by the Company any of its Subsidiaries
or
any ERISA Affiliate of any liability under Title IV of ERISA with respect to
the
termination of any Plan or Multiemployer Plan; (e) the receipt by the Company,
any of its Subsidiaries or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan
or to
appoint a trustee to administer any Plan under Section 4042 of ERISA; (f) the
incurrence by the Company, any of its Subsidiaries or any ERISA Affiliate of
any
liability with respect to the withdrawal or partial withdrawal from any Plan
or
Multiemployer Plan; (g) the receipt by the Company, any of its Subsidiaries
or
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan
from
the Company, any of its Subsidiaries or any ERISA Affiliate of any notice,
concerning the impending imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (h) the conditions
for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to
any
Plan;
or (i) the adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA.
“
Event
of Default
”
is
defined in the Indenture.
“
Exchange
Act
”
is
defined in the Indenture.
“
Exchange
and Registration Rights Agreement
”
means
the Exchange and Registration Rights Agreement among the Company and each
Subsequent Purchaser, dated as of the date hereof, in the form attached hereto
as
Exhibit
B
,
as
amended, supplemented, restated or otherwise modified from time to
time.
“
Existing
Indebtedness
”
is
defined in the Indenture.
“
Existing
Senior Subordinated Notes
”
is
defined in Section 3.1(b).
“
Final
Memorandum
”
is
defined in the Recitals.
“
Financial
Statements
”
is
defined in
Section 4.6
.
“
Financing
Documents
”
means
this Agreement, the Indenture, the Notes and the Exchange and Registration
Rights Agreement.
“
GAAP
”
means
those accounting principles in the United States, which are in effect at the
time of the preparation of financial statements required to be delivered
hereunder (and delivered together with the reconciliation statements provided
for in
Section
6.1(d)
,
if
applicable).
“
Governmental
Authority
”
is
defined in the Indenture.
“
GSMP
Institutional
”
is
defined in the Preamble.
“
GSMP
Offshore
”
is
defined in the Preamble.
“
GSMP
Onshore
”
is
defined in the Preamble.
“
GSMP
VCOC
”
is
defined in the Preamble.
“
Guarantee
”
is
defined in the Indenture.
“
Guarantor
”
is
defined in the Indenture.
“
Hazardous
Materials
”
shall
mean all pollutants, contaminants, wastes, chemicals, materials, substances
and
constituents, including, without limitation, explosive or radioactive substances
or petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls or radon gas, of any nature subject to
regulation or which can give rise to liability under any Environmental
Law.
“
HoldCo
”
is
defined in the Recitals.
“
Holder
”
is
defined in the Indenture.
“
Holdings
”
is
defined in the Recitals.
“
HSR
Act
”
means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (or any successor
provision), as it may be amended from time to time.
“
Indemnitees
”
is
defined in
Section 9.2
.
“
incur
”
is
defined in the Indenture.
“
Indebtedness
”
is
defined in the Indenture.
“
Indenture
”
means
the indenture, dated as of the date hereof by and among the Company, the
Trustee, and the Guarantors, the form of which is attached hereto as
Exhibit
A
,
as it
may be amended, supplemented, restated or otherwise modified from time to
time.
“
Information
Memorandum
”
shall
mean the Confidential Information Memorandum dated August, 2006 relating to
the
funding contemplated by the Credit Agreement, as modified or supplemented prior
to the Closing Date.
“
Initial
Purchaser
”
is
defined in the Preamble.
“
Institutional
Accredited Investors
”
is
defined in
Section 8.1(a)
.
“
Investment
Company Act
”
means
the Investment Company Act of 1940 (or any successor provision), as it may
be
amended from time to time.
“
Lien
”
is
defined in the Indenture.
“
Losses
”
is
defined in paragraph (d) of
Exhibit
C
.
“
Margin
Stock
”
shall
have the meaning assigned to such term in Regulation U.
“
Material
Adverse Effect
”
shall
mean a material adverse effect on the business, property, operations or
condition of the Company and its Subsidiaries, taken as a whole, or the validity
or enforceability of any of the Financing Documents or the rights and remedies
of the Subsequent Purchasers and GSMP VCOC thereunder;
provided
,
however
,
that
solely for purposes of determining whether the condition in
Section
3.1(a)
has been
satisfied in connection with the Closing, any reference to “Material Adverse
Effect” in any of the representations and warranties referred to in
Section
3.1(a)
shall
mean, “Company Material Adverse Effect” as defined in the Acquisition
Agreement.
“
Multiemployer
Plan
”
shall
mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which
the
Company, any of its Subsidiaries or any ERISA Affiliate (other than one
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code
Section 414) is making or accruing an obligation to make contributions, or
has
within any of the preceding six plan years made or accrued an obligation to
make
contributions.
“
Non-Voting
Observer
”
is
defined in
Section 7.1(a)
.
“
Notes
”
is
defined in the Recitals.
“
Organizational
Documents
”
means
(i) with respect to any corporation, its certificate or articles of
incorporation or organization, as amended, and its bylaws, as amended, (ii)
with
respect to any limited partnership, its certificate or articles of limited
partnership, as amended, and its partnership agreement, as amended, (iii) with
respect to any general partnership, its partnership agreement, as amended,
and
(iv) with respect to any limited liability company, its certificate or articles
of organization or formation, as amended, and its operating agreement, as
amended. In the event any term or condition of this Agreement or any other
Financing Document requires any Organizational Document to be certified by
a
secretary of state or similar governmental official, the reference to any such
“Organizational Document” shall only be to a document of a type customarily
certified by such governmental official.
“
PBGC
”
shall
mean the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.
“
Patriot
Act
”
means
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(or
any successor provision), as it may be amended or renewed from time to
time.
“
Permitted
Lien
”
is
defined in the Indenture.
“
Person
”
is
defined in the Indenture.
“
Plan
”
shall
mean any employee pension benefit plan, as such term is defined in Section
3(2)
of ERISA, (other than a Multiemployer Plan), (i) subject to the provisions
of
Title IV of ERISA, (ii) sponsored or maintained (at the time of determination
or
at any time within the five years prior thereto) by the Company, any of its
Subsidiaries or any ERISA Affiliate, or (iii) in respect of which the Company,
any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.
“
Private
Offering
”
means
any offering by the Subsequent Purchasers of some or all of the Notes pursuant
to an available exception from the Securities Act.
“
Projections
”
shall
mean the projections of the Company and any of its Subsidiaries included in
the
Information Memorandum and any other projections and any forward looking
statements (including statements with respect to booked business) of such
entities furnished to a Subsequent Purchaser on behalf of the Company and any
of
its Subsidiaries prior to the Closing Date.
“
Purchase
Price
”
is
defined in
Section 2.2(ii)
.
“
Purchasers
”
is
defined in the Preamble.
“
Qualified
Institutional Buyer
”
means
a
“qualified institutional buyer” as defined in Rule 144A.
“
Real
Property
”
means,
collectively, all right, title and interest (including any leasehold estate)
in
and to any and all parcels of or interests in real property owned in fee or
leased by the Company or any of its Subsidiaries, together with, in each case,
all easements, hereditaments and appurtenances relating thereto, all
improvements and appurtenant fixtures incidental to the ownership or lease
thereof.
“
Release
”
shall
mean any spilling, leaking, seepage, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing, depositing,
emanating or migrating in, into, onto or through the environment.
“
Regulation
D
”
means
Regulation D under the Securities Act (or any successor provision), as it
may be amended from time to time.
“
Regulation
S
”
is
defined in the Indenture.
“
Regulation
T
”
means
Regulation T of the Board of Governors of the Federal Reserve System (or
any successor provision), as it may be amended from time to time.
“
Regulation
U
”
means
Regulation U of the Board of Governors of the Federal Reserve System (or
any successor provision), as it may be amended from time to time.
“
Regulation
X
”
means
Regulation X of the Board of Governors of the Federal Reserve System (or
any successor provision), as it may be amended from time to time.
“
Related
Parties
”
shall
mean, with respect to any specified person, such person’s Affiliates and the
respective directors, trustees, officers, employees, agents and advisors of
such
person and such person’s Affiliates.
“
Reportable
Event
”
shall
mean any reportable event as defined in Section 4043(c) of ERISA or the
regulations issued thereunder, other than those events as to which the 30 day
notice period referred to in Section 4043(c) of ERISA has been waived, with
respect to a Plan (other than a Plan maintained by an ERISA Affiliate that
is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code).
“
Required
Holders
”
is
defined in the Indenture as Holders of at least a majority in aggregate
principal amount of the then outstanding Notes.
“
Resale
”
is
defined in
Section 2.3(i)
.
“
Responsible
Officer
”
of
any
Person means the chairman, the chief executive officer, the president, the
chief
operating officer, the chief financial officer or the chief accounting officer
of such Person.
“
Restricted
Subsidiary
”
is
defined in the Indenture.
“
Rule 144
”
is
defined in the Indenture.
“
Rule 144A
”
is
defined in the Indenture.
“
Rule
501
”
means
Rule 501 under the Securities Act (or any successor provision), as it may be
amended from time to time.
“
Rule 502
”
means
Rule 502 under the Securities Act (or any successor provision), as it may be
amended from time to time.
“
SEC
”
means
the Securities and Exchange Commission.
“
Securities
Act
”
is
defined in the Indenture.
“
Sellers
”
is
defined in the Recitals.
“
Senior
Credit Facilities
”
is
defined in the Recitals.
“
Senior
Financing
”
is
defined in the Recitals.
“
Senior
Financing Documents
”
means
all indentures, agreements, certificates, instruments, and other documents
made
or delivered in connection with the Senior Financing and related
thereto.
“
Senior
Notes
”
is
defined in the Recitals.
“
Specified
Representations
”
means
the representations and warranties set forth in the Financing Documents and
the
Equity Financing Documents relating to corporate power and authority, the
execution, delivery, and enforceability of the Financing Documents and the
Equity Financing Documents, Federal Reserve margin regulations, and the
Investment Company Act.
“
Sponsor
”
is
defined in the Recitals.
“
Stockholders
Agreement
”
means
the Stockholders Agreement, dated as of the date hereof, among HoldCo and the
Equity Investors, in the form previously provided to the Subsequent Purchasers,
as amended, supplemented, restated or otherwise modified from time to
time.
“
Subsequent
Purchasers
”
is
defined in the Preamble.
“
Subsequent
Purchaser Equity Subscription Agreements
”
means
the Subscription Agreements, dated as of the date hereof, between HoldCo and
the
Subsequent Purchasers, in the form previously provided to the Subsequent
Purchasers, as amended, supplemented, restated or otherwise modified from time
to time.
“
Subsequent
Purchaser Stock
”
means
the common stock which the Subsequent Purchasers will subscribe for and purchase
pursuant to the Subsequent Purchaser Equity Subscription Agreements, at the
Closing.
“
Subsidiary
”
is
defined in the Indenture.
“
Taxes
”
is
defined in the Indenture.
“
TIA
”
is
defined in the Indenture.
“
Transaction
Documents
”
means,
collectively, the Acquisition Documents, the Equity Financing Documents, the
Financing Documents, the Senior Financing Documents and the Credit
Documents.
“
Transactions
”
means
the Acquisition and all other transactions provided for in, or contemplated
by,
the Transaction Documents as being transactions to be completed on the Closing
Date or promptly thereafter.
“
Trustee
”
is
defined in the Indenture.
“
Unfunded
Pension Liability
”
means
the excess of a Plan’s benefit liabilities under Section 4001(a)(16) of ERISA,
over the current value of that Plan’s assets, determined in accordance with the
assumptions used for funding the Plan pursuant to Section 412 of the Code for
the applicable plan year.
“
Withdrawal
Liability
”
shall
mean liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part
I of
Subtitle E of Title IV of ERISA.
1.2.
Computation
of Time Periods
.
For
purposes of computation of periods of time hereunder, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
excluding.”
1.3.
Terms
Generally
.
Unless
the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, and (c) the words “including” and “includes” shall
mean “including without limitation” and “includes without limitation”, as
applicable.
1.4.
Accounting
Terms
.
Accounting
terms used but not otherwise defined herein shall have the meanings provided,
and be construed in accordance with, GAAP.
SECTION
2.
AUTHORIZATION
AND ISSUANCE OF NOTES
2.1.
Authorization
of Issue
.
On
or
prior to the execution and delivery of this Agreement, the Company will
authorize the issue and sale of the Notes. The Notes shall be in the form
specified in the Indenture.
2.2.
Sale
and Purchase of the Notes to the Initial Purchaser
.
(i)
Subject
to the terms and conditions of this Agreement (including, without limitation,
Section
3.1
),
the
Company will issue and sell to the Initial Purchaser, and the Initial Purchaser
will purchase from the Company, at the Closing, the Notes.
(ii)
The
aggregate cash purchase price (the “
Purchase
Price
”)
for
the Notes shall be equal to the principal amount of the Notes being so
purchased, net of the Closing Payment with respect thereto, as specified on
Schedule
2.2
.
(iii)
The
parties agree to report the sale and purchase of the Notes for all Tax purposes
in a manner consistent with the foregoing and agree to take no position
inconsistent with the foregoing.
(iv)
The
parties
agree that the failure of the Initial Purchaser to purchase the Notes at the
Closing shall not relieve the Subsequent Purchasers of any of their obligations
under that certain commitment letter, dated August 1, 2006, relating to the
purchase of the Notes.
2.3.
Resale
of the Notes to the Subsequent Purchasers
.
(i)
Subject
to the terms and conditions of this Agreement (including, without limitation,
Section
3.1
),
the
Initial Purchaser will immediately following its purchase of the Notes from
the
Company pursuant to
Section
2.2
,
sell
(the “
Resale
”)
to the
Subsequent Purchasers, and each of the Subsequent Purchasers will purchase
from
the Initial Purchaser, at the Closing, the Notes.
(ii)
The
aggregate cash purchase price for the Resale of the Notes to the Subsequent
Purchaser shall be equal to the aggregate Purchase Price paid by the Initial
Purchaser for the Notes.
(iii)
Schedule
2.2
hereto
sets forth, for each Subsequent Purchaser, the aggregate principal amount of
the
Notes to be purchased by such Subsequent Purchaser and the portion of the
Purchaser Price payable by such Subsequent Purchaser therefor. The obligations
of Subsequent Purchasers to purchase and pay for the Notes hereunder are several
and not joint and no Subsequent Purchaser shall have any liability to any Person
for the performance or non-performance by any other Subsequent
Purchaser.
2.4.
Closing
.
(a)
The
sale
and purchase of the Notes to the Initial Purchaser and the Resale of the Notes
to the Subsequent Purchasers shall occur at the offices of Wachtell, Lipton,
Rosen & Katz, 51 West 52
nd
Street,
New York, New York, 10019 (or at such other place as the Company and the
Purchasers may agree), at 10:00 a.m. local time, at a closing (the “
Closing
”)
on
September 20, 2006, or on such other Business Day or time thereafter as may
be
agreed upon by the Company and the Purchasers (in either case, the date and
time
of the Closing is referred to herein as the “
Closing
Date
”).
At
the Closing (i) the Company will deliver to the Initial Purchaser the Notes
to
be purchased by the Initial Purchaser on the Closing Date, in such denominations
as the Initial Purchaser may request, dated as of the Closing Date against
payment by the Initial Purchaser to the Company or to its order of immediately
available funds in the amount of the Purchase Price, by wire transfer of
immediately available funds to bank account or accounts as the Company may
request.
(b)
If
at the
Closing the Company shall fail to deliver to the Initial Purchaser the Notes
as
provided in
Section
2.4(a)
,
or any
of the conditions specified in
Section
3
shall
not have been fulfilled or waived as provided herein, then the Initial Purchaser
shall, at its election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights the Purchasers may have by reason
of such failure or such non-fulfillment.
SECTION
3.
CONDITIONS
TO CLOSING
3.1.
Conditions
to Closing
.
The
Initial Purchaser’s obligation to purchase and pay for the Notes to be purchased
by it at the Closing is subject to the satisfaction or express waiver by the
Purchasers prior to or at the Closing of each of the conditions specified below
in this
Section
3.1
.
(a)
Representations
and Warranties.
(A)
Each
of the representations made by the Company in the Acquisition Agreement as
are
material to the interests of the Purchasers, but only to the extent that the
Company has the right to terminate its obligations under the Acquisition
Agreement as a result of a breach of such representations in the Acquisition
Agreement (determined without regard to whether any notice is required to be
delivered by the Company) and (B) each of the Specified Representations made
by
the Company, in each
case,
that is qualified as to materiality or Material Adverse Effect shall be true
and
correct and each of such representations and warranties that is not so qualified
shall be true and correct in all material respects on or as of the Closing
Date
as if made on and as of the Closing Date (unless expressly stated to relate
to a
specific earlier date, in which case each of such representations and warranties
that is qualified as to materiality or Material Adverse Effect shall be true
and
correct as of such earlier date, and each of such representations and warranties
that is not so qualified shall be true and correct, in all material respects
as
of such earlier date).
(b)
Existing
Debt.
All
amounts due or outstanding in respect of the existing credit agreement of the
Company shall have been (or substantially simultaneously with the closing under
the Senior Credit Facilities shall be) paid in full, all commitments in respect
thereof terminated and all guarantees thereof and security therefor discharged
and released. The Company will either (i) offer to purchase on the Closing
Date
(the “
Debt
Tender Offer
”)
all of
the Company’s outstanding 10.75% senior subordinated notes due 2012 (the
“
Existing
Senior Subordinated Notes
”)
and,
in connection therewith, amend substantially all of the covenants related
thereto that can be amended with a majority vote of the holders thereof (the
“
Consent
Solicitation
”)
on
terms and conditions customary for such types of tender offers and related
consent solicitations, or (ii) “discharge,” on the Closing Date the Existing
Senior Subordinated Notes pursuant to the terms of the indenture governing
such
notes (the “
Discharge
”).
After
giving effect to the Transactions, the Company and its subsidiaries shall have
outstanding no indebtedness or preferred stock other than (a) the loans and
other extensions of credit under the Senior Credit Facilities, (b) the
Senior Notes, (c) the Notes, and (d) other limited indebtedness and certain
capitalized leases in existence as of the Closing Date).
(c)
Compliance
Certificates.
(i)
Secretary’s
Certificate
.
The
Company and each Guarantor shall have delivered to each Purchaser a Secretary’s
Certificate, dated as of the Closing Date, in the form of
Exhibit
3.1(c)(i)
hereto,
certifying, among other things, as to (i) such entity’s, certificate of
incorporation (or, if a limited liability company, certificate of formation)
and
by-laws (or, if a limited liability company, limited liability company
agreement), (ii) the incumbency and signatures of certain officers of such
entity, and (iii) other corporate or limited liability company, as the case
may
be, proceedings (including board and/or stockholder or member resolutions)
of
such entity relating to the authorization, execution and delivery of the Notes,
this Agreement and the other Transaction Documents to which such entity is
a
party.
(ii)
Officer’s
Certificate
.
The
Company and each Guarantor shall have delivered to each Purchaser an Officer’s
Certificate, dated as of the Closing Date, in the form of
Exhibit
3.1(c)(ii)
hereto,
certifying that the conditions specified in this
Section 3.1
have
been fulfilled or waived.
(iii)
Solvency
Certification
.
The
Company shall have delivered to each Purchaser a certificate from the chief
financial officer or the Vice President and Treasurer of the Company, in the
form of
Exhibit
3.1(c)(iii)
,
certifying on behalf of the Company to the effect that the Company and its
Subsidiaries, on a consolidated basis, are and immediately after giving effect
to the Transactions will be, solvent.
(d)
Opinion
of Counsel.
At
the
Closing the Subsequent Purchasers shall have received opinions from
O’Melveny
& Myers LLP
and
any
local counsel reasonably required by the Subsequent Purchasers in form
reasonably satisfactory to the Subsequent Purchasers.
(e)
Acquisition.
The
Acquisition shall have been consummated in accordance with the terms of the
Acquisition Agreement, without giving effect to any amendments, modifications
or
waivers by Merger Sub thereto that are materially adverse to the interests
of
the Purchasers not approved by the Purchasers (which approval shall not be
unreasonably withheld or delayed).
(f)
Equity
Contribution.
The
Equity Contribution shall have been made in at least the amount set forth in
the
Recitals.
(g)
Credit
Agreement and Senior Financing.
The
Senior Credit Facilities shall have become effective contemporaneously and
the
Issuer shall have borrowed on the Closing Date not more than $675 million in
term loans under the Senior Credit Facilities and the Issuer shall have borrowed
on the Closing Date not more than $750 million pursuant to the Senior Financing,
in each case on terms and conditions consistent with those set forth in that
certain bank commitment letter, substantially in the form previously furnished
to the Purchasers or as otherwise agreed among the parties thereto.
(h)
No
Material Adverse Effect.
There
shall not have occurred since December 31, 2005 any change or condition that
would constitute a “Company Material Adverse Effect” as defined in the
Acquisition Agreement.
(i)
Financial
Information.
The
Purchasers shall have received a pro forma consolidated balance sheet and
related pro forma consolidated statements of income of the Company as of and
for
the twelve-month period ending on the last day of the most recently completed
four-fiscal quarter period ended at least 45 days before the Closing Date,
prepared after giving effect to the Transactions as if the Transactions had
occurred as of such date (in the case of such balance sheet) or at the beginning
of such period (in the case of such other financial statements.
(j)
Other
Information.
The
Purchasers shall have received all documentation and other information required
by regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation the Patriot
Act.
(k)
Proceedings
and Documents.
Each
Purchaser and such Purchaser’s counsel shall have received all counterpart
originals or certified or other copies of this Agreement and the other
Transaction Documents.
(l)
Closing
Payment.
At
the
Closing, the Initial Purchaser shall have received the Closing Payment required
to be paid under
Section
2.2(ii)
,
by
netting such amount from the principal amount of the Notes being purchased
by
the Initial Purchaser, as provided in said Section.
(m)
Deliverables
to the Initial Purchaser.
At
the
Closing, the Initial Purchaser shall have received opinion or advice “10b-5”
letters with respect to the Final Memorandum from each of O’Melveny & Myers
LLP, counsel for the Company and Cahill Gordon & Reindel LLP, counsel for
the Initial Purchaser, in form and substance substantially similar to the
opinion or advice letters delivered to the initial purchasers in connection
with
the Senior Financing.
SECTION
4.
REPRESENTATIONS
AND WARRANTIES
The
Company represents and warrants to the Purchasers on and as of the date hereof
(after giving
pro
forma
effect
to the consummation on the Closing Date of the transactions contemplated by
this
Agreement and the other Transaction Documents, the Acquisition and the issuance
of the Notes to be issued on the date hereof and the application of the proceeds
thereof) as follows (provided, however, that the representations set forth
in
Section
4.21
shall be
made solely to the Initial Purchaser and the Company shall have no liability
to
the Subsequent Purchasers as a result of any breach thereof):
4.1.
Due
Organization; Power and Authority
.
The
Company and each of its Subsidiaries (a) is a partnership, limited liability
company or corporation duly organized, validly existing and in good standing
(or, if applicable in a foreign jurisdiction, enjoys the equivalent status
under
the laws of any jurisdiction of organization outside the United States) under
the laws of the jurisdiction of its organization, (b) has all requisite power
and authority to own its property and assets and to carry on its business as
now
conducted, (c) is qualified to do business in each jurisdiction where such
qualification is required, except where the failure so to qualify would not
reasonably be expected to have a Material Adverse Effect, and (d) has the power
and authority to execute, deliver and perform its obligations under the
Financing Documents and each other agreement or instrument contemplated thereby
to which it is or will be a party and, in the case of the Company, to issue
and
sell the Notes as contemplated hereunder.
4.2.
Capital
Stock and Ownership of HoldCo
.
At
the
Closing, after giving effect to the consummation of the Transactions, (i) the
authorized number of shares of Capital Stock of HoldCo will consist only of
200,000,000 shares
of
Common Stock, par value $0.01 per share,
of
which
4,835,191
shares
of
Common Stock have been issued and are outstanding
and
(ii)
no shares of any class of the Capital Stock of HoldCo will be held in HoldCo’s
treasury or by any of its Subsidiaries. As of the Closing Date, except for
options to acquire 488,184
shares
of
Common Stock issued under HoldCo’s employee stock option plans or pursuant to
the Stockholders Agreement, there are no outstanding securities of HoldCo or
any
of its Subsidiaries that will be convertible into or exchangeable for shares
of
Capital Stock of HoldCo or any of its Subsidiaries, and no outstanding options,
warrants, calls, subscriptions, convertible securities, or other rights,
agreements or commitments which will obligate HoldCo or any of its Subsidiaries
to issue, transfer or sell any shares of Capital Stock of HoldCo or any of
its
Subsidiaries. Schedule 4.2 hereto sets forth the ownership of all outstanding
shares of Common Stock and options as of the Closing Date. Except as disclosed
on Schedule 4.2 or as set forth in the Stockholders Agreement, as of the Closing
Date, there are no outstanding obligations of HoldCo or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any shares of Capital Stock of HoldCo
or any of its Subsidiaries and there are no voting trusts or other agreements
or
understandings to which HoldCo or any of its Subsidiaries is a party with
respect to the holding, voting or disposing of Capital Stock of HoldCo or any
of
its Subsidiaries. As of the Closing
Date,
neither HoldCo nor any of its Subsidiaries has any outstanding bonds,
debentures, notes or other obligations or other securities that entitle the
holders thereof to vote with the shareholders of HoldCo or any of its
Subsidiaries on any matter or which are convertible into or exercisable for
securities having such a right to vote. As of the Closing, and after giving
effect to the sale of the Purchaser Stock to the Purchasers, all of the
outstanding shares of capital stock of HoldCo will have been duly and validly
authorized and issued and will be fully paid and non-assessable, and all
shares
of capital stock of HoldCo and all options to acquire such shares will have
been
offered, issued, sold and delivered in compliance with applicable federal
and
state securities laws.
4.3.
Capital
Stock and Ownership of Company and Subsidiaries.
(a)
Schedule
4.3 sets forth as of the Closing Date the name and jurisdiction of
incorporation, formation or organization of each direct and indirect subsidiary
of HoldCo, as to each such subsidiary, the percentage of each class of Equity
Interests owned by HoldCo or by any such subsidiary.
(b)
As
of the
Closing Date, there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted
to
employees or directors and directors’ qualifying shares) of any nature relating
to any Equity Interests of the Company or any of its Subsidiaries.
4.4.
Due
Authorization, Execution and Delivery
.
(a)
Agreement
.
This
Agreement has been duly authorized, executed and delivered by the Company and,
when duly executed and delivered by the Purchasers and GSMP VCOC in accordance
with its terms, will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with its terms, subject
to the Enforceability Exceptions.
(b)
Indenture
.
The
Indenture has been duly authorized, executed and delivered by, the Company
and,
immediately following the Acquisition, each Guarantor and, when duly executed
and delivered by the Trustee in accordance with its terms, will constitute
valid
and legally binding obligations of the Company and each Guarantor enforceable
against the Company and each Guarantor in accordance with its terms, subject
to
the Enforceability Exceptions.
(c)
Notes
.
The
Notes are in the form contemplated by the Indenture, have been duly authorized
for issuance and sale pursuant to this Agreement and the Indenture and, when
issued and delivered by the Company on the Closing Date as provided herein
and
therein and authenticated by the Trustee as provided in the Indenture, will
have
been duly executed, issued and delivered by the Company, and upon payment and
delivery in accordance with this Agreement will constitute valid and legally
binding obligations of the Company, enforceable against it in accordance with
their terms subject to the Enforceability Exceptions.
(d)
Exchange
and Registration Rights Agreement
.
The
Exchange and Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and, when duly executed and delivered by the
Purchasers parties thereto, will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
its terms, subject to the Enforceability Exceptions.
(e)
Equity
Financing Documents
.
Each of
the Purchaser Equity Subscription Agreements and the Stockholders Agreement
has
been duly authorized, executed and delivered by HoldCo, and, when duly executed
and delivered by the Purchasers party thereto, will constitute valid and legally
binding
obligations
of HoldCo, enforceable against HoldCo in accordance with its terms, subject
to
the Enforceability Exceptions.
(f)
Other
Transaction Documents
.
Each
Transaction Document to which the Company or any of its Subsidiaries is a
party has been duly authorized, executed and delivered by such party a
party thereto and constitutes a valid and legally binding obligation of such
party, enforceable against such party in accordance with its terms, subject
to
the Enforceability Exceptions.
4.5.
Non-Contravention;
Authorizations and Approvals
.
(a)
The
execution, delivery and performance by the Company and each of the Guarantors
of
each of the Financing Documents to which it is a party, and the issue and sale
of Notes hereunder and the transactions forming a part of the Transactions
will
not (i) violate (A) any provision of law, statute, rule or regulation, or of
the
certificate or articles of incorporation or other constitutive documents
(including any partnership, limited liability company or operating agreements)
or by laws of the Company or any such Guarantor, (B) any applicable order of
any
court or any rule, regulation or order of any Governmental Authority or (C)
any
provision of any indenture, certificate of designation for preferred stock,
agreement or other instrument to which the Company or any such Guarantor is
a
party or by which any of them or any of their property is or may be bound,
(ii)
be in conflict with, result in a breach of or constitute (alone or with notice
or lapse of time or both) a default under, give rise to a right of or result
in
any cancellation or acceleration of any right or obligation (including any
payment) or to a loss of a material benefit under any such indenture,
certificate of designation for preferred stock, agreement or other instrument,
where any such conflict, violation, breach or default referred to in clause
(i)
or (ii) of this
Section
4.5(a)
,
would
reasonably be expected to have, individually or in the aggregate a Material
Adverse Effect, or (iii) result in the creation or imposition of any Lien upon
or with respect to any property or assets now owned or hereafter acquired by
the
Company or any such Guarantor, other than the Liens created by the Transaction
Documents and Permitted Liens.
(b)
No
action, consent or approval of, registration or filing with or any other action
by any Governmental Authority or third party is or will be required in
connection with the Transactions or the exercise by a Purchaser or GSMP VCOC
of
its rights under the Financing Documents, except for (a) such actions, consents
and approvals the failure of which to be obtained or made would not reasonably
be expected to have a Material Adverse Effect and (b) filings or other actions
listed on
Schedule 4.5
.
4.6.
Financial
Statements and Projections.
(a)
The
unaudited pro forma consolidated balance sheet and related consolidated
statements of income and cash flows of the Company, together with its
consolidated Subsidiaries (including the notes thereto) (the “Pro Forma
Financial Statements”) and pro forma adjusted EBITDA (the “Pro Forma Adjusted
EBITDA”), for twelve months ended July 1, 2006, copies of which have heretofore
been furnished to a Purchaser (via inclusion in the Information Memorandum),
have been prepared giving effect (as if such events had occurred on such date)
to the Transactions. Each of the Pro Forma Financial Statements and the Pro
Forma Adjusted EBITDA has been prepared in good faith based on assumptions
believed by the Company to have been reasonable as of the date of delivery
thereof (it being understood that such assumptions are based on good faith
estimates of certain items and that the actual amount of such items on the
Closing Date is subject to change), and presents fairly in all material respects
on a pro forma basis the estimated financial position of the Company and its
consolidated Subsidiaries as at July 1, 2006, assuming that the Transactions
had
actually occurred at such date, and the results of operations of the Company
and
its consolidated subsidiaries for the twelve-month period ended July 1, 2006,
assuming that the Transactions had actually occurred on the first day of such
twelve-month period.
(b)
The
audited combined balance sheets of the Company as at the end of the 2003, 2004
and 2005 fiscal years (which fiscal years ended, in each case, on the Saturday
nearest the end of such calendar year), and the related audited combined
statements of income, stockholders’ equity, and cash flows for such fiscal
years, reported on by and accompanied by a report from Ernst & Young, copies
of which have heretofore been furnished to the Purchasers, present fairly in
all
material respects the combined financial position of the Company as at such
date
and the combined results of operations, stockholders’ equity, and cash flows of
the Company for the years then ended.
(c)
All
written information (other than the Projections, estimates and information
of a
general economic nature or general industry nature) (the “Information”)
concerning the Company or any of its Subsidiaries, the Transactions and any
other transactions contemplated hereby included in the Information Memorandum
or
otherwise prepared by or on behalf of the foregoing or their representatives
and
made available to a Purchaser in connection with the Transactions or the other
transactions contemplated hereby, when taken as a whole, was true and correct
in
all material respects, as of the date such Information was furnished to a
Purchaser and as of the Closing Date and did not, taken as a whole, contain
any
untrue statement of a material fact as of any such date or omit to state a
material fact necessary in order to make the statements contained therein,
taken
as a whole, not materially misleading in light of the circumstances under which
such statements were made.
(d)
The
Projections and estimates and information of a general economic nature prepared
by or on behalf of the Company or any of its representatives and that have
been
made available to a Purchaser in connection with the Transactions or the other
transactions contemplated hereby (i) have been prepared in good faith based
upon
assumptions believed by the Company to be reasonable as of the date thereof
(it
being understood that actual results may vary materially from the Projections),
as of the date such Projections and estimates were furnished to a Purchaser
and
as of the Closing Date, and (ii) as of the Closing Date, have not been modified
in any material respect by the Company.
4.7.
No
Material Adverse Effect.
Since
December 31, 2005, there has been no event, development or circumstance that
has
or would reasonably be expected to have a Material Adverse Effect.
4.8.
No
Actions or Proceedings
.
There
are
no actions, suits or proceedings at law or in equity or, to the knowledge of
the
Company, investigations by or on behalf of any Governmental Authority or in
arbitration now pending, or, to the knowledge of the Company, threatened in
writing against or affecting the Company or any of its Subsidiaries or any
business, property or rights of any such person which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
4.9.
Title
to Properties
.
(a)
Each
the Company and any of its Subsidiaries has valid fee simple title to, or valid
leasehold interests in, or easements or other limited property interests in,
all
its Real Properties and has valid title to its personal property and assets,
in
each case, except for Permitted Liens and except for defects in title that
do
not materially interfere with its ability to conduct its business as currently
conducted or to utilize such properties and assets for their intended purposes
and except where the failure to have such title would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect. All such
properties and assets are free and clear of Liens, other than Permitted
Liens.
(b)
Each
of
the Company and any of its Subsidiaries has complied with all obligations under
all leases to which it is a party, except where the failure to comply would
not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and all such leases are in full force and effect, except leases
in respect of which the failure to be in full force and effect would not
reasonably be expected to have a Material Adverse Effect. Except as set forth
on
Schedule
4.9
,
the
Company and any of its Subsidiaries enjoys peaceful and undisturbed possession
under all such leases, other than leases in respect of which the failure to
enjoy peaceful and undisturbed possession would not reasonably be expected
to
have, individually or in the aggregate, a Material Adverse Effect.
4.10.
Intellectual
Property Rights
.
Except
as
would not reasonably be expected to have a Material Adverse Effect and as set
forth in Schedule 4.10, (a) the Company and each of its Subsidiaries owns,
or
possesses the right to use, all of the patents, patent rights, trademarks,
service marks, trade names, copyrights, mask works, domain names, and any and
all applications or registrations for any of the foregoing (collectively,
“Intellectual Property Rights”) that are reasonably necessary for the operation
of their respective businesses, without conflict with the rights of any other
person, (b) to the best knowledge of the Company, neither the Company nor its
Subsidiaries nor any intellectual property right, proprietary right, product,
process, method, substance, part, or other material now employed, sold or
offered by or contemplated to be employed, sold or offered by the Company or
any
of its Subsidiaries, is interfering with, infringing upon, misappropriating
or
otherwise violating any intellectual property rights of any person, and (c)
no
claim or litigation regarding any of the foregoing is pending or, to the best
knowledge of the Company, threatened.
4.11.
Taxes
.
Except
as
set forth on Schedule 4.11:
(a)
Except
as
would not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect, (i) each of the Company and any of its Subsidiaries
has
filed or caused to be filed all federal, state, local and non U.S. Tax returns
required to have been filed by it and (ii) taken as a whole, and each such
Tax
return is true and correct;
(b)
Each
of
the Company and any of its Subsidiaries has timely paid or caused to be timely
paid all Taxes shown to be due and payable by it on the returns referred to
in
clause (a) and all other Taxes or assessments (or made adequate provision (in
accordance with GAAP) for the payment of all Taxes due) with respect to all
periods or portions thereof ending on or before the Closing Date (except Taxes
or assessments that are being contested in good faith by appropriate proceedings
and for which the Company or any of the Subsidiaries (as the case may be) has
set aside on its books adequate reserves in accordance with GAAP), which Taxes,
if not paid or adequately provided for, would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
(c)
Other
than as would not be, individually or in the aggregate, reasonably expected
to
have a Material Adverse Effect: as of the Closing Date, with respect to each
the
Company and its Subsidiaries, (i) there are no claims being asserted in writing
with respect to any Taxes, (ii) no presently effective waivers or extensions
of
statutes of limitation with respect to Taxes have been given or requested and
(iii) no Tax returns are being examined by, and no written notification of
intention to examine has been received from, the Internal Revenue Service or
any
other Taxing authority.
4.12.
Employee
Benefit Plans
.
(a)
Except
as
would not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect: (i) each Plan is in compliance in all material respects
with the applicable provisions of ERISA and the Code; (ii) no Reportable Event
has occurred during the past five years as to which the Company any of its
Subsidiaries or any ERISA Affiliate was required to file a report with the
PBGC,
other than reports that have been filed; (iii) no Plan has any Unfunded Pension
Liability in excess of $20.0 million; (iv) no ERISA Event has occurred or is
reasonably expected to occur; (v) none of the Company and any of its
Subsidiaries has engaged in a “prohibited transaction” (as defined in Section
406 of ERISA and Code Section 4975) in connection with any employee pension
benefit plan (as defined in Section 3(2) of ERISA) that would subject the
Company or any of its Subsidiaries to tax; and (vi) none of the Company, any
of
its Subsidiaries and the ERISA Affiliates (A) has received any written
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, or has knowledge that any
Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated or (B) has incurred or is reasonably expected to incur any withdrawal
liability to any Multiemployer Plan.
(b)
Each
of
the Company and any of its Subsidiaries is in compliance (i) with all applicable
provisions of law and all applicable regulations and published interpretations
thereunder with respect to any employee pension benefit plan or other employee
benefit plan governed by the laws of a jurisdiction other than the United States
and (ii) with the terms of any such plan, except, in each case, for such
noncompliance that would not reasonably be expected to have a Material Adverse
Effect.
(c)
Except
as
would not reasonably be expected to result in a Material Adverse Effect, there
are no pending, or to the knowledge of the Company, threatened claims (other
than claims for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any person as fiduciary or sponsor
of
any Plan that could result in liability to the Company, any of its Subsidiaries
or the ERISA Affiliates.
(d)
Within
the last five years, no Plan of the Company, any of its Subsidiaries or the
ERISA Affiliates has been terminated, whether or not in a “standard termination”
as that term is used in Section 404(b)(1) of ERISA, that would reasonably be
expected to result in liability to the Company, any of its Subsidiaries or
the
ERISA Affiliates in excess of $20.0 million, nor has any Plan of the Company,
any of its Subsidiaries or the ERISA Affiliates (determined at any time within
the past five years) with Unfunded Pension Liabilities been transferred outside
of the “controlled group” (with the meaning of Section 4001(a)(14) of ERISA of
the Company, any of its Subsidiaries or the ERISA Affiliates that has or would
reasonably be expected to result in a Material Adverse Effect.
4.13.
Private
Offering; No Integration or General Solicitation; Rule 144A
Eligibility
.
(a)
Subject
to compliance by the Purchasers with the representations and warranties set
forth in
Section
5
and with
the procedures set forth in
Section
8
,
it is
not necessary in connection with the offer, issue, sale and delivery of the
Notes to the Purchasers on the Closing Date, in the manner contemplated by
this
Agreement and the other Financing Documents to register the Notes or the
Purchaser Stock under the Securities Act or to qualify the Indenture under
the
TIA.
(b)
None
of
the Company or its Subsidiaries and any person acting on any of their behalf
(other than the Purchasers and their Affiliates, as to whom the Company makes
no
any representation or warranty) has, directly or indirectly, offered, issued,
sold or solicited any offer to buy any security of a type which would be
integrated with the sale of the Notes in any manner that would require the
Notes
to be registered under the Securities Act. None of the Company or its
Subsidiaries and any person acting on any of their behalf (other than the
Purchasers and their Affiliates, as to whom the Company makes no any
representation
or warranty) has engaged in any form of general solicitation or general
advertising within the meaning of Rule 502 in connection with the offering
of the Notes.
(c)
Subject
to compliance by the Purchasers with the representations and warranties set
forth in
Section
5
and with
the procedures set forth in
Section
8
,
the
Notes are eligible for resale pursuant to Rule 144A and will not, at the
Closing Date, be of the same class as securities listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted on a U.S.
automated inter-dealer quotation system.
4.14.
Status
under Certain Statutes
.
The
Company or any of its Subsidiaries is not an “investment company” as defined in,
or subject to regulation under, the Investment Company Act of 1940, as
amended.
4.15.
Insurance
.
Schedule
4.15
sets
forth a true, complete and correct description of all material insurance
maintained by or on behalf of the Company or any of its Subsidiaries as of
the
Closing Date. As of such date, such insurance is in full force and
effect.
4.16.
Use
of
Proceeds; Margin Regulations
.
(a)
The
Company will use the proceeds of the Notes (a) to fund a portion of the merger
consideration for the Acquisition, (b) to refinance certain existing
indebtedness of the Company in connection with the Acquisition, and (c) to
pay
related transaction fees and expenses.
(b)
The
Company or any of its Subsidiaries is not engaged principally, or as one of
its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(c)
No
part
of the proceeds of any Note will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (i) to purchase or carry Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
Margin Stock or to refund indebtedness originally incurred for such purpose,
or
(ii) for any purpose that entails a violation of, or that is inconsistent with,
the provisions of the Regulations of the Board, including Regulation U or
Regulation X.
4.17.
Compliance
with Laws; Permits; Environmental Matters
.
(a)
None
of
the Company, any of its Subsidiaries and their respective properties or assets
is in violation of (nor will the continued operation of their material
properties and assets as currently conducted violate) any law, rule or
regulation (including any zoning, building, ordinance, code or approval or
any
building permit, but excluding any Environmental Laws, which are subject to
Section
4.17(b)
),
or is
in default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default would reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
(b)
Except
as
set forth in
Schedule
4.17
and
except as to matters that would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect: (i) no written notice, request
for information, order, complaint or penalty has been received by the Company
or
any of its Subsidiaries, and there are no judicial, administrative or other
actions, suits or proceedings pending or, to the Company’s knowledge, threatened
which allege a violation of or liability under any Environmental
Laws,
in
each case relating to the Company or any of its Subsidiaries, (ii) each of
the
Company and its Subsidiaries has all environmental permits, licenses and
other
approvals necessary for its operations to comply with all applicable
Environmental Laws and is, and during the term of all applicable statutes
of
limitation, has been, in compliance with the terms of such permits, licenses
and
other approvals and with all other applicable Environmental Laws, (iii) to
the
Company’s knowledge, no Hazardous Material is located at, on or under any
property currently owned, operated or leased by the Company or any of its
Subsidiaries that would reasonably be expected to give rise to any cost,
liability or obligation of the Company or any of its Subsidiaries under any
Environmental Laws, and no Hazardous Material has been generated, owned,
treated, stored, handled or controlled by the Company or any of its Subsidiaries
and transported to or Released at any location in a manner that would reasonably
be expected to give rise to any cost, liability or obligation of the Company
or
any of its Subsidiaries under any Environmental Laws and (iv) there are no
agreements in which the Company or any of its Subsidiaries has expressly
assumed
or undertaken responsibility for any known or reasonably likely liability
or
obligation of any other person arising under or relating to Environmental
Laws,
which in any such case has not been made available to the Purchasers prior
to
the date hereof.
4.18.
Solvency
.
(a)
Immediately
after giving effect to the Transactions on the Closing Date, (i) the fair value
of the assets of the Company (individually) and the Company and its Subsidiaries
on a consolidated basis, at a fair valuation, will exceed the debts and
liabilities, direct, subordinated, unmatured, unliquidated, contingent or
otherwise, of the Company (individually) and the Company and its Subsidiaries
on
a consolidated basis, respectively; (ii) the present fair saleable value of
the
property of the Company (individually) and the Company and its Subsidiaries
on a
consolidated basis will be greater than the amount that will be required to
pay
the probable liability of the Company (individually) and the Company and its
Subsidiaries on a consolidated basis, respectively, on their debts and other
liabilities, direct, subordinated, unmatured, unliquidated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(iii) the Company (individually) and the Company and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities, direct,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (iv) the Company (individually) and the Company and
its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted following the
Closing Date.
(b)
On
the
Closing Date, the Company does not intend to, and the Company does not believe
that it or any of its Subsidiaries will, incur debts beyond its ability to
pay
such debts as they mature, taking into account the timing and amounts of cash
to
be received by it or any such Subsidiary and the timing and amounts of cash
to
be payable on or in respect of its Indebtedness or the Indebtedness of any
such
Subsidiary.
4.19.
Labor
and Employment Matters
.
Except
as, individually or in the aggregate, would not reasonably be expected to have
a
Material Adverse Effect: (a) there are no strikes or other labor disputes
pending or threatened against the Company or any of the Subsidiaries; (b) the
hours worked and payments made to employees of the Company or any of its
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any
other applicable law dealing with such matters; and (c) all payments due from
the Company or any of its Subsidiaries or for which any claim may be made
against the Company or any of its Subsidiaries, on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as
a
liability on the books of the Company or any of its Subsidiaries to the extent
required by GAAP. Except as, individually or in the aggregate, would not
reasonably be expected to have a Material
Adverse
Effect, the consummation of the Transactions will not give rise to a right
of
termination or right of renegotiation on the part of any union under any
material collective bargaining agreement to which the Company or any of its
Subsidiaries (or any predecessor) is a party or by which the Company or any
of
its Subsidiaries (or any predecessor) is bound.
4.20.
Brokerage
Fees
.
Except
as
set forth on
Schedule
4.20
,
none of
the Company and their Subsidiaries has paid, or is obligated to pay, to any
Person any brokerage or finder’s fees in connection with the transactions
contemplated hereby or by any other Transaction Document.
4.21.
Final
Memorandum
.
The
Final
Memorandum at the Closing Date does not contain any 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; provided, however, that the Company makes no
representation or warranty as to the information contained in or omitted from
the Final Memorandum in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial Purchaser
specifically for inclusion therein.
SECTION
5.
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SUBSEQUENT PURCHASERS
Each
Subsequent Purchaser, severally and not jointly, represents and warrants to
the
Company as of the date hereof as follows:
5.1.
Purchase
for Investment.
(a)
Such
Subsequent Purchaser is acquiring the Notes for its own account, for investment
purposes only and not with a view to any distribution thereof within the meaning
of the Securities Act.
(b)
Such
Subsequent Purchaser has received such information as it deems necessary in
order to make an investment decision with respect to the Notes and has had
the
opportunity to ask questions of and receive answers from the Company and its
Subsidiaries and their respective officers and directors and to obtain such
additional information which the Company or its Subsidiaries possess or could
acquire without unreasonable effort or expense as such Purchaser deems necessary
to verify the accuracy of the information furnished to such Purchaser and has
asked such questions, received such answers and obtained such information as
it
deems necessary to verify the accuracy of the information furnished to such
Purchaser.
(c)
Such
Subsequent Purchaser is an Accredited Investor.
(d)
Such
Subsequent Purchaser understands that the Notes have not been and, except as
provided in the Exchange and Registration Rights Agreement, will not be
registered under the Securities Act or any state or other securities law, that
the Notes are being issued by the Company in transactions exempt from the
registration requirements of the Securities Act and that the Notes may be resold
only if registered pursuant to the provisions of the Securities Act or if an
exemption from registration under the Securities Act is available.
(e)
Such
Purchaser further understands that the exemption from registration afforded
by
Rule 144 depends on the satisfaction of various conditions, and that, if
applicable, Rule 144 may afford the basis for sales only in limited
amounts.
(f)
Except
as
otherwise disclosed, such Subsequent Purchaser did not employ any broker or
finder in connection with the transactions contemplated in this Agreement and
no
fees or commissions are payable to the Subsequent Purchasers except as otherwise
provided for in this Agreement.
(g)
The
source of funds to be used by such Subsequent Purchaser to pay the portion
of
the Purchase Price paid by such Subsequent Purchaser does not include assets
of
any employee benefit plan (other than a plan exempt from the coverage of ERISA)
or plan or any other entity the assets of which consist of “plan assets” of
employee benefit plans or plans as defined in Department of Labor regulation
Section 2510.3-101. As used in this
Section 5.1(g)
,
the
term “employee benefit plan” shall have the meaning assigned to such term in
Section 3 of ERISA, and the term “plan” shall have the meaning assigned
thereto in Section 4975(e)(1) of the Code.
5.2.
Due
Organization; Corporate Power; Authorization; Enforceability.
It
is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. The execution, delivery and performance of this
Agreement and the Exchange and Registration Rights Agreement are within its
corporate, limited liability company or limited partnership, as the case may
be,
power and authority and have been duly authorized by all necessary action of
such Subsequent Purchaser, do not conflict with or result in a breach of or
violate any of such Subsequent Purchaser’s governing documents or any contract
to which such Subsequent Purchaser is a party or by which its assets are bound
or any Applicable Laws and constitute legal, valid and binding agreements of
such Subsequent Purchaser enforceable against it in accordance with their
respective terms, subject to the Enforceability Exceptions.
5.3.
No
Actions or Proceedings.
There
are
no legal or governmental actions, suits or proceedings pending or, to any
Subsequent Purchaser’s knowledge, threatened against or affecting such
Subsequent Purchaser, or any of its properties or assets which, if adversely
determined, in the aggregate, would reasonably be expected to materially and
adversely affect the ability of such Subsequent Purchaser to consummate any
of
the transactions contemplated by this Agreement or the Exchange and Registration
Rights Agreement.
5.4.
Final
Memorandum
The
Subsequent Purchasers agree and acknowledge that (a) they received the Final
Memorandum in connection with their purchase of the Notes only by reason of
their purchase of the Notes from the Initial Purchaser and (b) they did not
rely
on the Final Memorandum in making their investment decision, and that the
Company will have no liability under this Agreement or otherwise to the
Subsequent Purchasers on account of any statements therein; provided that the
foregoing shall not affect the rights and obligations of the parties under
this
Agreement or otherwise as if the Final Memorandum had not been delivered to
the
Initial Purchaser.
5.5.
Investment
Decision
The
Subsequent Purchasers agree and acknowledge that (i) they did not rely on any
investigation that the Initial Purchaser or any person acting on its behalf
may
have conducted with respect to the Notes
or
the
Company, and (ii) they made their own investment decision regarding the Notes
based on their own investigation of the Company and the
Notes.
SECTION
5A.
OFFERING
BY INITIAL PURCHASER
5A.1.
Offering
by Initial Purchaser
.
(a)
The
Initial Purchaser acknowledges that the Notes have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons, except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.
(b)
The
Initial Purchaser represents and warrants to and agrees with the Company
that:
(i)
it
has
not offered or sold, and will not offer or sell, any Notes within the United
States or to, or for the account or benefit of, U.S. persons (x) as part of
their distribution at any time or (y) otherwise until 40 days after the later
of
the commencement of the offering and the date of closing of the offering except
to those persons whom it reasonably believes to be “qualified institutional
buyers” (as defined in Rule 144A under the Securities Act) or if any such person
is buying for one or more institutional accounts for which such person is acting
as a fiduciary or agent, only when such person has represented to it that each
such account is a qualified institutional buyer 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 in accordance with Rule 144A;
(ii)
neither
it nor any person acting on its behalf has made or will make offers or sales
of
the Notes in the United States by means of any form of general solicitation
or
general advertising (within the meaning of Regulation D) in the United States
or
in any manner involving a public offering within the meaning of Section 4(2)
of
the Act;
(iii)
in
connection with each sale pursuant to
Section
5A(b)(i)
,
it has
taken or will take reasonable steps to ensure that the purchaser of such Notes
is aware that such sale is being made in reliance on Rule 144A;
(iv)
it
is an
institutional “accredited investor” (as defined in 501(a) of Regulation
D).
(c)
The
Initial Purchaser represents and warrants that, (i) on and prior to the Closing
Date, it has made offers and sales of the Notes, and has delivered the Final
Memorandum, only to the Subsequent Purchasers and (ii) it will not deliver
the
Final Memorandum in connection with any subsequent offers or sales of the
Notes.
SECTION
6.
COVENANTS
TO PROVIDE INFORMATION
6.1.
Reports
to Subsequent Purchasers and GSMP VCOC
.
The
Company covenants and agrees (subject to the provisions of
Section
10.14
)
with
each Subsequent Purchaser, any Affiliate thereof and GSMP VCOC, that so long
as
the Subsequent Purchasers and their Affiliates constitute the Required Holders,
t
he
Company and its Subsidiaries
shall
deliver (i) to
each
of
the Subsequent Purchasers, any Affiliate thereof that is a Holder and the
GSMP
VCOC
as
soon
as available, but in any event within 30 days after the end of each of the
first
two months of each fiscal quarter, consolidated balance sheets of the Company
and its consolidated Subsidiaries as at the end of such month and related
consolidated company-prepared statements of income and shareholders’ equity and
of cash flows for the Company and its consolidated Subsidiaries for such
monthly
period and for the portion of the fiscal year ending with such month, in
each
case setting forth in comparative form consolidated figures for the
corresponding period or periods of the preceding fiscal year and (ii) to
GSMP
VCOC copies of all financial statements, reports and certificates that are
provided to Holders under the Indenture concurrently with the delivery thereof
under the Indenture.
SECTION
7.
OTHER
AFFIRMATIVE COVENANTS
The
Company further covenants and agrees (subject to the provisions of
Section
10.14
)
with
the Subsequent Purchasers, until the principal amount of (and premium, if any,
on) all the Notes, and all interest, and other obligations hereunder in respect
thereof (other than indemnification obligations that have not become due and
payable), shall have been paid in full, as follows:
7.1.
Board
Representation
.
(a)
So
long
as the Subsequent Purchasers and their Affiliates constitute the Required
Holders, GSMP VCOC shall have the right to designate an employee of The Goldman
Sachs Group, Inc. or its Affiliates as a non-voting observer (a “
Non-Voting
Observer
”)
to the
Board of Directors of each of the Company and HoldCo (each, an “
Entity
”).
Neither Entity shall establish or employ committees of the Board of Directors
for the purpose of circumventing the rights of the GSMP VCOC to have a
Non-Voting Observer on the Board of Directors. Each Non-Voting Observer
shall be entitled to reimbursement from each Entity for his or her reasonable
travel or other out-of-pocket expenses related to the performance of their
respective duties.
(b)
So
long
as GSMP VCOC shall be entitled to exercise its rights pursuant to this
Section 7.1
,
each
Entity shall hold regular meetings of its Board of Directors periodically at
such times as its Board of Directors may in good faith determine. Within a
reasonable time after each such meeting, either telephonically or in person, of
a Board of Directors of an Entity, such Entity shall cause minutes of such
meeting to be delivered to the Non-Voting Observer.
(c)
The
Non-Voting Observer shall be entitled to be present at all meetings of the
Board
of Directors of each Entity and shall be notified of any such meeting by
reasonable prior notice, including such meeting’s time and place, in the same
manner as directors of such Entity and shall receive monthly financial
statements of the type described in
Section
6.1(a)
above
and copies of all written materials distributed to directors of such Entity
for
purposes of such Board of Directors meetings at the same time as directors
of
such Entity and shall be entitled to participate in discussions and consult
with, and make proposals and furnish advice to, such Board of Directors without
voting;
provided,
however
,
that
such Non-Voting Observer shall not have voting rights with respect to actions
taken or elected not to be taken by the Board of Directors and shall be subject
to all rules governing such Board of Directors and committee, it being
understood that no Board of Directors of any Entity shall be under any
obligation to take any action with respect to any proposals made or advice
furnished by the Non-Voting Observer, and nothing herein shall prevent the
Board
of Directors of any Entity from acting by written instrument to the extent
permitted by Applicable Law. The Non-Voting Observer shall have a duty of
confidentiality to such Entity, including a duty not to disclose and/or use
confidential information, comparable to such duties of a director of such
Entity.
(d)
If
an
issue is to be discussed or otherwise arises at a meeting of the Board of
Directors which, in the reasonable judgment of the Board of Directors, cannot
be
discussed in the presence of the Non-Voting Observer in order to avoid a
conflict of interest on the part of the Non-Voting Observer or to preserve
an
attorney-client or accountant-client or any other available privilege, then
such
issue may be discussed without the Non-Voting Observer being present and may
be
deleted from any materials being distributed in connection with any meeting
at
which such issues are to be discussed, so long as the Non-Voting Observer is
given notice of the occurrence of such meeting and the deletion of such
materials.
7.2.
Access
.
(a)
The
Company will, and will cause its Subsidiaries to, upon reasonable notice at
reasonable times from time to time and without causing undue disruption, (i)
provide GSMP VCOC and its authorized representatives reasonable opportunities
to
routinely consult with and advise the management of the Company and its
Subsidiaries, on all matters relating to the operation of the Company and each
Subsidiary (ii) provide GSMP VCOC and its authorized representatives, subject
to
compliance with Applicable Laws, confidentiality obligations to third parties
and attorney-client privilege, reasonable access during normal business hours
to
all books and records, facilities and properties of the Company and its
Subsidiaries (including copies of such documents as the Company reasonably
approves), and (ii) permit GSMP VCOC and its authorized representatives to
make
such inspections thereof as may be reasonably requested and discuss the affairs,
finances and accounts with the officers thereof.
7.3.
Rule
144A
.
For
so
long as any of the Notes remain outstanding and constitute “restricted
securities” within the meaning of the Securities Act, the Company will make
available at its expense, upon request, to any holder of such Notes, and any
prospective purchasers thereof, the information specified in Rule 144A(d)(4)
under the Securities Act, unless the Company is then subject to Section 13
or
15(d) of the Exchange Act.
7.4.
Corporate
Existence; Businesses and Properties
.
(a)
The
Company will do or cause to be done all things necessary to preserve, renew
and
keep in full force and effect its legal existence, except, in the case of a
Subsidiary of the Company, where the failure to do so would not reasonably
be
expected to have a Material Adverse Effect.
(b)
Except
where the failure to do so would not reasonably be expected to have a Material
Adverse Effect, do or cause to be done all things necessary to (i) lawfully
obtain, preserve, renew, extend and keep in full force and effect the permits,
franchises, authorizations, patents, trademarks, service marks, trade names,
copyrights, licenses and rights with respect thereto necessary to the normal
conduct of its business, (ii) comply in all material respects with all
applicable laws, rules, regulations (including any zoning, building ordinance,
code or approval or any building permits or any restrictions of record) and
judgments, writs, injunctions, decrees and orders of any Governmental Authority,
whether now in effect or hereafter enacted, and (iii) at all times maintain
and
preserve all property necessary to the normal conduct of its business and keep
such property in good repair, working order and condition and from time to
time
make, or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith, if any, may be properly conducted at all
times (in each case except as expressly permitted by this
Agreement).
7.5.
Taxes
and Other Claims.
The
Company will pay and discharge promptly when due all material Taxes imposed
upon
it or upon its income or profits or in respect of its property, before the
same
shall become delinquent or in default, as well as all lawful claims which,
if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to any such Tax or claim so long as the validity or amount thereof
shall
be contested in good faith by appropriate proceedings, and the Company or its
affected Subsidiary, as applicable, shall have set aside on its books reserves
in accordance with GAAP with respect thereto.
7.6.
Books
and Records.
The
Company will maintain all financial records in accordance with
GAAP.
7.7.
Insurance.
The
Company will maintain, with financially sound and reputable insurance companies,
insurance in such amounts and against such risks as are customarily maintained
by similarly situated companies engaged in the same or similar businesses
operating in the same or similar locations and cause the Purchasers to be listed
as a co loss payee on property and casualty policies and as an additional
insured on liability policies.
SECTION
8.
PROVISIONS
RELATING TO RESALES OF NOTES
8.1.
Private
Offerings
.
Following
the consummation of the Resale, and prior to the effectiveness of any
registration statement of the Notes pursuant to the Exchange and Registration
Rights Agreement, the Subsequent Purchasers confirm and agree that they may
resell, pledge or otherwise transfer the Notes only pursuant to Private
Offerings or pursuant to the provisions of Rule 144(k) adopted under the
Securities Act, and only in accordance with the following:
(a)
Offers
and Sales only to Institutional Accredited Investors or Qualified Institutional
Buyers
.
Offers
and sales of the Notes will be made only by the Subsequent Purchasers or
Affiliates thereof who are qualified to do so in the jurisdictions in which
such
offers or sales are made. Each such offer or sale shall be made in accordance
with the Indenture only (i) to persons who are Qualified Institutional
Buyers, (ii) to institutional Accredited Investors that the offeror or seller
reasonably believes to be and, with respect to sales and deliveries, are
Accredited Investors who are not Qualified Institutional Buyers (“
Institutional
Accredited Investors
”)
who
make the representations and warranties set forth in
Section
5
hereof
or (iii) to non-U.S. persons outside the United States (as such terms are
defined in Regulation S) to whom offers and sales of the Notes may be made
in
reliance upon Regulation S and in accordance with applicable foreign
securities laws and subject to delivery of a legal opinion reasonably acceptable
to the Company to the effect that such sale can be made without registration
under the Securities Act.
(b)
No
General Solicitation
.
The
Notes will be offered by approaching prospective subsequent Purchasers on an
individual basis. No general solicitation or general advertising (within the
meaning of Rule 502) and no directed selling efforts (as defined in
Regulation S) will be made in connection with the offering of the
Notes.
(c)
Purchases
by Fiduciaries
.
In the
case of a Subsequent Purchaser acting as a fiduciary for one or more third
parties, in connection with an offer and sale to such purchaser pursuant to
this
Section 8.1
,
such
fiduciary and such third parties shall meet the requirements of
Section
8.1(a)
hereof.
(d)
Restrictive
Legend
.
Upon
original issuance by the Company, and until such time as specified in the
Indenture, the Notes shall bear such legends as are required under the
Indenture.
8.2.
Procedures
and Management Cooperation in Private Offerings
.
(a)
The
Company and the Subsequent Purchasers agree that, at the request of the Required
Holders, the Company will cooperate with the Required Holders and use
commercially reasonable efforts to cause the Notes, if then eligible for the
following treatment, to (i) be registered in the name of Cede & Co., as
nominee of The Depository Trust Company (“
DTC
”)
and
settle through the book-entry system of the DTC and (ii) be eligible for the
National Association of Securities Dealers, Inc. PORTAL market.
(b)
If
requested by the Required Holders, the Company and its Subsidiaries will assist
the Subsequent Purchasers in completing any sale process undertaken in
connection with the private resale of the Notes or any portion thereof
(including any such re-sales of the Notes pursuant to any Private Offering),
to
any number of prospective Holders, subject to
Section
10.14
hereof,
by (i) providing direct contact between senior management and advisors and
prospective purchasers; (ii) responding to inquiries of, and providing answers
to, prospective purchasers; (iii) providing assistance in completion of the
prospective purchasers’ due diligence review; and (iv) hosting one or more
meetings of prospective purchasers;
provided
that
such assistance shall not be required more than two times per year or more
than
five times during the term of the Notes (and it being understood that such
assistance will not include a preparation of an offering memorandum or a similar
document and that the Subsequent Purchasers may not use the Final Memorandum
and
that such assistance will otherwise be limited to assistance set forth under
items (i) through (iv) above).
8.3.
No
Integration
.
None
of
Holdings, the Company and their Affiliates shall make any offer or sale of
securities of any class that is or will be integrated with the sale of the
Notes
by the Company to the Purchasers in a manner that would require registration
of
the Notes under the Securities Act.
SECTION
9.
EXPENSES,
INDEMNIFICATION AND CONTRIBUTION
9.1.
Expenses
of Subsequent Purchasers
.
The
Company will reimburse the Subsequent Purchasers for all reasonable and
documented expenses, including consultant, advisor and counsel fees and
disbursements, incurred by the Subsequent Purchasers in connection with (a)
any
amendment, waiver or consent under or in respect of this Agreement or the other
Financing Documents (whether or not such amendment, waiver or consent becomes
effective) and (b) enforcing, defending or declaring (or determining whether
or
how to enforce, defend or declare) any rights or remedies under this Agreement
or the other Financing Documents or in responding to any subpoena or other
legal
process or informal investigative demand issued in connection with this
Agreement, or the other Financing Documents, including in connection with any
insolvency or bankruptcy of Holdings, the Company or any of their Subsidiaries
or in connection with any work-out or restructuring of the transactions
contemplated hereby, by the Financing Documents or by the Notes. The Company
will pay, and will save the Subsequent Purchasers harmless from, all claims
in
respect of any
fees,
costs or expenses if any, of brokers and finders in relation to the Transactions
engaged by any of the Company or its Subsidiaries.
9.2.
Indemnification
of the Subsequent Purchasers
.
The
Company agrees to indemnify each Subsequent Purchaser, GSMP VCOC, each of their
respective Affiliates and each of their respective directors, trustees,
officers, employees, agents, trustees and advisors (each such person being
called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements (except the allocated costs
of in-house counsel), incurred by or asserted against any Indemnitee arising
out
of, in any way connected with, or as a result of (i) the execution or delivery
of the Transaction Documents or any agreement or instrument contemplated hereby
or thereby, the performance by the parties hereto and thereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated hereby, (ii) the use of the proceeds of
the
Notes or (iii) any claim, litigation, investigation or proceeding relating
to
any of the foregoing, whether or not any Indemnitee is a party thereto, and
regardless of whether any of the foregoing is raised or initiated by a third
party or the Company or any of its Subsidiaries; provided, that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a final,
non
appealable judgment of a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct of such Indemnitee (for purposes
of
this proviso only, each Subsequent Purchaser and GSMP VCOC shall be treated
as
several and separate Indemnitees, but each of them together with its respective
Related Parties, shall be treated as a single Indemnitee). Subject to and
without limiting the generality of the foregoing sentence, the Company agrees
to
indemnify each Indemnitee against, and hold each Indemnitee harmless from,
any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel or consultant fees, charges and disbursements (limited to
not
more than one counsel, plus, if necessary, one local counsel per jurisdiction)
(except the allocated costs of in-house counsel), incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (A) any claim related in any way to Environmental Laws and the Company or
any
of its Subsidiaries, or (B) any actual or alleged presence, Release or
threatened Release of Hazardous Materials at, under, on or from any Property;
provided, that such indemnity shall not, as to any Indemnitee, be available
to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or any of its Related Parties. None of the Indemnitees (or
any
of their respective affiliates) shall be responsible or liable to the Company
or
any of its respective Subsidiaries, Affiliates or stockholders or any other
person or entity for any special, indirect, consequential or punitive damages,
which may be alleged as a result of the Notes or the Transactions. The
provisions of this
Section
9.2
shall
remain operative and in full force and effect regardless of the expiration
of
the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of all amounts owing to a Purchaser or GSMP VCOC pursuant
to the terms of a Transaction Document, the invalidity or unenforceability
of
any term or provision of a Transaction Document, or any investigation made
by or
on behalf of a Purchaser. All amounts due under this
Section
9.2
shall be
payable on written demand therefor accompanied by reasonable documentation
with
respect to any reimbursement, indemnification or other amount
requested.
9.3.
Waiver
of Punitive Damages
.
To
the
extent permitted by applicable law, none of the parties hereto shall assert,
and
each hereby waives, any claim against the other parties (including their
respective Affiliates, partners, stockholders, members, directors, officers,
agents, employees and controlling persons), on any theory of liability for
special, indirect, consequential or punitive damages (as opposed to direct
or
actual damages) arising out
of,
in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Financing Document,
the
Notes or the use of the proceeds thereof.
9.4.
Survival
.
The
obligations of the Company under this
Section 9
will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement and the termination of this
Agreement.
9.5.
Tax
Treatment of Indemnification Payments
.
Any
indemnification payment pursuant to this Agreement shall be treated for all
Tax
purposes as an adjustment to the Purchase Price.
9.6.
Indemnification
of the Initial Purchaser
.
The
Company and the Initial Purchaser agree to the indemnification and contribution
provisions set for in
Exhibit
C
hereto.
SECTION
10.
MISCELLANEOUS
10.1.
Notices
.
Except
as
otherwise expressly provided herein, all notices and other communications shall
have been duly given and shall be effective (a) when delivered (except that
if the day of delivery is not a Business Day, then the next Business Day),
(b) when transmitted via telecopy (or other facsimile device) on a Business
Day during normal business hours to the number set out below if the sender
on
the same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), (c) the day following the day (except
that if such day is not a Business Day, then the next Business Day) on which
the
same has been delivered prepaid to a reputable national overnight air courier
service or (d) the third Business Day following the day on which the same
is sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address set forth below, or at such other address
as
such party may specify by written notice to the other party hereto:
(a)
if
to a
Purchaser or its nominee, or to the GSMP VCOC or its nominee, to such Purchaser,
GSMP VCOC, or nominee at the address specified in Schedule 2.2, with a copy
(which copy shall not constitute notice) as specified in Schedule 2.2, or at
such other address as the Purchaser or its nominee, or the GSMP VCOC or its
nominee, shall have specified to the Company in writing;
(b)
if
to any
Holder, to such Holder at the address as such Holder shall have specified to
the
Company in writing;
(c)
if
to the
Company, to: Berry Plastics Holding Corporation (f/k/a
BPC
Holding Corporation), 101 Oakley Street, Evansville, Indiana 47710, fax
812-429-9534,
Attention:
General
Counsel
,
with a
copy (which copy shall not constitute notice) to:
O’Melveny
& Myers LLP, Times Square Tower, 7 Times Square
,
New
York, NY 10036, fax 212-326-2061, Attention: Gregory Ezring, Esq
.
10.2.
Benefit
of Agreement and Assignments
.
(a)
Except
as
otherwise expressly provided herein, all covenants, agreements and other
provisions contained in this Agreement by or on behalf of any of the parties
hereto shall bind, inure to the benefit of and be enforceable by their
respective successors and permitted assigns;
provided
,
however
,
that
none of the Company may assign or transfer any of its rights or obligations
without the prior written consent of the other parties hereto.
(b)
Nothing
in this Agreement or in any other Financing Document, express or implied, shall
give to any Person other than the parties hereto or thereto and their permitted
successors and assigns any benefit or any legal or equitable right, remedy
or
claim under this Agreement.
(c)
Notwithstanding
anything to the contrary contained herein, the Purchasers may (i) subject to
the
consent of the Company, not to be unreasonably withheld, assign the rights
to
purchase all or any portion of the Notes allocated to such Purchaser pursuant
to
Schedule 2.2 to any Affiliate or direct or indirect limited partner of such
Purchaser or (ii) transfer its Notes (together with its rights hereunder) to
any
Person in compliance with the provisions of this Agreement, subject, in each
case, to such Person becoming a party hereto and the ability of such Person
to
make the representations and warranties set forth in
Section
5
,
and
each such Person that is an Affiliate of a Purchaser shall be entitled to the
full benefit and be subject to the obligations of this Agreement as if such
Person were a Purchaser hereunder (it being understood that each such Person
that is not an Affiliate of a Purchaser shall only be entitled to the rights
of
a Holder and not to any additional rights that a Purchaser may have under this
Agreement).
10.3.
No
Waiver; Remedies Cumulative
.
No
failure or delay on the part of any party hereto in exercising any right, power
or privilege hereunder or under the Notes and no course of dealing between
T the
Company and any other party shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
the Notes preclude any other or further exercise thereof or the exercise of
any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein and in the Notes are cumulative and not exclusive of any rights
or remedies that the parties would otherwise have. No notice to or demand on
the
Company in any case shall entitle the Company to any other or further notice
or
demand in similar or other circumstances or constitute a waiver of the rights
of
the other parties hereto to any other or further action in any circumstances
without notice or demand.
10.4.
Amendments,
Waivers and Consents
.
This
Agreement may be amended, and the observance of any term hereof may be waived
(either retroactively or prospectively), with the written consent of the Company
and the Required Holders;
provided
,
however
,
that no
such amendment or waiver may, (a) without the prior written consent of GSMP
VCOC, amend or waive the provisions of which GSMP VCOC is expressly a
beneficiary, or (b) impose on any Purchaser any additional financial commitment
or obligation to buy additional Notes that it is not otherwise obligated to
buy
hereunder, without the prior written consent of such Purchaser
.
N
o
amendment or waiver of this Agreement will extend to or affect any obligation,
covenant or agreement not expressly amended or waived or thereby impair any
right consequent thereon. As used herein, the term this “
Agreement
”
and
references thereto shall mean this Agreement as it may from time to time be
amended, supplemented or modified.
10.5.
Counterparts
.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered shall be deemed an original, but all of which shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties
hereto.
10.6.
Reproduction
.
This
Agreement, the other Transaction Documents and all documents relating hereto
and
thereto, including: (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by the Purchasers at the Closing (except
the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished in connection herewith, may be
reproduced by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and any original document so reproduced
may be destroyed. The Company and each Purchaser agree and stipulate that,
to
the extent permitted by Applicable Law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not
such
reproduction was made in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence. This
Section
10.6
shall
not prohibit any party hereto or any holder of the Notes from contesting any
such reproduction to the same extent that it could contest the original or
from
introducing evidence to demonstrate the inaccuracy of any such
reproduction.
10.7.
Headings
.
The
headings of the sections and subsections hereof are provided for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
10.8.
Survival
of Representations, Warrants, Covenants and Indemnities
.
All
representations, warranties, covenants and indemnities set forth herein shall
survive the execution and delivery of this Agreement, the issuance of the Notes,
and, except as otherwise expressly provided herein with respect to covenants,
the payment of principal of the Notes and any other obligations
hereunder.
10.9.
Governing
Law; Submission to Jurisdiction; Venue
.
(a)
THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS
OF
THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
(b)
If
any
action, proceeding or litigation shall be brought in order to enforce any right
or remedy under this Agreement or any of the Notes, each party hereto hereby
consents and will submit, and will cause each of their respective Subsidiaries
to submit, to the jurisdiction of any state or federal court of competent
jurisdiction sitting within the area comprising the Southern District of New
York on the date of this Agreement. Each party hereto hereby irrevocably waives,
and will cause each of their respective Subsidiaries to waive, any objection,
including, but not limited to, any objection to the laying of venue or based
on
the grounds of
forum
non conveniens
,
which
they may now or hereafter have to the bringing of
any
such
action, proceeding or litigation in such jurisdiction. The Company further
agrees that it shall not bring any action, proceeding or litigation arising
out
of this Agreement, the Notes in any state or federal court other than any
state
or federal court of competent jurisdiction sitting within the area comprising
the Southern District of New York on the date of this
Agreement.
(c)
Each
party hereto irrevocably consents, and will cause each of their respective
Subsidiaries to consent, to the service of process of any of the applicable
aforementioned courts in any such action, proceeding or litigation by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to
the address set forth in
Section 10.1
,
such
service to become effective thirty (30) days after such mailing.
(d)
Nothing
herein shall affect the right of (i) any party hereto to serve process in any
other manner permitted by law or (ii) the Purchasers
to
commence legal proceedings or otherwise proceed against the Company or any
of
its Subsidiaries in any other jurisdiction
.
If
service of process is made on a designated agent it should be made by either
(i) personal delivery or (ii) mailing a copy of summons and complaint to
the agent via registered or certified mail, return receipt
requested.
(e)
EACH
PARTY HERETO HEREBY WAIVES,
AND
WILL
CAUSE EACH OF THEIR RESPECTIVE SUBSIDIARIES TO WAIVE
,
ANY AND
ALL RIGHTS ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION,
PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT.
10.10.
Severability
.
If
any
provision of this Agreement is determined to be illegal, invalid or
unenforceable, such provision shall be fully severable to the extent of such
illegality, invalidity or unenforceability and the remaining provisions shall
remain in full force and effect and shall be construed without giving effect
to
the illegal, invalid or unenforceable provisions.
10.11.
Entirety
.
This
Agreement together with the other Financing Documents represents the entire
agreement of the parties hereto and thereto, and supersedes all prior agreements
and understandings, oral or written, if any, relating to the Financing Documents
or the transactions contemplated herein or therein.
10.12.
Construction
.
Each
covenant contained herein shall be construed (absent express provision to the
contrary) as being independent of each other covenant contained herein, so
that
compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any other covenant. Where any
provision herein refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person, whether or not
expressly specified in such provision.
10.13.
Incorporation
.
All
Schedules attached hereto are incorporated as part of this Agreement as if
fully
set forth herein.
10.14.
Confidentiality
.
(a)
Subject
to the provisions of clauses (b) and (e) of this
Section 10.14
,
each of
the Purchasers and GSMP VCOC agrees that it will not disclose without the prior
written (including e-mail) consent of Holdings or the Company (other than to
its
employees, auditors, investors, partners, creditors, advisors, counsel or any
rating agencies that are reviewing securities or loans issued by such Purchaser
or GSMP VCOC, in each case, to the extent such disclosure reasonably relates
to
the administration of the investment represented by its Notes and who are
informed that such information is subject to the provisions of this
Section
10.14
and who
enter into confidentiality arrangements with such Purchaser or GSMP VCOC in
form
and substance consistent with the provisions of this
Section
10.14
applicable to Purchasers reasonably satisfactory to such Purchaser or GSMP
VCOC
forms of which will be provided to the Company prior to their use) any
information which has been furnished to such Purchaser or GSMP VCOC in
connection with its evaluation of an investment in the Notes and of the other
transactions referred to herein or is now or in the future furnished pursuant
to
this Agreement (including
Sections
6.1, 7.1 or 7.2
hereof)
or any other Transaction Document;
provided
that any
Purchaser or GSMP VCOC may disclose any such information (i) as was or has
become generally available to the public other than by virtue of a breach of
this
Section 10.14(a)
or any
other confidentiality obligation by such Purchaser or GSMP VCOC or any
other Person to whom such Purchaser or GSMP VCOC has provided such information
as permitted by this
Section 10.14
,
provided
that
this clause (i) shall not permit any Purchaser to deliver the Final Memorandum
to any third party, (ii) as may be required in any report, statement or
testimony required to be submitted to any municipal, state or Federal regulatory
body having or claiming to have jurisdiction over such Purchaser or GSMP VCOC
or
to the Commission or similar organizations (whether in the United States of
America or elsewhere) or their successors, (iii) as may be required or in the
opinion of counsel appropriate in respect of any summons or subpoena or in
connection with any litigation, (iv) as may be required or in the opinion of
counsel appropriate in order to comply with any law, order, regulation or ruling
applicable to such Purchaser or GSMP VCOC and (v) other than the Final
Memorandum, to any prospective or actual subsequent Purchaser, in connection
with any contemplated transfer of any of the Notes by such Purchaser;
provided
that
prior to or concurrently with any disclosure of information to any Person
pursuant to this clause (v) any such prospective or actual subsequent Purchaser
expressly agrees in writing to be bound by the confidentiality provisions
contained in this
Section 10.14
pursuant
to a confidentiality agreement with Holdings or the Company embodying the
provisions of this
Section 10.14
.
Each of
the Purchasers and GSMP VCOC agrees that in the event it intends to disclose
confidential information in accordance with clauses (ii), (iii) or (iv) above,
it shall, to the extent reasonably practicable, provide Holdings and the Company
notice of such requirement prior to making any disclosure so that Holdings
or
the Company may seek an appropriate protective order or confidential treatment
of the information being disclosed.
(b)
The
Company hereby acknowledges and agrees that each Purchaser and GSMP VCOC may
share with any of its Affiliates, and such Affiliates may share with such
Purchaser and GSMP VCOC, any information related to the Company or any of its
Subsidiaries (including any nonpublic information regarding the creditworthiness
of, the Company or any of its Subsidiaries) to the extent such sharing
reasonably relates to the administration of the investment represented by its
Notes and such Affiliates are informed that such information is subject to
the
provisions of this
Section
10.14
;
provided
such
Persons shall be subject to the provisions of this
Section 10.14
to the
same extent as such Purchaser and GSMP VCOC.
(c)
Without
limiting the obligations of the Company to provide information to the Purchasers
under this Agreement, each Purchaser and GSMP VCOC understands that it may
receive material non-public information relating to the Company pursuant to
this
Agreement, or upon exercise of its rights hereunder (including pursuant to
Section
7.1
or
7.2
)
and
acknowledge that the Company shall not have
any
duty to disclose any information publicly or privately to any other Person
in
connection with any actual or proposed transfer of the Notes or any interest
therein.
(d)
Notwithstanding
anything to the contrary set forth herein, each party (and each of their
respective Affiliates, partners, shareholders, directors, officers, employees,
representatives or other agents) may disclose to any and all Persons, without
limitations of any kind, the tax treatment and tax structure of the Transactions
and all materials of any kind (including opinions and other tax analyses) that
are provided to any such party relating to such tax treatment and tax structure.
However, any information relating to the tax treatment or tax structure shall
remain subject to the confidentiality provisions hereof (and the foregoing
sentence shall not apply) to the extent reasonably necessary to enable the
parties hereto, their respective Affiliates, and their respective Affiliates’
partners, shareholders, directors, officers and employees to comply with
applicable securities laws. For this purpose, “tax structure” means any facts
relevant to the federal income tax treatment of the Transactions but does not
include information relating to the identity of any of the parties hereto or
any
of their respective Affiliates.
10.15.
No
Personal Obligations
.
Notwithstanding
anything to the contrary contained herein or in any Financing Document, it
is
expressly understood and the Purchasers expressly agree that nothing contained
herein or in any other Financing Document or in any other document contemplated
hereby or thereby (whether from a covenant, representation, warranty or other
provision herein or therein) shall create, or be construed as creating, any
personal liability of any stockholder, director, officer, member, partner,
manager or employee of the Company and its Subsidiaries (excluding any such
Person which is a Guarantor or other express obligor on the Notes) in such
Person’s capacity as such, with respect to (a) any payment obligation of
the Company or any of their Subsidiaries, (b) any obligation of the Company
or any of its Subsidiaries to perform any covenant, undertaking, indemnification
or agreement, either express or implied, contained herein or in any other
Financing Document, (c) any representation or warranty contained herein or
any
other Financing Document, (d) any other claim or liability to the
Purchasers under or arising under this Agreement or any other Financing Document
or in any other document contemplated hereby or thereby, or (e) any credit
extended or loan made;
provided
that
nothing herein shall be deemed to be a waiver of claims arising from
fraud.
10.16.
Currency
.
Unless
otherwise specified, all dollar amounts referred to in this Agreement are in
lawful money of the United States.
10.17.
No
Fiduciary Duty
.
The
Company acknowledges and agrees that (i) the purchase and sale of the Notes
pursuant to this Agreement is an arm's-length commercial transaction between
the
Company, on the one hand, and the several Purchasers, on the other, (ii) in
connection therewith and with the process leading to such transaction each
Purchaser is acting solely as a principal and not the agent or fiduciary of
the
Company, (iii) no Purchaser has assumed an advisory or fiduciary responsibility
in favor of the Company with respect to the transactions contemplated hereby
or
the process leading thereto (irrespective of whether such Purchaser has advised
or is currently advising the Company on other matters) or any other obligation
to the Company except the obligations expressly set forth in this Agreement
and
(iv) the Company has consulted its own legal and financial advisors to the
extent it deemed appropriate. The Company agrees that it will not claim that
the
Purchasers, or any of them, has rendered advisory services of any nature or
respect, or owes a fiduciary or similar duty to the Company, in connection
with
such transactions or the process leading thereto.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above
written.
|
BPC
ACQUISITION CORP.
By:
_________________________
Name:
Title:
|
[Note
Purchase Agreement]
IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above
written.
|
GOLDMAN,
SACHS & CO.
By:
_________________________
Name:
Title:
|
[Note
Purchase Agreement]
IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above
written.
|
GSMP
2006 ONSHORE US, LTD.
By:
_________________________
Name:
Title:
|
|
|
|
GSMP
2006 OFFSHORE US, LTD.
By:
_________________________
Name:
Title:
|
|
|
|
GSMP
2006 INSTITUTIONAL US, LTD.
By:
_________________________
Name:
Title:
|
|
|
|
GS
MEZZANINE
PARTNERS 2006 INSTITUTIONAL, L.P.
By:
GS
Mezzanine Advisors 2006, L.L.C
its
General Partner
By:
_________________________
Name:
Title:
|
[Note
Purchase Agreement]
EXHIBIT
C
Indemnification
and Contribution In Favor of the Initial Purchaser
(a)
The
Company agrees to indemnify and hold harmless the Initial Purchaser, the
directors, officers and Affiliates of the Initial Purchaser and each person
who
controls the Initial Purchaser within the meaning of either the Securities
Act
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other U.S. federal or state statutory law
or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in
the Final Memorandum or in any amendment or supplement thereto or arise out
of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and agree (subject to the limitations set forth in the provisos to this
sentence) to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by it in connection with investigating
or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any
such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
in
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchaser specifically for inclusion
therein. This indemnity agreement will be in addition to any liability that
the
Company may otherwise have. The Company shall not be liable under this Exhibit
C
to any indemnified party regarding any settlement or compromise or consent
to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual
or
potential parties to such claim or action) unless such settlement, compromise
or
consent is consented to by the Company which consent shall not be unreasonably
withheld.
(b)
The
Initial Purchaser agrees to indemnify and hold harmless (i) as of the date
hereof, the Company, (ii) each person, if any, who controls (within the meaning
of either the Act or the Exchange Act) as of the date hereof, the Company,
and
(iii) as of the date hereof, the directors and officers of the Company, to
the
same extent as the foregoing indemnity from the Company, but only with reference
to written information relating to the Initial Purchaser furnished to the
Company by or on behalf of the Initial Purchaser specifically for inclusion
in
the Final Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability that the Initial Purchaser may
otherwise have. The Company acknowledges that the first paragraph under the
heading “Plan of Distribution” in the Final Memorandum constitutes the only
information furnished in writing by or on behalf of the Initial Purchaser for
inclusion in the Final Memorandum.
(c)
Promptly
after receipt by an indemnified party under this Exhibit C of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Exhibit C,
notify the indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did
not
otherwise learn of such action and such failure results in the forfeiture by
the
indemnifying party of substantial rights or defenses and (ii) will not, in
any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or
(b)
above, except as provided in paragraph (d) below. The indemnifying party shall
be entitled to appoint counsel (including local counsel) of the indemnifying
party’s choice at the indemnifying party’s expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party
shall
not
thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained
by
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses
of
such separate counsel 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 (based on the advice of counsel to the indemnified person); (ii)
such
action includes both the indemnified party and the indemnifying party and
the
indemnified party shall have reasonably concluded (based on the advice of
counsel to the indemnified person) that there may be legal defenses available
to
it and/or other indemnified parties that are different from or additional
to
those available to the indemnifying party; (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 notice of
the
institution of such action; or (iv) the indemnifying party shall authorize
the
indemnified party to employ separate counsel at the expense of the indemnifying
party. It is understood and agreed that the indemnifying person shall not,
in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate
firm
(in addition to any local counsel) for all indemnified persons. Any such
separate firm for any Initial Purchaser, its Affiliates, directors and officers
and any control persons of such Initial Purchaser shall be designated in
writing
by the Initial Purchaser, and any such separate firm for the Company and
any
control persons of the Company and any officers or directors of the Company
shall be designated in writing by the Company. An indemnifying party will
not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim, action,
suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out
of such claim, action, suit or proceeding and does not include any statement
as
to, or any admission of, fault, culpability or failure to act by or on behalf
of
any indemnified party.
(d)
In
the
event that the indemnity provided in paragraph (a) or (b) of this Exhibit C
is
unavailable to or insufficient to hold harmless an indemnified party for any
reason (other than by virtue of the failure of an indemnified party to notify
the indemnifying party of its right to indemnification pursuant to subsection
(a) or (b) above, where such failure materially prejudices the indemnifying
party (through the forfeiture of substantial rights or defenses)), the Company,
on the one hand, and the Initial Purchaser, on the other hand, severally agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending any loss, claim, damage, liability or action)
(collectively “Losses”) to which the Company and the Initial Purchaser may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and by the Initial Purchaser, on
the
other hand, from the offering of the Notes; provided, however, that in no case
shall the Initial Purchaser be responsible for any amount in excess of the
purchase discount or commission applicable to the Notes related to the Losses
purchased by the Initial Purchaser hereunder. If the allocation provided by
the
immediately preceding sentence is unavailable for any reason or not permitted
by
applicable law, the Company, on the one hand, and the Initial Purchaser, on
the
other hand, severally shall contribute in such proportion as is appropriate
to
reflect not only such relative benefits but also the relative fault of the
Company, on the one hand, and the Initial Purchaser, on the other hand, in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by them, and benefits received by the
Initial Purchaser shall be deemed to be equal to the total purchase discounts
and commissions received by them. Relative fault shall be determined by
reference to, among
other
things, whether any untrue or alleged untrue statement of a material fact
or the
omission or alleged omission to state a material fact relates to information
provided by the Company, on the one hand, or the Initial Purchaser, on the
other
hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission and any other equitable considerations appropriate in the
circumstances. The Company and the Initial Purchaser agree that it would
not be
just and equitable if the amount of such contribution were determined by
pro
rata allocation or any other method of allocation that does not take account
of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchaser’s obligations to contribute pursuant to
this Exhibit C are several in proportion to their respective purchase
obligations hereunder and not joint. For purposes of this Exhibit C, each
person, if any, who controls the Initial Purchaser within the meaning of
either
the Act or the Exchange Act and each director, officer, employee, Affiliate
and
agent of the Initial Purchaser shall have the same rights to contribution
as the
Initial Purchaser, and each person who controls the Company within the meaning
of either the Act or the Exchange Act and the respective officers and directors
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).
BPC
ACQUISITION CORP.
and
(following
the merger of BPC Acquisition Corp.
with
and into BPC Holding Corporation,
BPC
HOLDING CORPORATION,
as
Issuer,
and
certain Guarantors)
11%
Senior Subordinated Notes due 2016
________________________
INDENTURE
Dated
as of September 20, 2006
________________________
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as
Trustee
|
ARTICLE
1
|
DEFINITIONS
AND INCORPORATION BY REFERENCE
|
1
|
Section
1.01.
|
Definitions
|
1
|
Section
1.02.
|
Other
Definitions
|
35
|
Section
1.03.
|
Incorporation
by Reference of Trust Indenture Act
|
36
|
Section
1.04.
|
Rules
of Construction
|
37
|
ARTICLE
2
|
THE
SECURITIES
|
37
|
Section
2.01.
|
Amount
of Securities
|
38
|
Section
2.02.
|
Form
and Dating
|
38
|
Section
2.03.
|
Execution
and Authentication
|
39
|
Section
2.04.
|
Registrar
and Paying Agent
|
40
|
Section
2.05.
|
Paying
Agent to Hold Money in Trust
|
40
|
Section
2.06.
|
Holder
Lists
|
40
|
Section
2.07.
|
Transfer
and Exchange
|
41
|
Section
2.08.
|
Replacement
Securities
|
41
|
Section
2.09.
|
Outstanding
Securities
|
42
|
Section
2.10.
|
Temporary
Securities
|
42
|
Section
2.11.
|
Cancellation
|
42
|
Section
2.12.
|
Defaulted
Interest
|
43
|
Section
2.13.
|
CUSIP
Numbers, ISINs, etc
|
43
|
Section
2.14.
|
Calculation
of Principal Amount of Securities
|
43
|
ARTICLE
3
|
REDEMPTION
|
43
|
Section
3.01.
|
Redemption
|
43
|
Section
3.02.
|
Applicability
of Article
|
44
|
Section
3.03.
|
Notices
to Trustee
|
44
|
Section
3.04.
|
Selection
of Securities to Be Redeemed
|
44
|
Section
3.05.
|
Notice
of Optional Redemption
|
44
|
Section
3.06.
|
Effect
of Notice of Redemption
|
45
|
Section
3.07.
|
Deposit
of Redemption Price
|
45
|
Section
3.08.
|
Securities
Redeemed in Part
|
45
|
ARTICLE
4
|
COVENANTS
|
46
|
Section
4.01.
|
Payment
of Securities
|
46
|
Section
4.02.
|
Reports
and Other Information
|
46
|
Section
4.03.
|
Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock
and
Preferred Stock
|
47
|
Section
4.04.
|
Limitation
on Restricted Payments
|
53
|
Section
4.05.
|
Dividend
and Other Payment Restrictions Affecting Subsidiaries
|
58
|
Section
4.06.
|
Asset
Sales
|
59
|
Section
4.07.
|
Transactions
with Affiliates
|
63
|
Section
4.08.
|
Change
of Control
|
66
|
Section
4.09.
|
Compliance
Certificate
|
67
|
Section
4.10.
|
Further
Instruments and Acts
|
68
|
Section
4.11.
|
Future
Guarantors
|
68
|
Section
4.12.
|
Liens
|
68
|
Section
4.13.
|
Limitation
on Other Senior Subordinated Indebtedness
|
68
|
Section
4.14.
|
Maintenance
of Office or Agency
|
69
|
Section
4.15.
|
Suspension
of Certain Covenants
|
69
|
ARTICLE
5
|
SUCCESSOR
COMPANY
|
70
|
Section
5.01.
|
When
Issuer May Merge or Transfer Assets
|
70
|
ARTICLE
6
|
DEFAULTS
AND REMEDIES
|
73
|
Section
6.01.
|
Events
of Default
|
73
|
Section
6.02.
|
Acceleration
|
75
|
Section
6.03.
|
Other
Remedies
|
75
|
Section
6.04.
|
Waiver
of Past Defaults
|
75
|
Section
6.05.
|
Control
by Majority
|
76
|
Section
6.06.
|
Limitation
on Suits
|
76
|
Section
6.07.
|
Rights
of the Holders to Receive Payment
|
76
|
Section
6.08.
|
Collection
Suit by Trustee
|
76
|
Section
6.09.
|
Trustee
May File Proofs of Claim
|
77
|
Section
6.10.
|
Priorities
|
77
|
Section
6.11.
|
Undertaking
for Costs
|
77
|
Section
6.12.
|
Waiver
of Stay or Extension Laws
|
78
|
ARTICLE
7
|
TRUSTEE
|
78
|
Section
7.01.
|
Duties
of Trustee
|
78
|
Section
7.02.
|
Rights
of Trustee
|
79
|
Section
7.03.
|
Individual
Rights of Trustee
|
80
|
Section
7.04.
|
Trustee’s
Disclaimer
|
80
|
Section
7.05.
|
Notice
of Defaults
|
81
|
Section
7.06.
|
Reports
by Trustee to the Holders
|
81
|
Section
7.07.
|
Compensation
and Indemnity
|
81
|
Section
7.08.
|
Replacement
of Trustee
|
82
|
Section
7.09.
|
Successor
Trustee by Merger
|
83
|
Section
7.10.
|
Eligibility;
Disqualification
|
83
|
Section
7.11.
|
Preferential
Collection of Claims Against the Issuer
|
83
|
ARTICLE
8
|
DISCHARGE
OF INDENTURE; DEFEASANCE
|
84
|
Section
8.01.
|
Discharge
of Liability on Securities; Defeasance
|
84
|
Section
8.02.
|
Conditions
to Defeasance
|
85
|
Section
8.03.
|
Application
of Trust Money
|
86
|
Section
8.04.
|
Repayment
to Issuer
|
86
|
Section
8.05.
|
Indemnity
for U.S. Government Obligations
|
86
|
Section
8.06.
|
Reinstatement
|
87
|
ARTICLE
9
|
AMENDMENTS
AND WAIVERS
|
87
|
Section
9.01.
|
Without
Consent of the Holders
|
87
|
Section
9.02.
|
With
Consent of the Holders
|
88
|
Section
9.03.
|
Compliance
with Trust Indenture Act
|
89
|
Section
9.04.
|
Revocation
and Effect of Consents and Waivers
|
89
|
Section
9.05.
|
Notation
on or Exchange of Securities
|
89
|
Section
9.06.
|
Trustee
to Sign Amendments
|
90
|
Section
9.07.
|
Payment
for Consent
|
90
|
Section
9.08.
|
Additional
Voting Terms; Calculation of Principal Amount
|
90
|
ARTICLE
10
|
SUBORDINATION
OF THE SECURITIES
|
90
|
Section
10.01.
|
Agreement
to Subordinate
|
90
|
Section
10.02.
|
Liquidation,
Dissolution, Bankruptcy
|
91
|
Section
10.03.
|
Default
on Designated Senior Indebtedness
|
91
|
Section
10.04.
|
Acceleration
of Payment of Securities
|
92
|
Section
10.05.
|
When
Distribution Must Be Paid Over
|
92
|
Section
10.06.
|
Subrogation
|
92
|
Section
10.07.
|
Relative
Rights
|
93
|
Section
10.08.
|
Subordination
May Not Be Impaired by Issuer
|
93
|
Section
10.09.
|
Rights
of Trustee and Paying Agent
|
93
|
Section
10.10.
|
Distribution
or Notice to Representative
|
93
|
Section
10.11.
|
Article
10 Not to Prevent Events of Default or Limit Right to
Accelerate
|
93
|
Section
10.12.
|
Trust
Monies Not Subordinated
|
93
|
Section
10.13.
|
Trustee
Entitled to Rely
|
94
|
Section
10.14.
|
Trustee
to Effectuate Subordination
|
94
|
Section
10.15.
|
Trustee
Not Fiduciary for Holders of Senior Indebtedness
|
94
|
Section
10.16.
|
Reliance
by Holders of Senior Indebtedness on Subordination
Provisions
|
94
|
ARTICLE
11
|
GUARANTEES
|
95
|
Section
11.01.
|
Guarantees
|
95
|
Section
11.02.
|
Limitation
on Liability
|
97
|
Section
11.03.
|
Successors
and Assigns
|
98
|
Section
11.04.
|
No
Waiver
|
98
|
Section
11.05.
|
Modification
|
98
|
Section
11.06.
|
Execution
of Supplemental Indenture for Future Guarantors
|
98
|
Section
11.07.
|
Non-Impairment
|
99
|
ARTICLE
12
|
SUBORDINATION
OF THE GUARANTEES
|
99
|
Section
12.01.
|
Agreement
to Subordinate
|
99
|
Section
12.02.
|
Liquidation,
Dissolution, Bankruptcy
|
99
|
Section
12.03.
|
Default
on Designated Senior Indebtedness of a Guarantor
|
100
|
Section
12.04.
|
Demand
for Payment
|
101
|
Section
12.05.
|
When
Distribution Must Be Paid Over
|
101
|
Section
12.06.
|
Subrogation
|
101
|
Section
12.07.
|
Relative
Rights
|
101
|
Section
12.08.
|
Subordination
May Not Be Impaired by a Guarantor
|
101
|
Section
12.09.
|
Rights
of Trustee and Paying Agent
|
102
|
Section
12.10.
|
Distribution
or Notice to Representative
|
102
|
Section
12.11.
|
Article
12 Not to Prevent Events of Default or Limit Right to
Accelerate
|
102
|
Section
12.12.
|
Trustee
Entitled to Rely
|
102
|
Section
12.13.
|
Trustee
to Effectuate Subordination
|
103
|
Section
12.14.
|
Trustee
Not Fiduciary for Holders of Senior Indebtedness of a
Guarantor
|
103
|
Section
12.15.
|
Reliance
by Holders of Senior Indebtedness of a Guarantor on Subordination
Provisions
|
103
|
Section
12.16.
|
Trust
Monies Not Subordinated
|
103
|
ARTICLE
13
|
MISCELLANEOUS
|
104
|
Section
13.01.
|
Trust
Indenture Act Controls
|
104
|
Section
13.02.
|
Notices
|
104
|
Section
13.03.
|
Communication
by the Holders with Other Holders
|
104
|
Section
13.04.
|
Certificate
and Opinion as to Conditions Precedent
|
105
|
Section
13.05.
|
Statements
Required in Certificate or Opinion
|
105
|
Section
13.06.
|
When
Securities Disregarded
|
105
|
Section
13.07.
|
Rules
by Trustee, Paying Agent and Registrar
|
105
|
Section
13.08.
|
Legal
Holidays
|
105
|
Section
13.09.
|
GOVERNING
LAW
|
106
|
Section
13.10.
|
No
Recourse Against Others
|
106
|
Section
13.11.
|
Successors
|
106
|
Section
13.12.
|
Multiple
Originals
|
106
|
Section
13.13.
|
Table
of Contents; Headings
|
106
|
Section
13.14.
|
Indenture
Controls
|
106
|
Section
13.15.
|
Severability
|
106
|
Appendix
A -
|
Provisions
Relating to Initial Securities, Additional Securities and Exchange
Securities
|
|
EXHIBIT
INDEX
|
|
|
Exhibit
A
|
-Initial
Security
|
|
Exhibit
B
|
-Exchange
Security
|
|
Exhibit
C
|
-Form
of Transferee Letter of Representation
|
|
Exhibit
D
|
-Form
of Supplemental Indenture
|
|
CROSS-REFERENCE
TABLE
TIA
Section
|
Indenture
Section
|
310(a)(1)
|
7.10
|
(a)(2)
|
7.10
|
(a)(3)
|
N.A.
|
(a)(4)
|
N.A.
|
(b)
|
7.08;
7.10
|
(c)
|
N.A.
|
311(a)
|
7.11
|
(b)
|
7.11
|
(c)
|
N.A.
|
312(a)
|
2.06
|
(b)
|
13.03
|
(c)
|
13.03
|
313(a)
|
7.06
|
(b)(1)
|
N.A.
|
(b)(2)
|
7.06
|
(c)
|
7.06
|
(d)
|
4.02;
4.09
|
314(a)
|
4.02;
4.09
|
(b)
|
N.A.
|
(c)(1)
|
13.04
|
(c)(2)
|
13.04
|
(c)(3)
|
N.A.
|
(d)
|
N.A.
|
(e)
|
13.05
|
(f)
|
4.10
|
315(a)
|
7.01
|
(b)
|
7.05
|
(c)
|
7.01
|
(d)
|
7.01
|
(e)
|
6.11
|
316(a)(last
sentence)
|
13.06
|
(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)
|
2.05
|
318(a)
|
13.01
|
N.A.
Means Not
Applicable.
Note:
This
Cross-Reference Table shall not, for any purposes, be deemed to be part of
this
Indenture.
INDENTURE
dated as of September 20, 2006 among BPC ACQUISITION CORP., a Delaware
corporation (“Merger Sub”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association, as trustee (the “Trustee”), and, upon execution
and delivery of a supplemental indenture, BPC HOLDING CORPORATION, a Delaware
corporation (the “Company”).
Each
party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of (a) $425,000,000 aggregate principal
amount of the Issuer’s 11% Senior Subordinated Notes due 2016 (the “Original
Securities”) issued on the date hereof, (b) any Additional Securities (as
defined herein) of the same or additional series that may be issued after the
date hereof in the form of Exhibit A (all such securities in clauses (a) and
(b)
being referred to collectively as the “Initial Securities”) and (c) if and when
issued as provided in the Registration Agreement (as defined in Appendix A
hereto (the “Appendix”)) or otherwise registered under the Securities Act and
issued, the Issuer’s 11% Senior Subordinated Notes due 2016 (the “Exchange
Securities” and, together with the Initial Securities, the “Securities”) issued
in the Registered Exchange Offer (as defined in the Appendix) in exchange for
any Initial Securities or otherwise registered under the Securities Act and
issued in the form of Exhibit B. Subject to the conditions and compliance with
the covenants set forth herein, the Issuer may issue an unlimited aggregate
principal amount of Additional Securities.
ARTICLE
1
DEFINITIONS
AND INCORPORATION BY REFERENCE
Section
1.01.
Definitions
.
“Acquired
EBITDA” means, with respect to any Person, at any calculation date, EBITDA of
such Person for the four full fiscal quarters for which internal financial
statements are available immediately preceding such calculation date
attributable to Investments, acquisitions and mergers with respect to operating
units of businesses by such Person or any of its Restricted Subsidiaries since
the Issue Date, net of the EBITDA of such Person for such period attributable
to
operating units of businesses disposed of or discontinued by such Person or
any
Restricted Subsidiary since the Issue Date. In no event shall Acquired EBITDA
be
less than zero for any period.
For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as determined
in accordance with GAAP), in each case with respect to an operating unit of
a
business, and any operational changes to any such operating unit that the Issuer
or any of its Restricted Subsidiaries has determined to make and/or made after
the Issue Date and during the four-quarter reference period or subsequent to
such reference period and on or prior to or simultaneously with the calculation
date (each, for purposes of this definition, a “pro forma event”) shall be
calculated on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, mergers, consolidations, discontinued operations
and
other operational changes (and the change in EBITDA resulting therefrom) had
occurred on the first day of the four-quarter reference period.
For
purposes of this definition, whenever pro forma effect is to be given to
any
pro
forma
event, the pro forma calculations shall be made in good faith by a responsible
financial or accounting officer of the Issuer and shall be set forth in an
Officers’ Certificate in reasonable detail (which Officers’ Certificate shall be
approved by the Board of Directors, so long as GSMP constitutes the Required
Holders). Any such pro forma calculation may include adjustments appropriate,
in
the reasonable good faith determination of the Issuer as set forth in such
Officers’ Certificate, to reflect operating expense reductions and (so long as
GSMP constitutes the Required Holders, other than in the case of operational
changes) other operating improvements or synergies reasonably expected to
result
within 24 months (so long as GSMP constitutes the Required Holders) from
the
applicable pro forma event.
“Acquired
Indebtedness” means, with respect to any specified Person:
(1)
Indebtedness
of any other Person existing at the time such other Person is merged,
consolidated or amalgamated with or into or became a Restricted Subsidiary
of
such specified Person, and
(2)
Indebtedness
secured by a Lien encumbering any asset acquired by such specified
Person.
“Acquisition”
means the acquisition by Affiliates of the Sponsors of substantially all of
the
outstanding shares of capital stock of the Issuer pursuant to the terms of
the
Merger Agreement.
“Acquisition
Documents” means the Merger Agreement and any other document entered into in
connection therewith, in each case as amended, supplemented or modified from
time to time prior to the Issue Date or thereafter (so long as any amendment,
supplement or modification after the Issue Date, together with all other
amendments, supplements and modifications after the Issue Date, taken as a
whole, is not more disadvantageous to the holders of the Securities in any
material respect than the Acquisition Documents as in effect on the Issue
Date).
“Additional
Securities” means 11% Senior Subordinated Notes due 2016 issued under the terms
of this Indenture subsequent to the Issue Date.
“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.
“Asset
Sale” means:
(1)
the
sale,
conveyance, transfer or other disposition (whether in a single transaction
or a
series of related transactions) of property or assets (including by way of
a
Sale/Leaseback Transaction) outside the ordinary course of business of the
Issuer or any
Restricted
Subsidiary of the
Issuer (each referred to in this definition as a “disposition”)
or
(2)
the
issuance or sale of Equity Interests (other than directors’ qualifying shares
and shares issued to foreign nationals or other third parties to the extent
required by applicable law) of any Restricted Subsidiary (other than to the
Issuer or another Restricted Subsidiary of the Issuer) (whether in a single
transaction or a series of related transactions),
in
each
case other than:
(a)
a
disposition of Cash Equivalents or Investment Grade Securities or obsolete
or
worn out property or equipment in the ordinary course of business;
(b)
the
disposition of all or substantially all of the assets of the Issuer in a manner
permitted pursuant to Section 5.01 or any disposition that constitutes a Change
of Control;
(c)
any
Restricted Payment or Permitted Investment that is permitted to be made, and
is
made, under Section 4.04;
(d)
any
disposition of assets or issuance or sale of Equity Interests of any Restricted
Subsidiary, which assets or Equity Interests so disposed or issued have an
aggregate Fair Market Value of less than $7.5 million;
(e)
any
disposition of property or assets, or the issuance of securities, by a
Restricted Subsidiary of the Issuer to the Issuer or by the Issuer or a
Restricted Subsidiary of the Issuer to a Restricted Subsidiary of the
Issuer;
(f)
any
exchange of assets (including a combination of assets and Cash Equivalents)
for
assets related to a Similar Business of comparable or greater market value
or
usefulness to the business of the Issuer and its Restricted Subsidiaries as
a
whole, as determined in good faith by the Issuer;
(g)
foreclosure
on assets of the Issuer or any of its Restricted Subsidiaries;
(h)
any
sale
of Equity Interests in, or Indebtedness or other securities of, an Unrestricted
Subsidiary;
(i)
the
lease, assignment or sublease of any real or personal property in the ordinary
course of business;
(j)
any
sale
of inventory or other assets in the ordinary course of business;
(k)
any
grant
in the ordinary course of business of any license of patents, trademarks,
know-how or any other intellectual property;
(l)
a
transfer of accounts receivable and related assets of the type specified in
the
definition of “Receivables Financing” (or a fractional undivided interest
therein) by a Receivables Subsidiary in a Qualified Receivables Financing;
and
(m)
the
sale
of any property in a Sale/Leaseback Transaction within six months of the
acquisition of such property.
“Bank
Indebtedness” means any and all amounts payable under or in respect of the
Credit Agreement and the other Senior Credit Documents as amended, restated,
supplemented, waived, replaced, restructured, repaid, refunded, refinanced
or
otherwise modified from time to time (including after termination of the Credit
Agreement), including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Issuer whether or not a claim for post-filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
“Board
of
Directors” means, as to any Person, the board of directors or managers, as
applicable, of such Person (or, if such Person is a partnership, the board
of
directors or other governing body of the general partner of such Person) or
any
duly authorized committee thereof.
“Business
Day” means a day other than a Saturday, Sunday or other day on which banking
institutions are authorized or required by law to close in New York
City.
“Capital
Stock” means:
(1)
in
the
case of a corporation, corporate stock or shares;
(2)
in
the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;
(3)
in
the
case of a partnership or limited liability company, partnership or membership
interests (whether general or limited); and
(4)
any
other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing
Person.
“Capitalized
Lease Obligation” means, at the time any determination thereof is to be made,
the amount of the liability in respect of a capital lease that would at such
time be required to be capitalized and reflected as a liability on a balance
sheet (excluding the footnotes thereto) in accordance with GAAP.
“Cash
Contribution Amount” means the aggregate amount of cash contributions made to
the capital of the Issuer described in the definition of “Contribution
Indebtedness.”
“Cash
Equivalents” means:
(1)
U.S.
Dollars, pounds sterling, euros, the national currency of any member state
in
the European Union or, in the case of any Foreign Subsidiary that is a
Restricted Subsidiary, such local currencies held by it from time to time in
the
ordinary course of business;
(2)
securities
issued or directly and fully guaranteed or insured by the U.S. government or
any
country that is a member of the European Union or any agency or instrumentality
thereof in each case maturing, not more than two years from the date of
acquisition;
(3)
certificates
of deposit, time deposits and eurodollar time deposits with maturities of one
year or less from the date of acquisition, bankers’ acceptances, in each case
with maturities not exceeding one year and overnight bank deposits, in each
case
with any commercial bank having capital and surplus in excess of $250 million
and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or
S&P (or reasonably equivalent ratings of another internationally recognized
ratings agency);
(4)
repurchase
obligations for underlying securities of the types described in clauses (2)
and
(3) above entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5)
commercial
paper issued by a corporation (other than an Affiliate of the Issuer) rated
at
least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably
equivalent ratings of another internationally recognized ratings agency) and
in
each case maturing within one year after the date of acquisition;
(6)
readily
marketable direct obligations issued by any state of the United States of
America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody’s or S&P (or reasonably
equivalent ratings of another internationally recognized ratings agency) in
each
case with maturities not exceeding two years from the date of
acquisition;
(7)
Indebtedness
issued by Persons (other than the Sponsors or any of their Affiliates) with
a
rating of “A” or higher from S&P or “A-2” or higher from Moody’s in each
case with maturities not exceeding two years from the date of acquisition;
and
(8)
investment
funds investing at least 95% of their assets in securities of the types
described in clauses (1) through (7) above.
“Cash
Interest” shall mean all other accrued and unpaid interest on the Securities
being redeemed or repurchased that is not included in the Current Accretion
Amount to the date of redemption or repurchase.
“Change
of Control” means the occurrence of any of the following events:
(i)
the
sale,
lease or transfer, in one or a series of related transactions, of all or
substantially all the assets of the Issuer and its Subsidiaries, taken as a
whole, to a Person other than any of the Permitted Holders; or
(ii)
the
Issuer becomes aware (by way of a report or any other filing pursuant to Section
13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the
acquisition by any Person or group (within the meaning of Section 13(d)(3)
or
Section 14(d)(2) of the Exchange Act, or any successor provision), including
any
group acting for the purpose of acquiring, holding or disposing of securities
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than
any
of the Permitted Holders, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination
or
purchase of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, or any successor provision), of more than 50% of the total voting
power of the Voting Stock of the Issuer or any direct or indirect parent of
the
Issuer.
“Closing”
shall mean the date of the closing of the Acquisition and the other
Transactions.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Company”
means the party named as such in the Preamble to this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes
of
any provision contained herein and required by the TIA, each other obligor
on
the Securities.
“consolidated”
means, with respect to any Person, such Person consolidated with its Restricted
Subsidiaries, and shall not include any Unrestricted Subsidiary, but the
interest of such Person in an Unrestricted Subsidiary shall be accounted for
as
an Investment.
“Consolidated
Interest Expense” means, with respect to any Person for any period, the sum,
without duplication, of:
(1)
consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
to the extent such expense was deducted in computing Consolidated Net Income
(including amortization of original issue discount, the interest component
of
Capitalized Lease Obligations, and net payments and receipts (if any) pursuant
to interest rate Hedging Obligations and excluding amortization of deferred
financing fees and expensing of any bridge or other financing fees);
plus
(2)
consolidated
capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued; plus
(3)
commissions,
discounts, yield and other fees and charges Incurred in connection with any
Receivables Financing which are payable to Persons other than the Issuer and
its
Restricted Subsidiaries; minus
(4)
interest
income for such period.
“Consolidated
Net Income” means, with respect to any Person for any period, the aggregate of
the Net Income of such Person and its Restricted Subsidiaries for such period,
on a consolidated basis; provided, however, that:
(1)
any
net
after-tax extraordinary, nonrecurring or unusual gains or losses or income,
expenses or charges (less all fees and expenses relating thereto), including,
without limitation, any severance expenses, any expenses related to any
reconstruction, recommissioning or reconfiguration of fixed assets for alternate
uses, any fees, expenses or charges relating to new product lines, plant
shutdown costs, acquisition integration costs and expenses or charges related
to
any Equity Offering, Permitted Investment, acquisition or Indebtedness permitted
to be Incurred by this Indenture (in each case, whether or not successful),
including any such fees, expenses, charges or change in control payments made
under the Acquisition Documents or otherwise related to the Transactions, in
each case, shall be excluded;
(2)
any
increase in amortization or depreciation or any one-time non-cash charges
increases or reductions in Net Income, in each case resulting from purchase
accounting in connection with the Transactions or any acquisition that is
consummated after the Issue Date shall be excluded;
(3)
the
Net
Income for such period shall not include the cumulative effect of a change
in
accounting principles during such period;
(4)
any
net
after-tax income or loss from discontinued operations and any net after-tax
gains or losses on disposal of discontinued operations shall be
excluded;
(5)
any
net
after-tax gains or losses (less all fees and expenses or charges relating
thereto) attributable to business dispositions or asset dispositions other
than
in the ordinary course of business (as determined in good faith by the Board
of
Directors of the Issuer) shall be excluded;
(6)
any
net
after-tax gains or losses (less all fees and expenses or charges relating
thereto) attributable to the early extinguishment of indebtedness shall be
excluded;
(7)
the
Net
Income for such period of any Person that is not a Subsidiary of such Person,
or
is an Unrestricted Subsidiary, or that is accounted for by the equity method
of
accounting, shall be included only to the extent of the amount of dividends
or
distributions or other payments paid in cash (or to the extent converted into
cash) to the referent Person or a Restricted Subsidiary thereof in respect
of
such period;
(8)
solely
for the purpose of determining the amount available for Restricted Payments
under clause (1) of the definition of Cumulative Credit, the Net Income for
such
period of any Restricted Subsidiary (other than any Guarantor) shall be excluded
to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of its Net Income is not at the
date
of determination permitted without any prior governmental approval (which has
not been obtained) or, directly or indirectly, by the operation of the terms
of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, unless such restrictions with respect to the payment of dividends
or similar distributions have been legally waived; provided that the
Consolidated
Net Income of such Person shall be increased by the amount of dividends or
other
distributions or other payments actually paid in cash (or converted into cash)
by any such Restricted Subsidiary to such Person, to the extent not already
included therein;
(9)
an
amount
equal to the amount of Tax Distributions actually made to any parent of such
Person in respect of such period in accordance with Section 4.04(b)(xii) shall
be included as though such amounts had been paid as income taxes directly by
such Person for such period;
(10)
any
non-cash impairment charges resulting from the application of Statement of
Financial Accounting Standards (“SFAS”) Nos. 142 and 144 and the amortization of
intangibles arising pursuant to SFAS No. 141 shall be excluded;
(11)
any
non-cash expense realized or resulting from stock option plans, employee benefit
plans or post-employment benefit plans, grants of stock appreciation or similar
rights, stock options or other rights to officers, directors and employees
of
such Person or any of its Restricted Subsidiaries shall be
excluded;
(12)
any
(a)
severance or relocation costs or expenses, (b) one-time non-cash compensation
charges, (c) the costs and expenses after the Issue Date related to employment
of terminated employees, (d) costs or expenses realized in connection with,
resulting from or in anticipation of the Transactions or (e) costs or expenses
realized in connection with or resulting from stock appreciation or similar
rights, stock options or other rights existing on the Issue Date of officers,
directors and employees, in each case of such Person or any of its Restricted
Subsidiaries, shall be excluded;
(13)
accruals
and reserves that are established within 12 months after the Issue Date and
that
are so required to be established in accordance with GAAP shall be
excluded;
(14)
solely
for purposes of calculating EBITDA, (a) the Net Income of any Person and its
Restricted Subsidiaries shall be calculated without deducting the income
attributable to, or adding the losses attributable to, the minority equity
interests of third parties in any non-wholly-owned Restricted Subsidiary except
to the extent of dividends declared or paid in respect of such period or any
prior period on the shares of Capital Stock of such Restricted Subsidiary held
by such third parties and (b) any ordinary course dividend, distribution or
other payment paid in cash and received from any Person in excess of amounts
included in clause (7) above shall be included;
(15)
(a)(i)
the non-cash portion of “straight-line” rent expense shall be excluded and (ii)
the cash portion of “straight-line” rent expense which exceeds the amount
expensed in respect of such rent expense shall be included and (b) non-cash
gains, losses, income and expenses resulting from fair value accounting required
by Statement of Financial Accounting Standards No. 133 shall be
excluded;
(16)
unrealized
gains and losses relating to hedging transactions and mark-to-market of
Indebtedness denominated in foreign currencies resulting from the applications
of Financial Accounting Standards 52 shall be excluded; and
(17)
solely
for the purpose of calculating Restricted Payments, the difference, if positive,
of the Consolidated Taxes of the Issuer calculated in accordance with GAAP
and
the actual Consolidated Taxes paid in cash by the Issuer during any Reference
Period shall be included.
Notwithstanding
the foregoing, for the purpose of Section 4.04 only, there shall be excluded
from Consolidated Net Income any dividends, repayments of loans or advances
or
other transfers of assets from Unrestricted Subsidiaries of the Issuer or a
Restricted Subsidiary of the Issuer to the extent such dividends, repayments
or
transfers increase the amount of Restricted Payments permitted under clauses
(E)
and (F) of the definition of “Cumulative Credit.”
“Consolidated
Non-cash Charges” means, with respect to any Person for any period, the
aggregate depreciation, amortization and other non-cash expenses of such Person
and its Restricted Subsidiaries reducing Consolidated Net Income of such Person
for such period on a consolidated basis and otherwise determined in accordance
with GAAP, but excluding any such charge which consists of or requires an
accrual of, or cash reserve for, anticipated cash charges for any future
period.
“Consolidated
Taxes” means provision for taxes based on income, profits or capital, including,
without limitation, state, franchise and similar taxes and any Tax Distributions
taken into account in calculating Consolidated Net Income.
“Contingent
Obligations” means, with respect to any Person, any obligation of such Person
guaranteeing any leases, dividends or other obligations that do not constitute
Indebtedness (“primary obligations”) of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent:
(1)
to
purchase any such primary obligation or any property constituting direct or
indirect security therefor,
(2)
to
advance or supply funds:
(a)
for
the
purchase or payment of any such primary obligation; or
(b)
to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; or
(3)
to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation against loss in respect
thereof.
“Contribution
Indebtedness” means Indebtedness of the Issuer or any Guarantor in an aggregate
principal amount not greater than twice the aggregate amount of cash
contributions (other than Excluded Contributions) made to the capital of the
Issuer or any Guarantor after the Issue Date; provided that:
(1)
such
cash
contributions have not been used to make a Restricted Payment,
(2)
if
the
aggregate principal amount of such Contribution Indebtedness is greater than
the
aggregate amount of such cash contributions to the capital of the Issuer or
any
Guarantor, as the case may be, the amount in excess shall be Indebtedness (other
than Secured Indebtedness) with a Stated Maturity later than the Stated Maturity
of the Securities, and
(3)
such
Contribution Indebtedness (a) is Incurred within 180 days after the making
of
such cash contributions and (b) is so designated as Contribution Indebtedness
pursuant to an Officers’ Certificate on the Incurrence date
thereof.
“Credit
Agreement” means (i) the credit agreement entered into in connection with, and
on or prior to, the consummation of the Acquisition, as amended, restated,
supplemented, waived, replaced (whether or not upon termination, and whether
with the original lenders or otherwise), restructured, repaid, refunded,
refinanced or otherwise modified from time to time, including any agreement
or
indenture extending the maturity thereof, refinancing, replacing or otherwise
restructuring all or any portion of the Indebtedness under such agreement or
agreements or indenture or indentures or any successor or replacement agreement
or agreements or indenture or indentures or increasing the amount loaned or
issued thereunder or altering the maturity thereof, among the Issuer, the
guarantors named therein, the financial institutions named therein, and Credit
Suisse, as Administrative Agent, and (ii) whether or not the credit agreement
referred to in clause (i) remains outstanding, if designated by the Issuer
to be
included in the definition of “Credit Agreement,” one or more (A) debt
facilities or commercial paper facilities, providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables
to
lenders or to special purpose entities formed to borrow from lenders against
such receivables) or letters of credit, (B) debt securities, indentures or
other
forms of debt financing (including convertible or exchangeable debt instruments
or bank guarantees or bankers’ acceptances), or (C) instruments or agreements
evidencing any other Indebtedness, in each case, with the same or different
borrowers or issuers and, in each case, as amended, supplemented, modified,
extended, restructured, renewed, refinanced, restated, replaced or refunded
in
whole or in part from time to time.
“Cumulative
Credit” means the sum of (without duplication):
(A)
50%
of
the Consolidated Net Income of the Issuer for the period (taken as one
accounting period, the “Reference Period”) from July 1, 2006 to the end of the
Issuer’s most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, in the
case
such Consolidated Net Income for such period is a deficit, minus 100% of such
deficit), plus
(B)
100%
of
the aggregate net proceeds, including cash and the Fair Market Value (as
determined in good faith by the Issuer) of property other than cash, received
by
the Issuer after the Issue Date from the issue or sale of Equity Interests
of
the Issuer (excluding Refunding Capital Stock, Designated Preferred Stock,
Excluded Contributions, Disqualified Stock and the Cash Contribution Amount),
including Equity Interests issued upon conversion of Indebtedness or
Disqualified Stock or upon exercise of warrants or options (other
than
an
issuance or sale to a Restricted Subsidiary of the Issuer or an employee
stock
ownership plan or trust established by the Issuer or any of its
Subsidiaries),
plus
(C)
100%
of
the aggregate amount of contributions to the capital of the Issuer received
in
cash and the Fair Market Value (as determined in good faith by the Issuer)
of
property other than cash after the Issue Date (other than Excluded
Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified
Stock and the Cash Contribution Amount), plus
(D)
the
principal amount of any Indebtedness, or the liquidation preference or maximum
fixed repurchase price, as the case may be, of any Disqualified Stock of the
Issuer or any Restricted Subsidiary thereof issued after the Issue Date (other
than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary)
which
has been converted into or exchanged for Equity Interests in the Issuer (other
than Disqualified Stock) or any direct or indirect parent of the Issuer
(provided in the case of any parent, such Indebtedness or Disqualified Stock
is
retired or extinguished), plus
(E)
100%
of
the aggregate amount received by the Issuer or any Restricted Subsidiary in
cash
and the Fair Market Value (as determined in good faith by the Issuer) of
property other than cash received by the Issuer or any Restricted Subsidiary
from:
(I)
the
sale
or other disposition (other than to the Issuer or a Restricted Subsidiary of
the
Issuer) of Restricted Investments made by the Issuer and its Restricted
Subsidiaries and from repurchases and redemptions of such Restricted Investments
from the Issuer and its Restricted Subsidiaries by any Person (other than the
Issuer or any of its Restricted Subsidiaries) and from repayments of loans
or
advances which constituted Restricted Investments (other than in each case
to
the extent that the Restricted Investment was made pursuant to clause (vii)
or
(x) of Section 4.04(b)),
(II)
the
sale
(other than to the Issuer or a Restricted Subsidiary of the Issuer) of the
Capital Stock of an Unrestricted Subsidiary, or
(III)
a
distribution or dividend from an Unrestricted Subsidiary, plus
(F)
in
the
event any Unrestricted Subsidiary of the Issuer has been redesignated as a
Restricted Subsidiary or has been merged, consolidated or amalgamated with
or
into, or transfers or conveys its assets to, or is liquidated into, the Issuer
or a Restricted Subsidiary of the Issuer, the Fair Market Value (as determined
in good faith by the Issuer or, if such Fair Market Value may exceed
$25.0
million, in writing by an Independent Financial Advisor) of the Investment
of
the Issuer in such Unrestricted Subsidiary at the time of such redesignation,
combination or transfer (or of the assets transferred or conveyed, as
applicable), after taking into account any Indebtedness associated with the
Unrestricted Subsidiary so designated or combined or any Indebtedness associated
with the assets so transferred or conveyed (other than in each case to the
extent that the designation of such Subsidiary as an Unrestricted Subsidiary
was
made pursuant to clause (vii) or (x) of Section 4.04(b) or constituted a
Permitted Investment).
“Current
Accretion Amount” shall mean the sum of (i) the outstanding principal amount of
the Securities being redeemed or repurchased, and (ii) to the extent accrued
interest is permitted to be capitalized on the next interest payment date and
accrued interest on the Securities as of the interest payment date immediately
prior to the redemption or repurchase date was capitalized on such interest
payment date, the portion of the accrued and unpaid interest on the Securities
to the redemption or repurchase date that may be permitted to be capitalized
on
the next interest payment date.
“Default”
means any event which is, or after notice or passage of time or both would
be,
an Event of Default.
“Designated
Non-cash Consideration” means the Fair Market Value of non-cash consideration
received by the Issuer or one of its Restricted Subsidiaries in connection
with
an Asset Sale that is so designated as Designated Non-cash Consideration
pursuant to an Officers’ Certificate, setting forth the basis of such valuation,
less the amount of Cash Equivalents received in connection with a subsequent
sale of such Designated Non-cash Consideration.
“Designated
Preferred Stock” means Preferred Stock of the Issuer or any direct or indirect
parent of the Issuer, as applicable (other than Disqualified Stock), that is
issued for cash (other than to the Issuer or any of its Subsidiaries or an
employee stock ownership plan or trust established by the Issuer or any of
its
Subsidiaries) and is so designated as Designated Preferred Stock, pursuant
to an
Officers’ Certificate, on the issuance date thereof.
“Designated
Senior Indebtedness” means, with respect to the Issuer or a Guarantor:
(1)
the
Bank
Indebtedness; and
(2)
any
other
Senior Indebtedness of the Issuer or such Guarantor which, at the date of
determination, has an aggregate principal amount outstanding of, or under which,
at the date of determination, the holders thereof are committed to lend up
to,
at least $25.0 million and is specifically designated by the Issuer or such
Guarantor in the instrument evidencing or governing such Senior Indebtedness
as
“Designated Senior Indebtedness” for purposes of this Indenture.
“Disqualified
Stock” means, with respect to any Person, any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is redeemable or exchangeable), or upon the
happening of any event:
(1)
matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than as a result of a change of control or asset sale; provided that
the
relevant asset sale or change of control provisions, taken as a whole, are
no
more favorable in any material respect to holders of such Capital Stock than
the
asset sale and change of control provisions applicable to the Securities and
any
purchase requirement triggered thereby may not become operative until compliance
with the asset sale and change of control provisions applicable to the
Securities (including the purchase of any Securities tendered pursuant
thereto)),
(2)
is
convertible or exchangeable for Indebtedness or Disqualified Stock of such
Person, or
(3)
is
redeemable at the option of the holder thereof, in whole or in
part,
in
each
case prior to 91 days after the maturity date of the Securities; provided,
however, that only the portion of Capital Stock which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable
at
the option of the holder thereof prior to such date shall be deemed to be
Disqualified Stock; provided, further, however, that if such Capital Stock
is
issued to any employee or to any plan for the benefit of employees of the Issuer
or its Subsidiaries or by any such plan to such employees, such Capital Stock
shall not constitute Disqualified Stock solely because it may be required to
be
repurchased by the Issuer in order to satisfy applicable statutory or regulatory
obligations or as a result of such employee’s termination, death or disability;
provided, further, that any class of Capital Stock of such Person that by its
terms authorizes such Person to satisfy its obligations thereunder by delivery
of Capital Stock that is not Disqualified Stock shall not be deemed to be
Disqualified Stock.
“Domestic
Subsidiary” means a Restricted Subsidiary that is not a Foreign
Subsidiary.
“EBITDA”
means, with respect to any Person for any period, the Consolidated Net Income
of
such Person for such period plus, without duplication, to the extent the same
was deducted in calculating Consolidated Net Income:
(1)
Consolidated
Taxes; plus
(2)
Consolidated
Interest Expense; plus
(3)
Consolidated
Non-cash Charges; plus
(4)
business
optimization expenses and other restructuring charges or expenses (which, for
the avoidance of doubt, shall include, without limitation, the effect of
inventory optimization programs, plant closures, retention, systems
establishment costs and excess pension charges); provided that with respect
to
each business optimization expense or other restructuring charge, the Issuer
shall have delivered to the Trustee an Officers’ Certificate specifying and
quantifying such expense or charge and stating that such expense or charge
is a
business optimization expense or other restructuring charge, as the case may
be;
plus
(5)
the
amount of management, monitoring, consulting and advisory fees and related
expenses paid to the Sponsors (or any accruals relating to such fees and related
expenses) during such period pursuant to the terms of the agreements between
the
Sponsors and the Issuer and its Subsidiaries as described with particularity
in
the Offering Memorandum as in effect on the Issue Date;
less,
without duplication,
(6)
non-cash
items increasing Consolidated Net Income for such period (excluding the
recognition of deferred revenue or any items which represent the reversal of
any
accrual of, or cash reserve for, anticipated cash charges in any prior period
and any items for which cash was received in a prior period).
“Equity
Interests” means Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible
into,
or exchangeable for, Capital Stock).
“Equity
Offering” means any public or private sale after the Issue Date of common stock
or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer,
as applicable (other than Disqualified Stock), other than:
(1)
public
offerings with respect to the Issuer’s or such direct or indirect parent’s
common stock registered on Form S-8; and
(2)
any
such
public or private sale that constitutes an Excluded Contribution.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.
“Exchange
Offer Registration Statement” means the registration statement filed with the
SEC in connection with the Registered Exchange Offer.
“Excluded
Contributions” means the Cash Equivalents or other assets (valued at their Fair
Market Value as determined in good faith by senior management or the Board
of
Directors of the Issuer) received by the Issuer after the Issue Date
from:
(1)
contributions
to its common equity capital, and
(2)
the
sale
(other than to a Subsidiary of the Issuer or to any Subsidiary management equity
plan or stock option plan or any other management or employee benefit plan
or
agreement) of Capital Stock (other than Disqualified Stock and Designated
Preferred Stock) of the Issuer,
in
each
case designated as Excluded Contributions pursuant to an Officers’ Certificate
on or promptly after the date such capital contributions are made or the date
such Capital Stock is sold, as the case may be.
“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.
“First-Priority
Lien Obligations” means (i) all Secured Bank Indebtedness, (ii) all other
Obligations (not constituting Indebtedness) of the Issuer and its Subsidiaries
under the agreements governing Secured Bank Indebtedness and (iii) all other
Obligations of the Issuer or any of its Subsidiaries in respect of Hedging
Obligations or Obligations in respect of cash management services in connection
with Indebtedness described in clause (i) or Obligations described in clause
(ii).
“Fixed
Charge Coverage Ratio” means, with respect to any Person for any period, the
ratio of EBITDA of such Person for such period to the Fixed Charges of such
Person for such period. In the event that the Issuer or any of its Restricted
Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other
than
in the case of revolving credit borrowings or revolving advances under any
Qualified Receivables Financing, in which case interest expense shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period) or issues, repurchases or redeems Disqualified Stock or
Preferred Stock subsequent to the commencement of the period for which the
Fixed
Charge Coverage Ratio is being calculated but prior to the event for which
the
calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such Incurrence, repayment, repurchase or redemption of Indebtedness, or
such
issuance, repurchase or redemption of Disqualified Stock or Preferred Stock,
as
if the same had occurred at the beginning of the applicable four-quarter
period.
For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as determined
in accordance with GAAP), in each case with respect to an operating unit of
a
business, and any operational changes that the Issuer or any of its Restricted
Subsidiaries has determined to make and/or made after the Issue Date and during
the four-quarter reference period or subsequent to such reference period and
on
or prior to or simultaneously with the Calculation Date (each, for purposes
of
this definition, a “pro forma event”) shall be calculated on a pro forma basis
assuming that all such Investments, acquisitions, dispositions, mergers,
consolidations (including the Transactions) discontinued operations and
operational changes (and the change of any associated fixed charge obligations
and the change in EBITDA resulting therefrom) had occurred on the first day
of
the four-quarter reference period. If since the beginning of such period any
Person that subsequently became a Restricted Subsidiary or was merged with
or
into the Issuer or any Restricted Subsidiary since the beginning of such period
shall have made any Investment, acquisition, disposition, merger, consolidation,
discontinued operation or operational change, in each case with respect to
an
operating unit of a business, that would have required adjustment pursuant
to
this definition, then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma effect thereto for such period as if such Investment, acquisition,
disposition, discontinued operation, merger, consolidation or operational change
had occurred at the beginning of the applicable four-quarter
period.
For
purposes of this definition, whenever pro forma effect is to be given to any
pro
forma event, the pro forma calculations shall be made in good faith by a
responsible financial
or
accounting officer of the Issuer and shall be set forth in an Officers’
Certificate in reasonable detail (which Officers’ Certificate shall be approved
by the Board of Directors, so long as GSMP constitutes the Required Holders).
Any such pro forma calculation may include adjustments appropriate, in the
reasonable good faith determination of the Issuer as set forth in such Officers’
Certificate, to reflect (1) operating expense reductions and (so long as GSMP
constitutes the Required Holders, other than in the case of operational changes)
other operating improvements or synergies reasonably expected to result within
24 months (so long as GSMP constitutes the Required Holders) from the applicable
pro forma event (including, to the extent applicable, from the Transactions),
and (2) all adjustments of the nature used in connection with the calculation
of
“Adjusted EBITDA” as set forth in footnote 4 to the “Summary Historical and
Unaudited Pro Forma Financial Data” under “Offering Memorandum Summary” in the
Offering Memorandum to the extent such adjustments, without duplication,
continue to be applicable to such four-quarter period.
If
any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate
in
effect on the Calculation Date had been the applicable rate for the entire
period (taking into account any Hedging Obligations applicable to such
Indebtedness if such Hedging Obligation has a remaining term in excess of 12
months). Interest on a Capitalized Lease Obligation shall be deemed to accrue
at
an interest rate reasonably determined by a responsible financial or accounting
officer of the Issuer to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP. For purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period. Interest on
Indebtedness that 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 rate, shall be deemed to have been based upon the rate actually chosen,
or, if none, then based upon such optional rate chosen as the Issuer may
designate.
“Fixed
Charges” means, with respect to any Person for any period, the sum, without
duplication, of:
(1)
Consolidated
Interest Expense of such Person for such period, and
(2)
all
cash
dividend payments (excluding items eliminated in consolidation) on any series
of
Preferred Stock or Disqualified Stock of such Person and its Restricted
Subsidiaries.
“Foreign
Subsidiary” means a Restricted Subsidiary not organized or existing under the
laws of the United States of America or any state or territory or the District
of Columbia thereof and any direct or indirect subsidiary of such Restricted
Subsidiary.
“GAAP”
means generally accepted accounting principles in the United States 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 have been approved by a significant segment
of the accounting profession, which are in effect on the Issue
Date.
For the purposes of this Indenture, the term “consolidated” with respect to any
Person shall mean such Person consolidated with its Restricted Subsidiaries,
and
shall not include any Unrestricted Subsidiary, but the interest of such Person
in an Unrestricted Subsidiary will be accounted for as an
Investment.
“GSMP”
means GS Mezzanine Partners 2006 Onshore Fund, L.P. and its affiliated mezzanine
investment funds and their subsidiaries.
“Guarantee”
means any guarantee of the obligations of the Issuer under this Indenture and
the Securities by any Person in accordance with the provisions of this
Indenture.
“guarantee”
means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any
manner (including, without limitation, letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Indebtedness or other
obligations.
“Guarantor”
means any Person that Incurs a Guarantee; provided that upon the release or
discharge of such Person from its Guarantee in accordance with this Indenture,
such Person ceases to be a Guarantor.
“Hedging
Obligations” means, with respect to any Person, the obligations of such Person
under:
(1)
currency
exchange, interest rate or commodity swap agreements, currency exchange,
interest rate or commodity cap agreements and currency exchange, interest rate
or commodity collar agreements; and
(2)
other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange, interest rates or commodity prices.
“Holder”
or “Noteholder” means the Person in whose name a Security is registered on the
Registrar’s books.
“Incur”
means issue, assume, guarantee, incur or otherwise become liable for; provided,
however, that any Indebtedness or Capital Stock of a Person existing at the
time
such Person becomes a Subsidiary (whether by merger, amalgamation,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by
such
Person at the time it becomes a Subsidiary.
“Indebtedness”
means, with respect to any Person:
(1)
the
principal and premium (if any) of any indebtedness of such Person, whether
or
not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes,
debentures or similar instruments or letters of credit or bankers’ acceptances
(or, without duplication, reimbursement agreements in respect thereof), (c)
representing the deferred and unpaid purchase price of any property, except
any
such balance that constitutes a trade payable or similar obligation to a trade
creditor due within six months from the date on which it is Incurred, in each
case Incurred in the ordinary course of business, which purchase price is due
more than six months after the date of placing the
property
in service or taking delivery and title thereto, (d) in respect of Capitalized
Lease Obligations, or (e) representing any Hedging Obligations, if and to the
extent that any of the foregoing indebtedness (other than letters of credit
and
Hedging Obligations) would appear as a liability on a balance sheet (excluding
the footnotes thereto) of such Person prepared in accordance with
GAAP;
(2)
to
the
extent not otherwise included, any obligation of such Person to be liable for,
or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another
Person (other than by endorsement of negotiable instruments for collection
in
the ordinary course of business);
(3)
to
the
extent not otherwise included, Indebtedness of another Person secured by a
Lien
on any asset owned by such Person (whether or not such Indebtedness is assumed
by such Person); provided, however, that the amount of such Indebtedness will
be
the lesser of: (a) the Fair Market Value of such asset at such date of
determination, and (b) the amount of such Indebtedness of such other Person;
and
(4)
to
the
extent not otherwise included, with respect to the Issuer and its Restricted
Subsidiaries, the amount then outstanding (i.e., advanced, and received by,
and
available for use by, the Issuer or any of its Restricted Subsidiaries) under
any Receivables Financing (as set forth in the books and records of the Issuer
or any Restricted Subsidiary and confirmed by the agent, trustee or other
representative of the institution or group providing such Receivables
Financing);
provided,
however
,
that
notwithstanding the foregoing, Indebtedness shall be deemed not to include
(1)
Contingent Obligations incurred in the ordinary course of business and not
in
respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price
holdbacks in respect of a portion of the purchase price of an asset to satisfy
warranty or other unperformed obligations of the respective seller; (4)
Obligations under or in respect of Qualified Receivables Financing or (5)
obligations under the Acquisition Documents.
Notwithstanding
anything in this Indenture to the contrary, Indebtedness shall not include,
and
shall be calculated without giving effect to, the effects of Statement of
Financial Accounting Standards No. 133 and related interpretations to the extent
such effects would otherwise increase or decrease an amount of Indebtedness
for
any purpose under this Indenture as a result of accounting for any embedded
derivatives created by the terms of such Indebtedness; and any such amounts
that
would have constituted Indebtedness under this Indenture but for the application
of this sentence shall not be deemed an Incurrence of Indebtedness under this
Indenture.
“Indenture”
means this Indenture as amended or supplemented from time to time.
“Independent
Financial Advisor” means an accounting, appraisal or investment banking firm or
consultant, in each case of nationally recognized standing, that is, in the
good
faith determination of the Issuer, qualified to perform the task for which
it
has been engaged.
“Investment
Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any
other
Rating Agency.
“Investment
Grade Securities” means:
(1)
securities
issued or directly and fully guaranteed or insured by the U.S. government or
any
agency or instrumentality thereof (other than Cash Equivalents),
(2)
securities
that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s or
BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating
Agency, but excluding any debt securities or loans or advances between and
among
the Issuer and its Subsidiaries;
(3)
investments
in any fund that invests exclusively in investments of the type described in
clauses (1) and (2) which fund may also hold immaterial amounts of cash pending
investment and/or distribution, and
(4)
corresponding
instruments in countries other than the United States customarily utilized
for
high quality investments and in each case with maturities not exceeding two
years from the date of acquisition.
“Investments”
means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the form of loans (including guarantees),
advances or capital contributions (excluding accounts receivable, trade credit
and advances to customers and commission, travel and similar advances to
officers, employees and consultants made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities issued by any other Person and investments that
are required by GAAP to be classified on the balance sheet of the Issuer in
the
same manner as the other investments included in this definition to the extent
such transactions involve the transfer of cash or other property. For purposes
of the definition of “Unrestricted Subsidiary” and Section 4.04:
(1)
“Investments”
shall include the portion (proportionate to the Issuer’s equity interest in such
Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the
Issuer at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such Subsidiary
as a
Restricted Subsidiary, the Issuer shall be deemed to continue to have a
permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if
positive) equal to:
(a)
the
Issuer’s “Investment” in such Subsidiary at the time of such redesignation
less
(b)
the
portion (proportionate to the Issuer’s equity interest in such Subsidiary) of
the Fair Market Value of the net assets of such Subsidiary at the time of such
redesignation; and
(2)
any
property transferred to or from an Unrestricted Subsidiary shall be valued
at
its Fair Market Value at the time of such transfer, in each case as determined
in good faith by the Board of Directors of the Issuer.
“Issue
Date” means the date on which the Original Securities are issued.
“Issuer”
means (i) Merger Sub, prior to the merger of Merger Sub with and into the
Company pursuant to the Merger Agreement (the “merger”), and (ii) the Company,
but not any of its Subsidiaries, following the merger.
“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest
in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction); provided that
in
no event shall an operating lease be deemed to constitute a Lien.
“Management
Group” means the group consisting of the directors, executive officers and other
management personnel of the Issuer or any direct or indirect parent of the
Issuer, as the case may be, on the Issue Date together with (1) any new
directors whose election by such boards of directors or whose nomination for
election by the shareholders of the Issuer or any direct or indirect parent
of
the Issuer, as applicable, was approved by a vote of a majority of the directors
of the Issuer or any direct or indirect parent of the Issuer, as applicable,
then still in office who were either directors on the Issue Date or whose
election or nomination was previously so approved and (2) executive officers
and
other management personnel of the Issuer or any direct or indirect parent of
the
Issuer, as applicable, hired at a time when the directors on the Issue Date
together with the directors so approved constituted a majority of the directors
of the Issuer or any direct or indirect parent of the Issuer, as
applicable.
“Merger
Agreement” means the agreement and plan of merger, dated as of June 28, 2006, by
and among BPC Holding Corporation, a Delaware corporation, Merger Sub and BPC
Holding Acquisition Corp., a Delaware corporation, as amended, supplemented
or
modified from time to time prior to the Issue Date or thereafter (so long as
any
amendment, supplement or modification after the Issue Date, together with all
other amendments, supplements and modifications after the Issue Date, taken
as a
whole, is not more disadvantageous to the Holders of the Securities in any
material respect than the Merger Agreement as in effect on the Issue Date).
“Moody’s”
means Moody’s Investors Service, Inc. or any successor to the rating agency
business thereof.
“Net
Income” means, with respect to any Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of
Preferred Stock dividends.
“Net
Proceeds” means the aggregate cash proceeds received by the Issuer or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received in respect of or upon the sale or other
disposition of any Designated Non-cash Consideration received in any Asset
Sale
and any cash payments received by way of deferred payment of principal pursuant
to a note or installment receivable or otherwise, but only as and
when
received, but excluding the assumption by the acquiring Person of Indebtedness
relating to the disposed assets or other consideration received in any other
non-cash form), net of the direct costs relating to such Asset Sale and the
sale
or disposition of such Designated Non-cash Consideration (including, without
limitation, legal, accounting and investment banking fees, and brokerage and
sales commissions), and any relocation expenses Incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements related
thereto), amounts required to be applied to the repayment of principal, premium
(if any) and interest on Indebtedness required (other than pursuant to Section
4.06(b)(i)) to be paid as a result of such transaction, and any deduction of
appropriate amounts to be provided by the Issuer as a reserve in accordance
with
GAAP against any liabilities associated with the asset disposed of in such
transaction and retained by the Issuer after such sale or other disposition
thereof, including, without limitation, pension and other post-employment
benefit liabilities and liabilities related to environmental matters or against
any indemnification obligations associated with such transaction.
“Note
Purchase Agreement” means the note purchase agreement, dated as of the date
hereof, by and among the Issuer, GSMP and Goldman, Sachs & Co., providing
for the issuance of the Original Securities.
“Obligations”
means any principal, interest, penalties, fees, indemnifications, reimbursements
(including, without limitation, reimbursement obligations with respect to
letters of credit and bankers’ acceptances), damages and other liabilities
payable under the documentation governing any Indebtedness; provided that
Obligations with respect to the Securities shall not include fees or
indemnifications in favor of the Trustee and other third parties other than
the
Holders of the Securities.
“Offering
Memorandum” means the final offering memorandum relating to the offering of the
Notes dated September 20, 2006.
“Officer”
means the Chairman of the Board, Chief Executive Officer, Chief Financial
Officer, President, any Executive Vice President, Senior Vice President or
Vice
President, the Treasurer or the Secretary of the Issuer.
“Officers’
Certificate” means a certificate signed on behalf of the Issuer by two Officers
of the Issuer, one of whom must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer
of the Issuer that meets the requirements set forth in this
Indenture.
“Opinion
of Counsel” means a written opinion from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the Issuer or the
Trustee.
“Pari
Passu Indebtedness” means:
(1)
with
respect to the Issuer, the Securities and any Indebtedness which ranks pari
passu in right of payment to the Securities; and
(2)
with
respect to any Guarantor, its Guarantee and any Indebtedness which ranks pari
passu in right of payment to such Guarantor’s Guarantee.
“Permitted
Holders” means, at any time, each of (i) the Sponsors and (ii) the Management
Group. Any person or group whose acquisition of beneficial ownership constitutes
a Change of Control in respect of which a Change of Control Offer is made in
accordance with the requirements of this Indenture will thereafter, together
with its Affiliates, constitute an additional Permitted Holder.
“Permitted
Investments” means:
(1)
any
Investment in the Issuer or any Restricted Subsidiary;
(2)
any
Investment in Cash Equivalents or Investment Grade Securities;
(3)
any
Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person
if as a result of such Investment (a) such Person becomes a Restricted
Subsidiary of the Issuer, or (b) such Person, in one transaction or a series
of
related transactions, is merged, consolidated or amalgamated with or into,
or
transfers or conveys all or substantially all of its assets to, or is liquidated
into, the Issuer or a Restricted Subsidiary of the Issuer;
(4)
any
Investment in securities or other assets not constituting Cash Equivalents
and
received in connection with an Asset Sale made pursuant to the provisions of
Section 4.06 or any other disposition of assets not constituting an Asset
Sale;
(5)
any
Investment existing on, or made pursuant to binding commitments existing on,
the
Issue Date;
(6)
advances
to employees, taken together with all other advances made pursuant to this
clause (6), not to exceed $15.0 million at any one time
outstanding;
(7)
any
Investment acquired by the Issuer or any of its Restricted Subsidiaries (a)
in
exchange for any other Investment or accounts receivable held by the Issuer
or
any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
other Investment or accounts receivable, or (b) as a result of a foreclosure
by
the Issuer or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment
in
default;
(8)
Hedging
Obligations permitted under Section 4.03(b)(x);
(9)
any
Investment by the Issuer or any of its Restricted Subsidiaries in a Similar
Business having an aggregate Fair Market Value, taken together with all other
Investments made pursuant to this clause (9) that are at that time outstanding,
not to exceed the greater of (x) $100.0 million and (y) 4.5% of Total Assets
at
the time of such Investment (with the Fair Market Value of each Investment
being
measured at the time
made
and
without giving effect to subsequent changes in value); provided, however, that
if any Investment pursuant to this clause (9) is made in any Person that is
not
a Restricted Subsidiary of the Issuer at the date of the making of such
Investment and such Person becomes a Restricted Subsidiary of the Issuer after
such date, such Investment shall thereafter be deemed to have been made pursuant
to clause (1) above and shall cease to have been made pursuant to this clause
(9) for so long as such Person continues to be a Restricted
Subsidiary;
(10)
additional
Investments by the Issuer or any of its Restricted Subsidiaries having an
aggregate Fair Market Value, taken together with all other Investments made
pursuant to this clause (10) that are at that time outstanding, not to exceed
the greater of (x) $100.0 million and (y) 4.5% of Total Assets at the time
of
such Investment (with the Fair Market Value of each Investment being measured
at
the time made and without giving effect to subsequent changes in
value);
(11)
loans
and
advances to officers, directors and employees for business-related travel
expenses, moving expenses and other similar expenses, in each case Incurred
in
the ordinary course of business;
(12)
Investments
the payment for which consists of Equity Interests of the Issuer (other than
Disqualified Stock) or any direct or indirect parent of the Issuer, as
applicable; provided, however, that such Equity Interests will not increase
the
amount available for Restricted Payments under clause (C) of the definition
of
“Cumulative Credit”;
(13)
any
transaction to the extent it constitutes an Investment that is permitted by
and
made in accordance with the provisions of Section 4.07(b) (except transactions
described in clauses (ii), (vi), (vii) and (xi)(b) of such
Section);
(14)
Investments
consisting of the licensing or contribution of intellectual property pursuant
to
joint marketing arrangements with other Persons;
(15)
guarantees
issued in accordance with Sections 4.03 and 4.11;
(16)
Investments
consisting of or to finance purchases and acquisitions of inventory, supplies,
materials, services or equipment or purchases of contract rights or licenses
or
leases of intellectual property, in each case in the ordinary course of
business;
(17)
any
Investment in a Receivables Subsidiary or any Investment by a Receivables
Subsidiary in any other Person in connection with a Qualified Receivables
Financing, including Investments of funds held in accounts permitted or required
by the arrangements governing such Qualified Receivables Financing or any
related Indebtedness; provided, however, that any Investment in a Receivables
Subsidiary is in the form of a Purchase Money Note, contribution of additional
receivables or an equity interest;
(18)
additional
Investments in joint ventures of the Issuer or any of its Restricted
Subsidiaries existing on the Issue Date not to exceed at any one time in the
aggregate outstanding, $15.0 million; and
(19)
Investments
of a Restricted Subsidiary of the Issuer acquired after the Issue Date or of
an
entity merged into, amalgamated with, or consolidated with the Issuer or a
Restricted Subsidiary of the Issuer in a transaction that is not prohibited
by
Section 5.01 after the Issue Date to the extent that such Investments were
not
made in contemplation of such acquisition, merger, amalgamation or consolidation
and were in existence on the date of such acquisition, merger, amalgamation
or
consolidation.
“Permitted
Junior Securities” shall mean unsecured debt or equity securities of the Issuer
or any Guarantor or any successor corporation issued pursuant to a plan of
reorganization or readjustment of the Issuer or any Guarantor, as applicable,
that are subordinated to the payment of all then outstanding Senior Indebtedness
of the Issuer or any Guarantor, as applicable, at least to the same extent
that
the Securities are subordinated to the payment of all Senior Indebtedness of
the
Issuer or any Guarantor, as applicable, on the Issue Date, so long as to the
extent that any Senior Indebtedness of the Issuer or any Guarantor, as
applicable, outstanding on the date of consummation of any such plan of
reorganization or readjustment is not paid in full in cash on such date, the
holders of any such Senior Indebtedness not so paid in full in cash have
consented to the terms of such plan of reorganization or
readjustment.
“Permitted
Liens” means, with respect to any Person:
(1)
pledges
or deposits by such Person under workmen’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or U.S. government bonds to
secure surety or appeal bonds to which such Person is a party, or deposits
as
security for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business;
(2)
Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each
case for sums not yet due or being contested in good faith by appropriate
proceedings or other Liens arising out of judgments or awards against such
Person with respect to which such Person shall then be proceeding with an appeal
or other proceedings for review;
(3)
Liens
for
taxes, assessments or other governmental charges not yet due or payable or
subject to penalties for nonpayment or which are being contested in good faith
by appropriate proceedings;
(4)
Liens
in
favor of issuers of performance and surety bonds or bid bonds or with respect
to
other regulatory requirements or letters of credit issued pursuant to the
request of and for the account of such Person in the ordinary course of its
business;
(5)
minor
survey exceptions, minor encumbrances, easements or reservations of, or rights
of others for, licenses, rights-of-way, sewers, electric lines, telegraph
and
telephone lines and other similar purposes, or zoning or other restrictions
as
to the use of real properties or Liens incidental to the conduct of the business
of such Person or to the ownership of its properties which were not Incurred
in
connection with Indebtedness and which do not in the aggregate materially
adversely affect the value of said properties or materially impair their use
in
the operation of the business of such Person;
(6)
(A)
Liens
securing Senior Indebtedness, and Liens on assets of a Restricted Subsidiary
that is not a Guarantor securing Indebtedness of such Restricted Subsidiary,
in
each case permitted to be Incurred pursuant to Section 4.03 and (B) Liens
securing Indebtedness permitted to be Incurred pursuant to clause (iv) or (xx)
of Section 4.03(b) (provided that in the case of clause (xx), such Lien does
not
extend to the property or assets of any Subsidiary of the Issuer other than
a
Foreign Subsidiary);
(7)
Liens
existing on the Issue Date;
(8)
Liens
on
assets, property or shares of stock of a Person at the time such Person becomes
a Subsidiary; provided, however, that such Liens are not created or Incurred
in
connection with, or in contemplation of, such other Person becoming such a
Subsidiary; provided, further, however, that such Liens may not extend to any
other property owned by the Issuer or any Restricted Subsidiary of the
Issuer);
(9)
Liens
on
assets or property at the time the Issuer or a Restricted Subsidiary of the
Issuer acquired the assets or property, including any acquisition by means
of a
merger, amalgamation or consolidation with or into the Issuer or any Restricted
Subsidiary of the Issuer; provided, however, that such Liens are not created
or
Incurred in connection with, or in contemplation of, such acquisition; provided,
further, however, that the Liens may not extend to any other property owned
by
the Issuer or any Restricted Subsidiary of the Issuer;
(10)
Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing
to
the Issuer or another Restricted Subsidiary of the Issuer permitted to be
Incurred in accordance with Section 4.03;
(11)
Liens
securing Hedging Obligations not incurred in violation of this Indenture;
provided that with respect to Hedging Obligations relating to Indebtedness,
such
Lien extends only to the property securing such Indebtedness;
(12)
Liens
on
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;
(13)
leases
and subleases of real property which do not materially interfere with the
ordinary conduct of the business of the Issuer or any of its Restricted
Subsidiaries;
(14)
Liens
arising from Uniform Commercial Code financing statement filings regarding
operating leases entered into by the Issuer and its Restricted Subsidiaries
in
the ordinary course of business;
(15)
Liens
in
favor of the Issuer or any Guarantor;
(16)
Liens
on
accounts receivable and related assets of the type specified in the definition
of “Receivables Financing” Incurred in connection with a Qualified Receivables
Financing;
(17)
deposits
made in the ordinary course of business to secure liability to insurance
carriers;
(18)
Liens
on
the Equity Interests of Unrestricted Subsidiaries;
(19)
grants
of
software and other technology licenses in the ordinary course of
business;
(20)
Liens
to
secure any refinancing, refunding, extension, renewal or replacement (or
successive refinancings, refundings, extensions, renewals or replacements)
as a
whole, or in part, of any Indebtedness secured by any Lien referred to in the
foregoing clauses (6)(B), (7), (8), (9), (10), (11) and (15); provided, however,
that (x) such new Lien shall be limited to all or part of the same property
that
secured the original Lien (plus improvements on such property), and (y) the
Indebtedness secured by such Lien at such time is not increased to any amount
greater than the sum of (A) the outstanding principal amount or, if greater,
committed amount of the Indebtedness described under clauses (6)(B), (7), (8),
(9), (10), (11) and (15) at the time the original Lien became a Permitted Lien
under this Indenture, and (B) an amount necessary to pay any fees and expenses,
including premiums, related to such refinancing, refunding, extension, renewal
or replacement;
(21)
Liens
on
equipment of the Issuer or any Restricted Subsidiary granted in the ordinary
course of business to the Issuer’s or such Restricted Subsidiary’s client at
which such equipment is located; and
(22)
judgment
and attachment Liens not giving rise to an Event of Default and notices of
lis
pendens and associated rights related to litigation being contested in good
faith by appropriate proceedings and for which adequate reserves have been
made;
(23)
Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of
business;
(24)
Liens
incurred to secure cash management services in the ordinary course of business;
and
(25)
other
Liens securing obligations incurred in the ordinary course of business which
obligations do not exceed $25.0 million at any one time
outstanding.
“Person”
means any individual, corporation, partnership, limited liability company,
joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other
entity.
“Preferred
Stock” means any Equity Interest with preferential right of payment of dividends
or upon liquidation, dissolution, or winding up.
“Purchase
Money Note” means a promissory note of a Receivables Subsidiary evidencing a
line of credit, which may be irrevocable, from the Issuer or any Subsidiary
of
the Issuer to a Receivables Subsidiary in connection with a Qualified
Receivables Financing, which note is intended to finance that portion of the
purchase price that is not paid by cash or a contribution of
equity.
“Qualified
Receivables Financing” means any Receivables Financing of a Receivables
Subsidiary that meets the following conditions:
(1)
the
Board
of Directors of the Issuer shall have determined in good faith that such
Qualified Receivables Financing (including financing terms, covenants,
termination events and other provisions) is in the aggregate economically fair
and reasonable to the Issuer and the Receivables Subsidiary;
(2)
all
sales
of accounts receivable and related assets to the Receivables Subsidiary are
made
at Fair Market Value (as determined in good faith by the Issuer);
and
(3)
the
financing terms, covenants, termination events and other provisions thereof
shall be market terms (as determined in good faith by the Issuer) and may
include Standard Securitization Undertakings.
The
grant
of a security interest in any accounts receivable of the Issuer or any of its
Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank
Indebtedness shall not be deemed a Qualified Receivables Financing.
“Rating
Agency” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P
ceases to rate the Securities for reasons outside of the Issuer’s control, a
“nationally recognized statistical rating organization” within the meaning of
Rule 15cs-1(c)(2)(vi)(F) under the Exchange Act selected by the Issuer or any
direct or indirect parent of the Issuer as a replacement agency for Moody’s or
S&P, as the case may be.
“Receivables
Fees” means distributions or payments made directly or by means of discounts
with respect to any participation interests issued or sold in connection with,
and all other fees paid to a Person that is not a Restricted Subsidiary in
connection with, any Receivables Financing.
“Receivables
Financing” means any transaction or series of transactions that may be entered
into by the Issuer or any of its Subsidiaries pursuant to which the Issuer
or
any of its Subsidiaries may sell, convey or otherwise transfer to (a) a
Receivables Subsidiary (in the case of a transfer by the Issuer or any of its
Subsidiaries); and (b) any other Person (in the case of a transfer by a
Receivables Subsidiary), or may grant a security interest in, any accounts
receivable
(whether
now existing or arising in the future) of the Issuer or any of its Subsidiaries,
and any assets related thereto including, without limitation, all collateral
securing such accounts receivable, all contracts and all guarantees or other
obligations in respect of such accounts receivable, proceeds of such accounts
receivable and other assets which are customarily transferred or in respect
of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable and any Hedging
Obligations entered into by the Issuer or any such Subsidiary in connection
with
such accounts receivable.
“Receivables
Repurchase Obligation” means any obligation of a seller of receivables in a
Qualified Receivables Financing to repurchase receivables arising as a result
of
a breach of a representation, warranty or covenant or otherwise, including
as a
result of a receivable or portion thereof becoming subject to any asserted
defense, dispute, off-set or counterclaim of any kind as a result of any action
taken by, any failure to take action by or any other event relating to the
seller.
“Receivables
Subsidiary” means a Wholly Owned Restricted Subsidiary of the Issuer (or another
Person formed for the purposes of engaging in Qualified Receivables Financing
with the Issuer in which the Issuer or any Subsidiary of the Issuer makes an
Investment and to which the Issuer or any Subsidiary of the Issuer transfers
accounts receivable and related assets) which engages in no activities other
than in connection with the financing of accounts receivable of the Issuer
and
its Subsidiaries, all proceeds thereof and all rights (contractual or other),
collateral and other assets relating thereto, and any business or activities
incidental or related to such business, and which is designated by the Board
of
Directors of the Issuer (as provided below) as a Receivables Subsidiary
and:
(a)
no
portion of the Indebtedness or any other obligations (contingent or otherwise)
of which (i) is guaranteed by the Issuer or any other Subsidiary of the Issuer
(excluding guarantees of obligations (other than the principal of and interest
on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates the Issuer or any other Subsidiary of the Issuer in
any
way other than pursuant to Standard Securitization Undertakings, or (iii)
subjects any property or asset of the Issuer or any other Subsidiary of the
Issuer, directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to Standard Securitization
Undertakings;
(b)
with
which neither the Issuer nor any other Subsidiary of the Issuer has any material
contract, agreement, arrangement or understanding other than on terms which
the
Issuer reasonably believes to be no less favorable to the Issuer or such
Subsidiary than those that might be obtained at the time from Persons that
are
not Affiliates of the Issuer; and
(c)
to
which
neither the Issuer nor any other Subsidiary of the Issuer has any obligation
to
maintain or preserve such entity’s financial condition or cause such entity to
achieve certain levels of operating results.
Any
such
designation by the Board of Directors of the Issuer shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors of the Issuer giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing conditions.
“Representative”
means the trustee, agent or representative (if any) for an issue of Senior
Indebtedness or Designated Senior Indebtedness, as applicable; provided that
if,
and for so long as, such Senior Indebtedness lacks such a Representative, then
the Representative for such Senior Indebtedness shall at all times constitute
the holder or holders of a majority in outstanding principal amount of
obligations under such Senior Indebtedness.
“Required
Holders” means, at any time, holders of more than 50% in aggregate principal
amount of the Securities then outstanding. GSMP shall be deemed to be the
Required Holders until the Issuer provides to the Trustee written notice to
the
contrary.
“Restricted
Investment” means an Investment other than a Permitted Investment.
“Restricted
Subsidiary” means, with respect to any Person, any Subsidiary of such Person
other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated
in this Indenture, all references to Restricted Subsidiaries shall mean
Restricted Subsidiaries of the Issuer.
“Sale/Leaseback
Transaction” means an arrangement relating to property now owned or hereafter
acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a
Restricted Subsidiary transfers such property to a Person and the Issuer or
such
Restricted Subsidiary leases it from such Person, other than leases between
the
Issuer and a Restricted Subsidiary of the Issuer or between Restricted
Subsidiaries of the Issuer.
“S&P”
means Standard & Poor’s Ratings Group or any successor to the rating agency
business thereof.
“SEC”
means the Securities and Exchange Commission.
“Secured
Bank Indebtedness” means any Bank Indebtedness that is secured by a Permitted
Lien incurred or deemed incurred pursuant to clause (6) of the definition of
“Permitted Liens.”
“Secured
Indebtedness” means any Indebtedness secured by a Lien.
“Secured
Indebtedness Leverage Ratio” means, with respect to any Person, at any date the
ratio of (i) Secured Indebtedness of such Person and its Restricted Subsidiaries
as of such date of calculation (determined on a consolidated basis in accordance
with GAAP) that constitutes First-Priority Lien Obligations to (ii) EBITDA
of
such Person for the four full fiscal quarters for which internal financial
statements are available immediately preceding such date on which such
additional Indebtedness is Incurred. In the event that the Issuer or any of
its
Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness
subsequent to the commencement of the period for which the Secured Indebtedness
Leverage Ratio is being calculated but prior to the event for which the
calculation of the Secured Indebtedness Leverage Ratio is made (the “Secured
Leverage Calculation Date”), then the Secured Indebtedness Leverage Ratio shall
be calculated giving pro forma effect to such Incurrence, repayment, repurchase
or redemption of Indebtedness as if the same had occurred at the beginning
of
the applicable four-quarter period; provided that the Issuer may elect pursuant
to an Officers’ Certificate delivered to the Trustee to treat all or any portion
of the commitment under any
Indebtedness
as being Incurred at such time, in which case any subsequent Incurrence of
Indebtedness under such commitment shall not be deemed, for purposes of this
calculation, to be an Incurrence at such subsequent time.
For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as determined
in accordance with GAAP), in each case with respect to an operating unit of
a
business, and any operational changes that the Issuer or any of its Restricted
Subsidiaries has determined to make and/or made after the Issue Date and during
the four-quarter reference period or subsequent to such reference period and
on
or prior to or simultaneously with the Secured Leverage Calculation Date (each,
for purposes of this definition, a “pro forma event”) shall be calculated on a
pro forma basis assuming that all such Investments, acquisitions, dispositions,
mergers, consolidations (including the Transactions), discontinued operations
and other operational changes (and the change of any associated Indebtedness
and
the change in EBITDA resulting therefrom) had occurred on the first day of
the
four-quarter reference period. If since the beginning of such period any Person
that subsequently became a Restricted Subsidiary or was merged with or into
the
Issuer or any Restricted Subsidiary since the beginning of such period shall
have made any Investment, acquisition, disposition, merger, consolidation,
discontinued operation or operational change, in each case with respect to
an
operating unit of a business, that would have required adjustment pursuant
to
this definition, then the Secured Indebtedness Leverage Ratio shall be
calculated giving pro forma effect thereto for such period as if such
Investment, acquisition, disposition, discontinued operation, merger,
consolidation or operational change had occurred at the beginning of the
applicable four-quarter period.
For
purposes of this definition, whenever pro forma effect is to be given to any
pro
forma event, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Issuer and shall be set
forth
in an Officers’ Certificate in reasonable detail (which Officers’ Certificate
shall be approved by the Board of Directors, so long as GSMP constitutes the
Required Holders). Any such pro forma calculation may include adjustments
appropriate, in the reasonable good faith determination of the Issuer as set
forth in such Officers’ Certificate, to reflect (1) operating expense reductions
and (so long as GSMP constitutes the Required Holders, other than in the case
of
operational changes) other operating improvements or synergies reasonably
expected to result within 24 months (so long as GSMP constitutes the Required
Holders) from the applicable pro forma event (including, to the extent
applicable, from the Transactions) and (2) all adjustments of the nature used
in
connection with the calculation of “Adjusted EBITDA” as set forth in footnote 4
to the “Summary Historical and Unaudited Pro Forma Financial Data” under
“Offering Memorandum Summary” in the Offering Memorandum to the extent such
adjustments, without duplication, continue to be applicable to such four-quarter
period.
“Securities”
means the securities issued under this Indenture.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the SEC promulgated thereunder.
“Senior
Credit Documents” means the collective reference to the Credit Agreement, any
notes issued pursuant thereto and the guarantees thereof, and the
collateral
documents relating thereto, as amended, supplemented, restated, renewed,
refunded, replaced, restructured, repaid, refinanced or otherwise modified
from
time to time.
“Senior
Indebtedness” with respect to the Issuer or any of Guarantor means all
Indebtedness and any Receivables Repurchase Obligation of the Issuer or any
such
Guarantor, including interest thereon (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to
the
Issuer or any Guarantor at the rate specified in the documentation with respect
thereto whether or not a claim for post-filing interest is allowed in such
proceeding) and other amounts (including fees, expenses, reimbursement
obligations under letters of credit and indemnities) owing in respect thereof,
whether outstanding on the Issue Date or thereafter Incurred, unless the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such obligations are subordinated in right
of payment to any other Indebtedness of the Issuer or such Guarantor, as
applicable;
provided,
however
,
that
Senior Indebtedness shall not include, as applicable:
(1)
any
obligation of the Issuer to any Subsidiary of the Issuer (other than any
Receivables Repurchase Obligation) or of any Subsidiary of the Issuer to the
Issuer or any other Subsidiary of the Issuer,
(2)
any
liability for Federal, state, local or other taxes owed or owing by the Issuer
or such Restricted Subsidiary,
(3)
any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including guarantees thereof or instruments evidencing
such
liabilities),
(4)
any
Indebtedness or obligation of the Issuer or any Restricted Subsidiary that
by
its terms is subordinate or junior in any respect to any other Indebtedness
or
obligation of the Issuer or such Restricted Subsidiary, as applicable, including
any Pari Passu Indebtedness and any Subordinated Indebtedness,
(5)
any
obligations with respect to any Capital Stock, or
(6)
any
Indebtedness Incurred in violation of this Indenture but, as to any such
Indebtedness Incurred under the Credit Agreement, no such violation shall be
deemed to exist for purposes of this clause (6) if the holders of such
Indebtedness or their Representative shall have received an Officers’
Certificate to the effect that the Incurrence of such Indebtedness does not
(or,
in the case of a revolving credit facility thereunder, the Incurrence of the
entire committed amount thereof at the date on which the initial borrowing
thereunder is made would not) violate this Indenture.
If
any
Senior Indebtedness is disallowed, avoided or subordinated pursuant to the
provisions of Section 548 of Title 11 of the United States Code or any
applicable state fraudulent conveyance law, such Senior Indebtedness
nevertheless will constitute Senior Indebtedness.
“Senior
Notes” means the Second Priority Senior Secured Fixed and Floating Rate Notes
due 2014 of the Issuer issued on the Issue Date.
“Significant
Subsidiary” means any Restricted Subsidiary that would be a “Significant
Subsidiary” of the Issuer within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
“Similar
Business” means a business, the majority of whose revenues are derived from the
activities of the Issuer and its Subsidiaries as of the Issue Date or any
business or activity that is reasonably similar or complementary thereto or
a
reasonable extension, development or expansion thereof or ancillary
thereto.
“Sponsors”
means (1) Apollo Management, L.P., Graham Partners, Inc. and any of their
respective Affiliates (collectively, the “Apollo Sponsors”) and (2) any Person
that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act, or any successor provision) with any Apollo Sponsors,
provided that any Apollo Sponsor (x) owns a majority of the voting power and
(y)
controls a majority of the Board of Directors of the Issuer.
“Standard
Securitization Undertakings” means representations, warranties, covenants,
indemnities and guarantees of performance entered into by the Issuer or any
Subsidiary of the Issuer which the Issuer has determined in good faith to be
customary in a Receivables Financing including without limitation, those
relating to the servicing of the assets of a Receivables Subsidiary, it being
understood that any Receivables Repurchase Obligation shall be deemed to be
a
Standard Securitization Undertaking.
“Stated
Maturity” means, with respect to any security, the date specified in such
security as the fixed date on which the final payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
“Subordinated
Indebtedness” means (a) with respect to the Issuer, any Indebtedness of the
Issuer which is by its terms subordinated in right of payment to the Securities,
and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which
is by its terms subordinated in right of payment to its Guarantee.
“Subsidiary”
means, with respect to any Person, (1) any corporation, association or other
business entity (other than a partnership, joint venture or limited liability
company) of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to vote
in
the election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person or
one
or more of the other Subsidiaries of that Person or a combination thereof,
and
(2) any partnership, joint venture or limited liability company of which (x)
more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general and limited partnership interests, as applicable,
are owned or controlled, directly or indirectly, by such Person or one or more
of the other Subsidiaries of that Person or a combination thereof, whether
in
the form of membership, general, special or limited partnership interests or
otherwise, and (y) such Person or any Subsidiary of such Person is a controlling
general partner or otherwise controls such entity.
“Tax
Distributions” means any distributions described in Section
4.04(b)(xii).
“TIA”
means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as
in
effect on the date of this Indenture.
“Total
Assets” means the total consolidated assets of the Issuer and its Restricted
Subsidiaries, as shown on the most recent balance sheet of the
Issuer.
“Transactions”
means the Acquisition and the transactions related thereto, the issuance of
the
Securities and Senior Notes, and borrowings made pursuant to the Credit
Agreement on the Issue Date.
“Treasury
Rate” means, as of the applicable redemption date, the yield to maturity as of
such redemption date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least
two
business days prior to such redemption date (or, if such Statistical Release
is
no longer published, any publicly available source of similar market data))
most
nearly equal to the period from such redemption date to September 20, 2010;
provided, however, that if the period from such redemption date to September
20,
2010 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year will
be
used.
“Trust
Officer” means:
(1)
any
officer within the corporate trust department of the Trustee, including any
vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such Person’s knowledge of and familiarity with the particular
subject, and
(2)
who
shall
have direct responsibility for the administration of this
Indenture.
“Trustee”
means the party named as such in this Indenture until a successor replaces
it
and, thereafter, means the successor.
“Uniform
Commercial Code” means the New York Uniform Commercial Code as in effect from
time to time.
“Unrestricted
Subsidiary” means:
(1)
any
Subsidiary of the Issuer that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors of such Person in the
manner provided below; and
(2)
any
Subsidiary of an Unrestricted Subsidiary.
The
Board
of Directors of the Issuer may designate any Subsidiary of the
Issuer
(including
any newly acquired or newly formed Subsidiary of the Issuer) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Equity Interests or Indebtedness of, or owns or holds any Lien on any
property of, the Issuer or any other Subsidiary of the Issuer that is not a
Subsidiary of the Subsidiary to be so designated; provided, however, that the
Subsidiary to be so designated and its Subsidiaries do not at the time of
designation have and do not thereafter Incur any Indebtedness pursuant to which
the lender has recourse to any of the assets of the Issuer or any of its
Restricted Subsidiaries; provided, further, however, that either:
(a)
the
Subsidiary to be so designated has total consolidated assets of $1,000 or less;
or
(b)
if
such
Subsidiary has consolidated assets greater than $1,000, then such designation
would be permitted under Section 4.04.
The
Board
of Directors of the Issuer may designate any Unrestricted Subsidiary to be
a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation:
(x)
(1)
the
Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.03(a) or (2) the Fixed Charge
Coverage Ratio for the Issuer and its Restricted Subsidiaries would be greater
than such ratio for the Issuer and its Restricted Subsidiaries immediately
prior
to such designation, in each case on a pro forma basis taking into account
such
designation, and
(y)
no
Event
of Default shall have occurred and be continuing.
Any
such
designation by the Board of Directors of the Issuer shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors of the Issuer giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing provisions.
“U.S.
Government Obligations” means securities that are:
(1)
direct
obligations of the United States of America for the timely payment of which
its
full faith and credit is pledged, or
(2)
obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the timely payment of which
is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America,
which,
in
each case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any such
U.S. Government Obligations or a specific payment of principal of or interest
on
any such U.S. Government Obligations held by such custodian for the account
of
the holder of such depository receipt; provided that (except as required by
law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in
respect
of the U.S. Government Obligations or the specific payment of principal of
or
interest on the U.S. Government Obligations evidenced by such depository
receipt.
“Voting
Stock” of any Person as of any date means the Capital Stock of such Person that
is at the time entitled to vote in the election of the Board of Directors of
such Person.
“Weighted
Average Life to Maturity” means, when applied to any Indebtedness or
Disqualified Stock, as the case may be, at any date, the quotient obtained
by
dividing (1) the sum of the products of the number of years from the date of
determination to the date of each successive scheduled principal payment of
such
Indebtedness or redemption or similar payment with respect to such Disqualified
Stock multiplied by the amount of such payment, by (2) the sum of all such
payments.
“Wholly
Owned Restricted Subsidiary” is any Wholly Owned Subsidiary that is a Restricted
Subsidiary.
“Wholly
Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the
outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares or shares required to be held by Foreign
Subsidiaries) shall at the time be owned by such Person or by one or more Wholly
Owned Subsidiaries of such Person.
Section
1.02. Other Definitions.
Term
|
Defined
in Section
|
“Additional
Interest”
|
Appendix
A
|
“Affiliate
Transaction”
|
4.07
|
“Appendix”
|
Preamble
|
“Asset
Sale Offer”
|
4.06(b)
|
“Bankruptcy
Law”
|
6.01
|
“Blockage
Notice”
|
10.03
|
“covenant
defeasance option”
|
8.01(c)
|
“Custodian”
|
6.01
|
“Definitive
Security”
|
Appendix
A
|
“Depository”
|
Appendix
A
|
“Euroclear”
|
Appendix
A
|
“Event
of Default”
|
6.01
|
“Excess
Proceeds”
|
4.06(b)
|
“Exchange
Securities”
|
Preamble
|
“Global
Securities Legend”
|
Appendix
A
|
“Guarantee
Blockage Notice”
|
12.03
|
“Guarantee
Payment Blockage Period”
|
12.03
|
“Guaranteed
Obligations”
|
11.01(a)
|
“IAI”
|
Appendix
A
|
“incorporated
provision”
|
13.01
|
“Initial
Purchasers”
|
Appendix
A
|
“Initial
Securities”
|
Preamble
|
“legal
defeasance option”
|
8.01
|
“Notice
of Default”
|
6.01
|
“Offer
Period”
|
4.06(d)
|
“Original
Securities”
|
Preamble
|
“pay
its Guarantee”
|
12.03
|
“pay
the Securities”
|
10.03
|
“Paying
Agent”
|
2.04(a)
|
“Payment
Blockage Period”
|
10.03
|
“protected
purchaser”
|
2.08
|
“Purchase
Agreement”
|
Appendix
A
|
“QIB”
|
Appendix
A
|
“Refinancing
Indebtedness”
|
4.03(b)
|
“Refunding
Capital Stock”
|
4.04(b)
|
“Registered
Exchange Offer”
|
Appendix
A
|
“Registration
Agreement”
|
Appendix
A
|
“Registrar”
|
2.04(a)
|
“Regulation
S”
|
Appendix
A
|
“Regulation
S Securities”
|
Appendix
A
|
“Restricted
Payment”
|
4.04(a)
|
“Restricted
Period”
|
Appendix
A
|
“Restricted
Securities Legend”
|
Appendix
A
|
“Retired
Capital Stock”
|
4.04(b)
|
“Rule
501”
|
Appendix
A
|
“Rule
144A”
|
Appendix
A
|
“Rule
144A Securities”
|
Appendix
A
|
“Securities
Custodian”
|
Appendix
A
|
“Shelf
Registration Statement”
|
Appendix
A
|
“Successor
Company”
|
5.01(a)
|
“Successor
Guarantor”
|
5.01(b)
|
“Transfer”
|
5.01(b)
|
“Transfer
Restricted Securities”
|
Appendix
A
|
“Unrestricted
Definitive Security
|
Appendix
A
|
Section
1.03. Incorporation by Reference of Trust Indenture Act. This Indenture
incorporates by reference certain provisions of the TIA. The following TIA
terms
have the following meanings:
“Commission”
means the SEC.
“indenture
securities” means the Securities and the Guarantees.
“indenture
security holder” means a Holder.
“indenture
to be qualified” means this Indenture.
“indenture
trustee” or “institutional trustee” means the Trustee.
“obligor”
on the indenture securities means the Issuer, the Guarantors and
any
other
obligor on the Securities.
All
other
TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned
to them by such definitions.
Section
1.04. Rules of Construction. Unless the context otherwise requires:
(a)
a
term
has the meaning assigned to it;
(b)
an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
(c)
“or”
is
not exclusive;
(d)
“including”
means including without limitation;
(e)
words
in
the singular include the plural and words in the plural include the
singular;
(f)
unsecured
Indebtedness shall not be deemed to be subordinate or junior to Secured
Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(g)
the
principal amount of any non-interest bearing or other discount security at
any
date shall be the principal amount thereof that would be shown on a balance
sheet of the issuer dated such date prepared in accordance with
GAAP;
(h)
the
principal amount of any Preferred Stock shall be (i) the maximum liquidation
value of such Preferred Stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred Stock, whichever
is
greater;
(i)
unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP;
(j)
“$”
and
“U.S. Dollars” each refer to United States dollars, or such other money of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; and
(k)
whenever
in this Indenture or the Securities there is mentioned, in any context,
principal, interest or any other amount payable under or with respect to any
Securities, such mention shall be deemed to include mention of the payment
of
Additional Interest, to the extent that, in such context, Additional Interest
are, were or would be payable in respect thereof.
ARTICLE
2
THE
SECURITIES
Section
2.01. Amount of Securities. The aggregate principal amount of Original
Securities which may be authenticated and delivered under this Indenture on
the
Issue Date is $425,000,000. All Securities shall be substantially identical
except as to denomination.
The
Issuer may from time to time after the Issue Date issue Additional Securities
of
the same or additional series under this Indenture in an unlimited principal
amount, so long as (i) the Incurrence of the Indebtedness represented by such
Additional Securities is at such time permitted by Section 4.03 and (ii) such
Additional Securities are issued in compliance with the other applicable
provisions of this Indenture;
provided
however
that so
long as GSMP constitutes the Required Holders, the Issuer shall not issue
Additional Securities of the same series to the extent that after giving effect
to such issuance GSMP would not constitute the Required Holders, unless the
Issuer and the Trustee receive the prior written consent of GSMP. With respect
to any Additional Securities issued after the Issue Date (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities pursuant to Section 2.07, 2.08, 2.09,
2.10,
3.06, 4.08(c) or the Appendix), there shall be (a) established in or pursuant
to
a resolution of the Board of Directors and (b) (i) set forth or determined
in
the manner provided in an Officers’ Certificate or (ii) established in one or
more indentures supplemental hereto, prior to the issuance of such Additional
Securities:
(1)
the
aggregate principal amount of such Additional Securities which may be
authenticated and delivered under this Indenture,
(2)
the
issue
price and issuance date of such Additional Securities, including the date from
which interest on such Additional Securities shall accrue;
(3)
if
applicable, that such Additional Securities shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the
respective depositaries for such Global Securities, the form of any legend
or
legends which shall be borne by such Global Securities in addition to or in
lieu
of those set forth in Exhibit A hereto and any circumstances in addition to
or
in lieu of those set forth in Section 2.2 of the Appendix in which any such
Global Security may be exchanged in whole or in part for Additional Securities
registered, or any transfer of such Global Security in whole or in part may
be
registered, in the name or names of Persons other than the depositary for such
Global Security or a nominee thereof; and
(4)
if
applicable, that such Additional Securities that are not Transfer Restricted
Securities shall not be issued in the form of Initial Securities as set forth
in
Exhibit A, but shall be issued in the form of Exchange Securities as set forth
in Exhibit B.
If
any of
the terms of any Additional Securities are established by action taken pursuant
to a resolution of the Board of Directors, a copy of an appropriate record
of
such action shall be certified by the Secretary or any Assistant Secretary
of
the Issuer and delivered to the Trustee at or prior to the delivery of the
Officers’ Certificate or the indenture supplemental hereto setting forth the
terms of the Additional Securities.
Section
2.02. Form and Dating. Provisions relating to the Initial Securities and the
Exchange Securities are set forth in the Appendix, which is hereby incorporated
in
and
expressly made a part of this Indenture. The (i) Initial Securities and the
Trustee’s certificate of authentication and (ii) any Additional Securities (if
issued as Transfer Restricted Securities) and the Trustee’s certificate of
authentication shall each be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture.
The
(i) Exchange Securities and the Trustee’s certificate of authentication and (ii)
any Additional Securities issued other than as Transfer Restricted Securities
and the Trustee’s certificate of authentication shall each be substantially in
the form of Exhibit B hereto, which is hereby incorporated in and expressly
made
a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Issuer or any Guarantor is subject, if any, or usage (provided that any such
notation, legend or endorsement is in a form acceptable to the Issuer). Each
Security shall be dated the date of its authentication. The Securities shall
be
issuable only in registered form without interest coupons and in minimum
denominations of $2,000 and any integral multiples of $1,000.
Section
2.03. Execution and Authentication. The Trustee shall authenticate and make
available for delivery upon a written order of the Issuer signed by one Officer
(a) Original Securities for original issue on the date hereof in an aggregate
principal amount of $425,000,000, (b) subject to the terms of this Indenture,
Additional Securities in an aggregate principal amount to be determined at
the
time of issuance and specified therein and (c) the Exchange Securities for
issue
in a Registered Exchange Offer pursuant to the Registration Agreement for a
like
principal amount of Initial Securities exchanged pursuant thereto or otherwise
pursuant to an effective registration statement under the Securities Act. Such
order shall specify the amount of the Securities to be authenticated, the date
on which the original issue of Securities is to be authenticated and whether
the
Securities are to be Initial Securities or Exchange Securities. Notwithstanding
anything to the contrary in the Indenture or the Appendix, any issuance of
Additional Securities after the Issue Date shall be in a principal amount of
at
least $2,000 and integral multiples of $1,000 in excess of $2,000.
One
Officer shall sign the Securities for the Issuer by manual or facsimile
signature.
If
an
Officer whose signature is on a Security no longer holds that office at the
time
the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A
Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under
this
Indenture.
The
Trustee may appoint one or more authenticating agents reasonably acceptable
to
the Issuer to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall
be
furnished to the Issuer. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities 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
any
Registrar, Paying Agent or agent for service of notices and
demands.
Section
2.04. Registrar and Paying Agent.
i)
The
Issuer shall maintain (i) an office or agency where Securities may be presented
for registration of transfer or for exchange (the “Registrar”) and (ii) an
office or agency where Securities may be presented for payment (the “Paying
Agent”). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Issuer may have one or more co-registrars and one
or
more additional paying agents. The term “Registrar” includes any co-registrars.
The term “Paying Agent” includes the Paying Agent and any additional paying
agents. The Issuer initially appoints the Trustee as Registrar, Paying Agent
and
the Securities Custodian with respect to the Global Securities.
(b)
The
Issuer may enter into an appropriate agency agreement with any Registrar or
Paying Agent not a party to this Indenture, which shall incorporate the terms
of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such agent. The Issuer shall notify the Trustee of the name and
address of any such agent. If the Issuer fails to maintain a Registrar or Paying
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Issuer or any of its
domestically organized Wholly Owned Subsidiaries may act as Paying Agent or
Registrar.
(c)
The
Issuer may remove any Registrar or Paying Agent upon written notice to such
Registrar or Paying Agent and to the Trustee; provided, however, that no such
removal shall become effective until (i) if applicable, acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered
into
by the Issuer and such successor Registrar or Paying Agent, as the case may
be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent
may
resign at any time upon written notice to the Issuer and the Trustee; provided,
however, that the Trustee may resign as Paying Agent or Registrar only if the
Trustee also resigns as Trustee in accordance with Section 7.08.
Section
2.05. Paying Agent to Hold Money in Trust. Prior to each due date of the
principal of and interest on any Security, the Issuer shall deposit with each
Paying Agent (or if the Issuer or a Wholly Owned Subsidiary is acting as Paying
Agent, segregate and hold in trust for the benefit of the Persons entitled
thereto) a sum sufficient to pay such principal and interest when so becoming
due. The Issuer shall require each Paying Agent (other than the Trustee) to
agree in writing that a Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by a Paying Agent for the payment of
principal of and interest on the Securities, and shall notify the Trustee of
any
default by the Issuer in making any such payment. If the Issuer or a Wholly
Owned Subsidiary of the Issuer acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it in trust for the benefit of the
Persons entitled thereto. The Issuer at any time may require a Paying Agent
to
pay all money held by it to the Trustee and to account for any funds disbursed
by such Paying Agent. Upon complying with this Section, a Paying Agent shall
have no further liability for the money delivered to the Trustee.
Section
2.06. 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 Holders. If the Trustee is not the Registrar, the Issuer shall
furnish, or cause the Registrar to furnish, to the Trustee, in writing at least
five Business Days before each interest payment date and at such
other
times as the Trustee may request in writing, a list in such form and as of
such
date as the Trustee may reasonably require of the names and addresses of
Holders.
Section
2.07. Transfer and Exchange. The Securities shall be issued in registered form
and shall be transferable only upon the surrender of a Security for registration
of transfer and in compliance with the Appendix. When a Security is presented
to
the Registrar with a request to register a transfer, the Registrar shall
register the transfer as requested if its requirements therefor are met. When
Securities are presented to the Registrar with a request to exchange them for
an
equal principal amount of Securities of other denominations, the Registrar
shall
make the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Issuer shall execute and the
Trustee shall authenticate Securities at the Registrar’s request. The Issuer may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any transfer or exchange pursuant to
this Section. The Issuer shall not be required to make, and the Registrar need
not register, transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed) or of any Securities for a period of 15 days before a
selection of Securities to be redeemed.
Prior
to
the due presentation for registration of transfer of any Security, the Issuer,
the Guarantors, the Trustee, the Paying Agent and the Registrar may deem and
treat the Person in whose name a Security is registered as the absolute owner
of
such Security for the purpose of receiving payment of principal of and interest,
if any, on such Security and for all other purposes whatsoever, whether or
not
such Security is overdue, and none of the Issuer, any Guarantor, the Trustee,
the Paying Agent or the Registrar shall be affected by notice to the
contrary.
Any
Holder of a beneficial interest in a Global Security shall, by acceptance of
such beneficial interest, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained
by
(a) the Holder of such Global Security (or its agent) or (b) any Holder of
a
beneficial interest in such Global Security, and that ownership of a beneficial
interest in such Global Security shall be required to be reflected in a book
entry.
All
Securities issued upon any transfer or exchange pursuant to the terms of this
Indenture shall evidence the same debt and shall be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
Section
2.08. Replacement Securities. If a mutilated Security is surrendered to the
Registrar or if the Holder of a Security claims that the Security has been
lost,
destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall
authenticate a replacement Security if the requirements of Section 8 405 of
the
Uniform Commercial Code are met, such that the Holder (a) satisfies the Issuer
or the Trustee within a reasonable time after such Holder has notice of such
loss, destruction or wrongful taking and the Registrar does not register a
transfer prior to receiving such notification, (b) makes such request to the
Issuer or the Trustee prior to the Security being acquired by a protected
purchaser as defined in Section 8 303 of the Uniform Commercial Code (a
“protected purchaser”) and (c) satisfies any other reasonable requirements of
the Trustee. If required by the Trustee or the Issuer, such Holder shall furnish
an indemnity bond sufficient in the judgment of the Trustee or the Issuer to
protect the Issuer, the Trustee, a Paying Agent and
the
Registrar from any loss that any of them may suffer if a Security is replaced.
The Issuer and the Trustee may charge the Holder for their expenses in replacing
a Security (including without limitation, attorneys’ fees and disbursements in
replacing such Security). In the event any such mutilated, lost, destroyed
or
wrongfully taken Security has become or is about to become due and payable,
the
Issuer in its discretion may pay such Security instead of issuing a new Security
in replacement thereof.
Every
replacement Security is an additional obligation of the Issuer.
The
provisions of this Section 2.08 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, lost, destroyed or wrongfully taken Securities.
Section
2.09. Outstanding Securities. Securities outstanding at any time are all
Securities authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. Subject to Section 13.06, a Security does not cease to be
outstanding because the Issuer or an Affiliate of the Issuer holds the
Security.
If
a
Security is replaced pursuant to Section 2.08 (other than a mutilated Security
surrendered for replacement), it ceases to be outstanding unless the Trustee
and
the Issuer receive proof satisfactory to them that the replaced Security is
held
by a protected purchaser. A mutilated Security ceases to be outstanding upon
surrender of such Security and replacement thereof pursuant to Section
2.08.
If
a
Paying Agent segregates and holds in trust, in accordance with this Indenture,
on a redemption date or maturity date money sufficient to pay all principal
and
interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, and no Paying Agent
is
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest on them ceases to
accrue.
Section
2.10. Temporary Securities. In the event that Definitive Securities are to
be
issued under the terms of this Indenture, until such Definitive Securities
are
ready for delivery, the Issuer may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of
Definitive Securities but may have variations that the Issuer considers
appropriate for temporary Securities. Without unreasonable delay, the Issuer
shall prepare and the Trustee shall authenticate Definitive Securities and
make
them available for delivery in exchange for temporary Securities upon surrender
of such temporary Securities at the office or agency of the Issuer, without
charge to the Holder. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as Definitive
Securities.
Section
2.11. Cancellation. The Issuer at any time may deliver Securities to the Trustee
for cancellation. The Registrar and each Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange,
payment
or cancellation and shall dispose of canceled Securities in accordance with
its
customary procedures. The Issuer may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancellation.
The Trustee shall not authenticate Securities in place of canceled Securities
other than pursuant to the terms of this Indenture.
Section
2.12. Defaulted Interest. If the Issuer defaults in a payment of interest on
the
Securities, the Issuer shall pay the defaulted interest then borne by the
Securities (plus interest on such defaulted interest to the extent lawful)
in
any lawful manner. The Issuer may pay the defaulted interest to the Persons
who
are Holders on a subsequent special record date. The Issuer shall fix or cause
to be fixed any such special record date and payment date to the reasonable
satisfaction of the Trustee and shall promptly mail or cause to be mailed to
each affected Holder a notice that states the special record date, the payment
date and the amount of defaulted interest to be paid.
Section
2.13. CUSIP Numbers, ISINs, etc. The Issuer in issuing the Securities may use
CUSIP numbers, ISINs and “Common Code” numbers (if then generally in use) and,
if so, the Trustee shall use CUSIP numbers, ISINs and “Common Code” numbers in
notices of redemption as a convenience to Holders; provided, however, that
any
such notice may state that no representation is made as to the correctness
of
such numbers, either as printed on the Securities or as contained in any notice
of a redemption that reliance may be placed only on the other identification
numbers printed on the Securities and that any such redemption shall not be
affected by any defect in or omission of such numbers. The Issuer shall advise
the Trustee of any change in the CUSIP numbers, ISINs and “Common Code”
numbers.
Section
2.14. Calculation of Principal Amount of Securities. The aggregate principal
amount of the Securities, at any date of determination, shall be the principal
amount of the Securities outstanding at such date of determination. With respect
to any matter requiring consent, waiver, approval or other action of the Holders
of a specified percentage of the principal amount of all the Securities, such
percentage shall be calculated, on the relevant date of determination, by
dividing (a) the principal amount, as of such date of determination, of
Securities, the Holders of which have so consented, by (b) the aggregate
principal amount, as of such date of determination, of the Securities then
outstanding, in each case, as determined in accordance with the preceding
sentence, Section 2.09 and Section 13.06 of this Indenture. Any such calculation
made pursuant to this Section 2.14 shall be made by the Issuer and delivered
to
the Trustee pursuant to an Officers’ Certificate.
ARTICLE
3
REDEMPTION
Section
3.01. Redemption. The Securities may be redeemed, in whole, or from time to
time
in part, subject to the conditions and at the redemption prices set forth in
Paragraph 5 of the form of Securities set forth in Exhibit A and Exhibit B
hereto, which are hereby incorporated by reference and made a part of this
Indenture, together with accrued and unpaid interest to the redemption
date.
Section
3.02. Applicability of Article. Redemption of Securities at the election of
the
Issuer or otherwise, as permitted or required by any provision of this
Indenture, shall be made in accordance with such provision and this
Article.
Section
3.03. Notices to Trustee. If the Issuer elects to redeem Securities pursuant
to
the optional redemption provisions of Paragraph 5 of the Security, it shall
notify the Trustee in writing of (i) the Section of this Indenture pursuant
to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Securities to be redeemed and (iv) the redemption price. The Issuer
shall give notice to the Trustee provided for in this paragraph at least 30
days
but not more than 60 days before a redemption date if the redemption is pursuant
to Paragraph 5 of the Security, unless a shorter period is acceptable to the
Trustee. Such notice shall be accompanied by an Officers’ Certificate and
Opinion of Counsel from the Issuer to the effect that such redemption will
comply with the conditions herein. If fewer than all the Securities are to
be
redeemed, the record date relating to such redemption shall be selected by
the
Issuer and given to the Trustee, which record date shall be not fewer than
15
days after the date of notice to the Trustee. Any such notice may be canceled
at
any time prior to notice of such redemption being mailed to any Holder and
shall
thereby be void and of no effect.
Section
3.04. Selection of Securities to Be Redeemed. In the case of any partial
redemption, selection of the Securities for redemption will be made by the
Trustee on a pro rata basis to the extent practicable; provided that no
Securities of $2,000 or less shall be redeemed in part. The Trustee shall make
the selection from outstanding Securities not previously called for redemption.
The Trustee may select for redemption portions of the principal of Securities
that have denominations larger than $2,000. Securities and portions of them
the
Trustee selects shall be in amounts of $2,000 or any integral multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Issuer promptly of the Securities or portions of
Securities to be redeemed.
Section
3.05. Notice of Optional Redemption. (a) At least 30 days but not more than
60
days before a redemption date pursuant to Paragraph 5 of the Security, the
Issuer shall mail or cause to be mailed by first-class mail a notice of
redemption to each Holder whose Securities are to be redeemed.
Any
such
notice shall identify the Securities to be redeemed and shall
state:
(i)
the
redemption date;
(ii)
the
redemption price and the amount of accrued interest to the redemption
date;
(iii)
the
name
and address of the Paying Agent;
(iv)
that
Securities called for redemption must be surrendered to the Paying Agent to
collect the redemption price, plus accrued interest;
(v)
if
fewer
than all the outstanding Securities are to be redeemed, the certificate numbers
and principal amounts of the particular Securities to be
redeemed,
the aggregate principal amount of Securities to be redeemed and the aggregate
principal amount of Securities to be outstanding after such partial
redemption;
(vi)
that,
unless the Issuer defaults in making such redemption payment or the Paying
Agent
is prohibited from making such payment pursuant to the terms of this Indenture,
interest on Securities (or portion thereof) called for redemption ceases to
accrue on and after the redemption date;
(vii)
the
CUSIP
number, ISIN and/or “Common Code” number, if any, printed on the Securities
being redeemed; and
(viii)
that
no
representation is made as to the correctness or accuracy of the CUSIP number
or
ISIN and/or “Common Code” number, if any, listed in such notice or printed on
the Securities.
(b)
At
the
Issuer’s request, the Trustee shall give the notice of redemption in the
Issuer’s name and at the Issuer’s expense. In such event, the Issuer shall
provide the Trustee with the information required by this Section at least
one
Business Day prior to the date such notice is to be provided to Holders and
such
notice may not be canceled.
Section
3.06. Effect of Notice of Redemption. Once notice of redemption is mailed in
accordance with Section 3.05, Securities called for redemption become due and
payable on the redemption date and at the redemption price stated in the notice,
except as provided in the final sentence of paragraph 5 of the Securities.
Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest, to, but not including, the
redemption date; provided, however, that if the redemption date is after a
regular record date and on or prior to the interest payment date, the accrued
interest shall be payable to the Holder of the redeemed Securities registered
on
the relevant record date. Failure to give notice or any defect in the notice
to
any Holder shall not affect the validity of the notice to any other
Holder.
Section
3.07. Deposit of Redemption Price. With respect to any Securities, prior to
10:00 a.m., New York City time, on the redemption date, the Issuer shall deposit
with the Paying Agent (or, if the Issuer or a Wholly Owned Subsidiary is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest on all Securities or portions thereof
to be redeemed on that date other than Securities or portions of Securities
called for redemption that have been delivered by the Issuer to the Trustee
for
cancellation. On and after the redemption date, interest shall cease to accrue
on Securities or portions thereof called for redemption so long as the Issuer
has deposited with the Paying Agent funds sufficient to pay the principal of,
plus accrued and unpaid interest on, the Securities to be redeemed, unless
the
Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture.
Section
3.08. Securities Redeemed in Part. Upon surrender of a Security that is redeemed
in part, the Issuer shall execute and the Trustee shall authenticate for the
Holder (at the Issuer’s expense) a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
ARTICLE
4
COVENANTS
Section
4.01.
Payment
of Securities
.
The
Issuer shall promptly pay the principal of and interest on the Securities on
the
dates and in the manner provided in the Securities and in this Indenture. An
installment of principal of or interest shall be considered paid on the date
due
if on such date the Trustee or the Paying Agent holds as of 12:00 p.m. New
York
City time money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Holders on that date pursuant to the terms of this
Indenture.
The
Issuer shall pay interest on overdue principal at the rate specified therefor
in
the Securities, and it shall pay interest on overdue installments of interest
at
the same rate borne by the Securities to the extent lawful.
Section
4.02.
Reports
and Other Information
.
ii)
The
Issuer shall provide the Trustee and Holders, without cost to each
Holder),
(i)
within
the time period specified in the SEC’s rules and regulations, annual reports on
Form 10-K (or any successor or comparable form) containing the information
required to be contained therein (or required in such successor or comparable
form),
(ii)
within
the time period specified in the SEC’s rules and regulations, reports on Form
10-Q (or any successor or comparable form) containing the information required
to be contained therein (or required in such successor or comparable
form),
(iii)
promptly
from time to time after the occurrence of an event required to be therein
reported (and in any event within the time period specified in the SEC’s rules
and regulations), such other reports on Form 8-K (or any successor or comparable
form), and
(iv)
any
other
information, documents and other reports which the Issuer would be required
to
file with the SEC if it were subject to Section 13 or 15(d) of the Exchange
Act.
(b)
In
the
event that:
(i)
the
rules
and regulations of the SEC permit the Issuer and any direct or indirect parent
of the Issuer to report at such parent entity’s level on a consolidated basis
and
(ii)
such
parent entity of the Issuer is not engaged in any business in any material
respect other than incidental to its ownership, directly or indirectly, of
the
capital stock of the Issuer,
such
consolidated reporting at such parent entity’s level in a manner consistent with
that described in this Section 4.02 for the Issuer shall satisfy this Section
4.02.
(c)
The
Issuer shall make such information available to prospective investors upon
request. In addition, the Issuer shall, for so long as any Securities remain
outstanding during any period when it is not subject to Section 13 or 15(d)
of
the Exchange Act, or otherwise permitted to furnish the SEC with certain
information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the
Holders of the Securities and to prospective investors, upon their request,
the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Notwithstanding
the foregoing, the Issuer will be deemed to have furnished such reports referred
to above to the Trustee and the Holders if the Issuer has filed such reports
with the SEC via the EDGAR filing system and such reports are publicly
available. In addition, such requirements shall be deemed satisfied by the
filing with the SEC of a registration statement or an amendment thereto relating
to debt or equity securities of the Issuer if such registration statement and/or
amendments thereto are filed at times that otherwise satisfy the time
requirements set forth in Section 4.02(a).
In
the
event that any direct or indirect parent of the Issuer is or becomes a Guarantor
of the Securities, the Issuer may satisfy its obligations under this Section
4.02 with respect to financial information relating to the Issuer by furnishing
financial information relating to such direct or indirect parent; provided
that
the same is accompanied by consolidating information that explains in reasonable
detail the differences between the information relating to such direct or
indirect parent and any of its Subsidiaries other than the Issuer and its
Subsidiaries, on the one hand, and the information relating to the Issuer,
the
Guarantors and the other Subsidiaries of the Issuer on a standalone basis,
on
the other hand.
Section
4.03.
Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock
.
iii)
(i) The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness)
or issue any shares of Disqualified Stock; and (ii) the Issuer shall not permit
any of its Restricted Subsidiaries (other than a Guarantor) to issue any shares
of Preferred Stock; provided, however, that the Issuer and any Restricted
Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness
(including Acquired Indebtedness) or issue shares of Disqualified Stock and
any
Restricted Subsidiary may issue shares of Preferred Stock, in each case if
the
Fixed Charge Coverage Ratio of the Issuer for the most recently ended four
full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is Incurred
or such Disqualified Stock or Preferred Stock is issued would have been at
least
2.00 to 1.00 determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
Incurred, or the Disqualified Stock or Preferred Stock had been issued, as
the
case may be, and the application of proceeds therefrom had occurred at the
beginning of such four-quarter period.
(b)
The
limitations set forth in Section 4.03(a) shall not apply to:
(i)
the
Incurrence by the Issuer or its Restricted Subsidiaries of Secured Indebtedness
under the Credit Agreement and the issuance and creation of letters of credit
and bankers’ acceptances thereunder (with letters of credit and bankers’
acceptances being deemed to have a principal amount equal to the face amount
thereof) in an aggregate principal amount equal to the greater of (x) $875.0
million, less up to $150.0 million of principal repayments required to be made,
and actually made, with the proceeds from Asset Sales applied in accordance
with
Section 4.06 and (y) an aggregate principal amount outstanding at any one time
that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to
exceed 4.00 to 1.00, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom);
(ii)
the
Incurrence by the Issuer and the Guarantors of Indebtedness represented by
(i)
the Securities (not including any Additional Securities) and the Guarantees,
as
applicable (including the Exchange Securities and guarantees thereof) and (ii)
the Senior Notes (not including any additional Senior Notes) and the related
guarantees thereof (including exchange Senior Notes and related guarantees
thereof);
(iii)
Indebtedness
existing on the Issue Date (other than Indebtedness described in clauses (i)
and
(ii) of this Section 4.03(b));
(iv)
Indebtedness
(including Capitalized Lease Obligations) Incurred by the Issuer or any of
its
Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of
its
Restricted Subsidiaries and Preferred Stock issued by any Restricted
Subsidiaries of the Issuer to finance (whether prior to or within 270 days
after) the purchase, lease, construction or improvement of property (real or
personal) or equipment (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets (but no other material assets));
provided
that so
long as GSMP constitutes the Required Holders, the aggregate principal amount
of
Indebtedness incurred pursuant to this clause (iv) shall not exceed the greater
of (x) $100.0 million and (y) 4.5% of Total Assets at the time of
Incurrence;
(v)
Indebtedness
Incurred by the Issuer or any of its Restricted Subsidiaries constituting
reimbursement obligations with respect to letters of credit and bank guarantees
issued in the ordinary course of business, including without limitation letters
of credit in respect of workers’ compensation claims, health, disability or
other benefits to employees or former employees or their families or property,
casualty or liability insurance or self-insurance, and letters of credit in
connection with the maintenance of, or pursuant to the requirements of,
environmental or other permits or licenses from governmental authorities, or
other Indebtedness with respect to reimbursement type obligations regarding
workers’ compensation claims;
(vi)
Indebtedness
arising from agreements of the Issuer or a Restricted Subsidiary providing
for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred in connection with the Transactions or any other acquisition
or
disposition of any business, assets or a Subsidiary of the Issuer in accordance
with the terms of this Indenture, other than guarantees of
Indebtedness
Incurred
by any Person acquiring
all or any portion of such business, assets or Subsidiary for the purpose
of
financing such acquisition;
(vii)
Indebtedness
of the Issuer to a Restricted Subsidiary; provided that any such Indebtedness
owed to a Restricted Subsidiary that is not a Guarantor is subordinated in
right
of payment to the obligations of the Issuer under the Securities; provided,
further, that any subsequent issuance or transfer of any Capital Stock or any
other event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any other subsequent transfer of any such Indebtedness
(except to the Issuer or another Restricted Subsidiary) shall be deemed, in
each
case, to be an Incurrence of such Indebtedness;
(viii)
shares
of
Preferred Stock of a Restricted Subsidiary issued to the Issuer or another
Restricted Subsidiary; provided that any subsequent issuance or transfer of
any
Capital Stock or any other event which results in any Restricted Subsidiary
that
holds such shares of Preferred Stock of another Restricted Subsidiary ceasing
to
be a Restricted Subsidiary or any other subsequent transfer of any such shares
of Preferred Stock (except to the Issuer or another Restricted Subsidiary)
shall
be deemed, in each case, to be an issuance of shares of Preferred
Stock;
(ix)
Indebtedness
of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary;
provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary
that is not a Guarantor such Indebtedness is subordinated in right of payment
to
the Guarantee of such Guarantor; provided, further, that any subsequent issuance
or transfer of any Capital Stock or any other event which results in any
Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such Indebtedness (except
to
the Issuer or another Restricted Subsidiary) shall be deemed, in each case,
to
be an Incurrence of such Indebtedness;
(x)
Hedging
Obligations that are not incurred for speculative purposes and either: (1)
for
the purpose of fixing or hedging interest rate risk with respect to any
Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(2) for the purpose of fixing or hedging currency exchange rate risk with
respect to any currency exchanges; or (3) for the purpose of fixing or hedging
commodity price risk (including resin price risk) with respect to any commodity
purchases or sales;
(xi)
obligations
in respect of performance, bid, appeal and surety bonds and completion
guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary
course of business;
(xii)
Indebtedness
or Disqualified Stock of the Issuer or any Restricted Subsidiary of the Issuer
and Preferred Stock of any Restricted Subsidiary of the Issuer not otherwise
permitted hereunder in an aggregate principal amount, which when aggregated
with
the principal amount or liquidation preference of all other Indebtedness,
Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant
to
this clause (xii), does not exceed (x) so long as GSMP constitutes the Required
Holders at the time
of
Incurrence, the sum of $100.0 million and 40.0% of Acquired EBITDA at the time
of Incurrence and (y) otherwise, the greater of $100.0 million and 4.5% of
Total
Assets at the time of Incurrence (it being understood that any Indebtedness
Incurred under this clause (xii) shall cease to be deemed Incurred or
outstanding for purposes of this clause (xii) but shall be deemed Incurred
for
purposes of Section 4.03(a) from and after the first date on which the Issuer,
or the Restricted Subsidiary, as the case may be, could have Incurred such
Indebtedness under Section 4.03(a) without reliance upon this clause
(xii));
(xiii)
any
guarantee by the Issuer or a Guarantor of Indebtedness or other obligations
of
the Issuer or any of its Restricted Subsidiaries so long as the Incurrence
of
such Indebtedness Incurred by the Issuer or such Restricted Subsidiary is
permitted under the terms of this Indenture; provided that if such Indebtedness
is by its express terms subordinated in right of payment to the Securities
or
the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee
of such Guarantor with respect to such Indebtedness shall be subordinated in
right of payment to such Guarantor’s Guarantee with respect to the Securities
substantially to the same extent as such Indebtedness is subordinated to the
Securities or the Guarantee of such Restricted Subsidiary, as
applicable;
(xiv)
the
Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness
or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the
Issuer which serves to refund, refinance or defease any Indebtedness Incurred
or
Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a)
and clauses (ii), (iii), (iv), (xiv), (xv), (xix) and (xx) of this Section
4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred
to
so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock,
including any Indebtedness, Disqualified Stock or Preferred Stock Incurred
to
pay premiums and fees in connection therewith (subject to the following proviso,
“Refinancing Indebtedness”) prior to its respective maturity; provided, however,
that such Refinancing Indebtedness:
(1)
has
a
Weighted Average Life to Maturity at the time such Refinancing Indebtedness
is
Incurred which is not less than the remaining Weighted Average Life to Maturity
of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or
refinanced;
(2)
has
a
Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity
of the Indebtedness being refunded or refinanced or (y) 91 days following the
last maturity date of the Securities;
(3)
to
the
extent such Refinancing Indebtedness refinances (a) Indebtedness equal to or
junior to the Securities or the Guarantee of such Restricted Subsidiary, as
applicable, such Refinancing Indebtedness is equal to or junior, as applicable,
to the Securities or the Guarantee of such Restricted Subsidiary, as applicable,
or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness
is
Disqualified Stock or Preferred Stock;
(4)
is
Incurred in an aggregate amount (or if issued with original issue discount,
an
aggregate issue price) that is equal to or less than the aggregate amount (or
if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced plus premium, fees and expenses
Incurred in connection with such refinancing;
(5)
shall
not
include (x) Indebtedness of a Restricted Subsidiary of the Issuer that is not
a
Guarantor that refinances Indebtedness of the Issuer or a Restricted Subsidiary
that is a Guarantor, or (y) Indebtedness of the Issuer or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
and
(6)
in
the
case of any Refinancing Indebtedness Incurred to refinance Indebtedness
outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed
to have been Incurred and to be outstanding under such clause (iv) or (xix)
of
this Section 4.03(b), as applicable, and not this clause (xiv) for purposes
of
determining amounts outstanding under such clauses (iv) or (xix) of this Section
4.03(b);
provided,
further, that subclauses (1) and (2) of this clause (xiv) shall not apply to
any
refunding or refinancing of the Securities or any Senior
Indebtedness.
(xv)
Indebtedness,
Disqualified Stock or Preferred Stock of (x) the Issuer or any of its Restricted
Subsidiaries incurred to finance an acquisition or (y) Persons that are acquired
by the Issuer or any of its Restricted Subsidiaries or merged with or into
the
Issuer or any of its Restricted Subsidiaries in accordance with the terms of
this Indenture; provided, however, that after giving effect to such acquisition
or merger, either:
(1)
the
Issuer would be permitted to Incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence
of Section 4.03(a); or
(2)
the
Fixed
Charge Coverage Ratio of the Issuer would be greater than immediately prior
to
such acquisition or merger;
(xvi)
Indebtedness
Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that
is not recourse to the Issuer or any Restricted Subsidiary other than a
Receivables Subsidiary (except for Standard Securitization
Undertakings);
(xvii)
Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument drawn against insufficient funds in the ordinary
course of business; provided that such Indebtedness is extinguished within
five
Business Days of its Incurrence;
(xviii)
Indebtedness
of the Issuer or any Restricted Subsidiary supported by a letter of credit
or
bank guarantee issued pursuant to the Credit Agreement, in a principal amount
not in excess of the stated amount of such letter of credit;
(xix)
at
any
time that GSMP does not constitute the Required Holders, Contribution
Indebtedness;
(xx)
Indebtedness
of Foreign Subsidiaries provided, however, that the aggregate principal amount
of Indebtedness Incurred under this clause (xx), when aggregated with the
principal amount of all other Indebtedness then outstanding and Incurred
pursuant to this clause (t), does not exceed $25.0 million at any one time
outstanding;
(xxi)
Indebtedness
of the Issuer or any Restricted Subsidiary consisting of (x) the financing
of
insurance premiums or (y) take-or-pay obligations contained in supply
arrangements, in each case, in the ordinary course of business; and
(xxii)
Indebtedness
Incurred on behalf of, or representing Guarantees of Indebtedness of, joint
ventures of the Issuer or any Restricted Subsidiary not in excess, at any one
time outstanding, of $7.5 million.
For
purposes of determining compliance with this Section 4.03, in the event that
an
item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria
of more than one of the categories of permitted Indebtedness described in
clauses (i) through (xxii) above or is entitled to be Incurred pursuant to
Section 4.03(a), the Issuer shall, in its sole discretion, classify or
reclassify, or later divide, classify or reclassify, such item of Indebtedness
in any manner that complies with this Section 4.03. Accrual of interest, the
accretion of accreted value, the payment of interest in the form of additional
Indebtedness with the same terms, the payment of dividends on Preferred Stock
in
the form of additional shares of Preferred Stock of the same class, accretion
of
original issue discount or liquidation preference and increases in the amount
of
Indebtedness outstanding solely as a result of fluctuations in the exchange
rate
of currencies shall not be deemed to be an Incurrence of Indebtedness for
purposes of this Section 4.03. Guarantees of, or obligations in respect of
letters of credit relating to, Indebtedness which is otherwise included in
the
determination of a particular amount of Indebtedness shall not be included
in
the determination of such amount of Indebtedness; provided that the Incurrence
of the Indebtedness represented by such guarantee or letter of credit, as the
case may be, was in compliance with this Section 4.03.
For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount
of Indebtedness denominated in a foreign currency shall be calculated based
on
the relevant currency exchange rate in effect on the date such Indebtedness
was
Incurred, in the case of term debt, or first committed or first Incurred
(whichever yields the lower U.S. dollar equivalent), in the case of revolving
credit debt; provided that if such Indebtedness is Incurred to refinance other
Indebtedness denominated in a foreign currency, and such refinancing would
cause
the applicable U.S. dollar-denominated restriction to be exceeded if calculated
at the relevant currency exchange rate in effect on the date of such
refinancing, such U.S. dollar-denominated restriction shall be deemed not to
have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced.
Section
4.04.
Limitation
on Restricted Payments
.
iv)
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly:
(i)
declare
or pay any dividend or make any distribution on account of the Issuer’s or any
of its Restricted Subsidiaries’ Equity Interests, including any payment made in
connection with any merger, amalgamation or consolidation involving the Issuer
(other than (A) dividends or distributions by the Issuer payable solely in
Equity Interests (other than Disqualified Stock) of the Issuer; or (B) dividends
or distributions by a Restricted Subsidiary so long as, in the case of any
dividend or distribution payable on or in respect of any class or series of
securities issued by a Restricted Subsidiary other than a Wholly Owned
Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least
its pro rata share of such dividend or distribution in accordance with its
Equity Interests in such class or series of securities);
(ii)
purchase
or otherwise acquire or retire for value any Equity Interests of the Issuer
or
any direct or indirect parent of the Issuer;
(iii)
make
any
principal payment on, or redeem, repurchase, defease or otherwise acquire or
retire for value, in each case prior to any scheduled repayment or scheduled
maturity, any Subordinated Indebtedness of the Issuer or any of its Restricted
Subsidiaries (other than the payment, redemption, repurchase, defeasance,
acquisition or retirement of (A) Subordinated Indebtedness in anticipation
of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of such payment, redemption,
repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted
under clauses (vii) and (ix) of Section 4.03(b)); or
(iv)
make
any
Restricted Investment all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as “Restricted Payments”),
unless, at the time of such Restricted Payment:
(1)
no
Default shall have occurred and be continuing or would occur as a consequence
thereof;
(2)
immediately
after giving effect to such transaction on a pro forma basis, the Issuer could
Incur $1.00 of additional Indebtedness under Section 4.03(a); and
(3)
such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Issuer and its Restricted Subsidiaries after the Issue
Date
(including Restricted Payments permitted by clauses (i), (iv) (only to the
extent of one-half of the amounts paid pursuant to such clause), (vi) and (viii)
of Section 4.04(b), but excluding all other Restricted Payments permitted by
Section 4.04(b)), is less than the amount equal to the Cumulative
Credit.
(b)
The
provisions of Section 4.04(a) shall not prohibit:
(i)
the
payment of any dividend or distribution within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Indenture;
(ii)
(a)
the
repurchase, retirement or other acquisition of any Equity Interests (“Retired
Capital Stock”) of the Issuer or any direct or indirect parent of the Issuer or
Subordinated Indebtedness of the Issuer, any direct or indirect parent of the
Issuer or any Guarantor in exchange for, or out of the proceeds of, the
substantially concurrent sale of, Equity Interests of the Issuer or any direct
or indirect parent of the Issuer or contributions to the equity capital of
the
Issuer (other than any Disqualified Stock or any Equity Interests sold to a
Subsidiary of the Issuer or to an employee stock ownership plan or any trust
established by the Issuer or any of its Subsidiaries) (collectively, including
any such contributions, “Refunding Capital Stock”); and
(B)
the
declaration and payment of accrued dividends on the Retired Capital Stock out
of
the proceeds of the substantially concurrent sale (other than to a Subsidiary
of
the Issuer or to an employee stock ownership plan or any trust established
by
the Issuer or any of its Subsidiaries) of Refunding Capital Stock;
(iii)
the
redemption, repurchase or other acquisition or retirement of Subordinated
Indebtedness of the Issuer or any Guarantor made by exchange for, or out of
the
proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer
or a Guarantor which is Incurred in accordance with Section 4.03 so long
as:
(A)
the
principal amount of such new Indebtedness does not exceed the principal amount
of the Subordinated Indebtedness being so redeemed, repurchased, acquired or
retired for value (plus the amount of any premium required to be paid under
the
terms of the instrument governing the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired plus any fees incurred in connection
therewith),
(B)
such
Indebtedness is subordinated to the Securities or the related Guarantee, as
the
case may be, at least to the same extent as such Subordinated Indebtedness
so
purchased, exchanged, redeemed, repurchased, acquired or retired for
value,
(C)
such
Indebtedness has a final scheduled maturity date equal to or later than the
earlier of (x) the final scheduled maturity date of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired or (y) 91
days
following the maturity date of the Securities, and
(D)
such
Indebtedness has a Weighted Average Life to Maturity at the time Incurred which
is not less than the shorter of the remaining Weighted Average Life to Maturity
of the Subordinated Indebtedness being so redeemed, repurchased, acquired or
retired;
(iv)
the
repurchase, retirement or other acquisition (or dividends to any direct or
indirect parent of the Issuer to finance any such repurchase, retirement or
other acquisition) for value of Equity Interests of the Issuer or any direct
or
indirect parent of the Issuer held by any future, present or former employee,
director or
consultant
of the Issuer or any direct or indirect parent of the Issuer or any Subsidiary
of the Issuer pursuant to any management equity plan or stock option plan or
any
other management or employee benefit plan or other agreement or arrangement;
provided, however, that the aggregate amounts paid under this clause (iv) do
not
exceed $15.0 million in any calendar year (with unused amounts in any calendar
year being permitted to be carried over for the two succeeding calendar years
subject, so long as GSMP constitutes the Required Holders, to a maximum payment
(without giving effect to the following proviso) of $20.0 million in any
calendar year); provided, further, however, that such amount in any calendar
year may be increased by an amount not to exceed:
(A)
the
cash
proceeds received by the Issuer or any of its Restricted Subsidiaries from
the
sale of Equity Interests (other than Disqualified Stock) of the Issuer or any
direct or indirect parent of the Issuer (to the extent contributed to the
Issuer) to members of management, directors or consultants of the Issuer and
its
Restricted Subsidiaries or any direct or indirect parent of the Issuer that
occurs after the Issue Date (provided that the amount of such cash proceeds
utilized for any such repurchase, retirement, other acquisition or dividend
shall not increase the amount available for Restricted Payments under Section
4.04(a)(3)); plus
(B)
the
cash
proceeds of key man life insurance policies received by the Issuer or any direct
or indirect parent of the Issuer (to the extent contributed to the Issuer)
or
the Issuer’s Restricted Subsidiaries after the Issue Date;
provided
that the Issuer may elect to apply all or any portion of the aggregate increase
contemplated by clauses (A) and (B) above in any calendar year;
(v)
the
declaration and payment of dividends or distributions to holders of any class
or
series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries
issued or incurred in accordance with Section 4.03;
(vi)
the
declaration and payment of dividends or distributions (a) to holders of any
class or series of Designated Preferred Stock (other than Disqualified Stock)
issued after the Issue Date and (b) to any direct or indirect parent of the
Issuer, the proceeds of which will be used to fund the payment of dividends
to
holders of any class or series of Designated Preferred Stock (other than
Disqualified Stock) of any direct or indirect parent of the Issuer issued after
the Issue Date; provided, however, that, (A) for the most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date of issuance of such Designated Preferred Stock,
after giving effect to such issuance (and the payment of dividends or
distributions) on a pro forma basis, the Issuer would have had a Fixed Charge
Coverage Ratio of at least 2.00 to 1.00 and (B) the aggregate amount of
dividends declared and paid pursuant to this clause (vi) does not exceed the
net
cash proceeds actually received by the Issuer from any such sale of Designated
Preferred Stock (other than Disqualified Stock) issued after the Issue
Date;
(vii)
Investments
in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken
together with all other Investments made pursuant to this clause (vii) that
are
at that time outstanding, not to exceed the greater of $25.0 million and 1.5%
of
Total Assets at the time of such Investment (with the Fair Market Value of
each
Investment being measured at the time made and without giving effect to
subsequent changes in value);
(viii)
the
payment of dividends on the Issuer’s common stock (or the payment of dividends
to any direct or indirect parent of the Issuer, as the case may be, to fund
the
payment by such direct or indirect parent of the Issuer of dividends on such
entity’s common stock) of up to 6% per annum of the net proceeds received by the
Issuer from any public offering of common stock of the Issuer or any direct
or
indirect parent of the Issuer;
(ix)
Investments
that are made with Excluded Contributions;
(x)
other
Restricted Payments in an aggregate amount since the Issue Date not to exceed
(x) so long as GSMP constitutes the Required Holders, the sum of $50.0 million
and 20% of Acquired EBITDA at the time made and (y) otherwise the greater of
$50.0 million and 2.0% of Total Assets at the time made;
(xi)
the
distribution, as a dividend or otherwise, of shares of Capital Stock of, or
Indebtedness owed to the Issuer or a Restricted Subsidiary of the Issuer by,
Unrestricted Subsidiaries;
(xii)
the
payment of dividends or other distributions to any direct or indirect parent
of
the Issuer in amounts required for such parent to pay federal, state or local
income taxes (as the case may be) imposed directly on such parent to the extent
such income taxes are attributable to the income of the Issuer and its
Restricted Subsidiaries (including, without limitation, by virtue of such parent
being the common parent of a consolidated or combined tax group of which the
Issuer and/or its Restricted Subsidiaries are members);
(xiii)
the
payment of dividends, other distributions or other amounts or the making of
loans or advances by the Issuer, if applicable:
(A)
in
amounts required for any direct or indirect parent of the Issuer, if applicable,
to pay fees and expenses (including franchise or similar taxes) required to
maintain its corporate existence, customary salary, bonus and other benefits
payable to, and indemnities provided on behalf of, officers and employees of
any
direct or indirect parent of the Issuer, if applicable, and general corporate
overhead expenses of any direct or indirect parent of the Issuer, if applicable,
in each case to the extent such fees and expenses are attributable to the
ownership or operation of the Issuer, if applicable, and its Subsidiaries;
(B)
in
amounts required for any direct or indirect parent of the Issuer, if applicable,
to pay interest and/or principal on Indebtedness the proceeds of which have
been
contributed to the Issuer or any of its Restricted Subsidiaries
and
that
has been guaranteed by, or is otherwise considered Indebtedness of, the Issuer
Incurred in accordance with Section 4.03; and
(C)
in
amounts required for any direct or indirect parent of the Issuer to pay fees
and
expenses, other than to Affiliates of the Issuer, related to any unsuccessful
equity or debt offering of such parent.
(xiv)
cash
dividends or other distributions on the Issuer’s Capital Stock used to, or the
making of loans to any direct or indirect parent of the Issuer to, fund the
Transactions and the payment of fees and expenses incurred in connection with
the Transactions or owed by the Issuer or any direct or indirect parent of
the
Issuer, as the case may be, or Restricted Subsidiaries of the Issuer to
Affiliates, in each case to the extent permitted by Section 4.07;
(xv)
repurchases
of Equity Interests deemed to occur upon exercise of stock options or warrants
if such Equity Interests represent a portion of the exercise price of such
options or warrants;
(xvi)
purchases
of receivables pursuant to a Receivables Repurchase Obligation in connection
with a Qualified Receivables Financing and the payment or distribution of
Receivables Fees;
(xvii)
payments
of cash, or dividends, distributions or advances by the Issuer or any Restricted
Subsidiary to allow the payment of cash in lieu of the issuance of fractional
shares upon the exercise of options or warrants or upon the conversion or
exchange of Capital Stock of any such Person;
(xviii)
the
repurchase, redemption or other acquisition or retirement for value of any
Subordinated Indebtedness pursuant to the provisions similar to those described
under Sections 4.06 and 4.08; provided that all Securities tendered by Holders
in connection with a Change of Control Offer or Asset Sale Offer, as applicable,
have been repurchased, redeemed or acquired for value; and
(xix)
any
payments made, including any such payments made to any direct or indirect parent
of the Issuer to enable it to make payments, in connection with the consummation
of the Transactions or as contemplated by the Acquisition Documents (other
than
payments to any Permitted Holder or any Affiliate thereof);
provided,
however, that at the time of, and after giving effect to, any Restricted Payment
permitted under clauses (vi), (vii), (x) and (xi) of this Section 4.04(b),
no
Default shall have occurred and be continuing or would occur as a consequence
thereof.
(c)
As
of the
Issue Date, all of the Issuer’s Subsidiaries shall be Restricted Subsidiaries.
The Issuer shall not permit any Unrestricted Subsidiary to become a Restricted
Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For
purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary,
all outstanding Investments by the Issuer and its Restricted Subsidiaries
(except to the extent repaid) in the Subsidiary so designated shall be deemed
to
be Restricted Payments in an amount determined as set forth in the
last
sentence of the definition of “Investments.” Such designation shall only be
permitted if a Restricted Payment in such amount would be permitted at such
time
and if such Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
Section
4.05.
Dividend
and Other Payment Restrictions Affecting Subsidiaries
.
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or consensual restriction on the ability
of
any Restricted Subsidiary to:
(a)
(2)
pay
dividends or make any other distributions to the Issuer or any of its Restricted
Subsidiaries (1) on its Capital Stock; or (2) with respect to any other interest
or participation in, or measured by, its profits; or (ii) pay any Indebtedness
owed to the Issuer or any of its Restricted Subsidiaries;
(b)
make
loans or advances to the Issuer or any of its Restricted Subsidiaries;
or
(c)
sell,
lease or transfer any of its properties or assets to the Issuer or any of its
Restricted Subsidiaries;
except
in
each case for such encumbrances or restrictions existing under or by reason
of:
(1)
contractual
encumbrances or restrictions in effect on the Issue Date, including pursuant
to
the Credit Agreement and the other Senior Credit Documents;
(2)
this
Indenture, the Securities (and any Exchange Securities and guarantees thereof)
and the Note Purchase Agreement and the indenture relating to the Senior Notes
and the Senior Notes (and any exchange Senior Notes and guarantees
thereof);
(3)
applicable
law or any applicable rule, regulation or order;
(4)
any
agreement or other instrument relating to Indebtedness of a Person acquired
by
the Issuer or any Restricted Subsidiary which was in existence at the time
of
such acquisition (but not created in contemplation thereof or to provide all
or
any portion of the funds or credit support utilized to consummate such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired;
(5)
contracts
or agreements for the sale of assets, including any restriction with respect
to
a Restricted Subsidiary imposed pursuant to an agreement entered into for the
sale or disposition of the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition;
(6)
Secured
Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.03 and
4.12 that limit the right of the debtor to dispose of the assets securing such
Indebtedness;
(7)
restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business;
(8)
customary
provisions in joint venture agreements and other similar agreements entered
into
in the ordinary course of business;
(9)
purchase
money obligations for property acquired in the ordinary course of business
that
impose restrictions of the nature discussed in Section 4.05(c) above on the
property so acquired;
(10)
customary
provisions contained in leases, licenses and other similar agreements entered
into in the ordinary course of business that impose restrictions of the type
described in clause (c) above on the property subject to such
lease;
(11)
any
encumbrance or restriction of a Receivables Subsidiary effected in connection
with a Qualified Receivables Financing; provided, however, that such
restrictions apply only to such Receivables Subsidiary;
(12)
other
Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary
of the Issuer (i) that is a Guarantor that is Incurred subsequent to the Issue
Date pursuant to Section 4.03 or (ii) that is Incurred by a Foreign Subsidiary
of the Issuer subsequent to the Issue Date pursuant to clause (iv), (xii) or
(xx) of Section 4.03(b);
(13)
any
Restricted Investment not prohibited by Section 4.04 and any Permitted
Investment; or
(14)
any
encumbrances or restrictions of the type referred to in clauses (a), (b) and
(c)
above imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (1) through (13)
above; provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Issuer, no more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividend
or
other payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or
refinancing.
For
purposes of determining compliance with this Section 4.05, (i) the priority
of
any Preferred Stock in receiving dividends or liquidating distributions prior
to
dividends or liquidating distributions being paid on common stock shall not
be
deemed a restriction on the ability to make distributions on Capital Stock
and
(ii) the subordination of loans or advances made to the Issuer or a Restricted
Subsidiary of the Issuer to other Indebtedness Incurred by the Issuer or any
such Restricted Subsidiary shall not be deemed a restriction on the ability
to
make loans or advances.
Section
4.06.
Asset
Sales
.
v)
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
cause or make an Asset Sale, unless (x) the Issuer or
any
of
its Restricted Subsidiaries, as the case may be, receives consideration at
the
time of such Asset Sale at least equal to the Fair Market Value (as determined
in good faith by the Issuer) of the assets sold or otherwise disposed of, and
(y) at least 75% of the consideration therefor received by the Issuer or such
Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents;
provided that the amount of:
(i)
any
liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most
recent balance sheet or in the notes thereto) of the Issuer or any Restricted
Subsidiary of the Issuer (other than liabilities that are by their terms
subordinated to the Securities or any Guarantee) that are assumed by the
transferee of any such assets,
(ii)
any
notes
or other obligations or other securities or assets received by the Issuer or
such Restricted Subsidiary of the Issuer from such transferee that are converted
by the Issuer or such Restricted Subsidiary of the Issuer into cash within
180
days of the receipt thereof (to the extent of the cash received),
and
(iii)
any
Designated Non-cash Consideration received by the Issuer or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Non-cash Consideration received
pursuant to this clause (iii) that is at that time outstanding, not to exceed
the greater of 4.0% of Total Assets and $75.0 million at the time of the receipt
of such Designated Non-cash Consideration (with the Fair Market Value of each
item of Designated Non-cash Consideration being measured at the time received
and without giving effect to subsequent changes in value)
shall
be
deemed to be Cash Equivalents for the purposes of this Section
4.06(a).
(b)
Within
365 days after the Issuer’s or any Restricted Subsidiary of the Issuer’s receipt
of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary
of the Issuer may apply the Net Proceeds from such Asset Sale, at its
option:
(i)
to
repay
Senior Indebtedness, Secured Indebtedness, including Indebtedness under the
Credit Agreement (and, if the Indebtedness repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect thereto) or
Indebtedness of a Foreign Subsidiary or Pari Passu Indebtedness (provided that
if the Issuer or any Guarantor shall so reduce Obligations under Pari Passu
Indebtedness, the Issuer shall equally and ratably reduce Obligations under
the
Securities through open-market purchases (provided that such purchases are
at or
above 100% of the principal amount thereof or, in the case of the Securities,
the Current Accretion Amount thereof) or by making an offer (in accordance
with
the procedures set forth below for an Asset Sale Offer) to all Holders to
purchase at a purchase price equal to 100% of the principal amount thereof
(or,
in the case of the Securities, the Current Accretion Amount thereof), plus
accrued and unpaid interest (or, in the case of the Securities, Cash Interest),
if any, the pro rata principal amount of Securities) or Indebtedness of a
Restricted Subsidiary that is not a Guarantor, in each case other than
Indebtedness owed to the Issuer or an Affiliate of the Issuer,
(ii)
to
make
an investment in any one or more businesses (provided that if such investment
is
in the form of the acquisition of Capital Stock of a Person, such acquisition
results in such Person becoming a Restricted Subsidiary of the Issuer), assets,
or property or capital expenditures, in each case used or useful in a Similar
Business, or
(iii)
to
make
an investment in any one or more businesses (provided that if such investment
is
in the form of the acquisition of Capital Stock of a Person, such acquisition
results in such Person becoming a Restricted Subsidiary of the Issuer),
properties or assets that replace the properties and assets that are the subject
of such Asset Sale.
In
the
case of Sections 4.06(b)(ii) and (iii), a binding commitment shall be treated
as
a permitted application of the Net Proceeds from the date of such commitment;
provided that in the event such binding commitment is later canceled or
terminated for any reason before such Net Proceeds are so applied, the Issuer
or
such Restricted Subsidiary enters into another binding commitment within nine
months of such cancellation or termination of the prior binding commitment;
provided, further that the Issuer or such Restricted Subsidiary may only enter
into such a commitment under the foregoing provision one time with respect
to
each Asset Sale.
Pending
the final application of any such Net Proceeds, the Issuer or such Restricted
Subsidiary of the Issuer may temporarily reduce Indebtedness under a revolving
credit facility, if any, or otherwise invest such Net Proceeds in Cash
Equivalents or Investment Grade Securities. Any Net Proceeds from any Asset
Sale
that are not applied as provided and within the time period set forth in the
first sentence of this Section 4.06(b) (it being understood that any portion
of
such Net Proceeds used to make an offer to purchase Securities, as described
in
clause (i) of this Section 4.06(b), shall be deemed to have been invested
whether or not such offer is accepted) shall be deemed to constitute “Excess
Proceeds.” When the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Issuer shall make an offer to all Holders of Securities (and, at the option
of the Issuer, to holders of any Pari Passu Indebtedness) (an “Asset Sale
Offer”) to purchase the maximum principal amount of Securities (and such Pari
Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000
that may be purchased out of the Excess Proceeds at an offer price in cash
in an
amount equal to 100% of the principal amount thereof or, in the case of the
Securities, the Current Accretion Amount thereof (or, in the event such Pari
Passu Indebtedness was issued with significant original issue discount, 100%
of
the accreted value thereof), plus accrued and unpaid interest (or, in the case
of the Securities, Cash Interest), if any (or, in respect of such Pari Passu
Indebtedness, such lesser price, if any, as may be provided for by the terms
of
such Pari Passu Indebtedness), to the date fixed for the closing of such offer,
in accordance with the procedures set forth in this Section 4.06. The Issuer
shall commence an Asset Sale Offer with respect to Excess Proceeds within ten
Business Days after the date that Excess Proceeds exceeds $15.0 million by
mailing the notice required pursuant to the terms of Section 4.06(f), with
a
copy to the Trustee. To the extent that the aggregate amount of Securities
(and
such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds
for
general corporate purposes. If the aggregate principal amount of Securities
(and
such Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Securities to be purchased
in
the manner described in Section 4.06(e). Upon completion of any such Asset
Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
(c)
The
Issuer shall comply with the requirements of Rule 14e-1 under the Exchange
Act
and any other securities laws and regulations to the extent such laws or
regulations are applicable in connection with the repurchase of the Securities
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Indenture,
the Issuer shall comply with the applicable securities laws and regulations
and
shall not be deemed to have breached its obligations described in this Indenture
by virtue thereof.
(d)
Not
later
than the date upon which written notice of an Asset Sale Offer is delivered
to
the Trustee as provided above, the Issuer shall deliver to the Trustee an
Officers’ Certificate as to (i) the amount of the Excess Proceeds, (ii) the
allocation of the Net Proceeds from the Asset Sales pursuant to which such
Asset
Sale Offer is being made and (iii) the compliance of such allocation with the
provisions of Section 4.06(b). On such date, the Issuer shall also irrevocably
deposit with the Trustee or with a paying agent (or, if the Issuer or a Wholly
Owned Restricted Subsidiary is acting as the Paying Agent, segregate and hold
in
trust) an amount equal to the Excess Proceeds to be invested in Cash
Equivalents, as directed in writing by the Issuer, and to be held for payment
in
accordance with the provisions of this Section 4.06. Upon the expiration of
the
period for which the Asset Sale Offer remains open (the “Offer Period”), the
Issuer shall deliver to the Trustee for cancellation the Securities or portions
thereof that have been properly tendered to and are to be accepted by the
Issuer. The Trustee (or the Paying Agent, if not the Trustee) shall, on the
date
of purchase, mail or deliver payment to each tendering Holder in the amount
of
the purchase price. In the event that the Excess Proceeds delivered by the
Issuer to the Trustee are greater than the purchase price of the Securities
tendered, the Trustee shall deliver the excess to the Issuer immediately after
the expiration of the Offer Period for application in accordance with Section
4.06.
(e)
Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Issuer at the address
specified in the notice at least three Business Days prior to the purchase
date.
Holders shall be entitled to withdraw their election if the Trustee or the
Issuer receives not later than one Business Day prior to the Purchase Date,
a
telegram, telex, facsimile transmission or letter setting forth the name of
the
Holder, the principal amount of the Security which was delivered by the Holder
for purchase and a statement that such Holder is withdrawing his election to
have such Security purchased. If at the end of the Offer Period more Securities
(and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer
than the Issuer is required to purchase, selection of such Securities for
purchase shall be made by the Trustee in compliance with the requirements of
the
principal national securities exchange, if any, on which such Securities are
listed, or if such Securities are not so listed, on a pro rata basis, by lot
or
by such other method as the Trustee shall deem fair and appropriate (and in
such
manner as complies with applicable legal requirements); provided that no
Securities of $2,000 or less shall be purchased in part. Selection of such
Pari
Passu Indebtedness shall be made pursuant to the terms of such Pari Passu
Indebtedness.
(f)
Notices
of an Asset Sale Offer shall be mailed by first class mail, postage prepaid,
at
least 30 but not more than 60 days before the purchase date to each Holder
of
Securities at such Holder’s registered address. If any Security is to be
purchased in part only,
any
notice of purchase that relates to such Security shall state the portion
of the
principal amount thereof that has been or is to be purchased.
Section
4.07.
Transactions
with Affiliates
.
vi)
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction or
series of transactions, contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate of the Issuer (each of
the
foregoing, an “Affiliate Transaction”) involving aggregate consideration in
excess of $10.0 million, unless:
(i)
such
Affiliate Transaction is on terms that are not materially less favorable to
the
Issuer or the relevant Restricted Subsidiary than those that could have been
obtained in a comparable transaction by the Issuer or such Restricted Subsidiary
with an unrelated Person; and
(ii)
with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $25.0 million, the Issuer
delivers to the Trustee a resolution adopted in good faith by the majority
of
the Board of Directors of the Issuer, approving such Affiliate Transaction
and
set forth in an Officers’ Certificate certifying that such Affiliate Transaction
complies with clause (i) above.
(b)
The
provisions of Section 4.07(a) shall not apply to the following:
(i)
(A)
transactions between or among the Issuer and/or any of its Restricted
Subsidiaries and (B) any merger of the Issuer and any direct parent of the
Issuer; provided that such parent shall have no material liabilities and no
material assets other than cash, Cash Equivalents and the Capital Stock of
the
Issuer and such merger is otherwise in compliance with the terms of this
Indenture and effected for a bona fide business purpose;
(ii)
Restricted
Payments permitted by Section 4.04 and Permitted Investments;
(iii)
(x) the
entering into of any agreement (and any amendment or modification of any such
agreement) to pay, and the payment of, annual management, consulting, monitoring
and advisory fees to the Sponsors in an aggregate amount in any fiscal year
not
to exceed the greater of (A) $3.0 million and (B) 1.25% of EBITDA of the Issuer
and its Restricted Subsidiaries for the immediately preceding fiscal year,
and
out-of-pocket expense reimbursement; provided, however, that any payment not
made in any fiscal year may be carried forward and paid in the following two
fiscal years and (y) the payment of the present value of all amounts payable
pursuant to any agreement described in clause (iii)(x) of Section 4.07(b) in
connection with the termination of such agreement; provided further that so
long
as GSMP constitutes the Required Holders, the payment of such fees shall not
be
permitted during the continuance of an Event of Default specified in clauses
(a), (b) or (f) of Section 6.01;
(iv)
the
payment of reasonable and customary fees and reimbursement of expenses paid
to,
and indemnity provided on behalf of, officers, directors, employees or
consultants of the Issuer or any Restricted Subsidiary or any direct or indirect
parent of the Issuer;
(v)
payments
by the Issuer or any of its Restricted Subsidiaries to the Sponsors made for
any
financial advisory, financing, underwriting or placement services or in respect
of other investment banking activities, including, without limitation, in
connection with acquisitions or divestitures, which payments are (x) made
pursuant to the agreements with the Sponsors described in the Offering
Memorandum or (y) approved by a majority of the Board of Directors of the Issuer
in good faith;
(vi)
transactions
in which the Issuer or any of its Restricted Subsidiaries, as the case may
be,
delivers to the Trustee a letter from an Independent Financial Advisor stating
that such transaction is fair to the Issuer or such Restricted Subsidiary from
a
financial point of view or meets the requirements of clause (i) of Section
4.07(a);
(vii)
payments
or loans (or cancellation of loans) to employees or consultants which are
approved by a majority of the Board of Directors of the Issuer in good
faith;
(viii)
any
agreement as in effect as of the Issue Date or any amendment thereto (so long
as
any such agreement together with all amendments thereto, taken as a whole,
is
not more disadvantageous to the Holders of the Securities in any material
respect than the original agreement as in effect on the Issue Date) or any
transaction contemplated thereby as determined in good faith by senior
management or the Board of Directors of the Issuer;
(ix)
the
existence of, or the performance by the Issuer or any of its Restricted
Subsidiaries of its obligations under the terms of, Acquisition Documents,
any
stockholders agreement (including any registration rights agreement or purchase
agreement related thereto) to which it is a party as of the Issue Date and
any
transaction, agreement or arrangement described in the Offering Memorandum
and,
in each case, any amendment thereto or similar transactions, agreements or
arrangements which it may enter into thereafter; provided, however, that the
existence of, or the performance by the Issuer or any of its Restricted
Subsidiaries of its obligations under, any future amendment to any such existing
transaction, agreement or arrangement or under any similar transaction,
agreement or arrangement entered into after the Issue Date shall only be
permitted by this clause (ix) to the extent that the terms of any such existing
transaction, agreement or arrangement together with all amendments thereto,
taken as a whole, or new transaction, agreement or arrangement are not otherwise
more disadvantageous to the Holders of the Securities in any material respect
than the original transaction, agreement or arrangement as in effect on the
Issue Date;
(x)
the
execution of the Transactions and the payment of all fees and expenses related
to the Transactions, including fees to the Sponsors, which are described in
the
Offering Memorandum or contemplated by the Acquisition Documents;
(xi)
(A)
transactions with customers, clients, suppliers or purchasers or sellers of
goods or services, or transactions otherwise relating to the purchase or sale
of
goods or services, in each case in the ordinary course of business and otherwise
in compliance with the terms of this Indenture, which are fair to the Issuer
and
its Restricted Subsidiaries in the reasonable determination of the Board of
Directors or the senior management of the Issuer, or are on terms at least
as
favorable as might reasonably have been obtained at such time from an
unaffiliated party or (B) transactions with joint ventures or Unrestricted
Subsidiaries entered into in the ordinary course of business;
(xii)
any
transaction effected as part of a Qualified Receivables Financing;
(xiii)
the
issuance of Equity Interests (other than Disqualified Stock) of the Issuer
to
any Person;
(xiv)
the
issuances of securities or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
option and stock ownership plans or similar employee benefit plans approved
by
the Board of Directors of the Issuer or any direct or indirect parent of the
Issuer or of a Restricted Subsidiary of the Issuer, as appropriate, in good
faith;
(xv)
the
entering into of any tax sharing agreement or arrangement and any payments
permitted by Section 4.04(b)(xii);
(xvi)
any
contribution to the capital of the Issuer;
(xvii)
transactions
permitted by, and complying with, Section 5.01;
(xviii)
transactions
between the Issuer or any of its Restricted Subsidiaries and any Person, a
director of which is also a director of the Issuer or any direct or indirect
parent of the Issuer; provided, however, that such director abstains from voting
as a director of the Issuer or such direct or indirect parent, as the case
may
be, on any matter involving such other Person;
(xix)
pledges
of Equity Interests of Unrestricted Subsidiaries;
(xx)
any
employment agreements entered into by the Issuer or any of its Restricted
Subsidiaries in the ordinary course of business; and
(xxi)
intercompany
transactions undertaken in good faith (as certified by a responsible financial
or accounting officer of the Issuer in an Officers’ Certificate) for the purpose
of improving the consolidated tax efficiency of the Issuer and its Subsidiaries
and not for the purpose of circumventing any covenant set forth in this
Indenture.
Section
4.08.
Change
of Control
.
vii)
Upon a
Change of Control, each Holder shall have the right to require the Issuer to
repurchase all or any part of such Holder’s Securities at a purchase price in
cash equal to 101% of the Current Accretion Amount thereof, plus accrued and
unpaid Cash Interest, if any, to the date of repurchase (subject to the right
of
the Holders of record on the relevant record date to receive interest due on
the
relevant interest payment date), in accordance with the terms contemplated
in
this Section 4.08; provided, however, that notwithstanding the occurrence of
a
Change of Control, the Issuer shall not be obligated to purchase any Securities
pursuant to this Section 4.08 in the event that it has exercised its right
to
redeem such Securities in accordance with Article 3 of this Indenture. In the
event that at the time of such Change of Control the terms of the Bank
Indebtedness or other Senior Indebtedness restrict or prohibit the repurchase
of
Securities pursuant to this Section 4.08, then prior to the mailing of the
notice to the Holders provided for in Section 4.08(b) but in any event within
30
days following any Change of Control, the Issuer shall (i) repay in full all
Bank Indebtedness and other Senior Indebtedness or, if doing so will allow
the
purchase of Securities, offer to repay in full all Bank Indebtedness and/or
such
other Senior Indebtedness, as the case may be, and repay the Bank Indebtedness
and/or such Senior Indebtedness of each lender who has accepted such offer,
or
(ii) obtain the requisite consent under the agreements governing the Bank
Indebtedness and such Senior Indebtedness to permit the repurchase of the
Securities as provided for in Section 4.08(b).
(b)
Within
30
days following any Change of Control, except to the extent that the Issuer
has
exercised its right to redeem the Securities in accordance with Article 3 of
this Indenture, the Issuer shall mail a notice (a “Change of Control Offer”) to
each Holder with a copy to the Trustee stating:
(i)
that
a
Change of Control has occurred and that such Holder has the right to require
the
Issuer to repurchase such Holder’s Securities at a repurchase price in cash
equal to 101% of the Current Accretion Amount thereof, plus accrued and unpaid
Cash Interest and Additional Interest, if any, to the date of repurchase
(subject to the right of the Holders of record on the relevant record date
to
receive interest on the relevant interest payment date);
(ii)
the
circumstances and relevant facts and financial information regarding such Change
of Control;
(iii)
the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed); and
(iv)
the
instructions determined by the Issuer, consistent with this Section 4.08, that
a
Holder must follow in order to have its Securities purchased.
(c)
Holders
electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Issuer at the address
specified in the notice at least three Business Days prior to the purchase
date.
The Holders shall be entitled to withdraw their election if the Trustee or
the
Issuer receives not later than one Business Day prior to the purchase date
a
telegram, telex, facsimile transmission or letter setting forth the name of
the
Holder, the principal amount of the Security which was delivered for
purchase
by the Holder and a statement that such Holder is withdrawing his election
to
have such Security purchased. Holders whose Securities are purchased only
in
part shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered.
(d)
On
the
purchase date, all Securities purchased by the Issuer under this Section shall
be delivered to the Trustee for cancellation, and the Issuer shall pay the
purchase price plus accrued and unpaid interest to the Holders entitled
thereto.
(e)
A
Change
of Control Offer may be made in advance of a Change of Control, and conditioned
upon such Change of Control, if a definitive agreement is in place for the
Change of Control at the time of making of the Change of Control
Offer.
(f)
Notwithstanding
the foregoing provisions of this Section, the Issuer shall not be required
to
make a Change of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in Section 4.08 applicable to a
Change of Control Offer made by the Issuer and purchases all Securities validly
tendered and not withdrawn under such Change of Control Offer.
(g)
Securities
repurchased by the Issuer pursuant to a Change of Control Offer will have the
status of Securities issued but not outstanding or will be retired and canceled
at the option of the Issuer. Securities purchased by a third party pursuant
to
the preceding clause (e) will have the status of Securities issued and
outstanding.
(h)
At
the
time the Issuer delivers Securities to the Trustee which are to be accepted
for
purchase, the Issuer shall also deliver an Officers’ Certificate stating that
such Securities are to be accepted by the Issuer pursuant to and in accordance
with the terms of this Section 4.08. A Security shall be deemed to have been
accepted for purchase at the time the Trustee, directly or through an agent,
mails or delivers payment therefor to the surrendering Holder.
(i)
Prior
to
any Change of Control Offer, the Issuer shall deliver to the Trustee an
Officers’ Certificate stating that all conditions precedent contained herein to
the right of the Issuer to make such offer have been complied with.
(j)
The
Issuer shall comply, to the extent applicable, with the requirements of Section
14(e) of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to this Section. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this Section 4.08, the Issuer shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
Section
4.09.
Compliance
Certificate
.
The
Issuer shall deliver to the Trustee within 120 days after the end of each fiscal
year of the Issuer, beginning with the fiscal year end on December 30, 2006,
an
Officers’ Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Issuer they would normally have
knowledge of any Default and whether or not the signers know of any Default
that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Issuer is taking or proposes to take
with respect thereto. The Issuer also shall comply with Section 314(a)(4) of
the
TIA.
Section
4.10.
Further
Instruments and Acts
.
Upon
request of the Trustee, the Issuer shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to
carry out more effectively the purpose of this Indenture.
Section
4.11.
Future
Guarantors
.
The
Issuer shall cause each Restricted Subsidiary that is a Domestic Subsidiary
(unless such Subsidiary is a Receivables Subsidiary) that
(i)
guarantees
any Indebtedness of the Issuer or any of its Restricted Subsidiaries,
or
(ii)
incurs
any Indebtedness or issues any shares of Disqualified Stock permitted to be
Incurred or issued pursuant to clauses (i) or (xii) of Section 4.03(b) or not
permitted to be Incurred by Section 4.03,
to
execute and deliver to the Trustee a supplemental indenture substantially in
the
form of Exhibit D pursuant to which such Subsidiary shall guarantee the Issuer’s
Obligations under the Securities and the Indenture.
Section
4.12.
Liens
.
The
Issuer shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, Incur or suffer to exist any Lien on any asset
or property of the Issuer or such Restricted Subsidiary securing Indebtedness
unless the Securities are equally and ratably secured with (or on a senior
basis
to, in the case of obligations subordinated in right of payment to the
Securities) the obligations so secured until such time as such obligations
are
no longer secured by a Lien. The preceding sentence shall not require the Issuer
or any Restricted Subsidiary of the Issuer to secure the Securities if the
Lien
consists of a Permitted Lien. Any Lien which is granted to secure the Securities
or such Guarantee under this Section 4.12 shall be automatically released and
discharged at the same time as the release of the Lien that gave rise to the
obligation to secure the Securities or such Guarantee under this Section
4.12.
Section
4.13.
Limitation
on Other Senior Subordinated Indebtedness
.
The
Issuer shall not, and shall not permit any Guarantor to, directly or indirectly,
Incur any Indebtedness (including Acquired Indebtedness) that is subordinate
in
right of payment to any Indebtedness of the Issuer or any Indebtedness of any
such Guarantor, as the case may be, unless such Indebtedness is
either:
(i)
pari
passu in right of payment with the Securities or such Guarantor’s Guarantee, as
the case may be, or
(ii)
subordinate
in right of payment to the Securities or such Guarantor’s Guarantee, as the case
may be.
In
addition, so long as GSMP constitutes the Required Holders, any Indebtedness
incurred under Section 4.03(a) or under clause (xii) of Section 4.03(b) shall
be
either (i) Secured
Indebtedness
in which the Liens rank on a parity with the Liens granted under the Secured
Bank Indebtedness or the Senior Notes or (ii) Pari Passu Indebtedness or
Subordinated Indebtedness.
Section
4.14.
Maintenance
of Office or Agency
.
viii)
The
Issuer shall maintain an office or agency (which may be an office of the Trustee
or an affiliate of the Trustee or Registrar) where Securities may be surrendered
for registration of transfer or for exchange and where notices and demands
to or
upon the Issuer in respect of the Securities and this Indenture may be served.
The Issuer shall give prompt written notice to the Trustee of the location,
and
any change in the location, of such office or agency. If at any time the Issuer
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 corporate trust office of
the
Trustee as set forth in Section 13.02.
(b)
The
Issuer may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve
the
Issuer of its obligation to maintain an office or agency for such purposes.
The
Issuer shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
(c)
The
Issuer hereby designates the corporate trust office of the Trustee or its Agent
as such office or agency of the Issuer in accordance with Section
2.04.
Section
4.15.
Suspension
of Certain Covenants
.
(a)
During
any period of time that: (i) the Securities have Investment Grade Ratings from
both Rating Agencies and (ii) no Default has occurred and is continuing
under this Indenture (the occurrence of the events described in the foregoing
clauses (i) and (ii) being collectively referred to as a “
Covenant
Suspension Event
”),
the
Covenant Parties and the Restricted Subsidiaries shall not be subject to Section
4.03 hereof, Section 4.04 hereof, Section 4.05 hereof, Section 4.06 hereof,
Section 4.07 hereof, Section 4.08 hereof, Section 4.11 hereof, Section 4.13
hereof and clause (4) of Section 5.01 hereof (the “
Suspended
Covenants
”).
(b)
In
the
event that the Covenant Parties and the Restricted Subsidiaries are not subject
to the Suspended Covenants under this Indenture for any period of time as a
result of the foregoing, and on any subsequent date (the “
Reversion
Date
”)
one or
both of the Rating Agencies withdraw their Investment Grade Rating or downgrade
the rating assigned to the Securities below an Investment Grade Rating then
the
Covenant Parties and the Restricted Subsidiaries shall thereafter again be
subject to the Suspended Covenants under this Indenture. The period of time
between the Covenant Suspension Event and the Reversion Date is referred to
herein as the “
Suspension
Period
”.
(c)
In
the
event that the Covenant Parties and the Restricted Subsidiaries are not subject
to the Suspended Covenants and the Issuer or any of its Affiliates enter into
an
agreement to effect a transaction that would result in a Change of Control
and
one or more of the Rating Agencies indicate that if consummated, such
transaction
(alone
or
together with any related recapitalization or refinancing transactions) would
cause such Rating Agency to withdraw its Investment Grade Rating or downgrade
the ratings assigned to the Securities below an Investment Grade Rating,
then
the Covenant Parties and the Restricted Subsidiaries shall thereafter again
be
subject the Suspended Covenants hereof with respect to future events, including,
without limitation, a proposed transaction described in this clause
(c).
(d)
On
the
Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred
Stock issued, during the Suspension Period will be classified as having been
Incurred or issued pursuant to Section 4.05(a) or Section 4.05(b) (to the extent
such Indebtedness or Disqualified Stock or Preferred Stock would be permitted
to
be Incurred or issued thereunder as of the Reversion Date and after giving
effect to Indebtedness Incurred or issued prior to the Suspension Period and
outstanding on the Reversion Date). To the extent such Indebtedness or
Disqualified Stock or Preferred Stock would not be so permitted to be Incurred
or issued pursuant to Sections 4.05(a) or (b), such Indebtedness or Disqualified
Stock or Preferred Stock will be deemed to have been outstanding on the Issue
Date, so that it is classified as permitted under Section 4.05(b)(3).
Calculations made after the Reversion Date of the amount available to be made
as
Restricted Payments under Section 4.03 will be made as though Section 4.03
had
been in effect since the Issue Date and throughout the Suspension Period. For
the avoidance of doubt, Restricted Payments made during the Suspension Period
shall reduce the amount available to be made as Restricted Payments under
Section 4.03(a). No Default or Event of Default shall be deemed to have occurred
on the Reversion Date as a result of any actions taken by the Covenant Parties
or the Restricted Subsidiaries during the Suspension Period. For purposes of
Section 4.06, on the Reversion Date, the unutilized Excess Proceeds amount
shall
be reset to zero.
(e)
The
Issuers shall deliver promptly to the Trustee an Officer’s Certificate notifying
it of any occurrence of an event identified under this Section
4.15.
ARTICLE
5
SUCCESSOR
COMPANY
Section
5.01.
When
Issuer May Merge or Transfer Assets
.
(a) The
Issuer shall not, directly or indirectly, consolidate, amalgamate or merge
with
or into or wind up or convert into (whether or not the Issuer is the surviving
Person), or sell, assign, transfer, lease, convey or otherwise dispose of all
or
substantially all of its properties or assets in one or more related
transactions, to any Person unless:
(i)
the
Issuer is the surviving Person or the Person formed by or surviving any such
consolidation, amalgamation, merger, winding up or conversion (if other than
the
Issuer) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation, partnership or limited
liability company organized or existing under the laws of the United States,
any
state thereof, the District of Columbia, or any territory thereof (the Issuer
or
such Person, as the case may be, being herein called the “Successor Company”);
provided that in the case where the surviving Person is not a corporation,
a
co-obligor of the Securities is a corporation;
(ii)
the
Successor Company (if other than the Issuer) expressly assumes all the
obligations of the Issuer under this Indenture and the Securities pursuant
to
supplemental indentures or other documents or instruments in form reasonably
satisfactory to the Trustee;
(iii)
immediately
after giving effect to such transaction (and treating any Indebtedness which
becomes an obligation of the Successor Company or any of its Restricted
Subsidiaries as a result of such transaction as having been Incurred by the
Successor Company or such Restricted Subsidiary at the time of such transaction)
no Default or shall have occurred and be continuing;
(iv)
immediately
after giving pro forma effect to such transaction, as if such transaction had
occurred at the beginning of the applicable four-quarter period (and treating
any Indebtedness which becomes an obligation of the Successor Company or any
of
its Restricted Subsidiaries as a result of such transaction as having been
Incurred by the Successor Company or such Restricted Subsidiary at the time
of
such transaction), either
(A)
the
Successor Company would be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.03(a); or
(B)
the
Fixed
Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries
would be greater than such ratio for the Issuer and its Restricted Subsidiaries
immediately prior to such transaction;
(v)
each
Guarantor, unless it is the other party to the transactions described above,
shall have by supplemental indenture confirmed that its Guarantee shall apply
to
such Person’s obligations under this Indenture and the Securities;
and
(vi)
the
Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and
such supplemental indentures (if any) comply with this Indenture.
The
Successor Company (if other than the Issuer) shall succeed to, and be
substituted for, the Issuer under this Indenture and the Securities, and in
such
event the Issuer will automatically be released and discharged from its
obligations under this Indenture and the Securities. Notwithstanding the
foregoing clauses (iii) and (iv) of this Section 5.01, (a) any Restricted
Subsidiary may merge, consolidate or amalgamate with or transfer all or part
of
its properties and assets to the Issuer or to another Restricted Subsidiary,
and
(b) the Issuer may merge, consolidate or amalgamate with an Affiliate
incorporated solely for the purpose of reincorporating the Issuer in another
state of the United States, the District of Columbia or any territory of the
United States or may convert into a limited liability company, so long as the
amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not
increased thereby. This Article 5 will not apply to a sale, assignment,
transfer, conveyance or other disposition of assets between or among the Issuer
and its Restricted Subsidiaries.
(b)
Subject
to the provisions of Section 11.02(b) (which govern the release of a Guarantee
upon the sale or disposition of a Restricted Subsidiary of the Issuer that
is a
Guarantor), no Guarantor shall, and the Issuer shall not permit any Guarantor
to, consolidate, amalgamate or merge with or into or wind up into (whether
or
not such Guarantor is the surviving Person), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, any Person (other than any such
sale, assignment, transfer, lease, conveyance or disposition in connection
with
the Transactions described in the Offering Memorandum) unless:
(i)
either
(A) such Guarantor is the surviving Person or the Person formed by or surviving
any such consolidation, amalgamation or merger (if other than such Guarantor)
or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation, partnership or limited liability company
organized or existing under the laws of the United States, any state thereof,
the District of Columbia, or any territory thereof (such Guarantor or such
Person, as the case may be, being herein called the “Successor Guarantor”) and
the Successor Guarantor (if other than such Guarantor) expressly assumes all
the
obligations of such Guarantor under this Indenture and, if applicable, such
Guarantors’ Guarantee pursuant to a supplemental indenture or other documents or
instruments in form reasonably satisfactory to the Trustee, or (b) such sale
or
disposition or consolidation, amalgamation or merger is not in violation of
Section 4.06; and
(ii)
the
Successor Guarantor (if other than such Guarantor) shall have delivered or
caused to be delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, amalgamation, merger or transfer
and such supplemental indenture (if any) comply with this
Indenture.
Except
as
otherwise provided in this Indenture, the Successor Guarantor (if other than
such Guarantor) will succeed to, and be substituted for, such Guarantor under
this Indenture and such Guarantor’s Guarantee, and such Guarantor will
automatically be released and discharged from its obligations under this
Indenture and such Guarantor’s Guarantee. Notwithstanding the foregoing, (1) a
Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated
solely for the purpose of reincorporating such Guarantor in another state of
the
United States, the District of Columbia or any territory of the United States
so
long as the amount of Indebtedness of the Guarantor is not increased thereby
and
(2) a Guarantor may merge, amalgamate or consolidate with another Guarantor
or
the Issuer.
In
addition, notwithstanding the foregoing, any Guarantor may consolidate,
amalgamate or merge with or into or wind up into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets (collectively, a “Transfer”) to, (x) the Issuer or any Guarantor or
(y) any Restricted Subsidiary of the Issuer that is not a Guarantor; provided
that at the time of each such Transfer pursuant to clause (y) the aggregate
amount of all such Transfers since the Issue Date shall not exceed 5.0% of
the
consolidated assets of the Issuer and the Guarantors as shown on the most recent
available balance sheet of the Issuer and the Restricted Subsidiaries after
giving effect to each such Transfer and including all Transfers occurring from
and after the Issue Date (excluding Transfers in connection with the
Transactions described in the Offering Memorandum).
Upon
consummation of the Transactions, the Issuer shall execute and deliver to the
Trustee a supplemental indenture of the type referred to in Section 5.01(ii),
whereupon the Issuer shall be the Successor Company and shall succeed to, and
be
substituted for, and may exercise every right and power of, Merger Sub under
this Indenture. Notwithstanding anything above to the contrary, the merger
of
Merger Sub with and into the Company on the Issue Date as described in the
Merger Agreement shall be permitted under this Indenture.
ARTICLE
6
DEFAULTS
AND REMEDIES
Section
6.01.
Events
of Default
.
An
“Event of Default” occurs if:
(a)
there
is
a default in any payment of interest (including any additional interest) on
any
Security when the same becomes due and payable, whether or not such payment
shall be prohibited by Article 10, and such default continues for a period
of 30
days,
(b)
there
is
a default in the payment of principal or premium, if any, of any Security when
due at its Stated Maturity, upon optional redemption, upon required repurchase,
upon declaration or otherwise, whether or not such payment shall be prohibited
by Article 10,
(c)
the
Issuer or any of the Restricted Subsidiaries of the Issuer fails to comply
with
its obligations under Section 5.01,
(d)
the
Issuer or any of the Restricted Subsidiaries of the Issuer fails to comply
with
any of its agreements in the Securities or this Indenture (other than those
referred to in clause (a), (b) or (c) above) and such failure continues for
60
days (or 30 days, so long as GSMP constitutes the Required Holders) after the
notice specified below,
(e)
(x)
so
long as GSMP constitutes the Required Holders, the occurrence of any default
or
event of default under any Pari Passu Indebtedness or Subordinated Indebtedness
of the Issuer or any Significant Subsidiary or (y) the Issuer or any Significant
Subsidiary fails to pay any other Indebtedness (other than Indebtedness owing
to
the Issuer or a Restricted Subsidiary of the Issuer) within any applicable
grace
period after final maturity or the acceleration of any such Indebtedness by
the
holders thereof because of a default, in each case of the foregoing clauses
(x)
or (y), if the total amount of such Indebtedness as to which a default or event
of default has occurred or that is unpaid or accelerated exceeds $25.0 million
or its foreign currency equivalent,
(f)
the
Issuer or any Significant Subsidiary of the Issuer pursuant to or within the
meaning of any Bankruptcy Law:
(i)
commences
a voluntary case;
(ii)
consents
to the entry of an order for relief against it in an involuntary
case;
(iii)
consents
to the appointment of a Custodian of it or for any substantial part of its
property; or
(iv)
makes
a
general assignment for the benefit of its creditors or takes any comparable
action under any foreign laws relating to insolvency,
(g)
a
court
of competent jurisdiction enters an order or decree under any Bankruptcy Law
that:
(i)
is
for
relief against the Issuer or any Significant Subsidiary of the Issuer in an
involuntary case;
(ii)
appoints
a Custodian of the Issuer or any Significant Subsidiary of the Issuer or for
any
substantial part of its property; or
(iii)
orders
the winding up or liquidation of the Issuer or any Significant Subsidiary of
the
Issuer;
or
any
similar relief is granted under any foreign laws and the order or decree remains
unstayed and in effect for 60 days,
(h)
the
Issuer or any Significant Subsidiary fails to pay final judgments aggregating
in
excess of $25.0 million or its foreign currency equivalent (net of any amounts
which are covered by enforceable insurance policies issued by solvent carriers),
which judgments are not discharged, waived or stayed for a period of 60 days
following the entry thereof, or
(i)
any
Guarantee of a Significant Subsidiary ceases to be in full force and effect
(except as contemplated by the terms thereof) or any Guarantor denies or
disaffirms its obligations under this Indenture or any Guarantee and such
Default continues for 10 days after the notice specified below, or
(j)
for
so
long as GSMP constituted the Required Holders, the failure of the
representations and warranties contained in the Note Purchase Agreement to
be
true and correct on the Issue Date in all material respects.
The
foregoing shall constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected
by
operation of law or pursuant to any judgment, decree or order of any court
or
any order, rule or regulation of any administrative or governmental
body.
The
term
“Bankruptcy Law” means Title 11, United States Code, or any similar Federal or
state law for the relief of debtors. The term “Custodian” means any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A
Default
under clause (d) above shall not constitute an Event of Default until the
Trustee notifies the Issuer or the Holders of at least 25% in principal amount
of the outstanding Securities notify the Issuer and the Trustee of the Default
and the Issuer does not cure such
Default
within the time specified in clause (d) above after receipt of such notice.
Such
notice must specify the Default, demand that it be remedied and state that
such
notice is a “Notice of Default.” The Issuer shall deliver to the Trustee, within
five (5) Business Days after the occurrence thereof, written notice in the
form
of an Officers’ Certificate of any event which is, or with the giving of notice
or the lapse of time or both would become, an Event of Default, its status
and
what action the Issuer is taking or proposes to take with respect
thereto.
Section
6.02.
Acceleration
.
If an
Event of Default (other than an Event of Default specified in Section 6.01(f)
or
(g) with respect to the Issuer) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of outstanding Securities, by notice
to the Issuer may declare that the principal of, premium, if any, and accrued
but unpaid interest on all the Securities is due and payable; provided, however,
that so long as any Bank Indebtedness remains outstanding, no such acceleration
shall be effective until the earlier of (i) five (5) Business Days after the
giving of written notice to the Issuer and the Representative under the Credit
Agreement and (ii) the day on which any Bank Indebtedness is accelerated. Upon
such a declaration, such principal and interest shall be due and payable
immediately. If an Event of Default specified in Section 6.01(f) or (g) with
respect to the Issuer occurs, the principal of, premium, if any, and interest
on
all the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.
The Holders of a majority in principal amount of the Securities by notice to
the
Trustee may rescind an acceleration and its consequences.
In
the
event of any Event of Default specified in Section 6.01(e), such Event of
Default and all consequences thereof (excluding, however, any resulting payment
default) shall be annulled, waived and rescinded, automatically and without
any
action by the Trustee or the Holders of the Securities, if within 20 days after
such Event of Default arose the Issuer delivers an Officers’ Certificate to the
Trustee stating that (x) the Indebtedness or guarantee that is the basis for
such Event of Default has been discharged or (y) the holders thereof have
rescinded or waived the acceleration, notice or action (as the case may be)
giving rise to such Event of Default or (z) the default that is the basis for
such Event of Default has been cured, it being understood that in no event
shall
an acceleration of the principal amount of the Securities as described above
be
annulled, waived or rescinded upon the happening of any such
events.
Section
6.03.
Other
Remedies
.
If an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy at law or in equity to collect the payment of principal of or interest
on
the Securities or to enforce the performance of any provision of the Securities
or this Indenture.
The
Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder 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. To the extent required by law, all available remedies are
cumulative.
Section
6.04.
Waiver
of Past Defaults
.
Provided the Securities are not then due and payable by reason of a declaration
of acceleration, the Holders of a majority in
principal
amount of the Securities by written notice to the Trustee may waive an existing
Default and its consequences except (a) a Default in the payment of the
principal of or interest on a Security, (b) a Default arising from the failure
to redeem or purchase any Security when required pursuant to the terms of
this
Indenture or (c) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Holder affected. When a Default
is
waived, it is deemed cured and the Issuer, the Trustee and the Holders will
be
restored to their former positions and rights under this Indenture, but no
such
waiver shall extend to any subsequent or other Default or impair any consequent
right.
Section
6.05.
Control
by Majority
.
The
Holders of a majority in principal amount of the Securities may direct the
time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 7.01, that the Trustee determines is unduly
prejudicial to the rights of any other Holder or that would involve the Trustee
in personal liability. Prior to taking any action under this Indenture, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.
Section
6.06.
Limitation
on Suits
.
ix)
Except
to enforce the right to receive payment of principal, premium (if any) or
interest when due, no Holder may pursue any remedy with respect to this
Indenture or the Securities unless:
(i)
the
Holder gives to the Trustee written notice stating that an Event of Default
is
continuing;
(ii)
the
Holders of at least 25% in principal amount of the Securities make a written
request to the Trustee to pursue the remedy;
(iii)
such
Holder or Holders offer to the Trustee reasonable security or indemnity
satisfactory to it against any loss, liability or expense;
(iv)
the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and
(v)
the
Holders of a majority in principal amount of the Securities do not give the
Trustee a direction inconsistent with the request during such 60-day
period.
(b)
A
Holder
may not use this Indenture to prejudice the rights of another Holder or to
obtain a preference or priority over another Holder.
Section
6.07.
Rights
of the Holders to Receive Payment
.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed or provided for in the
Securities, 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 specified in Section 6.01(a) or (b) occurs and is continuing,
the Trustee may recover judgment in
its
own
name and as trustee of an express trust against the Issuer or any other obligor
on the Securities for the whole amount then due and owing (together with
interest on overdue principal and (to the extent lawful) on any unpaid interest
at the rate provided for in the Securities) and the amounts provided for
in
Section 7.07.
Section
6.09.
Trustee
May File Proofs of Claim
.
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 reasonable compensation, expenses disbursements and advances of the
Trustee (including counsel, accountants, experts or such other professionals
as
the Trustee deems necessary, advisable or appropriate)) and the Holders allowed
in any judicial proceedings relative to the Issuer or any Guarantor, their
creditors or their property, shall be entitled to participate as a member,
voting or otherwise, of any official committee of creditors appointed in such
matters and, unless prohibited by law or applicable regulations, may vote on
behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make 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 it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section
7.07.
Section
6.10.
Priorities
.
If the
Trustee collects any money or property pursuant to this Article 6, it shall
pay
out the money or property in the following order:
FIRST:
to
the Trustee for amounts due under Section 7.07;
SECOND:
to holders of Senior Indebtedness of the Issuer to the extent required by
Article 10 and to holders of Senior Indebtedness of the Guarantors to the extent
required by Article 12;
THIRD:
to
the Holders for amounts due and unpaid on the Securities for principal, premium,
if any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
FOURTH:
to the Issuer.
The
Trustee may fix a record date and payment date for any payment to the Holders
pursuant to this Section. At least 15 days before such record date, the Trustee
shall mail to each Holder and the Issuer a notice that states the record date,
the payment date and amount to be paid.
Section
6.11.
Undertaking
for Costs
.
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 and expenses,
against any party litigant in the suit, having due regard to the merits and
good
faith of the claims or defenses made by the party litigant.
This
Section does not apply to a suit by the Trustee, a suit by a Holder pursuant
to
Section 6.07 or a suit by Holders of more than 10% in principal amount of
the
Securities.
Section
6.12.
Waiver
of Stay or Extension Laws
.
Neither
the Issuer nor any Guarantor (to the extent it may lawfully do so) shall at
any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or
at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Issuer and each Guarantor (to the extent that it
may
lawfully do so) hereby expressly waive all benefit or advantage of any such
law,
and shall not hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power
as
though no such law had been enacted.
ARTICLE
7
TRUSTEE
Section
7.01.
Duties
of Trustee
.
x)
If an
Event of Default has occurred and is continuing, the Trustee shall exercise
the
rights and powers vested in it by this Indenture and use the same degree of
care
and skill in their exercise as a prudent person would exercise or use under
the
circumstances in the conduct of such person’s own affairs.
(b)
Except
during the continuance of an Event of Default:
(i)
the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee (it being agreed that
the
permissive right of the Trustee to do things enumerated in this Indenture shall
not be construed as a duty); and
(ii)
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 or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee shall be under no duty to make
any
investigation as to any statement contained in any such instance, but may accept
the same as conclusive evidence of the truth and accuracy of such statement
or
the correctness of such opinions. However, in the case of certificates or
opinions required by any provision hereof to be provided to it, the Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c)
The
Trustee may not be relieved from liability for its own grossly negligent action,
its own grossly negligent failure to act or its own willful misconduct, except
that:
(i)
this
paragraph does not limit the effect of paragraph (b) of this
Section;
(ii)
the
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;
(iii)
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
6.05; and
(iv)
no
provision of this Indenture shall require the Trustee to expend or risk its
own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers.
(d)
Every
provision of this Indenture that in any way relates to the Trustee is subject
to
paragraphs (a), (b) and (c) of this Section.
(e)
The
Trustee shall not be liable for interest on any money received by it except
as
the Trustee may agree in writing with the Issuer.
(f)
Money
held in trust by the Trustee need not be segregated from other funds except
to
the extent required by law.
(g)
Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions
of
this Section and to the provisions of the TIA.
Section
7.02.
Rights
of Trustee
.
xi)
The
Trustee may conclusively rely on 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 require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers’ Certificate or Opinion of Counsel.
(c)
The
Trustee may act through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.
(d)
The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers;
provided, however, that the Trustee’s conduct does not constitute willful
misconduct or gross negligence.
(e)
The
Trustee may consult with counsel of its own selection and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect of any action taken, omitted or suffered by it hereunder
in
good faith and in accordance with the advice or opinion of such
counsel.
(f)
The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, note or other paper
or document unless requested in writing to do so by the Holders of not less
than
a majority in principal amount of the Securities at the time outstanding, 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
to
examine the books, records and premises of the Issuer, personally or by agent
or
attorney, at the expense of the Issuer and shall incur no liability of any
kind
by reason of such inquiry or investigation.
(g)
The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(h)
The
rights, privileges, protections, immunities and benefits given to the Trustee,
including its right to be indemnified, are extended to, and shall be enforceable
by, the Trustee in each of its capacities hereunder, and each agent, custodian
and other Person employed to act hereunder.
(i)
The
Trustee shall not be liable for any action taken or omitted by it in good faith
at the direction of the Holders of not less than a majority in principal amount
of the Securities as to the time, method and place of conducting any proceedings
for any remedy available to the Trustee or the exercising of any power conferred
by the Indenture.
(j)
Any
action taken, or omitted to be taken, by the Trustee in good faith pursuant
to
this Indenture upon the request or authority or consent of any person who,
at
the time of making such request or giving such authority or consent, is the
Holder of any Security shall be conclusive and binding upon future Holders
of
Securities and upon Securities executed and delivered in exchange therefor
or in
place thereof.
Section
7.03.
Individual
Rights of Trustee
.
The
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Issuer or its Affiliates with
the
same rights it would have if it were not Trustee. Any Paying Agent or Registrar
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
.
The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, any Guarantee or the Securities, it
shall not be accountable for the Issuer’s use of the proceeds from the
Securities, and it shall not be responsible for any statement of the Issuer
or
any Guarantor in this Indenture or in any document issued in connection with
the
sale of the Securities or in the Securities other than the Trustee’s certificate
of authentication. The Trustee shall not be charged with knowledge of any
Default or Event of Default under Sections 6.01(c), (d), (e), (h), or (i) or
of
the identity of any Significant Subsidiary unless either (a) a Trust Officer
shall have actual knowledge thereof or (b) the Trustee shall have received
written notice thereof in accordance with Section 13.02 hereof from the Issuer,
any
Guarantor or any Holder. In accepting the trust hereby created, the Trustee
acts
solely as Trustee for the Holders of the Securities and not in its individual
capacity and all persons, including without limitation the Holders of Securities
and the Issuer having any claim against the Trustee arising from this Indenture
shall look only to the funds and accounts held by the Trustee hereunder for
payment except as otherwise provided herein.
Section
7.05.
Notice
of Defaults
.
If a
Default occurs and is continuing and if it is actually known to the Trustee,
the
Trustee shall mail to each Holder notice of the Default within the earlier
of 90
days after it occurs or 30 days after it is actually known to a Trust Officer
or
written notice of it is received by the Trustee. Except in the case of a Default
in the payment of principal of, premium (if any) or interest on any Security,
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of the Holders.
Section
7.06.
Reports
by Trustee to the Holders
.
As
promptly as practicable after each June 30 beginning with the June 30 following
the date of this Indenture, and in any event prior to June 30 in each year,
the
Trustee shall mail to each Holder a brief report dated as of such June 30 that
complies with Section 313(a) of the TIA if and to the extent required thereby.
The Trustee shall also comply with Section 313(b) of the TIA.
A
copy of
each report at the time of its mailing to the Holders shall be filed with the
SEC and each stock exchange (if any) on which the Securities are listed. The
Issuer agrees to notify promptly the Trustee whenever the Securities become
listed on any stock exchange and of any delisting thereof.
Section
7.07.
Compensation
and Indemnity
.
The
Issuer shall pay to the Trustee from time to time reasonable compensation for
its services. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or
made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee’s agents, counsel, accountants and
experts. The Issuer and each Guarantor, jointly and severally shall indemnify
the Trustee against any and all loss, liability, claim, damage or expense
(including reasonable attorneys’ fees and expenses) incurred by or in connection
with the acceptance or administration of this trust and the performance of
its
duties hereunder, including the costs and expenses of enforcing this Indenture
or Guarantee against the Issuer or a Guarantor (including this Section 7.07)
and
defending itself against or investigating any claim (whether asserted by the
Issuer, any Guarantor, any Holder or any other Person). The obligation to pay
such amounts shall survive the payment in full or defeasance of the Securities
or the removal or resignation of the Trustee. The Trustee shall notify the
Issuer of any claim for which it may seek indemnity promptly upon obtaining
actual knowledge thereof; provided, however, that any failure so to notify
the
Issuer shall not relieve the Issuer or any Guarantor of its indemnity
obligations hereunder. The Issuer shall defend the claim and the indemnified
party shall provide reasonable cooperation at the Issuer’s expense in the
defense. Such indemnified parties may have separate counsel and the Issuer
and
the Guarantors, as applicable shall pay the fees and expenses of such counsel;
provided, however, that the Issuer shall not be required to pay such fees and
expenses if it assumes such indemnified parties’ defense and, in such
indemnified parties’ reasonable judgment, there is no conflict of interest
between the Issuer and the Guarantors, as applicable, and such parties in
connection with such defense. The Issuer need not reimburse any expense or
indemnify against any loss, liability or expense incurred by an indemnified
party through such party’s own willful misconduct, negligence or bad
faith.
To
secure
the Issuer’s and the Guarantors’ payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property
held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The
Issuer’s and the Guarantors’ payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. Without prejudice to any other rights available to
the
Trustee under applicable law, when the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(f) or (g) with respect to
the
Issuer, the expenses are intended to constitute expenses of administration
under
the Bankruptcy Law.
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
repayment of such funds or adequate indemnity against such risk or liability
is
not assured to its satisfaction.
Section
7.08.
Replacement
of Trustee
.
xii)
The
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee. The Issuer shall
remove the Trustee if:
(i)
the
Trustee fails to comply with Section 7.10;
(ii)
the
Trustee is adjudged bankrupt or insolvent;
(iii)
a
receiver or other public officer takes charge of the Trustee or its property;
or
(iv)
the
Trustee otherwise becomes incapable of acting.
(b)
If
the
Trustee resigns, is removed by the Issuer or by the Holders of a majority in
principal amount of the Securities and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the office of Trustee
for
any reason (the Trustee in such event being referred to herein as the retiring
Trustee), the Issuer shall promptly appoint a successor Trustee.
(c)
A
successor Trustee shall deliver a written acceptance of its appointment to
the
retiring Trustee and to the Issuer. Thereupon 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. The
successor Trustee shall
mail
a
notice of its succession to the Holders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject
to
the Lien provided for in Section 7.07.
(d)
If
a
successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee or the Holders of 10% in principal
amount of the Securities may petition at the expense of the Issuer any court
of
competent jurisdiction for the appointment of a successor Trustee.
(e)
If
the
Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign
is stayed as provided in Section 310(b) of the TIA, any Holder who has been
a
bona fide holder of a Security for at least six months may petition any court
of
competent jurisdiction for the removal of the Trustee and the appointment of
a
successor Trustee.
(f)
Notwithstanding
the replacement of the Trustee pursuant to this Section, the Issuer’s
obligations under Section 7.07 shall continue for the benefit of the retiring
Trustee.
Section
7.09.
Successor
Trustee by Merger
.
If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
In
case
at the time such successor or successors by merger, conversion or consolidation
to the Trustee shall succeed to the trusts created by this Indenture any of
the
Securities shall have been authenticated but not delivered, any such successor
to the Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Securities so authenticated; and in case at that
time
any of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the
Securities or in this Indenture provided that the certificate of the Trustee
shall have.
Section
7.10.
Eligibility;
Disqualification
.
The
Trustee shall at all times satisfy the requirements of Section 310(a) of the
TIA. The Trustee shall have a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
The Trustee shall comply with Section 310(b) of the TIA, subject to its right
to
apply for a stay of its duty to resign under the penultimate paragraph of
Section 310(b) of the TIA; provided, however, that there shall be excluded
from
the operation of Section 310(b)(1) of the TIA any series of securities issued
under this Indenture and any indenture or indentures under which other
securities or certificates of interest or participation in other securities
of
the Issuer are outstanding if the requirements for such exclusion set forth
in
Section 310(b)(1) of the TIA are met.
Section
7.11.
Preferential
Collection of Claims Against the Issuer
.
The
Trustee shall comply with Section 311(a) of the TIA, excluding any creditor
relationship listed in Section 311(b) of the TIA. A Trustee who has resigned
or
been removed shall be subject to Section 311(a) of the TIA to the extent
indicated.
A
RTICLE
8
DISCHARGE
OF INDENTURE; DEFEASANCE
Section
8.01.
Discharge
of Liability on Securities; Defeasance
.
This
Indenture shall be discharged and shall cease to be of further effect (except
as
to surviving rights of registration of transfer or exchange of Securities,
as
expressly provided for in this Indenture) as to all outstanding Securities
when:
(a)
either
(i) all the Securities theretofore authenticated and delivered (other than
Securities pursuant to Section 2.08 which have been replaced or paid and
Securities for whose payment money has theretofore been deposited in trust
or
segregated and held in trust by the Issuer and thereafter repaid to the Issuer
or discharged from such trust) have been delivered to the Trustee for
cancellation or (ii) all of the Securities (a) have become due and payable,
(b)
will become due and payable at their stated maturity within one year or (c)
if
redeemable at the option of the Issuer, 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 Issuer,
and
the Issuer has irrevocably deposited or caused to be deposited with the Trustee
cash in U.S. Dollars, U.S. Government Obligations or a combination thereof
in an
amount sufficient in the written opinion of a firm of independent public
accountants delivered to the Trustee (which delivery shall only be required
if
U.S. Government Obligations have been so deposited) to pay and discharge the
entire Indebtedness on the Securities not theretofore delivered to the Trustee
for cancellation, for principal of, premium, if any, and interest on the
Securities to the date of deposit together with irrevocable instructions from
the Issuer directing the Trustee to apply such funds to the payment thereof
at
maturity or redemption, as the case may be;
(b)
the
Issuer and/or the Guarantors have paid all other sums payable under this
Indenture; and
(c)
the
Issuer 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.
Subject
to Sections 8.01(c) and 8.02, the Issuer at any time may terminate (i) all
of
its obligations under the Securities and this Indenture (with respect to such
Securities) (“legal defeasance option”) or (ii) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11, 4.12 and 4.13 and the
operation of Section 5.01 and Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f) (with
respect to Significant Subsidiaries of the Issuer only), 6.01(g) (with respect
to Significant Subsidiaries of the Issuer only), 6.01(h) and 6.01(i) (“covenant
defeasance option”). The Issuer may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. In the
event that the Issuer terminates all of its obligations under the Securities
and
this Indenture (with respect to such Securities) by exercising its legal
defeasance option or its covenant defeasance option, the obligations of each
Guarantor under its Guarantee of such Securities shall be terminated
simultaneously with the termination of such obligations.
If
the
Issuer exercises its legal defeasance option, payment of the Securities so
defeased may not be accelerated because of an Event of Default. If the Issuer
exercises its covenant defeasance option, payment of the Securities so defeased
may not be accelerated because of an Event of Default specified in Section
6.01(c), 6.01(d), 6.01(e), 6.01(f) (with respect to Significant Subsidiaries
of
the Issuer only), 6.01(g) (with respect to Significant Subsidiaries of the
Issuer only), 6.01(h) or 6.01(i) or because of the failure of the Issuer to
comply with Section 5.01.
Upon
satisfaction of the conditions set forth herein and upon request of the Issuer,
the Trustee shall acknowledge in writing the discharge of those obligations
that
the Issuer terminates.
(d)
Notwithstanding
clauses (a) and (b) above, the Issuer’s obligations in Sections 2.04, 2.05,
2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and in this Article 8 shall survive until
the
Securities have been paid in full. Thereafter, the Issuer’s obligations in
Sections 7.07, 8.05 and 8.06 shall survive such satisfaction and
discharge.
Section
8.02.
Conditions
to Defeasance
.
xiii)
The
Issuer may exercise its legal defeasance option or its covenant defeasance
option only if:
(i)
the
Issuer irrevocably deposits in trust with the Trustee cash in U.S. Dollars,
U.S.
Government Obligations or a combination thereof in an amount sufficient or
U.S.
Government Obligations, the principal of and the interest on which will be
sufficient, or a combination thereof sufficient, to pay the principal of and
premium (if any) and interest on the Securities when due at maturity or
redemption, as the case may be, including interest thereon to maturity or such
redemption date;
(ii)
the
Issuer delivers to the Trustee a certificate from a nationally recognized firm
of independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the deposited U.S.
Government Obligations plus any deposited money without investment will provide
cash at such times and in such amounts as will be sufficient to pay principal,
premium, if any, and interest when due on all the Securities to maturity or
redemption, as the case may be;
(iii)
123
days
pass after the deposit is made and during the 123-day period no Default
specified in Section 6.01(f) or (g) with respect to the Issuer occurs which
is
continuing at the end of the period;
(iv)
the
deposit does not constitute a default under any other agreement binding on
the
Issuer and is not prohibited by Article 10;
(v)
in
the
case of the legal defeasance option, the Issuer shall have delivered to the
Trustee an Opinion of Counsel stating that (1) the Issuer has received from,
or
there has been published by, the Internal Revenue Service a ruling, or (2)
since
the date of this 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 deposit and
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 deposit and defeasance had not occurred;
(vi)
impair
the right of any holder to receive payment of principal of, premium, if any,
and
interest on such holder’s Securities on or after the due dates therefore or to
institute suit for the enforcement of any payment on or with respect to such
holder’s Securities;
(vii)
in
the
case of the covenant defeasance option, the Issuer shall have delivered to
the
Trustee an Opinion of Counsel to the effect that the Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit
and 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
deposit and defeasance had not occurred; and
(viii)
the
Issuer delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and
discharge of the Securities to be so defeased and discharged as contemplated
by
this Article 8 have been complied with.
(b)
Before
or
after a deposit, the Issuer may make arrangements satisfactory to the Trustee
for the redemption of such Securities at a future date in accordance with
Article 3.
Section
8.03.
Application
of Trust Money
.
The
Trustee shall hold in trust money or U.S. Government Obligations (including
proceeds thereof) deposited with it pursuant to this Article 8. It shall apply
the deposited money and the money from U.S. Government Obligations through
each
Paying Agent and in accordance with this Indenture to the payment of principal
of and interest on the Securities so discharged or defeased. Money and
securities so held in trust are not subject to Articles 10 or 12.
Section
8.04.
Repayment
to Issuer
.
Each of
the Trustee and each Paying Agent shall promptly turn over to the Issuer upon
request any money or U.S. Government Obligations held by it as provided in
this
Article which, in the written opinion of nationally recognized firm of
independent public accountants delivered to the Trustee (which delivery shall
only be required if U.S. Government Obligations have been so deposited), are
in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent discharge or defeasance in accordance with this
Article.
Subject
to any applicable abandoned property law, the Trustee and each Paying Agent
shall pay to the Issuer upon written request any money held by them for the
payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Issuer for payment
as
general creditors, and the Trustee and each Paying Agent shall have no further
liability with respect to such monies.
Section
8.05.
Indemnity
for U.S. Government Obligations
.
The
Issuer shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations
or
the principal and interest received on such U.S. Government
Obligations.
Section
8.06.
Reinstatement
.
If the
Trustee or any Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with this Article 8 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 Issuer’s
obligations under this Indenture and the Securities so discharged or defeased
shall be revived and reinstated as though no deposit had occurred pursuant
to
this Article 8 until such time as the Trustee or any Paying Agent is permitted
to apply all such money or U.S. Government Obligations in accordance with this
Article 8; provided, however, that, if the Issuer has made any payment of
principal of or interest on, any such Securities because of the reinstatement
of
its obligations, the Issuer shall be subrogated to the rights of the Holders
of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or any Paying Agent.
ARTICLE
9
AMENDMENTS
AND WAIVERS
Section
9.01.
Without
Consent of the Holders
.
xiv)
The
Issuer and the Trustee may amend this Indenture or the Securities without notice
to or consent of any Holder:
(i)
to
cure
any ambiguity, omission, defect or inconsistency;
(ii)
to
provide for the assumption by a Successor Company of the obligations of the
Issuer under this Indenture and the Securities;
(iii)
to
provide for the assumption by a Successor Guarantor of the obligations of a
Guarantor under this Indenture and its Guarantee;
(iv)
to
comply
with Article 5;
(v)
to
provide for uncertificated Securities in addition to or in place of certificated
Securities; provided, however, that the uncertificated Securities are issued
in
registered form for purposes of Section 163(f) of the Code or in a manner such
that the uncertificated Securities are described in Section 163(f)(2)(B) of
the
Code;
(vi)
to
make
any change in Article 10 or Article 12 that would limit or terminate the
benefits available to any holder of Senior Indebtedness of the Issuer or a
Guarantor (or Representatives thereof) under Article 10 or Article 12,
respectively;
(vii)
to
add
additional Guarantees with respect to the Securities or to secure the
Securities;
(viii)
to
add to
the covenants of the Issuer for the benefit of the Holders or to surrender
any
right or power herein conferred upon the Issuer;
(ix)
to
comply
with any requirement of the SEC in connection with qualifying or maintaining
the
qualification of, this Indenture under the TIA;
(x)
to
make
any change that does not adversely affect the rights of any Holder;
or
(xi)
to
provide for the issuance of the Exchange Securities or Additional Securities,
which shall have terms substantially identical in all material respects to
the
Initial Securities, and which shall be treated, together with any outstanding
Initial Securities, as a single issue of securities.
(b)
An
amendment under this Section 9.01 may not make any change that adversely affects
the rights under Article 10 or Article 12 of any holder of Senior Indebtedness
of the Issuer or a Guarantor then outstanding unless the holders of such Senior
Indebtedness (or any group or Representative thereof authorized to give a
consent) consent to such change.
After
an
amendment under this Section 9.01 becomes effective, the Issuer shall mail
to
the Holders a notice briefly describing such amendment. The failure to give
such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.01.
Section
9.02.
With
Consent of the Holders
.
xv)
The
Issuer and the Trustee may amend this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of
the
Securities then outstanding voting as a single class (including consents
obtained in connection with a tender offer or exchange for the Securities).
However, without the consent of each Holder of an outstanding Security affected,
an amendment may not:
(i)
reduce
the amount of Securities whose Holders must consent to an
amendment,
(ii)
reduce
the rate of or extend the time for payment of interest on any
Security,
(iii)
reduce
the principal of or change the Stated Maturity of any Security,
(iv)
reduce
the premium payable upon the redemption of any Security or change the time
at
which any Security may be redeemed in accordance with Article 3,
(v)
make
any
Security payable in money other than that stated in such Security,
(vi)
make
any
change in Article 10 or Article 12 that adversely affects the rights of any
Holder under Article 10 or Article 12,
(vii)
impair
the right of any Holder to receive payment of principal of or premium, if any,
and interest on such Holder’s Securities on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with respect to
such
Holder’s Securities,
(viii)
make
any
change in Section 6.04 or 6.07 or the second sentence of this Section 9.02,
or
(ix)
modify
any Guarantees in any manner adverse to the Holders.
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, but it shall be
sufficient if such consent approves the substance thereof.
An
amendment under this Section 9.02 may not make any change that adversely affects
the rights under Article 10 or Article 12 of any holder of Senior Indebtedness
then outstanding unless the holders of such Senior Indebtedness (or any group
or
Representative thereof authorized to give a consent) consent to such
change.
After
an
amendment under this Section 9.02 becomes effective, the Issuer shall mail
to
the Holders a notice briefly describing such amendment. The failure to give
such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.02.
Section
9.03.
Compliance
with Trust Indenture Act
.
From
the date on which this Indenture is qualified under the TIA, every amendment,
waiver or supplement to this Indenture or the Securities shall comply with
the
TIA as then in effect.
Section
9.04.
Revocation
and Effect of Consents and Waivers
.
xvi)
A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder’s Security, even if
notation of the consent or waiver is not made on the Security. However, any
such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s
Security or portion of the Security if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers’
Certificate from the Issuer certifying that the requisite principal amount
of
Securities have consented. After an amendment or waiver becomes effective,
it
shall bind every Holder. An amendment or waiver becomes effective upon the
(i)
receipt by the Issuer or the Trustee of consents by the Holders of the requisite
principal amount of securities, (ii) satisfaction of conditions to effectiveness
as set forth in this Indenture and any indenture supplemental hereto containing
such amendment or waiver and (iii) execution of such amendment or waiver (or
supplemental indenture) by the Issuer and the Trustee.
(b)
The
Issuer may, but shall not be obligated to, fix a record date for the purpose
of
determining the Holders entitled to give their consent or take any other action
described above or required or permitted to be taken pursuant to this Indenture.
If a record date is fixed, then notwithstanding 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 give such
consent or to revoke any consent previously given or to take any such action,
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.
Section
9.05.
Notation
on or Exchange of Securities
.
If an
amendment, supplement or waiver changes the terms of a Security, the Issuer
may
require the Holder of
the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer
in
exchange for the Security shall issue and the Trustee shall authenticate
a new
Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment, supplement or waiver.
Section
9.06.
Trustee
to Sign Amendments
.
The
Trustee shall sign any amendment, supplement or waiver authorized pursuant
to
this Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may but need
not sign it. In signing such amendment, the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and shall be provided with, and (subject
to Section 7.01) shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that such amendment, supplement
or
waiver is authorized or permitted by this Indenture and that such amendment,
supplement or waiver is the legal, valid and binding obligation of the Issuer
and the Guarantors, enforceable against them in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).
Section
9.07.
Payment
for Consent
.
Neither
the Issuer nor any Affiliate of the Issuer shall, directly or indirectly, pay
or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid to all Holders that so consent,
waive or agree to amend in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
Section
9.08.
Additional
Voting Terms; Calculation of Principal Amount
.
All
Securities issued under this Indenture shall vote and consent together on all
matters (as to which any of such Securities may vote) as one class and no series
of Securities will have the right to vote or consent as a separate class on
any
matter. Determinations as to whether Holders of the requisite aggregate
principal amount of Securities have concurred in any direction, waiver or
consent shall be made in accordance with this Article 9 and Section
2.14.
ARTICLE
10
SUBORDINATION
OF THE SECURITIES
Section
10.01.
Agreement
to Subordinate
.
The
Issuer agrees, and each Holder by accepting a Security agrees, that the
Indebtedness evidenced by the Securities is subordinated in right of payment,
to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all existing and future Senior Indebtedness of the Issuer and that
the subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Securities shall in all respects rank pari passu in
right of payment with all existing and future Pari Passu Indebtedness of the
Issuer and shall rank senior in right of payment to all existing and future
Subordinated Indebtedness of the Issuer; and only Indebtedness of an Issuer
that
is Senior Indebtedness of such Issuer shall rank senior to the Securities in
accordance with the provisions set forth herein. For purposes of this Article
10, the Indebtedness evidenced by the Securities shall be deemed to include
any
Additional Interest payable pursuant to the provisions set forth in the
Securities and the Registration Agreement. All provisions of this Article 10
shall be subject to Section 10.12.
Section
10.02.
Liquidation,
Dissolution, Bankruptcy
.
Upon
any payment or distribution of the assets of the Issuer to creditors upon a
total or partial liquidation or a total or partial dissolution of the Issuer
or
in a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Issuer or its property:
(a)
holders
of Senior Indebtedness of the Issuer shall be entitled to receive payment in
full in cash of such Senior Indebtedness (including interest accruing after,
or
which would accrue but for, the commencement of any such proceeding at the
rate
specified in the applicable Senior Indebtedness, whether or not a claim for
such
interest would be allowed) before Holders shall be entitled to receive any
payment of principal of or interest on the Securities; and
(b)
until
the
Senior Indebtedness of the Issuer is paid in full in cash, any payment or
distribution to which Holders would be entitled but for this Article 10 shall
be
made to holders of such Senior Indebtedness as their interests may appear,
except that the Holders may receive and retain (a) Permitted Junior Securities
and (b) payments made from the trust described under Article 8, so long as,
on
the date or dates the respective amounts were paid into the trust such payments
were made with respect to the Securities without violating this Article
10.
Section
10.03.
Default
on Designated Senior Indebtedness
.
The
Issuer may not pay principal of, premium (if any) or interest on, the Securities
or make any deposit pursuant to the provisions described under Section 8.01
and
may not otherwise purchase, redeem or otherwise retire any Securities (except
that the Holders may receive and retain (a) Permitted Junior Securities and
(b)
payments made from the trust described under Article 8) (collectively, “pay the
Securities”) if:
(1)
a
default
in the payment of the principal of, premium, if any, or interest on any
Designated Senior Indebtedness of the Issuer occurs and is continuing or any
other amount owing in respect of any Designated Senior Indebtedness of the
Issuer is not paid when due, or
(2)
any
other
default on Designated Senior Indebtedness of the Issuer occurs and the maturity
of such Designated Senior Indebtedness of the Issuer is accelerated in
accordance with its terms,
unless,
in either case, the default has been cured or waived and any such acceleration
has been rescinded or such Designated Senior Indebtedness has been paid in
full
in cash; provided, however, the Issuer may pay the Securities without regard
to
the foregoing if the Issuer and the Trustee receive written notice approving
such payment from the Representative of the holders of such Designated Senior
Indebtedness with respect to which either of the events set forth in clause
(1)
or (2) of this sentence has occurred and is continuing. During the continuance
of any default (other than a default described in clause (1) or (2) of the
preceding sentence) with respect to any Designated Senior Indebtedness of the
Issuer pursuant to which the maturity thereof may be accelerated immediately
without further notice (except such notice as may be required to effect
such
acceleration) or the expiration of any applicable grace periods, the Issuer
may
not pay the Securities for a period (a “Payment Blockage Period”) commencing
upon the receipt by the Trustee (with a copy to the Issuer) of written notice
(a
“Blockage Notice”) of such default from the Representative of the holders of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Issuer from the Person or Persons who gave such Blockage Notice; (ii) by
repayment in full in cash of such Designated Senior Indebtedness; or (iii)
because the default giving rise to such Blockage Notice is no longer
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section 10.03 and in Section 10.02), unless the holders
of such
Designated Senior Indebtedness or the Representative of such holders shall
have
accelerated the maturity of such Designated Senior Indebtedness or a payment
default exists, the Issuer may resume payments on the Securities after the
end
of such Payment Blockage Period. Not more than one Blockage Notice may be
given
in any consecutive 360-day period, irrespective of the number of defaults
with
respect to Designated Senior Indebtedness during such period. In no event,
however, may the total number of days during which any Payment Blockage Period
is in effect exceed 179 days in the aggregate during any 360 consecutive
day
period. For purposes of this Section 10.03, no default or event of default
that
existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis of the commencement
of a subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived for
a
period of not less than 90 consecutive days (it being understood 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 provision
of the Designated Senior Indebtedness under which an event of default previously
existed or was continuing shall constitute a new event of default for this
purpose).
Section
10.04.
Acceleration
of Payment of Securities
.
If
payment of the Securities is accelerated because of an Event of Default, the
Issuer or the Trustee (provided that the Trustee shall have received written
notice from the Issuer, on which notice the Trustee shall be entitled to
conclusively rely) shall promptly notify the holders of the Designated Senior
Indebtedness of the Issuer (or their Representative) of the
acceleration.
Section
10.05.
When
Distribution Must Be Paid Over
.
If a
distribution is made to the Holders that because of this Article 10 should
not
have been made to them, the Holders who receive the distribution shall hold
it
in trust for holders of Senior Indebtedness of the Issuer and pay it over to
them as their interests may appear.
Section
10.06.
Subrogation
.
After
all Senior Indebtedness of the Issuer is paid in full and until the Securities
are paid in full, the Holders shall be subrogated to the rights of holders
of
such Senior Indebtedness to receive distributions applicable to Senior
Indebtedness of the Issuer. A distribution made under this Article 10 to holders
of such Senior Indebtedness which otherwise would have been made to the Holders
is not, as between the Issuer and the Holders, a payment by the Issuer on such
Senior Indebtedness.
Section
10.07.
Relative
Rights
.
This
Article 10 defines the relative rights of the Holders and holders of Senior
Indebtedness of the Issuer. Nothing in this Indenture shall:
(a)
impair,
as between the Issuer and the Holders, the obligation of the Issuer, which
is
absolute and unconditional, to pay principal of and interest on the Securities
in accordance with their terms; or
(b)
prevent
the Trustee or any Holder from exercising its available remedies upon a Default,
subject to the rights of holders of Senior Indebtedness of the Issuer to receive
distributions otherwise payable to the Holders.
Section
10.08.
Subordination
May Not Be Impaired by Issuer
.
No
right of any holder of Senior Indebtedness of the Issuer to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Issuer or by its failure to comply with
this
Indenture.
Section
10.09.
Rights
of Trustee and Paying Agent
.
Notwithstanding Section 10.03, the Trustee or any Paying Agent may continue
to
make payments on the Securities and shall not be charged with knowledge of
the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives notice satisfactory to it that payments may
not
be made under this Article 10. The Issuer, the Registrar, any Paying Agent,
a
Representative or a holder of Senior Indebtedness of the Issuer may give the
notice; provided, however, that, if an issue of Senior Indebtedness of the
Issuer has a Representative, only the Representative may give the
notice.
The
Trustee in its individual or any other capacity may hold Senior Indebtedness
of
the Issuer with the same rights it would have if it were not Trustee. The
Registrar and any Paying Agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article 10 with respect
to
any Senior Indebtedness of the Issuer which may at any time be held by it,
to
the same extent as any other holder of such Senior Indebtedness; and nothing
in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 10 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07 or any other Section of this Indenture.
Section
10.10.
Distribution
or Notice to Representative
.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness of the Issuer, the distribution may be made and the notice given
to
their Representative (if any).
Section
10.11.
Article
10 Not to Prevent Events of Default or Limit Right to Accelerate
.
The
failure to make a payment pursuant to the Securities by reason of any provision
in this Article 10 shall not be construed as preventing the occurrence of a
Default. Nothing in this Article 10 shall have any effect on the right of the
Holders or the Trustee to accelerate the maturity of the
Securities.
Section
10.12.
Trust
Monies Not Subordinated
.
Notwithstanding anything contained herein to the contrary, payments from money
or the proceeds of U.S. Government Obligations held in trust under Article
8 by
the Trustee and deposited at a time when permitted
by
the
subordination provisions of this Article 10 for the payment of principal
of and
interest on the Securities shall not be subordinated to the prior payment
of any
Senior Indebtedness of the Issuer or subject to the restrictions set forth
in
this Article 10, and none of the Holders shall be obligated to pay over any
such
amount to the Issuer or any holder of Senior Indebtedness of the Issuer or
any
other creditor of the Issuer.
Section
10.13.
Trustee
Entitled to Rely
.
Upon
any payment or distribution pursuant to this Article 10, the Trustee and the
Holders shall be entitled to rely (a) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending, (b) upon a certificate of the liquidating trustee
or
agent or other Person making such payment or distribution to the Trustee or
to
the Holders or (c) upon the Representatives for the holders of Senior
Indebtedness of the Issuer for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of such Senior
Indebtedness and other Indebtedness of the Issuer, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of the Issuer to participate
in
any payment or distribution pursuant to this Article 10, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as
to the amount of such Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and
other facts pertinent to the rights of such Person under this Article 10, 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. The provisions of Sections 7.01 and 7.02 shall be applicable
to
all actions or omissions of actions by the Trustee pursuant to this Article
10.
Section
10.14.
Trustee
to Effectuate Subordination
.
Each
Holder by accepting a Security authorizes and directs the Trustee on his behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Holders and the holders of Senior
Indebtedness of the Issuer as provided in this Article 10 and appoints the
Trustee as attorney-in-fact for any and all such purposes.
Section
10.15.
Trustee
Not Fiduciary for Holders of Senior Indebtedness
.
The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Issuer and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to the Holders or the Issuer or any
other Person money or assets to which any holders of Senior Indebtedness of
the
Issuer shall be entitled by virtue of this Article 10 or otherwise.
Section
10.16.
Reliance
by Holders of Senior Indebtedness on Subordination Provisions
.
Each
Holder by accepting a Security acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness of the Issuer, whether
such Senior Indebtedness was created or acquired before or after the issuance
of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior
Indebtedness.
Without
in any way limiting the generality of the foregoing paragraph, the holders
of
Senior Indebtedness of the Issuer may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Trustee or the Holders and without impairing
or
releasing the subordination provided in this Article 10 or the obligations
hereunder of the Holders to the holders of the Senior Indebtedness of the
Issuer, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness of the Issuer, or otherwise amend or supplement in any manner
Senior Indebtedness of the Issuer, or any instrument evidencing the same or
any
agreement under which Senior Indebtedness of the Issuer is outstanding; (ii)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness of the Issuer; (iii) release any
Person liable in any manner for the payment or collection of Senior Indebtedness
of the Issuer; and (iv) exercise or refrain from exercising any rights against
the Issuer and any other Person.
ARTICLE
11
GUARANTEES
Section
11.01.
Guarantees
.
xvii)
Each
Guarantor hereby jointly and severally, irrevocably and unconditionally
guarantees, as a primary obligor and not merely as a surety, to each Holder
and
to the Trustee and its successors and assigns (i) the full and punctual payment
when due, whether at Stated Maturity, by acceleration, by redemption or
otherwise, of all obligations of the Issuer under this Indenture (including
obligations to the Trustee) and the Securities, whether for payment of principal
of, premium, if any, or interest on in respect of the Securities and all other
monetary obligations of the Issuer under this Indenture and the Securities
and
(ii) the full and punctual performance within applicable grace periods of all
other obligations of the Issuer whether for fees, expenses, indemnification
or
otherwise under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the “Guaranteed Obligations”). Each Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed,
in
whole or in part, without notice or further assent from each such Guarantor,
and
that each such Guarantor shall remain bound under this Article 11
notwithstanding any extension or renewal of any Guaranteed
Obligation.
(b)
Each
Guarantor waives presentation to, demand of payment from and protest to the
Issuer of any of the Guaranteed Obligations and also waives notice of protest
for nonpayment. Each Guarantor waives notice of any default under the Securities
or the Guaranteed Obligations. The obligations of each Guarantor hereunder
shall
not be affected by (i) the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any right or remedy against the Issuer or any
other Person under this Indenture, the Securities or any other agreement or
otherwise; (ii) any extension or renewal of this Indenture, the Securities
or
any other agreement; (iii) any rescission, waiver, amendment or modification
of
any of the terms or provisions of this Indenture, the Securities or any other
agreement; (iv) the release of any security held by any Holder or the Trustee
for the Guaranteed Obligations or any Guarantor; (v) the failure of any Holder
or Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (vi) any change in the ownership of such Guarantor,
except as provided in Section 11.02(b).
(c)
Each
Guarantor hereby waives any right to which it may be entitled to have its
obligations hereunder divided among the Guarantors, such that such Guarantor’s
obligations would be less than the full amount claimed. Each Guarantor hereby
waives any right to which it may be entitled to have the assets of the Issuer
first be used and depleted as payment of the Issuer’s or such Guarantor’s
obligations hereunder prior to any amounts being claimed from or paid by such
Guarantor hereunder. Each Guarantor hereby waives any right to which it may
be
entitled to require that the Issuer be sued prior to an action being initiated
against such Guarantor.
(d)
Each
Guarantor further agrees that its Guarantee herein constitutes a guarantee
of
payment, performance and compliance when due (and not a guarantee of collection)
and waives any right to require that any resort be had by any Holder or the
Trustee to any security held for payment of the Guaranteed
Obligations.
(e)
The
Guarantee of each Guarantor is, to the extent and in the manner set forth in
Article 12, subordinated and subject in right of payment to the prior payment
in
full of the principal of and premium, if any, and interest on all Senior
Indebtedness of the relevant Guarantor and is made subject to such provisions
of
this Indenture.
(f)
Except
as
expressly set forth in Sections 8.01(b), 11.02 and 11.06, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing,
the
obligations of each Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities
or
any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk
of
any Guarantor or would otherwise operate as a discharge of any Guarantor as
a
matter of law or equity.
(g)
Each
Guarantor agrees that its Guarantee shall remain in full force and effect until
payment in full of all the Guaranteed Obligations. Each Guarantor further agrees
that its Guarantee herein shall continue to be effective or be reinstated,
as
the case may be, if at any time payment, or any part thereof, of principal
of or
interest on any Guaranteed Obligation is rescinded or must otherwise be restored
by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer
or otherwise.
(h)
In
furtherance of the foregoing and not in limitation of any other right which
any
Holder or the Trustee has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Issuer to pay the principal of or interest
on
any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform or comply
with any other Guaranteed Obligation, each Guarantor hereby promises to and
shall, upon receipt of written demand by the Trustee, forthwith pay, or cause
to
be paid, in cash, to the Holders or the Trustee an amount equal to the sum
of
(i) the
unpaid
principal amount of such Guaranteed Obligations, (ii) accrued and unpaid
interest on such Guaranteed Obligations (but only to the extent not prohibited
by applicable law) and (iii) all other monetary obligations of the Issuer
to the
Holders and the Trustee.
(i)
Each
Guarantor agrees that it shall not be entitled to any right of subrogation
in
relation to the Holders in respect of any Guaranteed Obligations guaranteed
hereby until payment in full of all Guaranteed Obligations and all obligations
to which the Guaranteed Obligations are subordinated as provided in Article
12.
Each Guarantor further agrees that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of any Guarantee herein, notwithstanding any stay, injunction
or
other prohibition preventing such acceleration in respect of the Guaranteed
Obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article 6, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by such Guarantor for the purposes of this Section
11.01.
(j)
Each
Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder
in enforcing any rights under this Section 11.01.
(k)
Upon
request of the Trustee, each Guarantor shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to
carry out more effectively the purpose of this Indenture.
Section
11.02.
Limitation
on Liability
.
xviii)
Any term
or provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Guaranteed Obligations guaranteed hereunder by any
Guarantor shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Indenture, as it relates to such Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer
or
similar laws affecting the rights of creditors generally.
(b)
A
Guarantee as to any Guarantor shall terminate and be of no further force or
effect and such Guarantor shall be deemed to be released from all obligations
under this Article 11 upon:
(i)
the
sale,
disposition or other transfer (including through merger or consolidation) of
the
Capital Stock (including any sale, disposition or other transfer following
which
the applicable Guarantor is no longer a Restricted Subsidiary) of the applicable
Guarantor if such sale, disposition or other transfer is made in compliance
with
this Indenture,
(ii)
the
Issuer designating such Guarantor to be an Unrestricted Subsidiary in accordance
with the provisions set forth under Section 4.04 and the definition of
“Unrestricted Subsidiary,”
(iii)
in
the
case of any Restricted Subsidiary that after the Issue Date is required to
guarantee the Securities pursuant to Section 4.11, the release or
discharge
of the guarantee by such Restricted Subsidiary of Indebtedness of the Issuer
or
any Restricted Subsidiary of the Issuer or such Restricted Subsidiary or the
repayment of the Indebtedness or Disqualified Stock, in each case, which
resulted in the obligation to guarantee the Securities, and
(iv)
the
Issuer’s exercise of its defeasance options under Article 8, or if the Issuer’s
obligations under this Indenture are discharged in accordance with the terms
of
this Indenture.
In
the
case of clause (b)(i) above, such Guarantor shall be released from its
guarantees, if any, of, and all pledges and security, if any, granted in
connection with, the Credit Agreement and any other Indebtedness of the Issuer
or any Restricted Subsidiary of the Issuer.
A
Guarantee also shall be automatically released upon the applicable Subsidiary
ceasing to be a Subsidiary as a result of any foreclosure of any pledge or
security interest securing Bank Indebtedness or other exercise of remedies
in
respect thereof or if such Subsidiary is released from its guarantees of, and
all pledges and security interests granted in connection with, the Credit
Agreement and any other Indebtedness of the Issuer or any Restricted Subsidiary
of the Issuer which results in the obligation to guarantee the
Securities.
Section
11.03.
Successors
and Assigns
.
This
Article 11 shall be binding upon each Guarantor and its successors and assigns
and shall inure to the benefit of the successors and assigns of the Trustee
and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges conferred upon that party
in
this Indenture and in the Securities shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and conditions of
this
Indenture.
Section
11.04.
No
Waiver
.
Neither
a failure nor a delay on the part of either the Trustee or the Holders in
exercising any right, power or privilege under this Article 11 shall operate
as
a waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Trustee and the Holders herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Article 11 at law, in equity, by statute or
otherwise.
Section
11.05.
Modification
.
No
modification, amendment or waiver of any provision of this Article 11, nor
the
consent to any departure by any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance
and
for the purpose for which given. No notice to or demand on any Guarantor in
any
case shall entitle such Guarantor to any other or further notice or demand
in
the same, similar or other circumstances.
Section
11.06.
Execution
of Supplemental Indenture for Future Guarantors
.
Each
Subsidiary and other Person which is required to become a Guarantor pursuant
to
Section 4.11 shall promptly execute and deliver to the Trustee a supplemental
indenture in the form of Exhibit D hereto pursuant to which such Subsidiary
or
other Person shall become a Guarantor under this Article 11 and shall guarantee
the Guaranteed Obligations. Concurrently with the execution and
delivery
of such supplemental indenture, the Issuer shall deliver to the Trustee an
Opinion of Counsel and an Officers’ Certificate to the effect that such
supplemental indenture has been duly authorized, executed and delivered by
such
Subsidiary or other Person and that, subject to the application of bankruptcy,
insolvency, moratorium, fraudulent conveyance or transfer and other similar
laws
relating to creditors’ rights generally and to the principles of equity, whether
considered in a proceeding at law or in equity, the Guarantee of such Guarantor
is a valid and binding obligation of such Guarantor, enforceable against
such
Guarantor in accordance with its terms and/or to such other matters as the
Trustee may reasonably request.
Section
11.07.
Non-Impairment
.
The
failure to endorse a Guarantee on any Security shall not affect or impair the
validity thereof.
ARTICLE
12
SUBORDINATION
OF THE GUARANTEES
Section
12.01.
Agreement
to Subordinate
.
Each
Guarantor agrees, and each Holder by accepting a Security agrees, that the
obligations of a Guarantor hereunder are subordinated in right of payment,
to
the extent and in the manner provided in this Article 12, to the prior payment
in full of all existing and future Senior Indebtedness of such Guarantor and
that the subordination is for the benefit of and enforceable by the holders
of
such Senior Indebtedness of such Guarantor. The obligations hereunder with
respect to a Guarantor shall in all respects rank pari passu in right of payment
with all existing and future Pari Passu Indebtedness of such Guarantor and
shall
rank senior in right of payment to all existing and future Subordinated
Indebtedness of such Guarantor; and only Indebtedness of such Guarantor that
is
Senior Indebtedness of such Guarantor shall rank senior to the obligations
of
such Guarantor in accordance with the provisions set forth herein. For purposes
of this Article 12, the Indebtedness evidenced by the Securities shall be deemed
to include any Additional Interest payable pursuant to the provisions set forth
in the Securities and the Registration Agreement. All provisions of this Article
12 shall be subject to Section 12.16.
Section
12.02.
Liquidation,
Dissolution, Bankruptcy
.
Upon
any payment or distribution of the assets of a Guarantor to creditors upon
a
total or partial liquidation or a total or partial dissolution of such Guarantor
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to such Guarantor and its properties:
(a)
holders
of Senior Indebtedness of such Guarantor shall be entitled to receive payment
in
full in cash of such Senior Indebtedness (including interest accruing after,
or
which would accrue but for, the commencement of any such proceeding at the
rate
specified in the applicable Senior Indebtedness, whether or not a claim for
such
interest would be allowed) before the Holders shall be entitled to receive
any
payment pursuant to any Guaranteed Obligations from such Guarantor;
and
(b)
until
the
Senior Indebtedness of such Guarantor is paid in full in cash, any payment
or
distribution to which the Holders would be entitled but for this Article 12
shall be made to holders of such Senior Indebtedness as their interests may
appear, except that the Holders may receive and retain Permitted Junior
Securities.
Section
12.03.
Default
on Designated Senior Indebtedness of a Guarantor
.
A
Guarantor may not make any payment pursuant to any of the Guaranteed Obligations
or otherwise purchase, redeem or otherwise retire any Securities (except that
the Holders may receive and retain (a) Permitted Junior Securities and (b)
payments made from the trust described under Article 8 (collectively, “pay its
Guarantee”) if:
(1)
a
default
in the payment of the principal of, premium, if any, or interest on any
Designated Senior Indebtedness of such Guarantor occurs and is continuing or
any
other amount owing in respect of any Designated Senior Indebtedness of such
Guarantor is not paid when due, or
(2)
any
other
default on Designated Senior Indebtedness of such Guarantor occurs and the
maturity of such Designated Senior Indebtedness of such Guarantor is accelerated
in accordance with its terms,
unless,
in either case, the default has been cured or waived and any such acceleration
has been rescinded or such Designated Senior Indebtedness has been paid in
full
in cash; provided, however, such Guarantor may pay its Guarantee without regard
to the foregoing if such Guarantor and the Trustee receive written notice
approving such payment from the Representative of the holders of such Designated
Senior Indebtedness with respect to which either of the events set forth in
clause (1) or (2) of this sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (1) or
(2)
of the preceding sentence) with respect to any Designated Senior Indebtedness
of
a Guarantor pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
such Guarantor may not pay its Guarantee for a period (a “Guarantee Payment
Blockage Period”) commencing upon the receipt by the Trustee (with a copy to
such Guarantor and the Issuer) of written notice (a “Guarantee Blockage Notice”)
of such default from the Representative of the holders of such Designated Senior
Indebtedness specifying an election to effect a Guarantee Payment Blockage
Period and ending 179 days thereafter (or earlier if such Guarantee Payment
Blockage Period is terminated (i) by written notice to the Trustee, such
Guarantor and the Issuer from the Person or Persons who gave such Guarantee
Blockage Notice; (ii) by repayment in full in cash of such Designated Senior
Indebtedness; or (iii) because the default giving rise to such Guarantee
Blockage Notice is no longer continuing). Notwithstanding the provisions
described in the immediately preceding sentence (but subject to the provisions
contained in the first sentence of this Section 12.03 and in Section 12.02(b)),
unless the holders of such Designated Senior Indebtedness or the Representative
of such holders shall have accelerated the maturity of such Designated Senior
Indebtedness or a payment default exists, such Guarantor may resume payments
on
its Guarantee after the end of such Guarantee Payment Blockage Period (including
any missed payments). Not more than one Guarantee Blockage Notice may be given
with respect to a Guarantor in any consecutive 360-day period, irrespective
of
the number of defaults with respect to Designated Senior Indebtedness during
such period. In no event, however, may the total number of days during which
any
Guarantee Payment Blockage Period is in effect exceed 179 days in the aggregate
during any 360 consecutive day period. For purposes of this Section 12.03,
no
default or event of default that existed or was continuing on the date of the
commencement of any Guarantee Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Guarantee Payment Blockage Period
shall be,
or
be
made, the basis of the commencement of a subsequent Guarantee Payment Blockage
Period by the Representative of such Designated Senior Indebtedness, whether
or
not within a period of 360 consecutive days, unless such default or event
of
default shall have been cured or waived for a period of not less than 90
consecutive days (it being understood that any subsequent action or any breach
of any financial covenants for a period commencing after the date of
commencement of such Guarantee Payment Blockage Period that, in either case,
would give rise to an event of default pursuant to any provision of the
Designated Senior Indebtedness under which an event of default previously
existed or was continuing shall constitute a new event of default for this
purpose).
Section
12.04.
Demand
for Payment
.
If
payment of the Securities is accelerated because of an Event of Default and
a
demand for payment is made on a Guarantor pursuant to Article 11, the Issuer,
the Guarantor or the Trustee (provided that the Trustee shall have received
written notice from the Issuer or such Guarantor, on which notice the Trustee
shall be entitled to conclusively rely) shall promptly notify the holders of
the
Designated Senior Indebtedness of such Guarantor (or the Representative of
such
holders) of such demand.
Section
12.05.
When
Distribution Must Be Paid Over
.
If a
payment or distribution is made to the Holders that because of this Article
12
should not have been made to them, the Holders who receive the payment or
distribution shall hold such payment or distribution in trust for holders of
the
Senior Indebtedness of the relevant Guarantor and pay it over to them as their
respective interests may appear.
Section
12.06.
Subrogation
.
After
all Senior Indebtedness of a Guarantor is paid in full and until the Securities
are paid in full in cash, the Holders shall be subrogated to the rights of
holders of Senior Indebtedness of such Guarantor to receive distributions
applicable to Senior Indebtedness of such Guarantor. A distribution made under
this Article 12 to holders of Senior Indebtedness of such Guarantor which
otherwise would have been made to the Holders is not, as between such Guarantor
and the Holders, a payment by such Guarantor on Senior Indebtedness of such
Guarantor.
Section
12.07.
Relative
Rights
.
This
Article 12 defines the relative rights of the Holders and holders of Senior
Indebtedness of a Guarantor. Nothing in this Indenture shall:
(a)
impair,
as between a Guarantor and the Holders, the obligation of a Guarantor which
is
absolute and unconditional, to make payments with respect to the Guaranteed
Obligations to the extent set forth in Article 11; or
(b)
prevent
the Trustee or any Holder from exercising its available remedies upon a default
by a Guarantor under its obligations with respect to the Guaranteed Obligations,
subject to the rights of holders of Senior Indebtedness of such Guarantor to
receive distributions otherwise payable to the Holders.
Section
12.08.
Subordination
May Not Be Impaired by a Guarantor
.
No
right of any holder of Senior Indebtedness of a Guarantor to enforce the
subordination of the obligations of such Guarantor hereunder shall be impaired
by any act or failure to act by such Guarantor or by its failure to comply
with
this Indenture.
Section
12.09.
Rights
of Trustee and Paying Agent
.
Notwithstanding Section 12.03, the Trustee or any Paying Agent may continue
to
make payments on the Securities and shall not be charged with knowledge of
the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives written notice satisfactory to it that payments
may not be made under this Article 12. A Guarantor, the Registrar or
co-registrar, a Paying Agent, a Representative or a holder of Senior
Indebtedness of a Guarantor may give the notice; provided, however, that if
an
issue of Senior Indebtedness of a Guarantor has a Representative, only the
Representative may give the notice.
The
Trustee in its individual or any other capacity may hold Senior Indebtedness
of
a Guarantor with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and any Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Indebtedness of a Guarantor which may
at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness of such Guarantor; and nothing in Article 7 shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article 12 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07 or any other Section of this Indenture.
Section
12.10.
Distribution
or Notice to Representative
.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness of a Guarantor, the distribution may be made and the notice given
to their Representative (if any).
Section
12.11.
Article
12 Not to Prevent Events of Default or Limit Right to Accelerate
.
The
failure of a Guarantor to make a payment on any of its obligations by reason
of
any provision in this Article 12 shall not be construed as preventing the
occurrence of a default by such Guarantor under such obligations. Nothing in
this Article 12 shall have any effect on the right of the Holders or the Trustee
to make a demand for payment on a Guarantor pursuant to Article 11.
Section
12.12.
Trustee
Entitled to Rely
.
Upon
any payment or distribution pursuant to this Article 12, the Trustee and the
Holders shall be entitled to rely (a) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 12.02 are pending, (b) upon a certificate of the liquidating trustee
or
agent or other Person making such payment or distribution to the Trustee or
to
the Holders or (c) upon the Representatives for the holders of Senior
Indebtedness of a Guarantor for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness of a Guarantor and other Indebtedness of a 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 12. In the event that
the Trustee determines, in good faith, that evidence is required with respect
to
the right of any Person as a holder of Senior Indebtedness of a Guarantor to
participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Guarantor held by such Person, the extent to which such Person is entitled
to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, 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. The provisions of Sections 7.01 and 7.02 shall be
applicable to all actions or omissions of actions by the Trustee pursuant
to
this Article 12.
Section
12.13.
Trustee
to Effectuate Subordination
.
Each
Holder by accepting a Security authorizes and directs the Trustee on his or
her
behalf to take such action as may be necessary or appropriate to acknowledge
or
effectuate the subordination between the Holders and the holders of Senior
Indebtedness of each of the Guarantors as provided in this Article 12 and
appoints the Trustee as attorney-in-fact for any and all such
purposes.
Section
12.14.
Trustee
Not Fiduciary for Holders of Senior Indebtedness of a Guarantor
.
The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of a Guarantor and shall not be liable to any such holders if
it
shall mistakenly pay over or distribute to the Holders or the relevant Guarantor
or any other Person, money or assets to which any holders of Senior Indebtedness
of such Guarantor shall be entitled by virtue of this Article 12 or
otherwise.
Section
12.15.
Reliance
by Holders of Senior Indebtedness of a Guarantor on Subordination
Provisions
.
Each
Holder by accepting a Security acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness of a Guarantor, whether
such Senior Indebtedness was created or acquired before or after the issuance
of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior
Indebtedness.
Without
in any way limiting the generality of the foregoing paragraph, the holders
of
Senior Indebtedness of a Guarantor may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Trustee or the Holders and without impairing
or
releasing the subordination provided in this Article 12 or the obligations
hereunder of the Holders to the holders of the Senior Indebtedness of a
Guarantor, do any one or more of the following: (i) change the manner, place
or
terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness of a Guarantor, or otherwise amend or supplement in any manner
Senior Indebtedness of a Guarantor, or any instrument evidencing the same or
any
agreement under which Senior Indebtedness of a Guarantor is outstanding; (ii)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness of a Guarantor; (iii) release any
Person liable in any manner for the payment or collection of Senior Indebtedness
of a Guarantor; and (iv) exercise or refrain from exercising any rights against
such Guarantor and any other Person.
Section
12.16.
Trust
Monies Not Subordinated
.
Notwithstanding anything contained herein to the contrary, payments from money
or the proceeds of U.S. Government Obligations held in trust under Article
8 by
the Trustee and deposited at a time when permitted by the subordination
provisions of this Article 12 for the payment of principal of and interest
on
the Securities shall not be subordinated to the prior payment of any Senior
Indebtedness of any Guarantor or subject to the restrictions set forth in this
Article 12, and none of the Holders shall be obligated to pay over any such
amount to a Guarantor or any holder of Senior Indebtedness of a Guarantor or
any
other creditor of a Guarantor.
ARTICLE
13
MISCELLANEOUS
Section
13.01.
Trust
Indenture Act Controls
.
If and
to the extent that any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by, or with another provision (an
“incorporated provision”) included in this Indenture by operation of, Sections
310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision
shall control.
Section
13.02.
Notices
.
xix)
Any
notice or communication required or permitted hereunder shall be in writing
and
delivered in person, via facsimile or mailed by first-class mail addressed
as
follows:
if
to the
Issuer or a Guarantor:
BPC
Holding Corporation.
101
Oakley Street
Evansville,
Indiana 47710
Attention
of: General Counsel
Facsimile:
(812) 424-0128
if
to the
Trustee:
Wells
Fargo Bank, N.A.
Corporate
Trust Services
213
Court
Street, Suite 703
Middletown,
CT 06457
Facsimile:
860-704-6219
The
Issuer or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
(b)
Any
notice or communication mailed to a Holder shall be mailed, first class mail,
to
the Holder at the Holder’s address as it appears on the registration books of
the Registrar and shall be sufficiently given if so mailed within the time
prescribed.
(c)
Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it, except that notices to the Trustee are
effective only if received.
Section
13.03.
Communication
by the Holders with Other Holders
.
The
Holders may communicate pursuant to Section 312(b) of the TIA with other Holders
with respect to their rights under this Indenture or the Securities. The Issuer,
the Trustee, the Registrar and other Persons shall have the protection of
Section 312(c) of the TIA.
Section
13.04.
Certificate
and Opinion as to Conditions Precedent
.
Upon
any request or application by the Issuer to the Trustee to take or refrain
from
taking any action under this Indenture, the Issuer shall furnish to the Trustee
at the request of the Trustee:
(a)
an
Officers’ Certificate in form reasonably satisfactory to the Trustee stating
that, in the opinion of the signers, all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with;
and
(b)
an
Opinion of Counsel in form reasonably satisfactory to the Trustee stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Section
13.05.
Statements
Required in Certificate or Opinion
.
Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.09) shall
include:
(a)
a
statement that the individual making such certificate or opinion has read such
covenant or condition;
(b)
a
brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based;
(c)
a
statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion
as
to whether or not such covenant or condition has been complied with;
and
(d)
a
statement as to whether or not, in the opinion of such individual, such covenant
or condition has been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or
certificates of public officials.
Section
13.06.
When
Securities Disregarded
.
In
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the
Issuer, any Guarantor or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer or
any
Guarantor shall be disregarded and deemed not to be outstanding, except that,
for the purpose of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which the Trustee
knows are so owned shall be so disregarded. Subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
Section
13.07.
Rules
by Trustee, Paying Agent and Registrar
.
The
Trustee may make reasonable rules for action by or a meeting of the Holders.
The
Registrar and a Paying Agent may make reasonable rules for their
functions.
Section
13.08.
Legal
Holidays
.
If a
payment date is not a Business Day, payment shall be made on the next succeeding
day that is a Business Day, and no interest shall accrue on any amount that
would have been otherwise payable on such payment date if it were a Business
Day
for
the
intervening period. If a regular record date is not a Business Day, the record
date shall not be affected.
Section
13.09.
GOVERNING
LAW
.
THIS
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
Section
13.10.
No
Recourse Against Others
.
No
director, officer, employee, manager, incorporator or holder of any Equity
Interests in the Issuer or of any Guarantor or any direct or indirect parent
corporation, as such, shall have any liability for any obligations of the Issuer
or the Guarantors under the Securities or this Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Securities by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of
the Securities.
Section
13.11.
Successors
.
All
agreements of the Issuer and each Guarantor in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture
shall
bind its successors.
Section
13.12.
Multiple
Originals
.
The
parties may sign any number of copies of this Indenture. Each signed copy shall
be an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Indenture.
Section
13.13.
Table
of Contents; Headings
.
The
table of contents, cross-reference sheet and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only,
are not intended to be considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.
Section
13.14.
Indenture
Controls
.
If and
to the extent that any provision of the Securities limits, qualifies or
conflicts with a provision of this Indenture, such provision of this Indenture
shall control.
Section
13.15.
Severability
.
In case
any provision in this Indenture shall be invalid, illegal or unenforceable,
the
validity, legality and enforceability of the remaining provisions shall not
in
any way be affected or impaired thereby and such provision shall be ineffective
only to the extent of such invalidity, illegality or
unenforceability.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF,
the parties have caused this Indenture to be duly executed as of the date first
written above.
BPC
ACQUISITION CORP.
By:___________________
Name:
Title:
WELLS
FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:_____________________
Name:
Title:
APPENDIX
A
PROVISIONS
RELATING TO INITIAL SECURITIES, ADDITIONAL SECURITIES AND EXCHANGE
SECURITIES
1.
Definitions.
1.1
Definitions.
For
the
purposes of this Appendix A the following terms shall have the meanings
indicated below:
“Additional
Interest” has the meaning set forth in the Registration Agreement.
“Definitive
Security” means a certificated Initial Security or Exchange Security (bearing
the Restricted Securities Legend if the transfer of such Security is restricted
by applicable law) that does not include the Global Securities
Legend.
“Depository”
means The Depository Trust Company, its nominees and their respective
successors.
“Global
Securities Legend” means the legend set forth under that caption in the
applicable Exhibit to this Indenture.
“IAI”
means an institutional “accredited investor” as described in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act.
“Initial
Purchasers” means GSMP and such other initial purchasers party to the Purchase
Agreement entered into in connection with the offer and sale of the
Securities.
“Purchase
Agreement” means (a) the Note Purchase Agreement and (b) any other purchase
agreement relating to Additional Securities.
“QIB”
means a “qualified institutional buyer” as defined in Rule 144A.
“Registered
Exchange Offer” means the offer by the Company, pursuant to the Registration
Agreement, to certain Holders of Initial Securities, to issue and deliver to
such Holders, in exchange for their Initial Securities, a like aggregate
principal amount of Exchange Securities registered under the Securities
Act.
“Registration
Agreement” means (a) the Exchange and Registration Rights Agreement dated as of
September 20, 2006 among the Issuer, the Guarantors and the Initial Purchasers
relating to the Securities and (b) any other similar registration rights
agreement relating to Additional Securities.
“Regulation
S” means Regulation S under the Securities Act.
“Regulation
S Securities” means all Initial Securities offered and sold outside the United
States in reliance on Regulation S.
“Restricted
Period,” with respect to any Securities, means the period of 40 consecutive days
beginning on and including the later of (a) the day on which such Securities
are
first offered to persons other than distributors (as defined in Regulation
S
under the Securities Act) in reliance on Regulation S, notice of which day
shall
be promptly given by the Company to the Trustee, and (b) the Issue Date, and
with respect to any Additional Securities that are Transfer Restricted
Securities, it means the comparable period of 40 consecutive days.
“Restricted
Securities Legend” means the legend set forth in Section 2.2(f)(i)
herein.
“Rule
501” means Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
“Rule
144A” means Rule 144A under the Securities Act.
“Rule
144A Securities” means all Initial Securities offered and sold to QIBs in
reliance on Rule 144A.
“Securities
Custodian” means the custodian with respect to a Global Security (as appointed
by the Depository) or any successor person thereto, who shall initially be
the
Trustee.
“Shelf
Registration Statement” means a registration statement filed by the Company in
connection with the offer and sale of Initial Securities pursuant to the
Registration Agreement.
“Transfer
Restricted Securities” means Definitive Securities and any other Securities that
bear or are required to bear or are subject to the Restricted Securities
Legend.
“Unrestricted
Definitive Security” means Definitive Securities and any other Securities that
are not required to bear, or are not subject to, the Restricted Securities
Legend.
1.2
Other
Definitions.
Term:
|
Defined
in Section:
|
Agent
Members
|
2.1(b)
|
Global
Securities
|
2.1(b)
|
Regulation
S Global Securities
|
2.1(b)
|
Regulation
S Permanent Global Security
|
2.1(b)
|
Regulation
S Temporary Global Security
|
2.1(b)
|
Rule
144A Global Securities
|
2.1(b)
|
2.
The
Securities.
2.1
Form
and
Dating; Global Securities.
(a)
The
Initial Securities issued on the date hereof will be (i) offered and sold by
the
Issuer pursuant to the Purchase Agreement and (ii) resold, initially only to
(1)
QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as
defined in Regulation S) in reliance on Regulation S. Such Initial Securities
may thereafter be
transferred
to, among others, QIBs, purchasers in reliance on Regulation S and, except
as
set forth below, IAIs in accordance with Rule 501. Additional Securities
offered
after the date hereof may be offered and sold by the Issuer from time to
time
pursuant to one or more purchase agreements in accordance with applicable
law.
(b)
Global
Securities.
(1)
Rule
144A Securities initially shall be represented by one or more Securities in
definitive, fully registered, global form without interest coupons
(collectively, the “Rule 144A Global Securities”).
Regulation
S Securities initially shall be represented by one or more Securities in fully
registered, global form without interest coupons (collectively, the “Regulation
S Temporary Global Security” and, together with the Regulation S Permanent
Global Security (defined below), the “Regulation S Global Securities”), which
shall be registered in the name of the Depository or the nominee of the
Depository for the accounts of designated agents holding on behalf of Euroclear
or Clearstream.
The
Restricted Period shall be terminated upon the receipt by the Trustee of: (1)
a
written certificate from the Depository, together with copies of certificates
from Euroclear and Clearstream certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Security (except to the extent
of
any beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who shall take delivery of a beneficial ownership interest
in
a 144A Global Security bearing a Private Placement Legend, all as contemplated
by this Appendix A); and (2) an Officers’ Certificate from the
Issuer.
Following
the termination of the Restricted Period, beneficial interests in the Regulation
S Temporary Global Security shall be exchanged for beneficial interests in
a
permanent Global Security (the “Regulation S Permanent Global Security”)
pursuant to the applicable procedures of the Depository. Simultaneously with
the
authentication of the Regulation S Permanent Global Security, the Trustee shall
cancel the Regulation S Temporary Global Security. The aggregate principal
amount of the Regulation S Temporary Global Security and the Regulation S
Permanent Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
The
provisions of the “Operating Procedures of the Euroclear System” and “Terms and
Conditions Governing Use of Euroclear” and the “General Terms and Conditions of
Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable
to transfers of beneficial interests in the Regulation S Temporary Global
Security and the Regulation S Permanent Global Security that are held by
Participants through Euroclear or Clearstream.
The
term
“Global Securities” means the Rule 144A Global Securities and the Regulation S
Global Securities. The Global Securities shall bear the Global Security Legend.
The Global Securities initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, in each case for credit to an
account of an Agent Member, (ii) be delivered to the Trustee as custodian for
such Depository and (iii) bear the Restricted Securities Legend.
Members
of, or direct or indirect participants in, the Depository shall have no rights
under this Indenture with respect to any Global Security held on their behalf
by
the Depository, or the Trustee as its custodian, or under the Global Securities.
The Depository may be treated by the Issuer, the Trustee and any agent of the
Issuer or the Trustee as the absolute owner of the Global Securities for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Issuer, the Trustee or any agent of the Issuer 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 its Agent Members,
the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(ii)
Transfers
of Global Securities shall be limited to transfer in whole, but not in part,
to
the Depository, its successors or their respective nominees. Interests of
beneficial owners in the Global Securities may be transferred or exchanged
for
Definitive Securities only in accordance with the applicable rules and
procedures of the Depository and the provisions of Section 2.2. In addition,
a
Global Security shall be exchangeable for Definitive Securities if (x) the
Depository (1) notifies the Issuer that it is unwilling or unable to continue
as
depository for such Global Security and the Issuer thereupon fails to appoint
a
successor depository or (2) has ceased to be a clearing agency registered under
the Exchange Act or (y) there shall have occurred and be continuing an Event
of
Default with respect to such Global Security; provided that in no event shall
the Regulation S Temporary Global Security be exchanged by the Issuer for
Definitive Securities prior to (x) the expiration of the Restricted Period
and
(y) the receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act. In all cases, Definitive Securities
delivered in exchange for any Global Security or beneficial interests therein
shall be registered in the names, and issued in any approved denominations,
requested by or on behalf of the Depository in accordance with its customary
procedures.
(iii)
In
connection with the transfer of a Global Security as an entirety to beneficial
owners pursuant to subsection (i) of this Section 2.1(b), such Global Security
shall be deemed to be surrendered to the Trustee for cancellation, and the
Issuer shall execute, and the Trustee shall authenticate and make available
for
delivery, to each beneficial owner identified by the Depository in writing
in
exchange for its beneficial interest in such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized
denominations.
(iv)
Any
Transfer Restricted Security delivered in exchange for an interest in a Global
Security pursuant to Section 2.2 shall, except as otherwise provided in Section
2.2, bear the Restricted Securities Legend.
(v)
Notwithstanding
the foregoing, through the Restricted Period, a beneficial interest in such
Regulation S Global Security may be held only through Euroclear or Clearstream
unless delivery is made in accordance with the applicable provisions of Section
2.2.
(vi)
The
Holder of any Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under
this
Indenture or the Securities.
2.2
Transfer
and Exchange.
(a)
Transfer
and Exchange of Global Securities. A Global Security may not be transferred
as a
whole except as set forth in Section 2.1(b). Global Securities will not be
exchanged by the Issuer for Definitive Securities except under the circumstances
described in Section in Section 2.1(b)(ii). Global Securities also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.08 and
2.10 of this Indenture. Beneficial interests in a Global Security may be
transferred and exchanged as provided in Section 2.2(b) or 2.2(g).
(b)
Transfer
and Exchange of Beneficial Interests in Global Securities. The transfer and
exchange of beneficial interests in the Global Securities shall be effected
through the Depository, in accordance with the provisions of this Indenture
and
the applicable rules and procedures of the Depository. Beneficial interests
in
Restricted Global Securities shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Beneficial interests in Global Securities shall be transferred or exchanged
only for beneficial interests in Global Securities. Transfers and exchanges
of
beneficial interests in the Global Securities also shall require compliance
with
either subparagraph (i) or (ii) below, as applicable, as well as one or more
of
the other following subparagraphs, as applicable:
(i)
Transfer
of Beneficial Interests in the Same Global Security. Beneficial interests in
any
Restricted Global Security may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Restricted Global
Security in accordance with the transfer restrictions set forth in the
Restricted Securities Legend; provided, however, that prior to the expiration
of
the Restricted Period, transfers of beneficial interests in a Regulation S
Global Security may not be made to a U.S. Person or for the account or benefit
of a U.S. Person (other than an Initial Purchaser). A beneficial interest in
an
Unrestricted Global Security may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global Security.
No written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section
2.2(b)(i).
(ii)
All
Other
Transfers and Exchanges of Beneficial Interests in Global Securities. In
connection with all transfers and exchanges of beneficial interests in any
Global Security that is not subject to Section 2.2(b)(i), the transferor of
such
beneficial interest must deliver to the Registrar (1) a written order from
an
Agent Member given to the Depository in accordance with the applicable rules
and
procedures of the Depository directing the Depository to credit or cause to
be
credited a beneficial interest in another Global Security in an amount equal
to
the beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the applicable rules and procedures of the Depository
containing information regarding the Agent Member account to be credited with
such increase. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Securities contained in this
Indenture and the Securities or otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global Security
pursuant to Section 2.2(g).
(iii)
Transfer
of Beneficial Interests to Another Restricted Global Security. A beneficial
interest in a Transfer Restricted Global Security may be transferred to a Person
who takes delivery thereof in the form of a beneficial interest in another
Transfer Restricted Global
Security
if the transfer complies with the requirements of Section 2.2(b)(ii) above
and
the Registrar receives the following:
(A)
if
the
transferee will take delivery in the form of a beneficial interest in a Rule
144A Global Security, then the transferor must deliver a certificate in the
form
attached to the applicable Security; and
(B)
if
the
transferee will take delivery in the form of a beneficial interest in a
Regulation S Global Security, then the transferor must deliver a certificate
in
the form attached to the applicable Security.
(iv)
Transfer
and Exchange of Beneficial Interests in a Transfer Restricted Global Security
for Beneficial Interests in an Unrestricted Global Security. A beneficial
interest in a Transfer Restricted Global Security may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Global Security or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Security if the exchange or transfer complies
with the requirements of Section 2.2(b)(ii) above and the Registrar receives
the
following:
(A)
if
the
holder of such beneficial interest in a Restricted Global Security proposes
to
exchange such beneficial interest for a beneficial interest in an Unrestricted
Global Security, a certificate from such holder in the form attached to the
applicable Security; or
(B)
if
the
holder of such beneficial interest in a Restricted Global Security proposes
to
transfer such beneficial interest to a Person who shall take delivery thereof
in
the form of a beneficial interest in an Unrestricted Global Security, a
certificate from such holder in the form attached to the applicable
Security,
and,
in
each such case, if the Issuer or the Registrar so requests or if the applicable
rules and procedures of the Depository so require, an Opinion of Counsel in
form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions
on
transfer contained herein and in the Restricted Securities Legend are no longer
required in order to maintain compliance with the Securities Act. If any such
transfer or exchange is effected pursuant to this subparagraph (iv) at a time
when an Unrestricted Global Security has not yet been issued, the Issuer shall
issue and, upon receipt of an written order of the Issuer in the form of an
Officers’ Certificate in accordance with Section 2.01, the Trustee shall
authenticate one or more Unrestricted Global Securities in an aggregate
principal amount equal to the aggregate principal amount of beneficial interests
transferred or exchanged pursuant to this subparagraph (iv).
(v)
Transfer
and Exchange of Beneficial Interests in an Unrestricted Global Security for
Beneficial Interests in a Restricted Global Security. Beneficial interests
in an
Unrestricted Global Security cannot be exchanged for, or transferred to Persons
who take delivery thereof in the form of, a beneficial interest in a Restricted
Global Security.
(c)
Transfer
and Exchange of Beneficial Interests in Global Securities for Definitive
Securities. A beneficial interest in a Global Security may not be exchanged
for
a Definitive Security except under the circumstances described in Section
2.1(b)(ii). A beneficial interest in a Global Security may not be transferred
to
a Person who takes delivery thereof in the form of a Definitive Security except
under the circumstances described in Section 2.1(b)(ii). In any case, beneficial
interests in Global Securities shall be transferred or exchanged only for
Definitive Securities.
(d)
Transfer
and Exchange of Definitive Securities for Beneficial Interests in Global
Securities. Transfers and exchanges of beneficial interests in the Global
Securities also shall require compliance with either subparagraph (i), (ii)
or
(ii) below, as applicable:
(i)
Transfer
Restricted Securities to Beneficial Interests in Restricted Global Securities.
If any Holder of a Transfer Restricted Security proposes to exchange such
Transfer Restricted Security for a beneficial interest in a Restricted Global
Security or to transfer such Transfer Restricted Security to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted Global
Security, then, upon receipt by the Registrar of the following
documentation:
(A)
if
the
Holder of such Transfer Restricted Security proposes to exchange such Transfer
Restricted Security for a beneficial interest in a Restricted Global Security,
a
certificate from such Holder in the form attached to the applicable
Security;
(B)
if
such
Transfer Restricted Security is being transferred to a Qualified Institutional
Buyer in accordance with Rule 144A under the Securities Act, a certificate
from
such Holder in the form attached to the applicable Security;
(C)
if
such
Transfer Restricted Security is being transferred to a Non U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904 under the
Securities Act, a certificate from such Holder in the form attached to the
applicable Security;
(D)
if
such
Transfer Restricted Security is being transferred pursuant to an exemption
from
the registration requirements of the Securities Act in accordance with Rule
144
under the Securities Act, a certificate from such Holder in the form attached
to
the applicable Security;
(E)
if
such
Transfer Restricted Security is being transferred to an Institutional Accredited
Investor in reliance on an exemption from the registration requirements of
the
Securities Act other than those listed in subparagraphs (B) through (D) above,
a
certificate from such Holder in the form attached to the applicable Security,
including the certifications, certificates and Opinion of Counsel, if
applicable; or
(F)
if
such
Transfer Restricted Security is being transferred to the Issuer or a Subsidiary
thereof, a certificate from such Holder in the form attached to the applicable
Security;
the
Trustee shall cancel the Transfer Restricted Security, and increase or cause
to
be increased the aggregate principal amount of the appropriate Restricted Global
Security.
(ii)
Transfer
Restricted Securities to Beneficial Interests in Unrestricted Global Securities.
A Holder of a Transfer Restricted Security may exchange such Transfer Restricted
Definitive Security for a beneficial interest in an Unrestricted Global Security
or transfer such Transfer Restricted Security to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Security
only if the Registrar receives the following:
(A)
if
the
Holder of such Transfer Restricted Security proposes to exchange such Transfer
Restricted Security for a beneficial interest in an Unrestricted Global
Security, a certificate from such Holder in the form attached to the applicable
Security; or
(B)
if
the
Holder of such Transfer Restricted Securities proposes to transfer such Transfer
Restricted Security to a Person who shall take delivery thereof in the form
of a
beneficial interest in an Unrestricted Global Security, a certificate from
such
Holder in the form attached to the applicable Security,
and,
in
each such case, if the Issuer or the Registrar so requests or if the applicable
rules and procedures of the Depository so require, an Opinion of Counsel in
form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions
on
transfer contained herein and in the Restricted Securities Legend are no longer
required in order to maintain compliance with the Securities Act. Upon
satisfaction of the conditions of this subparagraph (ii), the Trustee shall
cancel the Transfer Restricted Securities and increase or cause to be increased
the aggregate principal amount of the Unrestricted Global Security. If any
such
transfer or exchange is effected pursuant to this subparagraph (ii) at a time
when an Unrestricted Global Security has not yet been issued, the Issuer shall
issue and, upon receipt of a written order of the Issuer in the form of an
Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted
Global Securities in an aggregate principal amount equal to the aggregate
principal amount of Transfer Restricted Securities transferred or exchanged
pursuant to this subparagraph (ii).
(iii)
Unrestricted
Definitive Securities to Beneficial Interests in Unrestricted Global Securities.
A Holder of an Unrestricted Definitive Security may exchange such Unrestricted
Definitive Security for a beneficial interest in an Unrestricted Global Security
or transfer such Unrestricted Definitive Security to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Security
at any time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Security and
increase or cause to be increased the aggregate principal amount of one of
the
Unrestricted Global Securities. If any such transfer or exchange is effected
pursuant to this subparagraph (iii) at a time when an Unrestricted Global
Security has not yet been issued, the Issuer shall issue and, upon receipt
of an
written order of the Issuer in the form of an Officers’ Certificate, the Trustee
shall authenticate one or more Unrestricted Global Securities in an aggregate
principal amount equal to the aggregate principal amount of Unrestricted
Definitive Securities transferred or exchanged pursuant to this subparagraph
(iii).
(iv)
Unrestricted
Definitive Securities to Beneficial Interests in Restricted Global Securities.
An Unrestricted Definitive Security cannot be exchanged for, or transferred
to a
Person who takes delivery thereof in the form of, a beneficial interest in
a
Restricted Global Security.
(e)
Transfer
and Exchange of Definitive Securities for Definitive Securities. Upon request
by
a Holder of Definitive Securities and such Holder’s compliance with the
provisions of this Section 2.2(e), the Registrar shall register the transfer
or
exchange of Definitive Securities. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar
the
Definitive Securities duly endorsed or accompanied by a written instruction
of
transfer in form satisfactory to the Registrar duly executed by such Holder
or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.2(e).
(i)
Transfer
Restricted Securities to Transfer Restricted Securities. A Transfer Restricted
Security may be transferred to and registered in the name of a Person who takes
delivery thereof in the form of a Transfer Restricted Security if the Registrar
receives the following:
(A)
if
the
transfer will be made pursuant to Rule 144A under the Securities Act, then
the
transferor must deliver a certificate in the form attached to the applicable
Security;
(B)
if
the
transfer will be made pursuant to Rule 903 or Rule 904 under the Securities
Act,
then the transferor must deliver a certificate in the form attached to the
applicable Security;
(C)
if
the
transfer will be made pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate in the form attached to the applicable
Security;
(D)
if
the
transfer will be made to an IAI in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (A) through (D) above, a certificate in the form attached to
the
applicable Security; and
(E)
if
such
transfer will be made to the Issuer or a Subsidiary thereof, a certificate
in
the form attached to the applicable Security.
(ii)
Transfer
Restricted Securities to Unrestricted Definitive Securities. Any Transfer
Restricted Security may be exchanged by the Holder thereof for an Unrestricted
Definitive Security or transferred to a Person who takes delivery thereof in
the
form of an Unrestricted Definitive Security if the Registrar receives the
following:
(1)
if
the
Holder of such Transfer Restricted Security proposes to exchange such Transfer
Restricted Security for an Unrestricted Definitive Security, a certificate
from
such Holder in the form attached to the applicable Security; or
(2)
if
the
Holder of such Transfer Restricted Security proposes to transfer such Securities
to a Person who shall take delivery thereof in the form of an Unrestricted
Definitive Security, a certificate from such Holder in the form attached to
the
applicable Security,
and,
in
each such case, if the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Issuer to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Restricted Securities Legend are no longer required
in order to maintain compliance with the Securities Act.
(iii)
Unrestricted
Definitive Securities to Unrestricted Definitive Securities. A Holder of an
Unrestricted Definitive Security may transfer such Unrestricted Definitive
Securities to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Security at any time. Upon receipt of a request to register such
a
transfer, the Registrar shall register the Unrestricted Definitive Securities
pursuant to the instructions from the Holder thereof.
(iv)
Unrestricted
Definitive Securities to Transfer Restricted Securities. An Unrestricted
Definitive Security cannot be exchanged for, or transferred to a Person who
takes delivery thereof in the form of, a Transfer Restricted
Security.
At
such
time as all beneficial interests in a particular Global Security have been
exchanged for Definitive Securities or a particular Global Security has been
redeemed, repurchased or canceled in whole and not in part, each such Global
Security shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for or transferred to
a
Person who will take delivery thereof in the form of a beneficial interest
in
another Global Security or for Definitive Securities, the principal amount
of
Securities represented by such Global Security shall be reduced accordingly
and
an endorsement shall be made on such Global Security by the Trustee or by the
Depository at the direction of the Trustee to reflect such reduction; and if
the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Security, such other Global Security shall be increased accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depository at the direction of the Trustee to reflect such
increase.
(f)
Legend.
(i)
Except
as
permitted by the following paragraph (ii), (iii) or (iv), each Security
certificate evidencing the Global Securities and the Definitive Securities
(and
all Securities issued in exchange therefor or in substitution thereof) shall
bear a legend in substantially the following form (each defined term in the
legend being defined as such for purposes of the legend only):
“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES
SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION
S
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (IV)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
FOR
THE
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT.”
Each
Definitive Security shall bear the following additional legends:
“IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.”
(ii)
Upon
any
sale or transfer of a Transfer Restricted Security that is a Definitive
Security, the Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Security that does not bear the
legends set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security if the Holder certifies in writing to the Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Initial
Security).
(iii)
After
a
transfer of any Initial Securities during the period of the effectiveness of
a
Shelf Registration Statement with respect to such Initial Securities, all
requirements
pertaining to the Restricted Securities Legend on such Initial Securities
shall
cease to apply and the requirements that any such Initial Securities be issued
in global form shall continue to apply.
(iv)
Upon
the
consummation of a Registered Exchange Offer with respect to the Initial
Securities pursuant to which Holders of such Initial Securities are offered
Exchange Securities in exchange for their Initial Securities, all requirements
pertaining to Initial Securities that Initial Securities be issued in global
form shall continue to apply, and Exchange Securities in global form without
the
Restricted Securities Legend shall be available to Holders that exchange such
Initial Securities in such Registered Exchange Offer.
(v)
Upon
a
sale or transfer after the expiration of the Restricted Period of any Initial
Security acquired pursuant to Regulation S, all requirements that such Initial
Security bear the Restricted Securities Legend shall cease to apply and the
requirements requiring any such Initial Security be issued in global form shall
continue to apply.
(vi)
Any
Additional Securities sold in a registered offering shall not be required to
bear the Restricted Securities Legend.
(g)
Cancellation
or Adjustment of Global Security. At such time as all beneficial interests
in a
particular Global Security have been exchanged for Definitive Securities or
a
particular Global Security has been redeemed, repurchased or canceled in whole
and not in part, each such Global Security shall be returned to or retained
and
canceled by the Trustee in accordance with Section 2.11 of this Indenture.
At
any time prior to such cancellation, if any beneficial interest in a Global
Security is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Security or
for
Definitive Securities, the principal amount of Securities represented by such
Global Security shall be reduced accordingly and an endorsement shall be made
on
such Global Security by the Trustee or by the Depository at the direction of
the
Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in
the
form of a beneficial interest in another Global Security, such other Global
Security shall be increased accordingly and an endorsement shall be made on
such
Global Security by the Trustee or by the Depository at the direction of the
Trustee to reflect such increase.
(h)
Obligations
with Respect to Transfers and Exchanges of Securities.
(i)
To
permit
registrations of transfers and exchanges, the Issuer shall execute and the
Trustee shall authenticate, Definitive Securities and Global Securities at
the
Registrar’s request.
(ii)
No
service charge shall be made for any registration of transfer or exchange,
but
the Issuer may require payment of a sum sufficient to cover any transfer tax,
assessments, or similar governmental charge payable in connection therewith
(other than any such transfer taxes, assessments or similar governmental charge
payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this
Indenture).
(iii)
Prior
to
the due presentation for registration of transfer of any Security, the Issuer,
the Trustee, a Paying Agent or the Registrar may deem and treat the
person
in
whose name a Security is registered as the absolute owner of such Security
for
the purpose of receiving payment of principal of and interest on such Security
and for all other purposes whatsoever, whether or not such Security is overdue,
and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall
be
affected by notice to the contrary.
(iv)
All
Securities issued upon any transfer or exchange pursuant to the terms of this
Indenture shall evidence the same debt and shall be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
(i)
No
Obligation of the Trustee.
(i)
The
Trustee shall have no responsibility or obligation to any beneficial owner
of a
Global Security, a member of, or a participant in the Depository or any other
Person with respect to the accuracy of the records of the Depository or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of any
notice (including any notice of redemption or repurchase) or the payment of
any
amount, under or with respect to such Securities. All notices and communications
to be given to the Holders and all payments to be made to the Holders under
the
Securities shall be given or made only to the registered Holders (which shall
be
the Depository or its nominee in the case of a Global Security). The rights
of
beneficial owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the Depository.
The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members, participants and any
beneficial owners.
(ii)
The
Trustee shall have no obligation or duty to monitor, determine or inquire as
to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Depository participants,
members or beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
EXHIBIT
A
[FORM
OF
FACE OF INITIAL SECURITY]
[Global
Securities Legend]
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS 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 SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART,
TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED
TO
ON THE REVERSE HEREOF.
FOR
THE
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT.
[Restricted
Securities Legend]
“THIS
NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION
S
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION
FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
APPLICABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A)
ABOVE.”
Each
Definitive Security shall bear the following additional legend:
“IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.”
[FORM
OF
INITIAL SECURITY]
No.
$__________
11%
Senior Subordinated Note due 2016
CUSIP
No.
ISIN
No.
BPC
ACQUISITION CORP., a Delaware corporation, promises to pay to Cede & Co., or
registered assigns, the principal sum [of Dollars] [listed on the Schedule
of
Increases or Decreases in Global Security attached hereto] on September 15,
2016.
Interest
Payment Dates: March 15, June 15, September 15 and December 15
Record
Dates: March 1, June 1, September 1 and December 1
Additional
provisions of this Security are set forth on the other side of this
Security.
IN
WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
BPC
ACQUISITION CORP.
By:_______________________
Name:
Title:
Dated:
TRUSTEE’S
CERTIFICATE OF
AUTHENTICATION
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as
Trustee, certifies that this is
one
of
the Securities
referred
to in the Indenture.
By:_______________________________
Authorized
Signatory
*/
If
the
Security is to be issued in global form, add the Global Securities Legend and
the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL SECURITIES -
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.
[FORM
OF
REVERSE SIDE OF INITIAL SECURITY]
11%
Senior Subordinated Note due 2016
1.
Interest
(a)
BPC
ACQUISITION CORP., a Delaware corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called
the
“Company”), promises to pay interest on the principal amount of this Security at
the Applicable Rate (as defined below), based on a 360-day year of twelve 30-day
months. “Applicable Rate” shall mean a rate per annum equal to 11.0%. All of the
interest on the Securities will be payable in cash; provided, however, that
on
any interest payment date on or prior to the third anniversary of the Closing,
the Company shall have the option to pay a portion of the interest payable
on
such date up to an amount equal to the difference between the Applicable Rate
and 8.0% per annum by capitalizing such interest and adding it to the then
outstanding principal amount of the Securities. In the event that the Company
opts to capitalize interest, it shall provide written notice to the Paying
Agent, no later than three Business Days prior to the relevant Interest Payment
Date of (i) the amount of interest that it intends to capitalize, and (ii)
the
aggregate principal amount of Notes outstanding after giving effect to the
capitalization of interest. After the third anniversary of Closing, all of
the
interest on the Securities will only be payable in cash. The Company shall
pay
interest quarterly on March 15, June 15, September 15 and December 15 of each
year, commencing December 15, 2006. Interest on the Securities shall accrue
from
the most recent date to which interest has been paid or duly provided for or,
if
no interest has been paid or duly provided for, from September 20, 2006 until
the principal hereof is due. The Company shall pay interest on overdue principal
at the rate borne by the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
So
long
as GSMP constitutes the Required Holders, in the event that a default in payment
on the Securities or an Event of Default under clauses (c), (d), (f) or (g)
of
Section 6.01 of the Indenture occurs, the interest rate on the outstanding
principal amount of the Securities, and otherwise on the overdue amount, if
any,
due on the Securities shall increase by 200 basis points above the otherwise
applicable interest rate for any period during which such a default or event
of
default remains uncured, and such increase shall be payable in cash from time
to
time on demand.
(b)
Registration
Rights Agreement. The Holder of this Security is entitled to the benefits of
an
Exchange and Registration Rights Agreement, dated as of September 20, 2006,
among the Company, the Guarantors and the Initial Purchasers.
2.
Method
of
Payment
The
Company shall pay interest on the Securities (except defaulted interest) to
the
Persons who are registered Holders at the close of business on March 1, June
1,
September 1 and December 1 next preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date (whether or not a Business Day). Holders must surrender Securities
to the Paying Agent to collect principal payments. The Company shall pay
principal, premium, if any, and interest in money
of
the
United States of America that at the time of payment is legal tender for
payment
of public and private debts. Payments in respect of the Securities represented
by a Global Security (including principal, premium, if any, and interest)
shall
be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company or any successor depositary. The
Company shall make all payments in respect of a certificated Security (including
principal, premium, if any, and interest) at the office of the Paying Agent,
except that, at the option of the Company, payment of interest may be made
by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of
a
Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire
transfer to a U.S. dollar account maintained by the payee with a bank in
the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or Paying Agent to such effect designating such account
no
later than 30 days immediately preceding the relevant due date for payment
(or
such other date as the Trustee may accept in its discretion).
3.
Paying
Agent and Registrar
Initially,
Wells Fargo Bank, National Association, a national banking association (the
“Trustee”), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any of
its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent
or
Registrar.
4.
Indenture
The
Company issued the Securities under an Indenture dated as of September , 2006
(the “Indenture”), among the Company and the Trustee. The terms of the
Securities 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. §§ 77aaa
77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms defined in
the Indenture and not defined herein have the meanings ascribed thereto in
the
Indenture. The Securities are subject to all terms and provisions of the
Indenture, and the Holders (as defined in the Indenture) are referred to the
Indenture and the TIA for a statement of such terms and provisions
The
Securities are senior subordinated unsecured obligations of the Company. This
Security is one of the Initial Securities referred to in the Indenture. The
Securities include the Initial Securities, any Additional Securities and any
Exchange Securities issued in exchange for the Initial Securities or any
Additional Securities pursuant to the Indenture; provided, however that so
long
as GSMP constitutes the Required Holders, the Company shall not issue Additional
Securities of the same series to the extent that after giving effect to such
issuance GSMP would not constitute the Required Holders, unless the Company
receives the prior written consent of GSMP. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, make certain Investments and other Restricted Payments,
pay
dividends and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, issue or sell shares of capital stock of the Company
and such Restricted Subsidiaries, enter into or permit certain transactions
with
Affiliates, create or incur Liens and make Asset Sales. The Indenture also
imposes limitations on the ability of the Company and each Guarantor to
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of its property.
To
guarantee the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture
and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Securities
and the Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a senior subordinated basis pursuant
to
the terms of the Indenture.
5.
Optional
Redemption
Except
as
set forth in the following two paragraphs, the Securities shall not be
redeemable at the option of the Company prior to September 20, 2010. Thereafter,
the Securities shall be redeemable at the option of the Company, in whole at
any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of Current Accretion Amount), plus accrued and unpaid Cash Interest,
if any, to the redemption date (subject to the right of the Holders of record
on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the 12-month period commencing on September
20
of the years set forth below:
Year
|
Redemption
Price
|
2010
|
107.000%
|
2011
|
105.500%
|
2012
|
102.750%
|
2013
and thereafter
|
100.000%
|
In
addition, prior to September 20, 2010, the Company may redeem the Securities
at
their option, in whole at any time or in part from time to time, at a redemption
price equal to (x) 100% of the Current Accretion Amount of the Securities being
redeemed, plus (y) (y) all accrued and unpaid Cash Interest on the Securities
being redeemed to the date of redemption, plus (z) a Make-Whole Premium defined
as an amount equal to (A) the present value of (i) the remaining payments of
interest (excluding interest that is included in the definition of Current
Accretion Amount) on the Securities being redeemed and (ii) the redemption
price
of the Securities being redeemed (assuming that on September 20, 2010, the
principal amount of the Securities being redeemed would be redeemed at 107%
of
the Current Accretion Amount thereof, together with accrued and unpaid Cash
Interest thereon to the date of redemption, and using an annual discount factor
(applied quarterly) equal to the applicable Treasury Rate plus 50 basis points),
less (B) the principal amount of the Securities being redeemed as of the day
of
determination; provided, however, that in no case shall the Make-Whole Premium
be less than zero.
Notwithstanding
the foregoing, at any time and from time to time on or prior to September 20,
2009, the Company may redeem in the aggregate up to 35% of the aggregate Current
Accretion Amount of the Securities (calculated after giving effect to any
issuance of Additional Securities),
with
the
net cash proceeds of one or more Equity Offerings (1) by the Company or (2)
by
any direct or indirect parent of the Company, in each case, to the extent
the
net cash proceeds thereof are contributed to the common equity capital of
the
Company or used to purchase Capital Stock (other than Disqualified Stock)
of the
Company from it, at a redemption price equal to 11% of the Current Accretion
Amount plus accrued and unpaid Cash Interest, if any, to the redemption date
(subject to the right of the Holders of record on the relevant record date
to
receive interest due on the relevant interest payment date); provided, however,
that at least 65% of the aggregate Current Accretion Amount of the Securities
(calculated after giving effect to any issuance of Additional Securities)
must
remain outstanding after each such redemption; and provided, further, that
such
redemption shall occur within 90 days after the date on which any such Equity
Offering is consummated upon not less than 30 nor more than 60 days’ notice
mailed to each Holder of Securities being redeemed and otherwise in accordance
with the procedures set forth in the Indenture. Notice of any redemption
upon
any Equity Offering may be given prior to the completion thereof, and any
such
redemption or notice may, at the Company’s discretion, be subject to one or more
conditions precedent, including, but not limited to, completion of the related
Equity Offering.
6.
Sinking
Fund
The
Securities are not subject to any sinking fund.
7.
Notice
of
Redemption
Notice
of
redemption will be mailed by first-class mail at least 30 days but not more
than
60 days before the redemption date to each Holder of Securities to be redeemed
at his, her or its registered address. Securities in denominations larger than
$2,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest on
all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with a Paying Agent on or before the redemption date and certain
other
conditions are satisfied, on and after such date, interest ceases to accrue
on
such Securities (or such portions thereof) called for redemption.
8.
Repurchase
of Securities at the Option of the Holders upon Change of Control and Asset
Sales
Upon
the
occurrence of a Change of Control, each Holder shall have the right, subject
to
certain conditions specified in the Indenture, to cause the Company to
repurchase all or any part of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), as provided in, and subject to the terms of, the
Indenture.
In
accordance with Section 4.06 of the Indenture, the Company will be required
to
offer to purchase Securities upon the occurrence of certain events.
9.
Subordination
The
Securities and Guarantees are subordinated to Senior Indebtedness, as defined
in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must
be paid before the Securities and Guarantees may be paid. The Company and each
Guarantor agree, and each Holder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.
10.
Denominations;
Transfer; Exchange
The
Securities are in registered form, without coupons, in minimum denominations
of
$2,000 and any integral multiple of $1,000. A Holder shall register the transfer
of or exchange of Securities in accordance with the Indenture. Upon any
registration of transfer or exchange, the Registrar and the Trustee may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes required by law or permitted by the Indenture.
The Registrar need not register the transfer of or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed in
part, the portion of the Security not to be redeemed) or to transfer or exchange
any Securities for a period of 15 days prior to a selection of Securities to
be
redeemed.
11.
Persons
Deemed Owners
The
registered Holder of this Security shall be treated as the owner of it for
all
purposes.
12.
Unclaimed
Money
If
money
for the payment of principal or interest remains unclaimed for two years, the
Trustee and a Paying Agent shall pay the money back to the Company at their
written request unless an abandoned property law designates another Person.
After any such payment, the Holders entitled to the money must look to the
Company for payment as general creditors and the Trustee and a Paying Agent
shall have no further liability with respect to such monies.
13.
Discharge
and Defeasance
Subject
to certain conditions, the Company at any time may terminate some of or all
its
obligations under the Securities and the Indenture if the Company deposits
with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Securities to redemption or maturity, as the case may
be.
14.
Amendment;
Waiver
Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the
Securities may be amended with the written consent of the Holders of at least
a
majority in aggregate principal amount of the outstanding Securities (voting
as
a single class) and (ii) any past default or compliance with any provisions
may
be waived with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Holder, the Company
and
the Trustee may amend the Indenture or the Securities (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to provide for the assumption by a
Successor Company of the obligations of the Company under the Indenture and
the
Notes;
(iii)
to
provide for the assumption by a Successor Guarantor of the obligations of
a
Guarantor under the Indenture and its Guarantee; (iv) to provide for
uncertificated Securities in addition to or in place of certificated Securities
(provided that the uncertificated Securities are issued in registered form
for
purposes of Section 163(f) of the Code, or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the Code);
(v) to add Guarantees with respect to the Securities; (vi) to add additional
covenants of the Company for the benefit of the Holders or to surrender rights
and powers conferred on the Company; (vii) to comply with the requirements
of
the SEC in order to effect or maintain the qualification of the Indenture
under
the TIA; (viii) to make any change that does not adversely affect the rights
of
any Holder; or (ix) to provide for the issuance of the Exchange Securities
or
Additional Securities.
15.
Defaults
and Remedies
If
an
Event of Default occurs (other than an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company) and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of
the outstanding Securities, in each case, by notice to the Company, may declare
the principal of, premium, if any, and accrued but unpaid interest on all the
Securities to be due and payable. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company occurs, the
principal of, premium, if any, and interest on all the Securities shall become
immediately due and payable without any declaration or other act on the part
of
the Trustee or any Holders. Under certain circumstances, the Holders of a
majority in principal amount of the outstanding Securities may rescind any
such
acceleration with respect to the Securities and its consequences.
If
an
Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered
to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due,
no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event
of
Default is continuing, (ii) the Holders of at least 25% in principal amount
of
the outstanding Securities have requested the Trustee in writing to pursue
the
remedy, (iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the Trustee has not
complied with such request within 60 days after the receipt of the request
and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Securities have not given the Trustee a
direction inconsistent with such request within such 60-day period. Subject
to
certain restrictions, the Holders of a majority in principal amount of the
outstanding Securities are given the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture
or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability. Prior to taking
any action under the Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
16.
Trustee
Dealings with the Company
Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture,
in
its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with and collect obligations owed to it by
the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not
Trustee.
17.
No
Recourse Against Others
No
director, officer, employee, incorporator or holder of any equity interests
in
the Company or of any Guarantor or any direct or indirect parent corporation,
as
such, shall have any liability for any obligations of the Company or the
Guarantors under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
of
Securities by accepting a Security waives and releases all such
liability.
18.
Authentication
This
Security shall not be valid until an authorized signatory of the Trustee (or
an
authenticating agent) manually signs the certificate of authentication on the
other side of this Security.
19.
Abbreviations
Customary
abbreviations may be used in the name of a Holder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20.
Governing
Law
THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
21.
CUSIP
Numbers; ISINs
The
Company has caused CUSIP numbers and ISINs to be printed on the Securities
and
has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption
as a convenience to the Holders. No representation is made as to the accuracy
of
such numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The
Company will furnish to any Holder of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of
this Security.
ASSIGNMENT
FORM
To
assign
this Security, fill in the form below:
I
or we
assign and transfer this Security to:
_________________________________________________________________________
(Print
or
type assignee’s name, address and zip code)
_________________________________________________________________________
(Insert
assignee’s soc. sec. or tax I.D. No.)
and
irrevocably appoint
agent
to transfer
this Security on the books of the Company. The agent may substitute another
to
act for him.
_________________________________________________________________________
Date:________________________
Your
Signature:______________________________________________
__________________________________________________________________________
Sign
exactly as your name appears on the other side of this Security.
Signature
Guarantee:
Date:
_________________________________________________________
_______________________________________________________________
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
|
Signature
of Signature Guarantee
|
CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION
OF TRANSFER RESTRICTED SECURITIES
This
certificate relates to $_________ principal amount of Securities held in (check
applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The
undersigned (check one box below):
|
□
|
has
requested the Trustee by written order to deliver in exchange for
its
beneficial interest in the Global Security held by the Depository
a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated
above);
|
|
□
|
has
requested the Trustee by written order to exchange or register the
transfer of a Security or
Securities.
|
In
connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule
144(k) under the Securities Act, the undersigned confirms that such Securities
are being transferred in accordance with its terms:
CHECK
ONE
BOX BELOW
(1)
□
to
the
Company; or
(2)
□
to
the
Registrar for registration in the name of the Holder, without transfer;
or
(3)
□
pursuant
to an effective registration statement under the Securities Act of 1933;
or
(4)
□
inside
the United States to a “qualified institutional buyer” (as defined in Rule 144A
under the Securities Act of 1933) that purchases for its own account or for
the
account of a qualified institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in each case pursuant to and
in
compliance with Rule 144A under the Securities Act of 1933; or
(5)
□
outside
the United States in an offshore transaction within the meaning of Regulation
S
under the Securities Act in compliance with Rule 904 under the Securities Act
of
1933 and such Security shall be held immediately after the transfer through
Euroclear or Clearstream until the expiration of the Restricted Period (as
defined in the Indenture); or
(6)
□
to
an
institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act of 1933) that has furnished to the Trustee a signed
letter containing certain representations and agreements; or
(7)
□
pursuant
to another available exemption from registration provided by Rule 144 under
the
Securities Act of 1933.
Unless
one of the boxes is checked, the Trustee will refuse to register any of the
Securities evidenced by this certificate in the name of any Person other than
the registered Holder thereof; provided, however, that if box (5), (6) or (7)
is
checked, the Company or the Trustee may require, prior to registering any such
transfer of the Securities, such legal opinions, certifications and other
information as the Company or the Trustee 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 1933.
Date:
_____________________________
Your
Signature: __________________________________________
Signature
Guarantee:
Date:
______________________________________________________________
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
|
Signature
of Signature Guarantee
|
TO
BE
COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The
undersigned represents and warrants that it is purchasing this Security 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 “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act of 1933, 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
[TO
BE
ATTACHED TO GLOBAL SECURITIES]
SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY
The
initial principal amount of this Global Security is $______________. The
following increases or decreases in this Global Security have been
made:
Date
of Exchange
|
Amount
of decrease
in
Principal Amount of this
Global
Security
|
Amount
of increase in
Principal
Amount of this
Global
Security
|
Principal
amount of this
Global
Security following
such
decrease
or increase
|
Signature
of authorized
signatory
of Trustee or
Securities
Custodian
|
OPTION
OF
HOLDER TO ELECT PURCHASE
If
you
want to elect to have this Security purchased by the Company pursuant to Section
4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the
box:
Asset
Sale □
Change
of
Control □
If
you
want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, state the amount ($2,000 or any integral multiple of
$1,000):
$
Date:
_______________________________
|
Your
Signature: _______________________________________
|
|
Sign
exactly as your name appears on the other side of this
Security)
|
Signature
Guarantee:
|
|
|
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
EXHIBIT
B
[FORM
OF
FACE OF EXCHANGE SECURITY]
[Global
Securities Legend]
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS 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 SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART,
TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED
TO
ON THE REVERSE HEREOF.
FOR
THE
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT.
No.
$__________
11%
Senior Subordinated Note due 2016
CUSIP
No.
______
ISIN
No.
______
BPC
ACQUISITION CORP., a Delaware corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called
the
“Company”), promises to pay to Cede & Co., or registered assigns, the
principal sum [of Dollars] [listed on the Schedule of Increases or Decreases
in
Global Security attached hereto]
1
on
September 15, 2016.
Interest
Payment Dates: March 15, June 15, September 15 and December 15
Record
Dates: March 1, June 1, September 1 and December 1
Additional
provisions of this Security are set forth on the other side of this
Security.
IN
WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
BPC
ACQUISITION CORP.
By: ____________________________
Name:
Title:
Dated:
1
Use the
Schedule of Increases and Decreases language if Security is in Global
Form.
TRUSTEE’S
CERTIFICATE OF
AUTHENTICATION
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as
Trustee, certifies that this is
one
of
the Securities
referred
to in the Indenture.
By:
_____________________________
Authorized
Signatory
______________________
*/
If
the
Security is to be issued in global form, add the Global Securities Legend and
the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL SECURITIES -
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.
[FORM
OF
REVERSE SIDE OF EXCHANGE SECURITY]
11%
Senior Subordinated Note due 2016
1.
Interest
(a)
BPC
ACQUISITION CORP., a Delaware corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called
the
“Company”), promises to pay interest on the principal amount of this Security at
the Applicable Rate (as defined below), based on a 360-day year of twelve 30-day
months. “Applicable Rate” shall mean a rate per annum equal to 11.0%. All of the
interest on the Securities will be payable in cash; provided, however, that
on
any interest payment date on or prior to the third anniversary of the Closing,
the Company shall have the option to pay a portion of the interest payable
on
such date up to an amount equal to the difference between the Applicable Rate
and 8.0% per annum by capitalizing such interest and adding it to the then
outstanding principal amount of the Securities. In the event that the Company
opts to capitalize interest, it shall provide written notice to the Paying
Agent, no later than three Business Days prior to the relevant Interest Payment
Date of (i) the amount of interest that it intends to capitalize, and (ii)
the
aggregate principal amount of Notes outstanding after giving effect to the
capitalization of interest. After the third anniversary of Closing, all of
the
interest on the Securities will only be payable in cash. The Company shall
pay
interest quarterly March 15, June 15, September 15 and December 15 of each
year,
commencing December 15, 2006. Interest on the Securities shall accrue from
the
most recent date to which interest has been paid or duly provided for or, if
no
interest has been paid or duly provided for, from September 20, 2006 until
the
principal hereof is due. The Company shall pay interest on overdue principal
at
the rate borne by the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
So
long
as GSMP constitutes the Required Holders, in the event that a default in payment
on the Securities or an Event of Default under clause (c), (d), (f) or (g)
of
Section 6.01 of the Indenture occurs, the interest rate on the outstanding
principal amount of the Securities, and otherwise on the overdue amount, if
any,
due on the Securities shall increase by 200 basis points above the otherwise
applicable interest rate for any period during which such a default or event
of
default remains uncured, and such increase shall be payable in cash from time
to
time on demand.
2.
Method
of
Payment
The
Company shall pay interest on the Securities (except defaulted interest) to
the
Persons who are registered Holders at the close of business on March 1, June
1,
September 1 and December 15 next preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date (whether or not a Business Day). Holders must surrender Securities
to the Paying Agent to collect principal payments. The Company shall pay
principal, premium, if any, and interest in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of the Securities represented by a Global
Security (including principal, premium, if any, and interest) shall be made
by
wire transfer of immediately available funds to the accounts specified by The
Depository Trust Company or any successor depositary. The Company shall make
all
payments
in respect of a certificated Security (including principal, premium, if any,
and
interest), at the office of the Paying Agent, except that, at the option
of the
Company, payment of interest may be made by mailing a check to the registered
address of each Holder thereof; provided, however, that payments on the
Securities may also be made, in the case of a Holder of at least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such
Holder
elects payment by wire transfer by giving written notice to the Trustee or
Paying Agent to such effect designating such account no later than 30 days
immediately preceding the relevant due date for payment (or such other date
as
the Trustee may accept in its discretion).
3.
Paying
Agent and Registrar
Initially,
Wells Fargo Bank, National Association, a national banking association (the
“Trustee”), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any of
its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent
or
Registrar.
4.
Indenture
The
Company issued the Securities under an Indenture dated as of September , 2006
(the “Indenture”), among the Company and the Trustee. The terms of the
Securities 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. §§ 77aaa
77bbbb) as in effect on the date of the Indenture (the “TIA”). Terms defined in
the Indenture and not defined herein have the meanings ascribed thereto in
the
Indenture. The Securities are subject to all terms and provisions of the
Indenture, and the Holders (as defined in the Indenture) are referred to the
Indenture and the TIA for a statement of such terms and provisions.
The
Securities are senior subordinated unsecured obligations of the Company. This
Security is one of the Exchange Securities referred to in the Indenture. The
Securities include the Initial Securities, any Additional Securities and any
Exchange Securities issued in exchange for the Initial Securities or any
Additional Securities pursuant to the Indenture; provided, however that so
long
as GSMP constitutes the Required Holders, the Company shall not issue Additional
Securities of the same series to the extent that after giving effect to such
issuance GSMP would not constitute the Required Holders, unless the Company
receives the prior written consent of GSMP. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, make certain Investments and other Restricted Payments,
pay
dividends and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, issue or sell shares of capital stock of the Company
and such Restricted Subsidiaries, enter into or permit certain transactions
with
Affiliates, create or incur Liens and make Asset Sales. The Indenture also
imposes limitations on the ability of the Company and each Guarantor to
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of its property.
To
guarantee the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture
and
the
Securities when and as the same shall be due and payable, whether at maturity,
by acceleration or otherwise, according to the terms of the Securities and
the
Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a senior subordinated basis pursuant
to
the terms of the Indenture.
5.
Optional
Redemption
Except
as
set forth in the following two paragraphs, the Securities shall not be
redeemable at the option of the Company prior to September 20, 2010. Thereafter,
the Securities shall be redeemable at the option of the Company, in whole at
any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of Current Accretion Amount), plus accrued and unpaid Cash Interest,
if any, to the redemption date (subject to the right of the Holders of record
on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the 12-month period commencing on September
20
of the years set forth below:
Year
|
Redemption
Price
|
2010
|
107.000%
|
2011
|
105.500%
|
2012
|
102.750%
|
2013
and thereafter
|
100.000%
|
In
addition, prior to September 20, 2010, the Company may redeem the Securities
at
their option, in whole at any time or in part from time to time, at a redemption
price equal to (x) 100% of the Current Accretion Amount of the Securities being
redeemed, plus (y) (y) all accrued and unpaid Cash Interest on the Securities
being redeemed to the date of redemption, plus (z) a Make-Whole Premium defined
as an amount equal to (A) the present value of (i) the remaining payments of
interest (excluding interest that is included in the definition of Current
Accretion Amount) on the Securities being redeemed and (ii) the redemption
price
of the Securities being redeemed (assuming that on September 20, 2010, the
principal amount of the Securities being redeemed would be redeemed at 107%
of
the Current Accretion Amount thereof, together with accrued and unpaid Cash
Interest thereon to the date of redemption, and using an annual discount factor
(applied quarterly) equal to the applicable Treasury Rate plus 50 basis points),
less (B) the principal amount of the Securities being redeemed as of the day
of
determination; provided, however, that in no case shall the Make-Whole Premium
be less than zero.
Notwithstanding
the foregoing, at any time and from time to time on or prior to September 20,
2009, the Company may redeem in the aggregate up to 35% of the aggregate Current
Accretion Amount of the Securities (calculated after giving effect to any
issuance of Additional Securities), with the net cash proceeds of one or more
Equity Offerings (1) by the Company or (2) by any direct or indirect parent
of
the Company, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of the Company or used to purchase
Capital Stock (other than Disqualified Stock) of the Company from it, at a
redemption price equal to 11% of the Current Accretion
Amount
plus accrued and unpaid Cash Interest, if any, to the redemption date (subject
to the right of the Holders of record on the relevant record date to receive
interest due on the relevant interest payment date); provided, however, that
at
least 65% of the aggregate Current Accretion Amount of the Securities
(calculated after giving effect to any issuance of Additional Securities)
must
remain outstanding after each such redemption; and provided, further, that
such
redemption shall occur within 90 days after the date on which any such Equity
Offering is consummated upon not less than 30 nor more than 60 days’ notice
mailed to each Holder of Securities being redeemed and otherwise in accordance
with the procedures set forth in the Indenture. Notice of any redemption
upon
any Equity Offering may be given prior to the completion thereof, and any
such
redemption or notice may, at the Company’s discretion, be subject to one or more
conditions precedent, including, but not limited to, completion of the related
Equity Offering.
6.
Sinking
Fund
The
Securities are not subject to any sinking fund.
7.
Notice
of
Redemption
Notice
of
redemption will be mailed by first-class mail at least 30 days but not more
than
60 days before the redemption date to each Holder of Securities to be redeemed
at his, her or its registered address. Securities in denominations larger than
$2,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest on
all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with a Paying Agent on or before the redemption date and certain
other
conditions are satisfied, on and after such date interest ceases to accrue
on
such Securities (or such portions thereof) called for redemption.
8.
Repurchase
of Securities at the Option of the Holders upon Change of Control and Asset
Sales
Upon
the
occurrence of a Change of Control, each Holder shall have the right, subject
to
certain conditions specified in the Indenture, to cause the Company to
repurchase all or any part of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of the Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date), as provided in, and subject to the terms of, the
Indenture.
In
accordance with Section 4.06 of the Indenture, the Company will be required
to
offer to purchase Securities upon the occurrence of certain events.
9.
Subordination
The
Securities and Guarantees are subordinated to Senior Indebtedness, as defined
in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must
be paid before the Securities and Guarantees may be paid. The Company and each
Guarantor agrees, and each Holder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.
10.
Denominations;
Transfer; Exchange
The
Securities are in registered form, without coupons, in minimum denominations
of
$2,000 and any integral multiple of $1,000. A Holder shall register the transfer
of or exchange of Securities in accordance with the Indenture. Upon any
registration of transfer or exchange, the Registrar and the Trustee may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes required by law or permitted by the Indenture.
The Registrar need not register the transfer of or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed in
part, the portion of the Security not to be redeemed) or to transfer or exchange
any Securities for a period of 15 days prior to a selection of Securities to
be
redeemed.
11.
Persons
Deemed Owners
The
registered Holder of this Security shall be treated as the owner of it for
all
purposes.
12.
Unclaimed
Money
If
money
for the payment of principal or interest remains unclaimed for two years, the
Trustee and a Paying Agent shall pay the money back to the Company at their
written request unless an abandoned property law designates another Person.
After any such payment, the Holders entitled to the money must look to the
Company for payment as general creditors and the Trustee and a Paying Agent
shall have no further liability with respect to such monies.
13.
Discharge
and Defeasance
Subject
to certain conditions, the Company at any time may terminate some of or all
its
obligations under the Securities and the Indenture if the Company deposits
with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Securities to redemption or maturity, as the case may
be.
14.
Amendment;
Waiver
Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the
Securities may be amended with the written consent of the Holders of at least
a
majority in aggregate principal amount of the outstanding Securities (voting
as
a single class) and (ii) any past default or compliance with any provisions
may
be waived with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities. Subject to certain exceptions
set forth in the Indenture, without the consent of any Holder, the Company
and
the Trustee may amend the Indenture or the Securities (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to provide for the assumption by a
Successor Company of the obligations of the Company under the Indenture and
the
Notes; (iii) to provide for the assumption by a Successor Guarantor of the
obligations of a Guarantor under the Indenture and its Guarantee; (iv) to
provide for uncertificated Securities in addition to or in place of certificated
Securities (provided that the uncertificated Securities are issued in registered
form for purposes
of
Section 163(f) of the Code, or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code); (v) to add
Guarantees with respect to the Securities; (vi) to add additional covenants
of
the Company for the benefit of the Holders or to surrender rights and powers
conferred on the Company; (vii) to comply with the requirements of the SEC
in
order to effect or maintain the qualification of the Indenture under the
TIA;
(viii) to make any change that does not adversely affect the rights of any
Holder; or (ix) to provide for the issuance of the Exchange Securities or
Additional Securities.
15.
Defaults
and Remedies
If
an
Event of Default occurs (other than an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company) and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of
the outstanding Securities, in each case, by notice to the Company, may declare
the principal of, premium, if any, and accrued but unpaid interest on all the
Securities to be due and payable. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company occurs, the
principal of, premium, if any, and interest on all the Securities shall become
immediately due and payable without any declaration or other act on the part
of
the Trustee or any Holders. Under certain circumstances, the Holders of a
majority in principal amount of the outstanding Securities may rescind any
such
acceleration with respect to the Securities and its consequences.
If
an
Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered
to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due,
no
Holder may pursue any remedy with respect to the Indenture or the Securities
unless (i) such Holder has previously given the Trustee notice that an Event
of
Default is continuing, (ii) the Holders of at least 25% in principal amount
of
the outstanding Securities have requested the Trustee in writing to pursue
the
remedy, (iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the Trustee has not
complied with such request within 60 days after the receipt of the request
and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Securities have not given the Trustee a
direction inconsistent with such request within such 60-day period. Subject
to
certain restrictions, the Holders of a majority in principal amount of the
outstanding Securities are given the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture
or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability. Prior to taking
any action under the Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
16.
Trustee
Dealings with the Company
Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture,
in
its individual or any other capacity, may become the owner or pledgee of
Securities
and may otherwise deal with and collect obligations owed to it by the Company
or
its Affiliates and may otherwise deal with the Company or its Affiliates
with
the same rights it would have if it were not Trustee.
17.
No
Recourse Against Others
No
director, officer, employee, incorporator or holder of any equity interests
in
the Company or of any Guarantor or any direct or indirect parent corporation,
as
such, shall have any liability for any obligations of the Company or the
Guarantors under the Securities, the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
of
Securities by accepting a Security waives and releases all such
liability.
18.
Authentication
This
Security shall not be valid until an authorized signatory of the Trustee (or
an
authenticating agent) manually signs the certificate of authentication on the
other side of this Security.
19.
Abbreviations
Customary
abbreviations may be used in the name of a Holder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20.
Governing
Law
THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
21.
CUSIP
Numbers; ISINs
The
Company has caused CUSIP numbers and ISINs to be printed on the Securities
and
has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption
as a convenience to the Holders. No representation is made as to the accuracy
of
such numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The
Company will furnish to any Holder of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of
this Security.
ASSIGNMENT
FORM
To
assign
this Security, fill in the form below:
I
or we
assign and transfer this Security to:
______________________________________________________________________
(Print
or
type assignee’s name, address and zip code)
______________________________________________________________________
(Insert
assignee’s soc. sec. or tax I.D. No.)
and
irrevocably appoint
agent
to transfer
this Security on the books of the Company. The agent may substitute another
to
act for him.
______________________________________________________________________
Date:
___________________________
Your
Signature: ____________________________________________
______________________________________________________________________
Sign
exactly as your name appears on the other side of this Security.
Signature
Guarantee:
Date: ____________________________________________________________
_____________________________________________________
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
|
Signature
of Signature Guarantee
|
OPTION
OF
HOLDER TO ELECT PURCHASE
If
you
want to elect to have this Security purchased by the Company pursuant to Section
4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the
box:
Asset
Sale □
Change
of
Control □
If
you
want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, state the amount ($2,000 or any integral multiple of
$1,000)
$
Date:
_____________________________________
|
Your
Signature: ________________________________________________
|
|
Sign
exactly as your name appears on the other side of this
Security)
|
Signature
Guarantee:
|
|
|
Signature
must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor program reasonably
acceptable to the Trustee
|
[TO
BE
ATTACHED TO GLOBAL SECURITIES]
SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL SECURITY
The
initial principal amount of this Global Security is $______________. The
following increases or decreases in this Global Security have been
made:
Date
of Exchange
|
Amount
of decrease in
Principal
Amount of this
Global
Security
|
Amount
of increase in
Principal
Amount of this
Global
Security
|
Principal
amount of this
Global
Security following
such
decrease or increase
|
Signature
of authorized
signatory
of Trustee or
Securities
Custodian
|
EXHIBIT
C
[FORM
OF]
TRANSFEREE
LETTER OF REPRESENTATION
BPC
Acquisition Corp.
c/o
Wells
Fargo Bank, National Association
●
●
Attention:
Vice President
Ladies
and Gentlemen:
This
certificate is delivered to request a transfer of $[ ] principal amount of
the
11% Senior Subordinated Notes due 2016 (the “Securities”) of BPC ACQUISITION
CORP. (the “Issuer”).
Upon
transfer, the Securities would be registered in the name of the new beneficial
owner as follows:
Name:
________________________
Address:
_____________________
Taxpayer
ID Number: __________
The
undersigned represents and warrants to you that:
1.
We
are an
institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act of 1933, as amended (the “Securities Act”)),
purchasing for our own account or for the account of such an institutional
“accredited investor” at least $100,000 principal amount of the Securities, and
we are acquiring the Securities not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act. We 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 Securities, and
we
invest in or purchase securities similar to the Securities in the normal course
of our business. We, and any accounts for which we are acting, are each able
to
bear the economic risk of our or its investment.
2.
We
understand that the Securities have not been registered under the Securities
Act
and, unless so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account
for
which we are purchasing Securities to offer, sell or otherwise transfer such
Securities prior to the date that is two years after the later of the date
of
original issue and the last date on which the Issuer or any affiliate of the
Issuer was the owner of such Securities (or any predecessor thereto)
(the
“Resale Restriction Termination Date”) only (a) in the United States to a person
whom we reasonably believe is a qualified institutional buyer (as defined
in
rule 144A under the Securities Act) in a transaction meeting the requirements
of
Rule 144A, (b) outside the United States in an offshore transaction in
accordance with Rule 904 of Regulation S under the Securities Act, (c) pursuant
to an exemption from registration under the Securities Act provided by Rule
144
thereunder (if applicable) or (d) pursuant to an effective registration
statement under the Securities Act, in each of cases (a) through (d) in
accordance with any applicable securities laws of any state of the United
States. In addition, we will, and each subsequent holder is required to,
notify
any purchaser of the Security evidenced hereby of the resale restrictions
set
forth above. The foregoing restrictions on resale will not apply subsequent
to
the Resale Restriction Termination Date. If any resale or other transfer
of the
Securities is proposed to be made to an institutional “accredited investor”
prior to the Resale Restriction Termination Date, the transferor shall deliver
a
letter from the transferee substantially in the form of this letter to the
Issuer and the Trustee, which shall provide, among other things, that the
transferee is an institutional “accredited investor” within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation
of
the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee
reserve the right prior to the offer, sale or other transfer prior to the
Resale
Restriction Termination Date of the Securities pursuant to clause 1(b), 1(c)
or
1(d) above to require the delivery of an opinion of counsel, certifications
or
other information satisfactory to the Issuer and the Trustee.
Dated:
____________________
TRANSFEREE:
____________________,
By:
_____________________________
EXHIBIT
D
[FORM
OF
SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”) dated as of [ ], among [GUARANTOR]
(the “New Guarantor”), a subsidiary of BPC ACQUISITION CORP. (or its successor),
a Delaware corporation (the “Issuer”) and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, as trustee under the indenture
referred to below (the “Trustee”).
W
I T N E
S S E T H :
WHEREAS
the Issuer and the existing Guarantors have heretofore executed and delivered
to
the Trustee an indenture (as amended, supplemented or otherwise modified, the
“Indenture”) dated as of September 20, 2006, providing for the issuance of the
Issuer’s 11% Senior Subordinated Notes due 2016 (the “Securities”), initially in
the aggregate principal amount of $425,000,000;
WHEREAS
Section 4.11 of the Indenture provides that under certain circumstances the
Issuer is required to cause the New Guarantor to execute and deliver to the
Trustee a supplemental indenture pursuant to which the New Guarantor shall
unconditionally guarantee all the Issuer’s Obligations under the Securities and
the Indenture pursuant to a Guarantee on the terms and conditions set forth
herein; and
WHEREAS
pursuant to Section 9.01 of the Indenture, the Trustee, the Issuer and the
existing Guarantors are authorized to execute and deliver this Supplemental
Indenture;
NOW
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor,
the Issuer and the Trustee mutually covenant and agree for the equal and ratable
benefit of the holders of the Securities as follows:
1.
Defined
Terms. As used in this Supplemental Indenture, terms defined in the Indenture
or
in the preamble or recital hereto are used herein as therein defined, except
that the term “Holders” in this Guarantee shall refer to the term “Holders” as
defined in the Indenture and the Trustee acting on behalf of and for the benefit
of such Holders. The words “herein,” “hereof” and “hereby” and other words of
similar import used in this Supplemental Indenture refer to this Supplemental
Indenture as a whole and not to any particular section hereof.
2.
Agreement
to Guarantee. The New Guarantor hereby agrees, jointly and severally with all
existing Guarantors (if any), to unconditionally guarantee the Issuer’s
Obligations under the Securities and the Indenture on the terms and subject
to
the conditions set forth in Articles 11 and 12 of the Indenture and to be bound
by all other applicable provisions of the Indenture and the Securities and
to
perform all of the obligations and agreements of a Guarantor under the
Indenture.
3.
Notices.
All notices or other communications to the New Guarantor shall be given as
provided in Section 13.02 of the Indenture.
4.
Ratification
of Indenture; Supplemental Indentures Part of Indenture. Except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and
all
the terms, conditions and provisions thereof shall remain in full force and
effect. This Supplemental Indenture shall form a part of the Indenture for
all
purposes, and every holder of Securities heretofore or hereafter authenticated
and delivered shall be bound hereby.
5.
Governing
Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
6.
Trustee
Makes No Representation. The Trustee makes no representation as to the validity
or sufficiency of this Supplemental Indenture.
7.
Counterparts.
The parties may sign any number of copies of this Supplemental Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
8.
Effect
of
Headings. The Section headings herein are for convenience only and shall not
effect the construction thereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to
be duly executed as of the date first above written.
[NEW
GUARANTOR]
By: ___________________________
Name:
Title:
BPC
ACQUISITION CORP.
By: ___________________________
Name:
Title:
WELLS
FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE
By: ___________________________
Name:
Title:
FIRST
SUPPLEMENTAL INDENTURE
(this
“
First
Supplemental Indenture
”),
dated
as of September 20, 2006, by and among BPC Holding Corporation, a Delaware
corporation (the “
Company
”),
the
guarantors listed on Schedule A attached hereto (the “
Guarantors
”),
BPC
Acquisition Corp., a Delaware corporation
(“
Merger
Sub
”),
and
Wells Fargo Bank, National Association, as Trustee (the “
Trustee
”).
WITNESSETH:
WHEREAS
,
Merger
Sub has heretofore executed and delivered to the Trustee an Indenture (the
“
Indenture
”),
dated
as of September 20, 2006, providing for the issuance of $425,000,000
aggregate principal amount of its 11% Senior Subordinated Notes due 2016
(the
“
Notes
”);
WHEREAS
,
the
Company desires to execute and deliver this First Supplemental Indenture
to the
Trustee for the purpose of becoming liable, as the issuer of the Notes, for
all
of Merger Sub’s obligations under the Indenture and the Notes;
WHEREAS
the
Guarantors desire to execute and deliver this First Supplemental Indenture
to
the Trustee for the purpose of guaranteeing the payment of all obligations
of
the Issuer under the Indenture and the Notes and the performance within
applicable grace periods of all other obligations of the Issuers under the
Indenture and the Notes, on the terms and conditions set
forth in
Article 11 of the Indenture; and
WHEREAS
,
pursuant to Section 9.01 of the Indenture, the Trustee and Merger Sub are
authorized to execute and deliver this First Supplemental
Indenture.
NOW
THEREFORE
,
in
consideration of the foregoing and for good and valuable consideration, the
receipt of which is hereby acknowledged, the Company, the Guarantors, Merger
Sub
and the Trustee mutually covenant and agree for the equal and ratable benefit
of
the Holders of the Notes as follows:
SECTION
1.
Capitalized
Terms.
Capitalized terms used herein but not defined shall have the meanings assigned
to them in the Indenture.
SECTION
2.
Issuers.
The
Company hereby agree that they are henceforth liable, as issuer of the Notes,
for all of Merger Sub’s obligations under the Indenture and the Notes, on the
terms and conditions set forth therein.
SECTION
3.
Guarantees.
Each of
the Guarantors hereby agrees, jointly and severally with all other Guarantors,
to guarantee the Company’s obligations under the Notes on the terms and subject
to the conditions set forth in Article 11 of the Indenture and to be bound
by all applicable provisions of the Indenture.
SECTION
4.
Ratification
of Indenture; Supplemental Indenture Part of Indenture.
Except
as expressly amended hereby, the Indenture is in all respects ratified and
confirmed and all the terms, conditions and provisions thereof shall remain
in
full force and effect. This First Supplemental Indenture shall form a part
of
the Indenture for all purposes, and every holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby.
SECTION
5.
Governing
Law.
THIS
FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION
6.
The
Trustee
.
The
Trustee shall not be responsible in any manner whatsoever for or in respect
of
the validity or sufficiency of this First Supplemental Indenture or for or
in
respect of the recitals contained herein, all of which are made solely by
the
Company, Merger Sub and the Guarantors. Except as otherwise expressly provided
herein, no duties, responsibilities or liabilities are assumed, or shall
be
construed to be assumed by the Trustee by reason of this First Supplemental
Indenture. This First Supplemental Indenture is executed and accepted by
the
Trustee subject to all the terms and conditions set forth in the Indenture
with
the same force and effect as if those terms and conditions were repeated
at
length herein and made applicable to the Trustee with respect hereto. In
entering into this First Supplemental Indenture, the Trustee shall be entitled
to the benefit of every provision of the Indenture relating to the conduct
or
affecting the liability or affording protection to the Trustee, whether or
not
elsewhere herein so provided.
SECTION
7.
Counterparts.
The
parties may sign any number of copies of this First Supplemental Indenture.
Each
signed copy shall be an original, but all of them together represent the
same
agreement.
SECTION
8.
Effect
of Headings.
The
Section headings herein are for convenience only and shall not effect the
construction of this First Supplemental Indenture.
[
The
rest of this page has been intentionally left blank.
]
IN
WITNESS WHEREOF, the
par
t
ies
have
caused this First Supplemental Indenture
to
be
duly executed as of the date first written above.
ISSUER
BPC
HOLDING CORPORATION
By:______________________________________
Name:
James
M.
Kratochvil
Title:
Executive
Vice President, Chief Financial Officer,
Treasurer
and Secretary
BPC
ACQUISITION CORP.
By:______________________________________
Name:
Michael
Jupiter
Title:
Vice
President and Secretary
IN
WITNESS WHEREOF, the
par
t
ies
have
caused this First Supplemental Indenture
to
be
duly executed as of the date first written above.
GUARANTORS
BERRY
PLASTICS CORPORATION
AEROCON,
INC.
BERRY
IOWA CORPORATION
BERRY
PLASTICS DESIGN CORPORATION
BERRY
PLASTICS TECHNICAL SERVICES, INC.
BERRY
STERLING CORPORATION
CPI
HOLDING CORPORATION
KNIGHT
PLASTICS, INC.
PACKERWARE
CORPORATION
PESCOR,
INC.
POLY-SEAL
CORPORATION
VENTURE
PACKAGING, INC.
VENTURE
PACKAGING MIDWEST, INC.
KERR
GROUP, INC.
SAFFRON
ACQUISITION CORP.
SUN
COAST
INDUSTRIES, INC.
SETCO,
LLC
TUBED
PRODUCTS, LLC
CARDINAL
PACKAGING, INC.
LANDIS
PLASTICS, INC.
BERRY
PLASTICS ACQUISITION CORPORATION III
BERRY
PLASTICS ACQUISITION CORPORATION V
BERRY
PLASTICS ACQUISITION CORPORATION VII
BERRY
PLASTICS ACQUISITION CORPORATION VIII
BERRY
PLASTICS ACQUISITION CORPORATION IX
BERRY
PLASTICS ACQUISITION CORPORATION X
BERRY
PLASTICS ACQUISITION CORPORATION XI
BERRY
PLASTICS ACQUISITION CORPORATION XII
BERRY
PLASTICS ACQUISITION CORPORATION XIII
By:
______________________________
Name:
James M.
Kratochvil
Title:
Executive Vice President, Chief
Financial
Officer, Treasurer
and
Secretary
of each
Guarantor
BERRY
PLASTICS ACQUISITION CORPORATION XV, LLC
By:
________________________________
Name:
James M. Kratochvil
Title:
Manager
IN
WITNESS WHEREOF, the
par
t
ies
have
caused this First Supplemental Indenture
to
be
duly executed as of the date first written above.
TRUSTEE
WELLS
FARGO BANK, NATIONAL ASSOCIATION, as trustee
By:______________________________________________
Name:
Title:
EXCHANGE
AND REGISTRATION RIGHTS AGREEMENT
Dated
as
of September 20, 2006
by
and
among
BPC
ACQUISITION CORP.
and
GOLDMAN,
SACHS & CO.
GSMP
2006
ONSHORE US, LTD.
GSMP
2006
OFFSHORE US, LTD.
GSMP
2006
INSTITUTIONAL US, LTD.
Table
of Contents
1.
|
Definitions
|
1
|
2.
|
Exchange
Offer
|
4
|
3.
|
Shelf
Registration Statement
|
6
|
4.
|
Additional
Interest
|
7
|
5.
|
Registration
Procedures
|
8
|
6.
|
Indemnification
|
14
|
7.
|
Rule
144A
|
17
|
8.
|
Underwritten
Registrations of Registrable Notes
|
17
|
9.
|
Miscellaneous
|
17
|
EXCHANGE
AND REGISTRATION RIGHTS AGREEMENT
BPC
Acquisition Corp., a Delaware corporation (the “
Company
”
which
term, following the Acquisition shall mean and refer to BPC Holding Corporation,
a Delaware corporation, as the surviving corporation in the merger pursuant
to
which the Acquisition is effectuated), is issuing and selling to Goldman, Sachs
& Co., a New York partnership (the “
Initial
Purchaser
”)
for
resale to GS Mezzanine Partners 2006 Onshore US, Ltd., an exempted Cayman
Islands limited liability company (“
GSMP
Onshore
”),
GSMP
2006 Offshore US, Ltd., an exempted Cayman Islands limited liability company
(“
GSMP
Offshore”
),
GSMP
2006 Institutional US, Ltd., an exempted Cayman Islands limited liability
company (“
GSMP
Institutional
”
and
together with GSMP Onshore, GSMP Offshore and the Initial Purchaser, the
“
Purchasers
”),
$425
million original aggregate principal amount of 11% senior subordinated notes
of
the Company due 2016 (the “
Notes
”
which
term shall include any notes issued in exchange, substitution, or replacement
therefor) issued on the date hereof pursuant to the Note Purchase Agreement,
dated as of the date hereof (the “
Purchase
Agreement
”),
among
the Company, the Purchasers and certain of their affiliates. As an inducement
to
the Purchasers to enter into the Purchase Agreement, the Company agrees with
the
Purchasers, for the benefit of the Holders (as defined below) of the Notes
(including, without limitation, the Purchasers), as follows:
Capitalized
terms that are used herein without definition and are defined in the Purchase
Agreement shall have the respective meanings ascribed to them in the Purchase
Agreement. As used herein the following terms shall have the meanings specified
herein (it being understood that defined terms shall include in the singular
number, the plural, and in the plural, the singular):
Additional
Interest
:
See
Section 4(a).
Agreement
:
This
Exchange and Registration Rights Agreement, dated as of the Closing Date, among
the Company and the Purchasers.
Applicable
Period
:
See
Section 2(e).
Blackout
Period
:
See
Section 5.
Business
Day
:
A day
that is not a Saturday, a Sunday or a day on which banking institutions in
New
York are authorized or required by law, regulation or executive order to be
closed.
Closing
Date
:
September 20, 2006.
Company
:
See the
introductory paragraph to this Agreement.
Day
:
Unless
otherwise expressly provided, a calendar day.
Demand
Date
:
See
Section 2(a).
Demand
Registration Request
:
See
Section 2(a).
Effectiveness
Date
:
The day
that is six months after any Demand Date.
Effectiveness
Period
:
See
Section 3(a).
Event
Date
:
See
Section 4(b).
Exchange
Act
:
The
Securities Exchange Act of 1934, as amended, and the rules and regulations
of
the SEC promulgated thereunder.
Exchange
Notes
:
11%
Senior Subordinated Notes Due 2016 of the Company, identical in all material
respects to the Notes except for restrictive legends and additional interest
provisions.
Exchange
Offer
:
See
Section 2(a).
Exchange
Offer Period
:
See
Section 2(a).
Exchange
Offer Registration Statement
:
See
Section 2(a).
Filing
Date
:
The
90
th
day
after the Demand Date;
provided
,
that
if the
Filing Date would otherwise fall on a day that is not a Business Day, then
the
Filing Date shall be the next succeeding Business Day.
GSMP
Institutional
:
See the
introductory paragraph to this Agreement.
GSMP
Offshore
:
See the
introductory paragraph to this Agreement.
GSMP
Onshore
:
See the
introductory paragraph to this Agreement.
Holder
:
Any
registered holder of Registrable Notes.
Indemnified
Party
:
See
Section 6(c).
Indemnifying
Party
:
See
Section 6(c).
Indenture
:
The
Indenture, dated as of the Closing Date, between the Company and the Trustee,
as
trustee, pursuant to which the Notes are being issued, as amended or
supplemented from time to time in accordance with the terms
thereof.
Initial
Purchaser
:
See the
introductory paragraph to this Agreement.
Inspectors
:
See
Section 5(n).
Losses
:
See
Section 6(a).
Maximum
Contribution Amount
:
See
Section 6(d).
NASD
:
National Association of Securities Dealers, Inc.
Notes
:
See the
introductory paragraph to this Agreement.
Participant
:
See
Section 6(a).
Participating
Broker-Dealer
:
See
Section 2(e).
Person
:
An
individual, trustee, corporation, partnership, limited liability company, joint
stock company, trust, unincorporated association, union, business association,
firm, government agency or political subdivision thereof, or other legal
entity.
Prospectus
:
The
prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Notes covered by such Registration Statement, 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 paragraph to this Agreement.
Purchasers
:
See the
introductory paragraph to this Agreement.
Records
:
See
Section 5(n).
Registrable
Notes
:
(i)
Notes and (ii) Exchange Notes received in the Exchange Offer as to which Section
2(h)(ii) is applicable until, in each case, the earliest to occur of (i) a
Registration Statement (other than, with respect to any Exchange Notes as to
which Section 2(h)(ii) hereto is applicable, the Exchange Offer Registration
Statement) covering such Note or Exchange Note has been declared effective
by
the SEC, (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, or Exchange Note,
as the case may be, ceases to be outstanding or (iv) such Note or Exchange
Note, as the case may be, has been or may be resold without restriction pursuant
to Rule 144(k) (as amended or replaced) under the Securities
Act.
Registration
Statement
:
Any
registration statement of the Company filed with the SEC under the Securities
Act (including, but not limited to, the Exchange Offer Registration Statement
and the Shelf Registration Statement) that covers any of the Registrable Notes,
pursuant to the provisions of this Agreement, 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 an 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.
Rule
430A
:
Rule
430A 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
:
The
Notes and the Exchange Notes.
Securities
Act
:
The
Securities Act of 1933, as amended, and the rules and regulations of the SEC
promulgated thereunder.
Shelf
Notice
:
See
Section 2(h).
Shelf
Registration Statement
:
See
Section 3(a).
TIA
:
The
Trust Indenture Act of 1939, as amended.
Trustee
:
The
trustee under the Indenture.
WKSI
:
See
Section 5.
(a)
Unless
the Exchange Offer would violate applicable law or a policy of the SEC or its
staff, the Company shall upon the written demand of holders (a “
Demand
Registration Request
”)
of a
majority in principal amount of the Registrable Notes given, on not more than
one occasion at any time commencing three months after the first to occur of
the
effectiveness of any registered public offering for cash of common stock of
the
Company or any parent holding company of the Company or of debt securities
of
the Company or any of its subsidiaries or any such holding company (each such
date, a “
Demand
Date
”)
(i) prepare and file with the SEC no later than the Filing Date, a
registration statement (the “
Exchange
Offer Registration Statement
”)
on an
appropriate form under the Securities Act with respect to an offer (an
“
Exchange
Offer
”)
to the
Holders of Notes to issue and deliver to such Holders, in exchange for the
Notes, a like principal amount of Exchange Notes, (ii) use commercially
reasonable efforts to cause the Exchange Offer Registration Statement to become
effective no later than the Effectiveness Date, (iii) use commercially
reasonable efforts to keep the Exchange Offer open for at least 20 Business
Days
(or longer if required by applicable law) after the date notice of the Exchange
Offer is mailed to Holders, and (iv) use commercially reasonable efforts to
consummate the Exchange Offer and issue, on or prior to 30 Business Days after
the Effectiveness Date (such period, the “
Exchange
Offer Period
”),
Exchange Notes in exchange for all Notes validly tendered and not withdrawn
prior thereto in the Exchange Offer. An Exchange Offer shall not be subject
to
any conditions, other than that (1) an Exchange Offer does not violate
applicable law or policy of the SEC or its staff; (2) no action or
proceeding shall have been instituted or threatened in any court or by any
governmental agency that might materially impair the ability of the Company
to
proceed with an Exchange Offer, and no material adverse development shall have
occurred in any existing action or proceeding with respect to the Company;
and
(3) all governmental approvals shall have been obtained, which approvals
the Company deems necessary for the consummation of an Exchange Offer.
(b)
The
Exchange Notes shall be issued under, and entitled to the benefits of, the
Indenture.
(c)
Interest
on each of the Exchange Notes will be payable from the later of (x) the last
interest payment date on which interest was paid on the Notes surrendered in
exchange therefor, or (y) if the Notes are surrendered for exchange on a date
within a period on or after 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.
(d)
The
Company may require each Holder as a condition to participation in the Exchange
Offer to represent (i) that any Exchange
Notes
received by it will be acquired in the ordinary course of its business, (ii)
that at the time of the commencement and consummation of the Exchange Offer
such
Holder has not entered into any arrangement or understanding with any Person
to
participate in the distribution (within the meaning of the Securities Act)
of
the Exchange Notes in violation of the provisions of the Securities Act,
(iii)
that such Holder is not an affiliate of the Company within the meaning of
the
Securities Act, or, if it is an affiliate of the Company, that it will comply
with the registration and prospectus delivery requirements of the Securities
Act
to the extent applicable to it, (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 the
Exchange Notes and (v) if such Holder is a Participating Broker-Dealer, that
such Holder 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, and that it will deliver a Prospectus in connection with any
resale
of the Exchange Notes and otherwise comply with the applicable provisions
of the
Securities Act with respect to such resale.
(e)
The
Company shall include within the Prospectus contained in the Exchange Offer
Registration Statement a section entitled “Plan of Distribution” which shall
contain all information that the SEC may require 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 for its own account in exchange for Notes
that were acquired by it as a result of market-making or other trading activity
(a “
Participating
Broker-Dealer
”).
Such
“Plan of Distribution” section shall allow, to the extent permitted by
applicable policies and regulations of the SEC, or other applicable law, the
use
of the Prospectus by all Participating Broker-Dealers, and include a statement
describing the manner in which Participating Broker-Dealers may resell the
Exchange Notes. The Company shall use commercially reasonable 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 Participating Broker-Dealers 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 the resale by such
Participating Broker-Dealers of the Exchange Notes;
provided
,
however
,
that
such period shall not be required to exceed 90 days (unless such period is
extended pursuant to the third to last paragraph of Section 5 below) (the
“
Applicable
Period
”).
|
(f)
|
In
connection with the Exchange Offer, the Company shall:
|
|
(i)
|
mail
or cause to be mailed to each Holder of record a copy of the Prospectus
forming part of the Exchange Offer Registration Statement, together
with
an appropriate letter of transmittal and related
documents;
|
|
(ii)
|
utilize
the services of a depository for the Exchange Offer with an address
in the
Borough of Manhattan, the City of New York, which may be the Trustee
or an
affiliate thereof;
|
|
(iii)
|
permit
Holders to withdraw tendered Registrable 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
|
|
(iv)
|
otherwise
comply in all material respects with all applicable
laws.
|
|
(g)
|
As
soon as practicable after the close of the Exchange Offer the Company
shall:
|
|
(i)
|
accept
for exchange all Registrable Notes validly tendered pursuant to the
Exchange Offer and not validly
withdrawn;
|
|
(ii)
|
deliver
to the Trustee for cancellation all Registrable Notes so accepted
for
exchange; and
|
|
(iii)
|
cause
the Trustee promptly to authenticate and deliver to each Holder,
Exchange
Notes equal in principal amount to the Notes of such Holder so accepted
for exchange;
provided
that
,
in the case of any Notes held in global form by a depository,
authentication and delivery to such depositary of one or more replacement
Notes in global form in an equivalent principal amount thereto for
the
account of such Holders in accordance with the Indenture shall satisfy
such authentication and delivery
requirement.
|
(h)
If,
(i)
applicable interpretations of the staff of the SEC or other legal requirements
would not permit the consummation of the Exchange Offer as contemplated by
this
Section 2 or (ii) in the case of any Holder that participates in the Exchange
Offer, but does not receive Exchange Notes that it may resell to the public
without delivering a prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales
(other than due solely to the status of such Holder as an affiliate of the
Company within the meaning of the Securities Act), then, in each case, the
Company shall promptly deliver to the Holders and the Trustee, if any, written
notice thereof (the “
Shelf
Notice
”)
and
shall on one and only one occasion file a Shelf Registration Statement pursuant
to Section 3.
3.
|
Shelf
Registration Statement
|
If
a
Shelf Notice is properly delivered pursuant to Section 2(h), then:
(a)
Shelf
Registration Statement
.
The
Company 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 (the “
Shelf
Registration Statement
”).
The
Company shall use commercially reasonable efforts to file with the SEC the
Shelf
Registration Statement within 90 days of the delivery of the Shelf Notice and
shall use commercially reasonable efforts to cause such Shelf Registration
Statement to be declared effective under the Securities Act as promptly as
practicable thereafter. The Shelf Registration Statement 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 reasonably designated by them. The
Company shall not permit any securities other than the Registrable Notes to
be
included in any Shelf Registration Statement. No Holder of Registrable Notes
shall be entitled to include any of its Registrable Notes in any Shelf
Registration Statement pursuant to this Agreement unless such Holder furnishes
to the Company and the Trustee in writing, within 20 days after receipt of
a
written request therefor, such information as the Company, after conferring
with
counsel with regard to information relating to Holders that would be required
by
the SEC to be included in such Shelf Registration Statement or Prospectus
included therein, may reasonably request for inclusion in any Shelf Registration
Statement or Prospectus included therein. The Company shall use commercially
reasonable efforts to keep the Shelf Registration Statement continuously
effective under the Securities Act until the date which is two years from the
Closing Date (the “
Effectiveness
Period
”),
or
such shorter period ending when (i) all Registrable Notes covered by the Shelf
Registration Statement have been sold in the manner set forth and as
contemplated in the Shelf Registration Statement;
provided
,
however
,
that
the Company may suspend the effectiveness of the Shelf Registration Statement
by
written notice to any Holders solely (A) as a result of the filing of a
post-effective amendment to the Shelf
Registration
Statement to incorporate audited financial information with respect to the
Company where such post-effective amendment is not yet effective and needs
to be
declared effective to permit Holders to use the related Prospectus or (B)
to the
extent and for so long as permitted by the third to last paragraph of Section
5.
(b)
Supplements
and Amendments
.
The
Company shall promptly supplement and amend any Shelf Registration Statement
if
required by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration Statement, if required by
the
Securities Act, or if reasonably requested in writing by the Holders of a
majority in aggregate principal amount of the Registrable Notes covered by
such
Shelf Registration Statement with respect to the information included therein
regarding one or more of such Holders.
(a)
The
Company acknowledges and agrees that the Holders of Registrable Notes will
suffer damages if the Company fails to fulfill its material obligations under
Section 2 and/or Section 3 hereof and that it would not be feasible to ascertain
the extent of such damages with precision. Accordingly, the Company agrees
to
pay 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 Shelf Registration
Statement has been filed on or prior to the Filing Date or (B) notwithstanding
that the Company has consummated or will consummate an Exchange Offer, the
Company is required to file a Shelf Registration and if such Shelf Registration
is not filed on or prior to the date required by this Agreement, Additional
Interest shall accrue on the principal amount of the Notes over and above any
stated interest at a rate of 0.25% per annum of the principal amount of such
Notes for the first 90 days immediately following the Filing Date, such
Additional Interest rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period, subject to the proviso in the last
sentence of this subsection (a);
(ii)
if
(A)
neither the Exchange Offer Registration Statement nor the Shelf Registration
Statement is declared effective on or prior to the Effectiveness Date, or (B)
notwithstanding that the Company has consummated or will consummate an Exchange
Offer, the Company is required to file a Shelf Registration Statement and such
Shelf Registration Statement is not declared effective by the SEC on or prior
to
the 180
th
day
following the date such Shelf Registration Statement was filed, Additional
Interest shall accrue on the principal amount of the Notes over and above any
stated interest at a rate of 0.25% per annum of the principal amount of such
Notes for the first 90 days immediately following the Effectiveness Date, such
Additional Interest rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period, subject to the proviso in the last
sentence of this subsection (a);
(iii)
if
(A)
the Company has not exchanged Exchange Notes for all Notes validly tendered
in
accordance with the terms of the Exchange Offer on or prior to the end of the
Exchange Offer Period, or (B) if applicable, a Shelf Registration Statement
has
been declared effective and such Shelf Registration Statement ceases to be
effective at any time prior to the expiration of the Effectiveness Period (other
than during such time as all Notes registered thereunder have been disposed
of
or as contemplated in the proviso to the last sentence of Section 3(a)), then
Additional Interest shall accrue on the principal amount of the Notes, over
and
above any stated interest, at a rate of 0.25% per annum of the principal amount
of such Notes for the first 90 days commencing on (x) the Business Day following
the end of the Exchange Offer Period,
in
the case of clause (A) above, or (y) the day such Shelf Registration Statement
ceases to be effective in the case of clause (B) above, such Additional Interest
rate increasing by an additional 0.25% per annum at the beginning of each
subsequent 90-day period, subject to the proviso in the last sentence of this
subsection (a);
provided
,
however
,
that
the maximum Additional Interest rate on the Notes may not exceed at any one
time
in the aggregate 1.0% per annum; and
provided
further
,
that
(1) upon the filing of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of (i) above), (2) upon the effectiveness
of
the Exchange Offer Registration Statement or a Shelf Registration Statement
(in
the case of (ii) above), or (3) upon the exchange of Exchange Notes for all
Notes tendered (in the case of (iii)(A) above), or upon the effectiveness of
a
Shelf Registration Statement, which had ceased to remain effective (in the
case
of (iii)(B) above), Additional Interest on the Notes as a result of such clause
(or the relevant subclause thereof), as the case may be, shall cease to accrue,
although it shall still accrue to the extent at such time another provision
of
clauses (i) through (iii) is applicable. Additional Interest will not accrue
under more than one of the foregoing clauses (i) through (iii) at any one time.
Notwithstanding the foregoing, no Additional Interest shall become due in the
event of any delay in filing or effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement or any delay in the consummation
of the Exchange Offer or any cessation of the effectiveness of the Shelf
Registration Statement that occurs by reason of a Blackout Period.
(b)
The
Company shall notify the Trustee within 3 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 clause (a)(i), (a)(ii) or
(a)(iii) of this Section 4 will be payable in cash on the dates and in the
manner provided in the Indenture, commencing with the first such quarterly
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
|
In
connection with the filing of any Registration Statement pursuant to Section
2
or 3 hereof, the Company shall effect such registrations to permit the sale
of such 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 Company hereunder, the Company
shall:
(a)
prepare
and file with the SEC on or prior to the Filing Date, the Exchange Offer
Registration Statement or if the Exchange Offer Registration Statement is not
filed because of the circumstances contemplated by Section 2(h), a Shelf
Registration Statement as prescribed by Section 3, and use commercially
reasonable efforts to cause each such Registration Statement to become effective
and remain effective as provided herein;
provided
that
,
if (1)
a Shelf Registration Statement is filed pursuant to Section 3 or (2) a
Prospectus contained in an Exchange Offer Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, before filing any Registration Statement or Prospectus or
any
amendments or supplements thereto, or any related free writing prospectus,
the
Company shall, if requested, furnish to and afford the Holders of the
Registrable Notes to be registered pursuant to such Shelf Registration
Statement, or each Participating Broker-Dealer and to their counsel, 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 2 Business Days prior to such
filing). The Company shall not file any such Registration Statement or
Prospectus or any amendments or supplements thereto, or any free writing
prospectus related thereto, in respect of which the Holders must provide
information for the inclusion therein without the Holders being afforded an
opportunity to review such documentation 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, , shall reasonably object in writing on a timely basis;
(b)
provide
an indenture trustee for the Registrable Notes or the Exchange Notes, as the
case may be, and cause the Indenture (or other indenture relating to the
Registrable Notes) to be qualified under the TIA not later than the effective
date of the first Registration Statement; and in connection therewith, 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
commercially reasonable 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;
(c)
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 them with respect to the disposition of
all
securities covered by such Registration 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 Company shall not, during the Applicable Period, voluntarily
take any action that would result in Participating Broker-Dealers seeking to
sell Exchange Notes not being able to sell such Exchange Notes during that
period, unless such action is required by applicable law, rule or regulation
or
permitted by this Agreement;
(d)
furnish
to such selling Holders and Participating Broker-Dealers who so request in
writing in a timely fashion (i) such reasonable number of copies of such
Registration Statement and of each amendment and supplement thereto (in each
case including any documents incorporated therein by reference and all exhibits)
and (ii) such reasonable number of copies of the Prospectus included in such
Registration Statement (including each preliminary Prospectus), each amendment
and supplement thereto, and each free writing prospectus prepared by the Company
or used with the Company’s prior written consent in connection therewith, and
such reasonable number of copies of the final Prospectus as filed by the Company
pursuant to Rule 424(b) under the Securities Act, in conformity with the
requirements of the Securities Act and each amendment and supplement thereto.
The Company hereby consents to the use of the Prospectus or free writing
prospectus prepared by the Company or used with the Company’s prior written
consent for the following purposes by each of the selling Holders of Registrable
Notes or each such Participating Broker-Dealer, as the case may be, 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 thereto, and each such selling
Holder and Participating Broker-Dealer agrees that it will not, and dealer
involved with any such offering or sale will not, use any written materials
in
connection therewith except for materials referred to in this sentence and
otherwise consented to in writing by the Company;
(e)
if
(1) a
Shelf Registration Statement is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 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 Company 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, promptly (but in any event within 2 Business Days),
and confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment or free writing prospectus prepared
by
the Company, or used with the Company’s prior written consent, has been filed,
and, with respect to a Registration Statement or any post-effective amendment,
when the same has become effective (including in such notice a written statement
that any Holder may, upon request, obtain, without charge, 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 Prospectus or the initiation of any
proceedings for that purpose, (iii) of the receipt by the Company 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 Participating Broker-Dealer for offer
or
sale in any jurisdiction, or the initiation or threatening of any proceeding
for
such purpose, (iv) 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, any free writing prospectus
prepared by the Company or used with the Company’s prior written consent, 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 and 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 any reasonable determination by the Company that a
post-effective amendment to a Registration Statement would be
appropriate;
(f)
use
commercially reasonable 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 United States
jurisdiction (other than any jurisdiction to which the Company is not required
to register or qualify Registrable Notes or Exchange Notes for offer or sale
in
accordance with paragraph (h) of this Section 5), and, if any such order is
issued, to use commercially reasonable efforts to obtain the withdrawal of
any
such order at the earliest possible date;
(g)
if
(A) a
Shelf Registration Statement is filed pursuant to Section 3 or (B) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period
or
the Holders of a majority in aggregate principal amount of the Registrable
Notes
being sold in connection with an underwritten offering, (i) promptly incorporate
in a Prospectus supplement or post-effective amendment or free writing
prospectus such information or revisions to information therein relating to
such
selling Holders as such Holders or their counsel reasonably request in writing
to be included or made therein and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment or such free writing
prospectus as soon as practicable after the Company has received notification
of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment or free writing prospectus;
provided
,
however
,
that
the Company shall not be required to take any action hereunder that would,
in
the written opinion of counsel to the Company, violate applicable
laws;
(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
commercially reasonable 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 and their respective counsel in connection
with the registration or qualification (or exemption from such registration
or
qualification) of such Registrable Notes or Exchange Notes, as the case may
be,
for offer and sale under the securities or blue sky laws of such jurisdictions
within the United States as any selling Holder, Participating Broker-Dealer
reasonably requests in writing;
provided
that
where
Exchange Notes held by Participating Broker-Dealers or Registrable Notes are
offered other than through an underwritten offering, the Company agrees to
cause
its counsel, or permit counsel for the Required Holders, to perform blue sky
investigations and file any registrations and qualifications required to be
filed pursuant to this Section 5(h), 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
that
the
Company 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 it to general service of process in any such jurisdiction where it
is
not then so subject or (C) subject itself to taxation in any such jurisdiction
where it is not then so subject;
(i)
if
(A) a
Shelf Registration Statement is filed pursuant to Section 3 or (B) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
cooperate with the selling Holders of Registrable Notes 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 (subject to applicable
requirements contained in the Indenture) and registered in such names as the
Holders may reasonably request in writing at least five Business Days prior
to
any sale of such Registrable Notes;
(j)
if
(1) a
Shelf Registration Statement is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 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 Section 5(e)(v) or 5(e)(vi)
hereof, as promptly as practicable, prepare and file with the SEC, at the
expense of the Company, 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 a free
writing prospectus prepared by the Company or used with the Company’s prior
written consent, 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 or free writing
prospectus prepared by the Company or used with the Company’s prior written
consent will be delivered by a selling Holder or a Participating Broker-Dealer,
such Prospectus and free writing 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;
(k)
[Intentionally
Omitted];
(l)
prior
to
the initial issuance of the Exchange Notes, (i) provide the Trustee with one
or
more certificates for the Registrable Notes in a form eligible for deposit
with
The Depository Trust Company and (ii) provide a CUSIP number for the Exchange
Notes;
(m)
[Intentionally
Omitted];
(n)
if
(1) a
Shelf Registration Statement is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Offer Registration Statement filed pursuant to Section
2 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 Registrable Notes
being sold, or each such Participating Broker-Dealer, as the case may be, 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 (collectively, the “
Inspectors
”),
upon
written request, at the offices where normally kept, during reasonable business
hours, all pertinent financial and other records and pertinent corporate
documents of the Company and its subsidiaries (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
the Company and its subsidiaries to supply all information reasonably requested
in writing by any such Inspector in connection with such due diligence
responsibilities. Each Inspector shall agree in writing that it will keep the
Records confidential and not disclose, or use in connection with any market
transactions in violation of any applicable securities laws, any of the Records
unless (i) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, (ii) the information in
such
Records is public or has been made generally available to the public other
than
as a result of a disclosure or failure to safeguard by such Inspector, or (iii)
disclosure of such information is, in the reasonable written opinion of counsel
for any Inspector, necessary or advisable in connection with any action, claim,
suit or proceeding, directly or indirectly, involving or potentially involving
such Inspector and arising out of, based upon, related to, or involving this
Agreement, or any transaction contemplated hereby or arising hereunder,
including to demonstrate that such Inspector has satisfied its due diligence
defense in connection therewith. 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 Company unless and until such is made
generally available to the public. Each Inspector, each selling Holder of such
Registrable Notes and each such Participating Broker-Dealer will be required
to
further agree that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company and,
to
the extent practicable, use commercially reasonable efforts to allow the
Company, at its expense, to undertake appropriate action to prevent disclosure
of the Records deemed confidential;
(o)
comply
with all applicable rules and regulations of the SEC and make generally
available to the security holders of the Company with regard to any applicable
Registration Statement earning statements (which need not be audited) 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 45
days
after the end of any fiscal quarter (or 90 days after the end of any 12-month
period if such period is a fiscal year) commencing on the first day of the
first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;
(p)
[Intentionally
Omitted];
(q)
cooperate
with each seller of Registrable Notes covered by any Registration Statement,
participating in the disposition of such Registrable Notes and their respective
counsel in connection with any filings required to be made with the
NASD;
(r)
use
commercially reasonable efforts to take all other steps reasonably necessary
to
effect the registration of the Registrable Notes covered by a Registration
Statement contemplated hereby; and
(s)
take
all
reasonable action to ensure that any free writing prospectus prepared by the
Company or used with the Company’s prior written consent in connection with any
registration covered by Section 2 or 3 complies in all material respects with
the Securities Act, is filed in accordance with the Securities Act to the extent
required thereby, is retained in accordance with the Securities Act to the
extent required thereby and, when taken together with the related prospectus,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
To
the
extent the Company is a well-known seasoned issuer (as defined in Rule 405
under
the Securities Act) (a “
WKSI
”)
at the
time any Demand Registration Request is submitted to the Company, and such
Demand Registration Request requests that the Company file an automatic shelf
registration statement (as defined in Rule 405 under the Securities Act) (an
“automatic shelf registration statement”) on Form S-3, the Company shall file an
automatic shelf registration statement which covers those Registrable Securities
which are requested to be registered. If the Company does not pay the filing
fee
covering the Registrable Securities at the time the automatic shelf registration
statement is filed, the Company agrees to pay such fee at such time or times
as
the Registrable Securities are to be sold. If at any time when the Company
is
required to re-evaluate its WKSI status the Company determines that it is not
a
WKSI, the Company shall use its commercially reasonable efforts to refile the
shelf registration statement on Form S-3 and, if such form is not available,
Form S-1 and keep such registration statement effective during the period during
which such registration statement is required to be kept effective.
The
Company may require each seller of Registrable Notes or Participating
Broker-Dealer as to which any registration is being effected to furnish to
the
Company such information regarding such seller or Participating Broker-Dealer
and the distribution of such Registrable Notes as the Company may, from time
to
time, reasonably request. The Company may exclude from such registration the
Registrable Notes of any seller who fails to furnish such information within
a
reasonable time (which time in no event shall exceed 30 days) after receiving
such request and in the event of such an exclusion (which the Company will
use
good faith reasonable efforts to avoid), the Company shall have no further
obligation under this Agreement to such seller or any subsequent holder of
such
Registrable Notes. Each seller of Registrable Notes or Participating
Broker-Dealer as to which any registration is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished by such seller not materially
misleading.
Each
Holder and each Participating Broker-Dealer agrees by acquisition of Registrable
Notes or Exchange Notes that, upon the Company providing notice to such Holder
or Participating Broker-Dealer, as the case may be, (x) of the happening of
any
event of the kind described in Section 5(e)(ii), 5(e)(iii), 5(e)(iv), 5(e)(v),
or 5(e)(vi) hereof, or (y) that the Board of Directors of the Company has
resolved that the Company has a bona fide business purpose for doing so, then,
upon providing such notice (which shall refer to this paragraph), the Company
may delay the filing or the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement (if not
then
filed or effective, as applicable) and shall not be required to maintain
the
effectiveness thereof or amend or supplement the Exchange Offer Registration
Statement, the Shelf Registration Statement or any Prospectus, or prepare
or
amend any free writing prospectus, in all cases for a period (a “
Blackout
Period
”)
expiring (i) in the case of the immediately preceding clause (x), on the
earlier
to occur of such Holder’s or Participating Broker-Dealer’s receipt of the copies
of the supplemented or amended Prospectus or the free writing prospectus
contemplated by Section 5(j) hereof or until it is advised in writing by
the
Company that the use of the applicable Prospectus may be resumed, or (ii)
in the
case of clause (y), the date on which the Board of Directors of the Company
determines that such business purpose ceases to interfere with the obligations
of the Company pursuant to this Agreement to file, cause to become effective
or
maintain the effectiveness of the Exchange Offer Registration Statement or
the
Shelf Registration Statement or amend or supplement the Exchange Offer
Registration Statement, the Shelf Registration Statement or any Prospectus,
or
prepare or amend any free writing prospectus;
provided
,
however
,
that
there shall not be more than 90 days of Blackout Periods in any twelve-month
period. In the case of any Blackout Period which occurs after the Demand
Date
and prior to the consummation of the Exchange Offer, the Exchange Offer Period
shall be extended by the number of days in such Blackout Period, and in the
case
of any Blackout Period which occurs during any Applicable Period, the maximum
length of such period (as contemplated by the proviso to the third sentence
of
Section 2(e) above) shall be extended by the number of days in such Blackout
Period. Each Holder and each Participating Broker-Dealer agrees by acquisition
of Registrable Notes or Exchange Notes that such Holder or Participating
Broker-Dealer will not, during any Blackout Period, offer or sell any
Registrable Notes or any Exchange Notes covered by any Registration Statement
by
use of any Prospectus included in the Registration Statement (including any
supplement or any amendment to any such Prospectus) or by use of any free
writing prospectus prepared by the Company or used with the Company’s prior
written consent in connection therewith. The provisions of this paragraph
shall
supercede any contrary provisions of this Agreement.
All
fees
and expenses incident to the performance of or compliance with this Agreement
by
the Company (other than any or any fees and expenses incurred by any Holders
in
connection with the execution and delivery of this Agreement) shall be borne
by
the Company, whether or not the Exchange Offer or a Shelf Registration Statement
is filed or becomes effective, 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 and (B) fees and expenses
of compliance with state securities or blue sky laws, (ii) messenger, telephone
and delivery expenses incurred in connection with the performance of its
obligations hereunder, (iii) fees and disbursements of counsel for the Company,
(iv) fees and disbursements of all independent certified public accountants
(including, without limitation, the expenses of any special audit and “cold
comfort” letters required by or incident to such performance), (v) Securities
Act liability insurance, if the Company desires such insurance, (vi) fees and
expenses of all other Persons retained by the Company, (vii) internal expenses
of the Company (including, without limitation, all salaries and expenses of
officers and employees of the Company performing legal or accounting duties),
(viii) the expense of any annual audit, (ix) the fees and expenses of any
trustee and the Exchange Agent and (x) the expenses relating to printing, word
processing and distributing all Registration Statements, securities sales
agreements, indentures and any other documents necessary in order to comply
with
this Agreement.
In
the
case of a Shelf Registration Statement, the Company shall reimburse the Holders
for the reasonable fees and disbursements of not more than one counsel chosen
by
the Holders of a majority in aggregate principal amount of the Registrable
Notes
to be included in any Registration Statement. The Company shall pay all
documentary, stamp, transfer or other transactional taxes attributable to the
issuance or delivery of the Exchange Notes in exchange for the Notes; provided
that the Company shall not be required to pay taxes payable in respect of any
transfer involved in the issuance or delivery of any Exchange Note in a name
other than that of the Holder of the Note in respect of which such Exchange
Note
is being issued.
(a)
Indemnification
by the Company
.
The
Company agrees to indemnify and hold harmless each Holder of Registrable Notes
or Exchange Notes and each Participating Broker-Dealer selling Exchange Notes
during the Applicable Period, each Person, if any, who controls each such Holder
(within the meaning of Section 15 of the Securities Act or Section 20(a) of
the
Exchange Act) and the officers, directors, employees and partners of each such
Holder, Participating Broker-Dealer and controlling person (each, a
“
Participant
”)
from
and against any losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys’ fees as
provided in this Section 6) and reasonable expenses (including, without
limitation, reasonable costs and expenses incurred in connection with
investigating, preparing, pursuing or defending against any of the foregoing)
(collectively, “
Losses
”),
insofar as such Losses arise out of or are based upon any violation of the
Securities Act or Exchange Act by the Company, or any untrue statement or
alleged untrue statement of a material fact in any Registration Statement,
Prospectus or form of prospectus, or in any amendment or supplement thereto,
or
in any preliminary prospectus,
or
any
free writing prospectus prepared by the Company or used with the Company’s prior
written consent in connection therewith
,
or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided
,
however
,
that
(i) such Losses must arise out of or be based upon the offering or resale of
Exchange Notes by a Participating Broker-Dealer following the completion of
the
Exchange Offer pursuant to any offering contemplated by the Exchange Offer
Registration Statement or the offering or sale of Registrable Notes by any
Holder pursuant to any offering contemplated by the Shelf Registration
Statement, (ii) such Losses must not result from information relating to such
Holder or Participating Broker-Dealer and furnished in writing to the Company
(or reviewed and approved in writing) by such Holder or Participating
Broker-Dealer or their counsel expressly for use therein, and (iii) the
foregoing indemnity shall not inure to the benefit of any Participant in
connection with any Person asserting Losses against such Participant in respect
of any untrue statement or omission or alleged untrue statement or omission
contained in any offering document if the Company had made available an offering
document which corrected such untrue statement or omission or alleged untrue
statement or omission prior to any delivery of the confirmation of sale to
such
Person and a copy of such corrected offering document was not provided to or
for
such Person. The Company also agrees to indemnify selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, their officers, directors, agents and employees and each Person
who controls such Persons (within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Holders or the Participating
Broker-Dealer, and each such person shall be a “Participant” for purposes of
this Section 6.
(b)
Indemnification
by Holder
.
Each
Holder shall indemnify and hold harmless the Company, its directors, officers
and each Person, if any, who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20(a) of the Exchange Act), and the
directors, officers, employees and partners of such controlling persons, from
and against all Losses insofar as such Losses arise out of or are based upon
any
untrue statement or alleged untrue statement of a material fact in any
Registration Statement, Prospectus or form of prospectus or in any amendment
or
supplement thereto or in any preliminary prospectus or any free writing
prospectus prepared by the Company or used with the Company’s prior written
consent in connection therewith, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading to the extent, but only to the extent, that such losses
arise out of or result from an untrue statement or alleged untrue statement
of a
material fact or omission or alleged omission of a material fact contained
in or
omitted from any information so furnished in writing by such Holder to the
Company (or reviewed and approved in writing) expressly for use therein.
Notwithstanding the
foregoing,
in no event shall the liability of any selling Holder be greater in amount
than
the dollar amount of the proceeds (net of payment of all expenses) received
by
such Holder upon the sale of the Registrable Notes giving rise to such
indemnification obligation.
(c)
Conduct
of Indemnification Proceedings
.
If any
proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “
Indemnified
Party
”),
such
Indemnified Party shall promptly notify the party or parties from which such
indemnity is sought in writing;
provided
,
that
the
failure to so notify the Indemnifying Parties shall not relieve the Indemnifying
Parties from any obligation or liability except to the extent (but only to
the
extent) that the Indemnifying Parties have been prejudiced materially by such
failure.
The
Indemnifying Party shall have the right, exercisable by giving written notice
to
an Indemnified Party, to assume, at its expense, the defense of any such
proceeding,
provided
,
that
an
Indemnified Party shall have the right to employ separate counsel in any such
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or parties
unless: (1) the Indemnifying Party has agreed to pay such fees and expenses;
or
(2) the Indemnifying Party shall have failed promptly to assume the defense
of
such proceeding or shall have failed to employ counsel reasonably satisfactory
to such Indemnified Party; or (3) the named parties to any such proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party or any of its affiliates or controlling persons, and such
Indemnified Party shall have been advised by counsel that there may be one
or
more defenses available to such Indemnified Party that are in addition to,
or in
conflict with, those defenses available to the Indemnifying Party or such
affiliate or controlling person (in which case, if such Indemnified Party
notifies the Indemnifying Parties in writing that it elects to employ separate
counsel at the expense of the Indemnifying Parties, the Indemnifying Parties
shall not have the right to assume the defense and the reasonable fees and
expenses of such counsel shall be at the expense of the Indemnifying Party;
it
being understood, however, that the Indemnifying Party shall not, in connection
with any one such proceeding or separate but substantially similar or related
proceedings, arising out of the same general allegations or circumstances,
be
liable for the fees and expenses of more than one separate firm of attorneys
(in
addition to one appropriate local counsel in each required jurisdiction) at
any
time for such Indemnified Party).
No
Indemnifying Party shall be liable for any settlement of any such proceeding
effected without its written consent (which consent shall not be unreasonably
withheld, delayed, or conditioned), but if settled with its written consent,
or
if there be a final judgment for the plaintiff in any such proceeding, each
Indemnifying Party jointly and severally agrees, subject to the exceptions
and
limitations set forth above, to indemnify and hold harmless each Indemnified
Party from and against any and all Losses by reason of such settlement or
judgment. Without the prior written consent of the applicable Indemnified Party
(which consent shall not be unreasonably withheld, delayed, or conditioned),
the
Indemnifying Party shall not consent to the entry of any judgment or enter
into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to each Indemnified Party of a release, in form
and
substance reasonably satisfactory to the Indemnified Party, from all liability
in respect of such proceeding for which such Indemnified Party would be entitled
to indemnification hereunder (whether or not any Indemnified Party is a party
thereto), which release does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of the Indemnified
Party.
(d)
Contribution
.
If the
indemnification provided for in this Section 6 is unavailable to an Indemnified
Party or is insufficient to hold such Indemnified Party harmless for any Losses
in respect of which this Section 6 would otherwise apply by its terms (other
than by reason of exceptions provided in this Section 6), then each applicable
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall have
a
joint and several obligation to contribute to the amount paid or payable by
such
Indemnified Party as a result of such Losses, in such
proportion
as is appropriate to reflect the relative fault of the Indemnifying Party,
on
the one hand, and such Indemnified Party, on the other hand, in connection
with
the actions, statements or omissions that resulted in such Losses as well
as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party, on the one hand, and Indemnified Party, on the other hand, shall be
determined by reference to, among other things, whether any untrue or alleged
untrue statement of a material fact or omission or alleged omission to state
a
material fact relates to information supplied by such Indemnifying Party
or
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent any such statement or
omission. The amount paid or payable by an Indemnified Party as a result
of any
Losses shall be deemed to include any legal or other fees or expenses incurred
by such party in connection with any proceeding, to the extent such party
would
have been indemnified for such fees or expenses if the indemnification provided
for in Section 6(a) or 6(b) was available to such party.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by
another method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6(d), in the case of any
liability arising in connection with any offering contemplated by a Shelf
Registration Statement, a selling Holder shall not be required to contribute,
in
the aggregate, any amount in excess of such Holder’s Maximum Contribution
Amount. A selling Holder’s “
Maximum
Contribution Amount
”
shall
equal the excess of (i) the aggregate gross proceeds received by such Holder
pursuant to the sale of such Registrable Notes over (ii) the aggregate amount
of
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section 6 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
For
so
long as any Registrable Notes remain outstanding, the Company will make
available at its expense, upon request to any Holder and any prospective
purchasers thereof, the information specified in Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to Section 13 or 15(d) of
the
Exchange Act.
8.
|
[Intentionally
Omitted]
|
(a)
No
Inconsistent Agreements
.
The
Company has not entered, as of the date hereof, and the Company shall not enter,
after the date of this Agreement, into any agreement with respect to any of
its
securities that conflicts with the rights granted to the Holders of Notes in
this Agreement. The Company has not entered and will not enter into any
agreement with respect to any of its securities that will grant to any Person
piggy-back rights with respect to a Registration Statement
hereunder.
(b)
Specific
Performance
.
The
parties hereto acknowledge that there would be no adequate remedy at law if
any
party fails to perform any of its obligations hereunder and that each party
may
be irreparably harmed by any such failure, and accordingly agree that each
party, in addition to any other remedy to which it may be entitled at law or
in
equity, shall be entitled to compel specific performance of the
obligations
of any other party under this Agreement in accordance with the terms and
conditions of this Agreement, in any court of the United States or any State
thereof having jurisdiction.
(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 the Company and, in
circumstances that would adversely affect any Holders of Registrable Notes,
the
Required Holders;
provided
,
however
,
that
Section 6 and this Section 9(c) may not be amended, modified or supplemented
without the prior written consent of the Company and each Holder;
provided
,
further
,
that no
such amendment or waiver may treat (on the face of such amendment or waiver
and
without regard to the status or individual character of such Holder or other
facts and circumstances affecting Holder) any Holder in a disproportionate
adverse manner as compared to the treatment of any other Holder, without the
prior written consent of such Holder;
provided
,
however
,
that
this clause (c) shall not apply to any amendment or waiver of any provision
in
this Agreement on the date hereof that is not generally applicable to the
Purchasers or is only for the benefit or to the detriment of a particular subset
of the Purchasers.
(d)
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 tendered pursuant to the Exchange
Offer or 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 the Company and Holders of at least a majority
in aggregate principal amount of the Registrable Notes being so tendered or
being sold by such Holders pursuant to such Registration Statement.
(e)
Notices
.
All
notices and other communications provided for or permitted hereunder shall
be
made in writing by hand delivery, registered first-class mail, next-day air
courier or telecopier:
|
(i)
|
if
to a Holder of Notes or to 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 of the
Notes.
|
|
(ii)
|
if
to the Purchasers, as follows: Goldman Sachs & Co., GS Mezzanine
Partners 2006 Onshore US, Ltd., GS Mezzanine Partners 2006 Offshore
US,
Ltd., GS Mezzanine Partners Institutional US, Ltd., 85 Broad Street,
New
York, NY 10004, fax: 212-902-3000, Attention: Eric Goldstein with
a copy
to: Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza,
New York, NY 10004, fax: 212-859-4000, Attention: F. William Reindel,
Esq.
|
|
(iii)
|
if
to the Company, as follows: Berry Plastics Holding Corporation (f/k/a
BPC
Holding Corporation), 101 Oakley Street, Evansville, Indiana 47710,
fax:
812-429-9534,
Attention:
General
Counsel
with
a copy to:
O’Melveny
& Myers LLP, Times Square Tower, 7 Times Square
,
New York, NY 10036, fax: 212-326-2061, Attention: Gregory Ezring,
Esq
.
|
All
such
notices and communications shall be deemed to have been duly given: when
delivered by hand, if personally delivered; three business days after being
deposited in the United States mail, postage prepaid, if mailed; one business
day after being timely delivered to a next-day air courier guaranteeing
overnight delivery; and when receipt is acknowledged by the addressee, if
telecopied. Copies of all such notices, demands or other communications shall
be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in the Indenture.
(f)
Parties
in Interest
.
All of
the terms and provisions of this Agreement shall be binding upon, shall inure
to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto. In the event that any transferee of any Holder of
Registrable Notes shall acquire Registrable Notes in any manner permitted under
the Purchase Agreement or the Indenture, as applicable, whether by gift,
bequest, purchase, operation of law or otherwise, such transferee shall, without
any further writing or action of any kind, be deemed a party hereto for all
purposes and such Registrable Notes shall be held subject to all of the terms
of
this Agreement, and by taking and holding such Registrable Notes such transferee
shall be entitled to receive the benefits of and be conclusively deemed to
have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement.
(g)
Survival
.
The
respective indemnities, agreements, representations, warranties and each other
provision set forth in this Agreement or made pursuant hereto shall remain
in
full force and effect regardless of any investigation (or statement as to the
results thereof) made by or on behalf of any Holder of Registrable Notes, any
director, officer or partner of such Holder, or any director, officer or partner
thereof, or any controlling person of any of the foregoing, and shall survive
delivery of and payment for the Registrable Notes pursuant to the Purchase
Agreement and the transfer and registration of Registrable Notes by such Holder
and the consummation of an Exchange Offer.
(h)
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, including, without limitation and without
the need for an express assignment, subsequent Holders of Notes.
(i)
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.
(j)
Headings
.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(k)
Governing
Law
.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF
ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF
NEW
YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF
NEW
YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO
THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITS AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH PARTY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN
ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY IRREVOCABLY
CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO SUCH PARTY AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF
ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OTHER PARTY IN ANY OTHER
JURISDICTION.
(l)
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 commercially reasonable 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.
(m)
Notes
Held by the Company or Its Affiliates
.
Whenever the consent or approval of Holders of a specified percentage of Notes
is required hereunder, Notes held by the Company or its controlled 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.
(n)
Third
Party Beneficiaries
.
Holders
and Participating Broker-Dealers are intended third party beneficiaries of
this
Agreement and this Agreement may be enforced by such Persons.
(o)
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, understanding, correspondence,
conversations and memoranda between the Purchasers on the one hand and the
Company on the other, 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.
[
Remainder
of page intentionally left blank
.]
IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above
written.
|
BPC
ACQUISITION CORP.
By:
_________________________
Name:
Title:
|
[Exchange
and Registration Rights Agreement]
IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above
written.
|
GOLDMAN,
SACHS & CO.
By:
_________________________
Name:
Title:
|
[Exchange
and Registration Rights Agreement]
IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above
written.
|
GSMP
2006 ONSHORE US, LTD.
By:
_________________________
Name:
Title:
|
|
|
|
GSMP
2006 OFFSHORE US, LTD.
By:
_________________________
Name:
Title:
|
|
|
|
GSMP
2006 INSTITUTIONAL US, LTD.
By:
_________________________
Name:
Title:
|
[Exchange
and Registration Rights Agreement]
MANAGEMENT
AGREEMENT
,
dated
as of September 20, 2006, among
BERRY
PLASTICS CORPORATION
,
a
Delaware corporation (the “
Company
”),
BERRY
PLASTICS GROUP, INC.
,
a
Delaware corporation (“
Group
”),
APOLLO
MANAGEMENT VI, L.P.
,
a
Delaware limited partnership (“
Apollo
”)
and
GRAHAM
PARTNERS, INC.
a
Delaware corporation (“
Graham
”;
Apollo
and Graham collectively referred to hereafter as “
Sponsors
”
and
each a “
Sponsor
”).
WHEREAS,
each of
Group and the Company desires to avail itself of Sponsors’ expertise and
consequently has requested that Sponsors make such expertise available from
time
to time in rendering certain management consulting and advisory services related
to the business and affairs of the Company and its subsidiaries and affiliates
and the review and analysis of certain financial and other transactions.
Sponsors, Group and the Company agree that it is in their respective best
interests to enter into this Agreement whereby, for the consideration specified
herein, Sponsors shall provide such services as independent consultants to
the
Company.
NOW,
THEREFORE,
in
consideration of the mutual covenants hereinafter set forth, the Company, Group
and Sponsors agree as follows:
Section
1.
Retention
of Sponsors.
The
Company hereby retains Sponsors, and Sponsors accept such retention, upon the
terms and conditions set forth in this Agreement.
Section
2.
Term.
This
Agreement shall commence on the date hereof and, unless otherwise extended
pursuant to the second sentence of this Section 2, shall terminate on December
31, 2012 (the “
Term
”).
Upon
December 31, 2012, and at the end of each year thereafter (each of December
31,
2012 and the end of each year thereafter being a “
Year
End
”),
the
Term shall automatically be extended for an additional year unless notice to
the
contrary is given by either party at least 30, but no more than 60, days prior
to such Year End, as applicable. Notwithstanding anything to the contrary in
this Section 2, this Agreement may be terminated at any time upon written notice
to the Company from Sponsors. The provisions of Section 3(c), the last sentence
of Section 4(a) Section 4(b), Section 4(c), Section 4(d), Section 5 and Sections
7 though 14 shall survive the termination of this Agreement.
Section
3.
Management
Consulting Services.
(a)
Sponsors
shall advise the Company concerning such management matters that relate to
proposed financial transactions, acquisitions and other senior management
matters related to the business, administration and policies of the Company
and
its subsidiaries and affiliates, in each case as the Company shall reasonably
and specifically request by way of written notice to Sponsors, which notice
shall specify the services required of Sponsors and shall include all background
material necessary for Sponsors to complete such services. If requested to
provide such services, Sponsors shall devote such time to any such written
request as Sponsors shall deem, in its sole discretion, necessary. Such
consulting services, in Sponsors’ sole discretion, shall be rendered in person
or by telephone or other communication. Sponsors shall have no obligation to
the
Company as to the manner and time of rendering its services hereunder, and
the
Company shall not have any right to dictate or direct the details of the
services rendered hereunder.
(b)
Sponsors
shall perform all services to be provided hereunder as an independent contractor
to the Company and not as employees, agents or representatives of the Company.
Sponsors shall have no authority to act for or to bind the Company without
its
prior written consent.
(c)
This
Agreement shall in no way prohibit Sponsors or any partners or Affiliates of
either Sponsor or any director, officer, partner, agent or employee of either
Sponsor or any partners, shareholders or Affiliates from engaging in other
activities, whether or not competitive with any business of the Company or
any
of its respective subsidiaries or affiliates.
Section
4.
Compensation.
(a)
As
consideration for Sponsors’ agreement to render the services set forth in
Section 3(a) of this Agreement and as compensation for any such services
rendered by Sponsors, the Company agrees to pay to Sponsors or their designees
an annual fee equal to the greater of $3 million and 1.25% of the Company’s
Adjusted EBITDA (as defined in the Indenture (as defined below)), payable
quarterly in advance on September 20, December 20, March 20 and June 20 of
each
year (each a “Payment Date”) (it being understood and agreed that the first such
payment shall be due to Sponsors on
September
20
,
2006).
In the event that a Payment Date falls on a weekend or on a public holiday
in
the United States, that Payment Date will be taken to be the first business
day
(being a day on which the New York Stock Exchange is open for business) prior
to
the relevant Payment Date. If Sponsors elect to terminate this Agreement upon
written notice to the Company pursuant to Section 2 herein, as consideration
for
the termination of Sponsors’ services under this Agreement and any additional
compensation to be received hereunder, the Company agrees to pay, or cause
its
subsidiaries to pay, to Sponsors the present value (as reasonably determined
by
Sponsors) of (x) $21 million, less (y) any amounts Sponsors have received from
the Company prior to the termination date pursuant to the first sentence of
this
Section 4(a)
and
to
employee stockholders a pro rata payment based on such amount (on a fully
diluted basis). Any payments to be paid to Sponsors pursuant to Section 4(a)
above shall be paid pro-rata to Apollo and Graham or their designees based
on
the proportion of equity each of the Apollo Stockholders and Graham Stockholders
(as defined in the Stockholders Agreement) holds in Group at the time such
payment is made.
(b)
Upon
presentation by Sponsors to the Company of such documentation as may be
reasonably requested by the Company, the Company shall reimburse Sponsors for
all out-of-pocket expenses, including, without limitation, legal fees and
expenses, and other disbursements incurred by Sponsors or any partners or
Affiliates of either Sponsor or any director, officer, partner, agent or
employee of either Sponsor or any of its partners or Affiliates in the
performance of Sponsors’ obligations hereunder, whether incurred on or prior to
the date hereof, including, without limitation, out-of-pocket expenses incurred
in connection with the transactions contemplated by the Agreement and Plan
of
Merger made and entered into as of the June 28, 2006 (the “
Merger
Agreement
”),
among
the Company, Group and BPC Holding Acquisition Corp., and each of the documents
referred to therein.
(c)
Nothing
in this Agreement shall have the effect of prohibiting Sponsors or any
Affiliates of either Sponsor from receiving from the Company or any of its
subsidiaries or affiliates any other fees, including any fee payable pursuant
to
Section 6 or the Transaction Fee Agreement dated as of the date hereof
between Sponsors and the Company. Notwithstanding the preceding sentence, the
Sponsors agree that they will not receive any
transaction
fees from the Company for transactions of an aggregate value of less that $150
million unless agreed to by a majority of the management stockholders of the
Company.
(d)
Reference
is made to (i) the Credit Agreement, to be entered into simultaneously with
consummation of the transactions contemplated by the Merger Agreement (as
amended, restated, modified or supplemented and in effect from time to time,
the
“
Credit
Agreement
”),
dated
as
of
September
20, 2006
and
entered into by and among Group, BPC Holding Corporation and the lenders party
thereto,
(ii) the
senior subordinated notes due 2016 purchased by The Goldman Sachs Group on
September 20, 2006 (the “
New
Senior Subordinated Notes
”),
and
(iii) the Indenture dated as of September 20, 2006 (the “
Indenture
”)
among
BPC Holding Corporation and Wells Fargo Bank, N.A., as trustee, and the other
documents related thereto (the New Senior Subordinated Notes, the Indenture
and
such related documents collectively being the “
Debt
Instruments
”).
Any
portion of the fees payable to Sponsors under this Agreement which the Company
is prohibited from paying to Sponsors under the Credit Agreement or the Debt
Instruments shall be deferred, shall accrue and shall be payable at the earliest
time permitted under the Credit Agreement and the Debt Instruments or upon
the
payment in full of all obligations under the Credit Agreement and the Debt
Instruments. The Company shall notify Sponsors if the Company shall be unable
to
pay any fees pursuant to the Credit Agreement or the Debt Instruments on each
date on which the Company would otherwise make a payment of fees under this
Agreement to Sponsors.
Section
5.
Indemnification.
The
Company agrees that it shall indemnify and hold harmless Sponsors, the partners
and Affiliates of each Sponsor and any director, officer, partner, agent or
employee of each Sponsor or any of its partners, shareholders or Affiliates
(collectively, the “
Indemnified
Persons
”)
on
demand from and against any and all liabilities, costs, expenses and
disbursements (including reasonable fees and expenses of counsel and other
advisors) (collectively, “
Claims
”)
of any
kind with respect to or arising from this Agreement or the performance by any
Indemnified Person of any services in connection herewith. Notwithstanding
the
foregoing provision, the Company shall not be liable for any Claim under this
Section 5 arising from the willful misconduct of any Indemnified
Person.
Section
6.
Other
Services.
If
Group,
the Company or any of their respective subsidiaries or affiliates (other than
Sponsors) shall determine that it is advisable for any such entity to hire
a
financial advisor, consultant, investment banker or any similar agent in
connection with any merger, acquisition, disposition, recapitalization, issuance
of securities, financing or any similar transaction, it shall notify Sponsors
of
such determination in writing. Promptly thereafter, upon the request of
Sponsors, the parties shall negotiate in good faith to agree upon appropriate
services, compensation and indemnification for such entity to hire Sponsors
or
its Affiliates for such services. Such entity may not hire any person, other
than Sponsors or the Affiliates of either Sponsor, for any services, unless
(a)
the parties are unable to agree after 30 days following receipt by Sponsors
of
such written notice, (b) such other person has a reputation that is at least
equal to the reputation of Sponsors in respect of such services, (c) ten
business days shall have elapsed after such entity provides a written notice
to
Sponsors of its intention to hire such other person, which notice shall identify
such other person and shall describe in reasonable detail the nature of the
services to be provided, the compensation to be paid and the indemnification
to
be
provided,
(d) the compensation to be paid is not more than Sponsors were willing to accept
in the negotiations described above, and (e) the indemnification to be provided
is not more favorable to such other person than the indemnification that
Sponsors were willing to accept in the negotiations described above.
Section
7.
Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed sufficient if personally delivered, sent by
nationally-recognized overnight courier, by telecopy, or by registered or
certified mail, return receipt requested and postage prepaid, addressed as
follows:
if
to
Apollo, to:
Apollo
Management VI, L.P.
9
West
57
th
Street
New
York,
New York 10019
Attention:
Robert V. Seminara
Telecopier:
(212) 515-3251
if
to the
Company, Sponsors or Group, to it at:
c/o
Apollo Management VI, L.P.
9
West
57
th
Street
New
York,
New York 10019
Attention:
Robert V. Seminara
Telecopier:
(212) 515-3251
if
to
Graham, to:
Graham
Partners, Inc.
3811
West
Chester Pike
Building
2, Suite 200
Newtown
Square, Pennsylvania 19073
Attention:
Christopher A. Lawler
Telecopier:
(610) 408-0600
or
to
such other address as the party to whom notice is to be given may have furnished
to each other party in writing in accordance herewith. Any such notice or
communication shall be deemed to have been received (a) in the case of personal
delivery, on the date of such delivery, (b) in the case of nationally-recognized
overnight courier, on the next business day after the date when sent, (c) in
the
case of telecopy transmission, when received, and (d) in the case of mailing,
on
the third business day following that on which the piece of mail containing
such
communication is posted.
Section
8.
Benefits
of Agreement.
This
Agreement shall bind and inure to the benefit of Sponsors, the Company, the
Indemnified Persons and any successors to or assigns of each Sponsor and the
Company;
provided
,
however
,
that
this Agreement may not be assigned by either party hereto without
the
prior
written consent of the other party, which consent will not be unreasonably
withheld in the case of any assignment by either Sponsor.
Section
9.
Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York (without giving effect to principles of conflicts
of laws).
Section
10.
Headings.
Section
headings are used for convenience only and shall in no way affect the
construction of this Agreement.
Section
11.
Entire
Agreement; Amendments.
This
Agreement contains the entire understanding of the parties with respect to
its
subject matter and supersedes any and all prior agreements, and neither it
nor
any part of it may in any way be altered, amended, extended, waived, discharged
or terminated except by a written agreement signed by each of the parties
hereto.
Section
12.
Counterparts.
This
Agreement may be executed in counterparts, and each such counterpart shall
be
deemed to be an original instrument, but all such counterparts together shall
constitute but one agreement.
Section
13.
Waivers.
Any
party
to this Agreement may, by written notice to the other party, waive any provision
of this Agreement. The waiver by any party of a breach of any provision of
this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.
Section
14.
Affiliates.
For
purposes of this Agreement, the term “Affiliate,” (i) with respect to Apollo,
shall include, without limitation, Apollo Investment Fund VI, L.P., Apollo
Overseas Partners VI, L.P., Apollo Overseas Partners (Delaware) VI, L.P., Apollo
Overseas Partners (Delaware 892) VI, L.P., Apollo Overseas Partners (Germany)
VI, L.P. (collectively, the “
Funds
”),
the
general partner of Apollo, the general partner of each of the Funds and each
person controlling, controlled by or under common control with any of the
foregoing persons and (ii) with respect to Graham, shall include, without
limitation, Graham Capital Company L.P., Graham Partners II, L.P., Graham Berry
Holdings, LP, the general partners of each of the foregoing and each person
controlling, controlled by or under common control with Graham or any of the
foregoing and Donald C. Graham
.
IN
WITNESS WHEREOF,
the
parties have duly executed this Management Agreement as of the date first above
written.
BERRY
PLASTICS GROUP, INC.
By:
__________________________
Name:
Title:
BERRY
PLASTICS CORPORATION
By:
__________________________
Name:
Title:
APOLLO
MANAGEMENT VI, L.P.
By:
__________________________
Name:
Title:
GRAHAM
PARTNERS, INC.
By:
__________________________
Name:
Title:
PRIVILEGED
AND CONFIDENTIAL
WLR&K
DRAFT: 9/18/06
BERRY
PLASTICS GROUP, INC.
2006
EQUITY INCENTIVE PLAN
1.
Purpose
.
The
purpose of this Plan is to strengthen Berry Plastics Group, Inc., a Delaware
corporation (the “Company”), by providing an incentive to its and its
Subsidiaries’ employees, officers, consultants and directors and thereby
encouraging them to devote their abilities and industry to the success of the
Company’s business enterprise. It is intended that this purpose be achieved by
extending to employees, officers, consultants and directors of the Company
and
its Subsidiaries an added long-term incentive for high levels of performance
and
unusual efforts through the grant of options to acquire shares of the Company’s
common stock.
2.
Definitions
.
For
purposes of the Plan:
2.1
“Award”
means a Stock Award or grant of Options or SARs pursuant to the terms of the
Plan.
2.2
“Affiliate”
means, with respect to any entity, any other entity, directly or indirectly,
controlled by, controlling or under common control with such
entity.
2.3
“Agreement”
means the written agreement between the Company and a Grantee of an Award,
evidencing the grant of an Option, SAR or Stock Award, as applicable, and
setting forth the terms and conditions thereof.
2.4
“Board”
means the Board of Directors of the Company.
2.5
“BPC”
means BPC Holding Corporation, a Delaware corporation.
2.6
“Cause”
means:
(a)
in
the
case of a Grantee whose employment with the Company or its Subsidiaries is
subject to the terms of an employment agreement between such Grantee and the
Company or its Subsidiaries, which employment agreement includes a definition
of
“Cause,” the meaning set forth in such employment agreement during the period
that such employment agreement remains in effect; provided, however, that
notwithstanding the foregoing, to the extent the employment agreement defines
“Cause” to include the commission of, indictment for, conviction of or plea of
no contest to a felony or other crime, in no event shall such commission,
indictment, conviction or plea constitute Cause hereunder unless the act
constituted a crime that is (a) a serious felony (or equivalent classification)
under applicable law or (b) a crime against the Company or its Subsidiaries;
and
(b)
in
all
other cases, the Grantee’s (a) intentional failure or refusal to perform
reasonably assigned duties, (b) dishonesty, willful misconduct or gross
negligence in the performance of the Grantee’s duties to the Company or its
Subsidiaries, (c) involvement in a
transaction
in connection with the performance of the Grantee’s duties to the Company or its
Subsidiaries which transaction is adverse to the interests of the Company
or its
Subsidiaries and which is engaged in for personal profit, (d) willful violation
of any law, rule or regulation in connection with the performance of the
Grantee’s duties to the Company or its Subsidiaries (other than misdemeanor
traffic violations or similar minor offenses), (e) indictment for, conviction
of
or plea of no contest to any crime that is (1) a serious felony (or equivalent
classification) under applicable law or (2) a crime against the Company or
its
Subsidiaries or (f) action or inaction materially adversely affecting the
Company or its Subsidiaries.
2.7
“Change
in Capitalization” means any change in the Shares or exchange of Shares for a
different number or kind of shares or other securities of the Company or another
corporation, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, split-up, issuance of warrants or
rights or debentures, stock dividend, stock split or reverse stock split, cash
dividend, property dividend, combination or exchange of shares, repurchase
of
shares, change in corporate structure or otherwise.
2.8
A
“Change
in Control” means the occurrence of any of the following events:
(a)
An
acquisition of any voting securities of the Company (the “Voting Securities”) by
any “Person” (as the term person is used for purposes of Section 13(d) or 14(d)
of the Exchange Act), immediately after which such Person has (i) “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than fifty percent (50%) of the then outstanding Shares or the combined
voting power of the Company’s then outstanding Voting Securities or (ii) the
power to elect a majority of the Board without the vote of any Investors;
provided
,
however
,
that in
determining whether a Change in Control has occurred pursuant to this Section
2.8 (a), an acquisition of Shares or Voting Securities by (i) the Company or
any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly,
by
the Company (a “Related Entity”) or (ii), any Investors or any Affiliates of any
Investors, shall not constitute a Change in Control;
(b)
The
consummation of a merger, consolidation or reorganization of, with or into
the
Company or in which securities of the Company are issued (a “Merger”), unless
such Merger is a “Non-Control Transaction.” A “Non-Control Transaction” shall
mean a Merger where immediately following the Merger the Investors or any
Affiliates of the Investors own, directly or indirectly, fifty percent (50%)
or
more of the combined voting power of the outstanding voting securities of (x)
the corporation resulting from the Merger (the “Surviving Corporation”) if fifty
percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly, by another Person or (y) if more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities
of
the Surviving Corporation is Beneficially Owned, directly or indirectly, by
another Person (a “Parent Corporation”), the ultimate Parent Corporation or (z)
an IPO; or
(c)
The
sale
or other disposition of all or substantially all of the assets of the Company,
BPC or Berry Plastics Corporation to any Person, other than (i) a transfer
to a
Related Entity or under conditions that would constitute a Non-Control
Transaction if the
disposition
of assets is regarded as a Merger for this purpose or (ii) the distribution
to
the Company’s stockholders of the stock of a Related Entity or any other
assets.
2.9
“Closing”
and “Closing Date” have the meanings given such terms in the Agreement and Plan
of Merger, dated as of June 28, 2006, by and between BPC, BPC Acquisition Corp.,
and the Company.
2.10
“Code”
means the Internal Revenue Code of 1986, as amended.
2.11
“Committee”
means a committee, as described in Section 3.1, appointed by the Board from
time
to time to administer the Plan and to perform the functions set forth
herein.
2.12
“Company”
means Berry Plastics Group, Inc.
2.13
“Corporate
Transaction” means any of the following events:
(a)
consummation
of any merger or consolidation of the Company with or into another corporation;
or
(b)
consummation
of any sale of all or substantially all of the assets of the Company, BPC or
Berry other than a transfer of the Company’s assets to a Subsidiary of the
Company.
2.14
“Disability”
means:
(a)
in
the
case of a Grantee whose employment with the Company or a Subsidiary is subject
to the terms of an employment agreement between such Grantee and the Company
or
Subsidiary, which employment agreement includes a definition of “Disability,”
the meaning set forth in such employment agreement during the period that such
employment agreement remains in effect; and
(b)
in
all
other cases, a physical or mental infirmity which impairs the Grantee’s ability
to perform substantially his or her duties for a period of ninety (90) days
in
any three-hundred and sixty-five (365) day period.
2.15
“EBITDA”
means the consolidated income of the Company before interest, taxes,
depreciation, amortization, gain or loss on the disposal of assets, acquisition
or attempted acquisition-related expenses and other non-cash charges (including,
without limitation, revaluations of vested stock options required by generally
accepted accounting principles, to the extent deducted in computing consolidated
income, but excluding any non-cash charge that requires an accrual or reserve
for cash expenditures in future periods or which involve a cash expenditure
in a
prior period (determined in accordance with generally accepted accounting
principles, consistently applied, with inventory valued on a “first-in,
first-out” basis).
2.16
“EBITDA
Target” means, with respect to a fiscal year of the Company or a portion
thereof, the EBITDA target for such year or a portion thereof, based on which
a
Fixed Priced Option or Fixed Priced SAR may vest, as set forth in an
Agreement.
2.17
“Eligible
Individual” means any director, officer, employee or consultant of the Company
or a Subsidiary who is designated by the Committee as eligible to receive
Awards.
2.18
“Escalating
Priced Option” means an Option with an initial exercise price per Share on the
date the Option is granted equal to the Fair Market Value of a Share, which
exercise price shall increase at a rate of 15% per year as set forth in the
Agreement evidencing such Option.
2.19
“Escalating
Priced SAR” means a SAR with an initial exercise price per Share on the date the
SAR is granted equal to the Fair Market Value of a Share, which exercise price
shall increase at a rate of 15% per year as set forth in the Agreement
evidencing such SAR.
2.20
“Excess
EBITDA” shall have the meaning set forth in Section 6.3.
2.21
“Excess
Year” shall have the meaning set forth in Section 6.3.
2.22
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
2.23
“Fair
Market Value” on any date means the value of the Shares determined in good faith
by the Board or the Committee.
2.24
“Fixed
Priced Option” means an Option with an exercise price per Share that, subject to
Sections 11 and 12 hereof, does not change and is equal to the Fair Market
Value
of a Share on the date such Option is granted.
2.25
“Fixed
Priced SAR” means a SAR with an exercise price per Share that, subject to
Sections 11 and 12 hereof, does not change and is equal to the Fair Market
Value
of a Share on the date such SAR is granted..
2.26
“Grantee”
means an individual to whom an Award is granted under the Plan.
2.27
“Investors”
means any Person (as the term person is used for purposes of Section 13(d)
or
14(d) of the Exchange Act) who owns Shares immediately following the
Closing.
2.28
“IPO”
means the initial underwritten offering of the Shares pursuant to a registration
statement (other than a Form S-8 or any successor form) declared effective
with
the Securities and Exchange Commission.
2.29
“IRR
Event” means a transaction constituting a Change in Control, pursuant to which
each of the Investors attain a
32.5%
compounded annual rate of return based on the price per Share paid by the
Investors at the Closing Date and the price per Share obtained upon the Change
in Control, as appropriately adjusted for any Change in
Capitalization.
2.30
“Missed
Year” shall have the meaning set forth in Section 6.3.
2.31
“Option”
means a stock option granted under the Plan, which is not an “incentive stock
option” within the meaning of Section 422 of the Code.
2.32
“Optionee”
means a person under the Plan to whom an Option has been granted under the
Plan.
2.33
“Parent”
means any corporation which is a parent corporation (within the meaning of
Section 424(e) of the Code) with respect to the Company.
2.34
“Performance
Period” means the period set forth in an Agreement over which an Award may
become vested and exercisable based on the achievement by the Company of EBITDA
Targets.
2.35
“Permitted
Transferee” means a Grantee’s spouse, parents, children (whether natural or
adopted), stepchildren and grandchildren and the spouses of such parents,
children, stepchildren and grandchildren (the Grantee’s “Immediate Family”), a
trust solely for the benefit of members of the Grantee’s Immediate Family (a
“Family Trust”) and a partnership in which members of the Grantee’s Immediate
Family and/or Family Trusts are the only partners.
2.36
“Plan”
means the Berry Plastics Group, Inc. 2006 Equity Incentive Plan, as amended
and/or restated from time to time.
2.37
“Redundancy”
means the termination of the employment of a Grantee within six months following
a material acquisition or disposition by the Company, provided that the Board
determines in good faith that such acquisition or disposition resulted in the
elimination of, or a redundancy in, the Grantee’s position.
2.38
“Retirement”
means the retirement of a Grantee from the employment of the Company and all
of
its Subsidiaries on or after attaining the age of 60 with ten years of service
with the Company and/or one or more of its subsidiaries.
2.39
“SAR”
means a stock appreciation right granted under the Plan, pursuant to which
the
grantee of such stock appreciation right is entitled, upon exercise thereof,
to
receive an amount in cash equal to the product of (i) the excess of the Fair
Market Value of one Share on the date of exercise over the exercise price of
such stock appreciation right, multiplied by (ii) the number of Shares in
respect of which the stock appreciation right has been exercised.
2.40
“Section
409A” shall mean Section 409A of the Code and any guidance or regulations with
respect thereto.
2.41
“Securities
Act” means the Securities Act of 1933, as amended.
2.42
“Sell”
means to sell, or in any other way directly or indirectly transfer, assign,
distribute, pledge, hypothecate, encumber or otherwise dispose of, either
voluntarily or involuntarily; and the terms “Sale” and “Sold” shall have
meanings correlative to the foregoing.
2.43
“Shares”
means the common stock, par value $0.01 per share, of the Company and any other
securities into which such shares are changed or for which such shares are
exchanged.
2.44
“Stock
Award” means an award of the right to purchase Shares under Section 8 of the
Plan.
2.45
“Subsidiary”
means any entity, whether or not incorporated, in which the Company directly
or
indirectly owns fifty percent (50%) or more of the outstanding equity or other
ownership interests.
3.
Administration
.
3.1
The
Plan
shall be administered by the Committee, which shall hold meetings at such times
as may be necessary for the proper administration of the Plan. The Committee
shall keep minutes of its meetings. A quorum shall consist of not fewer than
two
members of the Committee and a majority of a quorum may authorize any action.
Any decision or determination reduced to writing and signed by all of the
members of the Committee shall be as fully effective as if made by a majority
vote at a meeting duly called and held. The Committee shall consist of at least
two members of the Board and may consist of the entire Board. Subject to
applicable law, the Committee may delegate its authority under the Plan to
any
other person or persons.
3.2
No
member
of the Committee shall be liable for any action, failure to act, determination
or interpretation made in good faith with respect to this Plan or any
transaction hereunder. The Company hereby agrees to indemnify each member of
the
Committee for all costs and expenses and, to the extent permitted by applicable
law, any liability incurred in connection with defending against, responding
to,
negotiating for the settlement of or otherwise dealing with any claim, cause
of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
transaction hereunder.
3.3
Subject
to the express terms and conditions set forth herein, the Committee shall have
the power from time to time to:
(a)
determine
those Eligible Individuals to whom Awards shall be granted under the Plan and
the number of Shares subject to such Awards and to prescribe the terms and
conditions (which need not be identical) of each such Award, including the
exercise price per Share, the vesting schedule and the duration of Options
and
SARs, and make any amendment or modification to any Agreement consistent with
the terms of the Plan;
(b)
to
construe and interpret the Plan and the Awards granted hereunder and to
establish, amend and revoke rules and regulations for the administration of
the
Plan, including, but not limited to, correcting any defect or supplying any
omission, or reconciling
any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable and otherwise to make the Plan fully
effective. All decisions and determinations by the Committee in the exercise
of
this power shall be final, binding and conclusive upon the Company, its
Subsidiaries, the Grantees, and all other persons having any interest
therein;
(c)
to
determine the duration and purposes for leaves of absence which may be granted
to a Grantee on an individual basis without constituting a termination of
employment or service for purposes of the Plan;
(d)
to
exercise its discretion with respect to the powers and rights granted to it
as
set forth in the Plan; and
(e)
generally,
to exercise such powers and to perform such acts as are deemed necessary or
advisable to promote the best interests of the Company with respect to the
Plan.
4.
Stock
Subject to the Plan; Grant Obligations and Limitations
.
4.1
Subject
to Section 11 of the Plan, the maximum number of Shares that may be made the
subject of Fixed Priced Options and Fixed Priced SARs granted under the Plan
is
384,838. Subject to Section 11 of the Plan, the maximum number of Shares that
may be made the subject of Escalating Priced Options and Escalating Priced
SARs
granted under the Plan is 192,414. Subject to Section 11 of the Plan, the
maximum number of Shares that may be made the subject of Stock Awards granted
under the Plan is 942,258. The Company shall reserve for the purposes of the
Plan, out of its authorized but unissued Shares or out of Shares held in the
Company’s treasury, or partly out of each, such number of Shares as shall be
determined by the Board. The Committee may in its sole discretion elect to
grant
Options that are intended to qualify as “incentive stock options” within the
meaning of Section 422 of the Code (“ISOs”);
provided
,
however
,
that
Options with respect to at least 95% of the Shares that may be made subject
to
Options under the Plan shall be nonqualified stock options not intended to
qualify as ISOs.
4.2
Upon
the
granting of an Option or SAR, the number of Shares available under Section
4.1
for the granting of further Options and SARs of the same type (
i.e.
,
Fixed
Priced Options/SARs or Escalating Priced Options/SARs) shall be reduced by
the
number of Shares in respect of which the Option or SAR is granted or
denominated.
4.3
Whenever
any outstanding Option or SAR or portion thereof expires, is canceled, is
settled in cash (including the settlement of tax withholding obligations using
Shares) or is otherwise terminated for any reason without having been exercised
or payment having been made in respect of the entire Option or SAR, the Shares
allocable to the expired, canceled, settled or otherwise terminated portion
of
the Option or SAR may again be the subject of Options or SARs granted hereunder
of the same type of Option or SAR (
i.e.
,
Fixed
Priced Options/SARs or Escalating Priced Options/SARs) so expired, cancelled,
settled or otherwise terminated.
4.4
The
Committee shall grant Options and SARs with respect to at least 486,300 Shares
as of the Closing Date.
5.
Option
and SAR Grants
.
Subject
to the provisions of the Plan, the Committee shall have full and final authority
to select those Eligible Individuals who will receive Options and/or SARs and
to
determine the terms and conditions of the grant to such Eligible Individuals,
including the number of Shares subject to each Option and SAR, the term of
the
Option and/or SAR (which shall not exceed ten (10) years from the date of grant)
and any other terms or conditions not inconsistent with the Plan that the
Committee determines. The terms and conditions of each Option and SAR shall
be
set forth in an Agreement. The Committee may, subsequent to the granting of
any
Option or SAR, extend the term thereof, but in no event shall the term as so
extended exceed the maximum term set forth in the first sentence of this Section
5.
6.
Vesting
and Exercisability of Options and SARs
.
6.1
Unless
earlier terminated pursuant to the terms of the Plan or an Agreement, or as
otherwise provided in an Agreement, each Escalating Priced Option and each
Escalating Priced SAR shall vest and become exercisable with respect to twenty
percent of the Shares subject to such Option or SAR on an annual basis,
beginning with the year commencing January 1, 2007 (the “Initial Vesting Date”).
Twenty percent of the Shares subject to such Option or SAR shall have vested
by
the first anniversary of the Initial Vesting Date, and an additional twenty
percent of the Shares subject to such Options or SARs shall be vested by each
of
the second, third, fourth and fifth anniversaries of the Initial Vesting
Date.
6.2
Unless
earlier terminated pursuant to the terms of the Plan or an Agreement, or as
otherwise provided in an Agreement, each Fixed Priced Option and Fixed Priced
SAR shall vest and become exercisable either (i) with respect to twenty percent
of the Shares subject to such Option or SAR on an annual basis, beginning with
the Initial Vesting Date (i.e., twenty percent of the Shares subject to such
Option or SAR shall have vested by the first anniversary of the Initial Vesting
Date, and an additional twenty percent of the Shares subject to such Option
or
SAR shall be vested by each of the second, third, fourth and fifth anniversaries
of the Initial Vesting Date), or (ii) subject to Section 6.3, based on the
achievement by the Company of EBITDA Targets over the Performance Period as
set
forth in an Agreement. Fifty percent of the aggregate number of Shares subject
to Fixed Priced Options and Fixed Priced SARs granted to an Optionee shall
be
subject to time based vesting under Section 6.2(i) and the remaining fifty
percent shall be subject to performance based vesting under Section
6.2(ii).
6.3
Unless
earlier terminated pursuant to the terms of the Plan or an Agreement, or as
otherwise provided in an Agreement, with respect to each Fixed Priced Option
and
Fixed Priced SAR, in the event that the EBITDA Target for any fiscal year or
portion thereof in a Performance Period is not achieved (such fiscal year,
a
“Missed Year”) and the EBITDA Target with respect to (x) the immediately
preceding fiscal year (except in the case that the Missed Year is the first
fiscal year in the Performance Period), or (y) the immediately following fiscal
year (except in the case that the Missed Year is the last year in such
Performance Period), is exceeded (each such immediately preceding or immediately
following year, an “Excess Year”), then the excess of EBITDA over the EBITDA
Target for such Excess Year or Excess Years (the excess with respect to an
Excess Year, the “Excess EBITDA”) shall be applied to the Missed Year, and if
the application of such Excess
EBITDA
results in EBITDA with respect to the Missed Year equal to or in excess of
the
EBITDA Target with respect to such Missed Year, then the number of Shares
that
failed to vest by reason of the Company’s failure to achieve the EBITDA Target
for the Missed Year shall become vested on the date the Committee determines
that such EBITDA Target with respect to the Missed Year was achieved with
the
application of such Excess EBITDA;
provided
,
with
respect to any Excess Year, Excess EBITDA for such year may only be applied
to
one Missed Year;
provided
,
further
,
that
the Grantee remains employed by the Company or one of its Subsidiaries for
the
duration of any such Excess Year and the Missed Year to which any such Excess
EBITDA is applied.
6.4
Unless
earlier terminated pursuant to the terms of the Plan, or as otherwise provided
in an Agreement, with respect to each Fixed Priced Option and Fixed Priced
SAR,
on the ninth anniversary of the date such Option or SAR is granted it shall
become vested and exercisable to the extent not already vested.
6.5
EBITDA
Targets for each fiscal year or portion thereof during a Performance Period
shall be established by the Committee on or prior to the date an Option or
SAR
is granted and shall be set forth on a schedule attached to the Agreement
evidencing such Option or SAR and may be adjusted from time to time thereafter
by the Committee in its sole discretion to take into account acquisitions,
divestitures, significant deviations in capital expenditures or leasing or
other
extraordinary events.
6.6
Notwithstanding
the foregoing, the Committee may grant an Option or SAR after the Closing Date
to a Grantee that was employed by the Company as of the Closing Date, and such
Option or SAR may have an adjusted vesting schedule that causes the Option
or
SAR to be treated, for purposes of vesting, as if it were granted as of the
Closing Date. The Committee may accelerate the exercisability of any Option
or
SAR or portion thereof at any time.
7.
Method
of Exercise; Rights of Optionees
.
7.1
The
exercise of an Option or SAR shall be made only by a written notice delivered
in
person or by mail to the Secretary of the Company at the Company’s principal
executive office, specifying the number of Shares with respect to which such
Option or SAR is to be exercised and, to the extent applicable, accompanied
by
payment therefore and otherwise in accordance with the Agreement pursuant to
which the Option or SAR was granted. Unless otherwise determined by the
Committee and except as otherwise set forth in an Agreement, the exercise price
paid with respect to the exercise of an Option or SAR shall be paid in cash.
If
requested by the Committee, the Grantee shall deliver the Agreement evidencing
the Option or SAR to the Secretary of the Company who shall endorse thereon
a
notation of such exercise and return such Agreement to the Grantee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of
an
Option or SAR and the number of Shares (or, in the case of SARs, the cash
equivalent thereof) that may be purchased upon exercise shall be rounded to
the
nearest number of whole Shares (or, in the case of SARs, the cash equivalent
thereof).
7.2
No
Optionee shall be deemed for any purpose to be the owner of any Shares subject
to any Option unless and until (a) the Option shall have been exercised pursuant
to the terms thereof, (b) the Company shall have issued and delivered Shares
to
the Optionee,
and
(c)
the Optionee’s name shall have been entered as a stockholder of record on the
books of the Company.
8.
Stock
Awards
.
8.1
Stock
Awards may be granted under the Plan at any time and from time to time. Each
Stock Award shall be evidenced by an Agreement that shall be executed by the
Company and the grantee of such Stock Award. The Agreement shall specify the
terms and conditions of the Stock Award, including without limitation the number
of Shares covered by the Stock Award, the purchase price, if any, for such
Shares (the “Purchase Price”) and the deadline for the purchase of such
Shares.
8.2
The
Purchase
Price
if
any,
at which each Share covered by the Stock Award may be purchased upon exercise
of
a Stock Award shall be determined by the Committee and set forth in the
applicable Agreement. The Company will not be obligated to issue certificates
evidencing Shares purchased under this Section 8 unless and until it receives
full payment of the aggregate Purchase Price therefor and all other conditions
to the purchase, as determined by the Committee, have been satisfied. The
Purchase Price of any Shares subject to a Stock Award must be paid in full
at
the time of the purchase.
9.
Non-Transferability
.
No
Award
shall be Sold, transferred or otherwise disposed of by the Grantee otherwise
than by will or by the laws of descent and distribution, and an Award shall
be
exercisable during the lifetime of such Grantee only by the Grantee or his
or
her guardian or legal representative. Notwithstanding the foregoing, the
Committee may set forth in the Agreement evidencing an Award at the time of
grant or permit thereafter, that the Award may be transferred for estate
planning purposes to a Permitted Transferee. For purposes of this Plan, a
Permitted Transferee of an Award shall be deemed to be the Grantee. The terms
of
an Award shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs and successors of the Grantee.
10.
Effect
of a Termination of Employment
.
10.1
If
the
employment or engagement of the Grantee is terminated for any reason other
than
for Cause (or to the extent set forth in an Agreement, other than by reason
of
death, Disability or Redundancy), the portion of the Option or SAR that is
not
then vested and exercisable shall immediately terminate. Except as set forth
in
an Agreement, to the extent the Option or SAR is vested and exercisable as
of
the date of such termination of employment or engagement, the Option or SAR
shall remain exercisable for a period of ninety (90) days immediately following
such termination of employment or engagement, after which time the Option or
SAR
shall automatically terminate in full.
10.2
If
the
employment or engagement of a Grantee is terminated for Cause (i) any Options
or
SARs granted to the Grantee hereunder shall immediately terminate in full and
no
rights thereunder may be exercised, (ii) the Company shall have the right to
purchase from such Grantee and the Grantee (or his successor or representative,
as the case may be) shall be required to Sell to the Company, at the election
of
the Company at any time following such termination,
any
of
the Shares acquired by the Grantee upon the exercise of an Option or Stock
Award, at a per Share purchase price equal to the lesser of (x) the Fair
Market
Value of a Share on the date of such purchase by the Company, and (y) the
exercise price or Purchase Price paid by the Grantee, if any and (iii) the
Grantee (or his successor or representative, as the case may be) shall, at
the
election of the Company at any time following such termination of employment,
be
required to pay to the Company with respect to each SAR exercised prior to
such
date, an amount in cash equal to the greater of (x) any proceeds received
by the
Grantee pursuant to the exercise of such SAR and (y) the amount, if any,
by
which the Fair Market Value of a Share on the date of exercise of such SAR
exceeded the Fair Market Value of a Share on the date the Company elects
to
receive such payment.
10.3
Prior
to
an IPO, upon the termination of the employment or engagement of a Grantee for
any reason other than Cause, the Company shall have the right to purchase from
such Grantee and the Grantee (or his successor or representative, as the case
may be) shall be required to Sell to the Company, at the election of the
Company, all Shares acquired by the Grantee pursuant to the exercise of an
Option or Stock Award, which Shares have been held by the Grantee for at least
six months, at a per Share purchase price equal to the Fair Market Value of
a
Share on the date of such purchase. The Company’s right of repurchase described
herein shall expire one year following the later of (i) the date on which the
Grantee’s employment is terminated or (ii) the date on which the Shares being
purchased by the Company were acquired by the Grantee.
11.
Adjustment
Upon Changes In Capitalization
.
11.1
In
the
event of a Change in Capitalization, the Committee shall make appropriate
equitable adjustments, to (i) the maximum number and class of Shares or other
stock or securities with respect to which Awards may be granted under the Plan
and (ii) the number and class of Shares or other stock or securities which
are
subject to outstanding Options and SARs granted under the Plan and the exercise
price or Purchase Price therefor, if applicable;
provided
,
that in
the event of any extraordinary dividend (other than the payment of any
management fees to the Investors), such equitable adjustments (x) shall preserve
the Grantee’s rights substantially proportionate to his or her rights existing
immediately prior to such extraordinary dividend (but subject to the limitations
and restrictions on such existing rights), and (y) shall comply in all respects
with Section 409A..
11.2
If,
by
reason of a Change in Capitalization, an Optionee shall be entitled to exercise
an Option with respect to new, additional or different shares of stock or
securities of the Company or any other corporation, such new, additional or
different shares shall thereupon be subject to all of the conditions,
restrictions and performance criteria which were applicable to the Shares
subject to the Option, as the case may be, prior to such Change in
Capitalization.
12.
Effect
of Certain Transactions
.
12.1
Except
as
otherwise provided in an Agreement evidencing an Award at the time of grant,
in
the event of a Corporate Transaction, each outstanding Award shall be assumed
or
an equivalent award or right substituted by the successor or surviving
corporation or a Parent or Subsidiary of the successor or surviving corporation
(the “Successor Corporation”);
provided
,
however
,
that,
unless
otherwise determined by the Committee, such Awards shall remain subject to
all
of the conditions, restrictions and performance criteria which were applicable
to such Awards prior to such assumption or substitution. For the purpose
of this
Section 12.1, the Award shall be considered assumed if, following the Corporate
Transaction, the Award confers the right to purchase or receive, for each
Share
subject to the Award immediately prior to the Corporate Transaction, the
consideration (whether stock, cash or other securities or property) received
in
the merger or sale of assets by holders of Shares for each Share held on
the
effective date of the transaction (and if holders were offered a choice of
consideration, of the type of consideration chosen by the holders of a majority
of the outstanding Shares). All Options and SARs shall terminate and cease
to
remain outstanding immediately following the consummation of a Corporate
Transaction, except to the extent assumed or substituted by the Successor
Corporation.
12.2
Notwithstanding
anything to the contrary contained herein, in the event of a Corporate
Transaction pursuant to which each outstanding Award is not assumed or an
equivalent award or right substituted by the successor or surviving corporation,
the Committee shall (a) authorize the redemption of the unexercised vested
portion of the Awards for a consideration per Share equal to the excess of
(i)
the consideration payable per Share in connection with such Corporate
Transaction, over (ii) the exercise price per Share or Purchase Price subject
to
the Award, and (b) terminate the unvested portion of such Award.
12.3
The
Agreement evidencing an Award shall set forth the effect, if any, of a Change
in
Control or IRR Event on an Award.
12.4
Upon
the
consummation date of an IPO, the exercise price per Share with respect to each
Escalating Priced Option and Escalating Priced SAR shall be increased by a
percentage equal to the product of (i) 15% multiplied by (ii) a fraction, the
numerator of which is the number of days since the last increase in the exercise
price of the Option or SAR and the denominator of which is 365, and shall be
fixed at such level for the remainder of the term of the Option or
SAR.
13.
Plan
Amendment or Termination; Modification of Awards
.
13.1
The
Plan
shall terminate on the day preceding the tenth anniversary of the date of its
adoption by the Board and no Award may be granted thereafter. The Board may
sooner terminate the Plan and the Board may at any time and from time to time
amend, modify or suspend the Plan;
provided
,
however
,
that:
(a)
no
such
amendment, modification, suspension or termination shall impair or adversely
alter any Awards theretofore granted under the Plan, except with the consent
of
the Grantee, nor shall any amendment, modification, suspension or termination
deprive any Grantee of any Shares which he or she may have acquired through
or
as a result of the Plan; and
(b)
to
the
extent necessary under any applicable law, regulation or exchange requirement,
no amendment shall be effective unless approved by the stockholders of the
Company in accordance with applicable law, regulation or exchange
requirement.
13.2
No
modification of an Award shall adversely alter or impair any rights or
obligations under the Award without the consent of the Grantee.
14.
Non-Exclusivity
of the Plan
.
The
adoption of the Plan by the Board shall not be construed as amending, modifying
or rescinding any previously approved incentive arrangement or as creating
any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting of stock
options otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
15.
Limitation
of Liability
.
As
illustrative of the limitations of liability of the Company, but not intended
to
be exhaustive thereof, nothing in the Plan shall be construed to:
(a)
give
any
person any right to be granted an Award other than at the sole discretion of
the
Committee;
(b)
give
any
person any rights whatsoever with respect to Shares except as specifically
provided in the Plan;
(c)
limit
in
any way the right of the Company or any Subsidiary to terminate the employment
of any person at any time; or
(d)
be
evidence of any agreement or understanding, expressed or implied, that the
Company will employ any person at any particular rate of compensation or for
any
particular period of time.
16.
Regulations
and Other Approvals; Governing Law
.
16.1
Except
as
to matters of federal law, the Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of
the
State of Delaware without giving effect to conflicts of laws principles
thereof.
16.2
The
obligation of the Company to sell or deliver Shares with respect to Awards
granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and
the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.
16.3
Each
Award is subject to the requirement that, if at any time the Committee
determines, in its discretion, that the listing, registration or qualification
of Shares issuable pursuant to the Plan is required by any securities exchange
or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or
in
connection with, the grant of an Award or the issuance of Shares, no Awards
shall be granted or payment made or Shares issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected
or
obtained free of any conditions not acceptable to the Committee.
17.
Multiple
Agreements
.
The
terms
of each Award may differ from other Awards granted under the Plan at the same
time, or at different times. The Committee may also grant more than one Award
to
a given Eligible Individual during the term of the Plan, either in addition
to,
or in substitution for, one or more Award previously granted to that Eligible
Individual.
18.
Withholding
of Taxes
.
At
such
times as a Grantee recognizes taxable income in connection with the receipt
of
Shares or cash or other property hereunder (a “Taxable Event”), the Grantee
shall pay to the Company an amount equal to the minimum statutory withholding
taxes in connection with the Taxable Event (the “Withholding Taxes”) prior to
the issuance of such Shares or the payment of such cash or other property.
The
Committee may provide in the Agreement at the time of grant, or at any time
thereafter, that the Grantee, in satisfaction of the obligation to pay
Withholding Taxes to the Company, may elect to have withheld a portion of the
Shares then issuable to him or her having an aggregate Fair Market Value equal
to the Withholding Taxes.
18.
Code
Section 409A Compliance
.
To
the
extent applicable, it is intended that this Plan and any Awards granted
hereunder comply with the requirements of Section 409A of the Code and any
related regulations or other guidance promulgated with respect to that section
by the U.S. Department of the Treasury or the Internal Revenue Service. Any
provision that would cause the Plan or any Award granted under the Plan to
fail
to satisfy Section 409A will have no force or effect until amended to comply
with Section 409A, which amendment may be retroactive to the extent permitted
by
Section 409A; provided, however, that the present value of Awards granted to
Participants after such modification shall not be materially less than the
present value of the Awards granted to Participant prior to the
modification.
BERRY
PLASTICS GROUP, INC.
NONQUALIFIED
STOCK OPTION AGREEMENT
THIS
AGREEMENT, made as of [
], 2006
(the “
Grant
Date
”),
between Berry Plastics Group, Inc. (the “
Company
”),
and
[
]
(the
“
Optionee
”).
WHEREAS,
the Company has adopted the Berry Plastics Group, Inc. 2006 Equity Incentive
Plan (the “
Plan
”)
in
order to provide additional incentive to certain employees, officers,
consultants and directors of the Company and its Subsidiaries; and
WHEREAS,
the Committee responsible for administration of the Plan has determined to
grant
an option to the Optionee as provided herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1.
Grant
of Option
.
1.1
The
Company hereby grants to the Optionee the right and option (the “
Option
”)
to
purchase all or any part of an aggregate of [
]
whole
Shares subject to, and in accordance with, the terms and conditions set forth
in
this Agreement and the Plan.
1.2
The
Option is not intended to qualify as an “incentive stock option” within the
meaning of Section 422 of the Code.
1.3
This
Agreement shall be construed in accordance and consistent with, and subject
to,
the Plan (which is incorporated herein by this reference) and, except as
otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the definitions set forth in the Plan.
2.
Exercise
Price
.
The
price
at which the Optionee shall be entitled to purchase Shares upon the exercise
of
the Option; to the extent vested and exercisable, shall be $[
] per
Share.
3.
Duration
of Option
.
The
Option shall be exercisable to the extent and in the manner provided herein
for
a period of ten (10) years from the Grant Date;
provided
,
however
,
that
the Option may be earlier terminated as set forth herein.
4.
Vesting
and Exercisability of Option
.
(a)
Subject
to the terms and conditions of this Agreement and the Plan, upon the achievement
of the EBITDA Target established for each fiscal year or portion thereof as
set
forth on
Exhibit
A
hereto,
the Option shall become vested and exercisable with respect to the percentage
of
the total number of Shares covered by the Option indicated on
Exhibit
A
next to
such EBITDA Target as of the date that the Committee determines that such EBITDA
Target
has
been
achieved (the “Determination Date”). Notwithstanding anything contained in this
Agreement or the Plan to the contrary, in the event that an Optionee’s
employment is terminated other than for Cause, following either (i) the end
of a
fiscal year during the Performance Period, or (ii) the end of the Performance
Period, but, in either case, prior to the Determination Date with respect to
such period, the Optionee will be entitled to vesting, if any (to the extent
EBITDA Targets are achieved), with respect to such period as of the applicable
Determination Date;
provided
that
such Determination Date occurs prior to the expiration of the post-termination
exercise period as set forth in Section 6.1 or 6.2 herein, as applicable. In
the
event that the EBITDA Target for any fiscal year or portion thereof in a
Performance Period is not achieved (such fiscal year, a “Missed Year”) and the
EBITDA Target with respect to (x) the immediately preceding fiscal year (except
in the case that the Missed Year is the first fiscal year in the Performance
Period), or (y) the immediately following fiscal year (except in the case that
the Missed Year is the last year in such Performance Period), is exceeded (each
such immediately preceding or immediately following year, an “Excess Year”),
then the excess of EBITDA over the EBITDA Target for such Excess Year or Excess
Years (the excess with respect to an Excess Year, the “Excess EBITDA”) shall be
applied to the Missed Year, and if the application of such Excess EBITDA results
in EBITDA with respect to the Missed Year equal to or in excess of the EBITDA
Target with respect to such Missed Year, then the number of Shares that failed
to vest by reason of the Company’s failure to achieve the EBITDA Target for the
Missed Year shall become vested on the date the Committee determines that such
EBITDA Target with respect to the Missed Year was achieved with the application
of such Excess EBITDA;
provided
,
with
respect to any Excess Year, Excess EBITDA for such year may only be applied
to
one Missed Year;
provided
,
further
,
that,
for such vesting to occur, the Optionee must remain employed by the Company
or
one of its Subsidiaries for the duration of any such Excess Year and the Missed
Year to which any such Excess EBITDA is applied. The Determination Date for
any
period shall be no later than 30 days following the receipt by the Company
of
audited financial statements for the fiscal year or portion thereof, as
applicable.
(b)
The
Option shall become vested and exercisable with respect to the total number
of
Shares remaining unvested, if any, on the ninth anniversary of the Grant Date,
provided
,
that
the Optionee remains employed by the Company or one of its Affiliates through
such ninth anniversary.
5.
Manner
of Exercise and Payment
.
5.1
Subject
to the terms and conditions of this Agreement and the Plan, the Option may
be
exercised by written notice delivered in person or by mail to the Secretary
of
the Company, at its principal executive offices. Such notice shall state that
the Optionee is electing to exercise the Option and the number of Shares in
respect of which the Option is being exercised and shall be signed by the person
or persons exercising the Option. If requested by the Committee, such person
or
persons shall (i) deliver this Agreement to the Secretary of the Company who
shall endorse thereon a notation of such exercise and (ii) provide satisfactory
proof as to the right of such person or persons to exercise the
Option.
5.2
The
notice of exercise described in Section 5.1 hereof shall be accompanied by
a cash payment in an amount equal to the full exercise price for the Shares
in
respect of which the Option is being exercised;
provided
,
however
,
that
[following a Termination
of
Employment (i) by the Company without Cause or (ii) by the Optionee after the
second anniversary of the Closing following the attainment of (x) age 55 and
(y)
at least ten years of completed service with the Company and/or its
Subsidiaries]
1
,
or
otherwise in the sole discretion of the Committee,
payment
of the full exercise price for the Shares in respect of which an Option is
being
exercised may be made in the manner set forth in Section 5.3.
5.3
Subject
to Section 5.2 and to applicable law, payment, in full or in part, of the
exercise price for the Shares in respect of which an Option is being exercised
may be made (a) in the form of unrestricted Shares (by delivery of such Shares
or by attestation) already owned by the Optionee (based on the Fair Market
Value
of Shares on the date the Option is exercised), (b) by delivering a properly
executed exercise notice to the Company, together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds necessary to pay the exercise price, and, if requested, the
amount of any federal, state, local or foreign withholding taxes or (c) by
instructing the Committee to withhold a number of such Shares having a Fair
Market Value on the date of exercise equal to the aggregate exercise price
of
such Option.
5.4
Upon
receipt of notice of exercise and full payment for the Shares in respect of
which the Option is being exercised, the Company shall, subject to
Section 15 of the Plan, take such action as may be necessary to effect the
transfer to the Optionee of the number of Shares as to which such exercise
was
effective. Each stock certificate representing Shares issuable upon the exercise
of the Option shall bear such legends as the Company deems
appropriate.
5.5
The
Optionee shall not be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any Shares subject to the Option until (i) the
Option shall have been exercised pursuant to the terms of this Agreement and
the
Optionee shall have paid the full exercise price for the number of Shares in
respect of which the Option was exercised and made arrangements acceptable
to
the Company for the payment of all applicable Withholding Taxes, (ii) the
Company shall have issued and delivered the Shares to the Optionee,
(iii) the Optionee’s name shall have been entered as a shareholder of
record on the books of the Company and (iv) the Optionee has executed such
other
documents as required by the Company to cause the Optionee to be a party to,
and
bound by the terms of, the Stockholders Agreement, dated as of [
]
among
the Company and such other stockholders party thereto, whereupon the Optionee
shall have full voting and other ownership rights with respect to such
Shares.
6.
Termination
of Option
.
The
Option shall terminate on the date that is the tenth anniversary of the Grant
Date, unless terminated earlier as follows:
6.1
If
the
employment of the Optionee is terminated for any reason other than the death
or
Disability of the Optionee, other than for Cause or other than by reason of
Redundancy, the portion of the Option that is not then vested and exercisable
shall immediately terminate. To the extent the Option is vested and exercisable
as of the date of such termination of employment, the Option shall remain
exercisable for a period of ninety (90) days following
1
Not
applicable to Boots, Beeler and Heseman, whose Agreements include, in
lieu of
the bracketed language: “in the event of the Employee’s retirement following the
fourth anniversary of the Closing Date” ( “in the event of the Employee’s
retirement following the third anniversary of the Closing Date”, in the case of
Beeler).
such
termination of employment, after which time the Option shall automatically
terminate in full.
6.2
If
the
employment of the Optionee is terminated by reason of the death or Disability
of
the Optionee or by reason of Redundancy, the Option shall become immediately
vested and exercisable with respect to an additional 20% of the total Shares
subject to the Option. Any portion of the Option that is not vested and
exercisable after giving effect to the immediately preceding sentence shall
immediately terminate. If the employment of the Optionee is terminated as set
forth in this Section 6.2, to the extent the Option is vested and exercisable
as
of the date of such termination of employment (after giving effect to additional
vesting set forth in this Section 6.2), the Option shall remain exercisable
for
one year following such termination of employment, after which time the Option
shall automatically terminate in full.
6.3
If
the
employment of the Optionee is terminated for Cause, (i) the Option shall
immediately terminate in full whether or not the Option is then vested and
exercisable and (ii) the Company shall have the right to purchase from the
Optionee and the Optionee shall be required to Sell to the Company, at the
election of the Company at any time following such termination of employment,
any of the Shares acquired pursuant to the Option at a per share purchase price
equal to the lesser of (x) the Fair Market Value of a Share at the time of
such
purchase by the Company, or (y) the exercise price set forth in Section 2 above.
The Company’s right of repurchase described herein shall expire on the later of
(i) one year following the date on which the Optionee’s employment is terminated
or (ii) the fifth anniversary of the Grant Date.
6.4
Prior
to
an IPO, upon the termination of the employment or engagement of the Optionee
for
any reason other than Cause, the Company shall have the right to purchase from
such Optionee and the Optionee (or his successor or representative, as the
case
may be) shall be required to Sell to the Company, at the election of the
Company, all Shares acquired by the Optionee pursuant to the exercise of the
Option, at a per Share purchase price equal to the Fair Market Value of a Share
on the date of such purchase;
provided
,
however
,
that,
at the time the Company exercises its right of repurchase described herein,
the
Shares acquired by the Optionee pursuant to the exercise of the Option have
been
held by the Optionee for at least six months. The Company’s right of repurchase
described herein shall expire one year following the later of (i) the date
on
which the Optionee’s employment is terminated or (ii) the date on which the
Shares being purchased by the Company were acquired by the Optionee pursuant
to
the exercise of an Option.
6.5
Prior
to
an IPO, upon the termination of the employment or engagement of the Optionee
by
reason of the death, Disability or Retirement of the Optionee, or by reason
of
Redundancy of the Optionee, the Optionee (or his successor or representative,
as
the case may be) shall have the right to Sell to the Company and the Company
shall be required to purchase from such Optionee (or his successor or
representative, as the case may be), at the election of the Optionee, all Shares
acquired by the Optionee pursuant to the exercise of the Option, at a per Share
purchase price equal to the Fair Market Value of a Share on the date of such
Sale;
provided
,
however
,
that,
at the time the Optionee exercises the put right described herein, the Shares
being Sold have been held by the Optionee for at least six months.
The
Optionee’s
put right described herein shall expire one year following the date on which
the
Optionee’s employment is terminated.
7.
Effect
of Change in Control
.
Upon
a
Change in Control the Option shall become vested and exercisable with respect
to
an additional 20% of the total Shares subject to the Option (e.g., if,
immediately prior to a Change in Control, 40% of the total Shares subject to
the
Option are vested, then following the Change in Control, 60% of the total Shares
subject to the Option will have vested). Upon an IRR Event, the immediately
preceding sentence shall not apply, and the Option shall become immediately
vested and exercisable with respect to an additional 40% of the total Shares
subject to the Option (e.g., if, immediately prior to a Change in Control that
would constitute an IRR Event, 40% of the total Shares subject to the Option
are
vested, then following the Change in Control, 80% of the total Shares subject
to
the Option will have vested).
8.
Non-Transferability
of Option
.
Except
as
determined by the Committee to accommodate the Optionee’s estate planning, the
Option shall not be Sold, transferred or otherwise disposed of other than by
will or by the laws of descent and distribution. During the lifetime of the
Optionee the Option shall be exercisable only by the Optionee.
9.
No
Right to Continued Employment
.
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer upon
the Optionee any right with respect to continuance of employment by the Company,
nor shall this Agreement or the Plan interfere in any way with the right of
the
Company to terminate the Optionee’s employment at any time.
10.
Withholding
of Taxes
.
The
Company shall have the right to deduct from any distribution of cash to the
Optionee an amount equal to the Withholding Taxes with respect to the Option.
If
the Optionee is entitled to receive Shares upon exercise of the Option, the
Optionee shall make arrangements acceptable to the Company for the payment
of
the Withholding Taxes prior to the issuance of such Shares.
11.
Optionee
Bound by the Plan
.
The
Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof.
12.
Modification
of Agreement
.
This
Agreement may be modified, amended, suspended or terminated, and any terms
or
conditions may be waived, but only by a written instrument executed by the
parties hereto.
13.
Severability.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
14.
Governing
Law
.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Delaware, without giving effect to
the
conflicts of laws principles thereof.
15.
Binding
Effect
.
This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, legal representatives, successors and
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by the Optionee without the prior written consent
of
the Company.
16.
Resolution
of Disputes
.
Any
dispute or disagreement that may arise under or as a result of, or in any way
relate to, the interpretation, construction or application of this Agreement
shall be determined by the Committee. Any determination made by the Committee
hereunder shall be final, binding and conclusive on the Optionee and the Company
for all purposes.
BERRY
PLASTICS GROUP, INC.
______________________
______________________
EXHIBIT
A
EBITDA
Targets
BERRY
PLASTICS GROUP, INC.
NONQUALIFIED
STOCK OPTION AGREEMENT
THIS
AGREEMENT, made as of [
],
2006
(the “Grant Date”), between Berry Plastics Group, Inc. (the “Company”), and
[ ] (the “Optionee”).
WHEREAS,
the Company has adopted the Berry Plastics Group, Inc. 2006 Equity Incentive
Plan (the “Plan”) in order to provide additional incentive to certain employees,
officers, consultants and directors of the Company and its Subsidiaries; and
WHEREAS,
the Committee responsible for administration of the Plan has determined to
grant
an option to the Optionee as provided herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1.
Grant
of Option
.
1.1
The
Company hereby grants to the Optionee the right and option (the “Option”) to
purchase all or any part of an aggregate of [ ] whole Shares
subject to, and in accordance with, the terms and conditions set forth in this
Agreement and the Plan.
1.2
The
Option is not intended to qualify as an “incentive stock option” within the
meaning of Section 422 of the Code.
1.3
This
Agreement shall be construed in accordance and consistent with, and subject
to,
the Plan (which is incorporated herein by this reference) and, except as
otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the definitions set forth in the Plan.
2.
Exercise
Price
.
The
price
at which the Optionee shall be entitled to purchase Shares upon the exercise
of
the Option, to the extent vested and exercisable, shall initially be $[
] per Share (the “Exercise Price”);
provided
,
that on
December 31 of each of 2007, 2008, 2009, 2010 and 2011, the Exercise Price
then
in effect shall increase by 15%; and
provided
,
further
,
that
upon the closing of an IPO, the then Exercise Price shall be increased by a
percentage equal to the product of (i) 15% multiplied by (ii) a fraction,
the numerator of which is the number of days since the last increase and the
denominator of which is 365, and shall be fixed at such level for the remainder
of the term of the Option.
3.
Duration
of Option
.
The
Option shall be exercisable to the extent and in the manner provided herein
for
a period often (10) years from the Grant Date;
provided
,
however
,
that
the Option may be earlier terminated as set forth herein.
4.
Vesting
and Exercisability of Option.
Subject
to the terms and conditions of this Agreement and the Plan, the Option shall
become vested and exercisable with respect to five percent of the total number
of Shares covered by the Option on a quarterly basis, beginning January 1,
2007
(the “Initial Vesting Date”) (accordingly, twenty percent of the Shares subject
to such Option shall have vested by the first anniversary of the Initial Vesting
Date, and an additional twenty percent of the Shares subject to such Option
shall be vested by each of the second, third, fourth and fifth anniversaries
of
the Initial Vesting Date).
5.
Manner
of Exercise and Payment
.
5.1
Subject
to the terms and conditions of this Agreement and the Plan, the Option may
be
exercised by written notice delivered in person or by mail to the Secretary
of
the Company, at its principal executive offices. Such notice shall state that
the Optionee is electing to exercise the Option and the number of Shares in
respect of which the Option is being exercised and shall be signed by the person
or persons exercising the Option. If requested by the Committee, such person
or
persons shall (i) deliver this Agreement to the Secretary of the Company
who shall endorse thereon a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or persons to exercise the
Option.
5.2
The
notice of exercise described in Section 5.1 hereof shall be accompanied by
a cash payment in an amount equal to the full exercise price for the Shares
in
respect of which the Option is being exercised;
provided
,
however
,
that
[following a Termination of Employment (i) by the Company without Cause or
(ii)
by the Optionee after the second anniversary of the Closing following the
attainment of (x) age 55 and (y) at least ten years of completed service with
the Company and/or its Subsidiaries]
1
,
or
otherwise in the sole discretion of the Committee,
payment
of the full exercise price for the Shares in respect of which an Option is
being
exercised may be made in the manner set forth in Section 5.3.
5.3
Subject
to Section 5.2 and to applicable law, payment, in full or in part, of the
exercise price for the Shares in respect of which an Option is being exercised
may be made (a) in the form of unrestricted Shares (by delivery of such Shares
or by attestation) already owned by the Optionee (based on the Fair Market
Value
of Shares on the date the Option is exercised), (b) by delivering a properly
executed exercise notice to the Company, together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds necessary to pay the exercise price, and, if requested, the
amount of any federal, state, local or foreign withholding taxes or (c) by
instructing the Committee to withhold a number of such Shares having a Fair
Market Value on the date of exercise equal to the aggregate exercise price
of
such Option.
5.4
Upon
receipt of notice of exercise and full payment for the Shares in respect of
which the Option is being exercised, the Company shall, subject to
Section 15 of the Plan, take such action as may be necessary to effect the
transfer to the Optionee of the number of
1
Not
applicable to Boots, Beeler and Heseman, whose Agreements include, in
lieu of
the bracketed language: “in the event of the Employee’s retirement following the
fourth anniversary of the Closing Date” ( “in the event of the Employee’s
retirement following the third anniversary of the Closing Date”, in the case of
Beeler).
Shares
as
to which such exercise was effective. Each stock certificate representing Shares
issuable upon the exercise of the Option shall bear such legends as the Company
deems appropriate.
5.5
The
Optionee shall not be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any Shares subject to the Option until (i) the
Option shall have been exercised pursuant to the terms of this Agreement and
the
Optionee shall have paid the full Exercise Price for the number of Shares in
respect of which the Option was exercised and made arrangements acceptable
to
the Company for the payment of all applicable Withholding Taxes, (ii) the
Company shall have issued and delivered the Shares to the Optionee, (iii) the
Optionee’s name shall have been entered as a shareholder of record on the books
of the Company and (iv) the Optionee has executed such other documents as
required by the Company to cause the Optionee to be a party to, and bound by
the
terms of, the Stockholders Agreement, dated as of [ ], among the Company and
such other stockholders party thereto, a copy of which is attached hereto as
Exhibit B, whereupon the Optionee shall have full voting and other ownership
rights with respect to such Shares.
6.
Termination
of Option
.
The
Option shall terminate on the date that is the tenth anniversary of the Grant
Date, unless terminated earlier as follows:
6.1
If
the
employment of the Optionee is terminated for any reason other than for Cause,
the death or Disability of the Optionee, or other than by reason of Redundancy,
or the voluntary termination of employment by the Optionee, the Option shall
become vested with respect to an additional 5% of the total Shares subject
to
the Option for each full three month period that has elapsed from the last
vesting date through the date of such termination. Any portion of the Option
that is not vested and exercisable after giving effect to the immediately
preceding sentence shall immediately terminate. If the employment of the
Optionee is voluntarily terminated by the Optionee, the portion of the Option
that is not then vested and exercisable shall immediately terminate. To the
extent the Option is vested and exercisable upon a termination described in
this
Section 6.1, the Option shall remain exercisable for a period of ninety (90)
days following such termination of employment, after which time the Option
shall
automatically terminate in full.
6.2
If
the
employment of the Optionee is terminated by reason of the death of Disability
of
the Optionee or by reason of Redundancy, the Option shall become immediately
vested and exercisable with respect to an additional 20% of the total Shares
subject to the Option, plus an additional 5% of the total Shares subject to
the
Option for each full three month period that has elapsed from the last vesting
date through the date of such termination. Any portion of the Option that is
not
vested and exercisable after giving effect to the immediately preceding sentence
shall immediately terminate. If the employment of the Optionee is terminated
as
set forth in this Section 6.2, to the extent the Option is vested and
exercisable as of the date of such termination of employment (after giving
effect to additional vesting set forth in this Section 6.2), the Option shall
remain exercisable for one year following such termination of employment, after
which time the Option shall automatically terminate in full.
6.3
If
the
employment of the Optionee is terminated for Cause, (i) the Option shall
immediately terminate in full whether or not the Option is then vested
and
exercisable
and (ii) the Company shall have the right to purchase from the Optionee and
the
Optionee shall be required to Sell to the Company, at the election of the
Company at any time following such termination of employment, any of the Shares
acquired pursuant to the Option at a per share purchase price equal to the
lesser of (x) the Fair Market Value of a Share at the time of such purchase
by
the Company, or (y) the Exercise Price paid for such Shares. The Company’s right
of repurchase described herein shall expire on the later of (i) one year
following the date on which the Optionee’s employment is terminated or (ii) the
fifth anniversary of the Grant Date.
6.4
Prior
to
an IPO, upon the termination of the employment or engagement of the Optionee
for
any reason other than Cause, the Company shall have the right to purchase from
such Optionee and the Optionee (or his successor or representative, as the
case
may be) shall be required to Sell to the Company, at the election of the
Company, all Shares acquired by the Optionee pursuant to the exercise of the
Option, at a per Share purchase price equal to the Fair Market Value of a Share
on the date of such purchase;
provided
,
however
,
that,
at the time the Company exercises its right of repurchase described herein,
the
Shares acquired by the Optionee pursuant to the exercise of the Option have
been
held by the Optionee for at least six months. The Company’s right of repurchase
described herein shall expire one year following the later of (i) the date
on
which the Optionee’s employment is terminated or (ii) the date on which the
Shares being purchased by the Company were acquired by the Optionee pursuant
to
the exercise of an Option.
6.5
Prior
to
an IPO, upon the termination of the employment or engagement of the Optionee
by
reason of the death, Disability or Retirement of the Optionee, or by reason
of
Redundancy of the Optionee, the Optionee (or his successor or representative,
as
the case may be) shall have the right to Sell to the Company and the Company
shall be required to purchase from such Optionee (or his successor or
representative, as the case may be), at the election of the Optionee, all Shares
acquired by the Optionee pursuant to the exercise of an Option, at a per Share
purchase price equal to the Fair Market Value of a Share on the date of such
Sale;
provided
,
however
,
that,
at the time the Optionee exercises the put right described herein, the Shares
being Sold have been held by the Optionee for at least six months. The
Optionee’s put right described herein shall expire one year following the date
on which the Optionee’s employment is terminated.
7.
Effect
of Change in Control
.
Upon
a
Change in Control the Option shall become vested and exercisable with respect
to
an additional 20% of the total Shares subject to the Option (e.g., if,
immediately prior to a Change in Control, 40% of the total Shares subject to
the
Option are vested, then following the Change in Control, 60% of the total Shares
subject to the Option will have vested). Upon an IRR Event, the immediately
preceding sentence shall not apply, and the Option shall become immediately
vested and exercisable with respect to an additional 40% of the total Shares
subject to the Option (e.g., if, immediately prior to a Change in Control that
would constitute an IRR Event, 40% of the total Shares subject to the Option
are
vested, then following the Change in Control, 80% of the total Shares subject
to
the Option will have vested).
8.
Non-Transferability
of Option.
Except
as
determined by the Committee to accommodate the Optionee’s estate planning, the
Option shall not be Sold, transferred or otherwise disposed of other than by
will or by the laws of descent and distribution. During the lifetime of the
Optionee the Option shall be exercisable only the Optionee.
9.
No
Right to Continued Employment
.
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer upon
the Optionee any right with respect to continuance of employment by the Company,
nor shall this Agreement or the Plan interfere in any way with the right of
the
Company to terminate the Optionee’s employment at any time.
10.
Withholding
of Taxes
.
The
Company shall have the right to deduct from any distribution of cash to the
Optionee an amount equal to the Withholding Taxes with respect to the Option.
If
the Optionee is entitled to receive Shares upon exercise of the Option, the
Optionee shall make arrangements acceptable to the Company for the payment
of
the Withholding Taxes prior to the issuance of such Shares.
11.
Optionee
Bound by the Plan
.
The
Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof.
12.
Modification
of Agreement
.
This
Agreement may be modified, amended, suspended or terminated, and any terms
or
conditions may be waived, but only by a written instrument executed by the
parties hereto.
13.
Severability
.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
14.
Governing
Law
.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Delaware, without giving effect to
the
conflicts of laws principles thereof.
15.
Binding
Effect.
This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, legal representatives, successors and
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by the Optionee without the prior written consent
of
the Company.
16.
Resolution
of Disputes
.
Any
dispute or disagreement that may arise under or as a result of, or in any way
relate to, the interpretation, construction or application of this Agreement
shall be determined by the Committee. Any determination made the Committee
hereunder shall be final, binding and conclusive on the Optionee and the Company
for all purposes.
BERRY
PLASTICS GROUP, INC.
By:
___________________________________
_______________________________
BERRY
PLASTICS GROUP, INC.
NONQUALIFIED
STOCK OPTION AGREEMENT
THIS
AGREEMENT, made as of [
], 2006
(the “
Grant
Date
”),
between Berry Plastics Group, Inc. (the “
Company
”),
and
[
] (the
“
Optionee
”).
WHEREAS,
the Company has adopted the Berry Plastics Group, Inc. 2006 Equity Incentive
Plan (the “
Plan
”)
in
order to provide additional incentive to certain employees, officers,
consultants and directors of the Company and its Subsidiaries; and
WHEREAS,
the Committee responsible for administration of the Plan has determined to
grant
an option to the Optionee as provided herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1.
Grant
of Option
.
1.1
The
Company hereby grants to the Optionee the right and option (the “
Option
”)
to
purchase all or any part of an aggregate of [
]
whole
Shares subject to, and in accordance with, the terms and conditions set forth
in
this Agreement and the Plan.
1.2
The
Option is not intended to qualify as an “incentive stock option” within the
meaning of Section 422 of the Code.
1.3
This
Agreement shall be construed in accordance and consistent with, and subject
to,
the Plan (which is incorporated herein by this reference) and, except as
otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the definitions set forth in the Plan.
2.
Exercise
Price
.
The
price
at which the Optionee shall be entitled to purchase Shares upon the exercise
of
the Option, to the extent vested and exercisable, shall be $ [
] per
Share.
3.
Duration
of Option
.
The
Option shall be exercisable to the extent and in the manner provided herein
for
a period of ten (10) years from the Grant Date;
provided
,
however
,
that
the Option may be earlier terminated as set forth herein.
4.
Vesting
and Exercisability of Option
.
Subject
to the terms and conditions of this Agreement and the Plan, the Option shall
become vested and exercisable with respect to five percent of the total number
of Shares covered by the Option on a quarterly basis, beginning January 1,
2007
(the “Initial Vesting Date”) (accordingly, twenty percent of the Shares subject
to such Option shall have vested by the first anniversary of the Initial Vesting
Date, and an additional twenty percent of the
Shares
subject to such Option shall be vested by each of the second, third, fourth
and
fifth anniversaries of the Initial Vesting Date).
5.
Manner
of Exercise and Payment
.
5.1
Subject
to the terms and conditions of this Agreement and the Plan, the Option may
be
exercised by written notice delivered in person or by mail to the Secretary
of
the Company, at its principal executive offices. Such notice shall state that
the Optionee is electing to exercise the Option and the number of Shares in
respect of which the Option is being exercised and shall be signed by the person
or persons exercising the Option. If requested by the Committee, such person
or
person shall (i) deliver this Agreement to the Secretary of the Company who
shall endorse thereon a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or person to exercise the
Option.
5.2
The
notice of exercise described in Section 5.1 hereof shall be accompanied by
a cash payment in an amount equal to the full exercise price for the Shares
in
respect of which the Option is being exercised;
provided
,
however
,
that
[following a Termination of Employment (i) by the Company without Cause or
(ii)
by the Optionee after the second anniversary of the Closing following the
attainment of (x) age 55 and (y) at least ten years of completed service with
the Company and/or its Subsidiaries]
1
,
or
otherwise in the sole discretion of the Committee,
payment
of the full exercise price for the Shares in respect of which an Option is
being
exercised may be made in the manner set forth in Section 5.3.
5.3
Subject
to Section 5.2 and to applicable law, payment, in full or in part, of the
exercise price for the Shares in respect of which an Option is being exercised
may be made (a) in the form of unrestricted Shares (by delivery of such Shares
or by attestation) already owned by the Optionee (based on the Fair Market
Value
of Shares on the date the Option is exercised), (b) by delivering a properly
executed exercise notice to the Company, together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds necessary to pay the exercise price, and, if requested, the
amount of any federal, state, local or foreign withholding taxes or (c) by
instructing the Committee to withhold a number of such Shares having a Fair
Market Value on the date of exercise equal to the aggregate exercise price
of
such Option.
5.4
Upon
receipt of notice of exercise and full payment for the Shares in respect of
which the Option is being exercised, the Company shall, subject to
Section 15 of the Plan, take such action as may be necessary to effect the
transfer to the Optionee of the number of Shares as to which such exercise
was
effective. Each stock certificate representing Shares issuable upon the exercise
of the Option shall bear such legends as the Company deems
appropriate.
5.5
The
Optionee shall not be deemed to be the holder of, or to have any of the rights
of a holder with respect to any Shares subject to the Option until (i) the
Option shall have been exercised pursuant to the terms of this Agreement and
the
Optionee shall have
1
Not
applicable to Boots, Beeler and Heseman, whose Agreements include, in
lieu of
the bracketed language: “in the event of the Employee’s retirement following the
fourth anniversary of the Closing Date” (“in the event of the Employee’s
retirement following the third anniversary of the Closing Date”, in the case of
Beeler).
paid
the
full exercise price for the number of Shares in respect of which the Option
was
exercised and made arrangements acceptable to the Company for the payment of
all
applicable Withholding Taxes, (ii) the Company shall have issued and
delivered the Shares to the Optionee, (iii) the Optionee’s name shall have
been entered as a shareholder of record on the books of the Company and
(iv) the Optionee has executed such other documents as required by the
Company to cause the Optionee to be a party to, and bound by the terms of,
the
Stockholders Agreement, dated as of [
],
among
the Company and such other stockholders party thereto, whereupon the Optionee
shall have full voting and other ownership rights with respect to such
Shares.
6.
Termination
of Option
.
The
Option shall terminate on the date that is the tenth anniversary of the Grant
Date, unless terminated earlier as follows:
6.1
If
the
employment of the Optionee is terminated for any reason other than for Cause,
the death or Disability of the Optionee, or other than by reason of Redundancy,
or the voluntary termination of employment by the Optionee, the Option shall
become vested with respect to an additional 5% of the total Shares subject
to
the Option for each full three month period that has elapsed from the last
vesting date through the date of such termination. Any portion of the Option
that is not vested and exercisable after giving effect to the immediately
preceding sentence shall immediately terminate. If the employment of the
Optionee is voluntarily terminated by the Optionee, the portion of the Option
that is not then vested and exercisable shall immediately terminate. To the
extent the Option is vested and exercisable upon a termination described in
this
Section 6.1, the Option shall remain exercisable for a period of ninety
(90) days following such termination of employment, after which time the Option
shall automatically terminate in full.
6.2
If
the
employment of the Optionee is terminated by reason of the death or Disability
of
the Optionee or by reason of Redundancy, the Option shall become immediately
vested and exercisable with respect to an additional 20% of the total Shares
subject to the Option, plus an additional 5% of the total Shares subject to
the
Option for each full three month period that has elapsed from the last vesting
date through the date of such termination. Any portion of the Option that is
not
vested and exercisable after giving effect to the immediately preceding sentence
shall immediately terminate. If the employment of the Optionee is terminated
as
set forth in this Section 6.2, to the extent the Option is vested and
exercisable as of the date of such termination of employment (after giving
effect to additional vesting set forth in this Section 6.2), the Option
shall remain exercisable for one year following such termination of employment,
after which time the Option shall automatically terminate in full.
6.3
If
the
employment of the Optionee is terminated for Cause, (i) the Option shall
immediately terminate in full whether or not the Option is then vested and
exercisable and (ii) the Company shall have the right to purchase from the
Optionee and the Optionee shall be required to Sell to the Company, at the
election of the Company at any time following such termination of employment,
any of the Shares acquired pursuant to the Option at a per share purchase price
equal to the lesser of (x) the Fair Market Value of a Share at the time of
such purchase by the Company, or (y) the exercise price set forth in
Section 2 above. The Company’s right of repurchase described herein shall
expire on the later of (i) one year following
the
date
on which the Optionee’s employment is terminated or (ii) the fifth
anniversary of the Grant Date.
6.4
Prior
to
an IPO, upon the termination of the employment or engagement of the Optionee
for
any reason other than Cause, the Company shall have the right to purchase from
such Optionee and the Optionee (or his successor or representative, as the
case
may be) shall be required to Sell to the Company, at the election of the
Company, all Shares acquired by the Optionee pursuant to the exercise of the
Option, at a per Share purchase price equal to the Fair Market Value of a Shares
on the date of such purchase;
provided
,
however
,
that,
at the time the Company exercises its right of repurchase described herein,
the
Shares acquired by the Optionee pursuant to the exercise of the Option have
been
held by the Optionee for at least six months. The Company’s right of repurchase
described herein shall expire one year following the later of (i) the date
on which the Optionee’s employment is terminated or (ii) the date on which
the Shares being purchased by the Company were acquired by the Optionee pursuant
to the exercise of an Option.
6.5
Prior
to
an IPO, upon the termination of the employment or engagement of the Optionee
by
reason of the death, Disability or Retirement of the Optionee, or by reason
of
Redundancy of the Optionee, the Optionee (or his successor or representative,
as
the case may be) shall have the right to Sell to the Company and the Company
shall be required to purchase from such Optionee (or his successor or
representative, as the case may be), at the election of the Optionee, all Shares
acquired by the Optionee pursuant to the exercise of the Option, at a per Share
purchase price equal to the Fair Market Value of a Share on the date of such
Sale;
provided
,
however
,
that,
at the time the Optionee exercises the put right described herein, the Shares
being Sold have been held by the Optionee for at least six months. The
Optionee’s put right described herein shall expire one year following the date
on which the Optionee’s employment is terminated.
7.
Effect
of Change in Control
.
Upon
a
Change in Control the Option shall become vested and exercisable with respect
to
an additional 20% of the total Shares subject to the Option (e.g., if,
immediately prior to a Change in Control, 40% of the total Shares subject to
the
Option are vested, then following the Change in Control, 60% of the total Shares
subject to the Option will have vested). Upon an IRR Event, the immediately
preceding sentence shall not apply, and the Option shall become immediately
vested and exercisable with respect to an additional 40% of the total Shares
subject to the Option (e.g., if, immediately prior to a Change in Control that
would constitute an IRR Event, 40% of the total Shares subject to the Option
are
vested, then following the Change in Control, 80% of the total Shares subject
to
the Option will have vested).
8.
Non-Transferability
of Option
.
Except
as
determined by the Committee to accommodate the Optionee’s estate planning, the
Option shall not be Sold, transferred or otherwise disposed of other than by
will or by the laws of descent and distribution. During the lifetime of the
Optionee the Option shall be exercisable only by the Optionee.
9.
No
Right to Continued Employment
.
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer upon
the Optionee any right with respect to continuance of employment by the Company,
nor shall this Agreement or the Plan interfere in any way with the right of
the
Company to terminate the Optionee’s employment at any time.
10.
Withholding
of Taxes
.
The
Company shall have the right to deduct from any distribution of cash to the
Optionee an amount equal to the Withholding Taxes with respect to the Option.
If
the Optionee is entitled to receive Shares upon exercise of the Option, the
Optionee shall make arrangements acceptable to the Company for the payment
of
the Withholding Taxes prior to the issuance of such Shares.
11.
Optionee
Bound by the Plan
.
The
Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof.
12.
Modification
of Agreement
.
This
Agreement may be modified, amended, suspended or terminated, and any terms
or
conditions may be waived, but only by a written instrument executed by the
parties hereto. Notwithstanding the vesting provisions contained in the Plan
on
the Grant Date, the Optionee hereby acknowledges that the vesting of the Option
shall be in accordance with the provisions of paragraph 4 herein.
13.
Severability
.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
14.
Governing
Law
.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Delaware, without giving effect to
the
conflicts of laws principles thereof.
15.
Binding
Effect
.
This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, legal representatives, successors and
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by the Optionee without the prior written consent
of
the Company.
16.
Resolution
of Disputes
.
Any
dispute or disagreement that may arise under or as a result of, or in any way
relate to, the interpretation, construction or application of this Agreement
shall be determined by the Committee. Any determination made by the Committee
hereunder shall be final, binding and conclusive on the Optionee and the Company
for all purposes.
*
*
*
BERRY
PLASTICS GROUP, INC.
_____________________________
_____________________________
BERRY
PLASTICS GROUP, INC.
STOCK
APPRECIATION RIGHTS AGREEMENT
THIS
AGREEMENT, made as of [
], 2006
(the “
Grant
Date
”),
between Berry Plastics Group, Inc. (the “
Company
”),
and
[
]
(the
“
Grantee
”).
WHEREAS,
the Company has adopted the Berry Plastics Group, Inc. 2006 Equity Incentive
Plan (the “
Plan
”)
in
order to provide additional incentive to certain employees, officers,
consultants and directors of the Company and its Subsidiaries; and
WHEREAS,
the Committee responsible for administration of the Plan has determined to
grant
a stock appreciation right to the Grantee as provided herein;
NOW,
THEREFORE, the parties hereto agree as follows:
1.
Grant
of SAR
.
1.1
The
Company hereby grants to the Grantee the right and option (the “
SAR
”)
to
receive an amount in cash equal in value to the excess, if any, of the Fair
Market Value of a Share on the date of exercise over the exercise price paid
pursuant to Paragraph 2 below, and in accordance with, the terms and conditions
set forth in this Agreement and the Plan.
1.2
This
Agreement shall be construed in accordance and consistent with, and subject
to,
the Plan (which is incorporated herein by this reference) and, except as
otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the definitions set forth in the Plan.
2.
Exercise
Price
.
The
price
at which the Grantee shall be entitled to exercise the SAR, to the extent vested
and exercisable, shall be $[
] per
underlying Share.
3.
Duration
of SAR
.
The
SAR
shall be exercisable to the extent and in the manner provided herein for a
period of ten (10) years from the Grant Date;
provided
,
however
,
that
the SAR may be earlier terminated as set forth herein.
4.
Vesting
and Exercisability of SAR
.
(a)
Subject
to the terms and conditions of this Agreement and the Plan, upon the achievement
of the EBITDA Target established for each fiscal year or portion thereof as
set
forth on
Exhibit
A
hereto,
the SAR shall become vested and exercisable with respect to the percentage
of
the total number of Shares covered by the SAR indicated on
Exhibit
A
next to
such EBITDA Target as of the date that the Committee determines that such EBITDA
Target has been achieved (the “
Determination
Date
”).
Notwithstanding anything contained in this Agreement or the Plan to the
contrary, in the event that an Grantee’s employment is terminated other than
for
Cause,
following either (i) the end of a fiscal year during the Performance Period,
or
(ii) the end of the Performance Period, but, in either case, prior to the
Determination Date with respect to such period, the Grantee will be entitled
to
vesting, if any (to the extent EBITDA Targets are achieved), with respect to
such period as of the applicable Determination Date;
provided
that
such Determination Date occurs prior to the expiration of the post-termination
exercise period as set forth in Section 6.1 or 6.2 herein, as applicable. In
the
event that the EBITDA Target for any fiscal year or portion thereof in a
Performance Period is not achieved (such fiscal year, a “
Missed
Year
”)
and
the EBITDA Target with respect to (x) the immediately preceding fiscal year
(except in the case that the Missed Year is the first fiscal year in the
Performance Period), or (y) the immediately following fiscal year (except in
the
case that the Missed Year is the last year in such Performance Period), is
exceeded (each such immediately preceding or immediately following year, an
“
Excess
Year
”),
then
the excess of EBITDA over the EBITDA Target for such Excess Year or Excess
Years
(the excess with respect to an Excess Year, the “
Excess
EBITDA
”)
shall
be applied to the Missed Year, and if the application of such Excess EBITDA
results in EBITDA with respect to the Missed Year equal to or in excess of
the
EBITDA Target with respect to such Missed Year, then the number of Shares with
respect to which the SAR failed to vest by reason of the Company’s failure to
achieve the EBITDA Target for the Missed Year shall become vested on the date
the Committee determines that such EBITDA Target with respect to the Missed
Year
was achieved with the application of such Excess EBITDA;
provided
,
with
respect to any Excess Year, Excess EBITDA for such year may only be applied
to
one Missed Year;
provided
,
further
,
that,
for such vesting to occur, the Grantee must remain employed by the Company
or
one of its Subsidiaries for the duration of any such Excess Year and the Missed
Year to which any such Excess EBITDA is applied. The Determination Date for
any
period shall be no later than 30 days following the receipt by the Company
of
audited financial statements for the fiscal year or portion thereof, as
applicable.
(b)
The
SAR
shall become vested and exercisable with respect to the total number of Shares
remaining unvested, if any, on the ninth anniversary of the Grant Date,
provided
,
that
the Grantee remains employed by the Company or one of its Affiliates through
such ninth anniversary.
5.
Manner
of Exercise and Payment
.
5.1
Subject
to the terms and conditions of this Agreement and the Plan, the SAR may be
exercised by written notice delivered in person or by mail to the Secretary
of
the Company, at its principal executive offices. Such notice shall state that
the Grantee is electing to exercise the SAR and the number of Shares in respect
of which the SAR is being exercised and shall be signed by the person or persons
exercising the SAR. If requested by the Committee, such person or persons shall
(i) deliver this Agreement to the Secretary of the Company who shall endorse
thereon a notation of such exercise and (ii) provide satisfactory proof as
to
the right of such person or persons to exercise the SAR.
5.2
The
notice of exercise described in Section 5.1 hereof shall be accompanied by
a cash payment in an amount equal to the full exercise price for the Shares
in
respect of which the SAR is being exercised;
provided
,
however
,
that
following a Termination of Employment (i) by the Company without Cause or (ii)
by the Grantee after the second anniversary of the Closing following the
attainment of (x) age 55 and (y) at least ten years of
completed
service with the Company and/or its Subsidiaries, or otherwise in the sole
discretion of the Committee,
payment
of the full exercise price for the Shares in respect of which an SAR is being
exercised may be made in the manner set forth in Section 5.3.
5.3
Subject
to Section 5.2 and to applicable law, the SARs granted hereunder may, to the
extent then vested, be exercised at any time prior to the expiration thereof
in
accordance with Section 6 below, by delivering a written notice to the Company
stating the number of Shares with respect to which the SARs granted hereunder
are being exercised.
5.4
Upon
receipt of notice of exercise, the Company shall, subject to Section 15 of
the Plan, take such action as may be necessary to effect the transfer to the
Grantee of an amount in cash equal to the Fair Market Value of the number of
Shares as to which such exercise was effective.
5.5
The
Grantee shall not be deemed to be the holder of, or to have any of the rights
of
a holder with respect to, any Shares subject to the SAR.
6.
Termination
of SAR
.
The SAR
shall terminate on the date that is the tenth anniversary of the Grant Date,
unless terminated earlier as follows:
6.1
If
the
employment of the Grantee is terminated for any reason other than the death
or
Disability of the Grantee, other than for Cause or other than by reason of
Redundancy, the portion of the SAR that is not then vested and exercisable
shall
immediately terminate. To the extent the SAR is vested and exercisable as of
the
date of such termination of employment, the SAR shall remain exercisable for
a
period of ninety (90) days following such termination of employment, after
which
time the SAR shall automatically terminate in full.
6.2
If
the
employment of the Grantee is terminated by reason of the death or Disability
of
the Grantee or by reason of Redundancy, the SAR shall become immediately vested
and exercisable with respect to an additional 20% of the total Shares subject
to
the SAR. Any portion of the SAR that is not vested and exercisable after giving
effect to the immediately preceding sentence shall immediately terminate. If
the
employment of the Grantee is terminated as set forth in this Section 6.2, to
the
extent the SAR is vested and exercisable as of the date of such termination
of
employment (after giving effect to additional vesting set forth in this Section
6.2), the SAR shall remain exercisable for one year following such termination
of employment, after which time the SAR shall automatically terminate in
full.
6.3
If
the
employment of the Grantee is terminated for Cause, (i) the SAR shall immediately
terminate in full whether or not the SAR is then vested and exercisable and
(ii)
the Grantee shall be required to pay to the Company, at the election of the
Company at any time following such termination of employment, an amount in
cash
equal to the proceeds received by the Grantee pursuant to the exercise of the
SAR granted hereunder. The Company’s right to receive payment as described
herein shall expire on the later of (i) one year following the date on which
the
Grantee’s employment is terminated or (ii) the fifth anniversary of the Grant
Date.
7.
Effect
of Change in Control
.
Upon
a
Change in Control the SAR shall become vested and exercisable with respect
to an
additional 20% of the total Shares subject to the SAR (e.g., if, immediately
prior to a Change in Control, 40% of the total Shares subject to the SAR are
vested, then following the Change in Control, 60% of the total Shares subject
to
the SAR will have vested). Upon an IRR Event, the immediately preceding sentence
shall not apply, and the SAR shall become immediately vested and exercisable
with respect to an additional 40% of the total Shares subject to the SAR (e.g.,
if, immediately prior to a Change in Control that would constitute an IRR Event,
40% of the total Shares subject to the SAR are vested, then following the Change
in Control, 80% of the total Shares subject to the SAR will have
vested).
8.
Non-Transferability
of SAR
.
Except
as
determined by the Committee to accommodate the Grantee’s estate planning, the
SAR shall not be Sold, transferred or otherwise disposed of other than by will
or by the laws of descent and distribution. During the lifetime of the Grantee
the SAR shall be exercisable only by the Grantee.
9.
No
Right to Continued Employment
.
Nothing
in this Agreement or the Plan shall be interpreted or construed to confer upon
the Grantee any right with respect to continuance of employment by the Company,
nor shall this Agreement or the Plan interfere in any way with the right of
the
Company to terminate the Grantee’s employment at any time.
10.
Withholding
of Taxes
.
The
Company shall have the right to deduct from any distribution of cash to the
Grantee an amount equal to the Withholding Taxes with respect to the SAR.
11.
Grantee
Bound by the Plan
.
The
Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound
by all the terms and provisions thereof.
12.
Modification
of Agreement
.
This
Agreement may be modified, amended, suspended or terminated, and any terms
or
conditions may be waived, but only by a written instrument executed by the
parties hereto.
13.
Severability
.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
14.
Governing
Law.
The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Delaware, without giving effect to
the
conflicts of laws principles thereof.
15.
Binding
Effect
.
This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, legal representatives, successors and
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by the Grantee without the prior written consent
of
the Company.
16.
Resolution
of Disputes
.
Any
dispute or disagreement that may arise under or as a result of, or in any way
relate to, the interpretation, construction or application of this Agreement
shall be determined by the Committee. Any determination made by the Committee
hereunder shall be final, binding and conclusive on the Grantee and the Company
for all purposes.
BERRY
PLASTICS GROUP, INC.
___________________________
______________________
EXHIBIT
A
EBITDA
Targets
EMPLOYMENT
AGREEMENT
dated as
of September 15, 2006, between
Berry
Plastics Corporation
,
a
Delaware corporation (the “
Company
”),
and
the individual listed on Schedule 1 hereto (the “
Employee
”).
The
Employee is currently employed by the Company and possesses special and
particular knowledge of the business, products and operations of the Company
and
of the industry in which it operates. The Company and the Employee now desire
to
set forth in writing the terms of the Employee’s employment by the Company upon
the consummation of the Merger (as defined in the Agreement and Plan of Merger
(the “
Merger
Agreement
”),
dated
as of June 28, 2006, by and between BPC Holding Corporation, BPC Holding
Acquisition Corp. (“
BPC
”),
and
BPC Acquisition Corp.).
NOW,
THEREFORE, in consideration of the mutual covenants and obligations hereinafter
set forth, the parties hereto agree as follows:
1.
Employment
.
The
Company hereby employs the Employee, and the Employee hereby accepts such
employment by the Company, on the terms and subject to the conditions
hereinafter set forth.
1.
Term
.
Subject
to earlier termination as provided herein, the employment of the Employee
hereunder shall commence on and subject to the occurrence of the Closing Date
(as defined in the Merger Agreement) (the “
Effective
Date
”),
and
terminate on the December 31, 2011 (the “
Expiration
Date
”).
Such
period of employment is hereinafter referred to as the “
Employment
Period
.”
2.
Duties
.
1)
During
the Employment Period, the Employee initially shall be employed by the Company
at the position set forth on Schedule 1 hereto, and shall perform such duties
and services for the Company consistent with such position as may be from time
to time assigned to him by the Board of Directors of BPC.
(b)
The
Employee shall perform his duties and services hereunder at the offices of
the
Company in Evansville, Indiana, during the Employment Period;
provided
,
however
,
that
the Company may require the Employee to travel in connection with the
performance of such duties and services. Anything contained herein to the
contrary notwithstanding, if the Company requires the Employee to relocate
to a
city located outside of the 50 mile radius of Evansville, Indiana, and notifies
the Employee in writing that his continued employment by the Company is
conditional upon such relocation and the Employee refuses to so relocate, any
Termination of Employment of the Employee resulting therefrom, whether initiated
by the Company or the Employee, shall constitute a Termination Without Cause.
3.
Time
to be Devoted to Employment
.
Except
for vacations in accordance with the Company’s vacation policies and absences
due to temporary illness, during the Employment Period, the Employee shall
devote all of his business time, attention and energies to the performance
of
his duties under this Agreement. During the Employment Period, the Employee
shall not be engaged in any other business activity which, in the judgment
of
the Company,
conflicts
with the duties of the Employee under this Agreement, whether or not such
activity is pursued for gain, profit or other pecuniary advantage.
4.
Compensation;
Reimbursement
.
(a)
Base
Salary
.
During
the Employment Period, the Company shall pay to the Employee an annual base
salary as set forth in Schedule 1 hereto,
which
shall be subject to review and, at the option of persons having authority
regarding such matters at the Company, subject to increase (such salary, as
the
same may be increased from time to time as aforesaid, being referred to herein
as the “
Base
Salary
”).
The
Base Salary shall be payable in such installments (but not less frequent than
monthly) as is the policy of the Company with respect to employees of the
Company at substantially the same level of employment as the Employee.
(b)
Bonus
.
During
the Employment Period, the Employee shall be entitled to participate in all
bonus and incentive programs of the Company (the “
Programs
”)
generally available from time to time to employees of the Company at
substantially the same level of employment as the Employee, such participation
to be in substantially the same manner as the participation therein by such
employees.
(c)
Benefits
.
During
the Employment Period, the Employee shall be entitled to such benefits as are
generally made available from time to time to other employees of the Company
at
substantially the same level of employment as the Employee.
(d)
Reimbursement
of Expenses
.
During
the Employment Period, the Company shall reimburse the Employee, in accordance
with the policies and practices of the Company in effect from time to time
with
respect to other employees of the Company at substantially the same level of
employment as the Employee, for all reasonable and necessary traveling expenses
and other disbursements incurred by him for or on behalf of the Company in
connection with the performance of his duties hereunder (such expenses being
referred to herein as “
Reimbursable
Expenses
”)
upon
presentation by the Employee to the Company of appropriate documentation
therefor.
5.
Termination
of Employment
.
(a)
General
.
The
Company may terminate the Employee’s employment hereunder at any time for any
reason. The Employee may terminate his employment hereunder pursuant to a
voluntary Termination or a Disability Termination. The Employee’s employment
shall terminate automatically upon his death. Any termination of the Employee’s
employment is referred to herein as a “
Termination
of Employment
.”
(b)
Termination
Notice
.
The
Company or the Employee may initiate a Termination of Employment in any manner
permitted hereunder by giving the other party written notice thereof (the
“
Termination
Notice
”).
(c)
Termination
Date
.
The
effective date (the “
Termination
Date
”)
of any
Termination of Employment shall be deemed to be the later of (i) the date on
which the Termination Notice is given and (ii) the date specified as the
effective date in the Termination Notice;
provided
,
however
,
that in
the case of the Employee’s death, the Termination Date shall
be
his
date of death.
6.
Termination
for Cause
.
Any
Termination of Employment initiated by the Company upon the occurrence of an
event that constitutes Cause shall be a “
Termination
for Cause
.”
For
purposes of this Agreement, “
Cause
”
shall
mean the Employee’s (i) willful misconduct with respect to the business and
affairs of the Company or any subsidiary or affiliate thereof, insubordination
or willful neglect of duties (other than neglect due solely to the Employee’s
illness or other involuntary mental or physical disability), including the
Employee’s violation of any material Company policy, (ii) material breach of any
of the provisions of this Agreement or (iii) conviction for a crime involving
moral turpitude or fraud. In the event of a Termination for Cause, the
Termination Notice must state that the Termination of Employment is for
Cause.
7.
Termination
Without Cause
.
Any
Termination of Employment initiated by the Company (other than a Termination
for
Cause), the Employee’s death and a Disability Termination shall each be a
“
Termination
Without Cause
.”
8.
Death
or Disability Termination
.
Any
Termination of Employment resulting from the Employee’s Disability (as
hereinafter defined) shall be a Disability Termination. For purposes of this
Agreement, the term “
Employee’s
Disability
”
shall
mean the Employee’s illness or other involuntary physical or mental disability
which prevents the Employee from performing his duties for a period of 90 days
in any 360-day period. In the event of a Disability Termination, the Termination
Notice must state that the Termination of Employment is a Disability
Termination.
9.
Other
Termination by the Employee
.
Any
Termination of Employment initiated by the Employee (other than a Termination
of
Employment resulting from the Employee’s death or pursuant to Disability
Termination) shall be a “
Voluntary
Termination
.”
10.
Effect
of Termination of Employment
.
In the
event of a Termination of Employment, neither the Employee nor his estate or
beneficiaries shall have any further rights or claims against the Company under
this Agreement except the right to receive:
(a)
the
portion of the Base Salary which accrued with respect to the period prior to
the
Termination Date but which remained unpaid as of the Termination Date;
(b)
the
aggregate amount of Reimbursable Expenses which were incurred prior to the
Termination Date but which were not reimbursed by the Company as provided in
Section 5(d) prior to the Termination Date; and
(c)
any
other
benefits, including, without limitation, any accrued vacation payable in
accordance with the policies of the Company from time to time in effect for
the
officers of the Company; and
provided
,
however
,
that if
the Termination of Employment is pursuant to a Termination Without Cause or
a
Resignation for Good Reason (as defined in paragraph (e) below), then, in
addition to the amounts computed pursuant to Sections 11(a) through 11(c),
the
Employee shall have the right to receive as severance compensation an amount
equal to the pro-rata portion of the
applicable
bonus provided for in Section 5(b) plus the greater of (A) 100% of one year’s
Base Salary (as of the Termination Date) to be paid until the later to occur
of
(x) the second anniversary of the Effective Date and (y) the first anniversary
of the Termination Date and (B) 1/12th of one year’s Base Salary (as of the
Termination Date) for each year (not to exceed 30 years in the aggregate) that
the Employee was employed by the Company (and its predecessors-in-interest),
the
amount referred to in clause (A) or (B), as the case may be, to be payable
at
the same times at which and in the same manner in which the Base Salary would
have been payable to the Employee had the Termination of Employment not occurred
(the amount payable by the Company to the Employee pursuant to this proviso
being hereinafter referred to as the “
Severance
Compensation
”);
provided
further
,
however
,
in the
event that, at any time after the Expiration Date, there occurs a Termination
of
Employment pursuant to a Termination Without Cause, the Company shall pay the
Severance Compensation to the Employee as if the Expiration Date had not
occurred.
(d)
Upon
the
termination of the Employee’s employment by reason of “retirement” (as defined
in the Company’s Health and Welfare Plan for Early Retirees (the “
Retiree
Plan
”)),
the
Employee (and his or her eligible spouse and dependents) shall be entitled
to
receive post-retirement medical insurance coverage pursuant to the terms of
the
Retiree Plan, for which the cost of premiums shall be paid by the Employee
(or
such spouse and/or dependents). In the event that the Retiree Plan is no longer
in effect (or if otherwise necessary for tax and legal purposes), the Company
shall make available equivalent coverage to the Employee (and such spouse and/or
dependents) at substantially the same cost to the Employee (and such spouse
and/or dependents) as would have been charged under the Retiree Plan as of
the
earlier of the date the Retiree Plan is terminated and the time of the
Employee’s retirement (“
Equivalent
Retiree Coverage
”);
provided
,
however
,
that
the Company may increase the premium charged to the Employee (and such spouse
and/or dependents) based on the increase in cost, if any, to provide the Retiree
Plan that may arise after the Employee’s retirement. The Company shall take all
action necessary to ensure that the Equivalent Retiree Coverage, if any, shall
be provided other than pursuant to the terms of a self-insured medical
reimbursement plan that does not satisfy the requirements of Section 105(h)(2)
of the Internal Revenue Code of 1986, as amended.
(e)
For
purposes of this Section 11, “
Resignation
for Good Reason
”
means
the Employee’s resignation as a result of Employee’s reassignment to an office
location greater than 25 miles from the office location Employee utilized as
of
the Effective Date.
11.
Nondisclosure
of Confidential Information
.
The
Employee shall not, at any time during or after the Employment Period, (i)
disclose to any person, firm, corporation, association or other entity, except
as required by law, any Confidential Information (as hereinafter defined) for
any reason or purpose whatsoever or (ii) make use of any Confidential
Information for his own purpose or for the benefit of any other person, firm,
corporation, association or other entity except the Company or any subsidiary
or
affiliate thereof. For purposes of this Agreement, the term “
Confidential
Information
”
shall
mean any information concerning the business, clients or affairs of the Company
or any subsidiary or affiliate thereof, including, without limitation, any
technical or nontechnical data, formulae (including cost and/or pricing
formulae), devices, methods (including cost and/or pricing methods and operating
methods), techniques, processes, financial data (including marketing information
and strategies and personnel data) and lists of
actual
or
potential customers or suppliers;
provided
,
however
,
that
Confidential Information shall not include (i) information which is in the
public domain at the time of receipt thereof by the Employee, (ii) information
which, after receipt thereof by the Employee, becomes part of the public domain
through no act or omission of the Employee and (iii) information which was
lawfully within the Employee’s possession prior to the initial commencement of
the Employee’s association with the Company or any subsidiary or affiliate
thereof.
12.
Restrictive
Covenants
.
2)
The
Employee acknowledges and recognizes that during the Employment Period he will
be privy to Confidential Information and further acknowledges and recognizes
that the Company would find it extremely difficult to replace the Employee.
Accordingly, in consideration of the premises contained herein and the
consideration to be received by the Employee hereunder (including, without
limitation, the Severance Compensation), without the prior written consent
of
the Company, the Employee shall not, at any time during the employer/employee
relationship between the Company and the Employee and for the period of time
beginning with the termination of such employer/employee relationship for any
reason (including by the Employee for Good Reason and or by the Company for
Cause) and the date on which the final payment of Severance Compensation would
have been made to the Employee by the Company if such termination had been
a
Termination Without Cause, (i) directly or indirectly engage in, represent
in
any way, or be connected with, any Competing Business directly competing with
the business of the Company or any subsidiary or affiliate thereof within any
state in which the Company or any such subsidiary or affiliate transacts
business, whether such engagement shall be as an officer, director, owner,
employee, partner, affiliate or other participant in any Competing Business;
(ii) assist others in engaging in any Competing Business in the manner described
in clause (i) above; (iii) induce or solicit individuals who are, or were at
any
time in the preceding twelve months, employees of the Company or any subsidiary
or affiliate thereof to terminate their employment with the Company or any
such
subsidiary or affiliate or to engage in any Competing Business, or hire, or
induce or solicit (or assist others to hire or induce or solicit) the hiring
of,
individuals then employed, or employed at any time in the preceding twelve
months, by the Company or any subsidiary thereof; or (iv) induce any entity
or
person with which the Company or any subsidiary or any affiliate thereof has
a
business relationship to terminate or alter such business relationship. As
used
herein, “
Competing
Business
”
shall
mean any business involving the sale of products in any city or county in any
state of the United States if such business or the products sold by it are
competitive, directly or indirectly, at the time of the Termination of
Employment with (A) the business of the Company, (B) any of the products
manufactured, sold or distributed by the Company or (C) any products or business
being developed or conducted by the Company.
(b)
The
Employee understands that the foregoing restrictions may limit his ability
to
earn a livelihood in a business similar to the business of the Company or any
subsidiary or affiliate thereof, but he nevertheless believes that he has
received and will receive sufficient consideration and other benefits as an
employee of the Company and as otherwise provided hereunder to justify clearly
such restrictions which, in any event (given his education, skills and ability),
the Employee does not believe would prevent him from earning a living.
13.
Right
to Inventions
.
The
Employee shall promptly disclose, grant and assign to the Company for its sole
use and benefit any and all inventions, improvements, technical information
and
suggestions reasonably relating to the business of the Company or
any
subsidiary
or affiliate thereof (collectively, the “
Inventions
”)
which
the Employee may develop or acquire during the Employment Period (whether or
not
during usual working hours), together with all patent applications, letters
patent, copyrights and reissues thereof that may at any time be granted for
or
upon the Inventions. In connection therewith:
(a)
the
Employee recognizes and agrees that the Inventions shall be the sole property
of
the Company, and the Company shall be the sole owner of all patent applications,
letters patent, copyrights and reissues thereof that may at any time be granted
for or on the Inventions;
(b)
the
Employee hereby assigns to the Company any rights the Employee may have in
or
acquire to the Inventions;
(c)
the
Employee shall, at the expense of the company, promptly execute and deliver
such
applications, assignments, descriptions and other instruments as may be
necessary or proper in the opinion of the Company to vest title to the
Inventions and any patent applications, patents, copyrights, reissues or other
proprietary rights related thereto in the Company and to enable it to obtain
and
maintain the entire right and title thereto throughout the world;
(d)
the
Employee recognizes and agrees that the Inventions to the extent copyrightable
shall constitute works for hire under the copyright laws of the United States;
and
(e)
the
Employee shall render to the Company, at its expense, all such assistance as
it
may require in the prosecution of applications for said patents, copyrights,
reissues or other proprietary rights, in the prosecution or defense of
interferences which may be declared involving any said applications, patents,
copyrights or other proprietary rights and in any litigation in which the
Company may be involved relating to the Inventions.
14.
Notices
.
All
notices or other communications which are required or permitted hereunder shall
be in writing and shall be deemed to have been given if (a) personally delivered
or sent by telecopier, (b) sent by nationally-recognized overnight courier
or
(c) sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if
to the
Employee, to the last known address on record at the Company.
if
to the
Company, to:
Berry
Plastics Corporation
c/o
General Counsel
101
Oakley Street
Evansville,
IN 47710
or
to
such other address as the party to whom notice is to be given may have furnished
to each other party in writing in accordance herewith. Any such communication
shall be deemed to have been received (i) when delivered, if personally
delivered, sent by telecopier or sent by nationally-recognized, overnight
courier and (ii) on the third Business Day following the date on which the
piece
of mail containing such communication is posted, if sent by mail. As used
herein, the term “
Business
Day
”
means
a
day that is not a Saturday, a Sunday or a day on which banking institutions
in
the city to which the notice or communication is to be sent are not required
to
be open.
15.
Entire
Agreement; Amendments
.
This
Agreement contains the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior or contemporaneous
negotiations, correspondence, understandings and agreements between the parties
with respect thereto. This Agreement may be amended only by an agreement in
writing signed by both parties hereto.
16.
Assignment;
Successors; Benefits of Agreement
.
This
Agreement is personal in its nature and neither party hereto shall, without
the
consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder. The provisions of this Agreement shall be binding upon
and inure to the benefit of the respective heirs, beneficiaries, executors
and
administrators and successors and permitted assigns of the parties hereto.
17.
Waiver
of Breach
.
A
waiver of any breach of any provision of this Agreement shall not constitute
or
operate as a waiver of any other breach of such provision or of any other
provision, and any failure to enforce any provision hereof shall not operate
as
a waiver of such provision or of any other provision.
18.
Execution
in Counterparts
.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which shall constitute one and the same
instrument.
19.
Headings
.
The
headings of sections in this Agreement are for convenience only, are not a
part
of this Agreement and shall not affect the construction of the provisions of
this Agreement.
20.
Governing
Law
.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Indiana without giving effect to principles of
conflicts of laws.
21.
Enforceability
.
In the
event that any provision of this Agreement is determined to be partially or
wholly invalid, illegal or unenforceable in any jurisdiction, then such
provision shall, as to such jurisdiction, be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or
if
such provision cannot be modified or restricted, then such provision shall,
as
to such jurisdiction, be deemed to be excised from this Agreement;
provided
,
however
,
that
the binding effect and enforceability of the remaining provisions of this
Agreement, to the extent the economic benefits conferred upon the parties by
virtue of this Agreement remain substantially unimpaired, shall not be affected
or impaired in any manner, and
any
such
invalidity, illegality or unenforceability with respect to such provisions
shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
22.
Survival
.
Sections 11 through 22, this Section 23 and the defined terms used in any
section referred to in this Section 23, shall survive the termination of the
Employee’s employment on the Termination Date and the expiration of this
Employment Agreement on the Expiration Date.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
BERRY
PLASTICS CORPORATION
By:_____________________________________
Name:
Title:
EMPLOYEE
By: _______________________________________
Ira
G.
Boots
SCHEDULE
1
Employee
|
Ira
G. Boots
|
Position
|
President
and Chief Executive Officer
|
[Office/Headquarters]
|
101
Oakley Street
Evansville,
Indiana
|
Annual
Base Salary
|
$650,000
|
|
|
EMPLOYMENT
AGREEMENT
dated as
of September 15, 2006, between
Berry
Plastics Corporation
,
a
Delaware corporation (the “
Company
”),
and
the individual listed on Schedule 1 hereto (the “
Employee
”).
The
Employee is currently employed by the Company and possesses special and
particular knowledge of the business, products and operations of the Company
and
of the industry in which it operates. The Company and the Employee now desire
to
set forth in writing the terms of the Employee’s employment by the Company upon
the consummation of the Merger (as defined in the Agreement and Plan of Merger
(the “
Merger
Agreement
”),
dated
as of June 28, 2006, by and between BPC Holding Corporation, BPC Holding
Acquisition Corp. (“
BPC
”),
and
BPC Acquisition Corp.).
NOW,
THEREFORE, in consideration of the mutual covenants and obligations hereinafter
set forth, the parties hereto agree as follows:
1.
Employment
.
The
Company hereby employs the Employee, and the Employee hereby accepts such
employment by the Company, on the terms and subject to the conditions
hereinafter set forth.
1.
Term
.
Subject
to earlier termination as provided herein, the employment of the Employee
hereunder shall commence on and subject to the occurrence of the Closing Date
(as defined in the Merger Agreement) (the “
Effective
Date
”),
and
terminate on the December 31, 2011 (the “
Expiration
Date
”).
Such
period of employment is hereinafter referred to as the “
Employment
Period
.”
2.
Duties
.
1)
During
the Employment Period, the Employee initially shall be employed by the Company
at the position set forth on Schedule 1 hereto, and shall perform such duties
and services for the Company consistent with such position as may be from time
to time assigned to him by the persons having authority regarding such matters
at the Company.
(b)
The
Employee shall perform his duties and services hereunder at the offices of
the
Company in Evansville, Indiana, during the Employment Period;
provided
,
however
,
that
the Company may require the Employee to travel in connection with the
performance of such duties and services. Anything contained herein to the
contrary notwithstanding, if the Company requires the Employee to relocate
to a
city located outside of the 50 mile radius of Evansville, Indiana, and notifies
the Employee in writing that his continued employment by the Company is
conditional upon such relocation and the Employee refuses to so relocate, any
Termination of Employment of the Employee resulting therefrom, whether initiated
by the Company or the Employee, shall constitute a Termination Without Cause.
3.
Time
to be Devoted to Employment
.
Except
for vacations in accordance with the Company’s vacation policies and absences
due to temporary illness, during the Employment Period, the Employee shall
devote all of his business time, attention and energies to the performance
of
his duties under this Agreement. During the Employment Period, the Employee
shall not be engaged in any other business activity which, in the judgment
of
the Company,
conflicts
with the duties of the Employee under this Agreement, whether or not such
activity is pursued for gain, profit or other pecuniary advantage.
4.
Compensation;
Reimbursement
.
(a)
Base
Salary
.
During
the Employment Period, the Company shall pay to the Employee an annual base
salary as set forth in Schedule 1 hereto,
which
shall be subject to review and, at the option of persons having authority
regarding such matters at the Company, subject to increase (such salary, as
the
same may be increased from time to time as aforesaid, being referred to herein
as the “
Base
Salary
”).
The
Base Salary shall be payable in such installments (but not less frequent than
monthly) as is the policy of the Company with respect to employees of the
Company at substantially the same level of employment as the Employee.
(b)
Bonus
.
During
the Employment Period, the Employee shall be entitled to participate in all
bonus and incentive programs of the Company (the “
Programs
”)
generally available from time to time to employees of the Company at
substantially the same level of employment as the Employee, such participation
to be in substantially the same manner as the participation therein by such
employees.
(c)
Benefits
.
During
the Employment Period, the Employee shall be entitled to such benefits as are
generally made available from time to time to other employees of the Company
at
substantially the same level of employment as the Employee.
(d)
Reimbursement
of Expenses
.
During
the Employment Period, the Company shall reimburse the Employee, in accordance
with the policies and practices of the Company in effect from time to time
with
respect to other employees of the Company at substantially the same level of
employment as the Employee, for all reasonable and necessary traveling expenses
and other disbursements incurred by him for or on behalf of the Company in
connection with the performance of his duties hereunder (such expenses being
referred to herein as “
Reimbursable
Expenses
”)
upon
presentation by the Employee to the Company of appropriate documentation
therefor.
5.
Termination
of Employment
.
(a)
General
.
The
Company may terminate the Employee’s employment hereunder at any time for any
reason. The Employee may terminate his employment hereunder pursuant to a
voluntary Termination or a Disability Termination. The Employee’s employment
shall terminate automatically upon his death. Any termination of the Employee’s
employment is referred to herein as a “
Termination
of Employment
.”
(b)
Termination
Notice
.
The
Company or the Employee may initiate a Termination of Employment in any manner
permitted hereunder by giving the other party written notice thereof (the
“
Termination
Notice
”).
(c)
Termination
Date
.
The
effective date (the “
Termination
Date
”)
of any
Termination of Employment shall be deemed to be the later of (i) the date on
which the Termination Notice is given and (ii) the date specified as the
effective date in the Termination Notice;
provided
,
however
,
that in
the case of the Employee’s death, the Termination Date shall
be
his
date of death.
6.
Termination
for Cause
.
Any
Termination of Employment initiated by the Company upon the occurrence of an
event that constitutes Cause shall be a “
Termination
for Cause
.”
For
purposes of this Agreement, “
Cause
”
shall
mean the Employee’s (i) willful misconduct with respect to the business and
affairs of the Company or any subsidiary or affiliate thereof, insubordination
or willful neglect of duties (other than neglect due solely to the Employee’s
illness or other involuntary mental or physical disability), including the
Employee’s violation of any material Company policy, (ii) material breach of any
of the provisions of this Agreement or (iii) conviction for a crime involving
moral turpitude or fraud. In the event of a Termination for Cause, the
Termination Notice must state that the Termination of Employment is for
Cause.
7.
Termination
Without Cause
.
Any
Termination of Employment initiated by the Company (other than a Termination
for
Cause), the Employee’s death and a Disability Termination shall each be a
“
Termination
Without Cause
.”
8.
Death
or Disability Termination
.
Any
Termination of Employment resulting from the Employee’s Disability (as
hereinafter defined) shall be a Disability Termination. For purposes of this
Agreement, the term “
Employee’s
Disability
”
shall
mean the Employee’s illness or other involuntary physical or mental disability
which prevents the Employee from performing his duties for a period of 90 days
in any 360-day period. In the event of a Disability Termination, the Termination
Notice must state that the Termination of Employment is a Disability
Termination.
9.
Other
Termination by the Employee
.
Any
Termination of Employment initiated by the Employee (other than a Termination
of
Employment resulting from the Employee’s death or pursuant to Disability
Termination) shall be a “
Voluntary
Termination
.”
10.
Effect
of Termination of Employment
.
In the
event of a Termination of Employment, neither the Employee nor his estate or
beneficiaries shall have any further rights or claims against the Company under
this Agreement except the right to receive:
(a)
the
portion of the Base Salary which accrued with respect to the period prior to
the
Termination Date but which remained unpaid as of the Termination Date;
(b)
the
aggregate amount of Reimbursable Expenses which were incurred prior to the
Termination Date but which were not reimbursed by the Company as provided in
Section 5(d) prior to the Termination Date; and
(c)
any
other
benefits, including, without limitation, any accrued vacation payable in
accordance with the policies of the Company from time to time in effect for
the
officers of the Company; and
provided
,
however
,
that if
the Termination of Employment is pursuant to a Termination Without Cause or
a
Resignation for Good Reason (as defined in paragraph (e) below), then, in
addition to the amounts computed pursuant to Sections 11(a) through 11(c),
the
Employee shall have the right to receive as severance compensation an amount
equal to the pro-rata portion of the
applicable
bonus provided for in Section 5(b) plus the greater of (A) 100% of one year’s
Base Salary (as of the Termination Date) to be paid until the later to occur
of
(x) the second anniversary of the Effective Date and (y) the first anniversary
of the Termination Date and (B) 1/12th of one year’s Base Salary (as of the
Termination Date) for each year (not to exceed 30 years in the aggregate) that
the Employee was employed by the Company (and its predecessors-in-interest),
the
amount referred to in clause (A) or (B), as the case may be, to be payable
at
the same times at which and in the same manner in which the Base Salary would
have been payable to the Employee had the Termination of Employment not occurred
(the amount payable by the Company to the Employee pursuant to this proviso
being hereinafter referred to as the “
Severance
Compensation
”);
provided
further
,
however
,
in the
event that, at any time after the Expiration Date, there occurs a Termination
of
Employment pursuant to a Termination Without Cause, the Company shall pay the
Severance Compensation to the Employee as if the Expiration Date had not
occurred.
(d)
Upon
the
termination of the Employee’s employment by reason of “retirement” (as defined
in the Company’s Health and Welfare Plan for Early Retirees (the “
Retiree
Plan
”)),
the
Employee (and his or her eligible spouse and dependents) shall be entitled
to
receive post-retirement medical insurance coverage pursuant to the terms of
the
Retiree Plan, for which the cost of premiums shall be paid by the Employee
(or
such spouse and/or dependents). In the event that the Retiree Plan is no longer
in effect (or if otherwise necessary for tax and legal purposes), the Company
shall make available equivalent coverage to the Employee (and such spouse and/or
dependents) at substantially the same cost to the Employee (and such spouse
and/or dependents) as would have been charged under the Retiree Plan as of
the
earlier of the date the Retiree Plan is terminated and the time of the
Employee’s retirement (“
Equivalent
Retiree Coverage
”);
provided
,
however
,
that
the Company may increase the premium charged to the Employee (and such spouse
and/or dependents) based on the increase in cost, if any, to provide the Retiree
Plan that may arise after the Employee’s retirement. The Company shall take all
action necessary to ensure that the Equivalent Retiree Coverage, if any, shall
be provided other than pursuant to the terms of a self-insured medical
reimbursement plan that does not satisfy the requirements of Section 105(h)(2)
of the Internal Revenue Code of 1986, as amended.
(e)
For
purposes of this Section 11, “
Resignation
for Good Reason
”
means
the Employee’s resignation as a result of Employee’s reassignment to an office
location greater than 25 miles from the office location Employee utilized as
of
the Effective Date.
11.
Nondisclosure
of Confidential Information
.
The
Employee shall not, at any time during or after the Employment Period, (i)
disclose to any person, firm, corporation, association or other entity, except
as required by law, any Confidential Information (as hereinafter defined) for
any reason or purpose whatsoever or (ii) make use of any Confidential
Information for his own purpose or for the benefit of any other person, firm,
corporation, association or other entity except the Company or any subsidiary
or
affiliate thereof. For purposes of this Agreement, the term “
Confidential
Information
”
shall
mean any information concerning the business, clients or affairs of the Company
or any subsidiary or affiliate thereof, including, without limitation, any
technical or nontechnical data, formulae (including cost and/or pricing
formulae), devices, methods (including cost and/or pricing methods and operating
methods), techniques, processes, financial data (including marketing information
and strategies and personnel data) and lists of
actual
or
potential customers or suppliers;
provided
,
however
,
that
Confidential Information shall not include (i) information which is in the
public domain at the time of receipt thereof by the Employee, (ii) information
which, after receipt thereof by the Employee, becomes part of the public domain
through no act or omission of the Employee and (iii) information which was
lawfully within the Employee’s possession prior to the initial commencement of
the Employee’s association with the Company or any subsidiary or affiliate
thereof.
12.
Restrictive
Covenants
.
2)
The
Employee acknowledges and recognizes that during the Employment Period he will
be privy to Confidential Information and further acknowledges and recognizes
that the Company would find it extremely difficult to replace the Employee.
Accordingly, in consideration of the premises contained herein and the
consideration to be received by the Employee hereunder (including, without
limitation, the Severance Compensation), without the prior written consent
of
the Company, the Employee shall not, at any time during the employer/employee
relationship between the Company and the Employee and for the period of time
beginning with the termination of such employer/employee relationship for any
reason (including by the Employee for Good Reason and or by the Company for
Cause) and the date on which the final payment of Severance Compensation would
have been made to the Employee by the Company if such termination had been
a
Termination Without Cause, (i) directly or indirectly engage in, represent
in
any way, or be connected with, any Competing Business directly competing with
the business of the Company or any subsidiary or affiliate thereof within any
state in which the Company or any such subsidiary or affiliate transacts
business, whether such engagement shall be as an officer, director, owner,
employee, partner, affiliate or other participant in any Competing Business;
(ii) assist others in engaging in any Competing Business in the manner described
in clause (i) above; (iii) induce or solicit individuals who are, or were at
any
time in the preceding twelve months, employees of the Company or any subsidiary
or affiliate thereof to terminate their employment with the Company or any
such
subsidiary or affiliate or to engage in any Competing Business, or hire, or
induce or solicit (or assist others to hire or induce or solicit) the hiring
of,
individuals then employed, or employed at any time in the preceding twelve
months, by the Company or any subsidiary thereof; or (iv) induce any entity
or
person with which the Company or any subsidiary or any affiliate thereof has
a
business relationship to terminate or alter such business relationship. As
used
herein, “
Competing
Business
”
shall
mean any business involving the sale of products in any city or county in any
state of the United States if such business or the products sold by it are
competitive, directly or indirectly, at the time of the Termination of
Employment with (A) the business of the Company, (B) any of the products
manufactured, sold or distributed by the Company or (C) any products or business
being developed or conducted by the Company.
(b)
The
Employee understands that the foregoing restrictions may limit his ability
to
earn a livelihood in a business similar to the business of the Company or any
subsidiary or affiliate thereof, but he nevertheless believes that he has
received and will receive sufficient consideration and other benefits as an
employee of the Company and as otherwise provided hereunder to justify clearly
such restrictions which, in any event (given his education, skills and ability),
the Employee does not believe would prevent him from earning a living.
13.
Right
to Inventions
.
The
Employee shall promptly disclose, grant and assign to the Company for its sole
use and benefit any and all inventions, improvements, technical information
and
suggestions reasonably relating to the business of the Company or
any
subsidiary
or affiliate thereof (collectively, the “
Inventions
”)
which
the Employee may develop or acquire during the Employment Period (whether or
not
during usual working hours), together with all patent applications, letters
patent, copyrights and reissues thereof that may at any time be granted for
or
upon the Inventions. In connection therewith:
(a)
the
Employee recognizes and agrees that the Inventions shall be the sole property
of
the Company, and the Company shall be the sole owner of all patent applications,
letters patent, copyrights and reissues thereof that may at any time be granted
for or on the Inventions;
(b)
the
Employee hereby assigns to the Company any rights the Employee may have in
or
acquire to the Inventions;
(c)
the
Employee shall, at the expense of the company, promptly execute and deliver
such
applications, assignments, descriptions and other instruments as may be
necessary or proper in the opinion of the Company to vest title to the
Inventions and any patent applications, patents, copyrights, reissues or other
proprietary rights related thereto in the Company and to enable it to obtain
and
maintain the entire right and title thereto throughout the world;
(d)
the
Employee recognizes and agrees that the Inventions to the extent copyrightable
shall constitute works for hire under the copyright laws of the United States;
and
(e)
the
Employee shall render to the Company, at its expense, all such assistance as
it
may require in the prosecution of applications for said patents, copyrights,
reissues or other proprietary rights, in the prosecution or defense of
interferences which may be declared involving any said applications, patents,
copyrights or other proprietary rights and in any litigation in which the
Company may be involved relating to the Inventions.
14.
Notices
.
All
notices or other communications which are required or permitted hereunder shall
be in writing and shall be deemed to have been given if (a) personally delivered
or sent by telecopier, (b) sent by nationally-recognized overnight courier
or
(c) sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if
to the
Employee, to the last known address on record at the Company.
if
to the
Company, to:
Berry
Plastics Corporation
c/o
General Counsel
101
Oakley Street
Evansville,
IN 47710
or
to
such other address as the party to whom notice is to be given may have furnished
to each other party in writing in accordance herewith. Any such communication
shall be deemed to have been received (i) when delivered, if personally
delivered, sent by telecopier or sent by nationally-recognized, overnight
courier and (ii) on the third Business Day following the date on which the
piece
of mail containing such communication is posted, if sent by mail. As used
herein, the term “
Business
Day
”
means
a
day that is not a Saturday, a Sunday or a day on which banking institutions
in
the city to which the notice or communication is to be sent are not required
to
be open.
15.
Entire
Agreement; Amendments
.
This
Agreement contains the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior or contemporaneous
negotiations, correspondence, understandings and agreements between the parties
with respect thereto. This Agreement may be amended only by an agreement in
writing signed by both parties hereto.
16.
Assignment;
Successors; Benefits of Agreement
.
This
Agreement is personal in its nature and neither party hereto shall, without
the
consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder. The provisions of this Agreement shall be binding upon
and inure to the benefit of the respective heirs, beneficiaries, executors
and
administrators and successors and permitted assigns of the parties hereto.
17.
Waiver
of Breach
.
A
waiver of any breach of any provision of this Agreement shall not constitute
or
operate as a waiver of any other breach of such provision or of any other
provision, and any failure to enforce any provision hereof shall not operate
as
a waiver of such provision or of any other provision.
18.
Execution
in Counterparts
.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which shall constitute one and the same
instrument.
19.
Headings
.
The
headings of sections in this Agreement are for convenience only, are not a
part
of this Agreement and shall not affect the construction of the provisions of
this Agreement.
20.
Governing
Law
.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Indiana without giving effect to principles of
conflicts of laws.
21.
Enforceability
.
In the
event that any provision of this Agreement is determined to be partially or
wholly invalid, illegal or unenforceable in any jurisdiction, then such
provision shall, as to such jurisdiction, be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or
if
such provision cannot be modified or restricted, then such provision shall,
as
to such jurisdiction, be deemed to be excised from this Agreement;
provided
,
however
,
that
the binding effect and enforceability of the remaining provisions of this
Agreement, to the extent the economic benefits conferred upon the parties by
virtue of this Agreement remain substantially unimpaired, shall not be affected
or impaired in any manner, and
any
such
invalidity, illegality or unenforceability with respect to such provisions
shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
22.
Survival
.
Sections 11 through 22, this Section 23 and the defined terms used in any
section referred to in this Section 23, shall survive the termination of the
Employee’s employment on the Termination Date and the expiration of this
Employment Agreement on the Expiration Date.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
BERRY
PLASTICS CORPORATION
By:____________________________________
Name:
Title:
EMPLOYEE
By:_____________________________________
James
M.
Kratochvil
SCHEDULE
1
Employee
|
James
M. Kratochvil
|
Position
|
Executive
Vice President & Chief Financial Officer
|
[Office/Headquarters]
|
101
Oakley Street
Evansville,
Indiana
|
Annual
Base Salary
|
$350,000
|
EMPLOYMENT
AGREEMENT
dated as
of September 15, 2006, between
Berry
Plastics Corporation
,
a
Delaware corporation (the “
Company
”),
and
the individual listed on Schedule 1 hereto (the “
Employee
”).
The
Employee is currently employed by the Company and possesses special and
particular knowledge of the business, products and operations of the Company
and
of the industry in which it operates. The Company and the Employee now desire
to
set forth in writing the terms of the Employee’s employment by the Company upon
the consummation of the Merger (as defined in the Agreement and Plan of Merger
(the “
Merger
Agreement
”),
dated
as of June 28, 2006, by and between BPC Holding Corporation, BPC Holding
Acquisition Corp. (“
BPC
”),
and
BPC Acquisition Corp.).
NOW,
THEREFORE, in consideration of the mutual covenants and obligations hereinafter
set forth, the parties hereto agree as follows:
1.
Employment
.
The
Company hereby employs the Employee, and the Employee hereby accepts such
employment by the Company, on the terms and subject to the conditions
hereinafter set forth.
1.
Term
.
Subject
to earlier termination as provided herein, the employment of the Employee
hereunder shall commence on and subject to the occurrence of the Closing Date
(as defined in the Merger Agreement) (the “
Effective
Date
”),
and
terminate on the December 31, 2011 (the “
Expiration
Date
”).
Such
period of employment is hereinafter referred to as the “
Employment
Period
.”
2.
Duties
.
1)
During
the Employment Period, the Employee initially shall be employed by the Company
at the position set forth on Schedule 1 hereto, and shall perform such duties
and services for the Company consistent with such position as may be from time
to time assigned to him by the persons having authority regarding such matters
at the Company.
(b)
The
Employee shall perform his duties and services hereunder at the offices of
the
Company in Evansville, Indiana, during the Employment Period;
provided
,
however
,
that
the Company may require the Employee to travel in connection with the
performance of such duties and services. Anything contained herein to the
contrary notwithstanding, if the Company requires the Employee to relocate
to a
city located outside of the 50 mile radius of Evansville, Indiana, and notifies
the Employee in writing that his continued employment by the Company is
conditional upon such relocation and the Employee refuses to so relocate, any
Termination of Employment of the Employee resulting therefrom, whether initiated
by the Company or the Employee, shall constitute a Termination Without Cause.
3.
Time
to be Devoted to Employment
.
Except
for vacations in accordance with the Company’s vacation policies and absences
due to temporary illness, during the Employment Period, the Employee shall
devote all of his business time, attention and energies to the performance
of
his duties under this Agreement. During the Employment Period, the Employee
shall not be engaged in any other business activity which, in the judgment
of
the Company,
conflicts
with the duties of the Employee under this Agreement, whether or not such
activity is pursued for gain, profit or other pecuniary advantage.
4.
Compensation;
Reimbursement
.
(a)
Base
Salary
.
During
the Employment Period, the Company shall pay to the Employee an annual base
salary as set forth in Schedule 1 hereto,
which
shall be subject to review and, at the option of persons having authority
regarding such matters at the Company, subject to increase (such salary, as
the
same may be increased from time to time as aforesaid, being referred to herein
as the “
Base
Salary
”).
The
Base Salary shall be payable in such installments (but not less frequent than
monthly) as is the policy of the Company with respect to employees of the
Company at substantially the same level of employment as the Employee.
(b)
Bonus
.
During
the Employment Period, the Employee shall be entitled to participate in all
bonus and incentive programs of the Company (the “
Programs
”)
generally available from time to time to employees of the Company at
substantially the same level of employment as the Employee, such participation
to be in substantially the same manner as the participation therein by such
employees.
(c)
Benefits
.
During
the Employment Period, the Employee shall be entitled to such benefits as are
generally made available from time to time to other employees of the Company
at
substantially the same level of employment as the Employee.
(d)
Reimbursement
of Expenses
.
During
the Employment Period, the Company shall reimburse the Employee, in accordance
with the policies and practices of the Company in effect from time to time
with
respect to other employees of the Company at substantially the same level of
employment as the Employee, for all reasonable and necessary traveling expenses
and other disbursements incurred by him for or on behalf of the Company in
connection with the performance of his duties hereunder (such expenses being
referred to herein as “
Reimbursable
Expenses
”)
upon
presentation by the Employee to the Company of appropriate documentation
therefor.
5.
Termination
of Employment
.
(a)
General
.
The
Company may terminate the Employee’s employment hereunder at any time for any
reason. The Employee may terminate his employment hereunder pursuant to a
voluntary Termination or a Disability Termination. The Employee’s employment
shall terminate automatically upon his death. Any termination of the Employee’s
employment is referred to herein as a “
Termination
of Employment
.”
(b)
Termination
Notice
.
The
Company or the Employee may initiate a Termination of Employment in any manner
permitted hereunder by giving the other party written notice thereof (the
“
Termination
Notice
”).
(c)
Termination
Date
.
The
effective date (the “
Termination
Date
”)
of any
Termination of Employment shall be deemed to be the later of (i) the date on
which the Termination Notice is given and (ii) the date specified as the
effective date in the Termination Notice;
provided
,
however
,
that in
the case of the Employee’s death, the Termination Date shall
be
his
date of death.
6.
Termination
for Cause
.
Any
Termination of Employment initiated by the Company upon the occurrence of an
event that constitutes Cause shall be a “
Termination
for Cause
.”
For
purposes of this Agreement, “
Cause
”
shall
mean the Employee’s (i) willful misconduct with respect to the business and
affairs of the Company or any subsidiary or affiliate thereof, insubordination
or willful neglect of duties (other than neglect due solely to the Employee’s
illness or other involuntary mental or physical disability), including the
Employee’s violation of any material Company policy, (ii) material breach of any
of the provisions of this Agreement or (iii) conviction for a crime involving
moral turpitude or fraud. In the event of a Termination for Cause, the
Termination Notice must state that the Termination of Employment is for
Cause.
7.
Termination
Without Cause
.
Any
Termination of Employment initiated by the Company (other than a Termination
for
Cause), the Employee’s death and a Disability Termination shall each be a
“
Termination
Without Cause
.”
8.
Death
or Disability Termination
.
Any
Termination of Employment resulting from the Employee’s Disability (as
hereinafter defined) shall be a Disability Termination. For purposes of this
Agreement, the term “
Employee’s
Disability
”
shall
mean the Employee’s illness or other involuntary physical or mental disability
which prevents the Employee from performing his duties for a period of 90 days
in any 360-day period. In the event of a Disability Termination, the Termination
Notice must state that the Termination of Employment is a Disability
Termination.
9.
Other
Termination by the Employee
.
Any
Termination of Employment initiated by the Employee (other than a Termination
of
Employment resulting from the Employee’s death or pursuant to Disability
Termination) shall be a “
Voluntary
Termination
.”
10.
Effect
of Termination of Employment
.
In the
event of a Termination of Employment, neither the Employee nor his estate or
beneficiaries shall have any further rights or claims against the Company under
this Agreement except the right to receive:
(a)
the
portion of the Base Salary which accrued with respect to the period prior to
the
Termination Date but which remained unpaid as of the Termination Date;
(b)
the
aggregate amount of Reimbursable Expenses which were incurred prior to the
Termination Date but which were not reimbursed by the Company as provided in
Section 5(d) prior to the Termination Date; and
(c)
any
other
benefits, including, without limitation, any accrued vacation payable in
accordance with the policies of the Company from time to time in effect for
the
officers of the Company; and
provided
,
however
,
that if
the Termination of Employment is pursuant to a Termination Without Cause or
a
Resignation for Good Reason (as defined in paragraph (e) below), then, in
addition to the amounts computed pursuant to Sections 11(a) through 11(c),
the
Employee shall have the right to receive as severance compensation an amount
equal to the pro-rata portion of the
applicable
bonus provided for in Section 5(b) plus the greater of (A) 100% of one year’s
Base Salary (as of the Termination Date) to be paid until the later to occur
of
(x) the second anniversary of the Effective Date and (y) the first anniversary
of the Termination Date and (B) 1/12th of one year’s Base Salary (as of the
Termination Date) for each year (not to exceed 30 years in the aggregate) that
the Employee was employed by the Company (and its predecessors-in-interest),
the
amount referred to in clause (A) or (B), as the case may be, to be payable
at
the same times at which and in the same manner in which the Base Salary would
have been payable to the Employee had the Termination of Employment not occurred
(the amount payable by the Company to the Employee pursuant to this proviso
being hereinafter referred to as the “
Severance
Compensation
”);
provided
further
,
however
,
in the
event that, at any time after the Expiration Date, there occurs a Termination
of
Employment pursuant to a Termination Without Cause, the Company shall pay the
Severance Compensation to the Employee as if the Expiration Date had not
occurred.
(d)
Upon
the
termination of the Employee’s employment by reason of “retirement” (as defined
in the Company’s Health and Welfare Plan for Early Retirees (the “
Retiree
Plan
”)),
the
Employee (and his or her eligible spouse and dependents) shall be entitled
to
receive post-retirement medical insurance coverage pursuant to the terms of
the
Retiree Plan, for which the cost of premiums shall be paid by the Employee
(or
such spouse and/or dependents). In the event that the Retiree Plan is no longer
in effect (or if otherwise necessary for tax and legal purposes), the Company
shall make available equivalent coverage to the Employee (and such spouse and/or
dependents) at substantially the same cost to the Employee (and such spouse
and/or dependents) as would have been charged under the Retiree Plan as of
the
earlier of the date the Retiree Plan is terminated and the time of the
Employee’s retirement (“
Equivalent
Retiree Coverage
”);
provided
,
however
,
that
the Company may increase the premium charged to the Employee (and such spouse
and/or dependents) based on the increase in cost, if any, to provide the Retiree
Plan that may arise after the Employee’s retirement. The Company shall take all
action necessary to ensure that the Equivalent Retiree Coverage, if any, shall
be provided other than pursuant to the terms of a self-insured medical
reimbursement plan that does not satisfy the requirements of Section 105(h)(2)
of the Internal Revenue Code of 1986, as amended.
(e)
For
purposes of this Section 11, “
Resignation
for Good Reason
”
means
the Employee’s resignation as a result of Employee’s reassignment to an office
location greater than 25 miles from the office location Employee utilized as
of
the Effective Date.
11.
Nondisclosure
of Confidential Information
.
The
Employee shall not, at any time during or after the Employment Period, (i)
disclose to any person, firm, corporation, association or other entity, except
as required by law, any Confidential Information (as hereinafter defined) for
any reason or purpose whatsoever or (ii) make use of any Confidential
Information for his own purpose or for the benefit of any other person, firm,
corporation, association or other entity except the Company or any subsidiary
or
affiliate thereof. For purposes of this Agreement, the term “
Confidential
Information
”
shall
mean any information concerning the business, clients or affairs of the Company
or any subsidiary or affiliate thereof, including, without limitation, any
technical or nontechnical data, formulae (including cost and/or pricing
formulae), devices, methods (including cost and/or pricing methods and operating
methods), techniques, processes, financial data (including marketing information
and strategies and personnel data) and lists of
actual
or
potential customers or suppliers;
provided
,
however
,
that
Confidential Information shall not include (i) information which is in the
public domain at the time of receipt thereof by the Employee, (ii) information
which, after receipt thereof by the Employee, becomes part of the public domain
through no act or omission of the Employee and (iii) information which was
lawfully within the Employee’s possession prior to the initial commencement of
the Employee’s association with the Company or any subsidiary or affiliate
thereof.
12.
Restrictive
Covenants
.
2)
The
Employee acknowledges and recognizes that during the Employment Period he will
be privy to Confidential Information and further acknowledges and recognizes
that the Company would find it extremely difficult to replace the Employee.
Accordingly, in consideration of the premises contained herein and the
consideration to be received by the Employee hereunder (including, without
limitation, the Severance Compensation), without the prior written consent
of
the Company, the Employee shall not, at any time during the employer/employee
relationship between the Company and the Employee and for the period of time
beginning with the termination of such employer/employee relationship for any
reason (including by the Employee for Good Reason and or by the Company for
Cause) and the date on which the final payment of Severance Compensation would
have been made to the Employee by the Company if such termination had been
a
Termination Without Cause, (i) directly or indirectly engage in, represent
in
any way, or be connected with, any Competing Business directly competing with
the business of the Company or any subsidiary or affiliate thereof within any
state in which the Company or any such subsidiary or affiliate transacts
business, whether such engagement shall be as an officer, director, owner,
employee, partner, affiliate or other participant in any Competing Business;
(ii) assist others in engaging in any Competing Business in the manner described
in clause (i) above; (iii) induce or solicit individuals who are, or were at
any
time in the preceding twelve months, employees of the Company or any subsidiary
or affiliate thereof to terminate their employment with the Company or any
such
subsidiary or affiliate or to engage in any Competing Business, or hire, or
induce or solicit (or assist others to hire or induce or solicit) the hiring
of,
individuals then employed, or employed at any time in the preceding twelve
months, by the Company or any subsidiary thereof; or (iv) induce any entity
or
person with which the Company or any subsidiary or any affiliate thereof has
a
business relationship to terminate or alter such business relationship. As
used
herein, “
Competing
Business
”
shall
mean any business involving the sale of products in any city or county in any
state of the United States if such business or the products sold by it are
competitive, directly or indirectly, at the time of the Termination of
Employment with (A) the business of the Company, (B) any of the products
manufactured, sold or distributed by the Company or (C) any products or business
being developed or conducted by the Company.
(b)
The
Employee understands that the foregoing restrictions may limit his ability
to
earn a livelihood in a business similar to the business of the Company or any
subsidiary or affiliate thereof, but he nevertheless believes that he has
received and will receive sufficient consideration and other benefits as an
employee of the Company and as otherwise provided hereunder to justify clearly
such restrictions which, in any event (given his education, skills and ability),
the Employee does not believe would prevent him from earning a living.
13.
Right
to Inventions
.
The
Employee shall promptly disclose, grant and assign to the Company for its sole
use and benefit any and all inventions, improvements, technical information
and
suggestions reasonably relating to the business of the Company or
any
subsidiary
or affiliate thereof (collectively, the “
Inventions
”)
which
the Employee may develop or acquire during the Employment Period (whether or
not
during usual working hours), together with all patent applications, letters
patent, copyrights and reissues thereof that may at any time be granted for
or
upon the Inventions. In connection therewith:
(a)
the
Employee recognizes and agrees that the Inventions shall be the sole property
of
the Company, and the Company shall be the sole owner of all patent applications,
letters patent, copyrights and reissues thereof that may at any time be granted
for or on the Inventions;
(b)
the
Employee hereby assigns to the Company any rights the Employee may have in
or
acquire to the Inventions;
(c)
the
Employee shall, at the expense of the company, promptly execute and deliver
such
applications, assignments, descriptions and other instruments as may be
necessary or proper in the opinion of the Company to vest title to the
Inventions and any patent applications, patents, copyrights, reissues or other
proprietary rights related thereto in the Company and to enable it to obtain
and
maintain the entire right and title thereto throughout the world;
(d)
the
Employee recognizes and agrees that the Inventions to the extent copyrightable
shall constitute works for hire under the copyright laws of the United States;
and
(e)
the
Employee shall render to the Company, at its expense, all such assistance as
it
may require in the prosecution of applications for said patents, copyrights,
reissues or other proprietary rights, in the prosecution or defense of
interferences which may be declared involving any said applications, patents,
copyrights or other proprietary rights and in any litigation in which the
Company may be involved relating to the Inventions.
14.
Notices
.
All
notices or other communications which are required or permitted hereunder shall
be in writing and shall be deemed to have been given if (a) personally delivered
or sent by telecopier, (b) sent by nationally-recognized overnight courier
or
(c) sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if
to the
Employee, to the last known address on record at the Company.
if
to the
Company, to:
Berry
Plastics Corporation
c/o
General Counsel
101
Oakley Street
Evansville,
IN 47710
or
to
such other address as the party to whom notice is to be given may have furnished
to each other party in writing in accordance herewith. Any such communication
shall be deemed to have been received (i) when delivered, if personally
delivered, sent by telecopier or sent by nationally-recognized, overnight
courier and (ii) on the third Business Day following the date on which the
piece
of mail containing such communication is posted, if sent by mail. As used
herein, the term “
Business
Day
”
means
a
day that is not a Saturday, a Sunday or a day on which banking institutions
in
the city to which the notice or communication is to be sent are not required
to
be open.
15.
Entire
Agreement; Amendments
.
This
Agreement contains the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior or contemporaneous
negotiations, correspondence, understandings and agreements between the parties
with respect thereto. This Agreement may be amended only by an agreement in
writing signed by both parties hereto.
16.
Assignment;
Successors; Benefits of Agreement
.
This
Agreement is personal in its nature and neither party hereto shall, without
the
consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder. The provisions of this Agreement shall be binding upon
and inure to the benefit of the respective heirs, beneficiaries, executors
and
administrators and successors and permitted assigns of the parties hereto.
17.
Waiver
of Breach
.
A
waiver of any breach of any provision of this Agreement shall not constitute
or
operate as a waiver of any other breach of such provision or of any other
provision, and any failure to enforce any provision hereof shall not operate
as
a waiver of such provision or of any other provision.
18.
Execution
in Counterparts
.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which shall constitute one and the same
instrument.
19.
Headings
.
The
headings of sections in this Agreement are for convenience only, are not a
part
of this Agreement and shall not affect the construction of the provisions of
this Agreement.
20.
Governing
Law
.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Indiana without giving effect to principles of
conflicts of laws.
21.
Enforceability
.
In the
event that any provision of this Agreement is determined to be partially or
wholly invalid, illegal or unenforceable in any jurisdiction, then such
provision shall, as to such jurisdiction, be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or
if
such provision cannot be modified or restricted, then such provision shall,
as
to such jurisdiction, be deemed to be excised from this Agreement;
provided
,
however
,
that
the binding effect and enforceability of the remaining provisions of this
Agreement, to the extent the economic benefits conferred upon the parties by
virtue of this Agreement remain substantially unimpaired, shall not be affected
or impaired in any manner, and
any
such
invalidity, illegality or unenforceability with respect to such provisions
shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
22.
Survival
.
Sections 11 through 22, this Section 23 and the defined terms used in any
section referred to in this Section 23, shall survive the termination of the
Employee’s employment on the Termination Date and the expiration of this
Employment Agreement on the Expiration Date.
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
BERRY
PLASTICS CORPORATION
By:____________________________________
Name:
Title:
EMPLOYEE
By:____________________________________
R
.
Brent
Beeler
SCHEDULE
1
Employee
|
R.
Brent Beeler
|
Position
|
Chief
Operating Officer
|
[Office/Headquarters]
|
101
Oakley Street
Evansville,
Indiana
|
Annual
Base Salary
|
$550,000
|
AMENDMENT
TO EMPLOYMENT AGREEMENT
dated
as
of September 13, 2006, between B
erry
Plastics Corporation
,
a
Delaware corporation (the “Corporation”), and
GLENN
ADAM UNFRIED
(the
“Employee”).
WHEREAS,
the Employee has entered into an employment agreement with the Corporation,
dated as of
S
eptember
15, 2006
(the
“Employment Agreement”);
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto do hereby agree
to
amend the Employment Agreement, effective as of as of and subject to the
occurrence of the Closing Date (as defined in the Agreement and Plan of Merger
(the “Merger Agreement”), dated as of June 28, 2006, by and between BPC Holding
Corporation, BPC Holding Acquisition Corp. and BPC Acquisition Corp.), as
follows (the “Amendment”):
1.
Term
.
Section
1 of the Employment Agreement is hereby deleted in its entirety and replaced
with the following text:
“Subject
to earlier termination as provided herein, the employment of the Employee
hereunder shall commence on the September 20, 2006 and terminate on
December 31, 2011. Such period of employment is hereinafter referred to as
the
"Employment Period.”
2.
Retiree
Plan
.
A new
Section 8(c) is hereby inserted in the Employment Agreement and shall read
as
follows:
“Upon
the
termination of the Employee’s employment by reason of “retirement” (as defined
in the Corporation’s Health and Welfare Plan for Early Retirees (the
“
Retiree
Plan
”)),
the
Employee (and his or her eligible spouse and dependents) shall be entitled
to
receive post-retirement medical insurance coverage pursuant to the terms of
the
Retiree Plan, for which the cost of premiums shall be paid by the Employee
(or
such spouse and/or dependents). In the event that the Retiree Plan is no longer
in effect (or if otherwise necessary for tax and legal purposes), the
Corporation shall make available equivalent coverage to the Employee (and such
spouse and/or dependents) at substantially the same cost to the Employee (and
such spouse and/or dependents) as would have been charged under the Retiree
Plan
as of the earlier of the date the Retiree Plan is terminated and the time of
the
Employee’s retirement (“
Equivalent
Retiree Coverage
”);
provided
,
however
,
that
the Corporation may increase the premium charged to the Employee (and such
spouse and/or dependents) based on the increase in cost, if any, to provide
the
Retiree Plan that may arise after the Employee’s retirement. The Corporation
shall take all action necessary to ensure that the Equivalent Retiree Coverage,
if any, shall be provided other than pursuant to the terms of a self-insured
medical
reimbursement
plan that does not satisfy the requirements of Section 105(h)(2) of the Internal
Revenue Code of 1986, as amended.”
3.
Former
Section 8(c) of the Employment Agreement shall be re-numbered 8(d).
4.
Restrictive
Covenants
.
Clause
(iii) of Section 10(a) of the Employment Agreement is hereby deleted in its
entirety and replaced with the following text:
“(iii)
induce or solicit individuals who are, or were at any time in the preceding
twelve months, employees of the Corporation or any direct or indirect subsidiary
or affiliate thereof to terminate their employment with the Corporation or
any
such direct or indirect subsidiary or affiliate or to engage in any Competing
Business, or hire, or induce or solicit (or assist others to hire or induce
or
solicit) the hiring of, individuals then employed, or employed at any time
in
the preceding twelve months, by the Corporation or any subsidiary thereof,
or”
5.
Counterparts
.
This
Amendment may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
IN
WITNESS WHEREOF, the Corporation has caused this Amendment to be duly executed
by its officer thereunder duly authorized and the Employee has hereunto set
his
hand, all as of the day and year first set forth above.
BERRY
PLASTICS CORPORATION
_____________________________________
Name:
Marcia
C.
Jochem
Title:
Executive
Vice President of Human
Resources
ACCEPTED:
The
undersigned hereby acknowledges having read this Amendment and, having had
the
opportunity to consult with legal and tax advisors, hereby agrees to be bound
by
all provisions set forth herein.
______________________________________
Glenn
Adam
Unfried
AMENDMENT
TO EMPLOYMENT AGREEMENT
dated
as
of September 13, 2006, between B
erry
Plastics Corporation
,
a
Delaware corporation (the “Corporation”), and
RANDALL
J. HOBSON
(the
“Employee”).
WHEREAS,
the Employee has entered into an employment agreement with the Corporation,
dated as of
S
eptember
15, 2006
(the
“Employment Agreement”);
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto do hereby agree
to
amend the Employment Agreement, effective as of as of and subject to the
occurrence of the Closing Date (as defined in the Agreement and Plan of Merger
(the “Merger Agreement”), dated as of June 28, 2006, by and between BPC Holding
Corporation, BPC Holding Acquisition Corp. and BPC Acquisition Corp.), as
follows (the “Amendment”):
1.
Term
.
Section
1 of the Employment Agreement is hereby deleted in its entirety and replaced
with the following text:
“Subject
to earlier termination as provided herein, the employment of the Employee
hereunder shall commence on the September 20, 2006 and terminate on
December 31, 2011. Such period of employment is hereinafter referred to as
the
"Employment Period.”
2.
Retiree
Plan
.
A new
Section 8(c) is hereby inserted in the Employment Agreement and shall read
as
follows:
“Upon
the
termination of the Employee’s employment by reason of “retirement” (as defined
in the Corporation’s Health and Welfare Plan for Early Retirees (the
“
Retiree
Plan
”)),
the
Employee (and his or her eligible spouse and dependents) shall be entitled
to
receive post-retirement medical insurance coverage pursuant to the terms of
the
Retiree Plan, for which the cost of premiums shall be paid by the Employee
(or
such spouse and/or dependents). In the event that the Retiree Plan is no longer
in effect (or if otherwise necessary for tax and legal purposes), the
Corporation shall make available equivalent coverage to the Employee (and such
spouse and/or dependents) at substantially the same cost to the Employee (and
such spouse and/or dependents) as would have been charged under the Retiree
Plan
as of the earlier of the date the Retiree Plan is terminated and the time of
the
Employee’s retirement (“
Equivalent
Retiree Coverage
”);
provided
,
however
,
that
the Corporation may increase the premium charged to the Employee (and such
spouse and/or dependents) based on the increase in cost, if any, to provide
the
Retiree Plan that may arise after the Employee’s retirement. The Corporation
shall take all action necessary to ensure that the Equivalent Retiree Coverage,
if any, shall be provided other than pursuant to the terms of a self-insured
medical
reimbursement
plan that does not satisfy the requirements of Section 105(h)(2) of the Internal
Revenue Code of 1986, as amended.”
3.
Former
Section 8(c) of the Employment Agreement shall be re-numbered 8(d).
4.
Restrictive
Covenants
.
Clause
(iii) of Section 10(a) of the Employment Agreement is hereby deleted in its
entirety and replaced with the following text:
“(iii)
induce or solicit individuals who are, or were at any time in the preceding
twelve months, employees of the Corporation or any direct or indirect subsidiary
or affiliate thereof to terminate their employment with the Corporation or
any
such direct or indirect subsidiary or affiliate or to engage in any Competing
Business, or hire, or induce or solicit (or assist others to hire or induce
or
solicit) the hiring of, individuals then employed, or employed at any time
in
the preceding twelve months, by the Corporation or any subsidiary thereof,
or”
5.
Counterparts
.
This
Amendment may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
IN
WITNESS WHEREOF, the Corporation has caused this Amendment to be duly executed
by its officer thereunder duly authorized and the Employee has hereunto set
his
hand, all as of the day and year first set forth above.
BERRY
PLASTICS CORPORATION
_________________________________________
Name:
Marcia
C.
Jochem
Title:
Executive
Vice President of Human
Resources
ACCEPTED:
The
undersigned hereby
acknowledges having read this Amendment and, having had the opportunity to
consult with legal and tax advisors, hereby agrees to be bound by all provisions
set forth herein.
_________________________________________
Randall
J.
Hobson
Earnings
to Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ex
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
ytd
|
|
Q2
ytd
|
|
PF
Fiscal
|
|
PF
Q2 ytd
|
|
PF
Q2 ytd
|
|
|
|
2003
|
|
2004
|
|
2005
|
|
2005
|
|
2006
|
|
2005
|
|
2005
|
|
2006
|
|
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before taxes
|
|
|
25,534
|
|
|
40,691
|
|
|
34,116
|
|
|
11,724
|
|
|
32,643
|
|
|
-55,187
|
|
|
-35,184
|
|
|
-8,599
|
|
Interest
|
|
|
45,413
|
|
|
53,185
|
|
|
73,274
|
|
|
30,123
|
|
|
44,511
|
|
|
167,861
|
|
|
83,815
|
|
|
84,114
|
|
Interest
portion of rental expense
|
|
|
3,739
|
|
|
4,960
|
|
|
7,737
|
|
|
2,207
|
|
|
3,068
|
|
|
7,737
|
|
|
2,207
|
|
|
3,068
|
|
|
|
|
74,686
|
|
|
98,836
|
|
|
115,127
|
|
|
44,054
|
|
|
80,222
|
|
|
120,411
|
|
|
50,838
|
|
|
78,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
45,413
|
|
|
53,185
|
|
|
73,274
|
|
|
30,123
|
|
|
44,511
|
|
|
167,861
|
|
|
83,815
|
|
|
84,114
|
|
Interest
capitalized
|
|
|
-860
|
|
|
-1,120
|
|
|
-1,230
|
|
|
-487
|
|
|
-1,134
|
|
|
-1,230
|
|
|
-487
|
|
|
-1,134
|
|
Interest
portion of rental expense
|
|
|
3,739
|
|
|
4,960
|
|
|
7,737
|
|
|
2,207
|
|
|
3,068
|
|
|
7,737
|
|
|
2,207
|
|
|
3,068
|
|
|
|
|
48,292
|
|
|
57,025
|
|
|
79,781
|
|
|
31,843
|
|
|
46,445
|
|
|
174,368
|
|
|
85,535
|
|
|
86,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio
|
|
|
1.5
|
|
|
1.7
|
|
|
1.4
|
|
|
1.4
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shortfall
(overage)
|
|
|
-26,394
|
|
|
-41,811
|
|
|
-35,346
|
|
|
-12,211
|
|
|
-33,777
|
|
|
53,957
|
|
|
34,697
|
|
|
7,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
21.1
List
of
Subsidiaries of Berry Plastics Holding Corporation
Berry
Plastics Corporation
Berry
Iowa Corporation (DE)
Packerware
Corporation (DE)
Knight
Plastics, Inc. (DE)
Berry
Sterling Corporation (DE)
Berry
Plastics Design Corporation (DE)
Poly-Seal
Corporation (DE)
Venture
Packaging, Inc. (DE)
Venture
Packaging Midwest, Inc. (DE)
Berry
Plastics Technical Services, Inc. (DE)
CPI
Holding Corporation (DE)
Cardinal
Packaging, Inc. (OH)
AeroCon,
Inc. (DE)
Pescor,
Inc. (DE)
Landis
Plastics, Inc. (IL)
Berry
Plastics Acquisition Corporation II (DE)
Berry
Plastics Acquisition Corporation III (DE)
Berry
Plastics Acquisition Corporation V (DE)
Berry
Plastics Acquisition Corporation VII (DE)
Berry
Plastics Acquisition Corporation VIII (DE)
Berry
Plastics Acquisition Corporation IX (DE)
Berry
Plastics Acquisition Corporation X (DE)
Berry
Plastics Acquisition Corporation XI (DE)
Berry
Plastics Acquisition Corporation XII (DE)
Berry
Plastics Acquisition Corporation XIII (DE)
Berry
Plastics Acquisition Corporation XIV, LLC (DE)
Berry
Plastics Acquisition Corporation XV, LLC (DE)
NIM
Holdings Limited (E&W)
Berry
Plastics U.K. Limited (E&W)
Norwich
Acquisition Limited (E&W)
Capsol
Berry Plastics S.p.A. (Italy)
Ociesse
S.r.l. (Italy)
Berry
Plastics Asia Pte. Ltd (Singapore)
Kerr
Group, Inc. (DE)
Saffron
Acquisition Corporation (DE)
Sun
Coast
Industries, Inc. (DE)
Setco,
LLC (DE)
Tubed
Products, LLC (DE)
Berry
Plastics de Mexico, S. de R.L. de C.V. (Mexico)
Grupo
Servicios Berpla, S. de R.L. de C.V. (Mexico)
Consent
of Independent Registered Public Accounting Firm
We
consent to the reference to our firm under the captions “
Summary
Historical and Unaudited Pro Forma Financial Data”
and
“Experts” and to the use of our report dated February 17, 2006, with respect to
BPC Holding Corporation in the Registration Statement (Form S-4) and related
Prospectus of Berry Plastics Holding Corporation for the registration of $750
million of Senior Secured Notes due 2014.
/s/
Ernst
& Young LLP
Indianapolis,
Indiana
October
30, 2006
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)
WELLS
FARGO BANK, NATIONAL ASSOCIATION
(Exact
name of trustee as specified in its charter)
A
National Banking Association
94-1347393
(Jurisdiction
of incorporation or
(I.R.S.
Employer
organization
if not a U.S. national
Identification
No.)
bank)
101
North Phillips Avenue
Sioux
Falls, South Dakota
57104
(Address
of principal executive offices)
(Zip
code)
Wells
Fargo & Company
Law
Department, Trust Section
MAC
N9305-175
Sixth
Street and Marquette Avenue, 17
th
Floor
Minneapolis,
Minnesota 55479
(612)
667-4608
(Name,
address and telephone number of agent for service)
_____________________________
BERRY
PLASTICS HOLDING CORPORATION
1
(Exact
name of obligor as specified in its charter)
Delaware
35-1814673
(State
or
other jurisdiction of
(I.R.S.
Employer
incorporation
or organization)
Identification
No.)
101
Oakley Street
Evansville,
Indiana 47710
(Address
of principal executive offices)
_____________________________
8
7/8% Second Priority Senior Secured Fixed Rate Notes due
2014
Second
Priority Senior Secured Floating Rate Notes due 2014
(Title
of the indenture securities)
1
See
Table 1 - List of additional obligors
Table
1
|
Guarantor
|
State
of Incorporation
|
Federal
EIN
|
1.
|
Berry
Plastics Corporation
|
Delaware
|
35-1813708
|
2.
|
Aerocon,
Inc.
|
Delaware
|
35-1948748
|
3.
|
Berry
Iowa Corporation
|
Delaware
|
42-1382173
|
4.
|
Berry
Plastics Design Corporation
|
Delaware
|
62-1689708
|
5.
|
Berry
Plastics Technical Services, Inc.
|
Delaware
|
57-1028638
|
6.
|
Berry
Sterling Corporation
|
Delaware
|
54-1749681
|
7.
|
CPI
Holding Corporation
|
Delaware
|
34-1820303
|
8.
|
Knight
Plastics, Inc.
|
Delaware
|
35-2056610
|
9.
|
Packerware
Corporation
|
Delaware
|
48-0759852
|
10.
|
Pescor,
Inc.
|
Delaware
|
74-3002028
|
11.
|
Poly-Seal
Corporation
|
Delaware
|
52-0892112
|
12.
|
Venture
Packaging, Inc.
|
Delaware
|
51-0368479
|
13.
|
Venture
Packaging Midwest, Inc.
|
Delaware
|
34-1809003
|
14.
|
Berry
Plastics Acquisition Corporation III
|
Delaware
|
37-1445502
|
15.
|
Berry
Plastics Acquisition Corporation V
|
Delaware
|
36-4509933
|
16.
|
Berry
Plastics Acquisition Corporation VII
|
Delaware
|
30-0120989
|
17.
|
Berry
Plastics Acquisition Corporation VIII
|
Delaware
|
32-0036809
|
18.
|
Berry
Plastics Acquisition Corporation IX
|
Delaware
|
35-2184302
|
19.
|
Berry
Plastics Acquisition Corporation X
|
Delaware
|
35-2184301
|
20.
|
Berry
Plastics Acquisition Corporation XI
|
Delaware
|
35-2184300
|
21.
|
Berry
Plastics Acquisition Corporation XII
|
Delaware
|
35-2184299
|
22.
|
Berry
Plastics Acquisition Corporation XIII
|
Delaware
|
35-2184298
|
23.
|
Berry
Plastics Acquisition Corporation XV, LLC
|
Delaware
|
35-2184293
|
24.
|
Kerr
Group, Inc.
|
Delaware
|
95-0898810
|
25.
|
Saffron
Acquisition Corporation
|
Delaware
|
94-3293114
|
26.
|
Setco,
LLC
|
Delaware
|
56-2374074
|
27.
|
Sun
Coast Industries, Inc.
|
Delaware
|
59-1952968
|
28.
|
Tubed
Products, LLC
|
Delaware
|
56-2374082
|
29.
|
Cardinal
Packaging, Inc.
|
Ohio
|
34-1396561
|
30.
|
Landis
Plastics, Inc.
|
Illinois
|
36-2471333
|
Item
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.
|
|
|
Comptroller
of the Currency
|
|
|
Federal
Deposit Insurance Corporation
|
|
|
Federal
Reserve Bank of San Francisco
|
|
|
San
Francisco, California 94120
|
|
(b)
|
Whether
it is authorized to exercise corporate trust
powers.
|
|
|
The
trustee is authorized to exercise corporate trust
powers.
|
Item
2.
|
Affiliations
with Obligor.
If
the obligor is an affiliate of the trustee, describe each such
affiliation.
|
None
with
respect to the trustee.
No
responses are included for Items 3-14 of this Form T-1 because the obligor
is
not in default as provided under Item 13.
Item
15.
Foreign
Trustee.
Not
applicable.
Item
16.
List of Exhibits.
List
below all exhibits filed as a part of this Statement of Eligibility.
Exhibit
1.
A
copy of
the Articles of Association of the trustee now in
effect.*
Exhibit
2.
A
copy of
the Comptroller of the Currency Certificate of Corporate
Existence
and Fiduciary Powers for Wells Fargo Bank, National
Association,
dated February 4, 2004.**
Exhibit
3.
See
Exhibit 2
Exhibit
4.
Copy
of
By-laws of the trustee as now in effect.***
Exhibit
5.
Not
applicable.
Exhibit
6.
The
consent of the trustee required by Section 321(b) of the Act.
Exhibit
7.
A
copy of
the latest report of condition of the trustee published pursuant to law or
the
requirements of its supervising or examining authority.
Exhibit
8.
Not
applicable.
Exhibit
9.
Not
applicable.
*
Incorporated
by reference to the exhibit of the same number to the trustee’s Form T-1 filed
as exhibit 25 to the Form S-4 dated December 30, 2005 of Hornbeck Offshore
Services LLC file number 333-130784-06.
**
Incorporated
by reference to the exhibit of the same number to the trustee’s Form T-1 filed
as exhibit 25 to the Form T-3 dated March 3, 2004 of Trans-Lux Corporation
file
number 022-28721.
***
Incorporated by reference to the exhibit of the same number to the trustee’s
Form T-1 filed as exhibit 25.1 to the Form S-4 dated May 26, 2005 of Penn
National Gaming, Inc. file number 333-125274.
SIGNATURE
Pursuant
to the requirements of the Trust Indenture Act of 1939, as amended, the trustee,
Wells Fargo Bank, National Association, a national banking association organized
and existing under the laws of the United States of America, has duly caused
this statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Middletown and State of
Connecticut on the 27th day of October 2006.
WELLS
FARGO BANK, NATIONAL ASSOCIATION
/s/
Joseph P. O’Donnell
Joseph
P.
O’Donnell
Vice
President
EXHIBIT
6
October
27, 2006
Securities
and Exchange Commission
Washington,
D.C. 20549
Gentlemen:
In
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
the undersigned hereby consents that reports of examination of the undersigned
made by Federal, State, Territorial, or District authorities authorized to
make
such examination may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very
truly yours,
WELLS
FARGO BANK, NATIONAL ASSOCIATION
/s/
Joseph P. O’Donnell
Joseph
P.
O’Donnell
Vice
President
Exhibit
7
Consolidated
Report of Condition of
Wells
Fargo Bank National Association
of
101
North Phillips Avenue, Sioux Falls, SD 57104
And
Foreign and Domestic Subsidiaries,
at
the
close of business June 30, 2006, filed in accordance with 12 U.S.C. §161 for
National Banks.
Dollar
Amounts
In
Millions
______________
ASSETS
Cash
and
balances due from depository institutions:
Noninterest-bearing
balances and currency and coin
$
13,979
Interest-bearing
balances
1,191
Securities:
Held-to-maturity
securities
0
Available-for-sale
securities
66,952
Federal
funds sold and securities purchased under agreements to resell:
Federal
funds sold in domestic
offices
3,086
Securities
purchased under agreements to
resell
1,172
Loans
and
lease financing receivables:
Loans
and
leases held for
sale
37,950
Loans
and
leases, net of unearned income
238,918
LESS:
Allowance for loan and lease
losses
2,248
Loans
and
leases, net of unearned income and
allowance
236,670
Trading
Assets
5,267
Premises
and fixed assets (including capitalized
leases)
3,910
Other
real estate
owned
443
Investments
in unconsolidated subsidiaries and associated
companies
346
Intangible
assets
Goodwill
8,800
Other
intangible assets
16,333
Other
assets
19,760
___________
Total
assets
$415,859
___________
_
__________
LIABILITIES
Deposits:
In
domestic
offices
$298,672
Noninterest-bearing
80,549
Interest-bearing
218,123
In
foreign offices, Edge and Agreement subsidiaries, and IBFs
30,514
Noninterest-bearing
4
Interest-bearing
30,510
Federal
funds purchased and securities sold under agreements to repurchase:
Federal
funds purchased in domestic
offices
3,648
Securities
sold under agreements to
repurchase
6,066
Dollar
Amounts
In
Millions
_______________
Trading
liabilities
4,376
Other
borrowed money
(includes
mortgage indebtedness and obligations under capitalized leases)
4,184
Subordinated
notes and debentures
9,596
Other
liabilities
21,394
_______
Total
liabilities
$378,450
Minority
interest in consolidated subsidiaries
56
EQUITY
CAPITAL
Perpetual
preferred stock and related surplus
0
Common
stock
520
Surplus
(exclude all surplus related to preferred
stock)
24,711
Retained
earnings
12,231
Accumulated
other comprehensive income
-109
Other
equity capital
components
0
________
Total
equity capital
37,353
________
Total
liabilities, minority interest, and equity
capital
$415,859
________
________
I,
Karen
B. Martin, 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 appropriate Federal regulatory
authority and is true to the best of my knowledge
and
belief.
Karen
B.
Martin
Vice
President
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 appropriate
Federal
regulatory authority and is true and correct.
Dave
Hoyt
John
Stumpf
Directors
Avid
Modjtabai
NOTICE
OF GUARANTEED DELIVERY
For
Tender of Any or All of the unregistered
Second
Priority Senior Secured Fixed and Floating Rate Notes due 2014, comprised of
8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes due 2014 and Second Priority Senior
Secured
Floating Rate Notes due 2014
of
Berry
Plastics Holding Corporation
Pursuant
to the Prospectus dated
,
2006
This
notice of guaranteed delivery, or one substantially equivalent to this form,
must be used to tender the Outstanding Notes (as
defined
below) described in the prospectus dated
,
2006 (as the same may be supplemented from time to time, the “Prospectus”)
of
Berry
Plastics Holding Corporation (f/k/a BPC Holding Corporation)
,
a
Delaware corporation (the “Company”), if (i) certificates for any of the
outstanding
Second
Priority Senior Secured Fixed and Floating Rate Notes due 2014 (the “Outstanding
Notes”) of the Company are not immediately available, (ii) time will not
permit
the
Outstanding Notes, the letter of transmittal and all other required documents
to
be delivered to Wells Fargo Bank, National Association (the “Exchange Agent”)
prior to 5:00 p.m., New York City Time, on
,
2006 or
such later date and time to which the Exchange Offer may be extended (the
“Expiration Date”), or (iii) the procedures for delivery by book-entry transfer
cannot be completed on a timely basis. This notice of guaranteed delivery,
or
one substantially equivalent to this form, must be delivered by hand or sent
by
facsimile transmission or mailed to the Exchange Agent, and must be received
by
the Exchange Agent prior to the
Expiration
Date. See The Exchange Offer — Procedures for Tendering Outstanding Notes in the
Prospectus. Capitalized terms used but not defined herein
shall
have the same meaning given them in the Prospectus.
The
Exchange Agent for the Exchange Offer is:
By
Registered and Certified
Mail:
|
By
Overnight Courier or
Regular
Mail:
|
By
Hand Delivery:
|
Wells
Fargo Bank, N.A.
Corporate
Trust Operations
MAC
N9303-121
P.O.
Box 1517
Minneapolis,
MN 55480
|
Wells
Fargo Bank, N.A.
Corporate
Trust Operations
MAC
N9303-121
6th
& Marquette Avenue
Minneapolis,
MN 55479
Or
By
Facsimile Transmission:
(612)
667-6282
Telephone:
(800)
344-5128
|
Wells
Fargo Bank, N.A.
Corporate
Trust Services
608
2nd Avenue South
Northstar
East Building-12th Floor
Minneapolis,
MN 55402
|
DELIVERY
OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE TO
A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE
METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS AT THE RISK
OF
THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. YOU SHOULD READ THE INSTRUCTIONS
ACCOMPANYING THE LETTER OF TRANSMITTAL CAREFULLY BEFORE YOU COMPLETE THIS NOTICE
OF GUARANTEED DELIVERY.
This
notice of guaranteed delivery 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 acknowledges receipt of the Prospectus and the related letter of
transmittal which describe the Company’s offer
(the
“Exchange Offer”) to exchange the Company’s registered $750,000,000 Second
Priority Senior Secured Fixed and Floating Rate Notes due 2014, comprised of
$525,000,000 8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000 Second
Priority Senior Secured Floating Rate Notes due 2014 (the “Exchange Notes”) for
a
like
principal amount of the Company’s outstanding unregistered
Second
Priority Senior Secured Fixed and Floating Rate Notes due 2014
(the
“Outstanding Notes”). The Outstanding Notes may only be tendered in an integral
multiple of $1,000 in principal amount, subject to a minimum denomination of
$2,000.
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, the aggregate principal amount of the Outstanding Notes
indicated below pursuant to the guaranteed delivery procedures set forth in
the
Prospectus under the caption The Exchange Offer — Guaranteed Delivery
Procedures.
The
undersigned understands that (i) no withdrawal of a tender of any of the
Outstanding Notes may be made on or after the
Expiration
Date, and (ii) for a withdrawal of a tender of any of the Outstanding Notes
to
be effective, a written notice of withdrawal
that
complies with the requirements of the Exchange Offer must be timely received
by
the Exchange Agent at its address specified on
the
cover of this notice of guaranteed delivery prior to the Expiration
Date.
The
undersigned also understands that the exchange of the Outstanding Notes for
the
Exchange Notes pursuant to the Exchange
Offer
will be made only after timely receipt by the Exchange Agent of (i) such
Outstanding Notes (or book-entry confirmation of the
transfer
of such Outstanding Notes into the Exchange Agent’s account at The Depository
Trust Company (“DTC”)) and (ii) a letter of
transmittal (or facsimile thereof) with respect to such Outstanding Notes,
properly completed and duly executed, with any required signature guarantees,
this notice of guaranteed delivery and any other documents required by the
letter of transmittal or, in lieu
thereof,
a message from DTC stating that the tendering holder has expressly acknowledged
receipt of, and agrees to be bound by and
held
accountable under, the letter of transmittal, and any other documents required
by the letter of transmittal.
All
authority conferred or agreed to be conferred by this notice of guaranteed
delivery shall not be affected by, and shall survive, the death or incapacity
of
the undersigned, and every obligation of the undersigned under this notice
of
guaranteed delivery shall be
binding
on the heirs, executors, administrators, trustees in bankruptcy, personal and
legal representatives, successors and assigns of the
undersigned.
Name(s)
of Registered Holder(s) (please print or type):
|
Signature(s):
|
Address(es):
|
Area
Code(s) and Telephone Number(s):
|
If
the Outstanding Notes will be delivered by book-entry transfer at
DTC,
insert Depository Account Number:
|
Date:
|
Certificate
Number(s)*
|
Principal
Amount of the Outstanding Notes Tendered**
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Need
not be completed if the Outstanding Notes being tendered are in book-entry
form.
**
Must
be an integral multiple of $1,000 in principal amount, subject to
a
minimum denomination of $2,000.
|
|
This
notice of guaranteed delivery must be signed by the registered holder(s) of
the
Outstanding Notes exactly as its (their)
name(s)
appear on the certificate(s) for such Outstanding Notes or on a security
position listing as the owner of the Outstanding Notes,
or
by
person(s) authorized to become registered holder(s) by endorsements and
documents transmitted with this notice of guaranteed
delivery. If the signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, you must provide the following
information.
Name(s):
_____________________________________________________________________
|
Title(s):
_____________________________________________________________________
|
Signature(s):
_____________________________________________________________________
|
Address(s):
_____________________________________________________________________
|
DO
NOT SEND THE OUTSTANDING NOTES WITH THIS FORM. THE OUTSTANDING NOTES SHOULD
BE
SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL.
GUARANTEE
OF DELIVERY
(NOT
TO BE USED FOR SIGNATURE GUARANTEE)
The
undersigned, a member firm of a registered national securities exchange or
of
the National Association of Securities Dealers,
Inc.,
a
commercial bank or trust company having an office or a correspondent in the
United States or an Eligible Guarantor Institution
within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), hereby (1)
represents
that each holder of the Outstanding Notes on whose behalf this tender is being
made own(s) the Outstanding Notes covered
hereby
within the meaning of Rule 13d-3 under the Exchange Act, (2) represents that
such tender of the Outstanding Notes complies with Rule 14e-4 of the Exchange
Act and (3) guarantees that the undersigned will deliver to the Exchange Agent
the certificates
representing
the Outstanding Notes being tendered hereby for exchange pursuant to the
Exchange Offer in proper form for transfer (or
a
confirmation of book-entry transfer of such Outstanding Notes into the Exchange
Agent’s account at the book-entry transfer facility
of DTC)
with delivery of a properly completed and duly executed letter of transmittal
(or facsimile thereof), with any required signature guarantees, or in lieu
of a
letter of transmittal a message from DTC stating that the tendering holder
has
expressly acknowledged receipt of, and agreement to be bound by and held
accountable under, the letter of transmittal, and any other required documents,
all within three New York Stock Exchange trading days after the Expiration
Date
of the Exchange Offer.
Name
of Firm:___________________________________
|
____________________________________
(Authorized
Signature)
|
Address:_______________________________________
|
Name:_______________________________________________
(Please
Print or Type)
|
_____________________________________
(
Zip
Code)
|
Title:________________________________________________
|
Telephone
Number:
|
Date:
|
The
institution that completes the notice of guaranteed delivery must (i) deliver
or
otherwise transmit the same to the Exchange Agent
at
its
address set forth above by hand, facsimile, or mail, on or prior to the
Expiration Date, and (ii) deliver the certificates representing
any
Outstanding Notes (or a confirmation of book-entry transfer of such Outstanding
Notes into the Exchange Agent’s account at
DTC),
together with a properly completed and duly executed letter of transmittal
(or
facsimile thereof) or a message from DTC stating
that the
tendering holder has expressly acknowledged receipt of, and agrees to be bound
by and held accountable under, the letter of
transmittal
in lieu thereof), with any required signature guarantees and any other documents
required by the letter of transmittal to the
Exchange
Agent within the time period set forth herein. Failure to do so could result
in
a financial loss to such institution.
LETTER
OF TRANSMITTAL
Berry
Plastics Holding Corporation
Offer
to Exchange
Second
Priority Senior Secured Fixed and Floating Rate Notes due 2014, comprised of
8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes due 2014 and Second Priority Senior
Secured Floating Rate Notes due 2014 registered under the Securities Act of
1933
For
A
Like
Principal Amount of Second Priority Senior Secured Fixed and Floating Rate
Notes
due 2014, comprised of 8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes due 2014 and Second Priority Senior
Secured Floating Rate Notes due 2014 Pursuant to the Prospectus
dated
,
2006
THE
EXCHANGE OFFER WILL EXPIRE AT 5:00 PM., NEW YORK CITY TIME,
ON
,
2006, UNLESS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE
EXTENDED,
THE EXPIRATION DATE). TENDERS MAY BE WITHDRAWN PRIOR TO
5:00
PM., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The
Exchange Agent for the Exchange Offer is:
By
Registered and Certified Mail:
|
By
Overnight Courier or Regular Mail:
|
By
Hand Delivery:
|
Wells
Fargo Bank, N.A.
|
Wells
Fargo Bank, N.A.
|
Wells
Fargo Bank, N.A.
|
Corporate
Trust Operations
|
Corporate
Trust Operations
|
Corporate
Trust Services
|
MAC
N9303-121
|
MAC
N9303-121
|
608
2nd Avenue South
|
P.O.
Box 1517
|
6th
& Marquette Avenue
|
Northstar
East Building-12th Floor
|
Minneapolis,
MN 55480
|
Minneapolis,
MN 55479
|
Minneapolis,
MN 55402
|
|
Or
|
|
|
By
Facsimile Transmission:
|
|
|
(612)
667-6282
|
|
|
Telephone:
|
|
|
(800)
344-5128
|
|
Delivery
of this instrument to an address other than as set forth above, or transmission
of instructions via facsimile other
than
as set forth above, will not constitute a valid delivery.
The
undersigned acknowledges that he or she has received the prospectus,
dated
,
2006
(the “Prospectus”), of Berry Plastics Holding Corporation (f/k/a BPC Holding
Corporation), a Delaware corporation (the “Company”), and this Letter of
Transmittal (the “Letter of Transmittal”), which together constitute the
Company's offer (the “Exchange Offer”) to exchange an aggregate principal amount
of up to $750,000,000 Second Priority Senior Secured Fixed and Floating Rate
Notes due 2014, comprised of $525,000,000 8
7
/
8
%
Second
Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000 Second
Priority Senior Secured Floating Rate Notes due 2014 registered under the
Securities Act of 1933A (the “Exchange Notes”) of the Company for a like
principal amount of the Company's outstanding unregistered Second Priority
Senior Secured Fixed and Floating Rate Notes due 2014 (the “Outstanding Notes”).
Capitalized terms used but not defined herein shall have the same meaning given
to them in the Prospectus. Where the context requires, references herein to
the
Exchange Notes and the Outstanding Notes shall be deemed to be references to
the
associated guaranty (the terms of which are described in the indenture which
governs both the Exchange Notes and Outstanding Notes).
For
each
of the Outstanding Notes accepted for exchange, the holder of such Outstanding
Notes will receive a new note having a principal amount equal to that of the
surrendered Outstanding Note. The terms of the Exchange Notes are substantially
identical to the terms of the Outstanding Notes, except that the transfer
restrictions, registration rights and additional interest provisions relating
to
the Outstanding Notes will not apply to the Exchange Notes.
The
Company reserves the right, at any time or from time to time, to extend the
Exchange Offer at its discretion, in which event the term Expiration Date shall
mean the latest time and date to which the Exchange Offer is extended. The
Company will notify the registered holders of the Outstanding Notes of any
extension promptly by oral or written notice thereof.
This
Letter of Transmittal is to be completed by a holder of the Outstanding Notes
either if certificates are to be forwarded herewith or if a tender of the
Outstanding Notes is to be made by book-entry transfer to the account maintained
by Wells Fargo Bank, National Association (the “Exchange Agent”) at The
Depository Trust Company (the “Book-Entry Transfer Facility”) pursuant to the
procedures set forth in The Exchange Offer section of the Prospectus. Holders
of
the Outstanding Notes whose certificates are not immediately available, or
who
are unable to deliver their certificates or confirmation of the book-entry
tender of their Outstanding Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility (a “Book-Entry Confirmation”) and all other
documents required by this Letter of Transmittal to the Exchange Agent on or
prior to the Expiration Date, must tender their Outstanding Notes according
to
the guaranteed delivery procedures set forth in The Exchange Offer-Guaranteed
Delivery Procedures section of the Prospectus and Instruction 1 herein. Delivery
of documents to the Book-Entry Transfer Facility does not constitute delivery
to
the Exchange Agent.
The
undersigned has completed the appropriate boxes below and signed this Letter
of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer.
List
below the Outstanding Notes to which this Letter of Transmittal relates. If
the
space provided below is inadequate, the numbers and principal amount of the
Outstanding Notes should be listed on a separate signed schedule affixed
hereto.
DESCRIPTION
OF OUTSTANDING NOTES
|
1
|
2
|
3
|
Names
and Address(es) of
Registered
Holder(s)
(Please
fill in, if blank)
|
Certificate
Number(s)*
|
Aggregate
Principal
Amount
of Outstanding
Notes
Represented by
Certificate
|
Principal
Amount of
Outstanding
Notes
Tendered**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
*
Need
not
be completed if the Outstanding Notes are being tendered by book-entry
transfer.
**
Unless
otherwise indicated in this column, a holder will be deemed to have tendered
ALL
of the Outstanding Notes represented by the Outstanding Notes indicated in
column 2. See Instruction 2.
The
Outstanding
Notes tendered must be in an integral multiple of $1,000 in principal amount,
subject to a minimum denomination of $2,000.
See
Instruction
1.
q
CHECK
HERE IF TENDERED ORIGINAL NOTES ARE ENCLOSED HEREWITH.
q
CHECK
HERE IF TENDERED ORIGINAL 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 THE FOLLOWING:
Name
of
Tendering
Institution: _______________________________________________________
Account
Number: ______________
Transaction
Code Number: _______________________
By
crediting the Outstanding Notes to the Exchange Agent's Account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's Automated Tender Offer Program (ATOP) and by complying with
applicable ATOP procedures with respect to the Exchange Offer, including
transmitting an agent's message to the Exchange Agent in which the holder of
the
Outstanding
Notes acknowledges receipt of this Letter of Transmittal and agrees to be bound
by the terms of this Letter of Transmittal,
the
participant in the Book-Entry Transfer Facility confirms on behalf of itself
and
the beneficial owners of such Outstanding Notes all provisions of this Letter
of
Transmittal applicable to it and such beneficial owners as fully as if it had
completed the information required herein and executed and transmitted this
Letter of Transmittal to the Exchange Agent.
q
CHECK
HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s)
of Registered
Holder(s): _____________________________________________________
Window
Ticket Number (if
any): ______________________________________________________
Date
of
Execution of Notice of Guaranteed
Delivery: _______________________________________
Name
of
Institution which guaranteed
delivery: ___________________________________________
If
Delivered by Book-Entry Transfer, Complete the Following:
Account
Number: ______________
Transaction
Code Number:
____________________
q
CHECK
HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ___________________________________________________
Address: _________________________________________________
If
the
undersigned is not a broker-dealer, the undersigned represents that it is not
participating in, and does not intend to participate in, a distribution of
the
Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Outstanding Notes, it represents
that
the Outstanding Notes to be exchanged for Exchange Notes were acquired by it
as
a result of market-making or other trading activities and acknowledges that
it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes; however, by so acknowledging
and by delivering a prospectus, the undersigned will not be deemed to admit
that
it is an underwriter within the meaning of the Securities Act.
PLEASE
READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies
and Gentlemen:
Upon
the
terms and subject to the conditions of the Exchange Offer, the undersigned
hereby tenders to the Company the aggregate principal amount of the Outstanding
Notes indicated above. Subject to, and effective upon, the acceptance for
exchange of each of the Outstanding Notes tendered hereby, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to such Outstanding Notes as are being tendered
hereby.
The
undersigned hereby represents and warrants that the undersigned has full power
and authority to tender, sell, assign and transfer the Outstanding Notes
tendered hereby and that the Company will acquire good and marketable title
thereto, free and clear of all liens, charges, claims, encumbrances, adverse
claims and restrictions of any kind. The undersigned hereby further represents
(i) that any Exchange Notes acquired in exchange for Outstanding Notes tendered
hereby will have been acquired in the ordinary course of business of the person
receiving such Exchange Notes, whether or not such person is the undersigned,
(ii) that neither the holder of such Outstanding Notes nor any such other person
is participating in or intends to participate in a distribution of such Exchange
Notes within the meaning of the federal securities laws, or has an arrangement
or understanding with any person or entity to participate in any distribution
of
such Exchange Notes, (iii) that neither the holder of such Outstanding Notes
nor
any such other person is an affiliate, as defined in Rule 405 under the
Securities Act, of the Company and (iv) that the undersigned is not acting
on
behalf of any person or entity who could not truthfully make the statements
set
forth in clauses (i), (ii) and (iii) above.
The
undersigned also acknowledges that this Exchange Offer is being made by the
Company based upon the Company's understanding of an interpretation by the
staff
of the Securities and Exchange Commission (the Commission) as set forth in
no-action letters issued to third parties, that the Exchange Notes issued in
exchange for the Outstanding Notes pursuant to the Exchange Offer may be offered
for resale, resold and otherwise transferred by holders 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 provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holders' business,
and such holders are not engaged in, and do not intend to engage in, a
distribution of such Exchange Notes and have no arrangement or understanding
with any person to participate in the distribution of such Exchange Notes.
However, the staff of the Commission has not considered this Exchange Offer
in
the context of a no-action letter, and there can be no assurance that the staff
of the Commission would make a similar determination with respect to this
Exchange Offer as in other circumstances. If a holder of Outstanding Notes
is an
affiliate of the Company, or is engaged in or intends to engage in a
distribution of the Exchange Notes or has any arrangement or understanding
with
respect to the distribution of the Exchange Notes to be acquired pursuant to
the
Exchange Offer, such holder could not rely on the applicable interpretations
of
the staff of the Commission and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transaction. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Outstanding Notes, it
represents that the Outstanding Notes to be exchanged for the Exchange Notes
were acquired by it for its own account as a result of market-making activities
or other trading activities and acknowledges that it will deliver a Prospectus
in connection with any resale of such Exchange Notes; however, by so
acknowledging that it will deliver, and by delivering, a Prospectus, the
undersigned will not be deemed to admit that it is an underwriter within the
meaning of the Securities Act.
The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Company to be necessary or desirable to complete the sale,
assignment and transfer of the Outstanding Notes tendered hereby. All authority
conferred or agreed to be conferred in this Letter of Transmittal and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned.
This
tender may be withdrawn only in accordance with the procedures set forth in
The
Exchange Offer—Withdrawal Rights section of the Prospectus.
Unless
otherwise indicated herein in the box entitled Special Issuance Instructions
below, please deliver the Exchange Notes in the name of the undersigned or,
in
the case of a book-entry delivery of Outstanding Notes, please credit the
account indicated above maintained at the Book-Entry Transfer Facility.
Similarly, unless otherwise indicated under the box entitled Special Delivery
Instructions below, please send the Exchange Notes to the undersigned at the
address shown above in the box entitled Description of Outstanding
Notes.
THE
UNDERSIGNED, BY COMPLETING THE BOX ENTITLED DESCRIPTION OF OUTSTANDING NOTES
ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED TO HAVE TENDERED
THE OUTSTANDING NOTES AS SET FORTH IN SUCH BOX ABOVE.
SPECIAL
ISSUANCE INSTRUCTIONS
(See
Instructions 3 and 4)
To
be
completed ONLY if certificates of Outstanding Notes not exchanged and/or
Exchange Notes are to be issued in the name of
and
sent
to someone other than the person(s) whose signature(s) appear(s) on this Letter
of Transmittal above, or if Outstanding Notes
delivered by book-entry transfer which are not accepted for exchange are to
be
returned by credit to an account maintained at the Book-Entry Transfer Facility
other than the account indicated above.
Issue
Exchange Notes and/or Outstanding Notes to:
Name(s): _____________________________________________________________________
_____________________________________________________
(Please
Type or Print)
Address: _____________________________________________________________________
_____________________________________________________
(Include
Zip Code)
(Complete
Accompanying Substitute Form W-9)
Credit
unexchanged Outstanding Notes delivered by book-entry transfer to the Book-Entry
Transfer Facility account set forth
below.
____________________________________________________________________
(Book-Entry
Transfer Facility
Account
Number, if applicable)
SPECIAL
DELIVERY INSTRUCTIONS
(See
Instructions 3 and 4)
To
be
completed ONLY if certificates of Outstanding Notes not exchanged and/or
Exchange Notes are to be sent to someone other than the person(s) whose
signature(s) appear(s) on this Letter of Transmittal above, or to such person(s)
at an address other than shown in the box entitled Description of Outstanding
Notes on this Letter of Transmittal above.
Mail
Exchange Notes and/or Outstanding Notes to:
Name(s): _______________________________________________________________
_________________________________________________
(Please
Type or Print)
Address: ______________________________________________________________
________________________________________________
(Include
Zip Code)
IMPORTANT:
THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES
FOR ORIGINAL NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS
OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION
DATE.
PLEASE
READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX
ABOVE.
PLEASE
SIGN HERE
(To
Be Completed By All Tendering Holders)
(Complete
accompanying Substitute Form W-9 also)
x:
_____________________________
______________________________
, 2006
x:
_____________________________
______________________________
, 2006
(Signatures
of Registered Owner(s))
(Date)
Area
Code
and Telephone
Number: _________________________________________
If
a
holder is tendering any Outstanding Notes, this Letter of Transmittal must
be
signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for such Outstanding Notes or by any person(s) authorized to
become registered holder(s) by endorsements and documents transmitted herewith.
If a signature is by a trustee, executor, administrator, guardian, officer
or
other person acting in a fiduciary or representative capacity, please set forth
your full title. See Instruction 3.
Name(s): ________________________________________________________________
(Please
Type or Print)
Title: ___________________________________________________________________
Capacity: ________________________________________________________________
Address: ________________________________________________________________
(Include
Zip Code)
SIGNATURE
GUARANTEE
(If
Required by Instruction 3)
Signature
Guaranteed
by
an
Eligible
Institution: _____________________________________________________________
(Authorized
Signature)
_________________________________________________
(Title)
_________________________________________________
(Name
and Firm)
Date: __________________________,
2006
INSTRUCTIONS
Forming
Part of the Terms and Conditions of the Exchange Offer
1.
Delivery
of this Letter of Transmittal and Outstanding Notes; Guaranteed Delivery
Procedures.
This
Letter of Transmittal is to be completed by holders of Outstanding Notes either
if certificates are to be forwarded herewith or if tenders are to be made
pursuant to the procedures for delivery by book-entry transfer set forth in
The
Exchange Offer — Procedures for Tendering Outstanding Notes section of the
Prospectus. Certificates for all physically tendered Outstanding Notes, or
Book-Entry Confirmation, as the case may be, as well as a properly completed
and
duly executed Letter of Transmittal (or facsimile thereof) and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at the address set forth herein on or prior to the Expiration
Date, or the tendering holder must comply with the guaranteed delivery
procedures set forth below. Outstanding Notes tendered hereby must be in
integral multiple of $1,000 in principal amount, subject to a minimum
denomination of $2,000.
Holders
of Outstanding Notes whose certificates for Outstanding Notes are not
immediately available or who cannot deliver their certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date,
or
who cannot complete the procedure for book-entry transfer on a timely basis,
may
tender their Outstanding Notes pursuant to the guaranteed delivery procedures
set forth in The Exchange Offer — Guaranteed Delivery Procedures section of the
Prospectus. Pursuant to such procedures, (i) such tender must be made through
an
Eligible Institution (as defined below), (ii) prior to the Expiration Date,
the
Exchange Agent must receive from such Eligible Institution a Notice of
Guaranteed Delivery, substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery), setting forth the name and
address of the holder of Outstanding Notes, the certificate number or numbers
of
such Outstanding Notes and the principal amount of Outstanding 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 or
certificates representing the Outstanding Notes to be tendered in proper form
for transfer, or a book-entry confirmation, as the case may be, and any other
documents required by this Letter of Transmittal will be deposited by the
Eligible Institution (as defined below) with the Exchange Agent, and (iii)
such
properly completed and executed Letter of Transmittal (or facsimile thereof),
as
well as the certificate or certificates representing all tendered Outstanding
Notes in proper form for transfer, or a book-entry confirmation, as the case
may
be, and all other documents required by this Letter of Transmittal are received
by the Exchange Agent within three New York Stock Exchange trading days after
the Expiration Date.
The
method of delivery of this Letter of Transmittal, the Outstanding Notes and
all
other required documents is at the election and risk of the tendering holders.
Instead of delivery by mail, it is recommended that holders use an 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 Outstanding Notes should be sent to the Company. Holders may
request their respective brokers, dealers, commercial banks, trust companies
or
nominees to effect the tenders for such holders.
See
The
Exchange Offer section of the Prospectus.
2.
Partial
Tenders (not applicable to holders of Outstanding Notes who tender by book-entry
transfer); Withdrawals.
If
less
than all of the Outstanding Notes evidenced by a submitted certificate are
to be
tendered, the tendering holder(s) should fill in the aggregate principal amount
of Outstanding Notes to be tendered in the applicable box of boxes above
entitled Description of Outstanding Notes — Principal Amount of Outstanding
Notes Tendered, as the case may be. A newly reissued certificate for the
Outstanding Notes submitted but not tendered will be sent to such holder as
soon
as practicable after the Expiration Date.
All
of
the Outstanding Notes delivered to the Exchange Agent will he deemed to have
been tendered unless otherwise clearly indicated.
If
not
yet accepted, a tender pursuant to the Exchange Offer may be withdrawn prior
to
the Expiration Date. To be effective with respect to the tender of Outstanding
Notes, a notice of withdrawal must: (i) be received by the Exchange Agent before
the Company notifies the Exchange Agent that it has accepted the tender of
Outstanding Notes pursuant to the Exchange Offer; (ii) specify the name of
the
Outstanding Notes; (iii) contain a description of the Outstanding Notes to
be
withdrawn, the certificate numbers shown on the particular certificates
evidencing such Outstanding Notes and the principal amount of Outstanding Notes
represented by such certificates; and (iv) be signed by the holder in the same
manner as the original signature on this Letter of Transmittal (including any
required signature guarantee). The Exchange Agent will return the properly
withdrawn Outstanding Notes promptly following receipt of the notice of
withdrawal. If Outstanding Notes have been tendered pursuant to the procedure
for book-entry transfer, any notice of withdrawal must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Outstanding Notes or otherwise comply with the Book-Entry Transfer
Facility's procedures. All questions as to the validity of any notice of
withdrawal, including time of receipt, will he determined by the Company, and
such determination will be final and binding on all parties.
3.
Signatures
on this Letter of Transmittal, Bond Powers and Endorsements; Guarantee of
Signatures.
If
this
Letter of Transmittal is signed by the registered holder of the Outstanding
Notes tendered hereby, the signature must correspond exactly with the name
as
written on the face of the certificates without alteration, enlargement or
any
change whatsoever.
If
any
tendered Outstanding Notes are owned of record by two or more joint owners,
all
such owners must sign this Letter of Transmittal.
If
any
tendered Outstanding Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal as there are different registrations of
certificates.
When
this
Letter of Transmittal is signed by the registered holder (which term, for the
purposes described herein, shall include the Book-Entry Transfer Facility whose
name appears on a security listing as the owner of the Outstanding Notes) of
the
Outstanding Notes specified herein and tendered hereby, no endorsements of
certificates or separate bond powers are required. If, however, the Exchange
Notes are to be issued to a person other than the registered holder, then
endorsements of any certificates transmitted hereby or separate bond powers
are
required. Signatures on such certificates or bond powers must be guaranteed
by
an Eligible Institution (as defined below).
If
this
Letter of Transmittal is signed by a person other than the registered holder
or
holders of any Outstanding Notes specified herein, then certificate(s)
representing such Outstanding Notes must be endorsed by such registered
holder(s) or accompanied by separate written instruments of transfer or endorsed
in blank by such registered holder(s) in form satisfactory to the Company and
duly executed by the registered holder, in either case signed exactly as such
registered holder(s) name or names appear(s) on the Outstanding Notes. If the
Letter of Transmittal or any certificates of Outstanding Notes or separate
written instruments of transfer or exchange are signed or endorsed 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.
Signature(s)
on a Letter of Transmittal or a notice of withdrawal, as the case may be, must
be guaranteed by an Eligible Institution unless the Outstanding Notes tendered
pursuant thereto are tendered (i) by a registered holder who has not completed
the box entitled Special Issuance Instructions or Special Delivery Instructions
on this 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 a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or another eligible
guarantor institution within the meaning of Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (an “Eligible Institution”).
4.
Special
Issuance and Delivery Instructions.
Tendering
holders of Outstanding Notes should indicate in the applicable box the name
and
address to which Exchange Notes issued pursuant to the Exchange Offer are to
be
issued or sent, if different from the name or address of the person signing
this
Letter of Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person so named must also be
indicated. Holders tendering Outstanding Notes by book-entry transfer may
request that Outstanding Notes not exchanged be credited to such account
maintained at the Book-Entry Transfer Facility as such holder may designate
hereon. If no such instructions are given, such Outstanding Notes not exchanged
will be returned to the name or address of the person signing this Letter of
Transmittal or credited to the account listed beneath the box entitled
Description of Outstanding Notes.
5.
Tax
Identification Number.
An
exchange of Outstanding Notes for Exchange Notes will not be treated as a
taxable exchange or other taxable event for U.S. Federal income tax purposes.
In
particular, no backup withholding or information reporting is required in
connection with such an exchange. However, U.S. Federal income tax law generally
requires that payments of principal and interest, including any additional
interest, on a note to a holder be subject to backup withholding unless such
holder provides the Company (as payor) or other payor with such holder's correct
Taxpayer Identification Number (TIN) on Substitute Form W-9 below or otherwise
establishes a basis for exemption. If such holder is an individual, the TIN
is
his or her social security number. If the payor is not provided with the current
TIN or an adequate basis for an exemption, such tendering holder may be subject
to a $50 penalty imposed by the Internal Revenue Service, and all payments
that
are made to such holder may be subject to backup withholding. For further
information concerning backup withholding and instructions for completing the
Substitute Form W-9 (including how to obtain a taxpayer identification number
if
you do not have one and how to complete the Substitute Form W-9 if the
Outstanding Notes are held in more than one name), consult the enclosed
Guidelines for Certification of Taxpayer Identification Number attached
hereto.
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 (the W-9 Guidelines) for additional
instructions.
To
prevent backup withholding on reportable payments of principal and interest,
including any additional interest, by the Company (when acting as payor), each
tendering holder of Outstanding Notes must provide its correct TIN by completing
the Substitute Form W-9 set forth below, certifying that the TIN provided is
correct (or that such holder is awaiting a TIN) and that (i) the holder is
exempt from backup withholding, (ii) the holder has not been notified by the
Internal Revenue Service that such holder is subject to a backup withholding
as
a result of a failure to report all interest or dividends or (iii) the Internal
Revenue Service has notified the holder that such holder is no longer subject
to
backup withholding. If the tendering holder of Outstanding Notes is a
nonresident alien or foreign entity not subject to backup withholding, such
holder must give the Company a completed Form W-8BEN Certificate of Foreign
Status of Beneficial Owner for United States Tax Withholding, or other
appropriate Form W-8. These forms may be obtained from the Exchange Agent.
If
the Outstanding Notes are in more than one name or are not in the name of the
actual owner, such holder should consult the W-9 Guidelines for information
on
which TIN to report. If such holder does not have a TIN, such holder should
consult the W-9 Guidelines for instructions on applying for a TIN, check the
box
in Part 2 of the Substitute Form W-9 and write applied for in lieu of its TIN.
Note: checking this box and writing applied for on the form means that such
holder
has
already applied for a TIN or that such holder intends to apply for one in the
near future. If a holder checks the box in Part 2 of the Substitute Form W-9
and
writes applied for on that form, backup withholding at a rate of 28% will
nevertheless apply to all reportable payments made to such holder. If such
a
holder furnishes its TIN to the Company within 60 calendar days, however, any
amounts so withheld shall be refunded to such holder.
Backup
withholding is not an additional Federal income tax. Rather, the Federal income
tax liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in overpayment of taxes, a refund
may be obtained from the Internal Revenue Service.
6.
Transfer
Taxes.
Holders
who tender their Outstanding Notes for exchange will not be obligated to pay
any
transfer taxes in connection therewith. if, however, Exchange Notes are to
be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Outstanding Notes tendered hereby, or if tendered
Outstanding Notes are registered in the name of any person other than the person
signing this Letter of Transmittal, or if a transfer tax is imposed for any
reason other than the exchange of Outstanding Notes in connection with the
Exchange Offer, the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is
not
submitted herewith, the amount of such transfer taxes will be billed directly
to
such tendering holder.
Except
as provided in this Instruction 6, it will not be necessary for transfer tax
stamps to be affixed to the Outstanding Notes specified in this Letter of
Transmittal.
7.
Waiver
of Conditions.
The
Company reserves the right to waive satisfaction of any or all conditions
enumerated in the Prospectus.
8.
No
Conditional Tenders.
No
alternative, conditional, irregular or contingent tenders will be accepted.
All
tendering holders of Outstanding Notes, by execution of this Letter of
Transmittal, shall waive any right to receive notice of the acceptance of their
Outstanding Notes for exchange.
Neither
the Company, the Exchange Agent nor any other person is obligated to give notice
of any defect or irregularity with respect to any tender of Outstanding Notes
nor shall any of them incur any liability for failure to give any such
notice.
9.
Mutilated,
Lost, Stolen or Destroyed Outstanding Notes.
Any
holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated above for further
instructions.
10.
Requests
for Assistance or Additional Copies.
Questions
relating to the procedure for tendering, as well as requests for additional
copies of the Prospectus and this Letter of Transmittal, may be directed to
the
Exchange Agent, at the address and telephone number indicated
above.
11.
Incorporation of Letter of Transmittal
.
This
Letter of Transmittal shall be deemed to be incorporated in and acknowledged
and
accepted by any tender through the Book-Entry Transfer Facility's ATOP
procedures by any participant on behalf of itself and the beneficial owners
of
any Outstanding Notes so tendered.
TO
BE
COMPLETED BY ALL TENDERING HOLDERS
(See
Instruction 5)
SUBSTITUTE
Form
W-9
Payer’s
Request
for
Taxpayer
Identification
Number
(TIN)
|
PLEASE
PROVIDE YOUR TAXPAYER IDENTIFICATION NUMBER (TIN) IN THE BOX AT
RIGHT AND
CERTIFY BY SIGNING AND DATING BELOW. IF YOU ARE AWAITING A TIN,
CHECK THE
BOX IN PART III. FOR ADDITIONAL INSTRUCTIONS, SEE THE ENCLOSED
GUIDELINES
FOR CERTIFICATION OF TIN ON SUBSTITUTE FORM W-9.
__________________________________________
Name
__________________________________________
Business
Name
Please
check appropriate box
q
Individual/Sole Proprietor
q
Corporation
q
Partnership
q
Other
__________________________________________
Address
__________________________________________
City,
State, Zip Code
|
Part
I-
Social
Security Number OR Employer Identification Number
__________________
____________________
Part
II-
For
Payees exempt from backup withholding, see the enclosed Guidelines
for
Certification of Taxpayer Identification Number on Substitute Form
W-9,
check the Exempt box below, and complete the Substitute Form
W-9.
Exempt
q
____________________
Part
III
Awaiting
TIN
q
Please
complete the Certificate of Awaiting Taxpayer Number
below.
|
Certification—Under
penalties of perjury, I certify that:
(1)
The
number shown on this form is my correct taxpayer identification number (or
I am
waiting for a number to be issued to me), and
(2)
I am
not subject to backup withholding because (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
(IRS) that I am subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding, and
(3)
I am
a U.S. person (including a U.S. resident alien).
Certification
Instructions
-You
must
cross out item (2) above if you have been notified by the IRS that you are
currently subject to backup withholding because you have failed to report all
interest and dividends on your tax return. However, if after being notified
by
the IRS that you were subject to backup withholding, you received notification
from the IRS that you are no longer subject to backup withholding, do not cross
out item (2). (Also see instructions in the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form
W-9.)
The
Internal Revenue Service does not require your consent to any provision of
this
document other than the certifications required to avoid backup
withholding.
SIGNATURE: ___________________________________
DATE:______________________
YOU
MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART III
OF
THE SUBSTITUTE FORM W-9.
CERTIFICATE
OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I
certify
under penalties of perjury that a taxpayer identification number has not been
issued to me, and either (1) I have mailed or delivered an application to
receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to
mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer
identification
number, 28% of all reportable payments made to me will be withheld until I
provide a taxpayer identification number.
SIGNATURE: ___________________________________
DATE: ______________________
NOTE:
FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN A $50
PENALTY IMPOSED BY THE IRS AND BACKUP WITHHOLDING OF 28% OF ANY PAYMENT. PLEASE
REVIEW THE ENCLOSED GUIDELINES.
GUIDELINES
FOR DETERMINING THE PROPER IDENTIFICATION NUMBER
TO
GIVE THE EXCHANGE AGENT.
Social
Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000.
Employer identification numbers have nine digits separated by only one hyphen:
i.e. 00-0000000. The table below will help determine the number to give the
payer.
For
this type of account:
|
Give
the SOCIAL SECURITY number of-
|
1.
An
individual’s account
|
The
individual
|
2.
Two
or more individuals
(joint
account)
|
The
actual owner of the account or, of combined funds, the first individual
on
the account(1)
|
3.
Custodian
account of a minor
(Uniform
Gift to Minors Act)
|
The
Minor(2)
|
4.
a.
The
usual revocable savings
trust
account (grantor is also
trustee)
|
The
grantor-trustee(1)
|
b.
So-called
trust account that is not a
legal
or valid trust under
state law
|
The
actual owner(1)
|
5.
Sole
proprietorship of single-owner LLC
|
The
owner(3)
|
|
|
For
this type of account:
|
Give
the EMPLOYER
IDENTIFICATION
number of-
|
6.
Sole
proprietorship or single-owner LLC
|
The
owner(3)
|
7.
A
valid trust, estate, or pension trust
|
The
legal entity (Do not furnish the identifying number of the personal
representative or trustee unless the legal entity itself is not
designated
in the account title.)(4)
|
8.
Corporate
or LLC electing corporate status on Form 8832
|
The
corporation
|
9.
Association,
club, Religious, charity, educational
organization
or
other Tax-Exempt organization account
|
The
organization
|
10.
Partnership
or multi-member LLC
|
The
partnership
|
11.
A
broker or registered nominee
|
The
broker or nominee
|
12.
Account
with the Department of Agriculture in the name of
an
entity
(such as a State or local government, school
district,
or
prison) that receives agricultural program
payments
|
The
public entity
|
|
|
(1)
List
first and circle the name of the person whose number you furnish. If only one
person on a joint account has a social security number, that person's number
must be furnished.
(2)
Circle
the minor's name and furnish the minor's social security
number.
(3)
You
must show your individual name, but you may also enter your business or doing
business as name. You may use either your social security number or employer
identification
number (if you have one).
(4)
List
first and circle the name of the legal trust, estate, or pension
trust.
NOTE:
If
no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
GUIDELINES
FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Obtaining
a Number
If
you do
not have a taxpayer identification number, obtain Form SS-5, Application for
Social Security Card, or Form SS-4, Application for Employer Identification
Number, at the local office of the Social Security Administration or the
Internal Revenue
Service
(the IRS) and apply for a number. Section references in these guidelines refer
to sections under the Internal Revenue Code of
1986, as
amended. Form SS-5 can also be obtained online at
http://www.ssa.gov/online/ss-5.pdf
or by
calling 1-800-772-1213. Form SS-4 can also be obtained online at
www.irs.gov
or by
calling 1-900-829-3676.
Payees
specifically exempted from backup withholding include:
·
|
An
organization exempt from tax under Section 501(a), an individual
retirement account (IRA), or a custodial account
under Section 403(b)(7), if the account satisfies the requirements
of
Section 401(0(2).
|
·
|
The
United States or a state thereof, the District of Columbia, a possession
of the United States, or a political
subdivision or wholly-owned agency or instrumentality of any one
or more
of the foregoing.
|
·
|
An
international organization or any agency or instrumentality
thereof.
|
·
|
A
foreign government or any political subdivision, agency or instrumentality
thereof.
|
Payees
that may be exempt from backup withholding include:
·
|
A
financial institution.
|
·
|
A
dealer in securities or commodities required to register in the United
States, the District of Colombia, or a possession of the
United
States.
|
·
|
A
real estate investment trust.
|
·
|
A
common trust fund operated by a bank under Section
584(a).
|
·
|
An
entity registered at all times during the tax year under the Investment
Company Act of 1940, as amended.
|
·
|
A
middleman known in the investment community as a nominee or
custodian.
|
·
|
A
futures commission merchant registered with the Commodity Futures
Trading
Commission.
|
·
|
A
foreign central bank of issue.
|
·
|
A
trust exempt from tax under Section 664 or described in Section
4947.
|
Payments
of dividends and patronage dividends not generally subject to backup withholding
include the following:
·
|
Payments
to nonresident aliens subject to withholding under Section
1441.
|
·
|
Payments
to partnerships not engaged in a trade or business in the U.S. and
which
have at least one nonresident alien
partner.
|
·
|
Payments
of patronage dividends where the amount received is not paid in
money.
|
·
|
Payments
made by certain foreign
organizations.
|
·
|
Section
404(k) payments made by an ESOP.
|
Payments
of interest not generally subject to backup withholding include the
following:
·
|
Payments
of interest on obligations issued by individuals. Note: You may be
subject
to backup withholding if this interest is
$600 or more and is paid in the course of the payer's trade or business
and you have not provided your correct taxpayer identification number
to
the payer.
|
·
|
Payments
of tax-exempt interest (including exempt-interest dividends under
Section
852).
|
·
|
Payments
described in Section 6049(b)(5) to nonresident
aliens.
|
·
|
Payments
on tax-free covenant bonds under Section
1451.
|
·
|
Payments
made by certain foreign
organizations.
|
·
|
Mortgage
or student loan interest paid to
you.
|
Exempt
payees
described
above
should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS
FORM WITH
THE
PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE EXEMPT IN PART 2
OF
THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE EXCHANGE
AGENT.
Certain
payments other than interest, dividends, and patronage dividends, which are
not
subject to information reporting are also not
subject
to backup withholding. For details, see the regulations under Sections 6041,
6041A, 6045, 6050A and 6050N.
Privacy
Act Notice
.-Section
6109 requires most recipients of dividend, interest, or certain other income
to
give taxpayer
identification
numbers to payers who must report the payments to the IRS. The IRS uses the
numbers for identification purposes and
to help
verify the accuracy of tax returns. The IRS may also provide this information
to
the Department of Justice for civil and criminal litigation and to cities,
states and the District of Columbia to carry out their tax laws. The IRS may
also disclose this information to other countries under a tax treaty, or to
Federal and state agencies to enforce Federal nontax criminal laws and to
combat
terrorism. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally
withhold
a portion of taxable interest, dividend, and certain other payments to a payee
who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
Penalties
(1)
Penalty for Failure to Furnish Taxpayer Identification
Number
.-If
you
fail to furnish your taxpayer identification number to a
payer,
you are subject to a penalty of $50 for each such failure unless your failure
is
due to
reasonable
cause
and not to willful neglect.
(2)
Civil Penalty for False Information With Respect to
Withholding
.-If
you
make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3)
Criminal Penalty for Falsifying Information
.-Willfully
falsifying certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
(4)
Misuse of Taxpayer Identification Numbers
.-If
the
requester discloses or uses taxpayer identification numbers in violation of
federal law, the requester may be subject to civil and criminal
penalties.
FOR
ADDITIONAL
INFORMATION
CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.