-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KsYmOMugeSt/DUuQdLNdDongKS7EanqSvqskQSBkzeEA5fKiG46nuTBKQeKmkc3b LG3UrWZiSkGE0WCk45XQ6w== 0000912057-01-505586.txt : 20010402 0000912057-01-505586.hdr.sgml : 20010402 ACCESSION NUMBER: 0000912057-01-505586 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20001230 FILED AS OF DATE: 20010330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERRY PLASTICS CORP CENTRAL INDEX KEY: 0000919463 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 351813706 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-75706 FILM NUMBER: 1585413 BUSINESS ADDRESS: STREET 1: 101 OAKLEY ST STREET 2: P O BOX 959 CITY: EVANSVILLE STATE: IN ZIP: 47710 BUSINESS PHONE: 8124242904 MAIL ADDRESS: STREET 1: PO BOX 959 CITY: EVANSVILLE STATE: IN ZIP: 47706-0959 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BPC HOLDING CORP CENTRAL INDEX KEY: 0000919465 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 351814673 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-75706-01 FILM NUMBER: 1585414 BUSINESS ADDRESS: STREET 1: 101 OAKLEY ST STREET 2: P O BOX 959 CITY: EVANSVILLE STATE: IN ZIP: 47710 BUSINESS PHONE: 8124242904 10-K 1 a2042389z10-k.txt 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) |X| Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 30, 2000 ----------------- or |_| Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to ________ Commission File Number 33-75706 BPC HOLDING CORPORATION (Exact name of registrant as specified in its charter) Delaware 35-1813706 (State or other jurisdiction (IRS employer of incorporation or organization) identification number) BERRY PLASTICS CORPORATION (Exact name of registrant as specified in its charter) Delaware 35-1814673 (State or other jurisdiction (IRS employer of incorporation or organization) identification number) 101 Oakley Street Evansville, Indiana 47710 (Address of principal executive offices) (Zip code) Registrants' telephone number, including area code: (812) 424-2904 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes |X| No |_| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: Not applicable. None of the voting stock of any registrant is held by a non-affiliate of such registrant. There is no public trading market for any class of voting stock of BPC Holding Corporation. As of March 9, 2001, the following shares of capital stock of BPC Holding Corporation were outstanding: 91,000 shares of Class A Voting Common Stock; 259,000 shares of Class A Nonvoting Common Stock; 144,546 shares of Class B Voting Common Stock; 56,509 shares of Class B Nonvoting Common Stock; and 16,833 shares of Class C Nonvoting Common Stock. As of March 9, 2001, there were outstanding 100 shares of the Common Stock, $.01 par value, of Berry Plastics Corporation. DOCUMENTS INCORPORATED BY REFERENCE None -1- DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS THIS FORM 10-K CONTAINS STATEMENTS THAT CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). THOSE STATEMENTS APPEAR IN A NUMBER OF PLACES IN THIS FORM 10-K AND INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE COMPANY. WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES," "ANTICIPATES," "PLANS," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND MAY INVOLVE RISKS AND UNCERTAINTIES, AND ACTUAL RESULTS MAY DIFFER FROM THOSE IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. VARIOUS ECONOMIC AND COMPETITIVE FACTORS COULD CAUSE ACTUAL RESULTS OR EVENTS TO DIFFER MATERIALLY FROM THOSE DISCUSSED IN SUCH FORWARD-LOOKING STATEMENTS. THE ACCOMPANYING INFORMATION CONTAINED IN THIS FORM 10-K, INCLUDING, WITHOUT LIMITATION, THE INFORMATION SET FORTH UNDER "BUSINESS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," IDENTIFIES IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES, INCLUDING THE COMPANY'S ABILITY TO PASS THROUGH RAW MATERIAL PRICE INCREASES TO ITS CUSTOMERS, ITS ABILITY TO SERVICE DEBT, THE AVAILABILITY OF PLASTIC RESIN, THE IMPACT OF CHANGING ENVIRONMENTAL LAWS AND CHANGES IN THE LEVEL OF THE COMPANY'S CAPITAL INVESTMENT. ALTHOUGH MANAGEMENT BELIEVES IT HAS THE BUSINESS STRATEGY AND RESOURCES NEEDED FOR IMPROVED OPERATIONS, FUTURE REVENUE AND MARGIN TRENDS CANNOT BE RELIABLY PREDICTED. -2- BPC HOLDING CORPORATION BERRY PLASTICS CORPORATION FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 30, 2000 Table of Contents
Page ---- PART I Item 1. Business............................................................................... 4 Item 2. Properties............................................................................. 11 Item 3. Legal Proceedings...................................................................... 12 Item 4. Submission of Matters to a Vote of Security Holders.................................... 12 PART II Item 5. Market for Registrants' Common Equity and Related Stockholder Matters.................. 13 Item 6. Selected Financial Data................................................................ 14 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 15 Item 7A. Quantitative and Qualitative Disclosures About Market Risk ............................ 19 Item 8. Financial Statements and Supplementary Data............................................ 20 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............................................................................. 20 PART III Item 10. Directors and Executive Officers of the Registrants.................................... 21 Item 11. Executive Compensation................................................................. 23 Item 12. Security Ownership of Certain Beneficial Owners and Management......................... 26 Item 13. Certain Relationships and Related Transactions......................................... 27 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K........................ 31
-3- PART I Item 1. BUSINESS General BPC Holding Corporation ("Holding"), is the parent of Berry Plastics Corporation ("Berry" or the "Company"), a leading domestic manufacturer and supplier of plastic packaging products focused on five markets: open-top containers, aerosol overcaps, closures, drink cups and housewares. The Company also has a presence in Europe with production facilities in Norwich, England and Milan, Italy. In order to support these five markets, the Company is organized into three divisions: containers, overcaps and closures, and drink cups and housewares. The Company believes that it is the largest supplier of aerosol overcaps in the world, with sales of over two billion overcaps in fiscal 2000. In addition, based on discussions with customers, sales representatives and external sales brokers, the Company believes that it is a leading manufacturer and supplier of semi-disposable housewares. Within each of its markets, the Company concentrates on manufacturing higher quality value-added products sold to marketers of image-conscious industrial and consumer products that utilize the Company's proprietary molds, superior color matching capabilities and sophisticated multi-color printing capabilities. The Company supplies aerosol overcaps and closures to a wide variety of customers and for a wide variety of commercial and consumer products. Similarly, the Company's open-top containers are used for packaging a broad spectrum of commercial and consumer products. The Company's drink cups are sold to fast food and family-dining restaurants, convenience stores, stadiums, and retail stores. The Company also sells primarily seasonal, semi-disposable housewares and lawn and garden products such as plates, bowls, pitchers and flower pots, to major retail marketers. Berry's customer base is comprised of over 10,000 customers with operations in a widely diversified range of markets. The Company's top ten customers accounted for approximately 15% of fiscal 2000 net sales, with no customer accounting for more than 4% of the Company's net sales in fiscal 2000. The historical allocation of the Company's total net sales among its product categories is as follows:
Fiscal ---------------------------- 2000 1999 1998 ---- ---- ---- Containers ................................. 57% 57% 57% Overcaps and closures ...................... 27 25 21 Drink cups and housewares .................. 16 18 22
The Company believes that it derives a strong competitive position from its state-of-the-art production capabilities, extensive array of proprietary molds in a wide variety of sizes and styles and dedication to service and quality. In the aerosol overcap market, the Company distinguishes itself with superior color matching capabilities, which is of extreme importance to its base of image-conscious consumer products customers, and proprietary packing equipment, which enables the Company to deliver a higher quality product while lowering warehousing and shipping costs. In the container and drink cup markets, an in-house graphic arts department and sophisticated printing and decorating capabilities permit the Company to offer extensive value-added decorating options. The Company believes that it is an industry innovator, particularly in the area of decoration. These market-related strengths, combined with the Company's modern proprietary mold technology, high speed molding capabilities and multiple-plant locations, all contribute to the Company's strong market position. In addition to these marketing and manufacturing strengths, the Company believes that its close working relationships with customers are crucial to maintaining market positions and developing future growth opportunities. The Company employs a direct sales force that is focused on working with customers and the Company's production and product design personnel to develop customized packaging that enhances customer product differentiation and improves product performance. The Company works to develop innovative new products and identify and pursue non-traditional markets that can use existing Company products. -4- History Imperial Plastics, the Company's predecessor, was established in 1967 in Evansville, Indiana. Berry Plastics, Inc. ("Old Berry") was formed in 1983 to purchase substantially all of the assets of Imperial Plastics. In 1988, Old Berry acquired Gilbert Plastics of New Brunswick, New Jersey, a leading manufacturer of aerosol overcaps, and subsequently relocated Gilbert Plastics' production to Old Berry's Evansville, Indiana facility. In 1990, the Company and Holding, the holder of 100% of the outstanding capital stock of the Company, were formed to purchase the assets of Old Berry. In February 1992, the Company acquired substantially all of the assets of the Mammoth Containers division of Genpak Corporation. In March 1995, Berry Sterling Corporation ("Berry Sterling"), a newly formed wholly owned subsidiary of the Company, acquired substantially all of the assets of Sterling Products, Inc., a producer of injection molded plastic drink cups and lids. Management believes that the acquisition gave the Company immediate penetration into a rapidly expanding plastic drink cup market. In December 1995, Berry Tri-Plas Corporation ("Berry Tri-Plas"), a wholly owned subsidiary of the Company, acquired substantially all of the assets of Tri-Plas, Inc., a manufacturer of injection molded containers and lids. Management believes that the acquisition gave the Company an immediate presence in the polypropylene container product line, which is mainly used for food and "hot fill" applications. In January 1997, the Company acquired certain assets of Container Industries, Inc. ("Container Industries"), a manufacturer and marketer of injection molded industrial and pry-off containers for building products and other industrial markets. Also, in January 1997, the Company acquired PackerWare Corporation ("PackerWare"), a manufacturer and marketer of plastic containers, drink cups, housewares, and lawn and garden products (the "PackerWare Acquisition"). Management believes that the PackerWare Acquisition significantly diversified and expanded the Company's position in the drink cup business and gave the Company immediate penetration into the housewares market. The acquisition also provided the Company with a plant located in Lawrence, Kansas, that is well situated to service its markets. In May 1997, Berry Plastics Design Corporation ("Berry Design"), a newly formed wholly owned subsidiary of the Company, acquired substantially all of the assets of Virginia Design Packaging Corp. ("Virginia Design"), a manufacturer and marketer of injection-molded containers used primarily for food packaging. Management believes that the acquisition of these assets has enhanced the Company's position in the food packaging and food service markets. In August 1997, the Company acquired Venture Packaging, Inc. ("Venture Packaging"), a manufacturer and marketer of injection-molded containers used in the food, dairy and various other markets (the "Venture Packaging Acquisition"). Management believes that the Venture Packaging Acquisition strategically assisted the Company in marketing its product line of open-top containers and lids. In July 1998, NIM Holdings ("NIM Holdings"), a newly formed wholly owned subsidiary of the Company, acquired all of the capital stock of Norwich Injection Moulders Limited ("Norwich Moulders") of Norwich, England (the "Berry UK Acquisition"), a manufacturer and marketer of injection-molded overcaps and closures for the European market. In fiscal 1999, the Company changed the name from Norwich Injection Moulders Limited to Berry Plastics UK Limited ("Berry UK"). Management believes that the Berry UK Acquisition provided the Company with a production platform that allows it to better serve its global customers and introduce its other product lines in Europe. In October 1998, Knight Plastics, Inc. ("Knight") acquired substantially all of the assets of the Knight Engineering and Plastics Division of Courtaulds Packaging Inc. (the "Knight Acquisition"), a manufacturer of aerosol overcaps. Management believes that the Knight Acquisition enhanced the Company's overcap business and better positioned the Company to meet the needs of its domestic and multi-national customers. In July 1999, the Company acquired all of the outstanding capital stock of CPI Holding Corporation ("CPI Holding"), the parent company of Cardinal Packaging, Inc. ("Cardinal"), of Streetsboro, Ohio (the "Cardinal Acquisition"), a manufacturer and marketer of open-top containers. Management believes that the Cardinal Acquisition enhanced the Company's open-top container product selection and provided many of its customers with a single packaging supplier. -5- On May 9, 2000, Berry acquired all of the outstanding capital stock of Poly-Seal Corporation ("Poly-Seal"), a manufacturer and marketer of closures, for aggregate consideration of approximately $58.0 million (the "Poly-Seal Acquisition"). The purchase was financed through the issuance by Holding of $25.0 million of 14% preferred stock and warrants and additional borrowings under the Company's senior credit facility. Management believes that the Poly-Seal Acquisition was a major step in expanding the Company's participation in the closures business and provided a U.S. closure production platform in Baltimore, Maryland. On October 4, 2000, Berry, through its Italian subsidiary, CBP Holdings S.r.l., acquired all of the outstanding capital stock of Capsol S.p.a. ("Capsol"), headquartered in Cornate d'Adda, near Milan, Italy and the whole quota capital of a related company, Ociesse S.r.l., for aggregate consideration of approximately $14.0 million (the "Capsol Acquisition"). The purchase was financed through additional borrowings under the Company's senior credit facility. Capsol is a manufacturer and marketer of aerosol overcaps and closures. Management believes that the Capsol Acquisition will expand the Company's participation in the European market for overcaps and closures. Container Market The Company classifies its containers into five product lines: thinwall, pry-off, dairy, polypropylene and industrial. Management believes that the Company is the leading U.S. manufacturer in the thinwall, pry-off and frozen dessert (component of dairy) container markets. The following table describes each of the Company's five product lines.
- ------------------------------------------------------------------------------------------------------------------------------ Product Line Description Sizes Major End Markets ------------ ----------- ----- ----------------- Thinwall Thinwalled, multi-purpose containers 6 oz. to 2 gallons Food, promotional products, toys and a with or without handles and lids wide variety of other uses Pry-off Containers having a tight lid-fit and 4 oz. to 2 gallons Building products, adhesives, pool and requiring an opening device and also other chemicals, and other industrial meet the Consumer Product Safety uses Commission standards for child safety Dairy Thinwall containers in traditional 6 oz. to 5 lbs., Cultured dairy products including dairy market sizes and styles Multi-pack yogurt, cottage cheese, sour cream and dips, and frozen desserts Polypropylene Usually clear containers in round, 6 oz. to 5 lbs. Food, deli, sauces and salads oblong or rectangular shapes Industrial Thick-walled, larger pails designed to 2.5 to 5 gallons Building products, chemicals, paints and accommodate heavy loads other industrial uses - ------------------------------------------------------------------------------------------------------------------------------
The largest end-uses for the Company's containers are food products, building products, chemicals and dairy products. The Company has a diverse customer base for its container lines, and no single container customer exceeded 3% of the Company's total net sales in fiscal 2000. Management believes that the Company offers the broadest product line among U.S.-based injection-molded plastic container manufacturers. The Company's container capacities range from 4 ounces to 5 gallons and are offered in various styles with accompanying lids, bails and handles, as well as a wide array of decorating options. In addition to a complete product line, the Company has sophisticated printing capabilities, an in-house graphic arts department, low cost manufacturing capability with eleven plants strategically located throughout the United States and a dedication to high quality products and customer service. Product engineers work with customers to design and commercialize new containers. In addition, as part of the Company's dedication to customer service, the Company provides filling machine equipment to many of the its customers, primarily in the dairy market, and also provides the services necessary to operate such equipment. The Company believes providing such equipment and services increases customer retention by increasing the customer's production efficiency. -6- The Company seeks to develop niche container products and new applications by taking advantage of the Company's state-of-the-art decorating and graphic arts capabilities and dedication to service and quality. Management believes that these capabilities have given the Company a significant competitive advantage in certain high-margin niche container applications for specialized products. Examples include popcorn containers for new movie promotions and professional and college sporting and entertainment events, where the ability to produce sophisticated and colorful graphics is crucial to the product's success. In order to identify new applications for existing products, the Company relies extensively on its national sales force. Once these opportunities are identified, the Company's sales force interfaces with the Company's product design engineers to satisfy customers' needs. In non-industrial containers, the Company's strongest competitors include Airlite, Sweetheart, Landis, and Polytainers. The Company also produces commodity industrial pails for a market that is dominated by large volume competitors such as Letica, Plastican, NAMPAC and Ropak. The Company does not participate heavily in this large market. Aerosol Overcap Market Based on discussions with our customers, sales representatives and external sales brokers, the Company believes it is the worldwide leader in the production of aerosol overcaps. Approximately 19% of the U.S. market consists of marketers who produce overcaps in-house for their own needs. Management believes that a portion of these in-house producers will increase the outsourcing of their production to high technology, low cost manufacturers, such as the Company, as a means of reducing manufacturing assets and focusing on their core marketing objectives. The Company's aerosol overcaps are used in a wide variety of consumer goods markets including spray paints, household and personal care products, insecticides and numerous other commercial and consumer products. Most U.S. manufacturers and contract fillers of aerosol products are customers of the Company for some portion of their needs. In fiscal 2000, no single overcap customer accounted for more than 2% of the Company's total net sales. Management believes that, over the years, the Company has developed several significant competitive advantages, including a reputation for outstanding quality, short lead-time requirements to fill customer orders, long-standing relationships with major customers, the ability to accurately reproduce over 3,500 colors, proprietary packing technology that minimizes freight cost and warehouse space, high-speed, low-cost molding and decorating capability and a broad product line of proprietary molds. In addition, the Company has received the "Supplier Quality Achievement Award" for five consecutive years (1995-1999) from S.C. Johnson Wax. The Company continues to develop new products in the overcap market, including the "spray-thru" line of aerosol overcaps. Competitors in this market include Dubuque Plastics, Cobra and Transcontainer. In addition, a number of companies, including several of the Company's customers (e.g., S.C. Johnson and Reckitt & Colman), currently produce aerosol overcaps for their own use. Closures Market The Company initiated an acquisition strategy to establish itself as a global provider in the closures market with the Berry UK Acquisition. The Company continued executing the strategy in 2000 with the Poly-Seal Corporation Acquisition and the Capsol Acquisition. Management believes the combined product line offerings to the closures market establish the Company as a leading provider of closure systems globally. The product line offerings include continuous thread, dispensing, tamper evident, and child resistant closures. In addition, the Company is a leading provider of fitments and plugs for medical applications, cups and spouts for liquid laundry detergent, dropper bulb assemblies for medical and personal care applications, and jiggers for mouthwash products. The Company's closures are used in a wide variety of consumer goods markets including health and beauty aids, pharmaceutical, household chemicals, commercial chemicals, and food and dairy. The Company is a major provider of closures to many of the leading companies in these markets. In fiscal 2000, no single closure customer accounted for more than 1% of the Company's total net sales. -7- Management believes the capabilities and expertise the Company has established as a closure provider create significant competitive advantages, including the latest in single and bi-injection technology, molding of thermoplastic and thermoset resins, compression molding of thermoplastic resins, and lining and assembly applications applying the latest in vision inspection technology. In addition, the Company has an in-house package development and design group focused on developing new closure systems to meet both customers proprietary needs and stock systems for the changing closure needs of the markets served. The Company has an outstanding reputation for quality and has received numerous "Supplier Quality Achievement Awards" from customers in different markets. Major competitors in this market include Owens-Illinois, Kerr/Suncoast, Phoenix Closures, Portola, Rexam Closures, and Seaquist Closures. Drink Cup Market Based on discussions with our customers, sales representatives and external sales brokers, the Company believes that it is the leading provider of injection molded plastic drink cups in the U.S. As beverage producers, convenience stores and fast food restaurants increase their marketing efforts for larger sized drinks, the Company believes that the plastic drink cup market will expand because of plastic's desirability over paper for larger drink cups. The Company produces injection-molded plastic cups that range in size from 12 to 64 ounces. Primary markets are fast food and family dining restaurants, convenience stores, stadiums, and retail stores. Virtually all cups are decorated, often as promotional items, and Berry is known in the industry for innovative, state-of-the-art graphics capability. Berry has historically supplied a full line of traditional straight-sided and drive-through style drink cups from 12 to 64 ounces with disposable and reusable lids primarily to fast food and convenience store chains. With the PackerWare Acquisition, the Company expanded its presence while diversifying into the stadium and family dining restaurant markets. The 64 ounce cup, which has been highly successful with convenience stores, is one of the Company's fastest growing drink cups. Major drink cup competitors include Packaging Resources Incorporated, Pescor Plastics and WNA (formerly Cups Illustrated). Housewares Market The housewares market is a multi-billion dollar market. The Company's participation is focused on producing seasonal (spring and summer) semi-disposable plastic housewares and plastic lawn and garden products. Examples of our products include plates, bowls, pitchers, tumblers and outdoor flowerpots. Berry sells virtually all of its products in this market through major national retail marketers and national chain stores, including Wal-Mart and Target. PackerWare is a recognized brand name in these markets and PackerWare branded products are often co-branded by the Company's customers. The Company's position in this market has been to provide a high value to consumers at a relatively modest price, consistent with the key price points of the retail marketers. Berry believes outstanding service and ability to deliver products with timely combination of color and design further enhance its position in this market. This focus allowed PackerWare to be named 1998 Vendor of the Year by Wal-Mart in its Housewares division. Marketing and Sales The Company reaches its large and diversified base of over 10,000 customers primarily through its direct field sales force. These field sales representatives are focused on individual product lines, but are encouraged to sell all Company products to serve the needs of the Company's customers. The Company believes that a direct field sales force is able to better focus on target markets and customers, with the added benefit of permitting the Company to control pricing decisions centrally. The Company also utilizes the services of manufacturing representatives to assist its direct sales force. The Company believes that it produces a high level of customer satisfaction. Highly skilled customer service representatives are located in each of the Company's 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 to satisfy customers' needs through the production of high quality, value-added products and on-time deliveries. -8- Additional marketing and sales techniques include a Graphic Arts department with computer-assisted graphic design capabilities and in-house production of photopolymer printing plates. Berry also has a centralized Color Matching and Materials Blending department that utilizes a computerized spectrophotometer to insure that colors match those requested by customers. Manufacturing General The Company primarily manufactures its products using the plastic injection molding process. The process begins when plastic resin, in the form of small pellets, is fed into an injection molding machine. The injection molding machine then melts the plastic resin and injects it into a multi-cavity steel mold, forcing the plastic resin to take the final shape of the product. At the end of each molding cycle (generally five to 25 seconds), the plastic parts are ejected from the mold into automated handling systems from which they are packed in corrugated containers for further processing or shipment. After molding, the product may be either decorated (printing, silk-screening, labeling) or assembled (e.g., bail handles fitted to containers). The Company believes that its molding and decorating capabilities are among the best in the industry. The Company's overall manufacturing philosophy is to be a low-cost producer by using high speed molding machines, modern multi-cavity hot runner, cold runner and insulated runner molds, extensive material handling automation and sophisticated printing technology. The Company utilizes state-of-the-art robotic packaging processes for large volume products, which enables the Company to deliver a higher quality product (due to reduced breakage) while lowering warehousing and shipping costs (due to more efficient use of space). Each plant has complete tooling maintenance capability to support molding and decorating operations. The Company has historically made, and intends to continue to make, significant capital investments in plant and equipment because of the Company's objectives to grow, improve productivity, and maintain competitive advantages. Product Development The Company utilizes full-time product engineers who use three-dimensional computer-aided-design (CAD) technology to design and modify new products and prepare mold drawings. Engineers use an in-house model shop, which includes a thermoforming machine, to produce prototypes and sample parts. The Company can simulate the molding environment by running unit-cavity prototype molds in a small injection molding machine dedicated to research and development of new products. Production molds are then designed and outsourced for production by various companies in the United States and Canada with whom the Company has extensive experience and established relationships. The Company's engineers oversee the mold-building process from start to finish. Quality Assurance Each plant extensively utilizes Total Quality Management philosophies, including the use of statistical process control and extensive involvement of employees to increase productivity. This teamwork approach to problem-solving increases employee participation and provides necessary training at all levels. The Evansville, Henderson, Iowa Falls, Charlotte, Lawrence, Suffolk, Baltimore, and Milan, plants have been approved for ISO certification, which certifies compliance by a company with a set of shipping, trading and technology standards promulgated by the International Standardization Organization ("ISO"). The Company is actively pursuing ISO certification in all of the remaining facilities. Extensive testing of parts for size, color, strength and material quality using statistical process control (SPC) techniques and sophisticated technology is also an ongoing part of the Company's traditional quality assurance activities. Systems Berry utilizes a fully integrated computer software system at its plants capable of producing complete financial and operational reports. This accounting and control system is easily expandable to add new features and/or locations as the Company grows. In addition, the Company has in place a sophisticated quality assurance system, a bar code based material management system and an integrated manufacturing system. -9- Sources and Availability of Raw Materials The most important raw material purchased by the Company is plastic resin. The Company purchased approximately $94.7 million of resin in fiscal 2000. Approximately 67% of the resin pounds purchased were high density polyethylene ("HDPE"), 11% linear low density polyethylene and 22% polypropylene. The Company's purchasing strategy is to deal with only high-quality, dependable suppliers, such as Dow, Union Carbide, Chevron, Nova, Equistar, and ExxonMobil. Although the Company does not have any supply requirements contracts with its key suppliers, management believes that the Company has maintained outstanding relationships with these key suppliers over the past several years and expects that such relationships will continue into the foreseeable future. Based on its experience, the Company believes that adequate quantities of plastic resins will be available, but no assurances can be given. Employees At the end of fiscal 2000, the Company had approximately 3,100 employees. Poly-Seal Corporation, a wholly owned subsidiary, and the United Steelworkers of America are parties to a collective bargaining agreement which expires on April 21, 2001. As of the end of fiscal 2000, 331 employees of Poly-Seal Corporation were covered by this agreement. Patents and Trademarks The Company has numerous patents and trademarks with respect to its products. None of the patents or trademarks are considered by management to be material to the business of the Company. Environmental Matters and Government Regulation The past and present operations of the Company and the past and present ownership and operations of real property by the Company are subject to extensive and changing federal, state and local environmental laws and regulations pertaining to the discharge of materials into the environment, the handling and disposition of wastes or otherwise relating to the protection of the environment. The Company believes that it is in substantial compliance with applicable environmental laws and regulations. However, the Company cannot predict with any certainty that it will not in the future incur liability under environmental statutes and regulations with respect to non-compliance with environmental laws, contamination of sites formerly or currently owned or operated by the Company (including contamination caused by prior owners and operators of such sites) or the off-site disposal of hazardous substances. Like any manufacturer, the Company is subject to the possibility that it may receive notices of potential liability, pursuant to CERCLA or analogous state laws, for cleanup costs associated with offsite waste recycling or disposal facilities at which wastes associated with its operations have allegedly come to be located. Liability under CERCLA is strict, retroactive and joint and several. No such notices are currently pending. The Food and Drug Administration (the "FDA") regulates the material content of direct-contact food containers and packages, including certain thinwall containers manufactured by the Company. The Company uses approved resins and pigments in its direct contact food products and believes it is in material compliance with all such applicable FDA regulations. -10- The plastics industry, including the Company, 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 addition, various consumer and special interest groups have lobbied from time to time for the implementation of these and other similar measures. The principal resin used in the Company's products, HDPE, is recyclable, and, accordingly, the Company believes that the legislation promulgated to date and such initiatives to date have not had a material adverse effect on the Company. There can be no assurance that any such future legislative or regulatory efforts or future initiatives would not have a material adverse effect on the Company. On January 1, 1995, legislation in Oregon, California and Wisconsin went into effect requiring products packaged in rigid plastic containers to comply with standards intended to encourage recycling and increased use of recycled materials. Although the regulations vary by state, the principal requirement is the use of post consumer regrind ("PCR") as an ingredient in containers sold for non-food uses. Additionally, Oregon and California allow lightweighting of the container or concentrating the product sold in the container as options for compliance. Oregon and California provide for an exemption from all such regulations if statewide recycling reaches or exceeds 25% of rigid plastic containers. In September 1996, California passed a new bill exempting food and cosmetics containers from the foregoing requirement. However, non-food containers are still required to comply. In December 1996, the Department of Environmental Quality estimated that Oregon had met its recycling goal of 25% for 1997 (based on 1996 data), and accordingly, was in compliance for the 1997 calendar year. However, in January 1998, California formally approved a 23.2% recycling rate for the state during 1996, and since this falls below the required 25% rate for exemption of non-food containers, the state can now begin enforcing its recycled content mandate on any non-food plastic containers from 8 oz. to 5 gallons. The Company, in order to facilitate individual customer compliance with these regulations, is providing customers the option of purchasing containers with reduced weight. Item 2. PROPERTIES The following table sets forth the Company's principal facilities:
Location Acres Square Footage Use Owned/Leased -------- ----- -------------- --- ------------ Evansville, IN 18.7 409,000 Headquarters and manufacturing Owned Evansville, IN 2.8 123,000 Manufacturing Leased Henderson, NV 12.3 157,000 Manufacturing Owned Iowa Falls, IA 14.0 96,000 Manufacturing Owned Charlotte, NC 37.3 146,000 Manufacturing Owned Lawrence, KS 19.3 423,000 Manufacturing Owned Suffolk, VA 14.0 96,000 Manufacturing Owned Monroeville, OH 34.7 152,000 Manufacturing Owned Norwich, England 5.0 84,000 Manufacturing Owned Woodstock, IL 11.7 169,000 Manufacturing Owned Streetsboro, OH 12.0 143,000 Manufacturing Owned Baltimore, MD 9.9 241,000 Manufacturing Owned Milan, Italy 11.6 104,000 Manufacturing Leased
The Company believes that its property and equipment are well-maintained, in good operating condition and adequate for its present needs. -11- Item 3. LEGAL PROCEEDINGS 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 condition. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS By Written Consent in Lieu of a Meeting of Stockholders of Holding dated as of December 30, 2000, a majority of the stockholders approved an increase in the size of Holding's stock option plan to permit the issuance of additional stock options to employees. The number of shares of Class B Nonvoting Common Stock of Holding reserved for issuance under the Amended and Restated BPC Holding Corporation 1996 Stock Option Plan was increased by 15,000 shares, to a total of 76,620 shares. -12- PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS There is no public trading market for any class of common stock of Holding or the Company. With respect to the capital stock of Holding, as of March 9, 2001, there were three holders of the Class A Voting Common Stock, three holders of the Class A Nonvoting Common Stock, 41 holders of the Class B Voting Common Stock, 103 holders of the Class B Nonvoting Common Stock and 40 holders of the Class C Nonvoting Common Stock. All of the issued and outstanding common stock of the Company is held by Holding. On April 21, 1994, the Company paid a $50.0 million dividend, which was financed through the issuance of $100.0 million aggregate principal amount of 12.25% Berry Plastics Corporation Senior Subordinated Notes, due 2004, to Holding, the holder of all of its common stock. Holding utilized the $50.0 million dividend to make a distribution to the holders of its common stock and holders of certain other equity interests. Other than the payment of the $50.0 million distribution described above, Holding has not paid cash dividends on its capital stock. Because Holding intends to retain any earnings to provide funds for the operation and expansion of the Company's business and to repay outstanding indebtedness, Holding does not intend to pay cash dividends on its common stock in the foreseeable future. Furthermore, as a holding company with no independent operations, the ability of Holding to pay cash dividends will be dependent on the receipt of dividends or other payments from the Company. Under the terms of the Indenture dated as of April 21, 1994 (the "1994 Indenture"), among the Company, Holding, Berry Iowa Corporation, Berry Tri-Plas and United States Trust Company of New York, as Trustee ("U.S. Trust"), the Indenture dated June 18, 1996 (the "1996 Indenture"), between Holding and First Trust of New York, National Association, as Trustee, and also the Indenture dated August 24, 1998 (the "1998 Indenture") and the Indenture dated July 6, 1999 (the "1999 Indenture"), among Holding, all of its direct and indirect subsidiaries and U.S. Trust, Holding and the Company are not permitted to pay any dividends on their common stock for the foreseeable future. In addition, the Company's senior credit facility contains covenants that, among other things, restricts the payment of dividends by the Company. In addition, Delaware law limits Holding's ability to pay dividends from current or historical earnings or profits or capital surplus. Any determination to pay cash dividends on common stock of the Company or Holding in the future will be at the discretion of the Board of Directors of the Company and Holding, respectively. -13- Item 6. SELECTED FINANCIAL DATA The following selected financial data are derived from the consolidated financial statements of Holding which have been audited by Ernst & Young LLP, independent auditors. The data should be read in connection with the consolidated financial statements, related notes and other financial information included herein. Holding's fiscal year is a 52/53 week period ending generally on the Saturday closest to December 31. All references herein to "2000," "1999," "1998," "1997," and "1996," relate to the fiscal years ended December 30, 2000, January 1, 2000, January 2, 1999, December 27, 1997, and December 28, 1996, respectively.
BPC Holding Corporation Fiscal --------------------------------------------------------------------- 2000 1999 1998 1997 1996 --------- --------- --------- --------- --------- (in thousands of dollars) Statement of Operations Data: Net sales $ 408,088 $ 328,834 $ 271,830 $ 226,953 $ 151,058 Cost of goods sold 312,119 241,067 199,227 180,249 110,110 --------- --------- --------- --------- --------- Gross margin 95,969 87,767 72,603 46,704 40,948 Operating expenses (a) 65,862 54,118 44,001 30,505 23,679 --------- --------- --------- --------- --------- Operating income 30,107 33,649 28,602 16,199 17,269 Other expenses (b) 877 1,416 1,865 226 302 Interest expense, net (c) 51,457 40,817 34,556 30,246 20,075 --------- --------- --------- --------- --------- Loss before income taxes and extraordinary item (22,227) (8,584) (7,819) (14,273) (3,108) Income taxes (benefit) (142) 554 (249) 138 239 --------- --------- --------- --------- --------- Loss before extraordinary item (22,085) (9,138) (7,570) (14,411) (3,347) Extraordinary item, net of tax (d) 1,022 -- -- -- -- --------- --------- --------- --------- --------- Net loss (23,107) (9,138) (7,570) (14,411) (3,347) Preferred stock dividends 6,655 3,776 3,551 2,558 1,116 Amortization of preferred stock discount 768 292 292 74 -- --------- --------- --------- --------- --------- Net loss attributable to common shareholders $ (30,530) $ (13,206) $ (11,413) $ (17,043) $ (4,463) ========= ========= ========= ========= ========= Balance Sheet Data (at end of year): Working capital $ 20,470 $ 10,527 $ 4,762 $ 20,863 $ 15,910 Fixed assets 179,804 146,792 120,005 108,218 55,664 Total assets 413,122 340,807 255,317 239,444 145,798 Total debt 468,806 403,989 323,298 306,335 216,046 Stockholders' equity (deficit) (137,997) (133,471) (120,357) (108,975) (97,550) Other Data: Depreciation and amortization (e) 42,148 $ 31,795 $ 24,830 $ 19,026 $ 11,331 Capital expenditures 31,530 30,738 22,595 16,774 13,581
- ---------- (a) Operating expenses include business start-up and machine integration expenses of $2,237 related to recent acquisitions, litigation expenses of $700 related to a drink cup patent, and plant consolidation expenses of $3,702 related to the shutdown and reorganization of facilities during fiscal 2000; business start-up and machine integration expenses of $3,647 related to recent acquisitions and plant consolidation expenses of $1,501 related to the shutdown and reorganization of facilities during fiscal 1999; business start-up and machine integration expenses of $1,272 related to the businesses acquired in 1997, plant consolidation expenses of $2,370 and $191 related to the shutdown of the Anderson, South Carolina and Reno, Nevada facilities, and start-up expenses of $109 and $142 related to the Norwich and Knight Acquisitions, respectively, during fiscal 1998; business start-up and machine integration expenses of $3,255 related to the businesses acquired in 1997, plant consolidation expenses of $480 and $368 related to the shutdown of the Winchester, Virginia and Reno, Nevada facilities, respectively, during fiscal 1997; and one-time compensation expense of $2,762, Tri-Plas Acquisition start-up expenses of $671 and $907 for costs related to the consolidation of the Winchester, Virginia facility during fiscal 1996. (b) Other expenses consist of loss on disposal of property and equipment for the respective years. (c) Includes non-cash interest expense of $18,047, $15,567, $14,824, $13,065, and $7,256, in fiscal 2000, 1999, 1998, 1997, and 1996, respectively. (d) Extraordinary item relates to deferred financing and origination fees written off as a result of amending the senior credit facility. (e) Depreciation and amortization excludes non-cash amortization of deferred financing and origination fees and debt premium/discount amortization which are included in interest expense. -14- Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless the context discloses otherwise, the "Company" as used in this Management's Discussion and Analysis of Financial Condition and Results of Operations shall include Holding and its subsidiaries on a consolidated basis. The following discussion should be read in conjunction with the consolidated financial statements of Holding and its subsidiaries and the accompanying notes thereto, which information is included elsewhere herein. The Company is highly leveraged. The high degree of leverage could have important consequences, including, but not limited to, the following: (i) a substantial portion of Berry's cash flow from operations must be dedicated to the payment of principal and interest on its indebtedness, thereby reducing the funds available to Berry for other purposes; (ii) Berry's ability to obtain additional debt financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes may be impaired; (iii) certain of Berry's borrowings will be at variable rates of interest, which will expose Berry to the risk of higher interest rates; (iv) the indebtedness outstanding under the senior credit facility is secured by substantially all of the assets of Berry; (v) Berry is substantially more leveraged than certain of its competitors, which may place Berry at a competitive disadvantage, particularly in light of its acquisition strategy; and (vi) Berry's degree of leverage may hinder its ability to adjust rapidly to changing market conditions and could make it more vulnerable in the event of a downturn in general economic conditions or its business. Consolidated earnings have been insufficient to cover fixed charges by $20.5 million, $7.1 million, and $7.0 million for fiscal years 2000, 1999, and 1998, respectively. In addition, Holding has experienced consolidated net losses during each of such periods principally as a result of expenses and charges incurred in connection with acquisitions by Berry. These net losses were $23.1 million, $9.1 million, and $7.6 million for fiscal 2000, 1999, and 1998. Holding expects that it will continue to experience consolidated net losses for the foreseeable future. Year Ended December 30, 2000 Compared to Year Ended January 1, 2000 Net Sales. Net sales increased 24% to $408.1 million in 2000, up $79.3 million from $328.8 million in 1999, including an approximate 5% increase in net selling price due to increased raw material costs. Overcap and closure net sales increased $31.2 million, primarily due to the Poly-Seal Acquisition and Capsol Acquisition which provided combined 2000 net sales of $32.3 million. Container sales increased $42.5 million, primarily due to the Cardinal Acquisition and increased selling prices, despite a large custom program in 1999 that did not reoccur in 2000. Net sales in the drink cup and housewares segment increased $5.6 million in 2000 primarily as a result of a significant new product and strong retail demand in housewares. Gross Margin. Gross margin increased $8.2 million or 9% from $87.8 million (27% of net sales) in 1999 to $96.0 million (24% of net sales) in 2000. This increase of 9% includes the combined impact of the added Poly-Seal, Capsol, and Cardinal sales volume, acquisition integration, and productivity improvement initiatives offset partially by the cyclical impact of higher raw material costs. The cost of the Company's primary raw material, resin, increased approximately 36% in 2000 when compared to 1999. A major focus continues to be the consolidation of products and business of recent acquisitions to the most efficient tooling, providing customers with improved products and customer service. As part of the integration, the Company closed its York, Pennsylvania facility and removed remaining production from its Minneapolis, Minnesota facility (acquired in the Cardinal Acquisition) in the fourth quarter of 2000. Additionally, the Company closed its Arlington Heights, Illinois facility (acquired in the Knight Acquisition) in the first quarter of 1999 and its Ontario, California facility (acquired in the Cardinal Acquisition) in the third quarter of 1999. In addition, the Company made two configuration changes that were completed in the fourth quarter of 1999 with the Minneapolis, Minnesota and Iowa Falls, Iowa locations closing their molding operations. The business from these locations are distributed throughout Berry's facilities. Also, significant productivity improvements were made during the year, including the addition of state-of-the-art injection molding equipment, molds and printing equipment at several of the Company's facilities. -15- Operating Expenses. Operating expenses during 2000 were $65.9 million (16% of net sales), compared with $54.1 million (16% of net sales) for 1999. Selling expenses increased $4.2 million, almost all as a result of acquired businesses. General and administrative expenses increased $2.4 million in 2000 primarily as a result of recent acquisitions, but was partially offset by decreased accrued bonus expenses. Research and development costs increased $0.3 million to $2.6 million in 2000 primarily as a result of increased new product requests from customers and productivity improvement initiatives. Intangible asset amortization increased from $7.2 million in 1999 to $10.6 million for 2000, primarily a result of the amortization of goodwill ascribed to acquired companies in 1999 and 2000. Other expenses were $6.6 million for 2000 compared to $5.1 million for 1999. Other expenses in 2000 include business start-up and machine integration expenses of $2.2 million related to recent acquisitions, plant consolidation expenses of $3.7 million related to the shutdown and reorganization of facilities, and $0.7 million of litigation expenses related to a drink cup patent. Other expenses in 1999 include business start-up and machine integration expenses of $3.6 million related to recent acquisitions and plant consolidation expenses of $1.5 million related to the shutdown and reorganization of facilities. Interest Expense, Net. Net interest expense, including amortization of deferred financing costs for 2000, was $51.5 million (13% of net sales) compared to $40.8 million (12% of net sales) in 1999, an increase of $10.7 million. This increase is attributed to interest on borrowings related to the acquired businesses in 1999 and 2000, but was offset partially by principal reductions. Cash interest paid in 2000 was $32.8 million as compared to $29.8 million for 1999. Income Taxes. During fiscal 2000, the Company recorded a benefit of $0.1 million for income taxes compared to an expense of $0.6 million for fiscal 1999. The Company continues to operate in a net operating loss carryforward position for federal income tax purposes. Extraordinary Item. As a result of amending the Company's senior credit facility, $1.0 million of deferred financing and origination fees related to the facility have been charged to expense in 2000 as an extraordinary item. Net Loss. The Company recorded a net loss of $23.1 million in 2000 compared to a $9.1 million net loss in 1999 for the reasons stated above. Year Ended January 1, 2000 Compared to Year Ended January 2, 1999 Net Sales. Net sales increased 21% to $328.8 million in 1999, up $57.0 million from $271.8 million in 1998, including an approximate 1% increase in net selling price due to increased raw material costs. Plastic packaging product net sales increased $53.2 million in fiscal 1999. Within this segment, aerosol overcap net sales increased $17.3 million primarily due to the Knight Acquisition. In addition, container sales increased $27.5 million, primarily due to the Cardinal Acquisition and continued market strength of base products. Net sales in the drink cup product line decreased $6.2 million in 1999 primarily as a result of a large promotion in 1998 and increased competition in the drink cup market. Other plastic packaging product lines, including closures and custom molded products, increased $14.5 million due to a large custom program in 1999 and the acquisition of Berry UK in 1998. Housewares net sales increased $3.9 million or 18% in 1999 due primarily to new products and strong consumer demand. Gross Margin. Gross margin increased $15.2 million or 21% from $72.6 million (27% of net sales) in 1998 to $87.8 million (27% of net sales) in 1999. This increase of 21% includes the combined impact of the added Cardinal, Berry UK, and Knight sales volume, acquisition integration, and productivity improvement initiatives offset partially by higher raw material costs. A major focus continues to be the consolidation of products and business of recent acquisitions to the most efficient tooling, providing customers with improved products and customer service. As part of the integration, the Company closed its Arlington Heights, Illinois facility (acquired in the Knight Acquisition) in the first quarter of 1999 and its Ontario, California facility (acquired in the Cardinal Acquisition) in the third quarter of 1999. In addition, the Company made two configuration changes that were completed in the fourth quarter of 1999 with the Minneapolis, Minnesota (acquired in the Cardinal Acquisition) and Iowa Falls, Iowa locations closing their molding operations. The business from these locations are distributed throughout Berry's facilities. Also, significant productivity improvements were made during the year, including the addition of state-of-the-art injection molding equipment, molds and printing equipment at several of the Company's facilities. -16- Operating Expenses. Operating expenses during 1999 were $54.1 million (16% of net sales), compared with $44.0 million (16% of net sales) for 1998. Selling expenses increased $2.6 million, almost all a result of expanded sales coverage and recent acquisitions. General and administrative expenses increased $2.7 million in 1999 primarily as a result of recent acquisitions. Research and development costs increased $0.6 million to $2.3 million in 1999 primarily as a result of increased new product requests from customers and productivity improvement initiatives. Intangible amortization increased from $4.1 million in 1998 to $7.2 million for 1999, primarily a result of the amortization of goodwill ascribed to acquired companies in 1998 and 1999. Other expenses were $5.1 million for 1999 compared to $4.1 million for 1998. Other expenses in 1999 include business start-up and machine integration expenses of $3.6 million related to recent acquisitions and plant consolidation expenses of $1.5 million related to the shutdown and reorganization of facilities. Other expenses in 1998 include business start-up and machine integration expenses of $1.5 million related to recent acquisitions and plant consolidation expenses of $2.6 million related to the shutdown of facilities. Interest Expense, Net. Net interest expense, including amortization of deferred financing costs for 1999, was $40.8 million (12% of net sales) compared to $34.6 million (13% of net sales) in 1998, an increase of $6.2 million. This increase is attributed to interest on borrowings related to the acquired businesses in 1998 and 1999 offset partially by principal reductions. Cash interest paid in 1999 was $29.8 million as compared to $33.2 million for 1998. Income Taxes. During fiscal 1999, the Company recorded an expense of $0.6 million for income taxes compared to a benefit of $0.2 million for fiscal 1998. The Company continues to operate in a net operating loss carryforward position for federal income tax purposes. Net Loss. The Company recorded a net loss of $9.1 million in 1999 compared to a $7.6 million net loss in 1998 for the reasons stated above. Income Tax Matters Holding has unused operating loss carryforwards of $44.0 million for federal income tax purposes which begin to expire in 2010. Alternative minimum tax credit carryforwards of approximately $3.1 million are available to Holding indefinitely to reduce future years' federal income taxes. Liquidity and Capital Resources The Company has a financing and security agreement (the "Financing Agreement") with a syndicate of lenders led by Bank of America for a senior secured credit facility (the "Credit Facility"). As of December 30, 2000, the Credit Facility provides the Company with (i) a $70.0 million revolving line of credit ("US Revolver"), subject to a borrowing base formula, (ii) a $2.4 million (using the December 30, 2000 exchange rate) revolving line of credit denominated in British Sterling in the U.K. ("UK Revolver"), subject to a separate borrowing base formula, (iii) a $72.1 million term loan facility, (iv) a $3.5 million (using the December 30, 2000 exchange rate) term loan facility denominated in British Sterling in the U.K. ("UK Term Loan") and (v) a $4.2 million standby letter of credit facility to support the Company's and its subsidiaries' obligations under the Nevada Bonds. At December 30, 2000, the Company had unused borrowing capacity under the Credit Facility's revolving line of credit of approximately $25.1 million. The indebtedness under the Credit Facility is guaranteed by Holding and all of its subsidiaries (other than its subsidiaries in Italy). The obligations of the Company and the subsidiaries under the Credit Facility and the guarantees thereof are secured by substantially all of the assets of such entities. CBP Holdings, S.r.l. has a revolving credit facility (the "Italy Revolver") from Bank of America for $12.7 million (using the December 30, 2000 exchange rate) denominated in Euros. Bank of America also extends working capital financing (the "Italy Working Capital Line") of up to $1.5 million (using the December 30, 2000 exchange rate) denominated in Euros. The full amount available under the Italy Revolver and the Italy Working Capital Line are applied to reduce amounts available under the US Revolver, as does the outstanding balance under the UK Revolver. -17- The Credit Facility requires the Company to comply with specified financial ratios and tests, including a minimum Tangible Capital Funds (as defined in the Credit Facility) test, maximum leverage ratio, interest coverage ratio, debt service coverage ratio and a fixed charge coverage ratio. The requirements of these tests may change on a quarterly basis. At December 30, 2000, the Credit Facility required the Company to have Tangible Capital Funds of not less than $76.6 million and a maximum leverage ratio of 4.25. In addition, the interest, debt service, and fixed charge coverage ratios could not be less than 2.0, 1.5, and 1.0, respectively. At December 30, 2000, the last quarterly test date, the Company was in compliance with all of the financial covenants tested on such date. The Credit Facility matures on January 21, 2002 unless previously terminated by the Company or by the lenders upon an Event of Default as defined in the Financing Agreement. The term loan facility requires periodic payments, varying in amount, through the maturity of the facility. Interest on borrowings under the Credit Facility is based on either (i) the lender's base rate (which is the higher of the lender's prime rate and the federal funds rate plus 0.5%) plus an applicable margin of 0.0% to 0.75% or (ii) eurodollar LIBOR (adjusted for reserves) plus an applicable margin of 2.0% to 2.75%, at the Company's option (8.9% at December 30, 2000 and 8.1% at January 1, 2000). Following receipt of the quarterly financial statements, the agent under the Credit Facility shall change the applicable interest rate margin on loans (other than under the UK Revolver and UK Term Loan) once per quarter to a specified margin determined by the ratio of funded debt to EBITDA of the Company and its subsidiaries. Notwithstanding the foregoing, interest on borrowings under the UK Revolver and the UK Term Loan is based on sterling LIBOR (adjusted for reserves) plus 2.5%. Interest on borrowings under the Italy Revolver and the Italy Working Capital Line is based on EURIBOR plus 2.0%. On July 17, 2000, Berry obtained a second lien senior credit facility from General Electric Capital Corporation for an aggregate principal amount of $25.0 million (the "Second Lien Senior Facility"), resulting in net proceeds of $24.3 million after fees and expenses. The proceeds were utilized to reduce amounts then outstanding under the US Revolver. The indebtedness is guaranteed by Holding and all of its subsidiaries (other than its subsidiaries in Italy). The Second Lien Senior Facility is secured by a second priority lien on substantially the same collateral as the collateral for the Credit Facility. The $25.0 million principal amount is due upon the Second Lien Senior Facility's maturity on July 1, 2002. Interest is based on either (i) the lender's base rate (which is the higher of the prime rate and the federal funds rate plus 0.5%) plus an applicable margin of 3.0% or (ii) eurodollar LIBOR (adjusted for reserves) plus an applicable margin of 4.5%, at the Company's option (11.1% at December 30, 2000). The covenants under the Second Lien Senior Facility are substantially the same as those in the Credit Facility. The 1994 Indenture, the 1996 Indenture, the 1998 Indenture, and 1999 Indenture restrict the Company's ability to incur additional debt and contain other provisions which could limit the liquidity of the Company. At December 30, 2000, the Company had unused borrowing capacity under the Credit Facility's borrowing base of $25.1 million, which is not considered additional indebtedness under the 1994 Indenture, 1996 Indenture, 1998 Indenture or 1999 Indenture. Any additional indebtedness above the borrowing base requires approval from the Credit Facility's lenders. The 1994 Indenture, 1998 Indenture, and 1999 Indenture restrict, and the Credit Facility prohibits, Berry's ability to pay any dividend or make any distribution of funds to Holding to satisfy interest and other obligations on Holding's 12.50% Series B Senior Secured Notes due 2006 (the "1996 Notes"). Interest on the 1996 Notes is payable semi-annually on June 15 and December 15 of each year. However, from December 15, 1999 until June 15, 2001, Holding may, at its option, pay interest, at an increased rate of 0.75% per annum, in additional 1996 Notes valued at 100% of the principal amount thereof. Holding has issued an additional approximately $22.3 million aggregate principal amount of 1996 Notes in satisfaction of its interest obligation. Holding's ability to pay principal and interest in cash on the 1996 Notes and Berry's ability to pay principal and interest on the notes issued under the 1994 Indenture, 1998 Indenture, and 1999 Indenture will depend on Berry's financial and operating performance, which in turn are subject to prevailing economic conditions and to certain financial, business and other factors beyond its control. Based on historical operating results, management believes that sufficient monies are available from Berry under the tax sharing agreement to enable Holding to make the December 2001 cash interest payment on the 1996 Notes, subject to Berry's ability to generate sufficient operating results to comply with covenants under the senior credit facility. However, if Berry cannot generate sufficient cash flow from operations to meet its obligations, then the Company may be forced to take actions such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing its indebtedness, or seeking additional equity capital. There is no assurance that any of these actions could be effected on satisfactory terms, if at all. -18- Net cash provided by operating activities was $36.1 million in 2000 as compared to $36.0 million in 1999. Net cash provided by operating activities was $34.1 million in 1998. The increase in 1999 was primarily the result of improved operating performance as the Company's net loss plus non-cash expenses improved $5.8 million. Capital expenditures in 2000 were $31.5 million, an increase of $0.8 million from $30.7 million in 1999. Capital expenditures totaled $22.6 million in 1998. Capital expenditures in 2000 included investments of $7.6 million for facility renovations, production systems and offices necessary to support production operating levels throughout the Company, $13.6 million for molds, $7.5 million for molding and printing machines, and $2.8 million for accessory equipment and systems. Included in 2000 capital expenditures was $19.4 million for major projects, including building expansions and new equipment for future growth. The capital expenditure budget for 2001 is expected to be $30.1 million. Net cash provided by financing activities was $72.0 million in 2000 as compared to $71.1 million in 1999. Net cash provided by financing activities was $71.1 million in 1999 as compared to $17.6 million in 1998. The $53.5 million increase can be attributed primarily to the 1999 Notes issuance of $75.0 million to finance the Cardinal Acquisition. Increased working capital needs occur whenever the Company experiences strong incremental demand or a significant rise in the cost of raw material, particularly plastic resin. However, the Company anticipates that its cash interest, working capital and capital expenditure requirements for 2001 will be satisfied through a combination of funds generated from operating activities and cash on hand, together with funds available under the Credit Facility. Management bases such belief on historical experience and the substantial funds available under the Credit Facility. However, the Company cannot predict its future results of operations. At December 30, 2000, the Company's cash balance was $2.1 million, and Berry had unused borrowing capacity under the Credit Facility's borrowing base of $25.1 million. General Economic Conditions and Inflation The Company faces various economic risks ranging from an economic downturn adversely impacting the Company's primary markets to market fluctuations in plastic resin prices. In the short-term, rapid increases in resin cost may not be fully recovered through price increases to customers. Also, shortages of raw materials may occur from time to time. In the long-term, however, raw material availability and price changes generally do not have a material adverse effect on gross margin. Cost changes generally are passed through to customers. In addition, the Company believes that its sensitivity to economic downturns in its primary markets is less significant due to its diverse customer base and its ability to provide a wide array of products to numerous end markets. The Company believes that it is not affected by inflation except to the extent that the economy in general is thereby affected. Should inflationary pressures drive costs higher, the Company believes that general industry competitive price increases would sustain operating results, although there can be no assurance that this will be the case. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. -19- Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Financial Statements Report of Independent Auditors F-1 Consolidated Balance Sheets at December 30, 2000 and January 1, 2000 F-2 Consolidated Statements of Operations for the years ended December 30, 2000, January 1, 2000, and January 2, 1999 F-4 Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the years ended December 30, 2000, January 1, 2000, and January 2, 1999 F-5 Consolidated Statements of Cash Flows for the years ended December 30, 2000, January 1, 2000, and January 2, 1999 F-6 Notes to Consolidated Financial Statements F-7 Index to Financial Statement Schedules II. Valuation and Qualifying Accounts S-1
All other schedules have been omitted because they are not applicable or not required or because the required information is included in the consolidated financial statements or notes thereto. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. -20- PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth certain information with respect to the executive officers, directors and certain key personnel of Holding and its subsidiaries:
Name Age Title Entity ---- --- ----- ------ Roberto Buaron(1)(4)..................... 54 Chairman and Director Company and Holding Martin R. Imbler(1)(4)................... 53 President, Chief Executive Officer Company and Holding and Director Ira G. Boots............................. 46 Executive Vice President, Chief Company Operating Officer, and Director James M. Kratochvil...................... 44 Executive Vice President, Chief Company and Holding Financial Officer, Treasurer and Secretary R. Brent Beeler.......................... 48 Executive Vice President and Company General Manager - Containers William J. Herdrich...................... 51 Executive Vice President and Company General Manager - Overcaps and Closures Bruce J. Sims............................ 51 Executive Vice President and Company General Manager - Drink Cups and Housewares Lawrence G. Graev(2)(3).................. 56 Director Company and Holding Joseph S. Levy(2)(3)..................... 32 Vice President, Assistant Secretary Company and Holding and Director Donald J. Hofmann, Jr.(1)(2)(3)(4)....... 43 Director Company and Holding Mathew J. Lori........................... 37 Director Company and Holding David M. Clarke.......................... 50 Director Company and Holding
- ---------- (1) Member of the Stock Option Committee of Holding. (2) Member of the Audit Committee of Holding. (3) Member of the Audit Committee of the Company. (4) Member of the Compensation Committee of the Company. -21- Roberto Buaron has been Chairman and a Director of the Company since it was organized in December 1990. He has also served as Chairman and a Director of Holding since 1990. He is the Chairman and Chief Executive Officer of First Atlantic Capital, Ltd. ("First Atlantic"), which he founded in 1989. From 1987 to 1989, he was an Executive Vice President with Overseas Partners, Inc., an investment management firm. From 1983 to 1986 he was First Vice President of Smith Barney, Inc., and a General Partner of First Century Partnership, its venture capital affiliate. Prior to 1983, he was a Principal at McKinsey & Company. Martin R. Imbler has been President, Chief Executive Officer and a Director of the Company since January 1991. He has also served as a Director of Holding since January 1991, and as President of Holding since May 1996. From June 1987 to December 1990, he was President and Chief Executive Officer of Risdon Corporation, a cosmetic packaging company. Mr. Imbler was employed by American Can Company from 1981 to 1987, as Vice President and General Manager of the East/South Region Food and General Line Packaging business from 1985 to 1987 and as Vice President, Marketing, from 1981 to 1985. Ira G. Boots has been Executive Vice President and a Director of the Company and has been Chief Operating Officer since April 1992 and August 2000, respectively. Prior to that, Mr. Boots was Vice President of Operations, Engineering and Product Development of the Company from December 1990 to April 1992. Mr. Boots was employed by Old Berry from 1984 to December 1990 as Vice President, Operations. James M. Kratochvil has been Executive Vice President, Chief Financial Officer, Secretary and Treasurer of the Company since December 1997. He formerly served as Vice President, Chief Financial Officer and Secretary of the Company since 1991, and as Treasurer of the Company since May 1996. He was also promoted to Executive Vice President, Chief Financial Officer and Secretary of Holding in December 1997. He formerly served as Vice President, Chief Financial Officer and Secretary of Holding since 1991. Mr. Kratochvil was employed by Old Berry from 1985 to 1991 as Controller. R. Brent Beeler has been Executive Vice President and General Manager - Containers of the Company since August 2000. Prior to that, Mr. Beeler was Executive Vice President, Sales and Marketing of the Company since February 1996 and Vice President, Sales and Marketing of the Company since December 1990. Mr. Beeler was employed by Old Berry from October 1988 to December 1990 as Vice President, Sales and Marketing. William J. Herdrich has been Executive Vice President and General Manager - - Aerosol Overcaps and Closures of the Company since August 2000. From May 2000 to August 2000, Mr. Herdrich was a consultant to the Company. From April 1994 to May 2000, Mr. Herdrich was President, Executive Vice President and General Manager of Poly-Seal Corporation. Mr. Herdrich was employed by Seaquist Closures from 1990 to April 1994 as Executive Vice President. Bruce J. Sims has been Executive Vice President and General Manager - Drink Cups and Housewares of the Company since August 2000. He formerly served as Executive Vice President, Sales and Marketing, Housewares of the Company since January 1997. Prior to the PackerWare Acquisition, Mr. Sims served as President of PackerWare from March 1996 to January 1997 and as Vice President from October 1994 to March 1996. From January 1990 to October 1994 he was Vice President of the Miner Container Corporation, a national injection molder. Lawrence G. Graev has been a Director of the Company and Holding since August 1995. Mr. Graev is a partner in the law firm of O'Sullivan Graev & Karabell, LLP of New York, where he has been a partner since 1974. Mr. Graev is also a Director of First Atlantic. Joseph S. Levy has been Vice President and Assistant Secretary of the Company and Holding since April 1995. Mr. Levy has been a Director of Holding and the Company since April 1998. Mr. Levy has been Principal of First Atlantic since December 1999, and prior to that Mr. Levy had been a Vice President. Donald J. Hofmann, Jr. has been a Director of Holding and the Company since June 1996. Mr. Hofmann has been a Partner of J.P. Morgan Partners, LLC (formerly Chase Capital Partners), a global private equity organization with over $20 billion under management, since September 1992. J.P. Morgan Partners provides equity and mezzanine debt financing for management buyouts and recapitalizations, growth equity and venture capital. Mr. Hofmann is also a director of Advanced Accessory Systems, LLC, United Auto Group and Pliant Corporation. -22- Mathew J. Lori has been a Director of Holding and the Company since October 1996. Mr. Lori has been a Principal with J.P. Morgan Partners, LLC (formerly Chase Capital Partners) since January 1998, and prior to that, Mr. Lori had been an Associate since April 1996. From September 1993 to March 1996, he was an Associate in the Merchant Banking Group of The Chase Manhattan Bank, N.A. David M. Clarke has been a Director of Holding and the Company since June 1996. Mr. Clarke is a Managing Director with Aetna Life Insurance Company, Private Equity and, prior to that, he had been a Vice President in the Investment Group of Aetna Life Insurance Company from 1988 to 1996. The Stockholders Agreement (as defined herein) contains provisions regarding the election of directors. See "Certain Relationships and Related Transactions - Stockholders Agreements." Board Committees The Board of Directors of Holding has an Audit Committee and a Stock Option Committee, and the Board of Directors of the Company has an Audit Committee and a Compensation Committee. The Audit Committees oversee the activities of the independent auditors and internal controls. The Stock Option Committee administers the BPC Holding Corporation 1996 Stock Option Plan. The Compensation Committee makes recommendations to the Board of Directors of the Company concerning salaries and incentive compensation for officers and employees of the Company. Item 11. EXECUTIVE COMPENSATION The following table sets forth a summary of the compensation paid by the Company to its Chief Executive Officer and the four other most highly compensated executive officers of the Company (collectively, the "Named Executive Officers") for services rendered in all capacities to the Company during fiscal 2000, 1999, and 1998: SUMMARY COMPENSATION TABLE
Long Term Annual Compensation Compensation ------------------- ------------ Securities Fiscal Underlying Other Name and Principal Position Year Salary Bonus Options (#) Compensation(1) --------------------------- ---- ------ ----- ----------- --------------- Martin R. Imbler 2000 $ 390,122 $ 137,235 $-- $ 1,670 President and Chief Executive Officer 1999 362,940 121,201 -- 1,620 1998 327,397 46,697 -- 1,620 Ira G. Boots 2000 289,328 150,000 -- 1,670 Executive Vice President and Chief Operating 1999 251,163 95,486 -- 1,620 Officer 1998 176,631 39,024 -- 1,620 James M. Kratochvil 2000 212,049 120,000 -- 1,604 Executive Vice President, Chief Financial 1999 200,894 80,083 -- 1,620 Officer, Treasurer and Secretary 1998 142,483 30,413 -- 1,620 R. Brent Beeler 2000 257,236 135,000 -- 1,670 Executive Vice President and General 1999 226,504 79,350 -- 1,620 Manager - Containers 1998 145,218 32,621 -- 1,620 Bruce J. Sims 2000 193,055 114,000 -- 1,627 Executive Vice President and General 1999 190,922 95,486 -- 1,620 Manager - Drink Cups and Housewares 1998 163,518 39,024 -- 1,620
- ---------- (1) Amounts shown reflect contributions by the Company under the Company's 401(k) plan. -23- Fiscal Year-End Option Holdings The following table provides information on the number of exercisable and unexercisable management stock options held by the Named Executive Officers at December 30, 2000. FISCAL YEAR-END OPTION VALUES(1) Number of Unexercised Value of Unexercised Options at In-the-Money Options Fiscal Year-End at Fiscal Year-End Name Exercisable/Unexercisable Exercisable/Unexercisable ---- ------------------------- ------------------------- (#)(2) (2) Martin R. Imbler 6,778/1,694 $854,028/$213,444 Ira G. Boots 4,171/1,043 525,546/131,418 James M. Kratochvil 2,607/652 328,482/82,152 R. Brent Beeler 2,607/652 328,482/82,152 Bruce J. Sims 780/520 92,040/61,360 - ---------- (1) None of Holding's capital stock is currently publicly traded. The values reflect management's estimate of the fair market value of the Class B Nonvoting Common Stock at December 30, 2000. (2) All options granted to management of the Company are exercisable for shares of Class B Nonvoting Common Stock, par value $.01 per share, of Holding. Director Compensation Directors receive no cash consideration for serving on the Board of Directors of Holding or the Company, but directors are reimbursed for out-of-pocket expenses incurred in connection with their duties as directors. Employment Agreements The Company has an employment agreement with Mr. Imbler (the "Imbler Employment Agreement") that expires on June 30, 2001. Base compensation under the Imbler Employment Agreement for fiscal 2000 was $390,122. The Imbler Employment Agreement also provides for an annual performance bonus of $50,000 to $175,000 based upon the Company's attainment of certain financial targets. The Company may terminate Mr. Imbler's employment for "cause" or upon a "disability" (as such terms are defined in the Imbler Employment Agreement). If the Company terminates Mr. Imbler "without cause" (as defined in the Imbler Employment Agreement), Mr. Imbler is entitled to receive, among other things, the greater of (i) one year's salary or (ii) 1/12 of one year's salary for each year (not to exceed 24 years in the aggregate) of employment with the Company. The Imbler Employment Agreement also contains customary noncompetition, nondisclosure and nonsolicitation provisions. The Company also has employment agreements with each of Messrs. Boots, Kratochvil, Beeler, and Sims (each, an "Employment Agreement" and, collectively, the "Employment Agreements"). The agreements for Boots, Kratochvil and Beeler expire on June 30, 2001, and the agreement for Sims expires on January 21, 2002. The Employment Agreements provided for fiscal 2000 base compensation of $289,328, $212,049, $257,236 and $193,055, respectively. Salaries are subject in each case to annual adjustment at the discretion of the Compensation Committee of the Board of Directors of the Company. The Employment Agreements entitle each executive to participate in all other incentive compensation plans established for executive officers of the Company. The Company may terminate each Employment Agreement for "cause" or a "disability" (as such terms are defined in the Employment Agreements). If the Company terminates an executive's employment without "cause" (as defined in the Employment Agreements), the Employment Agreements require the Company to pay certain amounts to the terminated executive, including (i) the greater of (A) one year's salary or (B) 1/12 of one year's salary for each year (not to exceed 24 years in the aggregate) of employment with the Company (other than Mr. Sims, who would receive his salary for one year), and (ii) certain benefits under applicable incentive compensation plans. Each Employment Agreement also includes customary noncompetition, nondisclosure and nonsolicitation provisions. -24- Compensation Committee Interlocks and Insider Participation The Company established the Compensation Committee comprised of Messrs. Buaron, Imbler, and Hofmann, in October 1996. The annual salary and bonus paid to Messrs. Imbler, Boots, Kratochvil, Beeler, and Sims for fiscal 2000 were determined by the Compensation Committee in accordance with their respective employment agreements. All other compensation decisions with respect to officers of the Company are made by Mr. Imbler pursuant to policies established in consultation with the Compensation Committee. The Company is party to an Amended and Restated Management Agreement (the "FACL Management Agreement") with First Atlantic pursuant to which First Atlantic provides the Company with financial advisory and management consulting services in exchange for an annual fee of $750,000 and reimbursement for out-of-pocket costs and expenses. In consideration of such services, the Company paid First Atlantic fees and expenses of $821,000 for fiscal 2000, $792,000 for fiscal 1999, and $835,000 for fiscal 1998. Under the FACL Management Agreement, the Company pays a fee for services rendered in connection with certain transactions equal to the lesser of (i) 1% of the total transaction value and (ii) $1,250,000 for any such transaction consummated plus out-of-pocket expenses in respect of such transaction, whether or not consummated. First Atlantic received advisory fees of approximately $140,000 and $180,000 in July 1998 and October 1998, respectively, for originating, structuring and negotiating the Berry UK Acquisition and the Knight Acquisition, respectively. First Atlantic received advisory fees of approximately $690,000 in July 1999 for originating, structuring and negotiating the Cardinal Acquisition. First Atlantic received advisory fees of approximately $580,000 in May 2000 for originating, structuring and negotiating the Poly-Seal Acquisition. See "Certain Relationships and Related Transactions." Mr. Buaron, the Chairman and a director of Holding and the Company, is the Chairman and Chief Executive Officer of First Atlantic. Mr. Graev is a director of First Atlantic. As an officer and the sole stockholder of First Atlantic, Mr. Buaron is entitled to receive any bonuses paid and any dividends declared by First Atlantic on its capital stock, including any bonuses paid as a result of, and any dividends paid out of any of the fees paid with respect to the acquisitions described above. First Atlantic is engaged by Atlantic Equity Partners International II, L.P. ("International") to provide certain financial and management consulting services for which it receives annual fees. First Atlantic and International have completely distinct ownership and equity structures. See "Certain Relationships and Related Transactions." Atlantic Equity Partners, L.P. (the "Fund"), a prior stockholder of Holding, received in June 1996 approximately $67.6 million from the sale of its common stock in Holding and warrants to purchase common stock. First Atlantic is engaged by the Fund to provide certain financial and management consulting services for which it receives annual fees. First Atlantic and the Fund have completely distinct ownership and equity structures. Atlantic Equity Associates, L.P., a Delaware limited partnership ("AEA"), is the sole general partner of the Fund. Mr. Buaron is the sole shareholder of Buaron Capital Corporation ("Buaron Capital"). Buaron Capital is the managing and sole general partner of AEA. See "Certain Relationships and Related Transactions." Stock Option Plan Employees, directors and certain independent consultants of the Company and its subsidiaries are entitled to participate in the BPC Holding Corporation 1996 Stock Option Plan (the "Option Plan"), which provides for the grant of both "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and stock options that are non-qualified under the Code. The total number of shares of Class B Nonvoting Common Stock of Holding for which options may be granted pursuant to the Option Plan is 76,620. The Option Plan will terminate on October 3, 2003 or such earlier date on which the Board of Directors of Holding, in its sole discretion, determines. The Stock Option Committee of the Board of Directors of Holding administers all aspects of the Option Plan, including selecting which of the Company's directors, employees and independent consultants will receive options, the time when options are granted, whether the options are incentive stock options or non-qualified stock options, the manner and timing for vesting of such options, the terms of such options, the exercise date of any options and the number of shares subject to such options. Directors who are also employees are eligible to receive options under the Option Plan. -25- The exercise price of incentive stock options granted by Holding under the Option Plan may not be less than 100% of the fair market value of the Class B Nonvoting Common Stock at the time of grant and the term of any option may not exceed seven years. With respect to any employee who owns stock representing more than 10% of the voting power of the outstanding capital stock of Holding, the exercise price of any incentive stock option may not be less than 110% of the fair market value of such shares at the time of grant and the term of such option may not exceed five years. The exercise price of a non-qualified stock option is determined by the Stock Option Committee on the date the option is granted. However, the exercise price of a non-qualified stock option may not be less than 100% of the fair market value of Class B Nonvoting Common Stock if the option is granted at any time after the initial public offering of such stock. Options granted under the Option Plan are nontransferable except by will and the laws of descent and distribution. Options granted under the Option Plan typically expire after seven years and vest over a five-year period based on timing as well as achieving financial performance targets. Under the Option Plan, as of December 30, 2000, there were outstanding options to purchase an aggregate of 60,774 shares of Class B Nonvoting Common Stock to 91 current and former employees of the Company, at an exercise price between $100 and $226 per share. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Stock Ownership All of the outstanding capital stock of the Company is owned by Holding. The following table sets forth certain information regarding the ownership of the capital stock of Holding with respect to (i) each person known by Holding to own beneficially more than 5% of the outstanding shares of any class of its voting capital stock, (ii) each of Holding's directors, (iii) the Named Executive Officers and (iv) all directors and executive officers of Holding as a group. Except as otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares beneficially owned. Unless otherwise indicated, the address for each stockholder is c/o Berry Plastics Corporation, 101 Oakley Street, Evansville, Indiana 47710.
Shares of Shares of Voting Nonvoting Common Stock(1) Common Stock(1) --------------------- ---------------------------------- Percentage of Percentage of All Classes of Name and Address of Voting Common Stock Beneficial Owner Class A Class B Common Stock Class A Class B Class C (Fully-Diluted) - ----------------------------------------------------------------------------------------------------------------------------------- Atlantic Equity Partners International II, L.P.(2) 7,800 128,142 55.5% 2,200 3,385 11,470 22.7% J.P. Morgan Partners (SBIC), LLC(3) 52,000 5,623(4) 23.5 168,000 33,436(4) -- 38.4 BPC Equity, LLC(5) 31,200 -- 12.7 88,800 -- -- 17.8 Roberto Buaron(6) 7,800 128,142 55.5 2,200 3,385 11,470 22.7 Martin R. Imbler -- 3,629 1.5 -- 15,915(7) 664 2.9 Joseph S. Levy(8) -- 42 * -- 118 14 * Lawrence G. Graev(9) -- -- -- -- -- -- -- Donald J. Hofmann, Jr.(10) 52,000 5,623(4) 23.5 168,000 33,436(4) -- 38.4 Mathew J. Lori(11) 52,000 5,623(4) 23.5 168,000 33,436(4) -- 38.4 David M. Clarke(12) 31,200 -- 12.7 88,800 -- -- 17.8 Ira G. Boots -- 1,718 * -- 6,489(13) -- 1.2 James M. Kratochvil -- 1,196 * -- 6,011(14) 391 1.1 R. Brent Beeler -- 1,196 * -- 6,011(15) 391 1.1 Bruce J. Sims -- -- * -- 1,695(16) -- * All executive officers and directors as a group (12 persons) 91,000 140,350 94.5 259,000 73,160 12,930 85.5
- ---------- * Less than one percent. -26- (1) The authorized capital stock of Holding consists of 3,500,000 shares of capital stock, including 2,500,000 shares of Common Stock, $.01 par value (the "Holding Common Stock"), and 1,000,000 shares of Preferred Stock, $.01 par value (the "Preferred Stock"). Of the 2,500,000 shares of Holding Common Stock, 500,000 shares are designated Class A Voting Common Stock, 500,000 shares are designated Class A Nonvoting Common Stock, 500,000 shares are designated Class B Voting Common Stock, 500,000 shares are designated Class B Nonvoting Common Stock, and 500,000 shares are designated Class C Nonvoting Common Stock. Of the 1,000,000 shares of Preferred Stock, 800,000 shares are designated Series A Senior Cumulative Exchangeable Preferred Stock, and 200,000 shares are designated Series B Cumulative Preferred Stock. (2) Address is P. O. Box 847, One Capital Place, Fourth Floor, Grand Cayman, Cayman Islands, British West Indies. Atlantic Equity Associates International II, L.P., a Delaware limited partnership ("AEA II"), is the sole general partner of International and as such exercises voting and/or investment power over shares of capital stock owned by International, including the shares of Holding Common Stock held by International (the "International Shares"). Mr. Buaron is the sole shareholder of Buaron Holdings Ltd. ("BHL"). BHL is the sole general partner of AEA II. As the general partner of AEA II, BHL may be deemed to beneficially own the International Shares. BHL disclaims any beneficial ownership of any shares of capital stock owned by International, including the International Shares. Through his affiliation with BHL and AEA II, Mr. Buaron controls the sole general partner of International and therefore has the authority to control voting and/or investment power over, and may be deemed to beneficially own, the International Shares. Mr. Buaron disclaims any beneficial ownership of any of the International Shares. (3) Address is 1221 Avenue of the Americas, New York, New York 10020. (4) Represents warrants to purchase such shares of common stock held by J.P. Morgan Partners (SBIC), LLC (formerly Chase Venture Capital Associates, LLC) ("JPMP(SBIC)") which are currently exercisable. (5) Address is c/o Aetna Life Insurance Company, Private Equity Group, IG6U, 151 Farmington Avenue, Hartford, Connecticut 06156. Aetna Life Insurance Company exercises voting and/or investment power over shares of capital stock owned by BPC Equity, LLC ("BPC Equity"), including shares of Holding Common Stock held by BPC Equity. (6) Address is c/o First Atlantic Capital, Ltd., 135 East 57th Street, New York, New York 10022. Represents shares of Holding Common Stock owned by International. Mr. Buaron is the sole shareholder of BHL. BHL is the sole general partner of AEA II. AEA II is the sole general partner of International and as such, exercises voting and/or investment power over shares of capital stock owned by International, including the International Shares. Mr. Buaron, as the sole shareholder and Chief Executive Officer of BHL, controls the sole general partner of International and therefore has voting and/or investment power over, and may be deemed to beneficially own, the International Shares. Mr. Buaron disclaims any beneficial ownership of the International Shares. (7) Includes 6,778 options granted to Mr. Imbler, which are presently exercisable. (8) Address is c/o First Atlantic Capital, Ltd., 135 East 57th Street, New York, New York 10022. (9) Address is c/o O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New York, New York 10112. (10) Address is c/o J.P. Morgan Partners, 1221 Avenue of the Americas, New York, New York 10020. Represents shares owned by JPMP(SBIC). Mr. Hofmann is a General Partner of J.P. Morgan Partners, LLC, which is the private equity investment arm of J.P. Morgan Chase & Co., which is an affiliate of JPMP(SBIC). Mr. Hofmann disclaims any beneficial ownership of the shares of Holding Common Stock held by JPMP(SBIC). (11) Address is c/o J.P. Morgan Partners, LLC, 1221 Avenue of the Americas, New York, New York 10020. Represents shares owned by JPMP(SBIC). Mr. Lori is a Principal with of J.P. Morgan Partners, which is the private equity investment arm of J.P. Morgan Chase & Co., which is an affiliate of JPMP(SBIC). Mr. Lori disclaims any beneficial ownership of the shares of Holding Common Stock held by JPMP(SBIC). (12) Address is c/o Aetna Life Insurance Company, Private Equity Group, IG6U, 151 Farmington Avenue, Hartford, Connecticut 06156. Represents shares owned by BPC Equity. Mr. Clarke is a Managing Director of Aetna, Inc., an affiliate of Aetna Life Insurance Company, which is a member of BPC Equity. Mr. Clarke disclaims any beneficial ownership of the shares of Holding Common Stock held by BPC Equity. (13) Includes 4,171 options granted to Mr. Boots, which are currently exercisable. (14) Includes 2,607 options granted to Mr. Kratochvil, which are currently exercisable. (15) Includes 2,607 options granted to Mr. Beeler, which are currently exercisable. (16) Includes 780 options granted to Mr. Sims, which are currently exercisable. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS First Atlantic Pursuant to the FACL Management Agreement, First Atlantic provides the Company with financial advisory and management consulting services in exchange for an annual fee of $750,000 and reimbursement for out-of-pocket costs and expenses. In consideration of such services, the Company paid First Atlantic fees and expenses of approximately $821,000 for fiscal 2000, $792,000 for fiscal 1999, and $835,000 for fiscal 1998. Under the FACL Management Agreement, the Company pays a fee for services rendered in connection with certain transactions equal to the lesser of (i) 1% of the total transaction value and (ii) $1,250,000 for any such transaction consummated plus out-of-pocket expenses in respect of such transaction, whether or not consummated. First Atlantic received advisory fees of approximately $140,000 and $180,000 in July 1998 and October 1998, respectively, for originating, structuring and negotiating the Berry UK Acquisition and the Knight Acquisition, respectively. First Atlantic received advisory fees of approximately $690,000 in July 1999 for originating, structuring and negotiating the Cardinal Acquisition. First Atlantic received advisory fees of approximately $580,000 in May 2000 for originating, structuring and negotiating the Poly-Seal Acquisition. Mr. Buaron, the Chairman and a director of Holding and the Company, is the Chairman and Chief Executive Officer of First Atlantic. As an officer and the sole stockholder of First Atlantic, Mr. Buaron is entitled to receive any bonuses paid and any dividends declared by First Atlantic on its capital stock, including any bonuses paid as a result of, and any dividends paid out of the fees paid with respect to the acquisitions described above. Mr. Graev is also a director of First Atlantic, and Mr. Levy is an officer of First Atlantic. First Atlantic is engaged by International to provide certain financial and management consulting services for which it receives annual fees. First Atlantic and International have completely distinct ownership and equity structures. -27- Atlantic Equity Partners, L.P. (the "Fund"), a prior stockholder of Holding, received in June 1996 approximately $67.6 million from the sale of its common stock in Holding and warrants to purchase common stock. First Atlantic is engaged by the Fund to provide certain financial and management consulting services for which it receives annual fees. First Atlantic and the Fund have completely distinct ownership and equity structures. AEA is the sole general partner of the Fund. Mr. Buaron is the sole shareholder of Buaron Capital, and Buaron Capital is the managing and sole general partner of AEA. Stockholders Agreements Holding entered into a Stockholders Agreement dated as of June 18, 1996, as amended (the "Stockholders Agreement"), with certain common equity investors ("Common Stock Purchasers"), certain Management Stockholders (as defined herein) and, for limited purposes thereunder, the Northwestern Mutual Life Insurance Company ("Northwestern") and JPMP(SBIC) ("Preferred Stock Purchasers"). The Stockholders Agreement grants the Common Stock Purchasers certain rights and obligations, including the following: (i) until the occurrence of certain events specified in the Stockholders Agreement, to designate the members of a seven person Board of Directors as follows: (A) one director will be Roberto Buaron or his designee; (B) International will have the right to designate three directors (who are currently Messrs. Graev, Imbler and Levy); (C) JPMP(SBIC) will have the right to designate two directors (who are currently Messrs. Hofmann and Lori); and (D) the institutional holders (excluding International and JPMP(SBIC)) will have the right to designate one director (who is currently Mr. Clarke); (ii) in the case of certain Common Stock Purchasers, to subscribe for a proportional share of future equity issuances by Holding; (iii) under certain circumstances and in the case of International or JPMP(SBIC), to cause the initial public offering of equity securities of Holding or a sale of Holding subsequent to June 18, 2001 and (iv) under certain circumstances and in the case of a majority in interest of the institutional holders, to cause the initial public offering of equity securities of Holding or a sale of Holding subsequent to June 18, 2002. Provisions under the Stockholders Agreement also (i) prohibit Holding from taking certain actions without the consent of holders of a majority of voting stock held by JPMP(SBIC) and the institutional holders other than International (or, following the occurrence of certain events, International's consent), including certain transactions between Holding and any subsidiary, on the one hand, and First Atlantic or any of its affiliates, on the other hand; (ii) obligate Holding to provide certain Common Stock Purchasers with financial and other information regarding Holding and to provide access and inspection rights to all Common Stock Purchasers; and (iii) restrict transfers of equity by the Common Stock Purchasers, subject to certain exceptions (including for transfers of up to 10% of the equity (including warrants to purchase equity) held by each Common Stock Purchaser on the date of the Stockholders Agreement). Pursuant to the Stockholders Agreement, under certain circumstances the Preferred Stock Purchasers (and their transferees) have tag-along rights with respect to the warrants issued by Holding in 1996 and the Holding Common Stock issuable upon exercise thereof. Under specified circumstances and subject to certain exceptions, the Preferred Stock Purchasers (and their transferees) are entitled to include a pro rata share of their Preferred Stock in a transaction (or series of related transactions) involving the transfer by International, JPMP(SBIC) and the Institutional Holders (as defined in the Stockholders Agreement) of more than 50% of the aggregate amount of securities held by them on June 19, 1996. The Stockholders Agreement grants registration rights, under certain circumstances and subject to specified conditions, to the Common Stock Purchasers. International and JPMP(SBIC) each have the right, on three occasions, to demand registration, at Holding's expense, of their shares of Holding Common Stock. Under certain circumstances, a majority in interest of the institutional holders (excluding International and JPMP(SBIC)) have the right, on one occasion, to demand registration, at Holding's expense, of their shares of Holding Common Stock. The Stockholders Agreement provides that if Holding proposes to register any of its securities, either for its own account or for the account of other stockholders, Holding will be required to notify all Common Stock Purchasers and to include in such registration the shares of Holding Common Stock requested to be included by them. All shares of Holding Common Stock owned by the Common Stock Purchasers requested to be included in a registration will be subject to cutbacks under certain circumstances in connection with an underwritten public offering. The provisions of the Stockholders Agreement regarding voting rights, negative covenants, information/inspection rights, the right to force a sale of Holding, preemptive rights and transfer restrictions generally will expire on the earlier to occur of (i) the later of (A) June 18, 2001 if an underwritten public offering of equity securities of Holding resulting in gross proceeds of at least $20.0 million occurs prior to June 18, 2001 and (B) the occurrence of such underwritten public offering that occurs subsequent to June 18, 2001; (ii) June 18, 2016; and (iii) a sale of Holding. In addition, the Stockholders Agreement provides that certain rights of a Common Stock Purchaser (to the extent such rights apply to such Common Stock Purchaser) to designate members of the Board of Directors of Holding and/or to approve certain actions by Holding will terminate if certain circumstances occur. -28- Holding is also party to the Amended and Restated Stockholders Agreement dated June 18, 1996 (the "Management Stockholders Agreement"), with International and all management shareholders including, among others, Messrs. Imbler, Boots, Kratochvil, Beeler, and Sims (collectively, the "Management Stockholders"). The Management Stockholders Agreement contains provisions (i) limiting transfers of equity by the Management Stockholders; (ii) requiring the Management Stockholders to sell their shares as designated by Holding or International upon the consummation of certain transactions; (iii) granting the Management Stockholders certain rights of co-sale in connection with sales by International; (iv) granting Holding rights to repurchase capital stock from the Management Stockholders upon the occurrence of certain events; and (v) requiring the Management Stockholders to offer shares to Holding prior to any permitted transfer. In order to finance a portion of the consideration delivered in connection with the acquisition of Poly-Seal Corporation, Holding issued, pursuant to a Preferred Stock and Warrant Purchase Agreement dated as of May 9, 2000 (the "Preferred Agreement") by and among Holding, JPMP(SBIC), and Northwestern, 1,000,000 shares of Series A-1 Preferred Stock in a private placement (the "Preferred Placement") for an aggregate purchase price of $25 million. The Series A-1 Preferred Stock has a stated value of $25 per share, and dividends accrue at a rate of 14% per annum and will accumulate until declared and paid. The Series A-1 Perferred Stock ranks pari-passu with the Series A Preferred Stock and prior to all other capital stock of Holding. In connection with the Preferred Placement, Holding issued warrants to purchase 25,997 shares of its Series B Non-Voting Common Stock at $0.01 per share. Holding also extended the expiration period of currently outstanding warrants to purchase Series B Non-Voting Common Stock and Series B Voting Common Stock held by JPMP(SBIC) and Northwestern to May 9, 2006. The Series A-1 Preferred Stock and Warrants were issued in transactions exempt from registration in reliance on the exemption provided by Section 4 (2) of the Securities Act of 1933. Tax Sharing Agreement For federal income tax purposes, Berry and its domestic subsidiaries are included in the affiliated group of which Holding is the common parent and as a result, the federal taxable income and loss of Berry and its subsidiaries is included in the group consolidated tax return filed by Holding. In April 1994, Holding, Berry and certain of its subsidiaries entered into a tax sharing agreement, which was amended and restated in March 2001 (the "Tax Sharing Agreement"). Under the Tax Sharing Agreement, for fiscal 1994 and all taxable years thereafter for which the Tax Sharing Agreement remains in effect, Berry and its subsidiaries as a consolidated group are required to pay at the request of Holding an amount equal to the taxes that they would otherwise have to pay if they were to file separate federal, state or local income tax returns (including any amounts determined to be due as a result of a redetermination arising from an audit or otherwise of a tax liability which is attributable to them). If Berry and its subsidiaries would have been entitled to a tax refund for taxes paid previously on the basis computed as if they were to file separate returns, then under the Tax Sharing Agreement, Holding is required to pay at the request of Berry and its subsidiaries an amount equal to such tax refund. If, however, Berry and its subsidiaries would have reported a tax loss if they were to file separate returns, then Holdings intends, but is not obligated under the Tax Sharing Agreement, to pay to Berry and its subsidiaries an amount equal to the tax benefit that is realized by Holding as a result of such separate loss. Under the Tax Sharing Agreement any such payments to be made by Holding to Berry or any of its subsidiaries on account of a tax loss are within the sole discretion of Holding. No payments have been made to date. Legal Services Mr. Graev is a partner in the law firm of O'Sullivan Graev & Karabell, LLP, New York, New York. O'Sullivan Graev & Karabell, LLP provides legal services to the Company and Holding in connection with certain matters, principally relating to transactional, securities law, general corporate and litigation matters. Transactions With Affiliates The 1996 Indenture, the Stockholders Agreement, the 1994 Indenture, the 1998 Indenture, the 1999 Indenture, and the Credit Facility restrict the Company's and its affiliates' ability to enter into transactions with their affiliates, including their officers, directors and principal stockholders. -29- PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Documents Filed as Part of the Report 1. Financial Statements The financial statements listed under Item 8 are filed as part of this report. 2. Financial Statement Schedules The financial statement schedules listed under Item 8 are filed as part of this report. Schedules other than the above have been omitted because they are either not applicable or the required information has been disclosed in the financial statements or notes thereto. 3. Exhibits The exhibits listed on the accompanying Exhibit Index are filed as part of this report. (b) Reports on Form 8-K None. -30- REPORT OF INDEPENDENT AUDITORS The Stockholders and Board of Directors BPC Holding Corporation We have audited the accompanying consolidated balance sheets of BPC Holding Corporation ("Holding") as of December 30, 2000 and January 1, 2000, and the related consolidated statements of operations, changes in stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 30, 2000. Our audits also included the financial statement schedules listed in the Index at Item 14(a). These financial statements and schedules are the responsibility of Holding's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of BPC Holding Corporation at December 30, 2000 and January 1, 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 30, 2000, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. /s/ ERNST & YOUNG LLP Indianapolis, Indiana February 16, 2001 F-1 BPC Holding Corporation Consolidated Balance Sheets (In Thousands of Dollars)
December 30, January 1, 2000 2000 ------------ ---------- Assets Current assets: Cash and cash equivalents $ 2,054 $ 2,546 Accounts receivable (less allowance for doubtful accounts of $1,724 at December 30, 2000 and $1,386 at January 1, 2000) 48,397 37,507 Inventories: Finished goods 38,157 31,676 Raw materials and supplies 10,822 15,016 -------- -------- 48,979 46,692 Prepaid expenses and other receivables 5,272 2,127 -------- -------- Total current assets 104,702 88,872 Property and equipment: Land 8,894 8,556 Buildings and improvements 60,572 48,080 Machinery, equipment and tooling 203,569 172,082 Construction in progress 16,901 18,170 -------- -------- 289,936 246,888 Less accumulated depreciation 110,132 100,096 -------- -------- 179,804 146,792 Intangible assets: Deferred financing and origination fees, net 10,422 11,571 Covenants not to compete, net 3,388 3,723 Excess of cost over net assets acquired, net 114,680 87,614 -------- -------- 128,490 102,908 Other 126 2,235 -------- -------- Total assets $413,122 $340,807 ======== ========
F-2 Consolidated Balance Sheets (continued)
December 30, January 1, 2000 2000 ------------ ---------- Liabilities and stockholders' equity (deficit) Current liabilities: Accounts payable $ 26,779 $ 25,798 Accrued expenses and other liabilities 10,430 9,869 Accrued interest 9,006 8,108 Employee compensation and payroll taxes 14,785 13,461 Current portion of long-term debt 23,232 21,109 --------- --------- Total current liabilities 84,232 78,345 Long-term debt, less current portion 445,574 382,880 Accrued dividends on preferred stock 17,656 11,001 Deferred income taxes 491 503 Other liabilities 3,166 1,549 --------- --------- 551,119 474,278 Stockholders' equity (deficit): Series A Preferred Stock; 600,000 shares authorized, issued and outstanding (net of discount of $2,185 at December 30, 2000 and $2,478 at January 1, 2000) 12,386 12,093 Series A-1 Preferred Stock; 1,400,000 shares authorized; 1,000,000 shares issued and outstanding (net of discount of $5,400 at December 30, 2000) 19,600 -- Series B Preferred Stock; 200,000 shares authorized, issued and outstanding 5,000 5,000 Class A Common Stock; $.01 par value: Voting; 500,000 shares authorized; 91,000 shares issued and outstanding 1 1 Nonvoting; 500,000 shares authorized; 259,000 shares issued and outstanding 3 3 Class B Common Stock; $.01 par value: Voting; 500,000 shares authorized; 145,058 shares issued and 144,546 shares outstanding 1 1 Nonvoting; 500,000 shares authorized; 58,612 shares issued and 56,509 shares outstanding 1 1 Class C Common Stock; $.01 par value: Nonvoting; 500,000 shares authorized; 17,000 shares issued and 16,833 shares outstanding -- -- Treasury stock: 512 shares Class B Voting Common Stock; 2,103 shares Class B Nonvoting Common Stock; and 167 shares Class C Nonvoting Common Stock (405) (256) Additional paid-in capital 35,041 41,559 Warrants 9,386 3,511 Retained earnings (deficit) (218,168) (195,061) Accumulated other comprehensive income (loss) (843) (323) --------- --------- Total stockholders' equity (deficit) (137,997) (133,471) --------- --------- Total liabilities and stockholders' equity (deficit) $ 413,122 $ 340,807 ========= =========
See notes to consolidated financial statements. F-3 BPC Holding Corporation Consolidated Statements of Operations (In Thousands of Dollars)
Year Ended ------------------------------------------- December 30, January 1, January 2, 2000 2000 1999 ------------ ---------- ---------- Net sales $ 408,088 $ 328,834 $ 271,830 Cost of goods sold 312,119 241,067 199,227 --------- --------- --------- Gross margin 95,969 87,767 72,603 Operating expenses: Selling 21,630 17,383 14,780 General and administrative 24,408 22,034 19,308 Research and development 2,606 2,338 1,690 Amortization of intangibles 10,579 7,215 4,139 Other expenses 6,639 5,148 4,084 --------- --------- --------- Operating income 30,107 33,649 28,602 Other expenses: Loss on disposal of property and equipment 877 1,416 1,865 --------- --------- --------- Income before interest and taxes 29,230 32,233 26,737 Interest: Expense (51,553) (41,040) (35,555) Income 96 223 999 --------- --------- --------- Loss before income taxes and extraordinary item (22,227) (8,584) (7,819) Income taxes (benefit) (142) 554 (249) --------- --------- --------- Loss before extraordinary item (22,085) (9,138) (7,570) Extraordinary item (less applicable income taxes of $0) (1,022) -- -- --------- --------- --------- Net loss (23,107) (9,138) (7,570) Preferred stock dividends (6,655) (3,776) (3,551) Amortization of preferred stock discount (768) (292) (292) --------- --------- --------- Net loss attributable to common shareholders $ (30,530) $ (13,206) $ (11,413) ========= ========= =========
See notes to consolidated financial statements. F-4 BPC Holding Corporation Consolidated Statements of Changes in Stockholders' Equity (Deficit) (In Thousands of Dollars)
Common Stock Preferred Stock ----------------------------- ------------------------------------ Treasury Class A Class B Class C Class A Class A-1 Class B Stock - ----------------------------------------------------------------------------------------------------------------------------- Balance at December 28, 1997 $ 4 $ 2 $ -- $11,509 $ -- $5,000 $ (22) ---- ---- ------- ------- -------- ------ ------ Net loss - - -- -- -- -- -- Sale of stock to management - - -- -- -- -- -- Purchase treasury stock from management - - -- -- -- -- (258) Translation loss - - -- -- -- -- -- Accrued dividends on preferred stock - - -- -- -- -- -- Amortization of preferred stock discount - - -- 292 -- -- -- ---- ---- ------- ------- -------- ------ ------ Balance at January 2, 1999 4 2 -- 11,801 -- 5,000 (280) ---- ---- ------- ------- -------- ------ ------ Net loss - - -- -- -- -- -- Sale of treasury stock to management - - -- -- -- -- 40 Purchase treasury stock from management - - -- -- -- -- (16) Translation loss - - -- -- -- -- -- Accrued dividends on preferred stock - - -- -- -- -- -- Amortization of preferred stock discount - - -- 292 -- -- -- ---- ---- ------- ------- -------- ------ ------ Balance at January 1, 2000 4 2 -- 12,093 -- 5,000 (256) ---- ---- ------- ------- -------- ------ ------ Net loss - - -- -- -- -- -- Purchase treasury stock from management - - -- -- -- -- (149) Translation loss - - -- -- -- -- -- Stock-based compensation - - -- -- -- -- -- Issuance of preferred stock - - -- -- 25,000 -- -- Issuance of private warrants - - -- -- (5,875) -- -- Accrued dividends on preferred stock - - -- -- -- -- -- Amortization of preferred stock discount - - -- 293 475 -- -- ---- ---- ------- ------- -------- ------ ------ Balance at December 30, 2000 $ 4 $ 2 $ -- $12,386 $ 19,600 $5,000 $(405) ==== ==== ======= ======= ======== ====== ====== Accumulated Additional Other Paid-In Retained Comprehensive Comprehensive Capital Warrants Earnings Income (Loss) Total Income (Loss) - ------------------------------------------------------------------------------------------------------------- ------------- Balance at December 28, 1997 $ 49,374 $3,511 $(178,353) $ -- $(108,975) -------- ------ --------- ----- --------- Net loss -- -- (7,570) -- (7,570) $ (7,570) Sale of stock to management 80 -- -- -- 80 -- Purchase treasury stock from management -- -- -- -- (258) -- Translation loss -- -- -- (83) (83) (83) Accrued dividends on preferred stock (3,551) -- -- -- (3,551) -- Amortization of preferred stock discount (292) -- -- -- -- -- -------- ------ --------- ----- --------- -------- Balance at January 2, 1999 45,611 3,511 (185,923) (83) (120,357) $ (7,653) -------- ------ --------- ----- --------- ======== Net loss -- -- (9,138) -- (9,138) $ (9,138) Sale of treasury stock to management 16 -- -- -- 56 -- Purchase treasury stock from management -- -- -- -- (16) -- Translation loss -- -- -- (240) (240) (240) Accrued dividends on preferred stock (3,776) -- -- -- (3,776) -- Amortization of preferred stock discount (292) -- -- -- -- -- -------- ------ --------- ----- --------- -------- Balance at January 1, 2000 41,559 3,511 (195,061) (323) (133,471) $ (9,378) -------- ------ --------- ----- --------- ======== Net loss -- -- (23,107) -- (23,107) $(23,107) Purchase treasury stock from management -- -- -- -- (149) -- Translation loss -- -- -- (520) (520) (520) Stock-based compensation 905 -- -- -- 905 -- Issuance of preferred stock -- -- -- -- 25,000 -- Issuance of private warrants -- 5,875 -- -- -- -- Accrued dividends on preferred stock (6,655) -- -- -- (6,655) -- Amortization of preferred stock discount (768) -- -- -- -- -- -------- ------ --------- ----- --------- -------- Balance at December 30, 2000 $ 35,041 $9,386 $(218,168) $(843) $(137,997) $(23,627) ======== ====== ========= ===== ========= ========
See notes to consolidated financial statements. F-5 BPC Holding Corporation Consolidated Statements of Cash Flows (In Thousands of Dollars)
Year Ended ------------------------------------------ December 30, January 1, January 2, 2000 2000 1999 ------------ ---------- ---------- Operating activities Net loss $ (23,107) $ (9,138) $ (7,570) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 31,569 24,580 20,690 Non-cash interest expense 18,047 15,567 14,824 Amortization 10,579 7,215 4,139 Non-cash compensation 905 -- 600 Write-off of financing fees 1,022 -- -- Loss on sale of property and equipment 877 1,416 1,865 Deferred income taxes (349) 6 (709) Changes in operating assets and liabilities: Accounts receivable, net (1,475) (723) 4,413 Inventories 7,383 (7,746) (252) Prepaid expenses and other receivables (1,163) (529) 1,016 Other assets -- 493 (43) Accounts payable and accrued expenses (8,182) 4,860 (4,842) --------- --------- -------- Net cash provided by operating activities 36,106 36,001 34,131 Investing activities Additions to property and equipment (31,530) (30,738) (22,595) Proceeds from disposal of property and equipment 1,666 529 4,471 Acquisitions of businesses (78,851) (76,769) (33,996) --------- --------- -------- Net cash used for investing activities (108,715) (106,978) (52,120) Financing activities Proceeds from long-term borrowings 80,032 90,435 44,044 Payments on long-term borrowings (31,543) (16,340) (24,906) Purchase of treasury stock from management (149) (16) (258) Proceeds from issuance of preferred stock and warrants 25,000 -- -- Proceeds from issuance of treasury stock -- 56 -- Proceeds from issuance of common stock -- -- 80 Debt issuance costs (1,303) (3,000) (1,341) --------- --------- -------- Net cash provided by financing activities 72,037 71,135 17,619 Effect of exchange rate changes on cash 80 70 -- --------- --------- -------- Net increase (decrease) in cash and cash equivalents (492) 228 (370) Cash and cash equivalents at beginning of year 2,546 2,318 2,688 --------- --------- -------- Cash and cash equivalents at end of year $ 2,054 $ 2,546 $ 2,318 ========= ========= ========
See notes to consolidated financial statements. F-6 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 Berry Iowa Corporation ("Berry Iowa"), Berry Tri-Plas Corporation ("Berry Tri-Plas"), Berry Sterling Corporation ("Berry Sterling"), Aerocon, Inc., PackerWare Corporation ("PackerWare"), Berry Plastics Design Corporation ("Berry Design"), Venture Packaging, Inc. ("Venture Packaging") and its subsidiaries Venture Packaging Midwest, Inc. and Berry Plastics Technical Services, Inc., NIM Holdings Limited and its subsidiary Berry Plastics U.K. Limited ("Berry UK") and its subsidiary Norwich Acquisition Limited, Knight Plastics, Inc., CPI Holding Corporation and its subsidiary Cardinal Packaging, Inc. ("Cardinal"), Berry Plastics Acquisition Corporation II, Poly-Seal Corporation, Berry Plastics Acquisition Corporation III, and CBP Holdings, S.r.l. and its subsidiaries Capsol S.p.a. and Ociesse S.r.l. 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, and Milan, Italy. In October 1998, the Company acquired a facility in Arlington Heights, Illinois in connection with assets purchased from the Knight Engineering and Plastics Division of Courtaulds Packaging Inc. In 1999, the Company closed the Arlington Heights facility. In connection with the acquisition of CPI Holding Corporation in July 1999, the Company also acquired manufacturing facilities in Ontario, California and Minneapolis, Minnesota. The Ontario facility was closed in 1999, and all production was removed from the Minneapolis facility in 2000. Also in 2000, the Company closed its manufacturing facility in York, Pennsylvania. The business from these closed locations are distributed throughout Berry's facilities. Holding's fiscal year is a 52/53 week period ending generally on the Saturday closest to December 31. All references herein to "2000," "1999," and "1998," relate to the fiscal years ended December 30, 2000, January 1, 2000, and January 2, 1999, 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 three primary divisions: open-top containers, aerosol overcaps and closures, and drink cups and housewares. 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 $94.7 million in 2000. Dow Chemical Corporation is the principal supplier (approximately 33%) of the Company's total resin material requirements. The Company also uses other suppliers such as Union Carbide, Chevron, ExxonMobil, Nova and Equistar to meet its resin requirements. The Company does not anticipate any material difficulty in obtaining an uninterrupted supply of raw materials at competitive prices in the near future. However, should a significant shortage of the supply of resin occur, changes in both the price and availability of the principal raw material used in the manufacture of the Company's products could occur and result in financial disruption to the Company. F-7 Notes to Consolidated Financial Statements (continued) The Company is subject to existing and potential federal, state, local and foreign legislation designed to reduce solid waste in landfills. While the principal resins used by the Company are recyclable and, therefore, reduce the Company's exposure to legislation promulgated to date, there can be no assurance that future legislation or regulatory initiatives would not have a material adverse effect on the Company. Legislation, if promulgated, requiring plastics to be degradable in landfills or to have minimum levels of recycled content would have a significant impact on the Company's business as would legislation providing for disposal fees or limiting the use of plastic products. Cash and Cash Equivalents All highly liquid investments with a maturity of three months or less at the date of purchase are considered to be cash equivalents. 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 three to 25 years. Intangible Assets Origination fees and deferred financing fees are being amortized using the straight-line method over the lives of the respective debt agreements. Covenants not to compete are being amortized using the straight-line method over the respective lives of the agreements ranging from one to five years. The costs in excess of net assets acquired represent the excess purchase price over the fair value of the net assets acquired in the original acquisition of Berry Plastics and subsequent acquisitions. These costs are being amortized using the straight-line method over a range of 15 to 20 years. Holding periodically evaluates the value of intangible assets to determine if impairment has occurred. This evaluation is based on various analyses including reviewing anticipated cash flows. Revenue Recognition Revenue from sales of products is recognized at the time product is shipped to the customer. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Reclassifications Certain amounts on the 1999 and 1998 financial statements have been reclassified to conform to the 2000 presentation. F-8 Notes to Consolidated Financial Statements (continued) Impact of Recently Issued Accounting Standards In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, which is required to be adopted in fiscal years beginning after June 15, 2000. This statement establishes accounting reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. The statement requires all derivatives be recognized on the balance sheet at fair value. Changes in the fair value of derivatives will be accounted for based upon their intended use and designation. The adoption of this standard is not expected to have a material effect on the consolidated financial statements. Note 3. Acquisitions On July 2, 1998, NIM Holdings, a newly-formed, wholly-owned subsidiary of Berry, acquired all of the capital stock of Norwich Moulders of Norwich, England for aggregate consideration of approximately $14.0 million. The purchase was primarily financed through the senior credit facility. The operations of Norwich Moulders are included in Berry's operations since the acquisition date using the purchase method of accounting. On October 16, 1998, Knight Plastics, Inc. ("Knight"), a newly formed wholly-owned subsidiary of Berry, acquired substantially all of the assets of the Knight Engineering and Plastics Division of Courtaulds Packaging Inc. for aggregate consideration of approximately $18.0 million. The purchase was financed through the senior credit facility's revolving line of credit. The operations of Knight are included in Berry's operations since the acquisition date using the purchase method of accounting. On July 6, 1999, the Company acquired all of the outstanding capital stock of CPI Holding Corporation ("Cardinal"), the parent company of Cardinal Packaging, Inc. for aggregate consideration of approximately $72.0 million. The purchase was financed through the issuance by Berry of $75.0 million of 11% Senior Subordinated Notes. The operations of Cardinal are included in Berry's operations since the acquisition date using the purchase method of accounting. On May 9, 2000, Berry acquired all of the outstanding capital stock of Poly-Seal Corporation ("Poly-Seal") for aggregate consideration of approximately $58.0 million. The purchase was financed through the issuance by Holding of $25.0 million of 14% preferred stock and warrants and additional borrowings under the senior credit facility. The operations of Poly-Seal are included in Berry's operations since the acquisition date using the purchase method of accounting. The fair value of the net assets acquired was based on preliminary estimates and may be revised at a later date. On October 4, 2000, Berry, through its newly-formed, wholly owned Italian subsidiary CBP Holdings S.r.l. ("Capsol"), acquired all of the outstanding capital stock of Capsol S.p.a., headquartered in Cornate d'Adda, near Milan, Italy and the whole quota capital of a related company, Ociesse S.r.l., for aggregate consideration of approximately $14.0 million. The purchase was financed through borrowings under the senior credit facility. The operations of Capsol are included in Berry's operations since the acquisition date using the purchase method of accounting. The fair value of the net assets acquired was based on preliminary estimates and may be revised at a later date. The pro forma results listed below are unaudited and reflect purchase accounting adjustments assuming the Cardinal, Poly-Seal and Capsol acquisitions occurred at the beginning of each fiscal year presented.
Year Ended ---------------------------- December 30, January 1, 2000 2000 ------------ ---------- Pro forma net sales $ 433,153 $ 418,749 Pro forma loss before extraordinary item (26,465) (14,147) Pro forma net loss (27,487) (14,147)
F-9 Notes to Consolidated Financial Statements (continued) The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the operating results that would have occurred had the acquisitions been consummated at the above dates, nor are they necessarily indicative of future operating results. Further, the information gathered on the acquired companies is based upon unaudited internal financial information and reflects only pro forma adjustments for additional interest expense and amortization of the excess of the cost over the underlying net assets acquired, net of the applicable income tax effects. Note 4. Intangible Assets Intangible assets consist of the following:
December 30, January 1, 2000 2000 ------------ ---------- Deferred financing and origination fees $ 19,621 $ 18,924 Covenants not to compete 9,997 7,745 Excess of cost over net assets acquired 131,775 96,104 Accumulated amortization (32,903) (19,865) --------- --------- $ 128,490 $ 102,908 ========= =========
Excess of cost over net assets acquired increased primarily due to the acquisitions of Poly-Seal and Capsol to the extent the purchase price exceeded the fair value of the net assets acquired. Note 5. Long-Term Debt Long-term debt consists of the following:
December 30, January 1, 2000 2000 ------------ ---------- Holding 12.50% Senior Secured Notes $127,282 $111,956 Berry 12.25% Senior Subordinated Notes 125,000 125,000 Berry 11% Senior Subordinated Notes 75,000 75,000 Term loans 75,607 55,221 Revolving lines of credit 35,447 31,649 Second Lien Senior Credit Facility 25,000 -- Nevada Industrial Revenue Bonds 3,500 4,000 Capital leases 1,435 479 Debt premium, net 535 684 -------- -------- 468,806 403,989 Less current portion of long-term debt 23,232 21,109 -------- -------- $445,574 $382,880 ======== ========
Holding 12.50% Senior Secured Notes On June 18, 1996, Holding, as part of a recapitalization (see Note 9), issued 12.50% Senior Secured Notes due 2006 (the "1996 Offering") for net proceeds, after expenses, of approximately $100.2 million (or $64.6 million after deducting the amount of such net proceeds used to purchase marketable securities available for payment of interest on the notes). These notes were exchanged in October 1996 for the 12.50% Series B Senior Secured Notes due 2006 (the "1996 Notes"). Interest is payable semi-annually on June 15 and December 15 of each year. In addition, from December 15, 1999 until June 15, 2001, Holding may, at its option, pay interest, at an increased rate of 0.75% per annum, in additional 1996 Notes valued at 100% of the principal amount thereof. Holding has issued an additional approximately $22.3 million ($15.3 million in 2000) aggregate principal amount of 1996 Notes in satisfaction of its interest obligation. F-10 Notes to Consolidated Financial Statements (continued) The 1996 Notes rank senior in right of payment to all existing and future subordinated indebtedness of Holding, including Holding's subordinated guarantee of all of Berry's Senior Subordinated Notes and pari passu in right of payment with all senior indebtedness of Holding. The 1996 Notes are effectively subordinated to all existing and future senior indebtedness of Berry, including borrowings under the senior credit facility, second lien senior credit facility, and the Nevada Industrial Revenue Bonds. Berry 12.25% Senior Subordinated Notes On April 21, 1994, Berry completed an offering of 100,000 units consisting of $100.0 million aggregate principal amount of 12.25% Berry Plastics Corporation Senior Subordinated Notes, due 2004 (the "1994 Notes") and 100,000 warrants to purchase 1.13237 shares of Class A Common Stock, $.00005 par value (collectively the "1994 Transaction"), of Holding. The net proceeds to Berry from the sale of the 1994 Notes, after expenses, were $93.0 million. On August 24, 1998, Berry completed an additional offering of $25.0 million aggregate principal amount of 12.25% Series B Senior Subordinated Notes due 2004 (the "1998 Notes"). The net proceeds to Berry from the sale of the 1998 Notes, after expenses, were $25.2 million. The 1994 Notes and 1998 Notes mature on April 15, 2004 and interest is payable semi-annually on October 15 and April 15 of each year and commenced on October 15, 1994 and October 15, 1998 for the 1994 Notes and 1998 Notes, respectively. Holding and all of Berry's subsidiaries fully, jointly, severally, and unconditionally guarantee on a senior subordinated basis the 1994 Notes and 1998 Notes. There are no nonguarantor subsidiaries. Berry and all of Berry's subsidiaries are 100% owned by Holding. Separate narrative information or financial statements of guarantor subsidiaries have not been included as management believes thy would not be material to investors. Berry is not required to make mandatory redemption or sinking fund payments with respect to the 1994 Notes and 1998 Notes. The 1994 Notes and 1998 Notes may be redeemed at the option of Berry, in whole or in part, at redemption prices ranging from 104.083% in 2001 to 100% in 2002 and thereafter. Upon a change in control, as defined in the indenture entered into in connection with the 1994 Transaction (the "1994 Indenture") and the 1998 Transaction ("1998 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 1994 Notes and 1998 Notes rank pari passu with or senior in right of payment to all existing and future subordinated indebtedness of Berry. The notes rank junior in right of payment to all existing and future senior indebtedness of Berry, including borrowings under the senior credit facility, second lien senior credit facility, and the Nevada Industrial Revenue Bonds. The 1994 Indenture and 1998 Indenture contains certain covenants which, among other things, limit Berry and its subsidiaries' ability to incur debt, merge or consolidate, sell, lease or transfer assets, make dividend payments and engage in transactions with affiliates. Berry 11% Senior Subordinated Notes On July 6, 1999, Berry completed an offering of $75.0 million aggregate principal amount of 11% Berry Plastics Corporation Senior Subordinated Notes, due 2007 (the "1999 Notes"). The net proceeds to Berry from the sale of the 1999 Notes, after expenses, were $72.0 million. The 1999 Notes mature on July 15, 2007 and interest is payable semi-annually on January 15 and July 15 of each year and commenced on January 15, 2000. Holding and all of Berry's subsidiaries fully, jointly, and severally, and unconditionally guarantee on a senior subordinated basis the 1999 Notes. There are no nonguarantor subsidiaries. Berry is not required to make mandatory redemption or sinking fund payments with respect to the 1999 Notes. On or subsequent to July 15, 2003, the 1999 Notes may be redeemed at the option of Berry, in whole or in part, at redemption prices ranging from 105.5% in 2003 to 100% in 2006 and thereafter. Upon a change in control, as defined in the indenture entered into in connection with the 1999 Transaction (the "1999 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. F-11 Notes to Consolidated Financial Statements (continued) Credit Facility The Company has a financing and security agreement (the "Financing Agreement") with a syndicate of lenders led by Bank of America for a senior secured credit facility (the "Credit Facility"). The Financing Agreement amended the prior agreement as additional funds were made available in connection with the acquisition of Poly-Seal. The amendment resulted in an extraordinary charge in fiscal 2000 of $1.0 million of deferred financing and origination costs associated with the Financing Agreement and the prior financing agreement. As of December 30, 2000, the Credit Facility provides the Company with (i) a $70.0 million revolving line of credit ("US Revolver"), subject to a borrowing base formula, (ii) a $2.4 million (using the December 30, 2000 exchange rate) revolving line of credit denominated in British Sterling in the U.K. ("UK Revolver"), subject to a separate borrowing base formula, (iii) a $72.1 million term loan facility, (iv) a $3.5 million (using the December 30, 2000 exchange rate) term loan facility denominated in British Sterling in the U.K. ("UK Term Loan") and (v) a $4.2 million standby letter of credit facility to support the Company's and its subsidiaries' obligations under the Nevada Bonds. At December 30, 2000, the Company had unused borrowing capacity under the Credit Facility's revolving line of credit of approximately $25.1 million. The indebtedness under the Credit Facility is guaranteed by Holding and all of its subsidiaries (other than its subsidiaries in Italy). The obligations of the Company and the subsidiaries under the Credit Facility and the guarantees thereof are secured by substantially all of the assets of such entities. CBP Holdings, S.r.l. has a revolving credit facility (the "Italy Revolver") from Bank of America for $12.7 million (using the December 30, 2000 exchange rate) denominated in Euros. Bank of America also extends working capital financing (the "Italy Working Capital Line") of up to $1.5 million (using the December 30, 2000 exchange rate) denominated in Euros. The full amount available under the Italy Revolver and the Italy Working Capital Line are applied to reduce amounts available under the US Revolver, as does the outstanding balance under the UK Revolver. The Credit Facility matures on January 21, 2002 unless previously terminated by the Company or by the lenders upon an Event of Default as defined in the Financing Agreement. The term loan facility requires periodic payments, varying in amount, through the maturity of the facility. Interest on borrowings under the Credit Facility is based on either (i) the lender's base rate (which is the higher of the lender's prime rate and the federal funds rate plus 0.5%) plus an applicable margin of 0.0% to 0.75% or (ii) eurodollar LIBOR (adjusted for reserves) plus an applicable margin of 2.0% to 2.75%, at the Company's option (8.9% at December 30, 2000 and 8.1% at January 1, 2000). Following receipt of the quarterly financial statements, the agent under the Credit Facility shall change the applicable interest rate margin on loans (other than under the UK Revolver and UK Term Loan) once per quarter to a specified margin determined by the ratio of funded debt to EBITDA of the Company and its subsidiaries. Notwithstanding the foregoing, interest on borrowings under the UK Revolver and the UK Term Loan is based on sterling LIBOR (adjusted for reserves) plus 2.5%. Interest on borrowings under the Italy Revolver and the Italy Working Capital Line is based on EURIBOR plus 2.0%. The Credit Facility contains various covenants that include, among other things: (i) maintenance of certain financial ratios and compliance with certain financial tests and limitations, (ii) limitations on the issuance of additional indebtedness and (iii) limitations on capital expenditures. Second Lien Senior Credit Facility On July 17, 2000, Berry obtained a second lien senior credit facility from General Electric Capital Corporation for an aggregate principal amount of $25.0 million (the "Second Lien Senior Facility"), resulting in net proceeds of $24.3 million after fees and expenses. The proceeds were utilized to reduce amounts then outstanding under the US Revolver. The indebtedness is guaranteed by Holding and all of its subsidiaries (other than its subsidiaries in Italy). The Second Lien Senior Facility is secured by a second priority lien on substantially the same collateral as the collateral for the Credit Facility. The $25.0 million principal amount is due upon the Second Lien Senior Facility's maturity on July 1, 2002. Interest is based on either (i) the lender's base rate (which is the higher of the prime rate and the federal funds rate plus 0.5%) plus an applicable margin of 3.0% or (ii) eurodollar LIBOR (adjusted for reserves) plus an applicable margin of 4.5%, at the Company's option (11.1% at December 30, 2000). The covenants under the Second Lien Senior Facility are substantially the same as those in the Credit Facility. F-12 Notes to Consolidated Financial Statements (continued) Nevada Industrial Revenue Bonds The Nevada Industrial Revenue Bonds bear interest at a variable rate (5.0% at December 30, 2000 and 5.7% at January 1, 2000), require annual principal payments of $0.5 million on April 1, are collateralized by irrevocable letters of credit issued by Bank of America under the Credit Facility and mature in April 2007. Other Future maturities of long-term debt are as follows: 2001, $23,232; 2002, $113,917; 2003, $575; 2004, $125,640; 2005, $500 and $204,407 thereafter. Interest paid was $32,836, $29,759, and $33,236 for 2000, 1999, and 1998, respectively. Interest capitalized was $1,707, $1,447, and $777 for 2000, 1999, and 1998, respectively. Note 6. Lease and Other Commitments Certain property and equipment are leased using capital and operating leases. Capitalized lease property consisted of manufacturing equipment with a cost of $3,589 and $993 and related accumulated amortization of $1,483 and $169 at December 30, 2000, and January 1, 2000, respectively. Capital lease amortization is included in depreciation expense. Total rental expense for operating leases was approximately $9,183, $7,282, and $5,414 for 2000, 1999, and 1998, 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 30, 2000 -------------------------------- Capital Leases Operating Leases -------------- ---------------- 2001 $ 553 $10,482 2002 459 8,740 2003 309 6,821 2004 213 5,645 2005 -- 4,060 Thereafter -- 9,119 -------- ------- 1,534 $44,867 ======= Less: amount representing interest (99) -------- Present value of net minimum lease payments $ 1,435 ========
Note 7. Income Taxes For financial reporting purposes, income (loss) before income taxes and extraordinary item, by tax jurisdiction, is comprised of the following:
December 30, January 1, January 2, 2000 2000 1999 ------------ ---------- ---------- United States $(18,506) $(8,105) $(8,444) Foreign (3,721) (479) 595 -------- ------- ------- $(22,227) $(8,584) $(7,819) ======== ======= =======
F-13 Notes to Consolidated Financial Statements (continued) 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 liabilities and assets at December 30, 2000 and January 1, 2000 are as follows:
December 30, January 1, 2000 2000 ------------ ---------- Deferred tax assets: Allowance for doubtful accounts $ 565 $ 529 Inventory 1,481 1,047 Compensation and benefit accruals 2,412 1,508 Insurance reserves 628 415 Net operating loss carryforwards 17,214 11,943 Alternative minimum tax (AMT) credit carryforwards 3,055 3,055 -------- -------- Total deferred tax assets 25,355 18,497 Valuation allowance (6,607) (3,572) -------- -------- Deferred tax assets, net of valuation allowance 18,748 14,925 Deferred tax liabilities: Depreciation and amortization 19,239 15,428 -------- -------- Net deferred tax liability (491) $ (503) ======== ========
Income tax expense (benefit) consists of the following:
December 30, January 1, January 2, 2000 2000 1999 ------------ ---------- ---------- Current Federal $ -- $ -- $(493) Foreign -- 80 152 State 207 468 92 Deferred Federal -- -- -- Foreign (349) 6 -- State -- -- -- ----- ---- ----- Income tax expense (benefit) (142) $554 $(249) ===== ==== =====
Holding has unused operating loss carryforwards of approximately $44.0 million for federal and state income tax purposes which begin to expire in 2010. AMT credit carryforwards are available to Holding indefinitely to reduce future years' federal income taxes. Income taxes paid during 2000, 1999, and 1998 approximated $329, $860, and $526, respectively. F-14 Notes to Consolidated Financial Statements (continued) A reconciliation of income tax expense (benefit), computed at the federal statutory rate, to income tax expense, as provided for in the financial statements, is as follows:
Year Ended --------------------------------------- December 30, January 1, January 2, 2000 2000 1999 ------------ ---------- ---------- Income tax expense (benefit) computed at statutory rate $(7,557) $(2,919) $(2,658) State income tax expense, net of federal benefit (403) 309 90 Amortization of goodwill 2,262 1,292 339 Expenses not deductible for income tax purposes 119 248 432 Change in valuation allowance 5,340 1,773 1,677 Other 97 (149) (129) ------- ------- ------- Income tax expense (benefit) $ (142) $ 554 $ (249) ======= ======= =======
Note 8. Employee Retirement Plans Berry sponsors a defined contribution 401(k) retirement plan 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 this plan was approximately $1,301, $1,057, and $933 for 2000, 1999, and 1998, respectively. Note 9. Stockholders' Equity Common Stock On June 18, 1996, Holding consummated the transaction described below (the "1996 Transaction"). BPC Mergerco, Inc. ("Mergerco"), a wholly owned subsidiary of Holding, was organized by Atlantic Equity Partners International II, L.P. ("International"), J.P. Morgan Partners (SBIC), LLC (formerly known as Chase Venture Capital Associates, L.P.) ("JPMP(SBIC)"), and certain other institutional investors to effect the acquisition of a majority of the outstanding capital stock of Holding. Pursuant to the terms of a Common Stock Purchase Agreement dated as of June 12, 1996 each of International, JPMP(SBIC) and certain other equity investors (collectively the "Common Stock Purchasers") subscribed for shares of common stock of Mergerco. In addition, pursuant to the terms of a Preferred Stock Purchase Agreement dated as of June 12, 1996 (the "Preferred Stock Purchase Agreement"), JPMP(SBIC) and an additional institutional investor (the "Preferred Stock Purchasers") purchased shares of preferred stock of Mergerco (the "Preferred Stock") and warrants (the "1996 Warrants") to purchase shares of common stock of Mergerco. Immediately after the purchase of the common stock, the preferred stock and the 1996 Warrants of Mergerco, Mergerco merged (the "Merger") with and into Holding, with Holding being the surviving corporation. Upon the consummation of the Merger: each share of the Class A Common Stock, $.00005 par value, and Class B Common Stock, $.00005 par value, of Holding and certain privately-held warrants exercisable for such Class A and Class B Common Stock were converted into the right to receive cash equal to the purchase price per share for the common stock into which such warrants were exercisable less the amount of the nominal exercise price therefor, and all other classes of common stock of Holding, a majority of which was held by certain members of management, were converted into shares of common stock of the surviving corporation. In addition, upon the consummation of the Merger, the holders of the warrants (the "1994 Warrants") to purchase capital stock of Holding that were issued in connection with the 1994 Transaction became entitled to receive cash equal to the purchase price per share for the common stock into which such warrants were exercisable less the amount of the exercise price therefor. The Company's common stock shareholders who held common stock immediately preceding the 1996 Transaction retained 78% of the common stock. The authorized capital stock of Holding consists of 4,700,000 shares of capital stock, including 2,500,000 shares of Common Stock, $.01 par value (the "Holding Common Stock"). Of the 2,500,000 shares of Holding Common Stock, 500,000 shares are designated Class A Voting Common Stock (the "Class A Voting Stock"), 500,000 shares are designated Class A Nonvoting Common Stock (the "Class A Nonvoting Stock"), 500,000 shares are designated Class B Voting Common Stock (the "Class B Voting Stock"), 500,000 shares are designated Class B Nonvoting Common Stock (the "Class B Nonvoting Stock"), and 500,000 shares are designated Class C Nonvoting Common Stock (the "Class C Nonvoting Stock"). F-15 Notes to Consolidated Financial Statements (continued) Preferred Stock And Warrants In June 1996, for aggregate consideration of $15.0 million, Holding issued units (the "Units") comprised of Series A Senior Cumulative Exchangeable Preferred Stock, par value $.01 per share (the "Preferred Stock"), and detachable warrants to purchase shares of Class B Common Stock (voting and non-voting) constituting 6% of the issued and outstanding Common Stock of all classes, determined on a fully-diluted basis (the "Warrants"). Dividends accrue at a rate of 14% per annum, compounding and payable quarterly in arrears (each date of payment, a "Dividend Payment Date") and will accumulate until declared and paid. Dividends declared and accruing prior to the first Dividend Payment Date occurring after the sixth anniversary of the issue date (the "Cash Dividend Date") may, at the option of Holding, be paid in cash in full or in part or accrue quarterly on a compound basis. Thereafter, all dividends are payable in cash in arrears. The dividend rate is subject to increase to a rate of (i) 16% per annum if (and for so long as) Holding fails to declare and pay dividends in cash for any quarterly period following the Cash Dividend Date and (ii) 15% per annum if (and for so long as) Holding fails to comply with its obligations relating to the rights and preferences of the Preferred Stock. If Holding fails to pay in full, in cash, (a) all accrued and unpaid dividends on or prior to the twelfth anniversary of the issue date or (b) all accrued dividends on any Dividend Payment Date following the twelfth anniversary of the issue date, the holders of Preferred Stock will be permitted to elect a majority of the Board of Directors of Holding. The Preferred Stock ranks prior to all other classes of stock of Holding upon liquidation and is entitled to receive, out of assets available for distribution, cash in the aggregate amount of $15.0 million, plus all accrued and unpaid dividends thereon. Subject to the terms of the 1996 Indenture, on any Dividend Payment Date, Holding has the option of exchanging the Preferred Stock, in whole but not in part, for Senior Subordinated Exchange Notes, at the rate of $25 in principal amount of notes for each $25 of liquidation preference of Preferred Stock held; provided, however, that no shares of Preferred Stock may be exchanged for so long as any shares of Preferred Stock are held by JPMP(SBIC) or its affiliates. Upon such exchange, Holding will be required to pay in cash all accrued and unpaid dividends. Pursuant to the Preferred Stock Purchase Agreement, the holders of Preferred Stock and Warrants have unlimited incidental registration rights (subject to cutbacks under certain circumstances). The exercise price of the Warrants is $.01 per Warrant and the Warrants are exercisable immediately upon issuance. All unexercised warrants will expire on the tenth anniversary of the issue date. The number of shares issuable upon exercise of a Warrant are subject to anti-dilution adjustments upon the occurrence of certain events. In conjunction with the Venture Packaging acquisition, Holding authorized and issued 200,000 shares of Series B Cumulative Preferred Stock to certain selling shareholders of Venture Packaging. The Preferred Stock has a stated value of $25 per share, and dividends accrue at a rate of 14.75% per annum and will accumulate until declared and paid. The Preferred Stock ranks junior to the Series A Preferred Stock and prior to all other capital stock of Holding. In addition, Warrants to purchase 9,924 shares of Class B Non-Voting Common Stock at $108 per share were issued to the same selling shareholders of Venture Packaging. In connection with the Poly-Seal acquisition, Holding issued 1,000,000 shares of Series A-1 Preferred Stock to JPMP(SBIC) and The Northwestern Mutual Life Insurance Company (collectively, the "Purchasers"). The Series A-1 Preferred Stock has a stated value of $25 per share, and dividends accrue at a rate of 14% per annum and will accumulate until declared and paid. The Series A-1 Preferred Stock ranks pari-passu to the Series A Preferred Stock and prior to all other capital stock of Holding. In addition, Warrants to purchase an aggregate of 25,997 shares of Class B Non-Voting Common Stock at $0.01 per share were issued to the Purchasers. Stock Option Plan Pursuant to the provisions of the BPC Holding Corporation 1996 Stock Option Plan (the "Option Plan") as amended, whereby 76,620 shares have been reserved for future issuance, Holding has granted options to certain officers and key employees to acquire shares of Class B Nonvoting Common Stock. These options are subject to various agreements, which among other things, set forth the class of stock, option price and performance thresholds to determine exercisability and vesting requirements. The Option Plan expires October 3, 2003 or such earlier date on which the Board of Directors of Holding, in its sole discretion, determines. Option prices range from $100 to $226 per share. Options granted under the Option Plan typically expire after seven years and vest over a five-year period with half of each person's award based on continued employment and half based on the Company achieving financial performance targets. F-16 Notes to Consolidated Financial Statements (continued) 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 Option Plan is as follows:
December 30, 2000 January 1, 2000 January 2, 1999 --------------------- --------------------- -------------------- Weighted Weighted Weighted Number Average Number Average Number Average Of Exercise Of Exercise Of Exercise Shares Price Shares Price Shares Price --------------------- --------------------- -------------------- Options outstanding, beginning of year 51,479 107 50,729 $ 105 47,708 $101 Options granted 16,225 226 1,500 170 11,005 122 Options exercised -- -- -- -- -- -- Options canceled (6,930) 158 (750) 115 (7,984) 100 ------ ------ ------ Options outstanding, end of year 60,774 132 51,479 107 50,729 105 ====== ====== ====== Option price range at end of year $100 - $226 $100 - $170 $100 - $122 Options exercisable at end of year 34,641 30,091 25,191 Options available for grant at year end 15,846 141 891 Weighted average fair value of options granted during year $226 $170 $122
The following table summarizes information about the options outstanding at December 30, 2000:
Weighted Range of Weighted Average Average Number Exercise Number Outstanding Remaining Contractual Exercise Exercisable at Prices At December 30, 2000 Life Price December 30, 2000 - -------------------------------------------------------------------------------------------------------------------------- $100 - $122 45,649 2 years $103 32,978 $170 - $226 15,125 6 years $216 1,663
Disclosure of pro forma financial information is required by Statement 123 as if Holding had accounted for its employee stock options using the fair value method as defined by the Statement. 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 30, January 1, January 2, 2000 2000 1999 ------------ ---------- ---------- Risk-free interest rate 6.5% 7.0% 6.4% Dividend yield 0.0% 0.0% 0.0% Volatility factor .20 .19 .20 Expected option life 6.5 years 5.0 years 5.0 years
F-17 Notes to Consolidated Financial Statements (continued) 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 loss 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 Operations. Holding's pro forma net losses giving effect to the estimated compensation expense related to stock options are as follows:
Year Ended ---------------------------------------------- December 30, January 1, January 2, 2000 2000 1999 ------------ ---------- ---------- Pro forma net loss $(22,492) $(9,400) $(7,798)
Stockholders Agreements Holding entered into a stockholders agreement (the "Stockholders Agreement") dated as of June 18, 1996, as amended with the Common Stock Purchasers, certain management stockholders and, for limited purposes thereunder, the Preferred Stock Purchasers. The Stockholders Agreement grants certain rights including, but not limited to, designation of members of Holding's Board of Directors, the initiation of an initial public offering of equity securities of the Company or a sale of Holding. The agreement also restricts certain transfers of Holding's equity. Holding has an agreement with its management stockholders and International that contains provisions (i) limiting transfers of equity by the management stockholders; (ii) requiring the management stockholders to sell their shares as designated by Holding or International upon the consummation of certain transactions; (iii) granting the management stockholders certain rights of co-sale in connection with sales by International; (iv) granting rights to repurchase capital stock from the management stockholders upon the occurrence of certain events; and (v) requiring the management stockholders to offer shares to Holding prior to any permitted transfer. Note 10. Related Party Transactions First Atlantic Capital, Ltd. ("First Atlantic") is engaged by International to provide certain financial and management consulting services for which it receives annual fees. The Company is party to a management agreement (the "Management Agreement") with First Atlantic. Pursuant to the Management Agreement, First Atlantic received advisory fees of approximately $140, $180, $690, and $580 in July 1998, October 1998, July 1999 and May 2000, respectively, for originating, structuring and negotiating the acquisitions of Berry UK, Knight, Cardinal, and Poly-Seal, respectively. In consideration of financial advisory and management consulting services, the Company paid First Atlantic fees and expenses of $821, $792 and $835 for fiscal 2000, 1999, and 1998, respectively. Note 11. Fair Value of Financial Instruments Information Holding's and the Company's financial instruments generally consist of cash and cash equivalents and long-term debt. The carrying amounts of Holding's and the Company's financial instruments approximate fair value at December 30, 2000, except for the 1994 Notes, 1996 Notes, 1998 Notes and 1999 Notes for which the fair value was below the carrying value by approximately $15.7 million, $56.6 million, $4.8 million and $21.0 million, respectively. F-18 Notes to Consolidated Financial Statements (continued) Note 12. Operating Segments The Company has three reportable segments: containers, overcaps and closures, and drink cups and housewares products. The Company evaluates performance and allocates resources based on operating income before depreciation and amortization of intangibles adjusted to exclude (i) stock option accounting, (ii) other non-recurring or "one-time" expenses, and (iii) management fees and reimbursed expenses paid to First Atlantic ("Adjusted EBITDA"). The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.
Year Ended ------------------------------------------- December 30, January 1, January 2, 2000 2000 1999 ------------ ---------- ---------- Net sales: Containers $ 231,209 $ 188,696 $ 154,048 Overcaps and closures 112,202 81,035 56,362 Drink cups and housewares 64,677 59,103 61,420 Adjusted EBITDA: Containers 47,578 41,303 32,742 Overcaps and closures 23,646 20,476 17,226 Drink cups and housewares 9,167 9,762 9,796 Total assets: Containers 189,129 147,931 133,667 Overcaps and closures 178,768 133,230 76,076 Drink cups and housewares 45,225 59,646 45,574 Reconciliation of Adjusted EBITDA to loss before income taxes: Adjusted EBITDA for reportable segments $ 80,391 $ 71,541 $ 59,764 Net interest expense (51,457) (40,817) (34,556) Depreciation (31,569) (24,580) (20,690) Amortization (10,579) (7,215) (4,139) Loss on disposal of property and equipment (877) (1,416) (1,865) One-time expenses (6,804) (5,224) (4,861) Stock option accounting (459) -- (600) Management fees (873) (873) (872) --------- --------- --------- Loss before income taxes and extraordinary item $ (22,227) $ (8,584) $ (7,819) ========= ========= =========
One time-expenses represent non-recurring expenses that relate to recently acquired businesses, plant consolidations, and litigation associated with a drink cup patent. F-19 Notes to Consolidated Financial Statements (continued) Note 13. Condensed Consolidating Financial Information (In thousands) Holding conducts its business through its wholly owned subsidiary, Berry. Holding and all of Berry's subsidiaries fully, jointly, severally, and unconditionally guarantee on a senior subordinated basis the 1994 Notes, 1998 Notes, and 1999 Notes issued by Berry. There are no nonguarantor subsidiaries with respect to the notes issued by Berry. Holding's 1996 Notes are not guaranteed by Berry or any of Berry's wholly owned subsidiaries. The 1994 Indenture, 1998 Indenture, and 1999 Indenture restrict, and the Credit Facility prohibits, Berry's ability to pay any dividend or make any distribution of funds to Holding to satisfy interest and other obligations on Holding's 1996 Notes. Berry and all of Berry's subsidiaries are 100% 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 30, 2000 and January 1, 2000 and for the fiscal years ended December 30, 2000, January 1, 2000, and January 2, 1999. The equity method has been used with respect to investments in subsidiaries.
December 30, 2000 -------------------------------------------------------------------------- BPC Holding Berry Plastics Combined Corporation Corporation Guarantor Consolidating (Parent) (Issuer) Subsidiaries Adjustments Consolidated -------- -------- ------------ ----------- ------------ Consolidating Balance Sheets Current assets $ 220 $ 32,290 $ 72,192 $ -- $ 104,702 Net property and equipment -- 55,221 124,583 -- 179,804 Other noncurrent assets 8,226 267,840 113,455 (260,905) 128,616 --------- -------- --------- --------- --------- Total assets $ 8,446 $355,351 $ 310,230 $(260,905) $ 413,122 ========= ======== ========= ========= ========= Current liabilities $ 661 $ 50,968 $ 32,603 $ -- $ 84,232 Noncurrent liabilities 144,938 299,694 312,691 (290,436) 466,887 Equity (deficit) (137,153) 4,689 (35,064) 29,531 (137,997) --------- -------- --------- --------- --------- Total liabilities and equity (deficit) $ 8,446 $355,351 $ 310,230 $(260,905) $ 413,122 ========= ======== ========= ========= ========= January 1, 2000 -------------------------------------------------------------------------- BPC Holding Berry Plastics Combined Corporation Corporation Guarantor Consolidating (Parent) (Issuer) Subsidiaries Adjustments Consolidated -------- -------- ------------ ----------- ------------ Consolidating Balance Sheets Current assets $ 703 $ 37,296 $ 50,873 $ -- $ 88,872 Net property and equipment -- 53,452 93,340 -- 146,792 Other noncurrent assets (9,861) 204,656 88,539 (178,191) 105,143 --------- --------- -------- --------- --------- Total assets $ (9,158) $ 295,404 $232,752 $(178,191) $ 340,807 ========= ========= ======== ========= ========= Current liabilities $ 1,033 $ 50,983 $ 26,329 $ -- $ 78,345 Noncurrent liabilities 122,957 265,862 198,172 (191,058) 395,933 Equity (deficit) (133,148) (21,441) 8,251 12,867 (133,471) --------- --------- -------- --------- --------- Total liabilities and equity (deficit) $ (9,158) $ 295,404 $232,752 $(178,191) $ 340,807 ========= ========= ======== ========= =========
F-20 Notes to Consolidated Financial Statements (continued)
Year Ended ----------------------------------------------------------------------------- December 30, 2000 ----------------------------------------------------------------------------- BPC Holding Berry Plastics Combined Corporation Corporation Guarantor Consolidating (Parent) (Issuer) Subsidiarie Adjustments Consolidated -------- -------- ----------- ----------- ------------ Consolidating Statements of Operations Net sales $ -- $ 158,055 $ 250,033 $ -- $ 408,088 Cost of goods sold -- 108,739 203,380 -- 312,119 --------- --------- --------- --------- --------- Gross margin -- 49,316 46,653 -- 95,969 Operating expenses 616 23,303 41,943 -- 65,862 --------- --------- --------- --------- --------- Operating income (616) 26,013 4,710 -- 30,107 Other expenses -- 258 619 -- 877 Interest expense 16,025 11,221 24,211 -- 51,457 Income taxes (benefit) 18 168 (328) -- (142) Extraordinary item -- 1,022 -- -- 1,022 Equity in net (income) loss from subsidiary 6,448 19,792 -- (26,240) -- --------- --------- --------- --------- --------- Net income (loss) $ (23,107) $ (6,448) $ (19,792) $ 26,240 $ (23,107) ========= ========= ========= ========= ========= Consolidating Statements of Cash Flows Net income (loss) $ (23,107) $ (6,448) $ (19,792) $ 26,240 $ (23,107) Non-cash expenses 16,958 13,332 32,360 -- 62,650 Equity in net (income) loss from subsidiary 6,448 19,792 -- (26,240) -- Changes in working capital (646) 2,931 (5,722) -- (3,437) --------- --------- --------- --------- --------- Net cash provided by (used for) operating activities (347) 29,607 6,846 -- 36,106 Net cash used for investing activities -- (78,328) (30,387) -- (108,715) Net cash provided by (used for) financing activities (136) 48,307 23,866 -- 72,037 Effect on exchange rate changes on cash -- 80 -- -- 80 --------- --------- --------- --------- --------- Net increase (decrease) in cash and cash equivalents (483) (334) 325 -- (492) Cash and cash equivalents at beginning of year 703 976 867 -- 2,546 --------- --------- --------- --------- --------- Cash and cash equivalents at end of year $ 220 $ 642 $ 1,192 $ -- $ 2,054 ========= ========= ========= ========= ========= Year Ended ----------------------------------------------------------------------------- January 1, 2000 ----------------------------------------------------------------------------- BPC Holding Berry Plastics Combined Corporation Corporation Guarantor Consolidating (Parent) (Issuer) Subsidiarie Adjustments Consolidated -------- -------- ----------- ----------- ------------ Consolidating Statements of Operations Net sales $ -- $ 149,901 $ 178,933 $ -- $ 328,834 Cost of goods sold -- 98,950 142,117 -- 241,067 --------- --------- --------- --------- --------- Gross margin -- 50,951 36,816 -- 87,767 Operating expenses 70 23,638 30,410 -- 54,118 --------- --------- --------- --------- --------- Operating income (70) 27,313 6,406 -- 33,649 Other expenses -- 21 1,395 -- 1,416 Interest expense 13,845 8,389 18,583 -- 40,817 Income taxes (benefit) 18 425 111 -- 554 Extraordinary item -- -- -- -- -- Equity in net (income) loss from subsidiary (4,795) 13,683 -- (8,888) -- --------- --------- --------- --------- --------- Net income (loss) $ (9,138) $ 4,795 $ (13,683) $ 8,888 $ (9,138) ========= ========= ========= ========= ========= Consolidating Statements of Cash Flows Net income (loss) $ (9,138) $ 4,795 $ (13,683) $ 8,888 $ (9,138) Non-cash expenses 14,135 10,663 23,986 -- 48,784 Equity in net (income) loss from subsidiary (4,795) 13,683 -- (8,888) -- Changes in working capital (161) 90 (3,574) -- (3,645) --------- --------- --------- --------- --------- Net cash provided by (used for) operating activities 41 29,231 6,729 -- 36,001 Net cash used for investing activities -- (91,918) (15,060) -- (106,978) Net cash provided by (used for) financing activities 40 63,207 7,888 -- 71,135 Effect on exchange rate changes on cash -- 70 -- -- 70 --------- --------- --------- --------- --------- Net increase (decrease) in cash and cash equivalents 81 590 (443) -- 228 Cash and cash equivalents at beginning of year 622 386 1,310 -- 2,318 --------- --------- --------- --------- --------- Cash and cash equivalents at end of year $ 703 $ 976 $ 867 $ -- $ 2,546 ========= ========= ========= ========= ========= Year Ended ------------------------------------------------------------------------------ January 2, 1999 ------------------------------------------------------------------------------ BPC Holding Berry Plastics Combined Corporation Corporation Guarantor Consolidating (Parent) (Issuer) Subsidiarie Adjustments Consolidated -------- -------- ----------- ----------- ------------ Consolidating Statements of Operations Net sales $ -- $ 140,856 $ 130,974 $ -- $ 271,830 Cost of goods sold -- 91,763 107,464 -- 199,227 --------- --------- --------- --------- --------- Gross margin -- 49,093 23,510 -- 72,603 Operating expenses 748 22,401 20,852 -- 44,001 --------- --------- --------- --------- --------- Operating income (748) 26,692 2,658 -- 28,602 Other expenses -- 390 1,475 -- 1,865 Interest expense 12,721 12,060 9,775 -- 34,556 Income taxes (benefit) -- (249) -- -- (249) Extraordinary item -- -- -- -- -- Equity in net (income) loss from subsidiary (5,899) 8,592 -- (2,693) -- --------- --------- --------- --------- --------- Net income (loss) $ (7,570) $ 5,899 $ (8,592) $ 2,693 $ (7,570) ========= ========= ========= ========= ========= Consolidating Statements of Cash Flows Net income (loss) $ (7,570) $ 5,899 $ (8,592) $ 2,693 $ (7,570) Non-cash expenses 14,157 10,117 17,135 -- 41,409 Equity in net (income) loss from subsidiary (5,899) 8,592 -- (2,693) -- Changes in working capital (596) 1,107 (219) -- 292 --------- --------- --------- --------- --------- Net cash provided by (used for) operating activities 92 25,715 8,324 -- 34,131 Net cash used for investing activities -- (37,012) (15,108) -- (52,120) Net cash provided by (used for) financing activities (178) 10,733 7,064 -- 17,619 Effect on exchange rate changes on cash -- -- -- -- -- --------- --------- --------- --------- --------- Net increase (decrease) in cash and cash equivalents (86) (564) 280 -- (370) Cash and cash equivalents at beginning of year 708 950 1,030 -- 2,688 --------- --------- --------- --------- --------- Cash and cash equivalents at end of year $ 622 $ 386 $ 1,310 $ -- $ 2,318 ========= ========= ========= ========= =========
F-21 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 30th day of March, 2001. BPC HOLDING CORPORATION By /s/ Martin R. Imbler -------------------------------------- Martin R. Imbler President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature Title Date --------- ----- ---- /s/ Roberto Buaron Chairman of the Board of Directors March 30, 2001 - ------------------------------------ Roberto Buaron President and Director (Principal Executive /s/ Martin R. Imbler Officer) March 30, 2001 - ------------------------------------ Martin R. Imbler Executive Vice President, Chief Financial Officer, Treasurer, and Secretary (Principal /s/ James M. Kratochvil Financial and Accounting Officer) March 30, 2001 - ------------------------------------ James M. Kratochvil /s/ David M. Clarke Director March 30, 2001 - ------------------------------------ David M. Clarke /s/ Lawrence G. Graev Director March 30, 2001 - ------------------------------------ Lawrence G. Graev /s/ Donald J. Hofmann, Jr. Director March 30, 2001 - ------------------------------------ Donald J. Hofmann, Jr. Vice President, Assistant Secretary, and /s/ Joseph. S. Levy Director March 30, 2001 - ------------------------------------ Joseph S. Levy /s/ Mathew J. Lori Director March 30, 2001 - ------------------------------------ Mathew J. Lori
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 30th day of March, 2001. BERRY PLASTICS CORPORATION By /s/ Martin R. Imbler -------------------------------------- Martin R. Imbler President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature Title Date --------- ----- ---- /s/ Roberto Buaron Chairman of the Board of Directors March 30, 2001 - ------------------------------------ Roberto Buaron President, Chief Executive Officer and Director /s/ Martin R. Imbler (Principal Executive Officer) March 30, 2001 - ------------------------------------ Martin R. Imbler Executive Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial and /s/ James M. Kratochvil Accounting Officer) March 30, 2001 - ------------------------------------ James M. Kratochvil /s/ Joseph. S. Levy Vice President, Assistant Secretary, and Director March 30, 2001 - ------------------------------------ Joseph S. Levy Executive Vice President, Chief Operating Officer, /s/ Ira G. Boots and Director March 30, 2001 - ------------------------------------ Ira G. Boots /s/ David M. Clarke Director March 30, 2001 - ------------------------------------ David M. Clarke /s/ Lawrence G. Graev Director March 30, 2001 - ------------------------------------ Lawrence G. Graev /s/ Donald J. Hofmann, Jr. Director March 30, 2001 - ------------------------------------ Donald J. Hofmann, Jr. /s/ Mathew J. Lori Director March 30, 2001 - ------------------------------------ Mathew J. Lori
Supplemental Information To Be Furnished With Reports Filed Pursuant To Section 15(d) Of The Act By Registrant Which Has Not Registered Securities Pursuant To Section 12 Of The Act The Registrants have not sent any annual report or proxy material to securityholders. BPC Holding Corporation Schedule II -- Valuation and Qualifying Accounts (In thousands)
Charged to Balance at Charged to Other Balance at Beginning Costs and Accounts - Deductions - End of Description of Year Expenses Describe Describe Year - -------------------------------- ----------- ---------- ------------- -------------- ----------- Year ended December 30, 2000 Allowance for doubtful accounts $1,386 $ 79 $ 510(2) $ 251(1) $1,724 ====== ====== ====== ====== ====== Year ended January 1, 2000: Allowance for doubtful accounts $1,651 $ 324 $ 456(2) $1,045(1) $1,386 ====== ====== ====== ====== ====== Year ended January 2, 1999: Allowance for doubtful accounts $1,038 $ 875 $ 280(2) $ 542(1) $1,651 ====== ====== ====== ====== ======
- ---------- (1) Uncollectible accounts written off, net of recoveries. (2) Primarily relates to purchase of accounts receivable and related allowance through acquisitions. S-1 INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT ------- ---------------------- 2.1 Asset Purchase Agreement dated February 12, 1992, among Berry Plastics Corporation (the "Company"), Berry Iowa, Berry Carolina, Inc., Genpak Corporation, a New York corporation, and Innopac International Inc., a public Canadian corporation (filed as Exhibit 10.1 to the Registration Statement on Form S-1 filed on February 24, 1994 (the "Form S-1") and incorporated herein by reference) 2.2 Asset Purchase Agreement dated December 24, 1994, between the Company and Berry Plastics, Inc. (filed as Exhibit 10.2 to the Form S-1 and incorporated herein by reference) 2.3 Asset Purchase Agreement dated March 1, 1995, among Berry Sterling Corporation, Sterling Products, Inc. and the stockholders of Sterling Products, Inc. (filed as Exhibit 2.3 to the Annual Report on Form 10-K filed on March 31, 1995 (the "1994 Form 10-K") and incorporated herein by reference) 2.4 Asset Purchase Agreement dated December 21, 1995, among Berry Tri-Plas Corporation, Tri-Plas, Inc. and Frank C. DeVore (filed as Exhibit 2.4 to the Annual Report on Form 10-K filed on March 28, 1996 (the "1995 Form 10-K") and incorporated herein by reference) 2.5 Asset Purchase Agreement dated January 23, 1996, between the Company and Alpha Products, Inc. (filed as Exhibit 2.5 to the 1995 Form 10-K and incorporated herein by reference) 2.6 Stock Purchase and Recapitalization Agreement dated as of June 12, 1996, by and among Holding, BPC Mergerco, Inc. ("Mergerco") and the other parties thereto (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on July 3, 1996 (the "Form 8-K") and incorporated herein by reference) 2.7 Preferred Stock and Warrant Purchase Agreement dated as of June 12, 1996, by and among Holding, Mergerco, Chase Venture Capital Associates, L.P. ("CVCA") and The Northwestern Mutual Life Insurance Company ("Northwestern") (filed as Exhibit 2.2 to the Form 8-K and incorporated herein by reference) 2.8 Agreement and Plan of Merger dated as of June 18, 1996, by and between Holding and Mergerco (filed as Exhibit 2.3 to the Form 8-K and incorporated herein by reference) 2.9 Certificate of Merger of Mergerco with and into Holding, dated as of June 18, 1996 (filed as Exhibit 2.9 to the Registration Statement on Form S-4 filed on July 17, 1996 (the "1996 Form S-4") and incorporated herein by reference) 2.10 Agreement and Plan of Reorganization dated as of January 14, 1997 (the "PackerWare Reorganization Agreement"), among the Company, PackerWare Acquisition Corporation, PackerWare Corporation and the shareholders of PackerWare (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on February 4, 1997 (the "1997 8-K") and incorporated herein by reference) 2.11 Amendment to the PackerWare Reorganization Agreement dated as of January 20, 1997 (filed as Exhibit 2.2 to the 1997 8-K and incorporated herein by reference) 2.12 Asset Purchase Agreement dated as of January 17, 1997, among the Company, Container Industries, Inc. and the shareholders of Container Industries, Inc. (filed as Exhibit 2.12 to the Annual Report on Form 10-K for the fiscal year ended December 28, 1996 (the "1996 Form 10-K) and incorporated herein by reference) 2.13 Agreement and Plan of Reorganization dated as of January 14, 1997, as amended on January 20, 1997, among the Company, PackerWare Acquisition Corporation, PackerWare Corporation and the Shareholders of PackerWare Corporation (filed as Exhibits 2.1 and 2.2 to the Current Report on Form 8-K filed February 3, 1997 and incorporated herein by reference) 2.14 Asset Purchase Agreement dated May 13, 1997, among the Company, Berry Plastics Design Corporation, Virginia Design Packaging Corp. and the shareholders of Virginia Design Packaging Corp. (filed as Exhibit 2.14 to the Annual Report on Form 10-K for the fiscal year ended December 27, 1997 (the "1997 Form 10-K") and incorporated herein by reference) 2.15 Agreement for the Sale and Purchase of the Entire Issued Share Capital of Norwich Injection Moulders Limited dated July 2, 1998, among the Company, NIM Holdings Limited and the persons listed on Schedule 1 thereto (filed as Exhibit 2.15 to Amendment No. 1 to Form S-4 filed on December 29, 1998 (the "1998 Amended Form S-4") and incorporated herein by reference) 2.16 Stock Purchase Agreement dated June 18, 1999 among the Company, CPI Holding, Cardinal and the Shareholders of CPI Holding (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on July 21, 1999 and incorporated herein by reference) 2.17 Merger Agreement, dated May 5, 2000, among the Company, Berry Plastics Acquisition Corporation, Poly-Seal and certain shareholders of Poly-Seal (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on May 9, 2000 and incorporated herein by reference) *2.18 Share and Quota Purchase Agreement, dated July 27, 2000, between the Company and Annamaria Agnottoli, Guisepe Garibaldi, Francesco Garibaldi, Maddalena Garibaldi, and Maria Lorenza Zambon. *3.1 Amended and Restated Certificate of Incorporation of Holding (filed as Exhibit 3.1 to the 1996 Form S-4 and incorporated herein by reference) 3.2 By-laws of Holding (filed as Exhibit 3.2 to the Form S-1 and incorporated herein by reference) 3.3 Certificate of Incorporation of the Company (filed as Exhibit 3.3 to the Form S-1 and incorporated herein by reference) 3.4 By-laws of the Company (filed as Exhibit 3.4 to the Form S-1 and incorporated herein by reference) 3.5 Certificate of Designation, Preferences, and Rights of Series B Cumulative Preferred Stock of Holding (filed as Exhibit 3.10 to the 1997 Form 10-K and incorporated herein by reference) *3.6 Certificate of Amendment of Certificate of Designation, Preferences and Rights of Series B Cumulative Preferred Stock of Holding 4.1 Indenture dated April 21, 1994 between the Company and United States Trust Company of New York, as Trustee (the "1994 Indenture") (including the form of Note and Guarantees as Exhibits A and B thereto respectively) (filed as Exhibit 4.1 to the Form S-1 and incorporated herein by reference) 4.2 Warrant Agreement between Holding and United States Trust Company of New York, as Warrant Agent (filed as Exhibit 4.2 to the Form S-1 and incorporated herein by reference) 4.3 Indenture dated as of June 18, 1996, between Holding and First Trust of New York, National Association, as Trustee (the "Trustee"), relating to Holding's Series A and Series B 12.5% Senior Secured Notes Due 2006 (filed as Exhibit 4.3 to the 1996 Form S-4 and incorporated herein by reference) 4.4 Pledge, Escrow and Disbursement Agreement dated as of June 18, 1996, by and among Holding, the Trustee and First Trust of New York, National Association, as Escrow Agent (filed as Exhibit 4.4 to the 1996 Form S-4 and incorporated herein by reference) 4.5 Holding Pledge and Security Agreement dated as of June 18, 1996, between Holding and First Trust of New York, National Association, as Collateral Agent (filed as Exhibit 4.5 to the 1996 Form S-4 and incorporated herein by reference) 4.6 Registration Rights Agreement dated as of June 18, 1996, by and among Holding and Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") (filed as Exhibit 4.6 to the 1996 Form S-4 and incorporated herein by reference) 4.7 BPC Holding Corporation 1996 Stock Option Plan (filed as Exhibit 4.7 to the 1996 Form 10-K and incorporated herein by reference) 4.8 Form of Nontransferable Performance-Based Incentive Stock Option Agreement (filed as Exhibit 4.7 to the 1996 Form 10-K and incorporated herein by reference) 4.9 Indenture dated as of August 24, 1998 among the Company, the Guarantors and United States Trust Company of New York, as trustee (the "1998 Indenture") (filed as Exhibit 4.9 to the 1998 Amended Form S-4 and incorporated herein by reference) 4.10 Registration Rights Agreement dated as of August 24, 1998 by and among the Company, the Guarantors and DLJ (filed as Exhibit 4.10 to the 1998 Amended Form S-4 and incorporated herein by reference) 4.11 Indenture dated as of July 6, 1999 among the Company, the Guarantors and United States Trust Company of New York , as trustee (the "1999 Indenture") (filed as Exhibit 10.27 to the Registration Statement on Form S-4 (Registration No. 333-85739) filed on August 23, 1999 (the "1999 Form S-4") and incorporated herein by reference) 4.12 Registration Rights Agreement dated as of July 6, 1999 by and among the Company, the Guarantors, DLJ and Chase Securities, Inc. (filed as Exhibit 10.28 to the 1999 Form S-4 and incorporated herein by reference) *4.13 Fourth Supplemental Indenture to the 1994 Indenture dated as of June 10, 1997 among the Company, Holding, Berry Iowa Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, AeroCon, Inc., PackerWare Corporation, Berry Plastics Design Corporation and United States Trust Company of New York, as trustee *4.14 Tenth Supplemental Indenture to the 1994 Indenture dated as of October 2, 2000 among the Company, Holding, Berry Iowa Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, AeroCon, Inc., PackerWare Corporation, Berry Plastics Design Corporation, Venture Packaging, Inc., Berry Plastics Technical Services, Inc., Venture Packaging Midwest, Inc., NIM Holdings Limited, Berry Plastics U.K. Limited, Norwich Acquisition Limited, Knight Plastics, Inc., CPI Holding Corporation, Cardinal Packaging, Inc., Poly-Seal Corporation, Berry Plastics Acquisition Corporation II, Berry Plastics Acquisition Corporation III and United States Trust Company of New York, as trustee (together with a schedule of previous supplemental indentures to the 1994 Indenture) *4.15 Fourth Supplemental Indenture to the 1998 Indenture dated as of October 2, 2000 among the Company, Holding, Berry Iowa Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, AeroCon, Inc., PackerWare Corporation, Berry Plastics Design Corporation, Venture Packaging, Inc., Berry Plastics Technical Services, Inc., Venture Packaging Midwest, Inc., NIM Holdings Limited, Berry Plastics U.K. Limited, Norwich Acquisition Limited, Knight Plastics, Inc., CPI Holding Corporation, Cardinal Packaging, Inc., Poly-Seal Corporation, Berry Plastics Acquisition Corporation II, Berry Plastics Acquisition Corporation III and United States Trust Company of New York, as trustee (together with a schedule of previous supplemental indentures to the 1998 Indenture) *4.16 Second Supplemental Indenture to the 1999 Indenture dated as of October 2, 2000 among the Company, Holding, Berry Iowa Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, AeroCon, Inc., PackerWare Corporation, Berry Plastics Design Corporation, Venture Packaging, Inc., Berry Plastics Technical Services, Inc., Venture Packaging Midwest, Inc., NIM Holdings Limited, Berry Plastics U.K. Limited, Norwich Acquisition Limited, Knight Plastics, Inc., CPI Holding Corporation, Cardinal Packaging, Inc., Poly-Seal Corporation, Berry Plastics Acquisition Corporation II, Berry Plastics Acquisition Corporation III and United States Trust Company of New York, as trustee (together with a schedule of previous supplemental indentures to the 1999 Indenture) *10.1 Third Amended and Restated Financing and Security Agreement dated as of May 9, 2000, by and among the Company, NIM Holdings, Berry Plastics U.K. Limited, Bank of America, N.A., Fleet Capital Corporation, General Electric Capital Corporation, Heller Financial, Inc., PNC Bank, N.A., LaSalle Business Credit, Inc. and certain other lenders listed therein (the "Third Amended and Restated Financing Agreement") 10.2 Employment Agreement dated December 24, 1990, as amended, between the Company and Martin R. Imbler ("Imbler") (filed as Exhibit 10.9 to the Form S-1 and incorporated herein by reference) 10.3 Amendment to Imbler Employment Agreement dated November 30, 1995 (filed as Exhibit 10.6 to the 1995 Form 10-K and incorporated herein by reference) 10.4 Amendment to Imbler Employment Agreement dated June 30, 1996 (filed as Exhibit 10.4 to the 1996 Form S-4 and incorporated herein by reference) 10.5 Employment Agreement dated December 24, 1990, as amended, between the Company and R. Brent Beeler ("Beeler") (filed as Exhibit 10.10 to the Form S-1 and incorporated herein by reference) 10.6 Amendment to Beeler Employment Agreement dated November 30, 1995 (filed as Exhibit 10.8 to the 1995 Form 10-K and incorporated herein by reference) 10.7 Amendment to Beeler Employment Agreement dated June 30, 1996 (filed as Exhibit 10.7 to the 1996 Form S-4 and incorporated herein by reference) 10.8 Employment Agreement dated December 24, 1990, as amended, between the Company and James M. Kratochvil ("Kratochvil") (filed as Exhibit 10.12 to the Form S-1 and incorporated herein by reference) 10.9 Amendment to Kratochvil Employment Agreement dated November 30, 1995 (filed as Exhibit 10.12 to the 1995 Form 10-K and incorporated herein by reference) 10.10 Amendment to Kratochvil Employment Agreement dated June 30, 1996 (filed as Exhibit 10.13 to the 1996 Form S-4 and incorporated herein by reference) 10.11 Employment Agreement dated as of January 1, 1993, between the Company and Ira G. Boots ("Boots") (filed as Exhibit 10.13 to the Form S-1 and incorporated herein by reference) 10.12 Amendment to Boots Employment Agreement dated November 30, 1995 (filed as Exhibit 10.14 to the 1995 Form 10-K and incorporated herein by reference) 10.13 Amendment to Boots Employment Agreement dated June 30, 1996 (filed as Exhibit 10.16 to the 1996 Form S-4 and incorporated herein by reference) 10.14 Employment Agreement dated as of January 21, 1997, between the Company and Bruce J. Sims ("Sims") (filed as Exhibit 10.14 to the 1999 Form 10-K and incorporated herein by reference) 10.15 Financing Agreement dated as of April 1, 1991, between the City of Henderson, Nevada Public Improvement Trust and the Company (including exhibits) (filed as Exhibit 10.17 to the Form S-1 and incorporated herein by reference) 10.16 Letter of Credit of NationsBank, N.A. dated April 16, 1997 (filed as Exhibit 10.15 to the 1998 Amended Form S-4 and incorporated herein by reference) 10.17 Stockholders Agreement dated as of June 18, 1996, among Holding, Atlantic Equity Partners International II, L.P., CVCA and the other parties thereto (filed as Exhibit 10.23 to the 1996 Form S-4 and incorporated herein by reference) 10.18 Amended and Restated Warrant to purchase Class B Common Stock of Holding dated May 9, 2000, issued to JPMP(SBIC) (Warrant No. 5) (filed as Exhibit 4.4 to the Current Report on Form 8-K filed May 9, 2000 and incorporated herein by reference) 10.19 Amended and Restated Warrant to purchase Class B Common Stock of Holding dated May 9, 2000, issued to JPMP(SBIC) (Warrant No. 6) (filed as Exhibit 4.5 to the Current Report on Form 8-K filed May 9, 2000 and incorporated herein by reference) 10.20 Amended and Restated Warrant to purchase Class B Common Stock of Holding dated May 9, 2000, issued to The Northwestern Mutual Life Insurance Company (Warrant No. 7) (filed as Exhibit 4.6 to the Current Report on Form 8-K filed May 9, 2000 and incorporated herein by reference) 10.21 Amended and Restated Warrant to purchase Class B Common Stock of Holding dated May 9, 2000, issued to The Northwestern Mutual Life Insurance Company (Warrant No. 8) (filed as Exhibit 4.7 to the Current Report on Form 8-K filed May 9, 2000 and incorporated herein by reference) 10.22 Amended and Restated Stockholders Agreement dated June 18, 1996, among Holding and certain stockholders of Holding (filed as Exhibit 10.28 to the 1996 Form S-4 and incorporated herein by reference) 10.23 Second Amended and Restated Management Agreement dated June 18, 1996, between First Atlantic Capital, Ltd. and the Company (filed as Exhibit 10.29 to the 1996 Form S-4 and incorporated herein by reference) 10.24 Warrant to purchase Class B Non-Voting Common Stock of BPC Holding Corporation, dated August 29, 1997, issued to Willard J. Rathbun (filed as Exhibit 10.30 to the 1997 Form 10-K and incorporated herein by reference) 10.25 Warrant to purchase Class B Non-Voting Common Stock of BPC Holding Corporation, dated August 29, 1997, issued to Craig Rathbun (filed as Exhibit 10.31 to the 1997 Form 10-K and incorporated herein by reference) *10.26 Amended and Restated Tax Sharing Agreement dated March 15, 2001, between BPC Holding Corporation and its subsidiaries *10.27 First Amendment to the Stockholders Agreement dated May 9, 2000 among Holding, Atlantic Equity Partners International II, L.P., JPMP(SBIC) and the other parties thereto 10.28 Warrant to purchase Class B Nonvoting Common Stock of Holding dated May 9, 2000, issued to JPMP(SBIC) (Warrant No. CBNV No. 1) (filed as Exhibit 4.2 to the Current Report on Form 8-K filed May 9, 2000 and incorporated herein by reference) 10.29 Warrant to purchase Class B Nonvoting Common Stock of Holding dated May 9, 2000, issued to The Northwestern Mutual Life Insurance Company (Warrant No. CBNV No. 2) (filed as Exhibit 4.3 to the Current Report on Form 8-K filed May 9, 2000 and incorporated herein by reference) 10.30 Series A-1 Preferred Stock Purchase Agreement dated as of May 9, 2000 among Holding, JPMP(SBIC) and the Northwestern Mutual Life Insurance Company (filed as Exhibit 4.1 to the Current Report on Form 8-K filed May 9, 2000 and incorporated herein by reference) *10.31 First Amendment to the Third Amended and Restated Financing Agreement *10.32 Second Amendment to the Third Amended and Restated Financing Agreement *10.33 Loan and Security Agreement, dated July 17, 2000 by and among Berry, General Electric Capital Corporation and certain other lenders listed therein *21 List of subsidiaries
- ---------- * Filed herewith. EX-2.18 2 a2042389zex-2_18.txt EXHIBIT 2.18 ================================================================= SHARE AND QUOTA PURCHASE AGREEMENT Between BERRY PLASTICS CORPORATION And Annamaria AGNOTTOLI Giuseppe GARIBALDI Francesco GARIBALDI Maddalena GARIBALDI Maria Lorenza ZAMBON Concerning THE ACQUISITION OF 100% of CAPSOL SPA and of OCIESSE SRL ================================================================= THIS AGREEMENT (hereinafter referred to as the < AGREEMENT >), made and entered into, by and between BERRY PLASTICS CORPORATION, a joint stock corporation duly incorporated and validly existing under the laws of Delaware (USA), having its registered office and principal place of business located in 101 Oakley Steet, Evansville, Indiana, U.S.A., represented by Mr. Martin R. Imbler, in his capacity as President and Chief Executive Officer (hereinafter referred to as < BUYER >), on one side, AND MRS. ANNAMARIA AGNOTTOLI, an Italian citizen born in Milan (Italy) on July 27th, 1941, domiciled in Vimercate, Milan (Italy) at Via Ugo Foscolo 23, Tax Code GNT NMR 41L67 F205U (hereinafter referred to as < MRS. AGNOTTOLI >); MR. GIUSEPPE GARIBALDI, an Italian citizen born in Soncino, Cremona (Italy) on July 20th, 1937, domiciled in Vimercate, Milan (Italy) at Via Ugo Foscolo 23, Tax Code GRB GPP 37C20 I827U (hereinafter referred to as < MR. G. GARIBALDI >); MR. FRANCESCO GARIBALDI, an Italian citizen born in Soncino, Cremona (Italy) on October 10th, 1945, domiciled in Bresso, Milan (Italy) at Via Panzeri 12, Tax Code GRB FNC 45B10 I827R (hereinafter referred to as < MR. F. GARIBALDI >); MRS. MADDALENA GARIBALDI, an Italian citizen born in Soncino, Cremona (Italy) on January 29th, 1939, domiciled in Cornate d'Adda, Milano (Italy) at Via Castello 1 55, Tax Code GRB MDL 39A69 I827W (hereinafter referred to as < MRS. M. GARIBALDI >); MRS. MARIA LORENZA ZAMBON, an Italian citizen born in Rovigo (Italy) on October 27th, 1943, domiciled in Buccinasco, Milano (Italy) at Via 2 Giugno 3, Tax Code ZMB MLR 43R67 H620G (hereinafter referred to as < MRS. ZAMBON >); (hereinafter collectively referred to as the < SELLERS >). WITNESSETH THAT (a) CAPSOL SpA is a joint stock corporation duly incorporated and validly existing under the laws of Italy, having its registered office and principal place of business located in Cornate d'Adda, Milano (Italy), at Via E. Berlinguer 44, Tax Code 01778690154, registered at the Companies' House in Milan at no. 25253 and having a corporate capital of ITL 1,000,000,000 (one billion Italian Lire) (hereinafter referred to as < CAPSOL > or, jointly with OCIESSE, as the < Companies >); and, (b) OCIESSE SRL is a limited liability company duly organized and validly existing under the laws of Italy, having its registered office and principal place of business located in Buccinasco, Milano (Italy), at Via Resistenza 99, Tax Code 01793150150, registered at the Companies' House in Milan at no. 161026 and having a corporate capital of ITL 40,000,000 (forty million Italian Lire) (hereinafter referred to as < OCIESSE > or, jointly with CAPSOL, as the < Companies >); and, (c) GAZA SRL is a limited liability company duly organized and validly existing under the laws of Italy, having its registered office and principal place of business located in Vimercate, Milano (Italy), at Via Bice Cremagnani 15/7, Tax Code 01793150150, registered at the Companies' House in Monza at no. 42527 and having a corporate capital of ITL 90.000.000 (ninety million Italian Lire) (hereinafter referred to as < GAZA >); and, (d) Sellers jointly own the entire corporate capital of CAPSOL and OCIESSE apportioned as indicated in Schedule < A > and certain of the Sellers own part of the corporate capital of Gaza apportioned as indicated n Schedule < B >; and (e) GAZA owns a real estate property located in Colnago, Milano (Italy) as identified in Schedule < C > hereto (hereinafter referred to as the < Colnago Real Estate >) where CAPSOL carries out its activity, and a real estate property located in Buccinasco, Milano (Italy) as identified in Schedule < D > hereto (hereinafter referred to as the < Buccinasco Real Estate >) where OCIESSE carries out its activity; and (f) Buyer is willing and capable to purchase from Sellers 100% (one hundred per cent) of the corporate capital of both CAPSOL and OCIESSE, and Sellers are willing to sell and transfer to Buyer the share participation respectively owned in the corporate capital of CAPSOL and OCIESSE; and 2 NOW, THEREFORE, in consideration of the premises which constitute an integral part of this Agreement and the agreements, covenants, representations and warranties hereinafter expressed, Buyer and Sellers agree as follows: ARTICLE 1 1.01 Sellers hereby agree to sell to Buyer and Buyer hereby agrees to buy from Sellers, in exchange for the consideration set forth in Article 1.03 below, and at the terms and conditions hereof: (a) the Sellers' participation in CAPSOL as precisely identified and apportioned among the Sellers in Schedule < A > hereto (hereinafter referred to as the < CAPSOL SHARES > or sometimes, jointly with the OCIESSE QUOTA, collectively referred to as the < SHARES >) consisting of 100.000 stocks having par value of ITL 10,000 (ten thousand Italian Lire) each and a nominal value equal in the aggregate to ITL 1,000,000,000 (one billion Italian Lire); and (b) the Sellers' participation in OCIESSE as precisely identified and apportioned among the Sellers in Schedule < B > hereto (hereinafter referred to as the < OCIESSE QUOTA > or sometimes, jointly with the CAPSOL SHARES, collectively referred to as the < SHARES >) having a nominal value equal in the aggregate to ITL 40,000,000 (forty million Italian Lire). In consideration (i) of the sale and transfer of the SHARES, (ii) of the indemnity obligations assumed by the Sellers pursuant to Articles 4 and 6 hereof, and (iii) of the undertaking not to compete, assumed by the Sellers, pursuant to Article 7 below, Buyer agrees to pay to Sellers the aggregate amount of ITL 24,389,838,825 (twenty four billion three hundred eighty nine million eight hundred thirty eight thousand eight hundred twenty five Italian Lire) (the < Purchase Price >) allocated among the Sellers as indicated in Schedule 1.01 and further allocated among the CAPSOL SHARES and the OCIESSE QUOTA as indicated in Schedule 1. 1.02 The undertaking of Sellers under Paragraph 1.01 above preceding shall be regarded as one and single obligation and shall not be divisible nor otherwise severable from one another. Accordingly, Buyer shall not be required to purchase less than all of the CAPSOL SHARES and of the OCIESSE QUOTA. (i) Buyer may designate one or more company(ies) to become a party to this Agreement and to purchase and pay for all or part of the CAPSOL SHARES and/or the OCIESSE QUOTA in accordance with the terms hereof (the < Designated Buyer >) provided that such designation is made in compliance with the following provisions: (ii) anything in Art 1403 of the Italian Civil Code to the contrary notwithstanding, each designation will be sufficiently made if notified in writing to Sellers together with the written acceptance of the Designated Buyer; (iii) any designation pursuant hereto may be notified to Sellers (under penalty of forfeiture) not later than 2 (two) business days prior to the Closing. For 3 the purpose of this Agreement "Business Day" shall mean any day other than a Saturday, Sunday or other day on which commercial banks in Italy are authorized or required to close. (iv) the Designated Buyer shall be an entity controlling or controlled by Buyer pursuant to Article 2395 of the Italian Civil Code; (v) Buyer does hereby guarantees the punctual and exact performance by the Designated Buyer of the duties and obligations arising under or in connection with this Agreement. 1.03 The payment of the Purchase Price shall be made by Buyer to the Sellers at Closing, as hereinafter defined, as follows : (i) ITL 21,950,854,943 (twenty one billion nine hundred fifty million eight hundred fifty four thousand nine hundred forty three Italian Lire) shall be paid at Closing to the Sellers, in the proportions set out in Schedule 1.01 by means of bank wire transfer in immediately available funds; and (ii) ITL 2,438,983,882 (two billion four hundred thirty eight million nine hundred eighty three thousand eight hundred eighty two Italian Lire) shall be paid at Closing to the Escrow Agent (as hereinafter defined) pursuant to Article 6.04 below, by means of bank wire transfer in immediately available funds. ARTICLE 2 ACTIONS PRIOR TO THE CLOSING Sellers and Buyer (hereinafter referred to as the "Parties") agree that the following events to the extent that they have not occurred prior to the date hereof shall take place before Closing and shall be considered as conditions to Buyer's obligation to close. In the event that the said conditions have not occurred by the Closing (as hereinafter defined) the obligations of the Parties under this Agreement shall be automatically terminated. 2.01 The board of directors of Buyer shall approve the transaction contemplated by this Agreement. 2.02 Sellers shall hold at Closing (i) an ordinary shareholders' meeting of the Companies to resolve upon the replacement of the current members of the board of directors and, as to CAPSOL, of the board of statutory auditors; (ii) an extraordinary shareholders' meeting to amend the by-laws of both Capsol and Ociesse. 2.03 The Buyer shall have obtained financing on terms and conditions satisfactory to the Buyer in its sole discretion required to consummate all of the transactions contemplated hereby. 2.04 Since January 1, 2000 there shall have been no material adverse change in the business, operations, assets, condition (financial or otherwise), operating results, liabilities, employee relations or business prospects of either of the Companies. 4 2.05 Sellers shall approve the 1999 final balance sheet of the Companies and allocate any net profit resulting therefrom to increase the mandatory and special reserves of the Companies consistently with the resolutions of the shareholders' or, as the case may be, the quotaholders' meetings which approved the 1997 and 1998 balance sheets. 2.06 From and after the date of this Agreement until the Closing (the < Transition Period >), except as otherwise consented to in writing by Buyer or provided by this Agreement, each of the Companies shall, and Sellers shall cause each of the Companies to: (a) conduct its operations according to the ordinary and usual course of business consistent with past custom and practice (including the collection of receivables, the payment of payables and the maintenance of supplies) and use its best efforts to preserve intact its business organization, keep available the services of officers and employees, and maintain satisfactory relationships with suppliers, customers and other persons having business relationships with it; (b) maintain its assets in customary repair, order and condition, maintain insurance reasonably comparable to that in effect on the date hereof, replace in accordance with past practice inoperable, worn out or obsolete assets with modern assets of comparable quality and, in the event of a casualty, loss or damage to any of such assets or properties prior to the Closing for which the relevant Company is insured or the condemnation of any assets or properties, either repair or replace such assets or property or, if Buyer so agrees, retain such insurance or condemnation proceeds; (c) promptly inform Buyer in writing of any material variances from the representations and warranties contained in Article 4; (d) permit representatives and lenders of Buyer to have full access to the Companies' books, records, property, facilities, customers, suppliers, sales representatives, consultants, key employees and independent accountants in connection with any supplementary due diligence review of the Companies which Buyer may reasonably deem necessary or useful it being understood that such investigation shall in no way affect or otherwise obviate or diminish any representations or warranties of the Sellers, or conditions to the obligations of the Buyer, in each case as set forth herein. As far as customers, suppliers and sales representatives are concerned, Buyer shall be entitled to contact them only upon obtaining Sellers' prior approval; (e) maintain its insurance policies in full force and effect, or renew or replace the same prior to the expiration or termination of the expiring policies from a reputable insurance carrier with a < Best's Rating > equal to or better than that of the existing carrier, containing insurance coverage in the same or greater amount than the existing policies in substantially the same form and substance as the existing policies; 5 (f) ensure that no actions will be taken to significantly increase the debt of the Companies (the sum of all amounts owed to Banks, financial institutions and leasing companies less cash and positive bank balances), and that the Companies shall not pay, any cash out of the business to the Sellers (directly, by any means whatsoever) other than the normal salary payments to which they are entitled as employees or directors; (g) ensure that there will be no material changes to the current agency and distribution agreements. During the Transition Period, without the prior written consent of Buyer and except as expressly contemplated by this Agreement or any ancillary agreements contemplated herein, each of the Companies shall not, and Sellers shall cause each of the Companies not to: (a) sell, lease, transfer or assign any of its assets, tangible or intangible, other than inventory in the ordinary course of business consistent with past custom and practice; (b) delay or postpone the payment of accounts payable or other obligations and liabilities or accelerate the collection of accounts receivable, other than in the ordinary course of business consistent with past custom and practice; (c) enter into any contract other than in the ordinary course of business; (d) enter into any employment contract or collective bargaining agreement, written or oral, or modify the terms of any existing such contract of such kind; (e) grant any increase in the base compensation of any of its officers or employees other than in the ordinary course of business consistent with past custom and practice; (f) adopt, amend, modify or terminate any bonus, profit-sharing, incentive, severance or other plan, contract or commitment for the benefit of any of its officers or employees; (g) other than as contemplated by this Agreement or any ancillary agreements contemplated herein, enter into any transaction with any of its officers, employees or Affiliates of such officers or employees (or any directors, officers or employees of such Affiliate), other than ordinary course employment arrangements entered into in accordance with past custom or practice and transactions between the Companies; (h) in any manner take, or cause to be taken, any action which is designed, intended or might reasonably be anticipated to have the effect of discouraging its customers, employees, suppliers, lessors and other associates from maintaining the same business relationships with it after 6 the date of this Agreement as were maintained with it prior to the date of this Agreement; (i) amend the Company's by-laws; (j) make any change in its corporate capital, or issue any shares of any class or issue or become a party to any subscriptions, warrants, rights, options, convertible securities or other agreements or commitments of any character relating to the foregoing; (k) incur or commit to incur any capital expenditures out of the ordinary course of business; (l) incur, assume or guarantee any long-term or short-term indebtedness; and (m) pay, declare, accrue or set aside any dividends or any other distributions. Furthermore, during the Transition Period, Sellers shall, and shall cause the Companies and Gaza to, deal exclusively with Buyer regarding the transactions contemplated herein or in any ancillary agreements contemplated herein and, without the prior written consent of Buyer neither Sellers, the Companies nor Gaza will, and Sellers will cause the Companies and Gaza not to, directly or indirectly solicit, initiate or engage in negotiations or discussions with any third party, other than Buyer, relating to the transactions contemplated herein or in any ancillary agreements contemplated herein. Notwithstanding anything to the contrary provided by this Agreement, in the event that any of the above conditions is not fulfilled and the Closing does not occur, Buyer shall continue to be bound by the confidentiality covenants undertaken pursuant to the letter of intent of February 16th, 2000, as subsequently amended, and shall refrain from employing any employee of the Companies as provided therein. ARTICLE 3 CLOSING 3.01 The closing of this Agreement (hereinafter referred to as the < Closing >) shall take place at the offices of Mazzeschi, Novelli & Porcari, Via Turati 40, Milan, on August 31st , 2000 (hereinafter referred to as the "Closing") at 9:30 am, or on such other place, date and time as the Parties shall mutually agree in writing. 3.02 At Closing, the following events shall take place concurrently: (a) Sellers shall cause all members of the Board of Directors of CAPSOL and of OCIESSE and all standing and alternate members of the Board of Statutory Auditors of CAPSOL to resign their positions with immediate effect, and shall deliver to Buyer letters from each of them acknowledging that none of them has outstanding any claim for compensation or otherwise against CAPSOL and/or OCIESSE, as applicable, except for annual fees 7 (as indicated in Schedule 3.02(a)) accrued up to the Closing; and (b) Sellers shall give their favorable vote to a resolution of the ordinary shareholders' meeting of CAPSOL and OCIESSE upon the appointment of the new members of the Board of Directors and, as to Capsol of the Board of Statutory Auditors designated by Buyer; and (c) Sellers shall deliver to Buyer a statement in the form set forth in Schedule 3.02(c) confirming the continuing validity, as of the date of Closing, of the representations and warranties made pursuant to Article 4 below; and (d) Sellers and Buyer shall execute and deliver to each other a deed of transfer of the OCIESSE QUOTA to Buyer duly certified by a Notary Public pursuant to Section 2479 of the Italian Civil Code in the form set forth in Schedule 3.2(d); and (e) Sellers shall deliver to Buyer the share certificates representing the CAPSOL SHARE duly endorsed before a Notary Public; and (f) Buyer shall pay to Sellers by means of bank wire transfer in immediately available funds the amount of ITL 21,950,854,943 (twenty one billion nine hundred fifty million eight hundred fifty four thousand nine hundred forty three Italian Lire) allocated among Sellers as set out in Schedule 1.01; and (g) Buyer, Sellers and the Escrow Agent (as defined below) shall enter into the Escrow Agreement (as defined below) substantially in the form of the draft attached hereto as Schedule 3.2(g); and (h) Buyer shall pay to the Escrow Agent in immediately available funds the amount of ITL 2,438,983,882 (two billion four hundred thirty eight million nine hundred eighty three thousand eight hundred eighty two Italian LirE) pursuant to Article 6.04 below; and (i) Sellers shall cause GAZA to enter into with CAPSOL a lease agreement concerning the Buccinasco Real Estate substantially in the form of the draft attached hereto as Schedule 3.2.(i); and (j) Sellers shall cause GAZA to terminate the lease agreement presently in force with Ociesse and to enter into with OCIESSE a lease agreement concerning the Colnago Real Estate substantially in the form of the draft attached hereto as Schedule 3.2.(j); and (k) The personal guarantees released by Sellers in favor of CAPSOL and OCIESSE in order to secure the Companies' obligations vis-a-vis third parties (e.g. banks and utilities suppliers) as set forth in Schedule 3.3(k) shall be terminated. The monies owed by the Companies to the banks indicated in Schedule 3.02(k), as adjusted at Closing, shall be entirely paid off by the Buyer or by the Designated Party and the relevant credit agreements shall be terminated. Schedule 3.02(k) shall be adjusted prior to the Closing in order to reflect the changes occurred after the execution of this Agreement. It is 8 understood between the parties that the debt (less cash) owed by the Companies to the banks at Closing shall not exceed more than LIT 538,000,000 the debt (less cash) indicated in Schedule 3.02(k). Any sum exceeding this amount shall be paid off directly by the Sellers unless Sellers prove that the amount in excess is due to expenses incurred in the ordinary course of business. Buyer agrees and undertakes to hold the Sellers harmless from any liability whatsoever they may incur after the Closing pursuant to the aforesaid personal guarantees; and (l) Mr. G. Garibaldi shall execute a consultancy agreement with CAPSOL in the form attached as Schedule 3.2(l); and (m) Sellers shall cause Angelo Garibaldi to execute the Non Competition Agreement in the form attached as Schedule 3.2(m); and (n) CAPSOL shall have sold and transferred to GAZA the Buccinasco Real Estate for a price equal to ITL 400,000,000; and (o) CAPSOL shall have sold and transferred its 50% interest in Capsol Certwood UK Limited, a limited liability company having its registered office at 1 Victoria Street, Dunstable, Bedfordshire, England for a price equal to ITL 1,369,275,115; (p) Sellers shall cause the terms of the labour relationships between Angelo Garibaldi and Capsol to be amended as set out in Schedule 3.2(p); and (q) the Parties shall deliver the other documents, if any, required by the provisions of this Agreement to be delivered at Closing. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER Sellers hereby make the following representations and warranties, each of which is true and accurate on the date hereof, shall be true on the date of Closing and shall survive the sale and transfer of the SHARES contemplated hereby. 4.01 EXISTENCE, QUALIFICATION AND AUTHORITY OF THE COMPANIES CAPSOL is a joint stock corporation duly incorporated, validly existing and in good standing under the laws of the Republic of Italy. OCIESSE is a limited liability company duly organized, validly existing and in good standing under the laws of the Republic of Italy. The Companies have all necessary power and authority to own and use their properties and to transact their business and possess all franchises, licenses and permits necessary and required therefor, and their business is conducted in compliance with all applicable governmental and other regulations, in particular environmental and safety regulations. 4.02 CAPITALIZATION AND CAPITAL STOCK The entire corporate capital of CAPSOL consists of ITL 1,000,000,000 (one billion Italian lire) fully subscribed and paid in. All such capital is divided in n. 100,000 shares having nominal value of ITL 10,000 (ten thousand Italian Lire) each, all of which are duly authorized, validly issued, fully paid and without 9 restriction on the right of transfer thereof. The entire authorized nominal capital stock of OCIESSE as of the Closing consists of ITL 40,000,000 (forty million Italian lire) fully subscribed and paid in. All such capital is divided in quotas having nominal value of multiples of ITL 1.000 each, all of which are duly authorized, validly issued, fully paid and without restriction on the right of transfer thereof. There are no outstanding warrants, options, conversion privileges, contracts, calls, or other rights or agreements of any kind with regard to any authorized or issued capital stock or any other debt or equity security of the Companies, nor has any commitment or authorization therefor been given. 4.03 BALANCE SHEET Attached hereto as Schedule 4.03 is the balance sheet and profit and loss statement of each of the Companies for the fiscal year ended on December 31st, 1999, as well as an Interim Financial Statement as of May 31, 2000 (hereinafter collectively referred to as "Balance Sheets"). Such Balance Sheets are true, complete and correct, have been prepared in conformity with the books and records of the Companies and the accounting principles expressed in the Italian Civil Code as well as the Accounting principles enacted by the Consiglio Nazionale degli Ordini dei Dottori Commercialisti e dei Ragionieri (hereinafter < Accounting Principles >), as consistently applied by the Companies, and fairly present the financial position of the Companies and any appropriate reserve requirements at the date indicated, and results and operations for the period indicated, and do not omit to state or reflect any material fact concerning the Companies, required to be stated or reflected therein, or necessary to make the statements therein not misleading. As far as the Interim Financial Statement as of May 31, 2000, Sellers represent (and Buyer acknowledges) that: (i) it has not been audited; and(ii) it has been prepared in accordance to past practice and using Sellers' Best Knowledge on the basis of the accounting data and information available to the Companies. 4.04 ABSENCE OF CHANGES Since January 1st, 1999 there has not been, and until the Closing there will not be, any change in the business, assets, financial conditions or results or operation of the Companies, individually or in the aggregate, that is reasonably likely to have a material adverse effect on the Companies, including: (a) any change in the financial condition, assets and liabilities, earnings, business, employees or in the relationships with suppliers, clients or third parties other than changes in the ordinary course of business, consistent with past practice; (b) sales or other disposals of assets or purchases other than in the ordinary course of business, consistent with past practice; (c) material damages, destruction or losses of any kind; (d) bonuses or increases of salary to employees or managers other than those 10 normally granted by the Companies consistently with past practices. 4.05 ACCOUNTS RECEIVABLE All accounts receivable of the Companies in existence on the Closing: (i) shall arise from commercial transactions carried out in the ordinary and usual course of business; and (ii) shall be valid and enforceable obligations; (iii) subject to any reserve established in the Balance Sheet are current and collectable and, to the best of the Sellers' knowledge, will be regularly paid within their maturity day. For the purpose of this Agreement "Best Knowledge" shall mean and include: (i) actual knowledge; and (ii) that knowledge which a prudent business person could have obtained in the management of his business affairs after making due inquiry and exercising due diligence which a prudent business person should have made or exercised, as applicable, with respect thereto. In connection therewith, the knowledge (both actual and constructive) of the Sellers shall be imputed to the knowledge of the Companies. 4.06 UNDISCLOSED LIABILITIES The Companies do not have any liabilities actual or contingent which, on the basis of the Accounting Principles, should be reflected in the Balance Sheets and there is no basis for any claim against the Companies for any such liability except (a) as set forth on the Balance Sheets; or (b) to the extent that such liabilities arose in the ordinary course of business of the Companies after June 1st, 2000. 4.07 TAX RETURNS AND AUDIT The Companies have filed within the statutory terms all the mandatory tax, social security, duty and insurance returns which were due to be filed, and such returns were true, complete and accurate. The Companies have paid, or have made in the Balance Sheets the necessary provision for the payment of, all taxes, duties, social security and insurance contributions and administrative charges, including related interest and penalties, if any, the payment of which was due. The Companies have withheld, or (as the case may be) have made in the Balance Sheets provisions for, all taxes required to be withheld and have timely paid such taxes in accordance with applicable laws and regulations. No claims or judicial or administrative proceedings are pending or threatened in respect of taxes, duties, social security and insurance contributions or other similar charges or related interest and penalties, with respect to the Companies. In addition, no act or fact occurring or known prior to the Closing will exist which may give rise to any liability of the Companies for taxes, duties, social security or insurance contributions or other similar charges or related interest and penalties. 4.08 REAL PROPERTY - OWNED The Companies do not own (nor do they utilize, as lessee or otherwise, with the exception of the Buccinasco Real Estate and the Colnago Real Estate) any real property. 4.09 PERSONAL PROPERTY - OWNED Except as set for in Schedule 4.09(a) hereto, the Companies have full and unrestricted ownership of all moulds and other movable assets indicated in the Balance Sheets or physically located at Buccinasco Real Estate or the Colnago Real Estate. All moulds owned by the Companies are listed in Schedule 4.9(b). 11 All motor vehicles, equipment, software programs and other tangible/ movable property owned by the COMPANIES, to the maximum extent required under the Accounting Principles, are reflected in the Balance Sheets and are not subject to any mortgage, pledge, encumbrance or charge of any nature or right for the benefit of third parties, are in good operating condition and repair, normal wear and tear excepted, are usable for the current operations carried on by the Companies and conform to all applicable laws and regulations. 4.10 REAL AND PERSONAL PROPERTY LEASED The Companies have valid and enforceable leases with respect to all movable assets leased and have in all material respects performed all the obligations required to be performed under respective leases. All such assets are not subject to any liens, encumbrances or user restrictions whatsoever. 4.11 INTELLECTUAL PROPERTIES Set forth on Schedule 4.11 hereto is a list of all the patents, applications for patents, trademarks, and any other intellectual property rights owned or granted by, or to the Companies, which list comprises all of such items required for the operation of the business of the Companies as presently conducted or planned. Except as set forth on Schedule 4.11, all such items are valid and subsisting; good and marketable title to such items, together with all legal or implied rights to the subject matter thereof, is held by each of the Companies free and clear of all options, adverse claims, defenses, liens, charges, security interests, covenants, conditions, agreements, restrictions and other encumbrances; and there exists no restriction on the use or transfer of any such item. There are no interference, challenges, proceedings, or infringement suits, pending or threatened with respect to any such item, nor have the Companies granted any license to any other party with respect to any such item. To the Best Knowledge of the Sellers, the Companies are not infringing upon the right of any other person under any patent, trademark or other right in the conduct of their business. The names < Capsol > and respectively < Ociesse > have been legitimately acquired by the Companies, and included in their corporate names and no third party has any claim of any nature whatsoever with respect to the use of such name by the Companies. The execution of this Agreement and or the consummation of the transactions contemplated herein shall in no way affect the rights of the Companies with respect to the use of such names. 4.12 FOREIGN ASSETS The Companies do not have any interest in any real property or tangible or intangible personal property located outside of the Republic of Italy. 4.13 SUBSIDIARIES The Companies have no controlled subsidiaries, nor own or have the right, or obligation, to acquire any interest in any corporation, limited liability company, partnership or joint venture. 4.14 CERTAIN PAYMENTS All payments to agents, consultants and others by the Companies have been in payment of bona fide fees. The Companies have never made or received any payment which has not been duly reflected in their accounting books, or any 12 other kind of unlawful, inappropriate or irregular payment. No government agency or entity has initiated or threatened any investigation of any payments made by the Companies and alleged to have been of the type covered by this Article 4.14. 4.15 NECESSARY PROPERTY: TITLE TO ASSETS The real and tangible property owned and/or leased by the Companies and the intangible personal property, including patents, patent applications, inventions, discoveries, processes, formulae, trade secrets, proprietary technical information and know-how owned by, or licensed to, the Companies, constitute all of such property now used in, and necessary for the conduct of, the business of the Companies, in the manner and to the extent presently conducted, or planned, by them. There exists no restriction or reservation affecting the Companies' title to, or the utility of, their assets, which would prevent or hinder the Companies from occupying or utilizing its respective assets, or any part thereof, to the same full extent that the Companies now do if the transactions contemplated hereby did not take place. 4.16 USE AND CONDITION OF PROPERTY - RESPECT OF ENVIRONMENT All property and assets currently used by the Companies are in good operating condition and repair (except for ordinary wear and tear) as required for their use in the business of the Companies, as presently conducted or planned; conform to all applicable laws and regulations, including zoning, anti-pollution, work safety and other regulations concerning the use of industrial premises and/or warehouses and no notice of any violation of any law, statute, ordinance, or regulation or condemnation relating to any such property or assets has been received, except such as have been complied with; and there are pending or threatened no changes in any of the foregoing which would adversely affect the business of the Companies. The Companies operate their activity in full compliance with the statutory rules and regulations relating to public health and safety and the protection of nature. In particular, the Companies have obtained all the authorizations required by the regulations applicable to the Companies. The operations of, and the facilities used by the Companies, in particular the real estate used by the Companies are free of any pollution of soil, air, or ground water or other environmental pollution caused by, or in connection with the business of the Companies. The Companies have all environmental permits, licenses and authorizations necessary to conduct their business. In their operations, the Companies, as well as those subcontractors whose activity may result in any environmental liability for the Companies, have always complied with the applicable environment protection, public safety and zoning laws and regulations, as well as any orders or authorizations of any kind concerning effluent, waste, discharge or the release of any substances. The Companies know of no changes of such provisions or revocation or withdrawal of any licenses being contemplated which would adversely affect their business. On the basis of the present business the fresh water supply and the disposal of waste, water and gases as well as solid effluent and waste are fully 13 assured in accordance with presently applicable law. There are no commitments, agreements or understandings with any administrative agency, with respect to any effluents, waste, discharge or release of other substances. There are no investigations, inquiries (R)or other proceedings now pending or threatened by any governmental entity with respect to the Companies' business, or their actual or alleged failure to comply with any requirement of any law, regulation or ordinance relating to air or water quality, waste management, hazardous or toxic substances or the protection of health or the environment. 4.17 LICENSES AND PERMITS The Companies have obtained all licenses, permits and authorizations required to own or lease, operate and use their respective assets and to conduct their respective business operations as currently conducted. All such licenses, permits and authorizations are valid and in effect and in any case have not been challenged. The Companies have always acted and do act in material compliance with all applicable laws and regulations. To the best of Sellers' knowledge and after due inquiry any investigations, neither of the Companies has received any written or oral communication that alleges that one of them is currently not in compliance with any applicable laws.Neither of the Companies is in default under, or in violation of any applicable statute, law, ordinance, decree, order, rule, regulation of any governmental body, or the provisions of any contract, company by-laws or articles of incorporation or of any franchise or license; and consummation of the transactions contemplated hy will not result in any of the foregoing. 4.18 CONTRACTS AND COMMITMENTS Except as set forth in Schedule 4.18 or in other Schedules hereto or otherwise expressly provided by this Agreement the Companies do not have: (a) any single contract providing for an expenditure in excess of ITL. 100,000,000 (one hundred million Italian Lire) or contracts with the same affiliated parties in the aggregate providing for expenditures in excess of ITL 100,000,000 (one hundred million Italian Lire); (b) any contract, bid or offer to sell products or to provide services to third parties which (i) is at a price which would result in a net loss on the sale of such products or the providing of such services; (ii) which, pursuant to its terms or conditions, the Companies cannot reasonably expect to satisfy or fulfil in their entirety; or (iii) which involves more than ITL 100,000,000 (one hundred million Italian Lire), or which, together with all other contracts, bids, or offers to or with the same or any other affiliated parties, involves more than ITL. 100,000,000 (one hundred million Italian Lire); (c) any lease of any real or personal property where either of the Companies is the lessor; (d) any revocable or irrevocable power of attorney to any person, firm or corporation for any purpose whatsoever; 14 (e) any loan agreement, indenture, promissory note, conditional sales agreement or other similar type of agreement; (f) any arrangement or other agreement which involves a sharing of profits or future payments to other persons, or any joint venture contract or arrangement; (g) any contract containing covenants limiting the freedom of either of the Companies to compete in any line of business in which it is involved; (h) any contract calling for the payment or receipt of royalties; (i) any contract of guarantee, indemnity or security; (j) any contract or commitment not made in the ordinary course of business which is material to the business, financial condition or results of operations of either of the Companies; (k) any agency or distribution contract to which either of the Companies is a party; (l) any pension plan in favor of employees or third parties; (m) any other material contract or commitment, other than the employment agreements, which can not be terminated by either of the Companies with a thirty (30) days' notice or less, and which is not specifically referred to in any other Schedule thereto; (n) any commitment or obligation to pay any fees to any attorney, consultant, broker or expert in connection with or related to the negotiation and execution of this agreement and the consummation of the transaction contemplated herein. 4.19 REASONABLENESS - VALIDITY OF CONTRACTS No purchase commitment for materials, supplies, component parts or other items of inventory to which either of the Companies is a party is in excess of the normal, ordinary, usual and current requirements of its businesses, or at a price in excess of the current reasonable market price. Each of the contracts and agreements to which either of the Companies is a party is a valid and binding obligation of the parties thereto in accordance with its terms and conditions. No party to any such contract or agreement is in default with respect to any term or condition thereof, nor has any event occurred which, through the passage of time or the giving of notice, or both, would constitute a default thereunder of would cause the acceleration of any obligation of any party thereto or the creation of a lien or encumbrance upon any asset of either of the Companies. 4.20 LITIGATION There is no suit, claim, action or proceeding now pending or threatened including 15 but not limited to labor issues, product liability, product warranty, product safety, environment, tax, before any court, administrative or regulatory body, arbitration panel, or any governmental agency, nor are there any grounds therefore, to which either of the Companies is, or may be, a party, or which may result in any judgement, order, decree, liability or other determination which will, or could, have any material adverse effect upon its businesses or condition, financial or otherwise. 4.21 EXECUTIVES, AGENTS, EMPLOYEES AND CONSULTANTS (a) Other than the employees and agents listed in Schedule 4.21(a) there are no other persons who have, or may claim to have, any relationship with the Companies which qualifies such persons as employees or agents of the Companies under applicable law or which would otherwise entitle such persons, or any labor union or government agency acting on behalf of such persons, to collect from the Companies any wages, benefits, commissions, severance indemnities or any other sums of any nature. (b) All applicable laws and regulations concerning the employees and agents of the Companies have been and are duly complied with in all material respects. The salary, commissions and benefits for each of the employees and agents of the Companies are specified in Schedule 4.21(b) as well as the commissions payable to agents and none of the employees or of the agents of the Companies is entitled to any other salary, commissions or benefit. The Companies have properly and accurately reflected on their books and records all compensation paid to, or on behalf of, their agents and employees. Such compensation has been properly and accurately disclosed in the Balance Sheets, and other public or private reports, records or filings to the extent required by law. All current and past employees of the Companies have been duly recorded as such in the books and records of the Companies. (c) There is, and during the past two years there has been, no labor strike, dispute, work stoppage or lockout pending or threatened against the Companies. There is no unfair labor practice charge or complaint against the Companies, pending or threatened. There are no pending or threatened union grievances, demands or proceedings against the Companies. 4.22 INDEBTEDNESS TO AND FROM SHAREHOLDERS, EXECUTIVES AND OTHERS Neither of the Companies is indebted or is bound by any contractual obligations of any nature whatsoever to any shareholder, partner, executive, employee or agent of such Company except for amounts due as normal salaries, wages, bonuses, accrual for severance payments (including "TFR") and in reimbursement of ordinary expenses on a current basis, and no shareholder, executive, employee or agent of either of the Companies is indebted to either of the Companies except for advances for ordinary business expenses in a normal amount. 16 4.23 OUTSTANDING FINANCIAL INTERESTS Except as indicated in Schedule 4.23., no shareholder, director, executive or, to the Best Knowledge of Sellers, no 1st level employee of either of the Companies has any direct or indirect financial interest in any supplier or customer of the Companies. 4.24 LABOR AGREEMENTS, EMPLOYEE BENEFITS PLANS, AND EMPLOYMENT AGREEMENTS Except as provided for in Schedule 4.21(b), in the National Collective Bargaining Labor Agreement applicable to the Plastic Industry (< CCNL Gomma e Plastica >; hereinafter referred to as the < CCNL >), or in the Companies' shop agreements (< Contratti Aziendali >) attached as Schedule 4.24 hereto, the Companies are not a party, or otherwise bound, to any other agreement or commitment, of any nature or kind whatsoever, both in writing or oral, according to which any compensation, benefit or alike would be payable to the Company's employees and agents. 4.25. OVERTIME, SEVERANCE PAY, BACK WAGES, VACATION, MINIMUM WAGES AND OTHER BENEFITS Except (i) as provided for in the CCNL and in the Contratti Aziendali; and (ii) as indicated and properly accrued on the Balance Sheets; and (iii) for obligation arising from the employment contracts incurred in the ordinary course of business, no present or former employee of the Companies has any claim (whether under any law, employment agreement or otherwise) on account of, or for, (a) severance or overtime pay, other than overtime pay for the current payroll period; (b) wages or salary (excluding bonuses and amounts accruing under any pension and profit-sharing plans listed in Schedule 4.24 for any period other than the current payroll period; (c) vacation, time off, or pay in lieu of vacation or time off, other than that earned in respect of the current fiscal year to which no provisions has been made in the Balance Sheets; (d) any violation of any statute, ordinance or regulation relating to minimum wages or maximum hours of work; (e) severance indemnity; or (f) any other fringe benefits whatsoever. 4.26 INSURANCE POLICIES Schedule 4.26 sets forth a true and correct list of the policies of fire, casualty, civil liability and other forms or insurance. All such insurance policies are in full force and effect in accordance with the terms thereof, all premiums thereunder have been punctually paid as due, and such policies will expire on the dates specified in Schedule 4.26. 4.27 GUARANTEE Neither of the Companies released any kind of guarantee, indemnity or security or are otherwise liable for any indebtedness of any other person, firm or corporation except as endorser of checks received and deposited in the ordinary course of business. 4.28 BROKER'S FEES Sellers have not incurred any liability for any brokerage, finder's or similar fees or commissions in connection with the transactions contemplated hereby, the payment of which could be validly claimed from the Companies or the Buyer. 17 4.29 BOOKS AND RECORDS The books of account, stock record books and minute books and other corporate records of the Companies are appropriately kept and all the matters contained therein are accurately reflected, to the extent appropriate, on the Balance Sheets. Copies of the current valid version of the Articles of Association and of all notaries deeds concerning any increase of capital of the Companies, as well as the Shareholders' Ledger and the Shareholders' and Board of Directors' meetings' minutes books of the Companies shall be made available to Buyer before Closing [BOOKS TO BE DISCLOSED TO BUYER] and are correct and complete to the date hereof. 4.30 BANK ACCOUNTS AND SAFE DEPOSIT BOXES Set forth on Schedule 4.30 hereto is a list of (a) all bank accounts maintained by the Companies, together with the names of authorized signatories on each such account, and (b) the location of all safe deposit boxes maintained by the Companies, together with the names of the persons authorized with access thereto. 4.31 SUBCONTRACTORS Attached hereto as Schedule 4.31 is a list of all subcontractors and suppliers to the Companies providing goods or services of a value of at least ITL. 100,000,000 (one hundred million Italian Lire), or more during the 1999 fiscal year, as well as those expected to supply goods or services of a value of at least ITL 100,000,000 (one hundred million Italian Lire), or more, in 2000 fiscal year. None of the agreements listed in the said Schedule 4.31 could be intended or construed as hidden employment agreements, nor infringes any mandatory provision of law, including, by way of example, Laws no. 1369 of October 23, 1960 or no. 877 of December 18, 1973, as amended. 4.32 OWNERSHIP Sellers are, jointly, the sole record and beneficial holders and owner of the SHARES, which represents 100% (one hundred per cent) of all the authorized, issued and outstanding stock of CAPSOL and of OCIESSE. 4.33 TITLE Sellers have good and marketable title to the SHARES, free and clear of all adverse claims, options, liens, security interests, restrictions and other encumbrances. 4.34 CONSENTS (a) The Sellers have full and absolute legal right, capacity, power and authority to enter into this Agreement and any ancillary agreements to which they are a party and this Agreement and said ancillary agreements are the valid and binding obligation of such Sellers, enforceable against such Sellers in accordance with their terms. (b) The Sellers have full legal right and power to transfer and deliver the SHARES to Buyer, in the manner provided in this Agreement, and upon transfer and delivery of the SHARES, pursuant to the terms of this Agreement, Buyer is receiving good and marketable title to 100% (one 18 hundred per cent) of the total corporate capital of CAPSOL and of OCIESSE, free and clear of all adverse claims, options, liens, security interests, restrictions and other encumbrances. (c) Neither the execution, delivery and performance of this Agreement by Sellers or any ancillary agreements to which they are a party nor the consummation of the transactions contemplated hereby or thereby nor compliance by Sellers with any of the provisions hereof or thereof will (i) conflict with, or result in any violations of, or cause a default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, amendment, cancellation or acceleration of any obligations contained in or the loss of any material benefit under, any term, condition or provision of any contract to which Sellers are a party, or by which such Sellers or any of their properties may be bound or (ii) violate any law applicable to Sellers or any of their properties, which conflict or violation would prevent the consummation of the transactions contemplated by this Agreement or result in an encumbrance applicable to the Companies' or Sellers' assets or give rise to any claim against the Companies, any Sellers, the Buyer, or any affiliate of the Buyer or have a = material adverse effect on the Companies, any Sellers the Buyer or any affiliate of the Buyer. (d) Except as contemplated by this Agreement, no permit, authorization, consent or approval of or by, or any notification of or filing with, any person or governmental entity is required in connection with the execution, delivery and performance by such Sellers of this Agreement or any ancillary agreement to which their are a party or the consummation by such Sellers of the transactions contemplated hereby and thereby 4.35 PRINCIPAL CUSTOMERS The relationships of the Companies with their principal customers are normal and amicable and neither the Sellers nor either of the Companies have received any indication that any such customer is or may be unwilling to do business with Buyer in the future, with respect to the Companies. 4.36 SUBSIDIES AND GRANTS The Companies have been granted with the grants and subsidies listed in Schedule 4.36 hereto. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents and warrants to Sellers as set forth below: (a) Each of the warranties and representations contained in this Article 5 is true, correct and not misleading on the date hereof and shall be true, correct, and not misleading on the Closing. (b) Buyer undertakes to promptly inform in writing Sellers of any fact, act or circumstance (whether occurred or become known after the date hereof) which 19 may render any of the representation and warranties of this Article 5 untrue, incorrect or misleading. (c) Buyer shall indemnify Sellers in respect of damages or costs suffered by them in the event that the warranties and representations contained in this Article 5 prove to be incorrect or untrue in any material respect. (d) Buyer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and is qualified to conduct its business in the manner in which it is now being conducted. (e) No consents by any third party, including public authorities, are needed to authorize the execution and performance of this Agreement by Buyer, other than those obtained prior to the Closing. All corporate and other proceedings required to be taken by Buyer to authorize the execution, delivery and performance of this Agreement have been duly and properly taken, and this Agreement has been duly executed by Buyer and constitutes the legal, valid and binding obligation of Buyer in accordance with its terms. (f) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, will not conflict with, or result in a breach of, or constitute a default under or give rise to a right of termination, cancellation or acceleration of, the articles of incorporation or the by-laws of Buyer or violate any agreement, judgement, order, injunction, award, decree, law or regulation applicable to Buyer. ARTICLE 6 INDEMNITY, SECURITY 6.01 GENERAL PROVISIONS [A] Sellers shall indemnify and hold harmless Buyer or, at the request of Buyer (but subject to Article 6.02), the Companies and their respective successors and assigns, affiliates, officers, directors and employees (hereinafter referred to as the < Indemnified Party >), to the extent set forth below, from and against all liability, loss, cost or expense, including performance or contributions in kind and reasonable attorneys' and other professionals' fees and (without prejudice to the provisions of art. 6.02 below) taxes incurred in connection with the receipt of indemnification payments (hereinafter referred to as the < Losses >), which may be sustained by an Indemnified Party, by reason of the breach (intentional or unintentional) of any covenant, representation or warranty contained in this Agreement or any document or certificate delivered pursuant hereto. The foregoing shall in no way be deemed to waive or restrict other legal remedies available to Buyer under the applicable law; provided that Buyer shall not be entitled to terminate this Agreement except in case of a material breach of Sellers. [B] Any obligation hereunder, including without limitation, indemnification obligations pursuant to Article 6 is undertaken by Sellers jointly and severally, except for the indemnification obligations deriving from the breach of Articles 20 4.32, 4.33 and 4.34 in which cases the Sellers' liability toward Buyer shall be individual. [C] If subsequent to any indemnification payment by Sellers, the Companies, or the Buyer, receive payment or reimbursement of such indemnification amount, then the amount of such payment or reimbursement, less any costs incurred by the Companies to recover that amount, shall be immediately paid to Sellers. 6.02 EXTENT OF THE INDEMNITY OBLIGATION OF THE SELLERS Notwithstanding anything to the contrary provided in Article 6.01, Buyer undertakes not to avail itself of the right to require Sellers to pay any indemnity hereunder to the Companies (and not to the Buyer) unless failure by Buyer to avail itself of such right would negatively affect Buyer's tax affairs. Appropriate consideration for the assumption by Sellers of such indemnity obligation has been included in the Purchase Price payable to Sellers pursuant to Article 1.1 above. 6.03 EXCLUSIONS AND LIMITATIONS Anything herein or in any applicable law to the contrary notwithstanding: (a) Sellers shall not be liable to Buyer under Article 6.01 until the aggregate amounts of all such Losses that would be due pursuant to such Article 6.01 exceeds ITL 500,000,000 (five hundred million Italian Lire) in the aggregate, and then only to the extent of the excess of said threshold. However, the mentioned threshold of ITL 500,000,000 (five hundred million Italian Lire) will not apply to the indemnification of Losses arising from (i) the violation of Articles 4.02, 4.22 (but only with reference to any indebtness of the Companies against shareholders and not to the other cases mentioned therein), 4.28, 4.32, 4.33, or 4.34; and (ii) any claims which the Companies may receive from the following employees: Francesco Garibaldi, Stefania Garibaldi, Annamaria Agnottoli, Maddalena Garibaldi, Laura Garibaldi; provided that, if such limit is exceeded, Sellers' liability shall be limited to the excess; (b) As far as Losses arising from the violation of Article 4.07 (Tax returns and audit) are concerned, Sellers shall not be liable to Buyer under Article 6.01 until the aggregate amount of such Losses exceeds 300 Million ITL and then only to the extent of the excess of said treshold; (c) Sellers' maximum aggregate liability under Article 6.01 shall be limited to the Purchase Price; (d) The amount of all indemnities payable by Sellers pursuant to Section 6.01 shall be reduced in accordance with the following provisions: (i) In the event and to the extent that (1) any liability, cost, loss, damage, or expense to be indemnified by Sellers under Section 6.01 is deductible by the Companies for income tax purposes in any given fiscal year and that (2) Sellers' indemnity payment thereunder does not constitute taxable income for Buyer as recipient of such payment, then, in such event and to such extent, the amount of any liability, cost, loss, damage or expense to be indemnified by Sellers under such Section 6.01 will be reduced by a percentage equal to the percentage of the actual aggregate rate of income tax applicable to 21 the Companies for the fiscal year in which the income tax deduction may first be taken. (ii) In the event that (1) any liability, cost, loss, damage or expense to be indemnified by Sellers under Section 6.01 is deductible by the Companies for income tax purposes in any given fiscal year and that (2) Sellers' indemnity payment thereunder constitutes taxable income for Buyer as recipient of such payment but is taxed at an aggregate current income tax rate lower than the aggregate current income tax rate applicable to the Companies, then, in such event, the amount to be paid by Sellers as indemnity under Section 6.01 shall be reduced pursuant to paragraph (i) above, but the amount so resulting shall be grossed up in order to reflect taxation due by Buyer thereon; (e) Without prejudice to the provisions of Paragraph (c) preceding, the amount of all indemnities payable by Sellers to Buyer pursuant to Section 6.01 shall be further reduced by: (i) any reserve amount recorded on the Balance Sheet relating to the event giving rise to indemnification; (ii) the amount of any insurance or similar payment that the Companies have received or are entitled to receive in connection with the event giving rise to indemnification; (iii) the amount of any indemnification that the Companies or Buyer have received from any third party; (f) In the event that, at any time between the Closing and the date upon which the liability of Sellers for Tax or social security matters shall expire pursuant to Paragraph (h) below, any law, regulation, order or decree should be enacted in Italy having as an effect the right to settle, in whole or in part, tax or social security obligations of the Companies covered by Sellers' indemnity obligation hereunder (any such law, regulation, order or decree is hereinafter referred to as an < Amnesty >), the following provisions shall apply: (i) Sellers shall have the right to request the Buyer that the Companies avail themselves of the Amnesty; (ii) Buyer shall have the right to determine, in its sole discretion (irrespective of any request of Sellers under Paragraph (i) preceding), whether or not the Companies should avail themselves of the Amnesty and shall promptly notify to Sellers its intention to avail itself of the Amnesty. Failure by Sellers to reply to Buyer's notice within 30 days from receipt of the same shall be considered as a consent by Sellers to Buyer's request; (iii) if Buyer elects to proceed with an Amnesty in agreement with Sellers or pursuant to the Sellers' request, all costs and expenses of such Amnesty shall be borne by Sellers; (iv) if Buyer elects not to proceed with an Amnesty notwithstanding Sellers' request pursuant to Paragraph (i) preceding, it shall be free to do so, but Sellers' liability in respect of the matter constituting the subject of such Amnesty shall be limited to the amount that would have been paid by Sellers pursuant to Paragraph (iii) preceding had 22 Buyer elected to proceed with the Amnesty in accordance with Sellers' request; (v) if Buyer elects to proceed with an Amnesty against Sellers opinion, all costs and expenses of such Amnesty shall be borne by Buyer; In the event that a tax audit or an assessment ("accertamento") is subsequently carried out by the authority and irregularities arise that would give way to penalties of any kind, Sellers shall indemnify Buyer for the amount of any expenses incurred by the Buyer for filing and obtaining the Amnesty . (g) Sellers will not be required to indemnify Buyer under Article 6.01 in respect of any Losses, unless and until such Losses have become actual and has been paid for by the Companies or has become the subject matter of a final and uncontestable obligation to pay of the relevant party. (h) In no event will Sellers be responsible to Buyer under Section 6.01 in respect of: (i) any actual or alleged inaccuracy or breach of the representations and warranties referred to therein (other than representations and warranties referred to at point (ii) below) which is notified to Sellers later than twenty-four (24) months following the Closing; or (ii) any actual or alleged inaccuracy or breach of the representations and warranties referred to in Articles 4.02, 4.07, 4.22, (but only with reference to any indebtness of the Companies against shareholders and not to the other cases mentioned therein) 4.28, 4.32, 4.33, or 4.34 or any claims which the Companies may receive from the following employees: Francesco Garibaldi, Stefania Garibaldi, Annamaria Agnottoli, Maddalena Garibaldi, Laura Garibaldi; which is notified to Sellers later than thirty (30) Business Days after the expiration of (i) the date of the final tax assessment against the Companies where applicable, or (ii) the expiration of the mandatory statute of limitations whichever occurs last; provided, however, that Sellers' obligations arising under Section 6.01 or otherwise shall survive the expiration of the time limits provided under (i) and (ii) above in respect of any actual or alleged breach of the representations or warranties of Sellers referred to therein which, as of the date of such expiration, constitutes the subject matter of a notice of claim under this Article 6. 6.04. ESCROW As security for (i) the indemnification obligations of the Sellers pursuant to Articles 6.1. and 6.2. hereof; and (ii) the obligations of the Sellers pursuant to Article 7.1. below, at Closing the Sellers shall deposit the amount of ITL 2,438,983,882 (two billion four hundred thirty eight million nine hundred eighty three thousand eight hundred eighty two Italian Lire) with the Escrow Agent. Said amount shall be retained in the escrow, on the terms set out in an escrow agreement, as set forth on Schedule 3.02.(g) hereto (hereinafter referred to as 23 the "Escrow Agreement"), which shall be executed at Closing. The amount so deposited shall be released, or otherwise disposed of, under the terms of the said Escrow Agreement. 6.05 CLAIMS HANDLING In the event the Buyer shall have a claim against the Sellers, pursuant to this Agreement, it shall promptly send written notice thereof to the Sellers, indicating the nature of the claim and the amount thereof. The Buyer shall have the right to assert claims from time to time and the assertion and/or disposition of any claims shall not exhaust the rights of the Buyer with respect to further claims. The Sellers shall have a period of thirty (30) days from receipt of notice of a claim of the Buyer either to allow or contest said claim. Prior to the expiration of said twenty (30) Business Days period the Sellers shall send notice to the Buyer of their determination to either allow or contest said claim; failure to give such notice to the Buyer, within the stated deadline, by the Sellers shall be deemed as allowance of the claim by the Sellers. If the claim is allowed, the Escrow Agent shall pay to the Buyer the amount requested, within a period of five days from the allowance, or deemed allowance, of the Sellers. In the event the claim of the Buyer is contested by the Sellers, then the Parties shall endeavor to settle and compromise the dispute amicably; in the event no agreement is reached within 30 (thirty) days from the challenge of the claim, or 60 (sixty) days from Sellers' receipt of Buyer's notice, whichever occurs first, then the issue shall be determined by arbitration, in accordance with the provision of Article 8.15 below. The Escrow Agent shall pay to the Buyer any amount which will be due in accordance with the arbitration award, as soon as possible upon service of a certified copy of such arbitration, regardless of any further appeal which might be raised against the said award. 6.06 THIRD PARTY CLAIMS The Buyer shall promptly give written notice to the Sellers according to art. 6.5 above of any claim of a third party which might result in a claim, suit, action or proceeding of the Buyer against the Sellers, in accordance with this Agreement. (hereinafter referred to as "Third Party Claim") Sellers shall have the right to participate, and, to the maximum extent permitted by law, join, at their cost, by counsel or counsels of their choice, in the defense of any claim, action, suit or proceeding asserted or initiated against the Companies and/or the Buyer constituting the subject matter of a notice of a Third Party Claim. Buyer shall properly and diligently defend, and shall cause the Companies to properly and diligently defend, any Third Party Claim and shall refrain, and shall 24 cause the Companies to refrain, from taking any action which could prejudice the defense of Sellers' interest hereunder. Buyer shall not make or accept any settlement of any Third Party Claims nor shall make acquiescence thereto or, as the case may be, to any demand, assessment, judgement or order constituting the subject matter of a notice to Sellers of a Third Party Claims or, as the case may be, having resulted from any such claim, action, suit or proceeding, nor shall permit the Companies to do so, without the prior written consent of Sellers, which consent shall not be withheld without reasonable justification. If a firm offer is made to the Companies or to Buyer to settle any matter giving rise to the Sellers' liability under this Article 6 which Sellers but not Buyer, are willing to accept, Buyer and/or the Companies (as the case may be) shall be free not to enter into such settlement and to commence or continue litigation, at its/their own expense, but Sellers' liability under Article 6.01 or otherwise shall be limited to the amount of the proposed settlement, including monetary amounts and performance or contributions in kind. ARTICLE 7 ADDITIONAL UNDERTAKINGS 7.01 NON-COMPETE CLAUSE For a period of 5 years after the date of this Agreement, each of the Sellers hereby covenants and agrees to comply with and perform each of the terms and provisions described in the following subparagraphs: (a) each of the Sellers shall not, without the prior written consent of the Buyer, either directly or indirectly, throughout the world, either on his own behalf or in the service or on behalf of others, engage in or be employed by any business that competes directly or indirectly with the current business of either of the Companies, or does business in any manner (any such other business being herein referred to as a < Competing Business >) as a partner, officer, executive employee, guarantor, director, shareholder (other than as owner of less than five percent of the issued and outstanding stock of a publicly owned corporation whose securities are traded on a nationally recognized stock exchange), consultant, salesperson, joint venturer, investor, or any other manner or capacity whatsoever; (b) each of the Sellers shall not, without the prior written consent of the Buyer, either directly or indirectly, either on his own behalf or in the service or on behalf of others, or in any manner or capacity whatsoever, solicit or service for, or divert or appropriate to any Competing Business, or attempt to solicit, divert or appropriate any Competing Business, any person or entity which is, or was at any time during the two year period preceding this Agreement, a customer of either of the Companies (a "Customer"); (c) each of the Sellers shall not, either directly or indirectly, either on his behalf or on the behalf of others, or in any manner or capacity whatsoever, solicit, divert or hire away, or attempt to solicit, divert or hire away, to any Competing Business, any person employed by Company or by any 25 affiliated entity of either of the Companies, whether or not such employee is a full-time or temporary employee, and whether or not such employment was pursuant to written agreement and whether or not such employment was for a determined period or was at will. In each case of a violation of the above undertaking the defaulting Seller shall be liable to Buyer for damages, which shall be liquidated by taking into account the amount of the goodwill paid by the Buyer hereunder, i.e. the difference between the net book value of the Companies and the purchase price, without prejudice to other relief and remedies. Nothing contained in this provision shall be deemed to prohibit the Sellers from investing in equity securities of a publicly held company engaged in competing business provided the securities of such business are traded on a national or regional securities exchange or on an over the counter market, and provided further the holdings of Sellers do not amount to more than five percent (5%) of the fair market value of all the issued and outstanding equity securities of such company in the aggregate. 7.02 CONFIDENTIALITY Sellers shall keep strictly confidential all business and trade secrets for the present and envisaged production, distribution or development of the products of the Companies, in particular recipes and formulae, and shall not disclose such secrets to third parties, either directly or indirectly, nor cause, support or cover such disclosure by third parties. Sellers shall not retain any copies of the documentation with regard to business and trade secrets as supplied to Buyer. This includes all recipes and formulae and copies thereof. 7.03 RELEASE OF DIRECTORS Without prejudice to the indemnification obligations undertaken by Sellers hereunder, Buyer hereby undertakes to: (i) refrain from starting any action or proceedings pursuant to Section 2395 of the Italian Civil Code against the directors of the Companies who shall resign at Closing and those who ceased from office during a period of five years prior to Closing; (ii) refrain from voting the CAPSOL SHARES or the OCIESSE QUOTA in a manner which would allow Capsol or, as the case may be, Ociesse to start against the aforesaid directors any action or proceedings pursuant to Section 2393 of the Italian Civil Code. ARTICLE 8 MISCELLANEOUS 8.01 ENTIRE AGREEMENT AND MODIFICATION This Agreement and the Schedules hereto and other documents referenced herein replace and supersede all other agreements and understandings between and among the parties hereto, oral and written, and constitute the entire agreement between and among the parties. No changes or modifications of, or additions to, this Agreement shall be valid unless the same shall be in writing and signed by all parties hereto affected by such modifications or additions. 8.02 COUNTERPARTS 26 This Agreement has been executed in two identical counterparts (one for the Buyer and one collectively for the Sellers) in English language, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. 8.03 HEADINGS Any article, section and paragraph headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 8.04 GOVERNING LAW This Agreement shall be construed and interpreted according to the laws of the Republic of Italy. 8.05 PAYMENT OF FEES AND EXPENSES Each party shall pay all fees and expenses of such party's respective counsel, accountants and other agents and experts, and all other expenses incurred by such party incident to the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. Notary fees and registration costs incidental with this Agreement and the stamp duties due on the transfer of the SHARES shall be borne by the Buyer. Any expenses incurred by the Companies prior to Closing in connection with or relating to this transaction shall be paid directly by Sellers. 8.06 NOTICES All notices, requests, demands and other communications hereunder shall be in writing and shall be effective upon the receipt thereof by registered or certified mail, postage prepaid, and addressed as set forth below: (a) If to Buyer: Capsol Berry Plastics Srl Via Turati, 40 20121 Milan Attn. Steve Cassidy Fax 02.29014121 with copy to: O'Sullivan Graev & Karabell, LLP 30 Rockfeller Plaza New York, New York 10112, USA Attn. Michael J. O'Brien, Esq. Fax 001.212.408.2420 and to : Mazzeschi Novelli & Porcari 40, Via Turati 20121 Milano, Italy 27 Attn. Marco Mazzeschi, Esq. Fax 02.29014121 (b) If to Sellers, one copy only addressed to : Giuseppe Garibaldi Via Ugo Foscolo, 23 20059 Vimercate - Milan Fax 02.700410648 and to: Vita Samory, Fabbrini e Associati Corso Matteotti 10 20121 Milano, Italy Attn. Luca Fabbrini, Esq. Fax 02.76011200 All notices between the parties shall be sent also by telefax, with a copy to Berry Plastics Corporation at 001.812.421.9604 Any party may change the address to which notices are to be addressed by giving the other party written notice in the manner herein set forth. 8.07 SURVIVAL OF REPRESENTATIONS AND WARRANTIES All representations and warranties made by the parties in this Agreement or in any instrument, certificate or other document delivered pursuant to this Agreement shall survive the consummation of the transactions contemplated hereby notwithstanding any investigation by any party. All such representations and warranties shall be deemed material and relied upon by the party to whom made, notwithstanding that such representations and warranties are made or given on the basis of documentation prepared by, or information obtained from, representatives and/or agents of the Parties. 8.08 BINDING AGREEMENT; ASSIGNMENT This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective permitted successors and assigns. Neither this Agreement nor any of Buyer's or Sellers' rights, interests or obligations hereunder may be assigned, nor any duties delegated, without the prior written consent of the other party to this Agreement unless otherwise provided herein. Anything contained in this Agreement to the contrary notwithstanding, the Buyer may, without the prior written consent of any other Party, assign any of all of its rights and interests hereunder to any lender or lenders providing financing to the Buyer as collateral security for such financing, to the extent that any such assignment does not diminish or otherwise impair the validity and enforceability of the obligations undertaken by Buyer hereunder. 8.09 SEVERABILITY Should any provision, or provisions, of this Agreement for any reason be, or 28 become, invalid or not capable of performance, in whole or in part, then the validity of the remaining provisions of this Agreement shall not be affected thereby. In lieu of the invalid or inoperable provision, this Agreement shall be applied in a reasonable manner, which, so far as legally permissible, comes as close as possible to the application of what the parties intended, according to the spirit and purpose of this Agreement. In case of a provision being invalid, because of the extent of performance or period of time (term and date) called for by such provision, including but not limited to, the provisions of Article 7.1 of this Agreement, then the agreed upon extent of performance or period of time (term or date) shall be replaced by such performance or period of time (term or date) as is legally permissible, and which comes closest to the invalid provisions. 8.10 INSTRUMENT OF FURTHER ASSURANCE Sellers shall at any time and from time to time, upon the reasonable request by Buyer, cause the execution and delivery to Buyer of such further memoranda, instruments or agreements, and take such other action as Buyer may reasonably request, in order to more sufficiently convey, assign, transfer, deliver and/or perfect and record Buyer's title to the SHARES or to document this transaction with respect to any jurisdiction. 8.11 REMEDIES Nothing contained herein is intended to or shall be construed so as to limit the remedies which any party may have against the other party due to the breach of any representation warranty and undertakings under this Agreement and made under or pursuant to this Agreement, it being intended that any remedies shall be cumulative and not exclusive. 8.12 PUBLICITY Prior to Closing no press release, public announcement, confirmation or other information regarding this Agreement or the transactions provided for hereunder shall be made by any party without the express prior written approval of the other Party. Prior to Closing the Parties will consult with each other with respect to the timing and content of disclosure to suppliers, customers and personnel of the Companies. 8.13 SCHEDULES, ETC. All Schedules provided for herein and the documents and instruments delivered hereunder are expressly made a part hereof as fully as though set forth completely herein, and all references to this Agreement shall be deemed to refer to and include all such Schedules and instruments. Any material and intentional breach or a default under any provision of any such document or instrument shall for all purposes constitute a breach of or a default under this Agreement. 8.14 WAIVER Compliance with any provision hereof may be waived only in writing signed by the party against which such waiver is sought to be enforced. No exercise of, or failure to exercise, any right hereunder, and no partial or single exercise of any such right, shall operate as a waiver or otherwise affect such exercise or any such exercise, of that, or any other, right it being understood, except as otherwise specifically provided herein, that all such rights and all remedies 29 thereof are intended to be cumulative and not exclusive. 8.15 CONTROVERSIES All disputes arising in connection with this agreement shall be exclusively and finally settled pursuant to the Rules of Conciliation and Arbitration of the International Chamber of Commerce by a panel of three arbitrators appointed in accordance with said Rules. One arbitrator shall be appointed de by Buyer, the second arbitrator jointly by the Sellers and the Chairman directly by the ICC. The place of arbitration shall be Milan and the language of the proceedings shall be in English IN WITNESS WHEREOF, this deed, including the above mentioned and following schedules and all other documents affixed thereto has been signed by each of the parties as of the date below written. BERRY PLASTICS CORPORATION Name: Martin R. Imbler Title: Chief Executive Officer Date: , 2000 ----------------- Signature --------------------- Mrs. Annamaria AGNOTTOLI Date: , 2000 ----------------- Signature --------------------- Mr. Giuseppe GARIBALDI Date: , 2000 ----------------- Signature --------------------- Mr. Francesco GARIBALDI Date: , 2000 ----------------- Signature --------------------- Mrs. Maddalena GARIBALDI Date: , 2000 ----------------- Signature --------------------- Mrs. Maria Lorenza ZAMBON Date: , 2000 ----------------- Signature --------------------- 30 LIST OF SCHEDULES - - Schedule "A" Allocation of SELLERS' interests in CAPSOL and OCIESSE - - Schedule "B" Allocation of SELLERS' interests in GAZA - - Schedule "C" Description of the Colnago Real Estate - - Schedule "D" Description of the Buccinasco Real Estate - - Schedule 1.01 Allocation of the Purchase Price - - Schedule 3.02(a) Directors and Auditors' fee - - Schedule 3.02(c) form of statement confirming validity of representations - - Schedule 3.02(d) draft deed of transfer of the OCIESSE SHARE - - Schedule 3.02(g) Form of Escrow agreement - - Schedule 3.02(i) draft lease agreement concerning the Buccinasco Real Estate - - Schedule 3.02(j) draft lease agreement concerning the Colnago Real Estate - - Schedule 3.02(k) List of personal guarantees with banks and of money owed by the Companies to the banks - - Schedule 3.02(l) draft consultancy agreement with Mr. G. Garibaldi - - Schedule 3.02(m) draft non competition agreement with Angelo Garibaldi - - Schedule 3.02(p) Terms of labor relationship with A. Garibaldi - - Schedule 4.03 CAPSOL and OCIESSE's balance sheet of profit and loss statement for the fiscal year ended December 31st, 1999. CAPSOL and OCIESSE's interim financial statements as of May 31, 2000 - - Schedule 4.09(a) restrictions on moulds - - Schedule 4.09(b) list of moulds owned - - Schedule 4.11 list of patents and trademarks - - Schedule 4.18 list of contracts and commitments - - Schedule 4.21(a) list of executives, employees, agents - - Schedule 4.21(b) salary, commissions, benefits to employees and agents - - Schedule 4.23 outstanding financial interests - - Schedule 4.24 list of Labor Agreements, employee benefits plans and Employment Agreements. - - Schedule 4.26 list of all insurance policies - - Schedule 4.30 bank accounts and safe deposit boxes - - Schedule 4.31 list of all subcontractors and suppliers to the Companies - - Schedule 4.36 list of subsidies and grants
31 EX-3.1 3 a2042389zex-3_1.txt EXHIBIT 3.1 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF BPC HOLDING CORPORATION The undersigned, Martin R. Imbler and James M. Kratochvil, President and Executive Vice President, respectively, of BPC HOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, on behalf of said corporation, hereby certify as follows: 1. The name of the corporation is BPC HOLDING CORPORATION (the "CORPORATION"). The date of filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware was December 11, 1990, as amended and restated by the Amended and Restated Certificate of Incorporation filed December 20, 1990, as further amended by the Amended and Restated Certificate of Incorporation filed April 19, 1994, further amended by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation filed May 5, 1995 and further amended by the Certificate of Amendment filed June 14, 1996. 2. This Restated Certificate of Incorporation (the "RESTATED CERTIFICATE") was duly adopted in accordance with Sections 103, 222, 242 and 245 of the General Corporation Law of the State of Delaware. 3. The text of the Certificate of Incorporation, as amended and restated herein, shall read as follows: ARTICLE FIRST The name of the corporation is BPC HOLDING CORPORATION. ARTICLE SECOND The address of the registered office of the Corporation in the state of Delaware is 9 East Loockerman Street, City of Dover, County of Kent, Delaware 19901. The name of the registered agent of the Corporation at such address is National Registered Agents, Inc. ARTICLE THIRD The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. ARTICLE FOURTH Part A. AUTHORIZED SHARES The total number of shares of capital stock which the Corporation has authority to issue is 4,700,000 shares, consisting of: (i) 2,200,000 shares of Preferred Stock, par value $.01 per share ("Preferred Stock"), of which 600,000 shares shall be designated Series A Senior Cumulative Exchangeable Preferred Stock (the "SERIES A PREFERRED STOCK"), 1,400,000 shares shall be designated Series A-1 Senior Cumulative Preferred Stock (the "SERIES A-1 PREFERRED STOCK"); (ii) 1,000,000 shares of Class A Common Stock, par value $.01 per share ("CLASS A COMMON"), of which 500,000 shares shall be designated voting shares ("CLASS A VOTING COMMON") and 500,000 shares will be designated non-voting shares ("CLASS A NON-VOTING COMMON"); (iii) 1,000,000 shares of Class B Common Stock, par value $.01 per share ("CLASS B COMMON"), of which 500,000 shares shall be designated voting shares ("CLASS B VOTING COMMON") and 500,000 shares will be designated non-voting shares ("CLASS B NON-VOTING COMMON"); and (iv) 500,000 shares of non-voting Class C Common Stock, par value $.01 per share ("CLASS C COMMON"). The Class A Common, Class B Common and Class C Common and any other common stock issued hereafter are referred to collectively as the "COMMON STOCK". Shares of Preferred Stock and Common Stock shall have the rights, preferences and limitations set forth below. Part B. PREFERRED STOCK (i) GENERAL. Subject to limitations prescribed by the provisions of this Part B, Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated in the resolution or resolutions providing for the establishment of such series adopted by the Board of Directors of the Corporation, as hereinafter provided. Except as otherwise expressly stated in this Part B or in the resolution or resolutions providing for the establishment of a series, any shares of Preferred Stock which may be redeemed, purchased or acquired by the Corporation may be reissued except as otherwise provided by law. Subject to limitations prescribed by the provisions of this Part B, authority is hereby expressly granted to the Board of Directors to provide for the issuance, from time to time, of shares of Preferred Stock in one or more series, and, in connection with the establishment of any such series by resolution or resolutions and by the filing of a certificate pursuant to the applicable law of the State of Delaware, to determine and fix such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated in such resolution or resolutions, all to the full extent permitted by the General Corporation Law of the State of Delaware. Subject to limitations prescribed by the provisions of this Part B and without limiting the generality of the foregoing, the resolution or resolutions providing for the establishment of any series of Preferred Stock may, to the extent permitted by law, provide that such series shall be superior or rank equally or be junior to the Preferred Stock 2 of any other series. Except as otherwise expressly stated in this Part B or in the resolution or resolutions providing for the establishment of a series, no vote of the holders of shares of Preferred Stock or Common Stock shall be a prerequisite to the issuance of any shares of any series of the Preferred Stock authorized by and complying with the conditions of this Certificate. Pursuant to the authority conferred by this ARTICLE FOURTH, the following series of Preferred Stock have been designated, each such series consisting of such number of shares, with such voting powers and with such designations, preferences and relative rights, and qualifications, limitations or restrictions thereof as are stated and expressed either below or in the exhibit with respect to such series attached hereto as specified below and incorporated herein by reference: Exhibit A Series B Cumulative Preferred Stock (as same has been amended as of the date of filing of this Restated Certificate)
(ii) SERIES A CUMULATIVE EXCHANGEABLE PREFERRED STOCK AND SERIES A-1 CUMULATIVE PREFERRED STOCK. The designation and amount of the Series A Cumulative Exchangeable Preferred Stock, par value $.01 per share, and the Series A-1 Cumulative Preferred Stock, par value $.01 per share, and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions of such series, are as follows: Section 1. DESIGNATION AND AMOUNT; RANK. (a) The shares of such series of Preferred Stock shall be designated as the "Series A Senior Cumulative Exchangeable Preferred Stock" (the "SERIES A PREFERRED STOCK") and the "Series A-1 Senior Cumulative Preferred Stock" (the "SERIES A-1 PREFERRED STOCK") and the number of shares initially constituting such series shall be 600,000 and 1,400,000, respectively, which numbers may be decreased (but not increased) by the Board of Directors of the Corporation (the "BOARD OF DIRECTORS") without a vote of stockholders; PROVIDED, HOWEVER, that such number may not be decreased below the number of then currently outstanding shares of Series A Preferred Stock or Series A-1 Preferred Stock, as the case may be. The stated value and liquidation preference per share (the "LIQUIDATION PREFERENCE") of the Series A Preferred Stock and the Series A-1 Preferred Stock shall be $25.00. (b) The Series A Preferred Stock and the Series A-1 Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the Corporation, prior to all other Capital Stock of the Corporation (such other Capital Stock being herein referred to as the "JUNIOR STOCK"). Section 2. DEFINITIONS. Capitalized terms used herein shall have the meanings set forth in this Section 2: 3 "ACCUMULATED DIVIDENDS" means, on any specific date with respect to any share of Series A Preferred Stock or Series A-1 Preferred Stock, the dividends that have accrued on such share as of such specific date in respect of Dividend Periods ending on or prior to the Cash Dividend Date and that have not previously been paid in cash. "AFFILIATE" means, with respect to any specified Person, any other Person which, directly or indirectly, controls, is under common control with, or is owned or controlled by, such specified Person. For purposes of this definition, (i) "control" means, with respect to any specified Person, either (x) the beneficial ownership of more than 30 percent of any class of equity securities or (y) the power to direct the management or policies of the specified Person through the ownership of voting securities, by contract, voting agreement or otherwise and (ii) the terms "controlling", "control with" and "controlled by", etc., shall have meanings correlative to the foregoing. "BANKRUPTCY LAW" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. "BERRY" means Berry Plastics Corporation. "BERRY REVOLVING CREDIT FACILITY" means the Third Amended and Restated Financing and Security Agreement, dated as of May 9, 2000, by and among Berry, Bank of America, N.A., as Administrative Agent, and the other parties named therein, providing for up to $70 million of borrowings, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time which includes the addition, substitution or replacement of any or all lenders thereunder under the same or any replacement agreement. "BOARD OF DIRECTORS" has the meaning ascribed to such term in Section 1(a). "BPC SENIOR SUBORDINATED NOTES" means the 12-1/4% Senior Subordinated Notes due 2004 issued pursuant to the BPC Senior Subordinated Notes Indenture. "BPC SENIOR SUBORDINATED NOTES INDENTURE" means the Indenture dated as of April 21, 1994, as amended, among the Corporation, Berry Iowa Corporation and Berry-CPI Plastics Corp., as Guarantors, Berry, and United States Trust Company of New York, as Trustee, regarding the BPC Senior Subordinated Notes. "BUSINESS DAY" means any day other than Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "BY-LAWS" means the by-laws of the Corporation, as they may be amended or restated from time to time. 4 "CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet prepared in accordance with GAAP. "CAPITAL STOCK" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including without limitation, any preferred stock, and with respect to partnerships, partnership interests (whether general or limited) and 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, such partnership, but excluding any debt securities convertible into such equity. "CASH DIVIDEND DATE" means the last day of June 2003. "CASH EQUIVALENTS" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than six months from the date of acquisition, (iii) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months from the date of acquisition and overnight bank deposits, in each case with any lender party to the Berry Revolving Credit Facility or with any domestic commercial bank having capital and surplus in excess of $500 million, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above and (v) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each case maturing within six months after the date of acquisition. "CERTIFICATE OF INCORPORATION" means the Certificate of Incorporation of the Corporation, as it may be amended or restated from time to time. "CLOSING DATE" has the meaning ascribed to such term in the Purchase Agreement. "COMMON STOCK" means the Common Stock, of all classes, of the Corporation. "CONSOLIDATED NET WORTH" means, with respect to any Person as of any date, the sum of (i) the consolidated equity of the common stockholders of such Person and its consolidated Subsidiaries as of such date plus (ii) the respective amounts reported on such Person's balance sheet as of such date with respect to any series of preferred stock (other than Disqualified Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such preferred stock, less (x) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made within 12 months after the acquisition of such business) subsequent to the Issue Date for the Series A Preferred Stock in the book value of any asset owned by such Person or a consolidated Subsidiary of such Person, (y) all investments as of such date in unconsolidated Subsidiaries and 5 in Persons that are not Subsidiaries (except, in each case, Permitted Investments), and (z) all unamortized debt discount and expense and unamortized deferred charges as of such date, all of the foregoing determined in accordance with GAAP. "CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. "CVCA" means Chase Venture Capital Associates, LLC (formerly Chase Venture Capital Associates, L.P.). "DGCL" means the General Corporation Law of the State of Delaware, as in effect from time to time. "DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by the terms of any Capital Stock into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to December 31, 2008; PROVIDED, HOWEVER, that any Capital Stock that would otherwise be Disqualified Stock will not be Disqualified Stock solely as a result of a maturity or redemption event that is conditioned upon and subject to compliance with Section 4.07 of the Senior Secured Note Indenture. "DIVIDEND PAYMENT DATE" means the last day of March, June, September and December in each year. "DIVIDEND PERIOD" means each quarterly period ending on a Dividend Payment Date. "DIVIDEND RATE" means, with respect to each share of Series A Preferred Stock and Series A-1 Preferred Stock, a rate of 14% per annum of the sum of the Liquidation Preference and all accrued and unpaid dividends on such share (excluding the amount of any dividends accrued since the immediately preceding Dividend Payment Date), subject to adjustment as follows: (i) upon the occurrence of any Event of Non-Compliance specified in clause (a) of the definition of such term, the Dividend Rate (if the then current Dividend Rate is less than 16% per annum) shall immediately increase to 16% per annum; PROVIDED that any increase in the Dividend Rate resulting from the operation of this clause (i) shall terminate as of the close of business on the first date thereafter on which no Event of Noncompliance specified in clause (a) of the definition of such term exists and the Dividend Rate shall revert to the rate that otherwise would be in effect but for the operation of this clause (i), subject to subsequent increases pursuant to this clause (i); and (ii) upon the occurrence of an Event of Non-Compliance specified in clause (b) of the definition of such term, the Dividend Rate (if the then current Dividend Rate is less than 15% per annum) shall immediately increase to 15% per annum; PROVIDED that any increase in the Dividend Rate resulting from the operation of this clause (ii) shall 6 terminate as of the close of business on the first date thereafter on which no Event of Noncompliance specified in clause (b) of the definition of such term exists and the Dividend Rate shall revert to the rate that otherwise would be in effect but for the operation of this clause (ii), subject to subsequent increases pursuant to this clause (ii). "EVENT LEADING TO VOTING RIGHTS" means any of the following: (a) the Corporation, commencing on the Cash Dividend Date, fails for six (6) Dividend Periods (whether or not consecutive) to declare and pay dividends in cash on shares of Series A Preferred Stock or Series A-1 Preferred Stock pursuant to Section 3(a) in an amount equivalent to or exceeding the full amount of dividends accrued and payable thereon, whether or not such declaration or payment is legally permissible or is prohibited by an agreement or instrument to which the Corporation is subject; (b) (i) the Corporation or a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a Custodian of it or for any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency; or (ii) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Corporation or any Significant Subsidiary in an involuntary case; (B) appoints a Custodian of the Corporation or any Significant Subsidiary or for any substantial part of its property; or (C) orders the winding up or liquidation of the Corporation or any Significant Subsidiary or any similar relief is granted under any foreign laws and the order, decree or relief remains unstayed and in effect for 60 days; or (c) outstanding Indebtedness of the Corporation or any Subsidiary in an amount aggregating in excess of $10,000,000 is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof prior to final maturity. "EVENT OF NONCOMPLIANCE" means any of the following: (a) the Corporation fails to declare and pay dividends in cash on shares of Series A Preferred Stock or Series A-1 Preferred Stock on any Dividend Payment Date on or after the Cash Dividend Date pursuant to Section 3(a) in an amount equivalent to or exceeding the full amount of dividends (other than Accumulated Dividends) then accrued and payable thereon, or to redeem, or offer to redeem pursuant to Section 7A, shares of Series A Preferred Stock or Series A-1 Preferred Stock on any date required hereunder, whether or not such redemption, declaration or payment is legally permissible or is prohibited by any agreement or instrument to which the Corporation is subject, or breaches Section 6.9; or (b) the Corporation fails to perform, observe, or comply with any covenant, agreement, obligation, or restriction required hereunder, after giving effect to any grace period provided herein. 7 "EXCHANGE" means the exchange of the Series A Preferred Stock for the Exchange Notes as provided in Section 8. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXCHANGE DATE" has the meaning ascribed to such term in Section 8(a). "EXCHANGE INDENTURE" means an indenture between the Corporation and a trustee satisfactory to the Corporation and the holders of a majority of the outstanding shares of Series A Preferred Stock in form and substance satisfactory to the Corporation and holders of at least 66-2/3% of the outstanding shares of Series A Preferred Stock and reflecting the terms set forth in Exhibit F to the Purchase Agreement. "EXCHANGE NOTES" means the Corporation's Senior Subordinated Exchange Notes to be issued upon the Exchange under the Exchange Indenture. "EXISTING INDEBTEDNESS" means Indebtedness of the Corporation and its Subsidiaries (including the BPC Senior Subordinated Notes) in existence on the Issue Date for the Series A Preferred Stock, until such amounts are repaid. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date with respect to the Series A Preferred Stock. "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. "HEDGING OBLIGATIONS" means, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates. "INDEBTEDNESS" means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, and also includes, to the extent not otherwise included, the Guarantee of any Indebtedness of such Person or any other Person. 8 "INTERNATIONAL" means Atlantic Equity Partners International II, L.P. "INVESTMENTS" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees), advances or capital contributions (excluding commission, travel and similar advances to officers, directors, consultants and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Capital Stock or other securities and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. "ISSUE DATE" means in the case of the Series A Preferred Stock or the Series A-1 Preferred Stock the first date on which shares of such series are issued by the Corporation pursuant to a Purchase Agreement. "JUNIOR PAYMENT" has the meaning ascribed to such term in Section 6.1(a). "JUNIOR STOCK" has the meaning ascribed to such term in Section 1(b). "LIEN" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "LIQUIDATION PREFERENCE" has the meaning ascribed to such term in Section 1(a). "MERGERCO" means BPC Mergerco, Inc. which was merged with and into the Corporation pursuant to the Certificate of Merger filed with the Secretary of State of the State of Delaware, June 18, 1996. "NORTHWESTERN" means The Northwestern Mutual Life Insurance Company. "OFFICER" means the Chairman of the Board, the President, any Executive Vice President, any Vice President, the Treasurer or the Secretary of the Corporation, as applicable. "OFFICERS' CERTIFICATE" means a certificate signed by two officers. "PAST DUE" has the meaning ascribed to such term in Section 3(a). "PERMITTED INVESTMENTS" means (a) any Investments in the Corporation or in a Wholly Owned Subsidiary of the Corporation that is engaged in the same or similar line of business as the Corporation and its Subsidiaries were engaged in on the Issue Date for the Series A Preferred Stock and (b) any Investments in Cash Equivalents. "PERSON" means any individual, corporation, general or limited partnership, joint venture, association, limited liability company, joint stock company, trust, business trust, bank, trust company, estate (including any beneficiaries thereof), unincorporated organization, cooperative, association or governmental branch, authority, agency or political subdivision thereof. 9 "PREFERRED STOCK" means the preferred stock, par value $0.01 per share, of the Corporation. "PURCHASE AGREEMENT" means, in the case of the Series A Preferred Stock, the Preferred Stock and Warrant Purchase Agreement dated as of June 12, 1996, by and among the Corporation, Mergerco, Northwestern and CVCA, and in the case of the Series A-1 Preferred Stock, the Preferred Stock and Warrant Purchase Agreement dated as of May 9, 2000 by and among the Corporation, Northwestern and CVCA, in each case as modified and supplemented and in effect from time to time. "REDEMPTION DATE" means the date of any redemption of the Series A Preferred Stock or the Series A-1 Preferred Stock pursuant to Section 7. "REDEMPTION PERCENTAGE" means the applicable redemption percentage set forth below, if the Redemption Date occurs during the period beginning June 15 of the years indicated:
Series A Series A-1 Redemption Redemption Year Percentage Percentage ---- ---------- ---------- 1999 110% -- 2000 108% -- 2001 106% -- 2002 104% 108% 2003 102% 106% 2004 100% 104% 2005 100% 102% 2006 and thereafter 100% 100%
"SALE OF THE CORPORATION" means the sale of the Corporation to one or more Persons that are not Affiliates of the Corporation in a single or a series of related transactions pursuant to which the acquiring Person or Persons acquire (i) all of the capital stock of the Corporation (whether by way of sale, transfer, merger, consolidation or otherwise) or (ii) all or substantially all of the assets of the Corporation and its Subsidiaries, taken as a whole. "SEC" means the Securities and Exchange Commission. "SECRETARY" means the Secretary of the Corporation. "SENIOR SECURED NOTES" means the 12-1/2% senior secured notes issued by the Corporation pursuant to the terms of the Senior Secured Note Indenture. "SENIOR SECURED NOTE INDENTURE" means the Indenture dated as of the Closing Date, between the Corporation and First Trust of New York, a national association, as trustee, regarding the Senior Secured Notes as the same may be modified and supplemented, and in effect from time to time. 10 "SENIOR STOCK" means any stock of the Corporation ranking prior to, or on a parity with, the Series A Preferred Stock or the Series A-1 Preferred Stock either with respect to the payment of dividends or the distribution of assets, whether upon liquidation or otherwise. "SERIES A PREFERRED STOCK" and "SERIES A-1 PREFERRED STOCK" have the meanings ascribed to such terms in Section 1(a). "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "Significant Subsidiary" of the Corporation within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC. "SPECIFIED AMOUNT" means, on any specific date with respect to any share of Series A Preferred Stock or Series A-1 Preferred Stock, the sum of (i) the Liquidation Preference with respect to such share and (ii) the Accumulated Dividends with respect to such share. "STATED MATURITY" means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision. "STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, dated the Closing Date with respect to the Series A Preferred Stock, among the Corporation, International, CVCA, certain other institutional holders, certain members of management of the Corporation and CVCA and Northwestern as holders of Series A Preferred Stock with respect to certain provisions thereof, as amended from time to time pursuant to its terms. "STOCK PURCHASE AGREEMENT" means the Stock Purchase and Recapitalization Agreement, dated as of June 12, 1996, among the Corporation, Mergerco, certain purchasers listed on Schedule I thereto and certain shareholders listed on Schedule II thereto, as amended from time to time pursuant to its terms. "SUBSIDIARY" means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary shall refer to a Subsidiary of the Corporation. "SUCCESSOR CORPORATION" has the meaning ascribed to such term in Section 6.8. "WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of such Person. 11 Section 3. DIVIDENDS AND DISTRIBUTIONS. (a) The holders of shares of Series A Preferred Stock and the Series A-1 Preferred Stock, in preference to the holders of shares of Junior Stock, shall be entitled to receive quarterly, when, as and if declared by the Board of Directors out of funds of the Corporation legally available for the payment of dividends, cumulative dividends on each share at the Dividend Rate. With respect to each Dividend Payment Date occurring on or after the Cash Dividend Date, such dividends shall be paid in cash in arrears. With respect to each Dividend Payment Date occurring prior to the Cash Dividend Date, such dividends shall be paid, at the sole option of the Corporation, in whole or in part, in cash in arrears, and to the extent the Corporation does not pay such dividends in cash, then dividends owed to such holder shall accrue quarterly on a compound basis. Dividends are payable in arrears in respect of the Dividend Period ending on such Dividend Payment Date so long as shares of Series A Preferred Stock or the Series A-1 Preferred Stock are outstanding (dividends not paid on any such date in accordance with the terms of this Section 3 are referred to herein as "PAST DUE"); PROVIDED that (i) the first Dividend Payment Date for the Series A Preferred Stock shall be September 30, 1996, and the first Dividend Payment Date for the Series A-1 Preferred Stock shall be the Dividend Payment Date next following the actual date of issue of each share (or the predecessor share) of such series in respect of the period from such date of issue through such Dividend Payment Date, and (ii) any past due dividends may be paid on any date fixed by the Board of Directors. (b) Dividends payable pursuant to Section 3(a) shall begin to accrue and be cumulative from the actual date of issue of each share (or the predecessor share) of the respective series. The amount of dividends payable for any period shorter or longer than a full Dividend Period, including the first Dividend Period, shall be determined on the basis of twelve 30-day months and a 360-day year. Dividends paid on the shares of Series A Preferred Stock or the Series A-1 Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated PRO RATA on a share-by-share basis among all such shares at the time outstanding. Dividends paid on the shares of Series A Preferred Stock and the Series A-1 Preferred Stock shall be allocated PRO RATA on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock and the Series A-1 Preferred Stock entitled to receive payment of a dividend declared thereon, which record date shall be no more than sixty (60) days nor less than ten (10) days prior to the date fixed for the payment thereof. If no record date is fixed, the record date for determining holders of shares of Series A Preferred Stock and the Series A-1 Preferred Stock entitled to receive payment of a dividend declared thereon shall be at the close of business on the day on which the Board of Directors declares such dividend. Section 4. LIQUIDATION, DISSOLUTION OR WINDING UP. (a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of shares of Series A Preferred Stock and the Series A-1 Preferred Stock shall be entitled to receive, out of the assets of the Corporation available for distribution to its stockholders, an amount equal to the Liquidation Preference per share of Series A Preferred Stock or the Series A-1 Preferred Stock plus all accrued and unpaid dividends thereon to the date of such payment, and no distribution shall be made to the holders of shares of Junior Stock upon liquidation, dissolution or winding up unless, prior thereto, the holders of shares of Series A Preferred Stock 12 and the Series A-1 Preferred Stock shall have received an amount equal to the Liquidation Preference per share plus all accrued and unpaid dividends thereon to the date of such payment (whether or not declaration or payment of such dividends is legally permissible or is prohibited by any agreement or instrument to which the Corporation is subject). (b) Neither the consolidation, merger or other business combination of the Corporation with or into any other Person or Persons nor the sale, lease, exchange or conveyance of all or any part of the property, assets or business of the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Section 4. Section 5. VOTING RIGHTS. (a) Except as provided in this Section 5 or in the Certificate of Incorporation, and except for any voting rights provided by law, the holders of shares of Series A Preferred Stock and the Series A-1 Preferred Stock shall have no voting rights and their consent shall not be required for the taking of any corporate action. (b) (i) Upon the occurrence of any Event Leading to Voting Rights, the holders of shares of Series A Preferred Stock and the Series A-1 Preferred Stock, voting together, shall have the right, notwithstanding anything to the contrary in the Certificate of Incorporation, the By-Laws or any agreement or instrument to which the Corporation is a party, voting together as a single class, to elect two (2) directors to the Board of Directors, all such directors to be in addition to the number of directors constituting the Board of Directors immediately prior to the accrual of such rights, with the remaining directors to be elected by the other class or classes of stock entitled to vote therefor at any meeting of the stockholders held for the purpose of electing directors. The right of the holders of shares of Series A Preferred Stock and the Series A-1 Preferred Stock to elect members of the Board of Directors as set forth herein shall continue until (A) with respect to an Event Leading to Voting Rights specified in clause (a) of the definition of such term, such time as all accrued and unpaid dividends that are in arrears are paid in full in cash, and (B) with respect to any other Event Leading to Voting Rights, until such event, occurrence or failure ceases to exist or has been cured, as the case may be, at which time the special right of the holders of the Series A Preferred Stock and the Series A-1 Preferred Stock so to vote as a class for the election of directors and the term of office of the directors elected by such persons shall terminate upon resignation; provided, however, that such right shall again be applicable with respect to any subsequent Event Leading to Voting Rights. (ii) The right of the holders of Series A Preferred Stock and the Series A-1 Preferred Stock to vote for the election of directors herein may be exercised at any annual meeting of stockholders of the Corporation or at any special meeting of stockholders of the Corporation called for such purpose as hereinafter provided or at any adjournment thereof, or by the written consent, delivered to the Secretary, of the holders of a majority of all outstanding shares of Series A Preferred Stock and the Series A-1 Preferred Stock, acting together, as of the record date of such written consent. The Secretary may call, and upon the written request of the holders of record of at least twenty percent (20%) of the outstanding shares of Series A Preferred Stock and the Series A-1 Preferred Stock addressed to the Secretary at the principal executive offices of the Corporation shall call, a special meeting of the holders of such shares for the election of such directors as provided herein. Such meeting shall be held within thirty (30) days after delivery of such request to the Secretary, at the place and upon the notice required for 13 meetings of stockholders provided in the By-Laws or by law for the holding of meetings of stockholders. No such special meeting or adjournment thereof shall be held on a date less than thirty (30) days before an annual meeting of stockholders of the Corporation or any special meeting in lieu thereof at which the holders of the Series A Preferred Stock and the Series A-1 Preferred Stock are given the opportunity to elect directors. If at any such annual or special meeting or any adjournment thereof the holders of a majority of the then outstanding shares of Series A Preferred Stock and the Series A-1 Preferred Stock entitled to vote in such election shall be present or represented by proxy, or if such majority shall have acted by written consent in lieu of a meeting with respect thereto, then the authorized number of directors shall be increased and the holders of the Series A Preferred Stock and the Series A-1 Preferred Stock shall be entitled to elect such additional directors as provided herein. The absence of a quorum of the holders of any other class or series of capital stock of the Corporation at any such annual or special meeting shall not affect the exercise by the holders of the Series A Preferred Stock and the Series A-1 Preferred Stock of their right to elect directors as set forth herein. Subject to Section 5(b)(i) and Section 3(c), the directors so elected shall serve until the next annual meeting of stockholders of the Corporation or until their successors shall be elected and shall qualify. In case any of the directors elected by the holders of the Series A Preferred Stock and the Series A-1 Preferred Stock hereunder shall cease to serve as a director for any reason prior to the expiration of his or her term, the holders of the Series A Preferred Stock and the Series A-1 Preferred Stock then outstanding and entitled to vote for such director may, by written consent as hereinabove provided, or at a special meeting of such holders called as provided above, elect a successor to hold office for the unexpired term of the director whose place shall be vacant. (iii) The rights of the holders of Series A Preferred Stock and the Series A-1 Preferred Stock to elect directors hereunder shall not be adversely affected by the voting or other rights applicable to any other security of the Corporation. Section 6. RESTRICTIVE COVENANTS. For so long as any shares of Series A Preferred Stock or the Series A-1 Preferred Stock shall be outstanding, and unless the consent or approval of a greater number of shares shall then be required by law, without first obtaining the consent or approval of the holders of at least 66-2/3% of the shares of Series A Preferred Stock and the Series A-1 Preferred Stock then outstanding, voting as a single class (except in the case of Section 6.6, where they shall vote separately, or as otherwise set forth herein), given in person or by proxy at a meeting at which the holders of such shares shall be entitled to vote separately as a class, or by written consent: 6.1. LIMITATION ON JUNIOR PAYMENTS. (a) Subject to Section 6.1(b), the Corporation shall not, directly or indirectly, (i) declare, pay, or set apart for payment on any Junior Stock, any dividend or make any distribution on or in respect of Junior Stock (including any payment in connection with any merger or consolidation involving the Corporation or any of its Subsidiaries), except dividends or distributions payable in shares (other than Disqualified Stock) of the classes or series upon which such dividends are declared or paid, or payable in shares of Common Stock with respect to Junior Stock other than Common Stock, together with cash in lieu of fractional shares, or (ii) purchase, redeem, retire or otherwise acquire for value any Junior Stock (any such dividend, 14 distribution, purchase, redemption, or other acquisition being herein referred to as a "JUNIOR PAYMENT"). (b) The provisions of Section 6.1(a) shall not prohibit: (i) any purchase or redemption of Capital Stock of the Corporation made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Corporation (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary); (ii) the repurchase, redemption or other acquisition or retirement for value of Capital Stock of the Corporation pursuant to any management equity subscription, stockholder or stock option agreement; PROVIDED, HOWEVER, that (X) the aggregate price paid for all such repurchased, redeemed, acquired or retired Capital Stock shall not exceed $1.0 million in any fiscal year and (Y) no Default or Event of Default (as defined in the Senior Secured Note Indenture) or Event of Non-Compliance or Event Leading to Voting Rights shall have occurred and be continuing immediately after such transaction; and (iii) any repurchase of Capital Stock from an SBIC Holder (as defined in the respective Purchase Agreements), in accordance with the terms of 6.2 of the respective Purchase Agreements or the Stock Purchase Agreement (as the case may be), arising out of a Regulatory Violation or a Regulatory Problem (as defined in the respective Purchase Agreements). 6.2. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. The Corporation shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Subsidiary to (i)(a) pay dividends or make any other distributions to the Corporation or any of its Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (b) pay any Indebtedness owed to the Corporation or any of its Subsidiaries, (ii) make loans or advances to the Corporation or any of its Subsidiaries, (iii) transfer any of its properties or assets to the Corporation or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (A) Existing Indebtedness, (B) Indebtedness of Berry or Berry's Subsidiaries permitted to be incurred under the Senior Secured Note Indenture, (C) the Senior Secured Note Indenture and the Senior Secured Notes, (D) applicable law, (E) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Corporation or any of its Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the Property or assets of the Person, so acquired, (F) by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices, or (G) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (iii) above on the property so acquired. 6.3. AMENDMENT OF FINANCING DOCUMENTS. The Corporation will not amend or supplement the Senior Secured Notes or the Senior Secured Note Indenture, as in effect on the Closing Date for the Series A Preferred Stock (or enter into any 15 refinancing or replacement thereof, or any new financing agreement) if (a) the restrictive covenants of such amended or supplemented or new financing agreement would impair the ability of the Corporation to perform its obligations set forth herein or in the respective Purchase Agreements, or (b) the provisions of such amended or supplemented or new financing agreement with respect to the payment of dividends on, or the redemption of, Preferred Stock, are more onerous or restrictive to the Corporation than the corresponding provisions set forth in the Senior Secured Note Indenture as in effect on the Closing Date for the Series A Preferred Stock. 6.4. LIMITATION ON ISSUANCE OF SUBSIDIARY SECURITIES. The Corporation will cause its Subsidiaries not to issue any Capital Stock (other than to the Corporation or any wholly-owned subsidiary of the Corporation), unless the proceeds of such issuance are used to redeem all (but not less than all) of the then outstanding shares of Series A Preferred Stock and the Series A-1 Preferred Stock on the terms and conditions set forth herein. 6.5. SENIOR STOCK; ADDITIONAL SERIES A-1 PREFERRED STOCK. The Corporation shall not (i) authorize, create or issue any class or series, or any shares of any class or series, of Senior Stock, unless the proceeds from such issuance are used to redeem or repurchase all (but not less than all) of the then outstanding shares of Series A Preferred Stock and the Series A-1 Preferred Stock pursuant to the terms and conditions set forth herein and in the respective Purchase Agreements; (ii) reclassify any shares of capital stock of the Corporation into shares of Senior Stock; or (iii) authorize or issue any security exchangeable for, convertible into, or evidencing the right to purchase any shares of Senior Stock. The Corporation shall not issue any additional shares of Series A-1 Preferred Stock at any time after the 180th day after the Closing Date for the Series A-1 Preferred Stock; PROVIDED, HOWEVER, that, for a period of 180 days following the Series A-1 Preferred Stock Issue Date, the Corporation may issue any and all shares of Series A-1 Preferred Stock that are authorized as of such Issue Date, but not outstanding as of the day immediately following such Issue Date, at a price per share not less than the Liquidation Preference for each share of Series A-1 Preferred Stock and otherwise on terms no more favorable to the purchasers than the terms of the Purchase Agreement in respect of the Series A-1 Preferred Stock. 6.6. CERTIFICATE OF INCORPORATION; BY-LAWS. The Corporation shall not amend, alter or repeal the Certificate of Incorporation or By-Laws to alter or change the preferences, rights or powers of the Series A Preferred Stock or the Series A-1 Preferred Stock so as to affect the holders of the Series A Preferred Stock or the Series A-1 Preferred Stock adversely, to otherwise impair the rights of the holders of Series A Preferred Stock or the Series A-1 Preferred Stock, or to increase the authorized number of shares of Series A Preferred Stock or the Series A-1 Preferred Stock. 6.7. LIQUIDATION. The Corporation shall not effect the voluntary liquidation, dissolution or winding up of the Corporation. 16 6.8 MERGER AND CONSOLIDATION. The Corporation, shall not consolidate with or merge with or into, or convey, transfer, lease or sell all or substantially all its assets to, any Person, unless: (a) All outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock are purchased as a part of such transaction at a per share price of not less than the Liquidation Preference of each such share plus all accrued and unpaid dividends thereon through the date of such purchase; or (b) (i) the Corporation is the surviving corporation or, if the surviving corporation is not the Corporation, the resulting, surviving or transferee Person (the "SUCCESSOR CORPORATION") shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and (x) the Successor Corporation (if not the Corporation) shall expressly assume, by an amendment to the respective Purchase Agreements in form and substance satisfactory to the holders of at least 66-2/3% of all outstanding shares of Series A Preferred Stock and 66-2/3% of all outstanding shares of Series A-1 Preferred Stock as of the date of such assumption, all the obligations of the Corporation thereunder, and (y) the Series A Preferred Stock and the Series A-1 Preferred Stock shall be converted or exchanged for and shall become shares of such Successor Corporation, having in respect of such Successor Corporation the same powers, preferences and relative participating, optional or other special rights, and the qualifications, limitations or restrictions thereto, that the Series A Preferred Stock and the Series A-1 Preferred Stock, respectively, had immediately prior to such transaction; (ii) immediately after giving effect to such transaction, no Default or Event of Default (as defined in the Senior Secured Note Indenture) exists and no Event of Non-Compliance or Event Leading to Voting Rights shall have occurred and be continuing; (iii) the Corporation or Successor Corporation, as the case may be, will (x) at the time of the transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period be permitted to incur at least $1.00 of additional Indebtedness pursuant to the "Fixed Charge Coverage Ratio" test set forth in Section 4.09 of the Senior Secured Note Indenture and (y) have a Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Corporation immediately preceding the transaction; and (iv) the Corporation shall have delivered to the holders of the Series A Preferred Stock and the Series A-1 Preferred Stock an Officers' Certificate stating that such consolidation, merger, transfer or lease comply with this Section 6.8. The Successor Corporation shall succeed to, and be substituted for, and may exercise every right and power of, the Corporation to the extent set forth in the Purchase Agreements, but in the case of a lease of all or substantially all its assets, the Corporation 17 shall not be released from its obligations with respect to the Series A Preferred Stock or the Series A-1 Preferred Stock. Notwithstanding clauses (ii) and (iii), (1) any Subsidiary of the Corporation may consolidate with, merge into or transfer all or part of its properties and assets to the Corporation and (2) the Corporation may merge with an Affiliate incorporated solely for the purpose of reincorporating the Corporation in another jurisdiction to realize tax or other benefits. 6.9 CHANGE OF CONTROL. The Corporation will not undergo a Change of Control (as defined in SECTION 7A(i)) unless prior to or contemporaneously with such Change of Control (i) the holders of any Indebtedness, the provisions of any agreement or instrument governing which would prohibit the Corporation from redeeming or making an offer to redeem shares of Series A Preferred Stock or Series A-1 Preferred Stock pursuant to SECTION 7A, shall have consented to the consummation of such redemption or offer to redeem shares of Series A Preferred Stock or Series A-1 Preferred Stock or (ii) the Corporation shall have redeemed all such Indebtedness outstanding or refinanced all such Indebtedness outstanding with the proceeds of other Indebtedness or equity securities that permit the consummation of the redemption or offer for redemption of the Series A Preferred Stock and the Series A-1 Preferred Stock pursuant to SECTION 7A. Section 6A. OTHER COVENANTS. 6A.1. NOTIFICATION OF CERTAIN EVENTS. The Corporation shall mail to each holder of record of the Series A Preferred Stock and the Series A-1 Preferred Stock, within 30 days after the occurrence thereof, written notice in the form of an Officers' Certificate of (i) the occurrence of any Event of Non-Compliance and (ii) any failure by the Corporation to observe any covenant specified herein or in Section 6.2 of the respective Purchase Agreements. 6A.2. DISTRIBUTIONS ON JUNIOR STOCK. Except as otherwise provided for in Section 6.1(b), for so long as the Common Stock of the Corporation is not registered pursuant to Section 12 or 15 of the Securities Exchange Act of 1934, as amended, any dividends, distributions or other payments made on or in respect of Junior Stock shall be held by holders of Junior Stock in trust for the benefit of the holders of Series A Preferred Stock and the Series A-1 Preferred Stock and shall be remitted to the holders of Series A Preferred Stock and the Series A-1 Preferred Stock, on a pro-rata basis, until each holder of Series A Preferred Stock and the Series A-1 Preferred Stock has received an amount equal to the per share Liquidation Preference plus all accrued and unpaid dividends. 6A.3. BOARD OBSERVERS; MEETINGS. (a) For so long as CVCA or its Affiliates or Northwestern or its Affiliates each hold in the aggregate at least 20% of the then outstanding shares of Series A Preferred Stock or Series A-1 Preferred Stock, and in addition to any rights CVCA may have as a purchaser of Common Stock under the Stockholders Agreement, the Stock Purchase Agreement or otherwise, the Corporation shall afford each of CVCA and Northwestern the opportunity to have one (1) representative each (each referred to as an "OBSERVER") attend (at the Corporation's cost and expense) as an observer at (but not participate in or vote at) each meeting of the 18 Board of Directors. In addition, upon the occurrence of an Event of Non-Compliance, CVCA and Northwestern shall each be afforded the opportunity to appoint a second Observer to attend (at the Corporation's sole cost and expense) as an observer at (but not participate in or vote at) each meeting of the Board of Directors. The Corporation shall give each Observer notice of all such meetings at the same time and in the same manner as notice is given to members of the Board of Directors. Each Observer shall be entitled to receive all written materials and other information given to the directors of the Corporation in connection with such meetings at the same time and in the same manner and form such materials and information are given to the directors, and copies of all minutes and all resolutions adopted by the Board of Directors (whether at meetings, by written consent or otherwise) promptly after such adoption and (if applicable) approval thereof (it being understood that such copies shall be certified by the Secretary of the Corporation). (b) For so long as any shares of Series A Preferred Stock or Series A-1 Preferred Stock shall be outstanding, regular meetings of the Board of Directors shall be held at least three (3) times during the fiscal year of the Corporation. Section 7. REDEMPTION. (a) Other than as set forth in clause (b) or Section 7A below, the Corporation shall have no right to redeem any shares of (x) Series A Preferred Stock prior to June 15, 1999, or (y) Series A-1 Preferred Stock prior to June 15, 2002. On and after the relevant date, to the extent that the Corporation shall have funds legally available therefor, the Corporation shall have the right, at its sole option and election, to redeem, at any time or from time to time, in whole or in part, the outstanding shares of Series A Preferred Stock or Series A-1 Preferred Stock by paying therefor in cash an amount per share equal to the sum of (i) the product of (A) the Specified Amount of such share, times (B) the applicable Redemption Percentage, and (ii) the amount of all accrued and unpaid dividends thereon to the Redemption Date (excluding any Accumulated Dividends, but including an amount equal to a prorated dividend from the immediately preceding Dividend Payment Date to the Redemption Date). No share of Series A-1 Preferred Stock may be redeemed under this paragraph (a) while any share of Series A Preferred Stock remains outstanding. The Corporation shall redeem all outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock on June 30, 2008 at the foregoing price. (b) In the event that the Corporation shall effect a registered initial public offering of the Common Stock under the Securities Act of 1933, as amended, the Corporation shall have the right to redeem, at its sole option and election (subject to the legal availability of funds therefor), all (but not less than all) of the outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock for an amount per share (payable solely in cash out of the proceeds of such offering) equal to the sum of (i) product of (A) the Specified Amount of such share, times (B) the lesser of the applicable Redemption Percentage or 107% and (ii) the amount of all accrued and unpaid dividends thereon to the Redemption Date (excluding any Accumulated Dividends, but including an amount equal to a prorated dividend from the immediately preceding Dividend Payment Date to the Redemption Date); provided that such redemption occurs within 45 days of the date of the closing of such public offering. 19 (c) Notice of any redemption of shares of Series A Preferred Stock or Series A-1 Preferred Stock pursuant to paragraph (a) or (b) of this SECTION 7 shall be mailed not less than ten (10) Business Days nor more than sixty (60) days prior to the Redemption Date to each holder of shares of Series A Preferred Stock and Series A-1 Preferred Stock to be redeemed, at such holder's address as it appears on the transfer books of the Corporation. Each such notice shall state: (A) the Redemption Date, (B) the place or places where the redemption price will be paid (if other than the principal executive offices of the Corporation), (C) if less than all the shares held by any holder are to be redeemed pursuant to paragraph (a), the number of shares to be redeemed from such holder and (D) that dividends on the shares of Series A Preferred Stock and Series A-1 Preferred Stock to be redeemed will cease to accrue on the Redemption Date. In order to facilitate the redemption of shares of Series A Preferred Stock or Series A-1 Preferred Stock, the Board of Directors may fix a record date for the determination of shares of Series A Preferred Stock and Series A-1 Preferred Stock to be redeemed, not more than sixty (60) days nor less than thirty (30) days prior to the applicable Redemption Date. In the case of the redemption of less than all the outstanding shares of Series A Preferred Stock or Series A-1 Preferred Stock pursuant to paragraph (a), (I) the shares of such respective series to be redeemed shall be selected PRO RATA, and there shall be redeemed from each holder, as nearly as practicable to the nearest whole share, that proportion of all the shares of such respective series to be redeemed which the number of shares held of record by such holder bears to the total number of shares of Series A Preferred Stock or Series A-1 Preferred Stock, as applicable, at the time outstanding; PROVIDED, HOWEVER, that if any holder of Series A Preferred Stock or Series A-1 Preferred Stock holds of record (or following such redemption would hold of record) less than 100 shares in the aggregate, then the Corporation may elect to redeem all such shares held of record by such holder and there shall be redeemed from each other holder, as nearly as practicable to the nearest whole share, that proportion of all other shares to be redeemed which the number of shares held of record by such holder bears to the total number of other shares of Series A Preferred Stock or Series A-1 Preferred Stock at the time outstanding, and (II) if fewer than all shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof. (d) Notice having been mailed as specified in Section 7(c), and provided that on or before the Redemption Date, specified in such notice all funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata benefit of the holders of the shares so called for redemption, so as to be and to continue to be available therefor, then, from and after the Redemption Date, dividends on the shares of Series A Preferred Stock or Series A-1 Preferred Stock called for redemption shall cease to accrue and said shares shall no longer be deemed to be outstanding, and all rights of the holders thereof set forth herein and otherwise as stockholders of the Corporation (except the right to receive from the Corporation the redemption price in accordance with this Section 7) shall cease. Section 7A. CHANGE IN CONTROL. (a) The Corporation will, within two Business Days after any officer has knowledge of the occurrence of any Change in Control, give written notice of such Change in Control to each holder of shares of Series A Preferred Stock and Series A-1 Preferred Stock unless notice in respect of such Change in Control shall have been given pursuant to paragraph (b) of this Section 7A (a Change of Control that is consummated or 20 finalized without the Corporation's involvement being defined as an "INVOLUNTARY CHANGE OF CONTROL"). Upon a Change in Control, subject to paragraph (h) of this Section 7A but without limiting the effect of Section 6.9, the Corporation shall, at its option, either redeem the Series A Preferred Stock and the Series A-1 Preferred Stock or make an offer to redeem the Series A Preferred Stock and the Series A-1 Preferred Stock, and such notice shall either constitute a notice of redemption of, or shall contain and constitute an offer to redeem, shares as described in paragraph (c) of this Section 7A, and shall be accompanied by the certificate described in paragraph (g) of this Section 7A. (b) The Corporation will not take any action that consummates or finalizes a Change in Control unless (i) the requirements of Section 7A(h) have been satisfied, (ii) at least 30 days prior to such action it shall have given to each holder of shares of Series A Preferred Stock and Series A-1 Preferred Stock written notice either of redemption of, or containing and constituting an offer to redeem, shares as described in paragraph (c) of this Section 7A, accompanied by the certificate described in paragraph (g) of this Section 7A, and (iii) contemporaneously with such action, it redeems all shares required to be redeemed in accordance with this Section 7A. (c) The redemption and the offer to redeem shares contemplated by paragraphs (a) and (b) of this Section 7A shall be a redemption of or an offer to redeem, in accordance with and subject to this Section 7A, of all, but not less than all, the shares held by each holder (in this case only, "holder" in respect of any shares registered in the name of a nominee for a disclosed beneficial owner shall mean beneficial owner) on a date specified in such offer (the "PROPOSED REDEMPTION DATE"). If such Proposed Redemption Date is in connection with an Involuntary Change of Control, such date shall not be less than 15 days and not more than 30 days after the date of such offer (if the Proposed Redemption Date shall not be specified in such notice of redemption or such offer, the Proposed Redemption Date shall be the tenth day after the date of such notice or offer). (d) A holder of shares may accept the offer to redeem made pursuant to this Section 7A by causing a notice of such acceptance to be delivered to the Corporation at least five days prior to the Proposed Redemption Date. A failure by a holder of shares to respond to an offer to redeem made pursuant to this Section 7A shall be deemed to constitute an acceptance of such offer by such holder. (e) Redemption of the shares to be redeemed pursuant to this Section 7A shall be at 101% of the Specified Amount of such shares, together with all accrued and unpaid dividends on such shares accrued to the date of redemption (excluding any Accumulated Dividends, but including an amount equal to a prorated dividend from the immediately preceding Dividend Payment Date to such date of redemption) (the "CHANGE OF CONTROL REDEMPTION AMOUNT"). The redemption shall be made on the Proposed Redemption Date except as provided in paragraph (f) of this Section 7A. (f) The obligation of the Corporation to redeem shares pursuant to the notice of redemption or the offers required by paragraph (b) and accepted in accordance with subparagraph (d) of this Section 7A is subject to the occurrence of the Change in Control in 21 respect of which such redemptions, offers and acceptances shall have been made. In the event that such Change in Control does not occur on the Proposed Redemption Date in respect thereof, the redemption shall be deferred until and shall be made on the date on which such Change in Control occurs. The Corporation shall keep each holder of shares reasonably and timely informed of (i) any such deferral of the date of redemption, (ii) the date on which such Change in Control and the redemption are expected to occur, and (iii) any determination by the Corporation that efforts to effect such Change in Control have ceased or been abandoned (in which case the notice of redemption or the offers and acceptances made pursuant to this Section 7A in respect of such Change in Control shall be deemed rescinded). (g) Each notice of redemption and offer to redeem shares pursuant to this Section 7A shall be accompanied by a certificate, executed by a senior financial officer of the Corporation and dated the date of such offer, specifying: (i) the Proposed Redemption Date; (ii) that such offer is made pursuant to this Section 7A; (iii) the Change of Control Redemption Amount of each share offered to be redeemed; (iv) the amount of the premium specified in paragraph (e) due in connection with such redemption, setting forth the details of such computation; (v) the dividends that would be due on each share offered to be redeemed, accrued to the Proposed Redemption Date; (vi) that the conditions of this Section 7A have been fulfilled; and (vii) in reasonable detail, the nature and date or proposed date of the Change in Control. (h) If the provisions of any agreement or instrument governing any Indebtedness of the Corporation would prohibit the Corporation from redeeming shares of Series A Preferred Stock or Series A-1 Preferred Stock upon a Change of Control, from making an offer to redeem upon a Change of Control or paying the Change of Control Redemption Amount (including, without limitation, any limitations on dividends or distributions), then, prior to or at the time of such redemption, the Corporation shall, to the extent required to permit the redemption of, or the making of the offer to redeem, the Series A Preferred Stock and the Series A-1 Preferred Stock pursuant to this Section 7A, (i) obtain the consent of the requisite holders of such Indebtedness to permit the consummation of such redemption or (ii) redeem all such Indebtedness outstanding or refinance all such Indebtedness outstanding with the proceeds of other Indebtedness or equity securities that permit the consummation of the redemption of the Series A Preferred Stock and the Series A-1 Preferred Stock upon a Change of Control. Anything contained in this Restated Certificate to the contrary notwithstanding (including, without limitation, paragraph (a) of the definition of "Event of Noncompliance"), but without limiting the effect of Section 6.9, the Corporation shall not be obligated to consummate any such redemption until the consent in clause (i) above is obtained or the redemption or refinancing of such Indebtedness under clause (ii) above is consummated, whichever is earlier. (i) "CHANGE IN CONTROL" means the occurrence of any of the following: (A) the sale, lease or transfer, in one or a series of a related transactions, of all or substantially all of Berry's or the Corporation's assets to any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than Roberto Buaron or his Related Parties), (B) the adoption of a plan relating to the liquidation or dissolution of Berry or the Corporation, (C) the acquisition by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than by Roberto Buaron or his Related Parties) of a direct or indirect interest in more than 35% of the voting power of the voting stock of the Corporation by way of purchase, merger 22 or consolidation or otherwise if (I) such person or group (as defined above) (other than Roberto Buaron or his Related Parties) owns, directly or indirectly, more of the voting power of the voting stock of the Corporation than Roberto Buaron and his Related Parties and (II) such acquisition occurs prior to an initial public offering of the Corporation, (D) the acquisition by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than by Roberto Buaron or his Related Parties) of a direct or indirect interest in more than 50% of the voting power of the voting stock of the Corporation by way of purchase, merger or consolidation or otherwise if such acquisition occurs subsequent to an initial public offering of the Corporation or (E) the first day on which a majority of the members of the current Board of Directors of the Corporation are not Continuing Directors on the Board of Directors of the Corporation. (j) "CONTINUING DIRECTORS" means, as of any date of determination, any member of the Board of Directors of the Corporation who (A) was a member of such Board of Directors on the date of this Restated Certificate; or (B) was nominated for election or reelected to such Board of Directors with the affirmative vote of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election. (k) "RELATED PARTIES" means, with respect to Roberto Buaron, (A) any spouse, sibling or descendent of Roberto Buaron, whether or not such relationship arises from birth, adoption or marriage or despite such relationship being dissolved by divorce; or (B) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or persons beneficially holding a controlling interest of which consist of Roberto Buaron and/or such other persons referred to in the immediately preceding clause (A). Section 8. EXCHANGE. (a) The shares of Series A Preferred Stock are exchangeable, in whole but not in part, at the option of the Corporation, on any Dividend Payment Date (the "EXCHANGE DATE"), for that principal amount of Exchange Notes equal to the Liquidation Preference of the shares of Series A Preferred Stock to be exchanged, PROVIDED, that on or prior to the Exchange Date the Corporation shall have paid in cash to the holders of outstanding shares of Series A Preferred Stock all accrued and unpaid dividends on such Series A Preferred Stock to the Exchange Date, and PROVIDED, FURTHER, that so long as any shares of Series A Preferred Stock are held by CVCA or its Affiliates, no shares of Series A Preferred Stock may be exchanged. (b) The Corporation will mail to each holder of record of the shares of Series A Preferred Stock written notice of its intention to make the Exchange not less than ten (10) nor more than sixty (60) days prior to the Exchange Date. Each such notice shall state: (i) the Exchange Date, (ii) the place or places where certificates for such shares of Series A Preferred Stock are to be surrendered for exchange into Exchange Notes (if other than the principal executive offices of the Corporation) and (iii) that dividends on the shares of Series A Preferred Stock to be exchanged will cease to accrue on such Exchange Date. On the Exchange Date, the Corporation will (x) cause the Exchange Notes to be executed, and, if necessary, authenticated, and will cause the Exchange Indenture to be executed, by all applicable parties and (y) deliver to each holder of Series A Preferred Stock one or more duly executed Exchange Notes (as designated by such holder) in an aggregate principal amount calculated in accordance with 23 Section 8(a). The Corporation will pay interest on the Exchange Notes at the rate and on the dates set forth in the Exchange Notes. (c) If notice has been mailed as specified in Section 8(b), and provided that the Corporation shall issue the Exchange Notes in compliance herewith and the terms and conditions of the Exchange Indenture, from and after the Exchange Date dividends on the Series A Preferred Stock shall cease to accrue and the Series A Preferred Stock shall no longer be deemed to be outstanding, and all rights of the holders thereof set forth herein and otherwise as shareholders of the Corporation (except any rights specified herein in respect of the Exchange Notes) shall cease. Upon surrender in accordance with said notice of the certificates for any shares of Series A Preferred Stock so exchanged, such shares shall be exchanged by the Corporation for the Exchange Notes as aforesaid. (d) The Corporation will pay any and all taxes that may be payable in respect of the issuance and delivery of the Exchange Notes as provided in this Section 8 and in the Exchange Indenture (excluding any tax which may be payable in respect of any transfer involved in the issuance and delivery of Exchange Notes in a name other than that in which the shares of the Series A Preferred Stock so exchanged were registered). Section 9. REACQUIRED SHARES. Any shares of Series A Preferred Stock and the Series A-1 Preferred Stock redeemed, purchased or otherwise acquired by the Corporation in any manner whatsoever (including pursuant to the Exchange in accordance with Section 8) shall be retired and canceled promptly after the acquisition thereof, and, if necessary to provide for the lawful redemption or purchase of such shares, the capital represented by such shares shall be reduced in accordance with the DGCL. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of another series of Preferred Stock (subject to any applicable limitations set forth herein). Part C. COMMON STOCK Except as otherwise provided in this Part C or as otherwise required by applicable law, all shares of Class A Common, Class B Common and Class C Common shall be identical in all respects and shall entitle the holders thereof to the same rights and privileges, subject to the same qualifications, limitations and restrictions. Section 1. VOTING RIGHTS. (a) Until a Conversion Event or a Mandatory Conversion Event, except as otherwise required by applicable law, (i) all holders of Class A Voting Common and Class B Voting Common (collectively, the "Voting Common") shall be entitled to one vote per share on all matters to be voted on by the Corporation's stockholders, and the holders of Class A Voting Common and Class B Voting Common shall vote together as a single class and (ii) Class A Non-Voting Common, Class B Non-Voting Common and Class C Common shall not be entitled to vote on any matter to be voted on by the Corporation's stockholders and shall not be included in determining the number of shares voting or entitled to vote on such matters. 24 (b) Upon the occurrence of a Conversion Event, except as otherwise required by applicable law, all shares of Class A Common, Class B Common and Class C Common shall be entitled to one vote per share on all matters to be voted on by the Corporation's stockholders, and the holders of Class A Common, Class B Common and Class C Common shall vote together as a single class. (c) Notwithstanding the above, and until the occurrence of a Mandatory Conversion Event, no amendment or waiver of any provision of this Part C of this Article Fourth shall be effective without the affirmative vote or prior written consent of holders of a majority of the then outstanding shares of Class A Common, voting or consenting as a separate class. (d) The Corporation shall not merge with or into, or consolidate with any other Person if, under the terms pursuant to which such merger or consolidation is to be effected, (i) the consideration to be received by holders of one or more classes of Common Stock in such merger or consolidation is less than the holders of such class or classes would receive if the aggregate consideration to be received by all holders of Common Stock were, as of the effectiveness of such merger or consolidation, distributed by the Corporation to the holders of Common Stock pursuant to the terms of this Article Fourth, unless the Corporation shall have obtained the affirmative vote or prior written consent of the holders of a majority of the then outstanding shares of each such class of Common Stock, voting or consenting as a separate class or (ii) any provision of this Part C of this Article Fourth would be amended or waived, unless the Corporation shall have obtained the affirmative vote or prior written consent of the holders of a majority of the then outstanding shares of Class A Common, Class B Common and Class C Common, each voting or consenting as a separate class. Section 2. DISTRIBUTIONS. Until the earlier of the occurrence of a Mandatory Conversion Event or the Preference Termination Time, distributions to the holders of Common Stock shall be made in the following priority: (a) All Distributions shall be paid to the holders of Class A Common (ratably among such holders based upon the number of shares of Class A Common held by each such holder as of the time of such Distribution), as a separate class and to the exclusion of holders of all other Common Stock, until, as a result of such Distributions and all prior Distributions pursuant to this paragraph 2(a), the Class A Preferred Per Share Distribution Amount shall have been distributed to the holders of all outstanding shares Class A Common as of the time of such Distribution, and no Distribution or any portion thereof shall be made under paragraph 2(b), 2(c) or 2(d) below until, as a result of all Distributions pursuant to this paragraph 2(a), the entire Class A Preferred Per Share Distribution Amount on the outstanding shares of Class A Common as of the time of such Distribution shall have been paid in full. (b) After the Class A Preferred Per Share Distribution Amount has been distributed pursuant to paragraph 2(a) above, all Distributions shall be paid to the holders of Class B Common (ratably among such holders based upon the number of shares of 25 Class B Common held by each such holder as of the time of such Distribution), as a separate class and to the exclusion of holders of all other Common Stock, until, as a result of such Distributions and all prior Distributions pursuant to this paragraph 2(b), the Class B Preferred Per Share Distribution Amount shall have been distributed to the holders of all outstanding shares Class B Common as of the time of such Distribution, and no Distribution or any portion thereof shall be made under paragraph 2(c) or 2(d) below until, as a result of all Distributions pursuant to this paragraph 2(b), the entire Class B Preferred Per Share Distribution Amount on the outstanding shares of Class B Common as of the time of such Distribution shall have been paid in full. (c) After the required amount of Distributions has been distributed pursuant to paragraphs 2(a) and 2(b) above, all Distributions shall be paid to the holders of Class C Common (ratably among such holders based upon the number of shares of Class C Common held by each such holder as of the time of such Distribution). (d) After the occurrence of a Mandatory Conversion Event or the Preference Termination Time, all Distributions shall be paid to the holders of Class A Common, Class B Common and Class C Common, as a group ratably among such holders based upon the number of shares of Common Stock held by each such holder as of the time of such Distribution. Section 3. STOCK SPLITS AND STOCK DIVIDENDS. The Corporation shall not in any manner subdivide (by stock split, stock dividend or otherwise) or combine (by stock split, stock dividend or otherwise) the outstanding Common Stock of one class unless the outstanding Common Stock of all the other classes shall be proportionately subdivided or combined. All such subdivisions and combinations shall be payable only in Class A Common to the holders of Class A Common, in Class B Common to the holders of Class B Common and in Class C Common to the holders of Class C Common or, upon the occurrence of a Mandatory Conversion Event, in Common Stock to the holders of Common Stock. In no event shall a stock split or stock dividend constitute a return of the Class A Preferred Distribution Amount or the Class B Preferred Distribution Amount. Section 4. REGISTRATION OF TRANSFER. The Corporation shall keep at its principal office (or such other place as the Corporation reasonably designates) a register for the registration of shares of Common Stock. Upon the surrender of any certificate representing shares of any class of Common Stock at such place, the Corporation shall, at the request of the registered holder of such certificate, execute and deliver a new certificate or certificates in exchange therefor representing in the aggregate the number of shares of such class represented by the surrendered certificate, and the Corporation forthwith shall cancel such surrendered certificate. Each such new certificate shall be registered in such name and will represent such number of shares of such class as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate. The issuance of new certificates shall be made without charge to the holders of the surrendered certificates for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such issuance. 26 Section 5. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder will be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing one or more shares of any class of Common Stock, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation (provided that if the holder is a financial institution or other institutional investor its own agreement will be satisfactory), or, in the case of any such mutilation upon surrender of such certificate, the Corporation shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate. Section 6. NOTICES. All notices referred to herein shall be in writing, shall be delivered personally or by first class mail, postage prepaid, and shall be deemed to have been given when so delivered or mailed to the Corporation at its principal executive offices and to any stockholder at such holder's address as it appears in the stock records of the Corporation (unless otherwise specified in a written notice to the Corporation by such holder). Section 7. MANDATORY CONVERSION EVENT. Upon the occurrence of a Mandatory Conversion Event, all shares of Common Stock then outstanding shall, by virtue of, and simultaneously with, the occurrence of the Mandatory Conversion Event, and without any action on the part of the holders thereof, be deemed automatically converted into that number of fully paid and non-assessable shares of a single class of Common Stock, each of which shares shall be entitled to one vote per share on all matters to be voted on by the Corporation's stockholders. After the occurrence of a Mandatory Conversion Event, all Distributions shall be paid to the holders of Common Stock ratably among such holders based upon the number of shares of Common Stock held by each such holder as of the time of such Distribution. Section 8. DEFINITIONS. "CLASS A PREFERRED PER SHARE DISTRIBUTION AMOUNT" means $100 per share of Class A Common. The Class A Preferred Per Share Distribution Amount shall be adjusted equitably in the event of a subdivision (by stock split, stock dividend or otherwise) or combination (by stock split, stock dividend or otherwise) of the outstanding Common Stock. "CLASS B PREFERRED DISTRIBUTION AMOUNT" means $100 per share of Class B Common. The Class B Preferred Per Share Distribution Amount shall be adjusted equitably in the event of a subdivision (by stock split, stock dividend or otherwise) or combination (by stock split, stock dividend or otherwise) of the outstanding Common Stock. "CONVERSION EVENT" means any of the following: (i) the death, disability or incapacity of Roberto Buaron, (ii) Roberto Buaron's failure to control, directly or indirectly, Atlantic Equity Partners International II, L.P. ("International") or (iii) (A) the percentage determined by dividing (1) the sum of (x) the aggregate number of shares of Common Stock held, beneficially and of record with full power to vote, directly or indirectly, by International and its Related Persons of the type described in CLAUSE (i)(x) of the definition thereof which are Holders (as defined in the Stockholders Agreement) and (y) all other shares of Common Stock 27 which Roberto Buaron has the power to vote, directly or indirectly, by way of voting agreement, proxy or otherwise for the election of directors to the Board of Directors BY (2) the number of shares of Common Stock then outstanding on a fully diluted basis (determined as though there were only a single class of Common Stock) shall at any time be LESS THAN (B) two-thirds of the percentage determined by dividing (1) the number of shares of Common Stock so held by International immediately following the Closing Date (as defined in the Stock Purchase Agreement) BY (2) the number of shares of Common Stock outstanding on a fully diluted basis (determined as though there were only a single class of Common Stock) immediately following the Closing Date. "DISTRIBUTION" means each distribution made by the Corporation to holders of any Common Stock of the Corporation, whether in cash, property, or securities of the Corporation and whether by dividend, liquidating distribution, redemption, repurchase or otherwise; provided that none of the following shall be a Distribution: (i) any recapitalization or exchange of any shares of Common Stock, (ii) any subdivision (by stock split, stock dividend or otherwise) or any combination (by stock split, stock dividend or otherwise) of any outstanding shares of Common Stock, (iii) any distribution paid as a result of the repurchase of any capital stock held by an employee in connection with such employee's employment by the Corporation or any of its Subsidiaries (as defined in the Stock Purchase Agreement) or (iv) any distribution paid to an SBIC Holder (as defined in the Stock Purchase Agreement) in connection with a Regulatory Violation (as defined in the Stock Purchase Agreement). "MANDATORY CONVERSION EVENT" means the consummation of the initial public offering of shares of Common Stock of the Corporation which results in (i) a gross selling price per share of Common Stock (subject to adjustment for stock splits, dividends, subdivisions, combinations, reclassifications, etc.) equal to at least $250 and (ii) aggregate gross proceeds to the Corporation of not less than $50,000,000. "PERSON" means any individual, corporation, general or limited partnership, joint venture, association, limited liability company, joint stock company, trust, business trust, bank, trust company, estate (including any beneficiaries thereof), unincorporated organization, cooperative, association or governmental branch, authority, agency or political subdivision thereof. "PREFERENCE TERMINATION TIME" means the time at which the aggregate of all Distributions paid to the holders of the then outstanding shares of Common Stock is equal to $100 per share (the "Distribution Threshold"). The Distribution Threshold shall be adjusted equitably in the event of a stock dividend, stock split, reverse stock split, combination of shares or other similar event. In the event that a Distribution is in an amount that is greater than that required to equal the Distribution Threshold, the Distribution shall be deemed to be two Distributions, the first equal to the amount required to reach the Distribution Threshold and the second equal to the balance, and the Preference Termination Time shall be deemed to occur upon the payment of the first deemed Distribution but prior to the second deemed Distribution. "RELATED PERSON" means (i) any Person that is controlled by Roberto Buaron or (ii) any partner, shareholder or similar equity holder of International or such Person described in 28 clause (i) above that receives Securities (as defined in the Stockholders Agreement) from International or such Person in connection with a wind-up, liquidation or similar distribution of or by International or such Person. For purpose of this Restated Certificate of Incorporation, "control" and its derivatives shall mean, with respect to any Person, the power to direct and control the management or policies of such Person, whether through the beneficial ownership of voting securities or other evidence of equity ownership, by contract or agreement or otherwise. "STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, dated June 18, 1996, among the Corporation, International, Chase Venture Capital Associates, L.P. ("CVCA"), certain other institutional holders, certain members of management of the Corporation and CVCA and The Northwestern Mutual Life Insurance Company as holders of Series A Preferred Stock with respect to certain provisions thereof, as amended from time to time pursuant to its terms. "STOCK PURCHASE AGREEMENT" means the Stock Purchase and Recapitalization Agreement, dated as of June 12, 1996, as amended or otherwise modified from time to time, among the Corporation, International, and the other parties thereto. ARTICLE FIFTH The Amended and Restated Certificate of Incorporation of the Corporation shall constitute a restatement of, and shall supersede the Certificate of Incorporation of the Corporation, filed on December 11, 1990, as amended by the Amended and Restated Certificate of Incorporation filed on April 19, 1994, further amended by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation filed May 5, 1995 and further amended by the Certificate of Amendment filed June 14, 1996. ARTICLE SIXTH Subject to limitations prescribed by the provisions of Part B, the number of directors of the Corporation shall be such as from time to time shall be fixed in the manner provided in the By-laws of the Corporation. The election of directors of the Corporation need not be by ballot unless the By-laws so require. ARTICLE SEVENTH 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 (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after the date of incorporation of the Corporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. 29 Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE EIGHTH Except as otherwise limited herein (including Part B of Article Fourth), for the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders, it is further provided: (a) In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized and empowered: (i) to make, alter, amend or repeal the By-laws in any manner not inconsistent with the laws of the State of Delaware or this Certificate of Incorporation; (ii) to determine whether any, and if any, what part, of the net profits of the Corporation or of its surplus shall be declared in dividends and paid to the stockholders, and to direct and determine the use and disposition of any such net profits or such surplus; and (iii) to fix from time to time the amount of net profits of the Corporation or of its surplus to be reserved as working capital or for any other lawful purpose. In addition to the powers and authorities herein or by statute expressly conferred upon it, the Board of Directors may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the laws of the State of Delaware, of this Certificate of Incorporation and of the By-laws of the Corporation. (b) Any director or any officer elected or appointed by the stockholders or by the Board of Directors may be removed at any time in such manner as shall be provided in the By-laws of the Corporation. (c) From time to time any of the provisions of this Certificate of Incorporation may be altered, amended or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this Certificate of Incorporation are granted subject to the provisions of this paragraph (c). 30 ARTICLE NINTH Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them, or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of Title 8 of the Delaware Code, or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, or of the stockholders or class of stockholders of the Corporation, as the case may be, agree on any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. 31 IN WITNESS WHEREOF, BPC HOLDING CORPORATION has caused this Restated Certificate of Incorporation to be signed by its President, and attested by its Executive Vice President, this __ day of May, 2000. BPC HOLDING CORPORATION By: ---------------------------- Name: Martin R. Imbler Title: President ATTEST: By: ----------------------- Name: James M. Kratochvil Title: Executive Vice President 32 EX-3.6 4 a2042389zex-3_6.txt EXHIBIT 3.6 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES B CUMULATIVE PREFERRED STOCK 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. On August 29, 1997, pursuant to authority vested in the Board of Directors by ARTICLE FOURTH of the Corporation's Restated Certificate of Incorporation, the Corporation filed a Certificate of Designation, Preferences and Rights of Series B Cumulative Preferred Stock (the "Certificate of Designation") with the Secretary of State of the State of Delaware 3. The Certificate of Designation is hereby amended (the "Amendment") by striking out the definition of "Series A Preferred Stock" set forth in section 2 and replacing it with the following: "SERIES A PREFERRED STOCK" means collectively the Series A Senior Cumulative Exchangeable Preferred Stock of the Corporation and the Series A-1 Senior Cumulative Preferred Stock of the Corporation. 4. The Amendment of the Certificate of Designation herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, the undersigned, being an officer of the Corporation hereinabove named, DOES HEREBY CERTIFY, under penalties of perjury, that the facts hereinabove stated are truly set forth and, accordingly, such officer has hereunto set his hand on this 5th day of May, 2000. ------------------------------ Name: James M. Kratochvil Title: Executive Vice President, Chief Financial Officer, Treasurer and Secretary EX-4.13 5 a2042389zex-4_13.txt EXHIBIT 4.13 FOURTH SUPPLEMENTAL INDENTURE The undersigned are executing and delivering this Fourth Supplemental Indenture pursuant to Section 9.02 of the Indenture dated as of April 21, 1994, as supplemented (the "Indenture"), among Berry Plastics Corporation (the "Company"), BPC Holding Corporation, Berry Iowa Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, AeroCon, Inc., PackerWare Corporation, Berry Plastics Design Corporation and United States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. By executing and delivering to the Trustee this Fourth Supplemental Indenture, certain covenants in the Indenture shall be amended. 1. The definition of "Permitted Refinancing" contained in Section 1.01 of the Indenture shall be amended by adding the word "and" immediately prior to "(c)" in such definition. 2. The first paragraph of Section 4.07 of the Indenture entitled "RESTRICTED PAYMENTS" shall be amended by deleting in its entirety the language: "(iii) purchase, redeem or otherwise acquire or retire for value any Indebtedness (other than the Notes) that is PARI PASSU with or subordinated to the Notes or any Note Guarantee" and replacing such language with the language: "(iii) purchase, redeem or otherwise acquire or retire for value any Indebtedness (other than the Notes and Indebtedness between or among the Company and its Subsidiaries or between or among such Subsidiaries) that is PARI PASSU with or subordinated to the Notes or any Note Guarantee" 3. The first paragraph of Section 4.09 of the Indenture entitled "INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK" shall be amended by deleting in its entirety the language: "PROVIDED, HOWEVER, that the Company may incur Indebtedness or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.00 to 1 if such Indebtedness is incurred or such Disqualified Stock is issued on or before April 15, 1996 or at least 2.25 to 1 if such Indebtedness is incurred or such Disqualified Stock is issued after April 15, 1996, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and including the earnings of any business acquired by the Company with the proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period" and replacing such language with the language: "PROVIDED, HOWEVER, that the Company and its Subsidiaries may incur Indebtedness or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.00 to 1 if such Indebtedness is incurred or such Disqualified Stock is issued on or before April 15, 1996 or at least 2.25 to 1 if such Indebtedness is incurred or such Disqualified Stock is issued after April 15, 1996, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and including the earnings of any business acquired by the Company or any of its Subsidiaries with the proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period" 4. The second paragraph of Section 4.09 shall be amended by deleting in its entirety the language: "(d) the incurrence by the Company of Refinancing Indebtedness; PROVIDED, HOWEVER, that such Refinancing Indebtedness is a Permitted Refinancing;" and replacing such language with the language: "(d) the incurrence by the Company or any of its Subsidiaries of Refinancing Indebtedness; PROVIDED, HOWEVER, that such Refinancing Indebtedness is a Permitted Refinancing;" Except as expressly amended hereby, the provisions of the Indenture shall remain unchanged and in full force and effect. The Indenture shall be binding upon each of the undersigned and its successors and assigns until full and final payment of all of the Company's obligations under the Notes and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. * * * * * -2- IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Fourth Supplemental Indenture as of the 10th day of June, 1997. ATTEST: BERRY PLASTICS CORPORATION By /s/ James M. Kratochvil By /s/ Martin R. Imbler -------------------------------- ---------------------------------- James M. Kratochvil Martin R. Imbler Vice President, Chief President and Chief Financial Officer, Executive Officer Treasurer and Secretary BPC HOLDING CORPORATION By /s/ James M. Kratochvil ---------------------------------- James M. Kratochvil Vice President, Chief Financial Officer and Secretary BERRY IOWA CORPORATION By /s/ James M. Kratochvil ---------------------------------- James M. Kratochvil Vice President, Chief Financial Officer, Treasurer and Secretary BERRY TRI-PLAS CORPORATION By /s/ James M. Kratochvil ---------------------------------- James M. Kratochvil Vice President, Chief Financial Officer, Treasurer and Secretary BERRY STERLING CORPORATION By /s/ James M. Kratochvil ---------------------------------- James M. Kratochvil Vice President, Chief Financial Officer, Treasurer and Secretary AEROCON, INC. By /s/ James M. Kratochvil ---------------------------------- James M. Kratochvil Vice President, Treasurer and Secretary PACKERWARE CORPORATION By /s/ James M. Kratochvil ---------------------------------- James M. Kratochvil Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS DESIGN CORPORATION By /s/ James M. Kratochvil ---------------------------------- James M. Kratochvil Vice President, Chief Financial Officer, Treasurer and Secretary UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE By /s/ Cynthia Chaney ---------------------------------- Name: Cynthia Chaney Title: Assistant Vice President EX-4.14 6 a2042389zex-4_14.txt EXHIBIT 4.14 TENTH SUPPLEMENTAL INDENTURE ---------------------------- The undersigned are executing and delivering this Tenth Supplemental Indenture pursuant to Section 4.13 of the Indenture, dated as of April 21, 1994, as supplemented (the "Indenture"), among Berry Plastics Corporation (the "Company"), BPC Holding Corporation ("Holding"), Berry Iowa Corporation ("Berry Iowa"), Berry Tri-Plas Corporation ("Berry Tri-Plas"), Berry Sterling Corporation ("Berry Sterling"), AeroCon, Inc. ("AeroCon"), PackerWare Corporation ("PackerWare"), Berry Plastics Design Corporation ("Berry Design"), Venture Packaging, Inc. ("Venture"), Berry Plastics Technical Services, Inc. (f/k/a Venture Packaging Southeast, Inc.)("Berry Technical"), Venture Packaging Midwest, Inc. ("Midwest"), NIM Holdings Limited ("NIM"), Berry Plastics U.K. Limited (f/k/a Norwich Injection Moulders Limited)("Berry UK"), Norwich Acquisition Limited ("Norwich"), Knight Plastics, Inc. ("Knight"), CPI Holding Corporation ("CPI"), Cardinal Packaging, Inc. ("Cardinal"), Poly-Seal Corporation ("Poly-Seal"), Berry Plastics Acquisition Corporation II (f/k/a Berry Plastics Acquisition Corporation)("BPAC II"), Berry Plastics Acquisition Corporation III ("BPAC III") and United States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. By executing and delivering to the Trustee this Tenth Supplemental Indenture, each of CBP Holdings S.r.l., an Italian S.r.l. (f/k/a Capsol-Berry Plastics S.r.l.), Capsol S.p.A., an Italian S.p.A. and Ociesse S.r.l., an Italian S.r.l. (each, a "New Guarantor" and collectively, the "New Guarantors"), hereby becomes a "Guarantor" under the Indenture and hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Indenture in the same manner as if it were an original signatory to such agreement. Each of the New Guarantors hereby unconditionally guarantees that (i) the principal of and interest on the Notes will be paid in full when due, whether at the maturity or interest payment or mandatory redemption date, by acceleration, call for redemption or otherwise, and interest on the overdue principal of and interest, if any, on the Notes and all other obligations of the Company to the Holders or the Trustee under the Indenture or the Notes will be promptly paid in full or performed, all in accordance with the terms of the Indenture and the Notes and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. By executing and delivering to the Trustee this Tenth Supplemental Indenture, each of Holding, Berry Iowa, Berry Tri-Plas, Berry Sterling, AeroCon, PackerWare, Berry Design, Venture, Berry Technical, Midwest, NIM, Berry UK, Norwich, Knight, CPI, Cardinal, Poly-Seal, BPAC II, and BPAC III (each an "Old Guarantor") hereby reaffirms its obligations under the Indenture as previously supplemented and as further supplemented hereby. The obligations of each of the undersigned to each Holder and to the Trustee pursuant hereto are as expressly set forth in Article 10 of the Indenture which terms are incorporated herein by reference. This is a continuing guarantee and shall remain in full force and effect and shall be binding upon each of the undersigned and its successors and assigns until full and final payment of all of the Company's obligations under the Notes and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a guarantee of payment and not a guarantee of collection. Each of the Company and the Guarantors (hereinafter, collectively, the "Obligors") hereby agrees that all judicial proceedings brought against it arising out of or relating to the Indenture, or any obligations hereunder, may be brought in any State or Federal Court of competent jurisdiction in the State, County and City of New York in the United States of America. By executing and delivering this Tenth Supplemental Indenture, each of the Obligors hereby irrevocably: (i) accepts generally and unconditionally the nonexclusive jurisdiction and venue of such courts, (ii) waives any defense of FORUM NON CONVENIENS; (iii) designates and appoints Joseph S. Levy, or such other persons located in New York State selected by the Obligors from time to time, and agreeing in writing to so serve, as its agent to receive on its behalf service of all process in any such proceedings in any such court, such service being hereby acknowledged by each of the Obligors to be effective and binding service in every respect (with a copy of any such process so served to be mailed by registered mail to each of the Obligors at its address provided that, unless otherwise provided by applicable law, any failure to mail such copy shall not affect the validity of service of such process) and each of the Obligors hereby agrees that service of process sufficient for personal jurisdiction in any action in the State of New York may be made by registered or certified mail, return receipt requested, to it at its address and hereby acknowledges that such service shall be effective and binding in every respect; and nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right to bring proceedings against any of the Obligors in the courts of any other jurisdiction; and (iv) agrees that the provisions of this Tenth Supplemental Indenture relating to jurisdiction and venue shall be binding and enforceable to the fullest extent permissible under New York General Obligations Law, Section 5-1402 or otherwise. Any and all payments to be made by any of the undersigned to the Trustee shall be made in U.S. Dollars. If, for the purpose of calculating the amount of any judgment in any court, it is necessary to convert into any other currency (the "Judgment Currency") an amount due in U.S. Dollars under the Indenture, then the conversion shall be made at the discretion of the Trustee, at the rate of exchange prevailing either on the date of default or on the day before the day on which the award or judgment is given (the "Conversion Date"). If there is a change in the rate of exchange prevailing between the Conversion Date and the date of actual payment of the amount due, the undersigned will pay such additional amounts (if any, but in any event, not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency when converted at the rate of exchange prevailing on the date of payment will produce the amount then due in U.S. Dollars. This Tenth Supplemental Indenture may be executed in counterparts. Each signed copy shall be an original, but all of them together represent the same agreement. -2- IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Tenth Supplemental Indenture as of the ____ day of _________, 2000. ATTEST: BERRY PLASTICS CORPORATION By: ------------------------------- James M. Kratochvil By: Executive Vice President, --------------------------------- Chief Financial Officer, Martin R. Imbler Treasurer and Secretary President and Chief Executive Officer BPC HOLDING CORPORATION By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY IOWA CORPORATION By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY TRI-PLAS CORPORATION By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY STERLING CORPORATION By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary AEROCON, INC. By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary PACKERWARE CORPORATION By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS DESIGN CORPORATION By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary VENTURE PACKAGING, INC. By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS TECHNICAL SERVICES, INC. By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary VENTURE PACKAGING MIDWEST, INC. By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary NIM HOLDINGS LIMITED By: ------------------------------- James M. Kratochvil Director BERRY PLASTICS U.K. LIMITED By: ------------------------------- James M. Kratochvil Director NORWICH ACQUISITION LIMITED By: ------------------------------- James M. Kratochvil Director KNIGHT PLASTICS, INC. By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CPI HOLDING CORPORATION By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CARDINAL PACKAGING, INC. By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS ACQUISITION CORPORATION II By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS ACQUISITION CORPORATION III By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary POLY-SEAL CORPORATION By: ------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CAPSOL-BERRY PLASTICS S.R.L. By: ------------------------------- James M. Kratochvil Director CAPSOL S.P.A. By: ------------------------------- James M. Kratochvil Director OCIESSE S.R.L. By: ------------------------------- James M. Kratochvil Director UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE By: ------------------------------- Name: Title: Schedule of Supplemental Indentures
Document Date Parties Reason for Supplement =================================================================================================================================== Supplemental Indenture to the March 10, 1995 Berry Sterling Corporation Added Sterling and AeroCon as Indenture dated as of April 21, ("Sterling"), AeroCon, Inc. guarantors 1994 (the "Indenture") among Berry ("AeroCon"), Berry, BPC and CPI Plastics Corporation ("Berry"), BPC Holding Corporation ("BPC"), Berry Iowa Corporation ("Iowa"), Berry-CPI Plastics Corp. ("CPI") and United States Trust Company of New York, as trustee (the "Trustee") - ----------------------------------------------------------------------------------------------------------------------------------- Supplemental Indenture to the January 21, 1997 PackerWare Corporation Added PackerWare as guarantor Indenture among Berry, BPC, Iowa, ("PackerWare"), Berry, BPC, Iowa, Berry Tri-Plas Corporation (f/k/a Tri-Plas, Sterling and AeroCon Berry-CPI Plastics Corp.) ("Tri-Plas"), Sterling, AeroCon and Trustee - ----------------------------------------------------------------------------------------------------------------------------------- Third Supplemental Indenture to the May 13, 1997 Berry Plastics Design Corporation Added Plastics as a guarantor Indenture among Berry, BPC, Iowa, ("Plastics"), Berry, BPC, Iowa, Tri-Plas, Sterling, AeroCon, Tri-Plas, Sterling, AeroCon, PackerWare and Trustee PackerWare and Trustee - ----------------------------------------------------------------------------------------------------------------------------------- Fifth Supplemental Indenture to the August 29, 1997 Venture Packaging, Inc. ("VPI"), Added VPI, Southeast and Midwest as Indenture among Berry, BPC, Iowa, Venture Packaging Southeast, Inc. guarantors Tri-Plas, Sterling, AeroCon, ("Southeast"), Venture Packaging PackerWare, Plastics and Trustee Midwest, Inc. ("Midwest"), Berry, BPC, Iowa, Tri-Plas, Sterling, AeroCon, PackerWare, Plastics and Trustee - ----------------------------------------------------------------------------------------------------------------------------------- Sixth Supplemental Indenture to the July 2, 1998 NIM Holdings Limited ("NIM"), Added NIM and Norwich as guarantors Indenture among Berry, BPC, Iowa, Norwich Injection Moulders Limited Tri-Plas, Sterling, AeroCon, ("Norwich"), Berry, BPC, Iowa, PackerWare, Plastics, VPI, Tri-Plas, Sterling, AeroCon, Southeast, Midwest and Trustee PackerWare, Plastics, VPI, Southeast, Midwest and Trustee - ----------------------------------------------------------------------------------------------------------------------------------- Seventh Supplemental Indenture to October 16, 1998 Knight Plastics, Inc. ("Knight"), Added Knight as a guarantor the Indenture among Berry, BPC, Berry, BPC, Iowa, Tri-Plas, Iowa, Tri-Plas, Sterling, AeroCon, Sterling, AeroCon, PackerWare, PackerWare, Plastics, VPI, Plastics, VPI, Southeast, Midwest, Southeast, Midwest, NIM, Norwich NIM, Norwich and Trustee and Trustee - ----------------------------------------------------------------------------------------------------------------------------------- Eighth Supplemental Indenture to July 9, 1999 Norwich Acquisition Limited Added Norwich Acquisition, CPI the Indenture among Berry, BPC, ("Norwich Acquisition"), CPI Holding, Iowa, Tri-Plas, Sterling, AeroCon, Holding Corporation ("CPI Cardinal PackerWare, Plastics, VPI, and BPAC II as guarantors Southeast, Midwest, NIM, Berry Holding"), Cardinal Packaging, Inc. Plastics U.K. Limited (f/k/a ("Cardinal"), Berry Plastics Norwich Injection Moulders Limited) Acquisition Corporation II ("BPAC ("Plastics U.K."), Knight and II"), Berry, BPC, Iowa, Tri-Plas, Trustee Sterling, AeroCon, PackerWare, Plastics, VPI, Southeast, Midwest, NIM, Plastics U.K., Knight and Trustee
Document Date Parties Reason for Supplement =================================================================================================================================== Ninth Supplemental Indenture to the May 9, 2000 Berry Plastics Acquisition Added BPAC III and Poly-Seal as Indenture among Berry, BPC, Iowa, Corporation III ("BPAC III"), guarantors Tri-Plas, Sterling, AeroCon, Poly-Seal Corporation PackerWare, Plastics, VPI, ("Poly-Seal"), Berry, BPC, Iowa, Southeast, Midwest, NIM, Plastics Tri-Plas, Sterling, AeroCon, U.K., Norwich Acquisition, Knight, PackerWare, Plastics, VPI, CPI Holding, Cardinal, BPAC II and Southeast, Midwest, NIM, Plastics Trustee U.K., Knight, Norwich Acquisition, CPI Holding, Cardinal, BPAC II and Trustee
EX-4.15 7 a2042389zex-4_15.txt EXHIBIT 4.15 FOURTH SUPPLEMENTAL INDENTURE The undersigned are executing and delivering this Fourth Supplemental Indenture pursuant to Section 4.13 of the Indenture, dated as of August 24, 1998, as supplemented (the "Indenture"), among Berry Plastics Corporation (the "Company"), BPC Holding Corporation ("Holding"), Berry Iowa Corporation ("Berry Iowa"), Berry Tri-Plas Corporation ("Berry Tri-Plas"), Berry Sterling Corporation ("Berry Sterling"), AeroCon, Inc. ("AeroCon"), PackerWare Corporation ("PackerWare"), Berry Plastics Design Corporation ("Berry Design"), Venture Packaging, Inc. ("Venture"), Berry Plastics Technical Services, Inc. (f/k/a Venture Packaging Southeast, Inc.)("Berry Technical"), Venture Packaging Midwest, Inc. ("Midwest"), NIM Holdings Limited ("NIM"), Berry Plastics U.K. Limited (f/k/a Norwich Injection Moulders Limited)("Berry UK"), Norwich Acquisition Limited ("Norwich"), Knight Plastics, Inc. ("Knight"), CPI Holding Corporation ("CPI"), Cardinal Packaging, Inc. ("Cardinal"), Poly-Seal Corporation ("Poly-Seal"), Berry Plastics Acquisition Corporation II (f/k/a Berry Plastics Acquisition Corporation)("BPAC II"), Berry Plastics Acquisition Corporation III ("BPAC III") and United States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. By executing and delivering to the Trustee this Fourth Supplemental Indenture, each of CBP Holdings S.r.l., an Italian S.r.l. (f/k/a Capsol-Berry Plastics S.r.l.), Capsol S.p.A., an Italian S.p.A. and Ociesse S.r.l., an Italian S.r.l. (each, a "New Guarantor" and collectively, the "New Guarantors"), hereby becomes a "Guarantor" under the Indenture and hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Indenture in the same manner as if it were an original signatory to such agreement. Each of the New Guarantors hereby unconditionally guarantees that (i) the principal of and interest on the Notes will be paid in full when due, whether at the maturity or interest payment or mandatory redemption date, by acceleration, call for redemption or otherwise, and interest on the overdue principal of and interest, if any, on the Notes and all other obligations of the Company to the Holders or the Trustee under the Indenture or the Notes will be promptly paid in full or performed, all in accordance with the terms of the Indenture and the Notes and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. By executing and delivering to the Trustee this Fourth Supplemental Indenture, each of Holding, Berry Iowa, Berry Tri-Plas, Berry Sterling, AeroCon, PackerWare, Berry Design, Venture, Berry Technical, Midwest, NIM, Berry UK, Norwich, Knight, CPI, Cardinal, Poly-Seal, BPAC II, and BPAC III (each an "Old Guarantor") hereby reaffirms its obligations under the Indenture as previously supplemented and as further supplemented hereby. The obligations of each of the undersigned to each Holder and to the Trustee pursuant hereto are as expressly set forth in Article 10 of the Indenture which terms are incorporated herein by reference. This is a continuing guarantee and shall remain in full force and effect and shall be binding upon each of the undersigned and its successors and assigns until full and final payment of all of the Company's obligations under the Notes and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a guarantee of payment and not a guarantee of collection. Each of the Company and the Guarantors (hereinafter, collectively, the "Obligors") hereby agrees that all judicial proceedings brought against it arising out of or relating to the Indenture, or any obligations hereunder, may be brought in any State or Federal Court of competent jurisdiction in the State, County and City of New York in the United States of America. By executing and delivering this Fourth Supplemental Indenture, each of the Obligors hereby irrevocably: (i) accepts generally and unconditionally the nonexclusive jurisdiction and venue of such courts, (ii) waives any defense of FORUM NON CONVENIENS; (iii) designates and appoints Joseph S. Levy, or such other persons located in New York State selected by the Obligors from time to time, and agreeing in writing to so serve, as its agent to receive on its behalf service of all process in any such proceedings in any such court, such service being hereby acknowledged by each of the Obligors to be effective and binding service in every respect (with a copy of any such process so served to be mailed by registered mail to each of the Obligors at its address provided that, unless otherwise provided by applicable law, any failure to mail such copy shall not affect the validity of service of such process) and each of the Obligors hereby agrees that service of process sufficient for personal jurisdiction in any action in the State of New York may be made by registered or certified mail, return receipt requested, to it at its address and hereby acknowledges that such service shall be effective and binding in every respect; and nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right to bring proceedings against any of the Obligors in the courts of any other jurisdiction; and (iv) agrees that the provisions of this Fourth Supplemental Indenture relating to jurisdiction and venue shall be binding and enforceable to the fullest extent permissible under New York General Obligations Law, Section 5-1402 or otherwise. Any and all payments to be made by any of the undersigned to the Trustee shall be made in U.S. Dollars. If, for the purpose of calculating the amount of any judgment in any court, it is necessary to convert into any other currency (the "Judgment Currency") an amount due in U.S. Dollars under the Indenture, then the conversion shall be made at the discretion of the Trustee, at the rate of exchange prevailing either on the date of default or on the day before the day on which the award or judgment is given (the "Conversion Date"). If there is a change in the rate of exchange prevailing between the Conversion Date and the date of actual payment of the amount due, the undersigned will pay such additional amounts (if any, but in any event, not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency when converted at the rate of exchange prevailing on the date of payment will produce the amount then due in U.S. Dollars. This Fourth Supplemental Indenture may be executed in counterparts. Each signed copy shall be an original, but all of them together represent the same agreement. -2- IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Fourth Supplemental Indenture as of the ____ day of _________, 2000. ATTEST: BERRY PLASTICS CORPORATION By: --------------------------------- James M. Kratochvil By: Executive Vice President, Chief -------------------------------- Financial Officer, Treasurer and Martin R. Imbler Secretary President and Chief Executive Officer BPC HOLDING CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY IOWA CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY TRI-PLAS CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY STERLING CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary AEROCON, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary PACKERWARE CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS DESIGN CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary VENTURE PACKAGING, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS TECHNICAL SERVICES, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary VENTURE PACKAGING MIDWEST, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary NIM HOLDINGS LIMITED By: James M. Kratochvil Director BERRY PLASTICS U.K. LIMITED By: --------------------------------- James M. Kratochvil Director NORWICH ACQUISITION LIMITED By: --------------------------------- James M. Kratochvil Director KNIGHT PLASTICS, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CPI HOLDING CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CARDINAL PACKAGING, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS ACQUISITION CORPORATION II By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS ACQUISITION CORPORATION III By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary POLY-SEAL CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CAPSOL-BERRY PLASTICS S.R.L. By: --------------------------------- James M. Kratochvil Director CAPSOL S.P.A. By: --------------------------------- James M. Kratochvil Director OCIESSE S.R.L. By: --------------------------------- James M. Kratochvil Director UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE By: --------------------------------- Name: Title: Schedule of Supplemental Indentures
Document Date Parties Reason for Supplement =================================================================================================================================== First Supplemental Indenture to the October 16, 1998 Knight Plastics, Inc. ("Knight"), Added Knight as a guarantor Indenture dated as of August 24, Berry, BPC, Iowa, Tri-Plas, 1998 (the "Indenture") among Berry Sterling, AeroCon, PackerWare, Plastics Corporation ("Berry"), BPC Plastics, VPI, Southeast, Midwest, Holding Corporation ("BPC"), Berry NIM, Norwich and Trustee Iowa Corporation ("Iowa"), Berry Tri-Plas Corporation ("Tri-Plas"), Berry Sterling Corporation ("Sterling"), AeroCon, Inc. ("AeroCon"), PackerWare Corporation ("PackerWare"), Berry Plastics Design Corporation ("Plastics"), Venture Packaging, Inc. ("VPI"), Venture Packaging Southeast, Inc. ("Southeast"), Venture Packaging Midwest, Inc. ("Midwest"), NIM Holdings Limited ("NIM"), Norwich Injection Moulders Limited ("Norwich") and United States Trust Company of New York, as trustee (the "Trustee") - ----------------------------------------------------------------------------------------------------------------------------------- Second Supplemental Indenture to July 9, 1999 Norwich Acquisition Limited Added Norwich Acquisition, CPI the Indenture among Berry, BPC, ("Norwich Acquisition"), CPI Holding, Iowa, Tri-Plas, Sterling, AeroCon, Holding Corporation ("CPI Cardinal PackerWare, Plastics, VPI, and BPAC II as guarantors Southeast, Midwest, NIM, Berry Holding"), Cardinal Packaging, Inc. Plastics U.K. Limited (f/k/a ("Cardinal"), Berry Plastics Norwich Injection Moulders Limited) Acquisition Corporation II ("BPAC ("Plastics U.K."), Knight and II"), Berry, BPC, Iowa, Tri-Plas, Trustee Sterling, AeroCon, PackerWare, Plastics, VPI, Southeast, Midwest, NIM, Plastics U.K., Knight and Trustee - ----------------------------------------------------------------------------------------------------------------------------------- Third Supplemental Indenture to the May 9, 2000 Berry Plastics Acquisition Added BPAC III and Poly-Seal as Indenture among Berry, BPC, Iowa, Corporation III ("BPAC III"), guarantors Tri-Plas, Sterling, AeroCon, Poly-Seal Corporation PackerWare, Plastics, VPI, ("Poly-Seal"), Berry, BPC, Iowa, Southeast, Midwest, NIM, Plastics Tri-Plas, Sterling, AeroCon, U.K., Norwich Acquisition, Knight, PackerWare, Plastics, VPI, CPI Holding, Cardinal, BPAC II and Southeast, Midwest, NIM, Plastics Trustee U.K., Knight, Norwich Acquisition, CPI Holding, Cardinal, BPAC II and Trustee
EX-4.16 8 a2042389zex-4_16.txt EXHIBIT 4.16 SECOND SUPPLEMENTAL INDENTURE The undersigned are executing and delivering this Second Supplemental Indenture pursuant to Section 4.13 of the Indenture, dated as of July 6, 1999, as supplemented (the "Indenture"), among Berry Plastics Corporation (the "Company"), BPC Holding Corporation ("Holding"), Berry Iowa Corporation ("Berry Iowa"), Berry Tri-Plas Corporation ("Berry Tri-Plas"), Berry Sterling Corporation ("Berry Sterling"), AeroCon, Inc. ("AeroCon"), PackerWare Corporation ("PackerWare"), Berry Plastics Design Corporation ("Berry Design"), Venture Packaging, Inc. ("Venture"), Berry Plastics Technical Services, Inc. (f/k/a Venture Packaging Southeast, Inc.)("Berry Technical"), Venture Packaging Midwest, Inc. ("Midwest"), NIM Holdings Limited ("NIM"), Berry Plastics U.K. Limited (f/k/a Norwich Injection Moulders Limited)("Berry UK"), Norwich Acquisition Limited ("Norwich"), Knight Plastics, Inc. ("Knight"), CPI Holding Corporation ("CPI"), Cardinal Packaging, Inc. ("Cardinal"), Poly-Seal Corporation ("Poly-Seal"), Berry Plastics Acquisition Corporation II (f/k/a Berry Plastics Acquisition Corporation)("BPAC II"), Berry Plastics Acquisition Corporation III ("BPAC III") and United States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. By executing and delivering to the Trustee this Second Supplemental Indenture, each of CBP Holdings S.r.l., an Italian S.r.l. (f/k/a Capsol-Berry Plastics S.r.l.), Capsol S.p.A., an Italian S.p.A. and Ociesse S.r.l., an Italian S.r.l. (each, a "New Guarantor" and collectively, the "New Guarantors"), hereby becomes a "Guarantor" under the Indenture and hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Indenture in the same manner as if it were an original signatory to such agreement. Each of the New Guarantors hereby unconditionally guarantees that (i) the principal of and interest on the Notes will be paid in full when due, whether at the maturity or interest payment or mandatory redemption date, by acceleration, call for redemption or otherwise, and interest on the overdue principal of and interest, if any, on the Notes and all other obligations of the Company to the Holders or the Trustee under the Indenture or the Notes will be promptly paid in full or performed, all in accordance with the terms of the Indenture and the Notes and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. By executing and delivering to the Trustee this Second Supplemental Indenture, each of Holding, Berry Iowa, Berry Tri-Plas, Berry Sterling, AeroCon, PackerWare, Berry Design, Venture, Berry Technical, Midwest, NIM, Berry UK, Norwich, Knight, CPI, Cardinal, Poly-Seal, BPAC II, and BPAC III (each an "Old Guarantor") hereby reaffirms its obligations under the Indenture as previously supplemented and as further supplemented hereby. The obligations of each of the undersigned to each Holder and to the Trustee pursuant hereto are as expressly set forth in Article 10 of the Indenture which terms are incorporated herein by reference. This is a continuing guarantee and shall remain in full force and effect and shall be binding upon each of the undersigned and its successors and assigns until full and final payment of all of the Company's obligations under the Notes and the Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a guarantee of payment and not a guarantee of collection. Each of the Company and the Guarantors (hereinafter, collectively, the "Obligors") hereby agrees that all judicial proceedings brought against it arising out of or relating to the Indenture, or any obligations hereunder, may be brought in any State or Federal Court of competent jurisdiction in the State, County and City of New York in the United States of America. By executing and delivering this Second Supplemental Indenture, each of the Obligors hereby irrevocably: (i) accepts generally and unconditionally the nonexclusive jurisdiction and venue of such courts, (ii) waives any defense of FORUM NON CONVENIENS; (iii) designates and appoints Joseph S. Levy, or such other persons located in New York State selected by the Obligors from time to time, and agreeing in writing to so serve, as its agent to receive on its behalf service of all process in any such proceedings in any such court, such service being hereby acknowledged by each of the Obligors to be effective and binding service in every respect (with a copy of any such process so served to be mailed by registered mail to each of the Obligors at its address provided that, unless otherwise provided by applicable law, any failure to mail such copy shall not affect the validity of service of such process) and each of the Obligors hereby agrees that service of process sufficient for personal jurisdiction in any action in the State of New York may be made by registered or certified mail, return receipt requested, to it at its address and hereby acknowledges that such service shall be effective and binding in every respect; and nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right to bring proceedings against any of the Obligors in the courts of any other jurisdiction; and (iv) agrees that the provisions of this Second Supplemental Indenture relating to jurisdiction and venue shall be binding and enforceable to the fullest extent permissible under New York General Obligations Law, Section 5-1402 or otherwise. Any and all payments to be made by any of the undersigned to the Trustee shall be made in U.S. Dollars. If, for the purpose of calculating the amount of any judgment in any court, it is necessary to convert into any other currency (the "Judgment Currency") an amount due in U.S. Dollars under the Indenture, then the conversion shall be made at the discretion of the Trustee, at the rate of exchange prevailing either on the date of default or on the day before the day on which the award or judgment is given (the "Conversion Date"). If there is a change in the rate of exchange prevailing between the Conversion Date and the date of actual payment of the amount due, the undersigned will pay such additional amounts (if any, but in any event, not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency when converted at the rate of exchange prevailing on the date of payment will produce the amount then due in U.S. Dollars. This Second Supplemental Indenture may be executed in counterparts. Each signed copy shall be an original, but all of them together represent the same agreement. -2- IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Second Supplemental Indenture as of the ____ day of _________, 2000. ATTEST: BERRY PLASTICS CORPORATION By: --------------------------------- James M. Kratochvil By: Executive Vice President, Chief --------------------------------- Financial Officer, Treasurer Martin R. Imbler and Secretary President and Chief Executive Officer BPC HOLDING CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY IOWA CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY TRI-PLAS CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY STERLING CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary AEROCON, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary PACKERWARE CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS DESIGN CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary VENTURE PACKAGING, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS TECHNICAL SERVICES, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary VENTURE PACKAGING MIDWEST, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary NIM HOLDINGS LIMITED By: --------------------------------- James M. Kratochvil Director BERRY PLASTICS U.K. LIMITED By: --------------------------------- James M. Kratochvil Director NORWICH ACQUISITION LIMITED By: --------------------------------- James M. Kratochvil Director KNIGHT PLASTICS, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CPI HOLDING CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CARDINAL PACKAGING, INC. By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS ACQUISITION CORPORATION II By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS ACQUISITION CORPORATION III By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary POLY-SEAL CORPORATION By: --------------------------------- James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CAPSOL-BERRY PLASTICS S.R.L. By: --------------------------------- James M. Kratochvil Director CAPSOL S.P.A. By: --------------------------------- James M. Kratochvil Director OCIESSE S.R.L. By: --------------------------------- James M. Kratochvil Director UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE By: --------------------------------- Name: Title: Schedule of Supplemental Indentures
Document Date Parties Reason for Supplement =================================================================================================================================== First Supplemental Indenture to the May 9, 2000 Berry Plastics Acquisition Added BPAC III and Poly-Seal as Indenture dated as of July 6, 1999 Corporation III ("BPAC III"), guarantors (the "Indenture") among Berry Poly-Seal Corporation Plastics Corporation ("Berry"), BPC ("Poly-Seal"), Berry, BPC, Iowa, Holding Corporation ("BPC"), Berry Tri-Plas, Sterling, AeroCon, Iowa Corporation ("Iowa"), Berry PackerWare, Plastics, VPI, Tri-Plas Corporation ("Tri-Plas"), Southeast, Midwest, NIM, Plastics Berry Sterling Corporation U.K., Knight, Norwich Acquisition, ("Sterling"), AeroCon, Inc. CPI Holding, Cardinal, BPAC II and ("AeroCon"), PackerWare Corporation Trustee ("PackerWare"), Berry Plastics Design Corporation ("Plastics"), Venture Packaging, Inc. ("VPI"), Venture Packaging Southeast, Inc. ("Southeast"), Venture Packaging Midwest, Inc. ("Midwest"), NIM Holdings Limited ("NIM"), Berry Plastics U.K. Limited (f/k/a Norwich Injection Moulders Limited) ("Plastics U.K."), Knight Plastics, Inc. ("Knight"), Norwich Acquisition Limited ("Norwich Acquisition"), CPI Holding Corporation ("CPI Holding"), Cardinal Packaging, Inc. ("Cardinal"), Berry Plastics Acquisition Corporation II ("BPAC II") and United States Trust Company of New York, as trustee (the "Trustee")
EX-10.1 9 a2042389zex-10_1.txt EXHIBIT 10.1 Ex-10.1 THIRD AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT THIS THIRD AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this "Agreement") is made this 9th day of May, 2000, by and among BERRY PLASTICS CORPORATION, a corporation organized under the laws of the State of Delaware (the "Borrower"), NIM HOLDINGS LIMITED, a company organized and existing under the laws of England and Wales ("NIM Holdings"), and BERRY PLASTICS UK LIMITED, a company organized and existing under the laws of England and Wales, formerly known as Norwich Injection Moulders Limited ("Berry UK"); BANK OF AMERICA, N.A., a national banking association, formerly known as NationsBank, N.A. ("Bank of America"), FLEET CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of Rhode Island ("Fleet"), GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of New York ("GE Capital"), as documentation agent, HELLER FINANCIAL, INC., a corporation organized and existing under the laws of the State of Delaware ("Heller"), PNC BANK, NATIONAL ASSOCIATION, a national banking association ("PNC"), LASALLE BUSINESS CREDIT, INC., a corporation organized and existing under the laws of the State of Delaware ("LaSalle"), and each other financial institution which is a party to this Agreement, whether by execution and delivery of this Agreement or otherwise pursuant to Section 9.5 (Assignments by Lender) (collectively, the "Lenders" and individually, a "Lender"); GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of New York, as documentation agent, and BANK OF AMERICA, N. A., a national banking association, in its capacity as both collateral and administrative agent for the Lenders (the "Agent") and as lead arranger. RECITALS A. The Borrower, Berry UK, NIM Holdings, the Agent and the Lenders are parties to that certain Second Amended and Restated Financing and Security Agreement dated as of July 2, 1998 by and among the Borrower, the Agent and the Lenders (other than LaSalle), as amended by (i) that certain First Amendment to Second Amended and Restated Financing and Security Agreement dated as of July 31, 1998, (ii) that certain Second Amendment to Second Amended and Restated Financing and Security Agreement dated as of August 17, 1998, (iii) that certain Third Amendment to Second Amended and Restated Financing and Security Agreement dated as of October 30, 1998, (iv) that certain Fourth Amendment to Second Amended and Restated Financing and Security Agreement dated as of July 6, 1999, and (v) that certain Fifth Amendment to Second Amended and Restated Financing and Security Agreement dated as of October 16, 1999 (as amended, restated, supplemented or otherwise modified, the "Original Credit Agreement"). Pursuant to the provisions of the Original Credit Agreement, the Borrower applied to the Lenders for credit facilities consisting of (i) a revolving credit facility in the maximum principal amount of $70,000,000 (the "Domestic Revolving Credit Facility"), (ii) a letter of credit facility in the maximum principal amount of $5,000,000 (the "Domestic Letter of Credit Facility"), as part of that revolving credit facility, (iii) a term loan facility in the maximum principal amount of $35,828,079 ("Term Loan A"), (iv) a term loan facility in the maximum principal amount of $36,500,000 ("Term Loan B"), (iv) a standby letter of credit facility in the maximum principal amount of $18,852,000 ("the "Bond Letter of Credit Facility"), (v) a special source bond facility in the maximum principal amount of $860,575.07 (the "Special Source Bond"), all to be used by the Borrower for the Permitted Uses described in this Agreement. In addition, the Borrower, Berry UK and NIM Holdings applied to the UK Lender for (i) a revolving credit facility in the maximum principal amount of (pound)1,500,000 (the "UK Revolving Loan") and (ii) a term loan facility in the maximum principal amount of (pound)4,500,000 (the "UK Term Loan"). B. The Bond Letter of Credit Facility originally consisted of three (3) letters of credit issued in connection with certain obligations of the Borrower and/or one or more of the Borrower's subsidiaries under certain bond obligations (the "Bond Letters of Credit"). Subsequently, two (2) of the three (3) Bond Letters of Credit have expired and/or been terminated, such that as of the date of this Agreement there remains outstanding only a single Bond Letter of Credit. In addition, since the execution and delivery of the Original Credit Agreement, all obligations of the Borrower under and in connection with the Special Source Bond has been repaid in full. C. The Borrower has advised the Agent and the Lenders that contemporaneously with the execution and delivery of this Agreement, the Borrower has acquired or intends to acquire all of the capital stock ("Poly-Seal Stock") issued by Poly-Seal Corporation, a corporation organized and existing under the laws of the State of Delaware ("Poly-Seal") in accordance with the provisions of that certain Agreement and Plan of Merger by and among the existing shareholders of Poly-Seal and the Borrower (as amended, restated, supplemented or otherwise modified, the "Poly-Seal Purchase Agreement"). Immediately upon closing and consummation of the Borrower's acquisition of the Poly-Seal Stock, the Borrower intends to merge Berry Plastics Acquisition Corp., a corporation organized and existing under the laws of the State of Delaware ("Berry Acquisition") into Poly-Seal such that Poly-Seal will be the surviving corporation. Following the Borrower's acquisition of the Poly-Seal Stock and the merger of Berry Acquisition into Poly-Seal, Poly-Seal will be a wholly-owned subsidiary of the Borrower. D. In connection with the purchase of the Poly-Seal Stock, the Borrower has requested that the Agent and the Lenders agree (i) to readvance a portion of Term Loan A previously repaid by the Borrower such that as of the date of this Agreement, the unpaid principal balance of Term Loan A shall be in an amount up to, but not exceeding $63,000,000, (ii) to readvance a portion of Term Loan B previously repaid by the Borrower such that as of the date of this Agreement, the unpaid principal balance of Term Loan B shall be equal to $17,500,000, (iii) to consent to the Borrower's proposed borrowing of up to $25,000,000 from GE Capital in accordance with the terms and conditions set forth in the term sheet from GE Capital to the Borrower attached hereto as Exhibit "E" and (iv) otherwise to amend certain terms and conditions of the Original Credit Agreement. In addition, the Borrower has requested that the Agent and the Lenders consent and agree to (1) the acquisition of the Poly-Seal Stock by the Borrower in accordance with the terms and conditions of the Poly-Seal Purchase Agreement, (2) the merger of Berry Acquisition into Poly-Seal, (3) the Parent's issuance of a class of preferred stock for sale to one or more existing shareholders for an aggregate purchase price of Twenty-five Million Dollars ($25,000,000) (the "Preferred Stock"), the proceeds of which sale are to be used to finance, in part, the closing and consummation of the Borrower's purchase of the Poly-Seal Stock, and (4) Berry UK's acquisition of certain assets of Capsol-Certwood UK Ltd.. 2 E. Accordingly, the Borrower, Berry UK, NIM Holdings, the Agent and the Lenders desire to amend and restate the Original Credit Agreement, as follows: ARTICLE I DEFINITIONS Section 1.1 Certain Defined Terms. As used in this Agreement, the terms defined in the Preamble and Recitals hereto shall have the respective meanings specified therein, and the following terms shall have the following meanings: "Account" individually and "Accounts" collectively mean all presently existing or hereafter acquired or created accounts, accounts receivable, contract rights, notes, drafts, instruments, acceptances, chattel paper, leases and writings evidencing a monetary obligation or a security interest in, or a lease of, goods, all rights to receive the payment of money or other consideration under present or future contracts (including, without limitation, all rights to receive payments under presently existing or hereafter acquired or created letters of credit), or by virtue of merchandise sold or leased, services rendered, by or set forth in or arising out of any present or future chattel paper, note, draft, lease, acceptance, writing, bond, insurance policy, instrument, document or general intangible, and all extensions and renewals of any thereof, all rights under or arising out of present or future contracts, agreements or general interest in merchandise which gave rise to any or all of the foregoing, including all goods, all claims or causes of action now existing or hereafter arising in connection with or under any agreement or document or by operation of law or otherwise, all collateral security of any kind (including, without limitation, real property mortgages and deeds of trust) and letters of credit given by any Person with respect to any of the foregoing, all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to any or all of the foregoing and all general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all proceeds (cash and non-cash) of the foregoing. "Account Debtor" means any Person who is obligated on an Account and "Account Debtors" mean all Persons who are obligated on the Accounts. "Additional Subordinated Debt" means that certain Indebtedness for Borrowed Money of the Borrower (and all guarantees thereof by the Borrower and its Subsidiaries) issued in favor of United States Trust Company of New York, as trustee for the holders of the 12-1/4% Series B Senior Subordinated Notes (and any other promissory notes hereafter issued in exchange therefor as contemplated by the Indenture) due 2004 in a stated principal amount up to Twenty-five Million Dollars ($25,000,000). "Additional Subordinated Debt (Cardinal)" means that certain Indebtedness for Borrowed Money of the Borrower (and all guarantees thereof by the Borrower and its Subsidiaries) issued in favor of United States Trust Company of New York, as trustee for the holders of the 11% Senior Subordinated Notes (and any other promissory notes hereafter issued in exchange therefor as contemplated by the Indenture) due 2007 in a stated principal amount of up to Seventy-five Million Dollars ($75,000,000). 3 "Additional Subordinated Debt Loan Documents" means any and all promissory notes, agreements, documents or instruments now or at any time evidencing, securing, guarantying or otherwise executed and delivered in connection with the Additional Subordinated Debt, as the same may from time to time be amended, restated, supplemented or modified. "Additional Subordinated Debt Loan Documents (Cardinal)" means any and all promissory notes, agreements, documents or instruments now or at any time evidencing, securing, guarantying or otherwise executed and delivered in connection with the Additional Subordinated Debt (Cardinal), as the same may from time to time be amended, restated, supplemented or modified. "AeroCon, Inc." means AeroCon, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Affiliate" means, with respect to any designated Person, any other Person, (a) directly or indirectly controlling, directly or indirectly controlled by, or under direct or indirect common control with the Person designated, (b) directly or indirectly owning or holding ten percent (10%) or more of any equity interest in such designated Person, or (c) ten percent (10%) or more of whose stock or other equity interest is directly or indirectly owned or held by such designated Person. For purposes of this definition, the term "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or other equity interests or by contract or otherwise. "Agency Fee" and "Agency Fees" have the meanings described in Section 8.9 (Agency Fee). "Agent" means the Person defined as the "Agent" in the preamble of this Agreement and shall also include any successor Agent appointed pursuant to Section 8.7 (Successor Agent). "Agent's Obligations" shall mean any and all Obligations payable solely to and for the exclusive benefit of the Agent by the Borrower under the terms of this Agreement and/or any of the other Financing Documents, including, without limitation, and any and all Agency Fees, Letter of Credit Fronting Fees and/or Field Examination Fees. "Agreement" means this Third Amended and Restated Financing and Security Agreement, as amended, restated, supplemented or otherwise modified in writing in accordance with the provisions of Section 9.2 (Amendments; Waivers). "Alternate Base Rate" means the sum of (a) the Base Rate plus (b) the Applicable Margin. "Applicable Interest Rate" means (a) the LIBOR Rate, or (b) the Alternate Base Rate. "Applicable Margin" means the applicable rate per annum to be added to the LIBOR Base Rate or the Base Rate, as set forth in Section 2.9.1 (Applicable Interest Rates). 4 "Asset Disposition" means the disposition of any or all of the Assets of the Borrower or any Subsidiary of the Borrower, whether by sale, lease, transfer or other disposition (including any such disposition effected by way of merger or consolidation) other than Permitted Asset Dispositions. "Assets" means at any date all assets that, in accordance with GAAP consistently applied, should be classified as assets on a consolidated balance sheet of the Borrower and its Subsidiaries. "Assignee" has the meaning set forth in Section 9.5 (Assignments by Lenders). "Assignment of Patents" means (a) that certain amended and restated collateral assignment of patents as security dated the date hereof from the Borrower to the Agent for the benefit of the Lenders ratably and the Agent and (b) that certain amended, restated and consolidated collateral assignment of patents as security dated the date hereof from the BTP, BIC, Berry Sterling, PackerWare, Venture Southeast, Venture Midwest, Knight, Poly-Seal and Cardinal to the Agent for the benefit of the Lenders ratably and the Agent, each as amended, restated, supplemented or otherwise modified in writing at any time and from time to time. "Assignment of Trademarks" means (a) that certain amended and restated collateral assignment of trademarks as security dated as of the date hereof from the Borrower to the Agent for the benefit of the Lenders ratably and the Agent and (b) that certain amended, restated and consolidated collateral assignment of trademarks as security dated as of the date hereof from PackerWare, Venture Southeast, Venture Midwest, Knight, Poly-Seal and Cardinal, each as amended, restated, supplemented or otherwise modified in writing at any time and from time to time. "Bank of America" means Bank of America, N.A. and its successors and assigns and shall mean Bank of America, acting through its Sterling LIBOR Lending Office with respect to all matters relating to the UK Credit Facilities. "Base Rate" means the higher of (a) the Prime Rate, or (b) the sum of (i) the Federal Funds Rate, plus (ii) fifty (50) basis points. "Base Rate Loan" means any Loan for which interest is to be computed with reference to the Alternate Base Rate. "Berry Acquisition" means Berry Plastics Acquisition Corp., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Berry Design" means Berry Plastics Design Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Berry Sterling" means Berry Sterling Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. 5 "Berry UK" means Berry Plastics UK Limited, a company organized and existing under the laws of the England and formerly known as Norwich Injection Moulders Limited, and its successors and assigns. "BIC" means Berry Iowa Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "BTP" means Berry Tri-Plas Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Bankruptcy Code" means the United States Bankruptcy Code, as amended from time to time and any successor Laws. "Bond Letter of Credit" means the Nevada Bond Letter of Credit. "Bond Letter of Credit Commitment" means the agreement of Bank of America relating to the issuance of the Nevada Bond Letter of Credit and the agreement of each other Lender to purchase a participating interest in the Nevada Bond Letter of Credit Obligations relating to the Nevada Bond Letters of Credit; and "Bond Letter of Credit Commitments" means the collective reference to the Bond Letter of Credit Commitment of Bank of America and each of the other Lenders. "Bond Letter of Credit Committed Amount" has the meaning given such term in Section 2.5.1 (Bond Letters of Credit). "Bond Letter of Credit Facility" means the facility established pursuant to Section 2.5 (Bond Letter of Credit Facility). "Bond Letter of Credit Fee" and "Bond Letter of Credit Fees" have the meanings described in Section 2.5.2 (Bond Letter of Credit Fees). "Bond Letter of Credit Fronting Fee" and "Bond Letter of Credit Fronting Fees" have the meanings described in Section 2.5.2 (Bond Letter of Credit Fees). "Bond Letter of Credit Obligations" means the Nevada Bond Letter of Credit Obligations. "Bond Letter of Credit Agreement Documents" means the collective reference to the Nevada Bond Letter of Credit Agreement Documents. "Bonds" means the Nevada Bonds. "Borrowing Base" has the meaning described in Section 2.1.3 (Borrowing Base). "Borrowing Base Deficiency" has the meaning described in Section 2.1.3 (Borrowing Base). 6 "Borrowing Base Report" has the meaning described in Section 2.1.4 (Borrowing Base Report). "Borrowing Base Trigger Event" has the meaning described in Section 2.1.4 (Borrowing Base Report). "Business Day" means any day other than a Saturday, Sunday or other day on which (i) in the case of Bank of America (as Agent and Lender), commercial banks in the State are authorized or required to close, and (ii) in the case of the Lenders other than Bank of America, those Lenders are open for the transaction of business at the addresses stated after their names on the signature pages of this Agreement and (iii) if any payment is due or interest is to be calculated or advance is to be made on such day, any day in which trading in Dollars or Sterling deposits, as the case may be, is being carried on in the London interbank market. "Capital Expenditure" means an expenditure which would be classified as such in accordance with GAAP (whether payable in cash or other property or accrued as a liability) for Fixed or Capital Assets, including, without limitation, the entering into of a Capital Lease. "Capital Lease" means with respect to any Person any lease of real or personal property, for which the related Lease Obligations have been or should be, in accordance with GAAP consistently applied, reflected as a liability on the balance sheet that Person. "Cardinal" means Cardinal Packaging, Inc., a corporation organized and existing under the laws of the State of Ohio, and its successors and assigns. "Cash Equivalents" means (a) securities with unexpired maturities of one year or less issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit with unexpired maturities of one (1) year or less or money market accounts maintained with, the Agent, any Lender, any Affiliate of the Agent or any Lender, or any other domestic commercial bank having capital and surplus in excess of One Hundred Million Dollars ($100,000,000.00) or such other domestic financial institutions or domestic brokerage houses to the extent disclosed to, and approved by, the Agent and (c) commercial paper of a domestic issuer rated at least either A-1 by Standard & Poor's Corporation (or its successor) or P-1 by Moody's Investors Service, Inc. (or its successor) with unexpired maturities of six (6) months or less. In addition, with respect to Berry UK and NIM Holdings, Cash Equivalents shall also mean (a) securities with unexpired maturities of one year or less issued or fully guaranteed or insured by the British National Government or any agency thereof and (b) certificates of deposit with unexpired maturities of one (1) year or less or money market instruments issued by Barclays Bank PLC. "Chattel Paper" means a writing or writings which evidence both a monetary obligation and a security interest in or lease of specific goods; any returned, rejected or repossessed goods covered by any such writing or writings and all proceeds (in any form including, without limitation, accounts, contract rights, documents, chattel paper, instruments and general intangibles) of such returned, rejected or repossessed goods; and all proceeds (cash and non-cash) of the foregoing. "Closing Date" means the date of this Agreement. 7 "Collateral" means all property of the Borrower and each Subsidiary Guarantor subject from time to time to the Liens of this Agreement, any of the Security Documents and/or any of the other Financing Documents, together with any and all cash and non-cash proceeds and products thereof, and the UK Collateral. "Collateral Account" has the meaning described in Section 2.1.8 (The Collateral Account). "Collateral Disclosure List" has the meaning described in Section 3.3 (Collateral Disclosure List). "Collection" means each check, draft, cash, money, instrument, item, and other remittance in payment or on account of payment of the Accounts or otherwise with respect to any Collateral, including, without limitation, cash proceeds of any returned, rejected or repossessed goods, the sale or lease of which gave rise to an Account, and other proceeds of Collateral; and "Collections" means the collective reference to all of the foregoing. "Commitment" means with respect to each Lender, such Lender's Revolving Credit Commitment, Letter of Credit Commitment, Term Loan A Commitment, Term Loan B Commitment, Bond Letter of Credit Commitment, UK Revolving Credit Commitment, or UK Term Loan Commitment as the case may be, and "Commitments" means the collective reference to the Revolving Credit Commitments, the Letter of Credit Commitments, the Term Loan A Commitments, the Term Loan B Commitments, the Bond Letter of Credit Commitments, the UK Revolving Credit Commitments and the UK Term Loan Commitments of all of the Lenders. "Commitment Fee" has the meaning described in Section 2.10.4 (the Commitment Fee). "Committed Amount" means with respect to each Lender, such Lender's Revolving Credit Committed Amount, Letter of Credit Committed Amount, Term Loan A Committed Amount, Term Loan B Committed Amount, the Bond Letter of Credit Committed Amount, UK Revolving Credit Committed Amount, UK Term Loan Committed Amount, as the case may be, and "Committed Amounts" means collectively the Revolving Loan Committed Amount, the Letter of Credit Committed Amount, Term Loan A Committed Amount, Term Loan B Committed Amount, the Bond Letter of Credit Committed Amount of each of the Lenders, the UK Revolving Credit Committed Amounts, and the UK Term Loan Committed Amounts. "Compliance Certificate" means a periodic Compliance Certificate described in Section 6.1.1(a) (Financial Statements). "Commonly Controlled Entity" means an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue Code. "Copyrights" means and includes, in each case whether now existing or hereafter arising, all of the Borrower's or any Subsidiary's rights, title and interest in and to (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, copyright applications, and all renewals of any of the foregoing, (b) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing, 8 including, without limitation, damages or payments for past, current or future infringements of any of the foregoing, (c) the right to sue for past, present and future infringements of any of the foregoing, and (d) all rights corresponding to any of the foregoing throughout the world. "CPI" means CPI Holding Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Credit Facility" means a Domestic Credit Facility or a UK Credit Facility, and "Credit Facilities" means the Domestic Credit Facilities and the UK Credit Facilities. "Current Bond Letter of Credit Obligations" has the meaning described in Section 2.5.4 (Payments of Bond Letters of Credit). "Current Letter of Credit Obligations" has the meaning described in Section 2.4.5 (Payments of Letters of Credit). "Debt Service" means for any period of determination thereof an amount equal to the total of the aggregate amount of all payments of principal and interest with respect to Indebtedness for Borrowed Money of the Borrower, the Subsidiary Guarantors, Berry UK and NIM Holdings, as appropriate, scheduled to be due and payable during such period, excluding any Term Loan B Mandatory Prepayments with respect to Excess Cash Flow and any UK Term Loan Mandatory Prepayment with respect to UK Excess Cash Flow. "Debt Service Coverage Ratio" means as to the Borrower, each of the Subsidiary Guarantors, Berry UK and NIM Holdings on a consolidated basis, for any period of determination thereof the ratio of (a) EBITDA to (b) Debt Service. "Deed of Trust - Arlington Heights" means that certain amended and restated deed of trust or mortgage dated as of the date hereof from Knight to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Arlington Heights grants to the Agent for the benefit of the Lenders ratably and the Agent, a first priority Lien on that certain property located in Arlington Heights, Illinois as further described therein. "Deed of Trust - Baltimore" means that certain deed of trust or mortgage dated as of the date hereof from Poly-Seal to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Baltimore grants to the Agent for the benefit of the Lenders ratably and the Agent, a first priority Lien on that certain property located in Baltimore, Maryland as further described therein. "Deed of Trust - Indian Trail" means that certain amended and restated deed of trust or mortgage dated as of the date hereof from BTP to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Indian Trail grants to the Agent for the benefit of the Lenders ratably and for the benefit of the Agent, a first priority Lien on that certain property known generally as Wesley Chapel-Stouts Road, Indian Trail, North Carolina 28079. 9 "Deed of Trust - Evansville" means that certain amended and restated deed of trust or mortgage dated as of the date hereof from the Borrower to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Evansville grants to the Agent for the benefit of the Lenders ratably and for the benefit of the Agent, a first priority Lien on that certain property known generally as 101 Oakley Street, Evansville, Indiana 47710. "Deed of Trust - Henderson" means that certain amended and restated deed of trust or mortgage dated as of the date hereof from the Borrower to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Henderson grants to the Agent for the benefit of the Lenders ratably and for the benefit of the Agent, a second priority Lien on that certain property known generally as 800 East Horizon Drive, Henderson, Nevada 89009. "Deed of Trust - Iowa Falls" means that certain amended and restated deed of trust or mortgage dated as of the date hereof from BIC to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Iowa Falls grants to the Agent for the benefit of the Lenders ratably and for the benefit of the Agent, a first priority Lien on that certain property known generally as 1036 Industrial Park Road, Iowa Falls, Iowa 50126. "Deed of Trust - Lawrence" means that certain amended and restated deed of trust or mortgage dated as of the date hereof from PackerWare to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Lawrence grants to the Agent for the benefit of the Lenders ratably and for the benefit of the Agent, a first priority Lien on that certain property known generally as 2330 Packer Road, Lawrence, Kansas 66044. "Deed of Trust - Monroeville" means that certain amended and restated deed of trust or mortgage dated as of the date hereof from Venture Midwest to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Monroeville grants to the Agent for the benefit of the Lenders ratably and for the benefit of the Agent, a first priority Lien on that certain property located in Huron County, Ohio, as further described therein. "Deed of Trust - Streetsboro" means that certain amended and restated deed of trust or mortgage dated as of date hereof from Cardinal to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Streetsboro grants to the Agent for the benefit of the Lenders ratably and the Agent, a first priority Lien on that certain property located in Streetsboro, Ohio as further described therein. "Deed of Trust - Suffolk" means that certain amended and restated credit line deed of trust, assignment and security agreement dated as of the date hereof from Berry Design to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Suffolk grants to the Agent for the benefit of the Lenders ratably and for the benefit of the Agent, a first priority Lien on that certain property known generally as 1401 Progress Road, Suffolk, Virginia. 10 "Deed of Trust - Woodstock" means that certain amended and restated deed of trust or mortgage dated as of the date hereof from Knight to or for the benefit of the Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Woodstock grants to the Agent for the benefit of the Lenders ratably and the Agent, a first priority Lien on that certain property located in Woodstock, Illinois as further described therein. "Deeds of Trust" means the collective reference to the Deed of Trust - Arlington Heights, the Deed of Trust - Baltimore, the Deed of Trust - Streetsboro, the Deed of Trust - Woodstock, the Deed of Trust - Indian Trail, the Deed of Trust - Evansville, the Deed of Trust - Henderson, the Deed of Trust - - Iowa Falls, the Deed of Trust - Lawrence, the Deed of Trust - Monroeville, and the Deed of Trust - Suffolk. "Default" means an event that, with the giving of notice or lapse of time, or both, would constitute an Event of Default under the provisions of this Agreement. "Distribution" means (a) the payment of any dividends or other distributions on capital stock of the Borrower (except distributions in any class of capital stock) and (b) the redemption or acquisition of capital stock or Subordinated Indebtedness of the Borrower unless made contemporaneously from the Net Proceeds of the sale of capital stock (excluding the Preferred Stock) or the issuance of Subordinated Indebtedness to the extent permitted by the provisions of this Agreement or otherwise consented to by the Agent. "Documents" means all documents of title, whether now existing or hereafter acquired or created, and all proceeds (cash and non-cash) of the foregoing. "Dollar" or "Dollars" means United States Dollars. "Dollar Currency Equivalent" means, on any date of determination, the amount of Dollars which results from the sale of a given amount in Sterling, determined at the rate of exchange quoted by the Agent in London, England, at 9:00 A.M. (London time) on such date of determination, to prime banks in London, England for the spot sale in the London foreign exchange market of Sterling for Dollars. "Dollar Interest Period" means as to any Dollar LIBOR Loan, the period commencing on and including the date such Dollar LIBOR Loan is made (or on the effective date of the Borrower's election to convert any Base Rate Loan to a Dollar LIBOR Loan in accordance with the provisions of this Agreement) and ending on and including the day which is 30, 60, 90 or 180 days thereafter, as selected by the Borrower in accordance with the provisions of this Agreement, and thereafter, each period commencing on the last day of the then preceding Interest Period for such Dollar LIBOR Loan and ending on and including the day which is 30, 60, 90 or 180 days thereafter, as selected by the Borrower, in accordance with the provisions of this Agreement; provided, however that: (a) the first day of any Dollar Interest Period shall be a Business Day; (b) if any Dollar Interest Period would end on a day that is not a Business Day, such Dollar Interest Period shall be extended to the 11 next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case, such Dollar Interest Period shall end on the next preceding Business Day; and (c) no Dollar Interest Period shall extend beyond the Revolving Credit Termination Date or the scheduled maturity date of the Term Loans A, or the Term Loans B, as appropriate. "Dollar LIBOR Lending Office" means with respect to the Agent such branch or office of the Agent as designated by the Agent from time to time as the branch or office where the Dollar LIBOR Loans are to be made or maintained. "Dollar LIBOR Base Rate" means for any Dollar Interest Period with respect to any Dollar LIBOR Loan, the rate per annum (rounded upward, if necessary, to the nearest next 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in United States Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Dollar Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "Dollar LIBOR Base Rate" shall mean, for any Dollar LIBOR Loan for any Dollar Interest Period therefor, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Dollar Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates. For purposes of this definition, Telerate Page 3750 refers to the British Bankers Association Libor Rates (determined at approximately 11:00 a. m (London time)) that are published by Dow Jones Telerate, Inc. "Dollar LIBOR Loan" means any Loan for which interest is to be computed with reference to the Dollar LIBOR Rate. "Dollar LIBOR Rate" means for any Dollar Interest Period with respect to any Dollar LIBOR Loan, (a) the Applicable Margin, plus (b) the per annum rate of interest calculated pursuant to the following formula: Dollar LIBOR Base Rate ------------------------- 1.00 - Reserve Percentage "Domestic Credit Facility" means with respect to each Lender, such Lender's Pro Rata Share of the Revolving Credit Facility, the Letter of Credit Facility, the Term Loan A Facility, the Term Loan B Facility, or the Bond Letter of Credit Facility, as the case may be, and "Domestic Credit Facilities" means collectively the Revolving Credit Facility, the Letter of Credit Facility, the Term Loan A Facility, the Term Loan B Facility, and the Bond Letter of Credit Facility, and any and all other credit facilities now or hereafter extended to the Borrower under or secured by this Agreement. "EBITDA" means as to the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, as of any date or for any period of determination, the sum of (a) the net profit (or loss) determined in accordance with GAAP consistently applied, plus (b) 12 interest expense and income Taxes or alternative minimum Taxes for such period to the extent deducted in the calculation of net income (or loss), plus (c) depreciation and amortization of Assets for such period, plus (d) unusual expenses associated with the write-off of the capitalized portion of financing costs, minus (e) non-cash gains from Asset sales other than sales of Inventory in the ordinary course of business, plus (f) non-cash losses from Asset sales other than sales of Inventory in the ordinary course of business, plus, (g) non-cash extraordinary losses, minus (h) extraordinary gains, minus (i) interest income, minus (j) any gain relating to the accumulated effect of any change in accounting method, plus (k) any loss relating to the accumulated effect of any change in accounting method, each item in clauses (a) through (k) calculated pursuant to GAAP for such period, plus, (l) any non-cash compensation expenses, minus, (m) any non-cash compensation gains., plus (n) unusual or nonrecurring non-cash losses or expenses, plus (o) non-recurring acquisition-related cash expenses up to $5,000,000 for fiscal year 2000 only. In connection with the calculation of any financial covenant provided in Section 6.1.13 following the closing and consummation of any Permitted Acquisition, EBITDA shall include each Subject Transaction which constitutes a Permitted Acquisition, with such calculation to be based on a twelve (12) month trailing period reflecting actual and historical performance of the Subject Transaction. "Eligible Domestic Inventory" means the collective reference to all Inventory of the Borrower and each Subsidiary Guarantor held for sale, valued at the lowest of the cost, any ceiling prices which may be established by any Law of any Governmental Authority or prevailing market value, all as reduced, without duplication, by the aggregate amount of all reserves, limits and deductions provided for in this definition or in Section 2.1.3 (Borrowing Base); excluding, however, any Inventory which consists of: (a) any Inventory located outside of the United States, (b) any Inventory located outside of a state in which the Agent has properly perfected the Liens of the Agent and the Lenders under this Agreement, free and clear of all other Liens (other than Permitted Liens), (c) any Inventory not in the actual possession of the Borrower or a Subsidiary Guarantor, except to the extent provided in subsection (d) below, (d) any Inventory in the possession of a bailee, warehouseman, consignee or similar third party, except to the extent that either (1) such bailee, warehouseman, consignee or similar third party has entered into an agreement with the Agent in which such bailee, warehouseman, consignee or similar third party consents and agrees to the Lien of the Agent and the Lenders on such Inventory and to such other terms and conditions as may be reasonably required by the Agent, or (2) with respect to any Inventory in the possession of a bailee or warehouseman, the Agent has established a reserve for such Inventory in an amount not greater than three (3) months of any fees or other charges which would be due and payable to any such bailee and warehouseman under its agreements with the Borrower or Subsidiary Guarantor, as appropriate (the Agent 13 agrees to so establish a reserve as shall be appropriate unless otherwise directed by the Borrower), (e) any Inventory located on premises leased or rented to the Borrower or a Subsidiary Guarantor or otherwise not owned by the Borrower or a Subsidiary Guarantor, unless either (i) the Agent has received a waiver and consent from the lessor, landlord and/or owner, in form and substance reasonably satisfactory to the Agent and from any mortgagee of such lessor, landlord or owner to the extent reasonably required by the Agent or (ii) with respect to any such Inventory, the Agent has established a reserve for such Inventory in an amount not greater than three (3) months of any rents or other charges which would be due and payable to any such lessor, landlord or owner under its agreements with the Borrower or Subsidiary Guarantor, as appropriate (the Agent agrees to so establish a reserve as shall be appropriate unless otherwise directed by the Borrower), (f) any Inventory the sale or other disposition of which has given rise to an Account, (g) any Inventory which fails to meet all standards and requirements imposed by any Governmental Authority over such Inventory or its production, storage, use or sale to the extent that the failure to meet any such standards and/or requirements imposed by any Governmental Authority would entitle a purchaser of such Inventory to return the Inventory or otherwise cancel or rescind its purchase or shall otherwise materially impair the value of the Inventory or the ability of the Agent to realize upon the value of the Inventory, (h) work-in-process or supplies, (i) any Inventory as to which the Agent determines in the exercise of its sole and absolute discretion at any time and in good faith (i) is not in merchantable condition or is defective, post-seasonal, slow moving or obsolete and (ii) is unlikely to be sold in the ordinary course of business within a reasonable period of time and on customary terms and conditions, without significant out of the ordinary course discounts or other concessions, (j) any Inventory which the Agent in the good faith exercise of its sole and absolute discretion has deemed to be ineligible because the Agent considers the collateral value to the Agent and the Lenders to be impaired in any material respect or its ability to realize such value to be insecure in any material respect. In the event of any dispute under the foregoing criteria, as to whether Inventory is, or has ceased to be, Eligible Domestic Inventory, the decision of the Agent in the good faith exercise of its sole and absolute discretion shall control. "Eligible Domestic Receivable" and "Eligible Domestic Receivables" mean, at any time of determination thereof, the unpaid portion of each Account (net of, without duplication, any returns, 14 discounts, claims asserted by Account Debtors or other obligors with respect to such Account, credits, charges, accrued rebates or other allowances, offsets, deductions, counterclaims, disputes or other defenses asserted by Account Debtors or other obligors with respect to such Account, and reduced by the aggregate amount of all reserves, limits and deductions expressly provided for in this Agreement), which shall be receivable in United States Dollars by the Borrower or any Subsidiary Guarantor, provided each Account conforms and continues to conform to the following criteria to the reasonable satisfaction of the Agent: (a) the Account arose in the ordinary course of business from a bona fide outright sale of Inventory or from services performed; (b) the Account is a valid, legally enforceable obligation of the Account Debtor; (c) if the Account arises from the sale of Inventory, the Inventory the sale of which gave rise to the account has been shipped or delivered to the Account Debtor on an absolute sale basis and not on a bill and hold sale basis, a consignment sale basis, a guaranteed sale basis, a sale or return basis, or on the basis of any other similar understanding; (d) if the Account arises from the performance of services, such services have been fully rendered; (e) the Account is evidenced by an invoice or other documentation in form reasonably acceptable to the Agent, dated no later than two (2) Business Days after the date of shipment or performance and containing only terms normally offered by the Borrower or the Subsidiary Guarantor, as appropriate; (f) the amount shown on the books of the Borrower or the Subsidiary Guarantor, as appropriate, and on any invoice, certificate, schedule or statement delivered to the Agent is owing to the Borrower or the Subsidiary Guarantor, as appropriate, with any partial payment reducing the amount of the Eligible Domestic Receivable by such partial payment received; (g) the Account is not outstanding more than one hundred twenty (120) days from the date of the invoice therefor or past due more than thirty (30) days after its due date, which shall not be later than ninety (90) days after the invoice date; (h) the Account is not owing by any Account Debtor for which fifty percent (50%) or more of such Account Debtor's other Accounts (or any portion thereof) due to NIM Holdings, Berry UK, the Borrower or any Subsidiary Guarantor, individually, or NIM Holdings, Berry UK, the Borrower and each of the Subsidiary Guarantors collectively, are non-Eligible Domestic Receivables and/or non-Eligible UK Receivables under subsection (g) above; 15 (i) the Account is not owing by an Account Debtor or a group of affiliated Account Debtors whose then existing Accounts owing to the to the Borrower and the Subsidiary Guarantors collectively exceed, in the aggregate, fifteen percent (15%) of the total Eligible Domestic Receivables of the Borrower and all of the Subsidiary Guarantors, except that with respect to Accounts owing by those Account Debtors identified on Schedule 1.1A attached hereto, as updated with the Agent's consent at any time and from time, the Account is not owing by any Account Debtor so named on Schedule 1.1A whose then existing Accounts to the Borrower and the Subsidiary Guarantors, collectively, exceed, in the aggregate, twenty-five percent (25%) of the total Eligible Domestic Receivables of the Borrower and all of the Subsidiary Guarantors. Notwithstanding the foregoing, the Agent and the Lenders agree that the Accounts of any Account Debtor which would otherwise be ineligible solely as a result of this subsection (i) shall not be considered ineligible except to the extent such Accounts, in the aggregate, exceed fifteen percent (15%) of the total Eligible Domestic Receivables (or twenty-five percent (25%) of the total Eligible Domestic Receivables if the Account Debtor is named on Schedule 1.1A. attached hereto and made a part hereof) and such Accounts otherwise satisfy all applicable eligibility criteria; (j) the Account Debtor has not returned, rejected or refused to retain, or otherwise notified the Borrower or any Subsidiary Guarantor of any dispute concerning, or claimed nonconformity of, any of the Inventory or services from the sale or furnishing of which the Account arose; (k) the Account Debtor is not a Subsidiary or Affiliate of NIM Holdings, Berry UK, the Borrower or any Subsidiary Guarantor or an employee, officer, director of shareholder of NIM Holdings, Berry UK, the Borrower or any Subsidiary Guarantor or any Subsidiary or Affiliate of the Borrower or any Subsidiary Guarantor (For purposes of calculating Eligible Domestic Receivables, the term Affiliate shall not include any Affiliate of any stockholder of the Parent); (l) the Account Debtor is not incorporated or organized in or primarily located in any jurisdiction outside of the United States of America or Canada, unless the Account Debtor's obligations with respect to such account are secured by a letter of credit, guaranty or banker's acceptance having terms and from such issuers and confirmation banks as are reasonably acceptable to the Agent in its commercially reasonable discretion (which letter of credit, guaranty or banker's acceptance is subject to an irrevocable assignment of proceeds in favor of the Agent for the benefit of the Lenders ratably and the Agent); (m) the Account Debtor with respect to such Account is not insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action; (n) the Account Debtor is not a Governmental Authority, unless the Borrower or Subsidiary Guarantor, as appropriate, shall 16 have complied to the Agent's satisfaction with the Assignment of Claims Act of 1940, as amended; (o) neither the Borrower nor any of the Subsidiary Guarantors is indebted in any manner to the Account Debtor (as creditor, lessor, supplier otherwise), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor; (p) the Account does not arise from services under or related to any warranty obligation of the Borrower or any Subsidiary Guarantor or out of service charges, finance charges or other fees for the time value of money; (q) the Account is not evidenced by Chattel Paper or an Instrument of any kind and is not secured by any letter of credit, except as permitted under subsection (l) above, unless the original of any such Chattel Paper and/or Instrument has been delivered to the Agent; (r) the title of the Borrower or the Subsidiary Guarantor, as appropriate, to the account is absolute and is not subject to any prior assignment, claim, Lien, or security interest, except Permitted Liens and Liens in favor of the Agent and/or the Lenders; (s) no bond or other undertaking by a guarantor or surety which is not reasonably acceptable to the Agent has been or is required to be obtained, supporting the Account and any of the Account Debtor's obligations in respect of the Account, other than as and to the extent permitted or required under the provisions of subsection (l) above; (t) the Borrower and each Subsidiary Guarantor, as appropriate, have the full and unqualified right and power to assign and grant a security interest in, and Lien on, the Account to the Agent as security and collateral for the payment of the Obligations; (u) the Account does not arise out of a contract with, or order from, an Account Debtor that, by its terms, forbids or makes void or unenforceable in a legally effective manner the assignment or grant of a Lien by the Borrower and each Subsidiary Guarantor, as appropriate, to the Agent, for the benefit of the Lenders ratably and the Agent, of the Account arising from such contract or order; (v) the Account is subject to a Lien in favor of the Agent, for the benefit of the Lenders ratably and the Agent, which Lien constitutes a first priority perfected security interest and Lien, subject only to Permitted Liens; (w) the Inventory giving rise to the Account was not, at the time of the sale thereof, subject to any Lien, except those in favor of the 17 Agent, for the benefit of the Lenders ratably and the Agent and other Permitted Liens; (x) no part of the Account represents a progress billing or a retainage; (y) the Agent in the good faith exercise of its commercially reasonable discretion has not deemed the Account ineligible because of uncertainty in any material respect as to the creditworthiness of the Account Debtor or because the Agent otherwise considers the collateral value of such Account to the Agent and the Lenders to be impaired in any material respect or its ability to realize such value to be insecure in any material respect. In the event of any dispute, under the foregoing criteria, as to whether an account is, or has ceased to be, an Eligible Domestic Receivable, the decision of the Agent in the good faith exercise of its commercially reasonable discretion shall control. "Eligible UK Inventory" means the collective reference to all Inventory of Berry UK and NIM Holdings held for sale, valued at the lowest of the cost, denominated in Sterling, any ceiling prices which may be established by any Law of any Governmental Authority or prevailing market value, all as reduced, without duplication, by the aggregate amount of all reserves, limits and deductions provided for in this definition or in Section 2.6.3 (UK Borrowing Base); excluding, however, any Inventory which consists of: (a) any Inventory located outside of England or Wales, (b) any Inventory on which Bank of America does not have properly perfected the Lien under the UK Security Documents, free and clear of all other Liens (other than Permitted Liens and Liens securing the Obligations), (c) any Inventory which is (i) subject to retention of title by any vendor or (ii) not in the actual possession of NIM Holdings or Berry UK, except to the extent provided in subsection (d) below, (d) any Inventory in the possession of a bailee, warehouseman, consignee or similar third party, except to the extent that either (1) such bailee, warehouseman, consignee or similar third party has entered into an agreement with Bank of America in which such bailee, warehouseman, consignee or similar third party consents and agrees to the Lien of Bank of America on such Inventory and to such other terms and conditions as may be reasonably required by Bank of America, or (2) with respect to any Inventory in the possession of a bailee or warehouseman, Bank of America has established a reserve for such Inventory in an amount not greater than three (3) months of any fees or other charges which would be due and payable to any such bailee and warehouseman under its agreements with NIM Holdings or Berry UK (Bank of America agrees to so establish a reserve as shall be appropriate unless otherwise directed by NIM Holdings or Berry UK), 18 (e) any Inventory located on premises leased or rented to NIM Holdings or Berry UK or otherwise not owned by NIM Holdings or Berry UK, unless either (i) Bank of America has received a waiver and consent from the lessor, landlord and/or owner, in form and substance reasonably satisfactory to Bank of America and from any mortgagee of such lessor, landlord or owner to the extent reasonably required by Bank of America or (ii) with respect to any such Inventory, Bank of America has established a reserve for such Inventory in an amount not greater than three (3) months of any rents or other charges which would be due and payable to any such lessor, landlord or owner under its agreements with NIM Holdings or Berry UK (Bank of America agrees to so establish a reserve as shall be appropriate unless otherwise directed by NIM Holdings or Berry UK), (f) any Inventory the sale or other disposition of which has given rise to an Account, (g) any Inventory which fails to meet all standards and requirements imposed by any Governmental Authority over such Inventory or its production, storage, use or sale to the extent that the failure to meet any such standards and/or requirements imposed by any Governmental Authority would entitle a purchaser of such Inventory to return the Inventory or otherwise cancel or rescind its purchase or shall otherwise materially impair the value of the Inventory or the ability of Bank of America to realize upon the value of the Inventory, (h) work-in-process or supplies, (i) any Inventory as to which Bank of America determines in the exercise of its sole and absolute discretion at any time and in good faith (i) is not in merchantable condition or is defective, post-seasonal, slow moving or obsolete and (ii) is unlikely to be sold in the ordinary course of business within a reasonable period of time and on customary terms and conditions, without significant out of the ordinary course discounts or other concessions, (j) any Inventory which Bank of America in the good faith exercise of its sole and absolute discretion has deemed to be ineligible because Bank of America considers the collateral value to Bank of America to be impaired in any material respect or its ability to realize such value to be insecure in any material respect. In the event of any dispute under the foregoing criteria, as to whether Inventory is, or has ceased to be, Eligible UK Inventory, the decision of Bank of America in the good faith exercise of its sole and absolute discretion shall control. "Eligible UK Receivable" and "Eligible UK Receivables" mean, at any time of determination thereof, the unpaid portion of each Account (net of, without duplication, any returns, 19 discounts, claims asserted by Account Debtors or other obligors with respect to such Account, credits, charges, accrued rebates or other allowances, offsets, deductions, counterclaims, disputes or other defenses asserted by Account Debtors or other obligors with respect to such Account, and reduced by the aggregate amount of all reserves, limits and deductions expressly provided for in this Agreement), which shall be receivable in Sterling by NIM Holdings or Berry UK, provided each Account conforms and continues to conform to the following criteria to the reasonable satisfaction of Bank of America: (a) the Account arose in the ordinary course of business from a bona fide outright sale of Inventory or from services performed; (b) the Account is a valid, legally enforceable obligation of the Account Debtor; (c) if the Account arises from the sale of Inventory, the Inventory the sale of which gave rise to the account has been shipped or delivered to the Account Debtor on an absolute sale basis and not on a bill and hold sale basis, a consignment sale basis, a guaranteed sale basis, a sale or return basis, or on the basis of any other similar understanding; (d) if the Account arises from the performance of services, such services have been fully rendered; (e) the Account is evidenced by an invoice or other documentation in form reasonably acceptable to Bank of America, dated no later than two (2) Business Days after the date of shipment or performance and containing only terms normally offered by NIM Holdings or Berry UK; (f) the amount shown on the books of NIM Holdings or Berry UK, as appropriate, and on any invoice, certificate, schedule or statement delivered to Bank of America is owing to NIM Holdings or Berry UK, as appropriate, with any partial payment reducing the amount of the Eligible UK Receivable by such partial payment received; (g) the Account is not outstanding more than one hundred twenty (120) days from the date of the invoice therefor or past due more than thirty (30) days after its due date, which shall not be later than ninety (90) days after the invoice date; (h) the Account is not owing by any Account Debtor for which fifty percent (50%) or more of such Account Debtor's other Accounts (or any portion thereof) due to NIM Holdings and/or Berry UK, individually, or NIM Holdings and Berry UK collectively, are non-Eligible UK Receivables under subsection (g) above; (i) the Account is not owing by an Account Debtor or a group of affiliated Account Debtors whose then existing Accounts owing to NIM Holdings and/or Berry UK collectively exceed, in the aggregate, fifteen percent 20 (15%) of the total Eligible UK Receivables of NIM Holdings and Berry UK, except that with respect to Accounts owing by those Account Debtors identified on Schedule 1.1A attached hereto, as updated with the consent of Bank of America at any time and from time to time, the Account is not owing by any Account Debtor so named on Schedule 1.1A whose then existing Accounts to NIM Holdings and/or Berry UK, collectively, exceed, in the aggregate, twenty-five percent (25%) of the total Eligible UK Receivables of NIM Holdings and Berry UK. Notwithstanding the foregoing, the Agent and the Lenders agree that the Accounts of any Account Debtor which would otherwise be ineligible solely as a result of this subsection (i) shall not be considered ineligible except to the extent such Accounts, in the aggregate, exceed fifteen percent (15%) of the total Eligible UK Receivables (or twenty-five percent (25%) of the total Eligible UK Receivables if the Account Debtor is named on Schedule 1.1A. attached hereto and made a part hereof) and such Accounts otherwise satisfy all applicable eligibility criteria; (j) the Account Debtor has not returned, rejected or refused to retain, or otherwise notified NIM Holdings or Berry UK of any dispute concerning, or claimed nonconformity of, any of the Inventory or services from the sale or furnishing of which the Account arose; (k) the Account Debtor is not a Subsidiary or Affiliate of NIM Holdings, Berry UK, the Borrower or any Subsidiary Guarantor or an employee, officer, director of shareholder of NIM Holdings, Berry UK, the Borrower or any Subsidiary Guarantor or any Subsidiary or Affiliate of NIM Holdings, Berry UK, the Borrower or any Subsidiary Guarantor (For purposes of calculating Eligible Domestic Receivables and Eligible UK Receivables, the term Affiliate shall not include any Affiliate of any stockholder of the Parent); (l) the Account Debtor is not incorporated or organized in, or primarily located in, any jurisdiction outside of the United Kingdom, unless the Account Debtor's obligations with respect to such account are secured by a letter of credit, guaranty or banker's acceptance having terms and from such issuers and confirmation banks as are reasonably acceptable to Bank of America in its commercially reasonable discretion (which letter of credit, guaranty or banker's acceptance is subject to an irrevocable assignment of proceeds in favor of Bank of America); (m) the Account Debtor with respect to such Account is not insolvent or the subject of any bankruptcy or insolvency proceedings of any kind or of any other proceeding or action; (n) the Account Debtor is not a Governmental Authority, unless NIM Holdings shall have complied to the satisfaction of Bank of America with the applicable Laws, if any, governing the creation and perfection of Liens in such Accounts 21 (o) Neither NIM Holdings nor Berry UK is indebted in any manner to the Account Debtor (as creditor, lessor, supplier otherwise), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor; (p) the Account does not arise from services under or related to any warranty obligation of NIM Holdings or Berry UK or out of service charges, finance charges or other fees for the time value of money; (q) the Account is not evidenced by Chattel Paper or an Instrument of any kind and is not secured by any letter of credit, except as permitted under subsection (l) above, unless the original of any such Chattel Paper and/or Instrument has been delivered to Bank of America; (r) the title of NIM Holdings or Berry UK, as appropriate, to the Account is absolute and is not subject to any prior assignment, claim, Lien, or security interest, except Permitted Liens and Liens in favor of Bank of America and Liens securing the Obligations; (s) no bond or other undertaking by a guarantor or surety which is not reasonably acceptable to Bank of America has been or is required to be obtained, supporting the Account and any of the Account Debtor's obligations in respect of the Account, other than as and to the extent permitted or required under the provisions of subsection (l) above; (t) NIM Holdings or Berry UK has the full and unqualified right and power to assign and grant a security interest in, and Lien on, the Account to Bank of America as security and collateral for the payment of the UK Obligations; (u) the Account does not arise out of a contract with, or order from, an Account Debtor that, by its terms, forbids or makes void or unenforceable in a legally effective manner the assignment or grant of a Lien by NIM Holdings or Berry UK to Bank of America of the Account arising from such contract or order; (v) the Account is subject to a Lien in favor of Bank of America, which Lien constitutes a first priority perfected security interest and Lien, subject only to Permitted Liens; (w) the Inventory giving rise to the Account was not, at the time of the sale thereof, subject to any Lien, except those in favor of Bank of America and other Permitted Liens; (x) no part of the Account represents a progress billing or a retainage; 22 (y) Bank of America in the good faith exercise of its commercially reasonable discretion has not deemed the Account ineligible because of uncertainty in any material respect as to the creditworthiness of the Account Debtor or because Bank of America otherwise considers the collateral value of such Account to be impaired in any material respect or its ability to realize such value to be insecure in any material respect. In the event of any dispute, under the foregoing criteria, as to whether an account is, or has ceased to be, an Eligible UK Receivable, the decision of Bank of America in the good faith exercise of its commercially reasonable discretion shall control. "Enforcement Costs" means all commercially reasonable expenses, charges, costs and fees whatsoever (including, without limitation, reasonable outside and allocated in-house counsel attorney's fees and expenses) of any nature whatsoever reasonably paid or incurred by or on behalf of the Agent and/or any of the Lenders in connection with (a) any or all of the Obligations, this Agreement and/or any of the other Financing Documents and (b) the creation, perfection, collection, maintenance, preservation, defense, protection, realization upon, disposition, sale or enforcement of all or any part of the Collateral, this Agreement or any of the other Financing Documents, including, without limitation, those costs and expenses more specifically enumerated in Section 3.8 (Costs) and Section 9.10 (Enforcement Costs). The Lenders agree that the Borrower shall have no obligation to reimburse any Lender, other than the Agent, for legal fees and expenses incurred by such Lender in connection with its review, execution and delivery of any of the Financing Documents, to the extent such legal fees and expenses exceed Five Thousand Dollars ($5,000). "Equipment" means all equipment, machinery, computers, chattels, tools, parts, machine tools, furniture, furnishings, fixtures and supplies of every nature, presently existing or hereafter acquired or created and wherever located, whether or not the same shall be deemed to be affixed to real property, together with all accessions, additions, fittings, accessories, special tools, and improvements thereto and substitutions therefor and all parts and equipment which may be attached to or which are necessary or beneficial for the operation, use and/or disposition of such personal property, all licenses, warranties, franchises and general intangibles related thereto or necessary or beneficial for the operation, use and/or disposition of the same, together with all Accounts, Chattel Paper, Instruments and other consideration received by NIM Holdings, Berry UK, the Borrower or any Subsidiary Guarantor on account of the sale, lease or other disposition of all or any part of the foregoing, and together with all rights under or arising out of present or future Documents and contracts relating to the foregoing and all proceeds (cash and non-cash) of the foregoing. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "Event of Default" has the meaning described in ARTICLE VII (Default and Rights and Remedies). "Excess Cash Flow" means for any annual period of determination thereof and with respect to the Borrower and the Subsidiary Guarantors only and not including Berry UK or NIM 23 Holdings, an amount equal to fifty percent (50%) of the sum of (a) EBITDA, less (b) non-financed Capital Expenditures permitted by Section 6.2.6 (Capital Expenditures), less (c) cash income Taxes and alternative minimum Taxes, less (d) increases in working capital, plus (e) decreases in working capital, less (f) Debt Service, as shown on the annual financial statements for such annual period, furnished to the Agent in accordance with Section 6.1.1 (Financial Statements); or in the event that the Borrower fails to deliver such financial statements to the Agent as and when required, the Agent shall estimate, in its sole, but commercially reasonable discretion, the amount of Excess Cash Flow for such period. "Federal Funds Rate" means for any day of determination, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day) by the Federal Reserve Bank for the next preceding Business Day) by the Federal Reserve Bank of Richmond or, if such rate is not so published for any day that is a Business Day, the average of quotations for such day on such transactions received by the Agent from three (3) Federal funds brokers of recognized standing selected by the Agent. "Fees" means the collective reference to each fee payable to the Agent, for its own account or for the ratable benefit of the Lenders, under the terms of this Agreement or under the terms of any of the other Financing Documents, including, without limitation, the Agency Fees, the Revolving Credit Unused Line Fees, the Letter of Credit Fees, the Letter of Credit Fronting Fees, the Bond Letter of Credit Fees, the Bond Letter of Credit Fronting Fees, the Term Loan B Fees, the Field Examination Fees, the Commitment Fee, the Consent Fee, and the UK Revolving Credit Facility Fees. "Field Examination Fee" and "Field Examination Fees" have the meanings described in Section 2.10.3 (Field Examination Fees). "Financing Documents" means at any time collectively this Agreement, the Notes, the Security Documents, the Letter of Credit Documents, the Bond Letter of Credit Agreement Documents, the UK Security Documents, and any other instrument, agreement or document previously, simultaneously or hereafter executed and delivered by the Borrower, any Subsidiary Guarantor, Berry UK, NIM Holdings and/or any other Person, singly or jointly with another Person or Persons, evidencing, securing, guarantying or in connection with this Agreement, any Note, any of the Security Documents, any of the Credit Facilities, any of the UK Security Documents and/or any of the Obligations, all as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "First Closing Date" means January 21, 1997. "Fixed or Capital Assets" of a Person at any date means all assets which would, in accordance with GAAP consistently applied, be classified on the balance sheet of such Person as property, plant or equipment at such date. "Fixed Charges" means as to the Borrower, Berry UK, NIM Holdings and each of the Subsidiary Guarantors, on a consolidated basis, for any period of determination, the scheduled 24 payments of principal and cash interest on account of all Indebtedness for Borrowed Money and on account of all Capital Leases, plus cash income Taxes, plus cash dividends declared or paid. "Fixed Charge Coverage Ratio" means for any period of determination with respect to the Borrower and the Subsidiary Guarantors, on a consolidated basis, the ratio of (a) EBITDA, less the aggregate amount of all non-financed Capital Expenditures for such period, plus the sum of the following (1) all cash proceeds from Permitted Asset Dispositions to the extent reinvested into Fixed or Capital Assets if and to the extent permitted by the provisions of this Agreement and (2) eighty percent (80%) of the Capital Expenditures related specifically to the plant expansion project for NIM Holdings up to a maximum of Two Million Dollars ($2,000,000), to (b) Fixed Charges. "Fixed Charge Coverage Ratio" means for any period of determination with respect to NIM Holdings and Berry UK only, the ratio of (a) their respective EBITDA, less the aggregate amount of all of their non-financed Capital Expenditures for such period up to four percent (4%) of its annual sales for fiscal year 2000 only, to (b) Fixed Charges. "Funded Debt" means as to the Borrower, Berry UK, NIM Holdings and each of the Subsidiary Guarantors, on a consolidated basis, as of any date of determination, (a) the aggregate of all Indebtedness for Borrowed Money of the Borrower, Berry UK, NIM Holdings and each of the Subsidiary Guarantors, whether secured or unsecured (but excluding, without duplication, loans by the Borrower to one or more of the Subsidiary Guarantors, Berry UK or NIM Holdings), having a final maturity (or which by the terms thereof is renewable or extendible at the option of the obligor for a period ending) more than a year after that date, including current maturities of long-term Indebtedness for Borrowed Money (as determined in accordance with GAAP), less (b) the aggregate amount of all cash balances and Cash Equivalents of the Borrower, Berry UK, NIM Holdings and/or any of the Subsidiary Guarantors. "GAAP" means generally accepted accounting principles in the United States of America in effect from time to time, except that with respect to Berry UK and NIM Holdings, GAAP means generally accepted accounting principles in the United Kingdom in effect from time to time. Notwithstanding the foregoing, with respect to (i) any financial statements which consolidate Berry UK and/or NIM Holdings with the Borrower or any other Subsidiary Guarantor or (ii) any financial covenant relating to Berry UK, NIM Holdings, the Borrower and/or any Subsidiary Guarantor on a consolidated basis, GAAP shall mean generally accepted accounting principles in the United States of America in effect from time to time. "General Intangibles" means all general intangibles of every nature, whether presently existing or hereafter acquired or created, and without implying any limitation of the foregoing, further means all books and records, claims (including without limitation all claims for income tax and other refunds), choses in action, claims, causes of action in tort or equity, contract rights, judgments, customer lists, Patents, Trademarks, licensing agreements, rights in intellectual property, goodwill (including goodwill of the business of the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor symbolized by and associated with any and all Trademarks, trademark licenses, Copyrights and/or service marks), royalty payments, licenses, rights as lessee under any lease of real or personal property, literary rights, Copyrights, service names, service marks, logos, trade secrets, amounts received as an award in or settlement of a suit in damages, deposit accounts, interests in joint ventures, general or limited partnerships, or limited liability companies or partnerships, rights in applications for any of the foregoing, books 25 and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to any or all of the foregoing and all general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all proceeds (cash and non-cash) of the foregoing. "Governmental Authority" means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any department, agency or instrumentality thereof. "Guarantor" means the Parent or any Subsidiary Guarantor or their respective successors and assigns, as the case may be; and "Guarantors" means the Parent, each and every Subsidiary Guarantor, and each of their respective successors and assigns. "Guaranty" means collectively each guaranty of payment for the benefit of the Lenders ratably and the Agent from any or all of the Guarantors or NIM Holdings, including, without limitation, the UK Credit Facilities Guaranty, as the same may from time to time be amended, restated, supplemented or otherwise modified. "Hazardous Materials" means (a) any "hazardous waste" as defined by the Resource Conservation and Recovery Act of 1976, as amended from time to time, and regulations promulgated thereunder; (b) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, and regulations promulgated thereunder; (c) any substance the presence of which on any property now or hereafter owned, acquired or operated by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor is prohibited by any Law similar to those set forth in this definition; and (d) any other substance which by Law requires special handling in its collection, storage, treatment or disposal. "Hazardous Materials Contamination" means the contamination (whether presently existing or occurring after the date of this Agreement) by Hazardous Materials of any property owned, operated or controlled by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor or for which the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor has responsibility, including, without limitation, improvements, facilities, soil, ground water, air or other elements on, or of, any property now or hereafter owned, acquired or operated by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor, and any other contamination by Hazardous Materials for which the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor is, or is claimed to be, responsible. "Indebtedness" of a Person means at any date the total liabilities of such Person at such time determined in accordance with GAAP consistently applied. "Indebtedness for Borrowed Money" of a Person means at any time the sum at such time of (a) Indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (b) any obligations of such Person in respect of letters of credit, banker's or other acceptances or similar obligations issued or created for the account of such Person, (c) Lease Obligations of such Person with respect to Capital Leases, (d) all liabilities secured by any 26 Lien on any property owned by such Person, to the extent attached to such Person's interest in such property, even though such Person has not assumed or become personally liable for the payment thereof, (e) obligations of third parties which are being guarantied or indemnified against by such Person or which are secured by the property of such Person; (f) any obligation of such Person or a Commonly Controlled Entity to a Multi-employer Plan; and (h) any obligations, liabilities or indebtedness, contingent or otherwise, under or in connection with, any interest rate or currency swap agreements, cap, floor, and collar agreements, currency spot, foreign exchange and forward contracts and other similar agreements and arrangements; but excluding trade and other accounts payable in the ordinary course of business in accordance with customary trade terms and which are not more than thirty (30) days past due (as determined in accordance with customary trade practices) or which are being disputed in good faith by such Person and for which adequate reserves are being provided on the books of such Person in accordance with GAAP. "Indenture" means collectively (i) that certain indenture dated as of April 21, 1994 by and between the Borrower and the United States Trust Company of New York, as trustee, entered into in connection with the Subordinated Debt, (ii) that certain indenture dated as of August 24, 1998 by and between the Borrower and the United States Trust Company of New York, as trustee, with respect to the Additional Subordinated Debt, and (iii) that certain indenture dated as of July 6, 1999 by and between the Borrower and the United States Trust Company of New York, as trustee, entered into in connection with the Additional Subordinated Debt (Cardinal), each as the same may be amended, restated supplemented or otherwise modified. "Installment Payment Date" means the first day of each calendar month of each calendar year commencing as of July 1, 2000. "Instrument" means a negotiable instrument (as defined under Article 3 of the Uniform Commercial Code), a "certificated security" (as defined under Article 8 of the Uniform Commercial Code), or any other writing which evidences a right to payment of money and is not itself a security agreement or lease and is of a type which is in the ordinary course of business transferred by delivery with any necessary endorsement. "Interest Coverage Ratio" means as to the Borrower, Berry UK, NIM Holdings and each of the Subsidiary Guarantors, on a consolidated basis, for any period of determination thereof the ratio of (a) EBITDA to (b) cash interest expense, all determined on a consolidated basis in accordance with GAAP consistently applied. "Interest Period" means a Dollar Interest Period or a Sterling Interest Period, as applicable. "Interest Rate Election Notice" has the meaning described in Section 2.9.2(e) (Selection of Interest Rates). "Interest Rate/Currency Protection Agreement" means, for any Person, interest rate swap, cap, floor or collar agreements, currency agreements, currency spot, foreign exchange and forward contracts or similar arrangement between such Person and one or more financial institutions 27 providing for the transfer or mitigation of interest or currency risks either generally or under specific contingencies. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from time to time, and the Income Tax Regulations issued and proposed to be issued thereunder. "Inventory" means all now owned and hereafter acquired inventory, goods, merchandise and other personal property furnished under any contract of service or intended for sale or lease, including, without limitation, all raw materials, work-in-progress, finished goods and materials and supplies of any kind, nature or description which are used or consumed in the business, or are or might be used in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods, merchandise and other licenses, warranties, franchises, general intangibles, personal property and all Documents or documents relating to the same and all proceeds (cash and non-cash) of the foregoing. "Item of Payment" means each check, draft, cash, money, instrument, item, and other remittance in payment or on account of payment of any Collateral, including, without limitation, cash proceeds of any returned, rejected or repossessed goods, the sale or lease of which gave rise to an Account, and other proceeds of Collateral; and "Items of Payment" means the collective reference to all of the foregoing. "Knight" means Knight Plastics, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Laws" means all ordinances, statutes, rules, regulations, orders, injunctions, writs, or decrees of any Governmental Authority or political subdivision or agency thereof, or any court or similar entity established by any thereof. "Lease Obligations" of a Person means for any period the rental commitments of such Person for such period under leases for real and/or personal property. "Lending Office" means a Dollar LIBOR Lending Office or a Sterling LIBOR Lending Office, as applicable. "Letter of Credit" and "Letters of Credit" shall have the meanings described in Section 2.4.1 (Letters of Credit). "Letter of Credit Agreement" means the collective reference to each letter of credit application and agreement substantially in the form of the Agent's then standard form of application for letter of credit or such other form as may be approved by the Agent, executed and delivered by the Borrower in connection with the issuance of a Letter of Credit (other than any of the Bond Letters of Credit), as the same may from time to time be amended, restated, supplemented or modified; and "Letter of Credit Agreements" means all of the foregoing in effect at any time and from time to time. The Agent and the Lenders agree that if the provisions of any Letter of Credit Agreement conflict with the provisions of this Agreement, the provisions of this Agreement shall control. 28 "Letter of Credit Commitment" means the agreement of the Agent relating to the issuance of the Letters of Credit and the agreement of a Lender to purchase a participating interest in any Letter of Credit Obligations with respect to such Letters of Credit, all subject to and in accordance with the provisions of this Agreement; and "Letter of Credit Commitments" means the collective reference to the Letter of Credit Commitment of the Agent and each of the Lenders. "Letter of Credit Committed Amount" has the meaning given such term in Section 2.4.1 (Letters of Credit). "Letter of Credit Documents" means any and all drafts under or purporting to be under a Letter of Credit, any Letter of Credit Agreement, and any other instrument, document or agreement executed and/or delivered by the Borrower or any other Person under, pursuant to or in connection with a Letter of Credit or any Letter of Credit Agreement. "Letter of Credit Facility" means the facility established pursuant to Section 2.4 (Letter of Credit Facility). "Letter of Credit Fee" and "Letter of Credit Fees" have the meanings described in Section 2.4.2 (Letter of Credit Fees). "Letter of Credit Fronting Fee" and "Letter of Credit Fronting Fees" have the meanings described in Section 2.4.2 (Letter of Credit Fees). "Letter of Credit Obligations" means the collective reference to all Obligations of the Borrower with respect to the Letters of Credit and the Letter of Credit Agreements. "Liabilities" means at any date all liabilities that in accordance with GAAP consistently applied should be classified as liabilities on a consolidated balance sheet of the Borrower and its Subsidiaries. "LIBOR Base Rate" means the Dollar LIBOR Base Rate or the Sterling LIBOR Base Rate, as applicable. "LIBOR Loan" means a Dollar LIBOR Loan or a Sterling LIBOR Loan, as applicable. "LIBOR Rate" means the Dollar LIBOR Rate or the Sterling LIBOR Rate, as applicable. "Lien" means any mortgage, deed of trust, deed to secure debt, grant, pledge, security interest, assignment, encumbrance, lien, hypothecation, or charge of any kind, whether perfected or unperfected, avoidable or unavoidable, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of any financing statement under the Uniform Commercial Code of any jurisdiction, excluding the precautionary filing of any financing statement by any lessor in a true lease transaction, by any bailor in a true bailment transaction or by any consignor in a true consignment transaction under the Uniform Commercial Code of any jurisdiction or the agreement to give any financing statement by any lessee in a true lease transaction, by any bailee in a true bailment transaction or by any consignee in a true consignment transaction. 29 "Loan" means each of the Revolving Loan, a Term Loan A, a Term Loan B, the UK Revolving Loan, or a UK Term Loan, as the case may be, and "Loans" means the collective reference to the Revolving Loan, the Term Loans A, the Term Loans B, the UK Revolving Loan and the UK Term Loans. "Loan Notice" has the meaning described in Section 2.1.2 (Procedure for Making Advances). "Lockbox" has the meaning described in Section 2.1.8 (The Collateral Account). "Mandatory Liquid Assets Cost Rate" means with respect to each Interest Period for which the Applicable Interest Rate is the LIBOR Rate the rate per annum conclusively determined by Bank of America on the first day of such Interest Period to be that which expresses the prevailing cost to Bank of America of complying with the requirements for the time being of the Bank of England in respect of liquidity, reserve assets and special deposits. "Multi-employer Plan" means a Plan that is a multi-employer plan as defined in Section 4001(a)(3) of ERISA. "Net Outstandings" of any Lender means, at any time, the sum of (a) all amounts paid by such Lender (other than pursuant to Section 8.5 (Indemnification)) to the Agent in respect to the Revolving Loan or otherwise under this Agreement, minus (b) all amounts paid by the Agent to such Lender which are received by the Agent and which, pursuant to this Agreement, are paid over to such Lender for application in reduction of the outstanding principal balance of the Revolving Loan. "Net Casualty Proceeds", when used with respect to any condemnation awards or insurance proceeds allocable to any Collateral, means the gross proceeds from any casualty or condemnation remaining after payment of all expenses (including attorneys' fees) incurred in the collection of such gross proceeds and Taxes payable in connection therewith. "Net Proceeds" means gross proceeds (cash and non-cash) or other consideration paid to, or received by, the Borrower, NIM Holdings or any Subsidiary of the Borrower from (a) any Asset Disposition (including, without limitation, issuance or assumption of Indebtedness or the issuance of Securities), net of customary and reasonable settlement costs, fees, expenses and Taxes payable in connection with such Asset Disposition or (b) any sale, issuance or other offering of Indebtedness or Securities, net of customary and reasonable closing costs, fees and expenses. "Nevada Bond Letter of Credit" means that certain irrevocable letter of credit issued by the Agent for the account of the Borrower in the original stated amount of $6,271,233, for the benefit of the Manufacturers and Traders Trust Company, as Trustee, and as security for the Nevada Bonds, as the same may be amended, restated, reissued, renewed, supplemented, replaced or otherwise modified at any time and from time to time. "Nevada Bond Letter of Credit Agreement" means that certain letter of credit reimbursement agreement by and between the Agent and the Borrower pursuant to which the Borrower will agree to reimburse the Agent for any amounts drawn under the Nevada Bond Letter of Credit and to pay certain fees, interest and other amounts payable to the Agent with respect to the Nevada Bond Letter of Credit, as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "Nevada Bond Letter of Credit Agreement Documents" means all instruments, agreements or documents previously, simultaneously or hereafter executed and delivered by the Borrower, any Guarantor and/or any other Person, singly or jointly with another Person or Persons, evidencing, securing, guarantying or in connection with the Nevada Bond 30 Letter of Credit, and/or any or all of the Nevada Bonds, all as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "Nevada Bond Letter of Credit Obligations" means the collective reference to all Obligations of the Borrower under and with respect to the Nevada Letter of Credit, the Nevada Bond Letter of Credit Agreement, and/or any of the Nevada Bond Letter of Credit Agreements. "Nevada Bond Trust Agreement" means that certain trust indenture dated as of April 1, 1991 by and between the Nevada Trustee and The City of Henderson, Nevada Public Improvement Trust, relating to the Nevada Bonds, as amended, restated, supplemented or otherwise modified at any time and from time to time. "Nevada Bond Trustee" means Manufacturers and Traders Trust Company, and its successors and assigns, as trustee under the Nevada Bond Trust Agreement. "Nevada Bonds" means the City of Henderson, Nevada Public Improvement Trust Variable Rate Demand Refunding Bonds (Berry Plastics Corporation Project), Series 1991, issued by the City of Henderson Nevada Public Improvement Trust in the original aggregate principal amount of Eight Million Dollars ($8,000,000). "NIM Holdings" means NIM Holdings Limited, a company organized and existing under the laws of England, and its successors and assigns. "Non-Ratable Loan" means an advance under the Revolving Loan made by the Agent in accordance with the provisions of Section 2.11.3(c) (Settlement Procedures as to Revolving Loan). "Note" means any Revolving Credit Note, any Term Loan A Note, any Term Loan B Note, the UK Revolving Credit Note, or the UK Term Note, as the case may be, and "Notes" means collectively each Revolving Credit Note, each Term Loan A Note, each Term Loan B Note, the UK Revolving Credit Note, the UK Term Note, and any other promissory note which may from time to time evidence all or any portion of the Obligations. "Obligations" means and includes all present and future indebtedness, obligations, and liabilities, whether now existing or contemplated or hereafter arising, of the Borrower, NIM Holdings and/or Berry UK to the Lenders, Bank of America with respect to the UK Obligations, and/or the Agent under, arising pursuant to, in connection with and/or on account of the provisions of this Agreement, each Note, each Security Document, and/or any of the other Financing Documents, the Loans, and/or any of the Credit Facilities including, without limitation, the principal of, and interest on, each Note, late charges, the Fees, Enforcement Costs, 31 and prepayment fees (if any), letter of credit fees or fees charged with respect to any guaranty of any letter of credit; also means and includes all other present and future indebtedness, liabilities and obligations, whether now existing or contemplated or hereafter arising, of the Borrower, Berry UK, NIM Holdings and/or any Subsidiary Guarantor to the Agent and/or to any Lender any/or any of its or their Affiliates under or in connection with, any Interest Rate/Currency Protection Agreements; and also means any and all renewals, extensions, substitutions, amendments, restatements and rearrangements of any such debts, obligations and liabilities. FOR PURPOSES OF THE INDENTURE, ALL OBLIGATIONS UNDER AND IN CONNECTION WITH THE CREDIT FACILITIES CONSTITUTE AND ARE HEREBY DEEMED "DESIGNATED SENIOR INDEBTEDNESS" AS DEFINED IN THE INDENTURE. "Outstanding Bond Letter of Credit Obligations" has the meaning described in Section 2.5.3 (Terms of Bond Letters of Credit). "Outstanding Letter of Credit Obligations" has the meaning described in Section 2.4.3 (Terms of Letters of Credit). "PackerWare" means PackerWare Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Parent" means BPC Holding Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Patents" means and includes, in each case whether now existing or hereafter arising, all of the rights, title and interest of the Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor in and to (a) any and all patents and patent applications, (b) any and all inventions and improvements described and claimed in such patents and patent applications, (c) reissues, divisions, continuations, renewals, extensions and continuations-in-part of any patents and patent applications, (d) income, royalties, damages, claims and payments now or hereafter due and/or payable under and with respect to any patents or patent applications, including, without limitation, damages and payments for past and future infringements, (e) rights to sue for past, present and future infringements of patents, and (f) all rights corresponding to any of the foregoing throughout the world. "PBGC" means the Pension Benefit Guaranty Corporation. "Permitted Acquisition" means the acquisition or purchase of, or investment in, any Person, any operating division or unit of any Person, or the capital stock or Assets of any Person or the combination with any Person by the Borrower or any Subsidiary Guarantor (each individually, a "Subject Transaction") regardless of the structure of the Subject Transaction, engaged principally in the lines of business set forth in Section 6.1.7 (Line of Business); provided, however that: (i) the aggregate purchase price of, investment in, acquisition expenditures relating to (excluding customary and reasonable transaction costs) and assumed Liabilities in connection with any such Subject Transaction shall not exceed at any time or in any circumstance the lesser of: 32 (1) the product of (A) the actual EBITDA for (x) the Person which is the target of such Subject Transaction or (y) the seller or the division of the seller of the assets which is the target of such Subject Transaction, as applicable, for the then preceding twelve (12) month period after giving effect to such Subject Transaction (subject to such pro-forma adjustments as shall be reasonably acceptable to the Agent in its sole and absolute discretion), and (B) 5, or (2) Twenty Million Dollars ($20,000,000), (ii) the aggregate purchase prices of, investments in, acquisition expenditures relating to (excluding customary and reasonable transaction costs) and assumed Liabilities in connection with all Subject Transactions made on or after the Closing Date, excluding the Poly-Seal Stock Purchase Transaction, shall not exceed Thirty Million Dollars ($30,000,000), (iii) such Subject Transaction shall not otherwise constitute or give rise to a Default or an Event of Default, (iv) the Borrower shall have furnished financial projections in form and content reasonably acceptable to the Agent which give effect to such Subject Transaction and which project that such Subject Transaction would not cause a Default or Event of Default (provided that the Agent and the Lenders agree that such projections shall not constitute a guaranty of actual performance), (v) if requested by the Agent or the Requisite Lenders, a Phase I environmental assessment of any real property to be acquired or purchased or owned by any Person to be acquired or purchased or owned by any Person in which the Borrower or any Subsidiary intends to make an investment, has been performed by a reputable and recognized environmental consulting firm engaged by the Borrower and reasonably acceptable to the Agent and has revealed no material Hazardous Materials Contamination or material violations of any Environmental Laws, the non-remediation of or non-compliance with which would result in a material Liability not reflected in the purchase price, (vi) if and to the extent the Subject Transaction consists of the purchase or acquisition of a Person which is to be a Subsidiary of the Borrower or merged into a Subsidiary of the Borrower created for the express purpose of consummating the proposed acquisition: (1) the Borrower shall execute all documents and take such other actions as the Agent may reasonably require to grant to the Agent and the Lenders a first priority Lien on one hundred percent (100%) of the stock of such Subsidiary (except that with respect to the formation of a foreign Subsidiary, the Borrower shall be required only to pledge sixty-five percent (65%) 33 of the stock of such foreign Subsidiary, as security for all of the Obligations, excluding those Obligations made available to such foreign Subsidiary (or any Subsidiary thereof), and to pledge one hundred percent (100%) of the stock of such foreign Subsidiary, as security for all of Obligations made available to such foreign Subsidiary (or any Subsidiary thereof), which one hundred percent (100%) pledge shall reduce to sixty-five percent (65%) at such time as all obligations under the Subordinated Debt have been paid in full), and (2) such Subsidiary shall be designated and qualify immediately after the closing of the Subject Transaction as a Subsidiary Guarantor in accordance with the terms of Section 6.2.2 (Subsidiaries), except that neither Berry UK nor NIM Holdings shall be designated or required to qualify as a Subsidiary Guarantor, (vii) after giving effect to any borrowings under the Revolving Loan, if any, needed to finance the Subject Transaction, the Borrower and the Subsidiary Guarantors shall have availability under the Revolving Loan or, with respect to the Poly-Seal Stock Purchase Transaction only, unused availability under the Borrowing Base in an amount at least equal to Twenty Million Dollars ($20,000,000), if higher, and are reasonably expected to have such minimum availability for a period of ten (10) Business Days after closing and consummation of the Subject Transaction, (viii) all legal matters incident to the Subject Transaction shall be acceptable to the Agent in its reasonable discretion, (ix) the Agent shall have been given no less than thirty (30) days prior written notice of any proposed Subject Transaction and shall have been provided with all information which it may have reasonably requested in connection with such proposed Subject Transaction, (x) if requested by the Agent, the Agent shall have received, prior to or simultaneously with the closing of a Subject Transaction, an opinion of counsel reasonably acceptable to the Agent in all respects covering the Borrower's or the relevant Subsidiary's, as the case may be, due incorporation, valid existence, good standing and power and authority to enter into the documents contemplated by this Agreement and the Subject Transaction and such other matters as may be reasonably requested by the Agent, (xi) unless otherwise agreed by the Requisite Lenders, no Subject Transaction shall be permitted by the terms of this Agreement if the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis and taken as a whole, have had, immediately prior 34 to the date of the closing of such Subject Transaction, three (3) consecutive months of net operating losses, and (xii) the aggregate purchase price of, investment in, acquisition expenditures relating to (excluding customary and reasonable transaction costs) and assumed Liabilities in connection with all Subject Transactions in any fiscal year shall not exceed Twenty Million Dollars ($20,000,000). The Borrower understands and agrees that the Agent shall have no obligation or commitment to include any of the assets or properties of any Person acquired in the Borrowing Base pursuant to a Subject Transaction. The Agent and the Lenders agree, however, that if after completion and review of a satisfactory field examination of the Assets and properties which constitute or are part of a Permitted Acquisition, such Assets and properties shall be included in the Borrowing Base if the results of such field examination and audit are reasonably acceptable in all respects to the Agent in its discretion and such Assets and properties otherwise satisfy the eligibility criteria for inclusion in the Borrowing Base. In addition, the Agent and the Lenders agree that the purchase of certain assets of Capsal-Certwood UK Ltd. by Berry UK shall constitute a Permitted Acquisition; provided that Berry UK and/or the Borrower satisfy subparts (ii), (iii), (vi), (viii), (x), (xi) and (xii) of this definition of Permitted Acquisition. "Permitted Asset Disposition" means any one of the following Asset Dispositions; provided that no such Asset Disposition shall be permitted at any time following the occurrence of a Default or an Event of Default or if and to the extent any such Asset Disposition would give rise to a Default or an Event of Default, unless otherwise agreed in writing by the Requisite Lenders: (a) an Asset Disposition which satisfies the following conditions: (i) the sum of (A) the Net Proceeds to be paid to or received by the Borrower and/or any Subsidiary with respect to such Asset Disposition, plus (B) the aggregate amount of all Net Proceeds paid to or received by the Borrower and/or any or all Subsidiaries, is less than or equal to One Million Dollars ($1,000,000) during any fiscal year, and (ii) none of the Assets sold under this clause (a) constitute molds used in the business of the Borrower, NIM Holdings, Berry UK or any Subsidiary Guarantor. (b) sales of Inventory in the ordinary course of business, (c) the licensing of Patents, Trademarks and/or Copyrights, in the ordinary course of business, 35 (d) dispositions of worn, used, surplus or obsolete tangible property in the ordinary course of business; provided that any the proceeds of any such disposition shall be subject to the Lien of the Agent and the Lenders as provided herein, (e) dispositions of Assets (including Net Casualty Proceeds) to the extent such Assets are replaced with Assets of similar kind and function, provided that the replacement Assets shall be purchased no later than ninety (90) days following the Asset Disposition, the replacement Assets (which shall constitute Collateral) shall be free and clear of Liens other than Permitted Liens that are not Liens securing purchase money or finance lease arrangements, and the Borrower, Berry UK, NIM Holdings or the Subsidiary Guarantor, as the case may be, shall give the Agent at least ten (10) days prior written notice of such Asset Disposition, except for an Asset Disposition which constitutes a casualty, (f) intercompany sales, leases or other dispositions of Assets among and between the Borrower and any and all Subsidiary Guarantors; provided, that any such Assets sold, leased or otherwise disposed of as between the Borrower and any and all Subsidiary Guarantors shall remain subject to the Liens of the Agent and the Lenders under this Agreement and under the other Financing Documents; no intercompany sales, leases or other dispositions of Assets among and between Berry UK or NIM Holdings and the Borrower or any Subsidiary Guarantor shall be permitted without the prior written consent of the Agent, except that Berry UK and/or NIM Holdings may sell, lease or otherwise transfer Assets to the Borrower, provided that such Assets become subject to a first priority perfected Lien of the Agent and the Lenders (subject only to Permitted Liens) immediately upon any sale or other transfer. (g) the sale of any Fixed or Capital Assets acquired by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor and the leaseback of such Assets within thirty (30) days of acquisition, but only as contemplated and required as part of an intended Capital Lease transaction at the time of acquisition, (h) the sale of molds by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor; provided that the aggregate Net Proceeds of any and all such molds outside the ordinary course of business shall not exceed Five Hundred Thousand Dollars ($500,000) in any fiscal year, (i) the sale, transfer or other conveyance of the issued and outstanding capital stock of Poly-Seal to the Borrower, as contemplated by the Poly-Seal Stock Purchase Transaction, (j) the sale of the real property and improvements subject to the lien of the Deed of Trust - Arlington Heights, provided that the Net Proceeds of such sale are used within 180 days of their receipt to purchase other Fixed or Capital Assets which are to be subject to Liens in favor of the Agent and the Lenders, (k) the sale of a portion of the real property and improvements subject to the lien of the Deed of Trust - Evansville as more particularly described on Schedule 1.1B - 36 Evansville Sale Leaseback attached hereto and made a part hereof, provided that the Net Proceeds of such sale are used within 180 days of their receipt to purchase other Fixed or Capital Assets which are to be subject to Liens in favor of the Agent and the Lenders; and (l) the sale of Fixed or Capital Assets that are sold in connection with a sale-leaseback transaction referred to in clause (A) of the last sentence of Section 6.2.16. "Permitted Liens" means: (a) Liens for Taxes (i) which are not delinquent or (ii) which (1) are being diligently contested in good faith and by appropriate proceedings, (2) the Borrower, Berry UK, NIM Holdings or the Subsidiary Guarantor, as appropriate, has the financial ability to pay, with all penalties and interest, at all times without materially and adversely affecting the Borrower, Berry UK, NIM Holdings or the Subsidiary Guarantor, as appropriate, and (3) are not, and will not be with appropriate filing, the giving of notice and/or the passage of time, entitled to priority over any Lien of the Agent and/or the Lenders unless and to the extent that a reserve has been established against the Borrowing Base (or the UK Borrowing Base, as appropriate) in an amount equal to the maximum liability under and in connection with such Taxes, which reserve shall be established by the Agent upon the Borrower's request; (b) deposits or pledges to secure obligations under workers' compensation, social security or similar laws, or under unemployment insurance in the ordinary course of business; (c) Liens securing the Obligations; (d) judgment Liens to the extent the entry of such judgment does not constitute an Event of Default under the terms of this Agreement or result in the sale or levy of, or execution on, any of the Collateral; (e) such other Liens, if any, as are set forth on Schedule 4.1.22 attached hereto and made a part hereof; (f) deposits, liens or pledges to secure payments of unemployment and other insurance, old-age pensions or other social security obligations, or the performance of bids, tenders, leases, contracts, public or statutory obligations, surety, stay or appeal bonds, or other similar obligations arising in the ordinary course of business; (g) statutory mechanics', workers', repairmen's, warehousemen's, vendors' or carriers' Liens or other similar statutory Liens arising in the ordinary course of business and securing sums which are not more than thirty (30) days past due, provided that such statutory Liens do not materially impair or affect the use or value of any of the Collateral; (h) statutory landlord's Liens under leases to which the Borrower, Berry UK, NIM Holdings or any Subsidiary is a party; (i) zoning restrictions, easements, rights of way, licenses and restrictions on the use of real property or minor irregularities in title thereto which do not materially impair the use or value of any such real property; (j) "Permitted Encumbrances" (as defined in each of the Deeds of Trust); (k) Liens securing Indebtedness for Borrowed Money permitted by the provisions of Section 6.2.4(g), Section 6.2.4(n) or Refinancing Indebtedness with respect thereto permitted by the provisions of Section 6.2.4(m); (l) Liens securing obligations under Capital Leases to the extent such Capital Leases are permitted by the provisions of this Agreement, and (m) any Lien arising under any retention of title arrangements entered into in the ordinary course of trading and not entered into primarily for the purposes of securing borrowings. "Permitted Uses" means (a) the acquisition of one hundred percent (100%) of the capital stock of Poly-Seal through the Poly-Seal Stock Purchase Transaction by the Borrower, (b) the refinancing and payment of all obligations of Poly-Seal to any lenders with respect to any Indebtedness for Borrowed Money existing as of the Closing Date, (c) the payment of all costs and expenses reasonably incurred in connection with the closing and consummation of the transactions contemplated by this Agreement, including the Poly-Seal Stock Purchase 37 Transaction, (d) the payment of expenses incurred in the ordinary course of business of the Borrower or any Subsidiary Guarantor, (e) the acquisition of any Permitted Acquisition as and to the extent permitted by the provisions of this Agreement, (f) the payment of all costs and expenses reasonably incurred in connection with the closing and consummation of a Permitted Acquisition, (g) with respect to the Revolving Loan for general corporate purposes of the Borrower or any Subsidiary Guarantor and with respect to the UK Revolving Loan for general corporate purposes of Berry UK or NIM Holdings. "Person" means and includes an individual, a corporation, a partnership, a joint venture, a limited liability company or partnership, a trust, an unincorporated association, a Governmental Authority, or any other organization or entity. "Plan" means any pension plan which is covered by Title IV of ERISA and in respect of which the Borrower, any Subsidiary of the Borrower or a Commonly Controlled Entity is an "employer" as defined in Section 3 of ERISA. "Poly-Seal" means Poly-Seal Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Poly-Seal Stock" means all capital stock issued by Poly-Seal acquired or to be acquired by the Borrower, all in accordance with the Poly-Seal Stock Purchase Transaction, together with any and all proceeds and products thereof. "Poly-Seal Stock Purchase Agreement" means that certain Agreement and Plan of Merger dated as of May ___, 2000 by and among the Borrower, Berry Plastics Acquisition and the shareholders of Poly-Seal, as the same may from time to time be amended, restated, supplemented or modified, together with any and all exhibits and schedules thereto, amendments, modifications, and supplements thereto, restatements thereof, and substitutes therefor. "Poly-Seal Stock Purchase Documents" means collectively the Poly-Seal Stock Purchase Agreement and any and all other agreements, documents or instruments, previously, now or hereafter executed and delivered by the Borrower, or any other Person in connection with the Poly-Seal Stock Purchase Transaction, as the same may from time to time be amended, restated, supplemented and modified. "Poly-Seal Stock Purchase Transaction" means the acquisition of all issued and outstanding capital stock of Poly-Seal by the Borrower in accordance with the provisions of the Poly-Seal Stock Purchase Agreement. "Post-Default Rate" means with respect to the principal balance of any of the Obligations, the then applicable rate of interest on such Obligations, plus two percent (2%) per annum. "Post-Expiration Date Letter of Credit" and "Post-Expiration Date Letters of Credit" have the meanings described in Section 2.4.3 (Terms of Letters of Credit). 38 "Preferred Stock" means the issued and outstanding class of Series A-1 Preferred Stock issued by the Parent for sale to one or more of the Parent's existing shareholders for an aggregate purchase price of Twenty-five Million Dollars ($25,000,000). "Preferred Stock Shareholder Agreements" means any and all agreements, documents or instruments now or at any time executed and delivered in connection with the issuance, sale or purchase of the Preferred Stock, as the same may from time to time be amended, restated, supplemented or modified. "Prepayment" means a Revolving Loan Mandatory Prepayment, a Revolving Loan Optional Prepayment, a Term Loan A Mandatory Prepayment, a Term Loan A Optional Prepayment, a Term Loan B Mandatory Prepayment, a Term Loan B Optional Prepayment, a UK Revolving Loan Mandatory Prepayment, a UK Revolving Loan Optional Prepayment, a UK Term Loan Optional Prepayment or a UK Term Loan Mandatory Prepayment, as the case may be, and "Prepayments" mean collectively all Revolving Loan Mandatory Prepayments, all Revolving Loan Optional Prepayments, all Term Loan A Mandatory Prepayments, all Term Loan A Optional Prepayments, all Term Loan B Mandatory Prepayments, all Term Loan B Optional Prepayments, all UK Revolving Loan Mandatory Prepayments, all UK Revolving Loan Optional Prepayments, all UK Term Loan Mandatory Prepayments and all UK Term Loan Optional Prepayments. "Pricing Ratio" means as to the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, the ratio of (a) Funded Debt to (b) EBITDA. For purposes of this definition, the calculation of EBITDA shall include each Subject Transaction which constitutes a Permitted Acquisition, with such calculations to be based on a twelve (12) month trailing period reflecting actual and historical performance of the Subject Transaction. "Prime Rate" means the floating and fluctuating per annum prime commercial lending rate of interest of the Agent, as established by the Agent at any time or from time to time. The Prime Rate shall be adjusted automatically, without notice, as of the effective date of any change in such prime commercial lending rate. The Prime Rate does not necessarily represent the lowest rate of interest charged by the Agent to borrowers. "Proposed Assignee" has the meaning described in Section 9.5 (Assignments by Lenders). "Pro-forma Financial Projections" has the meaning described in Section 4.1.12 (Pro-forma Financial Statements). "Pro-forma Financial Statements" has the meaning described in Section 4.1.12 (Pro-forma Financial Statements). "Pro Rata Share" means at any time and as to any Lender, the percentage derived by dividing the unpaid principal amount of the Loans, Bond Letter of Credit Obligations, and Letter of Credit Obligations, owing to that Lender by the aggregate unpaid principal amount of all Loans, Bond Letter of Credit Obligations, and Letter of Credit Obligations, then outstanding; or if no Loans, Bond Letter of Credit Obligations or Letter of Credit Obligations are outstanding, by 39 dividing the total amount of such Lender's Commitments by the total amount of the Commitments of the Agent and all of the Lenders. "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder. "Responsible Officer" means for the Borrower, NIM Holdings or Berry UK, as applicable, its chief executive officer, any vice president or president or, with respect to financial matters, its chief financial officer. "Requisite Lenders" means at any time of determination one or more of the Lenders holding at least fifty-one percent (51%) of the Commitments. "Reserve Percentage" means, at any time, the then current maximum rate for which reserves (including any basic, supplemental, marginal and emergency reserves) are required to be maintained by member banks of the Federal Reserve System under Regulation D of the Board of Governors of the Federal Reserve System against "Eurocurrency liabilities", as that term is defined in Regulation D. The LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage. The Agent hereby advises the Borrower and NIM Holdings that as of the date of this Agreement, the Reserve Percentage is equal to zero. "Revolving Credit Commitment" means the agreement of a Lender relating to the making the Revolving Loan and advances thereunder subject to and in accordance with the provisions of this Agreement; and "Revolving Credit Commitments" means the collective reference to the Revolving Credit Commitment of each of the Lenders. "Revolving Credit Commitment Period" means the period of time from the Closing Date to the Business Day preceding the Revolving Credit Termination Date. "Revolving Credit Committed Amount" has the meaning described in Section 2.1.1 (Revolving Credit Facility). "Revolving Credit Facility" means the facility established by the Lenders pursuant to Section 2.1 (Revolving Credit Facility). "Revolving Credit Note" and "Revolving Credit Notes" have the meanings described in Section 2.1.5 (Revolving Credit Notes). "Revolving Credit Optional Reduction" and "Revolving Credit Optional Reductions" have the meanings described in Section 2.1.11 (Optional Reduction of Revolving Credit). "Revolving Credit Pro Rata Share" has the meaning described in Section 2.1.2 (Procedure for Making Advances). "Revolving Credit Termination Date" means the earlier of (a) January 21, 2002, (b) the repayment or prepayment of the Term Loans in full, (c) the date on which the Revolving Credit Commitments are terminated pursuant to Section 7.2 (Remedies) or otherwise. 40 "Revolving Credit Unused Line Fee" and "Revolving Credit Unused Line Fees" have the meanings described in Section 2.1.10 (Revolving Credit Unused Line Fee). "Revolving Loan" has the meaning described in Section 2.1.1 (Revolving Credit Facility). "Revolving Loan Account" has the meaning described in Section 2.1.9 (Revolving Loan Account). "Revolving Loan Mandatory Prepayment" and "Revolving Loan Mandatory Prepayments" have the meanings described in Section 2.1.6 (Mandatory Prepayments). "Revolving Loan Optional Prepayment" and "Revolving Loan Optional Prepayments" have the meanings described in Section 2.1.7 (Optional Prepayments of Revolving Loan). "Right of First Refusal Notice" has the meaning described in Section 9.5 (Assignments by Lenders). "Securities" means the collective reference to each and every certificated or uncertificated security which constitutes a "security" under the provisions of Title 8 of the Uniform Commercial Code, and all proceeds (cash and non-cash) of the foregoing and to each and every "investment property" under the provisions of Title 9 of the Uniform Commercial Code (if that definition is included in that Title), and all proceeds (cash and non-cash) of the foregoing. "Security Agreement" means that certain amended and restated security agreement dated as of the date hereof from each Subsidiary Guarantor to the Agent for the benefit of the Lenders, ratably, and the Agent, all as amended, restated, supplemented or otherwise modified in writing at any time and from time to time. "Security Documents" means collectively any assignment, pledge agreement, security agreement, mortgage, deed of trust, deed to secure debt, financing statement and any similar instrument, document or agreement under or pursuant to which a Lien is now or hereafter granted to, or for the benefit of, the Agent and/or the Lenders on any real or personal property of any Person to secure all or any portion of the Obligations, all as the same may from time to time be amended, restated, supplemented or otherwise modified, including, without limitation, this Agreement, the Guaranty, the Stock Pledge Agreement, the Deeds of Trust, the Security Agreement, the Assignment of Patents, the Assignment of Trademarks, the UK Stock Pledge Agreement, and the UK Security Documents. "Security Procedures" means the rules, policies and procedures adopted and implemented by the Agent and its Affiliates at any time and from time to time with respect to security procedures and measures relating to electronic funds transfers, all as the same may be amended, restated, supplemented, terminated, or otherwise modified at any time and from time to time by the Agent in its sole and absolute discretion. "Seller" means all of the shareholders of Poly-Seal immediately prior to consummation of the Poly-Seal Stock Purchase Transaction. 41 "Senior Secured Debt - Parent" means that certain Indebtedness for Borrowed Money of the Parent (and all guarantees thereof by the Borrower and its Subsidiaries) in favor of First Trust of New York, National Association, as trustee for the holders of the 12-1/2% Series A Senior Secured Notes due 2006 and the 12-1/2% Series B Secured Notes due 2006 in a stated principal amount of One Hundred Five Million Dollars ($105,000,000). "Senior Secured Debt Loan Documents" means any and all promissory notes, agreements, documents or instruments now or at any time evidencing, securing, guarantying or otherwise executed and delivered in connection with the Senior Secured Debt - Parent, as the same may from time to time be amended, restated, supplemented or modified. "Settlement Date" means each Business Day after the Closing Date selected by the Agent in its sole discretion subject to and in accordance with the provisions of Section 2.11.3(a) (Settlement Procedures) as of which a Settlement Report is delivered by the Agent and on which settlement is to be made among the Lenders in accordance with the provisions of Section 2.11.3 (Settlement Procedures). "Settlement Report" means each report prepared by the Agent and delivered to each Lender and setting forth, among other things, as of the Settlement Date indicated thereon and as of the next preceding Settlement Date, the aggregate outstanding principal balance of the Revolving Loan, each Lender's Pro Rata Share thereof, each Lender's Net Outstandings and all Non-Ratable Loans made, and all payments of principal, interest and Fees received by the Agent from the Borrower during the period beginning on such next preceding Settlement Date and ending on such Settlement Date. "State" means the State of Maryland. "Sterling" means British Pounds Sterling. "Sterling Interest Period" means as to any Sterling LIBOR Loan, the period commencing on and including the date such Sterling LIBOR Loan is made and ending on and including the day which is 7, 30, 60 or 90 days thereafter, as selected by Berry UK or NIM Holdings in accordance with the provisions of this Agreement, and thereafter, each period commencing on the last day of the then preceding Sterling Interest Period for such Sterling LIBOR Loan and ending on and including the day which is 7, 30, 60 or 90 days thereafter, as selected by Berry UK or NIM Holdings in accordance with the provisions of this Agreement; provided, however, that: (a) the first day of any Sterling Interest Period shall be a Business Day; (b) if any Sterling Interest Period would end on a day that is not a Business Day, such Sterling 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 Sterling Interest Period shall end on the next preceding Business Day; (c) no Sterling Interest Period shall extend beyond the UK Revolving Credit Termination Date or the scheduled maturity date of the UK Term Loan; and 42 (d) no Sterling Interest Period greater than 30 days may be selected by Berry UK or NIM Holdings for any Sterling LIBOR Loan made under the UK Revolving Credit Facility and no Sterling Interest Period which is less than 30 days may be selected by NIM Holdings for the UK Term Loan. "Sterling LIBOR Lending Office" means with respect to Bank of America, Bank of America, N.A. (London England Branch Office) or such other branch or office of Bank of America as designated by Bank of America in the United Kingdom from time to time as the branch or office through which the Sterling LIBOR Loans, UK Revolving Loans and the UK Term Loan are to be made or maintained. "Sterling LIBOR Base Rate" means for any Sterling Interest Period with respect to any Sterling LIBOR Loan, the rate per annum (rounded upward, if necessary, to the nearest next 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Sterling at approximately 11:00 a.m. (London time) on the first Business Day of the Sterling Interest Period for a term comparable to such Sterling Interest Period. If for any reason such rate is not available, the term "Sterling LIBOR Base Rate" shall mean, for any Sterling LIBOR Loan for any Sterling Interest Period, therefor, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Sterling at approximately 11:00 a.m. (London time) on the first Business Day of the Sterling Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates. For purposes of this definition, Telerate Page 3750 refers to the British Bankers' Association LIBOR Rates (determined at approximately 11:00 a.m. (London time) that are published by Dow Jones Telerate, Inc. "Sterling LIBOR Loan" means any Loan for which interest is to be computed with reference to the Sterling LIBOR Rate. "Sterling LIBOR Rate" means for any Sterling Interest Period with respect to any Sterling LIBOR Loan, (a) the Sterling LIBOR Base Rate, plus (b) the Applicable Margin, plus (c) the Mandatory Liquid Assets Cost Rate for such Sterling Interest Period "Stock Pledge Agreement" means (a) that certain amended and restated stock pledge, assignment and security agreement dated as of the date hereof from the Borrower to the Agent for the benefit of the Lenders ratably and the Agent, (b) the UK Stock Pledge Agreement, (c) that certain amended and restated stock pledge agreement, assignment and security agreement dated as of the date hereof from CPI to the Agent for the benefit of the Lenders ratably and the Agent, all as the same may from time to time be amended, restated, supplemented or otherwise modified, which Stock Pledge Agreement (other than the UK Stock Pledge Agreement) grants, pledges and assigns to the Agent for the benefit of the Lenders ratably and the Agent, a first priority pledge and assignment of one hundred percent (100%) of the capital stock of each Subsidiary Guarantor and which UK Stock Pledge Agreement grants, pledges and assigns to Bank of America, a first priority pledge and assignment of one hundred percent (100%) of the capital stock of NIM Holdings (which one hundred percent (100%) pledge reduces to sixty-five percent (65%) at such time as all obligations under the Subordinated Debt have been paid in full) and grants, pledges and assigns to the Agent for the benefit of the Lenders ratably and the Agent, 43 a second priority pledge and assignment of sixty-five percent (65%) of the capital stock of NIM Holdings. "Stockholder's Equity" means as to the Borrower, Berry UK, NIM Holdings and each of the Subsidiary Guarantors, on a consolidated basis, for any date of determination thereof, the total of capital stock (except treasury stock and net of any note receivable received upon the issuance of any shares of capital stock) and contributed capital, as determined in accordance with GAAP consistently applied, after eliminating all intercompany items. "Subject Transaction" has the meaning given such term in the definition of Permitted Acquisition. "Subordinated Debt" means collectively (i) that certain Indebtedness for Borrowed Money of the Borrower (and all guarantees thereof by the Borrower and its Subsidiaries) in favor of United States Trust Company of New York, as trustee for the holders of the 12-1/4% Senior Subordinated Notes due 2004 in a stated principal amount of One Hundred Million Dollars ($100,000,000), (ii) the Additional Subordinated Debt, and (iii) the Additional Subordinated Debt (Cardinal). "Subordinated Debt Loan Documents" means any and all promissory notes, agreements, documents or instruments now or at any time evidencing, securing, guarantying or otherwise executed and delivered in connection with the Subordinated Debt, as the same may from time to time be amended, restated, supplemented or modified. "Subordinated Indebtedness" means all Indebtedness, including, without limitation, the Subordinated Debt, incurred at any time by the Borrower as and to the extent permitted by the provisions of Section 6.2.4 (Indebtedness), which is subordinated to the Obligations, as set forth in one or more written agreements, all in form and substance satisfactory to the Agent in its reasonable discretion. The Agent and the Lenders agree that Subordinated Indebtedness does not include the Senior Secured Debt - Parent. "Substitute Purchaser" has the meaning described in Section 9.5 (Assignments by Lenders). "Subsidiary" means with respect to any Person, any other Person owning the majority of the voting shares of such first Person. "Subsidiary Guarantor" means BIC, BTP, AeroCon, Berry Sterling, PackerWare, Berry Design, Berry Venture, Venture Southeast, Venture Midwest, Knight, CPI, Cardinal, Poly-Seal or any other domestic Subsidiary (organized and existing under the laws of any state in the United States) of the Borrower or the Parent which is designated and qualifies as a Subsidiary Guarantor in accordance with the provisions of Section 6.2.2 (Subsidiaries), or any of their respective successors and assigns, as the case may be; and, "Subsidiary Guarantors" means BIC, BTP, AeroCon, Berry Sterling, Berry Design, PackerWare, Berry Venture, Venture Southeast, Venture Midwest, Knight, CPI, Cardinal, Poly-Seal and each other domestic Subsidiary of the Borrower designated and qualified as a "Subsidiary Guarantor" in accordance with the provisions of Section 6.2.2 (Subsidiaries), and all of their respective successors and assigns. 44 "Tangible Capital Funds" means as to the Borrower, Berry UK, NIM Holdings and each of the Subsidiary Guarantors, on a consolidated basis, for any date of determination thereof, the total of (a) all Stockholder's Equity, less (b) all Assets which would be classified as intangible assets under GAAP consistently applied, plus (c) Subordinated Indebtedness. "Taxes" means all taxes and assessments whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character (including all penalties or interest thereon), which at any time shall be assessed, levied, confirmed or imposed by any Governmental Authority on the Borrower, any Subsidiary Guarantor, Berry UK, NIM Holdings or any of its or their properties or Assets or any part thereof or in respect of any of its or their franchises, businesses, income or profits. "Term Loan A" and "Term Loans A" have the meanings described in Section 2.2 (Term Loan A Facility). "Term Loan B" and "Term Loans B" have the meanings described in Section 2.3.1 (Term Loan B Commitments). "Term Loan A Commitment" and "Term Loan A Commitments" have the meanings described in Section 2.2.1 (Term Loan A Commitments). "Term Loan B Commitment" and "Term Loan B Commitments" have the meanings described in Section 2.3.1 (Term Loan B Commitments). "Term Loan A Committed Amount" has the meaning described in Section 2.2.1 (Term Loan A Commitments). "Term Loan B Committed Amount" has the meaning described in Section 2.3.1 (Term Loan B Commitments). "Term Loan A Facility" means the facility established by the Lenders pursuant to Section 2.2 (Term Loan A Facility). "Term Loan B Facility" means the facility established by the Lenders pursuant to Section 2.3 (Term Loan B Facility). "Term Loan B Fee" and "Term Loan B Fees" have the meaning described in Section 2.3.5 (Term Loan B Fees). "Term Loan A Increase" has the meaning described in Section 2.2.1(Term Loan A Commitments). "Term Loan B Increase" has the meaning described in Section 2.3.1 (Term Loan B Commitments). "Term Loan A Mandatory Prepayment" and "Term Loan A Mandatory Prepayments" have the meanings described in Section 2.2.3 (Mandatory Prepayments of Term Loan A). 45 "Term Loan B Mandatory Prepayment" and "Term Loan B Mandatory Prepayments" have the meanings described in Section 2.3.3 (Mandatory Prepayments of Term Loan B). "Term Loan A Optional Prepayment" and "Term Loan A Optional Prepayments" have the meanings described in Section 2.2.4 (Optional Prepayments of Term Loans A). "Term Loan B Optional Prepayment" and "Term Loan B Optional Prepayments" have the meanings described in Section 2.3.4 (Optional Prepayments of Term Loan B). "Term Loan A Pro Rata Share" has the meaning described in Section 2.2 (Term Loan A Facility). "Term Loan B Pro Rata Share" has the meaning described in Section 2.3.1 (Term Loan B Commitments). "Term Loan A Note" and "Term Loan A Notes" have the meaning described in Section 2.2.2 (Amortization of Term Loans A). "Term Loan B Note" and "Term Loan B Notes" have the meaning described in Section 2.3.2 (Amortization of Term Loans B). "Term Loan" means either a Term Loan A, a Term Loan B or a UK Term Loan; and "Term Loans" means each Term Loan A, Term Loan B and each UK Term Loan. "Term Note" means a Term Loan A Note, a Term Loan B Note or a UK Term Loan Note; "Term Notes" means each Term Loan A Note, each Term Loan B Note and each UK Term Loan Note. "Total Revolving Credit Committed Amount" has the meaning described in Section 2.1.1 (Revolving Credit Facility). "Total Term Loan A Committed Amount" has the meaning described in Section 2.2.1 (Term Loan A Commitments). "Total Term Loan B Committed Amount" has the meaning described in Section 2.3.1 (Term Loan B Commitments). "Trademarks" means and includes in each case whether now existing or hereafter arising, all of the Borrower's or any Subsidiary Guarantor's rights, title and interest in and to (a) any and all trademarks (including service marks), trade names and trade styles, and applications for registration thereof and the goodwill of the business symbolized by any of the foregoing, (b) any and all licenses of trademarks, service marks, trade names and/or trade styles, whether as licensor or licensee, (c) any renewals of any and all trademarks, service marks, trade names, trade styles and/or licenses of any of the foregoing, (d) income, royalties, damages and payments now or hereafter due and/or payable with respect thereto, including, without limitation, damages, claims, and payments for past, present and future infringements thereof, (e) rights to sue for past, present and future infringements of any of the foregoing, including the right to settle suits 46 involving claims and demands for royalties owing, and (f) all rights corresponding to any of the foregoing throughout the world. "UK Borrowing Base" has the meaning described in Section 2.6.3 (UK Borrowing Base). "UK Borrowing Base Deficiency" has the meaning described in Section 2.6.3 (UK Borrowing Base). "UK Borrowing Base Report" has the meaning described in Section 2.6.4 (UK Borrowing Base Report). "UK Collateral" means the collective reference to all property of NIM Holdings and Berry UK from time to time to subject to the Liens of this Agreement, the UK Security Documents and the other Financing Documents, together with any and all cash and non-cash proceeds and products thereof. "UK Credit Facilities Guaranty" means (i) the guaranty of payment of the UK Obligations to Bank of America, acting through its Sterling LIBOR Lending Office, from the Parent, the Borrower and each Subsidiary Guarantor and (ii) the guaranty of payment of the UK Obligations of NIM Holdings to Bank of America, acting through its Sterling LIBOR Lending Office, from Berry UK, each as the same may from time to time be amended, restated, supplemented or otherwise modified. "UK Credit Facility" means the UK Revolving Credit Facility or the UK Term Loan Facility, as the case may be, and "UK Credit Facilities" means collectively the UK Revolving Credit Facility and the UK Term Loan Facility, and any and all other credit facilities now or hereafter extended to Berry UK or NIM Holdings under or secured by this Agreement and/or any of the UK Security Documents. "UK Excess Cash Flow" means for any annual period of determination thereof and with respect to Berry UK and NIM Holdings only, an amount equal to fifty percent (50%) of the sum of (a) EBITDA, less (b) non-financed Capital Expenditures permitted by Section 6.2.6 (Capital Expenditures), less (c) cash income Taxes and alternative minimum Taxes, less (d) increases in working capital, plus (e) decreases in working capital, less (f) Debt Service, as shown on the annual financial statements for such annual period, furnished to the Agent in accordance with Section 6.1.1 (Financial Statements); or in the event that the Borrower fails to deliver such financial statements to the Agent as and when required, the Agent shall estimate, in its sole, but commercially reasonable discretion, the amount of UK Excess Cash Flow for such period. "UK Obligations" means and includes all present and future indebtedness, obligations, and liabilities, whether now existing or contemplated or hereafter arising, of Berry UK and/or NIM Holdings to Bank of America, acting through its Sterling LIBOR Lending Office, under, arising pursuant to, in connection with and/or on account of the provisions of this Agreement, the UK Revolving Credit Note, the UK Term Note, or each UK Security Document,. FOR PURPOSES OF THE INDENTURE, ALL UK OBLIGATIONS UNDER AND IN CONNECTION WITH THE UK CREDIT FACILITIES CONSTITUTE AND ARE HEREBY DEEMED "SENIOR INDEBTEDNESS" AS DEFINED IN THE INDENTURE. 47 "UK Revolving Credit Commitment" means the agreement of each Lender relating to purchase of an undivided participating interest in the UK Revolving Loan and advances thereunder subject to and in accordance with the provisions of this Agreement; and "UK Revolving Credit Commitments" means the collective reference to the UK Revolving Credit Commitment of each of the Lenders. "UK Revolving Credit Commitment Period" means the period of time from the Closing Date to the Business Day preceding the UK Revolving Credit Termination Date. "UK Revolving Credit Committed Amount" has the meaning described in Section 2.6.1 (UK Revolving Credit Facility). "UK Revolving Credit Facility" means the facility established by Bank of America pursuant to Section 2.6.1 (UK Revolving Credit Facility). "UK Revolving Credit Note" has the meaning described in Section 2.6.5 (UK Revolving Credit Notes). "UK Revolving Credit Pro Rata Share" has the meaning described in Section 2.6.2 (Procedure for Making Advances). "UK Revolving Credit Termination Date" means the Revolving Credit Termination Date. "UK Revolving Credit Facility Fee" and "UK Revolving Credit Facility Fees" have the meanings described in Section 2.6.9 (UK Revolving Credit Facility Fee). "UK Revolving Loan" has the meaning described in Section 2.6.1 (UK Revolving Credit Facility). "UK Revolving Loan Account" has the meaning described in Section 2.6.8 (UK Revolving Loan Account). "UK Revolving Loan Mandatory Prepayment" and "UK Revolving Loan Mandatory Prepayments" have the meanings described in Section 2.6.6 (Mandatory Prepayments of UK Revolving Loan). "UK Revolving Loan Optional Prepayment" and "UK Revolving Loan Optional Prepayments" have the meanings described in Section 2.6.7 (Optional Prepayments of UK Revolving Loan). "UK Security Agreement" means those certain debentures from Berry UK and NIM Holdings dated the date of this Agreement pursuant to which a Lien is granted to Bank of America, acting through its Sterling LIBOR Lending Office, as security for the UK Obligations, as the same may be amended, restated, supplemented or otherwise modified. "UK Security Documents" means collectively any assignment, pledge agreement, security agreement, mortgage, deed of trust, deed to secure debt, financing statement and any similar instrument, document or agreement under or pursuant to which a Lien is now or hereafter 48 granted to, or for the benefit of, Bank of America, acting through its Sterling LIBOR Lending Office, on any real or personal property of Berry UK and/or NIM Holdings solely to secure all or any portion of the UK Obligations, including, obligations of NIM Holdings under the UK Credit Facilities Guaranty and the UK Security Agreement, all as the same may from time to time be amended, restated, supplemented or otherwise modified. "UK Stock Pledge Agreement" means that certain stock pledge, assignment and security agreement dated as of the July 2, 1998 from the Borrower to Bank of America, acting through its Sterling LIBOR Lending Office, as the same may from time to time be amended, restated, supplemented or otherwise modified, which UK Stock Pledge Agreement grants, pledges and assigns to Bank of America, acting through its Sterling LIBOR Lending Office, as security for the UK Obligations, and pledges and assigns to the Agent for the ratable benefit of the Lenders and the Agent, as security for all of the Obligations (other than the UK Obligations), a pledge and assignment of sixty-five percent (65%) of the capital stock of NIM Holdings and grants, pledges and assigns to Bank of America, acting through its Sterling LIBOR Lending Office, as security for the UK Obligations, a pledge and assignment of one hundred percent (100%) of the capital stock of NIM Holdings, which one hundred percent (100%) pledge shall reduce to sixty-five percent (65%) at such time as all obligations under the Subordinated Debt have been paid in full. "UK Term Loan" has the meaning described in Section 2.7 (UK Term Loan Facility). "UK Term Loan Commitment" and "UK Term Loan Commitments" have the meanings described in Section 2.7.1 (UK Term Loan Commitments). "UK Term Loan Committed Amount" has the meaning described in Section 2.7.1 (UK Term Loan Commitments). "UK Term Loan Facility" means the facility established by Bank of America, acting through its Sterling LIBOR Lending Office, pursuant to Section 2.8 (UK Term Loan Facility). "UK Term Loan Mandatory Prepayment" and "UK Term Loan Mandatory Prepayments" have the meanings described in Section 2.8.3 (Mandatory Prepayments of UK Term Loan). "UK Term Loan Optional Prepayment" and "UK Term Loan Optional Prepayments" have the meanings described in Section 2.8.4 (Optional Prepayments of UK Term Loans). "UK Term Loan Pro Rata Share" has the meaning described in 2.8.1 (UK Term Loan Facility). "UK Term Loan Note" has the meaning described in Section 2.8.2 (Amortization of UK Term Loans). "Uniform Commercial Code" means, unless otherwise provided in this Agreement, the Uniform Commercial Code as adopted by and in effect from time to time in the State or in any other jurisdiction, as applicable. 49 "Venture Holdings" means Venture Packaging, Inc., a corporation organized and existing under the laws of the State Delaware, and its successors and assigns. "Venture Midwest" means Venture Packaging Midwest, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Venture Southeast" means Venture Packaging Southeast, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Wholly Owned Subsidiary" means any domestic United States Person all the shares of stock or other equity interests of all classes of which (other than directors' qualifying shares) at the time are owned directly or indirectly by the Borrower and/or by one or more Wholly Owned Subsidiaries of the Borrower. "Wire Transfer Procedures" means the rules, policies and procedures adopted and implemented by the Agent and its Affiliates at any time and from time to time with respect to electronic funds transfers, including, without limitation, the Security Procedures, all as the same may be amended, restated, supplemented, terminated or otherwise modified at any time and from time to time by the Agent upon notice to the Borrower in its reasonable discretion. Section 1.2 Accounting Terms and Other Definitional Provisions. Unless otherwise defined herein, as used in this Agreement and in any certificate, report or other document made or delivered pursuant hereto, accounting terms not otherwise defined herein, and accounting terms only partly defined herein, to the extent not defined, shall have the respective meanings given to them under GAAP. Unless otherwise defined herein, all terms used herein which are defined by the Uniform Commercial Code shall have the same meanings as assigned to them by the Uniform Commercial Code unless and to the extent varied by this Agreement. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, subsection, schedule and exhibit references are references to articles, sections or subsections of, or schedules or exhibits to, as the case may be, this Agreement unless otherwise specified. As used herein, the singular number shall include the plural, the plural the singular and the use of the masculine, feminine or neuter gender shall include all genders, as the context may require. Reference to any one or more of the Financing Documents shall mean the same as the foregoing may from time to time be amended, restated, substituted, extended, renewed, supplemented or otherwise modified. Notwithstanding the foregoing, the Agent and the Lenders agree that if GAAP at any time changes and such changes have an affect on the computation of any of the covenants contained in Section 6.1.13 (Financial Covenants), the Agent, the Lenders and the Borrower will negotiate in good faith to revise any such affected covenants so as to reverse the effect of such change in GAAP. Whenever a term is used in this Agreement to determine whether a threshold level or basket amount has been achieved or exceeded, or to calculate a financial ratio or any other amount and such term includes amounts in U.S. Dollars and amounts denominated in Sterling, or solely in Sterling, the terms shall be construed and/or calculated for purposes of this Agreement by (i) determining the Dollar Currency Equivalent of each such amount to be included in the aggregate as at the date of 50 calculation, and adding all such amounts to (ii) the amounts, if any, which are already in U.S. Dollars. ARTICLE II THE CREDIT FACILITIES Section 2.1 The Revolving Credit Facility. 2.1.1 Revolving Credit Facility. Subject to and upon the terms of this Agreement, the Lenders collectively, but severally, establish a revolving credit facility in favor of the Borrower. The aggregate of all advances under the Revolving Credit Facility is sometimes referred to in this Agreement collectively as the "Revolving Loan". The amount set forth below opposite each Lender's name is herein called such Lender's "Revolving Credit Committed Amount" and the total of each Lender's Revolving Credit Committed Amount is herein called the "Total Revolving Credit Committed Amount". The proportionate share set forth below opposite each Lender's name is herein called such Lender's "Revolving Credit Pro Rata Share": - -------------------------------------------------------------------------------- Revolving Credit Revolving Credit Pro Lender Committed Amount Rata Share - -------------------------------------------------------------------------------- Fleet $12,727,400 18.182% - -------------------------------------------------------------------------------- GE Capital $13,787,900 19.697% - -------------------------------------------------------------------------------- Bank of America $13,787,900 19.697% - -------------------------------------------------------------------------------- Heller $10,606,400 15.152% - -------------------------------------------------------------------------------- PNC $10,606,400 15.152% - -------------------------------------------------------------------------------- LaSalle $8,484,000 12.120% - -------------------------------------------------------------------------------- Total Revolving Credit Committed Amount $70,000,000.00 100.000% - -------------------------------------------------------------------------------- Neither the Agent nor any of the Lenders shall be responsible for the Revolving Credit Commitment of any other Lender, nor will the failure of any Lender to perform its obligations under its Revolving Credit Commitment in any way relieve any other Lender from performing its obligations under its Revolving Credit Commitment. During the Revolving Credit Commitment Period, the Borrower may request advances under the Revolving Credit Facility in accordance with the provisions of this Agreement; provided that after giving effect to the Borrower's request: 51 (a) the outstanding principal balance of each Lender's Pro Rata Share of the Revolving Loan and the Letter of Credit Obligations would not exceed the lesser of (i) such Lender's Pro Rata Share of the Revolving Loan and the Letter of Credit Obligations or (ii) such Lender's Pro Rata Share of the Borrowing Base; and, (b) the aggregate outstanding principal balance of the Revolving Loan and all Letter of Credit Obligations would not exceed the lesser of (i) the Total Revolving Credit Committed Amount or (ii) the Borrowing Base. In addition, the aggregate outstanding principal balance of the Revolving Loan, all Letter of Credit Obligations and the UK Revolving Loan cannot exceed the Total Revolving Credit Committed Amount. 2.1.2 Procedure for Making Advances Under the Revolving Loan. The Borrower may borrow under the Revolving Credit Facility on any Business Day. Advances under the Revolving Loan shall be deposited to a demand deposit account of the Borrower with the Agent or shall be otherwise applied as directed by the Borrower, which direction the Agent may require to be in writing. Not later than 11:00 a.m. (Baltimore City Time) on the date of the requested borrowing, the Borrower shall give the Agent oral or written notice (a "Loan Notice") of the amount and (if requested by the Agent) the purpose of the requested borrowing. Any oral Loan Notice shall be confirmed in writing by the Borrower within three (3) Business Days after the making of the requested advance under the Revolving Loan. At any time within three (3) hours prior to funding, the Borrower may revoke a Loan Notice; provided, that the Borrower shall pay to each Lender, as the case may be, any amounts which may be due to such Lender under Section 2.9.4 (Indemnity) by reason of such Lender having taken action in reliance on the Loan Notice. Upon receipt of any such Loan Notice, the Agent shall promptly notify each Lender of the amount of each advance to be made by such Lender on the requested borrowing date under such Lender's Revolving Credit Commitment. Not later than 1:00 p.m. (Baltimore City Time) on each requested borrowing date for the making of advances under the Revolving Loan, each Lender shall, if it has received timely notice from the Agent of the Borrower's request for such advances, make available to the Agent, in funds immediately available to the Agent at the Agent's office set forth in Section 9.1 (Notices), such Lender's Pro Rata Share of the advances to be made on such date. In addition, the Borrower hereby irrevocably authorizes the Lenders at any time and from time to time, without further request from or notice to the Borrower, to make advances under the Revolving Loan which the Agent, in its sole and absolute discretion, deems necessary or appropriate to protect the interests of the Agent and/or any or all of the Lenders under this Agreement, including, without limitation, advances under the Revolving Loan made to cover debit balances in the Revolving Loan Account, to pay principal of, and/or interest on, any Loan, including any Term Loan, the Obligations (including any Letter of Credit Obligations and any Bond Letter of Credit Obligations), and/or Enforcement Costs, prior to, on, or after the termination of other advances under this Agreement, regardless of whether the outstanding principal amount of the Revolving Loan which the Lenders may advance hereunder exceeds the 52 Total Revolving Credit Committed Amount. The Agent acknowledges and agrees that (a) the obligation of the Lenders to make advances to or for the account of the Borrower pursuant to this paragraph shall be subject to the provisions of Section 8.14 (Dissemination of Information) and (b) no Lender shall have any obligation or commitment to make any advance to or for the account of the Borrower under the Revolving Loan (including any obligation or commitment to reimburse the Agent for advances made by the Agent to or for the account of the Borrower under this paragraph, except for advances made to cover Enforcement Costs for which the Agent has not been duly reimbursed by the Borrower) unless otherwise agreed in writing by such Lender, if and to the extent such Lender's Pro Rata Share of the Revolving Loan and of the Letter of Credit Obligations would exceed, with the making of such advance or reimbursement, such Lender's Revolving Credit Committed Amount. Each Lender, however, shall continue to be obligated to reimburse the Agent for any and all Enforcement Costs incurred by the Agent in accordance with the provisions of this Agreement if and to the extent the Borrower fails to reimburse the Agent for such Enforcement Costs. 2.1.3 Borrowing Base. As used in this Agreement, the term "Borrowing Base" means at any time, an amount equal to the aggregate of (a) eighty-five percent (85%) of the amount of Eligible Domestic Receivables, plus (b) the lesser of (i) sixty-five percent (65%) of the amount of Eligible Domestic Inventory or (ii) Thirty-five Million Dollars ($35,000,000). The Borrowing Base shall be computed based on the Borrowing Base Report most recently delivered to and accepted by the Agent in its reasonable discretion. In the event the Borrower fails to furnish a Borrowing Base Report required by Section 2.1.4 (Borrowing Base Report) the Agent may, in its reasonable discretion exercised from time to time and without limiting other rights and remedies under this Agreement, direct the Lenders to suspend the making of or limit advances under the Revolving Loan. The Borrowing Base shall be reduced by all amounts credited to the Collateral Account (if and to the extent a Collateral Account is required by the terms of this Agreement) since the date of the most recent Borrowing Base Report and by the amount of any Account or any Inventory which was included in the Borrowing Base, but which the Agent determines fails to meet the respective criteria applicable from time to time for Eligible Domestic Receivables or Eligible Domestic Inventory. If at any time the total of the aggregate principal amount of the Revolving Loan and Outstanding Letter of Credit Obligations exceeds the Borrowing Base, a borrowing base deficiency ("Borrowing Base Deficiency") shall exist. Each time a Borrowing Base Deficiency exists, the Borrower, at the sole and absolute discretion of the Agent exercised from time to time, shall pay the Borrowing Base Deficiency ON DEMAND to the Agent for the benefit of the Lenders from time to time. Without implying any limitation on the Agent's discretion with respect to the Borrowing Base, the criteria for Eligible Domestic Receivables and for Eligible Domestic Inventory contained in the respective definitions of Eligible Domestic Receivables and of Eligible Domestic Inventory are in part based upon the business operations of the Borrower and the Subsidiary Guarantors existing on or about the date of this Agreement and upon information and records furnished to the Agent by the Borrower and the Subsidiary Guarantors. If at any time or 53 from time to time hereafter, the business operations of the Borrower and/or any of the Subsidiary Guarantors change in any material respect or such information and records furnished to the Agent are materially incorrect or misleading, the Agent in its reasonable discretion, may at any time and from time to time during the duration of this Agreement change such criteria, add new criteria, make existing criteria less onerous, or remove existing criteria; provided, however, that any such change in, or addition or removal of criteria shall be effective only after notice thereof from the Agent to the Borrower. Except in emergency circumstances, the Agent agrees to use its commercially reasonable efforts to consult with the Borrower prior to the effective date of any addition to, or change in, eligibility criteria, but that the Agent shall have no obligation or duty to reach an agreement with the Borrower as a condition of, or prior to, imposing any changes in, or additions to, eligibility criteria. The Agent shall communicate such changed or additional criteria to the Borrower from time to time either orally or in writing. 2.1.4 Borrowing Base Report. The Borrower will furnish to the Agent no less frequently than monthly, as soon as available, but in any event within twenty (20) days of the end of each fiscal month, and, upon the occurrence of an Event of Default or as otherwise provided in this Section 2.1.4, at such other times as may be requested by the Agent a report of the Borrowing Base in the form attached hereto as Exhibit A-1 (each a "Borrowing Base Report"; collectively, the "Borrowing Base Reports") in the form required from time to time by the Agent, appropriately completed and duly signed. The Borrowing Base Report shall contain the amount and payments on the Accounts, the value of Inventory, and the calculations of the Borrowing Base, all in such detail, and accompanied by such supporting and other information, as the Agent may from time to time reasonably request. Upon the Agent's request and upon the creation of any Accounts, the Borrower will provide the Agent with (a) confirmatory assignment schedules; (b) copies of Account Debtor invoices; (c) evidence of shipment or delivery; and (d) such further schedules, documents and/or information regarding the Accounts and the Inventory as the Agent may reasonably require. The items to be provided under this subsection shall be in form reasonably satisfactory to the Agent, and certified as true and correct by a Responsible Officer, and delivered to the Agent from time to time solely for the Agent's convenience in maintaining records of the Collateral. The Borrower's failure to deliver any such items to the Agent shall not affect, terminate, modify, or otherwise limit the Liens of the Agent and the Lenders in the Collateral. Notwithstanding the foregoing, the Borrower acknowledges and agrees that the Agent, at its option, may require that the Borrower furnish to the Agent weekly and, if requested by the Agent, daily Borrowing Base Reports if any one of the following events occur (i) the Borrower's and Subsidiary Guarantors' collective aggregate availability under the Revolving Loan is at any times less than or equal to Fifteen Million Dollars ($15,000,000), (ii) the Borrower and the Subsidiary Guarantors, on a consolidated basis, incur three (3) consecutive months of net operating losses, or (iii) the occurrence of an Event of Default (each of the aforementioned events are herein called a "Borrowing Base Trigger Event"). The Agent agrees that it shall not be entitled to require that the Borrower furnish weekly or daily Borrowing Base Reports solely as the result of the occurrence of a Borrowing Base Trigger Event, if the Agent fails to so notify the Borrower within ninety (90) days of the date that the Borrower has cured the Borrowing Base Trigger Event to the reasonable satisfaction of the Agent. The foregoing sentence, however, shall not prevent the Agent from later requiring more frequent Borrowing Base Reports following the occurrence of any subsequent Borrowing Base Trigger Event; 54 provided, that the Agent so notifies the Borrower within ninety (90) days of the date that the Borrower has cured the Borrowing Base Trigger Event to the reasonable satisfaction of the Agent. 2.1.5 Revolving Credit Notes. The obligation of the Borrower to pay each Lender's Pro Rata Share of the Revolving Loan, with interest, shall be evidenced by a series of promissory notes (as from time to time extended, amended, restated, supplemented or otherwise modified, collectively the "Revolving Credit Notes" and individually a "Revolving Credit Note"). Each Lender's Revolving Credit Note shall be dated as of the date of this Agreement, shall be payable to the order of such Lender at the times provided in the Revolving Credit Note, and shall be in the principal amount of such Lender's Revolving Credit Committed Amount. The Borrower acknowledges and agrees that, if the outstanding principal balance of the Revolving Loan outstanding from time to time exceeds the aggregate stated amount of the Revolving Credit Notes, the excess shall bear interest at the rates provided from time to time for advances under Revolving Loan evidenced by the Revolving Credit Notes and shall be payable, with accrued interest, ON DEMAND. The Revolving Credit Notes shall not operate as a novation of any of the Obligations or nullify, discharge, or release any such Obligations or the continuing contractual relationship of the parties hereto in accordance with the provisions of this Agreement. 2.1.6 Mandatory Prepayments of Revolving Loan. Subject to the provisions of Section 2.9.4 (Indemnity) and in addition to any mandatory prepayment required by the provisions of Section 2.2.3 (Term Loan Mandatory Prepayments), upon the request of the Agent pursuant to Section 2.1.3 (Borrowing Base) or Section 2.1.12 (Required Availability under the Revolving Credit Facility), the Borrower shall make mandatory prepayments (each a "Revolving Loan Mandatory Prepayment" and collectively, the "Revolving Loan Mandatory Prepayments") of the Revolving Loan at any time and from time to time in order to cover any Borrowing Base Deficiency or to ensure compliance with Section 2.1.12, as applicable. 2.1.7 Optional Prepayments of Revolving Loan. Subject to the provisions of Section 2.9.4 (Indemnity), the Borrower shall have the option at any time and from time to time prepay (each a "Revolving Loan Optional Prepayment" and collectively the "Revolving Loan Optional Prepayments") the Revolving Loan, in whole or in part without premium or penalty. Revolving Loan Optional Prepayments shall be made following a timely and proper written notice to the Agent with respect thereto specifying the date and amount of any intended Revolving Loan Optional Prepayment. The amount to be prepaid shall be paid by the Borrower to the Agent on the date specified for such prepayment. Any amounts repaid or prepaid may be readvanced and reborrowed subject to the provisions of this Agreement. 55 2.1.8 The Collateral Account. Upon demand by the Agent following a Borrowing Base Trigger Event, the Borrower will deposit, or cause to be deposited, all Items of Payment to a bank account designated by the Agent and from which the Agent alone has power of access and withdrawal (the "Collateral Account"). Each deposit shall be made not later than the next Business Day after the date of receipt of the Items of Payment. The Items of Payment shall be deposited in precisely the form received, except for the endorsements of the Borrower where necessary to permit the collection of any such Items of Payment, which endorsement the Borrower hereby agree to make. In the event the Borrower fails to do so, the Borrower hereby authorizes the Agent to make the endorsement in the name of the Borrower. Prior to such a deposit, the Borrower will not commingle any Items of Payment with the Borrower's other funds or property, but will hold them separate and apart in trust and for the account of the Agent for the benefit of the Lenders ratably and the Agent. The Agent agrees that it shall not demand that the Borrower deposit or cause to be deposited all Items of Deposit to the Collateral Account at any time prior to the occurrence of a Borrowing Base Trigger Event. Once the Agent has so made demand on the Borrower, unless otherwise agreed by the Agent in writing, the Borrower shall continue to so deposit or cause to be deposited all Items of Payment to the Collateral Account notwithstanding that subsequent to such demand the Borrowing Base Trigger Event has been cured, waived, otherwise remedied or is no longer applicable. In addition, if the Agent has so made demand, if so directed by the Agent, the Borrower shall direct the mailing of all Items of Payment from its Account Debtors to one or more post-office boxes designated by the Agent, or to such other additional or replacement post-office boxes pursuant to the request of the Agent from time to time (collectively, the "Lockbox"). The Agent shall have unrestricted and exclusive access to the Lockbox. Subject to the provisions of this Section, the Borrower hereby authorizes the Agent to inspect all Items of Payment, and deposit such Items of Payment in the Collateral Account. The Agent reserves the right, exercised in its reasonable discretion from time to time, to provide to the Collateral Account credit prior to final collection of an Item of Payment and to disallow credit for any Item of Payment prior to final collection which is reasonably unsatisfactory to the Agent. In the event Items of Payment are returned to the Agent for any reason whatsoever, the Agent may, in the exercise of its reasonable discretion from time to time, forward such Items of Payment a second time. Any returned Items of Payment shall be charged back to the Collateral Account, the Revolving Loan Account, or other account, as appropriate. The Agent will apply the whole or any part of the collected funds credited to the Collateral Account against the Revolving Loan (or with respect to Items for Payments which are not proceeds of Accounts or Inventory or after a Default or an Event of Default, against any of the Obligations) or credit such collected funds to a depository account of the Borrower with the Agent, the order and method of such application to be in the sole discretion of the Agent. Notwithstanding the foregoing, the Agent agrees that prior to the occurrence of an Event of Default, the Agent shall use its best efforts to apply collected funds credited to the Collateral Account to the Obligations so as to avoid or minimize any amounts which would be due under Section 2.9.4 (Indemnity) by reason of any such application. 56 Notwithstanding the foregoing, the Agent agrees that it shall not be entitled to require establishment of the Collateral Account and/or the Lockbox as the result of the occurrence of a Borrowing Base Trigger Event, if the Agent fails to so notify the Borrower within ninety (90) days of the date that the Borrower has cured the Borrowing Base Trigger Event to the reasonable satisfaction of the Agent. The foregoing sentence, however, shall not prevent the Agent from later requiring establishment of the Collateral Account and/or a Lockbox following the occurrence of any subsequent Borrowing Base Trigger Event; provided, that the Agent so notifies the Borrower within ninety (90) days of the date that the Borrower has cured the Borrowing Base Trigger Event to the reasonable satisfaction of the Agent. 2.1.9 Revolving Loan Account. The Agent will establish and maintain a loan account on its books (the "Revolving Loan Account") to which the Agent will (a) debit (i) the principal amount of each advance under the Revolving Loan made by the Lenders hereunder as of the date made, (ii) the amount of any interest accrued on the Revolving Loan as and when due, and (iii) any other amounts due and payable by the Borrower to the Agent and/or the Lenders from time to time under the provisions of this Agreement in connection with the Revolving Loan, including, without limitation, Enforcement Costs, Fees, late charges, and service, collection and audit fees, as and when due and payable, and (b) credit all payments made by the Borrower to the Agent on account of the Revolving Loan as of the date made including, without limitation, funds credited to the Revolving Loan Account from the Collateral Account. The Agent may debit the Revolving Loan Account for the amount of any Item of Payment that is returned to the Agent unpaid. All credit entries to the Revolving Loan Account are conditional and shall be readjusted as of the date made if final and indefeasible payment is not received by the Agent in cash or solvent credits. The Borrower hereby promises to pay to the order of the Agent for the ratable benefit of the Lenders, on the Revolving Credit Termination Date, an amount equal to the excess, if any, of all debit entries over all credit entries recorded in the Revolving Loan Account under the provisions of this Agreement. Any and all periodic or other statements or reconciliations, and the information contained in those statements or reconciliations, of the Revolving Loan Account shall be presumed conclusively to be correct, and shall constitute an account stated between the Agent, the Lenders and the Borrower unless the Agent receives specific written objection thereto from the Borrower and/or any Lender within thirty (30) Business Days after such statement or reconciliation shall have been sent by the Agent. Any and all periodic or other statements or reconciliations, and the information contained in those statements or reconciliations, of the Revolving Loan Account shall be final, binding and conclusive upon the Borrower in all respects, absent manifest error, unless the Agent receives specific written objection thereto from the Borrower within thirty (30) Business Days after such statement or reconciliation shall have been sent by the Agent. 2.1.10 Revolving Credit Unused Line Fee. The Borrower shall pay to the Agent for the ratable benefit of the Lenders a monthly Revolving Credit Facility fee (collectively, the "Revolving Credit Unused Line Fees" and individually, a "Revolving Credit Unused Line Fee") in an amount equal to the "Revolving Credit Unused Line Fee Amount" as set forth below per annum (calculated on the basis of actual number of days elapsed in a year of 360 days) and calculated on average daily unused and 57 undisbursed portion of the Total Revolving Credit Committed Amount, as in effect from time to time accruing during each calendar month. The accrued and unpaid Revolving Credit Unused Line Fee shall be paid by the Borrower to the Agent on the first day of each calendar month, in arrears, commencing on the first such date following the date hereof, and on the Revolving Credit Termination Date. The Agent and the Lenders agree that usage of the UK Revolving Credit Facility shall be considered usage of the Total Revolving Credit Committed Amount for purposes of this Section 2.1.10. As used herein "Revolving Credit Unused Line Fee Amount" shall be equal to the following amounts during the following times: (i) Fifty (50) basis points per annum when the average daily unused and undisbursed portion of the Total Revolving Credit Committed Amount, as in effect from time to time, is equal to or greater than Thirty Million Dollars ($30,000,000); and (ii) Thirty (30) basis points per annum when the average daily unused and undisbursed portion of the Total Revolving Credit Committed Amount, as in effect from time to time, is less than Thirty Million Dollars ($30,000,000). 2.1.11 Optional Reduction of Revolving Credit Committed Amount. The Borrower shall have the right to reduce permanently (each a "Revolving Credit Optional Reduction" and collectively the "Revolving Credit Optional Reductions") the Total Revolving Credit Committed Amount in effect from time to time in the amount of any integral multiple of Five Hundred Thousand Dollars ($500,000), upon at least five (5) Business Days prior written notice to the Agent specifying the date and amount of such Revolving Credit Optional Reduction; provided, that no Revolving Credit Optional Reduction shall be permitted if, after giving effect thereto and to any Revolving Loan Optional Prepayment made on the effective date thereof, the then outstanding principal amount of the Revolving Loan and Outstanding Letter of Credit Obligations exceeds the Total Revolving Credit Committed Amount as so reduced. Such notice shall be irrevocable as to the amount and date of such Revolving Credit Optional Reduction. After each such Revolving Credit Optional Reduction, the Revolving Credit Unused Line Fee provided for in Section 2.1.10 (Revolving Credit Unused Line Fees) shall be calculated with respect to the Revolving Credit Committed Amount as so reduced. Any Revolving Credit Optional Reduction shall be made to each Lender's Revolving Credit Commitment in accordance with its Pro Rata Share of such Revolving Credit Optional Reduction. 2.1.12 Required Availability under the Revolving Credit Facility. On the Closing Date, the outstanding principal amount of the Revolving Loan shall not exceed an amount equal to (i) the lesser of the Borrowing Base or (ii the Total Revolving Credit Committed Amount, minus Twenty Million Dollars ($20,000,0000). On an average monthly basis thereafter, tested as of the last day of each calendar month, commencing with the first such date following the Closing Date, the outstanding principal amount of the Revolving Loan shall not exceed an amount equal to (i) the lesser of the Borrowing Base, or (ii) the Total Revolving Credit Committed Amount, minus $10,000,000 (the "Required 58 Availability"). The Borrower shall make a Revolving Loan Mandatory Prepayment pursuant to the provisions of Section 2.1.6 to the extent necessary to achieve and maintain compliance with this Section. The failure of the Borrower to make any such Revolving Loan Mandatory Prepayment shall constitute a Default, but shall not constitute an Event of Default unless such failure to make the required Revolving Loan Mandatory Prepayment continues uncured for a period of fourteen (14) days or the Borrower otherwise fails to attain and maintain the Required Availability within such fourteen (14) day period. Section 2.2 The Term Loan A Facility. 2.2.1 Term Loan A Commitments. Subject to and upon the terms of this Agreement, each Lender severally agrees to make a loan (each a "Term Loan A"; and collectively, the "Term Loans A") to the Borrower in the principal amount set forth below opposite such Lender's name (herein called such Lender's "Term Loan A Committed Amount"). The total of each Lender's Term Loan A Committed Amount is herein called the "Total Term Loan A Committed Amount". The proportionate share set forth below opposite each Lender's name is herein called such Lender's "Term Loan A Pro Rata Share": Term Loan A Term Loan A Lender Committed Amount Pro Rata Share ------ ---------------- -------------- Fleet $11,454,660 18.182% GE Capital $12,409,110 19.697% Bank of America $12,409,110 19.697% Heller $ 9,545,760 15.152% PNC $ 9,545,760 15.152% LaSalle $ 7,635,600 12.120% Total Term Loan A Committed Amount: $63,000,000 100% At the request of the Borrower, the Lenders have agreed to increase the Total Term Loan A Committed Amount and to readvance a portion of the principal amount of Term Loans A previously advanced to the Borrower and repaid by the Borrower (the "Term Loan A Increase"), such that as of the Closing Date the aggregate unpaid principal balance of the Term Loans A shall be equal to Sixty-three Million Dollars ($63,000,000). The Borrower covenants and agrees to use the Term Loan A Increase solely to finance the acquisition of the Poly-Seal Stock in accordance with the provisions of the Poly-Seal Stock Purchase Transaction or for other Permitted Uses in connection with the purchase of the Poly-Seal Stock. The obligation of each Lender to make a Term Loan A is several and is limited to its Term Loan A Committed Amount, and such obligation of each Lender is herein called its "Term Loan A Commitment". The Term Loan A Commitment of each of the Lenders are herein collectively referred to as the "Term Loan A Commitments". The Agent shall not be responsible for the Term Loan A Commitment of any Lender; and similarly, none of the Lenders 59 shall be responsible for the Term Loan A Commitment of any of the other Lenders; the failure, however, of any Lender to perform its Term Loan A Commitment shall not relieve any of the other Lenders from the performance of their respective Term Loan A Commitments. 2.2.2 Amortization of Term Loans A; the Term Loan A Notes. The unpaid principal balance of the Term Loans A shall be due and payable in monthly installments of principal on each Installment Payment Date, each in the following amounts during the following periods: Period Amount ------ ------ July 1, 2000, through and and including December 1, 2000 $667,000 January 1, 2001 through and and including January 1, 2002 $1,042,000 January 21, 2002 The then unpaid principal balance Unless sooner paid, the unpaid principal balance of the Term Loans A, together with interest accrued and unpaid thereon, shall be due and payable in full on the first to occur of (i) January 21, 2002 or (ii) the Revolving Credit Termination Date. The obligation of the Borrower to pay the Term Loans A, with interest, shall be evidenced by a series of amended and restated promissory notes (each as from time to time extended, amended, restated, supplemented or otherwise modified, a "Term Loan A Note" and collectively, the "Term Loan A Notes"). Each Term Loan A Note shall be dated as the Closing Date and shall be payable to the order of a Lender at the times provided in the Term Loan A Note, and shall be in the principal amount of such Lender's Term Loan A Committed Amount, including its Pro Rata Share of the Term Loan A Increase. 2.2.3 Mandatory Prepayments of Term Loans A. Subject to the provisions of Section 2.9.4 (Indemnity), the Borrower shall make the following mandatory prepayments (each a "Term Loan A Mandatory Prepayment" and collectively the "Term Loan A Mandatory Prepayments") of the Term Loans A to the Agent for the ratable benefit of the Lenders: (a) To the extent the Net Proceeds of any Asset Disposition (excluding any Asset Disposition by Berry UK or NIM Holdings) (including the sale and issuance of any Securities) by the Borrower or any Subsidiary Guarantor cause the aggregate of all such Asset Dispositions in any fiscal year to exceed Five Hundred Thousand Dollars ($500,000), all of such excess shall be paid to the Agent as a Term Loan A Mandatory Prepayment, or if the Term Loans A have been paid in full shall be paid to the Agent as a Term Loan B Mandatory Prepayment, or if the Term Loans B have been paid in full shall be paid to the Agent as a Revolving Loan Mandatory Prepayment. Notwithstanding the foregoing, the 60 Borrower shall not be required to make a Term Loan A Mandatory Prepayment in connection with (i) any public, private or Rule 144(A) offering of Securities which does not generate any proceeds (other than nominal proceeds), including, for example, the issuance or exercise of warrants with registration rights or the issuance of a resale prospectus for any existing shares of capital stock; (ii) any non-cash Net Proceeds which are Indebtedness for Borrowed Money received by the Borrower or any Subsidiary Guarantor in payment of the purchase price of an Asset which is the subject of a Permitted Asset Disposition; provided that, upon the Agent's demand, the Borrower and/or the Subsidiary Guarantor, as the case may, shall take all such actions as shall be reasonably requested by the Agent to grant to the Agent for its benefit and the ratable benefit of the Lenders a perfected Lien on any such Indebtedness for Borrowed Money and provided further that the principal amount of all such Indebtedness for Borrowed Money shall not exceed at any time in the aggregate Five Hundred Thousand Dollars ($500,000); (iii) the issuance and sale of the Preferred Stock; and (iv) the sale of the property which is subject to the Lien of the Deed of Trust - Arlington Heights; provided that such sale constitutes a Permitted Asset Disposition. (b) Immediately upon closing and consummation of any public or private offering of Indebtedness for Borrowed Money by the Borrower or any Subsidiary Guarantor on or after the Closing Date, the Borrower shall make a Term Loan A Mandatory Prepayment in an amount equal to one hundred percent (100%) of the Net Proceeds of such public or private offering; provided that a Term Loan A Mandatory Prepayment shall not be required with respect to: (i) Indebtedness for Borrowed Money permitted by Section 6.2.4 (Indebtedness), other than subsection (d) of Section 6.2.4; and (ii) the issuance of any Indebtedness by the Borrower or any Subsidiary Guarantor, if (A) such Indebtedness is issued pursuant to and is permitted by subsection (d) of Section 6.2.4 and such Indebtedness constitutes a "Refinancing Indebtedness" as defined in subsection (m) of Section 6.2.4 or (B) if the Net Proceeds of such Indebtedness are used, in whole, to finance a Permitted Acquisition or Capital Expenditures as and to the extent permitted by the provisions of this Agreement; and (C) the 61 aggregate amount of Indebtedness under clauses (i) and (ii) of this subsection (b) does not exceed Twenty Million Dollars ($20,000,000). The Borrower shall pay to the Agent on the date of each required Term Loan A Mandatory Prepayment accrued interest to such date on the amount prepaid. Each partial Term Loan A Mandatory Prepayment shall be applied to all of the remaining principal installments due on account of the Term Loans A on a pro rata basis. 2.2.4 Optional Prepayments of Term Loans A. Subject to the provisions of Section 2.9.4 (Indemnity), the Borrower may, at its option, at any time and from time to time, prepay (each a "Term Loan A Optional Prepayment" and collectively the "Term Loan A Optional Prepayments") the Term Loans A, in whole or in part, upon five (5) Business Days prior written notice, specifying the date and amount of prepayment. The amount to be so prepaid, together with interest accrued thereon to date of prepayment if the amount is intended as a prepayment of the Term Loans A in whole, shall be paid by the Borrower to the Agent for the ratable benefit of the Lenders on the date specified for such prepayment. Partial Term Loan A Optional Prepayments shall be applied to all of the remaining principal installments due on account of the Term Loans A on a pro rata basis. Section 2.3 Term Loan B Facility. 2.3.1 Term Loan B Commitments. Subject to and upon the terms of this Agreement, each Lender severally agrees to make a loan (each a "Term Loan B"; and collectively, the "Term Loans B") to the Borrower in the principal amount set forth below opposite such Lender's name (herein called such Lender's "Term Loan B Committed Amount"). The total of each Lender's Term Loan B Committed Amount is herein called the "Total Term Loan B Committed Amount". The proportionate share set forth below opposite each Lender's name is herein called such Lender's "Term Loan B Pro Rata Share": - -------------------------------------------------------------------------------- Term Loan B Committed Term Loan B Pro Rata Lender Amount Share - -------------------------------------------------------------------------------- Fleet $3,181,850 18.182% - -------------------------------------------------------------------------------- GE Capital $3,446,975 19.697% - -------------------------------------------------------------------------------- Bank of America $3,446,975 19.697% - -------------------------------------------------------------------------------- Heller $2,651,600 15.152% - -------------------------------------------------------------------------------- PNC $2,651,600 15.152% - -------------------------------------------------------------------------------- LaSalle $2,121,000 12.120% - -------------------------------------------------------------------------------- Total Term Loan B Committed Amount $17,500,000 100% - -------------------------------------------------------------------------------- At the request of the Borrower, the Lenders have agreed to increase the Total Term Loan B Committed Amount and to readvance a portion of principal amount of Term Loans B previously 62 advanced to the Borrower and repaid by the Borrower (the "Term Loan B Increase"), such that as of the Closing Date the aggregate unpaid principal balance of the Term Loans B shall be equal to Seventeen Million Five Hundred Thousand Dollars ($17,500,000). The Borrower covenants and agrees to use the Term Loan B Increase solely to finance the acquisition of the Poly-Seal Stock in accordance with the provisions of the Poly-Seal Stock Purchase Transaction or for other Permitted Uses in connection with the purchase of the Poly-Seal Stock. The obligation of each Lender to make a Term Loan B (including its Pro Rata Share of the Term Loan B Increase) is several and is limited to its Term Loan B Committed Amount, and such obligation of each Lender is herein called its "Term Loan B Commitment". The Term Loan B Commitment of each of the Lenders are herein collectively referred to as the "Term Loan B Commitments". The Agent shall not be responsible for the Term Loan B Commitment of any Lender; and similarly, none of the Lenders shall be responsible for the Term Loan B Commitment of any of the other Lenders; the failure, however, of any Lender to perform its Term Loan B Commitment shall not relieve any of the other Lenders from the performance of their respective Term Loan B Commitments. 2.3.2 Amortization of Term Loans B; the Term Loan B Notes. The unpaid principal balance of the Term Loans B shall be due and payable in monthly installments of principal on each Installment Payment Date, each in the amount of $730,000. Unless sooner paid, the unpaid principal balance of the Term Loans B, together with interest accrued and unpaid thereon, shall be due and payable in full on the first to occur of (i) January 21, 2002 or (ii) the Revolving Credit Termination Date. The obligation of the Borrower to pay the Term Loans B, with interest, shall be evidenced by a series of promissory notes (each as from time to time extended, amended, restated, supplemented or otherwise modified, the "Term Loan B Note" and collectively, the "Term Loan B Notes"). Each Term Loan B Note shall be dated as the date hereof and shall be payable to the order of a Lender at the times provided in the Term Loan B Note, and shall be in the principal amount of such Lender's Term Loan B Committed Amount, including its Pro Rata Share of the Term Loan B Increase. 2.3.3 Mandatory Prepayments of Term Loan B. Subject to the provisions of Section 2.9.4 (Indemnity), the Borrower shall make mandatory prepayments (each a "Term Loan B Mandatory Prepayment" and collectively the "Term Loan B Mandatory Prepayments") of the Term Loans B to the Agent for the ratable benefit of the Lenders annually. Each Term Loan B Mandatory Prepayment shall be in the amount of the Excess Cash Flow for the then preceding fiscal year and shall be payable on the date the Borrower shall furnish to the Agent the annual financial statements referred to in Section 6.1.1 (Financial Statements). If, however, the Borrower fails to furnish such financial statements in any given year as and when required, the Borrower shall be required to pay the Term Loan B Mandatory Prepayment payable during such calendar year on the date which is ninety (90) days after the close of the Borrower's then preceding fiscal year. The Borrower shall pay to the Agent on the date of each required Term Loan B Mandatory Prepayment accrued interest to such date on the amount prepaid. Each partial Term Loan B Mandatory Prepayment shall be applied as follows: (i) fifty percent (50%) to principal against the principal installments of the Term Loans 63 B in the inverse order of their maturities and (ii) fifty percent (50%) to all of the remaining principal installments due on account of the Term Loans B on a pro rata basis. 2.3.4 Optional Prepayments of Term Loans B. Subject to the provisions of Section 2.9.4 (Indemnity), the Borrower may, at its option, at any time and from time to time, prepay (each a "Term Loan B Optional Prepayment" and collectively the "Term Loan B Optional Prepayments") the Term Loans B, in whole or in part, upon five (5) Business Days prior written notice, specifying the date and amount of prepayment. The amount to be so prepaid, together with interest accrued thereon to date of prepayment if the amount is intended as a prepayment of the Term Loans B in whole, shall be paid by the Borrower to the Agent for the ratable benefit of the Lenders on the date specified for such prepayment. Partial Term Loan B Optional Prepayments shall be applied as follows: (a) fifty percent (50%) to principal against the principal installments of the Term Loans B in the inverse order of their maturities and (b) fifty percent (50%) to all of the remaining principal installments due on account of the Term Loans B on a pro rata basis. 2.3.5 Term Loan B Fees. The Borrower shall pay to the Agent for the ratable benefit of the Lenders, a quarterly fee, in arrears (collectively, the "Term Loan B Fees" and individually, a "Term Loan B Fee"), in an amount to be determined based on the Pricing Ratio and calculated on the average quarterly outstanding balance of the Term Loans B during such quarterly period, as follows: - ------------------------------------------------------------------------------ Per annum Quarterly Term Pricing Ratio Loan B Fee - ------------------------------------------------------------------------------ Greater than or equal to 6.0 to 1.0 37.5 basis points - ------------------------------------------------------------------------------ Greater than or equal to 5.0 to 1.0, but less than 5.99 to 1.0 25 basis points - ------------------------------------------------------------------------------ Greater than or equal to 4.50 to 1.0, but less than 4.99 to 1.0 12.5 basis points - ------------------------------------------------------------------------------ less than 4.50 to 1.0 0 basis points - ------------------------------------------------------------------------------ Each accrued and unpaid Term Loan B Fee shall be paid by the Borrower to the Agent at the time the quarterly statements are furnished under Section 6.1.1(c) (Quarterly Statements), in arrears, commencing March 31, 2000, and on the maturity date of the Term Loans B; provided, however, in the event that the Borrower fails to deliver such financial statements to the Agent as and when required, the Agent may estimate, in its reasonable discretion and without waiving any Default or Event of Default, the amount of the Term Loan B Fee, which amount shall be due and payable ON DEMAND by the Agent. Section 2.4 The Letter of Credit Facility. 2.4.1 Letters of Credit. Subject to and upon the provisions of this Agreement, and as a part of the Revolving Credit Commitments, the Borrower may obtain standby or commercial letters of credit (as the same may from time to time be amended, supplemented or otherwise modified, 64 each a "Letter of Credit" and collectively the "Letters of Credit") from the Agent from time to time from the Closing Date until the Business Day preceding the Revolving Credit Termination Date. The Borrower will not be entitled to obtain a Letter of Credit unless (a) the Borrower is then able to obtain a Revolving Loan from the Lenders in an amount not less than the proposed stated amount of the Letter of Credit requested by the Borrower, and (b) the sum of the then Outstanding Letter of Credit Obligations (including the amount of the requested Letter of Credit) does not exceed Five Million Dollars ($5,000,000) (the "Letter of Credit Committed Amount"). 2.4.2 Letter of Credit Fees. (a) The Borrower shall pay to the Agent, for its own account, an issuance fee of one-quarter of one percent (1/4%) per annum of the stated amount of the Letter of Credit without regard for provisions contained in the Letters of Credit which may give rise to a reduction in the stated amount thereof unless such reduction has actually occurred (each a "Letter of Credit Fronting Fee" and collectively, the "Letter of Credit Fronting Fees"). The Letter of Credit Fronting Fees shall be paid upon the opening of each Letter of Credit and upon each anniversary thereof, if any. In addition, the Borrower shall pay to the Agent all other reasonable and customary negotiation, processing, transfer or other fees to the extent and as and when required by the provisions of any Letter of Credit Agreement. All Letter of Credit Fronting Fees and all such other additional fees are included in and are a part of the "Fees" payable by the Borrower under the provisions of this Agreement and are for the sole and exclusive benefit of the Agent and are a part of the Agent's Obligations. (b) In addition and in connection with each Letter of Credit, the Borrower shall pay to the Agent for the ratable benefit of the Lenders quarterly, in arrears, a letter of credit fee (each a "Letter of Credit Fee" and collectively the "Letter of Credit Fees") in an amount equal to one hundred seventy-five (175) basis points per annum (calculated on the basis of actual number of days elapsed in a year of 360 days) of the stated amount of each such Letter of Credit without regard for provisions contained in the Letters of Credit which may give rise to a reduction in the stated amount thereof unless such reduction has actually occurred. The accrued and unpaid portion of each Letter of Credit Fee shall be paid by the Borrower to the Agent on the first day of each February, May, August and November, commencing on the first such date following the date hereof, and on the expiration or termination date of the respective Letter of Credit. 2.4.3 Terms of Letters of Credit; Post-Expiration Date Letters of Credit. Each Letter of Credit shall (a) be opened pursuant to a Letter of Credit Agreement and (b) expire on a date not later than the Business Day preceding the Revolving Credit Termination Date; provided, however, if any Letter of Credit does have an expiration date later than the Business Day preceding the Revolving Credit Termination Date (each a "Post-Expiration Date Letter of Credit" and collectively, the "Post-Expiration Date Letters of Credit"), effective as of the Business Day preceding the Revolving Credit Termination Date and without prior notice to or the consent of the Borrower, the Lenders shall make advances under the Revolving Loan for the account of the Borrower in the aggregate stated amount of all such Letters of Credit. The amount of each Lender's advance shall be equal to its Revolving Credit Pro Rata Share of the aggregate stated amount of all such Letters of Credit. The Agent shall deposit the proceeds of such advances into one or more non-interest bearing accounts with and in 65 the name of the Agent and over which the Agent alone shall have exclusive power of access and withdrawal (collectively, the "Letter of Credit Cash Collateral Account"). The Letter of Credit Cash Collateral Account is to be held by the Agent, for the ratable benefit of the Lenders, as additional collateral and security for any Letter of Credit Obligations relating to the Post-Expiration Date Letters of Credit. The Borrower hereby assigns, pledges, grants and sets over to the Agent, for the ratable benefit of the Lenders, a first priority security interest in, and Lien on, all of the funds on deposit in the Letter of Credit Cash Collateral Account, together with any and all proceeds (cash and non-cash) and products thereof as additional collateral and security for the Letter of Credit Obligations relating to the Post-Expiration Date Letters of Credit. The Borrower acknowledges and agrees that the Agent shall be entitled to fund any draw or draft on any Post-Expiration Date Letter of Credit from the monies on deposit in the Letter of Credit Cash Collateral Account without notice to or consent of the Borrower or any of the Lenders so long as the drawing request substantially complied with the requirements of any such Letter of Credit. The Borrower further acknowledges and agrees that the Agent's election to fund any draw or draft on any Post-Expiration Date Letter of Credit from the Letter of Credit Cash Collateral shall in no way limit, impair, lessen, reduce, release or otherwise adversely affect the Borrower's obligation to pay any unpaid Letter of Credit Obligations under or relating to the Post-Expiration Date Letters of Credit. At such time as all Post-Expiration Date Letters of Credit have expired and all Letter of Credit Obligations relating to the Post-Expiration Date Letters of Credit have been paid in full, the Agent agrees to apply the amount of any remaining funds on deposit in the Letter of Credit Cash Collateral Account to the then unpaid balance of the Obligations under the Revolving Credit Facility in such order and manner as the Agent shall determine in its reasonable discretion in accordance with the provisions of this Agreement. Each Letter of Credit shall be issued for the sole purpose of a Permitted Use. The aggregate stated amount of all Letters of Credit at any one time outstanding and issued by the Agent pursuant to the provisions of this Agreement, including, without limitation, any and all Post-Expiration Date Letters of Credit, plus the amount of any unpaid Letter of Credit Fees and Letter of Credit Fronting Fees accrued, and less the aggregate amount of all drafts issued under such Letters of Credit that have been paid by the Agent and for which the Agent has been reimbursed by the Borrower in full in accordance with Section 2.4.5 and the Letter of Credit Agreements, and for which the Agent has no further obligation or commitment to restore all or any portion of the amounts drawn and reimbursed, is herein called the "Outstanding Letter of Credit Obligations". 2.4.4 Procedures for Letters of Credit. The Borrower shall give the Agent written notice at least five (5) Business Days prior to the date on which the Borrower desires the Agent to issue a Letter of Credit. Such notice shall be accompanied by a duly executed Letter of Credit Agreement specifying, among other things: (a) the name and address of the intended beneficiary of the Letter of Credit, (b) the requested stated amount of the Letter of Credit, (c) whether the Letter of Credit is to be revocable or irrevocable, (d) the Business Day on which the Letter of Credit is to be opened and the date on which the Letter of Credit is to expire, (e) the terms of payment of any draft or drafts which may be drawn under the Letter of Credit, and (f) any other terms or provisions the Borrower desire to be contained in the Letter of Credit. Such notice shall also be accompanied by such other information, certificates, confirmations, and other items as the Agent may reasonably require to 66 assure that the Letter of Credit is to be issued in accordance with the provisions of this Agreement and a Letter of Credit Agreement. In the event of any conflict between the provisions of this Agreement and the provisions of a Letter of Credit Agreement, the provisions of this Agreement shall prevail and control unless otherwise expressly provided in the Letter of Credit Agreement. Upon (y) receipt of such notice, (z) payment of all Letter of Credit Fronting Fees and all other Fees payable in connection with the issuance of such Letter of Credit, and (iii) receipt of a duly executed Letter of Credit Agreement, the Agent shall process such notice and Letter of Credit Agreement in accordance with its customary procedures and open such Letter of Credit on the Business Day specified in such notice. 2.4.5 Payments of Letters of Credit. The Borrower hereby promises to pay to the Agent, ON DEMAND and in United States Dollars, the following which are herein collectively referred to as the "Current Letter of Credit Obligations": (a) the amount which the Agent has paid under each draft or draw on a Letter of Credit, whether such demand be in advance of the Agent's payment or for reimbursement for such payment; (b) any and all reasonable charges and expenses which the Agent may pay or incur relative to the Letter of Credit and/or such draws or drafts; and (c) interest on the amounts described in (a) and (b) not paid by the Borrower as and when due and payable under the provisions of (a) and (b) above from the day the same are due and payable until paid in full at a rate per annum equal to the then current highest rate of interest on the Revolving Loan. In addition, the Borrower hereby promises to pay any and all other Letter of Credit Obligations as and when due and payable in accordance with the provisions of this Agreement and the Letter of Credit Agreements. The obligation of the Borrower to pay Current Letter of Credit Obligations and all other Letter of Credit Obligations shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower or any other account party may have or have had against the beneficiary of such Letter of Credit, the Agent, any of the Lenders, or any other Person, including, without limitation, any defense based on the failure of any draft or draw to conform to the terms of such Letter of Credit, any draft or other document proving to be forged, fraudulent or invalid, or the legality, validity, regularity or enforceability of such Letter of Credit, any draft or other documents presented with any draft, any Letter of Credit Agreement, this Agreement, or any of the other Financing Documents, all whether or not the Agent or any of the Lenders had actual or constructive knowledge of the same, and irrespective of any Collateral, security or guarantee therefor or right of offset with respect thereto and irrespective of any other circumstances whatsoever which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for any Letter of Credit Obligations, in bankruptcy or otherwise; provided, however, that the Borrower shall not be obligated to reimburse the Agent for any wrongful payment under such Letter of Credit made as a result of the Agent's willful misconduct or gross negligence. The obligation of the Borrower to pay the Letter of Credit Obligations shall 67 not be conditioned or contingent upon the pursuit by the Agent or any other Person at any time of any right or remedy against any Person which may be or become liable in respect of all or any part of such obligation or against any Collateral, security or guarantee therefor or right of offset with respect thereto. The Letter of Credit Obligations shall continue to be effective, or be reinstated, as the case may be, if at any time payment of all or any portion of the Letter of Credit Obligations is rescinded or must otherwise be restored or returned by the Agent or any of the Lenders upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Person, or upon or as a result of the appointment of a receiver, intervenor, or conservator of, or trustee or similar officer for, any Person, or any substantial part of such Person's property, all as though such payments had not been made. All payments by the Agent and the Lenders with respect to any of the Current Letter of Credit Obligations shall be deemed to be advances under the Revolving Loan contemporaneously as of the date any such Current Letter of Credit Obligations due and owing; the proceeds of each such advance shall be used to pay Current Letter of Credit Obligations in the amount of such advance. Section 2.5 The Bond Letter of Credit Facility. 2.5.1 Bond Letter of Credit. Subject to and upon the provisions of the Bond Letter of Credit Agreement, the Agent has agreed to issue the Nevada Bond Letter of Credit for the period commencing on the First Closing Date and ending on the Revolving Credit Termination Date (the "Bond Letter of Credit Commitment"). The Agent shall have no obligation or commitment to issue or renew the Nevada Bond Letter of Credit if the stated amount of the Nevada Bond Letter of Credit then outstanding or proposed to be issued exceeds Four Million One Hundred Eighty Thousand Eight Hundred Twenty-two Dollars ($4,180,822) (the "Bond Letter of Credit Committed Amount"). 2.5.2 Bond Letter of Credit Fees. (a) The Borrower shall pay to the Agent, for its own account, an issuance fee of one-quarter of one percent (1/4%) per annum of the stated amount of the Nevada Bond Letter of Credit, without regard for provisions contained in the Nevada Bond Letter of Credit which may give rise to a reduction in the stated amount thereof unless such reduction has actually occurred (each a "Bond Letter of Credit Fronting Fee" and collectively, the "Bond Letter of Credit Fronting Fees"). The Bond Letter of Credit Fronting Fees shall be paid upon the issuance of the Nevada Bond Letter of Credit and upon each anniversary thereof, if any. In addition, the Borrower shall pay to the Agent all other reasonable and customary negotiation, processing, transfer or other fees to the extent and as and when required by the provisions of any Bond Letter of Credit Agreement. All Bond Letter of Credit Fronting Fees and all such other additional fees are included in and are a part of the "Fees" payable by the Borrower under the provisions of this Agreement and are for the sole and exclusive benefit of the Agent and are a part of the Agent's Obligations. 68 (b) In addition and in connection with the Nevada Bond Letter of Credit, the Borrower shall pay to the Agent for the ratable benefit of the Lenders quarterly, in arrears, a letter of credit fee (each a "Bond Letter of Credit Fee" and collectively the "Bond Letter of Credit Fees") in an amount equal to one hundred seventy-five (175) basis points per annum (calculated on the basis of actual number of days elapsed in a year of 360 days) of the stated amount of the Nevada Bond Letter of Credit, without regard for provisions contained in the Nevada Bond Letter of Credit which may give rise to a reduction in the stated amount thereof unless such reduction has actually occurred. The accrued and unpaid portion of each Bond Letter of Credit Fee shall be paid by the Borrower to the Agent, for the ratable benefit of the Lenders, on the first day of each February, May, August and November, commencing on the first such date following the date hereof, and on the expiration or termination date of the Nevada Bond Letter of Credit. 2.5.3 Terms of Nevada Bond Letter of Credit. The Nevada Bond Letter of Credit shall (a) be issued pursuant to a Bond Letter of Credit Agreement and (b) expire on a date not later than the Business Day preceding the Revolving Credit Termination Date. The Nevada Bond Letter of Credit shall be issued for the sole purpose of providing collateral for the Nevada Bonds or for any other purposes required by the Nevada Bonds. The stated amount of the Nevada Bond Letter of Credit at any one time outstanding, plus the amount of any unpaid Bond Letter of Credit Fees and Bond Letter of Credit Fronting Fees accrued or scheduled to accrue thereon, and less the aggregate amount of all drafts drawn under or purporting to have been drawn under the Nevada Bond Letter of Credit that have been paid by the Agent and for which the Agent has been reimbursed by the Borrower in full in accordance with Section 2.5.4 (Payments of Bond Letters of Credit) and the Bond Letter of Credit Agreement, and for which the Agent has no further obligation or commitment to restore all or any portion of the amounts drawn and reimbursed, is herein called the "Outstanding Bond Letter of Credit Obligations". 2.5.4 Payments of Bond Letters of Credit. (a) Subject to the provisions of paragraph (b) below, the Borrower hereby promises to pay to the Agent, ON DEMAND and in United States Dollars, the following which are herein collectively referred to as the "Current Bond Letter of Credit Obligations": (i) the amount which the Agent has paid under each draft or draw on the Nevada Bond Letter of Credit, whether such demand be in advance of the Agent's payment or for reimbursement for such payment; (ii) any and all reasonable charges and expenses which the Agent may pay or incur relative to the Nevada Bond Letter of Credit and/or such draws or drafts; and (iii) interest on the amounts described in (i) and (ii) not paid by the Borrower as and when due and payable under the provisions of (i) and (ii) above from the day the same are 69 due and payable until paid in full at a rate per annum equal to the then current highest rate of interest on the Revolving Loan. (b) Notwithstanding the provisions of paragraph (a) above, as long as no Event of Default has occurred any drawing under the Nevada Bond Letter of Credit to purchase Nevada Bonds relating to Nevada Bonds which were tendered for purchase by the holders thereof and which were not remarketed in a timely fashion (each referred to herein as a "Conversion Drawing"), are not required to be reimbursed to the Agent ON DEMAND; provided that the Borrower makes payments of interest to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under Section 2.9 (Interest), and the principal amount of each such Conversion Drawing is repaid in equal quarterly payments over the remaining term of the Bond Letter of Credit Facility; final payment of all outstanding amounts relating to the Nevada Bond Letter of Credit to be made no later than expiry of the Bond Letter of Credit Facility or the Revolving Credit Termination Date, whichever is earlier. In the event that any of the payments required by this paragraph (b) are not made when due or an Event of Default occurs, all of the foregoing amounts shall be immediately due and payable ON DEMAND. (c) In addition, the Borrower hereby promises to pay any and all other Bond Letter of Credit Obligations as and when due and payable in accordance with the provisions of this Agreement and the Bond Letter of Credit Agreements. The obligation of the Borrower to pay Current Bond Letter of Credit Obligations and all other Bond Letter of Credit Obligations shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower or any other account party may have or have had against the beneficiary of such Bond Letter of Credit, the Agent, any of the Lenders, or any other Person, including, without limitation, any defense based on the failure of any draft or draw to conform to the terms of the Nevada Bond Letter of Credit, any draft or other document proving to be forged, fraudulent or invalid, or the legality, validity, regularity or enforceability of the Nevada Bond Letter of Credit, any draft or other documents presented with any draft, any Bond Letter of Credit Agreement, this Agreement, any of the Bond Letter of Credit Agreement Documents, or any of the other Financing Documents, all whether or not the Agent or any of the Lenders had actual or constructive knowledge of the same, and irrespective of any Collateral, security or guarantee therefor or right of offset with respect thereto and irrespective of any other circumstances whatsoever which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for any Bond Letter of Credit Obligations, in bankruptcy or otherwise; provided, however, that the Borrower shall not be obligated to reimburse the Agent for any wrongful payment under the Nevada Bond Letter of Credit made as a result of the Agent's willful misconduct or gross negligence. The obligation of the Borrower to pay the Bond Letter of Credit Obligations shall not be conditioned or contingent upon the pursuit by the Agent or any other Person at any time of any right or remedy against any Person which may be or become liable in respect of all or any part of such obligation or against any Collateral, security or guarantee therefor or right of offset with respect thereto. The Bond Letter of Credit Obligations shall continue to be effective, or be reinstated, as the case may be, if at any time payment of all or any portion of the Bond Letter of Credit Obligations is rescinded or must otherwise be restored or returned by the Agent or any of the Lenders upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any 70 Person, or upon or as a result of the appointment of a receiver, intervenor, or conservator of, or trustee or similar officer for, any Person, or any substantial part of such Person's property, all as though such payments had not been made. Section 2.6 The UK Revolving Credit Facility. 2.6.1 UK Revolving Credit Facility. Subject to and upon the terms of this Agreement, Bank of America, acting through its Sterling LIBOR Lending Office, establishes a revolving credit facility in favor of Berry UK and NIM Holdings in an amount equal to One Million Five Hundred Thousand Pounds Sterling ((pound)1,500,000) (the "UK Revolving Credit Committed Amount"). The aggregate of all advances under the UK Revolving Credit Facility is sometimes referred to in this Agreement collectively as the "UK Revolving Loan". Each Lender hereby irrevocably authorizes Bank of America, acting through its Sterling LIBOR Lending Office, to make advances under the UK Revolving Loan, in accordance with the provisions of this Agreement. Subject to the terms and conditions of Section 2.8.5, as of the date each advance is made by Bank of America, acting through its Sterling LIBOR Lending Office, under the UK Revolving Loan pursuant to the provisions of this Agreement, each Lender shall have an undivided participating interest in (a) the rights and obligations of Bank of America, acting through its Sterling LIBOR Lending Office, in each advance and (b) the UK Obligations with respect to such advance in an amount equal to the proportionate share set forth below opposite each Lender's name (herein called such Lender's "UK Revolving Credit Pro Rata Share"): - -------------------------------------------------------------------------------- UK Revolving Credit UK Revolving Credit Pro Lender Committed Amount Rata Share - -------------------------------------------------------------------------------- Fleet (pound)272,730 18.182% - -------------------------------------------------------------------------------- GE Capital (pound)295,455 19.697% - -------------------------------------------------------------------------------- Bank of America (pound)295,455 19.697% - -------------------------------------------------------------------------------- Heller (pound)227,280 15.152% - -------------------------------------------------------------------------------- PNC (pound)227,280 15.152% - -------------------------------------------------------------------------------- LaSalle (pound)181,800 12.120% - -------------------------------------------------------------------------------- UK Revolving Credit Committed Amount (pound)1,500,000 100% - -------------------------------------------------------------------------------- During the UK Revolving Credit Commitment Period, Berry UK and/or NIM Holdings may request advances under the UK Revolving Credit Facility in accordance with the provisions of this Agreement; provided that after giving effect to a borrowing request the aggregate outstanding principal balance of the UK Revolving Loan would not exceed the lesser of (i) the UK Revolving Credit Committed Amount or (ii) the UK Borrowing Base. All advances under the UK Revolving Loan shall be made in Pounds Sterling. 71 2.6.2 Procedure for Making Advances Under the UK Revolving Loan. Berry UK and/or NIM Holdings may borrow under the UK Revolving Credit Facility on any Business Day. Each advance shall be in an amount at least equal to, and in increments of, One Hundred Fifty Thousand Pounds Sterling ((pound)150,000). Advances under the UK Revolving Loan shall be applied as directed by NIM Holdings, which direction Bank of America, acting through its Sterling LIBOR Lending Office, may require to be in writing. Not later than 10:00 a.m. (London Time) on the date of the requested borrowing, NIM Holdings shall give Bank of America, acting through its Sterling LIBOR Lending Office, a Loan Notice of the amount (denominated in Sterling) and (if requested by Bank of America, acting through its Sterling LIBOR Lending Office) the purpose of the requested borrowing. Any oral Loan Notice shall be confirmed in writing by NIM Holdings, within three (3) Business Days after the making of the requested advance under the UK Revolving Loan. In addition, Berry UK and NIM Holdings each hereby irrevocably authorize Bank of America, acting through its Sterling LIBOR Lending Office, with the consent of the Requisite Lenders, at any time and from time to time, without further request from or notice to Berry UK or NIM Holdings, to make advances under the UK Revolving Loan which Bank of America, acting through its Sterling LIBOR Lending Office, deems necessary or appropriate to protect the interests of Bank of America, acting through its Sterling LIBOR Lending Office (and/or any of the Lenders) under this Agreement, including, without limitation, advances under the UK Revolving Loan made to cover debit balances in the UK Revolving Loan Account, to pay principal of, and/or interest on, any Loan to Berry UK and/or NIM Holdings, the UK Obligations, and/or Enforcement Costs to the extent such Enforcement Costs relate solely to the UK Obligations, prior to, on, or after the termination of other advances under this Agreement, regardless of whether the outstanding principal amount of the UK Revolving Loan which Bank of America, acting through its Sterling LIBOR Lending Office, may advance hereunder exceeds the UK Revolving Credit Committed Amount. Bank of America. acting through its Sterling LIBOR Lending Office, acknowledges and agrees that no Lender shall have any obligation to purchase a participation interest in any such advances unless otherwise agreed in writing by such Lender, if and to the extent such Lender's Pro Rata Share of the UK Revolving Loan would exceed, with the purchase of a participation in any such advances, such Lender's UK Revolving Credit Committed Amount. 2.6.3 UK Borrowing Base. As used in this Agreement, the term "UK Borrowing Base" means at any time, an amount equal to the aggregate of (a) eighty-five percent (85%) of the amount of Eligible UK Receivables, plus (b) the lesser of (i) sixty percent (60%) of the amount of Eligible UK Inventory or (ii) Five Hundred Thousand Pounds Sterling ((pound)500,000). The UK Borrowing Base shall be computed based on the UK Borrowing Base Report most recently delivered to and accepted by Bank of America in its reasonable discretion. In the event Berry UK and NIM Holdings fail to furnish a UK Borrowing Base Report required by Section 2.6.4 (UK Borrowing Base Report), Bank of America, acting through its Sterling LIBOR Lending Office, may suspend the making of or limit advances under the UK Revolving Loan. The UK Borrowing Base shall be reduced by the amount of any Account or any Inventory which 72 was included in the UK Borrowing Base, but which Bank of America, acting through its Sterling LIBOR Lending Office, determines fails to meet the respective criteria applicable from time to time for Eligible UK Receivables or Eligible UK Inventory. If at any time the total of the aggregate principal amount of the UK Revolving Loan exceeds the UK Borrowing Base, a borrowing base deficiency (each a "UK Borrowing Base Deficiency") shall exist. Each time a UK Borrowing Base Deficiency exists, Berry UK and NIM Holdings, at the sole and absolute discretion of Bank of America, acting through its Sterling LIBOR Lending Office, exercised from time to time, jointly and severally shall pay the UK Borrowing Base Deficiency ON DEMAND to Bank of America, acting through its Sterling LIBOR Lending Office, from time to time. Without implying any limitation on Bank of America's discretion, acting through its Sterling LIBOR Lending Office, with respect to the UK Borrowing Base, the criteria for Eligible UK Receivables and for Eligible UK Inventory contained in the respective definitions of Eligible UK Receivables and of Eligible UK Inventory are in part based upon the business operations of NIM Holdings and Berry UK existing on or about the date of this Agreement and upon information and records furnished to Bank of America, acting through its Sterling LIBOR Lending Office, by Berry UK and NIM Holdings. If at any time or from time to time hereafter, the business operations of NIM Holdings or Berry UK changes in any material respect or such information and records furnished to Bank of America, acting through its Sterling LIBOR Lending Office, are materially incorrect or misleading, Bank of America, acting through its Sterling LIBOR Lending Office, in its reasonable discretion, may at any time and from time to time during the duration of this Agreement change such criteria, add new criteria, make existing criteria less onerous, or remove existing criteria; provided, however, that any such change in, or addition or removal of criteria shall be effective only after notice thereof from Bank of America, acting through its Sterling LIBOR Lending Office, to Berry UK or NIM Holdings. Except in emergency circumstances, Bank of America, acting through its Sterling LIBOR Lending Office, agrees to use its commercially reasonable efforts to consult with Berry UK or NIM Holdings prior to the effective date of any addition to, or change in, eligibility criteria, but that Bank of America, acting through its Sterling LIBOR Lending Office, shall have no obligation or duty to reach an agreement with Berry UK or NIM Holdings as a condition of, or prior to, imposing any changes in, or additions to, eligibility criteria. Bank of America, acting through its Sterling LIBOR Lending Office, shall communicate such changed or additional criteria to Berry UK or NIM Holdings from time to time either orally or in writing. 2.6.4 UK Borrowing Base Report. NIM Holdings and Berry UK will furnish to Bank of America, acting through its Sterling LIBOR Lending Office, no less frequently than monthly, as soon as available, but in any event within thirty (30) days of the end of each fiscal month, and, upon the occurrence of an Event of Default or as otherwise provided in this Section 2.6.4, at such other times as may be requested by Bank of America, acting through its Sterling LIBOR Lending Office, a report of the UK Borrowing Base in the form attached hereto as Exhibit A-2 (each a "UK Borrowing Base Report"; collectively, the "UK Borrowing Base Reports") in the form required from time to time by Bank of America, acting through its Sterling LIBOR Lending Office, appropriately completed and duly signed. The UK Borrowing Base Report shall contain 73 the amount and payments on the Accounts included in the UK Borrowing Base, the value of Inventory included in the UK Borrowing Base, and the calculations of the UK Borrowing Base, all in such detail, and accompanied by such supporting and other information, as Bank of America, acting through its Sterling LIBOR Lending Office, may from time to time reasonably request. Upon Bank of America's request, acting through its Sterling LIBOR Lending Office, and upon the creation of any Accounts included in the UK Borrowing Base, NIM Holdings and/or Berry UK, as appropriate, will provide Bank of America, acting through its Sterling LIBOR Lending Office with (a) confirmatory assignment schedules; (b) copies of Account Debtor invoices; (c) evidence of shipment or delivery; and (d) such further schedules, documents and/or information regarding such Accounts and such Inventory as Bank of America, acting through its Sterling LIBOR Lending Office, may reasonably require. The items to be provided under this subsection shall be in form reasonably satisfactory to Bank of America, acting through its Sterling LIBOR Lending Office, and certified as true and correct by a Responsible Officer, and delivered to Bank of America, acting through its Sterling LIBOR Lending Office, from time to time solely for Bank of America's convenience, acting through its Sterling LIBOR Lending Office, in maintaining records of the UK Collateral. The failure of NIM Holdings or Berry UK to deliver any such items to Bank of America, acting through its Sterling LIBOR Lending Office, shall not affect, terminate, modify, or otherwise limit the Liens of Bank of America, acting through its Sterling LIBOR Lending Office, in the UK Collateral. Notwithstanding the foregoing, Berry UK and NIM Holdings acknowledge and agree that Bank of America, acting through its Sterling LIBOR Lending Office, at its option, may require that NIM Holdings and Berry UK furnish to Bank of America, acting through its Sterling LIBOR Lending Office, weekly and, if requested by Bank of America, Sterling LIBOR Lending Office, daily UK Borrowing Base Reports upon the occurrence of a Borrowing Base Trigger Event. Bank of America, acting through its Sterling LIBOR Lending Office, agrees that it shall not be entitled to require that NIM Holdings or Berry UK furnish weekly or daily UK Borrowing Base Reports solely as the result of the occurrence of a Borrowing Base Trigger Event, if Bank of America, acting through its Sterling LIBOR Lending Office, fails to so notify Berry UK and NIM Holdings within ninety (90) days of the date that the Borrower has cured the Borrowing Base Trigger Event to the reasonable satisfaction of Bank of America, acting through its Sterling LIBOR Lending Office. The foregoing sentence, however, shall not prevent Bank of America from later requiring more frequent UK Borrowing Base Reports following the occurrence of any subsequent Borrowing Base Trigger Event; provided, that Bank of America, acting through its Sterling LIBOR Lending Office, so notifies the Borrower within ninety (90) days of date that the Borrower has cured the Borrowing Base Trigger Event to the reasonable satisfaction of Bank of America, acting through its Sterling LIBOR Lending Office. 2.6.5 UK Revolving Credit Note. The joint and several obligation of Berry UK and NIM Holdings to pay the UK Revolving Loan, with interest, shall be evidenced by a promissory note (as from time to time extended, amended, restated, supplemented or otherwise modified, the "UK Revolving Credit Note"). The UK Revolving Credit Note shall be dated as of the date of this Agreement, shall be payable to the order of Bank of America, acting through its Sterling LIBOR Lending Office, at the times provided in the UK Revolving Credit Note, and shall be in the principal amount of the UK Revolving Credit Committed Amount. Berry UK and NIM Holdings acknowledge and agree that, if the outstanding principal balance of the UK Revolving Loan 74 outstanding from time to time exceeds the stated amount of the UK Revolving Credit Note, the excess shall bear interest at the rates provided from time to time for advances under the UK Revolving Loan evidenced by the UK Revolving Credit Note and shall be payable, with accrued interest, ON DEMAND to Bank of America, acting through its Sterling LIBOR Lending Office. The UK Revolving Credit Note shall not operate as a novation of any of the UK Obligations or nullify, discharge, or release any such UK Obligations or the continuing contractual relationship of the parties hereto in accordance with the provisions of this Agreement. 2.6.6 Mandatory Prepayments of UK Revolving Loan. Subject to the provisions of Section 2.9.4 (Indemnity), upon the request of Bank of America, acting through its Sterling LIBOR Lending Office, pursuant to Section 2.6.3 (UK Borrowing Base), Berry UK and NIM Holdings jointly and severally shall make mandatory prepayments (each a "UK Revolving Loan Mandatory Prepayment" and collectively, the "UK Revolving Loan Mandatory Prepayments") of the UK Revolving Loan at any time and from time to time in order to cover any UK Borrowing Base Deficiency. 2.6.7 Optional Prepayments of UK Revolving Loan. Subject to the provisions of Section 2.9.4 (Indemnity), Berry UK and NIM Holdings shall have the option at any time and from time to time prepay (each a "UK Revolving Loan Optional Prepayment" and collectively the "UK Revolving Loan Optional Prepayments") the UK Revolving Loan, in whole or in part without premium or penalty. UK Revolving Loan Optional Prepayments shall be made following a timely and proper written notice to Bank of America, acting through its Sterling LIBOR Lending Office, with respect thereto specifying the date and amount of any intended UK Revolving Loan Optional Prepayment. The amount to be prepaid shall be paid by Berry UK or NIM Holdings to Bank of America, acting through its Sterling LIBOR Lending Office, on the date specified for such prepayment. Any amounts repaid or prepaid may be readvanced and reborrowed subject to the provisions of this Agreement. 2.6.8 UK Revolving Loan Account. Bank of America, acting through its Sterling LIBOR Lending Office, will establish and maintain a loan account on its books (the "UK Revolving Loan Account") to which Bank of America, acting through its Sterling LIBOR Lending Office, will (a) debit (i) the principal amount of each advance under the UK Revolving Loan made by Bank of America, acting through its Sterling LIBOR Lending Office, hereunder, as of the date made, (ii) the amount of any interest accrued on the UK Revolving Loan as and when due, and (iii) any other amounts due and payable by Berry UK and/or NIM Holdings to Bank of America, acting through its Sterling LIBOR Lending Office, from time to time under the provisions of this Agreement in connection with the UK Obligations, as and when due and payable, and (b) credit all payments made by Berry UK and/or NIM Holdings to Bank of America, acting through its Sterling LIBOR 75 Lending Office, on account of the UK Revolving Loan as of the date made. All credit entries to the UK Revolving Loan Account are conditional and shall be readjusted as of the date made if final and indefeasible payment is not received by Bank of America, at its Sterling LIBOR Lending Office, in cash or solvent credits. Berry UK and NIM Holdings hereby jointly and severally promise to pay to the order of Bank of America, acting through its Sterling LIBOR Lending Office, on the UK Revolving Credit Termination Date, an amount equal to the excess, if any, of all debit entries over all credit entries recorded in the UK Revolving Loan Account under the provisions of this Agreement. Any and all periodic or other statements or reconciliations, and the information contained in those statements or reconciliations, of the UK Revolving Loan Account shall be presumed conclusively to be correct, and shall constitute an account stated between Bank of America, acting through its Sterling LIBOR Lending Office, NIM Holdings and Berry UK unless Bank of America, acting through its Sterling LIBOR Lending Office, receives specific written objection thereto from Berry UK or NIM Holdings within thirty (30) Business Days after such statement or reconciliation shall have been sent by Bank of America, acting through its Sterling LIBOR Lending Office. Any and all periodic or other statements or reconciliations, and the information contained in those statements or reconciliations, of the UK Revolving Loan Account shall be final, binding and conclusive upon Berry UK and NIM Holdings in all respects, absent manifest error, unless Bank of America, acting through its Sterling LIBOR Lending Office, receives specific written objection thereto from Berry UK or NIM Holdings within thirty (30) Business Days after such statement or reconciliation shall have been sent by Bank of America, acting through its Sterling LIBOR Lending Office. 2.6.9 UK Revolving Credit Facility Fee. Berry UK and NIM Holdings jointly and severally shall pay to Bank of America, acting through its Sterling LIBOR Lending Office, in Pounds Sterling (for the benefit of Bank of America, acting through its Sterling LIBOR Lending Office, and each of the Lenders) annually, in advance, a UK Revolving Credit Facility fee (collectively, the "UK Revolving Credit Facility Fees" and individually, a "UK Revolving Credit Facility Fee") in an amount equal to one-eighth of one percent (1/8%) per annum (calculated on the basis of actual number of days elapsed in a year of 365 days) of the UK Revolving Credit Committed Amount in effect from time to time. The accrued and unpaid UK Revolving Credit Facility Fee shall be paid by Berry UK and NIM Holdings to Bank of America, acting through its Sterling LIBOR Lending Office, on July 2, 2000 and on each anniversary date thereof. Bank of America, acting through its Sterling LIBOR Lending Office, agrees to remit to each Lender its UK Revolving Credit Pro Rata Share of each UK Revolving Credit Facility Fee promptly following the receipt by Bank of America, acting through its Sterling LIBOR Lending Office, in collected funds and in Pounds Sterling, of payment from Berry UK and/or NIM Holdings of such UK Revolving Credit Facility Fee. Section 2.7 UK Term Loan Facility. 2.7.1 UK Term Loan Commitments. Subject to and upon the terms of this Agreement, Bank of America, acting through its Sterling LIBOR Lending Office, has made a loan (the "UK Term Loan") to NIM Holdings in the principal amount of Four Million Five Hundred Thousand Pounds Sterling ((pound)4,500,000) (the "UK Term Loan Committed Amount"). Subject to the terms and conditions of Section 2.8.5, each Lender has an undivided participating interest in (a) the rights and obligations of Bank of America, acting through its Sterling LIBOR Lending Office, in the UK Term Loan, and (b) the UK Obligations with respect to such advance in an amount equal to the 76 proportionate share set forth below opposite each Lender's name (herein called such Lender's "UK Term Loan Pro Rata Share"), which amounts are calculated as of May 2, 2000: - -------------------------------------------------------------------------------- UK Term Loan Committed UK Term Loan Pro Rata Lender Amount Share - -------------------------------------------------------------------------------- Fleet (pound)532,798.75 18.182% - -------------------------------------------------------------------------------- GE Capital (pound)577,193.76 19.697% - -------------------------------------------------------------------------------- Bank of America (pound)577,193.76 19.697% - -------------------------------------------------------------------------------- Heller (pound)444,008.73 15.152% - -------------------------------------------------------------------------------- PNC (pound)444,008.73 15.152% - -------------------------------------------------------------------------------- LaSalle (pound)355,160.09 12.120% - -------------------------------------------------------------------------------- UK Term Loan Committed Amount (pound)2,930,363.82 100% - -------------------------------------------------------------------------------- The obligation of Bank of America, acting through its Sterling LIBOR Lending Office, to make the UK Term Loan and each Lender to purchase a participation interest in the UK Term Loan is herein called its "UK Term Loan Commitment". The UK Term Loan Commitment of Bank of America, acting through its Sterling LIBOR Lending Office, and each of the Lenders are herein collectively referred to as the "UK Term Loan Commitments". None of the Lenders shall be responsible for the UK Term Loan Commitment of any of the other Lenders; the failure, however, of any Lender to perform its UK Term Loan Commitment shall not relieve any of the other Lenders from the performance of their respective UK Term Loan Commitments. As of the Closing Date, the unpaid principal balance of the UK Term Loan is (pound)2,930,363.82. 2.7.2 Amortization of UK Term Loan; the UK Term Loan Note. The unpaid principal balance of the UK Term Loan shall be due and payable in monthly installments of principal on the first day of each calendar month, each in the following amounts during the following periods: Period Amount ------ ------ April 1, 2000 through and including September 1, 2000 (pound)70,835 All times thereafter (pound)80,835 Unless sooner paid, the unpaid principal balance of the UK Term Loan, together with interest accrued and unpaid thereon, shall be due and payable in full on the UK Revolving Credit Termination Date. The obligation of NIM Holdings to pay the UK Term Loan, with interest, shall be evidenced by a promissory note (as from time to time extended, amended, restated, supplemented or otherwise modified, the "UK Term Loan Note"). The UK Term Loan Note 77 shall be dated as the date hereof and shall be payable to the order of Bank of America, acting through its Sterling LIBOR Lending Office, at the times provided in the UK Term Loan Note, and shall be in the principal amount of the UK Term Loan Committed Amount. 2.7.3 Mandatory Prepayments of UK Term Loan. Subject to the provisions of Section 2.9.4 (Indemnity), NIM Holdings shall make mandatory prepayments (each a "UK Term Loan Mandatory Prepayment" and collectively the "UK Term Loan Mandatory Prepayments") of the UK Term Loan to Bank of America, acting through its Sterling LIBOR Lending Office, annually. Each UK Term Loan Mandatory Prepayment shall be in the amount of (a) any portion of the purchase price for the stock issued by Berry UK which is returned to NIM Holdings or the Borrower as a purchase price adjustment resulting from any event other than the indemnification of losses resulting from a breach of a representation or warranty by the Seller, all in accordance with the terms of the purchase agreement governing NIM Holdings' acquisition of Berry UK and shall be payable on the date NIM Holdings or the Borrower receives such amount from or on behalf of the seller of the Berry UK stock and (b) the UK Excess Cash Flow for the then preceding fiscal year and shall be payable on the date the Borrower shall furnish to the Agent the annual financial statements referred to in Section 6.1.1 (Financial Statements). If, however, the Borrower fails to furnish such financial statements in any given year as and when required, NIM Holdings shall be required to pay the UK Term Loan Mandatory Prepayment payable during such calendar year on the date which is ninety (90) days after the close of NIM Holdings's then preceding fiscal year. NIM Holdings shall pay to Bank of America, acting through its Sterling LIBOR Lending Office, on the date of each required UK Term Loan Mandatory Prepayment accrued interest to such date on the amount prepaid. Each partial UK Term Loan Mandatory Prepayment shall be applied against the principal installments of the UK Term Loan in the inverse order of their maturities. In addition to the foregoing, the Borrower shall make a UK Term Loan Mandatory Prepayment on behalf of NIM Holdings to the extent of any Excess Cash Flow remaining after payment of the Term Loans B in full. 2.7.4 Optional Prepayments of UK Term Loan. Subject to the provisions of Section 2.9.4 (Indemnity), NIM Holdings may, at its option, at any time and from time to time, prepay (each a "UK Term Loan Optional Prepayment" and collectively the "UK Term Loan Optional Prepayments") the UK Term Loan, in whole or in part, upon five (5) Business Days prior written notice, specifying the date and amount of prepayment. The amount to be so prepaid, together with interest accrued thereon to date of prepayment if the amount is intended as a prepayment of the UK Term Loan in whole, shall be paid by NIM Holdings to Bank of America at its Sterling LIBOR Lending Office on the date specified for such prepayment. Partial UK Term Loan Optional Prepayments shall be applied against the principal installments of the UK Term Loan in the inverse order of their maturities. 78 Section 2.8 General Letter of Credit Provisions and Participation Provisions for UK Credit Facilities. 2.8.1 Procedures for Letters of Credit and Bond Letters of Credit. If any change after the Closing Date in any law or regulation or in the interpretation thereof by any court or other Governmental Authority charged with the administration thereof shall either (a) impose, modify or deem applicable any reserve, special deposit or similar requirement against Letters of Credit or Bond Letters of Credit issued by the Agent, or (b) impose on the Agent or any of the Lenders any other condition regarding this Agreement, any Letter of Credit or any Bond Letter of Credit, and the result of any event referred to in clauses (a) or (b) above shall be to increase the cost to the Agent of issuing, maintaining or extending the Letter of Credit or the Bond Letter of Credit or the cost to any of the Lenders of funding any obligation under or in connection with the Letter of Credit or the Bond Letter of Credit (which increase in cost shall be the result of the Agent's reasonable allocation of the aggregate of such cost increases resulting from such events), then, upon demand by the Agent, the Borrower shall immediately pay to the Agent from time to time as specified by the Agent, additional amounts which shall be sufficient to compensate the Agent and the Lenders for such increased cost, together with interest on each such amount from the date demanded until payment in full thereof at a rate per annum equal to the then highest current rate of interest on the Revolving Loan. A certificate as to such increased cost incurred by the Agent and/or any of the Lenders, submitted by the Agent to the Borrower, shall be conclusive, absent manifest error. 2.8.2 General Letter of Credit Provisions. The Borrower hereby instructs the Agent to pay any draft complying with the terms of any Letter of Credit or any Bond Letter of Credit irrespective of any instructions of the Borrower to the contrary. The Borrower assume all risks of the acts and omissions of the beneficiary and other users of any Letter of Credit or any Bond Letter of Credit. The Agent, the Lenders and their respective branches, Affiliates and/or correspondents shall not be responsible for and the Borrower hereby indemnifies and holds the Agent, the Lenders and their respective branches, Affiliates and/or correspondents harmless from and against all liability, loss and expense (including reasonable attorney's fees and costs) incurred by the Agent, the Lenders and/or their respective branches, Affiliates and/or correspondents relative to and/or as a consequence of (a) any failure by the Borrower to perform the agreements hereunder and under any Letter of Credit Agreement or under any Bond Letter of Credit Agreement, (b) any Letter of Credit Agreement, any Bond Letter of Credit Agreement, this Agreement, any Letter of Credit, any Bond Letter of Credit and any draft, draw and/or acceptance under or purported to be under any Letter of Credit or any Bond Letter of Credit, (c) any action taken or omitted by the Agent, any of the Lenders and/or any of their respective branches, Affiliates and/or correspondents at the request of the Borrower, other than acts of willful misconduct and gross negligence, (d) any failure or inability to perform in accordance with the terms of any Letter of Credit or any Bond Letter of Credit by reason of any control or restriction rightfully or wrongfully exercised by any defacto or dejure Governmental Authority, group or individual asserting or exercising governmental or paramount powers, and/or (e) any consequences arising from causes beyond the control of the Agent, any of the Lenders and/or any of their respective branches, Affiliates and/or correspondents. 79 Except for willful misconduct and gross negligence, the Agent, the Lenders and their respective branches, Affiliates and/or correspondents, shall not be liable or responsible in any respect for any (a) error, omission, interruption or delay in transmission, dispatch or delivery of any one or more messages or advices in connection with any Letter of Credit or any Bond Letter of Credit, whether transmitted by cable, telegraph, mail or otherwise and despite any cipher or code which may be employed, and/or (b) action, inaction or omission which may be taken or suffered by it or them in good faith or through inadvertence in identifying or failing to identify any beneficiary or otherwise in connection with any Letter of Credit or any Bond Letter of Credit. Any Letter of Credit or any Bond Letter of Credit may be amended, modified or revoked only upon the receipt by the Agent from the Borrower and the beneficiary (including any transferee and/or assignee of the original beneficiary), of a written consent and request therefor. If any Laws, order of court and/or ruling or regulation of any Governmental Authority of the United States (or any state thereof) and/or any country other than the United States permits a beneficiary under a Letter of Credit or a Bond Letter of Credit to require the Agent, the Lenders and/or any of their respective branches, Affiliates and/or correspondents to pay drafts under or purporting to be under a Letter of Credit or a Bond Letter of Credit after the expiration date of the Letter of Credit or the Bond Letter of Credit, respectively, the Borrower shall reimburse the Agent and the Lenders, as appropriate, for any such payment pursuant to provisions of Section 2.4.5 (Payments of Letter of Credit) or Section 2.5.4 (Payments of Bond Letters of Credit), as appropriate. Except as may otherwise be specifically provided in a Letter of Credit, a Bond Letter of Credit, a Letter of Credit Agreement or a Bond Letter of Credit Agreement, the laws of the State of Maryland and the Uniform Customs and Practice for Documentary Credits, 1995 Revision, International Chamber of Commerce Publication No. 500 shall govern the Letters of Credit and the Bond Letters of Credit. The Laws, rules, provisions and regulations of the Uniform Customs and Practice for Documentary Credits are hereby incorporated by reference. In the event of a conflict between the Uniform Customs and Practice for Documentary Credits and the laws of the State of Maryland, the Uniform Customs and Practice for Documentary Credits shall prevail. 2.8.3 Participations in the Letters of Credit and the Bond Letters of Credit. Each Lender hereby irrevocably authorizes the Agent to issue Letters of Credit and the Bond Letters of Credit in accordance with the provisions of this Agreement. As of the date each Letter of Credit or each Bond Letter of Credit is opened or issued by the Agent pursuant to the provisions of this Agreement, each Lender shall have an undivided participating interest in (a) the rights and obligations of the Agent under each such Letter of Credit and each such Bond Letter of Credit, and (b) the Outstanding Letter of Credit Obligations and the Outstanding Bond Letter of Credit Obligations of the Borrower with respect to such Letter of Credit and Bond Letter of Credit, as appropriate, in an amount equal to each Lender's Revolving 80 Credit Pro Rata Share of such Outstanding Letter of Credit Obligations and Outstanding Bond Letter of Credit Obligations. 2.8.4 Payments by the Lenders to the Agent. If the Borrower fails to pay to the Agent any Current Letter of Credit Obligations or any Current Bond Letter of Credit Obligations as and when due and payable, the Agent shall promptly notify each of the Lenders and shall demand payment from each of the Lenders such Lender's Revolving Credit Pro Rata Share of such unpaid Current Letter of Credit Obligations and unpaid Current Bond Letter of Credit Obligations, as appropriate. In addition, if any amount paid to the Agent on account of Current Letter of Credit Obligations or any Current Bond Letter of Credit Obligations is rescinded or required to be restored or turned over by the Agent upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or upon or as a result of the appointment of a receiver, intervenor, trustee, conservator or similar officer for the Borrower, or is otherwise not indefeasibly covered by an advance under the Revolving Loan, the Agent shall promptly notify each of the Lenders and shall demand payment from each of the Lenders of its Revolving Credit Pro Rata Share of its portion of the Current Letter of Credit Obligations and/or Current Bond Letter of Credit Obligations to be remitted to the Borrower. Each of the Lenders irrevocably and unconditionally agrees to honor any such demands for payment under this Section and promises to pay to the Agent's account on the same Business Day as demanded the amount of its Revolving Credit Pro Rata Share of the Current Letter of Credit Obligations and Current Bond Letter of Credit Obligations, as appropriate, in immediately available funds, without any setoff, counterclaim or deduction of any kind. Any payment by a Lender hereunder shall in no way release, discharge or lessen the obligation of the Borrower to pay Current Letter of Credit Obligations or to pay Current Bond Letter of Credit Obligations to the Agent in accordance with the provisions of this Agreement. The obligation of each of the Lenders to remit the amounts of its Revolving Credit Pro Rata Share of Current Letter of Credit Obligations and Current Bond Letter of Credit Obligations for the account of the Agent pursuant to this Section shall be unconditional and irrevocable under any and all circumstances and may not be terminated, suspended or delayed for any reason whatsoever, provided that all payments of such amounts by each of the Lenders shall be without prejudice to the rights of each of the Lenders with respect to the Agent's alleged willful misconduct. Any claim any Lender may have against the Agent as a result of the Agent's alleged willful misconduct may be brought by such Lender in a separate action against the Agent but may not be used as a defense to payment under the provisions of this Section. No failure of any Lender to remit the amount of its Revolving Credit Pro Rata Share of Current Letter of Credit Obligations and/or Current Bond Letter of Credit Obligations to the Agent pursuant to this Section shall affect the obligations of the Agent under any Letter of Credit or under any Bond Letter of Credit, and if any Lender does not remit to the Agent the amount of its Revolving Credit Pro Rata Share of Current Letter of Credit Obligations and/or Current Bond Letter of Credit Obligations on the same day as demanded, then without limiting such Lender's obligation to transmit funds on the same Business Day as demanded, such Lender shall be obligated to pay, on demand of the Agent and without setoff, counterclaim or 81 deduction of any kind whatsoever interest on the unpaid amount at the Federal Funds Rate for each day from the date such amount shall be due and payable to the Agent until the date such amount shall have been paid in full to the Agent by such Lender. No Lender shall have any obligation to pay to the Agent such Lender's Pro Rata Share of unpaid Current Letter of Credit Obligations and/or unpaid Current Bond Letter of Credit Obligations, if the Borrower shall not be obligated to reimburse the Agent for such unpaid Current Letter of Credit Obligations and/or unpaid Current Bond Letter of Credit Obligations, respectively, because of the Agent's wrongful payment of a Letter of Credit and/or Bond Letter of Credit made as a result of the Agent's willful misconduct or gross negligence. 2.8.5 Participations in the UK Credit Facilities. Each Lender hereby irrevocably authorizes Bank of America, acting through its Sterling LIBOR Lending Office, to make advances under the UK Revolving Loan and to make the UK Term Loan in accordance with the provisions of this Agreement. As of the date each such Loan is made, each Lender shall have an undivided participating interest in (a) the rights and obligations of Bank of America, acting through its Sterling LIBOR Lending Office, under each such Loan, and (b) the UK Obligations with respect to such Loan, in an amount equal to each Lender's Pro Rata Share thereof, subject to the rights of Bank of America, acting through its Sterling LIBOR Lending Office, to receive and retain payment of all or a portion of the interest on the UK Obligations as set forth in this Section. If Berry UK or NIM Holdings fail to pay to Bank of America, acting through its Sterling LIBOR Lending Office, any UK Obligations as and when due and payable, Bank of America, acting through its Sterling LIBOR Lending Office, shall promptly notify each of the Lenders and shall demand payment from each of the Lenders of such Lender's Pro Rata Share of such unpaid UK Obligations. In addition, if any amount paid to Bank of America, acting through its Sterling LIBOR Lending Office, on account of the UK Obligations is rescinded or required to be restored or turned over by Bank of America, acting through its Sterling LIBOR Lending Office, upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Berry UK or NIM Holdings or upon or as a result of the appointment of a receiver, intervenor, trustee, conservator or similar officer for Berry UK or NIM Holdings, Bank of America, acting through its Sterling LIBOR Lending Office, shall promptly notify each of the Lenders and shall demand payment from each of the Lenders of its Pro Rata Share of its portion of the UK Obligations to be remitted to Berry UK or NIM Holdings. Each of the Lenders irrevocably and unconditionally agrees to honor any such demands for payment under this Section and promises to pay to the account of Bank of America, acting through its Sterling LIBOR Lending Office, on the same Business Day as demanded the amount of its Pro Rata Share of the UK Obligations in Pounds Sterling, in immediately available funds, without any setoff, counterclaim or deduction of any kind. Any payment by a Lender hereunder shall in no way release, discharge or lessen the obligation of Berry UK or NIM Holdings to pay the UK Obligations to Bank of America, acting through its Sterling LIBOR Lending Office, in accordance with the provisions of this Agreement. The date on which a payment is made by a Lender to Bank of America, acting through its Sterling LIBOR Lending Office, shall be referred to as a "UK Payment Date". The obligation of each of the Lenders to remit the amounts of its Pro Rata Share of the UK Obligations for the account of Bank of America, acting through its Sterling 82 LIBOR Lending Office, pursuant to this Section shall be unconditional and irrevocable under any and all circumstances and may not be terminated, suspended or delayed for any reason whatsoever, provided that all payments of such amounts by each of the Lenders shall be without prejudice to the rights of each of the Lenders with respect to the alleged willful misconduct of Bank of America, acting through its Sterling LIBOR Lending Office. Any claim any Lender may have against Bank of America, acting through its Sterling LIBOR Lending Office, as a result of the alleged willful misconduct of Bank of America, acting through its Sterling LIBOR Lending Office, may be brought by such Lender in a separate action against Bank of America, acting through its Sterling LIBOR Lending Office, but may not be used as a defense to payment under the provisions of this Section. All interest on the unpaid principal balance of the UK Obligations shall be payable to, and retained by, Bank of America, acting through its Sterling LIBOR Lending Office, except with respect to those UK Obligations for which Bank of America, acting through its Sterling LIBOR Lending Office, has demanded and received payment from a Lender pursuant to the provisions of this Section (each a "UK Lender Payment"), in which case, the Lender making such payment shall be entitled to receive from Berry UK and NIM Holdings all interest payable on the UK Obligations represented by such UK Lender Payment at all times from and after the UK Payment Date for such UK Lender Payment, excluding, however, any portion of the UK Obligations consisting of the Mandatory Liquid Assets Cost Rate on such UK Obligations (the "Lender's Share of UK Interest"). Any payments received by Bank of America, acting through its Sterling LIBOR Lending Office, which are payable to a Lender shall be paid to such Lender in Sterling in accordance with all payments to be made by the Agent to a Lender under the provisions of Section 2.12. Notwithstanding the foregoing, Bank of America, acting through its Sterling LIBOR Lending Office, agrees that if the Mandatory Liquid Assets Cost Rate payable by Bank of America, acting through its Sterling LIBOR Lending Office, to the Bank of England is decreased as a result of a UK Lender Payment made by a Lender and such Lender as a result must pay a Mandatory Liquid Assets Cost Rate, such Lender shall be entitled to its Pro Rata Share of the Mandatory Liquid Assets Cost Rate relating to such UK Lender Payment. Except to the extent that Bank of America, acting through its Sterling LIBOR Lending Office, shall have made demand on the Lenders for payment of their Pro Rata Share of the UK Obligations (the "UK Obligations Demand Date"), Bank of America, acting through its Sterling LIBOR Lending Office, shall remit to each Lender from time to time (but at least once monthly) such Lender's Pro Rata Share of that portion of the interest paid to, and received by, Bank of America, acting through its Sterling LIBOR Lending Office, in collected funds on account of such Lender's unfunded UK Obligations calculated at the Applicable Margin (excluding the Mandatory Liquid Assets Cost Rate) for such UK Obligations only; Bank of America, acting through its Sterling LIBOR Lending Office, shall retain all interest calculated at the LIBOR Base Rate. Such payments shall be payable to the Lenders in consideration of their agreement to purchase a participation interest in the UK Obligations in accordance with the provisions of this Agreement, but shall be payable only if and to the extent Bank of America, acting through its Sterling LIBOR Lending Office, has received the interest payment which is the basis for such fee. 83 Section 2.9 Interest. 2.9.1 Applicable Interest Rates. (a) Each Loan shall bear interest until maturity (whether by acceleration, declaration, extension or otherwise) at either the Alternate Base Rate or the LIBOR Rate, as selected and specified by the Borrower, Berry UK or NIM Holdings, as appropriate, in an Interest Rate Election Notice furnished to the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate, in accordance with the provisions of Section 2.9.2(e) (Selection of Interest Rates), or as otherwise determined in accordance with the provisions of this Section 2.9, and as may be adjusted from time to time in accordance with the provisions of Section 2.9.3 (Inability to Determine LIBOR Base Rate). Notwithstanding the foregoing, all Loans made to Berry UK and/or NIM Holdings under the UK Credit Facilities must bear interest at the LIBOR Rate only; neither Berry UK nor NIM Holdings may select the Alternate Base Rate as the Applicable Interest Rate for any Loan made to Berry UK or NIM Holdings under any of the Credit Facilities. (b) Notwithstanding the foregoing, following the occurrence and during the continuance of an Event of Default, at the option of the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate, all Loans and all other Obligations shall bear interest at the Post-Default Rate. (c) The Applicable Margin for (i) LIBOR Loans, other than the UK Term Loans, Term Loans A and Term Loans B shall be two hundred (200) basis points per annum, (ii) LIBOR Loans consisting of Term Loans A, shall be two hundred twenty-five (225) basis points per annum, (iii) LIBOR Loans consisting of the UK Term Loans, shall be two hundred fifty (250) basis points per annum, (iv) LIBOR Loans consisting of Term Loans B, shall be two hundred seventy-five (275) basis points per annum, (v) Base Rate Loans consisting of the Revolving Loan, shall be zero, (vi) Base Rate Loans consisting of Term Loans A, shall be twenty-five (25) basis points per annum, and (vii) Base Rate Loans consisting of Term Loans B, shall be seventy-five (75) basis points, unless and until a change is required by the operation of Section 2.9.1(d). In addition, the Mandatory Liquid Asset Cost Rate shall be added to the Applicable Margin for each LIBOR Loan made or to be made under the UK Credit Facilities. (d) Subsequent to the Agent's receipt of the Borrower's quarterly financial statements for the period ending September 30, 2000 to be furnished to the Agent pursuant to Section 6.1.1(c) (Quarterly Statements), changes in the Applicable Margin for all Loans (other than Loans under the UK Credit Facilities) may be made, but not more frequently than one such change per quarter based on the Borrower's Pricing Ratio, tested as of the end of each fiscal quarter and the end of each fiscal year, determined by the Agent based on the annual and quarterly financial statements required by Section 6.1.1(a) (Annual Statements) and 6.1.1(c) (Quarterly Statements), as appropriate. Any change in the Applicable Margin shall be effective as of the test date of the Pricing Ratio, as appropriate, but shall not effect any change to the Applicable Margins for the UK Credit Facilities. The Applicable Margin shall vary depending upon the Borrower's Pricing Ratio, as follows: 84 ---------------------------------------------------------- Change in Pricing Ratio Applicable Margin ---------------------------------------------------------- greater than or equal to 4.5 to 1.0 +50 b.p. ---------------------------------------------------------- greater than or equal to 4.0. to 1.0, but less than 4.5 to 1.0 +25b.p. ---------------------------------------------------------- greater than or equal to 2.75 to 1.0, but less than 4.0 to 1.0 No change. ---------------------------------------------------------- less than 2.75 to 1.0 -25 b.p. ---------------------------------------------------------- 2.9.2 Selection of Interest Rates. (a) The Borrower may select the initial Applicable Interest Rate or Applicable Interest Rates to be charged on the Loans under the Domestic Credit Facilities and Berry UK or NIM Holdings may select an initial Sterling LIBOR Rate or Sterling LIBOR Rates to be charged on the Loans under the UK Credit Facilities. (b) From time to time after the date of this Agreement as provided in this Section, by a proper and timely Interest Rate Election Notice furnished to the Agent or Bank of America, as appropriate, in accordance with the provisions of Section 2.9.2(e), the Borrower, Berry UK or NIM Holdings, as appropriate, may select an initial Applicable Interest Rate or Applicable Interest Rates for any Loans or may convert the Applicable Interest Rate and, when applicable, the Interest Period, for any existing Loan to any other Applicable Interest Rate or, when applicable, any other Interest Period. (c) The selection of an Applicable Interest Rate and/or an Interest Period, the election to convert an Applicable Interest Rate and/or an Interest Period to another Applicable Interest Rate or Interest Period, and any other adjustments in an interest rate are subject to the following limitations: (i) neither the Borrower, Berry UK nor NIM Holdings shall at any time select or change to an Interest Period that extends beyond the Revolving Credit Termination Date in the case of the Revolving Loan, or the UK Revolving Credit Termination Date in the case of the UK Revolving Loan or the UK Term Loans or beyond the scheduled maturity of the Term Loans in the case of the Term Loans. In addition, only a Sterling Interest Period may be selected for a Sterling LIBOR Loan and only a Dollar Interest Period may be selected for a Dollar LIBOR Loan. (ii) no change from the LIBOR Rate to the Alternate Base Rate shall become effective on a day other than a Business Day and unless Bank of America or the Lenders, as appropriate, receive any compensation payable pursuant to Section 2.9.4 (Indemnity), on a day which is the last day of the then current Interest Period, no change of an Interest Period shall become effective on a day other than the last day of the then current Interest Period, and no change from the Alternate Base Rate to the 85 LIBOR Rate shall become effective on a day other than a day which is a Business Day. Neither the Alternate Base Rate nor the Dollar LIBOR Rate is available at any time as an Applicable Interest Rate for any Loans under the UK Credit Facilities, and the Sterling LIBOR Rate is not available at any time as an applicable Interest Rate for any Loans under the Domestic Credit Facilities. (iii) any Applicable Interest Rate change for any Loan to be effective on a date on which any principal payment on account of such Loan is scheduled to be paid shall be made only after such payment shall have been made, (iv) no more than three (3) different LIBOR Rates may be outstanding at any time and from time to time with respect to each of the Revolving Loan or the UK Revolving Loan, (v) no more than two (2) different LIBOR Rates may be outstanding at any time and from time to time with respect to each of the Term Loans or the UK Term Loans, (vi) the first day of each Interest Period shall be a Business Day, (vii) as of the effective date of a selection, there shall not exist a Default or an Event of Default, and (viii) the minimum principal amount of a LIBOR Loan under the Domestic Credit Facilities shall be One Million Dollars ($1,000,000) and the minimum principal amount of a LIBOR Loan under the UK Credit Facilities shall be One Hundred Fifty Thousand Pounds Sterling ((pound)150,000). (d) If a request for an advance under the Loans is not accompanied by an Interest Rate Election Notice or does not otherwise include a selection of an Applicable Interest Rate and, if applicable, an Interest Period, or if, after having made a selection of an Applicable Interest Rate and, if applicable, an Interest Period, the Borrower, Berry UK or NIM Holdings fails or is not otherwise entitled under the provisions of this Agreement to continue such Applicable Interest Rate or Interest Period, the Borrower shall be deemed to have selected the Alternate Base Rate as the Applicable Interest Rate until such time as the Borrower shall have selected a different Applicable Interest Rate and specified an Interest Period in accordance with, and subject to, the provisions of this Section and Berry UK and NIM Holdings shall be deemed to have selected a 30-day Interest Period and the LIBOR Rate. (e) Neither Bank of America, acting through its Sterling LIBOR Lending Office nor the Lenders will be obligated to make Loans, to convert the Applicable Interest Rate on Loans to another Interest Rate, or to change Interest Periods, unless Bank of America, acting through its Sterling LIBOR Lending Office, or the Agent, as appropriate, shall have received 86 an irrevocable written or telephonic notice (an "Interest Rate Election Notice") from the Borrower, Berry UK or NIM Holdings, as appropriate, specifying the following information: (i) the amount to be borrowed or converted, (ii) a selection of the Alternate Base Rate or the LIBOR Rate (except that the Alternate Base Rate shall not be available as an Applicable Interest Rate on any Loans made or to be made under the UK Credit Facilities), (iii) the length of the Interest Period if the Applicable Interest Rate selected is the LIBOR Rate, and (iv) the requested date on which such election is to be effective. Any telephonic notice must be confirmed in writing within three (3) Business Days. Each Interest Rate Election Notice for a Loan under the Domestic Credit Facilities must be received by the Agent not later than 10:00 a.m. (Baltimore City Time) on the Business Day of any requested borrowing or conversion in the case of a selection of the Alternate Base Rate and not later than 10:00 a.m. (Baltimore City Time) on the third Business Day before the effective date of any requested borrowing or conversion in the case of a selection of the LIBOR Rate. Each Interest Rate Election Notice for a Loan under the UK Credit Facilities must be received by Bank of America, acting through its Sterling LIBOR Lending Office, not later than 10:00 a.m. (London Time) on the Business Day of any requested borrowing or conversion. 2.9.3 Inability to Determine LIBOR Base Rate. In the event that (a) the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, shall have determined that, by reason of circumstances affecting the London interbank market, adequate and reasonable means do not exist for ascertaining the LIBOR Base Rate for any requested Interest Period with respect to a Loan, the Borrower, Berry UK and/or NIM Holdings, as appropriate, shall have requested to be made or to be converted to a LIBOR Loan or (b) the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, shall determine that the LIBOR Base Rate for any requested Interest Period with respect to a Loan the Borrower, Berry UK and/or NIM Holdings, as appropriate, shall have requested to be made or to be converted to a LIBOR Loan does not adequately and fairly reflect the cost to Bank of America, acting through its Sterling LIBOR Lending Office, or the Lenders, as appropriate, of funding or converting such Loan, the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, as applicable, shall give telephonic or written notice of such determination to the Borrower, Berry UK and/or NIM Holdings, as appropriate, at least one (1) day prior to the proposed date for funding or converting such Loan. If such notice is given, any request for a Dollar LIBOR Loan shall be made or converted to an Alternate Base Rate Loan and any Sterling LIBOR Loan shall accrue interest at the rate certified by Bank of America, acting through its Sterling LIBOR Lending Office, to be the rate at which it currently offers loans in Sterling to its best customers. Until such notice has been withdrawn by the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, the Borrower, Berry UK and NIM Holdings will not request that any Loan be made or converted to a LIBOR Loan. 87 2.9.4 Indemnity. The Borrower agrees to indemnify and reimburse the Lenders and to hold the Lenders harmless from any loss, cost (including administrative costs) or expense which any one or more of the Agent or the Lenders may sustain or incur as a consequence of (a) a default by the Borrower, Berry UK or NIM Holdings in payment when due of the principal amount of or interest on any LIBOR Loan, including, any LIBOR Loan made under the UK Credit Facilities, (b) the failure of the Borrower, Berry UK or NIM Holdings to make, or convert the Applicable Interest Rate of, a LIBOR Loan after the Borrower, Berry UK or NIM Holdings has given a Loan Notice or an Interest Rate Election Notice, (c) the failure of the Borrower, Berry UK or NIM Holdings to make any prepayment of a LIBOR Loan after the Borrower, Berry UK or NIM Holdings has given notice of such intention to make such a prepayment, and/or (d) the making by the Borrower, Berry UK or NIM Holdings of a prepayment of a LIBOR Loan on a day which is not the last day of the Interest Period for such LIBOR Loan, calculated as provided in the following paragraph, including, without limitation, any such loss or expense arising from the reemployment of funds obtained by the Agent and/or any of the Lenders to maintain any LIBOR Loan or from fees payable to terminate the deposits from which such funds were obtained. Berry UK and NIM Holdings jointly and severally agree to indemnify and reimburse the Lenders and to hold the Lenders harmless from any loss, cost (including administrative costs) or expense which any one or more of the Lenders may sustain or incur as a consequence of (a) a default by Berry UK or NIM Holdings in payment when due of the principal amount of or interest on any LIBOR Loan made under the UK Credit Facilities, (b) the failure of Berry UK or NIM Holdings to make, or convert the Applicable Interest Rate of, a LIBOR Loan made under the UK Credit Facilities after Berry UK or NIM Holdings has given a Loan Notice or an Interest Rate Election Notice, (c) the failure of Berry UK or NIM Holdings to make any prepayment of a LIBOR Loan made under the UK Credit Facilities after Berry UK or NIM Holdings has given notice of such intention to make such a prepayment, and/or (d) the making by Berry UK or NIM Holdings of a prepayment of a LIBOR Loan made under the UK Credit Facilities on a day which is not the last day of the Interest Period for such LIBOR Loan, calculated as provided in the following paragraph, including, without limitation, any such loss or expense arising from the reemployment of funds obtained by any of the Lenders to maintain any LIBOR Loan made under the UK Credit Facilities or from fees payable to terminate the deposits from which such funds were obtained, but excluding loss of anticipated profits. This agreements and covenants of the Borrower, Berry UK and NIM Holdings shall survive termination or expiration of this Agreement and payment of the Obligations. Contemporaneously with any prepayment of principal of a LIBOR Loan, a prepayment fee shall be due and payable to the Lenders in an amount equal to any loss or expense (other than loss of anticipated profits) arising from the reemployment of funds obtained by any Lender to fund or maintain any LIBOR Loan or from fees payable to terminate the deposits from which such funds were obtained. Neither the Agent nor any of the Lenders shall be obligated to accept any prepayment of principal unless it is accompanied by the prepayment fee, if any, due in connection therewith as calculated pursuant to the provisions of this paragraph. No prepayment fee payable in connection herewith shall in any event or under any circumstances be deemed or construed as a penalty. The Borrower shall be liable for the payment of all prepayment fees due under this Section 2.10.4, whether relating to the Domestic Credit Facilities or the UK Credit Facilities; Berry UK and NIM Holdings, however, shall be jointly and severally 88 liable only for the payment of those prepayment fees which relate solely to the UK Credit Facilities. 2.9.5 Payment of Interest. (a) Unpaid and accrued interest on any Base Rate Loan shall be paid monthly, in arrears, on the first day of each calendar month, commencing on the first such date after the date of this Agreement, and on the first day of each calendar month thereafter, and at maturity (whether by acceleration, declaration, extension or otherwise). (b) Notwithstanding the foregoing, any and all unpaid and accrued interest on any Base Rate Loan converted to a LIBOR Loan or prepaid shall be paid immediately upon such conversion and/or prepayment, as appropriate. (c) Unpaid and accrued interest on any LIBOR Loan shall be paid, in arrears, on the last day of the applicable LIBOR Interest Period and at maturity (whether by acceleration, declaration, extension or otherwise). Notwithstanding anything to the contrary contained herein, the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, agree that neither the Borrower, Berry UK nor NIM Holdings shall have any obligation to make any payment pursuant to the provisions of Section 2.9.4 (Indemnity) resulting solely from the payment of accrued interest on a date other than the expiration date of an Interest Period. Section 2.10 General Financing Provisions. 2.10.1 Borrower's Representatives. (a) The Borrower hereby represents and warrants to the Agent and the Lenders that the Borrower and each Subsidiary Guarantor will derive benefits, directly and indirectly, from each Letter of Credit, from each Bond Letter of Credit and from each Loan, both in their separate capacity and as a member of the integrated group to which the Borrower and each Subsidiary Guarantor belongs and because (i) the successful operation of the integrated group is dependent upon the continued successful performance of the functions of the integrated group as a whole, (ii) the terms of the consolidated financing provided under this Agreement are more favorable than would otherwise would be obtainable by the Borrower, Berry UK, NIM Holdings and any Subsidiary Guarantor individually, and (iii) the Borrower's additional administrative and other costs and reduced flexibility associated with individual financing arrangements which would otherwise be required if obtainable would substantially reduce the value to the Borrower of such financings. (b) The Borrower hereby irrevocably authorizes each of the Lenders to make Loans to the Borrower, and hereby irrevocably authorizes the Agent to issue Letters of Credit and Bond Letters of Credit for the account of the Borrower, pursuant to the provisions of this Agreement upon the written, oral or telephone request of any one of the Persons who is from time to time a Responsible Officer of the Borrower under the provisions of the most recent certificate of 89 corporate resolutions of the Borrower on file with the Agent and also upon the written, oral or telephone request of any one of the Persons who is from time to time a Responsible Officer of the Borrower under the provisions of the most recent certificate of corporate resolutions and/or incumbency for the Borrower on file with the Agent. Berry UK and NIM Holdings each hereby irrevocably authorizes Bank of America, acting through its Sterling LIBOR Lending Office, to make Loans to Berry UK and/or NIM Holdings, pursuant to the provisions of this Agreement upon the written, oral or telephone request of any one of the Persons who is from time to time a Responsible Officer of Berry UK or NIM Holdings under the provisions of the most recent certificate of corporate resolutions of Berry UK or NIM Holdings on file with Bank of America, acting through its Sterling LIBOR Lending Office, and also upon the written, oral or telephone request of any one of the Persons who is from time to time a Responsible Officer of Berry UK or NIM Holdings under the provisions of the most recent certificate of corporate resolutions and/or incumbency for Berry UK or NIM Holdings on file with Bank of America, acting through its Sterling LIBOR Lending Office. (c) Neither the Agent nor any of the Lenders assumes any responsibility or liability for any errors, mistakes, and/or discrepancies in the oral, telephonic, written or other transmissions of any instructions, orders, requests and confirmations between the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, and the Borrower, Berry UK and/or NIM Holdings or the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, and any of the Lenders in connection with the Credit Facilities, any Loan, any Letter of Credit, any Bond Letter of Credit or any other transaction in connection with the provisions of this Agreement, except for acts of willful misconduct and gross negligence. 2.10.2 Use of Proceeds of the Loans. The proceeds of each Loan shall be used by the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, as applicable, for Permitted Uses, and for no other purposes except as may otherwise be agreed by the Requisite Lenders in writing. 2.10.3 Field Examination Fees. The Borrower shall pay to the Agent for the exclusive benefit of the Agent a field examination fee at the time of each field examination (the "Field Examination Fee"), which Field Examination Fee shall be equal to the sum of (i) Seven Hundred Fifty Dollars ($750) per Person for each working day of the field examination, plus (ii) all out-of-pocket expenses reasonably incurred by the Agent in connection with any such field examination for which the Agent has not been previously reimbursed. The Agent may, but without obligation, engage Ernst & Young to conduct required field examinations; provided that all fees, costs and expenses of Ernst & Young are paid by the Borrower and each field examination conducted by Ernst & Young is in all respects acceptable to the Agent. 2.10.4 Commitment Fee. The Borrower shall pay to the Agent a commitment fee (the "Commitment Fee") in the amount of Four Hundred Thousand Dollars ($400,000). The Agent shall remit the Commitment Fee to those Lenders which have funded the Term Loan A Increase and the Term Loan B Increase in accordance with their respective agreements with the Agent. The Commitment Fee shall be payable on or before the Closing Date and shall be deemed fully earned on the date paid and is non-refundable. 90 2.10.5 Consent Fee. The Borrower shall pay to the Agent for the ratable benefit of the Lenders (other than LaSalle), based on each Lender's Pro Rata Share of the Commitments under the Original Credit Agreement, a consent fee (the "Consent Fee") in the amount of Three Hundred Twelve Thousand Five Hundred Dollars ($312,500) in consideration of the Lenders' consent to the Poly-Seal Stock Purchase Transaction. The Consent Fee shall be payable on or before the Closing Date and shall be deemed fully earned on the date paid and is non-refundable. 2.10.6 Computation of Interest and Fees. All applicable Fees and interest shall be calculated on the basis of a year of 360 days (or in the case of Sterling, 365 days) for the actual number of days elapsed. Any change in the interest rate on any of the Obligations resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change in the Alternate Base Rate is announced. 2.10.7 Payments. All payments to be made by the Borrower to the Agent and/or any of the Lenders under this Agreement or any of the other Financing Documents with respect to the Obligations, other than the UK Obligations, shall be made in US Dollars (unless otherwise agreed to or required by the Agent or any Lender), without set-off or counterclaim and free and clear of, and without deduction for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions, withholdings or restrictions or conditions of any nature whatsoever now or hereafter imposed, levied, collected, withheld or assessed against the Borrower, other than income and franchise taxes imposed on any Lender (the "Assessments"). All payments to be made by Berry UK or NIM Holdings to Bank of America, acting through its Sterling LIBOR Lending Office, under this Agreement or any of the other Financing Documents with respect to the UK Obligations shall be made in Sterling (unless otherwise agreed to or required by Bank of America, acting through its Sterling LIBOR Lending Office), without set-off or counterclaim and free and clear of, and without deduction for or on account of, any present or future Assessments. If any Assessments are imposed and required to be withheld from any such payment, the Borrower, Berry UK or NIM Holdings, as appropriate, shall (a) increase the amount of such payment so that Bank of America, acting through its Sterling LIBOR Lending Office will receive a net amount (after giving effect to the payment of such additional amount and to the deduction of all Assessments) equal to the amount due hereunder, and (b) pay such Assessments to the appropriate taxing authority for the account of Bank of America, acting through its Sterling LIBOR Lending Office, and, as promptly as possible thereafter, send Bank of America an original receipt (or a copy thereof that has been stamped by the appropriate taxing authority to certify payment) showing payment thereof, together with such additional documentary evidence as Bank of America may from time to time reasonably require. If the Borrower, Berry UK or NIM Holdings fail to perform its obligations to the Agent and/or any of the Lenders under the foregoing, the Borrower, Berry UK and NIM Holdings (subject to the limitations of Section 2.10.11 (Limitations on Liability) shall indemnify the Agent and the Lenders for any such Assessments that are paid by the Agent and/or any of the Lenders, plus all incremental Assessments, interest or penalties that may become payable as a 91 consequence of such failure. All payments of the Obligations (other than the UK Obligations), including, without limitation, principal, interest, Prepayments, and Fees, shall be paid by the Borrower to the Agent (except as otherwise provided herein) at the Agent's office specified in Section 9.1 (Notices) in immediately available funds not later than 2:00 p.m. (Baltimore City Time) on the due date of such payment and all payments of the UK Obligations shall be paid by Berry UK and NIM Holdings to Bank of America at its Sterling LIBOR Lending Office specified in Section 9.1 (Notices) in immediately available funds not later than 2:00 p.m. (London time) on the due date of such payments. All payments received by the Agent or Bank of America, as applicable, after such time shall be deemed to have been received by the Agent and/or Bank of America, as applicable, for purposes of computing interest and Fees and otherwise as of the next Business Day or Business Day, as appropriate. Payments shall not be considered received by the Agent or Bank of America, as applicable, until such payments are paid to the Agent and/or Bank of America, as applicable, in immediately available funds. This Section 2.11.7 shall be the only Section of this Agreement pursuant to which the Borrower, NIM Holdings or Berry UK shall be obligated to gross up any Lender for Taxes. 2.10.8 Liens; Setoff. The Borrower hereby grants to the Agent and to the Lenders a continuing Lien for all of the Obligations (including, without limitation, the Agent's Obligations) upon any and all monies, securities, and other cash deposits of the Borrower and the proceeds thereof, now or hereafter held or received by or in transit to, the Agent, any of the Lenders, and/or any Affiliate of the Agent and/or any of the Lenders, from or for the Borrower, and also upon any and all deposit accounts (general or special) and credits of the Borrower, if any, with the Agent, any of the Lenders or any Affiliate of the Agent or any of the Lenders, at any time existing, excluding any deposit accounts held by the Borrower in its capacity as trustee for Persons who are not Affiliates or Subsidiaries of the Borrower. Berry UK and NIM Holdings each hereby grants to Bank of America a continuing Lien for all of the UK Obligations upon any and all monies, securities, and other cash deposits of Berry UK and/or NIM Holdings and the proceeds thereof, now or hereafter held or received by or in transit to, Bank of America and/or any Affiliate of Bank of America, from or for Berry UK and/or NIM Holdings, and also upon any and all deposit accounts (general or special) and credits of Berry UK and/or NIM Holdings, if any, with Bank of America or any Affiliate of Bank of America, at any time existing, excluding any deposit accounts held by Berry UK and/or NIM Holdings in its capacity as trustee for Persons who are not Affiliates or Subsidiaries of the Borrower, Berry UK or NIM Holdings. Without implying any limitation on any other rights the Agent and/or any of the Lenders may have under the Financing Documents or applicable Laws, during the continuance of an Event of Default, the Agent is hereby authorized by the Borrower at any time and from time to time, without notice to the Borrower, to set off, appropriate and apply any or all items hereinabove referred to against all Obligations (including, without limitation, the Agent's Obligations) then outstanding (whether or not then due), all in such order and manner as shall be determined by the Agent in its sole and absolute discretion. 2.10.9 Requirements of Law. In the event that any Lender shall have determined in good faith that (a) the adoption of any Laws after the Closing Date regarding capital adequacy, or (b) any change in 92 or in the interpretation or application of any Laws, or (c) compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any central bank or Governmental Authority, does or shall have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender, as a consequence of the obligations of the such Lender hereunder to a level below that which such Lender or any corporation controlling such Lender would have achieved but for such adoption, change or compliance (taking into consideration the policies of such Lender and the corporation controlling such Lender, with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower of a written request therefor and a statement of the basis for such determination, the Borrower shall pay to such Lender such additional amount or amounts in order to compensate for such reduction. The Agent and the Lenders agree that the Borrower shall be entitled, at its option, to require that any Lender which demands payment of any amounts under this Section 2.10.9 assign one hundred percent (100%) of its Commitments and Obligations to one or more other lenders or financial institutions as shall be acceptable to the Borrower and the Agent; provided that any such assignment is effected in accordance with the provisions of Section 9.5 (Assignments by Lenders). 2.10.10 Funds Transfer Services. (a) The Borrower, Berry UK and NIM Holdings acknowledge that the Agent has made available to the Borrower, Berry UK and NIM Holdings, the Agent's Wire Transfer Procedures a copy of which is attached to this Agreement as EXHIBIT B and which includes a description of security procedures regarding funds transfers executed by the Agent or an Affiliate bank at the request of the Borrower (the "Security Procedures"). The Borrower, Berry UK, NIM Holdings and the Agent agree that the Security Procedures are commercially reasonable. The Borrower, Berry UK and NIM Holdings further acknowledge that the full scope of the Security Procedures which the Agent or such Affiliate bank offers and strongly recommends is available only if the Borrower, Berry UK and NIM Holdings communicates directly with the Agent or such Affiliate bank as applicable in accordance with said procedures. If the Borrower, Berry UK or NIM Holdings attempts to communicate by any other method or otherwise not in accordance with the Security Procedures, the Agent or such Affiliate bank, as applicable, shall not be required to execute such instructions, but if the Agent or such Affiliate bank, as applicable, does so, the Borrower, Berry UK and NIM Holdings will be deemed to have refused the Security Procedures that the Agent or such Affiliate bank as applicable offers and strongly recommends, and the Borrower, Berry UK and NIM Holdings will be bound by any funds transfer, whether or not authorized, which is issued in the name of the Borrower, Berry UK and/or NIM Holdings and accepted by the Agent or such Affiliate bank, as applicable, in good faith. The Agent or such Affiliate bank, as applicable, may modify Wire Transfer Procedures upon notice to the Borrower, including, without limitation, the Security Procedures at such time or times and in such manner as the Agent or such Affiliate bank, as applicable, in its reasonable discretion, deems appropriate to meet prevailing standards of good banking practice. By continuing to use the Agent's or such Affiliate bank's, as applicable, wire transfer services after receipt of any modification of the Wire Transfer procedures including, without limitation, the Security Procedures, the Borrower, Berry UK and NIM Holdings agree that the Security Procedures, as modified, are likewise commercially reasonable. Neither the Agent nor any Affiliate bank is responsible for detecting any error in payment order sent by the 93 Borrower, Berry UK or NIM Holdings to the Agent or any of the Lenders unless due to the willful misconduct or gross negligence of the Agent or any such Affiliate bank. (b) The Agent or such Affiliate bank, as applicable, will generally use the Fedwire funds transfer system for domestic funds transfers, and the funds transfer system operated by the Society for Worldwide International Financial Telecommunication (SWIFT) for international funds transfers. International funds transfers may also be initiated through the Clearing House InterBank Payment System (CHIPs) or international cable. However, the Agent or such Affiliate bank, as applicable, may use any means and routes that the Agent or such Affiliate bank, as applicable, in its reasonable discretion, may consider suitable for the transmission of funds. Each payment order, or cancellation thereof, carried out through a funds transfer system or a clearinghouse will be governed by all applicable funds transfer system rules and clearing house rules and clearing arrangements, whether or not the Agent or such Affiliate bank, as applicable, is a member of the system, clearinghouse or arrangement and the Borrower, Berry UK and NIM Holdings acknowledge that the Agent's or such Affiliate bank's, as applicable, right to reverse, adjust, stop payment or delay posting of an executed payment order is subject to the laws, regulations, rules, circulars and arrangements described herein. 2.10.11 Limitations on Joint and Several Liability for Obligations. Notwithstanding anything to the contrary contained in this Agreement or in any of the other Financing Documents, Berry UK and NIM Holdings shall be liable for payment and performance only of (i) the UK Revolving Loan and the UK Term Loans (including principal and interest) and (iii) those Fees and Enforcement Costs attributable solely to any of the foregoing (the "UK Obligations"). The Borrower shall be jointly and severally liable for all of the Obligations, including, without limitation, the UK Obligations. Section 2.11 Settlement Among Lenders. 2.11.1 Term Loans. The Agent shall pay to each Lender on each date on which a payment of principal and/or interest on the Term Loans, such Lender's ratable share of all payments received by the Agent in immediately available funds on account of the Term Loans, net of any amounts payable by such Lender to the Agent, by wire transfer of same day funds; the amount payable to each Lender shall be based on the principal amount of the Term Loans owing to such Lender. 2.11.2 Revolving Loan. It is agreed that each Lender's Net Outstandings are intended by the Lenders to be equal at all times to such Lender's Revolving Credit Pro Rata Share of the aggregate outstanding principal amount of the Revolving Loan outstanding, including, without limitation, unpaid and accrued interest thereon. Notwithstanding such agreement, the several and not joint obligation of each Lender to fund the Revolving Loan made in accordance with the terms of this Agreement ratably in accordance with such Lender's Revolving Credit Pro Rata Share, and each Lender's right to receive its ratable share of principal and interest payments on the Revolving Loan in accordance with its Revolving Credit Pro Rata Share, the Lenders agree that in order to facilitate the administration of this Agreement and the Financing Documents that 94 settlement among them may take place on a periodic basis in accordance with the provisions of this Section 2.11.2. 2.11.3 Settlement Procedures as to Revolving Loan. (a) In General. To the extent and in the manner hereinafter provided in this Section 2.11.3, settlement among the Lenders as to the Revolving Loan may occur periodically on Settlement Dates determined from time to time by the Agent, which may occur before or after the occurrence or during the continuance of a Default or Event of Default and whether or not all of the conditions set forth in Section 5.2 (Conditions to All Extensions of Credit) have been met. On each Settlement Date payments shall be made by or to the Lenders in the manner provided in this Section 2.11.3 in accordance with the Settlement Report delivered by the Agent pursuant to the provisions of this Section 2.11.3 in respect of such Settlement Date so that as of each Settlement Date, and after giving effect to the transactions to take place on such Settlement Date, each Lender's Net Outstandings shall equal such Lender's Revolving Credit Pro Rata Share of the Revolving Loan outstanding. (b) Selection of Settlement Dates. If the Agent elects, in its discretion, but subject to the consent of Bank of America, to settle accounts among the Lenders with respect to principal amounts of Revolving Loan less frequently than each Business Day, then the Agent shall designate periodic Settlement Dates which may occur on any Business Day after the Closing Date; provided, however, that the Agent shall designate as a Settlement Date any Business Day which is payment date; and provided further, that a Settlement Date shall occur at least once during each seven-day period. The Agent shall designate a Settlement Date by delivering to each Lender a Settlement Report not later than 12:00 noon (Baltimore City Time) on the proposed Settlement Date, which Settlement Report shall be with respect to the period beginning on the next preceding Settlement Date and ending on such designated Settlement Date. (c) Non-Ratable Loans and Payments. Between Settlement Dates, the Agent shall request and Bank of America may (but shall not be obligated to) advance to the Borrower out of Bank of America's own funds, the entire principal amount of any advance under the Revolving Loan requested or deemed requested pursuant to Section 2.1.2 (Procedure for Making Advances) (any such advance under the Revolving Loan being referred to as a "Non-Ratable Loan"). The making of each Non-Ratable Loan by Bank of America shall be deemed to be a purchase by Bank of America of a 100% participation in each other Lender's Revolving Credit Pro Rata Share of the amount of such Non-Ratable Loan. All payments of principal, interest and any other amount with respect to such Non-Ratable Loan shall be payable to and received by the Agent for the account of Bank of America. Upon demand by Bank of America, with notice to the Agent, each other Lender shall pay to Bank of America, as the repurchase of such participation, an amount equal to 100% of such Lender's Revolving Credit Pro Rata Share of the principal amount of such Non-Ratable Loan. Any payments received by the Agent between Settlement Dates which in accordance with the terms of this Agreement are to be applied to the reduction of the outstanding principal balance of Revolving Loan shall be paid over to and retained by Bank of America for such application, and such payment to and retention by Bank of America shall be deemed, to the extent of each other Lender's Revolving Credit Pro Rata Share of such payment, to be a purchase by each such other Lender of a participation in the 95 advance under the Revolving Loan (including the repurchase of participations in Non-Ratable Loans) made by Bank of America. Upon demand by another Lender, with notice thereof to the Agent, Bank of America shall pay to the Agent, for the account of such other Lender, as a repurchase of such participation, an amount equal to such other Lender's Revolving Credit Pro Rata Share of any such amounts (after application thereof to the repurchase of any participations of Bank of America in such other Lender's Revolving Credit Pro Rata Share of any Non-Ratable Loans) paid only to Bank of America by the Agent. (d) Net Decrease in Outstandings. If on any Settlement Date the increase, if any, in the dollar amount of any Lender's Net Outstandings which is required to comply with the first sentence of Section 2.11.2 (Revolving Loan) is less than such Lender's Revolving Credit Pro Rata Share (and/or UK Revolving Credit Pro Rata Share, as appropriate) of amounts received by the Agent but paid only to Bank of America since the next preceding Settlement Date, such Lender and the Agent, in their respective records, shall apply such Lender's Revolving Credit Pro Rata Share of such amounts to the increase in such Lender's Net Outstandings, and Bank of America shall pay to the Agent, for the account of such Lender, the excess allocable to such Lender. (e) Net Increase in Outstandings. If on any Settlement Date the increase, if any, in the dollar amount of any Lender's Net Outstandings which is required to comply with the first sentence of Section 2.11.2 (Revolving Loan) exceeds such Lender's Revolving Credit Pro Rata Share of amounts received by the Agent but paid only to Bank of America since the next preceding Settlement Date, such Lender and the Agent, in their respective records, shall apply such Lender's Revolving Credit Pro Rata Share of such amounts to the increase in such Lender's Net Outstandings, and such Lender shall pay to the Agent, for the account of Bank of America, any excess. (f) No Change in Outstandings. If a Settlement Report indicates that no advance under the Revolving Loan has been made during the period since the next preceding Settlement Date, then such Lender's Revolving Credit Pro Rata Share of any amounts received by the Agent but paid only to Bank of America shall be paid by Bank of America to the Agent, for the account of such Lender. If a Settlement Report indicates that the increase in the dollar amount of a Lender's Net Outstandings which is required to comply with the first sentence of Section 2.11.2 (Revolving Loan) is exactly equal to such Lender's Revolving Credit Pro Rata Share of amounts received by the Agent but paid only to Bank of America since the next preceding Settlement Date, such Lender and the Agent, in their respective records, shall apply such Lender's Revolving Credit Pro Rata Share of such amounts to the increase in such Lender's Net Outstandings. (g) Return of Payments. If any amounts received by Bank of America in respect of the Obligations are later required to be returned or repaid by Bank of America to the Borrower or any other obligor or their respective representatives or successors in interest, whether by court order, settlement or otherwise, in excess of the Bank of America's Revolving Credit Pro Rata Share of all such amounts required to be returned by all Lenders, each other Lender shall, upon demand by Bank of America with notice to the Agent, pay to the Agent for the account of Bank of America, an amount equal to the excess of such Lender's Revolving 96 Credit Pro Rata Share of all such amounts required to be returned by all Lenders over the amount, if any, returned directly by such Lender. (h) Payments to Agent, Lenders. (i) Payment by any Lender to the Agent shall be made not later than 4:00 p.m. (Baltimore City Time) on the Business Day such payment is due, provided that if such payment is due on demand by another Lender, such demand is made on the paying Lender not later than 12:00 p.m. (Baltimore City Time) on such Business Day. Payment by the Agent to any Lender shall be made by wire transfer, promptly following the Agent's receipt of funds for the account of such Lender and in the type of funds received by the Agent, provided that if the Agent receives such funds at or prior to 12:00 p.m. noon (Baltimore City Time), the Agent shall pay such funds to such Lender by 4:00 p.m. (Baltimore City Time) on such Business Day. If a demand for payment is made after the applicable time set forth above, the payment due shall be made by 4:00 p.m. (Baltimore City Time) on the first Business Day following the date of such demand. (ii) If a Lender shall, at any time, fail to make any payment to the Agent required hereunder, the Agent may, but shall not be required to, retain payments that would otherwise be made to such Lender hereunder and apply such payments to such Lender's defaulted obligations hereunder, at such time, and in such order, as the Agent may elect in its sole discretion. In addition, if a Lender shall default in its obligation to fund its Pro Rata Share of any requested advance of the Revolving Loan and the Agent elects not to fund such defaulting Lender's Pro Rata Share of that advance, then the defaulting Lender, at the Agent's option, shall not be entitled to receive any payments of principal of or interest on its Pro Rata Share of any of the Obligations or its Pro Rata Share of any Fees, unless and until (A) all of the Obligations have been paid in full or (B) the defaulting Lender cures its default by funding its Pro Rata Share of the requested Revolving Loan advance. Interest and Fees which would be payable to the defaulting Lender except for the provisions of this subsection, instead shall be payable to the other Lenders in accordance with their respective Pro Rata Shares. In addition, for so long as the defaulting Lender shall remain in default under its obligations under this Agreement, for purposes of voting on matters with respect to this Agreement and/or any of the Financing Documents, such defaulting Lender shall be deemed not to be a "Lender" and such Lender's Pro Rata Share of the Commitments and the Obligations shall be deemed to be zero. No Commitment of any Lender shall be increased or otherwise affected by the default of any other Lender nor shall the Agent have any obligation to fund any amounts not funded by a defaulting Lender. (iii) With respect to the payment of any funds under this Section 2.11.3, whether from the Agent to a Lender or from a Lender to the Agent, the party failing to make full payment when due pursuant to the terms hereof shall, upon demand by the other party, pay such amount together with interest on such amount at the Federal Funds Rate. 97 2.11.4 Settlement of Other Obligations. All other amounts received by the Agent on account of, or applied by the Agent to the payment of, any Obligation owed to the Lenders (including, without limitation, Fees payable to the Lenders and proceeds from the sale of, or other realization upon, all or any part of the Collateral following an Event of Default) that are received by the Agent not later than 11:00 a.m. (Baltimore City Time) on a Business Day will be paid by the Agent to each Lender on the same Business Day, and any such amounts that are received by the Agent after 11:00 a.m. (Baltimore City Time) will be paid by the Agent to each Lender on the following Business Day. Unless otherwise stated herein, the Agent shall distribute Fees payable to the Lenders ratably to the Lenders based on each Lender's Revolving Credit Pro Rata Share and shall distribute proceeds from the sale of, or other realization upon, all or any part of the Collateral following an Event of Default ratably to the Lenders based on the amount of the Obligations then owing to each Lender. 2.11.5 Presumption of Payment. (a) Unless the Agent shall have received notice from a Lender prior to 12:00 p.m. noon (Baltimore City Time) on the date of the requested date for the making of advances under the Revolving Loan or prior to 12:00 p.m. noon (Baltimore City Time) that such Lender will not make available to the Agent, such Lender's Revolving Credit Pro Rata Share of the advances to be made on such date, the Agent may assume that such Lender has made such amount available to the Agent on such date in accordance with this Section 2.11.5, and the Agent, in its sole discretion may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount on behalf of such Lender. (b) If and to the extent such Lender shall not have so made available to the Agent its Revolving Credit Pro Rata Share of the advances under the Revolving Loan made on such date, and the Agent shall have so made available to the Borrower a corresponding amount on behalf of such Lender, such Lender shall, on demand, pay to the Agent such corresponding amount, together with interest thereon, at the Federal Funds Rate, for each day from the date such corresponding amount shall have been so available by the Agent to the Borrower until the date such amount shall have been repaid to the Agent. Such Lender shall not be entitled to payment of any interest which accrues on the amount made available by the Agent to the Borrower for the account of such Lender until such time as such Lender reimburses the Agent for such amount, together with interest thereon, as provided in this Section 2.11.5. (c) A certificate of the Agent submitted to any Lender with respect to any amounts owing to the Agent by such Lender under this Section 2.11.5 shall be conclusive and binding on such Lender, absent manifest error. If such Lender does not pay such amounts to the Agent promptly upon the Agent's demand, the Agent shall promptly notify the Borrower of such Lender's failure to make payment, and the Borrower shall immediately repay such amounts to the Agent, together with accrued interest thereon at the applicable rate on the Revolving Loan, all without prejudice to the rights and remedies of the Agent against any defaulting Lender. Any and all amounts due and payable to the Agent by the Borrower under this Section 2.11.5 constitute and shall be part of the Agent's Obligations. 98 (d) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Agent that the Borrower will not make such payment in full, the Agent may assume that the Borrower have made such payment in full to the Agent on such date and the Agent in its sole discretion may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Agent and the Agent shall have distributed to any Lender all or any portion of such amount, such Lender shall repay to the Agent on demand the amount so distributed to such Lender, together with interest thereon at the Federal Funds Rate, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent. ARTICLE III THE COLLATERAL Section 3.1 Debt and Obligations Secured. All property and Liens assigned, pledged or otherwise granted under or in connection with this Agreement (including, without limitation, those under Section 3.2 (Grant of Liens)) or any of the Financing Documents shall, subject to the terms, conditions and limitations, if any, set forth in this Agreement or in any of the Financing Documents, secure (a) the payment of all of the Obligations, including, without limitation, any and all Outstanding Letter of Credit Obligations, all Outstanding Bond Letter of Credit Obligations, all UK Obligations and any and all Agent's Obligations, and (b) the performance, compliance with and observance by the Borrower of the provisions of this Agreement and all of the other Financing Documents or otherwise under the Obligations. The security interest and Lien of each Lender in such property shall rank equally in priority with the interest of each other Lender, but the security interest and Lien of the Agent with respect to the Agent's Obligations shall be superior and paramount to the security interest and Lien of the Lender. Notwithstanding the foregoing, the security interest and Lien of the Agent and/or any Lender with respect to any Obligations under or in connection with, any interest rate or currency swap agreements, cap, floor, and collar agreements, currency spot, foreign exchange and forward contracts and other similar agreements and arrangements permitted by the provisions of this Agreement shall be junior and subordinate to the security interest and Lien of the Agent with respect to the Agent's Obligations and junior and subordinate to the security interest and Lien of the Lender with respect to all other Obligations. The Agent, the Lenders, the Borrower, Berry UK and NIM Holdings agree that this Article 3 is intended to grant and govern Liens on the assets of the Borrower only and not assets of Berry UK or NIM Holdings. The UK Security Documents are intended to grant Liens on the assets of Berry UK and NIM Holdings to Bank of America with respect to the UK Obligations only. Any and all references to Collateral included elsewhere in this Agreement (other than in this Section) are intended to include and govern the Collateral of the Borrower, Berry UK and NIM Holdings, whether the Liens on such Collateral arise under the provisions of this Agreement or under any of the other Security Documents (including the UK Security Documents). 99 Section 3.2 Grant of Liens. The Borrower hereby assigns, pledges and grants to the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations and to Bank of America with respect to the UK Obligations, and agrees that Bank of America, the Agent and the Lenders shall have a perfected and continuing security interest in, and Lien on, (a) all of the Borrower's Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment, Securities, and General Intangibles, whether now owned or existing or hereafter acquired or arising, (b) all returned, rejected or repossessed goods, the sale or lease of which shall have given or shall give rise to an Account or Chattel Paper, (c) all insurance policies relating to the foregoing, (d) all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to the foregoing and all equipment and general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and (e) all cash and non-cash proceeds and products of the foregoing. The Borrower further agrees that the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, shall have in respect thereof all of the rights and remedies of a secured party under the Uniform Commercial Code as well as those provided in this Agreement, under each of the other Financing Documents and under applicable Laws. Notwithstanding anything to the contrary contained herein, the Collateral shall not include any rights of the Borrower under any Capital Leases of Equipment or any other agreements if and to the extent any such Capital Leases or other agreements prohibit the collateral assignment or pledge of the Borrower's interest therein, and such prohibition has not been waived by the respective Person. Notwithstanding anything to the contrary contained herein, the Collateral shall not include any item of tangible or intangible property to the extent the grant of a security interest pursuant hereto in the Borrower's right, title and interest in such item of property is prohibited by an applicable contractual obligation or requirement of law or would give any other Person the right to terminate its obligations with respect to such item (it being understood and agreed, however, that notwithstanding the foregoing, all rights to payment for money due or to become due pursuant to any such excluded item of property shall be subject to the security interests created hereby and it being further understood and agreed that any such excluded item shall be included as part of the Collateral if and to the extent any applicable prohibition on the collateral assignment of such item shall be unenforceable under the applicable Uniform Commercial Code as now or hereafter in effect). Without implying any limitation to the foregoing, as additional Collateral and security for the Obligations, the Borrower hereby assigns to the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations and to Bank of America with respect to the UK Obligations, all of its rights, title and interest in, to, and under, the Poly-Seal Purchase Agreement, all of the Poly-Seal Purchase Agreement Documents, including, without limitation, all of the benefits of any representations and warranties provided by the Seller, and any and all rights of the Borrower to indemnification from the Seller or any other Person contained therein. The Borrower agrees that neither the assignment to the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, nor any other provision contained in this Agreement or any of the other Financing Documents shall impose on the Agent or any of the Lenders any obligation or liability of the Borrower under the Poly-Seal Purchaser Agreement or under any of the Poly-Seal Purchase Agreement Documents. The Borrower hereby agrees to indemnify the Agent and each of the 100 Lenders and hold the Agent and each of the Lenders harmless from any and all claims, actions, suits, losses, damages, costs, expenses, fees, obligations and liabilities which may be incurred by or imposed upon the Agent and/or any of the Lenders by virtue of the assignment of and Lien on each of the Borrower's rights, title and interest in, to, and under the Poly-Seal Purchase Agreement and the Poly-Seal Purchase Agreement Documents, unless due to the gross negligence or willful misconduct of the Agent and/or any of the Lenders. The Borrower further acknowledges and agrees that following the occurrence of an Event of Default, the Agent, with the consent of the Requisite Lenders, shall be entitled to enforce any and all rights and remedies available to the Borrower under the Poly-Seal Purchase Agreement, under the Poly-Seal Purchase Agreement Documents, and under applicable Laws with respect to the Poly-Seal Stock Purchase Transaction. Section 3.3 Collateral Disclosure List. On or prior to the date of this Agreement, the Borrower, Berry UK and NIM Holdings shall deliver to the Agent one or more lists (collectively, the "Collateral Disclosure List") which shall contain such information with respect to the business and real and personal property of the Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor as of its date of delivery as the Agent may require and shall be certified by a Responsible Officer of the Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor, as appropriate, all in the form provided to the Borrower by the Agent. Promptly after demand by the Agent, the Borrower shall furnish and shall cause Berry UK, NIM Holdings and each Subsidiary Guarantor to furnish to the Agent an update of the information contained in the Collateral Disclosure List at any time and from time to time as may be requested by the Agent. Section 3.4 Personal Property. The Borrower, Berry UK and NIM Holdings acknowledge and agree that it is the intention of the parties to this Agreement that (i) the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, except as otherwise expressly provided in Section 3.2 (Grant of Liens), shall have a first priority, perfected Lien (except that the Agent acknowledges and agrees that the Lien on the Fixed and Capital Assets of the Borrower located in the State of Nevada, including, without limitation, the real property owned by the Borrower in the State of Nevada shall be a second priority Lien, subject to first priority Liens as set forth in Schedule 4.1.22), in form and substance reasonably satisfactory to the Agent and its counsel, on all of the personal property of the Borrower and of each Subsidiary Guarantor of any kind and nature whatsoever, whether now owned or hereafter acquired, as security for all of the Obligations, subject only to the Permitted Liens, if any and (ii) Bank of America shall have a first priority, perfected Lien, in form and substance reasonably satisfactory to Bank of America and its counsel, on all of the personal property of Berry UK and NIM Holdings of any kind and nature whatsoever, whether now owned or hereafter acquired, as security for the UK Obligations, subject only to the Permitted Liens. In furtherance of the foregoing: 101 3.4.1 Securities, Chattel Paper, Promissory Notes, etc. (a) As of the date of this Agreement and without implying any limitation on the scope of Section 3.2 (Grant of Liens), the Borrower shall deliver and shall cause each Subsidiary Guarantor to deliver (or shall have delivered or caused to be delivered) to the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, all originals of all of letters of credit, Securities, Chattel Paper, Documents and Instruments owned or held by the Borrower and/or any Subsidiary Guarantor, and, if the Agent so requires, shall execute and deliver and, shall cause each Subsidiary Guarantor to execute and deliver (or shall have executed and delivered or caused to be delivered), a separate pledge, assignment and security agreement in form and content acceptable to the Agent, which pledge, assignment and security agreement shall assign, pledge and grant a Lien to the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations on all of the letters of credit, Securities, Chattel Paper, Documents and Instruments of the Borrower and each Subsidiary Guarantor, as the case may be. In addition, the Borrower agrees to endorse to the order of the Agent any and all Instruments that constitute or evidence all or any portion of the Collateral. As of the date of this Agreement, Berry UK and NIM Holdings shall deliver (or shall have delivered to Bank of America, all originals of all of letters of credit, Securities, Chattel Paper, Documents and Instruments owned or held by Berry UK and/or NIM Holdings, and, if Bank of America, acting through its Sterling LIBOR Lending Office, so requires, shall execute and deliver (or shall have executed and delivered), a separate pledge, assignment and security agreement in form and content acceptable to Bank of America, acting through its Sterling LIBOR Lending Office, which pledge, assignment and security agreement shall assign, pledge and grant a Lien to Bank of America, acting through its Sterling LIBOR Lending Office, with respect to the UK Obligations on all of the letters of credit, Securities, Chattel Paper, Documents and Instruments of Berry UK and/or NIM Holdings, as the case may be. In addition, Berry UK and NIM Holdings agree to endorse to the order of Bank of America, acting through its Sterling LIBOR Lending Office, any and all Instruments that constitute or evidence all or any portion of the UK Collateral. (b) In the event that the Borrower or any Subsidiary Guarantor shall acquire (or have acquired) after the Closing Date any letters of credit, Securities, Chattel Paper, Documents or Instruments, the Borrower shall promptly so notify the Agent and deliver the originals of all of the foregoing to the Agent promptly and in any event within thirty (30) days of each acquisition. In the event that Berry UK or NIM Holdings shall acquire (or have acquired) after the Closing Date any letters of credit, Securities, Chattel Paper, Documents or Instruments, Berry UK and NIM Holdings shall promptly so notify Bank of America, acting through its Sterling LIBOR Lending Office, and deliver the originals of all of the foregoing to Bank of America, acting through its Sterling LIBOR Lending Office, promptly and in any event within thirty (30) days of each acquisition. (c) All letters of credit, Securities, Chattel Paper, Documents and Instruments to be delivered hereunder shall be delivered to the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as applicable, endorsed and/or assigned as required by the pledge, assignment and security agreement and/or as the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as applicable, may 102 require and, if applicable, shall be accompanied by blank irrevocable and unconditional stock or bond powers. 3.4.2 Patents, Copyrights and Other Property Requiring Additional Steps to Perfect. As of the date of this Agreement and without implying any limitation on the scope of Section 3.2 (Grant of Liens), the Borrower shall execute and deliver and, shall cause each Subsidiary Guarantor, as appropriate, to execute and deliver (or shall have executed and delivered or caused to be executed and delivered), all Financing Documents and take all actions requested by the Agent in order to perfect a first priority assignment of Patents, Copyrights, Trademarks, customer lists or any other type or kind of intellectual property acquired by the Borrower or any Subsidiary Guarantor after the Closing Date. As of the date of this Agreement, Berry UK and NIM Holdings shall execute and deliver (or shall have executed and delivered), all Financing Documents and take all actions reasonably requested by Bank of America in order to perfect a first priority assignment of Patents, Copyrights, Trademarks, customer lists or any other type or kind of intellectual property acquired by Berry UK and/or NIM Holdings after the Closing Date. Section 3.5 Record Searches. As of the Closing Date and thereafter, as determined by the Agent, at the time any Financing Document is executed and delivered by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor pursuant to this ARTICLE III or any other Section of this Agreement, the Agent shall, in its reasonable discretion and if requested, have received, in form and substance satisfactory to the Agent, such Lien or record searches with respect to the Borrower, Berry UK, NIM Holdings, each Subsidiary Guarantor and/or any other Person who may be an obligor or pledgor with respect to any of the Obligations, as appropriate, and the property covered by such Financing Document showing that the Lien of such Financing Document will be a perfected first priority Lien on the property covered by such Financing Document subject only to Permitted Liens or to such other Liens or matters as the Agent may approve. Notwithstanding the foregoing, the Agent acknowledges and agrees that the Borrower shall be obligated to reimburse the Agent only for actual out-of-pocket costs and expenses relating to Lien and record searches and only to the extent ordered by the Agent (a) one-time only after the Closing Date to confirm the due filing and Lien priority of the Agent and the Lenders, (b) not more frequently than once in any given calendar year after the Closing Date prior to the occurrence of a Default or an Event of Default, and (c) in addition, at any time following the occurrence of a Default or an Event of Default. Section 3.6 Real Property. The Borrower acknowledges and agrees that it is the intention of the parties to this Agreement that the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, shall have a first priority, perfected Lien, in form and substance satisfactory to the Agent and its counsel, on all real property of any kind and nature whatsoever, whether now owned or hereafter acquired by the Borrower or any Subsidiary Guarantor, subject only to the Permitted Liens, excluding, however, any real property leased by 103 the Borrower or any Subsidiary Guarantor. Berry UK and NIM Holdings acknowledge and agree that it is the intention of the parties to this Agreement that Bank of America shall have a first priority, perfected Lien, in form and substance satisfactory to Bank of America and its counsel, on all real property of any kind and nature whatsoever, whether now owned or hereafter acquired by Berry UK or NIM Holdings, subject only to the Permitted Liens and to the limitations on liability set forth in Section 2.10.11 (Limitations on Joint and Several Liability), if any, and subject to the provisions of Section 3.7 below, excluding, however, any real property leased by Berry UK or NIM Holdings. With respect to each parcel of real property now owned by the Borrower, Berry UK, NIM Holdings and/or a Subsidiary Guarantor ), the Borrower, Berry UK and NIM Holdings, as appropriate, shall execute and deliver and, subject to the terms of Section 3.7 (Subsidiary Guarantor Assets), shall cause each Subsidiary Guarantor, as appropriate, to execute and deliver (or to have executed and delivered), as of the date of this Agreement, a deed of trust or a mortgage or other document, including, any amendments or confirmations of the existing Deeds of Trust as may be required by the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate, which deed of trust, mortgage and/or other document shall be included among the Financing Documents. With respect to real property acquired in fee by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor after the Closing Date (whether by merger or otherwise), the Borrower, Berry UK and/or NIM Holdings, as appropriate, shall grant and, subject to the terms of Section 3.7 (Subsidiary Guarantor Assets), shall cause each Subsidiary Guarantor, as appropriate, to grant (or shall have granted or caused to be granted), promptly after acquisition thereof, a Lien covering such real property to the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations or to Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate, under the provisions of a mortgage, deed of trust or other document, as appropriate. Each Financing Document to be executed and delivered pursuant hereto shall: (a) be in form and substance reasonably satisfactory to the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate; (b) create a first priority Lien in such real property in favor of the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations or in favor of Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate, subject only to Permitted Liens, zoning ordinances, and such other matters as the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as applicable, may approve, but subject to the limitations set forth on liability in Section 2.10.11 (Limitations on Joint and Several Liability); (c) be accompanied by a current survey reasonably satisfactory in all respects to the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate, of the subject real property, prepared by a registered land surveyor or engineer reasonably satisfactory to the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate; (d) be accompanied by evidence reasonably satisfactory to the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as 104 appropriate, regarding the current and past pollution control practices at such real property in connection with the discharge, emission, handling, disposal or existence of Hazardous Materials, which may include, at the Agent's or Bank of America's (acting through its Sterling LIBOR Lending Office) request, an environmental audit of such real property prepared by a person or firm reasonably acceptable to the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as applicable; (e) be accompanied by a mortgagee's title insurance policy or marked-up commitment or binder for such insurance in form and substance reasonably satisfactory to the Agent and issued by a title insurance company reasonably satisfactory to the Agent, except for any real property located in a jurisdiction outside of the United States unless mortgagee's title insurance coverage is customary in such jurisdiction; and (f) upon request of the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, be accompanied by a signed opinion of counsel addressed to the Agent and each of the Lenders or Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate, in form and substance reasonably satisfactory to the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, as applicable. Section 3.7 Subsidiary Guarantor Assets. The Borrower agrees that all Obligations are and shall continue to be fully and unconditionally and jointly and severally guaranteed by each Subsidiary Guarantor and that the joint and several obligations of each Subsidiary Guarantor under the Guaranty are and shall continue to be secured by a first priority Lien (subject only to Permitted Liens) on all Assets and properties of each Subsidiary Guarantor. Section 3.8 Costs. The Borrower agrees to pay, as part of the Enforcement Costs and to the fullest extent permitted by applicable Laws, on demand all reasonable costs, fees and expenses incurred by the Agent and/or any of the Lenders in connection with the taking, perfection, preservation, protection and/or release of a Lien on the Collateral, including, without limitation, with respect to all actions required to effect any of the provisions of Section 3.7 (Subsidiary Guarantor Assets), and any of the following: (a) customary reasonable fees and expenses incurred by the Agent and/or any of the Lenders in preparing, reviewing, negotiating and finalizing the Financing Documents from time to time (including, without limitation, reasonable attorneys' fees incurred in connection with preparing, reviewing, negotiating, and finalizing any of the Financing Documents, including, any amendments and supplements thereto); (b) all filing and/or recording taxes or fees; (c) all title insurance premiums and costs; (d) all costs of Lien and record searches; 105 (e) reasonable attorneys' fees in connection with all legal opinions required; (f) appraisal and/or survey costs; and (g) all related reasonable costs, fees and expenses. Section 3.9 Release. Upon the payment and performance of all Obligations (other than contingent indemnification and expense reimbursement obligations for which no claim has been made) of the Borrower and termination of this Agreement, Berry UK, NIM Holdings and all obligations and liabilities of each other Subsidiary Guarantor, under this Agreement and/or under any or all other Financing Documents, the termination and/or expiration of all of the Commitments, all Letters of Credit, all Bond Letters of Credit, all Outstanding Bond Letter of Credit Obligations, and all Outstanding Letter of Credit Obligations, upon the Borrower's request and at the Borrower's sole cost and expense, the Agent shall release and/or terminate the Liens of any and all of the Financing Documents. Section 3.10 Inconsistent Provisions. In the event that the provisions of any Financing Document directly conflict with any provision of this Agreement, the provisions of this Agreement shall govern. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1 Representations and Warranties. The Borrower, Berry UK and NIM Holdings each represents and warrants to the Agent and the Lenders, as follows: 4.1.1 Subsidiaries. The Borrower, Berry UK and NIM Holdings own the Subsidiaries listed on the Collateral Disclosure List attached hereto and made a part hereof and no others, as updated from time to time pursuant to the provisions of this Agreement. Each of the Subsidiaries is a Wholly Owned Subsidiary except as shown on the Collateral Disclosure List, as updated from time to time pursuant to the provisions of this Agreement, which correctly indicates the nature and amount of the Borrower's, Berry UK's and/or NIM Holdings's ownership interests therein, as applicable. 4.1.2 Good Standing. Each of the Borrower and its Subsidiaries (a) is a corporation duly organized, existing and in good standing under the laws of the jurisdiction of its incorporation, (b) has the corporate power to own its property and to carry on its business as now being conducted, and (c) is duly qualified to do business and is in good standing in each jurisdiction in 106 which the character of the properties owned by it therein or in which the transaction of its business makes such qualification necessary or where such non-qualification would have a materially adverse effect on the Borrower and its Subsidiaries taken as a whole or would otherwise impair the ability of the Agent to collect or realize upon any of the Collateral. 4.1.3 Power and Authority. Each of the Borrower and its Subsidiaries has full corporate power and authority to execute and deliver this Agreement, the other Financing Documents, and the Poly-Seal Stock Purchase Documents to which it is a party, to make the borrowings and request Letters of Credit and Bond Letters of Credit under this Agreement, to close and consummate each aspect of the Poly-Seal Stock Purchase Transaction, as appropriate and to incur and perform the Obligations whether under this Agreement, the other Financing Documents, the Poly-Seal Stock Purchase Documents, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of shareholders or any creditors of the Borrower or any Subsidiary, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of the Borrower or any Subsidiary, is required as a condition to the execution, delivery, validity or enforceability of this Agreement, the other Financing Documents, any of the Poly-Seal Stock Purchase Documents, the performance by the Borrower of the Obligations or the closing and consummation of the Poly-Seal Stock Purchase Transaction, in each case, if required, the same has been duly obtained. 4.1.4 Binding Agreements. This Agreement and the other Financing Documents executed and delivered by the Borrower and/or any of its Subsidiaries have been properly executed and delivered and constitute the valid and legally binding obligations of the Borrower and its Subsidiaries, respectively, and are fully enforceable against the Borrower and its Subsidiaries in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general applications affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law. 4.1.5 No Conflicts. Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Borrower or any of the Subsidiaries nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the charter or bylaws of the Borrower or any of the Subsidiaries, (b) any existing mortgage, indenture, contract or agreement binding on the Borrower or any of the Subsidiaries or affecting any of its or their property, or (c) any Laws. 4.1.6 No Defaults, Violations. As of the date of this Agreement: (a) No Default or Event of Default has occurred and is continuing. 107 (b) Neither the Borrower nor any of the Subsidiaries is in material default under any existing mortgage, indenture, contract or agreement binding on it or them or affecting its or their property in any respect which would be materially adverse to the business, operations, property or financial condition of the Borrower and the Subsidiaries, taken as a whole, or which would materially adversely affect the ability of the Borrower and the Subsidiaries, taken as a whole to perform their obligations under this Agreement or under any of the other Financing Documents to which the Borrower and/or any of the Subsidiaries is a party. 4.1.7 Compliance with Laws. Neither the Borrower nor any of the Subsidiaries is in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting the Borrower, any Subsidiary or any of its or their properties, the violation of which, considered in the aggregate, would materially adversely affect the business, operations or properties of the Borrower and/or any Subsidiary taken as a whole. 4.1.8 Margin Stock. None of the proceeds of the Loans will be used, directly or indirectly, by the Borrower or any Subsidiary for the purpose of purchasing or carrying, or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry, any "margin security" within the meaning of Regulation G (12 CFR Part 207), or "margin stock" within the meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve System or for any other purpose which would make the transactions contemplated in this Agreement a "purpose credit" within the meaning of said Regulation G or Regulation U, or cause this Agreement to violate any other regulation of the Board of Governors of the Federal Reserve System or the Securities Exchange Act of 1934 or the Small Business Investment Act of 1958, as amended, or any rules or regulations promulgated under any of such statutes. 4.1.9 Investment Company Act; Margin Securities. Neither the Borrower nor any Subsidiary is an investment company within the meaning of the Investment Company Act of 1940, as amended, nor is it, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company within the meaning of said Act. Neither the Borrower nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying "margin security" within the meaning of Regulation G (12 CFR Part 207), or "margin stock" within the meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve System. 4.1.10 Litigation. Except as otherwise disclosed on Schedule 4.1.10 attached to and made a part of this Agreement, there are no proceedings, actions or investigations pending or, so far as the Borrower knows, threatened before or by any court, arbitrator any Governmental Authority which, in any one case or in the aggregate, could reasonably be expected to have a material 108 adverse effect on the business, properties, condition (financial or otherwise) or operations, present or prospective, of the Borrower or any of the Subsidiaries taken as a whole. 4.1.11 Financial Condition. The consolidated financial statements of the Borrower and the Subsidiaries dated as of December 31, 1999, are complete and correct and fairly present the financial position of the Borrower and the Subsidiaries and the results of their operations as of the date and for the period referred to and have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved. There are no material liabilities, direct or indirect, fixed or contingent, of the Borrower or any Subsidiary as of the date of such financial statements that are not reflected therein. There has been no materially adverse change in the financial condition or operations of the Borrower or any Subsidiary since the date of such financial statements and to the Borrower's knowledge no such materially adverse change is pending. Except as permitted by the provisions of Section 6.2.5 (Investments), neither the Borrower nor any Subsidiary has guaranteed the obligations of, or made any investment in or advances to, any Person (other than the Borrower or any Subsidiary Guarantor), except as disclosed in such financial statements and except that the Borrower and/or any or all of the Subsidiary Guarantors may have guaranteed one or more leases under which the Borrower and/or a Subsidiary Guarantor is a tenant or lessee, as of the date of this Agreement. 4.1.12 Pro-forma Financial Statements. The Borrower has furnished to the Agent a pro-forma consolidated balance sheet of the Borrower and the Subsidiaries as of December 31, 1999, but giving effect to the Poly-Seal Purchase Agreement Transaction and the transactions incident thereto (the "Pro-forma Balance Sheet") together with pro-forma financial projections of the Parent for the five-year period subsequent to the Poly-Seal Purchase Transaction (the "Pro-forma Financial Projections"). A copy of the Pro-forma Balance Sheet and the Pro-forma Financial Projections are attached hereto as Exhibits C-1 and C-2, respectively. The Pro-forma Balance Sheet is correct and complete, has been prepared in accordance with GAAP, and fairly presents in all material respects the consolidated financial condition of the Borrower and the Subsidiaries as of December 31, 1999, but giving effect to the Poly-Seal Purchase Transaction and the transactions incident thereto. The Pro-forma Financial Projections represent the best estimate of the future operations of the Parent and are based on reasonable and conservative assumptions, but do not constitute a guaranty of actual performance. 4.1.13 Full Disclosure. The financial statements referred to in Section 4.1.11 (Financial Condition) of this Agreement and the statements, reports or certificates furnished by the Borrower in connection with the Financing Documents (a) do not contain any untrue statement of a material fact and (b) when taken in their entirety, do not omit any material fact necessary to make the statements contained therein not misleading. There is no fact known to the Borrower which the Borrower has not disclosed to the Agent and the Lenders in writing prior to the date of this Agreement with respect to the transactions contemplated by the Financing Documents which materially and adversely affects or in the future would, in the reasonable opinion of the Borrower 109 materially adversely affect the condition, financial or otherwise, results of operations, business, or assets of the Borrower and the Subsidiaries, taken as a whole. 4.1.14 Indebtedness for Borrowed Money. As of the date of this Agreement, except for the Obligations and except as set forth in Schedule 4.1.14 attached to and made a part of this Agreement, neither the Borrower, Berry UK nor NIM Holdings has any Indebtedness for Borrowed Money. The Agent has received photocopies of all promissory notes evidencing any Indebtedness for Borrowed Money set forth in Schedule 4.1.14, together with any and all material subordination agreements, other agreements, documents, or instruments securing, evidencing, guarantying or otherwise executed and delivered in connection therewith. 4.1.15 Subordinated Debt; Senior Secured Debt. None of the Subordinated Debt Loan Documents nor any of the Senior Secured Debt Loan Documents in effect prior to the date of this Agreement have been amended, supplemented, restated or otherwise modified except as otherwise disclosed to the Agent in writing on or before the date of this Agreement. In addition, the Borrower has furnished copies of each amendment, supplement, restatement or other modification to any of the Subordinated Debt Loan Documents executed on or before the date of this Agreement. In addition, there does not exist any default or any event which upon notice or lapse of time or both would constitute a default under the terms of any of the Subordinated Debt Loan Documents or any of the Senior Secured Debt Loan Documents. 4.1.16 Taxes. The Borrower and the Subsidiaries have filed all returns, reports and forms for all material Taxes which, to the knowledge of the Borrower, are required to be filed, and have paid all such material Taxes as shown on such returns or on any assessment received by it, to the extent that such Taxes have become due, unless and to the extent only that such Taxes, assessments and governmental charges are currently contested in good faith and by appropriate proceedings by the Borrower, such Taxes are not the subject of any Liens other than Permitted Liens, and adequate reserves therefor have been established as required under GAAP. All tax liabilities of the Borrower and the Subsidiaries were as of the date of the audited financial statements referred to in Section 4.1.11 (Financial Condition), and are now, adequately provided for on the books of the Borrower and the Subsidiaries, as appropriate. No material tax liability has been asserted by the Internal Revenue Service or any state or local authority against the Borrower or any Subsidiary for Taxes in excess of those already paid. 4.1.17 ERISA. With respect to any "pension plan" as defined in SECTION 3(2) of ERISA, which plan is now or previously has been maintained or contributed to by the Borrower and/or any Subsidiary and/or by any commonly controlled entity: (a) no "accumulated funding deficiency" as defined in Code ss.412 or ERISA ss.302 has occurred, whether or not that accumulated funding deficiency has been waived; (b) no Reportable Event has occurred; (c) no termination of any plan subject to Title IV of ERISA has occurred; (d) no Borrower, Subsidiary 110 nor any commonly controlled entity (as defined under ERISA) has incurred a "complete withdrawal" within the meaning of ERISA ss.4203 from any Multi-employer Plan; (e) no Borrower, Subsidiary nor any commonly controlled entity has incurred a "partial withdrawal" within the meaning of ERISA ss.4205 with respect to any Multi-employer Plan; (f) no Multi-employer Plan to which the Borrower, any Subsidiary or any commonly controlled entity has an obligation to contribute is in "reorganization" within the meaning of ERISA ss.4241 nor has notice been received by the Borrower, any Subsidiary or any commonly controlled entity that such a Multi-employer Plan will be placed in "reorganization". 4.1.18 Title to Properties. Each of the Borrower and the Subsidiaries has good title to all of its and their respective properties, including, without limitation, the Collateral and the properties and assets reflected in the balance sheets described in Section 4.1.11 (Financial Condition), subject to any minor imperfections in title which do not significantly detract from the use thereof. The Borrower and each Subsidiary have legal, enforceable and uncontested rights to use freely such property and assets. 4.1.19 Patents, Trademarks, Etc. Each of the Borrower and the Subsidiaries owns, possesses, or has the right to use all necessary Patents, licenses, Trademarks, Copyrights, permits and franchises to own its properties and to conduct its business as now conducted, without known conflict with the rights of any other Person. Any and all obligations to pay royalties or other charges with respect to such properties and assets are properly reflected on the financial statements described in Section 4.1.11 (Financial Condition). 4.1.20 Employee Relations. Except as disclosed on Schedule 4.1.20 attached hereto and made a part hereof, as updated from time to time, (a) no Borrower nor any Subsidiary nor the Borrower's or any Subsidiary's employees is subject to any collective bargaining agreement, (b) to the Borrower's knowledge, no petition for certification or union election is pending with respect to the employees of the Borrower or any Subsidiary and no union or collective bargaining unit has sought such certification or recognition with respect to the employees of the Borrower, and (c) as of the date of this Agreement, there are no strikes, slowdowns, work stoppages or controversies pending or, to the best knowledge of the Borrower after due inquiry, threatened between the Borrower and its employees. Hours worked and payments made to the employees of any one or more of the Borrower have not been in violation of the Fair Labor Standards Act or any other applicable law dealing with such matters. All payments due from the Borrower or any Subsidiary or for which any claim may be made against the Borrower or any Subsidiary, on account of wages and employee and retiree health and welfare insurance and other benefits have been paid or accrued as a liability on its or their books, as appropriate. 111 4.1.21 Presence of Hazardous Materials or Hazardous Materials Contamination. To the best of the Borrower's knowledge and except as disclosed in writing to the Agent in Schedule 4.1.21 hereof with respect to any matters existing as of the date of this Agreement and except as hereafter disclosed in writing to the Agent with respect to any matters arising after the date of this Agreement, (a) no Hazardous Materials are located on any real property owned, controlled or operated by the Borrower or any Subsidiary or for which the Borrower or any Subsidiary is, or is claimed to be, responsible, except for reasonable quantities of necessary supplies for use by the Borrower and/or the Subsidiaries any of their respective tenants in the ordinary course of its or their lines of business as permitted by this Agreement and stored, used and disposed in accordance with applicable Laws; and (b) no property owned, controlled or operated by the Borrower or any Subsidiary or for which the Borrower or any Subsidiary has, or is claimed to have, responsibility is affected by any material Hazardous Materials Contamination at any other property. 4.1.22 Perfection and Priority of Collateral. The Agent and the Lenders have, or upon execution and recording of UCC-1 financing statements and possession of Securities, Documents, Instruments, Chattel Paper and Instruments will have, and will continue to have as security for the Obligations (subject to the terms of Section 3.7 (Subsidiary Guarantor Assets) and the terms of Section 2.10.11(Limitations on Joint and Several Liability), a valid and perfected Lien on and security interest in all Collateral (except that the UK Collateral shall secure the UK Obligations only), free of all other Liens, claims and rights of third parties whatsoever except Permitted Liens, including, without limitation, those described on Schedule 4.1.22. 4.1.23 Places of Business and Location of Collateral. The information contained in the Collateral Disclosure List, as updated annually and at such other times as shall be determined by the Borrower at any time prior to the occurrence of a Default or an Event of Default and as shall be determined by the Agent at any time following the occurrence of a Default or an Event of Default, is complete and correct in all material respects. The Collateral Disclosure List completely and accurately identifies the address of (a) the chief executive office of the Borrower, Berry UK, NIM Holdings and each of the Subsidiary Guarantors, (b) any and each other place of business of the Borrower, Berry UK, NIM Holdings or any of the Subsidiary Guarantors, (c) the location of all books and records pertaining to the Collateral, and (d) each location, other than the foregoing, where any of the Collateral is located. The legally required places to file financing statements with respect to the Collateral within the meaning of the Uniform Commercial Code are the filing offices for those jurisdictions in which the Borrower and/or any Subsidiary Guarantor, as appropriate, maintains a place of business as identified on the Collateral Disclosure List. 4.1.24 Business Names and Addresses. Except as set forth in Schedule 4.1.24 attached hereto and made a part hereof, in the five (5) years preceding the date hereof, neither the Borrower, Berry UK, NIM 112 Holdings nor any of its Subsidiaries has changed its name, identity or corporate structure, has conducted business under any name other than its current name, and has conducted its business in any jurisdiction other than those disclosed on the Collateral Disclosure List. 4.1.25 Equipment. No equipment is held by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor on a sale on approval basis. 4.1.26 Inventory. All material portions of the Inventory of the Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor included in the Borrowing Base and/or the UK Borrowing Base, conform to the eligibility criteria set forth in the definition of Eligible Domestic Inventory and/or Eligible UK Inventory, as applicable. Except as disclosed in the Collateral Disclosure List, no goods offered for sale by the Borrower or any Subsidiary are consigned to or held on sale or return terms by the Borrower or any Subsidiary. 4.1.27 Accounts. All material portions of the Accounts included in the Borrowing Base and the UK Borrowing Base conform to the eligibility criteria set forth in the definition of Eligible Domestic Receivables and Eligible UK Receivables, as applicable. 4.1.28 Poly-Seal Stock Purchase Transaction. The Agent has received true and correct photocopies of the Poly-Seal Stock Purchase Agreement and each of the other Poly-Seal Stock Purchase Documents, executed, delivered and/or furnished on or before the date of this Agreement in connection with the Poly-Seal Stock Purchase Transaction. Neither the Poly-Seal Stock Purchase Agreement nor any of the other Poly-Seal Stock Purchase Documents have been modified, changed, supplemented, canceled, amended or otherwise altered, except as otherwise disclosed to the Agent in writing on or before the date of this Agreement. The Poly-Seal Stock Purchase Transaction has been effected, closed and consummated pursuant to, and in accordance with, the terms and conditions of the Poly-Seal Stock Purchase Agreement and with all applicable Laws. 4.1.29 Hart-Scott-Rodino. The Borrower, the Seller and all other necessary Persons, as appropriate, have made such filings as may be required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and have provided such supplemental information that may be required by such Act, with respect to the sales contemplated by the Poly-Seal Stock Purchase Transaction. The waiting periods under such Act have terminated or expired. 4.1.30 Credit Facilities. The Borrower hereby represents and warrants that none of the Credit Facilities nor the obligations of the Borrower, Berry UK, NIM Holdings and the Subsidiary 113 Guarantors under and with respect to any of the Obligations are in violation of or otherwise constitute a default under the provisions of the Indenture. In particular, the Term Loans (including the Term Loan B Increase and the Term Loan A Increase) and the Revolving Loan constitute "Senior Indebtedness" under the provisions of the Indenture. The Borrower further represents and warrants that neither its agreement nor the agreement of any Subsidiary Guarantor to guaranty payment of the UK Credit Facilities and to grant liens on their respective assets and properties are in violation of or otherwise constitute a default under the provisions of the Indenture. Section 4.2 Survival; Updates of Representations and Warranties. All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the date of this Agreement, the making of any advance under the Loans and extension of credit made hereunder, and the incurring of any other Obligations and shall be deemed to have been made at the time of the making of each advance under the Loans or the issuance of each Letter of Credit and/or each Bond Letter of Credit, except that (a) representations and warranties which relate to a specific date need only be true and correct as of such date, and (b) the representations and warranties which relate to financial statements which are referred to in Section 4.1.11 (Financial Condition), shall also be deemed to cover financial statements furnished from time to time to the Agent and the Lenders pursuant to Section 6.1.1 (Financial Statements). The Borrower, Berry UK and NIM Holdings shall have the right from time to time to modify or supplement any of the Schedules (including the provision of new Schedules) and/or the Collateral Disclosure List referred to in this ARTICLE IV, and following any such modification or supplement the representations in this ARTICLE IV shall be deemed to refer to such Schedules and Collateral Disclosure List as so modified or supplemented; provided, that the Borrower, Berry UK and/or NIM Holdings, as applicable, will be deemed to have represented at the time of delivery of any such modification or supplement that the modifications of and supplements to such Schedules and/or Collateral Disclosure List after the date of this Agreement do not relate to events or circumstances which individually or in the aggregate have resulted in a material adverse change in the business or operations of the Borrower, Berry UK, NIM Holdings and its Subsidiaries taken as a whole or which would otherwise constitute a Default or an Event of Default. ARTICLE V CONDITIONS PRECEDENT Section 5.1 Conditions to the Initial Advance and Initial Letter of Credit. The making of the initial advance under the Loans and the issuance of the initial Letter of Credit and the initial Bond Letter of Credit are subject to the fulfillment on or before the date of this Agreement of the following conditions precedent in a manner reasonably satisfactory in form and substance to the Agent and its counsel: 114 5.1.1 Organizational Documents - Borrower, Berry UK and NIM Holdings. The Agent shall have received for the Borrower, Berry UK and NIM Holdings: (a) for the Borrower only, a certificate of good standing certified by the Secretary of State, or other appropriate Governmental Authority, of the state of incorporation of the Borrower, if applicable; (b) for the Borrower only, a certificate of qualification to do business certified by the Secretary of State or other Governmental Authority of each state in which the Borrower conducts business, as applicable; (c) a certificate dated as of the date of this Agreement by the Secretary or an Assistant Secretary of each of the Borrower, Berry UK and NIM Holdings covering: (i) true and complete copies of its corporate charter, bylaws, and all amendments thereto; (ii) true and complete copies of the resolutions of its Board of Directors authorizing (A) the execution, delivery and performance of the Financing Documents and the Poly-Seal Stock Purchase Documents to which it is a party, (B) the borrowings hereunder, (C) the granting of the Liens contemplated by this Agreement and the Financing Documents to which it is a party and (D) the Poly-Seal Stock Purchase Transaction; (iii) the incumbency, authority and signatures of the officers authorized to sign this Agreement and the other Financing Documents to which it is a party; and (iv) the identity of its current directors, common stock holders and other equity holders, as well as their respective percentage ownership interests. 5.1.2 Opinion of Counsel. The Agent shall have received such favorable opinions of counsel for the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors addressed to the Agent, the Lenders and Bank of America, acting through its Sterling LIBOR Lending Office, in form and substance satisfactory to the Agent and as requested by the Agent. 5.1.3 Organizational Documents - Guarantors. The Agent shall have received for each Guarantor: (a) a certificate of good standing certified by the Secretary of State, or other appropriate Governmental Authority, of the state of incorporation; 115 (b) a certificate of qualification to do business certified by the Secretary of State or other Governmental Authority of each state in which each Guarantor conducts business; (c) a certificate dated as of the date of this Agreement by the Secretary or an Assistant Secretary of each Guarantor covering: (i) true and complete copies of the its corporate charter, bylaws, and all amendments thereto; (ii) true and complete copies of the resolutions of it's Board of Directors authorizing the execution, delivery and performance of the Financing Documents to which it is a party and the granting of the Liens contemplated by any of the Financing Documents to which it is a party; (iii) the incumbency, authority and signatures of its officers to sign the Guaranty and all other Financing Documents to which it is a party; (iv) the identity of it's current directors, common stock holders and other equity holders, as well as their respective percentage ownership interests; (d) the favorable opinion of counsel for the Guarantors addressed to the Agent, the Lenders and Bank of America, acting through its Sterling LIBOR Lending Office, and in form satisfactory to the Agent. 5.1.4 Consents, Licenses, Approvals, Etc. The Agent shall have received copies of all consents, licenses and approvals, required in connection with the execution, delivery, performance, validity and enforceability of the Financing Documents, and the Poly-Seal Stock Purchase Documents, and such consents, licenses and approvals shall be in full force and effect. 5.1.5 Notes. The Agent shall have received for delivery to each of the Lenders the UK Term Note, the UK Revolving Credit Note, the Term Notes and the Revolving Credit Notes, each conforming to the requirements hereof and executed by a Responsible Officer of the Borrower, Berry UK and NIM Holdings, as applicable, and attested by a duly authorized representative of the Borrower, Berry UK and NIM Holdings, as applicable. 5.1.6 Financing Documents and Collateral. The Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor shall have executed and delivered the Financing Documents to be executed by it, including, without limitation, the UK Security Documents, the UK Credit Facilities Guaranty and the UK Security Agreement and shall have delivered original Chattel Paper, Instruments, Securities, and related Collateral and all opinions, title insurance, and other documents contemplated by ARTICLE III (The Collateral). 116 5.1.7 Other Financing Documents. In addition to the Financing Documents to be delivered by the Borrower, Berry UK and/or NIM Holdings, the Agent shall have received the Financing Documents duly executed and delivered by parties thereto other than the Borrower, Berry UK or NIM Holdings. 5.1.8 Other Documents, Etc. The Agent shall have received such other certificates, opinions, documents and instruments confirmatory of or otherwise relating to the transactions contemplated hereby as may have been reasonably requested by the Agent. 5.1.9 Payment of Fees. The Agent and the Lenders shall have received payment of any Fees due on or before the date of this Agreement. 5.1.10 Collateral Disclosure List. The Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor shall have delivered the Collateral Disclosure List required under the provisions of Section 3.3 (Collateral Disclosure List) hereof duly executed by a Responsible Officer of the Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor, as appropriate. 5.1.11 Recordings and Filings. The Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor, as appropriate, shall have: (a) executed and delivered all Financing Documents (including, without limitation, UCC-1 and UCC-3 statements) required to be filed, registered or recorded in order to create, in favor of the Agent and the Lenders, a perfected Lien in the Collateral (subject only to the Permitted Liens) in form and in sufficient number for filing, registration, and recording in each office in each jurisdiction in which such filings, registrations and recordations are required, and (b) delivered such evidence as the Agent may deem satisfactory that all necessary filing fees and all recording and other similar fees, and all Taxes and other expenses related to such filings, registrations and recordings will be or have been paid in full. 5.1.12 Insurance Certificate. The Agent shall have received an insurance certificate in accordance with the provisions of Section 6.1.8 (Insurance) and Section 6.1.17 (Insurance With Respect to Equipment and Inventory) of this Agreement. The Agent and the Lenders acknowledge and agree that a series of insurance certificates acceptable to the Agent were furnished to the Agent on or about the First Closing Date and again on May 13, 1997 and that additional insurance certificates will not be required except with respect to the insurance coverages of Poly-Seal. 117 5.1.13 Landlord's Waivers. Unless otherwise agreed by the Agent, the Agent shall have received a landlord's waiver from each landlord of each and every business premise leased by the Borrower and/or any Subsidiary Guarantor and on which any of the Collateral is or may hereafter be located, which landlords' waivers must be reasonably acceptable to the Agent and its counsel in their sole and absolute discretion. 5.1.14 Bailee Acknowledgements. Unless otherwise agreed by the Agent, the Agent shall have received an agreement acknowledging the Liens of the Agent and the Lender from each bailee, warehouseman, consignee or similar third party which has possession of any of the Collateral, which agreements must be reasonably acceptable to the Agent and its counsel in their sole and absolute discretion. 5.1.15 Field Examination. The Agent shall have completed a field examination and audit of the business, operations and income of the Borrower, Berry UK, NIM Holdings and each Subsidiary Guarantor, the results of which field examination and audit shall be in all respects acceptable to the Agent in its sole and absolute discretion and shall include reference discussions with key customers and vendors. 5.1.16 Appraisal. The Agent shall have received appraisals of all real and personal property owned by the Borrower, Berry UK, NIM Holdings and/or each Subsidiary Guarantor, all of which appraisals shall be performed by one or more appraisers satisfactory in all respects to the Agent, shall be in such form and content as may be required by the Agent. 5.1.17 Pro-forma Balance Sheet and Projections. The Agent shall have received and approved the Borrower's Pro-forma Balance Sheet and Pro-forma Financial Projections, which Pro-forma Balance Sheet and Pro-forma Financial Projections must be in form and content acceptable to the Agent in its sole and absolute discretion. 5.1.18 Stock Certificates and Stock Powers. The Agent shall have received all of the original stock certificates of each Subsidiary Guarantor and all original certificates representing one hundred percent (100%) of the stock issued by NIM Holdings and fully executed irrevocable stock powers from the holders of all such stock certificates. 118 5.1.19 Poly-Seal Stock Purchase Agreement Transaction. (a) The Poly-Seal Stock Purchase Transaction shall have been completed and closed prior to or simultaneously herewith upon terms and conditions reasonably satisfactory to the Agent, in accordance with the Poly-Seal Stock Purchase Agreement and all applicable Laws. (b) The Agent shall have received photocopies of all Poly-Seal Stock Purchase Documents executed, delivered and/or furnished in connection with the Poly-Seal Stock Purchase Transaction, together with a certificate signed by a Responsible Officer of the Borrower certifying that the Poly-Seal Stock Purchase Agreement and the other Poly-Seal Stock Purchase Documents furnished to the Agent are true, correct, in full force and effect and the provisions thereof have not been in any way modified, amended or waived, except as otherwise disclosed in writing to the Agent on or before the date of this Agreement. (c) The Parent shall have issued and sold the Preferred Stock in accordance with the Preferred Stock Shareholder Agreements and shall have received gross proceeds in an amount at least equal to Twenty-five Million Dollars ($25,000,000); the net proceeds of which (after payment of all fees and expenses incurred in connection with the closing and consummation of the transactions contemplated by the Preferred Stock Shareholder Agreements) shall be contributed to the Borrower. 5.1.20 Environmental Reports. The Agent shall have received and reviewed a Phase I environmental assessment for each parcel of real property owned or leased by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor, each of which environmental assessment has been performed by a reputable and recognized environmental consulting firm acceptable to the Agent and has revealed no material Hazardous Materials Contamination or material violations of any Environmental Laws, and shall otherwise be in all respects acceptable to the Agent. 5.1.21 Financial Statements. The Agent shall have received and reviewed copies of the annual audited financial statements in reasonable detail satisfactory to the Agent relating to the Borrower and its Subsidiaries for the fiscal year ending December 31, 1999 and for Poly-Seal for the fiscal year ending December 31, 1999, prepared in accordance with GAAP, which financial statements shall include a consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as of the end of each such fiscal year and consolidated and consolidating statements of income, cash flows and changes in shareholders equity of the Borrower and its Subsidiaries for each such fiscal year. In addition, the Agent shall have received and reviewed copies of the most recent interim monthly financial statements for Poly-Seal, the Borrower and its Subsidiaries, all prepared in accordance with GAAP. 119 Section 5.2 Conditions to all Extensions of Credit. The making of all advances under the Loans and the issuance of all Letters of Credit and all Bond Letters of Credit is subject to the fulfillment of the following conditions precedent in a manner reasonably satisfactory in form and substance to the Agent: 5.2.1 Default. There shall exist no Event of Default or Default hereunder. 5.2.2 Representations and Warranties. The representations and warranties of the Borrower, Berry UK and NIM Holdings contained among the provisions of this Agreement shall be true and correct (except that any such representations and warranties that are not qualified as to materiality need only be true and correct in all material respects) and with the same effect as though such representations and warranties had been made at the time of the making of, and of the request for, each advance under the Loans or the issuance of each Letter of Credit or Bond Letter of Credit, except that (a) the representations and warranties which relate to a specific date need only be true and correct as of such date and (b) the representations and warranties which relate to financial statements which are referred to in Section 4.1.11 (Financial Condition), shall also be deemed to cover financial statements furnished from time to time to the Agent pursuant to Section 6.1.1 (Financial Statements). 5.2.3 Adverse Change. No material adverse change shall have occurred in the condition (financial or otherwise), operations or business of the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor which would, in the good faith judgment of the Agent, materially impair the ability of the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor to pay or perform any of the Obligations. 5.2.4 Legal Matters. All legal documents incident to each advance under the Loans and each of the Letters of Credit and Bond Letters of Credit shall be reasonably satisfactory to the Agent. ARTICLE VI COVENANTS OF THE BORROWER Section 6.1 Affirmative Covenants. So long as any of the Obligations (or any the Commitments therefor) shall be outstanding hereunder, the Borrower, Berry UK and NIM Holdings agree jointly and severally with the Agent and the Lenders as follows: 120 6.1.1 Financial Statements. The Borrower shall furnish to the Agent for distribution to the Lenders: (a) Annual Statements and Certificates. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event more than ninety (90) days after the close of the Borrower's fiscal years, (i) a copy of the annual consolidated and consolidating financial statements in reasonable detail satisfactory to the Agent relating to the Borrower, Berry UK, NIM Holdings and all other Subsidiaries, prepared in accordance with GAAP and examined and certified (as to consolidated statements) by independent certified public accountants satisfactory to the Agent, which financial statements shall include a consolidated and consolidating balance sheet of the Borrower, Berry UK, NIM Holdings and all other Subsidiaries as of the end of such fiscal year and consolidated and consolidating statements of income, cash flows and changes in shareholders equity of the Borrower, Berry UK, NIM Holdings and all other Subsidiaries for such fiscal year, and (ii) a Compliance Certificate, in substantially the form attached to this Agreement as EXHIBIT D, containing a detailed computation of each financial covenant in this Agreement which is applicable for the period reported, a certification that no change has occurred to the information contained in the Collateral Disclosure List (except as set forth any schedule attached to the certification) and (iii) a management letter in the form prepared by the Borrower's independent certified public accountants, but only if and to the extent customarily obtained by the Borrower. The Agent agrees that any one of the "Big 4" accounting firms is satisfactory to the Agent for purposes of this Section 6.1.1(a), except to the extent the Agent in its reasonable discretion and based on good faith and legitimate concerns determines that any such accounting firm would be unacceptable because of any conflict of interest or any material adverse change affecting such firm's reliability or financial viability. (b) Annual Opinion of Accountant. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event more than ninety (90) days after the close of the Borrower's fiscal years, a letter or opinion of the accounting firm which examined and certified the annual financial statement relating to the Borrower, Berry UK, NIM Holdings and all other Subsidiaries stating whether anything in such accounting firm's examination has revealed the occurrence of a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (c) Quarterly Statements and Certificates. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event more than forty-five (45) days after the close of the Borrower's fiscal quarters (other than the final fiscal quarter), consolidated and consolidating balance sheets of the Borrower, Berry UK, NIM Holdings and all other Subsidiaries as of the close of such period, consolidated and consolidating income, cash flows and changes in shareholders equity statements for such period, and a Compliance Certificate, in substantially the form attached to this Agreement as EXHIBIT D, containing a detailed computation of each financial covenant in this Agreement which is applicable for the period reported, each prepared by a Responsible Officer of or on behalf of the Borrower in a format acceptable to the Agent, all as prepared and certified by a Responsible Officer of the Borrower and accompanied by a certificate of that officer stating whether any 121 event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (d) Monthly Statements and Certificates. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event more than thirty-five (35) days after the close of the Borrower's fiscal months, consolidated and consolidating balance sheets of the Borrower, Berry UK, NIM Holdings and all other Subsidiaries as of the close of such period, consolidated and consolidating income, cash flows and changes in shareholders equity statements for such period, and a detailed computation of each financial covenant in this Agreement which is applicable for the period reported, all as prepared and certified by a Responsible Officer of the Borrower and accompanied by a certificate of that officer stating whether any event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (e) Monthly reports - Borrowing Base. As part of the Borrowing Base Certificate, the Borrower shall furnish to the Agent for distribution to the Lenders within twenty (20) days after the end of each fiscal month, a report containing the following information: (i) a detailed aging schedule of all Accounts for the Borrower and each Subsidiary Guarantor by Account Debtor, in such detail, and accompanied by such supporting information, as the Agent may from time to time reasonably request; (ii) a detailed aging of all accounts payable by supplier, in such detail, and accompanied by such supporting information, as the Agent may from time to time reasonably request; and (iii) a listing of all Inventory of the Borrower and each Subsidiary Guarantor by component, category and location, in such detail, and accompanied by such supporting information as the Agent may from time to time reasonably request. (f) Monthly reports - UK Borrowing Base. As part of the UK Borrowing Base Certificate, Berry UK and NIM Holdings shall furnish to the Agent for distribution to the Lenders within twenty (20) days after the end of each fiscal month, a report containing the following information: (i) a detailed aging schedule of all Accounts for Berry UK and NIM Holdings by Account Debtor, in such detail, and accompanied by such supporting information, as the Agent may from time to time reasonably request; (ii) a detailed aging of all accounts payable by supplier, in such detail, and accompanied by such supporting information, as the Agent may from time to time reasonably request; and (iii) a listing of all Inventory of Berry UK and NIM Holdings by component, category and location, in such detail, and 122 accompanied by such supporting information as the Agent may from time to time reasonably request. (g) Annual Budget and Projections. The Borrower shall furnish to the Lender as soon as available, but in no event later than the 10th day before the end of each fiscal year: (i) a consolidated and consolidating budget and pro forma financial statements on a month-to-month basis for the following fiscal year, and (ii) three-year financial projections or financial projections for such lesser or greater period to the extent routinely prepared by the Borrower in the ordinary course of its business, which projections shall include both consolidated and consolidating projections with respect to the Borrower, Berry UK, NIM Holdings and all other Subsidiaries. (h) Amendments to Subordinated Debt Loan Documents; Senior Secured Debt Loan Documents. The Borrower will furnish copies of each amendment, supplement, restatement or other modification to any of the Subordinated Debt Loan Documents and/or the Senior Secured Debt Loan Documents executed at any time after the Closing Date on or before the effective date of such amendment, supplement, restatement or other modification. (i) Additional Reports and Information. The Borrower, Berry UK and NIM Holdings shall furnish to the Agent for distribution to the Lenders promptly, such additional information, reports or statements as the Agent and/or any of the Lenders may from time to time reasonably request. 6.1.2 Reports to SEC and to Stockholders. The Borrower will furnish to the Agent for distribution to the Lenders, promptly upon the filing or making thereof, at least one (1) copy of all reports, notices and proxy statements sent by the Parent, the Borrower or any of their respective Subsidiaries to its stockholders, and of all regular and other reports filed by the Parent, the Borrower or any of their respective Subsidiaries with the Securities and Exchange Commission. 6.1.3 Recordkeeping, Rights of Inspection, Field Examination, Etc. (a) The Borrower, Berry UK and NIM Holdings shall, and shall cause each of the Subsidiaries to, maintain (i) a standard system of accounting in accordance with GAAP, and (ii) proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its properties, business and activities. (b) The Borrower, Berry UK and NIM Holdings shall, and shall cause each of the Subsidiaries to, permit authorized representatives of the Agent and any of the Lenders to visit and inspect the properties of the Borrower, Berry UK, NIM Holdings and the Subsidiaries, to review, audit, check and inspect the Collateral at any time with reasonable prior notice prior to the occurrence of an Event of Default, and without notice at any time on or after 123 the occurrence of an Event of Default, to review, audit, check and inspect the other books of record of the Borrower, Berry UK, NIM Holdings and the Subsidiaries at any time with or without notice and to make abstracts and photocopies thereof, and to discuss the affairs, finances and accounts of the Borrower, Berry UK, NIM Holdings and the Subsidiaries, with the officers, directors, employees and other representatives of the Borrower, Berry UK, NIM Holdings and the Subsidiaries and their respective accountants, all at such times during normal business hours and other reasonable times and as often as the Agent and/or any of the Lenders may reasonably request. (c) The Borrower, Berry UK and NIM Holdings each hereby irrevocably authorizes and directs all accountants and auditors employed by the Borrower, Berry UK, NIM Holdings and/or any Subsidiary, or from any Governmental Authority, at any time prior to the repayment in full of the Obligations to exhibit and deliver to the Agent for distribution to the Lenders copies of any and all of the financial statements, trial balances, management letters, or other accounting records of any nature of the Borrower, Berry UK, NIM Holdings and/or any or all Subsidiaries in the accountant's or auditor's possession, and to disclose to the Agent and any of the Lenders any information they may have concerning the financial status and business operations of the Borrower, Berry UK, NIM Holdings and/or any or all Subsidiaries. Further, the Borrower, Berry UK, and NIM Holdings each hereby authorizes all Governmental Authorities to furnish to the Agent for distribution to the Lenders copies of reports or examinations relating to the Borrower, Berry UK, NIM Holdings and/or any or all Subsidiaries, whether made by the Borrower, Berry UK, NIM Holdings or otherwise. The Agent agrees that it shall not request any of the foregoing items directly from any accountants or auditors employed by the Borrower, Berry UK, NIM Holdings or any Subsidiary or from any Governmental Authority at any time prior to the occurrence of an Event of Default unless (i) the Agent shall have first requested such items from the Borrower and the Borrower shall have failed or is unable to furnish the requested items promptly and (ii) the Agent shall have notified the Borrower and/or the respective Subsidiary, as appropriate. Upon the Borrower's request, the Agent will furnish copies of all items obtained by the Agent from any accountants or auditors for the Borrower unless the Agent is legally prohibited from so doing. (d) All reasonable costs and expenses incurred by, or on behalf of, the Agent in connection with the conduct of any of the foregoing shall be part of the Enforcement Costs and shall be payable to the Agent upon demand. The Borrower acknowledges and agrees that such expenses may include, but shall not be limited to, any and all out-of-pocket costs and expenses of the Agent's employees and agents in, and when, travelling to any of the facilities of the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor. 6.1.4 Corporate Existence. Except in connection with consummation of those transactions permitted by Section 6.2.1 (Capital Structure), the Borrower, Berry UK and NIM Holdings shall maintain, and shall cause each of their Subsidiaries to maintain, its corporate existence in good standing in the jurisdiction in which it is incorporated and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction would have a material adverse effect (a) on the ability of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, taken as a whole, to perform the Obligations, (b) on the conduct of the 124 operations of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, taken as a whole, (c) on the consolidated financial condition of the Borrower and the Subsidiaries, taken as a whole, or (d) on the value of, or the ability of the Agent and the Lenders to realize upon, any of the Collateral. 6.1.5 Compliance with Laws. The Borrower, Berry UK and NIM Holdings shall comply, and shall cause each of their Subsidiaries to comply, with all applicable Laws and observe the valid requirements of all Governmental Authorities, the noncompliance with or the nonobservance of which would have a material adverse effect (a) on the ability of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, taken as a whole, to perform the Obligations, (b) on the conduct of the operations of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, taken as a whole, (c) on the consolidated financial condition of the Borrower and the Subsidiaries, taken as a whole, or (d) on the value of, or the ability of the Agent and the Lenders to realize upon, any of the Collateral. 6.1.6 Preservation of Properties. Except as otherwise expressly permitted by the provisions of this Agreement, the Borrower, Berry UK and NIM Holdings will, and will cause each of their Subsidiaries to, at all times (a) maintain, preserve, protect and keep its material properties, whether owned or leased, in good operating condition, working order and repair (ordinary wear and tear excepted), and from time to time will make all proper repairs, maintenance, replacements, additions and improvements thereto needed to maintain such properties in good operating condition, working order and repair, and (b) do or cause to be done all things necessary to preserve and to keep in full force and effect its material franchises, leases of real and personal property, trade names, patents, trademarks and permits which are necessary for the orderly continuance of its business. 6.1.7 Line of Business. The Borrower, Berry UK and NIM Holdings will continue and, will cause their Subsidiaries to continue, to engage substantially only in the business of manufacturing, marketing, selling and distributing plastic products or in a business related thereto. 6.1.8 Insurance. The Borrower, Berry UK and NIM Holdings will, and will cause each of their Subsidiaries to, at all times maintain with "A" (or its English equivalent with respect to Berry UK and NIM Holdings) or better rated insurance companies such insurance as is required by applicable Laws and such other insurance, in such amounts, of such types and against such risks, hazards, liabilities, casualties and contingencies as are usually insured against in the same geographic areas by business entities engaged in the same or similar business. Without limiting the generality of the foregoing, the Borrower, Berry UK and NIM Holdings will, and will cause each of their Subsidiaries to, keep adequately insured all of their property against loss or damage resulting from fire or other risks insured against by extended coverage and maintain public liability insurance against claims for personal injury, death or property damage occurring upon, 125 in or about any properties occupied or controlled by them, or arising in any manner out of the businesses carried on by them. The Borrower shall deliver to the Agent on the Closing Date (and thereafter on each date there is a material change in the insurance coverage) a certificate of a Responsible Officer of the Borrower containing a detailed list of the insurance then in effect and stating the names of the insurance companies, the types, the amounts and rates of the insurance, dates of the expiration thereof and the properties and risks covered thereby. 6.1.9 Taxes. Except to the extent that the validity or amount thereof is being contested in good faith and by appropriate proceedings, the Borrower, Berry UK and NIM Holdings will, and will cause each of their Subsidiaries, to pay and discharge all Taxes prior to the date when the failure to pay such Taxes will give rise to a Default or an Event of Default. The Borrower shall furnish to the Agent at such times as the Agent may require proof satisfactory to the Agent of the making of payments or deposits required by applicable Laws including, without limitation, payments or deposits with respect to amounts withheld by the Borrower, Berry UK, NIM Holdings and/or any Subsidiary Guarantor from wages and salaries of employees and amounts contributed by the Borrower, Berry UK, NIM Holdings and/or any Subsidiary Guarantor on account of federal and other income or wage taxes and amounts due under the Federal Insurance Contributions Act, as amended. 6.1.10 ERISA. The Borrower will, and will cause each of their Subsidiaries and Affiliates to, comply with the funding requirements of ERISA with respect to employee pension benefit plans for its respective employees. The Borrower will not permit, and will not allow any Subsidiary to permit, with respect to any employee benefit plan or plans covered by Title IV of ERISA (a) any prohibited transaction or transactions under ERISA or the Internal Revenue Code, which results, or would result, in any material liability of the Borrower and/or any of its Subsidiaries and Affiliates, or (b) any Reportable Event if, upon termination of the plan or plans with respect to which one or more such Reportable Events shall have occurred, there is or would be any material liability of the Borrower and/or any of the Subsidiaries and Affiliates to the PBGC. Upon the Agent's request, the Borrower will deliver to the Agent a copy of the most recent actuarial report, financial statements and annual report completed with respect to any "defined benefit plan", as defined in ERISA. 6.1.11 Notification of Events of Default and Adverse Developments. The Borrower, Berry UK and NIM Holdings shall promptly notify the Agent and the Lenders upon obtaining knowledge of the occurrence of: (a) any Event of Default; (b) any Default; (c) any litigation instituted or threatened against the Borrower, Berry UK, NIM Holdings or any of their Subsidiaries and of the entry of any judgment or Lien (other than any Permitted Liens) against any of the assets or properties of the Borrower, Berry 126 UK, NIM Holdings or any Subsidiary where the claims against the Borrower, Berry UK, NIM Holdings or any Subsidiary exceed One Million Dollars ($1,000,000) and are not covered by insurance; (d) the receipt by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor of any notice, claim or demand from any Governmental Authority which alleges that the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor is in material violation of any of the terms of, or has failed to comply with any applicable material Laws regulating its operation and business, including, but not limited to, the Occupational Safety and Health Act and the Environmental Protection Act, the noncompliance with which would have a materially adverse effect on the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, taken as a whole; (e) any other development in the business or affairs of the Borrower, Berry UK, NIM Holdings or any of their Subsidiaries which is materially adverse to the Borrower and its Subsidiaries taken as a whole; and in each case describing in detail satisfactory to the Agent the nature thereof and the action the Borrower or any Subsidiary, as the case may be, proposes to take, if any, with respect thereto. 6.1.12 Hazardous Materials; Contamination. The Borrower, Berry UK and NIM Holdings each agrees to: (a) give notice to the Agent immediately upon acquiring knowledge of the presence of any Hazardous Materials or any Hazardous Materials Contamination on any property owned, operated or controlled by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor or for which the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor is, or is claimed to be, responsible (provided that such notice shall not be required for Hazardous Materials placed or stored on such property in accordance with applicable Laws in the ordinary course (including, without limitation, quantity) of the line of business permitted by this Agreement or as described in any Phase I environmental assessments expressly referenced herein or in any schedule attached hereto), with a full description thereof; (b) promptly comply with any Laws, the noncompliance with which would have a materially adverse effect on the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, taken as a whole or on the value of any material portion of the Collateral or the ability of the Agent to realize upon the value of any such Collateral requiring the removal, treatment or disposal of Hazardous Materials or Hazardous Materials Contamination and provide the Agent with reasonably satisfactory evidence of such compliance; (c) as part of the Obligations, defend, indemnify and hold harmless the Agent, each of the Lenders and each of their respective agents, employees, trustees, successors and assigns from any and all claims which may now or in the future (whether before or after the termination of this Agreement) be asserted as a result of the presence of any Hazardous Materials or any Hazardous Materials Contamination on any property owned, operated or controlled by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor for which the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor is, or is claimed 127 to be, responsible which claims relate to the financing and/or Liens contemplated by this Agreement, but which claims do not arise out of the gross negligence or willful misconduct of the Agent or any of the Lenders. The Borrower, Berry UK and NIM Holdings each acknowledges and agrees that this indemnification shall survive the termination of this Agreement and the Commitments and the payment and performance of all of the other Obligations. The Agent and the Lenders agree that the liability of Berry UK and NIM Holdings with respect to such indemnification shall be limited to claims which arise solely from property owned, operated or controlled by Berry UK and/or NIM Holdings. 6.1.13 Financial Covenants. (a) Tangible Capital Funds. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, will attain a Tangible Capital Funds of not less than the following amounts as of the following dates: Date Amount ---- ------ June 30, 2000 $80,000,000 September 30, 2000 $83,000,000 December 31, 2000 $85,000,000 March 31, 2001 $87,000,000 June 30, 2001 $92,500,000 September 30, 2001 $98,000,000 December 31, 2001 and all $100,000,000 times thereafter Notwithstanding the foregoing, if the amount of actual goodwill attributed to Poly-Seal at the time of closing and consummation of the Poly-Seal Stock Purchase Transaction exceeds $27,000,000 (the "Excess Goodwill"), the required levels of Tangible Capital Funds set forth above shall be reduced by the amount of such Excess Goodwill; alternatively, if the amount of actual goodwill attributed to Poly-Seal at the time of closing and consummation of the Poly-Seal Stock Purchase Transaction is less than $27,000,000 (the "Deficiency Goodwill"), the required levels of Tangible Capital Funds as set forth above shall be increased by the amount of such Deficiency Goodwill. (b) Funded Debt to EBITDA. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, will not at any time permit the ratio of (x) Funded Debt to (y) EBITDA, for the prior twelve (12) month period, to be greater than the following amounts as of the following dates: Date Ratio ---- ----- June 30, 2000 4.75 to 1.00 September 30, 2000 4.25 to 1.00 December 31, 2000 4.00 to 1.00 March 31, 2001 3.75 to 1.00 June 30, 2001 3.50 to 1.00 September 30, 2001 3.50 to 1.00 128 December 31, 2001 3.50 to 1.00 and thereafter In addition, Berry UK and NIM Holdings, on a consolidated basis, will not permit, tested as of the last day of each fiscal quarter commencing March 31, 2001 and calculated on a rolling four-quarter basis, the ratio of (x) its Funded Debt to (y) EBITDA, for the prior twelve (12) month period, to be greater than 3.0 to 1.0. (c) Interest Coverage Ratio. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors will maintain, on a consolidated basis and tested as of the last day of each fiscal quarter in each fiscal year, on a rolling four (4) quarter basis, an Interest Coverage Ratio of not less than the following amounts as of the following dates: Date Ratio ---- ----- June 30, 2000 2.00 to 1.00 September 30, 2000 2.00 to 1.00 December 31, 2000 2.00 to 1.00 March 31, 2001 2.25 to 1.00 June 30, 2001 2.25 to 1.00 September 30, 2001 2.25 to 1.00 December 31, 2001 2.50 to 1.00 (d) Fixed Charge Coverage Ratio. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors will maintain, on a consolidated basis and tested as of the last day of each fiscal year, a Fixed Charge Coverage Ratio of not less than the following amounts as of the following dates: Period Ratio ------ ----- December 31, 2000 1.00 to 1.00 December 31, 2001 1.00 to 1.00 In addition, Berry UK and NIM Holdings will maintain, on a consolidated basis and tested as of the last day of each fiscal quarter commencing March 31, 2001 and calculated on a rolling four-quarter basis (until such time as four quarters have been achieved, calculation shall be annualized), a Fixed Charge Coverage Ratio of not less than 1.0 to 1.0. (e) Debt Service Coverage Ratio. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors will maintain, on a consolidated basis and tested as of the last day of each fiscal quarter in each fiscal year, on a rolling four (4) quarter basis, ending on that date, a Debt Service Coverage Ratio of not less than 1.50 to 1.0. 6.1.14 Collection of Accounts. Until the occurrence of an Event of Default, the Borrower, Berry UK, NIM Holdings and its Subsidiaries shall at their own expense have the privilege for the account of, and in trust for, the Agent and the Lenders of collecting their Accounts and receiving in 129 respect thereto all Items of Payment and shall otherwise completely service all of the Accounts including (a) the billing, posting and maintaining of complete records applicable thereto, (b) the taking of such action with respect to the Accounts as each of the Borrower, Berry UK, NIM Holdings and each of the Subsidiaries may deem advisable; and (c) the granting, in the ordinary course of business, to any Account Debtor, of any lawful rebate, refund or adjustment, and may accept, in connection therewith, the return of goods, the sale or lease of which shall have given rise to an Account and may take such other actions relating to the settling of any Account Debtor's claim as may be commercially reasonable. The Agent may, at its option, at any time or from time to time after and during the continuance of an Event of Default hereunder, revoke the collection privilege given in this Agreement to the Borrower, Berry UK, NIM Holdings and the Subsidiaries by either giving notice of its assignment of, and Lien on the Collateral to the Account Debtors or giving notice of such revocation to the Borrower, Berry UK and/or NIM Holdings. The Agent shall not have any duty to, and the Borrower, Berry UK and NIM Holdings each hereby releases the Agent and the Lenders from all claims of loss or damage caused by the delay or failure to collect or enforce any of the Accounts or to preserve any rights against any other party with an interest in the Collateral, unless due to the gross negligence or willful misconduct of the Agent and/or any of the Lenders. 6.1.15 Government Accounts. The Borrower will immediately notify the Agent if any of the Accounts arise out of contracts with the United States or with any other Governmental Authority, which Accounts, individually or in the aggregate, exceed One Hundred Thousand Dollars ($100,000) and, as appropriate, execute and, cause each Subsidiary Guarantor to execute, any Financing Documents and take any steps required by the Agent in order to comply with the Federal Assignment of Claims Act or any other applicable Laws. 6.1.16 Inventory. With respect to the Inventory, the Borrower, Berry UK, NIM Holdings and the Subsidiaries will keep correct and accurate records itemizing and describing the kind, type, and quantity of Inventory, the cost therefor and the selling price thereof, all of which records shall be available to the officers, employees or agents of the Agent upon demand for inspection and copying thereof. The Borrower, Berry UK, NIM Holdings and the Subsidiaries shall be permitted to sell Inventory in the ordinary course of business until such time as the Agent notifies the Borrower, Berry UK and/or NIM Holdings to the contrary following the occurrence of an Event of Default. 6.1.17 Insurance With Respect to Equipment and Inventory. The Borrower, Berry UK and NIM Holdings will (a) maintain and cause each of their the Subsidiaries to maintain hazard insurance with fire and extended coverage and naming the Agent as an additional insured with loss payable to the Agent as its respective interest may appear on the Equipment and Inventory in an amount at least equal to the fair market value of the Equipment and Inventory (but in any event sufficient to avoid any co-insurance obligations) and with a specific endorsement to each such insurance policy pursuant to which the insurer agrees to give the Agent at least thirty (30) days written notice before any 130 alteration or cancellation of such insurance policy and that no act or default of the Borrower or any Subsidiary shall affect the right of the Agent to recover under such policy in the event of loss or damage; and (b) file, and cause each of its Subsidiaries to file, with the Agent, upon its request, a detailed list of the insurance then in effect and stating the names of the insurance companies, the amounts and rates of the insurance, dates of the expiration thereof and the properties and risks covered thereby. Notwithstanding the foregoing, Berry UK and NIM Holdings shall be required to maintain insurance in accordance with the provisions of this Section as and to the extent appropriate and customary in secured lending transactions between British lenders and borrowers. 6.1.18 Maintenance of the Collateral. Except as permitted by Section 6.2.1 (Capital Structure), the Borrower, Berry UK and NIM Holdings will maintain, and will cause each of the Subsidiary Guarantors to maintain, the Collateral in good working order, saving and excepting ordinary wear and tear. 6.1.19 Defense of Title and Further Assurances. At its expense, the Borrower, Berry UK and NIM Holdings each will defend the title to the Collateral (and any part thereof), and will immediately execute, acknowledge and deliver and, cause each Subsidiary Guarantor to execute, acknowledge and deliver, any financing statement, renewal, affidavit, deed, assignment, continuation statement, security agreement, certificate or other document which the Agent may require in order to perfect, preserve, maintain, continue, protect and/or extend the Lien or security interest granted or required to be granted to the Agent, for the benefit of the Lenders ratably and the Agent, under the terms of this Agreement and/or under any of the other Financing Documents and the first priority of that Lien, subject only to the Permitted Liens. The Borrower, Berry UK and NIM Holdings each will from time to time do, and, the Borrower will cause each of the Subsidiary Guarantors to do, whatever the Agent may reasonably require by way of obtaining, executing, delivering, and/or filing financing statements, landlords' or mortgagees' waivers, notices of assignment and other notices and amendments and renewals thereof and the Borrower, Berry UK and NIM Holdings, each will take and, the Borrower will cause each of the Subsidiary Guarantors to take, any and all steps and observe such formalities as the Agent may require, in order to create and maintain a valid Lien upon, pledge of, or paramount security interest in (subject only to Permitted Liens), the Collateral (including as and to the extent required to comply with the provisions of Section 3.7 (Subsidiary Guarantor Assets)), subject only to the Permitted Liens. The Agent understands and will require that the Borrower, Berry UK and NIM Holdings only use commercially reasonable efforts to obtain landlord's and mortgagee's waivers requested by the Agent. The Borrower shall pay to the Agent on demand all taxes, costs and expenses incurred by the Agent in connection with the preparation, execution, recording and filing of any such document or instrument. To the extent that the proceeds of any of the Accounts are expected to become subject to the control of, or in the possession of, a party other than the Borrower, Berry UK, NIM Holdings or a Subsidiary Guarantor or the Agent, the Borrower, Berry UK and/or NIM Holdings, as applicable, shall use commercially reasonable efforts to cause all such parties to execute and deliver security documents, financing statements or other documents as requested by the Agent and as may be necessary to evidence and/or perfect the security interest of the Agent, for the benefit of the Lenders ratably and the Agent in 131 those proceeds. The Borrower agrees that a copy of a fully executed security agreement and/or financing statement shall be sufficient to satisfy for all purposes the requirements of a financing statement as set forth in Article 9 of the applicable Uniform Commercial Code. The Borrower, Berry UK and NIM Holdings each hereby irrevocably appoints the Agent as its attorney-in-fact, with power of substitution, in the name of the Agent or in the name of the Borrower, Berry UK and/or NIM Holdings or otherwise, for the use and benefit of the Agent for itself and the Lenders, but at the cost and expense of the Borrower and without notice to the Borrower, Berry UK and/or NIM Holdings, to execute and deliver any and all of the instruments and other documents and take any action which the Agent may require pursuant to the foregoing provisions of this Section 6.1.19. 6.1.20 Business Names; Locations. The Borrower, Berry UK and NIM Holdings will notify and the Borrower will cause each of the Subsidiary Guarantors to notify the Agent not less than thirty (30) days prior to (a) any change in the name under which the Borrower, Berry UK, NIM Holdings or the applicable Subsidiary Guarantor conducts its business, (b) any change of the location of the chief executive office of the Borrower, Berry UK, NIM Holdings or the applicable Subsidiary Guarantor, and (c) the opening of any new place of business, and (d) any change in the location of the places where the Collateral, or any part thereof, or the books and records, or any part thereof, are kept to the extent any such change in location would in and of itself then or with the passage of time result in any Lien of the Agent and the Lenders not being perfected unless action is taken by the Agent and/or any other Person to continue, extend or effect the perfection of such Lien. 6.1.21 Subsequent Opinion of Counsel as to Recording Requirements. In the event that the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor shall transfer its principal place of business or the office where it keeps its records pertaining to the Collateral, upon the Agent's reasonable request the Borrower will provide to the Agent a subsequent opinion of counsel as to the filing, recording and other requirements with which the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors have complied to maintain the Lien and security interest in favor of the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, in the Collateral. 6.1.22 Use of Premises and Equipment. The Borrower, Berry UK and NIM Holdings each agrees that until the Obligations are fully paid and all of the Commitments and the Letters of Credit and Bond Letters of Credit have been terminated or have expired, the Agent after and during the continuance of a Default or an Event of Default, (a) may use all owned or leased lifts, hoists, trucks and other facilities or equipment for handling or removing the Collateral; and (b) shall have, and is hereby granted, a right of ingress and egress to the places where the Collateral is located, and may proceed over and through their owned or, subject to the terms of any applicable lease, leased property. 132 6.1.23 Protection of Collateral. The Borrower, Berry UK and NIM Holdings each agrees that the Agent may at any time following an Event of Default take such steps as the Agent deems reasonably necessary to protect the interest of the Agent and the Lenders in, and to preserve the Collateral, including, the hiring of such security guards or the placing of other security protection measures as the Agent deems appropriate, may employ and maintain at their premises a custodian who shall have full authority to do all acts necessary to protect the interests of the Agent and the Lenders in the Collateral. The Borrower, Berry UK and NIM Holdings each agrees to cooperate fully with the Agent's efforts to preserve the Collateral and will take such actions to preserve the Collateral as the Agent may reasonably direct. All of the Agent's reasonable expenses of preserving the Collateral, including any reasonable expenses relating to the compensation and bonding of a custodian, shall part of the Enforcement Costs. 6.1.24 Application of Net Casualty Proceeds. The Borrower, Berry UK and NIM Holdings each agrees that Net Casualty Proceeds with respect to any Assets of the Borrower, Berry UK, NIM Holdings and/or any Subsidiary Guarantor must be applied to either (a) the payment of the Obligations (provided that any Net Casualty Proceeds from any Assets of Berry UK and/or NIM Holdings shall be applied only to payment of the UK Obligations) or (b) the repair, replacement and/or restoration of the Assets affected, and without the prior written consent of the Agent for no other purpose. The Agent shall determine, in its sole discretion, the manner in which Net Casualty Proceeds are to be applied if the amount of the Net Casualty Proceeds exceeds, individually or in the aggregate, One Million Dollars ($1,000,000) or if there exists a Default or an Event of Default. Section 6.2 Negative Covenants. So long as any of the Obligations or the Commitments or Letters of Credit or Bond Letters of Credit shall be outstanding, the Borrower, Berry UK and NIM Holdings each agrees with the Agent and the Lenders that: 6.2.1 Capital Structure, Merger, Acquisition or Sale of Assets. Except as otherwise permitted by the provisions of Section 6.2.3 (Purchase of Redemption of Securities), neither the Borrower, Berry UK nor NIM Holdings will alter or amend, nor will the Borrower permit any Subsidiary Guarantor to alter or amend, its equity capital structure, authorize any additional class of equity, issue any stock or equity of any class, enter into any merger or consolidation or amalgamation, windup or dissolve themselves (or suffer any liquidation or dissolution) or acquire all or substantially all the Assets of any Person, or sell, lease or otherwise dispose of any of its Assets; provided however that, except following the occurrence and during the continuation of a Default or an Event of Default, the following shall be permitted: (a) Permitted Acquisitions; (b) Permitted Asset Dispositions; 133 (c) mergers or consolidations (i) among and between the Borrower and/or any Subsidiary Guarantor, (ii) among and between Berry UK and NIM Holdings, and (iii) among and between any Subsidiaries of the Borrower other than Subsidiary Guarantors, Berry UK and/or NIM Holdings; provided, that after closing and consummation of any such merger or consolidation involving the Borrower or any Subsidiary Guarantor (A) the Borrower is the surviving entity if the Borrower is a party to such merger or consolidation, (B) the Agent and the Lenders retain a first priority Lien on, and assignment of, one hundred percent (100%) of the capital stock of all surviving Subsidiary Guarantors, subject only to Permitted Liens, and a first priority Lien on all of the Assets of the Borrower and of each surviving Subsidiary Guarantor which had been pledged or required to be pledged under the provisions of this Agreement prior to such merger or consolidation, subject only to Permitted Liens, and (C) in any merger or consolidation involving only Subsidiary Guarantors, the surviving entity qualifies or continues to qualify as a Subsidiary Guarantor in accordance with the provisions of Section 6.2.2 (Subsidiaries); (d) investments as and to the extent permitted by the provisions of Section 6.2.5 (Investments, Loans and Other Transactions), including, without limitation, the issuance of equity (including of a new class) by any Subsidiary to the Borrower or another Subsidiary; (e) the use and disposition of Net Casualty Proceeds, but only as and to the extent permitted by the provisions of Section 6.1.24 (Application of Net Casualty Proceeds); (f) with respect to each Subsidiary Guarantor which is incorporated in a jurisdiction other than the State of Delaware, the formation of a corporation under the laws of the State of Delaware (each referred to herein as "Delaware NewCo") and the merger of such Subsidiary Guarantor into such Delaware NewCo; provided that (i) the Delaware NewCo, as the surviving corporation (1) shall be a Wholly-Owned Subsidiary of the Borrower, (2) shall have the same name as its predecessor Subsidiary Guarantor, (3)shall be the successor to such Subsidiary Guarantor in all respects, (4) shall have assumed all liabilities and obligations of its predecessor Subsidiary Guarantor, including, without limitation, the Obligations, (5) shall, at the time of merger, have no assets or liabilities other than those of its predecessor Subsidiary Guarantor, (6) shall be considered a Subsidiary Guarantor, and (7) shall execute and deliver to the Agent any and all agreements, documents and instruments as may be reasonably requested by the Agent confirming its obligations and liabilities to the Agent and the Lenders, (ii) the formation of Delaware NewCo and the merger of a Subsidiary Guarantor into Delaware NewCo shall not have any material adverse effect on the Agent or the Lenders or the obligations and liabilities of the Subsidiary Guarantor, as reasonably determined by the Agent, and (iii) the Borrower shall furnish or cause to be furnished to the Agent such due diligence items with respect to the Delaware NewCo and its merger with a Subsidiary Guarantor as may be reasonably requested by the Agent. 6.2.2 Subsidiaries. Neither the Borrower, Berry UK nor NIM Holdings will create or acquire, or permit any Subsidiary to create or acquire, any Subsidiaries other than (a) the Subsidiaries 134 identified on the Collateral Disclosure List, as updated through the date of this Agreement and (b) the creation or acquisition of Subsidiary Guarantors, including, without limitation, each Delaware NewCo; provided that no assets or properties may be transferred to any Subsidiary unless such Subsidiary constitutes a Subsidiary Guarantor. In order to qualify, after the Closing Date, as a Subsidiary Guarantor under the provisions of this Agreement, a Subsidiary must (i) be an acquisition permitted by the provisions of this Agreement or be created solely to consummate an acquisition permitted by the provisions of this Agreement, (ii) execute and deliver to the Agent a guaranty agreement substantially in the form of the Guaranty, (iii) grant to the Agent and the Lenders a first priority Lien on all Assets and property of such Subsidiary, subject only to Permitted Liens, all in accordance with the terms of one or more Financing Documents as and to the extent reasonably required by the Agent, and (iv) be a domestic Subsidiary (organized and existing under the laws of a state in the United States) or, if acceptable to the Agent in its sole and absolute discretion, a foreign Subsidiary. The Borrower understands and agrees that the Agent may condition its consent to the formation of a foreign Subsidiary on such terms, conditions, and restrictions as the Agent may determine in its discretion. 6.2.3 Purchase or Redemption of Securities, Dividend Restrictions. The Borrower will not (a) purchase, redeem or otherwise acquire, or permit any Subsidiary to purchase, redeem or otherwise acquire, any shares of the Borrower's capital stock or warrants now or hereafter outstanding, (b) declare or pay any Distributions (other than stock dividends) or set aside any funds therefor, or (c) apply any of its property or Assets to the purchase, redemption or other retirement of, set apart any sum for the payment of any Distributions on, or for the purchase, redemption, or other retirement of, make any Distributions by reduction of capital or otherwise in respect of, any shares of any class of capital stock or warrants of the Borrower, except for (i) Distributions by the Borrower to the Parent pursuant to a certain Tax Sharing Agreement dated as of April 21, 1994 by and between the Borrower and the Parent, as amended through the Closing Date, and as the same may be further amended from time to time in a manner that is not materially adverse to the Borrower, (ii) Distributions by the Borrower to the Parent to enable the Parent to pay its operating and administrative expenses, including, without limitation, directors fees, legal and audit expenses, Securities and Exchange Commission compliance expenses and corporate franchise and other Taxes, not to exceed in any fiscal year Five Hundred Thousand Dollars ($500,000), (iii) Distributions by the Borrower to the Parent to pay management fees not to exceed Seven Hundred Fifty Thousand Dollars ($750,000) in any fiscal year of the Borrower, (iv) Distributions by the Borrower to the Parent to enable the Parent to repurchase any capital stock owned by any Person employed by the Parent and/or the Borrower if such Person is no longer so employed, provided, that the aggregate amount of Distributions for this purpose shall not exceed One Million Dollars ($1,000,000) per annum, and (v) Distributions to the Borrower or to any Subsidiary Guarantor from its Subsidiaries. 6.2.4 Indebtedness. Neither the Borrower, Berry UK nor NIM Holdings will create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any Indebtedness for Borrowed Money, except: (a) the Obligations; 135 (b) current accounts payable arising in the ordinary course; (c) Indebtedness secured by Permitted Liens; (d) Subordinated Indebtedness; provided that the principal amount of all such Subordinated Indebtedness shall not at any time exceed, in the aggregate, Two Hundred Million Dollars ($200,000,000), and provided further that no portion of the Subordinated Indebtedness previously advanced and then repaid may be reborrowed without the prior written consent of the Agent; (e) Indebtedness of the Borrower, Berry UK, NIM Holdings and/or any Subsidiary existing on the date hereof and reflected on the financial statements furnished pursuant to Section 4.1.11 (Financial Condition); (f) Unsecured letters of credit, bankers' acceptances and/or (i) secured Interest Rate/Currency Protection Agreements between the Borrower, Berry UK, NIM Holdings or a Subsidiary Guarantor and Bank of America and/or (ii) unsecured Interest Rate Protection/Currency Agreements between the Borrower, Berry UK, NIM Holdings or a Subsidiary Guarantor and any other financial institution, providing for the transfer or mitigation of foreign exchange risks or interest rate risks either generally or under specific contingencies; (g) Indebtedness for Borrowed Money incurred by the Borrower, NIM Holdings, Berry UK or any Subsidiary Guarantor incurred after the Closing Date; provided, that (i) such Indebtedness for Borrowed Money is incurred on account of purchase money or finance lease arrangements of Assets (other than real property) acquired by the Borrower, NIM Holdings, Berry UK or a Subsidiary Guarantor after the Closing Date, (ii) each such purchase money or finance lease arrangement does not exceed the cost of the Assets acquired or leased, (iii) any Lien securing such purchase money or finance lease arrangement does not extend to any Assets or property other than that purchased or leased and other property similarly financed from the same financing source, and (iv) the aggregate amount of Indebtedness for Borrowed Money under and in connection with all such purchase money and/or finance lease arrangements shall not exceed, in the aggregate, the sum of One Million Dollars ($1,000,000); (h) Capital Leases; (i) Indebtedness for Borrowed Money of the Borrower to any Subsidiary Guarantor or of any Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor and Indebtedness for Borrowed Money of the Borrower to Berry UK and/or NIM Holdings (the "UK Intercompany Indebtedness"), provided that the aggregate amount of such UK Intercompany Indebtedness (excluding intercompany allocations of expenses and charges), together with any investment by the Borrower in Berry UK and/or NIM Holdings permitted by the terms of this Agreement, shall not exceed, in the aggregate, Four Million Dollars ($4,000,000); (j) Indebtedness for Borrowed Money as set forth on Schedule 4.1.14; 136 (k) Other unsecured Indebtedness for Borrowed Money in aggregate principal amount not to exceed at any time One Million Dollars ($1,000,000); (l) Indebtedness permitted under the provisions of Section 6.2.5 (Investments, Loans and Other Transactions), and (m) any refinancing, replacement, repurchase, defeasance, redemption or refunding of any existing Indebtedness for Borrowed Money permitted by the provisions of this Agreement or any Indebtedness for Borrowed Money permitted by the clause (n) below; provided, that (i) the principal amount of any Indebtedness for Borrowed Money used to refinance, replace, repurchase, defease, redeem or refund such existing Indebtedness for Borrowed Money (each a "Refinancing Indebtedness") does not exceed the then outstanding principal balance of the Indebtedness for Borrowed Money so refinanced, replaced, repurchased, defeased, redeemed or refunded, (ii) the Weighted Average Life to Maturity of any Refinancing Indebtedness is equal to or greater than the Weighted Average Life to Maturity of the Indebtedness for Borrowed Money being so refinanced, replaced, repurchased, defeased, redeemed or refunded by the Refinancing Indebtedness, (iii) the terms of the Refinancing Indebtedness are not materially more restrictive or limiting on the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor, as the case may be, than the terms of the Indebtedness for Borrowed Money being refinanced, replaced, repurchased, defeased, redeemed or refunded, as determined by the Agent in its reasonable discretion, and (iv) if and to the extent the Refinancing Indebtedness is intended to refinance, replace, repurchase, defeasance, redemption or refund Subordinated Indebtedness, then the Refinancing Indebtedness is subordinated in right of payment to the Obligations on terms at least as favorable to the Agent and the Lenders as those then governing the Subordinated Indebtedness to be refinanced, replaced, repurchased, defeased, redeemed or refunded. As used herein, the term "Weighted Average Life to Maturity" when applied to any Indebtedness for Borrowed Money (including any Refinancing Indebtedness) means at any date, the number of years obtained by dividing (A) the sum of the products obtained by multiplying (1) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (2) the number of years (calculated to the nearest one-twelfth) that will elapse between each such date and the making of each such payment, by (B) the then outstanding principal amount of such Indebtedness for Borrowed Money. (n) Indebtedness for Borrowed Money in favor of GE Capital or any assignee of GE Capital or subsequent assignee lenders in a principal amount up to, but not exceeding $25,000,000; provided that (i) such Indebtedness for Borrowed Money is made available to the Borrower substantially in accordance with the terms and conditions set forth in the term sheet attached hereto as Exhibit "E" and made a part hereof and (ii) GE Capital enters into a lien subordination and intercreditor agreement with the Agent in form and content, including, without limitation, provisions relating to remedies and voting rights, reasonably acceptable to the Agent and GE Capital. The Agent and the Lenders hereby consent and agree to the proposed terms and conditions set forth in the term sheet attached hereto as Exhibit "E" with respect to the proposed Indebtedness for Borrowed Money in favor of GE Capital; provided, however, that such consent is conditional on there being, prior to the closing of the proposed Indebtedness for Borrowed Money in favor of GE Capital, no material adverse change in the financial or other condition of the Borrower. 137 Notwithstanding the foregoing, neither the Borrower, Berry UK, NIM Holdings nor any Subsidiary Guarantor shall be permitted to create, incur, assume or suffer to exist any additional Indebtedness for Borrower Money at any time after the occurrence of a Default or an Event of Default or if and to the extent any such additional Indebtedness for Borrowed Money would give rise to a Default or an Event of Default. 6.2.5 Investments, Loans and Other Transactions. Except as otherwise provided in this Agreement, the Borrower, Berry UK, and NIM Holdings will not, and will not permit any of its or their Subsidiaries to, (a) make, assume, acquire or continue to hold any investment in any real property (unless used in connection with their business) or any Person, whether by stock purchase, capital contribution, acquisition of Indebtedness of such Person or otherwise (including, without limitation, investments in any joint venture or partnership), except for (i) Permitted Acquisitions, (ii) replacements of Assets which are the subject of a Permitted Asset Disposition made pursuant to clause (f) of the definition of Permitted Asset Disposition, (iii) those investments existing as of the Closing Date and reflected on the financial statements furnished pursuant to Section 4.1.11 (Financial Condition), (iv) any investments in Cash Equivalents, which, if requested by the Agent, are pledged to the Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, as collateral and security for the Obligations (v) those investments more particularly set forth in Schedule 6.2.5 attached hereto and made a part hereof (the "Permitted Investments"), (vi) the Borrower's acquisition, creation or ownership of any Subsidiary Guarantor, including, the Borrower's existing or additional capital contributions (including purchases of equity securities) in any such Subsidiary Guarantor, (vii) the Borrower's acquisition, creation and ownership of NIM Holdings and any existing or additional capital contributions in Berry UK or NIM Holdings; provided that the aggregate amount of any such existing or additional capital contributions, together with any UK Intercompany Indebtedness (excluding intercompany allocations of expenses and charges) permitted by the terms of this Agreement, may not exceed at any time in the aggregate Four Million Dollars ($4,000,000), (viii) the receipt of Indebtedness for Borrowed Money by the Borrower or any Subsidiary Guarantor which represents payment to the Borrower or a Subsidiary Guarantor, as the case may be, of a portion of the purchase price payable to the Borrower in connection with a Permitted Asset Disposition; provided that, upon the Agent's demand, the Borrower and/or the Subsidiary Guarantor, as the case may, shall take all such actions as shall be reasonably requested by the Agent to grant to the Agent for its benefit and the ratable benefit of the Lenders a perfected Lien on any such Indebtedness for Borrowed Money and provided further that the principal amount of all such Indebtedness for Borrowed Money shall not exceed at any time in the aggregate Five Hundred Thousand Dollars ($500,000), (ix) investments permitted by Section 6.2.1 (Capital Structure), and (x) the receipt of securities in connection with the settlement of claims against any customer, supplier or vendor or as a result of the bankruptcy of any such customer, supplier or vendor; provided that the Agent shall be granted a perfected, first priority Lien on any such securities, (b) guaranty or otherwise become contingently liable for the Indebtedness or obligations of any Person, except that the Borrower and any Subsidiary Guarantor shall be permitted to guaranty (i) any Indebtedness for Borrowed Money of the Borrower, any Subsidiary Guarantor, Berry UK or NIM Holdings otherwise permitted by the provisions of Section 6.2.4 (Indebtedness), (ii) the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (iii) the obligations of the Borrower under the 138 Subordinated Debt and the Senior Secured Debt, and (iv) the Obligations, or (c) make any loans or advances, or otherwise extend credit to any Person, except (i) any advance to an officer or employee of the Borrower or any Subsidiary for travel or other business expenses in the ordinary course of business, provided that the aggregate amount of all such advances by all of the Borrower and its Subsidiaries (taken as a whole) outstanding at any time shall not exceed Five Hundred Thousand Dollars ($500,000), (ii) trade credit extended to customers in the ordinary course of business, (iii) ordinary course advances to customers in connection with the production of molds and related materials, and (iv) ordinary course working capital advances and loans to and from the Borrower to any Guarantor and to and from any Guarantor to the Borrower or any other Guarantor. In addition to the foregoing, NIM Holdings covenants and agrees that it shall own no other Assets or investments other than the capital stock of Berry UK. 6.2.6 Capital Expenditures. Except for Permitted Acquisitions, permitted reinvestments of Permitted Asset Dispositions and Capital Expenditures made for the acquisition or construction of Fixed or Capital Assets that are contemplated to be sold in connection with a sale-leaseback transaction referred to in clause (A) of the last sentence of Section 6.2.16, neither the Borrower, Berry UK nor NIM Holdings will or will permit any Subsidiary to, directly or indirectly, make any Capital Expenditures in the aggregate for the Borrower, Berry UK, NIM Holdings and their respective Subsidiaries (taken as a whole) in amount which exceed Thirty-six Million Dollars ($36,000,000) (the "Capital Expenditure Ceiling") during any fiscal year. If in any given fiscal year, the total Capital Expenditures of the Borrower, Berry UK, NIM Holdings and its or their Subsidiaries, taken as a whole, are less than the applicable Capital Expenditure Ceiling for that fiscal year, the unused portion of the amount permitted for Capital Expenditures (the "Carry Forward Amount') may be used to increase the applicable Capital Expenditure Ceiling for the then next succeeding fiscal year. The Carry Forward Amount for any given fiscal year cannot be carried forward for more than one (1) fiscal year. 6.2.7 Stock of Subsidiaries. Neither the Borrower, Berry UK nor NIM Holdings will sell or otherwise dispose of any shares of capital stock of any Subsidiary (except as necessary or incident to any transaction permitted by Section 6.2.1 (Capital Structure) or Section 6.2.6 (Capital Expenditures)) or permit any Subsidiary to issue any additional shares of its capital stock except pro rata to its stockholders. 6.2.8 Subordinated Indebtedness. Neither the Borrower, Berry UK nor NIM Holdings will, or will permit any Subsidiary to make: (a) (i) any payment on account of the Subordinated Debt in violation of the subordination provisions or agreements relating to such Subordinated Debt, or (ii) any payment on account of any other Subordinated Indebtedness in violation of the subordination provisions relating to such Subordinated Indebtedness; 139 (b) any amendment or modification of to the documents evidencing or securing the Subordinated Indebtedness; and (c) any payment of principal or interest on the Subordinated Indebtedness other than when due, except that Subordinated Indebtedness may be prepaid, redeemed, repurchased, refinanced, replaced, refunded or defeased from the proceeds of any offering of Securities or Indebtedness by the Parent or the Borrower; provided that at the time of such prepayment there does not exist a Default or an Event of Default and provided that such offering of Securities or Indebtedness is otherwise permitted by the provisions of this Agreement. 6.2.9 Liens. The Borrower, Berry UK and NIM Holdings each agrees that it (a) will not create, incur, assume or suffer to exist any Lien upon any of its properties or Assets, whether now owned or hereafter acquired, or permit any Subsidiary so to do, except for (i) Liens securing the Obligations and (ii) Permitted Liens, (b) will not allow or suffer to exist any Permitted Liens to be superior to Liens securing the Obligations, or permit any Subsidiary so to do, except for (i) statutory landlord's Liens with respect to which the Agent has not obtained a landlord's waiver and subordination, (ii) existing Liens securing Indebtedness for Borrowed Money under and in connection with the Bonds, and (iii) Liens which have priority as a matter of law and which do not otherwise constitute or give rise to a Default or an Event of Default and for which the Agent has established a reserve against the Borrowing Base (or the UK Borrowing Base, as appropriate) in an amount to be determined by the Agent in its reasonable discretion, (c) except as otherwise permitted by the provisions of this Agreement, will not enter into any contracts for the consignment of goods, will not execute or suffer the filing of any financing statements or the posting of any signs giving notice of consignments, and will not, as a material part of its business, engage in the sale of goods belonging to others, or permit any Subsidiary so to do, and (d) will not allow or suffer to exist the failure of any Lien described in the Security Documents to attach to, and/or remain at all times perfected on, any of the property described in the Security Documents, except with respect to any Assets disposed of as part of a Permitted Asset Disposition. 6.2.10 Transactions with Affiliates. Neither the Borrower, Berry UK, NIM Holdings nor any of its or their Subsidiaries will enter into any transaction with any Affiliate except in the ordinary course of business, in each case, upon terms no less favorable to the Borrower, Berry UK, NIM Holdings or any Subsidiary than would be obtained in an arms-length, third party transaction. The foregoing provision shall not restrict (a) any employment agreement entered into by the Borrower or any of its Subsidiaries in the ordinary course of business and consistent with the past practices of the Borrower and/or any such Subsidiary, (b) transactions between or among the Borrower and/or the Subsidiary Guarantors, (c) transactions between First Atlantic Capital, Ltd. ("First Atlantic"), pursuant to the Second Amended and Restated Management Agreement dated as of June 18, 1996, as amended to the date hereof or otherwise amended with the Agent's prior written consent (solely for purposes of this Section 6.2.10) between the Borrower and First Atlantic, (d) the payment of Distributions permitted by Section 6.2.3 (Purchase or Redemption of 140 Securities), (e) any transaction fee payable to First Atlantic not to exceed $1,250,000 per transaction and (f) intercompany investments and loans between and among the Borrower, Berry UK and NIM Holdings as and to the extent permitted by the provisions of this Agreement. 6.2.11 ERISA Compliance. Neither the Borrower nor any Commonly Controlled Entity shall: (a) engage in or permit any "prohibited transaction" (as defined in ERISA); (b) cause any "accumulated funding deficiency" as defined in ERISA and/or the Internal Revenue Code; (c) terminate any pension plan in a manner which could result in the imposition of a lien on the property of the Borrower pursuant to ERISA; (d) terminate or consent to the termination of any Multi-employer Plan; or (e) incur a complete or partial withdrawal with respect to any Multi-employer Plan. 6.2.12 Prohibition on Hazardous Materials. Neither the Borrower, Berry UK nor NIM Holdings shall place, manufacture or store or permit to be placed, manufactured or stored any Hazardous Materials on any property owned, operated or controlled by the Borrower, Berry UK or NIM Holdings or for which the Borrower, Berry UK or NIM Holdings is responsible other than Hazardous Materials placed or stored on such property in accordance with applicable Laws in the ordinary course of the Borrower's, Berry UK's, NIM Holdings's or any tenant's business expressly described in this Agreement, or permit any Subsidiary to do so. 6.2.13 Amendments. The Borrower will not amend or agree to amend any of the Subordinated Debt Loan Documents or any of the Senior Secured Debt Loan Documents, other than in the normal course of business. 6.2.14 Method of Accounting; Fiscal Year. The Borrower, Berry UK and NIM Holdings each agrees that: (a) it shall not change, or permit any Subsidiary to change, the method of accounting employed in the preparation of any financial statements furnished to the Agent under the provisions of Section 6.1.1 (Financial Statements), unless required to conform to GAAP and on the condition that the Borrower's accountants shall furnish such information as the Agent may request to reconcile the changes with the Borrower's prior financial statements; and (b) it will not change or permit any Subsidiary to change, its fiscal year from a year ending on or about December 31. 6.2.15 Transfer of Collateral. Neither the Borrower, Berry UK, NIM Holdings nor any of its or their Subsidiaries will transfer, or permit the transfer, to another location of any of the Collateral or the books and records related to any of the Collateral, except (a) for transfers among the 141 Borrower and the Subsidiary Guarantors, if and to the extent the first priority Lien (subject to Permitted Liens) of the Agent and the Lenders would be unaffected by any such transfers, (b) for transfers of UK Collateral by Berry UK and/or NIM Holdings to the Borrower, if and to the extent a first priority perfected Lien (subject to Permitted Liens) would attach to such UK Collateral so transferred contemporaneously with such transfer, (c) transfers of Inventory in the ordinary course of business to bailees, warehousemen, consignees or similar third parties if and to the extent that either (i) such bailees, warehousemen, consignees or similar third parties have entered into an agreement with the Agent in which such bailees, warehousemen, consignees or similar third parties consent and agree to the superior Lien of the Agent and the Lenders on such Inventory and to such other terms and conditions as may be reasonably required by the Agent or (ii) the Agent has established reserves against the Borrowing Base (or the UK Borrowing Base, as appropriate) with respect to any such Inventory so transferred in accordance with the provisions set forth in the definition of Eligible Domestic Inventory (or Eligible UK Inventory, as appropriate), which reserves the Agent shall establish upon the Borrower's request, (d) temporary transfers of Equipment offsite for repairs; provided that such Equipment is promptly upon repair returned to a location in which the Agent has perfected its first priority Lien (subject only to Permitted Liens), and (e) usual and customary transfers of mobile Equipment (such as laptop computers) by employees of the Borrower and/or a Subsidiary Guarantor in the ordinary course of their employment. 6.2.16 Sale and Leaseback. Neither the Borrower, Berry UK, NIM Holdings nor any of the Subsidiaries will directly or indirectly enter into any arrangement to sell or transfer all or any substantial part of its fixed assets and thereupon or within one year thereafter rent or lease the assets so sold or transferred, except as contemplated by clause (k) of the definition of Permitted Asset Disposition. Notwithstanding the foregoing, the Borrower and its Subsidiaries shall be permitted to enter into one or more such sale-leaseback transactions involving Fixed or Capital Assets, including, without limitation the property described in clause (k) of the definition of Permitted Asset Dispositions; provided that in each case, either (A) in the case of the real property, improvements and fixtures subject to the lien of the Deed of Trust - Evansville as more particularly described on Schedule 1.1B - Evansville Sale Leaseback attached hereto and made a part hereof (i) such transaction is consummated prior to the date 120 days following the date the Borrower or the applicable Subsidiary has acquired and/or completed construction of all the assets to which such transaction relates, (ii) the aggregate cost of the assets (other than the property described in such clause (k)) sold in all transactions covered by this clause (A) does not exceed $7,000,000, and (iii) such transaction shall be reasonably satisfactory to the Agent or (B) such transaction complies with the provisions of clause (g) of the definition of Permitted Asset Disposition. ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES Section 7.1 Events of Default. The occurrence of any one or more of the following events shall constitute an "Event of Default" under the provisions of this Agreement: 142 7.1.1 Failure to Pay. The failure of the Borrower, Berry UK and/or NIM Holdings to pay any of the Obligations to be paid by them under the terms of this Agreement within three (3) days of the date as and when due and payable in accordance with the provisions of this Agreement, the Notes and/or any of the other Financing Documents; 7.1.2 Breach of Representations and Warranties. Any representation or warranty made by or on behalf of the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor in this Agreement, in any of the other Financing Documents, or in any report, statement, schedule, certificate, opinion, financial statement or other document furnished in connection with this Agreement, any of the other Financing Documents, or the Obligations, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect. 7.1.3 Failure to Comply with Certain Covenants. The failure of the Borrower, Berry UK or NIM Holdings to perform, observe or comply, or the Borrower to cause any Subsidiary Guarantor to perform, observe or comply, as appropriate, with any covenant, condition or agreement contained in Section 6.1.1 (Financial Statements), Section 6.1.3(a) (Bookkeeping, Rights of Inspection, Field Examination, Etc.) with respect to inspection rights only, Section 6.1.8 (Insurance), Section 6.1.13 (Financial Covenants), Section 6.1.17 (Insurance with Respect to Equipment), Section 6.1.19 (Defense of Title and Further Assurances), Section 6.1.20 (Business Names; Locations), or Section 6.2 (Negative Covenants). 7.1.4 Failure to Comply with Other Covenants. The failure of the Borrower, Berry UK or NIM Holdings to perform, observe or comply, or the Borrower to cause any Subsidiary Guarantor to perform, observe or comply, as appropriate, with any covenant, condition or agreement contained in this Agreement other than those set forth in Section 7.1.1 (Failure to Pay), Section 7.1.2 (Breach of Representations and Warranties) or Section 7.1.3 (Failure to Comply with Certain Covenants), which failure shall remain unremedied for a period of thirty (30) days after written notice thereof to the Borrower, Berry UK and/or NIM Holdings, as appropriate, by the Agent. 7.1.5 Default Under Other Financing Documents or Obligations. The failure of the Borrower, Berry UK, NIM Holdings and/or any other Person (other than the Agent or any of the Lenders) which is a party to any of the Financing Documents, to perform, observe or comply with any covenant, condition or agreement contained in any such Financing Documents which is not otherwise covered by any other Section of this ARTICLE VII, which failure shall remain unremedied for a period of thirty (30) days after written notice thereof to the Borrower, Berry UK and/or NIM Holdings, as appropriate, by the Agent or the occurrence of an Event of Default under any of the other Financing Documents as defined therein. 143 7.1.6 Receiver; Bankruptcy. The Borrower, Berry UK, NIM Holdings or any Guarantor shall (a) apply for or consent to the appointment of a receiver, trustee or liquidator of itself or any of its property, (b) admit in writing its inability to pay its debts as they mature, (c) make a general assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent under any applicable Laws, (e) file a voluntary petition in bankruptcy or a petition or an answer seeking or consenting to reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or take corporate action for the purposes of effecting any of the foregoing under any applicable Laws, or (f) by any act indicate its consent to, approval of or acquiescence in any such proceeding or the appointment of any receiver of or trustee for any of its property, or suffer any such receivership, trusteeship or proceeding to continue undischarged for a period of sixty (60) days, or (g) by any act indicate its consent to, approval of or acquiescence in any order, judgment or decree by any court of competent jurisdiction or any Governmental Authority enjoining or otherwise prohibiting the operation of all or substantially all of the Borrower's or any Guarantor's business or the use or disposition of all or substantially all of its or their respective assets. 7.1.7 Involuntary Bankruptcy, etc. (a) An order for relief shall be entered in any involuntary case brought against the Borrower, Berry UK, NIM Holdings or any Guarantor under the Bankruptcy Code or comparable Law, or (b) any such case shall be commenced against the Borrower, Berry UK, NIM Holdings or any Guarantor and shall not be dismissed within sixty (60) days after the filing of the petition, or (c) an order, judgment or decree under any other Law is entered by any court of competent jurisdiction or by any other Governmental Authority on the application of a Governmental Authority or of a Person other than the Borrower, Berry UK, NIM Holdings or any Guarantor (i) adjudicating the Borrower, Berry UK, NIM Holdings or any Guarantor bankrupt or insolvent, or (ii) appointing a receiver, trustee or liquidator of the Borrower, Berry UK, NIM Holdings or of any Guarantor, or of a material portion of its or their assets, or (iii) enjoining, prohibiting or otherwise limiting the operation of all or substantially all of its or their business or the use or disposition of all or substantially all of its or their assets, and such order, judgment or decree continues unstayed and in effect for a period of thirty (30) days from the date entered. 7.1.8 Judgment. Unless adequately insured in the reasonable opinion of the Agent, the entry of a final judgment for the payment of money involving more than $1,000,000 (individually and in the aggregate) against the Borrower, Berry UK, NIM Holdings and/or any or all of the Guarantors, and the failure by the Borrower, Berry UK, NIM Holdings or such Guarantor to discharge the same, or cause it to be discharged, within sixty (60) days from the date of the order, decree or process under which or pursuant to which such judgment was entered, or to secure a stay of execution pending appeal of such judgment. 144 7.1.9 Execution; Attachment. Any execution or attachment shall be levied against the Collateral, or any part thereof, and such execution or attachment shall not be set aside, discharged or stayed within sixty (60) days after the same shall have been levied. 7.1.10 Default Under Other Borrowings. An event of default shall be made with respect to any Indebtedness for Borrowed Money in a principal amount in excess of Two Million Dollars ($2,000,000), either individually or in the aggregate, of the Borrower, Berry UK, NIM Holdings and/or any or all of the Guarantors, other than the Loans, if such Indebtedness for Borrowed Money was not paid when due, after giving effect to any applicable notice and cure period, or if the effect of such event of default is to accelerate the maturity of such Indebtedness for Borrowed Money or to permit the holder or obligee thereof or other party thereto to cause such Indebtedness for Borrowed Money to become due prior to its stated maturity. 7.1.11 Challenge to Agreements. The Borrower, Berry UK, NIM Holdings or any Guarantor shall challenge the validity and binding effect of any provision of any of the Financing Documents or any of the Financing Documents shall for any reason (except to the extent permitted by its express terms) cease to be effective or to create a valid and perfected first priority Lien (except for Permitted Liens, certain of which Permitted Liens, to the extent expressly permitted by the provisions of this Agreement, may constitute superior and prior Liens) on, or security interest in, any of the Collateral purported to be covered thereby, unless due to the gross negligence or willful misconduct of the Agent. 7.1.12 Material Adverse Change. The Requisite Lenders, in their sole discretion, determine in good faith that a material adverse change has occurred in the financial condition of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, taken as a whole. 7.1.13 Change in Ownership. (a) The Borrower shall cease to own and control, beneficially and of record, directly or indirectly, at least one hundred percent (100%) of the issued and outstanding capital stock of NIM Holdings and each Subsidiary Guarantor (except pursuant to any transaction permitted by Section 6.2.1 (Capital Structure) or Section 6.2.2 (Subsidiaries)), (b) NIM Holdings shall cease to own and control, beneficially and of record, directly or indirectly, at least one hundred percent (100%) of the issued and outstanding capital stock of Berry UK, (c) the Parent shall cease to own and control, beneficially and of record, directly or indirectly, at least one hundred percent (100%) of the issued and outstanding capital stock of the Borrower, or (c) Atlantic Equity Partners International II, L. P. ("AEP"), Chase Capital Partners, and their respective Affiliates shall cease to own and control, beneficially and of record, at least fifty-one percent (51%) or more of the issued and outstanding voting capital stock of the Parent. 145 7.1.14 Liquidation, Termination, Dissolution, Change in Management, etc. The Borrower, Berry UK, NIM Holdings or any Guarantor shall liquidate, dissolve or terminate its existence, except as otherwise expressly permitted by the provisions of Section 6.2 (Negative Covenants). 7.1.15 Parent Line of Business. At any time the Parent engages in any business other than the ownership of capital stock of the Borrower or any other Wholly-Owned Subsidiary or such other business as shall be mandatory under the provisions of applicable Laws. 7.1.16 Failure to Pay Senior Secured Debt - Parent. The failure of the Parent to make any scheduled interest payment on account of the Senior Secured Debt - Parent as and when such payment is due and payable, regardless of any applicable notice, grace or cure period. Section 7.2 Remedies. Upon the occurrence of any Event of Default, the Agent and/or Bank of America, as applicable, may, in the exercise of its sole and absolute discretion from time to time, and shall, at the direction of the Requisite Lenders, at any time thereafter exercise any one or more of the following rights, powers or remedies: 7.2.1 Acceleration. The Agent may declare any or all of the Obligations to be immediately due and payable and Bank of America, acting through its Sterling LIBOR Lending Office, may declare any or all of the UK Obligations to be immediately due and payable, notwithstanding anything contained in this Agreement or in any of the other Financing Documents to the contrary, without presentment, demand, protest, notice of protest or of dishonor, or other notice of any kind, all of which the Borrower, Berry UK and NIM Holdings each hereby waives. 7.2.2 Further Advances. The Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as applicable, may from time to time without notice to the Borrower, Berry UK or NIM Holdings suspend, terminate or limit any further advances, loans or other extensions of credit under the Commitments, under this Agreement and/or under any of the other Financing Documents. Further, upon the occurrence of an Event of Default specified in Section 7.1.6 (Receiver; Bankruptcy) or Section 7.1.7 (Involuntary Bankruptcy, etc.), the Commitments and any agreement in any of the Financing Documents to provide additional credit and/or to issue Letters of Credit and/or Bond Letters of Credit shall immediately and automatically terminate and the unpaid principal amount of the Notes (with accrued interest thereon) and all other Obligations (including UK Obligations) then outstanding, shall immediately become due and payable without further action of any kind and without presentment, demand, protest or notice of 146 any kind, all of which are hereby expressly waived by the Borrower, Berry UK and NIM Holdings. 7.2.3 Uniform Commercial Code. The Agent and Bank of America, acting through its Sterling LIBOR Lending Office, each shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws. Upon demand by the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, the Borrower shall assemble the Collateral and make it available to the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, as applicable, at a place designated by the Agent or Bank of America, acting through its Sterling LIBOR Lending Office. The Agent, Bank of America, acting through its Sterling LIBOR Lending Office, or its or their agents may without notice from time to time enter upon the Borrower's premises to take possession of the Collateral, to remove it, to render it unusable, to process it or otherwise prepare it for sale, or to sell or otherwise dispose of it. Any written notice of the sale, disposition or other intended action by the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, with respect to the Collateral which is sent by regular mail, postage prepaid, to the Borrower at the address set forth in Section 9.1 (Notices), or such other address of the Borrower which may from time to time be shown on the Agent's and/or Bank of America's (acting through its Sterling LIBOR Lending Office) records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the Borrower. The Agent and Bank of America, acting through its Sterling LIBOR Lending Office, may alternatively or additionally give such notice in any other commercially reasonable manner. If any consent, approval, or authorization of any state, municipal or other Governmental Authority or of any other Person or of any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Collateral, the Borrower agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization. The Borrower recognizes that the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, may be unable to effect a public sale of all or a part of the Collateral consisting of Securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable Federal and state Laws. The Agent and Bank of America, acting through its Sterling LIBOR Lending Office, may, therefore, in its or their discretion, take such steps as it or they may deem appropriate to comply with such Laws and may, for example, at any sale of the Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof. The Borrower covenants and agrees to do or cause to be done promptly all such acts and things as the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, may request from time to time and as may be 147 necessary to offer and/or sell the Securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws. Upon any such sale or disposition, the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral consisting of securities so sold. 7.2.4 Specific Rights With Regard to Collateral. In addition to all other rights and remedies provided -hereunder or as shall exist at law or in equity from time to time, the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, may (but shall be under no obligation to), without notice to the Borrower, Berry UK and/or NIM Holdings and upon the occurrence of an Event of Default the Borrower, Berry UK and NIM Holdings each hereby irrevocably appoints each of the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, as its attorney-in-fact, with power of substitution, in the name of Bank of America, acting through its Sterling LIBOR Lending Office, the Agent and/or any or all of the Lenders and/or in the name of the Borrower, Berry UK and/or NIM Holdings or otherwise, for the use and benefit of Bank of America, acting through its Sterling LIBOR Lending Office, the Agent and the Lenders, but at the cost and expense of the Borrower, Berry UK and NIM Holdings, as and to the extent permitted by the provisions of this Agreement: (a) request any Account Debtor obligated on any of the Accounts to make payments thereon directly to the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, with the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, taking control of the cash and non-cash proceeds thereof; (b) compromise, extend or renew any of the Collateral or deal with the same as it may deem advisable, (c) make exchanges, substitutions or surrenders of all or any part of the Collateral; (d) copy, transcribe, or remove from any place of business of the Borrower, Berry UK, NIM Holdings or any Subsidiary all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Collateral or without cost or expense to the Agent or any of the Lenders, make such use of the Borrower's,. Berry UK's, NIM Holdings's or any Subsidiary's place(s) of business as may be reasonably necessary to administer, control and collect the Collateral; (e) repair, alter or supply goods if necessary to fulfill in whole or in part the purchase order of any Account Debtor; (f) demand, collect, receipt for and give renewals, extensions, discharges and releases of any of the Collateral; (g) institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Collateral; 148 (h) settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Collateral or any legal proceedings brought in respect thereof; (i) endorse or sign the name of the Borrower, Berry UK and/or NIM Holdings upon any items of payment, certificates of title, instruments, securities, stock powers, documents, documents of title, financing statements, assignments, notices or other writing relating to or part of the Collateral and on any proof of claim in bankruptcy or comparable Laws against an Account Debtor; (j) notify the Post Office authorities to change the address for the delivery of mail to the Borrower, Berry UK and/or NIM Holdings to such address or Post Office Box as the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, may designate and receive and open all mail addressed to the Borrower, Berry UK and NIM Holdings; and (k) take any other action necessary or beneficial to realize upon or dispose of the Collateral or to carry out the terms of this Agreement. 7.2.5 Application of Proceeds. Unless otherwise required by applicable Laws, any proceeds of sale or other disposition of the Collateral will be applied by the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, to the payment first of any and all Agent's Obligations, then to any and all Enforcement Costs, and any balance of such proceeds will be remitted to Bank of America, acting through its Sterling LIBOR Lending Office, and/or the Lenders, as appropriate, in like currency and funds received ratably in accordance with their respective Pro Rata Shares of such balance. Each Lender shall apply any such proceeds received from the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, to its Obligations in such order and manner as such Lender shall determine. If the sale or other disposition of the Collateral fails to fully satisfy the Obligations, the Borrower shall remain liable to the Agent and the Lenders for any deficiency. Notwithstanding the foregoing, any proceeds of sale or other disposition of the UK Collateral will be applied to the payment of the UK Obligations only in such order and manner as the Lenders shall determine in their sole and absolute discretion. If the sale or other disposition (by foreclosure, liquidation or otherwise) of the UK Collateral fails to fully satisfy the UK Obligations, the Borrower, Berry UK and NIM Holdings shall remain liable to Bank of America, acting through its Sterling LIBOR Lending Office, for any deficiency. 7.2.6 Performance by Agent. If the Borrower shall fail to pay the Obligations or Berry UK or NIM Holdings fails to pay the UK Obligations, or otherwise the Borrower, Berry UK or NIM Holdings fail to perform, observe or comply with any of the conditions, covenants, terms, stipulations or agreements contained in this Agreement or any of the other Financing Documents, the Agent without notice to or demand upon the Borrower, Berry UK or NIM Holdings and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but 149 shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Borrower, Berry UK and/or NIM Holdings, as applicable, and may enter upon the premises of the Borrower, Berry UK and/or NIM Holdings, for that purpose and take all such action thereon as the Agent may consider necessary or appropriate for such purpose and each of the Borrower, Berry UK and NIM Holdings hereby irrevocably appoints the Agent as its attorney-in-fact upon the occurrence of an Event of Default to do so, with power of substitution, in the name of the Agent, in the name of any or all of the Lenders, or in the name of the Borrower, Berry UK, NIM Holdings or otherwise, for the use and benefit of the Agent, but at the cost and expense of the Borrower and without notice to the Borrower, Berry UK and/or NIM Holdings. All sums so paid or advanced by the Agent together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the Borrower to the Agent on demand, and shall constitute and become a part of the Agent's Obligations. All powers granted to the Agent under the provisions of this Section are also deemed granted to Bank of America, acting through its Sterling LIBOR Lending Office, with respect to the UK Obligations. 7.2.7 Other Remedies. The Agent and Bank of America, acting through its Sterling LIBOR Lending Office, may from time to time proceed to protect or enforce the rights of Bank of America, acting through its Sterling LIBOR Lending Office, the Agent and/or any of the Lenders by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws. The Agent and each of the Lenders are authorized to offset and apply to all or any part of the Obligations all moneys, credits and other property of any nature whatsoever of the Borrower, Berry UK and/or NIM Holdings now or at any time hereafter in the possession of, in transit to or from, under the control or custody of, or on deposit with, the Agent, any of the Lenders or any Affiliate of the Agent or any of the Lenders, subject to the limitations on liability set forth in Section 2.10.11 (Limitations on Joint and Several Liability) ARTICLE VIII THE AGENT Section 8.1 Appointment. Each Lender hereby designates and appoints Bank of America as its agent under this Agreement and the Financing Documents, and each Lender hereby irrevocably authorizes the Agent to take such action or to refrain from taking such action on its behalf under the provisions of this Agreement and the Financing Documents and to exercise such powers as are set forth herein or therein, together with such other powers as are reasonably incidental thereto. The Agent agrees to act as such on the express conditions contained in this ARTICLE VIII. The provisions of this ARTICLE VIII are solely for the benefit of the Agent and the Lenders and neither the Borrower, Berry UK, NIM Holdings nor any Person shall have any rights as a third 150 party beneficiary of any of the provisions hereof, except for those rights expressly granted to the Borrower pursuant to Section 8.7.1 (Resignation), Section 8.8 (Collateral Matters), Section 8.12 (Consents) and Section 8.13 (Circumstances Where All Lenders Required). In performing its functions and duties under this Agreement, the Agent shall act solely as an administrative representative of the Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for the Lenders, the Borrower or any Person. The Agent may perform any of its duties hereunder, or under the Financing Documents, by or through its agents or employees. Section 8.2 Nature of Duties. 8.2.1 In General. The Agent shall have no duties, obligations or responsibilities except those expressly set forth in this Agreement or in the Financing Documents. The duties of the Agent shall be mechanical and administrative in nature. The Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender. Each Lender shall make its own independent investigation of the financial condition and affairs of the Borrower, Berry UK and NIM Holdings in connection with the extension of credit hereunder and shall make its own appraisal of the credit worthiness of the Borrower, Berry UK and NIM Holdings and the Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the Closing Date or at any time or times thereafter. If the Agent seeks the consent or approval of any of the Lenders to the taking or refraining from taking of any action hereunder, then the Agent shall send notice thereof to each Lender. The Agent shall promptly notify each Lender any time that the applicable percentage of the Lenders have instructed the Agent to act or refrain from acting pursuant hereto. 8.2.2 Express Authorization. The Agent is hereby expressly and irrevocably authorized by each of the Lenders, as agent on behalf of itself and the other Lenders: (a) To receive on behalf of each of the Lenders any payment or collection on account of the Obligations and to distribute to each Lender its Pro Rata Share of all such payments and collections so received as provided in this Agreement; (b) To receive all documents and items to be furnished to the Lenders under the Financing Documents; (c) To act or refrain from acting in this Agreement and in the other Financing Documents with respect to those matters so designated for the Agent; (d) To act as nominee for and on behalf of the Lenders in and under this Agreement and the other Financing Documents; (e) To arrange for the means whereby the funds of the Lenders are to be made available to the Borrower, Berry UK and/or NIM Holdings; 151 (f) To distribute promptly to the Lenders, if required by the terms of this Agreement, all written information, requests, notices, Loan Notices, payments, Prepayments, documents and other items received from the Borrower, Berry UK, NIM Holdings or other Person; (g) To amend, modify, or waive any provisions of this Agreement or the other Financing Documents on behalf of the Lenders subject to the requirements that all or certain of the Lenders' consent be obtained in certain instances as provided in Section 8.13 (Circumstances All Lenders Required) and Section 9.2 (Amendments; Waivers); (h) To deliver to the Borrower, Berry UK, NIM Holdings and other Persons, all requests, demands, approvals, notices, and consents received from any of the Lenders; (i) To exercise on behalf of each Lender all rights and remedies of the Lenders upon the occurrence of any Event of Default and/or Default specified in this Agreement and/or in any of the other Financing Documents or applicable Laws; (j) To execute any of the Security Documents and any other documents on behalf of the Lenders as the secured party for the benefit of the Agent and the Lenders; and (k) To take such other actions as may be requested by the Requisite Lenders. Section 8.3 Rights, Exculpation, Etc. Neither the Agent nor any of its officers, directors, employees or agents shall be liable to any Lender for any action taken or omitted by them hereunder or under any of the Financing Documents, or in connection herewith or therewith, except that the Agent shall be obligated on the terms set forth herein for performance of its express obligations hereunder, and except that the Agent shall be liable with respect to its own gross negligence or willful misconduct. The Agent shall not be liable for any apportionment or distribution of payments made by it in good faith and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due but not made, shall be to recover from other the Lenders any payment in excess of the amount to which they are determined to be entitled (and such other Lenders hereby agree to return to such Lender any such erroneous payments received by them). The Agent shall not be responsible to any Lender for any recitals, statements, representations or warranties herein or for the execution, effectiveness, genuineness, validity, enforceability, collectible, or sufficiency of this Agreement or any of the Financing Documents or the transactions contemplated thereby, or for the financial condition of any Person. The Agent shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any of the Financing Documents or the financial condition of any Person, or the existence or possible existence of any Default or Event of Default. The Agent agrees to use its reasonable efforts to notify the Lenders as to the occurrence of any material Event of Default promptly upon 152 obtaining actual knowledge thereof, provided, however, that the failure in good faith of the Agent to so notify any Lender shall not give rise to any liability on the part of the Agent nor shall it waive, discharge or otherwise adversely affect the Agent's ability to exercise and enforce any rights or remedies resulting from such Event of Default. The Agent may at any time request instructions from the Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the Financing Documents the Agent is permitted or required to take or to grant, and the Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from any action or withholding any approval under any of the Financing Documents until it shall have received such instructions from the applicable percentage of the Lenders. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Agent as a result of the Agent acting or refraining from acting under this Agreement or any of the other Financing Documents in accordance with the instructions of the applicable percentage of the Lenders and notwithstanding the instructions of the Lenders, the Agent shall have no obligation to take any action if it, in good faith believes that such action exposes the Agent to any liability. Section 8.4 Reliance. The Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message or other communication (including any writing, telex, telecopy or telegram) believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the Financing Documents and its duties hereunder or thereunder, upon advice of counsel selected by it. The Agent may deem and treat the original Lenders as the owners of the respective Notes for all purposes until receipt by the Agent of a written notice of assignment, negotiation or transfer of any interest therein by the Lenders in accordance with the terms of this Agreement. Any interest, authority or consent of any holder of any of the Notes shall be conclusive and binding on any subsequent holder, transferee, or assignee of such Notes. The Agent shall be entitled to rely upon the advice of legal counsel, independent accountants, and other experts selected by the Agent in its sole discretion. Section 8.5 Indemnification. Each Lender, severally, agrees to reimburse and indemnify the Agent for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements including, without limitation, Enforcement Costs, of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any of the Financing Documents or any action taken or omitted by the Agent under this Agreement for any of the Financing Documents, in proportion to each Lender's Pro Rata Share, all of the foregoing as they may arise, be asserted or be imposed from time to time; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements resulting from the Agent's gross negligence or willful misconduct. The obligations of the Lenders under this Section 8.5 shall survive the payment in full of the Obligations and the termination of this Agreement. 153 Section 8.6 Bank of America Individually. With respect to its Commitments and the Loans made by it, and the Notes issued to it, Bank of America shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender. The terms "the Lenders" or "Requisite Lenders" or any similar terms shall, unless the context clearly otherwise indicates, include Bank of America in its individual capacity as a Lender or one of the Requisite Lenders. Bank of America and its Affiliates may lend money to, accept deposits from and generally engage in any kind of banking, trust or other business with the Borrower, any Affiliate of the Borrower, or any other Person or any of their officers, directors and employees as if Bank of America were not acting as the Agent pursuant hereto and the Agent may accept fees and other consideration from the Borrower, any Affiliate of the Borrower or any of their officers, directors and employees (in addition to the Agency Fees or other arrangements or fees heretofore agreed to between the Borrower, Berry UK, NIM Holdings and the Agent) for services in connection with this Agreement or otherwise without having to account for or share the same with the Lenders. Section 8.7 Successor Agent. 8.7.1 Resignation. The Agent may resign from the performance of all its functions and duties hereunder at any time by giving at least thirty (30) Business Days' prior written notice to the Borrower and the Lenders. Such resignation shall take effect upon the acceptance by a successor Agent of appointment pursuant to Section 8.7.2 (Appointment of Successor) or as otherwise provided below. 8.7.2 Appointment of Successor. Upon any such notice of resignation pursuant to Section 8.7.1 (Resignation), the Requisite Lenders, with the consent of Bank of America and the Borrower, shall appoint a successor to the Agent. If a successor to the Agent shall not have been so appointed within said thirty (30) Business Day period, the Agent retiring, upon notice to the Borrower, shall then appoint a successor Agent who shall serve as the Agent until such time, as the Requisite Lenders appoint a successor the Agent as provided above. 8.7.3 Successor Agent. Upon the acceptance of any appointment as the Agent under the Financing Documents by a successor Agent, such successor to the Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the Agent retiring, and the Agent retiring shall be discharged from its duties and obligations under the Financing Documents. After any Agent's resignation as the Agent under the Financing Documents, the provisions of this ARTICLE VIII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Agent under the Financing Documents. 154 Section 8.8 Collateral Matters. 8.8.1 Release of Collateral. The Lenders hereby irrevocably authorize the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, as applicable, at its or their option and in its or their discretion, to release any Lien granted to or held by the Agent upon any property covered by this Agreement or the Financing Documents: (a) upon termination of the Commitments and this Agreement and payment and satisfaction of all Obligations (other than contingent indemnification and expense reimbursement obligations for which no claim has been made) and expiration or termination of all Letters of Credit and all Bond Letters of Credit; (b) constituting property being sold or disposed of if the Borrower, Berry UK, NIM Holdings or a Subsidiary Guarantor certifies to the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as applicable, that the sale or disposition is made in compliance with the provisions of this Agreement (and the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, may rely in good faith conclusively on any such certificate, without further inquiry); (c) constituting property leased to the Borrower, Berry UK, NIM Holdings or any Subsidiary under a lease which has expired or been terminated in a transaction permitted under this Agreement or is about to expire and which has not been, and is not intended by the Borrower or the Subsidiary to be, renewed or extended; or (d) constituting property covered by Permitted Liens with lien priority superior to those Liens in favor or for the benefit of Bank of America, acting through its Sterling LIBOR Lending Office, the Agent or the Lenders. In addition during any fiscal year of the Borrower (x) the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, may release Collateral having a book value of not more than 5% of the book value of all Collateral, (y) the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, with the consent of Requisite Lenders, may release Collateral having a book value of not more than 25% of the book value of all Collateral and (z) the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, with the consent of the Lenders having 90% of (i) the Commitments and (ii) Loans, may release all the Collateral. 8.8.2 Confirmation of Authority, Execution of Releases. Without in any manner limiting the Agent's authority to act without any specific or further authorization or consent by the Lenders as set forth in Section 8.8.1 (Release of Collateral), each Lender agrees to confirm in writing the authority to release any property covered by this Agreement or the Financing Documents conferred upon the Agent under Section 8.8.1 (Release of Collateral). So long as no Event of Default is then continuing, upon receipt by the Agent of confirmation from the requisite percentage, if any, of the Lenders, of its authority to release any particular item or types of property covered by this Agreement or the Financing 155 Documents, the Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Agent for the benefit of the Lenders herein or pursuant hereto upon such Collateral; provided, however, that (a) the Agent shall not be required to execute any such document on terms which, in the Agent's opinion, would expose the Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (b) such release shall not in any manner discharge, affect or impair the Obligations or any Liens upon (or obligations of any Person, in respect of), all interests retained by any Person, including, without limitation, the proceeds of any sale, all of which shall continue to constitute part of the property covered by this Agreement or the Financing Documents. 8.8.3 Absence of Duty. The Agent shall have no obligation whatsoever to any Lender, the Borrower, Berry UK, NIM Holdings or any other Person to assure that the property covered by this Agreement or the Financing Documents exists or is owned by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor or is cared for, protected or insured or has been encumbered or that the Liens granted to the Agent on behalf of the Lenders herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Agent in this Section 8.8.3 or in any of the Financing Documents, it being understood and agreed that in respect of the property covered by this Agreement or the Financing Documents or any act, omission or event related thereto, the Agent may act in any manner it may deem appropriate, in its discretion, given the Agent's own interest in property covered by this Agreement or the Financing Documents as one of the Lenders and that the Agent shall have no duty or liability whatsoever to any of the other the Lenders. Section 8.9 Agency Fee. The Borrower shall pay to the Agent, an annual loan administration and agency fee (collectively, the "Agency Fees" and individually, an "Agency Fee"), in the aggregate amount of One Hundred Twenty Thousand Dollars ($120,000), payable quarterly in advance in installments of $30,000 each. The Agency Fee shall be payable in advance on the first day of each April, July, October, and January, commencing with the first such day following the date hereof. Each Agency Fee shall be fully earned and non-refundable upon the date paid. The Agent shall retain all of the Agency Fees for its own account and shall have no obligation to remit or pay any portion thereof to any of the Lenders. Section 8.10 Agency for Perfection. Each Lender hereby appoints the Agent and each other Lender as agent for the purpose of perfecting the Lenders' Liens in Collateral which, in accordance with Article 9 of the Uniform Commercial Code in any applicable jurisdiction or otherwise, can be perfected only by possession. Should any Lender (other than the Agent) obtain possession of any such Collateral, such Lender shall notify the Agent thereof, and, promptly upon the Agent's request therefor, shall deliver such Collateral to the Agent or in accordance with the Agent's instructions. 156 Section 8.11 Exercise of Remedies. Each Lender agrees that it will not have any right individually to enforce or seek to enforce this Agreement or any Financing Document or to realize upon any collateral security for the Loans, it being understood and agreed that such rights and remedies may be exercised only by the Agent. Section 8.12 Consents. (a) In the event the Agent or Bank of America, acting through its Sterling LIBOR Lending Office, requests the consent of a Lender and does not receive a written denial thereof, or a written notice from a Lender that due consideration of the request requires additional time, in each case, within ten (10) Business Days after such Lender's receipt of such request, then such Lender will be deemed to have given such consent. (b) In the event the Agent, Bank of America, acting through its Sterling LIBOR Lending Office, the Borrower, Berry UK or NIM Holdings, as the case may be, requests the consent of a Lender and such consent is denied, then Bank of America or the Borrower, Berry UK or NIM Holdings, as the case may be, may, at their option, require such Lender to assign its interest in the Loans and Commitments to Bank of America or such other lender as shall be acceptable to the Borrower, Berry UK and/or NIM Holdings, as the case may be, Bank of America, acting through its Sterling LIBOR Lending Office, and the Agent, for a price equal to the then outstanding principal amount thereof, plus accrued and unpaid interest, fees and costs and expenses due such Lender under the Financing Documents, which principal, interest, fees and costs and expenses will be paid on the date of such assignment. In the event that Bank of America, acting through its Sterling LIBOR Lending Office, the Agent, the Borrower, Berry UK or NIM Holdings, as the case may be, elects to require any Lender to assign its interest to Bank of America or such other lender as shall be acceptable to the Borrower, Berry UK, or NIM Holdings, as the case may be, and the Agent and Bank of America, acting through its Sterling LIBOR Lending Office, will so notify such Lender in writing within thirty (30) days following such Lender's denial, and such Lender will assign its interest to Bank of America or such other lender as shall be acceptable to the Borrower, Berry UK or NIM Holdings, as the case may be, Bank of America, acting through its Sterling LIBOR Lending Office, and the Agent, no later than five (5) days following receipt of such notice. (c) The Lenders each hereby authorize the Agent and/or Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate on their behalf to execute any and all amendments to this Agreement and any of the other Financing Documents as may be necessary to remedy and correct any clerical errors, omissions or inconsistencies. The Agent and Bank of America, acting through its Sterling LIBOR Lending Office, as appropriate, agrees to give copies of any and all such executed amendments to each of the Lenders. (d) Notwithstanding anything to the contrary contained herein, Bank of America, acting through its Sterling LIBOR Lending Office, acknowledges and agrees that to the extent any Lender has made all required payments to Bank of America, acting through its Sterling LIBOR Lending Office, on account of its participation interests in the UK Obligations in accordance with the terms of this Agreement, such Lender shall be deemed a 157 "Lender" for purposes of consents and similar actions required to be contained by Bank of America, acting through its Sterling LIBOR Lending Office, with respect to such UK Obligations. Accordingly, all consents and similar actions required to be obtained by the Agent with respect to the Obligations from the Requisite Lenders and/or all of the Lenders as required by the terms of this Agreement shall likewise be applicable to actions of Bank of America, acting through its Sterling LIBOR Lending Office, with respect to the UK Obligations in the same respect. Section 8.13 Circumstances Where Consent of all of the Lenders is Required. Notwithstanding anything to the contrary contained herein, no amendment, modification, change or waiver shall be effective without the consent of all of the Lenders (but only the consent of all Lenders party to this Agreement as of the Closing Date shall be required with respect to item (i) below) to: (a) increase the principal amount of any of the Commitments; (b) extend the maturity or due date of payment of principal, interest or Fees on account of the Obligations, including the UK Obligations; (c) reduce the principal amount of any Obligations, the rate of interest on any of the Obligations or any Fees payable, except as expressly permitted therein; (d) change the method of calculation utilized in connection with the computation of interest and Fees; (e) change the manner of pro rata application by the Agent or Bank of America of payments made by the Borrower, Berry UK or NIM Holdings or any other payments required hereunder or under the other Financing Documents; (f) modify this Section or the definition of "Requisite Lenders"; (g) release any material portion of any Collateral (including any UK Collateral), any Guarantor or any Financing Document (except to the extent provided herein or therein); (h) increase the advance rates for any component of the Borrowing Base or the UK Borrowing Base above the levels specified in this Agreement; and (i) modify, waiver or otherwise change the requirements of Section 2.1.12. Section 8.14 Dissemination of Information. The Agent will provide the Lenders with any information received by the Agent from the Borrower, Berry UK or NIM Holdings which is required to be provided to the Agent or to the Lenders hereunder; provided, however, that the Agent shall not be liable to any one or more the Lenders for any failure to do so, except to the extent that such failure is attributable to the Agent's gross negligence or willful misconduct. 158 Section 8.15 Discretionary Advances. The Agent may, in its sole discretion, make, for the account of the Lenders on a pro rata basis, advances under the Revolving Loan of up to 10% in excess of the Borrowing Base but not in excess of the limitation set forth in aggregate Revolving Credit Commitments for a period of not more than thirty (30) consecutive days or, following an Event of Default, for such longer period as the Requisite Lenders may elect. ARTICLE IX MISCELLANEOUS Section 9.1 Notices. All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or two (2) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows: Borrower: BERRY PLASTICS CORPORATION Berry UK or 101 Oakley Street NIM Holdings P.O. Box 959 Evansville, Indiana 47710-0959 Attention: President with a copy to: Michael J. O'Brien, Esquire O'Sullivan, Graev & Karabell, LLP 30 Rockefeller Center 41st Floor New York, New York 10112 with a copy to: Mr. Joseph S. Levy Vice President First Atlantic Capital, Ltd. 135 East 57th Street, 29th Floor New York, New York 10022 Agent: BANK OF AMERICA, N.A. Bank of America Business Credit 100 S. Charles Street Baltimore, Maryland 21201 Attention: Alison Gabis with a copy to: Shaun F. Carrick, Esquire Miles & Stockbridge P.C. 10 Light Street Baltimore, Maryland 21202 159 Bank of America's Sterling LIBOR Lending Office: Bank of America, N.A. (London Branch) New Broad Street House 35 New Broad Street London, England EC2MINH Attention: Mr. Aidan Fisher Bank of America: Bank of America, N.A. Bank of America Business Credit 100 S. Charles Street Baltimore, Maryland 21201 Attn: Ms. Vickie Tillman GE Capital: General Electric Capital Corporation 335 Madison Avenue New York, New York 10017 Attn: Account Manager - Berry Plastics Fleet: Fleet Capital Corporation 200 Glastonbury Boulevard Glastonbury, Connecticut 06033 Attn: Mr. Daniel Dupre Heller: Mr. Tom Bukowski Senior Vice President Heller Financial, Inc. 150 East 42nd Street 7th Floor New York, New York 10017 PNC: Mr. Wing C. Louie Vice President PNC Business Credit Two Tower Center Boulevard East Brunswick, New Jersey 08816 LaSalle: Mr. Stephen V. Rieger First Vice President LaSalle Business Credit, Inc. 120 East Baltimore Street, Suite 1802 Baltimore, Maryland 21202 By written notice, each party to this Agreement may change the address to which notice is given to that party, provided that such changed notice shall include a street address to which notices may be delivered by overnight courier in the ordinary course on any Business Day. 160 Section 9.2 Amendments; Waivers. This Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Requisite Lenders (or the Agent with the approval of the Requisite Lenders), the Borrower, Berry UK and NIM Holdings and to the extent provided in Section 8.13 by an agreement in writing signed by all of the Lenders, the Borrower, Berry UK and NIM Holdings. In addition, any agreement which directly or indirectly affects any rights, duties, obligations, liabilities or remedies of the Agent under this Agreement, under any of other Financing Documents or otherwise must be approved and signed by the Agent. No waiver of any provision of this Agreement or of any of the other Financing Documents, nor consent to any departure by the Borrower, Berry UK or NIM Holdings therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Borrower, Berry UK, NIM Holdings and the Agent and/or any of the Lenders and no act or failure to act from time to time on the part of the Agent and/or any of the Lenders shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws. Without implying any limitation on the foregoing, and subject to the provisions of Section 8.13: (a) Any waiver or consent shall be effective only in the specific instance, for the terms and purpose for which given, subject to such conditions as the Agent may specify in any such instrument. (b) No waiver of any Default or Event of Default shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereto. (c) No notice to or demand on the Borrower, Berry UK or NIM Holdings in any case shall entitle the Borrower, Berry UK or NIM Holdings to any other or further notice or demand in the same, similar or other circumstance. (d) No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver, amendment or modification of any such term, condition, covenant or agreement or of any such breach or preclude the Agent from exercising any such right, power or remedy at any time or times. (e) By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents, the Agent shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any of the other Financing Documents, or to declare a Default or an Event of Default for failure to effect such prompt payment of any such other amount. 161 Section 9.3 Cumulative Remedies. The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Agent shall determine, subject to the provisions of this Agreement, and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws. In order to entitle the Agent to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement. Without limiting the generality of the foregoing and subject to the terms of this Agreement, the Agent may: (a) proceed against the Borrower, Berry UK or NIM Holdings with or without proceeding against any other Person (including, without limitation, any one or more of the Guarantors) who may be liable (by endorsement, guaranty, indemnity or otherwise) for all or any part of the Obligations (subject to the limitations set forth in Section 2.10.11 (Limitations on Joint and Several Liability); (b) proceed against the Borrower, Berry UK or NIM Holdings with or without proceeding under any of the other Financing Documents or against any Collateral or other collateral and security for all or any part of the Obligations; (c) without reducing or impairing the obligation of the Borrower, Berry UK or NIM Holdings and without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise; (d) without reducing or impairing the obligations of the Borrower, Berry UK or NIM Holdings and without notice thereof: (i)fail to perfect the Lien in any or all Collateral or to release any or all the Collateral or to accept substitute Collateral, (ii) approve the making of advances under the Revolving Loan and/or the UK Revolving Loan under this Agreement, (iii) waive any provision of this Agreement or the other Financing Documents, (iv) exercise or fail to exercise rights of set-off or other rights, or (v) accept partial payments or extend from time to time the maturity of all or any part of the Obligations. Section 9.4 Severability. In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action: (a) the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby; (b) the obligation to be fulfilled shall be reduced to the limit of such validity; 162 (c) such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect. Section 9.5 Assignments by Lenders. Any Lender may, with the prior written consent of the Agent and the Borrower, but without notice to or consent of any other Lender, which consent shall not be unreasonably withheld, delayed or conditioned, assign to any Person (each an "Assignee" and collectively, the "Assignees") all or a portion of such Lender's Commitments; provided that (a) the amount assigned by such Lender must be at least equal to Five Million Dollars ($5,000,000), (b) after giving effect to such assignment, such Lender must continue to hold a Pro Rata Share of the Commitments at least equal to Ten Million Dollars ($10,000,000), unless such Lender has assigned one hundred percent (100%) of such Lender's Commitments, and (c) any amount assigned shall be divided pro rata among such Lenders' Pro Rata Share of the Commitments and Obligations. Bank of America agrees that if at any time Bank of America sells one hundred percent (100%) of all of its Commitments, Bank of America shall resign as Agent and the remaining Lenders shall select a replacement Agent in accordance with the provisions of this Agreement. In addition, Bank of America agrees that for so long as Bank of America is the Agent, unless otherwise agreed by the Lenders, Bank of America shall continue to hold a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of the Lender (other than Bank of America) having the highest Pro Rata Share of the Commitments. Any Lender which elects to make such an assignment shall pay to the Agent, for the exclusive benefit of the Agent, an administrative fee for processing each such assignment in the amount of Three Thousand Five Hundred Dollars ($3,500). Such Lender and its Assignee shall notify the Agent and the Borrower in writing of the date on which the assignment is to be effective (the "Adjustment Date"). On or before the Adjustment Date, the assigning Lender, the Agent, the Borrower and the respective Assignee shall execute and deliver a written assignment agreement in a form acceptable to the Agent, which shall constitute an amendment to this Agreement to the extent necessary to reflect such assignment. Upon the request of any assigning Lender following an assignment made in accordance with this Section 9.5, the Borrower, Berry UK and NIM Holdings shall issue new Notes to the assigning Lender and its Assignee reflecting such assignment, in exchange for the existing Notes held by the assigning Lender. In addition to the foregoing assignments permitted by this Section 9.5, without the prior written consent of the Borrower, Berry UK or NIM Holdings, but with the consent of the Agent, which consent shall not be unreasonably withheld, delayed or conditioned, any Lender may assign all or any portion of such Lender's Commitments (a) to Bank of America, Fleet, GE Capital or Heller at any time regardless of the occurrence or non-occurrence of an Event of Default and (b) to any other Person at any time after the occurrence of an Event of Default; provided that with respect to any such proposed assignment under either (a) or (b) (i) the amount to be assigned by such assigning Lender must be at least equal to Five Million Dollars ($5,000,000), (ii) after giving effect to such assignment, such assigning Lender must continue to hold a Pro Rata Share of the Commitments at least equal to Ten Million Dollars ($10,000,000), unless such Lender has assigned one hundred percent (100%) of such Lender's Commitments, (iii) any amount to be assigned shall be divided pro rata among such Lender's Pro Rata Share of the Commitments and the Obligations, and (iv) prior to closing and consummating the proposed assignment (the "Proposed Assignee"), the Lender shall have first given the Borrower notice of 163 the proposed assignment (the "Right of First Refusal Notice") to permit the Borrower an opportunity to locate another Person acceptable to the Agent (the "Substitute Purchaser") to close and consummate the proposed assignment on the same terms and conditions available to the Proposed Assignee and the Substitute Purchaser shall in fact close and consummate the proposed assignment within thirty (30) days after the Right of First Refusal Notice. If the Borrower fails to locate a Substitute Purchaser or if the Substitute Purchaser fails to close and consummate the proposed assignment within such thirty (30) day period, the assigning Lender shall be entitled to close and consummate the proposed assignment to the Proposed Assignee without further notice or obligation to the Borrower, Berry UK or NIM Holdings. In addition, notwithstanding the foregoing, any Lender may at any time pledge all or any portion of such Lender's rights under this Agreement, any of the Commitments or any of the Obligations to a Federal Reserve Bank. Section 9.6 Participations by Lenders. Any Lender may at any time sell to one or more financial institutions participating interests in any of such Lender's Obligations or Commitments; provided, however, that (a) no such participation shall relieve such Lender from its obligations under this Agreement or under any of the other Financing Documents to which it is a party, (b) such Lender shall remain solely responsible for the performance of its obligations under this Agreement and under all of the other Financing Documents to which it is a party, (c) the Borrower, Berry UK, NIM Holdings, the Agent 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 and the other Financing Documents, and (d) no such participant shall be granted voting rights with respect to any matters reserved for the Lenders under the provisions of this Agreement. Section 9.7 Disclosure of Information by Lenders. (a) In connection with any sale, transfer, assignment or participation by any Lender in accordance with Section 9.5 (Assignments by Lenders) or Section 9.6 (Participations by Lenders), each Lender shall have the right to disclose to any actual or potential purchaser, assignee, transferee or participant all financial records, information, reports, financial statements and documents obtained in connection with this Agreement and/or any of the other Financing Documents or otherwise, provided that such actual or potential purchaser shall agree to keep confidential any non-public information delivered or made available to such Lender. (b) Each of the Lenders and the Agent hereby agree to exercise reasonable efforts to keep any non-public information delivered or made available to it pursuant to this Agreement or any of the Financing Documents, confidential from any other Person except (i) Persons employed or retained by such Lender or Agent who are or are expected to become engaged in evaluating, approving, structuring or administering the Obligations, (ii) with the prior written consent of Borrower, (iii) as required in connection with the exercise of any remedy under this Agreement or any of the Financing Documents or (iv) as may be required by Law, provided that in the event that any Lender, the Agent or any of its or their representatives are requested or compelled (by oral questions, interrogatories, requests for information or documents, subpoena, civil 164 investigative demand or similar process) to disclose any of the non-public information delivered or made available to any Lender or the Agent pursuant to this Agreement or any of the Financing Documents, the Lenders, the Agent and its or their representatives, as appropriate, agree to provide Borrower with prompt notice of such request(s). Section 9.8 Successors and Assigns. This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Borrower, Berry UK, NIM Holdings, the Agent and the Lenders and their respective heirs, personal representatives, successors and assigns, except that neither the Borrower, Berry UK nor NIM Holdings shall have the right to assign its rights hereunder or any interest herein without the prior written consent of the Agent and the Requisite Lenders. Section 9.9 Continuing Agreements. All covenants, agreements, representations and warranties made by the Borrower, Berry UK and/or NIM Holdings in this Agreement, in any of the other Financing Documents, and in any certificate delivered pursuant hereto or thereto shall survive the making by the Lenders of the Loans, the issuance of Letters of Credit by the Agent and the execution and delivery of the Notes, shall be binding upon the Borrower, Berry UK and NIM Holdings regardless of how long before or after the date hereof any of the Obligations were or are incurred, and shall continue in full force and effect so long as any of the Obligations are outstanding and unpaid. From time to time upon the Agent's request, and as a condition of the release of any one or more of the Security Documents, the Borrower, Berry UK, NIM Holdings and other Persons obligated with respect to the Obligations shall provide the Agent with such acknowledgments and agreements as the Agent may require to the effect that there exists no defenses, rights of setoff or recoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoever against the Agent, any or all of the Lenders, and/or any of its or their agents and others, or to the extent there are, the same are waived and released. Section 9.10 Enforcement Costs. The Borrower agrees to pay to the Agent on demand all Enforcement Costs (including expenses and fees incurred by any Lender to the extent included in the definition of Enforcement Costs), together with interest thereon from the date following demand until paid in full at a per annum rate of interest equal at all times to the Post-Default Rate. The Borrower, Berry UK and NIM Holdings jointly and severally agree to pay to the Agent on demand all Enforcement Costs which relate solely to the UK Obligations, together with interest thereon from the date following demand until paid in full at a per annum rate of interest equal at all times to the Post-Default Rate. Enforcement Costs shall be immediately due and payable at the time advanced or incurred, whichever is earlier. Without implying any limitation on the foregoing, the Borrower and to the extent appropriate, Berry UK and NIM Holdings, jointly and severally agree, as part of the Enforcement Costs, to pay upon demand any and all stamp and other Taxes and fees payable or determined to be payable in connection with the execution and delivery of this Agreement and the other Financing Documents and to save the Agent and the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay any Taxes or fees referred to in this Section. The provisions of this Section shall survive the 165 execution and delivery of this Agreement, the repayment of the other Obligations and shall survive the termination of this Agreement. Section 9.11 Applicable Law; Jurisdiction. 9.11.1 Governing Law. As a material inducement to the Agent and the Lenders to enter into this Agreement, the Borrower, Berry UK and NIM Holdings each acknowledges and agrees that the Financing Documents, including, this Agreement, shall be governed by the Laws of the State, as if each of the Financing Documents and this Agreement had each been executed, delivered, administered and performed solely within the State even though for the convenience and at the request of the Borrower, Berry UK and/or NIM Holdings one or more of the Financing Documents may be executed elsewhere. The Agent and the Lenders acknowledge, however, that remedies under certain of the Financing Documents that relate to property outside the State may be subject to the laws of the state in which the property is located. 9.11.2 Submission to Jurisdiction. The Borrower, Berry UK and NIM Holdings each irrevocably submits to the jurisdiction of any state or federal court sitting in the State over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents. The Borrower, Berry UK and NIM Holdings each irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the 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. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Borrower, Berry UK and NIM Holdings and may be enforced in any court in which the Borrower, Berry UK and/or NIM Holdings is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Borrower, Berry UK and NIM Holdings in one of the manners specified in this Section or as otherwise permitted by applicable Laws. 9.11.3 Appointment of Agent for Service of Process. The Borrower, Berry UK and NIM Holdings each hereby irrevocably designates and appoints CT Corporation System 300 East Lombard Street, Baltimore, Maryland, 21202, as their respective agent to receive on their behalf service of any and all process that may be served in any suit, action or proceeding of the nature referred to in this Section in any state or federal court sitting in the State. If such agent shall cease so to act, the Borrower, Berry UK and NIM Holdings shall irrevocably designate and appoint without delay another such agent in the State satisfactory to the Agent and shall promptly deliver to the Agent evidence in writing of such other agent's acceptance of such appointment and its agreement that such appointment shall be irrevocable. 166 9.11.4 Service of Process. The Borrower, Berry UK and NIM Holdings each hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by (a) the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Borrower, Berry UK and NIM Holdings at their respective address designated in or pursuant to Section 9.1 (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Borrower, Berry UK and NIM Holdings as their respective agent for service of process by or pursuant to this Section. The Borrower, Berry UK and NIM Holdings each irrevocably agrees that such service (i) shall be deemed in every respect effective service of process upon each of them in any such suit, action or proceeding, and (ii) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Borrower, Berry UK and NIM Holdings. Nothing in this Section shall affect the right of the Agent to serve process in any manner otherwise permitted by law or limit the right of the Agent otherwise to bring proceedings against the Borrower, Berry UK and/or NIM Holdings in the courts of any jurisdiction or jurisdictions. Section 9.12 Duplicate Originals and Counterparts. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same instrument. Section 9.13 Headings. The headings in this Agreement are included herein for convenience only, shall not constitute a part of this Agreement for any other purpose, and shall not be deemed to affect the meaning or construction of any of the provisions hereof. Section 9.14 No Agency. Nothing herein contained shall be construed to constitute the Borrower, Berry UK or NIM Holdings as the agent of the Agent or any of the Lenders for any purpose whatsoever or to permit the Borrower, Berry UK or NIM Holdings to pledge any of the credit of the Agent or any of the Lenders. Neither the Agent nor any of the Lenders shall be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof. Neither the Agent nor any of the Lenders shall, by anything herein or in any of the Financing Documents or otherwise, assume any of the Borrower's, Berry UK's, or NIM Holdings's obligations under any contract or agreement assigned to the Agent and/or the Lenders, and neither the Agent nor any of the Lenders shall be responsible in any way for the performance by the Borrower, Berry UK or NIM Holdings of any of the terms and conditions thereof. Section 9.15 Waiver of Trial by Jury. THE BORROWER, BERRY UK, NIM HOLDINGS, THE AGENT AND THE LENDERS HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER, BERRY UK, 167 NIM HOLDINGS, THE AGENT AND/OR ANY OR ALL OF THE LENDERS MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. This waiver is knowingly, willingly and voluntarily made by the Borrower, Berry UK, NIM Holdings, the Agent and the Lenders, and the Borrower, Berry UK, NIM Holdings, the Agent and the Lenders hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect. The Borrower, Berry UK, NIM Holdings, the Agent and the Lenders further represent that they have been represented in the signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel. Section 9.16 Liability of the Agent and the Lenders. The Borrower, Berry UK and NIM Holdings each hereby agrees that neither the Agent nor any of the Lenders shall be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Agent and/or any of the Lenders in making examinations, investigations or collections, or otherwise in perfecting, maintaining, protecting or realizing upon any lien or security interest or any other interest in the Collateral or other security for the Obligations, except for acts of gross negligence and willful misconduct. By inspecting the Collateral or any other properties of the Borrower, Berry UK or NIM Holdings or by accepting or approving anything required to be observed, performed or fulfilled by the Borrower, Berry UK or NIM Holdings or to be given to the Agent and/or any of the Lenders pursuant to this Agreement or any of the other Financing Documents, neither the Agent nor any of the Lenders shall be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Agent and/or the Lenders. Section 9.17 Waiver of Certain Financial Covenants Contained in Original Credit Agreement. The Agent and the Lenders hereby waive any Defaults or Events of Default under the following provisions of the Original Credit Agreement which, prior to the execution of this Agreement or for the period stated, existed under the Original Credit Agreement; provided, however that this Section shall not be deemed to waive any Defaults or Events of Default under this Agreement or after the period stated, or any other Defaults or Events of Default arising out of non-compliance by the Borrower, Berry UK or NIM Holdings with this Agreement, whether or not the events, facts or circumstances giving rise to such non-compliance existed on or prior to the date hereof: 168 Section Default ------- ------- 6.1.13(a) Failure of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, to attain the required level of Tangible Capital Funds for the measurement period ending March 31, 2000; 6.1.13(b) Failure of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, to satisfy the required ratio of Funded Debt to EBITDA for the measurement period ending March 31, 2000; 6.1.13(b) Failure of Berry UK and NIM Holdings, on a consolidated basis, to satisfy the required ratio of Funded Debt to EBITDA for any measurement period from March 31, 2000 through and including December 31, 2000; 6.1.13(c) Failure of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, to satisfy the required the Interest Coverage Ratio for the measurement period ending March 31, 2000; 6.1.13(d) Failure of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, to satisfy the required Fixed Charge Coverage Ratio for the measurement period ending March 31, 2000; 6.1.13(d) Failure of Berry UK and NIM Holdings, on a consolidated basis, to satisfy the required Fixed Charge Coverage Ratio to be less than the amount required for any measurement period from March 31, 2000 through and including December 31, 2000; and 6.1.13(e) Failure of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, to satisfy the required Debt Service Coverage Ratio for the measurement period ending March 31, 2000. Section 9.18 ENTIRE AGREEMENT. THIS AGREEMENT IS INTENDED BY THE AGENT, THE LENDERS, BERRY UK, NIM HOLDINGS AND THE BORROWER TO BE A COMPLETE, EXCLUSIVE AND FINAL EXPRESSION OF THE AGREEMENTS CONTAINED HEREIN. NEITHER THE AGENT, THE LENDERS NOR BERRY UK, NIM HOLDINGS, OR THE BORROWER SHALL HEREAFTER HAVE ANY RIGHTS UNDER ANY PRIOR AGREEMENTS PERTAINING TO THE MATTERS ADDRESSED BY THIS AGREEMENT BUT SHALL LOOK SOLELY TO THIS AGREEMENT FOR DEFINITION AND DETERMINATION OF ALL OF THEIR RESPECTIVE RIGHTS, LIABILITIES AND RESPONSIBILITIES UNDER THIS AGREEMENT. 169 IN WITNESS WHEREOF, each of the parties hereto have executed and delivered this Agreement under their respective seals as of the day and year first written above. WITNESS OR ATTEST: BERRY PLASTICS CORPORATION _________________________ By:_______________________(Seal) James M. Kratochvil Executive Vice President WITNESS OR ATTEST: NIM HOLDINGS LIMITED _________________________ By:_______________________(Seal) James M. Kratochvil Vice President WITNESS OR ATTEST: BERRY PLASTICS UK LIMITED _________________________ By:_______________________(Seal) James M. Kratochvil Vice President WITNESS: BANK OF AMERICA, N.A., in its capacity as Agent _________________________ By:______________________(Seal) Alison Gabis Vice President WITNESS: BANK OF AMERICA, N.A. in its capacity as a Lender _________________________ By:_______________________(Seal) Alison Gabis Vice President 170 WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION in its capacity as a Lender _________________________ By:_______________________(Seal) Name: Title: WITNESS: FLEET CAPITAL CORPORATION in its capacity as a Lender _________________________ By:_______________________(Seal) Name: Title WITNESS: HELLER FINANCIAL, INC. in its capacity as a Lender _________________________ By:_______________________(Seal) Name: Title: WITNESS: PNC BANK, NATIONAL ASSOCIATION in its capacity as a Lender _________________________ By:_______________________(Seal) Name: Wing C. Louie Title: Vice President WITNESS: LASALLE BUSINESS CREDIT, INC. in its capacity as a Lender _________________________ By:_______________________(Seal) Name: Stephen V. Rieger Title: Senior Vice President 171 LIST OF EXHIBITS A-1. Form of Borrowing Base Report A-2 Form of UK Borrowing Base Report B. Wire Transfer Procedures C-1. Pro-Forma Financial Statements C-2 Pro-Forma Balance Sheets D. Form of Compliance Certificate E. GE Capital Term Sheet LIST OF SCHEDULES Schedule 1.1A List of Account Debtors (concentrations) Schedule 1.1B Evansville Sale/Leaseback Schedule 4.1.10 Litigation Schedule 4.1.14 Scheduled Indebtedness for Borrowed Money Schedule 4.1.20 Employee Relations Disclosures Schedule 4.1.21 Hazardous Materials Disclosures Schedule 4.1.22 Scheduled Permitted Liens Schedule 4.1.24 Information on Names, Addresses and Locations Schedule 6.2.5 Permitted Investments Exhibit B Exhibit C TABLE OF CONTENTS ARTICLE I DEFINITIONS 3 Section 1.1 Certain Defined Terms. 3 Section 1.2 Accounting Terms and Other Definitional Provisions. 50 ARTICLE II THE CREDIT FACILITIES 51 Section 2.1 The Revolving Credit Facility. 51 2.1.1 Revolving Credit Facility. 51 2.1.2 Procedure for Making Advances Under the Revolving Loan. 52 2.1.3 Borrowing Base. 53 2.1.4 Borrowing Base Report. 54 2.1.5 Revolving Credit Notes. 55 2.1.6 Mandatory Prepayments of Revolving Loan. 55 2.1.7 Optional Prepayments of Revolving Loan. 55 2.1.8 The Collateral Account. 56 2.1.9 Revolving Loan Account. 57 2.1.10 Revolving Credit Unused Line Fee. 57 2.1.11 Optional Reduction of Revolving Credit Committed Amount. 58 2.1.12 Required Availability under the Revolving Credit Facility. 58 Section 2.2 The Term Loan A Facility. 59 2.2.1 Term Loan A Commitments. 59 2.2.2 Amortization of Term Loans A; the Term Loan A Notes. 60 2.2.3 Mandatory Prepayments of Term Loans A. 60 2.2.4 Optional Prepayments of Term Loans A. 62 Section 2.3 Term Loan B Facility. 62 2.3.1 Term Loan B Commitments. 62 2.3.2 Amortization of Term Loans B; the Term Loan B Notes. 63 2.3.3 Mandatory Prepayments of Term Loan B. 63 2.3.4 Optional Prepayments of Term Loans B. 64 2.3.5 Term Loan B Fees. 64 Section 2.4 The Letter of Credit Facility. 64 2.4.1 Letters of Credit. 64 2.4.2 Letter of Credit Fees. 65 2.4.3 Terms of Letters of Credit; Post-Expiration Date Letters of Credit. 65 2.4.4 Procedures for Letters of Credit. 66 2.4.5 Payments of Letters of Credit. 67 Section 2.5 The Bond Letter of Credit Facility. 68 2.5.1 Bond Letter of Credit. 68 2.5.2 Bond Letter of Credit Fees. 68 2.5.3 Terms of Nevada Bond Letter of Credit. 69 2.5.4 Payments of Bond Letters of Credit. 69 Section 2.6 The UK Revolving Credit Facility. 71 2.6.1 UK Revolving Credit Facility. 71 2.6.2 Procedure for Making Advances Under the UK Revolving Loan. 72 2.6.3 UK Borrowing Base. 72 2.6.4 UK Borrowing Base Report. 73 2.6.5 UK Revolving Credit Note. 74 2.6.6 Mandatory Prepayments of UK Revolving Loan. 75 2.6.7 Optional Prepayments of UK Revolving Loan. 75 2.6.8 UK Revolving Loan Account. 75 2.6.9 UK Revolving Credit Facility Fee. 76 Section 2.7 UK Term Loan Facility. 76 2.7.1 UK Term Loan Commitments. 76 2.7.2 Amortization of UK Term Loan; the UK Term Loan Note. 77 2.7.3 Mandatory Prepayments of UK Term Loan. 78 2.7.4 Optional Prepayments of UK Term Loan. 78 Section 2.8 General Letter of Credit Provisions and Participation Provisions for UK Credit Facilities. 79 2.8.1 Procedures for Letters of Credit and Bond Letters of Credit. 79 2.8.2 General Letter of Credit Provisions. 79 2.8.3 Participations in the Letters of Credit and the Bond Letters of Credit. 80 2.8.4 Payments by the Lenders to the Agent. 81 2.8.5 Participations in the UK Credit Facilities. 82 Section 2.9 Interest. 84 2.9.1 Applicable Interest Rates. 84 2.9.2 Selection of Interest Rates. 85 2.9.3 Inability to Determine LIBOR Base Rate. 87 2.9.4 Indemnity. 88 2.9.5 Payment of Interest. 89 Section 2.10 General Financing Provisions. 89 2.10.1 Borrower's Representatives. 89 2.10.2 Use of Proceeds of the Loans. 90 2.10.3 Field Examination Fees. 90 2.10.4 Commitment Fee. 90 2.10.5 Consent Fee. 91 2.10.6 Computation of Interest and Fees. 91 2.10.7 Payments. 91 2.10.8 Liens; Setoff. 92 2.10.9 Requirements of Law. 92 2.10.10 Funds Transfer Services. 93 2.10.11 Limitations on Joint and Several Liability for Obligations. 94 Section 2.11 Settlement Among Lenders. 94 2.11.1 Term Loans. 94 2.11.2 Revolving Loan. 94 2.11.3 Settlement Procedures as to Revolving Loan. 95 2.11.4 Settlement of Other Obligations. 98 2.11.5 Presumption of Payment. 98 ARTICLE III THE COLLATERAL 99 Section 3.1 Debt and Obligations Secured. 99 Section 3.2 Grant of Liens. 100 Section 3.3 Collateral Disclosure List. 101 Section 3.4 Personal Property. 101 3.4.1 Securities, Chattel Paper, Promissory Notes, etc. 102 3.4.2 Patents, Copyrights and Other Property Requiring Additional Steps to Perfect. 103 Section 3.5 Record Searches. 103 Section 3.6 Real Property. 103 Section 3.7 Subsidiary Guarantor Assets. 105 Section 3.8 Costs. 105 Section 3.9 Release. 106 Section 3.10 Inconsistent Provisions. 106 ARTICLE IV REPRESENTATIONS AND WARRANTIES 106 Section 4.1 Representations and Warranties. 106 4.1.1 Subsidiaries. 106 4.1.2 Good Standing. 106 4.1.3 Power and Authority. 107 4.1.4 Binding Agreements. 107 4.1.5 No Conflicts. 107 4.1.6 No Defaults, Violations. As of the date of this Agreement: 107 4.1.7 Compliance with Laws. 108 4.1.8 Margin Stock. 108 4.1.9 Investment Company Act; Margin Securities. 108 4.1.10 Litigation. 108 4.1.11 Financial Condition. 109 4.1.12 Pro-forma Financial Statements. 109 4.1.13 Full Disclosure. 109 4.1.14 Indebtedness for Borrowed Money. 110 4.1.15 Subordinated Debt; Senior Secured Debt. 110 4.1.16 Taxes. 110 4.1.17 ERISA. 110 4.1.18 Title to Properties. 111 4.1.19 Patents, Trademarks, Etc. 111 4.1.20 Employee Relations. 111 4.1.21 Presence of Hazardous Materials or Hazardous Materials Contamination. 112 4.1.22 Perfection and Priority of Collateral. 112 4.1.23 Places of Business and Location of Collateral. 112 4.1.24 Business Names and Addresses. 112 4.1.25 Equipment. 113 4.1.26 Inventory. 113 4.1.27 Accounts. 113 4.1.28 Poly-Seal Stock Purchase Transaction. 113 4.1.29 Hart-Scott-Rodino. 113 4.1.30 Credit Facilities. 113 Section 4.2 Survival; Updates of Representations and Warranties. 114 ARTICLE V CONDITIONS PRECEDENT 114 Section 5.1 Conditions to the Initial Advance and Initial Letter of Credit. 114 5.1.1 Organizational Documents - Borrower, Berry UK and NIM Holdings. 115 5.1.2 Opinion of Counsel. 115 5.1.3 Organizational Documents - Guarantors. 115 5.1.4 Consents, Licenses, Approvals, Etc. 116 5.1.5 Notes. 116 5.1.6 Financing Documents and Collateral. 116 5.1.7 Other Financing Documents. 117 5.1.8 Other Documents, Etc. 117 5.1.9 Payment of Fees. 117 5.1.10 Collateral Disclosure List. 117 5.1.11 Recordings and Filings. 117 5.1.12 Insurance Certificate. 117 5.1.13 Landlord's Waivers. 118 5.1.14 Bailee Acknowledgements. 118 5.1.15 Field Examination. 118 5.1.16 Appraisal. 118 5.1.17 Pro-forma Balance Sheet and Projections. 118 5.1.18 Stock Certificates and Stock Powers. 118 5.1.19 Poly-Seal Stock Purchase Agreement Transaction. 119 5.1.20 Environmental Reports. 119 5.1.21 Financial Statements. 119 Section 5.2 Conditions to all Extensions of Credit. 120 5.2.1 Default. 120 5.2.2 Representations and Warranties. 120 5.2.3 Adverse Change. 120 5.2.4 Legal Matters. 120 ARTICLE VI COVENANTS OF THE BORROWER 120 Section 6.1 Affirmative Covenants. 120 6.1.1 Financial Statements. 121 6.1.2 Reports to SEC and to Stockholders. 123 6.1.3 Recordkeeping, Rights of Inspection, Field Examination, Etc. 123 6.1.4 Corporate Existence. 124 6.1.5 Compliance with Laws. 125 6.1.6 Preservation of Properties. 125 6.1.7 Line of Business. 125 6.1.8 Insurance. 125 6.1.9 Taxes. 126 6.1.10 ERISA. 126 6.1.11 Notification of Events of Default and Adverse Developments. 126 6.1.12 Hazardous Materials; Contamination. 127 6.1.13 Financial Covenants. 128 6.1.14 Collection of Accounts. 129 6.1.15 Government Accounts. 130 6.1.16 Inventory. 130 6.1.17 Insurance With Respect to Equipment and Inventory. 130 6.1.18 Maintenance of the Collateral. 131 6.1.19 Defense of Title and Further Assurances. 131 6.1.20 Business Names; Locations. 132 6.1.21 Subsequent Opinion of Counsel as to Recording Requirements. 132 6.1.22 Use of Premises and Equipment. 132 6.1.23 Protection of Collateral. 133 6.1.24 Application of Net Casualty Proceeds. 133 Section 6.2 Negative Covenants. 133 6.2.1 Capital Structure, Merger, Acquisition or Sale of Assets. 133 6.2.2 Subsidiaries. 134 6.2.3 Purchase or Redemption of Securities, Dividend Restrictions. 135 6.2.4 Indebtedness. 135 6.2.5 Investments, Loans and Other Transactions. 138 6.2.6 Capital Expenditures. 139 6.2.7 Stock of Subsidiaries. 139 6.2.8 Subordinated Indebtedness. 139 6.2.9 Liens. 140 6.2.10 Transactions with Affiliates. 140 6.2.11 ERISA Compliance. 141 6.2.12 Prohibition on Hazardous Materials. 141 6.2.13 Amendments. 141 6.2.14 Method of Accounting; Fiscal Year. 141 6.2.15 Transfer of Collateral. 141 6.2.16 Sale and Leaseback. 142 ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES 142 Section 7.1 Events of Default. 142 7.1.1 Failure to Pay. 143 7.1.2 Breach of Representations and Warranties. 143 7.1.3 Failure to Comply with Certain Covenants. 143 7.1.4 Failure to Comply with Other Covenants. 143 7.1.5 Default Under Other Financing Documents or Obligations. 143 7.1.6 Receiver; Bankruptcy. 144 7.1.7 Involuntary Bankruptcy, etc. 144 7.1.8 Judgment. 144 7.1.9 Execution; Attachment. 145 7.1.10 Default Under Other Borrowings. 145 7.1.11 Challenge to Agreements. 145 7.1.12 Material Adverse Change. 145 7.1.13 Change in Ownership. 145 7.1.14 Liquidation, Termination, Dissolution, Change in Management, etc. 146 7.1.15 Parent Line of Business. 146 7.1.16 Failure to Pay Senior Secured Debt - Parent. 146 Section 7.2 Remedies. 146 7.2.1 Acceleration. 146 7.2.2 Further Advances. 146 7.2.3 Uniform Commercial Code. 147 7.2.4 Specific Rights With Regard to Collateral. 148 7.2.5 Application of Proceeds. 149 7.2.6 Performance by Agent. 149 7.2.7 Other Remedies. 150 ARTICLE VIII THE AGENT 150 Section 8.1 Appointment. 150 Section 8.2 Nature of Duties. 151 8.2.1 In General. 151 8.2.2 Express Authorization. 151 Section 8.3 Rights, Exculpation, Etc. 152 Section 8.4 Reliance. 153 Section 8.5 Indemnification. 153 Section 8.6 Bank of America Individually. 154 Section 8.7 Successor Agent. 154 8.7.1 Resignation. 154 8.7.2 Appointment of Successor. 154 8.7.3 Successor Agent. 154 Section 8.8 Collateral Matters. 155 8.8.1 Release of Collateral. 155 8.8.2 Confirmation of Authority, Execution of Releases. 155 8.8.3 Absence of Duty. 156 Section 8.9 Agency Fee. 156 Section 8.10 Agency for Perfection. 156 Section 8.11 Exercise of Remedies. 157 Section 8.12 Consents. 157 Section 8.13 Circumstances Where Consent of all of the Lenders is Required. 158 Section 8.14 Dissemination of Information. 158 Section 8.15 Discretionary Advances. 159 ARTICLE IX MISCELLANEOUS 159 Section 9.1 Notices. 159 Section 9.2 Amendments; Waivers. 161 Section 9.3 Cumulative Remedies. 162 Section 9.4 Severability. 162 Section 9.5 Assignments by Lenders. 163 Section 9.6 Participations by Lenders. 164 Section 9.7 Disclosure of Information by Lenders. 164 Section 9.8 Successors and Assigns. 165 Section 9.9 Continuing Agreements. 165 Section 9.10 Enforcement Costs. 165 Section 9.11 Applicable Law; Jurisdiction. 166 9.11.1 Governing Law. 166 9.11.2 Submission to Jurisdiction. 166 9.11.3 Appointment of Agent for Service of Process. 166 9.11.4 Service of Process. 167 Section 9.12 Duplicate Originals and Counterparts. 167 Section 9.13 Headings. 167 Section 9.14 No Agency. 167 Section 9.15 Waiver of Trial by Jury. 167 Section 9.16 Liability of the Agent and the Lenders. 168 Section 9.17 Waiver of Certain Financial Covenants Contained in Original Credit Agreement. 168 Section 9.18 Entire Agreement. 169 EX-10.26 10 a2042389zex-10_26.txt EXHIBIT 10.26 AMENDED AND RESTATED TAX SHARING AGREEMENT AMENDED AND RESTATED TAX SHARING AGREEMENT, made as of March 15, 2001, by and among BPC Holding Corporation, a Delaware corporation having its principal place of business at 101 Oakley Street, Evansville, Indiana 47710 ("Holding"), and those corporations that have executed this Agreement and whose names and principal places of business are set forth on Exhibit A hereto (all of which are direct or indirect domestic subsidiaries of Holding and are includible in the consolidated Federal income tax return of the affiliated group (within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code")) of which Holding is the common parent corporation (hereinafter, the "Holding Group") for the fiscal year ended December 31, 1994), and such other parties as may become members of the Holding Group in subsequent fiscal years for which Holding files a consolidated Federal income tax return as the common parent corporation of an affiliated group, and who execute this Agreement (hereinafter, sometimes collectively referred to as the "Subsidiaries"). This Amended and Restated Tax Sharing Agreement amends and restates the Tax Sharing Agreement dated as of April 20, 1994, among Holding and the other parties thereto, for the purpose of memorializing certain oral agreements previously made by the parties hereto. Holding and the Subsidiaries wish to provide for payment of the consolidated Federal income tax and certain state and local tax liabilities of the Holding Group by Holding; for the contribution to such payment by the various members of the Holding Group, including Berry Plastics Corporation, a Delaware corporation having its principal place of business at 101 Oakley Street, Evansville, Indiana 47710 ("Berry"), and any direct and indirect subsidiaries of Berry ("Berry Subsidiaries") that may be includible in the Holding Group (hereinafter, Berry and such Berry Subsidiaries are sometimes collectively referred to as the "Berry Group"), to which such liability may be attributable in whole or in part; and for the reimbursement by Holding to those Subsidiaries that produce losses or credits in any fiscal year in the amount of the benefit that such Subsidiary would be entitled to with respect to such losses or credits on a separate return basis, or for the benefit, in whole or in part, that such losses or credits produce for the Holding Group. In consideration of the foregoing, and of the mutual covenants and promises herein contained, Holding and the Subsidiaries agree as follows: 1. Allocation and Payment of Tax Liability of Members of Group. (a) For the fiscal year ended December 31, 1994 and for each subsequent fiscal year for which this Agreement may remain in effect, each Subsidiary shall be required to pay to Holding (in the manner provided in paragraph 1(c) hereof), as its share of the consolidated Federal income tax liability of the Holding Group, an amount equal to the Federal income tax liability that would have been payable by such Subsidiary for such year if it had filed a separate income tax return for such year and all prior years; provided, however, that in computing separate return tax liability, no account shall be taken of any deduction, loss or credit of any Subsidiary to the extent that such Subsidiary has previously received payment therefor, pursuant to Section 3 hereof. Payments shall be required to be made in each fiscal year pursuant to this Section without regard to the actual consolidated Federal income tax liability, if any, of the Holding Group for such year. (b) For the purposes of this Agreement, if, in any fiscal year, one or more Berry Subsidiaries are includible in the Holding Group, all members of the Berry Group shall be deemed to constitute a single member of the Holding Group, and any portion of the Holding -2- Group consolidated Federal income tax liability for any fiscal year that is apportioned to the Berry Group in accordance with this Section shall be allocated among the members thereof in such manner as they may agree. The amount of separate return tax liability required to be paid to Holding by Berry or the Berry Group in any year pursuant to this Section shall be determined as if Berry had filed a consolidated Federal income tax return for such year and for all prior years, on behalf of itself and all Berry Subsidiaries that were includible corporations described in Section 1504(a)(1) of the Code for such year or prior years, as the case may be. (c) Each member (or group of members) of the Holding Group shall make payment to Holding of any consolidated Federal income tax liability allocated to it pursuant to this Section 1, and Holding shall have sole responsibility for making any required payments to the Internal Revenue Service (the "IRS") in satisfaction of the consolidated Federal income tax liability of the Holding Group for each fiscal year. Subject to the provisions of Section 1(d) below, for each quarter of each fiscal year after the year ended December 31, 1994, each member (or group of members) of the Holding Group shall make payment to Holding of any amount required to be paid pursuant to this Section no later than the date upon which such member (or group of members) would be required to make an installment payment of estimated income tax to the IRS for such quarter, in accordance with Section 6655 of the Code. The amount of any overpayment or underpayment pursuant to this Section shall be credited against or added to, as the case may be, the amount otherwise required to be paid for the fiscal quarter within which the amount of such overpayment or underpayment first becomes reasonably ascertainable; provided, however, that, upon written request (including supporting schedules) of any member (or group of members), made after the close of any fiscal year but within the period described in Section 6425(a)(1) of the Code, Holding shall repay to such member (or group of members), within the -3- period described in Section 6425(b)(1) of the Code, the amount of any net remaining overpayment of consolidated tax liability made by such member (or group of members) for such year. (d) Anything contained in this Agreement to the contrary notwithstanding, any payment to be made by any party hereto to any other party hereto may be deferred until such time as either (I) the party obligated to make such payment elects to make the relevant payment or (II) the party entitled to receive such payment demands that such payment be made. All such deferred payments shall bear interest at an annual rate that approximates the average interest rate under Berry's revolving credit facility over the time period that such payment is deferred, computed on the basis of the actual number of days elapsed over a 365-day period. The provisions of this Section 1(d) shall apply to all payment obligations that arose since the inception of this Agreement as originally entered into as of April 20, 1994. 2. Payment for Tax Benefits of Members. From and after the date hereof, if any member (or group of members) of the Holding Group would be entitled to a refund of Federal income taxes previously paid in any prior fiscal year, computed on a separate return basis (in the manner described in Section 1 hereof), as a result of any losses, deductions or credits claimed by such member (or group of members) for any fiscal year for which this Agreement may be in effect (any such entitlement to a refund being referred to herein as a "Separate Return Tax Benefit"), whether by reason of a carryback of a net operating loss, or a net capital loss or tax credit, or otherwise, then, upon written request (including supporting schedules) of such member (or group of members), made within the period described in Section 6411(a) of the Code, Holding shall pay the amount of such Separate Return Tax Benefit to such member, within the period described in Section 6411(b) of the Code (subject to the provisions of Section 1(d) -4- above). In the case of Berry and Berry Subsidiaries, the amount of the Separate Return Tax Benefit for any year shall be computed as if Berry had filed a consolidated Federal income tax return for such year and for all prior years on behalf of itself and all other Berry Subsidiaries that were includible corporations described in Section 1504(a)(1) of the Code. The amount of any payment required to be made to any member (or group of members) pursuant to this Section 2 shall be reduced by any amount previously paid to such member (or group of members) with respect to such losses, deductions or credits pursuant to Section 3 hereof. 3. Payment for Tax Benefits of Group. (a) If, for any fiscal year during which this Agreement is in effect, any member (or group of members) shall have a negative separate return tax liability (hereinafter, a "Loss Member"), Holding intends to pay to such Loss Member an amount equal to the tax benefit realized by the Holding Group for such year (the "Group Tax Benefit") as a result of such negative separate return tax liability. For purposes of this Agreement, the Group Tax Benefit for any fiscal year shall be equal to the excess, if any, of (i) the sum of the separate return tax liabilities of each member of the Holding Group having a positive separate return tax liability for such year, over (ii) the actual consolidated Federal income tax liability of the Holding Group for such year. For purposes of this Section 3, "separate return tax liability" shall be computed in accordance with, and subject to the exceptions and limitations provided in Treas. Reg. ss. 1.1552-1(a)(2)(ii). "negative separate return tax liability" shall similarly be ascertained under the principles of Treas. Reg. ss. 1.1552-1(a)(2)(ii), as if the Loss Member had filed a separate return for such fiscal year as its first separate return year and allocated to such separate return year carryover and carryback items of consolidated net operating loss, consolidated net capital loss, consolidated unused investment credit, consolidated unused foreign tax credit, and consolidated -5- excess charitable contributions under the provisions of Treas. Reg. ss. 1.1502-79. In the case of the Berry Group, separate return tax liability and negative separate return tax liability shall be computed in accordance with the principles set forth in this Section 3, on a consolidated basis. (b) Within 90 days after the beginning of each fiscal year for which this Agreement may be in effect, Holding shall give written notice to each Subsidiary of its intention to pay one or more Loss Members in an amount equal to all, or any portion, of their proportionate part (determined in the manner provided in paragraph 3(a)) of any Group Tax Benefit that may be realized by the Holding Group for such year. Holding intends to make such payments on a quarterly basis, in the manner described in paragraph 1(c) hereof; provided, however, that all payments made pursuant to this Section 3 shall be made in the sole discretion of Holding, and Holding shall have no obligations or liability whatsoever with respect thereto to any Loss Member; and provided, further, that any payment made to any Loss Member in a fiscal year pursuant to this Section 3 shall be reduced by any amount previously paid to such Loss Member with respect to such year under Section 2 hereof. 4. Adjustments. Any adjustment of income, deduction, or credit that results after the fiscal year in question by reason of any carryback, amended return, claim for refund, or audit shall be given effect by redetermining amounts payable and reimbursable for such fiscal year hereunder as if such adjustment had been part of the original determination hereunder, with interest payable in the amounts provided in Section 6611 of the Code. Any increases in the consolidated Federal income tax liability of the Holding Group, and any penalties and interest imposed with respect to any consolidated Federal income tax return filed on behalf of the Holding Group, shall be given effect by redetermining amounts payable for such fiscal year as if such adjustment had been part of the original determination hereunder. -6- 5. Alternative Minimum Tax. Each Subsidiary shall be required to pay to Holding, as its share of any alternative minimum tax imposed on the Holding Group pursuant to Section 55 of the Code, an amount of such liability that Holding shall allocate to each Subsidiary, provided that any such amounts so allocated pursuant to this Section 5.1 shall be allocated by Holding in a manner that is equitable and is consistent with Section 55 and Section 1502 of the Code, and the Treasury Regulations promulgated thereunder, including any amendments thereto and consistent with the allocations of tax liability pursuant to Section 1 hereof. 6. State Taxes. If, at any time from and after the date hereof, the liability of Holding and the Subsidiaries for any state or local income or franchise taxes is determined on a consolidated or combined basis, this Agreement shall be applied in like manner to determine liability for, and tax benefit payments with respect to, such taxes. 7. Termination. This Agreement may be terminated at any time upon mutual agreement of the parties hereto; provided, however, that such termination shall not relieve Holding of the obligation to make payments to any Subsidiary pursuant to Section 2 hereof for any separate return tax benefit to which such Subsidiary would have been entitled (if this Agreement had remained in effect) as a result of any loss, deductions or credits taken by such Subsidiary for any fiscal year for which this Agreement was in effect, nor will it relieve Holding or the Subsidiaries of any obligations pursuant to Sections 1.3, 4, and 6 hereof. 8. Effective Date. This Agreement shall be effective for the taxable year of the Holding Group ended December 31, 1994, and for all taxable years thereafter. 9. Captions. All section captions contained in this Agreement are for convenience only and shall not be deemed a part of this Agreement. -7- 10. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement. 11. Governing Law. This Agreement shall be governed by the laws applicable to contracts entered into and to be fully performed within the State of New York by residents thereof. 12. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. -8- IN WITNESS WHEREOF, Holding and the Subsidiaries have executed this Agreement as of the day and year first above written. BERRY PLASTICS CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BPC HOLDING CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY IOWA CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY TRI-PLAS CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY STERLING CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary AEROCON, INC. By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary PACKERWARE CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS DESIGN CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary VENTURE PACKAGING, INC. By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS TECHNICAL SERVICES, INC. By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary VENTURE PACKAGING MIDWEST, INC. By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary KNIGHT PLASTICS, INC. By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CPI HOLDING CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary CARDINAL PACKAGING, INC. By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS ACQUISITION CORPORATION II By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary BERRY PLASTICS ACQUISITION CORPORATION III By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary POLY-SEAL CORPORATION By: /s/ James M. Kratochvil ------------------------------------ James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary EXHIBIT A Name Principal Place of Business - --------------------------------------------- --------------------------------- Berry Plastics Corporation 101 Oakley Street Evansville, Indiana 47710 BPC Holding Corporation 101 Oakley Street Evansville, Indiana 47710 Berry Iowa Corporation 1036 Industrial Park Road Iowa Falls, Iowa 50126 Berry Tri-Plas Corporation 3414 Wesley Chapel-Stouts Road Monroe, NC 28110 Berry Sterling Corporation 101 Oakley Street Evansville, Indiana 47710 AeroCon, Inc. 101 Oakley Street Evansville, Indiana 47710 PackerWare Corporation 2330 Packer Road Lawrence, KS 66044 Berry Plastics Design Corporation 1401 Progress Road Suffolk, Virginia 23434 Venture Packaging, Inc. 311 W. Monroe Street Monroeville, OH 44847 Berry Plastics Technical Services, Inc. 1371 Chilicothe Road Aurora, OH 44202 Venture Packaging Midwest, Inc. 311 W. Monroe Street Monroeville, OH 44847 Knight Plastics, Inc. 1008 Courtaulds Drive Woodstock, Illinois 60098 CPI Holding Corporation 1275 Ethan Avenue Streetsboro, OH 44241 Cardinal Packaging, Inc. 1275 Ethan Avenue Streetsboro, OH 44241 Berry Plastics Acquisition Corporation II 101 Oakley Street Evansville, Indiana 47710 Berry Plastics Acquisition Corporation III 101 Oakley Street Evansville, Indiana 47710 Poly-Seal Corporation 1810 Portal Street Baltimore, Maryland 21224 EX-10.27 11 a2042389zex-10_27.txt EXHIBIT 10.27 ================================================================================ BPC HOLDING CORPORATION -------------------------- FIRST AMENDMENT Dated as of May 9, 2000 to Stockholders Agreement Dated as of June 18, 1996 -------------------------- ================================================================================ FIRST AMENDMENT TO STOCKHOLDERS AGREEMENT THIS FIRST AMENDMENT dated as of May 9, 2000 (the or this "FIRST AMENDMENT") to the Stockholders Agreement dated as of June 18, 1996 is among BPC HOLDING CORPORATION, a Delaware corporation (the "COMPANY"), ATLANTIC EQUITY PARTNERS INTERNATIONAL II, L.P., a Delaware limited partnership ("INTERNATIONAL"), CHASE VENTURE CAPITAL ASSOCIATES, LLC, a Delaware limited liability company ("CVCA"), THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY ("NORTHWESTERN") and BPC EQUITY, LLC, a Delaware limited liability company ("AETNA" or the "INSTITUTIONAL Holder"), and each of those other parties listed on the signature pages to this Agreement. RECITALS: A. The parties have heretofore entered into a Stockholders Agreement dated as of June 18, 1996 (the "AGREEMENT"). B. The parties now desire to amend the Agreement in the respects, but only in the respects, hereinafter set forth. C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the Agreement unless herein defined or the context shall otherwise require. D. All requirements of law have been fully complied with and all other acts and things necessary to make this First Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed. NOW, THEREFORE, the parties, in consideration of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, do hereby agree as follows: SECTION 1. AMENDMENTS. 1.1 All references in the Agreement to Preferred Stock, Warrants or Warrant Stock shall include Preferred Stock, Warrants and Warrant Stock, respectively, as defined in the Preferred Stock and Warrant Purchase Agreement dated as of May 9, 2000 by and among the Company, CVCA and Northwestern. 1.2 All references in the Agreement to Preferred Stock Control Event shall be deleted. SECTION 2. MISCELLANEOUS. 2.1 The First Amendment shall be construed in connection with and as part of the Agreement, and except as modified and expressly amended by this First Amendment, all terms, conditions and covenants contained in the Agreement are hereby ratified and shall be and remain in full force and effect. 2.3 The descriptive headings of the various Sections or parts of this First Amendment are for the convenience only and shall not affect the meaning or construction of any of the provisions hereof. 2.4 This First Amendment shall be governed by and construed in accordance with New York law. 2.5 The execution hereof by the undersigned shall constitute a contract among the undersigned for the uses and purposes hereinabove set forth, and this First Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement. 2 BPC HOLDING CORPORATION By: --------------------------------- Name: Title: HOLDERS: ATLANTIC EQUITY PARTNERS INTERNATIONAL II, L.P. By: Atlantic Equity Associates International II, L.P., its General Partner By: Buaron Holdings Ltd., its Managing General Partner By: ----------------------------- Name: Title: CHASE VENTURE CAPITAL ASSOCIATES, LLC By: Chase Capital Partners, its Investment Manager By: --------------------------------- Name: Title: THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY By: ------------------------------ Name: Title: 3 BPC EQUITY, LLC By: Aetna Life Insurance Company, its Member By: ----------------------------- Name: Title: -------------------------------- R. Brent Beeler -------------------------------- Douglas E. Bell -------------------------------- Ira G. Boots -------------------------------- Martin R. Imbler -------------------------------- James M. Kratochvil 4 EX-10.31 12 a2042389zex-10_31.txt EXHIBIT 10.31 FIRST AMENDMENT TO THIRD AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this "Amendment") is made effective as of the ___ day of July, 2000, by and among BERRY PLASTICS CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Borrower"), NIM HOLDINGS LIMITED, a company organized and existing under the laws of England and Wales ("NIM Holdings"), and BERRY PLASTICS UK LIMITED, a company organized and existing under the laws of England and Wales, formerly known as Norwich Injection Moulders Limited ("Berry UK"); BANK OF AMERICA, N.A., a national banking association, formerly known as NationsBank, N.A. ("Bank of America"), FLEET CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of Rhode Island ("Fleet"), GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of New York ("GE Capital"), as documentation agent, HELLER FINANCIAL, INC., a corporation organized and existing under the laws of the State of Delaware ("Heller"), PNC BANK, NATIONAL ASSOCIATION, a national banking association ("PNC"), and LASALLE BUSINESS CREDIT, INC., a corporation organized and existing under the laws of the State of Delaware ("LaSalle") (collectively, the "Lenders" and individually, a "Lender"); GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of New York, as documentation agent, and BANK OF AMERICA, N. A., a national banking association, in its capacity as both collateral and administrative agent for the Lenders (the "Agent") and as lead arranger; Witnesseth: RECITALS A. The Lenders, the Borrower, Berry UK, NIM Holdings and the Agent are parties to that certain Third Amended and Restated Financing and Security Agreement dated as of May 9, 2000 (as amended, restated, supplemented or otherwise modified, the "Credit Agreement"). Under and subject to the provisions of the Credit Agreement, the Lenders agreed to establish in favor of the Borrower, Berry UK and NIM Holdings certain revolving credit, letter of credit and term loan facilities. All capitalized terms used herein but not specifically defined herein shall have the meanings given such terms in the Credit Agreement. B. The Borrower has advised the Agent and the Lenders that the Borrower has acquired or intends to acquire a "shelf company" to be renamed Capsol-Berry Plastics, S.r.l., a limited liability company organized and existing under the laws of the Republic of Italy (the "Italian Holding Company"); the Italian Holding Company is or will be a Wholly Owned Subsidiary of the Borrower. The Italian Holding Company has acquired or intends to acquire all of the shares (the "Italian Target Stock") issued by (i) Capsol S.p.A. Stampaggio Resine Termoplastiche, a joint stock corporation organized under the laws of the Republic of Italy ("Capsol Italy") and (ii) Ociesse S.r.l. - Officina Costruzione Stampi - Lavorazioni Meccaniche di Precisione, a limited liability company organized under the laws of the Republic of Italy ("Ociesse") (Capsol Italy and Ociesse are herein collectively and individually referred to as the "Italian Target") in accordance with the provisions of that certain purchase or acquisition agreement by and among the existing shareholders of the Italian Target, the Italian Holding Company and the Borrower (as amended, restated, supplemented or otherwise modified, the "Italian Target Purchase Agreement"). The Borrower has advised the Agent and the Lenders that the Borrower does not expect to close and consummate the purchase of the Italian Target Stock on or before the date of this Amendment, but intends to proceed to close and consummate such purchase as soon as commercially practicable. C. The Borrower has applied to GE Capital for a term loan in a principal amount up to, but not exceeding, Twenty-five Million Dollars ($25,000,000 (the "GE Term Loan"). GE Capital has agreed to make the GE Term Loan to the Borrower in accordance with and subject to the terms and conditions of that certain Loan and Security Agreement dated the date hereof by and among the Borrower, GE Capital, in its capacity as a lender, and GE Capital, in its capacity as an agent (as amended, restated, supplemented or otherwise modified, the "GE Financing Agreement"). The Borrower has advised the Agent and the Lenders that the proceeds of the GE Term Loan are to be used to repay a portion of the outstanding Obligations under the Revolving Loan. D. The Borrower, Berry UK and NIM Holdings have requested that the Agent and the Lenders agree (i) to the GE Term Loan and the execution and delivery of the GE Financing Agreement, (ii) to consent to the acquisition of the Italian Holding Company and the acquisition of the Italian Target Stock by the Italian Holding Company in accordance with the terms and conditions of the Italian Target Purchase Agreement, and (iii) otherwise to amend certain terms and conditions of the Credit Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, Berry UK, NIM Holdings, the Lenders and the Agent hereby agree as follows: 1. The Borrower, Berry UK, and NIM Holdings hereby acknowledge and agree that the recitals set forth above are true and accurate in each and every respect and are incorporated herein by reference. The representations and warranties of the Borrower, Berry UK and NIM Holdings contained among the provisions of the Credit Agreement are true and correct as of the date of this Amendment (except that any such representations and warranties that are not qualified as to materiality need only be true and correct in all material respects) with the same effect as though such representations and warranties had been made as of such date, except that (i) the representations and warranties which relate to a specific date need only be true and correct as of such date and (ii) the representations and warranties which relate to financial statements which are referred to in Section 4.1.11 of the Credit Agreement, shall also be deemed to cover financial statements furnished from time to time to the Agent pursuant to Section 6.1.1 (Financial Statements) of the Credit Agreement. 2. The Credit Agreement is hereby amended as follows: (a) Section 1.1 beginning on page 3 of the Credit Agreement is hereby amended to add the following definitions: "BOFA PERMITTED CEILING" SHALL MEAN ONE HUNDRED EIGHTY MILLION -2- DOLLARS ($180,000,000), CALCULATED IN DOLLARS IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, AS REDUCED FROM TIME TO TIME BY (i) ANY PERMANENT REDUCTION IN THE TOTAL REVOLVING CREDIT COMMITTED AMOUNT AND/OR THE UK REVOLVING CREDIT COMMITTED AMOUNT AND (ii) ANY REDUCTION IN THE OUTSTANDING PRINCIPAL BALANCE OF THE TERM LOANS. THE AGENT AND THE LENDERS ACKNOWLEDGE AND AGREE THAT AS OF THE DATE OF THIS AGREEMENT, AS AMENDED, THE PRINCIPAL AMOUNT OF THE BOFA OBLIGATIONS IS LESS THAN ONE HUNDRED EIGHTY MILLION DOLLARS ($180,000,000); THE AGENT AND THE LENDERS UNDERSTAND AND AGREE, HOWEVER, THAT (a) THE TOTAL REVOLVING CREDIT COMMITTED AMOUNT AND/OR THE UK REVOLVING CREDIT COMMITTED AMOUNT MAY BE INCREASED AT ANY TIME AND FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND/OR (b) THE AGENT AND/OR ANY OR ALL OF THE LENDERS MAY AGREE TO PROVIDE ADDITIONAL CREDIT FACILITIES TO OR FOR THE BENEFIT OF THE ITALIAN HOLDING COMPANY AND/OR THE ITALIAN TARGET, ALL WITHOUT THE CONSENT OF THE GE AGENT OR THE GE LENDERS, PROVIDED THAT ANY SUCH INCREASES AND/OR ADDITIONAL FACILITIES DO NOT CAUSE THE PRINCIPAL AMOUNT OF THE OBLIGATIONS TO EXCEED THE BOFA PERMITTED CEILING. "BOFA TERMINATION DATE" HAS THE MEANING GIVEN SUCH TERM IN THE INTERCREDITOR AGREEMENT. "CAPSOL ITALY" MEANS CAPSOL S.P.A. STAMPAGGIO RESINE TERMOPLASTICHE, A JOINT STOCK CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE REPUBLIC OF ITALY, AND ITS SUCCESSORS AND ASSIGNS. "COLLATERAL AGENT" INITIALLY MEANS THE AGENT, IN ITS CAPACITY AS COLLATERAL AGENT FOR THE AGENT, THE LENDERS, THE GE AGENT AND THE GE LENDERS WITH RESPECT TO ANY AND ALL COLLATERAL AND SECURITY FOR THE OBLIGATIONS AND THE GE OBLIGATIONS. EFFECTIVE IMMEDIATELY ON THE BOFA TERMINATION DATE AND UPON THE REQUEST OF THE GE AGENT, THE GE AGENT SHALL SUCCEED THE AGENT AS THE COLLATERAL AGENT UNDER ANY AND ALL SECURITY DOCUMENTS WITHOUT FURTHER NOTICE TO, OR CONSENT OR AGREEMENT OF, THE BORROWER OR ANY OTHER PERSON. NOTWITHSTANDING THE FOREGOING, IF AT ANY TIME ANY PAYMENT, OR PORTION THEREOF, MADE BY, OR FOR THE ACCOUNT OF, THE BORROWER OR ANY OTHER PERSON ON ACCOUNT OF ANY OF THE OBLIGATIONS IS SET ASIDE BY ANY COURT OR TRUSTEE HAVING JURISDICTION AS A VOIDABLE PREFERENCE OR FRAUDULENT CONVEYANCE OR MUST OTHERWISE BE RESTORED OR RETURNED BY THE AGENT AND/OR ANY OF THE LENDERS TO THE BORROWER OR TO ANY OTHER PERSON UNDER ANY INSOLVENCY, BANKRUPTCY OR OTHER FEDERAL AND/OR STATE LAWS OR AS A RESULT OF ANY DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE BORROWER OR SUCH OTHER PERSON OR UPON, OR AS A RESULT OF, THE APPOINTMENT OF ANY RECEIVER, INTERVENOR OR CONSERVATOR OF, OR TRUSTEE, OR SIMILAR OFFICER FOR, THE BORROWER OR SUCH PERSON OR ANY SUBSTANTIAL PART OF ITS OR THEIR PROPERTIES OR ASSETS, THE PARTIES HERETO AGREE THAT THE AGENT SHALL BE REINSTATED AND SHALL CONTINUE AS THE COLLATERAL AGENT UNDER THE SECURITY DOCUMENTS ALL AS THOUGH SUCH PAYMENT(S) HAD NOT BEEN MADE. -3- "GE AGENT" MEANS THE PERSON DEFINED AS THE "AGENT" UNDER THE PROVISIONS OF THE GE FINANCING AGREEMENT AND SHALL ALSO INCLUDE ANY SUCCESSOR AGENT APPOINTED PURSUANT TO THE PROVISIONS OF THE GE FINANCING AGREEMENT. "GE FINANCING AGREEMENT" MEANS THAT CERTAIN LOAN AND SECURITY AGREEMENT DATED AS OF JULY __, 2000, BY AND AMONG THE BORROWER; GE CAPITAL, IN ITS CAPACITY AS A GE LENDER, AND EACH OTHER FINANCIAL INSTITUTION WHICH IS A GE LENDER UNDER THE GE FINANCING AGREEMENT; AND THE GE AGENT, AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED AT ANY TIME AND FROM TIME TO TIME. "GE FINANCING DOCUMENTS" MEANS THE "FINANCING DOCUMENTS" AS THAT TERM IS DEFINED IN THE GE FINANCING AGREEMENT. "GE LENDER" MEANS EACH "LENDER" UNDER THE TERMS OF THE GE FINANCING AGREEMENT; AND "GE LENDERS" MEANS ALL "LENDERS" UNDER THE TERMS OF THE GE FINANCING AGREEMENT. "GE OBLIGATIONS" MEANS THE "OBLIGATIONS" AS THAT TERM IS DEFINED IN THE GE FINANCING AGREEMENT. "GE TERM LOAN" MEANS THE TERM LOAN MADE BY THE GE LENDERS TO THE BORROWER IN A PRINCIPAL AMOUNT UP TO, BUT NOT EXCEEDING, TWENTY-FIVE MILLION DOLLARS ($25,000,000) PURSUANT TO THE TERMS AND CONDITIONS OF THE GE FINANCING AGREEMENT. "INTERCREDITOR AGREEMENT" MEANS THAT CERTAIN INTERCREDITOR AGREEMENT DATED AS OF JULY __, 2000 BY AND AMONG THE BORROWER, THE SUBSIDIARY GUARANTORS, THE AGENT, THE GE AGENT, THE GE LENDERS AND THE LENDERS, AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED. "ITALIAN HOLDING COMPANY" MEANS CAPSOL-BERRY PLASTICS, S.R.L., A LIMITED LIABILITY COMPANY ORGANIZED AND EXISTING UNDER THE LAWS OF THE REPUBLIC OF ITALY, AND ITS SUCCESSORS AND ASSIGNS. "ITALIAN TARGET" MEANS EACH OF CAPSOL ITALY AND OCIESSE, INDIVIDUALLY AND COLLECTIVELY, AND EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. "ITALIAN TARGET STOCK" MEANS ALL CAPITAL STOCK ISSUED BY EACH ITALIAN TARGET ACQUIRED OR TO BE ACQUIRED BY THE ITALIAN HOLDING COMPANY, IN ACCORDANCE WITH THE ITALIAN TARGET STOCK PURCHASE AGREEMENT, TOGETHER WITH ANY AND ALL PROCEEDS AND PRODUCTS THEREOF. "ITALIAN TARGET STOCK PURCHASE AGREEMENT" MEANS THAT CERTAIN SHARE AND QUOTA PURCHASE AGREEMENT TO BE ENTERED INTO BY AND AMONG THE BORROWER, THE ITALIAN HOLDING COMPANY AND THE SHAREHOLDERS OF THE ITALIAN -4- TARGET, AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED, TOGETHER WITH ANY AND ALL EXHIBITS AND SCHEDULES THERETO, AMENDMENTS, MODIFICATIONS AND SUPPLEMENTS THERETO, RESTATEMENTS THEREOF AND SUBSTITUTES THEREFOR. "ITALIAN TARGET STOCK PURCHASE DOCUMENTS" MEANS COLLECTIVELY THE ITALIAN TARGET STOCK PURCHASE AGREEMENT AND ANY AND ALL OTHER AGREEMENTS, DOCUMENTS OR INSTRUMENTS, PREVIOUSLY, NOW OR HEREAFTER EXECUTED AND DELIVERED BY THE BORROWER, THE ITALIAN HOLDING COMPANY, OR ANY OTHER PERSON IN CONNECTION WITH THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED AND MODIFIED. "ITALIAN TARGET STOCK PURCHASE TRANSACTION" MEANS THE ACQUISITION OF ALL OF THE ISSUED AND OUTSTANDING ITALIAN TARGET STOCK BY THE ITALIAN HOLDING COMPANY PURSUANT TO AND AS CONTEMPLATED BY THE ITALIAN TARGET STOCK PURCHASE AGREEMENT. "NORWICH" MEANS NORWICH ACQUISITION LIMITED, A COMPANY ORGANIZED AND EXISTING UNDER THE LAWS OF ENGLAND AND WALES, AND ITS SUCCESSORS AND ASSIGNS. "OCIESSE" MEANS OCIESSE S.R.L. - OFFICINA COSTRUZIONE STAMPI LAVORAZIONI MECCANICHE DI PRECISIONE, A LIMITED LIABILITY COMPANY ORGANIZED AND EXISTING UNDER THE LAWS OF THE REPUBLIC OF ITALY, AND ITS SUCCESSORS AND ASSIGNS. (b) The definition of "Cash Equivalents" on page 7 of the Credit Agreement is hereby amended to include the following: CASH EQUIVALENTS SHALL ALSO MEAN (a) SECURITIES WITH UNEXPIRED MATURITIES OF ONE YEAR OF LESS ISSUED OR FULLY GUARANTEED OR INSURED BY THE ITALIAN NATIONAL GOVERNMENT OR ANY AGENCY THEREOF AND (b) CERTIFICATES OF DEPOSIT WITH UNEXPIRED MATURITIES OF ONE (1) YEAR OR LESS OR MONEY MARKET INSTRUMENTS ISSUED BY THE LARGEST FINANCIAL INSTITUTION BASED IN THE REPUBLIC OF ITALY. (c) The definition of "Debt Service" on page 9 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "DEBT SERVICE" MEANS FOR ANY PERIOD OF DETERMINATION THEREOF AN AMOUNT EQUAL TO THE TOTAL OF THE AGGREGATE AMOUNT OF ALL PAYMENTS OF PRINCIPAL AND INTEREST WITH RESPECT TO INDEBTEDNESS FOR BORROWED MONEY OF THE BORROWER, THE SUBSIDIARY GUARANTORS, BERRY UK, NIM HOLDINGS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, AS APPROPRIATE, SCHEDULED TO BE DUE AND PAYABLE DURING SUCH PERIOD, EXCLUDING ANY TERM LOAN B MANDATORY PREPAYMENTS WITH RESPECT TO EXCESS CASH FLOW, ANY UK TERM LOAN MANDATORY PREPAYMENT WITH RESPECT TO UK EXCESS -5- CASH FLOW, AND ANY "TERM LOAN MANDATORY PREPAYMENT" (AS DEFINED IN THE GE FINANCING AGREEMENT) WITH RESPECT TO EXCESS CASH FLOW. (d) The definition of "Debt Service Coverage Ratio" on page 9 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "DEBT SERVICE COVERAGE RATIO" MEANS AS TO THE BORROWER, EACH OF THE SUBSIDIARY GUARANTORS, BERRY UK, NIM HOLDINGS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, ON A CONSOLIDATED BASIS, FOR ANY PERIOD OF DETERMINATION THEREOF THE RATIO OF (a) EBITDA TO (b) DEBT SERVICE. (e) The definition of "EBITDA" on pages 12 and 13 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "EBITDA" MEANS AS TO THE BORROWER, BERRY UK, NIM HOLDINGS, THE SUBSIDIARY GUARANTORS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, ON A CONSOLIDATED BASIS, AS OF ANY DATE OR FOR ANY PERIOD OF DETERMINATION, THE SUM OF (a) THE NET PROFIT (OR LOSS) DETERMINED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED, PLUS (b) INTEREST EXPENSE AND INCOME TAXES OR ALTERNATIVE MINIMUM TAXES FOR SUCH PERIOD TO THE EXTENT DEDUCTED IN THE CALCULATION OF NET INCOME (OR LOSS), PLUS (c) DEPRECIATION AND AMORTIZATION OF ASSETS FOR SUCH PERIOD, PLUS (d) UNUSUAL EXPENSES ASSOCIATED WITH THE WRITE-OFF OF THE CAPITALIZED PORTION OF FINANCING COSTS, MINUS (e) NON-CASH GAINS FROM ASSET SALES OTHER THAN SALES OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS, PLUS (f) NON-CASH LOSSES FROM ASSET SALES OTHER THAN SALES OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS, PLUS, (g) NON-CASH EXTRAORDINARY LOSSES, MINUS (h) EXTRAORDINARY GAINS, MINUS (i) INTEREST INCOME, MINUS (j) ANY GAIN RELATING TO THE ACCUMULATED EFFECT OF ANY CHANGE IN ACCOUNTING METHOD, PLUS (k) ANY LOSS RELATING TO THE ACCUMULATED EFFECT OF ANY CHANGE IN ACCOUNTING METHOD, EACH ITEM IN CLAUSES (a) THROUGH (k) CALCULATED PURSUANT TO GAAP FOR SUCH PERIOD, PLUS, (l) ANY NON-CASH COMPENSATION EXPENSES, MINUS, (m) ANY NON-CASH COMPENSATION GAINS., PLUS (n) UNUSUAL OR NONRECURRING NON-CASH LOSSES OR EXPENSES, PLUS (o) NON-RECURRING ACQUISITION-RELATED CASH EXPENSES UP TO $5,000,000 FOR FISCAL YEAR 2000 ONLY. IN CONNECTION WITH THE CALCULATION OF ANY FINANCIAL COVENANT PROVIDED IN SECTION 6.1.13 FOLLOWING THE CLOSING AND CONSUMMATION OF ANY PERMITTED ACQUISITION, EBITDA SHALL INCLUDE EACH SUBJECT TRANSACTION WHICH CONSTITUTES A PERMITTED ACQUISITION, WITH SUCH CALCULATION TO BE BASED ON A TWELVE (12) MONTH TRAILING PERIOD REFLECTING ACTUAL AND HISTORICAL PERFORMANCE OF THE SUBJECT TRANSACTION. (f) The definitions of "Fixed Charges", "Fixed Charge Coverage Ratio" and "Funded Debt" on pages 24 and 25 of the Credit Agreement are hereby deleted in their entirety and the following are substituted in their place: -6- "FIXED CHARGES" MEANS AS TO THE BORROWER, BERRY UK, NIM HOLDINGS, THE SUBSIDIARY GUARANTORS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, ON A CONSOLIDATED BASIS, FOR ANY PERIOD OF DETERMINATION, THE SCHEDULED PAYMENTS OF PRINCIPAL AND CASH INTEREST ON ACCOUNT OF ALL INDEBTEDNESS FOR BORROWED MONEY AND ON ACCOUNT OF ALL CAPITAL LEASES, PLUS CASH INCOME TAXES, PLUS CASH DIVIDENDS DECLARED OR PAID. "FIXED CHARGE COVERAGE RATIO" MEANS FOR ANY PERIOD OF DETERMINATION WITH RESPECT TO THE BORROWER, BERRY UK, NIM HOLDINGS, THE SUBSIDIARY GUARANTORS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, ON A CONSOLIDATED BASIS, THE RATIO OF (a) EBITDA, LESS THE AGGREGATE AMOUNT OF ALL NON-FINANCED CAPITAL EXPENDITURES FOR SUCH PERIOD, PLUS ALL CASH PROCEEDS FROM PERMITTED ASSET DISPOSITIONS TO THE EXTENT REINVESTED INTO FIXED OR CAPITAL ASSETS IF AND TO THE EXTENT PERMITTED BY THE PROVISIONS OF THIS AGREEMENT, TO (b) FIXED CHARGES. "FUNDED DEBT" MEANS AS TO THE BORROWER, BERRY UK, NIM HOLDINGS, EACH OF THE SUBSIDIARY GUARANTORS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, ON A CONSOLIDATED BASIS, AS OF ANY DATE OF DETERMINATION, (a) THE AGGREGATE OF ALL INDEBTEDNESS FOR BORROWED MONEY OF THE BORROWER, BERRY UK, NIM HOLDINGS, EACH OF THE SUBSIDIARY GUARANTORS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, WHETHER SECURED OR UNSECURED (BUT EXCLUDING, WITHOUT DUPLICATION, LOANS BY THE BORROWER TO ONE OR MORE OF THE SUBSIDIARY GUARANTORS, BERRY UK, NIM HOLDINGS, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE), HAVING A FINAL MATURITY (OR WHICH BY THE TERMS THEREOF IS RENEWABLE OR EXTENDIBLE AT THE OPTION OF THE OBLIGOR FOR A PERIOD ENDING) MORE THAN A YEAR AFTER THAT DATE, INCLUDING CURRENT MATURITIES OF LONG-TERM INDEBTEDNESS FOR BORROWED MONEY (AS DETERMINED IN ACCORDANCE WITH GAAP), LESS (b) THE AGGREGATE AMOUNT OF ALL CASH BALANCES AND CASH EQUIVALENTS OF THE BORROWER, BERRY UK, NIM HOLDINGS, ANY OF THE SUBSIDIARY GUARANTORS, AND/OR, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE. (g) The definition of "Financing Documents" on page 24 of the Financing Agreement and all defined terms included within the definition of Financing Documents are hereby amended to include any and all amendments to each and every Financing Document executed and delivered in connection with the closing and consummation of the GE Obligations and the grant of a subordinate Lien on, and security interest in, all assets and properties now or hereafter securing the Obligations, as security and collateral for the GE Obligations, subject to the terms of the Intercreditor Agreement. -7- (h) The definition of "GAAP" on page 26 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "GAAP" MEANS GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES OF AMERICA IN EFFECT FROM TIME TO TIME, EXCEPT THAT WITH RESPECT TO ANY SUBSIDIARY GUARANTOR WHICH IS NOT A DOMESTIC SUBSIDIARY, GAAP MEANS GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE JURISDICTION OF SUCH SUBSIDIARY'S FORMATION IN EFFECT FROM TIME TO TIME. NOTWITHSTANDING THE FOREGOING, WITH RESPECT TO (i) ANY FINANCIAL STATEMENTS WHICH CONSOLIDATE ANY FOREIGN SUBSIDIARY GUARANTOR WITH THE BORROWER OR ANY OTHER SUBSIDIARY GUARANTOR OR (ii) ANY FINANCIAL COVENANT RELATING TO ANY FOREIGN SUBSIDIARY, THE BORROWER AND/OR ANY SUBSIDIARY GUARANTOR ON A CONSOLIDATED BASIS, GAAP SHALL MEAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES OF AMERICA IN EFFECT FROM TIME TO TIME. (i) The definition of "Interest Coverage Ratio" on page 27 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "INTEREST COVERAGE RATIO" MEANS AS TO THE BORROWER, BERRY UK, NIM HOLDINGS, EACH OF THE SUBSIDIARY GUARANTORS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, ON A CONSOLIDATED BASIS, FOR ANY PERIOD OF DETERMINATION THEREOF THE RATIO OF (a) EBITDA TO (b) CASH INTEREST EXPENSE, ALL DETERMINED ON A CONSOLIDATED BASIS IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED. (j) Item (i) of the definition of "Permitted Acquisition" on pages 32 and page 33 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (i) THE AGGREGATE PURCHASE PRICE OF, INVESTMENT IN, ACQUISITION EXPENDITURES RELATING TO (EXCLUDING CUSTOMARY AND REASONABLE TRANSACTION COSTS) AND ASSUMED LIABILITIES IN CONNECTION WITH ANY SUCH SUBJECT TRANSACTION SHALL NOT EXCEED AT ANY TIME OR IN ANY CIRCUMSTANCE THE LESSER OF: (1) THE PRODUCT OF (A) THE ACTUAL EBITDA FOR (x) THE PERSON WHICH IS THE TARGET OF SUCH SUBJECT TRANSACTION OR (y) THE SELLER OR THE DIVISION OF THE SELLER OF THE ASSETS WHICH IS THE TARGET OF SUCH SUBJECT TRANSACTION, AS APPLICABLE, FOR THE THEN PRECEDING TWELVE (12) MONTH PERIOD AFTER GIVING EFFECT TO SUCH SUBJECT TRANSACTION (SUBJECT TO SUCH PRO-FORMA ADJUSTMENTS AS SHALL BE REASONABLY ACCEPTABLE TO THE AGENT IN ITS SOLE AND ABSOLUTE DISCRETION), AND (B) 5, EXCEPT THAT FOR THE ITALIAN TARGET, THE REQUIRED MULTIPLE SHALL BE 6.0, OR (2) TWENTY MILLION DOLLARS ($20,000,000) (EXCLUDING THE POLY-SEAL STOCK PURCHASE TRANSACTION), -8- (k) Item (vi) of the definition of "Permitted Acquisition" on page 33 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (vi) IF AND TO THE EXTENT THE SUBJECT TRANSACTION CONSISTS OF THE PURCHASE OR ACQUISITION OF A PERSON WHICH IS TO BE A SUBSIDIARY OF THE BORROWER OR ANOTHER SUBSIDIARY OF THE BORROWER OR MERGED INTO A SUBSIDIARY OF THE BORROWER CREATED FOR THE EXPRESS PURPOSE OF CONSUMMATING THE PROPOSED ACQUISITION: (1) THE BORROWER SHALL EXECUTE OR CAUSE ITS SUBSIDIARY TO EXECUTE ALL DOCUMENTS AND TAKE SUCH OTHER ACTIONS AS THE AGENT (AT ANY TIME ON OR BEFORE THE BOFA TERMINATION DATE AND, THEREAFTER, THE AGENT) MAY REASONABLY REQUIRE TO GRANT TO THE COLLATERAL AGENT A FIRST PRIORITY LIEN ON ONE HUNDRED PERCENT (100%) OF THE STOCK OF SUCH SUBSIDIARY FOR THE BENEFIT OF THE AGENT AND THE LENDERS AND TO GRANT TO THE COLLATERAL AGENT FOR THE BENEFIT OF THE GE AGENT AND THE GE LENDERS A SECOND PRIORITY LIEN ON ONE HUNDRED PERCENT (100%) OF THE STOCK OF SUCH SUBSIDIARY, EXCEPT THAT NO PLEDGE SHALL BE REQUIRED WITH RESPECT TO THE STOCK OF BERRY UK OR NORWICH AND NO PLEDGE SHALL BE REQUIRED WITH RESPECT TO THE STOCK OF ANY OTHER FOREIGN SUBSIDIARY IF SUCH PLEDGE WOULD RESULT IN A MATERIALLY ADVERSE TAX CONSEQUENCE FOR THE BORROWER UNDER THE INTERNAL REVENUE CODE OR WOULD VIOLATE APPLICABLE LAW, AND (2) SUCH SUBSIDIARY (OTHER THAN BERRY UK, NORWICH OR NIM HOLDINGS) SHALL BE DESIGNATED AND QUALIFY IMMEDIATELY AFTER THE CLOSING OF THE SUBJECT TRANSACTION AS A SUBSIDIARY GUARANTOR IN ACCORDANCE WITH THE TERMS OF SECTION 6.2.2 (SUBSIDIARIES), EXCEPT THAT A FOREIGN SUBSIDIARY SHALL NOT BE DESIGNATED OR REQUIRED TO QUALIFY AS A SUBSIDIARY GUARANTOR IF SUCH DESIGNATION WOULD RESULT IN A MATERIALLY ADVERSE TAX CONSEQUENCE FOR THE BORROWER UNDER THE INTERNAL REVENUE CODE OR VIOLATE APPLICABLE LAW, (l) Item (xii) of the definition of "Permitted Acquisition" on page 35 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (xii) THE AGGREGATE PURCHASE PRICE OF, INVESTMENT IN, ACQUISITION EXPENDITURES RELATING TO (EXCLUDING CUSTOMARY AND REASONABLE TRANSACTION COSTS) AND ASSUMED LIABILITIES IN CONNECTION WITH ALL SUBJECT TRANSACTIONS (EXCLUDING THE POLY-SEAL PURCHASE TRANSACTION) IN ANY FISCAL YEAR SHALL NOT EXCEED TWENTY MILLION DOLLARS ($20,000,000). (m) The definition of "Permitted Acquisition" is hereby amended to add the following subpart (xiii): (xiii) UNTIL SUCH TIME AS THE GE OBLIGATIONS HAVE BEEN PAID IN FULL, THE GE AGENT HAS CONSENTED TO THE SUBJECT TRANSACTION IN ACCORDANCE WITH -9- THE TERMS OF THE GE FINANCING AGREEMENT. (n) The definition of "Permitted Uses" is hereby amended to provide that proceeds of the Revolving Loan cannot be used to prepay the GE Term Loan. (o) The definition of "Requisite Lenders" on page 40 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "REQUISITE LENDERS" MEANS AT ANY TIME OF DETERMINATION ONE OR MORE OF THE LENDERS HOLDING AT LEAST FIFTY-ONE PERCENT (51%) OF THE COMMITMENTS; EXCEPT THAT UNTIL SUCH TIME AS THE GE TERM LOAN HAS BEEN PAID IN FULL, "REQUISITE LENDERS" MEANS AT ANY TIME OF DETERMINATION ONE OR MORE OF THE LENDERS AND/OR THE GE LENDERS HOLDING AT LEAST FIFTY-ONE PERCENT (51%) OF THE SUM OF (i) THE COMMITMENTS AND (ii) THE GE TERM LOANS, IN THE AGGREGATE. (p) The definition of "Stock Pledge Agreement" on page 43 of the Credit Agreement and the definition of "UK Stock Pledge Agreement" on page 49 are hereby amended to require that all of the Obligations be secured by a first priority pledge and assignment of one hundred percent (100%) of the capital stock of NIM Holdings. (q) The definition of "Stockholders Equity" on page 44 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "STOCKHOLDER'S EQUITY" MEANS AS TO THE BORROWER, BERRY UK, NIM HOLDINGS, EACH OF THE SUBSIDIARY GUARANTORS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, ON A CONSOLIDATED BASIS, FOR ANY DATE OF DETERMINATION THEREOF, THE TOTAL OF CAPITAL STOCK (EXCEPT TREASURY STOCK AND NET OF ANY NOTE RECEIVABLE RECEIVED UPON THE ISSUANCE OF ANY SHARES OF CAPITAL STOCK) AND CONTRIBUTED CAPITAL, AS DETERMINED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED, AFTER ELIMINATING ALL INTERCOMPANY ITEMS. (r) If and to the extent permitted by Italian law, "Subsidiary Guarantor" shall include the Italian Holding Company, Ociesse and Capsol Italy. For purposes of this Agreement, however, the Agent and the Lenders agree that none of the tangible or intangible assets or properties (excluding capital stock) of Capsol Italy, Ociesse and/or the Italian Holding Company located in the Republic of Italy shall be pledged to the Agent and/or the Lenders as collateral for any of the Obligations, except that if, with the consent of the Agent, any or all of the Lenders now or at any time hereafter make any loans, advances or other credit facilities available directly to Capsol Italy, Ociesse and/or the Italian Holding Company under the terms of this Agreement, any and all obligations, liabilities and indebtedness of Capsol Italy, Ociesse and/or the Italian Holding Company under and in connection with such loans, advances and/or other credit facilities may, at the Agent's reasonable request, be secured by a Lien on and security interest in any and all such assets and properties with a second priority Lien thereon to secure the GE Obligations. Upon consummation of the Italian Target Stock Purchase Transaction, if and to the extent permitted by Italian law, all of the Obligations shall be secured by a first priority -10- assignment, pledge and grant and all of the GE Obligations shall be secured by the grant to the Collateral Agent of a second priority assignment, pledge and grant of one hundred percent (100%) of the outstanding shares of capital stock now or at any time hereafter issued by Capsol Italy, Ociesse and/or the Italian Holding Company. If the Italian Holding Company, Ociesse and/or Capsol Italy are at any time deemed Subsidiary Guarantors, the Agent, the Lenders and the Borrower agree that the Italian Holding Company, Ociesse and/or Capsol Italy, as appropriate, shall also jointly and severally guaranty payment and performance of the GE Obligations to the extent permitted by Italian law. (s) The definition of "Tangible Capital Funds" on page 45 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "TANGIBLE CAPITAL FUNDS" MEANS AS TO THE BORROWER, BERRY UK, NIM HOLDINGS, EACH OF THE SUBSIDIARY GUARANTORS, AND, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, ON A CONSOLIDATED BASIS, FOR ANY DATE OF DETERMINATION THEREOF, THE TOTAL OF (a) ALL STOCKHOLDER'S EQUITY, LESS (b) ALL ASSETS WHICH WOULD BE CLASSIFIED AS INTANGIBLE ASSETS UNDER GAAP CONSISTENTLY APPLIED, PLUS (c) SUBORDINATED INDEBTEDNESS. (t) The definition of "UK Collateral" on page 47 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "UK COLLATERAL" MEANS THE COLLECTIVE REFERENCE TO ALL PROPERTY OF NIM HOLDINGS, BERRY UK AND NORWICH FROM TIME TO TIME TO SUBJECT TO THE LIENS OF THIS AGREEMENT, THE UK SECURITY DOCUMENTS AND THE OTHER FINANCING DOCUMENTS, TOGETHER WITH ANY AND ALL CASH AND NON-CASH PROCEEDS AND PRODUCTS THEREOF. (u) Section 2.1.12 on pages 58 and 59 of the Credit Agreement is hereby amended to the add the following additional provisions: IN ADDITION TO THE REQUIRED AVAILABILITY, THE BORROWER UNDERSTANDS AND AGREES THAT THE AGENT SHALL ESTABLISH AN ADDITIONAL FIXED RESERVE AGAINST AVAILABILITY UNDER THE REVOLVING LOAN IN AN AMOUNT EQUAL TO EIGHTEEN MILLION DOLLARS ($18,000,000) (THE "PERMITTED ACQUISITION REQUIRED AVAILABILITY"). THE AGENT AND THE LENDERS AGREE THAT UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION OR ANY OTHER PERMITTED ACQUISITION IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THE PERMITTED ACQUISITION REQUIRED AVAILABILITY SHALL BE ELIMINATED OR REDUCED, AS APPROPRIATE; PROVIDED AND TO THE EXTENT THAT THE ADDITIONAL AVAILABILITY UNDER THE REVOLVING LOAN RESULTING FROM THE ELIMINATION OR REDUCTION OF THE PERMITTED ACQUISITION REQUIRED AVAILABILITY IS USED BY THE BORROWER TO FINANCE, IN WHOLE OR IN PART, (a) THE ACQUISITION OF ONE HUNDRED PERCENT (100%) OF THE CAPITAL STOCK OF CAPSOL ITALY AND OCIESSE THROUGH THE ITALIAN TARGET STOCK PURCHASE TRANSACTION BY THE BORROWER, (b) THE PAYMENT OF ALL COSTS AND EXPENSES REASONABLY INCURRED IN CONNECTION WITH THE CLOSING AND CONSUMMATION OF THE ITALIAN STOCK PURCHASE TRANSACTION, (c) THE ACQUISITION OF ANY PERMITTED ACQUISITION AS AND TO THE EXTENT PERMITTED BY THE PROVISIONS OF THIS AGREEMENT, (d) THE PAYMENT OF ALL -11- COSTS AND EXPENSES REASONABLY INCURRED IN CONNECTION WITH THE CLOSING AND CONSUMMATION OF A PERMITTED ACQUISITION, AND (e) CAPITAL INVESTMENTS IN AND ADVANCES TO THE SUBJECT TRANSACTION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION OR ANY SUCH OTHER PERMITTED ACQUISITION, ALL TO THE EXTENT PERMITTED BY THE TERMS OF SECTION 6.2.5 OF THIS AGREEMENT. (v) Item (iv) of Section 2.2.3(a) on page 61 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (iv) THE SALE OF THE PROPERTY WHICH IS SUBJECT TO THE LIEN OF THE DEED OF TRUST - ARLINGTON HEIGHTS AND/OR THE SALE OF A PORTION OF THE PROPERTY WHICH IS SUBJECT TO THE LIEN OF THE DEED OF TRUST - EVANSVILLE; PROVIDED THAT SUCH SALE OR SALES CONSTITUTE A PERMITTED ASSET DISPOSITION. (w) Item (vii) of Section 2.9.2(c) on page 86 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (vii) THE BORROWER SHALL NOT BE ENTITLED TO SELECT THE LIBOR RATE AS THE APPLICABLE INTEREST RATE FOR ANY LOANS FOLLOWING AND DURING THE CONTINUANCE OF A DEFAULT OR AN EVENT OF DEFAULT (x) The Borrower covenants and agrees that all of the Obligations shall be secured by a first priority assignment, pledge and grant and all of the GE Obligations shall be secured by a second priority assignment, pledge and grant of one hundred percent (100%) of the outstanding shares of capital stock now or at any time hereafter issued by NIM Holdings. (y) Section 4.1.12 on page 109 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: 4.1.12 PRO-FORMA FINANCIAL STATEMENTS. THE BORROWER HAS FURNISHED TO THE AGENT A PRO-FORMA CONSOLIDATED BALANCE SHEET OF THE BORROWER AND THE SUBSIDIARIES AS OF THE END OF THE MOST RECENT FISCAL MONTH GIVING EFFECT TO THE ITALIAN TARGET STOCK PURCHASE TRANSACTION AND THE TRANSACTIONS INCIDENT THERETO (THE "PRO-FORMA BALANCE SHEET") TOGETHER WITH PRO-FORMA FINANCIAL PROJECTIONS OF THE PARENT FOR THE FIVE-YEAR PERIOD SUBSEQUENT TO THE ITALIAN TARGET STOCK PURCHASE TRANSACTION (THE "PRO-FORMA FINANCIAL PROJECTIONS"). A COPY OF THE PRO-FORMA BALANCE SHEET AND THE PRO-FORMA FINANCIAL PROJECTIONS ARE ATTACHED HERETO AS EXHIBITS C-1 AND C-2, RESPECTIVELY. THE PRO-FORMA BALANCE SHEET IS CORRECT AND COMPLETE, HAS BEEN PREPARED IN ACCORDANCE WITH GAAP, AND FAIRLY PRESENTS IN ALL MATERIAL RESPECTS THE CONSOLIDATED FINANCIAL CONDITION OF THE BORROWER AND THE SUBSIDIARIES AS OF THE END OF THE MOST RECENT FISCAL MONTH GIVING EFFECT TO THE ITALIAN TARGET STOCK PURCHASE TRANSACTION AND THE TRANSACTIONS INCIDENT THERETO. THE PRO-FORMA FINANCIAL PROJECTIONS REPRESENT THE BEST ESTIMATE OF THE FUTURE OPERATIONS OF THE PARENT (ASSUMING THE ITALIAN TARGET STOCK PURCHASE TRANSACTION IS CONSUMMATED) AND ARE BASED ON REASONABLE AND CONSERVATIVE ASSUMPTIONS, BUT DO NOT CONSTITUTE A GUARANTY OF ACTUAL PERFORMANCE. (z) Section 4.1.30 on pages 113 and 114 of the Credit Agreement is hereby amended to add the following provisions: -12- THE BORROWER HEREBY REPRESENTS AND WARRANTS THAT NEITHER (i) THE GE TERM LOAN NOR (ii) ANY TERMS AND CONDITIONS OF THE GE FINANCING AGREEMENT AND/OR ANY OF THE GE FINANCING DOCUMENTS, IS IN VIOLATION OF, NOR CONSTITUTES A DEFAULT UNDER, THE PROVISIONS OF THE INDENTURE. THE GE TERM LOAN CONSTITUTES "SENIOR INDEBTEDNESS" UNDER THE PROVISIONS OF THE INDENTURE. (aa) Section 4.1 of the Credit Agreement is hereby amended to add the following Section 4.1.31: 4.1.31 ITALIAN TARGET STOCK PURCHASE TRANSACTION AT THE TIME OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION IS CONSUMMATED, THE AGENT SHALL HAVE RECEIVED TRUE, CORRECT AND COMPLETE PHOTOCOPIES OF THE FULLY EXECUTED ITALIAN TARGET STOCK PURCHASE AGREEMENT AND EACH OF THE OTHER ITALIAN TARGET STOCK PURCHASE DOCUMENTS. AT SUCH TIME, NEITHER THE ITALIAN TARGET STOCK PURCHASE AGREEMENT NOR ANY OF THE OTHER ITALIAN TARGET STOCK PURCHASE DOCUMENTS WILL HAVE BEEN MODIFIED, CHANGED, SUPPLEMENTED, CANCELED, AMENDED OR OTHERWISE ALTERED, EXCEPT AS OTHERWISE DISCLOSED TO THE AGENT IN WRITING. AT SUCH TIME, THE ITALIAN TARGET STOCK PURCHASE TRANSACTION WILL HAVE BEEN EFFECTED, CLOSED AND CONSUMMATED PURSUANT TO, AND IN ACCORDANCE WITH, THE TERMS AND CONDITIONS OF THE ITALIAN TARGET STOCK PURCHASE AGREEMENT AND WITH ALL APPLICABLE LAWS. AS OF CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, EACH OF CAPSOL ITALY AND OCIESSE WILL BE A WHOLLY-OWNED SUBSIDIARY OF THE ITALIAN HOLDING COMPANY AND THE ITALIAN HOLDING COMPANY WILL BE A WHOLLY-OWNED SUBSIDIARY OF THE BORROWER. (bb) Section 6.1.13(a) on page 128 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (a) TANGIBLE CAPITAL FUNDS. THE BORROWER, BERRY UK, NIM HOLDINGS AND THE SUBSIDIARY GUARANTORS, ON A CONSOLIDATED BASIS, WILL ATTAIN A TANGIBLE CAPITAL FUNDS OF NOT LESS THAN THE FOLLOWING AMOUNTS AS OF THE FOLLOWING DATES: DATE AMOUNT ---- ------ JUNE 30, 2000 $80,000,000 SEPTEMBER 30, 2000 $83,000,000 DECEMBER 31, 2000 $85,000,000 MARCH 31, 2001 $87,000,000 JUNE 30, 2001 $92,500,000 SEPTEMBER 30, 2001 $98,000,000 DECEMBER 31, 2001 AND ALL $100,000,000 TIMES THEREAFTER THE AGENT AND THE LENDERS AGREE THAT IF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION IS CLOSED AND CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE -13- ITALIAN TARGET STOCK PURCHASE AGREEMENT, THE REQUIRED LEVEL OF TANGIBLE CAPITAL FUNDS FOR EACH MEASUREMENT PERIOD AFTER CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION SET FORTH ABOVE SHALL BE DECREASED BY TEN MILLION DOLLARS ($10,000,000) EFFECTIVE AS OF THE FIRST MEASUREMENT PERIOD FOLLOWING THE CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION. IN ADDITION, (i) IF THE AMOUNT OF ACTUAL GOODWILL ATTRIBUTED TO POLY-SEAL AT THE TIME OF CLOSING AND CONSUMMATION OF THE POLY-SEAL STOCK PURCHASE TRANSACTION EXCEEDS $27,000,000 (THE "EXCESS POLY-SEAL GOODWILL"), THE REQUIRED LEVELS OF TANGIBLE CAPITAL FUNDS SET FORTH ABOVE SHALL BE REDUCED BY THE AMOUNT OF SUCH EXCESS POLY-SEAL GOODWILL; ALTERNATIVELY, IF THE AMOUNT OF ACTUAL GOODWILL ATTRIBUTED TO POLY-SEAL AT THE TIME OF CLOSING AND CONSUMMATION OF THE POLY-SEAL STOCK PURCHASE TRANSACTION IS LESS THAN $27,000,000 (THE "DEFICIENCY POLY-SEAL GOODWILL"), THE REQUIRED LEVELS OF TANGIBLE CAPITAL FUNDS AS SET FORTH ABOVE SHALL BE INCREASED BY THE AMOUNT OF SUCH DEFICIENCY POLY-SEAL GOODWILL AND (ii) IF THE AMOUNT OF ACTUAL GOODWILL ATTRIBUTED TO CAPSOL ITALY AND/OR OCIESSE AT THE TIME OF CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION EXCEEDS $10,000,000 (THE "EXCESS ITALIAN GOODWILL"), THE REQUIRED LEVELS OF TANGIBLE CAPITAL FUNDS SET FORTH ABOVE SHALL BE REDUCED BY THE AMOUNT OF SUCH EXCESS ITALIAN GOODWILL; ALTERNATIVELY, IF THE AMOUNT OF ACTUAL GOODWILL ATTRIBUTED TO CAPSOL ITALY AND/OR OCIESSE AT THE TIME OF CLOSING AND CONSUMMATION OF THE ITALIAN STOCK PURCHASE TRANSACTION IS LESS THAN $10,000,000 (THE "DEFICIENCY ITALIAN GOODWILL"), THE REQUIRED LEVELS OF TANGIBLE CAPITAL FUNDS AS SET FORTH ABOVE SHALL BE INCREASED BY THE AMOUNT OF SUCH DEFICIENCY ITALIAN GOODWILL. (cc) Section 6.1.13(b) on pages 128 and 129 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (b) FUNDED DEBT TO EBITDA. THE BORROWER, BERRY UK, NIM HOLDINGS AND THE SUBSIDIARY GUARANTORS, ON A CONSOLIDATED BASIS, WILL NOT PERMIT THE RATIO OF (x) FUNDED DEBT TO (y) EBITDA, FOR THE PRIOR TWELVE (12) MONTH PERIOD, TO BE GREATER THAN THE FOLLOWING AMOUNTS AS OF THE FOLLOWING DATES: DATE AMOUNT ---- ------ JUNE 30, 2000 4.75 TO 1.00 SEPTEMBER 30, 2000 4.25 TO 1.00 DECEMBER 31, 2000 4.00 TO 1.00 MARCH 31, 2001 3.75 TO 1.00 JUNE 30, 2001 3.50 TO 1.00 SEPTEMBER 30, 2001 3.50 TO 1.00 DECEMBER 31, 2001 3.50 TO 1.00 AND THEREAFTER THE AGENT AND THE LENDERS AGREE THAT IF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION IS CLOSED AND CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE ITALIAN TARGET STOCK PURCHASE AGREEMENT, THE REQUIRED RATIO OF FUNDED DEBT TO -15- EBITDA FOR THE MEASUREMENT PERIODS ENDING JUNE 30, 2000, SEPTEMBER 30, 2000, AND DECEMBER 31, 2000 SHALL BE INCREASED BY .25, BUT ONLY IF AND TO THE EXTENT EACH SUCH MEASUREMENT PERIOD ENDS AFTER CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION. (dd) Section 6.1.13(c) on page 129 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (c) INTEREST COVERAGE RATIO. THE BORROWER, BERRY UK, NIM HOLDINGS AND THE SUBSIDIARY GUARANTORS WILL MAINTAIN, ON A CONSOLIDATED BASIS AND TESTED AS OF THE LAST DAY OF EACH FISCAL QUARTER IN EACH FISCAL YEAR, ON A ROLLING FOUR (4) QUARTER BASIS, AN INTEREST COVERAGE RATIO OF NOT LESS THAN THE FOLLOWING AMOUNTS AS OF THE FOLLOWING DATES: DATE RATIO ---- ----- JUNE 30, 2000 2.00 TO 1.00 SEPTEMBER 30, 2000 2.00 TO 1.00 DECEMBER 31, 2000 2.00 TO 1.00 MARCH 31, 2001 2.25 TO 1.00 JUNE 30, 2001 2.25 TO 1.00 SEPTEMBER 30, 2001 2.25 TO 1.00 DECEMBER 31, 2001 2.50 TO 1.00 AND THEREAFTER (ee) Section 6.1.13(d) on page 129 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (d) FIXED CHARGE COVERAGE RATIO. THE BORROWER, BERRY UK, NIM HOLDINGS AND THE SUBSIDIARY GUARANTORS WILL MAINTAIN, ON A CONSOLIDATED BASIS AND TESTED AS OF THE LAST DAY OF EACH FISCAL YEAR, A FIXED CHARGE COVERAGE RATIO OF NOT LESS THAN 1.00 TO 1.00. (ff) All references to "Subsidiary Guarantor" and/or "Subsidiary Guarantors" in Sections 3.3, 3.4.1, 3.4.2, 3.5, 3.6, 6.1.14, 6.1.16, 6.1.19, 6.1.20 and 6.1.21 of the Credit Agreement are hereby amended to refer to only those Subsidiary Guarantors which own Collateral. (gg) Section 6.1.17 on pages 130 and 131 of the Credit Agreement is hereby amended to add the words "THAT CONSTITUTES COLLATERAL" after the word "Inventory" in the fourth line of such Section. (hh) Section 6.2.1(c) on page 134 of the Credit Agreement is hereby amended to add the following item (iv): (iv) AMONG AND BETWEEN THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, (ii) Section 6.2.2 on pages 134 and 135 of the Credit Agreement is hereby amended to permit the acquisition of the Italian Holding Company, Capsol Italy and Ociesse; provided that (i) if and to the extent permitted by applicable Italian law, the Collateral Agent for -15- the benefit of the Agent and the Lenders is granted a first priority Lien on and assignment and the Collateral Agent for the benefit of the GE Agent and the GE Lenders is granted a second priority Lien on and assignment of one hundred percent (100%) of the shares of the Italian Holding Company and each of Capsol Italy and Ociesse and (ii) if and to the extent permitted by applicable Italian laws, the Italian Holding Company and each of Capsol Italy and Ociesse unconditionally and irrevocably and jointly and severally guaranty payment and performance of all of the Obligations and the GE Obligations. (jj) Section 6.2.4(i) on page 136 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (i) INDEBTEDNESS FOR BORROWED MONEY OF THE BORROWER TO ANY SUBSIDIARY GUARANTOR OR OF ANY SUBSIDIARY GUARANTOR TO THE BORROWER OR ANY OTHER SUBSIDIARY GUARANTOR AND INDEBTEDNESS FOR BORROWED MONEY OF BERRY UK, NIM HOLDINGS, NORWICH, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE TO THE BORROWER OR ANY OTHER DOMESTIC SUBSIDIARY GUARANTOR (THE "FOREIGN INTERCOMPANY INDEBTEDNESS"), PROVIDED THAT THE AGGREGATE AMOUNT OF SUCH FOREIGN INTERCOMPANY INDEBTEDNESS (EXCLUDING INTERCOMPANY ALLOCATIONS OF EXPENSES AND CHARGES), TOGETHER WITH ANY INVESTMENT BY THE BORROWER AND/OR ANY DOMESTIC SUBSIDIARY GUARANTOR IN BERRY UK, NIM HOLDINGS, NORWICH, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE PERMITTED BY THE TERMS OF THIS AGREEMENT, SHALL NOT EXCEED, IN THE AGGREGATE, FOUR MILLION DOLLARS ($4,000,000) AND PROVIDED FURTHER THAT ANY SUCH FOREIGN INTERCOMPANY INDEBTEDNESS SHALL BE PERMITTED WITH THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE ONLY IF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION IS CLOSED AND CONSUMMATED. NOTWITHSTANDING THE FOREGOING, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE $4,000,000 LIMITATION ON FOREIGN INTERCOMPANY INDEBTEDNESS SHALL BE INCREASED TO TWENTY-TWO MILLION DOLLARS ($22,000,000) IF AND TO THE EXTENT THE BORROWER MAKES LOANS AND ADVANCES TO THE ITALIAN HOLDING COMPANY TO FINANCE THE ITALIAN TARGET STOCK PURCHASE TRANSACTION; (kk) Section 6.2.5 on page 138 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: 6.2.5 INVESTMENTS, LOANS AND OTHER TRANSACTIONS. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE BORROWER, BERRY UK AND NIM HOLDINGS WILL NOT, AND WILL NOT PERMIT ANY OF ITS OR THEIR SUBSIDIARIES TO, (a) MAKE, ASSUME, ACQUIRE OR CONTINUE TO HOLD ANY INVESTMENT IN ANY REAL PROPERTY (UNLESS USED IN CONNECTION WITH THEIR BUSINESS) OR ANY PERSON, WHETHER BY STOCK PURCHASE, CAPITAL CONTRIBUTION, ACQUISITION OF INDEBTEDNESS OF SUCH PERSON OR OTHERWISE (INCLUDING, WITHOUT LIMITATION, INVESTMENTS IN ANY JOINT VENTURE OR PARTNERSHIP), EXCEPT FOR (i) PERMITTED ACQUISITIONS, (ii) REPLACEMENTS OF ASSETS WHICH ARE THE SUBJECT OF A PERMITTED ASSET DISPOSITION MADE PURSUANT TO CLAUSE (f) OF THE DEFINITION OF PERMITTED ASSET DISPOSITION, (iii) THOSE INVESTMENTS EXISTING AS OF THE CLOSING DATE AND REFLECTED ON THE FINANCIAL STATEMENTS FURNISHED PURSUANT TO SECTION 4.1.11 -16- (FINANCIAL CONDITION), (iv) ANY INVESTMENTS IN CASH EQUIVALENTS, WHICH, IF REQUESTED BY THE COLLATERAL AGENT, ARE PLEDGED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF THE AGENT AND THE LENDERS, AS COLLATERAL AND SECURITY FOR THE OBLIGATIONS, (v) THOSE INVESTMENTS MORE PARTICULARLY SET FORTH IN SCHEDULE 6.2.5 ATTACHED HERETO AND MADE A PART HEREOF (THE "PERMITTED INVESTMENTS"), (vi) THE ACQUISITION, CREATION OR OWNERSHIP OF ANY SUBSIDIARY GUARANTOR BY THE BORROWER, NIM HOLDINGS AND/OR BERRY UK, INCLUDING, THE EXISTING OR ADDITIONAL CAPITAL CONTRIBUTIONS (INCLUDING PURCHASES OF EQUITY SECURITIES) IN ANY SUCH SUBSIDIARY GUARANTOR, (vii) THE BORROWER'S ACQUISITION, CREATION AND OWNERSHIP OF NIM HOLDINGS AND THE ITALIAN HOLDING COMPANY AND ANY EXISTING OR ADDITIONAL CAPITAL CONTRIBUTIONS IN BERRY UK, NIM HOLDINGS, THE ITALIAN HOLDING COMPANY, CAPSOL AND OCIESSE; PROVIDED THAT THE AGGREGATE AMOUNT OF ANY SUCH EXISTING OR ADDITIONAL CAPITAL CONTRIBUTIONS, TOGETHER WITH ANY FOREIGN INTERCOMPANY INDEBTEDNESS (EXCLUDING INTERCOMPANY ALLOCATIONS OF EXPENSES AND CHARGES) PERMITTED BY THE TERMS OF THIS AGREEMENT, MAY NOT EXCEED AT ANY TIME IN THE AGGREGATE FOUR MILLION DOLLARS ($4,000,000) (WHICH AMOUNT, UPON CLOSING AND CONSUMMATION OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION SHALL BE INCREASED TO TWENTY-TWO MILLION DOLLARS ($22,000,000) IF AND TO THE EXTENT THE BORROWER MAKES LOANS AND ADVANCES TO THE ITALIAN HOLDING COMPANY TO FINANCE THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, (viii) THE RECEIPT OF INDEBTEDNESS FOR BORROWED MONEY BY THE BORROWER, BERRY UK, NIM HOLDINGS OR ANY SUBSIDIARY GUARANTOR WHICH REPRESENTS PAYMENT TO THE BORROWER, BERRY UK, NIM HOLDINGS OR A SUBSIDIARY GUARANTOR, AS THE CASE MAY BE, OF A PORTION OF THE PURCHASE PRICE PAYABLE TO THE BORROWER, BERRY UK, NIM HOLDINGS OR SUCH SUBSIDIARY GUARANTOR IN CONNECTION WITH A PERMITTED ASSET DISPOSITION; PROVIDED THAT, UPON THE COLLATERAL AGENT'S DEMAND, THE BORROWER, BERRY UK, NIM HOLDINGS AND/OR THE SUBSIDIARY GUARANTOR, AS THE CASE MAY, SHALL TAKE ALL SUCH ACTIONS AS SHALL BE REASONABLY REQUESTED BY THE COLLATERAL AGENT TO GRANT TO THE COLLATERAL AGENT FOR THE BENEFIT OF THE AGENT AND THE LENDERS, A PERFECTED LIEN ON ANY SUCH INDEBTEDNESS FOR BORROWED MONEY AND PROVIDED FURTHER THAT THE PRINCIPAL AMOUNT OF ALL SUCH INDEBTEDNESS FOR BORROWED MONEY SHALL NOT EXCEED AT ANY TIME IN THE AGGREGATE FIVE HUNDRED THOUSAND DOLLARS ($500,000), (ix) INVESTMENTS PERMITTED BY SECTION 6.2.1 (CAPITAL STRUCTURE), (x) INDEBTEDNESS FOR BORROWED MONEY PERMITTED BY SECTION 6.2.4(i), AND (xi) THE RECEIPT OF SECURITIES IN CONNECTION WITH THE SETTLEMENT OF CLAIMS AGAINST ANY CUSTOMER, SUPPLIER OR VENDOR OR AS A RESULT OF THE BANKRUPTCY OF ANY SUCH CUSTOMER, SUPPLIER OR VENDOR; PROVIDED THAT THE COLLATERAL AGENT SHALL BE GRANTED A PERFECTED FIRST PRIORITY LIEN ON ANY SUCH SECURITIES WITH RESPECT TO THE OBLIGATIONS, (b) GUARANTY OR OTHERWISE BECOME CONTINGENTLY LIABLE FOR THE INDEBTEDNESS OR OBLIGATIONS OF ANY PERSON, EXCEPT THAT THE BORROWER, BERRY UK, NIM HOLDINGS AND ANY SUBSIDIARY GUARANTOR SHALL BE PERMITTED TO GUARANTY (i) ANY INDEBTEDNESS FOR BORROWED MONEY OF THE BORROWER, ANY SUBSIDIARY GUARANTOR, BERRY UK, NIM HOLDINGS, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY OR OCIESSE OTHERWISE PERMITTED BY THE PROVISIONS OF SECTION 6.2.4 (INDEBTEDNESS), (ii) THE ENDORSEMENT OF NEGOTIABLE INSTRUMENTS FOR DEPOSIT OR COLLECTION OR SIMILAR TRANSACTIONS IN THE ORDINARY -17- COURSE OF BUSINESS, (iii) THE OBLIGATIONS OF THE BORROWER UNDER THE SUBORDINATED DEBT AND THE SENIOR SECURED DEBT, (iv) THE OBLIGATIONS AND (v) THE GE OBLIGATIONS, OR (c) MAKE ANY LOANS OR ADVANCES, OR OTHERWISE EXTEND CREDIT TO ANY PERSON, EXCEPT (i) ANY ADVANCE TO AN OFFICER OR EMPLOYEE OF THE BORROWER, BERRY UK, NIM HOLDINGS OR ANY SUBSIDIARY FOR TRAVEL OR OTHER BUSINESS EXPENSES IN THE ORDINARY COURSE OF BUSINESS, PROVIDED THAT THE AGGREGATE AMOUNT OF ALL SUCH ADVANCES BY ALL OF THE BORROWER, BERRY UK, NIM HOLDINGS AND ITS SUBSIDIARIES (TAKEN AS A WHOLE) OUTSTANDING AT ANY TIME SHALL NOT EXCEED FIVE HUNDRED THOUSAND DOLLARS ($500,000), (ii) TRADE CREDIT EXTENDED TO CUSTOMERS IN THE ORDINARY COURSE OF BUSINESS, (iii) ORDINARY COURSE ADVANCES TO CUSTOMERS IN CONNECTION WITH THE PRODUCTION OF MOLDS AND RELATED MATERIALS, AND (iv) ORDINARY COURSE WORKING CAPITAL ADVANCES AND LOANS TO AND FROM THE BORROWER, BERRY UK AND/OR NIM HOLDINGS TO ANY GUARANTOR AND TO AND FROM ANY GUARANTOR TO THE BORROWER OR ANY OTHER GUARANTOR. (ll) Section 6.2.10 on pages 140 and 141 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: 6.2.10 TRANSACTIONS WITH AFFILIATES. NEITHER THE BORROWER, BERRY UK, NIM HOLDINGS NOR ANY OF ITS OR THEIR SUBSIDIARIES WILL ENTER INTO ANY TRANSACTION WITH ANY AFFILIATE EXCEPT IN THE ORDINARY COURSE OF BUSINESS, IN EACH CASE, UPON TERMS NO LESS FAVORABLE TO THE BORROWER, BERRY UK, NIM HOLDINGS OR ANY SUBSIDIARY THAN WOULD BE OBTAINED IN AN ARMS-LENGTH, THIRD PARTY TRANSACTION. THE FOREGOING PROVISION SHALL NOT RESTRICT (a) ANY EMPLOYMENT AGREEMENT ENTERED INTO BY THE BORROWER OR ANY OF ITS SUBSIDIARIES IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH THE PAST PRACTICES OF THE BORROWER AND/OR ANY SUCH SUBSIDIARY, (b) TRANSACTIONS BETWEEN OR AMONG THE BORROWER AND/OR THE SUBSIDIARY GUARANTORS, (c) TRANSACTIONS BETWEEN FIRST ATLANTIC CAPITAL, LTD. ("FIRST ATLANTIC"), PURSUANT TO THE SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT DATED AS OF JUNE 18, 1996, AS AMENDED TO THE DATE HEREOF OR OTHERWISE AMENDED WITH THE AGENT'S PRIOR WRITTEN CONSENT (SOLELY FOR PURPOSES OF THIS SECTION 6.2.10) BETWEEN THE BORROWER AND FIRST ATLANTIC, (d) THE PAYMENT OF DISTRIBUTIONS PERMITTED BY SECTION 6.2.3 (PURCHASE OR REDEMPTION OF SECURITIES), (e) ANY TRANSACTION FEE PAYABLE TO FIRST ATLANTIC NOT TO EXCEED $1,250,000 PER TRANSACTION AND (f) INTERCOMPANY INVESTMENTS AND LOANS BETWEEN AND AMONG THE BORROWER, BERRY UK, NIM HOLDINGS, THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, AS AND TO THE EXTENT PERMITTED BY THE PROVISIONS OF THIS AGREEMENT. (mm) Section 6.2.13 on page 141 of the Credit Agreement is hereby amended to add the following provisions: THE BORROWER, BERRY UK AND NIM HOLDINGS UNDERSTAND AND AGREE THAT THE REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS AND EVENTS OF DEFAULT AS SET FORTH IN THE GE AGREEMENT AND IN THE GE FINANCING DOCUMENTS ARE INTENDED TO BE SUBSTANTIALLY SIMILAR TO THE REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS AND EVENTS OF DEFAULT CONTAINED IN THIS AGREEMENT AND THE FINANCING DOCUMENTS. THE BORROWER, BERRY UK AND NIM HOLDINGS -18- ACKNOWLEDGE AND AGREE THAT TO THE EXTENT ANY DETERMINATION, CONSENT, AMENDMENT OR WAIVER WITH RESPECT TO ANY TERMS OR CONDITIONS OF THIS AGREEMENT IS GIVEN, OBTAINED OR APPROVED IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, SUCH DETERMINATION, CONSENT, AMENDMENT OR WAIVER SHALL BE CONSIDERED BINDING UPON THE GE AGENT, THE GE LENDERS AND THE BORROWER FOR PURPOSES OF THE GE FINANCING AGREEMENT AND THE GE FINANCING DOCUMENTS AND SHALL BE DEEMED MADE, OBTAINED OR GIVEN, AS APPROPRIATE, BY THE GE AGENT, THE GE LENDERS AND/OR THE BORROWER WITH RESPECT TO THE SIMILAR OR SUBSTANTIALLY SIMILAR TERM, CONDITION OR EVENT CONTAINED IN OR RELATING TO THE GE AGREEMENT AND/OR IN ANY OF THE GE FINANCING DOCUMENTS; PROVIDED THAT UNTIL SUCH TIME AS THE GE TERM LOANS HAVE BEEN PAID IN FULL THE DEFINITION OF "REQUISITE LENDERS" CONTAINED IN THIS AGREEMENT HAS BEEN AMENDED TO INCLUDE THE GE LENDERS AND THE LENDERS AS A COMBINED VOTING GROUP, AS SET FORTH IN THE DEFINITION OF "REQUISITE LENDERS" IN THIS AGREEMENT, SUCH THAT ANY CONSENT, DETERMINATION, AMENDMENT OR WAIVER REQUIRING THE CONSENT OF THE REQUISITE LENDERS WOULD TAKE INTO ACCOUNT THE VOTES OF THE GE LENDERS AS PART OF THE LARGER GROUP INCLUDING THE LENDERS AND THE GE LENDERS. NOTWITHSTANDING THE FOREGOING, UNDER NO CIRCUMSTANCES SHALL THE GE AGENT OR THE GE LENDERS BE DEEMED TO HAVE CONSENTED OR APPROVED ANY MATTER REQUIRING THE CONSENT OF ALL GE LENDERS SET FORTH IN SECTION 8.12 OF THE GE FINANCING AGREEMENT OR THE CONSENT OF THE GE AGENT AS SET FORTH IN SECTION 9.2 OF THE GE FINANCING AGREEMENT, REGARDLESS IF SUCH MATTER HAS RECEIVED THE CONSENT OR APPROVAL OF THE AGENT AND/OR ALL OR ANY PORTION OF THE LENDERS. THE BORROWER COVENANTS AND AGREES NOT TO AMEND OR AGREE TO AMEND THE GE FINANCING AGREEMENT AND/OR ANY OF THE GE FINANCING DOCUMENTS TO THE EXTENT CONTRARY TO OR INCONSISTENT WITH THE FOREGOING PROVISIONS. (nn) The last paragraph of Section 8.8.1 on page 155 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: IN ADDITION DURING ANY FISCAL YEAR OF THE BORROWER (x) THE COLLATERAL AGENT MAY RELEASE COLLATERAL HAVING A BOOK VALUE OF NOT MORE THAN 5% OF THE BOOK VALUE OF ALL COLLATERAL, (y) THE COLLATERAL AGENT, WITH THE CONSENT OF THE REQUISITE LENDERS, MAY RELEASE COLLATERAL HAVING A BOOK VALUE OF NOT MORE THAN 25% OF THE BOOK VALUE OF ALL COLLATERAL OR (z)(1) THE COLLATERAL AGENT, WITH THE CONSENT OF THE LENDERS AND THE GE LENDERS HOLDING, IN THE AGGREGATE, AT LEAST 90% OF (i) THE COMMITMENTS AND (ii) THE GE TERM LOAN OR, (2) THE COLLATERAL AGENT, WITH THE CONSENT OF ALL OF THE LENDERS (EXCLUDING ANY LENDER WHICH IS ALSO A GE LENDER) MAY RELEASE ITS LIEN ON ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL (AND IN CONNECTION THEREWITH MAY RELEASE, TERMINATE AND DISCHARGE ANY FINANCING DOCUMENT RELATING TO SUCH COLLATERAL AND/OR THE OBLIGATIONS AND LIABILITIES OF ANY GUARANTOR IN CONNECTION WITH A SALE OF THE BORROWER AND/OR ANY GUARANTOR AND/OR A SALE OF ALL OR SUBSTANTIALLY ALL OF ITS OR THEIR ASSETS); PROVIDED THAT EITHER (i) THE COLLATERAL AGENT HAS OBTAINED A THIRD-PARTY APPRAISAL OR VALUATION (WHICH MAY BE A FAIRNESS VALUATION) OF ALL OF THE COLLATERAL OR OF ONLY THE COLLATERAL BEING RELEASED, HAS FURNISHED A COPY OF SUCH APPRAISAL OR VALUATION TO THE GE AGENT AND HAS DETERMINED IN GOOD FAITH THAT (A) IN THE CASE OF AN APPRAISAL OR VALUATION OF ALL OF THE COLLATERAL, THE ORDERLY -19- OR FORCED SALE LIQUIDATION VALUE (AS APPLICABLE OR WHICHEVER IS APPROPRIATE AS DETERMINED BY THE COLLATERAL AGENT IN GOOD FAITH), OF SUCH COLLATERAL BASED ON SUCH APPRAISAL OR VALUATION (AFTER DEDUCTING THE ACTUAL AND ANTICIPATED COSTS AND EXPENSES OF LIQUIDATION) IS OR WOULD BE INSUFFICIENT TO ALLOW FOR PAYMENT OF THE OBLIGATIONS IN FULL AND/OR TO RESULT IN ANY SURPLUS PAYMENT WHICH WOULD OR COULD BE AVAILABLE FOR PAYMENT OF THE GE OBLIGATIONS OR (B) IN THE CASE OF AN APPRAISAL OR VALUATION OF LESS THAN ALL OF THE COLLATERAL, THE COLLATERAL BEING RELEASED IS SOLD FOR AN AMOUNT AT LEAST EQUAL TO THE VALUE ESTABLISHED BY SUCH THIRD PARTY APPRAISAL OR VALUATION, OR (ii) THE COLLATERAL IS SOLD OR TO BE SOLD BY OR ON BEHALF OF THE BORROWER, ANY SUBSIDIARY GUARANTOR AND/OR THE COLLATERAL AGENT AT A COMMERCIALLY REASONABLE, PUBLIC AUCTION OR AN "AUCTION STYLE" PRIVATE SALE ARRANGED OR BROKERED BY A THIRD PARTY (SUCH AS AN INVESTMENT BANKER); AND PROVIDED FURTHER THAT SUCH RELEASE IS NOT PURSUANT TO, OR REQUIRED IN CONNECTION WITH, DEBTOR-IN-POSSESSION FINANCING. NOTWITHSTANDING THE FOREGOING, AT ANY TIME ON OR BEFORE THE BOFA TERMINATION DATE AND PURSUANT TO OR IN CONNECTION WITH ANY DEBTOR-IN-POSSESSION FINANCING PROVIDED TO THE BORROWER AND/OR ANY OR ALL OF THE SUBSIDIARY GUARANTORS, THE COLLATERAL AGENT, SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT, MAY RELEASE OR SUBORDINATE ITS LIEN ON ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL (AND IN CONNECTION THEREWITH RELEASE, TERMINATE OR DISCHARGE ANY FINANCING DOCUMENT RELATING TO SUCH COLLATERAL AND/OR THE OBLIGATIONS AND LIABILITIES OF ANY GUARANTOR). (oo) Section 8.13 on page 158 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: SECTION 8.13 CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED; DEEMED CONSENT OF ANY LENDER WHICH IS A GE LENDER. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, NO AMENDMENT, MODIFICATION, CHANGE OR WAIVER SHALL BE EFFECTIVE WITHOUT THE CONSENT OF ALL OF THE LENDERS (BUT ONLY THE CONSENT OF ALL LENDERS PARTY TO THIS AGREEMENT AS OF THE CLOSING DATE SHALL BE REQUIRED WITH RESPECT TO ITEM (i) BELOW) TO: (a) INCREASE THE PRINCIPAL AMOUNT OF ANY OF THE COMMITMENTS, EXCEPT THAT ANY OR ALL OF THE LENDERS MAY INCREASE THE PRINCIPAL AMOUNT OF ANY OF THEIR RESPECTIVE COMMITMENTS WITHOUT THE CONSENT OF ANY LENDER WHICH IS A GE LENDER; PROVIDED THAT (i) ALL OF THE LENDERS, EXCLUDING THE GE LENDERS, HAVE CONSENTED TO SUCH INCREASE AND (ii) THE TOTAL PRINCIPAL AMOUNT OF ALL COMMITMENTS AFTER TAKING INTO ACCOUNT ANY PROPOSED INCREASE IN THE PRINCIPAL AMOUNT OF ANY COMMITMENT SHALL NOT EXCEED THE "PERMITTED BOFA CEILING" (AS DEFINED IN THE INTERCREDITOR AGREEMENT); (b) EXTEND THE MATURITY OR DUE DATE OF PAYMENT OF PRINCIPAL, INTEREST OR FEES ON ACCOUNT OF THE OBLIGATIONS, INCLUDING THE -20- UK OBLIGATIONS; (c) REDUCE THE PRINCIPAL AMOUNT OF ANY OBLIGATIONS, THE RATE OF INTEREST ON ANY OF THE OBLIGATIONS OR ANY FEES PAYABLE, EXCEPT AS EXPRESSLY PERMITTED THEREIN; (d) CHANGE THE METHOD OF CALCULATION UTILIZED IN CONNECTION WITH THE COMPUTATION OF INTEREST AND FEES; (e) CHANGE THE MANNER OF PRO RATA APPLICATION BY THE AGENT OR BANK OF AMERICA OF PAYMENTS MADE BY THE BORROWER, BERRY UK OR NIM HOLDINGS OR ANY OTHER PAYMENTS REQUIRED HEREUNDER OR UNDER THE OTHER FINANCING DOCUMENTS; (f) MODIFY THIS SECTION OR THE DEFINITION OF "REQUISITE LENDERS" (IN ADDITION, SECTION 8.8 SHALL NOT BE MODIFIED WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUISITE LENDERS AND THE "REQUISITE TERM LOAN LENDERS" (AS DEFINED IN THE GE FINANCING AGREEMENT); (g) RELEASE ANY MATERIAL PORTION OF ANY COLLATERAL (INCLUDING ANY UK COLLATERAL), ANY GUARANTOR OR ANY FINANCING DOCUMENT, EXCEPT TO THE EXTENT PROVIDED IN SECTION 8.8 OF THIS AGREEMENT; (h) INCREASE THE ADVANCE RATES FOR ANY COMPONENT OF THE BORROWING BASE OR THE UK BORROWING BASE ABOVE THE LEVELS SPECIFIED IN THIS AGREEMENT, EXCEPT THAT THE ADVANCE RATES AGAINST ELIGIBLE DOMESTIC RECEIVABLES AND/OR ELIGIBLE UK RECEIVABLES MAY BE INCREASED UP TO A LEVEL OF 90% AND THE ADVANCE RATES AGAINST ELIGIBLE DOMESTIC INVENTORY AND/OR ELIGIBLE UK INVENTORY MAY BE INCREASED UP TO A LEVEL OF 75% WITHOUT THE PRIOR CONSENT OF ANY LENDER WHICH IS A GE LENDER; PROVIDED THAT ALL OF THE LENDERS, EXCLUDING THE GE LENDERS, HAVE CONSENTED TO ANY SUCH INCREASE; (i) MODIFY, WAIVE OR OTHERWISE CHANGE THE REQUIREMENTS OF SECTION 2.1.12, EXCEPT THAT THE REQUIREMENTS OF SECTION 2.1.12 MAY BE MODIFIED, WAIVED OR OTHERWISE CHANGED WITHOUT THE PRIOR CONSENT OF ANY LENDER WHICH IS A GE LENDER; PROVIDED THAT (i) ALL OF THE LENDERS, EXCLUDING THE GE LENDERS, CONSENT TO ANY SUCH MODIFICATION, WAIVER OR OTHER CHANGE AND (ii) UNDER NO CIRCUMSTANCES SHALL THE REQUIRED AVAILABILITY BE LESS THAN FIVE MILLION DOLLARS ($5,000,000). FOR PURPOSES OF THIS SECTION 8.13, EACH LENDER WHICH IS ALSO A GE LENDER SHALL BE DEEMED TO HAVE CONSENTED TO EACH AMENDMENT, MODIFICATION, CHANGE OR WAIVER APPROVED BY ALL OTHER LENDERS IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 8.13 IF AND TO THE EXTENT THE TERMS OF THIS SECTION 8.13 DO NOT REQUIRE THE CONSENT OF ANY LENDER -21- WHICH IS A GE LENDER TO ANY SUCH AMENDMENT, MODIFICATION, CHANGE OR WAIVER. (pp) Section 9.5 on page 163 of the Credit Agreement is hereby amended to permit GE Capital to sell and assign a portion of its Commitments and Obligations under the Credit Agreement in an aggregate amount up to Twenty Million Dollars ($20,000,000) to one or more Persons without the prior consent of the Agent, but, if no Default or Event of Default has occurred and is continuing, with the prior written consent of the Borrower, which consent shall not be unreasonably withheld, delayed or conditioned. (qq) Notwithstanding any provision in the Credit Agreement or in any of the Financing Documents to the contrary, but subject to the terms and conditions of the Intercreditor Agreement, all Liens and security interests granted to the Agent in the Credit Agreement and/or in any and all of the Financing Documents shall be deemed to have been granted to the Agent, in its capacity as Collateral Agent for the Agent, the Lenders, the GE Agent and the GE Lenders. The Borrower, Berry UK, NIM Holdings agree that effective immediately on the BofA Termination Date, the GE Agent shall succeed the Agent as the Collateral Agent under the Credit Agreement and under each of the Financing Documents, without further notice to, or consent or agreement of, the Borrower, Berry UK, NIM Holdings or any other Person. Notwithstanding the foregoing, if at any time any payment, or portion thereof, made by, or for the account of, the Borrower or any other Person on account of any of the Obligations is set aside by any court or trustee having jurisdiction as a voidable preference or fraudulent conveyance or must otherwise be restored or returned by the Agent and/or any of the Lenders to the Borrower or to any other Person under any insolvency, bankruptcy or other federal and/or state laws or as a result of any dissolution, liquidation or reorganization of the Borrower or such other Person or upon, or as a result of, the appointment of any receiver, intervenor or conservator of, or trustee, or similar officer for, the Borrower or such Person or any substantial part of its or their properties or assets, the parties hereto agree that the Agent shall be reinstated and shall continue as the Collateral Agent under the Credit Agreement and each of the Financing Documents all as though such payment(s) had not been made. 3. The Borrower has requested that the Agent and the Lenders agree to establish certain credit facilities in favor of the Italian Holding Company and the Italian Target as part of the existing credit facilities under the Credit Agreement. The Agent and the Lenders have agreed to so establish such credit facilities in a principal amount up to, but not exceeding, $1,500,000, but have not yet agreed upon a mutually acceptable structure for such credit facilities. The Agent and the Lenders agree to proceed in good faith to determine, close and consummate a structure, terms and conditions for the requested Italian credit facilities as soon as commercially practicable. 4. The terms "this Agreement" as used in the Credit Agreement and the terms "Credit Agreement" as used in any of the Financing Documents shall mean the Credit Agreement as modified herein unless the context clearly indicates or dictates a contrary meaning. Any and all such Financing Documents are deemed hereby amended to reflect the terms and conditions of this Amendment, including, without limitation, the Deeds of Trust. -22- 5. The Borrower, the Agent and the Lenders will execute such confirmatory instruments with respect to the Credit Agreement and/or any of the Financing Documents as the Agent may reasonably require. 6. This Amendment may not be amended, changed, modified, altered or terminated without in each instance the prior written consent of the Agent, the Lenders and the Borrower. This Amendment shall be construed in accordance with, and governed by, the laws of the State of Maryland. 7. The Borrower agrees that neither the execution and delivery of this Amendment nor any of the terms, provisions, covenants, or agreements contained in this Amendment shall in any manner release, impair, lessen, waive, or otherwise adversely affect the joint and several liability and obligations of the Borrower under the terms of the Credit Agreement. 8. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same instrument. The parties agree that their respective signatures may be delivered by facsimile. Any party who chooses to deliver its signature by facsimile agrees to provide a counterpart of this Agreement with its inked signature promptly to each other party. [Signature Appears on Following Page] -23- IN WITNESS WHEREOF, the Borrower, NIM Holdings, Berry UK, the Agent and the Lenders have caused this Amendment to be executed under seal as of the date first above written. WITNESS: BERRY PLASTICS CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: NIM HOLDINGS LIMITED By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: BERRY PLASTICS UK LIMITED By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS: BANK OF AMERICA, N.A., in its capacity as Agent By: (Seal) - ------------------------------ ----------------------------- David B. Thayer Senior Vice President WITNESS: BANK OF AMERICA, N.A., in its capacity as a Lender By: (Seal) - ------------------------------ ----------------------------- David B. Thayer Vice President WITNESS: FLEET CAPITAL CORPORATION, in its capacity as a Lender By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as a Lender By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS: HELLER FINANCIAL, INC. in its capacity as a Lender By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS: PNC BANK, NATIONAL ASSOCIATION in its capacity as a Lender By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS: LASALLE BUSINESS CREDIT, INC., in its capacity as a Lender By: (Seal) - ------------------------------ ----------------------------- Name: Title: ACKNOWLEDGMENT AND CONSENT BPC HOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Parent"), BERRY IOWA CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Berry Iowa"), BERRY TRI-PLAS CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Berry Tri-Plas"), AEROCON, INC., a corporation organized and existing under the laws of the State of Delaware ("AeroCon"), BERRY STERLING CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Berry Sterling"), BERRY PLASTICS DESIGN CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Berry Design"), PACKERWARE CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("PackerWare"), VENTURE PACKAGING, INC., a corporation organized and existing under the laws of the State of Delaware ("Venture Holding"), BERRY PLASTICS TECHNICAL SERVICES, INC., a corporation organized and existing under the laws of the State of Delaware, formerly known as Venture Packaging Southeast, Inc. ("Venture Southeast"), VENTURE PACKAGING MIDWEST, INC., a corporation organized and existing under the laws of the State of Delaware ("Venture Midwest"), KNIGHT PLASTICS, INC., a corporation organized and existing under the laws of the State of Delaware ("Knight"), CPI HOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("CPI"), CARDINAL PACKAGING, INC., a corporation organized and existing under the laws of the State of Ohio ("Cardinal"), and POLY-SEAL CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Poly-Seal") (the Parent, Berry Iowa, Berry Tri-Plas, AeroCon, Berry Sterling, Berry Design, PackerWare, Venture Holding, Venture Southeast, Venture Midwest, Knight, CPI, Cardinal, and Poly-Seal are herein collectively and individually referred to as the "Guarantor") hereby consent and agree to the foregoing Amendment and hereby acknowledge and agree that (i) the joint and several obligations and liabilities of the Guarantors under and in connection with those certain Guaranty of Payment Agreements and all other Financing Documents executed and delivered in connection with the Obligations (as amended, restated, supplemented or otherwise modified, the "Guaranty Documents") shall include and to the extent necessary are hereby amended to include any and all Obligations, as amended by this Amendment and (ii) neither the execution and delivery of the foregoing Amendment nor any of the terms, provisions and agreements contained in the foregoing Amendment shall in any manner impair, lessen, waive, discharge or otherwise adversely affect the indebtedness, liabilities, and obligations of the Guarantors under and in connection with any and all Financing Documents previously, now or hereafter executed and delivered by either of them, including, without limitation, the Guaranty Documents. [Signatures to Appear on Following Page] IN WITNESS WHEREOF, each of the parties hereby have executed and delivered this Acknowledgment under their respective seals as of the day and year first written above. WITNESS OR ATTEST: BERRY IOWA CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: BERRY TRI-PLAS CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: BERRY STERLING CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: AERO CON, INC. By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: PACKERWARE CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: BERRY PLASTICS DESIGN CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: BPC HOLDING CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: VENTURE PACKAGING, INC. By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: BERRY PLASTICS TECHNICAL SERVICES, INC., f/k/a Venture Packaging Southeast, Inc. By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: VENTURE PACKAGING MIDWEST, INC. By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: KNIGHT PLASTICS, INC. By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: CPI HOLDING CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: CARDINAL PACKAGING, INC. By: (Seal) - ------------------------------ ----------------------------- Name: Title: WITNESS OR ATTEST: POLY-SEAL CORPORATION By: (Seal) - ------------------------------ ----------------------------- Name: Title: EX-10.32 13 a2042389zex-10_32.txt EXHIBIT 10.32 SECOND AMENDMENT TO THIRD AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this "Amendment") is made effective as of the ___ day of September, 2000, by and among BERRY PLASTICS CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Borrower"), NIM HOLDINGS LIMITED, a company organized and existing under the laws of England and Wales ("NIM Holdings"), and BERRY PLASTICS UK LIMITED, a company organized and existing under the laws of England and Wales, formerly known as Norwich Injection Moulders Limited ("Berry UK"); BANK OF AMERICA, N.A., a national banking association ("Bank of America"), FLEET CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of Rhode Island ("Fleet"), GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of New York ("GE Capital"), as documentation agent, HELLER FINANCIAL, INC., a corporation organized and existing under the laws of the State of Delaware ("Heller"), PNC BANK, NATIONAL ASSOCIATION, a national banking association ("PNC"), and LASALLE BUSINESS CREDIT, INC., a corporation organized and existing under the laws of the State of Delaware ("LaSalle") (collectively, the "Lenders" and individually, a "Lender"); GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of New York, as documentation agent, and BANK OF AMERICA, N. A., a national banking association, in its capacity as both collateral and administrative agent for the Lenders (the "Agent") and as lead arranger; Witnesseth: RECITALS A. The Lenders, the Borrower, Berry UK, NIM Holdings and the Agent are parties to that certain Third Amended and Restated Financing and Security Agreement dated as of May 9, 2000, as amended by that certain First Amendment to Third Amended and Restated Financing and Security Agreement dated as of July 14, 2000 (as amended, restated, supplemented or otherwise modified, the "Credit Agreement"). Under and subject to the provisions of the Credit Agreement, the Lenders agreed to establish in favor of the Borrower, Berry UK and NIM Holdings certain revolving credit, letter of credit and term loan facilities. All capitalized terms used herein but not specifically defined herein shall have the meanings given such terms in the Credit Agreement. B. The Borrower has advised the Agent and the Lenders that the Borrower has acquired the Italian Holding Company. The Italian Holding Company is a wholly owned subsidiary of the Borrower. The Italian Holding Company proposes to acquire all of the shares (the "Italian Target Stock") issued by Capsol Italy and Ociesse in accordance with the provisions of that certain purchase or acquisition agreement by and among the existing shareholders of Capsol Italy, Ociesse, the Italian Holding Company and the Borrower (as amended, restated, supplemented or otherwise modified, the "Italian Target Purchase Agreement"). C. The Italian Holding Company has applied to Bank of America for two (2) revolving credit facilities in an aggregate principal amount up to, but not exceeding, Fifteen Million Two Hundred Fifty Thousand (15,250,000) euros (collectively, the "Italian Credit Facility"); one revolving credit facility shall be used by the Italian Holding Company to finance the entire purchase price for the acquisition of the Italian Target Stock by the Italian Holding Company and the second revolving credit facility shall be available to Capsol Italy or Ociesse to finance certain debt repayment and for working capital purposes generally. D. The Borrower, Berry UK, NIM Holdings, the Italian Holding Company, Capsol Italy and Ociesse have requested that (i) Bank of America, acting through its Milan, Italy branch, make the Italian Credit Facility available to the Italian Holding Company, Capsol Italy and Ociesse for the purposes described above and (ii) the Agent and the Lenders amend certain terms and conditions of the Credit Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, Berry UK, NIM Holdings, the Lenders and the Agent hereby agree as follows: 1. The Borrower, Berry UK and NIM Holdings hereby acknowledge and agree that the recitals set forth above are true and accurate in each and every respect and are incorporated herein by reference. The representations and warranties of the Borrower, Berry UK and NIM Holdings contained among the provisions of the Credit Agreement are true and correct as of the date of this Amendment (except that any such representations and warranties that are not qualified as to materiality need only be true and correct in all material respects) with the same effect as though such representations and warranties had been made as of such date, except that (i) the representations and warranties which relate to a specific date need only be true and correct as of such date and (ii) the representations and warranties which relate to financial statements which are referred to in Section 4.1.11 of the Credit Agreement, shall also be deemed to cover financial statements furnished from time to time to the Agent pursuant to Section 6.1.1 (Financial Statements) of the Credit Agreement. 2. The Credit Agreement is hereby amended as follows: (a) Section 1.1 beginning on page 3 of the Credit Agreement is hereby amended to add the following definitions: "APPLICABLE ITALIAN MARGIN" MEANS TWO HUNDRED (200) BASIS POINTS. "BANK OF AMERICA ITALY" MEANS BANK OF AMERICA, ACTING THROUGH ITS MILAN, ITALY BRANCH OR OFFICE, OR SUCH OTHER BRANCH OR OFFICE OF BANK OF AMERICA AS DESIGNATED BY BANK OF AMERICA IN ITALY FROM TIME TO TIME AS THE BRANCH OR OFFICE THROUGH WHICH THE ITALIAN REVOLVING CREDIT LOANS ARE TO BE MADE OR MAINTAINED, AND ITS SUCCESSORS AND ASSIGNS. "EURO" OR "EUROS" MEANS THE EUROPEAN MONETARY UNIT OR ANY OTHER EUROPEAN COMMON CURRENCY UNIT EQUIVALENT. 2 "EURIBOR BASE RATE" MEANS THE BASE RATE OF INTEREST FOR DETERMINING THE APPLICABLE INTEREST RATE PAYABLE ON THE ITALIAN OBLIGATIONS, AS PROVIDED IN THE ITALIAN CREDIT AGREEMENTS. "ITALIAN CREDIT AGREEMENTS" MEANS ANY AND ALL AGREEMENTS, DOCUMENTS AND INSTRUMENTS WHICH NOW OR AT ANY TIME HEREAFTER EVIDENCE ALL OR ANY PORTION OF THE ITALIAN OBLIGATIONS, AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED. "ITALIAN CREDIT FACILITIES GUARANTY" MEANS THE GUARANTY OF PAYMENT OF THE ITALIAN OBLIGATIONS TO BANK OF AMERICA ITALY FROM THE PARENT, THE BORROWER AND EACH SUBSIDIARY GUARANTOR, AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED. "ITALIAN CREDIT FACILITY REQUIRED AVAILABILITY" HAS THE MEANING GIVEN SUCH TERM IN SECTION 2.1.12 OF THIS AGREEMENT. "ITALIAN OBLIGATION ADVANCE" AND "ITALIAN OBLIGATION ADVANCES" HAVE THE MEANINGS GIVEN SUCH TERMS IN SECTION 2.1.2 OF THIS AGREEMENT. "ITALIAN OBLIGATIONS" MEANS AND INCLUDES ALL PRESENT AND FUTURE INDEBTEDNESS, OBLIGATIONS, AND LIABILITIES, WHETHER NOW EXISTING OR CONTEMPLATED OR HEREAFTER ARISING, OF THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE TO BANK OF AMERICA ITALY, UNDER, ARISING PURSUANT TO, IN CONNECTION WITH AND/OR ON ACCOUNT OF THE PROVISIONS OF THE ITALIAN CREDIT AGREEMENTS. "ITALIAN REVOLVING CREDIT COMMITMENT" MEANS THE AGREEMENT OF EACH LENDER RELATING TO PURCHASE OF AN UNDIVIDED PARTICIPATING INTEREST IN THE ITALIAN REVOLVING CREDIT LOAN AND ALL OTHER ITALIAN OBLIGATIONS SUBJECT TO AND IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT; AND "ITALIAN REVOLVING CREDIT COMMITMENTS" MEANS THE COLLECTIVE REFERENCE TO THE ITALIAN REVOLVING CREDIT COMMITMENT OF EACH OF THE LENDERS. "ITALIAN REVOLVING CREDIT COMMITTED AMOUNT" MEANS FIFTEEN MILLION TWO HUNDRED FIFTY THOUSAND (15,250,000) EUROS. "ITALIAN REVOLVING CREDIT FACILITY" MEANS THE REVOLVING CREDIT FACILITIES ESTABLISHED BY BANK OF AMERICA ITALY IN ACCORDANCE WITH THE TERMS OF THE ITALIAN CREDIT AGREEMENTS. "ITALIAN REVOLVING CREDIT LOAN" MEANS EACH LOAN OR ADVANCE MADE BY BANK OF AMERICA ITALY TO THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE UNDER THE TERMS OF THE ITALIAN CREDIT AGREEMENTS. "ITALIAN REVOLVING CREDIT PRO RATA SHARE" MEANS WITH RESPECT TO EACH LENDER, SUCH LENDER'S REVOLVING CREDIT PRO RATA SHARE WITH RESPECT TO THE ITALIAN OBLIGATIONS. 3 "ITALIAN SECURITY DOCUMENTS" MEANS ANY AND ALL AGREEMENTS, DOCUMENTS AND/OR INSTRUMENTS WHICH SECURE OR GUARANTY ALL OR ANY PORTION OF THE ITALIAN OBLIGATIONS, AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED, INCLUDING, WITHOUT LIMITATION, THE ITALIAN STOCK PLEDGE AGREEMENT. "ITALIAN STOCK PLEDGE AGREEMENT" MEANS (i) THAT CERTAIN FIRST RANKING SHARE PLEDGE AGREEMENT FROM THE BORROWER TO BANK OF AMERICA ITALY, WHICH GRANTS, PLEDGES AND ASSIGNS TO BANK OF AMERICA ITALY, AS SECURITY FOR THE ITALIAN OBLIGATIONS, ONE HUNDRED PERCENT (100%) OF THE ISSUED AND OUTSTANDING SHARES OF THE ITALIAN HOLDING COMPANY AND (ii) THAT CERTAIN FIRST RANKING SHARE PLEDGE AGREEMENT FROM THE ITALIAN HOLDING COMPANY TO BANK OF AMERICA ITALY. WHICH GRANTS, PLEDGES AND ASSIGNS TO BANK OF AMERICA ITALY, AS SECURITY FOR THE ITALIAN OBLIGATIONS, ONE HUNDRED PERCENT (100%) OF THE ISSUED AND OUTSTANDING SHARES OF EACH OF CAPSOL ITALY AND OCIESSE, EACH AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED. THE AGENT, THE LENDERS AND THE BORROWER ACKNOWLEDGE AND AGREE THAT THE ITALIAN STOCK PLEDGE AGREEMENTS WILL NOT BE EXECUTED AND DELIVERED UPON CLOSING AND CONSUMMATION OF THE ITALIAN CREDIT FACILITY, BUT WILL BE EXECUTED AND DELIVERED AS SOON AS COMMERCIALLY PRACTICABLE FOLLOWING CLOSING. (b) The definitions of "Commitment" and "Commitments" on page 8 of the Credit Agreement are hereby deleted in their entirety and the following are substituted in their places: "COMMITMENT" MEANS WITH RESPECT TO EACH LENDER, SUCH LENDER'S REVOLVING CREDIT COMMITMENT, LETTER OF CREDIT COMMITMENT, TERM LOAN A COMMITMENT, TERM LOAN B COMMITMENT, BOND LETTER OF CREDIT COMMITMENT, UK REVOLVING CREDIT COMMITMENT, UK TERM LOAN COMMITMENT, ITALIAN REVOLVING CREDIT COMMITMENT, AS THE CASE MAY BE, AND "COMMITMENTS" MEANS THE COLLECTIVE REFERENCE TO THE REVOLVING CREDIT COMMITMENTS, THE LETTER OF CREDIT COMMITMENTS, THE TERM LOAN A COMMITMENTS, THE TERM LOAN B COMMITMENTS, THE BOND LETTER OF CREDIT COMMITMENTS, THE UK REVOLVING CREDIT COMMITMENTS, THE UK TERM LOAN COMMITMENTS AND ITALIAN REVOLVING CREDIT COMMITMENTS OF ALL OF THE LENDERS. (c) The definitions of "Credit Facility" and "Credit Facilities" on page 9 of the Credit Agreement are hereby deleted in their entirety and the following are substituted in their place: "CREDIT FACILITY" MEANS A DOMESTIC CREDIT FACILITY, A UK CREDIT FACILITY, OR THE ITALIAN REVOLVING CREDIT FACILITY AND "CREDIT FACILITIES" MEANS THE DOMESTIC CREDIT FACILITIES, THE UK CREDIT FACILITIES AND THE ITALIAN REVOLVING CREDIT FACILITY. 4 (d) The definition of "Dollar Currency Equivalent" on page 11 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "DOLLAR CURRENCY EQUIVALENT" MEANS, ON ANY DATE OF DETERMINATION, THE RATE OF EXCHANGE QUOTED AT 11:00 A.M. (BALTIMORE, MARYLAND TIME) BY THE AGENT FOR THE SPOT PURCHASE IN THE FOREIGN EXCHANGE MARKET IN CHICAGO, ILLINOIS OF SUCH AMOUNT OF EUROS OR STERLING, AS THE CASE MAY BE, WITH DOLLARS. (e) The definition of "Financing Documents" on page 24 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "FINANCING DOCUMENTS" MEANS AT ANY TIME COLLECTIVELY THIS AGREEMENT, THE NOTES, THE SECURITY DOCUMENTS, THE LETTER OF CREDIT DOCUMENTS, THE BOND LETTER OF CREDIT AGREEMENT DOCUMENTS, THE UK SECURITY DOCUMENTS, THE ITALIAN CREDIT AGREEMENTS, AND ANY OTHER INSTRUMENT, AGREEMENT OR DOCUMENT PREVIOUSLY, SIMULTANEOUSLY OR HEREAFTER EXECUTED AND DELIVERED BY THE BORROWER, ANY SUBSIDIARY GUARANTOR, BERRY UK, NIM HOLDINGS, THE ITALIAN HOLDING COMPANY, OCIESSE, CAPSOL ITALY AND/OR ANY OTHER PERSON, SINGLY OR JOINTLY WITH ANOTHER PERSON OR PERSONS, EVIDENCING, SECURING, GUARANTYING OR IN CONNECTION WITH THIS AGREEMENT, ANY NOTE, ANY OF THE SECURITY DOCUMENTS, ANY OF THE CREDIT FACILITIES, ANY OF THE UK SECURITY DOCUMENTS, ANY OF THE ITALIAN CREDIT AGREEMENTS AND/OR ANY OF THE OBLIGATIONS, ALL AS THE SAME MAY BE AMENDED, RESTATED, SUPPLEMENTED, REPLACED OR OTHERWISE MODIFIED AT ANY TIME AND FROM TIME TO TIME. (f) The definition of "Guaranty" on page 26 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "GUARANTY" MEANS COLLECTIVELY EACH GUARANTY OF PAYMENT FOR THE BENEFIT OF BANK OF AMERICA ITALY AND/OR OF THE LENDERS RATABLY AND THE AGENT FROM ANY OR ALL OF THE GUARANTORS OR NIM HOLDINGS, INCLUDING, WITHOUT LIMITATION, THE UK CREDIT FACILITIES GUARANTY AND THE ITALIAN CREDIT FACILITY GUARANTY, AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED. (g) The definitions of "Loan" and "Loans" on page 30 of the Credit Agreement are hereby deleted in their entirety and the following are substituted in their places: "LOAN" MEANS EACH OF THE REVOLVING LOAN, A TERM LOAN A, A TERM LOAN B, THE UK REVOLVING LOAN, A UK TERM LOAN, AN ITALIAN REVOLVING CREDIT LOAN, AS THE CASE MAY BE, AND "LOANS" MEANS THE COLLECTIVE REFERENCE TO THE REVOLVING LOAN, THE TERM LOANS A, THE TERM LOANS B, THE UK REVOLVING LOAN, THE UK TERM LOANS AND THE ITALIAN REVOLVING CREDIT LOANS. (h) The definition of "Obligations" on pages 31 and 32 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: 5 "OBLIGATIONS" MEANS AND INCLUDES ALL PRESENT AND FUTURE INDEBTEDNESS, OBLIGATIONS, AND LIABILITIES, WHETHER NOW EXISTING OR CONTEMPLATED OR HEREAFTER ARISING, OF THE BORROWER, NIM HOLDINGS AND/OR BERRY UK TO (i) THE LENDERS, (ii) TO BANK OF AMERICA WITH RESPECT TO THE UK OBLIGATIONS, AND (iii) TO BANK OF AMERICA ITALY WITH RESPECT TO THE ITALIAN OBLIGATIONS, AND/OR (iv) TO THE AGENT UNDER, ARISING PURSUANT TO, IN CONNECTION WITH AND/OR ON ACCOUNT OF THE PROVISIONS OF THIS AGREEMENT, EACH NOTE, EACH SECURITY DOCUMENT, AND/OR ANY OF THE OTHER FINANCING DOCUMENTS, THE LOANS, AND/OR ANY OF THE CREDIT FACILITIES INCLUDING, WITHOUT LIMITATION, THE PRINCIPAL OF, AND INTEREST ON, EACH NOTE, LATE CHARGES, THE FEES, ENFORCEMENT COSTS, AND PREPAYMENT FEES (IF ANY), LETTER OF CREDIT FEES OR FEES CHARGED WITH RESPECT TO ANY GUARANTY OF ANY LETTER OF CREDIT; ALSO MEANS AND INCLUDES ALL OTHER PRESENT AND FUTURE INDEBTEDNESS, LIABILITIES AND OBLIGATIONS, WHETHER NOW EXISTING OR CONTEMPLATED OR HEREAFTER ARISING, OF THE BORROWER, BERRY UK, NIM HOLDINGS, ANY SUBSIDIARY GUARANTOR TO THE AGENT AND/OR TO ANY LENDER OR BANK OF AMERICA ITALY ANY/OR ANY OF ITS OR THEIR AFFILIATES UNDER OR IN CONNECTION WITH, ANY INTEREST RATE/CURRENCY PROTECTION AGREEMENTS; AND ALSO MEANS ANY AND ALL RENEWALS, EXTENSIONS, SUBSTITUTIONS, AMENDMENTS, RESTATEMENTS AND REARRANGEMENTS OF ANY SUCH DEBTS, OBLIGATIONS AND LIABILITIES. FOR PURPOSES OF THE INDENTURE, ALL OBLIGATIONS UNDER AND IN CONNECTION WITH THE CREDIT FACILITIES CONSTITUTE AND ARE HEREBY DEEMED "DESIGNATED SENIOR INDEBTEDNESS" AS DEFINED IN THE INDENTURE. IN ADDITION, FOR PURPOSES OF THIS AGREEMENT "OBLIGATIONS" INCLUDES WITH RESPECT TO THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND OCIESSE, THE ITALIAN OBLIGATIONS. (i) The definition of "Security Documents" on page 41 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "SECURITY DOCUMENTS" MEANS COLLECTIVELY ANY ASSIGNMENT, PLEDGE AGREEMENT, SECURITY AGREEMENT, MORTGAGE, DEED OF TRUST, DEED TO SECURE DEBT, FINANCING STATEMENT AND ANY SIMILAR INSTRUMENT, DOCUMENT OR AGREEMENT UNDER OR PURSUANT TO WHICH A LIEN IS NOW OR HEREAFTER GRANTED TO, OR FOR THE BENEFIT OF, THE AGENT, THE LENDERS, BANK OF AMERICA AND/OR BANK OF AMERICA ITALY ON ANY REAL OR PERSONAL PROPERTY OF ANY PERSON TO SECURE ALL OR ANY PORTION OF THE OBLIGATIONS, ALL AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED, INCLUDING, WITHOUT LIMITATION, THIS AGREEMENT, THE GUARANTY, THE STOCK PLEDGE AGREEMENT, THE DEEDS OF TRUST, THE SECURITY AGREEMENT, THE ASSIGNMENT OF PATENTS, THE ASSIGNMENT OF TRADEMARKS, THE UK STOCK PLEDGE AGREEMENT, THE UK SECURITY DOCUMENTS, THE ITALIAN STOCK PLEDGE AGREEMENT AND THE OTHER ITALIAN SECURITY DOCUMENTS, IF ANY. (j) The definition of "Stock Pledge Agreement" on pages 43 and 44 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: 6 "STOCK PLEDGE AGREEMENT" MEANS (a) THAT CERTAIN AMENDED AND RESTATED STOCK PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT DATED AS OF THE DATE HEREOF FROM THE BORROWER TO THE AGENT FOR THE BENEFIT OF THE LENDERS RATABLY AND THE AGENT, (b) THE UK STOCK PLEDGE AGREEMENT, (c) THAT CERTAIN AMENDED AND RESTATED STOCK PLEDGE AGREEMENT, ASSIGNMENT AND SECURITY AGREEMENT DATED AS OF THE DATE HEREOF FROM CPI TO THE AGENT FOR THE BENEFIT OF THE LENDERS RATABLY AND THE AGENT, AND (d) THE ITALIAN STOCK PLEDGE AGREEMENT, ALL AS THE SAME MAY FROM TIME TO TIME BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED. (k) The definitions of "Subsidiary Guarantor" and "Subsidiary Guarantors" on pages 44 and 45 of the Credit Agreement are hereby amended to confirm that the Italian Holding Company, Capsol Italy and Ociesse do not constitute "Subsidiary Guarantors" for purposes of the Credit Agreement, the GE Financing Agreement, all of the other Financing Documents and all of the other GE Financing Documents. The Agent and the Lenders agree that none of the tangible or intangible assets or properties (excluding capital stock) of Capsol Italy, Ociesse and/or the Italian Holding Company located in the Republic of Italy shall be pledged to the Agent and/or the Lenders as collateral for any of the Obligations (other than the Italian Obligations to the extent provided in the immediately following sentence) or for any of the GE Obligations. In addition, the Italian Obligations (and neither any other Obligations nor the GE Obligations) shall be secured by a first priority assignment, pledge and grant of one hundred percent (100%) of the outstanding shares of capital stock now or at any time hereafter issued by Capsol Italy, Ociesse and the Italian Holding Company. (l) The third paragraph of Section 2.1.2 on pages 52 and 53 of the Credit Agreement is hereby amended to add the following provisions: THE BORROWER AND THE LENDERS HEREBY IRREVOCABLY AUTHORIZE THE AGENT, ON BEHALF OF THE LENDERS, AT ANY TIME AND FROM TIME TO TIME, WITHOUT REQUEST FROM, PRIOR NOTICE TO, OR CONSENT OF, THE BORROWER OR ANY OF THE LENDERS TO MAKE ADVANCES UNDER THE REVOLVING LOAN TO REPAY ALL OR ANY PORTION OF THE ITALIAN OBLIGATIONS (EACH, AN "ITALIAN OBLIGATION ADVANCE" AND COLLECTIVELY, THE "ITALIAN OBLIGATION ADVANCES"). THE AGENT AGREES THAT AN ITALIAN OBLIGATION ADVANCE MAY BE MADE ONLY (i) UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT UNDER THE ITALIAN CREDIT AGREEMENTS OR (ii) IF ALL OR ANY PORTION OF THE ITALIAN OBLIGATIONS ARE NOT PAID AS AND WHEN DUE AND PAYABLE (SUBJECT TO ANY APPLICABLE NOTICE, GRACE AND CURE PERIODS) IN ACCORDANCE WITH THE TERMS OF THE ITALIAN CREDIT AGREEMENTS. THE BORROWER ACKNOWLEDGES AND AGREES THAT NOTWITHSTANDING ANY PROVISION IN THE CREDIT AGREEMENT TO THE CONTRARY, THE AGENT SHALL BE ENTITLED TO REQUIRE ITALIAN OBLIGATION ADVANCES REGARDLESS OF WHETHER THE OUTSTANDING PRINCIPAL AMOUNT OF THE LOAN AFTER TAKING INTO ACCOUNT ANY SUCH ITALIAN OBLIGATION ADVANCES EXCEEDS OR WOULD EXCEED THE TOTAL REVOLVING CREDIT COMMITTED AMOUNT; PROVIDED THAT UNDER NO CIRCUMSTANCES SHALL THE AGGREGATE PRINCIPAL AMOUNT OF ITALIAN OBLIGATION ADVANCES EXCEED THE DOLLAR CURRENCY EQUIVALENT OF THE THEN OUTSTANDING ITALIAN OBLIGATIONS; NO LENDER, HOWEVER, SHALL HAVE ANY OBLIGATION OR COMMITMENT TO MAKE ANY ADVANCE TO OR FOR THE ACCOUNT OF THE BORROWER UNDER 7 THE REVOLVING LOAN (INCLUDING ANY OBLIGATION OR COMMITMENT TO PURCHASE ANY PARTICIPATION INTEREST IN THE ITALIAN OBLIGATIONS) UNLESS OTHERWISE AGREED IN WRITING BY SUCH LENDER, IF AND TO THE EXTENT SUCH LENDER'S PRO RATA SHARE OF THE REVOLVING LOAN WOULD EXCEED, WITH THE MAKING OF SUCH ADVANCE OR REIMBURSEMENT, SUCH LENDER'S REVOLVING CREDIT COMMITTED AMOUNT. (m) Section 2.1.10 on pages 57 and 58 of the Credit Agreement is hereby amended to add the following provisions: THE AGENT AND THE LENDERS AGREE THAT USAGE OF THE ITALIAN REVOLVING CREDIT FACILITY SHALL BE CONSIDERED USAGE OF THE TOTAL REVOLVING CREDIT COMMITTED AMOUNT FOR PURPOSES OF THIS SECTION 2.1.10. (n) Section 2.1.12 on pages 58 and 59 of the Credit Agreement is hereby amended to the add the following additional provisions: IN ADDITION TO THE REQUIRED AVAILABILITY, THE BORROWER UNDERSTANDS AND AGREES THAT THE AGENT SHALL ESTABLISH AND MAINTAIN AN ADDITIONAL RESERVE AGAINST AVAILABILITY UNDER THE REVOLVING LOAN IN AN AMOUNT EQUAL AT ALL TIMES TO THE DOLLAR CURRENCY EQUIVALENT OF THE MAXIMUM AMOUNT (INCLUDING PRINCIPAL, INTEREST AND FEES) WHICH IS AND/OR MAY BE OUTSTANDING AT ANY TIME AND FROM TIME TO TIME UNDER THE ITALIAN CREDIT FACILITY (THE "ITALIAN CREDIT FACILITY REQUIRED AVAILABILITY"). THE AGENT AND THE LENDERS AGREE THAT THE ITALIAN CREDIT FACILITY REQUIRED AVAILABILITY IS IN SUBSTITUTION FOR, AND IN REPLACEMENT OF, THE PERMITTED ACQUISITION REQUIRED AVAILABILITY AND ACCORDINGLY CONSTITUTES A REPLACEMENT OF A PORTION OF THE REVOLVING CREDIT FACILITY AND NOT A PERMANENT REDUCTION OF THE REVOLVING CREDIT COMMITMENTS. THE BORROWER FURTHER UNDERSTANDS AND AGREES THAT THE AMOUNT OF THE ITALIAN CREDIT FACILITY REQUIRED AVAILABILITY MAY CHANGE FROM TIME TO TIME AS DETERMINED BY THE AGENT IN ITS SOLE DISCRETION TO TAKE INTO ACCOUNT ANY APPLICABLE FOREIGN EXCHANGE FLUCTUATIONS BETWEEN DOLLARS AND EUROS. THE BORROWER FURTHER UNDERSTANDS AND AGREES THAT THE ITALIAN CREDIT FACILITY REQUIRED AVAILABILITY MAY AT ANY TIME AND FROM TIME TO TIME EXCEED THE ITALIAN REVOLVING CREDIT COMMITTED AMOUNT IF AND TO THE EXTENT THE UNPAID BALANCE OF THE DOLLAR CURRENCY EQUIVALENT OF THE ITALIAN OBLIGATIONS EXCEEDS OR IS EXPECTED TO EXCEED THE DOLLAR CURRENCY EQUIVALENT OF THE ITALIAN REVOLVING CREDIT COMMITTED AMOUNT. (o) Section 2.8 of the Credit Agreement is hereby amended to add the following Section 2.8.6: 2.8.6 PARTICIPATIONS IN THE ITALIAN OBLIGATIONS. EACH LENDER (INCLUDING BANK OF AMERICA) HEREBY IRREVOCABLY AUTHORIZES BANK OF AMERICA ITALY TO MAKE ADVANCES UNDER THE ITALIAN REVOLVING CREDIT FACILITY IN ACCORDANCE WITH THE PROVISIONS OF THE ITALIAN CREDIT AGREEMENTS. AS OF THE DATE EACH SUCH ITALIAN REVOLVING LOAN IS MADE, EACH LENDER SHALL HAVE AN UNDIVIDED PARTICIPATING INTEREST IN (a) THE RIGHTS AND OBLIGATIONS OF BANK OF AMERICA ITALY UNDER EACH SUCH ITALIAN REVOLVING LOAN, AND (b) THE ITALIAN OBLIGATIONS WITH RESPECT TO SUCH ITALIAN REVOLVING LOAN, IN AN AMOUNT EQUAL TO EACH LENDER'S PRO RATA SHARE THEREOF, SUBJECT 8 TO THE RIGHTS OF BANK OF AMERICA ITALY TO RECEIVE AND RETAIN PAYMENT OF ALL OR A PORTION OF THE INTEREST ON THE ITALIAN OBLIGATIONS AS SET FORTH IN THIS SECTION AND ANY FRONTING FEES OR OTHER FEES AS SET FORTH IN THE ITALIAN CREDIT AGREEMENTS. IF THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE FAIL TO PAY TO BANK OF AMERICA ITALY, ANY ITALIAN OBLIGATIONS AS AND WHEN DUE AND PAYABLE (SUBJECT TO ANY APPLICABLE NOTICE, GRACE OR CURE PERIOD), THE AGENT SHALL PROMPTLY NOTIFY EACH OF THE LENDERS AND MAY DEMAND PAYMENT FROM EACH OF THE LENDERS OF SUCH LENDER'S PRO RATA SHARE OF SUCH UNPAID ITALIAN OBLIGATIONS. IN ADDITION, IF ANY AMOUNT PAID TO BANK OF AMERICA ITALY ON ACCOUNT OF THE ITALIAN OBLIGATIONS IS RESCINDED OR REQUIRED TO BE RESTORED OR TURNED OVER BY BANK OF AMERICA ITALY, UPON THE INSOLVENCY, BANKRUPTCY, DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE OR UPON OR AS A RESULT OF THE APPOINTMENT OF A RECEIVER, INTERVENOR, TRUSTEE, CONSERVATOR OR SIMILAR OFFICER FOR THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE, THE AGENT SHALL PROMPTLY NOTIFY EACH OF THE LENDERS AND MAY DEMAND PAYMENT FROM EACH OF THE LENDERS OF ITS PRO RATA SHARE OF ITS PORTION OF THE ITALIAN OBLIGATIONS TO BE REMITTED TO THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE. SUBJECT TO SECTION 2.1.2, EACH OF THE LENDERS IRREVOCABLY AND UNCONDITIONALLY AGREES TO HONOR ANY SUCH DEMANDS FOR PAYMENT UNDER THIS SECTION AND PROMISES TO PAY TO THE ACCOUNT OF THE AGENT FOR THE BENEFIT OF BANK OF AMERICA ITALY ON THE SAME BUSINESS DAY AS DEMANDED THE AMOUNT OF ITS PRO RATA SHARE OF THE ITALIAN OBLIGATIONS IN EUROS, IN IMMEDIATELY AVAILABLE FUNDS, WITHOUT ANY SETOFF, COUNTERCLAIM OR DEDUCTION OF ANY KIND. ANY PAYMENT BY A LENDER HEREUNDER SHALL IN NO WAY RELEASE, DISCHARGE OR LESSEN THE OBLIGATION OF THE ITALIAN HOLDING COMPANY, CAPSOL ITALY, OCIESSE, THE BORROWER OR ANY SUBSIDIARY GUARANTOR TO PAY THE ITALIAN OBLIGATIONS TO BANK OF AMERICA ITALY, IN ACCORDANCE WITH THE PROVISIONS OF THE ITALIAN CREDIT AGREEMENTS. THE DATE ON WHICH A PAYMENT IS MADE BY A LENDER TO THE AGENT FOR THE ACCOUNT OF BANK OF AMERICA ITALY SHALL BE REFERRED TO AS A "ITALIAN PAYMENT DATE". THE OBLIGATION OF EACH OF THE LENDERS TO REMIT THE AMOUNTS OF ITS PRO RATA SHARE OF THE ITALIAN OBLIGATIONS FOR THE ACCOUNT OF BANK OF AMERICA ITALY, PURSUANT TO THIS SECTION SHALL BE UNCONDITIONAL AND IRREVOCABLE UNDER ANY AND ALL CIRCUMSTANCES (BUT SUBJECT TO SECTION 2.1.2) AND MAY NOT BE TERMINATED, SUSPENDED OR DELAYED FOR ANY REASON WHATSOEVER, PROVIDED THAT ALL PAYMENTS OF SUCH AMOUNTS BY EACH OF THE LENDERS SHALL BE WITHOUT PREJUDICE TO THE RIGHTS OF EACH OF THE LENDERS WITH RESPECT TO ANY ALLEGED WILLFUL MISCONDUCT OF BANK OF AMERICA ITALY. ANY CLAIM ANY LENDER MAY HAVE AGAINST BANK OF AMERICA ITALY AS A RESULT OF ANY ALLEGED WILLFUL MISCONDUCT OF BANK OF AMERICA ITALY MAY BE BROUGHT BY SUCH LENDER IN A SEPARATE ACTION AGAINST BANK OF AMERICA ITALY, BUT MAY NOT BE USED AS A DEFENSE TO PAYMENT UNDER THE PROVISIONS OF THIS SECTION. ALL INTEREST ON THE UNPAID PRINCIPAL BALANCE OF THE ITALIAN OBLIGATIONS SHALL BE PAYABLE TO, AND RETAINED BY, BANK OF AMERICA ITALY, EXCEPT WITH 9 RESPECT TO THOSE ITALIAN OBLIGATIONS FOR WHICH THE AGENT ON ACCOUNT OF BANK OF AMERICA ITALY, HAS DEMANDED AND RECEIVED PAYMENT FROM A LENDER PURSUANT TO THE PROVISIONS OF THIS SECTION (EACH AN "ITALIAN LENDER PAYMENT"), IN WHICH CASE, THE LENDER MAKING SUCH PAYMENT SHALL BE ENTITLED TO RECEIVE ALL INTEREST PAYABLE ON THE ITALIAN OBLIGATIONS REPRESENTED BY SUCH ITALIAN LENDER PAYMENT AT ALL TIMES FROM AND AFTER THE ITALIAN PAYMENT DATE FOR SUCH ITALIAN LENDER PAYMENT (THE "LENDER'S SHARE OF ITALIAN INTEREST"). ANY PAYMENTS RECEIVED BY BANK OF AMERICA ITALY, WHICH ARE PAYABLE TO A LENDER SHALL BE PAID TO SUCH LENDER IN EUROS IN ACCORDANCE WITH ALL PAYMENTS TO BE MADE BY THE AGENT TO A LENDER UNDER THE PROVISIONS OF SECTION 2.12. EXCEPT TO THE EXTENT THAT AGENT ON BEHALF OF BANK OF AMERICA ITALY SHALL HAVE MADE DEMAND ON THE LENDERS FOR PAYMENT OF THEIR PRO RATA SHARE OF THE ITALIAN OBLIGATIONS (THE "ITALIAN OBLIGATIONS DEMAND DATE"), THE AGENT SHALL REMIT TO EACH LENDER FROM TIME TO TIME (BUT AT LEAST ONCE MONTHLY) SUCH LENDER'S PRO RATA SHARE OF THAT PORTION OF THE INTEREST PAID TO, AND RECEIVED BY, BANK OF AMERICA ITALY, IN COLLECTED FUNDS ON ACCOUNT OF SUCH LENDER'S UNFUNDED ITALIAN OBLIGATIONS CALCULATED AT THE APPLICABLE ITALIAN MARGIN FOR SUCH ITALIAN OBLIGATIONS ONLY; BANK OF AMERICA ITALY SHALL RETAIN ALL INTEREST CALCULATED AT THE EURIBOR BASE RATE. SUCH PAYMENTS SHALL BE PAYABLE TO THE LENDERS IN CONSIDERATION OF THEIR AGREEMENT TO PURCHASE A PARTICIPATION INTEREST IN THE ITALIAN OBLIGATIONS IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, BUT SHALL BE PAYABLE ONLY IF AND TO THE EXTENT BANK OF AMERICA ITALY HAS RECEIVED THE INTEREST PAYMENT WHICH IS THE BASIS FOR SUCH FEE. (p) Section 2.10.7 on page 62 of the Credit Agreement is hereby amended to add the following provisions: IF ANY ASSESSMENTS ARE IMPOSED AND REQUIRED TO BE WITHHELD FROM ANY PAYMENT OF INTEREST BY THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE TO BANK OF AMERICA ITALY ON ACCOUNT OF THE ITALIAN OBLIGATIONS (INCLUDING ANY DISTRIBUTION OF ALL OR ANY PORTION OF ANY SUCH PAYMENT BY BANK OF AMERICA ITALY TO ALL OR ANY OF THE LENDERS), THE BORROWER SHALL (a) INCREASE OR CAUSE THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE, AS APPROPRIATE, TO INCREASE THE AMOUNT OF SUCH PAYMENT SO THAT BANK OF AMERICA ITALY (AND THE LENDERS) WILL RECEIVE A NET AMOUNT (AFTER GIVING EFFECT TO THE PAYMENT OF SUCH ADDITIONAL AMOUNT AND TO THE DEDUCTION OF ALL ASSESSMENTS) EQUAL TO THE AMOUNT OF INTEREST DUE ON ACCOUNT OF THE ITALIAN OBLIGATIONS (AND ANY AMOUNTS DUE TO THE LENDERS IN CONNECTION THEREWITH, AND (b) PAY OR CAUSE THE ITALIAN HOLDING COMPANY, CAPSOL ITALY AND/OR OCIESSE TO PAY SUCH ASSESSMENTS TO THE APPROPRIATE TAXING AUTHORITY FOR THE ACCOUNT OF BANK OF AMERICA ITALY AND/OR THE LENDERS, AS APPROPRIATE, AND, AS PROMPTLY AS POSSIBLE THEREAFTER, SEND BANK OF AMERICA ITALY AN ORIGINAL RECEIPT (OR A COPY THEREOF THAT HAS BEEN STAMPED BY THE APPROPRIATE TAXING AUTHORITY TO CERTIFY PAYMENT) SHOWING PAYMENT THEREOF, TOGETHER WITH SUCH 10 ADDITIONAL DOCUMENTARY EVIDENCE AS BANK OF AMERICA ITALY MAY FROM TIME TO TIME REASONABLY REQUIRE. (q) Section 3.2 beginning on page 100 of the Credit Agreement is hereby amended to provide that the Collateral secures the Italian Obligations and the Borrower's guaranty of the Italian Obligations. In particular, the Borrower hereby assigns, pledges and grants to the Agent, for the benefit of Bank of America Italy and agrees that the Agent for the benefit of Bank of America Italy shall have a perfected and continuing security interest in, and Lien on, (a) all of the Borrower's Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment, Securities, and General Intangibles, whether now owned or existing or hereafter acquired or arising, (b) all returned, rejected or repossessed goods, the sale or lease of which shall have given or shall give rise to an Account or Chattel Paper, (c) all insurance policies relating to the foregoing, (d) all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to the foregoing and all equipment and general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and (e) all cash and non-cash proceeds and products of the foregoing. (r) Section 3.7 on page 105 of the Credit Agreement is hereby amended to provide that the Borrower agrees that the Italian Obligations are and shall be fully and unconditionally and jointly and severally guaranteed by each Subsidiary Guarantor and the joint and several obligations of each Subsidiary Guarantor under the Guaranty are and shall continue to be secured by a first priority Lien (subject only to Permitted Liens) on all Assets and properties of each Subsidiary Guarantor. (s) Section 6.1 is hereby amended to add the following Section 6.1.25: 6.1.25 ITALIAN CREDIT AGREEMENTS. THE BORROWER UNDERSTANDS AND AGREES THAT IN ORDER TO PERMIT THE EXPEDITIOUS CLOSING OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, BANK OF AMERICA ITALY HAS AGREED TO MAKE THE ITALIAN CREDIT FACILITY AVAILABLE TO THE ITALIAN HOLDING COMPANY BASED ON THE EXECUTION AND DELIVERY OF CERTAIN INTERIM ITALIAN CREDIT AGREEMENTS. THE BORROWER FURTHER UNDERSTANDS AND AGREES THAT IT IS CONTEMPLATED THAT PROMPTLY FOLLOWING THE CLOSING OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION, THE BORROWER, THE ITALIAN HOLDING COMPANY, OCIESSE AND CAPSOL ITALY WILL EXECUTE AND DELIVER TO BANK OF AMERICA ITALY FINAL ITALIAN CREDIT AGREEMENTS AND THE ITALIAN STOCK PLEDGE AGREEMENT. IN RESPECT THEREOF, THE BORROWER COVENANTS AND AGREES TO EXECUTE AND TO CAUSE THE ITALIAN HOLDING COMPANY, OCIESSE AND CAPSOL ITALY TO EXECUTE AND DELIVER TO BANK OF AMERICA ITALY, THE FINAL ITALIAN CREDIT AGREEMENTS AND THE ITALIAN STOCK PLEDGE AGREEMENT AS SOON AS COMMERCIALLY PRACTICABLE, BUT IN ANY EVENT WITHIN SIXTY (60) DAYS OF THE CLOSING OF THE ITALIAN TARGET STOCK PURCHASE TRANSACTION. (t) Section 7.1.10 on page 145 of the Credit Agreement is hereby amended to provide that the occurrence of an event of default (following expiration of any applicable notice, grace and/or cure periods) under the Italian Credit Facility shall constitute an Event of Default under Section 7.1.10 of the Credit Agreement. 11 (u) Section 7.1.13 on page 145 of the Credit Agreement is hereby amended to provide that, except to the extent permitted by Section 6.2.1 of the Credit Agreement, (1) the Borrower's failure to own and control, beneficially and of record, directly or indirectly, one hundred percent (100%) of the issued and outstanding shares of the Italian Holding Company and/or (2) the Italian Holding Company's failure to own and control, beneficially and of record, directly or indirectly, one hundred percent (100%) of the issued and outstanding shares of Capsol Italy and/or Ociesse, shall constitute an Event of Default under Section 7.1.13 of the Credit Agreement. 3. The terms "this Agreement" as used in the Credit Agreement and the terms "Credit Agreement" as used in any of the Financing Documents shall mean the Credit Agreement as modified herein unless the context clearly indicates or dictates a contrary meaning. Any and all such Financing Documents are deemed hereby amended to reflect the terms and conditions of this Amendment, including, without limitation, the Deeds of Trust. 4. The Borrower, the Agent and the Lenders will execute such confirmatory instruments with respect to the Credit Agreement and/or any of the Financing Documents as the Agent may reasonably require. 5. This Amendment may not be amended, changed, modified, altered or terminated without in each instance the prior written consent of the Agent, the Lenders and the Borrower. This Amendment shall be construed in accordance with, and governed by, the laws of the State of Maryland. 6. The Borrower agrees that neither the execution and delivery of this Amendment nor any of the terms, provisions, covenants, or agreements contained in this Amendment shall in any manner release, impair, lessen, waive, or otherwise adversely affect the joint and several liability and obligations of the Borrower under the terms of the Credit Agreement. 7. The Agent and the Lenders acknowledge and agree that to the extent the provisions of the Credit Agreement are contrary to or inconsistent with the Italian Credit Agreement, the provisions of the Credit Agreement shall control and the provisions of the Italian Credit Agreement shall be interpreted in a manner to be consistent with the Credit Agreement. 8. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same instrument. The parties agree that their respective signatures may be delivered by facsimile. Any party who chooses to deliver its signature by facsimile agrees to provide a counterpart of this Agreement with its inked signature promptly to each other party. 12 IN WITNESS WHEREOF, the Borrower, NIM Holdings, Berry UK, the Agent and the Lenders have caused this Amendment to be executed under seal as of the date first above written. WITNESS: BERRY PLASTICS CORPORATION - ---------------------------- By: ----------------------------(Seal) Name: Title: WITNESS OR ATTEST: NIM HOLDINGS LIMITED - ---------------------------- By: ----------------------------(Seal) Name: Title: WITNESS OR ATTEST: BERRY PLASTICS UK LIMITED - ---------------------------- By: ----------------------------(Seal) Name: Title: WITNESS: BANK OF AMERICA, N.A., in its capacity as Agent - ---------------------------- By: ----------------------------(Seal) David B. Thayer Senior Vice President WITNESS: BANK OF AMERICA, N.A., in its capacity as a Lender - ---------------------------- By: ----------------------------(Seal) David B. Thayer Vice President 13 WITNESS: FLEET CAPITAL CORPORATION, in its capacity as a Lender - ---------------------------- By: ----------------------------(Seal) Name: Title: WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as a Lender - ---------------------------- By: ----------------------------(Seal) Name: Title: WITNESS: HELLER FINANCIAL, INC. in its capacity as a Lender - ---------------------------- By: ----------------------------(Seal) Name: Title: WITNESS: PNC BANK, NATIONAL ASSOCIATION in its capacity as a Lender - ---------------------------- By: ----------------------------(Seal) Name: Title: WITNESS: LASALLE BUSINESS CREDIT, INC., in its capacity as a Lender - ---------------------------- By: ----------------------------(Seal) Name: Title: 14 ACKNOWLEDGMENT AND CONSENT -------------------------- BPC HOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Parent"), BERRY IOWA CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Berry Iowa"), BERRY TRI-PLAS CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Berry Tri-Plas"), AEROCON, INC., a corporation organized and existing under the laws of the State of Delaware ("AeroCon"), BERRY STERLING CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Berry Sterling"), BERRY PLASTICS DESIGN CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Berry Design"), PACKERWARE CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("PackerWare"), VENTURE PACKAGING, INC., a corporation organized and existing under the laws of the State of Delaware ("Venture Holding"), BERRY PLASTICS TECHNICAL SERVICES, INC., a corporation organized and existing under the laws of the State of Delaware, formerly known as Venture Packaging Southeast, Inc. ("Venture Southeast"), VENTURE PACKAGING MIDWEST, INC., a corporation organized and existing under the laws of the State of Delaware ("Venture Midwest"), KNIGHT PLASTICS, INC., a corporation organized and existing under the laws of the State of Delaware ("Knight"), CPI HOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("CPI"), CARDINAL PACKAGING, INC., a corporation organized and existing under the laws of the State of Ohio ("Cardinal"), and POLY-SEAL CORPORATION, a corporation organized and existing under the laws of the State of Delaware ("Poly-Seal") (the Parent, Berry Iowa, Berry Tri-Plas, AeroCon, Berry Sterling, Berry Design, PackerWare, Venture Holding, Venture Southeast, Venture Midwest, Knight, CPI, Cardinal, and Poly-Seal are herein collectively and individually referred to as the "Guarantor") hereby consent and agree to the foregoing Amendment and hereby acknowledge and agree that (i) the joint and several obligations and liabilities of the Guarantors under and in connection with those certain Guaranty of Payment Agreements and all other Financing Documents executed and delivered in connection with the Obligations (as amended, restated, supplemented or otherwise modified, the "Guaranty Documents") shall include and to the extent necessary are hereby amended to include the Italian Obligations and (ii) neither the execution and delivery of the foregoing Amendment nor any of the terms, provisions and agreements contained in the foregoing Amendment shall in any manner impair, lessen, waive, discharge or otherwise adversely affect the indebtedness, liabilities, and obligations of the Guarantors under and in connection with any and all Financing Documents previously, now or hereafter executed and delivered by either of them, including, without limitation, the Guaranty Documents. IN WITNESS WHEREOF, each of the parties hereby have executed and delivered this Acknowledgment under their respective seals as of the day and year first written above. WITNESS OR ATTEST: BERRY IOWA CORPORATION - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: BERRY TRI-PLAS CORPORATION - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: BERRY STERLING CORPORATION - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: AERO CON, INC. - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: PACKERWARE CORPORATION - ---------------------------- By: ----------------------------(SEAL) Name: Title: 2 WITNESS OR ATTEST: BERRY PLASTICS DESIGN CORPORATION - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: BPC HOLDING CORPORATION - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: VENTURE PACKAGING, INC. - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: BERRY PLASTICS TECHNICAL SERVICES, INC., f/k/a Venture Packaging Southeast, Inc. - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: VENTURE PACKAGING MIDWEST, INC. - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: KNIGHT PLASTICS, INC. - ---------------------------- By: ----------------------------(SEAL) Name: Title: 3 WITNESS OR ATTEST: CPI HOLDING CORPORATION - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: CARDINAL PACKAGING, INC. - ---------------------------- By: ----------------------------(SEAL) Name: Title: WITNESS OR ATTEST: POLY-SEAL CORPORATION - ---------------------------- By: ----------------------------(SEAL) Name: Title: 4 EX-10.33 14 a2042389zex-10_33.txt EXHIBIT 10.33 Ex. 10.33 LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made this ___ day of July, 2000, by and among BERRY PLASTICS CORPORATION, a corporation organized under the laws of the State of Delaware (the "Borrower"); GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of New York ("GE Capital"), and each other financial institution which is a party to this Agreement, whether by execution and delivery of this Agreement or otherwise pursuant to Section 9.5 (Assignments by Lender) (collectively, the "Lenders" and individually, a "Lender"); GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of New York, in its capacity as administrative agent for the Lenders (the "Agent"); and BANK OF AMERICA, N.A., a national banking association, in its capacity as collateral agent for the Agent and the Lenders (the "BofA Agent"). RECITALS A. The Borrower has applied to the Lenders for a term loan facility in the maximum principal amount of $25,000,000 to be used by the Borrower for the Permitted Uses described in this Agreement. B. The Lenders severally are willing to make the term loan facility available to the Borrower upon the terms and subject to the conditions set forth in this Agreement. ARTICLE I DEFINITIONS Section 1.1 Certain Defined Terms. As used in this Agreement, the terms defined in the Preamble and Recitals hereto shall have the respective meanings specified therein, and the following terms shall have the following meanings: "Account" individually and "Accounts" collectively mean all presently existing or hereafter acquired or created accounts, accounts receivable, contract rights, notes, drafts, instruments, acceptances, chattel paper, leases and writings evidencing a monetary obligation or a security interest in, or a lease of, goods, all rights to receive the payment of money or other consideration under present or future contracts (including, without limitation, all rights to receive payments under presently existing or hereafter acquired or created letters of credit), or by virtue of merchandise sold or leased, services rendered, by or set forth in or arising out of any present or future chattel paper, note, draft, lease, acceptance, writing, bond, insurance policy, instrument, document or general intangible, and all extensions and renewals of any thereof, all rights under or arising out of present or future contracts, agreements or general interest in merchandise which gave rise to any or all of the foregoing, including all goods, all claims or causes of action now existing or hereafter arising in connection with or under any agreement or document or by operation of law or otherwise, all collateral security of any kind (including, without limitation, real property mortgages and deeds of trust) and letters of credit given by any Person with respect to any of the foregoing, all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to any or all of the foregoing and all general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all proceeds (cash and non-cash) of the foregoing. "Account Debtor" means any Person who is obligated on an Account and "Account Debtors" mean all Persons who are obligated on the Accounts. "Additional Subordinated Debt" means that certain Indebtedness for Borrowed Money of the Borrower (and all guarantees thereof by the Borrower and its Subsidiaries) issued in favor of United States Trust Company of New York, as trustee for the holders of the 12-1/4% Series B Senior Subordinated Notes (and any other promissory notes hereafter issued in exchange therefor as contemplated by the Indenture) due 2004 in a stated principal amount up to Twenty-five Million Dollars ($25,000,000). "Additional Subordinated Debt (Cardinal)" means that certain Indebtedness for Borrowed Money of the Borrower (and all guarantees thereof by the Borrower and its Subsidiaries) issued in favor of United States Trust Company of New York, as trustee for the holders of the 11% Senior Subordinated Notes (and any other promissory notes hereafter issued in exchange therefor as contemplated by the Indenture) due 2007 in a stated principal amount of up to Seventy-five Million Dollars ($75,000,000). "Additional Subordinated Debt Loan Documents" means any and all promissory notes, agreements, documents or instruments now or at any time evidencing, securing, guarantying or otherwise executed and delivered in connection with the Additional Subordinated Debt, as the same may from time to time be amended, restated, supplemented or modified. "Additional Subordinated Debt Loan Documents (Cardinal)" means any and all promissory notes, agreements, documents or instruments now or at any time evidencing, securing, guarantying or otherwise executed and delivered in connection with the Additional Subordinated Debt (Cardinal), as the same may from time to time be amended, restated, supplemented or modified. "AeroCon, Inc." means AeroCon, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Affiliate" means, with respect to any designated Person, any other Person, (a) directly or indirectly controlling, directly or indirectly controlled by, or under direct or indirect common control with the Person designated, (b) directly or indirectly owning or holding ten percent (10%) or more of any equity interest in such designated Person, or (c) ten percent (10%) or more of whose stock or other equity interest is directly or indirectly owned or held by such designated Person. For purposes of this definition, the term "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or other equity interests or by contract or otherwise. 2 "Agent" means the Person defined as the "Agent" in the preamble of this Agreement and shall also include any successor Agent appointed pursuant to Section 8.7 (Successor Agent). "Agent's Obligations" shall mean any and all Obligations payable solely to and for the exclusive benefit of the Agent by the Borrower under the terms of this Agreement and/or any of the other Financing Documents. "Agreement" means this Loan and Security Agreement, as amended, restated, supplemented or otherwise modified in writing in accordance with the provisions of Section 9.2 (Amendments; Waivers). "Alternate Index Rate" means the sum of (a) the Index Rate plus (b) the Applicable Margin. "Applicable Interest Rate" means (a) the LIBOR Rate, or (b) the Alternate Index Rate. "Applicable Margin" means the applicable rate per annum to be added to the LIBOR Base Rate or the Index Rate, as set forth in Section 2.2.1 (Applicable Interest Rates). "Asset Disposition" means the disposition of any or all of the Assets of the Borrower or any Subsidiary of the Borrower, whether by sale, lease, transfer or other disposition (including any such disposition effected by way of merger or consolidation) other than Permitted Asset Dispositions. "Assets" means at any date all assets that, in accordance with GAAP consistently applied, should be classified as assets on a consolidated balance sheet of the Borrower and its Subsidiaries. "Assignee" has the meaning set forth in Section 9.5 (Assignments by Lenders). "Bank of America" means Bank of America, N.A. and its successors and assigns. "Bankruptcy Code" means the United States Bankruptcy Code, as amended from time to time, and any successor Laws. "Berry Acquisition" means Berry Plastics Acquisition Corp., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Berry Design" means Berry Plastics Design Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Berry Sterling" means Berry Sterling Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Berry UK" means Berry Plastics UK Limited, a company organized and existing under the laws of the England and formerly known as Norwich Injection Moulders Limited, and its successors and assigns. 3 "BIC" means Berry Iowa Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "BofA Agent" means the Person defined as the "Agent" under the provisions of the BofA Financing Agreement and shall also include any successor agent appointed pursuant to the provisions of the BofA Financing Agreement. "BofA Commitments" means the "Commitments" as that term is defined in the BofA Financing Agreement. "BofA Financing Agreement" means that certain Third Amended and Restated Financing and Security Agreement dated as of May 9, 2000, by and among the Borrower, NIM Holdings, and Berry UK; Bank of America, Fleet Capital Corporation, a corporation organized and existing under the laws of the State of Rhode Island, GE Capital, Heller Financial, Inc., a corporation organized and existing under the laws of the State of Delaware, PNC Bank, National Association, a national banking association, LaSalle Business Credit, Inc., a corporation organized and existing under the laws of the State of Delaware, and each other financial institution which is a party to the BofA Financing Agreement; GE Capital, as documentation agent, and the BofA Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or otherwise modified. "BofA Financing Documents" means the "Financing Documents" as that term is defined in the BofA Financing Agreement. "BofA Lender" means each "Lender" under the terms of the BofA Financing Agreement; and "BofA Lenders" means all "Lenders" under the terms of the BofA Financing Agreement. "BofA Obligations" means the "Obligations" as that term is defined in the BofA Financing Agreement, subject to any limitations set forth in the Intercreditor Agreement. "BofA Requisite Lenders" means the "Requisite Lenders" as that term is defined in the BofA Financing Agreement. "BofA Termination Date" has the meaning given such term in the Intercreditor Agreement. "BTP" means Berry Tri-Plas Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Business Day" means any day other than a Saturday, Sunday or other day on which (i) in the case of GE Capital (as Agent and Lender), commercial banks in the State of New York are authorized or required to close, and (ii) in the case of the Lenders other than GE Capital, those Lenders are open for the transaction of business at the addresses stated after their names on the signature pages of this Agreement. "Capital Expenditure" means an expenditure which would be classified as such in accordance with GAAP (whether payable in cash or other property or accrued as a liability) for Fixed or Capital Assets, including, without limitation, the entering into of a Capital Lease. 4 "Capital Lease" means with respect to any Person any lease of real or personal property, for which the related Lease Obligations have been or should be, in accordance with GAAP consistently applied, reflected as a liability on the balance sheet of that Person. "Capsol Italy" means Capsol S.p.A. Stampaggio Resine Termoplastiche, a joint stock corporation organized and existing under the laws of the Republic of Italy, and its successors and assigns. "Cardinal" means Cardinal Packaging, Inc., a corporation organized and existing under the laws of the State of Ohio, and its successors and assigns. "Cash Equivalents" means (a) securities with unexpired maturities of one year or less issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit with unexpired maturities of one (1) year or less or money market accounts maintained with, the Agent, any Lender, Bank of America, any BofA Lender, any Affiliate of the Agent, any Lender, Bank of America, or any BofA Lender, or any other domestic commercial bank having capital and surplus in excess of One Hundred Million Dollars ($100,000,000.00) or such other domestic financial institutions or domestic brokerage houses to the extent disclosed to, and approved by, the BofA Agent and (c) commercial paper of a domestic issuer rated at least either A-1 by Standard & Poor's Corporation (or its successor) or P-1 by Moody's Investors Service, Inc. (or its successor) with unexpired maturities of six (6) months or less. In addition, (i) with respect to Berry UK and NIM Holdings, Cash Equivalents shall also mean (a) securities with unexpired maturities of one year or less issued or fully guaranteed or insured by the British National Government or any agency thereof and (b) certificates of deposit with unexpired maturities of one year or less or money market instruments issued by Barclays Bank PLC and (ii) with respect to the Italian Holding Company, Ociesse and Capsol Italy, Cash Equivalents shall also mean (a) securities with unexpired maturities of one year of less issued or fully guaranteed or insured by the Italian national government or any agency thereof and (b) certificates of deposit with unexpired maturities of one year or less or money market instruments issued by the largest financial institution based in the Republic of Italy. "Chattel Paper" means a writing or writings which evidence both a monetary obligation and a security interest in or lease of specific goods; any returned, rejected or repossessed goods covered by any such writing or writings and all proceeds (in any form including, without limitation, accounts, contract rights, documents, chattel paper, instruments and general intangibles) of such returned, rejected or repossessed goods; and all proceeds (cash and non-cash) of the foregoing. "Closing Date" means the date of this Agreement. "Closing Fee" has the meaning described in Section 2.3.4 (the Closing Fee). "Collateral" means all property of the Borrower and each Subsidiary Guarantor subject from time to time to the Liens of this Agreement, any of the Security Documents and/or any of the other Financing Documents, together with any and all cash and non-cash proceeds and products thereof. 5 "Collateral Agent" initially means the BofA Agent, in its capacity as collateral agent for the Agent, the Lenders, the BofA Agent and the BofA Lenders with respect to any and all collateral and security for the BofA Obligations and the Obligations. Effective immediately on the BofA Termination Date and upon the request of the Agent, the Agent shall succeed the BofA Agent as the Collateral Agent under any and all Security Documents without further notice to, or consent or agreement of, the Borrower or any other Person. Notwithstanding the foregoing, if at any time any payment, or portion thereof, made by, or for the account of, the Borrower or any other Person on account of any of the BofA Obligations is set aside by any court or trustee having jurisdiction as a voidable preference or fraudulent conveyance or must otherwise be restored or returned by the BofA Agent and/or any of the BofA Lenders to the Borrower or to any other Person under any insolvency, bankruptcy or other federal and/or state laws or as a result of any dissolution, liquidation or reorganization of the Borrower or such other Person or upon, or as a result of, the appointment of any receiver, intervenor or conservator of, or trustee, or similar officer for, the Borrower or such Person or any substantial part of its or their properties or assets, the parties hereto agree that the BofA Agent shall be reinstated and shall continue as the Collateral Agent under the Security Documents all as though such payment(s) had not been made. "Collection" means each check, draft, cash, money, instrument, item, and other remittance in payment or on account of payment of the Accounts or otherwise with respect to any Collateral, including, without limitation, cash proceeds of any returned, rejected or repossessed goods, the sale or lease of which gave rise to an Account, and other proceeds of Collateral; and "Collections" means the collective reference to all of the foregoing. "Commitment" means with respect to each Lender, such Lender's Term Loan Commitment, and "Commitments" means the collective reference to the Term Loan Commitments of all of the Lenders. "Commitment Fee" has the meaning described in Section 2.3.3 (the Commitment Fee). "Committed Amount" means with respect to each Lender, such Lender's Term Loan Committed Amount, and "Committed Amounts" means collectively the Term Loan Committed Amount of each of the Lenders. "Commonly Controlled Entity" means an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue Code. "Compliance Certificate" means a periodic Compliance Certificate described in Section 6.1.1(a) (Financial Statements). "Copyrights" means and includes, in each case whether now existing or hereafter arising, all of the Borrower's or any Subsidiary's rights, title and interest in and to (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, copyright applications, and all renewals of any of the foregoing, (b) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past, current or future infringements of any of the foregoing, (c) the right to sue for past, present and future infringements of 6 any of the foregoing, and (d) all rights corresponding to any of the foregoing throughout the world. "CPI" means CPI Holding Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Debt Service" means for any period of determination thereof an amount equal to the total of the aggregate amount of all payments of principal and interest with respect to Indebtedness for Borrowed Money of the Borrower, the Subsidiary Guarantors, Berry UK, NIM Holdings and, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, as appropriate, scheduled to be due and payable during such period, excluding any "Term Loan B Mandatory Prepayments" with respect to "Excess Cash Flow" (as defined in the BofA Financing Agreement), any "UK Term Loan Mandatory Prepayment" with respect to "UK Excess Cash Flow" (as defined in the BofA Financing Agreement), and any Term Loan Mandatory Prepayment with respect to Excess Cash Flow." "Debt Service Coverage Ratio" means as to the Borrower, each of the Subsidiary Guarantors, Berry UK, NIM Holdings, and, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, on a consolidated basis, for any period of determination thereof the ratio of (a) EBITDA to (b) Debt Service. "Deed of Trust - Arlington Heights" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from Knight to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Arlington Heights grants to the Collateral Agent for the benefit of the BofA Lenders ratably and the BofA Agent, a first priority Lien on that certain property located in Arlington Heights, Illinois as further described therein and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deed of Trust - Baltimore" means that certain deed of trust or mortgage dated as of May 9, 2000 from Poly-Seal to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Baltimore grants to the Collateral Agent for the benefit of the BofA Lenders ratably and the BofA Agent, a first priority Lien on that certain property located in Baltimore, Maryland as further described therein and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deed of Trust - Indian Trail" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from BTP to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Indian Trail grants to the Collateral Agent for the benefit of the BofA Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on that certain property known generally as Wesley Chapel-Stouts Road, Indian Trail, North Carolina 7 28079 and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deed of Trust - Evansville" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from the Borrower to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Evansville grants to the Collateral Agent for the benefit of the BofA Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on that certain property known generally as 101 Oakley Street, Evansville, Indiana 47710 and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deed of Trust - Henderson" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from the Borrower to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Henderson grants to the Collateral Agent for the benefit of the BofA Lenders ratably and for the benefit of the BofA Agent, a second priority Lien on that certain property known generally as 800 East Horizon Drive, Henderson, Nevada 89009 and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a third priority Lien on such property. "Deed of Trust - Iowa Falls" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from BIC to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Iowa Falls grants to the Collateral Agent for the benefit of the BofA Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on that certain property known generally as 1036 Industrial Park Road, Iowa Falls, Iowa 50126 and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deed of Trust - Lawrence" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from PackerWare to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Lawrence grants to the Collateral Agent for the benefit of the BofA Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on that certain property known generally as 2330 Packer Road, Lawrence, Kansas 66044 and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deed of Trust - Monroeville" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from Venture Midwest to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Monroeville grants to the Collateral Agent for the benefit of the BofA Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on that certain property located in Huron County, Ohio, as further described therein and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. 8 "Deed of Trust - Streetsboro" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from Cardinal to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Streetsboro grants to the Collateral Agent for the benefit of the BofA Lenders ratably and the BofA Agent, a first priority Lien on that certain property located in Streetsboro, Ohio as further described therein and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deed of Trust - Suffolk" means that certain amended and restated credit line deed of trust, assignment and security agreement dated as of May 9, 2000 from Berry Design to or for the benefit of the Collateral Agent, as the same may from time to time be amended, restated, supplemented or modified, which Deed of Trust - Suffolk grants to the Collateral Agent for the benefit of the BofA Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on that certain property known generally as 1401 Progress Road, Suffolk, Virginia and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deed of Trust - Woodstock" means that certain amended and restated deed of trust or mortgage dated as of May 9, 2000 from Knight to or for the benefit of the Collateral Agent, as the same has been amended and may from time to time be further amended, restated, supplemented or modified, which Deed of Trust - Woodstock grants to the Collateral Agent for the benefit of the BofA Lenders ratably and the BofA Agent, a first priority Lien on that certain property located in Woodstock, Illinois as further described therein and which grants to the Collateral Agent for the benefit of the Lenders ratably and the Agent, a second priority Lien on such property. "Deeds of Trust" means the collective reference to the Deed of Trust - Arlington Heights, the Deed of Trust - Baltimore, the Deed of Trust - Streetsboro, the Deed of Trust - Woodstock, the Deed of Trust - Indian Trail, the Deed of Trust - Evansville, the Deed of Trust - Henderson, the Deed of Trust - - Iowa Falls, the Deed of Trust - Lawrence, the Deed of Trust - Monroeville, and the Deed of Trust - Suffolk. "Default" means an event that, with the giving of notice or lapse of time, or both, would constitute an Event of Default under the provisions of this Agreement. "Distribution" means (a) the payment of any dividends or other distributions on capital stock of the Borrower (except distributions in any class of capital stock) and (b) the redemption or acquisition of capital stock or Subordinated Indebtedness of the Borrower unless made contemporaneously from the Net Proceeds of the sale of capital stock (excluding the Preferred Stock) or the issuance of Subordinated Indebtedness to the extent permitted by the provisions of this Agreement or otherwise consented to by the BofA Agent at any time on or before the BofA Termination Date and, thereafter, the Agent. "Documents" means all documents of title, whether now existing or hereafter acquired or created, and all proceeds (cash and non-cash) of the foregoing. 9 "Dollar" or "Dollars" means United States Dollars. "EBITDA" means as to the Borrower, Berry UK, NIM Holdings, the Subsidiary Guarantors, and, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, on a consolidated basis, as of any date or for any period of determination, the sum of (a) the net profit (or loss) determined in accordance with GAAP consistently applied, plus (b) interest expense and income Taxes or alternative minimum Taxes for such period to the extent deducted in the calculation of net income (or loss), plus (c) depreciation and amortization of Assets for such period, plus (d) unusual expenses associated with the write-off of the capitalized portion of financing costs, minus (e) non-cash gains from Asset sales other than sales of Inventory in the ordinary course of business, plus (f) non-cash losses from Asset sales other than sales of Inventory in the ordinary course of business, plus, (g) non-cash extraordinary losses, minus (h) extraordinary gains, minus (i) interest income, minus (j) any gain relating to the accumulated effect of any change in accounting method, plus (k) any loss relating to the accumulated effect of any change in accounting method, each item in clauses (a) through (k) calculated pursuant to GAAP for such period, plus, (l) any non-cash compensation expenses, minus, (m) any non-cash compensation gains., plus (n) unusual or nonrecurring non-cash losses or expenses, plus (o) non-recurring acquisition-related cash expenses up to $5,000,000 for fiscal year 2000 only. In connection with the calculation of any financial covenant provided in Section 6.1.13 following the closing and consummation of any Permitted Acquisition, EBITDA shall include each Subject Transaction which constitutes a Permitted Acquisition, with such calculation to be based on a twelve (12) month trailing period reflecting actual and historical performance of the Subject Transaction. "Enforcement Costs" means all commercially reasonable expenses, charges, costs and fees whatsoever (including, without limitation, reasonable outside and allocated in-house counsel attorney's fees and expenses) of any nature whatsoever reasonably paid or incurred by or on behalf of the Agent and/or any of the Lenders in connection with (a) any or all of the Obligations, this Agreement and/or any of the other Financing Documents and (b) the creation, perfection, collection, maintenance, preservation, defense, protection, realization upon, disposition, sale or enforcement of all or any part of the Collateral, this Agreement or any of the other Financing Documents, including, without limitation, those costs and expenses more specifically enumerated in Section 3.7 (Costs) and Section 9.10 (Enforcement Costs). The Lenders agree that the Borrower shall have no obligation to reimburse any Lender, other than the Agent, for legal fees and expenses incurred by such Lender in connection with its review, execution and delivery of any of the Financing Documents, to the extent such legal fees and expenses exceed Five Thousand Dollars ($5,000). "Equipment" means all equipment, machinery, computers, chattels, tools, parts, machine tools, furniture, furnishings, fixtures and supplies of every nature, presently existing or hereafter acquired or created and wherever located, whether or not the same shall be deemed to be affixed to real property, together with all accessions, additions, fittings, accessories, special tools, and improvements thereto and substitutions therefor and all parts and equipment which may be attached to or which are necessary or beneficial for the operation, use and/or disposition of such personal property, all licenses, warranties, franchises and general intangibles related thereto or necessary or beneficial for the operation, use and/or disposition of the same, together with all Accounts, Chattel Paper, Instruments and other consideration received by the Borrower or any 10 Subsidiary Guarantor on account of the sale, lease or other disposition of all or any part of the foregoing, and together with all rights under or arising out of present or future Documents and contracts relating to the foregoing and all proceeds (cash and non-cash) of the foregoing. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "Event of Default" has the meaning described in ARTICLE VII (Default and Rights and Remedies). "Excess Cash Flow" means for any annual period of determination thereof and with respect to the Borrower and the Subsidiary Guarantors only and not including Berry UK or NIM Holdings, an amount equal to fifty percent (50%) of the sum of (a) EBITDA, less (b) non-financed Capital Expenditures permitted by Section 6.2.6 (Capital Expenditures), less (c) cash income Taxes and alternative minimum Taxes, less (d) increases in working capital, plus (e) decreases in working capital, less (f) Debt Service, as shown on the annual financial statements for such annual period, furnished to the Agent in accordance with Section 6.1.1 (Financial Statements); or in the event that the Borrower fails to deliver such financial statements to the Agent as and when required, the Agent shall estimate, in its sole, but commercially reasonable discretion, the amount of Excess Cash Flow for such period. "Federal Funds Rate" means for any day of determination, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day) by the Federal Reserve Bank for the next preceding Business Day) by the Federal Reserve Bank of Richmond or, if such rate is not so published for any day that is a Business Day, the average of quotations for such day on such transactions received by the Agent from three (3) Federal funds brokers of recognized standing selected by the Agent. "Fees" means the collective reference to each fee payable to the Agent, for its own account or for the ratable benefit of the Lenders, under the terms of this Agreement or under the terms of any of the other Financing Documents, including, without limitation, the Commitment Fee and the Closing Fee. "Financing Documents" means at any time collectively this Agreement, the Notes, the Security Documents, and any other instrument, agreement or document previously, simultaneously or hereafter executed and delivered by the Borrower, any Subsidiary Guarantor, and/or any other Person, singly or jointly with another Person or Persons, evidencing, securing, guarantying or in connection with this Agreement, any Note, any of the Security Documents, and/or any of the Obligations, all as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "Fixed or Capital Assets" of a Person at any date means all assets which would, in accordance with GAAP consistently applied, be classified on the balance sheet of such Person as property, plant or equipment at such date. "Fixed Charges" means as to the Borrower, Berry UK, NIM Holdings, the Subsidiary Guarantors, and, upon closing and consummation of the Italian Target Stock Purchase 11 Transaction, the Italian Holding Company, Capsol Italy and Ociesse, on a consolidated basis, for any period of determination, the scheduled payments of principal and cash interest on account of all Indebtedness for Borrowed Money and on account of all Capital Leases, plus cash income Taxes, plus cash dividends declared or paid. "Fixed Charge Coverage Ratio" means for any period of determination with respect to the Borrower, Berry UK, NIM Holdings, the Subsidiary Guarantors, and, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, on a consolidated basis, the ratio of (a) EBITDA, less the aggregate amount of all non-financed Capital Expenditures for such period, plus all cash proceeds from Permitted Asset Dispositions to the extent reinvested into Fixed or Capital Assets if and to the extent permitted by the provisions of this Agreement, to (b) Fixed Charges. "Funded Debt" means as to the Borrower, Berry UK, NIM Holdings, each of the Subsidiary Guarantors, and, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, on a consolidated basis, as of any date of determination, (a) the aggregate of all Indebtedness for Borrowed Money of the Borrower, Berry UK, NIM Holdings, each of the Subsidiary Guarantors, and, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, whether secured or unsecured (but excluding, without duplication, loans by the Borrower to one or more of the Subsidiary Guarantors, Berry UK, NIM Holdings, the Italian Holding Company, Capsol Italy and/or Ociesse), having a final maturity (or which by the terms thereof is renewable or extendible at the option of the obligor for a period ending) more than a year after that date, including current maturities of long-term Indebtedness for Borrowed Money (as determined in accordance with GAAP), less (b) the aggregate amount of all cash balances and Cash Equivalents of the Borrower, Berry UK, NIM Holdings, any of the Subsidiary Guarantors, and/or, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and/or Ociesse. "GAAP" means generally accepted accounting principles in the United States of America in effect from time to time, except that with respect to any Subsidiary Guarantor which is not a domestic Subsidiary, GAAP means generally accepted accounting principles in the jurisdiction of such Subsidiary's formation in effect from time to time. Notwithstanding the foregoing, with respect to (i) any financial statements which consolidate any foreign Subsidiary Guarantor with the Borrower or any other Subsidiary Guarantor or (ii) any financial covenant relating to any foreign Subsidiary, the Borrower and/or any Subsidiary Guarantor on a consolidated basis, GAAP shall mean generally accepted accounting principles in the United States of America in effect from time to time. "General Intangibles" means all general intangibles of every nature, whether presently existing or hereafter acquired or created, and without implying any limitation of the foregoing, further means all books and records, claims (including without limitation all claims for income tax and other refunds), choses in action, claims, causes of action in tort or equity, contract rights, judgments, customer lists, Patents, Trademarks, licensing agreements, rights in intellectual property, goodwill (including goodwill of the business of the Borrower or any Subsidiary Guarantor symbolized by and associated with any and all Trademarks, trademark licenses, Copyrights and/or service marks), royalty payments, licenses, rights as lessee under any lease of 12 real or personal property, literary rights, Copyrights, service names, service marks, logos, trade secrets, amounts received as an award in or settlement of a suit in damages, deposit accounts, interests in joint ventures, general or limited partnerships, or limited liability companies or partnerships, rights in applications for any of the foregoing, books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to any or all of the foregoing and all general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all proceeds (cash and non-cash) of the foregoing. "Governmental Authority" means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any department, agency or instrumentality thereof. "Guarantor" means the Parent or any Subsidiary Guarantor or their respective successors and assigns, as the case may be; and "Guarantors" means the Parent, each and every Subsidiary Guarantor, and each of their respective successors and assigns. "Guaranty" means collectively each guaranty of payment for the benefit of the Lenders ratably and the Agent from any or all of the Guarantors, as the same may from time to time be amended, restated, supplemented or otherwise modified. "Hazardous Materials" means (a) any "hazardous waste" as defined by the Resource Conservation and Recovery Act of 1976, as amended from time to time, and regulations promulgated thereunder; (b) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, and regulations promulgated thereunder; (c) any substance the presence of which on any property now or hereafter owned, acquired or operated by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor is prohibited by any Law similar to those set forth in this definition; and (d) any other substance which by Law requires special handling in its collection, storage, treatment or disposal. "Hazardous Materials Contamination" means the contamination (whether presently existing or occurring after the date of this Agreement) by Hazardous Materials of any property owned, operated or controlled by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor or for which the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor has responsibility, including, without limitation, improvements, facilities, soil, ground water, air or other elements on, or of, any property now or hereafter owned, acquired or operated by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor, and any other contamination by Hazardous Materials for which the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor is, or is claimed to be, responsible. "Indebtedness" of a Person means at any date the total liabilities of such Person at such time determined in accordance with GAAP consistently applied. "Indebtedness for Borrowed Money" of a Person means at any time the sum at such time of (a) Indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (b) any obligations of such Person in respect of letters of credit, banker's or 13 other acceptances or similar obligations issued or created for the account of such Person, (c) Lease Obligations of such Person with respect to Capital Leases, (d) all liabilities secured by any Lien on any property owned by such Person, to the extent attached to such Person's interest in such property, even though such Person has not assumed or become personally liable for the payment thereof, (e) obligations of third parties which are being guarantied or indemnified against by such Person or which are secured by the property of such Person; (f) any obligation of such Person or a Commonly Controlled Entity to a Multi-employer Plan; and (h) any obligations, liabilities or indebtedness, contingent or otherwise, under or in connection with, any interest rate or currency swap agreements, cap, floor, and collar agreements, currency spot, foreign exchange and forward contracts and other similar agreements and arrangements; but excluding trade and other accounts payable in the ordinary course of business in accordance with customary trade terms and which are not more than thirty (30) days past due (as determined in accordance with customary trade practices) or which are being disputed in good faith by such Person and for which adequate reserves are being provided on the books of such Person in accordance with GAAP. "Indenture" means collectively (i) that certain indenture dated as of April 21, 1994 by and between the Borrower and the United States Trust Company of New York, as trustee, entered into in connection with the Subordinated Debt, (ii) that certain indenture dated as of August 24, 1998 by and between the Borrower and the United States Trust Company of New York, as trustee, with respect to the Additional Subordinated Debt, and (iii) that certain indenture dated as of July 6, 1999 by and between the Borrower and the United States Trust Company of New York, as trustee, entered into in connection with the Additional Subordinated Debt (Cardinal), each as the same may be amended, restated supplemented or otherwise modified. "Index Rate" means the higher of (a) the Prime Rate, or (b) the sum of (i) the Federal Funds Rate, plus (ii) fifty (50) basis points. "Index Rate Loan" means any Loan for which interest is to be computed with reference to the Alternate Index Rate. "Instrument" means a negotiable instrument (as defined under Article 3 of the Uniform Commercial Code), a "certificated security" (as defined under Article 8 of the Uniform Commercial Code), or any other writing which evidences a right to payment of money and is not itself a security agreement or lease and is of a type which is in the ordinary course of business transferred by delivery with any necessary endorsement. "Intercreditor Agreement" means that certain Intercreditor Agreement dated as of the date hereof by and among the Borrower, the Subsidiary Guarantors, the BofA Agent, the BofA Lenders, the Agent and the GE Lenders, as the same may be amended, restated, supplemented or otherwise modified at any time and from time to time. "Interest Coverage Ratio" means as to the Borrower, Berry UK, NIM Holdings, each of the Subsidiary Guarantors, and, upon closing and consummation of the Italian Target Stock Purchase Transaction, on a consolidated basis, for any period of determination thereof the ratio of (a) EBITDA to (b) cash interest expense, all determined on a consolidated basis in accordance with GAAP consistently applied. 14 "Interest Period" means as to any LIBOR Loan, the period commencing on and including the date such LIBOR Loan is made (or on the effective date of the Borrower's election to convert any Index Rate Loan to a LIBOR Loan in accordance with the provisions of this Agreement) and ending on and including the day which is 30, 60 or 90 days thereafter, as selected by the Borrower in accordance with the provisions of this Agreement, and thereafter, each period commencing on the last day of the then preceding Interest Period for such LIBOR Loan and ending on and including the day which is 30, 60 or 90 days thereafter, as selected by the Borrower, in accordance with the provisions of this Agreement; provided, however that: (a) the first day of any Interest Period shall be a Business Day; (b) if any Interest Period would end on a day that is not 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; and (c) no Interest Period shall extend beyond the Maturity Date. "Interest Rate Election Notice" has the meaning described in Section 2.2.2(e) (Selection of Interest Rates). "Interest Rate/Currency Protection Agreement" means, for any Person, interest rate swap, cap, floor or collar agreements, currency agreements, currency spot, foreign exchange and forward contracts or similar arrangement between such Person and one or more financial institutions providing for the transfer or mitigation of interest or currency risks either generally or under specific contingencies. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from time to time, and the Income Tax Regulations issued and proposed to be issued thereunder. "Inventory" means all now owned and hereafter acquired inventory, goods, merchandise and other personal property furnished under any contract of service or intended for sale or lease, including, without limitation, all raw materials, work-in-progress, finished goods and materials and supplies of any kind, nature or description which are used or consumed in the business, or are or might be used in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods, merchandise and other licenses, warranties, franchises, general intangibles, personal property and all Documents or documents relating to the same and all proceeds (cash and non-cash) of the foregoing. "Italian Holding Company" means Capsol-Berry Plastics, S.r.l., a limited liability company organized and existing under the laws of the Republic of Italy, and its successors and assigns. "Italian Target" means each of Capsol Italy and Ociesse, individually and collectively, and each of their successors and assigns. 15 "Italian Target Stock" means all capital stock issued by the Italian Target acquired or to be acquired by the Italian Holding Company, all in accordance with the Italian Target Stock Purchase Agreement, together with any and all proceeds and products thereof. "Italian Target Stock Purchase Agreement" means that certain Share and Quota Purchase Agreement to be entered into by and among the Borrower, the Italian Holding Company and the shareholders of the Italian Target, as the same may from time to time be amended, restated, supplemented or modified, together with any and all exhibits and schedules thereto, amendments, modifications, and supplements thereto, restatements thereof, and substitutes therefor. "Italian Target Stock Purchase Documents" means collectively the Italian Target Stock Purchase Agreement and any and all other agreements, documents or instruments, previously, now or hereafter executed and delivered by the Borrower, or any other Person in connection with the Italian Target Stock Purchase Transaction, as the same may from time to time be amended, restated, supplemented and modified. "Italian Target Stock Purchase Transaction" means the acquisition of all issued and outstanding Italian Target Stock by the Italian Holding Company in accordance with the provisions of the Italian Target Stock Purchase Agreement. "Knight" means Knight Plastics, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Laws" means all ordinances, statutes, rules, regulations, orders, injunctions, writs, or decrees of any Governmental Authority or political subdivision or agency thereof, or any court or similar entity established by any thereof. "Lease Obligations" of a Person means for any period the rental commitments of such Person for such period under leases for real and/or personal property. "Liabilities" means at any date all liabilities that in accordance with GAAP consistently applied should be classified as liabilities on a consolidated balance sheet of the Borrower and its Subsidiaries. "LIBOR Base Rate" means for any Interest Period with respect to any LIBOR Loan, the rate per annum (rounded upward, if necessary, to the nearest next 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "LIBOR Base Rate" shall mean, for any LIBOR Loan for any Interest Period therefor, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBOR Page, the applicable rate shall be the arithmetic mean of all such rates. For purposes of this definition, Telerate Page 3750 refers to the British Bankers Association Libor Rates 16 (determined at approximately 11:00 a. m (London time)) that are published by Dow Jones Telerate, Inc. "LIBOR Loan" means any Loan for which interest is to be computed with reference to the LIBOR Rate. "LIBOR Rate" means for any Interest Period with respect to any LIBOR Loan, (a) the Applicable Margin, plus (b) the per annum rate of interest calculated pursuant to the following formula: LIBOR Base Rate --------------- 1.00 - Reserve Percentage "Lien" means any mortgage, deed of trust, deed to secure debt, grant, pledge, security interest, assignment, encumbrance, lien, hypothecation, or charge of any kind, whether perfected or unperfected, avoidable or unavoidable, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of any financing statement under the Uniform Commercial Code of any jurisdiction, excluding the precautionary filing of any financing statement by any lessor in a true lease transaction, by any bailor in a true bailment transaction or by any consignor in a true consignment transaction under the Uniform Commercial Code of any jurisdiction or the agreement to give any financing statement by any lessee in a true lease transaction, by any bailee in a true bailment transaction or by any consignee in a true consignment transaction. "Loan" means each of the Term Loans, and "Loans" means the collective reference to the Term Loans. "Maturity Date" means July 1, 2002. "Multi-employer Plan" means a Plan that is a multi-employer plan as defined in Section 4001(a)(3) of ERISA. "Net Casualty Proceeds", when used with respect to any condemnation awards or insurance proceeds allocable to any Collateral, means the gross proceeds from any casualty or condemnation remaining after payment of all expenses (including attorneys' fees) incurred in the collection of such gross proceeds and Taxes payable in connection therewith and payment of the BofA Obligations in full. "Net Proceeds" means gross proceeds (cash and non-cash) or other consideration paid to, or received by, the Borrower or any Subsidiary of the Borrower from (a) any Asset Disposition (including, without limitation, issuance or assumption of Indebtedness or the issuance of Securities), net of customary and reasonable settlement costs, fees, expenses and Taxes payable in connection with such Asset Disposition or (b) any sale, issuance or other offering of Indebtedness or Securities, net of customary and reasonable closing costs, fees and expenses. "NIM Holdings" means NIM Holdings Limited, a company organized and existing under the laws of England, and its successors and assigns. 17 "Norwich" means Norwich Acquisition Limited, a company organized and existing under the laws of England and Wales, and its successors and assigns. "Note" means any Term Loan Note, and "Notes" means collectively each Term Loan Note, and any other promissory note which may from time to time evidence all or any portion of the Obligations. "Ociesse" means Ociesse S.r.l. - Officina Costruzione Stampi - Lavorazioni Meccaniche di Precisione, a limited liability company organized and existing under the laws of the Republic of Italy, and its successors and assigns. "Obligations" means and includes all present and future indebtedness, obligations, and liabilities, whether now existing or contemplated or hereafter arising, of the Borrower to the Lenders and/or the Agent under, arising pursuant to, in connection with and/or on account of the provisions of this Agreement, each Note, each Security Document, and/or any of the other Financing Documents, and/or the Loans, including, without limitation, the principal of, and interest on, each Note, late charges, the Fees, Enforcement Costs, and prepayment fees (if any); and also means any and all renewals, extensions, substitutions, amendments, restatements and rearrangements of any such debts, obligations and liabilities. FOR PURPOSES OF THE INDENTURE, ALL OBLIGATIONS UNDER AND IN CONNECTION WITH THIS AGREEMENT CONSTITUTE AND ARE HEREBY DEEMED "DESIGNATED SENIOR INDEBTEDNESS" AS DEFINED IN THE INDENTURE. "PackerWare" means PackerWare Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Parent" means BPC Holding Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Patents" means and includes, in each case whether now existing or hereafter arising, all of the rights, title and interest of the Borrower and each Subsidiary Guarantor in and to (a) any and all patents and patent applications, (b) any and all inventions and improvements described and claimed in such patents and patent applications, (c) reissues, divisions, continuations, renewals, extensions and continuations-in-part of any patents and patent applications, (d) income, royalties, damages, claims and payments now or hereafter due and/or payable under and with respect to any patents or patent applications, including, without limitation, damages and payments for past and future infringements, (e) rights to sue for past, present and future infringements of patents, and (f) all rights corresponding to any of the foregoing throughout the world. "PBGC" means the Pension Benefit Guaranty Corporation. "Permitted Acquisition" means the acquisition or purchase of, or investment in, any Person, any operating division or unit of any Person, or the capital stock or Assets of any Person or the combination with any Person by the Borrower or any Subsidiary Guarantor (each individually, a "Subject Transaction") regardless of the structure of the Subject Transaction, engaged principally in the lines of business set forth in Section 6.1.7 (Line of Business); provided, however that: 18 (i) the aggregate purchase price of, investment in, acquisition expenditures relating to (excluding customary and reasonable transaction costs) and assumed Liabilities in connection with any such Subject Transaction shall not exceed at any time or in any circumstance the lesser of: (1) the product of (A) the actual EBITDA for (x) the Person which is the target of such Subject Transaction or (y) the seller or the division of the seller of the assets which is the target of such Subject Transaction, as applicable, for the then preceding twelve (12) month period after giving effect to such Subject Transaction (subject to such pro-forma adjustments as shall be reasonably acceptable to the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) in its sole and absolute discretion), and (B) 5, except that for the Italian Target, the required multiple shall be 6.0, or (2) Twenty Million Dollars ($20,000,000) (excluding the Poly-Seal Stock Purchase Transaction), (ii) the aggregate purchase prices of, investments in, acquisition expenditures relating to (excluding customary and reasonable transaction costs) and assumed Liabilities in connection with all Subject Transactions made on or after the Closing Date, excluding the "Poly-Seal Stock Purchase Transaction" (as defined in the BofA Financing Agreement), shall not exceed Thirty Million Dollars ($30,000,000), (iii) such Subject Transaction shall not otherwise constitute or give rise to a Default or an Event of Default, (iv) the Borrower shall have furnished financial projections in form and content reasonably acceptable to the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) which give effect to such Subject Transaction and which project that such Subject Transaction would not cause a Default or Event of Default (provided that the Agent and the Lenders agree that such projections shall not constitute a guaranty of actual performance), (v) if requested by the BofA Agent or the Requisite Lenders, or at any time after the BofA Termination Date, the Agent, a Phase I environmental assessment of any real property to be acquired or purchased or owned by any Person to be acquired or purchased or owned by any Person in which the Borrower or any Subsidiary intends to make an investment, has been performed by a reputable and recognized environmental consulting firm engaged by the Borrower and reasonably acceptable to the BofA Agent or the Agent, as the case may be, and has revealed no material Hazardous Materials Contamination or material violations of any Environmental Laws, the non-remediation of or non-compliance with which would result in a material Liability not reflected in the purchase price, 19 (vi) if and to the extent the Subject Transaction consists of the purchase or acquisition of a Person which is to be a Subsidiary of the Borrower or another Subsidiary of the Borrower or merged into a Subsidiary of the Borrower created for the express purpose of consummating the proposed acquisition: (1) the Borrower shall execute or cause its Subsidiary to execute all documents and take such other actions as the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) may reasonably require to grant to the Collateral Agent a first priority Lien on one hundred percent (100%) of the stock of such Subsidiary for the benefit of the BofA Agent and the BofA Lenders and to grant to the Collateral Agent for the benefit of the Agent and the Lenders a second priority Lien on one hundred percent (100%) of the stock of such Subsidiary, except that no pledge shall be required with respect to the stock of Berry UK or Norwich and no pledge shall be required with respect to the stock of any other foreign Subsidiary if such pledge would result in a materially adverse tax consequence for the Borrower under the Internal Revenue Code or would violate applicable law, and (2) such Subsidiary (other than Berry UK, Norwich or NIM Holdings) shall be designated and qualify immediately after the closing of the Subject Transaction as a Subsidiary Guarantor in accordance with the terms of Section 6.2.2 (Subsidiaries), except that a foreign Subsidiary shall not be designated or required to qualify as a Subsidiary Guarantor if such designation would result in a materially adverse tax consequence for the Borrower under the Internal Revenue Code or violate applicable law, (vii) after giving effect to any borrowings under the "Revolving Loan" (as defined in the BofA Financing Agreement), if any, needed to finance the Subject Transaction, the Borrower and the Subsidiary Guarantors shall have availability under the Revolving Loan in an amount at least equal to Twenty Million Dollars ($20,000,000) and are reasonably expected to have such minimum availability for a period of ten (10) Business Days after closing and consummation of the Subject Transaction, (viii)all legal matters incident to the Subject Transaction shall be acceptable to the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) in its reasonable discretion, (ix) the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) shall have been given no less than thirty (30) days prior written notice of any proposed Subject Transaction and shall have been provided with all information which it 20 may have reasonably requested in connection with such proposed Subject Transaction, (x) if requested by the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent), the BofA Agent or the Agent, as the case may be, shall have received, prior to or simultaneously with the closing of a Subject Transaction, an opinion of counsel reasonably acceptable to the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) in all respects covering the Borrower's or the relevant Subsidiary's, as the case may be, due incorporation, valid existence, good standing and power and authority to enter into the documents contemplated by this Agreement and the Subject Transaction and such other matters as may be reasonably requested by the BofA Agent or, at any time after the BofA Termination Date, the Agent, (xi) unless otherwise agreed by the Requisite Lenders, no Subject Transaction shall be permitted by the terms of this Agreement if the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis and taken as a whole, have had, immediately prior to the date of the closing of such Subject Transaction, three (3) consecutive months of net operating losses, (xii) the aggregate purchase price of, investment in, acquisition expenditures relating to (excluding customary and reasonable transaction costs) and assumed Liabilities in connection with all Subject Transactions in any fiscal year (excluding the Poly-Seal Stock Purchase Transaction) shall not exceed Twenty Million Dollars ($20,000,000), and (xiii)The Agent has consented to the Subject Transaction, which consent the Agent agrees shall not be unreasonably withheld, delayed or conditioned. The Agent and the Lenders agree that the purchase of certain assets of Capsal-Certwood UK Ltd. by Berry UK shall constitute a Permitted Acquisition; provided that Berry UK and/or the Borrower satisfy subparts (ii), (iii), (vi), (viii), (x), (xi) and (xii) of this definition of Permitted Acquisition. "Permitted Asset Disposition" means any one of the following Asset Dispositions; provided that no such Asset Disposition shall be permitted at any time following the occurrence of a Default or an Event of Default or if and to the extent any such Asset Disposition would give rise to a Default or an Event of Default, unless otherwise agreed in writing by the Requisite Lenders: (a) an Asset Disposition which satisfies the following conditions: (i) the sum of (A) the Net Proceeds to be paid to or received by the Borrower and/or any Subsidiary with respect to such Asset Disposition, plus (B) the aggregate amount of all Net 21 Proceeds paid to or received by the Borrower and/or any or all Subsidiaries, is less than or equal to One Million Dollars ($1,000,000) during any fiscal year, and (ii) none of the Assets sold under this clause (a) constitute molds used in the business of the Borrower, NIM Holdings, Berry UK or any Subsidiary Guarantor. (b) sales of Inventory in the ordinary course of business, (c) the licensing of Patents, Trademarks and/or Copyrights, in the ordinary course of business, (d) dispositions of worn, used, surplus or obsolete tangible property in the ordinary course of business; provided that any the proceeds of any such disposition shall be subject to the Liens of the Collateral Agent as and to the extent provided in the BofA Financing Agreement and herein, (e) dispositions of Assets (including Net Casualty Proceeds) to the extent such Assets are replaced with Assets of similar kind and function, provided that the replacement Assets shall be purchased no later than ninety (90) days following the Asset Disposition, the replacement Assets (which shall constitute Collateral) shall be free and clear of Liens other than Permitted Liens that are not Liens securing purchase money or finance lease arrangements, the Borrower, Berry UK, NIM Holdings or the Subsidiary Guarantor, as the case may be, shall give the Collateral Agent at least ten (10) days prior written notice of such Asset Disposition, except for an Asset Disposition which constitutes a casualty. (f) intercompany sales, leases or other dispositions of Assets among and between the Borrower and any and all Subsidiary Guarantors; provided, that any such Assets sold, leased or otherwise disposed of as between the Borrower and any and all Subsidiary Guarantors shall remain subject to the Liens of the Collateral Agent; no intercompany sales, leases or other dispositions of Assets among and between Berry UK or NIM Holdings and the Borrower or any Subsidiary Guarantor shall be permitted without the prior written consent of the Collateral Agent, except that Berry UK and/or NIM Holdings may sell, lease or otherwise transfer Assets to the Borrower, provided that such Assets become subject to Liens of the Collateral Agent (subject only to Permitted Liens) immediately upon any sale or other transfer. (g) the sale of any Fixed or Capital Assets acquired by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor and the leaseback of such Assets within thirty (30) days of acquisition, but only as contemplated and required as part of an intended Capital Lease transaction at the time of acquisition, (h) the sale of molds by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor; provided that the aggregate Net Proceeds of any and all such molds outside 22 the ordinary course of business shall not exceed Five Hundred Thousand Dollars ($500,000) in any fiscal year, (i) the sale of the real property and improvements subject to the Lien of the Deed of Trust - Arlington Heights, provided that the Net Proceeds of such sale are used within 180 days of their receipt to purchase other Fixed or Capital Assets which are to be subject to the Liens of the Collateral Agent, (j) the sale of a portion of the real property and improvements subject to the lien of the Deed of Trust - Evansville as more particularly described on Schedule 1.1B - Evansville Sale Leaseback attached hereto and made a part hereof, provided that the Net Proceeds of such sale are used within 180 days of their receipt to purchase other Fixed or Capital Assets which are to be subject to the Liens of the Collateral Agent; and (k) the sale of Fixed or Capital Assets that are sold in connection with a sale-leaseback transaction referred to in clause (A) of the last sentence of Section 6.2.16.. "Permitted Liens" means: (a) Liens for Taxes (i) which are not delinquent or (ii) which (1) are being diligently contested in good faith and by appropriate proceedings, (2) the Borrower, Berry UK, NIM Holdings or the Subsidiary Guarantor, as appropriate, has the financial ability to pay, with all penalties and interest, at all times without materially and adversely affecting the Borrower, Berry UK, NIM Holdings or the Subsidiary Guarantor, as appropriate, and (3) are not, and will not be with appropriate filing, the giving of notice and/or the passage of time, entitled to priority over any Lien of the Collateral Agent unless and to the extent that a reserve has been established against the "Borrowing Base" (as defined in the BofA Financing Agreement) (or the "UK Borrowing Base" (as defined in the BofA Financing Agreement), as appropriate) in an amount equal to the maximum liability under and in connection with such Taxes, which reserve shall be established by the BofA Agent upon the Borrower's request; (b) deposits or pledges to secure obligations under workers' compensation, social security or similar laws, or under unemployment insurance in the ordinary course of business; (c) Liens securing the BofA Obligations and the Obligations, which Liens securing the BofA Obligations shall be senior to the Liens securing the Obligations; (d) judgment Liens to the extent the entry of such judgment does not constitute an Event of Default under the terms of this Agreement or result in the sale or levy of, or execution on, any of the Collateral; (e) such other Liens, if any, as are set forth on Schedule 4.1.22 attached hereto and made a part hereof; (f) deposits, liens or pledges to secure payments of unemployment and other insurance, old-age pensions or other social security obligations, or the performance of bids, tenders, leases, contracts, public or statutory obligations, surety, stay or appeal bonds, or other similar obligations arising in the ordinary course of business; (g) statutory mechanics', workers', repairmen's, warehousemen's, vendors' or carriers' Liens or other similar statutory Liens arising in the ordinary course of business and securing sums which are not more than thirty (30) days past due, provided that such statutory Liens do not materially impair or affect the use or value of any of the Collateral; (h) statutory landlord's Liens under leases to which the Borrower, Berry UK, NIM Holdings or any Subsidiary is a party; (i) zoning restrictions, easements, rights of way, licenses and restrictions on the use of real property or minor irregularities in title thereto which do not materially impair the use or value of any such real property; (j) "Permitted Encumbrances" (as defined in each of the Deeds of Trust); (k) Liens securing Indebtedness for Borrowed Money permitted by the provisions of Section 6.2.4(g) or 23 Refinancing Indebtedness with respect thereto permitted by the provisions of Section 6.2.4(m); (l) Liens securing obligations under Capital Leases to the extent such Capital Leases are permitted by the provisions of this Agreement, and (m) any Lien arising under any retention of title arrangements entered into in the ordinary course of trading and not entered into primarily for the purposes of securing borrowings. "Permitted Uses" means the payment of outstanding obligations under the "Revolving Loan" (as defined in the BofA Financing Agreement). "Person" means and includes an individual, a corporation, a partnership, a joint venture, a limited liability company or partnership, a trust, an unincorporated association, a Governmental Authority, or any other organization or entity. "Plan" means any pension plan which is covered by Title IV of ERISA and in respect of which the Borrower, any Subsidiary of the Borrower or a Commonly Controlled Entity is an "employer" as defined in Section 3 of ERISA. "Poly-Seal" means Poly-Seal Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Poly-Seal Stock" means all capital stock issued by Poly-Seal acquired or to be acquired by the Borrower, all in accordance with the Poly-Seal Stock Purchase Transaction, together with any and all proceeds and products thereof. "Poly-Seal Stock Purchase Agreement" means that certain Agreement and Plan of Merger dated as of May 9, 2000 by and among the Borrower, Berry Plastics Acquisition and the shareholders of Poly-Seal, as the same may from time to time be amended, restated, supplemented or modified, together with any and all exhibits and schedules thereto, amendments, modifications, and supplements thereto, restatements thereof, and substitutes therefor. "Poly-Seal Stock Purchase Documents" means collectively the Poly-Seal Stock Purchase Agreement and any and all other agreements, documents or instruments, previously, now or hereafter executed and delivered by the Borrower, or any other Person in connection with the Poly-Seal Stock Purchase Transaction, as the same may from time to time be amended, restated, supplemented and modified. "Poly-Seal Stock Purchase Transaction" means the acquisition of all issued and outstanding capital stock of Poly-Seal by the Borrower in accordance with the provisions of the Poly-Seal Stock Purchase Agreement. "Post-Default Rate" means with respect to the principal balance of any of the Obligations, the then applicable rate of interest on such Obligations, plus two percent (2%) per annum. "Preferred Stock" means the issued and outstanding class of Series A-1 Preferred Stock issued by the Parent for sale to one or more of the Parent's existing shareholders for an aggregate purchase price of Twenty-five Million Dollars ($25,000,000). 24 "Prepayment" means a Term Loan Mandatory Prepayment or a Term Loan Optional Prepayment, and "Prepayments" mean collectively all Term Loan Mandatory Prepayments and all Term Loan Optional Prepayments. "Prime Rate" means the highest quoted annual rate of interest which is published from time to time in The Wall Street Journal listing of "Money Rates" as the "Prime Rate". If The Wall Street Journal listing of "Money Rates" is discontinued or substantially altered, the Agent may, in its sole discretion, chose another index of annual interest rates for non-consumer loans which is readily available and verifiable and beyond the control of the Agent; in this event, the substitute index therefore will be considered the Prime Rate although the Agent, in its sole discretion, may increase or decrease the Applicable Margin to make the interest rate comparable to the interest rate under the Prime Rate last in effect. The Borrower acknowledges and agrees that the Prime Rate is a reference used in determining interest rates on certain loans by the Agent, and that it is not intended to be the best or lowest rate of interest charged on any extension of credit to any customer.. The Prime Rate shall be adjusted automatically, without notice, as of the effective date of any change in such published Prime Rate. "Proposed Assignee" has the meaning described in Section 9.5 (Assignments by Lenders). "Pro-forma Financial Projections" has the meaning described in Section 4.1.12 (Pro-forma Financial Statements). "Pro-forma Financial Statements" has the meaning described in Section 4.1.12 (Pro-forma Financial Statements). "Pro Rata Share" means at any time and as to any Lender, the percentage derived by dividing the unpaid principal amount of the Loans owing to that Lender by the aggregate unpaid principal amount of all Loans then outstanding. "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder. "Responsible Officer" means for the Borrower, its chief executive officer, any vice president or president or, with respect to financial matters, its chief financial officer. "Requisite Lenders" means at any time of determination one or more of the Lenders holding at least fifty-one percent (51%) of the Loans; except that at all times on or before the BofA Termination Date, "Requisite Lenders" means at any time of determination one or more of the Lenders and/or the BofA Lenders holding at least fifty-one percent (51%) of the sum of (i) the Loans and (ii) the BofA Commitments, in the aggregate. "Requisite Term Loan Lenders" means at any time of determination one or more Lenders holding at least fifty-one percent (51%) of the Loans. "Reserve Percentage" means, at any time, the then current maximum rate for which reserves (including any basic, supplemental, marginal and emergency reserves) are required to be maintained by member banks of the Federal Reserve System under Regulation D of the Board of 25 Governors of the Federal Reserve System against "Eurocurrency liabilities", as that term is defined in Regulation D. The LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage. The Agent hereby advises the Borrower that as of the date of this Agreement, the Reserve Percentage is equal to zero. "Right of First Refusal Notice" has the meaning described in Section 9.5 (Assignments by Lenders). "Securities" means the collective reference to each and every certificated or uncertificated security which constitutes a "security" under the provisions of Title 8 of the Uniform Commercial Code, and all proceeds (cash and non-cash) of the foregoing and to each and every "investment property" under the provisions of Title 9 of the Uniform Commercial Code (if that definition is included in that Title), and all proceeds (cash and non-cash) of the foregoing. "Security Documents" means the "Security Documents" as defined in the BofA Financing Agreement, as amended to secure the Obligations, all as the same may from time to time be further amended, restated, supplemented or otherwise modified. "Seller" means all of the shareholders of the Italian Target immediately prior to consummation of the Italian Target Stock Purchase Transaction. "Senior Secured Debt - Parent" means that certain Indebtedness for Borrowed Money of the Parent (and all guarantees thereof by the Borrower and its Subsidiaries) in favor of First Trust of New York, National Association, as trustee for the holders of the 12-1/2% Series A Senior Secured Notes due 2006 and the 12-1/2% Series B Secured Notes due 2006 in a stated principal amount of One Hundred Five Million Dollars ($105,000,000). "Senior Secured Debt Loan Documents" means any and all promissory notes, agreements, documents or instruments now or at any time evidencing, securing, guarantying or otherwise executed and delivered in connection with the Senior Secured Debt - Parent, as the same may from time to time be amended, restated, supplemented or modified. "State" means the State of Maryland. "Stockholder's Equity" means as to the Borrower, Berry UK, NIM Holdings, each of the Subsidiary Guarantors, and, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, on a consolidated basis, for any date of determination thereof, the total of capital stock (except treasury stock and net of any note receivable received upon the issuance of any shares of capital stock) and contributed capital, as determined in accordance with GAAP consistently applied, after eliminating all intercompany items. "Subject Transaction" has the meaning given such term in the definition of Permitted Acquisition. "Subordinated Debt" means collectively (i) that certain Indebtedness for Borrowed Money of the Borrower (and all guarantees thereof by the Borrower and its Subsidiaries) in favor 26 of United States Trust Company of New York, as trustee for the holders of the 12-1/4% Senior Subordinated Notes due 2004 in a stated principal amount of One Hundred Million Dollars ($100,000,000), (ii) the Additional Subordinated Debt, and (iii) the Additional Subordinated Debt (Cardinal). "Subordinated Debt Loan Documents" means any and all promissory notes, agreements, documents or instruments now or at any time evidencing, securing, guarantying or otherwise executed and delivered in connection with the Subordinated Debt, as the same may from time to time be amended, restated, supplemented or modified. "Subordinated Indebtedness" means all Indebtedness, including, without limitation, the Subordinated Debt, incurred at any time by the Borrower as and to the extent permitted by the provisions of Section 6.2.4 (Indebtedness), which is subordinated to the Obligations, as set forth in one or more written agreements, all in form and substance satisfactory to the Agent in its reasonable discretion. The Agent and the Lenders agree that Subordinated Indebtedness does not include the Senior Secured Debt - Parent. "Subsidiary" means with respect to any Person, any other Person owning the majority of the voting shares of such first Person. "Subsidiary Guarantor" means BIC, BTP, AeroCon, Berry Sterling, PackerWare, Berry Design, Berry Venture, Venture Southeast, Venture Midwest, Knight, CPI, Cardinal, Poly-Seal, or any other domestic Subsidiary (organized and existing under the laws of any state in the United States) of the Borrower or the Parent which is designated and qualifies as a Subsidiary Guarantor in accordance with the provisions of Section 6.2.2 (Subsidiaries), or any of their respective successors and assigns, as the case may be; and, "Subsidiary Guarantors" means BIC, BTP, AeroCon, Berry Sterling, Berry Design, PackerWare, Berry Venture, Venture Southeast, Venture Midwest, Knight, CPI, Cardinal, Poly-Seal, each other domestic Subsidiary of the Borrower designated and qualified as a "Subsidiary Guarantor" in accordance with the provisions of Section 6.2.2 (Subsidiaries), and all of their respective successors and assigns. In addition, if and to the extent permitted by Italian law, "Subsidiary Guarantor" shall also include the Italian Holding Company, Ociesse and Capsol Italy. For purposes of this Agreement, however, the Agent and the Lenders agree that none of the tangible or intangible assets or properties (excluding capital stock) of Capsol Italy, Ociesse and/or the Italian Holding Company located in the Republic of Italy shall be pledged to the Collateral Agent, the Agent and/or the Lenders as collateral for any of the Obligations. Upon consummation of the Italian Stock Purchase Transaction, if and to the extent permitted by Italian law, all of the Obligations shall be secured by the grant to the Collateral Agent of a second priority assignment, pledge and grant of one hundred percent (100%) of the outstanding shares of capital stock now or at any time hereafter issued by Capsol Italy, Ociesse and/or the Italian Holding Company. "Substitute Purchaser" has the meaning described in Section 9.5 (Assignments by Lenders). "Tangible Capital Funds" means as to the Borrower, Berry UK, NIM Holdings, each of the Subsidiary Guarantors, and, upon closing and consummation of the Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, on a consolidated 27 basis, for any date of determination thereof, the total of (a) all Stockholder's Equity, less (b) all Assets which would be classified as intangible assets under GAAP consistently applied, plus (c) Subordinated Indebtedness. "Taxes" means all taxes and assessments whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character (including all penalties or interest thereon), which at any time shall be assessed, levied, confirmed or imposed by any Governmental Authority on the Borrower, any Subsidiary Guarantor, Berry UK, NIM Holdings or any of its or their properties or Assets or any part thereof or in respect of any of its or their franchises, businesses, income or profits. "Term Loan" and "Term Loans have the meanings described in Section 2.1 (Term Loan Facility). "Term Loan Commitment" and "Term Loan Commitments" have the meanings described in Section 2.1.1 (Term Loan Commitments). "Term Loan Committed Amount" has the meaning described in Section 2.1.1 (Term Loan Commitments). "Term Loan Facility" means the facility established by the Lenders pursuant to Section 2.1 (Term Loan Facility). "Term Loan Mandatory Prepayment" and "Term Loan Mandatory Prepayments" have the meanings described in Section 2.1.3 (Mandatory Prepayments of Term Loan). "Term Loan Optional Prepayment" and "Term Loan Optional Prepayments" have the meanings described in Section 2.1.4 (Optional Prepayments of Term Loans). "Term Loan Pro Rata Share" has the meaning described in Section 2.1 (Term Loan Facility). "Term Loan Note" and "Term Loan Notes" have the meaning described in Section 2.1.2 (Amortization of Term Loans). "Total Term Loan Committed Amount" has the meaning described in Section 2.1.1 (Term Loan Commitments). "Trademarks" means and includes in each case whether now existing or hereafter arising, all of the Borrower's or any Subsidiary Guarantor's rights, title and interest in and to (a) any and all trademarks (including service marks), trade names and trade styles, and applications for registration thereof and the goodwill of the business symbolized by any of the foregoing, (b) any and all licenses of trademarks, service marks, trade names and/or trade styles, whether as licensor or licensee, (c) any renewals of any and all trademarks, service marks, trade names, trade styles and/or licenses of any of the foregoing, (d) income, royalties, damages and payments now or hereafter due and/or payable with respect thereto, including, without limitation, damages, claims, and payments for past, present and future infringements thereof, (e) rights to sue for past, present and future infringements of any of the foregoing, including the right to settle suits 28 involving claims and demands for royalties owing, and (f) all rights corresponding to any of the foregoing throughout the world. "Uniform Commercial Code" means, unless otherwise provided in this Agreement, the Uniform Commercial Code as adopted by and in effect from time to time in the State or in any other jurisdiction, as applicable. "Venture Holdings" means Venture Packaging, Inc., a corporation organized and existing under the laws of the State Delaware, and its successors and assigns. "Venture Midwest" means Venture Packaging Midwest, Inc., a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Venture Southeast" means Berry Plastics Technical Services, Inc., a corporation organized and existing under the laws of the State of Delaware, formerly known as Venture Packaging Southeast, Inc., and its successors and assigns. "Wholly Owned Subsidiary" means any domestic United States Person all the shares of stock or other equity interests of all classes of which (other than directors' qualifying shares) at the time are owned directly or indirectly by the Borrower and/or by one or more Wholly Owned Subsidiaries of the Borrower. Section 1.2 Accounting Terms and Other Definitional Provisions. Unless otherwise defined herein, as used in this Agreement and in any certificate, report or other document made or delivered pursuant hereto, accounting terms not otherwise defined herein, and accounting terms only partly defined herein, to the extent not defined, shall have the respective meanings given to them under GAAP. Unless otherwise defined herein, all terms used herein which are defined by the Uniform Commercial Code shall have the same meanings as assigned to them by the Uniform Commercial Code unless and to the extent varied by this Agreement. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, subsection, schedule and exhibit references are references to articles, sections or subsections of, or schedules or exhibits to, as the case may be, this Agreement unless otherwise specified. As used herein, the singular number shall include the plural, the plural the singular and the use of the masculine, feminine or neuter gender shall include all genders, as the context may require. Reference to any one or more of the Financing Documents shall mean the same as the foregoing may from time to time be amended, restated, substituted, extended, renewed, supplemented or otherwise modified. Notwithstanding the foregoing, the Agent and the Lenders agree that if GAAP at any time changes and such changes have an affect on the computation of any of the covenants contained in Section 6.1.13 (Financial Covenants), the Agent, the Lenders and the Borrower will negotiate in good faith to revise any such affected covenants so as to reverse the effect of such change in GAAP. 29 ARTICLE II THE CREDIT FACILITIES Section 2.1 The Term Loan Facility. 2.1.1 Term Loan Commitments. Subject to and upon the terms of this Agreement, each Lender severally agrees to make a loan (each a "Term Loan"; and collectively, the "Term Loans") to the Borrower in the principal amount set forth below opposite such Lender's name (herein called such Lender's "Term Loan Committed Amount"). The total of each Lender's Term Loan Committed Amount is herein called the "Total Term Loan Committed Amount". The proportionate share set forth below opposite each Lender's name is herein called such Lender's "Term Loan Pro Rata Share": Term Loan Term Loan Lender Committed Amount Pro Rata Share ------ ---------------- -------------- GE Capital $25,000,000 100% Total Term Loan Committed Amount: $25,000,000 100% The obligation of each Lender to make a Term Loan is several and is limited to its Term Loan Committed Amount, and such obligation of each Lender is herein called its "Term Loan Commitment". The Term Loan Commitment of each of the Lenders are herein collectively referred to as the "Term Loan Commitments". The Agent shall not be responsible for the Term Loan Commitment of any Lender; and similarly, none of the Lenders shall be responsible for the Term Loan Commitment of any of the other Lenders; the failure, however, of any Lender to perform its Term Loan Commitment shall not relieve any of the other Lenders from the performance of their respective Term Loan Commitments. 2.1.2 Payment of Term Loans; the Term Loan Notes. The unpaid principal balance of the Term Loans shall be due and payable in full on the Maturity Date. The obligation of the Borrower to pay the Term Loans, with interest, shall be evidenced by a series of promissory notes (each as from time to time extended, amended, restated, supplemented or otherwise modified, a "Term Loan Note" and collectively, the "Term Loan Notes"). Each Term Loan Note shall be dated as the Closing Date and shall be payable to the order of a Lender at the times provided in the Term Loan Note, and shall be in the principal amount of such Lender's Term Loan Committed Amount. 2.1.3 Mandatory Prepayments of Term Loans. Subject to the provisions of Section 2.2.4 (Indemnity), the Borrower shall make the following mandatory prepayments (each a "Term Loan Mandatory Prepayment" and collectively the "Term Loan Mandatory Prepayments") of the Term Loans to the Agent for the ratable benefit of the Lenders: 30 (a) Following payment of the BofA Obligations in full, the Borrower shall make Term Loan Mandatory Prepayments of the Term Loans to the Agent for the ratable benefit of the Lenders annually. Each Term Loan Mandatory Prepayment shall be in the amount of the Excess Cash Flow for the then preceding fiscal year and shall be payable on the date the Borrower shall furnish to the Agent the annual financial statements referred to in Section 6.1.1 (Financial Statements). If, however, the Borrower fails to furnish such financial statements in any given year as and when required, the Borrower shall be required to pay the Term Loan Mandatory Prepayment payable during such calendar year on the date which is ninety (90) days after the close of the Borrower's then preceding fiscal year. (b) To the extent the Net Proceeds of any Asset Disposition (excluding any Asset Disposition by Berry UK or NIM Holdings) (including the sale and issuance of any Securities) by the Borrower or any Subsidiary Guarantor cause the aggregate of all such Asset Dispositions in any fiscal year to exceed Five Hundred Thousand Dollars ($500,000), all of such excess, if any, remaining after payment of the BofA Obligations in full, shall be paid to the Agent as a Term Loan Mandatory Prepayment. Notwithstanding the foregoing, the Borrower shall not be required to make a Term Loan Mandatory Prepayment in connection with (i) any public, private or Rule 144(A) offering of Securities which does not generate any proceeds (other than nominal proceeds), including, for example, the issuance or exercise of warrants with registration rights or the issuance of a resale prospectus for any existing shares of capital stock; (ii) any non-cash Net Proceeds which are Indebtedness for Borrowed Money received by the Borrower or any Subsidiary Guarantor in payment of the purchase price of an Asset which is the subject of a Permitted Asset Disposition; provided that, upon the Collateral Agent's demand, the Borrower and/or the Subsidiary Guarantor, as the case may, on or before the BofA Termination Date, shall take all such actions as shall be reasonably requested by the Collateral Agent to grant to the Collateral Agent for the benefit of the BofA Agent and the ratable benefit of the BofA Lenders a first priority perfected Lien on any such Indebtedness for Borrowed Money and to grant to the Collateral Agent for the benefit of the Agent and the ratable benefit of the Lenders a second priority perfected Lien and at any time after the BofA Termination Date, shall take all such actions as shall be reasonably required by the Collateral Agent to grant to the Collateral Agent for the benefit of the Agent and the ratable benefit of the Lenders, a first priority perfected Lien on any such Indebtedness for Borrowed Money; provided further that the principal amount of all such Indebtedness for Borrowed Money shall not exceed at any time in the aggregate Five Hundred Thousand Dollars ($500,000); 31 (iii) the issuance and sale of the Preferred Stock; and (iv) the sale of the property which is subject to the Lien of the Deed of Trust - Arlington Heights and/or the sale of a portion of the property which is subject to the Lien of the Deed of Trust - Evansville; provided that such sale or sales constitute a Permitted Asset Disposition. (c) Immediately upon closing and consummation of any public or private offering of Indebtedness for Borrowed Money by the Borrower or any Subsidiary Guarantor on or after the Closing Date, the Borrower shall make a Term Loan Mandatory Prepayment in an amount equal to the balance, if any, of one hundred percent (100%) of the Net Proceeds of such public or private offering remaining after payment of the BofA Obligations in full; provided that a Term Loan Mandatory Prepayment shall not be required with respect to: (i) Indebtedness for Borrowed Money permitted by Section 6.2.4 (Indebtedness), other than subsection (d) of Section 6.2.4; and (ii) the issuance of any Indebtedness by the Borrower or any Subsidiary Guarantor, if (A) such Indebtedness is issued pursuant to and is permitted by subsection (d) of Section 6.2.4 and such Indebtedness constitutes a "Refinancing Indebtedness" as defined in subsection (m) of Section 6.2.4 or (B) if the Net Proceeds of such Indebtedness are used, in whole, to finance a Permitted Acquisition or Capital Expenditures as and to the extent permitted by the provisions of this Agreement; and (C) the aggregate amount of Indebtedness under clauses (i) and (ii) of this subsection (b) does not exceed Twenty Million Dollars ($20,000,000). The Borrower shall pay to the Agent on the date of each required Term Loan Mandatory Prepayment accrued interest to such date on the amount prepaid. Each partial Term Loan Mandatory Prepayment shall be applied to the unpaid principal balance of the Term Loans due on the Maturity Date. 2.1.4 Optional Prepayments of Term Loans. Subject to the provisions of Section 2.2.4 (Indemnity), the Borrower may, at its option, at any time and from time to time, prepay (each a "Term Loan Optional Prepayment" and collectively the "Term Loan Optional Prepayments") the Term Loans, in whole or in part, upon five (5) Business Days prior written notice, specifying the date and amount of prepayment. The amount to be so prepaid, together with interest accrued thereon to date of prepayment if the amount is intended as a prepayment of the Term Loans in whole, shall be paid by the Borrower to the Agent for the ratable benefit of the Lenders on the date specified for such prepayment. Partial Term Loan Optional Prepayments shall be in minimum amounts of Five 32 Million Dollars ($5,000,000) and shall be applied to the unpaid principal balance of the Term Loans due on the Maturity Date. Section 2.2 Interest. 2.2.1 Applicable Interest Rates. (a) Each Loan shall bear interest until maturity (whether by acceleration, declaration, extension or otherwise) at either the Alternate Index Rate or the LIBOR Rate, as selected and specified by the Borrower, as appropriate, in an Interest Rate Election Notice furnished to the Agent in accordance with the provisions of Section 2.2.2(e) (Selection of Interest Rates), or as otherwise determined in accordance with the provisions of this Section 2.2, and as may be adjusted from time to time in accordance with the provisions of Section 2.2.3 (Inability to Determine LIBOR Base Rate). (b) Notwithstanding the foregoing, following the occurrence and during the continuance of an Event of Default, at the option of the Agent, all Loans and all other Obligations shall bear interest at the Post-Default Rate. (c) The Applicable Margin for (i) LIBOR Loans shall be four hundred fifty (450) basis points per annum and (ii) Index Rate Loans shall be three hundred (300) basis points. 2.2.2 Selection of Interest Rates. (a) The Borrower shall select the initial Applicable Interest Rate to be charged on the Term Loans . (b) From time to time after the date of this Agreement as provided in this Section, by a proper and timely Interest Rate Election Notice furnished to the Agent in accordance with the provisions of Section 2.2.2(e), the Borrower may select an initial Applicable Interest Rate or Applicable Interest Rates for any Loans or may convert the Applicable Interest Rate and, when applicable, the Interest Period, for any existing Loan to any other Applicable Interest Rate or, when applicable, any other Interest Period. (c) The selection of an Applicable Interest Rate and/or an Interest Period, the election to convert an Applicable Interest Rate and/or an Interest Period to another Applicable Interest Rate or Interest Period, and any other adjustments in an interest rate are subject to the following limitations: (i) the Borrower shall not at any time select or change to an Interest Period that extends beyond the Maturity Date, (ii) no change from the LIBOR Rate to the Alternate Index Rate shall become effective on a day other than a Business Day and unless the Agent or the Lenders, as appropriate, receive any compensation payable pursuant to Section 2.2.4 (Indemnity), on a day which is the last day of the then current Interest Period, no change of an Interest Period shall become effective on a day other than the last day of the then current 33 Interest Period, and no change from the Alternate Index Rate to the LIBOR Rate shall become effective on a day other than a day which is a Business Day, (iii) no more than two (2) different LIBOR Rates may be outstanding at any time and from time to time with respect to the Term Loans, (iv) the first day of each Interest Period shall be a Business Day, (v) the Borrower shall not be entitled to select the LIBOR Rate as the Applicable Interest Rate for any Loans following and during the continuance of a Default or an Event of Default, and (vi) the minimum principal amount of a LIBOR Loan shall be One Million Dollars ($1,000,000). (d) If a request for an advance under the Loans is not accompanied by an Interest Rate Election Notice or does not otherwise include a selection of an Applicable Interest Rate and, if applicable, an Interest Period, or if, after having made a selection of an Applicable Interest Rate and, if applicable, an Interest Period, the Borrower fails or is not otherwise entitled under the provisions of this Agreement to continue such Applicable Interest Rate or Interest Period, the Borrower shall be deemed to have selected the Alternate Index Rate as the Applicable Interest Rate until such time as the Borrower shall have selected a different Applicable Interest Rate and specified an Interest Period in accordance with, and subject to, the provisions of this Section. (e) The Lenders will not be obligated to make Loans, to convert the Applicable Interest Rate on Loans to another Interest Rate, or to change Interest Periods, unless the Agent, shall have received an irrevocable written or telephonic notice (an "Interest Rate Election Notice") from the Borrower specifying the following information: (i) the amount to be converted, (ii) a selection of the Alternate Index Rate or the LIBOR Rate, (iii) the length of the Interest Period if the Applicable Interest Rate selected is the LIBOR Rate, and (iv) the requested date on which such election is to be effective. Any telephonic notice must be confirmed in writing within three (3) Business Days. Each Interest Rate Election Notice for a Loan must be received by the Agent not later than 10:00 a.m. (New York City Time) on the Business Day of any requested borrowing or conversion in the case of a selection of the Alternate Index Rate and not later than 10:00 a.m. (New York City 34 Time) on the third Business Day before the effective date of any requested borrowing or conversion in the case of a selection of the LIBOR Rate.. 2.2.3 Inability to Determine LIBOR Base Rate. In the event that (a) the Agent shall have determined that, by reason of circumstances affecting the London interbank market, adequate and reasonable means do not exist for ascertaining the LIBOR Base Rate for any requested Interest Period with respect to a Loan, the Borrower shall have requested to be made or to be converted to a LIBOR Loan or (b) the Agent shall determine that the LIBOR Base Rate for any requested Interest Period with respect to a Loan the Borrower shall have requested to be made or to be converted to a LIBOR Loan does not adequately and fairly reflect the cost to the Lenders of funding or converting such Loan, the Agent shall give telephonic or written notice of such determination to the Borrower at least one (1) day prior to the proposed date for funding or converting such Loan. If such notice is given, any request for a LIBOR Loan shall be made or converted to an Alternate Index Rate Loan. Until such notice has been withdrawn by the Agent, the Borrower will not request that any Loan be converted to a LIBOR Loan. 2.2.4 Indemnity. The Borrower agrees to indemnify and reimburse the Agent and the Lenders and to hold the Agent and the Lenders harmless from any loss, cost (including administrative costs) or expense which any one or more of the Agent or the Lenders may sustain or incur as a consequence of (a) a default by the Borrower in payment when due of the principal amount of or interest on any LIBOR Loan, (b) the failure of the Borrower to make, or convert the Applicable Interest Rate of, a LIBOR Loan after the Borrower has given an Interest Rate Election Notice, (c) the failure of the Borrower to make any prepayment of a LIBOR Loan after the Borrower has given notice of such intention to make such a prepayment, and/or (d) the making by the Borrower of a prepayment of a LIBOR Loan on a day which is not the last day of the Interest Period for such LIBOR Loan, calculated as provided in the following paragraph, including, without limitation, any such loss or expense arising from the reemployment of funds obtained by the Agent and/or any of the Lenders to maintain any LIBOR Loan or from fees payable to terminate the deposits from which such funds were obtained. The foregoing agreements and covenants of the Borrower shall survive termination or expiration of this Agreement and payment of the Obligations. Contemporaneously with any prepayment of principal of a LIBOR Loan, a prepayment fee shall be due and payable to the Lenders in an amount equal to any loss or expense (other than loss of anticipated profits) arising from the reemployment of funds obtained by any Lender to fund or maintain any LIBOR Loan or from fees payable to terminate the deposits from which such funds were obtained. Neither the Agent nor any of the Lenders shall be obligated to accept any prepayment of principal unless it is accompanied by the prepayment fee, if any, due in connection therewith as calculated pursuant to the provisions of this paragraph. No prepayment fee payable in connection herewith shall in any event or under any circumstances be deemed or construed as a penalty. 35 2.2.5 Payment of Interest. (a) Unpaid and accrued interest on any Index Rate Loan shall be paid monthly, in arrears, on the first day of each calendar month, commencing on the first such date after the date of this Agreement, and on the first day of each calendar month thereafter, and at maturity (whether by acceleration, declaration, extension or otherwise). (b) Notwithstanding the foregoing, any and all unpaid and accrued interest on any Index Rate Loan converted to a LIBOR Loan or prepaid shall be paid immediately upon such conversion and/or prepayment, as appropriate. (c) Unpaid and accrued interest on any LIBOR Loan shall be paid, in arrears, on the last day of the applicable LIBOR Interest Period and at maturity (whether by acceleration, declaration, extension or otherwise). Notwithstanding anything to the contrary contained herein, the Agent agrees that the Borrower shall not have any obligation to make any payment pursuant to the provisions of Section 2.2.4 (Indemnity) resulting solely from the payment of accrued interest on a date other than the expiration date of an Interest Period. Section 2.3 General Financing Provisions. 2.3.1 Borrower's Representatives. (a) The Borrower hereby represents and warrants to the Agent and the Lenders that the Borrower and each Subsidiary Guarantor will derive benefits, directly and indirectly, from the Loans, both in their separate capacity and as a member of the integrated group to which the Borrower and each Subsidiary Guarantor belongs and because (i) the successful operation of the integrated group is dependent upon the continued successful performance of the functions of the integrated group as a whole, (ii) the terms of the consolidated financing provided under this Agreement are more favorable than would otherwise would be obtainable by the Borrower and any Subsidiary Guarantor individually, and (iii) the Borrower's additional administrative and other costs and reduced flexibility associated with individual financing arrangements which would otherwise be required if obtainable would substantially reduce the value to the Borrower of such financings. (b) The Borrower hereby irrevocably authorizes each of the Lenders to make the Loans to the Borrower, pursuant to the provisions of this Agreement upon the written, oral or telephone request of any one of the Persons who is from time to time a Responsible Officer of the Borrower under the provisions of the most recent certificate of corporate resolutions of the Borrower on file with the Agent. (c) Neither the Agent nor any of the Lenders assumes any responsibility or liability for any errors, mistakes, and/or discrepancies in the oral, telephonic, written or other transmissions of any instructions, orders, requests and confirmations between the Agent and the Borrower or the Agent and any of the Lenders in connection with any Loan or any other transaction in connection with the provisions of this Agreement, except for acts of willful misconduct and gross negligence. 36 2.3.2 Use of Proceeds of the Loans. The proceeds of each Loan shall be used by the Borrower for Permitted Uses, and for no other purposes except as may otherwise be agreed by the Requisite Term Loan Lenders in writing. 2.3.3 Commitment Fee. The Borrower shall pay to the Agent a commitment fee (the "Commitment Fee") in the amount of One Hundred Thousand Dollars ($100,000). The Agent shall remit the Commitment Fee to those Lenders which have funded the Term Loans as of the Closing Date. The Commitment Fee shall be payable on or before the Closing Date and shall be deemed fully earned on the date paid and is non-refundable. 2.3.4 Closing Fee. The Borrower shall pay to the Agent for the ratable benefit of the Lenders based on each Lender's Pro Rata Share of the Commitments, a closing fee (the "Closing Fee") in the amount of Seven Hundred Fifty Thousand Dollars ($750,000), less the amount of the Commitment Fee actually paid to and received by the Agent on or before the Closing Date. The Closing Fee shall be payable on or before the Closing Date and shall be deemed fully earned on the date paid and is non-refundable. 2.3.5 Computation of Interest. All applicable interest shall be calculated on the basis of a year of 360 days for the actual number of days elapsed. Any change in the interest rate on any of the Obligations resulting from a change in the Alternate Index Rate shall become effective as of the opening of business on the day on which such change in the Alternate Index Rate is announced. 2.3.6 Payments. All payments to be made by the Borrower to the Agent and/or any of the Lenders under this Agreement or any of the other Financing Documents with respect to the Obligations shall be made in Dollars, without set-off or counterclaim and free and clear of, and without deduction for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions, withholdings or restrictions or conditions of any nature whatsoever now or hereafter imposed, levied, collected, withheld or assessed against the Borrower, other than income and franchise taxes imposed on any Lender (the "Assessments"). If the Borrower fails to perform its obligations to the Agent and/or any of the Lenders under the foregoing, the Borrower shall indemnify the Agent and the Lenders for any such Assessments that are paid by the Agent and/or any of the Lenders, plus all incremental Assessments, interest or penalties that may become payable as a consequence of such failure. All payments of the Obligations, including, without limitation, principal, interest, Prepayments, and Fees, shall be paid by the Borrower to the Agent (except as otherwise provided herein) at the Agent's office specified in Section 9.1 (Notices) in immediately available funds not later than 2:00 p.m. (New York City Time) on the due date of such payment. All payments received by the Agent after such time shall be deemed to have been received by the Agent for purposes of 37 computing interest and otherwise as of the next Business Day. Payments shall not be considered received by the Agent until such payments are paid to the Agent in immediately available funds. 2.3.7 Liens; Setoff. The Borrower hereby grants to the Agent and to the Lenders a continuing Lien for all of the Obligations (including, without limitation, the Agent's Obligations) upon any and all monies, securities, and other cash deposits of the Borrower and the proceeds thereof, now or hereafter held or received by or in transit to, the Agent, any of the Lenders, and/or any Affiliate of the Agent and/or any of the Lenders, from or for the Borrower, and also upon any and all deposit accounts (general or special) and credits of the Borrower, if any, with the Agent, any of the Lenders or any Affiliate of the Agent or any of the Lenders, at any time existing, excluding any deposit accounts held by the Borrower in its capacity as trustee for Persons who are not Affiliates or Subsidiaries of the Borrower. Without implying any limitation on any other rights the Agent and/or any of the Lenders may have under the Financing Documents or applicable Laws, during the continuance of an Event of Default, the Agent is hereby authorized by the Borrower at any time and from time to time, without notice to the Borrower, to set off, appropriate and apply any or all items hereinabove referred to against all Obligations (including, without limitation, the Agent's Obligations) then outstanding (whether or not then due), all in such order and manner as shall be determined by the Agent in its sole and absolute discretion. Notwithstanding the foregoing, the Agent and the Lenders acknowledge and agree that any Liens and rights of setoff under this Section 2.3.7 are subordinate and junior to the Liens and rights of setoff securing the BofA Obligations; accordingly, the Agent and the Lenders agree that on or before the BofA Termination Date any amounts received by them on account of any such Liens or rights of setoff shall be remitted to the Collateral Agent for application to the BofA Obligations until such time as the BofA Obligations are paid in full. In addition, the Agent and the Lenders agree that any Liens and rights of setoff under this Section 2.3.7 shall be held for the benefit of, and as agent for, the Collateral Agent. 2.3.8 Requirements of Law. In the event that any Lender shall have determined in good faith that (a) the adoption of any Laws after the Closing Date regarding capital adequacy, or (b) any change in or in the interpretation or application of any Laws, or (c) compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any central bank or Governmental Authority, does or shall have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender, as a consequence of the obligations of the such Lender hereunder to a level below that which such Lender or any corporation controlling such Lender would have achieved but for such adoption, change or compliance (taking into consideration the policies of such Lender and the corporation controlling such Lender, with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower of a written request therefor and a statement of the basis for such determination, the Borrower shall pay to such Lender such additional amount or amounts in order to compensate for such reduction. The Agent and the Lenders agree that the Borrower shall be entitled, at its option, to require that any Lender which demands payment of any amounts under this Section 2.3.8 assign one hundred percent (100%) of its Obligations to 38 one or more other lenders or financial institutions as shall be acceptable to the Borrower and the Agent; provided that any such assignment is effected in accordance with the provisions of Section 9.5 (Assignments by Lenders). Section 2.4 Settlement Among Lenders. The Agent shall pay to each Lender on each date on which a payment of principal and/or interest on the Term Loans, such Lender's ratable share of all payments received by the Agent in immediately available funds on account of the Term Loans, net of any amounts payable by such Lender to the Agent, by wire transfer of same day funds; the amount payable to each Lender shall be based on the principal amount of the Term Loans owing to such Lender. All other amounts received by the Agent on account of, or applied by the Agent to the payment of, any Obligation owed to the Lenders (including, without limitation, proceeds from the sale of, or other realization upon, all or any part of the Collateral following an Event of Default and payment of the BofA Obligations in full) that are received by the Agent not later than 11:00 a.m. (New York City Time) on a Business Day will be paid by the Agent to each Lender on the same Business Day, and any such amounts that are received by the Agent after 11:00 a.m. (New York City Time) will be paid by the Agent to each Lender on the following Business Day. Unless otherwise stated herein, the Agent shall distribute proceeds from the sale of, or other realization upon, all or any part of the Collateral following an Event of Default ratably to the Lenders based on the amount of the Obligations then owing to each Lender. Section 2.5 Presumption of Payment. Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Agent that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent in its sole discretion may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Agent and the Agent shall have distributed to any Lender all or any portion of such amount, such Lender shall repay to the Agent on demand the amount so distributed to such Lender, together with interest thereon at the Federal Funds Rate, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent. ARTICLE III THE COLLATERAL Section 3.1 Debt and Obligations Secured. All property and Liens assigned, pledged or otherwise granted under or in connection with this Agreement (including, without limitation, those under Section 3.2 (Grant of Liens)) or any of the Financing Documents shall, subject to the terms, conditions and limitations, if any, set forth in this Agreement or in any of the Financing Documents, secure (a) the payment of all of the Obligations and (b) the performance, compliance with and observance by the Borrower of the provisions of this Agreement and all of the other Financing Documents or otherwise under the Obligations. The security interest and Lien of the Collateral Agent for the benefit of each Lender 39 in such property shall rank equally in priority with the Lien for the benefit of each other Lender, but the security interest and Lien of the Collateral Agent for the benefit of the Agent with respect to the Agent's Obligations shall be superior to the security interest and Lien of the Lender. Section 3.2 Grant of Liens. The Borrower hereby assigns, pledges and grants to the Collateral Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, and agrees that the Collateral Agent shall have a perfected and continuing security interest in, and Lien on, (a) all of the Borrower's Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment, Securities, and General Intangibles, whether now owned or existing or hereafter acquired or arising, (b) all returned, rejected or repossessed goods, the sale or lease of which shall have given or shall give rise to an Account or Chattel Paper, (c) all insurance policies relating to the foregoing, (d) all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to the foregoing and all equipment and general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and (e) all cash and non-cash proceeds and products of the foregoing. The Borrower further agrees that the Collateral Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, shall have in respect thereof all of the rights and remedies of a secured party under the Uniform Commercial Code as well as those provided in this Agreement, under each of the other Financing Documents and under applicable Laws in each case subject to the provisions of the Financing Documents, including, without limitation, the Intercreditor Agreement. Notwithstanding anything to the contrary contained herein, the Collateral shall not include (i) any rights of the Borrower under any Capital Leases of Equipment or any other agreements if and to the extent any such Capital Leases or other agreements prohibit the collateral assignment or pledge of the Borrower's interest therein, and such prohibition has not been waived by the respective Person or (ii) any assets or properties of the Borrower or any Subsidiary which are not subject to a prior and senior perfected Lien in favor of the Collateral Agent with respect to the BofA Obligations. Notwithstanding anything to the contrary contained herein, the Collateral shall not include any item of tangible or intangible property to the extent the grant of a security interest pursuant hereto in the Borrower's right, title and interest in such item of property is prohibited by an applicable contractual obligation or requirement of law or would give any other Person the right to terminate its obligations with respect to such item (it being understood and agreed, however, that notwithstanding the foregoing, all rights to payment for money due or to become due pursuant to any such excluded item of property shall be subject to the security interests created hereby and it being further understood and agreed that any such excluded item shall be included as part of the Collateral if and to the extent any applicable prohibition on the collateral assignment of such item shall be unenforceable under the applicable Uniform Commercial Code as now or hereafter in effect). The Agent and the Lenders acknowledge and agree that all Liens and security interests granted by the Borrower and/or any of the Subsidiary Guarantors to the Collateral Agent pursuant to this Agreement or any of the other Financing Documents shall at all times be junior and subordinate to the Liens and security interests of the Collateral Agent with respect to the BofA Obligations, except as set forth in the Intercreditor Agreement. The Agent, the Lenders and the Borrower further understand and agree that notwithstanding any provision herein to the contrary or in any of the Financing Documents, all Liens and security interests shall be granted 40 to the Collateral Agent for the benefit of the Agent and the Lenders and that at no time prior to the BofA Termination Date shall any such Liens or security interests be granted to or otherwise held in the name of the Agent and/or any of the Lenders. Section 3.3 Personal Property. The Borrower acknowledges and agrees that it is the intention of the parties to this Agreement that (i) the Collateral Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, except as otherwise expressly provided in Section 3.2 (Grant of Liens), shall have a second priority, perfected Lien (except that the Collateral Agent acknowledges and agrees that the Lien on the Fixed and Capital Assets of the Borrower located in the State of Nevada, including, without limitation, the real property owned by the Borrower in the State of Nevada shall be a third priority Lien, subject to first priority Liens as set forth in Schedule 4.1.22), in form and substance reasonably satisfactory to the Collateral Agent and its counsel, on all of the personal property of the Borrower and of each Subsidiary Guarantor of any kind and nature whatsoever which is subject to the Liens and security interests of the Collateral Agent with respect to the BofA Obligations, whether now owned or hereafter acquired, as security for all of the Obligations, subject only to the Permitted Liens. In furtherance of the foregoing: 3.3.1 Securities, Chattel Paper, Promissory Notes, etc. (a) As of the date of this Agreement and without implying any limitation on the scope of Section 3.2 (Grant of Liens), the Borrower shall deliver and shall cause each Subsidiary Guarantor that owns Collateral to deliver (or shall have delivered or caused to be delivered) to the Collateral Agent, all originals of all of letters of credit, Securities, Chattel Paper, Documents and Instruments owned or held by the Borrower and/or any Subsidiary Guarantor, and, if the Collateral Agent, so requires, shall execute and deliver and, shall cause each such Subsidiary Guarantor to execute and deliver (or shall have executed and delivered or caused to be delivered), a separate pledge, assignment and security agreement in form and content acceptable to the Collateral Agent, which pledge, assignment and security agreement shall assign, pledge and grant a first priority Lien to the Collateral Agent, for the ratable benefit of the BofA Lenders and for the benefit of the BofA Agent with respect to the "Agent's Obligations" (as defined in the BofA Financing Agreement) and a second priority Lien to the Collateral Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, on all of the letters of credit, Securities, Chattel Paper, Documents and Instruments of the Borrower and each such Subsidiary Guarantor, as the case may be; provided that at all times after the BofA Termination Date, any required Lien for the benefit of the Agent and the Lenders shall be a first priority Lien. In addition, the Borrower agrees to endorse to the order of the Collateral Agent any and all Instruments that constitute or evidence all or any portion of the Collateral. (b) In the event that the Borrower or any such Subsidiary Guarantor shall acquire (or have acquired) after the Closing Date any letters of credit, Securities, Chattel Paper, Documents or Instruments, the Borrower shall promptly so notify the Collateral Agent and deliver the originals of all of the foregoing to the Collateral Agent, promptly and in any event within thirty (30) days of each acquisition. 41 (c) All letters of credit, Securities, Chattel Paper, Documents and Instruments to be delivered hereunder shall be delivered to the Collateral Agent endorsed and/or assigned as required by the pledge, assignment and security agreement and/or as the Collateral Agent may require and, if applicable, shall be accompanied by blank irrevocable and unconditional stock or bond powers. 3.3.2 Patents, Copyrights and Other Property Requiring Additional Steps to Perfect. As of the date of this Agreement and without implying any limitation on the scope of Section 3.2 (Grant of Liens), the Borrower shall execute and deliver and, shall cause each Subsidiary Guarantor that owns Collateral, as appropriate, to execute and deliver (or shall have executed and delivered or caused to be executed and delivered), all Financing Documents and take all actions requested by the Collateral Agent in order to perfect an assignment of Patents, Copyrights, Trademarks, customer lists or any other type or kind of intellectual property acquired by the Borrower or any such Subsidiary Guarantor after the Closing Date, which assignment shall grant to the Collateral Agent for the benefit of the BofA Agent and the BofA Lenders a first priority assignment of the foregoing and shall grant to the Collateral Agent for the benefit of the Agent and the Lenders a second priority assignment; except that at all times after the BofA Termination Date any assignment given for the benefit of the Agent and the Lenders under this Section shall be a first priority assignment. Section 3.4 Record Searches. As determined by the Collateral Agent, at the time any Financing Document is executed and delivered by the Borrower pursuant to the BofA Financing Agreement or this ARTICLE III or any other Section of this Agreement, the Collateral Agent shall, in its reasonable discretion and if requested, have received, in form and substance satisfactory to the Collateral Agent, such Lien or record searches with respect to the Borrower, each Subsidiary Guarantor and/or any other Person who may be an obligor or pledgor with respect to any of the Obligations, as appropriate, and the property covered by such Financing Document showing that the Lien of such Financing Document will be a perfected first priority Lien on the property covered by such Financing Document with respect to the BofA Obligations and a second priority Lien with respect to the Obligations, subject only to Permitted Liens or to such other Liens or matters as the Collateral Agent may approve. The Agent agrees that it shall not require Lien or record searches if and to the extent the BofA Agent has obtained such Lien and record searches and, if requested by the Agent, has furnished copies of such Lien or record searches to the Agent promptly upon request. In addition, notwithstanding the foregoing, the Agent acknowledges and agrees that the Borrower shall be obligated to reimburse the Agent only for actual out-of-pocket costs and expenses relating to Lien and record searches and only to the extent ordered by the Agent (a) one-time only after the Closing Date to confirm the due filing and Lien priority of the Agent and the Lenders, (b) not more frequently than once in any given calendar year after the Closing Date prior to the occurrence of a Default or an Event of Default, and (c) in addition, at any time following the occurrence of a Default or an Event of Default. 42 Section 3.5 Real Property. The Borrower acknowledges and agrees that it is the intention of the parties to this Agreement that the Collateral Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, shall have a second priority, perfected Lien, in form and substance satisfactory to the Collateral Agent and its counsel, on all real property of any kind and nature whatsoever, whether now owned or hereafter acquired by the Borrower or any Subsidiary Guarantor, subject to a first priority Lien in favor of the Collateral Agent for the benefit of the BofA Agent and the BofA Lenders and to the Permitted Liens, excluding, however, any real property leased by the Borrower or any Subsidiary Guarantor. With respect to each parcel of real property now owned by the Borrower and/or a Subsidiary Guarantor that owns Collateral), the Borrower shall execute and deliver and, subject to the terms of Section 3.6 (Subsidiary Guarantor Assets), shall cause each such Subsidiary Guarantor, as appropriate, to execute and deliver (or to have executed and delivered), as of the date of this Agreement, a deed of trust or a mortgage or other document, including, any amendments or confirmations of the existing Deeds of Trust as may be required by the Collateral Agent, which deed of trust, mortgage and/or other document shall be included among the Financing Documents. With respect to real property acquired in fee by the Borrower or any such Subsidiary Guarantor after the Closing Date (whether by merger or otherwise), the Borrower shall grant and shall cause each such Subsidiary Guarantor, as appropriate, to grant (or shall have granted or caused to be granted), promptly after acquisition thereof, a Lien covering such real property to the Collateral Agent, for the benefit of the BofA Agent, the BofA Lenders, the Agent and the Lenders, under the provisions of a mortgage, deed of trust or other document, as appropriate. Each Financing Document to be executed and delivered pursuant hereto shall: (a) be in form and substance reasonably satisfactory to the Collateral Agent; (b) create a first priority Lien in such real property in favor of the Collateral Agent, for the ratable benefit of the BofA Lenders and for the benefit of the BofA Agent with respect to the "Agent's Obligations" (as defined in the BofA Financing Agreement) and a second priority Lien in such real property in favor of the Collateral Agent, for the ratable benefit of the Lenders and for the benefit of the Agent with respect to the Agent's Obligations, subject only to Permitted Liens, zoning ordinances, and such other matters as the Collateral Agent may approve, except that at all times after the BofA Termination Date, any Lien for the benefit of the Agent and the Lenders shall be a first priority Lien; (c) be accompanied by a current survey reasonably satisfactory in all respects to the Collateral Agent of the subject real property, prepared by a registered land surveyor or engineer reasonably satisfactory to the Collateral Agent; (d) be accompanied by evidence reasonably satisfactory to the Collateral Agent, regarding the current and past pollution control practices at such real property in connection with the discharge, emission, handling, disposal or existence of Hazardous Materials, which may include, at the request of the Collateral Agent, an environmental audit of such real property prepared by a person or firm reasonably acceptable to the Collateral Agent; 43 (e) be accompanied by a mortgagee's title insurance policy or marked-up commitment or binder for such insurance in form and substance reasonably satisfactory to the Collateral Agent insuring the Lien in the real property granted by Borrower and/or the Subsidiary Guarantors in favor of the Collateral Agent, for the benefit of the BofA Lenders, the BofA Agent, the Agent and the Lenders, and issued by a title insurance company reasonably satisfactory to the Collateral Agent, except for any real property located in a jurisdiction outside of the United States unless mortgagee's title insurance coverage is customary in such jurisdiction; and (f) upon request of the Collateral Agent be accompanied by a signed opinion of counsel addressed to the BofA Agent, the BofA Lenders, the Agent and each of the Lenders, as appropriate, in form and substance reasonably satisfactory to the Collateral Agent or the Agent, as the case may be. Section 3.6 Subsidiary Guarantor Assets. The Borrower agrees that all Obligations are and shall continue to be fully and unconditionally and jointly and severally guaranteed by each Subsidiary Guarantor and that, except as expressly provided in the Financing Documents, the joint and several obligations of each Subsidiary Guarantor under the Guaranty are and shall continue to be secured by a second priority Lien (subject only to the first priority Lien in favor of the Collateral Agent with respect to the BofA Obligations and to Permitted Liens) on all Assets and properties of each Subsidiary Guarantor. Section 3.7 Costs. The Borrower agrees to pay, as part of the Enforcement Costs and to the fullest extent permitted by applicable Laws, on demand all reasonable costs, fees and expenses incurred by the Collateral Agent, the Agent and the Lenders in connection with the taking, perfection, preservation, protection and/or release of a Lien on the Collateral, including, without limitation, with respect to all actions required to effect any of the provisions of Section 3.6 (Subsidiary Guarantor Assets), and any of the following: (a) customary reasonable fees and expenses incurred by the Collateral Agent, the Agent and/or any of the Lenders in preparing, reviewing, negotiating and finalizing the Financing Documents from time to time (including, without limitation, reasonable attorneys' fees incurred in connection with preparing, reviewing, negotiating, and finalizing any of the Financing Documents, including, any amendments and supplements thereto); (b) all filing and/or recording taxes or fees; (c) all title insurance premiums and costs; (d) all costs of Lien and record searches; (e) reasonable attorneys' fees in connection with all legal opinions required; 44 (f) appraisal and/or survey costs; and (g) all related reasonable costs, fees and expenses. Section 3.8 Release. Upon the payment and performance of all Obligations (other than contingent indemnification and expense reimbursement obligations for which no claim has been made) of the Borrower and termination of this Agreement and all obligations and liabilities of each other Subsidiary Guarantor, under this Agreement and/or under any or all other Financing Documents, the termination and/or expiration of all of the Commitments, upon the Borrower's request and at the Borrower's sole cost and expense, the Collateral Agent shall release and/or terminate the Liens of any and all of the Financing Documents. Section 3.9 Inconsistent Provisions. In the event that the provisions of any Financing Document directly conflict with any provision of this Agreement, the provisions of this Agreement shall govern. Section 3.10 Collateral Agency. The Borrower, the Agent and the Lenders acknowledge and agree that in order to minimize the cost of obtaining, perfecting and continuing certain Liens and security interests of the Agent and the Lenders as required by the terms of this Agreement and as required by the Intercreditor Agreement, the BofA Agent shall be and remain the Collateral Agent at all times on or before the BofA Termination Date. Accordingly, neither the Agent nor the Lenders will require at any time on or before the BofA Termination Date that the Borrower execute and deliver any Financing Document to create, perfect or maintain any Liens or security interests required by the terms of this Agreement if and to the extent the BofA Financing Documents give rise to and perfect such required Liens and security interests. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.1 Representations and Warranties. The Borrower represents and warrants to the Agent and the Lenders, as follows (any of the following relating to the Italian Target Stock Purchase Transaction being made only at and after the time the same is consummated): 4.1.1 Subsidiaries. The Borrower owns the Subsidiaries listed on the "Collateral Disclosure List" attached to, and made a part of, the BofA Financing Agreement and no others, as updated from time to time pursuant to the provisions of this Agreement. Each of the Subsidiaries is a Wholly Owned Subsidiary except as shown on the Collateral Disclosure List, as updated from time to time pursuant to the provisions of the BofA Financing Agreement, which correctly indicates the nature and amount of the Borrower's ownership interests therein, as applicable. 45 4.1.2 Good Standing. Each of the Borrower and its Subsidiaries (a) is a corporation duly organized, existing and in good standing under the laws of the jurisdiction of its incorporation, (b) has the corporate power to own its property and to carry on its business as now being conducted, and (c) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned by it therein or in which the transaction of its business makes such qualification necessary or where such non-qualification would have a materially adverse effect on the Borrower and its Subsidiaries taken as a whole or would otherwise impair the ability of the Agent to collect or realize upon any of the Collateral. 4.1.3 Power and Authority. Each of the Borrower and its Subsidiaries has full corporate power and authority to execute and deliver this Agreement, the other Financing Documents, and the Italian Target Stock Purchase Documents to which it is a party, to make the borrowings under this Agreement, to close and consummate each aspect of the Italian Target Stock Purchase Transaction, as appropriate and to incur and perform the Obligations whether under this Agreement, the other Financing Documents, the Italian Target Stock Purchase Documents, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of shareholders or any creditors of the Borrower or any Subsidiary, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of the Borrower or any Subsidiary, is required as a condition to the execution, delivery, validity or enforceability of this Agreement, the other Financing Documents, any of the Italian Target Stock Purchase Documents, the performance by the Borrower of the Obligations or the closing and consummation of the Italian Target Stock Purchase Transaction, in each case, if required, the same has been duly obtained. 4.1.4 Binding Agreements. This Agreement and the other Financing Documents executed and delivered by the Borrower and/or any of its Subsidiaries have been properly executed and delivered and constitute the valid and legally binding obligations of the Borrower and its Subsidiaries, respectively, and are fully enforceable against the Borrower and its Subsidiaries in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general applications affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law. 4.1.5 No Conflicts. Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Borrower or any of the Subsidiaries nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the charter or bylaws of the Borrower or any of the Subsidiaries, (b) any existing mortgage, indenture, contract or agreement 46 binding on the Borrower or any of the Subsidiaries or affecting any of its or their property, or (c) any Laws. 4.1.6 No Defaults, Violations. As of the date of this Agreement: (a) No Default or Event of Default has occurred and is continuing. (b) Neither the Borrower nor any of the Subsidiaries is in material default under any existing mortgage, indenture, contract or agreement binding on it or them or affecting its or their property in any respect which would be materially adverse to the business, operations, property or financial condition of the Borrower and the Subsidiaries, taken as a whole, or which would materially adversely affect the ability of the Borrower and the Subsidiaries, taken as a whole to perform their obligations under this Agreement or under any of the other Financing Documents to which the Borrower and/or any of the Subsidiaries is a party. 4.1.7 Compliance with Laws. Neither the Borrower nor any of the Subsidiaries is in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting the Borrower, any Subsidiary or any of its or their properties, the violation of which, considered in the aggregate, would materially adversely affect the business, operations or properties of the Borrower and/or any Subsidiary taken as a whole. 4.1.8 Margin Stock. None of the proceeds of the Loans will be used, directly or indirectly, by the Borrower or any Subsidiary for the purpose of purchasing or carrying, or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry, any "margin stock" within the meaning of Regulation U (12 CFR Part 221) of the Board of Governors of the Federal Reserve System or for any other purpose which would make the transactions contemplated in this Agreement a "purpose credit" within the meaning of said Regulation U, or cause this Agreement to violate any other regulation of the Board of Governors of the Federal Reserve System or the Securities Exchange Act of 1934 or the Small Business Investment Act of 1958, as amended, or any rules or regulations promulgated under any of such statutes. 4.1.9 Investment Company Act; Margin Securities. Neither the Borrower nor any Subsidiary is an investment company within the meaning of the Investment Company Act of 1940, as amended, nor is it, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company within the meaning of said Act. Neither the Borrower nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying "margin security" within the meaning of Regulation G (12 CFR Part 207), or "margin stock" within the 47 meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve System. 4.1.10 Litigation. Except as otherwise disclosed on Schedule 4.1.10 attached to and made a part of this Agreement, there are no proceedings, actions or investigations pending or, so far as the Borrower knows, threatened before or by any court, arbitrator any Governmental Authority which, in any one case or in the aggregate, could reasonably be expected to have a material adverse effect on the business, properties, condition (financial or otherwise) or operations, present or prospective, of the Borrower or any of the Subsidiaries taken as a whole. 4.1.11 Financial Condition. The audited consolidated annual financial statements of the Borrower and the Subsidiaries dated as of December 31, 1999 and, subject to audit adjustments and the absence of footnotes, the unaudited quarterly financial statements of the Borrower and the Subsidiaries dated as of March 31, 2000, are complete and correct and fairly present the financial position of the Borrower and the Subsidiaries and the results of their operations as of the date and for the period referred to and have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved. There are no material liabilities, direct or indirect, fixed or contingent, of the Borrower or any Subsidiary as of the date of such financial statements that are not reflected therein. There has been no materially adverse change in the financial condition or operations of the Borrower or any Subsidiary since the date of such financial statements and to the Borrower's knowledge no such materially adverse change is pending. Except as permitted by the provisions of Section 6.2.5 (Investments), neither the Borrower nor any Subsidiary has guaranteed the obligations of, or made any investment in or advances to, any Person (other than the Borrower or any Subsidiary Guarantor), except as disclosed in such financial statements and except that the Borrower and/or any or all of the Subsidiary Guarantors may have guaranteed one or more leases under which the Borrower and/or a Subsidiary Guarantor is a tenant or lessee, as of the date of this Agreement. 4.1.12 Pro-forma Financial Statements. The Borrower has furnished to the Agent a pro-forma consolidated balance sheet of the Borrower and the Subsidiaries as of end of the most recent fiscal month giving effect to the Italian Target Stock Purchase Agreement Transaction and the transactions incident thereto (the "Pro-forma Balance Sheet") together with pro-forma financial projections of the Parent for the five-year period subsequent to the Italian Target Stock Purchase Transaction (the "Pro-forma Financial Projections"). A copy of the Pro-forma Balance Sheet and the Pro-forma Financial Projections are attached hereto as Exhibits A-1 and A-2, respectively. The Pro-forma Balance Sheet is correct and complete, has been prepared in accordance with GAAP, and fairly presents in all material respects the consolidated financial condition of the Borrower and the Subsidiaries as of the end of the most recent fiscal month giving effect to the Italian Target Stock Purchase Transaction, after giving effect to the Italian Target Stock Purchase Transaction and the transactions incident thereto. The Pro-forma Financial Projections represent the best estimate of the future operations of the Parent (assuming the Italian Target Stock Purchase 48 Transaction is consummated) and are based on reasonable and conservative assumptions, but do not constitute a guaranty of actual performance. 4.1.13 Full Disclosure. The financial statements referred to in Section 4.1.11 (Financial Condition) of this Agreement and the statements, reports or certificates furnished by the Borrower in connection with the Financing Documents (a) do not contain any untrue statement of a material fact and (b) when taken in their entirety, do not omit any material fact necessary to make the statements contained therein not misleading. There is no fact known to the Borrower which the Borrower has not disclosed to the Agent and the Lenders in writing prior to the date of this Agreement with respect to the transactions contemplated by the Financing Documents which materially and adversely affects or in the future would, in the reasonable opinion of the Borrower materially adversely affect the condition, financial or otherwise, results of operations, business, or assets of the Borrower and the Subsidiaries, taken as a whole. 4.1.14 Indebtedness for Borrowed Money. As of the date of this Agreement, except for the Obligations and except as set forth in Schedule 4.1.14 attached to and made a part of this Agreement, the Borrower does not have any Indebtedness for Borrowed Money. The BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) has received photocopies of all promissory notes evidencing any Indebtedness for Borrowed Money set forth in Schedule 4.1.14, together with any and all material subordination agreements, other agreements, documents, or instruments securing, evidencing, guarantying or otherwise executed and delivered in connection therewith. 4.1.15 Subordinated Debt; Senior Secured Debt; BofA Financing Agreement. None of the Subordinated Debt Loan Documents nor any of the Senior Secured Debt Loan Documents in effect prior to the date of this Agreement have been amended, supplemented, restated or otherwise modified except as otherwise disclosed to the Agent in writing on or before the date of this Agreement. In addition, the Borrower has furnished to the BofA Agent copies of each amendment, supplement, restatement or other modification to any of the Subordinated Debt Loan Documents executed on or before the date of this Agreement. In addition, there does not exist any default or any event which upon notice or lapse of time or both would constitute a default under the terms of any of the Subordinated Debt Loan Documents , any of the Senior Secured Debt Loan Documents, the BofA Financing Agreement and/or any of the BofA Financing Documents. 4.1.16 Taxes. The Borrower and the Subsidiaries have filed all returns, reports and forms for all material Taxes which, to the knowledge of the Borrower, are required to be filed, and have paid all such material Taxes as shown on such returns or on any assessment received by it, to the extent that such Taxes have become due, unless and to the extent only that such Taxes, assessments and governmental charges are currently contested in good faith and by appropriate proceedings by the Borrower, such Taxes are not the subject of any Liens other than Permitted 49 Liens, and adequate reserves therefor have been established as required under GAAP. All tax liabilities of the Borrower and the Subsidiaries were as of the date of the audited financial statements referred to in Section 4.1.11 (Financial Condition), and are now, adequately provided for on the books of the Borrower and the Subsidiaries, as appropriate. No material tax liability has been asserted by the Internal Revenue Service or any state or local authority against the Borrower or any Subsidiary for Taxes in excess of those already paid. 4.1.17 ERISA. With respect to any "pension plan" as defined in SECTION 3(2) of ERISA, which plan is now or previously has been maintained or contributed to by the Borrower and/or any Subsidiary and/or by any commonly controlled entity: (a) no "accumulated funding deficiency" as defined in Code ss.412 or ERISA ss.302 has occurred, whether or not that accumulated funding deficiency has been waived; (b) no Reportable Event has occurred; (c) no termination of any plan subject to Title IV of ERISA has occurred; (d) no Borrower, Subsidiary nor any commonly controlled entity (as defined under ERISA) has incurred a "complete withdrawal" within the meaning of ERISA ss.4203 from any Multi-employer Plan; (e) no Borrower, Subsidiary nor any commonly controlled entity has incurred a "partial withdrawal" within the meaning of ERISA ss.4205 with respect to any Multi-employer Plan; (f) no Multi-employer Plan to which the Borrower, any Subsidiary or any commonly controlled entity has an obligation to contribute is in "reorganization" within the meaning of ERISA ss.4241 nor has notice been received by the Borrower, any Subsidiary or any commonly controlled entity that such a Multi-employer Plan will be placed in "reorganization". 4.1.18 Title to Properties. Each of the Borrower and the Subsidiaries has good title to all of its and their respective properties, including, without limitation, the Collateral and the properties and assets reflected in the balance sheets described in Section 4.1.11 (Financial Condition), subject to any minor imperfections in title which do not significantly detract from the use thereof. The Borrower and each Subsidiary have legal, enforceable and uncontested rights to use freely such property and assets. 4.1.19 Patents, Trademarks, Etc. Each of the Borrower and the Subsidiaries owns, possesses, or has the right to use all necessary Patents, licenses, Trademarks, Copyrights, permits and franchises to own its properties and to conduct its business as now conducted, without known conflict with the rights of any other Person. Any and all obligations to pay royalties or other charges with respect to such properties and assets are properly reflected on the financial statements described in Section 4.1.11 (Financial Condition). 4.1.20 Employee Relations. Except as disclosed on Schedule 4.1.20 attached hereto and made a part hereof, as updated from time to time, (a) neither the Borrower nor any Subsidiary nor the Borrower's or any Subsidiary's employees is subject to any collective bargaining agreement, (b) to the Borrower's knowledge, no petition for certification or union election is pending with 50 respect to the employees of the Borrower or any Subsidiary and no union or collective bargaining unit has sought such certification or recognition with respect to the employees of the Borrower, and (c) as of the date of this Agreement, there are no strikes, slowdowns, work stoppages or controversies pending or, to the best knowledge of the Borrower after due inquiry, threatened between the Borrower and its employees. Hours worked and payments made to the employees of any one or more of the Borrower have not been in violation of the Fair Labor Standards Act or any other applicable law dealing with such matters. All payments due from the Borrower or any Subsidiary or for which any claim may be made against the Borrower or any Subsidiary, on account of wages and employee and retiree health and welfare insurance and other benefits have been paid or accrued as a liability on its or their books, as appropriate. 4.1.21 Presence of Hazardous Materials or Hazardous Materials Contamination. To the best of the Borrower's knowledge and except as disclosed in writing to the Agent in Schedule 4.1.21 hereof with respect to any matters existing as of the date of this Agreement and except as hereafter disclosed in writing to the Agent with respect to any matters arising after the date of this Agreement, (a) no Hazardous Materials are located on any real property owned, controlled or operated by the Borrower or any Subsidiary or for which the Borrower or any Subsidiary is, or is claimed to be, responsible, except for reasonable quantities of necessary supplies for use by the Borrower and/or the Subsidiaries any of their respective tenants in the ordinary course of its or their lines of business as permitted by this Agreement and stored, used and disposed in accordance with applicable Laws; and (b) no property owned, controlled or operated by the Borrower or any Subsidiary or for which the Borrower or any Subsidiary has, or is claimed to have, responsibility is affected by any material Hazardous Materials Contamination at any other property. 4.1.22 Perfection and Priority of Collateral. The Collateral Agent, for the benefit of the Agent and the Lenders, has, or upon execution and recording of the Collateral Agent's UCC-1 financing statements and possession of Securities, Documents, Instruments, Chattel Paper and Instruments will have, and will continue to have as security for the Obligations, a valid and perfected Lien on and security interest in all Collateral, free of all other Liens, claims and rights of third parties whatsoever except Liens in favor of the Collateral Agent and other Permitted Liens, including, without limitation, those described on Schedule 4.1.22. 4.1.23 Places of Business and Location of Collateral. The information contained in the Collateral Disclosure List provided to the Collateral Agent, as updated annually and at such other times as shall be determined by the Borrower at any time prior to the occurrence of a Default or an Event of Default and as shall be determined by the Collateral Agent at any time following the occurrence of a Default or an Event of Default, is complete and correct in all material respects. The Collateral Disclosure List completely and accurately identifies the address of (a) the chief executive office of the Borrower and each of the Subsidiary Guarantors, (b) any and each other place of business of the Borrower or any of the Subsidiary Guarantors, (c) the location of all books and records pertaining to the 51 Collateral, and (d) each location, other than the foregoing, where any of the Collateral is located. The legally required places to file financing statements with respect to the Collateral within the meaning of the Uniform Commercial Code are the filing offices for those jurisdictions in which the Borrower and/or any Subsidiary Guarantor, as appropriate, maintains a place of business as identified on the Collateral Disclosure List. 4.1.24 Business Names and Addresses. Except as set forth in Schedule 4.1.24 attached hereto and made a part hereof, in the five (5) years preceding the date hereof, neither the Borrower nor any of its Subsidiaries has changed its name, identity or corporate structure, has conducted business under any name other than its current name, and has conducted its business in any jurisdiction other than those disclosed on the Collateral Disclosure List. 4.1.25 Equipment. No equipment is held by the Borrower or any Subsidiary Guarantor on a sale on approval basis. 4.1.26 Italian Target Stock Purchase Transaction. The BofA Agent and the Agent have received true and correct photocopies of the Italian Target Stock Purchase Agreement and each of the other Italian Target Stock Purchase Documents, executed, delivered and/or furnished on or before the date of this Agreement in connection with the Italian Target Stock Purchase Transaction. Neither the Italian Target Stock Purchase Agreement nor any of the other Italian Target Stock Purchase Documents have been modified, changed, supplemented, canceled, amended or otherwise altered, except as otherwise disclosed to the BofA Agent and the Agent in writing. The Italian Target Stock Purchase Transaction will be effected, closed and consummated pursuant to, and in accordance with, the terms and conditions of the Italian Target Stock Purchase Agreement and with all applicable Laws. As of closing and consummation of the Italian Target Stock Purchase Transaction, each of Capsol Italy and Ociesse will be a Wholly-Owned Subsidiary of the Italian Holding Company and the Italian Holding Company will be a Wholly-Owned Subsidiary of the Borrower. 4.1.27 Hart-Scott-Rodino. The Borrower, the Seller and all other necessary Persons, as appropriate, have made such filings as may be required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and have provided such supplemental information, if any, that may be required by such Act, with respect to the acquisition contemplated by the Italian Target Stock Purchase Transaction. The waiting periods, if any, under such Act have terminated or expired. 4.1.28 Term Loans. The Borrower hereby represents and warrants that neither the Term Loans nor the obligations of the Borrower and the Subsidiary Guarantors under and with respect to the Term Loans are in violation of or otherwise constitute a default under the provisions of the 52 Indenture. In particular, the Term Loans constitute "Senior Indebtedness" under the provisions of the Indenture. Section 4.2 Survival All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the date of this Agreement, the making of the Loans and extensions of credit made hereunder, and the incurring of any other Obligations. ARTICLE V CONDITIONS PRECEDENT Section 5.1 Conditions to the Making of the Loans. The making of the initial advance under the Loans is subject to the fulfillment on or before the date of this Agreement of the following conditions precedent in a manner reasonably satisfactory in form and substance to the Agent and its counsel: 5.1.1 Organizational Documents - Borrower. The Agent shall have received for the Borrower: (a) a certificate of good standing certified by the Secretary of State, or other appropriate Governmental Authority, of the state of incorporation of the Borrower, if applicable; (b) a certificate dated as of the date of this Agreement by the Secretary or an Assistant Secretary of the Borrower covering: (i) true and complete copies of its corporate charter, bylaws, and all amendments thereto; (ii) true and complete copies of the resolutions of its Board of Directors authorizing (A) the execution, delivery and performance of the Financing Documents and, if the Italian Target Stock Purchase Transaction is being consummated concurrently, the Italian Target Stock Purchase Documents to which it is a party, (B) the borrowings hereunder, (C) the granting of the Liens contemplated by this Agreement and the Financing Documents to which it is a party and (D) if the Italian Target Stock Purchase Transaction is being consummated concurrently, the Italian Target Stock Purchase Transaction; (iii) the incumbency, authority and signatures of the officers authorized to sign this Agreement and the other Financing Documents to which it is a party; and 53 5.1.2 Opinion of Counsel. The Agent shall have received such favorable opinions of counsel for the Borrower and the Subsidiary Guarantors addressed to the Agent and the Lenders, in form and substance satisfactory to the Agent and as requested by the Agent. 5.1.3 Organizational Documents - Guarantors. The Agent shall have received for each Guarantor: (a) a certificate of good standing, certified by the Secretary of State, or other appropriate Governmental Authority, of the state of incorporation; (b) a certificate dated as of the date of this Agreement by the Secretary or an Assistant Secretary of each Guarantor covering: (i) true and complete copies of the resolutions of it's Board of Directors authorizing the execution, delivery and performance of the Financing Documents to which it is a party and the granting of the Liens contemplated by any of the Financing Documents to which it is a party; (ii) the incumbency, authority and signatures of its officers to sign the Guaranty and all other Financing Documents to which it is a party; 5.1.4 Consents, Licenses, Approvals, Etc. The BofA Agent and the Agent shall have received copies of all consents, licenses and approvals, required in connection with the execution, delivery, performance, validity and enforceability of the Financing Documents, and, if the Italian Target Stock Purchase Transaction is being consummated concurrently or prior to the date hereof, the Italian Target Stock Purchase Documents, and such consents, licenses and approvals shall be in full force and effect. 5.1.5 Notes. The Agent shall have received for delivery to each of the Lenders the Term Notes, each conforming to the requirements hereof and executed by a Responsible Officer of the Borrower, and attested by a duly authorized representative of the Borrower. 5.1.6 Financing Documents. The Borrower and each Subsidiary Guarantor shall have executed and delivered the Financing Documents to be executed by it. 54 5.1.7 Other Financing Documents. In addition to the Financing Documents to be delivered by the Borrower, the Agent shall have received the Financing Documents duly executed and delivered by parties thereto other than the Borrower, including, without limitation the Intercreditor Agreement. 5.1.8 Other Documents, Etc. The Agent shall have received such other certificates, opinions, documents and instruments confirmatory of or otherwise relating to the transactions contemplated hereby as may have been reasonably requested by the Agent. 5.1.9 Payment of Fees. The Agent and the Lenders shall have received payment of any Fees due on or before the date of this Agreement. 5.1.10 Recordings and Filings. The Borrower and each Subsidiary Guarantor, as appropriate, shall have: (a) executed and delivered all Financing Documents (including, without limitation, UCC-1 and UCC-3 statements) required to be filed, registered or recorded in order to create, in favor of the Collateral Agent for the benefit of the Agent and the Lenders, a perfected Lien in the Collateral (subject only to the Permitted Liens) in form and in sufficient number for filing, registration, and recording in each office in each jurisdiction in which such filings, registrations and recordations are required, and (b) delivered such evidence as the Agent may deem satisfactory that all necessary filing fees and all recording and other similar fees, and all Taxes and other expenses related to such filings, registrations and recordings will be or have been paid in full. 5.1.11 Pro-forma Balance Sheet and Projections. The BofA Agent and the Agent shall have received and approved the Borrower's Pro-forma Balance Sheet and Pro-forma Financial Projections, which Pro-forma Balance Sheet and Pro-forma Financial Projections must be in form and content acceptable to the BofA Agent and the Agent in their sole and absolute discretion. 5.1.12 Stock Certificates and Stock Powers. The Collateral Agent shall have received (a) all of the original stock certificates, if any, of (i) each Subsidiary Guarantor and (ii) if the Italian Target Stock Purchase Transaction is being consummated concurrently or prior to the date hereof, the Italian Holding Company and each Italian Target and (b) fully executed irrevocable stock powers from the holders of all such stock certificates. 55 ARTICLE VI COVENANTS OF THE BORROWER Section 6.1 Affirmative Covenants. So long as any of the Obligations shall be outstanding hereunder, the Borrower agrees with the Agent and the Lenders as follows: 6.1.1 Financial Statements. The Borrower shall furnish to the Agent for distribution to the Lenders: (a) Annual Statements and Certificates. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event more than ninety (90) days after the close of the Borrower's fiscal years, (i) a copy of the annual consolidated and consolidating financial statements in reasonable detail satisfactory to the Agent relating to the Borrower and all Subsidiaries, prepared in accordance with GAAP and examined and certified (as to consolidated statements) by independent certified public accountants satisfactory to the Agent, which financial statements shall include a consolidated and consolidating balance sheet of the Borrower and all Subsidiaries as of the end of such fiscal year and consolidated and consolidating statements of income, cash flows and changes in shareholders equity of the Borrower and all Subsidiaries for such fiscal year, and (ii) a Compliance Certificate, in substantially the form attached to this Agreement as EXHIBIT B, containing a detailed computation of each financial covenant in this Agreement which is applicable for the period reported, a certification that no change has occurred to the information contained in the Collateral Disclosure List furnished to the Collateral Agent (except as set forth any schedule attached to the certification) and (iii) a management letter in the form prepared by the Borrower's independent certified public accountants, but only if and to the extent customarily obtained by the Borrower. The Agent agrees that any one of the "Big 5" accounting firms is satisfactory to the Agent for purposes of this Section 6.1.1(a), except to the extent the Agent in its reasonable discretion and based on good faith and legitimate concerns determines that any such accounting firm would be unacceptable because of any conflict of interest or any material adverse change affecting such firm's reliability or financial viability. (b) Annual Opinion of Accountant. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event more than ninety (90) days after the close of the Borrower's fiscal years, a letter or opinion of the accounting firm which examined and certified the annual financial statement relating to the Borrower and all Subsidiaries stating whether anything in such accounting firm's examination has revealed the occurrence of a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (c) Quarterly Statements and Certificates. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event more than forty-five (45) days after the close of the Borrower's fiscal quarters (other than the final fiscal quarter), consolidated and consolidating balance sheets of the Borrower and all Subsidiaries as of the close of such period, consolidated and consolidating income, cash flows 56 and changes in shareholders equity statements for such period, and a Compliance Certificate, in substantially the form attached to this Agreement as EXHIBIT B, containing a detailed computation of each financial covenant in this Agreement which is applicable for the period reported, each prepared by a Responsible Officer of or on behalf of the Borrower in a format acceptable to the Agent, all as prepared and certified by a Responsible Officer of the Borrower and accompanied by a certificate of that officer stating whether any event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (d) Monthly Statements and Certificates. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event more than thirty-five (35) days after the close of the Borrower's fiscal months, consolidated and consolidating balance sheets of the Borrower and all other Subsidiaries as of the close of such period, consolidated and consolidating income, cash flows and changes in shareholders equity statements for such period, and a detailed computation of each financial covenant in this Agreement which is applicable for the period reported, all as prepared and certified by a Responsible Officer of the Borrower and accompanied by a certificate of that officer stating whether any event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (e) Annual Budget and Projections. The Borrower shall furnish to the Agent for distribution to the Lenders as soon as available, but in no event later than the 10th day before the end of each fiscal year; (i) a consolidated and consolidating budget and pro forma financial statements on a month to month basis, and (ii) three year financial projections or financial projections for such lesser or greater period to the extent routinely prepared by the Borrower in the ordinary course of its business, which projections shall include both consolidated and consolidating projections with respect to the Borrower and all Subsidiaries. (f) Amendments to Subordinated Debt Loan Documents; Senior Secured Debt Loan Documents. The Borrower will furnish to the Agent copies of each amendment, supplement, restatement or other modification to any of the Subordinated Debt Loan Documents and/or the Senior Secured Debt Loan Documents executed at any time after the Closing Date on or before the effective date of such amendment, supplement, restatement or other modification. (g) Additional Reports and Information. The Borrower shall furnish to the Agent for distribution to the Lenders promptly, such additional information, reports or statements as the Agent and/or any of the Lenders may from time to time reasonably request. 57 6.1.2 Reports to SEC and to Stockholders. The Borrower will furnish to the Agent for distribution to the Lenders, promptly upon the filing or making thereof, at least one (1) copy of all reports, notices and proxy statements sent by the Parent, the Borrower or any of their respective Subsidiaries to its stockholders, and of all regular and other reports filed by the Parent, the Borrower or any of their respective Subsidiaries with the Securities and Exchange Commission. 6.1.3 Recordkeeping, Rights of Inspection, Field Examination, Etc. (a) The Borrower shall, and shall cause each of the Subsidiaries to, maintain (i) a standard system of accounting in accordance with GAAP, and (ii) proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its properties, business and activities. (b) The Borrower shall, and shall cause each of the Subsidiaries to, permit authorized representatives of the Agent and any of the Lenders to visit and inspect the properties of the Borrower and the Subsidiaries, to review, audit, check and inspect the Collateral at any time with reasonable prior notice prior to the occurrence of an Event of Default, and without notice at any time on or after the occurrence of an Event of Default, to review, audit, check and inspect the other books of record of the Borrower and the Subsidiaries at any time with or without notice and to make abstracts and photocopies thereof, and to discuss the affairs, finances and accounts of the Borrower and the Subsidiaries, with the officers, directors, employees and other representatives of the Borrower and the Subsidiaries and their respective accountants, all at such times during normal business hours and other reasonable times and as often as the Agent and/or any of the Lenders may reasonably request. (c) The Borrower hereby irrevocably authorizes and directs all accountants and auditors employed by the Borrower and/or any Subsidiary, or from any Governmental Authority, at any time prior to the repayment in full of the Obligations to exhibit and deliver to the Agent for distribution to the Lenders copies of any and all of the financial statements, trial balances, management letters, or other accounting records of any nature of the Borrower and/or any or all Subsidiaries in the accountant's or auditor's possession, and to disclose to the Agent and any of the Lenders any information they may have concerning the financial status and business operations of the Borrower and/or any or all Subsidiaries. Further, the Borrower hereby authorizes all Governmental Authorities to furnish to the Agent for distribution to the Lenders copies of reports or examinations relating to the Borrower and/or any or all Subsidiaries, whether made by the Borrower or otherwise. The Agent agrees that it shall not request any of the foregoing items directly from any accountants or auditors employed by the Borrower or any Subsidiary or from any Governmental Authority at any time prior to the occurrence of an Event of Default unless (i) the Agent shall have first requested such items from the Borrower and the Borrower shall have failed or is unable to furnish the requested items promptly and (ii) the Agent shall have notified the Borrower and/or the respective Subsidiary, as appropriate. Upon the Borrower's request, the Agent will furnish copies of all items obtained by the Agent from any accountants or auditors for the Borrower unless the Agent is legally prohibited from so doing. 58 (d) All reasonable costs and expenses incurred by, or on behalf of, the Agent in connection with the conduct of any of the foregoing shall be part of the Enforcement Costs and shall be payable to the Agent upon demand. The Borrower acknowledges and agrees that such expenses may include, but shall not be limited to, any and all out-of-pocket costs and expenses of the Agent's employees and agents in, and when, travelling to any of the facilities of the Borrower or any Subsidiary Guarantor. 6.1.4 Corporate Existence. Except in connection with consummation of those transactions permitted by Section 6.2.1 (Capital Structure), the Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, its corporate existence in good standing in the jurisdiction in which it is incorporated and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction would have a material adverse effect (a) on the ability of the Borrower and the Subsidiary Guarantors, taken as a whole, to perform the Obligations, (b) on the conduct of the operations of the Borrower and the Subsidiary Guarantors, taken as a whole, (c) on the consolidated financial condition of the Borrower and the Subsidiaries, taken as a whole, or (d) on the value of, or the ability of the Agent and the Lenders to realize upon, any of the Collateral, subject to the terms of the Intercreditor Agreement. 6.1.5 Compliance with Laws. The Borrower shall comply, and shall cause each of its Subsidiaries to comply, with all applicable Laws and observe the valid requirements of all Governmental Authorities, the noncompliance with or the nonobservance of which would have a material adverse effect (a) on the ability of the Borrower and the Subsidiary Guarantors, taken as a whole, to perform the Obligations, (b) on the conduct of the operations of the Borrower and the Subsidiary Guarantors, taken as a whole, (c) on the consolidated financial condition of the Borrower and the Subsidiaries, taken as a whole, or (d) on the value of, or the ability of the Agent and the Lenders to realize upon, any of the Collateral, subject to the terms of the Intercreditor Agreement. 6.1.6 Preservation of Properties. Except as otherwise expressly permitted by the provisions of this Agreement, the Borrower will, and will cause each of its Subsidiaries to, at all times (a) maintain, preserve, protect and keep its material properties, whether owned or leased, in good operating condition, working order and repair (ordinary wear and tear excepted), and from time to time will make all proper repairs, maintenance, replacements, additions and improvements thereto needed to maintain such properties in good operating condition, working order and repair, and (b) do or cause to be done all things necessary to preserve and to keep in full force and effect its material franchises, leases of real and personal property, trade names, patents, trademarks and permits which are necessary for the orderly continuance of its business. 59 6.1.7 Line of Business. The Borrower will continue and, will cause its Subsidiaries to continue, to engage substantially only in the business of manufacturing, marketing, selling and distributing plastic products or in a business related thereto. 6.1.8 Insurance. The Borrower will, and will cause each of its Subsidiaries to, at all times maintain with "A" or better rated insurance companies such insurance as is required by applicable Laws and such other insurance, in such amounts, of such types and against such risks, hazards, liabilities, casualties and contingencies as are usually insured against in the same geographic areas by business entities engaged in the same or similar business. Without limiting the generality of the foregoing, the Borrower will, and will cause each of its Subsidiaries to, keep adequately insured all of their property against loss or damage resulting from fire or other risks insured against by extended coverage and maintain public liability insurance against claims for personal injury, death or property damage occurring upon, in or about any properties occupied or controlled by them, or arising in any manner out of the businesses carried on by them. If requested by the Agent, the Borrower shall deliver to the Agent on the Closing Date (and thereafter on each date there is a material change in the insurance coverage) a certificate of a Responsible Officer of the Borrower containing a detailed list of the insurance then in effect and stating the names of the insurance companies, the types, the amounts and rates of the insurance, dates of the expiration thereof and the properties and risks covered thereby. 6.1.9 Taxes. Except to the extent that the validity or amount thereof is being contested in good faith and by appropriate proceedings, the Borrower will, and will cause each of its Subsidiaries, to pay and discharge all Taxes prior to the date when the failure to pay such Taxes will give rise to a Default or an Event of Default. The Borrower shall furnish to the Agent at such times as the Agent may require proof satisfactory to the Agent of the making of payments or deposits required by applicable Laws including, without limitation, payments or deposits with respect to amounts withheld by the Borrower and/or any Subsidiary Guarantor from wages and salaries of employees and amounts contributed by the Borrower and/or any Subsidiary Guarantor on account of federal and other income or wage taxes and amounts due under the Federal Insurance Contributions Act, as amended. 6.1.10 ERISA. The Borrower will, and will cause each of its Subsidiaries and Affiliates to, comply with the funding requirements of ERISA with respect to employee pension benefit plans for its respective employees. The Borrower will not permit, and will not allow any Subsidiary to permit, with respect to any employee benefit plan or plans covered by Title IV of ERISA (a) any prohibited transaction or transactions under ERISA or the Internal Revenue Code, which results, or would result, in any material liability of the Borrower and/or any of its Subsidiaries and Affiliates, or (b) any Reportable Event if, upon termination of the plan or plans with respect to which one or more such Reportable Events shall have occurred, there is or would 60 be any material liability of the Borrower and/or any of the Subsidiaries and Affiliates to the PBGC. Upon the Agent's request, the Borrower will deliver to the Agent a copy of the most recent actuarial report, financial statements and annual report completed with respect to any "defined benefit plan", as defined in ERISA. 6.1.11 Notification of Events of Default and Adverse Developments. The Borrower shall promptly notify the Agent and the Lenders upon obtaining knowledge of the occurrence of: (a) any Event of Default; (b) any Default; (c) any litigation instituted or threatened against the Borrower or any of its Subsidiaries and of the entry of any judgment or Lien (other than any Permitted Liens) against any of the assets or properties of the Borrower or any Subsidiary where the claims against the Borrower or any Subsidiary exceed One Million Dollars ($1,000,000) and are not covered by insurance; (d) the receipt by the Borrower or any Subsidiary Guarantor of any notice, claim or demand from any Governmental Authority which alleges that the Borrower or any Subsidiary Guarantor is in material violation of any of the terms of, or has failed to comply with any applicable material Laws regulating its operation and business, including, but not limited to, the Occupational Safety and Health Act and the Environmental Protection Act, the noncompliance with which would have a materially adverse effect on the Borrower and the Subsidiary Guarantors, taken as a whole; (e) any other development in the business or affairs of the Borrower or any of their Subsidiaries which is materially adverse to the Borrower and its Subsidiaries taken as a whole; and in each case describing in detail satisfactory to the Agent the nature thereof and the action the Borrower or any Subsidiary, as the case may be, proposes to take, if any, with respect thereto. 6.1.12 Hazardous Materials; Contamination. The Borrower agrees to: (a) give notice to the Agent immediately upon acquiring knowledge of the presence of any Hazardous Materials or any Hazardous Materials Contamination on any property owned, operated or controlled by the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor or for which the Borrower or any Subsidiary Guarantor is, or is claimed to be, responsible (provided that such notice shall not be required for Hazardous Materials placed or stored on such property in accordance with applicable Laws in the ordinary course (including, without limitation, quantity) of the line of business permitted by this Agreement or as described in any Phase I environmental assessments expressly referenced herein or in any schedule attached hereto), with a full description thereof; 61 (b) promptly comply with any Laws, the noncompliance with which would have a materially adverse effect on the Borrower and the Subsidiary Guarantors, taken as a whole or on the value of any material portion of the Collateral or the ability of the Agent to realize upon the value of any such Collateral requiring the removal, treatment or disposal of Hazardous Materials or Hazardous Materials Contamination and provide the Agent with reasonably satisfactory evidence of such compliance; (c) as part of the Obligations, defend, indemnify and hold harmless the Agent, each of the Lenders and each of their respective agents, employees, trustees, successors and assigns from any and all claims which may now or in the future (whether before or after the termination of this Agreement) be asserted as a result of the presence of any Hazardous Materials or any Hazardous Materials Contamination on any property owned, operated or controlled by the Borrower or any Subsidiary Guarantor for which the Borrower or any Subsidiary Guarantor is, or is claimed to be, responsible which claims relate to the financing and/or Liens contemplated by this Agreement or the Financing Documents, but which claims do not arise out of the gross negligence or willful misconduct of the Agent or any of the Lenders. The Borrower acknowledges and agrees that this indemnification shall survive the termination of this Agreement and the Commitments and the payment and performance of all of the other Obligations. 6.1.13 Financial Covenants. (a) Tangible Capital Funds. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, will attain a Tangible Capital Funds of not less than the following amounts as of the following dates: Date Amount ---- ------ June 30, 2000 $80,000,000 September 30, 2000 $83,000,000 December 31, 2000 $85,000,000 March 31, 2001 $87,000,000 June 30, 2001 $92,500,000 September 30, 2001 $98,000,000 December 31, 2001 and all $100,000,000 times thereafter The Agent and the Lenders agree that if the Italian Target Stock Purchase Transaction is closed and consummated in accordance with the terms of the Italian Target Stock Purchase Agreement, the required level of Tangible Capital Funds for each measurement period after closing and consummation of the Italian Target Stock Purchase Transaction set forth above shall be decreased by Ten Million Dollars ($10,000,000) effective as of the first measurement period following the closing and consummation of the Italian Target Stock Purchase Transaction. In addition, (i) if the amount of actual goodwill attributed to Poly-Seal at the time of closing and consummation of the Poly-Seal Stock 62 Purchase Transaction exceeds $27,000,000 (the "Excess Poly-Seal Goodwill"), the required levels of Tangible Capital Funds set forth above shall be reduced by the amount of such Excess Poly-Seal Goodwill; alternatively, if the amount of actual goodwill attributed to Poly-Seal at the time of closing and consummation of the Poly-Seal Stock Purchase Transaction is less than $27,000,000 (the "Deficiency Poly-Seal Goodwill"), the required levels of Tangible Capital Funds as set forth above shall be increased by the amount of such Deficiency Poly-Seal Goodwill and (ii) if the amount of actual goodwill attributed to Capsol Italy and/or Ociesse at the time of closing and consummation of the Italian Target Stock Purchase Transaction exceeds $10,000,000 (the "Excess Italian Goodwill"), the required levels of Tangible Capital Funds set forth above shall be reduced by the amount of such Excess Italian Goodwill; alternatively, if the amount of actual goodwill attributed to Capsol Italy and/or Ociesse at the time of closing and consummation of the Italian Stock Purchase Transaction is less than $10,000,000 (the "Deficiency Italian Goodwill"), the required levels of Tangible Capital Funds as set forth above shall be increased by the amount of such Deficiency Italian Goodwill. (b) Funded Debt to EBITDA. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, on a consolidated basis, will not permit the ratio of (x) Funded Debt to (y) EBITDA, for the prior twelve (12) month period, to be greater than the following amounts as of the following dates: Date Ratio ---- ----- June 30, 2000 4.75 to 1.00 September 30, 2000 4.25 to 1.00 December 31, 2000 4.00 to 1.00 March 31, 2001 3.75 to 1.00 June 30, 2001 3.50 to 1.00 September 30, 2001 3.50 to 1.00 December 31, 2001 3.50 to 1.00 and thereafter The Agent and the Lenders agree that if the Italian Target Stock Purchase Transaction is closed and consummated in accordance with the terms of the Italian Target Stock Purchase Agreement, the required ratio of Funded Debt to EBITDA for the measurement periods ending June 30, 2000, September 30, 2000, and December 31, 2000 shall be increased by .25, but only if and to the extent each such measurement period ends after closing and consummation of the Italian Target Stock Purchase Transaction. (c) Interest Coverage Ratio. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors will maintain, on a consolidated basis and tested as of the last day of each fiscal quarter in each fiscal year, on a rolling four (4) quarter basis, an Interest Coverage Ratio of not less than the following amounts as of the following dates: 63 Date Ratio ---- ----- June 30, 2000 2.00 to 1.00 September 30, 2000 2.00 to 1.00 December 31, 2000 2.00 to 1.00 March 31, 2001 2.25 to 1.00 June 30, 2001 2.25 to 1.00 September 30, 2001 2.25 to 1.00 December 31, 2001 2.50 to 1.00 and thereafter (d) Fixed Charge Coverage Ratio. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors will maintain, on a consolidated basis and tested as of the last day of each fiscal year, a Fixed Charge Coverage Ratio of not less 1.00 to 1.00. (e) Debt Service Coverage Ratio. The Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors will maintain, on a consolidated basis and tested as of the last day of each fiscal quarter in each fiscal year, on a rolling four (4) quarter basis, ending on that date, a Debt Service Coverage Ratio of not less than 1.50 to 1.0. 6.1.14 Insurance With Respect to Equipment and Inventory. The Borrower will (a) maintain and cause each of their the Subsidiaries to maintain hazard insurance with fire and extended coverage and naming the Collateral Agent as an additional insured with loss payable to the Collateral Agent as its respective interest may appear on the Equipment and Inventory that constitutes Collateral in an amount at least equal to the fair market value of such Equipment and Inventory (but in any event sufficient to avoid any co-insurance obligations) and with a specific endorsement to each such insurance policy pursuant to which the insurer agrees to give the Collateral Agent at least thirty (30) days written notice before any alteration or cancellation of such insurance policy and that no act or default of the Borrower or any Subsidiary shall affect the right of the Collateral Agent to recover under such policy in the event of loss or damage; and (b) file, and cause each of its Subsidiaries to file, with the Collateral Agent, upon its request, a detailed list of the insurance then in effect and stating the names of the insurance companies, the amounts and rates of the insurance, dates of the expiration thereof and the properties and risks covered thereby. 6.1.15 Maintenance of the Collateral. Except as permitted by Section 6.2.1 (Capital Structure), the Borrower will maintain, and will cause each of the Subsidiary Guarantors to maintain, the Collateral in good working order, saving and excepting ordinary wear and tear. 6.1.16 Defense of Title and Further Assurances. At its expense, the Borrower will defend the title to the Collateral (and any part thereof), and, subject to the terms of this Agreement, will immediately execute, acknowledge and deliver and, cause each Subsidiary Guarantor which owns Collateral to 64 execute, acknowledge and deliver, any financing statement, renewal, affidavit, deed, assignment, continuation statement, security agreement, certificate or other document which the Agent may require in order to perfect, preserve, maintain, continue, protect and/or extend the Lien or security interest granted or required to be granted to the Collateral Agent, for the benefit of the Lenders ratably and the Agent, under the terms of this Agreement and/or under any of the other Financing Documents and the second priority of that Lien, subject only to first priority Lien securing the BofA Obligations and to the other Permitted Liens. The Borrower will from time to time do, and, the Borrower will cause each of the Subsidiary Guarantors which owns Collateral to do, whatever the Collateral Agent may reasonably require by way of obtaining, executing, delivering, and/or filing financing statements, landlords' or mortgagees' waivers, notices of assignment and other notices and amendments and renewals thereof and the Borrower will take and, the Borrower will cause each of the Subsidiary Guarantors which owns Collateral to take, any and all steps and observe such formalities as the Collateral Agent may require, in order to create and maintain a valid Lien upon, pledge of, or security interest in (subject only to Permitted Liens), the Collateral, subject only to the Permitted Liens. The Agent understands and will require that the Borrower only use commercially reasonable efforts to obtain landlord's and mortgagee's waivers requested by the Collateral Agent. The Borrower shall pay to the Collateral Agent on demand all taxes, costs and expenses incurred by the Collateral Agent in connection with the preparation, execution, recording and filing of any such document or instrument. To the extent that the proceeds of any of the Accounts are expected to become subject to the control of, or in the possession of, a party other than the Borrower or a Subsidiary Guarantor or the Collateral Agent, the Borrower shall use commercially reasonable efforts to cause all such parties to execute and deliver security documents, financing statements or other documents as requested by the Collateral Agent and as may be necessary to evidence and/or perfect the security interest of the Collateral Agent, for the benefit of the Agent, the BofA Lenders, the Lenders and the BofA Agent in those proceeds. The Borrower agrees that a copy of a fully executed security agreement and/or financing statement shall be sufficient to satisfy for all purposes the requirements of a financing statement as set forth in Article 9 of the applicable Uniform Commercial Code. The Borrower hereby irrevocably appoints the Collateral Agent as its attorney-in-fact, with power of substitution, in the name of the Collateral Agent, or in the name of the Borrower or otherwise, for the use and benefit of the BofA Agent, the BofA Lenders, the Agent and the Lenders, but at the cost and expense of the Borrower and without notice to the Borrower, to execute and deliver any and all of the instruments and other documents and take any action which the Collateral the Agent may require pursuant to the foregoing provisions of this Section 6.1.16. 6.1.17 Business Names; Locations. The Borrower will notify and the Borrower will cause each of the Subsidiary Guarantors which owns Collateral to notify the Collateral Agent not less than thirty (30) days prior to (a) any change in the name under which the Borrower or the applicable Subsidiary Guarantor conducts its business, (b) any change of the location of the chief executive office of the Borrower or the applicable Subsidiary Guarantor, and (c) the opening of any new place of business, and (d) any change in the location of the places where the Collateral, or any part thereof, or the books and records, or any part thereof, are kept to the extent any such change in location would in and of itself then or with the passage of time result in any Lien of the 65 Collateral Agent not being perfected unless action is taken by the Collateral Agent and/or any other Person to continue, extend or effect the perfection of such Lien. 6.1.18 Subsequent Opinion of Counsel as to Recording Requirements. In the event that the Borrower or any Subsidiary Guarantor which owns Collateral shall transfer its principal place of business or the office where it keeps its records pertaining to the Collateral, upon the Collateral Agent's reasonable request the Borrower will provide to the Collateral Agent a subsequent opinion of counsel as to the filing, recording and other requirements with which the Borrower and the Subsidiary Guarantors have complied to maintain the Lien and security interest in favor of the Collateral Agent, for the benefit of the BofA Agent, the BofA Lenders, the Agent and the Lenders, in the Collateral, as appropriate. 6.1.19 Use of Premises and Equipment. The Borrower agrees that until the Obligations are fully paid, subject to the terms of the Intercreditor Agreement, the Collateral Agent after and during the continuance of a Default or an Event of Default, (a) may use all owned or leased lifts, hoists, trucks and other facilities or equipment for handling or removing the Collateral; and (b) shall have, and is hereby granted, a right of ingress and egress to the places where the Collateral is located, and may proceed over and through their owned or, subject to the terms of any applicable lease, leased property. 6.1.20 Protection of Collateral. The Borrower agrees that, subject to the terms of the Intercreditor Agreement, the Collateral Agent may at any time following an Event of Default take such steps as the Collateral Agent deems reasonably necessary to protect the interest of the Collateral Agent in, and to preserve the Collateral, including, the hiring of such security guards or the placing of other security protection measures as the Collateral Agent deems appropriate, may employ and maintain at their premises a custodian who shall have full authority to do all acts necessary to protect the interests of the Collateral Agent in the Collateral. The Borrower agrees to cooperate fully with the Collateral Agent's efforts to preserve the Collateral and will take such actions to preserve the Collateral as the Collateral Agent may reasonably direct. All of the Collateral Agent's reasonable expenses of preserving the Collateral, including any reasonable expenses relating to the compensation and bonding of a custodian, shall part of the Enforcement Costs. 6.1.21 Application of Net Casualty Proceeds. The Borrower agrees that Net Casualty Proceeds with respect to any Assets of the Borrower must be applied to either (a) the payment of the Obligations after payment of the BofA Obligations or (b) the repair, replacement and/or restoration of the Assets affected, and without the prior written consent of the Collateral Agent for no other purpose. If the BofA Obligations have been paid in full and all "Commitments" and "Letters of Credit" under the BofA Financing Agreement have been terminated, the Collateral Agent shall determine, in its sole discretion, the manner in which Net Casualty Proceeds are to be applied if the amount of the Net Casualty Proceeds exceeds, individually or in the aggregate, One Million Dollars ($1,000,000) or if there exists a Default or an Event of Default. 66 Section 6.2 Negative Covenants. So long as any of the Obligations shall be outstanding, the Borrower agrees with the Agent and the Lenders that: 6.2.1 Capital Structure, Merger, Acquisition or Sale of Assets. Except as otherwise permitted by the provisions of Section 6.2.3 (Purchase or Redemption of Securities), neither the Borrower, Berry UK nor NIM Holdings will alter or amend, nor will the Borrower permit any Subsidiary Guarantor to alter or amend, its equity capital structure, authorize any additional class of equity, issue any stock or equity of any class, enter into any merger or consolidation or amalgamation, windup or dissolve themselves (or suffer any liquidation or dissolution) or acquire all or substantially all the Assets of any Person, or sell, lease or otherwise dispose of any of its Assets; provided however that, except following the occurrence and during the continuation of a Default or an Event of Default, the following shall be permitted: (a) Permitted Acquisitions; (b) Permitted Asset Dispositions; (c) mergers or consolidations (i) among and between the Borrower and/or any Subsidiary Guarantor, (ii) among and between Berry UK and NIM Holdings, (iii) among and between the Italian Holding Company, Capsol Italy and Ociesse, and (iv) among and between any Subsidiaries of the Borrower other than Subsidiary Guarantors, Berry UK and/or NIM Holdings; provided, that after closing and consummation of any such merger or consolidation involving the Borrower or any Subsidiary Guarantor (A) the Borrower is the surviving entity if the Borrower is a party to such merger or consolidation, (B) Collateral Agent for the benefit of the Agent and the Lenders retains a second priority Lien on, and assignment of, one hundred percent (100%) of the capital stock of all surviving Subsidiary Guarantors, subject only to Permitted Liens and to the Liens of the Collateral Agent on the assets of the Borrower and of each surviving Subsidiary Guarantor which had been pledged or required to be pledged under the provisions of this Agreement prior to such merger or consolidation, subject only to Permitted Liens and to Liens of the Collateral Agent, and (C) in any merger or consolidation involving only Subsidiary Guarantors, the surviving entity qualifies or continues to qualify as a Subsidiary Guarantor in accordance with the provisions of Section 6.2.2 (Subsidiaries); (d) investments as and to the extent permitted by the provisions of Section 6.2.5 (Investments, Loans and Other Transactions), including, without limitation, the issuance of equity (including of a new class) by any Subsidiary to the Borrower or another Subsidiary; (e) the use and disposition of Net Casualty Proceeds, but only as and to the extent permitted by the provisions of Section 6.1.21 (Application of Net Casualty Proceeds); 67 (f) with respect to each Subsidiary Guarantor which is incorporated in a jurisdiction other than the State of Delaware, the formation of a corporation under the laws of the State of Delaware (each referred to herein as "Delaware NewCo") and the merger of such Subsidiary Guarantor into such Delaware NewCo; provided that (i) the Delaware NewCo, as the surviving corporation (1) shall be a Wholly-Owned Subsidiary of the Borrower, (2) shall have the same name as its predecessor Subsidiary Guarantor, (3)shall be the successor to such Subsidiary Guarantor in all respects, (4) shall have assumed all liabilities and obligations of its predecessor Subsidiary Guarantor, including, without limitation, the Obligations, (5) shall, at the time of merger, have no assets or liabilities other than those of its predecessor Subsidiary Guarantor, (6) shall be considered a Subsidiary Guarantor, and (7) shall execute and deliver to the Agent any and all agreements, documents and instruments as may be reasonably requested by the Agent confirming its obligations and liabilities to the Agent and the Lenders, (ii) the formation of Delaware NewCo and the merger of a Subsidiary Guarantor into Delaware NewCo shall not have any material adverse effect on the Agent or the Lenders or the obligations and liabilities of the Subsidiary Guarantor, as reasonably determined by the Agent, and (iii) the Borrower shall furnish or cause to be furnished to the Agent such due diligence items with respect to the Delaware NewCo and its merger with a Subsidiary Guarantor as may be reasonably requested by the Agent. 6.2.2 Subsidiaries. The Borrower will not create or acquire, or permit any Subsidiary to create or acquire, any Subsidiaries other than (a) the Subsidiaries identified on the Collateral Disclosure List, as provided to the Collateral Agent and (b) the creation or acquisition of Subsidiary Guarantors, including, without limitation, each Delaware NewCo; provided that no assets or properties may be transferred to any Subsidiary unless such Subsidiary constitutes a Subsidiary Guarantor. In order to qualify, after the Closing Date, as a Subsidiary Guarantor under the provisions of this Agreement, a Subsidiary must (i) be an acquisition permitted by the provisions of this Agreement or be created solely to consummate an acquisition permitted by the provisions of this Agreement, (ii) execute and deliver to the Agent a guaranty agreement substantially in the form of the Guaranty, (iii) except as expressly otherwise provided herein, grant to the Collateral Agent, for the benefit of the BofA Agent and the BofA Lenders, a first priority Lien on all Assets and property of such Subsidiary and grant to the Collateral Agent, for the benefit of the Agent and the Lenders, a second priority Lien on all Assets and property of such Subsidiary, subject only to Permitted Liens, all in accordance with the terms of one or more Financing Documents as and to the extent reasonably required by the Collateral Agent, and (iv) be a domestic Subsidiary (organized and existing under the laws of a state in the United States) or, if acceptable to the BofA Agent (at all times prior to the BofA Termination Date and thereafter, the Agent) in its sole and absolute discretion, a foreign Subsidiary. The Borrower understands and agrees that the BofA Agent or the Agent, as the case may be, may condition its consent to the formation of a foreign Subsidiary on such terms, conditions, and restrictions as the BofA Agent or the Agent, as the case may be, may determine in its discretion. In addition, the Agent and the Lenders hereby consent to the acquisition of the Italian Holding Company, Capsol Italy and Ociesse; provided that (i) if and to the extent permitted by applicable Italian law, the Collateral Agent for the benefit of the BofA Agent and the BofA Lenders is granted a first priority Lien on and assignment and the Collateral Agent for the benefit of the Agent and the Lenders is granted a second priority Lien on and assignment of one hundred percent (100%) of the shares of the 68 Italian Holding Company and each of Capsol Italy and Ociesse and (ii) if and to the extent permitted by applicable Italian laws, the Italian Holding Company and each of Capsol Italy and Ociesse unconditionally and irrevocably and jointly and severally guaranty payment and performance of all of the BofA Obligations and the Obligations. 6.2.3 Purchase or Redemption of Securities, Dividend Restrictions. The Borrower will not (a) purchase, redeem or otherwise acquire, or permit any Subsidiary to purchase, redeem or otherwise acquire, any shares of the Borrower's capital stock or warrants now or hereafter outstanding, (b) declare or pay any Distributions (other than stock dividends) or set aside any funds therefor, or (c) apply any of its property or Assets to the purchase, redemption or other retirement of, set apart any sum for the payment of any Distributions on, or for the purchase, redemption, or other retirement of, make any Distributions by reduction of capital or otherwise in respect of, any shares of any class of capital stock or warrants of the Borrower, except for (i) Distributions by the Borrower to the Parent pursuant to a certain Tax Sharing Agreement dated as of April 21, 1994 by and between the Borrower and the Parent, as amended through the Closing Date, and as the same may be further amended from time to time in a manner that is not materially adverse to the Borrower, (ii) Distributions by the Borrower to the Parent to enable the Parent to pay its operating and administrative expenses, including, without limitation, directors fees, legal and audit expenses, Securities and Exchange Commission compliance expenses and corporate franchise and other Taxes, not to exceed in any fiscal year Five Hundred Thousand Dollars ($500,000), (iii) Distributions by the Borrower to the Parent to pay management fees not to exceed Seven Hundred Fifty Thousand Dollars ($750,000) in any fiscal year of the Borrower, (iv) Distributions by the Borrower to the Parent to enable the Parent to repurchase any capital stock owned by any Person employed by the Parent and/or the Borrower if such Person is no longer so employed, provided, that the aggregate amount of Distributions for this purpose shall not exceed One Million Dollars ($1,000,000) per annum, and (v) Distributions to the Borrower or to any Subsidiary Guarantor from its Subsidiaries. 6.2.4 Indebtedness. The Borrower will not create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any Indebtedness for Borrowed Money, except: (a) the Obligations and the BofA Obligations (subject to the limitations contained in the Intercreditor Agreement); (b) current accounts payable arising in the ordinary course; (c) Indebtedness secured by Permitted Liens; (d) Subordinated Indebtedness; provided that the principal amount of all such Subordinated Indebtedness shall not at any time exceed, in the aggregate, Two Hundred Million Dollars ($200,000,000), and provided further that no portion of the Subordinated Indebtedness previously advanced and then repaid may be reborrowed without the prior written consent of the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent); 69 (e) Indebtedness of the Borrower and/or any Subsidiary existing on the date hereof and reflected on the financial statements furnished pursuant to Section 4.1.11 (Financial Condition); (f) Unsecured letters of credit, bankers' acceptances and/or (i) secured Interest Rate/Currency Protection Agreements between the Borrower, Berry UK, NIM Holdings or a Subsidiary Guarantor and Bank of America and/or (ii) unsecured Interest Rate Protection/Currency Agreements between the Borrower, Berry UK, NIM Holdings or a Subsidiary Guarantor and any other financial institution, providing for the transfer or mitigation of foreign exchange risks or interest rate risks either generally or under specific contingencies; (g) Indebtedness for Borrowed Money incurred by the Borrower, NIM Holdings, Berry UK or any Subsidiary Guarantor incurred after the Closing Date; provided, that (i) such Indebtedness for Borrowed Money is incurred on account of purchase money or finance lease arrangements of Assets (other than real property) acquired by the Borrower, NIM Holdings, Berry UK or a Subsidiary Guarantor after the Closing Date, (ii) each such purchase money or finance lease arrangement does not exceed the cost of the Assets acquired or leased, (iii) any Lien securing such purchase money or finance lease arrangement does not extend to any Assets or property other than that purchased or leased and other property similarly financed from the same financing source, and (iv) the aggregate amount of Indebtedness for Borrowed Money under and in connection with all such purchase money and/or finance lease arrangements shall not exceed, in the aggregate, the sum of One Million Dollars ($1,000,000); (h) Capital Leases; (i) Indebtedness for Borrowed Money of the Borrower to any Subsidiary Guarantor or of any Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor and Indebtedness for Borrowed Money of Berry UK, NIM Holdings, Norwich, the Italian Holding Company, Capsol Italy and/or Ociesse to the Borrower or any other domestic Subsidiary Guarantor (the "Foreign Intercompany Indebtedness"), provided that the aggregate amount of such Foreign Intercompany Indebtedness (excluding intercompany allocations of expenses and charges), together with any investment by the Borrower and/or any domestic Subsidiary Guarantor in Berry UK, NIM Holdings, Norwich, the Italian Holding Company, Capsol Italy and/or Ociesse permitted by the terms of this Agreement, shall not exceed, in the aggregate, Four Million Dollars ($4,000,000) and provided further that any such Foreign Intercompany Indebtedness shall be permitted with the Italian Holding Company, Capsol Italy and Ociesse only if the Italian Target Stock Purchase Transaction is closed and consummated. Notwithstanding the foregoing, upon closing and consummation of the Italian Target Stock Purchase Transaction, the $4,000,000 limitation on Foreign Intercompany Indebtedness shall be increased to Twenty-two Million Dollars ($22,000,000) if and to the extent the Borrower makes loans and advances to the Italian Holding Company to finance the Italian Target Stock Purchase Transaction. (j) Indebtedness for Borrowed Money as set forth on Schedule 4.1.14; 70 (k) Other unsecured Indebtedness for Borrowed Money in aggregate principal amount not to exceed at any time One Million Dollars ($1,000,000); (l) Indebtedness permitted under the provisions of Section 6.2.5 (Investments, Loans and Other Transactions), and (m) any refinancing, replacement, repurchase, defeasance, redemption or refunding of any existing Indebtedness for Borrowed Money permitted by the provisions of this Agreement; provided, that (i) the principal amount of any Indebtedness for Borrowed Money used to refinance, replace, repurchase, defease, redeem or refund such existing Indebtedness for Borrowed Money (each a "Refinancing Indebtedness") does not exceed the then outstanding principal balance of the Indebtedness for Borrowed Money so refinanced, replaced, repurchased, defeased, redeemed or refunded, (ii) the Weighted Average Life to Maturity of any Refinancing Indebtedness is equal to or greater than the Weighted Average Life to Maturity of the Indebtedness for Borrowed Money being so refinanced, replaced, repurchased, defeased, redeemed or refunded by the Refinancing Indebtedness, (iii) the terms of the Refinancing Indebtedness are not materially more restrictive or limiting on the Borrower, Berry UK, NIM Holdings or any Subsidiary Guarantor, as the case may be, than the terms of the Indebtedness for Borrowed Money being refinanced, replaced, repurchased, defeased, redeemed or refunded, as determined by the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) in its reasonable discretion, and (iv) if and to the extent the Refinancing Indebtedness is intended to refinance, replace, repurchase, defeasance, redemption or refund Subordinated Indebtedness, then the Refinancing Indebtedness is subordinated in right of payment to the Obligations on terms at least as favorable to the Agent and the Lenders as those then governing the Subordinated Indebtedness to be refinanced, replaced, repurchased, defeased, redeemed or refunded. As used herein, the term "Weighted Average Life to Maturity" when applied to any Indebtedness for Borrowed Money (including any Refinancing Indebtedness) means at any date, the number of years obtained by dividing (A) the sum of the products obtained by multiplying (1) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (2) the number of years (calculated to the nearest one-twelfth) that will elapse between each such date and the making of each such payment, by (B) the then outstanding principal amount of such Indebtedness for Borrowed Money. Notwithstanding the foregoing, neither the Borrower nor any Subsidiary Guarantor shall be permitted to create, incur, assume or suffer to exist any additional Indebtedness for Borrower Money at any time after the occurrence of a Default or an Event of Default or if and to the extent any such additional Indebtedness for Borrowed Money would give rise to a Default or an Event of Default. 6.2.5 Investments, Loans and Other Transactions. Except as otherwise provided in this Agreement, the Borrower will not, and will not permit any of its Subsidiaries to, (a) make, assume, acquire or continue to hold any investment in any real property (unless used in connection with their business) or any Person, whether by stock purchase, capital contribution, acquisition of Indebtedness of such Person or otherwise (including, without limitation, investments in any joint venture or partnership), except 71 for (i) Permitted Acquisitions, (ii) replacements of Assets which are the subject of a Permitted Asset Disposition made pursuant to clause (f) of the definition of Permitted Asset Disposition, (iii) those investments existing as of the Closing Date and reflected on the financial statements furnished pursuant to Section 4.1.11 (Financial Condition), (iv) any investments in Cash Equivalents, which, if requested by the Collateral Agent, are pledged to the Collateral Agent, for the benefit of the BofA Agent, the BofA Lenders, the Agent and the Lenders, as appropriate, as collateral and security for the BofA Obligations and the Obligations (v) those investments more particularly set forth in Schedule 6.2.5 attached hereto and made a part hereof (the "Permitted Investments"), (vi) the Borrower's acquisition, creation or ownership of any Subsidiary Guarantor, including, the Borrower's existing or additional capital contributions (including purchases of equity securities) in any such Subsidiary Guarantor, (vii) the Borrower's acquisition, creation and ownership of NIM Holdings and the Italian Holding Company and any existing or additional capital contributions in Berry UK, NIM Holdings, the Italian Holding Company, Capsol and Ociesse; provided that the aggregate amount of any such existing or additional capital contributions, together with any Foreign Intercompany Indebtedness (excluding intercompany allocations of expenses and charges) permitted by the terms of this Agreement, may not exceed at any time in the aggregate Four Million Dollars ($4,000,000) (which amount, upon closing and consummation of the Italian Target Stock Purchase Transaction shall be increased to Twenty-two Million Dollars ($22,000,000) if and to the extent the Borrower makes loans and advances to the Italian Holding Company to finance the Italian Target Stock Purchase Transaction, (viii) the receipt of Indebtedness for Borrowed Money by the Borrower or any Subsidiary Guarantor which represents payment to the Borrower or a Subsidiary Guarantor, as the case may be, of a portion of the purchase price payable to the Borrower in connection with a Permitted Asset Disposition; provided that, upon the Collateral Agent's demand, the Borrower and/or the Subsidiary Guarantor, as the case may, shall take all such actions as shall be reasonably requested by the Collateral Agent to grant to the Collateral Agent for the benefit of the BofA Agent, the BofA Lenders, the Agent and the Lenders, as appropriate, a perfected Lien on any such Indebtedness for Borrowed Money and provided further that the principal amount of all such Indebtedness for Borrowed Money shall not exceed at any time in the aggregate Five Hundred Thousand Dollars ($500,000), (ix) investments permitted by Section 6.2.1 (Capital Structure), (x) Indebtedness for Borrowed Money permitted by Section 6.2.4(i), and (xi) the receipt of securities in connection with the settlement of claims against any customer, supplier or vendor or as a result of the bankruptcy of any such customer, supplier or vendor; provided that the Collateral Agent shall be granted a perfected first priority Lien on any such securities with respect to the BofA obligations and a second priority Lien with respect to the Obligations, except that at all times after the BofA Termination Date, the Lien securing the Obligations shall be a first priority Lien, (b) guaranty or otherwise become contingently liable for the Indebtedness or obligations of any Person, except that the Borrower and any Subsidiary Guarantor shall be permitted to guaranty (i) any Indebtedness for Borrowed Money of the Borrower, any Subsidiary Guarantor, Berry UK, NIM Holdings, the Italian Holding Company, Capsol Italy or Ociesse otherwise permitted by the provisions of Section 6.2.4 (Indebtedness), (ii) the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (iii) the obligations of the Borrower under the Subordinated Debt and the Senior Secured Debt, (iv) the Obligations and (v) the BofA Obligations, or (c) make any loans or advances, or otherwise extend credit to any Person, except (i) any advance to an officer or employee of the Borrower or any Subsidiary for travel or other 72 business expenses in the ordinary course of business, provided that the aggregate amount of all such advances by all of the Borrower and its Subsidiaries (taken as a whole) outstanding at any time shall not exceed Five Hundred Thousand Dollars ($500,000), (ii) trade credit extended to customers in the ordinary course of business, (iii) ordinary course advances to customers in connection with the production of molds and related materials, and (iv) ordinary course working capital advances and loans to and from the Borrower to any Guarantor and to and from any Guarantor to the Borrower or any other Guarantor. 6.2.6 Capital Expenditures. Except for Permitted Acquisitions, permitted reinvestments of Permitted Asset Dispositions and Capital Expenditures made for the acquisition or construction of Fixed or Capital Assets that are contemplated to be sold in connection with a sale-leaseback transaction referred to in clause (A) of the last sentence of Section 6.2.16, the Borrower will not and will not permit any Subsidiary to, directly or indirectly, make any Capital Expenditures in the aggregate for the Borrower, Berry UK, NIM Holdings and their respective Subsidiaries (taken as a whole) in amount which exceed Thirty-six Million Dollars ($36,000,000) (the "Capital Expenditure Ceiling") during any fiscal year. If in any given fiscal year, the total Capital Expenditures of the Borrower, Berry UK, NIM Holdings and its or their Subsidiaries, taken as a whole, are less than the applicable Capital Expenditure Ceiling for that fiscal year, the unused portion of the amount permitted for Capital Expenditures (the "Carry Forward Amount') may be used to increase the applicable Capital Expenditure Ceiling for the then next succeeding fiscal year. The Carry Forward Amount for any given fiscal year cannot be carried forward for more than one (1) fiscal year. 6.2.7 Stock of Subsidiaries. The Borrower will not sell or otherwise dispose of any shares of capital stock of any Subsidiary (except as necessary or incident to any transaction permitted by Section 6.2.1 (Capital Structure) or Section 6.2.6 (Capital Expenditures)) or permit any Subsidiary to issue any additional shares of its capital stock except pro rata to its stockholders. 6.2.8 Subordinated Indebtedness. The Borrower will not and will not permit any Subsidiary to make: (a) (i) any payment on account of the Subordinated Debt in violation of the subordination provisions or agreements relating to such Subordinated Debt, or (ii) any payment on account of any other Subordinated Indebtedness in violation of the subordination provisions relating to such Subordinated Indebtedness; (b) any amendment or modification of to the documents evidencing or securing the Subordinated Indebtedness; and (c) any payment of principal or interest on the Subordinated Indebtedness other than when due, except that Subordinated Indebtedness may be prepaid, redeemed, repurchased, refinanced, replaced, refunded or defeased from the proceeds of any offering of Securities or Indebtedness by the Parent or the Borrower; provided that at the time of 73 such prepayment there does not exist a Default or an Event of Default and provided that such offering of Securities or Indebtedness is otherwise permitted by the provisions of this Agreement. 6.2.9 Liens. The Borrower agrees that it (a) will not create, incur, assume or suffer to exist any Lien upon any of its properties or Assets, whether now owned or hereafter acquired, or permit any Subsidiary so to do, except for (i) Liens securing the BofA Obligations and the Obligations with the Liens securing the BofA Obligations to be at all times and in all respects senior to the Liens securing the Obligations, and (ii) Permitted Liens, (b) will not allow or suffer to exist any Permitted Liens to be superior to Liens securing the Obligations and the BofA Obligations, or permit any Subsidiary so to do, except for (i) statutory landlord's Liens with respect to which the Collateral Agent has not obtained a landlord's waiver and subordination, (ii) existing Liens securing Indebtedness for Borrowed Money under and in connection with the "Bonds" (as defined in the BofA Financing Agreement), and (iii) Liens which have priority as a matter of law and which do not otherwise constitute or give rise to a Default or an Event of Default and for which the BofA Agent has established a reserve against the "Borrowing Base" (as defined in the BofA Financing Agreement) in an amount to be determined by the BofA Agent in its reasonable discretion, (c) except as otherwise permitted by the provisions of this Agreement, will not enter into any contracts for the consignment of goods, will not execute or suffer the filing of any financing statements or the posting of any signs giving notice of consignments, and will not, as a material part of its business, engage in the sale of goods belonging to others, or permit any Subsidiary so to do, and (d) will not allow or suffer to exist the failure of any Lien described in the Security Documents to attach to, and/or remain at all times perfected on, any of the property described in the Security Documents, except with respect to any Assets disposed of as part of a Permitted Asset Disposition. 6.2.10 Transactions with Affiliates. Neither the Borrower nor any of its Subsidiaries will enter into any transaction with any Affiliate except in the ordinary course of business, in each case, upon terms no less favorable to the Borrower or any Subsidiary than would be obtained in an arms-length, third party transaction. The foregoing provision shall not restrict (a) any employment agreement entered into by the Borrower or any of its Subsidiaries in the ordinary course of business and consistent with the past practices of the Borrower and/or any such Subsidiary, (b) transactions between or among the Borrower and/or the Subsidiary Guarantors, (c) transactions between First Atlantic Capital, Ltd. ("First Atlantic"), pursuant to the Second Amended and Restated Management Agreement dated as of June 18, 1996, as amended to the date hereof or otherwise amended with the BofA Agent's prior written consent (at any time on or before the BofA Termination Date and, thereafter, the Agent) (solely for purposes of this Section 6.2.10) between the Borrower and First Atlantic, (d) the payment of Distributions permitted by Section 6.2.3 (Purchase or Redemption of Securities), (e) any transaction fee payable to First Atlantic not to exceed $1,250,000 per transaction and (f) intercompany investments and loans between and among the Borrower, Berry UK, NIM Holdings, the Italian Holding Company, Capsol Italy and Ociesse as and to the extent permitted by the provisions of this Agreement. 74 6.2.11 ERISA Compliance. Neither the Borrower nor any Commonly Controlled Entity shall: (a) engage in or permit any "prohibited transaction" (as defined in ERISA); (b) cause any "accumulated funding deficiency" as defined in ERISA and/or the Internal Revenue Code; (c) terminate any pension plan in a manner which could result in the imposition of a lien on the property of the Borrower pursuant to ERISA; (d) terminate or consent to the termination of any Multi-employer Plan; or (e) incur a complete or partial withdrawal with respect to any Multi-employer Plan. 6.2.12 Prohibition on Hazardous Materials. The Borrower shall not place, manufacture or store or permit to be placed, manufactured or stored any Hazardous Materials on any property owned, operated or controlled by the Borrower or for which the Borrower is responsible other than Hazardous Materials placed or stored on such property in accordance with applicable Laws in the ordinary course of the Borrower's or any tenant's business expressly described in this Agreement, or permit any Subsidiary to do so. 6.2.13 Amendments. The Borrower will not amend or agree to amend any of the Subordinated Debt Loan Documents or any of the Senior Secured Debt Loan Documents, other than in the normal course of business unless otherwise agreed by the BofA Agent in accordance with the terms of the BofA Financing Agreement at any time on or before the BofA Termination Date and, thereafter unless otherwise agreed by the Agent. 6.2.14 Method of Accounting; Fiscal Year. The Borrower agrees that: (a) it shall not change, or permit any Subsidiary to change, the method of accounting employed in the preparation of any financial statements furnished to the Agent under the provisions of Section 6.1.1 (Financial Statements), unless required to conform to GAAP and on the condition that the Borrower's accountants shall furnish such information as the Agent may request to reconcile the changes with the Borrower's prior financial statements; and (b) it will not change or permit any Subsidiary to change, its fiscal year from a year ending on or about December 31. 6.2.15 Transfer of Collateral. Neither the Borrower nor any of its Subsidiaries will transfer, or permit the transfer, to another location of any of the Collateral or the books and records related to any of the Collateral, except (a) for transfers among the Borrower and the Subsidiary Guarantors, if and to the extent the priority of the Liens of the Collateral Agent (subject to Permitted Liens) would be unaffected by any such transfers, (b) transfers of Inventory in the ordinary course of business to bailees, warehousemen, consignees or similar third parties if and to the extent that either (i) 75 such bailees, warehousemen, consignees or similar third parties have entered into an agreement with the Collateral Agent in which such bailees, warehousemen, consignees or similar third parties consent and agree to the superior Liens of the Collateral Agent on such Inventory and to such other terms and conditions as may be reasonably required by the Collateral Agent or (ii) the BofA Agent has established reserves against the Borrowing Base with respect to any such Inventory so transferred in accordance with the provisions set forth in the definition of "Eligible Domestic Inventory" (as defined in the BofA Financing Agreement), which reserves the BofA Agent shall establish upon the Borrower's request, (d) temporary transfers of Equipment offsite for repairs; provided that such Equipment is promptly upon repair returned to a location in which the Collateral Agent has perfected its Liens (subject only to Permitted Liens), and (e) usual and customary transfers of mobile Equipment (such as laptop computers) by employees of the Borrower and/or a Subsidiary Guarantor in the ordinary course of their employment. 6.2.16 Sale and Leaseback. Neither the Borrower nor any of the Subsidiaries will directly or indirectly enter into any arrangement to sell or transfer all or any substantial part of its fixed assets and thereupon or within one year thereafter rent or lease the assets so sold or transferred, except as contemplated by clause (k) of the definition of Permitted Asset Disposition. Notwithstanding the foregoing, the Borrower and its Subsidiaries shall be permitted to enter into one or more such sale-leaseback transactions involving Fixed or Capital Assets, including, without limitation the property described in clause (k) of the definition of Permitted Asset Dispositions; provided that in each case, either (A) in the case of the real property, improvements and fixtures subject to the lien of the Deed of Trust - Evansville as more particularly described on Schedule 1.1B - Evansville Sale Leaseback attached to and made a part of the BofA Financing Agreement (i) such transaction is consummated prior to the date 120 days following the date the Borrower or the applicable Subsidiary has acquired and/or completed construction of all the assets to which such transaction relates, (ii) the aggregate cost of the assets (other than the property described in such clause (k)) sold in all transactions covered by this clause (A) does not exceed $7,000,000, and (iii) such transaction shall be reasonably satisfactory to the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent) or (B) such transaction complies with the provisions of clause (g) of the definition of Permitted Asset Disposition. ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES Section 7.1 Events of Default. The occurrence of any one or more of the following events shall constitute an "Event of Default" under the provisions of this Agreement: 7.1.1 Failure to Pay. The failure of the Borrower to pay any of the Obligations to be paid by them under the terms of this Agreement within three (3) days of the date as and when due and payable in accordance with the provisions of this Agreement, the Notes and/or any of the other Financing Documents; 76 7.1.2 Breach of Representations and Warranties. Any representation or warranty made by or on behalf of the Borrower or any Subsidiary Guarantor in this Agreement, in any of the other Financing Documents, or in any report, statement, schedule, certificate, opinion, financial statement or other document furnished in connection with this Agreement, any of the other Financing Documents, or the Obligations, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect. 7.1.3 Failure to Comply with Certain Covenants. The failure of the Borrower to perform, observe or comply, or the Borrower to cause any Subsidiary Guarantor to perform, observe or comply, as appropriate, with any covenant, condition or agreement contained in Section 6.1.1 (Financial Statements), Section 6.1.3(a) (Bookkeeping, Rights of Inspection, Field Examination, Etc.) with respect to inspection rights only, Section 6.1.8 (Insurance), Section 6.1.13 (Financial Covenants), Section 6.1.14 (Insurance with Respect to Equipment), Section 6.1.16 (Defense of Title and Further Assurances), Section 6.1.17 (Business Names; Locations), or Section 6.2 (Negative Covenants). 7.1.4 Failure to Comply with Other Covenants. The failure of the Borrower to perform, observe or comply, or the Borrower to cause any Subsidiary Guarantor to perform, observe or comply, as appropriate, with any covenant, condition or agreement contained in this Agreement other than those set forth in Section 7.1.1 (Failure to Pay), Section 7.1.2 (Breach of Representations and Warranties) or Section 7.1.3 (Failure to Comply with Certain Covenants), which failure shall remain unremedied for a period of thirty (30) days after written notice thereof to the Borrower by the Agent. 7.1.5 Default Under Other Financing Documents or Obligations. The failure of the Borrower and/or any other Person (other than the BofA Agent, any of the BofA Lenders, the Agent or any of the Lenders) which is a party to any of the Financing Documents, to perform, observe or comply with any covenant, condition or agreement contained in any such Financing Documents which is not otherwise covered by any other Section of this ARTICLE VII, which failure shall remain unremedied for a period of thirty (30) days after written notice thereof to the Borrower by the Agent or the occurrence of an Event of Default under any of the other Financing Documents as defined therein. 7.1.6 Receiver; Bankruptcy. The Borrower, Berry UK, NIM Holdings or any Guarantor shall (a) apply for or consent to the appointment of a receiver, trustee or liquidator of itself or any of its property, (b) admit in writing its inability to pay its debts as they mature, (c) make a general assignment for the benefit of creditors, (d) be adjudicated a bankrupt or insolvent under any applicable Laws, (e) file a voluntary petition in bankruptcy or a petition or an answer seeking or consenting to reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or 77 statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or take corporate action for the purposes of effecting any of the foregoing under any applicable Laws, or (f) by any act indicate its consent to, approval of or acquiescence in any such proceeding or the appointment of any receiver of or trustee for any of its property, or suffer any such receivership, trusteeship or proceeding to continue undischarged for a period of sixty (60) days, or (g) by any act indicate its consent to, approval of or acquiescence in any order, judgment or decree by any court of competent jurisdiction or any Governmental Authority enjoining or otherwise prohibiting the operation of all or substantially all of the Borrower's or any Guarantor's business or the use or disposition of all or substantially all of its or their respective assets. 7.1.7 Involuntary Bankruptcy, etc. (a) An order for relief shall be entered in any involuntary case brought against the Borrower, Berry UK, NIM Holdings or any Guarantor under the Bankruptcy Code or comparable Law, or (b) any such case shall be commenced against the Borrower, Berry UK, NIM Holdings or any Guarantor and shall not be dismissed within sixty (60) days after the filing of the petition, or (c) an order, judgment or decree under any other Law is entered by any court of competent jurisdiction or by any other Governmental Authority on the application of a Governmental Authority or of a Person other than the Borrower, Berry UK, NIM Holdings or any Guarantor (i) adjudicating the Borrower, Berry UK, NIM Holdings or any Guarantor bankrupt or insolvent, or (ii) appointing a receiver, trustee or liquidator of the Borrower, of Berry UK, of NIM Holdings or of any Guarantor, or of a material portion of its or their assets, or (iii) enjoining, prohibiting or otherwise limiting the operation of all or substantially all of its or their business or the use or disposition of all or substantially all of its or their assets, and such order, judgment or decree continues unstayed and in effect for a period of thirty (30) days from the date entered. 7.1.8 Judgment. Unless adequately insured in the reasonable opinion of the BofA Agent (at any time on or before the BofA Termination Date and, thereafter, the Agent), the entry of a final judgment for the payment of money involving more than $1,000,000 (individually and in the aggregate) against the Borrower, Berry UK, NIM Holdings and/or any or all of the Guarantors, and the failure by the Borrower, Berry UK, NIM Holdings or such Guarantor to discharge the same, or cause it to be discharged, within sixty (60) days from the date of the order, decree or process under which or pursuant to which such judgment was entered, or to secure a stay of execution pending appeal of such judgment. 7.1.9 Execution; Attachment. Any execution or attachment shall be levied against the Collateral, or any part thereof, and such execution or attachment shall not be set aside, discharged or stayed within sixty (60) days after the same shall have been levied. 78 7.1.10 Default Under Other Borrowings. An event of default shall be made with respect to any Indebtedness for Borrowed Money in a principal amount in excess of Two Million Dollars ($2,000,000), either individually or in the aggregate, of the Borrower, Berry UK, NIM Holdings and/or any or all of the Guarantors, other than the Loans, if such Indebtedness for Borrowed Money was not paid when due, after giving effect to any applicable notice and cure period, or if the effect of such event of default is to accelerate the maturity of such Indebtedness for Borrowed Money or to permit the holder or obligee thereof or other party thereto to cause such Indebtedness for Borrowed Money to become due prior to its stated maturity. 7.1.11 Challenge to Agreements. The Borrower, Berry UK, NIM Holdings or any Guarantor shall challenge the validity and binding effect of any provision of any of the Financing Documents or any of the Financing Documents shall for any reason (except to the extent permitted by its express terms) cease to be effective or to create a valid and perfected second priority Lien (except for Permitted Liens, certain of which Permitted Liens, to the extent expressly permitted by the provisions of this Agreement, may constitute superior and prior Liens) on, or security interest in, any of the Collateral purported to be covered thereby, unless due to the gross negligence or willful misconduct of the Collateral Agent or the Agent. 7.1.12 Material Adverse Change. The Requisite Lenders, in their sole discretion, determine in good faith that a material adverse change has occurred in the financial condition of the Borrower, Berry UK, NIM Holdings and the Subsidiary Guarantors, taken as a whole. 7.1.13 Change in Ownership. (a) The Borrower shall cease to own and control, beneficially and of record, directly or indirectly, at least one hundred percent (100%) of the issued and outstanding capital stock of NIM Holdings and each Subsidiary Guarantor (except pursuant to any transaction permitted by Section 6.2.1 (Capital Structure) or Section 6.2.2 (Subsidiaries)), (b) NIM Holdings shall cease to own and control, beneficially and of record, directly or indirectly, at least one hundred percent (100%) of the issued and outstanding capital stock of Berry UK, (C) the Parent shall cease to own and control, beneficially and of record, directly or indirectly, at least one hundred percent (100%) of the issued and outstanding capital stock of the Borrower, or (c) Atlantic Equity Partners International II, L. P. ("AEP"), Chase Capital Partners, and their respective Affiliates shall cease to own and control, beneficially and of record, at least fifty-one percent (51%) or more of the issued and outstanding voting capital stock of the Parent. 7.1.14 Liquidation, Termination, Dissolution, Change in Management, etc. The Borrower, Berry UK, NIM Holdings or any Guarantor shall liquidate, dissolve or terminate its existence, except as otherwise expressly permitted by the provisions of Section 6.2 (Negative Covenants). 79 7.1.15 Parent Line of Business. At any time the Parent engages in any business other than the ownership of capital stock of the Borrower or any other Wholly-Owned Subsidiary or such other business as shall be mandatory under the provisions of applicable Laws. 7.1.16 Failure to Pay Senior Secured Debt - Parent. The failure of the Parent to make any scheduled interest payment on account of the Senior Secured Debt - Parent as and when such payment is due and payable, regardless of any applicable notice, grace or cure period. Section 7.2 Remedies. Upon the occurrence of any Event of Default and subject to the terms and conditions of the Intercreditor Agreement, the Agent, may, in the exercise of its sole and absolute discretion from time to time, and shall, at the direction of the Requisite Term Loan Lenders, at any time thereafter exercise any one or more of the following rights, powers or remedies: 7.2.1 Acceleration. The Agent may declare any or all of the Obligations to be immediately due and payable, notwithstanding anything contained in this Agreement or in any of the other Financing Documents to the contrary, without presentment, demand, protest, notice of protest or of dishonor, or other notice of any kind, all of which the Borrower hereby waives. 7.2.2 Uniform Commercial Code. Subject to the terms and conditions of the Intercreditor Agreement, the Collateral Agent shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws. Upon demand by the Collateral Agent, the Borrower shall assemble the Collateral and make it available to the Collateral Agent at a place designated by the Collateral Agent. The Collateral Agent, or its agents may without notice from time to time enter upon the Borrower's premises to take possession of the Collateral, to remove it, to render it unusable, to process it or otherwise prepare it for sale, or to sell or otherwise dispose of it. Any written notice of the sale, disposition or other intended action by the Collateral Agent with respect to the Collateral which is sent by regular mail, postage prepaid, to the Borrower at the address set forth in Section 9.1 (Notices), or such other address of the Borrower which may from time to time be shown on the Collateral Agent's records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the Borrower. The Collateral Agent may alternatively or additionally give such notice in any other commercially reasonable manner. If any consent, approval, or authorization of any state, municipal or other Governmental Authority or of any other Person or of any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Collateral, the Borrower 80 agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization. The Borrower recognizes that the Collateral Agent may be unable to effect a public sale of all or a part of the Collateral consisting of Securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable Federal and state Laws. The Collateral Agent may, therefore, in its discretion, take such steps as it may deem appropriate to comply with such Laws and may, for example, at any sale of the Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Collateral Agent, that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof. The Borrower covenants and agrees to do or cause to be done promptly all such acts and things as the Collateral Agent may request from time to time and as may be necessary to offer and/or sell the Securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws. Upon any such sale or disposition, the Collateral Agent shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral consisting of securities so sold. 7.2.3 Specific Rights With Regard to Collateral. In addition to all other rights and remedies provided - -hereunder or as shall exist at law or in equity from time to time, but subject to the terms and conditions of the Intercreditor Agreement, the Collateral Agent may (but shall be under no obligation to), without notice to the Borrower and upon the occurrence of an Event of Default the Borrower hereby irrevocably appoints the Collateral Agent, as its attorney-in-fact, with power of substitution, in the name of the Collateral Agent, the Agent and/or any or all of the Lenders and/or in the name of the Borrower or otherwise, for the use and benefit of the Collateral Agent, the Agent and the Lenders, but at the cost and expense of the Borrower, as and to the extent permitted by the provisions of this Agreement: (a) request any Account Debtor obligated on any of the Accounts to make payments thereon directly to the Collateral Agent, with the Collateral Agent taking control of the cash and non-cash proceeds thereof; (b) compromise, extend or renew any of the Collateral or deal with the same as it may deem advisable, (c) make exchanges, substitutions or surrenders of all or any part of the Collateral; (d) copy, transcribe, or remove from any place of business of the Borrower or any Subsidiary all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Collateral or without cost or expense to the Collateral Agent, the Agent or any of the Lenders, make such use of the Borrower's or any Subsidiary's place(s) of business as may be reasonably necessary to administer, control and collect the Collateral; 81 (e) repair, alter or supply goods if necessary to fulfill in whole or in part the purchase order of any Account Debtor; (f) demand, collect, receipt for and give renewals, extensions, discharges and releases of any of the Collateral; (g) institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Collateral; (h) settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Collateral or any legal proceedings brought in respect thereof; (i) endorse or sign the name of the Borrower upon any items of payment, certificates of title, instruments, securities, stock powers, documents, documents of title, financing statements, assignments, notices or other writing relating to or part of the Collateral and on any proof of claim in bankruptcy or comparable Laws against an Account Debtor; (j) notify the Post Office authorities to change the address for the delivery of mail to the Borrower to such address or Post Office Box as the Collateral Agent may designate and receive and open all mail addressed to the Borrower; and (k) take any other action necessary or beneficial to realize upon or dispose of the Collateral or to carry out the terms of this Agreement. 7.2.4 Application of Proceeds. Unless otherwise required by applicable Laws and subject to the terms and conditions of the Intercreditor Agreement, any proceeds of sale or other disposition of the Collateral received by the Collateral Agent will be applied by the Collateral Agent first to the payment of any and all BofA Obligations then outstanding, second to the Agent's Obligations, third to any and all Enforcement Costs, and any balance of such proceeds will be remitted to the Lenders, in like funds received ratably in accordance with their respective Pro Rata Shares of such balance. Each Lender shall apply any such proceeds received from the Collateral Agent or the Agent to its Obligations in such order and manner as such Lender shall determine. If the sale or other disposition of the Collateral fails to fully satisfy the Obligations, the Borrower shall remain liable to the Agent and the Lenders for any deficiency. 7.2.5 Performance by Collateral Agent. If the Borrower shall fail to pay the Obligations, or otherwise fail to perform, observe or comply with any of the conditions, covenants, terms, stipulations or agreements contained in this Agreement or any of the other Financing Documents, the Collateral Agent without notice to or demand upon the Borrower and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Borrower and may enter upon the premises of the Borrower, for that purpose and take all 82 such action thereon as the Collateral Agent may consider necessary or appropriate for such purpose and the Borrower hereby irrevocably appoints the Collateral Agent as its attorney-in-fact upon the occurrence of an Event of Default to do so, with power of substitution, in the name of the Collateral Agent, the Agent, in the name of any or all of the Lenders, or in the name of the Borrower or otherwise, for the use and benefit of the Collateral Agent, but at the cost and expense of the Borrower and without notice to the Borrower. All sums so paid or advanced by the Collateral Agent together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the Borrower to the Collateral Agent on demand, and shall constitute and become a part of the Agent's Obligations. 7.2.6 Other Remedies. Subject to the terms and conditions of the Intercreditor Agreement, the Agent may from time to time proceed to protect or enforce the rights of the Agent and/or any of the Lenders by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws. If the BofA Obligations have been paid in full and all "Commitments" and "Letters of Credit" under the BofA Financing Agreement have been terminated or have expired, the Agent and each of the Lenders are authorized to offset and apply to all or any part of the Obligations (but subject to the provisions of Section 7.2.4 (Application of Proceeds) all moneys, credits and other property of any nature whatsoever of the Borrower now or at any time hereafter in the possession of, in transit to or from, under the control or custody of, or on deposit with, the Agent, any of the Lenders or any Affiliate of the Agent or any of the Lenders. ARTICLE VIII THE AGENT Section 8.1 Appointment. Each Lender hereby designates and appoints GE Capital as its agent under this Agreement and the Financing Documents, and each Lender hereby irrevocably authorizes the Agent to take such action or to refrain from taking such action on its behalf under the provisions of this Agreement and the Financing Documents and to exercise such powers as are set forth herein or therein, together with such other powers as are reasonably incidental thereto. The Agent agrees to act as such on the express conditions contained in this ARTICLE VIII. The provisions of this ARTICLE VIII are solely for the benefit of the Agent and the Lenders and neither the Borrower nor any Person shall have any rights as a third party beneficiary of any of the provisions hereof, except for those rights expressly granted to the Borrower pursuant to Section 8.7.1 (Resignation), Section 8.8 (Collateral Matters), Section 8.11 (Consents) and Section 8.12 (Circumstances Where All Lenders Required). In performing its functions and duties under this Agreement, the Agent shall act solely as an administrative representative of the Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for the Lenders, the Borrower or any Person. The Agent 83 may perform any of its duties hereunder, or under the Financing Documents, by or through its agents or employees. Section 8.2 Nature of Duties. 8.2.1 In General. The Agent shall have no duties, obligations or responsibilities except those expressly set forth in this Agreement or in the Financing Documents. The duties of the Agent shall be mechanical and administrative in nature. The Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender. Each Lender shall make its own independent investigation of the financial condition and affairs of the Borrower in connection with the extension of credit hereunder and shall make its own appraisal of the credit worthiness of the Borrower and the Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the Closing Date or at any time or times thereafter. If the Agent seeks the consent or approval of any of the Lenders to the taking or refraining from taking of any action hereunder, then the Agent shall send notice thereof to each Lender. The Agent shall promptly notify each Lender any time that the applicable percentage of the Lenders have instructed the Agent to act or refrain from acting pursuant hereto. 8.2.2 Express Authorization. The Agent is hereby expressly and irrevocably authorized by each of the Lenders, as agent on behalf of itself and the other Lenders: (a) To receive on behalf of each of the Lenders any payment or collection on account of the Obligations and to distribute to each Lender its Pro Rata Share of all such payments and collections so received as provided in this Agreement; (b) To receive all documents and items to be furnished to the Lenders under the Financing Documents; (c) To act or refrain from acting in this Agreement and in the other Financing Documents with respect to those matters so designated for the Agent; (d) To act as nominee for and on behalf of the Lenders in and under this Agreement and the other Financing Documents; (e) To arrange for the means whereby the funds of the Lenders are to be made available to the Borrower; (f) To distribute promptly to the Lenders, if required by the terms of this Agreement, all written information, requests, notices, Loan Notices, payments, Prepayments, documents and other items received from the Borrower; (g) To amend, modify, or waive any provisions of this Agreement or the other Financing Documents on behalf of the Lenders subject to the 84 requirements that all or certain of the Lenders' consent be obtained in certain instances as provided in Section 8.12 (Circumstances All Lenders Required) and Section 9.2 (Amendments; Waivers); (h) To deliver to the Borrower and other Persons, all requests, demands, approvals, notices, and consents received from any of the Lenders; (i) To exercise on behalf of each Lender all rights and remedies of the Lenders upon the occurrence of any Event of Default and/or Default specified in this Agreement and/or in any of the other Financing Documents or applicable Laws; (j) To execute any of the Security Documents and any other documents on behalf of the Lenders as the secured party for the benefit of the Collateral Agent, the Agent and the Lenders; and (k) To take such other actions as may be requested by the Requisite Lenders. The Collateral Agent is hereby expressly and irrevocably authorized by the Agent and each of the Lenders, as agent on behalf of the Collateral Agent, the Agent and the Lenders to execute any of the Security Documents and any other documents on behalf of the Agent and the Lenders, as the secured party for the benefit of the Collateral Agent, the BofA Lenders, the Agent and the Lenders. Section 8.3 Rights, Exculpation, Etc. Neither the Agent nor any of its officers, directors, employees or agents shall be liable to any Lender for any action taken or omitted by them hereunder or under any of the Financing Documents, or in connection herewith or therewith, except that the Agent shall be obligated on the terms set forth herein for performance of its express obligations hereunder, and except that the Agent shall be liable with respect to its own gross negligence or willful misconduct. The Agent shall not be liable for any apportionment or distribution of payments made by it in good faith and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due but not made, shall be to recover from other the Lenders any payment in excess of the amount to which they are determined to be entitled (and such other Lenders hereby agree to return to such Lender any such erroneous payments received by them). The Agent shall not be responsible to any Lender for any recitals, statements, representations or warranties herein or for the execution, effectiveness, genuineness, validity, enforceability, collectible, or sufficiency of this Agreement or any of the Financing Documents or the transactions contemplated thereby, or for the financial condition of any Person. The Agent shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any of the Financing Documents or the financial condition of any Person, or the existence or possible existence of any Default or Event of Default. The Agent agrees to use its reasonable efforts to notify the Lenders as to the occurrence of any material Event of Default promptly upon obtaining actual knowledge thereof, provided, however, that the failure in good faith of the Agent to so notify any Lender shall not give rise to any liability on the part of the Agent nor shall it waive, discharge or otherwise adversely affect the Agent's ability to exercise and enforce any 85 rights or remedies resulting from such Event of Default. The Agent may at any time request instructions from the Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the Financing Documents the Agent is permitted or required to take or to grant, and the Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from any action or withholding any approval under any of the Financing Documents until it shall have received such instructions from the applicable percentage of the Lenders. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Agent as a result of the Agent acting or refraining from acting under this Agreement or any of the other Financing Documents in accordance with the instructions of the applicable percentage of the Lenders and notwithstanding the instructions of the Lenders, the Agent shall have no obligation to take any action if it, in good faith believes that such action exposes the Agent to any liability. Section 8.4 Reliance. The Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message or other communication (including any writing, telex, telecopy or telegram) believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the Financing Documents and its duties hereunder or thereunder, upon advice of counsel selected by it. The Agent may deem and treat the original Lenders as the owners of the respective Notes for all purposes until receipt by the Agent of a written notice of assignment, negotiation or transfer of any interest therein by the Lenders in accordance with the terms of this Agreement. Any interest, authority or consent of any holder of any of the Notes shall be conclusive and binding on any subsequent holder, transferee, or assignee of such Notes. The Agent shall be entitled to rely upon the advice of legal counsel, independent accountants, and other experts selected by the Agent in its sole discretion. Section 8.5 Indemnification. Each Lender, severally, agrees to reimburse and indemnify the Agent for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements including, without limitation, Enforcement Costs, of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any of the Financing Documents or any action taken or omitted by the Agent under this Agreement for any of the Financing Documents, in proportion to each Lender's Pro Rata Share, all of the foregoing as they may arise, be asserted or be imposed from time to time; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements resulting from the Agent's gross negligence or willful misconduct. The obligations of the Lenders under this Section 8.5 shall survive the payment in full of the Obligations and the termination of this Agreement. Section 8.6 GE Capital Individually. With respect to its Commitment and the Loans made by it, and the Note issued to it, GE Capital shall have and may exercise the same rights and powers hereunder and is subject to the 86 same obligations and liabilities as and to the extent set forth herein for any other Lender. The terms "the Lenders", "Requisite Lenders" or "Requisite Term Loan Lenders" or any similar terms shall, unless the context clearly otherwise indicates, include GE Capital in its individual capacity as a Lender, one of the Requisite Lenders or one of the Requisite Term Loan Lenders. GE Capital and its Affiliates may lend money to, accept deposits from and generally engage in any kind of banking, trust or other business with the Borrower, any Affiliate of the Borrower, or any other Person or any of their officers, directors and employees as if GE Capital were not acting as the Agent pursuant hereto and the Agent may accept fees and other consideration from the Borrower, any Affiliate of the Borrower or any of their officers, directors and employees (in addition to the Fees or other arrangements or fees heretofore agreed to between the Borrower and the Agent) for services in connection with this Agreement or otherwise without having to account for or share the same with the Lenders. Section 8.7 Successor Agent. 8.7.1 Resignation. The Agent may resign from the performance of all its functions and duties hereunder at any time by giving at least thirty (30) Business Days' prior written notice to the Borrower and the Lenders. Such resignation shall take effect upon the acceptance by a successor Agent of appointment pursuant to Section 8.7.2 (Appointment of Successor) or as otherwise provided below. 8.7.2 Appointment of Successor. Upon any such notice of resignation pursuant to Section 8.7.1 (Resignation), the Requisite Term Loan Lenders, with the consent of GE Capital and the Borrower, shall appoint a successor to the Agent. If a successor to the Agent shall not have been so appointed within said thirty (30) Business Day period, the Agent retiring, upon notice to the Borrower, shall then appoint a successor Agent who shall serve as the Agent until such time, as the Requisite Term Loan Lenders appoint a successor the Agent as provided above. 8.7.3 Successor Agent. Upon the acceptance of any appointment as the Agent under the Financing Documents by a successor Agent, such successor to the Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the Agent retiring, and the Agent retiring shall be discharged from its duties and obligations under the Financing Documents. After any Agent's resignation as the Agent under the Financing Documents, the provisions of this ARTICLE VIII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Agent under the Financing Documents. 87 Section 8.8 Collateral Matters. 8.8.1 Release of Collateral. The Agent and the Lenders, as appropriate, hereby irrevocably authorize the Collateral Agent, at its option and in its discretion, to release any Lien granted to or held by the Collateral Agent upon any property covered by this Agreement or the Financing Documents: (a) upon termination of the Commitments and this Agreement and payment and satisfaction of all Obligations (other than contingent indemnification and expense reimbursement obligations for which no claim has been made); (b) constituting property being sold or disposed of if the Borrower certifies to the Collateral Agent that the sale or disposition is made in compliance with the provisions of this Agreement and the Collateral Agent and the Agent may rely in good faith conclusively on any such certificate, without further inquiry); (c) constituting property leased to the Borrower or any Subsidiary under a lease which has expired or been terminated in a transaction permitted under this Agreement or is about to expire and which has not been, and is not intended by the Borrower or the Subsidiary to be, renewed or extended; or (d) constituting property covered by Permitted Liens with lien priority superior to those Liens in favor or for the benefit of the Collateral Agent. In addition during any fiscal year of the Borrower on or before the BofA Termination Date (x) the Collateral Agent may release Collateral having a book value of not more than 5% of the book value of all Collateral, (y) the Collateral Agent, with the consent of the Requisite Lenders, may release Collateral having a book value of not more than 25% of the book value of all Collateral or (z)(1) the Collateral Agent, with the consent of the BofA Lenders and the Lenders holding, in the aggregate, at least 90% of (i) the BofA Commitments and (ii) the Term Loans or, (2) the Collateral Agent, with the consent of all of the BofA Lenders (excluding any BofA Lender which is also a GE Lender) may release its Lien on all or substantially all of the Collateral (and in connection therewith may release, terminate and discharge any Financing Document relating to such Collateral and/or the obligations and liabilities of any Guarantor in connection with a sale of the Borrower and/or any Guarantor and/or a sale of all or substantially all of its or their assets); provided that either: (i) the Collateral Agent has obtained a third-party appraisal or valuation (which may be a fairness valuation) of all of the Collateral or of only the Collateral being released, has furnished a copy of such appraisal or valuation to the Agent and has determined in good faith that (A) in the case of an appraisal or valuation of all of the Collateral, the orderly or forced sale liquidation value (as applicable or whichever is appropriate as determined by the Collateral Agent in good faith), of such Collateral based on such appraisal or valuation (after deducting the actual and anticipated costs and expenses of liquidation) is or would be insufficient to allow for payment of the BofA Obligations in full and/or to result in any surplus payment which would or could be available for payment of 88 the Obligations, or (B) in the case of an appraisal or valuation of less than all of the Collateral, the Collateral being released is sold for an amount at least equal to the value established by such third party appraisal or valuation; or: (ii) the Collateral is sold or to be sold by or on behalf of the Borrower, any Subsidiary Guarantor and/or the Collateral Agent at a commercially reasonable, public auction or an "auction style" private sale arranged or brokered by a third party (such as an investment banker); and provided further that such release is not pursuant to, or required in connection with, debtor-in-possession financing. Notwithstanding the foregoing, at any time on or before the BofA Termination Date and pursuant to or in connection with any debtor-in-possession financing provided to the Borrower and/or any or all of the Subsidiary Guarantors, the Collateral Agent, subject to the terms of the Intercreditor Agreement, may release or subordinate its Lien on all or substantially all of the Collateral (and in connection therewith release, terminate or discharge any Financing Document relating to such Collateral and/or the obligations and liabilities of any Guarantor). During any fiscal year of the Borrower at any time after the BofA Termination Date (x) the Agent, in its capacity as Collateral Agent, may release Collateral having a book value of not more than 5% of the book value of all Collateral, (y) the Agent, in its capacity as Collateral Agent, with the consent of the Requisite Term Loan Lenders, may release Collateral having a book value of not more than 25% of the book value of all Collateral, and (z) the Agent, in its capacity as Collateral Agent and with the consent of the Lenders having 90% of the Loans, may release all the Collateral. 8.8.2 Confirmation of Authority, Execution of Releases. Without in any manner limiting the Collateral Agent's authority to act without any specific or further authorization or consent by the Lenders as set forth in Section 8.8.1 (Release of Collateral), the Agent and each Lender agrees to confirm in writing the authority to release any property covered by this Agreement or the Financing Documents conferred upon the Collateral Agent under Section 8.8.1 (Release of Collateral). So long as no Event of Default is then continuing, upon receipt by the Collateral Agent of confirmation from the requisite percentage, if any, of the Lenders and/or the BofA Lenders, as the case may be, of its authority to release any particular item or types of property covered by this Agreement or the Financing Documents, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Collateral Agent for the benefit of the Agent and Lenders herein or pursuant hereto upon such Collateral; provided, however, that (a) the Collateral Agent shall not be required to execute any such document on terms which, in the Collateral Agent's opinion, would expose the Collateral Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (b) such release shall not in any manner discharge, affect or impair the Obligations or any Liens upon (or obligations of any Person, in respect of), all interests retained by any Person, including, without limitation, the proceeds of any sale, all of which shall continue to constitute part of the property covered by this Agreement or the Financing Documents. 89 8.8.3 Absence of Duty. Neither the Collateral Agent nor the Agent shall have any obligation whatsoever to any Lender, the Borrower, or any other Person to assure that the property covered by this Agreement or the Financing Documents exists or is owned by the Borrower or any Subsidiary Guarantor or is cared for, protected or insured or has been encumbered or that the Liens granted to the Collateral Agent for the benefit of the Agent and the Lenders herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 8.8.3 or in any of the Financing Documents, it being understood and agreed that in respect of the property covered by this Agreement or the Financing Documents or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its discretion, given the Collateral Agent's own interest in property covered by this Agreement or the Financing Documents and that the Collateral Agent shall have no duty or liability whatsoever to the Agent or any of the other the Lenders. Section 8.9 Agency for Perfection; Appointment and Replacement of Collateral Agent. The Agent and each Lender hereby appoints the Collateral Agent as agent for the purpose of perfecting the Liens of the Agent and the Lenders in Collateral which, in accordance with Article 9 of the Uniform Commercial Code in any applicable jurisdiction or otherwise, can be perfected only by possession. Should any Lender obtain possession of any such Collateral, such Lender shall notify the Collateral Agent thereof, and, promptly upon the Collateral Agent's request therefor, shall deliver such Collateral to the Collateral Agent or in accordance with the Collateral Agent's instructions. At any time on or after the BofA Termination Date, upon the request of the Agent, the BofA Agent agrees to resign as Collateral Agent and effective with such resignation the Lenders hereby appoint the Agent as the Collateral Agent. In such case the Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the Collateral Agent, and the BofA Agent shall be discharged from its duties and obligations under this Agreement and the Financing Documents. Section 8.10 Exercise of Remedies. Each Lender agrees that it will not have any right individually to enforce or seek to enforce this Agreement or any Financing Document, it being understood and agreed that such rights and remedies may be exercised only by the Agent. In addition, the Agent and each Lender agree that the exercise of any and all rights hereunder or under any of the Financing Documents is subject to the terms and conditions of the Intercreditor Agreement. Section 8.11 Consents. (a) In the event the Collateral Agent or the Agent requests the consent of a Lender and does not receive a written denial thereof, or a written notice from a Lender that due consideration of the request requires additional time, in each case, within ten 90 (10) Business Days after such Lender's receipt of such request, then such Lender will be deemed to have given such consent. (b) In the event the Agent or the Borrower requests the consent of a Lender and such consent is denied, then the Agent or the Borrower, may, at their option, require such Lender to assign its interest in the Loans to GE Capital or such other lender as shall be acceptable to the Borrower and the Agent, for a price equal to the then outstanding principal amount thereof, plus accrued and unpaid interest, fees and costs and expenses due such Lender under the Financing Documents, which principal, interest, fees and costs and expenses will be paid on the date of such assignment. In the event that the Agent or the Borrower elects to require any Lender to assign its interest to GE Capital or such other lender as shall be acceptable to the Borrower and the Agent, the Agent will so notify such Lender in writing within thirty (30) days following such Lender's denial, and such Lender will assign its interest to GE Capital or such other lender as shall be acceptable to the Borrower and the Agent, no later than five (5) days following receipt of such notice. (c) The Lenders each hereby authorize the Agent on their behalf to execute any and all amendments to this Agreement and any of the other Financing Documents as may be necessary to remedy and correct any clerical errors, omissions or inconsistencies. The Agent agrees to give copies of any and all such executed amendments to each of the Lenders. Section 8.12 Circumstances Where Consent of all of the Lenders is Required. Notwithstanding anything to the contrary contained herein, no amendment, modification, change or waiver shall be effective without the consent of all of the Lenders: (a) increase the principal amount of any of the Term Loans; (b) extend the maturity or due date of payment of principal, interest or Fees on account of the Obligations; (c) reduce the principal amount of any Obligations, the rate of interest on any of the Obligations or any Fees payable, except as expressly permitted therein; (d) change the method of calculation utilized in connection with the computation of interest and Fees; (e) change the manner of pro rata application by the Agent of payments made by the Borrower or any other payments required hereunder or under the other Financing Documents; (f) modify this Section or the definition of "Requisite Lenders" or "Requisite Term Loan Lenders"; and (g) release any material portion of any Collateral, any Guarantor or any Financing Document (except to the extent provided in Section 8.8 of this Agreement or elsewhere in this Agreement or in any such Financing Agreement); 91 Section 8.13 Dissemination of Information. The Agent will provide the Lenders with any information received by the Agent from the Borrower which is required to be provided to the Agent or to the Lenders hereunder; provided, however, that the Agent shall not be liable to any one or more the Lenders for any failure to do so, except to the extent that such failure is attributable to the Agent's gross negligence or willful misconduct. Section 8.14 Consents, Amendments and Waivers on or before BofA Termination Date. The Agent, the Lenders and the Borrower understand and agree that the representations, warranties, covenants, agreements and Events of Default as set forth in this Agreement and in the Financing Documents are intended to be substantially similar to the representations, warranties, covenants, agreements and Events of Default contained in the BofA Financing Agreement and the BofA Financing Documents. The Agent, the Lenders and the Borrower acknowledge and agree that to the extent any determination, consent, amendment or waiver with respect to any terms or conditions of the BofA Financing Agreement is given, obtained or approved in accordance with the provisions of the BofA Financing Agreement, such determination, consent, amendment or waiver shall be considered binding upon the Agent, the Lenders and the Borrower for purposes of this Agreement and the Financing Documents and shall be deemed made, obtained or given, as appropriate, by the Agent, the Lenders and/or the Borrower with respect to the similar or substantially similar term, condition or event contained in or relating to this Agreement and/or in any of the Financing Documents; provided that the definition of "Requisite Lenders" contained in the BofA Financing Agreement has been amended to include the Lenders and the BofA Lenders as a combined voting group, as set forth in the definition of "Requisite Lenders" in this Agreement, such that any consent, determination, amendment or waiver requiring the consent of the BofA Requisite Lenders would take into account the votes of the Lenders as part of the larger group including the Lenders and the BofA Lenders. Notwithstanding the foregoing, under no circumstances shall the Agent or the Lenders be deemed to have consented or approved any matter requiring the consent of all Lenders set forth in Section 8.12 or the consent of the Agent as set forth in Section 9.2 regardless if such matter has received the consent or approval of the BofA Agent and/or all or any portion of the BofA Lenders. ARTICLE IX MISCELLANEOUS Section 9.1 Notices. All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or two (2) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows: 92 Borrower: BERRY PLASTICS CORPORATION 101 Oakley Street P.O. Box 959 Evansville, Indiana 47710-0959 Attention: President with a copy to: Michael J. O'Brien, Esquire O'Sullivan, Graev & Karabell, LLP 30 Rockefeller Center 41st Floor New York, New York 10112 with a copy to: Mr. Joseph S. Levy Vice President First Atlantic Capital, Ltd. 135 East 57th Street, 29th Floor New York, New York 10022 Agent: General Electric Capital Corporation 335 Madison Avenue New York, New York 10017 Attn: Account Manager - Berry Plastics with a copy to: General Electric Capital Corporation 201 High Ridge Road Stamford, Connecticut 06927 Attn: GE Commercial Finance Legal Counsel with a copy to: Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attn: Ted S. Waksman, Esq. Collateral Agent: BANK OF AMERICA, N.A. (on or before Bank of America Business Credit BofA Termination 100 S. Charles Street Date) Baltimore, Maryland 21201 Attention: David B. Thayer with a copy to: Shaun F. Carrick, Esq. Miles & Stockbridge P.C. 10 Light Street Baltimore, Maryland 21202 93 By written notice, each party to this Agreement may change the address to which notice is given to that party, provided that such changed notice shall include a street address to which notices may be delivered by overnight courier in the ordinary course on any Business Day. Section 9.2 Amendments; Waivers. Subject to the terms of Sections 8.8.1 and 8.14, this Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Requisite Lenders (or the Agent with the approval of the Requisite Lenders), the Borrower, and to the extent provided in Section 8.12 by an agreement in writing signed by all of the Lenders and the Borrower. In addition, any agreement which directly or indirectly affects any rights, duties, obligations, liabilities or remedies of the Collateral Agent under this Agreement, under any of other Financing Documents or otherwise must be approved and signed by the Collateral Agent. No waiver of any provision of this Agreement or of any of the other Financing Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Borrower and the Agent and/or any of the Lenders and no act or failure to act from time to time on the part of the Agent and/or any of the Lenders shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws. Without implying any limitation on the foregoing, and subject to the provisions of Section 8.12: (a) Any waiver or consent shall be effective only in the specific instance, for the terms and purpose for which given, subject to such conditions as the Agent may specify in any such instrument. (b) No waiver of any Default or Event of Default shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereto. (c) No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in the same, similar or other circumstance. (d) No failure or delay by the Agent to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver, amendment or modification of any such term, condition, covenant or agreement or of any such breach or preclude the Agent from exercising any such right, power or remedy at any time or times. (e) By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents, the Agent shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any of the other Financing Documents, or to declare a 94 Default or an Event of Default for failure to effect such prompt payment of any such other amount. Section 9.3 Cumulative Remedies. The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative and are subject to the terms and conditions of the Intercreditor Agreement, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Agent shall determine, subject to the provisions of this Agreement, and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws. In order to entitle the Agent to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement. Without limiting the generality of the foregoing and subject to the terms of this Agreement, the Agent may: (a) proceed against the Borrower with or without proceeding against any other Person (including, without limitation, any one or more of the Guarantors) who may be liable (by endorsement, guaranty, indemnity or otherwise) for all or any part of the Obligations; (b) proceed against the Borrower with or without proceeding under any of the other Financing Documents or the Collateral Agent proceeding against any Collateral or other collateral and security for all or any part of the Obligations; (c) without reducing or impairing the obligation of the Borrower and without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise; (d) without reducing or impairing the obligations of the Borrower and without notice thereof: (i) fail, or permit the Collateral Agent to fail, to perfect the Lien in any or all Collateral or to release any or all the Collateral or to accept substitute Collateral, (ii) waive any provision of this Agreement or the other Financing Documents, (iii) exercise or fail to exercise rights of set-off or other rights, or (iv) accept partial payments or extend from time to time the maturity of all or any part of the Obligations. Section 9.4 Severability. In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action: (a) the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby; (b) the obligation to be fulfilled shall be reduced to the limit of such validity; 95 (c) such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect. Section 9.5 Assignments by Lenders. Any Lender may, with the prior written consent of the Agent and the Borrower, but without notice to or consent of any other Lender, which consent shall not be unreasonably withheld, delayed or conditioned, assign to any Person (each an "Assignee" and collectively, the "Assignees") all or a portion of such Lender's Loans; provided that (a) the amount assigned by such Lender must be at least equal to Five Million Dollars ($5,000,000) and (b) after giving effect to such assignment, such Lender must continue to hold a Pro Rata Share of the Loans at least equal to Five Million Dollars ($5,000,000), unless such Lender has assigned one hundred percent (100%) of such Lender's Loans. GE Capital agrees that if at any time GE Capital sells one hundred percent (100%) of all of its Commitments, GE Capital shall resign as Agent and the remaining Lenders shall select a replacement Agent in accordance with the provisions of this Agreement. Any Lender which elects to make such an assignment shall pay to the Agent, for the exclusive benefit of the Agent, an administrative fee for processing each such assignment in the amount of Three Thousand Five Hundred Dollars ($3,500). Such Lender and its Assignee shall notify the Agent and the Borrower in writing of the date on which the assignment is to be effective (the "Adjustment Date"). On or before the Adjustment Date, the assigning Lender, the Agent, the Borrower and the respective Assignee shall execute and deliver a written assignment agreement in a form acceptable to the Agent, which shall constitute an amendment to this Agreement to the extent necessary to reflect such assignment. Upon the request of any assigning Lender following an assignment made in accordance with this Section 9.5, the Borrower shall issue new Notes to the assigning Lender and its Assignee reflecting such assignment, in exchange for the existing Note held by the assigning Lender. In addition to the foregoing assignments permitted by this Section 9.5, without the prior written consent of the Borrower, but with the consent of the Agent, which consent shall not be unreasonably withheld, delayed or conditioned, any Lender may assign all or any portion of such Lender's Loans (a) to GE Capital or any other Lender at any time regardless of the occurrence or non-occurrence of an Event of Default and (b) to any other Person at any time after the occurrence of an Event of Default; provided that with respect to any such proposed assignment under either (a) or (b) (i) the amount to be assigned by such assigning Lender must be at least equal to Five Million Dollars ($5,000,000), (ii) after giving effect to such assignment, such assigning Lender must continue to hold a Pro Rata Share of the Loans at least equal to Five Million Dollars ($5,000,000), unless such Lender has assigned one hundred percent (100%) of such Lender's Loans, and (iii) prior to closing and consummating the proposed assignment (the "Proposed Assignee"), the Lender shall have first given the Borrower notice of the proposed assignment (the "Right of First Refusal Notice") to permit the Borrower an opportunity to locate another Person acceptable to the Agent (the "Substitute Purchaser") to close and consummate the proposed assignment on the same terms and conditions available to the Proposed Assignee and the Substitute Purchaser shall in fact close and consummate the proposed assignment within thirty (30) days after the Right of First Refusal Notice. If the Borrower fails to locate a Substitute Purchaser or if the Substitute Purchaser fails to close and consummate the proposed assignment within such thirty (30) day period, the assigning Lender shall be entitled to close and 96 consummate the proposed assignment to the Proposed Assignee without further notice or obligation to the Borrower. In addition, notwithstanding the foregoing, any Lender may at any time pledge all or any portion of such Lender's rights under this Agreement, any of the Loans or any of the Obligations to a Federal Reserve Bank. Section 9.6 Participations by Lenders. Any Lender may at any time sell to one or more financial institutions participating interests in any of such Lender's Obligations or Loans; provided, however, that (a) no such participation shall relieve such Lender from its obligations under this Agreement or under any of the other Financing Documents to which it is a party, (b) such Lender shall remain solely responsible for the performance of its obligations under this Agreement and under all of the other Financing Documents to which it is a party, (c) the Borrower, the Agent 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 and the other Financing Documents, and (d) no such participant shall be granted voting rights with respect to any matters reserved for the Lenders under the provisions of this Agreement. Section 9.7 Disclosure of Information by Lenders. (a) In connection with any sale, transfer, assignment or participation by any Lender in accordance with Section 9.5 (Assignments by Lenders) or Section 9.6 (Participations by Lenders), each Lender shall have the right to disclose to any actual or potential purchaser, assignee, transferee or participant all financial records, information, reports, financial statements and documents obtained in connection with this Agreement and/or any of the other Financing Documents or otherwise, provided that such actual or potential purchaser shall agree to keep confidential any non-public information delivered or made available to such Lender. (b) Each of the Lenders and the Agent hereby agree to exercise reasonable efforts to keep any non-public information delivered or made available to it pursuant to this Agreement or any of the Financing Documents, confidential from any other Person except (i) Persons employed or retained by such Lender or Agent who are or are expected to become engaged in evaluating, approving, structuring or administering the Obligations, (ii) with the prior written consent of Borrower, (iii) as required in connection with the exercise of any remedy under this Agreement or any of the Financing Documents or (iv) as may be required by Law, provided that in the event that any Lender, the Agent or any of its or their representatives are requested or compelled (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any of the non-public information delivered or made available to any Lender or the Agent pursuant to this Agreement or any of the Financing Documents, the Lenders, the Agent and its or their representatives, as appropriate, agree to provide Borrower with prompt notice of such request(s). 97 Section 9.8 Successors and Assigns. This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Borrower, the Agent and the Lenders and their respective heirs, personal representatives, successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Agent and the Requisite Lenders. Section 9.9 Continuing Agreements. All covenants, agreements, representations and warranties made by the Borrower in this Agreement, in any of the other Financing Documents, and in any certificate delivered pursuant hereto or thereto shall survive the making by the Lenders of the Loans and the execution and delivery of the Notes, shall be binding upon the Borrower regardless of how long before or after the date hereof any of the Obligations were or are incurred, and shall continue in full force and effect so long as any of the Obligations are outstanding and unpaid. From time to time upon the Agent's request, and as a condition of the release of any one or more of the Security Documents, the Borrower and other Persons obligated with respect to the Obligations shall provide the Agent with such acknowledgments and agreements as the Agent may require to the effect that there exists no defenses, rights of setoff or recoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoever against the Agent, any or all of the Lenders, and/or any of its or their agents and others, or to the extent there are, the same are waived and released. Section 9.10 Enforcement Costs. The Borrower agrees to pay to the Agent on demand all Enforcement Costs (including expenses and fees incurred by any Lender to the extent included in the definition of Enforcement Costs), together with interest thereon from the date following demand until paid in full at a per annum rate of interest equal at all times to the Post-Default Rate. Enforcement Costs shall be immediately due and payable at the time advanced or incurred, whichever is earlier. Without implying any limitation on the foregoing, the Borrower agrees, as part of the Enforcement Costs, to pay upon demand any and all stamp and other Taxes and fees payable or determined to be payable in connection with the execution and delivery of this Agreement and the other Financing Documents and to save the Agent and the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay any Taxes or fees referred to in this Section. The provisions of this Section shall survive the execution and delivery of this Agreement, the repayment of the other Obligations and shall survive the termination of this Agreement. Section 9.11 Applicable Law; Jurisdiction. 9.11.1 Governing Law. As a material inducement to the Agent and the Lenders to enter into this Agreement, the Borrower acknowledges and agrees that the Financing Documents, including, this Agreement, shall be governed by the Laws of the State, as if each of the Financing Documents and this Agreement had each been executed, delivered, administered and performed solely within the State even though for the convenience and at the request of the Borrower one or 98 more of the Financing Documents may be executed elsewhere. The Agent and the Lenders acknowledge, however, that remedies under certain of the Financing Documents that relate to property outside the State may be subject to the laws of the state in which the property is located. 9.11.2 Submission to Jurisdiction. The Borrower irrevocably submits to the jurisdiction of any state or federal court sitting in the State or in the State of New York over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents. The Borrower irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the 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. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Borrower and may be enforced in any court in which the Borrower is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Borrower in one of the manners specified in this Section or as otherwise permitted by applicable Laws. 9.11.3 Appointment of Agent for Service of Process. The Borrower hereby irrevocably designates and appoints CT Corporation System, 300 Lombard Street, Baltimore, Maryland 21202, as its agent to receive on their behalf service of any and all process that may be served in any suit, action or proceeding of the nature referred to in this Section in any state or federal court sitting in the State or in the State of New York. If such agent shall cease so to act, the Borrower shall irrevocably designate and appoint without delay another such agent in either such State satisfactory to the Agent and shall promptly deliver to the Agent evidence in writing of such other agent's acceptance of such appointment and its agreement that such appointment shall be irrevocable. 9.11.4 Service of Process. The Borrower hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by (a) the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Borrower at its address designated in or pursuant to Section 9.1 (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Borrower as its agent for service of process by or pursuant to this Section. The Borrower irrevocably agrees that such service (i) shall be deemed in every respect effective service of process upon each of them in any such suit, action or proceeding, and (ii) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Borrower. Nothing in this Section shall affect the right of the Agent to serve process in any manner otherwise permitted by law or limit the right of the Agent otherwise to bring proceedings against the Borrower in the courts of any jurisdiction or jurisdictions. Section 9.12 Duplicate Originals and Counterparts. This Agreement may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and all taken together shall constitute but one and the same instrument. 99 Section 9.13 Headings. The headings in this Agreement are included herein for convenience only, shall not constitute a part of this Agreement for any other purpose, and shall not be deemed to affect the meaning or construction of any of the provisions hereof. Section 9.14 No Agency. Nothing herein contained shall be construed to constitute the Borrower as the agent of the Agent or any of the Lenders for any purpose whatsoever or to permit the Borrower to pledge any of the credit of the Agent or any of the Lenders. Neither the Agent nor any of the Lenders shall be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof. Neither the Agent nor any of the Lenders shall, by anything herein or in any of the Financing Documents or otherwise, assume any of the Borrower's obligations under any contract or agreement assigned to the Agent and/or the Lenders, and neither the Agent nor any of the Lenders shall be responsible in any way for the performance by the Borrower of any of the terms and conditions thereof. Section 9.15 Waiver of Trial by Jury. THE BORROWER, THE AGENT, THE COLLATERAL AGENT AND THE LENDERS HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER, THE AGENT AND/OR ANY OR ALL OF THE LENDERS MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. This waiver is knowingly, willingly and voluntarily made by the Borrower, the Agent and the Lenders, and the Borrower, the Agent, the Collateral Agent and the Lenders hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect. The Borrower, the Agent, the Collateral Agent and the Lenders further represent that they have been represented in the signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel. Section 9.16 Liability of the Agent and the Lenders. The Borrower hereby agrees that neither the Collateral Agent, the Agent nor any of the Lenders shall be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Collateral Agent, the Agent and/or any of the Lenders in making examinations, investigations or collections, or otherwise in perfecting, maintaining, protecting or realizing upon any lien or security interest or any other interest in the Collateral or other security for the Obligations, except for acts of gross negligence and willful misconduct. 100 By inspecting the Collateral or any other properties of the Borrower or by accepting or approving anything required to be observed, performed or fulfilled by the Borrower or to be given to the Collateral Agent, the Agent and/or any of the Lenders pursuant to this Agreement or any of the other Financing Documents, neither the Collateral Agent, the Agent nor any of the Lenders shall be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Collateral Agent, the Agent and/or the Lenders. Section 9.17 ENTIRE AGREEMENT. THIS AGREEMENT IS INTENDED BY THE COLLATERAL AGENT, THE AGENT, THE LENDERS AND THE BORROWER TO BE A COMPLETE, EXCLUSIVE AND FINAL EXPRESSION OF THE AGREEMENTS CONTAINED HEREIN. NEITHER THE COLLATERAL AGENT, THE AGENT, THE LENDERS NOR THE BORROWER SHALL HEREAFTER HAVE ANY RIGHTS UNDER ANY PRIOR AGREEMENTS PERTAINING TO THE MATTERS ADDRESSED BY THIS AGREEMENT BUT SHALL LOOK SOLELY TO THIS AGREEMENT FOR DEFINITION AND DETERMINATION OF ALL OF THEIR RESPECTIVE RIGHTS, LIABILITIES AND RESPONSIBILITIES UNDER THIS AGREEMENT. 101 IN WITNESS WHEREOF, each of the parties hereto have executed and delivered this Agreement under their respective seals as of the day and year first written above. WITNESS OR ATTEST: BERRY PLASTICS CORPORATION _________________________ By:_______________________(Seal) Name: Title: WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION in its capacity as Agent _________________________ By:_______________________(Seal) Name: Title: WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION in its capacity as a Lender _________________________ By:_______________________(Seal) Name: Title: WITNESS: BANK OF AMERICA, N.A. in its capacity as Collateral Agent _________________________ By:_______________________(Seal) Name: David B. Thayer Title: Senior Vice President LIST OF EXHIBITS A-1. Pro-Forma Financial Statements A-2 Pro-Forma Balance Sheets B Form of Compliance Certificate LIST OF SCHEDULES Schedule 4.1.10 Litigation Schedule 4.1.14 Scheduled Indebtedness for Borrowed Money Schedule 4.1.20 Employee Relations Disclosures Schedule 4.1.21 Hazardous Materials Disclosures Schedule 4.1.22 Scheduled Permitted Liens Schedule 4.1.24 Information on Names, Addresses and Locations Schedule 6.2.5 Permitted Investments TABLE OF CONTENTS ARTICLE I DEFINITIONS 1 Section 1.1 Certain Defined Terms 1 Section 1.2 Accounting Terms and Other Definitional Provisions 29 ARTICLE II THE CREDIT FACILITIES 30 Section 2.1 The Term Loan Facility 30 2.1.1 Term Loan Commitments 30 2.1.2 Payment of Term Loans; the Term Loan Notes 30 2.1.3 Mandatory Prepayments of Term Loans 30 2.1.4 Optional Prepayments of Term Loans 32 Section 2.2 Interest 33 2.2.1 Applicable Interest Rates 33 2.2.2 Selection of Interest Rates 33 2.2.3 Inability to Determine LIBOR Base Rate 35 2.2.4 Indemnity 35 2.2.5 Payment of Interest 36 Section 2.3 General Financing Provisions 36 2.3.1 Borrower's Representatives 36 2.3.2 Use of Proceeds of the Loans 37 2.3.3 Commitment Fee 37 2.3.4 Closing Fee 37 2.3.5 Computation of Interest 37 2.3.6 Payments 37 2.3.7 Liens; Setoff 38 2.3.8 Requirements of Law 38 Section 2.4 Settlement Among Lenders 39 Section 2.5 Presumption of Payment 39 ARTICLE III THE COLLATERAL 39 Section 3.1 Debt and Obligations Secured 39 Section 3.2 Grant of Liens 40 Section 3.3 Personal Property 41 3.3.1 Securities, Chattel Paper, Promissory Notes, etc 41 3.3.2 Patents, Copyrights and Other Property Requiring Additional Steps to Perfect 42 Section 3.4 Record Searches 42 Section 3.5 Real Property 43 Section 3.6 Subsidiary Guarantor Assets 44 Section 3.7 Costs 44 Section 3.8 Release 45 Section 3.9 Inconsistent Provisions 45 Section 3.10 Collateral Agency 45 ARTICLE IV REPRESENTATIONS AND WARRANTIES 45 Section 4.1 Representations and Warranties 45 4.1.1 Subsidiaries 45 4.1.2 Good Standing 46 4.1.3 Power and Authority 46 4.1.4 Binding Agreements 46 4.1.5 No Conflicts 46 4.1.6 No Defaults, Violations. As of the date of this Agreement: 47 4.1.7 Compliance with Laws 47 4.1.8 Margin Stock 47 4.1.9 Investment Company Act; Margin Securities 47 4.1.10 Litigation 48 4.1.11 Financial Condition 48 4.1.12 Pro-forma Financial Statements 48 4.1.13 Full Disclosure 49 4.1.14 Indebtedness for Borrowed Money 49 4.1.15 Subordinated Debt; Senior Secured Debt; BofA Financing Agreement. 49 4.1.16 Taxes 49 4.1.17 ERISA 50 4.1.18 Title to Properties 50 4.1.19 Patents, Trademarks, Etc 50 4.1.20 Employee Relations 50 4.1.21 Presence of Hazardous Materials or Hazardous Materials Contamination 51 4.1.22 Perfection and Priority of Collateral 51 4.1.23 Places of Business and Location of Collateral 51 4.1.24 Business Names and Addresses 52 4.1.25 Equipment 52 4.1.26 Italian Target Stock Purchase Transaction 52 4.1.27 Hart-Scott-Rodino 52 4.1.28 Term Loans 52 Section 4.2 Survival 53 ARTICLE V CONDITIONS PRECEDENT 53 Section 5.1 Conditions to the Making of the Loans 53 5.1.1 Organizational Documents - Borrower 53 5.1.2 Opinion of Counsel 54 5.1.3 Organizational Documents - Guarantors 54 5.1.4 Consents, Licenses, Approvals, Etc 54 5.1.5 Notes 54 5.1.6 Financing Documents 54 5.1.7 Other Financing Documents 55 5.1.8 Other Documents, Etc 55 5.1.9 Payment of Fees 55 5.1.10 Recordings and Filings 55 5.1.11 Pro-forma Balance Sheet and Projections 55 5.1.12 Stock Certificates and Stock Powers 55 ARTICLE VI COVENANTS OF THE BORROWER 56 Section 6.1 Affirmative Covenants 56 6.1.1 Financial Statements 56 6.1.2 Reports to SEC and to Stockholders 58 6.1.3 Recordkeeping, Rights of Inspection, Field Examination, Etc 58 6.1.4 Corporate Existence 59 6.1.5 Compliance with Laws 59 6.1.6 Preservation of Properties 59 6.1.7 Line of Business 60 6.1.8 Insurance 60 6.1.9 Taxes 60 6.1.10 ERISA 60 6.1.11 Notification of Events of Default and Adverse Developments 61 6.1.12 Hazardous Materials; Contamination 61 6.1.13 Financial Covenants 62 6.1.14 Insurance With Respect to Equipment and Inventory 64 6.1.15 Maintenance of the Collateral 64 6.1.16 Defense of Title and Further Assurances 64 6.1.17 Business Names; Locations 65 6.1.18 Subsequent Opinion of Counsel as to Recording Requirements 66 6.1.19 Use of Premises and Equipment 66 6.1.20 Protection of Collateral 66 6.1.21 Application of Net Casualty Proceeds 66 Section 6.2 Negative Covenants 67 6.2.1 Capital Structure, Merger, Acquisition or Sale of Assets 67 6.2.2 Subsidiaries 68 6.2.3 Purchase or Redemption of Securities, Dividend Restrictions 69 6.2.4 Indebtedness 69 6.2.5 Investments, Loans and Other Transactions 71 6.2.6 Capital Expenditures 73 6.2.7 Stock of Subsidiaries 73 6.2.8 Subordinated Indebtedness 73 6.2.9 Liens 74 6.2.10 Transactions with Affiliates 74 6.2.11 ERISA Compliance 75 6.2.12 Prohibition on Hazardous Materials 75 6.2.13 Amendments 75 6.2.14 Method of Accounting; Fiscal Year 75 6.2.15 Transfer of Collateral 75 6.2.16 Sale and Leaseback 76 ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES 76 Section 7.1 Events of Default 76 7.1.1 Failure to Pay 76 7.1.2 Breach of Representations and Warranties 77 7.1.3 Failure to Comply with Certain Covenants 77 7.1.4 Failure to Comply with Other Covenants 77 7.1.5 Default Under Other Financing Documents or Obligations 77 7.1.6 Receiver; Bankruptcy 77 7.1.7 Involuntary Bankruptcy, etc 78 7.1.8 Judgment 78 7.1.9 Execution; Attachment 78 7.1.10 Default Under Other Borrowings 79 7.1.11 Challenge to Agreements 79 7.1.12 Material Adverse Change 79 7.1.13 Change in Ownership 79 7.1.14 Liquidation, Termination, Dissolution, Change in Management, etc. 79 7.1.15 Parent Line of Business 80 7.1.16 Failure to Pay Senior Secured Debt - Parent 80 Section 7.2 Remedies 80 7.2.1 Acceleration 80 7.2.2 Uniform Commercial Code 80 7.2.3 Specific Rights With Regard to Collateral 81 7.2.4 Application of Proceeds 82 7.2.5 Performance by Collateral Agent 82 7.2.6 Other Remedies 83 ARTICLE VIII THE AGENT 83 Section 8.1 Appointment 83 Section 8.2 Nature of Duties 84 8.2.1 In General 84 8.2.2 Express Authorization 84 Section 8.3 Rights, Exculpation, Etc 85 Section 8.4 Reliance 86 Section 8.5 Indemnification 86 Section 8.6 GE Capital Individually 86 Section 8.7 Successor Agent 87 8.7.1 Resignation 87 8.7.2 Appointment of Successor 87 8.7.3 Successor Agent 87 Section 8.8 Collateral Matters 88 8.8.1 Release of Collateral 88 8.8.2 Confirmation of Authority, Execution of Releases 89 8.8.3 Absence of Duty 90 Section 8.9 Agency for Perfection; Appointment and Replacement of Collateral Agent. 90 Section 8.10 Exercise of Remedies 90 Section 8.11 Consents 90 Section 8.12 Circumstances Where Consent of all of the Lenders is Required 91 Section 8.13 Dissemination of Information 92 Section 8.14 Consents, Amendments and Waivers on or before BofA Termination Date 92 ARTICLE IX MISCELLANEOUS 92 Section 9.1 Notices 92 Section 9.2 Amendments; Waivers 94 Section 9.3 Cumulative Remedies 95 Section 9.4 Severability 95 Section 9.5 Assignments by Lenders 96 Section 9.6 Participations by Lenders 97 Section 9.7 Disclosure of Information by Lenders 97 Section 9.8 Successors and Assigns 98 Section 9.9 Continuing Agreements 98 Section 9.10 Enforcement Costs 98 Section 9.11 Applicable Law; Jurisdiction 98 9.11.1 Governing Law 98 9.11.2 Submission to Jurisdiction 99 9.11.3 Appointment of Agent for Service of Process 99 9.11.4 Service of Process 99 Section 9.12 Duplicate Originals and Counterparts 99 Section 9.13 Headings 100 Section 9.14 No Agency 100 Section 9.15 Waiver of Trial by Jury 100 Section 9.16 Liability of the Agent and the Lenders 100 Section 9.17 ENTIRE AGREEMENT 101 EX-21 15 a2042389zex-21.txt EXHIBIT 21 EXHIBIT 21 State of Name of Subsidiary Incorporation - --------------------------------------------------------------------------- Berry Iowa Corporation Delaware PackerWare Corporation Delaware Knight Plastics, Inc. Delaware Berry Sterling Corporation Delaware Berry Plastics Design Corporation Delaware Poly-Seal Corporation Delaware Berry Plastics Acquisition Corporation II Delaware Venture Packaging, Inc. Delaware Venture Packaging Midwest, Inc. Delaware Berry Plastics Technical Services, Inc. Delaware NIM Holdings Limited England and Wales Berry Plastics U.K. Limited England and Wales Norwich Acquisition Limited England and Wales CPI Holding Corporation Delaware Cardinal Packaging, Inc. Ohio AeroCon, Inc. Delaware Berry Tri-Plas Corporation Delaware Berry Plastics Acquisition Corporation III Delaware CBP Holdings S.r.l. Italy Capsol S.p.a. Italy Ociesse S.r.l. Italy -----END PRIVACY-ENHANCED MESSAGE-----