-----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, PP3Bbary/KY0efnt8n1UYXlFfExuWMbbQzEQgz2ztO5z0ZgTsGBet5C+G4JoC7og UwfWXOPBqQ/jn0BbDUiBRg== 0000919463-98-000022.txt : 19990101 0000919463-98-000022.hdr.sgml : 19990101 ACCESSION NUMBER: 0000919463-98-000022 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 35 FILED AS OF DATE: 19981231 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: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599 FILM NUMBER: 98779050 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: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-06 FILM NUMBER: 98779051 BUSINESS ADDRESS: STREET 1: 101 OAKLEY ST STREET 2: P O BOX 959 CITY: EVANSVILLE STATE: IN ZIP: 47710 BUSINESS PHONE: 8124242904 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERRY IOWA CORP CENTRAL INDEX KEY: 0000919467 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 421382173 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-12 FILM NUMBER: 98779052 BUSINESS ADDRESS: STREET 1: 101 OAKLEY ST STREET 2: PO BOX 959 CITY: EVANSVILLE STATE: IN ZIP: 47706-0959 BUSINESS PHONE: 8124242904 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERRY TRI PLAS CORP CENTRAL INDEX KEY: 0001011391 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 561949250 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-01 FILM NUMBER: 98779053 BUSINESS ADDRESS: STREET 1: 101 OAKLEY ST CITY: EVANSVILLE STATE: IN ZIP: 47710 MAIL ADDRESS: STREET 1: PO BOX 959 CITY: EVANSVILLE STATE: IN ZIP: 47706-0959 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERRY STERLING CORP CENTRAL INDEX KEY: 0001075619 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 541749681 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-11 FILM NUMBER: 98779054 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: PACKERWARE CORP CENTRAL INDEX KEY: 0001075620 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 480759852 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-05 FILM NUMBER: 98779055 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: BERRY PLASTICS DESIGN CORP CENTRAL INDEX KEY: 0001075621 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 621689708 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-07 FILM NUMBER: 98779056 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: VENTURE PACKAGING INC CENTRAL INDEX KEY: 0001075622 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 510368479 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-08 FILM NUMBER: 98779057 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: VENTURE PACKAGING MIDWEST INC CENTRAL INDEX KEY: 0001075623 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-09 FILM NUMBER: 98779058 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: VENTURE PACKAGING SOUTHEAST INC CENTRAL INDEX KEY: 0001075624 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-03 FILM NUMBER: 98779059 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: NIM HOLDINGS LTD CENTRAL INDEX KEY: 0001075625 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-04 FILM NUMBER: 98779060 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: KNIGHT PLASTICS INC CENTRAL INDEX KEY: 0001075626 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 352056610 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-13 FILM NUMBER: 98779061 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: AEROCON INC /DE/ CENTRAL INDEX KEY: 0001075629 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 351948748 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-10 FILM NUMBER: 98779062 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: NORWICH INJECTION MOULDERS LTD CENTRAL INDEX KEY: 0001075630 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 351948748 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-64599-02 FILM NUMBER: 98779063 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 S-4/A 1 As filed with the Securities and Exchange Commission on December 29, 1998 Registration No. 333-64599
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________ AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___________________ BERRY PLASTICS CORPORATION (Exact name of registrant as specified in charter) Delaware 3089 35-1813706 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) BPC HOLDING CORPORATION (Exact name of registrant as specified in charter) Delaware 3089 35-1814673 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) BERRY IOWA CORPORATION (Exact name of registrant as specified in charter) Delaware 3089 42-1382173 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) BERRY TRI-PLAS CORPORATION (Exact name of registrant as specified in charter) Delaware 3089 56-1949250 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) BERRY STERLING CORPORATION (Exact name of registrant as specified in charter) Delaware 3089 54-1749681 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) AEROCON, INC. (Exact name of registrant as specified in charter) Delaware 3089 35-1948748 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number)
PACKERWARE CORPORATION (Exact name of registrant as specified in charter) Kansas 3089 48-0759852 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) BERRY PLASTICS DESIGN CORPORATION (Exact name of registrant as specified in charter) Delaware 3089 62-1689708 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) VENTURE PACKAGING, INC. (Exact name of registrant as specified in charter) Delaware 3089 51-0368479 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) VENTURE PACKAGING MIDWEST, INC. (Exact name of registrant as specified in charter) Ohio 3089 34-1809003 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) VENTURE PACKAGING SOUTHEAST, INC. (Exact name of registrant as specified in charter) South Carolina 3089 57-1029638 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) NIM HOLDINGS LIMITED (Exact name of registrant as specified in charter) England and Wales 3089 N/A (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) NORWICH INJECTION MOULDERS LIMITED (Exact name of registrant as specified in charter) England and Wales 3089 N/A (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) KNIGHT PLASTICS, INC. (Exact name of registrant as specified in charter) Delaware 3089 35-2056610 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) ___________________
101 Oakley Street Evansville, Indiana 47710 (812) 424-2904 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) ___________________ Martin R. Imbler President and Chief Executive Officer Berry Plastics Corporation 101 Oakley Street Evansville, Indiana 47710 (812) 424-2904 (Name, address, including zip code, and telephone number, including area code, of agent for service of process) ___________________ WITH COPIES TO: Julie M. Allen, Esq. O'Sullivan Graev & Karabell, LLP 30 Rockefeller Plaza New York, New York 10112 (212) 408-2400 ___________________ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE. If any of the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. __________________ If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. _____________________ ___________________ THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
PROSPECTUS BERRY PLASTICS CORPORATION OFFER TO EXCHANGE UP TO $25,000,000 OF ITS 12{1}/{4}% SERIES C SENIOR SUBORDINATED NOTES DUE 2004 FOR ANY AND ALL OUTSTANDING 12{1}/{4}% SERIES B SENIOR SUBORDINATED NOTES DUE 2004 Berry Plastics Corporation, a Delaware corporation ("Berry", the "Company" or the "Issuer") and wholly owned subsidiary of BPC Holding Corporation, a Delaware corporation ("Holding"), hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Letter of Transmittal (which together constitute the "Exchange Offer") to exchange $1,000 principal amount of 12{1}/{4}% Series C Senior Subordinated Notes due 2004 (the "New Notes") of the Issuer for each $1,000 principal amount of the issued and outstanding 12{1}/{4}% Series B Senior Subordinated Notes due 2004 (the "Old Notes", and the Old Notes and the New Notes, collectively, the "Notes") of the Issuer from the Holders (as defined herein) thereof. As of the date of this Prospectus, there is $25,000,000 aggregate principal amount of the Old Notes outstanding. The terms of the New Notes are identical in all material respects to the Old Notes, except that the New Notes have been registered under the Securities Act of 1933, as amended (the "Securities Act"), and therefore will not bear legends restricting their transfer and will not contain certain provisions providing for the payment of liquidated damages to the holders of the Old Notes under certain circumstances relating to the Registration Rights Agreement (as defined herein), which provisions will terminate as to all of the Notes upon the consummation of the Exchange Offer. Interest on the New Notes will accrue from October 15, 1998 and will be payable in cash semi-annually in arrears on October 15 and April 15 of each year, commencing April 15, 1999. Interest will be payable on the Old Notes accepted for exchange to, but not including, October 15, 1998. The New Notes will be unconditionally guaranteed (the "Note Guarantees") on a senior subordinated basis by Holding, Berry Iowa Corporation, a Delaware corporation and wholly owned subsidiary of the Company ("Berry Iowa"), Berry Tri-Plas Corporation, a Delaware corporation and wholly owned subsidiary of the Company ("Berry Tri-Plas"), Berry Sterling Corporation, a Delaware corporation and wholly owned subsidiary of the Company ("Berry Sterling"), AeroCon, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("AeroCon"), PackerWare Corporation, a Kansas corporation and wholly owned subsidiary of the Company ("PackerWare"), Berry Plastics Design Corporation, a Delaware corporation and wholly owned subsidiary of the Company ("Berry Design"), Venture Packaging, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("Venture Holdings"), Venture Packaging Midwest, Inc., an Ohio corporation and wholly owned subsidiary of Venture Holdings ("Venture Midwest"), Venture Packaging Southeast, Inc., a South Carolina corporation and wholly owned subsidiary of Venture Holdings ("Venture Southeast"), NIM Holdings Limited, a company organized under the laws of England and Wales and wholly owned subsidiary of the Company ("NIM Holdings"), Norwich Injection Moulders Limited, a company organized under the laws of England and Wales and wholly owned subsidiary of NIM Holdings ("Norwich"), Knight Plastics, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("Knight Plastics" and, collectively with Holding, Berry Iowa, Berry Tri-Plas, Berry Sterling, AeroCon, PackerWare, Berry Design, Venture Holdings, Venture Midwest, Venture Southeast, NIM Holdings and Norwich, the "Guarantors"). The New Notes will mature on April 15, 2004. On or after April 15, 1999, the New Notes will be redeemable at any time at the option of the Company, in whole or in part, at the redemption prices set forth herein, plus accrued and unpaid interest, if any, to the date of redemption. In addition, in the event of a Change of Control (as defined herein), each holder of New Notes may require the Company to repurchase such holder's New Notes, in whole or in part, at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. For a definition of the term "Change of Control," see "Description of New Notes - Repurchase at the Option of Holders - Change of Control." The New Notes will be unsecured senior subordinated obligations of the Company, ranking PARI PASSU with the $100 million of the Company's 12{1}/{4}% Senior Subordinated Notes due 2004 (the "1994 Notes"), and will be subordinate in right of payment to all Senior Indebtedness (as defined herein) of the Company, which includes borrowings under the Credit Facility (as defined herein) and the Nevada Bonds (as defined herein). The New Notes will be senior to any indebtedness which by its terms is subordinate to the New Notes, regardless of when such indebtedness is incurred. The Note Guarantees will be unconditional joint and several unsecured senior subordinated obligations of the Guarantors and will be subordinate in right of payment to all Senior Indebtedness of the Guarantors, including their guarantees of the Company's indebtedness under the Credit Facility. As of September 26, 1998, the aggregate amount of outstanding Senior Indebtedness of the Company was $76.8 million, the aggregate amount of outstanding total indebtedness of the Company was $203.4 million, including the 1994 Notes, and the indebtedness of the Guarantors senior to the Note Guarantees would have been $307.7 million. As of September 26, 1998, all indebtedness of the Company other than the Senior Indebtedness was PARI PASSU in right of payment to the Notes, and there was no indebtedness subordinated to the Notes. The Indenture (as defined herein) will permit the Company and its subsidiaries to incur additional indebtedness, including Senior Indebtedness, subject to certain limitations. The Indenture also provides that the Company and the Guarantors will not incur any additional indebtedness that is both subordinate in right of payment to any Senior Indebtedness and senior in right of payment to the Notes or the Note Guarantees, as the case may be. See "Description of Notes." Holding is a holding company and is entirely dependent on the declaration by the Company of dividends to pay its obligations, including its obligations on its Note Guarantee. Under the terms of the Credit Facility, the Company is severely restricted from declaring dividends to Holding. In addition, the indenture (the "1996 Indenture") governing the 1996 Notes (as defined herein) of Holding restricts the ability of Holding to make certain payments, including payments under its Note Guarantee. See "Risk Factors - Limited Ability of Holding to Perform Under Note Guarantee." CONTINUED ON NEXT PAGE. ___________________ SEE "RISK FACTORS" COMMENCING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS PRIOR TO TENDERING OLD NOTES IN THE EXCHANGE OFFER. ___________________ THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS , 1999 The Old Notes were not registered under the Securities Act in reliance upon an exemption from the registration requirements thereof. In general, the Old Notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act. The New Notes are being offered hereby in order to satisfy certain obligations of the Issuer and the Guarantors contained in the Registration Rights Agreement. Based on interpretations by the staff of the Securities and Exchange Commission (the "Commission" or "SEC") set forth in no- action letters issued to third parties, the Issuer believes that the New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold or otherwise transferred by any holder thereof (other than any such holder that is an "affiliate" of the Issuer within the meaning of Rule 405 promulgated under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holder's business, such holder has no arrangement with any person to participate in the distribution of such New Notes and neither such holder nor any such other person is engaging in or intends to engage in a distribution of such New Notes. Notwithstanding the foregoing, each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker- dealer in connection with any resale of New Notes received in exchange for such Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities (other than Old Notes acquired directly from the Issuer). The Issuer and the Guarantors have agreed that, for a period of one year after the date of this Prospectus, they will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." The Old Notes are designated for trading in the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") market. There is no established trading market for the New Notes. The Issuer does not currently intend to list the New Notes on any securities exchange or to seek approval for quotation through any automated quotations system. Accordingly, there can be no assurance as to the development or liquidity of any market for the New Notes. The Issuer will not receive any proceeds from the Exchange Offer. The Issuer will pay all of the expenses incident to the Exchange Offer. Tenders of Old Notes pursuant to the Exchange Offer may be withdrawn as provided herein at any time prior to the Expiration Date (as defined herein). The Exchange Offer is subject to certain customary conditions. This Prospectus has been prepared for use in connection with the Exchange Offer and may be used by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") in connection with offers and sales related to market-making transactions in the Notes. DLJ may act as principal or agent in such transactions. Such sales will be made at prices related to prevailing market prices at the time of sale. See "Plan of Distribution." DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS THIS PROSPECTUS CONTAINS STATEMENTS THAT CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). THOSE STATEMENTS APPEAR IN A NUMBER OF PLACES IN THIS PROSPECTUS AND INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE COMPANY, PRIMARILY WITH RESPECT TO THE FUTURE OPERATING PERFORMANCE OF THE COMPANY. WITHOUT LIMITING THE FOREGOING, THE WORDS "BELIEVES," "ANTICIPATES," "PLANS," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. HOLDERS OF THE NOTES ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND MAY INVOLVE RISKS AND UNCERTAINTIES, AND THAT 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 PROSPECTUS, INCLUDING, WITHOUT LIMITATION, THE INFORMATION SET FORTH UNDER "RISK FACTORS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," IDENTIFIES IMPORTANT FACTORS THAT COULD CAUSE SUCH 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. AVAILABLE INFORMATION The Issuer has filed with the Commission a Registration Statement on Form S-4 (together with all amendments, exhibits, schedules and supplements thereto, the "Registration Statement") under the Securities Act with respect to the New Notes being offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement, certain portions of which have been omitted pursuant to the rules and regulations promulgated by the Commission. Statements made in this Prospectus as to the contents of any contract, agreement or other document are not necessarily complete. With respect to each such contract, agreement or other document filed or incorporated by reference as an exhibit to the Registration Statement, reference is made to such exhibit for a more complete description of the matter involved, and each such statement is qualified in its entirety by such reference. The Registration Statement may be inspected by anyone without charge at the Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such material may also be obtained at the Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of prescribed fees. Such materials can also be inspected on the Internet at http://www.sec.gov. The Company and Holding are subject to the informational reporting requirements of the Exchange Act. In accordance therewith, the Company and Holding file reports and other information with the Commission. Such materials filed by the Company and Holding with the Commission may be inspected, and copies thereof obtained, at the places, and in the manner, set forth above. In the event that the Issuer ceases to be subject to the informational reporting requirements of the Exchange Act, the Issuer has agreed that, so long as the Notes remain outstanding, it will file with the Commission and distribute to holders of the Notes copies of (i) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Issuer were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to annual information only, a report thereon by the Issuer's independent auditors and (ii) all reports that would be required to be filed with the Commission on Form 8-K if the Issuer were required to file such reports. The Issuer will also make such reports available to prospective purchasers of the Notes, securities analysts and broker-dealers upon their request. In addition, the Issuer has agreed that for so long as any of the Old Notes remain outstanding it will make available to any prospective purchaser of the Old Notes or beneficial owner of the Old Notes in connection with any sale thereof the information required by Rule 144A(d)(4) under the Securities Act, until such time as the Issuer has either exchanged the Old Notes for New Notes or until such time as the holders thereof have disposed of such Old Notes pursuant to an effective registration statement filed by the Issuer. SUMMARY OF PROSPECTUS THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE REQUIRES, THE TERMS "BERRY," THE "COMPANY" AND THE "ISSUER" REFER TO BERRY PLASTICS CORPORATION, ITS SUBSIDIARIES AND THEIR RESPECTIVE OPERATIONS, AND THE TERM "HOLDING" REFERS TO BPC HOLDING CORPORATION. THE FISCAL YEAR OF HOLDING AND THE COMPANY IS THE 52 OR 53 WEEK PERIOD ENDING ON THE SATURDAY CLOSEST TO DECEMBER 31. ALL REFERENCES IN THIS PROSPECTUS TO "FISCAL 1993," "FISCAL 1994," "FISCAL 1995," "FISCAL 1996" AND "FISCAL 1997" REFER TO THE FISCAL YEARS OF THE COMPANY ENDED ON JANUARY 1, 1994, DECEMBER 31, 1994, DECEMBER 30, 1995, DECEMBER 28, 1996 AND DECEMBER 27, 1997, RESPECTIVELY. THE COMPANY The Company is a leading domestic manufacturer and marketer of plastic packaging products focused on four key markets: the aerosol overcap, rigid open-top container, drink cup and houseware markets. Within each of its markets, the Company concentrates on manufacturing 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 believes that it is the largest supplier of aerosol overcaps in the United States, with sales of over 1.4 billion overcaps in 1997. Berry also believes that it is the largest domestic supplier of thinwall, child-resistant and pry-off open top containers. Berry has utilized its national sales force and existing molding and printing capacity at multiple-plant locations to become a leader in the plastic drink cup market, which includes the Company's 32 ounce and 44 ounce drive-through ("DT") cups, which fit in standard vehicle cup holders. The Company entered the housewares market (which includes the lawn and garden market) for semi- disposable plastic products, sold primarily to national retail marketers, as a result of the acquisition of PackerWare in January 1997. From fiscal 1993 to fiscal 1997, on a pro forma basis, the Company's net sales increased from $87.8 million to $270.6 million, representing a compound annual growth rate ("CAGR") of 32%. The Company supplies aerosol overcaps for a wide variety of commercial and consumer products. Similarly, the Company's containers are used for packaging a broad spectrum of commercial and consumer products. The Company's plastic drink cups are sold primarily to fast food restaurants, convenience stores, stadiums, table top restaurants and retail. The Company also sells houseware products, primarily seasonal, semi-disposable housewares and lawn and garden items, to major retail marketers. Berry's customer base is comprised of over 4,000 customers with operations in a widely diversified range of markets. The Company's top ten customers accounted for approximately 19% of the Company's fiscal 1997 net sales, and no customer accounted for more than 4% of the Company's net sales in fiscal 1997. The historical allocation of the Company's total net sales among its product categories is as follows:
FISCAL Thirty-Nine Weeks Ended 1995 1996 1997 September 26, 1998 Aerosol overcaps 31% 33% 21% 17% Rigid open-top containers 51 53 49 54 Drink cups 12 9 17 15 Housewares -- -- 8 9 Other 6 5 5 5
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 market, an in-house graphic arts department and sophisticated printing and decorating capabilities permit the Company to offer extensive value-added decorating options. The Company's drink cup product line is strengthened by both the larger market share and diversification provided through its acquisition of PackerWare. Berry entered the housewares business with its acquisition of PackerWare, which has a reputation for outstanding quality and service among major retail marketers and for products which offer high value at a reasonable price to consumers. 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 which 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. The Company's address is 101 Oakley Street, Evansville, Indiana 47710. The Company's telephone number is (812) 424-2904. RECENT ACQUISITIONS THE KNIGHT ACQUISITION On October 16, 1998, Knight Plastics, Inc. ("Knight"), a newly formed wholly owned subsidiary of the Company, acquired substantially all of the assets of the Knight Engineering and Plastics Division of Courtaulds Packaging Inc. (the "Knight Acquisition") for aggregate consideration of approximately $18 million. Knight, a manufacturer of aerosol overcaps and closures, had fiscal 1997 net sales of approximately $24 million. Management believes that the Knight Acquisition will enhance the Company's overcap and closure business and better position the Company to meet the needs of its domestic and multi-national customers. THE NORWICH ACQUISITION On July 2, 1998, 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 "Norwich Acquisition"), for aggregate consideration of approximately 8.5 million (approximately $14 million). Norwich Moulders, a manufacturer and marketer of injection-molded overcaps and closures for the European market, had fiscal 1997 net sales of approximately 8.1 million (approximately $13 million). Management believes that the Norwich Acquisition will provide the Company with a production platform that will allow it to better serve its global customers and to introduce its product lines in Europe. THE VENTURE PACKAGING ACQUISITION On August 29, 1997, the Company acquired Venture Packaging, Inc. of Monroeville, Ohio ("Venture Packaging") for aggregate consideration of approximately $43.7 million which included cash, the payment or assumption of indebtedness, and $5.0 million of preferred stock of Holding and warrants to purchase stock of Holding (the "Venture Packaging Acquisition"). Venture Packaging, a manufacturer and marketer of injection-molded containers used in the food, dairy and various other markets, had fiscal 1996 net sales of approximately $42 million. Management believes that the Venture Packaging Acquisition has strategically assisted the Company in marketing its product line of open-top containers and lids. Venture Packaging is a leading supplier to the food service industry. The Monroeville, Ohio facility is strategically located to service the large northeastern U.S. market, and Venture Packaging has an excellent reputation for outstanding service. Management believes that continued sales to Venture Packaging's customers has enhanced the Company's position in the container market. As part of the Venture Packaging Acquisition, the Company acquired the Anderson, South Carolina operations of Venture Packaging. The Company phased down the operations of this facility in 1998. The majority of this business has been relocated to the Company's existing Charlotte, North Carolina facility. The remaining business has been relocated to the Company's existing Evansville, Indiana and Monroeville, Ohio facilities. THE VIRGINIA DESIGN ACQUISITION On May 13, 1997, Berry Design, a newly formed wholly owned subsidiary of the Company, acquired substantially all the assets of Virginia Design Packaging Corp. ("Virginia Design") of Suffolk, Virginia (the "Virginia Design Acquisition"). Virginia Design, a manufacturer and marketer of injection- molded containers used primarily for food packaging, had fiscal 1996 net sales of approximately $15 million. Management believes that the acquisition of these assets has enhanced the Company's position in the food packaging and food service markets. THE PACKERWARE ACQUISITION On January 21, 1997, the Company acquired PackerWare Corporation, a Kansas corporation, for aggregate consideration of approximately $28.1 million (including the payment of outstanding debt of PackerWare) by way of a merger of PackerWare with and into a newly formed, wholly owned subsidiary of the Company (the "PackerWare Acquisition"). PackerWare, a manufacturer and marketer of plastic containers, drink cups, housewares and lawn and garden products, had fiscal 1996 net sales of approximately $43 million. 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. PackerWare's reputation among its major customers for outstanding quality and service is consistent with the customer-oriented goals of Berry. PackerWare's houseware product line is primarily in the seasonal semi-disposable plastic segment of the market, with other products in the complementary lawn and garden segment. Customers for this product line are primarily large retail marketers with national chains. The PackerWare Acquisition provided the Company with a plant located in Lawrence, Kansas, that is well-situated to service its markets. In addition, the PackerWare Acquisition provided additional product line breadth and market presence to Berry's existing open-top container product line. THE CONTAINER INDUSTRIES ACQUISITION On January 17, 1997, the Company acquired certain assets of Container Industries, Inc. ("Container Industries") of Pacoima, California (the "Container Industries Acquisition") . Container Industries, a manufacturer and marketer of injection molded industrial and pry-off containers for building products and other industrial markets, had fiscal 1996 net sales of approximately $4 million. Berry did not acquire Container Industries' manufacturing facility located in Pacoima, and Berry transferred production to its Henderson, Nevada plant. Management believes the Container Industries Acquisition has provided additional market presence on the west coast, primarily in the pry-off container product line. THE EXCHANGE OFFER
REGISTRATION RIGHTS AGREEMENT The Old Notes were sold by the Company on August 24, 1998 to Donaldson, Lufkin & Jenrette Securities Corporation (the "Initial Purchaser"), who placed the Old Notes with institutional investors. In connection therewith, the Company, the Guarantors and the Initial Purchaser executed and delivered for the benefit of the holders of the Old Notes a registration rights agreement (the "Registration Rights Agreement") providing, among other things, for the Exchange Offer. THE EXCHANGE OFFER New Notes are being offered in exchange for a like principal amount of Old Notes. As of the date hereof, $25,000,000 aggregate principal amount of Old Notes are outstanding. The Company will issue the New Notes to Holders promptly following the Expiration Date. See "Risk Factors - Consequences of Failure to Exchange." EXPIRATION DATE 5:00 p.m., New York City time, on February __, 1999, unless the Exchange Offer is extended as provided herein, in which case the term "Expiration Date" means the latest date and time to which the Exchange Offer is extended. INTEREST Each New Note will bear interest from October 15, 1998. Interest will be payable on the Old Notes accepted for exchange to, but not including, October 15, 1998. Conditions to the Exchange Offer The Exchange Offer is subject to certain customary conditions, which may be waived by the Company. The Company reserves the right to amend, terminate or extend the Exchange Offer at any time prior to the Expiration Date upon the occurrence of any such condition. See "The Exchange Offer - Conditions." PROCEDURES FOR TENDERING OLD NOTES Each Holder of Old Notes wishing to accept the Exchange Offer must complete, sign and date the Letter of Transmittal, or a facsimile thereof, in accordance with the instructions contained herein and therein, and mail or otherwise deliver such Letter of Transmittal, or such facsimile, or an Agent's Message (as defined herein) together with the Old Notes and any other required documentation to the exchange agent (the "Exchange Agent") at the address set forth herein. By executing the Letter of Transmittal or delivering an Agent's Message, each Holder will represent to the Company, among other things, that (i) the New Notes acquired pursuant to the Exchange Offer by the Holder and any beneficial owners of Old Notes are being obtained in the ordinary course of business of the person receiving such New Notes, (ii) neither the Holder nor such beneficial owner has an arrangement with any person to participate in the distribution of such New Notes, (iii) neither the Holder nor such beneficial owner nor any such other person is engaging in or intends to engage in a distribution of such New Notes and (iv) neither the Holder nor such beneficial owner is an "affiliate," as defined under Rule 405 promulgated under the Securities Act, of the Company. Each broker-dealer that receives New Notes for its own account in exchange for Old Notes, where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities (other than Old Notes acquired directly from the Company), may participate in the Exchange Offer but may be deemed an "underwriter" under the Securities Act and, therefore, must acknowledge in the Letter of Transmittal that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. See "The Exchange Offer - Procedures for Tendering" and "Plan of Distribution." SPECIAL PROCEDURES FOR BENEFICIAL OWNERS Any beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such beneficial owner's own behalf, such beneficial owner must, prior to completing and executing the Letter of Transmittal or delivering an Agent's Message and delivering his Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such beneficial owner's name or obtain a properly completed bond power from the registered Holder. The transfer of registered ownership may take considerable time. See "The Exchange Offer - Procedures for Tendering." Guaranteed Delivery Procedures Holders of Old Notes who wish to tender their Old Notes and whose Old Notes are not immediately available or who cannot deliver their Old Notes, the Letter of Transmittal or an Agent's Message or any other documents required by the Letter of Transmittal to the Exchange Agent prior to the Expiration Date must tender their Old Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer - Guaranteed Delivery Procedures." Withdrawal Rights Tenders may be withdrawn as provided herein at any time prior to 5:00 p.m., New York City time, on the Expiration Date. See "The Exchange Offer - Withdrawal of Tenders." ACCEPTANCE OF OLD NOTES AND DELIVERY OF NEW NOTES The Company will accept for exchange any and all Old Notes which are properly tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date. The New Notes issued pursuant to the Exchange Offer will be delivered promptly following the Expiration Date. See "The Exchange Offer - Terms of the Exchange Offer." EXCHANGE AGENT United States Trust Company of New York is serving as Exchange Agent in connection with the Exchange Offer. See "The Exchange Offer - Exchange Agent." USE OF PROCEEDS There will be no cash proceeds to the Company from the exchange pursuant to the Exchange Offer. FEDERAL INCOME TAX CONSEQUENCES The exchange of Old Notes for New Notes will not be a taxable exchange for Federal income tax purposes. See "Certain Federal Income Tax Considerations." CONSEQUENCES OF FAILURE TO EXCHANGE Holders of Old Notes who do not exchange their Old Notes for New Notes pursuant to the Exchange Offer will continue to be subject to the restrictions on transfer of such Old Notes as set forth in the legend thereon as a consequence of the issuance of the Old Notes pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, Old Notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws.
SUMMARY DESCRIPTION OF THE NEW NOTES The Exchange Offer applies to $25,000,000 aggregate principal amount of Old Notes. The terms of the New Notes are identical in all material respects to the Old Notes, except that the New Notes have been registered under the Securities Act and, therefore, will not bear legends restricting their transfer and will not contain certain provisions providing for an increase in the interest rate on the Old Notes under certain circumstances relating to the Registration Rights Agreement, which provisions will terminate as to all of the Notes upon the consummation of the Exchange Offer. The New Notes will evidence the same debt as the Old Notes and, except as set forth in the immediately preceding sentence, will be entitled to the benefits of the Indenture, under which both the Old Notes were, and the New Notes will be, issued. See "Description of New Notes."
THE NEW NOTES $25 million in aggregate principal amount at maturity of 12 1/4% Series C Senior Subordinated Notes due 2004. MATURITY DATE April 15, 2004. INTEREST PAYMENT DATES October 15 and April 15 of each year, commencing on April 15, 1999. MANDATORY REDEMPTION The Company is not required to make mandatory redemption or sinking fund payments with respect to the New Notes. Optional Redemption On or after April 15, 1999, the New Notes will be redeemable at any time at the option of the Company, in whole or in part, at the redemption prices set forth herein, plus accrued and unpaid interest, if any, to the date of redemption. CHANGE OF CONTROL In the event of a Change of Control, each Holder of the Notes will have the right to require the Company to repurchase such Holder's Notes, in whole or in part, at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. GUARANTEES The New Notes will be guaranteed by the Guarantors. The Note Guarantees will be unconditional joint and several obligations of each Guarantor and will be subordinated as described below under "Ranking." Ranking The New Notes will be unsecured senior subordinated obligations of the Company, will rank PARI PASSU with the 1994 Notes and will be subordinate in right of payment to all Senior Indebtedness of the Company, which will include borrowings under the Credit Facility. The New Notes will be senior to any indebtedness which by its terms is subordinate to the New Notes, regardless of when such indebtedness is incurred. Each Note Guarantee will be subordinate in right of payment to all Senior Indebtedness of each respective Guarantor. Senior Indebtedness of the Company consists of borrowings under the Credit Facility, the Nevada Bonds (as defined herein) and the South Carolina Bonds (as defined herein). Senior Indebtedness of the Guarantors consists of their joint and several guarantee of the obligations of the Company under the Credit Facility and obligations with respect to the Nevada Bonds and, in the case of Holding, the 1996 Notes. As of September 26, 1998, the aggregate amount of outstanding Senior Indebtedness of the Company would have been $76.8 million, the aggregate amount of outstanding total indebtedness of the Company, including the 1994 Notes, would have been $203.4 million, and the indebtedness of the Guarantors senior to the Note Guarantees would have been $307.7 million. As of September 26, 1998, all indebtedness of the Company other than the Senior Indebtedness was PARI PASSU in right of payment to the New Notes, and there was no indebtedness subordinated to the New Notes. Certain Covenants The Indenture pursuant to which the Old Notes were, and the New Notes will be, issued (the "Indenture") contains covenants, including, but not limited to, covenants with respect to the following matters: (i) limitations on the retention of proceeds from asset sales; (ii) limitations on the incurrence of additional indebtedness and the issuance of disqualified stock; (iii) limitations on restricted payments; (iv) limitations on transactions with affiliates; (v) limitations on liens; (vi) limitations on dividends and other payment restrictions affecting subsidiaries; and (vii) limitations on mergers, consolidations and sales of assets. In addition, while the Indenture contains, among other things, the foregoing covenants as well as a requirement to offer to purchase New Notes upon a Change of Control, the Indenture does not contain any provisions specifically intended to protect Holders of the New Notes in the event of a future highly leveraged transaction involving the Company or any Guarantor. See "Description of Notes."
RISK FACTORS SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS PRIOR TO TENDERING OLD NOTES IN THE EXCHANGE OFFER, INCLUDING HIGHLY LEVERAGED CONDITION, OPERATING RESTRICTIONS, COMPANY GROWTH AND RISKS RELATED TO ACQUISITIONS, LIMITED ABILITY OF HOLDING TO PERFORM UNDER NOTE GUARANTEE, HISTORICAL NET LOSSES, SUBORDINATION OF THE NOTES AND NOTE GUARANTEES, UNSECURED STATUS OF NOTES, RANKING OF NOTES WITH 1994 NOTES, FLUCTUATING INTEREST EXPENSE ON SENIOR INDEBTEDNESS, FRAUDULENT CONVEYANCE RISK, POSSIBLE ADVERSE EFFECT OF INCREASE IN RESIN PRICES, RELIANCE ON CERTAIN SUPPLIER, CONTROLLING STOCKHOLDERS, COMPETITION, ENVIRONMENTAL MATTERS, POTENTIAL LACK OF FUNDING FOR CHANGE OF CONTROL OFFER, LACK OF A PUBLIC MARKET FOR THE NEW NOTES, CONSEQUENCES OF FAILURE TO EXCHANGE, NECESSITY TO COMPLY WITH EXCHANGE OFFER PROCEDURES AND BLUE SKY RESTRICTIONS ON RESALE OF NEW NOTES. SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA (DOLLARS IN THOUSANDS) The following table sets forth (i) summary consolidated historical financial data of Holding and its subsidiaries and (ii) pro forma consolidated summary financial data of Holding and its subsidiaries which gives effect to (a) the Offering and (b) the PackerWare, Virginia Design, Venture Packaging and Norwich Acquisitions as of December 29, 1996 for consolidated operations statement data and consolidated other data for the year ended December 27, 1997. The following financial data should be read in conjunction with "Capitalization," "Pro Forma Condensed Consolidated Financial Statements," "Selected Historical Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements of Holding and its subsidiaries and the accompanying notes thereto, which information is included elsewhere herein.
FISCAL Pro Forma Year Ended Pro Forma Thirty- December 27, Nine Weeks Ended September 26, 1995 1996 1997 1997 1998 CONSOLIDATED OPERATIONS STATEMENT DATA: Net sales $140,681 $151,058 $226,953 $270,598 $211,977 Cost of goods sold 102,484 110,110 180,249 214,429 156,161 ------- ------- ------- ------- ------- Gross margin 38,197 40,948 46,704 56,169 55,816 Operating expenses(1) 17,670 23,679 30,505 36,711 32,103 ------- ------- ------- ------- ------- Operating income 20,527 17,269 16,199 19,458 23,713 Other expenses(2) 127 302 226 226 492 Interest expense, net(3) 13,389 20,075 30,246 35,238 27,100 ------- ------- ------- ------- ------- Income (loss) before income taxes 7,011 (3,108) (14,273) (16,006) (3,879) Income taxes 678 239 138 428 371 ------- ------- ------- ------- ------- Net income (loss) $6,333 ($3,347) ($14,411) ($16,434) ($4,250) ======= ======= ======= ======= ======== Preferred stock dividends -- (1,116) (2,558) (2,558) (2,620) Common stock dividends -- -- -- -- -- CONSOLIDATED OTHER DATA: Adjusted EBITDA(4) $31,569 34,718 40,268 48,876 46,802 Adjusted EBITDA margin(5) 22.4% 23.0% 17.7% 18.1% 22.1% Cash provided by operating activities 12,969 14,426 14,154 17,417 29,460 Cash used for investing activities (25,385) (14,639) (102,102) (105,365) (34,784) Cash provided by financing activities 11,124 2,370 80,444 80,444 890 Depreciation and amortization(6) 9,536 11,331 19,026 24,371 18,696 Capital expenditures 11,247 13,581 16,774 -- -- AT SEPTEMBER 26, 1998 CONSOLIDATED BALANCE SHEET DATA: Cash and cash equivalents $ 7,122 Working capital (deficiency) 5,020 Total assets 248,521 Total Berry Plastics long-term debt 203,391 Total long-term debt 308,391 Stockholders' equity (deficit) (115,078)
____________________ (1) Operating expenses include pursued acquisition costs of $473 and business start-up expenses of $394 in fiscal 1995; compensation expense related to the 1996 Transaction (as defined herein) of $2,762, Tri-Plas Acquisition (as defined herein) start-up expenses of $671 and $907 for costs related to the consolidation of the Winchester, Virginia facility during fiscal 1996; and business start-up and machine integration expenses of $3,255 related to the 1997 Acquisitions (as defined herein), and plant consolidation expenses of $480 and $368 related to the shutdown of the Winchester, Virginia and Reno, Nevada facilities, respectively, during fiscal 1997. Pro forma fiscal 1997 operating expenses include the same non-recurring expenses as disclosed above for fiscal 1997. Operating expenses include business start up and machine integration expenses of $1,080 related to the 1997 Acquisitions and plant consolidation expenses of $87 and $2,072 related to the shutdown of the Reno, Nevada and Anderson, South Carolina facilities, respectively, for the pro forma thirty- nine weeks ended September 26, 1998. (2) Other expenses consist of loss on disposal of property and equipment for the respective periods. (3) Includes non-cash interest expense of $950, $1,212 and $2,005 in fiscal 1995, 1996 and 1997, respectively, and $2,042 and $1,135 for the pro forma year ended December 27, 1997 and the pro forma thirty-nine weeks ended September 26, 1998, respectively. (4) Adjusted EBITDA is defined as income (loss) before income taxes, net interest expense, depreciation and amortization of intangibles adjusted to exclude (i) non-cash charges relating to amortization of restricted stock awards and market value adjustment related to stock options of ($214) and $358 for fiscal 1995 and 1996, respectively, (ii) other non-recurring or "one-time" expenses as described in Note (1) above, (iii) management fees and reimbursed expenses paid to First Atlantic (as defined herein) of $853, $749, $828 and $654 for fiscal year 1995, 1996 and 1997 and pro forma thirty-nine weeks ended September 26, 1998, respectively, and certain legal expenses associated with unusual litigation of $650, $100, and $500 for fiscal year 1996 and 1997 and thirty-nine weeks ended September 26, 1998, respectively, and (iv) loss on disposal of property and equipment as described in Note (2) above. Pro forma fiscal 1997 adjustments are the same as fiscal 1997 adjustments. Adjusted EBITDA should not be considered in isolation or as an alternative to income from operations or to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) and should not be construed as an indication of a company's operating performance or as a measure of liquidity. In addition, the Company's calculation of Adjusted EBITDA differs from that presented by certain other companies and thus is not necessarily comparable to similarly titled measures used by other companies. EBITDA is presented because it is a widely accepted financial indicator of a company's ability to service and/or incur debt. However, EBITDA should not be considered in isolation or as an alternative to income from operations or to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) and should not be construed as an indication of a company's operating performance or as a measure of liquidity. In addition, the Company's calculation of EBITDA may differ from that presented by certain other companies and thus may not be comparable to similarly titled measures used by other companies. (5) Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales. (6) Depreciation and amortization excludes non-cash amortization of deferred financing and origination fees and debt discount amortization which are included in interest expense. RISK FACTORS IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY BY HOLDERS OF OLD NOTES BEFORE MAKING A DECISION TO TENDER THEIR OLD NOTES IN THE EXCHANGE OFFER. HIGHLY LEVERAGED CONDITION The Company and Holding are highly leveraged. As of September 26, 1998, the Company's total consolidated indebtedness was approximately $203.4 million, and Holding's consolidated stockholders' deficit was approximately $115.1 million. The high degree of leverage could have important consequences to holders of the Notes, 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 Credit Facility is secured by substantially all of the assets of Berry and matures prior to the maturity of the Notes; (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. As of September 26, 1998, the Company had unused borrowing capacity under the Credit Facility's borrowing base of approximately $40.4 million. Berry's ability to pay principal and interest on the Notes 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. However, if Berry cannot generate sufficient cash flow from operations to meet its obligations, then it 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 remedies could be effected on satisfactory terms, if at all. See "Management's Discussion and Analysis of Financial Condition and Results and Operations - Liquidity and Capital Resources." OPERATING RESTRICTIONS The Indenture restricts, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, pay dividends, redeem capital stock, create liens, dispose of certain assets, engage in mergers, make contributions, loans or advances and enter into transactions with affiliates. In the event that the Company's cash flow and existing working capital are insufficient to fund the Company's expenditures or to service its indebtedness, including the Notes, the 1994 Notes and borrowings under the Credit Facility, the Company would be required to raise additional funds through capital contributions from Holding, the refinancing of all or a part of the Company's indebtedness or a sale of assets or subsidiaries. The restrictions contained in the Indenture, the indenture governing the 1994 Notes (the "1994 Indenture") and the Credit Facility, in combination with the Company's highly leveraged financial position, could severely limit the Company's ability to raise such additional funds or to respond to changing market and economic conditions, provide for capital expenditures or take advantage of business opportunities which may arise. See "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources," "Description of Certain Indebtedness" and "Description of Notes." COMPANY GROWTH AND RISKS RELATED TO ACQUISITIONS As part of its growth strategy, the Company aggressively pursues the acquisition of other companies, assets and product lines that either complement or expand its existing business. In fiscal 1997, the Company consummated the Container Industries Acquisition, the PackerWare Acquisition, the Virginia Design Acquisition and the Venture Packaging Acquisition (collectively, the "1997 Acquisitions") and in fiscal 1998, the Company has consummated the Norwich Acquisition and the Knight Acquisition. See "Summary of Prospectus - Recent Acquisitions." The Company continually evaluates potential acquisition opportunities, including those which could be material in size and scope. Acquisitions involve a number of special risks and factors, including the diversion of management's attention to the assimilation of the acquired companies and the management of expanding operations, the incorporation of acquired products into the Company's product line, the increasing demands on the Company's operational systems, adverse effects on the Company's reported operating results, the amortization of acquired intangible assets, the loss of key employees and the difficulty of presenting a unified corporate image. The Company has had preliminary acquisition discussions with, or has evaluated the potential acquisition of, numerous companies over the last year. Acquisition opportunities identified to date include companies and divisions of companies, with annual revenues ranging from several million dollars to revenues that approach those of the Company. The Company has taken the following actions in the pursuit of various acquisitions opportunities: preliminary discussions; exchange of confidential, nonpublic information; verbal and written expressions of interest; and proposals and negotiations regarding potential transaction structure and price. The Company is unable to predict whether or when any prospective acquisition candidates will become available or the likelihood of a material acquisition being completed. If the Company proceeds with an acquisition, and if such acquisition is relatively large and consideration is in the form of cash, a substantial portion of the Company's available cash resources could be used in order to consummate any such acquisition. In addition, due to the relatively large size of several potential acquisition opportunities, the general risks described above inherent in acquisitions would be particularly acute. The Company has no agreements, arrangements or understandings concerning any acquisition which would be material in size and scope to the Company's business. However, the Company intends to pursue appropriate acquisition opportunities actively. No assurance can be given that any acquisition by the Company will or will not occur, that if an acquisition does occur that it will not materially and adversely affect the Company or that any such acquisition will be successful in enhancing the Company's business. LIMITED ABILITY OF HOLDING TO PERFORM UNDER NOTE GUARANTEE Holding is a holding company and is entirely dependent on the declaration by the Company of dividends to pay its obligations, including its obligations under its Note Guarantee. Under the terms of the Credit Facility, the Company is severely restricted from declaring dividends to Holding. In addition, the 1996 Indenture governing the 1996 Notes limits the ability of Holding to make certain payments, including payments under its Note Guarantee. Accordingly, absent a substantial increase in operating results of the Company and a refinancing of the 1996 Notes or an equity offering, Holding is not expected to be able to perform under its Note Guarantee. HISTORICAL NET LOSSES Consolidated earnings have been insufficient to cover fixed charges by $3.3 million, $14.6 million, $16.3 million and $4.2 million for fiscal year 1996, 1997, pro forma year ended December 27, 1997 and pro forma thirty-nine weeks ended September 26, 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 the Company. These net losses were $3.3 million, $14.4 million, $16.4 million and $4.3 million for fiscal 1996, fiscal 1997, pro forma year ended December 27, 1997 and pro forma thirty-nine weeks ended September 26, 1998, respectively. Holding expects that it will continue to experience consolidated net losses for the foreseeable future. SUBORDINATION OF THE NOTES AND NOTE GUARANTEES; UNSECURED STATUS OF NOTES SUBORDINATION Pursuant to the terms of the Indenture, payments on the Notes are subordinated to the prior payment of all Senior Indebtedness, which includes borrowings under the Credit Facility and the Nevada Bonds. As of September 26, 1998, the Notes were subordinated to approximately $76.8 million of Senior Indebtedness of the Company. In addition, as of such date, up to $40.4 million was available for borrowing under the Credit Facility (subject to applicable borrowing base limitations), and there was no indebtedness subordinated to the Notes. See "Description of Certain Indebtedness - Credit Facility." The Indenture does not limit the amount of additional Senior Indebtedness that may be incurred by the Company or its subsidiaries provided that a certain fixed charge coverage test is met. See "Description of Notes." By reason of such subordination, in the event of the insolvency, liquidation, reorganization, dissolution or the winding up of the Company, or in the event that the Senior Indebtedness is otherwise accelerated, holders of Senior Indebtedness must be paid in full before the holders of the Notes may be paid by the Company. In such event, there may be insufficient assets remaining to satisfy the claims of the holders of the Notes. In addition, the Company will not be permitted to make any payment with respect to the Notes for a substantial period of time if defaults under the Credit Facility or certain other Senior Indebtedness exist and are continuing and certain other conditions are satisfied. The Notes rank PARI PASSU with the 1994 Notes and PARI PASSU with, or senior to, all other subordinated debt of the Company. In addition, the Note Guarantees are subordinated to all existing and future Senior Indebtedness of each Guarantor, including the guarantees under the Credit Facility, and, in the case of Holding, the 1996 Notes. UNSECURED STATUS OF NOTES The Notes and Note Guarantees are unsecured obligations of the Company and the Guarantors, respectively. The Indenture permits the Company to incur certain secured indebtedness, including indebtedness under the Credit Facility, which is secured by a lien on substantially all of the assets of the Company and the Guarantors. The holders of any secured indebtedness will have a claim prior to the holders of the Notes with respect to any assets pledged by the Company as security for such indebtedness. Upon an event of default under the Credit Facility, the lender thereunder would be entitled to foreclose on the assets of the Company and the Guarantors. In such event, the assets of the Company and the Guarantors remaining after repayment of such secured indebtedness may be insufficient to satisfy the obligations of the Company with respect to the Notes. RANKING OF NOTES WITH 1994 NOTES The terms of the 1994 Notes and the Notes are identical in all material respects except that the 1994 Notes have a priority upon the payment of proceeds pursuant to an Asset Sale (as defined herein). See "Description of Notes - Repurchase at the Option of Holders - Asset Sales." FLUCTUATING INTEREST EXPENSE ON SENIOR INDEBTEDNESS The Company's and the Guarantors' respective obligations under the Credit Facility and the Nevada Bonds bear interest at rates that may be expected to fluctuate over time. Under the terms of the Indenture, the Company may incur indebtedness under the Credit Facility of up to the greater of $132.6 million and the Borrowing Base (as defined herein). Accordingly, a substantial increase in interest rates could adversely affect the Company's ability to service its debt obligations, including its obligations on the Notes. See "Description of Certain Indebtedness." FRAUDULENT CONVEYANCE RISK If a court of competent jurisdiction in a suit by an unpaid creditor or a representative of creditors (such as a trustee in bankruptcy or a debtor-in- possession) were to find that, at the time of the incurrence of the indebtedness represented by the Notes and the Note Guarantees, as the case may be, the Company or a Guarantor was insolvent, was rendered insolvent by reason of such incurrence, was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital, intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they matured, or intended to hinder, delay or defraud its creditors, and that the indebtedness was incurred for less than reasonably equivalent value or fair consideration, then such court could, among other things, (i) void all or a portion of the Company's or such Guarantor's obligations to the holders of the Notes, the effect of which could be that the holders of the Notes might not be repaid in full and/or (ii) subordinate the Company's or such Guarantor's obligations to the holders of the Notes to other existing and future indebtedness of the Company or such Guarantor, as the case may be, the effect of which would be to entitle such other creditors to be paid in full before any payment could be made on the Notes. The measure of insolvency for purposes of the foregoing will vary depending upon the law applied in such case. Generally, however, the Company would be considered insolvent if the sum of its debts, including contingent liabilities, was greater than all of its assets at a fair valuation or if the present fair saleable value of its assets was less than the amount that would be required to pay the probable liabilities on its existing debts, including contingent liabilities, as they become absolute and matured. POSSIBLE ADVERSE EFFECT OF INCREASE IN RESIN PRICES The primary materials used by the Company in the manufacture of its products are various plastic resins, which in fiscal 1997 constituted approximately $72.1 million, or 40% of the Company's total cost of goods sold. Accordingly, the Company's financial performance is materially dependent on its ability to pass through resin price increases to its customers. Plastic resins are subject to cyclical price fluctuations, including those arising from supply shortages and as a result of changes in the prices of natural gas, crude oil and other petrochemical intermediates from which resins are produced. Although the Company has been able historically to pass on increases in resin prices to its customers, no assurance can be given that this trend will continue or that a significant increase in resin prices would not have a material adverse effect on the Company's financial performance. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - General Economic Conditions and Inflation" and "Business - Sources and Availability of Raw Materials." RELIANCE ON CERTAIN SUPPLIER The Company purchases approximately 58% of its total resin requirements (in dollars) from Dow Chemical Company ("Dow") pursuant to purchase orders issued from time to time by the Company. The Company has a long-standing relationship with Dow, but it has no master agreement with Dow. The Company has worked closely with Dow to develop resins which yield maximum performance from the Company's equipment. Although the Company believes its relationship with Dow is mutually beneficial, no assurance can be given that Dow will continue to be a supplier to the Company in the future or that alternative sources would be available for the Company's resin requirements. CONTROLLING STOCKHOLDERS; MANAGEMENT STOCKHOLDERS Atlantic Equity Partners International II, L.P., a Delaware limited partnership ("International"), owns approximately 54% (on a voting common stock equivalent basis) of Holding's outstanding voting capital stock. As such, subject to the terms of the New Stockholders Agreement (as defined herein), International has the ability to elect all of the members of Holding's board of directors and can determine the outcome of any corporate transaction or other matter submitted to the stockholders of Holding or the Company for approval, including mergers, consolidations and the sale of the Company or all or substantially all of the Company's assets. See "Certain Transactions - Stockholders Agreements." Atlantic Equity Associates International II, L.P., a Delaware limited partnership ("AEA II"), is the sole general partner of International. Mr. Buaron, the Chairman and a director of the Company, is the sole shareholder of Buaron Holdings Ltd. ("BHL"). BHL is the sole general partner of AEA II. Through his affiliations with BHL and AEA II, Mr. Buaron may be deemed to control International. See "Principal Stockholders." Including the shares of capital stock owned by International, all executive officers and directors of the Company as a group beneficially own approximately 94.9% (on a voting common stock equivalent basis) of Holding's outstanding voting capital stock. See "Management" and "Principal Stockholders." COMPETITION Most of the Company's products are sold in highly competitive markets in the United States. The Company competes with a significant number of companies of varying sizes, including divisions or subsidiaries of larger companies, on the basis of price, service, quality and the ability to supply products to customers in a timely manner. A number of the Company's competitors have financial and other resources that are substantially greater than those of the Company. Competitive pressures or other factors could cause the Company's products to lose market share or could result in significant price erosion, either of which would have a material adverse effect on the Company's results of operations. See "Business." ENVIRONMENTAL MATTERS Federal, state and local governments could enact laws or regulations concerning environmental matters that increase the cost of producing, or otherwise adversely affect the demand for, plastic products. The Company is aware that certain local governments have adopted ordinances prohibiting or restricting the use or disposal of certain plastic products that are among the types of products produced by the Company. If such prohibitions or restrictions were widely adopted, such regulatory and environmental measures or a decline in consumer preference for plastic products due to environmental considerations could have a material adverse effect upon the Company. In addition, certain of the Company's operations are subject to Federal, state and local environmental laws and regulations that impose limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage and disposal of solid and hazardous wastes. While the Company has not been required historically to make significant capital expenditures in order to comply with applicable environmental laws and regulations, the Company cannot predict with any certainty its future capital expenditure requirements because of continually changing compliance standards and environmental technology. Furthermore, although the Company is not aware of additional environmental issues, currently unknown conditions of noncompliance or currently unknown contamination of sites currently or formerly owned or operated by the Company (including contamination caused by prior owners and operators of such sites) may give rise to additional compliance or remediation costs or other liabilities. The Company does not have insurance coverage for environmental liabilities and does not anticipate obtaining such coverage in the future. See "Business - Environmental Matters and Governmental Regulation." POTENTIAL LACK OF FUNDING FOR CHANGE OF CONTROL OFFER In the event of a Change of Control, the Company will be required, subject to certain conditions, to offer to purchase all outstanding Notes and 1994 Notes at a purchase price equal to 101% of the principal amount thereof (or 101% of $125,000,000), plus accrued interest to the date of repurchase. There can be no assurance that the Company will have sufficient funds available to purchase all of the outstanding Notes and 1994 Notes were they to be tendered in response to an offer made as a result of a Change of Control. Moreover, the Credit Facility and the 1996 Indenture restrict such a purchase and the offer would require the approval of the lender or securityholders thereunder, as the case may be. As a result of this potential lack of funds and the restrictions contained in the Credit Facility and the 1996 Indenture, the Indenture may offer little, if any, protection to the Holders of the Notes in the event of a Change of Control. The Company's failure to purchase Notes rendered upon a Change of Control would constitute an event of default under the Indenture. In the event of a change of control, Holdings will also be required, subject to certain conditions, to offer to purchase all outstanding 1996 Notes at a purchase price equal to 101% of the principal amount thereof (or 101% of $105,000,000), plus accrued interest to the date of repurchase. The Credit Facility provides that events similar to a Change of Control will constitute an event of default thereunder. Upon the occurrence of an event of default under the Credit Facility, all amounts outstanding thereunder may become due and payable. All indebtedness of the Company under the Credit Facility, which may be up to $132.6 million (plus 1.5 million under the UK Revolver and 4.5 million under the UK Term Loan), is Senior Indebtedness. Accordingly, in the event of an event of default under the Credit Facility, including with respect to an event similar to a Change of Control, the subordination provisions contained in the Indenture will prohibit the Company (if the holders of Senior Indebtedness issue a notice to the Company to such effect) from making any payment on the Notes until such event of default is cured or upon the expiration of 179 days (unless the holders of Senior Indebtedness accelerate the maturity of the Senior Indebtedness). The Company could, in the future enter into certain transactions, including acquisitions, refinancings or other recapitalizations or highly levereaged transactions, that would not result in a Change of Control but would increase the amount of indebtedness outstanding or otherwise affect the Company's capital structure or credit ratings or otherwise adversely affect holders of the Notes. See "Description of Certain Indebtedness - Credit Facility" and "Description of Notes - Repurchase at Option of Holders - Change of Control." LACK OF A PUBLIC MARKET FOR THE NEW NOTES The New Notes will constitute a new class of securities with no established trading market. The Company does not intend to list the New Notes on any national securities exchange or to seek the admission thereof to trading in the Nasdaq National Market. The Old Notes are designated for trading in the PORTAL market. The Company has been advised by DLJ that DLJ currently intends to make a market in the New Notes. DLJ is not obligated to do so, however, and any market-making activities with respect to the New Notes may be discontinued at any time without notice. In addition, such market-making activity will be subject to the limits imposed by the Securities Act and the Exchange Act, and may be limited during the Exchange Offer and the pendency of any Shelf Registration Statement (as defined herein). Accordingly, no assurance can be given that an active public or other market will develop for the New Notes or as to the liquidity of the trading market for the New Notes. If a trading market does not develop or is not maintained, holders of the New Notes may experience difficulty in reselling the New Notes or may be unable to sell them at all. If a market develops for the New Notes, future trading prices of the New Notes will depend on many factors, including among other things, prevailing interest rates, the Company's and Holding's consolidated financial condition and results of operations and the market for similar notes. Depending on those and other factors, the New Notes may trade at a discount from their principal amount. CONSEQUENCES OF FAILURE TO EXCHANGE Holders of Old Notes who do not exchange the Old Notes for New Notes pursuant to the Exchange Offer will continue to be subject to the restrictions on transfer of such Old Notes as set forth in the legend thereon as a consequence of the issuance of the Old Notes pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Old Notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. The Company does not currently anticipate that it will register the Old Notes under the Securities Act. In addition, any trading market for the Old Notes not exchanged for New Notes will be adversely affected to the extent that Old Notes are tendered and accepted in the Exchange Offer. Based on interpretations by the staff of the Commission set forth in no-action letters issued to third parties, the Company believes that the New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold or otherwise transferred by any holder thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 promulgated under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, PROVIDED that such New Notes are acquired in the ordinary course of such holder's business, such holder has no arrangement with any person to participate in the distribution of such New Notes and neither such holder nor any such other person is engaging in or intends to engage in a distribution of such New Notes. Notwithstanding the foregoing, each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with any resale of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities (other than Old Notes acquired directly from the Company). The Company and the Guarantors have agreed that, for a period of one year from the date of this Prospectus, they will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." However, the ability of any Holder to resell the New Notes is subject to applicable state securities laws as described in "Risk Factors - Blue Sky Restrictions on Resale of New Notes." NECESSITY TO COMPLY WITH EXCHANGE OFFER PROCEDURES To participate in the Exchange Offer, and to avoid the restrictions on transfer of the Old Notes, Holders of Old Notes must transmit a properly completed Letter of Transmittal or an Agent's Message, including all other documents required by such Letter of Transmittal, to the Exchange Agent at one of the addresses set forth below under "The Exchange Offer - Exchange Agent" on or prior to the Expiration Date. In addition, either (i) certificates for such Old Notes must be received by the Exchange Agent along with the Letter of Transmittal or (ii) a timely confirmation of a book-entry transfer of such Old Notes, if such procedure is available, into the Exchange Agent's account at The Depository Trust Company pursuant to the procedure for book-entry transfer described herein, must be received by the Exchange Agent prior to the Expiration Date or (iii) the Holder must comply with the guaranteed delivery procedures described herein. The method of delivery of the Old Notes and the Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the Holder. Neither the Company, the Exchange Agent nor any other person shall incur any liability for failure to notify Holders of defects or irregularities with respect to tenders of Old Notes. See "The Exchange Offer." BLUE SKY RESTRICTIONS ON RESALE OF NEW NOTES In order to comply with the securities laws of certain jurisdictions, the New Notes may not be offered or resold by any holder unless they have been registered or qualified for sale in such jurisdictions or an exemption from registration or qualification is available and the requirements of such exemption have been satisfied. The Company does not currently intend to register or qualify the resale of the New Notes in any such jurisdictions. However, an exemption is generally available for sales to registered broker- dealers and certain institutional buyers. Other exemptions under applicable state securities laws may also be available. COMPANY HISTORY 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. The Company acquired substantially all of the assets (the "Mammoth Acquisition") of the Mammoth Containers division of Genpak Corporation in February 1992, adding plants in Forest City, North Carolina (which was subsequently sold by the Company) and Iowa Falls, Iowa. In March 1995, Berry Sterling, a newly formed, wholly owned subsidiary of the Company, acquired substantially all of the assets of Sterling Products, Inc. (the "Sterling Products Acquisition"), a producer of injection molded plastic drink cups and lids. Management believes that the Sterling Products Acquisition gave the Company immediate penetration into a rapidly expanding plastic drink cup market. In December 1995, Berry Tri-Plas (formerly Berry-CPI Corp.) acquired substantially all of the assets of Tri-Plas, Inc. (the "Tri-Plas Acquisition"), a manufacturer of injection molded containers and lids, and added manufacturing plants in Charlotte, North Carolina and York, Pennsylvania. Management believes that the Tri-Plas 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 1996, the Company acquired the assets relating to the plastic drink cup product line and decorating equipment of Alpha Products, Inc., a subsidiary of Aladdin Industries, Inc. The addition of these assets complemented the drink cup product line acquired in the Sterling Products Acquisition. In January 1997, the Company acquired PackerWare Corporation of Lawrence, Kansas and certain assets of Container Industries, Inc. of Pacoima, California. In May 1997, Berry Design acquired substantially all of the assets of Virginia Design Packaging Corp. of Suffolk, Virginia. In August 1997, the Company acquired Venture Packaging, Inc. of Monroeville, Ohio. In July 1998, the Company acquired Norwich Injection Moulders Limited of Norwich, England. In October 1998, Knight acquired substantially all of the assets of the Knight Engineering and Plastics Division of Courtaulds Packaging, Inc. See "Summary of Prospectus - Recent Acquisitions." THE 1996 TRANSACTION On June 18, 1996, Holding consummated the transaction described below (the "1996 Transaction"). BPC Mergerco, Inc. ("Mergerco") was organized by International, Chase Venture Capital Associates, L.P. ("CVCA") 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 Stock Purchase and Recapitalization Agreement dated as of June 12, 1996, each of International, CVCA 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 and Warrant Purchase Agreement dated as of June 12, 1996, CVCA and the Northwestern Mutual Life Insurance Company (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, (i) each share of 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, (ii) 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 (constituting approximately 19% of the post-merger common stock of the surviving corporation) and (iii) the common stock, preferred stock and warrants of Mergerco were converted into common stock, preferred stock and warrants of the surviving corporation, respectively. 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 offering in April 1994 by Berry of $100 million aggregate principal amount of the 1994 Notes (such transaction being 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 aggregate consideration paid to the sellers of the equity interests in Holding, including the holders of the 1994 Warrants, was approximately $119.6 million in cash. In order to finance the 1996 Transaction, including the payment of related fees and expenses: (i) Holding issued 12.50% Senior Secured Notes due 2006 (with such Notes being exchanged in October 1996 for the 12.50% Series B Senior Secured Notes due 2006 (the "1996 Notes")) for net proceeds 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 1996 Notes); (ii) the Common Stock Purchasers, the Preferred Stock Purchasers and certain members of management made equity and rollover investments in the aggregate amount of $70.0 million (which amount included rollover investments of approximately $7.1 million by certain members of management and $3.0 million by an existing institutional shareholder); and (iii) Holding received an aggregate of approximately $0.9 million in connection with the exercise of certain management stock options to purchase common stock of Holding. In connection with the 1996 Transaction, International, CVCA, certain other institutional investors and certain members of management entered into the New Stockholders Agreement pursuant to which certain stockholders, among other things, (i) were granted certain registration rights and (ii) under certain circumstances, have the right to force a sale of Holding. See "Certain Transactions - Stockholders Agreements." THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER The Old Notes were sold by the Company on August 24, 1998 to the Initial Purchaser, who placed the Old Notes with institutional investors. In connection therewith, the Company, the Guarantors and the Initial Purchaser entered into the Registration Rights Agreement, pursuant to which the Company and the Guarantors agreed, for the benefit of the Holders of the Old Notes, that the Company and the Guarantors would, at their sole cost, among other things, (i) within 90 days following the original issuance of the Old Notes, file with the Commission the Registration Statement (of which this Prospectus is a part) under the Securities Act with respect to an issue of a series of new notes of the Company identical in all material respects to the series of Old Notes (except that such New Notes would not contain terms with respect to transfer restrictions) and (ii) cause such Registration Statement to be declared effective under the Securities Act within 150 days following the original issuance of the Old Notes. Upon the effectiveness of the Registration Statement, the Company will offer, pursuant to this Prospectus, to the Holders of Transfer Restricted Securities (as defined herein) who are able to make certain representations the opportunity to exchange their Transfer Restricted Securities for a like principal amount of New Notes, to be issued without a restrictive legend and which may, generally, be reoffered and resold by the holder without restrictions or limitations under the Securities Act. The term "Holder" with respect to the Exchange Offer means any person in whose name Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder. The Company has not requested, and does not intend to request, an interpretation by the staff of the Commission with respect to whether the New Notes issued pursuant to the Exchange Offer in exchange for the Transfer Restricted Securities may be offered for sale, resold or otherwise transferred by any holder without compliance with the registration and prospectus delivery provisions of the Securities Act. Instead, based on interpretations by the staff of the Commission set forth in no-action letters issued to third parties, the Company believes that New Notes issued pursuant to the Exchange Offer in exchange for Transfer Restricted Securities may be offered for resale, resold and otherwise transferred by any holder of such New Notes (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 promulgated under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, PROVIDED that such New Notes are acquired in the ordinary course of such holder's business, such holder has no arrangement or understanding with any person to participate in the distribution of such New Notes and neither such holder nor any other such person is engaging in or intends to engage in a distribution of such New Notes. Since the Commission has not considered the Exchange Offer in the context of a no-action letter, there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer. Any Holder who is an affiliate of the Company or who tenders in the Exchange Offer for the purpose of participating in a distribution of the New Notes cannot rely on such interpretations by the staff of the Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale transaction. Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Transfer Restricted Securities where such Transfer Restricted Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Company). The Company and the Guarantors have agreed that, for a period of one year after the date of this Prospectus, they will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." If (i) the Company and the Guarantors are not permitted to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy or (ii) any holder of Transfer Restricted Securities notifies the Company prior to the 20th day following consummation of the Exchange Offer that (A) it is prohibited by law or Commission policy from participating in the Exchange Offer or (B) that it may not resell the New Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and this Prospectus is not appropriate or available for such resales or (C) that it is a broker-dealer and owns Notes acquired directly from the Company or an affiliate of the Company, the Company and the Guarantors will file with the Commission a shelf registration statement (the "Shelf Registration Statement") to cover resales of the Notes by the holders thereof who satisfy certain conditions relating to the provision of information in connection with the Shelf Registration Statement. The Company and the Guarantors will use their best efforts to cause the applicable registration statement to be declared effective as promptly as possible by the Commission. For purposes of the foregoing, "Transfer Restricted Securities" means each Old Note (together with any related note guarantees) until (i) the date on which such Old Note has been exchanged by a person other than a broker-dealer for a New Note in the Exchange Offer, (ii) following the exchange by a broker-dealer in the Exchange Offer of an Old Note for a New Note, the date on which such New Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of this Prospectus, (iii) the date on which such Old Note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Old Note is distributed to the public pursuant to Rule 144 under the Securities Act. The Registration Rights Agreement provides that (i) the Company and the Guarantors will file the Registration Statement with the Commission on or prior to 90 days after the original issuance of the Old Notes, (ii) the Company will use its best efforts to have the Registration Statement declared effective by the Commission on or prior to 150 days after the original issuance of the Old Notes, (iii) unless the Exchange Offer would not be permitted by applicable law or Commission policy, the Company and the Guarantors will commence the Exchange Offer and use their best efforts to issue, on or prior to 30 business days after the date on which the Registration Statement was declared effective by the Commission, New Notes in exchange for all Old Notes tendered prior thereto in the Exchange Offer and (iv) if obligated to file the Shelf Registration Statement, the Company and the Guarantors will use their best efforts to file the Shelf Registration Statement with the Commission on or prior to 45 days after such filing obligation arises and to cause the Shelf Registration Statement to be declared effective by the Commission on or prior to 90 days after such obligation arises. If (a) the Company and the Guarantors fail to file any of the registration statements required by the Registration Rights Agreement on or before the date specified for such filing, (b) any of such registration statements is not declared effective by the Commission on or prior to the dated specified for such effectiveness (the "Effectiveness Target Date"), or (c) the Company and the Guarantors fail to consummate the Exchange Offer within 30 business days of the Effectiveness Target Date with respect to the Registration Statement, or (d) the Shelf Registration Statement or the Registration Statement is declared effective but thereafter ceases to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (a) through (d) above a "Registration Default"), then the Company and the Guarantors will pay Liquidated Damages to each Holder of Old Notes with respect to the first 90-day period immediately following the occurrence of the first Registration Default in an amount equal to $.05 per week per $1,000 principal amount of Old Notes held by such Holder. The amount of the Liquidated Damages will increase by an additional $.05 per week per $1,000 principal amount of Old Notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of Liquidated Damages for all Registration Defaults of $.50 per week per $1,000 principal amount of Old Notes. All accrued Liquidated Damages will be paid by the Company and the Guarantors on each Damages Payment Date to the Global Note Holder (as defined herein) by wire transfer of immediately available funds or by Federal funds check and to Holders of Certificated Securities (as defined herein) by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified. Following the cure of all Registration Defaults, the accrual of Liquidated Damages will cease. Holders of Old Notes will be required to make certain representations to the Company and the Guarantors in order to participate in the Exchange Offer and will be required to deliver certain information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their Old Notes included in the Shelf Registration Statement and benefit from the provisions regarding Liquidated Damages set forth above. The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. The Old Notes are designated for trading in the PORTAL market. To the extent Old Notes are tendered and accepted in the Exchange Offer, the principal amount of outstanding Old Notes will decrease with a resulting decrease in the liquidity in the market therefor. Following the consummation of the Exchange Offer, Holders of Old Notes who were eligible to participate in the Exchange Offer but who did not tender their Old Notes will not be entitled to certain rights under the Registration Rights Agreement and such Old Notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for the Old Notes could be adversely affected. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this Prospectus and in the Letter of Transmittal, the Company will accept any and all Old Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. The Company will issue $1,000 principal amount of New Notes in exchange for each $1,000 principal amount of outstanding Old Notes accepted in the Exchange Offer. Holders may tender some or all of their Old Notes pursuant to the Exchange Offer. However, Old Notes may be tendered only in integral multiples of $1,000. The form and terms of the New Notes will be identical in all material respects to the form and terms of the Old Notes, except that the New Notes have been registered under the Securities Act and therefore will not bear legends restricting their transfer and will not contain certain provisions providing for an increase in the interest rate on the Old Notes under certain circumstances relating to the Registration Rights Agreement, which provisions will terminate upon the consummation of the Exchange Offer. The New Notes will evidence the same debt as the Old Notes and will be entitled to the benefits of the Indenture under which the Old Notes were, and the New Notes will be, issued. As of the date of this Prospectus, $25,000,000 aggregate principal amount of the Old Notes are outstanding. The Company has fixed the close of business on January , 1999 as the record date for the Exchange Offer for purposes of determining the persons to whom this Prospectus, together with the Letter of Transmittal, will initially be sent. As of such date, there were registered Holders of the Old Notes. Holders of the Old Notes do not have any appraisal or dissenters' rights under the Delaware General Corporation Law (the "DGCL") or the Indenture in connection with the Exchange Offer. The Company intends to conduct the Exchange Offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder. The Company shall be deemed to have accepted validly tendered Old Notes when, as and if the Company has given oral notice (confirmed in writing) or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering Holders for the purpose of the exchange of Old Notes. If any tendered Old Notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, any such unaccepted Old Notes will be returned, without expense, to the tendering Holder thereof as promptly as practicable after the Expiration Date. Holders who tender Old Notes in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Old Notes pursuant to the Exchange Offer. The Company will pay all charges and expenses, other than certain applicable taxes, in connection with the Exchange Offer. See "The Exchange Offer - Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date" shall mean 5:00 p.m., New York City time, on February , 1999, unless the Company, in its sole discretion, extends the Exchange Offer, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. In order to extend the Exchange Offer, the Company will notify the Exchange Agent of any extension by oral notice (confirmed in writing) or written notice and will make a public announcement thereof prior to 9:00 a.m., New York City time, on the next business day after each previously scheduled expiration date. The Company reserves the right, in its sole discretion, (i) to delay accepting any Old Notes, to extend the Exchange Offer or, if any of the conditions set forth below under "The Exchange Offer - Conditions" shall not have been satisfied, to terminate the Exchange Offer, by giving oral notice (confirmed in writing) or written notice of such delay, extension or termination to the Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by a public announcement thereof. If the Exchange Offer is amended in a manner determined by the Company to constitute a material change, the Company will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered Holders, and the Company will extend the Exchange Offer for a period of five to 10 business days, depending upon the significance of the amendment and the manner of disclosure to the registered Holders, if the Exchange Offer would otherwise expire during such five- to 10-business-day period. Without limiting the manner in which the Company may choose to make public announcement of any delay, extension, termination or amendment of the Exchange Offer, the Company shall have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to the Dow Jones News Service. INTEREST ON THE NEW NOTES The New Notes will bear interest from October 15, 1998. Interest will be payable on the Old Notes accepted for exchange to, but not including, October 15, 1998. PROCEDURES FOR TENDERING The tender of Old Notes by a Holder thereof pursuant to one of the procedures set forth below and the acceptance thereof by the Company will constitute a binding agreement between such Holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. This Prospectus, together with the Letter of Transmittal, will first be sent on or about January , 1999, to all Holders of Old Notes known to the Company and the Exchange Agent. Only a Holder of the Old Notes may tender such Old Notes in the Exchange Offer. A Holder who wishes to tender any Old Notes for exchange pursuant to the Exchange Offer must transmit a properly completed and duly executed Letter of Transmittal, or a facsimile thereof, or an Agent's Message, including any other required documents, to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. In addition, either (i) the certificates for such Old Notes must be received by the Exchange Agent along with the Letter of Transmittal or (ii) a timely confirmation of a book-entry transfer (a "Book- Entry Confirmation") of such Old Notes, if such procedure is available, into the Exchange Agent's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry transfer described below, must be received by the Exchange Agent prior to the Expiration Date or (iii) the Holder must comply with the guaranteed delivery procedures described below. To be tendered effectively, the Old Notes, Letter of Transmittal or Agent's Message and other required documents must be received by the Exchange Agent at the address set forth below under "Exchange Agent" prior to 5:00 p.m., New York City time, on the Expiration Date. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering Old Notes which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal, and that the Company may enforce such agreement against such participant. THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IF SENT BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED AND PROPER INSURANCE BE OBTAINED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTERS OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. Any beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered Holder promptly and instruct such registered Holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such beneficial owner's own behalf, such beneficial owner must, prior to completing and executing the Letter of Transmittal or delivering an Agent's Message and delivering such beneficial owner's Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such beneficial owner's name or obtain a properly completed bond power from the registered Holder. The transfer of registered ownership may take considerable time. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined herein) unless the Old Notes tendered pursuant thereto are tendered (i) by a registered Holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 promulgated under the Exchange Act (an "Eligible Institution"). If the Letter of Transmittal is signed by a person other than the registered Holder of any Old Notes listed therein, such Old Notes must be endorsed or accompanied by a properly completed bond power, signed by such registered Holder as such registered Holder's name appears on such Old Notes. If the Letter of Transmittal or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, evidence satisfactory to the Company of their authority to so act must be submitted with the Letter of Transmittal. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any defects, irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Old Notes, neither the Company, the Exchange Agent nor any other person shall incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that the Company determines are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holders, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. By tendering, each Holder will represent to the Company, among other things, that (i) the New Notes acquired by the Holder and any beneficial owners of Old Notes pursuant to the Exchange Offer are being obtained in the ordinary course of business of the persons receiving such New Notes, (ii) neither the Holder nor such beneficial owner has an arrangement with any person to participate in the distribution of such New Notes, (iii) neither the Holder nor such beneficial owner nor any such other person is engaging in or intends to engage in a distribution of such New Notes and (iv) neither the Holder nor any such other person is an "affiliate," as defined under Rule 405 promulgated under the Securities Act, of the Company. Each broker-dealer that receives New Notes for its own account in exchange for Old Notes, where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities (other than Old Notes acquired directly from the Company), may participate in the Exchange Offer but may be deemed an "underwriter" under the Securities Act and, therefore, must acknowledge in the Letter of Transmittal that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. See "Plan of Distribution." BOOK-ENTRY TRANSFER The Exchange Agent will make a request to establish an account with respect to the Old Notes at the Book-Entry Transfer Facility for purposes of the Exchange Offer within two business days after the date of this Prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of Old Notes by causing the Book-Entry Transfer Facility to transfer such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for transfer. However, although delivery of Old Notes may be effected through book-entry transfer at the Book- Entry Transfer Facility, the Letter of Transmittal or facsimile thereof, or an Agent's Message, with any required signature guarantees and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent at one of the addresses set forth below under "The Exchange Offer - Exchange Agent" on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, the Letter of Transmittal or any other required documents to the Exchange Agent prior to the Expiration Date may effect a tender if: (a)the tender is made through an Eligible Institution; (b)prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder, the certificate number(s) of such Old Notes and the principal amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal (or facsimile thereof) or an Agent's Message, together with the certificate(s) representing the Old Notes, or a Book-Entry Confirmation, and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent; and (c)such properly completed and executed Letter of Transmittal (or facsimile thereof) or an Agent's Message, as well as the certificate(s) representing all tendered Old Notes in proper form for transfer, or a Book- Entry Confirmation, as the case may be, and all other document required by the Letter of Transmittal are received by the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above. WITHDRAWAL OF TENDERS To withdraw a tender of Old Notes in the Exchange Offer, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn (including the certificate number or numbers and principal amount of such Old Notes), (iii) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Old Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Old Notes register the transfer of such Old Notes into the name of the persons withdrawing the tender and (iv) specify the name in which any such Old Notes are to be registered, if different from that of the Depositor. If certificates for Old Notes have been delivered or otherwise identified to the Exchange Agent, then, prior to the release of such certificates, the withdrawing Holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institution unless such Holder is an Eligible Institution. If Old Notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company in its sole discretion, which determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no New Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Properly withdrawn Old Notes may be retendered by following one of the procedures described above under "The Exchange Offer - Procedures for Tendering" at any time prior to the Expiration Date. Any Old Notes which have been tendered but which are not accepted for payment due to withdrawal, rejection of tender or termination of the Exchange Offer will be returned as soon as practicable to the Holder thereof without cost to such Holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures described above, such Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility for the Old Notes). CONDITIONS Notwithstanding any other term of the Exchange Offer, the Company shall not be required to accept for exchange, or exchange New Notes for, any Old Notes, and may terminate the Exchange Offer as provided herein before the acceptance of such Old Notes, if: (a)the Exchange Offer shall violate applicable law or any applicable interpretation of the staff of the Commission; or (b)any action or proceeding is instituted or threatened in any court or by any governmental agency that might materially impair the ability of the Company to proceed with the Exchange Offer or any material adverse development has occurred in any existing action or proceeding with respect to the Company; or (c)any governmental approval has not been obtained, which approval the Company shall deem necessary for the consummation of the Exchange Offer. If the Company determines in its sole discretion that any of the conditions are not satisfied, the Company may (i) refuse to accept any Old Notes and return all tendered Old Notes to the tendering Holders (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book- Entry Transfer Facility pursuant to the book-entry transfer procedures described above, such Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility), (ii) extend the Exchange Offer and retain all Old Notes tendered prior to the expiration of the Exchange Offer, subject, however, to the rights of Holders to withdraw such Old Notes (see "The Exchange Offer - Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with respect to the Exchange Offer and accept all properly tendered Old Notes which have not been withdrawn. If such waiver constitutes a material change to the Exchange Offer, the Company will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the registered Holders, and the Company will extend the Exchange Offer for a period of five to 10 business days, depending upon the significance of the waiver and the manner of disclosure to the registered Holders, if the Exchange Offer would otherwise expire during such five- to 10-business-day period. EXCHANGE AGENT The United States Trust Company of New York has been appointed as Exchange Agent for the Exchange Offer. Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letter of Transmittal and requests for Notices of Guaranteed Delivery should be directed to the Exchange Agent addressed as follows:
To: United States Trust Company of New York, as Exchange Agent BY REGISTERED OR CERTIFIED MAIL: BY FACSIMILE: BY HAND BEFORE 4:30 P.M.: United States Trust Company of New York (212) 780-0592 United States Trust Company of New York P.O. Box 843 Attention: Customer Service 111 Broadway Cooper Station New York, New York 10006 New York, New York 10276 Attention: Lower Level Corporate Trust Attention: Corporate Trust Services Window CONFIRM BY TELEPHONE TO: BY OVERNIGHT COURIER AND BY HAND AFTER (800) 548-6565 4:30 P.M. ON THE EXPIRATION DATE: United States Trust Company of New York 770 Broadway New York, New York 10003
FEES AND EXPENSES The expenses of soliciting tenders will be borne by the Company. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telephone or in person by officers and regular employees of the Company and its affiliates. The Company has not retained any dealer-manager in connection with the Exchange Offer and will not make any payments to brokers, dealers or others soliciting acceptances of the Exchange Offer. The Company, however, will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith. The cash expenses to be incurred in connection with the Exchange Offer will be paid by the Company. Such expenses include fees and expenses of the Exchange Agent and Trustee, accounting and legal fees and printing costs, among others. The Company will pay all transfer taxes, if any, applicable to the exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates representing New Notes or Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered Holder of the Old Notes tendered, or if tendered Old Notes are registered in the name of any person other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or any other person) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. ACCOUNTING TREATMENT The New Notes will be recorded at the same carrying value as the Old Notes as reflected in the Company's accounting records on the date of the exchange. Accordingly, no gain or loss for accounting purposes will be recognized. The expenses of the Exchange Offer and the unamortized expenses related to the issuance of the Old Notes will be amortized over the term of the New Notes. CAPITALIZATION (DOLLARS IN THOUSANDS) The following table sets forth the consolidated capitalization of Holding and its subsidiaries at September 26, 1998. The information in the table below is qualified in its entirety by, and should be read in conjunction with, the historical consolidated financial statements of Holding and the related notes included elsewhere herein.
AT SEPTEMBER 26, 1998 Marketable securities available to pay interest on 1996 Notes $13,121 ========= Current portion of long-term debt $18,280 ========= Long-term debt, excluding current portion: BERRY PLASTICS CORPORATION: Term loans $54,864 Nevada Bonds 4,000 Capital lease obligations 378 1994 Notes 100,000 Notes 25,000 Debt premium (discount) 869 --------- Total Berry Plastics long-term debt, excluding current portion 185,111 HOLDING: 1996 Notes 105,000 --------- Total consolidated long-term debt, excluding current portion 290,111 ========= Stockholders' equity: Class A Preferred Stock; 800,000 shares authorized; 600,000 shares issued 14,571 Less discount (2,843) Class B Preferred Stock; 200,000 shares authorized and issued 5,000 Class A Common Stock, par value $0.01: Voting: 500,000 shares authorized; 91,000 shares issued 1 Nonvoting: 500,000 shares authorized; 259,000 shares issued 3 Class B Common Stock, par value $0.01: Voting: 500,000 shares authorized; 144,936 shares issued 1 Nonvoting: 500,000 shares authorized; 58,168 shares issued 1 Class C Common Stock, par value $0.01: Nonvoting: 500,000 shares authorized; 16,960 shares issued -- Treasury stock; 726 shares (81) Additional paid-in capital 46,616 Warrants 3,511 Retained earnings (deficit) (181,970) Cumulative foreign currency transaction adjustment 112 -------- Total stockholders' equity (deficit) (115,078) -------- Total capitalization $175,033 ========
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma condensed consolidated statement of operations data of Holding (collectively, the "Pro Forma Statements") give effect to (i) the Offering and (ii) the PackerWare, Virginia Design, Venture Packaging and Norwich Acquisitions, as if the transactions had occurred as of December 29, 1996 for the statement of operations data. The Pro Forma Statements do not purport to represent what Holding's consolidated financial position or results of operations would actually have been if such transactions had in fact occurred on such dates or to project Holding's consolidated financial position or results of operations for any future date or period. The pro forma adjustments are based on information and upon assumptions that management believes to be reasonable. The Pro Forma Statements and accompanying notes should be read in conjunction with the historical consolidated financial statements and other financial information pertaining to Holding and related notes thereto included elsewhere in this Prospectus. BPC HOLDING CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 27, 1997 (DOLLARS IN THOUSANDS)
HOLDING Acquisitions Pro Forma Offering Pro Forma HISTORICAL Adjustments for the Adjustments for the Acquisitions Acquisitions and the Offering Net sales $226,953 $43,645{(1)} $270,598 $ -- $270,598 Cost of goods sold 180,249 34,180{(2)} 214,429 -- 214,429 ------- ------- ------- ------- ------- Gross margin 46,704 9,465 56,169 -- 56,169 Operating expenses 30,505 6,206{(3)} 36,711 -- 36,711 ------- ------- ------- ------- ------- Operating income 16,199 3,259 19,458 -- 19,458 Other expenses 226 0 226 -- 226 Interest expense, net 30,246 3,903{(4)} 34,149 1,089{(7)} 35,238 ------- ------- ------- ------- ------- Loss before income taxes (14,273) (644) (14,917) (1,089) (16,006) Income taxes 138 290{(5)} 428 -- 428 ------- ------- ------- ------- ------- Net loss ($14,411) ($934) ($15,345) (1,089) ($16,434) ======= ======= ======= ======= ======= BERRY PLASTICS CORPORATION DATA: Cash interest expense, net $17,187 $3,825{(6)} $21,012 $1,130 $22,142
BPC HOLDING CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS 39 WEEKS ENDED SEPTEMBER 26, 1998 (DOLLARS IN THOUSANDS)
HOLDING Norwich Pro Forma Offering Pro Forma HISTORICAL Acquisition for the Norwich Adjustments for the Norwich Adjustments Acquisition Acquisition and the Offering Net sales $205,116 $6,861{(1)} $211,977 $ -- $211,977 Cost of goods sold 151,083 5,078{(2)} 156,161 -- 156,161 ------- ------ ------- ------ ------- Gross Margin 54,033 1,783 55,816 -- 55,816 Operating expenses 31,136 967{(3)} 32,103 -- 32,103 ------- ------ ------- ------ ------- Operating income 22,897 816 23,713 -- 23,713 Other expenses 492 -- 492 -- 492 Interest expense, net 25,691 683{(4)} 26,374 726{(7)} 27,100 ------- ------ ------ ------ ------- Income (loss) before income taxes (3,286) 133 (3,153) (726) (3,879) Income taxes 331 40{(5)} 371 -- 371 ------ ------ ------ ------ ------ Net income (loss) ($3,617) $93 ($3,524) ($726) ($4,250) ======= ====== ======= ====== ====== BERRY PLASTICS CORPORATION DATA: Cash interest expense, net $15,288 $683{(6)} $15,971 $753{(7)} $16,724
BPC HOLDING CORPORATION NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS)
YEAR ENDED DECEMBER 27, 39 Weeks 1997 Ended September 26, 1998 PACKERWARE, VIRGINIA DESIGN, VENTURE PACKAGING AND NORWICH ACQUISITION ADJUSTMENTS: (1)Partial year net sales of the acquisitions $50,715 $6,861 Deduct customers lost due to acquisitions (7,070) -- ------- ------- Adjusted net sales for acquisitions $43,645 $6,861 ======= ======= (2)Cost of goods sold of the acquisitions $42,790 $5,078 Deduct cost of goods sold due to customers lost from acquisitions (6,970) -- Deduct resin costs due to volume discounts available to Berry (1,640) -- ------- ------- Adjusted cost of goods sold for acquisitions $34,180 $5,078 ======= ======= (3)Operating expenses of the acquisitions $5,924 $791 Deduct costs related to closed operating facility, net of incremental costs (612) -- incurred Deduct salaries of owners of acquisitions no longer employed by the Company (455) (129) Add amortization of goodwill resulting from the acquisitions 1,349 305 ------- ------- Adjusted operating expenses for acquisitions $6,206 $967 ======= ======= (4)Interest expense of the acquisitions $1,323 $59 Add incremental interest expense from the acquisitions 2,580 624 ------- ------- Adjusted interest expense for acquisitions $3,903 $683 ======= ======= (5)Provision for income taxes of the acquisitions $106 $289 Adjust taxes for the acquisitions 184 (249) ------- ------- Adjusted tax expense for acquisitions $290 $40 ======= ======= (6)Net cash interest expense of the acquisitions $1,323 $59 Add incremental net cash interest expense from acquisitions 2,502 624 ------- ------- Adjusted net cash interest expense for acquisitions $3,825 $683 ======= ======= OFFERING ADJUSTMENTS: (7)Adjustment of net interest expense: Cash interest on Notes $3,062 $2,041 Cash interest on debt reduction (1,932) (1,288) Amortization of premium on Notes (239) (159) Amortization of deferred financing costs associated with the Offering 198 132 ------- ------- Change in net interest expense $1,089 $726 ======= =======
SELECTED HISTORICAL FINANCIAL DATA (DOLLARS IN THOUSANDS) The following selected financial data of Holding and its subsidiaries as of and for the five fiscal years ended December 27, 1997 are derived from the consolidated financial statements of Holding which have been audited by Ernst & Young LLP, independent auditors. The following selected consolidated financial data for the 39 weeks ended September 27, 1997 and September 26, 1998 are derived from the unaudited condensed consolidated financial statements of Holding and, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such data. Operating results for the 39 weeks ended September 26, 1998 are not necessarily indicative of the results that may be achieved for Holding's fiscal year ending January 2, 1999. The selected financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements, related notes and other financial information included in this Prospectus.
Fiscal Twenty-Six Weeks Ended ---------------------------------------------------------------- --------------------- Statement of Operations Data: 1993 1994 1995 1996 1997 September 27, September 26, 1997 1998 ------- -------- -------- -------- -------- -------- --------- Net Sales ....................... $87,830 $106,141 $140,681 $151,058 $226,953 $164,715 $205,116 Cost of goods sold .............. 65,652 73,997 102,484 110,110 180,249 129,054 151,083 ------- -------- -------- -------- -------- -------- -------- Gross margin .................... 22,178 32,144 38,197 40,948 46,704 35,661 54,033 Operating expenses (1) .......... 14,447 15,160 17,670 23,679 30,505 21,508 31,136 ------- -------- -------- -------- -------- -------- -------- Operating income ................ 7,731 16,984 20,527 17,269 16,199 14,153 22,897 Other expenses (2) .............. 2,780 184 127 302 226 89 492 Interest expense, net (3) ....... 6,582 10,972 13,389 20,075 30,246 22,069 25,691 ------- -------- -------- ------- -------- ------- -------- Income (loss) before income taxes (1,631) 5,828 7,011 (3,108) (14,273) (8,005) (3,286) and extraordinary charge .... Income taxes .................... 72 11 678 239 138 151 331 ------- -------- -------- -------- -------- -------- -------- Income (loss) before extraordinary charge ...................... (1,703) 5,817 6,333 (3,347) (14,411) (8,156) (3,617) Extraordinary charge (4) ........ - 3,652 - - - - - ------- -------- -------- -------- -------- -------- -------- Net income (loss) ............... $(1,703) $ 2,165 $ 6,333 $ (3,347) $ (14,411) $ (8,156) $ (3,617) ======= ======== ======== ======== ======== ======== ======== Preferred stock dividends ....... $ - $ - $ - $ (1,116) $ (2,558) $ (1,757) $ (2,620) Common stock dividends .......... - 50,000 - - - - - BALANCE SHEET DATA (AT END OF PERIOD): Working capital ................. $ 384 $ 13,393 $ 13,012 $ 15,910 $ 20,863 $13,769 $ 5,020 Fixed assets .................... 36,615 38,103 52,441 55,664 108,218 109,420 104,564 Total assets .................... 60,143 91,790 103,465 145,798 239,444 250,908 248,521 Total debt ...................... 40,936 112,287 111,676 216,046 306,335 299,736 308,391 Stockholders' equity (deficit) .. 5,973 (38,838) (32,484) (97,550) (108,975) (101,919) (115,078) OTHER DATA: Adjusted EBITDA (5).............. $20,840 $25,683 $30,716 $33,319 $39,340 $30,108 $45,305 Cash provided by operating activities .................... 14,110 15,555 12,969 14,426 14,154 9,614 28,580 Cash used for investing activities .................... (3,821) (9,495) (25,385) (14,639) (102,102) (91,232) (25,036) Cash provided by (used for) financing activities .......... (9,859) 2,184 11,124 2,370 80,444 73,868 890 Depreciation and amortization (6) 11,198 8,176 9,536 11,331 19,026 12,622 17,949 Capital expenditures ............ 5,586 9,118 11,247 13,581 16,774 8,795 13,540 Ratio of earnings to fixed charges(7) ............... - 1.5x 1.4x - - - -
________________________________ (1) Operating expenses include $3,675 of costs associated principally with the shutdown and disposal of a facility acquired in the Mammoth Acquisition and $330 of costs related to an unsuccessful acquisition in fiscal 1993; $116 in pursued acquisition costs in fiscal 1994; pursued acquisition costs of $473 and business start-up expenses of $394 in fiscal 1995; compensation expense related to the 1996 Transaction 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; business start-up and machine integration expenses of $3,255 related to the 1997 Acquisitions and plant consolidation expenses of $480 and $368 related to the shutdown of the Winchester, Virginia and Reno, Nevada facilities, respectively, during fiscal 1997; plant consolidation expenses related to the shutdown of the Winchester and Reno facilities of $365 and $414, respectively, and $2,004 of integration expenses related to the 1997 Acquisitions for the thirty-nine weeks ended September 27, 1997; and $1,080 of business start-up and machine integration expenses related to the 1997 Acquisitions and plant consolidation expenses of $2,072 and $87 related to the shutdown of the Anderson, South Carolina and Reno, Nevada facilities, respectively, for the thirty-nine weeks ended September 26, 1998. (2) Other expenses consist of loss on disposal of property and equipment for the respective periods. (3) Includes non-cash interest expense of $1,617, $1,178, $950, $1,212 and $2,005 in fiscal 1993, 1994, 1995, 1996 and 1997, respectively, and $1,139 and $1,335 for the thirty-nine weeks ended September 27, 1997 and September 26, 1998. (4) During 1994, an extraordinary charge of $3.7 million was recognized as a result of the retirement of debt concurrent with the issuance of the 1994 Notes. (5) Adjusted EBITDA is defined as income (loss) before income taxes, net interest expense, depreciation and amortization of intangibles adjusted to exclude (i) non-cash charges relating to amortization of restricted stock awards and market value adjustment related to stock options, (ii) other non- recurring or "one-time" expenses as described in Note (1) above, (iii) loss on disposal of property and equipment as described in Note (2) above, and (iv) management fees and reimbursed expenses paid to First Atlantic (as defined herein). EBITDA is presented because it is a widely accepted financial indicator of a company's ability to service and/or incur debt. However, EBITDA should not be considered in isolation or as an alternative to income from operations or to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) and should not be construed as an indication of a company's operating performance or as a measure of liquidity. In addition, the Company's calculation of EBITDA may differ from that presented by certain other companies and thus may not be comparable to similarly titled measures used by other companies. (6) Depreciation and amortization excludes non-cash amortization of deferred financing and origination fees and debt discount amortization which are included in interest expense. (7) In calculating the ratio of earnings to fixed charges, earnings consist of (i) income (loss) before income taxes, plus (ii) fixed charges consisting of interest on indebtedness (including amortization of deferred financing fees), plus (iii) that portion of lease rental expense representative of the interest factor. Earnings were inadequate to cover fixed charges for fiscal 1993, 1996 and 1997 and the twenty-six weeks ended September 27, 1997 and September 26, 1998 by $1,468, $3,333, $14,614, $8,244 and $3,611, respectively. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with "Selected Historical Financial Data" and the consolidated financial statements and the notes thereto included elsewhere in this Prospectus. Unless the context requires 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. OVERVIEW 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 Credit Facility is secured by substantially all of the assets of Berry and matures prior to the maturity of the Notes; (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. Berry's ability to pay principal and interest on the Notes 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. However, if Berry cannot generate sufficient cash flow from operations to meet its obligations, then it 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 remedies could be effected on satisfactory terms, if at all. Consolidated earnings have been insufficient to cover fixed charges by $3.3 million, $14.6 million, $16.3 million and $4.2 million for fiscal year 1996, 1997, pro forma year ended December 27, 1997, and pro forma thirty-nine weeks ended September 26, 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 $3.3 million, $14.4 million, $16.4 million, and $4.3 million for fiscal 1996, fiscal 1997, pro forma year ended December 27, 1997, and pro forma thirty-nine weeks ended September 26, 1998. Holding expects that it will continue to experience consolidated net losses for the foreseeable future. RESULTS OF OPERATIONS 39 WEEKS ENDED SEPTEMBER 26, 1998 ("YTD") COMPARED TO 39 WEEKS ENDED SEPTEMBER 27, 1997 ("PRIOR YTD") NET SALES. Net sales increased $40.4 million, or 25%, to $205.1 million for the YTD from $164.7 million for the prior YTD with an approximate 2% decrease in net selling prices due mainly to competitive market conditions. The increase in net sales can be primarily attributed to the addition of Venture Packaging with YTD net sales of approximately $30.6 million, the addition of Norwich Moulders with YTD net sales of $3.6 million, and higher non-Venture Packaging container sales of $3.5 million. GROSS MARGIN. Gross margin increased by $18.4 million to $54.0 million for the YTD from $35.7 million for the prior YTD. This increase in gross margin can be attributed to the combined impact of the sales volume, productivity improvement initiatives and the cyclical impact of lower raw material costs. OPERATING EXPENSES. Selling expenses increased by $2.9 million to $10.9 million for the YTD from $8.0 million for the prior YTD principally as a result of expanded sales coverage related to the acquisition of Venture Packaging and increased product development and marketing expenses. General and administrative expenses increased by $4.7 million to $13.3 million YTD from $8.6 million for the prior YTD. The increase of $4.7 million is primarily attributable to increased patent litigation expenses and increased accrued employee profit sharing expense. YTD one-time transition expenses include $2.2 million related to the shutdown of the Reno and Anderson facilities and $1.0 million related to the 1997 Acquisitions. One-time transition expenses for the prior YTD were $2.0 million related to the 1997 acquisitions, and $0.8 million related to the Winchester and Reno plant consolidations. INTEREST EXPENSE. Interest expense increased $2.8 million to $26.5 million for the YTD compared to $23.7 million for the prior YTD primarily due to additional borrowings under the Credit Facility to support the 1997 and Norwich Moulders acquisitions. INCOME TAX. The Company's income tax expense was $0.3 million for the YTD compared to an income tax expense of $0.2 million in the prior YTD. The Company continues to operate in a net operating loss carryforward position for Federal income tax purposes. NET LOSS. Net loss for the YTD of $3.6 million improved $4.5 million from a net loss of $8.1 million for the prior YTD for the reasons discussed above. YEAR ENDED DECEMBER 27, 1997 COMPARED TO YEAR ENDED DECEMBER 28, 1996 NET SALES. Net sales increased 50.2% to $227.0 million in 1997, up $75.9 million from $151.1 million in 1996, which sales included an approximate 2% increase in net selling price due mainly to the impact of cyclical adjustments in the price of plastic resin. Container sales increased $30.1 million in 1997, primarily due to the continued market strength of base products and the Venture Packaging, Virginia Design and Container Industries Acquisitions. Net sales in the drink cup product line increased $23.8 million in 1997 as a result of the PackerWare Acquisition and a strong increase in existing drink cup business. Aerosol overcap net sales were relatively flat, decreasing approximately $2.6 million. The PackerWare Acquisition also brought the Company into the housewares product market, which provided an additional $17.5 million of net sales in 1997. Other product lines, including custom molded products and custom mold building, increased $7.1 million due to large custom programs that occurred in 1997. GROSS MARGIN. Gross margin increased $5.8 million or 14.1% from $40.9 million (27.1% of net sales) in 1996 to $46.7 million (20.6% of net sales) in 1997. The increase in gross margin is primarily attributed to increased sales volume as described above. The gross margin as a percent of net sales derived from the 1997 Acquisitions was approximately 10.6% compared to 23.8% for non-acquisition related sales. 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. These productivity improvements were offset by increased resin prices in 1997 and the transition expenses of the 1997 Acquisitions. OPERATING EXPENSES. Operating expenses during 1997 were $30.5 million (13.4% of net sales), compared with $23.7 million (15.7% of net sales) for 1996. Sales related expenses, including the cost of expanded sales coverage and higher product development and marketing expenses, increased $4.4 million, primarily as a result of the 1997 Acquisitions ($3.3 million). General and administrative expenses decreased $2.3 million in 1997 primarily as a result of the $2.8 million one- time compensation expense incurred in 1996 which related to the 1996 Transaction. Intangible amortization increased from $0.5 million in 1996 to $2.2 million for 1997, primarily as a result of the amortization of $1.6 million related to the 1997 Acquisitions. Other expense increased $2.5 million from $1.6 million for 1996 to $4.1 million in 1997. The 1997 Acquisitions resulted in a charge of $3.2 million in 1997 for start-up related expenses. The PackerWare Acquisition included a facility in Reno, Nevada, which was closed in 1997. Expense related to the closing of the Reno facility was $0.5 million in 1997. Plant closing expenses related to the Winchester, Virginia facility resulted in expenses of $0.4 million for 1997. Included in 1996 was a charge of $0.7 million of start-up related expenses associated with the Tri-Plas Acquisition and $0.9 million related to the Winchester plant closing. INTEREST EXPENSE AND INCOME. Net interest expense, including amortization of deferred financing costs for 1997, was $30.2 million (13.3% of net sales) compared to $20.1 million (13.3% of net sales) in 1996, an increase of $10.1 million. This increase is due to the full year impact of the 1996 Transaction, which occurred in June 1996. The 1996 Transaction included an offering of $105.0 million aggregate principal amount of the 1996 Notes, which bear interest at 12.5% annually. $35.6 million of the proceeds from the 1996 Notes were placed in escrow to pay the first three years of interest on the 1996 Notes. Interest is payable semi-annually on June 15 and December 15 of each year. Cash interest paid in 1997 was $29.9 million as compared to $19.7 million for 1996. Interest income for 1997 was $2.0 million, up from $1.3 million in 1996, also attributed to the full year impact of the 1996 Transaction. INCOME TAXES. During fiscal 1997, the Company incurred $0.1 million in Federal and state income tax compared to $0.2 million for fiscal 1996. The Company continues to operate in a net operating loss carryforward position for Federal income tax purposes. NET INCOME (LOSS) AND EBITDA. The Company recorded a net loss of $14.4 million in 1997 compared to a $3.3 million net loss in 1996 for the reasons stated above. YEAR ENDED DECEMBER 28, 1996 COMPARED TO YEAR ENDED DECEMBER 30, 1995 NET SALES. Net sales increased 7% to $151.1 million in 1996, up $10.4 million from $140.7 million in 1995. Sales of aerosol overcaps increased $6.1 million. This growth of 14% was mainly due to a strengthening of base business and the addition of new products. Container sales increased $9.7 million in 1996, due to the continued market strength of base products and the Tri- Plas Acquisition. Sales in the drink cup product line declined $3.2 million principally because a national promotion from a major marketer that was received in 1995 was not repeated in 1996. Other product lines, including custom molded products and custom mold building, decreased $2.2 million also due to a custom program that occurred in 1995 but was not repeated in 1996. Overall, prices declined approximately 2.0% from 1995 due to both market response to changing raw material prices and competitive market conditions. GROSS MARGIN. Gross margin increased $2.7 million or 7.1% from $38.2 million (27.2% of net sales) for 1995 to $40.9 million (27.1% of net sales) in 1996. The increase in gross margin is primarily attributed to increased sales volume. 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. The increase in operating efficiency offset the previously mentioned price declines, preserving the Company's gross margin as a percentage of sales. The Winchester, Virginia facility, which was added to the Company as part of the Sterling Products Acquisition and used primarily for the production of drink cups, was consolidated into other Berry locations late in 1996 to better utilize the operating leverage at other manufacturing facilities throughout the Company. OPERATING EXPENSES. Operating expenses during 1996 were $23.7 million (15.7% of net sales), compared with $17.7 million (12.6% of net sales) for 1995. Sales related expenses, including the cost of expanded sales coverage, and higher product development and marketing expenses, increased $1.3 million. General and administrative expenses increased $4.3 million, including $2.7 million due to a one-time compensation expense directly related to the 1996 Transaction, patent litigation expenses of $0.8 million and $0.6 million of additional expense as a result of the Tri-Plas Acquisition. Other expense increased $0.7 million from $0.9 million for 1995 to $1.6 million in 1996. Included in 1996 was a charge of $0.9 million for plant closing expenses related to the Winchester, Virginia facility, and $0.6 million of start-up related expense associated with the Tri-Plas Acquisition. Included in 1995 expense was a charge of $0.5 million due to the discontinued pursuit of a potential acquisition and $0.2 million of costs associated with the transfer of the Tri-Plas business. INTEREST EXPENSE AND INCOME. Net interest expense, including amortization of deferred financing costs for 1996, was $20.1 million (13.3% of net sales) compared to $13.4 million (9.5% of net sales) in 1995, an increase of $6.7 million. This increase is due to the 1996 Transaction, when the Company completed an offering of $105.0 million aggregate principal amount of the 1996 Notes which bear interest at 12.5% annually. Interest is payable semi-annually on June 15 and December 15 of each year. Cash interest paid in 1996 was $19.7 million as compared to $13.4 million for 1995. Interest income for 1996 was $1.3 million and 1995 was $0.6 million. INCOME TAXES. During fiscal 1996, the Company incurred $0.2 million in income tax compared to $0.7 million of income tax for fiscal 1995. NET INCOME (LOSS) AND EBITDA. The Company recorded a net loss of $3.3 million in 1996 compared to net income in 1995 of $6.3 million for the reasons stated above. INCOME TAX MATTERS Holding has unused operating loss carryforwards of $21.7 million for Federal income tax purposes which begin to expire in 2010. AMT credit carryforwards of approximately $2.0 million are available to Holding indefinitely to reduce future years' Federal income taxes. LIQUIDITY AND CAPITAL RESOURCES The Company has a credit facility with NationsBank, N.A. for a senior secured line of credit in an aggregate principal amount of $132.6 million (plus the UK Revolver (as defined herein) and the UK Term Loan (as defined herein)). The Credit Facility provides Berry with a $50.0 million revolving line of credit (plus 1.5 million under the UK Revolver), subject to a borrowing base formula, $63.7 million in term loan facilities (plus 4.5 million under the UK Term Loan), and $5.6 million in letters of credit to support Berry's and its subsidiaries' obligations under the Nevada Bonds. The indebtedness under the Credit Facility is guaranteed by Holding and the Company's subsidiaries. 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. At September 26, 1998, the last quarterly test date, the Company was in compliance with all of the financial covenants and tests tested on such date. See "Description of Certain Indebtedness - Credit Facility." The 1994 Indenture and the 1996 Indenture restrict, and the Indenture will restrict, the Company's ability to incur additional debt and contains other provisions which could limit the liquidity of the Company. At September 26, 1998, the Company had unused borrowing capacity under the Credit Facility's borrowing base of $40.4 million. Any additional indebtedness above the borrowing base requires approval from the Credit Facility's lenders. See "Description of Certain Indebtedness" and "Description of Notes." Net cash provided by operating activities was $28.6 million for the YTD, an increase of $19.0 million from the prior YTD. The increase is primarily the result of improved operating performance with income before depreciation and amortization increasing $9.7 million from the prior YTD. Net working capital changes (defined as accounts receivable, inventories, prepaid expenses, other receivables, accounts payable and accrued expenses) also increased for the YTD cash $7.3 million from the prior YTD. Net cash provided by operating activities was $14.2 million in 1997 as compared to $14.4 million in 1996. The decrease can be attributed to a reduction in accounts payable of approximately $3.5 million resulting from a discounting program with a key supplier offset partially by positive operating cash flows generated primarily from increased sales volume. YTD capital spending of $13.5 million included $7.4 million for molds and machines and $6.1 million for building and accessory equipment. Berry currently intends to finance future capital spending through cash flow from operations, existing cash balances and cash available under the Credit Facility's revolving line of credit. As of September 26, 1998, the Company had $5.1 million of committed capital projects. Capital expenditures in 1997 were $16.8 million, an increase of $3.2 million from $13.6 million in 1996. Included in capital expenditures during 1997 was $3.3 million relating to the addition of a new warehouse, production systems and offices necessary to support production operating levels throughout the Company. Capital expenditures also included investment of $8.7 million for molds, $1.2 million for molding machines, $1.4 million for printing equipment and $2.2 million for miscellaneous accessory equipment and systems. 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 1998 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. The Indenture and the 1994 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 the 1996 Notes. Based upon historical operating results, without a substantial increase in the operating results of Berry, management anticipates that it will be unable to generate sufficient cash flow to permit a dividend to Holding in an amount sufficient to meet Holding's interest payment obligations under the 1996 Notes which begin after the depletion in June 1999 of the escrow account that was established to pay such interest and the expiration of Holding's option to pay interest by issuing additional 1996 Notes. In that event, management anticipates that such obligations will only be met by refinancing the 1996 Notes or raising capital through equity offerings. No assurance can be given that then-current market conditions would permit Holding to consummate a refinancing or equity offering. At September 26, 1998, the Company's cash balance was $7.1 million, and the Company had unused borrowing capacity under the Credit Facility's borrowing base of approximately $40.4 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, such as those experienced during 1996, 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. IMPACT OF YEAR 2000 The Company has been working on modifying or replacing portions of its software since 1991 so that its computer systems will function properly with respect to dates in the Year 2000 and thereafter. Because the Company commenced this process early, the costs incurred to address this issue in any single year have not been significant. The Company's current business applications are Year 2000 compliant. Acquired businesses are converted to the Company's applications for Year 2000 compliance and consistency in applications and reporting. The most recent acquired business is expected to be converted to the Company's applications on January 4, 1999. Also, the Company is currently replacing significant portions of its primary information systems, principally because of the growth the Company has experienced in recent years due to acquisitions. Such replacement will allow the Company to continue to achieve its future growth plans and will be fully Year 2000 compliant. The Company anticipates that the implementation of such systems will occur before the Year 2000. The current estimated cost for replacing or fixing non-business application systems is $110,000. These systems include personal computers, postage machines, plant automation and telephone systems. Vendor survey responses are expected by the end of 1998. After review of the responses, a plan will be put in place by the end of March 1999 to minimize the risk of vendors' not meeting the Year 2000 deadline. To date, the Company is not aware of any external agent with a Year 2000 issue that would materially impact the Company's results of operations, liquidity or capital resources. However, the Company has no means of ensuring that external agents will be Year 2000 compliant. The inability of external agents to complete their Year 2000 resolution process in a timely fashion could materially impact the Company. The effect of non-compliance by external agents is not determinable. Management of the Company believes it has an effective program in place to resolve the Year 2000 issue in a timely manner. However, the Company could incur a material disruption, such as the inability to produce product, should significant suppliers not be Year 2000 ready. In addition, disruptions in the economy resulting from Year 2000 issues could also materially adversely affect the Company. The amount of potential liability and lost revenue cannot be reasonably estimated at this time. The Company currently has no contingency plans in place in the event it does not complete all phases of the Year 2000 program. The Company plans to evaluate the status of completion in March 1999 and determine whether such a plan is necessary. BUSINESS GENERAL The Company is a leading domestic manufacturer and marketer of plastic packaging products focused on four key markets: the aerosol overcap, rigid open-top container, drink cup and houseware markets. Within each of its markets, the Company concentrates on manufacturing 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 believes that it is the largest supplier of aerosol overcaps in the United States, with sales of over 1.4 billion overcaps in 1997. Berry also believes that it is the largest domestic supplier of thinwall, child-resistant and pry-off open top containers. Berry has utilized its national sales force and existing molding and printing capacity at multiple-plant locations to become a leader in the plastic drink cup market, which includes the Company's 32 ounce and 44 ounce DT cups, which fit in standard vehicle cup holders. The Company entered the housewares market (which includes the lawn and garden market) for semi-disposable plastic products, sold primarily to national retail marketers, as a result of the acquisition of PackerWare in January 1997. From fiscal 1993 to fiscal 1997, on a pro forma basis, the Company's net sales increased from $87.8 million to $270.6 million, representing a CAGR of 32%. The Company supplies aerosol overcaps for a wide variety of commercial and consumer products. Similarly, the Company's containers are used for packaging a broad spectrum of commercial and consumer products. The Company's plastic drink cups are sold primarily to fast food restaurants, convenience stores, stadiums, table top restaurants and retail. The Company also sells houseware products, primarily seasonal, semi-disposable housewares and lawn and garden items, to major retail marketers. Berry's customer base is comprised of over 4,000 customers with operations in a widely diversified range of markets. The Company's top ten customers accounted for approximately 19% of the fiscal 1997 net sales, and no customer accounted for more than 4% of the Company's net sales in fiscal 1997. The historical allocation of the Company's total net sales among its product categories is as follows:
FISCAL Thirty-nine Weeks Ended 1995 1996 1997 September 26, 1998 Aerosol overcaps 31% 33% 21% 17% Rigid open-top containers 51 53 49 54 Drink cups 12 9 17 15 Housewares -- -- 8 9 Other 6 5 5 5
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 market, an in-house graphic arts department and sophisticated printing and decorating capabilities permit the Company to offer extensive value-added decorating options. The Company's drink cup product line is strengthened by both the larger market share and diversification provided through its acquisition of PackerWare. Berry entered the housewares business with its acquisition of PackerWare, which has a reputation for outstanding quality and service among major retail marketers and for products which offer high value at a reasonable price to consumers. 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 which 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. AEROSOL OVERCAP MARKET The Company believes it is the leader in the U.S. market for aerosol overcaps. Approximately one-third of this market consists of national 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 end-use markets including spray paints, household and personal care products, insecticides and a myriad of 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 1997, no single overcap customer accounted for more than 3% 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, 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. The Company continues to develop new products in the overcap market, including the "spray-thru" line of aerosol overcaps. The Company's major competitor in this product line is Knight Engineering. In addition, a number of companies, including several of the Company's customers (e.g., S.C. Johnson, Cheseborough-Ponds and Reckitt & Colman), currently produce aerosol overcaps for their own use. CONTAINER MARKET The Company classifies its containers into six product lines: thinwall, child-resistant, pry-off, dairy, polypropylene and industrial. Management believes that the Company is the leading U.S. manufacturer in the thinwall, child-resistant and pry-off product lines. Management considers industrial containers to be a commodity market, characterized by little product differentiation and an absence of higher margin niches. The following table describes each of the Company's six product lines.
PRODUCT LINE DESCRIPTION SIZES MAJOR END MARKETS Thinwall Thinwalled, multi-purpose 6 oz. to 2 gallons Food, promotional products, toys containers with or without and a wide variety of other uses handles and lids Child-resistant Containers that meet Consumer 2 lbs. to 2 gallons Pool and other chemicals Product Safety Commission standards for child safety Pry-off Containers having a tight lid-fit 4 oz. to 2 gallons Building products, adhesives, and requiring an opening device other industrial uses Dairy Thinwall containers in 6 oz. to 5 lbs., Multi- Cultured dairy products including traditional dairy market sizes pack yogurt, cottage cheese, sour and styles cream and dips Polypropylene Usually clear containers in 6 oz. to 5 lbs. Food, deli, sauces, salads round, oblong or rectangular shapes Industrial Thick-walled, larger pails 2.5 to 5 gallons Building products, chemicals, designed to accommodate heavy paints, other industrial uses loads
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 1997. Management believes that no other container manufacturer in the U.S. has the breadth of product line offered by the Company. 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 nine plants strategically located throughout the United States and a dedication to high quality products and customer service. Product engineers, located in most of the Company's facilities, work with customers to design and commercialize new containers. 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 product design engineers to meet customers' needs. Finally, the quality and performance of the Company's dairy product line have enabled the Company to establish a solid and growing reputation in this market. In non-industrial containers, the Company's strongest competitors include Airlite, Sweetheart, Landis, Cardinal and Polytainers. The Company also produces commodity industrial pails for a market which is dominated by large volume competitors such as Letica, Plastican, NAMPAC and Ropak. The Company does not participate heavily in this market due to generally lower margins. The Company intends to selectively participate in the industrial container market when higher margin opportunities, equipment utilization or customer requirements make participation an attractive option. DRINK CUP MARKET The Company believes that it is a leading provider of 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. Injection-molded plastic cups range in size from 12 to 64 ounces, and often come with lids. Primary markets are fast food restaurants, convenience stores, stadiums, table top restaurants and retail. 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 DT 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 table top restaurant markets. The 64 ounce cup, which has been highly successful with convenience stores, is one of the Company's fastest growing drink cups. In addition to a full product line, Berry has the advantage of being the only supplier that can provide sophisticated printing and/or labeling capacity on a nation-wide basis; in 1997, five different plants molded and decorated drink cups. Major drink cup competitors include Packaging Resources Incorporated, Pescor Plastics and WNA (formerly Cups Illustrated). HOUSEWARES MARKET The Company entered the housewares market as a result of the PackerWare Acquisition in January 1997. The housewares market is a multi-billion dollar market. The Company's participation is limited to seasonal (spring and summer) semi-disposable plastic housewares and plastic lawn and garden products, which consist primarily of outdoor flower pots. Berry sells virtually all of its products in this market through major national retail marketers and national chain stores. PackerWare's historical position with this market was 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 fashion capabilities further enhance its position in this market. CUSTOM MOLDED PRODUCTS MARKET The Company also produces custom molded products by utilizing molds provided by its customers. Typically, the low cost of entry in the custom molded products market creates a commodity-like marketplace. However, the Company has focused its custom molding efforts on those customers that are cognizant of the Company's mold and product design expertise, superior color matching abilities and sophisticated multi-color printing capabilities. The majority of the Company's custom business in 1997 required specialized equipment and expertise, supporting the Company's desire to pursue higher volume-added niche opportunities in every market in which it participates. MARKETING AND SALES The Company reaches its large and diversified base of over 4,000 customers primarily through its direct field sales force, which has been expanded from 14 sales representatives in fiscal 1990 to 45 at the end of fiscal 1997. 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 augment its direct sales force. The Company believes that it has a reputation for 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. 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 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. Each of the Company's plants is managed by a local plant manager and is treated as a profit center. 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, to improve productivity, to maintain competitive advantages and to meet the asset-intensive nature of the injection molding business. The Company operates 175 molding machines ranging from 150 to 825 ton clamp capacity. The Company's largest overcap machines are capable of producing 10 thousand to 15 thousand aerosol overcaps per hour. Due to the wide variety of container and drink cup styles and sizes produced by the Company, production rates vary significantly. The Company owns over 750 active molds. 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 and Iowa Falls plants were approved for ISO 9000 certification in 1994, 1995 and 1996, respectively, which certifies compliance by a company with a set of shipping, trading and technology standards promulgated by the International Standardization Organization. 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 by plant as well as by product line. 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 based on ISO 9000 certification, a bar code based material management system and an integrated manufacturing system. SOURCES AND AVAILABILITY OF RAW MATERIALS The most important raw material purchased by the Company is plastic resin. The Company purchased approximately $68 million of resin in fiscal 1997 (excluding specialty resins), of which 74% was high density polyethylene ("HDPE"), 11% linear low density polyethylene and 15% polypropylene. The Company's purchasing strategy is to deal with only high-quality, dependable suppliers, such as Dow, Union Carbide, Chevron and Phillips. 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. See "Risk Factors - Possible Adverse Effect of Increase in Resin Prices" and "- Reliance on Certain Supplier." EMPLOYEES As of December 31, 1997, the Company had approximately 2,100 employees. No employees of the Company are covered by collective bargaining agreements. On February 5, 1998, the employees in Monroeville, Ohio voted to decertify the union in the facility. This facility was acquired as a result of the Venture Packaging Acquisition and was the Company's only plant with a collective bargaining agreement during 1997. 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. See "- Legal Proceedings" below. 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. Based upon a May 1998 compliance inspection, the Ohio Environmental Protection Agency ("OEPA") issued a Notice of Violation dated June 23, 1998 to Venture Packaging alleging that the Monroeville, Ohio facility failed to file certain reports required pursuant to the Federal Emergency Planning and Community Right-to-Know Act of 1986 (also known as "SARA Title III") for reporting years 1994 and 1995. The Company filed the subject reports in June 1998. The OEPA notice states that the alleged violations have been referred to its Division of Air Pollution Enforcement for review and that further enforcement action may be forthcoming. Based upon information currently available to the Company, the Company does not believe that any sanctions that might be imposed for the cited violations would have a material adverse effect on its business or financial condition. 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. The plastics industry in general, and the Company in particular, also are 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 permanently 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, is in compliance for the 1997 calendar year. However, in January 1998, California finally 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 which contain PCR or using containers with reduced weight. See "Risk Factors - Environmental Matters." PROPERTIES The following table sets forth the Company's principal facilities:
LOCATION ACRES SQUARE FOOTAGE USE Evansville, IN 12.4 397,000 Headquarters and manufacturing Henderson, NV 12.0 168,000 Manufacturing Iowa Falls, IA 14.0 101,000 Manufacturing Charlotte, NC 32.0 48,000 Manufacturing Lawrence, KS 19.3 423,000 Manufacturing York, PA 10.0 40,000 Manufacturing Suffolk, VA 14.0 102,000 Manufacturing Monroeville, OH 19.0 112,000 Manufacturing North Walsham, England 5.0 44,000 Manufacturing Woodstock, Illinois 11.7 98,000 Manufacturing
The Company believes that its property and equipment are well maintained, in good operating condition and adequate for its present needs. 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. The Company and/or Berry Sterling are currently litigating two lawsuits that involve United States Patent No. Des. 362,368 (the "'368 Patent"). The '368 Patent claims an ornamental design for a cup that fits an automobile cup holder. On September 21, 1995, Berry Sterling filed suit in United States District Court, Eastern District of Virginia, against Pescor Plastics, Inc. ("Pescor Plastics") for infringement of the '368 Patent. Pescor Plastics filed counterclaims seeking a declaratory judgment of invalidity and non-infringement, and damages under the Lanham Act. On December 28, 1995, Berry Sterling filed suit against Packaging Resources Incorporated ("Packaging Resources") in United States District Court, Southern District of New York, for infringement of the '368 Patent and seeking, among other equitable relief, damages in an unspecified amount. Packaging Resources has filed counterclaims against Berry Sterling alleging violation of the Lanham Act, tortious interference with Packaging Resources' prospective business advantage, consumer fraud and requesting a declaratory judgment that its "Drive-N-Go" cup does not infringe the '368 Patent. Packaging Resources has not specified the amount of damages sought. On February 25, 1998, after trial, a jury rendered a verdict in Berry Sterling's action against Pescor Plastics. The jury found the '368 Patent to be invalid on the grounds of functionality and obviousness and awarded Pescor $150,000 on its counterclaim. The jury also found that Pescor willfully infringed the '368 Patent and awarded Berry Sterling damages of $1.2 million, but this award was not included in the judgment because of the finding of the invalidity of the Patent. On March 11, 1998, Berry Sterling filed a motion with the Court to set aside the verdict of invalidity and the award on the counterclaim, which was subsequently denied by the Court. On April 29, 1998, Berry Sterling filed a Notice of Appeal of the Court's judgment and the denial of its motion to set aside the jury's verdict. The Court in the Packaging Resources case put the case on its suspense calendar pending the appeal in the Pescor Plastics case. MANAGEMENT DIRECTORS AND EXECUTIVE OFFICERS 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) 51 Chairman and Director Company and Holding Martin R. Imbler(1)(4) 50 President, Chief Executive Company Officer and Director President and Director Holding Ira G. Boots 44 Executive Vice President, Company Operations and Director James M. Kratochvil 41 Executive Vice President, Chief Company Financial Officer, Treasurer and Secretary Executive Vice President, Chief Holding Financial Officer and Secretary R. Brent Beeler 45 Executive Vice President, Sales Company and Marketing Randy Hobson 32 Vice President - Sales and Company Marketing Ruth Richmond 35 Vice President - Planning and Company Administration and Assistant Secretary Assistant Secretary Holding David Weaver 35 Vice President and Plant Manager Company - Lawrence Fredrick A. Heseman 45 Vice President and Plant Manager Company - Evansville Bruce J. Sims 48 Vice President - Sales and Company Marketing, Housewares George A. Willbrandt 53 Vice President - Sales and Company Marketing Joseph S. Levy(2)(3) 30 Vice President, Assistant Company Secretary and Director Vice President, Assistant Holding Secretary and Director David M. Clarke 47 Director Company and Holding Lawrence G. Graev(2)(3) 53 Director Company and Holding Donald J. Hofmann, Jr.(1)(2)(3)(4) 40 Director Company and Holding Mathew J. Lori 34 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. 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. Mr. Buaron is also a director of CFP Holdings, Inc., a processed meat 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. Mr. Imbler is also a Director of Portola Packaging, Inc., a manufacturer of closures used in the dairy industry. IRA G. BOOTS has been Executive Vice President, Operations, and a Director of the Company since April 1992. 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 was promoted to Executive Vice President, Chief Financial Officer, Secretary and Treasurer of the Company in 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 was promoted to Executive Vice President, Sales and Marketing in February, 1996. He formerly served as 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. RANDY HOBSON has been Vice President - Sales and Marketing of the Company since June 1998. Mr. Hobson was Marketing Manager - Containers for the Company from November 1997 to June 1998. Prior to that, he was a Regional Sales Manager from 1992 to November 1997. Mr. Hobson joined Old Berry in 1988. RUTH RICHMOND has been Assistant Secretary of Holding and the Company since April 1998. Ms. Richmond has been Vice President, Planning and Administration of the Company since January 1995. From January 1994 to December 1994, Ms. Richmond was Vice President and Plant Manager-Henderson. Ms. Richmond was Plant Manager-Henderson from February 1993 to January 1994 and Assistant General Manager-Henderson from February 1991 to February 1993. Ms. Richmond joined the accounting department of Old Berry in 1986. DAVID WEAVER has been Vice President and Plant Manager-Lawrence of the Company since January 1997. From January 1993 to January 1997, he was Vice President and Plant Manager-Iowa Falls. From February 1992 to January 1993, Mr. Weaver was Plant Manager-Iowa Falls and, prior to that, he was Maintenance Engineering Supervisor from July 1990 to February 1992. Mr. Weaver was a Project Engineer from January 1989 to July 1990 for Old Berry. FREDRICK A. HESEMAN was promoted to Vice President and Plant Manager-Evansville of the Company in December 1997. From October 1996 to December 1997, Mr. Heseman was Plant Manager-Evansville, and prior to that, he was Engineering Manager from December 1990 to October 1996. Mr. Heseman was employed by Old Berry from June 1987 to December 1990 as Engineering Manager. BRUCE J. SIMS has been 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. Mr. Sims was Executive Vice President of MKM Distribution Company from 1985 to 1990. GEORGE A. WILLBRANDT was promoted to Vice President, Sales and Marketing of the Company in April 1997. He formerly served as Vice President, Sales and Marketing of Berry Sterling since 1995. Prior to that, he was President and co-owner of Sterling Products, which he founded in 1983. 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 a Vice President of First Atlantic since December 1994. From 1991 to December 1994, Mr. Levy was an Associate at First Atlantic. DAVID M. CLARKE has been a Director of Holding and the Company since June 1996. Mr. Clarke is a Managing Director with Aetna, Inc., a private equity investment group and, prior to that, he had been a Vice President in the Investment Group of Aetna Life Insurance Company from 1988 to 1996. LAWRENCE G. GRAEV has been a Director of the Company and Holding since August 1995. Mr. Graev is the Chairman of 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. DONALD J. HOFMANN, JR. has been a Director of Holding and the Company since June 1996. Mr. Hofmann has been a General Partner of Chase Capital Partners since 1992. Prior to that, he was head of MH Capital Partners Inc., the equity investment arm of Manufacturers Hanover. MATHEW J. LORI has been a Director of the Company and Holding since October 1996. Mr. Lori has been a Principal with 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. The New Stockholders Agreement contains provisions regarding the election of directors. See "Certain 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. 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 1997, 1996 and 1995: 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 1997 $ 307,396 $ 87,623 - $ 1,520 President and Chief Executive Officer 1996 292,078 128,993 8,472 595,848 1995 275,625 157,500 - 1,424 Douglas E. Bell(2) 1997 154,485 72,868 - 1,520 Executive Vice President, Sales and Marketing 1996 145,735 94,205 5,214 239,335 1995 137,525 124,428 - 1,424 Ira G. Boots 1997 151,691 72,868 - 1,520 Executive Vice President, Operations 1996 145,735 94,205 5,214 239,335 1995 137,525 124,428 - 1,424 James M. Kratochvil 1997 119,459 56,307 - 1,520 Executive Vice President, Chief Financial 1996 112,614 72,796 3,259 120,427 Officer, Treasurer and Secretary 1995 106,270 96,150 - 1,424 R. Brent Beeler 1997 125,973 60,554 - 1,520 Executive Vice President, Sales and Marketing 1996 121,108 72,796 3,259 120,427 1995 106,270 96,150 - 1,424
________________________ (1)Amounts shown reflect contributions by the Company under the Company's 401(k) plan and payments made in fiscal 1996 under a one-time deferred bonus award plan. See "Certain Transactions - Management." (2)Mr. Bell resigned from the Company in June 1998. 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 27, 1997. 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 2,541/5,931 $55,902/$130,482 Douglas E. Bell 1,564/3,650 34,408/80,300 Ira G. Boots 1,564/3,650 34,408/80,300 James M. Kratochvil 977/2,282 21,494/50,204 R. Brent Beeler 977/2,282 21,494/50,204
_______________________ (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 27, 1997. (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 1997 was $307,396. 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 and Beeler (each, an "Employment Agreement" and, collectively, the "Employment Agreements"), each of which expires on June 30, 2001. The Employment Agreements provided for fiscal 1997 base compensation of $151,691, $119,459 and $125,973, 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, and (ii) certain benefits under applicable incentive compensation plans. Each Employment Agreement also includes customary noncompetition, nondisclosure and nonsolicitation provisions. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company established the Compensation Committee, comprised of Messrs. Buaron, Imbler and Hoffman, in October 1996. The annual salary and bonus paid to Messrs. Imbler, Bell, Boots, Kratochvil and Beeler for fiscal 1997 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 $771,200 for fiscal 1997, $787,600 for fiscal 1996 and $816,900 for fiscal 1995. First Atlantic also received a $100,000 advisory fee in both March and December 1995 for originating, structuring and negotiating the Sterling Products Acquisition and the Tri-Plas Acquisition, respectively. In connection with the 1996 Transaction, the FACL Management Agreement was amended to provide for 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. Also in connection with the 1996 Transaction, Holding paid a fee of $1,250,000 plus reimbursement for out-of-pocket expenses to First Atlantic for advisory services, including originating, structuring and negotiating the 1996 Transaction. First Atlantic received advisory fees of approximately $287,500 and $28,700 in January 1997 for originating, structuring and negotiating the PackerWare Acquisition and the Container Industries Acquisition, respectively. First Atlantic received advisory fees of approximately $117,900 and $531,600 in May 1997 and August 1997, respectively, for originating, structuring and negotiating the Virginia Design Acquisition and the Venture Packaging Acquisition, respectively. 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 Norwich Acquisition and the Knight Acquisition, respectively. See "Certain 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, the $1,250,000 fee paid by Holding to First Atlantic in connection with the 1996 Transaction or any of the fees paid with respect to the acquisitions described above. 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. See "Certain Transactions." Atlantic Equity Partners, L.P. (the "AEP Fund"), a stockholder of Holding prior to the consummation of the 1996 Transaction, received 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 AEP Fund to provide certain financial and management consulting services for which it receives annual fees. First Atlantic and the AEP 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 AEP Fund. Mr. Buaron is the sole shareholder of Buaron Capital Corporation ("Buaron Capital"). Buaron Capital is the managing and sole general partner of AEA. By virtue of their direct and indirect ownership interests in the AEP Fund, Mr. Levy and Buaron Capital are entitled to receive a portion of the proceeds from the sale of the equity interests in Holding ($178,000 and $4,672,000, respectively). See "Certain Transactions." In connection with the 1996 Transaction, Mr. Imbler, a director of the Company and Holding, and Messrs. Bell and Boots, a former director and director of the Company, respectively, received approximately $5.9 million, $2.5 million and $2.4 million, respectively, from their sale of certain equity interests in Holding. In connection with the 1994 Transaction, the Company paid a $50.0 million dividend on its common stock to Holding, and Holding distributed that amount to its holders of equity interests. In connection therewith, Holding agreed to pay cash bonuses, upon the occurrence of certain events, to the members of management who held options under Holding's 1991 Stock Option Plan in amounts equal to the amounts they would have been entitled to had the shares of common stock underlying their unvested options been outstanding at the time of the declaration of the $50.0 million dividend by Holding. As a result of the 1996 Transaction, such bonuses were paid to Messrs. Imbler, Bell and Boots in the amounts of approximately $594,000, $238,000 and $238,000, respectively. See "Certain Transactions." In connection with the 1996 Transaction, Chase Securities, Inc. ("Chase Securities"), an affiliate of CVCA and Messrs. Hofmann and Lori, received a fee of $500,000 for arranging the sale of $15.0 million of Holding's Common Stock to certain of the Common Stock Purchasers and the sale of $15.0 million of Holding's Preferred Stock to CVCA. Chase Manhattan Investment Holdings, Inc. ("CMIHI"), an affiliate of Chase Securities and Messrs. Hofmann and Lori, received approximately $13.6 million from the sale of equity interests of Holding in the 1996 Transaction. 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 51,620. 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. 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 27, 1997, there were outstanding options to purchase an aggregate of 47,708 shares of Class B Nonvoting Common Stock to 52 employees of the Company, at an exercise price between $100 and $108 per share. Of that amount, options to purchase an aggregate of 25,418 shares have been issued to the Named Executive Officers in October 1996, at an exercise price of $100 per share, including 8,472 to Mr. Imbler, 5,214 to each of Messrs. Bell and Boots, and 3,259 to each of Messrs. Beeler and Kratochvil. PRINCIPAL STOCKHOLDERS 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 officers 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 Name and Address of Voting of Beneficial Owner Class A Class B Common Stock Class A Class B Class C Common Stock (Fully- Diluted) Atlantic Equity Partners - 128,142 54.3% - 3,385 11,470 21.4% International II, L.P.(2) Chase Venture Capital Associates, 52,000 5,623 (4) 23.8 148,000 17,837 (4) - 33.4 L.P.(3) BPC Equity, LLC(5) 31,200 - 13.2 88,800 - - 17.9 Roberto Buaron(6) - 128,142 54.3 - 3,385 11,470 21.4 Martin R. Imbler - 5,494 2.3 - 18,177 (7) 1,795 4.7 Joseph S. Levy(8) - 42 * - 118 14 * David M. Clarke(9) 31,200 - 13.2 88,800 - - 17.9 Lawrence G. Graev(10) - - - - - - - Donald J. Hofmann, 52,000 5,623 (4) 23.8 148,000 17,837 (4) - 33.4 Jr.(11) Mathew J. Lori(12) 52,000 5,623 (4) 23.8 148,000 17,837 (4) - 33.4 Douglas E. Bell - - - - 3,423 - * Ira G. Boots - 2,280 1.0 - 8,054(13) 744 2.2 James M. Kratochvil - 1,196 * - 4,381(14) 391 * R. Brent Beeler - 1,196 * - 4,381(15) 391 * All officers and directors as 83,200 146,071 94.9 236,800 68,014 15,491 83.9 a group (17 persons)
____________________________ *Less than one percent. (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 "Holding 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 Holding Preferred Stock, 600,000 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 380 Madison Avenue, 12th Floor, New York, New York 10017. (4)Represents warrants to purchase such shares of common stock held by CVCA which are exercisable within 60 days of the date of this Prospectus. (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 2,541 options granted to Mr. Imbler, which are exercisable within 60 days of the date of this Prospectus. (8)Address is c/o First Atlantic Capital, Ltd., 135 East 57th Street, New York, New York 10022. (9)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. (10)Address is c/o O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New York, New York 10112. (11)Address is c/o Chase Capital Partners, 380 Madison Avenue, 12th Floor, New York, New York 10017. Represents shares owned by CVCA. Mr. Hofmann is a General Partner of Chase Capital Partners, which is the private equity investment arm of Chase Manhattan Corporation, which is an affiliate of CVCA. Mr. Hofmann disclaims any beneficial ownership of the shares of Holding Common Stock held by CVCA. (12)Address is c/o Chase Capital Partners, 380 Madison Avenue, 12th Floor, New York, New York 10017. Represents shares owned by CVCA. Mr. Lori is a Principal with Chase Capital Partners, which is the private equity investment arm of Chase Manhattan Corporation, which is an affiliate of CVCA. Mr. Lori disclaims any beneficial ownership of the shares of Holding Common Stock held by CVCA. (13)Includes 1,564 options granted to Mr. Boots which are exercisable within 60 days of the date of this Prospectus. (14)Includes 977 options granted to Mr. Kratochvil which are exercisable within 60 days of the date of this Prospectus. (15)Includes 977 options granted to Mr. Beeler which are exercisable within 60 days of the date of this Prospectus. CERTAIN 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 $771,200 for fiscal 1997, $787,600 for fiscal 1996 and $816,900 for fiscal 1995. First Atlantic also received a $100,000 advisory fee in both March and December 1995 for originating, structuring and negotiating the Sterling Products Acquisition and the Tri-Plas Acquisition, respectively. In connection with the 1996 Transaction, the FACL Management Agreement was amended to provide for 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. Also in connection with the 1996 Transaction, Holding paid a fee of $1,250,000 plus reimbursement for out-of-pocket expenses to First Atlantic for advisory services, including originating, structuring and negotiating the 1996 Transaction. First Atlantic received advisory fees of approximately $287,500 and $28,700 in January 1997 for originating, structuring and negotiating the PackerWare Acquisition and the Container Industries Acquisition, respectively. First Atlantic received advisory fees of approximately $117,900 and $531,600 in May 1997 and August 1997, respectively, for originating, structuring and negotiating the Virginia Design Acquisition and the Venture Packaging Acquisition, respectively. 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 Norwich Acquisition and the Knight Acquisition, respectively. 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 $1,250,000 fee paid by Holding to First Atlantic in connection with the 1996 Transaction or any 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. The AEP Fund, a stockholder of Holding prior to the consummation of the 1996 Transaction, received 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 AEP Fund to provide certain financial and management consulting services for which it receives annual fees. First Atlantic and the AEP Fund have completely distinct ownership and equity structures. AEA is the sole general partner of the AEP Fund. Mr. Buaron is the sole shareholder of Buaron Capital, and Buaron Capital is the managing and sole general partner of AEA. By virtue of their direct and indirect ownership interests in the AEP Fund, Mr. Levy and Buaron Capital are entitled to receive a portion of the proceeds from the sale of the equity interests in Holding ($178,000 and $4,672,000, respectively). MANAGEMENT In connection with the 1996 Transaction, Messrs. Imbler, Bell, Boots, Kratochvil and Beeler received approximately $5.9 million, $2.5 million, $2.4 million, $1.3 million and $1.3 million, respectively, from their sale of certain equity interests in Holding. In connection with the 1994 Transaction, the Company paid a $50.0 million dividend on its common stock to Holding, and Holding distributed that amount to its holders of equity interests. In connection therewith, Holding agreed to pay cash bonuses, upon the occurrence of certain events, to the members of management who held options under Holding's 1991 Stock Option Plan in amounts equal to the amounts they would have been entitled to had the shares of common stock underlying their unvested options been outstanding at the time of the declaration of the $50.0 million dividend by Holding. As a result of the 1996 Transaction, such bonuses were paid to Messrs. Imbler, Bell, Boots, Kratochvil and Beeler in the amounts of approximately $594,000, $238,000, $238,000, $119,000 and $119,000, respectively. STOCKHOLDERS AGREEMENTS In connection with the 1996 Transaction, Holding entered into a Stockholders Agreement dated as of June 18, 1996 (the "New Stockholders Agreement") with the Common Stock Purchasers, certain Management Stockholders (as defined herein) and, for limited purposes thereunder, the Preferred Stock Purchasers. The New Stockholders Agreement grants the Common Stock Purchasers certain rights and obligations, including the following: (i) until the occurrence of certain events specified in the New 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) CVCA will have the right to designate two directors (who are currently Messrs. Hofmann and Lori); and (D) the institutional holders (excluding International and CVCA) 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 CVCA, to cause the initial public offering of equity securities of Holding or a sale of Holding subsequent to the fifth anniversary of the closing of the 1996 Transaction 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 the sixth anniversary of the closing of the 1996 Transaction. Provisions under the New Stockholders Agreement also (i) prohibit Holding from taking certain actions without the consent of holders of a majority of voting stock held by CVCA 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 New Stockholders Agreement). Pursuant to the New Stockholders Agreement, under certain circumstances the Preferred Stock Purchasers (and their transferees) have tag-along rights with respect to the 1996 Warrants and the Holding Common Stock issuable upon exercise of the 1996 Warrants. 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, CVCA and the Institutional Holders (as defined in the New Stockholders Agreement) of more than 50% of the aggregate amount of securities held by them immediately following the closing of the 1996 Transaction. The New Stockholders Agreement grants registration rights, under certain circumstances and subject to specified conditions, to the Common Stock Purchasers. International and CVCA 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 CVCA) have the right, on one occasion, to demand registration, at Holding's expense, of their shares of Holding Common Stock. The New 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 New 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) the fifth anniversary of the closing of the 1996 Transaction if an underwritten public offering of equity securities of Holding resulting in gross proceeds of at least $20.0 million occurs prior to such fifth anniversary and (B) the occurrence of such underwritten public offering that occurs subsequent to such fifth anniversary of the closing of the 1996 Transaction; (ii) the twentieth anniversary of the closing of the 1996 Transaction; and (iii) a sale of Holding. In addition, the New 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. 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 and Beeler (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. CHASE SECURITIES, INC. In connection with the 1996 Transaction, Chase Securities, an affiliate of CVCA and Messrs. Hofmann and Lori, who are members of the Board of Directors of Holding and the Company, received a fee of $500,000 for arranging the sale of $15.0 million of Holding's Common Stock to certain of the Common Stock Purchasers and the sale of $15.0 million of Holding Preferred Stock to CVCA. CMIHI, an affiliate of Chase Securities and Messrs. Hofmann and Lori, received approximately $13.6 million from the sale of equity interests of Holding in the 1996 Transaction. LEGAL SERVICES Mr. Graev is the Chairman of 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. See "Legal Matters." TRANSACTIONS WITH AFFILIATES The 1996 Indenture, the New Stockholders Agreement, the 1994 Indenture and the Credit Facility restrict, and the Indenture will restrict, the Company's and its affiliates' ability to enter into transactions with their affiliates, including their officers, directors and principal stockholders. DESCRIPTION OF CERTAIN INDEBTEDNESS HOLDING 1996 NOTES On June 18, 1996, Holding, as part of a recapitalization, 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. Interest on the 1996 Notes 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. In connection with the 1996 Notes, $35.6 million was placed in escrow, which has been invested in U.S. government securities, to pay three years' interest on the notes. Pending disbursement, the trustee under the 1996 Indenture will have a first priority lien on the escrow account for the benefit of the holders of the 1996 Notes. Funds may be disbursed from the escrow account only to pay interest on the 1996 Notes and, upon certain repurchases or redemptions of the 1996 Notes, to pay principal of and premium, if any, thereon. The balance in the escrow account as of December 27, 1997 was $18.9 million. The 1996 Notes rank senior in right of payment to all existing and future subordinated indebtedness of Holding, including Holding's subordinated guarantee of the 1994 Notes and the 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 Credit Facility, the Nevada Bonds and the South Carolina Bonds. BERRY 1994 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 and 100,000 warrants to purchase 1.13237 shares of Class A Common Stock, $.00005 par value, of Holding. The 1994 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. The 1994 Notes are unconditionally guaranteed on a senior subordinated basis by the Guarantors. The net proceeds to Berry from the sale of the 1994 Notes, after expenses, were $93.0 million. Berry is not required to make mandatory redemption or sinking fund payments with respect to the 1994 Notes. Subsequent to April 15, 1999, the 1994 Notes may be redeemed at the option of Berry, in whole or in part, at redemption prices ranging from 106.125% in 1999 to 100% in 2002 and thereafter. Upon a change in control, as defined in the 1994 Indenture, each holder of 1994 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 rank PARI PASSU with the Notes and PARI PASSU with or senior in right of payment to all existing and future subordinated indebtedness of Berry. The 1994 Notes rank junior in right of payment to all existing and future Senior Indebtedness of Berry, including borrowings under the Credit Facility, the Nevada Bonds and the South Carolina Bonds. The 1994 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. CREDIT FACILITY Concurrent with the Venture Packaging Acquisition, the Company amended its then existing financing and security agreement (the "Security Agreement") with NationsBank, N.A. for a senior secured line of credit to increase the commitments thereunder to an aggregate principal amount of $127.2 million (the "Credit Facility"). Concurrently with the Norwich Acquisition, the Credit Facility was amended and increased to $132.6 million (plus an additional revolving credit facility of 1.5 million (the "UK Revolver") and a term loan facility of 4.5 million (the "UK Term Loan"), each for NIM Holdings and Norwich). The Credit Facility currently bears a weighted average interest rate of approximately 7.6%. The indebtedness under the Credit Facility is guaranteed by Holding and substantially all of its subsidiaries. The Credit Facility replaced the facility previously provided by Fleet Capital Corporation. The Credit Facility provides the Company with (i) a $50.0 million revolving line of credit, subject to a borrowing base formula and a reserve for certain obligations under the South Carolina Bonds, (ii) the UK Revolver, subject to a borrowing base, (iii) a $63.7 million term loan facility, (iv) the UK Term Loan and (v) a $5.6 million standby letter of credit facility to support the Company's and its subsidiaries' obligations under the Nevada Bonds. The Credit Facility also provides for a $5.4 million term loan facility, the proceeds of which were used to retire in July 1998 the Company's and its subsidiaries' obligations under the Iowa Bonds, on which Berry Iowa had agreed, pursuant to a Loan and Trust Agreement with The City of Iowa Falls, Iowa, to pay amounts sufficient to pay principal, interest and any premium with respect to the Iowa Bonds. Also, the Credit Facility provides a term loan facility to support the Company's and its subsidiaries' obligations under the South Carolina Industrial Development Bonds. In August 1998, in conjunction with the closing and sale of the Anderson, South Carolina Facility, the Bonds were paid by the Company. The difference between the repayment of the development bonds and other related liabilities and the net proceeds from the sale of the facility of approximately $3.0 million has been financed with borrowing under the term loan facility. The Company borrowed all amounts available under the term loan facility and the UK Term Loan to finance the PackerWare Acquisition, the Virginia Design Acquisition, the Venture Packaging Acquisition and the Norwich Acquisition. At September 26, 1998, the Company had unused borrowing capacity under the Credit Facility's revolving line of credit of approximately $40.4 million. 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 Security Agreement. The term loan facility requires periodic payments, varying in amount, through the maturity of the facility. After giving effect to the Offering and the application of the proceeds therefrom, such periodic payments will aggregate $3.8 million for the remainder of fiscal 1998 and $18.9 million for fiscal 1999. 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 0.50%) plus an applicable margin of 0.50% or (ii) LIBOR (adjusted for reserves) plus an applicable margin of 2.0%, at the Company's option. Following receipt of the quarterly financial statements, the agent under the Credit Facility has the option to 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 LIBOR (adjusted for reserves) plus 2.50%. The Credit Facility contains various covenants which 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. NEVADA INDUSTRIAL REVENUE BONDS The Company is party to a Financing Agreement with the City of Henderson, Nevada Public Improvement Trust (the "Nevada Issuer"), pursuant to which the Company has agreed to pay to the Nevada Issuer amounts sufficient to pay principal, interest and any premium on the Nevada Industrial Revenue Bonds (the "Nevada Bonds"). The Nevada Bonds bear interest at a variable rate (4.6% at December 27, 1997 and December 28, 1996), require annual principal payments of $0.5 million on each April 1 until maturity, are collateralized by irrevocable letters of credit issued by NationsBank under the Credit Facility and mature in April 2007. DESCRIPTION OF NOTES GENERAL The Old Notes were, and the New Notes will be, issued pursuant to an Indenture (the "Indenture") between the Company and United States Trust Company of New York, as trustee (the "Trustee"), and the Old Notes were, and the New Notes will be, guaranteed, on a senior subordinated basis, by the Guarantors. The terms of the New Notes are identical in all material respects to the Old Notes, except that the New Notes have been registered under the Securities Act and, therefore, will not bear legends restricting their transfer and will not contain certain provisions providing for an increase in the interest rate on the Old Notes under certain circumstances relating to the Registration Rights Agreement, which provisions will terminate upon the consummation of the Exchange Offer. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Notes are subject to all such terms, and Holders of Notes are referred to the Indenture and the Trust Indenture Act for a complete statement thereof. The following summary of certain provisions of the Indenture does not purport to be complete and is qualified in its entirety by reference to the Indenture, including the definitions therein of certain terms used below. A copy of the Indenture is available as set forth under "Available Information." The definitions of certain terms used in the following summary are set forth below under "- Certain Definitions." The Notes rank PARI PASSU with the 1994 Notes and PARI PASSU with or senior in right of payment to all existing and future subordinated Indebtedness of the Company. The Notes rank junior in right of payment to all existing and future Senior Indebtedness of the Company, including borrowings under the Credit Facility, the Nevada Bonds and the South Carolina Bonds. Each Guarantor's Note Guarantee ranks PARI PASSU with or senior in right of payment to all existing and future subordinated Indebtedness of such Guarantor and ranks junior in right of payment to all existing and future Senior Indebtedness of such Guarantor, including such Guarantor's Guarantee of borrowings under the Credit Facility, the Nevada Bonds and the South Carolina Bonds. The terms of the Notes are identical in all material respects to the terms of the 1994 Notes, except that the 1994 Notes have a priority upon the payment of proceeds pursuant to an Asset Sale. Since the Notes will be issued pursuant to a separate indenture from the 1994 Notes, holders of the Notes will vote as a separate class from holders of the 1994 Notes. PRINCIPAL, MATURITY AND INTEREST The Notes are unsecured obligations of the Company, limited in aggregate principal amount to $100.0 million, of which $25.0 million was issued in the Offering, and will mature on April 15, 2004. Interest on the Notes accrues at the rate of 12 1/4% per annum and will be payable semi-annually in arrears on October 15 and April 15, commencing on October 15, 1998, to Holders of record on the immediately preceding October 1 and April 1. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance. Additional Notes ("Additional Notes") may be issued from time to time after the Offering, subject to the provisions of the Indenture described below under the caption "-Certain Covenants - Incurrence of Indebtedness and Issuance of Disqualified Stock." The Notes and any Additional Notes subsequently issued will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months. Principal and interest and Liquidated Damages, if any, on the Notes is payable at the office or agency of the Company maintained for such purpose within the City and State of New York or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the register of Holders of Notes. Until otherwise designated by the Company, the Company's office or agency in New York will be the office of the Trustee maintained for such purpose. The Notes will be issued in denominations of $1,000 and integral multiples thereof. OPTIONAL REDEMPTION The Notes are not redeemable at the Company's option prior to April 15, 1999. Thereafter, the Notes will be subject to redemption at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the applicable redemption date, if redeemed during the twelve- month period beginning on April 15 of the years indicated below:
YEAR Percentage 1999 106.125% 2000 104.083% 2001 102.042% 2002 and thereafter 100.000%
MANDATORY REDEMPTION The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes. REPURCHASE AT THE OPTION OF HOLDERS CHANGE OF CONTROL Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase (the "Change of Control Payment"). Within 10 days following any Change of Control, the Company will mail a notice to each Holder stating: (1) that the Change of Control Offer is being made pursuant to the covenant entitled "Change of Control" and that all Notes tendered will be accepted for payment; (2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"); (3) that any Note not tendered will continue to accrue interest; (4) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date; (5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have such Notes purchased; and (7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes in connection with a Change of Control. On the Change of Control Payment Date, the Company will, to the extent lawful, (1) accept for payment Notes or portions thereof tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the Notes or portions thereof tendered to the Company. The Paying Agent will promptly mail to each Holder of Notes so accepted the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; PROVIDED that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. Prior to making the Change of Control Payment, but in any event within 90 days following a Change of Control, the Company shall either repay all outstanding Designated Senior Indebtedness or obtain the requisite consents, if any, under all agreements governing outstanding Designated Senior Indebtedness to permit the repurchase of Notes required by this covenant. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. As noted above, one of the events that constitutes a Change of Control under the Indenture is a sale, lease or transfer of all or substantially all of Holding's or the Company's assets. The Indenture is governed by New York law, and there is no established quantitative definition under New York law of "substantially all" of the assets of a corporation. Accordingly, if Holding or the Company were to engage in a transaction in which it disposed of less than all of their respective assets, a question of interpretation could arise as to whether such disposition was "substantially all" of their respective assets and whether the Company was required to make a Change of Control Offer. In such cases, the Company might not be required to make a Change of Control Offer and would be permitted, subject to the restrictions contained in the Indenture, including with respect to Restricted Payments, to find alternative uses for the proceeds of such sale. Pursuant to the terms of the Indenture, however, the Company could be required to make an Asset Sale Offer in such circumstances. Neither the Board of Directors of Holding nor the Trustee may waive the operation of the Change of Control covenant. The Credit Facility provides that events similar to a Change of Control will constitute an event of default thereunder. Upon the occurrence of an event of default under the Credit Facility, all amounts outstanding thereunder may become due and payable. All indebtedness of the Company under the Credit Facility, which may be up to $132.6 million (plus 1.5 million under the UK Revolver and 4.5 million under the UK Term Loan), is Senior Indebtedness. Accordingly, in the event of an event of default under the Credit Facility, including with respect to an event similar to a Change of Control, the subordination provisions contained in the Indenture will prohibit the Company (if the holders of Senior Indebtedness issue a notice to the Company to such effect) from making any payment on the Notes until such event of default is cured or upon the expiration of 179 days (unless the holders of Senior Indebtedness accelerate the maturity of the Senior Indebtedness). See "- Subordination." The provisions of the Indenture may not afford Holders of Notes the right to require the Company to repurchase the Notes in the event of a highly leveraged transaction or certain transactions with Holding's management or affiliates, including a reorganization, restructuring, merger or similar transaction (including, in certain circumstances, an acquisition of Holding by its management or affiliates) involving Holding that may adversely affect Holders of Notes, if such transaction is not a transaction defined as a "Change of Control." A transaction involving Holding's management or affiliates, or a transaction involving a recapitalization of Holding, may result in a Change of Control if it is the type of transaction specified by such definition. The Change of Control purchase feature of the Notes may in certain circumstances make more difficult or discourage a takeover of Holding, and, thus, the removal of incumbent management. The Change of Control purchase feature, however, is not the result of management's knowledge of any specific effort to accumulate Holding's stock or to obtain control of Holding by means of a merger, tender offer, solicitation or otherwise, or part of a plan by management to adopt a series of anti-takeover provisions. Instead, the Change of Control purchase feature is a result of negotiations between the Company and the Initial Purchaser. Management has no present intention to engage in a transaction involving a Change of Control, although it is possible that Holding would decide to do so in the future. Subject to the limitations discussed below, Holding could, in the future, enter into certain transactions including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect Holding's capital structure or credit ratings. "CHANGE OF CONTROL" means the occurrence of any of the following: (i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Holding's or the Company's assets to any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than the Principal and his Related Parties (as defined herein)), (ii) the adoption of a plan relating to the liquidation or dissolution of Holding or the Company, (iii) the acquisition by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than by the Principal and his Related Parties) of a direct or indirect interest in more than 35% of the voting power of the voting stock of Holding by way of purchase, merger or consolidation or otherwise if (a) such person or group (as defined above) (other than the Principal and his Related Parties) owns, directly or indirectly, more of the voting power of the voting stock of Holding than the Principal and his Related Parties and (b) such acquisition occurs prior to the Initial Public Offering, (iv) the acquisition by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than by the Principal and his Related Parties) of a direct or indirect interest in more than 50% of the voting power of the voting stock of Holding by way of purchase, merger or consolidation or otherwise if such acquisition occurs subsequent to the Initial Public Offering or (v) the first day on which a majority of the members of the Board of Directors of Holding are not Continuing Directors. "CONTINUING DIRECTORS" means, as of any date of determination, any member of the Board of Directors of Holding who (i) was a member of such Board of Directors on the Issuance Date or (ii) was nominated for election or elected to such Board of Directors with the affirmative vote of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election. "INITIAL PUBLIC OFFERING" means a public offering of the Common Stock of Holding that first results in the Common Stock of Holding becoming listed for trading on a Stock Exchange. "PRINCIPAL" means Roberto Buaron. "RELATED PARTY" means with respect to the Principal (A) any spouse, sibling or descendant of such Principal (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 such Principal and/or such other Persons referred to in the immediately preceding clause (A). "STOCK EXCHANGE" means the New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market. ASSET SALES The Indenture provides that the Company will not, and will not permit any of its Subsidiaries to, conduct an Asset Sale (as defined herein), unless (x) the Company (or the Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee no later than immediately prior to the consummation of such proposed Asset Sale with respect to any Asset Sale involving aggregate payments in excess of $1 million) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefor received by the Company or such Subsidiary is in the form of cash; PROVIDED, HOWEVER, that the amount of (A) any liabilities (as shown on the Company's or such Subsidiary's most recent balance sheet or in the notes thereto), of the Company or any Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Guarantee thereof) that are assumed by the transferee of any such assets and (B) any notes or other obligations received by the Company or any such Subsidiary from such transferee that are immediately converted by the Company or such Subsidiary into cash (to the extent of the cash received), shall be deemed to be cash for purposes of this provision. Within 180 days after any Asset Sale, the Company may apply the Net Proceeds from such Asset Sale to either (a) permanently reduce Senior Indebtedness, or (b) make an investment in another business or capital expenditure or other long-term/tangible assets, in each case, in the same or a similar line of business as the Company was engaged in on the Issuance Date. Pending the final application of any such Net Proceeds, the Company may temporarily reduce Senior Bank Indebtedness or otherwise invest such Net Proceeds in Cash Equivalents. Any Net Proceeds from the Asset Sale that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute "Excess Proceeds." If the aggregate amount of Excess Proceeds exceeds $5 million, upon completion of the Asset Sale Offer required under the 1994 Indenture, the Company shall make an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal amount of Notes, that is an integral multiple of $1,000, that may be purchased out of the Excess Proceeds, if any, remaining upon completion of the Asset Sale Offer required under the 1994 Indenture, at an offer price in cash in an amount equal to 101% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in the manner described under the caption "Selection and Notice" below. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset to zero. The Indenture will also provide that the Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes in connection with an Asset Sale. "ASSET SALE" means (i) the sale, lease, conveyance or other disposition of any property or assets of the Company or any Subsidiary (including by way of a sale-and-leaseback) other than sales of inventory in the ordinary course of business (provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company shall be governed by the provisions of the Indenture described above under the caption "-Change of Control" and the provisions described below under the caption "- Certain Covenants - Merger, Consolidation or Sale of Assets"), or (ii) the issuance or sale of Equity Interests of any of its Subsidiaries, in the case of either clause (i) or (ii) above, whether in a single transaction or a series of related transactions, (a) that have a fair market value in excess of $250,000, or (b) for net proceeds in excess of $250,000. For purposes of this definition, the term "Asset Sale" shall not include (i) the transfer of assets by the Company to a Wholly Owned Subsidiary of the Company or by a Wholly Owned Subsidiary of the Company to the Company or to another Wholly Owned Subsidiary of the Company, (ii) any Restricted Payment, dividend or purchase or retirement of Equity Interests permitted under the covenant entitled "Restricted Payments" or (iii) the issuance or sale of Equity Interests of any Subsidiary of the Company, PROVIDED that such Equity Interests are issued or sold in consideration for the acquisition of assets by such Subsidiary or in connection with a merger or consolidation of another Person into such Subsidiary. The Credit Facility restricts the Company from purchasing any Notes prior to the termination thereof and provides that certain change of control events with respect to Holding and asset sales would constitute a default thereunder. Any future credit agreements or other agreements relating to Senior Indebtedness to which the Company becomes a party may contain similar or more restrictive provisions. In the event a Change of Control or Asset Sale occurs at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of its lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes. In such case, the Company's failure to purchase tendered Notes would constitute an Event of Default under the Indenture which would, in turn, constitute an default under the Credit Facility. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders of Notes. SELECTION AND NOTICE If less than all of the Notes are to be purchased in an Asset Sale Offer or redeemed at any time, selection of Notes for purchase or redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate, PROVIDED that no Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the purchase or redemption date to each Holder of Notes to be redeemed at its registered address. If any Note is to be purchased or redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be purchased or redeemed. A new Note in principal amount equal to the unpurchased or unredeemed portion of any Note purchased or redeemed in part will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the purchase or redemption date, interest ceases to accrue on Notes or portions thereof purchased or called for redemption. SUBORDINATION The payment of principal of, and premium, if any, interest and Liquidated Damages, if any, on, the Notes will be subordinated in right of payment, as set forth in the Indenture, to the prior payment in full of all Senior Indebtedness of the Company, whether outstanding on the Issuance Date or thereafter incurred. Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property, an assignment for the benefit of creditors or any marshalling of the Company's assets and liabilities, the holders of Senior Indebtedness of the Company will be entitled to receive payment in full of all Obligations due in respect of such Senior Indebtedness (including interest after the commencement of any such proceeding at the rate specified in the applicable Senior Indebtedness of the Company, whether or not such interest was an allowed claim) before the Holders of Notes will be entitled to receive any payment with respect to the Notes and, until all such Obligations with respect to Senior Indebtedness of the Company are paid in full, any distribution to which the Holders of Notes would otherwise be entitled shall be made to the holders of Senior Indebtedness of the Company (except that Holders of Notes may receive securities that are subordinated, at least to the same extent as are the Notes, to Senior Indebtedness and to any securities issued in exchange for any such Senior Indebtedness). The Company also may not make any payment upon or in respect of the Notes (except in such subordinated securities) if (a) a default in the payment when due, whether upon acceleration or otherwise, of the principal of, premium, if any, or interest on any Senior Indebtedness of the Company occurs and is continuing or (b) any other default occurs and is continuing with respect to any Designated Senior Indebtedness and the Trustee receives a notice of such default (a "Payment Blockage Notice") from the Company or from, or on behalf of, the holders of any such Designated Senior Indebtedness. Payments on the Notes may and shall be resumed (i) in the case of a payment default, upon the date on which such default is cured or waived and (ii) in the case of a nonpayment default, on the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any such Designated Senior Indebtedness has been accelerated. No new period of payment blockage may be commenced within 365 days after the receipt by the Trustee of any prior Payment Blockage Notice. The Indenture further requires that the Company promptly notify each representative of holders of Senior Indebtedness of the Company if payment of the Notes is accelerated because of an Event of Default. As a result of the subordination provisions described above, in the event of the insolvency or liquidation of the Company, Holders of Notes may recover less, ratably, than creditors of the Company who are holders of Senior Indebtedness or of other indebtedness which is not subordinated to the Notes. The Indenture provides that holders of Senior Indebtedness are third party beneficiaries of the subordination provisions of the Indenture and no amendment thereof shall be effected without the prior written consent of the holders of a majority of the outstanding principal amount of Senior Indebtedness. The aggregate amount of Senior Indebtedness of the Company outstanding at September 26, 1998 would have been approximately $76.8 million. As of September 26, 1998, all Indebtedness of the Company other than the Senior Indebtedness was PARI PASSU in right of payment to the Notes, and there would have been no Indebtedness of the Company subordinated to the Notes. Subject to certain financial tests, the Indenture does not limit the amount of additional Indebtedness, including Senior Indebtedness, that the Company and its Subsidiaries can incur. See "- Certain Covenants." NOTE GUARANTEES The Company's obligations under the Notes, including the Company's payment obligations, are unconditionally guaranteed, jointly and severally (each, a "Note Guarantee" and, together, the "Note Guarantees"), by the Guarantors. Rights of Holders of Notes pursuant to each such Note Guarantee are subordinated to the Senior Indebtedness of each of the Guarantors in the same manner as the rights of Holders of Notes are subordinated to those of the Senior Indebtedness of the Company. Accordingly, the Note Guarantee of each Guarantor is subordinated to the prior payment in full of all Senior Indebtedness of such Guarantor, which was approximately $307.7 million of Senior Indebtedness, and the amounts for which such Guarantor will be liable under its Guarantees issued from time to time with respect to Senior Indebtedness. As of September 26, 1998, all indebtedness of the Guarantors other than the Senior Indebtedness was PARI PASSU in right of payment to the Note Guarantees, and there would have been no Indebtedness of the Guarantors subordinated to the Note Guarantees. The obligations of each Guarantor under its Note Guarantee is limited to the extent necessary to insure that it does not constitute a fraudulent conveyance under applicable law. The Indenture provides that no Guarantor shall consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person whether or not affiliated with such Guarantor unless (i) subject to the provisions of the following paragraph and certain other provisions of the Indenture, the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) assumes all the obligations of such Guarantor pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee, under its Note Guarantee and the Indenture; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists; and (iii) in the case of any Guarantor other than Holding, such Guarantor, or any Person formed by or surviving any such consolidation or merger, (A) will have Consolidated Net Worth (immediately after giving effect to such transaction), equal to or greater than the Consolidated Net Worth of such Guarantor immediately preceding the transaction and (B) will be permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio to incur, immediately after giving effect to such transaction, at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the covenant entitled "Incurrence of Indebtedness and Issuance of Disqualified Stock." The Indenture provides that in the event of a sale or other disposition of all or substantially all of the assets of any Guarantor (other than Holding), by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Capital Stock of any Guarantor, then such Guarantor (in the event of a sale or other disposition, by way of such a merger, consolidation or otherwise, of all of the Capital Stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) shall be released and relieved of any obligations under its Note Guarantee; PROVIDED that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture. See "- Repurchase at the Option of Holders - Asset Sales." CERTAIN COVENANTS RESTRICTED PAYMENTS The Indenture provides that the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any distribution on account of the Company's or any of its Subsidiaries' Equity Interests (other than: dividends or distributions payable in Equity Interests of the Person making such dividend or distribution, other than Disqualified Stock; or dividends or distributions payable to the Company or any Wholly Owned Subsidiary of the Company that is a Guarantor); (ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company or any Subsidiary or other Affiliate of the Company (other than any such Equity Interests owned by the Company or any Wholly Owned Subsidiary of the Company that is a Guarantor); (iii) purchase, redeem or otherwise acquire or retire for value any Indebtedness (other than the 1994 Notes, 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; (iv) directly or indirectly make any loan or advance to, or make any payment to, Holding; or (v) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (v) above being collectively referred to as "Restricted Payments"), unless, at the time of such Restricted Payment: (a)no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (b)the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the covenant entitled "Incurrence of Indebtedness and Issuance of Disqualified Stock;" and (c)such Restricted Payment, (A) in the case of any Restricted Payment other than as defined by clause (i) above, together with the aggregate of all other Restricted Payments made by the Company and its Subsidiaries after April 21, 1994 (including Restricted Payments permitted by the next succeeding paragraph (other than such Restricted Payments permitted by clauses (iv), (v) and (vi) of the next succeeding paragraph)) or (B) in the case of any Restricted Payment defined by clause (i) above, together with the aggregate of all other Restricted Payments made by the Company and its Subsidiaries after April 21, 1994 (including Restricted Payments permitted by the next succeeding paragraph (other than Restricted Payments permitted by clauses (iv) and (v) of the next succeeding paragraph)) is less than the sum of (x) 50% of the sum of the Consolidated Net Income and Consolidated Step-Up Depreciation and Amortization of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter that began after April 21, 1994 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income plus Consolidated Step-Up Depreciation and Amortization for such period is a deficit, 100% of such deficit), plus (y) 100% of the aggregate net cash proceeds received by the Company from the issue or sale since April 21, 1994 of Equity Interests of the Company or of debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock). The foregoing provisions do not prohibit (i) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture; (ii) the redemption, repurchase, retirement or other acquisition of any Equity Interests of the Company in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of other Equity Interests of the Company (other than any Disqualified Stock); (iii) the defeasance, redemption or repurchase of PARI PASSU or subordinated Indebtedness in a Permitted Refinancing; (iv) a Restricted Payment to Holding pursuant to the Tax Sharing Agreement as the same may be amended from time to time in a manner that is not materially adverse to the Company; (v) a Restricted Payment to Holding to pay its operating and administrative expenses including, without limitation, directors fees, legal and audit expenses, the Commission compliance expenses and corporate franchise and other taxes, not to exceed in any fiscal year $500,000; (vi) a Restricted Payment to Holding to pay management fees not to exceed $750,000 in any fiscal year of the Company; (vii) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Holding pursuant to any management equity subscription agreement or stock option agreement in effect as of April 21, 1994; PROVIDED, HOWEVER, that (a) the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $1 million and (b) no Default or Event of Default shall have occurred and be continuing immediately after such transaction; and (viii) Investments by the Company in joint ventures or similar projects in a business similar to that conducted by the Company and its Subsidiaries on the Issuance Date in an aggregate amount not to exceed $1 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant entitled "Restricted Payments" were computed, which calculations may be based upon the Company's latest available financial statements. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK The Indenture provides that the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise become directly or indirectly liable with respect to (collectively, "incur" and correlatively, an "incurrence" of) any Indebtedness (including Acquired Debt) and that the Company will not issue any, and will not permit any of its Subsidiaries to issue any, shares of Disqualified Stock; 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 2.25 to 1 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. In addition, the Indenture provides that each of the following Indebtedness must be subordinated in right of payment to the Notes or the Note Guarantees, as the case may be, at least to the same extent as the Notes are subordinated to Senior Indebtedness: (A) all Indebtedness that does not provide for all interest payments to be made in cash; (B) all Indebtedness of the Company to any of its Subsidiaries; and (C) any Indebtedness of the Company and its Subsidiaries if, at the time of incurrence thereof, Indebtedness of the Company and the Guarantors that is PARI PASSU in right of payment to the Notes and the Note Guarantees (including, on a pro forma basis, the Indebtedness to be incurred) exceeds $100 million other than the 1994 Notes and the Notes. The foregoing limitations do not apply to (a) revolving credit Indebtedness and letters of credit pursuant to the Credit Facility in an aggregate principal amount not to exceed at any one time outstanding the greater of (i) $60 million in principal amount (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company thereunder), less the aggregate amount of all repayments after April 21, 1994 that permanently reduce the commitment under the Credit Facility, and (ii) the Borrowing Base; (b) the Existing Indebtedness; (c) the Notes (other than any Additional Notes) or any Note Guarantee; (d) the incurrence by the Company or any of its Subsidiaries of Refinancing Indebtedness; PROVIDED, HOWEVER, that such Refinancing Indebtedness is a Permitted Refinancing; (e) Indebtedness between or among the Company and any of its Wholly Owned Subsidiaries that are Guarantors; (f) Indebtedness from the Company to Holding PROVIDED that the advances evidenced by such Indebtedness are permitted under the covenant entitled "Restricted Payments;" (g) Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the Indenture to be outstanding; and (h) the incurrence by the Company or its Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other clause of this paragraph) in an aggregate principal amount at any time outstanding not to exceed the sum of $1 million at any one time. Notwithstanding anything to the contrary, the Indenture provides that the Company and its Subsidiaries will not be permitted to incur any additional Senior Indebtedness unless it is secured. LIENS The Indenture provides that the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly (i) create, incur, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by the Company or any Subsidiary, or any income or profits therefrom or (ii) assign or convey any right to receive income therefrom, in any such case to secure any Indebtedness (other than Senior Indebtedness of the Company or Senior Indebtedness of a Guarantor permitted to be incurred pursuant to the Indenture) unless contemporaneously therewith or prior thereto, effective provision is made (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) whereby the Notes or a Note Guarantee are secured equally and ratably with such other Indebtedness (or if such other Indebtedness is subordinated to the Notes or a Note Guarantee, the Notes or a Note Guarantee, as the case may be, are secured on a basis with the same relative priority to such other Indebtedness). DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES The Indenture provides that the Company will not, and will 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 (a)(i) pay dividends or make any other distributions to the Company or any of its Subsidiaries (A) on its Capital Stock or (B) with respect to any other interest or participation in, or measured by, its profits, or (ii) pay any indebtedness owed to the Company or any of its Subsidiaries, (b) make loans or advances to the Company or any of its Subsidiaries or (c) transfer any of its properties or assets to the Company or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reasons of (i) Existing Indebtedness as in effect on the Issuance Date, (ii) the Credit Facility as in effect on the Issuance Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, PROVIDED that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are no more restrictive with respect to such dividend and other payment restrictions than those contained in the Credit Facility as in effect on the Issuance Date, (iii) the 1994 Indenture and the 1994 Notes, (iv) the Indenture and the Notes, (v) applicable law, (vi) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company 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, PROVIDED that the Consolidated Cash Flow of such Person, to the extent of such restriction, is not taken into account in determining whether such acquisition was permitted by the terms of the Indenture, (vii) by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices, (viii) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (c) above on the property so acquired, or (ix) permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Refinancing Indebtedness are no more restrictive than those contained in the agreements governing the Indebtedness being refinanced. MERGER, CONSOLIDATION, OR SALE OF ASSETS The Indenture provides that the Company may not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another Person unless (i) the Company is the surviving Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee, under the Notes and the Indenture; (iii) immediately after such transaction no Default or Event of Default exists; and (iv) the Company or any Person formed by or surviving any such consolidation or merger, or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (A) will have Consolidated Net Worth (immediately after the transaction) equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction and (B) will, at the time of such 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 the covenant entitled "Incurrence of Indebtedness and Issuance of Disqualified Stock." TRANSACTIONS WITH AFFILIATES The Indenture provides that the Company will not, and will not permit any of its Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into any contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (a) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Subsidiary with a Person who was not an Affiliate and (b) the Company delivers to the Trustee (i) with respect to any Affiliate Transaction involving aggregate payments in excess of $2 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (a) above and that such Affiliate Transaction is approved by a majority of the Board of Directors and (ii) with respect to any Affiliate Transaction involving aggregate payments in excess of $5 million, an opinion as to the fairness to the Company or such Subsidiary from a financial point of view issued by an investment banking firm of national standing; PROVIDED, HOWEVER, that (i) any employment agreement entered into by the Company or any of its Subsidiaries in the ordinary course of business and consistent with the past practice of the Company or such Subsidiary, (ii) transactions between or among the Company and/or its Subsidiaries, (iii) Restricted Payments permitted by the provisions of the Indenture described above under the covenant "Restricted Payments" and (iv) the advisory fee being paid to First Atlantic in connection with the Offering, in each case, shall not be deemed Affiliate Transactions. NO SENIOR SUBORDINATED INDEBTEDNESS The Indenture provides that (i) the Company will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Indebtedness and senior in any respect in right of payment to the Notes, and (ii) no Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to its Senior Indebtedness and senior in any respect in right of payment to its Note Guarantee. ADDITIONAL GUARANTEES The Indenture provides that (i) if the Company or any of its Subsidiaries shall transfer or cause to be transferred, in one or a series of related transactions (other than a transaction or series of related transactions constituting a Restricted Payment permitted pursuant to the provisions of the covenant entitled "Restricted Payments"), any assets, businesses, divisions, real property or equipment having a book value in excess of $1 million to any Subsidiary that is not a Guarantor or (ii) if the Company or any of its Subsidiaries shall acquire another Subsidiary having (a) total assets with a book value in excess of $1 million or (b) Consolidated Cash Flow in excess of $1 million, then such transferee or acquired Subsidiary shall execute a Note Guarantee and deliver an opinion of counsel as to the enforceability of such Note Guarantee, in accordance with the terms of the Indenture. REPORTS Whether or not required by the rules and regulations of the Commission, so long as any Notes are outstanding, the Company will furnish to the Trustee and to all Holders of Notes all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by the Company's certified independent accountants. In addition, whether or not required by the rules and regulations of the Commission, the Company will file a copy of all such information and any other information required by Section 13 or 15(d) of the Exchange Act with the Commission for public availability (unless the Commission will not accept such a filing) and file such information with the Trustee and make such information available to investors who request it in writing. Notwithstanding the foregoing, to the extent permitted under the rules and regulations of the Commission, the Company may instead supply such information with respect to Holding. EVENTS OF DEFAULT AND REMEDIES The Indenture provides that each of the following constitutes an Event of Default: (i) default for 30 days in the payment when due of interest and Liquidated Damages, if any, on the Notes (whether or not prohibited by the subordination provisions of the Indenture); (ii) default in payment when due of the principal of or premium, if any, on the Notes (whether or not prohibited by the subordination provisions of the Indenture); (iii) failure by the Company to comply with the provisions described under the covenants "Repurchase at the Option of Holders - Change of Control," "Repurchase at the Option of Holders - Asset Sales," "Certain Covenants - Restricted Payments" or "Certain Covenants - Incurrence of Indebtedness and Issuance of Disqualified Stock"; (iv) failure by the Company or the Guarantors for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes; (v) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company, Holding or any of their respective Subsidiaries (or the payment of which is guaranteed by the Company, Holding or any of their respective Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the Issuance Date, which default (a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $2 million or more; (vi) failure by the Company, Holding or any of their respective Subsidiaries to pay final judgments aggregating in excess of $2 million, which judgments are not paid, discharged or stayed for a period of 60 days; (vii) except as permitted by the Indenture, any Note Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor (or its successors or assigns), or any Person acting on behalf of any Guarantor (or its successors or assigns), shall deny or disaffirm its obligations or shall fail to comply with any obligations under its Note Guarantee; and (viii) certain events of bankruptcy or insolvency with respect to the Company, Holding or any of their respective Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately; PROVIDED, HOWEVER, that if any Indebtedness is outstanding pursuant to the Credit Facility, upon a declaration of acceleration, the principal and interest on the Notes shall be payable upon the earlier of (1) the day which is five business days after notice of acceleration is given to the Company and the lender under the Credit Facility or (2) the date of acceleration of the Indebtedness under the Credit Facility. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company, Holding or any of their respective Subsidiaries, all outstanding Notes will become due and payable without further action or notice. Under certain circumstances, the Holders of at least a majority in aggregate principal amount of the outstanding Notes may rescind any acceleration with respect to the Notes and its consequences. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. In the case of any Event of Default occurring on or after April 15, 1999 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to April 15, 1999 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to April 15, 1999, then the premium specified in the Indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the Notes. The Holders of not less than a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, any Note held by a non-consenting Holder. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Note Guarantees, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note and the Note Guarantees waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees. Such waiver may not be effective to waive liabilities under the Federal securities laws and it is the view of the Commission that such a waiver is against public policy. LEGAL DEFEASANCE AND COVENANT DEFEASANCE The Company may, at its option and at any time, elect to have all of its and the Guarantors' obligations discharged with respect to the outstanding Notes and the Note Guarantees ("Legal Defeasance") except for (i) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, and premium, if any, interest and Liquidated Damages, if any, on such Notes when such payments are due, (ii) the Company's and the Guarantors' obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust, (iii) the rights, powers, trusts, duties and immunities of the Trustee, and the Company's and the Guarantors' obligations in connection therewith and (iv) the Legal Defeasance provisions of the Indenture. In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Guarantors released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "- Events of Default and Remedies" will no longer constitute an Event of Default with respect to the Notes. In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, and premium, if any, interest and Liquidated Damages, if any, on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, of such principal or installment of principal of, or premium, if any, interest or Liquidated Damages, if any, on the outstanding Notes; (ii) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the IRS a ruling or (b) since the Issuance Date, there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such Legal Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for Federal income tax purposes as a result of such Covenant Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (iv) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or an Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to the terms of the Indenture concurrently with such incurrence) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the day on which all applicable preference periods have run; (v) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee an opinion of counsel to the effect that after the day on which all applicable preference periods have run, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (vii) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company or the Guarantors with the intent of defeating, hindering, delaying or defrauding creditors of the Company or the Guarantors; and (viii) the Company shall have delivered to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with. TRANSFER AND EXCHANGE A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed. The registered Holder of a Note will be treated as the owner of it for all purposes. AMENDMENT, SUPPLEMENT AND WAIVER Except as provided in the next succeeding paragraphs, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for Notes). Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder of Notes): (i) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver, (ii) reduce the principal of or change the fixed maturity of any Note or alter or waive the provisions with respect to the redemption of the Notes, (iii) reduce the rate of or change the time for payment of interest on any Note, (iv) waive a Default or Event of Default in the payment of principal of, or premium, if any, interest or Liquidated Damages, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration), (v) make any Note payable in money other than that stated in the Notes, (vi) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or premium, if any, interest or Liquidated Damages, if any, on the Notes, (vii) waive a redemption payment with respect to any Note, (viii) make any change to the subordination provisions of the Indenture that adversely affects Holders, (ix) except pursuant to the terms of the Indenture, release any Guarantor from its obligations under its Note Guarantee, or change any Note Guarantee in any manner that would adversely affect Holders, or (x) make any change in the foregoing amendment and waiver provisions. Notwithstanding the foregoing, without the consent of any Holder of Notes, the Company and the Trustee may amend or supplement the Indenture or the Notes to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company's or any Guarantors' obligations to Holders of the Notes in the case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Notes (including providing for additional Note Guarantees pursuant to the covenant entitled "Additional Guarantees") or that does not adversely affect the legal rights under the Indenture of any such Holder, to provide for the issuance of Additional Notes in accordance with the provisions set forth in the Indenture or to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. CONCERNING THE TRUSTEE The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company, the Guarantors or any Affiliate of the Company or the Guarantors, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign. The Holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur (which shall not be cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. BOOK-ENTRY; DELIVERY, FORM AND TRANSFER The Old Notes were offered and sold to qualified institutional buyers in reliance on Rule 144A ("Rule 144A Notes"). Except as set forth below, Notes will be issued in registered, global form in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. The Rule 144A Notes were, and the New Notes will be, represented by one or more Notes in registered, global form without interest coupons (collectively, the "Rule 144A Global Notes" or the "Global Notes"). The Global Notes will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company, in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below. Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for Notes in certificated form except in the limited circumstances described below. See "- Exchange of Book-Entry Notes for Certificated Notes." Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of Certificated Notes (as defined herein). Rule 144A Notes (including beneficial interests in the Rule 144A Global Notes) are subject to certain restrictions on transfer and bear a restrictive legend. In addition, transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change from time to time. Initially, the Trustee will act as Paying Agent and Registrar. The Notes may be presented for registration of transfer and exchange at the offices of the Registrar. DEPOSITORY PROCEDURES The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and procedures are solely within the control of the settlement system and are subject to changes by it from time to time. The Company takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters. DTC has advised the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the Initial Purchaser), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants. DTC has also advised the Company that, pursuant to procedures established by it, (i) upon deposit of the Global Notes, DTC will credit the accounts of Participants with portions of the principal amount of the Global Notes and (ii) ownership of such interests in the Global Notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes). Investors in the Rule 144A Global Notes may hold their interests therein directly through DTC, if they are Participants in such system, or indirectly through organizations which are Participants in such system. All interests in a Global Note may be subject to the procedures and requirements of DTC. The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants and certain banks, the ability of a person having beneficial interests in a Global Note to pledge such interests to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests. EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR "HOLDERS" THEREOF UNDER THE INDENTURE FOR ANY PURPOSE. Payments in respect of the principal of, and premium, if any, Liquidated Damages, if any, and interest on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the Notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for (i) any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interest in the Global Notes, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Notes or (ii) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. DTC has advised the Company that its current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date, in amounts proportionate to their respective holdings in the principal amount of beneficial interest in the relevant security as shown on the records of DTC unless DTC has reason to believe it will not receive payment on such payment date. Payments by the Participants and the Indirect Participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes. Interests in the Global Notes are expected to be eligible to trade in DTC's Same-Day Funds Settlement System and secondary market trading activity in such interests will, therefore, settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its Participants. See "- Same Day Settlement and Payment." Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same day funds. DTC has advised the Company that it will take any action permitted to be taken by a holder of Notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such Notes to its Participants. Neither the Company nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC, or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES A Global Note is exchangeable for definitive Notes in registered certificated form ("Certificated Notes") if (i) DTC (x) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes and the Company thereupon fails to appoint a successor depositary or (y) has ceased to be a clearing agency registered under the Exchange Act, (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes or (iii) there shall have occurred and be continuing a Default or Event of Default with respect to the Notes. In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon request but only upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures) and will bear an applicable restrictive legend, if any, unless the Company determines otherwise in compliance with applicable law. EXCHANGE OF CERTIFICATED NOTES FOR BOOK-ENTRY NOTES Notes issued in certificated form may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions, if any, applicable to such Notes. SAME DAY SETTLEMENT AND PAYMENT The Indenture requires that payments in respect of the Notes represented by the Global Notes (including principal, premium, if any, interest and Liquidated Damages, if any) be made by wire transfer of immediately available funds to the accounts specified by the Global Note holder. With respect to Notes in certificated form, the Company will make all payments of principal, premium, if any, interest and Liquidated Damages, if any, by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address. The Company expects that secondary trading in any certificated Notes will also be settled in immediately available funds. CERTAIN DEFINITIONS Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided. "ACQUIRED DEBT" means, with respect to any specified Person: (i) Indebtedness of any other Person existing at the time such other Person merged with or into or became a Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person and (ii) Indebtedness encumbering any asset acquired by such specified Person. "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER, that beneficial ownership of 10% or more of the voting securities of a Person shall be deemed to be control. Neither Chase Bank, The CIT Group/Equity Investments, Inc., nor their respective Affiliates will be deemed an Affiliate of the Company or any of its Subsidiaries for purposes of this definition by reason of its direct or indirect beneficial ownership of 15% or less of the Common Stock of Holding or by reason of any employee thereof being appointed to the Board of Directors of Holding. "BORROWING BASE" means, as of any date, an amount equal to the sum of (a) 85% of the face amount of all accounts receivable owned by the Company and its Subsidiaries as of such date that are not more than 90 days past due, and (b) 65% of the book value (calculated on a FIFO basis) of all inventory owned by the Company and its Subsidiaries as of such date, all calculated on a consolidated basis and in accordance with GAAP. To the extent that information is not available as to the amount of accounts receivable or inventory as of a specific date, the Company may utilize the most recent available information for purposes of calculating the Borrowing Base. "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 so required to be capitalized on a balance sheet prepared in accordance with GAAP. "CAPITAL STOCK" means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, including, without limitation, 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. "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 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. "CONSOLIDATED CASH FLOW" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus (a) an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale (to the extent such losses were deducted in computing Consolidated Net Income), plus (b) provision for taxes based on income or profits of such Person for such period, to the extent such provision for taxes was included in computing Consolidated Net Income, plus (c) Consolidated Interest Expense of such Person for such period to the extent such expense was deducted in computing Consolidated Net Income, plus (d) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent such expense was deducted in computing Consolidated Net Income, plus (e) other non-cash charges (including, without limitation, repricing of stock options, to the extent deducted in computing Consolidated Net Income; but excluding any non- cash charge that requires an accrual or reserve for cash expenditures in future periods or which involved a cash expenditure in a prior period), in each case, on a consolidated basis and determined in accordance with GAAP. "CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE" means, with respect to any Person for any period, the total amount of depreciation and amortization expense (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person for such period on a consolidated basis as determined in accordance with GAAP. "CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for any period, the sum of (a) consolidated interest expense of such Person and its Subsidiaries for such period, whether paid or accrued, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, non-cash interest payments, the interest component of capital leases, and net payments (if any) pursuant to Hedging Obligations), (b) commissions, discounts and other fees and charges paid or accrued with respect to letters of credit and bankers' acceptance financing, and (c) interest actually paid by such Person or its Subsidiaries under a Guarantee of Indebtedness of any other Person. "CONSOLIDATED NET INCOME" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; PROVIDED, that (i) the Net Income of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid to the referent Person or a Wholly Owned Subsidiary thereof that is a Guarantor, (ii) the Net Income of any Person that is a Subsidiary (other than a Wholly Owned Subsidiary) shall be included only to the extent of the amount of dividends or distributions paid to the referent Person or a Wholly Owned Subsidiary thereof that is a Guarantor, (iii) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded and (iv) the cumulative effect of a change in accounting principles shall be excluded. "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 16 months after the acquisition of such business) subsequent to April 21, 1994 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 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. "CONSOLIDATED STEP-UP DEPRECIATION AND AMORTIZATION" means, with respect to any Person for any period, the total amount of depreciation related to the write-up of assets and amortization of such Person for such period on a consolidated basis as determined in accordance with GAAP. "CREDIT FACILITY" means the Second Amended and Restated Financing and Security Agreement dated as of July 2, 1998, by the Company and NationsBank, N.A., providing for up to $132.6 million (plus the 1.5 million UK Revolver and the 4.5 million UK Term Loan) 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. "DEFAULT" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. "DESIGNATED SENIOR INDEBTEDNESS" means (i) the Senior Bank Indebtedness and (ii) any other Senior Indebtedness (a) permitted to be incurred under the Indenture the principal amount of which is $15 million or more and (b) designated in the instrument creating or evidencing such Senior Indebtedness as "Designated Senior Indebtedness." "DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the Holder thereof, in whole or in part, on or prior to July 15, 2004. "EQUITY INTERESTS" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "EXISTING INDEBTEDNESS" means Indebtedness of the Company and its Subsidiaries (other than under the Credit Facility) in existence on the Issuance Date, until such amounts are repaid. "FIXED CHARGES" means, with respect to any Person for any period, the sum of (a) Consolidated Interest Expense of such Person for such period, whether paid or accrued, to the extent such expense was deducted in computing Consolidated Net Income and (b) the product of (i) all cash dividend payments (and non-cash dividend payments in the form of securities (other than Disqualified Stock) of an issuer) on any series of Preferred Stock of such Person, times (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined Federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. "FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any of its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee or redemption of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter reference period. For purposes of making the computation referred to above, acquisitions, dispositions and discontinued operations (as determined in accordance with GAAP) that have been made by the Company or any of its Subsidiaries, including all mergers and consolidations, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be calculated on a pro forma basis assuming that all such acquisitions, dispositions, discontinued operations, mergers and consolidations (and the reduction of any associated fixed charge obligations resulting therefrom) had occurred on the first day of the four-quarter reference period. "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 Issuance Date. "GOVERNMENT SECURITIES" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States of America is pledged. "GUARANTEE" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "GUARANTORS" means each of (i) Holding, Berry Iowa, Berry Tri-Plas, Berry Sterling, AeroCon, PackerWare, Berry Design, Venture Holdings, Venture Midwest, Venture Southeast, NIM Holdings, Norwich, and Knight and (ii) any other Person that executes a Note Guarantee in accordance with the provisions of the Indenture, and their respective successors and assigns. "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 any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, and also includes, to the extent not otherwise included, the Guarantee of any Indebtedness of such Person or any other Person. "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, Equity Interests or other securities and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. "ISSUANCE DATE" means the closing date for the sale and original issuance of the Notes. "LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). "NET INCOME" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, excluding, however, any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with any Asset Sale (including, without limitation, dispositions pursuant to sale and leaseback transactions), and excluding any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "NET PROCEEDS" means the aggregate cash proceeds received by the Company or any of its Subsidiaries in respect of any Asset Sale, net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that are the subject of such Asset Sale and any reserve for indemnification or adjustment in respect of the sale price of such asset or assets. "OBLIGATIONS" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "PERMITTED INVESTMENTS" means (a) any Investments in the Company or in a Wholly Owned Subsidiary of the Company and that is engaged in the same or a similar line of business as the Company and its Subsidiaries were engaged in on the Issuance Date and (b) any Investments in Cash Equivalents. "PERMITTED REFINANCING" means Refinancing Indebtedness if (a) the principal amount of Refinancing Indebtedness does not exceed the principal amount of Indebtedness so extended, re-financed, renewed, replaced, defeased or refunded (plus the amount of premiums, accrued interest and reasonable expenses incurred in connection therewith); (b) the Refinancing Indebtedness has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (c) the Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. "PERSON" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "PREFERRED STOCK" means any Equity Interest with preferential right in the payment of dividends or liquidation or any Disqualified Stock. "REFINANCING INDEBTEDNESS" means Indebtedness issued in exchange for, or the proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness referred to in clauses (a) and (b) of the covenant entitled "Incurrence of Indebtedness and Issuance of Disqualified Stock." "RESTRICTED INVESTMENT" means an Investment other than a Permitted Investment. "SENIOR BANK INDEBTEDNESS" means the Indebtedness outstanding under the Credit Facility as such agreement may be restated, further amended, supplemented or otherwise modified or replaced from time to time hereafter, together with any refunding or replacement of any such Indebtedness. "SENIOR INDEBTEDNESS" means (i) the Senior Bank Indebtedness and (ii) any other Indebtedness permitted to be incurred by the Company or a Guarantor, as the case may be, under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is PARI PASSU with or subordinated in right of payment to the Notes or a Note Guarantee, as the case may be. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness shall not include (w) any liability for Federal, state, local or other taxes owed or owing by the Company or a Guarantor, as the case may be, (x) any Indebtedness of the Company or a Guarantor, as the case may be, to Holding or to any of Holding's other Subsidiaries or other Affiliates, (y) any trade payables or (z) any Indebtedness that is incurred in violation of the Indenture. "SUBSIDIARY" means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof. "TAX SHARING AGREEMENT" means that certain Tax Sharing Agreement, as in effect on the closing date of the Offering, between the Company and Holding. "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the sum of the products obtained by multiplying (x) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the due date of such payment, by (b) the then outstanding principal amount of such Indebtedness. "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. MATERIAL FEDERAL INCOME TAX CONSIDERATIONS The following is a summary prepared by O'Sullivan Graev & Karabell, LLP, special counsel to the Company ("Special Counsel"), of certain United States Federal income tax considerations relating to the Exchange Offer and to the purchase, ownership and disposition of the Notes but does not purport to be a complete analysis of all the potential tax considerations relating thereto. In the opinion of Special Counsel, and, based upon the assumptions and subject to the qualifications and limitations set forth herein, this summary fairly presents the material Federal income tax considerations relevant to the exchange of Old Notes for New Notes pursuant to the Exchange Offer and to the ownership of the Notes. This summary is based on the Internal Revenue Code of 1986, as amended, existing, temporary and proposed Treasury Regulations, laws, rulings and decisions now in effect, all of which are subject to change. Any such changes may be applied retroactively in a manner that could adversely affect a holder of the Notes. This summary deals only with holders that will hold Notes as "capital assets" (within the meaning of Section 1221 of the Code) and that are (i) citizens or residents of the United States, (ii) corporations, partnerships and other business entities created or organized under the laws of the United States, (iii) estates the income of which is subject to United States Federal income taxation regardless of its source and (iv) trusts if a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantive decisions. This summary does not address tax considerations applicable to investors that may be subject to special tax rules, such as banks, tax-exempt organizations, insurance companies, dealers in securities or currencies, or persons that will hold Notes as a position in a hedging transaction, "straddle" or "conversion transaction" for tax purposes. This summary discusses the principal Federal income tax considerations applicable to the Exchange Offer, initial purchasers of the Notes who purchase the Notes at a premium and subsequent purchasers of the Notes. This summary does not consider the effect of any applicable foreign, state, local or other tax laws. No ruling from the Internal Revenue Service (the "IRS") will be sought with respect to the Notes, and the IRS could take a contrary view with respect to the matters described below. THE FOLLOWING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS GENERAL AND, AS DISCUSSED, DOES NOT COVER THE TAX EFFECTS TO ALL INVESTORS IN ALL SITUATIONS. ACCORDINGLY, INVESTORS CONSIDERING THE EXCHANGE OFFER SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY. EXCHANGE OF OLD NOTES FOR NEW NOTES The exchange of Old Notes for New Notes pursuant to the Exchange Offer will not be considered a taxable exchange for Federal income tax purposes because the New Notes will not constitute a material modification of the terms of the Old Notes. Accordingly, such exchange should have no Federal income tax consequences to holders of Old Notes, and a holder's basis and holding period in a New Note will be the same as such holder's adjusted tax basis in the Old Note exchanged therefor. PAYMENT OF INTEREST Interest on a Note generally will be includable in the income of a holder as ordinary income at the time such interest is received or accrued, in accordance with such holder's method of accounting for United States Federal income tax purposes. NOTES PURCHASED AT A PREMIUM In general, if a holder purchases a Note for an amount in excess of its stated redemption price at maturity, the holder may elect to treat such excess as "amortizable bond premium," in which case the amount required to be included in the holder's income each year with respect to interest on the Note will be reduced by the amount of amortizable bond premium allocable (based on the Note's yield to maturity) to such year. The amount of amortizable bond premium allocable to a holder's taxable year may be determined, in part, by the Company's right to redeem the Notes. Holders should consult their own tax advisors with respect to the amortization of bond premium. Any such election would apply to all bonds (other than bonds the interest on which is excludable from gross income) held by the holder at the beginning of the first taxable year to which the election applies or which thereafter are acquired by the holder, and such election is irrevocable without the consent of the IRS. OPTIONAL REDEMPTION OR REPAYMENT The Notes will not have original issue discount ("OID") because they were issued at a premium. For purposes of determining OID, Treasury Regulations provide that the holder's right to require redemption of the Notes upon the occurrence of a Change of Control will not be taken into account unless, based on all the facts and circumstances as of the issue date, it is significantly more likely than not that both a Change of Control giving rise to the right to require repurchase will occur and such right will be exercised. In the event of a Change of Control, each holder of Notes will have the right to require the Company to repurchase all or a part of such holder's Notes as described in "Description of Notes - Repurchase at the Option of holders - Change of Control." Under the Treasury Regulations discussed above, the Company believes that the holder's right to require repurchase should not be taken into account for purposes of calculating OID because a Change of Control and exercise of such rights are not significantly more likely than not to occur. Treasury Regulations also provide that the Company will be deemed to exercise its option to redeem the Notes in a manner that minimizes the yield on the Notes. The Company may redeem the Notes in certain circumstances, pursuant to the terms of the Notes. See "Description of the Notes - Optional Redemption." The Company believes that, although its option to redeem could be deemed exercised for the purposes of the OID regulations at certain dates, any such deemed exercise would not result in OID because the original cost of the Notes would exceed any such deemed redemption price. Therefore, there is no OID. MARKET DISCOUNT ON RESALE OF NOTES A holder of a Note should be aware that the purchase or resale of a Note may be affected by the "market discount" provisions of the Code. The market discount rules generally provide that if a holder of a Note purchases the Note at a market discount (i.e., a discount other than at original issue), any gain recognized upon the disposition of the Note by the holder will be taxable as ordinary interest income, rather than as capital gain, to the extent such gain does not exceed the accrued market discount on such Note at the time of such disposition. "Market discount" generally means the excess, if any, of a Note's stated redemption price at maturity over the price paid by the holder therefor, unless a DE MINIMIS exception applies. A holder who acquires a Note at a market discount also may be required to defer the deduction of a portion of the amount of interest that the holder paid or accrued during the taxable year on indebtedness incurred or maintained to purchase or carry such Note, if any. Any principal payment on a Note acquired by a holder at a market discount will be included in gross income as ordinary income (generally, as interest income) to the extent that it does not exceed the accrued market discount at the time of such payment. The amount of the accrued market discount for purposes of determining the tax treatment of subsequent payments on, or dispositions of, a Note is to be reduced by the amounts so treated as ordinary income. A holder of a Note acquired at a market discount may elect to include market discount in gross income, for Federal income tax purposes, as such market discount accrues, either on a straight-line basis or on a constant interest rate basis. This current inclusion election, once made, applies to all market discount obligations acquired on or after the first day of the first taxable year to which the election applies, and may not be revoked without the consent of the IRS. If a holder of a Note makes such an election, the foregoing rules regarding the recognition of ordinary interest income on sales and other dispositions and the receipt of principal payments with respect to such Note, and regarding the deferral of interest deductions on indebtedness incurred or maintained to purchase or carry such Note, will not apply. SALE, EXCHANGE OR RETIREMENT OF THE NOTES Upon the sale, exchange or redemption of a Note, a holder generally will recognize capital gain or loss equal to the difference between (i) the amount of cash proceeds and the fair market value of any property received on the sale, exchange or redemption (except to the extent such amount is attributable to either Liquidated Damages, discussed below, or accrued interest income not previously included in income which is taxable as ordinary income) and (ii) such holder's adjusted tax basis in the Note. A holder's adjusted tax basis in a Note generally will equal the cost of the Note to such holder, adjusted for amortizable bond premium, if any, if the holder made an election to amortize such premium. Such capital gain or loss will be long-term capital gain or loss if the holder's holding period in the Note is more than one year at the time of sale, exchange or redemption. LIQUIDATED DAMAGES The Company believes that Liquidated Damages, if any, described above under "The Exchange Offer - Purpose and Effect of the Exchange Offer" will be taxable to the holder as ordinary income in accordance with the holder's method of accounting for Federal income tax purposes. The IRS may take a different position, however, which could affect the timing of a holder's income with respect to Liquidated Damages, if any. INFORMATION REPORTING AND BACKUP WITHHOLDING In general, information reporting requirements will apply to payments of principal, premium, if any, and interest on a Note and payments of the proceeds of the sale of a Note to certain noncorporate holders, and a 31% backup withholding tax may apply to such payments if the holder (i) fails to furnish or certify its correct taxpayer identification number to the payer in the manner required, (ii) is notified by the IRS that it has failed to report payments of interest and dividends properly or (iii) under certain circumstances, fails to certify that it has not been notified by the IRS that it is subject to backup withholding for failure to report interest and dividend payments. Any amounts withheld under the backup withholding rules from a payment to a holder will be allowed as a credit against such holder's United States Federal income tax and may entitle the holder to a refund, provided that the required minimum information is furnished to the IRS. PLAN OF DISTRIBUTION Based on interpretations by the staff of the Commission set forth in no-action letters issued to third parties, the Company believes that the New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold and otherwise transferred by any holder thereof (other than any such holder that is an "affiliate" of the Company within the meaning of Rule 405 promulgated under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holder's business, such holder has no arrangement with any person to participate in the distribution of such New Notes and neither such holder nor any such other person is engaging in or intends to engage in a distribution of such New Notes. Accordingly, any holder who is an affiliate of the Company or any holder using the Exchange Offer to participate in a distribution of the New Notes will not be able to rely on such interpretations by the staff to the Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale transaction. Notwithstanding the foregoing, each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with any resale of New Notes received in exchange for Old Notes where such Old Notes were acquired as a result of market-making activities or other trading activities (other than Old Notes acquired directly from the Company). The Company and the Guarantors have agreed that, for a period of one year from the date of this Prospectus, they will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until April , 1999 (90 days from the date of this Prospectus), all dealers effecting transactions in the New Notes may be required to deliver a prospectus. The Company will not receive any proceeds from any sale of New Notes by broker- dealers. New Notes received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker- dealer and/or the purchasers of any such New Notes. Any broker-dealer that resells New Notes that were received by it for its own account pursuant to the Exchange Offer and any broker-dealer that participates in a distribution of such New Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of New Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver, and by delivering, a prospectus as required, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of one year from the date of this Prospectus, the Company will send a reasonable number of additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company will pay all the expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders) other than commissions or concessions of any broker-dealers. The Company and the Guarantors have agreed to indemnify the Initial Purchaser and any broker-dealers participating in the Exchange Offer against certain liabilities, including liabilities under the Securities Act. This Prospectus has been prepared for use in connection with the Exchange Offer and may be used by DLJ in connection with offers and sales related to market- making transactions in the Notes. DLJ may act as principal or agent in such transactions. Such sales will be made at prices related to prevailing market prices at the time of sale. The Company will not receive any of the proceeds of such sales. DLJ has no obligation to make a market in the Notes and may discontinue its market-making activities at any time without notice, at its sole discretion. The Company has agreed to indemnify DLJ against certain liabilities, including liabilities under the Securities Act, and to contribute to payments which DLJ might be required to make in respect thereof. LEGAL MATTERS The validity of the Notes offered hereby will be passed upon for the Company by O'Sullivan Graev & Karabell, LLP, New York, New York. Lawrence G. Graev, a director of the Company, is the Chairman of O'Sullivan Graev & Karabell, LLP. See "Certain Transactions - Legal Services." EXPERTS The consolidated financial statements and schedules of Holding as of December 28, 1996 and December 27, 1997, and for each of the three fiscal years in the period ended December 27, 1997 included in this Prospectus and the Registration Statement of which this Prospectus forms a part, have been audited by Ernst & Young LLP, independent auditors, as stated in their reports appearing elsewhere herein and are included in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. The consolidated financial statements of Venture Packaging, Inc. for the years ended September 30, 1996 and 1995, included in this Prospectus and the Registration Statement of which this Prospectus forms a part, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing elsewhere herein and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The consolidated financial statements of Norwich Injection Moulders Limited for the years ended October 31, 1997 and 1996, included in this Prospectus and the Registration Statement of which this Prospectus forms a part, have been audited by Lovewell Blake, independent auditors, as stated in their report appearing elsewhere herein and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.
INDEX TO FINANCIAL STATEMENTS PAGE BPC HOLDING AUDITED FINANCIAL STATEMENTS Report of Independent Auditors F-2 Consolidated Balance Sheets at December 27, 1997 and December 28, 1996 F-3 Consolidated Statements of Operations for the three years in the period ended December 27, 1997 F-5 Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the three years in the period ended December 27, 1997 F-6 Consolidated Statements of Cash Flows for the three years in the period ended December 27, 1997 F-7 Notes to Consolidated Financial Statements F-8 BPC HOLDING UNAUDITED INTERIM FINANCIAL STATEMENTS Condensed Consolidated Balance Sheet at September 26, 1998 F-19 Condensed Consolidated Statements of Operations for the Thirteen and Thirty- Nine Weeks ended September 26, 1998 and September 27, 1997 F-21 Condensed Consolidated Statements of Cash Flows of the Thirteen and Thirty-Nine Weeks ended September 26, 1998 and September 27, 1997 F-22 Notes to Condensed Consolidated Financial Statements F-23 ADDITIONAL AUDITED FINANCIAL STATEMENTS Audited Financial Statements of Norwich Injection Moulders Limited for the years ended October 31, 1997 and 1996 F-27 Audited Consolidated Financial Statements of Venture Packaging, Inc. for the years ended September 30, 1996 and 1995 F-46
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 and subsidiaries as of December 27, 1997 and December 28, 1996, 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 27, 1997. These financial statements are the responsibility of Holding's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of BPC Holding Corporation and subsidiaries at December 27, 1997 and December 28, 1996, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 27, 1997, in conformity with generally accepted accounting principles. /S/ERNST & YOUNG LLP Indianapolis, Indiana February 13, 1998 F-2 BPC HOLDING CORPORATION CONSOLIDATED BALANCE SHEETS (IN THOUSANDS OF DOLLARS)
DECEMBER 27, DECEMBER 28, 1997 1996 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 2,688 $ 10,192 Accounts receivable (less allowance for doubtful accounts of $1,038 at December 27, 1997 and $618 at 28,385 17,642 December 28, 1996 Inventories: Finished goods 22,029 9,100 Raw materials and supplies 7,429 4,507 ------------ ------------ 29,458 13,607 Prepaid expenses and other receivables 1,834 957 Income taxes recoverable 1,167 436 ------------ ------------ Total current assets 63,532 42,834 Assets held in trust 19,738 30,188 Property and equipment: Land 5,811 4,598 Buildings and improvements 33,891 18,290 Machinery, equipment and tooling 122,991 79,043 Automobiles and trucks 1,241 639 Construction in progress 10,357 3,476 ------------ ------------ 174,291 106,046 Less accumulated depreciation 66,073 50,382 ------------ ------------ 108,218 55,664 Intangible assets: Deferred financing and origination fees, net 10,849 9,912 Covenants not to compete, net 3,940 40 Excess of cost over net assets acquired, net 30,303 4,273 Deferred acquisition costs 13 527 ------------ ------------ 45,105 14,752 Deferred income taxes 2,049 2,003 Other 802 357 ------------ ------------ Total assets $239,444 $145,798 ============ ============ F-3
BPC HOLDING CORPORATION CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 27, DECEMBER 28, 1997 1996 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 16,732 $ 12,877 Accrued expenses and other liabilities 7,162 4,676 Accrued interest 3,612 3,286 Employee compensation and payroll taxes 7,489 5,230 Income taxes 55 117 Current portion of long-term debt 7,619 738 ------------ ------------ Total current liabilities 42,669 26,924 Long-term debt, less current portion 298,716 215,308 Accrued dividends on preferred stock 3,674 1,116 Other liabilities 3,360 - ------------ ------------ 348,419 243,348 Stockholders' equity (deficit): Class A Preferred Stock; 800,000 shares authorized; 600,000 shares issued and outstanding (net of discount of $3,062 at December 27, 1997 and $3,355 11,509 11,216 at December 28, 1996) Class B Preferred Stock; 200,000 shares authorized, 5,000 - issued and outstanding 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; 145,001 shares issued and outstanding 1 1 Nonvoting; 500,000 shares authorized; 57,788 shares issued and outstanding 1 1 Class C Common Stock; $.01 par value: Nonvoting; 500,000 shares authorized; 16,981 shares issued and outstanding - - Treasury stock: 239 shares (22) (22) Additional paid-in capital 49,374 51,681 Warrants 3,511 3,511 Retained earnings (deficit) (178,353) (163,942) ------------ ------------ Total stockholders' equity (deficit) (108,975) (97,550) ------------ ------------ Total liabilities and stockholders' equity (deficit) $ 239,444 $ 145,798 ============ ============ F-4
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. BPC HOLDING CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS OF DOLLARS)
YEAR ENDED ---------------------------------------------------------- DECEMBER 27, DECEMBER 28, DECEMBER 30, 1997 1996 1995 ------------ ------------ ------------ Net sales $226,953 $151,058 $140,681 Cost of goods sold 180,249 110,110 102,484 Gross margin 46,704 40,948 38,197 Operating expenses: Selling 11,320 6,950 5,617 General and administrative 11,505 13,769 9,500 Research and development 1,310 858 718 Amortization of intangibles 2,226 524 968 Other expense 4,144 1,578 867 ------------ ------------ ------------ Operating income 16,199 17,269 20,527 Other expenses: Loss on disposal of property and equipment 226 302 127 ------------ ------------ ------------ Income before interest and taxes 15,973 16,967 20,400 Interest: Expense (32,237) (21,364) (14,031) Income 1,991 1,289 642 ------------ ------------ ------------ Income (loss) before income taxes (14,273) (3,108) 7,011 Income taxes 138 239 678 ------------ ------------ ------------ Net income (loss) (14,411) (3,347) 6,333 ------------ ------------ ------------ Preferred stock dividends (2,558) (1,116) - ------------ ------------ ------------ Net income (loss) attributable to common shareholders $ (16,969) $ (4,463) $ 6,333 ============ ============ ============ F-5
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. BPC HOLDING CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (IN THOUSANDS OF DOLLARS)
COMMON STOCK PREFERRED STOCK ----------------- -------------- ADDITIONAL DEFERRED RETAINED CLASS CLASS CLASS CLASS CLASS TREASURY PAID-IN COST- EARNINGS A B C A B STOCK CAPITAL WARRANTS RESTRICTED (DEFICIT) TOTAL ----- ----- ----- ------- ------ ------- ---------- -------- ----------- ---------- ---------- Balance at January 1, 1995(1) $ - $ - $ - $ - $ - $ (58) $ 871 $ 4,124 $ (22) $(43,753) $(38,838) Net income - - - - - - - - - 6,333 6,333 Amortization of deferred cost-restricted stock - - - - - - - - 22 - 22 Market value adjustment - warrants - - - - - - 90 (90) - - - Purchase vested options from management - - - - - - - (1) - - (1) ----- ----- ----- ------- ----- -------- ---------- -------- ----------- ---------- ---------- Balance at December 30, 1995(1) - - - - - (58) 960 4,034 - (37,420) (32,484) Net loss - - - - - - - - - (3,347) (3,347) Market value adjustment - warrants - - - - - - (1,145) 9,399 - (8,254) - Exercise of stock options - - - - - - 1,130 - - - 1,130 Distribution on sale of equity interests - - - - - 58 (1,424) (13,433) - (114,921) (129,720) Proceeds from newly issued equity 4 2 - 14,571 - - 52,797 - - - 67,374 Payment of deferred compensation - - - - - - 479 - - - 479 Issuance of private warrants - - - (3,511) - - - 3,511 - - - Accrued dividends on preferred stock - - - - - - (1,116) - - - (1,116) Amortization of preferred stock discount - - - 156 - - - - - - 156 Purchase treasury stock from management - - - - - (22) - - - - (22) ----- ----- ----- ------- ------ ------- ---------- -------- ----------- ---------- ---------- Balance at December 28, 1996 4 2 - 11,216 - (22) 51,681 3,511 - (163,942) (97,550) Net loss - - - - - - - - - (14,411) (14,411) Sale of stock to management - - - - - - 325 - - - 325 Issuance of preferred stock - - - - 5,000 - - - - - 5,000 Accrued dividends on preferred stock - - - - - - (2,558) - - - (2,558) Amortization of preferred stock discount - - - 293 - - (74) - - - 219 ----- ----- ----- ------- ------ ------- ---------- -------- ----------- ---------- ---------- Balance at December 27, 1997 $4 $2 $- $11,500 $5,000 $(22) $49,374 - - $(178,353) $(108,975) ===== ===== ===== ======= ====== ======= ========== ======== =========== ========== ==========
____________________ (1) Old Class A and Class B Common Stock was redeemed in connection with the 1996 Transaction (see Note 9). SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. F-6 CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS OF DOLLARS)
YEAR ENDED -------------------------------------------------------- DECEMBER 27, DECEMBER 28, DECEMBER 30, 1997 1996 1995 ------------ ------------ ------------ OPERATING ACTIVITIES Net income (loss) $ (14,411) $ (3,347) $ 6,333 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 16,800 10,807 8,568 Non-cash interest expense 2,005 1,212 950 Amortization 2,226 524 968 Interest funded by assets held in trust 11,255 5,412 - Non-cash compensation - 358 (215) Write-off of deferred acquisition costs 515 - 390 Loss on sale of property and equipment 226 302 127 Deferred income taxes - 53 (964) Changes in operating assets and liabilities: Accounts receivable, net (2,290) (1,716) (1,989) Inventories 2,767 (1,710) 926 Prepaid expenses and other (137) 520 (964) receivables Other assets (225) (5) (14) Accounts payable and accrued expenses (4,516) 1,899 (1,000) Income taxes payable (61) 117 (147) ------------ ------------ ------------ Net cash provided by operating activities 14,154 14,426 12,969 INVESTING ACTIVITIES Additions to property and equipment (16,774) (13,581) (11,247) Proceeds from disposal of property and equipment 1,078 94 20 Acquisitions of businesses (86,406) (1,152) (14,158) ------------ ------------ ------------ Net cash used for investing activities (102,102) (14,639) (25,385) FINANCING ACTIVITIES Proceeds from long-term borrowings 85,703 105,000 - Payments on long-term borrowings (2,584) (500) (500) Payments on capital lease (237) (217) (198) Reclassification of cash held for acquisition - - 12,000 Exercise of management stock options - 1,130 - Proceeds from issuance of common stock 325 52,797 - Proceeds from issuance of preferred stock and warrants - - 14,571 Rollover investments and share repurchases - (125,219) - Assets held in trust - (35,600) - Net payments to public warrant holders - (4,502) - Debt issuance costs (2,763) (5,090) (178) ------------ ------------ ------------ Net cash provided by financing activities 80,444 2,370 11,124 ------------ ------------ ------------ Net increase(decrease)in cash and cash equivalents (7,504) 2,157 (1,292) Cash and cash equivalents at beginning of year 10,192 8,035 9,327 ------------ ------------ ------------ Cash and cash equivalents at end of year $ 2,688 $ 10,192 $ 8,035 ============ ============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. F-7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS OF DOLLARS, EXCEPT AS OTHERWISE NOTED) NOTE 1.ORGANIZATION BPC Holding Corporation ("Holding"), through its subsidiaries Berry Plastics Corporation ("Berry" or the "Company"), Berry Iowa Corporation ("Berry Iowa"), Berry Sterling Corporation ("Berry Sterling"), Berry Tri-Plas Corporation ("Berry Tri-Plas"), Berry Plastics Design Corporation ("Berry Design"), PackerWare Corporation ("PackerWare"), and Venture Packaging, Inc. ("Venture Packaging") and its subsidiaries Venture Packaging Midwest, Inc. and Venture Packaging Southeast, Inc., manufactures and markets plastic packaging products through its facilities located in Evansville, Indiana; Henderson, Nevada; Iowa Falls, Iowa; Charlotte, North Carolina; York, Pennsylvania; Suffolk, Virginia; Anderson, South Carolina; Monroeville, Ohio; and Lawrence, Kansas. On September 16, 1996, Berry announced the consolidation of its Winchester, Virginia facility with other Company locations, including Charlotte, North Carolina; Evansville, Indiana; and Iowa Falls, Iowa. In conjunction with the PackerWare acquisition in January 1997 (see Note 3), the Company also acquired a manufacturing facility in Reno, Nevada. This facility was closed in 1997, and its operations were consolidated into the Henderson, Nevada facility. Holding's fiscal year is a 52/53 week period ending generally on the Saturday closest to December 31. All references herein to "1997," "1996" and "1995" relate to the fiscal years ended December 27, 1997, December 28, 1996, and December 30, 1995, 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 one industry segment. The Company is a domestic manufacturer and marketer of plastic packaging, with sales concentrated in four product groups within this market: aerosol overcaps, rigid open-top containers, plastic drink cups, and housewares/lawn and garden. The Company's customers are located principally throughout the United States, without significant concentration in any one region or 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 $68 million in 1997 (excluding specialty resins). Dow Chemical Corporation is the principal supplier (approximately 56%) of the Company's total resin material requirements. The Company also uses other suppliers such as Union Carbide, Chevron, Phillips and Equistar (formerly Lyondell and Millennium) 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. 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. F-8 BPC HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 relating to the 1994 Notes and 1996 Notes and deferred financing fees are being amortized using the straight-line method over the lives of the respective debt agreements. 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 over a range of 15 to 20 years. Covenants not to compete relating to agreements made with certain selling shareholders of acquired companies are being amortized over the respective life of the agreement. Holding periodically evaluates the value of intangible assets to determine if an impairment has occurred. This evaluation is based on various analyses including reviewing anticipated cash flows. 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 1996 and 1995 financial statements have been reclassified to conform with the 1997 presentation. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME, and No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. The Statements will affect the disclosure requirement for financial statements beginning in 1998. The Company expects that the new reporting requirements will have no material effect on its financial position or results of operations. NOTE 3.ACQUISITIONS On March 10, 1995, the Company acquired through its newly formed subsidiary, Berry Sterling Corporation, substantially all of the assets and assumed certain liabilities of Sterling Products, Inc. for a purchase price of $7.3 million (the "Sterling Acquisition"). The operations of Berry Sterling Corporation are included in the Company's operations since the acquisition date using the purchase method of accounting. On December 21, 1995, the Company acquired substantially all of the assets and assumed certain liabilities of Tri-Plas, Inc. through its subsidiary, Berry Tri-Plas Corporation (formerly Berry-CPI Corporation), for $6.6 million (the "Tri-Plas Acquisition"). The operations of Berry Tri-Plas are included in the Company's operations since the acquisition date using the purchase method of accounting. F-9 On January 17, 1997, the Company acquired certain assets and assumed certain liabilities of Container Industries, Inc. ("Container Industries") of Pacoima, California for $2.9 million. The purchase was funded out of operating funds. The operations of Container Industries are included in the Company's operations since the acquisition date using the purchase method of accounting. On January 21, 1997, the Company acquired the outstanding stock of PackerWare Corporation, a Kansas corporation, for aggregate consideration of approximately $28.1 million and merged PackerWare with a newly formed, wholly owned subsidiary of the Company (with PackerWare being the surviving corporation). The purchase was primarily financed through the Credit Facility (see Note 5). The operations of PackerWare are included in the Company's operations since the acquisition date using the purchase method of accounting. On May 13, 1997, Berry Design, a newly formed, wholly owned subsidiary of the Company, acquired substantially all of the assets and assumed certain liabilities of Virginia Design Packaging Corp. ("Virginia Design") for approximately $11.1 million. The purchase was financed through the Credit Facility (see Note 5). The operations of Berry Design are included in the Company's operations since the acquisition date using the purchase method of accounting. On August 29, 1997, the Company acquired the outstanding common stock of Venture Packaging for aggregate consideration of $43.7 million and merged Venture Packaging with a newly formed subsidiary of the Company (with Venture Packaging being the surviving corporation). The purchase was primarily financed through the Credit Facility (see Note 5). Additionally, preferred stock and warrants were issued to certain selling shareholders of Venture Packaging (see Note 9). The operations of Venture Packaging are included in the Company's operations since the acquisition date using the purchase method of accounting. The pro forma results listed below are unaudited and reflect purchase accounting adjustments assuming the Sterling Acquisition and the Tri-Plas Acquisition occurred on January 1, 1995; and the Container Industries, PackerWare, Virginia Design, and Venture acquisitions occurred on December 31, 1995.
Year Ended DECEMBER 27, 1997 December 28, 1996 December 30, 1995 Net sales $ 261,531 $ 257,098 $ 157,263 Income (loss) before income taxes (17,699) (9,932) 4,274 Net income (loss) (17,837) (10,171) 3,859
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 effect. NOTE 4.INTANGIBLE ASSETS Intangible assets consist of the following:
DECEMBER 27, December 28, 1997 1996 Deferred financing and origination fees $ 14,578 $ 12,593 Covenants not to compete 4,598 100 Excess of cost over net assets acquired 32,464 5,029 Deferred acquisition costs 13 527 Accumulated amortization (6,548) (3,497) ------ ------- $ 45,105 $ 14,752 ====== =======
Excess of cost over net assets acquired increased due to the acquisitions of PackerWare, Container Industries, Virginia Design, and Venture Packaging to the extent the purchase price exceeded the fair value of the net assets acquired. F-10 The increase in covenants not to compete represents agreements entered into with certain selling shareholders of the acquired companies in 1997. NOTE 5.LONG-TERM DEBT Long-term debt consists of the following:
December 27, December 28, 1997 1996 Holding 12.50% Senior Secured Notes $105,000 $105,000 Berry 12.25% Senior Subordinated Notes 100,000 100,000 Term loans 58,300 - Revolving line of credit 25,654 - Nevada Industrial Revenue Bonds 5,000 5,500 Iowa Industrial Revenue Bonds 5,400 5,400 South Carolina Industrial Development Bonds 6,985 - Capital lease obligation payable through December 547 785 1999 Debt discount (551) (639) -------- ------- 306,335 216,046 Less current portion of long-term debt 7,619 738 -------- ------- $298,716 $215,308 ======== =======
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. In connection with the 1996 Notes, $35.6 million was placed in escrow, which has been invested in U.S. government securities, to pay three years' interest on the notes. Pending disbursement, the trustee will have a first priority lien on the escrow account for the benefit of the holders of the 1996 Notes. Funds may be disbursed from the escrow account only to pay interest on the 1996 Notes and, upon certain repurchases or redemptions of the notes, to pay principal of and premium, if any, thereon. The balance in the escrow account as of December 27, 1997 is $18.9 million. The 1996 Notes rank senior in right of payment to all existing and future subordinated indebtedness of Holding, including Holding's subordinated guarantee of the 1994 Notes (as defined hereinafter) 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 Credit Facility, the Nevada and Iowa Industrial Revenue Bonds, and the South Carolina Industrial Development 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 1994 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. The 1994 Notes are unconditionally guaranteed on a senior subordinated basis by Holding and all of Berry's subsidiaries, and there are no nonguarantor subsidiaries. Separate financial statements of the guarantors are not presented as management does not believe them to be material to investors. The net proceeds to Berry from the sale of the notes, after expenses, were $93.0 million. F-11 Berry is not required to make mandatory redemption or sinking fund payments with respect to the 1994 Notes. Subsequent to April 15, 1999, the 1994 Notes may be redeemed at the option of Berry, in whole or in part, at redemption prices ranging from 106.125% in 1999 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"), 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 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 Credit Facility, the Nevada and Iowa Industrial Revenue Bonds, and the South Carolina Industrial Development Bonds. The 1994 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. CREDIT FACILITY Concurrent with the PackerWare acquisition, the Company entered into a financing and security agreement (the "Security Agreement") with NationsBank, N.A. for a senior secured line of credit in an aggregate principal amount of $60.0 million (the "Credit Facility"). As a result of the acquisition of assets of Virginia Design and the acquisition of Venture Packaging, the Credit Facility was amended and increased to $127.2 million. The indebtedness under the Credit Facility is guaranteed by Holding and the Company's subsidiaries. The Credit Facility replaced the facility previously provided by Fleet Capital Corporation. The Credit Facility provides the Company with a $50 million revolving line of credit, subject to a borrowing base formula, a $58.3 million term loan facility and a $18.9 million standby letter of credit facility to support the Company's and its subsidiaries' obligations under the Nevada and Iowa Industrial Revenue Bonds and the South Carolina Industrial Development Bonds. The Company borrowed all amounts available under the term loan facility to finance the PackerWare, Virginia Design and Venture Packaging acquisitions. At December 27, 1997, the Company had unused borrowing capacity under the Credit Facility's borrowing base with respect to the revolving line of credit of approximately $12.5 million. 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 Security Agreement. The term loan facility requires periodic quarterly payments, varying in amount, beginning in 1998 through the maturity of the facility. Interest on borrowings on the Credit Facility will be based on the lender's base rate plus .5% or LIBOR plus 2.0%, at the Company's option. The Credit Facility contains various covenants which 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. NEVADA INDUSTRIAL REVENUE BONDS The Nevada Industrial Revenue Bonds bear interest at a variable rate (4.6% at December 27, 1997 and December 28, 1996), require annual principal payments of $0.5 million on April 1, are collateralized by irrevocable letters of credit issued by NationsBank under the Credit Facility and mature in April 2007. IOWA INDUSTRIAL REVENUE BONDS The Iowa Industrial Revenue Bonds bear interest at a variable rate (4.4% and 4.0% at December 27, 1997 and December 28, 1996, respectively), require no periodic principal payments, are collateralized by irrevocable letters of credit issued by NationsBank under the Credit Facility and mature in August 1998. The Company plans to refinance these bonds through a term loan under the Credit Facility. F-12 SOUTH CAROLINA INDUSTRIAL DEVELOPMENT BONDS The South Carolina Industrial Bonds bear interest at a variable rate (4.3% at December 27, 1997), require semi-annual principal payments of $0.3 million on April 1 and October 1 with a final balloon payment of $0.9 on April 1, 2010, and are collateralized by irrevocable letters of credit issued by NationsBank under the Credit Facility. OTHER Future maturities of long-term debt are as follows: 1998, $7,619; 1999, $17,643; 2000, $13,875; 2001, $13,510; 2002, $43,104 and $211,135 thereafter. Interest paid was $29,927, $19,744 and $13,432 for 1997, 1996 and 1995, respectively. Interest capitalized was $341, $225 and $350 for 1997, 1996 and 1995, 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 $1,661 and related accumulated amortization of $831 and $664 at December 27, 1997 and December 28, 1996, respectively. Capital lease amortization is included in depreciation expense. Total rental expense for operating leases was approximately $3,332, $2,344, and $1,515 for 1997, 1996, and 1995, 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 28, 1997 CAPITAL LEASES Operating Leases 1998 $ 301 $ 4,041 1999 301 3,064 2000 - 2,824 2001 - 2,696 2002 - 1,987 Thereafter - 1,921 ----- ----- 602 $ 16,533 Less: amount representing interest 55 ====== ----- Present value of net minimum lease payments $ 547 =====
F-13 NOTE 7.INCOME TAXES 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 27, 1997 and December 28, 1996 are as follows:
DECEMBER 27, December 28, 1997 1996 Deferred tax liabilities: Tax over book depreciation $ 11,073 $ 2,316 Other - 104 ------- ----- Total deferred tax liabilities 11,073 2,420 Deferred tax assets: Allowance for doubtful accounts 590 331 Inventory 1,391 350 Compensation and benefit accruals 1,198 719 Insurance reserves 338 207 Net operating loss carryforwards 8,372 1,916 Alternative minimum tax (AMT) credit carryforwards 2,049 2,003 ------ ----- Total deferred tax assets 13,938 5,526 ------ ----- 2,865 3,106 Valuation allowance for net deferred tax assets (816) (1,103) ------ ----- Net deferred tax assets $ 2,049 $ 2,003 ====== =====
Income tax expense consists of the following:
DECEMBER 27, 1997 December 28, 1996 December 30, 1995 Current Federal $ - $ - $ 1,404 State 138 186 237 Deferred Federal - 69 (900) State - (16) (63) ------ ----- ------ Income tax expense $ 138 $ 239 $ 678 ====== ===== ======
Holding has unused operating loss carryforwards of approximately $21.7 million for federal income tax purposes which begin to expire in 2010. AMT credit carryforwards are available to Holding indefinitely to reduce future years' federal income taxes. A tax sharing agreement is in place that allows Holding to make losses available to Berry. Income taxes paid during 1997, 1996 and 1995 approximated $47, $528, and $2,001, respectively. F-14 A reconciliation of income tax expense, computed at the federal statutory rate, to income tax expense, as provided for in the financial statements, is as follows:
Year Ended December 27, December 28, December 30, 1997 1996 1995 Federal income tax expense (benefit) at statutory $(4,853) $(1,057) $2,384 rate State income tax expense, net of federal benefit 138 112 115 Amortization of goodwill 285 - - Expenses not deductible for income tax purposes 219 51 19 Change in valuation allowance for net deferred tax 4,298 1,103 (1,869) assets Other 51 30 29 ------ ------ ------ Income tax expense $ 138 $ 239 $ 678 ====== ====== ======
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 $629, $531, and $384 for 1997, 1996 and 1995, 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"), Chase Venture Capital Associates, L.P. ("CVCA"), 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, CVCA 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"), CVCA 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. Additionally, a $2,762 bonus was paid to management employees who held unvested stock options at the time of the 1994 Transaction which is included in 1996 general and administrative expenses. 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"). Of the 2,500,000 shares of Holding Common Stock, 500,000 F-15 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 Nonvoting Common Stock (the "Class B Nonvoting Stock"), and 500,000 shares are designated Class C Nonvoting Common Stock (the "Class C Nonvoting Stock"). PREFERRED STOCK AND WARRANTS In connection with the 1996 Transaction, for aggregate consideration of $15.0 million, Mergerco 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, 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 CVCA 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. STOCK OPTION PLAN Pursuant to the provisions of the BPC Holding Corporation 1996 Stock Option Plan (the "Option Plan") which reserved 45,620 shares for future issuance, Holding has granted options to certain officers and key employees to acquire shares of Class B Nonvoting Common Stock. During 1997, amendments were approved to the Option Plan reserving an additional 6,000 shares for future issuance. These options are subject to various option 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 $108 per share. FASB 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 F-16 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. Pro forma effects on Holding's 1997, 1996 and 1995 consolidated statements of operations using the fair value method prescribed by Statement 123 have not been disclosed because there is no material difference between results obtained using this method and using the criteria set forth in APB 25. Information related to the Option Plan is as follows:
DECEMBER 27, 1997 DECEMBER 28, 1996 ----------------------------- ---------------------------- Weighted Weighted Number Average Number Average of Exercise of Exercise Shares Price Shares Price ----------------------------- ----------------------------- Options outstanding, beginning of year 43,393 $100 - $ - Options granted 5,425 106 43,768 100 Options exercised - - - - Options canceled (1,110) 100 (375) 100 ------- ------- Options outstanding, end of year 47,708 101 43,393 100 ======= =======
Option price range at end of year $100 - $108 $100 Options exercisable at end of year 13,561 8,679 Options available for grant at year end 3,912 2,227 Weighted average fair value of options granted during year $106 $100
The following table summarizes information about the options outstanding at December 27, 1997:
Weighted Range of Weighted Average Average Number Exercise Number Outstanding Remaining Contractual Exercise Exercisable at Prices at December 27, 1997 Life Price December 27, 1997 - ------------------------------------------------------------------------------------------------------------- $100 - $108 47,708 4 years $100.72 13,561
STOCKHOLDERS AGREEMENTS Holding entered into a new stockholders agreement (the "New Stockholders Agreement") dated as of June 18, 1996 with the Common Stock Purchasers, certain management stockholders and, for limited purposes thereunder, the Preferred Stock Purchasers. The New 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 entered into an amended and restated agreement with its management stockholders and International on June 18, 1996. The 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 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 The Company is party to a management agreement (the "Management Agreement") with First Atlantic Capital, Ltd. ("First Atlantic"). In connection with the 1996 Transaction, Holding paid a fee of $1,250 plus reimbursement for out-of- F-17 pocket expenses to First Atlantic for advisory services, including originating, structuring and negotiating the 1996 Transaction. First Atlantic also received advisory fees of $966 for originating, structuring and negotiating the 1997 acquisitions and a $100 advisory fee in both March and December 1995 for originating, structuring and negotiating the Sterling Products acquisition and the Tri-Plas acquisition, respectively. In consideration of financial advisory and management consulting services, the Company paid First Atlantic fees and expenses of $771, $788 and $817 for fiscal 1997, 1996, and 1995, respectively. NOTE 11.FAIR VALUE OF FINANCIAL INSTRUMENTS INFORMATION The Company's financial instruments generally consist of cash and cash equivalents and the Company's long-term debt. The carrying amounts of the Company's financial instruments approximate fair value at December 27, 1997, except for the 1994 Notes and the 1996 Notes for which the fair value exceed the carrying value by approximately $10.0 million and $10.5 million, respectively. NOTE 12.SUMMARY UNAUDITED FINANCIAL INFORMATION (IN THOUSANDS) The following summarizes unaudited financial information of Holding's wholly owned subsidiary, Berry Plastics Corporation and subsidiaries:
DECEMBER 27, DECEMBER 28, 1997 1996 ------------ ------------ CONSOLIDATED BALANCE SHEETS Current assets $ 62,824 $ 42,445 Property and equipment - net of accumulated depreciation 108,218 55,664 Other noncurrent assets 44,480 12,046 Current liabilities 42,158 26,220 Noncurrent liabilities 205,172 113,113 Equity (deficit) (31,808) (29,177)
YEAR ENDED ------------------------------------------ DECEMBER 27, DECEMBER 28, DECEMBER 30, 1997 1996 1995 ------------ ------------ ------------ CONSOLIDATED STATEMENTS OF OPERATIONS Net sales $226,954 $151,058 $140,681 Cost of goods sold 180,249 110,110 102,484 Income (loss) before income taxes (2,493) 6,490 6,861 Net income (loss) (2,631) 5,989 6,183
F-18 BPC HOLDING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars)
SEPTEMBER 26, DECEMBER 27, 1998 1997 (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 7,122 $ 2,688 Accounts receivable (less allowance for doubtful accounts of $844 at September 26, 1998 and $1,038 at December 27, 1997) 35,208 28,385 Inventories: Finished goods 19,538 22,029 Raw materials and supplies 6,885 7,429 ------- ------- 26,423 29,458 Prepaid expenses and other receivables 2,427 1,834 Income taxes recoverable 355 1,167 ------- ------- Total current assets 71,535 63,532 Assets held in trust 13,121 19,738 Property and equipment: Land 6,663 5,811 Buildings and improvements 31,298 33,891 Machinery, equipment and tooling 135,190 122,991 Automobiles and trucks 1,341 1,241 Construction in progress 9,052 10,357 ------- ------- 183,544 174,291 Less accumulated depreciation 78,980 66,073 ------- ------- 104,564 108,218 Intangible assets: Deferred financing and origination fees, net 11,249 10,849 Covenants not to compete, net 3,597 3,940 Excess of cost over net assets acquired, net 41,228 30,303 Deferred acquisition costs 163 13 ------- ------- 56,237 45,105 Deferred income taxes 2,049 2,049 Other 1,015 802 ------- ------- Total assets $248,521 $239,444 ======= =======
F-19 BPC HOLDING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (continued) (In Thousands of Dollars)
SEPTEMBER 26, DECEMBER 27, 1998 1997 (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 17,383 $ 16,732 Accrued expenses and other liabilities 10,005 7,162 Accrued interest 10,020 3,612 Employee compensation and payroll taxes 10,680 7,489 Income taxes 147 55 Current portion of long-term debt 18,280 7,619 ------- ------- Total current liabilities 66,515 42,669 Long-term debt, less current portion 290,111 298,716 Accrued dividends on preferred stock 6,294 3,674 Other liabilities 679 3,360 ------- ------- 363,599 348,419 Stockholders' equity (deficit): Class A Preferred Stock; 800,000 shares authorized; 600,000 shares issued and outstanding (net of discount of $2,843 at September 26, 1998 and $3,062 at December 27, 11,728 11,509 1997) Class 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 1 1 and outstanding Nonvoting; 500,000 shares authorized; 259,000 shares 3 3 issued and outstanding Class B Common Stock; $.01 par value: Voting; 500,000 shares authorized; 144,936 shares issued 1 1 and outstanding Nonvoting; 500,000 shares authorized; 58,168 shares 1 1 issued and outstanding Class C Common Stock; $.01 par value: Nonvoting; 500,000 shares authorized; 16,960 shares - - issued and outstanding Treasury stock: 726 shares (81) (22) Additional paid-in capital 46,616 49,374 Warrants 3,511 3,511 Retained earnings (deficit) (181,970) (178,353) Foreign currency translation gain 112 - ------- ------- Total stockholders' equity (deficit) (115,078) (108,975) ------- ------- Total liabilities and stockholders' equity (deficit) $ 248,521 $ 239,444 ======= =======
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. F-20 BPC HOLDING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands of Dollars)
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 26, SEPTEMBER 27, SEPTEMBER 26, SEPTEMBER 27, 1998 1997 1998 1997 (UNAUDITED) (UNAUDITED) Net sales $68,800 $58,780 $205,116 $164,715 Cost of goods sold 51,066 46,887 151,083 129,054 ------- ------- ------- ------- Gross margin 17,734 11,893 54,033 35,661 Operating expenses: Selling 3,769 2,955 10,881 8,048 General and administrative 4,502 2,889 13,301 8,613 Research and development 488 333 1,231 935 Amortization of intangibles 776 505 2,483 1,129 Other 877 1,042 3,240 2,783 ------- ------- ------- ------- Operating income 7,322 4,169 22,897 14,153 Other income and expense: Loss (gain) on disposal of property and equipment 62 (1) 492 89 ------- ------- ------- ------- Income before interest and income taxes 7,260 4,170 22,405 14,064 Interest: Expense (9,083) (8,117) (26,524) (23,667) Income 259 443 833 1,598 ------- ------- ------- ------- Loss before income taxes (1,564) (3,504) (3,286) (8,005) Income tax expense 306 58 331 151 ------- ------- ------- ------- Net loss (1,870) (3,562) (3,617) (8,156) Preferred stock dividends (837) (710) (2,620) (1,757) ------- ------- ------- ------- Net loss attributable to common stockholders $ (2,707) $ (4,272) $ (6,237) $ (9,913) ======= ======= ======= =======
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. F-21 BPC HOLDING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of Dollars)
THIRTY-NINE WEEKS ENDED SEPTEMBER 26, SEPTEMBER 27, 1998 1997 (UNAUDITED) OPERATING ACTIVITIES Net loss $ (3,617) $ (8,156) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 15,466 11,493 Non-cash interest expense 1,335 1,139 Amortization 2,483 1,129 Write off of financing fees - 390 Interest paid from assets held in trust 6,617 5,052 Loss on sale of property and equipment 492 89 Changes in operating assets and liabilities: Accounts receivable, net (3,590) (8,724) Inventories 3,492 2,883 Prepaid expenses and other receivables 316 (83) Accounts payable and accrued expenses 5,935 4,193 Other assets (349) 209 ------- ------- Net cash provided by operating activities 28,580 9,614 INVESTING ACTIVITIES Additions to property and equipment (13,540) (8,795) Proceeds from disposal of property and equipment 4,452 1,092 Acquisitions of businesses (15,948) (83,529) ------- ------- Net cash used for investing activities (25,036) (91,232) FINANCING ACTIVITIES Proceeds from borrowings 42,254 79,296 Payments on borrowings (40,244) (2,991) Debt issuance costs (1,141) (2,761) Proceeds from issuance of common stock 80 324 Purchase of stock from management (59) - ------- ------- Net cash provided by financing activities 890 73,868 ------- ------- Net increase (decrease) in cash and cash 4,434 (7,750) equivalents Cash and cash equivalents at beginning of period 2,688 10,192 ------- ------- Cash and cash equivalents at end of period $ 7,122 $ 2,442 ======= =======
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. F-22 BPC HOLDING CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of BPC Holding Corporation and its subsidiaries (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Preparation of the financial statements require management to make estimates that affect the required amounts of assets, liabilities, revenues, and expenses. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full fiscal year. The accompanying financial statements include the results of BPC Holding Corporation ("Holding") and its wholly owned subsidiary, Berry Plastics Corporation ("Berry"), and its wholly owned subsidiaries: Venture Packaging, Inc. ("Venture Packaging"), Venture Packaging Midwest, Inc., Venture Packaging Southeast, Inc., PackerWare Corporation ("PackerWare"), Berry Iowa Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, Berry Plastics Design Corporation ("Berry Design"), NIM Holdings Limited ("NIM Holdings"), Norwich Injection Moulders Limited ("Norwich Moulders"), and AeroCon, Inc. For further information, refer to the consolidated financial statements and footnotes thereto included in Holding's and Berry's Form 10-K's filed with the Securities and Exchange Commission for the year ended December 27, 1997. Certain amounts on the 1997 financial statements have been reclassified to conform with the 1998 presentation. 2. ACQUISITIONS On January 17, 1997, Berry acquired certain assets and assumed certain liabilities of Container Industries, Inc. ("Container Industries") of Pacoima, California for $2.9 million. The purchase was funded out of operating funds. The operations of Container Industries are included in Berry's operations since the acquisition date using the purchase method of accounting. On January 21, 1997, Berry acquired the outstanding stock of PackerWare, a Kansas corporation, for aggregate consideration of approximately $28.1 million by way of a merger of PackerWare with a newly formed, wholly owned subsidiary of Berry (with PackerWare being the surviving corporation). The purchase was primarily financed through the Credit Facility (see Note 3). The operations of PackerWare are included in Berry's operations since the acquisition date using the purchase method of accounting. On May 13, 1997, Berry Design, a newly formed, wholly owned subsidiary of Berry, acquired substantially all of the assets and assumed certain liabilities of Virginia Design Packaging Corp. ("Virginia Design") for approximately $11.1 million. The purchase was financed through the Credit Facility (see Note 3). The operations of Berry Design are included in Berry's operations since the acquisition date using the purchase method of accounting. On August 29, 1997, Berry acquired the outstanding common stock of Venture Packaging for aggregate consideration of $43.7 million by way of a merger of Venture Packaging with a newly formed subsidiary of Berry (with Venture Packaging being the surviving corporation). The purchase was primarily financed through the Credit Facility (see Note 3). Additionally, preferred stock and warrants were issued to certain selling shareholders of Venture Packaging. The operations of Venture Packaging are included in Berry's operations since the acquisition date using the purchase method of accounting. 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 Credit Facility (see Note 3). The operations of Norwich Moulders are included in Berry's operations since the acquisition date using the purchase method of accounting. F-23 The pro forma results listed below are unaudited and reflect purchase accounting adjustments assuming the Container Industries, PackerWare, Virginia Design, Venture Packaging and Norwich Moulders acquisitions occurred on December 29, 1996.
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 27, 1997 SEPTEMBER 27, 1997 SEPTEMBER 26, 1998 -------------------------------------------------------------------- (In Thousands) Net sales $ 72,995 $ 205,008 $ 211,977 Loss before income taxes (3,502) (8,621) (4,873) Net loss attributable to common stockholders (4,279) (10,714) (6,144)
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 date, 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 effect. 3. LONG-TERM DEBT Long-term debt consists of the following:
SEPTEMBER 26, DECEMBER 27, 1998 1997 --------------------------------------------- (In Thousands) Holding 12.50% Senior Secured Notes $105,000 $105,000 Berry 12.25% Senior Subordinated Notes 125,000 100,000 Term loans 72,340 58,300 Revolving line of credit - 25,654 Nevada Industrial Revenue Bonds 4,500 5,000 Iowa Industrial Revenue Bonds - 5,400 South Carolina Industrial Development Bonds - 6,985 Capital lease obligations 682 547 Debt premium (discount), net 869 (551) ------- ------- 308,391 306,335 Less current portion of long-term debt 18,280 7,619 ------- ------- $290,111 $298,716 ======= =======
The current portion of long-term debt at September 26, 1998 consists of $17.5 million of quarterly installments on the term loans, $0.5 million of repayments on the Nevada Industrial Revenue Bonds and the monthly principal payments related to capital lease obligations. On August 24, 1998, Berry completed an offering of $25.0 million aggregate principal amount of 12.25% Series B Senior Subordinated Notes due 2004 (the "1998 Notes"). The 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, 1998. The 1998 Notes are unconditionally guaranteed on a senior subordinated basis by Holding and all of Berry's subsidiaries. The net proceeds to Berry from the sale of the 1998 Notes, after expenses, were $25.2 million. Berry applied the net proceeds to repay borrowings under Berry's revolving line of credit. F-24 The 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 Credit Facility and the Nevada Industrial Revenue Bonds. Concurrent with the PackerWare acquisition, Berry entered into a financing and security agreement with NationsBank, N.A. (the "Credit Agreement") for a senior secured line of credit in an aggregate principal amount of $60.0 million (the "Credit Facility"). As a result of the acquisition of assets of Virginia Design and the acquisition of Venture Packaging, the Credit Facility was amended and increased to $127.2 million. Concurrently with the Norwich Moulders acquisition, the Credit Facility was again amended and increased to $132.6 million plus an additional revolving line of credit facility of 1.5 million (the "UK Revolver") and a term loan facility of 4.5 million (the "UK Term Debt"). The indebtedness under the Credit Facility is guaranteed by Holding and Berry's subsidiaries. The indebtedness under the Credit Facility is guaranteed by Holding and Berry's subsidiaries. The amended Credit Facility provides the Company with a $50.0 million revolving line of credit, subject to a borrowing base formula, a $64.4 million term loan facility; the U.K. Revolver, subject to a borrowing base formula; the UK Term Debt, and a $4.6 million standby letter of credit facility to support Berry's obligation under the Nevada Industrial Revenue Bond. The Credit Facility also provides the Company with a term loan facility which was used to finance the repayment of the South Carolina Industrial Development Bonds as discussed below. Based on the borrowing formula as of September 26, 1998, Berry had approximately $40.4 million of additional available credit under the revolving line of credit. The Credit Facility matures on January 21, 2002 unless previously terminated by Berry or by the lenders upon an Event of Default as defined in the Credit Agreement. The term loan facility requires periodic quarterly payments, varying in amount, through the maturity of the facility. Interest on borrowings on the Credit Facility will be based on the lender's base rate plus .5% or LIBOR plus 2.0%, at Berry's option. Following receipt of the financial statements, the applicable interest rate margin can be adjusted quarterly, excluding the UK Revolver and the UK Term Debt, based on the Company's ratio of funded debt to EBITDA. The Credit Facility contains various covenants which 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. On July 30, 1998, the Iowa Industrial Revenue Bonds were repaid by the Company through borrowings under its term debt as provided in the Credit Facility. The South Carolina Industrial Development Bonds were repaid by the Company on August 27, 1998, in conjunction with the closing and sale of the Anderson, South Carolina facility. The difference between the net proceeds from the sale of the facility and the repayment of the development bonds and other related liabilities of approximately $3.0 million has been financed in October 1998 with borrowings under a term loan within the Credit Facility. 4. BERRY PLASTICS CORPORATION SUMMARY FINANCIAL INFORMATION The following summarizes financial information of Holding's wholly owned subsidiary, Berry Plastics Corporation, and its subsidiaries.
SEPTEMBER 26, DECEMBER 27, 1998 1997 ---------------- ----------------- CONSOLIDATED BALANCE SHEETS (In Thousands) Current assets $ 70,555 $ 62,824 Property and equipment - net of accumulated depreciation 104,564 108,218 Other noncurrent assets 55,472 44,480 Current liabilities 62,801 42,158 Noncurrent liabilities 185,790 205,172 Equity (deficit) (18,000) (31,808)
F-25
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 26, SEPTEMBER 27, SEPTEMBER 26, SEPTEMBER 27, 1998 1997 1998 1997 --------------------------------------------------------------------- STATEMENT OF OPERATIONS (In Thousands) Net sales $ 68,800 $ 58,780 $ 205,116 $ 164,715 Cost of goods sold 51,066 46,887 151,083 129,054 Income (loss) before income taxes 1,652 (399) 6,223 1,014 Net income (loss) 1,346 (404) 5,892 912
5. RECENT ACCOUNTING PRONOUNCEMENTS On December 28,1997, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (FAS 130) which establishes new rules for the reporting and display of comprehensive income and its components (net income and "other comprehensive income"). Adoption of the Statement had no material impact on the Company's financial position. Comprehensive losses were $1.8 million and $3.5 million for the thirteen weeks and thirty-nine weeks ended September 26, 1998, respectively. In June 1997, the Financial Accounting Standards Board issued Statement No. 131, "Disclosure About Segments of an Enterprise and Related Information" ("FAS 131"). FAS 131 establishes requirements for reporting information about operating segments in annual and interim reports and is effective for the Company in 1998, but need not be applied to interim financial statements in the initial year of application. FAS 131 may require a change in the Company's financial reporting; however, the extent of the change, if any, has not been determined. 6. SUBSEQUENT TRANSACTION On October 16, 1998, Knight Plastics, Inc., 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 Credit Facility's revolving line of credit. F-26 NORWICH INJECTION MOULDERS LIMITED ACCOUNTS 31ST OCTOBER 1997 CONTENTS PAGE Report of the directors 1 - 2 Report of the auditors 3 Profit and loss account 4 Balance sheet 5 Cash flow statement 6 Notes to the accounts 7 - 18 F-27 Page 1 NORWICH INJECTION MOULDERS LIMITED DIRECTORS J E Barlow (Chairman) A R Sandell (Managing) T D Johnson SECRETARY REGISTERED OFFICE Mrs J Barlow Stanford Tuck Road North Walsham Norfolk AUDITORS Lovewell Blake Chartered Accountants 102 Prince of Wales Road Norwich REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31ST OCTOBER 1997 The directors present herewith the audited accounts for the year ended 31st October 1997. DIRECTORS' RESPONSIBILITIES Company law requires the directors to prepare accounts that give a true and fair view of the state of affairs of the company and of the profit or loss for its financial year. In doing so the directors are required to: - - select suitable accounting policies and apply them consistently; - - make judgements and estimates that are reasonable and prudent; - - state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts; - - prepare the accounts on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for maintaining proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the accounts comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. REVIEW OF ACTIVITIES The company's main activities are unchanged since last year and are principally those of the production of plastic goods by injection moulding. In the opinion of the directors the company will be able to maintain its present level of turnover for the foreseeable future. The profit for the year has been added to the balance on the profit and loss account. F-28 Page 2 NORWICH INJECTION MOULDERS LIMITED REPORT OF THE DIRECTORS (CONTINUED) DIRECTORS The directors named above held office throughout the year. In accordance with the articles of association T D Johnson will retire at the annual general meeting and, being eligible, offers himself for re-election. The interests of the directors of the company at 31st October 1997 in the shares of the company, according to the register required to be kept by Section 325 of the Companies Act 1985 were as follows: 31ST OCTOBER 1997 31ST OCTOBER 1996 ORDINARY SHARES ORDINARY SHARES FULLY PAID FULLY PAID J E Barlow 60 60 A R Sandell 29 29 T D Johnson 11 11 MARKET VALUE OF INTEREST IN LAND In the opinion of the directors, the current open market value on an existing use basis of the freehold land and buildings exceeds the net book value as shown in the balance sheet at the 31st October 1997 by 80,711. CLOSE COMPANY PROVISIONS The company is a close company within the provisions of the Income and Corporation Taxes Act 1988. AUDITORS A resolution to re-appoint Lovewell Blake will be proposed at the annual general meeting. By order of the board J BARLOW Secretary 22{nd} December 1997 North Walsham F-29 Page 3 REPORT OF INDEPENDENT AUDITORS TO THE DIRECTORS OF NORWICH INJECTION MOULDERS LIMITED We have audited the balance sheets of Norwich Injection Moulders Limited as at 31 October 1997 and 31 October 1996, and the related profit and loss accounts and cash flow statements for each of the two years in the period ended 31 October 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with United Kingdom auditing standards which do not differ in any significant respect from United States generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Norwich Injection Moulders Limited at 31 October 1997 and 1996, and the results of its operations and its cash flows for each of the two years in the period ended 31 October 1997 in conformity with accounting principles generally accepted in the United Kingdom which differ in certain respects from those generally accepted in the United States (see Note 24 of Notes to the Accounts). /S/ LOVEWELL BLAKE Chartered Accountants Norwich, England 22{nd} December 1997, except for Note 24 Differences between United Kingdom and United States Generally Accepted Accounting Principles as to which the date is 3{rd} September 1998 F-30 Page 4 NORWICH INJECTION MOULDERS LIMITED PROFIT AND LOSS ACCOUNT (In pound sterling, unless otherwise noted)
YEAR ENDED YEAR ENDED 31 OCTOBER 31 OCTOBER NOTES 1997 1996 Turnover 2 8,117,742 7,308,368 Change in stock of finished goods 5,908 26,405 --------- --------- 8,123,650 7,334,773 Other operating income 3 21,738 6,823 --------- --------- 8,145,388 7,341,596 Raw materials and consumables 3,772,741 3,521,241 Other external charges 677,847 616,428 Staff costs 4 1,510,732 1,421,872 Depreciation 6 441,666 338,363 Other operating charges 537,182 482,605 Interest payable and similar charges 7 103,769 120,943 --------- --------- 7,043,937 6,501,452 --------- --------- Profit on ordinary activities before taxation 8 1,101,451 840,144 Tax on profit on ordinary activities 9 261,160 4,618 --------- --------- Profit on ordinary activities after taxation * 840,291 835,526 Balance 1st November 1996 2,209,809 1,374,283 --------- --------- Balance 31st October 1997 3,050,100 2,209,809 ========= ========= There are no movements in shareholders funds other than the increase to the retained profits for the years ended 31st October 1997 and 31st October 1996. There were no recognised gains or losses other than the profit of 840,291 in the year ended 31st October 1997 and 835,526 in the year ended 31st October 1996. * A summary of the significant adjustments to the profit on ordinary activities after taxation (net income) that would be required if US Generally Accepted Accounting Principles were to be applied instead of those generally accepted in the United Kingdom is set out in Note 24 of Notes to the Accounts.
F-31 Page 5 NORWICH INJECTION MOULDERS LIMITED BALANCE SHEET (In pound sterling, unless otherwise noted)
31 OCTOBER 31 OCTOBER NOTES 1997 1996 FIXED ASSETS Tangible assets 10 3,839,712 3,507,176 CURRENT ASSETS Stock and work in progress 11 342,324 313,971 Debtors 12 1,622,209 1,582,819 Bank balances 510,081 560,087 Cash in hand 464 338 --------- --------- 2,475,078 2,457,215 CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR 13 2,384,216 2,696,054 --------- --------- NET CURRENT ASSETS/(LIABILITIES) 90,862 (238,839) --------- --------- TOTAL ASSETS LESS CURRENT LIABILITIES 3,930,574 3,268,337 CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 14 880,374 1,058,428 --------- --------- 3,050,200 2,209,909 ========= ========= CAPITAL AND RESERVES* Called up share capital 16 100 100 Profit and loss account 3,050,100 2,209,809 --------- --------- 3,050,200 2,209,909 ========= ========= J E BARLOW ) ) Directors A R SANDELL ) The statutory accounts were approved by the board of directors on 22{nd} December 1997. * A summary of the significant adjustments to capital and reserves (shareholders funds) that would be required if US Generally Accepted Accounting Principles were to be applied instead of those generally accepted in the United Kingdom is set out in Note 24 of Notes to the Accounts.
F-32 Page 6 NORWICH INJECTION MOULDERS LIMITED CASH FLOW STATEMENT (In pound sterling, unless otherwise noted)
YEAR ENDED YEAR ENDED 31 OCTOBER 31 OCTOBER NOTES 1997 1996 CASH FLOW FROM OPERATING ACTIVITIES 20 1,520,397 1,443,181 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 21 (84,576) (122,884) TAXATION (193,817) (70,214) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 21 (980,793) (635,844) ________ ________ Cash inflow before use of liquid resources and financing 261,211 614,239 FINANCING - Decrease in debt 21 (251,086) (9,564) - Calls on share capital 21 - 85 ________ ________ INCREASE IN CASH IN THE YEAR 22 10,125 604,760 ======== ======== RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT INCREASE IN CASH IN THE YEAR 10,125 604,760 Cash outflow from decrease in debt and lease financing 21 251,086 9,564 ________ ________ MOVEMENT IN NET DEBT IN THE PERIOD 261,211 614,324 NET DEBT AT 1ST NOVEMBER (921,849) (1,536,173) ________ ________ NET DEBT AT 31ST OCTOBER 22 (660,638) (921,849) ======== ======== The significant differences between the cashflow statement presented above and that required under US Generally Accepted Accountancy Principles are set out in Note 24 of Notes to the Accounts.
F-33 Page 7 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (In pound sterling, unless otherwise noted) 1. PRINCIPAL ACCOUNTING POLICIES (a) BASIS OF ACCOUNTING The accounts are prepared under the historical cost basis of accounting and in accordance with applicable UK accounting standards. (b) DEPRECIATION Depreciation is provided on fixed assets at rates sufficient to write off, on a straight line basis, the cost of the assets over their expected useful lives. It is the company's policy to maintain its freehold property to such a standard that its residual disposal value will at least equal its book value and accordingly no provision for depreciation has been made. The principal annual rates used for this purpose which are consistent with those of last year are: Freehold land and buildings Not depreciated Leasehold property expenditure Over period of the lease Plant and machinery 10% - 50% Motor vehicles 20% - 25% Loose tools Written off on a usage basis (c) STOCK AND WORK IN PROGRESS Stock and work in progress are stated at the lower of cost and net realisable value. In general cost is determined on a first in first out basis and includes transport and handling costs. In the case of work in progress cost includes all direct expenditure and production overheads based on the normal level of activity. Net realisable value is the price at which stock can be sold in the normal course of business after allowing for the costs of realisation and, where appropriate, the cost of conversion from their existing state to a finished condition. Provision is made where necessary for obsolete, slow moving and defective stock. (d) FINANCE LEASE AND HIRE PURCHASE CONTRACTS Assets held under finance leases, other than hire purchase contracts, are capitalised at their fair value and are depreciated over either the lease term, or the useful working life of the asset, whichever is the shorter. Fair value is usually the cost at which the company could have purchased the asset. Future rental payments due during the primary lease period are shown as creditors. The difference between the total primary lease payments and the fair value of the asset is treated as a finance charge and is charged to the profit and loss account on a straight line basis over the primary lease period. Secondary lease rentals are charged to profit and loss account in the period in which they are paid. F-34 Page 8 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 1. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) (d) FINANCE LEASE AND HIRE PURCHASE CONTRACTS (CONTINUED) Assets held under hire purchase contracts are capitalised at their fair value and are depreciated over their useful working life on the same basis as set out in note 1(b). (e) OPERATING LEASES Operating lease rentals are charged to profit and loss account in the period in which they are incurred. (f) DEFERRED TAXATION Provision is made for deferred taxation where, in the opinion of the directors, it is likely to be payable in the foreseeable future. (g) PENSION SCHEME The company operates defined contribution schemes. The assets of the schemes are held separately from those of the company in independently administered funds. The charge in the profit and loss account represents the contributions payable by the company to the funds for the year. (h) FOREIGN CURRENCIES Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling on the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Significant differences arising due to exchange fluctuations have been reflected in the profit and loss account. 2. TURNOVER The contribution to turnover and profit before taxation arises from the production of plastic goods by injection moulding. 1997 1996 Geographical analysis of turnover United Kingdom 7,890,743 7,160,110 Rest of Europe 226,999 148,258 --------- --------- 8,117,742 7,308,368 ========= ========= 3. OTHER OPERATING INCOME 1997 1996 Training grants 500 2,589 Interest received (gross) 21,238 4,234 --------- --------- 21,738 6,823 ========= ========= F-35 Page 9 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 4. EMPLOYEE INFORMATION The average number of persons employed by the company during the year including directors is analysed below: 1997 1996 Manufacturing and packing 57 52 Selling and administration 18 17 Former employees 2 2 --- --- 77 71 === === 1997 1996 Staff costs Wages and salaries paid to the company's employees 1,313,859 1,264,343 Pensions to former employees 14,905 14,905 Social security costs 139,201 107,619 Pension contributions 42,767 35,005 --------- --------- 1,510,732 1,421,872 ========= ========= 5. Directors' emoluments 1997 1996 Management remuneration 271,217 363,153 Pension contributions 15,818 16,043 Taxable benefits 27,301 28,608 --------- --------- 314,336 407,804 ========= ========= The directors' emoluments disclosed above (excluding pension contributions) include amounts paid to: The Highest Paid Director 106,903 137,910 Retirement benefits in respect of the three directors are accruing under a defined contribution scheme. The contributions paid in respect of the highest paid director were 5,488 ( 5,583 in the year ended 31 October 1996). F-36 Page 10 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 6. DEPRECIATION The charge for the year is made up as under: 1997 1996 Depreciation of tangible fixed assets Owned assets 342,082 193,832 Assets held under finance lease and hire purchase contracts 116,103 169,931 --------- --------- 458,185 363,763 Profit on sale of tangible fixed assets (16,519) (25,400) --------- --------- 441,666 338,363 ========= ========= 7. INTEREST PAYABLE AND SIMILAR CHARGES 1997 1996 Bank loan and overdraft 63,718 69,425 Finance leases and hire purchase contracts expiring within five years 40,051 51,518 --------- --------- 103,769 120,943 ========= ========= 8. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION The profit on ordinary activities before taxation is stated after charging the following amounts: 1997 1996 Hire of equipment 55,698 71,616 Rent of land and buildings 22,080 22,127 Auditors remuneration 3,000 3,000 9. TAX ON PROFIT ON ORDINARY ACTIVITIES 1997 1996 Corporation tax for the year at 30% (1996 30%) Taxation payable 261,163 193,845 Overprovision in previous year (3) - Decrease in provision for deferred tax - (189,227) --------- --------- 261,160 4,618 ========= ========= F-37 Page 11 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 10. TANGIBLE FIXED ASSETS EXPENDITURE ON SHORT FREEHOLD LEASEHOLD PLANT AND MOTOR TOTAL PROPERTY PROPERTY MACHINERY VEHICLES COST 1st November 1995 3,945,292 1,190,947 298 2,628,349 125,698 Additions 967,725 1,719 - 993,038 32,968 Disposals (168,686) - - (137,011) (31,675) --------- --------- --------- --------- --------- 31st October 1996 4,744,331 1,192,666 298 3,424,376 126,991 Additions 900,630 26,623 - 779,975 94,032 Disposals (365,688) - - (276,915) (88,773) --------- --------- --------- --------- --------- 31st October 1997 5,279,273 1,219,289 298 3,927,436 132,250 ========= ========= ========= ========= ========= DEPRECIATION 1st November 1995 966,628 - 237 914,846 51,545 Disposals (93,236) - - (70,136) (23,100) Charge for the year 363,763 - 12 334,547 29,204 --------- --------- --------- --------- --------- 31st October 1996 1,237,155 - 249 1,179,257 57,649 Disposals (255,779) - - (193,173) (62,606) Charge for the year 458,185 - 12 431,284 26,889 --------- --------- --------- --------- --------- 31st October 1997 1,439,561 - 261 1,417,368 21,932 ========= ========= ========= ========= ========= Net book amount 31st October 1997 3,839,712 1,219,289 37 2,510,068 110,318 ========= ========= ========= ========= ========= 31st October 1996 3,507,176 1,192,666 49 2,245,119 69,342 ========= ========= ========= ========= ========= 31st October 1995 2,978,664 1,190,947 61 1,713,503 74,153 ========= ========= ========= ========= ========= Details of fixed assets held under finance leases and hire purchase contracts, which are included in the relevant headings in the table above, are as follows: 1997 1996 Net book value at 31st October 1997 808,682 1,080,707 ========= =========
F-38 Page 12 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 11. STOCK AND WORK IN PROGRESS The amounts attributable to the different categories are as follows: 1997 1996 Raw materials 200,506 200,719 Packing materials 9,698 11,492 Finished goods 87,466 81,558 Work in progress 44,654 20,202 --------- --------- 342,324 313,971 ========= ========= 12. DEBTORS 1997 1996 Trade debtors 1,595,311 1,562,039 Prepayments 26,898 20,780 --------- --------- 1,622,209 1,582,819 ========= ========= 13. CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR 1997 1996 Bank overdraft (see note (a) below) - 60,005 Bank loan (see note (b) below) 36,664 36,664 --------- --------- Bank loan and overdraft 36,664 96,669 Trade creditors 1,578,688 1,743,509 Corporation tax payable 1 August 1998 (1996 - 1 August 1997) 261,163 193,820 Taxation and social security payments 163,762 130,944 Hire purchase obligations (see note (c) below) 254,145 327,177 Accruals 89,794 203,935 --------- --------- 2,384,216 2,696,054 ========= ========= (a) Secured by a fixed and floating charge over the other assets of the company. (b) Secured by a mortgage on the freehold premises. (c) Secured on the assets concerned. F-39 Page 13 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 14. CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 1997 1996 Bank loan bearing interest at various rates repayable by quarterly instalments (see note (a) below) 705,742 742,406 Hire purchase obligations (see note (b) below) 174,632 316,022 --------- --------- 880,374 1,058,428 ========= ========= (a) Secured by a mortgage on the freehold premises (b) Secured on the assets concerned. The bank loan above analysed by due dates of repayment Repayable between one and two years 36,664 36,664 Repayable between two and five years 109,992 109,992 Repayable after more than five years by instalments 559,086 595,750 --------- --------- 705,742 742,406 ========= ========= 15. DEFERRED TAXATION The potential liability for 1997 amounted to 373,364 at 31% and that for 1996 to 316,866 at 33%. No provision is made in the accounts. 16. SHARE CAPITAL 1997 1996 AUTHORISED Ordinary shares of 1 each 100 100 === === CALLED UP SHARE CAPITAL Shares issued at 1 each 100 100 === === 17. LEASING COMMITMENTS The company leases land and building in Norwich. The lease has an unexpired term of two years, at a rental of 22,080. 18. CAPITAL EXPENDITURE 1997 1996 Authorised and contracted for 43,652 - ====== ====== F-40 Page 14 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 19. CONTROLLING INTEREST Mr J E Barlow owns 60% of the issued share capital of the company and, as such, controls the company. 20. Notes to cashflow statement Reconciliation of operating profit to net cash inflow from operating activities. 1997 1996 Operating profit 1,101,451 840,144 Depreciation 441,666 338,363 Interest payable and similar charges 103,769 120,943 Interest received (21,238) (4,234) Increase in stocks (28,353) (82,907) Increase in debtors (39,390) (348,246) (Decrease)/Increase in creditors (37,508) 579,118 --------- --------- Net cash inflow from operating activities 1,520,397 1,443,181 ========= ========= 21. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 1997 1996 Interest received 21,238 4,234 Interest paid (63,598) (73,625) Interest element of finance lease rental payments (42,216) (53,493) --------- --------- NET CASH (OUTFLOW) FOR RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (84,576) (122,884) ========= ========= CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 1997 1996 Purchase of tangible fixed assets (1,107,221) (736,694) Proceeds from the sale of fixed assets 126,428 100,850 --------- --------- NET CASH (OUTFLOW) FOR CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (980,793) (635,844) ========= ========= F-41 Page 15 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 21. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT (CONTINUED) FINANCING 1997 1996 Loans repaid by company (36,664) (36,664) Hire purchase advances to company 137,700 386,953 Hire purchase and finance lease repayments (352,122) (359,853) Calls on share capital - 85 --------- --------- NET CASH (OUTFLOW) FROM FINANCING (251,086) (9,479) ========= ========= 22. ANALYSIS OF CHANGES IN NET DEBT AT AT 1ST NOVEMBER CASH OTHER 31ST OCTOBER 1995 FLOWS CHANGES 1996 Cash in hand, at bank 669 559,756 - 560,425 Overdraft (105,009) 45,004 - (60,005) --------- --------- --------- --------- (104,340) 604,760 - 500,420 Hire purchase and finance leases (616,099) (27,100) - (643,199) Debt due within one year (36,664) 36,664 (36,664) (36,664) Debt due after one year (779,070) - 36,664 (742,406) --------- --------- --------- --------- (1,536,173) 614,324 - (921,849) ========= ========= ========= ========= AT AT 1ST NOVEMBER CASH OTHER 31ST OCTOBER 1996 FLOWS CHANGES 1997 Cash in hand, at bank 560,425 (49,880) - 510,545 Overdraft (60,005) 60,005 - - --------- --------- --------- --------- 500,420 10,125 - 510,545 Hire purchase and finance leases (643,199) 214,422 - (428,777) Debt due within one year (36,664) 36,664 (36,664) (36,664) Debt due after one year (742,406) - 36,664 (705,742) --------- --------- --------- --------- (921,849) 261,211 - (660,638) ========= ========= ========= =========
F-42 Page 16 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 23. Companies Act 1985 These financial statements do not comprise the Company's statutory accounts within the meaning of section 240 of the Companies Act 1985 of Great Britain. Statutory accounts for the years ended 31 October 1997 and 1996, on which the auditors' reports were unqualified, have been delivered to the Registrar of Companies for Engalnd and Wales. 24. DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. The company's accounts are prepared in accordance with accounting principles generally accepted in the United Kingdom ("UK GAAP") which differ from United States generally accepted accounting principles ("US GAAP"). The significant differences applicable to the company are summarised below. DEPRECIATION OF FREEHOLD PROPERTY Under UK GAAP, the company does not depreciate its freehold property. Under US GAAP, depreciation would be provided. FINANCE LEASES AND HIRE PURCHASE CONTRACTS Under UK GAAP, the finance charge relating to finance (capital) leases and hire purchase contracts is charged to the profit and loss account on a straight line basis. Under US GAAP, such finance charges would be charged to income over the period of the lease so as to provide a constant rate of interest on the remaining balance of the capital obligation. It is considered that the difference between the two methods in this case does not have a material effect on either the balance sheets as at 31{st} October 1996 and 31{st} October 1997 or the reported results for the years then ended. DEFERRED TAXATION Under UK GAAP, provision for deferred taxation is only made where in the opinion of the directors it is likely to be payable in the foreseeable future. Under US GAAP, deferred taxation is computed for all temporary differences between the tax and book bases of assets and liabilities. Deferred tax assets are recognised to the extent their realisation is more likely than not. The following is a summary of the significant adjustments to income and shareholders' funds which would be required if US GAAP were to be applied instead of UK GAAP. F-43 Page 17 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 24. DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED). INCOME
YEAR ENDED YEAR ENDED 31 OCTOBER 31 OCTOBER 1997 1996 Profit on ordinary activities after taxation as reported in the profit and loss account 840,291 835,526 Adjustments Depreciation (22,160) (21,627) Deferred taxation - methodology (73,260) (250,215) - on above adjustments 6,648 6,488 --------- --------- Net income as adjusted to accord with US GAAP Net income 751,519 570,172 ========= ========= SHAREHOLDERS' FUNDS YEAR ENDED YEAR ENDED 31 OCTOBER 31 OCTOBER 1997 1996 Capital and reserves as reported 3,050,200 2,209,909 Adjustments Fixed assets Tangible assets-freehold property depreciation (97,427) (75,267) Deferred taxation - methodology (361,320) (288,060) - on above adjustments 29,228 22,580 --------- --------- Shareholders' funds as adjusted to accord with US GAAP 2,620,681 1,869,162 ========= =========
STATEMENT OF CASH FLOWS The statement of cash flows prepared under UK GAAP presents substantially the same information as that required under US GAAP but it differs with regard to the classification of items within it and as regards the definition of cash under UK GAAP and cash and cash equivalents under US GAAP. Under UK GAAP, cash flows are presented separately for operating activities, returns on investments and servicing of finance, taxation, capital expenditure and financial investment and financing. US GAAP require only three categories of cash flow activity to be reported, operating, investing and financing. Cash flows from taxation and returns on investments and servicing shown under UK GAAP would be included within operating activities under US GAAP. Capital expenditure and financial investment would be included within investing activities under US GAAP. F-44 Page 18 NORWICH INJECTION MOULDERS LIMITED NOTES TO THE ACCOUNTS (CONTINUED) 24. DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED). STATEMENT OF CASH FLOWS (CONTINUED) Under UK GAAP, cash is defined as cash in hand and deposits repayable on demand less bank overdrafts repayable on demand. Under US GAAP, cash and cash equivalents would not include bank overdrafts but would include cash deposits repayable within three months at their inception. The categories of cash flows under US GAAP can be summarised as follows:
YEAR ENDED YEAR ENDED 31 OCTOBER 31 OCTOBER 1997 1996 Cash inflow from operating activities 1,242,004 1,250,083 Cash outflow on investing activities (980,793) (635,844) Cash outflow from financing activities (251,086) (9,479) (Decrease)/Increase in cash and cash equivalents (49,880) 559,756 Cash and cash equivalents At 1st November 560,425 669 At 31st October 510 560,425
F-45 VENTURE PACKAGING, INC. Consolidated Financial Statements for the Years Ended SEPTEMBER 30, 1996 AND 1995 AND INDEPENDENT AUDITORS' REPORT F-46 INDEPENDENT AUDITORS' REPORT To the Shareholders and Board of Directors Venture Packaging, Inc. Monroeville, Ohio We have audited the accompanying consolidated balance sheets of Venture Packaging, Inc. as of September 30, 1996 and 1995, and the related consolidated statements of operations and retained earnings, and of cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /S/ DELOITTE & TOUCHE LLP Cleveland, Ohio November 18, 1996 F-47 VENTURE PACKAGING, INC. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1996 AND 1995 - ----------------------------
ASSETS 1996 1995 ------------- ------------- CURRENT ASSETS: Cash $ 567,404 $ 184,317 Receivables - net 4,654,981 5,468,229 Inventories 8,693,353 6,613,464 Deferred income taxes 147,777 159,208 Other current assets 316,377 619,595 ------------- ------------- Total current assets 14,379,892 13,044,813 ------------- ------------- PROPERTY: Land and improvements 2,106,242 2,043,868 Buildings and improvements 5,301,226 5,273,751 Machinery and equipment 39,115,191 36,477,193 Office furniture and fixtures 1,391,506 1,183,548 Vehicles 325,202 331,461 ------------- ------------- Total 48,239,367 45,309,821 Less accumulated depreciation (27,990,408) (24,852,783) ------------- ------------- Property - net 20,248,959 20,457,038 ------------- ------------- RESTRICTED INVESTMENTS 1,244,996 2,223,603 DEPOSTIS AND OTHER ASSETS 505,042 619,720 ------------- ------------- TOTAL $36,378,889 $36,345,174 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term debt $8,955,400 $6,801,552 Current portion of long-term debt 892,148 892,148 Trade accounts payable 2,902,476 3,064,472 Accrued liabilities 868,103 1,189,192 ------------- ------------- Total current liabilities 13,618,127 11,947,364 LONG-TERM DEBT, LESS CURRENT PORTION 10,384,278 11,332,852 DEFERRED INCOME TAXES 2,126,654 1,843,734 DEFERRED REVENUE 822,468 875,000 ------------- ------------- Total liabilities 26,951,527 25,998,950 SHAREHOLDERS' EQUITY: Capital stock, stated value $100 per share: authorized - 1,000 shares; issued and outstanding - 227.715 and 227.965 shares,respectively 22,772 22,797 Additional paid-in capital 10,521 10,616 Retained earnings 9,394,069 10,312,811 ------------- ------------- Total shareholders' equity 9,427,362 10,346,224 ------------- ------------- TOTAL $36,378,889 $36,345,174 ============= =============
See notes to consolidated financial statements. F-48 VENTURE PACKAGING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS YEARS ENDED SEPTEMBER 30, 1996 AND 1995 - ------------------------------------------------------------
1996 1995 ------------- ------------- REVENUES: Net sales $42,262,349 $41,800,788 Other 944,579 861,155 ------------- ------------- Total revenues 43,206,928 42,661,943 COST AND EXPENSES: Cost of sales 37,747,768 36,108,439 Selling, general and administrative 5,509,215 4,931,505 Interest 1,244,576 849,945 ------------- ------------- Total cost and expenses 44,501,559 41,889,889 ------------- ------------- INCOME (LOSS) BEFORE INCOME TAXES (1,294,631) 772,054 ------------- ------------- PROVISION (BENEFIT) FOR INCOME TAXES: Federal (447,619) 210,398 State and local 31,600 83,616 ------------- ------------- Total provision (benefit) for income taxes (416,019) 294,014 NET INCOME (LOSS) (878,612) 478,040 CASH DIVIDENDS (22,797) (22,846) CAPITAL STOCK PURCHASED AND RETIRED (17,333) (33,169) RETAINED EARNINGS, BEGINNING OF YEAR 10,312,811 9,890,786 ------------- ------------- RETAINED EARNINGS, END OF YEAR $ 9,394,069 $10,312,811 ============= ============= NET INCOME (LOSS) PER SHARE $ (3,857) $ 2,096 ============= =============
See notes to consolidated financial statements. F-49 VENTURE PACKAGING, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED SEPTEMBER 30, 1996 AND 1995 - ----------------------------------------
1996 1995 ------------- ------------- OPERATING ACTIVITIES: Net income (loss) $ (878,612) $ 478,040 Adjustments to reconcile net income (loss) to net cash provided from operating activities: Depreciation 3,168,730 2,545,363 Deferred income taxers 294,351 392,933 Loss on sale of machinery and equipment 31,541 Change in operating assets and liabilities: Receivables 813,248 (1,515,871) Inventories (2,079,889) (1,522,459) Other assets 311,590 (604,354) Trade accounts payable (161,996) 1,327,190 Accrued liablities (321,089) 148,627 Deferred revenue (52,532) 875,000 ------------- ------------- Total cash provided by operating activities 1,125,342 2,124,469 ------------- ------------- INVESTING ACTIVITIES: Capital expenditures (2,949,366) (11,394,621) Net proceeds from (purchases of) restricted investments 978,607 (2,223,603) Proceeds from sale of machinery and equipment 42,953 Other - net 20,526 (20,761) ------------- ------------- Total cash used in investing activities (1,907,280) (13,638,985) ------------- ------------- FINANCING ACTIVITIES: Net borrowings under line of credit agreement 2,153,848 3,954,585 Proceeds from long-term debt 8,325,000 Payments on long-term debt (948,574) (601,333) Dividends paid (22,797) (22,846) Purchase of capital stock (17,452) (33,409) ------------- ------------- Total cash provided by financing activities 1,165,025 11,621,997 ------------- ------------- NET INCREASE IN CASH 383,087 107,481 CASH, BEGINNING OF YEAR 184,317 76,836 ------------- ------------- CASH, END OF YEAR $ 567,404 $ 184,317 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 989,996 $ 741,183 ------------- ------------- Income taxes $ 155,038 $ 192,889 ------------- ------------- NONCASH INVESTING AND FINANCING ACTIVITIES: Short-term borrowings refinanced as long-term debt $3,900,000 -------------
See notes to consolidated financial statements. F-50 VENTURE PACKAGING, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30, 1996 AND 1995 1. BUSINESS DESCRIPTION Venture Packaging, Inc. (the "Company"), a Delaware corporation, is a manufacturer of molded plastic products, primarily food storage containers. The Company operates plants located in Monroeville, Ohio and Anderson, South Carolina, and a printing and distribution facility in Chesapeake, Virginia. The Company sells its products to customers nationwide, which operate primarily in food processing industries. To better align its corporate structure with its future growth plans, Venture Packaging, Inc., an Ohio corporation, reincorporated in the state of Delaware through an Agreement of Merger and Plan of Reorganization effective October 1, 1995. The objective of the reincorporation was to establish a Delaware holding company with two separate operating subsidiaries for the Midwest and Southeast divisions. To accomplish the corporate reorganization, Venture Packaging, Inc., an Ohio corporation, formed the following subsidiaries: Venture Packaging Southeast, Inc., a South Carolina corporation; Venture Packaging Midwest, Inc., an Ohio corporation; and Venture Packaging, Inc., a Delaware corporation. Effective October 1, 1995, substantially all of the Midwest division assets were assigned to Venture Packaging Midwest, Inc., and substantially all of the Southeast division assets were assigned to Venture Packaging Southeast, Inc. Subsequently, Venture Packaging, Inc., the Ohio corporation was merged with and into Venture Packaging, Inc., the Delaware corporation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONSOLIDATION - The consolidated financial statements include the accounts of Venture Packaging, Inc. and its wholly-owned subsidiaries Venture Packaging Southeast, Inc. and Venture Packaging Midwest, Inc. All significant intercompany transactions and balances have been eliminated in consolidation. ESTIMATES - The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. INVENTORIES - Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. PROPERTY - Property is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. RESTRICTED INVESTMENTS - Restricted investments represent proceeds from Industrial Development Bonds (see Note 5) invested in short-term repurchase agreements, the use of which is restricted to certain capital expenditures and related costs under the terms of the loan agreement. F-51 DEFERRED REVENUE - Deferred revenue relates to government grant revenues and is being amortized over ten years. NET INCOME PER SHARE - Net income per share has been computed by dividing net income by the weighted average number of shares of capital stock outstanding during the period. 3. RECEIVABLES Receivables consist of the following:
1996 1995 ------------- ------------- Customer accounts $3,626,580 $4,174,511 Affiliate 161,037 78,915 Refundable income taxes 985,364 415,803 Government grants 975,000 Allowances (118,000) (176,000) ------------- ------------- Total $4,654,981 $5,468,229 ============= =============
Sales to the affiliated company totaled approximately $918,000 in fiscal 1996 and $877,000 in fiscal 1995. 4. INVENTORIES Inventories consist of the following:
1996 1995 ------------- ------------- Raw Materials $2,841,583 $2,327,719 Finished product 5,545,807 4,072,232 Shipping supplies 305,963 213,513 ------------- ------------- Total $8,693,353 $6,613,464 ============= =============
5. DEBT Short-term debt of $8,955,400 and $6,801,552 at September 30, 1996 and 1995, respectively, consists of amounts outstanding under a $10,000,000 line of credit agreement which currently matures December 31, 1996. Interest is payable monthly at a rate which approximates the bank's prime lending rate. Long-term debt consists of:
1996 1995 ------------- ------------- Industrial Development Bonds $7,655,000 $8,325,000 Bank term loans 3,621,426 3,900,000 ------------- ------------- Total long-term debt 11,276,426 12,225,000 Less current maturities 892,148 892,148 ------------- ------------- Non-current portion $10,384,278 $11,332,852 ============= =============
F-52 The Industrial Development Bonds are to be repaid in semi-annual installments through April 1, 2010 with a final balloon payment of $945,000. Interest is payable quarterly. The bonds have a variable interest rate, which averaged 3.78% and 4.13% during fiscal 1996 and 1995, respectively. The interest rate can not exceed 10%. The Company can make an irrevocable election to convert the interest rate to a fixed rate. The bondholders may redeem the bonds at their option while the bonds bear interest at a variable rate; however, the bonds are classified as non- current due to a remarketing agreement and credit facilities, which permit the Company to extend the payment for several years. The Company also has the option to call the bonds. The bank term loans are to be repaid in equal monthly installments of principal plus interest. Interest is payable monthly at the bank's prime lending rate. The total aggregate principal payments applicable to all long-term debt at September 30, 1996 is due as follows:
1997 $ 892,148 1998 1,227,148 1999 1,227,148 2000 1,227,148 2001 1,227,148 Thereafter 5,475,686 ------------- Total $11,276,426 =============
The credit agreements require, among other things, the maintenance of minimum tangible net worth, a maximum debt to tangible net worth ratio, a minimum debt service coverage ratio, and a fixed charge coverage ratio. The agreements also limit other secured borrowings and the annual amount of capital expenditures and dividends. The credit agreements are secured by accounts receivable, inventories, and certain equipment, land and buildings. 6. INCOME TAXES The provision (benefit) for income taxes consist of the following:
1996 1995 ------------ ---------- Current provision (benefit) $(710,370) $(98,919) Deferred provision 294,351 392,933 ------------ ---------- Total $(416,019) $294,014 ============ ==========
F-53 A reconciliation between the federal statutory income tax rate and the Company's effective tax rate is as follows:
1996 1995 ------------ ---------- Statutory tax rate (34.0)% 34.0% Effects of: State and local income taxes 1.6 7.1 Other 0.3 (3.0) ------------ ---------- Effective tax rate (32.1)% 38.1% ============ ==========
The components of the net deferred income tax liability consist of the following:
1996 1995 ------------- ------------- Tax depreciation in excess of book $(2,262,352) $(1,943,974) Reserves and accruals not currently deductible 82,451 128,297 Net operating loss and credit carryforwards 537,156 95,237 Other - net 13,868 35,914 Valuation allowance (350,000) ------------- ------------- Net deferred tax liability $(1,978,877) $(1,684,526) ------------- -------------
7. LEASES The Company leases certain equipment and warehouse facilities under operating leases. Certain of the operating leases contain renewal options at the end of the initial lease term. Future minimum rental payments under leases with initial or remaining noncancellable lease terms in excess of one year consisted of the following at September 30, 1996:
FISCAL YEAR ENDING SEPTEMBER 30, AMOUNT 1997 $ 716,680 1998 714,920 1999 704,139 2000 587,594 2001 556,208 Thereafter 554,357 ------------- Total $3,833,898 =============
Total rent expense under operating leases was approximately $926,000 in fiscal 1996 and $533,000 in fiscal 1995. F-54 8. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of cash, receivables, restricted investments, deposits, accounts payable, accrued expenses, short term debt and long term debt are reasonable estimates of their fair value. The fair value of the industrial development bonds was measured using a tax free interest rate. F-55
NO DEALER, SALES PERSON OR ANY OTHER PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. ______________________________ TABLE OF CONTENTS PAGE Available Information ii Summary of Prospectus 1 Risk Factors 11 Company History 17 The Exchange Offer 19 Capitalization 27 Pro Forma Condensed Consolidated Financial Statements 28 Selected Historical Financial Data 33 Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Business 40 Management 48 Principal Stockholders 55 Certain Transactions 57 Description of Certain Indebtedness 60 Description of Notes 63 Material Federal Income Tax Considerations 85 Plan of Distribution 88 Legal Matters 89 Experts 89 Index to Financial Statements F-1 $25,000,000 BERRY PLASTICS CORPORATION 12 1/4 % SERIES C SENIOR SUBORDINATED NOTES DUE 2004 _________________ PROSPECTUS _________________ , 1999
PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Certificate or Articles of Incorporation of the Company and each of the Guarantors (except Norwich), in each case as amended, provide that the Company and the Guarantors shall indemnify their respective directors to the fullest extent permitted under the DGCL, Kansas General Corporation Code, Ohio General Corporation Law, South Carolina Business Corporation Act and the laws of England and Wales (collectively, the "Corporation Law"), as applicable. The Corporation Law provides for indemnification by the Company and each of the Guarantors of their respective directors and officers. In addition, the By- laws of each of the Company and each Guarantor require the respective company to indemnify its current or former directors and officers to the fullest extent permitted by the applicable Corporation Law. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) EXHIBITS 2.1 Asset Purchase Agreement dated February 12, 1992, among 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 (Registration No. 33-75706) (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, 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, 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 (Registration No. 333-08313) (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) II-1 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 and the shareholders of Container Industries (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 Design, 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 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 Incorporation of Berry Iowa (filed as Exhibit 3.5 to the Form S-1 and incorporated herein by reference) 3.6 By-laws of Berry Iowa (filed as Exhibit 3.6 to the Form S-1 and incorporated herein by reference) 3.7 Certificate of Incorporation of Berry Tri-Plas (filed as Exhibit 3.7 to the Form S-1 and incorporated herein by reference) 3.8 By-laws of Berry Tri-Plas (filed as Exhibit 3.8 to the Form S-1 and incorporated herein by reference) 3.9 Certificate of Amendment to the Certificate of Incorporation of Berry Tri- Plas (filed as Exhibit 3.9 to the 1996 Form 10-K and incorporated herein by reference) 3.10 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) *3.11 Certificate of Incorporation of Berry Sterling *3.12 By-laws of Berry Sterling *3.13 Certificate of Incorporation of AeroCon *3.14 By-laws of AeroCon II-2 *3.15 Articles of Incorporation of PackerWare *3.16 By-laws of PackerWare *3.17 Certificate of Incorporation of Berry Design *3.18 By-laws of Berry Design *3.19 Certificate of Incorporation of Venture Holdings *3.20 By-laws of Venture Holdings *3.21 Articles of Incorporation of Venture Midwest *3.22 Code of Regulations of Venture Midwest *3.23 Articles of Incorporation for a Statutory Close Corporation of Venture Southeast *3.24 By-laws of Venture Southeast *3.25 Memorandum of Association of NIM Holdings *3.26 Articles of Association of NIM Holdings *3.27 Memorandum of Association of Norwich *3.28 Articles of Association of Norwich *3.29 Certificate of Incorporation of Knight Plastics *3.30 By-laws of Knight Plastics 4.1 Form of Indenture between the Company and United States Trust Company of New York, as Trustee (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 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) II-3 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 *4.10 Registration Rights Agreement dated as of August 24, 1998 by and among the Company, the Guarantors and DLJ ***5 Opinion of O'Sullivan Graev & Karabell, LLP (including the consent of such firm) regarding the legality of the securities being offered *8 Opinion of O'Sullivan Graev & Karabell, LLP regarding the material United States Federal income tax consequences to the holders of the securities being offered *10.1 Second Amended and Restated Financing and Security Agreement dated as of July 2, 1998, as amended, by and among the Company, NIM Holdings, Norwich, Fleet Capital Corporation, General Electric Capital Corporation, Heller Financial, Inc. and NationsBank, N.A. 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 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) II-4 *10.15 Letter of Credit of NationsBank, N.A. dated April 16, 1997 10.16 Purchase Agreement dated as of June 12, 1996, between Holding and DLJ relating to the 12.5% Senior Secured Notes due 2006 (filed as Exhibit 10.22 to the 1996 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 Warrant to purchase Class B Common Stock of Holding dated June 18, 1996, issued to CVCA (Warrant No. 1) (filed as Exhibit 10.24 to the 1996 Form S-4 and incorporated herein by reference) 10.19 Warrant to purchase Class B Common Stock of Holding dated June 18, 1996, issued to CVCA (Warrant No. 2) (filed as Exhibit 10.25 to the 1996 Form S-4 and incorporated herein by reference) 10.20 Warrant to purchase Class B Common Stock of Holding dated June 18, 1996, issued to The Northwestern Mutual Life Insurance Company (Warrant No. 3) (filed as Exhibit 10.26 to the 1996 Form S-4 and incorporated herein by reference) 10.21 Warrant to purchase Class B Common Stock of Holding dated June 18, 1996, issued to The Northwestern Mutual Life Insurance Company (Warrant No. 4) (filed as Exhibit 10.27 to the 1996 Form S-4 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 Purchase Agreement dated August 19, 1998 among the Company, the Guarantors and DLJ *21 List of Subsidiaries ***23.1 Consent of O'Sullivan Graev & Karabell, LLP (included as part of its opinion filed as Exhibit 5 hereto) *23.2 Consent of Ernst & Young LLP, independent auditors *23.3 Consent of Deloitte & Touche LLP, independent auditors *23.4 Consent of Lovewell Blake, independent auditors **24 Powers of Attorney *25 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of United States Trust Company of New York, as Trustee (separately bound) II-5 **27 Financial Data Schedule *99.1 Form of Letter of Transmittal *99.2 Form of Notice of Guaranteed Delivery *99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees *99.4 Form of Letter to Clients __________ * Filed herewith. ** Previously filed. *** To be filed by amendment. (b) FINANCIAL STATEMENT SCHEDULES Report of Independent AuditorsS-1 Schedule I - Condensed Financial Information of RegistrantS-2 Schedule II - Valuation and Qualifying AccountsS-6 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. ITEM 22. UNDERTAKINGS. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrants pursuant to the Corporation Law, the Certificate of Incorporation and By-laws, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The Registrants hereby undertake: (1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (a)To include any prospectus required by Section 10(a)(3) of the Securities Act; (b)To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (c)To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2)That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-6 (3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrants hereby undertake that: (1)For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of that time it was declared effective. (2)For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof. The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned registrants hereby undertake to supply by means of a post- effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. The undersigned registrants hereby undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. II-7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, on the 23rd day of December, 1998. BERRY PLASTICS CORPORATION By:_______/S/ MARTIN R. IMBLER_______________________ Martin R. Imbler President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature TITLE Date * Chairman of the Board of Directors December 29, 1998 Roberto Buaron * President, Chief Executive Officer and Martin R. Imbler Director (Principal Executive Officer) December 29, 1998 * Executive Vice President, Chief Financial James M. Kratochvil Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) December 29, 1998 * Director Ira G. Boots December 29, 1998 * Director David M. Clarke December 29, 1998 * Director Lawrence G. Graev December 29, 1998 * Director Donald J. Hofmann December 29, 1998 Roberto Buaron * President, Chief Executive Officer and Martin R. Imbler Director (Principal Executive Officer) December 29, 1998 * Executive Vice President, Chief Financial James M. Kratochvil Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) December 29, 1998 /s/ James M. Kratochvil Executive Vice President, Chief Financial James M. Kratochvil Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) December 29, 1998 /s/ Joseph S. Levy Director Joseph S. Levy December 29, 1998
II-23 BPC HOLDING CORPORATION REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULES We have audited the consolidated financial statements of BPC Holding Corporation as of December 27, 1997 and December 28, 1996, and for each of the three years in the period ended December 27, 1997, and have issued our report thereon dated February 13, 1998 (included elsewhere in this Registration Statement). Our audits also included the financial statement schedules listed in Item 27(B) of this Registration Statement. These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audit. In our opinion, the financial statement schedules referred to above, 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 13, 1998 S-1 BPC HOLDING CORPORATION (PARENT COMPANY) SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED BALANCE SHEETS
DECEMBER 27, 1997 December 28, 1996 (IN THOUSANDS) Assets Cash $ 708 $ 389 Other assets (principally investment in subsidiary) (31,808) (29,177) Assets held in trust 18,933 30,188 Intangible assets 4,281 4,789 Due from Berry Plastics Corporation 8,095 2,804 Other - 277 ------- ------- Total assets $ 209 $ 9,270 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities $ 510 $ 704 Accrued dividends 3,674 1,116 Long-term debt 105,000 105,000 ------- ------- Total liabilities 109,184 106,820 Preferred stock 16,509 11,216 Class A common stock 4 4 Class B common stock 2 2 Class C common stock - - Treasury stock (22) (22) Additional paid-in capital 49,374 51,681 Warrants 3,511 3,511 Retained earnings (deficit) (178,353) (163,942) ------- -------- Total stockholders' equity (deficit) (108,975) (97,550) ------- -------- Total liabilities and stockholders' equity (deficit) $ 209 $ 9,270 ======= ========
S-2 BPC HOLDING CORPORATION CONDENSED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 27, 1997 December 28, 1996 December 30, 1995 (IN THOUSANDS) Net sales $ - $ - $ - Cost of goods sold - - - Gross profit - - - Operating expenses 220 3,304 (150) Other expense 11,560 6,294 - -------- -------- -------- Income (loss) before income taxes and equity in net income of subsidiary (11,780) (9,598) 150 Equity in net income (loss) of subsidiary (2,631) 5,989 6,183 -------- -------- -------- Income (loss) before income taxes (14,411) (3,609) 6,333 Income taxes 0 (262) - -------- -------- -------- Net income (loss) (14,411) (3,347) 6,333 Preferred stock dividends (2,558) (1,116) - -------- -------- -------- Net income (loss) attributable to common $ (16,969) $ (4,463) $ 6,333 shareholders ======== ======== ========
S-3 BPC HOLDING CORPORATION CONDENSED STATEMENTS OF CASH FLOWS
YEAR ENDED ----------------------------------------------------------------------- December 27, 1997 December 28, 1996 December 30, 1995 ------------------- ------------------- ------------------ (In thousands) Net income (loss) $ (14,411) $ (3,347) $ 6,333 Adjustments to reconcile net loss provided by operating activities: Net loss (income) of subsidiary 2,631 (5,989) (6,183) Amortization and non cash interest 726 441 - Interest funded by assets held in trust 11,256 5,412 - Non-cash compensation - 358 (215) Changes in operating assets and liabilities (208) 427 66 ---------- --------- --------- Net cash provided by (used for) operating activities (6) (2,698) 1 Net cash provided by investing activities - - - Net cash provided by financing activities: Exercise of management stock options - 1,130 - Proceeds from senior secured notes - 105,000 - Proceeds from issuance of common and preferred stock and warrants 325 67,369 - Rollover investments and share repurchases - (125,219) - Assets held in trust - (35,600) - Net payments to warrant holders - (4,502) - Debt issuance costs - (5,069) - Other - (22) (1) ---------- --------- --------- Net cash from financing activities 325 3,087 - ---------- --------- --------- Net increase in cash and cash equivalents 319 389 - Cash and cash equivalents at beginning of year 389 - - ---------- --------- --------- Cash and equivalents at end of year $ 708 $ 389 $ - ========== ========= =========
S-4 Notes to Condensed Financial Statements (1)BASIS OF PRESENTATION. In the parent company-only financial statements, Holding's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since date of acquisition. The parent company-only financial statements should be read in conjunction with Holding's consolidated financial statements, which are included beginning on page F-1. (2)GUARANTEE. Berry had approximately $201.3 million and $111.0 million of long-term debt outstanding at December 27, 1997 and December 28, 1996, respectively. Under the terms of the debt agreements, Holding has guaranteed the payment of all principal and interest. S-5 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (IN THOUSANDS)
Balance at Charged to Charged to Balance Description Beginning Costs and Other Accounts- Deductions- at end of Period Expenses Describe Describe of year ----------------- ------------ ----------- --------------- ----------- --------- Year ended December 27, 1997: Allowance for doubtful accounts $ 618 $ 325 $ 358 (2) $ 263 (1) $ 1,038 ======= ======= ======= ======= ======== Year ended December 28, 1996: Allowance for doubtful accounts $ 737 $ 322 $ - $ 441 (1) $ 618 ======= ======= ======= ======= ======== Year ended December 30, 1995: Allowance for doubtful accounts $ 503 $ 216 $ 299 (2) $ 281 (1) $ 737 ======= ======= ======= ======= ========
(1) Uncollectible accounts written off, net of recoveries. (2) Primarily relates to purchase of accounts receivable and related allowance through acquisitions. S-6 BPC HOLDING CORPORATION EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the captions "Selected Historical Financial Data" and "Experts" and to the use of our report dated February 13, 1998 in the Registration Statement (Form S-4) and related Prospectus of Berry Plastics Corporation for the registration of $25,000,000 of 12{1}/{4}% Series C Senior Subordinated Notes due 2004. /s/ Ernst & Young LLP Indianapolis, Indiana December 23, 1998 S-1 EXHIBIT 23.3 INDEPENDENT AUDITORS' CONSENT We consent to the use in this Registration Statement, relating to $25,000,000 of 12-{1}/{4}% Series C Senior Subordinated Notes due 2004, of Berry Plastics Corporation on Form S-4 of our report dated November 18, 1996 relating to the consolidated financial statements of Venture Packaging, Inc. for the years ended September 30, 1996 and 1995 appearing in the Prospectus, which is part of this Registration Statement We also consent to the reference to us under the heading "Experts" in such prospectus. /s/ Deloitte & Touche LLP Cleveland, Ohio December 29, 1998 S-2 EXHIBIT 23.4 NORWICH INJECTION MOULDERS LIMITED We consent to the reference to our firm under the caption "Experts" and to the use of our report dated 22 December 1997 in the Registration Statement (Form S- 4) and related Prospectus of Berry Plastics Corporation for the registration of $25,000,000 of 12.25% Series C Senior Subordinated Notes due 2004. /s/ Lovewell Blake Norwich, England 23 December 1998 S-3 EX-2.15 2 AGREEMENT FOR SALE AND PURCHASE DATE: 2{nd} July 1998 PARTIES: (1) THE PERSONS whose names and addresses are set out in Schedule 1 (2) NIM HOLDINGS LIMITED (3558202) whose registered office is at Aldwych House, 81 Aldwych, London WC2B 4HN (3) BERRY PLASTICS CORPORATION, a Delaware corporation of 101 Oakley Street, Evansville, Indiana, 47710 0959, USA IT IS AGREED as follows: 1 INTERPRETATION In this Agreement (including the Schedules): 1.1 the following words and expressions shall have the following meanings:
EXPRESSION MEANING "Accounting Standards" all Statements of Standard Accounting Practice adopted and all Financial Reporting Standards issued by the Accounting Standards Board or such body as may be prescribed under section 256(1) of the Companies Act "Accounts" the Company's audited balance sheet as at, and the profit and loss account for the financial year ended on, the Accounts Date together with the directors' report, the auditors' report, cash flow statements and notes "Accounts Date" 31{st} October 1997 "Borrowings" any liabilities or indebtedness in respect of: 1) moneys borrowed (including overdrafts) or raised; 2) any debenture, bond, note or loan stock; 3) the capital element of all leases (whether in respect of land, buildings, plant, machinery, equipment or otherwise) entered into primarily as a method of raising finance or refinancing the acquisition of the leased asset; 4) receivables sold or discounted; 5) the sale price of any asset to the extent paid before the time of sale or delivery by the person liable to effect such sale or delivery where the advance payment is arranged primarily as a method of raising finance or financing or refinancing the manufacture, assembly, acquisition or holding of the asset to be sold; 6) the acquisition cost of any asset to the extent payable after the time of acquisition or possession where the deferred payment is arranged primarily as a method of raising finance or financing or refinancing the acquisition of the asset acquired and shall include any fees or prepayment penalties related to the prepayment of any such liabilities or indebtedness other than any such penalties payable in respect of the prepayment of any capital leases or hire purchase agreements (not being imposed by the relevant lessor or hirer pursuant to any change of control provisions in the relevant agreement or lease) and penalties related to indebtedness to Barclays Bank Plc which can/could be avoided by prepayment on 9{th} July 1998 "Business Day" a day (other than a Saturday) on which banks are open for the transaction of all normal sterling banking business in the City of London "CAA 1990" Capital Allowances Act 1990 "Clearing Bank" a bank which is a member of CHAPS and Town Clearing Company Limited "Companies Act" the Companies Act 1985 "Company" Norwich Injection Moulders Limited, registered number (964668) "Completion" completion of the sale and purchase of the Shares "Computer System" all computer hardware, software and networks owned or used by the Company including all arrangements relating to provision of maintenance and support, security, disaster recovery, facilities management bureau and on-line services to the Company "Disclosure Letter" the letter (together with any schedules and appendices thereto and any annexures specified in it) dated the same date as this Agreement from the Vendors delivered to the Purchaser prior to the execution of this Agreement and expressed to be the Disclosure Letter "Encumbrance" any interest or equity of any person (including, without limitation, any right to acquire, option to acquire or right of pre-emption), any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or any other security agreement or arrangement affecting the property of any kind (or rights in it) but excluding any unsecured guarantee or indemnity "Guarantor" Berry Plastics Corporation "holding company" the meaning given in section 736 of the Companies Act "ICTA" Income and Corporation Taxes Act 1988 "Indebtedness Statment" a statement in the agreed form as to the amount of the Company's Borrowings and cash balances that have been taken into account in calculating the consideration payable under clause 3.1 "Insider" any Vendor, or present director of the Company or any person who is or was at the relevant time connected with the Vendor or any such director "Intellectual Property Rights" all and any rights in patents, petty patents, utility models, trade or service marks (whether registered or unregistered), trade names, copyrights, registered designs, unregistered design rights, applications for any of the foregoing and the right to apply for any of the foregoing in any part of the world, discoveries, confidential information, know-how and all or any other intellectual property whether or not registered or capable of registration "Management Accounts" the unaudited management accounts of the Company for the period from the Accounts Date to the Management Accounts Date "Management Accounts Date" 31{st} March 1998 "NAV Estimate" an estimate in agreed form of the Net Assets (as defined in Schedule 9) of the Company on the date of Completion; "NAV Escrow" an escrow account to be opened on Completion in the joint names of the Vendors' Solicitors and the Purchaser's Solicitors and which is to be dealt with in accordance with Schedule 12. "the Pension the Norwich Injection Moulders Limited Executive Schemes" Pension Plan, the Norwich Injection Moulders Limited Staff Pension Scheme (also known as the Norwich Injection Moulders Limited Individual Pension Scheme) and the Norwich Injection Moulders Limited Discretionary Pension Plan "Planning Acts" every law now or (where the context requires) formerly in force in England and Wales and (in the case of any law applying to particular localities) having application to the locality of the Property in relation to town and country planning and development control including without prejudice to the generality of the foregoing the Local Government Planning and Land Act 1980, the Town & Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Consequential Provisions) Act 1990, the Planning (Hazardous Substances) Act 1990 and the Planning & Compensation Act 1991 and any order made thereunder and any amendments made thereto from time to time in each case prior to the date hereof "Property" the property particulars of which are set out in Schedule 3 (and if more than one each such property and each and every part of such property) "Purchaser" NIM Holdings Limited "Purchaser's Browne Jacobson, Aldwych House, 81 Aldwych, London Solicitors" WC2B 4HN "Shares" all of the issued shares in the capital of the Company "subsidiary" the meaning given in section 736 of the Companies Act "Stocks" stocks (as defined in Statement of Standard Accounting Practice Number 9) of the Company including but not limited to raw materials, components, work in progress, finished goods and consumables. "Taxation" the meaning given in Schedule 8 "Taxation Authority" any taxing or other authority, whether of the United Kingdom of elsewhere, competent to impose any liability to Taxation "TCGA" Taxation of Chargeable Gains Act 1992 "Tax Covenant" a deed of covenant in the form set out in Schedule 8 "VATA" Value Added Tax Act 1994 "the Vendors" the persons whose names and addresses are set out in Schedule 1 (and "Vendor" shall be construed accordingly) "Vendors' Solicitors" Eversheds of Holland Court, The Close, Norwich NR1 4DX "Warranties" the warranties, representations and undertakings set out in clause 5 and Schedule 4;
"Warrantors" J E Barlow, TD Johnson and AR Sandell 1.2 section 839 ICTA applies as it applies in that Act to determine whether one person is connected with another; 1.3 the Schedules form part of this Agreement and shall be of full force and effect as though their terms were set out in the body of this Agreement; 1.4 all covenants obligations or liabilities on the part of two or more persons are given or made jointly and severally; 1.5 any reference to a person shall be construed to include a reference to a body corporate, unincorporated association and a partnership; 1.6 headings used in this Agreement are for convenience only and shall not affect its construction; 1.7 references to clauses or Schedules are (unless otherwise stated to the contrary) references to clauses of and Schedules to this Agreement and references to paragraphs are to paragraphs in the Schedule in which such references appear; 1.8 whenever a document is referred to in this Agreement as being "in the agreed form" it shall be in the form agreed and initialled by or on behalf of the Vendors and the Purchaser; 1.9 references to statutory provisions shall be construed as including: 1.9.1 references to the provisions of any earlier statute which are directly or indirectly amended, consolidated or re- enacted by such provisions; 1.9.2 references to those provisions as amended or re-enacted or modified from time to time prior to the date hereof; and 1.10 in construing this Agreement the interpretation of general words shall not be restricted by being followed by words indicating a particular class of acts, matters or things or being followed by particular examples. 2 SALE AND PURCHASE 2.1 Each of the Vendors shall sell with full title guarantee and the Purchaser shall purchase the number of the Shares specified opposite that Vendor's name in Schedule 1. 2.2 Each of the Shares shall be sold free from any Encumbrance and with all rights attaching to it including the right for the Purchaser to receive and retain any dividends or other distributions declared made or paid after the date of this Agreement. 2.3 Each of the Vendors waives all rights of pre-emption or any other right as regards transfer in respect of the Shares (howsoever conferred). 2.4 The Purchaser shall not be obliged to complete the purchase of any of the Shares unless the purchase of all of the Shares is completed simultaneously. 2.5 Completion of the purchase of some of the Shares shall not affect the rights of the Purchaser with respect to the others. 2.6 Each of the Warrantors hereby terminates the shareholders agreement relating to the Company among themselves dated 26{th} July 1996 (as amended by an agreement dated 27{th} February 1998). 3 CONSIDERATION 3.1 The aggregate consideration for the sale of the Shares shall be 8,310,823.39 (eight million, three hundred and ten thousand, eight hundred and twenty three Pounds) apportioned amongst the Vendors and classes of shares as set out opposite their names in Schedule 1 but subject to adjustment after Completion as provided in Schedule 9. 3.2 Subject to clause 3.4 of the said aggregate consideration 90% of such sum shall be paid on Completion and 10% of such sum ("the Retention Fund") shall be dealt with in accordance with the provisions set out in Schedule 10. 3.3 The sum of 8,310,823.39 has been calculated on the basis of the following formula: 8,310,823.39 = 8,490,000 + x - y Where: x = cash in hand and in the bank accounts of the Company as set out in the Indebtedness Statement on the date of Completion; and y = the aggregate of the Company's Borrowings as set out in the Indebtedness Statement on the date of Completion. 3.4 If the NAV Estimate is greater than 3,623,457 the excess shall on Completion be paid by the Purchaser to the NAV Escrow. If the NAV Estimate is less than 3,623,457 the shortfall shall be deducted from that part of the aggregate consideration payable to the Vendors on Completion under Clause 3.2 and shall be paid on Completion into the NAV Escrow. The amount paid into the NAV Escrow shall be dealt with in accordance with the provisions set out in Schedule 12. 3.5 Any sum payable to the Vendors either on Completion or in accordance with the provisions set out in Schedule 10 shall be paid in cash by way of (either) single banker's draft drawn on a Clearing Bank in favour of the Vendors' Solicitors or by such other method as may be agreed between the parties. The Vendors' Solicitors are authorised to receive the Consideration on behalf of the Vendors and payment to them will be a good and sufficient discharge to the Purchaser and the Purchaser will not be further concerned as to the application of the moneys so paid. 3.6 If any of the Retention Fund shall become payable to the Purchaser by way of compensation or indemnity in accordance with the provisions of Schedule 10 the consideration shall be abated by the amount so payable and any rights of the Purchaser to such compensation or indemnity shall be reduced by the amount of such abatement, but without prejudice to the right of the Purchaser to recover the excess of any compensation or indemnity or any costs or expenses from the Vendors to the extent not recovered out of the Retention Fund. 4 COMPLETION 4.1 The sale and purchase of the Shares will be completed at the offices of the Vendors' solicitors immediately after both the signing and exchanging of this Agreement, when: 4.1.1 the Vendors will produce and deliver to the Purchaser: (a)duly executed transfers of the Shares in favour of the Purchaser (or as it shall direct) together with all relevant share certificates (or in the case of any lost certificates an indemnity satisfactory to the Purchaser) and such waivers or consents as the Purchaser may require to enable it or its nominees to be registered as the holder of the Shares; (b)written resignations from James Edward Barlow as a director of the Company and from Janet Barlow as company secretary in the form set out in Schedule 5; (c) a letter from Lovewell Blake resigning their position as auditors of the Company, acknowledging that they have no claim whatsoever against the Company and containing the statement required by section 394 of the Companies Act; (d) the certificate of incorporation, any certificates of incorporation on change of name, the common seal (if any) and the statutory books and registers of the Company (in each case complete and up to date); (e) all papers, books, records, keys, credit cards and other property (if any) of the Company which is in the possession or under the control of any person who resigns as an officer of the Company in accordance with this clause; (f) bank statements in respect of each account of the Company as at 30{th} June 1998 and full bank reconciliation statements from the date of the bank statements down to the date of Completion; (g) duly executed powers of attorney relating to the exercise of rights in respect of the Shares in the form set out in Schedule 7; (h) all the title deed and supporting documents in relation to the Property; (i) a duly executed resignation in agreed form from Pauline Sandell terminating her employment by the Company; 4.1.2 the Vendors and the Purchaser shall each execute and exchange copies of the Tax Covenant; 4.1.3 the Vendors and the Purchaser shall each sign the Indebtedness Statement and exchange the NAV Estimate; 4.1.4 each of the Vendors shall: (a)repay and procure that any spouse or child of such Vendor or any company of which such Vendor (and/or any such spouse or child) has control, as "control" is defined in section 840 ICTA, shall repay all monies owed to the Company whether due for payment or not; (b) deliver to the Purchaser an acknowledgement in the form set out in Schedule 6; 4.1.5 the Vendors shall procure that Alan Sandell,Trevor Johnson and Adrian Atkins shall enter into service agreements with the Company in the agreed form; 4.1.6 the Vendors shall procure that a duly convened meeting of the directors of the Company is held at which: (a)the transfers referred to in clause 4.1.1 (subject to stamping if not previously effected) are approved for registration in the Company's register of members; (b) any persons nominated by the Purchaser are appointed as additional directors of the Company and any person nominated by the Purchaser is appointed as secretary of the Company; (c) the resignations of the resigning director and secretary are accepted; and (d) all existing instructions to the bankers of the Company are revoked and new instructions given to such bankers as the Purchaser may nominate in such form as the Purchaser shall direct; 4.1.7 the Purchaser will pay in accordance with clause 3 that part of the Consideration which is payable to the Vendors on Completion and as regards the Retention Fund and the NAV Escrow the Purchaser and the Vendors shall take all such steps and give all such written instructions as are necessary or desirable to give effect to the provisions of Schedules 10 and 12 . 5 WARRANTIES 5.1 The Warrantors warrant and represent to the Purchaser in the terms of the Warranties. 5.2 However, the Purchaser shall not be entitled to claim that any fact or combination of facts contrary to any of the Warranties constitutes a breach of any of the Warranties if and to the extent that such fact or combination of facts has been fairly disclosed in the Disclosure Letter. 5.3 The Warrantors: 5.3.1 agree that the Purchaser is entering into this Agreement in reliance upon the Warranties and that, save as provided in clause 5.2, no information of the Purchaser (whether actual or constructive) shall affect its right to bring a claim under the Warranties or shall operate to reduce the amount recoverable in respect of the Warranties; 5.3.2 undertake to disclose immediately to the Purchaser anything which comes to the notice of any of them which shows that the Warranties are or may be untrue or misleading; 5.3.3 shall indemnify the Purchaser against any reasonable costs (including legal costs) or expenses which the Purchaser may incur, either before or after the commencement of any action, as a result of any of the Warranties being untrue or misleading; and 5.3.4 agree with the Purchaser to waive any right which any of them may have in respect of any misrepresentation, inaccuracy or omission in any information or advice supplied or given by the Company or its officers and employees on which or on whom any of the Warrantors may have relied before agreeing to any term of this Agreement including, without limitation, the Tax Covenant or authorising any statement in the Disclosure Letter. 5.4 Without restricting the rights of the Purchaser or the ability of the Purchaser to claim damages on any basis available to it, the Warrantors undertake to the Purchaser that: 5.4.1 if there is a breach of paragraph 7.1 of Schedule 4 (Debtors) the Warrantors shall, (provided that the Purchaser has used all reasonable endeavours towards recovery by the Purchaser in the four month period stated in that paragraph and appropriated any general payment on account of a debtor's indebtedness to debts to which paragraph 7.1 relates in priority to other debts) pay on demand to the Purchaser in cash an amount equal to the aggregate of the sums (if any) which remain outstanding in respect of the debts which are the subject of the said Warranty provided that, upon such payment by the Warrantors, the Purchaser shall, if requested so to do, procure the assignment of such debts (to the extent to which sums remain outstanding in respect of them) to the Warrantors or such one or more of them as shall have made payment to the Purchaser in accordance with this clause 5.4.1 (the costs and expenses relating to such assignment being borne by the assignee(s)); and 5.4.2 if any of the Warranties other than the Warranty in paragraph 7.1 of Schedule 4, is proved to be untrue or misleading the Warrantors shall pay on demand to the Purchaser the amount necessary to put the Company into the position which would have existed if the Warranty had been true or not misleading. 5.5 In determining damages in respect of the Warranties the Purchaser shall not be required to cause the Company to be wound up or to rely on the limited liability of the Company in mitigation of its loss, but shall be deemed for this purpose to be under a duty to maintain the Company as a going concern and to make good any deficiency in its assets. 5.6 Without prejudice and subject to the provisions of paragraph 2.6 of Schedule 11, which shall for all purposes take precedence over the provisions of this clause 5.6. each of the Warranties shall be construed as a separate and independent Warranty and (save where expressly provided to the contrary in this Agreement) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other term of this Agreement. 5.7 In this Agreement, unless otherwise specified, where any Warranty refers to the knowledge, information or belief (or similar expression) of the Warrantors, each Warrantor is deemed to have such knowledge, information or belief which that Warrantor would have obtained had that Warrantor made all due and careful enquiries into the subject matter of that Warranty and the knowledge, information or belief of one of the Warrantors shall be imputed to the other Warrantors. 5.8 The Purchaser acknowledges that:- 5.8.1 this Agreement sets forth the entire agreement between the parties with respect to the subject matter covered by it and supersedes and replaces all prior communications, drafts, representations, warranties, stipulations, undertakings and agreements of whatsoever nature, whether oral or written, between the parties relating thereto; 5.8.2 it does not enter into this Agreement in reliance on any warranty, representation, undertaking, stipulation or agreement other than those contained in this Agreement; 5.8.3 its only remedies in respect of any fact or matter which renders any of the Warranties incorrect or is inconsistent with any of them are in breach of contract in respect of the Warranties concerned; 5.8.4 it has no right to rescind this Agreement either for breach of contract or for negligent or innocent misrepresentation; 5.8.5 without prejudice to the generality of the foregoing, the Purchaser waives any right or remedy it may have against the Warrantors, in respect of any statement (whether oral or written) of fact or opinion whatsoever, including any untrue or misleading statement, Warranty or representation, expressed or implied, made to the Purchaser or its agents, officers or employees during the negotiation of or otherwise in connection with this Agreement save for any Warranty, representation or undertaking expressly contained in this Agreement; and 5.8.6 the Consideration has been agreed by the Vendors and the Purchaser having regard (inter alia) to the provisions of this clause 5.8 provided that the provisions of this clause 5.8 shall not exclude any liability which the Warrantors would otherwise have to the Purchaser or any right which the Purchaser may have to rescind this Agreement in respect of any statements made fraudulently by the Warrantors prior to the execution of this Agreement. 5.9 Notwithstanding any other provisions of this Agreement the liability of the Warrantors hereunder shall be limited in accordance with the provisions of Schedule 11. 6 RESTRICTIVE COVENANTS 6.1 For the purpose of assuring to the Purchaser the full benefit of the Company and in consideration of the agreement of the Purchaser to buy the Shares on the terms of this Agreement, each of the Warrantors undertakes to the Purchaser that without the written consent of the Purchaser (which in the case of Alan R Sandell and Trevor D Johnson shall be deemed to have been given by the Purchaser for any acts or omissions required by their service agreements with the Company) such Warrantor shall not, whether directly or indirectly and whether alone or in conjunction with, or on behalf of any other person and whether as partner, shareholder, director, manager, consultant, agent or employee or in any other capacity whatsoever: 6.1.1 for a period of five years immediately following the date of Completion, canvass or solicit orders or facilitate the canvassing of or the soliciting of orders from any person who at any time during the 12 months immediately preceding the date of Completion was: (a) a customer or client of the Company; or (b) negotiating with the Company for the supply by the Company of goods or services where the orders are for goods or services which are competitive with those supplied by the Company at any time during the 12 months immediately preceding the date of Completion; 6.1.2 for a period of five years immediately following the date of Completion, accept the custom of any person who at any time during the 24 months immediately preceding the date of Completion was: (a) a customer or client of the Company; or (b) negotiating with the Company for the supply by the Company of goods or services where the custom involves the supply of goods or services which are competitive with those supplied by the Company at any time during the 12 months immediately preceding the date of Completion; 6.1.3 for a period of five years immediately following the date of Completion, canvass, solicit or entice away from the Company any supplier to the Company who had supplied goods and/or services to the Company at any time during the 12 months immediately preceding the date of Completion if such solicitation or enticement causes or would cause such supplier to cease supplying, or materially to reduce its supply of, those goods and/or services to the Company; 6.1.4 for a period of 5 years immediately following the date of Completion work or be engaged or (save as the holder of shares or other securities in any company which are quoted, listed or otherwise dealt in on a recognised stock exchange or other securities market and which confer not more than 1 per cent of the votes which could be cast at a general meeting of the company concerned) concerned or interested in or provide technical, commercial or professional advice to any trade or business which operates in the United Kingdom and which manufactures or supplies goods and/or services which are competitive with those supplied by the Company at any time during the 12 months immediately preceding the date of Completion; 6.1.5 for a period of five years immediately following the date of Completion, canvass, solicit or entice away from the Company any person employed in a managerial, supervisory, technical, sales or administrative post by, or who was a consultant to, the Company at the date of Completion or at any time during the period of six months immediately preceding the date of Completion; 6.1.6 for a period of 5 years immediately following the date of Completion in connection with any business carried on by such Warrantor use the words "Injection" or "Moulders" or for a period of 10 years immediately following the date of Completion use the name "Norwich", in conjunction with either "Injection" or "Moulders" or any colourable imitation thereof or any names or words similar to or likely to be confused therewith; or 6.1.7 attempt, or knowingly assist or procure any other person, to do any of the foregoing things. 6.2 For the purposes of this clause, "Confidential Information" means trade secrets or confidential information belonging or relating to the Company and including, without limitation, information or secrets relating to business or manufacturing methods and processes, development plans, inventions, research and development activities, designs, drawings, sources and supplies of materials used, the identity of customers and potential customers, prices, margins, special arrangements with customers of and suppliers to the Company, pricing strategy and marketing strategy, product and future product details, computer systems and computer software. Each of the Warrantors undertakes to the Purchaser that such Warrantor shall not divulge or communicate to any other person (other than to any officer or employee of the Company who needs that knowledge in the discharge of duties) Confidential Information, shall not use or attempt to use any such Confidential Information for the Warrantor's own benefit or for the benefit of any other person and shall use all reasonable endeavours to prevent the publication or disclosure of any Confidential Information. 6.3 Each of the Warrantors acknowledges that each of the undertakings contained in clauses 6.1 and 6.2 is reasonable and for the proper protection of the business of the Company and further acknowledges that damages may not be an adequate remedy to the Purchaser for breach of those undertakings. 6.4 The restrictions on the Warrantors contained in clause 6.2 shall not apply to any information which is or becomes generally available to the public on a non-confidential basis through no act or default on the part of any Warrantor. 6.5 Each undertaking contained in clauses 6.1 and 6.2 shall be construed as a separate undertaking and if any one or more of such undertakings or any part of an undertaking is held to be against the public interest or unlawful or in any way an unreasonable restraint of trade, the remaining undertakings or remaining part of the undertaking shall continue in full force and effect and shall bind the Warrantors. 7 GUARANTEE 7.1 In consideration of the Vendors entering into this Agreement with the Purchaser the Guarantor hereby irrevocably and unconditionally, as a primary obligor, undertakes and guarantees the due and punctual payment of all sums now or subsequently payable by the Purchaser to the Vendors under this Agreement or the Tax Covenant when the same shall become due and undertakes with the Vendors that if the Purchaser shall default in the payment of any sum under this Agreement or under the Tax Covenant the Guarantor will forthwith on demand by the Vendors pay such sum to the Vendors. 7.2 The guarantee undertaking contained in clause 7.1 is a continuing guarantee and shall remain in force until all sums payable by the Purchaser under this Agreement have been fully paid. 7.3 The Guarantor shall not be discharged by time or any other concessions given to the Purchaser or any third party by the Vendors or by anything the Vendors may do or omit to do or by any other dealing or thing which, but for this provision, would or might discharge the Guarantor. 8 COSTS Each party hereto shall pay its own costs and expenses of and incidental to the negotiation preparation and execution of this Agreement and all documents ancillary to this Agreement, except where otherwise expressly stated in this Agreement. 9 ANNOUNCEMENTS No party shall make or permit any person connected with it to make any announcement disclosure or statement concerning the material terms and conditions of this sale and purchase on or after Completion except as required by law or the rules of any exchange or other body to which such party is subject, or with the written approval of the other parties, such approval not to be unreasonably withheld or delayed, but the Purchaser and its investors and affiliates shall be entitled to notify customers, suppliers and other persons having business relationships with it or the Company of the fact of the sale and purchase and to notify its shareholders, financiers and potential investors of the financial terms of the sale and purchase. 10 INTEREST If any of the Warrantors become liable to pay the Purchaser or the Company any sum pursuant to this Agreement, whether a liquidated sum or by way of damages or otherwise, such Vendor shall be liable to pay interest on such sum from the due date for payment at the annual rate of 2% above the base lending rate from time to time of Royal Bank of Scotland Plc accruing on a daily basis until payment is made, whether before or after judgment. 11 NOTICES 11.1 In order to be effective, any notice, demand or other communication to be served under or pursuant to this Agreement shall be in writing and shall be served upon any party to this Agreement by: 11.1.1 posting by first class post (for inland mail); or 11.1.2 posting by airmail (for overseas mail); or 11.1.3 delivery by hand; or 11.1.4 sending by facsimile transmission to the party to be served at its address or facsimile number given below or at such other address or number in the United Kingdom as it may from time to time notify in writing to the other parties to this Agreement as being the recipient's address or number for service provided that in the case of a company it may instead (at the option of the sender) be addressed to its registered office and in the case of the Vendors, notice may be served at the address of the Vendors' Solicitors (marked for the attention of A Croome Esq): The Purchaser : NIM Holdings Limited Address: C/o Berry Plastics Corporation, 101 Oakley Street, Evansville, Indiana 47710-0959, USA Facsimile Number: 00 1 812 421 9604 Marked for the attention of: Martin R. Imbler with copies to: i.) Berry Plastics Corporation, 101 Oakley Street Evansville Indiana 47710-0959 USA Facsimile No: 00 1 812 421 9604 Attention: Martin R.Imbler ii) First Atlantic Capital Ltd 135 East 57{th} Street 29{th} Floor New York, New York 10022 USA Facsimile No: 00 1 212 750 0954 Attention: Roberto Buaron but so that any notice served by facsimile transmission shall be confirmed by the sender in writing served not later than the second Business Day after the date of the facsimile transmission. 11.2 A notice or demand given in accordance with clause 11 shall be deemed to have given or made as follows 11.2.1 if served by hand shall be deemed duly served when left at the address for service unless such delivery occurs on a day which is not a Business Day or after 5pm on a Business Day, in which case it shall be deemed duly served on the next following Business Day; or 11.2.2 if served by inland mail it shall be deemed duly served on the second Business Day or if by overseas mail the fifth Business Day after posting; and 11.2.3 if sent by facsimile transmission it shall be deemed to have been served at the time of transmission (provided that where such transmission occurs on a day which is not a Business Day or after 5pm on a Business Day, service will be deemed to occur on the next following Business Day) and in proving service of the same it shall be sufficient to prove, in the case of a letter, that such letter was properly stamped or franked first class or airmail (as relevant) addressed and placed in the post and, in the case of a facsimile transmission, that such facsimile was transmitted to the facsimile number of the addressee referred to above. 11.3 Any demand, notice or communication will be deemed to have been given to the personal representatives of a deceased Vendor notwithstanding that no grant of representation has been made in respect of such Vendor's estate, if the notice is addressed either: 11.3.1 to the deceased Vendor by name; or 11.3.2 to such Vendor's personal representatives by title either at the proper address of the Vendor pursuant to Clause 11.1 or at such other address as may have been notified by them in writing to the sender as being their address for service, and is otherwise served in accordance with the foregoing provisions. 11.4 The Guarantor irrevocably appoints the Purchaser's Solicitors as its agent to accept service of legal proceedings in connection with all matters arising out of this Agreement and the transactions contemplated by it. 12 GENERAL 12.1 This Agreement shall be binding on and shall continue for the benefit of each party's successors (as the case may be). 12.2 Notwithstanding Completion each of the agreements, covenants, obligations, warranties, indemnities and undertakings contained in this Agreement shall, except in so far as fully performed at Completion, continue in full force and effect. 12.3 None of the rights of the Purchaser arising out of this Agreement shall be varied or restricted by the giving of any time or other indulgence to any person but shall only be affected by a specific waiver or release by the Purchaser and any such waiver or release shall be specific to the matters and the Vendor to whom it relates, shall not be deemed to be a waiver of any subsequent breach or default and shall in no way affect the other terms of this Agreement. 12.4 All the rights and remedies expressly provided for by this Agreement shall not exclude any rights or remedies provided by law. 12.5 This Agreement may be executed in any number of counterparts by the different parties hereto or on separate counterparts, each of which when executed and delivered shall constitute one and the same instrument. 12.6 Any variation of this Agreement shall be binding only if it is recorded in a written document signed by or on behalf of all the parties. 12.7 The Vendors may not assign in whole or in part the benefit or burden of this Agreement. The Purchaser may assign the benefit of the Warranties and of the Tax Covenant. 13 GOVERNING LAW This Agreement shall be governed by and construed in all respects in accordance with English law and the parties submit to the exclusive jurisdiction of the English Courts. IN WITNESS of these matters this document has been executed as a deed and delivered on the date set out at the beginning of this Agreement. SCHEDULE 1 THE VENDORS
Name and Address NUMBER AND CLASS OF SHARES TO BE SOLD "B" 1p "C" 1P "D" 1P AMOUNT OF CONSIDERATION Ordinary ORDINARY ORDINARY RECEIVABLE James Edward BARLOW Coppertops Colby Road Banningham Norwich Norfolk NR11 7DY 106 4,394 439,400 45% of the consideration referred to in clause 3.3 Trevor David JOHNSON Thorpe Row Farm House Herne Lane, Thorpe Row Dereham Norfolk NR19 1QE 1,100 - - 11% of the consideration referred to in clause 3.3 Alan Robert SANDELL Scarrow Barn Thurgarton Norwich Norfolk NR11 7HR 44 1,356 135,600 14% of the consideration referred to in clause 3.3
James Edward Barlow and Jan Barlow (As Trustees) Coppertops Colby Road Banningham Norwich 15% of the consideration Norfolk NR11 7DY 1,500 - - referred to in clause 3.3 Alan SANDELL and Pauline SANDELL (As Trustees) Scarrow Barn Thurgarton Norwich Norfolk NR11 7HR 1,500 - - 15% of the consideration referred to in clause 3.3
SCHEDULE 2 DETAILS OF THE COMPANY
Name of Company : Norwich Injection Moulders Limited Registered number : 964668 Registered office : Stanford Tuck Road North Walsham Norfolk NR28 0JY Date of incorporation : 23 October 1969 Place of incorporation : England and Wales Status of Company : private company limited by shares Authorised share capital : 5,850, divided into 4,250 "B" ordinary shares of 1p each, 5,750 "C" ordinary shares of 1p each and 575,000 "D" ordinary shares of 1p each Issued share capital : as authorised share capital above Directors' full names : James Edward BARLOW Trevor David JOHNSON Alan Robert SANDELL Secretary's full name : Janet BARLOW Accounting reference date: 31 October Auditors : Lovewell Blake Bankers : Barclays Bank Plc Bank accounts - details: Charges, mortgages: 1. Debenture dated 23 March 1992 with Barclays Bank plc over the undertaking and all property and assets present and future including goodwill, book debts uncalled capital, buildings, fixtures, fixed plant and machinery 2. Chattels Mortgage dated 29 December 1994 with Forward Trust limited over one new Uniloy Model 54-3 injection blow moulding machine Serial Number: 4583. 3. Chattels mortgage dated 4 March 1996 with Forward Trust Limited over one new MMC 4 Rotary Indexing Type Lining Machine Serial Number: 104- 337 VAT registration number: 105 6096 87
SCHEDULE 3 PARTICULARS OF THE PROPERTY
1. TENURE Freehold DESCRIPTION Land in North Walsham Industrial Estate, Norfolk registered with title no. NK 89303 MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at Schedule 2 LEASES/LICENCES TO WHICH SUBJECT None EXISTING USE Light Industrial 2. TENURE Leasehold DESCRIPTION 25 Concorde Road, Norwich MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at Schedule 2 LEASES/LICENCES TO WHICH SUBJECT Underlease dated 17 October 1997 made between Norwich Injection Moulders Limited (1) and Norwich City Council (2) EXISTING USES Light Industrial. Current use restricted by licence to underlet and change of use dated 29 September 1997.
3. TENURE Freehold DESCRIPTION Land at North Walsham Industrial Estate, Norfolk (registered with title No.NK215741) MORTGAGES OR CHARGES See debenture dated 23{rd} March 1992 detailed at Schedule 2 LEASES/LICENCES TO WHICH SUBJECT None EXISTING USE Undeveloped
SCHEDULE 4 WARRANTIES (CLAUSE 5) 1 SCHEDULES 1 & 2; CAPITAL 1.1 The information contained in Schedules 1 and 2 is true, complete and accurate in all respects. 1.2 The Shares are fully paid and the Vendors are the only holders of Shares. 1.3 There are no agreements or arrangements in force which grant to any person any right to call for the allotment or issue of any share or loan capital of the Company or to convert any stock or security into share capital of the Company. 1.4 The Company does not have any interest, nor at any time in the period of six years ended on the date of this Agreement has it had any interest, in the share or loan capital of any body corporate. 1.5 There is not, nor is there any agreement or arrangement to create, any Encumbrance affecting any of the Shares and no claim has been made by any person to be entitled to any of the foregoing. 1.6 None of the Vendors or the Company has received any application or notice of any intended application for the rectification of the register of members of the Company. 2 ACCOUNTS 2.1 The Accounts and the audited accounts of the Company for the preceding financial period: 2.1.1 comply with the Companies Act; 2.1.2 have been prepared in accordance with the historical cost convention, with generally accepted accounting principles and practices in the United Kingdom and all applicable Accounting Standards and all applicable abstracts issued by the Urgent Issues Task Force Committee of the Accounting Standards Board; 2.1.3 have been prepared using the same bases and policies as were used in preparing the audited accounts of the Company in respect of the three financial years immediately preceding that to which the Accounts relate; 2.1.4 show a true and fair view of the state of affairs of the Company as at the Accounts Date and of its results for the financial year ended on the Accounts Date; 2.1.5 attribute a value to the Stocks which does not exceed the lower of cost or net realisable value as at the Accounts Date, after wholly writing off all redundant and obsolete Stocks and writing down appropriately any damaged or slow moving Stocks; and 2.1.6 are not affected by any extraordinary or exceptional item (save as disclosed in the Accounts). 2.2 The results shown by the audited profit and loss accounts of the Company for the two financial years immediately preceding that to which the Accounts relate have not (save as disclosed therein) been affected by any extraordinary or exceptional item rendering the profits or losses for the period covered by those accounts unusually high or low. 2.3 The Management Accounts: 2.3.1 have been prepared on a basis consistent with the Company's management accounts prepared since the Accounts Date ; and 2.3.2 have been carefully prepared using accounting policies consistent with those used in the preparation of the Accounts . 3 VENDORS' CAPACITY The Vendors have the necessary power and authority to enter into and perform this Agreement and sell and transfer or procure the transfer of the Shares and this Agreement constitutes valid and binding obligations of the Vendors in accordance with its terms. 4 INSIDERS' INTERESTS 4.1 There is not outstanding and there has not at any time during the period of three years ended on the date of this Agreement been: 4.1.1 any loan, guarantee or indemnity given by the Company in favour of any Insider or in favour of any other person in respect of any liability of any Insider; 4.1.2 any loan, guarantee or indemnity given by any Insider in favour of the Company or in favour of any other person in respect of any liability of the Company; or 4.1.3 any other contract to which the Company is or was a party and in which any Insider is or was interested in any way whatsoever (excluding any contract of employment between the Company and any of its officers details of which are set out in the Disclosure Letter). 4.2 No Insider has any interest, direct or indirect, in any trade or business which competes with the Company's business. 5 INFORMATION SUPPLIED 5.1 The specific disclosures contained in paragraphs 4.1.3 to 25.36 of the Disclosure Letter are not misleadingand have been carefully and diligently prepared . 5.2 The documents annexed to the Disclosure Letter are complete and accurate copies of the original document of which they purport to be a copy. 5.3 The Warrantors have not deliberately concealed any fact or circumstance relating to the affairs of the Company which they believe would influence the decision of the Purchaser to enter into this Agreement. 6 RECORDS 6.1 The accounting records of the Company are up to date and fully comply with the provisions of sections 221 and 222 of the Companies Act. 6.2 The Company's records systems and information, and the means of access to them, are exclusively owned by it and under its direct control. 7 DEBTORS 7.1 Except to the extent to which provision or reserve has been made in the Accounts or is made in the Completion Accounts referred to in Schedule 9, all debts owed to the Company which are reflected in the Accounts or which have arisen since the Accounts Date, either have been realised in full or will be realised in full in the normal course of collection not later than four months from the date of Completion. The amount of approximately 40,000 payable by Sanmex as referred to at paragraph 7.1 of the Disclosure Letter will be paid in full by no later than 30{th} April 1999. 7.2 None of the debts recorded in the books of the Company have been outstanding for more than four months from its due date of payment. 7.3 The Company has not made any loan or other arrangement with any person as a result of which it is, or may be, owed any money other than trade debts incurred in the ordinary course of business and cash at bank. 7.4 None of the debts of the Company have been the subject of any factoring or, invoice discounting, by the Company and the Company is not entitled to the benefit of any debt otherwise than as the original creditor. 8 STOCKS 8.1 The amount of Stocks held by the Company: 8.1.1 is not abnormally high or low in relation to the current trading requirements of the Company; and 8.1.2 is adequate for the Company's present requirements. 8.2 The Stocks held by the Company: 8.2.1 are not obsolete or slow moving, except to the extent they are written off in the Accounts; 8.2.2 which were given a value in drawing up the Accounts and which are still held by the Company do not have a realisable value which is less than that which was ascribed to them in drawing up the Accounts; 8.2.3 are in good condition and fit for their purpose; 8.2.4 insofar as they consist of finished goods and packaging, comply with all representations and warranties, whether express or implied, including those as to their specification, conformity with description and fitness for purpose; 8.2.5 insofar as they consist of finished goods, comply with all legal and regulatory requirements, including those of the United Kingdom and the European Union; 8.2.6 are in the beneficial ownership of the Company free from any Encumbrance; 8.2.7 do not include goods which have been returned by a customer; and 8.2.8 do not include goods, or components for goods, which are not sold in the ordinary course of the Company's business. 8.3 Since the Accounts Date: 8.3.1 the amount of Stocks has not abnormally increased or decreased; 8.3.2 there have been no price reductions or discounts on the sale of Stocks; and 8.3.3 Stocks have not been realised at less than they were reflected in the Accounts. 9 PLANT AND THE COMPUTER SYSTEM 9.1 The plant, machinery, tools, vehicles, equipment and furniture used in connection with the business of the Company: 9.1.1 are in a safe state of repair and condition and satisfactory working order and have been regularly and properly maintained; 9.1.2 are not surplus to the requirements of the Company's business; 9.1.3 are capable and to the best of the Warrantors knowledge, information and belief will (subject to normal wear and tear) remain capable throughout the respective periods of time during which they are each written down to a nil value (in accordance with the rates of depreciation adopted in the Accounts) of meeting the needs for which they were designed or purchased; 9.1.4 are legally and beneficially owned by the Company free from any Encumbrance; 9.1.5 are not the subject of any agreement for lease, hire, hire purchase or sale on deferred terms; 9.1.6 are in the possession or under the control of the Company; 9.1.7 are situated in the United Kingdom; and 9.1.8 are completely and accurately recorded in the plant register, a copy of which is annexed to the Disclosure Letter. 9.2 Full details of all elements of the Computer System, including all licences and service agreements relating to it to which the Company is a party have been disclosed to the Purchaser in the Disclosure Letter. 9.3 The Computer System: 9.3.1 is in full operating order without material downtime or errors and is fulfilling present requirements of the Company and will to the best of the Warrantors knowledge, information and belief fulfil the foreseeable requirements of the Company; 9.3.2 has adequate security, back-ups, duplication, hardware and software support and maintenance (including emergency cover) and trained personnel to ensure, as judged by reference to the business of the Company as carried on at Completion: 9.3.2.1 that breaches of security, errors and breakdowns are kept to a minimum; and 9.3.2.2 that no material disruption will be caused to the Company or any material part in the event of a breach of security, error or breakdown. 9.4 The acquisition of the Company by the Purchaser shall not affect the rights of the Company to have full and unrestricted access to use each element of the Computer System in the manner in which such element has been used prior to Completion. 9.5 The Company is not in breach of any arrangements pursuant to which any element of the Computer System has been made available by any third party. In addition, the Company has not received notice of and the Warrantors are not aware of any circumstances which would enable any third party to terminate such arrangements. 9.6 A true copy of the Company's internal Millennium compliance review is disclosed at disclosure document number Volume 3, XI A (a). 10 INTELLECTUAL PROPERTY 10.1 All Intellectual Property Rights used or required by the Company in connection with its business are in full force and effect. 10.2 As regards the Intellectual Property Rights owned by or licensed to the Company: 10.2.1 details of them are set out in the Disclosure Letter; 10.2.2 they are in the sole beneficial ownership of the Company; 10.2.3 each of them is valid and enforceable; and 10.2.4 where registerable, the Company is registered as the sole proprietor. 10.3 The Company has not carried on and does not carry on its business in such a way as to infringe any Intellectual Property Rights or moral rights of any person. 10.4 The Company has not received any notices from any third party in the last three years alleging any infringement of such party's Intellectual Property Rights. 10.5 The Company has not served on any third party in the last three years any notice alleging infringement of the Company's Intellectual Property Rights. 10.6 None of the Intellectual Property Rights owned or licensed by the Company are being (or are threatened to be) used, claimed, opposed or attacked by any person or are subject to any claim or potential claim for compensation pursuant to sections 40 and 41 of the Patents Act 1977 or otherwise. 10.7 No right or licence has been granted (or agreement to grant right or licence made) under which any person is or will be permitted to use in any manner or do anything which would or might otherwise infringe any of the Intellectual Property Rights owned by the Company. 10.8 The Disclosure Letter contains full details of all licences and other agreements relating to Intellectual Property Rights to which the Company is a party. Such agreements are valid, subsisting and enforceable in accordance with their terms and the Company is not in breach of any of their provisions. 10.9 The Company is not aware of any, nor to the information, knowledge and belief of any of the Vendors is there any, breach of any of the agreements referred to at paragraph 10.6 by any of the other parties thereto. 11 PROPERTY 11.1 The Property comprises all the properties owned, occupied or otherwise used by the Company and the particulars of the Property shown in Schedule 3 are true, complete (insofar as they relate to the headings in Schedule 3), and accurate in all respects. 11.2 The written replies given by the Vendors' Solicitors to the Purchaser's Solicitors' written enquiries concerning the Property are true complete and accurate in all respects. 11.3 The Company is the legal and beneficial owner of the Property and the Company has a good and marketable title to the Property for the estate and interest stated in Schedule 3 and has vacant possession of the Property. 11.4 There is not and, for so long as the Company has had an interest in the Property, has not been in relation to the Property in force any policy relating to defective title or restrictive covenant indemnity and to the knowledge, information or belief of the Warrantors no such policy has been in force prior to the Company having had an interest in the Property. 11.5 The Property and its deeds are free from any mortgage, debenture, charge, rent-charge, lien or other encumbrance securing the repayment of monies or other obligation or liability of any person. 11.6 The Property is not subject to any outgoings other than uniform business rates, water rates and insurance premiums and (where appropriate) rent and service charges. 11.7 There are no current proposals for any increase in the rateable value of the Property and no appeal has been lodged or is pending in respect of the rateable value. 11.8 All buildings on the Property have been occupied (within the meaning of section 65(2) Local Government Finance Act 1988) continuously since completion of their construction and used for the purpose for which they were constructed or for which they have been adapted or converted and all rates have been paid in full up to the date of this Agreement. 11.9 To the best of the Warrantors' knowledge, information and belief, the Property is not affected byany covenants, reservations, conditions, exceptions, stipulations, easements, profits a prendre, wayleaves, licences, franchises, grants, restrictions, overriding interests, rights of common or other rights vested in third parties or any contract to create or claim made by any person to be entitled to any of the foregoing. 11.10 To the best of the Warrantors' knowledge, information and belief there is not any outstanding breach or alleged breach of any such matter referred to in paragraph 11.9.. 11.11 There is not, nor has there been within the 3 years prior to the date of this Agreement any dispute or complaint whether actual or threatened with any neighbour, tenant, landlord or other person relating to the extent, use, enjoyment or occupation of the Property or with respect to boundary walls and fences or any means of access to the Property or with regard to any actual or alleged agreement, or other matter described in paragraph 11.9 affecting or relating to the Property. 11.12 The Property is not subject to any option, right of pre- emption whether exercisable by the Vendors, the Company, a tenant of the Property or otherwise and the Property is not subject to any contract to dispose of any interest therein which has not been completed. 11.13 The use of the Property for the purposes stated in Schedule 3 corresponds to the use to which it is in fact put or (where the Property is not presently in use) to the use to which it was last in fact put. 11.14 To the best of the Warrantors' knowledge, information and belief, planning permission has been obtained or is deemed to have been granted for the purposes of the Planning Acts with respect to the construction of all buildings and other structures on the Property and the present use of the Property and the use of plant and machinery in connection with such use and no permission has been given on a temporary or personal basis or subject to any conditions which may affect the continued occupation and use of the Property for its present use and no permission has been suspended or called in and no application for planning permission is awaiting a decision. 11.15 To the best of the Warrantors' knowledge, information and belief building regulation consents have been obtained with respect to all works of construction, alterations and improvements to the Property. 11.16 To the best of the Warrantors' knowledge, information and belief compliance is being made and has at all times been made during the Company's period of ownership in all respects with planning permissions, orders, and regulations issued under the Planning Acts and building regulation consents and bye-laws for the time being in force with respect to the Property. 11.17 All development charges, monetary claims and liabilities under the Planning Acts or other such legislation have been discharged and no such liability contingent or otherwise is outstanding. 11.18 All necessary Industrial Development Certificates have been obtained with respect to the Property. 11.19 To the best of the Warrantors' knowledge, information and belief compliance has been made with all applicable statutory and bye-law requirements with respect to the Property including without limitation with the requirements as to fire precautions, under Public Health Acts 1936 - 1961, Control of Pollution Act 1974, regulations made under the Health and Safety at Work etc Act 1974, the Highways Act 1980, the Buildings Act 1984 and the Water Industry Act 1991. 11.20 To the best of the Warrantors' knowledge, information and belief there is no outstanding and unobserved or unperformed obligation with respect to the Property necessary to comply with the requirements (whether formal or informal) of any competent body exercising statutory or delegated powers. 11.21 To the best of the Warrantors' knowledge, information and belief the Property is not affected by any requirement relating to it or its use which although not registered in the Register of Local Land Charges is capable of registration in that Register. 11.22 To the best of the Warrantors' knowledge, information and belief there are not in force or required to be in force any licences, whether under the Licensing Act 1964 or otherwise, which apply to the Property. 11.23 To the best of the Warrantors' knowledge, information and belief there are no compulsory purchase notices, orders or resolutions affecting the Property nor to the best of such knowledge, information and belief are there any circumstances likely to lead to any being made. 11.24 To the best of the Warrantors' knowledge, information and belief there are no closing, demolition or clearance orders, enforcement notices or stop notices affecting the Property nor to the best of the Warrantors' knowledge, information and belief are there any circumstances likely to lead to any being made. 11.25 To the best of the Warrantors' knowledge, information and belief the Property is not: 11.25.1 listed as being of special historic or architectural importance or located in an area which is designated as a Conservation Area under section 69 Planning (Listing Buildings and Conservation Areas) Act 1990; 11.25.2 located in an area or subject to circumstances rendering it particularly susceptible to flooding; 11.25.3 located in an area affected by mining, clay working, brine pumping subsidence or limestone mining subsidence; 11.25.4 located in an area affected by underground railways and is not bounded by overground railways; and 11.25.5 bounded or crossed by any river, stream, canal or drain. 11.26 There are appurtenant to the Property all rights and easements necessary for their present use and enjoyment and in particular: 11.26.1 every means of access to the Property is obtained directly from roads which have been taken over by the local or other highway authority and which are maintainable at the public expense and no means of access to any of the Property is shared with any other party nor subject to restriction nor to rights of determination by any other party; and 11.26.2 the Property is served by water, drainage, electricity and gas services all of which are connected to the mains by media located entirely on or under the Property the passage and provision of such services is uninterrupted and there is no likely interruption of such passage or provision. 11.27 To the best of the Warrantors' knowledge, information and belief, without making any enquiry or commissioning any survey all of the buildings on the Property are in good and substantial condition and are fit for the purposes for which they are presently used. 11.28 The Disclosure Letter fully and accurately sets out details of all insurance policies relating to the Property. 11.29 The Property is insured at normal premium rates in its full reinstatement value and against third party and public liabilities to an adequate extent, no additional premiums are payable or anticipated and there are no unusual exclusions excesses or conditions imposed upon such policies. 11.30 All premiums payable in respect of insurance policies relating to the Property which have become due have been duly paid and to the best of the Warrantors' knowledge, information and belief, no circumstances have arisen which would vitiate or permit the insurers to avoid such policies or alter the terms on which such policies are issued or to increase the premiums payable and there are no interests noted on such policies. 11.31 There is annexed to the Disclosure Letter the details of all leases, tenancies or other rights of occupation in respect of the Property whether granted by or to the Company and any contract to grant the same including but without limitation: 11.31.1 details of any lease superior to that held by the Company known to the Warrantors and of any sub-lease or other right of occupation granted by any tenant of the Company or other occupant of the Property of which the Warrantors are aware; 11.31.2 all provisions relating to use, alterations, repairs, decorations, sharing of facilities, assignment, underletting, parting with or sharing of possession and termination; 11.31.3 details of any side letters, collateral contracts, licences, consents, waivers or approvals given by the Company (or to the best of the Warrantors' knowledge, information and belief its predecessors in title) in respect of any covenant or other obligation; 11.31.4 details of any waiver or the reservation of the right of waiver of the exempt treatment of the Property for Value Added Tax whether by the Company or by any landlord of the Company (as appropriate); and 11.31.5 details of any rights to break or renew the term. 11.32 In respect of such leases, tenancies or other rights of occupation as referred to in paragraph 11.31: 11.32.1 all rents, insurance premiums, service charges and other amounts payable by or (as the case may be) receivable by the Company are fully paid up-to-date; 11.32.2 to the best of the Warrantors' knowledge, information and belief (without having made any enquiry or having commissioned any survey or physical inspection) there is no breach or alleged breach of any covenant or other provision nor any exercise of any right of restraint, forfeiture or entry whether by any of the Vendors the Company or any other party; 11.32.3 to the best of the Warrantors' knowledge, information and belief no obligation necessary to comply with any notice or other requirement given by the landlord under any leases of the Property is outstanding and unobserved or unperformed; 11.32.4 there are no rent reviews under any of the leases or tenancies in progress. 11.33 The Company has not at completion any actual, contingent or future ascertained or unascertained liability to any person firm or company in respect of or relating to any lease and/or licence of any of the Property. 11.34 The Company has not at any time assigned or otherwise disposed of any property comprised in a lease which is not a New Tenancy for the purposes of the Landlord and Tenant (Covenants) Act 1995. 11.35 The Company is not a guarantor under the terms of an Authorised Guarantee Agreement entered into pursuant to the Landlord and Tenant (Covenants) Act 1995. 11.36 Since 1st January 1996 whenever the Company has assigned or otherwise disposed of any reversionary interest in a leasehold property a release from the landlord's covenants has been obtained from the tenant or tenants pursuant to the Landlord and Tenant (Covenants) Act 1995. 12 EMPLOYEES 12.1 Full particulars are set out in the Disclosure Letter of: 12.1.1 the identities, dates of commencement of employment (or appointment to office) dates of birth and remuneration of all the employees and officers of the Company; 12.1.2 the terms of any existing contracts of service with the directors of the Company; 12.1.3 the terms of all existing contracts with employees of the Company whose emoluments exceed 25,000 per annum or, in the case of fluctuating amounts, have exceeded an average of 25,000 per annum over the three financial years ending on the Accounts Date; 12.1.4 all terms of employment of general application; 12.1.5 the terms of all consultancy agreements with the Company; and 12.1.6 the number of employees of the Company. 12.2 No amounts are owing to any present or former officers or employees of the Company except for salary which has accrued in respect of the calendar month in which this Agreement is executed or for business expenses incurred during the same month. 12.3 There are no agreements or other arrangements (whether or not legally binding) between the Company and any trade union or other body representing employees and the Company has not entered into any recognition agreement with a trade union nor has it done any act which might be construed as such. 12.4 There is no agreement or understanding (contractual or otherwise) between the Company and any employee or ex employee with respect to: 12.4.1 his or her employment; 12.4.2 ceasing to be employed; or 12.4.3 retirement 12.5 which is not included in the written terms of the employee's employment or previous employment (as the case may be). 12.6 During the period to which the Accounts relate and since the Accounts Date, no change has been made in the terms of employment of any employee or officer of the Company. 12.7 No negotiations for any increase in the emoluments or benefits of any officer or employee of the Company are current. 12.8 All subsisting contracts of service to which the Company is a party are terminable by the Company without compensation (other than under the Employment Rights Act 1996 by giving the minimum period of notice specified in section 86 of that Act). 12.9 The Company is not, and has not within the twelve months preceding the date of this Agreement been, involved in any industrial dispute and there are no facts known to the Warrantors which suggest that there may be an industrial dispute involving the Company. 12.10 No past or present employee or officer of the Company has any claim against the Company for loss of office or arising out of the termination of his office or employment (including any redundancy payment) and there is no event which would or might give rise to any such claim. 12.11 Details of any claims made in the six years prior to the date of this Agreement for compensation for alleged injury or illness caused in the course of employment with the Company are set out in the Disclosure Letter. 12.12 The Company has not established, nor is intending or negotiating to establish, any share or share option scheme or arrangement, or profit sharing bonus, commission, or other incentive scheme for all or any of its employees. 12.13 There is no early retirement scheme applicable to any employee of the Company. 12.14 The Company has neither introduced nor intends to introduce any short time working scheme or any redundancy scheme under which payments greater than those required by statute may be payable. 12.15 None of the products or services supplied by the Company are produced or provided by outworkers. 12.16 The Company has not acquired any undertaking or part of one such that the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply, or may apply, thereto. 12.17 The Company has in relation to each of its employees (and, so far as is relevant, to each of its former employees) complied with the requirements of all statutes, regulations, codes of conduct and collective agreements; 13 PENSIONS 13.1 Other than the Pension Schemes there are no agreements, arrangements, customs or practices (whether legally enforceable or not) in operation at the date of this Agreement for the payment of or contribution towards any pensions, allowances, lump sums or other like benefits on retirement or on death or during periods of sickness or disablement for the benefit of any Insider or employee or former employee of the Company or for the benefit of the dependants of any such persons nor has any proposal been announced to establish any such agreement or arrangement. 13.2 Full details of the Pension Schemes are included in or attached to the Disclosure Letter including, without limitation: 13.2.1 copies of all current agreements trust deeds and rules; 13.2.2 copies of the current explanatory booklets issued to employees of the Company who are or may become members of the Pension Schemes; 13.2.3 copies of any announcement to employees of the Company relating to pension matters, in respect of benefit improvements or other amendments not yet incorporated into the documentation of the Pension Schemes; 13.2.4 particulars of the assets of the Pension Schemes by reference to the categories listed in Schedule 3 of the Occupational Pension Schemes (Disclosure of Information) Regulations 1986 including particulars of any self investment; and 13.2.5 a list of the Pension Schemes' active members, with all particulars relevant to their membership of the Pension Schemes and necessary to establish their entitlement to benefits. 13.3 No discretion or power has been exercised under the Pension Schemes in respect of employees or directors, former employees and former directors of the Company to: 13.3.1 augment benefits; 13.3.2 admit to membership a director or employee who would not otherwise have been eligible for admission to membership; 13.3.3 provide in respect of a member a benefit which would not otherwise be provided in respect of such member; or 13.3.4 pay a contribution into it which would not otherwise have been paid. 13.4 The Pension Schemes hold no securities issued by, properties leased to or occupied by and has made no loans which are at the date of this Agreement outstanding to, the Company or any Insider. 13.5 There are no charges over any of the assets of the Pension Schemes. 13.6 All members of the Pension Scheme have received full formal written notification of all changes to the benefit structure of the Pension Scheme made since it was established. 13.7 There has been no breach of the trusts of the Pension Schemes and to the best of the Warrantors' knowledge, information and belief there are no actions, suits or claims (other than routine claims for benefits) outstanding pending or threatened against the trustees or administrator of the Pension Schemes or against any of the Vendors or the Company or any other employer which participates in the Pension Schemes in respect of any act, event, omission or other matter arising out of or in connection with the Pension Schemes and to the knowledge, information and belief of the Warrantors there are no circumstances which may give rise to any such claim. 13.8 The Pension Schemes are approved by the Board of Inland Revenue for the purposes of Chapter I of Part XIV of ICTA and to the knowledge, information or belief of the Warrantors there are no circumstances which might give the Inland Revenue reason to withdraw such approval. 13.9 The Pension Schemes are not contracted-out schemes for the purposes of the Pension Schemes Act 1993. 13.10 All contributions which are payable by the Company in accordance with the provisions of the Pension Schemes and all contributions due from its members have been duly made and to the best of the Warrantors' knowledge, information and belief the Company has fulfilled all its obligations under it. 13.11 The benefits which are prospectively and contingently payable under the provisions of the Pension Schemes are solely such as can be provided by the funds available for each of its members. 13.12 No augmentations to existing benefits have been made under the provisions of the Pension Schemes and no additional benefits have been granted without its actuary's confirmation in each case that such augmentation or addition can be borne by it within the existing funding rate without detriment to the benefit of its other members or the payment of any additional contributions which its actuary considers necessary to secure such augmented or additional benefits. 13.13 The Pension Schemes have been administered in accordance with: 13.13.1 the preservation requirements within the meaning of section 69 Pension Schemes Act 1993; 13.13.2 the equal access requirements within the meaning of section 118 Pension Schemes Act 1993; 13.13.3 all relevant provisions of the Pensions Act 1995 and any regulation made pursuant to that Act; and 13.13.4 all relevant provisions of the law of the European Communities. 13.14 Each of the Pension Schemes is a "relevant ear-marked scheme" and "wholly insured" as defined in Regulation 1 of the Occupational Pension Schemes (Scheme Administration) Regulations 1996 and Regulation 10 of the Occupational Pension Schemes (Investment) Regulations 1996 respectively. 13.15 The pensions as currently paid by the Company to Mr and Mrs Morrison, details of which are contained in the Disclosure Letter, satisfy in full the Company's obligation to pay pensions to Mr and Mrs Morrison pursuant to the agreements between the Company and Mr and Mrs Morrison dated 25{th} November 1983 and 1{st} June 1987 subject to an obligation to pay to Mrs Morrison a sum equal to four ninth's of the pension currently paid to Mr Morrison for such period as she shall survive him. 14 CONTRACTS AND CUSTOMERS 14.1 The Company is not, a party to any contract, transaction, or arrangement which: 14.1.1 is a contract of an unusually or abnormally onerous nature, or outside the ordinary and proper course of business; 14.1.2 is otherwise than by way of bargain at arm's length; 14.1.3 is of a long-term nature (that is, unlikely to have been fully performed, in accordance with its terms, more than six months after the date on which it was entered into or undertaken); 14.1.4 is considered by the Warrantors to be likely to result in a loss to the Company; 14.1.5 cannot based on the Company's existing capability readily be fulfilled or performed by the Company on time or without undue or unusual expenditure of money or effort; 14.1.6 involves payment by or to the Company by reference to fluctuations in the index of retail prices, or any other index, or in the rate of exchange for currency; 14.1.7 provides for payment to or by the Company in any currency other than Sterling; 14.1.8 is a forward contract or option for the sale or purchase of any commodity or currency; 14.1.9 involves or is likely to involve an aggregate consideration payable by the Company in excess of 100,000 or involves the supply of goods and services by the Company with a net sales value in excess of 75,000; 14.1.10 restricts its freedom to engage in any activity or business or confines its activity or business to a particular place; 14.1.11 is a guarantee or contract of indemnity by virtue of which it is under any actual or contingent liability; 14.1.12 by reason of the sale of the Shares or any provision of this Agreement, gives any other contracting party the right to terminate or vary the contract or create or increase any obligation or liability of the Company; 14.1.13 is a distributorship or agency contract or arrangement whether or not legally binding; 14.1.14 means that the Company is, or has agreed to become, a member of any joint venture, consortium or partnership or other unincorporated association; 14.1.15 involves the Company in any actual or contingent liability in respect of property which it has previously occupied or in which it had an interest including without limitation in respect of any leasehold land assigned or disposed of by it; 14.1.16 involves the Company in the payment of a finder's fee or commission relating to the sale of the Shares; or 14.1.17 requires the consent of any third party to the sale of the Shares. 14.2 The Company is not party to any contract where: 14.2.1 notice of termination has been given or received by the Company or which the Warrantors have (without having made any enquiry) reason to believe will be terminated (or not renewed on any renewal date or the expiry of a fixed term) by any other party to it; and 14.2.2 the liability or prospective liability of the Company is guaranteed by any person. 14.3 The Company is not in breach of any contract to which it is a party, and to the best of the Warrantors' knowledge, information and belief no other party to any such contract is in breach of it. To the knowledge, information or belief of the Warrantors there are no grounds for the termination, rescission, avoidance or repudiation of any contract by the Company or any other party to any such contract. 14.4 No offer, quote or tender given or made by the Company outside of the ordinary course of its business on or before the date of this Agreement is capable of giving rise to a contract by the unilateral act of a third party. 14.5 The Company has not accepted any obligation (other than an obligation arising under statute to service, repair or maintain or take back any goods or products that would apply after the goods or products have been delivered by it. 14.6 The Company has not waived the rights under any contract to which the Company is now a party. 14.7 In the period of twelve months prior to the date of this Agreement, no customer of the Company providing income of more than 250,000 in such period: 14.7.1 has ceased to trade with the Company; 14.7.2 has materially reduced the amount of business which it carries on with the Company; or 14.7.3 has materially changed the terms on which it carries on business with the Company, and no indication has been received by the Company or the Vendors that there will or is likely to be any such cessation, reduction or change. 14.8 In the period of twelve months prior to the date of this Agreement, no substantial supplier of the Company: 14.8.1 has ceased to trade with the Company; 14.8.2 has materially reduced the amount of business which it carries on with the Company; or 14.8.3 has materially changed the terms on which it carries on business with the Company, and no indication has been received by the Company or the Warrantors that there will or is likely to be any such cessation, reduction or change. 15 INSURANCE 15.1 The Disclosure Letter sets out full details of the Company's insurance policies in effect in relation to its business and assets. 15.2 The Company has at all times effected such insurances as are required by law. 15.3 All premiums due in relation to the Company's insurances detailed in the Disclosure Letter have been paid and to the best of the Warrantors' knowledge, information and belief there are no circumstances which might lead to any liability under such insurance being avoided by the insurers or the premiums being increased. 15.4 There is no claim outstanding under any policy of insurance nor to the knowledge, information or belief of any of the Warrantors are there circumstances likely to give rise to a claim. 16 FINANCE AND WORKING CAPITAL 16.1 The total amount borrowed by the Company from its bankers does not exceed its facilities and the total amount borrowed by the Company from whatsoever source does not exceed any limitation on its borrowing contained in its articles of association, or in any debenture or loan stock, trust deed or other document. 16.2 Full and accurate details of all overdrafts, loans or other financial facilities outstanding or available to the Company are set out in the Disclosure Letter. Nothing has been done whereby the continuance of any such facilities in full force and effect might be affected or prejudiced. 16.3 The Disclosure Letter contains a statement of all the bank accounts of the Company 16.4 No circumstances have arisen which could, with the giving of notice or lapse of time or both, entitle a provider of finance to the Company (other than on a normal overdraft facility) to call in the whole or any part of the monies advanced or to alter the terms of a facility or to enforce a security and no provider of finance to the Company on overdraft facility has demanded repayment or indicated that the existing facility will be withdrawn or reduced or not renewed or that any terms thereof will be altered to the disadvantage of the Company. 16.5 The Company has not engaged in any borrowing or financing transaction or arrangement which does not appear as borrowings in its statutory accounts. 16.6 No grants, subsidies and allowances have been applied for or received by the Company from any government, authority, body or agency (whether supra national, national, regional or local) which may at any time be repaid or repayable. 17 COMPANY LAW AND AUTHORITIES 17.1 The memorandum and articles of association of the Company in the form annexed to the Disclosure Letter are complete and accurate and have embodied in them or annexed to them copies of all resolutions and agreements as are referred to in section 380 of the Companies Act, and all amendments to them (if any) were duly and properly made. 17.2 The register of members and the other statutory books of the Company are up to date, have been properly kept and contain an accurate and complete record of the matters with which they should deal and no notice that any of them is incorrect or should be rectified has been received by the Company or any of the Vendors. 17.3 All such resolutions, returns and other documents required to be delivered to the Registrar of Companies have been duly delivered and are true and accurate and no such resolutions, returns or other documents have been filed in the period of 14 days prior to the date of this Agreement. 17.4 None of the activities of the Company is ultra vires the Company. 17.5 No person is or has been a shadow director, as defined by the Companies Act, of the Company for any period who has not for all purposes been a director throughout the same period. 17.6 No power of attorney given by the Company is in force. 18 INSOLVENCY, ETC. 18.1 No order has been made or petition presented or resolution passed for the winding up of the Company or for an administration order in respect of the Company. 18.2 No administrative receiver and/or manager has been appointed to the Company's business or assets or any part thereof. 18.3 No distress, execution or other process which remains undischarged has been levied on the assets of the Company. 18.4 The Company has not stopped payment to its creditors and is not insolvent within the meaning of section 123 of the Insolvency Act 1986 and the Company has not received a written demand in accordance with section 123(1)(a) of the Insolvency Act 1986. 18.5 No voluntary arrangement has been approved under Part I of the Insolvency Act 1986 and no compromise or arrangement has been sanctioned under section 425 of the Companies Act in respect of the Company. 18.6 No disqualification order has at any time been made pursuant to the provisions of the Company Directors Disqualification Act 1986 against any officer of the Company or any person who is not such an officer who takes part in the management of the Company. 18.7 The Company has not been a party to any transaction at an undervalue for the purpose of section 238 or section 239 of the Insolvency Act 1986 nor has it given or to the best of the Warrantors knowledge, information and belief received any preference for the purposes of section 239 or section 340 of the Insolvency Act 1986, in either case within a period of 2 years ending on the date of this Agreement. 18.8 To the knowledge, information or belief of the Warrantors there are no facts which are likely to give rise to any of the events or circumstances referred to in paragraphs 18.1 to 18.7. 19 LEGAL COMPLIANCE 19.1 Neither the Company, nor any of its officers, agents or employees (during the course of their duties in relation to the Company) have committed, or omitted to do, any act or thing the commission or omission of which is, in contravention of any act, order, regulation or the like in the United Kingdom the European Union or anywhere else the Company carries on its business and which is lilely to have a material adverse effect on the Company. 19.2 Without limiting the generality of the foregoing, the Company has not done or omitted to do any act or thing in contravention of the provisions of the Restrictive Trade Practices Acts 1976 and 1977, the Fair Trading Act 1973, the Competition Act 1980, Articles 85 and 86 of the Treaty of Rome, the Resale Prices Act 1976, the Trade Descriptions Act 1968, the Consumer Credit Act 1974, the Consumer Protection Act 1987, the Companies Act, the Financial Services Act 1986 and the Banking Act 1987 and which is likely to have a material adverse effect on the Company 19.3 There has not been within the six years prior to the date of this Agreement and there is not to the best of the Warrantors' knowledge, information and belief pending or in existence any investigation or enquiry by, or on behalf of, any governmental or other body into the affairs of the Company. 20 LICENCES The Company has all licences and consents required for the carrying on of its business and is not in breach of the terms or conditions of such licences and consents and there are no pending or (to the knowledge, information or belief of the Warrantors) threatened proceedings which might in any material adverse way affect such licences and consents. To the knowledge, information or belief of the Warrantors there is no reason why any of them should be suspended, threatened or revoked or be invalid. Copies of all such licences and consents are attached to the Disclosure Letter. 21 DEFAULT Since the Accounts Date to the best of the Warrantors' knowledge information and belief the Company has not manufactured, sold or supplied or agreed to manufacture, sell or supply any products and/or services which were, at the date of sale or have since proved to be, in any respect faulty, defective or dangerous, or which did not on the date of sale comply in any respect with any warranties or representations, expressly or impliedly made by it, or with customers' specifications or with all applicable statutes, regulations, orders or standards. 22 LITIGATION 22.1 Apart from normal debt collection for amounts not exceeding an aggregate of 10,000, neither the Company nor any person for whose acts or defaults in the matter it may be contractually or vicariously liable is involved in any civil criminal or arbitration proceedings or reference of any dispute to an expert and to the knowledge, information or belief of the Warrantors (i) no such proceeding is pending or threatened against the Company or any such person and (ii) there are no facts likely to give rise to such proceedings or reference. 22.2 There is no unsatisfied judgment or unfulfilled order outstanding against the Company and the Company is not party to any undertaking or assurance given to a court, tribunal or any other person in connection with the determination or settlement of any claim or proceedings. 23 EVENTS SINCE THE ACCOUNTS DATE Since the Accounts Date: 23.1 the business of the Company has been carried on in the ordinary and usual course and in the same manner, including nature and scope, as in the financial year ended on the Accounts Date; 23.2 there has been no material adverse change in the financial or trading position or prospects of the Company including, without limitation, any decrease in turnover (whether by value or by volume) or in the gross or net profits margins, or in liabilities (actual or contingent) or expenses (direct or indirect) of the Company as compared with the corresponding months in the financial year ended on the Accounts Date; 23.3 there has been no reduction in the value of the net assets of the Company determined in accordance with the same accounting policies as those applied in the Accounts (on the basis that each of the assets of the Company is valued at a figure no greater than the value attributed to it in the Accounts or, in the case of any of the said assets acquired by the Company after the Accounts Date, at a figure no greater than cost); 23.4 the business has not been adversely affected by the loss of any contract or customer or source or supply or by any other factor not affecting similar businesses to a like extent; 23.5 the Company has not acquired, or agreed to acquire, any tangible asset, single Intellectual Property Right or investment having a value in excess of 25,000 or tangible assets (excluding Stocks), Intellectual Property Rights, or investments having an aggregate value in excess of 40,000; 23.6 the Company has not disposed of, or agreed to dispose of, any tangible asset (excluding Stocks), any single Intellectual Property Right or investment either having a value reflected in the Accounts in excess of 15,000 or acquired since the Accounts Date; 23.7 the Company has not borrowed any money or raised any money in the nature of borrowings except for borrowings on overdraft in the ordinary course of business from Barclays Bank Plc within the Company's existing overdraft facility with that bank as set out in the Disclosure Letter; 23.8 no distributions within the meaning of section 209 ICTA have been declared paid or made save as provided for in the Accounts; 23.9 no items of Stocks, which are reflected in the Accounts as finished goods or items purchased for resale and which are still held by the Company, have been sold for less than their value as reflected in the Accounts; 23.10 no debtor has been released by the Company on terms that the debtor pays less than the face value of the debt, no debt has been subordinated, written down or written off, provided against (in whole or in part), factored or assigned, the Company has not agreed to do any of the foregoing and no debt in excess of 5,000 has proved to be irrecoverable; 23.11 no provision or reserve included in the Accounts has proved to be inadequate in the light of subsequent circumstances and there are no circumstances known to the Warrantors which indicate that any such provision or reserve may prove to be inadequate; 23.12 the Company has not changed its accounting reference date; 23.13 no payment has been made by the Company to, or benefit conferred (directly or indirectly) on, any of the Vendors or any Insider, save as specified in the Disclosure Letter; and 23.14 the Company has not incurred any fees or expenses in connection with the transaction contemplated by this Agreement and has incurred no liability to KPMG in connection with such transaction or to Lovewell Blake other than, in the case of Lovewell Blake work carried out in its capacity as the Company's auditor. 24 EFFECTS OF THIS AGREEMENT 24.1 To the knowledge, information or belief of the Vendors without having made any enquiry the acquisition of the Shares will not affect the Company's relationship with its suppliers and customers. 24.2 No brokers or finders fee is payable by the Company to any party in respect of the transaction contemplated by this Agreement. 25 TAXATION RETURNS, DEDUCTIONS, DISPUTES 25.1 In the six years preceding the Accounts Date the Company has duly and punctually paid all Taxation which it has become liable to pay and is under no liability to pay any penalty, interest, surcharge or fine in connection with any Taxation. 25.2 In the six years preceding the Accounts Date the Company has within any applicable time limits made all such returns, carried out all necessary registrations, provided all information requested by any Taxation Authority by means of full and accurate disclosure of all facts and material circumstances and maintained all such records in relation to Taxation as are required to be made or provided or maintained by the Company. 25.3 In the six years preceding the Accounts Date the Company has properly operated any and all systems of deduction of Taxation on payments which it has made or has been treated as having made to its employees and payment of National Insurance contributions and social security contributions and has complied with all its reporting obligations to all Taxation Authorities or other appropriate authorities in all jurisdictions and in connection with the benefits provided for existing or former officers employees and directors of the Company. 25.4 The Company is not involved in any dispute in relation to Taxation and there are no circumstances known to the Warrantors likely to give rise to such dispute. 25.5 In the six years preceding the Accounts Date no Taxation Authority has investigated the Company or given notification that it intends to commence investigation and there are no circumstances known to the Warrantors likely to give rise to an investigation. 25.6 In the six years preceding the Accounts Date the Company has made all deductions in respect of or on account of any Taxation from any payments made by it which it is obliged to make and has accounted in full (where payment has already become due) to the relevant Taxation Authority for all amounts so deducted. 25.7 There is set out in the Disclosure Letter with express reference to this warranty full details of all matters relating to Taxation in respect of which the Company (whether alone or jointly with any other person) has an outstanding entitlement or obligation: 25.7.1 to make any claim (including a supplementary claim) for relief from Taxation or to make any claim for repayment of any amount of tax paid or to make any election for one type of relief or one basis system or method of taxation as opposed to another where such claim or election is taken into account in the preparation of the Accounts; 25.7.2 to make any appeal (including a further appeal) against an assessment to Taxation; and 25.7.3 to make any application for the postponement of payment of Taxation. BASE VALUES, CAPITAL GAINS 25.8 The Company has sufficient records relating to past events to calculate the liability to Taxation or relief which would arise on any disposal or on the realisation of any asset owned at the Accounts Date or acquired since that date but before Completion. 25.9 The value attributed to each asset of the Company in, or for the purposes of, the Accounts as at the Accounts Date is such that on any disposal thereof for a consideration equal to such value (and disregarding any right to claim any allowance or relief) no liability to Taxation in respect of any gain (including any gain deemed to arise for Taxation purposes) will arise. 25.10 No liability to Taxation will arise on the disposal by the Company of any asset acquired since the Accounts Date for a consideration equal to the consideration actually given for the acquisition. 25.11 The Company has not made a claim under sections 152-158 (roll over relief), 175 (replacement of business assets by members of a group), 247 (roll over relief on compulsory acquisition) TCGA. 25.12 The Company has not since the Accounts Date appropriated any asset forming part of its trading stock for any purpose. 25.13 No election has been made under section 35(5) TCGA (assets held on 31 March 1982) in respect of any assets of the Company. STAMP DUTY 25.14 There is no instrument which is necessary to establish the Company's title to any right or asset which is liable to stamp duty but which has not been duly stamped or which would attract stamp duty if brought within the relevant jurisdiction. 25.15 The Company is not and has never been part of a group of companies as defined in section 170 TCGA TAXATION LIABILITIES AND RELIEFS 25.16 To the best of the Warrantors' knowledge, information and belief other than as provided for or noted in the Accounts no event transaction act or omission has occurred which could result in the Company becoming liable to pay or to bear or to make reimbursement or indemnity in respect of any Taxation which is primarily or directly chargeable against or attributable to any person firm or company other than the Company. 25.17 The Company has not been party to any transaction or arrangement which could give rise to a liability to Taxation where the consideration received or given by the Company was or, in respect of any transaction or arrangement entered into before the date of this Agreement, will be greater or less than that which would have been received or given if the transaction had been carried out on an arm's length basis. 25.18 The Company is not liable to Taxation (and has not been and will not be denied any relief) by reason of any interest or other payment by the Company being treated by any Taxation Authority as a distribution or other such similar payment. 25.19 The Disclosure Letter contains full details of all claims for the set-off of the Company's advance corporation tax ("ACT") against the Company's liability to corporation tax made within the last six years and the Company is not liable to make any payment for ACT surrendered or otherwise made available to it. 25.20 The Company has not: 25.20.1 been a party to, involved in, or connected with any exchange of securities whether or not (by virtue of section 135 TCGA) section 127 TCGA applied to the exchange; 25.20.2 carried out or been involved in or connected with any reorganisation or scheme of reconstruction or amalgamation whether or not (by virtue of section 126 or 136 TCGA) section 127 TCGA applied to such reorganisation or scheme of reconstruction or amalgamation; 25.20.3 carried out or been involved in or connected with any scheme of reconstruction or amalgamation involving a transfer of business assets whether or not section 139 TCGA applied to the transfer; 25.20.4 made or received any exempt distribution within the meaning of section 213 ICTA, and has at no time been a relevant company in relation to an exempt distribution for the purposes of that section or concerned in an exempt distribution for the purposes of section 214 ICTA; or 25.20.5 made a purchase of its own shares to which section 219(1) ICTA applies. VALUE ADDED TAX 25.21 The Company is registered for the purposes of value added tax and has not been required by the Commissioners of Customs & Excise to give security under paragraph 4 (power to require security and production of evidence) of Schedule 11 VATA (administration collection and enforcement). 25.22 The Company has maintained and obtained accounts, records, invoices and other documents (as the case may be) appropriate or requisite for the purposes of value added tax which are complete, correct and up to date. 25.23 The Company has not at any time been treated as a member of any group of companies for the purposes of section 43 VATA (group of companies) and has not applied for treatment as such a member. 25.24 The Company has never received a surcharge liability notice under section 59 VATA (default surcharge) or a penalty liability notice under section 64 VATA (persistent misdeclarations). 25.25 The Company is not, nor in the two years prior to Completion has been, in arrears with any payments or returns or notifications under any statutory provisions, directions, conditions or notices relating to value added tax, or liable to forfeiture or penalty or interest or surcharge or to the operation of any penalty, interest or surcharge provision. 25.26 The Company has not made any supplies that are exempt supplies or would be exempt supplies if supplied within the United Kingdom. 25.27 The Disclosure Letter sets out full details of any claim for bad debt relief under section 36 VATA (bad debts) made and which remain outstanding or which may be made by the Company and if written off would give rise to a right to claim relief. 25.28 The Company is not and has not agreed to become an agent, manager or factor for the purposes of section 47 VATA (agents) of any person who is not resident in the United Kingdom. 25.29 The Company has not incurred any liability in respect of value added tax (whether to H.M. Customs and Excise or to any other person) by reason of the provisions of paragraph 2(1) Schedule 10 VATA and there are no circumstances whereby the Company could become so liable as a result of a person making an election under that paragraph. 25.30 Neither the Company nor any relevant associate (within the meaning of paragraph 3(7) Schedule 10 VATA) has made any election under paragraph 2(1) Schedule 10 VATA in respect of any land in, over or in respect of which the Company has any interest, right or licence to occupy and the Company is not aware of any intention to make such an election. 25.31 There is set out in the Disclosure Letter with express reference to this warranty full details of any agreement or arrangement regarding group registration for value added tax which the Company has entered into. GIFTS 25.32 There is no unsatisfied liability to capital transfer tax or inheritance tax attached or attributable to the assets of the Company or the shares of the Company and neither the assets nor the shares are subject to any Inland Revenue charge as mentioned in section 237 Inheritance Tax Act 1984. 25.33 No person has the power under section 212 Inheritance Tax Act 1984 to raise any capital transfer tax or inheritance tax by the sale or mortgage of or by a terminable charge on any of the Company's assets. CAPITAL ALLOWANCES 25.34 There are set out in the Disclosure Letter details of all capital allowances, first year allowances and industrial building allowances claimed in respect of the accounting period of the Company ended on the Accounts Date in respect of each asset or pool of assets for which separate computations of capital allowances first year allowances or industrial buildings allowances as appropriate are required to be made or, as a result of any election, are made. 25.35 The book value of each of the assets or pool of assets of the Company in or adopted for the purpose of the Accounts does not exceed the written down value of such asset or pool of assets for the purposes of CAA 1990. 25.36 No balancing charge pursuant to CAA 1990 (or other legislation relating to any capital allowances) will be made on the Company on any disposal of any or all such assets for a consideration equal to or less than the value of such asset or assets in the Accounts. 25.37 The Company has not incurred any expenditure on the provision of any capital allowance bearing asset for leasing. 25.38 The Company has not made any election under section 37 CAA 1990 (short life assets) nor is it taken to have made any such election under section 37(8)(c) CAA 1990. 25.39 No transaction has been entered into by virtue of which sections 75 (restrictions on capital allowances) or 157 CAA 1990 (connected parties) are applicable. 25.40 Since the Accounts Date nothing has happened as a result of which: 25.40.1 there may be made against the Company a balancing charge under the Capital Allowances Act 1968 or under the CAA 1990; 25.40.2 any disposal value may be brought into account under section 24 CAA 1990 (writing down allowances and balancing adjustments); 25.40.3 there may be any recovery of excess relief within sections 46 or 47 CAA 1990 (recovery of excess relief); or 25.40.4 a relevant event may occur within the meaning of section 138 CAA 1990 (scientific research). 25.41 There is not and to the best of the Warrantors' knowledge, information and belief there are no circumstances which could give rise to any dispute between the Company and any other person as to the entitlement to capital allowances under sections 51 - 59 CAA 1990 (fixtures). 25.42 None of the assets for which a capital allowance has been made to the Company or has been claimed by the Company has been disposed of or ceased to be used for the purpose of its trade since the Accounts Date. 25.43 None of the assets, expenditure on which has qualified for a capital allowance under the CAA 1990 Part I (industrial buildings), has at any time since such expenditure was incurred been used otherwise than as an industrial building or structure as defined in section 18 CAA 1990. 25.44 In the six years preceding the Accounts Date the Company has complied with sections 203 - 203L ICTA (pay as you earn) and the regulations made thereunder in respect of all payments within the meaning of those sections and with the Social Security (Contributions) Regulations 1979 in respect of all earnings which are subject to those regulations. 25.45 No officer or employee of the Company participates in any scheme of the Company approved under Schedule 9 ICTA (approved share option and profit sharing schemes) or is a beneficiary or potential beneficiary of a qualifying employee share ownership trust of the Company as defined in Schedule 5 Finance Act 1989 (employee share ownership trusts). 25.46 The Company has not issued shares to which Part III, Chapter II Finance Act 1988 (unapproved employee share schemes) applies. 25.47 No remuneration for or in respect of the services of a director or an employee has been paid to any person other than the director or employee. 25.48 The Company has not since the Accounts Date entered into or been a party to any transaction which will or may give rise to a liability to Taxation other than any Taxation arising in the ordinary course of business. 25.49 The Company is not under any obligation to make any payment of interest or other similar type of payment which will not be wholly allowable as a deduction in computing its taxable profits in the accounting period (or other relevant period) in which such amount is treated as an expense in the accounts of the Company or (if earlier) in which such amount is paid. 25.50 The Company is not liable and has not been liable to Taxation in any jurisdiction other than the United Kingdom. 25.51 The Company is and at all times has been resident in the United Kingdom for the purposes of Taxation and has not been resident outside the United Kingdom for any double Taxation arrangements. 25.52 The Company has not made any repayment of share capital or issued any share capital as paid up otherwise than by the receipt of new consideration. 25.53 The Company is not and has never been a close investment holding company within the meaning of section 13A ICTA (close investment holding companies). 26 ENVIRONMENT 26.1 In this paragraph: 26.1.1 "Environmental Law" means all laws (whether statutory or common, civil or criminal), regulations, codes of practice, circulars, guidance notes and the like (whether in the United Kingdom or elsewhere but having force in the United Kingdom) concerning: 26.1.2 the control and prevention of pollution of land, water or the atmosphere; 26.1.3 the release, discharge, spillage, deposit, emission or other escape of Hazardous Substances; 26.1.4 noise, odour or other nuisances; 26.1.5 the production, transportation, storage, treatment, recycling or disposal of waste; and 26.1.6 the conditions of the workplace and the protection of human health and life; 26.2.1 "Environmental Licences" means all permits, licences, authorisations, consents or other approvals required by any Environmental Law to be obtained in connection with the carrying on of the business, activities and operations of the Company or the use of any Relevant Property; 26.2.2 "Hazardous Substance" means any natural or artificial substance (whether in solid or liquid form or in the form of a gas or vapour) which may either alone or in combination with any other substance be harmful to man or to the life or health of any other living organisms or to the environment; and 26.2.3 "Relevant Property" means any premises now or previously owned, leased, occupied, or controlled by the Company. 26.3 There are annexed to the Disclosure Letter copies of the Environmental Licenses obtained by the Company. 26.4 The Company has obtained all requisite Environmental Licences and has at all times complied with the terms and conditions of those licences and to the best of the Warrantors' knowledge, information and belief without undue effort and expenditure on the part of the Company, can continue to so comply. 26.5 The Company has at all times complied with all applicable Environmental Law. 26.6 The Company has not received any notice or other communication from which it appears that it may be or is alleged to be in violation of any Environmental Law or Environmental Licence, or that any Environmental Licence may be subject to modification, suspension or revocation and there are no circumstances known to the Warrantors likely to give rise to any such violation or modification, suspension or revocation. 26.7 The Company has not used, disposed of, generated, stored, transported, dumped, released, deposited or buried or emitted any Hazardous Substance at, on, from or under any Relevant Property. 26.8 So far as the Warrantors are aware without having commissioned any environmental survey or audit in respect of Relevant Property no other person has used, disposed of, generated, stored, transported, dumped, released, deposited, buried or emitted any Hazardous Substance at, on, from or under any Relevant Property. 26.9 The Company has not disposed of any Hazardous Substance in such a way that its disposal constituted, a breach of any Environmental Law. 26.10 Full details of any environmental assessment, audit, review or investigation conducted by or on behalf of the Company are contained in or annexed to the Disclosure Letter. 26.11 To the knowledge, information or belief of the Warrantors, but without having made any enquiries the warranties in paragraphs 26.3 to 26.8 inclusive would be true if they were given in respect of any other person who owns or occupies or carries on business on property which adjoins the Property and if they related to activities carried on by such person on such property. 26.12 Full details are set out in the Disclosure Letter of : 26.12.1 any remedial work, including the cost of that work, carried out at any Relevant Property to ensure compliance with any Environmental Law; and 26.12.2 all expenditure which to the knowledge, information or belief of the Vendors is now required to be incurred by the Company to comply with any applicable Environmental Law or any condition attaching to any Environmental Licence. SCHEDULE 5 FORM OF RESIGNATION OF DIRECTOR/SECRETARY (clause 4.1.1(c)) To : The Directors Norwich Injection Moulders Limited 1998 Dear Sirs NORWICH INJECTION MOULDERS LIMITED ("THE COMPANY") I hereby resign from my office as Director/the Secretary of the Company and acknowledge that I have no claim whatsoever against the Company in respect of loss of office or employment, redundancy or unfair dismissal save in respect of accrued remuneration of the current month and that I have no other claim or right of action against the Company whatsoever. SIGNED BY [NAME] AS A DEED in the presence of: Witness's Signature: Name: Address: SCHEDULE 6 FORM OF ACKNOWLEDGEMENT (CLAUSE 4.1.4 (B)) To : The Directors NIM Holdings Limited 1998 Dear Sirs NORWICH INJECTION MOULDERS LIMITED ("THE COMPANY") In consideration of your today agreeing to complete the purchase of the entire issued share capital of the Company I/we hereby acknowledge that: 1. I/we and the persons who are connected with me/us have no claim against the Company save in respect of salary to date for the current month; and 2. there are no agreements or arrangements under or as a result of which the Company has any actual, contingent or future obligation to or in respect of me/us or any persons who are connected with me/us including, without limitation, any obligation under any guarantee entered into by the Company. Section 839 Income and Corporation Taxes Act 1988 applies as it applies in that Act to determine whether one person is connected with another. IN WITNESS of these matters this document is executed as a deed and delivered on the date stated at the beginning of this document. SIGNED BY [NAME] AS A DEED in the presence of: Witness's signature: Name: Address: SCHEDULE 7 FORM OF POWER OF ATTORNEY (clause 4.1.1.(g)) THIS POWER OF ATTORNEY is made the day of 1998 by [NAME] ("the Grantor") RECITAL: The Grantor is the registered holder of [NUMBER AND DESCRIPTION] shares ("the Shares") in the capital of Norwich Injection Moulders Limited ("the Company") and has sold the Shares. 1 GRANT The Grantor irrevocably appoints [NEWCO LIMITED] ("the Purchaser") to be its attorney to do all or any of the matters and things set out in paragraph 4 of this Power. 2 IRREVOCABLE APPOINTMENT This Power of Attorney is executed to secure the interest of the Purchaser in the Shares and shall accordingly be irrevocable. 3 RATIFICATION AND NON INTERFERENCE The Grantor undertakes: 3.1 to ratify everything done by the Purchaser under this power of attorney; and 3.2 not to exercise or attempt to exercise any rights attached to the Shares which are exercisable by the Purchaser under this power of attorney. 4 MATTERS COVERED The matters and things referred to in paragraph 1 are: 4.1 to exercise all voting and other rights attaching to the Shares; 4.2 to execute a form of proxy in favour of such person or persons as the Purchaser thinks fit to attend and vote as the Grantor's proxy at any general meeting of the members or any separate class meeting of any class of members of the Company in respect of the Shares in such manner as the Purchaser may decide; 4.3 to exercise all rights to call for or requisition any such general or separate class meeting of the Company; 4.4 to consent to the convening and holding of any such general or separate class meeting of the Company and the passing of the resolutions to be submitted at any such meeting on short notice; and 4.5 to settle the terms of and consent and agree to any resolutions of the Company dealt with by written resolution whether pursuant to the Company's articles of association, the Companies Act 1985 or otherwise howsoever. 5. CESSATION This Power of Attorney shall cease to have any effect on the earlier of the shares being registered as held by the Purchaser in the Company's register of members or the expiry of 12 months from the date hereof. SIGNED BY [NAME] AS A DEED in the presence of: Witness's Signature: Name: Address: SCHEDULE 8 Tax Covenant DATE: 1998 PARTIES: (1) THE PERSONS whose names and addresses are set out in the Schedule to this Deed (together referred to as the "Warrantors") (2) NIM HOLDINGS LIMITED ("the Purchaser" which expression shall be deemed to include its successors in title and assigns) whose registered office is at Aldwych House, 81 Aldwych, London, WC2B 4HN. RECITAL: This Deed is entered into pursuant to an agreement of the same date as this ("the Agreement") between the Vendors (1) and the Purchaser (2) whereby the Vendors have agreed to sell and the Purchaser has agreed to purchase the whole of the share capital of Norwich Injection Moulders Limited (registered number 964668) (the "Company") on the terms and conditions set out therein. IT IS AGREED as follows: 1. INTERPRETATION In this Deed: 1.1the following words and expressions shall have the same meanings as in the Agreement:
"Accounts" "Accounts Date" "Auditors" "Business Day" "Completion" "Completion Accounts" "Completion Accounts Date" "ICTA" "Net Assets" "Shares" "TCGA" "Vendors" the following words and expressions shall have the following meanings "Saving" means the reduction or elimination of any liability of the Company to make an actual payment of Taxation in respect of which the Warrantors would not have been liable under clause 2, by the use of any Relief arising as a result of a Taxation Liability or other liability in respect of which the Warrantors have made a payment under clause 2
1.2 "Claim" means any notice demand assessment letter or other document issued or action taken by or on behalf of any authority, body or person whether in the United Kingdom or elsewhere, including but not limited to the United Kingdom Inland Revenue and Customs and Excise Authorities, whereby it appears that the Company is or may be subject to a Taxation Liability (as defined below); 1.3 "Event" means any event whatsoever including but not limited to any transaction, action or omission whether or not the Company is a party thereto, the death of any person, the earning, accrual or receipt of any income, profits, or gains, the incurring for any Taxation purpose of any loss or expenditure, the declaration, paying or making of any dividend or other distribution, any change in the residence of any person for any Taxation purpose, and the entry into and/or Completion of the Agreement and any Event which is deemed to have occurred or is treated as having occurred for the purposes of Taxation Legislation provided such Taxation Legislation was in force at Completion; 1.4 "Purchaser's Group" means the Purchaser and any companies within the same group of companies as the Purchaser for the purposes of section 170 of TCGA at the time when the matter falls to be considered for the purposes of this Deed; 1.5 "Surrender Agreement" means an agreement such as is described in clause 1.9.5; 1.6 "Relief" means any relief, allowance, exemption, set off or deduction in profits, income or gains of any description or credit against, or right to repayment of, Taxation including repayment supplement granted by or pursuant to any Taxation Legislation; 1.7 "Taxation" means: 1.7.1 all taxes, duties, charges, levies, deductions or withholdings whenever imposed and whether of the United Kingdom or elsewhere including without limitation income tax, (including income tax required to be deducted or withheld from or accounted for in respect of any payment) capital gains tax, inheritance tax, corporation tax, advance corporation tax, liabilities in respect of the Pay As You Earn system, any charge to tax arising pursuant to section 419 ICTA, stamp duty, stamp duty reserve tax, value added tax, customs duties, excise duties, other import duties, withholding tax, national insurance, social security and other similar contributions; 1.7.2 any interest, penalty, fine and surcharge related to or arising in connection with any of the matters specified in the preceding sub-paragraphs; 1.8 "Taxation Legislation" means any statute, statutory instrument, regulation or legislative provision wheresoever enacted providing for, imposing or relating to Taxation and shall include any statute, enactment, law, statutory instrument, order, regulation or provision which amends extends consolidates or replaces the same or which has been amended extended consolidated or replaced by the same; 1.9 "Taxation Liability" means any liability of the Company to make a payment of or in respect of Taxation whether or not the same is the primary liability of the Company and whether or not the Company has or may have a right of reimbursement against any other person and shall further include: 1.9.1 any Taxation which is assessed on any person other than the Company whether or not the Taxation is assessed in the name of the Company or the Purchaser and which, or an amount equivalent to which, is recoverable by that person from the Company pursuant to the provisions of the Taxation Legislation; 1.9.2 the loss or set-off of any Relief which was treated as an asset of the Company in the Accounts (where but for such set off the Company would have had an actual liability to Taxation in respect of which the Purchaser would have been able to have made a claim against the Vendors under this Deed); 1.9.3 the loss or set-off of any Relief which was taken into account in computing any provision for deferred tax which appears in the Accounts or would have appeared in the Accounts but for the presumed availability of such Relief (a "Notional Taxation Liability"); 1.9.4 the set-off of any Relief available to the Company or any member of the Purchaser's Group, which Relief arises principally as a result of an Event after Completion, in circumstances where but for such set-off there would have been a Taxation Liability in respect of which the Warrantors would have been liable to make a payment under clause 2 of this Deed: and, for the purposes of clauses 1.9.2, 1.9.3, and 1.9.4, the amount of the Relief so set- off or which would otherwise have been obtained shall be treated for the purposes of this Deed as a Taxation Liability of the Company provided that if such Relief would operate as a deduction from or as a set-off against income, profits or gains the Taxation Liability which is deemed to have arisen shall be equal to the amount of Taxation which would, on the basis of the rates of Taxation current at the date of such set-off, have otherwise been saved; provided also that the Taxation Liability which arises or is deemed to arise pursuant to this clause 1.9.4 shall not exceed the liability of the Warrantors to make a payment under this Deed which would have resulted had such a Relief not been set-off. 1.9.5 the liability of the Company under any agreement entered into on or before Completion to make a payment to another person in respect of Reliefs surrendered or otherwise made available to the Company under Part X, Ch IV ICTA or in respect of advance corporation tax surrendered or otherwise made available to the Company; 1.9.6 any inheritance tax which: 1.9.6.1 is at Completion a charge on any of the Shares or assets of the Company or gives rise to a power to sell, mortgage or charge any of the Shares or assets of the Company; or 1.9.6.2 after Completion becomes a charge on or gives rise to a power of sale, mortgage or charge over any of the Shares or assets of the Company; and, for the purposes of clauses 1.9.6.1 and 1.9.6.2, in determining whether such a charge on or such a power over any of the Shares or assets of the Company exists at any time the fact that any inheritance tax is not yet payable or may be paid by instalments shall be disregarded and the total liability for such Taxation shall be treated as falling due, and a charge or power of sale as arising in relation to that total liability, on the date of the chargeable transfer in respect of which such Taxation becomes payable or arises and the provisions of section 213 of the Inheritance Tax Act 1984 shall not apply thereto; 1.9.6.3 arises as a result of a transfer of value occurring on or before Completion (whether or not in conjunction with the death of any person whenever occurring) which increased or decreased the value of the estate of a Company; 1.10 a reference to income or profits or gains earned, accrued, received or arising shall include income or profits or gains deemed pursuant to any Taxation Legislation to have been or treated or regarded as earned, accrued, received or arising; 1.11 any reference to a transaction or Event occurring in the ordinary course of business of the Company shall specifically exclude any of the following Events: 1.11.1 any distribution within the meaning of Part VI ICTA (company distributions, tax credits) or within Section 418 ICTA (expenses treated as distributions); 1.11.2 any event in respect of which the consideration (if any) actually received is different from the consideration deemed to have been received for any Taxation purpose; 1.11.3 any Event which gives rise to a Taxation Liability in respect of deemed (as opposed to actual) income, profits or gains; 1.11.4 a disposal or deemed disposal of capital assets; 1.11.5 the Company ceasing, or being deemed to cease, to be a member of any group of companies or associated with any other company for any Taxation purpose; 1.11.6 any Event which gives rise to a Taxation Liability under Section 126 and Schedule 23 Finance Act 1995 (obligations imposed on UK representatives); 1.11.7 any Event which gives rise to a Taxation Liability under Part XVII ICTA (tax avoidance); 1.11.8 any Event which gives rise to a Taxation Liability primarily chargeable against or attributable wholly or partly to or recoverable wholly or partly from any other person; 1.11.9 an Event in respect of which a Taxation Liability arises as a result of a failure by the Company to deduct or account for Taxation; and 1.11.10 the release or waiver of all or part of a debt. 1.12 headings used in this Deed are for convenience only and shall not affect its construction; 1.13 references to clauses are (unless otherwise indicated to the contrary) references to clauses of this Deed; 1.14 any reference to a person shall be construed to include a reference to a body corporate, unincorporated association and a partnership; 1.15 references to any statute or statutory provisions shall, unless the context requires otherwise, be construed as including references to a corresponding earlier statute or the corresponding provisions of any earlier corresponding statute (whether repealed or not) which is directly or indirectly amended, consolidated, extended or which is replaced by such provisions, or re-enacted in such provisions; and 1.16 in construing this Deed the interpretation of general words shall not be restricted by being followed by words indicating a particular class of acts, matters or things or being followed by particular examples. 2 COVENANT TO PAY 2.1 Subject to clause 3 the Warrantors hereby jointly and severally covenant with the Purchaser that the Warrantors will pay to the Purchaser an amount equal to: 2.1.1 any Taxation Liability arising as a result of, or by reference to, any Event which occurred on or before, or was pursuant to any Taxation Legislation in force at Completion deemed to occur on or before, Completion or in respect of, or with reference to, any income profits or gains earned, accrued or received on or before, or in respect of a period ending on or before, Completion; 2.1.2 any Notional Tax Liability of the Company; 2.1.3 any Taxation Liability which arises under section 132 Finance Act 1988 (liability of other persons for unpaid tax) or sections 190 or 191 TCGA (tax on one group member recoverable from another) as a result of the combined effect of two or more Events the first of which occurred on or before Completion; 2.1.4 any Taxation Liability which arises with respect to the period prior to Completion by reference to any supplies made or deemed to be made for the purposes of value added tax by any member of a VAT group other than the Company or to the late payment of any value added tax by the representative member of the VAT group or to any return required to be submitted by the representative member of the VAT group; 2.1.5 any Taxation Liability arising from any such payment or deemed payment as constitutes a chargeable payment for the purposes of section 214 ICTA (chargeable payments connected with exempt distributions) which occurs or is deemed to occur after Completion; 2.1.6 any Taxation Liability which falls within clause 1.9.5; 2.1.7 all reasonable losses, payments, claims, demands, expenses, and other liabilities incurred by the Company or incurred by any member of the Purchaser's Group: 2.1.7.1 arising out of or in connection with any Claim; 2.1.7.2 in connection with any Taxation Liability referred to in clauses 2.1.1 to 2.1.6; or 2.1.7.3 in connection with any action reasonably taken to avoid resist or settle any Taxation Liability referred to in clauses 2.1.1 to 2.1.6 or otherwise taking or defending any action under this Deed and 2.1.8 any Taxation Liability which arises as a result of the declaration by the Company of a stock dividend on the 22{nd} May 1998; 2.2 The Purchaser shall be entitled to make a claim under this Deed in respect of a Taxation Liability notwithstanding that such Taxation Liability has been paid or discharged whether before or after Completion. 3 LIMITATIONS ON COVENANT Subject to 3.16 below the Covenant in clause 2 shall not apply to any Taxation Liability or other liability to the extent that such Taxation Liability or other liability: 3.1 is the subject of a specific reserve or specific provision in the Accounts or the Completion Accounts; 3.2 arises or is increased as a result of a change in legislation or Taxation Legislation (including but not limited to an increase in rates of Taxation) occurring after Completion; 3.3 was discharged on or before the Completion Accounts Date and the discharge of such Taxation Liability or other liability was taken account of in the balance sheet of the Accounts or the Completion Accounts; 3.4 is for an amount in respect of which payment has already been received by the Purchaser or the Company whether from the Warrantors or a third party (other than the Purchaser or any other member of the same group of companies as the Purchaser); 3.5 would not have arisen but for a change in the published practice of any authority or body first announced after Completion; 3.6 would not have arisen but for a voluntary act, transaction or omission of the Company after Completion: 3.6.1 otherwise than pursuant to a legally binding obligation entered into by the Company on or before Completion or imposed on the Company by any Taxation Legislation coming into force before Completion; 3.6.2 which the Purchaser was aware or ought reasonably to have been aware would give rise to the Taxation Liability or other Liability in question; 3.6.3 otherwise than in the ordinary course of business of the Company; and 3.6.4 other than with the clearly expressed consent or at the request of any of the Warrantors; 3.7 relates to any fine, penalty, surcharge or interest arising by reason of any failure or delay on the part of the Company in paying over to the relevant tax authority any payment made hereunder by the Warrantors or in keeping preserving, maintaining or submitting any account records form return or computation after Completion; 3.8 would not have arisen or would have been reduced but for a failure or omission on the part of the Purchaser or the Company to make any election or claim any Relief the making or claiming of which was taken into account in computing any provision or reserve for tax in the Accounts; and which was specifically disclosed against warranty 25.34 of Schedule 4 to the Agreement; 3.9 arises by reason of a voluntary disclaimer by the Company after Completion of the whole or any part of any allowance to which it is entitled under Part II of the Capital Allowances Act 1990 or by reason of the revocation by the Company after Completion of any claim for relief made (whether provisionally or otherwise) prior to Completion; and which was specifically disclosed against warranty 25.34 of Schedule 4 to the Agreement; 3.10 would not have arisen but for a cessation of or any change in the nature or conduct of any trade carried on by the Company being a cessation or change occurring on or after Completion; 3.11 arises or is increased (and in either case only to the extent if any that it so arises or as the case may be, is increased) as a direct result of any failure by the Purchaser or the Company to comply with any of their respective obligations under the terms of this Deed; 3.12 would not have been a liability borne by the Warrantors had paragraphs 1 and 2.1 to 2.4 inclusive of Schedule 11 of the Agreement been set out in full in this Deed and the words " the Tax Covenant" had been replaced by the words "this Deed" and the words "this Agreement" had been replaced by the words "the Agreement"; 3.13 arises or is increased as a result of any change in the accounting policy or practice or in the accounting reference date of the Company after Completion; 3.14 is a balancing charge arising pursuant to the Capital Allowances Act 1990 on any disposal by the Company after Completion other than a disposal of assets to which any of section 36,37 or 38A of the said Act apply; or 3.15 results from the provision or reserve for corporation tax in the accounts prepared pursuant to Schedule 9 being insufficient by reason of the effective tax rate being higher than 28%. For this purpose the effective tax rate is the corporation tax charge for the accounting period (relating to the profits of such period) during which 30{th} June 1998 falls, divided by the profit before tax in the audited accounts for the same accounting period, expressed as a percentage; 3.16 none of the limitations in this clause 3 other than clauses 3.1, 3.4 3.7 and the limitation created by reference in clause 3.12 to paragraphs 1 and 2.4 only of Schedule 11 to the Agreement shall apply to any Taxation Liability under clauses 2.1.8. 4 DEDUCTIONS AND WITHHOLDINGS 4.1 All sums payable by the Warrantors under this Deed will be paid free and clear of all deductions or withholdings whatsoever, whether or not arising from any set-off or counterclaim unless the deduction or withholding is required by law. If any such deduction or withholding is required by law, the Warrantors shall be obliged to pay such additional amount as shall be required to ensure that the net amount received hereunder by the Purchaser after such deduction or withholding has been made will equal the amount which would have been received by the recipient had no such deduction or withholding been required by law. 4.2 If any sum payable by the Warrantors under this Deed shall be subject to Taxation in the hands of the recipient, otherwise than by a withholding or a deduction referred to in clause 4.1 the Warrantors shall pay such an additional amount to ensure that the net receipt of the Purchaser is the same as if the amount of tax so payable were treated as a withholding or deduction under the terms of clause 4.1 5 DUE DATE FOR PAYMENT 5.1 The Warrantors shall make payment under clause 2 on the date following five Business Days after service of a notice containing a written demand in respect of a Claim for which the Warrantors are liable under this Deed, save that in any case involving the Company in making an actual payment of Taxation or an actual payment pursuant to a Surrender Agreement the Warrantors shall make payment on the later of: 5.1.1 the date previously referred to in clause 5.1; and 5.1.2 the date falling five clear Business Days before the Company is finally due to make such payment. 5.2 The Warrantors shall make payment in respect of any liability under clause 4.1 on the date on which the Warrantors are liable to make the deductions or withholdings and in respect of any liability under clause 4.2, on the date falling five Business Days after service of a notice containing a written demand for such payment. 5.3 Any sums not paid on a date established by reference to the preceding provisions of clause 5 ("the Due Date") shall bear interest at the annual rate of two per centum (2%) above the base lending rate from time to time of Barclays Bank Plc whether before or after judgment, accruing on a daily basis until payment is made and compounded at three monthly intervals. Such interest shall be paid within five clear Business Days of a demand for such by the Purchaser. 6 CONDUCT OF CLAIMS 6.1 Each of the following provisions of this clause 6 shall apply to regulate the conduct of claims under this Deed, provided that the provisions of this clause, other than clause 6.2, shall not take effect if in respect of any Claim which is notified to the Warrantors in accordance with clause 6.2 it reasonably appears to the Purchaser that the Vendors or the Company (in the case of the Company prior to Completion) has committed acts or omissions which may constitute fraud or wilful default; and further provided that the Warrantors shall not take any action in resisting a Claim which the Purchaser or the Company (after consultation with the Vendors) reasonably considers would prejudice any right or interest of any of them or of the Purchaser's Group. 6.2 The Purchaser shall give written notice to the Warrantors of any Claim in respect of a Taxation Liability for which the Warrantors could become liable under this Deed as soon as reasonably practicable provided that failure to give such notice shall not reduce, extinguish or otherwise affect the liability of the Warrantors to the Purchaser. 6.3 Subject to clause 6.4, on service of a written notice of their intention on the Purchaser by the Warrantors within the period of ten Business Days following service of a notice under clause 6.2 the Warrantors shall: 6.3.1 at their own expense and subject to the provisions of this Deed be entitled to resist any such Claim in the name of the Company or the Purchaser; and 6.3.2 as soon as reasonably practicable at their own expense be provided with or have made available to them by the Company all information and documents relating to the Company as are reasonably necessary for the purpose of such resistance and the Purchaser undertakes to procure such provision by the Company provided that, for the avoidance of doubt, this Purchaser's undertaking shall continue for the period during which the Warrantors are resisting the Claim. 6.4 The Warrantors shall not be entitled to resist or continue to resist a Claim under clause 6.3 beyond the giving of notice of intention to make an appeal against a Claim or, if necessary to avoid the expiration of any period described by clause 6.6.5 below, the making of an appeal unless: 6.4.1 the Company or the Purchaser (as the case may be) is first indemnified and secured to its reasonable satisfaction against all reasonable costs and expenses which may be properly incurred in relation to any such Claim; 6.4.2 the Company and the Purchaser are at all times kept fully informed of all matters relating thereto and are each supplied with a copy of all correspondence, advice and documents relating thereto; 6.4.3 the appointment of professional advisers in respect thereof is approved in advance by the Purchaser, such approval not to be unreasonably withheld or delayed; 6.4.4 all communication, written or otherwise, relating thereto intended to be sent to the Inland Revenue, H.M. Customs and Excise or other statutory or governmental authority or body is approved in advance by the Purchaser, such approval not to be reasonably withheld or delayed; and 6.4.5 any proposed settlement or compromise of such Claim or any step to be taken in the conduct of such dispute which might affect the amount thereof or the future Taxation Liability of the Company or the Purchaser or any member of the Purchaser's Group is approved by the Purchaser in advance such approval not to be reasonably withheld or delayed. 6.5 Notwithstanding the terms of clause 6.3 the Company shall not be obliged to appeal any decision beyond the first appellate body unless the Warrantors have produced to the Purchaser an opinion of a senior Counsel of not less than 10 years' standing, and practising in the relevant area of law that it would be reasonable to lodge such an appeal. 6.6 The Company or the Purchaser (as the case may be) shall be at liberty without reference to and to the exclusion of the Warrantors to admit, compromise, settle, discharge or otherwise deal with any Claim after whichever is the earliest of: 6.6.1 the expiry of a period of ten Business Days following the service of notice of that Claim on the Warrantors pursuant to clause 6.2 (whether or not such notice was given as soon as reasonably practical) if during that period the Warrantors have not notified the Purchaser (as the case may be) of their wish to resist the Claim; 6.6.2 the service of notice on the Purchaser by the Warrantors to the effect that they do not wish to resist the Claim; 6.6.3 the expiry of a period of ten Business Days following the service of notice by the Purchaser (stating such reasonable steps as the Purchaser wishes the Warrantors to take to properly and effectively resist the claim) on the Warrantors (they having taken over the conduct of a Claim) to the effect that the Warrantors are not properly and effectively conducting the resistance of that Claim if during that period the Warrantors do not take such steps as notified by the Purchaser as are reasonably practicable during that period; 6.6.4 the failure by the Warrantors to satisfy in any material respect any of the provisions of clause 6.4; and 6.6.5 if appropriate, the expiration of any period prescribed by the Taxation Legislation for the making of an appeal against the Claim and/or Taxation Liability in question provided that notice was given by the Purchaser pursuant to clause 6.2 (with respect to such Claim or Taxation Liability) not less than ten clear Business Days prior to such expiration but, for the avoidance of doubt, not otherwise. 6.7 The Warrantors shall be bound to accept for the purposes of this Deed any admission, compromise, settlement or discharge of any Taxation Liability and the outcome of any proceedings relating thereto, properly made or arrived at in accordance with the provisions of clause 6.6. 7 SAVINGS 7.1 If (at the Warrantors' request and expense) the Auditors determine that the Company has obtained a Saving, the Purchaser will as soon as reasonably practicable thereafter repay to the Warrantors the lesser of:- 7.1.1 the amount of the Saving (as determined by the Auditors); and 7.1.2 the amount paid by the Warrantors under clause 2 in respect of the Liability to Taxation or other liability which gave rise to the Saving less any part of that amount previously repaid to the Warrantors under any provision of this Deed or otherwise. 7.2 In determining whether the Company has obtained a Saving, the Auditors will act as experts and not as arbitrators and their determination will (in the absence of manifest error) be conclusive and binding on the parties 8 RECOVERY FROM OTHER PERSONS 8.1 If, in the event of any payment becoming due from the Warrantors pursuant to clause 2 the Company either is immediately entitled at the due date for the making of that payment to recover from any other person (including without limitation any taxation authority but excluding the Purchaser, and any other member of the same group of companies as the Purchaser) any amount in respect of Taxation Liability or other liability of the Company in respect of which the Warrantors have made or are liable to make a payment under clause 2, or at some subsequent date becomes entitled to make such recovery the Purchaser shall account to the Warrantors for, or in a case where payment has not been made under this deed any payment due from the Warrantors shall be reduced by the lesser of:- 8.1.1 the amount so recovered (less any losses, costs, damages and expenses reasonably incurred by the Company, the Purchaser or any other member of the same group of companies as the Purchaser as a result of the recover of that amount); and 8.1.2 the amount paid or payable by the Warrantors under clause 2 in respect of the Taxation Liability or other liability in question less any part of such amount previously repaid to the Warrantors under any provision of this Deed or otherwise. 8.2 If the Purchaser becomes aware that the Company is entitled to recover any amount mentioned in clause 8.1, the Purchaser will as soon as reasonably practicable give notice of that fact to the Warrantors and provided that the Warrantors indemnify and secure the Company, the Purchaser and all other members of the same group of companies as the Purchaser to the reasonable satisfaction of the Purchaser against all costs and expenses which may be incurred thereby, the Purchaser will procure that the Company, at the Warrantors' cost and expense, takes such action as the Warrantors may reasonably request to effect such recovery. 8.3 The action which the Warrantors may request the Company to take under clause does not include: 8.3.1 any action which the Purchaser after consulting with the Warrantors reasonably considers to be materially prejudicial to the business or Taxation affairs of the Company, the Purchaser or any other member of the same group of companies as the Purchaser or to which the Purchaser objects on any other reasonable ground; or 8.3.2 allowing the Warrantors to undertake the conduct of any action necessary to effect recovery of the amount in question. 8.3.3 If the amount mentioned in clause 8.1.1 exceeds the amount mentioned in clause 8.1.2, the amount of the excess shall be set against (and so shall reduce or eliminate) any liability of the Warrantors under clause 2 which arises after such recovery. 9 OVER PROVISIONS 9.1 If (at the request and expense of the Warrantors) the Auditors certify that any provision in the Accounts or the Completion Accounts for any Taxation has proved to be an over-provision the Purchaser shall as soon as reasonably practicable thereafter repay to the Warrantors the lesser of: 9.1.1 the amount over-provided (as certified by the Auditors); and 9.1.2 the aggregate amount (if any) paid by the Warrantors under clause 2 prior to the certification of the over- provision less any part of such amount previously repaid to the Warrantors under any provision of this Deed or otherwise. 9.2 If upon certification of an over-provision by the Auditors pursuant to clause 9.1, the amount mentioned in clause 9.1 .1 exceeds the amount mentioned in clause 9.1.2, the amount of the excess shall be set against (and so shall reduce or eliminate) any liability of the Warrantors under clause 2 which arises after such certification, as and when such liability arises. 9.3 Upon the Company or the Purchaser becoming aware that there has or probably has been an over-provision within the meaning of clause 9.1, the Purchaser shall as soon as reasonably practicable give notice of that fact to the Warrantors. 9.4 In certifying any over-provision pursuant to clause 9.1, the Auditors shall act as experts and not as arbitrators and their certificate shall (in the absence of manifest error) be conclusive and binding on all concerned. 10 SECTION 767A INDEMNITY 10.1 The Purchaser covenants with and undertakes to the Warrantors to pay to the relevant taxation authority on behalf of the Warrantors an amount equal to any Taxation which is assessed under section 767A ICTA on any of the Vendors by reason of Taxation assessed on the Company for an accounting period beginning before Completion being unpaid other than any Taxation the liability for which falls upon the Warrantors pursuant to clause 2 subject to Clause 3. 10.2 The covenant contained in clause 10.1 will apply to any reasonable costs and expenses incurred by the Warrantors in connection with any such Taxation such amount to be paid to the Warrantors. 10.3 The due date for payment of any amount payable pursuant to clause 10.1 will be the later of the date falling five Business Days before the party assessed under section 767A ICTA is obliged to pay the corporation tax in question and the date falling five Business Days after the Warrantors have served notice on the Purchaser demanding such payment. Any such payment not made on or before the due date for payment pursuant to this clause will carry interest at the rate of two per cent above the base lending rate of Barclays Bank plc from the due date to the date of payment. 11 REPAYMENTS OF TAXATION 11.1 If the Company or any member of the Purchaser's Group receives any repayment of Taxation which relates to a period prior to the Accounts Date and which has not been taken into account in the Accounts, and which does not arise as a result of the set- off or utilisation of a relief which arises principally as a result of an Event occurring after Completion including without limitation both an actual repayment and a credit to be offset against any other liability to Taxation, (other than a liability to Taxation for which the Warrantors would be liable under this Deed) the Purchaser will as soon as is reasonably practicable thereafter repay to the Warrantors the lesser of: 11.1.1 the amount of the repayment of Taxation; and 11.1.2 the aggregate amount (if any) paid by the Warrantors under Clause 2 less any part of that amount previously paid to the Warrantors under any provision of this Deed or otherwise. 11.2 If upon receipt of a repayment of Taxation pursuant to Clause 11.1 the amount mentioned in Clause 11.1.1exceeds the amount mentioned in 11.1.2 the excess will be set against (and so will reduce or eliminate) any liability of the Warrantors under Clause 2 then outstanding or which arises after such determination, in the latter case as and when such liability arises. 12 VENDOR PROTECTION 12.1 If any potential claim shall arise by reason of a liability of the Company which is contingent only, then the Warrantors shall not be under any obligation to make any payment in respect of such claim until such time as the contingent liability ceases to be contingent and becomes actual. 12.2 The Purchaser confirms to the Warrantors that it is not aware at the date of this Deed, after discussion with its accountants and solicitors, of any matter or thing which in its reasonable opinion will or may give rise to any claim under this Deed; provided for the avoidance of doubt that a matter shall not be deemed to be known to the Purchaser by reason of it being known to any of the Warrantors. 13 GENERAL All payments by the Warrantors under this Deed will be treated as repayments by the Warrantors of the consideration paid for the Shares pursuant to the Agreement, provided that this clause 13 will not operate in any way to limit the liability of the Warrantors under this Deed. 14 SEVERABILITY In the event that any liability of the Warrantors under this Deed shall be found to be void but would be valid if the application thereof to a particular Claim or Taxation Liability were limited or deleted or omitted, such liability shall apply with such modification as may be necessary to make it valid and effective. 15 NOTICES The provisions of clause 11 of the Agreement (Notices) shall apply to this Deed. 16 MISCELLANEOUS 16.1 All the rights and remedies expressly provided for by this Deed shall not exclude any rights or remedies provided by law. 16.2 None of the rights of the Purchaser arising out of this Deed shall be varied or restricted by the giving of any time or other indulgence to any person but shall only be affected by a specific waiver or release by the Purchaser and any such waiver or release shall be specific to the matters to which and the Vendor to whom it relates, shall not be deemed to be a waiver of any subsequent breach or default and shall in no way affect the other terms of this Deed. 17 GOVERNING LAW This Deed shall be governed by and construed in all respects in accordance with English law and the parties submit to the exclusive jurisdiction of the English Courts. IN WITNESS of these matters this document has been executed as a deed and delivered on the date set out at the beginning of this deed. SCHEDULE The Warrantors NAME AND ADDRESS James Edward BARLOW Coppertops Colby Road Banningham Norwich Norfolk NR11 7DY Trevor David JOHNSON Thorpe Row Farm House Herne Lane Thorpe Row Dereham Norfolk NR19 1QE Alan Robert SANDELL Scarrow Barn Thurgaton Norwich Norfolk NR11 7HR SIGNED AS A DEED by ) JAMES EDWARD BARLOW ) in the presence of: ) Witness's signature: Name: Address: SIGNED AS A DEED by ) TREVOR DAVID JOHNSON ) in the presence of: ) Witness's signature: Name: Address: SIGNED AS A DEED by ) ALAN ROBERT SANDELL ) in the presence of: ) Witness's signature: Name: Address: EXECUTED AS A DEED by ) NIM HOLDINGS LIMITED ) acting by: ) Director _______________________ Director ________________________ SCHEDULE 9 ADJUSTMENT OF CONSIDERATION 1. INTERPRETATION In this Schedule the following expressions have the following meanings:- EXPRESSION MEANING "the Completion Accounts" the accounts prepared in accordance with paragraph 2 "Net Assets" means (subject to the provisions of paragraph 2) the aggregate value of all fixed and current assets of the Company (excluding the cash in hand and at bank set out in the Indebtedness Statement) minus the aggregate value of all of the Company's liabilities and provisions (including provisions in accordance with SSAP 18 in respect of contingent liabilities) and excluding the Company's Borrowings set out in the Indebtedness Statement "the Provisional Consideration" the aggregate consideration for the Shares of 8,310,823.39 as stated in clause 3 "the Purchaser's Accountants" Ernst & Young "the Vendors' Accountants" KPMG 2. COMPLETION ACCOUNTS 2.1 The parties shall procure that forthwith after Completion (to the extent not already done), accounts for the Company shall be prepared and reported on in accordance with the provisions of this Schedule. 2.2 The Completion Accounts shall consist of a balance sheet of the Company as at the close of business on the day before the date of Completion. 2.3 The Completion Accounts shall (subject as hereinafter provided):- 2.3.1 be prepared as if the period from the Accounts Date to the date of Completion were a financial period of the Company; 2.3.2 be prepared in accordance with the historical cost convention, with generally accepted accounting principles in the United Kingdom and all applicable Accounting Standards; 2.3.3 show a true and fair view of the assets and liabilities of the Company as at the date of Completion and of the profits of the Company for the period ended on the date of Completion; and 2.3.4 adopt bases and policies of accounting applied for the purposes of the Accounts. 2.4 In preparing the Completion Accounts:- 2.4.1 a physical stock take shall be carried out on the date of Completion; 2.4.2 provision shall be made for corporation tax at the rate of 28% of the profit before tax of the Company for the period from the Accounts Date to 30{th} June 1998 and (subject to paragraph 2.4.3 below) no further provision for corporation tax shall be made; 2.4.3 to the extent that it is not capable of being set off against the liability of the Company for corporation tax for the current financial year or any previous financial year, full provision shall be made for the advance corporation tax payable on any distribution declared or paid before Completion; 2.4.4 provision shall only be made for the pension payable by the Company to Mr and Mrs Morrison to the extent that payment thereof is overdue at Completion; and 2.4.5 any fees of Ernst & Young in connection with any of the matters contemplated by this Agreement including compliance with chapter VI of the Companies Act shall be ignored. 3. PROCEDURE 3.1 The Purchaser shall procure that within 60 days after the date of Completion the Purchaser's Accountants shall deliver a final draft of the Completion Accounts to the Vendors' Accountants for consideration on behalf of the Vendors. Unless the Vendors' Accountants shall notify the Purchaser's Accountants in writing within 21 days after receipt of such draft that they do not accept that such draft complies with paragraph 2 the Vendors shall be deemed to have accepted such draft as complying with paragraph 2. 3.2 If within the period of 21 days referred to in paragraph 3.1 the Vendors' Accountants shall notify the Purchaser's Accountants in writing that they do not accept that the said draft complies with paragraph 2 then the Purchaser's Accountants and the Vendors' Accountants shall use their best endeavours to reach agreement upon the adjustments required to the said draft to meet the objections of the Vendors' Accountants. 3.3 When the Vendors' Accountants accept or are deemed to accept that the said draft complies with paragraph 2 and certifying the Purchaser's Accountants shall sign a report to the effect that the Completion Accounts comply with paragraph 2 and certifying Net Assets and any Completion Accounts /Net Assets so reported on /certified shall be the Completion Accounts /Net Assets for the purposes of this Agreement and shall be final and binding on the parties. 3.4 In the event that the Vendors' Accountants and the Purchaser's Accountants are unable to reach agreement as aforesaid any matter in dispute shall be referred to the decision of a single independent chartered accountant or an independent firm of chartered accountants (in either case, "the Independent Accountant") to be agreed upon between the Vendors and the Purchaser within a period of 30 days after expiry of the 21 day period referred to in paragraph 3.2 or (in default of such agreement) to be selected (at the instance of either of them) by the President for the time being of the Institute of Chartered Accountants in England and Wales. The Independent Accountant (whose costs shall be paid as the Independent Accountant shall direct) shall act as expert (and not as arbitrator) and the decision of the Independent Accountant in respect of such disputed matters shall(in the absence of manifest error) be final and binding on the parties. In giving such decision the Independent Accountant shall state what adjustments (if any) are to be made to the said draft in order that it shall comply with paragraph 2. 4. ADJUSTMENT OF CONSIDERATION 4.1 When the Completion Accounts have become final and binding (whether under paragraph 3.3 or by virtue of a decision of the Independent Accountant) the Provisional Consideration shall forthwith:- 4.1.1 be increased by the amount (if any) by which the Net Assets are greater than 3,623,457; or (as the case may be); or 4.1.2 be reduced by the amount (if any) by which the Net Assets are less than 3,623,457. 4.2 The amount of any increase or reduction in the Provisional Consideration shall be paid by the Purchaser or the Vendors (as the case may be) within 14 days after the Completion Accounts have become final and binding as aforesaid and any amount not paid when due shall carry interest on the amount to be paid at the annual rate of two per cent above the base lending rate from time to time of Barclays Bank Plc from the date of Completion until the date of actual payment (as well after judgment as before). 5. Subject to the due performance of paragraph 4 the Purchaser shall have no claim against the Vendors under the Agreement in respect of any liability or deficiency to the extent that the same is taken into account in the Completion Accounts but (save as aforesaid) preparation and acceptance of the Completion Accounts by the Purchaser shall be without prejudice to any claim which the Purchaser may have against the Vendors in respect of any breach of the Warranties. 6. All sums payable under this Schedule shall be paid in cash by way of a banker's draft drawn on a Clearing Bank (and in case of sums payable to the Vendors shall be paid to the Vendors' Solicitors and payment to them will be a good and sufficient discharge to the Purchaser and the Purchaser will not be concerned as to the application of moneys so paid). SCHEDULE 10 PROVISIONS REGARDING RETENTION FUND 1. The Retention Fund shall be paid on Completion by the Purchaser to the Vendors' solicitors and Purchaser's solicitors jointly ("the Retention Fund Holder") who shall hold the Retention Fund on trust for the Vendors and Purchaser on the following terms and be irrevocably instructed by the Vendors and the Purchaser:- 1.1 to place the Retention Fund in a deposit account in the name of the Retention Fund Holder with Cheltenham & Gloucester and, subject to paragraphs 1.3 and 1.4, to retain the same in such account; 1.2 subject as provided in paragraph 1.3 and 1.4, to pay the Retention Fund to the Vendors' Solicitors in accordance with clause 1.4 at the expiration of 18 months from the date of Completion; 1.3 to pay one half of the amount originally paid into the Retention Fund to the Vendors' Solicitors on the first anniversary of Completion (or if that is not a Business Day on the first Business Day thereafter) provided that no payment shall be made out of the Retention Fund pursuant to this paragraph 1.3 if, prior to the first anniversary of the date of Completion, the Retention Fund Holder shall have received written notice from the Purchaser certifying that it has made a claim for compensation or indemnity under the Warranties or Tax Covenant from the Vendors which it is entitled to bring in accordance with the provisions of the Agreement, containing details of the subject matter and amount of such claim and a summary of the breach alleged to give rise to such claim, if as a result of the payment to the Vendors' Solicitors, the balance of the Retention Fund after such payment would not exceed the amount claimed by the Purchaser. In such case, the amount to be paid to the Vendors' Solicitors on the first anniversary of Completion (or if that is not a Business Day on the first Business Day thereafter) shall be such amount, (if any) as results in the balance remaining in the Retention Fund being equal to the amount of the Purchaser's claim or claims for compensation or indemnity; 1.4 if at any time or from time to time prior to the expiration of the said period of 18 months the Retention Fund Holder shall receive written notice from the Purchaser certifying that any claim for compensation or indemnity under the Warranties or Tax Covenant has been admitted by the Vendors including any payment to the Purchaser pursuant to paragraph 4 of Schedule 9 (Adjustment of Consideration), or awarded by any Court of competent jurisdiction from which there is no appeal or from which no appeal is made within applicable time limits to pay to the Purchaser the amount so admitted or awarded (including any costs which may be admitted or awarded in favour of the Purchaser) and/or (as the case may be) retain the amount in dispute pending the determination or award in respect of the claim, and, subject thereto, to pay the balance, if any, of the Retention Fund to the Vendors' Solicitors as aforesaid; 1.5 where (i) a claim has been notified pursuant to paragraph 1.3 resulting in more than half of the Retention Fund being retained beyond the first anniversary of Completion and (ii) the amount of the Purchaser's claim is awarded, determined or agreed at less than the amount originally notified, to pay (forthwith upon such award, determination or agreement being communicated to them in writing by the Vendors and Purchaser jointly, the giving of such communication not to be unreasonably withheld or delayed following any such award, determination or agreement) to the Vendors Solicitors the difference between the sum released to the Vendors' Solicitors on the first anniversary of Completion and the sum which would then have been released had the Purchaser's original claim been for the lesser amount awarded determined or agreed; 1.6 to pay any interest received by the Retention Fund Holder on the Retention Fund (less any tax thereon for which the Retention Fund Holder may be accountable and any charges and expenses incurred by the Retention Fund Holder) to the Vendors and/or to the Purchaser in accordance with paragraph 1.4 at the expiration of the period referred to in paragraph 1.2 in proportion to the amounts (other than in respect of costs) paid to them under this Schedule provided that to the extent that any amount payable to the Purchaser by the Retention Fund Holder incorporates interest on the amount of compensation or indemnity claimed such claim for compensation or indemnity shall be disregarded in calculating the proportion of interest earned on the Retention Fund that is payable to the Vendors and/or to the Purchaser. SCHEDULE 11 LIMITATION OF LIABILITY 1. In this Schedule "the Vendors" means the Vendors in their capacities as such and also as Warrantors and under the Tax Covenant as covenantors and "claim" means any claim which would (but for the provisions of this Schedule) be capable of being made against the Vendors (or any of them) in respect of any liability for breach of the Warranties and/or under the Tax Covenant. 2. Notwithstanding the provisions of this Agreement and of the Tax Covenant: 2.1 the aggregate liability of the Vendors in respect of all claims shall be limited to the aggregate consideration paid by the Purchaser for the the Shares pursuant to this Agreement; 2.2 the Vendors will be under no liability in respect of any claim where the amount for which the Vendors would be liable under such claim is less than 1,000; 2.3 the Vendors will be under no liability in respect of any claim (of or greater than the amount specified in paragraph 2.2) unless the amount of their liability in respect of such claim is (when aggregated with their liability in respect of any other such claim or claims made by the Purchaser) in excess of 62,500 in which event the Vendors will (subject to the other provisions of this Agreement) be liable for the whole amount of such liability and not merely for the excess; 2.4 the Vendors will be under no liability in respect of any claim unless written particulars of the claim (giving full details of the specific matter in respect of which such claim is made) shall have been given to the Vendors within a period of 18 months from the date of this Agreement or (in the case only of any claim relating to Taxation) on or before 31 December 2004; 2.5 the Vendors will have no liability in respect of any claim: 2.5.1 to the extent that it arises or is increased as a result of an increase in rates of taxation after the Accounts Date, or the passing of any legislation (or making of any subordinate legislation) with retrospective effect or any provision or reserve in the Accounts being insufficient by reason of any increase in rates of taxation after the Accounts Date; 2.5.2 if it would not have arisen but for anything voluntarily done or (where the omission could reasonably have been avoided) omitted to be done after Completion by the Purchaser or the Company or any of their respective agents or successors in title which the Purchaser or the Company, as the case may be, would not have done or omitted to do if it did not have the benefit of the Warranties or the Tax Covenant; 2.5.3 to the extent that it relates to any loss for which the Purchaser or the Company is indemnified by insurance, or for which it would have been so indemnified if at the relevant time there had been maintained valid and adequate insurance cover of a type in force in relation to the Company at the date of this Agreement; 2.5.4 to the extent that it relates to: 2.5.4.1 any matter specifically provided for, or specifically disclosed, in the Accounts and in such case only to the extent of such provision or disclosure; or 2.5.4.2 any liability for Taxation arising out of the ordinary course of business of the Company after the Accounts Date; 2.5.5 to the extent that it arises as a result of any change in the accounting policy or practice or in the accounting reference date of the Company after Completion; 2.5.6 to the extent that the amount of the claim corresponds to an increase in the value of the assets of the Purchaser or the Company resulting from the reduction in its liability to Taxation. 2.6 payment of any claim shall to the extent of such payment satisfy and preclude any other claim which is capable of being made in respect of the same subject matter; Provided always that sub-paragraphs 2.1, 2.2, and 2.3 above shall be of no effect with regard to paragraph 1, 3, 4 and 7.1 of Schedule 4. 3. Upon the Purchaser becoming aware that matters have arisen which will or are likely to give rise to a claim, the Purchaser will: 3.1 as soon as reasonably practicable notify the Vendors in writing of the potential claim and of the matters which will or are likely to give rise to such claim; 3.2 not make any admission of liability, agreement or compromise with any person, body or authority in relation to the potential claim without prior consultation with the Vendors; 3.3 at all times disclose in writing to the Vendors all information and documents relating to the potential claim or the matters which will or are likely to give rise to such claim and, if requested by the Vendors, give the Vendors and their professional advisers reasonable access to the personnel of the Purchaser and/or the Company as the case may be and to any relevant premises, chattels, accounts, documents and records within the power, possession or control of the Purchaser and/or the Company to enable the Vendors and their professional advisers to interview such personnel, and to examine such claim, premises, chattels, accounts, documents and records and to take copies or photographs thereof at their own expense; and 3.4 where the claim relates to breach of the Warranties take such action as the Vendors may reasonably require (including the appointment of solicitors nominated by the Vendors) to avoid, resist, contest or compromise the potential claim or the matters which will or are likely to give rise to such claim, subject to the Purchaser being indemnified to its reasonable satisfaction against costs and expenses incurred in taking such action. 4. Nothing herein shall in any way diminish the Purchaser's or the Company's common law duty to mitigate its loss. 5. If any potential claim shall arise by reason of a liability of the Company which is contingent only, then the Vendors shall not be under any obligation to make any payment in respect of such claim until such time as the contingent liability ceases to be contingent and becomes actual provided that this paragraph shall not operate to limit the Vendors' liability in respect of any contingent claim notified within the time limits specified in paragraph 2.4 above. 6. The provisions of this Schedule apply notwithstanding any other provision of this Agreement or its Schedules to the contrary and will not cease to have effect in consequence of any rescission or termination by the Purchaser of any other provisions of this Agreement but shall not apply in respect of any claim based on the fraud, dishonesty or wilful misstatement or wilful omission by or on behalf of any of the Vendors. SCHEDULE 12 PROVISION RELATING TO NAV ESCROW 1. The amount payable pursuant to clause 3.4 into the NAV Escrow shall be paid on Completion to the Vendors' Solicitors and Purchaser's Solicitors jointly (the `Escrow Agent') who shall hold the NAV Escrow on trust for the Vendors and the Purchaser and shall be irrevocably instructed by the Vendors and the Purchaser: 1.1 to place the NAV Escrow in a deposit account in the name of the Escrow Agent with Cheltenham & Gloucester and deal with it as follows: 1.1.2 if the NAV Estimate is greater than 3,623,457 the NAV Escrow shall be dealt with as follows: a) if the Net Assets are equal to or exceed the NAV Estimate, the NAV Escrow shall be paid to the Vendors; b) if the Net Assets exceed 3,623,457 but are less than the NAV Estimate, the amount of such excess shall be paid to the Vendors and the balance shall be paid to the Purchaser; c) if the Net Assets are less than 3,623,457, the NAV Escrow shall be paid to the Purchaser; 1.1.3 If the NAV Estimate is less than 3,623,457 the NAV Escrow shall be dealt with as follows: a) if the Net Assets are less than or equal to the NAV Estimate, the NAV Escrow shall be paid to the Purchaser; b) if the Net Assets exceed the NAV Estimate but are less than 3,623,457, the amount of such excess shall be paid to the Vendors and the balance shall be paid to the Purchaser; c) if the Net Assets are more than 3,623,457 the NAV Escrow shall be paid to the Vendors. 1.2 to make payments out of the NAV Escrow on the date on which payment of any increase or reduction in the Provisional Consideration (as defined in Schedule 9) is due to be made under paragraph 4.2 of Schedule 9. 1.3 to pay any interest received by the Escrow Agent on the NAV Escrow (less any tax thereon for which the Escrow Agent may be accountable and any charges and expenses incurred by the Escrow Agent) to the Vendors and/or the Purchaser in accordance with paragraph 1.1 on the date it makes payment under paragraph 1.2 in proportion to the amounts paid to them under this Schedule. 2. The provisions of this Schedule and of clause 3.4 shall operate without prejudice to the provisions of Schedule 9 and clause 3.1. SCHEDULE 13 COVENANT RELATING TO ASBESTOS RELATED CLAIMS 1. INTERPRETATION In this Schedule the following expressions have the following meanings: Expression Meaning
"Asbestos Liability" Any liability incurred by the Company in consequence of: i) Any claim by any individual that he has suffered damage to his health by reason of exposure to asbestos incorporated in the Concorde Road Property or ii) Any legal requirement arising after the date hereof that the Company remove and dispose of any such asbestos incorporated in the Concorde Road Property to the extent that the Company is unable to require Norwich City Council or any other tenant of the Concorde Road Property to effect and or pay for such removal and disposal. "Concorde Road The Company's leasehold property at 25 Concorde Road, Property" Norwich as more particularly referred to in Schedule 3. 2. COVENANT 2.1 The Warrantors warrant and represent to the Purchaser that: 2.1.1 the Company has not itself and to the best of the Warrantors' information or belief, no other party has done any act likely to disrupt any asbestos incorporated in the Company's leasehold property at 25 Concorde Road, Norwich; and 2.1.2 the Company has not received notice of any claim from any person alleging injury, loss or damage suffered as a result of exposure to asbestos. 2.2 The Warrantors joint and severally covenant to pay to the Purchaser an amount equal to any Asbestos Liability. 2.3 The provisions of paragraphs 2.1, 2.2, 2.3, 2.5.2, 2.5.3, 2.6, 3, 5 and 6 of Schedule 11 shall apply to the Warrantors' obligations under paragraphs 2.1 and 2.2 of this Schedule as if set out in this Schedule in full and subject also to the proviso that the Warrantors shall be under no liability in respect of any claim under the above covenant and representation unless written particulars of the claim and giving full details of the Asbestos Liability shall have been given to the Warrantors on or before 31{st} December 2004. 2.4 The said provisions of Schedule 11 shall apply as though: 2.4.1 the reference therein to "the Vendors" were to "the Warrantors"; 2.4.2 "claim" meant any claim which but for the provisions of that Schedule would be capable of being made under this para. 2; and 2.4.3 the words "or the representation and covenant set out in paras. 2.1 and 2.2 of Schedule 13" were added at the end of para. 2.5.2 of Schedule 11.
3. UNDERTAKING BY PURCHASER The Purchaser undertakes to procure that the Company uses reasonable endeavours to require Norwich City Council or any other tenant for the time being of the Concorde Road Property to effect and or pay for any such removal and disposal as is referred to in the definition of Asbestos Liability above. ATTESTATIONS SIGNED AS A DEED by ) JAMES EDWARD BARLOW ) in the presence of: ) SGD. J.E BARLOW Witness's signature: sgd. A.G Evans Name: AG Evans Address: Eversheds, Norwich SIGNED AS A DEED by ) ALAN ROBERT SANDELL ) in the presence of: ) SGD. A. R. SANDELl Witness's signature: sgd. AG Evans Name: AG Evans Address: Eversheds, Norwich SIGNED AS A DEED by ) TREVOR DAVID JOHNSON ) in the presence of: ) SGD. T.D. JOHNSON Witness's signature: sgd. AG Evans Name: AG Evans Address: Eversheds, Norwich SIGNED AS A DEED by ) JAN BARLOW BY HER ATTORNEY) in the presence of ) SGD. J. E. BARLOW Witness's signature: sgd. AG Evans Name: AG Evans Address: Eversheds, Norwich SIGNED AS A DEED by ) PAULINE SANDELL BY HER ATTORNEY) in the presence of ) SGD J. E. BARLOW Witness's signature: sgd. AG Evans Name: AG Evans Address: Eversheds, Norwich EXECUTED AS A DEED by ) NIM HOLDINGS LIMITED ) acting by: ) Director SGD. J KRATOCHVIl Director SGD. M IMBLEr EXECUTED AS A DEED by ) SGD. J KRATOCHVIL BERRY PLASTICS CORPORATION ) acting by: ) SGD. M IMBLER DATED 2{ND} JULY 1998 JE BARLOW AND OTHERS (1) NIM HOLDINGS LIMITED (2) BERRY PLASTICS CORPORATION (3) ___________________________________________ AGREEMENT FOR THE SALE AND PURCHASE OF THE ENTIRE ISSUED SHARE CAPITAL OF NORWICH INJECTION MOULDERS LIMITED ______________________________________________ CONFORMED COPY Ref: MO2/18485.2.1 Browne Jacobson Aldwych House 81 Aldwych London WC2B 4HN Telephone: (0171) 404 1546 Fax: (0171) 836 3882 DX: 37960 Kingsway Email : info@brownej.co.uk INDEX
CLAUSES PAGE NO. 21. Interpretation 1 Sale and Purchase 7 Consideration 8 Completion 9 Warranties 11 Restrictive Covenants 13 Guarantee 15 Costs 16 Announcements 16 Interest 16 Notices 16 General 18 Governing Law 19 SCHEDULES The Vendors 20 Details of the Company 22 Particulars of the Property 24 Warranties: 22. Schedules 1 & 2; Capital 26 23. Accounts 26 24. Vendors' Capacity 27 25. Insiders' Interests 27 26. Information Supplied 28 27. Records 28 28. Debtors 28 29. Stocks 28 30. Plant and the Computer System 29 31. Intellectual Property 31 32. Property 32 33. Employees 37 34. Pensions 39 35. Contracts and Customers 41 36. Insurance 44 37. Finance and Working Capital 44 38. Company Law and Authorities 45 39. Insolvency, etc. 45 40. Legal Compliance 46 41. Licences 47 42. Default 47 43. Litigation 47 44. Events since the Accounts Date 47 45. Effects of this Agreement 49 46. Taxation 49 47. Environment 55 Form of Resignations 58 Form of Acknowledgement 59 Form of Power of Attorney 60 Tax Covenant 62 9 Adjustment of Consideration 80 10 Provision Regarding Retention Fund 84 11 Limitation of Liability 86 12 Provisions regarding NAV Escrow 89 13 Covenant relating to Asbestos related 91 claims
EX-3.11 3 CERTIFICATE OF INCORPORATION OF BERRY STERLING CERTIFICATE OF INCORPORATION OF BERRY STERLING CORPORATION _________________________________ ARTICLE I --------- NAME ---- The name of the corporation (herein called the "Corporation") is BERRY STERLING CORPORATION. ARTICLE II ---------- REGISTERED OFFICE AND AGENT --------------------------- The address of the registered office of the Corporation in the State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover, County of Kent, Delaware. The name of the registered agent of the Corporation at such address is The Prentice-Hall Corporation System, Inc. ARTICLE III ----------- PURPOSE ------- The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "Delaware Statute"). ARTICLE IV ---------- CAPITAL STOCK ------------- The total number of shares of all classes of stock which the Corporation has authority to issue is 10,000 shares, all of which are shares of Common Stock, par value $.01 per share. ARTICLE V --------- INCORPORATOR ------------ The name and mailing address of the incorporator is as follows:
NAME MAILING ADDRESS ---- --------------- Reinena L. Davis c/o O'Sullivan Graev & Karabell, LLP30 Rockefeller Plaza 41st FloorNew York, New York 10112
ARTICLE VI ---------- DIRECTORS --------- 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 VII ----------- MANAGEMENT OF THE CORPORATION ----------------------------- 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 for liability (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 Statute, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware Statute 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 Statute, as so amended. 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 VIII ------------ CREDITORS MEETINGS ------------------ Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/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, and/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, and/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, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. IN WITNESS WHEREOF, I, the undersigned, being the sole incorporator hereinabove named, for the purpose of forming a corporation pursuant to the Delaware Statute, DO HEREBY CERTIFY, under penalties of perjury, that this is my act and deed and that the facts hereinabove stated are truly set forth and, accordingly, I have hereunto set my hand as of the ____ day of February, 1995. __________________________________ REINENA L. DAVIS EX-3.12 4 BY-LAWS OF BERRY STERLING BY-LAWS OF BERRY STERLING CORPORATION ARTICLE I OFFICES 1.1 REGISTERED OFFICE. - ----------------------- The registered office of Berry Sterling Corporation (the "Corporation"), in the State of Delaware shall be at 32 Loockerman Square, Suite L-100, City of Dover, County of Kent, Delaware 19904, and the registered agent in charge thereof shall be The Prentice-Hall Corporation System. 1.2 OTHER OFFICES. - ------------------- The Corporation may also have an office or offices at any other place or places within or outside the State of Delaware. ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING 2.1 ANNUAL MEETINGS. - --------------------- The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (the "Board") and designated in the notice or waiver of notice thereof, except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware (the "Delaware Statute") to be taken at a stockholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 10 of this Article II. 2.2 SPECIAL MEETINGS. - ---------------------- A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman, the President or the record holders of at least a majority of the issued and outstanding shares of Common Stock of the Corporation, to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof. 2.3 NOTICE OF MEETINGS. - ------------------------ Except as otherwise required by statute, the Certificate of Incorporation of the Corporation (the "Certificate") or these By-laws, notice of each annual or special meeting of the stockholders shall be given to each stockholder of record entitled to vote at such meeting not less than 10 nor more than 60 days before the day on which the meeting is to be held, by delivering written notice thereof to him personally, or by mailing a copy of such notice, postage prepaid, directly to him at his address as it appears in the records of the Corporation, or by transmitting such notice thereof to him at such address by telegraph, cable or other telephonic transmission. Every such notice shall state the place, the date and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy, or who shall, in person or by attorney thereunto authorized, waive such notice in writing, either before or after such meeting. Except as otherwise provided in these By-laws, neither the business to be transacted at, nor the purpose of, any meeting of the stockholders need be specified in any such notice or waiver of notice. Notice of any adjourned meeting of stockholders shall not be required to be given, except when expressly required by law. 2.4 QUORUM. - ------------ At each meeting of the stockholders, except where otherwise provided by the Certificate or these By-laws, the holders of a majority of the issued and outstanding shares of Common Stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. In the absence of a quorum, a majority in interest of the stockholders present in person or represented by proxy and entitled to vote, or, in the absence of all the stockholders entitled to vote, any officer entitled to preside at, or act as secretary of, such meeting, shall have the power to adjourn the meeting from time to time, until stockholders holding the requisite amount of stock to constitute a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called. 2.5 ORGANIZATION. - ------------------ (a) Unless otherwise determined by the Board, at each meeting of the stockholders, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President; (iii) any director, officer or stockholder of the Corporation designated by the Board to act as chairman of such meeting and to preside thereat if the Chairman or the President shall be absent from such meeting; or (iv) a stockholder of record who shall be chosen chairman of such meeting by a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat. (b) The Secretary or, if he shall be presiding over such meeting in accordance with the provisions of this Section 5 or if he shall be absent from such meeting, the person (who shall be an Assistant Secretary, if an Assistant Secretary has been appointed and is present) whom the chairman of such meeting shall appoint, shall act as secretary of such meeting and keep the minutes thereof. 2.6 ORDER OF BUSINESS. - ----------------------- The order of business at each meeting of the stockholders shall be determined by the chairman of such meeting, but such order of business may be changed by a majority in voting interest of those present in person or by proxy at such meeting and entitled to vote thereat. 2.7 VOTING. - ------------ Except as otherwise provided by law, the Certificate or these By- laws, at each meeting of the stockholders, every stockholder of the Corporation shall be entitled to one vote in person or by proxy for each share of Common Stock of the Corporation held by him and registered in his name on the books of the Corporation on the date fixed pursuant to Section 7 of Article VI as the record date for the determination of stockholders entitled to vote at such meeting. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. A person whose stock is pledged shall be entitled to vote, unless, in the transfer by the pledgor on the books of the Corporation, he has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his proxy may represent such stock and vote thereon. If shares or other securities having voting power stand in the record of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary shall be given written notice to the contrary and furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one votes, his act binds all; (b) if more than one votes, the act of the majority so voting binds all; and (c) if more than one votes, but the vote is evenly split on any particular matter, such shares shall be voted in the manner provided by law. If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or even-split for the purposes of this Section 7 shall be a majority or even-split in interest. The Corporation shall not vote directly or indirectly any share of its own capital stock. Any vote of stock may be given by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, delivered to the secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted after three years from its date, unless said proxy provides for a longer period. At all meetings of the stockholders, all matters (except where other provision is made by law, the Certificate or these By-laws) shall be decided by the vote of a majority in interest of the stockholders present in person or by proxy at such meeting and entitled to vote thereon, a quorum being present. Unless demanded by a stockholder present in person or by proxy at any meeting and entitled to vote thereon, the vote on any question need not be by ballot. Upon a demand by any such stockholder for a vote by ballot upon any question, such vote by ballot shall be taken. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted. 2.8 INSPECTION. - ---------------- The chairman of the meeting may at any time appoint one or more inspectors to serve at any meeting of the stockholders. Any inspector may be removed, and a new inspector or inspectors appointed, by the Board at any time. Such inspectors shall decide upon the qualifications of voters, accept and count votes, declare the results of such vote, and subscribe and deliver to the secretary of the meeting a certificate stating the number of shares of stock issued and outstanding and entitled to vote thereon and the number of shares voted for and against the question, respectively. The inspectors need not be stockholders of the Corporation, and any director or officer of the Corporation may be an inspector on any question other than a vote for or against his election to any position with the Corporation or on any other matter in which he may be directly interested. Before acting as herein provided, each inspector shall subscribe an oath faithfully to execute the duties of an inspector with strict impartiality and according to the best of his ability. 2.9 LIST OF STOCKHOLDERS. - -------------------------- It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of its stock ledger to prepare and make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to any such meeting, during ordinary business hours, for a period of at least 10 days prior to such meeting, either at a place within the city where such meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING. - ---------------------------------------------- Any action required by the Delaware Statute to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, by a consent in writing, as permitted by the Delaware Statute. ARTICLE III BOARD OF DIRECTORS 3.1 GENERAL POWERS. - -------------------- The business, property and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate directed or required to be exercised or done by the stockholders. 3.2 NUMBER AND TERM OF OFFICE. - ------------------------------- The number of directors shall be fixed from time to time by the Board. Directors need not be stockholders. Each director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided. 3.3 ELECTION OF DIRECTORS. - --------------------------- At each meeting of the stockholders for the election of directors at which a quorum is present, the persons receiving the greatest number of votes, up to the number of directors to be elected, of the stockholders present in person or by proxy and entitled to vote thereon shall be the directors; PROVIDED, HOWEVER, that for purposes of such vote no stockholder shall be allowed to cumulate his votes. Unless an election by ballot shall be demanded as provided in Section 7 of Article II, election of directors may be conducted in any manner approved at such meeting. 3.4 RESIGNATION, REMOVAL AND VACANCIES. - ---------------------------------------- (a) Any director may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. (b) Any director or the entire Board may be removed, with or without cause, at any time by vote of the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the stockholders pursuant to Section 10 of Article II. (c) Vacancies occurring on the Board for any reason may be filled by vote of the stockholders or by the stockholders' written consent pursuant to Section 10 of Article II, or by vote of the Board or by the directors' written consent pursuant to Section 6 of this Article III. If the number of directors then in office is less than a quorum, such vacancies may be filled by a vote of a majority of the directors then in office. 3.5 MEETINGS. - -------------- (A) ANNUAL MEETINGS. As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article III. (B) OTHER MEETINGS. Other meetings of the Board shall be held at such times and places as the Board, the Chairman, the President or any director shall from time to time determine. (C) NOTICE OF MEETINGS. Notice shall be given to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the date on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held, but notice need not be given to any director who shall attend such meeting. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. (D) PLACE OF MEETINGS. The Board may hold its meetings at such place or places within or outside the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. (E) QUORUM AND MANNER OF ACTING. A majority of the total number of directors then in office shall be present in person at any meeting of the Board in order to constitute a quorum for the transaction of business at such meeting, and the vote of a majority of those directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or act of the Board, except as otherwise expressly required by law or these By-laws. In the absence of a quorum for any such meeting, a majority of the directors present thereat may adjourn such meeting from time to time until a quorum shall be present. (F) ORGANIZATION. At each meeting of the Board, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President (if a director); or (iii) any director designated by a majority of the directors present. The Secretary or, in the case of his absence, an Assistant Secretary, if an Assistant Secretary has been appointed and is present, or any person whom the chairman of the meeting shall appoint shall act as secretary of such meeting and keep the minutes thereof. 3.6 DIRECTORS' CONSENT IN LIEU OF MEETING. - ------------------------------------------- Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the directors then in office and such consent is filed with the minutes of the proceedings of the Board. 3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. - ---------------------------------------------------------------------- Any one or more members of the Board may participate in a meeting of the Board by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. 3.8 COMMITTEES. - ---------------- The Board may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more directors of the Corporation, which to the extent provided in said resolution or resolutions shall have and may exercise the powers of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it, such committee or committees to have such name or names as may be determined from time to time by resolution adopted by the Board. A majority of all the members of any such committee may determine its action and fix the time and place of its meetings, unless the Board shall otherwise provide. The Board shall have power to change the members of any such committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time. ARTICLE IV OFFICERS 4.1 EXECUTIVE OFFICERS. - ------------------------ The principal officers of the Corporation shall be a Chairman, if one is appointed (and any references to the Chairman shall not apply if a Chairman has not been appointed), a President, a Secretary, and a Treasurer, and may include such other officers as the Board may appoint pursuant to Section 3 of this Article IV. Any two or more offices may be held by the same person. 4.2 AUTHORITY AND DUTIES. - -------------------------- All officers, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-laws or, to the extent so provided, by the Board. 4.3 OTHER OFFICERS. - -------------------- The Corporation may have such other officers, agents and employees as the Board may deem necessary, including one or more Assistant Secretaries, one or more Assistant Treasurers and one or more Vice Presidents, each of whom shall hold office for such period, have such authority, and perform such duties as the Board, the Chairman, or the President may from time to time determine. The Board may delegate to any principal officer the power to appoint and define the authority and duties of, or remove, any such officers, agents, or employees. 4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL. - --------------------------------------------- (a) All officers shall be elected or appointed by the Board and shall hold office for such term as may be prescribed by the Board. Each officer shall hold office until his successor has been elected or appointed and qualified or until his earlier death or resignation or removal in the manner hereinafter provided. The Board may require any officer to give security for the faithful performance of his duties. (b) Any officer may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, at the time it is accepted by action of the Board. Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective. (c) All officers and agents elected or appointed by the Board shall be subject to removal at any time by the Board or by the stockholders of the Corporation with or without cause. 4.5 VACANCIES. - --------------- If the office of Chairman, President, Secretary or Treasurer becomes vacant for any reason, the Board shall fill such vacancy, and if any other office becomes vacant, the Board may fill such vacancy. Any officer so appointed or elected by the Board shall serve only until such time as the unexpired term of his predecessor shall have expired, unless reelected or reappointed by the Board. 4.6 THE CHAIRMAN. - ------------------ The Chairman shall give counsel and advice to the Board and the officers of the Corporation on all subjects concerning the welfare of the Corporation and the conduct of its business and shall perform such other duties as the Board may from time to time determine. Unless otherwise determined by the Board, he shall preside at meetings of the Board and of the Stockholders at which he is present. 4.7 THE PRESIDENT. - ------------------- The President shall be the chief executive officer of the Corporation. The President shall have general and active management and control of the business and affairs of the Corporation subject to the control of the Board and shall see that all orders and resolutions of the Board are carried into effect. The President shall from time to time make such reports of the affairs of the Corporation as the Board of Directors may require and shall perform such other duties as the Board may from time to time determine. 4.8 THE SECRETARY. - ------------------- The Secretary shall, to the extent practicable, attend all meetings of the Board and all meetings of the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose. He may give, or cause to be given, notice of all meetings of the stockholders and of the Board, and shall perform such other duties as may be prescribed by the Board, the Chairman or the President, under whose supervision he shall act. He shall keep in safe custody the seal of the Corporation and affix the same to any duly authorized instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or, if appointed, an Assistant Secretary or an Assistant Treasurer. He shall keep in safe custody the certificate books and stockholder records and such other books and records as the Board may direct, and shall perform all other duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. 4.9 THE TREASURER. - ------------------- The Treasurer shall have the care and custody of the corporate funds and other valuable effects, including securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, shall render to the Chairman, President and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation and shall perform all other duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. 5.1 EXECUTION OF DOCUMENTS. - ---------------------------- The Board shall designate, by either specific or general resolution, the officers, employees and agents of the Corporation who shall have the power to execute and deliver deeds, contracts, mortgages, bonds, debentures, checks, drafts and other orders for the payment of money and other documents for and in the name of the Corporation, and may authorize such officers, employees and agents to delegate such power (including authority to redelegate) by written instrument to other officers, employees or agents of the Corporation; unless so designated or expressly authorized by these By-laws, no officer, employee or agent shall have any power or authority to bind the Corporation by any contract or engagement, to pledge its credit or to render it liable pecuniarily for any purpose or amount. 5.2 DEPOSITS. - -------------- All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or Treasurer, or any other officer of the Corporation to whom power in this respect shall have been given by the Board, shall select. 5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS. - --------------------------------------------------------------- The Board shall designate the officers of the Corporation who shall have authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of stock or other securities in any other corporation, and to vote or consent with respect to such stock or securities. Such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights, and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, such written proxies, powers of attorney or other instruments as they may deem necessary or proper in order that the Corporation may exercise its powers and rights. ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE 6.1 CERTIFICATES FOR SHARES. - ----------------------------- Every owner of stock of the Corporation shall be entitled to have a certificate certifying the number and class of shares owned by him in the Corporation, which shall be in such form as shall be prescribed by the Board. Certificates shall be numbered and issued in consecutive order and shall be signed by, or in the name of, the Corporation by the Chairman, the President or any Vice President, and by the Treasurer (or an Assistant Treasurer, if appointed) or the Secretary (or an Assistant Secretary, if appointed). In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate had not ceased to be such officer or officers of the Corporation. 6.2 RECORD. - ------------ A record in one or more counterparts shall be kept of the name of the person, firm or corporation owning the shares represented by each certificate for stock of the Corporation issued, the number of shares represented by each such certificate, the date thereof and, in the case of cancellation, the date of cancellation. Except as otherwise expressly required by law, the person in whose name shares of stock stand on the stock record of the Corporation shall be deemed the owner thereof for all purposes regarding the Corporation. 6.3 TRANSFER AND REGISTRATION OF STOCK. - ---------------------------------------- (a) The transfer of stock and certificates which represent the stock of the Corporation shall be governed by Article 8 of Subtitle 1 of Title 6 of the Delaware Code (the Uniform Commercial Code), as amended from time to time. (b) Registration of transfers of shares of the Corporation shall be made only on the books of the Corporation upon request of the registered holder thereof, or of his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and upon the surrender of the certificate or certificates for such shares properly endorsed or accompanied by a stock power duly executed. 6.4 ADDRESSES OF STOCKHOLDERS. - ------------------------------- Each stockholder shall designate to the Secretary an address at which notices of meetings and all other corporate notices may be served or mailed to him, and, if any stockholder shall fail to designate such address, corporate notices may be served upon him by mail directed to him at his post-office address, if any, as the same appears on the share record books of the Corporation or at his last known post-office address. 6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES. - ------------------------------------------------ The holder of any shares of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause to be issued to him a new certificate or certificates for such shares, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or his legal representative to give the Corporation a bond in such sum and with such surety or sureties as it may direct to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate. 6.6 REGULATIONS. - ----------------- The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of certificates for stock of the Corporation. 6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. - ------------------------------------------------------------- (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall be not more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date for the adjourned meeting. (b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall be not more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by the Delaware Statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in this State, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by the Delaware Statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action. (c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. ARTICLE VII SEAL The Board may provide a corporate seal, which shall be in the form of a circle and shall bear the full name of the Corporation, the year of incorporation of the Corporation and the words and figures "Corporate Seal - Delaware." ARTICLE VIII FISCAL YEAR The fiscal year of the Corporation shall be the calendar year unless otherwise determined by the Board. ARTICLE IX INDEMNIFICATION AND INSURANCE 9.1 INDEMNIFICATION. - --------------------- (a) As provided in the Charter, to the fullest extent permitted by the Delaware Statute as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for breach of fiduciary duty as a director. (b) Without limitation of any right conferred by paragraph (a) of this Section 1, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer or employee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity while serving as a director, officer or employee or in any other capacity while serving as a director, officer or employee, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware Statute, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys' fees, judgments, fines, excise taxes or amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer or employee and shall inure to the benefit of the indemnitee's heirs, testators, intestates, executors and administrators; PROVIDED, HOWEVER, that such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; PROVIDED FURTHER, HOWEVER, that no indemnification shall be made in the case of an action, suit or proceeding by or in the right of the Corporation in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director, officer, employee or agent is liable to the Corporation, unless a court having jurisdiction shall determine that, despite such adjudication, such person is fairly and reasonably entitled to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided in Section 1(c) of this Article IX with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) initiated by such indemnitee was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article IX shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); PROVIDED, HOWEVER, that, if the Delaware Statute requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise. (c) If a claim under Section (b) of this Article IX is not paid in full by the Corporation with 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of any undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in the Delaware Statute. Neither the failure of the Corporation (including the Board, independent legal counsel, or the stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware Statute, nor an actual determination by the Corporation (including the Board, independent legal counsel, or the stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section or otherwise shall be on the Corporation. (d) The rights to indemnification and to the advancement of expenses conferred in this Article IX shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Charter, agreement, vote of stockholders or disinterested directors or otherwise. 9.2 INSURANCE. - --------------- The Corporation may purchase and maintain insurance, at its expense, to protect itself and any person who is or was a director, officer, employee or agent of the Corporation or any person who is or was serving at the request of the Corporation as a director, officer, employer or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware Statute. ARTICLE X AMENDMENT Any by-law (including these By-laws) may be adopted, amended or repealed by the vote of the holders of a majority of the shares then entitled to vote or by the stockholders' written consent pursuant to Section 10 of Article II, or by the vote of the Board or by the directors' written consent pursuant to Section 6 of Article III. * * * * * * * * * BERRY STERLING CORPORATION BY-LAWS TABLE OF CONTENTS PAGE ARTICLE I OFFICES .................................................. 1 1.1 Registered Office............................................. 1 1.2 Other Offices................................................. 1 ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING.......................................................... 1 2.1 Annual Meetings............................................... 1 2.2 Special Meetings.............................................. 1 2.3 NOTICE OF MEETINGS............................................ 1 2.4 Quorum........................................................ 2 2.5 ORGANIZATION.................................................. 2 2.6 Order of Business............................................. 2 2.7 VOTING........................................................ 3 2.8 Inspection.................................................... 3 2.9 LIST OF STOCKHOLDERS.......................................... 4 2.10 Stockholders' Consent in Lieu of Meeting..................... 4 ARTICLE III BOARD OF DIRECTORS...................................... 4 3.1 General Powers................................................ 4 3.2 Number and Term of Office..................................... 4 3.3 ELECTION OF DIRECTORS......................................... 4 3.4 Resignation, Removal and Vacancies............................ 5 3.5 MEETINGS...................................................... 5 3.6 Directors' Consent in Lieu of Meeting......................... 6 3.7 Action by means of Conference Telephone or Similar Communications Equipment...................................... 6 3.8 Committees.................................................... 6 ARTICLE IV OFFICERS................................................. 6 4.1 Executive Officers............................................ 6 4.2 Authority and Duties.......................................... 7 4.3 OTHER OFFICERS................................................ 7 4.4 Term of Office, Resignation and Removal....................... 7 4.5 VACANCIES..................................................... 7 4.6 The Chairman.................................................. 7 4.7 THE PRESIDENT................................................. 7 4.8 The Secretary................................................. 8 4.9 THE TREASURER................................................. 8 ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC............. 8 5.1 Execution of Documents........................................ 8 5.2 Deposits...................................................... 8 5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS.................................................. 9 ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............ 9 6.1 Certificates for Shares....................................... 9 6.2 Record........................................................ 9 6.3 TRANSFER AND REGISTRATION OF STOCK............................ 9 6.4 Addresses of Stockholders..................................... 10 6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES.................... 10 6.6 Regulations................................................... 10 6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD....... 10 ARTICLE VII SEAL.................................................... 11 Article VIII Fiscal Year............................................ 11 ARTICLE IX INDEMNIFICATION AND INSURANCE............................ 11 9.1 Indemnification............................................... 11 9.2 Insurance..................................................... 13 ARTICLE X AMENDMENT................................................. 13 ____________________ BERRY STERLING CORPORATION Incorporated under the laws of the State of Delaware _____________________ ___________________________ BY-LAWS ___________________________ As adopted on February 13, 1995 EX-3.13 5 CERTIFICATE OF INCORPORATION OF AEROCON CERTIFICATE OF INCORPORATION OF AEROCON, INC. ____________________________________ ARTICLE I --------- NAME ---- The name of the corporation (herein called the "Corporation") is AeroCon, Inc. ARTICLE II ---------- REGISTERED OFFICE AND AGENT --------------------------- The address of the registered office of the Corporation in the State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover, County of Kent, Delaware. The name of the registered agent of the Corporation at such address is The Prentice-Hall Corporation System, Inc. ARTICLE III ----------- PURPOSE ------- The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "Delaware Statute"). ARTICLE IV ---------- CAPITAL STOCK ------------- The total number of shares of all classes of stock which the Corporation has authority to issue is 10,000 shares, all of which are shares of Common Stock, par value $.01 per share. ARTICLE V --------- INCORPORATOR ------------ The name and mailing address of the incorporator is as follows:
NAME MAILING ADDRESS ---- --------------- Reinena L. Davis c/o O'Sullivan Graev & Karabell, LLP30 Rockefeller Plaza 41st FloorNew York, New York 10112
ARTICLE VI ---------- DIRECTORS ---------- 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 VII ----------- MANAGEMENT OF THE CORPORATION ----------------------------- 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 for liability (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 Statute, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware Statute 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 Statute, as so amended. 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 VIII ------------ CREDITORS MEETINGS ------------------ Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/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, and/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, and/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, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. IN WITNESS WHEREOF, I, the undersigned, being the sole incorporator hereinabove named, for the purpose of forming a corporation pursuant to the Delaware Statute, DO HEREBY CERTIFY, under penalties of perjury, that this is my act and deed and that the facts hereinabove stated are truly set forth and, accordingly, I have hereunto set my hand as of the 14th day of February, 1995. _________________________________ Reinena L. Davis EX-3.14 6 BY-LAWS OF AEROCON BY-LAWS OF AEROCON, INC. ARTICLE I OFFICES ------- 1.1 REGISTERED OFFICE. - ----------------------- The registered office of AeroCon, Inc. (the "Corporation"), in the State of Delaware shall be at 32 Loockerman Square, Suite L-100, City of Dover, County of Kent, Delaware 19904, and the registered agent in charge thereof shall be The Prentice-Hall Corporation System. 1.2 OTHER OFFICES. - ------------------- The Corporation may also have an office or offices at any other place or places within or outside the State of Delaware. ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING 2.1 ANNUAL MEETINGS. - --------------------- The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (the "Board") and designated in the notice or waiver of notice thereof, except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware (the "Delaware Statute") to be taken at a stockholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 10 of this Article II. 2.2 SPECIAL MEETINGS. - ---------------------- A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman, the President or the record holders of at least a majority of the issued and outstanding shares of Common Stock of the Corporation, to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof. 2.3 NOTICE OF MEETINGS. - ------------------------ Except as otherwise required by statute, the Certificate of Incorporation of the Corporation (the "Certificate") or these By-laws, notice of each annual or special meeting of the stockholders shall be given to each stockholder of record entitled to vote at such meeting not less than 10 nor more than 60 days before the day on which the meeting is to be held, by delivering written notice thereof to him personally, or by mailing a copy of such notice, postage prepaid, directly to him at his address as it appears in the records of the Corporation, or by transmitting such notice thereof to him at such address by telegraph, cable or other telephonic transmission. Every such notice shall state the place, the date and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy, or who shall, in person or by attorney thereunto authorized, waive such notice in writing, either before or after such meeting. Except as otherwise provided in these By-laws, neither the business to be transacted at, nor the purpose of, any meeting of the stockholders need be specified in any such notice or waiver of notice. Notice of any adjourned meeting of stockholders shall not be required to be given, except when expressly required by law. 2.4 QUORUM. - ------------ At each meeting of the stockholders, except where otherwise provided by the Certificate or these By-laws, the holders of a majority of the issued and outstanding shares of Common Stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. In the absence of a quorum, a majority in interest of the stockholders present in person or represented by proxy and entitled to vote, or, in the absence of all the stockholders entitled to vote, any officer entitled to preside at, or act as secretary of, such meeting, shall have the power to adjourn the meeting from time to time, until stockholders holding the requisite amount of stock to constitute a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called. 2.5 ORGANIZATION. - ------------------ (a) Unless otherwise determined by the Board, at each meeting of the stockholders, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President; (iii) any director, officer or stockholder of the Corporation designated by the Board to act as chairman of such meeting and to preside thereat if the Chairman or the President shall be absent from such meeting; or (iv) a stockholder of record who shall be chosen chairman of such meeting by a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat. (b) The Secretary or, if he shall be presiding over such meeting in accordance with the provisions of this Section 5 or if he shall be absent from such meeting, the person (who shall be an Assistant Secretary, if an Assistant Secretary has been appointed and is present) whom the chairman of such meeting shall appoint, shall act as secretary of such meeting and keep the minutes thereof. 2.6 ORDER OF BUSINESS. - ----------------------- The order of business at each meeting of the stockholders shall be determined by the chairman of such meeting, but such order of business may be changed by a majority in voting interest of those present in person or by proxy at such meeting and entitled to vote thereat. 2.7 VOTING. - ------------ Except as otherwise provided by law, the Certificate or these By- laws, at each meeting of the stockholders, every stockholder of the Corporation shall be entitled to one vote in person or by proxy for each share of Common Stock of the Corporation held by him and registered in his name on the books of the Corporation on the date fixed pursuant to Section 7 of Article VI as the record date for the determination of stockholders entitled to vote at such meeting. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. A person whose stock is pledged shall be entitled to vote, unless, in the transfer by the pledgor on the books of the Corporation, he has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his proxy may represent such stock and vote thereon. If shares or other securities having voting power stand in the record of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary shall be given written notice to the contrary and furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one votes, his act binds all; (b) if more than one votes, the act of the majority so voting binds all; and (c) if more than one votes, but the vote is evenly split on any particular matter, such shares shall be voted in the manner provided by law. If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or even-split for the purposes of this Section 7 shall be a majority or even-split in interest. The Corporation shall not vote directly or indirectly any share of its own capital stock. Any vote of stock may be given by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, delivered to the secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted after three years from its date, unless said proxy provides for a longer period. At all meetings of the stockholders, all matters (except where other provision is made by law, the Certificate or these By-laws) shall be decided by the vote of a majority in interest of the stockholders present in person or by proxy at such meeting and entitled to vote thereon, a quorum being present. Unless demanded by a stockholder present in person or by proxy at any meeting and entitled to vote thereon, the vote on any question need not be by ballot. Upon a demand by any such stockholder for a vote by ballot upon any question, such vote by ballot shall be taken. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted. 2.8 INSPECTION. - ---------------- The chairman of the meeting may at any time appoint one or more inspectors to serve at any meeting of the stockholders. Any inspector may be removed, and a new inspector or inspectors appointed, by the Board at any time. Such inspectors shall decide upon the qualifications of voters, accept and count votes, declare the results of such vote, and subscribe and deliver to the secretary of the meeting a certificate stating the number of shares of stock issued and outstanding and entitled to vote thereon and the number of shares voted for and against the question, respectively. The inspectors need not be stockholders of the Corporation, and any director or officer of the Corporation may be an inspector on any question other than a vote for or against his election to any position with the Corporation or on any other matter in which he may be directly interested. Before acting as herein provided, each inspector shall subscribe an oath faithfully to execute the duties of an inspector with strict impartiality and according to the best of his ability. 2.9 LIST OF STOCKHOLDERS. - -------------------------- It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of its stock ledger to prepare and make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to any such meeting, during ordinary business hours, for a period of at least 10 days prior to such meeting, either at a place within the city where such meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING. - ---------------------------------------------- Any action required by the Delaware Statute to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, by a consent in writing, as permitted by the Delaware Statute. ARTICLE III BOARD OF DIRECTORS 3.1 GENERAL POWERS. - -------------------- The business, property and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate directed or required to be exercised or done by the stockholders. 3.2 NUMBER AND TERM OF OFFICE. - ------------------------------- The number of directors shall be fixed from time to time by the Board. Directors need not be stockholders. Each director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided. 3.3 ELECTION OF DIRECTORS. - --------------------------- At each meeting of the stockholders for the election of directors at which a quorum is present, the persons receiving the greatest number of votes, up to the number of directors to be elected, of the stockholders present in person or by proxy and entitled to vote thereon shall be the directors; PROVIDED, HOWEVER, that for purposes of such vote no stockholder shall be allowed to cumulate his votes. Unless an election by ballot shall be demanded as provided in Section 7 of Article II, election of directors may be conducted in any manner approved at such meeting. 3.4 RESIGNATION, REMOVAL AND VACANCIES. - ---------------------------------------- (a) Any director may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. (b) Any director or the entire Board may be removed, with or without cause, at any time by vote of the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the stockholders pursuant to Section 10 of Article II. (c) Vacancies occurring on the Board for any reason may be filled by vote of the stockholders or by the stockholders' written consent pursuant to Section 10 of Article II, or by vote of the Board or by the directors' written consent pursuant to Section 6 of this Article III. If the number of directors then in office is less than a quorum, such vacancies may be filled by a vote of a majority of the directors then in office. 3.5 MEETINGS. - -------------- (A) ANNUAL MEETINGS. As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article III. (B) OTHER MEETINGS. Other meetings of the Board shall be held at such times and places as the Board, the Chairman, the President or any director shall from time to time determine. (C) NOTICE OF MEETINGS. Notice shall be given to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the date on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held, but notice need not be given to any director who shall attend such meeting. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. (D) PLACE OF MEETINGS. The Board may hold its meetings at such place or places within or outside the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. (E) QUORUM AND MANNER OF ACTING. A majority of the total number of directors then in office shall be present in person at any meeting of the Board in order to constitute a quorum for the transaction of business at such meeting, and the vote of a majority of those directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or act of the Board, except as otherwise expressly required by law or these By-laws. In the absence of a quorum for any such meeting, a majority of the directors present thereat may adjourn such meeting from time to time until a quorum shall be present. (F) ORGANIZATION. At each meeting of the Board, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President (if a director); or (iii) any director designated by a majority of the directors present. The Secretary or, in the case of his absence, an Assistant Secretary, if an Assistant Secretary has been appointed and is present, or any person whom the chairman of the meeting shall appoint shall act as secretary of such meeting and keep the minutes thereof. 3.6 DIRECTORS' CONSENT IN LIEU OF MEETING. - ------------------------------------------- Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the directors then in office and such consent is filed with the minutes of the proceedings of the Board. 3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. - ---------------------------------------------------------------------- Any one or more members of the Board may participate in a meeting of the Board by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. 3.8 COMMITTEES. - ---------------- The Board may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more directors of the Corporation, which to the extent provided in said resolution or resolutions shall have and may exercise the powers of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it, such committee or committees to have such name or names as may be determined from time to time by resolution adopted by the Board. A majority of all the members of any such committee may determine its action and fix the time and place of its meetings, unless the Board shall otherwise provide. The Board shall have power to change the members of any such committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time. ARTICLE IV OFFICERS 4.1 EXECUTIVE OFFICERS. - ------------------------ The principal officers of the Corporation shall be a Chairman, if one is appointed (and any references to the Chairman shall not apply if a Chairman has not been appointed), a President, a Secretary, and a Treasurer, and may include such other officers as the Board may appoint pursuant to Section 3 of this Article IV. Any two or more offices may be held by the same person. 4.2 AUTHORITY AND DUTIES. - -------------------------- All officers, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-laws or, to the extent so provided, by the Board. 4.3 OTHER OFFICERS. - -------------------- The Corporation may have such other officers, agents and employees as the Board may deem necessary, including one or more Assistant Secretaries, one or more Assistant Treasurers and one or more Vice Presidents, each of whom shall hold office for such period, have such authority, and perform such duties as the Board, the Chairman, or the President may from time to time determine. The Board may delegate to any principal officer the power to appoint and define the authority and duties of, or remove, any such officers, agents, or employees. 4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL. - --------------------------------------------- (a) All officers shall be elected or appointed by the Board and shall hold office for such term as may be prescribed by the Board. Each officer shall hold office until his successor has been elected or appointed and qualified or until his earlier death or resignation or removal in the manner hereinafter provided. The Board may require any officer to give security for the faithful performance of his duties. (b) Any officer may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, at the time it is accepted by action of the Board. Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective. (c) All officers and agents elected or appointed by the Board shall be subject to removal at any time by the Board or by the stockholders of the Corporation with or without cause. 4.5 VACANCIES. - --------------- If the office of Chairman, President, Secretary or Treasurer becomes vacant for any reason, the Board shall fill such vacancy, and if any other office becomes vacant, the Board may fill such vacancy. Any officer so appointed or elected by the Board shall serve only until such time as the unexpired term of his predecessor shall have expired, unless reelected or reappointed by the Board. 4.6 THE CHAIRMAN. - ------------------ The Chairman shall give counsel and advice to the Board and the officers of the Corporation on all subjects concerning the welfare of the Corporation and the conduct of its business and shall perform such other duties as the Board may from time to time determine. Unless otherwise determined by the Board, he shall preside at meetings of the Board and of the Stockholders at which he is present. 4.7 THE PRESIDENT. - ------------------- The President shall be the chief executive officer of the Corporation. The President shall have general and active management and control of the business and affairs of the Corporation subject to the control of the Board and shall see that all orders and resolutions of the Board are carried into effect. The President shall from time to time make such reports of the affairs of the Corporation as the Board of Directors may require and shall perform such other duties as the Board may from time to time determine. 4.8 THE SECRETARY. - ------------------- The Secretary shall, to the extent practicable, attend all meetings of the Board and all meetings of the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose. He may give, or cause to be given, notice of all meetings of the stockholders and of the Board, and shall perform such other duties as may be prescribed by the Board, the Chairman or the President, under whose supervision he shall act. He shall keep in safe custody the seal of the Corporation and affix the same to any duly authorized instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or, if appointed, an Assistant Secretary or an Assistant Treasurer. He shall keep in safe custody the certificate books and stockholder records and such other books and records as the Board may direct, and shall perform all other duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. 4.9 THE TREASURER. - ------------------- The Treasurer shall have the care and custody of the corporate funds and other valuable effects, including securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, shall render to the Chairman, President and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation and shall perform all other duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. 5.1 EXECUTION OF DOCUMENTS. - ---------------------------- The Board shall designate, by either specific or general resolution, the officers, employees and agents of the Corporation who shall have the power to execute and deliver deeds, contracts, mortgages, bonds, debentures, checks, drafts and other orders for the payment of money and other documents for and in the name of the Corporation, and may authorize such officers, employees and agents to delegate such power (including authority to redelegate) by written instrument to other officers, employees or agents of the Corporation; unless so designated or expressly authorized by these By-laws, no officer, employee or agent shall have any power or authority to bind the Corporation by any contract or engagement, to pledge its credit or to render it liable pecuniarily for any purpose or amount. 5.2 DEPOSITS. - -------------- All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or Treasurer, or any other officer of the Corporation to whom power in this respect shall have been given by the Board, shall select. 5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS. - --------------------------------------------------------------- The Board shall designate the officers of the Corporation who shall have authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of stock or other securities in any other corporation, and to vote or consent with respect to such stock or securities. Such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights, and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, such written proxies, powers of attorney or other instruments as they may deem necessary or proper in order that the Corporation may exercise its powers and rights. ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE 6.1 CERTIFICATES FOR SHARES. - ----------------------------- Every owner of stock of the Corporation shall be entitled to have a certificate certifying the number and class of shares owned by him in the Corporation, which shall be in such form as shall be prescribed by the Board. Certificates shall be numbered and issued in consecutive order and shall be signed by, or in the name of, the Corporation by the Chairman, the President or any Vice President, and by the Treasurer (or an Assistant Treasurer, if appointed) or the Secretary (or an Assistant Secretary, if appointed). In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate had not ceased to be such officer or officers of the Corporation. 6.2 RECORD. - ------------ A record in one or more counterparts shall be kept of the name of the person, firm or corporation owning the shares represented by each certificate for stock of the Corporation issued, the number of shares represented by each such certificate, the date thereof and, in the case of cancellation, the date of cancellation. Except as otherwise expressly required by law, the person in whose name shares of stock stand on the stock record of the Corporation shall be deemed the owner thereof for all purposes regarding the Corporation. 6.3 TRANSFER AND REGISTRATION OF STOCK. - ---------------------------------------- (a) The transfer of stock and certificates which represent the stock of the Corporation shall be governed by Article 8 of Subtitle 1 of Title 6 of the Delaware Code (the Uniform Commercial Code), as amended from time to time. (b) Registration of transfers of shares of the Corporation shall be made only on the books of the Corporation upon request of the registered holder thereof, or of his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and upon the surrender of the certificate or certificates for such shares properly endorsed or accompanied by a stock power duly executed. 6.4 ADDRESSES OF STOCKHOLDERS. - ------------------------------- Each stockholder shall designate to the Secretary an address at which notices of meetings and all other corporate notices may be served or mailed to him, and, if any stockholder shall fail to designate such address, corporate notices may be served upon him by mail directed to him at his post-office address, if any, as the same appears on the share record books of the Corporation or at his last known post-office address. 6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES. - ------------------------------------------------ The holder of any shares of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause to be issued to him a new certificate or certificates for such shares, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or his legal representative to give the Corporation a bond in such sum and with such surety or sureties as it may direct to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate. 6.6 REGULATIONS. - ----------------- The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of certificates for stock of the Corporation. 6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. - ------------------------------------------------------------- (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall be not more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date for the adjourned meeting. (b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall be not more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by the Delaware Statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in this State, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by the Delaware Statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action. (c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. ARTICLE VII SEAL The Board may provide a corporate seal, which shall be in the form of a circle and shall bear the full name of the Corporation, the year of incorporation of the Corporation and the words and figures "Corporate Seal - Delaware." ARTICLE VIII FISCAL YEAR The fiscal year of the Corporation shall be the calendar year unless otherwise determined by the Board. ARTICLE IX INDEMNIFICATION AND INSURANCE 9.1 INDEMNIFICATION. - --------------------- (a) As provided in the Charter, to the fullest extent permitted by the Delaware Statute as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for breach of fiduciary duty as a director. (b) Without limitation of any right conferred by paragraph (a) of this Section 1, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer or employee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity while serving as a director, officer or employee or in any other capacity while serving as a director, officer or employee, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware Statute, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys' fees, judgments, fines, excise taxes or amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer or employee and shall inure to the benefit of the indemnitee's heirs, testators, intestates, executors and administrators; PROVIDED, HOWEVER, that such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; PROVIDED FURTHER, HOWEVER, that no indemnification shall be made in the case of an action, suit or proceeding by or in the right of the Corporation in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director, officer, employee or agent is liable to the Corporation, unless a court having jurisdiction shall determine that, despite such adjudication, such person is fairly and reasonably entitled to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided in Section 1(c) of this Article IX with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) initiated by such indemnitee was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article IX shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); PROVIDED, HOWEVER, that, if the Delaware Statute requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise. (c) If a claim under Section (b) of this Article IX is not paid in full by the Corporation with 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of any undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in the Delaware Statute. Neither the failure of the Corporation (including the Board, independent legal counsel, or the stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware Statute, nor an actual determination by the Corporation (including the Board, independent legal counsel, or the stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section or otherwise shall be on the Corporation. (d) The rights to indemnification and to the advancement of expenses conferred in this Article IX shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Charter, agreement, vote of stockholders or disinterested directors or otherwise. 9.2 INSURANCE. - --------------- The Corporation may purchase and maintain insurance, at its expense, to protect itself and any person who is or was a director, officer, employee or agent of the Corporation or any person who is or was serving at the request of the Corporation as a director, officer, employer or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware Statute. ARTICLE X AMENDMENT Any by-law (including these By-laws) may be adopted, amended or repealed by the vote of the holders of a majority of the shares then entitled to vote or by the stockholders' written consent pursuant to Section 10 of Article II, or by the vote of the Board or by the directors' written consent pursuant to Section 6 of Article III. * * * * * * * * * AEROCON, INC. BY-LAWS TABLE OF CONTENTS PAGE ARTICLE I OFFICES.................................................... 1 1.1 Registered Office.............................................. 1 1.2 Other Offices.................................................. 1 ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING........................................................... 1 2.1 Annual Meetings................................................ 1 2.2 Special Meetings............................................... 1 2.3 NOTICE OF MEETINGS............................................. 1 2.4 Quorum......................................................... 2 2.5 ORGANIZATION................................................... 2 2.6 Order of Business.............................................. 2 2.7 VOTING......................................................... 2 2.8 Inspection..................................................... 3 2.9 LIST OF STOCKHOLDERS........................................... 4 2.10 Stockholders' Consent in Lieu of Meeting...................... 4 ARTICLE III BOARD OF DIRECTORS....................................... 4 3.1 General Powers................................................. 4 3.2 Number and Term of Office...................................... 4 3.3 ELECTION OF DIRECTORS.......................................... 4 3.4 Resignation, Removal and Vacancies............................. 4 3.5 MEETINGS....................................................... 5 3.6 Directors' Consent in Lieu of Meeting.......................... 6 3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT.......................................................... 6 3.8 Committees..................................................... 6 ARTICLE IV OFFICERS.................................................. 6 4.1 Executive Officers............................................. 6 4.2 Authority and Duties........................................... 6 4.3 OTHER OFFICERS................................................. 7 4.4 Term of Office, Resignation and Removal........................ 7 4.5 VACANCIES...................................................... 7 4.6 The Chairman................................................... 7 4.7 THE PRESIDENT.................................................. 7 4.8 The Secretary.................................................. 8 4.9 THE TREASURER.................................................. 8 ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.............. 8 5.1 Execution of Documents......................................... 8 5.2 Deposits....................................................... 8 5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS......................................................... 9 ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............. 9 6.1 Certificates for Shares........................................ 9 6.2 Record......................................................... 9 6.3 TRANSFER AND REGISTRATION OF STOCK............................. 9 6.4 Addresses of Stockholders...................................... 10 6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES..................... 10 6.6 Regulations.................................................... 10 6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD........ 10 ARTICLE VII SEAL..................................................... 11 Article VIII Fiscal Year............................................. 11 ARTICLE IX INDEMNIFICATION AND INSURANCE............................. 11 9.1 Indemnification................................................ 11 9.2 Insurance...................................................... 13 ARTICLE X AMENDMENT.................................................. 13 ____________________ AEROCON, INC. Incorporated under the laws of the State of Delaware _____________________ ___________________________ BY-LAWS ___________________________ As adopted on February 14, 1995 EX-3.15 7 ARTICLES OF INCORPORATION OF PACKERWARE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF PACKERWARE CORPORATION ____________________________ PackerWare Corporation, a Kansas corporation (the "Corporation"), does hereby certify that: FIRST: The present name of the Corporation is "PackerWare Corporation," which is the name under which the Corporation was originally incorporated. The date of filing of the original Articles of Incorporation of the Corporation with the Secretary of State of the State of Kansas was October 31, 1968. SECOND: These Amended and Restated Articles of Incorporation (the "Restated Articles") amend and restate in their entirety the present Articles of Incorporation of the Corporation. These Restated Articles have been duly adopted and approved by the Board of Directors of the Corporation by unanimous written consent in lieu of a meeting thereof and by the sole shareholder of the Corporation by written consent in accordance with the provisions of Sections 17-6301(f), 17-6602 and 17- 6605 of the General Corporation Code of the State of Kansas. THIRD: These Restated Articles shall become effective immediately upon their filing with the Secretary of State of the State of Kansas. FOURTH: Upon the filing with the Secretary of State of the State of Kansas of these Restated Articles, the Articles of Incorporation of the Corporation shall be amended and restated in their entirety to read as set forth on EXHIBIT A attached hereto. * * * IN WITNESS WHEREOF, the Corporation has caused these Amended and Restated Articles of Incorporation to be duly executed this _____ day of January, 1997. By: ______________________________________ James M. Kratochvil Vice President, Chief Financial Officer, Secretary and Treasurer ATTEST: _____________________________ Joseph S. Levy Vice President and Assistant Secretary STATE OF ) ) SS COUNTY OF ) On this _______day of January, 1997, before me personally appeared James M. Kratochvil, being first duly sworn and to me known to be the person described in and who executed the foregoing Amended and Restated Articles of Incorporation of PackerWare Corporation, and acknowledged that he executed the same as his free act and deed. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last above mentioned. My Commission expires: Notary Public STATE OF ) ) SS COUNTY OF ) On this ______ day of January, 1997, before me personally appeared Joseph S. Levy, being first duly sworn and to me known to be the person described in and who executed the foregoing Amended and Restated Articles of Incorporation of PackerWare Corporation, and acknowledged that he executed the same as his free act and deed. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last above mentioned. My Commission expires: ____________________________ _______________________________ Notary Public EXHIBIT A --------- AMENDED AND RESTATED ARTICLES OF INCORPORATION OF PACKERWARE CORPORATION ____________________________ ARTICLE FIRST ------------- The name of the corporation (herein called the "Corporation") is PACKERWARE CORPORATION. ARTICLE SECOND -------------- The address of the registered office of the Corporation in the State of Kansas is 534 South Kansas Avenue, Suite 1108, City of Topeka, County of Shawnee, Kansas. The name of the registered agent of the Corporation at such address is Corporation Service Company. ARTICLE THIRD ------------- The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Code of the State of Kansas (the "Kansas Statute"). ARTICLE FOURTH -------------- The total number of shares of all classes of stock which the Corporation has authority to issue is 10,000 shares, all of which are shares of Common Stock, par value $.01 per share. There shall be no preferences, qualifications, limitations, or restrictions whatsoever, nor any special or relative rights with respect to the shares. ARTICLE FIFTH ------------- 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 SIXTH ------------- 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 for liability (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 17-6424 of the Kansas Statute, or (iv) for any transaction from which the director derived any improper personal benefit. If the Kansas Statute 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 Kansas Statute, as so amended. 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 SEVENTH --------------- Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Kansas 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 17-6901 of the Kansas Statute or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 17-6808 of the Kansas Statute order a meeting of the creditors or class of creditors, and/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, and/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, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. * * * * EX-3.16 8 BY-LAWS OF PACKERWARE BY-LAWS OF PACKERWARE CORPORATION ARTICLE I OFFICES ------- 1.1 REGISTERED OFFICE. - ----------------------- The registered office of PackerWare Corporation (the "Corporation"), in the State of Kansas shall be at 534 South Kansas Avenue, Suite 1108, City of Topeka, County of Shawnee, Kansas 66603, and the registered agent in charge thereof shall be the Corporation Service Company. 1.2 OTHER OFFICES. - ------------------- The Corporation may also have an office or offices at any other place or places within or outside the State of Kansas. ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING -------------------------- 2.1 ANNUAL MEETINGS. - --------------------- The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (the "Board") and designated in the notice or waiver of notice thereof, except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Code of the State of Kansas (the "Kansas Statute") to be taken at a stockholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 10 of this Article II. 2.2 SPECIAL MEETINGS. - ---------------------- A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman, the President or the record holders of at least a majority of the issued and outstanding shares of Common Stock of the Corporation, to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof. 2.3 NOTICE OF MEETINGS. - ------------------------ Except as otherwise required by statute, the Articles of Incorporation of the Corporation (the "Articles") or these By-laws, notice of each annual or special meeting of the stockholders shall be given to each stockholder of record entitled to vote at such meeting not less than 10 nor more than 60 days before the day on which the meeting is to be held, by delivering written notice thereof to him personally, or by mailing a copy of such notice, postage prepaid, directly to him at his address as it appears in the records of the Corporation, or by transmitting such notice thereof to him at such address by telegraph, cable or other telephonic transmission. Every such notice shall state the place, the date and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy, or who shall, in person or by attorney thereunto authorized, waive such notice in writing, either before or after such meeting. Except as otherwise provided in these By-laws, neither the business to be transacted at, nor the purpose of, any meeting of the stockholders need be specified in any such notice or waiver of notice. Notice of any adjourned meeting of stockholders shall not be required to be given, except when expressly required by law. 2.4 QUORUM. - ------------ At each meeting of the stockholders, except where otherwise provided by the Articles or these By-laws, the holders of a majority of the issued and outstanding shares of Common Stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. In the absence of a quorum, a majority in interest of the stockholders present in person or represented by proxy and entitled to vote, or, in the absence of all the stockholders entitled to vote, any officer entitled to preside at, or act as secretary of, such meeting, shall have the power to adjourn the meeting from time to time, until stockholders holding the requisite amount of stock to constitute a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called. 2.5 ORGANIZATION. - ------------------ (a) Unless otherwise determined by the Board, at each meeting of the stockholders, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President; (iii) any director, officer or stockholder of the Corporation designated by the Board to act as chairman of such meeting and to preside thereat if the Chairman or the President shall be absent from such meeting; or (iv) a stockholder of record who shall be chosen chairman of such meeting by a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat. (b) The Secretary or, if he shall be presiding over such meeting in accordance with the provisions of this Section 5 or if he shall be absent from such meeting, the person (who shall be an Assistant Secretary, if an Assistant Secretary has been appointed and is present) whom the chairman of such meeting shall appoint, shall act as secretary of such meeting and keep the minutes thereof. 2.6 ORDER OF BUSINESS. - ----------------------- The order of business at each meeting of the stockholders shall be determined by the chairman of such meeting, but such order of business may be changed by a majority in voting interest of those present in person or by proxy at such meeting and entitled to vote thereat. 2.7 VOTING. - ------------ Except as otherwise provided by law, the Articles or these By-laws, at each meeting of the stockholders, every stockholder of the Corporation shall be entitled to one vote in person or by proxy for each share of Common Stock of the Corporation held by him and registered in his name on the books of the Corporation on the date fixed pursuant to Section 7 of Article VI as the record date for the determination of stockholders entitled to vote at such meeting. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. A person whose stock is pledged shall be entitled to vote, unless, in the transfer by the pledgor on the books of the Corporation, he has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his proxy may represent such stock and vote thereon. If shares or other securities having voting power stand in the record of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary shall be given written notice to the contrary and furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one votes, his act binds all; (b) if more than one votes, the act of the majority so voting binds all; and (c) if more than one votes, but the vote is evenly split on any particular matter, such shares shall be voted in the manner provided by law. If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or even-split for the purposes of this Section 7 shall be a majority or even-split in interest. The Corporation shall not vote directly or indirectly any share of its own capital stock. Any vote of stock may be given by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, delivered to the secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted after three years from its date, unless said proxy provides for a longer period. At all meetings of the stockholders, all matters (except where other provision is made by law, the Articles or these By-laws) shall be decided by the vote of a majority in interest of the stockholders present in person or by proxy at such meeting and entitled to vote thereon, a quorum being present. Unless demanded by a stockholder present in person or by proxy at any meeting and entitled to vote thereon, the vote on any question need not be by ballot. Upon a demand by any such stockholder for a vote by ballot upon any question, such vote by ballot shall be taken. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted. 2.8 INSPECTION. - ---------------- The chairman of the meeting may at any time appoint one or more inspectors to serve at any meeting of the stockholders. Any inspector may be removed, and a new inspector or inspectors appointed, by the Board at any time. Such inspectors shall decide upon the qualifications of voters, accept and count votes, declare the results of such vote, and subscribe and deliver to the secretary of the meeting a certificate stating the number of shares of stock issued and outstanding and entitled to vote thereon and the number of shares voted for and against the question, respectively. The inspectors need not be stockholders of the Corporation, and any director or officer of the Corporation may be an inspector on any question other than a vote for or against his election to any position with the Corporation or on any other matter in which he may be directly interested. Before acting as herein provided, each inspector shall subscribe an oath faithfully to execute the duties of an inspector with strict impartiality and according to the best of his ability. 2.9 LIST OF STOCKHOLDERS. - -------------------------- It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of its stock ledger to prepare and make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to any such meeting, during ordinary business hours, for a period of at least 10 days prior to such meeting, either at a place within the city where such meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING. - ---------------------------------------------- Any action required by the Kansas Statute to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, by a consent in writing, as permitted by the Kansas Statute. ARTICLE III BOARD OF DIRECTORS ------------------ 3.1 GENERAL POWERS. - -------------------- The business, property and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Articles directed or required to be exercised or done by the stockholders. 3.2 NUMBER AND TERM OF OFFICE. - ------------------------------- The number of directors shall be fixed from time to time by the Board. Directors need not be stockholders. Each director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided. 3.3 ELECTION OF DIRECTORS. - --------------------------- At each meeting of the stockholders for the election of directors at which a quorum is present, the persons receiving the greatest number of votes, up to the number of directors to be elected, of the stockholders present in person or by proxy and entitled to vote thereon shall be the directors; PROVIDED, HOWEVER, that for purposes of such vote no stockholder shall be allowed to cumulate his votes. Unless an election by ballot shall be demanded as provided in Section 7 of Article II, election of directors may be conducted in any manner approved at such meeting. 3.4 RESIGNATION, REMOVAL AND VACANCIES. - ---------------------------------------- (a) Any director may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. (b) Any director or the entire Board may be removed, with or without cause, at any time by vote of the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the stockholders pursuant to Section 10 of Article II. (c) Vacancies occurring on the Board for any reason may be filled by vote of the stockholders or by the stockholders' written consent pursuant to Section 10 of Article II, or by vote of the Board or by the directors' written consent pursuant to Section 6 of this Article III. If the number of directors then in office is less than a quorum, such vacancies may be filled by a vote of a majority of the directors then in office. 3.5 MEETINGS. - -------------- (A) ANNUAL MEETINGS. As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article III. (B) OTHER MEETINGS. Other meetings of the Board shall be held at such times and places as the Board, the Chairman, the President or any director shall from time to time determine. (C) NOTICE OF MEETINGS. Notice shall be given to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the date on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held, but notice need not be given to any director who shall attend such meeting. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. (D) PLACE OF MEETINGS. The Board may hold its meetings at such place or places within or outside the State of Kansas as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. (E) QUORUM AND MANNER OF ACTING. A majority of the total number of directors then in office shall be present in person at any meeting of the Board in order to constitute a quorum for the transaction of business at such meeting, and the vote of a majority of those directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or act of the Board, except as otherwise expressly required by law or these By-laws. In the absence of a quorum for any such meeting, a majority of the directors present thereat may adjourn such meeting from time to time until a quorum shall be present. (F) ORGANIZATION. At each meeting of the Board, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President (if a director); or (iii) any director designated by a majority of the directors present. The Secretary or, in the case of his absence, an Assistant Secretary, if an Assistant Secretary has been appointed and is present, or any person whom the chairman of the meeting shall appoint shall act as secretary of such meeting and keep the minutes thereof. 3.6 DIRECTORS' CONSENT IN LIEU OF MEETING. - ------------------------------------------- Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the directors then in office and such consent is filed with the minutes of the proceedings of the Board. 3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. - ---------------------------------------------------------------------- Any one or more members of the Board may participate in a meeting of the Board by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. 3.8 COMMITTEES. - ---------------- The Board may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more directors of the Corporation, which to the extent provided in said resolution or resolutions shall have and may exercise the powers of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it, such committee or committees to have such name or names as may be determined from time to time by resolution adopted by the Board. A majority of all the members of any such committee may determine its action and fix the time and place of its meetings, unless the Board shall otherwise provide. The Board shall have power to change the members of any such committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time. ARTICLE IV OFFICERS -------- 4.1 EXECUTIVE OFFICERS. - ------------------------ The principal officers of the Corporation shall be a Chairman, if one is appointed (and any references to the Chairman shall not apply if a Chairman has not been appointed), a President, a Secretary, and a Treasurer, and may include such other officers as the Board may appoint pursuant to Section 3 of this Article IV. Any two or more offices may be held by the same person. 4.2 AUTHORITY AND DUTIES. - -------------------------- All officers, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-laws or, to the extent so provided, by the Board. 4.3 OTHER OFFICERS. - -------------------- The Corporation may have such other officers, agents and employees as the Board may deem necessary, including one or more Assistant Secretaries, one or more Assistant Treasurers and one or more Vice Presidents, each of whom shall hold office for such period, have such authority, and perform such duties as the Board, the Chairman, or the President may from time to time determine. The Board may delegate to any principal officer the power to appoint and define the authority and duties of, or remove, any such officers, agents, or employees. 4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL. - --------------------------------------------- (a) All officers shall be elected or appointed by the Board and shall hold office for such term as may be prescribed by the Board. Each officer shall hold office until his successor has been elected or appointed and qualified or until his earlier death or resignation or removal in the manner hereinafter provided. The Board may require any officer to give security for the faithful performance of his duties. (b) Any officer may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, at the time it is accepted by action of the Board. Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective. (c) All officers and agents elected or appointed by the Board shall be subject to removal at any time by the Board or by the stockholders of the Corporation with or without cause. 4.5 VACANCIES. - --------------- If the office of Chairman, President, Secretary or Treasurer becomes vacant for any reason, the Board shall fill such vacancy, and if any other office becomes vacant, the Board may fill such vacancy. Any officer so appointed or elected by the Board shall serve only until such time as the unexpired term of his predecessor shall have expired, unless reelected or reappointed by the Board. 4.6 THE CHAIRMAN. - ------------------ The Chairman shall give counsel and advice to the Board and the officers of the Corporation on all subjects concerning the welfare of the Corporation and the conduct of its business and shall perform such other duties as the Board may from time to time determine. Unless otherwise determined by the Board, he shall preside at meetings of the Board and of the Stockholders at which he is present. 4.7 THE PRESIDENT. - ------------------- The President shall be the chief executive officer of the Corporation. The President shall have general and active management and control of the business and affairs of the Corporation subject to the control of the Board and shall see that all orders and resolutions of the Board are carried into effect. The President shall from time to time make such reports of the affairs of the Corporation as the Board of Directors may require and shall perform such other duties as the Board may from time to time determine. 4.8 THE SECRETARY. - ------------------- The Secretary shall, to the extent practicable, attend all meetings of the Board and all meetings of the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose. He may give, or cause to be given, notice of all meetings of the stockholders and of the Board, and shall perform such other duties as may be prescribed by the Board, the Chairman or the President, under whose supervision he shall act. He shall keep in safe custody the seal of the Corporation and affix the same to any duly authorized instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or, if appointed, an Assistant Secretary or an Assistant Treasurer. He shall keep in safe custody the certificate books and stockholder records and such other books and records as the Board may direct, and shall perform all other duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. 4.9 THE TREASURER. - ------------------- The Treasurer shall have the care and custody of the corporate funds and other valuable effects, including securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, shall render to the Chairman, President and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation and shall perform all other duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. ---------------------------------------------- 5.1 EXECUTION OF DOCUMENTS. - ---------------------------- The Board shall designate, by either specific or general resolution, the officers, employees and agents of the Corporation who shall have the power to execute and deliver deeds, contracts, mortgages, bonds, debentures, checks, drafts and other orders for the payment of money and other documents for and in the name of the Corporation, and may authorize such officers, employees and agents to delegate such power (including authority to redelegate) by written instrument to other officers, employees or agents of the Corporation; unless so designated or expressly authorized by these By-laws, no officer, employee or agent shall have any power or authority to bind the Corporation by any contract or engagement, to pledge its credit or to render it liable pecuniarily for any purpose or amount. 5.2 DEPOSITS. - -------------- All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or Treasurer, or any other officer of the Corporation to whom power in this respect shall have been given by the Board, shall select. 5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS. - ---------------------------------------------------------------- The Board shall designate the officers of the Corporation who shall have authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of stock or other securities in any other corporation, and to vote or consent with respect to such stock or securities. Such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights, and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, such written proxies, powers of attorney or other instruments as they may deem necessary or proper in order that the Corporation may exercise its powers and rights. ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE --------------------------------------------- 6.1 CERTIFICATES FOR SHARES. - ----------------------------- Every owner of stock of the Corporation shall be entitled to have a certificate certifying the number and class of shares owned by him in the Corporation, which shall be in such form as shall be prescribed by the Board. Certificates shall be numbered and issued in consecutive order and shall be signed by, or in the name of, the Corporation by the Chairman, the President or any Vice President, and by the Treasurer (or an Assistant Treasurer, if appointed) or the Secretary (or an Assistant Secretary, if appointed). In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate had not ceased to be such officer or officers of the Corporation. 6.2 RECORD. - ------------ A record in one or more counterparts shall be kept of the name of the person, firm or corporation owning the shares represented by each certificate for stock of the Corporation issued, the number of shares represented by each such certificate, the date thereof and, in the case of cancellation, the date of cancellation. Except as otherwise expressly required by law, the person in whose name shares of stock stand on the stock record of the Corporation shall be deemed the owner thereof for all purposes regarding the Corporation. 6.3 TRANSFER AND REGISTRATION OF STOCK. - ---------------------------------------- (a) The transfer of stock and certificates which represent the stock of the Corporation shall be governed by Section 17-6425 of the Kansas Statute, as amended from time to time. (b) Registration of transfers of shares of the Corporation shall be made only on the books of the Corporation upon request of the registered holder thereof, or of his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and upon the surrender of the certificate or certificates for such shares properly endorsed or accompanied by a stock power duly executed. 6.4 ADDRESSES OF STOCKHOLDERS. - ------------------------------- Each stockholder shall designate to the Secretary an address at which notices of meetings and all other corporate notices may be served or mailed to him, and, if any stockholder shall fail to designate such address, corporate notices may be served upon him by mail directed to him at his post-office address, if any, as the same appears on the share record books of the Corporation or at his last known post-office address. 6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES. - ------------------------------------------------ The holder of any shares of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause to be issued to him a new certificate or certificates for such shares, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or his legal representative to give the Corporation a bond in such sum and with such surety or sureties as it may direct to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate. 6.6 REGULATIONS. - ----------------- The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of certificates for stock of the Corporation. 6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. - ------------------------------------------------------------- (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall be not more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date for the adjourned meeting. (b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall be not more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by the Kansas Statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in this State, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by the Kansas Statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action. (c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. ARTICLE VII RECORDS ------- 7.1 RECORDS. - ------------- The corporation shall keep at its registered office, or principal place of business, original and duplicate books in which shall be recorded the number of its subscribed shares, in the names of and the number of shares for which payment has been made and by whom, the transfer of its shares with the date of transfer, the amount of its assets and liabilities, the names and places of residence of its officers, and such other or additional records, statements, lists and information as may be required by law. 7.2 INSPECTION OF RECORDS. - --------------------------- A shareholder or director who demands and is entitled to inspect the records of the corporation pursuant to any statutory or other legal right shall be privileged to inspect such records only during the usual and customary hours of business and in a manner that will not unduly interfere with the regular conduct of the business of the corporation. A shareholder or director may delegate his or her right of inspection to an attorney or other agent on the condition, to be enforced at the option of the corporation, that the shareholder/director and attorney/agent agree to furnish to the corporation, promptly when completed, a true and correct copy of every report resulting from the inspection made by the attorney/agent. No shareholder or director shall use, permit to be used, or acquiesce in the use by others of, any information thus obtained to the competitive detriment of the corporation, nor shall he or she furnish or permit to be furnished any information thus obtained to any competitor or prospective competitor of the corporation. As a condition precedent to any shareholder's or director's inspection of the records of the corporation, the corporation may require the shareholder or director to indemnify the corporation against any loss or damage that may be suffered by it arising out of or resulting from any unauthorized disclosure made or permitted to be made by such shareholder or director of information obtained in the course of such inspection. ARTICLE VIII SEAL ---- The Board may provide a corporate seal, which shall be in the form of a circle and shall bear the full name of the Corporation, the year of incorporation of the Corporation and the words and figures "Corporate Seal - Kansas." ARTICLE IX FISCAL YEAR ----------- The fiscal year of the Corporation shall be the calendar year unless otherwise determined by the Board. ARTICLE X INDEMNIFICATION AND INSURANCE ----------------------------- 10.1 INDEMNIFICATION. - --------------------- (a) As provided in the Articles, to the fullest extent permitted by the Kansas Statute as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for breach of fiduciary duty as a director. (b) Without limitation of any right conferred by paragraph (a) of this Section 1, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer or employee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity while serving as a director, officer or employee or in any other capacity while serving as a director, officer or employee, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Kansas Statute, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys' fees, judgments, fines, excise taxes or amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer or employee and shall inure to the benefit of the indemnitee's heirs, testators, intestates, executors and administrators; PROVIDED, HOWEVER, that such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; PROVIDED FURTHER, HOWEVER, that no indemnification shall be made in the case of an action, suit or proceeding by or in the right of the Corporation in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director, officer, employee or agent is liable to the Corporation, unless a court having jurisdiction shall determine that, despite such adjudication, such person is fairly and reasonably entitled to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided in Section 1(c) of this Article X with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) initiated by such indemnitee was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article X shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); PROVIDED, HOWEVER, that, if the Kansas Statute requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise. (c) If a claim under Section (b) of this Article X is not paid in full by the Corporation with 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of any undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in the Kansas Statute. Neither the failure of the Corporation (including the Board, independent legal counsel, or the stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Kansas Statute, nor an actual determination by the Corporation (including the Board, independent legal counsel, or the stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section or otherwise shall be on the Corporation. (d) The rights to indemnification and to the advancement of expenses conferred in this Article X shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Articles, agreement, vote of stockholders or disinterested directors or otherwise. 10.2 INSURANCE. - --------------- The Corporation may purchase and maintain insurance, at its expense, to protect itself and any person who is or was a director, officer, employee or agent of the Corporation or any person who is or was serving at the request of the Corporation as a director, officer, employer or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Kansas Statute. ARTICLE XI AMENDMENT --------- Any by-law (including these By-laws) may be adopted, amended or repealed by the vote of the holders of a majority of the shares then entitled to vote or by the stockholders' written consent pursuant to Section 10 of Article II, or by the vote of the Board or by the directors' written consent pursuant to Section 6 of Article III. * * * * * * * * * ____________________ PACKERWARE CORPORATION Incorporated under the laws of the State of Kansas _____________________ ___________________________ BY-LAWS ___________________________ As adopted on January 21, 1997 PACKERWARE CORPORATION BY-LAWS TABLE OF CONTENTS PAGE ARTICLE I OFFICES.................................................... 1 1.1 Registered Office.......................................... 1 1.2 Other Offices.............................................. 1 ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING................................................. 1 2.1 Annual Meetings............................................ 1 2.2 Special Meetings........................................... 1 2.3 Notice of Meetings......................................... 1 2.4 Quorum..................................................... 2 2.5 Organization............................................... 2 2.6 Order of Business.......................................... 3 2.7 Voting..................................................... 3 2.8 Inspection................................................. 4 2.9 List of Stockholders....................................... 4 2.10 Stockholders' Consent in Lieu of Meeting................... 4 ARTICLE III BOARD OF DIRECTORS....................................... 4 3.1 General Powers............................................. 4 3.2 Number and Term of Office.................................. 5 3.3 Election of Directors...................................... 5 3.4 Resignation, Removal and Vacancies......................... 5 3.5 Meetings................................................... 5 3.6 Directors' Consent in Lieu of Meeting...................... 6 3.7 Action by Means of Conference Telephone or Similar Communications Equipment............................... 6 3.8 Committees................................................. 6 ARTICLE IV OFFICERS.................................................. 7 4.1 Executive Officers......................................... 7 4.2 Authority and Duties....................................... 7 4.3 Other Officers............................................. 7 4.4 Term of Office, Resignation and Removal.................... 7 4.5 Vacancies.................................................. 8 4.6 The Chairman............................................... 8 4.7 The President.............................................. 8 4.8 The Secretary.............................................. 8 4.9 The Treasurer.............................................. 9 ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.............. 9 5.1 Execution of Documents..................................... 9 5.2 Deposits................................................... 9 5.3 Proxies with Respect to Stock or Other Securities of Other Corporations........................................... 9 ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............. 10 6.1 Certificates for Shares.................................... 10 6.2 Record..................................................... 10 6.3 Transfer and Registration of Stock......................... 10 6.4 Addresses of Stockholders.................................. 10 6.5 Lost, Destroyed and Mutilated Certificates................. 11 6.6 Regulations................................................ 11 6.7 Fixing Date for Determination of Stockholders of Record.... 11 ARTICLE VII RECORDS.................................................. 12 7.1 Records.................................................... 12 7.2 Inspection of Records...................................... 12 ARTICLE VIII SEAL.................................................... 13 Article IX Fiscal Year............................................... 13 ARTICLE X INDEMNIFICATION AND INSURANCE.............................. 13 10.1 Indemnification............................................ 13 10.2 Insurance.................................................. 15 ARTICLE XI AMENDMENT................................................. 15 EX-3.17 9 CERTIFICATE OF INCORPORATION OF BERRY DESIGN CERTIFICATE OF INCORPORATION OF BERRY PLASTICS DESIGN CORPORATION ____________________________ ARTICLE FIRST ------------- The name of the corporation (herein called the "Corporation") is BERRY PLASTICS DESIGN CORPORATION. ARTICLE SECOND -------------- The address of the registered office of the Corporation in the State of Delaware is 1013 Centre Road, City of Wilmington, County of New Castle, Delaware, 19805. The name of the registered agent of the Corporation at such address is The Prentice-Hall Corporation System, 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 General Corporation Law of the State of Delaware (the "Delaware Statute"). ARTICLE FOURTH -------------- The total number of shares of all classes of stock which the Corporation has authority to issue is 10,000 shares, all of which are shares of Common Stock, par value $.01 per share. ARTICLE FIFTH ------------- The name and mailing address of the incorporator are as follows:
NAME MAILING ADDRESS - ---- --------------- Michael S. Hubner c/o O'Sullivan Graev & Karabell, LLP 30 Rockefeller Plaza 41st Floor New York, New York 10112
ARTICLE SIXTH ------------- 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 for liability (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 Statute, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware Statute 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 Statute, as so amended. 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 -------------- Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/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, and/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, and/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, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. -1- IN WITNESS WHEREOF, I, the undersigned, being the sole incorporator hereinabove named, for the purpose of forming a corporation pursuant to the Delaware Statute, DO HEREBY CERTIFY, under penalties of perjury, that this is my act and deed and that the facts hereinabove stated are truly set forth and, accordingly, I have hereunto set my hand as of the 2nd day of May, 1997. _________________________________ Michael S. Hubner -2- EX-3.18 10 BY-LAWS OF BERRY DESIGN BY-LAWS OF BERRY PLASTICS DESIGN CORPORATION ARTICLE I OFFICES ------- 1.1 REGISTERED OFFICE. - ----------------------- The registered office of Berry Plastics Design Corporation (the "Corporation"), in the State of Delaware shall be at 32 Loockerman Square, Suite L-100, City of Dover, County of Kent, Delaware 19904, and the registered agent in charge thereof shall be The Prentice-Hall Corporation System. 1.2 OTHER OFFICES. - ------------------- The Corporation may also have an office or offices at any other place or places within or outside the State of Delaware. ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING -------------------------- 2.1 ANNUAL MEETINGS. - --------------------- The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (the "Board") and designated in the notice or waiver of notice thereof, except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware (the "Delaware Statute") to be taken at a stockholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 10 of this Article II. 2.2 SPECIAL MEETINGS. - ---------------------- A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman, the President or the record holders of at least a majority of the issued and outstanding shares of Common Stock of the Corporation, to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof. 2.3 NOTICE OF MEETINGS. - ------------------------ Except as otherwise required by statute, the Certificate of Incorporation of the Corporation (the "Certificate") or these By-laws, notice of each annual or special meeting of the stockholders shall be given to each stockholder of record entitled to vote at such meeting not less than 10 nor more than 60 days before the day on which the meeting is to be held, by delivering written notice thereof to him personally, or by mailing a copy of such notice, postage prepaid, directly to him at his address as it appears in the records of the Corporation, or by transmitting such notice thereof to him at such address by telegraph, cable or other telephonic transmission. Every such notice shall state the place, the date and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy, or who shall, in person or by attorney thereunto authorized, waive such notice in writing, either before or after such meeting. Except as otherwise provided in these By-laws, neither the business to be transacted at, nor the purpose of, any meeting of the stockholders need be specified in any such notice or waiver of notice. Notice of any adjourned meeting of stockholders shall not be required to be given, except when expressly required by law. 2.4 QUORUM. - ------------ At each meeting of the stockholders, except where otherwise provided by the Certificate or these By-laws, the holders of a majority of the issued and outstanding shares of Common Stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. In the absence of a quorum, a majority in interest of the stockholders present in person or represented by proxy and entitled to vote, or, in the absence of all the stockholders entitled to vote, any officer entitled to preside at, or act as secretary of, such meeting, shall have the power to adjourn the meeting from time to time, until stockholders holding the requisite amount of stock to constitute a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called. 2.5 ORGANIZATION. - ------------------ (a) Unless otherwise determined by the Board, at each meeting of the stockholders, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President; (iii) any director, officer or stockholder of the Corporation designated by the Board to act as chairman of such meeting and to preside thereat if the Chairman or the President shall be absent from such meeting; or (iv) a stockholder of record who shall be chosen chairman of such meeting by a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat. (b) The Secretary or, if he shall be presiding over such meeting in accordance with the provisions of this Section 5 or if he shall be absent from such meeting, the person (who shall be an Assistant Secretary, if an Assistant Secretary has been appointed and is present) whom the chairman of such meeting shall appoint, shall act as secretary of such meeting and keep the minutes thereof. 2.6 ORDER OF BUSINESS. - ----------------------- The order of business at each meeting of the stockholders shall be determined by the chairman of such meeting, but such order of business may be changed by a majority in voting interest of those present in person or by proxy at such meeting and entitled to vote thereat. 2.7 VOTING. - ------------ Except as otherwise provided by law, the Certificate or these By- laws, at each meeting of the stockholders, every stockholder of the Corporation shall be entitled to one vote in person or by proxy for each share of Common Stock of the Corporation held by him and registered in his name on the books of the Corporation on the date fixed pursuant to Section 7 of Article VI as the record date for the determination of stockholders entitled to vote at such meeting. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. A person whose stock is pledged shall be entitled to vote, unless, in the transfer by the pledgor on the books of the Corporation, he has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his proxy may represent such stock and vote thereon. If shares or other securities having voting power stand in the record of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary shall be given written notice to the contrary and furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one votes, his act binds all; (b) if more than one votes, the act of the majority so voting binds all; and (c) if more than one votes, but the vote is evenly split on any particular matter, such shares shall be voted in the manner provided by law. If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or even-split for the purposes of this Section 7 shall be a majority or even-split in interest. The Corporation shall not vote directly or indirectly any share of its own capital stock. Any vote of stock may be given by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, delivered to the secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted after three years from its date, unless said proxy provides for a longer period. At all meetings of the stockholders, all matters (except where other provision is made by law, the Certificate or these By-laws) shall be decided by the vote of a majority in interest of the stockholders present in person or by proxy at such meeting and entitled to vote thereon, a quorum being present. Unless demanded by a stockholder present in person or by proxy at any meeting and entitled to vote thereon, the vote on any question need not be by ballot. Upon a demand by any such stockholder for a vote by ballot upon any question, such vote by ballot shall be taken. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted. 2.8 INSPECTION. - ---------------- The chairman of the meeting may at any time appoint one or more inspectors to serve at any meeting of the stockholders. Any inspector may be removed, and a new inspector or inspectors appointed, by the Board at any time. Such inspectors shall decide upon the qualifications of voters, accept and count votes, declare the results of such vote, and subscribe and deliver to the secretary of the meeting a certificate stating the number of shares of stock issued and outstanding and entitled to vote thereon and the number of shares voted for and against the question, respectively. The inspectors need not be stockholders of the Corporation, and any director or officer of the Corporation may be an inspector on any question other than a vote for or against his election to any position with the Corporation or on any other matter in which he may be directly interested. Before acting as herein provided, each inspector shall subscribe an oath faithfully to execute the duties of an inspector with strict impartiality and according to the best of his ability. 2.9 LIST OF STOCKHOLDERS. - -------------------------- It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of its stock ledger to prepare and make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to any such meeting, during ordinary business hours, for a period of at least 10 days prior to such meeting, either at a place within the city where such meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING. - ---------------------------------------------- Any action required by the Delaware Statute to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, by a consent in writing, as permitted by the Delaware Statute. ARTICLE III BOARD OF DIRECTORS ------------------ 3.1 GENERAL POWERS. - -------------------- The business, property and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate directed or required to be exercised or done by the stockholders. 3.2 NUMBER AND TERM OF OFFICE. - ------------------------------- The number of directors shall be fixed from time to time by the Board. Directors need not be stockholders. Each director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided. 3.3 ELECTION OF DIRECTORS. - --------------------------- At each meeting of the stockholders for the election of directors at which a quorum is present, the persons receiving the greatest number of votes, up to the number of directors to be elected, of the stockholders present in person or by proxy and entitled to vote thereon shall be the directors; PROVIDED, HOWEVER, that for purposes of such vote no stockholder shall be allowed to cumulate his votes. Unless an election by ballot shall be demanded as provided in Section 7 of Article II, election of directors may be conducted in any manner approved at such meeting. 3.4 RESIGNATION, REMOVAL AND VACANCIES. - ---------------------------------------- (a) Any director may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. (b) Any director or the entire Board may be removed, with or without cause, at any time by vote of the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the stockholders pursuant to Section 10 of Article II. (c) Vacancies occurring on the Board for any reason may be filled by vote of the stockholders or by the stockholders' written consent pursuant to Section 10 of Article II, or by vote of the Board or by the directors' written consent pursuant to Section 6 of this Article III. If the number of directors then in office is less than a quorum, such vacancies may be filled by a vote of a majority of the directors then in office. 3.5 MEETINGS. - -------------- (A) ANNUAL MEETINGS. As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article III. (B) OTHER MEETINGS. Other meetings of the Board shall be held at such times and places as the Board, the Chairman, the President or any director shall from time to time determine. (C) NOTICE OF MEETINGS. Notice shall be given to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the date on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held, but notice need not be given to any director who shall attend such meeting. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. (D) PLACE OF MEETINGS. The Board may hold its meetings at such place or places within or outside the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. (E) QUORUM AND MANNER OF ACTING. A majority of the total number of directors then in office shall be present in person at any meeting of the Board in order to constitute a quorum for the transaction of business at such meeting, and the vote of a majority of those directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or act of the Board, except as otherwise expressly required by law or these By-laws. In the absence of a quorum for any such meeting, a majority of the directors present thereat may adjourn such meeting from time to time until a quorum shall be present. (F) ORGANIZATION. At each meeting of the Board, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President (if a director); or (iii) any director designated by a majority of the directors present. The Secretary or, in the case of his absence, an Assistant Secretary, if an Assistant Secretary has been appointed and is present, or any person whom the chairman of the meeting shall appoint shall act as secretary of such meeting and keep the minutes thereof. 3.6 DIRECTORS' CONSENT IN LIEU OF MEETING. - ------------------------------------------- Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the directors then in office and such consent is filed with the minutes of the proceedings of the Board. 3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. - ---------------------------------------------------------------------- Any one or more members of the Board may participate in a meeting of the Board by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. 3.8 COMMITTEES. - ---------------- The Board may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more directors of the Corporation, which to the extent provided in said resolution or resolutions shall have and may exercise the powers of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it, such committee or committees to have such name or names as may be determined from time to time by resolution adopted by the Board. A majority of all the members of any such committee may determine its action and fix the time and place of its meetings, unless the Board shall otherwise provide. The Board shall have power to change the members of any such committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time. ARTICLE IV OFFICERS -------- 4.1 EXECUTIVE OFFICERS. - ------------------------ The principal officers of the Corporation shall be a President, a Secretary, and a Treasurer, and may include such other officers as the Board may appoint pursuant to Section 3 of this Article IV. Any two or more offices may be held by the same person. 4.2 AUTHORITY AND DUTIES. - -------------------------- All officers, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-laws or, to the extent so provided, by the Board. 4.3 OTHER OFFICERS. - -------------------- The Corporation may have such other officers, agents and employees as the Board may deem necessary, including one or more Assistant Secretaries, one or more Assistant Treasurers and one or more Vice Presidents, each of whom shall hold office for such period, have such authority, and perform such duties as the Board, the Chairman, or the President may from time to time determine. The Board may delegate to any principal officer the power to appoint and define the authority and duties of, or remove, any such officers, agents, or employees. 4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL. - --------------------------------------------- (a) All officers shall be elected or appointed by the Board and shall hold office for such term as may be prescribed by the Board. Each officer shall hold office until his successor has been elected or appointed and qualified or until his earlier death or resignation or removal in the manner hereinafter provided. The Board may require any officer to give security for the faithful performance of his duties. (b) Any officer may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, at the time it is accepted by action of the Board. Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective. (c) All officers and agents elected or appointed by the Board shall be subject to removal at any time by the Board or by the stockholders of the Corporation with or without cause. 4.5 VACANCIES. - --------------- If the office of President, Secretary or Treasurer becomes vacant for any reason, the Board shall fill such vacancy, and if any other office becomes vacant, the Board may fill such vacancy. Any officer so appointed or elected by the Board shall serve only until such time as the unexpired term of his predecessor shall have expired, unless reelected or reappointed by the Board. 4.6 THE PRESIDENT. - ------------------- The President shall be the chief executive officer of the Corporation. The President shall have general and active management and control of the business and affairs of the Corporation subject to the control of the Board and shall see that all orders and resolutions of the Board are carried into effect. The President shall from time to time make such reports of the affairs of the Corporation as the Board of Directors may require and shall perform such other duties as the Board may from time to time determine. 4.7 THE SECRETARY. - ------------------- The Secretary shall, to the extent practicable, attend all meetings of the Board and all meetings of the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose. He may give, or cause to be given, notice of all meetings of the stockholders and of the Board, and shall perform such other duties as may be prescribed by the Board, the Chairman or the President, under whose supervision he shall act. He shall keep in safe custody the seal of the Corporation and affix the same to any duly authorized instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or, if appointed, an Assistant Secretary or an Assistant Treasurer. He shall keep in safe custody the certificate books and stockholder records and such other books and records as the Board may direct, and shall perform all other duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. 4.8 THE TREASURER. - ------------------- The Treasurer shall have the care and custody of the corporate funds and other valuable effects, including securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, shall render to the Chairman, President and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation and shall perform all other duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. ---------------------------------------------- 5.1 EXECUTION OF DOCUMENTS. - ---------------------------- The Board shall designate, by either specific or general resolution, the officers, employees and agents of the Corporation who shall have the power to execute and deliver deeds, contracts, mortgages, bonds, debentures, checks, drafts and other orders for the payment of money and other documents for and in the name of the Corporation, and may authorize such officers, employees and agents to delegate such power (including authority to redelegate) by written instrument to other officers, employees or agents of the Corporation; unless so designated or expressly authorized by these By-laws, no officer, employee or agent shall have any power or authority to bind the Corporation by any contract or engagement, to pledge its credit or to render it liable pecuniarily for any purpose or amount. 5.2 DEPOSITS. - -------------- All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or Treasurer, or any other officer of the Corporation to whom power in this respect shall have been given by the Board, shall select. 5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS. - ---------------------------------------------------------------- The Board shall designate the officers of the Corporation who shall have authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of stock or other securities in any other corporation, and to vote or consent with respect to such stock or securities. Such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights, and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, such written proxies, powers of attorney or other instruments as they may deem necessary or proper in order that the Corporation may exercise its powers and rights. ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE --------------------------------------------- 6.1 CERTIFICATES FOR SHARES. - ----------------------------- Every owner of stock of the Corporation shall be entitled to have a certificate certifying the number and class of shares owned by him in the Corporation, which shall be in such form as shall be prescribed by the Board. Certificates shall be numbered and issued in consecutive order and shall be signed by, or in the name of, the Corporation by the Chairman, the President or any Vice President, and by the Treasurer (or an Assistant Treasurer, if appointed) or the Secretary (or an Assistant Secretary, if appointed). In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate had not ceased to be such officer or officers of the Corporation. 6.2 RECORD. - ------------ A record in one or more counterparts shall be kept of the name of the person, firm or corporation owning the shares represented by each certificate for stock of the Corporation issued, the number of shares represented by each such certificate, the date thereof and, in the case of cancellation, the date of cancellation. Except as otherwise expressly required by law, the person in whose name shares of stock stand on the stock record of the Corporation shall be deemed the owner thereof for all purposes regarding the Corporation. 6.3 TRANSFER AND REGISTRATION OF STOCK. - ---------------------------------------- (a) The transfer of stock and certificates which represent the stock of the Corporation shall be governed by Article 8 of Subtitle 1 of Title 6 of the Delaware Code (the Uniform Commercial Code), as amended from time to time. (b) Registration of transfers of shares of the Corporation shall be made only on the books of the Corporation upon request of the registered holder thereof, or of his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and upon the surrender of the certificate or certificates for such shares properly endorsed or accompanied by a stock power duly executed. 6.4 ADDRESSES OF STOCKHOLDERS. - ------------------------------- Each stockholder shall designate to the Secretary an address at which notices of meetings and all other corporate notices may be served or mailed to him, and, if any stockholder shall fail to designate such address, corporate notices may be served upon him by mail directed to him at his post-office address, if any, as the same appears on the share record books of the Corporation or at his last known post-office address. 6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES. - ------------------------------------------------ The holder of any shares of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause to be issued to him a new certificate or certificates for such shares, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or his legal representative to give the Corporation a bond in such sum and with such surety or sureties as it may direct to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate. 6.6 REGULATIONS. - ----------------- The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of certificates for stock of the Corporation. 6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. - ------------------------------------------------------------- (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall be not more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date for the adjourned meeting. (b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall be not more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by the Delaware Statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in this State, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by the Delaware Statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action. (c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. ARTICLE VII SEAL ---- The Board may provide a corporate seal, which shall be in the form of a circle and shall bear the full name of the Corporation, the year of incorporation of the Corporation and the words and figures "Corporate Seal - Delaware." ARTICLE VIII FISCAL YEAR ----------- The fiscal year of the Corporation shall be the calendar year unless otherwise determined by the Board. ARTICLE IX INDEMNIFICATION AND INSURANCE ----------------------------- 9.1 Indemnification. - --------------------- (a) As provided in the Charter, to the fullest extent permitted by the Delaware Statute as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for breach of fiduciary duty as a director. (b) Without limitation of any right conferred by paragraph (a) of this Section 1, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer or employee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity while serving as a director, officer or employee or in any other capacity while serving as a director, officer or employee, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware Statute, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys' fees, judgments, fines, excise taxes or amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer or employee and shall inure to the benefit of the indemnitee's heirs, testators, intestates, executors and administrators; PROVIDED, HOWEVER, that such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; PROVIDED FURTHER, HOWEVER, that no indemnification shall be made in the case of an action, suit or proceeding by or in the right of the Corporation in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director, officer, employee or agent is liable to the Corporation, unless a court having jurisdiction shall determine that, despite such adjudication, such person is fairly and reasonably entitled to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided in Section 1(c) of this Article IX with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) initiated by such indemnitee was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article IX shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); PROVIDED, HOWEVER, that, if the Delaware Statute requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise. (c) If a claim under Section (b) of this Article IX is not paid in full by the Corporation with 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of any undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in the Delaware Statute. Neither the failure of the Corporation (including the Board, independent legal counsel, or the stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware Statute, nor an actual determination by the Corporation (including the Board, independent legal counsel, or the stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section or otherwise shall be on the Corporation. (d) The rights to indemnification and to the advancement of expenses conferred in this Article IX shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Charter, agreement, vote of stockholders or disinterested directors or otherwise. 9.2 INSURANCE. - --------------- The Corporation may purchase and maintain insurance, at its expense, to protect itself and any person who is or was a director, officer, employee or agent of the Corporation or any person who is or was serving at the request of the Corporation as a director, officer, employer or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware Statute. ARTICLE X AMENDMENT --------- Any by-law (including these By-laws) may be adopted, amended or repealed by the vote of the holders of a majority of the shares then entitled to vote or by the stockholders' written consent pursuant to Section 10 of Article II, or by the vote of the Board or by the directors' written consent pursuant to Section 6 of Article III. * * * * * * * * * ____________________ BERRY PLASTICS DESIGN CORPORATION INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE _____________________ ___________________________ BY-LAWS ___________________________ As adopted on May 2, 1997 BERRY PLASTICS DESIGN CORPORATION BY-LAWS TABLE OF CONTENTS PAGE 1.1 Registered Office......................................... 1 1.2 Other Offices............................................. 1 ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING................................................ 1 2.1 Annual Meetings........................................... 1 2.2 Special Meetings.......................................... 1 2.3 Notice of Meetings........................................ 1 2.4 Quorum.................................................... 2 2.5 Organization.............................................. 2 2.6 Order of Business......................................... 3 2.7 Voting.................................................... 3 2.8 Inspection................................................ 4 2.9 List of Stockholders...................................... 4 2.10 Stockholders' Consent in Lieu of Meeting.................. 4 ARTICLE III BOARD OF DIRECTORS...................................... 5 3.1 General Powers............................................ 5 3.2 Number and Term of Office................................. 5 3.3 Election of Directors..................................... 5 3.4 Resignation, Removal and Vacancies........................ 5 3.5 Meetings.................................................. 5 3.6 Directors' Consent in Lieu of Meeting..................... 6 3.7 Action by Means of Conference Telephone or Similar Communications Equipment............................... 7 3.8 Committees................................................ 7 ARTICLE IV OFFICERS................................................. 7 4.1 Executive Officers........................................ 7 4.2 Authority and Duties...................................... 7 4.3 Other Officers............................................ 7 4.4 Term of Office, Resignation and Removal................... 8 4.5 Vacancies................................................. 8 4.6 The President............................................. 8 4.7 The Secretary............................................. 8 4.8 The Treasurer............................................. 9 ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC............. 9 5.1 Execution of Documents.................................... 9 5.2 Deposits.................................................. 9 5.3 Proxies with Respect to Stock or Other Securities of Other Corporations........................................... 9 ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............ 10 6.1 Certificates for Shares................................... 10 6.2 Record.................................................... 10 6.3 Transfer and Registration of Stock........................ 10 6.4 Addresses of Stockholders................................. 11 6.5 Lost, Destroyed and Mutilated Certificates................ 11 6.6 Regulations............................................... 11 6.7 Fixing Date for Determination of Stockholders of Record... 11 ARTICLE VII SEAL.................................................... 12 Article VIII Fiscal Year............................................ 12 ARTICLE IX INDEMNIFICATION AND INSURANCE............................ 12 9.1 Indemnification........................................... 12 9.2 Insurance................................................. 14 ARTICLE X AMENDMENT................................................. 14 EX-3.19 11 CERTIFICATE OF INCORPORATION OF VENTURE PACKAGING AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF VENTURE PACKAGING, INC. (A DELAWARE CORPORATION) Pursuant to Section 103, Section 242 and Section 245 of the General Corporation Law of the State of Delaware Venture Packaging, Inc., a Delaware corporation (the "Corporation"), does hereby certify that: FIRST: The present name of the Corporation is "Venture Packaging, Inc." which is the name under which the Corporation was originally incorporated. The date of filing of the original Certificate of Incorporation of the Corporation with the Secretary of State of the State of Delaware was August 3, 1995. SECOND: This Amended and Restated Certificate of Incorporation (the "Certificate") amends and restates in its entirety the present Certificate of Incorporation of the Corporation. This Certificate has been duly adopted and approved by the Board of Directors of the Corporation by unanimous written consent in lieu of a meeting thereof in accordance with the provisions of Sections 141(f), 242 and 245 of the General Corporation Law of the State of Delaware and by the Stockholders of the Corporation by written consent in lieu of a meeting thereof in accordance with the provisions of Sections 228(a), 242 and 245 of the General Corporation Law of the State of Delaware. THIRD: This Certificate shall become effective immediately upon its filing with the Secretary of State of the State of Delaware. FOURTH: Upon the filing with the Secretary of State of the State of Delaware of this Certificate, the Certificate of Incorporation of the Corporation shall be amended and restated in its entirety to read as set forth below: ARTICLE I The name of the corporation (hereinafter, the "CORPORATION") is Venture Packaging, Inc. ARTICLE II 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 III HREE The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "GENERAL CORPORATION LAW"). ARTICLE IV The total number of shares of all classes of stock which the Corporation has authority to issue is 1000 shares, all of which are shares of Common Stock, par value $.01 per share. ARTICLE V Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/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, and/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, and/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, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. ARTICLE VI 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 for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the 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 General Corporation Law, as so amended. 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 VII The number of directors of the Corporation shall be as set forth 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 VIII In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the board of directors of the Corporation is expressly authorized and empowered 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. ARTICLE IX The Corporation is to have perpetual existence. ARTICLE X Meetings of stockholders may be held within or without the State of Delaware, as the By-laws may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the By-laws of the Corporation. ARTICLE XI The Corporation elects not to be governed by Section 203 of the General Corporation Law. ARTICLE XII The Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders are granted subject to this reservation. * * * * -1- IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed by a duly authorized officer this ____ day of August, 1997 and hereby affirms that the facts stated herein are true. VENTURE PACKAGING, INC. __________________________________________ Name: James M. Kratochvil Title: Vice President and Chief inancial Officer -2- EX-3.20 12 BY-LAWS OF VENTURE PACKAGING BYLAWS OF VENTURE PACKAGING, INC. Set forth below are the Bylaws of Venture Packaging, Inc., a Delaware corporation (the "Corporation"), as adopted by the Board of Directors of the Corporation effective as of August 7, 1995. ARTICLE I OFFICES ------- SECTION 1. REGISTERED OFFICE. The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. SECTION 2. OTHER OFFICES. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II MEETINGS OF STOCKHOLDERS ------------------------ SECTION 1. PLACE OF MEETINGS. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Ohio, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. SECTION 2. ANNUAL MEETINGS. The Annual Meetings of Stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Written notice of the Annual Meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. SECTION 3. SPECIAL MEETING. Special Meetings of Stockholders shall be called as provided for by the Certificate of Incorporation. Written notice of a Special Meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. Business transacted at all special meetings shall be confined to the objects stated in the call. SECTION 4. QUORUM. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or presented at any meeting of the stockholders, the stockholders entitled to vote thereof, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting. SECTION 5. VOTING. Unless otherwise required by law, the Certificate of Incorporation or these Bylaws (i) any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat and (ii) each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot. SECTION 6. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present. SECTION 7. STOCK LEDGER. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 6 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders. SECTION 8. NOTICE OF BUSINESS. At any annual meeting of stockholders, only such business shall be conducted as shall have been (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or to the direction of the Board of Directors, or (c) otherwise properly brought before the annual meeting by a stockholder who is a stockholder of record at the time of the giving of the notice provided for in this Section 8 of this Article II and who shall be entitled to vote at such meeting. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the meeting; PROVIDED, HOWEVER, that in the event that less than 70 days' notice or prior public disclosure of the date of the-meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made, whichever first occurs. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the reasons for conducting such business at the meeting, (iii) the name and record address of the stockholder proposing such business, (iv) the class or series and number of shares of the Corporation which are owned beneficially or of record by the stockholder and (v) a description of all arrangements or understandings between the stockholder and any other person or persons (including their names) in connection with the proposal of such business by the stockholder and any material interest of the stockholder in such business, and (vi) a representation that the stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section 8 of this Article II; PROVIDED, HOWEVER, that nothing in this Section 8 of this Article II shall be deemed to preclude discussion by any stockholder of any business properly brought before the annual meeting in accordance with said procedure. The officer of the Corporation presiding at the annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 8 of this Article II, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 8 of this Article II, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section 8 of this Article II. ARTICLE III DIRECTORS --------- SECTION 1. NUMBER OF DIRECTORS. In the absence of the Board of Directors setting a different number, the number of directors shall be three (3). No decrease in the number of directors shall shorten the term of any incumbent director. SECTION 2. NOMINATION OF DIRECTORS. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors. Nominations of persons for election to the Board of Directors at the annual meeting may be made at a meeting of stockholders by or at the direction of the Board of Directors by any nominating committee or person appointed by the Board of Directors or by any stockholder of the Corporation entitled to vote for the election of Directors at the meeting who complies with the notice procedures set forth in this Article III. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Such stockholder's notice to the Secretary shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person, (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Rule 14a under the Securities Exchange Act of 1934, as amended, and (v) the consent of the person to serve as a director of the Corporation, if so elected; and (b) as to the stockholder giving the notice (i) the name and record address of stockholder, (ii) the class or series and number of shares of capital stock of the Corporation which are beneficially owned by the stockholder, (iii) a description of all arrangements or understandings between the stockholder and each proposed nominee and any other person pursuant to which the nominations are to be made, (iv) a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the persons named and (v) certain other information. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as director of the Corporation. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth herein. The officer of the Corporation presiding at the meeting shall, if the fact warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. SECTION 3. DUTIES AND POWERS. The business of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders. SECTION 4. MEETINGS. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without Notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, if there be one, the President or by a majority of the Board of Directors. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances. SECTION 5. QUORUM. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Director, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. SECTION 6. ACTIONS OF THE BOARD. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. SECTION 7. MEETINGS BY MEANS OF CONFERENCE TELEPHONE. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, members of the Board of Directors of the Corporation, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to these Section 7 of Article III shall constitute presence in person at such meeting. SECTION 8. COMMITTEES. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent allowed by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation. Each committee shall keep regular minutes and report to the Board of Directors when required. SECTION 9. COMPENSATION. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at such meeting of the Board of Directors and/or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. SECTION 10. INTERESTED DIRECTORS. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or violable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose if (i) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum, (ii) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholder entitled to vote thereon, and to the contract or transaction is specifically approved in good faith by a vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. ARTICLE IV OFFICERS -------- SECTION 1. GENERAL. The officers of the Corporation shall be chosen by the Board of Directors and shall be a President, a Secretary and a Treasurer. The Board of Directors, in its discretion, may also choose a Chairman of the Board of Directors (who must be a director) and one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation. SECTION 2. ELECTION. The Board of Directors at its first meeting held after such Annual Meeting of Stockholders shall elect the officers of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Any officer elected by the Board of Directors must be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. SECTION 3. VOTING SECURITIES OWNED BY THE CORPORATION. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President and any such officer may, in the name of and on behalf of the Corporation, take all such actions as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons. SECTION 4. CHAIRMAN. The Chairman, if present, shall preside at all meetings of the stockholders and of the Board of Directors. He shall be the chief executive officer of the Corporation, and as such, shall have general supervision and direction of the business and affairs of the Corporation, subject to the control of the Board of Directors and shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-laws or by the Board of Directors. SECTION 5. PRESIDENT. The President shall be the chief operating officer of the Corporation. In the absence or disability of the Chairman, or if there be none, the President shall preside at all meetings of the stockholders and the Board of Directors. If there be no Chairman, the President shall be the chief executive officer of the Corporation. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-laws, the Chairman or by the Board of Directors. SECTION 6. VICE PRESIDENT. At the request of the President or in his absence or in the event of his inability or refusal to act (and if there be no Chairman of the Board of Directors), the Vice President or the Vice Presidents if there is more than one (in the order designated by the Board of Directors) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Chairman of the Board of Directors from time to time may prescribe. If there be no Chairman and no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all powers of and be subject to the restrictions upon the President. SECTION 7. SECRETARY. The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties of the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Chairman or the Board of Directors, under whose supervision he shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Chairman or the Board of Directors may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be. SECTION 8. TREASURER. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and either valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chairman and the Board of Directors, at its regular meetings, or when the Chairman or the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. SECTION 9. ASSISTANT SECRETARIES. Except as may be otherwise provided in these By-laws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Chairman, the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of his disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary. SECTION 10. ASSISTANT TREASURERS. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Chairman, the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. SECTION 11. OTHER OFFICERS. Such other officers as the Board of Directors may choose shall perform such duties and have such powers from time to time may be assigned to them by the Chairman or the Board of Directors, as the case may be. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers. ARTICLE V STOCK ----- SECTION 1. FORM OF CERTIFICATES. Every holder of stock in the Corporation shall be entitled to have a certificate signed, in the name of the Corporation (i) by the Chairman of the Board of Directors, the President or a Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. SECTION 2. SIGNATURES. Where a certificate is countersigned by (i) a transfer agent other than the Corporation or its employee, or (ii) a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. SECTION 3. LOST CERTIFICATES. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. SECTION 4. TRANSFERS. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be canceled before a new certificate shall be issued. SECTION 5. RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. SECTION 6. BENEFICIAL OWNERS. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. ARTICLE VI NOTICES ------- SECTION 1. NOTICES. Whenever written notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by electronic facsimile, or telegram, telex or cable. SECTION 2. WAIVERS OF NOTICE. Whenever any notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed, by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE VII GENERAL PROVISIONS ------------------ SECTION 1. DIVIDENDS. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, and may be paid in cash, in property, or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve. SECTION 2. DISBURSEMENTS. All checks or demands for money and notes of the Corporation shall be signed by each officer or officers or such other person or persons as the Board of Directors may from time to time designate. SECTION 3. FISCAL YEAR. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. SECTION 4. CORPORATE SEAL. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. SECTION 5. CONSISTENCY WITH CERTIFICATE OF INCORPORATION AND SHARE RESTRICTION AGREEMENT. If any provision of these Bylaws shall be inconsistent with the Certificate of Incorporation as in effect at the time of the adoption of these Bylaws or as amended from time to time, the Certificate of Incorporation, as in effect at the time, shall govern and control. If any provision of these Bylaws shall be inconsistent with the Share Restriction Agreement (the "Stockholder Agreement") made and entered into as of August 7, 1995 among the Corporation and the shareholders of the Corporation, a copy of which is on file with the Secretary of the Corporation, the Stockholder Agreement, as in effect at the time, shall govern and control. ARTICLE VIII INDEMNIFICATION --------------- SECTION 1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 3 of this Article VIII, the Corporation shall indemnify each director and any officer or other person that the Board of Directors shall designate from time to time who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner in which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. SECTION 2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 3 of this Article VIII, the Corporation shall indemnify each director and any officer or other person that the Board of Directors shall designate from time to time who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. SECTION 3. AUTHORIZATION OF INDEMNIFICATION. Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer or other person is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) by the stockholders. To the extent, however, that a director or officer of the Corporation has been successful in the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case. SECTION 4. GOOD FAITH DEFINED. For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to him by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selection with reasonable care by the Corporation or another enterprise. The term "another enterprise" as used in this Section 4 of this Article VIII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 4 of this Article VIII shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. SECTION 5. INDEMNIFICATION BY A COURT. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VIII. The basis of such indemnification by a court shall be a determination of such court that indemnification of the director or officer is proper in the circumstances because he has met the applicable standards of conduct as set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 of this Article VIII shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application. SECTION 6. EXPENSES PAYABLE IN ADVANCE. Expenses incurred by a director or officer in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VIII. SECTION 7. NONEXCLUSIVELY OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The indemnification and advancement of expenses provided by or granted pursuant to this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any Bylaw, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, but as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 or 2 of this Article VIII shall be made to the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or Section 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the General Corporation Law of the State of Delaware, or otherwise. SECTION 8. INSURANCE. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VIII. SECTION 9. CERTAIN DEFINITIONS. For purposes of this Article VIII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors and officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such indemnification relates to his acts while serving in any of the foregoing capacities, of such constituent corporation, as he would have with respect to such constituent corporation if this separate existence had continued. For purposes of this Article VIII, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director or officer of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article VIII. SECTION 10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. Any repeal or modification of this Article VIII by the stockholders of the Corporation shall not adversely affect any rights to indemnification and advancement of expenses existing pursuant to this Article VIII with respect to any acts or omissions occurring prior to such repeal or modification. SECTION 11. LIMITATION ON INDEMNIFICATION. Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 of this Article VIII), the Corporation shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation. EX-3.21 13 ARTICLES OF INCORPORATION OF VENTURE MIDWEST ARTICLES OF INCORPORATION OF VENTURE PACKAGING MIDWEST, INC. The undersigned, desiring to form a corporation for profit (the "Corporation") in accordance with Chapter 1701 of the OHIO REVISED CODE, as amended (the "ORC"), hereby states as follows: 1. NAME. The name of the Corporation is Venture Packaging ---- Midwest, Inc. 2. PRINCIPAL OFFICE. The place in the State of Ohio where the ----------------- principal office of the Corporation is to be located is Monroeville, Huron County, Ohio. 3. PURPOSE. The purpose for which the Corporation is formed -------- is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 to 1701.98, inclusive, of the ORC. 4. AUTHORIZED SHARES. The number of shares that the ------------------ Corporation is authorized to have outstanding is Eight Hundred Fifty (850), all of which shall be shares of Common Stock, without par value. 5. PREEMPTIVE RIGHTS. No holder of shares of the Corporation ------------------ shall have any preemptive right to subscribe for or to purchase any shares of the Corporation of any class whether now or hereafter authorized. IN WITNESS WHEREOF, the undersigned has set his hand this 9th day of August, 1995. ____________________________________ Timothy J. Rathbun, Incorporator -1- EX-3.22 14 CODE OF REGULATIONS OF VENTURE MIDWEST CODE OF REGULATIONS OF VENTURE PACKAGING MIDWEST, INC. Set forth below is the Code of Regulations (the "Regulations") of Venture Packaging Midwest, Inc., an Ohio corporation (the "Company"), for the government of the Company, the conduct of its affairs and the management of its properties, as adopted by the shareholders of the Company effective as of August 10, 1995. ARTICLE I OFFICES ------- 1.1 PRINCIPAL OFFICE. - ---------------------- The principal office of the Company shall be at such place in the City of Monroeville, Huron County, Ohio, as may be designated from time to time by the Board of Directors of the Company (the "Board"). 1.2 OTHER OFFICES. - ------------------- The Company shall also have offices at such other places within, as well as without, the State of Ohio as the Board may from time to time determine. ARTICLE II MEETINGS OF SHAREHOLDERS ------------------------ 2.1 ANNUAL MEETING. - -------------------- The annual meeting of the shareholders of the Company for the purpose of fixing or changing the number of directors of the Company, electing directors, considering financial statements and other reports and transacting such other business as may properly come before the meeting shall be held at such time as determined by the Board in each year, but in no event later than six (6) months after the close of a fiscal year in each year, beginning with the fiscal year of the Company ending in 1994. Upon due notice, there may also be considered and acted upon at the annual meeting of the shareholders of the Company any matter which may properly be considered and acted upon at a special meeting of the shareholders of the Company, in which case and for which purpose the annual meeting of the shareholders of the Company shall also be considered as, and shall be, a special meeting of the shareholders of the Company. If the annual meeting of the shareholders of the Company is not held or if directors of the Company are not elected thereat, a special meeting of the shareholders may be called and held for that purpose. 2.2 SPECIAL MEETINGS. - ---------------------- Special meetings of the shareholders of the Company may be called at any time by (i) the Chairman of the Board or President of the Company, (ii) a majority of the Board acting with or without a meeting or (iii) the holder or holders of at least twenty percent (20%) of all the shares of the Company outstanding and entitled to vote thereat. 2.3 PLACE OF MEETINGS. - ----------------------- Meetings of the shareholders of the Company shall be held at the principal office of the Company in the City of Monroeville, Ohio, unless the Board decides that a meeting shall be held at some other place within or without the State of Ohio and causes the notice thereof to so state. 2.4 NOTICE OF MEETINGS. - ------------------------ Unless waived, a written, printed or typewritten notice of the hour, day, place and purpose or purposes of any meeting of shareholders of the Company shall be given to each shareholder entitled thereto not less than seven (7) days nor more than sixty (60) days before the date fixed for the meeting and as prescribed by law. Such notice shall be given either personal delivery or mailed to each shareholders of the Company entitled to notice of or to vote at such meeting by or at the direction of the Chairman of the Board of the Company, President of the Company, the Secretary of the Company or any other person authorized by the Board or required by these Regulations to give such notice. If such notice is mailed, it shall be directed, postage prepaid, to the shareholders of the Company at their respective addresses as they appear upon the records of the Company, and notice shall be deemed to have been given on the day so mailed. If any meeting is adjourned to another time or place, no notice as to such adjourned meeting need be given other than by announcement at the meeting at which such an adjournment is taken. No business shall be transacted at any such adjourned meeting except as might have been lawfully transacted at the meeting at which such adjournment was taken. All notices with respect to any shareholders of record in the name of two or more persons may be given to one of such persons who was named first upon the books of the Company, and notice so given shall be sufficient and effective notice to all the holders of such shares. Upon request in writing delivered either in person or by registered mail to the Chairman of the Board, President or Secretary of the Company by any person or persons entitled to call a meeting of the shareholders of the Company, such officer shall cause to be given to the shareholders entitled thereto notice of a meeting to be held on a date not less than seven (7) days nor more than sixty (60) days after the receipt of such request, as such officer, in his sole and absolute discretion, may fix. If such notice is not given within five (5) days after the delivery or mailing of such request, the person or persons calling the meeting may fix the time of the meeting and give notice thereof as provided in this Section 4. Every person who by operation of law, transfer or otherwise shall become entitled to any share or right or interest therein shall be bound by every notice in respect of such share which, prior to his name and address being entered upon 5he books of the Company as the registered holder of such share, shall have been given to the person in whose name such share appeared of record. 2.5 WAIVER OF NOTICE. - ---------------------- Notice of the hour, day, place and purpose or purposes of any meeting of the shareholders of the Company, whether required by law, the Articles of Incorporation of the Company (the "Articles") or these Regulations, may be waived in writing, either before or after the holding of such meeting, by any shareholder entitled thereto, which writing shall be filed with or entered upon the records of the meeting. Attendance of any shareholder in any such meeting without protesting, prior to or at the commencement of the meeting, the lack of proper notice shall be deemed to be a waiver by such shareholder of notice of such meeting. If all of the shareholders of the Company entitled to vote shall meet in person or by proxy and consent to holding a meeting, such meeting shall be valid for all purposes without call or notice, and at such meeting any action may be properly taken. 2.6 SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE. - ------------------------------------------------- If the record date shall not be fixed by the Board or the books of the Company shall not be closed against transfers of shares pursuant to statutory authority, the record date for the determination of shareholders of the Company entitled to notice of or to vote at any meeting of the shareholders of the Company shall be the date next preceding the day on which notice is given, or the date next preceding the day on which the meeting is held, as the case may be. Such record date shall continue to be the record date for all adjournments of such meeting unless a new record date shall be fixed and notice thereof and of the date of the adjourned meeting be given to all shareholders of the Company entitled to notice in accordance with the new record date so fixed. 2.7 QUORUM. - ------------ The shareholders of the Company present in person or by proxy at any meeting thereof for the determination of the number of directors, or the election of directors, or for the consideration and action upon reports required to be laid before such meeting, shall constitute a quorum. At any meeting called for any other purpose, the holders of shares entitling them to exercise a majority of the voting power of the Company, present in person or represented by proxy, shall constitute a quorum, except when a greater proportion is required by law, the Articles or these Regulations. At any meeting at which a quorum is present, all questions and business that shall come before the meeting shall be determined by the vote of the holders of a majority of such voting shares as are represented in person or by proxy, except when a greater proportion is required by law, the Articles or these Regulations. At any meeting of shareholders, whether a quorum is present or not, the holders of a majority of the voting shares represented by shareholders present in person or by proxy may adjourn such meeting from time to time and from place to place without notice other than by announcement at the meeting. At any such adjourned meeting at which a quorum is present, any business may be transacted which might be transacted at the meeting as originally notified or held. 2.8 PROXIES. - ------------- Any shareholder of record who is entitled to attend a meeting of shareholders, or to vote thereat or to assent or give consents in writing, shall be entitled to be represented at such meeting or to vote thereat or to assent or give consents in writing, as the case may be, or to exercise any other of his rights, by proxy or proxies appointed by a writing signed by such shareholder, or his duly authorized attorney, as provided by the laws of the State of Ohio. A facsimile, telegram, cablegram, wireless message or photogram appearing to have been transmitted by a shareholder, or a photograph, photostatic or equivalent reproduction of a writing appointing a proxy or proxies, shall be a sufficient writing. No appointment of a proxy shall be valid after the expiration of eleven (11) months after it is made unless the writing specifies the date on which it is to expire or the length of time it is to continue in force. Unless the writing appointing a proxy or proxies otherwise provides: (a) Each and every proxy shall have the power of substitution, and when three (3) or more persons are appointed, a majority of them or their respective substitutes may appoint a substitute or substitutes to act for all. (b) If more than one proxy is appointed, then (i) with respect to voting or giving consents at a shareholders' meeting, a majority of such proxies as attends the meeting, or if only one attends then that one may exercise all the voting and consenting authority thereat; and if an even number attend and a majority do not agree on any particular issue, each proxy so attending shall be entitled to exercise such authority with respect to an equal number of shares; {ii) with respect to exercising any other authority, a majority may act for all. (c) A writing appointing a proxy shall not be revoked by the death or incapacity of the maker unless before the vote is taken or the authority granted is otherwise exercised, written notice of such death or incapacity is given to the Company by the executor or the administrator of the estate of such maker or by the fiduciary having control of the shares in respect of which the proxy was appointed. (d) The presence of a shareholder at a meeting shall not operate to revoke a writing appointing a proxy. A shareholder, without affecting any vote previously taken, may revoke such writing not otherwise revoked by giving notice to the Company in writing or in open meeting. 2.9 VOTING. - ------------ At any meeting of shareholders and except as otherwise provided by law or by the Articles or by these Regulations, each shareholder of the Company shall be entitled to one vote (or fraction thereof in case of fractional shares) in person or by proxy for each share of the Company (or fraction thereof in the case of fractional shares) registered in his name on the books of the Company (i) on the date fixed pursuant to subparagraph (vi) of Section 1 of Article III of these Regulations as the record date for the determination of shareholders entitled to vote at such meeting, notwithstanding the prior or subsequent sale, or other disposal of such share or shares or transfer of the same on the books of the Company on or after the date so fixed, or (ii) if no such record date shall have been fixed, then as of the date next preceding the date of such meeting. 2.10 FINANCIAL REPORTS. - ----------------------- At the annual meeting of the shareholders of the Company, or the meeting held in lieu thereof, there shall be laid before the shareholders a financial statement of the Company, which may be consolidated, meeting the requirements of Section 1701.38(A) of the OHIO REVISED CODE (the "ORC") with an opinion appended thereto meeting the requirements of Section 1701.38(B) of the ORC. 2.11 ACTION WITHOUT MEETING. - ---------------------------- Any action which may be authorized or taken at any meeting of shareholders may me authorized or taken without a meeting in a writing or writings signed by all of the holders of shares who would be entitled to notice of a meeting of the shareholders held for such purpose. Such writing or writings shall be filed with or entered upon the records of the Company. 2.12 ORGANIZATION OF MEETINGS. - ------------------------------ The Chairman of the Board of the Company, or, in his absence, the President of the Company, or, in the absence of both of them, a Vice President of the Company, shall call all meetings of the shareholders of the Company to order and shall act as Chairman thereof; PROVIDED, HOWEVER, if all of such persons are absent, then the shareholders of the Company shall elect a Chairman. The Secretary of the Company, or, in his absence, an Assistant Secretary, or, in the absence of both, a person appointed by the Chairman of the meeting, shall act as Secretary of the meeting and shall keep and make a record of the proceedings thereat. 2.13 ORDER OF BUSINESS. - ----------------------- The order of business at all meetings of the shareholders of the Company, unless waived or otherwise changed by the Chairman of the meeting or the Board, shall be as follows: (i) call meeting to order; (ii) selection of Chairman and/or Secretary, if necessary; (iii) proof of notice of meeting and presentment of affidavit thereof; (iv) roll call, including filing of proxies with the Secretary of the meeting; (v) upon appropriate demand, appointment of inspectors of election; (vi) reading, correction and approval of previously unapproved minutes; (vii) reports of officers and committees; (viii) if annual meeting or meeting called for that purpose, election of directors of the Company; (ix) unfinished business, if adjourned meeting; (x) consideration in sequence of all other matters set forth in the call for and written notice of the meeting; (xi) any new business other than that set forth in the notice of the meeting which shall have been submitted to the Secretary of the Company in writing at least ten (10) days prior to the date of the meeting; and, (xii) adjournment. 2.14 LIST OF SHAREHOLDERS. - -------------------------- At any meeting of shareholders of the Company, a list of shareholders, alphabetically arranged, showing the number and classes of shares held by each on the record date applicable to such meeting, shall be produced on the request of any shareholder of the Company. ARTICLE III DIRECTORS --------- 3.1 GENERAL POWERS OF BOARD. - ----------------------------- The powers of the Company shall be exercised, its business and affairs conducted, and its property controlled by the Board except where the law, the Articles or these Regulations require action to be authorized or taken by the shareholders of the Company. Without prejudice to the general powers conferred by or implied in the preceding sentence, the Board shall have the power to: (i) fix, define and limit the powers and duties of all officers of the Company and to fix the salaries of all officers; (ii) appoint, and at their discretion, with or without cause, to remove or suspend such subordinate officers, assistants, managers, agents and employees of the Company as the Board may from time to time deem advisable, and to determine their duties and fix their compensation; (iii) require any officer, agent or employee of the Company to furnish a bond for faithful performance in such amount and with such sureties as the Board may approve; (iv) designate a depositary or depositaries of the funds of the Company and the officer or officers of the Company or other persons who shall be authorized to sign notes, checks, drafts, contracts, deeds, mortgages and other instruments on behalf of the Company; (v) appoint and remove transfer agents and/or registrars for the Company's shares; (vi) fix a time not exceeding forty-five (45) days preceding the date of any meeting of shareholders of the Company, or the date fixed for the payment of any dividend or distribution, or the date for the allotment of rights, or (subject to contract rights with respect thereto) the date when any change or conversion or exchange of shares shall be made or go into effect, as a record date for the determination of the shareholders entitled to notice of and to vote at any such meeting, or entitled to receive payment of any such dividend, distribution, or allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares, and, in such case, only the persons who are shareholders of record on the date so fixed shall be entitled to notice of and to vote at such meeting, or to receive payment of such dividend, distribution, or allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Company after any record date fixed as aforesaid, or change of ownership of any shares either before or after such record date, and such persons shall conclusively be deemed to be the shareholders of the Company on such record date, notwithstanding notice or knowledge to the contrary; and the Board may close the books of the Company against transfer of shares during the whole or any part of such period; and (vii) establish such rules and regulations respecting the issuance and transfer of shares and certificates for shares as the Board may consider reasonable. 3.2 NUMBER OF DIRECTORS. - ------------------------- Until changed in accordance with the provisions of this Section, the number of directors of the Company, none of whom need be shareholders, shall be three (3). The number of directors of the Company may be fixed or changed by resolution at any annual meeting of the shareholders of the Company or at any special meeting of the shareholders of the Company called for that purpose, adopted by the vote of the holders of shares, present in person or by proxy, entitling them to exercise a majority of the voting power on such proposal of the shares represented at such meeting, but no reduction shall have the effect of removing any director prior to the expiration of his term of office. In addition, the number of directors of the Company may be fixed or changed by action of the Board at a meeting called for that purpose at which a quorum is present by a majority vote of the members of the Board present at the meeting. The directors then in office may fill any director's office that is created by an increase in the number of directors and the number of directors elected shall be deemed to be the number of directors fixed unless otherwise fixed by resolution adopted at the meeting at which such directors are elected. 3.3 ELECTION OF DIRECTORS. - --------------------------- Directors shall be elected at the annual meeting of shareholders, but when the annual meeting is not held or directors are not elected thereat, they may be elected at a special meeting called and held for that purpose. Such election shall be by ballot whenever requested by any shareholder entitled to vote at such election; but, unless such a request is made, the election may be conducted in any manner approved at such meeting. At each meeting of shareholders at which directors are to be elected only persons nominated by an officer, director or in writing by a shareholder at least five (5) days prior to the meeting shall be eligible for election and those persons receiving the greatest number of votes shall be directors. 3.4 TERM OF OFFICE. - -------------------- Directors shall hold office until the annual meeting next succeeding their election and until their successors are elected and qualified or until their earlier resignation, removal from office or death. 3.5 VACANCIES. - --------------- Vacancies in the Board may be filled by a majority vote of the remaining directors until an election to fill such vacancies is had. Shareholders entitled to elect directors shall have the right to fill any vacancy in the Board (whether the same has been temporarily filled by the remaining directors or not) at any meeting of the shareholders called for that purpose, and any directors elected at any such meeting of shareholders shall serve until the next annual election of directors and until their successors are elected and qualified. 3.6 RESIGNATION FROM THE BOARD. - -------------------------------- Resignation from the Board shall be deemed to take effect immediately upon its being received by any incumbent corporate officer other than an officer who is also the resigning director, unless some other time is specified therein. 3.7 QUALIFICATIONS. - -------------------- Directors need not be shareholders of the Company. 3.8 REMOVAL. - ------------- Directors shall be subject to removal as provided by law or by other lawful procedures and nothing herein shall be construed to prevent the removal of any or all directors in accordance therewith. 3.9 MEETINGS OF THE BOARD. - --------------------------- A regular meeting of the Board may be held immediately following the adjournment of each shareholders' meeting at which directors are elected. The holding of such shareholders' meeting shall constitute notice of such Board meeting and such meeting shall be held without further notice. Other regular meetings shall be held at such other times and places as may be fixed by the Board. Special meetings of the Board may be held at any time upon call of the Chairman of the Board, President, or any two members of the Board. Notice of any special meeting of the Board of Directors shall be mailed to each director, addressed to him at his residence or usual place of business, at least five (5) days before the day on which the meeting is to be held, or shall be sent to him at such place by facsimile, telegraph, cable, radio or wireless, or be given personally or by telephone, not later than the day before the day on which the meeting is to be held. Every such notice shall state the time and place of the meeting but need not state the purpose or purposes thereof. Notice of any meeting of the Board need not be given to any director, however, if waived by him in writing or by facsimile, telegraph, cable, radio or wireless, whether before or after such meeting, or if he shall be present at such meeting without protest prior to the commencement thereof; and any meetin9 of the Board shall be a legal meeting without any notice thereof having been given if all the directors shall be present thereat. All meetings of the Board shall be held at the office of the Company in the City of Monroeville, Ohio, or at such other place, within or without the State of Ohio, as the Board may determine from time to time and as may be specified in the notice thereof. 3.10 QUORUM. - ------------ A majority of the Board shall constitute a quorum for the transaction of business; PROVIDED, HOWEVER, that whenever less than a quorum is present at the time and place appointed for any meeting of the Board, a majority of those present may adjourn the meeting from time to time, without notice other than by announcement at the meeting, until a quorum shall be present. At any meeting at which a quorum is present, all acts, questions and business which may come before the meeting shall be determined by a majority of votes cast by the members of the Board present at such meeting, unless the vote of a greater number is required by the Articles or these Regulations. 3.11 ACTION WITHOUT A MEETING. - ------------------------------ Any action which may be authorized or taken at a meeting of the directors may be authorized or taken without a meeting in a writing or writings signed by all the directors, which writing or writings shall be filed with or entered upon the records of the Company. 3.12 COMPENSATION. - ------------------ The directors, as such, shall not receive any salary for their services, but by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; PROVIDED, HOWEVER, that nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation therefor. Members of the executive committee or of any standing or special committee may by resolution of the Board be allowed such compensation for their services as the Board may deem reasonable, and additional compensation may be allowed to directors for special services rendered. 3.13 BY-LAWS. - ------------- For the government of its actions, the Board may adopt by-laws consistent with the Articles and these Regulations. 3.14 ATTENDANCE AT MEETINGS BY PERSONS WHO ARE NOT DIRECTORS. - ------------------------------------------------------------- Unless waived by a majority of the members of the Board in attendance, not less than twenty-four (24) hours before any regular or special meeting of the Board, any director who desires the presence at such meeting of not more than two (2) persons who are not directors shall so notify all other directors, request the presence of such person or persons at the meeting and state the reason in writing. Such person or persons shall not be permitted to attend the meeting of the Board unless a majority of the directors in attendance vote to admit such person to the meeting. Such vote shall constitute the first order of business for any such meeting of the Board. Such right to attend, whether granted by waiver or vote, may be revoked at any time during any such meeting by the vote of a majority of the members of the Board in attendance. Notwithstanding anything contained in this Section 14 to the contrary, any shareholder of the Company shall be permitted to attend any meeting of the Board and shall receive not less than twenty-four (24) hours notice of such meeting given in accordance with Section 9 of this Article; PROVIDED, HOWEVER, that such shareholder(s) may be excused at any time by the action of a majority of the members of the Board in attendance. 3.15 COMMITTEES. - ---------------- The Board may by resolution provide for such standing or special committees as it deems desirable, and discontinue the same at its pleasure. Each such committee shall have such powers and perform such duties, not inconsistent with law, as may be delegated to it by the Board. Vacancies in such committees shall be filled by the Board or as it may provide. ARTICLE IV OFFICERS -------- 4.1 GENERAL PROVISIONS. - ------------------------ The Board shall elect a President, such number of Vice Presidents as the Board may from time to time determine, a Secretary and a Treasurer, and, in its discretion, a Chairman of the Board. The Board may from time to time create such other offices and appoint such other officers, subordinate officers and assistant officers as it may determine. The Chairman of the Board shall be, but the other officers need not be, chosen from among the members of the Board. Any two or more of such offices, other than that of President and Vice President, Secretary and Assistant Secretary, or Treasurer and Assistant Treasurer, may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required to be executed, acknowledged or verified by two or more officers. All officers, as between themselves and the Company, shall respectively have such authority and perform such duties as are customarily incident to their respective offices, and as may be specified from time to time by these Regulations and the Board, regardless of whether such authority and duties are customarily incident to such office. In the absence of any officer of the Company, or for any other reason the Board may deem sufficient, the powers or duties of such officer or any of them may be delegated to any other officer or to any director of the Company. The Board may from time to time delegate to any officer authority to appoint and remove subordinate officers and to prescribe their authority and duty. The powers and duties of the officers described in Article IV of these Regulations are subject to change from time to time by the Board. 4.2 TERM OF OFFICE. - -------------------- The officers of the Company shall hold office at the pleasure of the Board, and unless sooner removed by the Board, until the meeting of the Board following the date of their election and until their successors are elected and qualified. The Board may remove any officer at any time, with or without cause, by a majority vote. A vacancy in any office, however created, shall be filled by the Board. 4.3 CHAIRMAN OF THE BOARD. - --------------------------- The Chairman of the Board, if one be elected, shall preside at all meetings of the Board and shall have such other powers and duties as may be prescribed by the Board. 4.4 PRESIDENT. - --------------- The President shall be the chief executive and operating officer of the Company and shall exercise supervision over the business of the Company and over its several officers, subject, however, to the control of the Board. He or she shall preside at all meetings of shareholders and, in the absence of, or if a Chairman of the Board shall not have been elected, shall also preside at meetings of the Board. He or she shall have authority to sign all certificates for shares and all deeds, mortgages, bonds, contracts, notes and other instruments requiring his signature; and shall have all the powers and duties prescribed by the Ohio General Corporation Act (the "Act") and such others as the Board may from time to time assign to him or her. 4.5 VICE PRESIDENTS. - --------------------- The Vice Presidents shall perform such duties as are conferred upon them by these Regulations or as may from time to time be assigned to them by the Board or the President. At the request of the President, or in his or her absence or disability, the Vice President designated by the President (or in the absence of such designation, the Vice President designated by the Board) shall perform all the duties of the President, and when so acting, shall have all the powers of the President. The authority of Vice Presidents to sign in the name of the Company all certificates for shares and authorized deeds, mortgages, bonds, contracts, notes and other instruments shall be coordinated with like authority of the President. Any one or more of the Vice Presidents may be designated as an "Executive Vice President." 4.6 SECRETARY. - --------------- The Secretary shall keep minutes of all the proceedings of the shareholders and Board and shall make proper record of the same, which shall be attested by him or her; sign all certificates for shares, and all deeds, mortgages, bonds, contracts, notes, and other instruments executed by the Company requiring his or her signature; give notice of meetings of shareholders and directors; produce on request at each meeting of shareholders for the election of directors a certified list of shareholders arranged in alphabetical order; keep such books as may be required by the Board; and perform such other and further duties as may from time to time be assigned to him or her by the Board or by the President. 4.7 TREASURER. - --------------- The Treasurer shall have general supervision of all finances; he or she shall receive and have in charge all money, bills, notes, deeds, leases, mortgages and similar property belonging to the Company and shall do with the same as may from time to time be required by the Board of Directors. He or she shall cause to be kept adequate and correct accounts of the business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, stated capital, and shares, together with such other accounts as may be required, and, upon the expiration of his or her term of office, shall turn over to his or her successor or to the Board all property, books, papers and money of the Company in his or her hands; and he or she shall perform such other duties as from time to time may be assigned to him or her by the Board. 4.8 ASSISTANT AND SUBORDINATE OFFICERS. - ---------------------------------------- The Board may appoint such assistant and subordinate officers as it may deem desirable. Each such officer shall hold office during the pleasure of the Board and perform such duties as the Board may prescribe. The Board may, from time to time, authorize any officer and remove assistant and subordinate officers, to authority and duties, and to fix their compensation. ARTICLE V CERTIFICATES FOR SHARES ----------------------- 5.1 FORM AND EXECUTION. - ------------------------ Certificates for shares shall be issued to each shareholder in such form as shall be approved by the Board. Such certificates shall be signed by the Chairman of the Board, the President or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of the Company, which certificates shall certify the number and class of shares held by the shareholder in the Company, but no certificate for shares shall be issued and delivered until such shares are fully paid. When such a certificate is countersigned by an incorporated transfer agent or registrar, the signature of any of said officers of the Company may be facsimile, engraved, stamped or printed. Although any officer of the Company whose manual or facsimile signature is affixed to a share certificate shall cease to be such officer before the certificate is delivered, such certificate, nevertheless, shall be effective in all respects when delivered. Such certificate for shares shall be transferable in person or by attorney, but, except as hereinafter provided in the case of lost, mutilated or destroyed certificates, no transfer of shares shall be entered upon the records of the Company until the previous certificate, if any, given for the same shall have been surrendered and canceled. The Board shall have authority to make such rules and regulations, not inconsistent with law, the Articles or these Regulations, as it deems expedient concerning the issuance, transfer and registration of certificates for shares and the shares represented thereby and may appoint transfer agents and registrars thereof. 5.2 LOST, MUTILATED OR DESTROYED CERTIFICATES. - ----------------------------------------------- If any certificate for shares is lost, mutilated or destroyed, the Board may authorize the issue of a new certificate in place thereof upon such terms and conditions as it may deem advisable. The Board in its discretion may refuse to issue such new certificates until the Company has been indemnified to its satisfaction and until it is protected to its satisfaction by a final order or decree of a court of competent jurisdiction. 5.3 REGISTERED SHAREHOLDERS. - ----------------------------- A person in whose name shares are of record on the books of the Company shall conclusively be deemed the unqualified owner thereof for all purposes and to have capacity to exercise all rights of ownership. Neither the Company nor any transfer agent of the Company shall be bound to recognize any equitable interest in or claim to such shares on the part of any other person, whether disclosed upon such certificate or otherwise, nor shall they be obliged to see to the execution of any trust or obligation. ARTICLE VI INDEMNIFICATION OF DIRECTORS AND OFFICERS ----------------------------------------- Each person who at any time is or shall have been a director and, at the option of the Board, each person who at any time is or shall have been an officer, employee or agent of the Company, or is or shall have been serving at the request of the Company as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, and his heirs, executors and administrators shall be indemnified by the Company in accordance with and to the fullest extent permitted by the Act as in effect at the time of the adoption of these Regulations or as amended from time to time thereafter. The foregoing right of indemnification shall not be deemed exclusive of other rights to which any director, officer, trustee, employee, agent or other person may be entitled in any capacity as a matter of law or under any regulation, agreement, vote of the Board or otherwise. If authorized by the Board, the Company may purchase and maintain insurance against liability on behalf of any such person to the full extent permitted by the Act as in effect at the time of the adoption of these Regulations or as amended from time to time thereafter. The right of indemnification conferred herein shall be extended to any threatened action, suit or proceeding, and the failure to institute it shall be deemed its final determination. Advances may be made by the Company against costs, expenses and fees, as and upon the terms determined by the Board. ARTICLE VII FISCAL YEAR ----------- The fiscal year of the Company end on such day as may be fixed from time to time by the Board. ARTICLE VIII AMENDMENTS ---------- These Regulations may be amended, repealed or added to at any meeting of shareholders called for that purpose by the affirmative vote of the holders of record of shares entitling them to exercise a majority of the voting power on such proposal or, without a meeting, by the written consent of the holders of record of shares entitling them to exercise a majority of the voting power on such proposal; PROVIDED, HOWEVER, that if an amendment or addition is adopted by written consent without a meeting of the shareholders, it shall be the duty of the Secretary of the Company to enter the amendment or addition in the records of the Company, and to mail a copy of such amendment or addition to each shareholder of record who would be entitled to vote thereon and did not participate in the adoption thereof; PROVIDED FURTHER, HOWEVER, that no amendment or addition to these Regulations shall be made if such amendment or addition is inconsistent with the Articles. ARTICLE IX SEAL ---- The Board may, in its discretion, provide a suitable seal containing the name of the Company. If deemed advisable by the Board, duplicate seals maybe provided and kept for the purpose of the Company. ARTICLE X CONSISTENCY WITH ARTICLES ------------------------- If any provision of these Regulations shall be inconsistent with the Articles as in effect at the time of the adoption of these Regulations or as amended from time to time, the Articles, as in effect at the time, shall govern and control. If any provision of these Regulations shall be inconsistent with the 1995 Close Corporation Agreement (the "Corporation Agreement") made and entered into as of August 7, 1995 among the Company and the shareholders of the Company, a copy of which is on file with the Secretary of the Company, the Corporation Agreement, as in effect at the time, shall govern and control. ARTICLE XI MISCELLANEOUS ------------- 11.1 SECTION HEADINGS. - ---------------------- The headings contained in these Regulations are for reference purposes only and shall not be construed to be part of and/or shall not affect in any way the meaning or interpretation of these Regulations. 11.2 GENDER. - ------------ Unless the context otherwise requires a different meaning, words of a masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders, words importing the singular number shall include the plural number and vice versa, and the terms "hereof", "hereby", "hereto", "hereunder", "herein" and similar terms mean these Regulations. 11.3 COMPUTATION OF DAYS. - ------------------------- Unless otherwise provided in these Regulations, in computing the number of days for any purpose under these Regulations, all days shall be counted including Saturdays, Sundays and holidays. -1- EX-3.23 15 ARTICLES OF INCORPORATION FOR STATUTORY CLOSE STATE OF SOUTH CAROLINA SECRETARY OF STATE ARTICLES OF INCORPORATION FOR A STATUTORY CLOSE CORPORATION The undersigned, desiring to form a corporation for profit (the "Corporation") in accordance with the SOUTH CAROLINA BUSINESS CORPORATION ACT OF 1988, as amended (the "BCA"), hereby states as follows: 1. NAME. The name of the Corporation is Venture Packaging Southeast, Inc. 2. REGISTERED OFFICE. The initial Registered Office of the Corporation is 200 Masters Boulevard, Anderson, SC 29624, County of Anderson and the initial Registered Agent at such address is Timothy J. Rathbun. 3. PRINCIPAL OFFICE. The place in the State of South Carolina where the principal office of the Corporation is to be located is Anderson County, South Carolina. 4. PURPOSE. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the BCA. 5. STATUTORY CLOSE CORPORATION. The Corporation is a Statutory Close Corporation, formed pursuant to Chapter 18, Title 33 of the BCA. 6. PREEMPTIVE RIGHTS. No holder of shares of the Corporation shall have any preemptive right to subscribe for or to purchase any shares of the Corporation of any class whether now or hereafter authorized. 7. CUMULATIVE VOTING. The shareholders of the Corporation may not vote cumulatively in the election of directors. 8. NUMBER OF DIRECTORS. The number of directors of the Corporation shall not be less than one (1) nor more than nine (9), the exact number of directors to be determined from time to time by resolution adopted by affirmative vote of a majority of the Board of Directors. 9. STAGGERED TERMS FOR DIRECTORS. If the Board of Directors consists of six or more directors, then the Board may be divided into two or three classes, with each class containing one-half or one-third of the total, as nearly equal in number as the then total number of directors constituting the board permits, with the term of office of the first class first expiring at the first annual shareholders' meeting after their election; the term of office of the second class first expiring at the second annual shareholders' meeting after their election; and the term of the third class (if any) first expiring at the third annual shareholders' meeting after their election. Thereafter at each annual meeting of shareholders, the successors to the class of directors whose term shall then expire shall be elected to hold office for a term expiring at the second or third succeeding annual meeting, as the case may be. 10. INCORPORATOR. The name and mailing address of the incorporator of the Corporation is as follows:
NAME ADDRESS SIGNATURE Timothy J. Rathbun 200 Masters Boulevard Anderson, SC 29624 ________________________
11. AUTHORIZED SHARES. The number of shares that the Corporation is authorized to have outstanding is One Thousand (1,000), all of which shall be shares of Common Stock, without par value. 12. CERTIFICATION. I, Frank T. Davis, III, an attorney licensed to practice in the State of South Carolina, certify that the Corporation, to whose articles of incorporation this certificate is attached, has complied with the requirements of Chapter 2, Title 33 of the BCA. IN WITNESS WHEREOF, the undersigned has set his hand this 2nd day of August, 1995. ______________________________________ Frank T. Davis, III 7 N. Laurens Street Greenville, SC 29601 -1- EX-3.24 16 BY-LAWS OF VENTURE SOUTHEAST BYLAWS OF VENTURE PACKAGING SOUTHEAST, INC. Set forth below is the Bylaws (the "Bylaws") of Venture Packaging Southeast, Inc., a South Carolina corporation (the "Company"), for the government of the Company, the conduct of its affairs and the management of its properties, as adopted by the shareholders of the Company effective as of August 7, 1995. ARTICLE I OFFICES ------- 1.1 PRINCIPAL OFFICE. - ---------------------- The principal office of the Company shall be at such place in the County of Anderson, South Carolina, as may be designated from time to time by the Board of Directors of the Company (the "Board"). 1.2 OTHER OFFICES. - ------------------- The Company may also have offices at such other places within, as well as without, the State of South Carolina as the Board may from time to time determine. ARTICLE II MEETINGS OF SHAREHOLDERS ------------------------ 2.1 ANNUAL MEETING. - -------------------- The annual meeting of the shareholders of the Company for the purpose of fixing or changing the number of directors of the Company, electing directors, considering financial statements and other reports and transacting such other business as may properly come before the meeting shall be held at such time as determined by the Board in each year, but in no event later than six (6) months after the close of a fiscal year in each year, beginning with the fiscal year of the Company ending in 1996. Upon due notice, there may also be considered and acted upon at the annual meeting of the shareholders of the Company any matter which may properly be considered and acted upon at a special meeting of the shareholders of the Company, in which case and for which purpose the annual meeting of the shareholders of the Company shall also be considered as, and shall be, a special meeting of the shareholders of the Company. If the annual meeting of the shareholders of the Company is not held or if directors of the Company are not elected thereat, a special meeting of the shareholders may be called and held for that purpose. 2.2 SPECIAL MEETINGS. - ---------------------- Special meetings of the shareholders of the Company may be called at any time by (i) the Chairman of the Board or President of the Company, (ii) a majority of the Board acting with or without a meeting or (iii) the holder or holders of at least ten percent (10%) of all the shares of the Company outstanding and entitled to vote thereat. 2.3 PLACE OF MEETINGS. - ----------------------- Meetings of the shareholders of the Company shall be held at the principal office of the Company in the County of Anderson, South Carolina, unless the Board decides that a meeting shall be held at some other place within or without the State of South Carolina and causes the notice thereof to so state. 2.4 NOTICE OF MEETINGS. - ------------------------ Unless waived, a written, printed or typewritten notice of the date, time, place and purpose or purposes of any meeting of shareholders of the Company shall be given to each shareholder entitled thereto not less than ten (10) days nor more than sixty (60) days before the date fixed for the meeting and as prescribed by law. Such notice shall be given either by personal delivery or mailed to each shareholder of the Company entitled to notice of or to vote at such meeting by or at the direction of the Chairman of the Board of the Company, President of the Company, the Secretary of the Company or any other person authorized by the Board or required by these Bylaws to give such notice. If such notice is mailed, it shall be directed, postage prepaid, to the shareholders of the Company at their respective addresses as they appear upon the records of the Company, and notice shall be deemed to have been given on the day so mailed. If any meeting is adjourned to another time or place, no notice as to such adjourned meeting need be given other than by announcement at the meeting at which such an adjournment is taken. No business shall be transacted at any such adjourned meeting except as might have been lawfully transacted at the meeting at which such adjournment was taken. All notices with respect to any shareholders of record in the name of two or more persons may be given to one of such persons who was named first upon the books of the Company, and notice so given shall be sufficient and effective notice to all the holders of such shares. Upon request in writing delivered either in person or by registered mail to the Chairman of the Board, President or Secretary of the Company by any person or persons entitled to call a meeting of the shareholders of the Company, such officer shall cause to be given to the shareholders entitled thereto notice of a meeting to be held on a date not less than ten (10) days nor more than sixty (60) days after the receipt of such request, as such officer, in his sole and absolute discretion, may fix. If such notice is not given within five (5) days after the delivery or mailing of such request, the person or persons calling the meeting may fix the time of the meeting and give notice thereof as provided in this Section 4. Every person who by operation of law, transfer or otherwise shall become entitled to any share or right or interest therein shall be bound by every notice in respect of such share which, prior to his name and address being entered upon the books of the Company as the registered holder of such share, shall have been given to the person in whose name such share appeared of record. 2.5 WAIVER OF NOTICE. - ---------------------- Notice of the date, time, place and purpose or purposes of any meeting of the shareholders of the Company, whether required by law, the Articles of Incorporation of the Company (the "Articles") or these Bylaws, may be waived in writing, either before or after the holding of such meeting, by any shareholder entitled thereto, which writing shall be filed with or entered upon the records of the meeting. Attendance of any shareholder in any such meeting without protesting, prior to or at the commencement of the meeting, the lack of proper notice shall be deemed to be a waiver by such shareholder of notice of such meeting. If all of the shareholders of the Company entitled to vote shall meet in person or by proxy and consent to holding a meeting, such meeting shall be valid for all purposes without call or notice, and at such meeting any action may be properly taken. 2.6 SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE. - ------------------------------------------------- If the record date shall not be fixed by the Board or the books of the Company shall not be closed against transfers of shares pursuant to statutory authority, the record date for the determination of shareholders of the Company entitled to notice of or to vote at any meeting of the shareholders of the Company shall be the date next preceding the day on which notice is given, or the date next preceding the day on which the meeting is held, as the case may be. Such record date shall continue to be the record date for all adjournments of such meeting unless a new record date shall be fixed and notice thereof and of the date of the adjourned meeting be given to all shareholders of the Company entitled to notice in accordance with the new record date so fixed, which must occur if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting. 2.7 QUORUM. - ------------ The holders of shares entitling them to exercise a majority of the voting power of the Company, present in person or represented by proxy, shall constitute a quorum, except when a greater proportion is required by law, the Articles or these Bylaws. At any meeting at which a quorum is present, all questions and business that shall come before the meeting shall be determined by the vote of the holders of a majority of such voting shares as are represented in person or by proxy, except when a greater proportion is required by law, the Articles or these Bylaws. At any meeting of shareholders, whether a quorum is present or not, the holders of a majority of the voting shares represented by shareholders present in person or by proxy may adjourn such meeting from time to time and from place to place without notice other than by announcement at the meeting. At any such adjourned meeting at which a quorum is present, any business may be transacted which might be transacted at the meeting as originally notified or held. 2.8 PROXIES. - ------------- Any shareholder of record who is entitled to attend a meeting of shareholders, or to vote thereat or to assent or give consents in writing, shall be entitled to be represented at such meeting or to vote thereat or to assent or give consents in writing, as the case may be, or to exercise any other of his rights, by proxy or proxies appointed by a writing signed by such shareholder, or his duly authorized attorney, as provided by the laws of the State of South Carolina. A facsimile, telegram, cablegram, wireless message or photogram appearing to have been transmitted by a shareholder, or a photograph, photostatic or equivalent reproduction of a writing appointing a proxy or proxies, shall be a sufficient writing. No appointment of a proxy shall be valid after the expiration of eleven (11) months after it is made unless the writing specifies the date on which it is to expire or the length of time it is to continue in force. Unless the writing appointing a proxy or proxies otherwise provides: (a) Each and every proxy shall have the power of substitution, and when three (3) or more persons are appointed, a majority of them or their respective substitutes may appoint a substitute or substitutes to act for all. (b) If more than one proxy is appointed, then (i) with respect to voting or giving consents at a shareholders' meeting, a majority of such proxies as attends the meeting, or if only one attends then that one may exercise all the voting and consenting authority thereat; and if an even number attend and a majority do not agree on any particular issue, each proxy so attending shall be entitled to exercise such authority with respect to an equal number of shares; (ii) with respect to exercising any other authority, a majority may act for all. (c) A writing appointing a proxy shall not be revoked by the death or incapacity of the maker unless before the vote is taken or the authority granted is otherwise exercised, written notice of such death or incapacity is given to the Company by the executor or the administrator of the estate of such maker or by the fiduciary having control of the shares in respect of which the proxy was appointed. (d) The presence of a shareholder at a meeting shall not operate to revoke a writing appointing a proxy. A shareholder, without affecting any vote previously taken, may revoke such writing not otherwise revoked by giving notice to the Company in writing or in open meeting. 2.9 VOTING. - ------------ At any meeting of shareholders and except as otherwise provided by law or by the Articles or by these Bylaws, each shareholder of the Company shall be entitled to one vote (or fraction thereof in case of fractional shares) in person or by proxy for each share of the Company (or fraction thereof in the case of fractional shares) registered in his name on the books of the Company (i) on the date fixed pursuant to subparagraph (vi) of Section 1 of Article III of these Bylaws as the record date for the determination of shareholders entitled to vote at such meeting, notwithstanding the prior or subsequent sale, or other disposal of such share or shares or transfer of the same on the books of the Company on or after the date so fixed, or (ii) if no such record date shall have been fixed, then as of the date next preceding the date of such meeting. 2.10 FINANCIAL REPORTS. - ----------------------- Within 120 days after the close of each fiscal year of the Company, the Company shall mail to each shareholder a copy of the financial statements of the Company, which may be consolidated, meeting the requirements of Section 33-16-200 of the SOUTH CAROLINA BUSINESS CORPORATION ACT OF 1988, as amended (the "BCA") with an opinion appended thereto meeting the requirements of Section 33-16-200(b) of the BCA. 2.11 REPORT OF CERTAIN SHARE TRANSACTIONS. - ------------------------------------------ If the Company issues or authorizes the issuance of shares for promissory notes or for promises to render future services, the Company shall report in writing to the shareholders the number of shares authorized or issued, and the consideration received by the Company therefor, with or before the notice of the next shareholder meeting. 2.12 ACTION WITHOUT MEETING. - ---------------------------- Any action which may be authorized or taken at any meeting of shareholders may be authorized or taken without a meeting in a writing or writings signed by all of the holders of shares who would be entitled to notice of a meeting of the shareholders held for such purpose. Such writing or writings shall be filed with or entered upon the records of the Company. 2.13 ORGANIZATION OF MEETINGS. - ------------------------------ The Chairman of the Board of the Company, or, in his absence, the President of the Company, or, in the absence of both of them, a Vice President of the Company, shall call all meetings of the shareholders of the Company to order and shall act as Chairman thereof; PROVIDED, HOWEVER, if all of such persons are absent, then the shareholders of the Company shall elect a Chairman. The Secretary of the Company, or, in his absence, an Assistant Secretary, or, in the absence of both, a person appointed by the Chairman of the meeting, shall act as Secretary of the meeting and shall keep and make a record of the proceedings thereat. 2.14 ORDER OF BUSINESS. - ----------------------- The order of business at all meetings of the shareholders of the Company, unless waived or otherwise changed by the Chairman of the meeting or the Board, shall be as follows: (i) call meeting to order; (ii) selection of Chairman and/or Secretary, if necessary; (iii) proof of notice of meeting and presentment of affidavit thereof; (iv) roll call, including filing of proxies with the Secretary of the meeting; (v) upon appropriate demand, appointment of inspectors of election; (vi) reading, correction and approval of previously unapproved minutes; (vii) reports of officers and committees; (viii) if annual meeting or meeting called for that purpose, election of directors of the Company; (ix) unfinished business, if adjourned meeting; (x) consideration in sequence of all other matters set forth in the call for and written notice of the meeting; (xi) any new business other than that set forth in the notice of the meeting which shall have been submitted to the Secretary of the Company in writing at least ten (10) days prior to the date of the meeting; and, (xii) adjournment. 2.15 LIST OF SHAREHOLDERS. - -------------------------- Before and at any meeting of shareholders of the Company, an alphabetical list of shareholders, arranged by group and class or series, showing the number and classes of shares held by each on the record date applicable to such meeting, meeting the requirements of Section 33-7-200 of the BCA and subject to the requirements of Section 33-16-102(c) of the BCA shall be made available on the request of any shareholder of the Company. ARTICLE III DIRECTORS 3.1 GENERAL POWERS OF BOARD. - ----------------------------- The powers of the Company shall be exercised, its business and affairs conducted, and its property controlled by the Board except where the law, the Articles or these Bylaws require action to be authorized or taken by the shareholders of the Company. Without prejudice to the general powers conferred by or implied in the preceding sentence, the Board shall have the power to: (i) fix, define and limit the powers and duties of all officers of the Company and to fix the salaries of all officers; (ii) appoint, and at their discretion, with or without cause, to remove or suspend such subordinate officers, assistants, managers, agents and employees of the Company as the Board may from time to time deem advisable, and to determine their duties and fix their compensation; (iii) require any officer, agent or employee of the Company to furnish a bond for faithful performance in such amount and with such sureties as the Board may approve; (iv) designate a depositary or depositaries of the funds of the Company and the officer or officers of the Company or other persons who shall be authorized to sign notes, checks, drafts, contracts, deeds, mortgages and other instruments on behalf of the Company; (v) appoint and remove transfer agents and/or registrars for the Company's shares; (vi) fix a time not exceeding forty-five (45) days preceding the date of any meeting of shareholders of the Company, or the date fixed for the payment of any dividend or distribution, or the date for the allotment of rights, or (subject to contract rights with respect thereto) the date when any change or conversion or exchange of shares shall be made or go into effect, as a record date for the determination of the shareholders entitled to notice of and to vote at any such meeting, or entitled to receive payment of any such dividend, distribution, or allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares, and, in such case, only the persons who are' shareholders of record on the date so fixed shall be entitled to notice of and to vote at such meeting, or to receive payment of such dividend, distribution, or allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Company after any record date fixed as aforesaid, or change of ownership of any shares either before or after such record date, and such persons shall conclusively be deemed to be the shareholders of the Company on such record date, notwithstanding notice or knowledge to the contrary; and the Board may close the books of the Company against transfer of shares during the whole or any part of such period; and (vii) establish such rules and regulations respecting the issuance and transfer of shares and certificates for shares as the Board may consider reasonable. 3.2 NUMBER OF DIRECTORS. - ------------------------- Until changed in accordance with the provisions of this Section, the number of directors of the Company, none of whom need be shareholders, shall be three (3). The number of directors of the Company may be fixed or changed by resolution at any annual meeting of the shareholders of the Company or at any special meeting of the shareholders of the Company called for that purpose, adopted by the vote of the holders of shares, present in person or by proxy, entitling them to exercise a majority of the voting power on such proposal of the shares represented at such meeting, but no reduction shall have the effect of removing any director prior to the expiration of his term of office. In addition, the number of directors of the Company may be fixed or changed by action of the Board at a meeting called for that purpose at which a quorum is present by a majority vote of the members of the Board present at the meeting; PROVIDED, HOWEVER, that the Board may increase or decrease the size of the Board by thirty percent (30%) or less from the number last approved by the shareholders. The directors then in office may fill any director's office that is created by an increase in the number of directors and the number of directors elected shall be deemed to be the number of directors fixed unless otherwise fixed by resolution adopted at the meeting at which such directors are elected. 3.3 ELECTION OF DIRECTORS. - --------------------------- Directors shall be elected at the annual meeting of shareholders, but when the annual meeting is not held or directors are not elected thereat, they may be elected at a special meeting called and held for that purpose. Such election shall be by ballot whenever requested by any shareholder entitled to vote at such election; but, unless such a request is made, the election may be conducted in any manner approved at such meeting. At each meeting of shareholders at which directors are to be elected only persons nominated by an officer, director or in writing by a shareholder at least five (5) days prior to the meeting shall be eligible for election and those persons receiving the greatest number of votes shall be directors. 3.4 TERM OF OFFICE. - -------------------- Directors shall hold office until the annual meeting next succeeding their election and until their successors are elected and qualified or until their earlier resignation, removal from office or death. 3.5 VACANCIES. - --------------- Vacancies in the Board may be filled by a majority vote of the remaining directors until an election to fill such vacancies is had. Shareholders entitled to elect directors shall have the right to fill any vacancy in the Board (whether the same has been temporarily filled by the remaining directors or not) at any meeting of the shareholders called for that purpose, and any directors elected at any such meeting of shareholders shall serve until the next annual election of directors and until their successors are elected and qualified. 3.6 RESIGNATION FROM THE BOARD. - -------------------------------- Resignation from the Board shall be deemed to take effect immediately upon its being received by any incumbent corporate officer other than an officer who is also the resigning director, unless some other time is specified therein. 3.7 QUALIFICATIONS. - -------------------- Directors need not be residents of South Carolina or shareholders of the Company. 3.8 REMOVAL. - ------------- Directors shall be subject to removal as provided by law or by other lawful procedures and nothing herein shall be construed to prevent the removal of any or all directors in accordance therewith. 3.9 MEETINGS OF THE BOARD. - --------------------------- A regular meeting of the Board may be held immediately following the adjournment of each shareholders' meeting at which directors are elected. The holding of such shareholders' meeting shall constitute notice of such Board meeting and such meeting shall be held without further notice. Other regular meetings shall be held at such other times and places as may be fixed by the Board. Special meetings of the Board may be held at any time upon call of the Chairman of the Board, President, or any two members of the Board. Notice of any special meeting of the Board of Directors shall be mailed to each director, addressed to him at his residence or usual place of business, at least two (2) days before the day on which the meeting is to be held, or shall be sent to him at such place by facsimile, telegraph, cable, radio or wireless, or be given personally or by telephone, not later than the day before the day on which the meeting is to be held. Every such notice shall state the time and place of the meeting but need not state the purpose or purposes thereof. Notice of any meeting of the Board need not be given to any director, however, if waived by him in writing or by facsimile, telegraph, cable, radio or wireless, whether before or after such meeting, or if he shall be present at such meeting without protest prior to the commencement thereof; and any meeting of the Board shall be a legal meeting without any notice thereof having been given if all the directors shall be present thereat. All meetings of the Board shall be held at the office of the Company in the County of Anderson, South Carolina, or at such other place, within or without the State of South Carolina, as the Board may determine from time to time and as may be specified in the notice thereof. 3.10 QUORUM. - ------------ A majority of the Board shall constitute a quorum for the transaction of business; PROVIDED, HOWEVER, that whenever less than a quorum is present at the time and place appointed for any meeting of the Board, a majority of those present may adjourn the meeting from time to time, without notice other than by announcement at the meeting, until a quorum shall be present. At any meeting at which a quorum is present, all acts, questions and business which may come before the meeting shall be determined by a majority of votes cast by the members of the Board present at such meeting, unless the vote of a greater number is required by the Articles or these Bylaws. 3.11 ACTION WITHOUT A MEETING. - ------------------------------ Any action which may be authorized or taken at a meeting of the directors may be authorized or taken without a meeting in a writing or writings signed by all the directors, which writing or writings shall be filed with or entered upon the records of the Company. 3.12 COMPENSATION. - ------------------ The directors, as such, shall not receive any salary for their services, but by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; PROVIDED, HOWEVER, that nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity and receiving compensation therefor. Members of the executive committee or of any standing or special committee may by resolution of the Board be allowed such compensation for their services as the Board may deem reasonable, and additional compensation may be allowed to directors for special services rendered. 3.13 ATTENDANCE AT MEETINGS BY PERSONS WHO ARE NOT DIRECTORS. - ------------------------------------------------------------- Unless waived by a majority of the members of the Board in attendance, not less than twenty-four (24) hours before any regular or special meeting of the Board, any director who desires the presence at such meeting of not more than two (2) persons who are not directors shall so notify all other directors, request the presence of such person or persons at the meeting and state the reason in writing. Such person or persons shall not be permitted to attend the meeting of the Board unless a majority of the directors in attendance vote to admit such person to the meeting. Such vote shall constitute the first order of business for any such meeting of the Board. Such right to attend, whether granted by waiver or vote, may be revoked at any time during any such meeting by the vote of a majority of the members of the Board in attendance. Notwithstanding anything contained in this Section to the contrary, any shareholder of the Company shall be permitted to attend any meeting of the Board and shall receive not less than twenty-four (24) hours notice of such meeting given in accordance with Section 9 of this Article; PROVIDED, HOWEVER, that such shareholder(s) may be excused at any time by the action of a majority of the members of the Board in attendance. 3.14 COMMITTEES. - ---------------- The Board may by resolution provide for such standing or special committees as it deems desirable, and discontinue the same at its pleasure. Each such committee shall have such powers and perform such duties, not inconsistent with law, as may be delegated to it by the Board. Vacancies in such committees shall be filled by the Board or as it may provide. ARTICLE IV OFFICERS -------- 4.1 GENERAL PROVISIONS. - ------------------------ The Board shall elect a President, such number of Vice Presidents as the Board may from time to time determine, a Secretary and a Treasurer, and, in its discretion, a Chairman of the Board. The Board may from time to time create such other offices and appoint such other officers, subordinate officers and assistant officers as it may determine. The Chairman of the Board shall be, but the other officers need not be, chosen from among the members of the Board. Any two or more of such offices, other than that of President and Vice President, Secretary and Assistant Secretary, or Treasurer and Assistant Treasurer, may be held by the same person, and any officer may execute, acknowledge or verify any instrument in more than one capacity if such instrument is required to be executed, acknowledged or verified by two or more officers. All officers, as between themselves and the Company, shall respectively have such authority and perform such duties as are customarily incident to their respective offices, and as may be specified from time to time by these Bylaws and the Board, regardless of whether such authority and duties are customarily incident to such office. In the absence of any officer of the Company, or for any other reason the Board may deem sufficient, the powers or duties of such officer or any of them may be delegated to any other officer or to any director of the Company. The Board may from time to time delegate to any officer authority to appoint and remove subordinate officers and to prescribe their authority and duty. The powers and duties of the officers described in Article IV of these Bylaws are subject to change from time to time by the Board. 4.2 TERM OF OFFICE. - -------------------- The officers of the Company shall hold office at the pleasure of the Board, and unless sooner removed by the Board, until the meeting of the Board following the date of their election and until their successors are elected and qualified. The Board may remove any officer at any time, with or without cause, by a majority vote. A vacancy in any office, however created, shall be filled by the Board. 4.3 CHAIRMAN OF THE BOARD. - --------------------------- The Chairman of the Board, if one be elected, shall preside at all meetings of the Board and shall have such other powers and duties as may be prescribed by the Board. 4.4 PRESIDENT. - --------------- The President shall be the chief executive and operating officer of the Company and shall exercise supervision over the business of the Company and over its several officers, subject, however, to the control of the Board. He or she shall preside at all meetings of shareholders and, in the absence of, or if a Chairman of the Board shall not have been elected, shall also preside at meetings of the Board. He or she shall have authority to sign all certificates for shares and all deeds, mortgages, bonds, contracts, notes and other instruments requiring his signature; and shall have all the powers and duties prescribed by the SOUTH CAROLINA BUSINESS CORPORATION ACT OF 1988, as amended (the "Act") and such others as the Board may from time to time assign to him or her. 4.5 VICE PRESIDENTS. - --------------------- The Vice Presidents shall perform such duties as are conferred upon them by these Bylaws or as may from time to time be assigned to them by the Board or the President. At the request of the President, or in his or her absence or disability, the Vice President designated by the President (or in the absence of such designation, the Vice President designated by the Board) shall perform all the duties of the President, and when so acting, shall have all the powers of the President. The authority of Vice Presidents to sign in the name of the Company all certificates for shares and authorized deeds, mortgages, bonds, contracts, notes and other instruments shall be coordinated with like authority of the President. Any one or more of the Vice Presidents may be designated as an "Executive Vice President." 4.6 SECRETARY. - --------------- The Secretary shall keep minutes of all the proceedings of the shareholders and Board and shall make proper record of the same, which shall be attested by him or her; sign all certificates for shares, and all deeds, mortgages, bonds, contracts, notes, and other instruments executed by the Company requiring his or her signature; give notice of meetings of shareholders and directors; produce on request at each meeting of shareholders for the election of directors a certified list of shareholders arranged in alphabetical order; keep such books as may be required by the Board; and perform such other and further duties as may from time to time be assigned to him or her by the Board or by the President. 4.7 TREASURER. - --------------- The Treasurer shall have general supervision of all finances; he or she shall receive and have in charge all money, bills, notes, deeds, leases, mortgages and similar property belonging to the Company and shall do with the same as may from time to time be required by the Board of Directors. He or she shall cause to be kept adequate and correct accounts of the business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, stated capital, and shares, together with such other accounts as may be required, and, upon the expiration of his or her term of office, shall turn over to his or her successor or to the Board all property, books, papers and money of the Company in his or her hands; and he or she shall perform such other duties as from time to time may be assigned to him or her by the Board. 4.8 ASSISTANT AND SUBORDINATE OFFICERS. - ---------------------------------------- The Board may appoint such assistant and subordinate officers as it may deem desirable. Each such officer shall hold office during the pleasure of the Board and perform such duties as the Board may prescribe to appoint prescribe their compensation. The Board may, from time to time, authorize any officer and remove assistant and subordinate officers, to authority and duties, and to fix their compensation. ARTICLE V CERTIFICATES FOR SHARES ----------------------- 5.1 FORM AND EXECUTION. - ------------------------ Certificates for shares shall be issued to each shareholder in such form as shall be approved by the Board. Such certificates shall be signed by the Chairman of the Board, the President or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of the Company, which certificates shall certify the number and class of shares held by the shareholder in the Company, but no certificate for shares shall be issued and delivered until such shares are fully paid. When such a certificate is countersigned by an incorporated transfer agent or registrar, the signature of any of said officers of the Company may be facsimile, engraved, stamped or printed. Although any officer of the Company whose manual or facsimile signature is affixed to a share certificate shall cease to be such officer before the certificate is delivered, such certificate, nevertheless, shall be effective in all respects when delivered. Such certificate for shares shall be transferable in person or by attorney, but, except as hereinafter provided in the case of lost, mutilated or destroyed certificates, no transfer of shares shall be entered upon the records of the Company until the previous certificate, if any, given for the same shall have been surrendered and canceled. The Board shall have authority to make such rules and regulations, not inconsistent with law, the Articles or these Bylaws, as it deems expedient concerning the issuance, transfer and registration of certificates for shares and the shares represented thereby and may appoint transfer agents and registrars thereof. 5.2 LOST, MUTILATED OR DESTROYED CERTIFICATES. - ----------------------------------------------- If any certificate for shares is lost, mutilated or destroyed, the Board may authorize the issue of a new certificate in place thereof upon such terms and conditions as it may deem advisable. The Board in its discretion may refuse to issue such new certificates until the Company has been indemnified to its satisfaction and until it is protected to its satisfaction by a final order or decree of a court of competent jurisdiction. 5.3 REGISTERED SHAREHOLDERS. - ----------------------------- A person in whose name shares are of record on the books of the Company shall conclusively be deemed the unqualified owner thereof for all purposes and to have capacity to exercise all rights of ownership. Neither the Company nor any transfer agent of the Company shall be bound to recognize any equitable interest in or claim to such shares on the part of any other person, whether disclosed upon such certificate or otherwise, nor shall they be obliged to see to the execution of any trust or obligation. ARTICLE VI INDEMNIFICATION OF DIRECTORS AND OFFICER ---------------------------------------- Each person who at any time is or shall have been a director and, at the option of the Board, each person who at any time is or shall have been an officer, employee or agent of the Company, or is or shall have been serving at the request of the Company as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, and his heirs, executors and administrators shall be indemnified by the Company in accordance with and to the fullest extent permitted by the Act as in effect at the time of the adoption of these Bylaws or as amended from time to time thereafter. The foregoing right of indemnification shall not be deemed exclusive of other rights to which any director, officer, trustee, employee, agent or other person may be entitled in any capacity as a matter of law or under any regulation, agreement, vote of the Board or otherwise. If authorized by the Board, the Company may purchase and maintain insurance against liability on behalf of any such person to the full extent permitted by the Act as in effect at the time of the adoption of these Bylaws or as amended from time to time thereafter. The right of indemnification conferred herein shall be extended to any threatened action, suit or proceeding, and the failure to institute it shall be deemed its final determination. Advances may be made by the Company against costs, expenses and fees, as and upon the terms determined by the Board. If the Company indemnifies or advances expenses to a director pursuant to Section 33-8-510, 33-8-530 or 33-8-540 or Article VI hereof in connection with a proceeding by or in the right of the Company, the Company shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholder meeting. ARTICLE VII FISCAL YEAR ----------- The fiscal year of the Company will end on such day as may be fixed from time to time by the Board. ARTICLE VIII AMENDMENTS ---------- These Bylaws may be amended, repealed or added to at any meeting of shareholders called for that purpose by the affirmative vote of the holders of record of shares entitling them to exercise a majority of the voting power on such proposal or, without a meeting, by the written consent of the holders of record of shares entitling them to exercise a majority of the voting power on such proposal; PROVIDED, HOWEVER, that if an amendment or addition is adopted by written consent without a meeting of the shareholders, it shall be the duty of the Secretary of the Company to enter the amendment or addition in the records of the Company, and to mail a copy of such amendment or addition to each shareholder of record who would be entitled to vote thereon and did not participate in the adoption thereof; PROVIDED, FURTHER, HOWEVER, that no amendment or addition to these Bylaws shall be made if such amendment or addition is inconsistent with the Articles. ARTICLE IX SEAL ---- The Board may, in its discretion, provide a suitable seal containing the name of the Company. If deemed advisable by the Board, duplicate seals may be provided and kept for the purpose of the Company. ARTICLE X CONSISTENCY WITH ARTICLES AND CORPORATION AQREEMENT --------------------------------------------------- If any provision of these Bylaws shall be inconsistent with the Articles as in effect at the time of the adoption of these Bylaws or as amended from time to time, the Articles, as in effect at the time, shall govern and control. If any provision of these Bylaws shall be inconsistent with the 1995 Close Corporation Agreement (the "Corporation Agreement") made and entered into as of August 7, 1995 among the Company and the shareholders of the Company, a copy of which is on file with the Secretary of the Company, the Corporation Agreement, as in effect at the time, shall Govern and control. ARTICLE XI MISCELLANEOUS ------------- 11.1 SECTION HEADINGS. - ---------------------- The headings contained in these Bylaws are for reference purposes only and shall not be construed to be part of and/or shall not affect in any way the meaning or interpretation of these Bylaws. 11.2 GENDER. - ------------ Unless the context otherwise requires a different meaning, words of a masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders, words importing the singular number shall include the plural number and vice versa, and the terms "hereof", "hereby", "hereto", "hereunder", "herein" and similar terms mean these Bylaws. 11.3 COMPUTATION OF DAYS. - ------------------------- Unless otherwise provided in these Bylaws, in computing the number of days for any purpose under these Bylaws, all days shall be counted including Saturdays, Sundays and holidays. -1- EX-3.25 17 MEMORANDUM OF ASSOCIATION OF NIM HOLDINGS No 3558202 THE COMPANIES ACTS 1985 TO 1989 _________________________________ COMPANY LIMITED BY SHARES _________________________________ MEMORANDUM OF ASSOCIATION OF _______________________ NIM HOLDINGS LIMITED _______________________ A. The Company's Name is NIM HOLDINGS LIMITED B. The Company's Registered Office is to be situated in England and Wales. C. The Company's objects are: 1. Without prejudice to the objects hereinafter specified to carry on business as a General Commercial Company. 2. To carry an any other business which may seem to the Company to be capable of being conveniently or advantageously carried on in connection or conjunction with any business of the Company with a view directly or indirectly to enhancing the value of or to render profitable or more profitable any of the Company's property, assets or rights or expertise. 3. To purchase or otherwise acquire and undertake all or any part of the business property and liabilities of any company, firm, person or body carrying on or proposing to carry on any business which the Company is authorized to carry on or possessed of property suitable for the purposes of the Company. 4. To purchase or otherwise acquire take on lease or in exchange, let or hire any real or personal property or assets or any rights or privileges which the Company may think necessary or convenient or capable of being profitably dealt with in such manner as may be thought fit. 5. To amalgamate or enter into any partnership or into any arrangement or other association for sharing profits union of interests, co-operation, joint adventure, reciprocal concession or otherwise with any company, firm, person or body carrying on or engaged in or about to carry on or engage in any business or transactions which the Company is authorized to carry on or engage in or any business transaction capable of being conducted so as directly or indirectly to benefit the Company. 6. To subscribe, underwrite, purchase or otherwise acquire shares or stock in or securities or investments of any nature whatsoever and to subsidize or otherwise assist any such company and with or without guarantee to sell, hold, re-issue or otherwise deal with such shares, investments, stock or securities and any rights or options in respect thereof and to buy and sell foreign exchange. 7. To build, develop, construct, maintain, alter, enlarge, pull down, remove or replace any buildings, works, factories, roads, structures or facilities of all kinds and plant and machinery necessary or convenient for the business of the Company and to join with any person, firm or company in doing any of the things aforesaid. 8. To enter into any arrangements with any Government or Authorities supreme, municipal, local or otherwise and to obtain from any such Government or Authority all rights, concessions, authorizations and privileges that may seem conducive to the Company's objects or any of them. 9. To obtain the grant of, purchase or otherwise acquire any concessions, contracts, licenses, grants, trade marks, copyrights or rights of any kind, patents, inventions, privileges, exclusive or otherwise, authorities, monopolies, undertakings or businesses, or any right or option in relation thereto, and to perform and fulfill the terms and conditions thereof, and to carry the same into effect, operate thereunder, develop, grant licenses thereunder, and turn to account, maintain or sell, dispose of, and deal with the same in such manner as the Company may think expedient. 10. To apply for, promote and obtain any provisional order, Act of Parliament or charter for enabling the Company to carry any of its objects into effect or for effecting any modification of the Company's constitution or for any other purpose which may seem expedient and to oppose any proceedings or applications which may seem calculated directly or indirectly to prejudice the Company's interests. 11. To promote or join in the promotion of any company for the purpose of acquiring all or any of the business, property, assets, rights and liabilities of any company whether or not having objects similar to those of the Company or for any other purpose which may seem directly or indirectly calculated to benefit the Company and to place or guarantee the placing of, underwrite, subscribe for or otherwise acquire all or any part of the shares, debentures or other securities of any such other company. 12. To enter into any arrangements or contracts with any person, firm or company for carrying on the whole or any part of the business of the Company, and to fix and determine their remuneration, which may be by way of money payment, allotment of shares (either fully or partly paid) or otherwise. 13. To sell, exchange, lease, grant licenses, dispose of, turn to account or otherwise deal with the whole of the undertaking, property, assets, rights and effects of the Company or any part thereof for such consideration as may be considered expedient and in particular shares, stock or other securities whether fully or partly paid up. 14. To pay for any rights or property acquired by the Company, and to remunerate any person, firm or company rendering services to the Company whether by cash payment or by the allotment of shares, debentures or other securities of the Company credited as paid up in full or in part or in any other manner whatsoever, and to pay all or any of the preliminary expenses of the Company and of any company formed or promoted by the Company. 15. To invest the monies of the Company not immediately required for any other purpose of the Company by the purchase of the shares or securities of any company or by the purchase of any interest in land or buildings or in such other manner as shall from time to time be considered expedient. 16. To guarantee the payment of any debentures, debenture stock, bonds, mortgages, charges, obligations, interest, dividends, securities, monies or shares or the performance of contracts or engagements of any other company, firm or person and to give indemnities and guarantees of all kinds and to enter into partnership or any joint purse arrangement with any person, firm or Company having objects similar to those of the Company or any of them. 17. To guarantee or give indemnities or provide security whether by personal obligation or covenant or by mortgaging or charging all or any part of the undertaking, property and assets both present and future and uncalled capital of the Company, or by all or any of such methods, the performance of any contracts or obligations of any person, firm or company whatsoever. 18. To advance, lend or deposit money or give credit to or with any company, firm or person on such terms as may be thought fit and with or without security. 19. To draw, make, accept, endorse, discount, execute and issue, and to buy, sell and deal with bills of exchange, promissory notes, debentures, bills of lading, warrants and other negotiable or transferable instruments or securities. 20. To raise or borrow and to secure or discharge any debt or obligation of the Company, and to receive money on deposit or loan in such a manner and on such terms as may seem expedient and in such manner as may be thought fit and in particular by mortgages and charges and the issue of debentures or debenture stock or other securities of any description upon all or any part of the undertaking, property, assets and rights of the Company both present and future including any uncalled capital of the Company. 21. To establish and maintain or contribute to any scheme for the acquisition by trustees of shares in the Company or its holding company to be held by or for the benefit of employees (including any Director holding a salaried employment or office) of the Company or (so far as for the time being permitted by law) any of the Company's subsidiaries and to lend money (so far as aforesaid) to any such employees to enable them to acquire shares of the Company or its holding company and to formulate and carry into effect any scheme for sharing profits with any such employees. 22. To establish and maintain or procure the establishment and maintenance of any contributory or non-contributory pension or super-annuation funds for the benefit of, and to give or procure the giving of donations, gratuities, pensions, allowances or emoluments to any persons who are or were at any time in the employment or service of the Company or of any company which is a subsidiary of the Company or any such holding company or otherwise is allied to or associated with the Company, or who are or were at any time directors or officers of the Company or of any such other company, and the wives, widows, families and dependants of any such persons; to establish and subsidize and subscribe to any institutions, associations, clubs or funds calculated to be for the benefit of or to advance the interests and well-being of the Company or of any such other company and make payments to or towards the insurance of any such person and do any of the matters aforesaid either alone or in conjunction with any such other company as aforesaid. 23. To purchase and maintain insurance for or for the benefit of any person or persons who are or were at any time directors, officers or employees or auditors of the Company, or of any other company which is its holding company, or any company which is associated with the Company, or of any subsidiary undertaking of the Company or trustees of any pension fund in which any employees of the Company or of any such other company or subsidiary undertaking are interested, including (without prejudice to the generality of the foregoing) insurance against any liability incurred by such persons in respect of any act or omission in the actual or purported execution and/or discharge of their duties and/or in the exercise or purported exercise of their powers and/or otherwise in relation to their duties, powers or offices in relation to the Company or any such other company, subsidiary undertaking or pension fund and to such extent as may be permitted by law to indemnify or to exempt any such person against or from any such liability; for the purposes of this clause "holding company" and "subsidiary undertaking" shall have the same meanings as in the Companies Act 1985 as amended by the Companies Act 1989. 24. To distribute among the members of the Company in specie or otherwise any property or assets of the Company subject to any consent required by law. 25. To procure the registration, recognition or incorporation of the Company in or under the laws of any territory outside England. 26. To issue any securities which the Company has power to issue for any other purpose by way of security or indemnity or in satisfaction of any liability undertaken or agreed to be undertaken by the Company. 27. To guarantee or otherwise support or secure, either with or without the Company receiving any consideration or advantage and whether by personal covenant or by mortgaging or charging all or any part of the undertaking, property, assets, rights and revenues (present and future) and uncalled capital of the Company, or by both such methods or by any other means whatsoever, the discharge and performance respectively of the liabilities and obligations of and the repayment or payment of any moneys whatsoever by any person, firm or company, including (but not limited to): (i) the discharge and performance respectively of any liabilities and obligations whatsoever of, and the repayment or payment of any moneys whatsoever by, any company which is for the time being or is likely to become the Company's holding company or a subsidiary of the Company or another subsidiary of the Company's holding company (the terms "holding company" and "subsidiary" having the meanings given to them by Section 736 of the Companies Act 1985) or otherwise associated with the Company in business; and (ii) the discharge and performance respectively of any liabilities and obligations incurred in connection with or for the purpose of the acquisition of shares in the Company or in any company which is for the time being the Company's holding company insofar as the giving of any such guarantee or other support or security is not prohibited by law; and (iii) the repayment or payment of the principal amounts of, and premiums, interest and dividends on, any borrowings and securities. 28. To the extent that the same is permitted by law to give financial assistance for the purpose of the acquisition of shares in the Company or in the Company's holding company (as that term is defined by Section 736 of the Companies Act 1985) for the time being and for the purpose of reducing or discharging a liability incurred for the purpose of such an acquisition and to give such assistance by means of a gift, loan or guarantee, indemnity, the provision of security or otherwise howsoever permitted by law. 29. To do all or any of the things and matters aforesaid in any part of the world, and either as principals, agents, contractors, trustees or otherwise, and by or through subsidiary companies, agents, sub-contractors or trustees or otherwise, and either alone or in conjunction with others. 30. To do all such other things as may be considered to be incidental or conducive to any of the above objects. And it is hereby declared that the objects of the Company as specified in each of the foregoing paragraphs of this clause shall be separate and distinct objects and shall not be restrictively construed but the widest interpretation shall be given thereto, and they shall not, except where the context expressly so requires, be in any way limited or restricted by reference to or inference from the terms of any other sub- clause or the order in which the same occur or by the name of the Company. A. The liability of the Members is limited. B. The Authorized Share Capital of the Company is 1,000 divided into 1,000 Ordinary Shares of 1 each. Note: Clauses 3 (27) and (28) inserted by special resolution dated 2 July 1998 WE, the Subscribers to this Memorandum of Association wish to be formed into a Company pursuant to this Memorandum; and we agree to take the number of shares shown opposite our respective names.
NAMES and ADDRESSES of SUBSCRIBERS Number of Shares taken by each Subscriber EMMANUEL COHEN ONE 2{nd} Floor 80 Great Eastern Street London EC2A 3JL VIOLET COHEN ONE 2{nd} Floor 80 Great Eastern Street London EC2A 3JL Company Director Total shares taken TWO DATED the 28{TH} DAY OF APRIL 1998 WITNESS to the above signatures: RM COMPANY SERVICES LIMITED 2{nd} Floor 80 Great Eastern Street London EC2A 3JL Company Formation Agent
EX-3.26 18 ARTICLES OF ASSOCIATION OF NIM HOLDINGS THE COMPANIES ACT 1985 PRIVATE COMPANY LIMITED BY SHARES ARTICLES OF ASSOCIATION OF NIM HOLDINGS LIMITED Adopted by Special Resolution passed 2 July 1998 1. PRELIMINARY - ---------------- The regulations contained in Table A in the Schedule to the Companies (Table A to F) Regulations 1985 in force at the time of adoption of these Articles (such Table being hereinafter called "Table A") shall apply to the Company save insofar as they are excluded or varied by these Articles and such regulations (save as so excluded or varied) and these Articles shall be the regulations of the Company. 2. INTERPRETATION - ------------------- In these Articles and in Table A the following expressions have the following meanings unless inconsistent with the context: "the Act" the Companies Act 1985 including any statutory modification or re-enactment thereof for the time being in force. "these Articles" these Articles of Association, whether as originally adopted or as from time to time altered by special resolution. "clear days" in relation to the period of a notice means that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect. "the directors" the directors for the time being of the Company or (as the context shall require) any of them acting as the board of directors of the Company but such expression shall not include any associate directors (as hereinafter defined) who shall not be deemed to be directors of the Company for any purpose whatsoever. "executed" includes any mode of execution. "the holder" in relation to shares means the member whose name is entered in the register of members as the holder of the shares. "office" the registered office of the Company. "seal" the common seal of the Company (if any). "secretary" the secretary of the Company or any other person appointed to perform the duties of the secretary of the Company, including a joint, assistant or deputy secretary. "share" includes any interest in a share. "the United Kingdom" Great Britain and Northern Ireland. Unless the context otherwise requires, words or expressions contained in these Articles and in Table A bear the same meaning as in the Act but excluding any statutory modification thereof not in force when these Articles become binding on the Company. Regulation 1 of Table A shall not apply to the Company. 3. SHARE CAPITAL - ------------------ 3.1 No shares comprised in the authorized share capital of the Company from time to time shall be issued without the consent in writing of the holder or holders (in aggregate) of a majority of the voting rights in the Company (within the meaning of Section 736A(2) of the Act) nor shall any share be issued at a discount or otherwise be issued in breach of the provisions of these Articles or of the Act. 3.2 Regulation 4 of Table A and, in accordance with Section 91(1) of the Act, sections 89(1) and 90(1) to (6) (inclusive) of the Act shall not apply to the Company. 4. LIEN - --------- Save in respect of any share registered in the name of Berry Plastics Corporation, the Company shall have a first and paramount lien on all shares, whether fully paid or not, standing registered in the name of any person indebted or under liability to the Company, whether he shall be the sole registered holder thereof or shall be one of two or more joint holders, for all moneys presently payable by him or his estate to the Company. Regulation 8 of Table A shall be modified accordingly. 5. CALLS ON SHARES AND FORFEITURE - ----------------------------------- There shall be added at the end of the first sentence of regulation 18 of Table A, so as to increase the liability of any member in default in respect of a call, the words "and all expenses that may have been incurred by the Company by reason of such non-payment." 6. TRANSFER OF SHARES - ----------------------- 6.1 The first sentence in regulation 24 of Table A shall not apply to the Company. The words "They may also" at the beginning of the second sentence of that regulation shall be replaced by the words "The directors may". 6.2 Notwithstanding anything contained in these Articles, the directors shall not decline to register any transfer of shares, nor may they suspend registration thereof where such a transfer is executed by any bank or institution to whom such shares have been charged by way of security, or by any nominee of such a bank or institution, pursuant to the power of sale under such security, and a certificate by any official of such bank or institution that the shares were so charged and the transfer was so executed shall be conclusive evidence of such facts. 7. GENERAL MEETINGS - --------------------- The directors may call general meetings and regulation 37 of Table A shall not apply to the Company. 8. NOTICE OF GENERAL MEETINGS - ------------------------------- 8.1 A notice convening a general meeting shall be required to specify the general nature of the business to be transacted only in the case of special business and regulation 38 of Table A shall be modified accordingly. The words "or a resolution appointing a person a director" and paragraphs (a) and (b) in regulation 38 of Table A shall be deleted and the words "in accordance with section 369(3) of the Act" shall be inserted after the words "if it is so agreed" in that regulation. 8.2 All business shall be deemed special that is transacted at an extraordinary general meeting, and also all that is transacted at an annual general meeting with the exception of declaring a dividend, the consideration of the profit and loss account, balance sheet, and the reports of the directors and auditors, the appointment of and the fixing of the remuneration of the auditors and the giving or renewal of any authority in accordance with the provisions of section 80 of the Act. 8.3 Every notice convening a general meeting shall comply with the provisions of section 372(3) of the Act as to giving information to members in regard to their right to appoint proxies; and notices of and other communications relating to any general meeting which any member is entitled to receive shall be sent to the directors and to the auditors for the time being of the Company. 9. PROCEEDINGS AT GENERAL MEETINGS - ------------------------------------ 9.1 The words "save that, if and for so long as the Company has only one person as a member, one member present in person or by proxy shall be a quorum" shall be added at the end of the second sentence of regulation 40 of Table A. 9.2 If a quorum is not present within half an hour from the time appointed for a general meeting the general meeting shall stand adjourned to the same day in the next week at the same time and place or to such other day and at such other time and place as the directors may determine; and if at the adjourned general meeting a quorum is not present within half an hour from the time appointed therefor the member or members present in person or by proxy or (being a corporate body) by representative and entitled to vote upon the business to be transacted shall constitute a quorum and shall have power to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment took place. Regulation 41 of Table A shall not apply to the Company. 10. VOTES OF MEMBERS - --------------------- 10.1 Regulation 54 of Table A shall not apply to the Company. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a show of hands every member entitled to vote who (being an individual) is present in person or by proxy (not being himself a member entitled to vote) or (being a corporate body) is present by a representative or proxy (not being himself a member entitled to vote) shall have one vote and, on a poll, every member shall have one vote for each share of which he is the holder. 10.2 The words "be entitled to" shall be inserted between the words "shall" and "vote" in regulation 57 of Table A. 10.3 A member shall not be entitled to appoint more than one proxy to attend on the same occasion and accordingly the final sentence of regulation 59 of Table A shall not apply to the Company. Any such proxy shall be entitled to cast the votes to which he is entitled in different ways. 11. NUMBER OF DIRECTORS - ------------------------ 11.1 Regulation 64 of Table A shall not apply to the Company. 11.2 The maximum number and minimum number respectively of the directors may be determined from time to time by ordinary resolution. Subject to and in default of any such determination there shall be no maximum number of directors and the minimum number of directors shall be one. 12. ALTERNATE DIRECTORS - ------------------------ 12.1 An alternate director shall be entitled to receive notice of all meetings of the directors and of all meetings of committees of the directors of which his appointer is a member (subject to his giving to the Company an address within the United Kingdom at which notices may be served on him), to attend and vote at any such meeting at which the director appointing him is not personally present, and generally to perform all the functions of his appointor at such meeting as a director in his absence. An alternate director shall not be entitled as such to receive any remuneration from the Company, save that he may be paid by the Company such part (if any) of the remuneration otherwise payable to his appointor as such appointor may by notice in writing to the Company from time to time direct. Regulation 66 of Table A shall not apply to the Company. 12.2 A director, or any such other person as is mentioned in regulation 65 of Table A may act as an alternate director to represent more than one director, and an alternate director shall be entitled at any meeting of the directors or of any committee of the directors to one vote for every director whom he represents in addition to his own vote (if any) as a director, but he shall count as only one for the purpose of determining whether a quorum is present and the final sentence of regulation 88 shall not apply to the Company. 12.3 Save as otherwise provided in the regulations of the Company, an alternate director shall be deemed for the purposes specified in Article 12.1 to be a director and shall alone be responsible for his own acts and defaults and he shall not be deemed to be the agent of the director appointing him. Regulation 69 of Table A shall not apply to the Company. 13. APPOINTMENT AND RETIREMENT OF DIRECTORS - -------------------------------------------- 13.1 The directors shall not be required to retire by rotation and regulations 73 to 80 (inclusive) of Table A shall not apply to the Company. 13.2 A member or members holding a majority of the voting rights in the Company (within the meaning of section 736A(2) of the Act) shall have power at any time, and from time to time, to appoint any person to be a director, either as an additional director (provided that the appointment does not cause the number of directors to exceed any number determined in accordance with Article 11.2 as the maximum number of directors for the time being in force) or to fill a vacancy and to remove from office any director howsoever appointed. Any such appointment or removal shall be made by notice in writing to the Company signed by the member or members taking the same or, in the case of a member being a corporate body, signed by one of its directors or duly authorized officers or by its duly authorized attorney and shall take effect upon lodgement of such notice at the office. 13.3 The Company may by ordinary resolution appoint any person who is willing to act to be a director, either to fill a vacancy or as an additional director. 13.4 The directors may appoint a person who is willing to act to be a director, either to fill a vacancy or as an additional director, provided that the appointment does not cause the number of directors to exceed any number determined in accordance with Article 11.2 as the maximum number of directors for the time being in force. 14. DISQUALIFICATION AND REMOVAL OF DIRECTORS - ---------------------------------------------- The office of a director shall be vacated if: 14.1 he ceases to be a director by virtue of any provision of the Act or these Articles or he becomes prohibited by law from being a director; or 14.2 he becomes bankrupt or makes any arrangement or composition with his creditors generally; or 14.3 he is, or may be, suffering from mental disorder and either: 14.3.1 he is admitted to hospital in pursuance of an application for admission for treatment under the Mental Health Act 1983 or, in Scotland, an application for admission under the Mental Health (Scotland) Act 1960, or 14.3.2 an order is made by a court having jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder for his detention or for the appointment of a receiver, curator bonis or other person to exercise powers with respect to his property or affairs; or 14.4 he resigns his office by notice to the Company; or 14.5 he shall for more than six consecutive months have been absent without permission of the directors from meetings of the directors held during that period and the directors resolve that his office be vacated; or 14.6 he is removed from office as a director pursuant to Article 13.2; and 14.7 regulation 81 of Table A shall not apply to the Company. 15. GRATUITIES AND PENSIONS - ---------------------------- Regulation 87 of Table A shall not apply to the Company and the directors may exercise any powers of the Company conferred by its Memorandum of Association to give and provide pensions, annuities, gratuities or any other benefits whatsoever to or for past or present directors or employees (or other dependants) of the Company or any subsidiary or associated undertaking (as defined in section 27(3) of the Companies Act 1989) of the Company and the directors shall be entitled to retain any benefits received by them or any of them by reason of the exercise of any such powers. 16. PROCEEDINGS OF THE DIRECTORS - --------------------------------- 16.1 Whensoever the minimum number of the directors shall be one pursuant to the provisions of Article 11.2 a sole director shall have authority to exercise all the powers and discretions which are expressed by Table A and by these Articles to be vested in the directors generally and regulations 89 and 90 of Table A shall be modified accordingly. 16.2 Subject to the provisions of the Act, and provided that he has disclosed to the directors the nature and extent of any interest of his, a director notwithstanding his office: 16.2.1 may be a party to or otherwise interested in any transaction or arrangement with the Company or in which the Company is in any way interested; 16.2.2 may be a director or other office of or employed by or be a party to any transaction or arrangement with or otherwise interested in any corporate body promoted by the Company or in which the Company is in any way interested; 16.2.3 may or any firm or company of which he is a member or director may act in a professional capacity for the Company or any corporate body in which the Company is in any way interested; 16.2.4 shall not by reason of his office be accountable to the Company for any benefit which he derives from such office, service or employment or from any such transaction or arrangement or from any interest or any such corporate body and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit; and 16.2.5 shall be entitled to vote on any resolution and (whether or not he shall vote) be counted in the quorum on any matter referred to in any of Articles 16.2.1 to 16.2.4 (inclusive) or on any resolution which in any way concerns or relates to a matter in which he has, directly or indirectly, any kind of interest whatsoever and if he shall vote on any resolution as aforesaid his vote shall be counted. 16.3 For the purposes of Article 16.2: 16.3.1 a general notice to the directors that a director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the director has an interest in any such transaction of the nature and extent so specified; 16.3.2 an interest of which a director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interest of his; and 16.3.3 an interest of a person who is for any purpose of the Act (excluding any statutory modification not in force when these Articles were adopted) connected with a director shall be treated as an interest of the director and in relation to an alternate director an interest of his appointor shall be treated as an interest of the alternate director without prejudice to any interest which the alternate director has otherwise. 16.4 Any director (including an alternate director) may participate in a meeting of the directors or a committee of the directors of which he is a member by means of a conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other and participation in a meeting in this manner shall be deemed to constitute presence in person at such meeting and, subject to these Articles and the Act, he shall be entitled to vote and be counted in a quorum accordingly. Such a meeting shall be deemed to take place where the largest group of those participating is assembled or, if there is no such group, where the chairman of the meeting then is. 16.5 Regulation 88 of Table A shall be amended by substituting for the sentence: "IT SHALL NOT BE NECESSARY TO GIVE NOTICE OF A MEETING TO A DIRECTOR WHO IS ABSENT FROM THE UNITED KINGDOM" the following sentence: "NOTICE OF EVERY MEETING OF THE DIRECTORS SHALL BE GIVEN TO EACH DIRECTOR AND HIS ALTERNATE, INCLUDING DIRECTORS AND ALTERNATE DIRECTORS WHO MAY FOR THE TIME BEING BE ABSENT FROM THE UNITED KINGDOM AND HAVE GIVEN THE COMPANY AN ADDRESS WITHIN THE UNITED KINGDOM FOR SERVICE." 16.6 Regulations 94 to 97 (inclusive) of Table A shall not apply to the Company. 17. THE SEAL - ------------- If the Company has a seal it shall be used only with the authority of the directors or of a committee of the directors. The directors may determine who shall sign any instrument to which the seal is affixed and unless otherwise so determined, every instrument to which the seal is affixed shall be signed by one director and by the secretary or another director. In the second sentence of Regulation A the words "shall be sealed with the seal and" shall be deleted. Each share certificate shall only be issued by authority of the directors or of a committee of the directors authorized by the directors and shall bear the signature of one director and the company secretary or a second director. 18. NOTICES - ------------ 18.1 In regulation 112 of Table A, the words "by facsimile to a facsimile number supplied by the member for such purpose or" shall be inserted immediately after the words "or by sending it" and the words "first class" shall be inserted immediately before the words "post in a prepaid envelope." 18.2 Where a notice is sent by first class post, proof of the notice having been posted in a properly addressed, prepaid envelope shall be conclusive evidence that the notice was given and shall be deemed to have been given at the expiration of 24 hours after the envelope containing the same is posted. Where a notice is sent by facsimile receipt of the appropriate answerback shall be conclusive evidence that the notice was given and the notice shall be deemed to have been given at the time of transmission following receipt of the appropriate answerback. Regulation 115 of Table A shall not apply to the Company. 18.3 If at any time by reason of the suspension or curtailment of postal services within the United Kingdom the Company is unable effectively to convene a general meeting by notices sent through the post, a general meeting may be convened by a notice advertised in at least one national daily newspaper and such notice shall be deemed to have been duly served on all members entitled thereto at noon on the day when the advertisement appears. In any such case the Company shall send confirmatory copies of the notice by post if at least seven days prior to the meeting the posting of notices to addresses throughout the United Kingdom again becomes practicable. 19. WINDING UP - --------------- In regulation 117 of Table A, the words "with the like sanction" shall be inserted immediately before the words "determine how the division". 20. INDEMNITY - -------------- 20.1 Subject to the provisions of section 310 of the Act every director (including an alternate director) or other officer of the Company shall be indemnified out of the assets of the Company against all losses or liabilities which he may sustain or incur in or about the lawful execution of the duties of his office or otherwise in relation thereto, including any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application under section 144 or section 727 of the Act in which relief is granted to him by the court, and no director (including an alternate director) or other officer shall be liable for any loss, damage or misfortune which may happen to or be incurred by the Company in the lawful execution of the duties of his office or in relation thereto. Regulation 118 of Table A shall not apply to the Company. 20.2 The directors shall have power to purchase and maintain at the expense of the Company for the benefit of any director (including an alternate director), officer or auditor of the Company insurance against any such liability as is referred to in section 310(1) of the Act and subject to the provisions of the Act against any other liability which may attach to him or loss or expenditure which he may incur in relation to anything done or alleged to have been done or omitted to be done as a director (including an alternate director), officer or auditor. 20.3 The directors may authorize directors of companies within the same group of companies as the Company to purchase and maintain insurance at the expense of the Company for the benefit of any director (including an alternate director), other officer or auditor in such company in respect of such liability, loss or expenditure as is referred to in Article 20.2. 21. ASSOCIATE DIRECTORS - ------------------------ 21.1 The directors may from time to time appoint any manager or other officer or person in the employment of the Company to be an Associate Director of the Company. 21.2 The appointment of a person to be an Associate Director shall not (save as otherwise agreed between him and the Company) affect the terms and conditions of his employment by the Company whether as regards duties, powers, remuneration, pension or otherwise and his appointment as an Associate Director shall be terminated if the provisions of Article 14 would apply to him if he were a director so as to cause him to vacate office as such or if he resigns his employment or appointment or in the event of his ceasing to be in the employment of the Company in some capacity other than that of an Associate Director or in the event of his appointment being terminated by a resolution of the directors. 21.3 The appointment, removal and remuneration of any Associate Director shall be determined by the directors with full power to make such arrangements as the directors may think fit and the directors shall have the right to enter into any contracts on behalf of the Company or transact any business of any description without the knowledge or approval of the Associate Directors except that no act shall be done that would impose any personal liability on any or all of the Associate Directors except with his or their knowledge and consent. 21.4 In calculating the number to form a quorum at any meeting of the directors any associate directors present shall not be counted. An Associate Director shall not be entitled to vote nor (except when expressly invited by the directors to attend) to receive notice of or to attend at any meeting of the directors or of a committee of the directors. 21.5 The directors may designate the Associate Directors or any of them by such other name or title in place of the word "Associate" as they may from time to time consider to be descriptive of their office and actual duties. Any Associate Director so designated shall be entitled to describe himself accordingly and, in the absence of such designation, shall be entitled to describe himself as "Associate Director"; in signing any document which he is authorized to sign as Associate Director he shall always after his signature add the words "Associate Director" or, if he shall have been otherwise designated, such other name or title designated to him. -1- EX-3.27 19 MEMORANDUM OF ASSOCIATION OF NORWICH No 964668 THE COMPANIES ACTS 1948 to 1967 ________________________ COMPANY LIMITED BY SHARES ________________________ MEMORANDUM OF ASSOCIATION OF _____________________________________________ NORWICH INJECTION MOULDERS LIMITED _____________________________________________ 1. The Name of the Company is "NORWICH INJECTION MOULDERS LIMITED". 2. The Registered Office at the Company will be situated in England. 3. The Objects for which the Company is established are: (A) To carry on all or any of the businesses of Plastic Injection Moulders, Manufacturers, Designers, Producers, Merchants, Marketers, Importers, Exporters, Distributors, Agents for and Dealers in Plastic, Polythene, Synthetic Fibres, Polyurethane and all other synthetics, chemicals and substances and Plastic Products, Materials and Utensils of all kinds, fabricated from Injection Moulded, Extruded and Vacuum Formed Plastic and Glass Fibre Materials and for and in Plastic Paints and Coverings of every description; to undertake all operations in connection with the processing and application thereof, to carry on the business of Manufacturers and Designers of and Dealers in Household, Domestic, Commercial and Industrial Goods, Parts, Components and Articles of every description; Electrical, Mechanical, Motor and General Engineers and Contractors, Builders and Decorators, Garage Proprietors, Transport Contractors; and to carry out researches, investigations and experimental work of every description in relation to the objects of the Company. (B) To buy, sell, manufacture, and deal in plant, machinery, vehicles, tools, materials and things of all kinds capable of being used in connection with the above-mentioned businesses, or any of them, or likely to be required by customers of, or persons having dealings with the Company. (C) To carry on any other business (whether manufacturing or otherwise) which may seem to the Company capable of being conveniently carried on in connection with the above objects, or calculated directly or indirectly to enhance the value of or render more profitable any of the Company's property. (D) To purchase or by any other means acquire any freehold, leasehold, or other property for any estate or interest whatsoever, and any rights, privileges, or easements over or in respect of any property, and any buildings, offices, factories, mills, works, wharves, roads, railways, tramways, machinery, engines, rolling stock, vehicles, plant, live and dead stock, barges, vessels, or things, and any real or personal property or rights whatsoever which may be necessary for, or may be conveniently used with, or may enhance the value of any other property of the Company. (E) To build, construct, maintain, alter, enlarge, pull down and remove or replace any buildings offices, factories, mills, works, wharves, roads, railways, tramways, machinery, engines, walls, fences, banks, dams, sluices, or watercourses and to clear sites for the same, or to join with any person, firm, or company in doing any of the things aforesaid, and to work, manage, and control the same or join with others in so doing. (F) To apply for, register, purchase, or by other means acquire and protect, prolong, and renew, whether in the United Kingdom or elsewhere, any patents, patent rights, brevets d'invention, licences, trade marks, designs, protections, and concessions which may appear likely to be advantageous or useful to the Company, and to use and turn to account and to manufacture under or grant licences or privileges in respect of the same, and to expend money in experimenting upon and testing and in improving or seeking to improve any patents, inventions, or rights which the Company may acquire or propose to acquire. (G) To acquire and undertake the whole or any part of the business, goodwill, and assets of any person, firm, or company carrying on or proposing to carry on any of the businesses which this Company is authorized to carry on, and as part of the consideration for such acquisition to undertake all or any of the liabilities of such person, firm, or company, or to acquire an interest in, amalgamate with, or enter into partnership or into any arrangement for sharing profits, or for co-operation, or for limiting competition, or for mutual assistance with any such person, firm or company, or for subsidizing or otherwise assisting any such person, firm or company, and to give or accept, by way of consideration for any of the acts or things aforesaid or property acquired, any Shares, Debentures, Debenture Stock, or securities that may be agreed upon, and to hold and retain, or sell, mortgage and deal with any Shares, Debentures, Debenture Stock, or securities so received. (H) To improve, manage, cultivate, develop, exchange, let on lease or otherwise, mortgage, charge, sell, dispose of, turn to account, grant rights and privileges in respect of, or otherwise deal with all or any part of the property and rights of the Company. (I) To invest and deal with the moneys of the Company not immediately required in such Shares or upon such securities and in such manner as may from time to time be determined. (J) To lend and advance money or give credit to such persons, firms, or companies and on such terms as may seem expedient, and in particular to customers of and others having dealings with the Company, and to give guarantees or become security for any such persons, firms, or companies. (K) To borrow or raise money in such manner as the Company shall think fit, and in particular by the issue of Debentures or Debenture Stock (perpetual or otherwise), and to secure the repayment of any money borrowed, raised, or owing, by mortgage, charge, or lien upon the whole or any part of the Company's property or assets (whether present or future), including its uncalled Capital, and also by a similar mortgage, charge, or lien to secure and guarantee the performance by the Company of any obligation or liability it may undertake. (L) To draw, make, accept, endorse, discount, execute, and issue promissory notes, bills of exchange, bills of lading, warrants, debentures, and other negotiable or transferable instruments. (M) To apply for, promote, and obtain any Act of Parliament, Provisional Order, or Licence of the Board of Trade or other authority for enabling the Company to carry any of its objects into effect, or for effecting any modification of the Company's constitution, or for any other purpose which may seem expedient, and to oppose any proceedings or applications which may seem calculated directly or indirectly to prejudice the Company's interests. (N) To enter into any arrangements with any Governments or authorities (supreme, municipal, local, or otherwise), or any companies, firms, or persons that may seem conducive to the attainment of the Company's objects or any of them, and to obtain from any such Government, authority, company, firm, or person, any charters, contracts, decrees, rights, privileges, and concessions which the Company may think desirable, and to carry out, exercise, and comply with any such charters, contracts, decrees, rights, privileges, and concessions. (O) To subscribe for, take, purchase, or otherwise acquire and hold shares or other interests in or securities of any other company having objects altogether or in part similar to those of this Company or carrying on any business capable of being carried on so as directly or indirectly to benefit this Company. (P) To act as agents or brokers and as trustees for any person, firm, or company, and to undertake and perform sub-contracts, and also to act in any of the businesses of the Company through or by means of agents, brokers, sub-contractors, or others. (Q) To remunerate any person, firm, or company rendering services to this Company, either by cash payment or by the allotment to him or them of Shares or securities of the Company credited as paid up in full or in part or otherwise as may be thought expedient. (R) To pay all or any expenses incurred in connection with the promotion, formation, and incorporation of the Company, or to contract with any person, firm, or company to pay the same, and to pay commissions to brokers and others for underwriting, placing, selling, or guaranteeing the subscription of any Shares, Debentures, Debenture Stock, or securities of this Company. (S) To support and subscribe to any charitable or public object, and any institution, society, or club which may be for the benefit of the Company or its employees, or may be connected with any town or place where the Company carries on business; to give or award pensions, annuities, gratuities, and superannuation or other allowances or benefits or charitable aid to any persons who are or have been Directors of, or who are or have been employed by, or who are serving or have served the Company, and to the wives, widows, children, and other relatives and dependants of such persons; to make payments towards insurance; and to set up, establish, support, and maintain superannuation and other funds or schemes (whether contributory or non-contributory) for the benefit of any such persons and of their wives, widows, children, and other relatives and dependants. (T) To promote any other company for the purpose of acquiring the whole or any part of the business or property and undertaking any of the liabilities of this Company, or of undertaking any business or operations which may appear likely to assist or benefit this Company or to enhance the value of any property or business of this Company, and to place or guarantee the placing of, underwrite, subscribe for, or otherwise acquire all or any part of the shares or securities of any such company as aforesaid. (U) To sell or otherwise dispose of the whole or any part of the business or property of the Company, either together or in portions, for such consideration as the Company may think fit, and in particular for shares, debentures, or securities of any company purchasing the same. (V) To distribute among the Members of the Company in kind any property of the Company, and in particular any shares, debentures, or securities of other companies belonging to this Company or of which this Company may have the power of disposing. (W) To procure the Company to be registered or recognized in any part of the world. (X) To do all such other things as may be deemed incidental or conducive to the attainment of the above objects or any of them. (Y) To guarantee or otherwise support or secure, either with or without the Company receiving any consideration or advantage and whether by personal covenant or by mortgaging or charging all or any part of the undertaking, property, assets, rights and revenues (present and future) and uncalled capital of the Company, or by both such methods or by any other means whatsoever, the discharge and performance respectively of the liabilities and obligations of and the repayment or payment of any moneys whatsoever by any person, firm or company, including (but not limited to): (i) the discharge and performance respectively of any liabilities and obligations whatsoever of, and the repayment or payment of any moneys whatsoever by, any company which is for the time being or is likely to become the Company's holding company or a subsidiary of the Company or another subsidiary of the Company's holding company (the terms "holding company" and "subsidiary" having the meanings given to them by Section 736 of the Companies Act 1985) or otherwise associated with the Company in business; and (ii) the discharge and performance respectively of any liabilities and obligations incurred in connection with or for the purpose of the acquisition of shares in the Company or in any company which is for the time being the Company's holding company insofar as the giving of any such guarantee or other support or security is not prohibited by law; and (iii) the repayment or payment of the principal amounts of, and premiums, interest and dividends on, any borrowings and securities. (Z) To the extent that the same is permitted by law to give financial assistance for the purpose of the acquisition of shares in the Company or in the Company's holding company (as that term is defined by Section 736 of the Companies Act 1985) for the time being and for the purpose of reducing or discharging a liability incurred for the purpose of such an acquisition and to give such assistance by means of a gift, loan or guarantee, indemnity, the provision of security or otherwise howsoever permitted by law. It is hereby expressly declared that each Sub-Clause of this Clause shall be construed independently of the other Sub-Clauses hereof, and that none of the objects mentioned in any Sub-Clause shall be deemed to be merely subsidiary to the objects mentioned in any other Sub-Clause. 4. The Liability of the Members is Limited. 5. The Share Capital of the Company is 100 divided into One Hundred Shares of 1 each. Note: Clauses 3(Y) and (Z) inserted by special resolution dated 2 July 1998 We, the several persons whose Names, Addresses and Descriptions are subscribed, are desirous of being formed into a Company in pursuance of this Memorandum of Association, and we respectively agree to take the number of Shares in the Capital of the Company set opposite our respective names.
N{*} of Shares NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS taken by each Subscriber Roy C Keen ONE Wilec House 82 City Road London EC1 Commercial Manager M J Hope ONE Wilec House 82 City Road London EC1 Commercial Manager TOTAL SHARES TAKEN TWO
Dated this 20th day of October 1969 Witness to the above Signatures: D S Hodgson Wilec House 82 City Road London EC1 EX-3.28 20 ARTICLES OF ASSOCIATION OF NORWICH THE COMPANIES ACT 1985 PRIVATE COMPANY LIMITED BY SHARES ARTICLES OF ASSOCIATION OF NORWICH INJECTION MOULDERS LIMITED ADOPTED BY SPECIAL RESOLUTION PASSED 2 JULY 1998 1. PRELIMINARY - ---------------- The regulations contained in Table A in the Schedule to the Companies (Table A to F) Regulations 1985 in force at the time of adoption of these Articles (such Table being hereinafter called "Table A") shall apply to the Company save insofar as they are excluded or varied by these Articles and such regulations (save as so excluded or varied) and these Articles shall be the regulations of the Company. 2. INTERPRETATION - ------------------- In these Articles and in Table A the following expressions have the following meanings unless inconsistent with the context: "the Act" the Companies Act 1985 including any statutory modification or re-enactment thereof for the time being in force. "these Articles" these Articles of Association, whether as originally adopted or as from time to time altered by special resolution. "clear days" in relation to the period of a notice means that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect. "the directors" the directors for the time being of the Company or (as the context shall require) any of them acting as the board of directors of the Company but such expression shall not include any associate directors (as hereinafter defined) who shall not be deemed to be directors of the Company for any purpose whatsoever. "executed" includes any mode of execution. "the holder" in relation to shares means the member whose name is entered in the register of members as the holder of the shares. "office" the registered office of the Company. "seal" the common seal of the company (if any). "secretary" the secretary of the Company or any other person appointed to perform the duties of the secretary of the Company, including a joint, assistant or deputy secretary. "share" includes any interest in a share. "the United Kingdom" Great Britain and Northern Ireland. Unless the context otherwise requires, words or expressions contained in these Articles and in Table A bear the same meaning as in the Act but excluding any statutory modification thereof not in force when these Articles become binding on the Company. Regulation 1 of Table A shall not apply to the Company. 3. SHARE CAPITAL - ------------------ 3.1 No shares comprised in the authorized share capital of the Company from time to time shall be issued without the consent in writing of the holder or holders (in aggregate) of a majority of the voting rights in the Company (within the meaning of Section 736A(2) of the Act) nor shall any share be issued at a discount or otherwise be issued in breach of the provisions of these Articles or of the Act. 3.2 Regulation 4 of Table A and, in accordance with Section 91(1) of the Act, sections 89(1) and 90(1) to (6) (inclusive) of the Act shall not apply to the Company. 4. LIEN - --------- The Company shall have a first and paramount lien on all shares, whether fully paid or not, standing registered in the name of any person indebted or under liability to the Company, whether he shall be the sole registered holder thereof or shall be one of two or more joint holders, for all moneys presently payable by him or his estate to the Company. Regulation 8 of Table A shall be modified accordingly. 5. CALLS ON SHARES AND FORFEITURE - ----------------------------------- There shall be added at the end of the first sentence of regulation 18 of Table A so as to increase the liability of any member in default in respect of a call, the words "and all expenses that may have been incurred by the Company by reason of such nonpayment." 6. TRANSFER OF SHARES - ----------------------- The first sentence in regulation 24 of Table A shall not apply to the Company. The words "They may also" at the beginning of the second sentence of that regulation shall be replaced by the words "The directors may". 7. GENERAL MEETINGS - --------------------- The directors may call general meetings and regulation 37 of Table A shall not apply to the Company. 8. NOTICE OF GENERAL MEETINGS - ------------------------------- 8.1 A Notice convening a general meeting shall be required to specify the general nature of the business to be transacted only in the case of special business and regulation 38 of Table A shall be modified accordingly. The words "or a resolution appointing a person a director" and paragraphs (a) and (b) in regulation 38 of Table A shall be deleted and the words "in accordance with section 369(3) of the Act" shall be inserted after the words "if it is so agreed" in that regulation. 8.2 All business shall be deemed special that is transacted at an extraordinary general meeting, and also all that is transacted at an annual general meeting with the exception of declaring a dividend, the consideration of the profit and loss account, balance sheet, and the reports of the directors and auditors, the appointment of and the fixing of the remuneration of the auditors and the giving or renewal of any authority in accordance with the provisions of section 80 of the Act. 8.3 Every notice convening a general meeting shall comply with the provisions of section 372(3) of the Act as to giving information to members in regard to their right to appoint proxies; and notices of and other communications relating to any general meeting which any member is entitled to receive shall be sent to the directors and to the auditors for the time being of the Company. 9. PROCEEDINGS AT GENERAL MEETINGS - ------------------------------------ 9.1 The words "save that, if and for so long as the Company has only one person as a member, one member present in person or by proxy shall be a quorum" shall be added at the end of the second sentence of regulation 40 of Table A. 9.2 If a quorum is not present within half an hour from the time appointed for a general meeting the general meeting shall stand adjourned to the same day in the next week at the same time and place or to such other day and at such other time and place as the directors may determine; and if at the adjourned general meeting a quorum is not present within half an hour from the time appointed therefor the member or members present in person or by proxy or (being a corporate body) by representative and entitled to vote upon the business to be transacted shall constitute a quorum and shall have power to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment took place. Regulation 41 of Table A shall not apply to the Company. 10. VOTES OF MEMBERS - --------------------- 10.1 Regulation 54 of Table A shall not apply to the Company. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a show of hands every member entitled to vote who (being an individual) is present in person or by proxy not being himself a member entitled to vote) or (being a corporate body) is present by a representative or proxy (not being himself a member entitled to vote) shall have one vote and, on a poll, every member shall have one vote for each share of which he is the holder. 10.2 The words "be entitled to" shall be inserted between the words" shall" and "vote" in regulation 57 of Table A. 10.3 A member shall not be entitled to appoint more than one proxy to attend on the same occasion and accordingly the final sentence of regulation 59 of Table A shall not apply to the Company. Any such proxy shall be entitled to cast the votes to which he is entitled in different ways. 11. NUMBER OF DIRECTORS - ------------------------ 11.1 Regulation 64 of Table A shall not apply to the company. 11.2 The maximum number and minimum number respectively of the directors may be determined from time to time by ordinary resolution. Subject to and in default of any such determination there shall be no maximum number of directors and the minimum number of directors shall be one. 12. ALTERNATE DIRECTORS - ------------------------ 12.1 An alternate director shall be entitled to receive notice of all meetings of the directors and of all meetings of committees of the directors of which his appointer is a member (subject to his giving to the company an address within the United Kingdom at which notices may be served on him), to attend and vote at any such meeting at which the director appointing him is not personally present, and generally to perform all the functions of his appointer at such meeting as a director in his absence. An alternate director shall not be entitled as such to receive any remuneration from the company, save that he may be paid by the Company such part (if any) of the remuneration otherwise payable to his appointor as such appointor may by notice in writing to the Company from time to time direct. Regulation 66 of Table A shall not apply to the Company. 12.2 A director, or any such other person as is mentioned in regulation 65 of Table A, may act as an alternate director to represent more than one director, and an alternate director shall be entitled at any meeting of the directors or of any committee of the directors to one vote for every director whom he represents in addition to his own vote (if any) as a director, but he shall count as only one for the purpose of determining whether a quorum is present and the final sentence of regulation 88 shall not apply to the Company. 12.3 Save as otherwise provided in the regulations of the Company, an alternate director shall be deemed for the purposes specified in Article 12.1 to be a director and shall alone be responsible for his own acts and defaults and he shall not be deemed to be the agent of the director appointing him. Regulation 69 of Table A shall not apply to the Company. 13. APPOINTMENT AND RETIREMENT OF DIRECTORS - -------------------------------------------- 13.1 The directors shall not be required to retire by rotation and regulations 73 to 80 (inclusive) of Table A shall not apply to the Company. 13.2 A member or members holding a majority of the voting rights in the Company (within the meaning of section 736a(2) of the Act) shall have power at any time, and from time to time, to appoint any person to be a director, either as an additional director (provided that the appointment does not cause the number of directors to exceed any number determined in accordance with article 11.2 as the maximum number of directors for the time being in force) or to fill a vacancy and to remove from office any director howsoever appointed. Any such appointment or removal shall be made by notice in writing to the Company signed by the member or members taking the same or, in the case of a member being a corporate body, signed by one of its directors or duly authorized officers or by its duly authorized attorney and shall take effect upon lodgment of such notice at the office. 13.3 The Company may by ordinary resolution appoint any person who is willing to act to be a director, either to fill a vacancy or as an additional director. 13.4 The directors may appoint a person who is willing to act to be a director, either to fill a vacancy or as an additional director, provided that the appointment does not cause the number of directors to exceed any number determined in accordance with Article 11.2 as the maximum number of directors for the time being in force. 14. DISQUALIFICATION AND REMOVAL OF DIRECTORS - ---------------------------------------------- The office of a director shall be vacated if: 14.1 he ceases to be a director by virtue of any provision of the Act or these Articles or he becomes prohibited by law from being a director; or 14.2 he becomes bankrupt or makes any arrangement or composition with his creditors generally; or 14.3 he is, or may be, suffering from mental disorder and either: 14.3.1 he is admitted to hospital in pursuance of an application for admission for treatment under the Mental Health Act 1983 or, in Scotland, an application for admission under the Mental Health (Scotland) Act 1960, or 14.3.2 an order is made by a court having jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder for his detention or for the appointment of a receiver, curator bonus or other person to exercise powers with respect to his property or affairs; or 14.4 he resigns his office by notice to the Company; or 14.5 he shall for more than six consecutive months have been absent without permission of the directors from meetings of the directors held during that period and the directors resolve that his office be vacated; or 14.6 he is removed from office as a director pursuant to Article 13.2; and 14.7 Regulation 81 of Table A shall not apply to the Company. 15. GRATUITIES AND PENSIONS - ---------------------------- Regulation 87 of Table A shall not apply to the Company and the directors may exercise any powers of the Company conferred by its Memorandum of Association to give and provide pensions, annuities, gratuities or any other benefits whatsoever to or for past or present directors or employees (or other dependants) of the Company or any subsidiary or associated undertaking (as defined in section 27(3) of the Companies Act 1989) of the Company and the directors shall be entitled to retain any benefits received by them or any of them by reason of the exercise of any such powers. 16. PROCEEDINGS OF THE DIRECTORS - --------------------------------- 16.1 Whensoever the minimum number of the directors shall be one pursuant to the provisions of Article 11.2 a sole director shall have authority to exercise all the powers and discretion's which are expressed by Table A and by these Articles to be vested in the directors generally and regulations 89 and 90 of Table A shall be modified accordingly. 16.2 Subject to the provisions of the Act, and provided that he has disclosed to the directors the nature and extent of any interest of his, a director notwithstanding his office: 16.2.1 may be a party to or otherwise interested in any transaction or arrangement with the Company or in which the Company is in any way interested; 16.2.2 may be a director or other office of or employed by or be a party to any transaction or arrangement with or otherwise interested in any corporate body promoted by the Company or in which the Company is in any way interested; 16.2.3 may or any firm or company of which he is a member or director may act in a professional capacity for the Company or any corporate body in which the Company is in any way interested; 16.2.4 shall not by reason of his office be accountable to the Company for any benefit which he derives from such office, service or employment or from any such transaction or arrangement or from any interest or any such corporate body and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit; and 16.2.5 shall be entitled to vote on any resolution and (whether or not he shall vote) be counted in the quorum on any matter referred to in any of the Articles 16.2.1 to 16.2.4 (inclusive) or on any resolution which in any way concerns or relates to a matter in which he has, directly or indirectly, any kind of interest whatsoever and if he shall vote on any resolution as aforesaid his vote shall be counted. 16.3 For the purposes of Article 16.2: 16.3.1 a general notice to the directors that a director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the director has an interest in any such transaction of the nature and extent so specified; 16.3.2 an interest of which a director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interest of his; and 16.3.3 16.4 Any director (including an alternate director) may participate in a meeting of the directors or a committee of the directors of which he is a member by means of a conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other and participation in a meeting in this manner shall be deemed to constitute presence in person at such meeting and, subject to these Articles and the Act, he shall be entitled to vote and be counted in a quorum accordingly. Such a meeting shall be deemed to take place where the largest group of those participating is assembled or, if there is no such group, where the chairman of the meeting then is. 16.5 Regulation 88 of Table A shall be amended by substituting for the sentence: "IT SHALL NOT BE NECESSARY TO GIVE NOTICE OF A MEETING TO A DIRECTOR WHO IS ABSENT FROM THE UNITED KINGDOM" the following sentence: "NOTICE OF EVERY MEETING OF THE DIRECTORS SHALL BE GIVEN TO EACH DIRECTOR AND HIS ALTERNATE, INCLUDING DIRECTORS AND ALTERNATE DIRECTORS WHO MAY FOR THE TIME BEING BE ABSENT FROM THE UNITED KINGDOM AND HAVE GIVEN THE COMPANY AN ADDRESS WITHIN THE UNITED KINGDOM FOR SERVICE." 16.6 Regulations 94 to 97 (inclusive) of Table A shall not apply to the Company. 17. THE SEAL - ------------- If the Company has a seal it shall be used only with the authority of the directors or of a committee of the directors. The directors may determine who shall sign any instrument to which the seal is affixed and unless otherwise so determined, every instrument to which the seal is affixed shall be signed by one director and by the secretary or another director. In the second sentence of Regulation A the words "shall be sealed with the seal and" shall be deleted. Each share certificate shall only be issued by authority of the directors or of a committee of the directors authorized by the directors and shall bear the signature of one director and the company secretary or a second director. 18. NOTICES - ------------ 18.1 In regulation 112 of Table A, the words "by facsimile to a facsimile number supplied by the member for such purpose or" shall be inserted immediately after the words "or by sending it" and the words "first class" shall be inserted immediately before the words "post in a prepaid envelope." 18.2 Where a notice is sent by first class post, proof of the notice having been posted in a properly addressed, prepaid envelope shall be conclusive evidence that the notice was given and shall be deemed to have been given at the expiration of 24 hours after the envelope containing the same is posted. Where a notice is sent by facsimile receipt of the appropriate answerback shall be conclusive evidence that the notice was given and the notice shall be deemed to have been given at the time of transmission following receipt of the appropriate answerback. Regulation 115 of Table A shall not apply to the Company. 18.3 If at any time by reason of the suspension or curtailment of postal services within the United Kingdom the Company is unable effectively to convene a general meeting by notices sent through the post, a general meeting may be convened by a notice advertised in at least one national daily newspaper and such notice shall be deemed to have been duly served on all members entitled thereto at noon on the day when the advertisement appears. In any such case the Company shall send confirmatory copies of the notice by post if at least seven days prior to the meeting the posting of notices to addresses throughout the United Kingdom again becomes practicable. 19. WINDING UP - --------------- In regulation 117 of Table A, the words "with the like sanction" shall be inserted immediately before the words "determine how the division". 20. INDEMNITY - -------------- 20.1 Subject to the provisions of section 310 of the Act every director (including an alternate director) or other officer of the Company shall be indemnified out of the assets of the Company against all losses or liabilities which he may sustain or incur in or about the lawful execution of the duties of his office or otherwise in relation thereto, including any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application under section 144 or section 727 of the Act in which relief is granted to him by the court, and no director (including an alternate director) or other officer shall be liable for any loss, damage or misfortune which may happen to or be incurred by the Company in the lawful execution of the duties of his office or in relation thereto. Regulation 118 of Table A shall not apply to the Company. 20.2 The directors shall have power to purchase and maintain at the expense of the Company for the benefit of any director (including an alternate director), officer or auditor of the Company insurance against any such liability as is referred to in section 310(1) of the Act and subject to the provisions of the Act against any other liability which may attach to him or loss or expenditure which he may incur in relation to anything done or alleged to have been done or omitted to be done as a director (including an alternate director), officer or auditor. 20.3 The directors may authorize directors of companies within the same group of companies as the Company to purchase and maintain insurance at the expense of the Company for the benefit of any director (including an alternate director), other officer or auditor in such company in respect of such liability, loss or expenditure as is referred to in Article 20.2. 21. ASSOCIATE DIRECTORS - ------------------------ 21.1 The directors may from time to time appoint any manager or other officer or person in the employment of the Company to be an associate director of the Company. 21.2 The appointment of a person to be an associate director shall not (save as otherwise agreed between him and the Company) affect the terms and conditions of his employment by the Company whether as regards duties, powers, remuneration, pension or otherwise and his appointment as an associate director shall be terminated if the provisions of Article 14 would apply to him if he were a director so as to cause him to vacate office as such or if he resigns his employment or appointment or in the event of his ceasing to be in the employment of the Company in some capacity other than that of an associate director or in the event of his appointment being terminated by a resolution of the directors. 21.3 The appointment, removal and remuneration of any associate director shall be determined by the directors with full power to make such arrangements as the directors may think fit and the directors shall have the right to enter into any contracts on behalf of the Company or transact any business of any description without the knowledge or approval of the associate directors except that no act shall be done that would impose any personal liability on any or all of the associate directors except with his or their knowledge and consent. 21.4 In calculating the number to form a quorum at any meeting of the directors any associate directors present shall not be counted. An associate director shall not be entitled to vote nor (except when expressly invited by the directors to attend) to receive notice of or to attend at any meeting of the directors or of a committee of the directors. 21.5 The directors may designate the associate directors or any of them by such other name or title in place of the word "Associate" as they may from time to time consider to be descriptive of their office and actual duties. Any associate director so designated shall be entitled to describe himself accordingly and, in the absence of such designation, shall be entitled to describe himself as "associate director"; in signing any document which he is authorized to sign as associate director he shall always after his signature add the words "associate director" or, if he shall have been otherwise designated, such other name or title designated to him. EX-3.29 21 CERTIFICATE OF INCORPORATION OF KNIGHT PLASTICS CERTIFICATE OF INCORPORATION OF KNIGHT PLASTICS, INC. ARTICLE FIRST The name of the corporation (herein called the "Corporation") is Knight Plastics, Inc. 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. 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 General Corporation Law of the State of Delaware. ARTICLE FOURTH The total number of shares of all classes of stock which the Corporation shall have authority to issue is one thousand (1,000) shares, all of which shall be designated Common Stock and shall have a par value of $0.01 per share. ARTICLE FIFTH The name and mailing address of the incorporator is as follows:
NAME MAILING ADDRESS Michael S. Hubner c/o O'Sullivan Graev & Karabell, LLP 30 Rockefeller Plaza 41st Floor New York, New York 10112
ARTICLE SIXTH 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 for liability (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. 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 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) WITHOUT THE ASSENT OR VOTE OF THE STOCKHOLDERS, TO AUTHORIZE AND ISSUE SECURITIES AND OBLIGATIONS OF THE CORPORATION, SECURED OR UNSECURED, AND TO INCLUDE THEREIN SUCH PROVISIONS AS TO REDEMPTION, CONVERSION OR OTHER TERMS THEREOF AS THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION MAY DETERMINE, AND TO AUTHORIZE THE MORTGAGING OR PLEDGING, AS SECURITY THEREFOR, OF ANY PROPERTY OF THE CORPORATION, REAL OR PERSONAL, INCLUDING AFTER-ACQUIRED PROPERTY; (III) 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 (IV) 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). ARTICLE NINTH Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/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 the Delaware General Corporation Law 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 the Delaware General Corporation Law order a meeting of the creditors or class of creditors, and/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, and/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, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. IN WITNESS WHEREOF, I, the undersigned, being the sole incorporator hereinabove named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, DO HEREBY CERTIFY, under penalties of perjury, that this is my act and deed and that the facts hereinabove stated are truly set forth and, accordingly, I have hereunto set my hand as of the 25th day of August, 1998. ____________________________________ Michael S. Hubner Sole Incorporator -1- EX-3.30 22 BY-LAWS OF KNIGHT PLASTICS BY-LAWS OF KNIGHT PLASTICS, INC. ARTICLE I OFFICES 1.1 REGISTERED OFFICE. - ----------------------- The registered office of Knight Plastics, Inc. (the "Corporation"), in the State of Delaware shall be at 9 East Loockerman Street, City of Dover, County of Kent 19901, and the registered agent in charge thereof shall be National Registered Agents, Inc. 1.2 OTHER OFFICES. - ------------------- The Corporation may also have an office or offices at any other place or places within or outside the State of Delaware. ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING 2.1 ANNUAL MEETINGS. - --------------------- The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (the "Board") and designated in the notice or waiver of notice thereof, except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware (the "Delaware Statute") to be taken at a stockholders' annual meeting are taken by written consent in lieu of meeting pursuant to Section 2.10. 2.2 SPECIAL MEETINGS. - ---------------------- A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman, the President or the record holders of at least a majority of the issued and outstanding shares of Common Stock of the Corporation, to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof. 2.3 NOTICE OF MEETINGS. - ------------------------ Except as otherwise required by statute, the Certificate of Incorporation of the Corporation (the "Certificate") or these By-laws, notice of each annual or special meeting of the stockholders shall be given to each stockholder of record entitled to vote at such meeting not less than 10 nor more than 60 days before the day on which the meeting is to be held, by delivering written notice thereof to him personally, or by mailing a copy of such notice, postage prepaid, directly to him at his address as it appears in the records of the Corporation, or by transmitting such notice thereof to him at such address by telegraph, cable or other telephonic transmission. Every such notice shall state the place, the date and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy, or who shall, in person or by attorney thereunto authorized, waive such notice in writing, either before or after such meeting. Except as otherwise provided in these By-laws, neither the business to be transacted at, nor the purpose of, any meeting of the stockholders need be specified in any such notice or waiver of notice. Notice of any adjourned meeting of stockholders shall not be required to be given, except when expressly required by law. 2.4 QUORUM. - ------------ At each meeting of the stockholders, except where otherwise provided by the Certificate or these By-laws, the holders of a majority of the issued and outstanding shares of Common Stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. In the absence of a quorum, a majority in interest of the stockholders present in person or represented by proxy and entitled to vote, or, in the absence of all the stockholders entitled to vote, any officer entitled to preside at, or act as secretary of, such meeting, shall have the power to adjourn the meeting from time to time, until stockholders holding the requisite amount of stock to constitute a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called. 2.5 ORGANIZATION. - ------------------ (a) Unless otherwise determined by the Board, at each meeting of the stockholders, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President; (iii) any director, officer or stockholder of the Corporation designated by the Board to act as chairman of such meeting and to preside thereat if the Chairman or the President shall be absent from such meeting; or (iv) a stockholder of record who shall be chosen chairman of such meeting by a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat. (b) The Secretary or, if he shall be presiding over such meeting in accordance with the provisions of this Section 2.5 or if he shall be absent from such meeting, the person (who shall be an Assistant Secretary, if an Assistant Secretary has been appointed and is present) whom the chairman of such meeting shall appoint, shall act as secretary of such meeting and keep the minutes thereof. 2.6 ORDER OF BUSINESS. - ----------------------- The order of business at each meeting of the stockholders shall be determined by the chairman of such meeting, but such order of business may be changed by a majority in voting interest of those present in person or by proxy at such meeting and entitled to vote thereat. 2.7 VOTING. - ------------ Except as otherwise provided by law, the Certificate or these By- laws, at each meeting of the stockholders, every stockholder of the Corporation shall be entitled to one vote in person or by proxy for each share of Common Stock of the Corporation held by him and registered in his name on the books of the Corporation on the date fixed pursuant to Section 6.7 as the record date for the determination of stockholders entitled to vote at such meeting. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. A person whose stock is pledged shall be entitled to vote, unless, in the transfer by the pledgor on the books of the Corporation, he has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his proxy may represent such stock and vote thereon. If shares or other securities having voting power stand in the record of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary shall be given written notice to the contrary and furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (i) if only one votes, his act binds all; (ii) if more than one votes, the act of the majority so voting binds all; and (iii) if more than one votes, but the vote is evenly split on any particular matter, such shares shall be voted in the manner provided by law. If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or even-split for the purposes of this Section 2.7 shall be a majority or even-split in interest. The Corporation shall not vote directly or indirectly any share of its own capital stock. Any vote of stock may be given by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, delivered to the secretary of the meeting; PROVIDED, HOWEVER, that no proxy shall be voted after three years from its date, unless said proxy provides for a longer period. At all meetings of the stockholders, all matters (except where other provision is made by law, the Certificate or these By-laws) shall be decided by the vote of a majority in interest of the stockholders present in person or by proxy at such meeting and entitled to vote thereon, a quorum being present. Unless demanded by a stockholder present in person or by proxy at any meeting and entitled to vote thereon, the vote on any question need not be by ballot. Upon a demand by any such stockholder for a vote by ballot upon any question, such vote by ballot shall be taken. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted. 2.8 INSPECTION. - ---------------- The chairman of the meeting may at any time appoint one or more inspectors to serve at any meeting of the stockholders. Any inspector may be removed, and a new inspector or inspectors appointed, by the Board at any time. Such inspectors shall decide upon the qualifications of voters, accept and count votes, declare the results of such vote, and subscribe and deliver to the secretary of the meeting a certificate stating the number of shares of stock issued and outstanding and entitled to vote thereon and the number of shares voted for and against the question, respectively. The inspectors need not be stockholders of the Corporation, and any director or officer of the Corporation may be an inspector on any question other than a vote for or against his election to any position with the Corporation or on any other matter in which he may be directly interested. Before acting as herein provided, each inspector shall subscribe an oath faithfully to execute the duties of an inspector with strict impartiality and according to the best of his ability. 2.9 LIST OF STOCKHOLDERS. - -------------------------- It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of its stock ledger to prepare and make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to any such meeting, during ordinary business hours, for a period of at least 10 days prior to such meeting, either at a place within the city where such meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 2.10 STOCKHOLDERS' CONSENT IN LIEU OF MEETING. - ---------------------------------------------- Any action required by the Delaware Statute to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, by a consent in writing, as permitted by the Delaware Statute. ARTICLE III BOARD OF DIRECTORS 3.1 GENERAL POWERS. - -------------------- The business, property and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate directed or required to be exercised or done by the stockholders. 3.2 NUMBER AND TERM OF OFFICE. - ------------------------------- The number of directors shall be fixed from time to time by the Board. Directors need not be stockholders. Each director shall hold office until his successor is elected and qualified, or until his earlier death or resignation or removal in the manner hereinafter provided. 3.3 ELECTION OF DIRECTORS. - --------------------------- At each meeting of the stockholders for the election of directors at which a quorum is present, the persons receiving the greatest number of votes, up to the number of directors to be elected, of the stockholders present in person or by proxy and entitled to vote thereon shall be the directors; PROVIDED, HOWEVER, that for purposes of such vote no stockholder shall be allowed to cumulate his votes. Unless an election by ballot shall be demanded as provided in Section 2.7, election of directors may be conducted in any manner approved at such meeting. 3.4 RESIGNATION, REMOVAL AND VACANCIES. - ---------------------------------------- (a) Any director may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. (b) Any director or the entire Board may be removed, with or without cause, at any time by vote of the holders of a majority of the shares then entitled to vote at an election of directors or by written consent of the stockholders pursuant to Section 2.10. (c) Vacancies occurring on the Board for any reason may be filled by vote of the stockholders or by the stockholders' written consent pursuant to Section 2.10, or by vote of the Board or by the directors' written consent pursuant to Section 3.6. If the number of directors then in office is less than a quorum, such vacancies may be filled by a vote of a majority of the directors then in office. 3.5 MEETINGS. - -------------- (A) ANNUAL MEETINGS. As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 3.6. (B) OTHER MEETINGS. Other meetings of the Board shall be held at such times and places as the Board, the Chairman, the President or any director shall from time to time determine. (C) NOTICE OF MEETINGS. Notice shall be given to each director of each meeting, including the time, place and purpose of such meeting. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the date on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held, but notice need not be given to any director who shall attend such meeting. A written waiver of notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice. (D) PLACE OF MEETINGS. The Board may hold its meetings at such place or places within or outside the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof. (E) QUORUM AND MANNER OF ACTING. A majority of the total number of directors then in office shall be present in person at any meeting of the Board in order to constitute a quorum for the transaction of business at such meeting, and the vote of a majority of those directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or act of the Board, except as otherwise expressly required by law or these By-laws. In the absence of a quorum for any such meeting, a majority of the directors present thereat may adjourn such meeting from time to time until a quorum shall be present. (F) ORGANIZATION. At each meeting of the Board, one of the following shall act as chairman of the meeting and preside thereat, in the following order of precedence: (i) the Chairman; (ii) the President (if a director); or (iii) any director designated by a majority of the directors present. The Secretary or, in the case of his absence, an Assistant Secretary, if an Assistant Secretary has been appointed and is present, or any person whom the chairman of the meeting shall appoint shall act as secretary of such meeting and keep the minutes thereof. 3.6 DIRECTORS' CONSENT IN LIEU OF MEETING. - ------------------------------------------- Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by all the directors then in office and such consent is filed with the minutes of the proceedings of the Board. 3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. - ---------------------------------------------------------------------- Any one or more members of the Board may participate in a meeting of the Board by means of conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. 3.8 COMMITTEES. - ---------------- The Board may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each such committee to consist of one or more directors of the Corporation, which to the extent provided in said resolution or resolutions shall have and may exercise the powers of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it, such committee or committees to have such name or names as may be determined from time to time by resolution adopted by the Board. A majority of all the members of any such committee may determine its action and fix the time and place of its meetings, unless the Board shall otherwise provide. The Board shall have power to change the members of any such committee at any time, to fill vacancies and to discharge any such committee, either with or without cause, at any time. ARTICLE IV OFFICERS 4.1 EXECUTIVE OFFICERS. - ------------------------ The principal officers of the Corporation shall be a Chairman, if one is appointed (and any references to the Chairman shall not apply if a Chairman has not been appointed), a President, a Secretary, and a Treasurer, and may include such other officers as the Board may appoint pursuant to Section 4.3. Any two or more offices may be held by the same person. 4.2 AUTHORITY AND DUTIES. - -------------------------- All officers, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-laws or, to the extent so provided, by the Board. 4.3 OTHER OFFICERS. - -------------------- The Corporation may have such other officers, agents and employees as the Board may deem necessary, including one or more Assistant Secretaries, one or more Assistant Treasurers and one or more Vice Presidents, each of whom shall hold office for such period, have such authority, and perform such duties as the Board, the Chairman, or the President may from time to time determine. The Board may delegate to any principal officer the power to appoint and define the authority and duties of, or remove, any such officers, agents, or employees. 4.4 TERM OF OFFICE, RESIGNATION AND REMOVAL. - --------------------------------------------- (a) All officers shall be elected or appointed by the Board and shall hold office for such term as may be prescribed by the Board. Each officer shall hold office until his successor has been elected or appointed and qualified or until his earlier death or resignation or removal in the manner hereinafter provided. The Board may require any officer to give security for the faithful performance of his duties. (b) Any officer may resign at any time by giving written notice to the Board, the Chairman, the President or the Secretary. Such resignation shall take effect at the time specified therein or, if the time be not specified, at the time it is accepted by action of the Board. Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective. (c) All officers and agents elected or appointed by the Board shall be subject to removal at any time by the Board or by the stockholders of the Corporation with or without cause. 4.5 VACANCIES. - --------------- If the office of Chairman, President, Secretary or Treasurer becomes vacant for any reason, the Board shall fill such vacancy, and if any other office becomes vacant, the Board may fill such vacancy. Any officer so appointed or elected by the Board shall serve only until such time as the unexpired term of his predecessor shall have expired, unless reelected or reappointed by the Board. 4.6 THE CHAIRMAN. - ------------------ The Chairman shall give counsel and advice to the Board and the officers of the Corporation on all subjects concerning the welfare of the Corporation and the conduct of its business and shall perform such other duties as the Board may from time to time determine. Unless otherwise determined by the Board, he shall preside at meetings of the Board and of the Stockholders at which he is present. 4.7 THE PRESIDENT. - ------------------- The President shall be the chief executive officer of the Corporation. The President shall have general and active management and control of the business and affairs of the Corporation subject to the control of the Board and shall see that all orders and resolutions of the Board are carried into effect. The President shall from time to time make such reports of the affairs of the Corporation as the Board of Directors may require and shall perform such other duties as the Board may from time to time determine. 4.8 THE SECRETARY. - ------------------- The Secretary shall, to the extent practicable, attend all meetings of the Board and all meetings of the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose. He may give, or cause to be given, notice of all meetings of the stockholders and of the Board, and shall perform such other duties as may be prescribed by the Board, the Chairman or the President, under whose supervision he shall act. He shall keep in safe custody the seal of the Corporation and affix the same to any duly authorized instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or, if appointed, an Assistant Secretary or an Assistant Treasurer. He shall keep in safe custody the certificate books and stockholder records and such other books and records as the Board may direct, and shall perform all other duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. 4.9 THE TREASURER. - ------------------- The Treasurer shall have the care and custody of the corporate funds and other valuable effects, including securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, shall render to the Chairman, President and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation and shall perform all other duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board, the Chairman or the President. ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC. 5.1 EXECUTION OF DOCUMENTS. - ---------------------------- The Board shall designate, by either specific or general resolution, the officers, employees and agents of the Corporation who shall have the power to execute and deliver deeds, contracts, mortgages, bonds, debentures, checks, drafts and other orders for the payment of money and other documents for and in the name of the Corporation, and may authorize such officers, employees and agents to delegate such power (including authority to redelegate) by written instrument to other officers, employees or agents of the Corporation; unless so designated or expressly authorized by these By-laws, no officer, employee or agent shall have any power or authority to bind the Corporation by any contract or engagement, to pledge its credit or to render it liable pecuniarily for any purpose or amount. 5.2 DEPOSITS. - -------------- All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or Treasurer, or any other officer of the Corporation to whom power in this respect shall have been given by the Board, shall select. 5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS. - --------------------------------------------------------------- The Board shall designate the officers of the Corporation who shall have authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of stock or other securities in any other corporation, and to vote or consent with respect to such stock or securities. Such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights, and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, such written proxies, powers of attorney or other instruments as they may deem necessary or proper in order that the Corporation may exercise its powers and rights. ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE 6.1 CERTIFICATES FOR SHARES. - ----------------------------- Every owner of stock of the Corporation shall be entitled to have a certificate certifying the number and class of shares owned by him in the Corporation, which shall be in such form as shall be prescribed by the Board. Certificates shall be numbered and issued in consecutive order and shall be signed by, or in the name of, the Corporation by the Chairman, the President or any Vice President, and by the Treasurer (or an Assistant Treasurer, if appointed) or the Secretary (or an Assistant Secretary, if appointed). In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate had not ceased to be such officer or officers of the Corporation. 6.2 RECORD. - ------------ A record in one or more counterparts shall be kept of the name of the person, firm or corporation owning the shares represented by each certificate for stock of the Corporation issued, the number of shares represented by each such certificate, the date thereof and, in the case of cancellation, the date of cancellation. Except as otherwise expressly required by law, the person in whose name shares of stock stand on the stock record of the Corporation shall be deemed the owner thereof for all purposes regarding the Corporation. 6.3 TRANSFER AND REGISTRATION OF STOCK. - ---------------------------------------- (a) The transfer of stock and certificates which represent the stock of the Corporation shall be governed by Article 8 of Subtitle 1 of Title 6 of the Delaware Code (the Uniform Commercial Code), as amended from time to time. (b) Registration of transfers of shares of the Corporation shall be made only on the books of the Corporation upon request of the registered holder thereof, or of his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and upon the surrender of the certificate or certificates for such shares properly endorsed or accompanied by a stock power duly executed. 6.4 ADDRESSES OF STOCKHOLDERS. - ------------------------------- Each stockholder shall designate to the Secretary an address at which notices of meetings and all other corporate notices may be served or mailed to him, and, if any stockholder shall fail to designate such address, corporate notices may be served upon him by mail directed to him at his post-office address, if any, as the same appears on the share record books of the Corporation or at his last known post-office address. 6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES. - ------------------------------------------------ The holder of any shares of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause to be issued to him a new certificate or certificates for such shares, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or his legal representative to give the Corporation a bond in such sum and with such surety or sureties as it may direct to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate. 6.6 REGULATIONS. - ----------------- The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of certificates for stock of the Corporation. 6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. - ------------------------------------------------------------- (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall be not more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; PROVIDED, HOWEVER, that the Board may fix a new record date for the adjourned meeting. (b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall be not more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by the Delaware Statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in this State, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by the Delaware Statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action. (c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. ARTICLE VII SEAL The Board may provide a corporate seal, which shall be in the form of a circle and shall bear the full name of the Corporation, the year of incorporation of the Corporation and the words and figures "Corporate Seal - Delaware." ARTICLE VIII FISCAL YEAR The fiscal year of the Corporation shall be the calendar year unless otherwise determined by the Board. ARTICLE IX INDEMNIFICATION AND INSURANCE 9.1 INDEMNIFICATION. - --------------------- (a) As provided in the Charter, to the fullest extent permitted by the Delaware Statute as the same exists or may hereafter be amended, a director of this Corporation shall not be liable to the Corporation or its stockholders for breach of fiduciary duty as a director. (b) Without limitation of any right conferred by paragraph (a) of this Section 9.1, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer or employee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity while serving as a director, officer or employee or in any other capacity while serving as a director, officer or employee, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware Statute, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys' fees, judgments, fines, excise taxes or amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer or employee and shall inure to the benefit of the indemnitee's heirs, testators, intestates, executors and administrators; PROVIDED, HOWEVER, that such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; PROVIDED FURTHER, HOWEVER, that no indemnification shall be made in the case of an action, suit or proceeding by or in the right of the Corporation in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director, officer, employee or agent is liable to the Corporation, unless a court having jurisdiction shall determine that, despite such adjudication, such person is fairly and reasonably entitled to indemnification; PROVIDED FURTHER, HOWEVER, that, except as provided in Section 9.1(c) with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) initiated by such indemnitee was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article IX shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); PROVIDED, HOWEVER, that, if the Delaware Statute requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise. (c) If a claim under Section 9.1(b) is not paid in full by the Corporation with 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of any undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in the Delaware Statute. Neither the failure of the Corporation (including the Board, independent legal counsel, or the stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware Statute, nor an actual determination by the Corporation (including the Board, independent legal counsel, or the stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Section or otherwise shall be on the Corporation. (d) The rights to indemnification and to the advancement of expenses conferred in this Article IX shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Charter, agreement, vote of stockholders or disinterested directors or otherwise. 9.2 INSURANCE. - --------------- The Corporation may purchase and maintain insurance, at its expense, to protect itself and any person who is or was a director, officer, employee or agent of the Corporation or any person who is or was serving at the request of the Corporation as a director, officer, employer or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware Statute. ARTICLE X AMENDMENT Any by-law (including these By-laws) may be adopted, amended or repealed by the vote of the holders of a majority of the shares then entitled to vote or by the stockholders' written consent pursuant to Section 2.10, or by the vote of the Board or by the directors' written consent pursuant to Section 3.6. * * * * * * * * * TABLE OF CONTENTS PAGE 1.1 Registered Office................................................ 1 1.2 Other Offices.................................................... 1 ARTICLE II MEETING OF STOCKHOLDERS; STOCKHOLDERS' CONSENT IN LIEU OF MEETING 1 2.1 Annual Meetings.................................................. 1 2.2 Special Meetings................................................. 1 2.3 NOTICE OF MEETINGS............................................... 1 2.4 Quorum........................................................... 2 2.5 ORGANIZATION..................................................... 2 2.6 Order of Business................................................ 3 2.7 VOTING........................................................... 3 2.8 Inspection....................................................... 4 2.9 LIST OF STOCKHOLDERS............................................. 4 2.10 Stockholders' Consent in Lieu of Meeting........................ 4 ARTICLE III BOARD OF DIRECTORS......................................... 5 3.1 General Powers................................................... 5 3.2 Number and Term of Office........................................ 5 3.3 ELECTION OF DIRECTORS............................................ 5 3.4 Resignation, Removal and Vacancies............................... 5 3.5 MEETINGS......................................................... 5 3.6 Directors' Consent in Lieu of Meeting............................ 6 3.7 ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT............................................................ 7 3.8 Committees....................................................... 7 ARTICLE IV OFFICERS.................................................... 7 4.1 Executive Officers............................................... 7 4.2 Authority and Duties............................................. 7 4.3 OTHER OFFICERS................................................... 7 4.4 Term of Office, Resignation and Removal.......................... 8 4.5 VACANCIES........................................................ 8 4.6 The Chairman..................................................... 8 4.7 THE PRESIDENT.................................................... 8 4.8 The Secretary.................................................... 9 4.9 THE TREASURER.................................................... 9 ARTICLE V CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC................ 9 5.1 Execution of Documents........................................... 9 5.2 Deposits......................................................... 10 5.3 PROXIES WITH RESPECT TO STOCK OR OTHER SECURITIES OF OTHER CORPORATIONS 10 ARTICLE VI SHARES AND THEIR TRANSFER; FIXING RECORD DATE............... 10 6.1 Certificates for Shares.......................................... 10 6.2 Record........................................................... 10 6.3 TRANSFER AND REGISTRATION OF STOCK............................... 11 6.4 Addresses of Stockholders........................................ 11 6.5 LOST, DESTROYED AND MUTILATED CERTIFICATES....................... 11 6.6 Regulations...................................................... 11 6.7 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.......... 11 ARTICLE VII SEAL....................................................... 12 Article VIII Fiscal Year............................................... 12 ARTICLE IX INDEMNIFICATION AND INSURANCE............................... 13 9.1 Indemnification.................................................. 13 9.2 Insurance........................................................ 14 ARTICLE X AMENDMENT.................................................... 15 KNIGHT PLASTICS, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE ___________________________ BY-LAWS ___________________________ AS ADOPTED ON AUGUST 25, 1998 EX-4.9 23 INDENTURE DATED AS OF AUGUST 24,1998 EXECUTION COPY BERRY PLASTICS CORPORATION BPC HOLDING CORPORATION BERRY IOWA CORPORATION BERRY TRI-PLAS CORPORATION BERRY STERLING CORPORATION AEROCON, INC. PACKERWARE CORPORATION BERRY PLASTICS DESIGN CORPORATION VENTURE PACKAGING, INC. VENTURE PACKAGING MIDWEST, INC. VENTURE PACKAGING SOUTHEAST, INC. NIM HOLDINGS LIMITED NORWICH INJECTION MOULDERS LIMITED 12 1/4 % SENIOR SUBORDINATED NOTES DUE 2004 INDENTURE Dated as of August 24, 1998 UNITED STATES TRUST COMPANY OF NEW YORK Trustee CROSS-REFERENCE TABLE{1} TRUST INDENTURE ACT SECTION INDENTURE SECTION 310(a)(1) 7.10 (a)(2) 7.10 (a)(3) N.A. (a)(4) N.A. (a)(5) 7.10 (b) 7.10 (c) N.A. 311(a) 7.11 (b) 7.11 (c) N.A. 312(a) 2.05 (b) 12.03 (c) 12.03 313(a) 7.06 (b)(1) 7.06 (b)(2) 7.06; 7.07 (c) 7.06; 12.02 (d) 7.06 314(a) 4.03; 12.02 (b) N.A. (c)(1) 12.04 (c)(2) 12.04 (c)(3) N.A. (d) N.A. (e) 12.05 (f) N.A. 315(a) 7.01 (b) 7.05; 12.02 (c) 7.01 (d) 7.01 (e) 6.11 316(a)(last sentence) 2.09 (a)(1)(A) 6.05 (a)(1)(B) 6.04 (a)(2) 6.07; 9.02 (b) 6.07 (c) 2.13 317(a)(1) 6.08 (a)(2) 6.09 (b) 2.04 318(a) 12.01 (b) N.A. (c) 12.01 N.A. means not applicable. **FOOTNOTES** {1}This Cross-Reference Table is not part of the Indenture. 1 TABLE OF CONTENTS PAGE ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE 1 Section 1.01. Definitions. 1 Section 1.02. Other Definitions. 14 Section 1.03. Incorporation by Reference of Trust Indenture Act. 15 Section 1.04. Rules of Construction. 16 ARTICLE 2 THE NOTES 16 Section 2.01. Form and Dating. 16 Section 2.02. Execution and Authentication. 17 Section 2.03. Registrar and Paying Agent. 18 Section 2.04. Paying Agent to Hold Money in Trust. 18 Section 2.05. Lists Of Holders of the Notes. 19 Section 2.06. Transfer and Exchange. 19 Section 2.07. Replacement Notes. 33 Section 2.08. Outstanding Notes. 33 Section 2.09. Treasury Notes. 34 Section 2.10. Temporary Notes. 34 Section 2.11. Cancellation. 34 Section 2.12. Defaulted Interest. 35 Section 2.13. Record Date. 35 Section 2.14. CUSIP Number. 35 ARTICLE 3 REDEMPTION AND PREPAYMENT 36 Section 3.01. Notices to Trustee. 36 Section 3.02. Selection of Notes to be Redeemed. 36 Section 3.03. Notice of Redemption. 37 Section 3.04. Effect of Notice of Redemption. 38 Section 3.05. Deposit of Redemption Price. 38 Section 3.06. Notes Redeemed in Part. 38 Section 3.07. Optional Redemption. 38 Section 3.08. Mandatory Redemption. 39 Section 3.09. Offer to Purchase by Application of Excess Proceeds. 39 ARTICLE 4 COVENANTS 41 Section 4.01. Payment of Notes. 41 Section 4.02. Maintenance of Office or Agency. 41 Section 4.03. Reports. 42 Section 4.04. Compliance Certificate. 42 Section 4.05. Taxes. 43 Section 4.06. Stay, Extension and Usury Laws. 43 Section 4.07. Restricted Payments. 44 Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries 45 Section 4.09. Incurrence of Indebtedness and Issuance of Disqualified Stock 46 Section 4.10. Asset Sales. 47 Section 4.11. Transactions with Affiliates. 49 Section 4.12. Liens. 49 Section 4.13. Additional Guarantees. 49 Section 4.14. Corporate Existence. 50 Section 4.15. Offer to Repurchase Upon Change of Control. 50 Section 4.16. No Senior Subordinated Indebtedness. 51 ARTICLE 5 SUCCESSORS 52 Section 5.01. Merger, Consolidation Or Sale Of Assets. 52 Section 5.02. Successor Corporation Substituted. 52 ARTICLE 6 DEFAULTS AND REMEDIES 53 Section 6.01. Events Of Default. 53 Section 6.02. Acceleration. 55 Section 6.03. Other Remedies. 56 Section 6.04. Waiver Of Past Defaults. 56 Section 6.05. Control By Majority. 57 Section 6.06. Limitation On Suits. 57 Section 6.07. Rights Of Holders Of Notes To Receive Payment. 58 Section 6.08. Collection Suit By Trustee. 58 Section 6.09. Trustee May File Proofs Of Claim. 58 Section 6.10. Priorities. 59 Section 6.11. Undertaking For Costs. 59 ARTICLE 7 TRUSTEE 60 Section 7.01. Duties Of Trustee. 60 Section 7.02. Rights Of Trustee. 61 Section 7.03. Individual Rights of Trustee. 62 Section 7.04. Trustee's Disclaimer. 62 Section 7.05. Notice Of Defaults. 62 Section 7.06. Reports By Trustee To Holders Of The Notes. 62 Section 7.07. Compensation And Indemnity. 63 Section 7.08. Replacement Of Trustee. 64 Section 7.09. Successor Trustee By Merger, Etc. 65 Section 7.10. Eligibility; Disqualification. 65 Section 7.11. Preferential Collection Of Claims Against Company. 65 ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE 66 Section 8.01. Option To Effect Legal Defeasance Or Covenant Defeasance. 66 Section 8.02. Legal Defeasance And Discharge. 66 Section 8.03. Covenant Defeasance. 66 Section 8.04. Conditions To Legal Or Covenant Defeasance. 67 Section 8.05. Deposited Money And Government Securities To Be Held In Trust; Other Miscellaneous Provisions. 68 Section 8.06. Repayment To Company. 69 Section 8.07. Reinstatement. 70 ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER 70 Section 9.01. Without Consent Of Holders Of Notes. 70 Section 9.02. With Consent Of Holders Of Notes. 71 Section 9.03. compliance With Trust Indenture Act. 73 Section 9.04. Revocation And Effect Of Consents. 73 Section 9.05. Notation On Or Exchange Of Notes. 73 Section 9.06. Trustee to Sign Amendments, Etc. 73 ARTICLE 10 NOTE GUARANTEES 74 Section 10.01. Note Guarantee. 74 Section 10.02. Subordination. 75 Section 10.03. liquidation; Dissolution; Bankruptcy. 76 Section 10.04. Default on Designated Senior Indebtedness of The Guarantor 76 Section 10.05. Acceleration of Notes. 77 Section 10.06. When Distribution Must be Paid Over. 77 Section 10.07. Notice by a Guarantor. 78 Section 10.08. Subrogation. 79 Section 10.09. Relative Rights. 79 Section 10.10. Subordination May Not be Impaired by any Guarantor. 79 Section 10.11. Distribution or Notice to Representative. 79 Section 10.12. Rights of Trustee and Paying Agent. 80 Section 10.13. Authorization to Effect Subordination. 80 Section 10.14. Limitation of Guarantor's Liability. 80 Section 10.15. Execution and Delivery of Note Guarantee. 81 Section 10.16. Guarantors May Consolidate, Etc., on Certain Terms. 81 Section 10.17. Releases Following Sale of Assets. 82 ARTICLE 11 SUBORDINATION 82 Section 11.01. Subordination. 82 Section 11.02. Liquidation; Dissolution; Bankruptcy. 83 Section 11.03. Default on Senior Indebtedness. 83 Section 11.04. Acceleration of Notes. 84 Section 11.05. When Distribution Must be Paid Over. 84 Section 11.06. Notice by Company. 85 Section 11.07. Subrogation. 85 Section 11.08. Relative Rights. 85 Section 11.09. Subordination May Not be Impaired by Company. 86 Section 11.10. Distribution or Notice to Representative. 86 Section 11.11. Rights of Trustee and Paying Agent. 86 Section 11.12. Authorization to Effect Subordination. 87 ARTICLE 12 MISCELLANEOUS 87 Section 12.01. Trust Indenture Act Controls. 87 Section 12.02. Notices. 87 Section 12.03. Communication by Holders of Notes With Other Holders of Notes 88 Section 12.04. Certificate and Opinion as to Conditions Precedent. 89 Section 12.05. Statements Required in Certificate or Opinion. 89 Section 12.06. Rules by Trustee and Agents. 89 Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders. 90 Section 12.08. Governing Law. 90 Section 12.09. Consent to Jurisdiction. 90 Section 12.10. No Adverse Interpretation of Other Agreements. 90 Section 12.11. Successors. 90 Section 12.12. Severability. 91 Section 12.13. Counterpart Originals. 91 Section 12.14. Table of Contents, Headings, Etc. 91 EXHIBITS EXHIBIT A FORM OF NOTE EXHIBIT B FORM OF CERTIFICATE OF TRANSFER EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE EXHIBIT D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR EXHIBIT E FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO THE NOTE GUARANTEES 1 INDENTURE dated as of August 24, 1998 among Berry Plastics Corporation, a Delaware corporation (the "Company"), BPC Holding Corporation, a Delaware corporation ("Holding"), Berry Iowa Corporation, a Delaware corporation ("Berry Iowa"), Berry Tri-Plas Corporation, a Delaware corporation ("Berry Tri-Plas"), Berry Sterling Corporation, a Delaware corporation ("Berry Sterling"), AeroCon, Inc., a Delaware corporation ("AeroCon"), PackerWare Corporation, a Kansas corporation ("PackerWare"), Berry Plastics Design Corporation, a Delaware corporation ("Berry Design"), Venture Packaging, Inc., a Delaware corporation ("Venture Holdings"), Venture Packaging Midwest, Inc., an Ohio corporation ("Venture Midwest"), Venture Packaging Southeast, Inc., a South Carolina corporation ("Venture Southeast"), NIM Holdings Limited, a company organized under the laws of England and Wales ("NIM Holdings"), and Norwich Injection Moulders Limited, a company organized under the laws of England and Wales ("Norwich" and, collectively with Holding, Berry Iowa, Berry Tri-Plas, Berry Sterling, AeroCon, PackerWare, Berry Design, Venture Holdings, Venture Midwest, Venture Southeast and NIM Holdings, the "Guarantors") and United States Trust Company of New York, as trustee (the "Trustee"). The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 12 1/4 % Series B Senior Subordinated Notes due 2004 (the "Series B Notes") and the 12 1/4 % Series C Senior Subordinated Notes due 2004 (the "Series C Notes") and, together with the Series B Notes, the "Notes"): ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE 1.1 Definitions. "144A GLOBAL NOTE" means a global note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A. "ACQUIRED DEBT" means, with respect to any specified Person: (i) Indebtedness of any other Person existing at the time such other Person merged with or into or became a Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person and (ii) Indebtedness encumbering any asset acquired by such specified Person. "ADDITIONAL NOTES" means up to $75.0 million in aggregate principal amount of Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof. "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER, that beneficial ownership of 10% or more of the voting securities of a Person shall be deemed to be control. Neither Chase Bank, CITEI, nor their respective Affiliates shall be deemed an Affiliate of the Company or any of its Subsidiaries for purposes of this definition by reason of its direct or indirect beneficial ownership of 15% or less of the Common Stock of Holding or by reason of any employee thereof being appointed to the Board of Directors of Holding. "AGENT" means any Registrar, Paying Agent or co-registrar. "APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Cedel that apply to such transfer or exchange. "ASSET SALE" means (i) the sale, lease, conveyance or other disposition of any property or assets of the Company or any Subsidiary (including by way of a sale-and-leaseback) other than sales of inventory in the ordinary course of business (PROVIDED that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company shall be governed by Sections 4.15 and 5.01 hereof), or (ii) the issuance or sale of Equity Interests of any of its Subsidiaries, in the case of either clause (i) or (ii) above, whether in a single transaction or a series of related transactions, (a) that have a fair market value in excess of $250,000, or (b) for net proceeds in excess of $250,000. For purposes of this definition, the term "Asset Sale" shall not include (i) the transfer of assets by the Company to a Wholly Owned Subsidiary of the Company or by a Wholly Owned Subsidiary of the Company to the Company or to another Wholly Owned Subsidiary of the Company, (ii) any Restricted Payment, dividend or purchase or retirement of Equity Interests permitted under Section 4.07 hereof or (iii) the issuance or sale of Equity Interests of any Subsidiary of the Company, PROVIDED that such Equity Interests are issued or sold in consideration for the acquisition of assets by such Subsidiary or in connection with a merger or consolidation of another Person into such Subsidiary. "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. "BOARD OF DIRECTORS" means the Board of Directors of the Company, or any authorized committee of the Board of Directors. "BORROWING BASE" means, as of any date, an amount equal to the sum of (a) 85% of the face amount of all accounts receivable owned by the Company and its Subsidiaries as of such date that are not more than 90 days past due, and (b) 65% of the book value (calculated on a FIFO basis) of all inventory owned by the Company and its Subsidiaries as of such date, all calculated on a consolidated basis and in accordance with GAAP. To the extent that information is not available as to the amount of accounts receivable or inventory as of a specific date, the Company may utilize the most recent available information for purposes of calculating the Borrowing Base. "BUSINESS DAY" means any day other than a Legal Holiday. "CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be so required to be capitalized on a balance sheet prepared in accordance with GAAP. "CAPITAL STOCK" means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, including, without limitation, 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. "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 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. "CEDEL" means Cedel Bank, SA. "CHANGE OF CONTROL" means the occurrence of any of the following: (i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Holding's or the Company's assets to any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than the Principal and his Related Parties), (ii) the adoption of a plan relating to the liquidation or dissolution of Holding or the Company, (iii) the acquisition by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than by the Principal and his Related Parties) of a direct or indirect interest in more than 35% of the voting power of the voting stock of Holding by way of purchase, merger or consolidation or otherwise if (a) such person or group (as defined above) (other than the Principal and his Related Parties) owns, directly or indirectly, more of the voting power of the voting stock of Holding than the Principal and his Related Parties and (b) such acquisition occurs prior to the Initial Public Offering, (iv) the acquisition by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than by the Principal and his Related Parties) of a direct or indirect interest in more than 50% of the voting power of the voting stock of Holding by way of purchase, merger or consolidation or otherwise if such acquisition occurs subsequent to the Initial Public Offering or (v) the first day on which a majority of the members of the Board of Directors of Holding are not Continuing Directors. "CHASE BANK" means The Chase Manhattan Bank, NA. "CITEI" means The CIT Group/Equity Investments, Inc. "COMMON STOCK OF HOLDING" means the Class A Common Stock, $.00005 par value per share, and the Class B Common Stock, $.00005 par value per share, of Holding. "CONSOLIDATED CASH FLOW" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus (a) an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale (to the extent such losses were deducted in computing Consolidated Net Income), plus (b) provision for taxes based on income or profits of such Person for such period, to the extent such provision for taxes was included in computing Consolidated Net Income, plus (c) Consolidated Interest Expense of such Person for such period to the extent such expense was deducted in computing Consolidated Net Income, plus (d) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent such expense was deducted in computing Consolidated Net Income, plus (e) other non-cash charges (including, without limitation, repricing of stock options, to the extent deducted in computing Consolidated Net Income; but excluding any non-cash charge that requires an accrual or reserve for cash expenditures in future periods or which involved a cash expenditure in a prior period), in each case, on a consolidated basis and determined in accordance with GAAP. "CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE" means, with respect to any Person for any period, the total amount of depreciation and amortization expense (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person for such period on a consolidated basis as determined in accordance with GAAP. "CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for any period, the sum of (a) consolidated interest expense of such Person and its Subsidiaries for such period, whether paid or accrued, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, non-cash interest payments, the interest component of capital leases, and net payments (if any) pursuant to Hedging Obligations), (b) commissions, discounts and other fees and charges paid or accrued with respect to letters of credit and bankers' acceptance financing, and (c) interest actually paid by such Person or its Subsidiaries under a Guarantee of Indebtedness of any other Person. "CONSOLIDATED NET INCOME" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; PROVIDED, that (i) the Net Income of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid to the referent Person or a Wholly Owned Subsidiary thereof that is a Guarantor, (ii) the Net Income of any Person that is a Subsidiary (other than a Wholly Owned Subsidiary) shall be included only to the extent of the amount of dividends or distributions paid to the referent Person or a Wholly Owned Subsidiary thereof that is a Guarantor, (iii) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded and (iv) the cumulative effect of a change in accounting principles shall be excluded. "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 16 months after the acquisition of such business) subsequent to April 21, 1994 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 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. "CONSOLIDATED STEP-UP DEPRECIATION AND AMORTIZATION" means, with respect to any Person for any period, the total amount of depreciation related to the write-up of assets and amortization of such Person for such period on a consolidated basis as determined in accordance with GAAP. "CONTINUING DIRECTORS" means, as of any date of determination, any member of the Board of Directors of Holding who (i) was a member of such Board of Directors on the Issuance Date or (ii) was nominated for election or elected to such Board of Directors with the affirmative vote of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election. "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the Trustee specified in Section 12.02 hereof or such other address as to which the Trustee may give written notice to the Company. "CREDIT FACILITY" means the Second Amended and Restated Financing and Security Agreement, dated as of July 2, 1998, by the Company and NationsBank, N.A., providing for up to $132.6 million of borrowings (plus the 1.5 million UK Revolver and the 4.5 million UK Term Loan), 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. "CUSTODIAN" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. "DEFAULT" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. "DEFINITIVE NOTE" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. "DESIGNATED SENIOR INDEBTEDNESS" means (i) the Senior Bank Indebtedness and (ii) any other Senior Indebtedness (a) permitted to be incurred under this Indenture the principal amount of which is $15 million or more and (b) designated in the instrument creating or evidencing such Senior Indebtedness as "Designated Senior Indebtedness." "DISQUALIFIED STOCK" means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the Holder thereof, in whole or in part, on or prior to July 15, 2004. "DISTRIBUTION" means, for purposes of Articles 10 and 11, a distribution consisting of cash, securities or other property, by set-off or otherwise. "EQUITY INTERESTS" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euroclear system. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXCHANGE NOTES" means the Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof. "EXCHANGE OFFER" has the meaning set forth in the Registration Rights Agreement. "EXCHANGE OFFER REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in the Registration Rights Agreement. "EXISTING INDEBTEDNESS" means Indebtedness of the Company and its Subsidiaries (other than under the Credit Facility) in existence on the Issuance Date, until such amounts are repaid. "FIXED CHARGES" means, with respect to any Person for any period, the sum of (a) Consolidated Interest Expense of such Person for such period, whether paid or accrued, to the extent such expense was deducted in computing Consolidated Net Income and (b) the product of (i) all cash dividend payments (and non-cash dividend payments in the form of securities (other than Disqualified Stock) of an issuer) on any series of Preferred Stock of such Person, times (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP. "FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Company or any of its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee or redemption of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter reference period. For purposes of making the computation referred to above, acquisitions, dispositions and discontinued operations (as determined in accordance with GAAP) that have been made by the Company or any of its Subsidiaries, including all mergers and consolidations, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be calculated on a pro forma basis assuming that all such acquisitions, dispositions, discontinued operations, mergers and consolidations (and the reduction of any associated fixed charge obligations resulting therefrom) had occurred on the first day of the four- quarter reference period. "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 Issuance Date. "GLOBAL NOTES" means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof. "GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(g)(ii), which is required to be placed on all Global Notes issued under this Indenture. "GOVERNMENT SECURITIES" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States of America is pledged. "GUARANTEE" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "GUARANTORS" means each of (i) Holding, Berry Iowa, Berry Tri- Plas, Berry Sterling, AeroCon, PackerWare, Berry Design, Venture Holdings, Venture Midwest, Venture Southwest, NIM Holdings and Norwich and (ii) any other Person that executes a Note Guarantee in accordance with the provisions of this Indenture, and their respective successors and assigns. "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. "HOLDER" means a Person in whose name a Note is registered. "IAI GLOBAL NOTE" means the global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors. "INDEBTEDNESS" means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, and also includes, to the extent not otherwise included, the Guarantee of any Indebtedness of such Person or any other Person. "INDENTURE" means this Indenture, as amended or supplemented from time to time. "INITIAL NOTES" means the first $25.0 aggregate principal amount of Notes issued under this Indenture on the date hereof. "INITIAL PUBLIC OFFERING" means a public offering of the Common Stock of Holding that first results in the Common Stock of Holding becoming listed for trading on a Stock Exchange. "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who is not also a QIB. "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, Equity Interests or other securities and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. "ISSUANCE DATE" means the closing date for the sale and original issuance of the Notes. "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding Business Day, and no interest shall accrue for the intervening period. "LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer. "LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). "LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant to Section 5 of the Registration Rights Agreement. "NET INCOME" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, excluding, however, any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with any Asset Sale (including, without limitation, dispositions pursuant to sale and leaseback transactions), and excluding any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "NET PROCEEDS" means the aggregate cash proceeds received by the Company or any of its Subsidiaries in respect of any Asset Sale, net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that are the subject of such Asset Sale and any reserve for indemnification or adjustment in respect of the sale price of such asset or assets. "1994 INDENTURE" means the indenture dated as of April 21, 1994, as amended, among the Company, the Guarantors and the Trustee, relating to the 1994 Notes. "1994 NOTES" means the Company's 12 1/4 % Senior Subordinated Notes due 2004. "NON-U.S. PERSON" means a Person who is not a U.S. Person. "NOTES" has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture. "OBLIGATIONS" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "OFFERING" means the offering of the Initial Notes by the Company. "OFFICER" means, with respect to any unnatural Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 12.05 hereof. "OPINION OF COUNSEL" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 12.05 hereof. The counsel may be an employee of or counsel to Holding, any Subsidiary of Holding or the Trustee. "PARTICIPANT" means, with respect to the Depositary, Euroclear or Cedel, a Person who has an account with the Depositary, Euroclear or Cedel, respectively (and, with respect to DTC, shall include Euroclear and Cedel). "PERMITTED INVESTMENTS" means (a) any Investments in the Company or in a Wholly Owned Subsidiary of the Company and that is engaged in the same or a similar line of business as the Company and its Subsidiaries were engaged in on the Issuance Date and (b) any Investments in Cash Equivalents. "PERMITTED REFINANCING" means Refinancing Indebtedness if (a) the principal amount of Refinancing Indebtedness does not exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of premiums, accrued interest and reasonable expenses incurred in connection therewith); (b) the Refinancing Indebtedness has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (c) the Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. "PERSON" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "PREFERRED STOCK" means any Equity Interest with preferential right in the payment of dividends or liquidation or any Disqualified Stock. "PRINCIPAL" means Roberto Buaron. "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "REFINANCING INDEBTEDNESS" means Indebtedness issued in exchange for, or the proceeds of which are used to extend, refinance, renew, replace, defease or refund Indebtedness referred to in clauses (a) and (b) of the second paragraph of Section 4.09 hereof. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated as of August 24, 1998, by and among the Company and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time and, with respect to any Additional Notes, one or more registration rights agreements between the Company and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes under the Securities Act." "REGULATION S" means Regulation S promulgated under the Securities Act. "REGULATION S GLOBAL NOTE" means a global Note bearing the Private Placement Legend and deposited with or on behalf of the Depositary and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S. "RELATED PARTY" means with respect to the Principal (A) in the case of an individual, any spouse, sibling or descendant of such Principal (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 such Principal and/or such other Persons referred to in the immediately preceding clause (A). "REPRESENTATIVE" means, for purposes of Articles 10 and 11, the indenture trustee or other trustee, agent or representative for any Senior Indebtedness or, with respect to any Guarantor, for any Senior Indebtedness of such Guarantor. "RESPONSIBLE OFFICER" when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the Private Placement Legend. "RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private Placement Legend. "RESTRICTED INVESTMENT" means any Investment other than a Permitted Investment. "RULE 144" means Rule 144 promulgated under the Securities Act. "RULE 144A" means Rule 144A promulgated under the Securities Act. "RULE 903" means Rule 903 promulgated under the Securities Act. "RULE 904" means Rule 904 promulgated the Securities Act. "SEC" means the Securities and Exchange Commission. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SENIOR BANK INDEBTEDNESS" means the Indebtedness outstanding under the Credit Facility as such agreement may be restated, further amended, supplemented or otherwise modified or replaced from time to time hereafter, together with any refunding or replacement of any such Indebtedness. "SENIOR INDEBTEDNESS" means (i) the Senior Bank Indebtedness and (ii) any other Indebtedness permitted to be incurred by the Company or a Guarantor, as the case may be, under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is PARI PASSU with or subordinated in right of payment to the Notes or a Note Guarantee, as the case may be. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness shall not include (w) any liability for federal, state, local or other taxes owed or owing by the Company or a Guarantor, as the case may be, (x) any Indebtedness of the Company or a Guarantor, as the case may be, to Holding or to any of Holding's other Subsidiaries or other Affiliates, (y) any trade payables or (z) any Indebtedness that is incurred in violation of this Indenture. "SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as defined in the Registration Rights Agreement. "STOCK EXCHANGE" means the New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market. "SUBSIDIARY" means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof. "TAX SHARING AGREEMENT" means that certain Tax Sharing Agreement, as in effect on the closing date of the Offering, between the Company and Holding. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA. "TRUSTEE" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "UK TERM LOAN" means the 4.5 million term loan facility of the Company under the Credit Facility. "UK REVOLVER" means the 1.5 million revolving credit facility of the Company under the Credit Facility. "UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend. "UNRESTRICTED GLOBAL NOTE" means a permanent global Note substantially in the form of Exhibit A attached hereto that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not bear the Private Placement Legend. "U.S. PERSON" means a U.S. person as defined in Rule 902(o) under the Securities Act. "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the sum of the products obtained by multiplying (x) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the due date of such payment, by (b) the then outstanding principal amount of such Indebtedness. "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. 1.2 OTHER DEFINITIONS. Defined in Term Section "Affiliate Transaction" 4.11 "Asset Sale Offer" 3.09 "Benefited Party" 10.01 "Change of Control Offer" 4.15 "Change of Control Payment" 4.15 "Change of Control Payment Date" 4.15 "Covenant Defeasance" 8.03 "Event of Default" 6.01 "Excess Proceeds" 4.10 "Guarantor Payment Blockage Notice 10.04 "incur" 4.09 "Legal Defeasance" 8.02 "Note Guarantee" 10.01 "Offer Amount" 3.09 "Offer Period" 3.09 "Paying Agent" 2.03 "Payment Blockage Notice" 11.03 "Payment Default" 6.01 "Purchase Date" 3.09 "Registrar" 2.03 "Restricted Payments" 4.07 "Termination Date" 2.06 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "INDENTURE SECURITIES" means the Notes; "INDENTURE SECURITY HOLDER" means a Holder of a Note; "INDENTURE TO BE QUALIFIED" means this Indenture; "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; "OBLIGOR" on the Notes means the Company, the Guarantors and any successor obligor upon the Notes or any Note Guarantee, as the case may be. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. 1.4 RULES OF CONSTRUCTION. Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (c) "or" is not exclusive; (d) words in the singular include the plural, and in the plural include the singular; (e) provisions apply to successive events and transactions; and (f) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time. ARTICLE II THE NOTES 2.1 Form and Dating. (A) GENERAL. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto, the terms of which are incorporated in and made a part of this Indenture. The notation on each Note relating to the Note Guarantee shall be substantially in the form set forth on Exhibit B, which is part of this Indenture. The Notes may have notations, legends or endorsements approved as to form by the Company and required by law, stock exchange rule, agreements to which the Company or any Guarantor is subject or usage. Each Note shall be dated the date of its authentication. The Notes shall be issuable only in denominations of $1,000 and integral multiples thereof. (B) GLOBAL NOTES. Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof. (C) EUROCLEAR AND CEDEL PROCEDURES APPLICABLE. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Cedel Bank. 2.2 EXECUTION AND AUTHENTICATION. Two Officers of the Company shall sign the Notes for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Notes and may be in facsimile form. An Officer of each Guarantor shall sign the Note Guarantee for such Guarantor by manual or facsimile signature. If an Officer of the Company or a Guarantor whose signature is on a Note or a Note Guarantee, as the case may be, no longer holds that office at the time the Note is authenticated, the Note or the Note Guarantee, as the case may be, shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature of the Trustee shall be conclusive evidence that the Note has been authenticated under this Indenture. The form of Trustee's authentication to be borne by the Notes shall be substantially as set forth in Exhibit A hereto. The Trustee shall, upon a written order of the Company signed by two Officers of the Company, authenticate Notes with the Note Guarantees endorsed thereon for original issue up to an aggregate principal amount stated in paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding at any time shall not exceed the amount set forth herein except as provided in Section 2.07 hereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or any Guarantor or an Affiliate of the Company or any Guarantor. Any authenticating agent may resign at any time by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time terminate the agency of the authenticating agent by giving written notice of termination to the authenticating agent and the Company. Upon receiving notice of such resignation or upon such termination by the Trustee, the Trustee may appoint a successor authenticating agent acceptable to the Company, in which case it shall so notify the Holders. Upon its appointment hereunder, any successor authenticating agent shall become vested with all the rights, powers and duties of its predecessor hereunder. The Company shall agree, by separate instrument, to pay each authenticating agent from time to time reasonable compensation for its services. 2.3 REGISTRAR AND PAYING AGENT. The Company and the Guarantors shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (including any co-registrar, the "REGISTRAR") and (ii) an office or agency where Notes may be presented for payment ("PAYING AGENT"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent, Registrar or co-registrar without prior notice to any Holder of a Note. The Company shall notify the Trustee and the Trustee shall notify the Holders of the Notes of the name and address of any Agent not a party to this Indenture. The Company or any Guarantor may act as Paying Agent, Registrar or co-registrar. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which shall incorporate the provisions of the TIA. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee of the name and address of any such Agent. If the Company fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such, and shall be entitled to appropriate compensation in accordance with Section 7.07 hereof. The Company initially appoints the Trustee as Registrar, Paying Agent and agent for service of notices and demands in connection with the Notes. 2.4 PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of the Holders of the Notes or the Trustee all money held by the Paying Agent for the payment of principal of, premium or Liquidated Damages, if any, and interest on the Notes, and shall notify the Trustee of any Default by the Company or any Guarantor in making any such payment. While any such Default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Guarantor) shall have no further liability for the money delivered to the Trustee. If the Company or a Guarantor acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders of the Notes all money held by it as Paying Agent. Upon the occurrence of either event specified in Section 6.01(h) or (i), the Trustee shall serve as Paying Agent for the Notes. 2.5 LISTS OF HOLDERS OF THE NOTES. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of the Notes and shall otherwise comply with TIA
312(a). If the Trustee is not the Registrar, the Company and/or any Guarantor shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of the Notes, including the aggregate principal amount of the Notes held by each thereof, and the Company and each Guarantor shall otherwise comply with TIA
312(a). 2.6 TRANSFER AND EXCHANGE. (A) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof. (B) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: (i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof. (iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following: (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and (C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications and certificates and Opinion of Counsel required by item (3) thereof, if applicable. (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. (c) Transfer or Exchange of Beneficial Interests for Definitive Notes. (i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker- dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall not bear the Private Placement Legend. (d) Transfer and Exchange of Definitive Notes for Beneficial Interests. (i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; (F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note. (ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or (2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. (iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. (E) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e). (i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE NOTES. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: (A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. (ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or (2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. (f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount. (g) LEGENDS. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. (i) PRIVATE PLACEMENT LEGEND. (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY AND THE GUARANTORS SO REQUEST), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE." (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. (ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend in substantially the following form: "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY." (h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. (i) General Provisions Relating to Transfers and Exchanges. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's order or at the Registrar's request. (ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof). (iii) The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (v) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding Interest Payment Date. (vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. (viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile. 2.7 REPLACEMENT NOTES. If any mutilated Note is surrendered to the Trustee, or the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon the written order of the Company signed by two Officers of the Company, shall authenticate and deliver a replacement Note (accompanied by a notation of the Note Guarantee duly endorsed by the Guarantors) if the Trustee's requirements for replacements of Notes are met. If required by the Trustee, the Company or the Guarantors, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee, the Company and the Guarantors to protect the Company, the Guarantors, the Trustee, any Agent or any authenticating agent from any loss which any of them may suffer if a Note is replaced. Each of the Company, the Guarantors and the Trustee may charge for its expenses in replacing a Note. Every replacement Note is an additional obligation of the Company and the Guarantors and shall be entitled to all of the benefits of this Indenture equally and proportionally with all other Notes duly issued hereunder. 2.8 OUTSTANDING NOTES. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section 2.08 as not outstanding. If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. Subject to Section 2.09 hereof, a Note does not cease to be outstanding because the Company, a Subsidiary of the Company or an Affiliate of the Company holds the Note. 2.9 TREASURY NOTES. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, any Guarantor, any of their respective Subsidiaries or any Affiliate of the Company or any Guarantor shall be considered as though not outstanding, except that for purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Responsible Officer knows to be so owned shall be so considered. Notwithstanding the foregoing, Notes that are to be acquired by the Company, any Guarantor, any Subsidiary of the Company or any Guarantor or an Affiliate of the Company or any Guarantor pursuant to an exchange offer, tender offer or other agreement shall not be deemed to be owned by the Company, a Guarantor, a Subsidiary of the Company or a Guarantor or an Affiliate of the Company or a Guarantor until legal title to such Notes passes to the Company, Guarantor, Subsidiary of the Company or a Guarantor or Affiliate of the Company or a Guarantor, as the case may be. 2.10 TEMPORARY NOTES. Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes (accompanied by a notation of the Note Guarantee duly endorsed by the Guarantors). Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company and the Trustee consider appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and the Trustee, upon receipt of the written order of the Company signed by two Officers of the Company, shall authenticate definitive Notes (accompanied by a notation of the Note Guarantee duly endorsed by the Guarantors) in exchange for temporary Notes. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as definitive Notes. 2.11 CANCELLATION. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes (subject to the record retention requirement of the Exchange Act), unless the Company directs cancelled Notes to be returned to it. The Company may not issue new Notes to replace Notes that it has redeemed or paid or that have been delivered to the Trustee for cancellation. All cancelled Notes held by the Trustee shall be destroyed and certification of their destruction delivered to the Company, unless by a written order, signed by two Officers of the Company, the Company shall direct that cancelled Notes be returned to it. 2.12 DEFAULTED INTEREST. If the Company or any Guarantor defaults in a payment of interest on the Notes, the Company or such Guarantor (to the extent of their obligations under the Note Guarantees) shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders of the Notes on a subsequent special record date, which date shall be at the earliest practicable date but in all events at least five Business Days prior to the payment date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall fix or cause to be fixed each such special record date and payment date, and shall, promptly thereafter, notify the Trustee of any such date. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Holders entitled to such defaulted interest as in this Subsection provided. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Holders entitled to such defaulted interest as in this Subsection provided. At least 15 days before the special record date, the Company (or the Trustee, in the name of and at the expense of the Company) shall mail to Holders of the Notes a notice that states the special record date, the related payment date and the amount of such interest to be paid. 2.13 RECORD DATE. The record date for purposes of determining the identity of Holders of the Notes entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture shall be determined as provided for in TIA
316(c). 2.14 CUSIP NUMBER. The Company in issuing the Notes may use a "CUSIP" number and, if it does so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a convenience to Holders; PROVIDED that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Notes and that reliance may be placed only on the other identification numbers printed on the Notes. The Company will promptly notify the Trustee of any change in the CUSIP number. ARTICLE III REDEMPTION AND PREPAYMENT 3.1 Notices to Trustee. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. If the Company is required to make an offer to purchase Notes pursuant to the provisions of Sections 4.10 or 4.15, it shall furnish to the Trustee, at least 30 days before the scheduled purchase date, an Officers' Certificate setting forth (i) the Section of this Indenture pursuant to which the offer to purchase shall occur, (ii) the offer's terms, (iii) the purchase price, (iv) the principal amount of the Notes to be purchased, and (v) a statement to the effect that (a) the Company or one of its Subsidiaries has made an Asset Sale and there are Excess Proceeds aggregating more than $5.0 million and the amount of such Excess Proceeds, or (b) a Change of Control has occurred, as applicable. 3.2 SELECTION OF NOTES TO BE REDEEMED. If less than all of the Notes are to be purchased in an Asset Sale Offer or redeemed at any time, the Trustee shall select the Notes to be purchased or redeemed among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a PRO RATA basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. In the event that less than all of the Notes properly tendered in an Asset Sale Offer are to be purchased, the particular Notes to be purchased shall be selected promptly upon the expiration of such Asset Sale Offer. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial purchase or redemption, the principal amount thereof to be purchased or redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be purchased or redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be purchased or redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. In the event the Company is required to make an Asset Sale Offer pursuant to Sections 3.09 and 4.10 hereof and the amount of Excess Proceeds to be applied to such purchase would result in the purchase of a principal amount of Notes which is not evenly divisible by $1,000, the Trustee shall promptly refund to the Company the portion of such Excess Proceeds that is not necessary to purchase the immediately lesser principal amount of Notes that is so divisible. 3.3 NOTICE OF REDEMPTION. At least 30 days but not more than 60 days before a purchase or redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. The notice shall identify the Notes to be redeemed and shall state: (a) the redemption date; (b) the redemption price; (c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note; (d) the name and address of the Paying Agent; (e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; (g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and (h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. 3.4 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. 3.5 DEPOSIT OF REDEMPTION PRICE. One Business Day prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed. If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. 3.6 NOTES REDEEMED IN PART. Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon the Company's written request, the Trustee shall authenticate for the Holder and deliver at the expense of the Company a new Note (accompanied by a notation of the Note Guarantee duly endorsed by the Guarantors) equal in principal amount to the unredeemed portion of the Note surrendered. 3.7 OPTIONAL REDEMPTION. (a) On or after April 15, 1999, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on April 15 of the years indicated below: YEAR PERCENTAGE 1999 106.125% 2000 104.083% 2001 102.042% 2002 and thereafter 100.000% (b) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 3.8 MANDATORY REDEMPTION. The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS. In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an offer to all Holders to purchase Notes (an "ASSET SALE OFFER"), it shall follow the procedures specified below. The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "OFFER PERIOD"). No later than five Business Days after the termination of the Offer Period (the "PURCHASE DATE"), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT") or, if less than the Offer Amount has been tendered, all Notes tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest, if any, shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer. Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state: (a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open; (b) the Offer Amount, the purchase price and the Purchase Date; (c) that any Note not tendered or accepted for payment shall continue to accrue interest; (d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date; (e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased; (f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; (g) that Holders shall be entitled to withdraw their election if the Company, the depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; (h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Company shall select the Notes to be purchased pursuant to the terms of Section 3.02 hereof (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (i) that Holders whose Notes were purchased only in part shall be issued (or transferred by book entry) new Notes (accompanied by a notation of the Note Guarantee duly endorsed by the Guarantors) equal in principal amount to the unpurchased portion of the Notes surrendered. On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, pursuant to the terms of Section 3.02 hereof, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company shall authenticate and mail or deliver such new Note (accompanied by a notation of the Note Guarantee duly endorsed by the Guarantors) to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date. Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. ARTICLE IV COVENANTS 4.1 Payment of Notes. The Company shall pay or cause to be paid the principal of, premium and Liquidated Damages, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Guarantor, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post- petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if any, (without regard to any applicable grace period) at the same rate to the extent lawful. 4.2 MAINTENANCE OF OFFICE OR AGENCY. The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company or the Guarantors in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03. 4.3 REPORTS. Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company shall (i) furnish to the Trustee and to all Holders all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms l0-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by the Company's certified independent accountants and (ii) file a copy of all such information and any other information required by Section 13 or 15(d) of the Exchange Act with the SEC for public availability (unless the SEC will not accept such a filing) and file such information with the Trustee and make such information available to investors, securities analysts and broker-dealers who request it in writing. Notwithstanding the foregoing, to the extent permitted under the rules and regulations of the SEC, the Company may instead supply such information with respect to Holding. The Company shall at all times comply with TIA
314(a). 4.4 COMPLIANCE CERTIFICATE. (a) Each of the Company and the Guarantors shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries and the Guarantors during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company, its Subsidiaries or such Guarantors has kept, observed, performed and fulfilled their respective obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company, its Subsidiaries or such Guarantors, as the case may be, has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company or such Guarantor, as the case may be, is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company, its Subsidiaries or such Guarantor, as the case may be, is taking or proposes to take with respect thereto. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03 above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article Four or Article Five hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) Each of the Company and the Guarantors shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company or such Guarantor, as the case may be, is taking or proposes to take with respect thereto. 4.5 TAXES. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes. 4.6 STAY, EXTENSION AND USURY LAWS. Each of the Company and the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. 4.7 RESTRICTED PAYMENTS. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any distribution on account of the Company's or any of its Subsidiaries' Equity Interests (other than: dividends or distributions payable in Equity Interests of the Person making such dividend or distribution, other than Disqualified Stock; or dividends or distributions payable to the Company or any Wholly Owned Subsidiary of the Company that is a Guarantor); (ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company or any Subsidiary or other Affiliate of the Company (other than any such Equity Interests owned by the Company or any Wholly Owned Subsidiary of the Company that is a Guarantor); (iii) purchase, redeem or otherwise acquire or retire for value any Indebtedness (other than the 1994 Notes, 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; (iv) directly or indirectly make any loan or advance to, or make any payment to, Holding; or (v) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (v) above being collectively referred to as "Restricted Payments"), unless, at the time of such Restricted Payment: (a) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09 hereof; and (c) such Restricted Payment, (A) in the case of any Restricted Payment other than as defined by clause (i) above, together with the aggregate of all other Restricted Payments made by the Company and its Subsidiaries after April 21, 1994 (including Restricted Payments permitted by the next succeeding paragraph (other than such Restricted Payments permitted by clauses (iv), (v) and (vi) of the next succeeding paragraph)), or (B) in the case of any Restricted Payment defined in clause (i) above, together with the aggregate of all other Restricted Payments made by the Company and its Subsidiaries after April 21, 1994 (including Restricted Payments permitted by the next succeeding paragraph (other than Restricted Payments permitted by clauses (iv) and (v) of the next succeeding paragraph)), is less than the sum of (x) 50% of the sum of the Consolidated Net Income and Consolidated Step-Up Depreciation and Amortization of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter that began after April 21, 1994 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income plus Consolidated Step-Up Depreciation and Amortization for such period is a deficit, 100% of such deficit), plus (y) 100% of the aggregate net cash proceeds received by the Company from the issue or sale since April 21, 1994 of Equity Interests of the Company or of debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock). The foregoing provisions shall not prohibit (i) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of this Indenture; (ii) the redemption, repurchase, retirement or other acquisition of any Equity Interests of the Company in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of other Equity Interests of the Company (other than any Disqualified Stock); (iii) the defeasance, redemption or repurchase of PARI PASSU or subordinated Indebtedness in a Permitted Refinancing; (iv) a Restricted Payment to Holding pursuant to the Tax Sharing Agreement as the same may be amended from time to time in a manner that is not materially adverse to the Company; (v) a Restricted Payment to Holding to pay its operating and administrative expenses including, without limitation, directors fees, legal and audit expenses, SEC compliance expenses and corporate franchise and other taxes, not to exceed in any fiscal year $500,000; (vi) a Restricted Payment to Holding to pay management fees not to exceed $750,000 in any fiscal year of the Company; (vii) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Holding pursuant to any management equity subscription agreement or stock option agreement in effect as of April 21, 1994; PROVIDED, HOWEVER, that (a) the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $1 million and (b) no Default or Event of Default shall have occurred and be continuing immediately after such transaction; and (viii) Investments by the Company in joint ventures or similar projects in a business similar to that conducted by the Company and its Subsidiaries on the Issuance Date in an aggregate amount not to exceed $1 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section were computed, which calculations may be based upon the Company's latest available financial statements. 4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. The Company 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 (a)(i) pay dividends or make any other distributions to the Company or any of its Subsidiaries (A) on its Capital Stock or (B) with respect to any other interest or participation in, or measured by, its profits, or (ii) pay any indebtedness owed to the Company or any of its Subsidiaries, (b) make loans or advances to the Company or any of its Subsidiaries or (c) transfer any of its properties or assets to the Company or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reasons of (i) Existing Indebtedness as in effect on the Issuance Date, (ii) the Credit Facility as in effect on the Issuance Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, PROVIDED that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are no more restrictive with respect to such dividend and other payment restrictions than those contained in the Credit Facility as in effect on the Issuance Date, (iii) the 1994 Indenture and the 1994 Notes, (iv) this Indenture and the Notes, (v) applicable law, (vi) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company 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, PROVIDED that the Consolidated Cash Flow of such Person, to the extent of such restriction, is not taken into account in determining whether such acquisition was permitted by the terms of this Indenture, (vii) by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices, (viii) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (c) above on the property so acquired, or (ix) permitted Refinancing Indebtedness, PROVIDED that the restrictions contained in the agreements governing such Refinancing Indebtedness are no more restrictive than those contained in the agreements governing the Indebtedness being refinanced. 4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise become directly or indirectly liable with respect to (collectively, "incur" and correlatively, an "incurrence" of) any Indebtedness (including Acquired Debt) and the Company shall not issue any, and shall not permit any of its Subsidiaries to issue any, shares of Disqualified Stock; 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 2.25 to 1 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. In addition, each of the following Indebtedness shall be subordinated in right of payment to the Notes or the Note Guarantees, as the case may be, at least to the same extent as the Notes are subordinated to Senior Indebtedness: (A) all Indebtedness that does not provide for all interest payments to be made in cash; (B) all Indebtedness of the Company to any of its Subsidiaries; and (C) any Indebtedness of the Company and its Subsidiaries if at the time of incurrence thereof, Indebtedness of the Company and the Guarantors that is PARI PASSU in right of payment to the Notes and the Note Guarantees (including, on a pro forma basis, the Indebtedness to be incurred) exceeds $100 million other than the 1994 Notes and the Notes. The foregoing limitations shall not apply to (a) revolving credit Indebtedness and letters of credit pursuant to the Credit Facility in an aggregate principal amount not to exceed at any one time outstanding the greater of (i) $60 million in principal amount (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company thereunder), less the aggregate amount of all repayments after April 21, 1994 that permanently reduce the commitment under the Credit Facility, and (ii) the Borrowing Base; (b) the Existing Indebtedness; (c) the Notes (other than any Additional Notes) or any Note Guarantee; (d) the incurrence by the Company or any of its Subsidiaries of Refinancing Indebtedness; PROVIDED, HOWEVER, that such Refinancing Indebtedness is a Permitted Refinancing; (e) Indebtedness between or among the Company and any of its Wholly Owned Subsidiaries that are Guarantors; (f) Indebtedness from the Company to Holding PROVIDED that the advances evidenced by such Indebtedness are permitted under Section 4.07 hereof; (g) Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding; and (h) the incurrence by the Company or its Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other clause of this paragraph) in an aggregate principal amount at any time outstanding not to exceed the sum of $1 million at any one time. Notwithstanding anything to the contrary, the Company and its Subsidiaries shall not be permitted to incur any additional Senior Indebtedness unless it is secured. 4.10 ASSET SALES. The Company shall not, and shall not permit any of its Subsidiaries to, conduct an Asset Sale, unless (x) the Company (or the Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee no later than immediately prior to the consummation of such proposed Asset Sale with respect to any Asset Sale involving aggregate payments in excess of $1 million) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefor received by the Company or such Subsidiary is in the form of cash; PROVIDED, HOWEVER, that the amount of (A) any liabilities (as shown on the Company's or such Subsidiary's most recent balance sheet or in the notes thereto), of the Company or any Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Guarantee thereof) that are assumed by the transferee of any such assets and (B) any notes or other obligations received by the Company or any such Subsidiary from such transferee that are immediately converted by the Company or such Subsidiary into cash (to the extent of the cash received), shall be deemed to be cash for purposes of this Section 4.10. Within 180 days after any Asset Sale, the Company may apply the Net Proceeds from such Asset Sale to either (a) permanently reduce Senior Indebtedness, or (b) make an investment in another business or capital expenditure or other long-term/tangible assets, in each case, in the same or a similar line of business as the Company was engaged in on the Issuance Date. Pending the final application of any such Net Proceeds, the Company may temporarily reduce Senior Bank Indebtedness or otherwise invest such Net Proceeds in Cash Equivalents. Any Net Proceeds from the Asset Sale that are not applied or invested as provided in the first sentence of this paragraph shall be deemed to constitute "Excess Proceeds." If the aggregate amount of Excess Proceeds exceeds $5 million, upon completion of the Asset Sale Offer required under the 1994 Indenture, the Company shall make an Asset Sale Offer to all Holders of Notes to purchase the maximum principal amount of Notes, that is an integral multiple of $1,000, that may be purchased out of the Excess Proceeds, if any, remaining upon completion of the Asset Sale Offer required under 1994 Indenture, at an offer price in cash in an amount equal to 101% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, in accordance with the procedures set forth in Section 3.09 hereof. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased in the manner described under Section 3.02 hereof. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset to zero. Any Asset Sale Offer pursuant to this Section 4.10 shall be made pursuant to the provisions of Section 3.09 hereof. The Company shall comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes in connection with an Asset Sale. 4.11 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into any contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless (a) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Subsidiary with a Person who was not an Affiliate and (b) the Company delivers to the Trustee (i) with respect to any Affiliate Transaction involving aggregate payments in excess of $2 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (a) above and that such Affiliate Transaction has been approved by a majority of the Board of Directors and (ii) with respect to any Affiliate Transaction involving aggregate payments in excess of $5 million, an opinion as to the fairness to the Company or such Subsidiary from a financial point of view issued by an investment banking firm of national standing; PROVIDED, HOWEVER, that (i) any employment agreement entered into by the Company or any of its Subsidiaries in the ordinary course of business and consistent with the past practice of the Company or such Subsidiary; (ii) transactions between or among the Company and/or its Subsidiaries; (iii) transactions permitted under Section 4.07 hereof; and (iv) the advisory fee paid to First Atlantic Capital, Ltd. in connection with the Offering, in each case, shall not be deemed Affiliate Transactions. 4.12 LIENS. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly (i) create, incur, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by the Company or any Subsidiary, or any income or profits therefrom or (ii) assign or convey any right to receive income therefrom, in any such case to secure any Indebtedness (other than Senior Indebtedness of the Company or Senior Indebtedness of a Guarantor permitted to be incurred pursuant to this Indenture) unless contemporaneously therewith or prior thereto, effective provision is made (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) whereby the Notes or a Note Guarantee are secured equally and ratably with such other Indebtedness (or if such other Indebtedness is subordinated to the Notes or a Note Guarantee, the Notes or a Note Guarantee, as the case may be, are secured on a basis with the same relative priority to such other Indebtedness). 4.13 ADDITIONAL GUARANTEES. If the Company or any of its Subsidiaries shall (i) transfer or cause to be transferred, in one or a series of related transactions (other than a transaction or series of related transactions constituting a Restricted Payment permitted pursuant to Section 4.07 hereof), any assets, businesses, divisions, real property or equipment having a book value in excess of $1 million to any Subsidiary that is not a Guarantor or (ii) acquire another Subsidiary having (a) total assets with a book value in excess of $1 million or (b) Consolidated Cash Flow in excess of $1 million, then the Company shall cause such transferee or acquired Subsidiary to (A) execute and deliver to the Trustee a supplemental indenture in form reasonably satisfactory to the Trustee pursuant to which such transferee or acquired Subsidiary shall unconditionally guarantee (a "Note Guarantee," as defined in Article 10 hereof), on a senior subordinated basis, all of the Company's obligations under the Notes on the terms set forth in Article 10 hereof and (B) deliver to the Trustee an Opinion of Counsel as to the enforceability of such Note Guarantee. 4.14 CORPORATE EXISTENCE. Subject to Article 5 and Article 10 hereof, as the case may be, the Company and each of the Guarantors shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and the corporate, partnership or other existence of each of their Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company, any such Guarantor or any such Subsidiary, as the case may be, and (ii) the rights (charter and statutory), licenses and franchises of the Company, the Guarantors and their respective Subsidiaries; PROVIDED, HOWEVER, that the Company and the Guarantors shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of their respective Subsidiaries, if the Board of Directors of Holding shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company, the Guarantors and their Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL. Upon the occurrence of a Change of Control, the Company shall make an offer to each Holder to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the offer described below (the "CHANGE OF CONTROL OFFER") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 10 days following any Change of Control, the Company will mail a notice to each Holder stating: (i) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment; (ii) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the "CHANGE OF CONTROL PAYMENT DATE"); (iii) that any Note not tendered will continue to accrue interest; (iv) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date; (v) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; (vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have such Notes purchased; and (vii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes in connection with a Change of Control. (b) On the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept for payment Notes or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the Notes or portions thereof tendered to the Company. The Paying Agent shall promptly mail to each Holder of Notes so accepted the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered by such Holder, if any; PROVIDED, that each such new Note shall be in a principal amount of $1,000 or an integral multiple thereof. Prior to making the Change of Control Payment, but in any event within 90 days following a Change of Control, the Company shall either repay all outstanding Designated Senior Indebtedness or obtain the requisite consents, if any, under all agreements governing outstanding Designated Senior Indebtedness to permit the repurchase of Notes required by this Section 4.15. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 4.16 NO SENIOR SUBORDINATED INDEBTEDNESS. Notwithstanding the provisions of Section 4.09 hereof, (i) the Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Indebtedness and senior in any respect in right of payment to the Notes, and (ii) no Guarantor shall incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to its Senior Indebtedness and senior in any respect in right of payment to its Note Guarantee. ARTICLE V SUCCESSORS 5.1 Merger, Consolidation Or Sale Of Assets. The Company shall not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another Person unless (i) the Company is the surviving Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the Person formed by or surviving any such consolidation or merger (if other than the Company) or Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee, under the Notes and this Indenture; (iii) immediately after such transaction no Default or Event of Default exists; and (iv) the Company or any Person formed by or surviving any such consolidation or merger, or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made (A) shall have Consolidated Net Worth (immediately after the transaction) equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction and (B) shall, at the time of such 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 hereof. 5.2 SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company or the Company and its Subsidiaries on a consolidated basis in accordance with Section 5.01 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the "Company" or the "Guarantor," as the case may be, shall refer instead to the successor corporation and not to the Company or the Guarantor, as the case may be), and may exercise every right and power of the Company or the Guarantors, as the case may be, under this Indenture with the same effect as if such successor Person had been named as the Company or Guarantor, as the case may be, herein; PROVIDED, HOWEVER, that the predecessor Company and the predecessor Subsidiaries that are Guarantors shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale of all of the Company's assets that meets the requirements of Section 5.01 hereof. The Trustee shall, at the written request of the Company and the Holders, authenticate and deliver new Notes representing such successor pursuant to the terms of Section 2.02 hereof. ARTICLE VI DEFAULTS AND REMEDIES 6.1 Events Of Default. An "Event of Default" occurs if: (a) the Company or the Guarantors default in the payment when due of interest or Liquidated Damages, if any, on the Notes (whether or not prohibited by the subordination provisions of Article 10 or Article 11 hereof, as the case may be) and such default continues for a period of 30 days; (b) the Company or the Guarantors default in the payment when due of principal of or premium, if any, on the Notes (whether or not prohibited by the subordination provisions of Article 10 or Article 11 hereof, as the case may be) when the same becomes due and payable at maturity, upon redemption (including in connection with an offer to purchase) or otherwise; (c) the Company fails to comply with any of the provisions of Section 4.07, 4.09, 4.10 or 4.15 hereof; (d) the Company or the Guarantors fail to observe or perform any other covenant, representation, warranty or other agreement in this Indenture or the Notes for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes (including Additional Notes, if any) then outstanding; (e) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company, Holding or any of their respective Subsidiaries (or the payment of which is guaranteed by the Company, Holding or any of their respective Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the Issuance Date, which default (i) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (a "PAYMENT DEFAULT") or (ii) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $2 million or more; (f) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company, Holding or any of their respective Subsidiaries and such judgment or judgments remain unpaid or undischarged for a period (during which execution shall not be effectively stayed) of 60 days, PROVIDED that the aggregate of all such undischarged judgments exceeds $2 million; (g) except as permitted by this Indenture, any Note Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor (or its successors or assigns), or any Person acting on behalf of such Guarantor (or its successors or assigns), shall deny or disaffirm its obligations or shall fail to comply with any obligations under its Note Guarantee. (h) the Company, any Guarantor or any of their respective Subsidiaries pursuant to or within the meaning of Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit of its creditors, or (v) generally is not paying its debts as they become due; or (i) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company, any Guarantor or any of their respective Subsidiaries in an involuntary case; (ii) appoints a Custodian of the Company, any Guarantor or any of their respective Subsidiaries or for all or substantially all of the property of the Company, any Guarantor or any of their respective Subsidiaries; or (iii) orders the liquidation of the Company, any Guarantor or any of their respective Subsidiaries and the order or decree remains unstayed and in effect for 60 consecutive days. 6.2 ACCELERATION. If any Event of Default (other than an Event of Default specified in clause (h) or (i) of Section 6.01 hereof with respect to the Company, any Guarantor or any of their respective Subsidiaries) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes (including Additional Notes, if any) may declare all the Notes to be due and payable immediately; PROVIDED, HOWEVER, that if any Indebtedness is outstanding pursuant to the Credit Facility, upon a declaration of acceleration, the principal and interest on the Notes shall be payable, upon the earlier of (i) the day which is five Business Days after notice of acceleration is given to the Company and the lender under the Credit Facility or (ii) the date of acceleration of the Indebtedness under the Credit Facility. Notwithstanding the foregoing, if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof occurs with respect to the Company, Holding or any of their respective Subsidiaries, all outstanding Notes shall be due and payable immediately without further action or notice. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including Additional Notes, if any) by written notice to the Trustee may on behalf of all of the Holders rescind any acceleration of the Notes and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived. If an Event of Default occurs on or after April 15, 1999 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium shall also become and be immediately due and payable, to the extent permitted by law, anything in this Indenture or in the Notes to the contrary notwithstanding. If an Event of Default occurs prior to April 15, 1999 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to such date, then, upon acceleration of the Notes, an additional premium shall also become and be immediately due and payable in an amount, of 107.350% of the principal amount that would otherwise be due but for the provisions of this sentence. 6.3 OTHER REMEDIES. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and Liquidated Damages, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture, including, but not limited to, notifying the Guarantors pursuant to the terms hereof and the Note Guarantees. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article Six or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. 6.4 WAIVER OF PAST DEFAULTS. Holders of not less than a majority in aggregate principal amount of the Notes then outstanding (including Additional Notes, if any) by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium and Liquidated Damages, if any, or interest on, the Notes (including in connection with an offer to purchase) (PROVIDED, HOWEVER, that the Holders of a majority in aggregate principal amount of the then outstanding Notes (including Additional Notes, if any) may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. 6.5 CONTROL BY MAJORITY. Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. 6.6 LIMITATION ON SUITS. A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if: (a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default; (b) the Holders of at least 25% in principal amount of the then outstanding Notes (including Additional Notes, if any) make a written request to the Trustee to pursue the remedy; (c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense reasonably anticipated by the Trustee in complying with such request; (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) do not give the Trustee a direction inconsistent with the request. A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and Liquidated Damages, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of such Holder. 6.8 COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes, including the Guarantors), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or securities or other property payable or deliverable upon the exchange of the Notes or upon any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 6.10 PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: FIRST: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; SECOND: to the holders of Senior Indebtedness of the Company or the Guarantors, as the case may be, to the extent required by Article 10 or Article 11 hereof, as applicable; THIRD: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and Liquidated Damages, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Liquidated Damages, if any, and interest, respectively; and FOURTH: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes (including Additional Notes, if any) . ARTICLE VII TRUSTEE 7.1 Duties Of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph (c) does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 7.2 RIGHTS OF TRUSTEE. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice and during normal business hours, to examine the books, records and premises of the Company, personally or by agent or attorney so long as such examination does not interfere with the Company's business. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that in the reasonable discretion of the Trustee, might be incurred by it in compliance with such request or direction. 7.3 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company, the Guarantors or any Affiliate of the Company or the Guarantors with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. 7.4 TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. 7.5 NOTICE OF DEFAULTS. If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium and Liquidated Damages, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. 7.6 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES. Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA
313(a) (but if no event described in TIA
313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA
313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA
313(c). A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA
313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange. 7.7 COMPENSATION AND INDEMNITY. The Company and the Guarantors shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company and the Guarantors shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company and the Guarantors shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, any Guarantor or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company and the Guarantors of their obligations hereunder. The Company and the Guarantors shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company and the Guarantors shall pay the reasonable fees and expenses of such counsel. The Company and the Guarantors need not pay for any settlement made without their consent, which consent shall not be unreasonably withheld. The obligations of the Company and the Guarantors under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. To secure the Company's and the Guarantors' payment obligations in this Section, the Trustee shall have, and the Company does hereby grant, assign and convey to the Trustee, to the benefit of the Holders, a security interest in and a Lien on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. The Trustee's right to receive payment of any amounts due under this Section 7.07 shall not be subordinate to any other liability or indebtedness of the Company (even though the Notes may be subordinated) and the payments of principal and interest on the Notes shall be subordinate to the Trustee's right to receive such payment. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. The Trustee shall comply with the provisions of TIA
313(b)(2) to the extent applicable. 7.8 REPLACEMENT OF TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10 hereof; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a Custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, any Guarantor, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes (including Additional Notes, if any) may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, PROVIDED all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's and the Guarantors' obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. 7.10 ELIGIBILITY; DISQUALIFICATION. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA paragraphs 310(a)(1), (2) and (5). The Trustee is subject to TIA paragraph 310(b). 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee is subject to TIA paragraph 311(a), excluding any creditor relationship listed in TIA paragraph 311(b). A Trustee who has resigned or been removed shall be subject to TIA paragraph 311(a) to the extent indicated therein. ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE 8.1 Option To Effect Legal Defeasance Or Covenant Defeasance. The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate delivered to the Trustee, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article Eight. 8.2 LEGAL DEFEASANCE AND DISCHARGE. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes and Note Guarantees on the date the conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that the Company and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes and the Note Guarantees, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium and Liquidated Damages, if any, and interest on such Notes when such payments are due, (b) the Company's and the Guarantors' obligations with respect to such Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's and the Guarantors' obligations in connection therewith and (d) this Article Eight. Subject to compliance with this Article Eight, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. 8.3 COVENANT DEFEASANCE. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15 and 4.16 hereof with respect to the outstanding Notes on and after the date the conditions set forth below are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes and the Note Guarantees shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(e) through 6.01(f) and Section 6.01(h) and 6.01(i) hereof shall not constitute Events of Default. 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: In order to exercise either Legal Defeasance or Covenant Defeasance: (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, non- callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium and Liquidated Damages, if any, and interest on the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, of such principal or installment of principal of, premium and Liquidated Damages, if any, or interest on the outstanding Notes; (b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the Issuance Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article Eight concurrently with such incurrence) or insofar as Sections 6.0 1(h) or 6.01(i) hereof is concerned, at any time in the period ending on the day on which all applicable preference periods have run; (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (f) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that after the day on which all applicable preference periods have run, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (g) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over the other creditors of the Company or the Guarantors or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or the Guarantors; and (h) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Liquidated Damages, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. The Company and the Guarantors shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article Eight to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. 8.6 REPAYMENT TO COMPANY. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium or Liquidated Damages, if any, or interest, if any, on any Note and remaining unclaimed for two years after such principal, premium or Liquidated Damages, if any, or interest, if any, have become due and payable shall be paid to the Company on its written request accompanied by an Officers' Certificate or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. 8.7 REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's and the Guarantors' obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; PROVIDED, HOWEVER, that, if the Company and the Guarantors make any payment of principal of, premium or Liquidated Damages, if any, or interest, if any, on any Note following the reinstatement of its obligations, the Company and the Guarantors shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER 9.1 Without Consent Of Holders Of Notes. Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes without the consent of any Holder of a Note: (a) to cure any ambiguity, defect or inconsistency; (b) to provide for uncertificated Notes in addition to or in place of certificated Notes; (c) to provide for the assumption of the Company's or any Guarantor's obligations to Holders of the Notes in the case of a merger or consolidation pursuant to Article Five or Article 10 hereof, as the case may be; (d) to make any change that would provide any additional rights or benefits to the Holders of the Notes (including providing for additional Note Guarantees pursuant to Section 4.13 hereof) or that does not adversely affect the legal rights hereunder of any Holder of the Notes; (e) to provide for the issuance of Additional Notes in accordance with the provisions set forth herein; or (f) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. 9.2 WITH CONSENT OF HOLDERS OF NOTES. Except as provided below in this Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes, if any) then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes may be waived with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in connection with a tender offer or exchange offer for the Notes). Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company and the Guarantors in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes (including Additional Notes, if any) then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder): (a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; (b) reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption of the Notes; (c) reduce the rate of or change the time for payment of interest, including default interest, on any Note; (d) waive a Default or Event of Default in the payment of principal of or premium or Liquidated Damages, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including Additional Notes, if any) and a waiver of the payment default that resulted from such acceleration); (e) make any Note payable in money other than that stated in the Notes; (f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of or premium or Liquidated Damages, if any, or interest on the Notes; (g) waive a redemption payment with respect to any Note; (h) make any change to the subordination provisions of Article 10 or Article 11 hereof that adversely affects Holders; (i) except pursuant to Article 8 and Article 10 hereof, release any Guarantor from its obligations under its Note Guarantee, or change any Note Guarantee in any manner that would adversely affect Holders; or (j) make any change in Section 6.04 or 6.07 hereof or in the foregoing amendment and waiver provisions. 9.3 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or a supplemental Indenture that complies with the TIA as then in effect. 9.4 REVOCATION AND EFFECT OF CONSENTS. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. 9.5 NOTATION ON OR EXCHANGE OF NOTES. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall authenticate new Notes (accompanied by a notation of the Note Guarantee duly endorsed by the Guarantors) that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company and the Guarantors may not sign an amendment or supplemental Indenture until the Board of Directors of the Company approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. ARTICLE X NOTE GUARANTEES 10.1 Note Guarantee. The Guarantors and each Subsidiary of the Company which in accordance with Section 4.13 hereof is required to guarantee the obligations of the Company under the Notes upon execution of a counterpart of this Indenture, hereby jointly and severally unconditionally guarantees (each such guarantee, a "NOTE GUARANTEE") to each Holder of a Note authenticated and delivered by the Trustee irrespective of the validity or enforceability of this Indenture, the Notes or the obligations of the Company under this Indenture or the Notes, that: (i) the principal of, interest and Liquidated Damages, if any, 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 this Indenture or the Notes will be promptly paid in full or performed, all in accordance with the terms of this 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, they will be paid in full when due or performed in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed for whatever reason, each Guarantor will be obligated to pay the same whether or not such failure to pay has become an Event of Default which could cause acceleration pursuant to Section 6.02 hereof. Each Guarantor agrees that this is a guarantee of payment not a guarantee of collection. Each Guarantor hereby agrees that its obligations with regard to this Note Guarantee shall be joint and several, unconditional, irrespective of the validity or enforceability of the Notes or the obligations of the Company under this Indenture, the absence of any action to enforce the same, the recovery of any judgment against the Company or any other obligor with respect to this Indenture, the Notes or the obligations of the Company under this Indenture or the Notes, any action to enforce the same or any other circumstances (other than complete performance) which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor further, to the extent permitted by law, waives and relinquishes all claims, rights and remedies accorded by applicable law to guarantors and agrees not to assert or take advantage of any such claims, rights or remedies, including but not limited to: (a) any right to require the Trustee, the Holders or the Company (each, a "BENEFITED PARTY") to proceed against the Company or any other Person or to proceed against or exhaust any security held by a Benefited Party at any time or to pursue any other remedy in any Benefited Party's power before proceeding against such Guarantor; (b) the defense of the statute of limitations in any action hereunder or in any action for the collection of any Indebtedness or the performance of any obligation hereby guaranteed; (c) any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other Person or the failure of a Benefited Party to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other Person; (d) demand, protest and notice of any kind including but not limited to notice of the existence, creation or incurring of any new or additional Indebtedness or obligation or of any action or non-action on the part of such Guarantor, the Company, any Benefited Party, any creditor of such Guarantor, the Company or on the part of any other Person whomsoever in connection with any Indebtedness or obligations hereby guaranteed; (e) any defense based upon an election of remedies by a Benefited Party, including but not limited to an election to proceed against such Guarantor for reimbursement; (f) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (g) any defense arising because of a Benefited Party's election, in any proceeding instituted under the Federal Bankruptcy Code, of the application of Section 111l(b)(2) of the Federal Bankruptcy Code; or (h) any defense based on any borrowing or grant of a security interest under Section 364 of the Federal Bankruptcy Code. Each Guarantor hereby covenants that its Note Guarantee will not be discharged except by complete performance of the obligations contained in its Note Guarantee and this Indenture. If any Holder or the Trustee is required by any court or otherwise to return to either the Company or any Guarantor, or any Custodian, trustee, or similar official acting in relation to either the Company or such Guarantor, any amount paid by the Company or such Guarantor to the Trustee or such Holder, the applicable Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between such Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the obligations guaranteed hereby may be accelerated as provided in Section 6.02 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration as to the Company or any other obligor on the Notes of the obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of those obligations as provided in Section 6.02 hereof, those obligations (whether or not due and payable) will forthwith become due and payable by such Guarantor for the purpose of this Note Guarantee. 10.2 SUBORDINATION. Each Guarantor, the Trustee, and each Holder by accepting a Note agrees, that the obligations of such Guarantor hereunder shall be subordinated in right of payment to the prior payment in full of all Obligations of every type whatsoever, contingent or otherwise due in respect of Senior Indebtedness of such Guarantor and of the Company (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed). The subordination provisions of this Article 10 are made for the benefit of the holders of all Senior Indebtedness (whether outstanding on the date hereof or issued hereafter) of each Guarantor, such holders of Senior Indebtedness of each Guarantor are made obligees under this Article 10 and such holders of Senior Indebtedness of each Guarantor or any of them may enforce the provisions of this Article 10. Holders of Senior Indebtedness of each Guarantor are third party beneficiaries of this Article 10 and no amendment thereof shall be effected without the prior written consent of the holders of a majority of the outstanding principal amount of Senior Indebtedness of each Guarantor. 10.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution to creditors of any Guarantor in a liquidation or dissolution of such Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to such Guarantor or its property, in an assignment for the benefit of creditors or any marshaling of such Guarantor's assets and liabilities: (1) holders of Senior Indebtedness of such Guarantor shall be entitled to receive payment in full of all Obligations due in respect of such Senior Indebtedness of such Guarantor (including interest after the commencement of any such proceeding at the rate specified in the applicable Senior Indebtedness of such Guarantor, whether or not such interest was an allowed claim) before the Trustee or any Holder shall be entitled to receive any payment from the Guarantor under or pursuant to this Note Guarantee with respect to the Notes; and (2) until all Obligations with respect to Senior Indebtedness of such Guarantor (as provided in subsection (1) above) are paid in full, any distribution to which the Trustee or any Holder would be entitled but for this Article shall be made to holders of Senior Indebtedness of such Guarantor (except that Holders may receive securities that are subordinated in right and priority of payment to at least the same extent as the Note Guarantee to (a) Senior Indebtedness of such Guarantor and (b) any securities issued in exchange for Senior Indebtedness of such Guarantor). 10.4 DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS OF THE GUARANTOR. No Guarantor shall make any payment or distribution to the Trustee or any Holder upon or in respect of its Note Guarantee or the Notes, or any Obligation with respect thereto, and no Guarantor shall acquire from the Trustee or any Holder any Notes for cash or property (other than securities that are subordinated in right and priority of payment to at least the same extent as its Note Guarantee to (a) Senior Indebtedness of such Guarantor and (b) any securities issued in exchange for Senior Indebtedness of such Guarantor) until all principal and other Obligations with respect to the Senior Indebtedness of such Guarantor have been paid in full if: (i) a default in the payment when due, whether upon acceleration or otherwise, of the principal, premium, if any, or interest on any Senior Indebtedness of such Guarantor occurs and is continuing beyond any applicable grace period; or (ii) any other default on Designated Senior Indebtedness of such Guarantor occurs and is continuing and the Trustee receives a notice of the default from such Guarantor, or the holders of any such Designated Senior Indebtedness of such Guarantor, stating that such Guarantor or holders are invoking a payment blockage under this Section 10.04(ii) (a "GUARANTOR PAYMENT BLOCKAGE NOTICE"). If the Trustee receives any such notice, a subsequent notice received within 365 days thereafter shall not be effective for purposes of this Section. Each Guarantor may and shall resume payments on and distributions in respect of its Note Guarantee, the Notes and all Obligations with respect thereto, and may acquire such Notes, Obligations for value when: (1) in the case of a payment default as described in (i) above, upon the date on which such default is cured or waived, and (2) in the case of a nonpayment default as described in (ii) above, on the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which a Guarantor Payment Blockage Notice is received if the maturity of such Designated Senior Indebtedness of such Guarantor has not been accelerated, and this Article otherwise permits the payment at the time of such payment. 10.5 ACCELERATION OF NOTES. If payment of the Notes is accelerated because of an Event of Default, each Guarantor shall promptly notify each Representative of holders of Senior Indebtedness of such Guarantor of the acceleration. 10.6 WHEN DISTRIBUTION MUST BE PAID OVER. In the event that the Trustee or any Holder receives from a Guarantor any payment of any Obligations with respect to the Notes or any other Obligation guaranteed hereby at a time when the Trustee or such Holder has actual knowledge that such payment is prohibited by Section 10.03 or Section 10.04 hereof, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Indebtedness of such Guarantor as their interests may appear, or their Representative under the indenture or other agreement (if any) pursuant to which Senior Indebtedness of such Guarantor may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Indebtedness of such Guarantor remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of such Guarantor. If a distribution is made to the Trustee or any Holder that because of this Article 10 should not have been made to it at a time when the Trustee or such Holder has actual knowledge that such distribution should not have been made to it, the Trustee or such Holder who receives the distribution shall hold it in trust for the benefit of, and, upon written request, pay it over to, the holders of Senior Indebtedness of such Guarantor as their interests may appear, or their Representative under the indenture or other agreement (if any) pursuant to which Senior Indebtedness of such Guarantor may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Indebtedness of such Guarantor remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of such Guarantor. With respect to any Guarantor, with respect to the holders of Senior Indebtedness of such Guarantor, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article 10, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of such Guarantor shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of such Guarantor, and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Holders or the Company or any other Person money or assets to which any holders of Senior Indebtedness of such Guarantor shall be entitled by virtue of this Article 10, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee. 10.7 NOTICE BY A GUARANTOR. Each Guarantor shall promptly notify the Trustee and the Paying Agent of any facts known to such Guarantor that would cause a payment of any Obligations with respect to the Notes or its Note Guarantee to violate this Article, but failure to give such notice shall not affect the subordination of its Note Guarantee or of the Notes to the Senior Indebtedness of such Guarantor as provided in this Article. 10.8 SUBROGATION. With respect to any Guarantor, after all Senior Indebtedness of such Guarantor is paid in full and until the Notes are paid in full, Holders shall, without duplication, be subrogated to the rights of holders of Senior Indebtedness of such Guarantor to receive distributions applicable to Senior Indebtedness of such Guarantor to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Indebtedness of such Guarantor. A distribution made under this Article to holders of Senior Indebtedness of such Guarantor that otherwise would have been made to Holders is not, as between such Guarantor and Holders, a payment by the Company on the Senior Indebtedness of such Guarantor. 10.9 RELATIVE RIGHTS. This Article defines the relative rights of Holders and holders of Senior Indebtedness of such Guarantor. Nothing in this Indenture shall: (1) impair, as between such Guarantor and the Holders, the obligation of such Guarantor, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms; (2) affect the relative rights of Holders and creditors of such Guarantor other than their rights in relation to holders of Senior Indebtedness of such Guarantor; or (3) prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness of such Guarantor set forth herein to receive distributions and payments otherwise payable to Holders. 10.10 SUBORDINATION MAY NOT BE IMPAIRED BY ANY GUARANTOR. With respect to any Guarantor, no right of any holder of Senior Indebtedness of such Guarantor to enforce the subordination of the Note Guarantee shall be impaired by any act or failure to act by such Guarantor or any Holder or by failure of such Guarantor or any Holder to comply with this Indenture. 10.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE. With respect to any Guarantor, whenever a distribution is to be made or a notice given to holders of Senior Indebtedness of such Guarantor, the distribution may be made and the notice given to their Representative. Upon any payment or distribution of assets referred to in this Article 10, the Trustee and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness of such Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. 10.12 RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding the provisions of this Article 10 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee shall have received at its Corporate Trust Office at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Note Guarantee to violate this Article. Only a Guarantor, the holder of any Senior Indebtedness of such Guarantor, or the Representative of holders of Senior Indebtedness of such Guarantor may give the notice. Nothing in this Article 10 shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. With respect to any Guarantor, the Trustee in its individual or any other capacity may hold Senior Indebtedness of such Guarantor with the same rights it would have if it were not Trustee. 10.13 AUTHORIZATION TO EFFECT SUBORDINATION. Each Holder of a Note by the Holder's acceptance thereof authorizes and directs the Trustee on the Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 10, and appoints the Trustee the Holder's attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding relative to any Guarantor referred to in Section 6.09 hereof at least 30 days before the expiration of the time to file such claim, the holders (or their Representative) of Senior Indebtedness of each Guarantor are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes. 10.14 LIMITATION OF GUARANTOR'S LIABILITY. Each Guarantor and by its acceptance hereof, each beneficiary hereof, hereby confirms that it is its intention that the Note Guarantee by such Guarantor not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, each such Person hereby irrevocably agrees that the obligation of such Guarantor under its Note Guarantee under this Article 10 shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent conveyance. Each beneficiary under the Note Guarantees, by accepting the benefits hereof, confirms its intention that, in the event of a bankruptcy, reorganization or other similar proceeding of the Company or any Guarantor in which concurrent claims are made upon such Guarantor hereunder, to the extent such claims will not be fully satisfied, each such claimant with a valid claim against the Company shall be entitled to a ratable share of all payments by such Guarantor in respect of such concurrent claims. 10.15 EXECUTION AND DELIVERY OF NOTE GUARANTEE. To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that this Indenture shall be executed on behalf of each Guarantor by its President or one of its Vice Presidents and that the notation on each Note relating to the Note Guarantee shall be executed on behalf of each Guarantor by an Officer. 10.16 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. (a) No Guarantor shall consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person whether or not it is affiliated with such Guarantor unless (i) subject to the provisions of the following paragraph and Section 10.17 hereof, the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) assumes all the obligations of such Guarantor pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee, under its Note Guarantee and this Indenture, (ii) immediately after giving effect to such transaction, no Default or Event of Default exists, and (iii) in the case of any Guarantor other than Holding, such Guarantor, or any Person formed by or surviving any such consolidation or merger, (A) shall have Consolidated Net Worth (immediately after giving effect to such transaction), equal to or greater than the Consolidated Net Worth of such Guarantor immediately preceding the transaction and (B) will be permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio to incur, immediately after giving effect to such transaction, at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09 hereof. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee in this Indenture and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor corporation shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Notwithstanding the foregoing, (A) a Guarantor may consolidate with or merge with or into the Company, PROVIDED, that the surviving corporation (if other than the Company) shall expressly assume by supplemental indenture complying with the requirements of this Indenture, the due and punctual payment of the principal of, premium, if any, and interest on all of the Notes, and the due and punctual performance and observance of all the covenants and conditions of this Indenture to be performed by the Company and (B) a Guarantor may consolidate with or merge with or into any other Guarantor. 10.17 RELEASES FOLLOWING SALE OF ASSETS. Upon a sale or other disposition of all or substantially all of the assets of any Guarantor (other than Holding), by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Capital Stock of any Guarantor, then such Guarantor (in the event of a sale or other disposition, by way of such a merger, consolidation or otherwise, of all of the Capital Stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) shall be released and relieved of its obligations under its Note Guarantee; PROVIDED that the Net Proceeds of such sale or other disposition are applied in accordance with Section 4.10 hereof. ARTICLE XI SUBORDINATION 11.1 Subordination. The Company agrees, and each Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes shall be subordinated in right of payment to the prior payment in full of all Obligations of every type whatsoever, contingent or otherwise due in respect of Senior Indebtedness of the Company (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed). The subordination provisions of this Article 11 are made for the benefit of the holders of all Senior Indebtedness (whether outstanding on the date hereof or issued hereafter) of the Company, such holders of Senior Indebtedness of the Company are made obligees under this Article 11 and such holders of Senior Indebtedness of the Company or any of them may enforce the provisions of this Article 11. Holders of Senior Indebtedness of the Company are third party beneficiaries of this Article 11 and no amendment hereof shall be effected without the prior written consent of the holders of a majority of the outstanding principal amount of Senior Indebtedness of the Company. 11.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property, an assignment for the benefit of creditors or any marshalling of the Company's assets and liabilities: (1) holders of Senior Indebtedness of the Company shall be entitled to receive payment in full of all Obligations due in respect of such Senior Indebtedness of the Company (including interest after the commencement of any such proceeding at the rate specified in the applicable Senior Indebtedness of the Company, whether or not such interest is an allowed claim) before the Holders shall be entitled to receive any payment with respect to the Notes; and (2) until all Obligations with respect to Senior Indebtedness of the Company (as provided in subsection (1) above) are paid in full, any distribution to which Holders would be entitled but for this Article shall be made to holders of Senior Indebtedness of the Company (except that Holders may receive securities that are subordinated in right and priority of payment to at least the same extent as the Notes to (a) Senior Indebtedness of the Company and (b) any securities issued in exchange for any such Senior Indebtedness of the Company). 11.3 DEFAULT ON SENIOR INDEBTEDNESS. The Company may not make any payment or distribution to the Trustee or any Holder upon or in respect of the Notes, or any Obligation with respect thereto, and may not acquire from the Trustee or any Holder any Notes for cash or property (other than securities that are subordinated in right and priority of payment to at least the same extent as the Notes to (a) Senior Indebtedness of the Company and (b) any securities issued in exchange for Senior Indebtedness of the Company) until all principal and other Obligations with respect to the Senior Indebtedness of the Company have been paid in full if: (i) a default in the payment when due, whether upon acceleration or otherwise, of the principal of, premium, if any, or interest on any Senior Indebtedness of the Company occurs and is continuing beyond any applicable grace period; or (ii) any other default on Designated Senior Indebtedness of the Company occurs and is continuing and the Trustee receives a notice of such default from the Company, or from, or on behalf of, the holders of any such Designated Senior Indebtedness of the Company, stating that it is or such holders are invoking a payment blockage under this Section 11.03(ii) (a "PAYMENT BLOCKAGE NOTICE"). If the Trustee receives any such notice, a subsequent notice received within 365 days thereafter shall not be effective for purposes of this Section. The Company may and shall resume payments on and distributions in respect of the Notes, and all Obligations with respect thereto, and may acquire them when: (1) in the case of a payment default as described in (i) above, upon the date on which such default is cured or waived, and (2) in the case of a nonpayment default as described in (ii) above, on the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any such Designated Senior Indebtedness of the Company has been accelerated, and this Article otherwise permits the payment at the time of such payment. 11.4 ACCELERATION OF NOTES. If payment of the Notes is accelerated because of an Event of Default, the Company shall promptly notify each Representative of holders of Senior Indebtedness of the Company of the acceleration. 11.5 WHEN DISTRIBUTION MUST BE PAID OVER. In the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Notes at a time when the Trustee or such Holder has actual knowledge that such payment is prohibited by Section 11.02 or Section 11.03 hereof, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Indebtedness of the Company as their interests may appear, or their Representatives under the indenture or other agreement (if any) pursuant to which Senior Indebtedness of the Company may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Indebtedness of the Company remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of the Company. If a distribution is made to the Trustee or any Holder that because of this Article 11 should not have been made to it at a time when the Trustee or such Holder has actual knowledge that such distribution should not have been made to it, the Trustee or such Holder who receives the distribution shall hold it in trust for the benefit of, and, upon written request, pay it over to, the holders of Senior Indebtedness of the Company as their interests may appear, or their Representative under the indenture or other agreement (if any) pursuant to which Senior Indebtedness of the Company may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Indebtedness of the Company remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of the Company. With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article 11 and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the Company shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Company and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Holders or the Company or any other Person money or assets to which any holders of Senior Indebtedness of the Company shall be entitled by virtue of this Article 11, except if such payment is made as a result of negligent action, its own negligent failure to act or its own willful conduct or gross negligence of the Trustee. 11.6 NOTICE BY COMPANY. The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Notes to violate this Article, but failure to give such notice shall not affect the subordination of the Notes to the Senior Indebtedness of the Company as provided in this Article. 11.7 SUBROGATION. After all Senior Indebtedness of the Company is paid in full and until the Notes are paid in full, Holders shall, without duplication, be subrogated to the rights of holders of Senior Indebtedness of the Company to receive distributions applicable to Senior Indebtedness of the Company to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Indebtedness of the Company. A distribution made under this Article to holders of Senior Indebtedness of the Company that otherwise would have been made to Holders is not, as between the Company and Holders, a payment by the Company on Senior Indebtedness of the Company. 11.8 RELATIVE RIGHTS. This Article defines the relative rights of Holders and holders of Senior Indebtedness of the Company. Nothing in this Indenture shall: (1) impair, as between the Company and the Holders, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms; (2) affect the relative rights of Holders and creditors of the Company other than their rights in relation to holders of Senior Indebtedness of the Company; or (3) prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness of the Company set forth herein to receive distributions and payments otherwise payable to Holders. If the Company fails because of this Article to pay principal of or interest on a Note on the due date, the failure is still a Default or Event of Default. 11.9 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right of any holder of Senior Indebtedness of the Company to enforce the subordination of the Indebtedness with respect to the Notes shall be impaired by any act or failure to act by the Company or any Holder or by failure of the Company or any Holder to comply with this Indenture. 11.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness of the Company, the distribution may be made and the notice given to their Representative. Upon any payment or distribution of assets referred to in this Article 11, the Trustee and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 11. 11.11 RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding the provisions of this Article 11 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee shall have received at its Corporate Trust Office at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this Article. Only the Company, the holder of any Senior Indebtedness of the Company, or any Representative of holders of Senior Indebtedness of the Company may give the notice. Nothing in this Article 11 shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. The Trustee in its individual or any other capacity may hold Senior Indebtedness of the Company with the same rights it would have if it were not Trustee. 11.12 AUTHORIZATION TO EFFECT SUBORDINATION. Each Holder of a Note by the Holder's acceptance thereof authorizes and directs the Trustee on the Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 11, and appoints the Trustee the Holder's attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 hereof at least 30 days before the expiration of the time to file such claim, the holders (or their Representative) of Senior Indebtedness of the Company are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes. ARTICLE XII MISCELLANEOUS 12.1 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA
318(c), the imposed duties shall control. 12.2 NOTICES. Any notice or communication by the Company, the Guarantors or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Company or any Guarantor: Berry Plastics Corporation 101 Oakley Street Evansville, Indiana 47710 Telecopier No.: (812) 421-9604 Attention: Martin R. Imbler With a copy to: O'Sullivan Graev & Karabell, LLP 30 Rockefeller Plaza New York, New York 10112 Telecopier No.: (212) 408-2420 Attention: Michael Joseph O'Brien, Esq. If to the Trustee: United States Trust Company of New York 114 West 47th Street New York, New York 10036-1532 Telecopier No.: (212) 852-1625 Attention: Corporate Trust Administration The Company, the Guarantors or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA
313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company or any Guarantor mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. 12.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES. Holders may communicate pursuant to TIA
312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA
312(c). 12.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company or the Guarantors to the Trustee to take any action under this Indenture, the Company or the Guarantors shall furnish to the Trustee: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 12.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA paragraph 314(a)(4)) shall comply with the provisions of TIA paragraph 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. 12.6 RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. 12.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Note Guarantees, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note and the Note Guarantees waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees. 12.8 GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES. 12.9 CONSENT TO JURISDICTION To the fullest extent permitted by applicable law, each of the parties hereto hereby irrevocably submits to the jurisdiction of any New York State court or Federal court sitting in the borough of Manhattan in New York City in respect of any suit, action or proceeding arising out of or relating to the provisions of this Indenture and irrevocably agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court. Each of the parties hereto waive, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 12.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. 12.11 SUCCESSORS. All agreements of the Company and the Guarantors in this Indenture and the Notes and the Note Guarantees, as the case may be, shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors. 12.12 SEVERABILITY. In case any provision in this Indenture, or in the Notes or in the Note Guarantees shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 12.13 COUNTERPART ORIGINALS. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 12.14 TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents. Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. [Signatures on following page] 1 SIGNATURES Dated as of August 24, 1994 BERRY PLASTICS CORPORATION By:______________________________________ Name: Title: BPC HOLDING CORPORATION By:______________________________________ Name: Title: BERRY IOWA CORPORATION By:______________________________________ Name: Title: BERRY STERLING CORPORATION By:______________________________________ Name: Title: BERRY TRI-PLAS CORPORATION By:______________________________________ Name: Title: AEROCON, INC. By:______________________________________ Name: Title: PACKERWARE CORPORATION By:______________________________________ Name: Title: BERRY PLASTICS DESIGN CORPORATION By:______________________________________ Name: Title: VENTURE PACKAGING, INC. By:______________________________________ Name: Title: VENTURE PACKAGING MIDWEST, INC. By:_______________________________________ Name: Title: VENTURE PACKAGING SOUTHEAST, INC. By:_______________________________________ Name: Title: NIM HOLDINGS LIMITED By:_______________________________________ Name: Title: NORWICH INJECTION MOULDERS LIMITED By:_______________________________________ Name: Title: UNITED STATES TRUST COMPANY OF NEW YORK Trustee By:_____________________________ Name: Title: Dated as of August 24, 1998 B-1 EXHIBIT A (Face of Note) CUSIP 085790AC7 12 1/4 % Series B Senior Subordinated Notes due 2004 No.1 $25,000,000 BERRY PLASTICS CORPORATION promises to pay to CEDE & CO. or registered assigns, the principal sum of Twenty-Five Million Dollars ($25,000,000) on April 15, 2004. Interest Payment Dates: April 15 and October 15 Record Dates: April 1 and October 1 Dated: August 24, 1998 BERRY PLASTICS CORPORATION By:_______________________________ Name: Title: By:________________________________ Name: Title: (SEAL) This is one of the Notes referred to in the within-mentioned Indenture: UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By:____________________________ Authorized Signatory B-2 (Back of Security) 12 1/4 % SERIES B SENIOR SUBORDINATED NOTE DUE April 15, 2004 THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY AND THE GUARANTORS SO REQUEST), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. Capitalized terms used herein have the meanings assigned to them in the Indenture (as defined below) unless otherwise indicated. 1. INTEREST. Berry Plastics Corporation, a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at the rate and in the manner specified below. The Company shall pay in cash interest on the principal amount of this Note at the rate per annum of 12 1/4 % from August 24, 1998 until maturity and shall pay the Liquidated Damages payable pursuant to Section 5 of the Registration Rights Agreements referred to below. The Company will pay interest and Liquidated Damages semi-annually on October 15 and April 15 of each year, or if any such day is not a Business Day (as defined in the Indenture), on the next succeeding Business Day (each an "Interest Payment Date"). The first Interest Payment Date shall be October 15, 1998. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of the original issuance of the Notes. To the extent lawful, the Company shall pay interest on overdue principal at the rate of 1% per annum in excess of the then applicable interest rate on the Notes; it shall pay interest on overdue installments of interest (without regard to any applicable grace periods) at the same rate to the extent lawful. 2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) and Liquidated Damages to the Persons who are registered Holders of Notes at the close of business on the record date next preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date. The Company will pay principal, interest and Liquidated Damages in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company, however, may pay principal, premium, if any, interest and Liquidated Damages by check payable in such money. It may mail an interest check to a Holder's registered address. 3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-registrar without notice to any Holder. The Company or any Guarantor (as defined below) may act in any such capacity. 4. INDENTURE. The Company issued the Notes under an Indenture dated as of August 24, 1998 (the "Indenture") among the Company, the guarantors named therein (the "Guarantors") and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
77aaa-77bbbb) as in effect on the date of the Indenture. The Notes are subject to all such terms, and Holders of the Notes are referred to the Indenture and such Act for a statement of such terms. The terms of the Indenture shall govern any inconsistencies between the Indenture and the Notes. The Notes are unsecured general obligations of the Company limited to $100,000,000 in aggregate principal amount. 5. OPTIONAL REDEMPTION. On or after April 15, 1999, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount) set forth below, plus accrued and unpaid interest thereon, to the applicable redemption date, if redeemed during the 12 month period beginning on April 15 of the years indicated below: YEAR PERCENTAGE 1999 106.125% 2000 104.083% 2001 102.042% 2002 and thereafter 100.000% 1. MANDATORY REDEMPTION. The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 2. REDEMPTION OR REPURCHASE AT OPTION OF HOLDER. () If there is a Change of Control, the Company shall be required to offer to purchase all Notes at 101% of the aggregate principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase. Holders of Notes that are subject to an offer to purchase will receive an offer to purchase from the Company prior to any related purchase date, and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" appearing below. (b) When the aggregate amount of Excess Proceeds from Asset Sales exceeds $5 million, upon completion of the Asset Sale Offer required under the 1994 Indenture, the Company shall be required to offer to purchase the maximum principal amount of Notes (including any Additional Notes) that may be purchased out of the Excess Proceeds if any, remaining upon completion of the Asset Sale Offer required under the 1994 Indenture at 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer. If the aggregate principal amount of Notes tendered by Holders thereof exceeds the amount of Excess Proceeds, the Notes to be redeemed shall be selected pursuant to the terms of Section 3.02 of the Indenture (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased). To the extent that the aggregate amount of Notes (including any Additional Notes) tendered by Holders thereof is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. Holders of Notes which are the subject of an offer to purchase will receive an offer to purchase from the Company prior to any related purchase date, and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" appearing below. 3. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notes may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption. 4. SUBORDINATION. The Notes are subordinated to Senior Indebtedness of the Company (whether outstanding on the date of the Indenture or thereafter created, incurred, assumed or guaranteed) and all Obligations with respect thereto. To the extent provided in the Indenture, Senior Indebtedness of the Company must be paid before the Notes may be paid. The Company agrees, and each Holder by accepting a Note agrees, to the subordination and authorizes the Trustee to give it effect. 5. NOTE GUARANTEES. Payment of principal of, premium, if any, and interest (including interest on overdue principal, premium, if any, and interest, if lawful) on the Notes is unconditionally guaranteed by the Guarantors, on a senior subordinated basis, pursuant to Article 10 of the Indenture. 6. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Note or portion of a Note selected for redemption. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed, during the period between a record date and the corresponding Interest Payment Date. 7. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee for registration of the transfer of this Note, the Trustee, any Agent, the Company and the Guarantors may deem and treat the Person in whose name this Note is registered as its absolute owner for the purpose of receiving payment of principal of and interest on this Note and for all other purposes whatsoever, whether or not this Note is overdue, and neither the Trustee, any Agent, the Company nor any Guarantor shall be affected by notice to the contrary. The registered holder of a Note shall be treated as its owner for all purposes. 8. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or the Notes may be amended with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) (including consents obtained in connection with a tender offer or exchange offer for Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) (including consents obtained in connection with a tender offer or exchange offer for Notes). Without the consent of any Holder, the Indenture or the Notes may be amended to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for assumption of the Company's or any Guarantor's obligations to Holders in the case of a merger or consolidation or to make any change that would provide any additional rights or benefits to the Holders (including providing for additional Note Guarantees pursuant to Section 4.13 of the Indenture) or that does not adversely affect the rights of any Holder under the Indenture, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture or to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA. 9. DEFAULTS AND REMEDIES. Events of Default include: default by the Company or the Guarantors in the payment when due of interest or Liquidated Damages, if any, on the Notes (whether or not prohibited by the subordination provisions of Article 10 or Article 11 of the Indenture, as the case may be) and such default continues for a period of 30 days; default by the Company or the Guarantors in the payment when due of principal of or premium, if any, on the Notes (whether or not prohibited by the subordination provisions of Article 10 or Article 11 of the Indenture, as the case may be) when the same becomes due and payable at maturity, upon redemption (including in connection with an offer to purchase or otherwise); failure by the Company to comply with Sections 4.07, 4.09, 4.10 or 4.15 of the Indenture; failure by the Company or the Guarantors to observe or perform any other covenant, representation, warranty or other agreement in the Notes for 60 days after the notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes (including Additional Notes, if any) then outstanding; default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company, Holding or any of their respective Subsidiaries (or the payment of which is guaranteed by the Company, Holding or any of their respective Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the Issuance Date, which default (a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $2 million or more; a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company, Holding or any of their respective Subsidiaries and such judgment or judgments remain unpaid or undischarged for a period (during which execution shall not be effectively stayed) of 60 days, PROVIDED that the aggregate of all such undischarged judgments exceeds $2 million; except as permitted by the Indenture, any Note Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor (or its successors or assigns), or any Person acting on behalf of such Guarantor (or its successors or assigns), shall deny or disaffirm its obligations or shall fail to comply with any obligations under its Note Guarantee; and certain events of bankruptcy or insolvency with respect to the Company, any Guarantor or any of their respective Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes (including Additional Notes, if any) may declare all the Notes to be due and payable immediately; except, that if any Indebtedness is outstanding pursuant to the Credit Facility, upon a declaration of acceleration, the principal and interest on the Notes shall be payable upon the earlier of (1) the day which is five business days after notice of acceleration is given to the Company and the lender under the Credit Facility or (2) the date of acceleration of the Indebtedness under the Credit Facility and except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company or any of its Subsidiaries, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Company must furnish an annual compliance certificate to the Trustee. 10. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company, the Guarantors or their respective Affiliates, and may otherwise deal with the Company the Guarantors or their respective Affiliates, as if it were not Trustee. 11. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Note Guarantees, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note and the Note Guarantees waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes and the Note Guarantees. 12. AUTHENTICATION. Neither this Note nor any Note Guarantee shall be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 13. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 14. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE NOTE GUARANTEES. B-3 The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Request may be made to: Berry Plastics Corporation 101 Oakley Street P.O. Box 959 Evansville, Indiana 47710-0959 Attention: Chief Financial Officer NOTE GUARANTEE Each of the Guarantors and each Subsidiary of the Company which in accordance with Section 4.13 of the Indenture is required to guarantee the obligations of the Company under the Notes upon execution of a counterpart of this Indenture, has jointly and severally unconditionally guaranteed (i) the due and punctual payment of the principal of and interest on the Notes, whether at the maturity or interest payment or mandatory redemption date, by acceleration, call for redemption or otherwise, and of 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 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. The obligations of each Guarantor to the Holder and to the Trustee pursuant to this Note Guarantee and the Indenture are as expressly set forth in Article 10 of the Indenture, and reference is hereby made to such Indenture for the precise terms of this Note Guarantee. The terms of Article 10 of the Indenture are incorporated herein by reference. This is a continuing guarantee and shall remain in full force and effect and shall be binding upon each Guarantor 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. This Note Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Note Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. B-4 Capitalized terms used herein have the same meanings given in the Indenture unless otherwise indicated. BPC HOLDING CORPORATION By:_____________________________________ Name: Title: BERRY IOWA CORPORATION By:_____________________________________ Name: Title: BERRY STERLING CORPORATION By:_____________________________________ Name: Title: BERRY TRI-PLAS CORPORATION By:_____________________________________ Name: Title: AEROCON, INC. By:_____________________________________ Name: Title: PACKERWARE CORPORATION By:_____________________________________ Name: Title: BERRY PLASTICS DESIGN CORPORATION By:_____________________________________ Name: Title: VENTURE PACKAGING, INC. By:_____________________________________ Name: Title: VENTURE PACKAGING MIDWEST, INC. By:_____________________________________ Name: Title: VENTURE PACKAGING SOUTHEAST, INC. By:_____________________________________ Name: Title: NIM HOLDINGS LIMITED By:_____________________________________ Name: Title: NORWICH INJECTION MOULDERS LIMITED By:_____________________________________ Name: Title: B-5 Assignment Form To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to _______________________________________________________________________________ (Insert assignee's soc. sec. or tax ID. no.) _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint________________________________________________________ to transfer this Note on the books of the Company. The agent may substitute another to act for him. _______________________________________________________________________________ Date:_______________________ Your Signature:__________________________ (Sign exactly as your name appears on the face of this Note) Signature Guarantee. B-6 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 (upon the occurrence of an Asset Sale) or 4.15 (upon the occurrence of a Change of Control) of the Indenture, check the box below: _____Section 4.10 _____Section 4.15 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.15 of the Indenture, state the amount you elect to have purchased: $___________ Date:_____________________ Your Signature:_______________________________ (Sign exactly as your name appears on the Note) Tax Identification No.:____________________ Signature Guarantee. B-1 EXHIBIT B FORM OF CERTIFICATE OF TRANSFER Berry Plastics Corporation 101 Oakley Street Evansville, Indiana 47710 United States Trust Company of New York 114 West 47th Street New York, New York 10036-1532 Re: 12 1/4 Senior Subordinated Notes due 2004 Reference is hereby made to the Indenture, dated as of August 24, 1998 (the "INDENTURE"), among Berry Plastics Corporation, as issuer (the "COMPANY"), the Guarantors named therein and United States Trust Company of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. ___________________, (the "TRANSFEROR") owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $___________ in such Note[s] or interests (the "TRANSFER"), to ___________________________ (the "TRANSFEREE"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: [CHECK ALL THAT APPLY] 1. _____ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 2. _____ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 3. _____ CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): (a) _____ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or (b) _____ such Transfer is being effected to the Company or a subsidiary thereof; or (c) _____ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; or (d) _____ such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Definitive Notes and in the Indenture and the Securities Act. 4. _____ CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE. (a) _____ CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (b) _____ CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (c) _____ CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. _________________________________________ [Insert Name of Transferor] By:______________________________________ Name: Title: Dated:____________________ B-2 EXHIBIT B ANNEX A TO CERTIFICATE OF TRANSFER 1. The Transferor owns and proposes to transfer the following: [CHECK ONE OF (a) OR (b)] (a) _____ a beneficial interest in the: (i) _____ 144A Global Note (CUSIP ), or (ii) _____ Regulation S Global Note (CUSIP ), or (iii) _____ IAI Global Note (CUSIP ); or (b) _____ a Restricted Definitive Note. 2. After the Transfer the Transferee will hold: [CHECK ONE] (a) _____ a beneficial interest in the: (i) _____ 144A Global Note (CUSIP ), or (ii) _____ Regulation S Global Note (CUSIP ), or (iii) _____ IAI Global Note (CUSIP ); or (iv) _____ Unrestricted Global Note (CUSIP ); or (b) _____ a Restricted Definitive Note; or (c) _____ an Unrestricted Definitive Note, in accordance with the terms of the Indenture. B-1 EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE Berry Plastics Corporation 101 Oakley Street Evansville, Indiana 47710 United States Trust Company of New York 114 West 47th Street New York, New York 10036-1532 Re: 12 1/4 % Senior Subordinated Notes due 2004 (CUSIP ____________) Reference is hereby made to the Indenture, dated as of August 24, 1998 (the "INDENTURE"), among Berry Plastics Corporation, as issuer (the "COMPANY"), the Guarantors named therein and United States Trust Company of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. __________________________, (the "OWNER") owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $____________ in such Note[s] or interests (the "EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that: 1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE (a) _____ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (b) _____ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (c) _____ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (d) _____ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES (a) _____ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act. (b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE] _____ 144A Global Note, _____ Regulation S Global Note, _____ IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. [Insert Name of Transferor] By:_______________________________________ Name: Title: Dated:____________________ B-2 EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR Berry Plastics Corporation 101 Oakley Street Evansville, Indiana 47710 United States Trust Company of New York 114 West 47th Street New York, New York 10036-1532 Re: 12 1/4 % Senior Subordinated Notes due 2004 Reference is hereby made to the Indenture, dated as of August 24, 1998 (the "INDENTURE"), among Berry Plastics Corporation, as issuer (the "COMPANY"), the Guarantors named therein and United States Trust Company of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. In connection with our proposed purchase of $____________ aggregate principal amount of: (a) _____ a beneficial interest in a Global Note, or (b) _____ a Definitive Note, we confirm that: 1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the "SECURITIES ACT"). 2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined therein), (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. ____________________________________________ [Insert Name of Accredited Investor] By:_____________________________________ Name: Title: Dated:____________________ B-3 EXHIBIT E EXHIBIT E [FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO THE NOTE GUARANTEES] Each of the Guarantors and each Subsidiary of the Company which in accordance with Section 4.13 of the Indenture is required to guarantee the obligations of the Company under the Notes upon execution of a counterpart of this Indenture, has jointly and severally unconditionally guaranteed (i) the due and punctual payment of the principal of and interest on the Notes, whether at the maturity or interest payment or mandatory redemption date, by acceleration, call for redemption or otherwise, and of 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 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. The obligations of each Guarantor to the Holder and to the Trustee pursuant to this Note Guarantee and the Indenture are as expressly set forth in Article 10 of the Indenture, and reference is hereby made to such Indenture for the precise terms of this Note Guarantee. The terms of Article 10 of the Indenture are incorporated herein by reference. This is a continuing guarantee and shall remain in full force and effect and shall be binding upon each Guarantor 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. This Note Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Note Guarantee is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers. B-4 EX-4.10 24 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT Dated as of August 24, 1998 by and among BERRY PLASTICS CORPORATION BPC HOLDING CORPORATION BERRY IOWA CORPORATION BERRY STERLING CORPORATION BERRY TRI-PLAS CORPORATION AEROCON, INC. PACKERWARE CORPORATION BERRY PLASTICS DESIGN CORPORATION VENTURE PACKAGING, INC. VENTURE PACKAGING MIDWEST, INC. VENTURE PACKAGING SOUTHEAST, INC. NIM HOLDINGS LIMITED NORWICH INJECTION MOULDERS LIMITED and DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION This Registration Rights Agreement (this "AGREEMENT") is made and entered into as of August 24, 1998, by and among, Berry Plastics Corporation, a Delaware corporation (the "COMPANY"), BPC Holding Corporation, a Delaware corporation, Berry Iowa Corporation, a Delaware corporation, Berry Sterling Corporation, a Delaware corporation, Berry Tri-Plas Corporation, a Delaware corporation, AeroCon, Inc., a Delaware corporation, PackerWare Corporation, a Kansas corporation, Berry Plastics Design Corporation, a Delaware corporation, Venture Packaging, Inc., a Delaware corporation, Venture Packaging Midwest, Inc., an Ohio corporation, Venture Packaging Southeast, Inc., a South Carolina corporation, NIM Holdings Limited, a company organized under the laws of England and Wales, and Norwich Injection Moulders Limited, a company organized under the laws of England and Wales (collectively, the "GUARANTORS"), and Donaldson, Lufkin & Jenrette Securities Corporation (the "INITIAL PURCHASER"), who has agreed to purchase the Company's 12 1/4 % Series B Senior Subordinated Notes due 2004 (the "SERIES B NOTES") pursuant to the Purchase Agreement (as defined below). This Agreement is made pursuant to the Purchase Agreement, dated as of August 19, 1998, (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors and the Initial Purchaser. In order to induce the Initial Purchaser to purchase the Series B Notes, the Company and the Guarantors have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchaser set forth in Section 2 of the Purchase Agreement. The parties hereby agree as follows: 1.1DEFINITIONS As used in this Agreement, the following capitalized terms shall have the following meanings: ACT: The Securities Act of 1933, as amended. BUSINESS DAY: Any day except a Saturday. Sunday or other day in the City of New York, or in the city of the corporate trust office of the Trustee, on which banks are authorized to close. BROKER-DEALER: Any broker or dealer registered under the Exchange Act. BROKER-DEALER TRANSFER RESTRICTED SECURITIES: Series C Notes that are acquired by a Broker-Dealer in the Exchange Offer in exchange for Series B Notes that such Broker-Dealer acquired for its own account as a result of market making activities or other trading activities (other than Series B Notes acquired directly from the Company or any of its affiliates). CERTIFICATED SECURITIES: As defined in the Indenture. CLOSING DATE: The date hereof. COMMISSION: The Securities and Exchange Commission. CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for purposes of this Agreement upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Series C Notes to be issued in the Exchange Offer, (b) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof and (c) the delivery by the Company to the Registrar under the Indenture of Series C Notes in the same aggregate principal amount as the aggregate principal amount of Series B Notes tendered by Holders thereof pursuant to the Exchange Offer. DAMAGES PAYMENT DATE: With respect to the Series B Notes, each Interest Payment Date. EXCHANGE ACT: The Securities Exchange Act of 1934, as amended. EXCHANGE OFFER: The registration by the Company under the Act of the Series C Notes pursuant to the Exchange Offer Registration Statement pursuant to which the Company shall offer the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities for Series C Notes in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders. EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement relating to the Exchange Offer, including the related Prospectus. EXEMPT RESALES: The transactions in which the Initial Purchaser proposes to sell the Series B Notes to certain "qualified institutional buyers," as such term is defined in Rule 144A under the Act. HOLDERS: As defined in Section 2 hereof. INDEMNIFIED HOLDER: As defined in Section 8(a) hereof. INDENTURE: The Indenture, dated the Closing Date, among the Company, the Guarantors and the Trustee, pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof. INTEREST PAYMENT DATE: As defined in the Indenture and the Notes. NASD: National Association of Securities Dealers, Inc. NOTES: The Series B Notes and the Series C Notes. PERSON: An individual, partnership, corporation, trust, unincorporated organization, or a governmental agency or political subdivision thereof. PROSPECTUS: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus. RECORD HOLDER: With respect to any Damages Payment Date, each Person who is a Holder of Notes on the record date with respect to the Interest Payment Date on which such Damages Payment Date shall occur. REGISTRATION DEFAULT: As defined in Section 5 hereof. REGISTRATION STATEMENT: Any registration statement of the Company and the Guarantors relating to (a) an offering of Series C Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case, (i) which is filed pursuant to the provisions of this Agreement and (ii) including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein. RESTRICTED BROKER-DEALER: Any Broker-Dealer which holds Broker-Dealer Transfer Restricted Securities. SERIES C NOTES: The Company's 12 1/4 % Series C Senior Subordinated Notes due 2004 to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon the request of any Holder of Series B Notes covered by a Shelf Registration Statement, in exchange for such Series B Notes. SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof. TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture. TRANSFER RESTRICTED SECURITIES: Each Note, until (i) the date on which such Series B Note has been exchanged by a Person other than a broker- dealer for a Series C Note in the Exchange Offer, (ii) following the exchange by a broker-dealer in the Exchange Offer of a Series B Note for a Series C Note, the date on which such Series B Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Series B Note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Series B Note is distributed to the public pursuant to Rule 144 under the Act. TRUSTEE: United States Trust Company of New York and any of its successors. UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in which securities of the Company are sold to an underwriter for reoffering to the public. 1.2HOLDERS A Person is deemed to be a holder of Transfer Restricted Securities (each, a "HOLDER") whenever such Person owns Transfer Restricted Securities. 1.3REGISTERED EXCHANGE OFFER (a)Unless the Exchange Offer shall not be permitted by applicable federal law (after the procedures set forth in Section 6(a)(i) below have been complied with), the Company and the Guarantors shall (i) cause to be filed with the Commission as soon as practicable after the Closing Date, but in no event later than 90 days after the Closing Date, the Exchange Offer Registration Statement, (ii) use their best efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than 150 days after the Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause such Exchange Offer Registration Statement to become effective, (B) file, if applicable, a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the Series C Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer Registration Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting registration of the Series C Notes to be offered in exchange for the Series B Notes that are Transfer Restricted Securities and to permit sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers as contemplated by Section 3(c) below. (b)The Company and the Guarantors shall use their respective best efforts to cause the Exchange Offer Registration Statement to be effective continuously, and shall keep the Exchange Offer referred to in the second paragraph of Section 3(c) open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; PROVIDED, HOWEVER, that in no event shall such period be less than 20 Business Days. The Company and the Guarantors shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Series C Notes shall be included in the Exchange Offer Registration Statement. The Company and the Guarantors shall use their respective best efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 60 Business Days thereafter. (c)The Company and the Guarantors shall include a "Plan of Distribution" section in the Prospectus contained in the Exchange Offer Registration Statement and indicate therein that any Restricted Broker- Dealer who holds Series B Notes that are Transfer Restricted Securities and that were acquired for the account of such Broker-Dealer as a result of market-making activities or other trading activities, may exchange such Series B Notes (other than Transfer Restricted Securities acquired directly from the Company or any affiliate of the Company) pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of each Series C Note received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such "Plan of Distribution" section shall also contain all other information with respect to such sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers that the Commission may require in order to permit such sales pursuant thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer, except to the extent required by the Commission. The Company and the Guarantors shall use their respective best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) below to the extent necessary to ensure that it is available for sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers, and to ensure that such Registration Statement conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of one year from the date on which the Exchange Offer is Consummated (or such longer period if extended pursuant to Section 6(d) hereof). The Company and the Guarantors shall promptly provide sufficient copies of the latest version of such Prospectus to such Restricted Broker-Dealers promptly upon request, and in no event later than one day after such request, at any time during such one-year period in order to facilitate such sales. 1.4SHELF REGISTRATION (A)SHELF REGISTRATION. If (i) the Company and the Guarantors are not required to file an Exchange Offer Registration Statement with respect to the Series C Notes because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a)(i) below have been complied with) or (ii) any Holder of Transfer Restricted Securities shall notify the Company within 20 Business Days following the Consummation of the Exchange Offer that (A) such Holder was prohibited by law or Commission policy from participating in the Exchange Offer or (B) such Holder may not resell the Series C Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder or (C) such Holder is a Broker-Dealer and holds Series B Notes acquired directly from the Company or one of its affiliates, then the Company and the Guarantors shall (x) cause to be filed, on or prior to 45 days after the date on which the Company determines that it is not required to file the Exchange Offer Registration Statement pursuant to clause (i) above or 45 days after the date on which the Company receives the notice specified in clause (ii) above, a shelf registration statement pursuant to Rule 415 under the Act (which may be an amendment to the Exchange Offer Registration Statement (in either event, the "SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof, and shall (y) use their respective best efforts to cause such Shelf Registration Statement to be declared effective by the Commission as promptly as possible after the date on which the Company and the Guarantors become obligated to file such Shelf Registration Statement. If, after the Company and the Guarantors have filed an Exchange Offer Registration Statement which satisfies the requirements of Section 3(a) above, the Company and the Guarantors are required to file and make effective a Shelf Registration Statement solely because the Exchange Offer shall not be permitted under applicable federal law, then the filing of the Exchange Offer Registration Statement shall be deemed to satisfy the requirements of clause (x) above. Such an event shall have no effect on the requirements of clause (y) above. The Company and the Guarantors shall use their respective best efforts to keep the Shelf Registration Statement discussed in this Section 4(a) continuously effective, supplemented and amended as required by and subject to the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least three years (as extended pursuant to Section 6(d)) following the date on which such Shelf Registration Statement first becomes effective under the Act, or such shorter period ending when all Transfer Restricted Securities covered by the Shelf Registration Statement cease to be Transfer Restricted Securities. (B)PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 days after receipt of a request therefor, such information specified in item 507 of Regulation S-K under the Act for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to liquidated damages pursuant to Section 5 hereof unless and until such Holder shall have used its best efforts to provide all such information. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading. 1.5LIQUIDATED DAMAGES If (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any such Registration Statement has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement, (iii) the Exchange Offer has not been Consummated within 60 Business Days after the Exchange Offer Registration Statement is first declared effective by the Commission or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post- effective amendment to such Registration Statement that cures such failure and that is itself declared effective immediately (each such event referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly and severally agree to pay liquidated damages to each Holder of Transfer Restricted Securities with respect to the first 90-day period immediately following the occurrence of such Registration Default, in an amount equal to $.05 per week per $1,000 principal amount of Transfer Restricted Securities held by such Holder for each week or portion thereof that the Registration Default continues. The amount of the liquidated damages shall increase by an additional $.05 per week per $1,000 in principal amount of Transfer Restricted Securities with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages of $.50 per week per $1,000 principal amount of Transfer Restricted Securities. Notwithstanding anything to the contrary set forth herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon the filing of a post-effective amendment to the Registration Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective or made usable in the case of (iv) above, the liquidated damages payable with respect to the Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease. All accrued liquidated damages shall be paid by the Company and the Guarantors on each Interest Payment Date to the Global Note Holder either (i) in the form of additional Series C Notes, (ii) in cash, or (iii) in a combination of additional Series C Notes and cash; PROVIDED, HOWEVER, that in the event the Company and the Guarantors elect to pay liquidated damages pursuant to clause (iii), cash and Series C Notes shall be distributed to all Holders equally on a pro rata basis; PROVIDED, FURTHER, HOWEVER, that the Company and the Guarantors may pay cash solely to the extent necessary to prevent the issuance of Notes in denominations less than $1,000. If payable in cash, all accrued liquidated damages shall be paid by wire transfer of immediately available funds or by federal funds check and to Holders of Certificated Securities by mailing checks to their registered addresses on each Damages Payment Date. All obligations of the Company and the Guarantors set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full. 1.6REGISTRATION PROCEDURES (A)EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the Exchange Offer, the Company and the Guarantors shall comply with all applicable provisions of Section 6(c) below, shall use their respective best efforts to effect such exchange and to permit the sale of Broker- Dealer Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions: (i)If, following the date hereof there has been published a change in Commission policy with respect to exchange offers such as the Exchange Offer, such that in the reasonable opinion of counsel to the Company and the Guarantors there is a substantial question as to whether the Exchange Offer is permitted by applicable federal law, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Series B Notes. The Company and the Guarantors hereby agree to pursue the issuance of such a decision to the Commission staff level. In connection with the foregoing, the Company and the Guarantors hereby agree to take all such other actions as are requested by the Commission or otherwise required in connection with the issuance of such decision, including without limitation (A) participating in telephonic conferences with the Commission, (B) delivering to the Commission staff an analysis prepared by counsel to the Company and the Guarantors setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursuing a resolution (which need not be favorable) by the Commission staff of such submission. (ii)As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Company, prior to the Consummation of the Exchange Offer, a written representation to the Company and the Guarantors (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Series C Notes to be issued in the Exchange Offer and (C) it is acquiring the Series C Notes in its ordinary course of business. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in MORGAN STANLEY AND CO.. INC., (available June 5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988), as interpreted in the Commission's letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (including, if applicable, any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Act in connection with a secondary resale transaction and that such a secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Series C Notes obtained by such Holder in exchange for Series B Notes acquired by such Holder directly from the Company or an affiliate thereof. (iii)Prior to effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall provide a supplemental letter to the Commission (A) stating that the Company and the Guarantors are registering the Exchange Offer in reliance on the position of the Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988), MORGAN STANLEY AND CO.. INC., (available June 5, 1991) and, if applicable, any no-action letter obtained pursuant to clause (i) above, (B) including a representation that the Company and the Guarantors have not entered into any arrangement or understanding with any Person to distribute the Series C Notes to be received in the Exchange Offer and that, to the best of the Company's and the Guarantors' information and belief, each Holder participating in the Exchange Offer is acquiring the Series C Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Series C Notes received in the Exchange Offer and (C) any other undertaking or representation required by the Commission as set forth in any no-action letter obtained pursuant to clause (i) above. (B)SHELF REGISTRATION STATEMENT. In connection with the Shelf Registration Statement, the Company and the Guarantors shall comply with all the provisions of Section 6(c) below and shall use their respective best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company and the Guarantors pursuant to Section 4(b) hereof), and pursuant thereto the Company and the Guarantors will prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof. (C)GENERAL PROVISIONS. In connection with any Registration Statement and any related Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Exchange Offer Registration Statement and the related Prospectus, to the extent that the same are required to be available to permit sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers), the Company and the Guarantors shall: (i)use their respective best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in Section 3 or 4 of this Agreement, as applicable. Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company and the Guarantors shall file promptly an appropriate amendment to such Registration Statement, (1) in the case of clause (A), correcting any such misstatement or omission, and (2) in the case of clauses (A) and (B), use their respective best efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for its intended purpose(s) as soon as practicable thereafter; (ii)prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as applicable, under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (iii)advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Company and the Guarantors shall use their respective best efforts to obtain the withdrawal or lifting of such order at the earliest possible time; (iv)furnish to the Initial Purchaser, each selling Holder named in any Registration Statement or Prospectus and each of the underwriter(s) in connection with such sale, if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Company and the Guarantors will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which the selling Holders of the Transfer Restricted Securities covered by such Registration Statement or the underwriter(s) in connection with such sale, if any, shall reasonably object within five Business Days after the receipt thereof. A selling Holder or underwriter, if any, shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission or fails to comply with the applicable requirements of the Act; (v)promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document, upon request, to the selling Holders and to the underwriter(s) in connection with such sale, if any, make the Company's and the Guarantors' representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request; (vi)make available at reasonable times for inspection by the selling Holders, any managing underwriter participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such selling Holders or any of such underwriter(s), all financial and other records, pertinent corporate documents and properties of the Company and the Guarantors and cause the Company's and the Guarantors' officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement or any post- effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; (vii)if requested by any selling Holders or the underwriter(s) in connection with such sale, if any, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the "Plan of Distribution" of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be included in such Prospectus supplement or post-effective amendment; (viii)furnish to each selling Holder and each of the underwriter(s) in connection with such sale, if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); (ix)deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company and the Guarantors hereby consent to the use (in accordance with law) of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto; (x)enter into such agreements (including an underwriting agreement) and make such representations and warranties that are reasonably acceptable to the Company and the Guarantors and take all such other reasonable actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Registration Statement contemplated by this Agreement as may be reasonably requested by any Holder of Transfer Restricted Securities or underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, the Company and the Guarantors shall: (A)furnish (or in the case of paragraphs (2) and (3), use their respective best efforts to furnish) to each selling Holder and each underwriter, if any, upon the effectiveness of the Shelf Registration Statement and to each Restricted Broker-Dealer upon Consummation of the Exchange Offer: (1)a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, signed on behalf of the Company and such Guarantor by (x) the President or any Vice President and (y) a principal financial or accounting officer of the Company and each Guarantor, confirming, as of the date thereof, the type of matters set forth in paragraphs (a) through (d) of Section 8 of the Purchase Agreement with respect to the relevant Registration Statement and the securities registered thereunder, and such other similar matters as the Holders, underwriter(s) and/or Restricted Broker Dealers may reasonably request; (2)an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Company and the Guarantors covering matters similar to those set forth in paragraph (f) of Section 8 of the Purchase Agreement and such other matter as the Holders, underwriters and/or Restricted Broker Dealers may reasonably request, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors and have considered the matters required to be stated therein and the statements contained therein, and although such counsel has not independently verified the accuracy, completeness or fairness of such statements and has not made any independent check or verification, such counsel advises that, on the basis of the foregoing, no facts came to such counsel's attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation of the Exchange Offer, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements and schedules and other financial data included in, or omitted from, any Registration Statement contemplated by this Agreement or the related Prospectus; and (3)a customary comfort letter, dated as of the date of effectiveness of the Shelf Registration Statement or the date of Consummation of the Exchange Offer, as the case may be, from the Company's and the Guarantors' independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with primary underwritten offerings, and affirming the matters set forth in the comfort letters delivered pursuant to Section 8 of the Purchase Agreement, without exception; (B)set forth in full or incorporate by reference in the underwriting agreement, if any, in connection with any sale or resale pursuant to any Shelf Registration Statement the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and (C)deliver such other documents and certificates as may be reasonably requested by the selling Holders, the underwriter(s), if any, and Restricted Broker Dealers, if any, to evidence compliance with clause (A) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company and the Guarantors pursuant to this clause (x). The above shall be done at each closing under such underwriting or similar agreement, as and to the extent required thereunder, and if at any time the representations and warranties of the Company and the Guarantors contemplated in (A)(1) above cease to be true and correct, the Company shall so advise the underwriter(s), if any, the selling Holders and each Restricted Broker-Dealer promptly and if requested by such Persons, shall confirm such advice in writing; (xi)prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s), if any, may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; PROVIDED, HOWEVER, that the Company and the Guarantors shall not be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; (xii)issue, upon the request of any Holder of Series B Notes covered by any Shelf Registration Statement contemplated by this Agreement, Series C Notes having an aggregate principal amount equal to the aggregate principal amount of Series B Notes surrendered to the Company by such Holder in exchange therefor or being sold by such Holder; such Series C Notes to be registered in the name of such Holder or in the name of the purchaser(s) of such Notes, as the case may be; in return, the Series B Notes held by such Holder shall be surrendered to the Company for cancellation; (xiii)in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and to register such Transfer Restricted Securities in such denominations and such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to such sale of Transfer Restricted Securities; (xiv)use their respective best efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xi) above; (xv)subject to Section 6(c)(i), if any fact or event contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xvi)provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of a Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depository Trust Company; (xvii)cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any "qualified independent underwriter") that is required to be retained in accordance with the rules and regulations of the NASD, and use their respective best efforts to cause such Registration Statement to become effective and approved by such governmental agencies or authorities as may be necessary to enable the Holders selling Transfer Restricted Securities to consummate the disposition of such Transfer Restricted Securities; (xviii)otherwise use their respective best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) covering a twelve-month period beginning after the effective date of the Registration Statement (as such term is defined in paragraph (c) of Rule 158 under the Act); (xix)cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement and, in connection therewith, cooperate with the Trustee and the Holders of Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use their respective best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and (xx)provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 or Section 15(d) of the Exchange Act. (D)RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of the notice referred to in Section 6(c)(i) or any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(C) or (D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof, or until it is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (the "Advice"). If so directed by the Company, each Holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of either such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(i) or Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or shall have received the Advice. 1.7REGISTRATION EXPENSES (a)All expenses incident to the Company's and the Guarantors' performance of or compliance with this Agreement will be borne by the Company, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchaser or any Holder with the NASD (and, if applicable, the fees and expenses of any "qualified independent underwriter") and its counsel that may be required by the rules and regulations of the NASD); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the Series C Notes to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company and the Guarantors and the Holders of Transfer Restricted Securities (subject to the provisions of Section 7(b) below); (v) all application and filing fees in connection with listing the Notes on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance). The Company will, in any event, bear its and the Guarantors' internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors. (b)In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors will reimburse the Initial Purchaser and the Holders of Transfer Restricted Securities being tendered in the Exchange Offer and/or resold pursuant to the "Plan of Distribution" contained in the Exchange Offer Registration Statement or registered pursuant to the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared. 1.8INDEMNIFICATION (a)The Company and the Guarantors agree, jointly and severally, to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a "controlling person") and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an "INDEMNIFIED HOLDER"), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including without limitation and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder) directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, preliminary prospectus or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company and the Guarantors by any of the Holders expressly for use therein; PROVIDED, HOWEVER, that the Company and the Guarantors shall not be required to indemnify any such Person if such untrue statement or omission or alleged untrue statement or omission was contained or made in any preliminary prospectus and corrected in the Prospectus or any amendment or supplement thereto and the Prospectus does not contain any other untrue statement or omission or alleged untrue statement or omission of a material fact that was the subject matter of the related proceeding and any such loss, liability, claim, damage or expense suffered or incurred by the Indemnified Holder resulted from any action, claim or suit by any Person who purchased Transfer Restricted Securities or Series C Notes which are the subject thereof from such Indemnified Holder and it is established in the related proceeding that such Indemnified Holder failed to deliver or provide a copy of the Prospectus (as amended or supplemented) to such Person with or prior to the confirmation of the sale of such Transfer Restricted Securities or Series C Notes sold to such Person if required by applicable law, unless such failure to deliver or provide a copy of the Prospectus (as amended or supplemented) was a result of noncompliance by the Company or any Guarantor with Section 6 of this Agreement. In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company or any Guarantor, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall promptly notify the Company in writing (PROVIDED, that the failure to give such notice shall not relieve the Company and such Guarantor of their obligations pursuant to this Agreement, unless and only to the extent that such failure directly results in the loss or compromise of any material rights or defenses by the Company and such Guarantor and the Company and such Guarantor were not otherwise aware of such action or claim). In such event, the Company and such Guarantor shall retain counsel reasonably satisfactory to the Indemnified Holders to represent the Indemnified Holders and any others the Company and such Guarantor may reasonably designate in such proceeding and shall pay the reasonable fees and expenses actually incurred by such counsel related to such proceeding. The Company and such Guarantor shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders. The Company and the Guarantors shall be liable for any settlement of any such action or proceeding effected with the Company's prior written consent, which consent shall not be withheld unreasonably, and the Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless each Indemnified Holder from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Company. The Company and the Guarantors shall not, without the prior written consent of each Indemnified Holder, which shall not be unreasonably withheld, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding. (b)Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company and each Guarantor, and their respective directors, officers, and any Person controlling (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company or the Guarantors, and the respective officers, directors, partners, employees, representatives and agents of each such Person, to the same extent as the foregoing indemnity from the Company and the Guarantors to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by such Holder expressly for use in any Registration Statement, preliminary prospectus or Prospectus (or any amendment or supplement thereto). In case any action or proceeding shall be brought against the Company or any Guarantor or its directors or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Securities, such Holder shall have the rights and duties given the Company or such Guarantor, and the Company or such Guarantor, such directors or officers or such controlling person shall have the rights and duties given to each Holder by the preceding paragraph. The liability of any Holder under this paragraph shall in no event exceed the proceeds received by such Holder from sales of Transfer Restricted Securities or Series C Notes giving rise to such obligations. (c)If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from their sale of Transfer Restricted Securities or if such allocation is not permitted by applicable law, the relative fault of the Company and the Guarantors, on the one hand, and of the Indemnified Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the one hand and the Indemnified Holders on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of discounts and commissions but before deducting expenses) of the Notes received by the Company bears to the total proceeds received by such Indemnified Holder from the sale to Transfer Restricted Securities or Series C Notes, as the case may be. The relative fault of the Company and the Guarantors, on the one hand, and of the Indemnified Holder, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or such Guarantor or by the Indemnified Holder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission and any other equitable consideration appropriate in the circumstances. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The Company and the Guarantors, and each Holder of Transfer Restricted Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Holder or its related Indemnified Holders shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total received by such Holder with respect to the sale of its Transfer Restricted Securities pursuant to a Registration Statement exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders' obligations to contribute pursuant to this Section 8(c) are several in proportion to the respective principal amount of Series B Notes held by each of the Holders hereunder and not joint. 1.9RULE 144A The Company and each Guarantor hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding and during any period in which the Company or such Guarantor is not subject to Section 13 or 15(d) of the Securities Exchange Act, to make available, upon request of any Holder of Transfer Restricted Securities, to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A. 1.10UNDERWRITTEN REGISTRATIONS No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 1.11SELECTION OF UNDERWRITERS For any Underwritten Offering, the investment banker or investment bankers and manager or managers for any Underwritten Offering that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering and reasonably acceptable to the Company. Such investment bankers and managers are referred to herein as the "underwriters." 1.12MISCELLANEOUS (A)REMEDIES. Each Holder, in addition to being entitled to exercise all rights provided herein, in the Indenture, the Purchase Agreement or granted by law, including recovery of liquidated or other damages, will be entitled to specific performance of its rights under this Agreement. The Company and the Guarantors agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by them of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate. (B)NO INCONSISTENT AGREEMENTS. Neither the Company nor any Guarantor will, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's or any Guarantor's securities under any agreement in effect on the date hereof. (C)ADJUSTMENTS AFFECTING THE NOTES. The Company and the Guarantors will not take any action, or voluntarily permit any change to occur, with respect to the Notes that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer. (D)AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) the consent of the Company is obtained, which shall not be unreasonably withheld, (ii) in the case of Section 5 hereof and this Section 12(d)(i), the Company has obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (iii) in the case of all other provisions hereof, the Company has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities subject to such Exchange Offer. (E)NOTICES. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery: (i)if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and (ii)if to the Company or any Guarantor: Berry Plastics Corporation 101 Oakley Street P.O. Box 959 Evansville, Indiana 47710-0959 Telecopier No.: (812) 421-9604 Attention: Martin R. Imbler With a copy to: O'Sullivan Graev & Karabell, LLP 30 Rockefeller Plaza New York, New York 10112 Telecopier No.: (212) 408-2420 Attention: Michael Joseph O'Brien, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture. (F)SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; PROVIDED, HOWEVER, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Securities directly from such Holder. (G)COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (H)HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (I)GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF. (J)SEVERABILITY. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (K)ENTIRE AGREEMENT. This Agreement and the other agreements referenced herein are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. (L)UNDERWRITING AGREEMENT. Notwithstanding the provisions of Section 6 hereof, in the event of a Shelf Registration pursuant to Section 4 hereof, to the extent that the Holders of Transfer Restricted Securities shall enter into an underwriting or similar agreement, which agreement contains provisions covering one or more issues addressed in such Section with substantially similar effect, the provisions contained in such Sections addressing such issue or issues shall be of no force or effect with respect to the registration of securities being effected in connection with such underwriting or similar agreement. (M)TERMINATION. This Agreement shall terminate and be of no further force or effect when there shall not be any Transfer Restricted Securities, except that the provisions of Section 5, 7, 8 and 12 shall survive any such termination. IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. BERRY PLASTICS CORPORATION By: Name: Title: BPC HOLDING CORPORATION By:_________________________________ Name: Title: BERRY IOWA CORPORATION By:_________________________________ Name: Title: BERRY STERLING CORPORATION By:_________________________________ Name: Title: BERRY TRI-PLAS CORPORATION By:_________________________________ Name: Title: AEROCON, INC. By:_________________________________ Name: Title: PACKERWARE CORPORATION By:_________________________________ Name: Title: BERRY PLASTICS DESIGN CORPORATION By:_________________________________ Name: Title: VENTURE PACKAGING, INC. By:_________________________________ Name: Title: VENTURE PACKAGING MIDWEST, INC. By:_________________________________ Name: Title: VENTURE PACKAGING SOUTHEAST, INC. By:_________________________________ Name: Title: NIM HOLDINGS LIMITED By:_________________________________ Name: Title: NORWICH INJECTION MOULDERS LIMITED By:_________________________________ Name: Title: DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION By: Name: Title: EX-8 25 OPINION OF O'SULLIVAN GRAEV & KARABELL, LLP BPC Holding Corporation 101 Oakley Street Evansville, Indiana 47710 Page December 22, 1998 Berry Plastics Corporation 101 Oakley Street Evansville, Indiana 47710 Berry Plastics Corporation 12 {1}/4% SERIES C SENIOR SUBORDINATED NOTES DUE 2004 Dear Sirs: We have acted as counsel for Berry Plastics Corporation, a Delaware corporation (the "Company"), in connection with the preparation and filing of the Registration Statement of the Company on Form S-4, as amended (File No. 333-64599) (the "Registration Statement"), under the Securities Act of 1933, as amended. All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Registration Statement. In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary for the purposes of rendering the opinions set forth below. As to certain questions of fact material to the opinions contained herein, we have relied upon certificates or statements of officers of the Company and certificates of public officials. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us as certified or photostatic copies. Based upon and subject to the foregoing, and subject to the qualifications and limitations set forth therein, we are of the opinion that the discussion in the Registration Statement entitled "MATERIAL FEDERAL INCOME TAX CONSIDERATIONS" fairly presents the material Federal income tax considerations relevant to the exchange of Old Notes for New Notes pursuant to the Exchange Offer and to the ownership of the New Notes. We know that we are referred to under the heading "Legal Matters" in the Prospectus forming a part of the Registration Statement, and we hereby consent to such use of our name in said Registration Statement and to the use of this opinion for filing with said Registration Statement as Exhibit 8 thereto. Very truly yours, /s/ O'Sullivan Graev & Karabell, LLP EX-10.1 26 SECOND AMENDED AND RESTATED FINANCING AND SECURITY SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT THIS SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this "AGREEMENT") is made this 2nd day of July, 1998, 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 ("Berry UK"), and NORWICH INJECTION MOULDERS LIMITED, a company organized and existing under the laws of England and Wales ("NORWICH"); NATIONSBANK, N. A., a national banking association ("NATIONSBANK"), 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"), HELLER FINANCIAL, INC., a corporation organized and existing under the laws of the State of Delaware ("HELLER") 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"); and NATIONSBANK, N. A., a national banking association, in its capacity as both collateral and administrative agent for the Lenders (the "AGENT"). RECITALS (A)The Borrower, the Agent and the Lenders are parties to that certain Amended and Restated Financing and Security Agreement dated as of August 29, 1997 by and among the Borrower, the Agent and the Lenders (other than Heller), as amended by that certain First Amendment to Amended and Restated Financing and Security Agreement dated as of March 4, 1998 (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 $50,000,000, (ii) a letter of credit facility in the maximum principal amount of $5,000,000, as part of that revolving credit facility, (iii) a term loan facility in the maximum principal amount of $28,003,000, (iv) a term loan facility in the maximum principal amount of $30,000,000 ("Term Loan B"), (iv) a standby letter of credit facility in the maximum principal amount of $18,852,000, (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. (B)The Borrower has advised the Agent and the Lenders that the Borrower has formed Berry UK and that Berry UK is a wholly-owned subsidiary of the Borrower. Contemporaneously with the execution and delivery of this Agreement, Berry UK has acquired or intends to acquire all of the capital stock ("Norwich Stock") issued by Norwich in accordance with the provisions of that certain Agreement for the Sale and Purchase of the Entire Issued Share Capital of Norwich Injection Moulders Limited dated as of July 1, 1998 by and among Berry UK, the Borrower and the shareholders of Norwich (as amended, restated, supplemented or otherwise modified, the "Norwich Purchase Agreement"). (C)In connection with the consummation of the acquisition of the Norwich Stock, the Borrower has requested that the Lenders agree (i) to amend and restructure Term Loan B such that as of the date of this Agreement, the maximum aggregate unpaid principal balance of Term Loan B shall be $36,500,000 and (ii) otherwise to amend certain terms and conditions of the Original Credit Agreement and that NationsBank (i) make a revolving credit facility available to Berry UK and Norwich up to a maximum principal amount of 1,500,000 (the "UK Revolving Loan") and (ii) make a term loan to Berry UK up to a maximum principal amount of 4,500,000 (the "UK Term Loan"). In addition, the Borrower has requested that the Agent and the Lenders consent and agree to (1) the formation of Berry UK and (2) the acquisition of the Norwich Stock by Berry UK in accordance with the terms and conditions of the Norwich Purchase Agreement. (D)Accordingly, the Borrower, the Agent and the Lenders desire to amend and restate the Original Credit Agreement, as follows: ARTICLE I DEFINITIONS SECTION 1.1CERTAIN 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. "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. 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 Eighty Thousand Dollars ($80,000), payable quarterly in arrears in installments of $20,000 each. The initial Agency Fee shall be payable on the Second Closing Date, and each Agency Fee thereafter shall be payable in advance on the first day of each quarterly period, 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. (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. (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 Second 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. 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, the Borrower, Berry UK and Norwich and to the extent provided in CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED. by an agreement in writing signed by all of the Lenders, the Borrower, Berry UK and Norwich. 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 Norwich therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Borrower, Berry UK, Norwich 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. (Amendments; Waivers). "Alternate Base Rate" means the sum of (a) the Base Rate PLUS (b) the Applicable Margin. "Amortizing Iowa Bond Letter of Credit Obligations" has the meaning described in Section (ii)Notwithstanding the provisions of paragraph (a) above, as long as no Event of Default has occurred, any drawing under the Iowa Bond Letter of Credit - NB to redeem Iowa Bonds purchased with a drawing under the Iowa Bond Standby Credit Agreement, any drawing under the Nevada Bond Letter of Credit - NB to purchase Nevada Bonds, and any drawing under the South Carolina Bond Letter of Credit - NB to purchase South Carolina Bonds, in each case relating to 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 BIC or the Borrower, as appropriate, make payments of interest to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under INTEREST. (Interest), and the principal amount of each such Conversion Drawing is repaid in equal quarterly payments (i) over the remaining term to expiry of the Bond Letter of Credit Facility with respect to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB and (ii) over a period of ten (10) years with respect to the Iowa Bond Letter of Credit - NB; final payment of all outstanding amounts relating to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB to be made no later than expiry of the Bond Letter of Credit Facility or the Revolving Credit Termination Date, whichever is earlier, and final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of any Conversion Drawing under the Iowa Bond Letter of Credit - NB or the Revolving Credit Termination Date, whichever is earlier. In addition, the Agent and the Lenders agree that in the event the Iowa Bond Trustee draws on the Iowa Bond Letter of Credit on or about the business day preceding the expiration or termination of the Iowa Bond Letter of Credit, as contemplated by Section 505 of the Iowa Bond Trust Agreement (the "Draw"), the Iowa Bond Letter of Credit Obligations resulting from the Draw, shall not be payable ON DEMAND as would otherwise be required by this Section (E) PAYMENTS OF BOND LETTERS OF CREDIT., but shall be repaid by the Borrower in equal consecutive quarterly installments over a period of ten (10) years, commencing with the first day following the first full quarterly period after the Draw and continuing on the first day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter of Credit Obligations"); provided, that (A) there does not exist a Default or an Event of Default, (B) the Draw is not the result of an acceleration of the Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement and (C) the Draw is not the result of the occurrence of a "Determination of Taxability" (as defined in the Iowa Bond Trust Agreement). Interest shall be payable on the Amortizing Iowa Bond Letter of Credit Obligations to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under INTEREST. (Interest), with a final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of the Draw or the Revolving Credit Termination Date, whichever is earlier. (Payments of Bond Letters of Credit). "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 (A) APPLICABLE INTEREST RATES.(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 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. NationsBank agrees that if at any time NationsBank sells one hundred percent (100%) of all of its Commitments, NationsBank shall resign as Agent and the remaining Lenders shall select a replacement Agent in accordance with the provisions of this Agreement. In addition, NationsBank agrees that for so long as NationsBank is the Agent, unless otherwise agreed by the Lenders, NationsBank shall continue to hold a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of the Lender (other than NationsBank) 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 ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich 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.(Assignments by Lenders). "Assignment of Patents" means (a) that certain collateral assignment of patents as security dated as of the First Closing Date from the Borrower to the Agent for the benefit of the Lenders ratably and the Agent, (b) that certain collateral assignment of patents as security dated as of the First Closing Date from BTP, BIC, Berry Sterling and PackerWare to the Agent for the benefit of the Lenders ratably and the Agent, and (c) that certain collateral assignment of patents as security dated as of the date of the Second Closing Date from Venture Southeast and Venture Midwest, as amended, restated, supplemented or otherwise modified in writing at any time and from time to time. "Assignment of Trademarks" means (a) that certain collateral assignment of trademarks as security dated as of the First Closing Date from the Borrower to the Agent for the benefit of the Lenders ratably and the Agent, (b) that certain collateral assignment of trademarks as security dated as of the First Closing Date from PackerWare to the Agent for the benefit of the Lenders ratably and the Agent, and (c) that certain collateral assignment of trademarks as security dated the date of the Second Closing Date from Venture Southeast and Venture Midwest to the Agent for the benefit of the Lenders ratably and the Agent, as amended, restated, supplemented or otherwise modified in writing at any time and from time to time. "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 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 NIM Holdings Limited, a company organized and existing under the laws of the England, 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 Agreements" means the collective reference to the Iowa Bond Letter of Credit Agreement, the Nevada Bond Letter of Credit Agreement and the South Carolina Bond Letter of Credit Agreement. "Bond Letter of Credit Commitment" means the agreement of the Agent relating to the issuance of the Bond Letters of Credit, the repayment of the Bond Letter of Credit Obligations and the agreement of a Lender to purchase a participating interest in any Bond Letter of Credit Obligations with respect to such Bond Letters of Credit, all subject to and in accordance with the provisions of this Agreement; and "Bond Letter of Credit Commitments" means the collective reference to the Bond Letter of Credit Commitment of the Agent and each of the Lenders. "Bond Letter of Credit Committed Amount" has the meaning given such term in Section (A) BOND LETTERS OF CREDIT. Subject to and upon the provisions of the Bond Letter of Credit Agreements, the Agent has agreed to issue the Bond Letters 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 a Bond Letter of Credit if the aggregate stated amount of all Bond Letters of Credit then outstanding or proposed to be issued exceeds Eighteen Million Eight Hundred Fifty-Two Thousand Dollars ($18,852,000) (the "Bond Letter of Credit Committed Amount").(Bond Letters of Credit). "Bond Letter of Credit Facility" means the facility established pursuant to THE BOND LETTER OF CREDIT FACILITY.(Bond Letter of Credit Facility). "Bond Letter of Credit Fee" and "Bond Letter of Credit Fees" have the meanings described in Section (B) BOND LETTER OF CREDIT FEES. (Bond Letter of Credit Fees). "Bond Letter of Credit Fronting Fee" and "Bond Letter of Credit Fronting Fees" have the meanings described in Section (B) BOND LETTER OF CREDIT FEES. (Bond Letter of Credit Fees). "Bond Letter of Credit Obligations" means the collective reference to the Iowa Bond Letter of Credit Obligations, the Nevada Bond Letter of Credit Obligations and the South Carolina Bond Letter of Credit Obligations. "Bond Letter of Credit Agreement Documents" means the collective reference to the Iowa Bond Letter of Credit Agreement Documents - Bonds, the Iowa Bond Letter of Credit Agreement Documents - NB, the Nevada Bond Letter of Credit Agreement Documents - Bonds, the Nevada Bond Letter of Credit Agreement Documents - NB, the South Carolina Bond Letter of Credit Agreement Documents - Bonds, and the South Carolina Bond Letter of Credit Agreement Documents - NB. "Bond Letters of Credit" means the collective reference to the Iowa Bond Letter of Credit - NB, the Nevada Bond Letter of Credit - NB and the South Carolina Bond Letter of Credit - NB. "Bonds" means the collective reference to the Iowa Bonds, the Nevada Bonds and the South Carolina Bonds. "Borrowing Base" has the meaning described in Section (C) 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) Twenty-five Million Dollars ($25,000,000(Borrowing Base). "Borrowing Base Deficiency" has the meaning described in Section (C) 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) Twenty-five Million Dollars ($25,000,000(Borrowing Base). "Borrowing Base Report" has the meaning described in Section (D) 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 (D) BORROWING BASE REPORT., 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; provided, that the Agent 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 the Agen(Borrowing Base Report). "Borrowing Base Trigger Event" has the meaning described in Section (D) 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 (D) BORROWING BASE REPORT., 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; provided, that the Agent 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 the Agen (Borrowing Base Report). "Business Day" means any day other than a Saturday, Sunday or other day on which (i) in the case of NationsBank (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 NationsBank, 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. "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 Norwich, 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. "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 (H) 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. (The Collateral Account). "COLLATERAL DISCLOSURE LIST" HAS THE MEANING DESCRIBED IN COLLATERAL DISCLOSURE LIST. On or prior to the date of this Agreement, the Borrower, Berry UK and Norwich 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, Norwich 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, Norwich 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, Norwich 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. (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, Special Source Bond 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, Special Source Bond Commitment, the UK Revolving Credit Commitments and the UK Term Loan Commitments of all of the Lenders. "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 (I) 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, Norwich and all other Subsidiaries, prepared in accordance with GAAP and examined and certified 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, Norwich 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, Norwich 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 (A) FINANCIAL STATEMENTS. 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. (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. "Container Purchase Agreement" means that certain asset purchase agreement dated as of January 17, 1997 by and among the Borrower, Container Industries, Inc. and the shareholders of Container Industries, Inc., as amended, restated, supplemented or otherwise modified. "Container Purchase Agreement Transaction" means the acquisition of all or substantially all of the assets of Container Industries, Inc. "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 any of the foregoing, and (d) all rights corresponding to any of the foregoing throughout the world. "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 (E) PAYMENTS OF BOND LETTERS OF CREDIT. (Payments of Bond Letters of Credit). "Current Letter of Credit Obligations" has the meaning described in Section (E) 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": 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": (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 Norwich, 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. For purposes of calculating "Debt Service", the Agent and the Lenders agree that (a) scheduled payments with respect to the Iowa Bond Letter of Credit Obligations shall reflect the permitted amortization of a portion of such Iowa Bond Letter of Credit Obligations pursuant to Section (ii) Notwithstanding the provisions of paragraph (a) above, as long as no Event of Default has occurred, any drawing under the Iowa Bond Letter of Credit - NB to redeem Iowa Bonds purchased with a drawing under the Iowa Bond Standby Credit Agreement, any drawing under the Nevada Bond Letter of Credit - NB to purchase Nevada Bonds, and any drawing under the South Carolina Bond Letter of Credit - NB to purchase South Carolina Bonds, in each case relating to 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 BIC or the Borrower, as appropriate, make payments of interest to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under Interest. (Interest), and the principal amount of each such Conversion Drawing is repaid in equal quarterly payments (i) over the remaining term to expiry of the Bond Letter of Credit Facility with respect to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB and (ii) over a period of ten (10) years with respect to the Iowa Bond Letter of Credit - NB; final payment of all outstanding amounts relating to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB to be made no later than expiry of the Bond Letter of Credit Facility or the Revolving Credit Termination Date, whichever is earlier, and final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of any Conversion Drawing under the Iowa Bond Letter of Credit - NB or the Revolving Credit Termination Date, whichever is earlier. In addition, the Agent and the Lenders agree that in the event the Iowa Bond Trustee draws on the Iowa Bond Letter of Credit on or about the business day preceding the expiration or termination of the Iowa Bond Letter of Credit, as contemplated by Section 505 of the Iowa Bond Trust Agreement (the "Draw"), the Iowa Bond Letter of Credit Obligations resulting from the Draw, shall not be payable ON DEMAND as would otherwise be required by this Section (E) PAYMENTS OF BOND LETTERS OF CREDIT., but shall be repaid by the Borrower in equal consecutive quarterly installments over a period of ten (10) years, commencing with the first day following the first full quarterly period after the Draw and continuing on the first day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter of Credit Obligations"); provided, that (A) there does not exist a Default or an Event of Default, (B) the Draw is not the result of an acceleration of the Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement and (C) the Draw is not the result of the occurrence of a "Determination of Taxability" (as defined in the Iowa Bond Trust Agreement). Interest shall be payable on the Amortizing Iowa Bond Letter of Credit Obligations to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under INTEREST. (Interest), with a final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of the Draw or the Revolving Credit Termination Date, whichever is earlier.(Payments of Bond Letters of Credit), and (b) Iowa Bond Rollover Payments shall not be included in the determination of Debt Service. "Debt Service Coverage Ratio" means as to the Borrower, each of the Subsidiary Guarantors, Berry UK and Norwich on a consolidated basis, for any period of determination thereof the ratio of (a) EBITDA to (b) Debt Service. "Deed of Trust - Anderson" means that certain deed of trust or mortgage dated as of the Second Closing Date from Venture Southeast 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 - Anderson 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 Anderson County, South Carolina, as further described therein. "Deed of Trust - Indian Trail" means that certain deed of trust or mortgage dated as of the First Closing Date 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. "Deed of Trust - Evansville" means that certain deed of trust or mortgage dated as of the First Closing Date 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 deed of trust or mortgage dated as of the First Closing Date 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 deed of trust or mortgage dated as of the First Closing Date 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 deed of trust or mortgage dated as of the First Closing Date 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 deed of trust or mortgage dated as of the Second Closing Date 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 - Anderson 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 - Suffolk" means that certain credit line deed of trust, assignment and security agreement dated as of May 13, 1997 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. "Deeds of Trust" means the collective reference to the Deed of Trust - Anderson, 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 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 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, the Bond Letter of Credit Facility, or the Special Source Bond 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, the Bond Letter of Credit Facility, and the Special Source Bond Facility, and any and all other credit facilities now or hereafter extended to the Borrower under or secured by this Agreement. "Draw" has the meaning described in Section (ii) Notwithstanding the provisions of paragraph (a) above, as long as no Event of Default has occurred, any drawing under the Iowa Bond Letter of Credit - NB to redeem Iowa Bonds purchased with a drawing under the Iowa Bond Standby Credit Agreement, any drawing under the Nevada Bond Letter of Credit - NB to purchase Nevada Bonds, and any drawing under the South Carolina Bond Letter of Credit - NB to purchase South Carolina Bonds, in each case relating to 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 BIC or the Borrower, as appropriate, make payments of interest to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under Interest. (Interest), and the principal amount of each such Conversion Drawing is repaid in equal quarterly payments (i) over the remaining term to expiry of the Bond Letter of Credit Facility with respect to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB and (ii) over a period of ten (10) years with respect to the Iowa Bond Letter of Credit - NB; final payment of all outstanding amounts relating to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB to be made no later than expiry of the Bond Letter of Credit Facility or the Revolving Credit Termination Date, whichever is earlier, and final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of any Conversion Drawing under the Iowa Bond Letter of Credit - NB or the Revolving Credit Termination Date, whichever is earlier. In addition, the Agent and the Lenders agree that in the event the Iowa Bond Trustee draws on the Iowa Bond Letter of Credit on or about the business day preceding the expiration or termination of the Iowa Bond Letter of Credit, as contemplated by Section 505 of the Iowa Bond Trust Agreement (the "Draw"), the Iowa Bond Letter of Credit Obligations resulting from the Draw, shall not be payable ON DEMAND as would otherwise be required by this Section (E) PAYMENTS OF BOND LETTERS OF CREDIT., but shall be repaid by the Borrower in equal consecutive quarterly installments over a period of ten (10) years, commencing with the first day following the first full quarterly period after the Draw and continuing on the first day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter of Credit Obligations"); provided, that (A) there does not exist a Default or an Event of Default, (B) the Draw is not the result of an acceleration of the Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement and (C) the Draw is not the result of the occurrence of a "Determination of Taxability" (as defined in the Iowa Bond Trust Agreement). Interest shall be payable on the Amortizing Iowa Bond Letter of Credit Obligations to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under Interest. (Interest), with a final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of the Draw or the Revolving Credit Termination Date, whichever is earlier. (Payment of Bond Letters of Credit). "Early Termination Fee" has the meaning described in Section (K) EARLY TERMINATION FEE. In the event of the termination of the Revolving Credit Commitments, the Borrower shall pay a fee to the Agent for the benefit of the Lenders ratably (the "Early Termination Fee"), equal to following amount at the following times: (Early Termination Fee). "EBITDA" means as to the Borrower, Berry UK, Norwich 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) 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. "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 by the aggregate amount of all reserves, limits and deductions provided for in this definition or in (C) 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) Twenty-five Million Dollars ($25,000,000 (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 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) which the Agent determines in the exercise of its sole and absolute discretion 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 any returns, 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 Norwich, Berry UK, the Borrower or any Subsidiary Guarantor, individually, or Norwich, Berry UK, the Borrower and each of the Subsidiary Guarantors collectively, are non-Eligible Domestic Receivables and/or non-Eligible UK Receivables; (i)the Account is not owing by an Account Debtor or a group of affiliated Account Debtors whose then existing Accounts owing to the Borrower or any Subsidiary Guarantor, individually, exceed in the aggregate, fifteen percent (15%) of the total Eligible Domestic Receivables of the Borrower or the Subsidiary Guarantor, as appropriate and is not owing by an Account Debtor or a group of affiliated Account Debtors whose then existing Accounts to the Borrower and each of 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 1.1 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 1.1 whose then existing Accounts to the Borrower and/or any Subsidiary Guarantor, individually, exceed, in the aggregate, twenty-five percent (25%) of the total Eligible Domestic Receivables of the Borrower or any Subsidiary Guarantor, as appropriate, and is not owing by an Account Debtor so named on SCHEDULE 1.1 whose then existing Accounts to the Borrower and each of 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; (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 Norwich, Berry UK, the Borrower or any Subsidiary Guarantor or an employee, officer, director of shareholder of Norwich, 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 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 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 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 Norwich 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 by the aggregate amount of all reserves, limits and deductions provided for in this definition or in Section (C) UK BORROWING BASE. (UK Borrowing Base); EXCLUDING, however, any Inventory which consists of: (a)any Inventory located outside of England or Wales, (b)any Inventory on which NationsBank 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 Norwich 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 NationsBank in which such bailee, warehouseman, consignee or similar third party consents and agrees to the Lien of NationsBank on such Inventory and to such other terms and conditions as may be reasonably required by NationsBank, or (2) with respect to any Inventory in the possession of a bailee or warehouseman, NationsBank 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 Norwich or Berry UK (NationsBank agrees to so establish a reserve as shall be appropriate unless otherwise directed by Norwich or Berry UK), (e)any Inventory located on premises leased or rented to Norwich or Berry UK or otherwise not owned by Norwich or Berry UK, unless either (i) NationsBank has received a waiver and consent from the lessor, landlord and/or owner, in form and substance reasonably satisfactory to NationsBank and from any mortgagee of such lessor, landlord or owner to the extent reasonably required by NationsBank or (ii) with respect to any such Inventory, NationsBank 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 Norwich or Berry UK (NationsBank agrees to so establish a reserve as shall be appropriate unless otherwise directed by Norwich 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 NationsBank to realize upon the value of the Inventory, (h)work-in-process or supplies, (i)any Inventory as to which NationsBank 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) which NationsBank determines in the exercise of its sole and absolute discretion 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 NationsBank in the good faith exercise of its sole and absolute discretion has deemed to be ineligible because NationsBank considers the collateral value to NationsBank 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 NationsBank 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 any returns, 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 Norwich or Berry UK, provided each Account conforms and continues to conform to the following criteria to the reasonable satisfaction of NationsBank: (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 NationsBank, dated no later than two (2) Business Days after the date of shipment or performance and containing only terms normally offered by Norwich or Berry UK; (f)the amount shown on the books of Norwich or Berry UK, as appropriate, and on any invoice, certificate, schedule or statement delivered to NationsBank is owing to Norwich 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 ninety (90) 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 Norwich and/or Berry UK, individually, or Norwich and Berry UK collectively, are non-Eligible UK Receivables; (i)the Account is not owing by an Account Debtor or a group of affiliated Account Debtors whose then existing Accounts owing to Norwich and/or Berry UK, individually, exceed in the aggregate, fifteen percent (15%) of the total Eligible UK Receivables of Norwich and Berry UK, and is not owing by an Account Debtor or a group of affiliated Account Debtors whose then existing Accounts to Norwich and/or Berry UK collectively exceed, in the aggregate, fifteen percent (15%) of the total Eligible UK Receivables of Norwich and Berry UK, except that with respect to Accounts owing by those Account Debtors identified on SCHEDULE 1.1 attached hereto, as updated with the consent of NationsBank at any time and from time to time, the Account is not owing by any Account Debtor so named on SCHEDULE 1.1 whose then existing Accounts to Norwich and/or Berry UK, individually, exceed, in the aggregate, twenty-five percent (25%) of the total Eligible UK Receivables of Norwich and/or Berry UK, and is not owing by an Account Debtor so named on SCHEDULE 1.1 whose then existing Accounts to Norwich and/or Berry UK, collectively, exceed, in the aggregate, twenty-five percent (25%) of the total Eligible UK Receivables of Norwich and Berry UK; (j)the Account Debtor has not returned, rejected or refused to retain, or otherwise notified Norwich 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 Norwich, Berry UK, the Borrower or any Subsidiary Guarantor or an employee, officer, director of shareholder of Norwich, Berry UK, the Borrower or any Subsidiary Guarantor or any Subsidiary or Affiliate of Norwich, 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 NationsBank 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 NationsBank); (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 Norwich shall have complied to the satisfaction of NationsBank with the applicable Laws, if any, governing the creation and perfection of Liens in such Accounts (o)Neither Norwich 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 Norwich 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 NationsBank; (r)the title of Norwich 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 NationsBank and Liens securing the Obligations; (s)no bond or other undertaking by a guarantor or surety which is not reasonably acceptable to NationsBank 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)Norwich 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 NationsBank 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 the assignment or grant of a Lien by Norwich or Berry UK to NationsBank of the Account arising from such contract or order; (v)the Account is subject to a Lien in favor of NationsBank, 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 NationsBank and other Permitted Liens; (x)no part of the Account represents a progress billing or a retainage; (y)NationsBank 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 NationsBank 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 NationsBank 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. 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. 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. (Subsidiary Guarantor Assets), and any of the following: (Costs) and 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 Norwich 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 Norwich, 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 execution and delivery of this Agreement, the repayment of the other Obligations and shall survive the termination of this Agreemen (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 Norwich, 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 DEFAULT AND RIGHTS AND REMEDIES (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 Norwich, an amount equal to fifty percent (50%) of the sum of (a) EBITDA, less (b) non-financed Capital Expenditures permitted by Section (F) CAPITAL EXPENDITURES. Except for Permitted Acquisitions and permitted reinvestments of Permitted Asset Dispositions, neither the Borrower, Berry UK nor Norwich will or will permit any Subsidiary to, directly or indirectly, make any Capital Expenditures in the aggregate for the Borrower, Berry UK, Norwich and their respective Subsidiaries (taken as a whole) in amount which exceed the following amounts at any time during the following fiscal years (for each fiscal year, the "Capital Expenditure Ceiling" (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 (A) FINANCIAL STATEMENTS. The Borrower shall furnish to the Agent for distribution to the Lender (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 Early Termination Fee, the Term Loan B Fees, the Field Examination Fees, the UK Commitment Fee and the UK Revolving Credit Facility Fees. "Field Examination Fee" and "Field Examination Fees" have the meanings described in Section (C) FIELD EXAMINATION FEES. The Borrower shall pay to the Agent for the exclusive benefit of the Agent an annual field examination fee (the "Field Examination Fee"), which Field Examination Fee shall be payable quarterly in advance on the first day of each February, May, August and November of each year commencing on the first such date following the Closing Date, and continuing until the last such date prior to which all Obligations arising out of, or under, the Credit Facilities then outstanding have been paid in full. The Field Examination Fee shall be in the amount of Forty Thousand Dollars ($40,000) per annum, and shall also include the amount of all out-of-pocket expenses reasonably incurred by the Agent in connection with any field examination of Norwich and/or Berry UK for which the Agent has not been previously reimbursed. (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 Special Source Bond Documents, the UK Security Documents, and any other instrument, agreement or document previously, simultaneously or hereafter executed and delivered by the Borrower, any Guarantor, Berry UK, Norwich 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, Norwich and each of the Subsidiary Guarantors, 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. For purposes of calculating "Fixed Charges", the Agent and the Lenders agree that scheduled payments with respect to the Iowa Bond Letter of Credit Obligations shall reflect the permitted amortization of a portion of such Iowa Bond Letter of Credit Obligations pursuant to Section (ii) Notwithstanding the provisions of paragraph (a) above, as long as no Event of Default has occurred, any drawing under the Iowa Bond Letter of Credit - NB to redeem Iowa Bonds purchased with a drawing under the Iowa Bond Standby Credit Agreement, any drawing under the Nevada Bond Letter of Credit - NB to purchase Nevada Bonds, and any drawing under the South Carolina Bond Letter of Credit - NB to purchase South Carolina Bonds, in each case relating to 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 BIC or the Borrower, as appropriate, make payments of interest to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under Interest. (Interest), and the principal amount of each such Conversion Drawing is repaid in equal quarterly payments (i) over the remaining term to expiry of the Bond Letter of Credit Facility with respect to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB and (ii) over a period of ten (10) years with respect to the Iowa Bond Letter of Credit - NB; final payment of all outstanding amounts relating to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB to be made no later than expiry of the Bond Letter of Credit Facility or the Revolving Credit Termination Date, whichever is earlier, and final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of any Conversion Drawing under the Iowa Bond Letter of Credit - NB or the Revolving Credit Termination Date, whichever is earlier. In addition, the Agent and the Lenders agree that in the event the Iowa Bond Trustee draws on the Iowa Bond Letter of Credit on or about the business day preceding the expiration or termination of the Iowa Bond Letter of Credit, as contemplated by Section 505 of the Iowa Bond Trust Agreement (the "Draw"), the Iowa Bond Letter of Credit Obligations resulting from the Draw, shall not be payable ON DEMAND as would otherwise be required by this Section (E) PAYMENTS OF BOND LETTERS OF CREDIT., but shall be repaid by the Borrower in equal consecutive quarterly installments over a period of ten (10) years, commencing with the first day following the first full quarterly period after the Draw and continuing on the first day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter of Credit Obligations"); provided, that (A) there does not exist a Default or an Event of Default, (B) the Draw is not the result of an acceleration of the Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement and (C) the Draw is not the result of the occurrence of a "Determination of Taxability" (as defined in the Iowa Bond Trust Agreement). Interest shall be payable on the Amortizing Iowa Bond Letter of Credit Obligations to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under INTEREST. (Interest), with a final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of the Draw or the Revolving Credit Termination Date, whichever is earlier. (Payments of Bond Letters of Credit). "Fixed Charge Coverage Ratio" means as to the Borrower, Berry UK, Norwich and each of the Subsidiary Guarantors, on a consolidated basis, for the period of any determination thereof, the ratio of (a) EBITDA, less the aggregate amount of all non-financed Capital Expenditures for such period, to (b) Fixed Charges. "Funded Debt" means as to the Borrower, Berry UK, Norwich 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, Norwich 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), 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, Norwich 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 Norwich, 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 Norwich with the Borrower or any other Subsidiary Guarantor or (ii) any financial covenant relating to Berry UK, Norwich, 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, Norwich 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 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 Norwich, including, without limitation, the Special Source Bond Guaranty and 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, Norwich 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, Norwich or any Subsidiary Guarantor or for which the Borrower, Berry UK, Norwich 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, Norwich or any Subsidiary Guarantor, and any other contamination by Hazardous Materials for which the Borrower, Berry UK, Norwich 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 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 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, as the same may be amended, restated supplemented or otherwise modified. "Installment Payment Date" means the first day of each February, May, August and November of each calendar year. "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, Norwich 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 (v) Neither NationsBank 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 NationsBank or the Agent, as appropriate, shall have received an irrevocable written or telephonic notice (an "Interest Rate Election Notice") from the Borrower, Berry UK or Norwich, as appropriate, specifying the following information: (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. "Iowa Bond Letter of Credit - NB" means (a) that certain irrevocable letter of credit issued by the Agent for the account of the Borrower or BIC to replace the Iowa Bond Letter of Credit and (b) that certain standby credit line made available by the Agent to replace the Iowa Bond Standby Credit Agreement, as the same may be amended, restated, reissued, renewed, supplemented, replaced or otherwise modified at any time and from time to time. "Iowa Bond Letter of Credit" means that certain irrevocable letter of credit dated March 13, 1996, as amended by Amendment No. 1 dated March 13, 1996, issued by Fleet National Bank of Connecticut in the original amount of $6,025,810, for the account of BIC, for the benefit of State Street Bank and Trust Company, as trustee, and as security for the Iowa Bonds, as the same may be amended, restated, reissued, renewed, supplemented, replaced or otherwise modified at any time and from time to time. "Iowa 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 Iowa Bond Letter of Credit - NB and to pay certain fees, interest and other amounts payable to the Agent with respect to the Iowa Bond Letter of Credit - NB, as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "Iowa Bond Letter of Credit Agreement Documents - Bonds" 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 Iowa Bond Letter of Credit, the Iowa Bond Standby Credit Agreement (prior to the date on which the Agent is a party thereto), and/or any or all of the Iowa Bonds, all as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "Iowa Bond Letter of Credit Agreement Documents - NB" means the Iowa Bond Letter of Credit Agreement and any other instrument, agreement or document 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 Iowa Bond Letter of Credit - NB, the Iowa Bond Standby Letter of Credit Agreement (but only after such date as the Agent is a party thereto) and/or any or all of the Iowa Bond Letter of Credit Obligations, all as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "Iowa Bond Letter of Credit Obligations" means the collective reference to all Obligations of the Borrower under and with respect to the Iowa Letter of Credit - NB, the Iowa Bond Letter of Credit Agreement, and/or any of the Iowa Bond Letter of Credit Agreement Documents. "Iowa Bond Rollover Payments" means the collective reference to payments made to the bondholders or to the Iowa Trustee pursuant to a Draw or a Conversion Drawing. "Iowa Bond Standby Credit Agreement" means that certain Standby Credit Agreement among BIC, The First National Bank of Boston, as prior Iowa Bond Trustee, and Barclays Bank, PLC, New York Branch, dated as of February 1, 1995; all of the obligations and rights of Barclays Bank PLC, New York Branch, having been assigned to and assumed by Fleet National Bank of Connecticut pursuant to an Amendment, Assignment and Assumption Agreement dated March 13, 1996, by and among BIC, Fleet Capital Corporation, Barclays Bank PLC, New York Branch, The First National Bank of Boston, as remarketing agent, and State Street Bank and Trust Company, as Iowa Bond Trustee, as the same may be amended, restated, reissued, renewed, supplemented, replaced or otherwise modified at any time and from time to time. The Agent has delivered a standby line of credit to replace the line of credit described in the Iowa Bond Standby Credit Agreement and a new Iowa Bond Standby Credit Agreement has been executed and delivered among the Agent, BIC and the Iowa Bond Trustee and other necessary persons, if any, and all references to the term Iowa Bond Standby Credit Agreement shall be to such replacement agreement to which the Agent is a party, as the same may be amended, restated, reissued, supplemented, replaced or otherwise modified at any time and from time to time. "Iowa Bond Trust Agreement" means that certain loan and trust agreement dated as of August 30, 1988 by and among the Iowa Bond Trustee, The City of Iowa Falls, Iowa, Genpak Corporation and Canadian Imperial Bank of Commerce (New York), relating to the Iowa Bonds, as supplemented by the Supplemental Agreement dated as of September 27, 1990, and as amended by the Amendment to Loan and Trust Agreement dated as of February 12, 1992, and the Second Amendment to Loan and Trust Agreement dated as of April 21, 1994, and as subsequently amended, restated, supplemented or otherwise modified at any time and from time to time. "Iowa Bond Trustee" means State Street Bank and Trust Company, and its successors and assigns, as trustee under the Iowa Bond Trust Agreement. "Iowa Bonds" means the City of Iowa Falls Flexible Mode Industrial Development Revenue Refunding Bonds (Berry Iowa Corporation Project), Series 1988, issued by the City of Iowa Falls, Iowa in the original aggregate principal amount of Five Million Four Hundred Thousand Dollars ($5,400,000). "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. "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 (A) 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, each a "Letter of Credit" and collectively the "Letters of Credit") from the Agent from time to time from the First 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"). (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. "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 (A) 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, each a "Letter of Credit" and collectively the "Letters of Credit") from the Agent from time to time from the First 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"). (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 THE LETTER OF CREDIT FACILITY. (Letter of Credit Facility). "Letter of Credit Fee" and "Letter of Credit Fees" have the meanings described in Section (B) LETTER OF CREDIT FEES. (Letter of Credit Fees). "Letter of Credit Fronting Fee" and "Letter of Credit Fronting Fees" have the meanings described in Section (B) LETTER OF CREDIT FEES. (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. "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 (B) PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN. (Procedure for Making Advances). "Lockbox" has the meaning described in Section (H) 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. (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 NationsBank on the first day of such Interest Period to be that which expresses the prevailing cost to NationsBank 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. "NationsBank" means NationsBank, N.A. and its successors and assigns and shall mean NationsBank, acting through its Sterling LIBOR Lending Office with respect to all matters relating to the UK Credit Facilities. "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. 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 INDEMNIFICATION. shall survive the payment in full of the Obligations and the termination of this Agreemen (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. "Net Proceeds" means gross proceeds (cash and non-cash) or other consideration paid to, or received by, the Borrower, Norwich 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 - NB" means that certain irrevocable letter of credit issued by the Agent for the account of the Borrower to replace the Nevada Bond Letter of Credit, 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" means that certain irrevocable letter of credit dated April 21, 1995, issued by Barclays Bank PLC in the original stated amount of $6,271,233, for the account of the Borrower, 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 - NB and to pay certain fees, interest and other amounts payable to the Agent with respect to the Nevada Bond Letter of Credit - NB, 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 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 Agreement Documents - NB" means the Nevada Bond Letter of Credit Agreement and any other instrument, agreement or document 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 Letter of Credit - NB and/or any or all of the Nevada Bond Letter of Credit Obligations, 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 - NB, 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). "Non-Ratable Loan" means an advance under the Revolving Loan made by the Agent in accordance with the provisions of Section (III) NON-RATABLE LOANS AND PAYMENTS. Between Settlement Dates, the Agent shall request and NationsBank may (but shall not be obligated to) advance to the Borrower out of NationsBank's own funds, the entire principal amount of any advance under the Revolving Loan requested or deemed requested pursuant to Section (B) PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN. (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 NationsBank shall be deemed to be a purchase by NationsBank 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 NationsBank. Upon demand by NationsBank, with notice to the Agent, each other Lender shall pay to NationsBank, 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 NationsBank for such application, and such payment to and retention by NationsBank 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 advance under the Revolving Loan (including the repurchase of participations in Non-Ratable Loans) made by NationsBank. Upon demand by another Lender, with notice thereof to the Agent, NationsBank 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 NationsBank in such other Lender's Revolving Credit Pro Rata Share of any Non-Ratable Loans) paid only to NationsBank by the Agent. (Settlement Procedures as to Revolving Loan). "Norwich" means Norwich Injection Moulders Limited, a company organized and existing under the laws of England, and its successors and assigns. "Norwich Stock" means all capital stock issued by Norwich acquired or to be acquired by Berry UK, all in accordance with the Norwich Stock Purchase Transaction, together with any and all proceeds and products thereof. "Norwich Stock Purchase Agreement" means that certain Agreement for the Sale and Purchase of the Entire Issued Share Capital of Norwich Injection Moulders Limited dated as of July 1, 1998 by and among Berry UK, the Borrower and the shareholders of Norwich, 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. "Norwich Stock Purchase Documents" means collectively the Norwich Stock Purchase Agreement and any and all other agreements, documents or instruments, previously, now or hereafter executed and delivered by Berry UK, the Borrower, or any other Person in connection with the Norwich Stock Purchase Transaction, as the same may from time to time be amended, restated, supplemented and modified. "Norwich Stock Purchase Transaction" means the acquisition of all issued and outstanding capital stock of Norwich by Berry UK in accordance with the provisions of the Norwich Stock Purchase Agreement. "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, Norwich and/or Berry UK to the Lenders, NationsBank 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, 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, Norwich 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 TERMS OF BOND LETTERS OF CREDIT. (Terms of Bond Letters of Credit). "Outstanding Letter of Credit Obligations" has the meaning described in Terms of Letters of Credit; Post-Expiration Date Letters of Credit. (Terms of Letters of Credit). "PAC" means PackerWare Acquisition Corporation, a corporation organized and existing under the laws of the State of Kansas, and its successors and assigns. "PackerWare" means PackerWare Corporation, a corporation organized and existing under the laws of the State of Kansas, and its successors and assigns. "PackerWare Merger Agreement" means that certain Agreement and Plan of Reorganization dated as of January 14, 1997 by and among the Borrower, PAC, PackerWare and the shareholders of PackerWare immediately prior to consummation of the PackerWare Merger Transaction, as amended, restated, supplemented or otherwise modified. "PackerWare Merger Agreement Documents" means collectively the PackerWare Merger Agreement and any and all other agreements, documents or instruments (together with any and all amendments, modifications, and supplements thereto, restatements thereof, and substitutes therefor) previously, now or hereafter executed and delivered by the Borrower, PackerWare, PAC, or any other Person in connection with the PackerWare Merger Transaction. "PackerWare Merger Transaction" means the merger of PAC with and into PackerWare in accordance with the provisions of the PackerWare Merger Agreement. "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, Norwich 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 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 (G) LINE OF BUSINESS. The Borrower, Berry UK and Norwich will continue and, will cause their Subsidiaries to continue, to engage substantially only in the business of manufacturing, marketing, selling and distributing plastic products.. (Line of Business) or in a business reasonably related thereto; 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 the lesser of: (A)the product of (A) the actual EBITDA for the Borrower, Norwich, Berry UK and each of the Subsidiary Guarantors, calculated on a consolidated basis, for the then preceding twelve (12) month period after giving effect to such Subject Transaction (subject to such Pro-forma adjustments as shall be acceptable to the Agent in its sole and absolute discretion), and (B) five (5), or (B)Seven Million Dollars ($7,000,000), (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 First Closing Date 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, 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: (vi)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 Berry UK and its acquisition of Norwich, the Borrower shall be required only to pledge sixty-five percent (65%) of the stock of Berry UK, as security for all of the Obligations, excluding the UK Obligations, and to pledge one hundred percent (100%) of the stock of Berry UK, as security for all of the UK Obligations, 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, (vii)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 (B) SUBSIDIARIES. (Subsidiaries), except that neither Berry UK nor Norwich shall be designated or required to qualify as a Subsidiary Guarantor, (viii)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 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, except that in connection with the Norwich Stock Purchase Transaction, availability under the Revolving Loan need only be in an amount at least equal to Fifteen Million Dollars ($15,000,000), (ix)all legal matters incident to the Subject Transaction shall be acceptable to the Agent in its reasonable discretion, (x)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, (xi)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, (xii)unless otherwise agreed by the Requisite Lenders, no Subject Transaction shall be permitted by the terms of this Agreement if the Borrower, Berry UK, Norwich 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, and (xiii)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 given fiscal year shall not exceed Seven Million Dollars ($7,000,000); and (z)the Venture Stock Purchase/Merger Transaction. 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. Notwithstanding the foregoing, the Agent and the Lenders agree that the assets and properties of Berry UK and Norwich shall be included in the UK Borrowing Base subject to the eligibility criteria set forth in the definitions of Eligible UK Inventory and Eligible UK Receivables. "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 Five Hundred Thousand Dollars ($500,000) during any fiscal year, and (ii)none of the Assets sold under this clause (a) constitute molds used in the business of the Borrower, Norwich, Berry UK or any Subsidiary Guarantor. (b)the sale of, or sale or assignment of lease with respect to, the property owned by Venture Southeast located in Anderson County, South Carolina; (c)sales of Inventory in the ordinary course of business, (d)the licensing of Patents, Trademarks and/or Copyrights, in the ordinary course of business, (e)dispositions of worn, used, surplus or obsolete Equipment in the ordinary course of business, (f)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, Norwich 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, (g)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 Norwich and the Borrower or any Subsidiary Guarantor shall be permitted without the prior written consent of the Agent, except that Berry UK and/or Norwich 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. (h)the sale of any Fixed or Capital Assets acquired by the Borrower, Berry UK, Norwich 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, (i)the sale of molds by the Borrower, Berry UK, Norwich 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, (j)the termination of the lease for PackerWare's Reno, Nevada location; provided, that all Assets of PackerWare at such location are transferred to one or more locations of the Borrower and/or any Subsidiary Guarantor such that the Agent and the Lenders would have a properly perfected Lien on, and security interest in, such Assets, (k)the sale, transfer or other conveyance of the issued and outstanding capital stock of Venture Southeast and Venture Midwest to the Borrower, as contemplated by the Venture Stock Purchase/Merger Transaction, and (l)transfers made as part of the South Carolina IRB Lease Transfers. "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, Norwich 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, Norwich 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 (V) 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 3.7SUBSIDIARY GUARANTOR ASSETS. (Subsidiary Guarantor Assets) and the terms of (J) LIMITATIONS ON JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS.(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 (V) PERFECTION AND PRIORITY OF COLLATERAL.. 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, Norwich 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 (vii) Indebtedness for Borrowed Money incurred by the Borrower, Norwich, 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, Norwich, 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 (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 Five Hundred Thousand Dollars ($500,000); (Indebtedness); (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 PackerWare through the PackerWare Merger Transaction by the Borrower, (b) the acquisition of one hundred percent (100%) of the capital stock of Venture Holdings pursuant to the Venture Stock Purchase/Merger Transaction, (c) the refinancing and payment of all obligations of the Borrower and/or any of the Subsidiary Guarantors to any lenders with respect to any Indebtedness for Borrowed Money existing as of the First Closing Date, (d) the refinancing and payment of all obligations of Venture Holdings, Venture Southeast and/or Venture Midwest to any lenders with respect to any Indebtedness for Borrowed Money existing as of the date of the Second Closing, (e) 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 PackerWare Merger, the Venture Stock Purchase/Merger Transaction and/or the Norwich Stock Purchase Transaction, (f) the payment of expenses incurred in the ordinary course of business of the Borrower or any Subsidiary Guarantor, (g) the acquisition of any Permitted Acquisition as and to the extent permitted by the provisions of this Agreement, (h) the payment of all costs and expenses reasonably incurred in connection with the closing and consummation of a Permitted Acquisition, (i) with respect to the UK Credit Facilities and Term Loans B, the acquisition of one hundred percent (100%) of the capital stock of Norwich through the Norwich Stock Purchase Transaction and (j) 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 Norwich. "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. "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 TERMS OF LETTERS OF CREDIT; POST-EXPIRATION DATE LETTERS OF CREDIT. (Terms of Letters of Credit). "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, Norwich and the Subsidiary Guarantors, on a consolidated basis, the ratio of (a) Funded Debt to (b) EBITDA. "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 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. NationsBank agrees that if at any time NationsBank sells one hundred percent (100%) of all of its Commitments, NationsBank shall resign as Agent and the remaining Lenders shall select a replacement Agent in accordance with the provisions of this Agreement. In addition, NationsBank agrees that for so long as NationsBank is the Agent, unless otherwise agreed by the Lenders, NationsBank shall continue to hold a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of the Lender (other than NationsBank) 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 Assignments by Lenders., the Borrower, Berry UK and Norwich 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. (Assignments by Lenders). "Pro-forma Financial Projections" has the meaning described in Section (L) 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 immediately after consummation of the Norwich 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 Norwich 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 the consolidated financial condition of the Borrower and the Subsidiaries as of immediately after consummation of the Norwich Stock 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. (Pro-forma Financial Statements). "Pro-forma Financial Statements" has the meaning described in Section (l) 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 immediately after consummation of the Norwich 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 Norwich 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 the consolidated financial condition of the Borrower and the Subsidiaries as of immediately after consummation of the Norwich Stock 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. (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, Letter of Credit Obligations and Special Source Bond Obligations, owing to that Lender by the aggregate unpaid principal amount of all Loans, Bond Letter of Credit Obligations, Letter of Credit Obligations and Special Source Bond Obligations, then outstanding; or if no Loans, Bond Letter of Credit Obligations, Letter of Credit Obligations or Special Source Bond Obligations are outstanding, by 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, Norwich 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 Berry UK 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 (A) 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". (Revolving Credit Facility). "Revolving Credit Facility" means the facility established by the Lenders pursuant to SECTION 2.1 THE REVOLVING CREDIT FACILITY. (Revolving Credit Facility). "Revolving Credit Note" and "Revolving Credit Notes" have the meanings described in Section (E) 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 Agreemen (Revolving Credit Notes). "Revolving Credit Optional Reduction" and "Revolving Credit Optional Reductions" have the meanings described in Section (L) OPTIONAL REDUCTION OF REVOLVING CREDIT COMMITTED AMOUNT (Optional Reduction of Revolving Credit). "Revolving Credit Pro Rata Share" has the meaning described in Section (B) PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN. (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. Upon the occurrence of any Event of Default, the Agent and/or NationsBank, 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: (Remedies) or otherwise. "Revolving Credit Unused Line Fee" and "Revolving Credit Unused Line Fees" have the meanings described in Section (J) REVOLVING CREDIT UNUSED LINE FEE. The Borrower shall pay to the Agent for the ratable benefit of the Lenders a quarterly Revolving Credit Facility fee (collectively, the "Revolving Credit Unused Line Fees" and individually, a "Revolving Credit Unused Line Fee") in an amount equal to thirty (30) basis points 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 undisbursed portion of the Total Revolving Credit Committed Amount,, each as in effect from time to time accruing during each quarterly period. The accrued and unpaid Revolving Credit Unused Line Fee shall be paid by the Borrower to the Agent on the first day of each quarter, in arrears, commencing on the first such date following the date hereof, and on the Revolving Credit Termination Date. (Revolving Credit Unused Line Fee). "Revolving Loan" has the meaning described in Section (A) 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". (Revolving Credit Facility). "Revolving Loan Account" has the meaning described in SECTION (I) 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. (Revolving Loan Account). "Revolving Loan Mandatory Prepayment" and "Revolving Loan Mandatory Prepayments" have the meanings described in Section (F) MANDATORY PREPAYMENTS OF REVOLVING LOAN. Subject to the provisions of Section (D) INDEMNITY. (Indemnity) and in addition to any mandatory prepayment required by the provisions of Section (C) MANDATORY PREPAYMENTS OF TERM LOANS A. (Term Loan Mandatory Prepayments), upon the request of the Agent pursuant to Section (C) BORROWING BASE. (Borrowing Base) or Section 2.1.13 (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 2.1.13, as applicable. (Mandatory Prepayments). "Revolving Loan Optional Prepayment" and "Revolving Loan Optional Prepayments" have the meanings described in Section (G) OPTIONAL PREPAYMENTS OF REVOLVING LOAN. Subject to the provisions of Section (D) INDEMNITY. (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 Agreemen (Optional Prepayments of Revolving Loan). "RIGHT OF FIRST REFUSAL NOTICE" HAS THE MEANING DESCRIBED IN 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. NationsBank agrees that if at any time NationsBank sells one hundred percent (100%) of all of its Commitments, NationsBank shall resign as Agent and the remaining Lenders shall select a replacement Agent in accordance with the provisions of this Agreement. In addition, NationsBank agrees that for so long as NationsBank is the Agent, unless otherwise agreed by the Lenders, NationsBank shall continue to hold a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of the Lender (other than NationsBank) 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 ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich 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. (Assignments by Lenders). "Second Closing Date" means August 29, 1997. "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 (a) that certain security agreement dated as of the First Closing Date from PackerWare, BIC, BTP, Berry Sterling and AeroCon, Inc. to the Agent for the benefit of the Lenders, ratably, and the Agent, (b) that certain security agreement dated May 13, 1997 from Berry Design to the Agent for the benefit of the Lenders, ratably, and the Agent, and (c) that certain security agreement dated as of the Second Closing Date from Berry Venture, Venture Southeast and Venture Midwest, 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 and the Assignment of Trademarks, the Special Source Security Agreement, 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 PackerWare immediately prior to consummation of the PackerWare Merger, all of the shareholders of Venture Holdings immediately prior to consummation of the Venture Stock Purchase/Merger Transaction and all shareholders of Norwich immediately prior to consummation of the Norwich 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. "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 (I) IN GENERAL. To the extent and in the manner hereinafter provided in this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN., 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. (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 (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN. in accordance with the Settlement Report delivered by the Agent pursuant to the provisions of this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN. 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. (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 (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN. (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. "South Carolina Bond Letter of Credit" means that certain irrevocable letter of credit dated April 20, 1995, issued by Bank One, Cleveland, NA in the original amount of $8,427,637, for the account of Venture Southeast, for the benefit of Bank One Trust Company, NA, as trustee, and as security for the South Carolina Bonds, as the same may be amended, restated, reissued, renewed, supplemented, replaced or otherwise modified at any time and from time to time. "South Carolina Bond Letter of Credit - NB" means that certain irrevocable letter of credit issued or to be issued by the Agent for the account of the Borrower or Venture Southeast as security for the South Carolina Bond Letter of Credit, as the same may be amended, restated, reissued, renewed, supplemented, replaced or otherwise modified at any time and from time to time. Subsequent to the date hereof, but on or before the expiration date of the South Carolina Bond Letter of Credit, the Agent intends to issue an irrevocable letter of credit to replace the South Carolina Bond Letter of Credit, in which case the term "South Carolina Bond Letter of Credit - NB" shall mean such replacement letter of credit, as the same may be amended, restated, reissued, renewed, supplemented, replaced or otherwise modified at any time and from time to time. "South Carolina 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 South Carolina Bond Letter of Credit - NB and to pay certain fees, interest and other amounts payable to the Agent with respect to the South Carolina Bond Letter of Credit - NB, as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "South Carolina Bond Letter of Credit Agreement Documents - Bonds" 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 South Carolina Bond Letter of Credit and/or any or all of the South Carolina Bonds, all as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "South Carolina Bond Letter of Credit Agreement Documents - NB" means the South Carolina Bond Letter of Credit Agreement and any other instrument, agreement or document 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 South Carolina Bond Letter of Credit - NB and/or any or all of the South Carolina Bond Letter of Credit Obligations, all as the same may be amended, restated, supplemented, replaced or otherwise modified at any time and from time to time. "South Carolina Bond Letter of Credit Obligations" means the collective reference to all Obligations of the Borrower under and with respect to the South Carolina Letter of Credit - NB, the South Carolina Bond Letter of Credit Agreement, and/or any of the South Carolina Bond Letter of Credit Agreement Documents. "South Carolina Bond Trust Agreement" means that certain trust indenture dated as of April 1, 1995 by and among the South Carolina Bond Trustee and the South Carolina Jobs - Economic Development Authority relating to the South Carolina Bonds, as amended, restated, supplemented or otherwise modified at any time and from time to time. "South Carolina Bond Trustee" means Bank One Trust Company, NA, and its successors and assigns, as trustee under the South Carolina Bond Trust Agreement. "South Carolina Bonds" means the South Carolina Jobs - Economic Development Authority, Adjustable Rate Bonds, Series 1995 (Venture Packaging, Inc. Project) issued by the South Carolina Jobs - Economic Development Authority in the original aggregate principal amount of Eight Million Three Hundred Twenty-five Thousand Dollars ($8,325,000). "South Carolina IRB" means the Anderson County, South Carolina Industrial Revenue Bonds, Series 1995 (Venture Packaging Southeast, Inc. Project). "South Carolina IRB Lease Agreement" means that certain First Amended Lease Agreement dated as of January 18, 1996, between Anderson County, South Carolina and Venture Holdings. "South Carolina IRB Lease Purchase Option" means the option of Venture Southeast to purchase the assets subject to the South Carolina IRB Lease Agreement pursuant to Section 10.02 of the South Carolina IRB Lease Agreement. "South Carolina IRB Lease Transfers" means transfers of capital assets related to the real property covered by the Deed of Trust - Anderson and, pursuant to the terms of the South Carolina IRB Lease Agreement required to be transferred to the lessor and leased to the lessee under the South Carolina IRB Lease Agreement. "Special Source Bond" means that certain $875,000 Anderson County, South Carolina Special Source Revenue Bond, Series 1995 (Venture Packaging Southeast, Inc. Project) (the "Special Source Bond"). "Special Source Bond Assignment" means that certain Assignment, Assumption and Consent Agreement by and among the Borrower, Bank One, Cleveland, N.A. and NationsBank dated as of August 29, 1997, as the same may be amended, restated, supplemented or otherwise modified at any time and from time to time. "Special Source Bond Commitment" means the agreement of the Agent to purchase the Special Source Bond and the agreement of each Lender to purchase a participating interest in the Special Source Bond Obligations, all subject to and in accordance with the provisions of this Agreement. "Special Source Bond Documents" means any and all agreements, documents and instruments which evidence, secure, guaranty or otherwise relate to the Special Source Bond and/or any or all of the Special Source Bond Obligations, including, without limitation, the Special Source Bond, the Special Source Bond Guaranty, and the Special Source Bond Security Agreement, as the same may be amended, restated, supplemented or otherwise modified at any time and from time to time. "Special Source Bond Facility" has the meaning given such term in SECTION 2.6 THE SPECIAL SOURCE BOND FACILITY..1 (The Special Source Bond Facility). "Special Source Bond Guaranty" means that certain Guaranty of Payment Agreement - Bond Purchase Obligations dated as of August 29, 1997 from the Borrower and the Subsidiary Guarantors, as the same may be amended, restated, supplemented or otherwise modified. "Special Source Bond Interest Rate" shall have the meaning given such term in Section (B) CURRENT TERMS OF SPECIAL SOURCE BOND.(Current Terms of Special Source Bond). "Special Source Bond Issuer" means Anderson County, South Carolina, and its successors and assigns. "Special Source Bond Maturity Date" shall have the meaning given such term in Section (B) CURRENT TERMS OF SPECIAL SOURCE BOND.(Current Terms of Special Source Bond). "Special Source Bond Obligations" means any and all obligations of the Borrower and each of the Subsidiary Guarantors under and in connection with the Special Source Bond, including, without limitation, principal and interest. "Special Source Bond Security Agreement" means that certain Security Agreement dated as of August 29, 1997 from the Borrower and the Subsidiary Guarantors, as the same may be amended, restated, supplemented or otherwise modified. "Special Source Bond Settlement Date" has the meaning given such term in Section (D)PARTICIPATIONS IN THE SPECIAL SOURCE BOND OBLIGATIONS.(Participations in the Special Source Bond Obligations). "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 Norwich 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 Norwich 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 (d)no Sterling Interest Period greater than 30 days may be selected by Berry UK or Norwich 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 Berry UK for the UK Term Loan. "Sterling LIBOR Lending Office" means with respect to NationsBank such branch or office of NationsBank as designated by NationsBank in the United Kingdom from time to time as the branch or office through which the Sterling LIBOR Loans 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 stock pledge, assignment and security agreement dated as of the First Closing Date from the Borrower to the Agent for the benefit of the Lenders ratably and the Agent, (b) that certain stock pledge, assignment and security agreement dated as of May 13, 1997 from the Borrower to the Agent for the benefit of the Lenders ratably and the Agent, (c) that certain stock pledge, assignment and security agreement dated as of the Second Closing Date from the Borrower to the Agent for the benefit of the Lenders ratably and the Agent, and (d) the UK Stock Pledge Agreement, 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 NationsBank, a pledge and assignment of one hundred percent (100%) of the capital stock of Berry UK (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, a pledge and assignment of sixty-five percent (65%) of the capital stock of Berry UK. "Stockholder's Equity" means as to the Borrower, Berry UK, Norwich 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. "Subordinated Debt" means 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). "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 (D) INDEBTEDNESS. Neither the Borrower, Berry UK nor Norwich 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 (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 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. NationsBank agrees that if at any time NationsBank sells one hundred percent (100%) of all of its Commitments, NationsBank shall resign as Agent and the remaining Lenders shall select a replacement Agent in accordance with the provisions of this Agreement. In addition, NationsBank agrees that for so long as NationsBank is the Agent, unless otherwise agreed by the Lenders, NationsBank shall continue to hold a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of the Lender (other than NationsBank) 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 ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich 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. (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 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 (B) SUBSIDIARIES. (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, 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, and all of their respective successors and assigns. "Tangible Capital Funds" means as to the Borrower, Berry UK, Norwich 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, Norwich 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 THE TERM LOAN A FACILITY. (Term Loan A Facility). "Term Loan B" and "Term Loans B" have the meanings described in Section (A) 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 Commitments). "Term Loan A Commitment" and "Term Loan A Commitments" have the meanings described in Section (A) 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 Commitments). "Term Loan B Commitment" and "Term Loan B Commitments" have the meanings described in Section (A) 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 Commitments). "Term Loan A Committed Amount" has the meaning described in Section (A) 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 Commitments). "Term Loan B Committed Amount" has the meaning described in Section (A) 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 Commitments). "Term Loan A Facility" means the facility established by the Lenders pursuant to THE TERM LOAN A FACILITY. (Term Loan A Facility). "Term Loan B Facility" means the facility established by the Lenders pursuant to TERM LOAN B FACILITY. (Term Loan B Facility). "Term Loan B Fee" and "Term Loan B Fees" have the meaning described in Section (E) TERM LOAN B FEES. (Term Loan B Fees). "Term Loan B Increase" has the meaning described in Section (A) TERM LOAN B COMMITMENTS. (Term Loan B Commitments) "Term Loan A Mandatory Prepayment" and "Term Loan A Mandatory Prepayments" have the meanings described in Section (C) MANDATORY PREPAYMENTS OF TERM LOANS A. Subject to the provisions of (D) INDEMNITY. (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: (Mandatory Prepayments of Term Loan A). "Term Loan B Mandatory Prepayment" and "Term Loan B Mandatory Prepayments" have the meanings described in Section (C) MANDATORY PREPAYMENTS OF TERM LOAN B. Subject to the provisions of (D) INDEMNITY. (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 (A) FINANCIAL STATEMENTS. The Borrower shall furnish to the Agent for distribution to the Lenders: (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 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. Notwithstanding anything to the contrary contained herein, the Borrower shall not be required to pay an Early Termination Fee as the result of a Term Loan B Mandatory Prepayment. (Mandatory Prepayments of Term Loan B). "Term Loan A Optional Prepayment" and "Term Loan A Optional Prepayments" have the meanings described in Section OPTIONAL PREPAYMENTS OF TERM LOANS A. Subject to the provisions of (D) INDEMNITY. (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. (Optional Prepayments of Term Loans A). "Term Loan B Optional Prepayment" and "Term Loan B Optional Prepayments" have the meanings described in Section (D) OPTIONAL PREPAYMENTS OF TERM LOANS B. Subject to the provisions of (D) INDEMNITY. (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. (Optional Prepayments of Term Loan B). "Term Loan A Pro Rata Share" has the meaning described in THE TERM LOAN A FACILITY. (Term Loan A Facility). "Term Loan B Pro Rata Share" has the meaning described in Section (A) 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 Commitments). "Term Loan A Note" and "Term Loan A Notes" have the meaning described in Section (B) AMORTIZATION OF TERM LOANS A; THE TERM LOAN A NOTES. (Amortization of Term Loans A). "Term Loan B Note" and "Term Loan B Notes" have the meaning described in Section (B) AMORTIZATION OF TERM LOANS B; THE TERM LOAN B NOTES. (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 (A) 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". (Revolving Credit Facility). "Total Term Loan A Committed Amount" has the meaning described in Section (A) 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 Commitments). "Total Term Loan B Committed Amount" has the meaning described in Section (A) 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 Commitments). "Trademarks" 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) 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 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 (C) UK BORROWING BASE. (UK Borrowing Base). "UK Borrowing Base Deficiency" has the meaning described in Section (C) UK BORROWING BASE. (UK Borrowing Base). "UK Borrowing Base Report" has the meaning described in Section (D) UK BORROWING BASE REPORT. (UK Borrowing Base Report). "UK Collateral" means the collective reference to all property of Norwich 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 Commitment Fee" has the meaning described in Section (D) UK COMMITMENT FEE. (the UK Commitment Fee). "UK Credit Facilities Guaranty" means (i) the guaranty of payment of the UK Obligations to NationsBank from the Parent, the Borrower and each Subsidiary Guarantor and (ii) the guaranty of payment of the UK Obligations of Berry UK to NationsBank from Norwich. 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 Norwich 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 Norwich only, an amount equal to fifty percent (50%) of the sum of (a) EBITDA, less (b) non- financed Capital Expenditures permitted by Section (F) CAPITAL EXPENDITURES. Except for Permitted Acquisitions and permitted reinvestments of Permitted Asset Dispositions, neither the Borrower, Berry UK nor Norwich will or will permit any Subsidiary to, directly or indirectly, make any Capital Expenditures in the aggregate for the Borrower, Berry UK, Norwich and their respective Subsidiaries (taken as a whole) in amount which exceed the following amounts at any time during the following fiscal years (for each fiscal year, the "Capital Expenditure Ceiling" (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 (A) FINANCIAL STATEMENTS. The Borrower shall furnish to the Agent for distribution to the Lender (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 Norwich to NationsBank 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. "UK Revolving Credit Commitment" means the agreement of a 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 (A) UK REVOLVING CREDIT FACILITY. (UK Revolving Credit Facility). "UK Revolving Credit Facility" means the facility established by NationsBank pursuant to Section (A) UK REVOLVING CREDIT FACILITY. (UK Revolving Credit Facility). "UK Revolving Credit Note" has the meaning described in Section (E) UK REVOLVING CREDIT NOTE. (UK Revolving Credit Notes). "UK Revolving Credit Pro Rata Share" has the meaning described in Section (B) PROCEDURE FOR MAKING ADVANCES UNDER THE UK REVOLVING LOAN. (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 (I) UK REVOLVING CREDIT FACILITY FEE. (UK Revolving Credit Facility Fee). "UK Revolving Loan" has the meaning described in Section (A) UK REVOLVING CREDIT FACILITY. (UK Revolving Credit Facility). "UK Revolving Loan Account" has the meaning described in Section (H) UK REVOLVING LOAN ACCOUNT. (UK Revolving Loan Account). "UK Revolving Loan Mandatory Prepayment" and "UK Revolving Loan Mandatory Prepayments" have the meanings described in Section (F) MANDATORY PREPAYMENTS OF UK REVOLVING LOAN. (Mandatory Prepayments of UK Revolving Loan). "UK Revolving Loan Optional Prepayment" and "UK Revolving Loan Optional Prepayments" have the meanings described in Section (G) OPTIONAL PREPAYMENTS OF UK REVOLVING LOAN. (Optional Prepayments of UK Revolving Loan). "UK Security Agreement" means those certain debentures from Berry UK and Norwich dated the date of this Agreement pursuant to which a Lien is granted to NationsBank 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 granted to, or for the benefit of, NationsBank on any real or personal property of Berry UK and/or Norwich solely to secure all or any portion of the UK Obligations, including, obligations of Norwich 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 Closing Date from the Borrower to NationsBank, in its capacity as Agent and in its individual capacity, 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 NationsBank, 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 Berry UK and grants, pledges and assigns to NationsBank, as security for the UK Obligations, a pledge and assignment of one hundred percent (100%) of the capital stock of Berry UK, 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 2.8UK TERM LOAN FACILITY. (UK Term Loan Facility). "UK Term Loan Commitment" and "UK Term Loan Commitments" have the meanings described in Section (A) UK TERM LOAN COMMITMENTS. (UK Term Loan Commitments). "UK Term Loan Committed Amount" has the meaning described in Section (A) UK TERM LOAN COMMITMENTS. (UK Term Loan Commitments). "UK Term Loan Facility" means the facility established by NationsBank 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. "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 Ohio, and its successors and assigns. "Venture Southeast" means Venture Packaging Southeast, Inc., a corporation organized and existing under the laws of the State of South Carolina, and its successors and assigns. "Venture Stock" means all capital stock issued by Venture Holdings acquired or to be acquired by Berry Venture, all in accordance with the Venture Stock Purchase/Merger Transaction, together with any and all proceeds and products thereof. "Venture Stock Purchase/Merger Agreement" means that certain Agreement and Plan of Merger dated as of August 29, 1997 by and among the Borrower, Berry Venture, Venture Holdings, the Parent, Venture Southeast, Venture Midwest and the shareholders of Venture Holdings, 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. "Venture Stock Purchase/Merger Documents" means collectively the Venture Stock Purchase Agreement and any and all other agreements, documents or instruments, previously, now or hereafter executed and delivered by Venture Holdings, Venture Southeast, Venture Midwest, Berry Venture, the Borrower, or any other Person in connection with the Venture Stock Purchase/Merger Transaction, as the same may from time to time be amended, restated, supplemented and modified. "Venture Stock Purchase/Merger Transaction" means (a the acquisition of all issued and outstanding capital stock of Venture Holdings by Berry Venture through a merger, (b) the merger of Venture Holdings into Berry Venture, (c) the transfer to the Borrower of all issued and outstanding stock of Venture Southeast and/or Venture Midwest by Berry Venture and/or Venture Holdings, as contemplated by the Venture Stock Purchase/Merger Agreement, and (d) the merger, consolidation, dissolution or liquidation of Berry Venture. "Virginia Design" means Virginia Design Packaging Corp., a corporation organized and existing under the laws of the Commonwealth of Virginia, and its successors and assigns. "Virginia Design NewCo" means Berry Plastics Design Corporation, a corporation organized and existing under the laws of the State of Delaware, and its successors and assigns. "Virginia Design Purchase Agreement" means that certain asset purchase agreement dated as of May 13, 1997 by and among the Borrower, Virginia Design NewCo, Virginia Design and the shareholders of Virginia Design, 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. "Virginia Design Purchase Agreement Documents" means collectively the Virginia Design Purchase Agreement and any and all other agreements, documents or instruments, previously, now or hereafter executed and delivered by Virginia Design, Virginia Design NewCo, the Borrower, or any other Person in connection with the Virginia Design Purchase Agreement Transaction, as the same may from time to time be amended, restated, supplemented and modified. "Virginia Design Purchase Agreement Transaction" means the asset purchase transaction contemplated by the Virginia Design Purchase Agreement. "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 FINANCIAL COVENANTS. (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 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. (A)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":
Lender Revolving Credit Committed Revolving Credit Pro Rata Share Amount Fleet $11,926,000 23.8525% GE Capital $14,607,500 29.215% NationsBank $14,607,500 29.215% Heller $8,859,000 17.7175% Total Revolving Credit Committed $50,000,000 100% Amount
Article INeither 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: (i)the outstanding principal balance of each Lender's Pro Rata Share of the Revolving Loan, the Letter of Credit Obligations, and the Special Source Bond Obligations would not exceed the lesser of (i) such Lender's Pro Rata Share of the Revolving Loan, the Letter of Credit Obligations, and the Special Source Bond Obligations or (ii) such Lender's Pro Rata Share of the Borrowing Base; and, (ii)the aggregate outstanding principal balance of the Revolving Loan, all Letter of Credit Obligations, and the Special Source Bond 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, all Special Source Bond Obligations and the UK Revolving Loan cannot exceed the Total Revolving Credit Committed Amount. (B)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 (D) INDEMNITY. (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. 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 follow (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 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 DISSEMINATION OF INFORMATION. The Agent will provide the Lenders with any information received by the Agent from the Borrower, Berry UK or Norwich 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 (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. (C)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) Twenty-five Million Dollars ($25,000,000). 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 (D) BORROWING BASE REPORT. (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 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. (D) 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 (D) BORROWING BASE REPORT., 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; provided, that the Agent 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 the Agent. (E)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. (F)MANDATORY PREPAYMENTS OF REVOLVING LOAN. Subject to the provisions of Section (D) INDEMNITY. (Indemnity) and in addition to any mandatory prepayment required by the provisions of Section (C) MANDATORY PREPAYMENTS OF TERM LOANS A. (Term Loan Mandatory Prepayments), upon the request of the Agent pursuant to Section (C) BORROWING BASE. (Borrowing Base) or Section 2.1.13 (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 2.1.13, as applicable. (G)OPTIONAL PREPAYMENTS OF REVOLVING LOAN. Subject to the provisions of Section (D) INDEMNITY. (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. (H)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 (D) INDEMNITY. (Indemnity) by reason of any such application. 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. (I) 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. (J)REVOLVING CREDIT UNUSED LINE FEE. The Borrower shall pay to the Agent for the ratable benefit of the Lenders a quarterly Revolving Credit Facility fee (collectively, the "Revolving Credit Unused Line Fees" and individually, a "Revolving Credit Unused Line Fee") in an amount equal to thirty (30) basis points 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 undisbursed portion of the Total Revolving Credit Committed Amount,, each as in effect from time to time accruing during each quarterly period. The accrued and unpaid Revolving Credit Unused Line Fee shall be paid by the Borrower to the Agent on the first day of each quarter, in arrears, commencing on the first such date following the date hereof, and on the Revolving Credit Termination Date. (K)EARLY TERMINATION FEE. In the event of the termination of the Revolving Credit Commitments, the Borrower shall pay a fee to the Agent for the benefit of the Lenders ratably (the "Early Termination Fee"), equal to following amount at the following times:
Period Early Termination Fee First Closing Date, through and including the day 2% of the sum of the Total Revolving Credit preceding the first anniversary date of the First Committed Amount Closing Date First anniversary date of the First Closing Date 1% of the sum of the Total Revolving Credit through and including the day preceding the second Committed Amount anniversary date of the First Closing Date Second anniversary date of the First Closing Date 1/2 % of the sum of the Total Revolving Credit through and including the day preceding the third Committed Amount anniversary date of the First Closing Date
In the event of a partial reduction of the Revolving Credit Commitments, the Borrower shall pay to the Agent for the benefit of the Lenders ratably, an Early Termination Fee equal to following amount at the following times:
Period Early Termination Fee First Closing Date, through and including the day 2% of the Total Revolving Credit Optional preceding the first anniversary date of the First Reduction Closing Date First anniversary date of the First Closing Date 1% of the Total Revolving Credit Optional through and including the day preceding the second Reduction anniversary date of the First Closing Date Second anniversary date of the First Closing Date 1/2 % of the Total Revolving Credit Optional through and including the day preceding the third Reduction anniversary date of the First Closing Date
In the event the Term Loans are refinanced or replaced with the proceeds of Indebtedness for Borrowed Money, in whole or in part, the Borrower shall pay to the Agent for the benefit of the Lenders ratably, an Early Termination Fee equal to following amount at the following times:
Period Early Termination Fee First Closing Date, through and including the day 2% of the amount prepaid preceding the first anniversary date of the First Closing Date First anniversary date of the First Closing Date 1% of the amount prepaid through and including the day preceding the second anniversary date of the First Closing Date Second anniversary date of the First Closing Date 1/2 % of the amount prepaid through and including the day preceding the third anniversary date of the First Closing Date
Notwithstanding the foregoing, the Borrower shall not be required to pay the Early Termination Fee in connection with such a refinancing or replacement of the Term Loans and the termination or partial reduction of the Revolving Credit Commitments from the proceeds of a public offering of Securities by the Borrower or the Parent. Nothing contained in this Section shall be deemed a waiver by the Agent or any Lender of any Default or Event of Default which results from any such public offering of Securities by the Borrower and/or the closing of a purchase, acquisition or investment otherwise prohibited by the provisions of this Agreement, which does not result in a prepayment of all Obligations and a termination of all Letters of Credit, all Bond Letters of Credit and Commitments. In addition, if the Borrower, Berry UK or Norwich requests that the Requisite Lenders consent to the purchase or acquisition of, or investment in, any assets or any Person which would not otherwise be permitted by the provisions of this Agreement, and the Requisite Lenders refuse to agree and consent to any such purchase, acquisition or investment, the Borrower, Berry UK or Norwich may, at their option, prepay all of the Obligations in full and terminate all of the Commitments and shall have no obligation to pay an Early Termination Fee in connection with any such prepayment and termination; provided, that (a) all Letters of Credit and all Bond Letters of Credit are terminated or otherwise secured by the issuance of one or more back-to-back letters of credit from an issuer and containing terms reasonably acceptable to the Agent, (b) all Obligations are paid in full, (c) all Commitments are terminated, and (d) to the extent the Borrower or any Subsidiary intends to finance such purchase, acquisition or investment, any one of the Lenders have not agreed to provide such financing after having been first offered the opportunity by the Borrower or such Subsidiary to provide such financing substantially on the same terms and conditions as are actually proposed to the Borrower or such Subsidiary from another lender or financial institution. A Lender shall be deemed to have so declined to provide the requested financing for the proposed acquisition, purchase or other investment unless such Lender has otherwise notified the Borrower or such Subsidiary in writing within fifteen (15) days of its receipt of all proposed material terms and conditions of the proposed acquisition, purchase or investment and any requested financing that such Lender wishes to participate in such financing. The Lenders understand and agree that the Borrower or any Subsidiary shall be required only to furnish to the Agent and the Lenders a term sheet summarizing the proposed terms for such financing to be prepared by the Borrower or any Subsidiary based on actual terms proposed by such other lender or financial institution, and that neither the Borrower, any Subsidiary nor any such other lender or financial institution shall have any obligation to furnish to the Agent or the Lenders copies of actual commitments, proposals or correspondence from such other lender or financial institution or independent verification of any such proposed terms. Payment of all or any portion of the Obligations relating to the Revolving Loan and/or the Term Loans and/or termination or reduction of any of the Commitments, in whole or in part, by or on behalf of the Borrower or any Subsidiary, by court order or otherwise, following and as a result of the institution of any bankruptcy proceeding by or against the Borrower or any Subsidiary, shall be deemed to be a prepayment of the Revolving Loan and the Term Loans, and/or termination or reduction of the Commitments, as appropriate, subject to payment of the Early Termination Fee provided in this subsection if any or all of the Obligations are actually paid and/or any or all of the Commitments are terminated or reduced at any time during the periods set forth above. All Early Termination Fees shall be paid to the Agent for the ratable benefit of the Lenders. (L) OPTIONAL REDUCTION OF REVOLVING CREDIT COMMITTED AMOUNT. Subject to the provisions of Section (K) EARLY TERMINATION FEE. (Early Termination Fee), 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 (J) REVOLVING CREDIT UNUSED LINE FEE. (Revolving Credit Unused Line Fees) and the Early Termination Fee, if any, provided for in Section (K) EARLY TERMINATION FEE. (Early Termination Fee) 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. (M)REQUIRED AVAILABILITY UNDER THE REVOLVING CREDIT FACILITY. On an average monthly basis, tested 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 Availability"). The Borrower shall make a Revolving Loan Mandatory Prepayment pursuant to the provisions of Section (F) MANDATORY PREPAYMENTS OF REVOLVING LOAN. 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 2.2THE TERM LOAN A FACILITY. (A)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":
Lender Term Loan A Committed Amount Term Loan A Pro Rata Share Fleet $6,608,534 23.8525% GE Capital $8,094,308 29.215% Heller $4,908,850 17.7175% NationsBank 8,094,308 29.215% Total Term Loan A Committed Amount $27,706,000 100%
The Borrower understands and agrees that the Term Loans A have been fully funded and that none of the Lenders shall have any further obligation or commitment to advance any additional portion of their respective Term Loan A Committed Amount. 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 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. (B)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 quarterly installments of principal on each Installment Payment Date, each in the following amounts at the following times:
DUE DATE AMOUNT August 1, 1998 $297,000 November 1, 1998 $297,000 February 1, 1999 $753,000 May 1, 1999 $753,000 August 1, 1999 $753,000 November 1, 1999 $753,000 February 1, 2000 $1,200,000 May 1, 2000 $1,200,000 August 1, 2000 $1,200,000 November 1, 2000 $1,200,000 February 1, 2001 $1,700,000 May 1, 2001 $1,700,000 August 1, 2001 $1,700,000 November 1, 2001 $1,700,000 January 21, 2002 $12,500,000
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 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 Second 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. (C)MANDATORY PREPAYMENTS OF TERM LOANS A. Subject to the provisions of (D) INDEMNITY. (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: (i)To the extent the Net Proceeds of any Asset Disposition (excluding any Asset Disposition by Berry UK or Norwich) (including the sale and issuance of any Securities, but excluding (i) the sale or transfer of all Securities issued by Venture Southeast and/or Venture Southwest to the Borrower and (ii) the merger, liquidation, consolidation or dissolution of Berry Venture, as contemplated by the Venture Stock Purchaser/Merger Transaction) by the Borrower or any Subsidiary Guarantor cause the aggregate of all such Asset Dispositions in any fiscal year to exceed Two Hundred Fifty Thousand Dollars ($250,000), 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 Borrower shall not be required to make a Term Loan A Mandatory Prepayment in connection with 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. In addition, the Borrower shall not be required to make a Term Loan A Mandatory Prepayment to the extent of 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, together with the Indebtedness for Borrowed Money referenced in (C) MANDATORY PREPAYMENTS OF TERM LOAN B. Subject to the provisions of (D) INDEMNITY. (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 (A) FINANCIAL STATEMENTS. The Borrower shall furnish to the Agent for distribution to the Lenders: (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 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. Notwithstanding anything to the contrary contained herein, the Borrower shall not be required to pay an Early Termination Fee as the result of a Term Loan B Mandatory Prepayment.(a) (Mandatory Prepayments of Term Loan B) shall not exceed at any time in the aggregate Five Hundred Thousand Dollars ($500,000). (ii)Immediately upon closing and consummation of any public or private offering of Indebtedness by the Borrower or any Subsidiary Guarantor (excluding (i) the sale or transfer of all Securities issued by Venture Southeast and/or Venture Southwest to the Borrower and (ii) the merger, liquidation, consolidation or dissolution of Berry Venture, as contemplated by the Venture Stock Purchaser/Merger Transaction), except for Indebtedness for Borrowed Money permitted by (D) INDEBTEDNESS. Neither the Borrower, Berry UK nor Norwich 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: (Indebtedness), other than subsection (d) of (D) INDEBTEDNESS. Neither the Borrower, Berry UK nor Norwich 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, 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 as the result of the issuance of Indebtedness by the Borrower or any Subsidiary Guarantor, if (A) such Indebtedness is issued pursuant to and is permitted by subsection (d) of (D) INDEBTEDNESS. Neither the Borrower, Berry UK nor Norwich 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, excep and such Indebtedness constitutes a "Refinancing Indebtedness" as defined in subsection (n) of (D) INDEBTEDNESS. Neither the Borrower, Berry UK nor Norwich 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, excep, (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 subsections (i) and (ii) of this subsection (b) and the amount of Indebtedness under subsections (i) and (ii) of (C) MANDATORY PREPAYMENTS OF TERM LOAN B. Subject to the provisions of (D) INDEMNITY. (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 (A) FINANCIAL STATEMENTS. The Borrower shall furnish to the Agent for distribution to the Lenders: (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 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. Notwithstanding anything to the contrary contained herein, the Borrower shall not be required to pay an Early Termination Fee as the result of a Term Loan B Mandatory Prepayment.(b) (Mandatory Prepayments of Term Loan B), do 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. Notwithstanding anything to the contrary contained herein, the Borrower shall not be required to pay an Early Termination Fee as the result of a Term Loan A Mandatory Prepayment. (D)OPTIONAL PREPAYMENTS OF TERM LOANS A. Subject to the provisions of (D) INDEMNITY. (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 2.3TERM LOAN B FACILITY. (A)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":
Lender Term Loan B Committed Amount Term Loan B Pro Rata Share Fleet $8,595,846 23.8525% GE Capital $10,528,136 29.215% Heller $6,384,632 17.7175% NationsBank $10,528,136 29.215% Total Term Loan B Committed $36,036,750 100% Amount
At the request of the Borrower, the Lenders agreed to increase the Total Term Loan B Committed Amount from $30,000,000 to $36,036,750 (the "Term Loan B Increase"). The Borrower covenants and agrees to use the Term Loan B Increase solely to make an equity contribution and/or intercompany loan to Berry UK to enable Berry UK to finance the acquisition of the Norwich Stock in accordance with the provisions of the Norwich Stock Purchase Transaction or for other Permitted Uses in connection with the purchase of the Norwich Stock. The Borrower represents and warrants to the Agent and the Lenders that as of the Closing Date the Term Loan B Increase is equal to the lesser of (i) Eight Million Dollars ($8,000,000) and (ii) the difference between (x) the total purchase price (including fees and expenses reasonably incurred in connection with the closing and consummation of the Norwich Stock Purchase Transaction) to be paid by Berry UK for the Norwich Stock in accordance with the terms of the Norwich Stock Purchase Agreement and (y) the Total UK Term Loan Committed Amount. 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. (B)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 quarterly installments of principal on each Installment Payment Date, each in the following amounts at the following times:
DUE DATE AMOUNT July 1, 1998 $1,000,000 October 1, 1998 $3,185,160 January 1, 1999 $3,185,160 April 1, 1999 $3,185,160 July 1, 1999 $3,185,160 October 1, 1999 $3,185,160 January 1, 1999 $3,185,160 April 1, 2000 $3,185,160 July 1, 2000 $3,185,160 October 1, 2000 $3,185,160 January 1, 2000 $3,185,160 April 1, 2001 $3,185,150
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 April 1, 2001. 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. (C)MANDATORY PREPAYMENTS OF TERM LOAN B. Subject to the provisions of (D) INDEMNITY. (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 (A) FINANCIAL STATEMENTS. The Borrower shall furnish to the Agent for distribution to the Lender (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 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. Notwithstanding anything to the contrary contained herein, the Borrower shall not be required to pay an Early Termination Fee as the result of a Term Loan B Mandatory Prepayment. (D) OPTIONAL PREPAYMENTS OF TERM LOANS B. Subject to the provisions of (D) INDEMNITY. (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. (E)TERM LOAN B FEES. The Borrower shall pay to the Agent for the ratable benefit of the Lenders, a quarterly fee, in arrears commencing with the earlier of (a) any quarter in which an Event of Default existed or (b) the quarter ending September 30, 1998, (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:
Pricing Ratio Per annum Quarterly Term 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 25 basis points less than 5.99 to 1.0 Greater than or equal to 4.50 to 1.0, but 12.5 basis points less than 4.99 to 1.0 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 (iii) 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, Norwich 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 event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (Quarterly Statements), in arrears, commencing September 30, 1998, 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. (A)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, each a "Letter of Credit" and collectively the "Letters of Credit") from the Agent from time to time from the First 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"). (B)LETTER OF CREDIT FEES. (i) 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. (ii) 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. (C)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 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 (E) TERM LOAN B FEES. (Term Loan B Fees) 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". (D)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 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. (E)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": (i)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; (ii)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 (iii)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 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. (A)BOND LETTERS OF CREDIT. Subject to and upon the provisions of the Bond Letter of Credit Agreements, the Agent has agreed to issue the Bond Letters 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 a Bond Letter of Credit if the aggregate stated amount of all Bond Letters of Credit then outstanding or proposed to be issued exceeds Eighteen Million Eight Hundred Fifty-Two Thousand Dollars ($18,852,000) (the "Bond Letter of Credit Committed Amount"). (B)BOND LETTER OF CREDIT FEES. (i)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 each Bond Letter of Credit, without regard for provisions contained in the 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 each 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. (ii) In addition and in connection with each 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 each such Bond Letter of Credit, without regard for provisions contained in the 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 respective Bond Letter of Credit. (C)TERMS OF BOND LETTERS OF CREDIT. Each 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; provided, however, that (i) the initial Iowa Bond Letter of Credit - NB issued as security for the Iowa Bond Letter of Credit and the Iowa Bond Standby Credit Agreement shall expire on the expiry date of the Iowa Bond Letter of Credit and Iowa Bond Standby Credit Agreement, (ii) the initial Nevada Bond Letter of Credit - NB issued as security for the Nevada Bond Letter of Credit shall expire on the expiry date of the Nevada Bond Letter of Credit and (iii) the initial South Carolina Bond Letter of Credit - NB issued as security for the South Carolina Bond Letter of Credit shall expire on the expiry date of the South Carolina Bond Letter of Credit. Each Bond Letter of Credit shall be issued for the sole purpose of providing collateral for the Iowa Bonds, the Nevada Bonds, the South Carolina Bonds, the Iowa Bond Letter of Credit, the Nevada Bond Letter of Credit or the South Carolina Bond Letter of Credit or for any other purposes required by the Nevada Bonds, the Iowa Bonds or the South Carolina Bonds. The aggregate stated amount of all Bond Letters of Credit at any one time outstanding and issued by the Agent pursuant to the provisions of this Agreement, 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 such Bond 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 (E) PAYMENTS OF BOND LETTERS OF CREDIT. (Payments of Bond Letters of Credit) and the Bond 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 Bond Letter of Credit Obligations". (D)PROCEDURES FOR BOND 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 Bond Letter of Credit. Such notice shall be accompanied by a duly executed Bond Letter of Credit Agreement specifying, among other things: (a) the name and address of the intended beneficiary of the Bond Letter of Credit, (b) the requested stated amount of the Bond Letter of Credit, (c) that the Bond Letter of Credit is to be irrevocable, (d) the Business Day on which the Bond Letter of Credit is to be issued and the date on which the Bond Letter of Credit is to expire, (e) the terms of payment of any draft or drafts which may be drawn under the Bond Letter of Credit, and (f) any other terms or provisions the Borrower desire to be contained in the Bond 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 assure that the Bond Letter of Credit is to be issued in accordance with the provisions of this Agreement and a Bond Letter of Credit Agreement. In the event of any conflict between the provisions of this Agreement and the provisions of a Bond Letter of Credit Agreement, the provisions of this Agreement shall prevail and control unless otherwise expressly provided in the Bond Letter of Credit Agreement. Upon (x) receipt of such notice, (y) payment of all Bond Letter of Credit Fronting Fees and all other Fees payable in connection with the issuance of such Bond Letter of Credit, and (z) receipt of a duly executed Bond Letter of Credit Agreement, the Agent shall process such notice and Bond Letter of Credit Agreement in accordance with its customary procedures and issue such Bond Letter of Credit on the Business Day specified in such notice, subject to compliance by all parties with the requirements of the Iowa Bond Trust Agreement, the Nevada Bond Trust Agreement and the South Carolina Bond Trust Agreement, pertaining to the replacement of credit enhancement and liquidity facilities relating to the Iowa Bonds, the Nevada Bonds, and the South Carolina Bonds, respectively. (E)PAYMENTS OF BOND LETTERS OF CREDIT. (i)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": (A) the amount which the Agent has paid under each draft or draw on a Bond 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 Bond Letter of Credit and/or such draws or drafts; and (C) 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 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. (ii) Notwithstanding the provisions of paragraph (a) above, as long as no Event of Default has occurred, any drawing under the Iowa Bond Letter of Credit - NB to redeem Iowa Bonds purchased with a drawing under the Iowa Bond Standby Credit Agreement, any drawing under the Nevada Bond Letter of Credit - NB to purchase Nevada Bonds, and any drawing under the South Carolina Bond Letter of Credit - NB to purchase South Carolina Bonds, in each case relating to 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 BIC or the Borrower, as appropriate, make payments of interest to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under INTEREST. (Interest), and the principal amount of each such Conversion Drawing is repaid in equal quarterly payments (i) over the remaining term to expiry of the Bond Letter of Credit Facility with respect to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB and (ii) over a period of ten (10) years with respect to the Iowa Bond Letter of Credit - NB; final payment of all outstanding amounts relating to the Nevada Bond Letter of Credit - NB and/or the South Carolina Bond Letter of Credit - NB to be made no later than expiry of the Bond Letter of Credit Facility or the Revolving Credit Termination Date, whichever is earlier, and final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of any Conversion Drawing under the Iowa Bond Letter of Credit - NB or the Revolving Credit Termination Date, whichever is earlier. In addition, the Agent and the Lenders agree that in the event the Iowa Bond Trustee draws on the Iowa Bond Letter of Credit on or about the business day preceding the expiration or termination of the Iowa Bond Letter of Credit, as contemplated by Section 505 of the Iowa Bond Trust Agreement (the "Draw"), the Iowa Bond Letter of Credit Obligations resulting from the Draw, shall not be payable ON DEMAND as would otherwise be required by this Section (E) PAYMENTS OF BOND LETTERS OF CREDIT., but shall be repaid by the Borrower in equal consecutive quarterly installments over a period of ten (10) years, commencing with the first day following the first full quarterly period after the Draw and continuing on the first day of each quarterly period thereafter (the "Amortizing Iowa Bond Letter of Credit Obligations"); provided, that (A) there does not exist a Default or an Event of Default, (B) the Draw is not the result of an acceleration of the Iowa Bonds pursuant to Section 1102 of the Iowa Bond Trust Agreement and (C) the Draw is not the result of the occurrence of a "Determination of Taxability" (as defined in the Iowa Bond Trust Agreement). Interest shall be payable on the Amortizing Iowa Bond Letter of Credit Obligations to the Agent at the rates, at the times and otherwise subject to the provisions for interest on the Loans under INTEREST. (Interest), with a final payment of all outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be made no later than the date which is ten (10) years after the date of the Draw 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. (iii)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 such Bond Letter of Credit, any draft or other document proving to be forged, fraudulent or invalid, or the legality, validity, regularity or enforceability of such 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 such 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 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 SPECIAL SOURCE BOND FACILITY. (A)SPECIAL SOURCE BOND. Subject to the provisions of the Special Source Bond Assignment, the Agent purchased the Special Source Bond and the Special Source Bond Documents from Bank One, Cleveland, N.A. as of August 29, 1997 (the "Special Source Bond Facility"). The Borrower acknowledges and agrees that as of August 29, 1997, the unpaid balance of the Special Source Bond Obligations was Eight Hundred Sixty Thousand Five Hundred Seventy-five Dollars and Seven Cents ($860,575.07), which consisted of (i) an unpaid principal balance of Eight Hundred Fifty-five Thousand Dollars ($855,000.00) and (ii) unpaid and accrued interest in the amount of Five Thousand Five Hundred Seventy-five Dollars and Seven Cents ($5,575.07). (B)CURRENT TERMS OF SPECIAL SOURCE BOND. The Borrower acknowledges and agrees that as of the date of the Agent's purchase of the Special Source Bond (i) the unpaid principal balance of the Special Source Bond Obligations bears interest at the "Prime Rate", which is defined in the Special Source Bond as the variable rate established and quoted by Banc One, Cleveland, N.A. as its "prime rate" (the "Special Source Bond Interest Rate"), (ii) accrued interest is payable by the Special Source Bond Issuer on the first day of each February and August of each calendar year until maturity, (iii) the Special Source Bond matures and becomes due and payable in full on February 1, 2006 (the "Special Source Bond Maturity Date"), and (iv) the unpaid principal balance of the Special Source Bond is due and payable in consecutive annual installments on the first day of each February in each year, commencing on February 1, 1998 and continuing on the first day of each February thereafter, up to and including, February 1, 2006 in the following amounts:
YEAR OF PAYMENT AMOUNT OF PAYMENT 1998 $ 50,000 1999 $ 65,000 2000 $105,000 2001 $125,000 2002 $115,000 2003 $105,000 2004 $100,000 2005 $ 95,000 2006 $ 95,000
(C)MANDATORY PREPAYMENT OF SPECIAL SOURCE BOND. If the Special Source Bond Obligations have not been prepaid in full on or before the Revolving Credit Termination Date, the Borrower shall prepay the Special Source Bond Obligations in full and all Special Source Bond Obligations shall be deemed due and payable in full on the Revolving Credit Termination Date. (D)PARTICIPATIONS IN THE SPECIAL SOURCE BOND OBLIGATIONS. Effective as of March 5, 1998 (the "Special Source Bond Settlement Date"), each Lender shall have an undivided participating interest in (i) the rights and obligations of the Agent under the Special Source Bond and each of the Special Source Bond Documents and (ii) the Special Source Bond Obligations, in an amount equal to each Lender's Pro Rata Share of the Special Source Bond Obligations. Each Lender shall pay its Pro Rata Share of the Special Source Obligations to the Agent on the Special Source Bond Settlement Date 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 and the Subsidiary Guarantors to pay the Special Source Bond Obligations to the Agent in accordance with the provisions of this Agreement and the Special Source Bond Documents. SECTION 2.7 THE UK REVOLVING CREDIT FACILITY. (A)UK REVOLVING CREDIT FACILITY. Subject to and upon the terms of this Agreement, NationsBank establishes a revolving credit facility in favor of Berry UK and Norwich in an amount equal to One Million Five Hundred Thousand Pounds Sterling (?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 NationsBank to make advances under the UK Revolving Loan, acting through its Sterling LIBOR Lending Office, in accordance with the provisions of this Agreement. Subject to the terms and conditions of Section (E) PARTICIPATIONS IN THE UK CREDIT FACILITIES., as of the date each advance is made by NationsBank, 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 NationsBank 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"):
Lender UK Revolving Credit Committed UK Revolving Credit Pro Rata Amount Share Fleet $357,785 23.8525% GE Capital $438,225 29.215% NationsBank $438,225 29.215% Heller $265,765 17.7175% UK Revolving Credit Committed $1,500,000 100% Amount
During the UK Revolving Credit Commitment Period, Berry UK and/or Norwich 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. (B)PROCEDURE FOR MAKING ADVANCES UNDER THE UK REVOLVING LOAN. Berry UK and/or Norwich 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 (?150,000). Advances under the UK Revolving Loan shall be applied as directed by Berry UK, which direction NationsBank may require to be in writing. Not later than 10:00 a.m. (London Time) on the date of the requested borrowing, Berry UK shall give NationsBank a Loan Notice of the amount (denominated in Sterling) and (if requested by NationsBank) the purpose of the requested borrowing. Any oral Loan Notice shall be confirmed in writing by Berry UK, within three (3) Business Days after the making of the requested advance under the UK Revolving Loan. In addition, Berry UK and Norwich each hereby irrevocably authorize NationsBank, 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 Norwich, to make advances, acting through its Sterling LIBOR Lending Office, under the UK Revolving Loan which NationsBank, deems necessary or appropriate to protect the interests of NationsBank (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 Norwich, 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 NationsBank may advance hereunder exceeds the UK Revolving Credit Committed Amount. NationsBank 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. (C)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 (?500,000). The UK Borrowing Base shall be computed based on the UK Borrowing Base Report most recently delivered to and accepted by NationsBank in its reasonable discretion. In the event Berry UK and Norwich fail to furnish a UK Borrowing Base Report required by Section (D) UK BORROWING BASE REPORT. (UK Borrowing Base Report), NationsBank 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 was included in the UK Borrowing Base, but which NationsBank 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 Norwich, at the sole and absolute discretion of NationsBank exercised from time to time, jointly and severally shall pay the UK Borrowing Base Deficiency ON DEMAND to NationsBank from time to time. Without implying any limitation on NationsBank's discretion 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 Norwich and Berry UK existing on or about the date of this Agreement and upon information and records furnished to NationsBank by Berry UK and Norwich. If at any time or from time to time hereafter, the business operations of Norwich or Berry UK changes in any material respect or such information and records furnished to NationsBank are materially incorrect or misleading, NationsBank 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 NationsBank to Berry UK or Norwich. Except in emergency circumstances, NationsBank agrees to use its commercially reasonable efforts to consult with Berry UK or Norwich prior to the effective date of any addition to, or change in, eligibility criteria, but that NationsBank shall have no obligation or duty to reach an agreement with Berry UK or Norwich as a condition of, or prior to, imposing any changes in, or additions to, eligibility criteria. NationsBank shall communicate such changed or additional criteria to Berry UK or Norwich from time to time either orally or in writing. (D)UK BORROWING BASE REPORT. Norwich and Berry UK will furnish to NationsBank 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 (D) UK BORROWING BASE REPORT., at such other times as may be requested by NationsBank 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 NationsBank, appropriately completed and duly signed. The UK Borrowing Base Report shall contain 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 NationsBank may from time to time reasonably request. Upon NationsBank's request and upon the creation of any Accounts included in the UK Borrowing Base, Norwich and/or Berry UK, as appropriate, will provide NationsBank 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 NationsBank may reasonably require. The items to be provided under this subsection shall be in form reasonably satisfactory to NationsBank, and certified as true and correct by a Responsible Officer, and delivered to NationsBank from time to time solely for NationsBank's convenience in maintaining records of the UK Collateral. The failure of Norwich or Berry UK to deliver any such items to NationsBank shall not affect, terminate, modify, or otherwise limit the Liens of NationsBank in the UK Collateral. Notwithstanding the foregoing, Berry UK and Norwich acknowledge and agree that NationsBank, at its option, may require that Norwich and Berry UK furnish to NationsBank weekly and, if requested by NationsBank, daily UK Borrowing Base Reports upon the occurrence of a Borrowing Base Trigger Event. NationsBank agrees that it shall not be entitled to require that Norwich 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 NationsBank fails to so notify Berry UK and Norwich within ninety (90) days of the date that the Borrower has cured the Borrowing Base Trigger Event to the reasonable satisfaction of NationsBank. The foregoing sentence, however, shall not prevent NationsBank from later requiring more frequent UK Borrowing Base Reports following the occurrence of any subsequent Borrowing Base Trigger Event; provided, that NationsBank 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 NationsBank. (E) UK REVOLVING CREDIT NOTE. The joint and several obligation of Berry UK and Norwich 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 NationsBank 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 Norwich acknowledge and agree that, if the outstanding principal balance of the UK Revolving Loan 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 NationsBank, 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. (F)MANDATORY PREPAYMENTS OF UK REVOLVING LOAN. Subject to the provisions of Section (D) INDEMNITY. (Indemnity), upon the request of NationsBank pursuant to Section (C) UK BORROWING BASE. (UK Borrowing Base), Berry UK and Norwich 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. (G)OPTIONAL PREPAYMENTS OF UK REVOLVING LOAN. Subject to the provisions of Section (D) INDEMNITY. (Indemnity), Berry UK and Norwich 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 NationsBank 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 Norwich to NationsBank on the date specified for such prepayment. Any amounts repaid or prepaid may be readvanced and reborrowed subject to the provisions of this Agreement. (H)UK REVOLVING LOAN ACCOUNT. NationsBank will establish and maintain a loan account on its books (the "UK Revolving Loan Account") to which NationsBank will (a) DEBIT (i) the principal amount of each advance under the UK Revolving Loan made by NationsBank hereunder, acting through its Sterling LIBOR Lending Office, 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 Norwich to NationsBank 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 Norwich to NationsBank 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 NationsBank, at its Sterling LIBOR Lending Office, in cash or solvent credits. Berry UK and Norwich hereby jointly and severally promise to pay to the order of NationsBank, 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 NationsBank, Norwich and Berry UK unless NationsBank receives specific written objection thereto from Berry UK or Norwich within thirty (30) Business Days after such statement or reconciliation shall have been sent by NationsBank. 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 Norwich in all respects, absent manifest error, unless NationsBank receives specific written objection thereto from Berry UK or Norwich within thirty (30) Business Days after such statement or reconciliation shall have been sent by NationsBank. (I)UK REVOLVING CREDIT FACILITY FEE. Berry UK and Norwich jointly and severally shall pay to NationsBank in Pounds Sterling (for the benefit of NationsBank and each of the other 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 Norwich to NationsBank on the Closing Date and on each anniversary date thereof. NationsBank agrees to remit to each other Lender its UK Revolving Credit Pro Rata Share of each UK Revolving Credit Facility Fee promptly following the receipt by NationsBank, in collected funds and in Pounds Sterling, of payment from Berry UK and/or Norwich of such UK Revolving Credit Facility Fee. SECTION 2.8 UK TERM LOAN FACILITY. (A)UK TERM LOAN COMMITMENTS. Subject to and upon the terms of this Agreement, NationsBank agrees to make a loan acting through its Sterling LIBOR Lending Office, (the "UK Term Loan") to Berry UK in the principal amount of Four Million Five Hundred Thousand Pounds Sterling (4,500,000) (the "UK Term Loan Committed Amount"). Subject to the terms and conditions of Section (E) PARTICIPATIONS IN THE UK CREDIT FACILITIES., as of the date the UK Term Loan is made by NationsBank, each Lender shall have an undivided participating interest in (a) the rights and obligations of NationsBank in the UK Term Loan, 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 Term Loan Pro Rata Share"):
Lender UK Term Loan Committed Amount UK Term Loan Pro Rata Share Fleet $1,073,385 23.8525% GE Capital $1,314,675 29.215% Heller $797,310 17.7175% NationsBank $1,314,675 29.215% UK Term Loan Committed Amount $4,500,000 100%
Berry UK covenants and agrees to use the UK Term Loan solely to finance the acquisition of the Norwich Stock in accordance with the provisions of the Norwich Stock Purchase Transaction and for other Permitted Uses in connection with the transactions contemplated thereby. Berry UK represents and warrants as of the Closing Date to NationsBank that the UK Term Loan Committed Amount is equal to the lesser of (i) Four Million Five Hundred Thousand Sterling (?4,500,000) and (ii) the sum of (x) eighty percent (80%) of the orderly liquidation value of the Fixed and Capital Assets of Norwich and Berry UK, (y) seventy-five percent (75%) of the fair market value of all real property owned by Norwich and Berry UK as of the date of this Agreement (after deduction of the outstanding principal amounts secured by any Liens which will not be released as part of the closing and consummation of the Norwich Stock Purchase Transaction), and (z) ?1,500,000. Berry UK further represents and warrants that as of the Closing Date, the sum of the UK Term Loan Committed Amount, plus the Term Loan B Increase, plus the UK Revolving Credit Committed Amount is not greater than Fifteen Million Dollars ($15,000,000). For purposes of this Section 2.8.1, in calculating the U.S. Dollar equivalent of the UK Term Loan Committed Amount and the UK Revolving Credit Committed Amount, the Agent shall use the Dollar Currency Equivalent of Sterling. The obligation of NationsBank 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 NationsBank 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. (B)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 October 1, 1998 through and $60,415 including September 1, 1999 October 1, 1999 through and 470,835 including September 1, 2000 All times thereafter 480,835
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 Berry UK 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 shall be dated as the date hereof and shall be payable to the order of NationsBank at the times provided in the UK Term Loan Note, and shall be in the principal amount of the UK Term Loan Committed Amount. (C)MANDATORY PREPAYMENTS OF UK TERM LOAN. Subject to the provisions of Section (D) INDEMNITY. (Indemnity), Berry UK 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 NationsBank annually. Each UK Term Loan Mandatory Prepayment shall be in the amount of (a) any portion of the purchase price for the Norwich Stock which is returned to Berry UK 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 Norwich Stock Purchase Agreement and shall be payable on the date Berry UK or the Borrower receives such amount from or on behalf of the Seller 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 (A) FINANCIAL STATEMENTS. The Borrower shall furnish to the Agent for distribution to the Lender (Financial Statements). If, however, the Borrower fails to furnish such financial statements in any given year as and when required, Berry UK 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 Norwich's then preceding fiscal year. Berry UK shall pay to NationsBank 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. Notwithstanding anything to the contrary contained herein, the Borrower shall not be required to pay an Early Termination Fee as the result of a UK Term Loan Mandatory Prepayment. In addition to the foregoing, the Borrower shall make a UK Term Loan Mandatory Prepayment on behalf of Berry UK to the extent of any Excess Cash Flow remaining after payment of the Term Loans B in full. (D)OPTIONAL PREPAYMENTS OF UK TERM LOAN. Subject to the provisions of Section (D) INDEMNITY. (Indemnity), Berry UK 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 Berry UK to NationsBank 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. SECTION 2.9GENERAL LETTER OF CREDIT PROVISIONS AND PARTICIPATION PROVISIONS FOR UK CREDIT FACILITIES. (A)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. (B)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. 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 (E) PAYMENTS OF LETTERS OF CREDIT. (Payments of Letter of Credit) or Section (E) PAYMENTS OF BOND LETTERS OF CREDIT. (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. (C)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 Credit Pro Rata Share of such Outstanding Letter of Credit Obligations and Outstanding Bond Letter of Credit Obligations. (D)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 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. (E)PARTICIPATIONS IN THE UK CREDIT FACILITIES. Each Lender hereby irrevocably authorizes NationsBank to make advances under the UK Revolving Loan, acting through its Sterling LIBOR Lending Office 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 NationsBank 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 NationsBank 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 Norwich fail to pay to NationsBank any UK Obligations as and when due and payable, NationsBank 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 NationsBank on account of the UK Obligations is rescinded or required to be restored or turned over by NationsBank upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Berry UK or Norwich or upon or as a result of the appointment of a receiver, intervenor, trustee, conservator or similar officer for Berry UK or Norwich, NationsBank 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 Norwich. 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 NationsBank 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 Norwich to pay the UK Obligations to NationsBank in accordance with the provisions of this Agreement. The date on which a payment is made by a Lender to NationsBank 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 NationsBank 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 NationsBank. Any claim any Lender may have against NationsBank as a result of the alleged willful misconduct of NationsBank may be brought by such Lender in a separate action against NationsBank 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, NationsBank, except with respect to those UK Obligations for which NationsBank 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 Norwich 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 NationsBank 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, NationsBank agrees that if the Mandatory Liquid Assets Cost Rate payable by NationsBank 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 NationsBank shall have made demand on the Lenders for payment of their Pro Rata Share of the UK Obligations (the "UK Obligations Demand Date"), NationsBank 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, NationsBank, 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; NationsBank 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 NationsBank has received the interest payment which is the basis for such fee. SECTION 2.10 INTEREST. (A)APPLICABLE INTEREST RATES. (i)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 Norwich, as appropriate, in an Interest Rate Election Notice furnished to the Agent or NationsBank, as appropriate, in accordance with the provisions of Section (v) Neither NationsBank 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 NationsBank or the Agent, as appropriate, shall have received an irrevocable written or telephonic notice (an "Interest Rate Election Notice") from the Borrower, Berry UK or Norwich, as appropriate, specifying the following information: (Selection of Interest Rates), or as otherwise determined in accordance with the provisions of this INTEREST., and as may be adjusted from time to time in accordance with the provisions of Section INABILITY TO DETERMINE LIBOR BASE RATE. (Inability to Determine LIBOR Base Rate). Notwithstanding the foregoing, all Loans made to Berry UK and/or Norwich under the UK Credit Facilities must bear interest at the LIBOR Rate only; neither Berry UK nor Norwich may select the Alternate Base Rate as the Applicable Interest Rate for any Loan made to Berry UK or Norwich under any of the Credit Facilities. (ii)Notwithstanding the foregoing, following the occurrence and during the continuance of an Event of Default, at the option of the Agent and NationsBank, all Loans and all other Obligations shall bear interest at the Post-Default Rate. (iii)The Applicable Margin for (i) LIBOR Loans, other than the UK Term Loans shall be two hundred (200) basis points per annum, (ii) LIBOR Loans consisting of the UK Term Loans, shall be two hundred fifty (250) basis points per annum, and (iii) Base Rate Loans shall be fifty (50) basis points per annum unless and until a change is required by the operation of Section (A) APPLICABLE INTEREST RATES.(iv) Subsequent to the Agent's receipt of the Borrower's quarterly financial statements for the period ending June 30, 1998 to be furnished to the Agent pursuant to (iii) 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, Norwich 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 event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (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 (I) 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, Norwich and all other Subsidiaries, prepared in accordance with GAAP and examined and certified 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, Norwich 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, Norwich 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 (a)(i), 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. (Annual Statements) and (iii) 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, Norwich 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 event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (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:. 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. (iv)Subsequent to the Agent's receipt of the Borrower's quarterly financial statements for the period ending June 30, 1998 to be furnished to the Agent pursuant to (iii) 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, Norwich 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 event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (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 (i) 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, Norwich and all other Subsidiaries, prepared in accordance with GAAP and examined and certified 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, Norwich 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, Norwich 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 (A) FINANCIAL STATEMENTS., 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. (Annual Statements) and (iii) 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, Norwich 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 event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (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:
Pricing Ratio Applicable Margin for Applicable Margin for LIBOR Loans Base Rate Loans greater than or equal to 5.5 to 1.0 250 b.p. 100 b.p. greater than or equal to 5.0 to 1.0, but less 225 b.p. 75 b.p. than 5.5 to 1.0 greater than or equal to 3.5 to 1.0, but less 200 b.p. 50 b.p. than 5.0 to 1.0 greater than or equal to 2.75 to 1.0, but less 175 b.p. 25 b.p. than 3.5 to 1.0 less than 2.75 to 1.0 150 b.p. 0 b.p.
(B)SELECTION OF INTEREST RATES. (i)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 Norwich may select an initial Sterling LIBOR Rate or Sterling LIBOR Rates to be charged on the Loans under the UK Credit Facilities. (ii)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 NationsBank, as appropriate, in accordance with the provisions of Section SELECTION OF INTEREST RATES., the Borrower, Berry UK or Norwich, 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. (iii)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: (A)neither the Borrower, Berry UK nor Norwich 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, (B)no change from the LIBOR Rate to the Alternate Base Rate shall become effective on a day other than a Business Day and so long as NationsBank or the Lenders, as appropriate, receive any compensation payable pursuant to Section (D) INDEMNITY. (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 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. (C)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, (D)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, (E)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, (F)the first day of each Interest Period shall be a Business Day, (G)as of the effective date of a selection, there shall not exist a Default or an Event of Default, and (H)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 (150,000). (iv)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 Norwich 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 Norwich shall be deemed to have selected a 30-day Interest Period and the LIBOR Rate. (v)Neither NationsBank 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 NationsBank or the Agent, as appropriate, shall have received an irrevocable written or telephonic notice (an "Interest Rate Election Notice") from the Borrower, Berry UK or Norwich, as appropriate, specifying the following information: (A)the amount to be borrowed or converted, (B)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), (C)the length of the Interest Period if the Applicable Interest Rate selected is the LIBOR Rate, and (D)the requested date on which such election is to be effective. Article IIAny 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 NationsBank not later than 10:00 a.m. (London Time) on the Business Day of any requested borrowing or conversion. (C)INABILITY TO DETERMINE LIBOR BASE RATE. In the event that (a) the Agent or NationsBank 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 Norwich, as appropriate, shall have requested to be made or to be converted to a LIBOR Loan or (b) the Agent or NationsBank shall determine that the LIBOR Base Rate for any requested Interest Period with respect to a Loan the Borrower, Berry UK and/or Norwich, 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 NationsBank or the Lenders, as appropriate, of funding or converting such Loan, the Agent or NationsBank, as applicable, shall give telephonic or written notice of such determination to the Borrower, Berry UK and/or Norwich, 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 NationsBank 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 NationsBank, the Borrower, Berry UK and Norwich will not request that any Loan be made or converted to a LIBOR Loan. (D)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 Norwich 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 Norwich to make, or convert the Applicable Interest Rate of, a LIBOR Loan after the Borrower, Berry UK or Norwich has given a Loan Notice or an Interest Rate Election Notice, (c) the failure of the Borrower, Berry UK or Norwich to make any prepayment of a LIBOR Loan after the Borrower, Berry UK or Norwich has given notice of such intention to make such a prepayment, and/or (d) the making by the Borrower, Berry UK or Norwich 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 Norwich 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 Norwich 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 Norwich to make, or convert the Applicable Interest Rate of, a LIBOR Loan made under the UK Credit Facilities after Berry UK or Norwich has given a Loan Notice or an Interest Rate Election Notice, (c) the failure of Berry UK or Norwich to make any prepayment of a LIBOR Loan made under the UK Credit Facilities after Berry UK or Norwich has given notice of such intention to make such a prepayment, and/or (d) the making by Berry UK or Norwich 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 Norwich 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 Norwich, however, shall be jointly and severally liable only for the payment of those prepayment fees which relate solely to the UK Credit Facilities. (E)PAYMENT OF INTEREST. (i)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). (ii)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. (iii)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 NationsBank agree that neither the Borrower, Berry UK nor Norwich shall have any obligation to make any payment pursuant to the provisions of Section (D) INDEMNITY. (Indemnity) resulting solely from the payment of accrued interest on a date other than the expiration date of an Interest Period. SECTION 2.11GENERAL FINANCING PROVISIONS. (A)BORROWER'S REPRESENTATIVES. (i) 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) this financing enabled the PackerWare Merger Transaction and the Venture Stock Purchase Merger/Transaction and is enabling the Norwich Stock Purchase Transaction, (iii) the terms of the consolidated financing provided under this Agreement are more favorable than would otherwise would be obtainable by the Borrower, Berry UK, Norwich and any Subsidiary Guarantor individually, and (iv) 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. (ii) 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 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 Norwich each hereby irrevocably authorizes NationsBank to make Loans to Berry UK and/or Norwich, 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 Norwich under the provisions of the most recent certificate of corporate resolutions of Berry UK or Norwich on file with NationsBank 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 Norwich under the provisions of the most recent certificate of corporate resolutions and/or incumbency for Berry UK or Norwich on file with NationsBank. (iii)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 NationsBank and the Borrower, Berry UK and/or Norwich or the Agent or NationsBank 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. (B)USE OF PROCEEDS OF THE LOANS. The proceeds of each Loan shall be used by the Borrower, Berry UK, Norwich 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. (C)FIELD EXAMINATION FEES. The Borrower shall pay to the Agent for the exclusive benefit of the Agent an annual field examination fee (the "Field Examination Fee"), which Field Examination Fee shall be payable quarterly in advance on the first day of each February, May, August and November of each year commencing on the first such date following the Closing Date, and continuing until the last such date prior to which all Obligations arising out of, or under, the Credit Facilities then outstanding have been paid in full. The Field Examination Fee shall be in the amount of Forty Thousand Dollars ($40,000) per annum, and shall also include the amount of all out-of-pocket expenses reasonably incurred by the Agent in connection with any field examination of Norwich and/or Berry UK for which the Agent has not been previously reimbursed. (D)UK COMMITMENT FEE. The Borrower, Berry UK and Norwich jointly and severally shall pay to the Agent for the ratable benefit of the Lenders a commitment fee (the "First UK Commitment Fee") in the amount of Fifty-two Thousand Five Hundred Dollars ($52,500). In addition, the Borrower, Berry UK and Norwich jointly and severally shall pay to NationsBank and GE Capital an additional commitment fee in the amount of One Hundred Thirty-five Thousand Dollars ($135,000) to be shared equally between NationsBank and GE Capital (the "Second UK Commitment Fee") (the First UK Commitment Fee and the Second UK Commitment Fee are herein collectively referred to as the "UK Commitment Fee"). The UK 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. (E)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. (F)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 NORWICH TO NATIONSBANK 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 NATIONSBANK), 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 NORWICH, AS APPROPRIATE, SHALL (A) INCREASE THE AMOUNT OF SUCH PAYMENT SO THAT NATIONSBANK 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 NATIONSBANK AND, AS PROMPTLY AS POSSIBLE THEREAFTER, SEND NATIONSBANK 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 NATIONSBANK MAY FROM TIME TO TIME REASONABLY REQUIRE. IF THE BORROWER, BERRY UK OR NORWICH FAIL TO PERFORM ITS OBLIGATIONS TO THE AGENT AND/OR ANY OF THE LENDERS UNDER THE FOREGOING, THE BORROWER, BERRY UK AND NORWICH (SUBJECT TO THE LIMITATIONS OF SECTION (J) IMITATIONS ON JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS. (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 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. 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 follow (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 Norwich to NationsBank 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 NationsBank, as applicable, after such time shall be deemed to have been received by the Agent and/or NationsBank, 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 NationsBank, as applicable, until such payments are paid to the Agent and/or NationsBank, as applicable, in immediately available funds. This Section 2.11.7 shall be the only Section of this Agreement pursuant to which the Borrower, Norwich or Berry UK shall be obligated to gross up any Lender for Taxes. (G)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 Norwich each hereby grants to NationsBank a continuing Lien for all of the UK Obligations upon any and all monies, securities, and other cash deposits of Berry UK and/or Norwich and the proceeds thereof, now or hereafter held or received by or in transit to, NationsBank and/or any Affiliate of NationsBank, from or for Berry UK and/or Norwich, and also upon any and all deposit accounts (general or special) and credits of Berry UK and/or Norwich, if any, with NationsBank or any Affiliate of NationsBank, at any time existing, excluding any deposit accounts held by Berry UK and/or Norwich in its capacity as trustee for Persons who are not Affiliates or Subsidiaries of the Borrower, Berry UK or Norwich. 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. (H)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 (H) REQUIREMENTS OF LAW. 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 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. NationsBank agrees that if at any time NationsBank sells one hundred percent (100%) of all of its Commitments, NationsBank shall resign as Agent and the remaining Lenders shall select a replacement Agent in accordance with the provisions of this Agreement. In addition, NationsBank agrees that for so long as NationsBank is the Agent, unless otherwise agreed by the Lenders, NationsBank shall continue to hold a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of the Lender (other than NationsBank) 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 ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich 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. (Assignments by Lenders). (I)FUNDS TRANSFER SERVICES. (i)The Borrower, Berry UK and Norwich acknowledge that the Agent has made available to the Borrower, Berry UK and Norwich, 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, Norwich and the Agent agree that the Security Procedures are commercially reasonable. The Borrower, Berry UK and Norwich 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 Norwich communicates directly with the Agent or such Affiliate bank as applicable in accordance with said procedures. If the Borrower, Berry UK or Norwich 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 Norwich 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 Norwich will be bound by any funds transfer, whether or not authorized, which is issued in the name of the Borrower, Berry UK and/or Norwich 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 Norwich 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 Borrower, Berry UK or Norwich 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. (ii) 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 Norwich 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. (J) 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 Norwich 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 2.12 SETTLEMENT AMONG LENDERS. (A)TERM LOANS; SPECIAL SOURCE BOND. The Agent shall pay to each Lender on each date on which a payment of principal and/or interest on the Term Loans and/or Special Source Bond, such Lender's ratable share of all payments received by the Agent in immediately available funds on account of the Term Loans and/or the Special Source Bond, 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 and the Lender's Pro Rata Share of the Special Source Bond Obligations, respectively. (B)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 settlement among them may take place on a periodic basis in accordance with the provisions of this Section (B) REVOLVING LOAN.. (C)SETTLEMENT PROCEDURES AS TO REVOLVING LOAN. (I) IN GENERAL. To the extent and in the manner hereinafter provided in this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN., 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. (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 (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN. in accordance with the Settlement Report delivered by the Agent pursuant to the provisions of this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN. 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. (II)SELECTION OF SETTLEMENT DATES. If the Agent elects, in its discretion, but subject to the consent of NationsBank, 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. (III)NON-RATABLE LOANS AND PAYMENTS. Between Settlement Dates, the Agent shall request and NationsBank may (but shall not be obligated to) advance to the Borrower out of NationsBank's own funds, the entire principal amount of any advance under the Revolving Loan requested or deemed requested pursuant to Section (B) PROCEDURE FOR MAKING ADVANCES UNDER THE REVOLVING LOAN. (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 NationsBank shall be deemed to be a purchase by NationsBank 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 NationsBank. Upon demand by NationsBank, with notice to the Agent, each other Lender shall pay to NationsBank, 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 NationsBank for such application, and such payment to and retention by NationsBank 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 advance under the Revolving Loan (including the repurchase of participations in Non-Ratable Loans) made by NationsBank. Upon demand by another Lender, with notice thereof to the Agent, NationsBank 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 NationsBank in such other Lender's Revolving Credit Pro Rata Share of any Non-Ratable Loans) paid only to NationsBank by the Agent. (IV)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 (B)REVOLVING LOAN. (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 NationsBank 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 NationsBank shall pay to the Agent, for the account of such Lender, the excess allocable to such Lender. (V)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 (B) REVOLVING LOAN. (Revolving Loan) exceeds such Lender's Revolving Credit Pro Rata Share of amounts received by the Agent but paid only to NationsBank 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 NationsBank, any excess. (VI)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 NationsBank shall be paid by NationsBank 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 (B) REVOLVING LOAN. (Revolving Loan) is exactly equal to such Lender's Revolving Credit Pro Rata Share of amounts received by the Agent but paid only to NationsBank 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. (VII) RETURN OF PAYMENTS. If any amounts received by NationsBank in respect of the Obligations are later required to be returned or repaid by NationsBank 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 NationsBank's Revolving Credit Pro Rata Share of all such amounts required to be returned by all Lenders, each other Lender shall, upon demand by NationsBank with notice to the Agent, pay to the Agent for the account of NationsBank, an amount equal to the excess of such Lender's Revolving 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. (viii)Payments to Agent, Lenders. (E)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. (F)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. (G)With respect to the payment of any funds under this Section (C) SETTLEMENT PROCEDURES AS TO REVOLVING LOAN., 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. (D)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. (E)PRESUMPTION OF PAYMENT. (i)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 (e) Presumption of Payment., 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. (ii)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 (E) PRESUMPTION OF PAYMENT.. (iii) A certificate of the Agent submitted to any Lender with respect to any amounts owing to the Agent by such Lender under this Section (e) Presumption of Payment. 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 (e) Presumption of Payment. constitute and shall be part of the Agent's Obligations. (iv) 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. 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 NationsBank with respect to the UK Obligations, and agrees that NationsBank, 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 Perso (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 Special Source Bond 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. In addition, notwithstanding the foregoing, the Agent and the Lenders acknowledge and agree that the Special Source Bond Obligations shall be secured by the Collateral granted to the Agent and the Lenders pursuant to Section 3.2 of this Agreement and pursuant to the Special Source Bond Security Agreement but, unless otherwise agreed to by the Borrower, shall not be secured by any of the Deeds of Trust. The Agent, the Lenders, the Borrower, Berry UK and Norwich 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 Norwich. The UK Security Documents are intended to grant Liens on the assets of Berry UK and Norwich to NationsBank 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 Norwich, 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). SECTION 3.2GRANT 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 NationsBank with respect to the UK Obligations, and agrees that NationsBank, 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. 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 NationsBank with respect to the UK Obligations, all of its rights, title and interest in, to, and under, the PackerWare Merger Agreement, the Virginia Design Purchase Agreement, the Venture Stock Purchase/Merger Agreement, the tax covenants, restrictive covenants and warranties of the Norwich Stock Purchase Agreement (the "Norwich Assignable Interest"), all of the PackerWare Merger Agreement Documents, all of the Virginia Design Purchase Agreement Documents, all of the Venture Stock Purchase/Merger Documents, and all of the Norwich Stock Purchase 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 PackerWare Merger Agreement, under the Virginia Design Purchase Agreement, under the Venture Stock Purchase/Merger Agreement, under the Norwich Assignable Interest, under any of the PackerWare Merger Agreement Documents, and/or under any of the Virginia Design Purchase Agreement Documents, under any of the other Venture Stock Purchase/Merger Documents. The Borrower hereby agrees to indemnify the Agent and each of the 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 PackerWare Merger Agreement, Virginia Design Purchase Agreement, the Venture Stock Purchase/Merger Agreement, the Norwich Assignable Interest, the PackerWare Merger Agreement Documents, the Virginia Design Purchase Agreement Documents, and the Venture Stock Purchase/Merger 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 PackerWare Merger Agreement, under the Virginia Design Purchase Agreement, under the Venture Stock Purchase/Merger Agreement, under the Norwich Assignable Interest, under any or all of the PackerWare Merger Agreement Documents, under any or all of the Virginia Design Purchase Agreement Documents, under any or all of the Venture Stock Purchase/Merger Documents, , and under applicable Laws with respect to the PackerWare Merger Transaction, Virginia Design Purchase Agreement Transaction, the Venture Stock Purchase/Merger Transaction and/or the Norwich Stock Purchase Transaction. SECTION 3.3 COLLATERAL DISCLOSURE LIST. On or prior to the date of this Agreement, the Borrower, Berry UK and Norwich 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, Norwich 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, Norwich 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, Norwich 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 3.4PERSONAL PROPERTY. The Borrower, Berry UK and Norwich 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 3.2Grant of Liens. (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 (v) 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. (Subsidiary Guarantor Assets) and the terms of (j) Limitations on Joint and Several Liability for Obligations.(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 (v) Perfection and Priority of Collateral.), 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) that NationsBank shall have a first priority, perfected Lien, in form and substance reasonably satisfactory to NationsBank and its counsel, on all of the personal property of Berry UK and Norwich 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: (A)SECURITIES, CHATTEL PAPER, PROMISSORY NOTES, ETC. (i)As of the date of this Agreement and without implying any limitation on the scope of 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 NationsBank with respect to the UK Obligations, and agrees that NationsBank, 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 Perso (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 Norwich shall deliver (or shall have delivered to NationsBank, all originals of all of letters of credit, Securities, Chattel Paper, Documents and Instruments owned or held by Berry UK and/or Norwich, and, if NationsBank 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 NationsBank, which pledge, assignment and security agreement shall assign, pledge and grant a Lien to NationsBank with respect to the UK Obligations on all of the letters of credit, Securities, Chattel Paper, Documents and Instruments of Berry UK and/or Norwich, as the case may be. In addition, Berry UK and Norwich agree to endorse to the order of NationsBank any and all Instruments that constitute or evidence all or any portion of the UK Collateral. (ii) 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 Norwich shall acquire (or have acquired) after the Closing Date any letters of credit, Securities, Chattel Paper, Documents or Instruments, Berry UK and Norwich shall promptly so notify NationsBank and deliver the originals of all of the foregoing to NationsBank promptly and in any event within thirty (30) days of each acquisition. (iii) All letters of credit, Securities, Chattel Paper, Documents and Instruments to be delivered hereunder shall be delivered to the Agent and/or NationsBank, as applicable, endorsed and/or assigned as required by the pledge, assignment and security agreement and/or as the Agent and/or NationsBank, as applicable, may require and, if applicable, shall be accompanied by blank irrevocable and unconditional stock or bond powers. (B) 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. (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 Norwich shall execute and deliver (or shall have executed and delivered), all Financing Documents and take all actions reasonably requested by NationsBank 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 Norwich 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, Norwich or any Subsidiary Guarantor pursuant to this THE COLLATERAL 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, Norwich, 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 3.6REAL 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 the Borrower or any Subsidiary Guarantor. Berry UK and Norwich acknowledge and agree that it is the intention of the parties to this Agreement that NationsBank shall have a first priority, perfected Lien, in form and substance satisfactory to NationsBank and its counsel, on all real property of any kind and nature whatsoever, whether now owned or hereafter acquired by Berry UK or Norwich, subject only to the Permitted Liens and to the limitations on liability set forth in (j) Limitations on Joint and Several Liability for Obligations. (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 Norwich. WITH RESPECT TO EACH PARCEL OF REAL PROPERTY NOW OWNED BY THE BORROWER, BERRY UK, NORWICH AND/OR A SUBSIDIARY GUARANTOR ), THE BORROWER, BERRY UK AND NORWICH, AS APPROPRIATE, SHALL EXECUTE AND DELIVER AND, SUBJECT TO THE TERMS OF 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 (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 NationsBank, 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, Norwich or any Subsidiary Guarantor after the Closing Date (whether by merger or otherwise), the Borrower, Berry UK and/or Norwich, as appropriate, shall grant and, subject to the terms of 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 (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 NationsBank, 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 NationsBank, 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 NationsBank, as appropriate, subject only to Permitted Liens, zoning ordinances, and such other matters as the Agent and/or NationsBank, as applicable, may approve, but subject to the limitations set forth on liability in Section (J)LIMITATIONS ON JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS. (Limitations on Joint and Several Liability); (c)be accompanied by a current survey reasonably satisfactory in all respects to the Agent and/or NationsBank, as appropriate, of the subject real property, prepared by a registered land surveyor or engineer reasonably satisfactory to the Agent and NationsBank, as appropriate; (d)be accompanied by evidence reasonably satisfactory to the Agent and/or NationsBank, as 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 NationsBank's request, an environmental audit of such real property prepared by a person or firm reasonably acceptable to the Agent and/or NationsBank, 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 NationsBank, be accompanied by a signed opinion of counsel addressed to the Agent and each of the Lenders or NationsBank, as appropriate, in form and substance reasonably satisfactory to the Agent and NationsBank, as applicable. SECTION 3.7SUBSIDIARY 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 3.8COSTS. 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. 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 3.7Subsidiary 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 (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; (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 3.9RELEASE. Upon the payment and performance of all Obligations of the Borrower, Berry UK, Norwich 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 3.10INCONSISTENT 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 4.1REPRESENTATIONS AND WARRANTIES. The Borrower, Berry UK and Norwich each represents and warrants to the Agent and the Lenders, as follows: (A)SUBSIDIARIES. The Borrower, Berry UK and Norwich owns 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 Norwich's ownership interests therein, as applicable. (B)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. (C)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 Norwich 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 Norwich Stock Purchase Transaction, as appropriate and to incur and perform the Obligations whether under this Agreement, the other Financing Documents, the Norwich 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 Norwich Stock Purchase Documents, the performance by the Borrower of the Obligations or the closing and consummation of the Norwich Stock Purchase Transaction, in each case, if required, the same has been duly obtained. (D) 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. (E)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. (F)NO DEFAULTS, VIOLATIONS. AS OF THE DATE OF THIS AGREEMENT: (i)No Default or Event of Default has occurred and is continuing. (i)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. (G)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. (H)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. (I)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. (J)LITIGATION. Except as otherwise disclosed on SCHEDULE (J) LITIGATION. 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, if determined adversely to the interests of the Borrower or any Subsidiary, would 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. (K)FINANCIAL CONDITION. The consolidated financial statements of the Borrower and the Subsidiaries dated as of March 31, 1998, 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 Investments, Loans and Other Transactions. (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. (L)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 immediately after consummation of the Norwich 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 Norwich 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 the consolidated financial condition of the Borrower and the Subsidiaries as of immediately after consummation of the Norwich Stock 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. (M)FULL DISCLOSURE. The financial statements referred to in Section (K)FINANCIAL CONDITION. (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. (N)INDEBTEDNESS FOR BORROWED MONEY. As of the date of this Agreement, except for the Obligations and except as set forth in SCHEDULE (N) INDEBTEDNESS FOR BORROWED MONEY. attached to and made a part of this Agreement, neither the Borrower, Berry UK nor Norwich 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 (N)INDEBTEDNESS FOR BORROWED MONEY., together with any and all material subordination agreements, other agreements, documents, or instruments securing, evidencing, guarantying or otherwise executed and delivered in connection therewith. (O)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. (P)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 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 audited financial statements referred to in Section (k) Financial Condition. (Financial Condition), and are now, adequately provided for on the books of the Borrower and the Subsidiaries, as appropriate. No 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, except that the Agent and the Lenders understand that PackerWare is to be the subject of an audit by the Internal Revenue Service, but that such audit, to the Borrower's knowledge, is not the result of any claimed or actual non-compliance with any Laws. (Q)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
412 or ERISA
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
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
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
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". (R)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 (k) Financial Condition. (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. (S)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 (K)FINANCIAL CONDITION. (Financial Condition). (T)EMPLOYEE RELATIONS. Except as disclosed on SCHEDULE (T) EMPLOYEE RELATIONS. 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. (U)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 (U) PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS CONTAMINATION. 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 current lines of business 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. In addition, as of the date of this Agreement, the Borrower represents and warrants that it has no existing monitoring or observation wells located at Lawrence, Kansas (including Aeroquip); Evansville, Indiana; Indian Trail, North Carolina; and Reno, Nevada properties from which groundwater can be sampled and analyzed. (V) 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 3.7SUBSIDIARY GUARANTOR ASSETS. (Subsidiary Guarantor Assets) and the terms of (J)LIMITATIONS ON JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS.(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 (V) PERFECTION AND PRIORITY OF COLLATERAL.. (W) 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, Norwich and each of the Subsidiary Guarantors, (b) any and each other place of business of the Borrower, Berry UK, Norwich 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. (X) BUSINESS NAMES AND ADDRESSES. Except as set forth in SCHEDULE (X) BUSINESS NAMES AND ADDRESSES. attached hereto and made a part hereof, in the five (5) years preceding the date hereof, neither the Borrower, Berry UK, Norwich nor any of its Subsidiaries (other than PAC) 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. (Y)EQUIPMENT. No equipment is held by the Borrower, Berry UK, Norwich or any Subsidiary Guarantor on a sale on approval basis. (Z)INVENTORY. All material portions of the Inventory of the Borrower, Berry UK, Norwich 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. (AA)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. (BB)PACKERWARE MERGER TRANSACTION. The Agent has received true and correct photocopies of the PackerWare Merger Agreement and each of the other PackerWare Merger Agreement Documents, executed, delivered and/or furnished on or before the Closing Date in connection with the PackerWare Merger Transaction. Neither the PackerWare Merger Agreement nor any of the other PackerWare Merger Agreement Documents have been modified, changed, supplemented, canceled, amended or otherwise altered, except as otherwise disclosed to the Agent in writing on or before the Closing Date. The PackerWare Merger Transaction has been effected, closed and consummated pursuant to, and in accordance with, the terms and conditions of the PackerWare Merger Agreement and with all applicable Laws. (CC)VENTURE STOCK PURCHASE/MERGER TRANSACTION. The Agent has received true and correct photocopies of the Venture Stock Purchase/Merger Agreement and each of the other Venture Stock Purchase/Merger Documents, executed, delivered and/or furnished on or before the date of this Agreement in connection with the Venture Stock Purchase/Merger Transaction. Neither the Venture Stock Purchase/Merger Agreement nor any of the other Venture Stock Purchase/Merger 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 Venture Stock Purchase/Merger Transaction has been effected, closed and consummated pursuant to, and in accordance with, the terms and conditions of the Venture Stock Purchase/Merger Agreement and with all applicable Laws. As of the date of this Agreement, Venture Southeast and Venture Midwest are Wholly-Owned Subsidiaries of the Borrower. (DD)NORWICH STOCK PURCHASE TRANSACTION. The Agent has received true and correct photocopies of the Norwich Stock Purchase Agreement and each of the other Norwich Stock Purchase Documents, executed, delivered and/or furnished on or before the date of this Agreement in connection with the Norwich Stock Purchase Transaction. Neither the Norwich Stock Purchase Agreement nor any of the other Norwich 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 Norwich Stock Purchase Transaction has been effected, closed and consummated pursuant to, and in accordance with, the terms and conditions of the Norwich Stock Purchase Agreement and with all applicable Laws. (EE)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 PackerWare Merger Transaction, the Venture Stock Purchase/Merger Transaction, the Norwich Stock Purchase Transaction and/or the Container Purchase Agreement Transaction. The waiting periods under such Act have terminated or expired. (FF)CREDIT FACILITIES. The Borrower hereby represents and warrants that none of the Credit Facilities nor the obligations of the Borrower, Berry UK, Norwich and the Subsidiary 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 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 Special Source Bond Obligations or 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. (GG)YEAR 2000 COMPLIANCE As of the Closing Date, the Borrower has (i) initiated a review and assessment of all areas within its and each of the Subsidiaries' (excluding Norwich) business and operations (including those affected by suppliers and vendors) that could be adversely affected by the "Year 2000 Problem" (that is, the risk that computer applications used by the Borrower or any Subsidiary may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to and any date after December 31, 1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan in accordance with that timetable, but in any event on or before March 31, 1999. The Borrower reasonably believes that all computer applications that are material to it or any Subsidiary's (including Norwich's)_ business and operations will on a timely basis (but in any event on or before March 31, 1999) be able to perform properly date-sensitive functions for all dates before and after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure to do so would not 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 Subsidiary taken as a whole. Although as of the Closing Date, the Borrower has not initiated a review and assessment to determine whether Norwich will be Year 2000 Compliant, the Borrower intends to initiate and complete such a review and assessment promptly following the Closing Date and in any event within six (6) months of the Closing Date. SECTION 4.2SURVIVAL; 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 (K)FINANCIAL CONDITION. (Financial Condition), shall also be deemed to cover financial statements furnished from time to time to the Agent and the Lenders pursuant to (a) Financial Statements. The Borrower shall furnish to the Agent for distribution to the Lender (Financial Statements). The Borrower, Berry UK and Norwich shall have the right from time to time to modify or supplement any of the Schedules and/or the Collateral Disclosure List referred to in this REPRESENTATIONS AND WARRANTIES, and following any such modification or supplement the representations in this REPRESENTATIONS AND WARRANTIES 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 Norwich, 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, Norwich and its Subsidiaries taken as a whole or which would otherwise constitute a Default or an Event of Default. ARTICLE V CONDITIONS PRECEDENT SECTION 5.1CONDITIONS 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: (A)ORGANIZATIONAL DOCUMENTS - BORROWER, BERRY UK AND NORWICH. The Agent shall have received for the Borrower, Berry UK and Norwich: (i)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; (ii)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; (iii)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 Norwich covering: (A)true and complete copies of its corporate charter, bylaws, and all amendments thereto; (B)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 Norwich 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 Norwich Stock Purchase Transaction; (C)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 (D)the identity of its current directors, common stock holders and other equity holders, as well as their respective percentage ownership interests. (B)OPINION OF COUNSEL. The Agent shall have received the favorable opinion of counsel for the Borrower, Berry UK, Norwich and the Subsidiary Guarantors addressed to the Agent and the Lenders in form satisfactory to the Agent. The Agent agrees that local counsel opinion shall be required only for England. (C)ORGANIZATIONAL DOCUMENTS - SUBSIDIARY GUARANTORS. The Agent shall have received for each Subsidiary Guarantor: (i)a certificate of good standing certified by the Secretary of State, or other appropriate Governmental Authority, of the state of incorporation; (ii)a certificate of qualification to do business certified by the Secretary of State or other Governmental Authority of each state in which each Subsidiary Guarantor conducts business; (iii)a certificate dated as of the date of this Agreement by the Secretary or an Assistant Secretary of each Corporate Guarantor covering: (A)true and complete copies of the its corporate charter, bylaws, and all amendments thereto; (B)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; (C)the incumbency, authority and signatures of its officers to sign the Guaranty and all other Financing Documents to which it is a party; (D)the identity of it's current directors, common stock holders and other equity holders, as well as their respective percentage ownership interests; (iv)the favorable opinion of counsel for the Subsidiary Guarantors addressed to the Agent and the Lenders and in form satisfactory to the Agent. (D)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 Norwich Stock Purchase Documents, and such consents, licenses and approvals shall be in full force and effect. (E)NOTES. The Agent shall have received for delivery to each of the Lenders the UK Term Note, the UK Revolving Credit Notes, 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 Norwich, as applicable, and attested by a duly authorized representative of the Borrower, Berry UK and Norwich, as applicable. (F)FINANCING DOCUMENTS AND COLLATERAL. The Borrower, Berry UK, Norwich 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 THE COLLATERAL (The Collateral). (G)OTHER FINANCING DOCUMENTS. In addition to the Financing Documents to be delivered by the Borrower, Berry UK and/or Norwich, the Agent shall have received the Financing Documents duly executed and delivered by Persons other than the Borrower, Berry UK or Norwich. (H)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. (I)PAYMENT OF FEES. The Agent and the Lenders shall have received payment of any Fees due on or before the date of this Agreement. (J)COLLATERAL DISCLOSURE LIST. The Borrower, Berry UK, Norwich and each Subsidiary Guarantor shall have delivered the Collateral Disclosure List required under the provisions of COLLATERAL DISCLOSURE LIST. (Collateral Disclosure List) hereof duly executed by a Responsible Officer of the Borrower, Berry UK, Norwich and each Subsidiary Guarantor, as appropriate. The Agent and the Lenders acknowledge and agree that the Borrower and each Subsidiary Guarantor previously delivered a Collateral Disclosure List to the Agent on the First Closing Date and an additional Collateral Disclosure List relating to Berry Design on or about May 13, 1997, and that, accordingly, neither the Borrower nor any Subsidiary Guarantor shall be required to furnish to the Agent a new Collateral Disclosure List, but shall be required only to update the information contained in the previous Collateral Disclosure Lists furnished to the Agent to the extent such information has changed in any material respect. (K)RECORDINGS AND FILINGS. The Borrower, Berry UK, Norwich 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. (L)INSURANCE CERTIFICATE. The Agent shall have received an insurance certificate in accordance with the provisions of (h) Insurance. The Borrower, Berry UK and Norwich 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 Norwich) 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 Norwich 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, 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 thereb (Insurance) and (q) Insurance With Respect to Equipment and Inventory. (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 Berry UK and Norwich. (M)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. (N)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. (O) FIELD EXAMINATION. The Agent shall have completed a field examination and audit of the business, operations and income of the Borrower, Berry UK, Norwich 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. (P)APPRAISAL. The Agent shall have received appraisals of all real and personal property owned by the Borrower, Berry UK, Norwich 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. (Q)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. (R)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 Berry UK and fully executed irrevocable stock powers from the holders of all such stock certificates. (S)NORWICH STOCK PURCHASE AGREEMENT TRANSACTION. (i)The Norwich 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 Norwich Stock Purchase Agreement and all applicable Laws. (ii)The Agent shall have received photocopies of all Norwich Stock Purchase Documents executed, delivered and/or furnished in connection with the Norwich Stock Purchase Transaction, together with a certificate signed by a Responsible Officer of the Borrower, Berry UK and Norwich certifying that the Norwich Stock Purchase Agreement and the other Norwich 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. (T) 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, Norwich 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. (U)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, 1997 and for Norwich for the fiscal year ending October 31, 1997, 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 Norwich, the Borrower and its Subsidiaries for fiscal years , all prepared in accordance with GAAP. SECTION 5.2CONDITIONS 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: (A)DEFAULT. There shall exist no Event of Default or Default hereunder. (B)REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Borrower, Berry UK and Norwich contained among the provisions of this Agreement shall be true 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 (K)FINANCIAL CONDITION. (Financial Condition), shall also be deemed to cover financial statements furnished from time to time to the Agent pursuant to (a)Financial Statements. The Borrower shall furnish to the Agent for distribution to the Lender (Financial Statements). (C)ADVERSE CHANGE. No material adverse change shall have occurred in the condition (financial or otherwise), operations or business of the Borrower, Berry UK, Norwich or any Subsidiary Guarantor which would, in the good faith judgment of the Agent, materially impair the ability of the Borrower, Berry UK, Norwich or any Subsidiary Guarantor to pay or perform any of the Obligations. (D)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 6.1AFFIRMATIVE COVENANTS. So long as any of the Obligations (or any the Commitments therefor) shall be outstanding hereunder, the Borrower, Berry UK and Norwich agree jointly and severally with the Agent and the Lenders as follows: (A)FINANCIAL STATEMENTS. The Borrower shall furnish to the Agent for distribution to the Lenders: (I)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, Norwich and all other Subsidiaries, prepared in accordance with GAAP and examined and certified 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, Norwich 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, Norwich 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 (A)FINANCIAL STATEMENTS., 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. (II)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, Norwich 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. (III)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, Norwich 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 event has occurred which constitutes a Default or an Event of Default hereunder, and, if so, stating the facts with respect thereto. (IV)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, Norwich 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. (V) 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: (E) 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; (F) 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 (G) 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. (VI) MONTHLY REPORTS - UK BORROWING BASE. As part of the UK Borrowing Base Certificate, Berry UK and Norwich 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: (A) a detailed aging schedule of all Accounts for Berry UK and Norwich by Account Debtor, in such detail, and accompanied by such supporting information, as the Agent may from time to time reasonably request; (B) 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 (C) a listing of all Inventory of Berry UK and Norwich by component, category and location, in such detail, and accompanied by such supporting information as the Agent may from time to time reasonably request. (VII) ANNUAL BUDGET AND PROJECTIONS. Commencing with fiscal year 1997, 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: (A) a consolidated and consolidating budget and pro forma financial statements on a month-to-month basis for the following fiscal year, and (B) 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, Norwich and all other Subsidiaries. (VIII) AMENDMENTS TO SUBORDINATED DEBT LOAN DOCUMENTS. The Borrower will furnish copies of each amendment, supplement, restatement or other modification to any of the Subordinated 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. (IX) ADDITIONAL REPORTS AND INFORMATION. The Borrower, Berry UK and Norwich 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. (B)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. (C)RECORDKEEPING, RIGHTS OF INSPECTION, FIELD EXAMINATION, ETC. (i) The Borrower, Berry UK and Norwich 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. (ii) The Borrower, Berry UK and Norwich 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, Norwich 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, Berry UK, Norwich 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, Norwich and the Subsidiaries, with the officers, directors, employees and other representatives of the Borrower, Berry UK, Norwich 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. (iii) The Borrower, Berry UK and Norwich each hereby irrevocably authorizes and directs all accountants and auditors employed by the Borrower, Berry UK, Norwich and/or any Subsidiary 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, Norwich 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, Norwich and/or any or all Subsidiaries. Further, the Borrower, Berry UK, and Norwich 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, Norwich and/or any or all Subsidiaries, whether made by the Borrower, Berry UK, Norwich 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, Norwich or any Subsidiary 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. (iv) 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, Norwich or any Subsidiary Guarantor. (D)CORPORATE EXISTENCE. Except in connection with consummation of those transactions permitted by (A) CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF ASSETS. (Capital Structure), the Borrower, Berry UK and Norwich 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, Norwich or any Subsidiary Guarantor to perform the Obligations, (b) on the conduct of the operations of the Borrower, Berry UK, Norwich 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. (E)COMPLIANCE WITH LAWS. The Borrower, Berry UK and Norwich 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, Norwich or any Subsidiary Guarantor to perform the Obligations, (b) on the conduct of the operations of the Borrower, Berry UK, Norwich 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. (F)PRESERVATION OF PROPERTIES. Except as otherwise expressly permitted by the provisions of this Agreement, the Borrower, Berry UK and Norwich 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. (G) LINE OF BUSINESS. The Borrower, Berry UK and Norwich will continue and, will cause their Subsidiaries to continue, to engage substantially only in the business of manufacturing, marketing, selling and distributing plastic products. (H)INSURANCE. The Borrower, Berry UK and Norwich 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 Norwich) 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 Norwich 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, 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. (I)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 Norwich 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, Norwich and/or any Subsidiary Guarantor from wages and salaries of employees and amounts contributed by the Borrower, Berry UK, Norwich 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. (J)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. (K)NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE DEVELOPMENTS. The Borrower, Berry UK and Norwich shall promptly notify the Agent and the Lenders upon obtaining knowledge of the occurrence of: (i)any Event of Default; (ii)any Default; (iii)any litigation instituted or threatened against the Borrower, Berry UK, Norwich 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 UK, Norwich or any Subsidiary where the claims against the Borrower, Berry UK, Norwich or any Subsidiary exceed One Million Dollars ($1,000,000) and are not covered by insurance; (iv)the receipt by the Borrower, Berry UK, Norwich or any Subsidiary Guarantor of any notice, claim or demand from any Governmental Authority which alleges that the Borrower, Berry UK, Norwich 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, Norwich and the Subsidiary Guarantors, taken as a whole; (v)any other development in the business or affairs of the Borrower, Berry UK, Norwich or any of their Subsidiaries which is materially adverse to the Borrower and its Subsidiaries taken as a whole; and (vi)any discovery or determination by the Borrower or any Subsidiary that any computer applications that is material to any of their respective business and operations will not be Year 2000 Compliant 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. (L)HAZARDOUS MATERIALS; CONTAMINATION. The Borrower, Berry UK and Norwich each agrees to: (i)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, Norwich or any Subsidiary Guarantor or for which the Borrower, Berry UK, Norwich 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 expressly described in 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; (ii)promptly comply with any Laws, the noncompliance with which would have a materially adverse effect on the Borrower, Berry UK, Norwich 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; (iii)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, Norwich or any Subsidiary Guarantor for which the Borrower, Berry UK, Norwich or any Subsidiary Guarantor is, or is claimed 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 Norwich 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 Norwich with respect to such indemnification shall be limited to claims which arise solely from property owned, operated or controlled by Berry UK and/or Norwich. (M)FINANCIAL COVENANTS. (I)TANGIBLE CAPITAL FUNDS. The Borrower, Berry UK, Norwich and each of 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, 1998 $22,000,000 September 30, 1998 $22,500,000 December 31, 1998 $22,000,000 March 31, 1999 $22,500,000 June 30, 1999 $24,000,000 September 30, 1999 $26,000,000 December 31, 1999 $30,000,000 March 31, 2000 $30,500,000 June 30, 2000 $33,000,000 September 30, 2000 $39,000,000 December 31, 2000 $44,000,000 March 31, 2001 $46,000,000 June 30, 2001 $49,000,000 September 30, 2001 $54,000,000 December 31, 2001 $62,000,000
(II)FUNDED DEBT TO EBITDA. The Borrower, Berry UK, Norwich and each Subsidiary Guarantor, 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, 1998 5.00 to 1.00 September 30, 1998 4.50 to 1.00 December 31, 1998 4.00 to 1.00 March 31, 1999 4.00 to 1.00 June 30, 1999 3.75 to 1.00 September 30, 1999 3.75 to 1.00 December 31, 1999 3.50 to 1.00 March 31, 2000 3.50 to 1.00 June 30, 2000 3.25 to 1.00 September 30, 2000 3.25 to 1.00 December 31, 2000 3.00 to 1.00 March 31, 2001 3.00 to 1.00 June 30, 2001 3.00 to 1.00 September 30, 2001 3.00 to 1.00 December 31, 2001 3.00 to 1.00
In addition, Berry UK and Norwich, on a consolidated basis, will not permit, tested as of the last day of each fiscal quarter commencing December 31, 1998 and calculated on a rolling four-quarter basis (until such time as four quarters have been achieved, calculation will be annualized), 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 (III)INTEREST COVERAGE RATIO. The Borrower, Berry UK, Norwich and each Subsidiary Guarantor will maintain, on a consolidated basis and tested as of the last day of each fiscal quarter in each fiscal year for the three (3), six (6), nine (9) or twelve (12) month period of such fiscal year, as appropriate, ending on that date, an Interest Coverage Ratio of not less than the following amounts as of the following dates:
DATE RATIO June 30, 1998 2.00 to 1.00 September 30, 1998 2.00 to 1.00 December 31, 1998 2.00 to 1.00 March 31, 1999 2.00 to 1.00 June 30, 1999 2.00 to 1.00 September 30, 1999 2.00 to 1.00 December 31, 1999 2.50 to 1.00 March 31, 2000 2.50 to 1.00 June 30, 2000 2.50 to 1.00 September 30, 2000 2.50 to 1.00 December 31, 2000 2.50 to 1.00 March 31, 2001 2.50 to 1.00 June 30, 2001 2.50 to 1.00 September 30, 2001 2.50 to 1.00 December 31, 2001 2.50 to 1.00
(IV)FIXED CHARGE COVERAGE RATIO. The Borrower, Berry UK, Norwich and each of the Subsidiary Guarantor 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, 1998 1.00 to 1.00 December 31, 1999 1.00 to 1.00 December 31, 2000 1.00 to 1.00 December 31, 2001 1.00 to 1.00
In addition, Berry UK and Norwich will maintain, on a consolidated basis and tested as of the last day of each fiscal quarter, commencing December 31, 1998 and calculated on a rolling four-quarter basis (until such time s four quarters have been achieved, calculation will be annualized), a Fixed Charge Coverage Ratio of not less than 1.0 to 1.0 (V)DEBT SERVICE COVERAGE RATIO. The Borrower, Berry UK, Norwich and each Subsidiary Guarantor will maintain, on a consolidated basis and tested as of the last day of each fiscal quarter in each fiscal year for the three (3), six (6), nine (9) or twelve (12) month period of such fiscal year, as appropriate, ending on that date, a Debt Service Coverage Ratio of not less than 1.50 to 1.0. (N)COLLECTION OF ACCOUNTS. Until the occurrence of an Event of Default, the Borrower, Berry UK, Norwich 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 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, Norwich and each of the Subsidiaries may deem advisable; and (c) the granting, in the ordinary course of business, to any Account Debtor, any rebate, refund or adjustment to which the Account Debtor may be lawfully entitled, 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, Norwich 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 Norwich. The Agent shall not have any duty to, and the Borrower, Berry UK and Norwich 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. (O)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. (P)INVENTORY. With respect to the Inventory, the Borrower, Berry UK, Norwich 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, Norwich 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 Norwich to the contrary following the occurrence of an Event of Default. (Q)INSURANCE WITH RESPECT TO EQUIPMENT AND INVENTORY. The Borrower, Berry UK and Norwich 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 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 Norwich 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. (R)MAINTENANCE OF THE COLLATERAL. Except as permitted by Section (a) Capital Structure, Merger, Acquisition or Sale of Assets. (Capital Structure), the Borrower, Berry UK and Norwich 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. (S)DEFENSE OF TITLE AND FURTHER ASSURANCES. At its expense, the Borrower, Berry UK and Norwich 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 Norwich 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 Norwich, 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 3.7SUBSIDIARY GUARANTOR ASSETS. (Subsidiary Guarantor Assets)), subject only to the Permitted Liens. The Agent understands and will require that the Borrower, Berry UK and Norwich 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, Norwich or a Subsidiary Guarantor or the Agent, the Borrower, Berry UK and/or Norwich, 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 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 Norwich 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 Norwich 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 Norwich, 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 (S)DEFENSE OF TITLE AND FURTHER ASSURANCES. (T)BUSINESS NAMES; LOCATIONS. The Borrower, Berry UK and Norwich 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, Norwich or the applicable Subsidiary Guarantor conducts its business, (b) any change of the location of the chief executive office of the Borrower, Berry UK, Norwich 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. (U)SUBSEQUENT OPINION OF COUNSEL AS TO RECORDING REQUIREMENTS. In the event that the Borrower, Berry UK, Norwich 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, Norwich 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. (V)USE OF PREMISES AND EQUIPMENT. The Borrower, Berry UK and Norwich 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 (a) after and during the continuance of a Default or an Event of Default, 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 leased property. (W)PROTECTION OF COLLATERAL. The Borrower, Berry UK and Norwich 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 Norwich 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. (X)APPLICATION OF NET CASUALTY PROCEEDS. The Borrower, Berry UK and Norwich each agrees that Net Casualty Proceeds with respect to any Assets of the Borrower, Berry UK, Norwich 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 Norwich 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 6.2NEGATIVE 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 Norwich each agrees with the Agent and the Lenders that: (A)CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF ASSETS. Except as otherwise permitted by the provisions of Section (C)PURCHASE OR REDEMPTION OF SECURITIES, DIVIDEND RESTRICTIONS. (Purchase of Redemption of Securities), neither the Borrower, Berry UK nor Norwich will alter or amend, nor will the Borrower permit any Subsidiary Guarantor to alter or amend, its 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; except that prior to the occurrence of a Default or an Event of Default, the following shall be permitted: (i)Permitted Acquisitions; (ii)Permitted Asset Dispositions; (iii)mergers or consolidations (i) among and between the Borrower and/or any Subsidiary Guarantor, (ii) among and between Berry UK and Norwich, and (iii) among and between any Subsidiaries of the Borrower other than Subsidiary Guarantors, Berry UK and/or Norwich; 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 (B)SUBSIDIARIES. (Subsidiaries); (iv)investments as and to the extent permitted by the provisions of Section INVESTMENTS, LOANS AND OTHER TRANSACTIONS. (Investments, Loans and Other Transactions), including, without limitation, the issuance of equity by any Subsidiary to the Borrower or another Subsidiary; (v)the use and disposition of Net Casualty Proceeds, but only as and to the extent permitted by the provisions of SECTION (X) APPLICATION OF NET CASUALTY PROCEEDS. (Application of Net Casualty Proceeds); (vi)South Carolina IRB Lease Transfers. Any consent of the Agent to an Asset Disposition which does not constitute a Permitted Asset Disposition may be conditioned on a specified use of the Net Proceeds generated by such Asset Disposition, provided, however, that the Agent and the Lenders (i) acknowledge that in the case of a disposition of assets subject to the South Carolina IRB Lease Agreement, the proceeds must be first applied to repay the South Carolina IRB, but (ii) reserve all rights and remedies (including, without limitation, those arising under Section (S) DEFENSE OF TITLE AND FURTHER ASSURANCES. (Defense of Title) and comparable provisions of the Security Agreement) in the right of the Borrower or any one or more of the Guarantors to receive the proceeds of such repayment as a holder of the South Carolina Bond or otherwise. (B)SUBSIDIARIES. Neither the Borrower, Berry UK nor Norwich will 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 updated through the date of this Agreement and (b) the creation or acquisition of Subsidiary Guarantors. 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). (C)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, (v) so long as the same may be effected with the payment of nominal consideration, the redemption of the South Carolina IRB in conjunction with the exercise of the South Carolina IRB Lease Purchase Option and (vi) Distributions to the Borrower from its Subsidiaries. (D)INDEBTEDNESS. Neither the Borrower, Berry UK nor Norwich 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: (i)the Obligations; (ii)current accounts payable arising in the ordinary course; (iii)Indebtedness secured by Permitted Liens; (iv)Subordinated Indebtedness; provided that the principal amount of all such Subordinated Indebtedness shall not at any time exceed, in the aggregate, Twenty Million Dollars ($20,000,000); (v)Indebtedness of the Borrower, Berry UK, Norwich and/or any Subsidiary existing on the date hereof and reflected on the financial statements furnished pursuant to (K) FINANCIAL CONDITION. (Financial Condition); (vi)Unsecured letters of credit, bankers' acceptances and/or (i) secured Interest Rate/Currency Protection Agreements between the Borrower, Berry UK, Norwich or a Subsidiary Guarantor and NationsBank and/or (ii) unsecured Interest Rate Protection/Currency Agreements between the Borrower, Berry UK, Norwich 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; (vii)Indebtedness for Borrowed Money incurred by the Borrower, Norwich, 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, Norwich, 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 (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 Five Hundred Thousand Dollars ($500,000); (viii)Capital Leases; (ix)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 Norwich (the "UK Intercompany Indebtedness"), provided that the aggregate amount of such UK Intercompany Indebtedness (together with any investment by the Borrower in Berry UK and/or Norwich permitted by the terms of this Agreement, shall not exceed, in the aggregate, Five Hundred Thousand Dollars ($500,000); (x)Indebtedness for Borrowed Money as set forth on Schedule (n) Indebtedness FOR BORROWED MONEY.; (xi)Other unsecured Indebtedness for Borrowed Money in aggregate principal amount not to exceed at any time One Million Dollars ($1,000,000); (xii)Indebtedness permitted under the provisions of Section INVESTMENTS, LOANS AND OTHER TRANSACTIONS. (Investments, Loans and Other Transactions), (xiii)Indebtedness of the Borrower and Berry UK under the Norwich Stock Purchase Agreement, and. (xiv)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, Norwich 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. Notwithstanding the foregoing, neither the Borrower, Berry UK, Norwich 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. (E)INVESTMENTS, LOANS AND OTHER TRANSACTIONS. Except as otherwise provided in this Agreement, the Borrower, Berry UK, and Norwich 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 (K) FINANCIAL CONDITION. (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 INVESTMENTS, LOANS AND OTHER TRANSACTIONS. 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 in any such Subsidiary Guarantor, (vii) the Borrower's acquisition, creation and ownership of Berry UK and any existing or additional capital contributions in Berry UK or Norwich; provided that the aggregate amount of any such existing or additional capital contributions, together with any intercompany indebtedness between the Borrower and Berry UK permitted by the terms of this Agreement, may not exceed at any time in the aggregate Five Hundred Thousand Dollars ($500,000), (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), and (ix) investments permitted by Section (A) CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF ASSETS. (Capital Structure), (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 Norwich otherwise permitted by the provisions of Section (D) INDEBTEDNESS. (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, 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, (iv) South Carolina IRB Lease Transfers, and (v) 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, Berry UK covenants and agrees that it shall own no other Assets or investments other than the capital stock of Norwich. (F)CAPITAL EXPENDITURES. Except for Permitted Acquisitions and permitted reinvestments of Permitted Asset Dispositions, neither the Borrower, Berry UK nor Norwich will or will permit any Subsidiary to, directly or indirectly, make any Capital Expenditures in the aggregate for the Borrower, Berry UK, Norwich and their respective Subsidiaries (taken as a whole) in amount which exceed the following amounts at any time during the following fiscal years (for each fiscal year, the "Capital Expenditure Ceiling"):
FISCAL YEAR CAPITAL EXPENDITURE CEILING 1997 $19,000,000 1998 $23,000,000 1999 $26,000,000 2000 $27,000,000 2001 $29,000,000
If in any given fiscal year, the total Capital Expenditures of the Borrower, Berry UK, Norwich 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. (G)STOCK OF SUBSIDIARIES. Neither the Borrower, Berry UK nor Norwich 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 (A) CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF ASSETS. (Capital Structure) or Section (F) CAPITAL EXPENDITURES. (Capital Expenditures)) or permit any Subsidiary to issue any additional shares of its capital stock except pro rata to its stockholders. (H)SUBORDINATED INDEBTEDNESS. Neither the Borrower, Berry UK nor Norwich will, or will permit any Subsidiary to make: (i)(i) any payment on account of the Subordinated Debt in violation of the subordination provisions 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; (ii)any amendment or modification of to the documents evidencing or securing the Subordinated Indebtedness; and (iii)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. (I)LIENS. The Borrower, Berry UK and Norwich 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. (j)Transactions with Affiliates. Neither the Borrower, Berry UK, Norwich 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, Norwich or any Subsidiary then 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 (j) Transactions with Affiliates., between the Borrower and First Atlantic, (d) the payment of Distributions permitted by Section (C)PURCHASE OR REDEMPTION OF SECURITIES, DIVIDEND RESTRICTIONS. (c) Purchase or Redemption of Securities, Dividend Restrictions. (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 and Norwich as and to the extent permitted by the provisions of this Agreement. (K)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. (L) PROHIBITION ON HAZARDOUS MATERIALS. Neither the Borrower, Berry UK nor Norwich 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 Norwich or for which the Borrower, Berry UK or Norwich 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, Norwich's or any tenant's business expressly described in this Agreement, or permit any Subsidiary to do so. (M)AMENDMENTS. The Borrower will not amend or agree to amend any of the Subordinated Debt Loan Documents, any of the Senior Secured Debt Loan Documents, any of the PackerWare Merger Agreement Documents, any of the Venture Stock Purchase/Merger Documents, and/or any of the Norwich Stock Purchase Documents, other than in the normal course of business. (N)METHOD OF ACCOUNTING; FISCAL YEAR. The Borrower, Berry UK and Norwich each agrees that: (i)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 (A)FINANCIAL STATEMENTS. (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 (ii)it will not change or permit any Subsidiary to change, its fiscal year from a year ending on or about December 31. The Lenders understand that as of the Closing Date, the fiscal year end for Norwich is October 31. Norwich covenants and agrees to change its fiscal year end to December 31 promptly upon closing and consummation of the Norwich Stock Purchase Transaction. (O)TRANSFER OF COLLATERAL. Neither the Borrower, Berry UK, Norwich 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 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 Norwich 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, or (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. (P)SALE AND LEASEBACK. Neither the Borrower, Berry UK, Norwich 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 subsection (h) or subsection (l) of the definition of Permitted Asset Disposition. ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES SECTION 7.1EVENTS 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: (A)FAILURE TO PAY. The failure of the Borrower, Berry UK and/or Norwich 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; (B)BREACH OF REPRESENTATIONS AND WARRANTIES. Any representation or warranty made 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. (C)FAILURE TO COMPLY WITH CERTAIN COVENANTS. The failure of the Borrower, Berry UK or Norwich 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 (A) FINANCIAL STATEMENTS. (Financial Statements), (i) The Borrower, Berry UK and Norwich 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. (Bookkeeping, Rights of Inspection, Field Examination, Etc.) with respect to inspection rights only, Section (H) INSURANCE. (Insurance), FINANCIAL COVENANTS. (Financial Covenants), (Q) INSURANCE WITH RESPECT TO EQUIPMENT AND INVENTORY. (Insurance with Respect to Equipment), (S) DEFENSE OF TITLE AND FURTHER ASSURANCES. (Defense of Title and Further Assurances), (T) BUSINESS NAMES; LOCATIONS. (Business Names; Locations), or NEGATIVE COVENANTS. (Negative Covenants). (D)FAILURE TO COMPLY WITH OTHER COVENANTS. The failure of the Borrower, Berry UK or Norwich 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 (A) FAILURE TO PAY. (Failure to Pay), Section (B) BREACH OF REPRESENTATIONS AND WARRANTIES. (Breach of Representations and Warranties) or Section (C) FAILURE TO COMPLY WITH CERTAIN COVENANTS. (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 Norwich, as appropriate, by the Agent. (E)DEFAULT UNDER OTHER FINANCING DOCUMENTS OR OBLIGATIONS. The failure of the Borrower, Berry UK, Norwich 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 DEFAULT AND RIGHTS AND REMEDIES, which failure shall remain unremedied for a period of thirty (30) days after written notice thereof to the Borrower, Berry UK and/or Norwich, as appropriate, by the Agent or the occurrence of an Event of Default under any of the other Financing Documents as defined therein. (F)RECEIVER; BANKRUPTCY. The Borrower, Berry UK, Norwich 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. (G)INVOLUNTARY BANKRUPTCY, ETC. (i) An order for relief shall be entered in any involuntary case brought against the Borrower, Berry UK, Norwich or any Guarantor under the Bankruptcy Code or comparable Law, or (b) any such case shall be commenced against the Borrower, Berry UK, Norwich 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, Norwich or any Guarantor (i) adjudicating the Borrower, Berry UK, Norwich or any Guarantor bankrupt or insolvent, or (ii) appointing a receiver, trustee or liquidator of the Borrower, Berry UK, Norwich 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. (H)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, Norwich and/or any or all of the Guarantors, and the failure by the Borrower, Berry UK, Norwich 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. (I)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. (J)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, Norwich 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. (K)CHALLENGE TO AGREEMENTS. The Borrower, Berry UK, Norwich 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. (L)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, Norwich and the Subsidiary Guarantors, taken as a whole. (M)CHANGE IN OWNERSHIP. (i)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 Berry UK and each Subsidiary Guarantor (except pursuant to any transaction permitted by (a) CAPITAL STRUCTURE, MERGER, ACQUISITION OR SALE OF ASSETS. (Capital Structure) or (B) SUBSIDIARIES. (Subsidiaries)), (b) Berry UK 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 Norwich, (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. (N)LIQUIDATION, TERMINATION, DISSOLUTION, CHANGE IN MANAGEMENT, ETC. The Borrower, Berry UK, Norwich or any Guarantor shall liquidate, dissolve or terminate its existence, except as otherwise expressly permitted by the provisions of NEGATIVE COVENANTS. (Negative Covenants). (O)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. SECTION 7.2REMEDIES. Upon the occurrence of any Event of Default, the Agent and/or NationsBank, 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: (A)ACCELERATION. The Agent may declare any or all of the Obligations to be immediately due and payable and NationsBank 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 Norwich each hereby waives. (B)FURTHER ADVANCES. The Agent and/or NationsBank, as applicable, may from time to time without notice to the Borrower, Berry UK or Norwich 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 (F) RECEIVER; BANKRUPTCY. (Receiver; Bankruptcy) or (G) INVOLUNTARY BANKRUPTCY, ETC. (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 any kind, all of which are hereby expressly waived by the Borrower, Berry UK and Norwich. (c) UNIFORM COMMERCIAL CODE. The Agent and NationsBank 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 NationsBank, the Borrower shall assemble the Collateral and make it available to the Agent or NationsBank, as applicable, at a place designated by the Agent or NationsBank. The Agent, NationsBank 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 NATIONSBANK 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. 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 follow (Notices), or such other address of the Borrower which may from time to time be shown on the Agent's and/or NationsBank's 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 NationsBank 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 NationsBank 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 NationsBank 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 NationsBank 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 NationsBank 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 Agent and NationsBank shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral consisting of securities so sold. (D)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 NationsBank may (but shall be under no obligation to), without notice to the Borrower, Berry UK and/or Norwich and upon the occurrence of an Event of Default the Borrower, Berry UK and Norwich each hereby irrevocably appoints each of the Agent and NationsBank as its attorney-in-fact, with power of substitution, in the name of NationsBank, the Agent and/or any or all of the Lenders and/or in the name of the Borrower, Berry UK and/or Norwich or otherwise, for the use and benefit of NationsBank, the Agent and the Lenders, but at the cost and expense of the Borrower, Berry UK and Norwich, as and to the extent permitted by the provisions of this Agreement: (i)request any Account Debtor obligated on any of the Accounts to make payments thereon directly to the Agent or NationsBank, with the Agent and/or NationsBank taking control of the cash and non-cash proceeds thereof; (ii)compromise, extend or renew any of the Collateral or deal with the same as it may deem advisable, (iii)make exchanges, substitutions or surrenders of all or any part of the Collateral; (iv)copy, transcribe, or remove from any place of business of the Borrower, Berry UK, Norwich 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, Norwich's or any Subsidiary's place(s) of business as may be reasonably necessary to administer, control and collect the Collateral; (v)repair, alter or supply goods if necessary to fulfill in whole or in part the purchase order of any Account Debtor; (vi)demand, collect, receipt for and give renewals, extensions, discharges and releases of any of the Collateral; (vii)institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Collateral; (viii)settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Collateral or any legal proceedings brought in respect thereof; (ix)endorse or sign the name of the Borrower, Berry UK and/or Norwich 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; (x)notify the Post Office authorities to change the address for the delivery of mail to the Borrower, Berry UK and/or Norwich to such address or Post Office Box as the Agent or NationsBank may designate and receive and open all mail addressed to the Borrower, Berry UK and Norwich; and (xi)take any other action necessary or beneficial to realize upon or dispose of the Collateral or to carry out the terms of this Agreement. (E)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 NationsBank 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 NationsBank 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 NationsBank 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 Norwich shall remain liable to NationsBank for any deficiency. (F)PERFORMANCE BY AGENT. If the Borrower shall fail to pay the Obligations or Berry UK or Norwich fails to pay the UK Obligations, or otherwise the Borrower, Berry UK or Norwich 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 Norwich 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, Berry UK and/or Norwich, as applicable, and may enter upon the premises of the Borrower, Berry UK and/or Norwich, 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 Norwich 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, Norwich 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 Norwich. 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 NationsBank with respect to the UK Obligations. (G)OTHER REMEDIES. The Agent and NationsBank may from time to time proceed to protect or enforce the rights of NationsBank, 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 Norwich 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 (J)LIMITATIONS ON JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS. (Limitations on Joint and Several Liability) ARTICLE VIII THE AGENT SECTION 8.1APPOINTMENT. Each Lender hereby designates and appoints NationsBank 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 THE AGENT. The provisions of this THE AGENT are solely for the benefit of the Agent and the Lenders and neither the Borrower, Berry UK, Norwich 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 (A) 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 (B)APPOINTMENT OF SUCCESSOR. Upon any such notice of resignation pursuant to Section (a) (Resignation), the Requisite Lenders, with the consent of NationsBank 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. (Appointment of Successor) or as otherwise provided below. (Resignation), SECTION 8.8 COLLATERAL MATTERS. (Collateral Matters), SECTION 8.12 CONSENTS. (Consents) and CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED. (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 8.2NATURE OF DUTIES. (A)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 Norwich in connection with the extension of credit hereunder and shall make its own appraisal of the credit worthiness of the Borrower, Berry UK and Norwich 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. (B)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: (i)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; (ii)To receive all documents and items to be furnished to the Lenders under the Financing Documents; (iii)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; (iv)To act as nominee for and on behalf of the Lenders in and under this Agreement and the other Financing Documents; (v)To arrange for the means whereby the funds of the Lenders are to be made available to the Borrower, Berry UK and/or Norwich; (vi)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, Norwich or other Person; (VII)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 CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED. (Circumstances All Lenders Required) and 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, the Borrower, Berry UK and Norwich and to the extent provided in CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED. by an agreement in writing signed by all of the Lenders, the Borrower, Berry UK and Norwich. 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 Norwich therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Borrower, Berry UK, Norwich 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 Law (Amendments; Waivers); (viii)To deliver to the Borrower, Berry UK, Norwich and other Persons, all requests, demands, approvals, notices, and consents received from any of the Lenders; (ix)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; (x)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 (xi)To take such other actions as may be requested by the Requisite Lenders. SECTION 8.3RIGHTS, 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 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 8.4RELIANCE. 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 8.5INDEMNIFICATION. 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 INDEMNIFICATION. shall survive the payment in full of the Obligations and the termination of this Agreement. SECTION 8.6NATIONSBANK INDIVIDUALLY. With respect to its Commitments and the Loans made by it, and the Notes issued to it, NationsBank 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 NationsBank in its individual capacity as a Lender or one of the Requisite Lenders. NationsBank 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 NationsBank 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, Norwich 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 8.7SUCCESSOR AGENT. (A)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 (B) APPOINTMENT OF SUCCESSOR. Upon any such notice of resignation pursuant to Section (A)RESIGNATION. (Resignation), the Requisite Lenders, with the consent of NationsBank 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 abov (Appointment of Successor) or as otherwise provided below. (B)APPOINTMENT OF SUCCESSOR. Upon any such notice of resignation pursuant to Section (A) RESIGNATION. (Resignation), the Requisite Lenders, with the consent of NationsBank 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. (C)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 THE AGENT 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. SECTION 8.8COLLATERAL MATTERS. (A)RELEASE OF COLLATERAL. The Lenders hereby irrevocably authorize the Agent and NationsBank, 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: (i)upon termination of the Commitments and payment and satisfaction of all Obligations and expiration or termination of all Letters of Credit and all Bond Letters of Credit; (ii)constituting property being sold or disposed of if the Borrower, Berry UK, Norwich or a Subsidiary Guarantor certifies to the Agent and/or NationsBank, as applicable, that the sale or disposition is made in compliance with the provisions of this Agreement (and the Agent and NationsBank may rely in good faith conclusively on any such certificate, without further inquiry); (iii)constituting property leased to the Borrower, Berry UK, Norwich 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 (iv)constituting property covered by Permitted Liens with lien priority superior to those Liens in favor or for the benefit of NationsBank, the Agent or the Lenders. In addition during any fiscal year of the Borrower (x) the Agent and NationsBank may release Collateral having a book value of not more than 5% of the book value of all Collateral, (y) the Agent and NationsBank, 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 NationsBank, with the consent of the Lenders having 90% of (i) the Commitments and (ii) Loans, may release all the Collateral. (B)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 (A)RELEASE OF COLLATERAL. (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 (a) Release of Collateral. (Release of Collateral). So long as no Event of Default is then continuing, upon receipt by the Agent of confirmation from the requisite percentage of the Lenders, of its authority to release any particular item or types of property covered by this Agreement or the Financing 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. (C) ABSENCE OF DUTY. The Agent shall have no obligation whatsoever to any Lender, the Borrower, Berry UK, Norwich 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, Norwich 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 (C) ABSENCE OF DUTY 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 8.9AGENCY 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 Eighty Thousand Dollars ($80,000), payable quarterly in arrears in installments of $20,000 each. The initial Agency Fee shall be payable on the Second Closing Date, and each Agency Fee thereafter shall be payable in advance on the first day of each quarterly period, 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 8.10AGENCY 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. SECTION 8.11EXERCISE 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 8.12CONSENTS. (a)In the event the Agent or NationsBank requests the consent of a Lender and does not receive a written denial thereof, or a written notice from a Lender that due cause 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, NationsBank the Borrower, Berry UK or Norwich, as the case may be, requests the consent of a Lender and such consent is denied, then NationsBank or the Borrower, Berry UK or Norwich, as the case may be, may, at their option, require such Lender to assign its interest in the Loans and Commitments to NationsBank or such other lender as shall be acceptable to the Borrower, Berry UK and/or Norwich, as the case may be, NationsBank 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 NationsBank or the Borrower, Berry UK or Norwich, as the case may be, elects to require any Lender to assign its interest to NationsBank or such other lender as shall be acceptable to the Borrower, Berry UK, or Norwich, as the case may be, and the Agent and NationsBank will so notify such Lender in writing within thirty (30) days following such Lender's denial, and such Lender will assign its interest to NationsBank or such other lender as shall be acceptable to the Borrower, Berry UK or Norwich, as the case may be, NationsBank and the Agent, no later than five (5) days following receipt of such notice. (c)The Lenders each hereby authorize the Agent and/or NationsBank, 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 NationsBank, 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, NationsBank acknowledges and agrees that to the extent any Lender has made all required payments to NationsBank on account of its participation interests in the UK Obligations in accordance with the terms of this Agreement, such Lender shall be deemed a "Lender" for purposes of consents and similar actions required to be contained by NationsBank 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 NationsBank with respect to the UK Obligations in the same respect. SECTION 8.13CIRCUMSTANCES 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 NationsBank of payments made by the Borrower, Berry UK or Norwich 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; and (i)modify, waiver or otherwise change the requirements of Section 2.1.13. SECTION 8.14DISSEMINATION OF INFORMATION. The Agent will provide the Lenders with any information received by the Agent from the Borrower, Berry UK or Norwich 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 8.15DISCRETIONARY 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 9.1NOTICES. 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 Norwich P.O. Box 959 Evansville, Indiana 47710-0959 Attention: President with a copy to Ilan S. Nissan, Esquire O'Sullivan, Graev & Karabell, LLP 30 Rockefeller Center 41{st} Floor New York, New York 10112 with a copy to: Joseph S. Levy Vice President First Atlantic Capital, Ltd. 135 East 57th Street, 29th Floor New York, New York 10022 Agent: NATIONSBANK, N.A. NationsBank Business Credit 100 S. Charles Street Baltimore, Maryland 21201 Attention: Alison Arbuthnot with a copy to: Shaun F. Carrick, Esquire Miles & Stockbridge P.C. 10 Light Street Baltimore, Maryland 21202 AGENT'S LONDON OFFICE NationsBank - Europe New Broad Street House 35 New Broad Street London, England EC2MINH Attention: Mr. Aidan Fisher NATIONSBANK: NationsBank, N.A. NationsBank 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. John Stanescki Heller: Mr. Tom Bukowski Senior Vice President Heller Financial, Inc. 150 East 42{nd} Street 7{th} Floor New York, New York 10017
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 9.2AMENDMENTS; 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, the Borrower, Berry UK and Norwich and to the extent provided in CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED. by an agreement in writing signed by all of the Lenders, the Borrower, Berry UK and Norwich. 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 Norwich therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Borrower, Berry UK, Norwich 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 CIRCUMSTANCES WHERE CONSENT OF ALL OF THE LENDERS IS REQUIRED.: (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 Norwich in any case shall entitle the Borrower, Berry UK or Norwich 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. SECTION 9.3CUMULATIVE 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 Norwich 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 (J)LIMITATIONS ON JOINT AND SEVERAL LIABILITY FOR OBLIGATIONS. (Limitations on Joint and Several Liability); (b)proceed against the Borrower, Berry UK or Norwich 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 Norwich 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 Norwich 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 9.4SEVERABILITY. 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; (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 9.5ASSIGNMENTS 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. NationsBank agrees that if at any time NationsBank sells one hundred percent (100%) of all of its Commitments, NationsBank shall resign as Agent and the remaining Lenders shall select a replacement Agent in accordance with the provisions of this Agreement. In addition, NationsBank agrees that for so long as NationsBank is the Agent, unless otherwise agreed by the Lenders, NationsBank shall continue to hold a Pro Rata Share of the Commitments at least equal to the Pro Rata Share of the Lender (other than NationsBank) 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 ASSIGNMENTS BY LENDERS., the Borrower, Berry UK and Norwich 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 ASSIGNMENTS BY LENDERS., without the prior written consent of the Borrower, Berry UK or Norwich, 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 NationsBank, 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 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 Norwich. 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 9.6PARTICIPATIONS 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, Norwich, 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 9.7DISCLOSURE OF INFORMATION BY LENDERS. (a)In connection with any sale, transfer, assignment or participation by any Lender in accordance with ASSIGNMENTS BY LENDERS. (Assignments by Lenders) or SECTION 9.6 PARTICIPATIONS BY LENDERS. (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). SECTION 9.8SUCCESSORS AND ASSIGNS. This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Borrower, Berry UK, Norwich, the Agent and the Lenders and their respective heirs, personal representatives, successors and assigns, except that neither the Borrower, Berry UK nor Norwich 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 9.9CONTINUING AGREEMENTS. All covenants, agreements, representations and warranties made by the Borrower, Berry UK and/or Norwich 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 Norwich 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, Norwich 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 9.10ENFORCEMENT 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 Norwich 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 Norwich, 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 execution and delivery of this Agreement, the repayment of the other Obligations and shall survive the termination of this Agreement. SECTION 9.11APPLICABLE LAW; JURISDICTION. (A)GOVERNING LAW. As a material inducement to the Agent and the Lenders to enter into this Agreement, the Borrower, Berry UK and Norwich 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 Norwich 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. (B)SUBMISSION TO JURISDICTION. The Borrower, Berry UK and Norwich 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 Norwich 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 Norwich and may be enforced in any court in which the Borrower, Berry UK and/or Norwich is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Borrower, Berry UK and Norwich in one of the manners specified in this Section or as otherwise permitted by applicable Laws. (C)APPOINTMENT OF AGENT FOR SERVICE OF PROCESS. The Borrower, Berry UK and Norwich 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 Norwich 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. (D)SERVICE OF PROCESS. The Borrower, Berry UK and Norwich 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 Norwich at their respective address designated in or pursuant to SECTION 9.1NOTICES. (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Borrower, Berry UK and Norwich as their respective agent for service of process by or pursuant to this Section. The Borrower, Berry UK and Norwich 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 Norwich. 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 Norwich in the courts of any jurisdiction or jurisdictions. SECTION 9.12DUPLICATE 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 9.13HEADINGS. 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 9.14NO AGENCY. Nothing herein contained shall be construed to constitute the Borrower, Berry UK or Norwich as the agent of the Agent or any of the Lenders for any purpose whatsoever or to permit the Borrower, Berry UK or Norwich 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 Norwich'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 Norwich of any of the terms and conditions thereof. SECTION 9.15WAIVER OF TRIAL BY JURY. THE BORROWER, BERRY UK, NORWICH, THE AGENT AND THE LENDERS HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER, BERRY UK, NORWICH, 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, Norwich, the Agent and the Lenders, and the Borrower, Berry UK, Norwich, 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, Norwich, 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 9.16LIABILITY OF THE AGENT AND THE LENDERS. The Borrower, Berry UK and Norwich 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 Norwich or by accepting or approving anything required to be observed, performed or fulfilled by the Borrower, Berry UK or Norwich 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 9.17ENTIRE AGREEMENT. THIS AGREEMENT IS INTENDED BY THE AGENT, THE LENDERS, BERRY UK, NORWICH AND THE BORROWER TO BE A COMPLETE, EXCLUSIVE AND FINAL EXPRESSION OF THE AGREEMENTS CONTAINED HEREIN. NEITHER THE AGENT, THE LENDERS NOR BERRY UK, NORWICH, 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. 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 Vice President WITNESS OR ATTEST:NIM HOLDINGS LIMITED ____________________________By:_______________________(Seal) James M. Kratochvil Vice President WITNESS OR ATTEST:NORWICH INJECTION MOULDERS LIMITED _________________________By:_______________________(Seal) James M. Kratochvil Vice President WITNESS:NATIONSBANK, N.A., in its capacity as Agent _________________________By:______________________(Seal) Alison Arbuthnot Vice President WITNESS:NATIONSBANK, N.A. in its capacity as a Lender _________________________By:_______________________(Seal) Alison Arbuthnot Vice President WITNESS:GENERAL ELECTRIC CAPITAL CORPORATION in its capacity as a Lender _________________________By:_______________________(Seal) WITNESS:FLEET CAPITAL CORPORATION in its capacity as a Lender _________________________By:_______________________(Seal) WITNESS:HELLER FINANCIAL, INC. in its capacity as a Lender _________________________By:_______________________(Seal) LIST OF EXHIBITS A-1.Form of Borrowing Base Report A-2Form of UK Borrowing Base Report B.Wire Transfer Procedures C-1.Pro-Forma Financial Statements C-2Pro-Forma Balance Sheets D.Form of Compliance Certificate LIST OF SCHEDULES ScheduleSection 1.1 CERTAIN DEFINED TERMS. List of Account Debtors (concentrations) SCHEDULE(j) Litigation. Litigation SCHEDULE(n) Indebtedness FOR BORROWED MONEY. Scheduled Indebtedness for Borrowed Money SCHEDULE(T) EMPLOYEE RELATIONS. Employee Relations Disclosures SCHEDULE(u) Presence OF HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS CONTAMINATION. Hazardous Materials Disclosures SCHEDULE(v) Perfection AND PRIORITY OF COLLATERAL. Scheduled Permitted Liens SCHEDULE(x) Business NAMES AND ADDRESSES. Information on Names, Addresses and Locations SCHEDULEInvestments, Loans AND OTHER TRANSACTIONS. Permitted Investments EXHIBIT B EXHIBIT C TABLE OF CONTENTS ARTICLE I DEFINITIONS 2 Section 1.1Certain Defined Terms 2 Section 1.2Accounting Terms and Other Definitional Provisions. 76 ARTICLE II THE CREDIT FACILITIES............................................77 Section 2.1The Revolving Credit Facility....................................77 Section 2.2The Term Loan A Facility.........................................88 Section 2.3Term Loan B Facility.............................................94 Section 2.4The Letter of Credit Facility....................................98 Section 2.5The Bond Letter of Credit Facility..............................101 Section 2.6The Special Source Bond Facility................................106 Section 2.7The UK Revolving Credit Facility................................107 Section 2.8UK Term Loan Facility...........................................112 Section 2.9General Letter of Credit Provisions and Participation Provisions for UK Credit Facilities.115 Section 2.10Interest.......................................................120 Section 2.11General Financing Provisions...................................126 Section 2.12Settlement Among Lenders.......................................134 ARTICLE III THE COLLATERAL.................................................139 Section 3.1Debt and Obligations Secured....................................139 Section 3.2Grant of Liens..................................................140 Section 3.3Collateral Disclosure List......................................141 Section 3.4Personal Property...............................................143 Section 3.5Record Searches.................................................145 Section 3.6Real Property...................................................145 Section 3.7Subsidiary Guarantor Assets.....................................148 Section 3.8Costs...........................................................148 Section 3.9Release.........................................................148 Section 3.10Inconsistent Provisions........................................148 ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................148 Section 4.1Representations and Warranties..................................148 Section 4.2Survival; Updates of Representations and Warranties.............159 ARTICLE V CONDITIONS PRECEDENT.............................................160 Section 5.1Conditions to the Initial Advance and Initial Letter of Credit..160 Section 5.2Conditions to all Extensions of Credit..........................166 ARTICLE VI COVENANTS OF THE BORROWER.......................................167 Section 6.1Affirmative Covenants...........................................167 Section 6.2Negative Covenants..............................................181 ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES................................192 Section 7.1Events of Default...............................................192 Section 7.2Remedies........................................................195 ARTICLE VIII THE AGENT.....................................................199 Section 8.1Appointment.....................................................199 Section 8.2Nature of Duties................................................199 Section 8.3Rights, Exculpation, Etc........................................201 Section 8.4Reliance........................................................202 Section 8.5Indemnification.................................................204 Section 8.6NationsBank Individually........................................204 Section 8.7Successor Agent.................................................204 Section 8.8Collateral Matters..............................................204 Section 8.9Agency Fee......................................................207 Section 8.10Agency for Perfection..........................................207 Section 8.11Exercise of Remedies...........................................207 Section 8.12Consents.......................................................207 Section 8.13Circumstances Where Consent of all of the Lenders is Required..208 Section 8.14Dissemination of Information...................................209 Section 8.15Discretionary Advances.........................................209 ARTICLE IX MISCELLANEOUS...................................................209 Section 9.1Notices.........................................................209 Section 9.2Amendments; Waivers.............................................211 Section 9.3Cumulative Remedies.............................................212 Section 9.4Severability....................................................213 Section 9.5Assignments by Lenders..........................................213 Section 9.6Participations by Lenders.......................................214 Section 9.7Disclosure of Information by Lenders............................215 Section 9.8Successors and Assigns..........................................215 Section 9.9Continuing Agreements...........................................215 Section 9.10Enforcement Costs..............................................216 Section 9.11Applicable Law; Jurisdiction...................................216 Section 9.12Duplicate Originals and Counterparts...........................217 Section 9.13Headings.......................................................218 Section 9.14No Agency......................................................218 Section 9.15Waiver of Trial by Jury........................................218 Section 9.16Liability of the Agent and the Lenders.........................218 Section 9.17Entire Agreement...............................................219 SECOND AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT ----------------------------------------------- THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this "Amendment") is made as of the ___ day of August, 1998, 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 ("Berry UK"), and NORWICH INJECTION MOULDERS LIMITED, a company organized and existing under the laws of England and Wales ("Norwich"); NATIONSBANK, N.A., a national banking association, in its capacity as a lender ("NationsBank"), 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") and HELLER FINANCIAL, INC., a corporation organized and existing under the laws of the State of Delaware ("Heller") (NationsBank, Fleet, GE Capital and Heller are herein collectively referred to as the "Lenders" and individually, as a "Lender"); and NATIONSBANK, N.A., a national banking association, in its capacity as administrative and collateral agent for the Lenders (the "Agent"); Witnesseth: RECITALS -------- (a) The Lenders, the Borrower, Berry UK, Norwich and the Agent are parties to that certain Second Amended and Restated Financing and Security Agreement dated as of July 2, 1998, as amended by that certain First Amendment to Second Amended and Restated Financing and Security Agreement dated as of July 31, 1998 (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 Norwich 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) On or before August 31, 1998, the Borrower intends to offer and issue additional Subordinated Debt having an aggregate maximum principal amount of Thirty Million Dollars ($30,000,000) (the "Additional Subordinated Debt"). The Additional Subordinated Debt shall be issued substantially on the same terms and conditions as are currently applicable to the Subordinated Debt (except for certain provisions relating to asset sales which provide that the existing Subordinated Debt shall have priority as between the existing Subordinated Debt and the Additional Subordinated Debt as to any available excess proceeds from certain asset sales) and shall be guaranteed by the Subsidiary Guarantors, the Parent, Norwich and Berry UK. (c) The Borrower has requested that the Agent and the Lenders consent and agree to the issuance of the Additional Subordinated Debt and otherwise amend certain terms and conditions of the Credit Agreement. The Agent and the Lenders have so agreed; provided that, among other things, the Borrower executes and delivers this Amendment. 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, Norwich, the Lenders and the Agent hereby agree as follows: 1. The Borrower, Berry UK, and Norwich 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 Norwich contained among the provisions of the Credit Agreement are true as of the date of this Amendment 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 of the Credit Agreement is hereby amended to add the following additional definitions: "ADDITIONAL SUBORDINATED DEBT" MEANS THAT CERTAIN INDEBTEDNESS FOR BORROWED MONEY OF THE BORROWER (AND ALL GUARANTEES THEREOF BY THE BORROWER AND ITS SUBSIDIARIES) ISSUED OR INTENDED TO BE 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 THIRTY MILLION DOLLARS ($30,000,000). (b) The definition of Indenture on page 25 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "INDENTURE" MEANS (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 AND (ii) THAT CERTAIN INDENTURE ENTERED INTO OR INTENDED TO BE ENTERED INTO BY AND BETWEEN THE BORROWER AND THE UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE, WITH RESPECT TO THE ADDITIONAL SUBORDINATED DEBT, EACH AS THE SAME MAY BE AMENDED, RESTATED SUPPLEMENTED OR OTHERWISE MODIFIED. (c) The definition of "Permitted Acquisition" on pages 33 through 36 inclusive is hereby deleted in its entirety and the following is substituted in its place: "PERMITTED ACQUISITION" MEANS (a) THE ACQUISITION OR PURCHASE OF, OR INVESTMENT IN, ANY PERSON, ANY OPERATING DIVISION OR UNIT OF ANY PERSON, OR THE 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) OR IN A BUSINESS REASONABLY RELATED THERETO; 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 (A) SHALL NOT EXCEED AT ANY TIME DURING THE PERIOD COMMENCING ON AUGUST 1, 1998 AND ENDING ON NOVEMBER 15, 1998, TWENTY MILLION DOLLARS ($20,000,000) IF THE PRO FORMA EBITDA FOR (x) THE PERSON WHICH IS THE TARGET OF SUCH SUBJECT TRANSACTION OR (y) THE SELLER OR DIVISION OF THE SELLER OF THE ASSETS WHICH IS THE TARGET OF SUCH SUBJECT TRANSACTION, AS APPLICABLE, IS AT LEAST EQUAL TO 1.5 MULTIPLIED BY THE INCREMENTAL INTEREST EXPENSE ATTRIBUTABLE TO INDEBTEDNESS INCURRED IN CONNECTION WITH SUCH SUBJECT TRANSACTION, AND (B) SHALL NOT EXCEED AT ANY OTHER TIME OR IN ANY OTHER 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 ACCEPTABLE TO THE AGENT IN ITS SOLE AND ABSOLUTE DISCRETION), AND (B) 5, OR (2) SEVEN MILLION DOLLARS ($7,000,000), (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 FIRST CLOSING DATE (EXCLUDING ANY PERMITTED ACQUISITION PERMITTED UNDER CLAUSE (B) OF THIS DEFINITION) SHALL NOT EXCEED (A) FIFTY MILLION DOLLARS ($50,000,000) IN THE EVENT A SUBJECT TRANSACTION WHICH QUALIFIES AS A PERMITTED ACQUISITION IS CLOSED AND CONSUMMATED DURING THE PERIOD COMMENCING ON AUGUST 1, 1998 AND ENDING ON NOVEMBER 15, 1998 AND (B) THIRTY MILLION DOLLARS ($30,000,000) IF NO SUBJECT TRANSACTION WHICH QUALIFIES AS A PERMITTED ACQUISITION IS CLOSED AND CONSUMMATED DURING THE AFORESAID PERIOD, (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 BERRY UK AND ITS ACQUISITION OF NORWICH, THE BORROWER SHALL BE REQUIRED ONLY TO PLEDGE SIXTY- FIVE PERCENT (65%) OF THE STOCK OF BERRY UK, AS SECURITY FOR ALL OF THE OBLIGATIONS, EXCLUDING THE UK OBLIGATIONS, AND TO PLEDGE ONE HUNDRED PERCENT (100%) OF THE STOCK OF BERRY UK, AS SECURITY FOR ALL OF THE UK OBLIGATIONS, 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, (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 NORWICH 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 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, EXCEPT THAT IN CONNECTION WITH THE NORWICH STOCK PURCHASE TRANSACTION, AVAILABILITY UNDER THE REVOLVING LOAN NEED ONLY BE IN AN AMOUNT AT LEAST EQUAL TO FIFTEEN MILLION DOLLARS ($15,000,000), (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, EXCEPT THAT NOTWITHSTANDING THE FOREGOING, THE AGENT AGREES THAT WITH RESPECT TO ANY PROPOSED SUBJECT TRANSACTION INTENDED TO BE CLOSED AND CONSUMMATED DURING THE PERIOD COMMENCING ON AUGUST 1, 1998 AND ENDING ON NOVEMBER 15, 1998, THE BORROWER SHALL ONLY BE REQUIRED TO GIVE THE AGENT NO LESS THAN TWENTY-ONE (21) DAYS WRITTEN NOTICE OF 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, NORWICH 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, 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 THE FISCAL YEAR ENDING DECEMBER 31, 1998 SHALL NOT EXCEED THIRTY-FIVE MILLION DOLLARS ($35,000,000) AND IN ANY OTHER FISCAL YEAR SHALL NOT EXCEED SEVEN MILLION DOLLARS ($7,000,000); AND (b) THE VENTURE STOCK PURCHASE/MERGER TRANSACTION AND THE PACKERWARE MERGER TRANSACTION. 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. NOTWITHSTANDING THE FOREGOING, THE AGENT AND THE LENDERS AGREE THAT THE ASSETS AND PROPERTIES OF BERRY UK AND NORWICH SHALL BE INCLUDED IN THE UK BORROWING BASE SUBJECT TO THE ELIGIBILITY CRITERIA SET FORTH IN THE DEFINITIONS OF ELIGIBLE UK INVENTORY AND ELIGIBLE UK RECEIVABLES. (d) The definition of "Subordinated Debt" on page 47 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: "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) AND (ii) THE ADDITIONAL SUBORDINATED DEBT. (e) Section 2.2.3(b) on page 67 of the Credit Agreement is hereby amended to provide that the Borrower shall not be obligated to make a Term Loan A Mandatory Prepayment solely as the result of the issuance of the Additional Subordinated Debt. (f) Subsection (d) of Section 6.2.4 on page 144 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: (d) SUBORDINATED INDEBTEDNESS, INCLUDING, WITHOUT LIMITATION, THE ADDITIONAL SUBORDINATED DEBT; PROVIDED THAT THE PRINCIPAL AMOUNT OF ALL SUCH SUBORDINATED INDEBTEDNESS SHALL NOT AT ANY TIME EXCEED, IN THE AGGREGATE, THIRTY MILLION DOLLARS ($30,000,000) 3. The Agent and the Lenders hereby consent and agree to the issuance of the Additional Subordinated Debt in accordance with the terms and conditions of this Amendment; provided that (i) the Borrower executes and delivers this Amendment, (ii) the proceeds of the Additional Subordinated Debt (net of any and all customary and reasonable fees and expenses incurred by the Borrower in connection with the closing and consummation of the Additional Subordinated Debt) are paid to the Agent immediately upon closing and consummation of the Additional Subordinated Debt as a Revolving Loan Optional Prepayment and (iii) any portion of the net proceeds of the Additional Subordinated Debt in excess of the then unpaid principal balance of the Revolving Loan shall be used by the Borrower in a manner mutually acceptable to the Agent, the Requisite Lenders and the Borrower as determined within thirty (30) days of closing the Additional Subordinated Debt. 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. 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 agree 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. IN WITNESS WHEREOF, the Borrower, 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) James M. Kratochvil Vice President WITNESS OR ATTEST: NIM HOLDINGS LIMITED _________________________ By:_______________________(Seal) James M. Kratochvil Vice President WITNESS OR ATTEST: NORWICH INJECTION MOULDERS LIMITED _________________________ By:_______________________(Seal) James M. Kratochvil Vice President 1 WITNESS: NATIONSBANK, N.A., in its capacity as Agent _________________________ By:____________________________(Seal) Name: Vickie Tillman Title: Senior Vice President WITNESS: NATIONSBANK, N.A., in its capacity as a Lender _________________________ By:____________________________(Seal) Name: Vickie Tillman Title: Senior 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: 2 ACKNOWLEDGMENT AND CONSENT BPC HOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, BERRY IOWA CORPORATION, a corporation organized and existing under the laws of the State of Delaware, BERRY TRI-PLAS CORPORATION, a corporation organized under the laws of the State of Delaware, BERRY STERLING CORPORATION, a corporation organized under the laws of the State of Delaware, AEROCON, INC., a corporation organized under the laws of the State of Delaware PACKERWARE CORPORATION, a corporation organized under the laws of the State of Kansas, BERRY PLASTICS DESIGN CORPORATION, a corporation organized and existing under the laws of the State of Delaware, VENTURE PACKAGING, INC., a corporation organized and existing under the laws of the State of Delaware, VENTURE PACKAGING SOUTHEAST, INC., a corporation organized and existing under the laws of the State of South Carolina and VENTURE PACKAGING MIDWEST, INC., a corporation organized and existing under the laws of State of Ohio (collectively, the "Guarantors") 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. WITNESS OR ATTEST: BERRY IOWA CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: BERRY TRI-PLAS CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President 3 WITNESS OR ATTEST: BERRY STERLING CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: AERO CON, INC. _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: PACKERWARE CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: BERRY PLASTICS DESIGN CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: BPC HOLDING CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: VENTURE PACKAGING, INC. _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President 4 WITNESS OR ATTEST: VENTURE PACKAGING SOUTHEAST, INC. _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: VENTURE PACKAGING MIDWEST, INC. _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President 5 FIRST AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT ---------------------------------------------- THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this "Amendment") is made as of the 31{st} day of July, 1998, 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 ("Berry UK"), and NORWICH INJECTION MOULDERS LIMITED, a company organized and existing under the laws of England and Wales ("Norwich"); NATIONSBANK, N.A., a national banking association, in its capacity as a lender ("NationsBank"), 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") and HELLER FINANCIAL, INC., a corporation organized and existing under the laws of the State of Delaware ("Heller") (NationsBank, Fleet, GE Capital and Heller are herein collectively referred to as the "Lenders" and individually, as a "Lender"); and NATIONSBANK, N.A., a national banking association, in its capacity as administrative and collateral agent for the Lenders (the "Agent"); Witnesseth: RECITALS -------- A. The Lenders, the Borrower, Berry UK, Norwich and the Agent are parties to that certain Second Amended and Restated Financing and Security Agreement dated as of July 2, 1998 (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 Norwich 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. On or before the date of this Amendment, the Iowa Bond Trustee has made or intends to make a Conversion Drawing on the Iowa Bond Letter of Credit - NB to redeem Iowa Bonds. As permitted by Section 2.5.5(b) of the Credit Agreement, the Borrower is permitted to pay the Conversion Drawing over a period of ten (10) years; provided that payment of all amounts outstanding with respect to such Conversion Drawing are repaid in full on or before the Revolving Credit Termination Date. C. The Borrower has requested, however, that the Lenders agree to readvance a portion of Term Loans A previously advanced and repaid to pay the Conversion Drawing in full. The Agent and the Lenders have so agreed; provided that, among other things, the Borrower execute and delivered amended and restated Term Loan A Notes and this Amendment. 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, Norwich, the Lenders and the Agent hereby agree as follows: 1. The Borrower, Berry UK, and Norwich 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 Norwich contained among the provisions of the Credit Agreement are true as of the date of this Amendment 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) The first paragraph of Section 2.2.1 on page 65 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: 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 $7,901,159.47 23.8525% GE Capital $9,677,491.83 29.215% NationsBank $9,677,491.83 29.215% Heller $5,868,935.87 17.7175% TOTAL TERM LOAN A COMMITTED AMOUNT: $33,125,079 100% The Borrower understands and agrees that the Term Loans A have been fully funded and that none of the Lenders shall have any further obligation or commitment to advance any additional portion of their respective Term Loan A Committed Amount. (b) The amortization schedule for the Term Loans A on page 66 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in its place: DUE DATE AMOUNT -------- ------ August 1, 1998 $297,000 November 1, 1998 $432,477 February 1, 1999 $888,477 May 1, 1999 $888,477 August 1, 1999 $888,477 November 1, 1999 $888,477 February 1, 2000 $1,335,477 May 1, 2000 $1,335,477 August 1, 2000 $1,335,477 November 1, 2000 $1,335,477 February 1, 2001 $1,835,477 May 1, 2001 $1,835,477 August 1, 2001 $1,835,477 November 1, 2001 $1,835,477 January 21, 2002 $16,157,878 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 agree 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. 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. -1- IN WITNESS WHEREOF, the Borrower, 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) James M. Kratochvil Vice President WITNESS OR ATTEST: NIM HOLDINGS LIMITED _________________________ By:_______________________(Seal) James M. Kratochvil Vice President WITNESS OR ATTEST: NORWICH INJECTION MOULDERS LIMITED _________________________ By:_______________________(Seal) James M. Kratochvil Vice President WITNESS: NATIONSBANK, N.A., in its capacity as Agent _________________________ By:____________________________(Seal) Name: Alison Arbuthnot Title: Vice President WITNESS: NATIONSBANK, N.A., in its capacity as a Lender _________________________ By:____________________________(Seal) Name: Alison Arbuthnot Title: Vice President -2- 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: -3- ACKNOWLEDGMENT AND CONSENT BPC HOLDING CORPORATION, a corporation organized and existing under the laws of the State of Delaware, BERRY IOWA CORPORATION, a corporation organized and existing under the laws of the State of Delaware, BERRY TRI- PLAS CORPORATION, a corporation organized under the laws of the State of Delaware, BERRY STERLING CORPORATION, a corporation organized under the laws of the State of Delaware, AEROCON, INC., a corporation organized under the laws of the State of Delaware PACKERWARE CORPORATION, a corporation organized under the laws of the State of Kansas, BERRY PLASTICS DESIGN CORPORATION, a corporation organized and existing under the laws of the State of Delaware, VENTURE PACKAGING, INC., a corporation organized and existing under the laws of the State of Delaware, VENTURE PACKAGING SOUTHEAST, INC., a corporation organized and existing under the laws of the State of South Carolina and VENTURE PACKAGING MIDWEST, INC., a corporation organized and existing under the laws of State of Ohio (collectively, the "Guarantors") 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. WITNESS OR ATTEST: BERRY IOWA CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: BERRY TRI-PLAS CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President -4- WITNESS OR ATTEST: BERRY STERLING CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: AERO CON, INC. _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: PACKERWARE CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: BERRY PLASTICS DESIGN CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: BPC HOLDING CORPORATION _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: VENTURE PACKAGING, INC. _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President -5- WITNESS OR ATTEST: VENTURE PACKAGING SOUTHEAST, INC. _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President WITNESS OR ATTEST: VENTURE PACKAGING MIDWEST, INC. _________________________ By:__________________________(SEAL) James M. Kratochvil Vice President -6- EX-10.15 27 LETTER OF CREDIT OF NATIONSBANK, N.A., DATED APRIL IRREVOCABLE LETTER OF CREDIT NO. 930300 April 16, 1997 Manufacturers and Traders Trust Company, as Trustee One M&T Plaza Buffalo, New York 14203 Attention: Corporate Trust Department Ladies and Gentlemen: At the request and for the account of our customer, Berry Plastics Corporation, a Delaware corporation (the "COMPANY"), we (the "BANK") hereby issue in your favor our Irrevocable Letter of Credit No. 930300 in the amount of $5,226,028 (the "STATED AMOUNT"), effective immediately and expiring at 5 p.m. (Dallas, Texas time) at our office on January 20, 2002 (the "EXPIRATION DATE"). This Letter of Credit is issued to you as trustee (the "TRUSTEE") under the Trust Indenture, dated as of April 1, 1991 (the "INDENTURE"), between the City of Henderson, Nevada Public Improvement Trust (the "ISSUER") and you, pursuant to which $5,000,000 in aggregate principal amount of the Issuer's Variable Rate Demand Refunding Bonds (Berry Plastics Corporation Project), Series 1991 (the "BONDS") are outstanding. We hereby irrevocably authorize you to draw on us, in an aggregate amount not to exceed the Stated Amount of the Letter of Credit set forth above, and in accordance with the terms and conditions and subject to the reductions in an amount as hereinafter set forth, the following amounts by presentation to us of one or more of your sight drafts referring thereon to the number of this Letter of Credit, together with one or more of the following certificates duly completed by you and purportedly signed by you (any such sight draft accompanied by any such certificate being a "DRAFT"): 1. ANNEX A - Certificate for Drawing in Connection with the Payment of up to 110 Days' Interest on the Variable Rate Demand Refunding Bonds (Berry Plastics Corporation Project), Series 1991 ("INTEREST DRAFT DRAWING") - in a single drawing (subject to the reinstatement provisions contained in the next following paragraph) (such draft accompanied by such certificate being your ("INTEREST DRAFT") in an amount not exceeding $226,028; 2. ANNEX B - Certificate for Drawing in Connection with the Payment of Purchase Price of (Including the Principal of and up to 110 Days' Interest on) the Variable Rate Demand Refunding Bonds (Berry Plastics Corporation Project), Series 1991 in Support of a Tender Pursuant to Section 114 of the Indenture ("TENDER DRAFT DRAWING") - in one or more drawings (any such draft accompanied by such certificate being your "TENDER DRAFT"), in an aggregate amount not exceeding $5,226,028 (subject to reinstatement as provided in this Letter of Credit); 3. ANNEX C - Certificate for Drawing in Connection with the Payment of Principal of and up to 110 Days' Interest on the Variable Rate Demand Refunding Bonds (Berry Plastics Corporation Project), Series 1991 upon a Partial Redemption ("PARTIAL REDEMPTION DRAFT DRAWING") - in one or more drawings (any such draft accompanied by such certificate being your "PARTIAL REDEMPTION DRAFT"), in an aggregate amount not exceeding $5,226,028; and 4. ANNEX D - Certificate for Drawing in Connection with the Payment of Principal of and up to 110 Days' Interest on the Variable Rate Demand Refunding Bonds (Berry Plastic Corporation Project), Series 191, upon Stated and Accelerated Maturity, Purchase of All of the Bonds or Optional or Mandatory Redemption as a Whole ("FINAL DRAFT DRAWING") - in a single drawing (such draft accompanied by such certificate being your "FINAL DRAFT"), in an amount not exceeding $5,226,028. If you shall draw on us by your Interest Draft under CLAUSE (1) of the preceding paragraph and we shall not have sent to you within ten calendar days from the date of such drawing a written notice from us to the effect that an Event of Default has occurred under the Financing and Security Agreement dated as of January 21, 1997 (as from time to time in effect, the "Reimbursement Agreement"), between the Company and the Bank, and that such amount, and your right to draw on us by an Interest Draft, will not be reinstated, your right to draw on us in a single drawing by your Interest Draft under CLAUSE (1) shall be automatically reinstated and, effective the 11th calendar day from the date of such drawing, you shall again be authorized to draw on us by your Interest Draft in accordance with said CLAUSE (1) and the other terms and conditions referred to or set forth in the immediately preceding paragraph; and this automatic reinstatement of your right to draw on us by your Interest Draft shall be applicable to each successive drawing by your Interest Draft under CLAUSE (1) of the immediately preceding paragraph so long as this Letter of Credit shall not have terminated as set forth below. To the extent that Bonds are redeemed and paid with funds not drawn under this Letter of Credit, the amount of this Letter of Credit shall be decreased upon our receipt of your written and completed certificate signed by you in substantially the form of ANNEX E attached hereto (relating to a mandatory or optional redemption of less than all of the Bonds outstanding), by an amount equal to the amount stated in such certificate, and the amounts available to be drawn by you by any subsequent Interest Draft, Tender Draft, Partial Redemption Draft or Final Draft shall be decreased upon our receipt of such certificate, to the amounts stated in such certificate. Upon our honoring any Tender Draft presented by you hereunder, the amount of this Letter of Credit and the amounts available to be drawn hereunder by you by any subsequent Tender Draft, Partial Redemption Draft and Final Draft shall be automatically decreased by an amount corresponding to the amount of such Tender Draft. The amount of this Letter of Credit and the amounts from time to time available to be drawn by you hereunder by any Tender Draft, Partial Redemption Draft or Final Draft shall be increased when and to the extent, but only when and to the extent, that we have given you written notice that we have either (a) been reimbursed by the Company or by you on behalf of the Company for any amount drawn hereunder by any Tender Draft, or (b) received Pledged Bonds (as defined in the Pledge Agreement dated as of April __, 1997, among the Company, the Bank, you and the Remarketing Agent identified therein) in aggregate principal amount equal to the principal amount of Bonds purchased with the proceeds of such Tender Draft. Any amount received by us from or on behalf of the Company in reimbursement of amounts drawn hereunder shall, if accompanied by your completed and signed certificate in substantially the form of ANNEX F attached hereto, be applied to the extent of the amount indicated therein to reimburse us for amounts drawn hereunder by your Tender Drafts. Upon your honoring any Partial Redemption Draft presented by you hereunder, the amount of this Letter of Credit and the amounts available to be drawn by you hereunder by any subsequent Partial Redemption Draft, Tender Draft or Final Draft shall be automatically and permanently decreased by an amount corresponding to the principal amount of Bonds to be redeemed and paid with the proceeds of such Partial Redemption Draft (the "Principal Component Reduction"), plus an amount that is equal to 110 days' interest on such Principal Component Reduction, calculated at an assumed rate of 15% per annum and on the basis of a 365-day year (the "Interest Component Reduction"). In addition, the amount available to be drawn by you hereunder by any subsequent Interest Draft will be automatically and permanently decreased by the Interest Component Reduction. Each Draft presented under this Letter of Credit shall refer thereon to the number of this Letter of Credit and shall be dated the date of its presentation, and shall be drawn and presented at our office located at NationsBank of Texas, N.A., 901 Main Street, Dallas, Texas 75202, Attention: Mona Davis (or at any other office that may be designated by us in writing at least three Banking Days prior to the date on which a drawing is made hereunder), with a copy to NationsBank Business Credit, 100 South Charles Street, 4th Floor, Baltimore, Maryland 21201, Attention: Vickie L. Tillman (or telecopied to (410) 576-2958), it being understood that providing such a copy shall not constitute a condition of drawing. Each Draft may be presented only on a Banking Day. If we receive any of your Drafts at such office, all in strict conformity with the terms and conditions of this Letter of Credit, not later than 11:00 a.m. (Dallas, Texas time) on a Banking Day prior to the termination hereof, we will honor the same no later than 2:00 p.m. (Dallas, Texas time) on the same day in immediately available funds in accordance with your payment instructions. If we receive any of your Drafts at such office, all in strict conformity with the terms and conditions of this Letter of Credit, after 11:00 a.m. (Dallas, Texas time) on a Banking Day prior to the termination hereof, we will honor the same in immediately available funds no later than 2:00 p.m. (Dallas, Texas time) on the next succeeding Banking Day in accordance with your payment instruments. The term "Banking Day" means any day of the year other than a Saturday, Sunday, legal holiday or a day on which banking institutions in Dallas, Texas or in Buffalo, New York, are authorized or required to close. The Drafts you are required to submit to us may be submitted to us in the form of a facsimile copy by telecopier to the Bank, Attention: Mona Davis, telecopier no.: (214) 508-3928, with prior telephone notice to such office at telephone no.: (214) 508-3153 (or at such other office and telecopier and telephone numbers as we may designate to you in writing), with a copy to NationsBank Business Credit, 100 South Charles Street, 4th Floor, Baltimore, Maryland 21201, Attention: Vickie L. Tillman (or telecopied to (410) 576-2958), it being understood that providing such a copy shall not constitute a condition of drawing. By acceptance of this Letter of Credit, you agree to send the same day the originals of all telecopied Drafts to us, prominently marked to indicate that they are originals of telecopied Drafts, by overnight courier for next day delivery to our designated address for presentation of Drafts. By paying you an amount demanded in accordance with this Letter of Credit, we make no representation as to the correctness of the amount demanded or your calculations and representations on the certificates required of you by this Letter of Credit. This Letter of Credit shall automatically expire on the earliest to occur of (i) our honoring your Final Draft presented hereunder, (ii) 15 days after the date on which we receive written notice from you that the Bonds have been converted to a "Fixed Interest Rate" within the meaning of the Indenture, (iii) the date on which we receive written notice from you that an alternate letter of credit or other credit facility has been substituted for this Letter of Credit in accordance with the Indenture, (iv) the date on which we receive written notice from you that there are no longer any Bonds "Outstanding" within the meaning of the Indenture, (v) upon receipt by us of written notice from the Company and the holders of all of the Bonds that are "Outstanding" within the meaning of the Indenture that they are exercising their option to terminate the Letter of Credit pursuant to Section 111(c) of the Indenture, on the earlier of the date specified in such notice and 15 days after we receive such written notice, together with your certification that such holders constitute the holders of all Outstanding Bonds, and (iv) the Expiration Date. This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds, the Indenture, the Reimbursement Agreement), except only the Annexes and Drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such Annexes and Drafts. This Letter of Credit is transferable any number of times in full but not in part. Transfer may be made to any entity whom you or any transferee hereunder designate as a successor trustee under the Indenture who is acceptable to us, provided that our acceptance of a successor trustee shall not be unreasonably withheld and provided further that we will promptly advise you of our acceptance or disapproval. Transfer of the available drawing under this Letter of Credit to such transferee shall be effected by the presentation to us of this Letter of Credit accompanied by your instruction to transfer in the form of Annex G attached to this Letter of Credit, and the payment of (x) $2,000 as a transfer fee and (y) the Bank's costs and expenses incurred in connection with such transfer. Upon presentation and payment, we shall forthwith effect a transfer of this Letter of Credit to your designated transferee. This Letter of Credit shall be governed by the laws of the State of Maryland, including the Uniform Commercial Code as in effect in the State of Maryland, except that Articles 16 and 20(b) of the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, shall govern solely with respect to the presentation of Drafts by telecopy transmission. Communications to us with respect to this Letter of Credit other than presentations of Drafts and certificates hereunder shall be in writing and shall be addressed to us at NationsBank Business Credit, 100 South Charles Street, 4th Floor, Baltimore, Maryland 21201, Attention: Vickie L. Tillman (or telecopied to (410) 576-2958), with a copy to us at NationsBank of Texas, N.A., 901 Main Street, Dallas, Texas 75202, Attention: Mona Davis (or telecopied to (214) 508-3928), specifically referring to the number of this Letter of Credit. Communications to you with respect to this Letter of Credit shall be in writing and shall be addressed to you at your address set forth above, specifically referring to the number of this Letter of Credit and the Bonds. Very truly yours, NATIONSBANK, N.A. By: Name: Title: ANNEX A INTEREST DRAFT DRAWING The undersigned, a duly authorized officer of the undersigned Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the "Bank"), with reference to Irrevocable Letter of Credit No. _____________ (the "Letter of Credit", the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Trustee, as follows: 1. The Trustee is the Trustee under the Indenture for the holders of the Bonds. 2. The Trustee is making a drawing under the Letter of Credit with respect to a payment of interest on the Bonds, which payment is due on [PAYMENT DUE DATE]. None of the Bonds in respect of which this drawing will be used to pay interest is held of record by the Company or by the undersigned for the account of the Company. 3. [THE INTEREST DRAFT ACCOMPANYING THIS CERTIFICATE IS THE FIRST INTEREST DRAFT PRESENTED BY THE TRUSTEE UNDER THE LETTER OF CREDIT.] [OR] [THE INTEREST DRAFT LAST PRESENTED BY THE TRUSTEE UNDER THE LETTER OF CREDIT WAS HONORED AND PAID BY THE BANK ON ________________, 19___, AND THE TRUSTEE HAS NOT RECEIVED A NOTICE FROM THE BANK THAT AN EVENT OF DEFAULT HAS OCCURRED UNDER THE REIMBURSEMENT AGREEMENT.] 4. The amount of the Interest Draft accompanying this Certificate is $__________________. It was computed in compliance with the terms and conditions of the Bonds and the Indenture, and does not include any amount of interest which is included in any Tender Draft, Partial Redemption Draft or Final Draft presented on or prior to the date of this Certificate. IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _____ day of __________________, 19___. MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee By: [Name and Title] cc: NationsBank Business Credit 100 South Charles Street 4th Floor Baltimore, Maryland 21201 Attention: Vickie L. Tillman (Telecopier No. (410) 576-2958) ANNEX B TENDER DRAFT DRAWING The undersigned, a duly authorized officer of the undersigned Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the "Bank"), with reference to Irrevocable Letter of Credit No. ________________ (the "Letter of Credit", the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Trustee, as follows: 1. The Trustee is the Trustee under the Indenture for the holders of the Bonds. 2. The Trustee is making a drawing under the Letter of Credit with respect to the payment, upon an optional tender of all or less than all of the Bonds which are Outstanding (as defined in the Indenture), of the purchase price of (including the unpaid principal amount of, and up to 110 days' accrued and unpaid interest on) the Bonds to be purchased as a result of such tender pursuant to the terms of Section 114 of the Indenture (other than Bonds, or $ ______________ portions thereof, presently held of record by the Company or by the Trustee for the account of the Company), which payment is due on [payment due date]. 3. The amount of the Tender Draft accompanying this Certificate is equal to the sum of (i) $_______________ being drawn in respect of the payment of the portion of the purchase price equal to the unpaid principal of the Bonds being purchased and (ii) $______________ being drawn in respect of the payment of the portion of the purchase price equal to the accrued and unpaid interest on such Bonds, and does not include any amount of interest which is included in any Interest Draft, Partial Redemption Draft or Final Draft presented on or prior to the date of this Certificate. 4. The amount of the Tender Draft accompanying this Certificate was computed in compliance with the terms and conditions of the Bonds and the Indenture and does not exceed the amount available to be drawn by the Trustee under the Letter of Credit. The Trustee acknowledges that, pursuant to the terms of the Letter of Credit, upon the Bank's honoring of the Tender Draft accompanying this Certificate, the amount of the Letter of Credit and the amounts available to be drawn by the Trustee thereunder by any subsequent Tender Draft, Partial Redemption Draft or Final Draft are automatically decreased by an amount equal to the amount of such Tender Draft, subject to reinstatement as provided in the Letter of Credit. IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _____ day of __________________, 19___. MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee By: [Name and Title] cc: NationsBank Business Credit 100 South Charles Street 4th Floor Baltimore, Maryland 21201 Attention: Vickie L. Tillman (Telecopier No. (410) 576-2958) ANNEX C PARTIAL REDEMPTION DRAFT DRAWING The undersigned, a duly authorized officer of the undersigned Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the "Bank"), with reference to Irrevocable Letter of Credit No. ________________ (the "Letter of Credit", the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Trustee, as follows: 1. The Trustee is the Trustee under the Indenture for the holders of the Bonds. 2. The Trustee is making a drawing under the Letter of Credit with respect to the payment, upon a mandatory or optional redemption of less than all of the Bonds which are Outstanding (as defined in the Indenture) pursuant to the BOND FORM APPENDIX to the Indenture, of the unpaid principal amount of, and up to 110 days' accrued and unpaid interest on, Bonds to be redeemed. 3. The amount of the Partial Redemption Draft accompanying this Certificate is equal to the sum of (i) $________________ being drawn in respect of the payment of unpaid principal of Bonds to be redeemed and (ii) $_______________ being drawn in respect of the payment of up to 110 days' accrued and unpaid interest on such Bonds, and does not include any amount of interest on the Bonds which is included in any Interest Draft, Tender Draft or Final Draft presented on or prior to the date of this Certificate. 4. The amount of the Partial Redemption Draft accompanying this Certificate was computed in accordance with the terms and conditions of the Bonds and the Indenture and does not exceed the amount available to be drawn under the Letter of Credit. 5. This Certificate and the Partial Redemption Draft it accompanies are dated, and are being presented to the Bank on, the date on which the unpaid principal amount of, and accrued and unpaid interest on, Bonds to be redeemed are due and payable under the Indenture upon redemption of less than all of the Bonds which are Outstanding (as defined in the Indenture). IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _____ day of __________________, 19___. MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee By: [Name and Title] cc: NationsBank Business Credit 100 South Charles Street 4th Floor Baltimore, Maryland 21201 Attention: Vickie L. Tillman (Telecopier No. (410) 576-2958) ANNEX D FINAL DRAFT DRAWING The undersigned, a duly authorized officer of the undersigned Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the "Bank"), with reference to Irrevocable Letter of Credit No. _________________ (the "Letter of Credit", the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Trustee, as follows: 1. The Trustee is the Trustee under the Indenture for the holders of the Bonds. 2. The Trustee is making a drawing under the Letter of Credit with respect to the payment, either as stated maturity, upon acceleration, upon purchase of all of the Bonds pursuant to a conversion to a fixed interest rate under Section 101 of the Indenture or a mandatory purchase of all of the Bonds under Section 115 of the Indenture, or as a result of an optional or mandatory redemption of all of the Bonds pursuant to the BOND FORM APPENDIX of the Indenture, of the unpaid principal amount of, and up to 110 days' accrued and unpaid interest on, all of the Bonds which are "Outstanding" within the meaning of the Indenture, which payment is due on [payment due date]. 3. The amount of the Final Draft accompanying this Certificate is equal to the sum of (i) $__________ being drawn in respect of the payment of unpaid principal of Bonds, and (ii) $__________ being drawn in respect of the payment of up to 110 days' accrued and unpaid interest on such Bonds, and does not include any amount of interest on the Bonds which is included in any Interest Draft, Tender Draft or Partial Redemption Draft presented on or prior to the date of this Certificate. 4. The amount of the Final Draft accompanying this Certificate was computed in accordance with the terms and conditions of the Bonds and the Indenture and does not exceed the amount available to be drawn by the Trustee under the Letter of Credit. IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _____ day of __________________, 19___. MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee By: [Name and Title] cc: NationsBank Business Credit 100 South Charles Street 4th Floor Baltimore, Maryland 21201 Attention: Vickie L. Tillman (Telecopier No. (410) 576-2958) ANNEX E CERTIFICATE FOR REDUCTION The undersigned, a duly authorized officer of the undersigned Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the "Bank"), with reference to Irrevocable Letter of Credit No. _____________________ (the "Letter of Credit", the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Trustee, as follows: 1. The Trustee is the Trustee under the Indenture for the holders of the Bonds. 2. The Trustee hereby notifies you that on or prior to the date hereof $_____________________ principal amount of the Bonds have been redeemed and paid pursuant to the Indenture. Such redemption and payment was not effected with the proceeds of amounts drawn under the Letter of Credit. 3. Following the redemption and payment referred to in paragraph (2) above, the aggregate principal amount of all of the Bonds which are "Outstanding" within the meaning of the Indenture is $_____________________. 4. The maximum amount of interest, computed in accordance with the terms and conditions of the Bonds and the Indenture, which could accrue on the Bonds referred to in paragraph (3) above in any period of 110 days is $_____________________. 5. The amount available to be drawn by the Trustee under the Letter of Credit by any Interest Draft is reduced to $_____________________ (such amount being equal to the amount specified in paragraph (4) above) upon receipt by the Bank of this Certificate. 6. The amount available to be drawn by the Trustee under the Letter of Credit by any Tender Draft is reduced to $_____________________ (such amount being equal to the sum of the amounts specified in paragraphs (3) and (4) above) upon receipt by the Bank of this Certificate. 7. The amount available to be drawn by the Trustee under the Letter of Credit by any Partial Redemption Draft is reduced to $_______________ (such amount being equal to the sum of the amounts specified in paragraphs (3) and (4) above) upon receipt by the Bank of this Certificate. 8. The amount available to be drawn by the Trustee under the Letter of Credit by its Final Draft is reduced to $_______________ (such amount being equal to the sum of the amounts specified in paragraphs (3) and (4) above) upon receipt by the Bank of this Certificate. 9. The amount of the Letter of Credit is reduced to $_______________ (such amount being equal to the sum of the amounts specified in paragraphs (3) and (4) above) upon receipt by the Bank of this Certificate. IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _____ day of __________________, 19___. MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee By: [Name and Title] cc: NationsBank Business Credit 100 South Charles Street 4th Floor Baltimore, Maryland 21201 Attention: Vickie L. Tillman (Telecopier No. (410) 576-2958) ANNEX F CERTIFICATE FOR REINSTATEMENT The undersigned, a duly authorized officer of the undersigned Trustee (the "Trustee"), hereby certifies to NationsBank, N.A. (the "Bank"), with reference to Irrevocable Letter of Credit No. _______________ (the "Letter of Credit", the terms defined therein and not otherwise defined herein being used herein as therein defined) issued by the Bank in favor of the Trustee, as follows: 1. The Trustee is the Trustee under the Indenture for the holders of the Bonds. 2. The amount of $___________ paid to you today by the Company or by the Trustee on behalf of the Company is a payment made to reimburse you or, pursuant to Sections 2.04 and 2.05 of the Reimbursement Agreement for amounts drawn under the Letter of Credit by Tender Drafts. 3. Of the amount referred to in paragraph (2), $___________ represents the aggregate principal amount of Bonds resold on behalf of the Company. 4. Of the amount referred to in paragraph (2), $___________ represents accrued and unpaid interest on Bonds. IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _____ day of __________________, 19___. MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee By: [Name and Title] cc: NationsBank Business Credit 100 South Charles Street 4th Floor Baltimore, Maryland 21201 Attention: Vickie L. Tillman (Telecopier No. (410) 576-2958) ANNEX G INSTRUCTION TO TRANSFER ____________________, 19__ NationsBank of Texas, N.A. 901 Main Street Dallas, Texas 75202 Attention: Mona Davis Re: IRREVOCABLE LETTER OF CREDIT NO. Gentlemen: For value received, the undersigned beneficiary hereby irrevocably transfers to: [Name of Transferee] [Address] all rights of the undersigned beneficiary to draw under the above- captioned Letter of Credit (the "Letter of Credit"). The transferee has succeeded the undersigned as Trustee under the Indenture (as defined in the Letter of Credit). By this transfer, all rights of the undersigned beneficiary in the Letter of Credit are transferred to the transferee and the transferee shall hereafter have the sole rights as beneficiary thereof; PROVIDED, HOWEVER, that no rights shall be deemed to have been transferred to the transferee until such transfer complies with the requirements of the Letter of Credit pertaining to transfers. In accordance with UCP 500 sub Article 48(d), the undersigned beneficiary hereby waives the right to refuse to allow you to advise amendments to the Letter of Credit directly to the transferee. Therefore, the transferee shall have the sole rights as beneficiary to the Letter of Credit, including the sole right relating to any amendments thereto whether now existing or hereafter made. All amendments are to be advised directly to the transferee. The Letter of Credit is returned herewith and in accordance therewith we ask that this transfer be effective and that you transfer the Letter of Credit to our transferee or that, if so requested by the transferee, you issue a new irrevocable letter of credit in favor of the transferee with provisions consistent with the Letter of Credit. Very truly yours, MANUFACTURERS AND TRADERS TRUST COMPANY, as predecessor Trustee By: [Name and Title] cc: NationsBank Business Credit 100 South Charles Street 4th Floor Baltimore, Maryland 21201 Attention: Vickie L. Tillman (Telecopier No. (410) 576-2958) EX-10.26 28 PURCHASE AGREEMENT DATED AUGUST 19, 1998 BERRY PLASTICS CORPORATION BPC HOLDING CORPORATION BERRY IOWA CORPORATION BERRY STERLING CORPORATION BERRY TRI-PLAS CORPORATION AEROCON, INC. PACKERWARE CORPORATION BERRY PLASTICS DESIGN CORPORATION VENTURE PACKAGING, INC. VENTURE PACKAGING MIDWEST, INC. VENTURE PACKAGING SOUTHEAST, INC. NIM HOLDINGS LIMITED NORWICH INJECTION MOULDERS LIMITED $25,000,000 12 1/4 % Series B Senior Subordinated Notes due 2004 PURCHASE AGREEMENT August 19, 1998 DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION $25,000,000 12 1/4 % Series B Senior Subordinated Notes due 2004 of Berry Plastics Corporation PURCHASE AGREEMENT August 19, 1998 DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION 277 Park Avenue New York, New York 10172 Ladies and Gentlemen: Each of Berry Plastics Corporation, a Delaware corporation (the "COMPANY"), BPC Holding Corporation, a Delaware corporation ("HOLDING"), Berry Iowa Corporation, a Delaware corporation, Berry Sterling Corporation, a Delaware corporation, Berry Tri-Plas Corporation, a Delaware corporation, AeroCon, Inc., a Delaware corporation, PackerWare Corporation, a Kansas corporation, Berry Plastics Design Corporation, a Delaware corporation, Venture Packaging, Inc., a Delaware corporation, Venture Packaging Midwest, Inc., an Ohio corporation, Venture Packaging Southeast, Inc., a South Carolina corporation, NIM Holdings Limited, a company organized under the laws of England and Wales, and Norwich Injection Moulders Limited, a company organized under the laws of England and Wales (collectively with Holding, the "Guarantors"), agree with you as follows: 1. ISSUANCE OF SECURITIES. The Company proposes to issue and sell to Donaldson, Lufkin & Jenrette Securities Corporation (the "INITIAL PURCHASER") $25,000,000 in aggregate principal amount of 12 1/4 % Series B Senior Subordinated Notes due 2004 (the "SERIES B NOTES"). The Series B Notes and the Series C Notes (as defined below) issuable in exchange therefor are collectively referred to herein as the "NOTES." The Notes will be guaranteed (the "Note Guarantees") by each of the Guarantors. The Notes are to be issued pursuant to the provisions of an indenture (the "INDENTURE") to be dated August 24, 1998, among the Company, the Guarantors and United States Trust Company of New York, as trustee (the "TRUSTEE"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Indenture. The Series B Notes will be offered and sold to you pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the "ACT"). The Company has prepared a preliminary offering memorandum (the "Preliminary Offering Memorandum"), and a final offering memorandum, dated August 19, 1998 (the "OFFERING MEMORANDUM"), relating to Holding, the Company and its subsidiaries, the Notes and the Note Guarantees. Upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Act, the Series B Notes (and all securities issued in exchange therefor or in substitution thereof) shall bear the following legend: "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY AND THE GUARANTORS SO REQUEST), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE." You have advised the Company that you will make offers (the "EXEMPT RESALES") of the Series B Notes purchased by you hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to persons (each, a "144A PURCHASER") whom you reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS") (such persons being referred to herein as the "ELIGIBLE PURCHASERS"). Holders (including subsequent transferees) of the Series B Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date (as defined herein), in substantially the form of Exhibit A hereto, for so long as such Series B Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") within 90 days of the Closing Date and under the circumstances set forth therein, (i) a registration statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the Company's 12 1/4 % Series C Senior Subordinated Notes due 2004 (the "SERIES C NOTES") to be offered in exchange for the Series B Notes (such offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER") and (ii) under the circumstances set forth in the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain holders of the Series B Notes, and to use their best efforts to cause such Registration Statements to be declared effective within the time periods set forth in the Registration Rights Agreement. This Agreement, the Indenture, the Notes, the Notes Guarantees and the Registration Rights Agreement are hereinafter referred to collectively as the "OPERATIVE DOCUMENTS." As used in this Purchase Agreement (this "AGREEMENT"), the term "SUBSIDIARY" shall mean any subsidiary of the Company. 2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations and warranties contained in this Agreement, and subject to the terms and conditions contained herein, the Company agrees to issue and sell to you, and you agree to purchase from the Company, $25,000,000 in aggregate principal amount of Series B Notes at a purchase price equal to 102.335% of the principal amount thereof (the "PURCHASE PRICE"). 3. DELIVERY AND PAYMENT. Delivery to you of and payment for the Series B Notes shall be made at 9:00 A.M., New York City time, on August 24, 1998 (the "CLOSING DATE") at the offices of Latham & Watkins, 885 Third Avenue, New York, New York 10022, or such other time or place as you shall reasonably designate. One or more Series B Notes in definitive global form, registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), having an aggregate amount corresponding to the aggregate amount of the Series B Notes sold pursuant to Exempt Resales to QIBs (collectively, the "GLOBAL NOTE"), shall be delivered by the Company to the Initial Purchaser (or as the Initial Purchaser directs), against payment by the Initial Purchaser of the Purchase Price, by wire transfer of immediately available funds to such account or accounts as the Company shall specify, provided that the Company shall give at least two business days' prior written notice to the Initial Purchaser of the information required to effect such wire transfers. The Global Note shall be made available to the Initial Purchaser for inspection not later than 9:30 A.M. on the business day immediately preceding the Closing Date. 4. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. Each of the Company and the Guarantors hereby agrees with you as follows: (a) To advise you promptly and, if requested by you, confirm such advice in writing, (i) of the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of any Series B Notes for offering or sale in any jurisdiction, or the initiation of any proceeding for such purpose by the Commission or any state securities commission or other regulatory authority and (ii) of the happening of any event which makes any statement of a material fact made in the Offering Memorandum untrue or which requires the making of any additions to or changes in the Offering Memorandum in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company and the Guarantors shall use their reasonable best efforts to prevent the issuance of any stop order or order suspending the qualification or exemption of the Series B Notes under any state securities or Blue Sky laws, and, if at any time any state securities commission issues an order suspending the qualification or exemption of the Series B Notes, the Company and the Guarantors shall use every reasonable effort to obtain the withdrawal or lifting of such order at the earliest possible time. (b) To furnish to you without charge as many copies of the Offering Memorandum, and any amendments or supplements thereto, as you may reasonably request. The Company and the Guarantors consent to the use of the Offering Memorandum, and any amendments and supplements thereto, required pursuant to this Agreement by you in connection with the Exempt Resales. (c) Not to amend or supplement the Offering Memorandum prior to the Closing Date unless you shall previously have been advised of, and shall not have reasonably objected to, such amendment or supplement within a reasonable time, but in any event not longer than five business days after being furnished a copy of such amendment or supplement. The Company and the Guarantors shall promptly prepare, upon any reasonable request by you, any amendment or supplement to the Offering Memorandum that may be necessary or advisable in connection with Exempt Resales. (d) If, in connection with any Exempt Resales or market making transactions after the date of this Agreement and prior to the consummation of the Registered Exchange Offer, any event shall occur that, in the judgment of the Company and the Guarantors or in the judgment of counsel to you, makes any statement of a material fact in the Offering Memorandum untrue or that requires the making of any additions to or changes in the Offering Memorandum in order to make the statements in the Offering Memorandum, in the light of the circumstances at the time that the Offering Memorandum is delivered to prospective Eligible Purchasers, not misleading, or if it is necessary to amend or supplement the Offering Memorandum to comply with all applicable laws, the Company and the Guarantors shall promptly notify you of such event and prepare an appropriate amendment or supplement to the Offering Memorandum so that (i) the statements in the Offering Memorandum as amended or supplemented will, in the light of the circumstances at the time that the Offering Memorandum is delivered to prospective Eligible Purchasers, not be misleading and (ii) the Offering Memorandum will comply with applicable law. (e) To cooperate with you and your counsel in connection with the qualification of the Series B Notes for offer and sale by you and by dealers under the state securities or Blue Sky laws of such jurisdictions as you may request (provided, however, that neither the Company nor any Guarantor shall be obligated to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process in any jurisdiction in which it is not now so subject). The Company and the Guarantors will continue such qualification in effect so long as required by law for distribution of the Series B Notes and will file such consents to service of process or other documents as may be necessary in order to effect such qualification. (f) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, to pay all costs, expenses, fees and taxes incident to and in connection with: (i) the preparation, printing, filing and distribution of the Preliminary Offering Memorandum and the Offering Memorandum (including, without limitation, financial statements and exhibits) and all amendments and supplements thereto, (ii) the preparation, printing (including, without limitation, word processing and duplication costs) and delivery of this Agreement, the Indenture, the Registration Rights Agreement, all preliminary and final Blue Sky Memoranda and all other agreements, memoranda, correspondence and other documents printed and delivered in connection herewith and with the Exempt Resales, (iii) the issuance and delivery by the Company and the Guarantors of the Notes and the Note Guarantees, (iv) the qualification of the Notes and the Note Guarantees for offer and sale under the securities or Blue Sky laws of the several states (including, without limitation, the reasonable fees and disbursements of your counsel relating to such registration or qualification), (v) furnishing such copies of the Preliminary Offering Memorandum and the Offering Memorandum, and all amendments and supplements thereto, as may be reasonably requested for use in connection with the Exempt Resales, (vi) the preparation of certificates for the Notes and the Note Guarantees (including, without limitation, printing and engraving thereof), (vii) the fees, disbursements and expenses of the Company's and the Guarantors' counsel and accountants, (viii) all expenses and listing fees in connection with the application for quotation of the Series B Notes in the National Association of Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL ("PORTAL"), (ix) the rating of the Notes by rating agencies, if any, (x) all fees and expenses (including fees and expenses of counsel) of the Company and the Guarantors in connection with approval of the Notes by DTC for "book-entry" transfer and (xii) the performance by the Company and the Guarantors of their other obligations under this Agreement and the other Operative Documents to which they are a party. (g) To use the proceeds from the sale of the Series B Notes in the manner described in the Offering Memorandum under the caption "USE OF PROCEEDS." (h) Not to voluntarily claim, and to actively resist any attempts to claim, the benefit of any usury laws against the holders of the Notes. (i) Prior to the Closing Date, to furnish to you, as soon as they have been prepared, a copy of any unaudited interim consolidated financial statements of Holding or the Company for any period subsequent to the period covered by the financial statements appearing in the Offering Memorandum. (j) To use its best efforts to do and perform all things required to be done and performed under this agreement by it prior to or after the Closing Date and to satisfy all conditions precedent on its part to the delivery of the Series B Notes and the Note Guarantees. (k) Not to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Act) that would be integrated with the sale of the Series B Notes in a manner that would require the registration under the Act of the sale to you or the Eligible Purchasers of Series B Notes. (l) For so long as any of the Notes remain outstanding and during any period in which the Company is not subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make available to any Eligible Purchaser or beneficial owner of Notes in connection with any sale thereof and any prospective purchaser of such Notes from such Eligible Purchaser or beneficial owner, the information required by Rule 144A(d)(4) under the Act. (m) To comply with its agreements in the Registration Rights Agreement, and all agreements set forth in the representation letters of the Company and the Guarantors to DTC relating to the approval of the Notes by DTC for "book-entry" transfer. (n) To cause the Registered Exchange Offer to be made in the appropriate form, as contemplated by the Registration Rights Agreement, to permit registration of the Series C Notes and note guarantees thereof to be offered in exchange for the Series B Notes and Note Guarantees and to comply with all applicable federal and state securities laws in connection with the Registered Exchange Offer. (o) To use its best efforts to effect the inclusion of the Series B Notes in PORTAL. (p) For so long as any of the Notes are outstanding, to deliver without charge to the Initial Purchaser, promptly upon their becoming available, copies of (i) all reports or other publicly available information that the Company or any of the Guarantors shall mail or otherwise make available to its securityholders and (ii) all reports, financial statements and proxy or information statements filed by the Company or any of the Guarantors with the Commission or any national securities exchange and such other publicly available information concerning Holding, the Company or its Subsidiaries, including without limitation, press releases. (q) Neither Holding, the Company nor any of its Subsidiaries will take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of any security of the Company or any of the Guarantors to facilitate the sale or resale of the Notes. Except as permitted by the Act, the Company and the Guarantors will not distribute any preliminary offering memorandum, offering memorandum or other offering material in connection with the offering and sale of the Notes. (r) To comply with the agreements in the Indenture, the Registration Rights Agreement and each other Operative Document. 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS. Each of the Company and the Guarantors represents and warrants to you that: (a) The Offering Memorandum (and each supplement and amendment thereto) has been prepared in connection with the Exempt Resales. The Offering Memorandum does not, and any supplement or amendment thereto will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties contained in this paragraph (a) shall not apply to statements in or omissions from the Offering Memorandum (or any supplement or amendment to it) made in reliance upon and in conformity with information relating to you furnished to the Company and the Guarantors in writing by you expressly for use therein. The Company and the Guarantors acknowledge for all purposes under this Agreement that the statements set forth in the last paragraph on the cover page, the stabilization legend, and the third, fifth and seventh paragraphs under the caption "Plan of Distribution" in the Offering Memorandum (or any amendment or supplement) constitute the only written information furnished to the Company and the Guarantors by you expressly for use in the Offering Memorandum (or any amendment or supplement thereto). (b) Each of Holding, the Company and the Subsidiaries is a duly organized and validly existing corporation in good standing under the laws of its jurisdiction of incorporation, has the requisite corporate power and authority to own, lease and operate its properties and to conduct its business as it is currently being conducted and described in the Offering Memorandum, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction where the ownership, leasing or operation of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not, singly or in the aggregate, have a material adverse effect on the properties, business, results of operations, condition (financial or otherwise), affairs or prospects of Holding, the Company and the Subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT"). (c) Each of the Company and the Guarantors has all necessary corporate power and authority to execute and deliver this Agreement, the Notes (in the case only of the Company), the Note Guarantees (in the case only of the Guarantors), the Indenture and the Registration Rights Agreement, to perform its obligations under this Agreement, the Indenture and the Registration Rights Agreement and to authorize, issue, sell and deliver the Notes and the Note Guarantees, as the case may be, as contemplated by this Agreement. (d) This Agreement has been duly authorized and validly executed and delivered by the Company and each of the Guarantors and constitutes a legal, valid and binding agreement of the Company and each of the Guarantors, enforceable against each of them in accordance with its terms (assuming the due execution and delivery hereof by you), subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws in effect from time to time with respect to creditors' rights generally and to principles of equity, whether at law or in equity and except as rights to indemnity and contribution thereunder may be limited by federal and state securities laws and public policy considerations underlying such laws. (e) The issuance and sale of the Series B Notes has been duly authorized by the Company, and all legally required corporate proceedings by the Company in connection with the issuance and sale of the Series B Notes have been taken; each of the Series B Notes, when issued and delivered to and paid for by the Initial Purchaser in accordance with this Agreement (assuming the due authentication thereof by the Trustee), will be a legal, valid and binding obligation of the Company entitled to the benefits provided by the Indenture, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws in effect from time to time with respect to creditors' rights generally and to principles of equity, whether at law or in equity and except as rights to indemnity and contribution thereunder may be limited by federal and state securities laws and public policy considerations underlying such laws. (f) The Company has all requisite power to authorize and issue the Series C Notes; the issuance of the Series C Notes has been duly authorized by the Company and all legally required corporate proceedings by the Company in connection with the issuance of the Series C Notes have been taken; each of the Series C Notes, when and if issued and delivered in accordance with the terms of the Registration Rights Agreement and the Indenture, will be validly executed, issued and delivered and (assuming the due authentication thereof by the Trustee) will be a legal, valid and binding obligation of the Company entitled to the benefits provided by the Indenture, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws in effect from time to time with respect to creditors' rights generally and to principles of equity, whether at law or in equity and except as rights to indemnity and contribution thereunder may be limited by federal and state securities laws and public policy considerations underlying such laws. (g) The Note Guarantee to be endorsed on the Series B Notes by each Guarantor has been duly authorized by such Guarantor and, on the Closing Date, will have been duly executed and delivered by each such Guarantor and will conform to the description thereof in the Offering Memorandum. When the Series B Notes have been issued, executed and authenticated in accordance with the Indenture and delivered to and paid for by the Initial Purchaser in accordance with the terms of this Agreement, the Note Guarantee of each Guarantor endorsed thereon will constitute valid and legally binding obligations of such Guarantor, enforceable against such Guarantor in accordance with its terms and entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganizations, moratorium and similar laws in effect from time to time with respect to creditors' rights generally and to principles of equity whether at law or in equity. (h) The note guarantee to be endorsed on the Series C Notes by each Guarantor has been duly authorized by such Guarantor and all legally required corporate proceedings by such Guarantor in connection with the issuance of such note guarantees have been taken; the note guarantees, when issued, will have been duly executed and delivered by each such Guarantor and will conform to the description thereof in the Offering Memorandum. When the Series C Notes have been issued, executed and authenticated in accordance with the terms of the Registered Exchange Officer and the Indenture, the note guarantee of each Guarantor endorsed thereon will constitute valid and legally binding obligations of such Guarantor, enforceable against such Guarantor in accordance with its terms and entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganizations, moratorium and similar laws in effect from time to time with respect to creditors' rights generally and to principles of equity whether at law or in equity. (i) The Indenture has been duly authorized by the Company and each Guarantor and, on the Closing Date, will have been duly executed by the Company and each Guarantor and will conform to the description thereof in the Offering Memorandum. When the Indenture has been duly executed and delivered, the Indenture will be a valid and legally binding agreement of the Company and each Guarantor, enforceable against each of them in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws in effect from time to time with respect to creditors' rights generally and to principles of equity, whether at law or in equity and except as rights to indemnity and contribution thereunder may be limited by federal and state securities laws and public policy considerations underlying such laws. (j) The Registration Rights Agreement has been duly authorized by the Company and each Guarantor and, on the Closing Date, will have been duly executed by the Company and each Guarantor and will conform to the description thereof in the Offering Memorandum. When the Registration Rights Agreement has been duly executed and delivered, the Registration Rights Agreement will be a valid and legally binding agreement of the Company and each Guarantor, enforceable against each of them in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws in effect from time to time with respect to creditors' rights generally and to principles of equity, whether at law or in equity and except as rights to indemnity and contribution thereunder may be limited by federal and state securities laws and public policy considerations underlying such laws. (k) The entities listed on Schedule A hereto are, and on the Closing Date will be, the only Subsidiaries, direct or indirect, of the Company. All of the issued and outstanding shares of capital stock of, or other ownership interests in, each Subsidiary have been duly and validly authorized and issued. All of the shares of capital stock of, or other ownership interests in, each Subsidiary are owned, directly or through Subsidiaries, by the Company. All such shares of capital stock are fully paid and nonassessable, and are owned free and clear of any security interest, mortgage, pledge, claim, lien or encumbrance (each, a "LIEN") other than those Liens created pursuant to the Credit Facility (as defined in the Offering Memorandum). There are no outstanding subscriptions, rights, warrants, options, calls, convertible securities, commitments of sale or Liens related to or entitling any person to purchase or otherwise to acquire any shares of the capital stock of, or other ownership interest in, any Subsidiary. (l) Except as set forth on Schedule B hereto, neither Holding, the Company nor any of the Subsidiaries is in violation of its respective charter or bylaws or in default in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or other contract, lease or other instrument to which Holding, the Company or any of the Subsidiaries is a party or by which any of them is bound, or to which any of the property or assets of Holding, the Company or any of the Subsidiaries is subject. To the knowledge of the Company and the Guarantors, there exists no condition which, with notice, the passage of time or otherwise, would constitute a default under any such document or instrument. (m) The execution and delivery of this Agreement, the Indenture, the Registration Rights Agreement, the Notes and the Note Guarantees, the issuance and sale of the Notes and the Note Guarantees, the performance of this Agreement, the Indenture and the Registration Rights Agreement, compliance by the Company and the Guarantors with the provisions hereof and thereof and of the Notes and the Note Guarantees (in each case, to the extent the Company or such Guarantor is a party thereto), the consummation of each of the transactions contemplated hereby and thereby, in each case, as applicable, will not result in a breach or violation of any of the respective charters or bylaws of Holding, the Company or any of the Subsidiaries or any of the terms or provisions of, or constitute a default or cause an acceleration of any obligation under, or result in the imposition or creation of (or the obligation to create or impose) a Lien with respect to, any bond, note, debenture or other evidence of indebtedness or any indenture, mortgage, deed of trust or other agreement or instrument to which Holding, the Company or any of the Subsidiaries is a party or by which it or any of them is bound, or to which any properties of Holding, the Company or any of the Subsidiaries is or may be subject, or contravene any order of any court or governmental agency or body having jurisdiction over Holding, the Company or any of the Subsidiaries or any of their properties, or violate or conflict with any statute, rule or regulation or administrative or court decree applicable to Holding, the Company or any of the Subsidiaries, or any of their respective properties. (n) There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, pending against or affecting Holding, the Company or any of the Subsidiaries, or any of their respective properties, which is required to be disclosed and is not so disclosed, in the Offering Memorandum, or which would result, singly or in the aggregate, in a Material Adverse Effect or which would materially and adversely affect the consummation of this Agreement or the transactions contemplated hereby, and to the best knowledge of the Company and the Guarantors, no such proceedings are contemplated or threatened. (o) To the knowledge of the Company and the Guarantors, no action has been taken and no statute, rule or regulation or order has been enacted, adopted or issued by any governmental agency or body which prevents the issuance of the Notes or the Note Guarantees, prevents or suspends the use of any Offering Memorandum or suspends the sale of the Notes or the Note Guarantees, in any jurisdiction referred to in Section 4(e) hereof; no injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction has been issued with respect to Holding, the Company or any of the Subsidiaries which would prevent or suspend the issuance or sale of the Notes or the Note Guarantees, or the use of any Offering Memorandum in any jurisdiction referred to in Section 4(e) hereof; no action, suit or proceeding is pending against or, to the best knowledge of the Company and the Guarantors threatened against or affecting Holding, the Company or any of the Subsidiaries before any court or arbitrator or any governmental body, agency or official, domestic or foreign, which, if adversely determined, would materially interfere with or adversely affect the issuance of the Notes or the Note Guarantees, or in any manner draw into question the validity of this Agreement, the Indenture, the Registration Rights Agreement, the Notes or the Note Guarantees; and every request of the Commission or any securities authority or agency of any jurisdiction for additional information (to be included in the Offering Memorandum or otherwise) has been complied with. (p) Except as set forth in the Offering Memorandum, Holding, the Company and the Subsidiaries are in compliance with all applicable existing federal, state and local laws and regulations relating to protection of human health or the environment or imposing liability or standards of conduct concerning any Hazardous Material ("ENVIRONMENTAL LAWS"), except where the failure to comply would not have a Material Adverse Effect. The term "Hazardous Material" means (a) any "hazardous substance" as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (b) any "hazardous waste" as defined by the Resource Conservation and Recovery Act, as amended, (c) any petroleum or petroleum product, (d) any polychlorinated biphenyl and (e) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance. (q) Neither Holding, the Company nor any of the Subsidiaries has violated any federal, state or local law relating to discrimination in the hiring, promotion or pay of employees or any applicable wage or hour laws, nor any provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") or the rules and regulations promulgated thereunder, nor has Holding, the Company or any of the Subsidiaries engaged in any unfair labor practice, which in each case would result, singly or in the aggregate, in a Material Adverse Effect. There is (i) no significant unfair labor practice complaint pending against Holding, the Company or any of the Subsidiaries or, to the best knowledge of the Company and the Guarantors, threatened against any of them before the National Labor Relations Board or any state or local labor relations board, and no significant grievance or significant arbitration proceeding arising out of or under any collective bargaining agreement is so pending against Holding, the Company or any of the Subsidiaries or, to the best knowledge of the Company and the Guarantors, threatened against any of them, (ii) no significant strike, labor dispute, slowdown or stoppage is pending against Holding, the Company or any of the Subsidiaries or, to the best knowledge of the Company and the Guarantors, threatened against Holding, the Company or any of the Subsidiaries and (iii) to the best knowledge of the Company and the Guarantors, no union representation question exists with respect to the employees of Holding, the Company or any of the Subsidiaries and no union organizing activities are taking place, except (with respect to any matter specified in clause (i), (ii) or (iii) above, singly or in the aggregate) such as could not have a Material Adverse Effect. (r) Except (i) as would not result, singly or in the aggregate, in a Material Adverse Effect, and (ii) for the liens created pursuant to (A) the Credit Facility (as defined in the Offering Memorandum), (B) the Nevada Bonds and the South Carolina Bonds (as defined in the Offering Memorandum), (C) the Pledge, Escrow and Disbursement Agreement dated June 18, 1996, among Holding, First Trust of New York, National Association ("FIRST TRUST"), as trustee, and First Trust, as escrow agent, and (D) the Holding Pledge and Security Agreement dated June 18, 1996 between Holding and First Trust, as collateral agent, Holding, the Company and each of the Subsidiaries has good and marketable title, free and clear of all Liens (except Liens for taxes not yet due and payable), to all property and assets reflected in the Company's consolidated financial statements at and for the year ended December 27, 1997. (s) The firms of accountants that have certified or shall certify the applicable financial statements and supporting schedules of Holding, the Company and the Subsidiaries as part of the Offering Memorandum are independent public accountants, as required by the Act and the Exchange Act. The consolidated historical and pro forma financial statements, together with related schedules and notes, set forth in the Offering Memorandum comply as to form in all material respects with the requirements of the Act. Such historical financial statements fairly present in all material respects the financial position of Holding, the Company and the Subsidiaries at the respective dates indicated and the results of operations and cash flows for the respective periods indicated, in accordance with generally accepted accounting principles in the United States ("GAAP") consistently applied throughout such periods (other than as set forth on Schedule C hereto). Such pro forma financial statements have been prepared on a basis consistent with such historical statements, except for the pro forma adjustments specified therein, and give effect to assumptions made on a reasonable basis. The other financial and statistical information and data included in the Offering Memorandum, historical and pro forma, are, in all material respects, prepared on a basis consistent with such financial statements and the books and records of Holding, the Company and the Subsidiaries, as the case may be. (t) Subsequent to the respective dates as of which information is given in the Offering Memorandum and up to the Closing Date (except as disclosed in the Offering Memorandum), neither Holding, the Company nor any of the Subsidiaries has incurred any liabilities or obligations, direct or contingent, which are material, individually or in the aggregate, to Holding, the Company or any Subsidiary, nor entered into any transaction not in the ordinary course of business and there has not been, singly or in the aggregate, any material adverse change, or any development which may reasonably be expected to involve a material adverse change, in the properties, business, results of operations, condition (financial or otherwise), affairs or prospects of Holding, the Company or any Subsidiary (each, a "MATERIAL ADVERSE CHANGE"). (u) All tax returns required to be filed by Holding, the Company or any of the Subsidiaries in any jurisdiction have been filed, other than those filings being contested in good faith, and all material taxes, including withholding taxes, penalties and interest, assessments, fees and other charges due or claimed to be due from such entities have been paid, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without penalty or interest. (v) No authorization, approval or consent or order of, or filing with, any court or governmental body or agency is necessary in connection with the Transaction or the transactions contemplated by this Agreement, except such as may be required by the NASD, the Trust Indenture Act of 1939, as amended (the "TIA"), or the Act, or have been obtained and made under state securities or Blue Sky laws or regulations. No consents or waivers from any person under any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument are required to consummate the transactions contemplated by this Agreement, the Notes, the Note Guarantees, the Indenture and the Registration Rights Agreement or the Offering Memorandum, except for such consents or waivers which have been, or will be, obtained prior to the Closing Date. (w) (i) Each of Holding, the Company and the Subsidiaries has all certificates, consents, exemptions, orders, permits, licenses, authorizations or other approvals (each, an "AUTHORIZATION") of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, necessary or required to own, lease, license and use its properties and assets and to engage in the business currently conducted by it, except as such are described in the Offering Memorandum or to the extent that the failure to obtain or file would not, singly or in the aggregate, have a Material Adverse Effect, (ii) all such Authorizations are valid and in full force and effect and (iii) Holding, the Company and the Subsidiaries are in compliance in all material respects with the terms and conditions of all such Authorizations that have been obtained thereby and with the rules and regulations of the regulatory authorities and governing bodies having jurisdiction with respect thereto. Neither Holding, the Company nor any Subsidiary believes that any governmental body or agency is considering limiting, suspending or revoking any such material license, certificate, permit, authorization, approval, franchise or right. (x) Neither Holding, the Company nor any of the Subsidiaries is (i) an "investment company" or a company "controlled" by an investment company within the meaning of the Investment Company Act of 1940, as amended, or (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the Public Utility Holding Company Act of 1935, as amended. (y) No holder of any security of Holding, the Company or any of the Subsidiaries has or will have any right to require the registration of such security by virtue of any transaction contemplated by this Agreement. (z) There are no contracts, agreements or understandings between Holding, the Company or any of the Subsidiaries and any person (other than the Initial Purchaser) that would give rise to a valid claim against Holding, the Company, the Subsidiaries or the Initial Purchaser for a brokerage commission, finder's fee or like payment in connection with the issuance, purchase and sale of the Notes. (aa) Holding, the Company and the Subsidiaries possess all material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names (collectively, "INTELLECTUAL PROPERTY") presently employed by them in connection with the businesses now operated by them, and, except as set forth in the Offering Memorandum, neither Holding, the Company nor any Subsidiary has received any notice of infringement of or conflict with asserted rights of others with respect to the foregoing. (bb) Holding, the Company and the Subsidiaries each maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (cc) The present fair saleable value of the assets of each of the Company and the Guarantors exceeds the amount that will be required to be paid on or in respect of the existing debts and other liabilities (including contingent liabilities) of each such person as they become absolute and matured. The assets of each of the Company and the Guarantors do not constitute unreasonably small capital to carry out their businesses as conducted or as proposed to be conducted. Neither the Company nor any of the Guarantors intends to, nor does it believe that it will, incur debts beyond its ability to pay such debts as they mature. Upon the issuance of the Series B Notes, the present fair saleable value of the assets of each of the Company and the Guarantors will exceed the amount that will be required to be paid on or in respect of the existing debts and other liabilities (including contingent liabilities) of such person as they become absolute and matured. The assets of each of the Company and the Guarantors, upon the issuance of the Series B Notes, will not constitute unreasonably small capital to carry out their businesses as now conducted, including the capital needs of each of the Company and the Guarantors, taking into account the projected capital requirements and capital availability of each of the Company and the Guarantors. (dd) None of Holding, the Company, the Subsidiaries or any agent thereof acting on the behalf of any of them has taken, and none of them will take, any action that might cause this Agreement, any of the other Operative Documents or the issuance or sale of the Series B Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System. (ee) Holding, the Company and each Subsidiary maintains insurance covering their properties, operations, personnel and businesses. Such insurance insures against such losses and risks as are adequate in accordance with customary industry practice to protect Holding, the Company and the Subsidiaries and their businesses. Neither Holding, the Company nor any Subsidiary has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance. All such insurance is outstanding and duly in force on the date hereof and will be outstanding and duly in force on the Closing Date. (ff) When the Series B Notes and Note Guarantees are issued and delivered pursuant to this Agreement, neither the Series B Notes nor the Note Guarantees will be of the same class (within the meaning of Rule 144A under the Act) as securities of the Company or the Guarantors that are listed on a national securities exchange registered under Section 6 of the Exchange Act or that are quoted in a United States automated inter-dealer quotation system. (gg) Assuming (i) that your representations and warranties in Section 6 are true, (ii) compliance by you with your covenants set forth in Section 8 and (iii) that each of the Eligible Purchasers is a QIB, the purchase and resale of the Series B Notes pursuant hereto (including pursuant to the Exempt Resales) is exempt from the registration requirements of the Act. No form of general solicitation or general advertising was used by the Company, the Guarantors or any of their representatives (other than you, as to whom the Company and the Guarantors make no representation) in connection with the offer and sale of the Series B Notes, including, but not limited to, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. No securities of the same class as the Series B Notes have been issued and sold by the Company within the six-month period immediately prior to the date hereof. (hh) Set forth on Schedule D hereto is a list of each employee pension or benefit plan with respect to which the Company or any corporation considered an affiliate of the Company within the meaning of Section 407(d)(7) of ERISA (an "AFFILIATE") is a party in interest or disqualified person. The execution and delivery of this Agreement, the other Operative Documents and the sale of the Series B Notes to be purchased by the Eligible Purchasers will not involve any prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code. The representation made by the Company and the Guarantors in the preceding sentence is made in reliance upon and subject to the accuracy of, and compliance with, the representations and covenants made or deemed made by the Eligible Purchasers as set forth in the Offering Memorandum under the Section entitled "Notice to Investors." (ii) The Offering Memorandum as of its date, and each amendment or supplement thereto, as of its date, contains the information specified in, and meets the requirements of Rule 144A(d)(4) of the Act. (jj) Except as disclosed in the Offering Memorandum, there are no business relationships or related party transactions required to be disclosed therein pursuant to Item 404 of Regulation S-K of the Commission (assuming for purposes of this paragraph 5(jj) that Regulation S-K is applicable to the Offering Memorandum). (kk) Prior to the effectiveness of any Registration Statement, the Indenture is not required to be qualified under the TIA. 6. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Initial Purchaser represents and warrants to the Company and the Guarantors that: (a) The Initial Purchaser is either a QIB or an accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Act), in either case with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Series B Notes. (b) The Initial Purchaser (i) is not acquiring the Series B Notes with a view to any distribution thereof or with any present intention of offering or selling any of the Series B Notes in a transaction that would violate the Act or the securities laws of any State of the United States or any other applicable jurisdiction and (ii) will be reoffering and reselling the Series B Notes only to QIBs in reliance on the exemption from the registration requirements of the Act provided by Rule 144A. (c) The Initial Purchaser also understands that the Company and the Guarantors and, for purposes of the opinions to be delivered to you pursuant to Sections 8(f) and 8(g) hereof, each of O'Sullivan Graev & Karabell, LLP and Latham & Watkins, will rely upon the accuracy and truth of the foregoing representations and you hereby consent to such reliance. (d) The Initial Purchaser further agrees that, in connection with the Exempt Resales, the Initial Purchaser will solicit offers to buy the Series B Notes only from, and will offer to sell the Series B Notes only to, the Eligible Purchasers. You further agree that you will offer to sell the Series B Notes only to, and will solicit offers to buy the Series B Notes only from, persons who in purchasing such Series B Notes will be deemed to have represented and agreed (1) if such Eligible Purchaser is a QIB, that they are purchasing the Series B Notes for their own account or an account with respect to which they exercise sole investment discretion and that they or such accounts are QIBs, (2) that such Series B Notes will not have been registered under the Act and may be resold, pledged or otherwise transferred, only (A) (I) to a person who the seller reasonably believes is a "qualified institutional buyer" within the meaning of Rule 144A under the Act in a transaction meeting the requirements of Rule 144A, or in accordance with Rule 144 under the Act, or pursuant to another exemption from the registration requirements of the Act (and based upon an opinion of counsel if the Company and the Guarantors so request) or (II) to the Company and (B) in each case, in accordance with any applicable securities laws of any State of the United States or any other applicable jurisdiction, (3) that the holder will, and each subsequent holder is required to, notify any purchaser from it of the security evidenced thereby of the resale restrictions set forth in (2) above. 7. INDEMNIFICATION. (a) The Company and each Guarantor (the "INDEMNIFYING PARTIES") agree to indemnify and hold harmless (i) the Initial Purchaser, (ii) each person, if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Initial Purchaser (any of the persons referred to in this clause (ii) being hereinafter referred to as a "CONTROLLING PERSON") and (iii) the respective officers, directors, partners, employees, representatives and agents of the Initial Purchaser or any controlling person (any person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an "INDEMNIFIED PERSON") to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including without limitation and as incurred, reimbursement of all reasonable costs of investigating, preparing or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Person) directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum (or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to the Initial Purchaser furnished in writing to the Company and the Guarantors by the Initial Purchaser expressly for use in the Offering Memorandum (or any amendment or supplement thereto); provided, however, that the foregoing indemnity shall not inure to the benefit of the Initial Purchaser from whom the person asserting any such losses, claims, damages, liabilities, judgments, actions or expenses purchased Notes, or any controlling person of the Initial Purchaser, if a copy of the Offering Memorandum (including any amendment or supplement thereto delivered to the Initial Purchaser prior to the date such Offering Memorandum was sent or given to such purchaser) was not sent or given by or on behalf of the Initial Purchaser to such person at or prior to the written confirmation of the sale of Notes to such person, and if the Offering Memorandum (including any amendment or supplement thereto delivered to the Initial Purchaser prior to the date such Offering Memorandum was sent or given to such purchaser) cured the defect giving rise to such losses, claims, damages, liabilities, judgments, actions or expenses. The Indemnifying Parties shall notify you promptly of the institution, threat or assertion of any claim, proceeding (including any governmental investigation) or litigation in connection with the matters addressed by this Agreement which involves the Indemnifying Parties or an Indemnified Person. (b) In case any action or proceeding (including any governmental investigation) shall be brought or asserted against any of the Indemnified Persons with respect to which indemnity may be sought against the Indemnifying Parties, such Indemnified Person (or the entity controlled by such controlling person) shall promptly notify the Company in writing (provided that the failure to give such notice shall not relieve the Indemnifying Parties of their obligations pursuant to this Agreement unless such failure to notify has materially prejudiced the ability of the Indemnifying Parties to defend any such claim) and the Indemnifying Parties shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Parties and payment of all reasonable fees and expenses. Such Indemnified Person shall have the right to employ its own counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the Indemnified Party's expense unless (i) the employment of such counsel has been specifically authorized in writing by the Company, (ii) the Indemnifying Parties have not assumed the defense and employed counsel reasonably satisfactory to such Indemnified Party within a reasonable time after notice of commencement of such action or proceeding or (iii) the named parties to any such action or proceeding (including any impleaded parties) include both an Indemnified Party and any Indemnifying Party and any such Indemnified Party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Indemnifying Parties (in which case the Indemnifying Parties shall not have the right to assume the defense of such action on behalf of the Indemnified Parties, it being understood, however, that the Indemnifying Parties shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Persons, which firm shall be designated by the Initial Purchaser). The Indemnifying Parties shall be liable for any settlement of any such action or proceeding effected with the Indemnifying Parties' prior written consent, which consent will not be unreasonably withheld, and the Indemnifying Parties agree to indemnify and hold harmless any Indemnified Person from and against any loss, claim, damage, liability or expense by reason of any settlement of any action effected with the written consent of the Indemnifying Parties. If at any time the Indemnified Person shall have requested the Indemnifying Parties to reimburse the Indemnified Person for fees and expenses of counsel as contemplated by the second sentence of this paragraph in connection with any such action or proceeding, the Indemnifying Parties agree that they shall be liable for any settlement of any proceeding effected without their written consent so long as they receive written notice of such settlement if (i) such settlement is entered into more than ninety business days after receipt by such Indemnifying Parties of the aforesaid request and (ii) such Indemnifying Parties shall not have reimbursed the Indemnified Party in accordance with such request prior to the date of such settlement. The Indemnifying Parties shall not, without the prior written consent of each Indemnified Person, which will not be unreasonably withheld, settle or compromise or consent to the entry of a judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Person is a party thereto), unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Person from all liability arising out of such action, claim, litigation or proceeding. (c) The Initial Purchaser agrees to indemnify and hold harmless the Company and the Guarantors, their respective directors and officers, any person controlling (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company or the Guarantors, and the officers, directors, partners, employees, representatives and agents of each such person to the same extent as the foregoing indemnity from the Indemnifying Parties to each of the Indemnified Persons, but only with respect to claims and actions based on information relating to the Initial Purchaser furnished in writing by the Initial Purchaser expressly for use in the Offering Memorandum. (d) If the indemnification provided for in this Section 7 is unavailable to a party entitled to indemnification pursuant to Section 7(b) or (c) in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities, expenses and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party (or parties, as applicable) on the one hand and the indemnified party (or parties, as applicable) on the other hand from the offering of the Series B Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party (or parties, as applicable) and the indemnified party (or parties, as applicable), as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors, on the one hand, and the Initial Purchaser, on the other hand, shall be deemed to be in the same proportion as the total proceeds from the offering (net of discounts and commissions but before deducting expenses) received by the Company and the Guarantors bear to the total discounts and commissions received by the Initial Purchaser, in each case as set forth in the table on the cover page of the Offering Memorandum. The relative fault of the Company and the Guarantors, on the one hand, and the Initial Purchaser, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact related to information supplied by the Company or the Guarantors, on the one hand, or the Initial Purchaser, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The indemnity and contribution obligations of the Company and the Guarantors set forth herein shall be in addition to any liability or obligation the Company and the Guarantors may otherwise have to any Indemnified Person. The Company and the Guarantors and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 7(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities, expenses or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7(d), the Initial Purchaser (and its related Indemnified Persons) shall not be required to contribute, in the aggregate, any amount in excess of the amount by which the total discount received by the Initial Purchaser applicable to the Series B Notes purchased by the Initial Purchaser exceeds the amount of any damages which the Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 8. CONDITIONS OF THE INITIAL PURCHASER'S OBLIGATIONS. The obligations of the Initial Purchaser to purchase the Series B Notes under this Agreement are subject to the satisfaction of each of the following conditions: (a) All the representations and warranties of the Company and the Guarantors contained in this Agreement shall be true and correct in all material respects (other than those representations and warranties that are qualified by a reference to materiality, which shall be true and correct in all respects) on the Closing Date with the same force and effect as if made on and as of the date hereof and the Closing Date, respectively. The Company and the Guarantors shall have performed or complied with in all material respects all of their obligations and agreements herein contained (other than those obligations and agreements that are qualified by a reference to materiality, which shall be performed or complied with in all respects) and required to be performed or complied with by them at or prior to the Closing Date. (b) No stop order suspending the sale of the Series B Notes in any jurisdiction referred to in Section 4(e) shall have been issued and no proceeding for that purpose shall have been commenced or shall be pending or threatened. (c) (i) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency which would, as of the Closing Date, prevent the issuance of the Series B Notes; (ii) no injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance of the Series B Notes; and (iii) on the Closing Date no action, suit or proceeding shall be pending against or affecting or, to the knowledge of the Company and the Guarantors, threatened against, Holding, the Company or any Subsidiary before any court or arbitrator or any governmental body, agency or official which, if adversely determined, would prohibit the issuance of the Series B Notes except as disclosed in the Offering Memorandum. (d) (i) Since the date hereof or since the dates as of which information is given in the Offering Memorandum, there shall not have been any Material Adverse Change, (ii) since the date of the latest balance sheet included in the Offering Memorandum, there shall not have been any material change in the capital stock or long-term debt, or material increase in short-term debt, of Holding, the Company or any of the Subsidiaries (other than as disclosed in the Offering Memorandum) and (iii) Holding, the Company and the Subsidiaries shall have no liability or obligation, direct or contingent, that is material to Holding, the Company and the Subsidiaries taken as a whole and is required to be disclosed on a balance sheet in accordance with GAAP and is not disclosed on the latest balance sheet included in the Offering Memorandum. (e) You shall have received certificates, dated the Closing Date, signed by (i) the President or any Vice President or any other executive officer and (ii) a principal financial or accounting officer of the Company and each of the Guarantors confirming, as of the Closing Date, the matters set forth in paragraphs (a), (b), (c) and (d) of this Section 8. (f) On the Closing Date, you shall have received an opinion (satisfactory to you and your counsel), dated the Closing Date, of O'Sullivan Graev & Karabell, LLP, counsel for the Company and the Guarantors, to the effect that: (i) Holding, the Company and each of the Subsidiaries is a duly organized and validly existing corporation in good standing under the laws of its jurisdiction of incorporation, has the requisite corporate power and authority to own, lease and operate its properties and to conduct its business as it is currently being conducted and described in the Offering Memorandum, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction listed on a schedule attached to the opinion; (ii) Each of the Company and the Guarantors has all necessary corporate power and authority to execute and deliver this Agreement, the Series B Notes, the Note Guarantees, the Indenture and the Registration Rights Agreement, as applicable, and to perform its obligations under this Agreement, the Indenture and the Registration Rights Agreement and to authorize, issue, sell and deliver the Series B Notes and the Note Guarantees, as applicable, as contemplated by this Agreement; (iii) Each of this Agreement, the Series B Notes, the Note Guarantees, the Registration Rights Agreement and the Indenture has been duly authorized, executed and delivered by the Company and the Guarantors, as applicable; (iv) When authenticated in accordance with the terms of the Indenture and delivered to and paid for by you in accordance with the terms of this Agreement, the Series B Notes will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally and to general principles of equity (regardless of whether enforcement is sought at law or in equity); (v) When the Series B Notes are executed and authenticated in accordance with the terms of the Indenture, each of the Notes Guarantees endorsed thereon will constitute valid and legally binding obligations of the respective Guarantor, enforceable against each such Guarantor in accordance with its terms and entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally and to general principles of equity (regardless of whether enforcement is sought at law or in equity). (vi) The Series C Notes and the note guarantees to be endorsed thereon have been duly authorized by the Company and each of the Guarantors, as the case may be; (vii) The Indenture, assuming due authorization, execution and delivery thereof by the Trustee, constitutes a valid and legally binding agreement of the Company and each of the Guarantors, enforceable against each of them in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally and to general principles of equity (regardless of whether enforcement is sought at law or in equity); (viii) The Notes, the Note Guarantees, the Indenture and the Registration Rights Agreement conform to the descriptions thereof contained in the Offering Memorandum in all material respects; (ix) All of the issued and outstanding shares of capital stock of, or other ownership interests in, each Subsidiary have been duly and validly authorized and issued and are fully paid and nonassessable. All of the shares of capital stock of, or other ownership interests in, each Subsidiary are owned, directly or through Subsidiaries, by the Company; (x) To the best knowledge of such counsel, there are no outstanding subscriptions, rights, warrants, options, calls, convertible securities, commitments of sale or Liens related to or entitling any person to purchase or otherwise to acquire any shares of the capital stock of, or other ownership interest in, any Subsidiary (other than those Liens created pursuant to the Credit Facility (as defined in the Offering Memorandum)); (xi) Neither Holding, the Company nor any of the Subsidiaries is (a) an "investment company" or a company "controlled" by an investment company within the meaning of the Investment Company Act of 1940, as amended, or (b) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the Public Utility Holding Company Act of 1935, as amended; (xii) The descriptions in the Offering Memorandum of statutes, legal and governmental proceedings, and contracts and other documents are accurate in all material respects; it being understood that such counsel need express no opinion as to the financial statements, notes or schedules or other financial data included therein; (xiii) To the knowledge of such counsel: (a) no action has been taken and no statute, rule or regulation or order has been enacted, adopted or issued by any governmental agency or body which prevents the issuance of the Series B Notes or the Notes Guarantees, and such counsel has received no notice which suspends the sale of the Series B Notes or the Notes Guarantees; (b) no injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction has been issued with respect to Holding, the Company or any of the Subsidiaries which would prevent or suspend the issuance or sale of the Series B Notes or the Notes Guarantees, and such counsel has not received notice which prevents or suspends the use of the Offering Memorandum in any jurisdiction referred to in Section 4(e) hereof; and (c) no action, suit or proceeding is pending against or threatened against or affecting Holding, the Company or any of the Subsidiaries before any court or arbitrator or any governmental body, agency or official, domestic or foreign, which, if adversely determined, would prevent the issuance of the Series B Notes or the Notes Guarantees; (xiv) Except as may be required under state securities or "Blue Sky" laws or regulations or by the NASD, as to which such counsel expresses no opinion, no authorization, approval, consent or order of, or filing with, any court or governmental body or agency is required for the consummation of the transactions contemplated by this Agreement, except such as have been obtained and made under the Act; no consents or waivers from any person under any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or instrument that is listed on a schedule to the opinion are required to consummate the transactions contemplated by this Agreement or the other Operative Documents, except for any consent or waiver which has been obtained on or prior to the Closing Date; (xv) On the Closing Date, the Offering Memorandum (except for financial statements, the notes thereto and related schedules and other financial data included therein, or omitted therefrom, as to which no opinion need be expressed) complied as to form in all material respects with Rule 144A(d)(4) of the Act; (xvi) To the best knowledge of such counsel, other than as set forth on Schedule B to this Agreement, neither Holding, the Company nor any of the Subsidiaries is in violation of its respective charter or bylaws or in default in the performance of any obligation, agreement or condition contained in any agreement or instrument listed on a schedule to the opinion; to the best knowledge of such counsel, there exists no condition which, with notice, the passage of time or otherwise, would constitute a default under any such document or instrument; (xvii) The execution and delivery of this Agreement and the other Operative Documents, the issuance and sale of the Series B Notes and the Note Guarantees, the performance of this Agreement and the other Operative Documents, compliance by the Company and the Guarantors with the provisions hereof and thereof and of the Series B Notes and the Note Guarantees, the consummation of the transactions contemplated hereby and thereby and the payments described in the Offering Memorandum under the caption "Use of Proceeds," in each case, as applicable, will not result in a breach or violation of any of the respective charters or bylaws of Holding, the Company or any of the Subsidiaries or any of the terms or provisions of, or constitute a default or cause an acceleration of any obligation under, or result in the imposition or creation of (or the obligation to create or impose) a Lien with respect to, any agreement or instrument listed on a schedule to the opinion, or, to the knowledge of such counsel, contravene any order of any court or governmental agency or body having jurisdiction over Holding, the Company or any of the Subsidiaries or any of their properties, or violate any statute, rule or regulation or administrative or court decree applicable to Holding, the Company or any of the Subsidiaries, or any of their respective properties; (xviii) The Registration Rights Agreement constitutes a valid and legally binding agreement of the Company and each Guarantor, enforceable against each of them in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, and to general equitable principles (regardless of whether considered in a proceeding in equity or at law) and, to the extent the Registration Rights Agreement provides for rights of indemnification and contribution, subject to the limitations of applicable law; (xix) When the Series B Notes are issued and delivered pursuant to the Purchase Agreement, such Series B Notes will not be of the same class (within the meaning of Rule 144A under the Act) as securities of the Company that are listed on a national securities exchange registered under Section 6 of the Exchange Act or that are quoted in a United States automated inter-dealer quotation system; (xx) No registration under the Act of the Series B Notes is required for the sale of the Series B Notes to you as contemplated hereby or for the Exempt Resales (assuming, without independent investigation, (A) that each of the Eligible Purchasers who buy the Series B Notes in the Exempt Resales are QIBs; (B) your representations and agreements relating to the absence of general solicitation are accurate and will be complied with; (C) the Company's and the Guarantors' representations and agreements relating to (1) whether the Notes are of the same class as other securities of the Company that are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system, (2) whether any form of general solicitation was used by the Company or the Guarantors, (3) other offerings of securities of the same class as the Notes and (4) whether the Offering Memorandum contains all the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Act are accurate; (D) each of the Eligible Purchasers to whom the Initial Purchaser initially resells the Series B Notes receives a copy of the Offering Memorandum at or prior to delivery of a confirmation of such sale, if delivery of the Offering Memorandum is required by applicable law; and (E) that the certificates representing the Series B Notes will bear the legend specified herein); (xxi) Prior to the Exchange Offer or the effectiveness of the Shelf Registration Statement, the Indenture is not required to be qualified under the TIA; and (xxii) The Offering Memorandum, as of its date, and each amendment or supplement thereto, as of its date, contained the information specified in, and meets the requirements of Rule 144A(d)(4) of the Act. The opinions set forth in paragraphs (ix) and (x) will be based solely on a review of stock records and other specified corporate record books of Holding, the Company and its Subsidiaries and applicable law. The opinion of O'Sullivan Graev & Karabell, LLP shall be rendered to you at the request of the Company and the Guarantors and shall so state therein. In giving their opinion required by this subsection 8(f), O'Sullivan Graev & Karabell, LLP shall additionally state that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors, your representatives and your counsel in connection with the preparation of the Offering Memorandum, although such counsel has not independently verified the accuracy, completeness or fairness of such statements (except as indicated above); and such counsel advises you that, on the basis of the foregoing, no facts came to such counsel's attention that caused such counsel to believe that the Offering Memorandum (as amended or supplemented), as of its date and the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no opinion nor express any statement or belief with respect to the financial statements and schedules and other financial and data included in, or omitted from, the Offering Memorandum or any supplement or amendment thereto). (g) You shall have received an opinion, dated the Closing Date, of Latham & Watkins, counsel for the Initial Purchaser, in form and substance reasonably satisfactory to you. (h) You shall have received letters on and as of the date hereof as well as on and as of the Closing Date (in the latter case constituting an affirmation of the statements set forth in the former), in form and substance satisfactory to you, from Ernst & Young, LLP, independent auditors, with respect to the financial statements and certain financial information contained in the Offering Memorandum relating to Holding, the Company and the Subsidiaries. (i) Latham & Watkins shall have been furnished with such documents and opinions, in addition to those set forth above, as they may reasonably require for the purpose of enabling them to review or pass upon the matters referred to in this Section 8 and in order to evidence the accuracy, completeness or satisfaction in all material respects of any of the representations, warranties or conditions herein contained. (j) Prior to the Closing Date, the Company and the Guarantors shall have furnished to you such further information, certificates and documents as you may reasonably request. (k) The Company, the Guarantors and the Trustee shall have entered into the Indenture and you shall have received counterparts, conformed as executed, thereof. (l) The Company, the Guarantors and you shall have entered into the Registration Rights Agreement, and you shall have received counterparts, conformed as executed thereof. (m) The Offering Memorandum shall have been distributed to you not later than 5:00 P.M., New York City time, on August 20, 1998, or at such later date and time as you may approve in writing. All opinions, certificates, letters and other documents required by this Section 8 to be delivered by the Company and the Guarantors will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to you. The Company and the Guarantors will furnish the Initial Purchaser with such conformed copies of such opinions, certificates, letters and other documents as it shall reasonably request. 9. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. (a) This Agreement shall become effective upon the execution and delivery of this Agreement by the parties hereto. (b) This Agreement may be terminated at any time on or prior to the Closing Date by you by notice to the Company if any of the following has occurred: (i) subsequent to the date of the Offering Memorandum or of this Agreement, any Material Adverse Change which, in the judgment of the Initial Purchaser, materially impairs the investment quality of the Series B Notes; (ii) any outbreak or escalation of hostilities or other national or international calamity or crisis or material adverse change in the financial markets of the United States or elsewhere, or any other substantial national or international calamity or emergency if the effect of such outbreak, escalation, calamity, crisis or emergency would, in the judgment of the Initial Purchaser, make it impracticable or inadvisable to market the Series B Notes or to enforce contracts for the sale of the Series B Notes; (iii) any suspension or limitation of trading generally in securities on the New York Stock Exchange, the American Stock Exchange or in the over-the-counter markets or any setting of minimum prices for trading on such exchange or markets; (iv) any declaration of a general banking moratorium by either federal or New York authorities; (v) the taking of any action by any federal, state or local government or agency in respect of its monetary or fiscal affairs that, in the judgment of the Initial Purchaser, has a material adverse effect on the financial markets in the United States and would, in the judgment of the Initial Purchaser, make it impracticable or inadvisable to market the Series B Notes or to enforce contracts for the sale of the Series B Notes; or (vi) the enactment, publication, decree, or other promulgation of any federal or state statute, regulation, rule or order of any court or other governmental authority which, in your judgment, materially and adversely affect, or will materially and adversely affect, the business or operations of the Company and the Guarantors. (c) The indemnities and contribution provisions and other agreements, representations and warranties of the Company and the Guarantors, their respective officers and directors and of the Initial Purchaser set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, and will survive delivery of and payment for the Series B Notes, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of the Initial Purchaser or by or on behalf of the Company and the Guarantors, the officers or directors of the Company and the Guarantors or any controlling person of the Company and the Guarantors, (ii) acceptance of the Series B Notes and payment for them hereunder and (iii) termination of this Agreement. (d) If this Agreement shall be terminated by the Initial Purchaser pursuant to clause (i) of paragraph (b) of this Section 9 or because of the failure or refusal on the part of the Company or any Guarantors to comply with the terms or to fulfill any of the conditions of this Agreement, the Company and each of the Guarantors agree to reimburse you for all out-of-pocket expenses (including the fees and disbursements of counsel) incurred by you. Notwithstanding any termination of this Agreement, the Company and each of the Guarantors shall be liable for all expenses which it has agreed to pay pursuant to Section 4(f) hereof. (e) Except as otherwise provided, this Agreement has been and is made solely for the benefit of and shall be binding upon the Company, the Guarantors, the Initial Purchaser, any Indemnified Person referred to herein and their respective successors and assigns, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The terms "successors and assigns" shall not include a purchaser of any of the Notes from the Initial Purchaser merely because of such purchase. 10. NOTICES. Notices given pursuant to any provision of this Agreement shall be addressed as follows: (a) if to the Company or any Guarantor, to Berry Plastics Corporation, 101 Oakley Street, P.O. Box 959, Evansville, Indiana 47710-0959, Attention: James M. Kratochvil, with a copy to O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New York, New York 10112, Attention: Michael Joseph O'Brien, and (b) if to the Initial Purchaser, to 277 Park Avenue, New York, New York 10172, Attention: Glenn Tongue, with a copy to Latham & Watkins, 885 Third Avenue, New York, New York 10022, Attention: Philip E. Coviello, or in any case to such other address as the person to be notified may have requested in writing. 11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. 12. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and other persons referred to in Section 5, and no other person will have any right or obligation hereunder. [signature page follows] This Agreement may be signed in various counterparts which together shall constitute one and the same instrument. Please confirm that the foregoing correctly sets forth the agreement among the Company, the Guarantors and you. [CAPTION] Very truly yours, BERRY PLASTICS CORPORATION By: Name: Title: BPC HOLDING CORPORATION By:_________________________________ Name: Title: BERRY IOWA CORPORATION By:_________________________________ Name: Title: BERRY STERLING CORPORATION By:_________________________________ Name: Title: BERRY TRI-PLAS CORPORATION By:_________________________________ Name: Title: AEROCON, INC. By:_________________________________ Name: Title: PACKERWARE CORPORATION By:_________________________________ Name: Title: BERRY PLASTICS DESIGN CORPORATION By:_________________________________ Name: Title: VENTURE PACKAGING, INC. By:_________________________________ Name: Title: VENTURE PACKAGING MIDWEST, INC. By:_________________________________ Name: Title: VENTURE PACKAGING SOUTHEAST, INC. By:_________________________________ Name: Title: NIM HOLDINGS LIMITED By:_________________________________ Name: Title: NORWICH INJECTION MOULDERS LIMITED By:_________________________________ Name: Title: The foregoing Purchase Agreement is hereby confirmed and accepted as of the date first above written. DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION By: Name: Title: SCHEDULE A Subsidiaries Berry Iowa Corporation Berry Tri-Plas Corporation Berry Sterling Corporation AeroCon, Inc. PackerWare Corporation Berry Plastics Design Corporation Venture Packaging, Inc. Venture Packaging Midwest, Inc. Venture Packaging Southeast, Inc. NIM Holdings Limited Norwich Injection Moulders Limited SCHEDULE B Pursuant to the terms of the Underwriting Agreement dated April 14, 1994 among the Company, Holding, Berry Iowa Corporation, Berry Tri-Plas Corporation (formerly known as Berry-CPI Plastics Corp.) and Donaldson, Lufkin & Jenrette Securities Corporation, the Company was obligated to use the proceeds of the offering of the Units (as defined in the Underwriting Agreement) to, among other things, purchase the assets of CPI-Plastics, Inc. and its affiliates (the "CPI TRANSACTION") or, in the alternative, to pay down certain industrial revenue bonds. The Company utilized a portion of such proceeds to consummate other acquisitions, rather than the CPI transaction or the repayment of such debt, and for other capital expenditures related to such consummated acquisitions. SCHEDULE C With respect to the valuation of the outstanding employee stock options, the Financial Statements contained in the 10-QA filed by Holding as of May 13, 1996, were not prepared on a consistent basis with Financial Statements in previously filed SEC Reports. SCHEDULE D 1. Berry Plastics Corporation Employees 401(k) Retirement Plan. 2. Berry Plastics Health and Welfare Plan, which includes the following benefits: (a) long term disability income (salaried employees); (b) long term disability income (hourly employees); (c) short term disability; (d) group life insurance; (e) vision; and (f) dental. 3. Berry Plastics Corporation Section 125 Plan. 1..Issuance of Securities. 2. Agreements to Sell and Purchase. 3. DELIVERY AND PAYMENT. 4. Agreements of the Company and the Guarantors. 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS. 6. Initial Purchaser's Representations and Warranties. 7. INDEMNIFICATION. 8. Conditions of the Initial Purchaser's Obligations. 9. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. 10. Notices. 11. GOVERNING LAW. 12. Successors. EX-21 29 LIST OF SUBSIDIARIES EXHIBIT 21 LIST OF SUBSIDIARIES 1. Berry Iowa Corporation, a Delaware corporation 2. Berry Tri-Plas Corporation, a Delaware corporation 3. Berry Sterling Corporation, a Delaware corporation 4. AeroCon, Inc., a Delaware corporation 5. PackerWare Corporation, a Kansas corporation 6. Berry Plastics Design Corporation, a Delaware corporation 7. Venture Packaging, Inc., a Delaware corporation 8. Venture Packaging Midwest, Inc., an Ohio corporation 9. Venture Packaging Southeast, Inc., a South Carolina corporation 10. NIM Holdings Limited, a company organized under the laws of England and Wales 11. Norwich Injection Moulders Limited, a company organized under the laws of England and Wales 12. Knight Plastics, Inc., a Delaware corporation EX-25 30 FORM T-1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 __________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE __________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _______ __________________________ UNITED STATES TRUST COMPANY OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-3818954 (Jurisdiction of incorporation (I. R. S. Employer if not a U. S. national bank) Identification No.) 114 West 47th Street 10036-1532 New York, New York (Zip Code) (Address of principal executive offices) __________________________ Berry Plastics Corporation (Exact name of OBLIGOR as specified in its charter) Delaware 35-1813706 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ BPC Holding Corporation (Exact name of OBLIGOR as specified in its charter) Delaware 35-1814673 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 1 __________________________ Berry Iowa Corporation (Exact name of OBLIGOR as specified in its charter) Delaware 42-1382173 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ Berry Tri-Plas Corporation (Exact name of OBLIGOR as specified in its charter) Delaware 56-1949250 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ Berry Sterling Corporation (Exact name of OBLIGOR as specified in its charter) Delaware 54-1749681 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ AeroCon, Inc. (Exact name of OBLIGOR as specified in its charter) Delaware 35-1948748 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ Packerware Corporation (Exact name of OBLIGOR as specified in its charter) Kansas 48-0759852 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 2 __________________________ Berry Plastics Design Corporation. (Exact name of OBLIGOR as specified in its charter) Delaware 62-1689708 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ Venture Packaging, Inc. (Exact name of OBLIGOR as specified in its charter) Delaware 51-0368479 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ Venture Packaging Midwest, Inc. (Exact name of OBLIGOR as specified in its charter) Ohio 34-1809003 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ Venture Packaging Southeast, Inc. (Exact name of OBLIGOR as specified in its charter) South Carolina 57-1029638 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ NIM Holdings Limited (Exact name of OBLIGOR as specified in its charter) England and Wales Pending (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 3 __________________________ Norwich Injection Moulders Limited (Exact name of OBLIGOR as specified in its charter) England and Wales Pending (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) __________________________ Knight Plastics, Inc. (Exact name of OBLIGOR as specified in its charter) Delaware 35-2056610 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 101 Oakley Street 47710 Evansville, Indiana (Zip code) (Address of principal executive offices) __________________________ 12 1/4% Senior Subordinated Notes due 2004 (Title of the indenture securities) 4 GENERAL 1. GENERAL INFORMATION Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Reserve Bank of New York (2nd District), New York, New York (Board of Governors of the Federal Reserve System) Federal Deposit Insurance Corporation, Washington, D.C. New York State Banking Department, Albany, New York (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. 2. AFFILIATIONS WITH THE OBLIGOR If the obligor is an affiliate of the trustee, describe each such affiliation. None 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15: Berry Plastics Corporation, BPC Holding Corporation, Berry Iowa Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, Aerocon, Inc., Packerware Corporation, Berry Plastics Design Corporation, Venture Packaging, Inc., Venture Packaging Midwest, Inc., Venture Packaging Southeast, Inc., NIM Holdings Limited, Norwich Injection Moulders Limited and Knight Plastics, Inc. currently are not in default. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of Form T- 1 are not required under General Instruction B. 16. LIST OF EXHIBITS T-1.1 -- Organization Certificate, as amended, issued by the State of New York Banking Department to transact business as a Trust Company, is incorporated by reference to Exhibit T-1.1 to Form T-1 filed on September 15, 1995 with the Commission pursuant to the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (Registration No. 33-97056). T-1.2 -- Included in Exhibit T-1.1. T-1.3 -- Included in Exhibit T-1.1. 5 16. LIST OF EXHIBITS (CONT'D) T-1.4 -- The By-Laws of United States Trust Company of New York, as amended, is incorporated by reference to Exhibit T-1.4 to Form T-1 filed on September 15, 1995 with the Commission pursuant to the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (Registration No. 33-97056). T-1.6 -- The consent of the trustee required by Section 321(b) of the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990. T-1.7 -- A copy of the latest report of condition of the trustee pursuant to law or the requirements of its supervising or examining authority. NOTE As of October 19, 1998, the trustee had 2,999,020 shares of Common Stock outstanding, all of which are owned by its parent company, U.S. Trust Corporation. The term "trustee" in Item 2, refers to each of United States Trust Company of New York and its parent company, U. S. Trust Corporation. In answering Item 2 in this statement of eligibility as to matters peculiarly within the knowledge of the obligor or its directors, the trustee has relied upon information furnished to it by the obligor and will rely on information to be furnished by the obligor and the trustee disclaims responsibility for the accuracy or completeness of such information. __________________ Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, United States Trust Company of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 19th day of October 1998. UNITED STATES TRUST COMPANY OF NEW YORK, Trustee By: Cynthia Chaney Assistant Vice President CC/kk (rv:pg) 6 EXHIBIT T-1.6 The consent of the trustee required by Section 321(b) of the Act. United States Trust Company of New York 114 West 47th Street New York, NY 10036 September 1, 1995 Securities and Exchange Commission 450 5th Street, N.W. Washington, DC 20549 Gentlemen: Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and subject to the limitations set forth therein, United States Trust Company of New York ("U.S. Trust") hereby consents that reports of examinations of U.S. Trust by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. Very truly yours, UNITED STATES TRUST COMPANY OF NEW YORK /S/GERARD F. GANEY By: Gerard F. Ganey Senior Vice President 7 EXHIBIT T-1.7 UNITED STATES TRUST COMPANY OF NEW YORK CONSOLIDATED STATEMENT OF CONDITION JUNE 30, 1998 ($ IN THOUSANDS) ASSETS Cash and Due from Banks $ 99,322 Short-Term Investments 171,315 Securities, Available for Sale 626,426 Loans 1,857,795 Less: Allowance for Credit Losses 16,708 Net Loans 1,841,087 Premises and Equipment 59,304 Other Assets 122,476 Total Assets $2,919,930 LIABILITIES Deposits: Non-Interest Bearing $ 648,072 Interest Bearing 1,646,049 Total Deposits 2,294,121 Short-Term Credit Facilities 306,807 Accounts Payable and Accrued Liabilities 144,419 TOTAL LIABILITIES $2,745,347 STOCKHOLDER'S EQUITY Common Stock 14,995 Capital Surplus 49,541 Retained Earnings 107,703 Unrealized Gains on Securities Available for Sale (Net of Taxes) 2,344 TOTAL STOCKHOLDER'S EQUITY 174,583 Total Liabilities and Stockholder's Equity $2,919,930 I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank do hereby declare that this Statement of Condition has been prepared in conformance with the instructions issued by the appropriate regulatory authority and is true to the best of my knowledge and belief. Richard E. Brinkmann, SVP & Controller July 31, 1998 8 EX-27 31 FINANCIAL DATA SCHEDULES WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 YEAR 9-MOS DEC-27-1997 JAN-02-1999 DEC-27-1997 SEP-26-1998 2688 7122 0 0 29423 36052 1038 844 29458 26423 63532 71535 174291 183544 66073 78980 239444 248521 42669 66515 306335 308391 0 0 16509 16728 6 6 (125490) (131812) 239444 248521 226953 205116 0 0 180249 151083 210754 182219 226 0 325 561 32237 26524 (14273) (3286) 138 331 (14411) (3617) 0 0 0 0 0 0 (14411) (3617) 0 0 0 0
EX-99.1 32 FORM OF LETTER OF TRANSMITTAL LETTER OF TRANSMITTAL TO TENDER FOR EXCHANGE 12{1}/{4}% SERIES B SENIOR SUBORDINATED NOTES DUE 2004 OF BERRY PLASTICS CORPORATION PURSUANT TO THE PROSPECTUS DATED JANUARY __, 1999
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY __, 1999, UNLESS EXTENDED. To: United States Trust Company of New York, as Exchange Agent BY REGISTERED OR CERTIFIED MAIL: BY FACSIMILE: BY HAND BEFORE 4:30 P.M.: United States Trust Company of New York (212)780-0592 United States Trust Company of New York P.O. Box 843 Attention: Customer 111 Broadway Cooper Station Service New York, New York 10006 New York, New York 10276 Attention: Lower Level Corporate Trust Window Attention: Corporate Trust Services CONFIRM BY TELEPHONE TO: BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M. (800) 548-6565 P.M. ON THE EXPIRATION DATE: United States Trust Company of New York 770 Broadway, 13th Floor New York, New York 10003
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned acknowledges that he or she has received the Prospectus, dated January __, 1999 (the "Prospectus), of Berry Plastics Corporation (the "Company") and this Letter of Transmittal (the "Letter of Transmittal"), which together constitute the Company's offer (the "Exchange Offer") to exchange its 12{1}/{4}% Series C Senior Subordinated Notes due 2004 (the "New Notes") for an equal principal amount of its 12{1}/{4}% Series B Senior Subordinated Notes due 2004 (the "Old Notes" and, together with the New Notes, the "Notes"). The terms of the New Notes are identical in all material respects to the Old Notes, except that the New Notes have been registered under the Securities Act of 1933, as amended (the "Securities Act"), and, therefore, will not bear legends restricting their transfer and will not contain certain provisions providing for an increase in the interest rate on the Old Notes under certain circumstances relating to the Registration Rights Agreement (as defined in the Prospectus). The term "Expiration Date" shall mean 5:00 p.m., New York City time, on February __, 1999, unless the Exchange Offer is extended as provided in the Prospectus, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. Capitalized terms used but not defined herein have the meanings given to them in the Prospectus. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, this Letter of Transmittal or an Agent's Message (as defined in the Prospectus) and any other documents required by this Letter of Transmittal to the Exchange Agent prior to the Expiration Date must tender their Old Notes according to the guaranteed delivery procedures set forth under the caption "The Exchange Offer - - Guaranteed Delivery Procedures" in the Prospectus. See Instruction 5. The term "Holder" with respect to the Exchange Offer means any person in whose name Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Old Notes must complete this Letter of Transmittal in its entirety. If the undersigned is a broker-dealer that receives New Notes for its own account in exchange for Old Notes, where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities (other than Old Notes acquired directly from the Company), the undersigned may be deemed to be an "underwriter" under the Securities Act and the undersigned acknowledges, therefore, that it will deliver a prospectus in connection with any resale of such New Notes. By so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. - -1- PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL DESCRIPTION OF 12{1}/{4}% SERIES B SENIOR SUBORDINATED NOTES DUE 2004 Aggregate Principal Amount Name(s) and Principal Tendered (must Address(es) of Amount be in integral Registered Holder(s) Certificate Represented by multiples (please fill in, if blank) Number(s) Certificate(s) of $1,000)* TOTAL {*}Unless indicated in the column labeled "Principal Amount Tendered," any tendering Holder of Old Notes will be deemed to have tendered the entire aggregate principal amount represented by the column labeled "Aggregate Principal Amount Represented by Certificate(s)." If the space provided above is inadequate, list the certificate numbers and principal amounts on a separate signed schedule and affix such schedule to this Letter of Transmittal. The minimum permitted tender is $1,000 in principal amount. All other tenders must be in integral multiples of $1,000.
CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY ("DTC") AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER) (SEE INSTRUCTION 4): Name of Tendering Institution_______________________________________________________ Account No. _____________________________________________________________________ Transaction Code Number__________________________________________________________ CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 5): Name(s) of Registered Holder(s)_____________________________________________________ Window Ticket Number (if any)_____________________________________________________ Date of Execution of Notice of Guaranteed Delivery_____________________________________ Name of Institution which Guaranteed Delivery_________________________________________ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO AND COMPLETE THE FOLLOWING: Name:__________________________________________________________________________ Address:________________________________________________________________________ _______________________________________________________________________________
k:\s4exhibits\127578.doc -2-
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 7, 8 AND 9) (See Instructions 7,8 and 9) To be completed ONLY if certificates for Old Notes To be completed ONLY if certificates for Old Notes in a principal amount not tendered, or New Notes in a principle amount not tendered, or New Notes issued in exchange for Old Notes accepted for issued in exchange for Old Notes accepted for exchange, are to be issued in the name of someone exchange, are to be sent to someone other than the other than the undersigned. the undersigned, or to the undersigned at an address other than that shown above. Issue certificates(s) to: Deliver certificate(s) to: Name:______________________________________ Name:______________________________________ (Please Print) (Please Print) Address:___________________________________ Address:___________________________________ ___________________________________________ ___________________________________________ (Include Zip Code) (Include Zip Code) ___________________________________________ ___________________________________________ (Tax Identification or Social Security No.) (Tax Identification or Social Security No.)
k:\s4exhibits\127578.doc -3- Ladies and Gentlemen: Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of Old Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Old Notes tendered in accordance with this Letter of Transmittal, the undersigned sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to the Old Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Company) with respect to the tendered Old Notes with full power of substitution (i) to deliver certificates for such Old Notes to the Company and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Company and (ii) to present such Old Notes for transfer on the books of the Company, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest. The undersigned hereby represents and warrants that he or she has full power and authority to tender, sell, assign and transfer the Old Notes tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are acquired by the Company. The undersigned and any beneficial owner of Old Notes tendered hereby further represent and warrant that (i) the New Notes acquired by the undersigned and any such beneficial owner of Old Notes pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such New Notes, (ii) neither the undersigned nor any such beneficial owner has an arrangement with any person to participate in the distribution of such New Notes, (iii) neither the undersigned nor any such beneficial owner nor any such other person is engaging in or intends to engage in a distribution of such New Notes and (iv) neither the undersigned nor any such other person is an "affiliate," as defined under Rule 405 promulgated under the Securities Act, of the Company. The undersigned and each beneficial owner acknowledge and agree that any person who is an affiliate of the Company or who tenders in the Exchange Offer for the purpose of participating in a distribution of the New Notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a resale transaction of the New Notes acquired by such person and may not rely on the position of the staff of the Securities and Exchange Commission set forth in the no-action letters discussed in the Prospectus under the caption "The Exchange Offer - Purpose and Effect of the Exchange Offer." The undersigned and each beneficial owner will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Old Notes tendered hereby. For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Old Notes when, as and if the Company has given oral notice (confirmed in writing) or written notice thereof to the Exchange Agent. If any tendered Old Notes are not accepted for exchange pursuant to the Exchange Offer because of an invalid tender, the occurrence of certain other events set forth in the Prospectus or otherwise, any such unaccepted Old Notes will be returned, without expense, to the undersigned at the address shown below or at a different address as may be indicated herein under "Special Delivery Instructions" as promptly as practicable after the Expiration Date. All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, successors and assigns. The undersigned understands that tenders of Old Notes pursuant to the procedures described under the caption " The Exchange Offer - Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer, subject only to withdrawal of such tenders on the terms set forth in the Prospectus under the caption "The Exchange Offer - Withdrawal of Tenders." Unless otherwise indicated under "Special Registration Instructions," please issue the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please send the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Registration Instructions" and "Special Delivery Instructions" are completed, please issue the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange in the name(s) of, and return any certificates for Old Notes not tendered or not exchanged to, the person(s) so indicated. The undersigned understands that the Company has no obligation pursuant to the "Special Registration Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered Holder(s) thereof if the Company does not accept for exchange any of the Old Notes so tendered. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, this Letter of Transmittal or an Agent's Message and any other documents required by this Letter of Transmittal to the Exchange Agent prior to the Expiration Date may tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer - Guaranteed Delivery Procedures" See Instruction 5.
-4- PLEASE SIGN HERE WHETHER OR NOT OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY X________________________________________________________ Date:___________ X________________________________________________________ Date:___________ Signature(s) of Registered Holder(s) or Authorized Signatory Area Code and Telephone Number:_______________________________________________ The above lines must be signed by the registered holder(s) as his or her name(s) appear(s) on the Old Notes or by person(s) authorized to become registered holder(s) by a properly completed bond power from the registered holder(s), a copy of which must be transmitted with this Letter of Transmittal. If the Old Notes to which this Letter of Transmittal relate are held of record by two or more joint holders, then all such holders must sign this Letter of Transmittal. If this Letter of Transmittal or any Old Notes or bond powers are signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must (i) so indicate and set forth his or her full title below and (ii) unless waived by the Company, submit evidence satisfactory to the Company of such person's authority to so act. See Instruction 7. Name(s):_____________________________________________________________________________________ _____________________________________________________________________________________________ (Please Print) Capacity:____________________________________________________________________________________ Address:_____________________________________________________________________________________ _____________________________________________________________________________________________ (Include Zip Code) Signature(s) Guaranteed by an Eligible Institution: (If required by Instruction 7) _____________________________________________________________________________________________ (Authorized Signature) _____________________________________________________________________________________________ (Title) _____________________________________________________________________________________________ (Name of Firm) Date:_______________, 1999
k:\s4exhibits\127578.doc -5- INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. PROCEDURES FOR TENDERING. This Letter of Transmittal or a facsimile hereof, properly completed and duly executed, or an Agent's Message, and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. In addition, either (i) certificates for tendered Old Notes must be received by the Exchange Agent along with the Letter of Transmittal or (ii) a timely confirmation of a book-entry transfer (a "Book Entry Confirmation") of such Old Notes, if such procedure is available, into the Exchange Agent's account at DTC pursuant to the procedure for book-entry transfer described below, must be received by the Exchange Agent prior to the Expiration Date or (iii) the Holder must comply with the guaranteed delivery procedures described below. THE METHOD OF DELIVERY OF OLD NOTES AND THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IF SENT BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED AND PROPER INSURANCE BE OBTAINED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any defects, irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Old Notes, neither the Company, the Exchange Agent nor any other person shall be under any duty to give any such notification, nor shall any of them incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that the Company determines are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering Holders, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date. 2. TENDER BY HOLDER. Only a Holder of Old Notes may tender such Old Notes in the Exchange Offer. Any beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such beneficial owner's own behalf, such beneficial owner must, prior to completing and executing this Letter of Transmittal and delivering such beneficial owner's Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such beneficial owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. 3. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in integral multiples of $1,000. If less than the entire principal amount of any Old Notes is tendered, the tendering Holder should fill in the principal amount tendered in the fourth column of the box entitled "Description of 12{1}/{4}% Series B Senior Subordinated Notes due 2004" above. The entire principal amount of any Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, then Old Notes for the principal amount of Old Notes not tendered and a certificate or certificates representing New Notes issued in exchange for any Old Notes accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal, promptly after the Old Notes are accepted for exchange. 4. BOOK-ENTRY TRANSFER. Any financial institution that is a participant in DTC's system may make book-entry delivery of Old Notes by causing DTC to transfer such Old Notes into the Exchange Agent's account at DTC in accordance with DTC's procedures for transfer. However, although delivery of Old Notes may be effected through book-entry transfer at DTC, this Letter of Transmittal or a facsimile hereof, or an Agent's Message, with any required signature guarantees and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with. 5. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, this Letter of Transmittal or an Agent's Message or any other documents required hereby to the Exchange Agent prior to the Expiration Date must tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus. Pursuant to such procedure: (a) such tender must be made through an Eligible Institution (as defined below); (b) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder, the certificate number(s) of such Old Notes and the principal amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, this Letter of Transmittal (or facsimile hereof) or an Agent's Message together with the certificate(s) representing the Old Notes, or a Book-Entry Confirmation, and any other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (c) such properly completed and executed Letter of Transmittal (or facsimile hereof) or an Agent's Message, as well as the certificate(s) representing all tendered Old Notes in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and all other documents required by this Letter of Transmittal must be received by the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date, all as provided in the Prospectus under the caption "The Exchange Offer - Guaranteed Delivery Procedures." Any Holder who wishes to tender his or her Old Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above. 6. WITHDRAWAL OF TENDERS. To withdraw a tender of Old Notes in the Exchange Offer, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn (including the certificate number or numbers and principal amount of such Old Notes), (iii) be signed by the Holder in the same manner as the original signature on the Letter of Transmittal by which such Old Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Old Notes register the transfer of such Old Notes into the name of the persons withdrawing the tender and (iv) specify the name in which any such Old Notes are to be registered, if different from that of the Depositor. If certificates for Old Notes have been delivered or otherwise identified to the Exchange Agent, then, prior to the release of such certificates, the withdrawing Holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institution unless such Holder is an Eligible Institution. If Old Notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company in its sole discretion, which determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no New Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Properly withdrawn Old Notes may be retendered by following one of the procedures described above in Instruction 1, under Procedures for Tendering, at any time prior to the Expiration Date. 7. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof) is signed by the registered holder(s) of the Old Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the Old Notes without alteration, enlargement or any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is signed by the registered holder or holders of Old Notes tendered and the certificate or certificates for New Notes issued in exchange therefor is to be issued (or any untendered principal amount of Old Notes is to be reissued) to the registered holder or holders and neither the "Special Delivery Instructions" nor the "Special Registration Instructions" has been completed, then such holder or holders need not and should not endorse any tendered Old Notes, nor provide a separate bond power. In any other case, such holder or holders must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal with the signatures on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal (or facsimile hereof) or any Old Notes or bond powers are signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must so indicate when signing, and, unless waived by the Company, submit evidence satisfactory to the Company of such person's authority to so act with this Letter of Transmittal. Endorsements on Old Notes or signatures on bond powers required by this Instruction 7 must be guaranteed by an Eligible Institution which is a member of (a) the Securities Transfer Agents Medallion Program, (b) the New York Stock Exchange Medallion Signature Program or (c) the Stock Exchange Medallion Program. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed if (a) this Letter of Transmittal is signed by the registered holder(s) of the Old Notes tendered herewith and such holder(s) has not completed the box set forth herein entitled "Special Registration Instructions" or the box set forth herein entitled "Special Delivery Instructions" or (b) such Old Notes are tendered for the account of an Eligible Institution. 8. SPECIAL REGISTRATION AND DELIVERY INFORMATION. Tendering holders should indicate, in the applicable box or boxes, the name and address to which New Notes or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person singing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. 9. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable to the exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates representing New Notes or Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered in the name of, any person other than the registered holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or on any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. 10. Except as provided in this Instruction 9, it will not be necessary for transfer tax stamps to be affixed to the Old Notes listed in this Letter of Transmittal. 11. WAIVER OF CONDITIONS. The Company reserves the right, in its sole discretion, to amend, waive or modify specified conditions in the Exchange Offer in the case of any Old Notes tendered. 12. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering Holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instructions. 13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance and requests for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address specified herein. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. k:\s4exhibits\127578.doc -6- IMPORTANT TAX INFORMATION The Holder is required to give the Exchange Agent the social security number or employer identification number of the Holder of the Notes. If the Notes are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. PAYER'S NAME: BERRY PLASTICS CORPORATION
Name of Holder (if joint, list first and circle the name of the person or entity whose number you enter in Part I below). Address (if Holder does not complete, signature below will constitute a certification that the above address is correct.) SUBSTITUTE Part I-Please provide your TIN in the box at right and certify by Social Security Number FORM W-9 signing and dating below. If you do or not have a number, see How to Obtain Employer Identification Number a "TIN" in the enclosed Guidelines. ______________________________ DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE Part II- For Payees exempt from backup withholding, see the enclosed Guidelines Payer's Request for Taxpayer for Certification of Taxpayer Identification Number on Substitute Form W-9. Identification Number (TIN) CERTIFICATION. Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS. You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreported interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.) Signature______________________________________________________ Date___________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU UNDER THE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. (DO NOT WRITE IN SPACE BELOW)
CERTIFICATE SURRENDERED OLD NOTES TENDERED OLD NOTES ACCEPTED Delivery Prepared By_______________ Checked By_______________ Date__________
k:\s4exhibits\127578.doc - -7- EX-99.2 33 FORM OF NOTICE OF GUARANTEED DELIVERY BERRY PLASTICS CORPORATION NOTICE OF GUARANTEED DELIVERY OF 12{1}/{4}% SERIES B SENIOR SUBORDINATED NOTES DUE 2004 As set forth in the Prospectus dated January __, 1999 (the "Prospectus"), of Berry Plastics Corporation (the "Company") under the caption "The Exchange Offer - Guaranteed Delivery Procedures," this form must be used to accept the Company's offer to exchange its 12{1}/{4}% Series C Senior Subordinated Notes due 2004 (the "New Notes") for an equal principal amount of its 12{1}/{4}% Series B Senior Subordinated Notes due 2004 (the "Old Notes"), by Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, the Letter of Transmittal or an Agent's Message (as defined in the Prospectus) and any other documents required by the Letter of Transmittal to the Exchange Agent prior to the Expiration Date. This form must be delivered by an Eligible Institution by mail or hand delivery or transmitted, via facsimile, to the Exchange Agent at its address set forth below not later than the Expiration Date. All capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Prospectus. THE EXCHANGE AGENT IS: UNITED STATES TRUST COMPANY OF NEW YORK
BY REGISTERED OR CERTIFIED MAIL: BY FACSIMILE: BY HAND BEFORE 4:30 P.M.: United States Trust Company of New York (212)780-0592 United States Trust Company of New York P.O. Box 843 Attention: Customer 111 Broadway Cooper Station Service New York, New York 10006 New York, New York 10276 Attention: Lower Level Corporate Trust Window Attention: Corporate Trust Services CONFIRM BY TELEPHONE TO: BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M. (800) 548-6565 P.M. ON THE EXPIRATION DATE: United States Trust Company of New York 770 Broadway, 13th Floor New York, New York 10003
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. Ladies and Gentlemen: The undersigned hereby tenders for exchange to the Company, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer - Guaranteed Delivery Procedures." The undersigned understands and acknowledges that the Exchange Offer will expire at 5:00 p.m., New York City time, on February __, 1999, unless extended by the Company. The term "Expiration Date" shall mean 5:00 p.m., New York City time, on February __, 1999, unless the Exchange Offer is extended as provided in the Prospectus, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. All authority conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the undersigned's heirs, personal representatives, successors and assigns.
SIGNATURE Principal Amount of Old Notes X Date: Tendered (must be in integral multiples of $1,000): $ X Date: Signature(s) of Registered Holder(s) or Authorized Signatory Certificate Number(s) of Old Notes (if available): Area Code and Telephone Number: Name(s): (Please Print) Aggregate Principal Amount Represented by Certificate(s): $ Capacity (full title), if signing in a fiduciary or representative capacity): IF TENDERED OLD NOTES WILL BE DELIVERED BY BOOK-ENTRY TRANSFER, PROVIDE THE DEPOSITORY TRUST Address: COMPANY ("DTC") ACCOUNT NO. AND TRANSACTION CODE NUMBER (Including Zip Code) (IF AVAILABLE): Taxpayer Identification or Social Security No.: Account No. Transaction Number
GUARANTEE OF DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended, guarantees deposit with the Exchange Agent of a properly completed and executed Letter of Transmittal (or facsimile thereof), or an Agent's Message, as well as the certificate(s) representing all tendered Old Notes in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility described in the Prospectus under the caption "The Exchange Offer - Book-Entry Transfer" and any other documents required by the Letter of Transmittal, all by 5:00 p.m., New York City time, on the third New York Stock Exchange trading day following the Expiration Date. 1
Name of Eligible Institution: Authorized Signature Address: Name: Title: Area Code and Telephone No: Date:
NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE. ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, THE LETTER OF TRANSMITTAL. 2 EX-99.3 34 FORM OF LETTER TO BROKERS, DEALERS, BERRY PLASTICS CORPORATION Offer to Exchange up to $25,000,000 of its 12{1}/{4}% Series C Senior Subordinated Notes due 2004 for any and all of its outstanding 12{1}/{4}% Series B Senior Subordinated Notes due 2004
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON FEBRUARY __, 1999, UNLESS EXTENDED.
To Brokers, Dealers, Commercial Banks, January __, 1999 Trust Companies and Other Nominees: Berry Plastics Corporation, a Delaware corporation (the "Company"), is offering, upon the terms and subject to the conditions set forth in the Prospectus dated January __, 1999 (the "Prospectus") and the accompanying Letter of Transmittal enclosed herewith (which together constitute the "Exchange Offer"), to exchange its 12{1}/{4}% Series C Senior Subordinated Notes due 2004 (the "New Notes") for an equal principal amount of its 12{1}/{4}% Series B Senior Subordinated Notes due 2004 (the "Old Notes" and together with the New Notes, the "Notes"). As set forth in the Prospectus, the terms of the New Notes are identical in all material respects to the Old Notes, except that the New Notes have been registered under the Securities Act of 1933, as amended, and therefore will not bear legends restricting their transfer and will not contain certain provisions providing for an increase in the interest rate on the Old Notes under certain circumstances relating to the Registration Rights Agreement (as defined in the Prospectus). Old Notes may be tendered only in integral multiples of $1,000. THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CUSTOMARY CONDITIONS. SEE "THE EXCHANGE OFFER - CONDITIONS" IN THE PROSPECTUS. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. the Prospectus, dated January __, 1999; 2. the Letter of Transmittal for your use and for the information of your clients (facsimile copies of the Letter of Transmittal may be used to tender Old Notes); 3. a form of letter which may be sent to your clients for whose accounts you hold Old Notes registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer; 4. a Notice of Guaranteed Delivery; 5. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9; and 6. a return envelope addressed to United States Trust Company of New York, the Exchange Agent. YOUR PROMPT ACTION IS REQUESTED. PLEASE NOTE THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY __, 1999, UNLESS EXTENDED. PLEASE FURNISH COPIES OF THE ENCLOSED MATERIALS TO THOSE OF YOUR CLIENTS FOR WHOM YOU HOLD OLD NOTES REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE AS QUICKLY AS POSSIBLE. In all cases, exchanges of Old Notes accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of (a) certificates representing such Old Notes, or a Book-Entry Confirmation (as defined in the Prospectus), as the case may be, (b) the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, or an Agent's Message (as defined in the Prospectus) and (c) any other required documents. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, the Letter of Transmittal or an Agent's Message and any other documents required by the Letter of Transmittal to the Exchange Agent prior to the Expiration Date must tender their Old Notes according to the guaranteed delivery procedures set forth under the caption "The Exchange Offer - Guaranteed Delivery Procedures" in the Prospectus. The Exchange Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Old Notes residing in any jurisdiction in which the making of the Exchange Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. The Company will not pay any fees or commissions to brokers, dealers or other persons for soliciting exchanges of Notes pursuant to the Exchange Offer. The Company will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. The Company will pay or cause to be paid any transfer taxes payable on the transfer of Notes to it, except as otherwise provided in Instruction 9 of the Letter of Transmittal. Questions and requests for assistance with respect to the Exchange Offer or for copies of the Prospectus and Letter of Transmittal may be directed to the Exchange Agent at its address set forth in the Prospectus or at (212) 852-1000. Very truly yours, BERRY PLASTICS CORPORATION NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY, OR ANY AFFILIATE THEREOF, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 1 EX-99.4 35 FORM OF LETTER TO CLIENTS BERRY PLASTICS CORPORATION Offer to Exchange up to $25,000,000 of its 12{1}/{4}% Series C Senior Subordinated Notes due 2004 for any and all of its outstanding 12{1}/{4}% Series B Senior Subordinated Notes due 2004
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY __, 1999, UNLESS EXTENDED.
To Our Clients: Enclosed for your consideration is a Prospectus dated January __, 1999 (he "Prospectus") and a Letter of Transmittal (which together constitute the "Exchange Offer") relating to the offer by Berry Plastics Corporation (the "Company") to exchange its 12{1}/{4}% Series C Senior Subordinated Notes due 2004 (the "New Notes") for an equal principal amount of its 12{1}/{4}% Series B Senior Subordinated Notes due 2004 (the "Old Notes" and together with the New Notes, the "Notes"). As set forth in the Prospectus, the terms of the New Notes are identical in all material respects to the Old Notes, except that the New Notes have been registered under the Securities Act of 1933, as amended, and therefore will not bear legends restricting their transfer and will not contain certain provisions providing for an increase in the interest rate on the Old Notes under certain circumstances relating to the Registration Rights Agreement (as defined in the Prospectus). Old Notes may be tendered only in integral multiples of $1,000. The enclosed material is being forwarded to you as the beneficial owner of Old Notes carried by us for your account or benefit but not registered in your name. An exchange of any Old Notes may only be made by us as the registered Holder and pursuant to your instructions. Therefore, the Company urges beneficial owners of Old Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such Holder promptly if they wish to exchange Old Notes in the Exchange Offer. Accordingly, we request instructions as to whether you wish us to exchange any or all such Old Notes held by us for your account or benefit, pursuant to the terms and conditions set forth in the Prospectus and Letter of Transmittal. We urge you to read carefully the Prospectus and Letter of Transmittal before instructing us to exchange your Old Notes. Your instructions to us should be forwarded as promptly as possible in order to permit us to exchange Old Notes on your behalf in accordance with the provisions of the Exchange Offer. THE EXCHANGE OFFER EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON FEBRUARY __, 1999, UNLESS EXTENDED. The term "Expiration Date" shall mean 5:00 p.m., New York City time, on February __, 1999, unless the Exchange Offer is extended as provided in the Prospectus, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. A tender of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. Your attention is directed to the following: 1. The Exchange Offer is for the exchange of $1,000 principal amount of the New Notes for each $1,000 principal amount of the Old Notes, of which $25,000,000 aggregate principal amount was outstanding as of January __, 1999. The terms of the New Notes are identical in all material respects to the Old Notes, except that the New Notes have been registered under the Securities Act of 1933, as amended, and therefore will not bear legends restricting their transfer and will not contain certain provisions providing for an increase in the interest rate on the Old Notes under certain circumstances relating to the Registration Rights Agreement. 2. THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CUSTOMARY CONDITIONS. SEE "THE EXCHANGE OFFER - CONDITIONS" IN THE PROSPECTUS. 3. The Exchange Offer and withdrawal rights will expire at 5:00 p.m., New York City time, on February __, 1999, unless extended. 4. The Company has agreed to pay the expenses of the Exchange Offer. 5. Any transfer taxes incident to the transfer of Old Notes from the tendering Holder to the Company will be paid by the Company, except as provided in the Prospectus and the Letter of Transmittal. The Exchange Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Old Notes residing in any jurisdiction in which the making of the Exchange Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. If you wish us to tender any or all of your Old Notes held by us for your account or benefit, please so instruct us by completing, executing and returning to us the attached instruction form. THE ACCOMPANYING LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATIONAL PURPOSES ONLY AND MAY NOT BE USED BY YOU TO EXCHANGE OLD NOTES HELD BY US AND REGISTERED IN OUR NAME FOR YOUR ACCOUNT OR BENEFIT. 1 INSTRUCTIONS The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer of Berry Plastics Corporation. This will instruct you to tender for exchange the aggregate principal amount of Old Notes indicated below (or, if no aggregate principal amount is indicated below, all Old Notes) held by you for the account or benefit of the undersigned, pursuant to the terms of and conditions set forth in the Prospectus and the Letter of Transmittal. Aggregate Principal Amount of Old Notes to be tendered for exchange $________________________________
*I (WE) UNDERSTAND THAT IF I (WE) SIGN THIS INSTRUCTION FORM WITHOUT INDICATING AN AGGREGATE PRINCIPAL AMOUNT OF OLD NOTES IN THE SPACE ABOVE, ALL OLD NOTES HELD BY SIGNATURE(S) YOU FOR MY (OUR) ACCOUNT WILL BE TENDERED FOR EXCHANGE. Capacity (full title), if signing in a fiduciary or representative capacity Name(s) and address, including zip code DATE: Area Code and Telephone Number Taxpayer Identification or Social Security No.
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