Filed Pursuant to Rule 424(b)(5)
Registration File No. 333-102387
Prospectus Supplement
(To Prospectus Dated January 31, 2003)
$30,000,000
[JARDEN CORPORATION LOGO]
9 3/4% SENIOR SUBORDINATED NOTES DUE 2012
--------------------------------
THE COMPANY:
o Jarden Corporation is a leading provider of niche, branded consumer
products used in and around the home, under well-known brand names
including Ball(R), Bernardin(R), Diamond(R), FoodSaver(R), Forster(R) and
Kerr(R). In North America, we are the market leader in several categories,
including home canning, home vacuum packaging, kitchen matches, branded
retail plastic cutlery and toothpicks. We also manufacture zinc strip and a
wide array of plastic products for third party consumer product and medical
companies, as well as our own business.
THE OFFERING:
o Use of Proceeds: We intend to use the net proceeds from the sale of the
notes to reduce amounts outstanding under our senior credit facility.
o Registration Rights: We have agreed to offer to exchange the notes for
registered notes issued under the same indenture as our outstanding 9 3/4%
Senior Subordinated Notes due 2012.
THE SENIOR SUBORDINATED NOTES:
o Maturity: The notes will mature on May 1, 2012.
o Interest Payments: We will pay interest on the notes on May 1 and November
1 of each year, starting November 1, 2003.
o Guarantees: Certain of our subsidiaries will be guarantors of the notes on
a senior subordinated basis.
o Ranking: The notes will be our general unsecured senior subordinated
obligations and will be subordinated to all of our existing and future
senior debt. The guarantees will be general unsecured senior subordinated
obligations of the guarantors and will be subordinated to all existing and
future senior debt of the guarantors.
o Options Redemption: We may redeem the notes at any time on or after May 1,
2007. In addition, we may redeem up to 35% of the aggregate principal
amount of the notes before May 1, 2005 with the net proceeds from certain
public equity offerings.
The terms of the notes are substantially identical to those of the $150
million in aggregate principal amount of our 9 3/4% Senior Subordinated Notes
due 2012 issued pursuant to the indenture dated April 24, 2002. We refer to
those notes in this prospectus supplement as the "2002 notes."
INVESTING IN THE NOTES INVOLVES SUBSTANTIAL RISKS. SEE "RISK FACTORS,"
BEGINNING ON PAGE 8 OF THE ACCOMPANYING PROSPECTUS DATED JANUARY 31, 2003 AND
PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT.
Per Note Total
-------- -----
Price to public (1) ........................................... $1,065.00 $31,950,000
Underwriting discount.......................................... $ 22.63 $ 678,938
Proceeds to Jarden............................................. $1,042.37 $31,271,063
(1) Plus accrued interest from May 1, 2003.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We expect that delivery of the notes will be made in New York, New York
on or about May 8, 2003.
JOINT BOOK-RUNNING MANAGERS
CIBC WORLD MARKETS BANC OF AMERICA SECURITIES LLC
The date of this prospectus supplement is May 1, 2003.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Incorporation By Reference.......................................... S-1
Forward Looking Statements.......................................... S-1
The Offering........................................................ S-1
Risk Factors........................................................ S-3
Description of the Notes............................................ S-4
United States Federal Income Tax Consideration...................... S-41
Use of Proceeds..................................................... S-44
Underwriting........................................................ S-44
Legal Matters....................................................... S-45
PROSPECTUS
Summary............................................................. 1
Incorporation of Certain Documents by Reference..................... 2
The Company......................................................... 3
Risk Factors........................................................ 8
Forward Looking Statements.......................................... 19
Use of Proceeds..................................................... 19
Ratio of Earnings to Fixed Charges.................................. 19
Description of the Debt Securities.................................. 20
Description of Capital Stock........................................ 25
Description of Warrants............................................. 25
Description of Senior Indebtedness.................................. 26
Plan of Distribution................................................ 30
Where You Can Find More Information................................. 31
Experts............................................................. 31
Legal Matters....................................................... 32
You should rely only upon the information contained or incorporated by
reference in this prospectus. We have not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. Neither this prospectus supplement nor the accompanying prospectus
constitutes an offer to sell, or a solicitation of an offer to buy, any of the
securities offered hereby by any person in any jurisdiction in which it is
unlawful for such person to make such an offer or solicitation. You should
assume the information appearing in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference is accurate only as of
their respective dates. Our business, financial condition, results of operations
and prospects may have changed since those dates.
INCORPORATION BY REFERENCE
We have elected to "incorporate by reference" certain information in
this prospectus supplement. By incorporating by reference, we can disclose
important information to you by referring you to another document we have filed
with the SEC. The information incorporated by reference is deemed to be part of
this prospectus supplement, except for information incorporated by reference
that is superceded by information contained in this prospectus supplement. This
prospectus supplement incorporates by reference the documents set forth below
that we have previously filed with the SEC:
(1) Our annual report on Form 10-K for the fiscal year ended December
31, 2002;
(2) Our current report on Form 8-K filed on January 10, 2003;
(3) Our current report on Form 8-K filed on February 14, 2003;
(4) Our current report on Form 8-K/A filed on March 7, 2003;
(5) Our definitive proxy statement on Schedule 14A filed on March 28,
2003; and
(6) Our current report on Form 8-K filed on April 28, 2003.
FORWARD LOOKING STATEMENTS
Certain statements we make in this prospectus, and other written or
oral statements by us or our authorized officers on our behalf, may constitute
"forward looking statements" within the meaning of the Federal securities laws.
Forward-looking statements include statements concerning our plans, objectives,
goals, strategies, future events, future revenues or performance, capital
expenditures, financing needs, plans or intentions relating to acquisitions, our
competitive strengths and weaknesses, our business strategy and the trends we
anticipate in the industry and economies in which we operate and other
information that is not historical information. Words or phrases such as
"estimates," "expects," "anticipates," "projects," "plans," "intends,"
"believes" and variations of such words or similar expressions are intended to
identify forward-looking statements. All forward-looking statements, including,
without limitation, our examination of historical operating trends, are based
upon our current expectations and various assumptions. Our expectations, beliefs
and projections are expressed in good faith, and we believe there is a
reasonable basis for them, but we cannot assure you that our expectations,
beliefs and projections will be realized.
THE OFFERING
References in this prospectus to "Jarden," "we," "us" and "our" refer
to Jarden Corporation, which was formerly known as Alltrista Corporation. We
urge you to read and review carefully this entire prospectus, including "Risk
Factors," and the consolidated financial statements and related notes and other
information incorporated by reference in this prospectus to fully understand the
terms of the notes.
The summary below describes the principal terms of the notes. Certain
of the terms and conditions described below are subject to important limitations
and exceptions. The "Description of the Notes" section of this prospectus
supplement contains a more detailed description of the terms and conditions of
the notes.
Issuer.................................................. Jarden Corporation.
Securities Offered...................................... $30 million in principal amount of 9 3/4% Senior
Subordinated Notes due 2012.
Maturity................................................ May 1, 2012.
Interest Rate........................................... 9 3/4% per annum (calculated using a 360-day year comprised
of twelve 30-day months).
Interest Payment Dates.................................. May 1 and November 1, beginning on November 1, 2003.
Interest will accrue from May 1, 2003.
S-1
Guarantees.............................................. The notes will be unconditionally guaranteed in full on a
senior subordinated basis by all of our existing and
future domestic restricted subsidiaries, excluding
certain inactive and immaterial and recently acquired
subsidiaries existing on the date of this prospectus supplement.
Under certain circumstances, Jarden will be permitted to
designate certain restricted subsidiaries as unrestricted
subsidiaries which will not guarantee the notes. If we cannot
make payments on the notes when they are due, the guarantors
must make them instead.
Ranking................................................. The notes and the guarantees will be unsecured senior
subordinated obligations. Accordingly, they will rank:
o behind all of our and the guarantors' existing and future
senior debt, including indebtedness under our senior credit
facility;
o equally with all our and the guarantors' existing and future
unsecured senior subordinated obligations, including the
2002 notes; and
o ahead of any of our and the guarantors' future subordinated
debt.
Optional Redemption..................................... On or after May 1, 2007, we may redeem some or all of the
notes at any time at the redemption prices listed under
"Description of the Notes-Optional Redemption." Prior to
May 1, 2005, we may redeem up to 35% of the notes with
the proceeds from certain public equity offerings at the
redemption price listed under "Description of the
Notes-Optional Redemption."
Mandatory Offer to Purchase............................. If we sell certain assets or experience certain types of
changes of control, we must offer to repurchase the notes
at the prices listed in the section "Description of the
Notes-Repurchase at the Option of Holders."
Certain Covenants....................................... The indenture governing the notes will, among other
things, limit our and the ability of our subsidiaries to:
o incur additional indebtedness;
o pay dividends or distributions on, or redeem or repurchase,
capital stock;
o make investments;
o engage in certain transactions with affiliates;
o incur liens;
o transfer or sell assets; and
o consolidate, merge or transfer all or substantially all of
our assets.
For more details, see "Description of the Notes."
S-2
Registration Rights Agreement........................... We and the guarantors will enter a registration rights
agreement with respect to the notes pursuant to which we
and the guarantors will agree to:
o file a registration statement enabling holders of the notes
to exchange the notes for registered notes issued under the
same indenture as our 2002 notes;
o use commercially reasonable efforts to cause the registration
statement to become effective; and
o use commercially reasonable efforts to consummate the
exchange offer within 365 days after the closing of this
offering;
provided that if we or any guarantor files any other
registration statement (subject to certain customary
exceptions) or otherwise offers securities pursuant to any
registration statement then we and the guarantors shall be
required to file a registration statement for the exchange
offer contemporaneously therewith, except if such offering is
an equity offering and the underwriter for such equity offering
reasonably believes the filing of the exchange offer
registration statement is reasonably likely to have an adverse
effect on the equity offering.
If we do not comply with certain of our obligations under the
registration rights agreement, we have agreed to pay liquidated
damages. See "Description of the Notes--Registration Rights;
Liquidated Damages."
Risk Factors............................................ Investing in the notes involves substantial risks. See
"Risk Factors" below as well as in the accompanying prospectus
for a description of certain of the risks you should consider
before investing in the notes.
Use of Proceeds......................................... We intend to use the net proceeds from the sale of the
notes to reduce amounts outstanding under our senior
credit facility.
RISK FACTORS
BEFORE YOU INVEST IN THE NOTES, YOU SHOULD BE AWARE THAT THE OCCURRENCE
OF THE EVENTS DESCRIBED IN THE SECTION UNDER THE CAPTION "RISK FACTORS"
CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, OR IN
MATERIALS INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT COULD HAVE A
MATERIAL ADVERSE AFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Until consummation of the exchange offer, the notes offered hereby will be a
separate series of securities than, and will not be fungible with, our
outstanding 9 3/4% Senior Subordinated Notes due 2012.
The notes offered hereby will be issued under a separate indenture than
our outstanding 9 3/4% Senior Subordinated Notes due 2012, which we refer to as
the 2002 notes. As a result, the notes offered hereby will be a separate series
of securities than, and will not be fungible with, the 2002 notes. Consequently,
the liquidity of, and trading prices of, the notes offered hereby may be
adversely affected. We have agreed to file a registration statement in respect
of an offer to exchange the notes hereby for notes issued under the same
indenture as the 2002 notes. However, there can be no assurance that the
exchange offer will be consummated. If we fail to consummate the exchange offer
within the time period provided in the registration rights agreement, we will be
obligated to pay liquidated damages to the holders of the notes.
S-3
DESCRIPTION OF THE NOTES
The terms of the notes are described below. Our debt securities are
described generally in the accompanying prospectus. The following description of
the particular terms of the notes supplements, and to the extent inconsistent
replaces, the description of the general terms and provisions of our debt
securities set forth in the accompanying prospectus.
The terms of the notes are substantially identical to those of the 2002
notes.
The notes will be issued under an indenture (the "existing indenture")
dated as of January 31, 2003 between Jarden Corporation and The Bank of New
York, as trustee, as supplemented by a first supplemental indenture (the
"supplemental indenture" and, together with the existing indenture, the
"indenture") to be entered into by Jarden Corporation, the guarantors and the
trustee. We have filed a copy of the existing indenture as an exhibit to the
registration statement of which this prospectus supplement and the accompanying
prospectus form a part. Pursuant to a registration rights agreement, we have
agreed to file a registration statement in respect of an offer to exchange the
notes hereby for notes issued under the same indenture as our 2002 notes. A copy
of the supplemental indenture and the registration rights agreement will be
filed as an exhibit to a Form 8-K incorporated by reference into the
registration statement of which this prospectus supplement and the accompanying
prospectus form a part. 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 following description is a summary of the material provisions of
the indenture and the registration rights agreement. It does not restate those
agreements in their entirety. We urge you to read the indenture and the
registration rights agreement because they, and not this description, define
your rights as holders of the notes. Copies of the indenture and the
registration rights agreement are available as set forth above. You can find the
definitions of certain terms used in this description under the subheading
"-Certain Definitions." Certain defined terms used in this description but not
defined below under "-Certain Definitions" have the meanings assigned to them
in the indenture. In this description, the word "Jarden" refers only to Jarden
Corporation and not to any of its subsidiaries.
The registered holder of a note will be treated as the owner of it for
all purposes. Only registered holders will have rights under the indenture.
The notes will be issued as a separate series of debt securities under
the indenture and, accordingly, will vote as a separate series from other series
of debt securities on matters under the indenture.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
The notes
o will be general unsecured obligations of Jarden;
o will be subordinated in right of payment to all existing and
future senior debt of Jarden, including indebtedness under
its senior credit facility;
o will be pari passu in right of payment with all existing and
future senior subordinated indebtedness of Jarden, including
the 2002 notes; and
o will be unconditionally guaranteed in full by all of Jarden's
domestic Restricted Subsidiaries, excluding the Inactive
Subsidiaries (defined below) and New Subsidiaries (defined
below), on a joint and several basis.
The Guarantees
Except as indicated below, the notes will be unconditionally
guaranteed in full by all of Jarden's domestic Restricted Subsidiaries on a
joint and several basis. See "Risk Factors -Federal and state statutes allow
courts, under specific circumstances, to void guarantees and require noteholders
to return payments received from guarantors" in the accompanying prospectus and
"Description of the Notes -Subsidiary Guarantees."
S-4
Each guarantee of the notes:
o will be a general unsecured obligation of the Guarantor;
o will be subordinated in right of payment to all existing and
future senior debt of the Guarantor;
and
o will be pari passu in right of payment with any existing and
future senior subordinated indebtedness of the Guarantor.
As indicated above and as discussed in detail below under the caption
"-Subordination," payments on the notes and under the guarantees of the notes
will be subordinated to the payment of Senior Debt. The indenture will permit us
and the Guarantors to incur additional Senior Debt.
Three of our Restricted Subsidiaries, TriEnda Corporation ("TriEnda"),
Unimark Plastics, Inc. ("Unimark") and X Properties, LLC ("XPLLC"), will not
guarantee the notes. However, TriEnda is a guarantor of the 2002 notes, and we
have agreed with the underwriters to cause XPLLC to become a guarantor of the
2002 notes no later than the closing of this offering. TriEnda and Unimark are
inactive and have no assets or liabilities. XPLLC has no operations and its only
purpose is to hold title to certain real property which we are seeking to
dispose. We are in the process of merging Unimark into one of the Guarantors.
TriEnda, Unimark and XPLLC are sometimes referred to in this prospectus
supplement as the "Inactive Subsidiaries."
Two recently acquired subsidiaries, O.W.D., Incorporated and Tupper
Lake Plastics, Incorporated (the "New Subsidiaries") will not initially
guarantee the notes. We have agreed to, no later than May 28, 2003, either (i)
cause the New Subsidiaries to guarantee the notes, (ii) properly designate the
New Subsidiaries as Unrestricted Subsidiaries, or (iii) cause the New
Subsidiaries to transfer all of their assets to Jarden or a Guarantor and then
dissolve the New Subsidiaries or merge them out of existence.
Under the circumstances described below under the subheading
"-Certain Covenants-Designation of Restricted and Unrestricted Subsidiaries,"
we will be permitted to designate certain of our subsidiaries as "Unrestricted
Subsidiaries." Our Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants in the indenture and will not guarantee the notes.
PRINCIPAL, MATURITY AND INTEREST
Jarden will issue in this offering, notes in an aggregate principal
amount of approximately $30 million. Jarden may issue additional notes under the
indenture from time to time after this offering. All notes issued under the
indenture will be treated as a single class for all purposes under the
indenture, including, without limitation, waivers, amendments, redemptions and
offers to purchase. Jarden will issue notes in denominations of $1,000 and
integral multiples of $1,000. The notes will mature on May 1, 2012.
Interest on the notes will accrue at the rate of 9 3/4% per annum and
will be payable semi-annually in arrears on May 1 and November 1, commencing on
November 1, 2003. Jarden will make each interest payment to the Holders of
record on the immediately preceding April 15 and October 15. Interest on the
notes will accrue from May 1, 2003 or, if interest has already been paid, from
the date it was most recently paid. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a Holder of $1.0 million or more of notes has given wire transfer
instructions to Jarden, Jarden will pay all principal, interest and premium and
liquidated damages, if any, on that Holder's notes in accordance with those
instructions. All other payments on notes will be made at the office or agency
of the paying agent and registrar unless Jarden elects to make interest payments
by check mailed to the Holders at their address set forth in the register of
Holders.
S-5
PAYING AGENT AND REGISTRAR FOR THE NOTES
The trustee will initially act as paying agent and registrar. Jarden
may change the paying agent or registrar without prior notice to the Holders of
the notes, and Jarden or any of its Subsidiaries may act as paying agent or
registrar.
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 in connection
with a transfer of notes. Holders will be required to pay all taxes due on
transfer. Jarden is not required to transfer or exchange any note selected for
redemption. Also, Jarden is not required to transfer or exchange any note for a
period of 15 days before a selection of notes to be redeemed.
SUBSIDIARY GUARANTEES
The notes will be unconditionally guaranteed in full by each of
Jarden's current and future domestic Restricted Subsidiaries, other than the
Inactive Subsidiaries and the New Subsidiaries. These subsidiary guarantees will
be joint and several obligations of the Guarantors. Each subsidiary guarantee
will be subordinated to the prior payment in full of all Senior Debt of that
Guarantor. The obligations of each Guarantor under its subsidiary guarantee will
be limited as necessary to prevent that subsidiary guarantee from constituting a
fraudulent conveyance under applicable law. See "Risk Factors-Federal and State
statutes allow courts, under specific circumstances, to void guarantees and
require noteholders to return payments received from guarantors" in the
accompanying prospectus.
A Guarantor may not sell or otherwise dispose of all or substantially
all of its assets to, or consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another Person, other than Jarden or
another Guarantor, unless:
o immediately after giving effect to that transaction, no Default or
Event of Default exists; and
either:
o the Person acquiring the property in any such sale or disposition
or the Person formed by or surviving any such consolidation or
merger assumes all the obligations of that Guarantor under the
indenture, its subsidiary guarantee and the registration rights
agreement pursuant to a supplemental indenture satisfactory to the
trustee; or
o the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the indenture.
The subsidiary guarantee of a Guarantor will be released:
o in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by
way of merger or consolidation) to a Person that is not (either
before or after giving effect to such transaction) a Subsidiary of
Jarden, if the sale or other disposition complies with the "Asset
Sale" provisions of the indenture;
o in connection with any sale of all of the Capital Stock of a
Guarantor to a Person that is not (either before or after giving
effect to such transaction) a Subsidiary of Jarden, if the sale
complies with the "Asset Sale" provisions of the indenture; or
o if Jarden designates any Restricted Subsidiary that is a Guarantor
as an Unrestricted Subsidiary in accordance with the applicable
provisions of the indenture. See "-Repurchase at the Option of
Holders-Asset Sales" and "-Certain Covenants-Designation of
Restricted and Unrestricted Subsidiaries."
S-6
SUBORDINATION
The payment of principal, interest and premium and liquidated damages,
if any, on the notes will be subordinated to the prior payment in full of all
Senior Debt of Jarden, including Senior Debt incurred after the date of the
indenture.
In the event of any distribution to creditors of Jarden:
o in a liquidation or dissolution of Jarden;
o in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to Jarden or its property;
o in an assignment for the benefit of creditors; or
o in any marshaling of Jarden's assets and liabilities;
the holders of Senior Debt will be entitled to receive payment in full of all
Obligations due in respect of Senior Debt (including interest after the
commencement of any bankruptcy proceeding at the rate specified in the
applicable Senior Debt) before the Holders of notes will be entitled to receive
any payment with respect to the notes (except that Holders of notes may receive
and retain Permitted Junior Securities and payments made from the trust
described under "-Legal Defeasance and Covenant Defeasance").
Jarden also may not make any payment in respect of the notes (except in
Permitted Junior Securities or from the trust described under "-Legal
Defeasance and Covenant Defeasance") if:
o a payment default on Designated Senior Debt occurs and is
continuing beyond any applicable grace period; or
o any other default occurs and is continuing on any series of
Designated Senior Debt that permits holders of that series of
Designated Senior Debt to accelerate its maturity and the trustee
and Jarden receive a notice of such default (a "Payment Blockage
Notice") from the holders of any Designated Senior Debt (or their
representative).
Payments on the notes may and will be resumed:
o in the case of a payment default, upon the date on which such
default is cured or waived; and
o in the case of a nonpayment default, upon 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 Designated Senior Debt has
been accelerated.
No new Payment Blockage Notice may be delivered unless and until:
o 360 days have elapsed since the delivery of the immediately prior
Payment Blockage Notice; and
o all scheduled payments of principal, interest and premium and
liquidated damages, if any, on the notes that have come due have
been paid in full in cash.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the trustee will be, or be made, the
basis for a subsequent Payment Blockage Notice.
If the trustee or any Holder of the notes receives a payment in respect
of the notes (except in Permitted Junior Securities or from the trust described
under "-Legal Defeasance and Covenant Defeasance") when:
o the payment is prohibited by these subordination provisions; and
S-7
o the trustee or the Holder has actual knowledge that the payment is
prohibited
the trustee or the Holder, as the case may be, will hold the payment in trust
for the benefit of the holders of Senior Debt. Upon the proper written request
of the holders of Senior Debt, the trustee or the Holder, as the case may be,
will deliver the amounts in trust to the holders of Senior Debt or their proper
representative.
Jarden must promptly notify holders of Senior Debt (or their
representatives) upon the occurrence of an Event of Default.
As a result of the subordination provisions described above, in the
event of a bankruptcy, liquidation or reorganization of Jarden, Holders of notes
may recover less ratably than creditors of Jarden who are holders of Senior
Debt. See "Risk Factors-Your right to receive payments on the debt securities
is junior to our existing senior indebtedness and possibly all of our future
borrowings" in the accompanying prospectus. Further, the guarantees of the notes
are junior to all of the Guarantors' existing senior indebtedness and possibly
to all their future borrowings.
The obligations of each Guarantor under its subsidiary guarantee will
be subordinated to the Senior Debt of that Guarantor on the same terms described
above.
OPTIONAL REDEMPTION
At any time prior to May 1, 2005, Jarden may on any one or more
occasions redeem up to 35% of the aggregate principal amount of notes issued
under the indenture at a redemption price of 109.750% of the principal amount,
plus accrued and unpaid interest and liquidated damages, if any, to the
redemption date, with the net cash proceeds of one or more Public Equity
Offerings; provided that:
o at least 65% of the aggregate principal amount of notes issued
under the indenture remains outstanding immediately after the
occurrence of such redemption (excluding notes held by Jarden and
its Subsidiaries); and
o the redemption occurs within 45 days of the date of the closing of
such Public Equity Offering.
Except pursuant to the preceding paragraph, the notes will not be
redeemable at Jarden's option prior to May 1, 2007.
After May 1, 2007, Jarden may redeem all or a part of the notes 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, on the notes redeemed, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on May 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2007....................................... 104.875%
2008....................................... 103.250%
2009....................................... 101.625%
2010 and thereafter........................ 100.000%
MANDATORY REDEMPTION
Jarden is not required to make any mandatory redemption or sinking fund
payments with respect to the notes.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If a Change of Control occurs, each Holder of notes will have the right
to require Jarden to repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of that Holder's notes pursuant to a Change of Control Offer
on the terms set forth in the indenture. In the Change of Control Offer, Jarden
will offer a Change of Control Payment in cash equal to 101% of the aggregate
principal amount of notes repurchased plus accrued and unpaid
S-8
interest and liquidated damages, if any, on the notes repurchased, to the date
of purchase. Within ten days following any Change of Control, Jarden will mail a
notice to each Holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase notes on the Change of Control
Payment Date specified in the notice, which date will be no earlier than 30 days
and no later than 60 days from the date such notice is mailed, pursuant to the
procedures required by the indenture and described in such notice. Jarden will
comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent those laws and
regulations are applicable in connection with the repurchase of the notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions of
the indenture, Jarden will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
Change of Control provisions of the indenture by virtue of such conflict.
On the Change of Control Payment Date, Jarden will, to the extent
lawful:
o accept for payment all notes or portions of notes properly
tendered pursuant to the Change of Control Offer;
o deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all notes or portions of notes
properly tendered; and
o deliver or cause to be delivered to the trustee the notes properly
accepted together with an officers' certificate stating the
aggregate principal amount of notes or portions of notes being
purchased by Jarden.
The paying agent will promptly mail to each Holder of notes properly
tendered 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 new note will be in a
principal amount of $1,000 or an integral multiple of $1,000.
If a Change of Control Offer is made, there can be no assurance that
Jarden will have available funds sufficient to pay the purchase price for all of
the notes that might be tendered by Holders seeking to accept the Change of
Control Offer. The failure of Jarden to make or consummate the Change of Control
Offer or pay the applicable Change of Control purchase price when due would
result in an Event of Default and would give the trustee and the Holders the
rights described under "-Events of Default and Remedies."
Jarden's credit agreement provides that certain change of control
events with respect to Jarden will constitute a default thereunder and will
prohibit Jarden from consummating a Change of Control Offer. Any future credit
agreements or other agreements relating to Senior Debt to which Jarden becomes a
party may contain similar provisions. If a Change of Control occurs, Jarden
could seek a waiver of any resulting default and, if required, the consent of
its lenders to the purchase of notes or could attempt to refinance the
borrowings that contains such prohibition. If Jarden is not successful in
obtaining a waiver of any change of control default and the consent of the
lenders or in refinancing such borrowings, such Senior Debt will be in default,
and Jarden will remain prohibited from purchasing notes. In such case, Jarden's
failure to purchase tendered notes would constitute an Event of Default under
the indenture, which would, in turn, also constitute a default under the credit
agreement. In such circumstances, the subordination provisions in the indenture
would likely restrict payments to the Holders.
Prior to mailing the notice referred to above, but in any event within
70 days following a Change of Control, Jarden will either repay all outstanding
Senior Debt or obtain the requisite waivers and consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of notes
required by this covenant. Jarden will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The provisions described above that require Jarden to make a Change of
Control Offer following a Change of Control will be applicable whether or not
any other provisions of the indenture are applicable. Except as described above
with respect to a Change of Control, the indenture does not contain provisions
that permit the Holders of the notes to require that Jarden repurchase or redeem
the notes in the event of a takeover, recapitalization or similar transaction.
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Jarden will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the indenture applicable to a Change of Control Offer made by Jarden and
purchases all notes properly tendered and not withdrawn under the Change of
Control Offer.
The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of Jarden and its
Subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
Holder of notes to require Jarden to repurchase its notes as a result of a sale,
lease, transfer, conveyance or other disposition of less than all of the assets
of Jarden and its Subsidiaries taken as a whole to another Person or group may
be uncertain.
ASSET SALES
Jarden will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless:
o Jarden or the Restricted Subsidiary receives consideration at the
time of the Asset Sale at least equal to the fair market value of
the assets or Equity Interests issued or sold or otherwise
disposed of;
o the fair market value is determined by Jarden's Board of
Directors and evidenced by a resolution of the Board of Directors
set forth in an officers' certificate delivered to the trustee;
and
o at least 75% of the consideration received in the Asset Sale by
Jarden or such Restricted Subsidiary is in the form of cash. For
purposes of this provision, each of the following will be deemed
to be cash:
o any liabilities, as shown on Jarden's most recent consolidated
balance sheet, of Jarden or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms
subordinated to the notes or any subsidiary guarantee) that are
assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases Jarden or such
Restricted Subsidiary from further liability;
o any securities, notes or other obligations received by Jarden or
any such Restricted Subsidiary from such transferee that within 30
days are converted by Jarden or such Restricted Subsidiary into
cash, to the extent of the cash received in that conversion; and
o long-term assets that are used or useful in a Permitted Business.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, Jarden may apply those Net Proceeds at its option:
o to repay Senior Debt and, if the Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with
respect thereto to the extent required by such revolving credit
Indebtedness;
o to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
o to make a capital expenditure; or
o to acquire other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any Net Proceeds, Jarden may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by the indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." Within 30
days after the aggregate amount of Excess Proceeds exceeds $5.0 million, Jarden
will make an Asset Sale Offer to all Holders of notes and all holders of other
Indebtedness that is pari passu with the notes containing provisions similar to
those set forth in the indenture with respect to offers to purchase or
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redeem with the proceeds of sales of assets to purchase the maximum principal
amount of notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to
100% of principal amount plus accrued and unpaid interest and liquidated
damages, if any, to the date of purchase, and will be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, Jarden may use
those Excess Proceeds for any purpose not otherwise prohibited by the indenture.
If the aggregate principal amount of notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
trustee will select the notes and such other pari passu Indebtedness to be
purchased on a pro rata basis based upon the aggregate principal amount of each
that was properly tendered. Upon completion of each Asset Sale Offer, the amount
of Excess Proceeds will be reset at zero.
Jarden's credit agreement requires the consent of the lenders to most
asset sales and prohibits the retirement of the notes and other indebtedness
that ranks junior to such Senior Debt. Any future credit agreements or other
agreements relating to Senior Debt to which Jarden becomes a party may contain
similar provisions or may require prepayment of such Senior Debt with all or a
portion of the proceeds of such asset sales. In such case, it is likely that
Jarden would apply the net proceeds to retire Senior Debt or, to the extent
permitted under such agreements, acquire assets for use in a Permitted Business.
Jarden will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of the indenture, Jarden will comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
under the Asset Sale provisions of the indenture by virtue of such conflict.
SELECTION AND NOTICE
If less than all of the notes are to be redeemed at any time, the
trustee will select notes for redemption as follows:
o if the notes are listed on any national securities exchange, in
compliance with the requirements of the principal national
securities exchange on which the notes are listed; or
o if the notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the trustee deems
fair and appropriate.
In the event of a redemption pursuant to the provisions described above
under "-Optional Redemption," notices of redemption will be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each Holder of notes to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with a defeasance of the notes or a
satisfaction and discharge of the indenture. Notices of redemption may not be
conditional.
If any note is to be redeemed in part only, the notice of redemption
that relates to that note will state the portion of the principal amount of that
note that is to be redeemed. A new note in principal amount equal to the
unredeemed portion of the original note will be issued in the name of the Holder
of notes upon cancellation of the original note. No notes can be redeemed in
part if less than $1,000 would remain outstanding.
Notes called for redemption become due on the date fixed for
redemption. On and after the redemption date, interest ceases to accrue on notes
or portions of them called for redemption.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
Jarden will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of Jarden's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in
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connection with any merger or consolidation involving Jarden or
any of its Restricted Subsidiaries) or to the direct or indirect
holders of Jarden's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified
Stock) of Jarden or to Jarden or a Restricted Subsidiary of
Jarden);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving Jarden) any Equity Interests of Jarden;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness
that is subordinated to the notes or the subsidiary guarantees,
except a payment of interest (including any amount comparable to
liquidated damages) or principal at the Stated Maturity thereof;
or
(4) make any Restricted Investment (all such payments and other
actions set forth in these clauses (1) through (4) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment; and
(2) Jarden would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of the covenant described below under
the caption "-Incurrence of Indebtedness and Issuance of
Preferred Stock"; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Jarden and its Restricted
Subsidiaries after April 24, 2002 (excluding Restricted Payments
permitted by clauses (2), (3), (4) and (5) of the next succeeding
paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of Jarden for the period
(taken as one accounting period) from July 1, 2002 to the end of
Jarden's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by Jarden
since April 24, 2002 as a contribution to its common equity
capital or from the issue or sale of Equity Interests of
Jarden (other than Disqualified Stock) or from the issue or
sale of convertible or exchangeable Disqualified Stock or
convertible or exchangeable debt securities of Jarden that
have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock
or debt securities) sold to a Subsidiary of Jarden), plus
(c) with respect to Restricted Investments made by Jarden and
its Restricted Subsidiaries after April 24, 2002, an amount
equal to the net reduction in such Restricted Investments
resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances or other transfers
of assets, in each case to Jarden or any such Restricted
Subsidiary from any such Investment, or from the net cash
proceeds from the sale of any such Investment, or from a
redesignation of an Unrestricted Subsidiary to a Restricted
Subsidiary, but only if and to the extent such amounts are not
included in the calculation of Consolidated Net Income and not
to exceed the amount of the Restricted Investment previously
made by Jarden or any Restricted Subsidiary in such Person or
Unrestricted Subsidiary; provided that any amounts in excess
of the amount of the Restricted Investment previously made may
be included in the calculation of Consolidated Net Income
otherwise available under clause (a), plus;
(d) $5.0 million.
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So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the
dividend payment would have complied with the provisions of the
indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of Jarden or any
Guarantor or of any Equity Interests of Jarden in exchange for, or
out of the net cash proceeds of the substantially concurrent sale
(other than to a Restricted Subsidiary of Jarden) of, Equity
Interests of Jarden (other than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other
acquisition will be excluded from clause (3)(b) of the preceding
paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of Jarden or any Guarantor in exchange
for, or out of the net cash proceeds received from, the
substantially concurrent sale of Permitted Refinancing
Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of Jarden
to the holders of its Equity Interests on a pro rata basis and the
redemption, purchase, cancellation or other retirement of Equity
Interests in a Restricted Subsidiary held by any Person other than
Jarden or a Subsidiary of Jarden;
(5) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of Jarden or any Restricted
Subsidiary of Jarden held by any member of Jarden's (or any of its
Restricted Subsidiaries') management pursuant to any management
equity subscription agreement, stock option agreement or similar
agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may
not exceed $1.0 million in any twelve-month period and $5.0
million in the aggregate; and
(6) prepayments on the subordinated seller note due 2004 in accordance
with its terms as in effect on April 24, 2002.
The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by Jarden or such Subsidiary, as
the case may be, pursuant to the Restricted Payment. The fair market value of
any assets or securities that are required to be valued by this covenant will be
determined by the Board of Directors whose resolution with respect thereto will
be delivered to the trustee. The Board of Directors' determination must be based
upon an opinion or appraisal issued by an accounting, appraisal or investment
banking firm of national standing if the fair market value exceeds $1.0 million.
Not later than the date of making any Restricted Payment, Jarden will 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 "Restricted Payments" covenant were computed, together with a copy of any
fairness opinion or appraisal required by the indenture.
To the extent that Jarden has made any Restricted Payments since April
24, 2002 that have reduced its capacity to make additional Restricted Payments
under the indenture governing Jarden's 2002 notes, corresponding reductions
shall be made to the foregoing provisions so that Jarden's capacity to make
Restricted Payments pursuant to the indenture governing the notes offered hereby
is identical to Jarden's capacity to make Restricted Payments pursuant to the
indenture governing the 2002 notes.
Notwithstanding anything in the indenture to the contrary, the
foregoing Restricted Payments covenant shall not be applicable to the extent
that it would violate the provisions of the indenture governing Jarden's 2002
notes; provided, however, that Jarden shall not pay or offer to pay any
consideration to the holders of its 2002 notes to amend, modify or waive any
provisions of the indenture governing such notes unless it also pays or offers
to pay, as the case may be, the same consideration to the holders of the notes
offered hereby.
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INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
Jarden will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and Jarden
will not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock; provided, however, that Jarden may incur Indebtedness
(including Acquired Debt), and Jarden's Restricted Subsidiaries may incur
Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for
Jarden'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 preferred stock is issued would have
been at least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the preferred stock had been issued, as the case may be, at
the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence
of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by Jarden and any of its Restricted Subsidiaries of
Indebtedness and letters of credit under its Senior Credit
Facility in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of credit being
deemed to have a principal amount equal to the maximum potential
liability of Jarden and its Restricted Subsidiaries thereunder)
not to exceed $100.0 million less the aggregate amount of all
commitment reductions with respect to any revolving credit
borrowings that have been made by Jarden or any of its Restricted
Subsidiaries since the date of the indenture;
(2) the incurrence by Jarden and its Restricted Subsidiaries of
Existing Indebtedness;
(3) the incurrence by Jarden and the Guarantors of Indebtedness
represented by the notes and the related subsidiary guarantees to
be issued on the date of the indenture and such other notes and
related subsidiary guarantees to be issued pursuant to the
registration rights agreement;
(4) the incurrence by Jarden or any of its Restricted Subsidiaries of
Indebtedness of Tilia assumed as part of the Acquisition; provided
that such indebtedness was not incurred in connection with or in
contemplation of the Acquisition;
(5) the incurrence by Jarden or any of its Restricted Subsidiaries of
Indebtedness in an amount which did not exceed $15.0 million
pursuant to promissory notes issued to the shareholders of Tilia
in payment of a portion of consideration for the Acquisition;
provided that such Indebtedness is subordinated to the 2002 notes
to at least the same extent as the 2002 notes are subordinated to
Senior Debt;
(6) the incurrence by Jarden or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price
or cost of construction or improvement of property, plant or
equipment used in the business of Jarden or such Restricted
Subsidiary, in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to refund, refinance
or replace any Indebtedness incurred pursuant to this clause (6),
not to exceed $10.0 million at any time outstanding;
(7) the incurrence by Jarden or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was
permitted by the indenture to be incurred under the first
paragraph of this covenant or clauses (2), (3), (4), (5), (6), (7)
or (12) of this paragraph;
(8) the incurrence by Jarden or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among Jarden and any of its
Subsidiaries; provided, however, that:
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(a) if Jarden or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated
to the prior payment in full in cash of all Obligations with
respect to the notes, in the case of Jarden, or the subsidiary
guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by
a Person other than Jarden or a Restricted Subsidiary of
Jarden and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either Jarden or a
Restricted Subsidiary of Jarden; will be deemed, in each case,
to constitute an incurrence of such Indebtedness by Jarden or
such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (8);
(9) the incurrence by Jarden or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing,
swapping or hedging interest rate risk with respect to any
Indebtedness that is permitted by the terms of the indenture to be
outstanding;
(10) the guarantee by Jarden or any of its Restricted Subsidiaries of
Indebtedness of Jarden or a Restricted Subsidiary of Jarden that
was permitted to be incurred by another provision of this
covenant;
(11) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the
form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of
additional shares of the same class of Disqualified Stock will not
be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of this covenant; provided, in
each such case, that the amount thereof is included in Fixed
Charges of Jarden as accrued; and
(12) the incurrence by Jarden or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including
all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this
clause (12), not to exceed $25.0 million.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (12) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant, Jarden
will be permitted to classify such item of Indebtedness on the date of its
incurrence, or later reclassify all or a portion of such item of Indebtedness,
in any manner that complies with this covenant. Indebtedness under the Senior
Credit Facility outstanding on the date on which notes are first issued and
authenticated under the indenture will be deemed to have been incurred on such
date in reliance on the exception provided by clause (1) of the definition of
Permitted Debt.
To the extent that Jarden has incurred any Indebtedness since April 24,
2002 such that its capacity to incur additional Indebtedness under the indenture
governing Jarden's 2002 notes has been reduced, corresponding reductions shall
be made to the foregoing provisions so that Jarden's capacity to incur
Indebtedness pursuant to the indenture governing the notes offered hereby is
identical to Jarden's capacity to incur indebtedness pursuant to the indenture
governing the 2002 notes.
NO LAYERING OF DEBT
Jarden 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 Debt of Jarden and senior in any respect in right of
payment to the notes. 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 the Senior Debt of such Guarantor and senior in any respect
in right of payment to such Guarantor's subsidiary guarantee.
LIENS
Jarden will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind securing Indebtedness for money borrowed on any asset now owned or
hereafter acquired, except Permitted Liens.
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DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
Jarden will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to Jarden or any of its Restricted Subsidiaries, or with respect
to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to Jarden or any of its
Restricted Subsidiaries;
(2) make loans or advances to Jarden or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to Jarden or any of its
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness, and the Senior Credit
Facility as in effect on April 24, 2002 and any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of those agreements;
provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or
refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those
contained in those agreements on April 24, 2002;
(2) the indenture, the notes and the subsidiary guarantees;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by Jarden or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or
in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or
assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the
indenture to be incurred;
(5) customary non-assignment provisions in leases, licenses and other
agreements entered into in the ordinary course of business and
consistent with past practices;
(6) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on that property of
the nature described in clause (3) of the preceding paragraph;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being
refinanced;
(9) Liens securing Indebtedness otherwise permitted to be incurred
under the provisions of the covenant described above under the
caption "-Liens" that limit the right of the debtor to dispose of
the assets subject to such liens;
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale
agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business; and
S-16
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business.
MERGER, CONSOLIDATION OR SALE OF ASSETS
Jarden may not, directly or indirectly: (1) consolidate or merge with
or into another Person (whether or not Jarden is the surviving corporation); or
(2) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of Jarden and its Subsidiaries taken as a whole,
in one or more related transactions, to another Person; unless:
(1) either: (a) Jarden is the surviving corporation; or (b) the Person
formed by or surviving any such consolidation or merger (if other
than Jarden) or to which such sale, assignment, transfer,
conveyance or other disposition has been made is a corporation
organized or existing under the laws of the United States, any
state of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than Jarden) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been
made assumes all the obligations of Jarden under the notes, the
indenture and the registration rights agreement pursuant to
agreements reasonably satisfactory to the trustee;
(3) immediately after such transaction, no Default or Event of Default
exists; and
(4) Jarden or the Person formed by or surviving any such consolidation
or merger (if other than Jarden), or to which such sale,
assignment, transfer, conveyance or other disposition has been
made will, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of the covenant described above under
the caption "-Incurrence of Indebtedness and Issuance of
Preferred Stock."
In addition, Jarden may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets between or among Jarden and any of its Restricted
Subsidiaries that are Guarantors.
TRANSACTIONS WITH AFFILIATES
Jarden will not, and will not permit any of its Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to Jarden or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by Jarden or
such Restricted Subsidiary with an unrelated Person; and
(2) Jarden delivers to the trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess
of $1.0 million, a resolution of the Board of Directors set forth
in an officers' certificate certifying that such Affiliate
Transaction complies with this covenant and that such Affiliate
Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess
of $10.0 million, an opinion as to the fairness to Jarden of such
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Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national
standing.
The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment or consulting agreement entered into by Jarden or
any of its Restricted Subsidiaries in the ordinary course of
business and consistent with the past practice of Jarden or such
Restricted Subsidiary;
(2) transactions between or among Jarden and/or its Restricted
Subsidiaries;
(3) transactions with a Person that is an Affiliate of Jarden solely
because Jarden owns an Equity Interest in, or controls, such
Person;
(4) payment of reasonable fees and compensation to, and indemnity
provided on behalf of, directors and officers of Jarden;
(5) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of Jarden;
(6) Restricted Payments that are permitted by the provisions of the
indenture described above under the caption "-Restricted
Payments";
(7) transfers of accounts receivable and related assets to a
Receivables Subsidiary in connection with a Qualified Receivables
Transaction and the charging of fees and expenses in the ordinary
course of business in connection with such transfers; and
(8) Permitted Investments.
BUSINESS ACTIVITIES
Jarden will not, and will not permit any of its Restricted Subsidiaries
to, engage in any business activities other than in a Permitted Business.
ADDITIONAL SUBSIDIARY GUARANTEES
If Jarden or any of its Subsidiaries acquires or creates a Domestic
Subsidiary after the date of the indenture, then that newly acquired or created
Domestic Subsidiary will become a Guarantor and execute a subsidiary guarantee
and deliver an opinion of counsel satisfactory to the trustee within 30 days of
the date on which it was acquired or created.
DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by Jarden and its
Restricted Subsidiaries in the Subsidiary to be designated will be deemed to be
an Investment made as of the time of the designation and will reduce the amount
available for Restricted Payments under the first paragraph of the covenant
described above under the caption "-Restricted Payments" or Permitted
Investments, as determined by Jarden. That designation will only be permitted if
the Investment would be permitted at that time and if the Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. Upon its
designation as an Unrestricted Subsidiary, it will cease to be a Guarantor and
its subsidiary guarantee will be released.
The Board of Directors may redesignate any Unrestricted Subsidiary to
be a Restricted Subsidiary if the redesignation would not cause a Default. If an
Unrestricted Subsidiary is redesignated as a Restricted Subsidiary, an amount
equal to the lesser of the aggregate fair market value of all outstanding
Investments owned by Jarden and its Restricted Subsidiaries in the Subsidiary to
be redesignated and the amount of all such Investments will be deemed to
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be recovered in cash as of the time of the redesignation and will increase the
amounts available for (1) Restricted Payments under the first paragraph of the
covenant described above under the caption "-Restricted Payments" and (2)
Permitted Investments in proportion to the amount of Jarden's and its Restricted
Subsidiaries' Investments in such Subsidiary that were Restricted Payments and
Permitted Investments. Upon any such redesignation or other designation as a
Restricted Subsidiary, such Subsidiary will become a Guarantor and execute a
subsidiary guarantee.
PAYMENTS FOR CONSENT
Jarden will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any Holder of notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the indenture or the
notes unless such consideration is offered to be paid and is paid to all Holders
of the notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
REPORTS
Whether or not required by the Commission, so long as any notes are
outstanding, Jarden will furnish to the Holders of notes, within the time
periods specified in the Commission's rules and regulations (together with any
extensions granted by the Commission):
(1) 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 Jarden 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 on the annual financial
statements by Jarden's certified independent accountants; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if Jarden were required to file such
reports.
If Jarden has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of Jarden and
its Restricted Subsidiaries separate from the financial condition and results of
operations of the Unrestricted Subsidiaries of Jarden.
In addition, Jarden and the Guarantors have agreed that, for so long as
any notes remain outstanding, whether or not required by the Commission, Jarden
will file a copy of all of the information and reports referred to in clauses
(1) and (2) above with the Commission for public availability (unless the
Commission will not accept such a filing) within the time periods specified in
the Commission's rules and regulations (together with any extensions granted by
the Commission) and make such information available to securities analysts and
prospective investors upon request.
AMENDMENT OF SUBORDINATED SELLER NOTES
Without the consent of the Holders of at least a majority in principal
amount of notes then outstanding, Jarden will not agree to amend or modify the
subordinated seller notes in any manner that would result in the subordinated
seller notes not being subordinated to the notes to at least the same extent as
the notes are subordinated to Senior Debt, or that would accelerate any payment
of the subordinated seller notes or increase the interest rate on the
subordinated seller notes.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or
liquidated damages due with respect to, the notes, whether or not
prohibited by the subordination provisions of the indenture;
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(2) 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;
(3) failure by Jarden or any of its Subsidiaries to comply with the
provisions described under the captions "-Repurchase at the
Option of Holders-Change of Control," "-Repurchase at the Option
of Holders-Asset Sales" (other than the requirement that the
resolution of the Board of Directors pursuant to clause (2) of the
first paragraph of such provision be set forth in an officers'
certificate delivered to the trustee, with respect to which the
Event of Default described in clause (5) of the paragraph will
apply), or "-Certain Covenants-Merger, Consolidation or Sale of
Assets";
(4) failure by Jarden or any of its Subsidiaries to comply with the
provisions described under the captions "-Certain Covenants-
Restricted Payments" or "-Certain Covenants-Incurrence of
Indebtedness and Issuance of Preferred Stock," and such failure
continues for 30 days;
(5) failure by Jarden or any of its Subsidiaries for 60 days after
notice by the trustee or Holders of at least 25% in principal
amount of the then outstanding notes to comply with any of the
other agreements in the indenture;
(6) 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 Jarden or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by
Jarden or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date
of the indenture, if that default:
(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such
default (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10.0 million or more;
(7) failure by Jarden or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $10.0 million (to the
extent not insured), which judgments are not paid, discharged or
stayed for a period of 60 days;
(8) except as permitted by the indenture, any subsidiary guarantee
shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any
Guarantor, shall deny or disaffirm its obligations under its
subsidiary guarantee; and
(9) certain events of bankruptcy or insolvency described in the
indenture with respect to Jarden, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary.
In the case of an Event of Default arising from an event of bankruptcy
or insolvency described in clause (9) above, all outstanding notes will become
due and payable immediately without further action or notice. If any other 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.
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 if it
determines that withholding notice is in their interest, except a Default or
Event of Default relating to the payment of principal (including redemption or
purchase price) or interest or liquidated damages.
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The Holders of 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 or liquidated damages on, or the principal (including
redemption or purchase price) of, the notes.
In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of Jarden with the
intention of avoiding payment of the premium that Jarden would have had to pay
if Jarden then had elected to redeem the notes pursuant to the optional
redemption provisions of the indenture, an equivalent premium will 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 May 1, 2007,
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of Jarden with the intention of avoiding the prohibition on redemption of
the notes prior to May 1, 2007, then the premium specified in the indenture will
also become immediately due and payable to the extent permitted by law upon the
acceleration of the notes.
At any time after a declaration of acceleration under the indenture,
but before a judgment or decree for payment of the money due has been obtained
by the trustee, the Holders of a majority in aggregate principal amount of the
outstanding notes, by written notice to Jarden and the trustee, may rescind such
declaration and its consequences if: (i) Jarden has paid or deposited with the
trustee a sum sufficient to pay (A) all overdue interest on all notes, (B) all
unpaid principal of (and premium, if any, on) any outstanding notes that has
become due, other than by such declaration of acceleration, and interest thereon
at the rate borne by the notes, (C) to the extent that payment of such interest
is lawful, interest upon overdue interest and overdue principal at the rate
borne by the notes, and (D) all sums paid or advanced by the trustee under the
indenture and the reasonable compensation, expenses, disbursements and advances
of the trustee, its agents and counsel; and (ii) all Events of Default, other
than the non-payment of amounts of principal of (or premium, if any, on), or
interest on, the notes that have become due solely by such declaration of
acceleration, have been cured or waived. No such rescission will affect any
subsequent default or impair any right consequent thereon.
Jarden is required to deliver to the trustee annually a statement
regarding compliance with the indenture. Upon becoming aware of any Default or
Event of Default, Jarden is required to deliver to the trustee a statement
specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of Jarden
or any Guarantor, as such, will have any liability for any obligations of Jarden
or the Guarantors under the notes, the indenture, the subsidiary guarantees, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of notes by accepting a note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the notes. The waiver may not be effective to waive liabilities
under the Federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Jarden may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding notes and all obligations
of the Guarantors discharged with respect to their subsidiary guarantees ("Legal
Defeasance") except for:
(1) the rights of Holders of outstanding notes to receive payments in
respect of the principal of, or interest or premium and liquidated
damages, if any, on such notes when such payments are due from the
trust referred to below;
(2) Jarden's obligations with respect to the notes concerning issuing
temporary notes, registration of notes, mutilated, destroyed, lost
or stolen notes and the maintenance of an office or agency for
payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the trustee,
and Jarden's and the Guarantors' obligations in connection
therewith; and
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(4) the Legal Defeasance provisions of the indenture.
In addition, Jarden may, at its option and at any time, elect to have
the obligations of Jarden and the Guarantors released with respect to certain
covenants (including its obligation to make Change of Control Offers and Asset
Sale Offers) that are described in the indenture ("Covenant Defeasance") and
thereafter any omission to comply with those covenants will 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:
(1) Jarden 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 of cash in
U.S. dollars and non-callable Government Securities, in amounts as
will be sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay the principal of, and
interest and premium and liquidated damages, if any, on the
outstanding notes on the stated maturity or on the applicable
redemption date, as the case may be, and Jarden must specify
whether the notes are being defeased to maturity or to a
particular redemption date;
(2) in the case of Legal Defeasance, Jarden has delivered to the
trustee an opinion of counsel reasonably acceptable to the trustee
confirming that
(i) Jarden has received from, or there has been published by, the
Internal Revenue Service a ruling; or
(ii) since the date of the indenture, there has been a change in
the applicable Federal income tax law,
in either case to the effect that, and based thereon such opinion
of counsel will 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;
(3) in the case of Covenant Defeasance, Jarden has delivered to the
trustee an opinion of counsel 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;
(4) no Default or Event of Default has occurred and is continuing on
the date of such deposit and after giving effect thereto;
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the indenture) to which Jarden
or any of its Subsidiaries is a party or by which Jarden or any of
its Subsidiaries is bound;
(6) Jarden must deliver to the trustee an officers' certificate
stating that the deposit was not made by Jarden with the intent of
preferring the Holders of notes over the other creditors of Jarden
with the intent of defeating, hindering, delaying or defrauding
creditors of Jarden or others; and
(7) Jarden must deliver to the trustee an officers' certificate and an
opinion of counsel, each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance have
been complied with.
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AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next three succeeding paragraphs, the
indenture and 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, without limitation, consents obtained in connection with a purchase
of, or 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, without limitation, consents obtained in
connection with a purchase of, or 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):
(1) reduce the principal amount of notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note
or alter the provisions with respect to the redemption of the
notes (other than provisions relating to the covenants described
above under the caption "-Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest on
any note;
(4) waive a Default or Event of Default in the payment of principal
(including redemption or purchase price) of, or interest or
premium, 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);
(5) make any note payable in money other than that stated in the
notes;
(6) 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 interest or premium or
liquidated damages, if any, on the notes;
(7) waive a redemption payment with respect to any note (other than a
payment required by one of the covenants described above under the
caption "-Repurchase at the Option of Holders");
(8) release any Guarantor from any of its obligations under its
subsidiary guarantee or the indenture, except in accordance with
the terms of the indenture; or
(9) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of the
indenture relating to subordination that adversely affects the rights of the
Holders of the notes will require the consent of the Holders of at least 75% in
aggregate principal amount of notes then outstanding.
Notwithstanding the preceding, without the consent of any Holder of
notes, Jarden, the Guarantors and the trustee may amend or supplement the
indenture or the notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of
certificated notes;
(3) to provide for the assumption of Jarden's obligations to Holders
of notes in the case of a merger or consolidation or sale of all
or substantially all of Jarden's assets;
(4) to make any change that would provide any additional rights or
benefits to the Holders of notes or that does not adversely affect
the legal rights under the indenture of any such Holder;
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(5) to comply with requirements of the Commission in order to effect
or maintain the qualification of the indenture under the Trust
Indenture Act; or
(6) to conform the indenture governing the notes offered hereby to the
indenture governing the 2002 notes as in effect on the date of the
indenture governing the notes offered hereby.
SATISFACTION AND DISCHARGE
The indenture will be discharged and will cease to be of further effect
as to all notes issued thereunder, when:
(1) either:
(i) all notes that have been authenticated, except lost, stolen
or destroyed notes that have been replaced or paid and notes
for whose payment money has been deposited in trust and
thereafter repaid to Jarden, have been delivered to the
trustee for cancellation; or
(ii) all notes that have not been delivered to the trustee for
cancellation have become due and payable by reason of the
mailing of a notice of redemption or otherwise or will
become due and payable within one year and Jarden or any
Guarantor has irrevocably deposited or caused to be
deposited with the trustee as trust funds in trust solely
for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash
in U.S. dollars and non-callable Government Securities, in
amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire
indebtedness on the notes not delivered to the trustee for
cancellation for principal, premium and liquidated damages,
if any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of the deposit or will occur as a result of the deposit
and the deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which Jarden
or any Guarantor is a party or by which Jarden or any Guarantor is
bound;
(3) Jarden or any Guarantor has paid or caused to be paid all sums
payable by it under the indenture; and
(4) Jarden has delivered irrevocable instructions to the trustee under
the indenture to apply the deposited money toward the payment of
the notes at maturity or the redemption date, as the case may be.
In addition, Jarden must deliver an officers' certificate and an
opinion of counsel to the trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
CONCERNING THE TRUSTEE
If the trustee becomes a creditor of Jarden or any Guarantor, the
indenture limits its right 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
occurs and is continuing, the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent person 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 has offered to the trustee security and
indemnity satisfactory to it against any loss, liability or expense.
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BOOK-ENTRY, DELIVERY AND FORM
The notes will be represented by one or more permanent global
certificates in registered form without interest coupons (the "Global Notes").
The Global Notes will be deposited upon issuance with the Trustee as custodian
for The Depository Trust Company ("DTC"), in New York, New York, and registered
in the name of DTC or its nominee 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".
Transfer of beneficial interests in the Global Notes will be subject to
the applicable rules and procedures of DTC and its direct or indirect
participants (including, if applicable, those of the Euroclear System
("Euroclear") and Clearstream Banking societe anonyme ("Clearstream")), which
may change from time to time.
DEPOSITORY PROCEDURES
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 purchasers), 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
and transfer of ownership interests of each actual purchaser of each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
Pursuant to procedures established by DTC:
(1) upon deposit of the Global Notes, DTC will credit the accounts of
Participants designated by the initial purchasers with portions of
the principal amount of the Global Notes; and
(2) ownership of such interests in the Global Notes will be 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 Global Notes may hold their interests therein directly
through DTC, if they are Participants in such system, or indirectly through
organizations (including Euroclear and Clearstream) which are Participants in
such system.
All interests in a Global Note, including those held through Euroclear
or Clearstream, will be subject to the procedures and requirements of DTC. Those
interests held through Euroclear or Clearstream will also be subject to the
procedures and requirements of these systems. 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, 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. For
certain other restrictions on the transferability of the notes, see "-Exchange
of Book-Entry Notes for Certificated Notes".
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.
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Payments in respect of the principal of and premium and liquidated
damages, if any, and interest on a Global Note registered in the name of DTC or
its nominee will be payable by the Trustee to DTC in its capacity as the
registered holder under the Indenture. Jarden 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 Jarden, the Trustee nor any
agent of Jarden or the Trustee has or will have any responsibility or liability
for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payment made on account of
beneficial ownership interests 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
(2) any other matter relating to the actions and practices of DTC or
any of its Participants or Indirect Participants.
DTC has advised Jarden 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 interests 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 Jarden. Neither Jarden 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 Jarden and the Trustee may conclusively rely on and will be
protected in relying on instructions from DTC or its nominee for all purposes.
Except for trades involving only Euroclear and Clearstream
participants, 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.
Transfers between Participants in DTC will be effected in accordance
with DTC's procedures, and will be settled in same-day funds, and transfers
between participants in Euroclear and Clearstream will be affected in the
ordinary way in accordance with their respective rules and operating procedures.
Cross-market transfers between the Participants in DTC, on the one
hand, and Euroclear or Clearstream participants, on the other hand, will be
effected through DTC in accordance with DTC's rules on behalf of Euroclear and
Clearstream, as the case may be, by their depositories. Cross-market
transactions will require delivery of instructions to Euroclear or Clearstream,
as the case may be, by the counterparty in that system in accordance with the
rules and procedures and within the established deadlines (Brussels time) of
that system. Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver instructions to its
respective depositories to take action to effect final settlement on its behalf
by delivering or receiving interests in the relevant Global Note in DTC, and
making or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to DTC. Euroclear and Clearstream participants may
not deliver instructions directly to the depositories for Euroclear or
Clearstream.
Because of time zone differences, the securities account of a Euroclear
or Clearstream participant purchasing an interest in a Global Note from a
Participant in DTC will be credited and reported to the relevant Euroclear or
Clearstream participant, during the securities settlement processing day (which
must be a business day for Euroclear and Clearstream) immediately following the
settlement date of DTC. DTC has advised Jarden that cash received in Euroclear
or Clearstream as a result of sales of interests in a Global Note by or through
a Euroclear or Clearstream participant to a Participant in DTC will be received
with value on the settlement date of DTC but will be available in the relevant
Euroclear or Clearstream cash account only as of the business day of Euroclear
or Clearstream following DTC's settlement date.
DTC has advised Jarden 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 with DTC interests in the Global Notes are credited and only in
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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. 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 the
notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the Global Notes among
participants in DTC, Euroclear and Clearstream, they are under no obligation to
perform or to continue to perform such procedures, and the procedures may be
discontinued at any time. Neither Jarden nor the Trustee will have any
responsibility for the performance by DTC, Euroclear or Clearstream or their
respective Participants or Indirect Participants of their respective obligations
under the rules and procedures governing their operations.
According to DTC, the foregoing information with respect to DTC has
been provided for informational purposes only and is not intended to serve as a
representation, warranty, or contract modification of any kind.
The information in this section concerning DTC, Euroclear and
Clearstream and their book-entry systems has been obtained from sources that
Jarden believes to be reliable.
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for notes in registered certificated form
("Certificated Notes") if:
(1) DTC (a) notifies Jarden that it is unwilling or unable to continue
as depositary for the Global Notes or (b) has ceased to be a
clearing agency registered under the Exchange Act and, in either
case, Jarden fails to appoint a successor depositary;
(2) Jarden, at its option, notifies the trustee in writing that it
elects to cause the issuance of the Certificated Notes; or
(3) there has occurred and is 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 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 in Global
Notes 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).
EXCHANGE OF CERTIFICATED NOTES FOR GLOBAL NOTES
Certificated Notes 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.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The following description is a summary of the material provisions of
the registration rights agreement. It does not restate that agreement in its
entirety. We urge you to read the proposed form of registration rights agreement
in its entirety because it, and not this description, defines your registration
rights as Holders of these notes. A form of the registration rights agreement
will be filed as an exhibit to a Form 8-K incorporated by reference into the
registration statement of which this prospectus supplement and the accompanying
prospectus form a part.
Jarden, the Guarantors and the underwriters will enter into the
registration rights agreement on or prior to the closing of this offering.
Pursuant to the registration rights agreement, Jarden and the Guarantors will
agree to file with the Commission an exchange offer registration statement on
the appropriate form under the Securities Act with respect to the notes. Upon
the effectiveness of the exchange offer registration statement, Jarden and the
Guarantors will offer to the Holders of the notes pursuant to the Exchange Offer
(as defined in the registration rights agreement) the opportunity to exchange
for notes issued under the same indenture as Jarden's 2002 notes.
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The registration rights agreement will provide that:
(1) Jarden and the Guarantors will file an exchange offer registration
statement with the Commission;
(2) Jarden and the Guarantors will use commercially reasonable efforts
to cause the exchange offer registration statement to be declared
effective by the Commission; and
(3) Jarden and the Guarantors will use commercially reasonable efforts
to
(a) commence the Exchange Offer; and
(b) issue, within 365 days after the closing of the offering of
the notes, notes issued under the same indenture as the 2002
notes in exchange for all notes tendered prior thereto in the
Exchange Offer;
provided that if Jarden or any Guarantor files any other
registration statement (subject to certain customary exceptions)
or otherwise offers securities pursuant to any registration
statement then we and the Guarantors shall be required to file a
registration statement for the exchange offer contemporaneously
therewith, except if such offering is an equity offering and the
underwriter for such equity offering reasonably believes the
filing of the exchange offer registration statement is reasonably
likely to have an adverse effect on the equity offering.
If:
(a) Jarden and the Guarantors fail to consummate the Exchange
Offer within 365 days after the close of the offering of the
notes; or
(b) Jarden and the Guarantors fail to file, only if required by
the registration rights agreement, the exchange offer
registration statement at the time described above (each such
event referred to in clauses (a) and (b) above, a
"Registration Default");
then, as the exclusive remedy of the holders, Jarden and the
Guarantors will pay Liquidated Damages to each Holder of notes,
with respect to the first 90-day period immediately following the
occurrence of the first default in an amount equal to $.05 per
week per $1,000 principal amount of 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 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 notes.
All accrued Liquidated Damages will be paid by Jarden and the
Guarantors on each date on which stated interest is payable to the Global Note
Holder by wire transfer of immediately available funds or by federal funds check
and to Holders of Certificated Notes by wire transfer to the accounts specified
by them or by mailing checks to their registered addresses if no such accounts
have been specified.
Following the cure of all Registration Defaults, the accrual of
Liquidated Damages will cease.
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.
"2002 notes" means Jarden's outstanding 9 3/4% Senior Subordinated
Notes due 2012.
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"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging
with or into, or becoming a Subsidiary of, such specified Person;
and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Acquisition" means Jarden's acquisition of the business of Tilia which
closed on April 24, 2002.
"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,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than sales of inventory and accounts receivable in
the ordinary course of business consistent with past practices;
provided that the sale, conveyance or other disposition of all or
substantially all of the assets of Jarden and its Subsidiaries
taken as a whole will be governed by the provisions of the
indenture described above under the caption "-Repurchase at the
Option of Holders-Change of Control" and/or the provisions
described above under the caption "-Certain Covenants-Merger,
Consolidation or Sale of Assets" and not by the provisions of the
Asset Sale covenant; and
(2) the issuance of Equity Interests by any of Jarden's Restricted
Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0
million;
(2) a transfer of assets between or among Jarden and its Subsidiaries,
(3) an issuance of Equity Interests by a Subsidiary to Jarden or to
another Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents or
Government Securities;
(6) transfers of accounts receivable and related assets by Jarden or
any of its Restricted Subsidiaries to a Receivables Subsidiary in
connection with a Qualified Receivables Transaction; and
(7) a Restricted Payment or Permitted Investment that is permitted by
the covenant described above under the caption "-Certain
Covenants-Restricted Payments."
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently
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exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" have a
corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership or limited liability company, the
Board of Directors of the general partner or managing member of
the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited);
and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of
the United States government (provided that the full faith and
credit of the United States is pledged in support of those
securities) having maturities of not more than six months from the
date of acquisition;
(3) 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 and
overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $500.0
million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clauses (2) and
(3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Rating Services and
in each case maturing within six months after the date of
acquisition; and
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (5)
of this definition.
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"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all
of the properties or assets of Jarden and its Restricted
Subsidiaries taken as a whole to any "person" (as that term is
used in Section 13(d)(3) of the Exchange Act) other than a
Permitted Holder;
(2) the adoption of a plan relating to the liquidation or dissolution
of Jarden;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is
that any "person" (as defined above), other than a Permitted
Holder, becomes the Beneficial Owner, directly or indirectly, of
more than 50% of the Voting Stock of Jarden, measured by voting
power rather than number of shares; or
(4) the first day on which a majority of the members of the Board of
Directors of Jarden are not Continuing Directors.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period, plus
(without duplication):
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income;
(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, to the extent that
such provision for taxes was deducted in computing such
Consolidated Net Income;
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether
or not capitalized (including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such
Consolidated Net Income;
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that
it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; and
(5) the net adjustment to EBITDA to calculate adjusted EBITDA on a pro
forma basis for the year ended December 31, 2001, as shown in the
offering memorandum relating to the initial offering of the 2002
notes in note (b) under the caption "Offering Memorandum Summary--
Alltrista Summary Consolidated Historical and Pro Forma Financial
Data," to the extent that such net adjustment was deducted in
computing such Consolidated Net Income.
minus non-cash items increasing such Consolidated Net Income for such period,
other than any items that represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any prior period, in each case, on a
consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the
income or profits, depreciation and amortization and other non-cash expenses,
and net adjustment to EBITDA of a Subsidiary of Jarden will be added to
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Consolidated Net Income to compute Consolidated Cash Flow of Jarden only to the
extent that a corresponding amount would be permitted at the date of
determination to be dividended to Jarden by such Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity
method of accounting will be included only to the extent of the
amount of dividends or distributions paid in cash to the specified
Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is
not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary
or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition
will be excluded; and
(4) the cumulative effect of a change in accounting principles will be
excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of Jarden who:
(1) was a member of such Board of Directors on April 24, 2002; or
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who
were members of such Board at the time of such nomination or
election.
"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 Debt" means:
(1) any Indebtedness outstanding under the Senior Credit Facility; and
(2) after payment in full of all Obligations under the Senior Credit
Facility, any other Senior Debt permitted under the indenture the
outstanding principal amount of which is $25.0 million or more and
that has been designated by Jarden as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), 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 of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require Jarden
to repurchase such Capital Stock upon the occurrence of a change of control or
an asset sale will not constitute Disqualified Stock if the terms of such
Capital Stock provide that Jarden may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with the covenant described above under the caption "-Certain Covenants-
Restricted Payments."
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"Domestic Subsidiary" means any Restricted Subsidiary of Jarden that
was formed under the laws of the United States or any state of the United States
or the District of Columbia or that guarantees or otherwise provides direct
credit support for any Indebtedness of Jarden.
"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 Jarden and its
Subsidiaries in existence on April 24, 2002, until such amounts are repaid.
"Family" shall mean, with respect to any Person, (i) the current and
former spouses of such Person and (ii) the ancestors, siblings and descendants,
whether by blood or adoption, of such Person.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date will be
given pro forma effect as if they had occurred on the first day of
the four-quarter reference period and Consolidated Cash Flow for
such reference period will be calculated on a pro forma basis in
accordance with Regulation S-X under the Securities Act, but
without giving effect to clause (3) of the proviso set forth in
the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, will be
excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded, but
only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the specified Person or any of
its Restricted Subsidiaries following the Calculation Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
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(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries, whether or not such Guarantee or Lien is
called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any Disqualified Stock of such Person
or any preferred stock of its Restricted Subsidiaries, other than
dividends payable solely in Equity Interests (other than
Disqualified Stock) of Jarden or to Jarden or a Restricted
Subsidiary of Jarden, times (b) a fraction, the numerator of which
is one and the denominator of which is one minus the then current
combined marginal Federal, state and local income tax rate of such
Person (taking into account the deductibility of state and local
taxes for Federal income tax purposes), expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"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 from time to time.
"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, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) each of Jarden's direct and indirect Domestic Subsidiaries
existing on the date of the indenture, excluding the Inactive
Subsidiaries and the New Subsidiaries; and
(2) any other Subsidiary that executes a subsidiary guarantee in
accordance with the provisions of the indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect
thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price
of any property, except any such balance that constitutes an
accrued expense or trade payable; or
(6) representing any Hedging Obligations,
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if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due,
in the case of any other Indebtedness;
(3) the lesser of the Indebtedness and the fair market value of the
collateral asset, in the case of any Indebtedness of others
secured by a Lien on any asset of the specified Person; and
(4) the lesser of the primary Indebtedness and any stated limit on
recourse under the Guarantee, in the case of Indebtedness of
others secured by a Guarantee of the specified Person.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to directors,
officers, employees and consultants made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If Jarden or any Subsidiary of Jarden sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of Jarden such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary of
Jarden, Jarden will be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of Jarden's Investments in
such Subsidiary that were not sold or disposed of in an amount determined as
provided in the final paragraph of the covenant described above under the
caption "-Certain Covenants-Restricted Payments." The acquisition by Jarden or
any of its Restricted Subsidiaries of a Person that holds an Investment in a
third Person will be deemed to be an Investment by Jarden or such Restricted
Subsidiary in such third Person in an amount equal to the fair market value of
the Investments held by the acquired Person in such third Person in an amount
determined as provided in the final paragraph of the covenant described above
under the caption "-Certain Covenants-Restricted Payments," if the acquired
Person becomes a Restricted Subsidiary as a result of such acquisition and such
third Person does not become a Restricted Subsidiary as a result of such
acquisition.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset.
"Net Income" means, with respect to any specified 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:
(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with:
(a) any Asset Sale; or (b) the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its
Restricted Subsidiaries; and
(2) 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 Jarden or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (a) the direct costs
relating to such Asset Sale, including,
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without limitation, legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result of the Asset Sale,
(b) taxes paid or payable as a result of the Asset Sale, in each case, after
taking into account any available tax credits or deductions and any tax sharing
arrangements, (c) amounts required to be applied to the repayment of
Indebtedness, other than Senior Debt secured by a Lien on the asset or assets
that were the subject of such Asset Sale, and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP, including pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, and (d) amounts
required to be paid to any Person (other than Jarden or any Restricted
Subsidiary) owning a beneficial interest in the assets that are subject to the
Asset Sale.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither Jarden nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness) or (b) is directly or indirectly liable as a
guarantor or otherwise;
(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action
against an Unrestricted Subsidiary) would permit upon notice,
lapse of time or both any holder of any other Indebtedness of
Jarden or any of its Restricted Subsidiaries to declare a default
on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its stated
maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of Jarden or any
of its Restricted Subsidiaries (other than Equity Interests in an
Unrestricted Subsidiary).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Business" means any business in which Jarden and its
Restricted Subsidiaries were engaged on April 24, 2002, any other business in
the consumer products industry, including without limitation food products, and
any business reasonably related or complementary thereto.
"Permitted Holder" means (i) Martin E. Franklin or Ian Ashken; (ii) any
member of the Family of Martin E. Franklin or Ian Ashken; (iii) any
conservatorship, custodianship or decedent's estate of any Person specified in
the foregoing clause (i) or (ii); (iv) any trust established for the benefit of
any Person specified in the foregoing clause (i) or (ii); or (v) any
corporation, limited liability company, partnership or other entity, the
controlling equity interests in which are held by or for the benefit of any one
or more Person specified in the foregoing clause (i) or (ii).
"Permitted Investments" means:
(1) any Investment in Jarden or in a Restricted Subsidiary of Jarden;
(2) any Investment in Cash Equivalents;
(3) any Investment by Jarden or any Subsidiary of Jarden in a Person,
if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of Jarden; or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets
to, or is liquidated into, Jarden or a Restricted Subsidiary
of Jarden;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"-Repurchase at the Option of Holders-Asset Sales";
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(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of Jarden;
(6) accounts receivable and any Investments received in compromise of
obligations incurred in the ordinary course of trade creditors or
customers that were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade
creditor or customer or upon foreclosure on any secured
Investment;
(7) Hedging Obligations;
(8) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause
(8) since the date of the indenture not to exceed $10.0 million in
original amount at any time outstanding; and
(9) Investments by Jarden or a Restricted Subsidiary of Jarden in a
Receivables Subsidiary in connection with a Qualified Receivables
Transaction.
"Permitted Junior Securities" means:
(1) Equity Interests in Jarden or any Guarantor or any successor to
either of the foregoing; or
(2) debt securities that are subordinated to all Senior Debt and any
debt securities issued in exchange for Senior Debt to
substantially the same extent as, or to a greater extent than, the
notes and the subsidiary guarantees are subordinated to Senior
Debt under the indenture.
"Permitted Liens" means:
(1) Liens on assets of Jarden and its Restricted Subsidiaries securing
Senior Debt;
(2) Liens in favor of Jarden and its Restricted Subsidiaries;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with Jarden or any Restricted
Subsidiary of Jarden; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do
not extend to any assets other than those of the Person merged
into or consolidated with Jarden or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by Jarden or any Restricted Subsidiary of Jarden;
provided that such Liens were in existence prior to the
contemplation of such acquisition;
(5) Liens securing reimbursement obligations with respect to letters
of credit and surety or performance bonds issued in the ordinary
course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (6) of the second paragraph of the covenant
entitled "-Certain Covenants-Incurrence of Indebtedness and
Issuance of Preferred Stock" covering only the assets acquired
with such Indebtedness;
(7) Liens existing on April 24, 2002;
(8) Liens on Equity Interests in Unrestricted Subsidiaries that secure
Non-Recourse Debt; and
(9) Liens upon specific items of inventory or other goods and proceeds
of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such
Person to facilitate the purchase, shipment or storage of such
inventory or other goods.
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"Permitted Refinancing Indebtedness" means any Indebtedness of Jarden
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of Jarden or any of its Restricted Subsidiaries (other
than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness
extended, refinanced, renewed, replaced, defeased or refunded
(plus all accrued interest on the Indebtedness and the amount of
all expenses and premiums incurred in connection therewith,
including consent fees);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the
notes or the subsidiary guarantees, such Permitted Refinancing
Indebtedness has a final maturity date later than the final
maturity date of the notes, and is subordinated in right of
payment to, the notes or the subsidiary guarantees 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; and
(4) such Indebtedness is incurred either by Jarden, by the Restricted
Subsidiary that is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded or by any
intermediate Restricted Subsidiary.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Public Equity Offering" means an offer and sale of Capital Stock
(other than Disqualified Stock) of Jarden pursuant to a registration statement
that has been declared effective by the Commission pursuant to the Securities
Act (other than a registration statement on Form S-8 or otherwise relating to
equity securities issuable under any employee benefit plan of Jarden).
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by Jarden or any of its Restricted
Subsidiaries pursuant to which Jarden or such Restricted Subsidiary may sell,
convey or otherwise transfer to a Receivables Subsidiary accounts receivable
(whether now existing or arising in the future) and any assets related thereto,
including without limitation, all collateral securing such accounts receivable,
all guarantees or other obligations in respect of such accounts receivable,
proceeds of such accounts receivable and all other assets that are customarily
transferred, or in respect of which security interests are customarily granted,
in connection with an asset securitization transaction involving accounts
receivable.
"Receivables Subsidiary" means an Unrestricted Subsidiary of Jarden
that engages in no activities other than in connection with financing of
accounts receivable and that is designated by the Board of Directors of Jarden
as a Receivables Subsidiary. For purposes of the foregoing and the definition of
"Unrestricted Subsidiary," the making of Standard Securitization
Undertakings by Jarden or any of its Restricted Subsidiaries shall not be deemed
inconsistent with qualifying as an Unrestricted Subsidiary. Any such designation
by the Board of Directors of Jarden shall be evidenced to the trustee by filing
with the trustee a certified copy of the resolution of the Board of Directors of
the issuer giving effect to such designation and an officers' certificate
certifying, to the best of such officer's knowledge and belief after consulting
with counsel, that such designation complied with the foregoing conditions.
"Restricted Investment" means an Investment other than a Permitted
Investment.
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"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Senior Credit Facility" means Jarden's existing credit facility as in
effect on the date of the indenture; as amended, amended and restated,
supplemented, modified, renewed, refunded, replaced or refinanced from time to
time.
"Senior Debt" means:
(1) all Indebtedness of Jarden or any Guarantor outstanding under the
Senior Credit Facility and all Hedging Obligations with respect
thereto;
(2) any other Indebtedness of Jarden or any Guarantor permitted to be
incurred under the terms of the indenture, unless the instrument
under which such Indebtedness is incurred expressly provides that
it is subordinated to any Senior Debt or on a parity with or
subordinated in right of payment to the notes or any subsidiary
guarantee; and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt
will not include:
(1) any liability for Federal, state, local or other taxes owed or
owing;
(2) any intercompany Indebtedness of Jarden or any of its Subsidiaries
to Jarden or any of its Affiliates;
(3) any trade payables;
(4) the portion of any Indebtedness that is incurred in violation of
the indenture; or
(5) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code, is
without recourse to Jarden or any Guarantor.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Standard Securitization Undertaking" means representations,
warranties, covenants and indemnities entered into by Jarden or any Restricted
Subsidiary of Jarden that are reasonably customary in accounts receivable
transactions.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) 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 of the
corporation, association or other business entity is at the time
owned or controlled, directly or indirectly, by that Person or one
or more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are that Person
or one or more Subsidiaries of that Person (or any combination
thereof).
"Tilia" means Tilia International, Inc. and its subsidiaries, Tilia,
Inc. and Tilia Canada, Inc.
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"Unrestricted Subsidiary" means any Subsidiary of Jarden that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with Jarden or any Restricted Subsidiary of Jarden
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to Jarden or such Restricted
Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of Jarden;
(3) is a Person with respect to which neither Jarden nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a)
to subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Jarden or any of its
Restricted Subsidiaries; and
(5) has at least one director on its Board of Directors that is not a
director or executive officer of Jarden or any of its Restricted
Subsidiaries and has at least one executive officer that is not a
director or executive officer of Jarden or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of Jarden as an Unrestricted Subsidiary
will be evidenced to the trustee by filing with the trustee a certified copy of
the Board Resolution giving effect to such designation and an officers'
certificate certifying that such designation complied with the preceding
conditions and was permitted by the covenant described above under the
"-Certain Covenants-Restricted Payments." If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
purposes of the indenture and (i) will be deemed to be redesignated as a
Restricted Subsidiary and (ii) any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary of Jarden as of such date and,
if such Indebtedness is not permitted to be incurred as of such date under the
covenant described under the caption "-Certain Covenants-Incurrence of
Indebtedness and Issuance of Preferred Stock," Jarden will be in default of such
covenant. The Board of Directors of Jarden may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of Jarden of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such Indebtedness
is permitted under the covenant described under the caption "-Certain
Covenants-Incurrence of Indebtedness and Issuance of Preferred Stock,"
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation. Upon any such
designation as a Restricted Subsidiary, such Subsidiary, if it is a Domestic
Subsidiary, will become a Guarantor and execute a supplemental indenture.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final
maturity, in respect of the Indebtedness, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following general discussion summarizes certain U.S. Federal income
tax consequences of the acquisition, ownership and disposition of the notes.
This discussion only deals with persons that hold notes as a capital asset
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended, or the Code, and that purchase the notes for cash at original issue at
the initial offering price. This discussion does not address the U.S. Federal
income tax consequences that may be relevant to a particular holder subject to
special treatment under certain U.S. Federal income tax laws (for example,
persons subject to the alternative minimum tax provisions of the Code). Also,
this discussion is not intended to be wholly applicable to all categories of
investors, some of which, such as dealers in securities or foreign currency,
banks, financial institutions, trusts, insurance companies, tax-exempt
organizations (employment, charitable or other), persons that hold notes as part
of a hedging or conversion transaction or a straddle, persons deemed to sell
notes under the constructive sale provisions of the Code, persons that have a
functional currency other than the U.S. dollar and investors in pass-through
entities, may be subject to special rules.
This discussion is based on the Code, the final, temporary and proposed
Treasury regulations promulgated thereunder, administrative pronouncements and
judicial decisions, all as in effect on the date hereof and all of which are
subject to change, possibly with retroactive effect. We have not requested, and
will not request, a ruling from the U.S. Internal Revenue Service, or the IRS,
with respect to any of the U.S. Federal income tax consequences described below.
There can be no assurance that the IRS will not disagree with or challenge any
of the conclusions set forth herein.
Persons considering the purchase of notes should consult their own tax
advisors concerning the application of U.S. Federal income tax laws, as well as
the laws of any state, local or foreign taxing jurisdiction, to their particular
situations.
U.S. HOLDERS
The following discussion is limited to persons that are U.S. Holders.
For these purposes, "U.S. Holder" means the beneficial owner of a note that for
U.S. Federal income tax purposes is (i) an individual who is a citizen or
resident of the United States, (ii) a corporation or other entity taxable as a
corporation that is created or organized under the laws of the United States or
any political subdivision thereof or therein, (iii) an estate the income of
which is subject to U.S. Federal income tax regardless of its source, (iv) a
trust subject to the primary supervision of a United States court and the
control of one or more U.S. persons or (v) a person whose worldwide income or
gain is otherwise subject to U.S. Federal income tax on a net income basis. If a
partnership or other entity taxable as a partnership holds the notes, the tax
treatment of a partner will generally depend on the status of the partner and
the activities of the partnership. Such partner should consult its tax advisor
as to the tax consequences.
Interest
A U.S. Holder must generally include interest on a note in its ordinary
income at the time such interest is received or accrued, in accordance with such
U.S. Holder's method of accounting for U.S. Federal income tax purposes.
Sale, Exchange or Redemption of Notes
Upon the sale, exchange or redemption of a note, a U.S. Holder
generally will recognize taxable gain or loss equal to the difference between
(i) the amount realized on such disposition and (ii) such U.S. Holder's adjusted
tax basis in the note. Notwithstanding the foregoing, any amounts received in
connection with any sale, exchange or redemption with respect to accrued
interest will not be included in the amount realized and will be treated as
ordinary interest income. A U.S. Holder's adjusted tax basis in a note generally
will equal the cost of such note less any principal payments received by such
holder.
Contingent Payments
In certain circumstances, we may be obligated to pay you amounts in
excess of the stated interest and principal payable on the notes. The obligation
to make such payments, including redemption premiums payable in certain
circumstances, may implicate the provisions of Treasury regulations relating to
"contingent payment debt instruments".
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If the notes were deemed to be contingent payment debt instruments, U.S. Holders
might, among other things, be required to accrue income on the notes prior to
the receipt of cash attributable to such income and to treat any gain recognized
on the sale or other disposition of a note as ordinary income, rather than as
capital gain which may be subject to tax at a reduced rate. The regulations
applicable to contingent payment debt instruments have not been the subject of
authoritative interpretation and therefore the scope of the regulations is not
certain. Jarden intends to take the position that the likelihood that such
payments will be made is remote and therefore the notes are not subject to the
rules governing contingent payment debt instruments. This determination will be
binding on a holder unless such holder explicitly discloses on a statement
attached to the holder's timely filed U.S. Federal income tax return for the
taxable year that includes the acquisition date of the note that such holder's
determination is different. Purchasers of notes are urged to consult their tax
advisors regarding the possible application of the contingent payment debt
instrument rules to the notes.
Information Reporting and Backup Withholding
A U.S. Holder of notes may be subject to backup withholding, currently
at a rate of 30%, but subject to gradual reduction to 28% by year 2006 and then
increasing to 31% in year 2011 (the "Applicable Backup Withholding Rate"), with
respect to "reportable payments," which includes interest and principal paid on
or the gross proceeds of a sale, exchange or redemption of the notes. The payor
of any reportable payments will be required to deduct and withhold the
Applicable Backup Withholding Rate from such payments if (i) the payee fails to
establish that it is entitled to an exemption, (ii) the payee fails to furnish
its correct Taxpayer Identification Number ("TIN") to the payor in the
prescribed manner, (iii) the IRS notifies the payor that the TIN furnished by
the payee is incorrect, (iv) the payee has failed properly to report the receipt
of reportable payments and the IRS has notified the payor that backup
withholding is required or (v) the payee fails to certify under penalties of
perjury that such payee is not subject to backup withholding. If any one of
these events occurs with respect to a U.S. Holder of notes, Jarden or its paying
or other withholding agent will be required to withhold the Applicable Backup
Withholding Rate from any payments of principal and interest on a note.
Any amount withheld from a payment to a U.S. Holder under the backup
withholding rules will be allowed as a refund or credit against such holder's
U.S. Federal income tax liability, so long as the required information is
provided timely to the IRS. Jarden, its paying agent or other withholding agent
generally will report to a U.S. Holder of notes and to the IRS the amount of any
reportable payments made in respect of the notes for each calendar year and the
amount of tax withheld, if any, with respect to such payments.
NON-U.S. HOLDERS
If you are a "Non-U.S. Holder," as defined below, this section applies
to you. A Non-U.S. Holder means any beneficial owner of a note that is not a
U.S. Holder. The rules governing the United States Federal income taxation of a
Non-U.S. Holder are complex, and no attempt will be made herein to provide more
than a summary of those rules. Special rules may apply to a Non-U.S. Holder if
such holder is a controlled foreign corporation, passive foreign investment
company or foreign personal holding company and therefore subject to special
treatment under the Internal Revenue Code. IF YOU ARE A NON-U.S. HOLDER, YOU
SHOULD CONSULT WITH YOUR OWN TAX ADVISORS TO DETERMINE THE EFFECT ON YOU OF
FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS WITH REGARD TO AN INVESTMENT IN THE
NOTES, INCLUDING ANY REPORTING REQUIREMENTS.
Interest
Subject to the discussion of backup withholding below, payments of
interest on a note to a Non-U.S. Holder generally will not be subject to U.S.
Federal income or withholding tax, provided that (i) the holder does not
actually or constructively own 10% or more of the total combined voting power of
all classes of stock of Jarden that are entitled to vote, (ii) the holder is not
(a) a controlled foreign corporation that is related to Jarden through stock
ownership or (b) a bank receiving interest on a loan entered into in the
ordinary course of business, (iii) such interest is not effectively connected
with the conduct by the Non-U.S. Holder of a trade or business within the United
States and (iv) Jarden or its paying agent receives appropriate documentation
establishing that the Non-U.S. Holder is not a U.S. person.
A Non-U.S. Holder that does not qualify for exemption from withholding
under the preceding paragraph generally will be subject to withholding of U.S.
Federal income tax at a 30% rate (or lower applicable treaty rate) on payments
of interest on the notes.
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If interest on the notes is effectively connected with the conduct by
an Non-U.S. Holder of a trade or business within the United States, such
interest will be subject to U.S. Federal income tax on a net income basis at the
rate applicable to U.S. persons generally (and, with respect to corporate
holders, may also be subject to a 30% branch profits tax). If interest is
subject to U.S. Federal income tax on a net income basis in accordance with
these rules, such payments will not be subject to U.S. withholding tax so long
as the relevant Non-U.S. Holder provides Jarden or its paying agent with the
appropriate documentation.
Sale, Exchange or Redemption of Notes
Subject to the discussion of backup withholding, any gain realized by a
Non-U.S. Holder on the sale, exchange or redemption of a note generally will not
be subject to U.S. Federal income tax, unless (i) such gain is effectively
connected with the conduct by such Non-U.S. Holder of a trade or business within
the United States, (ii) the Non-U.S. Holder is an individual who is present in
the United States for 183 days or more in the taxable year of disposition and
certain other conditions are satisfied or (iii) the Non-U.S. Holder is subject
to tax pursuant to the provisions of U.S. Federal income tax law applicable to
certain expatriates. If gain on the notes is effectively connected with the
conduct by a Non-U.S. Holder of a trade or business within the United States,
such gain will be subject to U.S. Federal income tax on a net income basis at
the rate applicable to U.S. persons generally (and, with respect to corporate
holders, may also be subject to a 30% branch profits tax).
Information Reporting and Backup Withholding
Backup withholding and information reporting generally will not apply
to payments of interest or principal made to a Non-U.S. Holder in respect of the
notes if such Non-U.S. Holder furnishes Jarden or its paying agent with
appropriate documentation of such holder's non-U.S. status.
The payment of proceeds from a Non-U.S. Holder's disposition of notes
to or through the U.S. office of any broker, domestic or foreign, will be
subject to information reporting and possible backup withholding unless such
holder certifies as to its non-U.S. status under penalties of perjury or
otherwise establishes an exemption, provided that the broker does not have
actual knowledge or reason to know that such holder is a U.S. person or that the
conditions of an exemption are not, in fact, satisfied. The payment of the
proceeds from a Non-U.S. Holder's disposition of a note to or through a non-U.S.
office of either a U.S. broker or a non-U.S. broker that is a U.S.-related
person will be subject to information reporting, but not backup withholding,
unless such broker has documentary evidence in its files that such Non-U.S.
Holder is not a U.S. person and the broker has no actual knowledge or reason to
know to the contrary, or the Non-U.S. Holder establishes an exemption. For this
purpose, a "U.S.-related person" is (i) a controlled foreign corporation for
U.S. Federal income tax purposes, (ii) a foreign person 50% or more of whose
gross income from all sources for the three-year period ending with the close of
its taxable year preceding payment (or for such part of the period that the
broker has been in existence) is derived from activities that are effectively
connected with the conduct of a U.S. trade or business or (iii) a foreign
partnership that is either engaged in the conduct of a trade or business in the
U.S. or of which 50% or more of its income or capital interests are held by U.S.
persons. Neither information reporting nor backup withholding will apply to a
payment of the proceeds of a Non-U.S. Holder's disposition of notes by or
through a non-U.S. office of a non-U.S. broker that is not a U.S.-related
person. Copies of any information returns filed with the IRS may be made
available by the IRS, under the provisions of a specific treaty or agreement, to
the taxing authorities of the country in which the Non-U.S. Holder resides.
Any amounts withheld under the backup withholding rules from a payment
to a Non-U.S. Holder will be allowed as a refund or a credit against such
Non-U.S. Holder's U.S. Federal income tax liability, provided that the requisite
procedures are followed.
Prospective purchasers of notes are urged to consult their own tax
advisors with respect to the application to their particular situations of U.S.
Federal income tax laws, as well as the laws of any state, local or foreign
taxing jurisdiction.
S-43
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the notes to reduce
amounts outstanding under our senior credit facility.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting
agreement among Jarden, the Guarantors and the underwriters, the underwriters
named below have agreed to purchase from us, severally and not jointly, the
following respective principal amounts of notes offered by this prospectus
supplement at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this prospectus supplement:
PRINCIPAL
UNDERWRITER AMOUNT OF NOTES
- ----------- ---------------
CIBC World Markets Corp............................. $18,000,000
Banc of America Securities LLC...................... $12,000,000
-----------
Total $30,000,000
===========
The Underwriting Agreement provides that the obligations of the
underwriters are subject to certain conditions precedent.
We have been advised by the underwriters that the underwriters propose
to offer the notes to prospective investors at the public offering price set
forth on the cover page of this prospectus supplement. After commencement of the
offering, the offering price and other selling terms may be changed by the
underwriters.
The notes are not listed on any securities exchange. The underwriters
have advised us that they will act as market-makers for the notes. However, the
underwriters are not obligated to do so and may discontinue any market-making at
any time without notice. No assurance can be given as to the liquidity of the
trading market for the notes.
We have agreed to indemnify the underwriters and certain controlling
persons against certain liabilities, including liabilities under the Securities
Act.
The underwriters have advised us that, pursuant to Regulation M under
the Securities Exchange Act of 1934, as amended, certain persons participating
in the offering may engage in transactions, including over-allotment,
stabilizing bids, syndicate covering transactions or the imposition of penalty
bids, which may have the effect of stabilizing or maintaining the market price
of the notes at a level above that which might otherwise prevail in the open
market. Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position. A stabilizing bid is a bid for the
purchase of notes on behalf of the underwriters for the purpose of fixing or
maintaining the price of the notes. A syndicate covering transaction is the bid
for or the purchase of notes on behalf of the underwriters to reduce a short
position incurred by the underwriters in connection with the offering. A penalty
bid is an arrangement permitting the underwriters to reclaim the selling
concession otherwise accruing to a syndicate member in connection with the
offering if the notes originally sold by such syndicate member are purchased in
a syndicate covering transaction and therefore have not been effectively placed
by such syndicate member. The underwriters are not obligated to engage in these
activities and, if commenced, any of the activities may be discontinued at any
time.
Certain of the underwriters or their respective affiliates from time to
time have provided in the past and may provide in the future investment banking,
commercial lending and financial advisory services to us in the ordinary course
of business. Bank of America, N.A., an affiliate of Banc of America Securities
LLC is a lender and the administrative agent under our senior credit facility
and expects to receive a portion of the proceeds of this offering in repayment
of amounts outstanding owed to it under the senior credit facility. Canadian
Imperial Bank of Commerce, an affiliate of CIBC World Markets Corp., is a lender
and the syndication agent under our senior credit facility.
Under Rule 2710(c)(8) of the Conduct Rules of the National Association
of Securities Dealers, Inc. (the "NASD"), the yield at which the securities are
being distributed is no lower than that recommended by a "qualified independent
underwriter" as defined in Rule 2720 of the Conduct Rules of the NASD. CIBC
World Markets Corp. will participate in this offering as a qualified independent
underwriter. In its role as qualified independent underwriter, CIBC World
Markets Corp. has performed due diligence investigations and reviewed and
participated in the
S-44
preparation of this prospectus supplement and the registration statement of
which this prospectus supplement forms a part. The independent underwriter will
not receive any additional fees for serving as a qualified independent
underwriter in connection with this offering.
We have agreed to indemnify CIBC World Markets Corp. in its role as
qualified independent underwriter against certain liabilities including
liabilities under the Securities Act. If we are unable to provide this
indemnification, we will contribute to payments CIBC World Markets Corp. may be
required to make in respect of those liabilities.
LEGAL MATTERS
The validity of the notes to be issued will be passed upon for us by
Kane Kessler, P.C., New York, New York. Certain legal matters in connection with
the offering will be passed upon for the underwriters by Latham & Watkins LLP,
New York, New York.
S-45
PROSPECTUS
JARDEN CORPORATION
$150,000,000
DEBT SECURITIES, COMMON STOCK,
PREFERRED STOCK, AND WARRANTS
---------------
We may from time to time sell up to $150,000,000 aggregate initial
offering price of one or more series of our debt securities, our common stock,
$0.01 par value per share, our preferred stock, $0.01 par value per share, our
warrants to purchase debt securities, common stock, or preferred stock, or any
combination of our debt securities, common stock, preferred stock, and warrants.
These debt securities may consist of notes, debentures or other types
of debt. We will provide specific terms of these debt securities in supplements
to this prospectus. Our payment obligations under any series of debt securities
may be guaranteed by one or more of our subsidiaries which are co-registrants.
This prospectus provides a general description of the securities we may
offer. The specific terms of the securities offered by this prospectus will be
set forth in a supplement to this prospectus and will include, among other
things:
o in the case of common stock, the number of shares, purchase price, and
terms of the offering and sale thereof;
o in the case of preferred stock, the number of shares, purchase price, the
designation and relative rights, preferences, limitations and restrictions,
and the terms of the offering and sale thereof;
o in the case of debt securities, the specific designation, aggregate
principal amount, purchase price, maturity, interest rate, time of payment
of interest, terms (if any) for the subordination or redemption thereof,
and any other specific terms of the debt securities; and
o in the case of warrants, the title, aggregate number, price at which it
will be issued, exercise price, and designation, aggregate principal amount
and terms of the securities issuable upon exercise of the warrants.
Any prospectus supplement may also add, update or change information
contained in this prospectus. You should read this prospectus, any prospectus
supplement and the additional information described under "Where You Can Find
More Information" carefully before you invest in our securities.
Our common stock trades on the New York Stock Exchange under the symbol
"JAH." On January 28, 2003, the last reported sale price of our shares on the
New York Stock Exchange was $26.06 per share.
The securities may be sold through underwriters or dealers designated
from time to time or to other purchasers directly or through agents designated
from time to time (see "Plan of Distribution").
---------------
PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 8 AND IN ANY
PROSPECTUS SUPPLEMENT FOR A DESCRIPTION OF THE RISKS YOU SHOULD CONSIDER WHEN
EVALUATING THIS INVESTMENT.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED IN THE
EXCHANGE OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JANUARY 31, 2003.
TABLE OF CONTENTS
Page
----
SUMMARY....................................................................................................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................................... 2
THE COMPANY................................................................................................... 3
RISK FACTORS.................................................................................................. 8
Reductions, cancellations, or delays in customer purchases
would adversely affect our profitability.................................................................. 8
We may be adversely affected by the trend towards retail trade consolidation................................ 9
Sales of some of our products are seasonal and weather related.............................................. 9
We depend on suppliers in Asia.............................................................................. 9
Competition in our industries may hinder our ability to execute our business
strategy, achieve profitability, or maintain relationships with existing customers........................ 10
If we fail to develop new or expand existing customer relationships, our
ability to grow our business will be impaired............................................................. 10
We cannot be certain that our product innovations and marketing successes will continue..................... 10
We may experience difficulty in integrating acquired businesses, which
may interrupt our business operations..................................................................... 11
Our operations are subject to a number of Federal, state and
local environmental regulations........................................................................... 11
We may be adversely affected by remediation obligations
mandated by applicable environmental laws................................................................. 11
We depend upon key personnel................................................................................ 11
We enter into contracts with the United States government and other governments............................. 11
Our operating results can be adversely affected by changes in the cost
or availability of raw materials.......................................................................... 12
Our business could be adversely affected because of risks which are
particular to international operations.................................................................... 12
Our performance can fluctuate with the financial condition of the retail industry........................... 12
Claims made against us based on product liability could have a material
adverse effect on our business............................................................................ 13
We depend on our patents and proprietary rights............................................................. 13
We depend on a single manufacturing facility for certain essential products................................. 13
Certain of our employees are represented by labor unions.................................................... 13
Our significant indebtedness could adversely affect our financial
health, and prevent us from fulfilling our obligations under our debt..................................... 13
We will require a significant amount of cash to service our indebtedness.
Our ability to generate cash depends on many factors beyond our control................................... 14
The indenture related to the debt securities, our 9 3/4% senior subordinated
notes due 2012, and our senior credit facility contain various covenants
which limit our management's discretion in the operation of our business.................................. 14
We may not have the ability to raise the funds necessary
to finance the change of control offer required by the
indenture related to our 9 3/4% senior subordinated notes due 2012........................................ 15
Delaware law and our rights plan may limit possible takeovers............................................... 15
The market price for our common stock is volatile........................................................... 16
We may issue a substantial amount of our common stock in connection with future
acquisitions and the sale of those shares could adversely affect our stock price.......................... 16
Our stock price may be adversely affected if our stockholders sell substantial
amounts of our common stock, or our preferred stock or warrants convertible
into our common stock, in the public market following the offering........................................ 16
Since we have broad discretion in how we use the net proceeds from this
offering, we may use such proceeds in ways with which you disagree....................................... 16
Your right to receive payments on the debt securities is junior to our existing
senior indebtedness and possibly all of our future borrowings. Further, the
guarantees of the debt securities are junior to all of the guarantors' existing
ii
senior indebtedness and possibly to all their future borrowings........................................... 16
Since the debt securities are unsecured, your right to enforce remedies
is limited by the rights of holders of secured debt....................................................... 17
Not all of our subsidiaries will guarantee our obligations under the
debt securities, and the assets of the non-guarantor subsidiaries may not be
available to make payments on the debt securities......................................................... 17
A public market for the debt securities may not develop..................................................... 17
Federal and state statutes allow courts, under specific circumstances, to void
guarantees and require security holders to return payments received from guarantors...................... 18
FORWARD LOOKING STATEMENTS.................................................................................... 19
USE OF PROCEEDS............................................................................................... 19
RATIO OF EARNINGS TO FIXED CHARGES............................................................................ 19
DESCRIPTION OF THE DEBT SECURITIES............................................................................ 20
DESCRIPTION OF CAPITAL STOCK.................................................................................. 25
DESCRIPTION OF WARRANTS....................................................................................... 25
DESCRIPTION OF SENIOR INDEBTEDNESS............................................................................ 26
PLAN OF DISTRIBUTION.......................................................................................... 30
WHERE YOU CAN FIND MORE INFORMATION........................................................................... 31
EXPERTS....................................................................................................... 31
LEGAL MATTERS................................................................................................. 32
iii
SUMMARY
This prospectus is part of a registration statement that Jarden
Corporation and the co-registrants (together, the "registrants") filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf registration process, the registrants may sell any combination
of the securities described in this prospectus in one or more offerings up to a
total dollar amount of $150,000,000. This prospectus provides you with a general
description of the securities the registrants may offer. Each time the
registrants sell securities, the registrants will provide a prospectus
supplement that will contain specific information about the terms of that
offering. To understand the terms of our securities, you should carefully read
this document with the applicable prospectus supplement, which may add, update,
or change information. Together these documents will give the specific terms of
the securities we are offering. You should also read the documents we have
incorporated by reference in this prospectus and in any prospectus supplement.
THE SECURITIES WE MAY OFFER
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under the shelf registration process, we may offer from time to time up to an
aggregate of $150,000,000 of one or more series of our debt securities, our
common stock, $0.01 par value per share, our preferred stock, $0.01 par value
per share, our warrants to purchase debt securities, common stock, or preferred
stock, or any combination of our debt securities, common stock, preferred stock,
and warrants.
DEBT SECURITIES
The terms of each series of debt securities will be detailed or
determined in the manner provided in an indenture. The particular terms of each
series of debt securities will be described in a prospectus supplement relating
to the series, including any pricing supplement. We will set forth in a
prospectus supplement (including any pricing supplement) relating to any series
of debt securities being offered, among other things, the initial offering
price, the aggregate principal amount the price or prices at which we will sell
the debt securities, any limit on the aggregate principal amount of the debt
securities, the date or dates on which we will pay the principal on the debt
securities, and the rate or rates at which the debt securities will bear
interest. We have summarized general features of our debt securities under the
section entitled "Description of Debt Securities" contained in this prospectus.
COMMON STOCK
We may issue common stock, par value $0.01 per share. Holders of our
common stock are entitled to receive dividends when declared by our board of
directors, subject to the rights of holders of our preferred shares. Each holder
of common shares is entitled to one vote per share. The holders of common shares
have no preemptive or cumulative voting rights. Our credit facility contains
restrictions on our ability to pay dividends or make other distributions.
PREFERRED STOCK
We may issue preferred stock, par value $0.01 per share, in one or more
series. Subject to the terms of our governing documents and applicable Delaware
law, our board of directors will determine the dividend, voting, conversion and
other rights and preferences of the series of preferred stock being offered.
WARRANTS
We may issue warrants for the purchase of debt securities, preferred
stock or common stock either independently or together with other securities.
Each warrant will entitle the holder to purchase the principal amount of our
debt securities, or the number of shares of preferred stock or common stock, at
the exercise price set forth in, or calculable as set forth in, the applicable
prospectus supplement
---------------
The mailing address and telephone number of our principal executive
offices are 555 Theodore Fremd Avenue, Rye, New York, 10580, (914) 967-9400.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by us with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), are hereby incorporated by reference
in this prospectus, except as superseded or modified herein:
(a) Our annual report on Form 10-K/A for the fiscal year ended
December 31, 2001;
(b) Our quarterly report on Form 10-Q/A for the period ended March 31,
2002;
(c) Our quarterly report on Form 10-Q/A for the period ended June 30,
2002;
(d) Our quarterly report on Form 10-Q for the period ended September
30, 2002;
(e) Our current report on Form 8-K, Date of Event -- December 18,
2001, filed on January 9, 2002;
(f) Our current report on Form 8-K, Date of Event -- March 28, 2002,
filed on March 28, 2002;
(g) Our current report on Form 8-K, Date of Event -- March 28, 2002,
filed on March 29, 2002;
(h) Our current report on Form 8-K, Date of Event -- April 24, 2002,
filed on May 9, 2002;
(i) Our current report on Form 8-K, Date of Event -- May 30, 2002,
filed on June 4, 2002;
(j) Our current report on Form 8-K, Date of Event -- October 17, 2002,
filed on October 24, 2002;
(k) Our current report on Form 8-K, Date of Event -- October 28, 2002,
filed on October 29, 2002;
(l) Our current report on Form 8-K, Date of Event -- November 1, 2002,
filed on November 1, 2002;
(m) Our current report on Form 8-K, Date of Event -- January 7, 2003,
filed on January 10, 2002;
(n) Our definitive proxy statement on Schedule 14A filed on April 30,
2002;
(o) The description of our common stock contained in our registration
statement on Form 8-A/A filed on May 1, 2002, including any
amendments or reports filed for the purpose of updating that
description; and
(p) The description of the preferred stock purchase rights of our
common stock contained in our registration statement on Form 8-A/A
filed on May 1, 2002, including any amendments or reports filed
for the purpose of updating that description.
All of such documents are on file with the Commission. In addition, all
documents filed by Jarden Corporation pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, subsequent to the date of this prospectus and prior
to termination of the offering are incorporated by reference in this prospectus
and are a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in any
subsequently filed document that is also incorporated by reference herein
modifies or replaces such statement. Any statements so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this prospectus.
This prospectus incorporates herein by reference important business and
financial information about us that is not included in or delivered with this
prospectus. This information is available to you without charge upon written or
oral request. If you would like a copy of any of this information, please submit
your request to Jarden Corporation, 555 Theodore Fremd Avenue, Rye, NY 10580,
Attention: Corporate Secretary, or call (914) 967-9400.
2
THE COMPANY
Jarden Corporation is a leading provider of niche consumer products
used in home food preservation. We operate two distinct business groups,
consumer products and material based. Our consumer products group markets and
distributes the FoodSaver(R) line, which is the U.S. market leader in home
vacuum packaging systems and accessories and is the leading North American
manufacturer, distributor and marketer of home canning and related products,
primarily under the Ball(R), Kerr(R) and Bernardin(R) brands. Our materials
based group is the country's largest producer of zinc strip and is a plastics
manufacturer.
During 2001, we repositioned our growth strategy to focus on consumer
products. Alltrista Consumer Products manufactures, markets and distributes a
broad line of home food preservation and preparation products that includes
recognized brand name home canning jars, jar closures and other accessories
(including fruit pectin, Fruit-Fresh(R) brand fruit protector, pickle mixes and
tomato mixes). As of April 24, 2002, through the acquisition of Tilia
International, Inc. and its subsidiaries ("Tilia"), our consumer products group
markets and distributes the FoodSaver(R) vacuum packaging system. Vacuum
packaging is the process of removing air from a container to create a vacuum,
and then sealing the container so that air cannot re-enter.
Our materials based group is comprised of three business segments:
metals, injection molded plastics, and other. Our metals business is the sole
source supplier of copper plated zinc penny blanks to both the United States
Mint and the Royal Canadian Mint. In addition, we manufacture a line of
industrial zinc items used in the plumbing, automotive, electrical component and
European architectural markets, and the Lifejacket(R) anti-corrosion system. Our
plastic injection molding business manufactures precision custom components for
major companies in the healthcare and consumer products industries including
CIBA Vision Corporation, Johnson & Johnson, Meridian Diagnostics, Inc., The
Scotts Company and Winchester Ammunition. The other segment includes the
manufacturing of non-injection molded plastic parts and other immaterial
business activities.
RECENT DEVELOPMENTS
Diamond Brands Acquisition. On November 27, 2002, we entered into an
Asset Purchase Agreement to purchase the business assets and liabilities of
Diamond Brands Operating Corp. and its affiliates ("Diamond Brands"), a leading
manufacturer and marketer of niche consumer products for domestic use including
matches, toothpicks, disposable plastic cutlery, straws, clothespins and wooden
crafts sold primarily under the Diamond Brands(R) and Forster(R) trademarks. The
acquisition of Diamond Brands has been approved in the United States Bankruptcy
Court for the District of Delaware as the exclusive plan to be voted on by the
creditors.
Our acquisition of Diamond Brands is subject to final confirmation by
the United States Bankruptcy Court for the district of Delaware,
Hart-Scott-Rodino approval, and other customary closing conditions. Although we
cannot assure you that any and all these conditions will be satisfied, at this
time, we believe that we will complete the acquisition during the first quarter
of 2003.
We intend to finance our acquisition of Diamond Brands at closing with
the combination of available cash and borrowings under our credit facility. The
purchase price for the sale and transfer of the assets shall consist of: (a) an
aggregate amount equal to the sum of the following: (i) $12,950,000 in cash,
(ii) the balance, as of the closing, of the principal amount due under a DIP
loan agreement, taking into account all payments made in respect of such
principal amount by the debtors through the closing, plus (b) at Jarden's
election, within six months after the closing (i) either $6 million in cash
payable by wire transfer in immediately available funds or (ii) shares of Jarden
common stock with an aggregate fair market value of $6 million as of the date of
delivery; and (c) the assumption of certain liabilities.
Exchange Offer. On December 4, 2002, we completed an offer to the
holders of our 9 3/4% senior subordinated notes subject to Rule 144A of the
Securities Act of 1933 to exchange those notes for our 9 3/4% senior
subordinated notes which are registered under the Securities Act of 1933, as
amended, and are substantially similar to the old notes except that the
mandatory redemption provisions and the transfer restrictions applicable to the
old notes are not applicable to the new notes. Substantially all of the
$150,000,000 aggregate principal amount of the old notes were exchanged for the
new notes.
3
CONSUMER PRODUCTS GROUP
The consumer products group is comprised of two segments: vacuum
packaging and domestic consumables.
Our domestic consumables segment manufactures, markets and distributes
a line of home food preservation products to serve value, mid-tier and premium
oriented customers, which products include home canning jars, jar closures, home
canning tools, and other accessories. These products are marketed under the
well-known Ball(R), Bernardin(R), Golden Harvest(R), and Kerr(R) brand names. We
also market and distribute related food products, including fruit pectin,
Fruit-Fresh(R) brand fruit protector, pickle mixes, tomato mixes and all-in-one
canning kits, including a jam pectin kit and jelly and salsa kits. In addition,
we market a line of housewares under the Golden Harvest(R) brand, including
tumblers, beverage tappers and other glassware.
We also provide patented vacuum packaging systems for household use
marketed under the FoodSaver(R) brand. Our seven models of compact, patented
counter-top FoodSaver(R) appliances incorporate a vacuum pump and bag sealer to
keep foods fresh and are sold at prices ranging from approximately $100 to
almost $300. We market our FoodSaver(R) appliances in tandem with our patented
FoodSaver(R) bags and rolls and complementary accessories, including canisters,
containers, lids, jar sealers and bottle stoppers.
Customers
Our customers are a diverse group of wholesalers and retailers in the
United States and Canada. Our principal customers include grocery stores, mass
merchants, warehouse clubs, and hardware stores, but we also sell through
sporting goods and outdoor stores and specialty retailers. We have been
Wal-Mart's category manager for the home canning segment since 1998. In this
role, we are responsible for the home canning section within the store,
including inventory management, the introduction of new items, and the creation
of various reports to track inventory, sales, and margins. In addition to these
channels of distribution, vacuum packaging products are sold directly to
individual consumers through direct-to-consumer channels. Our direct-to-consumer
sales have primarily been made through infomercials and catalogs.
Sales and Marketing
Our consumer products sales are made in the United States and Canada
through food brokers and manufacturer representative organizations as well as
through our internal sales force and house accounts. We employ regional sales
managers located in key geographic areas who oversee the sales and retail
activities of food brokerage firms and independent manufacturer representatives.
Distribution and Fulfillment
We utilize company-operated and independent warehouses located in
various regions of the United States and Canada to distribute our products. The
largest of these warehouses is located in Muncie, Indiana and is operated by an
outsourced provider, which utilizes highly automated packaging equipment
allowing us to maintain our efficient and effective logistics and freight
management processes. We also work with an outsourced provider for the delivery
of our products in order to ensure that as many shipments as possible are
processed as full truckloads, saving significant freight costs.
Manufacturing
We manufacture the metal closures for our home canning jars at our
Muncie, Indiana facility. Lithographed tin plated steel sheet is cut and formed
to produce the lids and bands. Liquid plastisol, which we formulate, is applied
to lids, forming an airtight seal, which is necessary for safe and effective
home canning. Finished products are packaged for integration with glass jars or
sold in multi-packs as replacement lids.
Vacuum packaging products are sourced through a network of independent
manufacturers. Appliances are currently sourced through three facilities in
China; bags and rolls are currently sourced through suppliers in Korea and the
United States; and accessories are sourced from Taiwan, China and the United
States. Our own research and development department designs and engineers
products in the United States and sets strict engineering specifications for the
third-party manufacturers. We maintain ownership over all necessary production
molds.
4
Intellectual Property
Management believes that none of our active trademarks or patents is
essential to the successful operation of our business as a whole. However, one
or more trademarks or patents may be material in relation to individual products
or product lines such as our property rights to use the Ball(R), FoodSaver(R),
Fruit-Fresh(R), Golden Harvest(R), and Kerr(R) brand names and the Bernardin(R)
trade name in connection with certain goods to be sold, including home food
preservation supplies, kitchen housewares and packaged foods for human
consumption.
We hold patents throughout many primary worldwide markets on both the
design of the FoodSaver(R) appliance itself as well as on many of its
components. Our patent on the FoodSaver(R) vacuum seal appliance expires in
2009, and our patent on FoodSaver(R) bags expires in 2005. The key elements of
the bag are a unique waffle pattern that facilitates air removal, an oxygen
barrier layer that prevents air from entering the bag and a heat resistant outer
layer to allow easy sealing without burn-through. In addition, we have
registered the VacLoc, SaverMate, VacuTop and VacuSave names with the U.S.
Patent and Trademark Office and in several countries throughout the world. In
addition, we have developed a proprietary two-piece closure system incorporating
a plastisol sealant that differentiates our jar lids from our competitors' lids.
We have pending patent applications for new technology for bags and vacuum
packaging systems that we recently acquired.
Pursuant to the terms of the 1993 distribution agreement with Ball
Corporation, we were granted a license to use the Ball(R) brand name for our
consumer products. In the event of a change of control of Jarden which has not
received the approval of a majority of our board of directors or causes us to be
controlled or majority owned by a competitor of Ball, Ball has the option to
terminate our license to use the Ball(R) brand name. Pursuant to the terms of an
agreement with Kerr Group, Inc., we have a perpetual exclusive, worldwide
license to use the Kerr(R) brand name in our consumer products division.
However, in the event of a change of control of Jarden which has not received
the approval of a majority of our board of directors, Kerr has the option to
terminate our license to use the Kerr(R) brand name.
Raw Materials
Most of our glass canning jars are supplied under an agreement with
Anchor Glass Container Corporation. Such glass materials are also available from
a variety of other sources at competitive prices. The tin plate raw material
used in the manufacture of our home canning jar lids and closures is supplied by
multiple vendors and is currently available from a variety of sources at
competitive prices. Historically, the raw materials and components that are
necessary for the manufacture of our products have been available in the
quantities that we require.
Competition
We are the leading provider of home canning products and related
accessories and our brands represent a significant portion of the sales in this
niche market. In addition to the competitors in our niche market, we compete
with companies who specialize in other food preservation mediums such as
freezing and dehydration.
Our vacuum packaging appliances compete with marketers of
"conventional" food storage solutions, such as plastic bags and containers. In
addition, our competitors include manufacturers of sealing appliances that
heat-seal bags, but, we believe, do not create a vacuum seal comparable to ours.
There are also several companies that manufacture industrial and commercial
vacuum packaging products, but we do not believe that these manufacturers have
attempted to enter the household marketplace.
MATERIALS BASED GROUP
Our materials based group is currently comprised of three business
segments: metals, injection molded plastics, and other.
METALS
We believe our zinc strip business is the largest producer of zinc
strip and fabricated products in the United States. We are the sole source
supplier of copper plated zinc penny blanks to both the United States Mint and
the Royal
5
Canadian Mint and are currently exploring opportunities with several other
countries. In addition, we manufacture a line of industrial zinc items used in
the plumbing, automotive, electrical component and European architectural
markets, and the Lifejacket(R) anti-corrosion system. Our anticorrosion zinc
Lifejacket(R) is gaining recognition as a cost-effective solution to arrest the
corrosion of the reinforcement steel within poured concrete structures. We are
affected by fluctuations in penny blank requirements of the United States
Department of the Treasury and the Federal Reserve System. Although the future
use of the penny as legal tender has been debated in recent years, management
believes that the zinc based coinage will remain an important part of the
currency system for the foreseeable future.
Sales and Marketing
Our sales and marketing staff consists of individuals with considerable
technical background in the field of metallurgy. These individuals focus on
leveraging our core capabilities in zinc metallurgy and electrochemistry to
exploit new market opportunities. The sales and marketing staff works closely
with our engineering and technical services group to deliver products to the
customer. We maintain a website which contains technical information regarding
the advantageous physical properties of zinc versus other metals.
Manufacturing
In our Greenville, Tennessee facility, we manufacture alloys of zinc
strip and fabricated zinc products in a number of configurations for our
customers. We have five lines used to slit the coils into widths specified by
customers. Many customers require less than the full master coil diameters, so
the large coils are broken down into the requested diameters at the time they
are slit. We also produce coin blanks stamped from slit coils using one of five
high-speed presses. The stamped blanks are then rimmed and put into one of three
electroplating lines where the copper coating is applied.
Raw Materials
We purchase special high-grade zinc ingot and a variety of metals,
including copper, lead, titanium, magnesium, manganese and other alloys, to
produce the zinc alloys we use in our various applications. These alloys have
been developed by our technical staff to meet the specific physical and chemical
characteristics of the finished product applications. We purchase zinc ingot
based on market prices quoted on the London Metals Exchange (month-end average
price) from a variety of suppliers. Certain customers, including the United
States Mint, provide their own purchased zinc that is utilized to manufacture
product at a toll conversion price. We purchase copper for both alloying and
plating purposes based on market prices quoted on the New York Commodities and
Metals Exchange. As with zinc ingot, the United States Mint supplies the
required copper for one-cent coin blanks. We also purchase a variety of
chemicals for production and waste treatment, primarily for use in copper
plating. Prices for chemicals are negotiated with suppliers based on market
supply and demand conditions and volume purchase levels.
INJECTION MOLDED PLASTICS
We manufacture precision custom injection molded components for major
companies in the healthcare and consumer products industries. We also own
Yorker(R) Closures, a proprietary product line of plastic closures. Products for
the healthcare industry include items such as intravenous harness components and
surgical devices. Products for manufacturers of consumer goods primarily include
packaging and sport shooting ammunition components.
Customers
We supply shotgun shell components to Winchester Ammunition and various
healthcare products (such as contact lens cases) to CIBA Vision Corporation,
Ethic-on, Inc., Johnson & Johnson, CB Fleet Company, Inc., and Meridian
Diagnostics, Inc. and consumer products for The Scotts Company, among others.
Sales and Marketing
We concentrate our marketing efforts in those markets that require high
levels of precision, quality, and engineering expertise. There is potential for
continued growth in all product lines, especially in the healthcare market,
where our quality, service and "clean room" molding operations are critical
competitive factors.
6
Manufacturing
We manufacture at three facilities located in Greenville, South
Carolina; Reedsville, Pennsylvania; and Springfield, Missouri. The
injection-molding process involves converting plastic resin pellets to a fluid
state through elevated temperature and pressure, at which point the resin is
injected into a mold where it is then formed into a finished part. Molded parts
are usually small, intricate components that are produced using multi-cavity
tooling. Post-molding operations employ robotics and automation for assembly and
packaging.
Raw Materials
We purchase resin from regular commercial sources of supply and, in
most cases, multiple sources. The supply and demand for plastic resins are
subject to cyclical and other market factors.
Competition
The market for injection molded plastics is highly competitive. We
concentrate our marketing efforts in those markets that require high levels of
precision, quality, engineering expertise and cleanliness. We have
differentiated ourselves from our competitors by developing long-lasting
relationships with a number of specialty tooling manufacturers and by possessing
strong design capabilities. We believe that the quality and cleanliness of our
facilities provides another competitive advantage for us. As a result, we
believe that we will continue to capture new injection molding programs as they
come to market, as well as benefit from continued outsourcing trends among
original equipment manufacturers.
OTHER
Effective November 26, 2001, we sold our underperforming thermoformed
plastics operations consisting of the assets of our Triangle, TriEnda and
Synergy World divisions (the "TPD Assets") to Wilbert, Inc. for $21.0 million in
cash, a $1.9 million noninterest-bearing one-year note, and the assumption of
certain identified liabilities. We recorded a pre-tax loss of $121.1 million in
2001 related to the sale.
Effective November 1, 2001, we sold our majority interest in Microlin,
LLC, a developer of proprietary battery and fluid delivery technology, for
$1,000 in cash plus contingent consideration based upon future performance
through December 31, 2012 and the cancellation of future funding requirements.
We recorded a pre-tax loss of $1.4 million in 2001 related to the sale.
Currently, our other business primarily manufactures thermoformed
plastic white goods for a variety of customers in our Fort Smith, Arkansas
facility. We also manufacture and sell extruded plastic sheet and roll stock
products in smooth, textured and laminated finishes for a variety of customers.
Additionally, we produce plastic tables for original equipment manufacturers in
our Fort Smith plant and have a proprietary line of tables selling under the
Vision(TM) brand that are primarily sold to the hospitality and institutional
markets. Our customers are primarily other equipment manufacturers.
Our products are produced through a thermoforming process.
Thermoforming is an operation in which plastic sheet is converted into a formed
product through single- or twin-sheet vacuum or pressure formed in conjunction
with the application of heat. After the product is formed, the process of
removing the excess material, or trimming, is generally performed by automated
equipment programmed to execute the appropriate steps to produce the finished
part to the customer's specifications. We purchase resin directly for use in the
manufacture of extruded sheet and also purchase plastic sheet from third-party
suppliers in those instances where we are unable to provide for our needs
internally. These raw materials are obtained from regular commercial sources of
supply and, in most cases, multiple sources. The supply and demand for plastic
resins are subject to cyclical and other market factors. Certain of our
customers purchase the resin on our behalf, thereby providing us protection from
price fluctuations.
GOVERNMENT CONTRACTS
We enter into contracts with the United States Government which contain
termination provisions customary for government contracts. See "Metals" under
the materials based group discussion above. The United States Government retains
the right to terminate such contracts at its convenience. However, if the
contract is terminated, we
7
are entitled to be reimbursed for allowable costs and profits to the date of
termination relating to authorized work performed to such date. The United
States Government contracts are also subject to reduction or modification in the
event of changes in government requirements or budgetary constraints. Since
entering into a contract with us in 1981, the United States Government has not
terminated the penny blank supply arrangement.
ENVIRONMENTAL MATTERS
Our operations are subject to Federal, state and local environmental
and health and safety laws and regulations, including those that impose
workplace standards and regulate the discharge of pollutants into the
environment and establish standards for the handling, generation, emission,
release, discharge, treatment, storage and disposal of materials and substances
including solid and hazardous wastes. We believe that we are in material
compliance with such laws and regulations. Further, the cost of maintaining
compliance has not, and we believe, in the future, will not, have a material
adverse effect on our business, results of operations or financial condition.
Due to the nature of our operations and the frequently changing nature of
environmental compliance standards and technology, we cannot predict with any
certainty that future material capital or operating expenditures will not be
required in order to comply with applicable environmental laws and regulations.
In addition to operational standards, environmental laws also impose
obligations on various entities to clean up contaminated properties or to pay
for the cost of such remediation, often upon parties that did not actually cause
the contamination. We have attempted to limit our exposure to such liabilities
through contractual indemnities and other mechanisms. We do not believe that any
of our existing remediation obligations, including at third-party sites where we
have been named a potentially responsible party, will have a material adverse
effect upon our business, results of operations or financial condition.
EMPLOYEES
As of September 30, 2002, we employed approximately 950 people.
Approximately 215 union workers are covered by two collective bargaining
agreements at our metals and domestic consumables manufacturing facilities.
These agreements expire at the domestic consumables facility (Muncie, Indiana)
on October 15, 2006, and at the metals facility (Greeneville, Tennessee) on
October 4, 2003.
We have not experienced a work stoppage during the past five years.
Management believes that its relationships with our employees and collective
bargaining unions are satisfactory.
Our principal executive offices are located at 555 Theodore Fremd
Avenue, Rye, New York, 10580.
RISK FACTORS
Investing in our securities involves risks, including the risks
described in this prospectus, in any prospectus supplement and in the other
documents that are incorporated herein by reference. You should carefully
consider the risks factors together with all of the other information and data
included in this prospectus, any prospectus supplement and the documents that
are incorporated herein by reference before you decide to acquire any
securities. If any of the following risks actually occur, our business,
financial condition or results of operation may suffer.
RISKS RELATING TO JARDEN
REDUCTIONS, CANCELLATIONS, OR DELAYS IN CUSTOMER PURCHASES WOULD ADVERSELY
AFFECT OUR PROFITABILITY.
Customers in our consumer products group, and many customers in our
materials based group, generally do not enter into long-term contracts or
commitments with us. As a result, these customers may cancel their orders,
change purchase quantities from forecast volumes, or delay purchases for a
number of reasons beyond our control. Significant or numerous cancellations,
reductions, or delays in purchases by customers could have a material adverse
effect on our business, results of operations and financial condition. In
addition, because many of our costs are fixed, a reduction in customer demand
could have an adverse affect on our gross profit margins and operating income.
Sales to one customer in our consumer products group, Wal-Mart Stores,
Inc. and its affiliates, accounted for approximately 8% of our 2001 consolidated
net sales and approximately 17% of our 2001 consolidated net sales on a
8
pro forma basis. In addition, sales to one customer in our materials based group
accounted for approximately 8% of our 2001 consolidated net sales and
approximately 6% of our 2001 consolidated net sales on a pro forma basis. A
significant reduction in purchases from either of these customers could have a
material adverse effect on our business, results of operations and financial
condition.
WE MAY BE ADVERSELY AFFECTED BY THE TREND TOWARDS RETAIL TRADE CONSOLIDATION.
With the growing trend towards retail trade consolidation, we are
increasingly dependent upon key retailers whose bargaining strength is growing.
Our consumer products businesses may be negatively affected by changes in the
policies of our retailer customers, such as inventory destocking, limitations on
access to shelf space, price demands and other conditions.
SALES OF SOME OF OUR PRODUCTS ARE SEASONAL AND WEATHER RELATED.
Sales of certain of our products, particularly our consumer products,
are seasonal. Sales of our home canning products generally reflect the pattern
of the growing season, and sales of our FoodSaver(R) products generally are
strongest in the fourth quarter preceding the holiday season. Sales of these
products may be negatively impacted by unfavorable weather conditions and other
market trends. Periods of drought, for example, may adversely affect the supply
and price of fruit, vegetables, and other foods available for home canning.
Sales of our consumer products may also be adversely affected by the trend
toward decreasing prices and increasing quality of purchased preserved food
products. Either or both of these factors could have a material adverse effect
on our business, results of operations and financial condition.
WE DEPEND ON SUPPLIERS IN ASIA.
The vast majority of our FoodSaver(R) products are manufactured by
third party suppliers in China and Korea. Any adverse change in, among other
things, any of the following could have a material adverse effect on our
business, results of operations and financial condition:
o our relationship with these suppliers;
o the financial condition of these suppliers;
o our ability to import outsourced products; or
o these suppliers' ability to manufacture and deliver outsourced
products on a timely basis.
We cannot assure you that we could quickly or effectively replace any
of our suppliers if the need arose, and we cannot assure you that we could
retrieve tooling and molds possessed by any of our suppliers. Our dependence on
these few suppliers could also adversely affect our ability to react quickly and
effectively to changes in the market for our products. In addition,
international manufacturing is subject to significant risks, including, among
other things:
o labor unrest;
o political instability;
o restrictions on transfer of funds;
o domestic and international customs and tariffs;
o unexpected changes in regulatory environments; and
o potentially adverse tax consequences.
Labor in China has historically been readily available at relatively
low cost as compared to labor costs applicable in other nations. China has
experienced rapid social, political and economic change in recent years. We
9
cannot assure you that labor will continue to be available to us in China at
costs consistent with historical levels. A substantial increase in labor costs
in China could have a material adverse effect on our business, results of
operations and financial condition. Although China currently enjoys "most
favored nation" trading status with the United States, the U.S. government has
in the past proposed to revoke such status and to impose higher tariffs on
products imported from China. We cannot assure you that our business will not be
affected by the aforementioned risks, each of which could have a material
adverse effect on our business, results of operations and financial condition.
COMPETITION IN OUR INDUSTRIES MAY HINDER OUR ABILITY TO EXECUTE OUR BUSINESS
STRATEGY, ACHIEVE PROFITABILITY, OR MAINTAIN RELATIONSHIPS WITH EXISTING
CUSTOMERS.
We operate in highly competitive industries. We compete against
numerous other domestic and foreign companies, many of which are more
established in their industries and have substantially greater revenue or
resources than we do. We also face competition from the manufacturing operations
of our current and potential customers in our materials based group. A shift
away from outsourcing on behalf of our current or potential customers could have
a material adverse effect on our business, results of operations and financial
condition. Competition could cause price reductions, reduced profits or losses,
or loss of market share, any of which could have a material adverse effect on
our business.
To compete effectively in the future in the consumer products industry,
among other things, we must:
o maintain strict quality standards;
o develop new products that appeal to consumers; and
o deliver products on a reliable basis at competitive prices.
To compete effectively in the future in the materials based industry,
among other things, we must:
o provide technologically advanced manufacturing services;
o maintain strict quality standards;
o respond flexibly and rapidly to customers' design and schedule
changes; and
o deliver products on a reliable basis at competitive prices.
Our inability to do any of these things could have a material adverse
effect on our business, results of operations and financial condition.
IF WE FAIL TO DEVELOP NEW OR EXPAND EXISTING CUSTOMER RELATIONSHIPS, OUR ABILITY
TO GROW OUR BUSINESS WILL BE IMPAIRED.
Growth in our consumer products and materials based groups depends to a
significant degree upon our ability to develop new customer relationships and to
expand existing relationships with current customers. We cannot guarantee that
new customers will be found, that any such new relationships will be successful
when they are in place, or that business with current customers will increase.
Failure to develop and expand such relationships could have a material adverse
effect on our business, results of operations and financial condition.
WE CANNOT BE CERTAIN THAT OUR PRODUCT INNOVATIONS AND MARKETING SUCCESSES WILL
CONTINUE.
We believe that our future success will depend, in part, upon our
ability to continue to introduce innovative designs in our existing products and
to develop, manufacture and market new products. We cannot assure you that we
will be successful in the introduction, marketing and manufacturing of any new
products or product innovations, or develop and introduce in a timely manner
innovations to our existing products which satisfy customer needs or achieve
market acceptance. Our failure to develop new products and introduce them
successfully and in a timely manner would harm our ability to grow our business
and could have a material adverse effect on our business, results of operations
and financial condition.
10
WE MAY EXPERIENCE DIFFICULTY IN INTEGRATING ACQUIRED BUSINESSES, WHICH MAY
INTERRUPT OUR BUSINESS OPERATIONS.
We intend to grow through the acquisition of additional companies,
including the proposed acquisition of the business assets of Diamond Brands. We
expect to face competition for acquisition candidates, which may limit the
number of opportunities and may lead to higher acquisition prices. There can be
no assurance that we will be able to identify, acquire, or manage profitably
additional businesses or to integrate successfully any acquired businesses into
our existing business without substantial costs, delays or other operational or
financial difficulties. Further, acquisitions involve a number of special risks,
including failure of the acquired business to achieve expected results,
diversion of management's attention, failure to retain key personnel of the
acquired business and risks associated with unanticipated events or liabilities,
some or all of which could have a material adverse effect on our business,
results of operations and financial condition.
OUR OPERATIONS ARE SUBJECT TO A NUMBER OF FEDERAL, STATE AND LOCAL ENVIRONMENTAL
REGULATIONS.
Our operations are subject to Federal, state and local environmental
and health and safety laws and regulations including those that impose workplace
standards and regulate the discharge of pollutants into the environment and
establish standards for the handling, generation, emission, release, discharge,
treatment, storage and disposal of materials and substances including solid and
hazardous wastes. We believe that we are in material compliance with such laws
and regulations and that the cost of maintaining compliance will not have a
material adverse effect on our business, results of operations or financial
condition. While we do not anticipate having to make, and historically have not
had to make, significant capital expenditures in order to comply with applicable
environmental laws and regulations, due to the nature of our operations and the
frequently changing nature of environmental compliance standards and technology,
we cannot predict with any certainty that future material capital expenditures
will not be required.
WE MAY BE ADVERSELY AFFECTED BY REMEDIATION OBLIGATIONS MANDATED BY APPLICABLE
ENVIRONMENTAL LAWS.
In addition to operational standards, environmental laws also impose
obligations on various entities to clean up contaminated properties or to pay
for the cost of such remediation, often upon parties that did not actually cause
the contamination. Accordingly, we may become liable, either contractually or by
operation of law, for remediation costs even if the contaminated property is not
presently owned or operated by us, is a landfill or other location where we have
disposed wastes, or if the contamination was caused by third parties during or
prior to our ownership or operation of the property. Given the nature of the
past industrial operations conducted by us and others at these properties, there
can be no assurance that all potential instances of soil or groundwater
contamination have been identified, even for those properties where an
environmental site assessment has been conducted. We do not believe that any of
our existing remediation obligations, including at third-party sites where we
have been named a potentially responsible party, will require material capital
or operating expenditures or will otherwise have a material adverse effect upon
our business, results of operations or financial condition. However, future
events, such as changes in existing laws or policies or their enforcement, or
the discovery of currently unknown contamination, may give rise to additional
remediation liabilities that may be material.
WE DEPEND UPON KEY PERSONNEL.
We are highly dependent on the continuing efforts of our executive
officers, including Martin E. Franklin, our Chairman and Chief Executive
Officer, and Ian G.H. Ashken, our Vice Chairman and Chief Financial Officer, and
we likely will depend on the senior management of any significant business we
acquire in the future. Our business, results of operations and financial
condition could be materially adversely affected by the loss of any of these
persons and the inability to attract and retain qualified replacements.
WE ENTER INTO CONTRACTS WITH THE UNITED STATES GOVERNMENT AND OTHER GOVERNMENTS.
We have entered into a contract with the United States government to
supply penny blanks to the United States Mint. We have also entered into a
contract with the Canadian government to supply penny blanks to the Royal
Canadian Mint. These contracts contain termination provisions customary for
government contracts. The United States government and Canadian government
retain the right to terminate these contracts at their convenience. These
contracts
11
are also subject to reduction or modification in the event of changes in
government requirements or budgetary constraints.
Our largest metals customer is the United States Mint, which comprised
approximately 8% of our 2001 consolidated net sales (approximately 6% on a pro
forma basis). The United States Mint announced in the fourth quarter of 2001
that it was implementing an inventory reduction program for all coinage. In
addition, several times in recent years, proposed legislation has been
introduced which, if passed, could reduce or eliminate the circulation of the
penny. If production, use or demand for the U.S. penny is reduced, it could have
a material adverse effect on our business, results of operations and financial
condition.
OUR OPERATING RESULTS CAN BE ADVERSELY AFFECTED BY CHANGES IN THE COST OR
AVAILABILITY OF RAW MATERIALS.
Pricing and availability of raw materials for use in our businesses can
be volatile due to numerous factors beyond our control, including general,
domestic and international economic conditions, labor costs, production levels,
competition, import duties and tariffs and currency exchange rates. This
volatility can significantly affect the availability and cost of raw materials
for us, and may, therefore, have a material adverse effect on our business,
results of operations and financial condition.
During periods of rising prices of raw materials, there can be no
assurance that we will be able to pass any portion of such increases on to
customers. Conversely, when raw material prices decline, customer demands for
lower prices could result in lower sale prices and, to the extent we have
existing inventory, lower margins. As a result, fluctuations in raw material
prices could have a material adverse effect on our business, results of
operations and financial condition.
Some of the products we manufacture require particular types of glass,
plastic, metal or other materials. Supply shortages for a particular type of
material can delay production or cause increases in the cost of manufacturing
our products. This could have a material adverse effect on our business, results
of operations and financial condition.
OUR BUSINESS COULD BE ADVERSELY AFFECTED BECAUSE OF RISKS WHICH ARE PARTICULAR
TO INTERNATIONAL OPERATIONS.
On a pro forma basis, approximately 10.8% of Jarden's net sales in 2001
were derived from sales outside of the United States. In addition, we anticipate
that international sales will be a growth area for our consumer products
business. International sales (and the international operations of our
customers) are subject to inherent risks which could adversely affect us,
including, among other things:
o fluctuations in the value of currencies;
o unexpected changes in and the burdens and costs of compliance with
a variety of foreign laws;
o political and economic instability;
o increases in duties and taxation; and
o reversal of the current policies (including favorable tax and
lending policies) encouraging foreign investment or foreign trade
by our host countries.
OUR PERFORMANCE CAN FLUCTUATE WITH THE FINANCIAL CONDITION OF THE RETAIL
INDUSTRY.
We sell our consumer products to retailers, including food, hardware,
catalog and mass merchants, in the United States and Canada. A significant
deterioration in the financial condition of our major customers could have a
material adverse effect on our sales and profitability. We continually monitor
and evaluate the credit status of our customers and attempt to adjust sales
terms as appropriate. Despite these efforts, a bankruptcy filing by a key
customer could have a material adverse effect on our business, results of
operations and financial condition.
In addition, as a result of the desire of retailers to more closely
manage inventory levels, there is a growing trend among retailers to make
purchases on a "just-in-time" basis. This requires us to shorten our lead time
for
12
production in certain cases and more closely anticipate demand, which could in
the future require the carrying of additional inventories.
CLAIMS MADE AGAINST US BASED ON PRODUCT LIABILITY COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS.
As a producer and marketer of consumer products, we are subject to the
risk of claims for product liability. We maintain product liability insurance,
but there is a risk that our coverage will not be sufficient to insure against
all claims which may be brought against us, or that we will not be able to
maintain that coverage or obtain additional insurance covering existing or new
products. If a product liability claim exceeding our insurance coverage were to
be successfully asserted against us, it could have a material adverse effect on
our business, results of operations and financial condition.
WE DEPEND ON OUR PATENTS AND PROPRIETARY RIGHTS.
Our success with our proprietary products depends, in part, on our
ability to protect our current and future technologies and products and to
defend our intellectual property rights. If we fail to adequately protect our
intellectual property rights, competitors may manufacture and market products
similar to ours. We cannot be sure that we will receive patents for any of our
patent applications or that any existing or future patents that we receive or
license will provide competitive advantages for our products. We also cannot be
sure that competitors will not challenge, invalidate or avoid the application of
any existing or future patents that we receive or license. In addition, patent
rights may not prevent our competitors from developing, using or selling
products that are similar or functionally equivalent to our products.
Furthermore, the patents we maintain on the bags used for vacuum sealing expire
in 2005 and the patents we maintain on our home vacuum packaging systems expire
in 2009. We are currently applying for patents on new bags and vacuum packaging
systems that we recently acquired.
WE DEPEND ON A SINGLE MANUFACTURING FACILITY FOR CERTAIN ESSENTIAL PRODUCTS.
Certain of our products, including some using specially designed
machines and proprietary cutting technology, are manufactured at a sole
company-owned manufacturing facility. These facilities are subject to the normal
hazards that could result in material damage to such facilities. Damage to any
of these facilities, or prolonged interruption in the operations of any of these
facilities for repairs or other reasons, could have a material adverse effect on
our business, results of operations and financial condition.
CERTAIN OF OUR EMPLOYEES ARE REPRESENTED BY LABOR UNIONS.
Approximately 215 of our employees are covered by collective bargaining
agreements. These agreements expire at our domestic consumables facility
(Muncie, Indiana) on October 15, 2006 and at our metals facility (Greeneville,
Tennessee) on October 4, 2003. While we have not experienced a work stoppage,
slowdown or strike during the past five years and management believes that its
relationships with our collective bargaining units are good, no assurance can be
made that we will not experience a work stoppage, slowdown or strike in the
future. A work stoppage, slowdown or strike by our employees, or the employees
of our suppliers or customers, could have a material adverse effect on our
business, results of operations and financial condition.
OUR SIGNIFICANT INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH, AND
PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER OUR DEBT.
We have a significant amount of indebtedness and will incur more debt
if we close the proposed acquisition of Diamond Brands and/or complete a debt
offering. Our significant indebtedness could:
o make it more difficult for us to satisfy our obligations with
respect to the debt securities;
o increase our vulnerability to general adverse economic and
industry conditions;
o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures, acquisitions and investments and other general
corporate purposes;
13
o limit our flexibility in planning for, or reacting to, changes in
our business and the markets in which we operate;
o place us at a competitive disadvantage compared to our competitors
that have less debt; and
o limit, among other things, our ability to borrow additional funds.
The following table sets forth our total debt, total stockholders'
equity, total capitalization and ratio of debt to total capitalization:
September 30, 2002
------------------
(Unaudited)
(Dollars in Thousands)
Total debt $217,290
Total stockholders' equity 69,789
--------------------------
Total capitalization $287,079
==========================
Ratio of debt to total 76%
capitalization
The terms of our senior credit facility, the indenture that will govern
the debt securities, and the indenture governing our 9 3/4% senior subordinated
notes due 2012 allow us to issue and incur additional debt upon satisfaction of
certain conditions. See "Description of Senior Indebtedness" for a description
of our senior credit facility. If new debt is added to current debt levels, the
related risks described above could increase.
WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH TO SERVICE OUR INDEBTEDNESS. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make payments on and to refinance our indebtedness,
including the debt securities, our 9 3/4% senior subordinated notes due 2012,
and amounts borrowed under our senior credit facility, and to fund planned
capital expenditures and expansion efforts and strategic acquisitions we may
make in the future, if any, will depend on our ability to generate cash in the
future. This, to a certain extent, is subject to general economic, financial,
competitive and other factors that are beyond our control.
Based on our current level of operations, we believe our cash flow from
operations, together with available cash and available borrowings under our
senior credit facility, will be adequate to meet future liquidity needs for at
least the next twelve months. However, we cannot assure you that our business
will generate sufficient cash flow from operations in the future, that our
currently anticipated growth in revenues and cash flow will be realized on
schedule or that future borrowings will be available to us under the senior
credit facility in an amount sufficient to enable us to service indebtedness,
including the debt securities, or to fund other liquidity needs. We may need to
refinance all or a portion of our indebtedness, including the debt securities,
our 9 3/4% senior subordinated notes due 2012, and our senior credit facility,
on or before maturity. We cannot assure you that we will be able to do so on
commercially reasonable terms or at all.
THE INDENTURE RELATED TO THE DEBT SECURITIES, OUR 9 3/4% SENIOR SUBORDINATED
NOTES DUE 2012, AND OUR SENIOR CREDIT FACILITY CONTAIN VARIOUS COVENANTS WHICH
LIMIT OUR MANAGEMENT'S DISCRETION IN THE OPERATION OF OUR BUSINESS.
Our senior credit facility, the indenture related to our 9 3/4% senior
subordinated notes due 2012, and the indenture related to the debt securities
contain various provisions that limit our management's discretion by restricting
our and our subsidiaries' ability to, among other things:
o incur additional indebtedness;
14
o pay dividends or distributions on, or redeem or repurchase,
capital stock;
o make investments;
o engage in transactions with affiliates;
o incur liens;
o transfer or sell assets; and
o consolidate, merge or transfer all or substantially all of our
assets.
In addition, our senior credit facility requires us to meet certain
financial ratios. Any failure to comply with the restrictions of our senior
credit facility, the indenture related to our 9 3/4% senior subordinated notes
due 2012, the indenture related to the debt securities or any other subsequent
financing agreements may result in an event of default. An event of default may
allow the creditors, if the agreements so provide, to accelerate the related
debt as well as any other debt to which a cross-acceleration or cross-default
provision applies. In addition, the lenders may be able to terminate any
commitments they had made to supply us with further funds.
WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE CHANGE
OF CONTROL OFFER REQUIRED BY THE INDENTURE RELATED TO OUR 9 3/4% SENIOR
SUBORDINATED NOTES DUE 2012.
Upon the occurrence of certain specific kinds of change of control
events, we will be required to offer to repurchase all outstanding notes under
the indenture related to our 9 3/4% senior subordinated notes due 2012. However,
it is possible that we will not have sufficient funds at the time of the change
of control to make the required repurchase of these notes. In addition,
restrictions in our senior credit facility prohibit repurchases of the notes
unless a waiver is obtained from the lenders or our senior credit facility is
repaid in full. If we fail to repurchase the notes following a change of
control, we will be in default under the indenture related to the notes, which
will result in a cross-default under our senior credit facility. Any future
debt, including the debt securities, which we incur may also contain
restrictions on repayment of the notes. In addition, certain important corporate
events, such as leveraged recapitalizations, that would increase the level of
our indebtedness would not constitute a change of control under the indenture
related to the notes.
RISKS RELATED TO OUR COMMON STOCK
DELAWARE LAW AND OUR RIGHTS PLAN MAY LIMIT POSSIBLE TAKEOVERS.
Our certificate of incorporation makes us subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law. In general,
Section 203 prohibits publicly-held Delaware corporations to which it applies
from engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved in
a prescribed manner. This provision could discourage others from bidding for our
shares and could, as a result, reduce the likelihood of an increase in our stock
price that would otherwise occur if a bidder sought to buy our stock.
We have adopted a rights plan that provides that shares of our common
stock have associated preferred stock purchase rights. These rights become
exercisable and detachable from the associated common stock only on the tenth
day following a public announcement that a person or group has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of our common stock or on the tenth business day (or such
later date as our board of directors will determine) following the commencement
of a tender offer or exchange offer that would result in a person or group
holding 15% or more of the outstanding shares of our common stock. The rights
entitle our stockholders, other than the person or entity that has acquired or
made an exchange or tender offer for 15% or more of our outstanding common
stock, to purchase shares of our series A junior participating preferred stock
or other capital stock and, in certain circumstances, would allow our
stockholders to acquire capital stock in an entity that acquires our company.
The exercise of these rights would make the acquisition of Jarden by a third
party more expensive to that party and has the effect of discouraging third
parties from acquiring our company without the
15
approval of our board of directors, which has the power to redeem these rights
and prevent their exercise. The preferred stock purchase rights are not
presently exercisable and will expire at the close of business on March 22,
2003, unless earlier redeemed by us.
THE MARKET PRICE FOR OUR COMMON STOCK IS VOLATILE.
The market price for our common stock may be highly volatile. We
believe that a variety of factors, including announcements by us or our
competitors, quarterly variations in financial results, trading volume, general
market trends and other factors, could use the market price of our common stock
to fluctuate substantially. Additionally, the market in general, and our common
stock in particular, may be subject to increased volatility due to general
economic conditions and the terrorist attacks in New York and Washington, D.C.
and any resulting conflicts.
WE MAY ISSUE A SUBSTANTIAL AMOUNT OF OUR COMMON STOCK IN CONNECTION WITH FUTURE
ACQUISITIONS AND THE SALE OF THOSE SHARES COULD ADVERSELY AFFECT OUR STOCK
PRICE.
As part of our growth strategy, we anticipate issuing additional shares
of our common stock, preferred stock, and warrants. We may file other shelf
registration statements with the Securities and Exchange Commission that we may
use to sell shares of our common stock preferred stock, and warrants from time
to time in connection with acquisitions. To the extent that we are able to grow
through acquisitions for stock or warrants to purchase our stock, the number of
outstanding shares of common stock and/or preferred stock that will be eligible
for sale in the future is likely to increase substantially. Persons receiving
warrants or shares of our common or preferred stock in connection with these
acquisitions may be more likely to sell large quantities of their warrants and
stock which may influence the price of our common stock. In addition, the
potential issuance of additional shares in connection with anticipated
acquisitions could lessen demand for our common stock and result in a lower
price than would otherwise be obtained.
OUR STOCK PRICE MAY BE ADVERSELY AFFECTED IF OUR STOCKHOLDERS SELL SUBSTANTIAL
AMOUNTS OF OUR COMMON STOCK, OR OUR PREFERRED STOCK OR WARRANTS CONVERTIBLE INTO
OUR COMMON STOCK, IN THE PUBLIC MARKET FOLLOWING THE OFFERING.
If our stockholders sell substantial amounts of our common stock, or our
preferred stock or warrants convertible into our common stock, in the public
market following this offering, the market price of our common stock could fall.
These sales might make it more difficult for us to sell equity or equity-related
securities in the future at a time and price that we deem appropriate and may
require us to issue greater amounts of our common stock to finance such
acquisition. Additional shares sold in this offering or to finance acquisitions
may dilute our earnings per share if the new operations' earnings are
disappointing.
SINCE WE HAVE BROAD DISCRETION IN HOW WE USE THE NET PROCEEDS FROM THIS
OFFERING, WE MAY USE SUCH PROCEEDS IN WAYS WITH WHICH YOU DISAGREE.
We have not allocated specific amounts of the net proceeds from this
offering to any specific purpose. While we expect to use a portion of the net
proceeds from this offering to pay down our credit facility, our credit facility
will permit us to re-borrow that money at later times. Accordingly, our
management will have significant flexibility in applying the net proceeds of
this offering. The failure of management to use such funds effectively could
have a material adverse effect on our business, financial condition and
operating results.
RISKS RELATING TO THE DEBT SECURITIES
YOUR RIGHT TO RECEIVE PAYMENTS ON THE DEBT SECURITIES IS JUNIOR TO OUR EXISTING
SENIOR INDEBTEDNESS AND POSSIBLY ALL OF OUR FUTURE BORROWINGS. FURTHER, THE
GUARANTEES OF THE DEBT SECURITIES ARE JUNIOR TO ALL OF THE GUARANTORS' EXISTING
SENIOR INDEBTEDNESS AND POSSIBLY TO ALL THEIR FUTURE BORROWINGS.
The debt securities and the guarantees rank behind all of our and the
guarantors' existing senior indebtedness and all of our and the guarantors'
future senior indebtedness. See "Description of Senior Indebtedness" for a
description of our senior credit facility. As of September 30, 2002, the debt
securities and the guarantees were subordinated to approximately $53 million of
senior debt. In addition, our senior credit facility permitted up to
approximately $46 million of additional borrowings, subject to compliance with
the covenants and conditions to borrowing under the senior credit facility,
which borrowings would be senior to the debt securities and the guarantees. We
will be permitted to borrow substantial additional indebtedness, including
senior debt, in the future.
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As a result of this subordination, upon any distribution to our
creditors or the creditors of the guarantors in a bankruptcy, liquidation or
reorganization or similar proceedings relating to us or the guarantors or our or
the guarantors' property, the holders of our senior debt and the senior debt of
the guarantors will be entitled to be paid in full in cash before any payment
may be made with respect to the debt securities or the guarantees.
In addition, all payments on the debt securities and the guarantees
will be blocked in the event of a payment default on senior debt and may be
blocked for up to 179 consecutive days in the event of certain non-payment
defaults on designated senior debt.
In the event of a bankruptcy, liquidation or reorganization or similar
proceeding relating to us or the guarantors, the indenture relating to the debt
securities will require that amounts otherwise payable to holders of the debt
securities in a bankruptcy or similar proceeding be paid to holders of senior
debt instead until the holders of senior debt are paid in full. As a result,
holders of the debt securities may not receive all amounts owed to them and may
receive less, ratably, than holders of trade payables and other unsubordinated
indebtedness in any such proceeding.
SINCE THE DEBT SECURITIES ARE UNSECURED, YOUR RIGHT TO ENFORCE REMEDIES IS
LIMITED BY THE RIGHTS OF HOLDERS OF SECURED DEBT.
In addition to being contractually subordinated to all existing and
future senior indebtedness, our obligations under the debt securities will be
unsecured while obligations under our senior credit facility will be secured by
substantially all of our assets and those of our subsidiaries. If we become
insolvent or are liquidated, or if payment under the senior credit facility is
accelerated, the lenders under the senior credit facility are entitled to
exercise the remedies available to a secured lender under applicable law. These
lenders have a claim on all assets securing the senior credit facility before
the holders of unsecured debt, including the debt securities.
NOT ALL OF OUR SUBSIDIARIES WILL GUARANTEE OUR OBLIGATIONS UNDER THE DEBT
SECURITIES, AND THE ASSETS OF THE NON-GUARANTOR SUBSIDIARIES MAY NOT BE
AVAILABLE TO MAKE PAYMENTS ON THE DEBT SECURITIES.
Our present and future domestic restricted subsidiaries will guarantee
the debt securities. Payments on the debt securities are only required to be
made by us and the subsidiary guarantors. As a result, no payments are required
to be made from assets of subsidiaries that do not guarantee the debt
securities, unless those assets are transferred by dividend or otherwise to us
or a subsidiary guarantor. On a pro forma basis, as of and for the year ended
December 31, 2001, the aggregate total assets and net sales of our foreign
subsidiaries, which represent all of our non-guarantor subsidiaries, were $14.3
million and $15.3 million, respectively, or 4.6% and 3.6%, respectively, of our
total assets and net sales.
In the event of a bankruptcy, liquidation or reorganization of any of
the non-guarantor subsidiaries, holders of their liabilities, including their
trade creditors, will be entitled to payment of their claims from the assets of
those subsidiaries before any assets are made available for distribution to us.
As a result, the debt securities are effectively subordinated to all
indebtedness and other liabilities of the non-guarantor subsidiaries.
A PUBLIC MARKET FOR THE DEBT SECURITIES MAY NOT DEVELOP.
There can be no assurance that a public market for the debt securities
will develop or, if such a market develops, as to the liquidity of the market.
If a market were to develop, the debt securities could trade at prices that may
be higher or lower than their principal amount. We do not intend to apply for
listing of the debt securities on any securities exchange or for quotation of
the debt securities on any automated quotation system. If an active public
market does not develop or continue, the market price and liquidity of the debt
securities may be adversely affected.
In addition, the liquidity of the trading market in the debt
securities, and the market price quoted for the debt securities, may be
adversely affected by changes in the overall market for high-yield securities
and by changes in our financial performance or prospects or in the prospects for
companies in our industry generally. As a result, you cannot be sure that an
active trading market will develop for the debt securities.
17
FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID
GUARANTEES AND REQUIRE SECURITY HOLDERS TO RETURN PAYMENTS RECEIVED FROM
GUARANTORS.
If a bankruptcy case or lawsuit is initiated by unpaid creditors of any
guarantor, the debt represented by the guarantees entered into by the guarantors
may be reviewed under the Federal bankruptcy law and comparable provisions of
state fraudulent transfer laws. Under these laws, a guarantee could be voided,
or claims in respect of the guarantee could be subordinated to certain
obligations of a guarantor if, among other things, the guarantor, at the time it
entered into the guarantee:
o received less than reasonably equivalent value or fair
consideration for entering into the guarantee; and
o either:
o was insolvent or rendered insolvent by reason of entering
into a guarantee; or
o was engaged in a business or transaction for which the
guarantor's remaining assets constituted unreasonably small
capital; or
o intended to incur, or believed that it would incur, debts or
contingent liabilities beyond its ability to pay them as they
become due.
In addition, any payment by a guarantor could be voided and required to
be returned to the guarantor or to a fund for the benefit of the guarantor's
creditors under those circumstances.
If a guarantee of a subsidiary were voided as a fraudulent conveyance
or held unenforceable for any other reason, holders of the debt securities would
be solely creditors of our company and creditors of our other subsidiaries that
have validly guaranteed the debt securities. The debt securities then would be
effectively subordinated to all liabilities of the subsidiary whose guarantee
was voided.
The measures of insolvency for purposes of these fraudulent transfer
laws will vary depending upon the law applied in any proceeding to determine
whether a fraudulent transfer has occurred. Generally, however, a guarantor
would be considered insolvent if:
o the sum of its debts, including contingent liabilities, were
greater than the fair saleable value of all of its assets; or
o the present fair saleable value of its assets were less than the
amount that would be required to pay its probable liability on its
existing debts, including contingent liabilities, as they become
absolute and mature; or
o it could not pay its debts or contingent liabilities as they
become due.
If the claims of the holders of the debt securities against any
subsidiary were subordinated in favor of other creditors of the subsidiary, the
other creditors would be entitled to be paid in full before any payment could be
made on the debt securities. If one or more of the guarantees is voided or
subordinated, we cannot assure you that after providing for all prior claims
there would be sufficient assets remaining to satisfy the claims of the holders
of the debt securities.
Based upon financial and other information, we believe that the
guarantees are being incurred for proper proposes and in good faith and that we,
and our subsidiaries that are guarantors, on a consolidated basis, are solvent
and will continue to be solvent after this offering is completed, will have
sufficient capital for carrying on our business after the issuance of the debt
securities and will be able to pay our debts as they mature. We cannot assure
you, however, as to the standard a court would apply in making these
determinations or that a court would agree with our conclusions in this regard.
18
FORWARD LOOKING STATEMENTS
Certain statements we make in this prospectus, and other written or
oral statements by us or our authorized officers on our behalf, may constitute
"forward looking statements" within the meaning of the Federal securities laws.
Forward-looking statements include statements concerning our plans, objectives,
goals, strategies, future events, future revenues or performance, capital
expenditures, financing needs, plans or intentions relating to acquisitions, our
competitive strengths and weaknesses, our business strategy and the trends we
anticipate in the industry and economies in which we operate and other
information that is not historical information. Words or phrases such as
"estimates," "expects," "anticipates," "projects," "plans," "intends,"
"believes" and variations of such words or similar expressions are intended to
identify forward-looking statements. All forward-looking statements, including,
without limitation, our examination of historical operating trends, are based
upon our current expectations and various assumptions. Our expectations, beliefs
and projections are expressed in good faith, and we believe there is a
reasonable basis for them, but we cannot assure you that our expectations,
beliefs and projections will be realized.
Before you invest in our common stock or debt securities, you should be
aware that the occurrence of the events described in the immediately above
section captioned "Risk Factors" and otherwise discussed elsewhere in this
prospectus or in materials incorporated in this prospectus by reference to our
other filings with the Commission, could have a material adverse affect on our
business, financial condition and results of operation.
The data included in this prospectus regarding markets and ranking,
including the size of certain markets and our position and the position of our
competitors within these markets, are based on independent industry
publications, reports of government agencies or other published industry sources
or our estimates based on management's knowledge and experience in the markets
in which we operate. Our estimates have been based on information provided by
customers, suppliers, trade and business organizations and other contacts in the
markets in which we operate. We believe these estimates to be accurate as of the
date of this prospectus. However, this information may prove to be inaccurate
because of the method by which we obtained some of the data for our estimates or
because this information cannot always be verified with complete certainty due
to the limits on the availability and reliability of raw data, the voluntary
nature of the data gathering process and other limitations and uncertainties
inherent in a survey of market size. As a result, you should be aware that
market, ranking and other similar data included in this prospectus, and
estimates and beliefs based on that data, may not be reliable.
USE OF PROCEEDS
Unless we indicate otherwise in the applicable prospectus supplement,
we intend to use the net proceeds from the sale of the securities for general
corporate purposes, which may include, but are not limited to, working capital,
capital expenditures and other potential acquisitions, and to make certain
required prepayments under our senior credit facility. See the section titled
"Description of Senior Indebtedness" for a detailed description of required
prepayments. We will set forth in the applicable prospectus supplement our
intended use for the net proceeds received from our sale of any securities.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for the five years ended
December 31, 2001 and the nine months ended September 30, 2002 are set forth
below:
------------------------------------------------------------------------------------------
FOR THE NINE MONTHS
FOR THE YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
------------------------------------------------------------------------------------------
Ratio of earnings to
fixed charges 10.5 12.4 6.2 1.5 * 4.6
==========================================================================================
* For the actual year ended December 31, 2001, the calculated ratio of earnings
to fixed charges is less than one-to- one and represents a deficiency of
approximately $125.6 million.
19
The ratios of earnings to fixed charges are calculated as follows:
(income before income taxes and minority interest) + (fixed charges) - (capitalized interest)
---------------------------------------------------------------------------------------------
(fixed charges)
DESCRIPTION OF THE DEBT SECURITIES
This prospectus describes certain general terms and provisions of our
debt securities. When we offer to sell a particular series of debt securities,
we will describe the specific terms of the series in a supplement to this
prospectus. We will also indicate in the supplement whether the general terms
and provisions described in this prospectus apply to a particular series of debt
securities.
The debt securities are to be issued under an indenture between us and
a trustee, and may be supplemented or amended from time to time following its
execution. The indenture, and any supplemental indentures, will be subject to,
and governed by, the Trust Indenture Act of 1939, as amended (the "TIA").
The form of the indenture gives us broad authority to set the
particular terms of each series of debt securities, including the right to
modify certain of the terms contained in the indenture. The particular terms of
a series of debt securities and the extent, if any, to which the particular
terms of the issue modify the terms of the form of indenture will be described
in the prospectus supplement relating to the debt securities.
The statements made hereunder relating to the indenture and the debt
securities to be issued thereunder are summaries of certain provisions thereof
and do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all provisions of the indenture (including those terms
made a part of the indenture by reference to the TIA) and such debt securities.
We have filed a copy of the indenture as an exhibit to the registration
statement. Capitalized terms used in the summary below have the meanings
specified in the indenture.
GENERAL
The terms of each series of debt securities will be detailed or
determined in the manner provided in the indenture and any applicable
supplemental indenture. The particular terms of each series of debt securities
will be described in a prospectus supplement relating to the series, including
any pricing supplement.
We will set forth in a prospectus supplement (including any pricing
supplement) relating to any series of debt securities being offered, the initial
offering price, the aggregate principal amount and the following terms of the
debt securities, if applicable:
o the title of the debt securities;
o any limit on the aggregate principal amount of the debt
securities;
o the date or dates on which we will pay the principal on the debt
securities;
o the rate or rates at which the debt securities will bear interest,
the date or dates from which interest will accrue, the date or
dates on which interest will be payable and any regular record
date for the interest payable on any interest payment date;
o the place or places where principal of and any premium and
interest on the debt securities will be payable;
o whether the debt securities rank as senior subordinated debt
securities or subordinated debt securities;
o the terms of any guarantee of any debt securities;
o the terms and conditions upon which we may redeem the debt
securities;
o any obligation we have to redeem or purchase the debt securities
pursuant to any sinking fund or analogous provisions or at the
option of a holder of debt securities;
20
o the denominations in which the debt securities will be issued, if
other than denominations of $1,000 and any integral multiple
thereof;
o whether the debt securities will be issued in the form of
certificated debt securities or global debt securities;
o the portion of principal amount of the debt securities payable
upon declaration of acceleration of the maturity date, if other
than the principal amount;
o the currency, currencies, or currency units in which payment of
the principal of and any premium and interest debt securities will
be made;
o if payments of principal of or any premium and interest on the
debt securities will be made in one or more currencies or currency
units other than that or those in which the debt securities are
stated to be payable, the currency, currencies, or currency units
in which payment of principal of or any premium and interest on
the debt securities as to which such election is made will be
payable, and the periods within which and the terms and conditions
upon which such election is to be made;
o the manner in which the amounts of payment of principal of or any
premium or interest on the debt securities will be determined, if
these amounts may be determined by reference to an index, based
upon a formula, or in some other manner;
o whether, the ratio at which and the terms and conditions upon
which, if any, the debt securities will be convertible into or
exchangeable for our common stock or our other securities or
securities of another person;
o any addition to or change in the events of default described in
this prospectus or in the indenture with respect to the debt
securities and any change in the acceleration provisions described
in this prospectus or in the indenture with respect to the debt
securities;
o any addition to or change in the covenants described in this
prospectus or in the indenture with respect to the debt
securities; and
o any other terms of the debt securities, which may modify or delete
any provision of the indenture as it applies to that series.
TRANSFER AND EXCHANGE
A holder will be able to transfer or exchange debt securities in
accordance with the indenture. The registrar and the trustee may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents in connection with a transfer of debt securities. Holders may be
required to pay all taxes due on transfer.
EVENTS OF DEFAULT AND REMEDIES
An event of default means with respect to any series of debt
securities, any of the following:
o default in the payment of any interest upon any debt security
of that series when it becomes due and payable, and continuance
of that default for a period of 30 days;
o default in the payment of the principal of or premium, if any,
on any debt security of that series when it becomes due and
payable;
o default in the making of any sinking fund payment when and as
due in respect of any debt security of that series;
21
o default in the performance, or breach, of any other material
covenant or warranty by us in the indenture (other than a default
in the performance, or breach, of a covenant or agreement that is
specifically dealt elsewhere in the indenture or that has been
included in the indenture solely for the benefit of a series of
debt securities other than that series), which default continues
uncured for a period of 60 days after we receive written notice
from the trustee or we and the trustee receive written notice from
the holders of not less than a certain specified percentage in
aggregate principal amount of the then outstanding debt securities
of that series as provided in the indenture;
o any nonpayment or other default is made under any agreement or
instrument relating to any of our other indebtedness and such
default shall have continued after any applicable grace period and
results in that indebtedness becoming due prior to its stated
maturity or occurs at the final maturity of that indebtedness;
o certain events of bankruptcy, insolvency or reorganization; and
o any other event of default provided with respect to debt
securities of that series that is described in the applicable
prospectus supplement accompanying this prospectus.
No event of default with respect to a particular series of debt
securities (except as to certain events of bankruptcy, insolvency or
reorganization) necessarily constitutes an event of default with respect to any
other series of debt securities.
If an event of default with respect to debt securities of any series at
the time outstanding occurs and is continuing, then the trustee or the holders
of not less than a certain specified percentage in aggregate principal amount of
the then outstanding debt securities of that series may, by written notice to us
(and to the trustee if given by the holders), declare to be due and payable
immediately the principal (or, if the debt securities of that series are
discount securities, that portion of the principal amount as may be specified in
the terms of that series) of all debt securities of that series.
In the case of an event of default resulting from certain events of
bankruptcy, insolvency or reorganization, the principal of and premium, if any,
and interest of all outstanding debt securities will become and be immediately
due and payable without any declaration or other act by the trustee or any
holder of outstanding debt securities.
At any time after a declaration of acceleration with respect to debt
securities of any series has been made, but before the trustee has obtained a
judgment or decree for payment of the money due, the holders of a majority in
aggregate principal amount of the then outstanding debt securities of that
series may, subject to our having paid or deposited with the trustee a sum
sufficient to pay overdue interest and principal which has become due other than
by acceleration and certain other conditions, rescind and annul such
acceleration if all events of default, other than the nonpayment of accelerated
principal and premium with respect to debt securities of that series, have been
cured or waived as provided in the indenture. For information as to waiver of
defaults see the discussion under "- Amendment, Supplement and Waiver" below.
We refer you to the prospectus supplement relating to any series of debt
securities that are discount securities for the particular provisions relating
to acceleration of a portion of the principal amount of the discount securities
upon the occurrence of an event of default and the continuation of an event of
default.
The indenture provides that 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 outstanding debt securities, unless the trustee receives indemnity
satisfactory to it against any cost, liability or expense. Subject to certain
rights of the trustee, the holders of a majority in aggregate principal amount
of the then outstanding debt securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee with respect to the debt securities of that series.
The indenture provides that the trustee may withhold notice to the
holders of debt securities of any series of any event of default (except in
payment on any debt securities of that series) with respect to debt securities
of that series if it in good faith determines that withholding notice is in the
interest of the holders of those debt securities.
22
AMENDMENT, SUPPLEMENT AND WAIVER
Without notice to or the consent of any holders, we and the trustee
enter into one or more supplemental indentures for any of the following
purposes:
o to evidence the succession of another entity to us and the
assumption by that successor of our covenants in the indenture and
in the debt securities;
o to add to the covenants for the benefit of the holders of all or
any series of debt securities, and if those covenants are to be
for the benefit of less than all series, stating that those
covenants are expressly being included solely for the benefit of
that series, or to surrender any right or power conferred upon us;
o to add any additional events of default;
o to add or change any of the provisions of the indenture to such
extent as may be necessary to permit or facilitate the issuance of
debt securities in bearer form, registrable or not registrable as
to principal, and with or without interest coupons, or to permit
or facilitate the issuance of Securities in uncertificated form
o subject to certain limitations, to add to, change, or eliminate
any of the provisions of the indenture in respect of any series of
debt securities;
o to establish the form or terms of debt securities of any series as
permitted by the indenture;
o to evidence and provide for the acceptance of appointment of a
separate or successor trustee with respect to one or more series
of debt securities and to add to or change any of the provisions
of the indenture as is necessary to provide for or facilitate the
administration of the trusts thereunder by more than one trustee;
or
o to cure any ambiguity, to correct or supplement any provision in
the indenture which may be defective or inconsistent with any
other provision in the indenture, or to make any other provisions
with respect to matters or questions arising under the indenture,
provided that such action does not adversely affect the interests
of the holders of the debt securities of any series in any
material respect.
We and the trustee may, with some exceptions, amend or modify any
indenture with the consent of the holders of at least a majority in aggregate
principal amount of the outstanding debt securities of all series affected by
the amendment or modification. However, no amendment or modification may,
without the consent of the holder of each outstanding debt security affected
thereby:
o change the stated maturity of the principal of, or any installment
of principal of or interest on, any debt security, or reduce the
principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount
of the principal of an original issue discount security that would
be due and payable upon a declaration of acceleration of maturity,
or change the coin or currency in which any premium or interest on
any debt security is payable, or impair the right to institute
suit for the enforcement of any payment on or after the stated
maturity (or, in the case of redemption, on or after the
redemption date);
o reduce the percentages of holders whose consent is required for
any modification or waiver; or
o modify certain of the provisions in the indenture relating to
supplemental indentures and waivers of certain covenants and past
defaults.
A modification which changes or eliminates any provision of an
indenture expressly included solely for the benefit of holders of debt
securities of one or more particular series or modifies the holders' rights will
be deemed not to affect the rights under the indenture of the registered holders
of debt securities of any other series.
23
The indenture provides that the holders of a majority in principal
amount of the outstanding debt securities of any series may on behalf of the
holders of all of the debt securities of that series waive any past default and
its consequences with respect to that series, except:
o a default in the payment of interest on or premium, if any, or the
principal of, any debt security of that series; or
o a default in respect of a covenant or provision of the indenture
which cannot be modified or amended without the consent of the
holder of each outstanding debt security of that series affected.
DEFEASANCE OF INDENTURE
Legal Defeasance. The indenture provides that, unless otherwise
provided by the terms of the applicable series of debt securities, we may be
discharged from any and all obligations in respect of the debt securities of any
series (except for certain obligations to register the transfer or exchange of
debt securities of the series, to replace stolen, lost or mutilated debt
securities of the series, and to maintain paying agencies and certain provisions
relating to the treatment of funds held by paying agents).
Covenant Defeasance. The indenture provides that, unless otherwise
provided by the terms of the applicable series of debt securities, upon
compliance with certain conditions we may omit to comply with certain covenants
contained in the indenture, as well as additional covenants contained in a
supplement to the indenture and that certain events of default under the
indenture will not constitute a an event of default with respect to the debt
securities of that series.
In the case of either legal defeasance or covenant defeasance, we will
be so discharged upon the deposit with the trustee, in trust, of money and/or
U.S. Government Obligations that, through the payment of interest and principal
in accordance with their terms, will provide money in an amount sufficient in
the opinion of a nationally recognized firm of independent public accountants to
pay and discharge the principal of and premium and interest on the debt
securities of that series on the stated maturity of such payments in accordance
with the terms of the indenture and those debt securities.
This discharge may occur only if, among other things, we have delivered
to the trustee an officers' certificate and an opinion of counsel stating that
we have received from, or there has been published by, the United States
Internal Revenue Service a ruling or, since the date of execution of the
indenture, there has been a change in the applicable United States federal
income tax law, in either case to the effect that holders of the debt securities
of such series will not recognize income, gain or loss for United States federal
income tax purposes as a result of the deposit, defeasance and discharge and
will be subject to United States federal income tax on the same amount and in
the same manner and at the same times as would have been the case if the
deposit, defeasance and discharge had not occurred.
CONSOLIDATION, MERGER, SALE OR TRANSFER
We may not consolidate with or merge with or into any other person or
transfer all or substantially all of our properties and assets to any person
unless, among other things:
o either:
o we are the surviving or continuing corporation; or
o the person (if other than us) formed by such consolidation or
into which we are merged or the person which all or
substantially all of our properties and assets are
transferred is a corporation duly organized and validly
existing under the laws of the United States, any state
thereof or the District of Columbia and expressly assumes, by
a supplemental indenture all of our obligations under the
debt securities and the indenture; and
o immediately after the transaction and the incurrence or anticipated
incurrence of any indebtedness to be incurred in connection with the
transaction, no default will exist.
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DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The holders of our common stock, par value $0.01 per share, are
entitled to one vote for each share on all matters voted on by our stockholders,
including the election of directors. No holders of common stock have any right
to cumulative voting. Subject to any preferential rights of any outstanding
series of preferred stock created by our board of directors, the holders of our
common stock will be entitled to such dividends as may be declared from time to
time by our board of directors from funds available therefor. We currently do
not and do not intend to pay cash dividends on our common stock in the
foreseeable future, and, at this time, are restricted from doing so under the
terms of our credit facility.
In the event of a liquidation, dissolution or winding up, the holders
of our common stock are entitled to share ratably in all assets remaining after
payment of liabilities and the liquidation preference and other amounts owed to
the holders of our preferred stock. Holders of common stock have no preemptive
rights or rights to convert their common stock into any other securities. There
are no redemption or sinking fund provisions applicable to the common stock.
Subject to adjustment and certain limitations, each share of common stock has a
preferred stock purchase right that entitles the registered holder of the common
stock to purchase from us a unit consisting of one one-hundredth of a share of
our series A junior participating preferred stock, at an exercise price of
$45.00 per Right upon the happening of certain events. The preferred stock
purchase rights are not presently exercisable and will expire at the close of
business on March 22, 2003, unless earlier redeemed by us.
Our common stock is listed on the New York Stock Exchange under the
symbol "JAH."
PREFERRED STOCK
Our restated certificate of incorporation, as amended, authorizes our
board of directors to issue, without further stockholder action, up to 5,000,000
shares of preferred stock, in one or more series, having a par value of $.01 per
share, 250,000 of which has been designated as Series A Junior Participating
Preferred Stock. The board of directors is authorized to fix for each such
series the designation and relative rights (including, if any, conversion,
participation, voting and dividend rights and stated redemption and liquidation
values), preferences, limitations and restrictions, as are stated in the
resolutions adopted by the board of directors and as are permitted by General
Corporation Law of the State of Delaware. One right to purchase one
one-hundredth of a share of Series A Junior Participating Preferred Stock is
attached to each outstanding share of our common stock.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities, shares of preferred
stock, or shares or common stock. We may issue warrants independently or
together with any other securities we offer pursuant to a prospectus supplement
and the warrants may be attached to or separate from the securities. We will
issue each series of warrants under a separate warrant agreement that we will
enter into with a bank or trust company, as warrant agent. We will set forth
additional terms of the warrants and the applicable warrant agreements in the
applicable prospectus supplement.
Each warrant will entitle the holder to purchase the principal amount
of debt securities or the number of shares of preferred stock or common stock at
the exercise price set forth in, or calculable as set forth in, the applicable
prospectus supplement. The exercise price may be subject to adjustment upon the
occurrence of certain events, as set forth in the applicable prospectus
supplement. After the close of business on the expiration date of the warrant,
unexercised warrants will become void. The place or places where, and the manner
in which, warrants may be exercised shall be specified in the applicable
prospectus supplement.
The applicable prospectus supplement will describe the following terms,
where applicable, of the warrants in respect of which this prospectus is being
delivered:
o the title of the warrants;
o the aggregate number of the warrants;
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o or prices at which the warrants will be issued;
o the designation, aggregate principal amount and terms of
the securities issuable upon exercise of the warrants and the
procedures and conditions relating to the exercise of the
warrants;
o the designation and terms of any related securities with
which the warrants will be issued, and the number of warrants that
will be issued with each security;
o the date, if any, on and after which the warrants and the
related debt securities will be separately transferable;
o the price at which the securities purchasable upon
exercise of the warrants may be purchased;
o the date on which the right to exercise the warrants will
commence, and the date on which the right will expire;
o the maximum or minimum number of warrants which may be
exercised at any time;
o a discussion of certain U.S. federal income tax
considerations applicable to the exercise of the warrants; and
o any other terms of the warrants and terms, procedures and
limitations relating to the exercise of the warrants.
Holders may exchange warrant certificates for new warrant certificates
of different denominations, and may exercise warrants at the corporate trust
office of the warrant agent or any other office indicated in the applicable
prospectus supplement. Prior to the exercise of their warrants, holders of
warrants will not have any of the rights of holders of the securities
purchasable upon the exercise and will not be entitled to payments of principal,
premium or interest on the securities purchasable upon the exercise.
DESCRIPTION OF SENIOR INDEBTEDNESS
On April 24, 2002, we refinanced our existing senior indebtedness with
a new $100 million senior secured credit facility (the "Credit Facility")
pursuant to the terms of a Credit Agreement (the "Credit Agreement"), with Bank
of America, N.A., as Administrative Agent (the "Administrative Agent"), Swing
Line Lender, and L/C Issuer, Canadian Imperial Bank of Commerce, as Syndication
Agent, National City Bank of Indiana, as Documentation Agent, and the other
Lenders party thereto, including The Bank of New York, Fleet National Bank,
Harris Trust and Savings Bank, U.S. Bank National Association, Allfirst Bank,
Transamerica Business Capital Corporation, and Union Federal Bank of
Indianapolis.
The Credit Agreement, among other things, provides for a new senior
credit facility for up to $100 million of senior secured loans, consisting of a
$50 million five-year revolving credit facility (the "Revolving Credit
Facility") and a $50 million five-year term loan facility (the "Term Loan
Facility").
The Revolving Credit Facility includes up to an aggregate of $10
million in standby and commercial letters of credit and up to an aggregate of
$10 million in swing line loans. As of June 30, 2002, we had not drawn any of
the $50 million available under the Revolving Credit Facility, although we used
$2.6 million of availability in connection with pre-existing letters of credit.
The Term Loan Facility was drawn in full, in the amount of $50 million,
at the closing of the Credit Facility and $48.75 million was outstanding as of
September 30, 2002 reflecting scheduled principal repayment since issuance.
Principal and interest under the Term Loan Facility are payable quarterly, in
accordance with a specified amortization schedule, with the final payment of all
amounts outstanding thereunder being due on April 24, 2007.
The Revolving Credit Facility and the Term Loan Facility bear interest
at a rate equal to (i) the Eurodollar Rate (as determined by the Administrative
Agent) pursuant to an agreed formula or (ii) a Base Rate equal to the higher
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of (a) the Bank of America prime rate and (b) the federal funds rate plus .50%,
plus, in each case, an applicable margin ranging from .75% to 1.50% for Base
Rate loans and from 2.00% to 2.75% for Eurodollar Rate loans.
The Credit Agreement contains certain restrictions on the conduct of
our business, including, among other things, restrictions, generally, on:
o incurring debt, including any debt issued in connection with this
offering;
o disposing of certain assets;
o making investments;
o exceeding certain agreed capital expenditures;
o creating or suffering liens on our assets;
o completing certain mergers, consolidations, and with permitted
exceptions, acquisitions;
o declaring dividends;
o redeeming or prepaying other debt; and
o transactions with affiliates.
The Credit Agreement also requires us to maintain the following
financial covenants:
o our consolidated net worth may not be at any time less than the
sum of:
o $30,000,000;
o an amount equal to 50% of our consolidated net income earned
in each fiscal quarter ending after December 31, 2001 (with
no deduction for a net loss in any such fiscal quarter); and
o an amount equal to 100% of the aggregate increases in the
stockholders' equity of Jarden and our subsidiaries after
April 24, 2002 by reason of the issuance and sale of our
capital stock (including upon any conversion of our debt
securities into our capital stock);
o our total leverage ratio as of the end of any four-quarter period
may not be greater than the ratio set forth below opposite such
four-quarter period:
------------------------------------------------- --------------------------------------------
Four-Quarter Period ending closest to: Maximum Total Leverage Ratio
------------------------------------------------- --------------------------------------------
September 30, 2002;
December 31, 2002;
March 31, 2003;
June 30, 2003; and 3.50 to 1.00
September 30, 2003
------------------------------------------------- --------------------------------------------
December 31, 2003;
March 31, 2004;
June 30, 2004; and 3.25 to 1.00
September 30, 2004
------------------------------------------------- --------------------------------------------
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------------------------------------------------- --------------------------------------------
Four-Quarter Period ending closest to: Maximum Total Leverage Ratio
------------------------------------------------- --------------------------------------------
December 31, 2004 and thereafter 3.00 to 1.00
------------------------------------------------- --------------------------------------------
o our senior leverage ratio as of the end of any four-quarter period
may not be greater than the ratio set forth below opposite such
four-quarter period:
------------------------------------------------- --------------------------------------------
Four-Quarter Period ending closest to: Maximum Senior Leverage Ratio
------------------------------------------------- --------------------------------------------
September 30, 2002; 2.00 to 1.00
December 31, 2002; and
March 31, 2003
------------------------------------------------- --------------------------------------------
June 30, 2003;
September 30, 2003;
December 31, 2003; 1.75 to 1.00
March 31, 2004;
June 30, 2004; and
September 30, 2004
------------------------------------------------- --------------------------------------------
1.50 to 1.00
December 31, 2004 and thereafter
------------------------------------------------- --------------------------------------------
; and
o our fixed charge ratio as of the end of any applicable period,
beginning with the period ending closest to September 30, 2002,
may not be less than 1.25 to 1.00.
However, the Credit Agreement does not make any significant
restrictions on our or our domestic subsidiaries' ability to obtain funds from
their respective subsidiaries by dividend or loan.
The occurrence of certain events or conditions described in the Credit
Agreement (subject to grace periods in certain cases) constitutes an event of
default. If an event of default occurs, the Administrative Agent may, at the
request or consent of the Lenders, among other things, declare the entire
outstanding balance of principal and interest of all outstanding loans to be
immediately due and payable. The events of default include, among other things:
o our failure to pay any principal, interest, or other fees
when due;
o any material judgment or order entered against us;
o any inaccuracy in the representations and warranties;
o failure to observe certain covenants under the Credit
Agreement (including, e.g., the financial covenants);
o bankruptcy, insolvency or receivership proceedings with
respect to Jarden; and
o a change of control of Jarden.
The Credit Agreement provides that we shall make required prepayments
of the Term Loan and Revolving Loan, including, among other things, upon the
happening of the following events:
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o in the event that our total leverage ratio is greater than 3.00 to
1.00 as of the end of any fiscal year, beginning with the fiscal
year ending December 31, 2002, we must make a prepayment in an
amount equal to fifty percent (50%) of the amount of excess cash
flow, each such prepayment to be made on the date our and our
subsidiaries' financial statements for such fiscal year are
required to be delivered (or if earlier, the date such financial
statements are delivered) pursuant to the Credit Agreement;
o we must make, or must cause each applicable subsidiary to make, a
prepayment with respect to each private or public offering of
equity securities of Jarden or any of our subsidiaries (other than
equity securities issued to Jarden or a guarantor) in an amount
equal to fifty percent (50%) of the net proceeds of each issuance
of equity securities of the Jarden or any of our subsidiaries,
each such prepayment to be made within ten (10) business days of
receipt of such proceeds and upon not less than five (5) business
days' prior written notice to the Administrative Agent; however,
no prepayment shall be required of the first $10,000,000 of net
proceeds in each fiscal year of Jarden realized from (x) the
issuance of equity securities in connection with the exercise of
any option, warrant or other convertible security of Jarden or any
of our subsidiaries or (y) the issuance, award or grant of equity
securities to eligible participants under a stock plan of Jarden.
o we must make, or must cause each applicable subsidiary to make, a
prepayment in an amount equal to one hundred percent (100%) of the
net proceeds from each Disposition (as defined below) other than
certain Permitted Dispositions (as defined below), each such
prepayment to be made within ten (10) business days of receipt of
the net proceeds thereof and upon not less than five (5) business
days' prior written notice to the Administrative Agent.
Disposition means the sale, transfer, license or other disposition
(including any sale and leaseback transaction) of any property by
any person, including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts
receivable or any rights and claims associated therewith. A
Disposition shall not include (a "Permitted Disposition"):
o Dispositions of obsolete or worn out property, whether now
owned or hereafter acquired, in the ordinary course of
business;
o Dispositions of inventory in the ordinary course of business;
o Dispositions by Jarden or any of our subsidiaries of
equipment or real property which is replaced by equipment or
real property of substantially equivalent or greater utility
and value within ninety (90) days of the date of disposition
thereof, provided that if the fair market value of the
property so disposed of is greater than $3,000,000, the
Administrative Agent will have received notice of such
disposition from us not less than twenty (20) days prior to
the consummation of such disposition;
o Dispositions of property (i) by any of our subsidiaries to a
guarantor, (ii) by us or any guarantor to any guarantor, and
(iii) by any of our subsidiaries that is not a guarantor to
any other of our subsidiaries that is not a guarantor;
o any of our subsidiaries may merge with or transfer
substantially all its assets (upon voluntary liquidation or
otherwise) to any guarantor, provided that, if a merger, the
guarantor must be the continuing or surviving person, and
provided further that if a transfer of assets in the form of
a sale by a subsidiary that is not a guarantor, the sale
shall be at fair market value and the aggregate amount of all
such sales will not exceed $5,000,000;
o any of our subsidiaries substantially all of whose assets
consist of other subsidiaries' securities or other equity
securities in any person may merge with or transfer
substantially all its assets (upon voluntary liquidation or
otherwise) to us, provided that, if a merger, we will be the
continuing or surviving person, and provided further that if
a transfer of assets in the form of a sale by a subsidiary
that is not a guarantor, the sale will be at fair market
value and the aggregate amount of all such sales will not
exceed $5,000,000;
o any of our subsidiaries that is not a guarantor may merge
with or sell substantially all its assets (upon voluntary
liquidation or otherwise) to any one or more subsidiaries
that is not a guarantor; and
29
o Dispositions not otherwise permitted by above, so long as the
aggregate fair market value of all such property so disposed
in any fiscal year of Jarden does not exceed $35,000,000 and
the net proceeds therefrom are applied in accordance with the
Credit Agreement;
o In the event that the net proceeds received from insurance carried
with respect to the collateral securing our obligations under the
Credit Agreement and the other loan documents is not completely
and fully utilized for the repair or replacement of such
collateral, we must make, or must cause each applicable subsidiary
to make, a prepayment in an amount equal to one hundred percent
(100%) of the net proceeds received with respect to such insurance
that is not so utilized.
In connection with entering into the Credit Agreement, all of our
domestic subsidiaries, including Hearthmark, Inc., Alltrista Plastics
Corporation, Alltrista Newco Corporation, Alltrista Zinc Products, L.P., TriEnda
Corporation, Tilia, Inc. (formerly known as Alltrista Acquisition I, Inc.),
Tilia Direct, Inc. (formerly known as Alltrista Acquisition II, Inc.), and Tilia
International, Inc. (formerly known as Alltrista Acquisition III, Inc.), and
Quoin Corporation, have agreed to guarantee our obligations under the Credit
Agreement.
Pursuant to a securities pledge agreement, all obligations under the
Credit Agreement are secured by a security interest in all of the capital stock
or other equity interests of each of our existing or future direct or indirect
domestic subsidiaries, and 65% of the voting capital stock or other equity
interests and 100% of the nonvoting stock or other equity interests of each of
our (or any of our direct or indirect domestic subsidiaries') existing or future
direct foreign subsidiaries. Pursuant to the terms of a security agreement and
an intellectual property security agreement, the obligations under the Credit
Agreement are also secured by a security interest in substantially all of the
assets and properties of us and our domestic subsidiaries.
The foregoing is a summary of the material provisions of the Credit
Agreement and certain of the documents entered into by us and our domestic
subsidiaries in connection therewith which are incorporated herein by reference.
PLAN OF DISTRIBUTION
We may sell securities to or through underwriters and also may sell
securities directly to purchasers or through agents. We will name any
underwriter or agent involved in the offer and sale of securities in the
applicable prospectus supplement.
We may distribute the securities from time to time in one or more
transactions:
o at a fixed price or prices, which may be changed;
o at market prices prevailing at the time of sale;
o at prices related to such prevailing market prices; or
o at negotiated prices.
We may also, from time to time, authorize dealers, acting as our
agents, to offer and sell securities upon the terms and conditions set forth in
the applicable prospectus supplement. In connection with the sale of securities,
we, or the purchasers of securities for whom the underwriters may act as agents,
may compensate underwriters in the form of discounts, concessions or
commissions. Underwriters may sell the securities to or through dealers, and
those dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent. Underwriters, dealers and agents participating in
the distribution of securities may be deemed to be underwriters under the
Securities Act, and any discounts or commissions they receive from us and any
profit they realize on resale of the securities may be deemed to be underwriting
discounts and commissions under the Securities Act. We will describe in the
applicable prospectus supplement any compensation we pay to underwriters or
agents in connection with the offering of securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers.
30
We may enter into agreements to indemnify underwriters, dealers and
agents who participate in the distribution of securities against certain
liabilities, including liabilities under the Securities Act.
To facilitate the offering of securities, certain persons participating
in the offering may engage in transactions that stabilize, maintain or otherwise
affect the price of the securities. This may include over-allotments or short
sales of the securities, which involve the sale by persons participating in the
offering of more securities than we sold to them. In these circumstances, these
persons would cover such over-allotments or short positions by making purchases
in the open market or by exercising their over-allotment option, if any. In
addition, these persons may stabilize or maintain the price of the securities by
bidding for or purchasing securities in the open market or by imposing penalty
bids, whereby selling concessions allowed to dealers participating in the
offering may be reclaimed if securities sold by them are repurchased in
connection with stabilization transactions. The effect of these transactions may
be to stabilize or maintain the market price of the securities at a level above
that which might otherwise prevail in the open market. These transactions may be
discontinued at any time.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with and perform services for us in the ordinary course
of our business.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act,
and in accordance therewith we are required to file periodic reports, proxy
statements and other information with the Commission. Such reports, proxy
statements and other information filed by us can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, as well as the Regional Offices of the
Commission at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, at the prescribed rates. The Commission also maintains a site on
the World Wide Web that contains reports, proxy and information statements and
other information regarding registrants that file electronically. The address of
such site is http://www.sec.gov. The telephone number of the Public Reference
Room of the Commission is 1-800-SEC-0330. In addition, similar information can
be inspected at the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
With respect to the common stock, preferred stock, warrants, and debt
securities, this prospectus omits certain information that is contained in the
registration statement on file with the Commission, of which this prospectus is
a part. For further information with respect to us and our common stock,
preferred stock, warrants, and debt securities, reference is made to the
registration statement, including the exhibits incorporated therein by reference
or filed therewith. Statements herein contained concerning the provisions of any
document are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit or incorporated by reference to
the registration statement. The registration statement and the exhibits may be
inspected without charge at the offices of the Commission or copies thereof
obtained at prescribed rates from the public reference section of the Commission
at the addresses set forth above.
You should rely on the information contained in this prospectus and in
the registration statement as well as other information you deem relevant. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. This prospectus is an offer to sell, or a
solicitation of offers to buy, securities only in jurisdictions where offers and
sales are permitted. The information contained in this prospectus is accurate
only as of the date of this prospectus, regardless of the time of delivery of
this prospectus or any sale or exchange of securities, however, we have a duty
to update that information while this prospectus is in use by you where, among
other things, any facts or circumstances arise which, individually or in the
aggregate, represent a fundamental change in the information contained in this
prospectus or any material information with respect to the plan of distribution
was not previously disclosed in the prospectus or there is any material change
to such information in the prospectus. This prospectus does not offer to sell or
solicit any offer to buy any securities other than the common stock, preferred
stock, warrants, and debt securities to which it relates, nor does it offer to
buy any of these securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.
EXPERTS
The consolidated financial statements of Jarden Corporation and
subsidiaries (formerly Alltrista Corporation and subsidiaries) appearing in its
Annual Report (Form 10-K/A) for the year ended December 31, 2001, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and
31
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Tilia International, Inc. and
its subsidiaries incorporated by reference in this prospectus and elsewhere in
the registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto. Arthur
Andersen LLP has not consented to the inclusion of their report in this
prospectus, and we have dispensed with the requirement to file their consent in
reliance upon Rule 437a of the Securities Act of 1933. Because Arthur Andersen
LLP has not consented to the inclusion of their report in this prospectus, you
will not be able to recover against Arthur Andersen LLP under Section 11 of the
Securities Act for any untrue statements of a material fact contained in the
financial statements audited by Arthur Andersen LLP or any omissions to state a
material fact required to be stated therein.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
us by Kane Kessler, P.C., New York, New York. Any underwriters will be advised
about the other issues relating to any offering by their own legal counsel.
32
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$30,000,000
[JARDEN CORPORATION LOGO]
9 3/4% SENIOR SUBORDINATED NOTES DUE 2012
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PROSPECTUS SUPPLEMENT
MAY 1, 2003
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CIBC WORLD MARKETS BANC OF AMERICA SECURITIES LLC
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