Common use of Debt Financing Commitments Clause in Contracts

Debt Financing Commitments. On August 24, 2016, Berry Plastics Corporation entered into a commitment letter (the “Commitment Letter”) with Citigroup Global Markets Inc., Credit Suisse AG, Cayman Islands Branch and Credit Suisse Securities (USA) LLC, which letter was supplemented with a joinder on September 16, 2016 with Citigroup Global Markets Inc., Credit Suisse AG, Cayman Islands Branch and Credit Suisse Securities (USA) LLC, Barclays Bank plc, Deutsche Bank AG New York Branch, Goldman Sachs Bank USA and Wells Fargo Bank National Association (together with their affiliates, the “Incremental Lenders”) pursuant to which the Incremental Lenders agreed to lend Berry Plastics Corporation up to $500 million in incremental loans (the “Term I Loans”). The Term I Loans would be made pursuant to an agreement which supplements and amends Berry Plastics Corporation’s existing term loan agreement. The merger agreement is not subject to any financing condition, including any condition related to the consummation of the transactions contemplated by the Commitment Letter. The Incremental Lenders’ commitments to make the Term I Loans expire on February 24, 2017 subject to extension (i) to March 31, 2017, if the proxy statement has not been mailed to the AEP stockholders by January 20, 2017, and (ii) under certain other circumstances to May 24, 2017, at which point the commitments of the Incremental Lenders will expire unless the Incremental Lenders agree to extend their commitments. If the mergers are not completed before the commitments expire and the Incremental Lenders do not agree to extend their commitments, or if the financing contemplated by the Commitment Letter becomes or is expected to become unavailable, Berry is generally obligated to use its reasonable best efforts to obtain alternative financing sufficient to consummate the mergers. In such event, Berry Plastics Corporation could borrow under its revolving credit facility to the extent it has availability thereunder and can satisfy customary conditions to borrowing thereunder, and it is required to use reasonable best efforts to obtain alternative financing. Whether or not Berry Plastics Corporation could borrow under its revolving credit facility or arrange alternative financing in such event, Berry will still be obligated to close the mergers if the conditions to closing the mergers are satisfied prior to the expiration of the merger agreement. The Commitment Letter provides for the Term I Loans to bear interest based, at Berry Plastics Corporation’s option, at (a) LIBOR (but not less than 1.00%) plus an applicable margin of 2.50% to 2.75% per annum based on Berry Plastics Corporation’s total net first lien leverage ratio (with the applicable margin set at 2.75% at closing) or (b) the higher (but not less than 1.00%) of (i) the Federal Funds Effective Rate plus 1/2 of 1% and (ii) the rate of interest in effect for such day as publicly announced from time to time by Credit Suisse AG, Cayman Islands Branch as its “prime rate” at its principal office in New York, New York plus an applicable margin of 1.50% to 1.75% per annum based on Berry Plastics Corporation’s total net first lien leverage ratio (with the applicable margin set at 1.75% at closing). The Term I Loans will be guaranteed by Berry and by the direct and indirect domestic subsidiaries of Berry that guarantee indebtedness under Berry Plastics Corporation’s existing term loan and revolving credit facilities, and will be secured by liens and security interests on all or substantially all of the assets of Berry and such subsidiaries (subject to certain exceptions), on a pari passu basis with Berry Plastics Corporation’s and each guarantor’s other first lien obligations from time to time outstanding under the existing term loan and revolving credit facilities. The Term I Loans will mature seven years after the making of the Term I Loans. The Commitment Letter provides for amortization payments on the Term I Loans equal to one-quarter of one percent (0.25%) of the initial principal amount of the Term I Loans each quarter, commencing on the last day of the first full calendar quarter following the funding of the Term I Loans. The availability of the Term I Loans (which have not yet been advanced) is subject to the satisfaction (or waiver) of the conditions set forth in the Commitment Letter, including the following: • the First-Step Merger having been (or substantially contemporaneously with the borrowing of the Term I Loans, being) consummated pursuant to the merger agreement without giving effect to any amendments, modifications, supplements or waivers that are materially adverse to the Incremental Lenders; • the payment by Berry of relevant fees and expenses; • the accuracy of certain customary representations and warranties including as to the absence of a bankruptcy or payment default under Berry Plastics Corporation’s term loan agreement; • the accuracy of the representations and warranties made by or with respect to AEP and its subsidiaries in the merger agreement as are material to the interests of the Incremental Lenders (but only to the extent that Berry or its affiliates have the right (taking into account any applicable cure provisions) not to consummate the First-Step Merger, or to terminate their obligations (or otherwise do not have an obligation to close), under the merger agreement as a result of a failure of such representations in the merger agreement to be true and correct); • the refinancing of certain debt of AEP upon consummation of the First-Step Merger; • the execution and delivery of certain collateral documents; • the delivery of certain financial statements, customary opinions and certificates (including a solvency certificate); • receipt by the Incremental Lenders of “know your customer” information; • the Incremental Lenders having been afforded a customary marketing period; and • the absence of a company material adverse effect (as defined in the merger agreement).