SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 1, 1995
SILGAN CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-11200 06-1207662
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
4 Landmark Square, Stamford, Connecticut 06901
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 975-7110
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Item 2: Acquisition or Disposition of Assets.
On August 1, 1995 (the "Closing Date"), pursuant to the Asset
Purchase Agreement (the "Purchase Agreement"), dated as of June 2, 1995, between
American National Can Company, a Delaware corporation ("ANC"), and Silgan
Containers Corporation ("Containers"), a Delaware corporation and a wholly owned
subsidiary of Silgan Corporation ("Silgan"), a Delaware corporation, Containers
acquired from ANC substantially all of the assets of ANC's Food Metal and
Specialty business (the "Business"). Pursuant to the Purchase Agreement,
Containers acquired (i) substantially all of the assets of the Business (other
than the fixed assets of the Business located in California and Washington and
other than certain fixed assets of the Business located at ANC's St. Louis,
Missouri facility (the "St. Louis Assets")) (such assets so acquired being
herein called the "ANC Assets") and (ii) all of the issued and outstanding
capital stock (the "Shares") of SCCW Can Corporation ("SCCW Can"), a California
corporation and the owner of substantially all of the fixed assets of the
Business located in California and Washington (the "SCCW Assets," together with
the ANC Assets, the "Acquired Assets"). The Acquired Assets included (i) real
property located in Hoopeston, Illinois, Evansville, Indiana, Coloma, Michigan,
Savage, Minnesota, St. Paul, Minnesota and Edison, New Jersey, (ii)
substantially all of the machinery and equipment used by the Business, and (iii)
substantially all of the inventories and receivables of the Business.
Additionally, pursuant to the Purchase Agreement, Containers assumed specified
limited liabilities of ANC relating to the Business. Under the Purchase
Agreement, Containers may acquire the St. Louis Assets at a later date, all as
provided in the Purchase Agreement.
On the Closing Date, pursuant to the Purchase Agreement, in
consideration for the ANC Assets and the Shares and the assumption by Containers
of certain specified limited liabilities of the Business, Containers paid to ANC
an aggregate purchase price (the "Purchase Price") of $336,298,000, which amount
included $157,698,000 for the net working capital of the Business. The Purchase
Price is subject to adjustment as provided in the Purchase Agreement. The
Purchase Price was paid in cash and was determined as a result of an arm's
length negotiation between unrelated parties.
The Acquired Assets were used by ANC to design, develop,
manufacture, market and sell metal and rigid plastic food containers and metal
caps and closures. Containers intends to continue such use of the Acquired
Assets.
On the Closing Date, to finance the acquisition of the ANC
Assets and the Shares, Silgan, Containers and Silgan Plastics Corporation
("Plastics," and, together with Silgan and Containers, the "Borrowers"), a
Delaware corporation and wholly owned subsidiary of Silgan, entered into a $675
million credit facility pursuant to a Credit Agreement, dated as of August 1,
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1995 (the "Credit Agreement") with the lenders from time to time party thereto
(the "Banks"), Bankers Trust Company ("Bankers Trust"), as Administrative Agent
and as a Co-Arranger, and Bank of America Illinois ("Bank of America"), as
Documentation Agent and as a Co-Arranger. Containers used funds borrowed under
the Credit Agreement to finance in full the Purchase Price for its acquisition
from ANC of the Acquired Assets.
Item 5: Other Events.
Description of the Credit Agreement
On August 1, 1995, Silgan, Containers and Plastics entered
into the Credit Agreement with the Banks, Bankers Trust, as Administrative Agent
and as a Co-Arranger, and Bank of America, as Documentation Agent and as a
Co-Arranger, to (i) refinance and repay in full all amounts owing under their
previous Credit Agreement, dated as of December 21, 1993 (the "Previous Credit
Agreement"), among the Borrowers, various lenders party thereto, Bank of America
National Trust and Savings Association, as Co-Agent, and Bankers Trust, as
Agent, and (ii) finance the acquisition by Containers from ANC of the Acquired
Assets. Additionally, Silgan will use funds borrowed under the Credit Agreement
to (i) prepay in full its $50,000,000 Senior Secured Floating Rate Notes due
1997 (the "Secured Notes") by August 31, 1995, all as provided in the Credit
Agreement, and (ii) pay dividends to Silgan Holdings Inc. ("Holdings"), the
parent company of Silgan, in an amount not to exceed $75,000,000, which
dividends may be paid by Silgan to Holdings at any time through June 30, 1996
and are to be used by Holdings to repurchase its 13-1/4% Senior Discount
Debentures due 2002 (the "Debentures"). The following is a summary of the terms
of the Credit Agreement and is qualified in its entirety by reference to the
Credit Agreement, a copy of which is filed herewith.
The Available Credit Facility. Pursuant to the Credit
Agreement, the Banks loaned to Silgan (i) $175,000,000 of term loans designated
as "A Term Loans" and (ii) $225,000,000 of term loans designated as "B Term
Loans", (the A Term Loans and the B Term Loans being herein collectively
referred to as the "Term Loans"), and agreed to lend (i) to Silgan $50,000,000
of additional A Term Loans to be used by Silgan to prepay in full its Secured
Notes and (ii) to Containers or Plastics up to an aggregate of $225,000,000 of
revolving loans (the "Revolving Loans"). As part of the Revolving Loans, Bankers
Trust agreed to lend to Containers or Plastics up to an aggregate of $10,000,000
of revolving loans (the "Swingline Loans") and to issue to Containers or
Plastics for the account of Containers or Plastics up to an aggregate of
$20,000,000 of letters of credit, such Swingline Loans and letters of credit
outstanding being deducted from the amount of Revolving Loans available to be
borrowed by Containers or Plastics.
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The aggregate amount of Revolving Loans which may be
outstanding at any time is subject to a borrowing base limitation of the sum of
(i) 85% of eligible accounts receivable of Containers and its subsidiaries and
Plastics and (ii) 50% of eligible inventory of Containers and its subsidiaries
and Plastics.
Each of the Term Loans and each of the Revolving Loans, at the
respective Borrower's election, consists of loans designated as Eurodollar rate
loans or as Base Rate (as defined in the Credit Agreement) loans. Subject to
certain conditions, each of the Term Loans and each of the Revolving Loans can
be converted from a Base Rate loan into a Eurodollar rate loan and vice versa.
As of the Closing Date, the outstanding principal amounts of A
Term Loans, B Term Loans and the Revolving Loans under the Credit Agreement were
$175 million, $225 million and $112.8 million, respectively.
Security and Guarantees. To secure the obligations of the
Borrowers under the Credit Agreement: (i) Silgan pledged to the Banks all of the
capital stock of Containers and Plastics held by Silgan; (ii) Plastics pledged
to the Banks 65% of the capital stock of 827599 Ontario Inc. ("Canadian Holdco")
held by Plastics; (iii) Containers pledged to the Banks all of the capital stock
of SCCW Can held by Containers; (iv) Containers pledged to the Banks all of the
capital stock of California-Washington Can Corporation ("C-W Can"), a California
corporation and a wholly-owned subsidiary of Containers, held by Containers;
(iv) Silgan, Containers, Plastics, C-W Can and SCCW Can each granted to the
Banks security interests in substantially all of their respective real and
personal property; and (v) Holdings pledged to the Banks all of the capital
stock of Silgan held by Holdings. Such collateral (other than the collateral
described in (v)) also secures on an equal and ratable basis the Secured Notes,
subject to intercreditor arrangements, until the Secured Notes are repaid in
full.
Holdings, each of the Borrowers, C-W Can and SCCW Can have
guaranteed on a secured basis all of the obligations of the Borrowers under the
Credit Agreement.
Payment of Loans. Generally, the Revolving Loans can be
borrowed, repaid and reborrowed from time to time until December 31, 2000, on
which date all Revolving Loans mature and are payable in full. Amounts repaid
under the Term Loans cannot be reborrowed.
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The A Term Loans mature on December 31, 2000 and are payable
in installments as follows:
A Term Loan
Installment Repayment Date Principal Amount
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December 31, 1995.................................... $ 5,000,000
December 31, 1996.................................... 25,000,000
December 31, 1997.................................... 35,000,000
December 31, 1998.................................... 50,000,000
December 31, 1999.................................... 50,000,000
December 31, 2000.................................... 60,000,000
The B Term Loans mature on March 15, 2002 and are payable in
installments as follows:
B Term Loan
Installment Repayment Date Principal Amount
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December 31, 1995.................................... $ 2,250,000
December 31, 1996.................................... 2,250,000
December 31, 1997.................................... 2,250,000
December 31, 1998.................................... 2,250,000
December 31, 1999.................................... 2,250,000
December 31, 2000.................................... 42,500,000
December 31, 2001.................................... 100,000,000
March 15, 2002....................................... 71,250,000
Under the Credit Agreement, Silgan is required to repay the Terms
Loans (pro rata for each tranche of Term Loans) in an amount equal to 50% of
Silgan's Excess Cash Flow (as defined in the Credit Agreement) in any fiscal
year during the Credit Agreement (beginning with the 1996 fiscal year).
Additionally, Silgan is required to repay the Term Loans (pro rata for each
tranche of Term Loans) in an amount equal to 80% of the net sale proceeds
received from certain asset sales (increasing to 100% of such net sale proceeds
under certain circumstances as described in the Credit Agreement) and 100% of
the net equity proceeds received from certain sales of equity (subject to
certain exceptions permitting Silgan and/or Holdings to use net equity proceeds
to repay certain of their other indebtedness or to repurchase certain
outstanding capital stock of Holdings, and decreasing to 50% of net equity
proceeds received after the occurrence of certain events as described in the
Credit Agreement, all as provided in the Credit Agreement.
Interest and Fees. Interest on the Term Loans and the Revolving
Loans is payable at certain margins over certain rates as summarized below.
Interest on Term Loans maintained as Base Rate loans accrues at
floating rates of 1.5% less the then applicable Interest Reduction Discount (as
defined below) (in the case of A
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Term Loans) and 2% (in the case of B Term Loans) over the Base Rate. Interest on
Term Loans maintained as Eurodollar rate loans accrues at floating rates of 2.5%
less the then applicable Interest Reduction Discount (in the case of A Term
Loans) and 3% (in the case of B Term Loans) over a formula rate (the "Eurodollar
Rate") determined with reference to the rate offered by Bankers Trust for dollar
deposits in the New York interbank Eurodollar market. Interest on Revolving
Loans maintained as (i) Base Rate loans accrues at floating rates of 1.5%, less
the then applicable Interest Reduction Discount, plus the Base Rate or (ii)
Eurodollar Rate loans accrues at floating rates of 2.5%, less the then
applicable Interest Reduction Discount, plus the Eurodollar Rate.
Under the Credit Agreement, Silgan agreed to pay to the Banks, on a
quarterly basis, a commitment commission calculated as 1/2 of 1% per annum on
the daily average term loan commitment of the Banks until such commitment is
terminated. Each of Containers and Plastics has agreed to jointly and severally
pay to the Banks, on a quarterly basis, a commitment commission calculated as
1/2 of 1% (decreasing to 3/8 of 1% under certain circumstances, as set forth in
the Credit Agreement) per annum on the daily average unused portion of the
Banks' revolving commitment in respect of the Revolving Loans until such
revolving commitment is terminated. Additionally, Containers and Plastics are
required to pay to the Banks, on a quarterly basis in arrears, a letter of
credit fee at a rate per annum of 2.5% less the then applicable Interest
Reduction Amount, and to pay to Bankers Trust a facing fee of 1/4 of 1% per
annum, each on the average daily stated amount of each letter of credit issued
for the account of Containers or Plastics, respectively.
Certain Covenants. The Credit Agreement contains numerous financial
and operating covenants, under which Silgan and its subsidiaries must operate.
Failure to comply with any of such covenants permits the Banks to accelerate,
subject to the terms of the Credit Agreement, the maturity of all amounts
outstanding under the Credit Agreement.
The Credit Agreement restricts or limits each of the Borrowers' and
their respective subsidiaries' abilities: (i) to create certain liens; (ii) to
consolidate, merge or sell its assets and to purchase assets, except that
Holdings and Silgan may merge under certain limited circumstances and Silgan and
its subsidiaries may make certain purchases of assets and/or stock, all as
provided in the Credit Agreement; (iii) to pay dividends on, or repurchase
shares of, its capital stock, except that, among other things: (a) Silgan may
pay dividends to Holdings under certain circumstances, including (1) dividends
in amounts to allow Holdings to pay interest due on its Debentures, (2)
dividends of up to $75,000,000, provided that such dividends are paid to
Holdings on or prior to June 30, 1996 and are used by Holdings to repurchase its
Debentures, (3) dividends with the proceeds from Retained Excess Cash Flow (as
defined in the Credit
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Agreement), Refinancing Indebtedness (as defined below) issued by Silgan, or any
registered public equity offering by Silgan, provided that such dividends are
used by Holdings to repurchase, redeem or repay its Debentures or any
Refinancing Indebtedness issued by Holdings, (4) dividends under certain
circumstances as provided in the Credit Agreement to enable Holdings to
repurchase certain of its outstanding capital stock, and (5) dividends in
amounts and at the times as provided in the Credit Agreement after the
consummation of a registered public equity offering by Holdings; (b) Containers
and Plastics may pay dividends to Silgan as long as they remain wholly owned
subsidiaries of Silgan, Canadian Holdco may pay dividends to Plastics, and
Express Plastic Containers Limited ("Express") may pay dividends to Canadian
Holdco; (c) Containers and Plastics may repurchase or redeem its respective
stock options (or common stock issuable upon exercise thereof) or SARs issued to
its management under certain circumstances; and (d) Silgan may pay dividends to
the holders of its common stock in amounts and at the times as provided in the
Credit Agreement after the consummation of a registered public equity offering
by Silgan; (iv) to lease real and personal property; (v) to create additional
indebtedness, except for, among other things: (a) certain indebtedness existing
on the date of the Credit Agreement (including Silgan's indebtedness represented
by the Secured Notes, the 11-3/4% Senior Subordinated Notes due 2002 (the
"11-3/4% Notes") and by intercompany notes); (b) indebtedness of Containers to
Plastics or Plastics to Containers; (c) unsecured subordinated indebtedness of
Silgan, the proceeds of which are used to refinance, repay or redeem Silgan's
11-3/4% Notes; and (d) under certain limited circumstances, unsecured
subordinated indebtedness of Silgan, the proceeds of which are used by Silgan to
pay a dividend to Holdings, which dividend is then used by Holdings to
refinance, redeem or repay its Debentures or any Refinancing Indebtedness of
Holdings; (vi) to make certain advances, investments and loans, except for,
among other things: (a) loans from Silgan to each of Containers and Plastics
represented by intercompany notes; (b) loans from Containers to Plastics or from
Plastics to Containers; (c) loans from Containers and/or Plastics to Silgan not
exceeding $25 million in aggregate principal amount outstanding at any time; and
(d) certain limited acquisitions and investments as provided in the Credit
Agreement; (vii) to enter into transactions with affiliates; (viii) to make
certain capital expenditures, except for, among other things, capital
expenditures which do not exceed in the aggregate for the Borrowers $50 million
for the calendar year ended December 31, 1995 and $65 million for each calendar
year thereafter during the term of the Credit Agreement; provided, however, that
to the extent capital expenditures made during any period are less than the
amounts that are permitted to be made during such period, such amount may be
carried forward and utilized to make capital expenditures in the immediately
succeeding calendar year (except that no more than $10,000,000 of capital
expenditures can be carried forward from 1995 to 1996), with any such amount
being deemed utilized first in such
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succeeding calendar year; (ix) except as otherwise permitted under the Credit
Agreement, to make any voluntary payments, prepayments, acquire for value,
redeem or exchange, among other things, any 11-3/4% Notes, any of the
Debentures, or any Refinancing Indebtedness, or to make certain amendments to
the 11-3/4% Notes, the Borrowers' or their respective subsidiaries' respective
certificates of incorporation and by-laws, or to certain other agreements; (x)
with certain exceptions, to have any subsidiaries other than Containers and
Plastics with respect to Silgan, C-W Can and SCCW Can with respect to
Containers, and Canadian Holdco and Express with respect to Plastics; (xi) with
certain exceptions, to permit its respective subsidiaries to issue capital
stock; (xii) to permit its respective subsidiaries to create limitations on the
ability of any such subsidiary to (a) pay dividends or make other distributions,
(b) make loans or advances, or (c) transfer assets; (xiii) to engage in any
business other than the packaging business; and (xiv) to designate indebtedness
as "Designated Senior Indebtedness" for purposes of the 11-3/4% Notes or any
Refinancing Indebtedness issued by Silgan.
The Credit Agreement requires that Silgan own not less than 90% of
the outstanding common stock of Containers and Plastics and 100% of all other
outstanding capital stock of Containers and Plastics.
The Credit Agreement requires that the ratio of Consolidated
Current Assets (as defined below) to Consolidated Current Liabilities (as
defined below) may not, at any time, be less than 1.75:1, and that the ratio of
EBITDA (as defined below) to Interest Expense (as defined below) may not be, for
any period of four consecutive fiscal quarters (beginning with the period of
four consecutive fiscal quarters ending December 31, 1995) (in each case, taken
as one accounting period) ended during a period set forth below, less than the
ratio set forth opposite such period below:
Period Ratio
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Fiscal quarter ending December 31, 1995........................ 1.65:1
Fiscal quarter ending March 31, 1996........................... 1.65:1
Fiscal quarter ending June 30, 1996............................ 1.70:1
Fiscal quarter ending September 30, 1996....................... 1.75:1
Fiscal quarter ending December 31, 1996........................ 1.80:1
Fiscal quarter ending March 31, 1997........................... 1.80:1
Fiscal quarter ending June 30, 1997............................ 1.80:1
Fiscal quarter ending September 30, 1997....................... 1.80:1
Fiscal quarter ending December 31, 1997........................ 1.90:1
Fiscal quarter ending March 31, 1998........................... 1.90:1
Fiscal quarter ending June 30, 1998............................ 1.90:1
Fiscal quarter ending September 30, 1998....................... 1.90:1
Fiscal quarter ending December 31, 1998........................ 2.00:1
Fiscal quarter ending March 31, 1999........................... 2.00:1
Fiscal quarter ending June 30, 1999............................ 2.00:1
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Fiscal quarter ending September 30, 1999....................... 2.00:1
Fiscal quarter ending December 31, 1999........................ 2.20:1
Fiscal quarter ending March 31, 2000........................... 2.20:1
Fiscal quarter ending June 30, 2000............................ 2.20:1
Fiscal quarter ending September 30, 2000....................... 2.20:1
Fiscal quarter ending December 31, 2000........................ 2.40:1
Fiscal quarter ending March 31, 2001........................... 2.40:1
Fiscal quarter ending June 30, 2001............................ 2.40:1
Fiscal quarter ending September 30, 2001....................... 2.40:1
Fiscal quarter ending December 31, 2001........................ 2.50:1
and each fiscal quarter thereafter
In addition, the Credit Agreement requires that the Leverage Ratio (as defined
below) for any Test Period (as defined below) ended on the last day of a fiscal
quarter set forth below is not permitted to exceed the ratio set forth opposite
such fiscal quarter below:
Date Ratio
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Fiscal quarter ending December 31, 1995........................ 5.10:1
Fiscal quarter ending March 31, 1996........................... 5.10:1
Fiscal quarter ending June 30, 1996............................ 5.10:1
Fiscal quarter ending September 30, 1996....................... 5.10:1
Fiscal quarter ending December 31, 1996........................ 4.60:1
Fiscal quarter ending March 31, 1997........................... 4.60:1
Fiscal quarter ending June 30, 1997............................ 4.60:1
Fiscal quarter ending September 30, 1997....................... 4.60:1
Fiscal quarter ending December 31, 1997........................ 4.30:1
Fiscal quarter ending March 31, 1998........................... 4.30:1
Fiscal quarter ending June 30, 1998............................ 4.30:1
Fiscal quarter ending September 30, 1998....................... 4.30:1
Fiscal quarter ending December 31, 1998........................ 4.00:1
Fiscal quarter ending March 31, 1999........................... 4.00:1
Fiscal quarter ending June 30, 1999............................ 4.00:1
Fiscal quarter ending September 30, 1999....................... 4.00:1
Fiscal quarter ending December 31, 1999........................ 3.75:1
Fiscal quarter ending March 31, 2000........................... 3.75:1
Fiscal quarter ending June 30, 2000............................ 3.75:1
Fiscal quarter ending September 30, 2000....................... 3.75:1
Fiscal quarter ending December 31, 2000........................ 3.50:1
Fiscal quarter ending March 31, 2001........................... 3.50:1
Fiscal quarter ending June 30, 2001............................ 3.50:1
Fiscal quarter ending September 30, 2001....................... 3.50:1
Fiscal quarter ending December 31, 2001........................ 3.00:1
and each fiscal quarter thereafter
"Consolidated Current Assets" means the current assets of Holdings
and its subsidiaries determined on a consolidated basis, provided that the
unused amounts of commitments for Revolving Loans are included as current assets
of Holdings in making such determination.
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"Consolidated Current Liabilities" means the current liabilities of
Holdings and its subsidiaries determined on a consolidated basis, provided that
the current portion of loans under the Credit Agreement, the current portion of
any loans made by Silgan to Containers or Plastics, and accrued interest on the
current portion of loans under the Credit Agreement, the 11-3/4% Notes, the
Debentures or any Refinancing Indebtedness from the last regularly scheduled
interest payment date shall not be considered current liabilities for the
purposes of making such determination.
"EBIT" means for any period the consolidated net income of Holdings
and its subsidiaries, before interest expense and provision for taxes and
without giving effect to any extraordinary noncash gains or extraordinary
noncash losses and gains or losses from sales of assets (other than sales of
inventory in the ordinary course of business), or any noncash adjustments
resulting from changes in value of employee stock options.
"EBITDA" means for any period, EBIT, adjusted by adding thereto the
amount of all depreciation and all amortization of intangibles (including
covenants not to compete), goodwill and loan fees that were deducted in arriving
at EBIT for such period.
"Indebtedness" means, as to any person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
person for borrowed money or for the deferred purchase price of property or
services, (ii) the face amount of all letters of credit issued for the account
of such person and all drafts drawn thereunder, (iii) all liabilities secured by
any lien on any property owned by such person, whether or not such liabilities
have been assumed by such person, (iv) the aggregate amount required to be
capitalized under leases under which such person is the lessee and (v) all
contingent obligations of such person.
"Interest Expense" means, for any period, the total consolidated
interest expense of Holdings and its subsidiaries for such period (without
giving effect to any amortization of upfront fees and expenses in connection
with any debt issuance).
"Interest Reduction Discount" means initially zero, and, from and
after September 30, 1996, the percentage set forth in clause (A), (B), (C), (D),
(E) or (F) below to the extent applicable:
(A) 1/4 of 1% if, but only if, the Modified Leverage Ratio for the
current Test Period is less than or equal to 3.75:1.00;
(B) 1/2 of 1% if, but only if, the Modified Leverage Ratio for the
current Test Period is less than or equal to 3.375:1.00;
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(C) 3/4 of 1% if, but only if, the Modified Leverage Ratio for the
current Test Period is less than or equal to 3.00:1.00;
(D) 1% if, but only if, the Modified Leverage Ratio for the current
Test Period is less than or equal to 2.625:1.00;
(E) 1-1/4% if, but only if, the Modified Leverage Ratio for the
current Test Period is less than or equal to 2.25:1.00;
(F) 1-1/2% if, but only if, the Modified Leverage Ratio for the
current Test Period is less than or equal to 1.875:1.00;
Notwithstanding anything to the contrary above in this definition,
(i) if Silgan's long-term Indebtedness receives a stated "senior implied" rating
of at least BBB- from Standard & Poor's Ratings Group or at least Baa3 from
Moody's Investors Service, Inc., then from the date that is the first business
day of the fiscal quarter of Silgan following the fiscal quarter containing the
first date that either such rating is announced and for so long as such rating
remains in effect, the Interest Reduction Discount will be 1-1/2% and (ii) the
Interest Reduction Discount will be reduced to zero at all times when a default
or an event of default under the Credit Agreement exists.
"Letter of Credit Outstandings" means, at any time, the sum of (i)
the aggregate stated amount of all outstanding letters of credit issued under
the Credit Agreement and (ii) the amount of all unpaid drawings for letters of
credit issued under the Credit Agreement.
"Leverage Ratio" means, for any period, the ratio of (x) the sum of
(I) Total Indebtedness (excluding Revolving Outstandings) as of the last day of
such period plus (II) the Revolving Outstandings on the December 31st
immediately preceding the last day of such period (or, in the case of a Test
Period ended on December 31 in any fiscal year, the Revolving Outstandings on
such December 31) to (y) EBITDA for then the most recently ended Test Period.
"Modified Leverage Ratio" means, at any time, the ratio of (x) the
sum of (I) Total Consolidated Term Debt at such time plus (II) the Revolving
Outstandings on the December 31st immediately preceding the last day of the
applicable period (or, in the case of a Test Period ended on December 31 in any
fiscal year, the Revolving Outstandings on such December 31) to (y) EBITDA for
the then most recently ended Test Period.
"Refinancing Indebtedness" means (i) any Indebtedness incurred as
permitted by the Credit Agreement the proceeds of which are used to refinance,
redeem or repay outstanding 11-3/4% Notes, Debentures and/or any Refinancing
Indebtedness previously issued by Holdings or (ii) any Indebtedness of Holdings
incurred
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pursuant to the Holdings Guaranty the proceeds of which are used to refinance,
redeem or repay outstanding Debentures.
"Revolving Outstandings" means, at any time, the sum of the
aggregate principal amount of Revolving Loans and Swingline Loans then
outstanding plus the aggregate amount of all Letter of Credit Outstandings at
such time.
"Test Period" shall mean each period of four consecutive fiscal
quarters of Holdings (in each case taken as one accounting period), provided
that the first Test Period shall end on December 31, 1995.
"Total Consolidated Term Debt" means, at any time, the sum of (1)
the aggregate principal amount of Term Loans then outstanding, (2) the aggregate
accreted principal amount of Debentures then outstanding, (3) the aggregate
principal amount of 11-3/4% Notes then outstanding, (4) the aggregate principal
amount (or accreted amount if issued at a discount) of all Refinancing
Indebtedness then outstanding, (5) the aggregate principal amount of all
Indebtedness then outstanding that was assumed in connection with an acquisition
permitted under the Credit Agreement, and (6) the aggregate principal amount of
certain promissory notes then outstanding that were issued by Holdings pursuant
to the Holdings Guaranty which notes provide for the current payment of interest
in cash.
"Total Indebtedness" means the aggregate Indebtedness of Holdings
and its subsidiaries determined on a consolidated basis, provided that, in
making such determination, Indebtedness consisting of capitalized lease
obligations existing as of the effective date of the Credit Agreement or
permitted to be incurred pursuant to the Credit Agreement are excluded.
For purposes of the various computations under the Credit
Agreement, including the ratio of EBITDA to Interest Expense and the Leverage
Ratio, (i) all computations utilize accounting principles in conformity with
those used to prepare the statements of consolidated and consolidating financial
condition of Holdings and its subsidiaries and Silgan and its subsidiaries at
December 31, 1994 and the related consolidated and consolidating statements of
income and cash flow of Holdings and its subsidiaries and Silgan and its
subsidiaries for the fiscal year ended December 31, 1994, as audited by Ernst &
Young, and (ii) no effect is given to certain other matters as provided in the
Credit Agreement.
The ability of Holdings to take certain actions is restricted or
limited pursuant to the terms of the Second Amended and Restated Guaranty, dated
as of June 30, 1989, as amended and restated as of June 18, 1992, as further
amended and restated as of December 21, 1993, and as further amended and
restated as of August 1, 1995, made by Holdings in favor of the Banks, Bankers
Trust, as Administrative Agent and as a Co-Arranger, and Bank of
-12-
<PAGE>
America, as Documentation Agent and as a Co-Arranger (the "Holdings Guaranty").
The Holdings Guaranty restricts or limits Holdings' ability to, among other
things: (i) create certain liens, (ii) incur additional indebtedness, except
that, among other things, Holdings may incur unsecured subordinated Indebtedness
the proceeds of which are used to refinance, redeem or repay its Debentures or
any Refinancing Indebtedness of Holdings, (iii) consolidate, merge or sell its
assets and purchase or lease assets, except that Holdings may merge with Silgan
to the extent that such merger is permitted under the Credit Agreement, (iv) pay
dividends, except that, among other things, Holdings may pay dividends to the
holders of its common stock in amounts and at the times as provided in the
Credit Agreement after the consummation of a registered public equity offering
by Holdings, (v) make loans or advances, except that, among other things,
Holdings may make advances to Silgan as permitted under the Credit Agreement,
and (vi) engage in any business other than holding Silgan's common stock and
certain other limited matters permitted by the Holding Guaranty.
Events of Default. Events of default under the Credit Agreement
include, with respect to each of the Borrowers, as the case may be, among
others: (i) the failure to pay any principal on the Term Loans or the Revolving
Loans, the failure to reimburse drawings under any letters of credit when due or
the failure to pay within two business days after the date such payment is due
interest on the Term Loans, the Revolving Loans or any unpaid drawings under any
letter of credit or any fees or other amounts owing under the Credit Agreement;
(ii) subject to certain limited exceptions, any failure to pay amounts due under
certain other agreements or any defaults that result in or permit the
acceleration of certain other indebtedness; (iii) subject to certain limited
exceptions, the breach of any covenants, representations or warranties contained
in the Credit Agreement or any related document; (iv) certain events of
bankruptcy, insolvency or dissolution; (v) the occurrence of certain judgments,
writs of attachment or similar process against any of the Borrowers or any of
their respective subsidiaries; (vi) the occurrence of certain ERISA related
liabilities; (vii) a default under or invalidity of the guarantees (including an
event of default under the Holdings Guaranty) or of the security interests
granted to the Banks pursuant to the Credit Agreement; (viii) the failure of
Holdings to own 100% of the capital stock of Silgan; and (ix) a Change of
Control (as defined in the Credit Agreement) shall occur; and (x) the
requirement that Silgan repurchase 25% or more of the aggregate principal amount
of the Secured Notes then outstanding or any 11-3/4% Note or that Holdings
repurchase any Debenture, in any case as a result of a Change of Control (as
defined in the agreements and indentures relating thereto).
Upon the occurrence of any event of default under the Credit
Agreement, the Banks are permitted, among other things, to accelerate the
maturity of the Term Loans and the Revolving Loans and all other outstanding
indebtedness under the Credit Agreement
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<PAGE>
and terminate their commitment to make any further Revolving Loans or to issue
any letters of credit.
In connection with the Credit Agreement, the Banks (including
Bankers Trust) received certain fees amounting to $17.2 million.
Item 7: Financial Statements and Exhibits.
(a) and (b) Financial Statements of Business Acquired and
Pro Forma Financial Information
It is impracticable at this time to file the financial statements
and pro forma financial information required to be filed pursuant to Item 7 of
Form 8-K. Such financial statements and pro forma financial information will be
filed, as soon as practicable, but not later than 60 days from the date hereof.
(c) Exhibits
(1) Asset Purchase Agreement, dated as of June 2, 1995, between
American National Can Company and Silgan Containers Corporation.
(2) Credit Agreement, dated as of August 1, 1995, among Silgan
Corporation, Silgan Containers Corporation, Silgan Plastics Corporation, various
banks, Bankers Trust Company, as Administrative Agent and as a Co-Arranger, and
Bank of America Illinois, as Documentation Agent and as a Co-Arranger.
(3) Second Amended and Restated Guaranty, dated as of June 18,
1992, as amended and restated as of December 21, 1993, and as further amended
and restated as of August 1, 1995, made by Silgan Corporation, Silgan Containers
Corporation and Silgan Plastics Corporation.
(4) Second Amended and Restated Guaranty, dated as of June 30,
1989, as amended and restated as of June 18, 1992, as further amended and
restated as of December 21, 1993, and as further amended and restated as of
August 1, 1995, made by Silgan Holdings Inc. (incorporated by reference to
Exhibit 4 to Holdings' Current Report on Form 8-K, dated August 14, 1995).
In accordance with Item 601(b)(2) of Regulation S-K, the schedules,
exhibits and annexes referenced in the Purchase Agreement, the Credit Agreement,
and the Guaranties referenced above have not been filed as part of the exhibits
to this Form 8- K. The Registrant agrees to furnish supplementary a copy of the
omitted schedules, exhibits and annexes to the Commission upon request.
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SILGAN CORPORATION
By:/s/ Harley Rankin, Jr.
----------------------
Harley Rankin, Jr.
Executive Vice President,
Chief Financial Officer
and Treasurer
Date: August 14, 1995
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<PAGE>
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CREDIT AGREEMENT
among
SILGAN CORPORATION,
SILGAN CONTAINERS CORPORATION,
SILGAN PLASTICS CORPORATION,
VARIOUS BANKS,
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT,
BANK OF AMERICA
ILLINOIS,
AS DOCUMENTATION AGENT,
and
BANKERS TRUST COMPANY and BANK OF AMERICA ILLINOIS,
as CO-ARRANGERS
--------------------------------------------------
Dated as of August 1, 1995
--------------------------------------------------
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<PAGE>
TABLE OF CONTENTS
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Page
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Section 1. Amount and Terms of Credit..................................... 1
1.01 Commitments.................................................. 1
1.02 Minimum Amount of Each Borrowing............................. 5
1.03 Notice of Borrowing.......................................... 6
1.04 Disbursement of Funds........................................ 7
1.05 Notes........................................................ 7
1.06 Conversions.................................................. 9
1.07 Pro Rata Borrowings.......................................... 10
1.08 Interest..................................................... 10
1.09 Interest Periods............................................. 11
1.10 Increased Costs, Illegality, etc............................. 12
1.11 Compensation................................................. 14
1.12 Change of Applicable Lending Office.......................... 14
1.13 Replacement of Banks......................................... 15
1.14 Eurodollar Loans Prior to the Syndication Date............... 16
Section 2. Letters of Credit.............................................. 16
2.01 Letters of Credit............................................ 16
2.02 Minimum Stated Amount........................................ 18
2.03 Letter of Credit Requests.................................... 18
2.04 Letter of Credit Participations.............................. 18
2.05 Agreement to Repay Letter of Credit Drawings................. 20
2.06 Increased Costs.............................................. 21
Section 3. Fees; Commitments; Reductions of Commitments................... 22
3.01 Fees......................................................... 22
3.02 Voluntary Termination of Revolving Commitments............... 23
3.03 Mandatory Reduction or Termination of Commitments............ 24
Section 4. Prepayments; Payments; Commitment Reductions................... 25
4.01 Voluntary Prepayments........................................ 25
4.02 Mandatory Prepayments; Commitment and Available
Amount Reductions......................................... 26
4.03 Method and Place of Payment.................................. 32
4.04 Net Payments................................................. 32
(i)
<PAGE>
Page
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Section 5. Conditions Precedent........................................... 34
5.01 Conditions to Loans on the Initial Borrowing Date............ 34
(a) Execution of Agreement; Notes.......................... 34
(b) Officer's Certificate.................................. 34
(c) Opinions of Counsel.................................... 34
(d) Corporate D cuments; Proceedings....................... 34
(e) Plans; Shareholders' Agreements;
Management Agreements; Debt Agreements............... 35
(f) Repayment and Termination of Commitments
under the Existing Credit Agreements................. 35
(g) The Acquisition........................................ 36
(h) Guaranties............................................. 36
(i) Contribution Agreement................................. 36
(j) Pledge Agreements...................................... 36
(k) Security Agreement..................................... 37
(l) Mortgages; Title Insurance; Surveys; etc............... 38
(m) Adverse Change, etc.................................... 39
(n) Litigation............................................. 40
(o) Fees, etc.............................................. 41
(p) Solvency Certificate; Environmental Analyses........... 41
(q) Notices to Holders of Certain Indebtedness
and to the Collateral Agent.......................... 41
(r) Consent Letter......................................... 42
(s) Financial Projections.................................. 42
(t) Initial Borrowing Base Certificate and Report
of Inventory and Accounts Receivable................. 43
(u) Tax Sharing Agreement.................................. 43
(v) Insurance.............................................. 43
(w) Intercompany Agency Agreement.......................... 43
5.02 Conditions to A Term Loans on the Second Term Loan
Borrowing Date and on the Third Term Loan Borrowing Date... 44
(a) Repayment of Existing Senior Secured Note.............. 44
(b) No Specified Default................................... 44
(c) Notice of Borrowing.................................... 44
5.03 Conditions to Revolving Loans and Letters of
Credit on and after the Initial Borrowing Date............. 44
(a) No Borrowing Base Deficiency........................... 44
5.04 Conditions to All Credit Events.............................. 45
(a) No Default............................................. 45
(b) Representations and Warranties......................... 45
(c) Notice of Borrowing; Letter of Credit Request.......... 45
(ii)
<PAGE>
Page
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(d) Subsequent Legal Opinions.............................. 45
(e) No Future Advances Notice.............................. 45
Section 6. Representations, Warranties and Agreements..................... 46
6.01 Corporate Status............................................. 46
6.02 Corporate Power and Authority................................ 46
6.03 No Violation................................................. 47
6.04 Governmental Approvals....................................... 47
6.05 Pledge Agreements............................................ 47
6.06 Security Agreement; Mortgages; Real Property................. 47
6.07 Financial Statements; Financial Condition; etc............... 48
6.08 Litigation................................................... 50
6.09 True and Complete Disclosure................................. 50
6.10 Use of Proceeds; Margin Regulations.......................... 50
6.11 Tax Returns and Payments..................................... 50
6.12 Compliance with ERISA........................................ 51
6.13 Capitalization............................................... 51
6.14 Subsidiaries................................................. 52
6.15 Compliance with Statutes, etc................................ 53
6.16 Investment Company Act....................................... 54
6.17 Public Utility Holding Company Act........................... 54
6.18 Labor Relations.............................................. 54
6.19 Patents, Licenses, Franchises and Formulas................... 55
6.20 Transaction.................................................. 55
6.21 Representations and Warranties in Acquisition Documents...... 55
6.22 Subordination................................................ 55
Section 7. Affirmative Covenants.......................................... 56
7.01 Information Covenants........................................ 56
(a) Monthly Reports........................................ 56
(b) Quarterly Financial Statements......................... 56
(c) Annual Financial Statements............................ 56
(d) Management Letters..................................... 57
(e) Budgets; Forecasts..................................... 57
(f) Officer's Certificates................................. 57
(g) Notice of Default or Litigation........................ 58
(h) Other Reports and Filings.............................. 58
(i) Borrowing Base Certificate, etc........................ 58
(j) Other Information...................................... 59
7.02 Books, Records and Inspections............................... 59
7.03 Maintenance of Property, Insurance........................... 60
(iii)
<PAGE>
Page
----
7.04 Corporate Franchises......................................... 60
7.05 Compliance with Statutes, etc................................ 60
7.06 ERISA........................................................ 60
7.07 End of Fiscal Years; Fiscal Quarters......................... 61
7.08 Taxes........................................................ 61
7.09 Subsidiaries................................ ................ 61
7.10 Additional Security; Further Assurances; etc................. 62
7.11 Foreign Subsidiaries Security................................ 63
7.12 Existing Senior Secured Notes Redemption..................... 63
7.13 Real Estate Appraisals....................................... 63
Section 8. Negative Covenants............................................. 64
8.01 Liens........................................................ 64
8.02 Consolidation, Merger, Sale of Assets, etc................... 65
8.03 Dividends.................................................... 68
8.04 Leases....................................................... 72
8.05 Indebtedness................................................. 72
8.06 Advances, Investments and Loans.............................. 76
8.07 Transactions with Affiliates................................. 79
8.08 Capital Expenditures......................................... 80
8.09 Current Ratio................................................ 82
8.10 Interest Coverage Ratio...................................... 82
8.11 Leverage Ratio............................................... 83
8.12 Limitation on Voluntary Payments and Modifications
of Certain Indebtedness; Modifications of Documents,
Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc..................................... 83
8.13 Creation of Subsidiaries..................................... 84
8.14 Limitation on Restrictions on Subsidiary
Dividends and Other Distributions......................... 85
8.15 Limitation on Issuances of Capital Stock
by Subsidiaries........................................... 85
8.16 Business..................................................... 85
8.17 Change of Name............................................... 85
8.18 Designated Senior Indebtedness............................... 86
Section 9. Events of Default.............................................. 86
9.01 Payments..................................................... 86
9.02 Representations, etc......................................... 86
9.03 Covenants.................................................... 86
9.04 Default Under Other Agreements............................... 86
(iv)
<PAGE>
Page
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9.05 Bankruptcy, etc.............................................. 87
9.06 ERISA........................................................ 87
9.07 Pledge Agreements............................................ 88
9.08 Guaranties................................................... 88
9.09 Security Agreements; Mortgages; Additional
Security Documents........................................ 88
9.10 Judgments.................................................... 89
9.11 Ownership; Change of Control................................. 89
Section 10. Definitions and Accounting Terms.............................. 90
10.01 Defined Terms............................................... 90
10.02 Principles of Construction..................................121
Section 11. The Administrative Agent and the Co-Arrangers.................121
11.01 Appointment.................................................121
11.02 Nature of Duties............................................121
11.03 Lack of Reliance on the Administrative Agent and
Co-Arrangers.............................................122
11.04 Certain Rights of the Administrative Agent..................122
11.05 Reliance....................................................123
11.06 Indemnification.............................................123
11.07 The Administrative Agent and the Co-Arrangers in
Their Individual Capacity................................123
11.08 Holders.....................................................124
11.09 Resignation by the Administrative Agent and the
Co-Arrangers.............................................124
Section 12. Miscellaneous.................................................124
12.01 Payment of Expenses, etc....................................124
12.02 Right of Setoff.............................................126
12.03 Notices.....................................................126
12.04 Benefit of Agreement........................................126
12.05 No Waiver; Remedies Cumulative..............................128
12.06 Payments Pro Rata...........................................129
12.07 Calculations; Computations..................................129
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE....................................................130
12.09 Counterparts................................................131
12.10 Effectiveness...............................................131
12.11 Headings Descriptive........................................131
12.12 Amendment or Waiver.........................................131
(v)
<PAGE>
Page
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12.13 Survival....................................................133
12.14 Domicile of Loans...........................................133
12.15 Provision Inserted Pursuant to Local Real Estate Law........133
12.16 Confidentiality.............................................133
12.17 Register....................................................134
SCHEDULES
Schedule I Commitments
Schedule II Existing Letters of Credit
Schedule III Real Property
Schedule IV Insurance
Schedule V Permitted Liens
Schedule VI Existing Indebtedness
Schedule VII Mirror Intercompany Notes
Schedule VIII Certain Capitalized Leases
Schedule IX Existing Investments
Schedule X Bank Addresses
EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B-1 A Term Note
Exhibit B-2 B Term Note
Exhibit B-3 Revolving Note
Exhibit B-4 Swingline Note
Exhibit C Letter of Credit Request
Exhibit D Section 4.04(b)(ii) Certificate
Exhibit E Opinion of Winthrop, Stimson, Putnam & Roberts
Exhibit F Officers' Certificate
Exhibit G-1 Holdings Guaranty
Exhibit G-2 Borrowers Guaranty
Exhibit H-1 Second Amendment to Silgan Pledge Agreement
Exhibit H-2 Second Amendment to Subsidiaries Pledge Agreement
Exhibit H-3 Second Amendment to Holdings Pledge Agreement
Exhibit I Second Amendment to Security Agreement
Exhibit J Solvency Certificate
(vi)
<PAGE>
Exhibit K Consent Letter
Exhibit L Inventory and Accounts Receivable Report
Exhibit M Borrowing Base Certificate
Exhibit N Assignment and Assumption Agreement
(vii)
<PAGE>
CREDIT AGREEMENT, dated as of August 1, 1995, among SILGAN
CORPORATION, a Delaware corporation ("Silgan"), SILGAN CONTAINERS CORPORATION, a
Delaware corporation ("Containers"), SILGAN PLASTICS CORPORATION, a Delaware
corporation ("Plastics," and together with Silgan and Containers, the
"Borrowers," and each individually, a "Borrower"), the lenders from time to time
party hereto (each a "Bank" and, collectively, the "Banks"), BANKERS TRUST
COMPANY, as Administrative Agent (in such capacity, the "Administrative Agent"),
BANK OF AMERICA ILLINOIS, as Documentation Agent (in such capacity, the
"Documentation Agent"), and BANK OF AMERICA ILLINOIS and BANKERS TRUST COMPANY,
as Co-Arrangers (in such capacity, the "Co-Arrangers). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Banks are willing to make available to the Borrowers the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
Section 1. Amount and Terms of Credit.
1.01 Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with an A Term Loan Commitment severally
agrees to make (x) on the Initial Borrowing Date, (y) on the Second Term Loan
Borrowing Date and (z) on the Third Term Loan Borrowing Date, a term loan (each
an "A Term Loan" and, collectively, the "A Term Loans") to Silgan, which A Term
Loans:
(i) shall be made and initially maintained on each Term Loan
Borrowing Date as a single Borrowing of Base Rate Loans (subject to the
option to convert such A Term Loans pursuant to Section 1.06);
(ii) shall be made by each such Bank on each Term Loan
Borrowing Date in that initial aggregate principal amount which shall
not exceed the A Term Loan Commitment of such Bank on such date (before
giving effect to any reductions thereto on such date pursuant to
Section 3.03(b)(i)(x) but after giving effect to any reductions thereto
prior to such date pursuant to Section 3.03(b)(i)(x)
<PAGE>
or on or prior to such date pursuant to Section 3.03(b)(i)(z)) less, in
the case of A Term Loans made on the Initial Borrowing Date, such
Bank's pro rata share of the Existing Senior Secured Note Redemption
Amount on such date (with each such Bank to be allocated a percentage
of the Existing Senior Secured Note Redemption Amount as is equal to a
fraction (expressed as a percentage) the numerator of which is equal to
the A Term Loan Commitment of such Bank on the Initial Borrowing Date
(before giving effect to the incurrence of A Term Loans on such date)
and the denominator of which is equal to the Total A Term Loan
Commitment on the Initial Borrowing Date (before giving effect to the
incurrence of A Term Loans on such date)); and
(iii) shall not exceed for all Banks on the Initial Borrowing
Date, in initial aggregate principal amount, that amount which would
reduce the Total A Term Loan Commitment after giving effect to the
incurrence of A Term Loans on such date to an amount less than the
Existing Senior Secured Note Redemption Amount on such date.
Once repaid, A Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth
herein, each Bank with a B Term Loan Commitment severally agrees to make, on the
Initial Borrowing Date, a term loan (each a "B Term Loan" and, collectively, the
"B Term Loans") to Silgan, which B Term Loans:
(i) shall be made and initially maintained as a single
Borrowing of Base Rate Loans (subject to the option to convert such B
Term Loans pursuant to Section 1.06); and
(ii) shall not exceed for any Bank, in initial aggregate
principal amount, that amount which equals the B Term Loan Commitment
of such Bank on such date (before giving effect to any reductions
thereto on such date pursuant to Section 3.03(b)(ii)(x) but after
giving effect to any reductions thereto on or prior to such date
pursuant to Section 3.03(b)(ii)(y)).
Once repaid, B Term Loans incurred hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth
herein, each Bank with a Revolving Loan Commitment severally agrees, at any time
and from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, to make a revolving loan or revolving loans (each
a "Revolving Loan" and, collectively, the "Revolving Loans") to Containers or
Plastics, as the case may be, which Revolving Loans:
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<PAGE>
(i) shall, at the option of Containers or Plastics, as the
case may be, be either Base Rate Loans or Eurodollar Loans, provided
that (A) all Revolving Loans made as part of the same Borrowing shall,
unless otherwise specifically provided herein, be of the same Type and
(B) no Revolving Loans maintained as Eurodollar Loans may be incurred
prior to the Syndication Date;
(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iii) shall not exceed for any Bank at any time outstanding
that aggregate principal amount which, when added to the product of (A)
such Bank's Percentage and (B) the sum of (I) the aggregate amount of
all Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time and (II)
the aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) then outstanding, equals the Available Revolving Loan
Commitment of such Bank at such time;
(iv) shall not exceed for all Banks at any time outstanding
that aggregate principal amount which, when added to (x) the amount of
all Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time and (y)
the aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) then outstanding, equals an amount equal to the
Borrowing Base at such time; and
(v) shall not exceed for all Banks at any time outstanding
that aggregate principal amount which, when added to (x) the amount of
all Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time and (y)
the aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) then outstanding, equals the Total Available Revolving
Loan Commitment at such time.
(d) Subject to and upon the terms and conditions set forth
herein, BTCo in its individual capacity agrees to make, at any time and from
time to time on and after
-3-
<PAGE>
the Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving
loan or revolving loans (each a "Swingline Loan" and, collectively, the
"Swingline Loans") to Containers or Plastics, as the case may be, which
Swingline Loans:
(i) shall be made and maintained as Base Rate Loans;
(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iii) shall not exceed in aggregate principal amount at any
time outstanding, when added to (x) the aggregate principal amount of
all Revolving Loans then outstanding and (y) all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, an amount equal to the
Borrowing Base at such time;
(iv) shall not exceed in aggregate principal amount at any
time outstanding, when added to (x) the aggregate principal amount of
all Revolving Loans then outstanding and (y) all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, an amount equal to the
Total Available Revolving Loan Commitment at such time; and
(v) shall not exceed in aggregate principal amount at any
time outstanding the Maximum Swingline Amount.
BTCo shall not be obligated to make any Swingline Loans to
Containers or Plastics at a time when a Bank Default exists unless BTCo has
entered into arrangements satisfactory to it and Containers or Plastics, as the
case may be, to eliminate BTCo's risk with respect to the Bank which is the
subject of such Bank Default, including by cash collateralizing such Bank's
Percentage of the outstanding Swingline Loans. Notwithstanding anything to the
contrary in this Section 1.01(d), BTCo will not make a Swingline Loan after it
has received written notice from the Required Banks stating that a Default or an
Event of Default is then in existence and specifically requesting that BTCo not
make any Swingline Loan, provided that BTCo may continue making Swingline Loans
at such time thereafter as the respective Default or Event of Default has been
cured or waived in accordance with the requirements of this Agreement or the
Required Banks have withdrawn the written notice described above in this
sentence.
(e) On any Business Day, BTCo may, in its sole discretion,
give notice to the Banks that its outstanding Swingline Loans shall be funded
with a Borrowing of Revolving Loans (provided that such notice shall be deemed
to have been automatically
-4-
<PAGE>
given upon the occurrence of a Default or an Event of Default under Section 9.05
or 9.11(ii) of this Agreement or Section 9(e) of the Holdings Guaranty with
respect to Holdings or upon the exercise of any of the remedies provided in the
last paragraph of Section 9 of this Agreement), in which case a Borrowing of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day from all
Banks with a Revolving Loan Commitment (without giving effect to any termination
thereof pursuant to the last paragraph of Section 9) pro rata based on each such
Bank's Percentage (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 9), and the
proceeds thereof shall be applied directly to BTCo to repay BTCo for such
outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by BTCo notwithstanding (i) the amount of
the Mandatory Borrowing may not comply with the minimum amount for Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Section 5
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the date of such Mandatory Borrowing and (v) the amount of the Borrowing
Base or the Total Available Revolving Loan Commitment at such time. In the event
that any Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding of the type referred to in Section 9.05 with respect to any of
the Borrowers), then each such Bank hereby agrees that it shall forthwith
purchase (as of the date the Mandatory Borrowing would otherwise have occurred,
but adjusted for any payments received from Containers or Plastics, as the case
may be, on or after such date and prior to such purchase) from BTCo such
participations in the outstanding Swingline Loans as shall be necessary to cause
such Banks to share in such Swingline Loans ratably based upon their respective
Percentages (determined before giving effect to any termination of the Revolving
Loan Commitments pursuant to the last paragraph of Section 9); provided, that
(x) all interest payable on the Swingline Loans shall be for the account of BTCo
until the date as of which the respective participation is required to be
purchased and, to the extent attributable to the purchased participation, shall
be payable to the participant from and after such date and (y) at the time any
purchase of participations pursuant to this sentence is actually made, the
purchasing Bank shall be required to pay BTCo interest on the principal amount
of participation purchased for each day from and including the day upon which
the Mandatory Borrowing would otherwise have occurred to but excluding the date
of payment for such participation, at the overnight Federal Funds Rate for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. (a) The aggregate
principal amount of each Borrowing of any Tranche of Term Loans shall not be
less than $5,000,000.
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(b) The aggregate principal amount of each Borrowing of
Revolving Loans shall be not less than $2,500,000, except that Mandatory
Borrowings shall be made in the amounts required by Section 1.01(e).
(c) The aggregate principal amount of each Borrowing of
Swingline Loans shall be not less than $250,000.
(d) More than one Borrowing may occur on the same date, but at
no time shall there be outstanding more than twenty Borrowings of Eurodollar
Loans.
1.03 Notice of Borrowing. (a) Whenever a Borrower desires to
incur Term Loans or Revolving Loans hereunder (excluding Revolving Loans
incurred pursuant to a Mandatory Borrowing), it shall give the Administrative
Agent at its Notice Office at least one Business Day's prior notice of each Base
Rate Loan and at least three Business Days' prior notice of each Eurodollar Loan
to be incurred hereunder; provided that any such notice shall be deemed to have
been given on a certain day only if given before 12:00 Noon (New York time) on
such day. Each such notice (each a "Notice of Borrowing"), except as otherwise
expressly provided in Section 1.10, shall be irrevocable and shall be given by
the respective Borrower in the form of Exhibit A, appropriately completed to
specify the name of such Borrower, the aggregate principal amount of the Loans
to be made pursuant to such Borrowing, the date of such Borrowing (which shall
be a Business Day), whether the Loans being made pursuant to such Borrowing
shall constitute A Term Loans, B Term Loans or Revolving Loans and whether the
Loans being made pursuant to such Borrowing are to be initially maintained as
Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the initial
Interest Period to be applicable thereto. The Administrative Agent shall
promptly give each Bank which is required to make Loans of the Tranche specified
in the respective Notice of Borrowing, notice of such proposed Borrowing, of
such Bank's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
(b) (i) Whenever Containers or Plastics desires to incur
Swingline Loans hereunder, it shall give BTCo not later than 1:00 P.M. (New York
time) on the date that a Swingline Loan is to be incurred hereunder, written
notice or telephonic notice promptly confirmed in writing of each Swingline Loan
to be incurred hereunder. Each such notice shall be irrevocable and specify in
each case (A) the date of Borrowing (which shall be a Business Day) and (B) the
aggregate principal amount of the Swingline Loans to be made pursuant to such
Borrowing.
(ii) Without in any way limiting the obligation of Containers
or Plastics to confirm in writing any telephonic notice of such Borrowing of
Swingline Loans, BTCo may act without liability upon the basis of telephonic
notice of such Borrowing, believed by BTCo in good faith to be from the
President, a Vice President, the Treasurer or an
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Assistant Treasurer of such Borrower (or any other officer or employee of such
Borrower designated in writing to BTCo by the President, a Vice President, the
Treasurer or an Assistant Treasurer of such Borrower as being authorized to give
such notices under this Agreement) prior to receipt of written confirmation. In
each such case, each of Containers and Plastics hereby waives the right to
dispute BTCo's record of the terms of such telephonic notice of such Borrowing
of Swingline Loans.
(iii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(e), with Containers and Plastics irrevocably agreeing,
by its incurrence of any Swingline Loan, to the making of Mandatory Borrowings
as set forth in Section 1.01(e).
1.04 Disbursement of Funds. No later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than 3:00 P.M. (New York time) on the date specified
pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no
later than 12:00 Noon (New York time) on the date specified in Section 1.01(e)),
each Bank with a Commitment of the respective Tranche will make available its
pro rata portion of each such Borrowing requested to be made on such date (or in
the case of Swingline Loans, BTCo shall make available the full amount thereof).
All such amounts shall be made available in Dollars and in immediately available
funds at the Payment Office of the Administrative Agent, and the Administrative
Agent will make available to the relevant Borrower at the Payment Office the
aggregate of the amounts so made available by the Banks. Unless the
Administrative Agent shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the Administrative
Agent such Bank's portion of any Borrowing to be made on such date, the
Administrative Agent may assume that such Bank has made such amount available to
the Administrative Agent on such date of Borrowing and the Administrative Agent
may, in reliance upon such assumption, make available to the relevant Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Bank, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
relevant Borrower and such Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or such Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to such
Borrower until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, at the overnight Federal Funds Rate and (ii) if recovered from such
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its
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obligation to make Loans hereunder or to prejudice any rights which the Borrower
may have against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) Each Borrower's obligation to pay the
principal of, and interest on, all the Loans made by each Bank to such Borrower
shall be evidenced (i) if A Term Loans, by a promissory note duly executed and
delivered by Silgan substantially in the form of Exhibit B-1 (each an "A Term
Note" and, collectively, the "A Term Notes"), (ii) if B Term Loans, by a
promissory note duly executed and delivered by Silgan substantially in the form
of Exhibit B-2 (each a "B Term Note" and, collectively, the "B Term Notes"),
(iii) if Revolving Loans, by promissory notes duly executed and delivered by
each of Containers and Plastics substantially in the form of Exhibit B-3 (each a
"Revolving Note" and, collectively, the "Revolving Notes") and (iv) if Swingline
Loans, by promissory notes duly executed and delivered by each of Containers and
Plastics to BTCo substantially in the form of Exhibit B-4 (each a "Swingline
Note and, collectively the Swingline Notes"), in each case with blanks
appropriately completed in conformity herewith.
(b) The A Term Note issued by Silgan to each Bank with an A
Term Loan Commitment shall (i) be payable to the order of such Bank and be dated
the Initial Borrowing Date, (ii) be in a stated principal amount equal to the A
Term Loan Commitment of such Bank on the Initial Borrowing Date (before giving
effect to the incurrence of any A Term Loans on such date) and be payable in the
outstanding principal amount of A Term Loans evidenced thereby, (iii) mature on
the A Term Loan Maturity Date, (iv) bear interest as provided in the appropriate
clause of Section 1.08 in respect of Base Rate Loans and Eurodollar Loans, as
the case may be, evidenced thereby, (v) be subject to mandatory repayment as
provided in Section 4.02 and (vi) be entitled to the benefits of this Agreement
and the other Credit Documents.
(c) The B Term Note issued by Silgan to each Bank with a B
Term Loan Commitment shall (i) be payable to the order of such Bank and be dated
the Initial Borrowing Date, (ii) be in a stated principal amount equal to the
principal amount of the B Term Loans made by such Bank on the Initial Borrowing
Date and be payable in the principal amount of the B Term Loans evidenced
thereby, (iii) mature on the B Term Loan Maturity Date, (iv) bear interest as
provided in the appropriate clause of Section 1.08 in respect of Base Rate Loans
and Eurodollar Loans, as the case may be, evidenced thereby, (v) be subject to
mandatory repayment as provided in Section 4.02 and (vi) be entitled to the
benefits of this Agreement and the other Credit Documents.
(d) The Revolving Note issued by each of Containers and
Plastics to each Bank with a Revolving Loan Commitment shall (i) be payable to
the order of such Bank and be dated the Initial Borrowing Date, (ii) be in a
stated principal amount equal to the Revolving Loan Commitment of such Bank and
be payable in the outstanding principal
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amount of the Revolving Loans to Containers or Plastics, as the case may be,
evidenced thereby, (iii) mature on the Revolving Loan Maturity Date, (iv) bear
interest as provided in the appropriate clause of Section 1.08 in respect of
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (v)
be subject to mandatory repayment as provided in Section 4.02 and (vi) be
entitled to the benefits of this Agreement and the other Credit Documents.
(e) The Swingline Note issued by each of Containers and
Plastics to BTCo shall (i) be payable to the order of BTCo and be dated the
Initial Borrowing Date, (ii) be in a stated principal amount equal to the
Maximum Swingline Amount and be payable in the outstanding principal amount of
Swingline Loans to Containers or Plastics, as the case may be, evidenced
thereby, (iii) mature on the Swingline Expiry Date, (iv) bear interest as
provided in the appropriate clause of Section 1.08 in the case of the Base Rate
Loans evidenced thereby, (v) be subject to mandatory repayment as provided in
Section 4.02 and (vi) be entitled to the benefits of this Agreement and the
other Credit Documents.
(f) Each Bank will note on its internal records the amount of
each Loan made by it and each payment and conversion in respect thereof and will
prior to any transfer of any of its Notes endorse on the reverse side thereof
the outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the respective Borrower's obligations in respect
of such Loans.
1.06 Conversions. Each Borrower shall have the option to
convert, on any Business Day occurring on or after the Syndication Date, all or
a portion equal to at least $5,000,000 in the case of a Borrowing of any Tranche
of Term Loans and equal to at least $2,500,000 in the case of a Borrowing of
Revolving Loans of the outstanding principal amount of such Loans made to such
Borrower pursuant to one or more Borrowings (so long as of the same Tranche) of
one or more Types of Loans into a Borrowing (of the same Tranche) of another
Type of Loan, provided that (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Loans being converted and no such partial
conversion of Eurodollar Loans shall reduce the outstanding principal amount of
such Eurodollar Loans made pursuant to a single Borrowing to less than
$5,000,000 in the case of a Borrowing of any Tranche of Term Loans and to less
than $2,500,000 in the case of a Borrowing of Revolving Loans, (ii) Base Rate
Loans may only be converted into Eurodollar Loans if no Default or Event of
Default is in existence on the date of the conversion, (iii) no conversion
pursuant to this Section 1.06 shall result in a greater number of Borrowings of
Eurodollar Loans than is permitted under Section 1.02 and (iv) Swingline Loans
may not be converted pursuant to this Section 1.06. Each conversion pursuant to
this Section 1.06 shall be effected by the respective Borrower by giving the
Administrative Agent at its Notice Office prior to 12:00 Noon (New York time) at
least three Business Days' prior notice (each a "Notice of Conversion")
specifying the Loans to be so converted, the Borrowing(s) pursuant
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to which such Loans were made and, if to be converted into Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Bank prompt notice of any such proposed conversion affecting any
of its Loans. Upon any such conversion the proceeds thereof will be applied
directly on the day of such conversion to prepay the outstanding principal
amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of A Term Loans, B
Term Loans and Revolving Loans shall be incurred from the Banks pro rata on the
basis of their A Term Loan Commitments, B Term Loan Commitments or Revolving
Loan Commitments, as the case may be. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans provided to be
made by it hereunder, regardless of the failure of any other Bank or Banks to
make its or their Loans hereunder.
1.08 Interest. (a) Each Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan made to such
Borrower hereunder from the date the proceeds thereof are made available to such
Borrower until the maturity thereof (whether by acceleration or otherwise) at a
rate per annum which shall be equal to the sum of the Applicable Margin plus the
Base Rate in effect from time to time.
(b) Each Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan made to such Borrower from the
date the proceeds thereof are made available to such Borrower until the maturity
thereof (whether by acceleration or otherwise) at a rate per annum which shall,
during each Interest Period applicable thereto, be equal to the sum of the
Applicable Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to the
greater of (x) 2% per annum in excess of the rate otherwise applicable to Base
Rate Loans of the respective Tranche from time to time and (y) the rate which is
2% in excess of the rate then borne by such Loans, in each case with such
interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three-month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
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(e) Upon each Interest Determination Date, the Administrative
Agent shall determine the interest rate for the Eurodollar Loans for which such
determination is being made and shall promptly notify the respective Borrower
and the respective Banks thereof. Each such determination shall, absent manifest
error, be final and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or on the third Business Day prior to the expiration
of an Interest Period applicable to such a Borrowing of Eurodollar Loans (in the
case of subsequent Interest Periods), the respective Borrower shall have the
right to elect, by giving the Administrative Agent notice thereof, the interest
period (each an "Interest Period") applicable to such Borrowing, which Interest
Period shall, at the option of such Borrower, be either a one, two, three, six
or, to the extent available to all Banks with obligations in respect of the
respective Tranche of Loans, twelve month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including
the date of any conversion thereto from a Loan of a different Type) and
each Interest Period occurring thereafter in respect of such Eurodollar
Loan shall commence on the day on which the next preceding Interest
Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(v) no Interest Period may be selected at any time when an
Event of Default is then in existence;
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(vi) no Interest Period in respect of any Borrowing of A Term
Loans or B Term Loans shall be selected which extends beyond any date
upon which a mandatory repayment of A Term Loans or B Term Loans, as
the case may be, will be required to be made under Section 4.02(c) or
4.02(d), as the case may be, if the aggregate principal amount of A
Term Loans or B Term Loans, as the case may be, which have Interest
Periods which will expire after such date will be in excess of the
aggregate principal amount of A Term Loans or B Term Loans, as the case
may be, then outstanding less the aggregate amount of such required
repayment; and
(vii) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the respective
Maturity Date for such Tranche of Loans.
If, upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the relevant Borrower has failed to elect, or is
not permitted to elect, a new Interest Period to be applicable to such
Eurodollar Loans as provided above, such Borrower shall be deemed to have
elected to convert such Eurodollar Loans into Base Rate Loans effective as of
the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
any Bank shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the Effective Date affecting the interbank
Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans because of (x) any change since the
Effective Date in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or
in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payment to any Bank of the principal
of or interest on the Notes or any other amounts payable hereunder
(except for changes in the rate of tax on, or determined by reference
to, the net income or profits of such Bank pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office
or applicable lending office is located or any subdivision thereof or
therein) or (B) a change in official reserve requirements, but, in all
events, excluding reserves
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required under Regulation D to the extent included in the computation
of the Eurodollar Rate and/or (y) other circumstances since the
Effective Date affecting such Bank or the interbank Eurodollar market
or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having the
force of law) or (z) impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall on such date give notice (by telephone confirmed in
writing) to the respective Borrowers and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the respective
Borrowers and the respective Banks that the circumstances giving rise to such
notice by the Administrative Agent no longer exist, and any Notice of Borrowing
or Notice of Conversion given by any Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by such Borrower, (y) in the case of clause (ii) above, the
respective Borrower agrees to pay to such Bank, upon written demand therefor,
such additional amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Bank in its sole discretion
shall determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice in reasonable detail as to the additional amounts owed to such Bank,
showing the basis for the calculation thereof, submitted to the respective
Borrower by such Bank in good faith shall, absent manifest error, be final and
conclusive and binding upon all the parties hereto) and (z) in the case of
clause (iii) above, take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a) (ii) or (iii), the respective
Borrower may (and in the case of a Eurodollar Loan affected pursuant to Section
1.10 (a)(iii) shall) either (i) if the affected Eurodollar Loan is then being
made pursuant to a Borrowing or a conversion, cancel said Borrowing or
conversion by giving the Administrative Agent telephonic notice (confirmed in
writing) thereof on the same date that such Borrower was notified by the
affected Bank or the Administrative Agent pursuant to Section 1.10(a)(ii) or
(iii), or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' written notice to the Administrative Agent, require
the affected Bank to convert each such Eurodollar Loan
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into a Base Rate Loan; provided, that if more than one Bank is affected at any
time, then all affected Banks must be treated the same pursuant to this Section
1.10(b).
(c) If at any time after the Effective Date any Bank
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law and including, without limitation, those
announced or published prior to the Effective Date) concerning capital adequacy,
or any change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency, will have the effect of increasing
the amount of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank based on the existence of such Bank's
Commitments hereunder or its obligations hereunder, then the Borrowers jointly
and severally agree to pay to any such Bank, upon such Bank's written demand
therefor, such additional amounts as shall be required to compensate such Bank
or such other corporation for the increased cost to such Bank or such other
corporation or the reduction in the rate of return to such Bank or such other
corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable; provided, that such
Bank's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all parties
hereto. Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
respective Borrowers, which notice shall show in reasonable detail the basis for
calculation of such additional amounts, although the failure to give any such
notice shall not release or diminish any of the respective Borrowers'
obligations to pay additional amounts pursuant to this Section 1.10(c).
1.11 Compensation. Each Borrower agrees to compensate each
Bank, upon such Bank's written request (which request shall be made in good
faith and shall set forth in reasonable detail the basis for requesting such
compensation), for all losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the liquidation
or reemployment of deposits or other funds required by such Bank to fund its
Eurodollar Loans) which such Bank may sustain: (i) if for any reason (other than
a default by such Bank or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion given by such Borrower
(whether or not withdrawn by the respective Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment (including any repayment
made pursuant to Section 4.01 or 4.02 or as a result of an acceleration of Loans
pursuant to Section 9) or conversion of any of such Borrower's Eurodollar Loans
occurs on a date which is not the last day of an Interest Period with respect
thereto; (iii) if any prepayment of any of such Borrower's Eurodollar Loans is
not made on any date specified in a notice of prepayment given by such Borrower;
or (iv) as a consequence of (x) any other default by such Borrower to repay its
Loans when required
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by the terms of this Agreement or the respective Notes or (y) an election made,
or action required to be taken, by such Borrower pursuant to Section 1.10(b).
1.12 Change of Applicable Lending Office. Each Bank agrees
that, upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect
to such Bank, it will, if requested by the applicable Borrower, use reasonable
efforts (subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit affected by such
event; provided, that such designation is made on such terms that such Bank and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the operation
of any such Section. Nothing in this Section 1.12 shall affect or postpone any
of the obligations of any Borrower or the right of any Bank provided in Sections
1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) Upon the occurrence of any
event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 with respect to any Bank which results in
such Bank charging to any Borrower increased costs in excess of those being
generally charged by the other Banks or (y) if any Bank (A) becomes a Defaulting
Bank or otherwise defaults in its obligations to make Loans or fund Unpaid
Drawings or (B) refuses to consent to a proposed change, waiver, discharge or
termination with respect to any of the matters set forth in clauses (i) through
(vi), inclusive, of the first proviso in Section 12.12(a) which has been
approved by the Required Banks, Silgan shall have the right (subject to the
requirements of Section 12.12(b)), if no Default or Event of Default will exist
immediately after giving effect to the respective replacement, to replace such
Bank (the "Replaced Bank") with one or more other Eligible Transferee or
Transferees (collectively, the "Replacement Bank") none of whom shall constitute
a Defaulting Bank at the time of such replacement and each of whom shall be
acceptable to the Administrative Agent, provided, that:
(i) at the time of any replacement pursuant to this Section
1.13, the Replacement Bank shall enter into one or more Assignment and
Assumption Agreements pursuant to Section 12.04(b) (and with all fees
payable pursuant to said Section 12.04(b) to be paid by the Replacement
Bank) pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of, and in each case participations
in Letters of Credit by, the Replaced Bank and, in connection
therewith, shall pay to (x) the Replaced Bank in respect thereof an
amount equal to the sum of (A) an amount equal to the principal of, and
all accrued interest on, all outstanding Loans of the Replaced Bank,
(B) an amount equal to all Unpaid Drawings that have been funded by
(and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (C) an amount
equal to all accrued, but theretofore unpaid, Fees owing to the
Replaced Bank pursuant to Section 3.01 and (y) BTCo an amount equal to
such
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Replaced Bank's Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) and any Mandatory Borrowing, in each case to
the extent such amount was not theretofore funded by such Replaced
Bank; and
(ii) all obligations of the respective Borrowers owing to the
Replaced Bank (other than those specifically described in clause (i)
above in respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Bank
concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreements, the
payment of all amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes executed by the appropriate Borrower, the Replacement
Bank shall become a Bank hereunder and the Replaced Bank shall cease to
constitute a Bank hereunder, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04, 12.01 and 12.06), which shall survive as to such Replaced Bank.
1.14 Eurodollar Loans Prior to the Syndication Date.
Notwithstanding anything to the contrary contained in this Section 1 or
elsewhere in this Agreement, prior to the Syndication Date, the Borrowers shall
be permitted to incur and/or maintain Loans which are Eurodollar Loans provided
that no more than three Borrowings of Eurodollar Loans may be incurred prior to
the Syndication Date (with (x) the first of such Borrowings to have an Interest
Period of one week commencing on the Initial Borrowing Date, (y) the second of
such Borrowings to have an Interest Period of one month commencing within three
Business Days after the end of the first such Interest Period and (2) the third
of such Borrowings to have an Interest Period of one month commencing on the
last day of the second such Interest Period of the second of such Borrowings).
Section 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, either of Containers or Plastics may request that
BTCo in its individual capacity issue, at any time and from time to time on and
after the Initial Borrowing Date and prior to the Revolving Loan Maturity Date,
for the account of Containers or Plastics, as the case may be, an irrevocable
standby letter of credit in a form customarily used by BTCo, or in such other
form as has been approved by BTCo (each such letter of credit issued pursuant to
this Section 2.01(a), and each letter of credit described in the next sentence
of this Section 2.01(a), a "Letter of Credit") in support of such obligations of
Containers, Plastics or any of their Subsidiaries as may be requested by
Containers or Plastics, as the case may be. It is hereby acknowledged and agreed
that each of the letters of credit described in Schedule II (the "Existing
Letters of Credit"), which were issued by
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BTCo under the Existing Credit Agreement and remain outstanding on the Initial
Borrowing Date, shall constitute a "Letter of Credit" for all purposes of this
Agreement.
(b) Subject to and upon the terms and conditions set forth
herein, BTCo hereby agrees that it will, at any time and from time to time on
and after the Initial Borrowing Date and prior to the Revolving Loan Maturity
Date, following its receipt of the respective Letter of Credit Request, issue
for the account of Containers or Plastics, as the case may be, one or more
Letters of Credit, provided, that BTCo shall be under no obligation to issue any
Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain BTCo from issuing such Letter of Credit or any requirement of
law applicable to BTCo or any request or directive (whether or not
having the force of law) from any governmental authority with
jurisdiction over BTCo shall prohibit, or request that BTCo refrain
from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon BTCo with respect to such
Letter of Credit any restriction or reserve or capital requirement (for
which BTCo is not otherwise compensated) not in effect on the Effective
Date, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to BTCo as of the Effective Date and
which BTCo in good faith deems material to it; or
(ii) BTCo shall have received notice from the Required Banks
prior to the issuance of such Letter of Credit of the type described in
the penultimate sentence of Section 2.03(b).
In addition, BTCo shall not be obligated to issue any Letter
of Credit at a time when a Bank Default exists unless BTCo has entered into
arrangements satisfactory to it and Containers or Plastics, as the case may be,
to eliminate BTCo's risk with respect to the Bank which is the subject of such
Bank Default, including by cash collateralizing such Bank's Percentage of the
Letter of Credit Outstandings.
(c) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed the lesser of (x) $20,000,000 and (y) when added to the aggregate
principal amount of all Revolving Loans and Swingline Loans then outstanding, an
amount equal to the Total Available Revolving Loan Commitment at such time
(after giving effect to any reductions to the Total Available Revolving Loan
Commitment on such date), (ii) no Letter of Credit shall be issued the Stated
Amount of which, when added to (x) the Letter of Credit Outstandings (exclusive
of Unpaid Drawings which are repaid on the date of, and prior to the issuance
of, the
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respective Letter of Credit) at such time and (y) the aggregate principal amount
of all Revolving Loans and Swingline Loans then outstanding, would exceed an
amount equal to the Borrowing Base at such time, (iii) each Letter of Credit
shall by its terms terminate on or before the earlier of (x) one year after the
date of issuance thereof (although any such Letter of Credit may be extendable
for successive periods up to one year, but not beyond the Business Day
immediately preceding the Revolving Loan Maturity Date, on terms acceptable to
BTCo) and (y) the Business Day immediately preceding the Revolving Loan Maturity
Date and (iv) each Letter of Credit shall be denominated in Dollars.
2.02 Minimum Stated Amount. The Stated Amount of each Letter
of Credit shall be not less than $100,000 or such lesser amount as is acceptable
to BTCo.
2.03 Letter of Credit Requests. (a) Whenever Containers or
Plastics desires that a Letter of Credit be issued for its account, Containers
or Plastics, as the case may be, shall give the Administrative Agent and BTCo at
least two Business Days' prior written notice thereof. Each notice shall be in
the form of Exhibit C (each a "Letter of Credit Request"). The Administrative
Agent shall promptly transmit copies of each Letter of Credit Request to each
Bank.
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by Containers or Plastics, as the
case may be, that such Letter of Credit may be issued in accordance with, and
will not violate the requirements of, Section 2.01(c). Unless BTCo has received
notice from the Required Banks before it issues a Letter of Credit that one or
more of the conditions specified in Section 5 are not then satisfied, or that
the issuance of such Letter of Credit would violate Section 2.01(c), then BTCo
may issue the requested Letter of Credit for the account of Containers or
Plastics, as the case may be, in accordance with BTCo's usual and customary
practices. Upon its issuance of, or its entering into any amendment with respect
to, any Letter of Credit, BTCo shall promptly notify the Administrative Agent
and each Bank of such issuance or amendment and deliver to the Administrative
Agent and each Bank, a copy of the Letter of Credit actually issued or amended,
as the case may be.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by BTCo of any Letter of Credit (or upon the Initial Borrowing Date in
the case of the Existing Letters of Credit), BTCo shall be deemed to have sold
to each Bank with a Revolving Loan Commitment, other than BTCo (each such Bank,
in its capacity under this Section 2.04, a "Participant"), and each such
Participant shall be deemed irrevocably and unconditionally to have purchased
from BTCo, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Percentage in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder and the
obligations of Containers or Plastics, as the case may be, under this Agreement
with respect thereto, in the respective Letter of Credit Fees payable with
respect thereto, and any security
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therefor or guaranty pertaining thereto. Upon any change in the Revolving Loan
Commitments of the Banks pursuant to Section 12.04(b), it is hereby agreed that,
with respect to all outstanding Letters of Credit and Unpaid Drawings, there
shall be an automatic adjustment to the participations pursuant to this Section
2.04 to reflect the new Percentages of the assignor and assignee Bank.
(b) In determining whether to pay under any Letter of Credit,
BTCo shall not have any obligation relative to the Participants therein other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by BTCo under or in connection with any Letter of
Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for BTCo any resulting liability to Containers,
Plastics, any other Credit Party, any Participant or any other Bank.
(c) In the event that BTCo makes any payment under any Letter
of Credit and Containers or Plastics, as the case may be, shall not have
reimbursed such amount in full to BTCo pursuant to Section 2.05(a), BTCo shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of BTCo, the
amount of such Participant's Percentage of such unreimbursed payment in Dollars
and in same day funds. If the Administrative Agent so notifies, prior to 11:00
a.m. (New York time) on any Business Day, any Participant required to fund a
payment under a Letter of Credit, such Participant shall make available to the
Administrative Agent for the account of BTCo such Participant's Percentage of
the amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Percentage of the amount of
such payment available to the Administrative Agent for the account of BTCo, such
Participant agrees to pay to the Administrative Agent for the account of BTCo,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Administrative Agent
for the account of BTCo at the overnight Federal Funds Rate. The failure of any
Participant to make available to the Administrative Agent for the account of
BTCo its Percentage of any payment under any Letter of Credit shall not relieve
any other Participant of its obligation hereunder to make available to the
Administrative Agent for the account of BTCo its Percentage of any Letter of
Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Administrative Agent for the account of BTCo such other Participant's Percentage
of any such payment.
(d) Whenever BTCo receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
BTCo any payments from the respective Participants pursuant to clause (c) above,
BTCo shall pay to the
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Administrative Agent and the Administrative Agent shall promptly pay to each
such Participant which has paid its Percentage thereof, in Dollars and in same
day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.
(e) Upon the request of any Participant, BTCo shall furnish to
such Bank copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.
(f) The obligations of the respective Participants to make
payments to the Administrative Agent for the account of BTCo with respect to
Letters of Credit shall be irrevocable and not subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever and shall be
made in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right which any Borrower or any other Credit Party may have at any time
against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, BTCo, any Bank, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between any Borrower or any other
Credit Party and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) Each of
Containers and Plastics hereby agrees to reimburse BTCo, by making payment to
the Administrative Agent in immediately available funds at the Payment Office,
for any pay-
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ment or disbursement made by BTCo under any Letter of Credit issued for its
account (each such amount so paid or disbursed until reimbursed, an "Unpaid
Drawing") immediately after, and in any event on the date of, such payment or
disbursement with interest on the amount so paid or disbursed by BTCo, to the
extent not reimbursed prior to 12:00 Noon (New York time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
not including the date BTCo was reimbursed therefor at a rate per annum which
shall be the Base Rate in effect from time to time plus the Applicable Margin in
respect of Revolving Loans maintained as Base Rate Loans; provided, however, to
the extent such amounts are not reimbursed prior to 12:00 Noon (New York time)
on the first Business Day following such payment or disbursement, interest shall
thereafter accrue on the amounts so paid or disbursed by BTCo (and until
reimbursed by Containers or Plastics, as the case may be) at a rate per annum
which shall be the Base Rate in effect from time to time plus the Applicable
Margin in respect of Revolving Loans maintained as Base Rate Loans plus 2%, in
each such case, with such interest to be payable on demand.
(b) The obligations of Containers and Plastics under this
Section 2.05 to reimburse BTCo with respect to Unpaid Drawings (including, in
each case, interest thereon) shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which Containers or Plastics may have or have had against any Bank
(including in such Bank's capacity as issuer of the Letter of Credit or as a
Participant with respect thereto), including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
Drawing; provided, however, that Containers and Plastics shall not be obligated
to reimburse BTCo for any wrongful payment made by BTCo under a Letter of Credit
as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of BTCo.
2.06 Increased Costs. If at any time after the Effective Date,
the introduction of or any change in applicable law, rule or regulation,
guideline or in the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by BTCo or any Participant with any request or directive by any such
authority (whether or not having the force of law), or any change in generally
accepted accounting principles, shall either (i) impose, modify or deem
applicable any reserve, deposit, capital adequacy or similar requirement against
letters of credit issued by BTCo or participated in by any Participant, or (ii)
impose on BTCo or any Participant any other conditions relating, directly or
indirectly, to this Agreement or any respective Letter of Credit, and the result
of any of the foregoing is to increase the cost to BTCo or any Participant of
issuing, maintaining or participating in any such Letter of Credit, or reduce
the amount of any sum received or receivable by BTCo or any Participant
hereunder, then, upon demand to Containers or Plastics by BTCo or such
Participant (a
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copy of which notice shall be sent by BTCo or such Participant to the
Administrative Agent), Containers or Plastics, as the case may be, shall pay to
BTCo or such Participant the additional amount or amounts as will compensate
BTCo or such Participant for such increased cost or reduction together with
interest on each such amount from the date demanded until payment in full
thereof at the Base Rate in effect from time to time plus the then Applicable
Margin in respect of Revolving Loans maintained as Base Rate Loans plus 2%. A
certificate submitted to Containers or Plastics by BTCo or such Participant, as
the case may be (a copy of which certificate shall be sent by BTCo or such
Participant to the Administrative Agent), setting forth the basis for the
determination of such additional amount or amounts necessary to compensate BTCo
or such Participant as aforesaid, shall be conclusive and binding on Containers
or Plastics, as the case may be, absent manifest error, as to the amount
thereof.
Section 3. Fees; Commitments; Reductions of Commitments.
3.01 Fees. (a) Silgan agrees to pay to the Administrative
Agent for distribution to each Bank with a Term Loan Commitment, a commitment
commission (the "Term Loan Commitment Commission") for the period from the
Effective Date to but excluding the date on which the Total Term Loan Commitment
shall have been terminated, computed at a rate equal to 1/2 of 1% per annum on
the daily average Term Loan Commitments of such Bank. Accrued Term Loan
Commitment Commission shall be due and payable on the Initial Borrowing Date,
quarterly in arrears on each Quarterly Payment Date and upon the date on which
the Total Term Loan Commitment shall have been terminated.
(b) Each of Containers and Plastics jointly and severally
agrees to pay to the Administrative Agent for distribution to each
Non-Defaulting Bank with a Revolving Loan Commitment a commitment commission
(the "Revolving Loan Commitment Commission") for the period from the Effective
Date to but excluding the Revolving Loan Maturity Date (or such earlier date as
the Total Revolving Loan Commitment shall have been terminated), computed at a
rate equal to the Applicable Revolving Loan Commitment Commission Percentage on
the daily average Unutilized Revolving Loan Commitment of such Non-Defaulting
Bank. Accrued Revolving Loan Commitment Commission shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the Revolving Loan
Maturity Date or upon such earlier date as the Total Revolving Loan Commitment
shall have been terminated.
(c) Each of Containers and Plastics jointly and severally
agrees to pay to the Administrative Agent for proportionate distribution to each
Non-Defaulting Bank with a Revolving Loan Commitment (based upon their
respective Percentages) a fee in respect of each Letter of Credit issued
hereunder (the "Letter of Credit Fee") for the period from and including the
date of issuance of such Letter of Credit (or, in the case of the Existing
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Letters of Credit, from the Initial Borrowing Date) to and including the
termination of such Letter of Credit, computed at a rate per annum equal to the
Applicable Margin for Revolving Loans maintained as Eurodollar Loans, as in
effect from time to time, on the daily Stated Amount of such Letter of Credit.
Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on
each Quarterly Payment Date and upon the first day after the termination of the
Total Revolving Loan Commitment upon which no Letters of Credit remain
outstanding.
(d) Each of Containers and Plastics jointly and severally
agrees to pay to BTCo, for its own account, a facing fee in respect of each
Letter of Credit issued by BTCo for the account of Containers or Plastics (the
"Facing Fee"), computed at a rate of 1/4 of 1% per annum on the daily average
Stated Amount of such Letter of Credit. Accrued Facing Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and upon the first
day after the termination of the Total Revolving Loan Commitment upon which no
Letters of Credit remain outstanding.
(e) Each of Containers and Plastics jointly and severally
agrees to pay to BTCo, for its own account, in respect of each Letter of Credit
issued for the account of such Borrower, such amount or amounts as BTCo
customarily charges as processing fees for issuing, amending and paying on
letters of credit.
(f) The Borrowers jointly and severally agree to pay to the
Administrative Agent and the Co-Arrangers, for their own accounts, such fees as
may be agreed to from time to time between the Borrowers and the Administrative
Agent and the Co-Arrangers.
3.02 Voluntary Termination of Revolving Commitments. (a) Upon
at least two Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) by any Borrower to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Banks), any Borrower shall have the right, without premium or penalty, to
terminate the Total Unutilized Revolving Loan Commitment, in whole or, if in
part, in integral multiples of $1,000,000, provided, that each such reduction
shall apply proportionately to permanently reduce the Revolving Loan Commitment
of each Bank.
(b) In the event of the refusal by a Bank to consent to a
proposed change, waiver, discharge or termination with respect to any of the
matters set forth in clauses (i) through (vi), inclusive, of the first proviso
in Section 12.12(a) which has been approved by the Required Banks, the Borrowers
shall have the right (subject to the requirements of Section 12.12(b)), upon
five Business Days' prior written notice to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Banks), to terminate the entire Revolving Loan Commitment of such
Bank, so long as all Loans, together with accrued and unpaid interest, Fees and
all other amounts
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owing to such Bank are repaid concurrently with the effectiveness of such
termination (at which time Schedule I shall be deemed modified to reflect such
changed amounts), and at such time, such Bank shall no longer constitute a
"Bank" for purposes of this Agreement, except with respect to indemnifications
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04, 12.01 and 12.06), which shall survive as to such repaid Bank.
3.03 Mandatory Reduction or Termination of Commitments. (a)
The Total Commitment (and the A Term Loan Commitment, the B Term Loan Commitment
and the Revolving Loan Commitment of each Bank) shall terminate on December 31,
1995 unless the Initial Borrowing Date has occurred on or prior to such date.
(b)(i) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, the Total A Term Loan Commitment (and
the A Term Loan Commitment of each Bank) shall (x) be reduced on each Term Loan
Borrowing Date (after the incurrence of A Term Loans on such date), in an amount
equal to the aggregate principal amount of A Term Loans incurred on such date,
(y) terminate in its entirety (to the extent not theretofore terminated) at 5:00
P.M. (New York time) on the Third Term Loan Borrowing Date and (z) prior to the
termination of the Total A Term Loan Commitment as provided in clause (y) above,
be reduced from time to time to the extent required by Section 4.02.
(ii) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total B Term Loan Commitment (and the B Term
Loan Commitment of each Bank) shall (x) terminate in its entirety on the Initial
Borrowing Date (after the incurrence of B Term Loans on such date) and (y) prior
to the termination of the Total B Term Loan Commitment as provided in clause (x)
above, be reduced from time to time to the extent required by Section 4.02.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Initial Borrowing Date
upon which a mandatory repayment of Term Loans pursuant to Section 4.02(e), (f)
and/or (g) is required (and exceeds in amount the aggregate principal amount of
Term Loans then outstanding) or would be required if Term Loans were then
outstanding, the Total Revolving Loan Commitment shall be permanently reduced by
the amount, if any, by which the amount of such required repayment (determined
as if an unlimited amount of Term Loans were actually outstanding) exceeds the
aggregate principal amount of Term Loans then outstanding.
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(e) Each reduction to the Total A Term Loan Commitment, the
Total B Term Loan Commitment and the Total Revolving Loan Commitment pursuant to
this Section 3.03 shall be applied proportionately to reduce the A Term Loan
Commitment, the B Term Loan Commitment or the Revolving Loan Commitment, as the
case may be, of each Bank with such a Commitment.
Section 4. Prepayments; Payments; Commitment Reductions.
4.01 Voluntary Prepayments. (a) Each Borrower shall have the
right to prepay the Loans made to such Borrower, without premium or penalty, in
whole or in part at any time and from time to time on the following terms and
conditions: (i) such Borrower shall give the Administrative Agent at its Notice
Office (x) at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay Base Rate Loans
(or same day notice in the case of Swingline Loans provided such notice is given
prior to 3:00 P.M. (New York time) on such Business Day) and (y) at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Eurodollar Loans, whether A Term Loans, B Term
Loans, Revolving Loans or Swingline Loans shall be prepaid, the amount of such
prepayment, the Types of Loans to be prepaid and, in the case of Eurodollar
Loans, the specific Borrowing or Borrowings pursuant to which made, and, in the
case of any voluntary prepayment of Term Loans, whether or not such prepayment
is to be made with proceeds from Retained Excess Cash Flow or with Retained Net
Equity Proceeds, which notice the Administrative Agent shall promptly transmit
to each of the Banks; (ii) each prepayment shall be in an aggregate principal
amount of at least $1,000,000 (or $250,000 in the case of Swingline Loans);
provided, that if any partial prepayment of Eurodollar Loans made pursuant to
any Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than $5,000,000 in the case of a Borrowing of
any Tranche of Term Loans or $2,500,000 in the case of a Borrowing of Revolving
Loans, then such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of Base Rate Loans and any election of an
Interest Period thereafter with respect thereto given by such Borrower shall
have no force or effect; (iii) except as otherwise provided in clause (iv)(B)
below of this Section 4.01(a), each prepayment in respect of any Term Loans made
pursuant to this Section 4.01(a) shall be allocated among the A Term Loans and
the B Term Loans on a pro rata basis (based upon the then relative aggregate
outstanding principal amounts of A Term Loans and B Term Loans); (iv) each
prepayment of any Tranche of Term Loans pursuant to this Section 4.01(a) shall
be applied to reduce the then remaining A Term Loan Scheduled Repayments and B
Term Loan Scheduled Repayments on a pro rata basis (based upon the then
remaining principal amounts of A Term Loan Scheduled Repayments and B Term Loan
Scheduled Repayments after giving effect to all prior reductions thereto),
provided that (A) any voluntary prepayments of Term Loans pursuant to this
Section 4.01(a) made on or after September 15 of any year and prior to December
31 of such year shall be applied (1) first, to reduce the A Term Loan Scheduled
Repayment
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and B Term Loan Scheduled Repayment which are due on December 31 of such year
and (2) second, to the extent in excess thereof, to reduce the then remaining A
Term Loan Scheduled Repayments and B Term Loan Scheduled Repayments as provided
above in this clause (iv) without regard to this proviso and (B) any voluntary
prepayments of Term Loans which are made with proceeds of Retained Excess Cash
Flow or with any Retained Net Equity Proceeds may be allocated between the A
Term Loans and the B Term Loans, or applied solely to the A Term Loans or the B
Term Loans, as Silgan shall determine in its sole discretion and, to the extent
allocated to any such Tranche of Term Loans, shall be applied (1) first, to
reduce the A Term Loan Scheduled Repayment and/or B Term Loan Scheduled
Repayment, as the case may be, which is due on December 31 of the year in which
such prepayment is made and (2) second, to the extent in excess thereof, to
reduce the then remaining A Term Loan Scheduled Repayments and/or B Term Loan
Scheduled Repayments, as the case may be, on a pro rata basis (based upon the
then remaining principal amount of A Term Loan Scheduled Repayments and/or B
Term Loan Scheduled Repayments, as the case may be) and (v) each prepayment in
respect of any Tranche of Loans shall be applied pro rata among the Banks with
outstanding Loans of such Tranche; provided that at Containers' or Plastics'
election in connection with any prepayment of Revolving Loans pursuant to this
Section 4.01(a), such prepayment shall not be applied to any Revolving Loan of a
Defaulting Bank.
(b) In the event of the refusal by a Bank to consent to a
proposed change, waiver, discharge or termination with respect to any of the
matters described in clauses (i) through (vi), inclusive, of the first proviso
in Section 12.12(a) which have been approved by the Required Banks, the
Borrowers shall have the right (subject to the requirements of Section
12.12(b)), upon five Business Days' prior written notice to the Administrative
Agent at its Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks) to repay all Loans, together with accrued and
unpaid interest, fees and other amounts, owing to such Bank in accordance with
said Section 12.12(b) so long as (A) the Revolving Loan Commitment, if any, of
such Bank is terminated concurrently with such repayment (at which time Schedule
I shall be deemed modified to reflect the changed Revolving Loan Commitments)
and (B) the consents required by Section 12.12(b) in connection with the
repayment pursuant to this clause (b) have been obtained.
4.02 Mandatory Prepayments; Commitment and Available Amount
Reductions. (a) If any Borrowing Base Certificate delivered pursuant to Section
7.01(i) shall disclose the existence of a Borrowing Base Deficiency, Containers
and/or Plastics shall, on the day the delivery of such Borrowing Base
Certificate is required by Section 7.01(i), prepay a principal amount of
outstanding Swingline Loans in such amounts as are needed to eliminate the
Borrowing Base Deficiency. To the extent that a Borrowing Base Deficiency
continues to exist after repayment in full of all outstanding Swingline Loans,
Containers and/or Plastics shall prepay the principal of Revolving Loans in an
amount equal to such remaining Borrowing Base Deficiency and, to the extent such
Borrowing Base
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Deficiency exceeds the principal amount of the then outstanding Revolving Loans,
pay an amount of cash or Cash Equivalents equal to such remaining Borrowing Base
Deficiency (up to a maximum amount equal to the Letter of Credit Outstandings at
such time) to the Administrative Agent at the Payment Office, such cash or Cash
Equivalents to be held as security for all obligations of Containers and
Plastics hereunder in a cash collateral account (the "Cash Collateral Account")
established and maintained by the Administrative Agent; provided, that such
amounts shall, so long as no Default or Event of Default then exists, be
released to Containers or Plastics, as the case may be, from time to time to the
extent in excess of the Borrowing Base Deficiency.
(b) On any day on which the sum of the aggregate outstanding
principal amount of Revolving Loans, Swingline Loans and the Letter of Credit
Outstandings exceeds the Total Available Revolving Loan Commitment as then in
effect, Containers and/or Plastics shall prepay on such day principal of
outstanding Swingline Loans and, after all Swingline Loans have been repaid in
full, Revolving Loans in an amount equal to such excess. If, after giving effect
to the prepayment of all outstanding Swingline Loans and Revolving Loans, the
aggregate amount of the Letter of Credit Outstandings exceeds the Total
Available Revolving Loan Commitment as then in effect, Containers and/or
Plastics shall pay to the Administrative Agent at the Payment Office on such day
an amount of cash or Cash Equivalents equal to the amount of such excess (up to
a maximum amount equal to the Letter of Credit Outstandings at such time), such
cash or Cash Equivalents to be held as security for all obligations of
Containers and Plastics hereunder in the Cash Collateral Account; provided, that
such amounts shall, so long as no Default or Event of Default then exists, be
released to Containers or Plastics, as the case may be, from time to time in the
amount by which the Total Available Revolving Loan Commitment as then in effect
exceeds the sum of the aggregate outstanding principal amount of Revolving
Loans, Swingline Loans and the Letter of Credit Outstandings at such time.
(c) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, Silgan shall be required to repay that principal amount of A Term Loans,
to the extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced in amount as provided in Section 4.01(a)
and Section 4.02(i), an "A Term Loan Scheduled Repayment," and each such date,
an "A Term Loan Scheduled Repayment Date"):
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A Term Loan
Scheduled Repayment Date Amount
------------------------ ------
December 31, 1995 $ 5,000,000
December 31, 1996 $25,000,000
December 31, 1997 $35,000,000
December 31, 1998 $50,000,000
December 31, 1999 $50,000,000
December 31, 2000 $60,000,000
(d) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, Silgan shall be required to repay that principal amount of B Term Loans,
to the extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced in amount as provided in Section 4.01(a)
and Section 4.02(i), a "B Term Loan Scheduled Repayment," and each such date, a
"B Term Loan Scheduled Repayment Date"):
B Term Loan
Scheduled Repayment Date Amount
------------------------ ------
December 31, 1995 $ 2,250,000
December 31, 1996 $ 2,250,000
December 31, 1997 $ 2,250,000
December 31, 1998 $ 2,250,000
December 31, 1999 $ 2,250,000
December 31, 2000 $ 42,500,000
December 31, 2001 $100,000,000
March 15, 2002 $ 71,250,000
(e) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each Excess Cash Payment
Date, an amount equal to 50% of Excess Cash Flow for the relevant Excess Cash
Payment Period shall be applied as a mandatory repayment and/or commitment
reduction in accordance with the requirements of Section 4.02(i).
(f) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date of receipt of
proceeds from any sale of assets (excluding sales of inventory in the ordinary
course of business and sales of other assets (other than assets constituting
Real Property) in the ordinary course of business not in excess of $500,000 per
sale) by Silgan or any of its Subsidiaries on or after the Effective Date, an
amount equal to 80% of the Net Sale Proceeds from such sale of assets shall be
applied as a mandatory repayment and/or commitment reduction in accordance with
the
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requirements of Section 4.02(i); provided, however, that to the extent the
amount of Net Sale Proceeds from all such sales of assets after the Effective
Date equals or exceeds $25,000,000, an amount equal to 100% of the Net Sale
Proceeds from all such asset sales thereafter shall be applied as provided above
in this clause (f).
(g) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on the date of each sale or
issuance of equity by (i) any Subsidiary of Silgan (except sales or issuances of
equity (x) to Silgan or a Subsidiary of Silgan and (y) as a result of the
exercise of Containers Employee Stock Options and/or Plastics Employee Stock
Options, provided that prior to the receipt by Holdings or Silgan of at least
$75,000,000 of Net Equity Proceeds from one or more registered public equity
offerings of its common stock (net of any amounts used or to be used to
repurchase shares of Holdings Class B Common Stock held by First Plaza Group
Trust), the amount of such proceeds not required to be applied by reason of this
clause (y) shall not exceed in aggregate amount, when added to the aggregate
amount of proceeds received from the exercise of Holdings Employee Stock Options
prior to such time, $1,000,000 in any fiscal year of Silgan), an amount equal to
100% of the Net Equity Proceeds from such sale or issuance of equity shall be
applied as a mandatory repayment and/or commitment reduction in accordance with
the requirements of Section 4.02(i) and (ii) Holdings or Silgan (except sales or
issuances (x) by Silgan to Holdings and (y) as a result of the exercise of
Holdings Employee Stock Options, provided that prior to the receipt by Holdings
or Silgan of at least $75,000,000 of Net Equity Proceeds from one or more
registered public equity offerings of its common stock (net of any amounts used
or to be used to repurchase shares of Holdings Class B Common Stock held by
First Plaza Group Trust), the amount of such proceeds not required to be applied
by reason of this clause (y) shall not exceed in aggregate amount, when added to
the aggregate amount of proceeds received from the exercise of Containers
Employee Stock Options and/or Plastics Employee Stock Options prior to such
time, $1,000,000 in any fiscal year of Silgan), an amount equal to 100% (or 50%
to the extent provided in clause (C) below) of the Net Equity Proceeds from such
sale or issuance of equity shall be applied as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Section 4.02(i);
provided, however, (A) so long as no Default or Event of Default then exists,
Holdings or Silgan, as the case may be, shall not be required to so use the Net
Equity Proceeds from one or more registered public offerings of the common stock
of Holdings or Silgan to the extent such proceeds are used within 60 days of
receipt thereof to (x) Refinance outstanding Holdings Debentures, Silgan
Subordinated Notes and/or any Refinancing Indebtedness (and to pay all
reasonable costs associated therewith) and/or (y) repurchase shares of Holdings
Class B Common Stock held by First Plaza Group Trust pursuant to, and in
accordance with the terms of, the Holdings Shareholders Agreement, and to the
extent not so used (as provided in preceding clauses (x) and/or (y)) within such
60 day period, the remaining amount of such Net Equity Proceeds shall be used as
provided above in this Section 4.02(g)(ii), (B) so long as no Default or Event
of Default then exists, Holdings or Silgan, as the case may be, shall not
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be required to so use the Net Equity Proceeds from one or more private
placements of its or their common stock to the extent such proceeds are used
within 60 days of receipt thereof to repurchase shares of Holdings Class B
Common Stock held by First Plaza Group Trust pursuant to, and in accordance with
the terms of, the Holdings Shareholders Agreement, and to the extent not so used
within such 60 day period, the remaining amount of such Net Equity Proceeds
shall be used as provided above in this Section 4.02(g)(ii), it being understood
that in the case of preceding subclauses (A) and (B), to the extent that
Holdings or Silgan, as the case may be, elects to use such Net Equity Proceeds
as provided in such subclauses (A) and/or (B), Silgan shall, until such proceeds
are so used, (i) repay outstanding Revolving Loans and/or Swingline Loans with
such proceeds and/or (ii) place such proceeds in a cash collateral account
established and maintained by, and pursuant to arrangements satisfactory to, the
Administrative Agent and (C) from and after the time at which Holdings or Silgan
shall have received in the aggregate at least $75,000,000 in Net Equity Proceeds
from one or more registered public equity offerings of its common stock (net of
any amounts used or to be used to repurchase shares of Holdings Class B Common
Stock held by First Plaza Group Trust) and so long as no Default or Event of
Default then exists, the amount of all Retained Net Equity Proceeds received
thereafter may be retained by Holdings or Silgan without any requirement to
repay outstanding Term Loans or Refinance outstanding Holdings Debentures,
Silgan Subordinated Notes and/or any Refinancing Indebtedness, although Holdings
shall be required to contribute any such proceeds received by it to Silgan as
provided in the Holdings Guaranty, and with the remaining 50% of such Net Equity
Proceeds to be applied as (and to the extent) provided above in this Section
4.02(g).
(h) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on July 1, 1996, Silgan
shall repay outstanding B Term Loans in an amount equal to $75,000,000 less the
aggregate amount paid in respect of principal and premium through and including
June 30, 1996 to Refinance outstanding Holdings Debentures pursuant to Permitted
Holdings Debt Repurchases.
(i) Any amount required to be applied pursuant to this Section
4.02(i) shall be applied by Silgan (i) first, as a mandatory repayment of the
then outstanding principal amount of Term Loans (or, if prior to the Initial
Borrowing Date, as a mandatory reduction to the Total Term Loan Commitment),
(ii) second, to the extent in excess of the amount required to be applied
pursuant to preceding clause (i), as a mandatory reduction to the Total A Term
Loan Commitment (to the extent not theretofore terminated) and (iii) third, to
the extent in excess of the amount required to be applied pursuant to preceding
clauses (i) and (ii), as a mandatory reduction to the Total Revolving Loan
Commitment. The amount to be applied to repay principal of Term Loans (and/or,
to the extent applicable, as a mandatory reduction to the Total Term Loan
Commitment then in effect) as required by clause (i) of the first sentence of
this Section 4.02(i) shall, except as provided below, be allocated among the A
Term Loans and the B Term Loans on a pro rata basis (based
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upon the relative outstanding principal amounts of A Term Loans and B Term Loans
and/or, to the extent applicable, the Total A Term Loan Commitment and the Total
B Term Loan Commitment then in effect), and with the amount allocated to each
such Tranche of Term Loans to be applied to reduce the then remaining A Term
Loan Scheduled Repayments and B Term Loan Scheduled Repayments on a pro rata
basis (based upon the then remaining principal amount of A Term Loan Scheduled
Repayments and B Term Loan Scheduled Repayments after giving effect to all prior
reductions thereto); provided, however, that with respect to any mandatory
repayment of Term Loans with the Net Equity Proceeds from a registered public
offering to the extent required by Section 4.02(g), Silgan shall have the right
to allocate such proceeds between the A Term Loans and the B Term Loans, or
apply such proceeds solely to the A Term Loans or the B Term Loans, as Silgan
shall determine in its sole discretion and, to the extent allocated to any such
Tranche of Term Loans, such proceeds shall be applied (1) first, to reduce the A
Term Loan Scheduled Repayment and/or B Term Loan Scheduled Repayment, as the
case may be, which is due on December 31 of the year in which such repayment is
made and (2) second, to the extent in excess thereof, to reduce the then
remaining A Term Loan Scheduled Repayments and/or B Term Loan Scheduled
Repayments, as the case may be, on a pro rata basis (based upon the then
remaining principal amount of A Term Loan Scheduled Repayments and/or B Term
Loan Scheduled Repayments, as the case may be).
(j) With respect to each repayment of any Tranche of Loans
required by this Section 4.02, the respective Borrower may designate the Types
of Loans which are to be repaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, provided that: (i)
repayments of Eurodollar Loans made pursuant to this Section 4.02 may only be
made on the last day of an Interest Period applicable thereto unless all such
Eurodollar Loans of the respective Tranche with Interest Periods ending on such
date of required repayment and all Base Rate Loans of the respective Tranche
have been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than $5,000,000 (or $2,500,000 in the case of a
Borrowing of Revolving Loans) such Borrowing shall be converted at the end of
the then current Interest Period into a Borrowing of Base Rate Loans; and (iii)
each repayment of any Tranche of Loans shall be applied pro rata among the Banks
with outstanding Loans of such Tranche. In the absence of a designation by the
respective Borrower as described in the preceding sentence, the Administrative
Agent shall, subject to the above, make such designation in its sole discretion.
(k) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, all then outstanding Loans of a respective Tranche
shall be repaid in full on the respective Maturity Date for such Tranche of
Loans.
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4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Bank or Banks
entitled thereto not later than 12:00 Noon (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office of the Administrative Agent. Whenever any payment to be made hereunder or
under any Note shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.
4.04 Net Payments. (a) All payments made by each Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or profits of a Bank pursuant to the
laws of the jurisdiction in which it is organized or in which the principal
office or applicable lending office of such Bank is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities with
respect thereto (collectively, "Taxes"). If any Taxes are so levied or imposed,
such Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such Note.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, then such Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income or
profits of such Bank pursuant to the laws of the jurisdiction in which it is
organized or in which the principal office or applicable lending office of such
Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction and for any withholding of income or similar
taxes imposed by the United States as such Bank shall determine are payable by,
or withheld from, such Bank in respect of such amounts so paid to or on behalf
of such Bank pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Bank pursuant to this sentence. Each Borrower will
furnish to the Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by such Borrower. Each Borrower agrees to indemnify and
hold harmless each Bank, and to reimburse such Bank upon its written request,
for the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver
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to each Borrower and the Administrative Agent on or prior to the Effective Date,
or in the case of a Bank that is an assignee or transferee of an interest under
this Agreement pursuant to Section 1.13 or 12.04 (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or transfer), on
the date of such assignment or transfer, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or Form 1001 (or successor
forms) certifying to such Bank's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 4224 or 1001 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from U.S. withholding tax under
the provisions of Section 881(c) of the Code with respect to payments to be made
under this Agreement and under any Note. In addition, each Bank agrees that from
time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, such Bank will deliver to each Borrower and the Administrative
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as
the case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify each Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate.
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 12.04(b) and the immediately succeeding sentence, each
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder (without any obligation to pay the
respective Bank additional amounts with respect thereto) for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes and which has not
provided to such Borrower such forms required to be provided to such Borrower
pursuant to the first sentence of this Section 4.04(b) (or to the extent such
forms do not establish a complete exemption from such withholding).
Notwithstanding anything to the contrary contained in the preceding sentence and
except as set forth in Section 12.04(b), each Borrower agrees to indemnify each
Bank in the manner set forth in Section 4.04(a) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.
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Section 5. Conditions Precedent.
5.01 Conditions to Loans on the Initial Borrowing Date. The
obligation of each Bank to make Loans, and the obligation of BTCo to issue
Letters of Credit, in each case on the Initial Borrowing Date is subject at the
time of the making of such Loans or the issuance of such Letters of Credit to
the satisfaction of the following conditions:
(a) Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii)
there shall have been delivered to the Administrative Agent for the
account of each of the Banks the appropriate A Term Note, B Term Note
and/or Revolving Note executed by the appropriate Borrower, and to BTCo
the appropriate Swingline Notes executed by the appropriate Borrower,
in each case in the amount, maturity and as otherwise provided herein.
(b) Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate dated the
Initial Borrowing Date signed by the President or any Vice President of
Silgan stating that all of the applicable conditions in Sections
5.01(f), (g), (m), (n) and (o), 5.03 and 5.04 have been satisfied on
such date.
(c) Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received (i) from Winthrop, Stimson,
Putnam & Roberts, counsel to the Borrowers, an opinion addressed to the
Administrative Agent, the Co-Arrangers and each of the Banks and dated
the Initial Borrowing Date covering the matters set forth in Exhibit E
and such other matters incident to the transaction contemplated herein
as the Co-Arrangers may reasonably request and (ii) from local counsel
reasonably satisfactory to the Co-Arrangers opinions each of which
shall be in form and substance satisfactory to the Co-Arrangers and
shall cover the perfection of the security interests granted pursuant
to the Security Documents and such other matters incident to the
transactions contemplated herein as the Co-Arrangers may reasonably
request.
(d) Corporate Documents; Proceedings. (i) On the Initial
Borrowing Date, the Administrative Agent shall have received a
certificate, dated the Initial Borrowing Date, signed by the President
or any Vice President of each Credit Party, and attested to by the
Secretary or any Assistant Secretary of such Credit Party, in the form
of Exhibit F with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and
the foregoing shall be acceptable to the Co-Arrangers in their
reasonable discretion.
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(ii) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement, the other Credit Documents and the Acquisition Documents
shall be satisfactory in form and substance to the Co-Arrangers and the
Required Banks, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records
of corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams, if any, which the Co-Arrangers
reasonably may have requested in connection therewith, such documents
and papers where appropriate to be certified by proper corporate or
governmental authorities.
(e) Plans; Shareholders' Agreements; Management Agreements;
Debt Agreements. On the Initial Borrowing Date, there shall have been
delivered to the Administrative Agent true and correct copies,
certified as true and complete by an appropriate officer of Silgan of
(i) the most recent IRS Form 5500, Schedule B ("Actuarial Information")
for each Plan, (ii) all agreements entered into by Holdings or any of
its Subsidiaries governing the terms and relative rights of its capital
stock and any agreements entered into by shareholders relating to any
such entity with respect to its capital stock (collectively, the
"Shareholders' Agreements"), (iii) all agreements with members of, or
with respect to, the management of Holdings or any of its Subsidiaries
(collectively, the "Management Agreements") and (iv) all agreements
evidencing or relating to Indebtedness of Holdings or any of its
Subsidiaries which is to remain outstanding after giving effect to the
incurrence of Loans on the Initial Borrowing Date if the aggregate
principal amount of the respective Indebtedness exceeds (or upon
utilization of any unused commitments may exceed) $100,000
(collectively, the "Debt Agreements"); all of which Shareholders'
Agreements, Management Agreements and Debt Agreements shall be in form
and substance satisfactory to the Co-Arrangers and shall be in full
force and effect on the Initial Borrowing Date.
(f) Repayment and Termination of Commitments under the
Existing Credit Agreements. On the Initial Borrowing Date and
concurrently with the consummation of the Acquisition and the
incurrence of Term Loans and Revolving Loans, the total commitments
under the Existing Credit Agreement shall have been terminated, and all
loans thereunder shall have been repaid in cash in full, together with
all accrued interest and fees thereon, all letters of credit (other
than the Existing Letters of Credit, if any) issued thereunder shall
have been terminated, and all other amounts owing pursuant to the
Existing Credit Agreement shall have been repaid in full. The
Administrative Agent shall have received evidence in form, scope and
substance satisfactory to it that the matters set forth in this Section
5.01(f) have been satisfied on such date.
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(g) The Acquisition. On or prior to the Initial Borrowing
Date, the Banks shall have received true and correct copies of the
Acquisition Documents, which Acquisition Documents shall be in the form
executed on June 2, 1995, with such changes, if any, thereto as shall
be in form and substance satisfactory to the Co-Arrangers and the
Required Banks. Each of the conditions precedent to the consummation of
the Acquisition shall have been satisfied, and not waived except with
the consent of the Co-Arrangers and the Required Banks, to the
satisfaction of the Co-Arrangers and the Required Banks. The
representations and warranties set forth in the Acquisition Documents
shall be true and correct in all material respects as if made on and as
of the Initial Borrowing Date. On the Initial Borrowing Date, the
Acquisition shall have been consummated in accordance with the
Acquisition Documents and all applicable laws. The assets constituting
the Acquired Business (other than the St. Louis Assets) shall have been
purchased by Containers and AN Can free and clear of all Liens other
than Permitted Liens.
(h) Guaranties. (i) On the Initial Borrowing Date, Holdings
shall have duly authorized, executed and delivered a Second Amended and
Restated Holdings Guaranty in the form of Exhibit G-1 (as modified,
supplemented or amended from time to time, the "Holdings Guaranty"),
and the Holdings Guaranty shall be in full force and effect.
(ii) On the Initial Borrowing Date, each of Silgan,
Containers, Plastics, DM Can and AN Can shall have duly authorized,
executed and delivered a Second Amended and Restated Borrowers Guaranty
in the form of Exhibit G-2 (as modified, supplemented or amended from
time to time, the "Borrowers Guaranty"), and the Borrowers Guaranty
shall be in full force and effect.
(i) Contribution Agreement. On the Initial Borrowing Date, AN
Can shall have duly authorized, executed and delivered a counterpart to
the Contribution Agreement, whereby AN Can shall become a party to, and
bound by all of the terms and conditions of, the Contribution
Agreement, and Schedule I to the Contribution Agreement shall be
modified to reflect the new payment percentages of the parties thereto
in a manner satisfactory to the Co-Arrangers and the Required Banks,
and the Contribution Agreement shall be in full force and effect.
(j) Pledge Agreements. (i) On the Initial Borrowing Date, (i)
Silgan shall have duly authorized, executed and delivered an amendment
to the Silgan Pledge Agreement in the form of Exhibit H-1, (ii) the
Silgan Pledge Agreement, as so amended, shall be in full force and
effect, (iii) no filings, recordings, registrations or other actions
shall be necessary or desirable to maintain the perfection and priority
of the security interests granted pursuant thereto in the Pledge
Agreement Collateral covered thereby and (iv) all the Pledged
Securities referred to therein
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then owned by Silgan (x) endorsed in blank in the case of promissory
notes constituting Pledged Securities and (y) together with executed
and undated stock powers in the case of capital stock constituting
Pledged Securities, shall have been delivered to the Collateral Agent,
as Pledgee.
(ii) On the Initial Borrowing Date, (i) Containers, Plastics,
DM Can and AN Can shall have duly authorized, executed and delivered an
amendment to the Subsidiaries Pledge Agreement in the form of Exhibit
H-2, (ii) the Subsidiaries Pledge Agreement, as so amended, shall be in
full force and effect, and AN Can shall have become a party to, and
bound by all of the terms and conditions of, the Subsidiaries Pledge
Agreement, (iii) no filings, recordings, registrations or other actions
shall be necessary or desirable to maintain the perfection and priority
of the security interests granted pursuant thereto in the Pledge
Agreement Collateral covered thereby and (iv) all the Pledged
Securities referred to therein then owned by each such Credit Party,
(x) endorsed in blank in the case of promissory notes constituting
Pledged Securities and (y) together with executed and undated stock
powers in the case of capital stock constituting Pledged Securities
(including, but not limited to, the capital stock of AN Can), shall
have been delivered to the Collateral Agent, as Pledgee.
(iii) On the Initial Borrowing Date, (i) Holdings shall have
duly authorized, executed and delivered an amendment to the Holdings
Pledge Agreement in the form of Exhibit H-3, (ii) the Holdings Pledge
Agreement, as so amended, shall be in full force and effect, (iii) no
filings, recordings, registrations or other actions shall be necessary
or desirable to maintain the perfection and priority of the security
interest granted pursuant thereto in the Pledge Agreement Collateral
covered thereby and (iv) all the Pledged Securities referred to therein
then owned by Holdings (x) endorsed in blank in the case of promissory
notes constituting Pledged Securities and (y) together with executed
and undated stock powers in the case of capital stock constituting
Pledged Securities, shall have been delivered to the Collateral Agent,
as Pledgee.
(k) Security Agreement. On the Initial Borrowing Date, (i)
Containers, Plastics, DM Can and AN Can shall have duly authorized,
executed and delivered an amendment to the Security Agreement in the
form of Exhibit I, (ii) the Security Agreement, as so amended, shall be
in full force and effect, and AN Can shall have become a party to, and
bound by all of the terms and conditions of, the Security Agreement,
and (iii) except as provided below in this Section 5.01(k), no filings,
recordings, registrations or other actions shall be necessary or
desirable to maintain the perfection and priority of the security
interest granted pursuant to the Security Agreement in the Security
Agreement Collateral covered thereby. On the Initial
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Borrowing Date, there shall have been delivered to the Collateral Agent
the following documents:
(1) proper Financing Statements (Form UCC-1 or the
appropriate equivalent) fully executed for filing under the
UCC of each jurisdiction as may be necessary or, in the
opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the Security
Agreement in the Security Agreement Collateral owned by AN Can
and, to the extent acquired as part of the Acquisition,
Containers;
(2) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, listing all
effective Financing Statements that name Silgan and its
Subsidiaries (including AN Can and the predecessor company
that owned the Security Agreement Collateral comprised of the
Acquired Business prior to the consummation of the
Acquisition), in each case as debtor and that are filed in the
jurisdictions referred to in said clause (1) above, together
with copies of such other Financing Statements that name
Silgan or any of its Subsidiaries as debtor (none of which
shall cover the Security Agreement Collateral except to the
extent evidencing Permitted Liens);
(3) evidence of the completion of all other
recordings and filings of, or with respect to, the Security
Agreement as may be necessary or, in the opinion of the
Collateral Agent, desirable to perfect the security interests
purported to be created by the Security Agreement; and
(4) evidence that all other actions necessary or, in
the opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the
Security Agreement have been taken.
(l) Mortgages; Title Insurance; Surveys; etc. (i) On the
Initial Borrowing Date, the Collateral Agent shall have received fully
executed counterparts of amendments (the "Mortgage Amendments"), in
form and substance satisfactory to the Co-Arrangers, to each of the
Existing Mortgages, together with evidence that counterparts of each of
the Mortgage Amendments have been delivered to the title company
insuring the Lien on the Existing Mortgages for recording in all places
to the extent necessary or desirable, in the judgment of the Collateral
Agent, effectively to maintain a valid and enforceable first priority
mortgage lien on the Existing Mortgaged Properties in favor of the
Collateral Agent for the benefit of the Secured Creditors; and the
Collateral Agent shall have received either endorsements to the
existing Mortgage Policies or new Mortgage Policies assuring the
Collateral Agent that each Existing Mortgage is a valid and enforceable
first priority mortgage
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lien on the respective Existing Mortgaged Properties, free and clear of
all defects and encumbrances except Permitted Encumbrances.
(ii) On the Initial Borrowing Date, the Collateral Agent also
shall have received:
(x) fully executed counterparts of New Mortgages
covering such of the Real Property owned or leased by any
Borrower, by DM Can or by AN Can as shall be designated as
such on Schedule III (each a "New Mortgaged Property" and,
collectively, the "New Mortgaged Properties"), together with
evidence that counterparts of the New Mortgages have been
delivered to the title insurance company insuring the Lien of
the New Mortgages for recording in all places to the extent
necessary or desirable, in the judgment of the Collateral
Agent, effectively to create a valid and enforceable first
priority mortgage Lien (subject to Permitted Encumbrances
relating thereto) on each New Mortgaged Property in favor of
the Collateral Agent (or such other trustee as may be required
or desired under local law) for the benefit of the Secured
Creditors;
(y) Mortgage Policies on each New Mortgaged Property
issued by title insurers reasonably satisfactory to the
Collateral Agent in amounts satisfactory to the Collateral
Agent and assuring the Collateral Agent that the New Mortgages
are valid and enforceable first priority mortgage Liens on the
respective New Mortgaged Properties, free and clear of all
defects and encumbrances except Permitted Encumbrances and
such Mortgage Policies shall otherwise be in form and
substance satisfactory to the Collateral Agent and shall
include, as appropriate, an endorsement for future advances
under this Agreement and the Notes and for any other matter
that the Collateral Agent in its discretion may reasonably
request, shall not include an exception for mechanics' liens,
and shall provide for affirmative insurance and such
reinsurance as the Collateral Agent in its discretion may
request; and
(z) a survey, in form and substance satisfactory to
the Collateral Agent, of each owned New Mortgaged Property,
certified by a licensed professional surveyor reasonably
satisfactory to the Collateral Agent.
(m) Adverse Change, etc. (i) On the Initial Borrowing Date,
nothing shall have occurred (and neither the Co-Arrangers nor the Banks
shall have become aware of any facts or conditions not previously
known) which the Co-Arrangers or the Required Banks shall determine
has, or could have, a material adverse effect on the rights or remedies
of the Administrative Agent, the Co-Arrangers or the Banks,
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or on the ability of any Credit Party to perform its obligations to the
Administrative Agent, the Co-Arrangers and the Banks or which has, or
could have, a materially adverse effect on the Acquired Business or the
business, operations, property, assets, condition (financial or
otherwise) or prospects of any Credit Party or of any Credit Party and
its Subsidiaries taken as a whole.
(ii) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and material third party approvals
and/or consents in connection with the Transaction and the transactions
contemplated by the Documents and otherwise referred to herein or
therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of the Transaction
or the other transactions contemplated by the Credit Documents and the
Acquisition Documents and otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief
or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the consummation of the Transaction,
the transaction contemplated by the Credit Documents and the
Acquisition Documents, the making of the Loans or issuance of Letters
of Credit.
(iii) No consents or approvals shall be required to be
obtained by Holdings or any of its Subsidiaries from the holders of the
Holdings Debentures or the Silgan Subordinated Notes in connection with
the consummation of the Transaction, the entering into of this
Agreement or any of the other documents referred herein (including,
without limitation, the amendments to the Contribution Agreement or any
of the Security Documents) and the incurrence of all Loans hereunder.
The full amount of the Loans (assuming the utilization of the Total
Commitment) may be incurred under the Holdings Debentures and the
Silgan Subordinated Notes, and all Obligations incurred hereunder and
under the other Credit Documents constitute "senior indebtedness" for
purposes of the Holdings Debentures and the Silgan Subordinated Notes.
The Co-Arrangers shall have received evidence (including appropriate
legal opinions and a certificate of the chief financial officer of
Silgan) in form, scope and substance satisfactory to them that the
matters set forth in this clause (iii) have been satisfied.
(n) Litigation. On the Initial Borrowing Date, no litigation
by any entity (private or governmental) shall be pending or threatened
with respect to this Agreement or any documentation executed in
connection herewith or the transactions contemplated hereby, or with
respect to the Transaction (except as disclosed in a letter dated July
24, 1995 from Blecher & Collins to Containers, a copy of which letter
has been previously distributed to the Banks (the "Blecher Letter")) or
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which the Co-Arrangers or the Required Banks shall determine could have
a materially adverse effect on the Transaction, the Acquired Business,
or on the business, operations, property, assets, condition (financial
or otherwise) or prospects of the Acquired Business, any Credit Party
or of any Credit Party and its Subsidiaries taken as a whole.
(o) Fees, etc. On the Initial Borrowing Date, Holdings and
each Borrower shall have paid to the Administrative Agent, the
Co-Arrangers and the Banks all costs, fees and expenses (including,
without limitation, legal fees and expenses) payable to the
Administrative Agent, the Co-Arrangers and the Banks or payable in
respect of the Transaction to the extent then due.
(p) Solvency Certificate; Environmental Analyses. On the
Initial Borrowing Date, Silgan shall have delivered to the
Administrative Agent (i) a solvency certificate in the form of Exhibit
J from the chief financial officer of Silgan, dated the Initial
Borrowing Date, setting forth the conclusion that, after giving effect
to the Transaction and the incurrence of all financings contemplated
herein, Silgan and its Subsidiaries (on a consolidated basis) and each
Borrower (on a stand alone basis) is not insolvent and will not be
rendered insolvent by the indebtedness incurred in connection herewith,
will not be left with unreasonably small capital with which to engage
in their businesses and will not have incurred debts beyond their
ability to pay such debts as they mature and become due, and (ii) Phase
I environmental assessments from Park Environmental Corporation
covering the Real Property acquired or leased by Containers and AN Can
pursuant to the Acquisition, the results of which shall be in form and
substance satisfactory to the Co-Arrangers and the Required Banks.
(q) Notices to Holders of Certain Indebtedness and to the
Collateral Agent. (i) On the Initial Borrowing Date, Holdings shall
have delivered to the trustee under the Holdings Debenture Indenture,
notice to the effect that this Agreement (and only this Agreement)
constitutes the "Silgan Amended Credit Agreement" (as defined in the
Holdings Debenture Indenture), and Holdings shall have taken all other
action as may be necessary or, in the opinion of the Co-Arrangers
desirable, to ensure that this Agreement is entitled to all the rights
and benefits afforded the "Silgan Amended Credit Agreement" under the
Holdings Debenture Indenture.
(ii) On the Initial Borrowing Date, Silgan shall have
delivered to the trustee under the Silgan Subordinated Notes Indenture,
notice to the effect that this Agreement (and only this Agreement)
constitutes the "Amended Credit Agreement" (as defined in the Silgan
Subordinated Notes Indenture), and Silgan shall have taken all other
action as may be necessary or, in the opinion of the Co-Arrangers
desirable, to ensure that this Agreement is entitled to all the rights
and benefits
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afforded the "Amended Credit Agreement" under the Silgan Subordinated
Notes Indenture.
(iii) On the Initial Borrowing Date, Silgan shall have
delivered to the holders of the Existing Senior Secured Notes and the
Issuing and Paying Agent with respect thereto, an irrevocable notice to
the effect that all outstanding Existing Senior Secured Notes shall be
repaid in full on the Existing Senior Secured Notes Redemption Date,
and Silgan shall have taken all other action as may be necessary, or in
the opinion of the Co-Arrangers desirable, to ensure that all
outstanding Existing Senior Secured Notes are repaid in full by such
date.
(iv) On the Initial Borrowing Date, each of Holdings and
Silgan shall have delivered to the Collateral Agent notice to the
effect that the Indebtedness incurred under this Agreement refinances
the Indebtedness incurred under the Existing Credit Agreement and that
the Indebtedness incurred under this Agreement shall be treated as
issued under the "Credit Agreement" (as defined in each of the Security
Documents), and shall have taken all other action as may be necessary
or, in the opinion of the Co-Arrangers desirable, to ensure that this
Agreement is entitled to all the rights and benefits afforded the
"Credit Agreement" under each of the Security Documents.
(v) On the Initial Borrowing Date, Silgan shall have delivered
to the Administrative Agent evidence in form, scope and substance
satisfactory to the Co-Arrangers that the matters set forth in this
Section 5.01(q) have been satisfied as of such date.
(r) Consent Letter. On the Initial Borrowing Date, the
Administrative Agent shall have received a letter from CT Corporation
System, presently located at 1633 Broadway, New York, New York 10019,
substantially in the form of Exhibit K, indicating its consent to its
appointment by each Credit Party as its agent to receive service of
process as specified in this Agreement and the other Credit Documents.
(s) Financial Projections; Pro Forma Balance Sheet. On or
prior to the Initial Borrowing Date, there shall have been delivered to
each Co-Arranger (i) detailed projected financial statements for Silgan
and its Subsidiaries for the period through December 31, 2001 (the
"Projections"), which Projections shall reflect the forecasted
financial condition and results of operations of Silgan and its
Subsidiaries after giving effect to the Transaction and the related
financing thereof and the other transactions contemplated hereby and
(ii) an estimated consolidated balance sheet as of July 31, 1995 of
Holdings and its Subsidiaries after giving effect to the Transaction
and the related financing thereof and the other transactions
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contemplated hereby, which Projections and balance sheet shall be in
form and substance satisfactory to the Co-Arrangers and the Required
Banks. There are no statements or conclusions in any of the Projections
which are based upon or include information known to any Borrower to be
misleading in any material respect or which fail to take into account
material information regarding the matters reported therein. On the
Initial Borrowing Date, each Borrower believes that the Projections
were reasonable and attainable, it being recognized, however, that
projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered thereby may differ
from the projected results and that the differences may be material.
(t) Initial Borrowing Base Certificate and Report of Inventory
and Accounts Receivable. On the Initial Borrowing Date, Silgan shall
have delivered to the Administrative Agent the initial Borrowing Base
Certificate and the initial Inventory and Accounts Receivable Report
meeting the requirements of Section 7.01(i) and, after giving effect to
the incurrence of Revolving Loans and the Letter of Credit
Outstandings, if any, on the Initial Borrowing Date, no Borrowing Base
Deficiency shall exist.
(u) Tax Sharing Agreement. On the Initial Borrowing Date, AN
Can shall have duly authorized, executed and delivered a counterpart to
the Tax Sharing Agreement whereby AN Can shall have become a party to,
and be bound by all of the terms of, the Tax Sharing Agreement, and the
Tax Sharing Agreement, as so amended, shall be in full force and
effect. On the Initial Borrowing Date, Silgan shall have delivered to
the Administrative Agent a true and correct copy of the Tax Sharing
Agreement as amended through such date, and the Tax Sharing Agreement,
as so amended, shall be in form and substance satisfactory to the
Co-Arrangers and the Required Banks.
(v) Insurance. On the Initial Borrowing Date, Silgan shall
have delivered to the Administrative Agent certificates from the
respective insurer with respect to each insurance policy listed in
Schedule IV, which certificates shall name the Collateral Agent as an
additional insured and/or loss payee and shall state that such
insurance shall not be cancelled without at least 30 days' prior
written notice by the respective insurer to the Collateral Agent.
(w) Intercompany Agency Agreements. (i) On the Initial
Borrowing Date, Containers and AN Can shall have duly authorized,
executed and delivered to the Administrative Agent and the Co-Arrangers
a true and correct copy of the AN Can Intercompany Agency Agreement,
which shall be in form and substance satisfactory to the Co-Arrangers
and shall be in full force and effect.
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(ii) On the Initial Borrowing Date, the DM Can Intercompany
Agency Agreement shall be in full force and effect, and the
Administrative Agent shall have received a true and correct copy of the
DM Can Intercompany Agency Agreement.
5.02 Conditions to A Term Loans on the Second Term Loan
Borrowing Date and on the Third Term Loan Borrowing Date. The obligations of
each Bank to make A Term Loans on the Second Term Loan Borrowing Date and on the
Third Term Loan Borrowing Date are subject, at the time of such Credit Event, to
the satisfaction of the following conditions:
(a) Repayment of Existing Senior Secured Note. On the Second
Term Loan Borrowing Date and on the Third Term Loan Borrowing Date, and
concurrently with the incurrence of A Term Loans on each such date,
Silgan shall deliver the proceeds of such A Term Loans to the Issuing
and Paying Agent, to be held by the Issuing and Paying Agent pursuant
to the Issuing and Paying Agency Agreement for the holders of the
Existing Senior Secured Notes to repay outstanding Existing Senior
Secured Notes on the immediately succeeding Business Day, together with
all accrued interest and fees thereon and any prepayment premium
associated therewith and all other obligations with respect thereto
that are outstanding under the Existing Senior Secured Note Agreement.
(b) No Specified Default. There shall exist no Default or
Event of Default under Section 9.01 or 9.05.
(c) Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing with respect to such Borrowing of A Term
Loans meeting the requirements of Section 1.03(a).
5.03 Conditions to Revolving Loans and Letters of Credit on
and after the Initial Borrowing Date. The obligation of each Bank to make
Revolving Loans, and of BTCo to make Swingline Loans and to issue Letters of
Credit, on and after the Initial Borrowing Date is subject, at the time of each
such Credit Event, to the satisfaction of the following condition:
(a) No Borrowing Base Deficiency. On the date of such Credit
Event, based on the Borrowing Base Certificate last required to be
delivered pursuant to Section 7.01(i) and after giving effect to the
occurrence of such Credit Event on such date, no Borrowing Base
Deficiency shall be in existence. In addition, on the date of such
Credit Event, an authorized officer of the respective Borrower shall
have certified that, after giving effect to the occurrence of such
Credit Event on such date and after giving effect to any change in the
Borrowing Base since the date
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of the Borrowing Base Certificate last delivered to each Bank, there is
no reason to believe that a Borrowing Base Deficiency will exist.
5.04 Conditions to All Credit Events. The obligation of each
Bank to make any Loans (including, without limitation, Loans of the types
described in Sections 5.01 and 5.03, but excluding Loans of the type described
in Section 5.02), and of BTCo to issue any Letters of Credit, is subject at the
time of each such Credit Event, to the satisfaction of the following conditions:
(a) No Default. There shall exist no Default or Event of
Default.
(b) Representations and Warranties. All representations and
warranties contained herein and in the other Credit Documents shall be
true and correct in all respects with the same effect as though such
representations and warranties had been made on and as of the date of
such Credit Event.
(c) Notice of Borrowing; Letter of Credit Request. The
Administrative Agent shall have received a Notice of Borrowing with
respect to such Borrowing of Loans (excluding Swingline Loans and
Mandatory Borrowings) meeting the requirements of Section 1.03(a) or a
Letter of Credit Request for such issuance of a Letter of Credit
meeting the requirements of Section 2.03, as the case may be. Prior to
the making of any Swingline Loans, BTCo shall have received the notice
required by Section 1.03(b)(i).
(d) Subsequent Legal Opinions. If, at the time of any Credit
Event subsequent to the Initial Borrowing Date, the Administrative
Agent, any Co-Arranger or the Required Banks shall have reasonably
requested same, the Administrative Agent shall have received from
counsel (who shall be Winthrop, Stimson, Putnam & Roberts or such other
counsel reasonably satisfactory to the Administrative Agent and the
Co-Arrangers) for the Borrowers an opinion in form and substance
satisfactory to the Administrative Agent, the Co-Arrangers and the
Required Banks, addressed to the Administrative Agent, the Co-Arrangers
and each of the Banks and dated the date of such Credit Event, covering
such of the matters set forth in the opinions of counsel required to be
delivered pursuant to this Section 5 as the Administrative Agent, such
Co-Arranger or the Required Banks shall specify or such other matters
incident to the transactions contemplated herein as the Administrative
Agent, such Co-Arranger or the Required Banks may reasonably request.
(e) No Future Advances Notice. Neither the Administrative
Agent nor any Bank shall have received notice from any Credit Party
pursuant to ss. 443.055 of the Missouri Revised Statutes to the effect
that any Credit Party elects to terminate the
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operation of any Mortgage or Additional Security Document, as the case
may be, as security for future advances made under this Agreement.
The acceptance of the benefits of each Credit Event (and the occurrence of the
Initial Borrowing Date) shall constitute a representation and warranty by each
of the Borrowers to each of the Banks that all the applicable conditions
specified in this Section 5 are satisfied as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in this
Section 5, unless otherwise specified, shall be delivered to the Administrative
Agent at the Administrative Agent's Notice Office for the account of each of the
Banks and, except for the Notes, in sufficient counterparts or copies for each
of the Banks and shall be satisfactory in form and substance to the Required
Banks.
Section 6. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans and
issue or participate in Letters of Credit, each of the Borrowers makes the
following representations, warranties and agreements, in each case after giving
effect to the Transaction, all of which shall survive the execution and delivery
of this Agreement and the Notes and the making of the Loans and the issuance of
the Letters of Credit, with the occurrence of each Credit Event on and after the
Initial Borrowing Date being deemed to constitute a representation and warranty
that the matters specified in this Section 6 are true and correct on and as of
the Initial Borrowing Date and on the date of each such Credit Event; provided,
that each of Containers and Plastics makes the following representations,
warranties and agreements only as to itself and its Subsidiaries:
6.01 Corporate Status. Each Credit Party and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified as a foreign corporation and in good standing in each
jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification, except in those
jurisdictions where the failure to be so qualified would not, individually or in
the aggregate, have a material adverse effect on the business, operations,
property, assets or condition (financial or otherwise) of Holdings, Holdings and
its Subsidiaries taken as a whole, any Borrower or any Borrower and its
Subsidiaries taken as a whole.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of each of the Credit Documents and the Acquisition Documents to
which it is party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such Credit Documents and
Acquisition Documents. Each Credit Party has duly executed and delivered each of
the Credit Documents and the Acquisition Documents to
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which it is party and each of such Credit Documents and Acquisition Documents
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except to the extent that enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by equity principles (regardless of
whether enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of any Document to which it is a party, nor
compliance by it with any of the terms and provisions thereof, (i) will
contravene any provision of any law, statute, rule or regulation or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict or be inconsistent with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the property or
assets of such Credit Party or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement, contract or instrument to which such Credit Party or any of its
Subsidiaries is a party or by which it or any of its property or assets is bound
or to which it may be subject (other than the Existing Senior Secured Note
Documents) or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws of such Credit Party or any of its Subsidiaries.
6.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made and except for any filings of
financing statements, mortgages and other documents required by the Security
Documents, all of which have been made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Document or (ii) the legality, validity, binding effect or enforceability
of any such Document.
6.05 Pledge Agreements. The security interests created in
favor of the Collateral Agent for the benefit of the respective Secured
Creditors under the Pledge Agreements secure the Secured Obligations and
constitute first priority perfected security interests in the respective Pledge
Agreement Collateral subject to no Lien of any other Person. No consents,
filings or recordings are required in order to perfect, and/or maintain the
perfection and priority of, the security interests purported to be created by
the Pledge Agreements.
6.06 Security Agreement; Mortgages; Real Property. (a) The
Security Agreement creates, in favor of the Collateral Agent for the benefit of
the respective Secured Creditors as security for the Secured Obligations, a
valid and enforceable perfected security interest in and Lien on all of the
Security Agreement Collateral referred to therein, as may
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be perfected by the filing of financing statements or by the taking of
possession by the Collateral Agent, superior to and prior to the rights and
Liens of all third Persons (except that the security interests created by the
Security Agreement may be subject to the Permitted Liens on the assets of the
respective assignor thereunder and Liens permitted to exist under Sections
8.01(i), (ii), (viii) and, in the case of any assets acquired pursuant to a
Permitted Acquisition, Section 8.01(ix)). Except as have been obtained or made,
no consents, filings or recordings are required to maintain the perfection and
priority of the security interests purported to be created by the Security
Agreement. At the time of the granting of any security interests pursuant to the
Security Agreement, the respective assignor thereunder shall have good and
marketable title to all Security Agreement Collateral referred to therein free
and clear of all Liens except those described above in this Section 6.06.
(b) The Mortgages (as amended by the Mortgage Amendments, and
including the New Mortgages) create, as security for the Secured Obligations, a
valid and enforceable perfected security interest in and Lien on all of the
respective Mortgaged Properties, in favor of the Collateral Agent for the
benefit of the respective Secured Creditors, superior to and prior to the rights
and Liens of all third persons (except that the security interests created by
the Mortgages may be subject to the respective Permitted Encumbrances and Liens
permitted to exist under Sections 8.01(i), (ii), (vii), (viii) and, in the case
of any Real Property acquired pursuant to a Permitted Acquisition, Section
8.01(ix)). No consents, filings or recordings are required to maintain the
perfection and priority of the security interests purported to be created by the
Mortgages, except for the filings and recordings of the Mortgage Amendments and
the New Mortgages. At the time of the granting of any Mortgage, the respective
mortgagor shall have good and marketable title (subject to the respective
Permitted Encumbrances) to all Mortgaged Properties covered thereby, free and
clear of Liens except those described in the second preceding sentence. Schedule
III sets forth all Real Property owned and leased (beneficially or otherwise) by
each Credit Party (all as indicated therein).
(c) The Additional Security Documents, after the execution and
delivery thereof, will create, in favor of the Collateral Agent for the benefit
of the respective Secured Creditors, as security for the Secured Obligations, a
valid and enforceable perfected security interest in and Lien on all of the
Additional Collateral, superior to and prior to the rights and Liens of all
third Persons (except that the security interests created by the Additional
Security Documents may be subject to such Liens as are existing on the date of
execution of such Additional Security Documents and permitted under Section
8.01). The respective Credit Party will have good and marketable title to the
respective Additional Collateral, free and clear of all Liens, except those
described in the preceding sentence.
6.07 Financial Statements; Financial Condition; etc. (a) The
statements of consolidated and consolidating financial condition of each of
Holdings and its Consolidated Subsidiaries and Silgan and its Consolidated
Subsidiaries at December 31,
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1994 and March 31, 1995 and the related consolidated and consolidating
statements of income and cash flow of each of Holdings and its Consolidated
Subsidiaries and Silgan and its Consolidated Subsidiaries for the fiscal year
and three-month period ended on such date, as the case may be (which (x) in the
case of the financial statements for the fiscal year ended on December 31, 1994,
have been certified by nationally recognized independent certified public
accountants satisfactory to the Co-Arrangers and (y) in the case of all such
financial statements, have heretofore been furnished to the Banks), present
fairly the financial position of each of Holdings and its Consolidated
Subsidiaries and Silgan and its Consolidated Subsidiaries at the date of such
statements and for the periods covered thereby and have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied. Since December 31, 1994, and after giving effect to the
Transaction, there has been no material adverse change in the operations,
business, property, assets or condition (financial or otherwise) of Holdings,
Holdings and its Subsidiaries taken as a whole, any Borrower or any Borrower and
its Subsidiaries taken as a whole.
(b) On the Initial Borrowing Date and after giving effect to
the transactions and financings contemplated hereby and in the Documents, (i)
the sum of the assets of each of Holdings and its Subsidiaries (taken as a
whole) and each Borrower (on a stand alone basis), at a fair valuation, will
exceed its respective liabilities, including contingent liabilities, (ii) each
of Holdings and its Subsidiaries (taken as a whole) and each Borrower (on a
stand alone basis) will have sufficient capital with which to conduct its
respective businesses and (iii) each of Holdings and its Subsidiaries (taken as
a whole) and each Borrower (on a stand alone basis) will not have incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of this Section 6.07(b), "debt" means any liability
on a claim, and "claim" means (x) any right to payment, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, or (y) any right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(c) Except as fully disclosed in the financial statements
delivered pursuant to Section 6.07(a), there were as of the Initial Borrowing
Date no liabilities or obligations with respect to Holdings or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due), which, either individually or in the
aggregate, would be material to Holdings or its Subsidiaries. As of the Initial
Borrowing Date, each Borrower knows of no Material Loss Contingency (as defined
in Statements of Financial Accounting Standards No. 5) as to Holdings or its
Subsidiaries.
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6.08 Litigation. There are no actions, suits, investigations
or proceedings pending or, to the best of the knowledge of any Borrower,
threatened (i) with respect to any Document or the Transaction (except as
disclosed in the Blecher Letter) or (ii) that are reasonably likely to
materially and adversely affect the business, operations, property, assets or
condition (financial or otherwise) of Holdings, Holdings and its Subsidiaries
taken as a whole, any Borrower or any Borrower and its Subsidiaries taken as a
whole.
6.09 True and Complete Disclosure. To the best of each
Borrower's knowledge after due inquiry, this Agreement and all other written
information furnished to the Banks by or on behalf of the Borrowers in
connection herewith did not taken as a whole contain any untrue statement of
material fact or omit to state a material fact necessary in order to make the
information contained herein and therein not misleading.
6.10 Use of Proceeds; Margin Regulations. (a) All proceeds of
the Term Loans shall be used (i) to finance the repayment of amounts owing
pursuant to the Existing Credit Agreement and the Existing Senior Secured Note
Agreement, (ii) to finance the purchase price of the Acquisition, and (iii) to
pay the fees and expenses incurred in connection with the Transaction.
(b) The proceeds of all Revolving Loans and Swingline Loans
incurred by Containers or Plastics, as the case may be, shall be utilized by
Containers or Plastics, as the case may be, for its general corporate purposes
and for the general corporate purposes of its respective Subsidiaries, including
the payment of Dividends, the repayment of certain Indebtedness the financing of
Permitted Acquisitions and the St. Louis Facility Acquisition and the making of
advances to the extent and for the purposes permitted pursuant to Sections 8.03,
8.05 and 8.06.
(c) No part of the proceeds of any Loan will be used by any
Borrower or any Subsidiary thereof to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock. Neither the making of any Loan nor the use of the proceeds thereof will
violate or be inconsistent with the provisions of Regulations G, T, U or X of
the Board of Governors of the Federal Reserve System.
6.11 Tax Returns and Payments. Each of the Borrowers and each
of its Subsidiaries has filed all federal tax returns and material state tax
returns required to be filed by it and has paid all income taxes payable by it
which have become due pursuant to such tax returns and all other taxes and
assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith. Each of the Borrowers
and each of its Subsidiaries has paid, or has provided adequate reserves (in the
good faith judgment of the management of such Borrower) for the payment of, all
federal and state income taxes applicable for all prior fiscal years and for the
current fiscal year to the date hereof.
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6.12 Compliance with ERISA. Each Plan is in substantial
compliance with ERISA and the Code; no Plan is insolvent or in reorganization;
no Plan other than a Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) has an Unfunded Current Liability; and no Plan has an
accumulated or waived funding deficiency or has applied for an extension of any
amortization period within the meaning of Section 412 of the Code; no Borrower
nor any Subsidiary of any Borrower nor any ERISA Affiliate has incurred any
liability to or on account of a Plan which is a single-employer plan (as defined
in Section 4001(a)(15) of ERISA) pursuant to Section 4062, 4063 or 4064 of ERISA
or a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) pursuant to
Section 515, 4201 or 4204 of ERISA; no proceedings have been instituted to
terminate any Plan; and no condition exists which presents a material risk to
any Borrower or any Subsidiary of any Borrower or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to any of the
foregoing Sections of ERISA or the Code; no lien imposed under the Code or ERISA
on the assets of any Borrower or any Subsidiary of any Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan; and each of the
Borrowers and their Subsidiaries may terminate contributions to any other
employee benefit plans maintained by them (except as provided pursuant to
collective bargaining agreements) without incurring any material liability to
any person interested therein other than with respect to benefits accrued prior
to the date of termination. Notwithstanding anything to the contrary contained
in this Section 6.12, all representations and warranties made in this Section
6.12 with respect to a Plan that is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) shall be to the best knowledge of the Borrowers.
6.13 Capitalization. On the Initial Borrowing Date: (a) the
authorized capital stock of Silgan consists of (i)(x) 1,000 shares of Class A
common stock, $.01 par value per share, of which one share is issued and
outstanding and owned of record by Holdings, (y) 1,000 shares of Class B common
stock, $.01 par value per share, of which one share is issued and outstanding
and owned of record by Holdings and (z) 1,000 shares of Class C common stock,
$.01 par value per share, of which no shares are issued and outstanding and (ii)
1,000 shares of preferred stock, $1.00 par value per share, of which no shares
are issued and outstanding;
(b) the authorized capital stock of Containers consists of (i)
15,000 shares of common stock, $.01 par value per share, of which 13,764 shares
are issued and outstanding and owned of record by Silgan and (ii) 1,000 shares
of preferred stock, $1.00 par value per share, of which no shares are issued and
outstanding;
(c) the authorized capital stock of Plastics consists of (i)
15,000 shares of common stock, $.01 par value per share, of which 13,800 shares
are issued and outstanding and owned of record by Silgan and (ii) 1,000 shares
of preferred stock, $1.00 par value per share, of which no shares are issued and
outstanding;
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(d) the authorized capital stock of DM Can consists of 100
shares of common stock, no par value, all of which shares are issued and
outstanding and owned of record by Containers; and
(e) the authorized capital stock of AN Can consists of 1000
shares of common stock, no par value, of which shares 100 are issued and
outstanding and owned of record by Containers.
All such outstanding shares of capital stock of Silgan, Containers, Plastics, DM
Can and AN Can have been duly and validly issued, are fully paid and
non-assessable. None of the Borrowers has outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock,
except (i) options in respect of up to 1,200 shares of common stock of
Containers granted to certain employees of Containers (the "Containers Employee
Stock Options") pursuant to certain stock option agreements (the "Containers
Stock Option Agreements") and the obligation of Containers to make certain
payments in respect of the stock appreciation rights granted in connection
therewith, (ii) options in respect of up to 1,200 shares of the common stock of
Plastics granted to certain employees of Plastics (the "Plastics Employee Stock
Options") pursuant to certain stock option agreements (the "Plastics Stock
Option Agreements") and the obligation of Plastics to make certain payments in
respect of the stock appreciation rights granted in connection therewith, (iii)
the right of Containers or Plastics as the case may be, to call, and the
obligation of Containers or Plastics as the case may be, to repurchase, all but
not less than all of the common stock of Containers or Plastics, as the case may
be, acquired by employees of Containers or Plastics, as the case may be, through
the exercise of their respective Employee Stock Options, and held by such
employees at the time of their termination of employment, all as set forth in
the Stock Option Agreements, and (iv) pursuant to the Second Amended and
Restated 1989 Stock Option Plan of Containers and the 1994 Stock Option Plan of
Plastics, in the event of a "public offering" of the common stock of Holdings or
Silgan, or a "change of control" of Holdings or Silgan, Employee Stock Options
shall, as more fully described therein, be converted to options to purchase
common stock of Holdings, and shares previously issued upon the exercise of
Employee Stock Options shall, as more fully described therein, be converted into
common stock of Holdings. None of the Borrowers is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital stock or make any payments in connection with stock
appreciation rights, except as described in the immediately preceding sentence.
6.14 Subsidiaries. Other than Subsidiaries acquired or created
pursuant to Section 8.13, (i) Silgan has no Subsidiaries other than Containers,
Plastics, NRO and Subsidiaries of Containers and Plastics, (ii) Containers has
no Subsidiaries other than DM
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Can and AN Can and (iii) Plastics has no Subsidiaries other than Express and
Canadian Holdco.
6.15 Compliance with Statutes, etc. (a) Each of the Credit
Parties and each of its Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such statutes, regulations, orders and restrictions the
failure to be in compliance with which would not, individually or in the
aggregate, have a material adverse effect on the business, operations, property,
assets or condition (financial or otherwise) of Holdings, Holdings and its
Subsidiaries taken as a whole, any Borrower or any Borrower and its Subsidiaries
taken as a whole.
(b) Each Credit Party and each of its Subsidiaries have
complied with all applicable federal, state and local environmental laws
(including, without limitation, RCRA and CERCLA), regulations and ordinances
governing its business products, properties or assets with respect to all
discharges into the ground and surface water, emissions into the ambient air and
generation, accumulation, storage, treatment, transportation, labeling or
disposal of waste materials or process by-products for which failure to comply
could have a material adverse effect on the business, operations, property,
assets or condition (financial or otherwise) of Holdings, Holdings and its
Subsidiaries taken as a whole, any Borrower or any Borrower and its Subsidiaries
taken as a whole, and none of the Credit Parties nor their Subsidiaries is
liable for any material penalties, fines or forfeitures for failure to comply
with any of the foregoing in the manner set forth above. All material licenses,
permits or registrations required for the business of the Credit Parties and
their Subsidiaries, as presently conducted, under any federal, state or local
environmental laws, regulations or ordinances have been secured and each of the
Credit Parties and their Subsidiaries is in substantial compliance therewith.
None of the Credit Parties nor any of their Subsidiaries is in noncompliance
with, breach of or default under any applicable writ, order, judgment,
injunction, or decree to which any such Person is a party and which would
materially and adversely affect the ability of such Person to operate its
businesses or its manufacturing facilities and no event has occurred and is
continuing which, with the passage of time or the giving of notice or both,
would constitute a noncompliance, breach of or default thereunder which would
materially and adversely affect the ability of such Person to operate its
business or its manufacturing facilities. There are no legal or governmental
proceedings pending or, to the best of the Borrowers' knowledge after reasonable
investigation, threatened which (a) question the validity, term or entitlement
of any Borrower or any of its Subsidiaries of or to any material permit,
license, order or registration required for the operation of any facility which
any Borrower or any of its Subsidiaries currently operates and (b) wherein an
unfavorable decision, ruling or finding could have a adverse effect on the
financial viability of any of its material facilities, in each case
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to the extent that any such proceedings could have a material adverse effect on
the business, operations, property, assets or condition (financial or otherwise)
of Holdings, Holdings and its Subsidiaries taken as a whole, any Borrower or any
Borrower and its Subsidiaries taken as a whole.
(c) To the best of the Borrowers' knowledge and belief, none
of the Borrowers nor any of their Subsidiaries has disposed of or otherwise
discharged any hazardous waste, toxic substances or similar materials, the
disposal of which could give rise to any liability under applicable
environmental laws and regulations which could have a materially adverse effect
on the business, operations, property, assets or condition (financial or
otherwise) of Holdings, Holdings and its Subsidiaries taken as a whole, any
Borrower or any Borrower and its Subsidiaries taken as a whole.
6.16 Investment Company Act. None of the Borrowers nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
6.17 Public Utility Holding Company Act. None of the Borrowers
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.18 Labor Relations. None of the Credit Parties nor any of
their respective Subsidiaries is engaged in any unfair labor practice that could
have a material adverse effect on Holdings, Holdings and its Subsidiaries taken
as a whole, any Borrower or any Borrower and its Subsidiaries taken as a whole.
There is (i) no unfair labor practice complaint pending against any Borrower or
any of its Subsidiaries or, to the best knowledge of the Borrowers, threatened
against any of them, before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under collective bargaining
agreements is so pending against any Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrowers, threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against any Borrower or any
of its Subsidiaries or, to the best knowledge of the Borrowers, threatened
against any Borrower or any of its Subsidiaries and (iii) to the best knowledge
of the Borrowers, no union representation question existing with respect to the
employees of any Borrower or any of its Subsidiaries and, to the best knowledge
of the Borrowers, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not have a material adverse
effect on the business, operations, property, assets or condition (financial or
otherwise) of Holdings, Holdings and its Subsidiaries taken as a whole, any
Borrower or any Borrower and its Subsidiaries taken as a whole.
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6.19 Patents, Licenses, Franchises and Formulas. Each of the
Borrowers and its Subsidiaries owns all the patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas, or
rights with respect to the foregoing, and has obtained assignments of all leases
and other rights of whatever nature, necessary for the present conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, would result in a material adverse
effect on the business, operations, property, assets or condition (financial or
otherwise) of Holdings, Holdings and its Subsidiaries taken as a whole, any
Borrower or any Borrower and its Subsidiaries taken as a whole.
6.20 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Transaction shall
have been obtained, given, filed or taken and are or will be in full force and
effect (or effective judicial relief with respect thereto shall have been
obtained). All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Transaction. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the Transaction, or the occurrence of any
Credit Event or the performance by any Credit Party of its obligations under the
respective Documents. All actions taken by the Credit Parties pursuant to or in
furtherance of the Transaction have been taken in compliance with the respective
Documents and all applicable laws.
6.21 Representations and Warranties in Acquisition Documents.
All representations and warranties made by any Credit Party or any of its
Subsidiaries set forth in each of the Acquisition Documents are true and correct
in all material respects as of the time as of which such representations and
warranties were made.
6.22 Subordination. The subordination provisions contained in
all notes, debentures and other instruments entered into or issued in respect of
(i) the Holdings Debentures in the event that same become the obligations of
Silgan pursuant to the terms thereof, (ii) the Silgan Subordinated Notes and
(iii) to the extent applicable, any Refinancing Indebtedness, in each case are
enforceable against the issuer of the respective security and the holders
thereof and the Loans and all other Obligations are within the definition of
"Senior Indebtedness" contained in the Holdings Debenture Documents, the Silgan
Subordinated Note Documents and, to the extent applicable, any Refinancing
Indebtedness Documents.
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Section 7. Affirmative Covenants. The Borrowers jointly and
severally covenant and agree (provided that each of Containers and Plastics
covenants and agrees only as to itself and its Subsidiaries) that on and after
the Effective Date and until the Total Commitment and all Letters of Credit have
terminated and the Loans, Notes and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder and thereunder, are paid in
full:
7.01 Information Covenants. The respective Borrower will
furnish to each Bank:
(a) Monthly Reports. As soon as practicable, and in any event
within 30 days after the end of each calendar month of each fiscal year
of Containers, Plastics and each other direct Wholly-Owned Domestic
Subsidiary of Silgan, the management information reports for such month
delivered to Silgan by Containers, Plastics and such other Wholly-Owned
Domestic Subsidiary of Silgan, containing a monthly operating profit
and loss statement for each of Containers and its Subsidiaries on a
consolidated basis, Plastics and its Subsidiaries on a consolidated
basis and each such other direct Wholly-Owned Domestic Subsidiary of
Silgan (on a consolidated basis), a statement of working capital
showing the value of inventory and the amount of liabilities and
containing an accounts receivable aging schedule, and management's
estimate of cash flow showing capital expenditures.
(b) Quarterly Financial Statements. Within 60 days (or 120
days in the case of the fourth fiscal quarter) after the close of each
quarterly accounting period in each fiscal year of Holdings, the
consolidated and consolidating balance sheets of Holdings and its
Consolidated Subsidiaries as at the end of such quarterly accounting
period and the related consolidated and consolidating statements of
income and cash flow for such quarterly accounting period and for the
elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, in each case setting forth comparative
figures for the related periods in the prior fiscal year, all of which
shall be certified by the chief financial officer, treasurer or
controller of Silgan, subject to normal year-end audit adjustments.
(c) Annual Financial Statements. Within 120 days after the
close of each fiscal year of Holdings, the consolidated and
consolidating balance sheets of Holdings and its Consolidated
Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income and cash flow for
such fiscal year, in each case setting forth comparative figures for
the preceding fiscal year and certified, in the case of the
consolidated financial statements, by independent certified public
accountants of recognized national standing acceptable to the
Co-Arrangers, and in the case of the consolidating financial
statements, by the chief financial officer, treasurer or controller of
Silgan, in each case together
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with a report of such accounting firm stating that in the course of its
regular audit of the financial statements of Holdings and its
Consolidated Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Default or Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default
or an Event of Default has occurred and is continuing, a statement as
to the nature thereof.
(d) Management Letters. Promptly after Holdings' or Silgan's
receipt thereof, a copy of any "management letter" received by Holdings
or Silgan from its certified public accountants.
(e) Budgets; Forecasts. Within 60 days (or 120 days in the
case of the fiscal year ended December 31, 1995) after the first day of
each fiscal year of Holdings, (i) a budget in form and scope reasonably
satisfactory to the Administrative Agent and the Co-Arrangers
(including budgeted statements of income and sources and uses of cash
and balance sheets) prepared by Silgan for each of the twelve months
beginning on the first day of such fiscal year accompanied by the
statement of the chief financial officer, treasurer or controller of
Silgan to the effect that, to the best of such officer's knowledge, the
budget is a reasonable estimate for the period covered thereby and (ii)
a forecast of operations and sources and uses of cash for the five-year
period beginning on the first day of such fiscal year, setting forth
the assumptions made in preparing such forecast and accompanied by the
statement of the chief financial officer, treasurer or controller of
Silgan to the effect that, to the best of such officer's knowledge, the
forecast is a reasonable estimate for the period covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01(a), (b) and (c), a
certificate of the chief financial officer, treasurer or controller of
Silgan to the effect that, to the best of such officer's knowledge, no
Default or Event of Default has occurred and is continuing or, if any
Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof, which certificate shall set forth (A)
the calculations required to establish (i) in the case of the
statements delivered pursuant to Sections 7.01(a) and (b), whether the
Borrowers were in compliance with the provisions of Sections 8.03,
8.09, 8.10 and 8.11, at the end of such calendar month or fiscal
quarter, as the case may be, and the amount of the Retained Excess Cash
Flow and Retained Net Equity Proceeds at the end of such calendar month
or fiscal quarter, as the case may be, and (ii) in the case of the
statements delivered pursuant to Section 7.01(c), the amount of the
Excess Cash Flow for the respective fiscal year, the amount of any
mandatory prepayments and/or commitment reductions required pursuant to
Sections 3.03 and/or 4.02 during such fiscal year, whether the
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Borrowers were in compliance with the provisions of Sections 8.03, 8.04
and 8.08 through 8.11, inclusive, at the end of such fiscal year and
the amount of the Retained Excess Cash Flow and Retained Net Equity
Proceeds at the end of such fiscal year and (B) the stated "senior
implied" rating, if any, issued by Standard & Poor's Ratings Group
and/or Moody's Investors Service, Inc. with respect to Silgan's
long-term Indebtedness as at the end of such calendar month, fiscal
quarter or fiscal year, as the case may be.
(g) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after an officer of any Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or an Event of Default, (ii) any litigation
or governmental proceeding pending (x) against any Borrower or any of
its Subsidiaries which could materially and adversely affect the
business, operations, property, assets or condition (financial or
otherwise) of any Borrower or any of its Subsidiaries or (y) with
respect to any Document and (iii) any other event (including any such
event relating to environmental matters) which is likely to materially
and adversely affect the business, operations, property, assets or
condition (financial or otherwise) of any Borrower or any of its
Subsidiaries.
(h) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, (i) which any Borrower shall file with the Securities
and Exchange Commission or any governmental agencies substituted
therefor (the "SEC"), (ii) which shall be filed with the SEC with
respect to the Transaction or (iii) which Silgan shall deliver to the
holders of, or to the trustee with respect to, the Silgan Subordinated
Notes or any Refinancing Indebtedness incurred by Silgan.
(i) Borrowing Base Certificate, etc. On the Initial Borrowing
Date and not later than 10:00 a.m. (New York time) on the twentieth day
of each calendar month thereafter, Silgan shall furnish (x) an
Inventory and Accounts Receivable Report of each of Containers and its
Wholly-Owned Domestic Subsidiaries on a consolidated basis, Plastics
and its Wholly-Owned Domestic Subsidiaries on a consolidated basis and
each other direct Wholly-Owned Domestic Subsidiary of Silgan (on a
consolidated basis) in the form of Exhibit L, setting forth (i) with
respect to the Inventory of each of Containers and its Wholly-Owned
Domestic Subsidiaries on a consolidated basis, Plastics and its
Wholly-Owned Domestic Subsidiaries on a consolidated basis and each
such other direct Wholly-Owned Domestic Subsidiary of Silgan (on a
consolidated basis), the type (i.e., raw materials, work-in-process or
finished product) and value (at the lower of cost or market value
calculated on a first in - first out basis) of such Inventory, along
with a list of each county and state in which any such Inventory is
located and (ii) with respect to such accounts receivable of each of
Containers and its Wholly-Owned Domestic Subsidiaries on
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a consolidated basis, Plastics and its Wholly-Owned Domestic
Subsidiaries on a consolidated basis and each other direct Wholly-Owned
Domestic Subsidiary of Silgan (on a consolidated basis), the aggregate
face amount and aging schedule of such accounts receivable, in each
case as of the last day of the immediately preceding month, (y) a
Borrowing Base Certificate in the form of Exhibit M (each a "Borrowing
Base Certificate") and (z) a report of refunds, returns and allowances
allowed by each of Containers and its Wholly-Owned Domestic
Subsidiaries on a consolidated basis, Plastics and its Wholly-Owned
Domestic Subsidiaries on a consolidated basis and each other direct
Wholly-Owned Domestic Subsidiary of Silgan (on a consolidated basis)
during the immediately preceding calendar month; each of which
documents shall be certified by the chief financial officer, treasurer
or controller of Silgan.
(j) Other Information. From time to time, such other
information or documents (financial or otherwise) as the Administrative
Agent, any Co-Arranger or the Required Banks may reasonably request.
7.02 Books, Records and Inspections. Each of the Borrowers
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries in conformity with generally
accepted accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. Each of
the Borrowers will, and will cause each of its Subsidiaries to, permit officers
and designated representatives of the Administrative Agent, any Co-Arranger or
any Bank to visit and inspect, under guidance of officers of such Borrower or
such Subsidiary, any of the properties of such Borrower or such Subsidiary, and,
under guidance of officers of such Borrower or such Subsidiary, to examine the
books of account of such Borrower or such Subsidiary and discuss the affairs,
finances and accounts of such Borrower or such Subsidiary with, and be advised
as to the same by, its and their officers and independent public accountants (so
long as an officer of such Borrower or Subsidiary is present), all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent, such Co-Arranger or such Bank may request. In connection
with the foregoing, the Administrative Agent, the Co-Arrangers and the Banks
agree to exercise their best efforts to keep any information delivered or made
available by the Borrowers which the Borrowers clearly indicate to be
confidential information confidential from anyone other than Persons employed or
retained by the Administrative Agent, the Co-Arrangers or the Banks who are or
are expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided, that nothing herein shall prevent the
Administrative Agent, the Co-Arrangers or the Banks from disclosing such
information (a) to any actual or potential assignee or participant, provided
that such assignee or participant shall be subject to this sentence, (b) upon
the order of any court or administrative agency, (c) upon the request or demand
of any regulatory agency or authority having jurisdiction over the
Administrative Agent, the Co-Arrangers or the Banks, (d) which has been publicly
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disclosed, (e) in connection with any litigation, (f) to the extent reasonably
required in connection with the exercise of any remedy hereunder and (g) to the
Administrative Agent's, the Co-Arrangers' or the Banks' legal counsel and
independent auditors in connection with the business of the Administrative
Agent, the Co-Arrangers or the Banks.
7.03 Maintenance of Property, Insurance. Schedule IV sets
forth a true and complete listing of all insurance maintained by each of the
Borrowers and its Subsidiaries as of the Effective Date, with the amounts
insured on the Effective Date set forth therein. Each of the Borrowers will, and
will cause each of its Subsidiaries to, (i) keep all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted, (ii) maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and against at
least such risks as is consistent with prudent risk management and industry
practice and (iii) furnish to each Bank, upon written request, full information
as to the insurance carried.
7.04 Corporate Franchises. Each of the Borrowers will, and
will cause each of its Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 7.04 shall prevent the withdrawal by any Borrower or any
of its Subsidiaries of its qualification as a foreign corporation in any
jurisdiction where such withdrawal would not have a material adverse effect on
the business, operations, property, assets or condition (financial or otherwise)
of any Credit Party or of any Credit Party and its Subsidiaries taken as a
whole.
7.05 Compliance with Statutes, etc. Each of the Borrowers
will, and will cause each of its Subsidiaries to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such statutes, regulations, orders and restrictions the
failure to be in compliance with which would not, in the aggregate, have a
material adverse effect on the business, operations, property, assets or
condition (financial or otherwise) of Holdings, Holdings and its Subsidiaries
taken as a whole, any Borrower or any Borrower and its Subsidiaries taken as a
whole.
7.06 ERISA. As soon as possible and in any event within 30
days after any Borrower or any Subsidiary of any Borrower or any ERISA Affiliate
knows or has reason to know that a Reportable Event has occurred with respect to
a Plan, that with respect to a Plan, an accumulated funding deficiency has been
incurred or an application is to be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard (including
any required installment payments) or an extension of any amortization period
under Section 412 of the Code, that a Plan has been or is likely
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to be terminated, reorganized, partitioned or declared insolvent under Title IV
of ERISA, that a Plan other than a Plan which is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) has an Unfunded Current Liability, that
proceedings have been instituted or may reasonably be expected to be instituted
to terminate a Plan, or that any Borrower, any Subsidiary of any Borrower or any
ERISA Affiliate will incur or is likely to incur any liability to or on account
of a Plan which is a single-employer plan (as defined in Section 4001(a)(15) of
ERISA) under Section 4062, 4063 or 4064 of ERISA, or which is a multiemployer
plan (as defined in Section 4001(a)(3) of ERISA) under Section 515, 4201 or 4204
of ERISA, such Borrower will deliver to the Administrative Agent a certificate
of the chief financial officer of such Borrower setting forth details as to such
occurrence and action, if any, which such Borrower or Subsidiary or ERISA
Affiliate is required or proposes to take, together with any notices required to
be given to or filed with or by such Borrower or Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto. Each Borrower will deliver to the Administrative Agent, upon request by
the Administrative Agent, a complete copy of the annual report (Form 5500) of
each Plan that is not (i) a multiemployer plan (as defined in Section 4001(a)(3)
of ERISA) or (ii) a Plan which is no longer maintained or contributed to by any
Borrower, any Subsidiary of any Borrower or an ERISA Affiliate, in each case
which is required to be filed with the Internal Revenue Service. Copies of any
other notices required to be delivered to the Banks hereunder shall be delivered
no later than 30 days after the later of the date such report or notice has been
filed with the Internal Revenue Service or the PBGC, given to Plan participants
or received by any Borrower or any of its Subsidiaries or any ERISA Affiliate.
7.07 End of Fiscal Years; Fiscal Quarters. Each Borrower will
cause (i) each of its, and each of its Subsidiaries', fiscal years to end on
December 31 and (ii) each of its, and each of its Subsidiaries', fiscal quarters
to end on March 31, June 30, September 30 and December 31.
7.08 Taxes. Each of the Borrowers will, and will cause each of
its Subsidiaries to, pay when due all taxes which, if not paid when due, would
materially and adversely affect the business, operations, property, assets or
condition (financial or otherwise) of Holdings, Holdings and its Subsidiaries
taken as a whole, any Borrower or any Borrower and its Subsidiaries taken as a
whole, except as contested in good faith and by appropriate proceedings if
adequate reserves (in the good faith judgment of the management of Silgan) have
been established with respect thereto.
7.09 Subsidiaries. Silgan will (i) at all times own not less
than 90% of the outstanding common stock of Containers and 100% of all other
outstanding capital stock of Containers and (ii) at all times own not less than
90% of the outstanding common stock of Plastics and 100% of all other
outstanding capital stock of Plastics. In addition to the requirements of the
immediately preceding sentence, (x) Silgan will at all times own all of
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the outstanding capital stock of each of Containers and Plastics, except for
shares issued pursuant to the exercise of Employee Stock Options, (y) except as
set forth in clause (x) above or as permitted by Section 8.06(xxiii), each
Borrower will at all times own (directly or indirectly) all of the outstanding
capital stock of its Subsidiaries and (z) at no time shall Containers or
Plastics issue or grant, or suffer to remain outstanding, any options or stock
appreciation rights which, in the aggregate, relate to (i.e., represent the
right to purchase the shares, in the case of options, or the right to receive
payments as a result of the appreciation attributable to the shares, in the case
of stock appreciation rights) that percentage of the outstanding shares of
common stock of Containers or Plastics, as the case may be, on a fully diluted
basis, which equals the remainder of (x) 10% less (y) the percentage of the then
outstanding common stock of Containers or Plastics, as the case may be, not
owned by Silgan.
7.10 Additional Security; Further Assurances; etc. (a) (i)
Each of the Borrowers will, and will cause each of its Wholly-Owned Domestic
Subsidiaries to, grant to the Collateral Agent, for the benefit of the Banks and
the other Secured Creditors described in the Security Documents, security
interests and mortgages in such assets and properties of such Borrower or such
Wholly-Owned Domestic Subsidiary as are not covered by the original Security
Documents or as may be requested from time to time by the Required Banks (the
"Additional Security Documents"). Such security interests and mortgages shall be
granted pursuant to documentation satisfactory in form and substance to the
Required Banks and shall (except as otherwise consented to by the Required
Banks) constitute valid and enforceable perfected security interests superior to
and prior to the rights of all third Persons and subject to no other Liens,
except such Liens as are permitted by Section 8.01. The Additional Security
Documents or other instruments related thereto shall have been duly recorded or
filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens, in favor of the Collateral Agent for
the benefit of the respective Banks and the other respective Secured Creditors,
required to be granted pursuant to the Additional Security Documents and all
taxes, fees and other charges payable in connection therewith shall have been
paid in full. Notwithstanding the foregoing, this Section 7.10(a) shall not
apply to any operating lease permitted under Section 8.04 which by its terms
prevents the respective Borrower or Wholly-Owned Domestic Subsidiary from
granting a security interest therein, provided that such Borrower or
Wholly-Owned Domestic Subsidiary shall use reasonable good faith efforts (x) at
the time it enters into any such lease, to have any such restrictive terms
eliminated and (y) if it is unsuccessful, upon any subsequent request of the
Required Banks to negotiate the removal or waiver of any such provision.
(b) Each of the Borrowers will, and will cause each of its
Subsidiaries to, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney,
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certificates, real property surveys, reports and other assurances or instruments
and take such further steps relating to the collateral covered by any of the
Security Documents or Additional Security Documents as the Collateral Agent may
reasonably require. Furthermore, the Borrowers shall cause to be delivered to
the Collateral Agent such opinions of counsel, title insurance and other related
documents as may be requested by the Required Banks to assure themselves that
this Section 7.10 has been complied with.
(c) Each of the Borrowers agrees that each action required by
this Section 7.10 shall be completed as soon as possible, but in no event later
than 60 days after such action is requested to be taken by the Required Banks.
7.11 Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code and at the request of the Administrative
Agent, any Co-Arranger or the Required Banks, counsel for Silgan acceptable to
the Administrative Agent and the Co-Arrangers does not within 30 days after such
request deliver a written opinion, in form and substance satisfactory to the
Administrative Agent and the Co-Arrangers, with respect to any Foreign
Subsidiary whose capital stock is owned by a Credit Party, to the effect that a
pledge (x) of 66-2/3% or more of the total combined voting power of all classes
of capital stock of such Foreign Subsidiary entitled to vote and (y) of any
promissory notes issued by such Foreign Subsidiary to Silgan or any other Credit
Party to a Pledge Agreement, in either case would cause the earnings of such
Foreign Subsidiary to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent, then in the case of a failure to deliver the
opinion described above, that portion of such Foreign Subsidiary's outstanding
capital stock or any promissory notes so issued by such Foreign Subsidiary, in
each case not theretofore pledged pursuant to a Pledge Agreement, shall be
pledged to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the applicable Pledge Agreement.
7.12 Existing Senior Secured Notes Redemption. On the Existing
Senior Secured Notes Redemption Date, Silgan will take all such action to redeem
or otherwise repay in full on such date all then outstanding Existing Senior
Secured Notes, together with all accrued and unpaid interest thereon through
such date and all other amounts owing pursuant to the Existing Senior Secured
Note Agreement.
7.13 Real Estate Appraisals. In the event that the
Administrative Agent, any Co-Arranger or the Required Banks at any time after
the Effective Date determine in its or their good faith discretion (as a result
of events or circumstances affecting the Collateral Agent or the Required Banks
after the Effective Date) that real estate appraisals satisfying the
requirements set forth in 12 C.F.R., Part 34-Subpart C, or any successor or
similar statute, rule, regulation, guideline or order (any such appraisal a
"Required Appraisal") are or were required to be obtained, or should be
obtained, in connection with any Mortgaged Property or Mortgaged Properties,
then, within 120 days after receiving written notice thereof from the
Administrative Agent, such Co-Arranger or the Required
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Banks, as the case may be, such Required Appraisal shall be delivered, at the
expense of Silgan, to the Administrative Agent, which Required Appraisal, and
the respective appraiser, shall be satisfactory to the Co-Arrangers.
Section 8. Negative Covenants. Each of the Borrowers jointly
and severally covenants and agrees (provided that each of Containers and
Plastics covenants and agrees only as to itself and its Subsidiaries) that on
and after the Effective Date and until the Total Commitment and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder and thereunder, are
paid in full:
8.01 Liens. None of the Borrowers will, nor will it permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of such Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to any Borrower
or any of its Subsidiaries), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
of this Section 8.01 shall not prevent the creation, incurrence, assumption or
existence of:
(i) inchoate Liens for taxes not yet due and payable, or Liens
for taxes being contested in good faith and by appropriate proceedings
for which adequate reserves (in the good faith judgment of the
management of Silgan) have been established;
(ii) Liens in respect of property or assets of any Borrower or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business, such as carriers', warehousemen's and
mechanics' liens and other similar Liens arising in the ordinary course
of business, and (x) which do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of such Borrower or any of its
Subsidiaries or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
such Lien;
(iii) Liens in existence on the Effective Date which are
listed, and the property subject thereto described, in Schedule V
(Liens described in this clause (iii) are herein referred to as
"Permitted Liens");
(iv) Liens created pursuant to the Security Documents;
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(v) pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation;
(vi) deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) to
secure the performance of tenders, bids, leases, contracts (other than
for the repayment of Indebtedness), statutory obligations and other
similar obligations, provided that the aggregate amount of cash and
value of non-cash collateral so deposited shall at no time exceed
$2,000,000;
(vii) Permitted Encumbrances on the Mortgaged Properties, and
easements, rights-of-way, zoning restrictions and other similar
restrictions, charges or encumbrances which do not materially interfere
with the ordinary conduct of the business of any Borrower or its
Subsidiaries and which do not materially detract from the value of the
property to which they attach or impair the use thereof to any Borrower
or its Subsidiaries;
(viii) Liens created by virtue of capitalized lease
obligations permitted pursuant to Section 8.05(ix), provided that such
Liens are only in respect of the property or assets subject to, and
secure only, the respective capitalized lease;
(ix) Liens existing on any asset prior to the acquisition
thereof pursuant to a Permitted Acquisition so long as any such Liens
were not created in contemplation of such acquisition and do not extend
to any other assets of Silgan or any of its Subsidiaries; and
(x) Liens not otherwise permitted by the provisions of this
Section 8.01 to the extent securing liabilities not in excess of
$5,000,000; provided, however, that if such Liens are consensual Liens,
those Liens shall not encumber properties or assets with an aggregate
fair value in excess of $6,000,000.
8.02 Consolidation, Merger, Sale of Assets, etc. None of the
Borrowers will, nor will it permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person, or permit any of its Subsidiaries so to do any of the
foregoing, except that:
(i) such Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business and sales of other assets
(other than assets constituting
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Real Property) in the ordinary course of business not in excess of
$500,000 per sale;
(ii) such Borrower and its Subsidiaries may, in the ordinary
course of business, sell equipment which is uneconomic or obsolete;
(iii) capital expenditures shall be permitted to the extent
not in violation of Section 8.08;
(iv) the Acquisition shall be permitted;
(v) the St. Louis Facility Acquisition shall be permitted;
(vi) DM Can and/or AN Can may merge with and into Containers
so long as (x) Containers is the surviving corporation of each such
merger and (y) all steps are taken as may be necessary, or in the
opinion of the Collateral Agent desirable, to maintain the perfection
and priority of the security interest granted by DM Can and/or AN Can,
as the case may be, pursuant to the respective Security Documents to
which it is a party;
(vii) the Real Estate Sales shall be permitted so long as (x)
each such sale is for fair market value (as determined in good faith by
the Board of Directors of Silgan) and (y) the Net Sale Proceeds
therefrom are applied in accordance with Section 4.02(f);
(viii) investments may be made to the extent permitted by
Section 8.06;
(ix) Silgan and its Wholly-Owned Domestic Subsidiaries may
acquire the capital stock of, and Containers, Plastics and their
respective Wholly-Owned Domestic Subsidiaries may acquire all or
substantially all of the assets of, any Person (or any product line or
division of such Person) so long as (i) no Default or Event of Default
then exists or would result therefrom, (ii) to the extent such
acquisition is of the capital stock of another Person, such acquisition
must be of 100% of such capital stock, (iii) to the extent applicable,
all of the provisions of Section 8.13 shall have been complied with in
respect of such acquisition, (iv) the Person or assets so acquired was
engaged or were used, as the case may be, primarily in the packaging
business, (v) the aggregate amount expended in respect of all such
acquisitions, together with the aggregate amount of Indebtedness
assumed in connection therewith, does not exceed the sum of (I)
$60,000,000 and (II) the amount of the Retained Net Equity Proceeds at
such time, it being understood that for purposes of determining
compliance with this sub-clause (v) in connection with any such
acquisition which includes the purchase of working
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capital, the amount expended to purchase such working capital shall be
based on the average working capital of the Person or assets so
acquired for the 12 month period immediately preceding the date of such
acquisition, (vi) the aggregate amount expended in respect of all such
acquisitions, together with the aggregate amount of Indebtedness
assumed in connection therewith, does not exceed $30,000,000 in any one
fiscal year of Silgan, (vii) no material contingent liabilities are
assumed in connection with any such acquisition and (viii) at least 15
Business Days prior to the consummation of any such acquisition in
which the aggregate purchase price, together with the aggregate amount
of Indebtedness assumed in connection therewith, exceeds $5,000,000,
Silgan shall have delivered to the Banks (x) a certificate of its chief
financial officer certifying that Silgan and it Subsidiaries shall have
sufficient availability (which, in any event, shall be at least
$20,000,000) under the Total Revolving Loan Commitment to meet their
ongoing working capital requirements after giving effect to such
acquisition and the financing thereof and (y) detailed projections
which reflect the forecasted financial condition and results of
operations and projected working capital requirements of Silgan and its
Subsidiaries after giving effect to such acquisition and the related
financing thereof, which projections shall be done on a monthly basis
for the 12 month period following the consummation of such acquisition
and on an annualized basis for the remainder of the term of this
Agreement (any acquisition pursuant to this Section 8.02(ix), a
"Permitted Acquisition"); and
(x) Holdings may merge with and into Silgan or Silgan may
merge with and into Holdings so long as (i) in the case of any merger
in which Holdings is the surviving corporation, Holdings shall have
assumed all of Silgan's obligations under the Credit Documents to which
Silgan is a party pursuant to documentation in form and substance
satisfactory to the Administrative Agent, (ii) no consideration is paid
in connection with any such merger, (iii) the Holdings Debentures have
been Refinanced in full (other than by way of defeasance until such
defeasance is effective in accordance with the terms of the Holdings
Debenture Documents), (iv) Holdings shall not have outstanding any
Refinancing Indebtedness and shall have no other material liabilities
(contingent or otherwise), (v) no Default or Event of Default then
exists or would result therefrom, (vi) Silgan shall have given the
Administrative Agent at least 15 Business Days prior written notice
thereof and (vii) at the time of any such merger, the Borrowers and the
Required Banks shall have entered into certain technical amendments and
modifications to this Agreement and the other Credit Documents
(including, in any event, Sections 8.03, 8.05, 8.06 and 8.07 and the
definition of Change of Control) which have been agreed to, or are
required, by the Co-Arrangers to preserve the intent of the parties
with respect to the covenants and defaults contained in this Agreement
and the other Credit Documents (including the Holdings Guaranty) so
that such covenants and defaults will apply to the merged entity on
substantially the same basis as they applied to
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Holdings and/or Silgan prior to any such merger, and the Required Banks
agree that they will not unreasonably withhold their consent to any
such proposed amendments and modifications (any such merger, a
"Holdings Merger").
To the extent any Collateral is sold as permitted by this Section 8.02 or the
Required Banks waive the provisions of this Section 8.02 with respect to the
sale of any Collateral as provided in Section 12.12 such Collateral in each such
case shall be sold free and clear of the Liens created by the Security Documents
and the Administrative Agent and Collateral Agent shall be authorized to take
any action deemed appropriate to effect the foregoing.
8.03 Dividends. None of the Borrowers will, nor will it permit
any of its Subsidiaries to, declare or pay any dividends to, or return any
capital to, its stockholders or authorize or make any other distribution,
payment or delivery of property or cash to its stockholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for a
consideration, any shares of any class of its capital stock now or hereafter
outstanding (or any options or warrants or stock appreciation rights issued by
such Borrower with respect to its capital stock), or set aside any funds for any
of the foregoing purposes, or permit any of the Borrowers (other than Silgan) to
purchase or otherwise acquire for a consideration any shares of any class of the
capital stock of any other Borrower now or hereafter outstanding (or any options
or warrants or stock appreciation rights issued by any other Borrower with
respect to its capital stock), or make any payments to Holdings in respect of
any Indebtedness (including without limitation indebtedness evidenced by the
Holdings Intercompany Note) owing to Holdings by any Borrower or its
Subsidiaries (all the foregoing, "Dividends"), except that:
(i) so long as no Default or Event of Default then exists or
would result therefrom, Containers or Plastics, as the case may be, may
(x) repurchase or redeem Containers Employee Stock Options or Plastics
Employee Stock Options and (to the extent such Employee Stock Options
have been validly exercised) the common stock of Containers or Plastics
issued upon exercise thereof, all as set forth in the respective Stock
Option Agreement and (y) make required payments with respect to stock
appreciation rights granted in connection with such Employee Stock
Options, provided that no payment of the types described in this clause
(i) may be made if the amount of such payment together with all amounts
paid by Silgan to Holdings pursuant to clause (vii) below, when
aggregated with the amount of all other such payments made after the
Effective Date and to and including such date by Silgan, Containers and
Plastics on an aggregate basis, would exceed an amount equal to 5% of
Consolidated Net Worth at the end of the last fiscal quarter for which
financial statements are required to have been delivered pursuant to
Section 7.01(b);
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(ii) each of Containers, Plastics and any other direct
Wholly-Owned Subsidiary of Silgan may declare and pay cash Dividends to
Silgan so as long as Containers, Plastics or such other Subsidiary, as
the case may be, is a WhollyOwned Subsidiary of Silgan at the time of
such declaration and payment of such cash Dividends;
(iii) each Subsidiary created pursuant to Section 8.13, as
well as each Subsidiary of Containers and Plastics existing on the
Initial Borrowing Date, may pay cash Dividends to the holder or holders
of its capital stock;
(iv) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may pay cash Dividends to Holdings in an
amount which shall at no time exceed, when added to all amounts
advanced to Holdings by Silgan under Section 8.06(xvi), the amount
required, and immediately thereafter used by Holdings, to pay interest
on the promissory notes permitted to be issued by Holdings pursuant to
Section 8(b)(i) and (ii) of the Holdings Guaranty;
(v) Silgan may make payments to Holdings in accordance with
Section 8.07(ii) to be immediately used by, and to the extent permitted
to be made at such time by, Holdings under the Management Services
Agreement of Holdings;
(vi) Silgan and its Subsidiaries may make payments required
(or permitted) to be made by such Person under the Tax Sharing
Agreement so long as any such payments which are made to Holdings are
immediately used by Holdings to make tax payments as required
thereunder;
(vii) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may pay, subject to the 5% of
Consolidated Net Worth limitation set forth in clause (i) above for all
payments made pursuant to said clause (i) and this clause (vii), cash
Dividends or other cash distributions to Holdings to the extent
immediately used by Holdings to make payments in respect of stock
options to the extent permitted by Section 8(b)(iii) of the Holdings
Guaranty;
(viii) so long as no Default or Event of Default then exists
or would result therefrom, Silgan may pay cash Dividends to Holdings in
any fiscal year of Silgan in an amount which at no time shall exceed,
when added to all advances and payments made to Holdings for such
fiscal year pursuant to Sections 8.06(xviii) and 8.07(iv)(a),
respectively, $4,000,000 so long as Holdings immediately thereafter
uses such cash Dividends to pay administrative expenses;
(ix) so long as the Loans have not been accelerated pursuant
to Section 9, no Default under Section 9.01 or 9.05 then exists or no
Event of Default then exists
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or would result therefrom, commencing on December 15, 1996, Silgan may
pay cash Dividends to Holdings at the times and in the amounts
necessary to enable Holdings to make the cash interest payments due on
the Holdings Debentures or any Refinancing Indebtedness issued by
Holdings so long as Holdings immediately thereafter uses such cash
Dividends to make such cash interest payments, it being understood that
to the extent Silgan is prohibited from paying Dividends pursuant to
this Section 8.03(ix) at the time any such cash interest payment
becomes due and payable because of an Event of Default (other than an
Event of Default pursuant to Section 9.01 or 9.05) Silgan may pay the
cash Dividend pursuant to this Section 8.03(ix) needed to make the
respective cash interest payment (and only such cash interest payment)
on the earlier of (A) the date on which all such Events of Default have
been cured or waived and (B) the first date upon which 161 days have
elapsed from the respective interest payment date unless the Loans have
theretofore been accelerated, whether as a result of such Event of
Default or otherwise, or unless a Default or Event of Default under
Section 9.01 or 9.05 then exists (it being understood that the
occurrence of new Events of Default (or the continuance of existing
Events of Default) after such 161st day shall be the basis for
additional Dividend blockages pursuant to, and in accordance with the
terms of, this clause (ix));
(x) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may pay cash Dividends to Holdings with
the proceeds of any Retained Excess Cash Flow, any Refinancing
Indebtedness issued by Silgan or Holdings (to the extent that Holdings
has contributed such proceeds to Silgan as provided in the Holdings
Guaranty) and/or any registered public equity offering by Silgan or
Holdings (to the extent that Holdings has contributed such proceeds to
Silgan as provided in the Holdings Guaranty) of its common stock, in
each case so long as such cash Dividends are immediately used by
Holdings to Refinance outstanding Holdings Debentures and/or any
Refinancing Indebtedness issued by Holdings pursuant to, and in
accordance with the terms of, the Holdings Guaranty;
(xi) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may pay cash Dividends to Holdings to
enable Holdings to repurchase shares of its Class B Common Stock held
by First Plaza Group Trust pursuant to, and in accordance with the
terms of, the Holdings Shareholders Agreement so long as (i) the
sources of funds used by Silgan to pay such Dividends come from one or
more common equity offerings by Silgan or Holdings (to the extent that
Holdings has contributed such proceeds to Silgan as provided in the
Holdings Guaranty), provided, however, to the extent that Silgan or
Holdings, as the case may be, has not consummated any such common
equity offering, Silgan may use Retained Excess Cash Flow to pay such
cash Dividends and (ii) Holdings
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immediately thereafter uses such cash Dividends to repurchase such
shares of Class B Common Stock;
(xii) prior to the time at which clause (xiii) of this Section
8.03 is applicable and so long as no Default or Event of Default then
exists or would result therefrom, Silgan may pay cash Dividends to the
holders of its common stock so long as (i) Silgan or Holdings has
consummated one or more registered public equity offerings of its
common stock which have resulted in Net Equity Proceeds of less than
$75,000,000 (net of any amounts used or to be used to repurchase shares
of Holdings Class B Common Stock held by First Plaza Group Trust), (ii)
no cash Dividends are paid pursuant to this clause (xii) prior to the
third anniversary of any such registered public equity offering, (iii)
the aggregate amount of cash Dividends paid in any fiscal year of
Silgan does not exceed 6% of the Net Equity Proceeds of all such
registered public equity offerings (net of any amounts used from such
Net Equity Proceeds to repurchase shares of Holdings Class B Common
Stock held by First Plaza Group Trust) and (iv) to the extent that such
cash Dividends are to be used by Holdings to pay cash Dividends
pursuant to Section 8(b)(v) of the Holdings Guaranty, Holdings
immediately thereafter uses such Dividends for such purpose;
(xiii) so long as no Default or Event of Default then exists
or would result therefrom, Silgan may pay cash Dividends to the holders
of its common stock so long as (i) Silgan or Holdings has consummated
one or more registered public equity offerings of its common stock
which have resulted in Net Equity Proceeds of at least $75,000,000 (net
of any amounts used or to be used to repurchase shares of Holdings
Class B Common Stock held by First Plaza Group Trust), (ii) the
aggregate amount of cash Dividends paid in each of the first two years
immediately following such registered public equity offering does not
exceed the lesser of (x) $3,000,000 and (y) the remainder of (A) the
sum of (I) $1,000,000 plus (II) the Retained Excess Cash Flow at such
time minus (B) the amount of any cash Dividends paid pursuant to clause
(xii) of this Section 8.03 in such year, (iii) the aggregate amount of
cash Dividends paid in each year thereafter does not exceed the
remainder of (A) 6% of the Net Equity Proceeds of all registered public
equity offerings (net of any amounts used from such Net Equity Proceeds
to repurchase shares of Holdings Class B Common Stock held by First
Plaza Group Trust) minus (B) the amount of any cash Dividends paid
pursuant to clause (xii) of this Section 8.03 in such year and (iv) to
the extent that such cash Dividends are to be used by Holdings to pay
cash Dividends pursuant to Section 8(b)(v) of the Holdings Guaranty,
Holdings immediately thereafter uses such cash Dividends for such
purpose;
(xiv) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may pay cash Dividends to Holdings so
long as (i) Holdings
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immediately thereafter uses such cash Dividends to make payments to
third parties which are not affiliates of Holdings or Silgan in respect
of the Reorganization and (ii) the aggregate amount of all cash
Dividends paid pursuant to this clause (xiv) does not exceed
$7,500,000;
(xvi) so long as no Default or Event of Default would occur as
a result thereof, Silgan and its Subsidiaries may pay Dividends in
respect of their common stock in additional shares of common stock;
(xvii) so long as no Default or Event of Default then exists
or would result therefrom, on or prior to June 30, 1996, Silgan may pay
additional cash Dividends to Holdings in an aggregate amount not to
exceed, when added to the amount of advances paid to Holdings pursuant
to Section 8.06(xxiv), the Blocked Commitment at such time (before
giving effect to any reduction thereto on such date) so long as
Holdings immediately thereafter uses such cash Dividends to Refinance
outstanding Holdings Debentures through Permitted Holdings Debt
Repurchases; and
(xviii) so long as no Default or Event of Default then exists
or would result therefrom, Silgan may pay additional cash Dividends to
Holdings with the prior written consent of the Required Banks.
Notwithstanding anything to the contrary contained above or elsewhere in this
Agreement, to the extent any investment is expressly permitted by Section 8.06,
such investment shall not violate the provisions of this Section 8.03.
8.04 Leases. The Borrowers will not permit the aggregate
payments (including, without limitation, any property taxes paid as additional
rent or lease payments) under agreements to rent or lease any real or personal
property (excluding capitalized lease obligations) by Silgan and its
Subsidiaries on a consolidated basis, to exceed $20,000,000 in the calendar year
ended December 31, 1995 and increasing by $1,500,000 in each calendar year
thereafter.
8.05 Indebtedness. None of the Borrowers will, nor will it
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred under the Credit Documents;
(ii) Indebtedness listed on Schedule VI ("Existing
Indebtedness");
(iii) accrued expenses and current trade accounts payable
incurred in the ordinary course of business and unsecured guarantees of
Silgan of such trade
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accounts payable, and obligations under trade letters of credit
incurred by such Borrower or any of its Subsidiaries in the ordinary
course of business, which, in each case, are to be repaid in full not
more than one year after the date on which such Indebtedness is
originally incurred to finance the purchase of goods by such Borrower
or such Subsidiary;
(iv) obligations under letters of credit incurred by such
Borrower or any of its Subsidiaries in the ordinary course of business
in support of obligations incurred in connection with worker's
compensation, unemployment insurance and other social security
legislation in an aggregate amount not to exceed $15,000,000 at any
time outstanding;
(v) Indebtedness of Silgan and the other Guarantors (other
than Holdings) not to exceed $50,000,000 (as reduced by any repayments
of principal thereof) in aggregate principal amount evidenced by the
Existing Senior Secured Notes, provided that such Indebtedness shall
only be permitted to remain outstanding through the Existing Senior
Secured Notes Redemption Date;
(vi) Indebtedness of Silgan not to exceed $135,000,000 (as
reduced by any repayments of principal thereof) in aggregate principal
amount evidenced by the Silgan Subordinated Notes;
(vii) Indebtedness of any Subsidiary of Silgan evidenced by a
Mirror Intercompany Note to the extent such Mirror Intercompany Note is
listed on Schedule VII and in the aggregate principal amount for such
Mirror Intercompany Note as is listed for such Subsidiary on Schedule
VII, in each case so long as all such Mirror Intercompany Notes are
pledged and delivered to the Collateral Agent pursuant to the
respective Pledge Agreement;
(viii) Indebtedness of Containers to Plastics, and
Indebtedness of Plastics to Containers, in each case to the extent
permitted by Section 8.06(v);
(ix) Indebtedness consisting of capitalized lease obligations
(a) set forth on Schedule VIII or (b) incurred as otherwise permitted
pursuant to the chart contained in Section 8.08(a), provided that in
any fiscal year no more than 50% of the applicable amount allowed
pursuant to such chart shall consist of capitalized lease obligations;
(x) Indebtedness of Silgan to Containers and/or Plastics to
the extent permitted pursuant to Section 8.06(ix) or (xii);
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(xi) Indebtedness of Plastics to Express to the extent
permitted pursuant to Section 8.06(x);
(xii) Indebtedness of Express to Plastics to the extent
permitted pursuant to Section 8.06(x);
(xiii) Indebtedness of Containers and its Wholly-Owned
Domestic Subsidiaries to one another to the extent permitted by Section
8.06(xix);
(xiv) Indebtedness of Plastics and its Wholly-Owned Domestic
Subsidiaries to one another to the extent permitted by Section
8.06(xx);
(xv) unsecured guarantees by (x) Silgan of its Wholly-Owned
Domestic Subsidiaries' respective lease obligations under leases
entered into in compliance with Section 8.04 and (y) Containers of DM
Can's or AN Can's lease obligations to Del Monte or American National
Can Company, as the case may be, under leases entered into in
compliance with Section 8.04;
(xvi) unsecured subordinated Indebtedness of Silgan the
proceeds of which are used within 60 days after the incurrence thereof
to Refinance outstanding Silgan Subordinated Notes so long as (i) no
Default or Event of Default then exists or would result therefrom, (ii)
all of the terms and conditions of such Indebtedness (including,
without limitation, subordination provisions, covenants, events of
default, interest rates, remedies, amortizations and maturities) are
reasonably acceptable to the Co-Arrangers and the Required Banks, it
being understood that in any event such Indebtedness shall not have any
scheduled maturity, amortization or sinking fund payment earlier than
the final maturity of the Silgan Subordinated Notes, (iii) the
aggregate principal amount of such Indebtedness does not exceed the
aggregate principal amount of the Silgan Subordinated Notes to be
Refinanced with such Indebtedness, together with all accrued interest
thereon, any prepayment premium associated therewith and all costs and
expenses incurred in connection therewith and (iv) until such proceeds
are used to Refinance outstanding Silgan Subordinated Notes, such
proceeds are (x) applied to repay outstanding Revolving Loans and/or
Swingline Loans and/or (y) placed in a cash collateral account
established and maintained by, and pursuant to arrangements
satisfactory to, the Administrative Agent;
(xvii) unsecured subordinated Indebtedness of Silgan the
proceeds of which are used within 60 days after the incurrence thereof
to pay a cash Dividend to Holdings pursuant to Section 8.03(x) and
immediately thereafter used by Holdings to Refinance outstanding
Holdings Debentures and/or any Refinancing Indebtedness theretofore
issued by Holdings so long as (i) no Default or Event of Default then
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exists or would result therefrom, (ii) all of the terms and conditions
of such Indebtedness (including, without limitation, subordination
provisions, covenants, events of default, interest rates, remedies,
amortizations and maturities) are reasonably acceptable to the
Co-Arrangers and the Required Banks, it being understood that in any
event such Indebtedness shall not have any scheduled maturity,
amortization or sinking fund payment earlier than the final scheduled
maturity of the Holdings Debentures and/or any Refinancing Indebtedness
issued by Holdings, (iii) the aggregate principal amount of such
Indebtedness does not exceed the aggregate principal amount of the
Holdings Debentures and/or any Refinancing Indebtedness issued by
Holdings to be Refinanced with such Indebtedness, together with all
accrued interest thereon, any prepayment premium associated therewith
and all costs and expenses incurred in connection therewith, (iv) prior
to the receipt by Holdings or Silgan, as the case may be, of at least
$75,000,000 of Net Equity Proceeds from one or more registered public
equity offerings of its common stock (net of any amounts used or to be
used to repurchase shares of Holdings Class B Common Stock held by
First Plaza Group Trust), the Interest Coverage Ratio for the Test
Period then most recently ended shall be greater than 2.50:1.00, with
such Interest Coverage Ratio to be calculated on a pro forma basis as
if such Indebtedness (and the application of the proceeds thereof and
giving effect during the respective Test Period to any issuance of
equity and the application of the proceeds thereof and any acquisitions
of assets or capital stock and dispositions of assets or capital stock
occurring on or prior to the date of the incurrence of such
Indebtedness) had been incurred on the first day of, and had remained
outstanding throughout, such Test Period, (v) at least 10 Business Days
prior to the incurrence of such Indebtedness, Silgan shall have
delivered to the Banks a certificate of its chief financial officer
setting forth in reasonable detail the pro forma calculations required
to establish such compliance and (vi) until such proceeds are used to
pay a cash Dividend to Holdings to Refinance outstanding Holdings
Debentures and/or such Refinancing Indebtedness, such proceeds are (x)
applied to repay outstanding Revolving Loans and/or Swingline Loans
and/or (y) placed in a cash collateral account established and
maintained by, and pursuant to arrangements satisfactory to, the
Administrative Agent;
(xviii) Indebtedness of any Wholly-Owned Subsidiary of Silgan
assumed in connection with a Permitted Acquisition so long as such
Indebtedness was not issued or created in contemplation of such
acquisition and such Indebtedness was permitted to be assumed in
accordance with the terms of Section 8.02(ix);
(xix) subordinated Indebtedness of Silgan to Holdings so long
as (i) such Indebtedness only represents advances made by Holdings to
Silgan with the proceeds of one or more equity offerings by Holdings or
any Refinancing Indebtedness issued by Holdings, (ii) prior to the
repayment in full of all
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outstanding Loans and other Obligations and the termination of all
Letters of Credit and the Total Commitment, such Indebtedness may only
be repaid if no Default or Event of Default then exists or would result
therefrom and the proceeds therefrom are to be immediately used by
Holdings to Refinance outstanding Holdings Debentures and/or any
Refinancing Indebtedness issued by Holdings and/or, to the extent such
proceeds were initially received by Holdings from a common equity
offering, to repurchase shares of Holdings Class B Common Stock held by
First Plaza Group Trust and (iii) all of the other terms and conditions
of such Indebtedness, including the subordination provisions thereof,
are satisfactory to the Co-Arrangers; and
(xx) additional intercompany Indebtedness by and among Silgan
and its Subsidiaries to the extent permitted by Sections 8.06(xxiv) and
(xxv).
8.06 Advances, Investments and Loans. None of the Borrowers
will, nor will it permit any of its Subsidiaries to, lend money or credit or
make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or permit any of its Subsidiaries so to do, except that the
following shall be permitted:
(i) such Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms;
(ii) such Borrower and its Subsidiaries may acquire and hold
Cash Equivalents;
(iii) such Borrower and its Subsidiaries may make loans and
advances to their respective officers, employees and agents in the
ordinary course of business equal in the aggregate for Silgan and its
Subsidiaries to no more than $2,000,000 at any one time outstanding;
(iv) Silgan and its Subsidiaries may make, or permit to remain
outstanding, intercompany loans to one another which are evidenced by
the Mirror Intercompany Notes to the extent permitted by Section
8.05(vii);
(v) Containers may make intercompany loans to Plastics, and
Plastics may make intercompany loans to Containers, provided that in
each case all such intercompany loans are evidenced by Working Capital
Intercompany Notes which are pledged and delivered to the Collateral
Agent pursuant to the Subsidiaries Pledge Agreement;
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(vi) each Borrower may acquire or establish Subsidiaries to
the extent permitted pursuant to Section 8.13;
(vii) Silgan and its Subsidiaries may own the capital stock of
their respective Subsidiaries;
(viii) the Borrowers may continue to hold any investment they
held as of the Effective Date as set forth on Schedule IX;
(ix) Containers and/or Plastics may make intercompany loans to
Silgan not to exceed $25,000,000 in aggregate principal amount
outstanding at any time, provided that all such loans are evidenced by
Working Capital Intercompany Notes which are pledged and delivered to
the Collateral Agent pursuant to the Subsidiaries Pledge Agreement;
(x) Express may make intercompany loans to Plastics not to
exceed $3,000,000 in aggregate principal amount outstanding at any
time, and Plastics may make intercompany loans to Express not to exceed
$5,000,000 in aggregate principal amount outstanding at any time,
provided that all such intercompany loans owing to Plastics are
evidenced by Working Capital Intercompany Notes which are pledged
pursuant to the Subsidiaries Pledge Agreement;
(xi) Containers may contribute up to $6,000,000 in aggregate
amount to Iowa City JV, including such contributions made by Containers
on or prior to the Effective Date;
(xii) Containers and/or Plastics may make intercompany loans
to Silgan, in each case evidenced by a Working Capital Intercompany
Note pledged pursuant to the Subsidiaries Pledge Agreement, in addition
to those referred to in clause (ix) above, (i) to enable Silgan to (x)
pay interest which is then due and payable on the Silgan Subordinated
Notes or any Refinancing Indebtedness issued by Silgan and (y) dividend
cash to Holdings (to the extent permitted by Section 8.03(ix)) to
enable Holdings to pay interest on the Holdings Debentures or any
Refinancing Indebtedness issued by Holdings, provided that, in each
case no intercompany loans may be made pursuant to this clause (xii)
until Containers and/or Plastics shall have made the maximum payments
permitted to be made by such Persons pursuant to the respective Mirror
Intercompany Notes for such purpose and (ii) at any time that the
lender of such intercompany loans is prohibited from paying dividends
to Silgan by Section 8.03(ii), on such terms and conditions (which may
include, without limitations, the terms and conditions required by
clause (ix) above) as are satisfactory to the Administrative Agent and
the Co-Arrangers in their sole discretion;
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(xiii) Plastics may make capital contributions to Canadian
Holdco from time to time to the extent and only in the amounts
necessary for Canadian Holdco to comply with certain Canadian laws and
regulations relating to minimum equity capitalization;
(xiv) Canadian Holdco may make capital contributions to
Express from time to time to the extent and only in the amounts
necessary for Express to comply with certain Canadian laws and
regulations relating to minimum equity capitalization;
(xv) Containers and Plastics may make advances to Silgan in
the amounts and at the times that Silgan pays Dividends to Holdings
pursuant to Section 8.03(iv);
(xvi) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may make advances to Holdings in an
amount which shall at no time exceed, when added to all amounts
permitted to be dividended to Holdings pursuant to Section 8.03(iv),
the amount required, and immediately thereafter used by Holdings, to
pay interest on the promissory notes permitted to be issued by Holdings
pursuant to Section 8(b)(i) and (ii) of the Holdings Guaranty;
(xvii) Silgan may from time to time make capital contributions
to, or purchase additional common stock of, either of Containers or
Plastics;
(xviii) so long as no Default or Event of Default then exists
or would result therefrom, Silgan may make advances to Holdings in any
fiscal year of Silgan in an amount which at no time shall exceed, when
added to all Dividends and payments made to Holdings in such fiscal
year pursuant to Sections 8.03(viii) and 8.07(iv)(a), respectively,
$4,000,000 so long as Holdings immediately thereafter uses such
advances to pay administrative expenses;
(xix) Containers and its Wholly-Owned Domestic Subsidiaries
may make intercompany loans to one another, provided that in each case
all such intercompany loans are evidenced by Working Capital
Intercompany Notes which are pledged pursuant to the Subsidiaries
Pledge Agreement;
(xx) Plastics and its Wholly-Owned Domestic Subsidiaries may
make intercompany loans to one another, provided that in each case all
such intercompany loans are evidenced by Working Capital Intercompany
Notes which are Pledged Pursuant to the Subsidiaries Pledge Agreement;
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(xxi) Containers may from time to time make capital
contributions to, or purchase additional capital stock of, its then
existing Wholly-Owned Domestic Subsidiaries so long as the aggregate
amount of all such contributions and purchases does not exceed
$30,000,000;
(xxii) Permitted Acquisitions consisting in whole or in part
of stock acquisitions shall be permitted;
(xxiii) Containers, Plastics and their respective Wholly-Owned
Domestic Subsidiaries may make equity investments in third Persons
which are not Affiliates of Silgan or any of its Subsidiaries so long
as (i) no Default or Event of Default then exists or would result
therefrom, (ii) such third Persons are engaged in the packaging
business, (iii) the aggregate amount of all such investments does not
exceed the sum of (I) $20,000,000 and (II) the amount of the Retained
Net Equity Proceeds at such time (determined without regard to any
write-downs or write-offs thereof) and (iv) the aggregate amount of all
such investments does not exceed $5,000,000 in any fiscal year of
Silgan (determined without regard to any write-downs or write-offs
thereof);
(xxiv) so long as no Default or Event of Default then exists
or would result therefrom, on or prior to June 30, 1996, Containers may
make additional advances to Silgan the proceeds of which are
immediately used by Silgan to make additional advances to Holdings to
enable Holdings to immediately Refinance outstanding Holdings
Debentures through Permitted Holdings Debt Repurchases, provided that
the aggregate amount of advances made by Silgan to Holdings pursuant to
this clause (xxiv), when added to the amount of Dividends paid pursuant
to Section 8.03(xvii), shall not exceed the Blocked Commitment at such
time (before giving effect to any reduction thereto on such date);
(xxv) Silgan and its Subsidiaries may make additional loans
and advances to, or investments in, one another with the prior written
consent of the Required Banks; and
(xxvi) Silgan may make additional loans and advances to, or
investments in, Holdings with the prior written consent of the Required
Banks.
8.07 Transactions with Affiliates. None of the Borrowers will,
nor will it permit any of its Subsidiaries to, enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of such Borrower, other than on terms and
conditions substantially as favorable to such Borrower or such Subsidiary as
would be obtainable by such Borrower or such Subsidiary at the time in a
comparable arm's-length transaction with a Person other than an Affiliate,
provided that:
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(i) each of Holdings and its Domestic Subsidiaries may
execute, deliver and perform the Tax Sharing Agreement;
(ii) Silgan, Containers and Plastics may each make such
payments as are required pursuant to, and perform its obligations
under, its Management Services Agreement, provided that the Quarterly
Management Fee (as defined in the respective Management Services
Agreement) shall accrue but not be paid by Holdings, Silgan, Containers
and/or Plastics, as the case may be, upon the occurrence of certain
events, and to the extent, provided in the respective Management
Services Agreement, and provided further that the aggregate payments
payable pursuant to this clause (ii) shall not exceed at any time the
amount which would be payable under the Management Services Agreement
of Silgan if the payment under the other Management Services Agreements
were zero;
(iii) Silgan may make the payments in respect of Containers
Employee Stock Options and Plastics Employee Stock Options and the
stock appreciation rights granted in connection therewith to the extent
provided in Section 8.03(i);
(iv) Silgan, Containers and Plastics may make payments to
Holdings to pay (a) certain administrative expenses not to exceed, when
added to the amount of all Dividends and advances made by Silgan to
Holdings pursuant to Sections 8.03(viii) and 8.06(xviii), respectively,
$4,000,000 in the aggregate in any fiscal year of Silgan and (b) state
and local taxes to the extent that Holdings incurs liability therefor
as a result of its investment in and/or ownership of Silgan and its
Subsidiaries; and
(v) Containers, DM Can and AN Can may enter into the
applicable Intercompany Agency Agreement.
Notwithstanding anything to the contrary contained above, this Section 8.07
shall not prohibit the making of any Dividends, investments, loans and advances
permitted pursuant to Sections 8.02, 8.03, 8.05 and 8.06 or otherwise
specifically permitted by the terms of this Agreement.
8.08 Capital Expenditures. (a) None of the Borrowers will, nor
will it permit any of its Subsidiaries to, make any expenditure for fixed or
capital assets (including, without limitation, expenditures for maintenance and
repairs which should be capitalized in accordance with generally accepted
accounting principles and including capitalized lease obligations) during any
period set forth below which exceed in the aggregate for Silgan and its
Subsidiaries the amount set forth opposite such period below:
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Period Amount
------ ------
Effective Date through
and including
December 31, 1995 $50,000,000
Calendar Year ended
December 31, 1996 $65,000,000
Calendar Year ended
December 31, 1997 $65,000,000
Calendar Year ended
December 31, 1998 $65,000,000
Calendar Year ended
December 31, 1999 $65,000,000
Calendar Year ended
December 31, 2000 $65,000,000
Calendar Year ended
December 31, 2001 $65,000,000
Calendar Year ended
December 31, 2002 $65,000,000
Notwithstanding anything to the contrary contained above, to the extent that
capital expenditures made during any period set forth above are less than the
amount set forth opposite such period above, such amount (the "Carryover
Amount") may be carried forward and utilized to make capital expenditures in
excess of the amount permitted above in the immediately succeeding calendar year
but not in any calendar year thereafter, it being understood and agreed that (i)
any capital expenditures made in such immediately succeeding calendar year shall
be deemed to have first utilized the Carryover Amount in respect of such
immediately preceding calendar year and (ii) in no event will more than
$10,000,000 of capital expenditures be permitted to be carried forward from 1995
to 1996.
(b) In addition to the capital expenditures permitted pursuant
to the preceding clause (a) and succeeding clause (c), (i) capital expenditures
made on the Initial Borrowing Date in connection with Acquisition shall be
permitted, (ii) capital expenditures made in connection with the St. Louis
Facility Acquisition and Permitted Acquisitions shall be permitted and (iii)
capital expenditures made with Retained Net Equity Proceeds shall be permitted.
(c) In addition to the capital expenditures permitted pursuant
to the preceding clauses (a) and (b), capital expenditures made in connection
with plant rationalizations associated with the Acquisition shall be permitted
so long as (i) such capital expenditures are of the type that would have been
recorded under generally accepted accounting principles as
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a purchase accounting liability prior to EITF 95-3 and (ii) the aggregate amount
thereof does not exceed $10,000,000.
8.09 Current Ratio. None of the Borrowers will permit the
ratio of Consolidated Current Assets to Consolidated Current Liabilities at any
time to be less than 1.75:1.00.
8.10 Interest Coverage Ratio. None of the Borrowers will
permit the Interest Coverage Ratio for any Test Period ended on the last day of
a fiscal quarter set forth below to be less than the ratio set forth opposite
such fiscal quarter below:
Fiscal Quarter Ended Ratio
-------------------- -----
December 31, 1995 1.65:1.00
March 31, 1996 1.65:1.00
June 30, 1996 1.70:1.00
September 30, 1996 1.75:1.00
December 31, 1996 1.80:1.00
March 31, 1997 1.80:1.00
June 30, 1997 1.80:1.00
September 30, 1997 1.80:1.00
December 31, 1997 1.90:1.00
March 31, 1998 1.90:1.00
June 30, 1998 1.90:1.00
September 30, 1998 1.90:1.00
December 31, 1998 2.00:1.00
March 31, 1999 2.00:1.00
June 30, 1999 2.00:1.00
September 30, 1999 2.00:1.00
December 31, 1999 2.20:1.00
March 31, 2000 2.20:1.00
June 30, 2000 2.20:1.00
September 30, 2000 2.20:1.00
December 31, 2000 2.40:1.00
March 31, 2001 2.40:1.00
June 30, 2001 2.40:1.00
September 30, 2001 2.40:1.00
December 31, 2001 and 2.50:1.00
each fiscal quarter
thereafter
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8.11 Leverage Ratio. None of the Borrowers will permit the
Leverage Ratio for any Test Period ended on the last day of a fiscal quarter set
forth below to be greater than the ratio set forth opposite such fiscal quarter
below:
Fiscal Quarter Ended Ratio
-------------------- -----
December 31, 1995 5.10:1.00
March 31, 1996 5.10:1.00
June 30, 1996 5.10:1.00
September 30, 1996 5.10:1.00
December 31, 1996 4.60:1.00
March 31, 1997 4.60:1.00
June 30, 1997 4.60:1.00
September 30, 1997 4.60:1.00
December 31, 1997 4.30:1.00
March 31, 1998 4.30:1.00
June 30, 1998 4.30:1.00
September 30, 1998 4.30:1.00
December 31, 1998 4.00:1.00
March 31, 1999 4.00:1.00
June 30, 1999 4.00:1.00
September 30, 1999 4.00:1.00
December 31, 1999 3.75:1.00
March 31, 2000 3.75:1.00
June 30, 2000 3.75:1.00
September 30, 2000 3.75:1.00
December 31, 2000 3.50:1.00
March 31, 2001 3.50:1.00
June 30, 2001 3.50:1.00
September 30, 2001 3.50:1.00
December 31, 2001 and 3.00:1.00
each fiscal quarter
thereafter
8.12 Limitation on Voluntary Payments and Modifications of
Certain Indebtedness; Modifications of Documents, Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. None of the Borrowers will, nor will
it permit any of its Subsidiaries to, (i) make any voluntary or optional payment
or prepayment on or redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due) or exchange of any
Holdings Debentures, any Silgan Subordinated Notes or any Refinancing
Indebtedness, or any purchase, redemption or acquisition for value of
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(or any offer to purchase, redeem or acquire) any Holdings Debentures, any
Silgan Subordinated Notes or any Refinancing Indebtedness, whether as a result
of an Other Indebtedness Change of Control, the consummation of asset sales or
otherwise; provided, however, that Silgan may Refinance outstanding Silgan
Subordinated Notes and any Refinancing Indebtedness issued by Silgan through
Permitted Silgan Debt Repurchases, (ii) amend or modify, or permit the amendment
or modification of, any provision of the Silgan Subordinated Note Documents or
any Refinancing Indebtedness Documents entered into by Silgan, (iii) amend or
modify, or permit the amendment or modification of, any provision of the
Acquisition Agreement, the Tax Sharing Agreement (except that modifications to
the Tax Sharing Agreement may be made with the consent of the Administrative
Agent for the purpose of adding additional Subsidiaries of Holdings as parties
thereto on substantially the same basis as the existing Subsidiaries of
Holdings), any Intercompany Agency Agreement or any Management Services
Agreement to which it is a party or (iv) amend, modify or change its Certificate
of Incorporation (including, without limitation, by the filing or modification
of any certificate of designation) or By-Laws of any Borrower or any Subsidiary,
or any agreement entered into by any of them, with respect to its capital stock
(including without limitation the Employee Stock Options and the Stock Option
Agreements) (except for (x) amendments to its Certificate of Incorporation to
increase the authorized amount of common stock issuable thereunder, (y)
immaterial changes to the Employee Stock Options and the Stock Option Agreements
which could not adversely affect the Banks and (z) amendments to its Certificate
of Incorporation and By-Laws in the respective forms attached to, and as
contemplated by, the Holdings Shareholders Agreement as in effect on the date
hereof), or enter into any new agreement with respect to their capital stock
(except that the issuance of new Employee Stock Options by Containers and
Plastics in substantially the form furnished to the Administrative Agent on or
prior to the Effective Date shall, subject to Section 7.09, be permitted).
8.13 Creation of Subsidiaries. Notwithstanding anything to the
contrary contained in this Agreement, none of the Borrowers will, nor will it
permit any of its Subsidiaries to, establish, create or acquire after the
Initial Borrowing Date any Subsidiary; provided that, Silgan and its
Wholly-Owned Domestic Subsidiaries shall be permitted to establish, create or,
to the extent permitted by Section 8.02(ix), acquire Wholly-Owned Subsidiaries
and, to the extent permitted by Section 8.06(xxiii), non-Wholly-Owned
Subsidiaries, so long as (i) at least 15 Business Days' prior written notice
thereof is given to the Administrative Agent, (ii) the capital stock of such new
Subsidiary is pledged pursuant to (and to the extent required by) the applicable
Pledge Agreement and the certificates representing such stock, together with
stock powers duly executed in blank, are delivered to the Collateral Agent and
(iii) in the case of a Wholly-Owned Domestic Subsidiary, such Subsidiary
executes and delivers a counterpart of the Subsidiaries Pledge Agreement, the
Security Agreement, the Borrowers Guaranty, the Contribution Agreement and the
Tax Sharing Agreement and takes all such other actions as may be required by
Section 7.10. In addition, each Borrower will cause each new Wholly-Owned
Domestic
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Subsidiary that is required to execute and deliver a counterpart of any Credit
Document as required by this Section 8.13 to deliver to the Administrative Agent
all other relevant documentation of the type described in Sections 5.01(c), (d)
and (r) as such new Subsidiary would have had to deliver if it were a Credit
Party on the Initial Borrowing Date.
8.14 Limitation on Restrictions on Subsidiary Dividends and
Other Distributions. None of the Borrowers will, nor will it permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary to (a) pay dividends or make any other distributions on its
capital stock or any other interest or participation in its profits, owned by
such Borrower or any Subsidiary of such Borrower, or pay any Indebtedness owed
to such Borrower or a Subsidiary of such Borrower, (b) make loans or advances to
such Borrower or (c) transfer any of its properties or assets to such Borrower,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii) the
Silgan Subordinated Note Documents or any Refinancing Indebtedness Documents (so
long as such restrictions are no more restrictive in any material respect than
those set forth in the Silgan Subordinated Note Documents) entered into by
Silgan, (iv) customary provisions restricting subletting or assignment of any
lease governing a leasehold interest of such Borrower or a Subsidiary of such
Borrower and (v) restrictions on the transfer of any asset subject to a Lien
permitted by Section 8.01.
8.15 Limitation on Issuances of Capital Stock by Subsidiaries.
None of the Borrowers will permit any of its Subsidiaries to issue any capital
stock (including by way of sales of treasury stock) or any options or warrants
to purchase, or securities convertible into, capital stock, except for (i)
transfers and replacements of then outstanding shares of capital stock, (ii)
stock splits, stock dividends and similar issuances which do not decrease the
percentage ownership of such Borrower or any of its Subsidiaries in any class of
the capital stock of such Subsidiary, (iii) issuances of common stock by
Wholly-Owned Subsidiaries of Silgan to Silgan or a Wholly-Owned Domestic
Subsidiary thereof and (iv) subject to Section 7.09, the Employee Stock Options
(and any common stock issuable upon exercise thereof).
8.16 Business. (a) None of the Borrowers will, nor will it
permit any of its Subsidiaries to, engage (directly or indirectly) in any
business other than the packaging business.
(b) Canadian Holdco shall engage in no business other than its
ownership of the stock of Express. NRO shall engage in no business.
8.17 Change of Name. None of the Borrowers will, nor will it
permit any of its Subsidiaries to, change its legal name from that which exists
on the Effective Date
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unless and until (i) it shall have given to the Administrative Agent and the
Collateral Agent 45 days' prior written notice of its intention so to do,
clearly describing such new name and providing such other information in
connection therewith as the Administrative Agent and the Collateral Agent may
reasonably request, and (ii) with respect to such new name, it shall have taken
all action, reasonably satisfactory to the Administrative Agent and the
Collateral Agent, to maintain the security interests granted by any Credit Party
to the Collateral Agent in the Collateral pursuant to any Security Document at
all times fully perfected and in full force and effect.
8.18 Designated Senior Indebtedness. Silgan will not designate
any Indebtedness, other than the Obligations and, prior to the Existing Senior
Secured Notes Redemption Date, the Existing Senior Secured Notes, as "Designated
Senior Indebtedness" for purposes of the Silgan Subordinated Notes or any
Refinancing Indebtedness issued by Silgan.
Section 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. Any Borrower shall (i) default in the payment
when due of any Unpaid Drawings or of any principal of the Loans or the Notes,
or (ii) default, and such default shall continue unremedied for two or more
Business Days, in the payment when due of any interest on Unpaid Drawings or of
any interest on the Loans or the Notes or of any Fees or any other amounts owing
hereunder or thereunder; or
9.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue or
inaccurate in any material respect on the date as of which made or deemed made;
or
9.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement (other than
those referred to in Sections 9.01 and 9.02 and clause (ii) of this Section
9.03) contained in this Agreement and such default shall continue unremedied for
a period of 30 days after written notice to the Borrowers by either the
Administrative Agent, any Co-Arranger or any Bank or (ii) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(g)(i), 7.01(i)(y), 7.07, 7.12 or Section 8; or
9.04 Default Under Other Agreements. (i) Any Borrower or any
of its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Notes and the Intercompany Notes) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (y) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the
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Notes and the Intercompany Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required but giving effect to any grace period), any
such Indebtedness to become due prior to its stated maturity or (ii) any
Indebtedness of any Borrower or any of its Subsidiaries shall be declared to be
due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof, provided that (A) on
or prior to the 40th day after the Initial Borrowing Date (or, if sooner, the
Existing Senior Secured Notes Redemption Date), any event of default under, or
any acceleration of, the Existing Senior Secured Notes or the other Existing
Senior Secured Note Documents shall not constitute an Event of Default under
this Section 9.04 and (B) it shall not constitute an Event of Default under this
Section 9.04 unless the aggregate amount of all Indebtedness referred to in
clauses (i) and (ii) above exceeds $1,000,000; or
9.05 Bankruptcy, etc. Any Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against any Borrower or any of its Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
any Borrower or any of its Subsidiaries, or any Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to any Borrower or any of its Subsidiaries, or there is
commenced against any Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days, or any Borrower or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or any Borrower or
any of its Subsidiaries suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or any Borrower or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by any Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or
9.06 ERISA. (i) (a) A single-employer plan (as defined in
Section 4001(a)(15) of ERISA) established by any Borrower, any Subsidiary of any
Borrower or any ERISA Affiliate shall fail to maintain the minimum funding
standard required by Section 412 of the Code for any plan year or part thereof
or a waiver of such standard or the extension of any amortization period is
sought or granted under Section 412 of the
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Code, (b) any Plan is, shall have been or is likely to be terminated or the
subject of termination proceedings under ERISA or an event has occurred
entitling the PBGC to terminate a Plan under Section 4042(a) of ERISA, (c) any
Plan other than a Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) shall have an Unfunded Current Liability, or (d) any
Borrower, any Subsidiary of any Borrower or an ERISA Affiliate has incurred or
is likely to incur a liability to or on account of a Plan under Section 515,
4062, 4063, 4064, 4201 or 4204 of ERISA; (ii) there shall result from any such
event or events described in clause (i) (a) the imposition of a lien upon the
assets of any Borrower, any Subsidiary of any Borrower or an ERISA Affiliate,
(b) the provision of security to induce the issuance of a waiver or extension of
any funding requirement under Section 412 of the Code, or (c) liability or a
material risk of incurring liability to the PBGC or the Internal Revenue Service
or a Plan or a trustee appointed under ERISA; and (iii) the events described in
clauses (i) and (ii) in the opinion of the Required Banks, will have a material
adverse effect upon the business, operations, property, assets or condition
(financial or otherwise) of any Borrower; or
9.07 Pledge Agreements. Any Pledge Agreement shall cease to be
in full force and effect, or shall cease to give the Collateral Agent the Liens,
rights, powers and privileges purported to be created thereby (including,
without limitation, a first priority perfected security interest in, and Lien
on, all of the respective Pledge Agreement Collateral except as provided
herein), in favor of the Collateral Agent for the benefit of the respective
Secured Creditors and securing the Secured Obligations, superior to and prior to
the rights of all third Persons and subject to no other Liens, or any Credit
Party party to a Pledge Agreement shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to such Pledge Agreement; or
9.08 Guaranties. Any Guaranty or any provision thereof shall
cease to be in full force or effect, or the respective Guarantor, or any Person
acting by or on behalf of such Guarantor, shall deny or disaffirm its
obligations under a Guaranty, or the respective Guarantor shall default in the
due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to any Guaranty, or any Event of Default
under, and as defined in, the Holdings Guaranty shall occur; or
9.09 Security Agreements; Mortgages; Additional Security
Documents. Any of the Security Agreement, Mortgages or Additional Security
Documents shall, after the execution and delivery thereof, cease to be in full
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a perfected security interest in, and Lien on, all the Collateral or
Additional Collateral, as the case may be, covered thereby), in favor of the
Collateral Agent for the benefit of the respective Secured Creditors under the
Security Documents and securing the Secured Obligations, superior to and prior
to the rights and Liens of all third Persons (except that the security interests
created by the Security Agree-
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ment may be junior to the Permitted Liens, the security interests created by the
Mortgages may be subject to the respective Permitted Encumbrances and the
security interests created by the Additional Security Documents may be subject
to Liens permitted by Section 8.01), or any Credit Party shall default in the
due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to the Security Agreement or any Mortgage or
Additional Security Document; or
9.10 Judgments. One or more judgments or decrees shall be
entered against any Borrower or any of its Subsidiaries involving, when added to
any other judgments or decrees against Silgan and its Subsidiaries, a liability
(not paid or fully covered by a reputable and solvent insurance company) of
$1,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 60 days from the
entry thereof; or
9.11 Ownership; Change of Control. (i) A Change of Control
shall occur or (ii) an Other Indebtedness Change of Control Excess Repayment
shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrowers, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Co-Arranger, any Bank or the holder of any Note to enforce its claims
against any Borrower (provided, that, if an Event of Default specified in either
Section 9.05 shall occur with respect to any Borrower or Section 9.11(ii) shall
occur, the result which would occur upon the giving of written notice by the
Administrative Agent to the Borrowers as specified in clauses (i) and (ii) below
shall occur automatically without the giving of any such notice): (i) declare
the Total Commitment terminated, whereupon all Commitments shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and the Notes and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each of the Borrowers;
(iii) exercise any rights or remedies under the Guaranties and/or in its
capacity as Collateral Agent under any of the Security Documents; (iv) direct
Containers and Plastics to pay (and the respective Borrower agrees that upon
receipt of such notice it will pay) to the Administrative Agent at the Payment
Office such additional amount of cash, to be held as security by the
Administrative Agent in the Cash Collateral Account, as is equal to the
aggregate Stated Amount of all then outstanding Letters of Credit; and (v)
terminate any Letter of Credit which may be terminated in accordance with its
terms.
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Section 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"A Term Loan" shall have the meaning provided in Section
1.01(a).
"A Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "A Term Loan Commitment", as same may be (x) reduced from time to time
pursuant to Sections 3.03, 4.02 and/or 9 or (y) adjusted from time to time as a
result of assignments to or from such Bank pursuant to Sections 1.13 and/or
12.04(b).
"A Term Loan Maturity Date" shall mean December 31, 2000.
"A Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(c).
"A Term Loan Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(c).
"A Term Note" shall have the meaning provided in Section
1.05(a).
"Acquired Business" shall mean certain assets and net working
capital constituting the metal food containers, rigid plastic food containers
and metal caps and closure division of American National Can Company, an
indirect subsidiary of Pechiney SA, and the capital stock of AN Can, together
with certain liabilities relating thereto, in each case as set forth in the
Acquisition Documents.
"Acquisition" shall mean the purchase of the Acquired Business
pursuant to the Acquisition Documents.
"Acquisition Agreement" shall mean the Asset Purchase
Agreement, dated as of June 2, 1995, between Containers and American National
Can Company, as the same may be amended, modified or supplemented pursuant to
the terms hereof and thereof.
"Acquisition Documents" shall mean the Acquisition Agreement
and all other documents and agreements entered into or delivered in connection
with the Acquisition Agreement.
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"Additional Collateral" shall mean any assets or properties of
any Borrower or any Subsidiary of any Borrower given as collateral pursuant to
any Additional Security Document.
"Additional Security Documents" shall have the meaning
provided in Section 7.10(a) and shall include any additional security
documentation executed and delivered pursuant to Section 8.13.
"Adjusted Certificate of Deposit Rate" shall mean, on any day,
the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by
dividing (x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for determining
the current annual assessment payable by the Administrative Agent to the Federal
Deposit Insurance Corporation for insuring three-month certificates of deposit.
"Adjusted Net Income" for any period shall mean consolidated
net income of Holdings and its Subsidiaries for such period (after provision for
taxes) plus the amount of all net non-cash charges (including, without
limitation, depreciation, amortization, deferred tax expense, non-cash interest
expense, write-downs of inventory and other non-cash charges) that were deducted
in arriving at the consolidated net income of Holdings and its Subsidiaries for
such period less the amount of all net non-cash gains and gains from sales of
assets (other than sales of inventory in the ordinary course of business) that
were added in arriving at said consolidated net income for such period.
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement, and shall include any successor
Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to, all
directors and officers of such
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Person), controlled by, or under direct or indirect common control with, such
Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such corporation, whether through the ownership
of voting securities, by contract or otherwise. The term "Affiliate" with
respect to the Credit Parties and any of their Subsidiaries shall not include
BTCo or any of its affiliates.
"Agreement" shall mean this Credit Agreement, as same may be
modified, supplemented or amended from time to time.
"Allowed Reduction" shall mean any reduction in stockholders'
equity in an amount not to exceed $14,000,000 as a result of any cash Dividends
paid by Silgan to Holdings to enable Holdings to make payments after December
21, 1993 to third parties which are not Affiliates of Silgan in respect of the
Reorganization.
"American National Can Company" shall mean American National
Can Company, a Delaware corporation.
"AN Can" shall mean SCCW Can Corporation, a California
corporation.
"AN Can Intercompany Agency Agreement" shall mean the
Intercompany Agency Agreement, dated as of August 1, 1995, between Containers
and AN Can.
"Applicable Margin" shall mean a percentage per annum equal to
(w) in the case of A Term Loans which are maintained as (i) Base Rate Loans,
1-1/2% less the then applicable Interest Reduction Discount and (ii) Eurodollar
Loans, 2-1/2% less the then applicable Interest Reduction Discount, (x) in the
case of B Term Loans which are maintained as (i) Base Rate Loans, 2% and (ii)
Eurodollar Loans, 3%, (y) in the case of Revolving Loans which are maintained as
(i) Base Rate Loans, 1-1/2% less the then applicable Interest Reduction Discount
and (ii) Eurodollar Loans, 2-1/2% less the then applicable Interest Reduction
Discount and (z) in the case of Swingline Loans, 1-1/2% less the then applicable
Interest Reduction Discount.
"Applicable Revolving Loan Commitment Commission Percentage"
shall mean, at any time, a percentage per annum equal to 1/2 of 1%; provided,
that from and after the first day of any Margin Reduction Period (the "Start
Date") to and including the last day of such Margin Reduction Period (the "End
Date"), the Applicable Revolving Loan Commitment Commission Percentage shall be
3/8 of 1% if, but only if, as of the last day of the most recent fiscal quarter
or year, as the case may be, of Holdings ended immediately prior to such Start
Date (the "Test Date"), the Modified Leverage Ratio is less than or equal to
3.375:1.00. Notwithstanding anything to the contrary contained above in
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this definition, the Applicable Revolving Loan Commitment Commission Percentage
shall be 1/2 of 1% at all times when a Default or an Event of Default shall
exist.
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit N
(appropriately completed).
"Available Revolving Loan Commitment" for each Bank shall
mean, at any time, such Bank's Revolving Loan Commitment less such Bank's
Percentage of the Blocked Commitment at such time.
"B Term Loan" shall have the meaning provided in Section
1.01(b).
"B Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "B Term Loan Commitment," as same may be (x) reduced from time to time
pursuant to Sections 3.03, 4.02 and/or 9 or (y) adjusted from time to time as a
result of assignments to or from such Bank pursuant to Sections 1.13 and/or
12.04(b).
"B Term Loan Maturity Date" shall mean March 15, 2002.
"B Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(d).
"B Term Loan Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(d).
"B Term Note" shall have the meaning provided in Section
1.05(a).
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(c) or (ii) a Bank having notified in writing any Borrower
and/or the Administrative Agent that it does not intend to comply with its
obligations under Section 1.01(a), (b), (c) or 1.01(e) or Section 2, in case of
either clause (i) or (ii) as a result of any takeover of such Bank by any
regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
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"Base Rate" at any time shall mean the highest of (i) 1/2 of
1% in excess of the Adjusted Certificate of Deposit Rate, (ii) 1/2 of 1% in
excess of the Federal Funds Rate and (iii) the Prime Lending Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii)
any other Loan designated or deemed designated as a Base Rate Loan by the
respective Borrower at the time of the incurrence thereof or conversion thereto.
"Blecher Letter" shall have the meaning provided in Section
5.01(n).
"Blocked Commitment" shall mean (i) for the period from and
including the Initial Borrowing Date through and including June 30, 1996,
$75,000,000, with such amount to be reduced by the amount of cash Dividends paid
to Holdings pursuant to Section 8.03(xvii) and the amount of advances made
pursuant to Section 8.06(xxiv) and (ii) for the period thereafter, $0.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowers Guaranty" shall have the meaning provided in
Section 5.01(h)(ii).
"Borrowing" shall mean the borrowing of one Type of Loan of a
single Tranche from all the Banks having Commitments of the respective Tranche
(or from BTCo in the case of Swingline Loans) on a given date (or resulting from
a conversion or conversions on such date) having in the case of Eurodollar Loans
the same Interest Period; provided that Base Rate Loans incurred pursuant to
Section 1.10(b) shall be considered part of the related Borrowing of Eurodollar
Loans.
"Borrowing Base" shall mean, as at any date, the sum of the
following amounts: (i) 85% of Eligible Accounts Receivable and (ii) 50% of
Eligible Inventory.
"Borrowing Base Certificate" shall have the meaning provided
in Section 7.01(i).
"Borrowing Base Deficiency" at any time shall mean the amount,
if any, by which the sum of the aggregate principal amount of Revolving Loans
and Swingline Loans then outstanding plus the Letter of Credit Outstandings at
such time exceeds the Borrowing Base.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity.
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"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking institutions
are authorized by law or other government action to close and (ii) with respect
to all notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a Business Day described in
clause (i) above and which is also a day for trading by and between banks in the
New York interbank Eurodollar market.
"Canadian Holdco" shall mean 827599 Ontario Inc., an Ontario
corporation and a Wholly-Owned Subsidiary of Plastics.
"Carryover Amount" shall have the meaning provided in Section
8.08(a).
"Cash Collateral Account" shall have the meaning provided in
Section 4.02(a).
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than six months from the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank incorporated in the United States
of recognized standing having capital and surplus in excess of $100,000,000 with
maturities of not more than six months from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by the parent corporation of any commercial bank
(provided that the parent corporation and the bank are both incorporated in the
United States) of recognized standing having capital and surplus in excess of
$500,000,000 and commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by Standard & Poor's
Ratings Group or at least P-1 or the equivalent thereof by Moody's Investors
Service, Inc. and in each case maturing not more than six months after the date
of acquisition by such Person and (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above.
"CERCLA" shall mean the Comprehensive Environmental Response
Compensation of Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean any of (i) (A) prior to the
occurrence of an initial registered public equity offering by Silgan of its
common stock, Holdings shall cease to own 100% of the capital stock of Silgan
and (B) after the occurrence of an initial
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registered public equity offering by Silgan of its common stock, (x) any Person
or group (within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act), other than a Permitted Holder, individually or collectively, (I)
shall have acquired the beneficial ownership (as such term is defined in Rule
13D-3 promulgated under the Securities Exchange Act) of 30% or more on a fully
diluted basis of the voting and economic interest of Silgan or (II) shall have
obtained the power (whether or not exercised) to elect a majority of Silgan's
directors, (y) the Board of Directors of Silgan shall not consist of a majority
of Continuing Silgan Directors or (z) so long as the Holdings Debentures are
outstanding, Holdings shall cease to own at least a majority on a fully diluted
basis of the voting and economic interest of the capital stock of Silgan, (ii)
the occurrence of an event described in Section 9(g) of the Holdings Guaranty or
(iii) the occurrence of any Other Indebtedness Change of Control.
"Co-Arrangers" shall have the meaning provided in the first
paragraph of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder and
rulings issued thereunder. Section references to the Code are to the Code as in
effect at the date of this Agreement, and to any subsequent provisions of the
Code amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all Pledge Agreement Collateral, all
Security Agreement Collateral, all Mortgaged Properties and all Additional
Collateral.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Secured Creditors pursuant to the Security
Documents, and shall include any successor Collateral Agent appointed pursuant
to the terms of the respective Security Document.
"Commitment Commission" shall mean the Term Loan Commitment
Commission and the Revolving Loan Commitment Commission.
"Commitments" shall mean any of the commitments of any Bank,
i.e., whether the A Term Loan Commitment, B Term Loan Commitment or Revolving
Loan Commitment.
"Consolidated Current Assets" shall mean the current assets of
Holdings and its Subsidiaries determined on a consolidated basis, provided that
the Total Unutilized Revolving Loan Commitment shall be considered current
assets of Holdings in making the foregoing determination.
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"Consolidated Current Liabilities" shall mean the current
liabilities of Holdings and its Subsidiaries determined on a consolidated basis,
provided that the current portion of the Loans (including any accrued interest
with respect to such current portion and accrued interest on the Silgan
Subordinated Notes, the Holdings Debentures or any Refinancing Indebtedness, in
each case from the last regularly scheduled interest payment date) shall not be
considered current liabilities for purposes of making the foregoing
determination and, provided further, that the current portion of any
intercompany loans made by Silgan to Containers or Plastics also shall not be
considered current liabilities for the purposes of making the foregoing
determination.
"Consolidated Net Worth" shall mean the Net Worth of Silgan
and its Subsidiaries determined on a consolidated basis.
"Consolidated Subsidiaries" of any Person shall mean all
subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with generally accepted accounting
principles in the United States.
"Containers" shall have the meaning provided in the first
paragraph of this Agreement.
"Containers Employee Stock Options" shall have the meaning
provided in Section 6.13.
"Containers Stock Option Agreements" shall have the meaning
provided in Section 6.13.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall, unless expressly
limited by its terms to a lesser amount, be deemed to be an amount equal to the
stated or determinable amount of the primary
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obligation in respect of which such Contingent Obligation is made (or such
lesser amount) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"Continuing Silgan Directors" shall mean the directors of
Silgan on the Effective Date and each other director of Silgan, if such other
director's nomination for election to the Board of Directors of Silgan is
recommended, or if such other director is elected, by a majority of the then
Continuing Silgan Directors.
"Contribution Agreement" shall mean the Contribution
Agreement, dated as of June 18, 1992, by and among Containers, Plastics, DM Can
and AN Can, as the same may be modified, supplemented or amended pursuant to the
terms hereof and thereof.
"Credit Documents" shall mean this Agreement, the Contribution
Agreement, each Note, each Guaranty, each Pledge Agreement, each Mortgage and
the Security Agreement and, after the execution and delivery thereof, each
Additional Security Document.
"Credit Event" shall mean the making of any Loan or the
issuance of any Letter of Credit.
"Credit Party" shall mean and include Holdings, each of the
Borrowers, DM Can and AN Can, and after the creation thereof, any Subsidiary of
Silgan created pursuant to Section 8.13 which has executed and delivered a
Security Document.
"Debt Agreements" shall have the meaning provided in Section
5.01(e).
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Del Monte" shall mean Del Monte Corporation, a New York
corporation.
"Del Monte Acquisition" shall mean the purchase by Containers
on December 21, 1993 of certain fixed assets and working capital constituting
the containers manufacturing business of Del Monte and the capital stock of DM
Can, together with certain liabilities relating thereto.
"Dividends" shall have the meaning provided in Section 8.03.
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"DM Can" shall mean California-Washington Can Corporation, a
California corporation.
"DM Can Intercompany Agency Agreement" shall mean the
Intercompany Agency Agreement, dated as of December 21, 1993, between Containers
and DM Can.
"Documentation Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Documents" shall mean the Credit Documents and the
Acquisition Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of Silgan
incorporated or organized in the United States or any State or territory
thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"EBIT" shall mean, for any period, the consolidated net income
of Holdings and its Subsidiaries, before interest expense and provision for
taxes and without giving effect to any extraordinary non-cash gains or
extraordinary non-cash losses and gains or losses from sales of assets (other
than sales of inventory in the ordinary course of business), or any non-cash
adjustments resulting from changes in value of employee stock options.
"EBITDA" for any period shall mean EBIT, adjusted by adding
thereto the amount of all depreciation and all amortization of intangibles
(including covenants not to compete), goodwill and loan fees that were deducted
in arriving at EBIT for such period.
"Effective Date" shall have the meaning provided in Section
12.10.
"Eligible Accounts Receivable" shall mean the aggregate gross
amount of Silgan's Wholly-Owned Domestic Subsidiaries' accounts receivable which
conform to the warranties contained herein and in the Security Agreement and at
all times continue to be acceptable to the Collateral Agent in its reasonable
judgment, less any returns, discounts, claims, credits and allowances of any
nature (whether issued, owing, granted or outstanding) and less reserves for any
other matter affecting the creditworthiness of account debtors owing the
accounts receivable, and excluding (i) foreign or governmental sales (except to
the extent supported by a letter of credit issued by an issuer satisfactory to
the Collateral Agent), (ii) bill and hold (or deferred shipment) transactions,
(iii) contracts or sales to any
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Affiliate and (iv) all accounts receivable which have not been paid in full
within 60 days of the due date thereof.
"Eligible Inventory" shall mean the aggregate gross dollar
value (valued at the lower of cost or market value) of Silgan's Wholly-Owned
Domestic Subsidiaries' Inventory which conforms to the warranties contained in
the Security Agreement and which at all times continues to be acceptable to the
Collateral Agent in its reasonable judgment, less any supplies (other than raw
materials), spare parts, goods returned (other than goods returned by customers
of Containers consistent with past practices and which goods are not damaged and
are suitable for resale by Containers in the ordinary course of business) or
rejected by customers, goods to be returned to suppliers, and less any reserves
required by the Collateral Agent in its reasonable judgment for special order
goods, market value declines and bill and hold (deferred shipment) sales.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employee Stock Options" shall mean and include the Containers
Employee Stock Options and the Plastics Employee Stock Options.
"End Date" shall have the meaning provided in the definition
of Applicable Revolving Loan Commitment Commission Percentage.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any person (as defined in Section
3(9) of ERISA) (including each trade or business (whether or not incorporated))
which together with any Borrower or any Subsidiary of any Borrower would be
deemed to be a "single employer" or a member of the same "controlled group" of
"contributing sponsors" within the meaning of Section 4001 of ERISA.
"Eurodollar Loan" shall mean each Loan (other than a Swingline
Loan) designated as a Eurodollar Loan by any Borrower at the time of the
incurrence thereof or conversion thereto by such Borrower.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the
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Eurodollar Loan of BTCo with maturities comparable to the Interest Period
applicable to such Eurodollar Loan commencing two Business Days thereafter as of
10:00 A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period, divided (and rounded off to the nearest
1/100 of 1%) by (b) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency funding or liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section
9.
"Excess Cash Flow" shall mean, for any period, the remainder
of (i) the sum of (x) Adjusted Net Income for such period and (y) the decrease,
if any, in Working Capital from the first day to the last day of such period,
minus, without duplication, (ii) the sum of (t) the amount of capital
expenditures (not in excess of the amount permitted by Section 8.08 or such
greater amounts as are consented to by the Required Banks) made by Silgan and
its Subsidiaries on a consolidated basis during such period other than capital
expenditures made pursuant to Section 8.08(b) or financed through capital leases
or other Indebtedness during such period, (u) the aggregate principal amount of
permanent payments or prepayments on Indebtedness for borrowed money of Holdings
and its Subsidiaries (other than (A) repayments of loans under the Intercompany
Notes and any other intercompany loans among Holdings and its Subsidiaries, (B)
repayments of Existing Senior Secured Notes, Holdings Debentures, Silgan
Subordinated Notes or any Refinancing Indebtedness and (C) repayments of Loans,
provided that repayments of Loans shall be deducted in determining Excess Cash
Flow if such repayments were (1) required as a result of an A Term Loan
Scheduled Repayment under Section 4.02(c), (2) required as a result of a B Term
Loan Scheduled Repayment under Section 4.02(d) or (3) made as a voluntary
prepayment (but in the case of a voluntary prepayment of Revolving Loans, only
to the extent accompanied by a voluntary reduction to the Total Revolving Loan
Commitment)) on a consolidated basis during such period, (v) the increase, if
any, in Working Capital from the first day to the last day of such period, (w)
the aggregate amount of costs and expenses incurred by Silgan and its
Subsidiaries during such period in connection with the consolidation and plant
rationalization of their operations to the extent such amounts have not reduced
Adjusted Net Income for such period or constituted capital expenditures made
during such period, in each case in connection with the Acquisition, the St.
Louis Facility Acquisition, the Del Monte Acquisition or any Permitted
Acquisition, (x) the aggregate amount of Dividends paid pursuant to Sections
8.03(xii), (xiii) and (xiv) during such period and (y) the aggregate amount
expended in respect of Permitted Acquisitions and investments pursuant to
Section 8.06(xxiii) during such period other than Permitted Acquisitions and
investments made with Retained Excess Cash Flow and Retained Net Equity Proceeds
during such period.
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"Excess Cash Payment Date" shall mean the date occurring 120
days after the last day of each fiscal year of Silgan (beginning with its fiscal
year ended December 31, 1996).
"Excess Cash Payment Period" shall mean with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of Silgan.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of December 21, 1993, among the Borrowers, the financial institutions
party thereto, Bank of America National Trust and Savings Association, as
co-agent, and BTCo, as agent, as amended, modified or supplemented through the
Initial Borrowing Date.
"Existing Indebtedness" shall have the meaning provided in
Section 8.05(ii).
"Existing Letters of Credit" shall have the meaning provided
in Section 2.01.
"Existing Mortgaged Properties" shall mean all Real Property
of Containers, Plastics and DM Can listed on Schedule III and designated as
"Existing Mortgaged Properties" therein.
"Existing Mortgages" shall mean all Mortgages granted by
Containers, Plastics and DM Can pursuant to the Existing Credit Agreement and
which have not been released by the lenders thereunder prior to the Effective
Date.
"Existing Senior Secured Note Agreement" shall mean the Note
Purchase Agreement, dated as of June 29, 1992, between Silgan and each of the
purchasers party thereto, as the same is in effect on the Initial Borrowing
Date.
"Existing Senior Secured Note Documents" shall mean and
include each of the Existing Senior Secured Notes, the Existing Senior Secured
Note Agreement, the guaranties issued thereunder and the other documents
associated therewith.
"Existing Senior Secured Note Redemption Amount" shall mean
the aggregate principal amount of all Existing Senior Secured Notes outstanding
on the Initial Borrowing Date, together with all interest that will accrue
thereon through the Existing Senior Secured Notes Redemption Date, plus any
premium associated with the redemption of same on such date.
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"Existing Senior Secured Notes" shall mean the $50,000,000
aggregate principal amount of Senior Secured Floating Rate Notes due 1997 issued
by Silgan pursuant to the Existing Senior Secured Note Agreement.
"Existing Senior Secured Notes Redemption" shall mean the
redemption or repayment in full of all outstanding Existing Senior Secured
Notes.
"Existing Senior Secured Notes Redemption Date" shall mean a
single date occurring on or before the 40th day following the Initial Borrowing
Date, provided that if the Existing Senior Secured Notes are accelerated after
the Initial Borrowing Date and prior to the date designated by Silgan as the
Existing Senior Secured Notes Redemption Date, Silgan may declare (to the
Administrative Agent) the Business Day immediately following such acceleration
as the Existing Senior Secured Notes Redemption Date and may incur A Term Loans
in accordance with, and subject to the terms of, this Agreement to consummate
the Existing Senior Secured Notes Redemption.
"Express" shall mean Express Plastic Containers Limited, an
Ontario corporation and a Wholly-Owned Subsidiary of Canadian Holdco.
"Facing Fees" shall have the meaning provided in Section
3.01(d).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"Foreign Subsidiary" shall mean each Subsidiary of Silgan
which is not a Domestic Subsidiary.
"Guarantor" shall mean, with respect to any Guaranty, the
respective guarantor or guarantors thereunder (i.e., Holdings, Silgan,
Containers, Plastics, DM Can, AN Can and/or any Subsidiary of Silgan required to
deliver a Guaranty pursuant to Section 8.13, as the case may be).
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"Guaranty" shall mean and include each of the Holdings
Guaranty, the Borrowers Guaranty and any guaranty delivered pursuant to Section
8.13.
"Holdings" shall mean Silgan Holdings Inc., a Delaware
corporation.
"Holdings Debenture Documents" shall mean and include each of
the Holdings Debentures, the Holdings Debenture Indenture and each of the other
documents and agreements related thereto.
"Holdings Debenture Indenture" shall mean the Indenture, dated
as of June 29, 1992, between Holdings and Shawmut Bank Connecticut, N.A., as
trustee.
"Holdings Debentures" shall mean the 13-1/4% Senior Discount
Debentures due 2002 issued by Holdings pursuant to the Holdings Debenture
Indenture.
"Holdings Employee Stock Options" shall have the meaning
provided in the Holdings Guaranty.
"Holdings Guaranty" shall have the meaning provided in Section
5.01(h)(i).
"Holdings Merger" shall have the meaning provided in Section
8.02(x).
"Holdings Pledge Agreement" shall mean the Amended and
Restated Holdings Pledge Agreement, dated as of June 30, 1989, as amended and
restated as of June 18, 1992, as amended by the First Amendment, dated as of
December 21, 1993, and as amended by the Second Amendment, dated as of August 1,
1995, between Holdings and the Collateral Agent, as the same may be further
modified, supplemented and amended pursuant to the terms hereof and thereof.
"Holdings Shareholders Agreement" shall mean the "Shareholders
Agreement" as defined in the Holdings Guaranty.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price of
property or services, (ii) the face amount of all letters of credit issued for
the account of such Person and all drafts drawn thereunder, (iii) all
liabilities secured by any Lien on any property owned by such Person, whether or
not such liabilities have been assumed by such Person, (iv) the aggregate amount
required to be capitalized under leases under which such Person is the lessee
and (v) all Contingent Obligations of such Person.
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"Initial Borrowing Date" shall mean the date occurring on or
after the Effective Date on which the initial Borrowing hereunder occurs.
"Intercompany Agency Agreement" shall mean the AN Can
Intercompany Agency Agreement and the DM Can Intercompany Agency Agent.
"Intercompany Notes" shall mean all Mirror Intercompany Notes
and all Working Capital Intercompany Notes, which Intercompany Notes shall, (x)
in the case of those Intercompany Notes issued to Holdings, Silgan, Containers,
Plastics, DM Can, AN Can or any other Wholly-Owned Domestic Subsidiary of
Silgan, be pledged pursuant to the respective Pledge Agreement and (y) in all
cases, contain a provision that, upon either the acceleration of the Loans
pursuant to Section 9 or a payment default on such Loans at final maturity
thereof, all amounts due and payable under such Intercompany Notes shall be
immediately due and payable without any further action.
"Interest Coverage Ratio" for any period shall mean the ratio
of (x) EBITDA to (y) Interest Expense for such period, provided that for
purposes of determining the pro forma Interest Coverage Ratio under Section
8.05(xvii), such ratio shall be calculated without regard to any interest
incurred with respect to any Indebtedness of Holdings so long as such
Indebtedness is not guaranteed in any manner by Silgan or any of its
Subsidiaries.
"Interest Determination Date" shall mean the second Business
Day prior to the commencement of any Interest Period relating to a Eurodollar
Loan.
"Interest Expense" for any period shall mean the total
consolidated interest expense of Holdings and its Subsidiaries for such period
(without giving effect to any amortization of up-front fees and expenses in
connection with any debt issuance).
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall have the meaning
provided in the Security Documents and the Guaranties.
"Interest Reduction Discount" shall mean initially zero, and
from and after any Start Date to and including the corresponding End Date, the
percentage set forth in clause (A), (B), (C), (D), (E) or (F) below to the
extent applicable:
(A) 1/4 of 1% if, but only if, as of the Test Date for such
Start Date, the Modified Leverage Ratio for the Test Period ended on
such Test Date is less than or equal to 3.75:1.00 and none of the
conditions set forth in clauses (B) through (F) below are satisfied;
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(B) 1/2 of 1% if, but only if, as of the Test Date for such
Start Date, the Modified Leverage Ratio for the Test Period ended on
such Test Date is less than or equal to 3.375:1.00 and none of the
conditions set forth in clauses (C) through (F) below is not satisfied;
(C) 3/4 of 1% if, but only if, as of the Test Date for such
Start Date, the Modified Leverage Ratio for the Test Period ended on
such Test Date is less than or equal to 3:00:1.00 and none of the
conditions in clauses (D) through (F) below are satisfied;
(D) 1% if, but not only if, as of the Test Date for such Start
Date, the Modified Leverage Ratio for the Test Period ended on such
Test Date is less than or equal to 2.625:1.00 and neither of the
conditions set forth in clause (E) or (F) below is satisfied;
(E) 1-1/4% if, but only if, as of the Test Date for such Start
Date, the Modified Leverage Ratio for the Test Period ended on such
Test Date is less than or equal to 2.25:1.00 and the condition set
forth in clause (F) below is not satisfied; or
(F) 1-1/2% if, but only if, as of the Test Date for such Start
Date, the Modified Leverage Ratio for the Test Period ended on such
Test Date is less than or equal to 1.875:1.00.
Notwithstanding anything to the contrary above in this definition, (i), subject
to following clause (ii), if Silgan's long-term Indebtedness receives a stated
"senior implied" rating of at least BBB- from Standard & Poor's Ratings Group or
at least Baa3 from Moody's Investors Service, Inc., then from the date that is
the first Business Day of the fiscal quarter of Silgan following the fiscal
quarter containing the first date that either such rating is announced and for
so long as such rating shall remain in effect, the Interest Reduction Discount
shall be 1-1/2% and (ii) the Interest Reduction Discount shall be reduced to
zero at all times when a Default or an Event of Default shall exist.
"Inventory" of any Person shall mean "Inventory" as defined in
the Security Agreement.
"Inventory and Accounts Receivable Report" shall mean the
Inventory and Accounts Receivable Report substantially in the form of Exhibit L
(appropriately completed).
"Iowa City JV" shall mean the joint venture formed pursuant to
the Joint Venture Agreement Creating Iowa City Can Mfg. Company, dated as of
January 31, 1989,
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between Containers and Van Dorn Company, an Ohio corporation, acting through its
Central States Can Co. division.
"Issuing and Paying Agency Agreement" shall mean the Issuing
and Paying Agency Agreement, dated as of June 20, 1992, among Silgan, Containers
and the Issuing and Paying Agent.
"Issuing and Paying Agent" shall mean The Bank of New York.
"Leaseholds" of any Person, means all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements, and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fees" shall have the meaning provided in
Section 3.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" for any period shall mean the ratio of (x)
the sum of (I) Total Indebtedness (excluding Revolving Outstandings) as of the
last day of such period plus (II) the Revolving Outstandings on the December
31st immediately preceding the last day of such period (or, in the case of a
Test Period ended on December 31 in any fiscal year, the Revolving Outstandings
on such December 31) to (y) EBITDA for then the most recently ended Test Period.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement and any lease having substantially the same effect as any of
the foregoing).
"Loan" shall mean each A Term Loan, each B Term Loan, each
Revolving Loan and each Swingline Loan.
"Majority Banks" of any Tranche shall mean those
Non-Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if all
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outstanding Obligations of the other Tranches under this Agreement were repaid
in full and all Commitments with respect thereto were terminated.
"Management Agreements" shall have the meaning provided in
Section 5.01(e).
"Management Services Agreements" shall mean each of the
Amended and Restated Management Service Agreements, each dated as of December
21, 1993, between each of Holdings, Silgan, Containers and Plastics and S&H
Inc., as any such Management Services Agreement may be amended, modified or
supplemented from time to time pursuant to the terms hereof and thereof.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(e).
"Margin Reduction Period" shall mean each period which shall
commence on a date on which the financial statements are delivered pursuant to
Section 7.01(b) (other than in respect of the fiscal fourth quarter of any
fiscal year) or (c), as the case may be, and which shall end on the earlier of
(i) the date of actual delivery of the next financial statements pursuant to
Section 7.01(b) (other than in respect of the fiscal fourth quarter of any
fiscal year) or (c), as the case may be, and (ii) the latest date on which the
next financial statements are required to be delivered pursuant to Section
7.01(b) (other than in respect of the fiscal fourth quarter of any fiscal year)
or (c), as the case may be; provided that the first Margin Reduction Period
shall commence on the date of delivery of the financial statements in respect of
the fiscal quarter of Holdings ending September 30, 1996.
"Margin Stock" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System.
"Maturity Date" shall mean the A Term Loan Maturity Date, the
B Term Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline
Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $10,000,000.
"Mirror Intercompany Notes" shall mean all promissory notes
listed on Schedule VII delivered by the respective obligor thereunder evidencing
an intercompany loan or loans with proceeds initially received by Silgan from
the issuance of the Existing Senior Secured Notes, the Silgan Subordinated Notes
and the Term Loans.
"Modified Leverage Ratio" shall mean, at any time, the ratio
of (x) the sum of (I) Total Consolidated Term Debt at such time plus (II) the
Revolving Outstandings on the December 31st immediately preceding the respective
Test Date (or, in the case of a Test
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Date on December 31 in any fiscal year, the Revolving Outstandings on such
December 31) to (y) EBITDA for the then most recently ended Test Period.
"Mortgage Amendments" shall have the meaning provided in
Section 5.01(l)(i).
"Mortgaged Properties" shall mean the Existing Mortgaged
Properties and the New Mortgaged Properties.
"Mortgage Policies" shall mean the mortgage title insurance
policies issued in respect of each of the Mortgaged Properties.
"Mortgages" shall mean mortgages, deeds of trust, leasehold
mortgages and leasehold deeds of trust granted in favor of the Collateral Agent
for the benefit of the respective Secured Creditors with respect to the
Mortgaged Properties, which mortgages, deeds of trust, leasehold mortgages and
leasehold deeds of trust are or shall be in a form which is satisfactory to the
Co-Arrangers, with such changes as are necessary or desirable in the opinion of
local counsel to conform with applicable state law and procedure.
"Net Equity Proceeds" shall mean, with respect to each
issuance of equity by any Person, the proceeds (net of underwriting discounts
and commissions and other reasonable costs associated therewith) received by
such Person from the respective sale or issuance of such equity.
"Net Sale Proceeds" shall mean Sale Proceeds, net of
reasonable costs in connection therewith and the estimated marginal increase in
taxes which will be payable by Silgan's consolidated group with respect to such
year as a result thereof.
"Net Worth" of any Person shall mean the sum of its capital
stock, capital in excess of par or stated value of shares of its capital stock,
retained earnings (without giving effect to any non-cash adjustments resulting
from changes in value of employee stock options), and any other account which,
in accordance with generally accepted accounting principles, constitutes
stockholders' equity, less treasury stock.
"New Mortgaged Properties" shall have the meaning provided in
Section 5.01(l)(ii).
"New Mortgages" shall mean those Mortgages which have been
granted with respect to the New Mortgaged Properties.
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
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"Note" shall mean each A Term Note, each B Term Note, each
Revolving Note and each Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at One Bankers Trust Plaza, New York, New York 10006, or such
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.
"NRO" shall mean 828745 Ontario Inc., an Ontario corporation
and a Wholly-Owned Subsidiary of Silgan.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Co-Arrangers, the Collateral Agent or any Bank
pursuant to the terms of this Agreement or any other Credit Document.
"Other Indebtedness Change of Control" shall mean any Change
of Control under, and as defined in, any of the Silgan Subordinated Note
Documents, the Holdings Debenture Documents or the Refinancing Indebtedness
Documents.
"Other Indebtedness Change of Control Excess Repayment" shall
mean any repurchase (or the tender for repurchase by the respective holder or
holders thereof) of any Holdings Debenture, Silgan Subordinated Note or any
Refinancing Indebtedness (or any portion thereof) as a result of an Other
Indebtedness Change of Control.
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Office" shall mean the office of the Administrative
Agent located at One Bankers Trust Plaza, New York, New York 10006, or such
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Pechiney SA" means Pechiney SA, a French corporation.
"Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time; provided, that if the Percentage of any
Bank is to be determined after the Total
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Revolving Loan Commitment has been terminated, then the Percentages of the Banks
shall be determined immediately prior (and without giving effect) to such
termination.
"Permitted Acquisition" shall have the meaning provided in
Section 8.02(ix).
"Permitted Encumbrance" shall mean, with respect to any
Mortgaged Property, such exceptions to title as are set forth in the Mortgage
Policy delivered with respect thereto, all of which exceptions must be
acceptable to the Required Banks in their reasonable discretion.
"Permitted Holder" shall mean any of R. Philip Silver, D. Greg
Horrigan or The Morgan Stanley Leveraged Equity Fund, II, L.P. or any of their
respective Affiliates.
"Permitted Holdings Debt Repurchases" shall have the meaning
provided in the Holdings Guaranty.
"Permitted Liens" shall have the meaning provided in Section
8.01(iii).
"Permitted Silgan Debt Repurchases" shall mean one or more
open market or privately negotiated transactions or voluntary Refinancings
pursuant to which Silgan Refinances outstanding Silgan Subordinated Notes or
Refinancing Indebtedness issued by Silgan so long as (i) at the time of each
such Refinancing, no Default or Event of Default then exists or would result
therefrom, (ii) the sources of funds used to effect any such Refinancing derive
solely from Net Equity Proceeds from one or more registered public equity
offerings by Holdings or Silgan of its common stock, Retained Excess Cash Flow
and/or, in the case of the Silgan Subordinated Notes, Refinancing Indebtedness
and (iii) immediately following any such Refinancing (other than a Refinancing
pursuant to which the Silgan Subordinated Notes are defeased in accordance with
the terms of the Silgan Subordinated Notes Indenture), the Silgan Subordinated
Notes or Refinancing Indebtedness so Refinanced are cancelled by Silgan.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) or any single-employer plan (as defined in Section
4001(a)(15) of ERISA), subject to Title IV of ERISA, which is maintained or
contributed to, or at any time during the five calendar years preceding the date
of this Agreement was maintained or contributed to by any Borrower, any
Subsidiary of any Borrower or any ERISA Affiliate.
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"Plastics" shall have the meaning provided in the first
paragraph of this Agreement.
"Plastics Employee Stock Options" shall have the meaning
provided in Section 6.13.
"Plastics Stock Option Agreements" shall have the meaning
provided in Section 6.13.
"Pledge Agreements" shall mean and include each of the
Holdings Pledge Agreement, the Silgan Pledge Agreement and the Subsidiaries
Pledge Agreement.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the respective Pledge Agreement.
"Pledged Securities" shall have the meaning provided in the
respective Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Projections" shall have the meaning provided in Section
5.01(s).
"Quarterly Payment Date" shall mean the last Business Day of
each March, June, September and December.
"RCRA" shall mean the Resources Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Estate Sales" shall mean the sale by Silgan or any of
its Subsidiaries, as the case may be, of the Real Property located in Mansville,
Texas, Westport, Missouri, Maysville, Kentucky, Hillsboro, Oregon, Cambridge
Springs, Pennsylvania, Smithfield, Utah, Savage, Minnesota and Hoopeston,
Illinois, in each case in accordance with Section 8.02(vii).
"Real Property" of any Person means all of the right, title
and interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
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"Refinance", "Refinanced" or "Refinancing" shall mean, when
used in respect of the Holdings Debentures, the Silgan Subordinated Notes and/or
any Refinancing Indebtedness, to refinance, redeem, repay, repurchase, acquire
or defease any such issue of Indebtedness.
"Refinancing Indebtedness" shall mean (i) any Indebtedness
incurred pursuant to Section 8.05(xvi) or (xvii) the proceeds of which are used
to Refinance outstanding Silgan Subordinated Notes, Holdings Debentures and/or
any Refinancing Indebtedness previously issued by Holdings or (ii) any
Indebtedness of Holdings incurred pursuant to Section 8(c)(v) of the Holdings
Guaranty the proceeds of which are used to
Refinance outstanding Holdings Debentures.
"Refinancing Indebtedness Documents" shall mean all
indentures, securities purchase agreements, note agreements and other documents
and agreements entered into in connection with any Refinancing Indebtedness.
"Register" shall have the meaning provided in Section 12.17.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Reorganization" shall mean the corporate reorganization of
Holdings and Silgan that occurred in June 1989.
"Replaced Bank" shall have the meaning provided in Section
1.13.
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"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(b) of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC.
"Required Appraisal" shall have the meaning provided in
Section 7.13.
"Required Banks" shall mean Non-Defaulting Banks, the sum of
whose outstanding Term Loans, Term Loan Commitments and Revolving Loan
Commitments (or after the termination thereof, outstanding Revolving Loans and
Percentage of outstanding Swingline Loans and Letter of Credit Outstandings)
represent an amount greater than 50% of the sum of all outstanding Term Loans of
Non-Defaulting Banks, the Total Term Loan Commitment (less the Term Loan
Commitments of Non-Defaulting Banks) and the Total Revolving Loan Commitment
(less the Revolving Loan Commitments of Defaulting Banks) (or after the
termination thereof, the sum of the then total outstanding Revolving Loans of
Non-Defaulting Banks, Swingline Loans and Letter of Credit Outstandings).
"Required Secured Creditors" shall have the meaning provided
in the respective Security Document.
"Retained Excess Cash Flow" shall mean, initially zero and at
any time on or after January 1, 1997, a cumulative amount equal to 50% of Excess
Cash Flow for each Excess Cash Payment Period, with the amount of such Retained
Excess Cash Flow to be immediately reduced by (i) the amount of any voluntary
prepayments of Term Loans made pursuant to Section 4.01(a) with the proceeds of
Retained Excess Cash Flow, (ii) the amount of any Holdings Debentures, Silgan
Subordinated Notes and/or Refinancing Indebtedness Refinanced with the proceeds
of Retained Excess Cash Flow (including all amounts expended in respect of
principal, premium, and fees, but excluding interest) and (iii) the amount of
all Dividends paid pursuant to the proviso of Section 8.03(xi).
"Retained Net Equity Proceeds" shall mean, at any time, an
amount equal to 50% of all Net Equity Proceeds received by Holdings or Silgan
after it shall have received in the aggregate at least $75,000,000 of Net Equity
Proceeds from one or more registered public equity offerings of its common stock
(net any amounts used or to be used to repurchase shares of Holdings Class B
Common Stock held by First Plaza Group Trust), with the amount of such Retained
Net Equity Proceeds to be immediately reduced by (i) the amount of any voluntary
prepayments of Term Loans made pursuant to Section 4.01(a) with Retained Net
Equity Proceeds, (ii) the amount of any Permitted Acquisitions, investments made
pursuant to Section 8.06(xxiii) and, without duplication, capital expenditures,
in each case to the extent such payments, investments or expenditures are made
with Retained Net
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Equity Proceeds and (iii) the amount of any Holdings Debentures, Silgan
Subordinated Notes and/or any Refinancing Indebtedness Refinanced with Retained
Net Equity Proceeds.
"Revolving Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 9 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to
Sections 1.13 and/or 12.04(b).
"Revolving Loan Commitment Commission" shall have the meaning
provided in Section 3.01(b).
"Revolving Loan Maturity Date" shall mean December 31, 2000.
"Revolving Loans" shall have the meaning provided in Section
1.01(c).
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"Revolving Outstandings" shall mean, at any time, the sum of
the aggregate principal amount of Revolving Loans and Swingline Loans then
outstanding plus the aggregate amount of all Letter of Credit Outstandings at
such time.
"Sale Proceeds" shall mean all cash, the principal amount of
all debt obligations and the fair market value of all other property received as
proceeds of any sale of assets.
"SEC" shall have the meaning provided in Section 7.01(h).
"Second Term Loan Borrowing Date" shall mean a Business Day
occurring one Business Day prior to a date on which outstanding Existing Senior
Secured Notes are repaid or redeemed.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b).
"Secured Creditors" shall mean (x) the Banks, the
Administrative Agent, the Documentation Agent, the Co-Arrangers, the Collateral
Agent and certain lenders of Indebtedness which refinance Indebtedness under
this Agreement and (y) the Interest Rate Protection Creditors (as defined in the
Security Agreement).
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"Secured Obligations" shall mean all Obligations under, and as
defined in, this Agreement as well as all other Obligations as defined in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
"Security Agreement" shall mean the Amended and Restated
Security Agreement, dated as of August 31, 1987, and amended and restated as of
June 18, 1992, as amended by the First Amendment dated as of December 21, 1993,
and as amended by the Second Amendment, dated as of August 1, 1995, among
Plastics, Containers, DM Can, AN Can and the Collateral Agent, as the same may
be further amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"Security Agreement Collateral" shall mean and include all
"Collateral" as defined in the Security Agreement.
"Security Documents" shall mean and include the Pledge
Agreements, the Mortgages, the Security Agreement and, after the execution and
delivery thereof, each Additional Security Document.
"Shareholders Agreement" shall have the meaning provided in
Section 5.01(e).
"Silgan" shall have the meaning provided in the first
paragraph of this Agreement.
"Silgan Pledge Agreement" shall mean the Amended and Restated
Silgan Pledge Agreement, dated as of August 31, 1987, as amended and restated as
of March 1, 1989, and as amended and restated as of July 30, 1990, and amended
and restated as of June 18, 1992, and amended by the First Amendment, dated as
of December 21, 1993, and the Second Amendment, dated as of August 1, 1995,
between Silgan and the Collateral Agent, as the same may be further modified,
supplemented and amended from time to time in accordance with the terms hereof
and thereof.
"Silgan Subordinated Note Documents" shall mean and include
each of the Silgan Subordinated Notes, the Silgan Subordinated Notes Indenture
and all other documents and agreements related thereto.
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"Silgan Subordinated Notes" shall mean the $135,000,000
aggregate principal amount of Silgan's 11-3/4% Senior Subordinated Notes due
2002 which were issued pursuant to the Silgan Subordinated Notes Indenture.
"Silgan Subordinated Notes Indenture" shall mean the
Indenture, dated as of June 29, 1992, between Silgan and Shawmut Bank, N.A., as
Trustee.
"Start Date" shall have the meaning provided in the definition
of Applicable Revolving Loan Commitment Commission Percentage.
"Stated Amount" of each Letter of Credit shall mean the
maximum amount available to be drawn thereunder, determined without regard to
whether any conditions to drawing could then be met.
"St. Louis Assets" shall have the meaning provided in the
Acquisition Agreement.
"St Louis Facility Acquisition" shall mean the acquisition by
Containers of the St. Louis Assets pursuant to, and in accordance with the terms
of, the Acquisition Agreement.
"Stock Option Agreements" shall mean and include the
Containers Stock Option Agreements and the Plastics Stock Option Agreements.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time. Unless the context
indicates otherwise, all references herein to Subsidiaries are references to
Subsidiaries of any Borrower.
"Subsidiaries Pledge Agreement" shall mean the Amended and
Restated Subsidiaries Pledge Agreement, dated as of June 18, 1992, as amended by
the First Amendment, dated as of December 21, 1993, and the Second Amendment,
dated as of August 1, 1995, among Containers, Plastics, DM Can, AN Can and the
Collateral Agent, as the same may be further modified, supplemented and amended
pursuant to the terms hereof and thereof.
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"Supermajority Banks" of any Tranche shall mean those
Non-Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if (x) all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50% contained therein
were changed to "66-2/3%".
"Swingline Expiry Date" shall mean, at any time, the date
which is two Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(d).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Date" shall mean the Business Day occurring on or
after the earlier of (i) the 60th day after the Initial Borrowing Date and (ii)
the date upon which the Co-Arrangers determine in their sole discretion (and
notify Silgan) that the primary syndication (and the resultant addition of
institutions as Banks pursuant to Section 12.04(b)) has been completed.
"Tax Sharing Agreement" shall mean the Amended and Restated
Tax Allocation Agreement, dated as of July 13, 1990, as amended on December 21,
1993 and August 1, 1995, by and among Holdings and each of its Subsidiaries
party thereto.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall mean each A Term Loan and each B Term Loan.
"Term Loan Borrowing Date" shall mean each of the Initial
Borrowing Date, the Second Term Loan Borrowing Date and the Third Term Loan
Borrowing Date.
"Term Loan Commitment" shall mean, for each Bank at any time,
the sum of the A Term Loan Commitment and the B Term Loan Commitment of such
Bank at such time.
"Term Loan Commitment Commission" shall have the meaning
provided in Section 3.01(a).
"Test Date" shall have the meaning provided in the definition
of Applicable Revolving Loan Commitment Commission Percentage.
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"Test Period" shall mean each period of four consecutive
fiscal quarters of Holdings (in each case taken as one accounting period),
provided that the first Test Period shall end on December 31, 1995.
"Third Term Loan Borrowing Date" shall mean the Business Day
immediately preceding the Existing Senior Secured Notes Redemption Date.
"Total A Term Loan Commitment" shall mean, at any time, the
sum of the A Term Loan Commitments of each of the Banks.
"Total Available Revolving Loan Commitment" shall mean, at any
time, the Total Revolving Loan Commitment less the Blocked Commitment at such
time.
"Total B Term Loan Commitment" shall mean, at any time, the
sum of the B Term Loan Commitments of each of the Banks.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Consolidated Term Debt" shall mean, at any time, the
sum of (1) the aggregate principal amount of Term Loans then outstanding, (2)
the aggregate accreted principal amount of Holdings Debentures then outstanding,
(3) the aggregate principal amount of Silgan Subordinated Notes then
outstanding, (4) the aggregate principal amount (or accreted amount if issued at
a discount) of all Refinancing Indebtedness then outstanding, (5) the aggregate
principal amount of all Indebtedness then outstanding that was assumed in
connection with a Permitted Acquisition and (6) the aggregate principal amount
of all promissory notes then outstanding that were issued by Holdings pursuant
to Section 8(b)(i) or (ii) of the Holdings Guaranty which provide for the
current payment of interest in cash.
"Total Indebtedness" shall mean the aggregate Indebtedness of
Holdings and its Subsidiaries determined on a consolidated basis, provided that
there shall be excluded, in making the foregoing determination, Indebtedness
consisting of capitalized lease obligations described in Schedule VIII.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum
of the Total A Term Loan Commitment and the Total B Term Loan Commitment.
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"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment less (y) the sum of the aggregate principal amount of Revolving Loans
and Swingline Loans then outstanding plus the then aggregate amount of Letter of
Credit Outstandings.
"Tranche" shall mean the respective facilities and commitments
utilized in making Loans hereunder, with there being four separate Tranches,
i.e., A Term Loans, B Term Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean each of (i) the consummation of the
Acquisition, (ii) the termination of the commitments under the Existing Credit
Agreement and the repayment of all loans outstanding thereunder and (iii) the
consummation of the Existing Senior Secured Notes Redemption.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect in
the relevant jurisdictions.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the present value of the accrued benefits under the Plan as of the
close of its most recent plan year exceeds the fair market value of the assets
allocable thereto determined in accordance with Section 412 of the Code.
"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided in Section
2.05(a).
"Unutilized Revolving Loan Commitment" with respect to any
Bank, at any time, shall mean such Bank's Revolving Loan Commitment at such time
less the sum of (i) the aggregate outstanding principal amount of Revolving
Loans made by such Bank and (ii) such Bank's Percentage of the Letter of Credit
Outstandings.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person that is a Domestic
Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
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"Working Capital" shall mean Consolidated Current Assets
(excluding cash, Cash Equivalents and the portion of the Total Unutilized
Revolving Loan Commitment otherwise included therein) less Consolidated Current
Liabilities.
"Working Capital Intercompany Notes" shall mean all promissory
notes evidencing intercompany loans by and among Silgan and its Subsidiaries
other than the Mirror Intercompany Notes.
10.02 Principles of Construction. (a) All references to
sections, schedules and exhibits are to sections, schedules and exhibits in or
to this Agreement unless otherwise specified.
(b) All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles in the
United States in conformity with those used in the preparation of the last
audited financial statements referred to in Section 6.07(a).
Section 11. The Administrative Agent and the Co-Arrangers.
11.01 Appointment. The Banks hereby designate Bankers Trust
Company as Administrative Agent (for purposes of this Section 11, the term
"Administrative Agent" shall include Bankers Trust Company in its capacity as a
Co-Arranger and as Collateral Agent pursuant to the Security Documents) to act
as specified herein and in the other Credit Documents. The Banks hereby
designate Bank of America Illinois as a Co-Arranger (for purposes of this
Section 11, the term "Co-Arranger" as it applies to Bank of America Illinois
shall include Bank of America Illinois in its capacity as Documentation Agent)
to act as specified herein and in the other Credit Documents. Each Bank hereby
irrevocably authorizes the Administrative Agent and the Co-Arrangers to take
such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent and the Co-Arrangers by the terms hereof and thereof and such other powers
as are reasonably incidental thereto. The Administrative Agent and the
Co-Arrangers may perform any of their respective duties hereunder by or through
their respective officers, directors, agents or employees.
11.02 Nature of Duties. Neither the Administrative Agent nor
any Co-Arranger shall have any duties or responsibilities except those expressly
set forth in this Agreement and the other Credit Documents. Neither the
Administrative Agent, any Co-Arranger nor any of their respective officers,
directors, agents, affiliates or employees shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross
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negligence or willful misconduct. The duties of the Administrative Agent and the
Co-Arrangers shall be mechanical and administrative in nature; neither the
Administrative Agent nor any Co-Arranger shall have by reason of this Agreement
or any other Credit Document a fiduciary relationship in respect of any Bank;
and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the
Administrative Agent or any Co-Arranger any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein.
Notwithstanding anything to the contrary contained in this Agreement, the
Documentation Agent, in its capacity as such, shall have no duties or
responsibilities under this Agreement or under the other Credit Documents.
11.03 Lack of Reliance on the Administrative Agent and
Co-Arrangers. Independently and without reliance upon the Administrative Agent
or any Co-Arranger, each Bank, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of each of the Borrowers in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the credit-worthiness of each
of the Borrowers and, except as expressly provided in this Agreement, neither
the Administrative Agent nor any Co-Arranger shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect thereto, whether coming into
its possession before the making of the Loans, or at any time or times
thereafter. Neither the Administrative Agent nor any Co-Arranger shall be
responsible to any Bank for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of any Borrower or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the financial condition of any
Borrower or the existence or possible existence of any Default or Event of
Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks (or from
the Required Secured Creditors with respect to the Security Documents) with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, as the case may be, the Administrative
Agent shall be entitled to refrain from such act or taking such action unless
and until the Administrative Agent shall have received instructions from the
Required Banks or the Required Secured Creditors, as the case may be, and the
Administrative Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Bank shall have any right of
action whatsoever against the Administrative Agent as a result of the
Administrative Agent acting or refraining from
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acting hereunder or under any other Credit Document in accordance with the
instructions of the Required Banks or the Required Secured Creditors, as the
case may be.
11.05 Reliance. The Administrative Agent and each of the
Co-Arrangers shall be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, statement, certificate, telex,
teletype or facsimile message, cablegram, radiogram, order or other document or
telephone message signed, sent or made by any Person that the Administrative
Agent or such Co-Arranger believes to be the proper Person, and, with respect to
all legal matters pertaining to this Agreement and any other Credit Document and
its duties hereunder and thereunder, upon advice of counsel selected by it.
11.06 Indemnification. To the extent the Administrative Agent
or any Co-Arranger is not reimbursed and indemnified by the Borrowers, the Banks
will reimburse and indemnify the Administrative Agent and such Co-Arranger, in
proportion to their respective "percentages" as used in determining the Required
Banks (determined as if there are no Defaulting Banks), for and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Administrative Agent or
such Co-Arranger in performing their duties hereunder or under any other Credit
Document, in any way relating to or arising out of this Agreement or any other
Credit Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's or
such Co-Arranger's gross negligence or willful misconduct.
11.07 The Administrative Agent and the Co-Arrangers in Their
Individual Capacity. With respect to its obligation to make Loans and, to
participate in Letters of Credit under this Agreement, the Administrative Agent
and each of the Co-Arrangers shall have the rights and powers specified herein
for a "Bank" and may exercise the same rights and powers as though they were not
performing the duties specified herein; and the term "Banks," "Required Banks,"
or any similar terms shall, unless the context clearly otherwise indicates,
include the Administrative Agent and each of the Co-Arrangers in their
individual capacities. The Administrative Agent and each of the Co-Arrangers may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with, or purchase an equity interest in, any
Borrower or any Affiliate of any Borrower as if it were not performing the
duties specified herein, and may accept fees and other consideration from any
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Banks. The Administrative Agent and each
of the Co-Arrangers may also be an equity investor in any Borrower or any
Affiliate of any Borrower without any consent required from any Banks.
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11.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as the case may be, of such Note or of any note or notes issued in
exchange therefor.
11.09 Resignation by the Administrative Agent and the
Co-Arrangers. (a) The Administrative Agent and/or any of the Co-Arrangers may
resign from the performance of all their respective functions and duties
hereunder and/or under the other Credit Documents (other than under the Security
Documents except to the extent provided therein) at any time by giving 15
Business Days' prior (or, in the case of a Co-Arranger, same day) written notice
to the Borrowers and the Banks. In the case of the resignation by the
Administrative Agent, such resignation shall take effect upon the appointment of
a successor Administrative Agent pursuant to clauses (b) and (c) below or as
otherwise provided below. In the case of a resignation by any Co-Arranger, such
resignation shall become effective immediately.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Administrative Agent hereunder or thereunder who shall
be a commercial bank or trust company reasonably acceptable to the Borrowers.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrowers, shall then appoint a successor Administrative Agent
who shall serve as Administrative Agent hereunder or thereunder until such time,
if any, as the Required Banks appoint a successor Administrative Agent as
provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date such
notice of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document (other than under any Security Document except to the
extent so appointed in accordance with the terms thereof) until such time, if
any, as the Required Banks appoint a successor agent as provided above.
Section 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrowers jointly and
severally agree that they will: (i) whether or not the transactions herein
contemplated are consummated,
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pay all reasonable out-of-pocket costs and expenses of the Administrative Agent
and each of the Co-Arrangers in connection with the preparation, execution and
delivery of the Credit Documents and the documents and instruments referred to
therein and any amendment, waiver or consent relating thereto (including,
without limitation, the reasonable fees and disbursements of White & Case, local
counsel and, without duplication, the allocated costs of in-house counsel for
the Co-Arrangers) and of the Administrative Agent and each of the Co-Arrangers
in connection with their syndication efforts with respect to this Agreement and
of the Administrative Agent, each of the Co-Arrangers, the Collateral Agent and
each of the Banks in connection with the enforcement of the Credit Documents and
the documents and instruments referred to therein (including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent, each of the Co-Arrangers, the Collateral Agent and each of
the Banks); (ii) pay and hold each of the Banks harmless from and against any
and all present and future stamp, excise and other similar taxes with respect to
the foregoing matters and save each of the Banks harmless from and against any
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to such Bank) to pay such taxes; and
(iii) indemnify the Administrative Agent, each of the Co-Arrangers, the
Collateral Agent and each Bank, its officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not the Administrative
Agent, any Co-Arranger or any Bank is a party thereto) related to the entering
into and/or performance of this Agreement or any other Credit Document or the
use of any Letter of Credit or the proceeds of any Loans hereunder or the
consummation of any transactions contemplated herein (including, without
limitation, the Transaction) or in any other Credit Document or the exercise of
any of their rights or remedies provided herein or in the other Credit
Documents, or (b) the actual or alleged presence of hazardous materials in the
air, surface water or groundwater or on the surface or subsurface of any Real
Property owned or at any time operated by Holdings or any of its Subsidiaries,
the generation, storage, transportation, handling or disposal of hazardous
materials at any location, whether or not owned or operated by Holdings or any
of its Subsidiaries, the non-compliance of any Real Property with foreign,
federal, state and local laws, regulations, and ordinances (including applicable
permits thereunder) applicable to any Real Property, or any environmental claim
asserted against Holdings, any of its Subsidiaries or any Real Property owned or
at any time operated by Holdings or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation, litigation
or other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the undertaking
to
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indemnify, pay or hold harmless the Administrative Agent, any Co-Arranger or any
Bank set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Bank is hereby authorized at any time or from time to time with the prior
consent of the Administrative Agent or the Required Banks, without presentment,
demand, protest or other notice of any kind to any Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of such Borrower against and on account of the
Obligations and liabilities of such Borrower to such Bank under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 12.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
such Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
12.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Borrower, at
its address specified opposite its signature below; if to any Bank, at its
office specified opposite its name on Schedule X; and if to the Administrative
Agent, at its Notice Office; or, as to any Borrower or the Administrative Agent,
at such other address as shall be designated by such party in a written notice
to the other parties hereto and, as to each other party, at such other address
as shall be designated by such party in a written notice to the Borrowers and
the Administrative Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, cabled or sent by overnight courier,
be effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Administrative Agent
shall not be effective until received by the Administrative Agent.
12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, no Borrower may
assign or transfer any of its rights, obligations or interest hereunder or under
any other Credit Document without the prior written consent of the Banks and,
provided further, that, although any Bank may transfer,
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assign or grant participations in its rights hereunder, such Bank shall remain a
"Bank" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments or outstanding Loans hereunder except as provided in
Sections 1.13 and 12.04(b)) and the transferee, assignee or participant, as the
case may be, shall not constitute a "Bank" hereunder and, provided further, that
no Bank shall transfer or grant any participation under which the participant
shall have rights to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or waiver would (i)
extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Revolving Loan Maturity
Date) in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents) supporting the
Loans in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit Documents (the participant's rights against such Bank in
respect of such participation to be those set forth in the agreement executed by
such Bank in favor of the participant relating thereto) and all amounts payable
by any Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Commitments and related outstanding Obligations hereunder to its parent company
and/or any affiliate of such Bank which is at least 50% owned by such Bank or
its parent company or to one or more Banks or (y) assign all, or if less than
all, a portion equal to at least $5,000,000 in the aggregate for the assigning
Bank or assigning Banks, of such Commitments and related outstanding Obligations
hereunder to one or more Eligible Transferees, each of which assignees shall
become a party to this Agreement as a Bank by execution of an Assignment and
Assumption Agreement, provided that, (i) at such time Schedule I shall be deemed
modified to reflect the Commitments (or outstanding Term Loans, as the case may
be) of such new Bank and of the existing Banks, (ii) new Notes will be issued,
at the Borrowers' expense, to such new Bank and to the assigning Bank upon the
request of such new Bank or assigning Bank, such new Notes to be in conformity
with the requirements of Section 1.05 (with appropriate modifications) to the
extent needed to reflect the revised Commitments (or outstanding Term Loans, as
the case may be), (iii) the consent of the Administrative
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Agent shall be required in connection with any assignment to an Eligible
Transferee pursuant to clause (y) above (which consent shall not be unreasonably
withheld) and (iv) the Administrative Agent shall receive at the time of each
such assignment, from the assigning or assignee Bank, the payment of a
non-refundable assignment fee of $3,500, provided further, that no assignment
pursuant to this Section 12.04(b) shall be effective until recorded in the
Register by the Administrative Agent. At the time of each assignment pursuant to
this Section 12.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide to the Borrowers and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent of any
assignment pursuant to this Section 12.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Commitments.
To the extent that an assignment of all or any portion of a Bank's Commitments
and related outstanding Obligations pursuant to Section 1.13 or this Section
12.04(b) would, at the time of such assignment, result in increased costs under
Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the respective
assigning Bank prior to such assignment, then the Borrowers shall not be
obligated to pay such increased costs (although the Borrowers shall be obligated
to pay any other increased costs of the type described above resulting from
changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent, any Co-Arranger or any Bank or any holder
of a Note in exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between any Borrower and the
Administrative Agent, any Co-Arranger or any Bank or the holder of any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, any Co-Arranger or any Bank or the holder of any Note
would otherwise have. No notice to or demand on any Borrower in any case shall
entitle any Borrower to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative
Agent, any Co-Arranger, any Bank or the holder of any Note to any other or
further action in any circumstances without notice or demand.
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12.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of any
Borrower in respect of any Obligations of such Borrower hereunder, it shall
distribute such payment to the Banks (other than any Bank that has consented in
writing to waive its pro rata share of any such payment) pro rata based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, the Unpaid Drawings, Commitment Commission or Letter of Credit
Fees, of a sum which with respect to the related sum or sums received by other
Banks is in a greater proportion than the total of such Obligation then owed and
due to such Bank bears to the total of such Obligation then owed and due to all
such Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of such Borrower to such Banks in
such amount as shall result in a proportional participation by all of the Banks
in such amount; provided that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by Silgan to the Banks); provided that, (i)
except as otherwise specifically provided herein, all computations determining
compliance with Section 4.02, Section 8 and the definition of Applicable
Revolving Loan Commitment Commission Percentage and Interest Reduction Discount
shall utilize accounting principles and policies in conformity with those used
to prepare the audited historical financial statements delivered to the Banks
pursuant to Section 6.07(a) and (ii) all computations in determining the
Leverage Ratio for periods which include periods prior to the Initial Borrowing
Date shall include the Acquired Business on a pro forma basis as if the
Acquisition was consummated on the first day of such period; provided further,
that (A) in determining the Net Worth of Silgan for any period, no effect shall
be given to the Allowed Reduction or to any Dividends paid pursuant to Section
8.03(xvii), (B) in determining compliance with Sections 8.10 and 8.11, and in
determining the Applicable Revolving Loan Commitment Commission Percentage and
the Interest Reduction Discount, no effect shall be given to any outstanding
Holdings Debentures or Silgan Subordinated Notes which are to be Refinanced with
the proceeds of Refinancing Indebtedness that have theretofore been incurred for
such purpose, but only so long as such Refinancing occurs within 60 days after
the respective incurrence of such Refinancing
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Indebtedness and (C) in determining EBITDA, no effect shall be given (but only
to the extent not already otherwise excluded from the calculation of EBITDA
under this Agreement) (I) to FAS 106, (II) to any charges incurred in connection
with (v) the Acquisition, (w) any facility rationalizations associated with the
Acquired Business in an aggregate amount not to exceed $10,000,000, (x) any
Refinancing of the Holdings Debentures, the Silgan Subordinated Notes or any
Refinancing Indebtedness, (y) any public equity offerings by Holdings or Silgan
or (z) any severance payments required to be paid by Containers pursuant to the
Acquisition Agreement in an aggregate amount not to exceed $10,000,000 or (III)
any retiree or pension expense in respect of the Acquisition but only to the
extent incurred prior to July 31, 1995.
(b) All computations of interest, Commitment Commission and
other Fees hereunder shall be made on the actual number of days elapsed over a
year of 360 days.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (A)
--------------------------------------------------- THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE BORROWERS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE BORROWERS HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 1633
BROADWAY, NEW YORK, NEW YORK 10019 AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
OF THE BORROWERS AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW
YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO
THE ADMINISTRATIVE AGENT. EACH OF THE BORROWERS FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY BANK TO
SERVE PROCESS IN ANY OTHER MAN- NER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY BORROWER IN ANY OTHER JURISDICTION.
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(B) EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrowers and the Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which (i) each of the Borrowers and the Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Administrative Agent at
its Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or telex notice
(actually received) at such office that the same has been signed and mailed to
it. The Administrative Agent will give the Borrowers and each Bank prompt
written notice of the occurrence of the Effective Date.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrowers and the Required Banks, provided that no such
change, waiver, discharge or termination shall, without the consent of each Bank
(other than a Defaulting Bank) (with Obligations being directly affected
thereby), (i) extend the final scheduled maturity of any Loan or Note or extend
the stated maturity of any Letter of Credit beyond the Revolving Loan Maturity
Date, or reduce the rate or extend the time of payment of interest or Fees
thereon, or reduce the principal amount thereof, (ii) release all or
substantially all of the Collateral (except as expressly provided in the
Security Documents) under all the Security Documents, (iii) amend, modify or
waive any provision of this Section 12.12, (iv) reduce the percentage specified
in the definition of Required Banks (it being understood that, with the consent
of the Required Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Term Loans and Revolving Loan
Commitments are included
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<PAGE>
on the Effective Date), (v) consent to the assignment or transfer by any
Borrower of any of its rights and obligations under this Agreement or (vi)
consent to the release of Containers or Plastics from its obligations under the
Borrowers Guaranty except in connection with a sale of all or substantially all
of the assets of, or all of the capital stock of, such Guarantor in a
transaction that has been approved by the Required Banks; provided further, that
no such change, waiver, discharge or termination shall (u) increase the
Commitments of any Bank over the amount thereof then in effect without the
consent of such Bank (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Commitment shall not constitute an increase of the
Commitment of any Bank, and that an increase in the available portion of any
Commitment of any Bank shall not constitute an increase in the Commitment of
such Bank), (v) without the consent of BTCo, amend, modify or waive any
provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit or Swingline Loans, (w) without the consent of the
Administrative Agent or the Co-Arrangers, amend, modify or waive any provision
of Section 11 as same applies to the Administrative Agent or the Co-Arrangers or
any other provision as same relates to the rights or obligations of the
Administrative Agent or the Co-Arrangers, (x) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent, (y) without the consent of the Majority
Banks of each Tranche which is being allocated a lesser prepayment, repayment or
commitment reduction as a result of the actions described below (or without the
consent of the Majority Banks of each Tranche in the case of an amendment to the
definition of Majority Banks), amend the definition of Majority Banks or alter
the required application of any prepayments or repayments (or commitment
reduction), as between the various Tranches, pursuant to Section 4.01 or 4.02
(excluding Section 4.02(c) or (d)) (although the Required Banks may waive, in
whole or in part, any such prepayment, repayment or commitment reduction, so
long as the application, as amongst the various Tranches, of any such
prepayment, repayment or commitment reduction which is still required to be made
is not altered) or (z) without the consent of the Supermajority Banks of the
respective Tranche, amend the definition of Supermajority Banks or reduce the
amount of, or shorten or extend, any A Term Loan Scheduled Repayment or B Term
Loan Scheduled Repayment, as the case may be.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (vi), inclusive, of the first proviso to
Section 12.12(a), the consent of the Required Banks is obtained but the consent
of one or more of other Banks whose consent is required is not obtained, then
Silgan shall have the right to either (A) replace each such nonconsenting Bank
or Banks (so long as all non-consenting Banks are so replaced) with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Commitments
and
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<PAGE>
repay in full its outstanding Loans in accordance with Section 3.02(b) and/or
4.01(b), provided that, unless the Commitments terminated, and Loans repaid,
pursuant to preceding clause (B) are immediately replaced in full at such time
through the addition of new Banks or the increase of the Commitments and/or
outstanding Loans of existing Banks (who in each case must specifically consent
with respect to such increase in respect of itself), then in the case of any
action pursuant to preceding clause (B) the Required Banks (determined before
giving effect to the proposed action) shall specifically consent thereto,
provided that Silgan shall not have the right to replace a Bank solely as a
result of the exercise of such Bank's rights (and the withholding of any
required consent by such Bank) pursuant to the second proviso to Section
12.12(a).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 11.06 and 12.01 shall
survive the execution and delivery of this Agreement and the Notes and the
making and repayment of the Loans and all Unpaid Drawings hereunder and the
termination of the Commitments.
12.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any office, Subsidiary or Affiliate of such
Bank. Notwithstanding anything to the contrary contained herein, to the extent
that a transfer of Loans pursuant to this Section 12.14 would, at the time of
such transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04
from those being charged by the respective Bank prior to such transfer, then no
Borrower shall be obligated to pay such increased costs (although each Borrower
shall be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective transfer).
12.15 Provision Inserted Pursuant to Local Real Estate Law.
The indebtedness and obligations evidenced hereby are secured by, among other
things, those certain Deed of Trust, Assignment of Leases and Rents and Security
Agreements, in each case dated as of August 31, 1987, as amended, executed by
Containers and Plastics, as the case may be, to David Frantze, Trustee, for the
benefit of Bankers Trust Company, as Collateral Agent, which Deed of Trust,
Assignment of Leases and Rents and Security Agreements create liens upon real
property in Buchanan, Lawrence and St. Louis counties, Missouri.
12.16 Confidentiality. (a) Subject to the provisions of clause
(b) of this Section 12.16, each Bank agrees that it will use its best effort not
to disclose without the prior consent of Silgan (other than to its employees,
auditors or counsel or to another Bank or such Bank's holding or parent company
if such Bank determines in its sole discretion that any such party should have
access to such information) any information with respect to Holdings or any of
its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Credit Document and which is designated by any Borrower
to the Banks in writing as confidential, provided that any Bank may disclose any
such
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<PAGE>
information (a) as has become generally available to the public, (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board, the Federal Deposit
Insurance Corporation or the National Association of Insurance Commissioners or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in respect to any summons or
subpoena or in connection with any litigation, (d) in order to comply with any
law, order, regulation or ruling applicable to such Bank, and (e) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Revolving
Commitments or any interest therein by such Bank, provided that such prospective
transferee agrees with such Bank to maintain the confidentiality provisions
contained in this Section.
(b) Each Borrower hereby acknowledges and agrees that each
Bank may share with any of its affiliates any information related to Holdings or
any of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of Holdings and its Subsidiaries).
12.17 Register. Each Borrower hereby designates the
Administrative Agent to serve as such Borrower's agent, solely for purposes of
this Section 12.17, to maintain a register (the "Register") on which it will
record the name, address and taxpayer identification number, if any, of each of
the Banks, the Commitments from time to time of each of the Banks, the Loans
made by each of the Banks and each repayment in respect of the principal amount
of the Loans of each Bank. Failure to make any such recordation, or any error in
such recordation shall not affect such Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitment of such Bank and
the rights to the principal of, and interest on, any Loan made pursuant to such
Commitment shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitment and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitment and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Commitment and Loan shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. Each Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Administrative
Agent in performing
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<PAGE>
its duties under this Section 12.17; provided that no Borrower shall be liable
for any portion of such losses, claims, damages and liabilities resulting from
the Administrative Agent's gross negligence or willful misconduct.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
SILGAN CORPORATION
4 Landmark Square
Suite 400
Stamford, CT 06901 By /s/ Harley Rankin, Jr.
-----------------------
Attn: Harley Rankin, Jr. Title: Executive Vice President and
Telephone: (203) 975-7110 Chief Financial Officer
Fax: (203) 975-7902
SILGAN CONTAINERS CORPORATION
4 Landmark Square
Suite 400
Stamford, CT 06901 By /s/ Harley Rankin, Jr.
-----------------------
Attn: Harley Rankin, Jr. Title: Vice President
Telephone: (203) 975-7110
Fax: (203) 975-7902
SILGAN PLASTICS CORPORATION
4 Landmark Square
Suite 400
Stamford, CT 06901 By /s/ Harley Rankin, Jr.
-----------------------
Attn: Harley Rankin, Jr. Title: Vice President and Treasurer
Telephone: (203) 975-7110
Fax: (203) 975-7902
BANKERS TRUST COMPANY,
Individually, and as Administrative
Agent and as a Co-Arranger
By /s/ Dana Klein
---------------
Title: Vice President
BANK OF AMERICA ILLINOIS,
Individually, and
as Documentation Agent
and as a Co-Arranger
By /s/ Barry R. Dunn
------------------
Title: Vice President
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<PAGE>
CRESCENT/MACH I PARTNERS, L.P.
By Crescent Capital Corporation
as Portfolio Manager and
Attorney-in-Fact
By /s/ Justin Driscoll
--------------------
Title: Vice President
INTEGON LIFE INSURANCE CORPORATION
By Crescent Capital Corporation
as Portfolio Manager and
Attorney-in-Fact
By /s/ Justin Driscoll
--------------------
Title: Vice President
<PAGE>
---------------------------------------------
ASSET PURCHASE AGREEMENT
---------------------------------------------
dated as of June 2, 1995
between
AMERICAN NATIONAL CAN COMPANY
and
SILGAN CONTAINERS CORPORATION
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms...................................... .. 1
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Assets to Be Sold............................................. 9
SECTION 2.02. Assumption and Exclusion of Liabilities....................... 11
SECTION 2.03. Purchase Price; Allocation of Purchase Price.................. 12
SECTION 2.04. Closing ............................................. 12
SECTION 2.05. Closing Deliveries by the Seller.............................. 12
SECTION 2.06. Closing Deliveries by the Purchaser........................... 13
SECTION 2.07. St. Louis Closing............................................. 13
SECTION 2.08. Adjustment of Purchase Price.................................. 14
SECTION 2.09. Post-St. Louis Closing Adjustment of Purchase Price........... 16
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 3.01. Incorporation and Authority of the Seller..................... 17
SECTION 3.02. No Conflict ............................................. 18
SECTION 3.03. Consents and Approvals........................................ 18
SECTION 3.04. Financial Statements.......................................... 19
SECTION 3.05. Litigation ............................................. 20
SECTION 3.06. Permits and Licenses; Compliance with Laws.................... 20
SECTION 3.07. Conduct in the Ordinary Course; Absence of Changes or Events.. 21
SECTION 3.08. Material Contracts............................................ 22
SECTION 3.09. Employee Matters ............................................. 23
SECTION 3.10. Environmental Matters......................................... 24
SECTION 3.11. Intellectual Property......................................... 26
SECTION 3.12. Assets ............................................. 26
SECTION 3.13. Real Property ............................................. 27
SECTION 3.14. Insurance ............................................. 27
SECTION 3.15. Labor Matters ............................................. 27
SECTION 3.16. Taxes ............................................. 28
<PAGE>
-ii-
Page
SECTION 3.17. Lockboxes; Safe Deposit Boxes; Powers of Attorney............. 28
SECTION 3.18. Certain Transactions.......................................... 28
SECTION 3.19. Suppliers and Customers....................................... 28
SECTION 3.20. The Subsidiary ............................................. 29
SECTION 3.21. Brokers ............................................. 29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.01. Incorporation and Authority of the Purchaser.................. 30
SECTION 4.02. No Conflict ............................................. 30
SECTION 4.03. Absence of Litigation......................................... 30
SECTION 4.04. Governmental Consents and Approvals........................... 31
SECTION 4.05. Financing ............................................. 31
SECTION 4.06. Brokers ............................................. 31
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of the Business Prior to the Closing.................. 31
SECTION 5.02. Investigation ............................................. 32
SECTION 5.03. Access to Information......................................... 33
SECTION 5.04. Books and Records............................................. 34
SECTION 5.05. Confidentiality ............................................. 34
SECTION 5.06. Regulatory and Other Authorizations; Consents................. 35
SECTION 5.07. Bulk Transfer Laws............................................ 36
SECTION 5.08. ISRA ............................................. 36
SECTION 5.09. Other Changes ............................................. 37
SECTION 5.10. Other Negotiations............................................ 37
SECTION 5.11. Closing Conditions............................................ 37
SECTION 5.12. Environmental Assessment...................................... 37
SECTION 5.13. Inventory Physical............................................ 38
SECTION 5.14. Audited Financial Statements.................................. 38
SECTION 5.15. Tax Elections ............................................. 38
SECTION 5.16. Title Reports; Surveys........................................ 39
SECTION 5.17. Financial Covenants........................................... 39
SECTION 5.18. St. Louis Restructuring....................................... 39
SECTION 5.19. Employee Grievances........................................... 39
<PAGE>
-iii-
Page
SECTION 5.20. Further Action ............................................. 40
ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.01. Offer of Employment........................................... 41
SECTION 6.02. Benefit Arrangements.......................................... 42
SECTION 6.03. Performance Plans............................................. 45
SECTION 6.04. Transition Services........................................... 45
SECTION 6.05. Indemnification for Claims.................................... 46
SECTION 6.06. Welfare Benefits ............................................. 46
SECTION 6.07. Union Employees ............................................. 46
SECTION 6.08. Indemnification for Union Claims.............................. 47
SECTION 6.09. Multiemployer Plans........................................... 47
SECTION 6.10. WARN Act ............................................. 48
SECTION 6.11. St. Louis Employees........................................... 48
SECTION 6.12. San Leandro Employees......................................... 48
SECTION 6.13. No Rights of Employees........................................ 49
ARTICLE VII
TAX MATTERS
SECTION 7.01. Sales, Use and Other Transfer Taxes........................... 49
SECTION 7.02. Proration of Certain Charges.................................. 49
SECTION 7.03. Treatment of Indemnity Payments............................... 50
ARTICLE VIII
CONDITIONS TO THE CLOSING
SECTION 8.01. Conditions to Obligations of the Seller....................... 50
SECTION 8.02. Conditions to Obligations of the Purchaser.................... 51
<PAGE>
-iv-
Page
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Survival ............................................. 54
SECTION 9.02. Indemnification by the Purchaser.............................. 54
SECTION 9.03. Indemnification by the Seller................................. 57
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.01. Termination ............................................. 59
SECTION 10.02. Effect of Termination........................................ 60
SECTION 10.03. Waiver ............................................. 60
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01. Expenses ............................................. 60
SECTION 11.02. Notices ............................................. 61
SECTION 11.03. Public Announcements......................................... 61
SECTION 11.04. Headings ............................................. 62
SECTION 11.05. Severability ............................................. 62
SECTION 11.06. Disclosure Schedule.......................................... 62
SECTION 11.07. Entire Agreement............................................. 62
SECTION 11.08. Assignment ............................................. 62
SECTION 11.09. No Third-Party Beneficiaries................................. 62
SECTION 11.10. Amendment; Waiver............................................ 63
SECTION 11.11. Governing Law ............................................. 63
SECTION 11.12. Counterparts ............................................. 63
SECTION 11.13. Parties in Interest.......................................... 63
SECTION 11.14. Actions and Proceedings...................................... 63
SECTION 11.15. Confidentiality ............................................. 63
<PAGE>
-v-
EXHIBITS
1.01(a) [INTENTIONALLY OMITTED]
1.01(b) Form of Assumption Agreement
1.01(c) Form of Bill of Sale and Assignment
1.01(d) Form of St. Louis Facility Lease
1.01(e) St. Louis Restructuring Plan
2.01(d) Form of San Leandro Lease
2.03(b) Allocation of Purchase Price
5.17 Trade Working Capital Budget
6.07 Steelworker Letter Agreement
8.01(g) Form of Opinion of Winthrop, Stimson, Putnam & Roberts
8.01(h) Form of Tolling Agreement
8.01(i) Form of Container Supply Agreement
8.02(h) Form of Opinion of Shearman & Sterling
8.02(i) Required Consents
8.02(j) Form of Non-Competition Agreement
8.02(k)(i) Form of Neenah Transition Services Agreement
8.02(k)(ii) Form of Chicago Transition Services Agreement
SCHEDULES
1.01 St. Louis Assets
2.01(a) Transferred Assets
2.01(c) Licensed Intellectual Property
2.01(f) Excluded Assets
2.02(a) Closing Date Assumed Liabilities
4.02 Purchaser Conflicts
4.04 Purchaser Consents and Approvals
6.02 Employees
<PAGE>
-vi-
DISCLOSURE SCHEDULE
The Disclosure Schedule shall include the following Sections:
3.01 Foreign Qualifications
3.02 No Conflict
3.03 Consents and Approvals
3.04 Financial Statements
3.05 Litigation
3.06 Permits and Licenses; Compliance with Laws
3.07 Conduct in the Ordinary Course; Absence of Changes or Events
3.08 Material Contracts
3.09 Employee Matters
3.10 Environmental Matters
3.11 Intellectual Property
3.12 Assets
3.13 Real Property
3.15 Labor Matters
3.16 Taxes
3.17 Lockboxes; Safe Deposit Boxes; Powers of Attorney
3.18 Transactions with Affiliates
3.19 Suppliers and Customers
5.01 Conduct of the Business Prior to the Closing
6.02 Seller's Plans
ANNEXES
A Locations
<PAGE>
ASSET PURCHASE AGREEMENT, dated as of June 2, 1995, between
AMERICAN NATIONAL CAN COMPANY, a Delaware corporation (the "Seller"), and SILGAN
CONTAINERS CORPORATION, a Delaware corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller, through its unincorporated Food Metal and
Specialty division, is engaged in, among other things, the business of
designing, developing, manufacturing, marketing and selling metal food
containers, rigid plastic food containers and metal caps and closures as such
business is currently being conducted at the locations specified in Annex A
hereto (the "Business"); and
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, the Business, including, without
limitation, all right, title and interest of the Seller in and to certain
properties and assets of the Business, and in connection therewith, the
Purchaser is willing to assume certain liabilities of the Seller relating to the
Business, all upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements and covenants hereinafter set forth, the Seller and the
Purchaser hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Adjusted Working Capital" means the excess of (a) the current
assets included in the Assets over (b) the Closing Date Assumed Liabilities
(excluding the first $22.5 million of Closing Date Benefit Liabilities), as
shown on the Estimated Closing Balance Sheet or the Closing Balance Sheet, as
the case may be.
"Affiliate" means, with respect to any specified person, any
other person that directly or indirectly controls, is controlled by, or is under
common control with, such specified person.
"Agreement" means this Asset Purchase Agreement, dated as of
June 2, 1995, between the Seller and the Purchaser (including the Annex,
Exhibits and Schedules hereto
<PAGE>
2
and the Disclosure Schedule) and all amendments hereto made in accordance with
the provisions of Section 11.10.
"ANC Severance Policy" has the meaning specified in Section
6.01(a).
"ANC Severance Policy Circumstances" has the meaning
specified in Section 6.01(a).
"Ancillary Agreements" means the Assumption Agreement, the
Bill of Sale and the Deeds.
"Assets" means the Transferred Assets, the Shares, the
Licensed Intellectual Property and the St. Louis Assets.
"Assumed Liabilities" means the Closing Date Assumed
Liabilities and, following their assumption by the Purchaser in accordance with
Section 2.01(e), the St. Louis Benefit Liabilities.
"Assumption Agreement" means the Assumption Agreement to be
executed by the Purchaser and the Seller on the Closing Date substantially in
the form of Exhibit 1.01(b).
"Audited Financial Statements" has the meaning specified in
Section 3.04(a).
"Bill of Sale" means the Bill of Sale and Assignment to be
executed by the Seller on the Closing Date substantially in the form of Exhibit
1.01(c).
"Business" has the meaning specified in the recitals to this
Agreement.
"Business Day" means a day of the year on which banks are not
required or authorized to be closed in the City of New York.
"Business Employees" has the meaning specified in Section
6.01(c).
"Cash Amount" has the meaning specified in Section 2.03(a).
"Closing" has the meaning specified in Section 2.04.
"Closing Balance Sheet" means the audited balance sheet
(including the related notes and schedules thereto) of the Business, to be
prepared as at the Closing Date pursuant to Section 2.08, which balance sheet
shall include an unaudited footnote setting forth the Closing Date Benefit
Liabilities.
<PAGE>
3
"Closing Date" has the meaning specified in Section 2.04.
"Closing Date Assumed Liabilities" has the meaning specified
in Section 2.02(a).
"Closing Date Benefit Liabilities" means the post-retirement
medical and life benefit liabilities (computed on an actuarial basis, using the
same set of assumptions currently used by the Seller, in accordance with
Statement of Financial Accounting Standards No. 106) included in the Closing
Date Assumed Liabilities.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rulings and regulations promulgated thereunder.
"Confidentiality Agreement" has the meaning specified in
Section 5.05.
"control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, or as
trustee or executor, of the power to direct or cause the direction of the
management policies of a person whether through the ownership of stock, as
trustee or executor, by contract or credit agreement or otherwise.
"Corporate Employees" has the meaning specified in Section
6.04.
"Deeds" means the special warranty deeds to be executed by the
Seller on the Closing Date in order to convey to the Purchaser each parcel of
Owned Real Property.
"Defined Contribution Plans" has the meaning specified in
Section 6.02(c).
"Disclosure Schedule" means the Disclosure Schedule dated as
of the date hereof, delivered to the Purchaser by the Seller.
"Edison Plant" has the meaning specified in Section 5.08(a).
"Encumbrance" means a pledge, lien (other than tax liens for
Taxes not yet due and payable), security interest, mortgage, deed of trust,
charge, adverse claim of ownership or use, contractual restriction or other
encumbrance of any kind.
"Environmental Law" means any federal, state or local statute,
law, ordinance, regulation, rule, code, order or other requirement or rule of
law and any enforceable judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to pollution or protection of the environment or natural resources,
including without limitation those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.
<PAGE>
4
"Environmental Permits" means any permit, approval,
identification number, license and other authorization required under any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rulings and regulations promulgated thereunder.
"Estimated Closing Balance Sheet" means the unaudited balance
sheet of the Business as of a date not more than five (5) Business Days before
the Closing Date, prepared in good faith by the Seller in accordance with
Modified U.S. GAAP, which Estimated Closing Balance Sheet shall be reasonably
acceptable to the Purchaser as having been prepared in accordance with Modified
U.S. GAAP applied on a basis consistent with the preparation of the Audited
Financial Statements, which balance sheet shall include an unaudited footnote
setting forth the Seller's best estimate of the Closing Date Benefit
Liabilities.
"Excluded Assets" has the meaning specified in Section
2.01(f).
"Excluded Liabilities" has the meaning specified in Section
2.02(b).
"Financial Statements" has the meaning specified in Section
3.04(a).
"French Government Approval" has the meaning specified in
Section 3.03(a).
"Governmental Antitrust Authority" has the meaning specified
in Section 5.06(b)(i).
"Hazardous Materials" means (a) petroleum and petroleum
products, byproducts or breakdown products, radioactive materials, asbestos
containing materials and polychlorinated biphenyls, and (b) any other chemicals,
materials, or substances defined or regulated as toxic or hazardous or as a
pollutant or contaminant or as a waste under any applicable Environmental Law.
"Hourly Business Employees" has the meaning specified in
Section 6.01(b).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
"Independent Accounting Firm" has the meaning specified in
Section 2.08(c)(ii).
"Intellectual Property" has the meaning specified in Section
3.11.
<PAGE>
5
"Interest Rate" has the meaning specified in Section 2.08(e).
"ISRA" has the meaning specified in Section 5.08(a).
"Leased Real Property" means the real property leased by the
Seller as tenant, and used in connection with the operation of the Business, as
described in the Leases, together with, to the extent leased by the Seller, all
buildings and other structures, facilities or improvements currently or
hereafter located thereon, all fixtures, systems, equipment and items of
personal property of the Seller attached or appurtenant thereto, and all
easements, licenses, rights and appurtenances relating to the foregoing.
"Leases" means the leases and subleases listed in Section 3.13
of the Disclosure Schedule under which the Seller is tenant or subtenant (as the
case may be).
"Liabilities" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured or determined or determinable, including, without limitation, those
arising under any law, action or governmental order and those arising under any
contract, agreement, arrangement, commitment or undertaking.
"License Agreement" has the meaning specified in Section
2.01(c).
"Licensed Intellectual Property" has the meaning specified in
Section 2.01(c).
"Material Adverse Effect" means any change in, or effect on,
the Business as currently conducted by the Seller that is or is reasonably
likely to be materially adverse to the assets, liabilities, results of
operations or the financial condition of the Business, taken as a whole, after
giving effect to this Agreement and the transactions contemplated hereby.
"Material Contracts" has the meaning specified in Section
3.08.
"Modified U.S. GAAP" means United States generally accepted
accounting principles, except that an allocated portion of the purchase price
and related expenses incurred by Pechiney Corporation to acquire the Seller
together with the resultant goodwill related to the business and amortization
thereof, are not included in the financial statements of the Business.
"Multiemployer Plan" has the meaning specified in Section
3.09(b).
"NJDEP" has the meaning specified in Section 5.08(a).
"NJDEP Approval" has the meaning specified in Section 5.08(a).
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6
"Owned Real Property" means the real property owned by the
Seller, and used in connection with the Business, as listed in Section 3.13 of
the Disclosure Schedule, together with all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all fixtures,
systems, equipment and items of personal property of the Seller used in the
Business attached or appurtenant thereto and all easements, licenses, rights and
appurtenances relating to the foregoing.
"Performance Plans" has the meaning specified in Section 6.03.
"Permitted Encumbrances" has the meaning specified in Section
3.13.
"person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
"Plans" has the meaning specified in Section 3.09(a).
"Property" means the Owned Real Property, the Leased Real
Property and the real property that is the subject of the St. Louis Facility
Lease and the San Leandro Lease.
"Purchase Price" has the meaning specified in Section 2.03(a).
"Purchaser" has the meaning specified in the preamble to this
Agreement.
"Purchaser Damages" has the meaning specified in Section
9.03(a).
"Purchaser's Accountants" means Ernst & Young LLP.
"Receivables" means any and all accounts receivable, notes and
other amounts receivable owing to the Seller from third parties arising from the
conduct of the Business before the Closing Date.
"Required Permits" has the meaning specified in Section
3.06(a).
"Returns" has the meaning specified in Section 7.01.
"St. Louis Assets" means the assets of the Seller as set
forth in Schedule 1.01 that will be located, and used in connection with the
operation of the Business at, the St. Louis Facility following the completion of
the St. Louis Restructuring.
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7
"St. Louis Benefit Liabilities" means the post-retirement
medical and life benefit liabilities (computed on an actuarial basis in
accordance with Statement of Financial Accounting Standards No. 106 and using
the same set of assumptions used in calculating the Closing Date Benefit
Liabilities) relating to the St. Louis Employees.
"St. Louis Closing" has the meaning specified in Section
2.01(e).
"St Louis Closing Date" has the meaning specified in Section
2.01(e).
"St. Louis Employees" means the employees to be employed at
the St. Louis Facility after the St. Louis Restructuring.
"St. Louis Facility" means the real property described in
Exhibit 1.01(e) to be used in connection with the operation of the Business in
St. Louis, Missouri following completion of the St. Louis Restructuring.
"St. Louis Facility Lease" means the lease, substantially in
the form of Exhibit 1.01(d), to which the Seller will be a party, as tenant, for
the St. Louis Facility following the completion of the St. Louis Restructuring,
or, in the event that the sale and lease-back of the St. Louis Facility
contemplated by Exhibit 1.01(e) is not completed by the time the St. Louis
Restructuring is completed, the "St. Louis Facility Lease" shall mean the lease,
substantially in the form of Exhibit 1.01(d), for the St. Louis Facility to be
entered into at the St. Louis Closing between the Seller, as landlord, and the
Purchaser, as tenant, which lease will be assigned by the Seller to the
purchaser of the St. Louis Facility upon the completion of the sale of the St.
Louis Facility.
"St. Louis Payment" means $7.4 million plus simple interest
from the Closing Date through the St. Louis Closing Date at the Interest Rate.
"St. Louis Rationalization Costs" means the actual costs
incurred by the Seller from the date hereof to the St. Louis Closing in
rationalizing the employees of the Business at the St. Louis Facility identified
in Exhibit 1.01(e) as pension plan curtailment costs, group insurance, S.U.B.
and severance costs, it being understood that the pension plan curtailment costs
resulting from such rationalization shall be valued as of the St. Louis Closing
Date on a present value, actuarial basis using the same set of assumptions
currently used by the Seller.
"St. Louis Restructuring" means the reorganization of the
Seller's Business and other operations in St. Louis, Missouri to be carried out
substantially in the manner set forth in Exhibit 1.01(e); provided, however,
that the sale and lease-back of the St. Louis Facility contemplated by Exhibit
1.01(e) shall not be part of the St. Louis Restructuring.
"Salaried Business Employees" has the meaning specified in
Section 6.01(a).
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8
"San Leandro Lease" has the meaning specified in Section
2.01(d).
"Seller" has the meaning specified in the preamble to this
Agreement.
"Seller Damages" has the meaning specified in Section 9.02(a).
"Seller's Accountants" means Price Waterhouse LLP.
"Seller's Plans" has the meaning specified in Section 6.02(h).
"Shares" has the meaning specified in Section 2.01(b).
"Subsidiary" has the meaning specified in Section 2.01(b).
"Tax" or "Taxes" means all taxes of any kind whatsoever
(whether payable directly or by withholding), together with any interest and
penalties or additions to tax imposed by any taxing authority.
"Title Company" means First American Title Insurance Company.
"Tolling Agreement" has the meaning specified in Section
8.01(h).
"Transferred Assets" has the meaning specified in Section
2.01(a).
"Transferred Employees" has the meaning specified in Section
6.01(d).
"Transferred Hourly Employees" has the meaning specified in
Section 6.01(b).
"Transferred Salaried Employees" has the meaning specified in
Section 6.01(a).
"Union Employees" has the meaning specified in Section
6.07(a).
"U.S. GAAP" means United States generally accepted accounting
principals and practices as in effect from time to time and applied consistently
throughout the periods involved.
<PAGE>
9
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Assets to Be Sold; Etc. (a) Transferred Assets.
On the terms and subject to the conditions of this Agreement and in reliance
upon the representations and warranties contained herein, the Seller shall, on
the Closing Date, sell, assign, transfer, convey and deliver to the Purchaser or
cause to be sold, assigned, transferred, conveyed and delivered to the
Purchaser, and the Purchaser shall purchase from the Seller, on the Closing
Date, all of the Seller's right, title and interest in and to the assets and
properties of the Seller pertaining to the Business as set forth on Schedule
2.01(a) (the "Transferred Assets"), free and clear of all Encumbrances other
than Permitted Encumbrances.
(b) Transfer of Shares. Immediately prior to the Closing, the
Seller will transfer to a California corporation to be organized and wholly
owned by the Seller (the "Subsidiary"), all of the Seller's right, title and
interest in and to the Assets located in the States of California and
Washington. For all purposes hereunder, Assets shall include all of the issued
and outstanding shares of capital stock of the Subsidiary (the "Shares"). On the
terms and subject to the conditions of this Agreement and in reliance on the
representations and warranties contained herein, the Seller shall, on the
Closing Date, sell, assign, transfer, convey and deliver to the Purchaser, and
the Purchaser shall purchase from the Seller, on the Closing Date, all of the
Seller's right, title and interest in and to the Shares.
(c) License Agreement. On the Closing Date, the Seller and the
Purchaser shall enter into a license agreement (the "License Agreement"),
pursuant to which the Seller will license to the Purchaser the Intellectual
Property listed in Schedule 2.01(c) (the "Licensed Intellectual Property") on
terms substantially consistent with those set forth in Schedule 2.01(c).
(d) San Leandro Lease. On the Closing Date, the Seller and the
Purchaser shall enter into a lease, substantially in the form of Exhibit 2.01(d)
(the "San Leandro Lease"), pursuant to which the Seller will lease to the
Purchaser certain real property located in San Leandro, California.
(e) Delayed Delivery of St. Louis Assets and St. Louis
Facility. At any time following the completion of the St. Louis Restructuring,
upon not less than twenty Business Days' notice to the other party, (i) the
Purchaser may require the Seller to transfer to the Purchaser, in consideration
of the St. Louis Payment plus the St. Louis Rationalization Costs, all of the
Seller's right, title and interest in and to the St. Louis Assets and to assign
to the Purchaser or enter into, as the case may be, the St. Louis Facility Lease
or (ii) the Seller may require the Purchaser to purchase from the Seller, in
consideration of the St. Louis Payment plus the St. Louis Rationalization Costs,
all of the Seller's right, title and
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10
interest in and to the St. Louis Assets and to assume from the Seller or enter
into, as the case may be, the St. Louis Facility Lease. On the date (the "St.
Louis Closing Date") and at the place specified in the notice given pursuant to
this Section 2.01(e), a closing (the "St. Louis Closing") shall be held, at
which, on the terms of this Agreement and in reliance upon the representations
and warranties contained herein, the Seller shall sell to the Purchaser, and the
Purchaser shall purchase from the Seller, all of the Seller's right, title and
interest in and to the St. Louis Assets and the Seller shall assign to the
Purchaser, and the Purchaser shall assume from the Seller, the St. Louis
Facility Lease (or, in the event that the sale of the St. Louis Facility
contemplated by the St. Louis Restructuring is not then completed, the Seller
and the Purchaser shall enter into the St. Louis Facility Lease); provided,
however, that the Purchaser shall have no obligation to the Seller pursuant to
this Section 2.01(e) if the St. Louis Closing shall not have occurred by
December 31, 1996. In addition, on the St. Louis Closing Date, on the terms of
this Agreement and in reliance upon the representations and warranties contained
herein, the Purchaser shall assume, and thereafter pay, perform and discharge
when due the St. Louis Benefit Liabilities. From and after the St. Louis
Closing, the Purchaser shall assume the obligation to provide group insurance
and S.U.B. benefits to the St. Louis Employees to the extent that the sum of
such group insurance and S.U.B. benefits plus the St. Louis Rationalization
Costs does not exceed $7.8 million. The Seller shall indemnify the Purchaser for
any amounts by which such group insurance and S.U.B. benefits plus the St. Louis
Rationalization Costs exceed $7.8 million.
(f) Excluded Assets. The Assets shall exclude the following
assets owned by the Seller (the "Excluded Assets"):
(i) all cash, cash equivalents and bank accounts pertaining
to the Business at the Closing Date;
(ii) all assets that are used by the Seller both in the
conduct of the Business and in other operations of the Seller, only
as set forth in Schedule 2.01(f);
(iii) all assets not used by or held for use by the Business
as it is currently being conducted, including all such assets located
at closed facilities of the Business;
(iv) all long-term notes receivable of the Business;
(v) any Tax refund arising out of the Business for any
period or portion thereof ending on or before the Closing Date;
(vi) all insurance policies of the Seller pertaining to the
Business (including proceeds under such policies from claims incurred
prior to the Closing);
(vii) the Seller's container supply contracts with the San
Tomo Group;
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11
(viii) the "American National Can" name and all related
trademarks, tradenames and logos;
(ix) the Seller's development agreement, dated March 31,
1978, with Chemplex Company (now known as Quantum);
(x) the Seller's Contract of Sale, dated May 12, 1978, with
Exxon Chemical Company U.S.A.; and
(xi) all rights of the Seller under this Agreement and the
Ancillary Agreements.
(g) In the event that due to circumstances beyond the control
of the Seller and the Purchaser, the Seller is unable, at the Closing, to convey
to the Purchaser all of the Assets (other than the St. Louis Assets) in
accordance with this Agreement, the Seller and the Purchaser agree that such
Assets (including related trade working capital) which the Seller is unable so
to convey shall be Excluded Assets and the Cash Amount shall be reduced by the
amount allocated to such Assets (other than trade working capital) in accordance
with Exhibit 2.03(b); provided, however, that if the aggregate amount allocated
to such Assets (other than trade working capital) exceeds $17.5 million, then
the Seller and the Purchaser shall not be required to treat such Assets (and the
related trade working capital) as Excluded Assets. In the event that Assets (and
the related trade working capital) are treated as Excluded Assets pursuant to
this Section 2.01(g), the Seller and the Purchaser agree to negotiate in good
faith such amendments to this Agreement as may be appropriate in order to carry
out the intent of the parties in treating such Assets (and the related working
capital) as Excluded Assets. Such amendments may include, but not be limited to,
(i) amendments necessary to exclude from the Assumed Liabilities the Liabilities
that relate to the Assets being treated as Excluded Assets pursuant to this
Section 2.01(g) and (ii) amendments to Article VI necessary to reflect the
employee matters related to this Section 2.01(g).
(h) Following the Closing, until December 31, 1997, the
Purchaser agrees to sell to the Seller all steel required by the Seller for the
operation of the assets that are Excluded Assets by virtue of Section 2.01(g).
The Purchaser shall sell such steel to the Seller at the Purchaser's cost and on
terms representative of those of the Purchaser. This Section 2.01(h) may be
terminated by the Seller at any time upon not less than 90 days' written notice
to the Purchaser and may be extended by the Seller for a period of up to one
year. This Section 2.01(h) shall not be assignable by the Seller.
SECTION 2.02. Assumption and Exclusion of Liabilities. (a)
On the terms and subject to the conditions of this Agreement and in reliance
upon the representations and warranties contained herein, the Purchaser shall,
on the Closing Date, assume and shall,
<PAGE>
12
thereafter, pay, perform and discharge when due the Liabilities of the Seller as
at the Closing Date set forth in Schedule 2.02(a) (the "Closing Date Assumed
Liabilities").
(b) Except for the Closing Date Assumed Liabilities to be
assumed by the Purchaser on the Closing Date, the Seller shall, subject to
Section 2.01(e), retain, and shall be responsible for paying, performing and
discharging when due, and the Purchaser shall not assume or have any
responsibility for, all other Liabilities of the Seller arising out of or
relating to the Business as of the Closing Date (the "Excluded Liabilities").
SECTION 2.03. Purchase Price; Allocation of Purchase Price.
(a) In addition to the assumption by the Purchaser of the Assumed Liabilities,
subject to the adjustments set forth in Section 2.08 hereof, the aggregate
purchase price for the Assets (the "Purchase Price") shall be (i) $186 million
(the "Cash Amount") plus (ii) the Adjusted Working Capital as shown on the
Estimated Closing Balance Sheet.
(b) The Purchase Price and the Assumed Liabilities shall be
allocated among the Assets as of the Closing Date in accordance with Exhibit
2.03(b). Any subsequent adjustments to the sum of the Purchase Price and Assumed
Liabilities shall be reflected in the allocation hereunder in a manner
consistent with Treasury Regulation ss. 1.1060-IT(f) and as agreed to by the
Purchaser and the Seller. For all Tax purposes the Purchaser and the Seller
agree to report the transactions contemplated in this Agreement in a manner
consistent with the terms of this Agreement, including the allocation under
Exhibit 2.03(b), and that neither of them will take any position inconsistent
therewith in any Tax return, in any refund claim, in any litigation or
otherwise. Each of the Seller and the Purchaser agrees to cooperate with each
other in preparing Form 8594 for filing by each and to furnish the other with a
copy of such Form prepared in draft within a reasonable period before its filing
due date.
SECTION 2.04. Closing. Subject to the terms and conditions of
this Agreement, the sale and purchase of the Transferred Assets, the assumption
of the Closing Date Assumed Liabilities and the transactions contemplated by
Sections 2.01(b), 2.01(c) and 2.01(d) shall take place at a closing (the
"Closing") at the offices of Shearman & Sterling, 599 Lexington Avenue, New
York, New York at 10:00 a.m., local time, on the Business Day following the
later to occur of (a) June 30, 1995 and (b) the fifth Business Day following the
later to occur of (i) the expiration or termination of all applicable waiting
periods under the HSR Act and (ii) the satisfaction or waiver of all other
conditions to the obligations of the parties set forth in Article VIII, or at
such other time or on such other date or at such other place as the Seller and
the Purchaser may mutually agree (the day on which the Closing takes place being
the "Closing Date").
SECTION 2.05. Closing Deliveries by the Seller. At the
Closing, the Seller shall deliver or cause to be delivered to the Purchaser:
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13
(a) the Bill of Sale, the Deeds and such other endorsements,
certificates of title, assignments and other good and sufficient
instruments of conveyance and transfer as may be reasonably requested
by the Purchaser in order to vest in the Purchaser good, valid and, in
the case of Owned Real Property, insurable, title to the Transferred
Assets in accordance herewith;
(b) stock certificates evidencing all of the Shares,
accompanied by stock powers duly executed in blank by the Seller and
with all required stock transfer tax stamps affixed;
(c) an executed counterpart of the Assumption Agreement;
(d) an executed counterpart of the License Agreement;
(e) an executed counterpart of the San Leandro Lease;
(f) a receipt for the Purchase Price less the St. Louis
Payment; and
(g) the certificates and other documents required to be
delivered pursuant to Section 8.02.
SECTION 2.06. Closing Deliveries by the Purchaser. At the
Closing, the Purchaser shall deliver to the Seller:
(a) the Purchase Price less the St. Louis Payment in cash
by wire transfer in immediately available funds to an account
designated in writing by the Seller to the Purchaser at least two
Business Days prior to the Closing Date;
(b) an executed counterpart of the Assumption Agreement;
(c) an executed counterpart of the License Agreement;
(d) an executed counterpart of the San Leandro Lease; and
(e) the certificates and other documents required to be
delivered pursuant to Section 8.01.
SECTION 2.07. St. Louis Closing. (a) At the St. Louis Closing,
the Seller shall deliver or cause to be delivered to the Purchaser:
<PAGE>
14
(i) such instruments of conveyance, transfer and
assignment as may be reasonably requested by the Purchaser in order to
vest in the Purchaser good and valid title to the St. Louis Assets;
(ii) an executed counterpart of the St. Louis Facility
Lease, or an assignment of the St. Louis Facility Lease, as the case
may be;
(iii) an executed counterpart of an assumption agreement
pursuant to which the Purchaser shall assume the St. Louis Benefit
Liabilities; and
(iv) a receipt for the St. Louis Payment plus the St.
Louis Rationalization Costs (including the actuarial present value of
the pension plan curtailment costs).
(b) At the St. Louis Closing, the Purchaser shall deliver
or cause to be delivered to the Seller:
(i) the St. Louis Payment plus the St. Louis
Rationalization Costs (including the actuarial present value of the
pension plan curtailment costs) in cash by wire transfer in immediately
available funds to an account designated in writing by the Seller to
the Purchaser at least two Business Days prior to the St. Louis Closing
Date;
(ii) an executed counterpart of the St. Louis Facility
Lease, or an assignment of the St. Louis Facility Lease, as the case
may be; and
(iii) an executed counterpart of an assumption agreement
pursuant to which the Purchaser shall assume the St. Louis Benefit
Liabilities.
SECTION 2.08. Adjustment of Purchase Price. The Purchase
Price shall be subject to adjustment after the Closing as specified in this
Section 2.08:
(a) Closing Balance Sheet. As promptly as practicable, but in
any event within forty-five calendar days following the Closing Date,
the Seller shall deliver to the Purchaser the Closing Balance Sheet,
together with the report thereon of the Seller's Accountants, stating
that the Closing Balance Sheet fairly presents the financial position
of the Business and the Adjusted Working Capital at the Closing Date in
conformity with Modified U.S. GAAP applied on a basis consistent with
the preparation of the Audited Financial Statements.
(b) Cooperation. During the preparation of the Closing
Balance Sheet by the Seller and the period of any dispute provided for
in Section 2.08(c), the Purchaser shall provide the Seller and the
Seller's Accountants reasonable access to the books,
<PAGE>
15
records, facilities and employees of the Business, and the Purchaser
shall cooperate with the Seller's Accountants, in each case to the
extent required by the Seller and the Seller's Accountants in order to
prepare the Closing Balance Sheet or to investigate the basis for any
such dispute; provided, however, that any such access or investigation
shall not unreasonably interfere with the businesses or operations of
the Purchaser. In connection with the Purchaser's review of the Closing
Balance Sheet, the Purchaser and the Purchaser's Accountants shall be
given reasonable access to the books, records, facilities and employees
of the Seller, and, if the Purchaser executes a customary hold harmless
agreement in respect thereof, to the records and working papers of the
Seller's Accountants.
(c) Disputes. (i) Subject to clause (ii) of this Section
2.08(c), the Closing Balance Sheet delivered by the Seller to the
Purchaser shall be, and shall be deemed to be, final, conclusive and
binding on the parties hereto.
(ii) The Purchaser may dispute any amounts reflected on the
Closing Balance Sheet but only on the basis that the amounts reflected
thereon were not arrived at in accordance with Modified U.S. GAAP
applied on a basis consistent with the preparation of the Financial
Statements; provided, however, that the Purchaser shall have notified
the Seller in writing of each disputed item, specifying the amount
thereof in dispute and setting forth, in reasonable detail, the basis
for such dispute, within twenty Business Days of the date that the
Closing Balance Sheet shall have been given to the Purchaser in
accordance with Section 11.02. In the event of such a dispute, the
Seller and the Purchaser shall attempt to resolve their differences in
good faith and any such resolution by them as to any such disputes
shall be final, binding and conclusive on the parties hereto. If any
such differences cannot be so resolved within ten Business Days after
receipt by the Seller of the Purchaser's written notice of dispute, the
Seller and the Purchaser shall submit the items remaining in dispute
for resolution to the Seller's Accountants and the Purchaser's
Accountants, who shall attempt to reconcile the remaining differences
in good faith, and any resolution by them as to any such remaining
disputes shall be final, binding and conclusive on the parties hereto.
If the Seller's Accountants and the Purchaser's Accountants are unable
to resolve all such remaining disputes within twenty Business Days
after submission to them of such items remaining in dispute, the Seller
and the Purchaser shall submit the items remaining in dispute for
resolution to Arthur Andersen LLP (or, if such firm shall decline or is
unable to act or is not, at the time of such submission, independent of
the Seller and the Purchaser, to another independent accounting firm of
international reputation mutually acceptable to the Seller and the
Purchaser) (either Arthur Andersen LLP or such other accounting firm
being referred to herein as the "Independent Accounting Firm"), which
shall, within thirty Business Days after such submission, determine and
report to the Seller and the Purchaser upon such remaining disputed
items, and such report shall be final, binding and conclusive on the
Seller
<PAGE>
16
and the Purchaser. The fees and disbursements of the Independent
Accounting Firm shall be allocated between the Seller and the Purchaser
in the same proportion that the aggregate amount of such remaining
disputed items so submitted to the Independent Accounting Firm that is
unsuccessfully disputed by each such party (as finally determined by
the Independent Accounting Firm) bears to the total amount of such
remaining disputed items so submitted.
(iii) In acting under this Agreement, the Seller's
Accountants, the Purchaser's Accountants and the Independent Accounting
Firm shall be entitled to the privileges and immunities of arbitrators.
(d) Purchase Price Adjustment. The Closing Balance Sheet shall
be deemed final, binding and conclusive on the parties for the purposes
of this Section 2.08 upon the earlier of (A) the failure of the
Purchaser to notify the Seller of a dispute within twenty Business Days
of the date that the Closing Balance Sheet shall have been given to the
Purchaser in accordance with Section 11.02 and (B) the resolution of
all disputes in accordance with Section 2.08(c). Within three Business
Days of the Closing Balance Sheet being deemed final, a Purchase Price
adjustment shall be made as follows:
(i) in the event that the Adjusted Working Capital
reflected on the Estimated Closing Balance Sheet exceeds the
Adjusted Working Capital reflected on the Closing Balance
Sheet, then the Purchase Price shall be adjusted downward in
an amount equal to such excess, and the Seller shall pay such
amount to the Purchaser by wire transfer in immediately
available funds; and
(ii) in the event that the Adjusted Working Capital
reflected on the Closing Balance Sheet exceeds the Adjusted
Working Capital reflected on the Estimated Closing Balance
Sheet, then the Purchase Price shall be adjusted upward in an
amount equal to such excess, and the Purchaser shall pay the
amount of such excess to the Seller by wire transfer in
immediately available funds.
(e) Interest Rate. Any payment to be made by the Seller or the
Purchaser pursuant to Section 2.08(d) shall bear simple interest from
the Closing Date through the date of payment at the rate of interest
publicly announced by Citibank, N.A. or any successor thereto in New
York, New York from time to time as its prime lending rate (the
"Interest Rate") from the Closing Date through the date of such
payment.
SECTION 2.09. Post-St. Louis Closing Adjustment of Purchase
Price. As promptly as practicable following the St. Louis Closing, the Seller
shall, in consultation with the Purchaser, calculate the St. Louis Benefit
<PAGE>
17
Liabilities and shall deliver such calculation to the Purchaser. Within five
Business Days of the date that such calculation shall have been given to the
Purchaser in accordance with Section 11.02, a Purchase Price Adjustment shall be
made as follows:
(a) In the event that the sum of the Closing Date Benefit
Liabilities plus the St. Louis Benefit Liabilities is less than or
equal to $25 million and the Closing Date Benefit Liabilities exceed
$22.5 million, then the Purchase Price shall be adjusted upward in an
amount equal to such excess, and the Purchaser shall pay such amount to
the Seller by wire transfer in immediately available funds.
(b) In the event that the sum of the Closing Date Benefit
Liabilities plus the St. Louis Benefit Liabilities exceeds $25 million
(the amount of such excess being the "Adjustment Amount"), then:
(i) in the event that the Closing Date Benefit
Liabilities are less than $22.5 million, then the Purchase
Price shall be adjusted downward in an amount equal to the
Adjustment Amount, and the Seller shall pay such amounts to
the Purchaser in immediately available funds; or
(ii) in the event that the Closing Date Benefit
Liabilities exceed $22.5 million (the amount of such excess
being the "Closing Excess"), then:
(A) in the event that the Adjustment Amount
exceeds the Closing Excess, the Purchase Price shall
be adjusted downward in an amount equal to such
excess, and the Seller shall pay such amount to the
Purchaser by wire transfer in immediately available
funds; and
(B) in the event that the Closing Excess
exceeds the Adjustment Amount, then the Purchase
Price shall be adjusted upward in an amount equal to
such excess, and the Purchaser shall pay such amount
to the Seller by wire transfer in immediately
available funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser as
follows:
SECTION 3.01. Incorporation and Authority of the Seller. The
Seller is a corporation duly incorporated, validly existing and in good standing
under the laws of the
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18
State of Delaware and has all necessary corporate power and authority to enter
into this Agreement and the Ancillary Agreements, to carry out and perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The Seller is qualified as a foreign
corporation and is in good standing in the jurisdictions listed in Section 3.01
of the Disclosure Schedule which are the only jurisdictions where the nature of
the Business and the Assets require such qualification, except where the failure
to be so licensed or qualified would not have a Material Adverse Effect. The
execution and delivery by the Seller of this Agreement and the other agreements,
documents and instruments contemplated hereby, the consummation by the Seller of
the transactions contemplated hereby and thereby and the performance by the
Seller of its obligations hereunder and thereunder have been duly and validly
authorized by all necessary corporate action, including, without limitation, all
necessary shareholder action. This Agreement has been, and the Ancillary
Agreements will be, duly executed and delivered by the Seller, and (assuming due
authorization, execution and delivery by the Purchaser) this Agreement
constitutes, and, upon its execution each Ancillary Agreement will constitute,
the legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms.
SECTION 3.02. No Conflict. Assuming (i) that all consents,
approvals, authorizations and other actions described in Section 3.03 have been
obtained, (ii) that all filings and notifications listed in Section 3.03 of the
Disclosure Schedule have been made and (iii) that all material consents,
authorizations and other actions of any third parties required to conduct the
Business have been obtained prior to the Closing, and except as may result from
any facts or circumstances relating solely to the Purchaser, the execution,
delivery and performance of this Agreement and the Ancillary Agreements by the
Seller, and the consummation of the transactions contemplated hereby and
thereby, do not and will not (a) violate or conflict with the Certificate of
Incorporation or By-laws of the Seller, (b) except as would not prevent the
Seller from performing in all material respects its obligations hereunder and
under the Ancillary Agreements, conflict with or violate any material law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to the Seller, the Business, any of the Assets or any of the Assumed
Liabilities or (c) except as would not prevent the Seller from performing in all
material respects its obligations hereunder and under the Ancillary Agreements
or as described in Section 3.02 of the Disclosure Schedule, violate or conflict
with, or result in any breach of, or constitute a default (or event which with
the giving of notice or lapse of time, or both, would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Encumbrance on any of the
Assets pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument relating to any of the
Assets or the Assumed Liabilities or by which any of such Assets or the Assumed
Liabilities is bound or affected.
SECTION 3.03. Consents and Approvals. (a) The execution and
delivery of this Agreement and the Ancillary Agreements by the Seller do not,
and the performance by
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19
the Seller of its obligations under this Agreement and the Ancillary Agreements
and the consummation of the transactions contemplated hereby and thereby will
not, require any consent, approval, authorization or other action by, or filing
with or notification to, any governmental or regulatory authority, except (i) as
described in Section 3.03(a) of the Disclosure Schedule, (ii) the notification
requirements of the HSR Act, (iii) the approval of the French Ministry for
Finance and Economic Affairs (the "French Government Approval"), (iv) where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent the Seller from performing in all
material respects its obligations under this Agreement and the Ancillary
Agreements and (v) as may be necessary as a result of any facts or circumstances
relating solely to the Purchaser.
(b) The execution and delivery of this Agreement and the
Ancillary Agreements by the Seller do not, and the performance by the Seller of
its obligations under this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby will not,
require any third party consents, approvals, authorizations, notices or actions
on the part of the Seller, except (i) as described in Section 3.03(b) of the
Disclosure Schedule or (ii) where failure to obtain such consents, approvals,
authorizations or actions would not prevent the Seller from performing any of
its material obligations under this Agreement and the Ancillary Agreements. The
Seller and the Purchaser shall cooperate with each other in obtaining each of
such third party consents, approvals, authorizations or actions on reasonable
terms and conditions to the Purchaser; provided, however, that neither the
Purchaser nor the Seller shall be obligated to make any payments to third
parties in order to obtain such consents, approvals, authorizations or actions.
SECTION 3.04. Financial Statements. (a) Attached as Section
3.04(a) of the Disclosure Schedule are: (i) the unaudited balance sheet of the
Business as at March 31, 1995, and the related income statement and cash flow
statement of the Business for the 3-month period then ended (the "Interim
Financial Statements"), (ii) the audited balance sheet of the Business as at
December 31, 1994 and the related audited income statement and cash flow
statement of the Business for the year then ended (the "Audited Financial
Statements") and (iii) the unaudited balance sheets of the Business as at
December 31, 1993 and 1992 and the related income statements and cash flow
statements of the Business for the years then ended (the "Unaudited Financial
Statements"; the Interim Financial Statements, the Audited Financial Statements
and the Unaudited Financial Statements being, collectively, the "Financial
Statements"). The Financial Statements and the Estimated Closing Balance Sheet
(i) were or will be, as the case may be, prepared in accordance with the books
of account and other financial records of the Business, (ii) except as disclosed
in Section 3.04(a) of the Disclosure Schedule, have been or will be, as the case
may be, prepared in accordance with Modified U.S. GAAP applied on a basis
consistent with the past practices of the Seller, (iii) present or will present,
as the case may be, fairly in all material respects the net assets and results
of operations, as the case may be, of the Business as of the dates thereof or
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20
for the periods covered thereby and (iv) include or will include, as the case
may be, all adjustments that are necessary for a fair presentation of the
financial condition of the Business and the results of the operations of the
Business as of the dates thereof for the periods covered thereby except, in the
case of the Interim Financial Statements, for normally recurring year-end
adjustments.
(b) Except as set forth in Section 3.04(b) of the Disclosure
Schedule, there are no Liabilities of or relating to the Business that would be
required by Modified U.S. GAAP applied on a basis consistent with the past
practices of the Seller to be reflected or reserved against in the Estimated
Closing Balance Sheet or the Financial Statements except (i) such Liabilities as
are reflected or reserved against in the Estimated Closing Balance Sheet or the
Financial Statements or disclosed therein and (ii) such Liabilities as are
incurred after the date hereof, in the ordinary course of business for normal
trade or business obligations.
SECTION 3.05. Litigation. Except as set forth in Section 3.05
of the Disclosure Schedule, there are no suits, claims, actions, proceedings or
investigations pending or, to the Seller's knowledge, threatened against the
Seller relating to the Business or any of the Assets or Assumed Liabilities
before any court, arbitrator or administrative, governmental or regulatory
authority or body that, individually or in the aggregate, are reasonably likely
to have a Material Adverse Effect or would prevent the Seller from performing in
all material respects its obligations hereunder and under the Ancillary
Agreements. Except as set forth in Section 3.05 of the Disclosure Schedule,
neither the Business nor any of the Assets or Assumed Liabilities is subject to
any order, writ, judgment, injunction, decree, determination or award of any
court or other governmental body which, either individually, or in the
aggregate, have a Material Adverse Effect.
SECTION 3.06. Permits and Licenses; Compliance with Laws. (a)
Except as disclosed in Sections 3.03 or 3.06 of the Disclosure Schedule and
except as would not have a Material Adverse Effect either individually or in the
aggregate, (i) the Seller has or has accomplished all things necessary to obtain
or make all permits, licenses, approvals, authorizations, registrations,
qualifications and filings with and under all Federal, state, local and foreign
laws, authorities and agencies, including non-governmental self-regulatory
organizations, that are required to enable the Seller to carry on the Business
as currently conducted (collectively, the "Required Permits"), (ii) all such
Required Permits are in full force and effect and no suspension, in whole or in
part, of any of the Required Permits is, to the knowledge of the Seller,
threatened. As of the Closing, all such Required Permits shall be transferred to
the Purchaser, to the extent such Required Permits are transferable.
(b) The Seller is not in violation of any law, rule,
regulation, order, judgment or decree applicable to the Seller or by which the
Business, any of the Assets or any of the Assumed Liabilities is bound or
affected (including, without limitation, any building, zoning, health, safety or
fire law applicable to any of the Property), except (i) as
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21
set forth in Section 3.06 of the Disclosure Schedule and (ii) for violations
which do not relate to the Business or which would not, either individually or
in the aggregate, have a Material Adverse Effect.
SECTION 3.07. Conduct in the Ordinary Course; Absence of
Changes or Events. Since December 31, 1994, except as disclosed in Section 3.07
of the Disclosure Schedule, (a) the Business has been conducted in the ordinary
course and consistent with prior practice and (b) there have been no changes in,
or events relating to, the Business that, individually or in the aggregate, have
had a Material Adverse Effect. Without limiting the foregoing, except as
disclosed in Section 3.07 of the Disclosure Schedule, and except in the ordinary
course of business and consistent with prior practice, since December 31, 1994
there has not been incurred, nor has there occurred:
(i) any material damage, destruction or loss (whether or
not covered by insurance) adversely affecting the Assets or the
Business;
(ii) any sale, transfer, pledge or other disposition of any
tangible or intangible assets of the Business (except sales of
inventory in the ordinary course of business consistent with prior
practice) having an aggregate book value of $100,000 or more;
(iii) any change in the accounting methods, procedures or
practices followed by the Seller with respect to the Business;
(iv) any obligation, liability or indebtedness (whether
absolute, accrued, contingent or otherwise and whether due or to become
due) incurred by the Seller with respect to the Business to any person
or entity other than in the ordinary course of business and consistent
with prior practice;
(v) any material change in policies, operations or practices
with respect to business operations followed by the Seller with respect
to the Business, including, without limitation, with respect to selling
methods, returns, discounts or other terms of sale, or with respect to
the policies, operations or practices of the Business concerning the
employees of the Business;
(vi) any capital appropriation or expenditure or commitment
therefor on behalf of the Seller with respect to the Business in excess
of $100,000 individually, or $500,000 in the aggregate;
(vii) any general uniform increase in the compensation of
the Business Employees (including, without limitation, any increase
pursuant to any bonus,
<PAGE>
22
pension, profit-sharing, defined compensation or other plan or
commitment) except as required by law or any collective bargaining
agreement;
(viii) any liabilities incurred for any severance or
termination pay or similar payment with respect to any employees of the
Business;
(ix) any sales contracts or commitments which will be in
excess of the capacity of the Business in the ordinary course as of the
date of the Closing;
(x) any purchase contracts or commitments in excess of
the requirements of the Business in the ordinary course;
(xi) any material change in the manner or timing of the
payment of payables of the Seller relating to the Business;
(xii) any termination, cancellation or material amendment
or waiver of any Material Contract; or
(xiii) any agreement, whether in writing or otherwise, by the
Seller to take or do any of the actions enumerated in this Section
3.07.
SECTION 3.08. Material Contracts. (a) Section 3.08(a) of the
Disclosure Schedule lists all material contracts and agreements of the Seller
pertaining directly to the Business or included in the Assets or the Assumed
Liabilities, including the following (the "Material Contracts"):
(i) purchase orders or contracts involving the expenditure of
more than $1,000,000 in any instance for the purchase of materials,
supplies, equipment or services or which are not cancelable within
thirty (30) days without penalty;
(ii) contracts which have a term in excess of one (1) year
and involve the expenditure of more than $1,000,000;
(iii) contracts and agreements relating to the leasing (as
lessor or lessee) or to the conditional purchase or sale by the Seller
of any property, real, personal or mixed;
(iv) contracts, commitments and arrangements with any
governmental body, agency or authority;
(v) indentures, mortgages, deeds of trust, promissory
notes, loan agreements, capital leases, security agreements or other
agreements or commitments
<PAGE>
23
for the borrowing of money, or the deferred purchase price of assets,
or which otherwise evidence indebtedness of the Seller relating to the
Business or which create an Encumbrance or any of the Assets;
(vi) guarantees of the obligations of a third party or
agreements to indemnify third parties;
(vii) agreements which restrict the Seller from doing business
with any other person or entity in any geographic area or from
producing or selling any product;
(viii) contracts or agreements with any Affiliate of the
Seller;
(ix) distributor, dealer, sales, agency, manufacturer's
representative, franchise or similar agreements or any other contract
relating to the payment of a commission; and
(x) any agreement, arrangement, commitment or understanding
for the sale of any of the Assets, outside the ordinary course of
business.
True and complete copies of all written Material Contracts and written summaries
of all oral Material Contracts described or required to be described in Section
3.08(a) of the Disclosure Schedule have been made available to the Purchaser.
(b) Except as disclosed in Section 3.08(b) of the Disclosure
Schedule, each Material Contract (i) is, to the Seller's knowledge, valid and
binding and in full force and effect and (ii) will continue in full force and
effect upon the consummation of the transactions contemplated by this Agreement
and the Ancillary Agreements, except to the extent that any consents set forth
in Section 3.03(a) or Section 3.03(b) of the Disclosure Schedule are not
obtained. To the Seller's knowledge, the Seller has in all material respects
performed all of its obligations required to be performed by it to the date
hereof under all Material Contracts, and is not in default or alleged to be in
default, in either case, in any material respect, under any Material Contract,
and there exists no event, condition or occurrence which, after notice or lapse
of time or both, would constitute such a default. To the Seller's knowledge, no
other party to any Material Contract is in default in any material respect of
any of its obligations thereunder.
SECTION 3.09. Employee Matters. (a) Section 3.09(a) of the
Disclosure Schedule lists (i) all employee benefit plans as defined in Section
3(3) of ERISA, (ii) all bonus, stock option, stock purchase, restricted stock
and incentive plans, fringe benefit plans, deferred compensation and retirement
programs or arrangements, and (iii) all employment, severance or compensation
agreements, as each of the foregoing were entered into, maintained, or
contributed to, by the Seller, or any of its Affiliates for, or with respect to,
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24
any of the Business Employees (collectively, the "Plans). Each Plan is in
writing and the Seller has made available to the Purchaser a complete and
accurate copy of each Plan document or agreement and, if applicable, the summary
plan description for each Plan, any summary of material modifications for each
Plan and the most recently received IRS determination letter for each such Plan,
where applicable.
(b) Except as disclosed in Section 3.09(b) of the Disclosure
Schedule, none of the Plans is a multiemployer plan, within the meaning of
Section 3(37) or 4001(a)(3) of ERISA or is otherwise subject to Title IV ERISA
(a "Multiemployer Plan").
(c) Each Plan that is an employee welfare benefit plan
complies and has complied with the continuation coverage ("COBRA") requirements
of Section 4980B of the Code to the extent such Section is applicable to such
Plan. Except as set forth in Section 3.09(c) of the Disclosure Schedule, no Plan
that is an employee welfare benefit plan provides medical or other welfare
benefits to retired or former employees of the Seller relating to the Business
(other than COBRA continuation coverage, where applicable).
(d) All contributions and insurance premiums required to be
paid with respect to any Plan as of the Closing Date have been paid.
(e) To the knowledge of the Seller, each Plan has been
administered, maintained and operated in substantial compliance with its terms
and the requirements of applicable law, except where a failure to do so would
not have, either individually or in the aggregate, a Material Adverse Effect. No
legal action, suit or claim is pending or, to the knowledge of the Seller,
threatened, with respect to any Plan (other than claims for benefits in the
ordinary course), and to the knowledge of the Seller, no fact or event exists
that could reasonably be expected to give rise to any such action, suit or
claim, except in each case, where such action, suit or claim would not have,
either individually or in the aggregate, a Material Adverse Effect.
SECTION 3.10. Environmental Matters. (a) Except as disclosed
in Section 3.10(a) of the Disclosure Schedule and except as would not,
individually or in the aggregate, have a Material Adverse Effect:
(i) the Seller is and, to the best of the Seller's knowledge,
has been operating the Business and the Property in compliance with all
applicable Environmental Laws, except for such non-compliance as has
been cured;
(ii) the Seller has obtained, to the best of its knowledge,
all Environmental Permits required for the Business or for the
ownership, use and operation of any of the Property; all such
Environmental Permits are in effect; no appeal nor any other action is
pending to revoke any such Environmental Permit; and the Seller, with
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25
respect to the Business, is and has been, to the best of its knowledge,
in compliance with the requirements of such Environmental Permits,
except for such non-compliance as has been cured;
(iii) such Environmental Permits are transferable to the
Purchaser without the consent of any Governmental Authority;
(iv) there are no underground storage tanks at the
Property; and there are no aboveground storage tanks, surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous
Materials are being treated, stored or disposed (as defined in 40
C.F.R. Part 264) on any of the Property in violation of any
Environmental Laws;
(v) there is no asbestos or asbestos-containing material
or any equipment using PCBs on any of the Property in violation of
applicable Environmental Laws;
(vi) the Seller has not and, to the knowledge of the
Seller, no other person has released, discharged or disposed of
Hazardous Materials on, beneath or adjacent to any of the Property in
any manner or quantity that requires investigation, assessment,
monitoring, removal or remedial action under currently applicable
Environmental Laws;
(vii) the Seller is not undertaking, and has not within the
past three years completed, any investigation or assessment or remedial
or response action relating to any such release, discharge or disposal
of or contamination with Hazardous Materials at any of the Property
either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Law;
(viii) there are no pending or, to the knowledge of the
Seller, threatened actions, suits, demands, demand letters, claims,
liens, notices of non-compliance or violation, investigations,
proceedings, consent orders or consent agreements relating in any way
to any Environmental Law, any Environmental Permit or any release,
threatened release, discharge, disposal, remediation, removal or
cleanup of Hazardous Materials with respect to the Business or the
Property; and
(ix) the Seller can maintain present production levels in
compliance with applicable Environmental Laws without any material
modification of its Environmental Permits or obtaining any additional
Environmental Permits.
(b) The Seller has provided the Purchaser with copies of or
access to any environmental reports, studies or analyses in its possession or
under its control relating to the Property or the operations of the Business.
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26
(c) Except as disclosed in Section 3.10(c) of the Disclosure
Schedule, to the knowledge of the Seller (other than the plant managers referred
to in Section 3.10(e)), no employee of the Seller in connection with the
Business, and to the knowledge of such plant managers, since 1985, no such
employee, has in the course of his or her employment with the Seller been
exposed to any Hazardous Materials which has given rise to any claim against the
Seller, other than claims that have been settled or resolved.
(d) To the knowledge of the Seller, neither the execution and
delivery, nor the consummation of the transactions contemplated hereby, will
require any notice, environmental audit or other action by the Seller or the
Purchaser pursuant to any applicable Environmental Law.
(e) As used in this Section 3.10, the "knowledge" of the
Seller means the actual knowledge of Walter T. Stelzel, Senior Executive Vice
President, H. Arvid Johnson, Senior Vice President and General Counsel, Guy
Chardon, Senior Vice President, Joseph Moran, Environmental Counsel, Ronald
Pollen, Vice President, and the plant managers at each plant of the Business.
SECTION 3.11. Intellectual Property. Section 3.11 of the
Disclosure Schedule sets forth a true and complete list and a brief description
of all patents, patent applications, trademarks, trade names, service marks and
other intellectual property, including all applications for any of the foregoing
(the "Intellectual Property") of the Seller, whether owned or used by, or
licensed to, the Seller and pertaining to the Business. Except as disclosed in
Section 3.11 of the Disclosure Schedule, (i) to the Seller's knowledge, the
rights of the Seller in or to such Intellectual Property do not conflict with or
infringe on the rights of any other person, and the Seller has not received any
claim or notice from any person to such effect and (ii) the Seller owns, is
licensed or otherwise has the right to use all such Intellectual Property.
Except as set forth in Section 3.11 of the Disclosure Schedule, the Seller is
not a party to any license or similar agreement with respect to any of such
Intellectual Property.
SECTION 3.12. Assets. (a) The Seller owns, leases or has the
legal right to use all the Assets and the Seller has good title to, or, in the
case of leased or subleased Assets, valid and subsisting leasehold interests in,
all the Assets, free and clear of Encumbrances, except (i) as disclosed in
Section 3.12 of the Disclosure Schedule and (ii) Permitted Encumbrances.
(b) The Assets, the San Leandro Lease and the St. Louis
Facility constitute all the properties, assets or rights necessary for the
operation of the Business as it is currently being conducted. The Assets are in
normal operating condition and repair, ordinary wear and tear excepted, and are
in the exclusive possession of the Seller.
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27
SECTION 3.13. Real Property. (a) Section 3.13 of the
Disclosure Schedule lists all of the Owned Real Property and the Leases. Each
parcel of Owned Real Property is owned by the Seller in fee simple (or its
equivalent under local law), free and clear of all Encumbrances, except: (a) as
disclosed in Section 3.13 of the Disclosure Schedule; (b) liens for Taxes and
assessments not yet payable; (c) liens for Taxes, assessments and charges and
other claims, the validity of which are being contested in good faith; (d)
imperfections of title, the existence of which, individually and in the
aggregate, do not have a Material Adverse Effect and which do not interfere in
any material manner, either individually or in the aggregate, with the operation
of the Business at such location; (e) inchoate mechanic's and materialmen's
liens for construction in progress to the extent such liens arise from Assumed
Liabilities; and (f) workmen's, repairmen's, warehousemen's and carrier's liens
arising in the ordinary course of the Business to the extent such liens arise
from Assumed Liabilities (the Encumbrances described in clauses (a) through (f)
being, collectively, "Permitted Encumbrances").
(b) No easement or restriction of record on any Leased Real
Property has, to the date on which this Agreement is made, had an adverse effect
in any material respect on the operation of the Business as operated at such
location.
SECTION 3.14. Insurance. All material properties and risks of
the Seller in respect of the Business are covered by valid and currently
effective insurance policies or binders of insurance or programs of
self-insurance in such types and amounts as are consistent with customary
practices and standards of companies engaged in businesses and operations
similar (including, without limitation, in size) to the Business.
SECTION 3.15. Labor Matters. Except as set forth in Section
3.15 of the Disclosure Schedule, (a) there are no controversies pending or, to
the knowledge of the Seller, threatened, between the Seller and any Business
Employees, which controversies, either individually or in the aggregate, have
had or are reasonably likely to have a Material Adverse Effect; (b) the Seller
is not a party to any collective bargaining agreement or other labor union
contract applicable to Business Employees; (c) there are no grievances
outstanding against the Seller under any such agreement or contract which are
reasonably likely to have a Material Adverse Effect either individually or in
the aggregate; (d) there are no unfair labor practice complaints pending or, to
the knowledge of the Seller, threatened against the Seller before the National
Labor Relations Board which, either individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect; (e) the Seller has no
knowledge of any strikes, slowdowns, work stoppages, lockouts, or threats
thereof, by or with respect to any employees of the Seller relating to the
Business; (f) no collective bargaining agreement is currently being negotiated
by the Seller with respect to any employees of the Business; (g) there are no
union organizational drives in progress and there has been no formal or informal
request to the Seller for collective bargaining or for an employee election from
any union or from the National Labor Relations Board with respect
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28
to any employees of the Business; (h) no union representation or jurisdictional
dispute or question exists respecting any employees of the Business; and (i) the
Seller is not materially delinquent in the payment to or on behalf of any past
or present employees of the Business of any wages, salaries, commissions,
bonuses, benefit plan contributions or other compensation.
SECTION 3.16. Taxes. (a) Other than as disclosed in Section
3.16(a) of the Disclosure Schedule, the Seller has timely filed all material
returns required to be filed with respect to Taxes. All such returns are, in all
material respects, true, correct and complete and all Taxes shown thereon as due
have been paid. Other than as disclosed in Section 3.16(a) of the Disclosure
Schedule, all other Taxes payable by, or due from, the Seller in respect of the
Business for all periods prior to the date hereof have been fully paid or
adequately reserved for by the Seller or, with respect to Taxes required to be
accrued, the Seller has properly accrued or will properly accrue such Taxes in
the ordinary course of business consistent with past practice of the Seller.
(b) Except as disclosed in Section 3.16(b) of the Disclosure
Schedule, the Seller has not received from any governmental or regulatory
authority any written notice of a material proposed adjustment, deficiency or
underpayment of any Taxes pertaining to the Assets or the Business, which notice
has not been satisfied by payment or been withdrawn.
SECTION 3.17. Lockboxes; Safe Deposit Boxes; Powers of
Attorney. Section 3.17 of the Disclosure Schedule is a true and complete list of
(a) the location of all lockboxes and safe deposit boxes of the Seller
pertaining to the Business and the names of all persons authorized to draw
thereon or have access thereto and (b) the names of all persons, if any, holding
powers of attorney from the Seller pertaining to the Business.
SECTION 3.18. Certain Transactions. With respect to the
Business, except as disclosed in Section 3.18 of the Disclosure Schedule, there
are no transactions between the Seller and any Affiliates of the Seller or any
directors, officers or salaried employees of the Seller, or the family members
of such directors, officers or salaried employees, or any Affiliates of such
directors, officers or salaried employees (other than for services as employees,
officers and directors), including, without limitation, any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from, such Affiliates, or any such officer, director or
salaried employee, or family member, or any corporation, partnership, trust or
other entity in which such Affiliate, family member, officer, director or
salaried employee has a substantial interest or is an officer, director, trustee
or partner.
SECTION 3.19. Suppliers and Customers. The Seller is not
required to provide bonding or any other security arrangements in connection
with any transactions with any of its respective customers or suppliers relating
to the Business. Section 3.19 of the
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Disclosure Schedule contains, with respect to the year ended December 31, 1994,
a true and complete list of (i) the twenty-five (25) largest customers (in
dollar volume) of the Business and (ii) the twenty-five (25) largest suppliers
(in dollar volume) to the Business. Except as disclosed in Section 3.19 of the
Disclosure Schedule, to the knowledge of the Seller, (a) no such supplier or
customer has threatened to terminate any of their respective relationships with
the Seller, and (b) as of the date of this Agreement, no such customer or
supplier with a written contract with the Seller that expires more than one year
after the date of this Agreement has threatened to modify in any material
respect such contract.
SECTION 3.20. The Subsidiary. As of the Closing, the
Subsidiary will be a corporation duly organized, validly existing and in good
standing under the laws of the State of California. As of the Closing, the
Subsidiary will have all requisite corporate power to own or lease and to
operate its properties, and to carry on the portion of the Business conducted by
it and will be duly qualified or licensed to do business as a foreign
corporation in good standing in the State of Washington. The Subsidiary will be
incorporated by the Seller as close to the Closing Date as practicable and will
carry on no activities and incur no obligations or liabilities of any kind
whatsoever prior to the Closing. As of the Closing: (a) all the Shares will have
been validly issued and be fully paid and non-assessable; (b) the Seller will
own all of the Shares beneficially and of record, free and clear of adverse
claims and Encumbrance or other restrictions; and (c) there will be no
outstanding securities convertible into or exchangeable or exercisable for any
shares or the capital stock or any other securities of the Subsidiary, nor will
the Subsidiary have outstanding any rights to subscribe for or to purchase, or
any options to purchase, or any agreements providing for the issuance of, any
shares of its capital stock, any securities convertible into or exchangeable or
exercisable for any shares of its capital stock or any other securities. Prior
to the Closing, the Seller will make available to the Purchaser complete and
correct copies of the Articles of Incorporation and the Bylaws of the
Subsidiary.
SECTION 3.21. Brokers. Except for Lazard Freres & Co. LLC, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Seller. The Seller
is solely responsible for the payment of the fees and expenses of Lazard Freres
& Co. LLC.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as
follows:
SECTION 4.01. Incorporation and Authority of the Purchaser.
The Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all necessary corporate
power and authority to enter into this Agreement and the Assumption Agreement,
to carry out and perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by the Purchaser of this Agreement and the other agreements, documents
and instruments contemplated hereby, the consummation by the Purchaser of the
transactions contemplated hereby and thereby and the performance by the
Purchaser of its obligations hereunder and thereunder have been duly and validly
authorized by all necessary corporate action, including, without limitation, all
necessary shareholder action. This Agreement has been, and the Assumption
Agreement will be, duly executed and delivered by the Purchaser, and (assuming
due authorization, execution and delivery by the Seller) this Agreement
constitutes, and the Assumption Agreement, upon its execution by the Purchaser,
will constitute, the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
SECTION 4.02. No Conflict. Except as may result from any facts
or circumstances relating solely to the Seller, the execution, delivery and
performance of this Agreement and the Assumption Agreement by the Purchaser do
not and will not (a) violate or conflict with the Certificate of Incorporation
or By-laws (or other similar applicable documents) of the Purchaser, (b)
conflict with or violate any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award applicable to the Purchaser, or (c)
except as set forth in Schedule 4.02 hereto, result in any breach of, or
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Encumbrance on any of the assets or properties of the Purchaser
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument relating to any assets or
properties to which the Purchaser or any of its subsidiaries is a party or by
which any of such assets or properties is bound or affected, which would prevent
the Purchaser from consummating the transactions contemplated by this Agreement
and the Assumption Agreement.
SECTION 4.03. Absence of Litigation. There are no claims,
actions, proceedings or investigations pending which seek to delay or prevent
the consummation of the transactions contemplated hereby or by the Assumption
Agreement or which would be
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reasonably likely to adversely affect or restrict the Purchaser's ability to
consummate the transactions contemplated hereby or by the Assumption Agreement.
SECTION 4.04. Governmental Consents and Approvals. The
execution and delivery of this Agreement and the Assumption Agreement by the
Purchaser do not, and the performance by the Purchaser of its obligations under
this Agreement and the Assumption Agreement and the consummation of the
transactions contemplated hereby and thereby will not, require any consent,
approval, authorization or other action by, or filing with or notification to,
any governmental or regulatory authority, except (a) as set forth in Schedule
4.04 hereto, (b) the notification requirements of the HSR Act, (c) where failure
to obtain such consent, approval, authorization or action, or to make such
filing or notification, would not prevent the Purchaser from performing any of
its material obligations under this Agreement or the Assumption Agreement, as
the case may be, and (d) as may be necessary as a result of any facts or
circumstances relating solely to the Seller.
SECTION 4.05. Financing. The Purchaser has delivered to the
Seller a true and complete copy of a commitment letter dated June 2, 1995 from
Bankers Trust Company and Bank of America National Trust and Savings Association
with respect to certain financing proposed to be provided to the Purchaser to
enable the Purchaser to consummate the transactions contemplated by this
Agreement. To the knowledge of the Purchaser, there is no reason to believe that
the financing contemplated by such commitment letter will not be completed.
Other than the financing contemplated by such commitment letter, the Purchaser
does not need to obtain any further financing to consummate the transactions
contemplated by this Agreement.
SECTION 4.06. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of the Business Prior to the Closing.
(a) The Seller covenants and agrees that, between the date hereof and the
Closing Date, it shall not conduct the Business other than in the ordinary
course and consistent with its prior practice except (i) for such actions as
contemplated by this Agreement and (ii) as described in Section 5.01(a) of the
Disclosure Schedule.
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(b) The Seller covenants and agrees that, except for the
actions contemplated by this Agreement, without the prior written consent of the
Purchaser, it will not, prior to the Closing, (i) materially change its
accounting methods, principles or practices used in respect of the Business,
(ii) revalue any of the Assets, including, without limitation, writing off
Receivables, other than in the ordinary course of business, (iii) establish or
materially increase the benefits payable under any Plan or establish any new
bonus, insurance, severance, deferred compensation, pension, retirement, profit
sharing or other employee benefit plan for Business Employees, or otherwise
increase the compensation payable or to become payable to any officers or key
employees of the Seller who are Business Employees, except in the ordinary
course of business consistent with past practice or as may be required by law or
applicable collective bargaining agreements or (iv) enter into any employment or
severance agreement with any Business Employees.
(c) The Seller covenants and agrees that, prior to the
Closing, it will use its reasonable efforts to preserve substantially intact the
business organization of the Business, to keep available to the Purchaser the
services of the Business Employees and to preserve the current relationships of
the Seller with the customers and suppliers of, and other persons which have
significant business relationships with, the Business (but the Seller shall have
no liability to the Purchaser for the failure to keep the services of any
Business Employees who voluntarily resign from employment with the Seller).
(d) The Seller covenants and agrees that prior to the Closing
it will, in the ordinary course of business consistent with prior practice, (i)
comply in all material respects with all applicable laws, rules and regulations,
(ii) maintain its insurance coverages, (iii) pay all material Taxes, charges and
assessments when due, subject to any valid objection or contest of such amounts
asserted in good faith and adequately reserved against, (iv) pay all accounts
payable and other Liabilities when due, and (v) maintain the property, plant and
equipment included in the Assets in normal operating condition in accordance
with the Seller's prior practices taking into account the age of such property,
plant and equipment.
SECTION 5.02. Investigation. (a) Without limiting the rights
of the Purchaser hereunder, the Purchaser acknowledges and agrees that it (i)
has made its own inquiry and investigation into, and, based thereon, has formed
an independent judgment concerning, the Assets, the Assumed Liabilities and the
Business, (ii) has been furnished with or given adequate access to such
information about the Assets, the Assumed Liabilities and the Business. The
Purchaser acknowledges and agrees that it will not assert any claim against the
Seller or any of its directors, officers, employees, agents, stockholders,
Affiliates, consultants, investment bankers or representatives, or hold the
Seller or any such persons liable, for any inaccuracies, misstatements or
omissions with respect to information (other than, with respect to the Seller,
the Assets, the Assumed Liabilities and the Business, the representations and
warranties contained in this Agreement) furnished by the Seller or such persons
concerning the Seller, the Assets, the Assumed Liabilities and the Business.
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33
(b) In connection with the Purchaser's investigation of the
Assets, the Assumed Liabilities and the Business, the Purchaser has received
from the Seller certain estimates, projections and other forecasts for the
Assets, the Assumed Liabilities and the Business, and certain plan and budget
information. The Purchaser acknowledges that there are uncertainties inherent in
attempting to make such estimates, projections, forecasts, plans and budgets,
that the Purchaser is familiar with such uncertainties, that the Purchaser is
taking full responsibility for making its own evaluation of the adequacy and
accuracy of all estimates, projections, forecasts, plans and budgets so
furnished to it, and that the Purchaser will not assert any claim against the
Seller or any of its Affiliates or any of its directors, officers, employees,
agents, stockholders, Affiliates, consultants, investment bankers or
representatives, or hold the Seller or any such persons liable with respect
thereto. Accordingly, the Seller makes no representation or warranty with
respect to any estimates, projections, forecasts, plans or budgets referred to
in this Section 5.02(b).
SECTION 5.03. Access to Information. (a) From the date hereof
until the Closing, upon reasonable notice, the Seller shall, and shall cause
each of its officers, directors, employees, auditors and agents, subject to
Section 5.05, (i) to afford the officers, employees and authorized agents and
representatives of the Purchaser reasonable access, during normal business
hours, to the offices, properties, books and records of the Seller which relate
to the Business, the Assets or the Assumed Liabilities and (ii) to furnish to
the officers, employees and authorized agents and representatives of the
Purchaser such additional financial and operating data and other information
regarding the Assets, the Assumed Liabilities and the Business as the Purchaser
may from time to time reasonably request; provided, however, that such
investigation shall not unreasonably interfere with any of the businesses or
operations of the Seller or any of its Affiliates or subsidiaries; and provided
further, however, that the auditors of the Seller shall not be obliged to make
available any work papers to any person who has not executed a customary hold
harmless agreement in respect thereof.
(b) In order to facilitate the resolution of any claims made
by or against or incurred by the Seller, after the Closing, upon reasonable
notice, the Purchaser shall (i) afford the officers, employees and authorized
agents and representatives of the Seller reasonable access, during normal
business hours, to the offices, properties, books and records of the Purchaser
with respect to the Assets, the Assumed Liabilities and the Business, (ii)
furnish to the officers, employees and authorized agents and representatives of
the Seller such additional financial and other information in the possession of
the Purchaser regarding the Assets, the Assumed Liabilities and the Business as
the Seller may from time to time reasonably request and (iii) make reasonably
available to the Seller the employees of the Purchaser whose assistance,
testimony or presence is necessary to assist the Seller in evaluating any such
claims and in defending such claims, including the presence of such persons as
witnesses in hearings or trials for such purposes; provided, however, that such
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34
investigation shall not unreasonably interfere with the business or operations
of the Purchaser or any of its Affiliates or subsidiaries.
(c) Notwithstanding the foregoing, the Seller shall not be
required, prior to the Closing, to disclose, or cause the disclosure of, to the
officers, employees or authorized agents or representatives of the Purchaser (or
provide access to any offices, properties, books or records of the Seller or any
of its subsidiaries or Affiliates that could result in the disclosure to such
persons or others of) any confidential information relating to trade secrets,
processes or patent or trademark applications, product development and marketing
plans or customer and product margins, nor shall the Seller be required to
permit or cause others to permit the officers, employees or authorized agents or
representatives of the Purchaser to copy or remove from the offices or
properties of the Seller or such subsidiary or Affiliate any documents, drawings
or other materials that might reveal any such confidential information or to
photograph or sketch any part of the assets or properties of the Seller or of
such subsidiary or Affiliate.
SECTION 5.04. Books and Records. (a) The Purchaser agrees that
it shall preserve and keep all books and records included in the Assets and
relating to the Assets and the Business in the Purchaser's possession for a
period of at least eight years from the Closing Date. The Seller shall be given
an opportunity, at its cost and expense, to remove and retain all or any part of
such books and records as the Seller may select at the expiration of such
period.
(b) If, in order properly to prepare documents required to be
filed with governmental authorities or its financial statements, it is necessary
that either party hereto or any successors be furnished with additional
information relating to the Assets, the Assumed Liabilities or the Business, and
such information is in the possession of the other party hereto, such party
agrees to use its best efforts to furnish such information to such other party,
at the cost and expense of the party being furnished such information.
SECTION 5.05. Confidentiality. The terms of the letter
agreement dated May 11, 1994 between the Seller and the Purchaser as amended and
supplemental by the Information Sharing and Joint Defense Agreement, dated June
9, 1994, and by the Confidentiality and Joint Defense Agreement, dated May 9,
1995 (collectively, the "Confidentiality Agreement"), are hereby incorporated by
reference and shall continue in full force and effect until the Closing, at
which time such Confidentiality Agreement and the obligations of the Purchaser
under such Confidentiality Agreement shall terminate; provided, however, that
the Confidentiality Agreement shall terminate only in respect of that portion of
the ANC Evaluation Material (as defined in the Confidentiality Agreement)
exclusively relating to the transactions contemplated by this Agreement. If this
Agreement is, for any reason, terminated prior to the Closing, the
Confidentiality Agreement shall continue in full force and effect in respect of
all ANC Evaluation Material.
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35
SECTION 5.06. Regulatory and Other Authorizations; Consents.
(a) Each party hereto will use its reasonable best efforts to obtain all
authorizations, consents, orders and approvals of all Federal, state and local
regulatory bodies and officials and third parties that may be or become
necessary for the execution and delivery of, and the performance of its
obligations pursuant to, this Agreement and will cooperate fully with the other
party in promptly seeking to obtain all such authorizations, consents, orders
and approvals. Each party hereto agrees to make an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby within ten Business Days of the date hereof and
to supply promptly any additional information and documentary material that may
be requested pursuant to the HSR Act. The parties hereto will not take any
action that will have the effect of delaying, impairing or impeding the receipt
of any required approvals.
(b) Without limiting the generality of the Purchaser's
undertakings pursuant to Section 5.06(a), the Purchaser shall:
(i) use its reasonable best efforts to enter promptly into
negotiations, provide information or make proposals in response to any
concerns on the part of any governmental authority with jurisdiction
over the enforcement of any applicable antitrust laws ("Government
Antitrust Authority") regarding the legality under any antitrust law of
the Purchaser's acquisition of the Business, the Assets and the Assumed
Liabilities;
(ii) subject to Section 10.01, use its reasonable best efforts
to prevent the entry in a judicial or administrative proceeding brought
under any antitrust law by any Government Antitrust Authority or any
other party of any permanent or preliminary injunction or other order
that would make consummation of the acquisition of the Business, the
Assets or the Assumed Liabilities in accordance with the terms of this
Agreement unlawful or that would prevent or delay such consummation,
including, without limitation, taking the steps contemplated by Section
5.06(b)(i); and
(iii) subject to Section 10.01, take promptly, in the event
that such an injunction or order has been issued in such a proceeding,
any and all reasonable steps, including, without limitation, the appeal
thereof, the posting of a bond or the steps contemplated by Section
5.06(b)(i), necessary to vacate, modify or suspend such injunction or
order so as to permit such consummation on a schedule as close as
possible to that contemplated by this Agreement.
(c) Notwithstanding anything in this Section 5.06 to the
contrary, neither the Purchaser nor any of its Affiliates shall be required to
agree to any consent decree or order in connection with the objections of any
Government Antitrust Authority that would require the Purchaser or any of its
Affiliates to sell, license or otherwise dispose of, hold
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36
separate or otherwise divest itself of any of the Assets or any of the assets,
properties or businesses of the Purchaser or any of the Purchaser's Affiliates.
SECTION 5.07. Bulk Transfer Laws. The Purchaser hereby waives
compliance with any applicable bulk sale or bulk transfer laws of any
jurisdiction in connection with the sale of the Assets to the Purchaser. The
Seller shall indemnify and hold harmless the Purchaser and its Affiliates, and
their respective officers and directors, against any and all liabilities
(including Tax liabilities other than sales, transfer and use Tax liabilities)
that may be asserted by third parties against the Purchaser as a result of
noncompliance with any such bulk transfer law (except for those liabilities
assumed by the Purchaser hereunder or in the Assumption Agreement).
SECTION 5.08. ISRA. (a) No later than five days after the
execution of this Agreement, the Seller shall notify the New Jersey Department
of Environmental Protection (the "NJDEP") of this Agreement and the transfer of
the Edison, New Jersey plant (the "Edison Plant") contemplated by this Agreement
pursuant to the requirements of the New Jersey Industrial Sites Recovery Act
("ISRA"). Prior to the Closing, the Seller shall, at its cost and expense,
submit for approval either a negative declaration or proposed remedial action
work plan as appropriate under ISRA, enter into a remediation agreement with the
NJDEP pursuant to the requirements of ISRA and take such other actions required
by NJDEP to comply with ISRA to the extent attributable to conditions at the
Edison Plant existing as of the Closing Date. The Seller's obligations pursuant
to this Section 5.08 shall terminate upon receipt of a no further action letter
or similar final approval from NJDEP ("NJDEP Approval"). The Seller shall
promptly provide the Purchaser with true and correct copies of (i) all
documents, submissions and correspondence made to the NJDEP and (ii) all written
communications, correspondence, reports and directives to or from the NJDEP
related to the Seller's ISRA compliance at the Edison Plant in connection with
this Agreement.
(b) The Purchaser shall cooperate with the Seller in providing
documents, reports, correspondence, and other information and shall afford the
Seller and its agents access, and if the Edison Plant is subsequently
transferred or assigned prior to receipt of the NJDEP Approval, the Purchaser
shall use its best efforts to cause the transferee or assignee to afford access,
to the Edison Plant and employees of the Purchaser or such transferee or
assignee as is reasonably necessary to comply with ISRA, all upon reasonable
notice during normal business hours and without unreasonable interference to the
operations of the Edison Plant. In the event that the Purchaser ceases
operations at the Edison Plant, transfers or assigns the lease relating to the
Edison Plant or otherwise triggers ISRA prior to receipt of the NJDEP Approval,
the Purchaser shall pay all costs and expenses of investigation and remediation
incurred by the Seller under ISRA relating to any areas of concern not otherwise
required to be investigated or remediated by the Seller in connection with its
obligation to obtain the NJDEP Approval. The Purchaser shall be responsible for
compliance with ISRA
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37
and all costs associated therewith as a result of any actions that may occur
subsequent to receipt of the NJDEP Approval.
(c) The Seller agrees that, in conducting all activities
pursuant to this Section 5.08, it shall comply in all material respects with all
statutes, ordinances, rules and regulations of governmental bodies applicable to
the performance of such activities. The Seller shall fill in all holes resulting
from test borings and monitoring wells as required by governmental authorities
and, to the extent reasonable and in conformance with its obligations for the
NJDEP Approval or otherwise under this Agreement, restore the Edison Plant to
such condition as may be required by applicable law and as may be reasonably
necessary to permit the Purchaser to use the Edison Plant for the purposes it
was used on the Closing Date unless the Purchaser notifies the Seller in writing
of the Purchaser's waiver of this obligation.
(d) The Purchaser agrees to operate the Edison Plant in
compliance in all material respects with all applicable Environmental Laws and
to use, handle, store and dispose of Hazardous Materials in a manner which will
not interfere with or increase the costs of the Seller's obligations under this
Section 5.08.
(e) The Seller agrees to indemnify, save, defend and hold the
Purchaser harmless from any and all causes of action, claims, demands, losses,
liability, judgments, costs and expenses (including reasonable attorney's fees
and disbursements) relating to any injury or death to person or damage to
property or any other matter resulting from the Seller's activities at the
Edison Plant pursuant to this Section 5.08.
SECTION 5.09. Other Changes. The Seller shall not take, cause,
agree to take or cause, or permit to occur any of the actions or events listed
in the second sentence of Section 3.07 of this Agreement, other than clause
(xii) thereof.
SECTION 5.10. Other Negotiations. Neither the Seller nor any
of its Affiliates shall pursue, initiate, encourage or engage in any
negotiations or discussions with, or provide any information to, any other
person (other than the Purchaser and its Affiliates) regarding the sale of the
Assets.
SECTION 5.11. Closing Conditions. The Seller and the Purchaser
shall use all reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all other things necessary, proper or advisable
to satisfy promptly the conditions to Closing set forth in this Agreement to be
satisfied by such party.
SECTION 5.12. Environmental Assessment. Upon reasonable prior
notice, the Seller shall provide the Purchaser or its agents with access to the
Property to continue to conduct, at the Purchaser's expense, the Purchaser's
environmental assessment of the
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Property. Such environmental assessment shall not include any intrusive sampling
without the prior written consent of the Seller. In connection with such
assessment, the Seller shall provide the Purchaser or its agents, upon
reasonable prior notice, with (i) reasonable access to existing records of
matters which are the subject of the assessment and (ii) reasonable access to
the employees of the Seller who are most familiar with such matters. The Seller
and the Purchaser shall cooperate in the conduct of the environmental
assessment. The Purchaser shall provide the Seller with copies of all reports
generated in connection with the assessment.
SECTION 5.13. Inventory Physical. On the Closing Date or on
the date immediately before the Closing Date, the Seller and the Seller's
Accountants shall conduct a complete physical review of all inventory included
in the Assets and shall permit the Purchaser and the Purchaser's Accountants to
be present at such complete physical review. The results of such complete
inventory physical review shall form the basis of the amount of inventories
reflected on the Closing Balance Sheet.
SECTION 5.14. Audited Financial Statements. Within forty-five
Business Days following the Closing Date, the Seller shall deliver to the
Purchaser the audited balance sheets of the Business as at December 31, 1993 and
1992, together with all related notes and schedules thereto, and the related
audited income statements and cash flow statements of the Business for the years
then ended, accompanied, in each case, by the opinion of the Seller's
Accountants. Such audited financial statements shall be prepared in such a
manner as to allow the Purchaser to comply with its financial reporting
requirements with the Securities and Exchange Commission. In addition, at the
Closing or as promptly thereafter as is practicable, but in any event within
forty-five Business Days following the Closing Date, the Seller shall deliver to
the Purchaser such interim financial statements of the Business as the Purchaser
may require in order to comply with its financial reporting requirements with
the Securities and Exchange Commission. The Purchaser shall be responsible for
and reimburse the Seller for the out-of-pocket costs of the Seller incurred in
connection with the preparation of such audited and interim financial statements
(including, without limitation, the fees and expenses of the Seller's
Accountants in connection therewith) regardless of whether or not the Closing
shall have occurred.
SECTION 5.15. Tax Elections. At the Closing, the Purchaser and
the Seller shall make an election under Code Sections 338(g) and 338(h)(10) with
respect to the sale of the Shares. The Seller shall pay any income tax
attributable to the making of such election and shall indemnify the Purchaser
and any other person with which the Purchaser files, has filed or will file a
consolidated or combined tax return and shall hold them harmless from any and
all income taxes resulting from the filing of such election under Code Sections
338(g) and 338(h)(10) with respect to the purchase of the Shares by the
Purchaser.
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SECTION 5.16. Title Reports; Surveys. (a) Promptly following
the execution of this Agreement, the Purchaser shall, at its own expense, order
from the Title Company title commitments with respect to each parcel of Owned
Real Property and shall deliver copies of all such commitments, and any updates
to such commitments to the Seller.
(b) Prior to the Closing, the Seller shall deliver to the
Purchaser all appraisals, plans, specifications, surveys, engineering data and
related material with respect to the Owned Real Property that the Seller may own
and have in its possession.
SECTION 5.17. Financial Covenants. The Seller shall not allow
the trade working capital of the Business as at the Closing to exceed the amount
it budgeted therefor in the trade working capital budget attached hereto as
Exhibit 5.17 by more than $20 million; provided, however, that the Seller shall
be permitted to treat as Excluded Assets, and not sell to the Purchaser at the
Closing, Receivables that are due no less than 30 days after the Closing Date in
such amount as is necessary not to allow the trade working capital of the
Business to exceed the budgeted amount by more than $20 million. From and after
the Closing, for a period of the longer of three years or the final resolution
of all claims for indemnity pursuant to Section 9.03, the Seller shall not allow
its net worth to be less than the Cash Amount.
SECTION 5.18. St. Louis Restructuring. The Seller shall take
all reasonable actions necessary to complete the St. Louis Restructuring
substantially in the manner and within the time period specified in Exhibit
1.01(e) hereto.
SECTION 5.19. Employee Grievances. (a) The Seller shall direct
the handling of the grievances identified in Section 3.15 of the Disclosure
Schedule, as Grievance #92-4, Grievance #93-5 and Grievance #94-57; provided,
however, that the Seller shall not agree to a final settlement of such
grievances without the written consent of the Purchaser, which consent shall not
be unreasonably withheld. With respect to all other grievances identified in
Section 3.15 of the Disclosure Schedules, the Seller and the Purchaser shall
determine in good faith which party has the greater interest (whether economic,
precedential or otherwise) in directing the handling of each such grievance and
the party with such greater interest shall direct such grievances; provided,
however, that the party handling such grievances shall not agree to a final
settlement of such grievances without the written consent of the other party,
which consent shall not be unreasonably withheld.
(b) As promptly as practicable following the final disposition
of each grievance relating to retiree life benefits for active employees, the
Seller shall determine the amount, if any, by which the post-retirement life
benefit liabilities (computed as of the Closing Date on an actuarial basis,
using the same set of assumptions currently used by the Seller, in accordance
with Statement of Financial Standards No. 106) for any USW or IAM
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Transferred Employees affected by such final dispositions is increased as a
result of such final dispositions (the first of such amounts being, the "First
Disposition Excess" and the second of such amounts being, the "Second
Disposition Excess").
(c) In the event that the sum of the Closing Date Benefit
Liabilities plus the St. Louis Benefit Liabilities is less than or equal to $25
million (or if the St. Louis Closing shall not have occurred by the time of the
determination of the First Disposition Excess, $22.5 million), but such sum plus
the First Disposition Excess exceeds $25 million, or $22.5 million, as the case
may be, then the Seller shall pay to the Purchaser the amount of such excess in
immediately available funds within five Business Days of the determination of
the First Disposition Excess. In the event that the sum of the Closing Date
Benefit Liabilities plus the St. Louis Benefit Liabilities exceeds $25 million,
or $22.5 million, as the case may be, then the Seller shall pay to the Purchaser
the amount of the First Disposition Excess in immediately available funds within
five Business Days of the determination of the First Disposition Excess.
(d) In the event that the sum of the Closing Date Benefit
Liabilities plus the St. Louis Benefit Liabilities plus the First Disposition
Excess is less than or equal to $25 million (of if the St. Louis Closing shall
not have occurred by the time of the determination of the Second Disposition
Excess, $22.5 million), but such sum plus the Second Disposition Excess exceeds
$25 million, or $22.5 million, as the case may be, then the Seller shall pay to
the Purchaser the amount of such excess in immediately available funds within
five Business Days of the determination of the Second Disposition Excess. In the
event that the sum of the Closing Date Benefit Liabilities plus the St. Louis
Benefit Liabilities plus the First Disposition Excess exceeds $25 million, or
$22.5 million, as the case may be, then the Seller shall pay to the Purchaser
the amount of the Second Disposition Excess in immediately available funds
within five Business Days of the determination of the Second Disposition Excess.
SECTION 5.20. Further Action. The Purchaser and the Seller
shall execute and deliver such documents and other papers and take such further
actions as may be reasonably required to carry out the provisions of this
Agreement and the Ancillary Agreements and give effect to the transactions
contemplated by this Agreement and the Ancillary Agreements. The Seller further
agrees that, from and after the Closing, it will execute and deliver to the
Purchaser such additional instruments and documents and take such further action
as the Purchaser may reasonably require in order to more fully vest, record
and/or perfect the Purchaser's title to, or interest in, the Assets. From and
after the Closing, the Seller shall take all steps as may be required to
transfer to the Purchaser actual possession and operating control of the Assets.
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ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.01. Offer of Employment. (a) Salaried Employees.
With respect to those employees in the Business who are employed by the Seller
as salaried employees immediately prior to the Closing Date ("Salaried Business
Employees"), the Purchaser shall offer employment to those of such Salaried
Business Employees whom it elects to employ after the Closing Date at least 10
days prior to the Closing Date. Such offer of employment shall be at the same or
higher salary and with a performance plan comparable to the Performance Plans in
addition to Purchaser's current profit sharing plan and such employment shall be
within 50 miles of the employee's present location (a "Qualifying Offer of
Employment"). Those employees accepting such offer prior to the Closing Date
shall become employees of the Purchaser as of the Closing Date (the "Transferred
Salaried Employees"). In the event that any such Salaried Business Employees
decline or do not respond prior to the Closing Date to such offer of employment
of the Purchaser, they will be deemed to have voluntarily resigned for all
purposes, including under the American National Can Human Resources Standard
Practice #610 as administered by the Business Group (the "ANC Severance
Policy"), and will not be entitled to severance thereunder; provided, however,
that if the Purchaser's offer is not a Qualifying Offer of Employment to any
Salaried Business Employee, then the Purchaser shall reimburse the Seller for
all cash amounts paid to, and the cost of benefits provided for, such Salaried
Business Employee by the Seller pursuant to the ANC Severance Policy (as in
effect on the date hereof) as a direct result of such offer being so declined.
The Seller agrees to give the Purchaser reasonable access to files and records
needed by the Purchaser and relevant to the Purchaser's decision regarding
making offers of employment to the salaried employees referred to above. Should
the Purchaser determine not to make an offer of employment to any Salaried
Business Employees of the Seller (other than those on long-term disability on
the Closing Date) as provided in this Section 6.01, then the Purchaser shall be
obligated to reimburse the Seller for all cash amounts paid to, and for the cost
of benefits provided for such Salaried Business Employees for severance pursuant
to the ANC Severance Policy (as in effect on the date hereof) as a direct result
of such a failure to offer employment. Unless specifically provided for
elsewhere in this Article VI, any Salaried Business Employee accepting any offer
of employment with the Purchaser shall not be eligible for severance under the
ANC Severance Policy.
As used in this Article VI, the term "cost of benefits" will
include the cash amounts paid during the severance period for medical claims,
for HMO coverage on a pro rata basis, for dental claims and life insurance
claims, and will include payment of an amount which the parties agree represents
the actuarial present value of the lifetime cost of retiree medical and life
insurance for employees who are eligible for such insurance at the time the cost
of benefits is determined.
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(b) Hourly Employees. With respect to those employees in
the Business who are employed by the Seller as hourly employees immediately
prior to the Closing Date (the "Hourly Business Employees"), the Purchaser shall
offer to all such employees at least 10 days prior to the Closing Date the same
employment status with the Purchaser as such employees had with the Seller as at
the Closing Date, and those accepting such offers prior to the Closing Date
shall become employees of the Purchaser as of the Closing Date (the "Transferred
Hourly Employees"). In the event that any of such Hourly Business Employees
decline or do not respond prior to the Closing Date to such offer of employment,
they will be deemed to have voluntarily resigned in all circumstances, and shall
not be deemed eligible for severance benefits and other benefit eligibility will
be determined accordingly. Any Hourly Business Employee not offered employment
by the Purchaser as of the Closing Date under Section 6.01(b), 6.11 or 6.12
shall be recalled or returned to work in accordance with the applicable
collective bargaining agreement or plant practices and shall then become, for
all purposes, an employee of the Purchaser. If the employee does not respond to
the recall, such employee will be deemed to have voluntarily resigned.
(c) Business Employees. For purposes of this Article VI,
the term "Business Employees" shall be deemed to refer to both Salaried Business
Employees and Hourly Business Employees.
(d) Transferred Employees. For purposes of this Article
VI, the term "Transferred Employees" shall be deemed to refer to the Transferred
Salaried Employees and the Transferred Hourly Employees in the aggregate.
SECTION 6.02. Benefit Arrangements. (a) Employee Liabilities;
Waivers. Employee related liabilities for all Business Employees and for the
dependents, beneficiaries or joint annuitants of such Business Employees that
accrue before the Closing Date are the responsibility of and shall be retained
by the Seller except as otherwise specifically provided in this Agreement.
Except as otherwise provided in this Agreement, as of the Closing Date, the
Purchaser will be responsible for all employee-related liabilities for all
Transferred Employees and for the dependents, beneficiaries or joint annuitants
of such Transferred Employees that accrue on or after the Closing Date. It is
the intention of the parties that medical benefits which derive from claims
incurred after the Closing Date shall be the responsibility of the Purchaser
except that the Seller shall be responsible for the hospitalization and related
charges for any Transferred Employee hospitalized before the Closing Date and
who remains continuously hospitalized after the Closing Date, until such
employee's date of discharge from the hospital. The Purchaser agrees to cause
the waiver of any deductibles, waiting periods, and pre-existing conditions
applicable to its welfare plan benefits after the Closing Date, insofar as such
limitations would otherwise apply to Transferred Employees after the Closing
Date.
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43
(b) Service Credit. To the extent that service is relevant for
purposes of eligibility or vesting under any employee benefit plan, program or
arrangement established or maintained by the Purchaser for the benefit of any
Transferred Employee (including any retiree medical program), such plan, program
or arrangement shall credit such employees for service on or prior to the
Closing Date with the Seller or any Affiliate thereof, including the Business.
Schedule 6.02 hereto set forth a list of the Business Employees as of May 31,
1995 and, for each of them, various dates that are used by the Seller to
determine the years of service credited by Seller to each such Business Employee
for the purposes indicated herein. At the Closing, the Seller shall provide the
Purchaser with a list containing, for each of the Transferred Employees, as
determined by the Purchaser, information about the years of service credited to
each Transferred Employee by the Seller as of the Closing Date for each of the
purposes described in this Section 6.02 and which shall identify any Transferred
Employees who are receiving (or are eligible to receive) short-term disability
benefits as of the Closing Date.
(c) Defined Contribution Plans. Effective as of the Closing
Date, the Transferred Employees shall no longer participate in the American
National Can Company Capital Accumulation Plan, The American National Can
Company 401(k) Savings Plan for Union Employees, The Employee Savings and
Investment Plan for Eligible Hourly Paid Employees of American National Can
Company and the American National Can Company Retirement and Savings Plan for
Union-Free Hourly Employees (the "Defined Contribution Plans"). As soon as
practicable following the Closing Date, the Seller shall cause to be transferred
from the Defined Contribution Plans to defined contribution plans and related
trusts of the Purchaser in which such Transferred Employees are eligible to
participate assets equal to the finalized account balances of such Transferred
Employees who participated in the Defined Contribution Plans. Such account
balances shall be vested in accordance with the provisions of the Defined
Contribution Plans. The Seller hereby represents and warrants to the Purchaser
that each Defined Contribution Plan intended to qualify under the Code has
received a favorable determination letter as to its qualification under the Code
(except with respect to the American National Can Company 401(k) Savings Plan
for Union Employees and the American National Can Company Retirement and Savings
Plan for Union-Free Hourly Employees which, to the Seller's best knowledge and
belief, are qualified, and for which the Seller has applied for determination
letters) and nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.
(d) Seller's Pension Plans. The Seller shall retain liability
for all benefits accrued as of the Closing Date for all Transferred Employees
who are participants under the pension plans listed in Section 6.02(c) of the
Disclosure Schedule (the "Seller's Plans"). The Seller shall vest all such
Transferred Employees in their accrued benefits under the Seller's Plans as of
the Closing Date in accordance with the provisions of the plans and shall
maintain the Seller's Plans on a "frozen" basis with respect to such Transferred
Employees,
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44
with no benefits accruing to such Employees after the Closing Date. Such
benefits shall be paid in accordance with the provisions of the relevant frozen
plan.
(e) Purchaser Pension Plans. Effective as of the Closing Date,
the Purchaser shall provide Transferred Salaried Employees who are covered by
one or more of the Seller's Plans with an employee defined benefit pension plan
or plans. To the extent that service is relevant for participation and vesting
(but not for purposes of benefit calculation) under any plan provided by the
Purchaser pursuant to the next preceding sentence, the Purchaser shall credit
Transferred Salaried Employees under such plan for service on or before the
Closing Date to the extent that such service would have been credited to them
under the terms of the Seller's Plans as they existed immediately prior to the
Closing Date.
(f) Purchaser Severance Plan. Effective as of the Closing
Date, the Purchaser shall provide the Transferred Salaried Employees with a
severance benefit that will provide such Transferred Salaried Employees, for a
period of twelve months after the Closing Date, with the right to receive
severance pay and benefits (calculated and payable in a manner comparable to the
ANC Severance Policy as in effect on the date hereof) in the event, and only in
the event, of any one of the following: (i) such Transferred Salaried Employee's
employment with the Purchaser (or its Affiliates) is terminated by the Purchaser
without cause (it being understood that "cause" shall include, without
limitation, unacceptable performance); (ii) the Purchaser makes a significant
reduction in such Transferred Salaried Employee's salary and as a result such
Transferred Salaried Employee resigns from his/her employment with the
Purchaser; or (iii) such Transferred Salaried Employee is required by the
Purchaser to relocate to another facility of the Purchaser or its Affiliates and
such other facility is not within a 50 mile radius of the location where such
Transferred Salaried Employee works, and as a result such Transferred Salaried
Employee resigns from his or her employment with the Purchaser. The Purchaser
will use its best efforts to notify any Transferred Salaried Employee of any
intentions by it to relocate such employee beyond such 50 mile radius, and such
notice will be given as soon as practicable during the twelve-month period.
Purchaser acknowledges that it is not Purchaser's intention to avoid severance
otherwise payable during the twelve-month period by delaying notifying employees
of planned relocations until after the expiration of such period.
(g) Workers' Compensation; Short-term Disability. The Seller
shall retain all obligations to administer claims for Workers' Compensation
payments which have been made by Transferred Employees prior to the Closing Date
or which may be made by Transferred Employees on or after the Closing Date with
respect to events giving rise to such claims that occurred prior to the Closing
Date and shall satisfy such obligations and make such payments in accordance
with Seller's policies in effect as of the Closing Date. The Seller shall also
retain all obligations for short-term disability benefits due to Transferred
Employees for all events giving rise to such benefits occurring prior to the
Closing Date, including, without limitation, all medical and related payments,
in accordance with Seller's
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45
policies in effect as of the Closing Date. The Purchaser shall retain all
obligations to administer all claims for Workers' Compensation payments which
may be made by Transferred Employees on or after the Closing Date other than
claims for which the event giving rise to such claims occurred prior to the
Closing Date and shall satisfy such obligations and make such payments in
accordance with Purchaser's policies. The Purchaser shall also retain all
obligations for short-term disability benefits for all events giving rise to
such benefits that occur on or after the Closing Date, including, without
limitation, all medical and related payments in accordance with Purchaser's
policies. For purposes of this Section 6.02(g), the "event" giving rise to an
"occupational disease" claim or a "progressive occupational injury" claim shall
be deemed to be the making of such claim.
(h) Vacation Accruals. As of the Closing, the Purchaser shall
assume all liabilities of the Seller with respect to the Transferred Employees
employed by the Purchaser for accrued vacation under the vacation policies
applicable to such Transferred Employees as in effect on the Closing Date.
(i) Notices. Other than as expressly provided in this Article
VI, the Seller shall give any notices required by law and shall take whatever
other actions with respect to the Plans as may be necessary to carry out the
arrangements described in this Section 6.02.
(j) SUB. For any non-union employees having a supplemental
unemployment benefit, the liabilities for such benefits shall be consistent with
Section 6.07(c) hereof.
SECTION 6.03. Performance Plans. Effective as of the Closing,
the Seller shall cause those Transferred Employees who are participants in the
Management Incentive Plan and the Business Unit Incentive Plan or any hourly
gain sharing or continuous improvement plans (the "Performance Plans") to cease
participation in the Performance Plans. The Seller shall pay to such Transferred
Employees a bonus which shall be equal to the pro rata portion of the bonus such
Transferred Employees would receive under the Performance Plans based upon
service through the Closing Date and determined by a judgment of performance
results through the Closing Date. The amount of such bonus shall be paid at the
time such bonus would have otherwise been paid under the terms of the relevant
Performance Plan. The Seller also assumes all obligations under the deferred
compensation provisions of the Management Incentive Plan.
SECTION 6.04. Transition Services. The Seller and the
Purchaser agree that for a period of approximately twelve months after the
Closing Date, certain transition services will be needed by Purchaser relating
to testing, accounting, payroll, benefit plan administration and other matters
in order for the Purchaser to effectively operate the Business. The Seller
agrees to make available both Business Employees not offered employment by the
Purchaser and other of its employees (both groups of employees being,
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46
collectively, the "Corporate Employees") to provide such services on an interim
basis for a fee, pursuant to a separate Transition Services Agreement which will
be executed by the Seller and the Purchaser before the Closing Date and which
will contain terms to be mutually agreed upon. The Purchaser agrees that it
shall reimburse the Seller for all cash amounts paid to and for the cost of
benefits provided for, any such Business Employee (who is a Corporate Employee
and who is terminated by the Seller no later than the date of the expiration or
termination, as the case may be, of the Transition Services Agreement) pursuant
to the ANC Severance Policy as in effect on the date hereof.
SECTION 6.05. Indemnification for Claims. The Purchaser shall
indemnify and hold harmless the Seller from any and all claims against the
Seller by any Salaried Business Employee with respect to that Salaried Business
Employee's claim for damages (not including severance) resulting from an
employment decision made by the Purchaser, whether such decision is made prior
to or after the Closing Date. The Purchaser shall also indemnify and hold
harmless the Seller against any and all costs (including counsel fees)
associated with defending against such claims. Notwithstanding the above, such
indemnification shall not apply to any claims for severance or damages brought
against the Seller by any such employees who accept an offer of employment by
the Purchaser which is a Qualifying Offer of Employment, but who claim their
employment circumstances nevertheless entitle them to severance from the Seller
under the ANC Severance Policy. The Seller shall indemnify and hold harmless the
Purchaser from any and all claims (including counsel fees incurred in defending
such claims) against the Purchaser by Salaried Employees that arise from
representations made by the Seller to such employees regarding the future
employment of such employees.
SECTION 6.06. Welfare Benefits. The Seller shall continue to
be obligated on and after the Closing Date to provide retiree medical and life
benefits currently offered to retirees under its welfare benefit plans (to the
extent that, and so long as such benefits continue to be offered to retirees in
the future) to Salaried Business Employees who (a) are either employed by the
Purchaser on the Closing Date or decline an offer of employment by the Purchaser
due to a failure of such offer to comply with the ANC Severance Policy
Circumstances, and (b) have satisfied the age and service eligibility
requirements under such plans as of the Closing Date. It is understood that the
liabilities for such retiree medical and life benefits shall be Closing Date
Benefit Liabilities or St. Louis Benefit Liabilities, as the case may be. The
Purchaser agrees to reimburse the Seller for all retiree medical and life
benefits paid by the Seller at any time in the future under such plans for such
Salaried Business Employees who are terminated by action of the Purchaser within
one year of the Closing Date or for such employees who decline the Purchaser's
offer of employment due to ANC Severance Policy Circumstances.
SECTION 6.07. Union Employees. (a) Recognition of Unions.
Except as provided in Section 6.07(b) below, the Purchaser agrees, subject to
the rights of any affected
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Hourly Business Employees covered by a collective bargaining agreement (the
"Union Employees") regarding representation, to continue to recognize the unions
listed in Section 3.15 of the Disclosure Schedule as the collective bargaining
agents for such Union Employees, but shall not be obligated to assume the
collective bargaining agreements applicable to such Union Employees.
(b) Steelworker Master Agreement. With respect to those Union
Employees who are covered by the "Master Agreement between American National Can
Company and the United Steelworkers of America" at the Edison, New Jersey and
Laporte, Indiana facilities and the "Basic Agreement between American National
Can Company and the United Steelworkers of America" at the Hammond, Indiana, the
St. Louis, Missouri and the St. Paul, Minnesota facilities, the Purchaser agrees
to be obligated to enter into collective bargaining agreements on the same terms
as the relevant current collective bargaining agreements with such unions,
except as otherwise modified by a separate letter agreement between the
Purchaser and such union, a copy of which is attached hereto as Exhibit 6.07.
(c) EEP and SUB. The Seller will retain all accounting
accruals with respect to the Expanded Employment Program and the Supplemental
Unemployment Benefit Plan presently in effect for certain Union Employees under
the relevant collective bargaining agreement. The Seller agrees to retain
liability for any benefits earned under the Expanded Employment Program up to
the Closing Date. Except in the case of the St. Louis Rationalization Costs, the
Seller agrees to retain liability for any continuous period of payments under
the Supplemental Unemployment Benefit Plan resulting from any action taken by
the Seller before the Closing Date. The Seller will continue its payroll systems
from its Supplemental Unemployment Benefit Plan and payroll departments for any
such continuous period of payments.
SECTION 6.08. Indemnification for Union Claims. The Purchaser
agrees to indemnify and hold the Seller harmless from any and all claims by any
Union Employees or their representatives as a result of any action of the
Purchaser to change the terms and conditions of the collective bargaining
agreements applicable to such Union Employees (including the execution by the
Purchaser of the letter agreements referred to in Section 6.07(b) above), from
any and all costs (including plant closing costs and reasonable counsel fees)
associated with such action and defending against the same.
SECTION 6.09. Multiemployer Plans. On and after the Closing
Date, the Purchaser shall assume the Seller's obligations to contribute to each
of the Seller's Multiemployer Plans applicable to the Union Employees. With
respect to each such Multiemployer Plan, (a) the Purchaser shall contribute
substantially the same number of contribution base units for which the Business
had an obligation to contribute with respect to the Union Employees under the
applicable collective bargaining agreement immediately prior to the Closing
Date, (b) the Purchaser shall furnish bonds and/or escrows, or shall obtain a
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waiver of any requirements to furnish bonds and/or escrows or shall comply with
alternatives acceptable to any the Seller's Multiemployer Plans, in order to
ensure compliance with the terms of Section 4204 of ERISA and the regulations
thereunder, (c) in the event the Purchaser incurs a complete or partial
withdrawal (as defined in Sections 4203 and 4205 of ERISA) with respect to any
of the Seller's Multiemployer Plans applicable to the Seller's Union Employees,
the Purchaser shall cause any resulting withdrawal liability to be timely paid
and if such withdrawal occurs within the first five plan years following the
Closing Date, and the Purchaser shall fail to pay such withdrawal liability in a
timely manner to the relevant Multiemployer Plan, the Seller agrees it will be
secondarily liable for such payment as required by Section 4204 of ERISA and (d)
the Purchaser shall notify each of the Seller's Multiemployer Plans of this
transaction and, if applicable, satisfy such plan that this transaction complies
with the terms of Section 4204 of ERISA, and the Seller shall cooperate with the
Purchaser in connection therewith.
SECTION 6.10. WARN Act. In the event the Purchaser does not
continue all the operations of the Business and/or does not employ all Business
Employees after the Closing Date, the Purchaser shall be liable and responsible
for any notification required to be provided under the Worker Adjustment and
Retraining Notification Act, and the Purchaser shall indemnify the Seller for
any claims arising out of any breach of this covenant. The Seller shall be
obligated to provide the Purchaser with reasonable notice of any termination of
employment of Business Employees occurring between the date of the Agreement as
set forth above and the Closing Date, and provide the Purchaser with such
further related information as shall be reasonably requested by the Purchaser to
assist it in complying with its obligations under this Section 6.10.
SECTION 6.11. St. Louis Employees. Notwithstanding anything
herein to the contrary, the Purchaser shall not be obligated to make offers of
employment to the St. Louis Employees in accordance with Sections 6.01(a) and
(b) until 10 days prior to the St. Louis Closing Date. From and after the St.
Louis Closing Date, the parties' obligations to and responsibilities with
respect to the St. Louis Employees shall be governed by the terms of this
Article VI. Until the St. Louis Closing Date, the Purchaser shall have no
obligations to the St. Louis Employees.
SECTION 6.12. San Leandro Employees. Prior to the Closing
Date, the Purchaser agrees to offer employment to those employees at the
Business' San Leandro, California facility employed in the Business and the
parties' obligations and responsibilities to such employees shall be governed by
the terms of this Article VI. The Seller shall retain and remain responsible for
all liabilities and obligations to those employees at the San Leandro,
California facility employed in the Seller's beverage business and such
employees shall not be governed by the terms of this Article VI.
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SECTION 6.13. No Rights of Employees. Without limiting the
generality of Section 11.09, this Article VI is for the sole benefit of the
parties hereto and their successors and permitted assigns and nothing herein,
express or implied, is intended to or shall confer upon any current or former
employee of the Seller any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Article VI.
ARTICLE VII
TAX MATTERS
SECTION 7.01. Sales, Use and Other Transfer Taxes. The
Purchaser shall provide the Seller with resale exemption certificates as is
appropriate. The Purchaser shall be responsible for any and all excise, sales,
value added, use and similar Taxes, levies, charges and fees incurred in
connection with the transactions contemplated by this Agreement. The Seller
shall be responsible for any and all real estate transfer and conveyance taxes
and similar Taxes, levies, charges and fees incurred in connection with the
transactions contemplated by this Agreement. Except as provided in the two
previous sentences, any and all other registration, stamp, franchise, transfer,
and similar Taxes, levies, charges and fees incurred in connection with the
transactions contemplated by this Agreement shall be shared and paid equally by
the Purchaser and the Seller. The Purchaser and the Seller agree to cooperate in
the filing of all necessary documentation and all Tax returns, reports and forms
("Returns") with respect to all such Taxes, including any available pre-sale
filing procedure. The Purchaser shall indemnify the Seller for all Taxes (other
than income taxes) that may be imposed as a result of the transactions
contemplated by Section 2.01(b).
SECTION 7.02. Proration of Certain Charges. Except as
otherwise provided for on the Closing Balance Sheet or treated as an Assumed
Liability or an Excluded Liability, the following taxes, charges and payments
("Charges") shall be prorated on a per diem basis and apportioned between the
Seller and Purchaser as of the date of the Closing: real property, use,
intangible taxes, utility charges, rental or lease charges, license fees,
general assessments imposed with respect to the Purchased Assets and employee
payrolls. The Seller shall be liable for that portion of the Charges relating
to, or arising in respect of, periods on or prior to the date of the Closing and
the Purchaser shall be liable for that portion of the Charges relating to, or
arising in respect of, any period after the date of the Closing. Not less than
five (5) Business Days prior to the Closing Date, the Seller shall submit to
Purchaser a schedule showing the categories and estimated amounts of all such
Charges to be so prorated. The parties shall agree on a final proration schedule
therefor prior to Closing and shall deliver any amounts due at the Closing.
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SECTION 7.03. Treatment of Indemnity Payments. All payments
made by the Seller or the Purchaser, as the case may be, to or for the benefit
of the other party pursuant to any indemnification obligations under this
Agreement shall be treated as adjustments to the purchase price for Tax purposes
and such agreed treatment shall govern for purposes of this Agreement.
ARTICLE VIII
CONDITIONS TO THE CLOSING
SECTION 8.01. Conditions to Obligations of the Seller. The
obligations of the Seller to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) Representations and Warranties; Covenants. The
representations and warranties of the Purchaser contained in this
Agreement shall have been true and correct in all material respects
when made and shall be true and correct in all material respects as of
the Closing, with the same force and effect as if made as of the
Closing, all the covenants contained in this Agreement to be complied
with by the Purchaser on or before the Closing shall have been complied
with in all material respects, and the Seller shall have received a
certificate of the Purchaser to such effect signed by a duly authorized
officer thereof;
(b) HSR Act. Any waiting period (and any extension thereof)
under the HSR Act applicable to the purchase of the Assets contemplated
hereby shall have expired or shall have been terminated;
(c) No Order. No United States or state governmental
authority or other agency or commission or United States or state court
of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, injunction,
judgment, decree or other order (whether temporary, preliminary or
permanent) which is in effect and has the effect of making such
transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions; provided,
however, that each party hereto shall use its reasonable best efforts
to oppose and/or have any such order, judgment, decree or injunction
vacated and to avail itself of all rights of appeal therefor, unless it
has determined, in its reasonable judgment, that such efforts would not
have a substantial likelihood of success, it being understood that this
proviso shall be satisfied by the Purchaser if the Purchaser takes the
steps contemplated by Section 5.06(b) with respect to orders,
judgments, decrees or injunctions contemplated thereby;
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(d) Assumption Agreement. The Purchaser shall have executed
and delivered to the Seller a counterpart of the Assumption Agreement;
(e) Resolutions. The Seller shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of
the Purchaser, of the resolutions duly and validly adopted by the Board
of Directors of the Purchaser evidencing its authorization of the
execution and delivery of this Agreement and the Ancillary Agreements
and the consummation of the transactions contemplated hereby and
thereby;
(f) Incumbency Certificate. The Seller shall have received a
certificate of the Secretary or an Assistant Secretary of the Purchaser
certifying the names and signatures of the officers of the Purchaser
authorized to sign this Agreement and the other documents to be
delivered hereunder;
(g) Legal Opinion. The Seller shall have received from
Winthrop, Stimson, Putnam & Roberts, an opinion, addressed to the
purchaser and dated the Closing Date, substantially in the form of
Exhibit 8.01(g);
(h) Tolling Agreement. The Purchaser shall have executed and
delivered to the Seller a counterpart of a Tolling Agreement,
substantially in the form of Exhibit 8.01(h) (the "Tolling Agreement"),
with respect to the St. Louis Facility with a term beginning on the
Closing Date and ending on the St. Louis Closing Date;
(i) Container Supply Agreement. The Purchaser shall have
executed and delivered to the Seller a Container Supply Agreement,
substantially in the form of Exhibit 8.01(i); and
(j) French Government Approval. The Seller shall have
received the French Government Approval.
SECTION 8.02. Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) Representations and Warranties; Covenants. The
representations and warranties of the Seller contained in this
Agreement shall have been true and correct in all material respects
when made and shall be true and correct in all material respects as of
the Closing, with the same force and effect as if made as of the
Closing, all the covenants contained in this Agreement to be complied
with by the Seller on or before the Closing shall have been complied
with in all material respects
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and the Purchaser shall have received a certificate of the Seller to
such effect signed by a duly authorized officer thereof;
(b) HSR Act. Any waiting period (and any extension thereof)
under the HSR Act applicable to the purchase of the Assets contemplated
hereby shall have expired or shall have been terminated;
(c) No Order. No United States or state governmental authority
or other agency or commission or United States or state court of
competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, injunction,
judgment, decree or other order (whether temporary, preliminary or
permanent) which is in effect and has the effect of making the
transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions; provided,
however, that each party hereto shall use its reasonable best efforts
to oppose and/or have any such order, judgment, decree or injunction
vacated and to avail itself of all rights of appeal therefor, unless it
has determined, in its reasonable judgment, that such efforts would not
have a substantial likelihood of success, it being understood that this
proviso shall be satisfied by the Purchaser if the Purchaser takes the
steps contemplated by Section 5.06(b) with respect to orders,
judgments, decrees or injunctions contemplated thereby;
(d) Ancillary Agreements. The Seller shall have executed and
delivered to the Purchaser counterparts of each of the Ancillary
Agreements;
(e) Resolutions, Certificate of Incorporation and By-Laws. The
Purchaser shall have received true and complete copies, certified by
the Secretary or an Assistant Secretary of the Seller, of (i) the
resolutions duly and validly adopted by the Board of Directors of the
Seller evidencing its authorization of the execution and delivery of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby, (ii) the Certificate of
Incorporation of the Seller and (iii) the By-laws of the Seller;
(f) Incumbency Certificate. The Purchaser shall have
received a certificate of the Secretary or an Assistant Secretary of
the Seller certifying the names and signatures of the officers of the
Seller authorized to sign this Agreement and the other documents to be
delivered hereunder;
(g) License Agreement. The Seller shall have executed and
delivered to the Purchaser counterparts of the License Agreement;
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53
(h) Legal Opinion. The Purchaser shall have received from
Shearman & Sterling, an opinion, addressed to the Purchaser and dated
the Closing Date, substantially in the form of Exhibit 8.02(h);
(i) Consents. The Purchaser shall have received duly
executed copies of all consents, approvals, authorizations, actions,
filings or notifications listed on Schedule 8.02(i);
(j) Non-Competition Agreement. The Seller shall have
executed and delivered to the Purchaser a Non-Competition Agreement
(with a term of two (2) years), substantially in the form of Exhibit
8.02(j);
(k) Transition Services Agreements. The Seller shall have
executed and delivered to the Purchaser a Transition Services Agreement
with respect to services in Neenah, Wisconsin, substantially in the
form of Exhibit 8.02(k)(i) and a Transition Services Agreement with
respect to services in Chicago, Illinois, substantially in the form of
Exhibit 8.02(k)(ii);
(l) Title Insurance. The Purchaser shall, at its own
expense, have obtained from the Title Company title insurance insuring
fee simple title to the Owned Real Property, subject only to Permitted
Encumbrances;
(m) Permits. The Purchaser shall have obtained all approvals,
permits, licenses and registrations from all governmental authorities
which, if not obtained, either individually or in the aggregate, would
have a Material Adverse Effect on the Purchaser's ability to operate
the Business or the Assets in a manner consistent with the Seller's
past practices, or the Purchaser shall have received reasonable
assurances from the relevant governmental authorities that such
approvals, permits, licenses and registrations will be forthcoming
within a reasonable period of time after the Closing, that the
Purchaser will be able to operate the Business after the Closing in a
manner consistent with the Seller's past practices and that the
Purchaser's operation of the Business after the Closing and prior to
obtaining any such approval, permit, license or registration will not
give rise to any material liability;
(n) Financing. The Purchaser shall have obtained the
financing described in the commitment letter referred to in Section
4.05 hereof; and
(o) Tolling Agreement. The Seller shall have executed and
delivered to the Purchaser a counterpart of the Tolling Agreement.
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ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Survival. Subject to the limitations and other
provisions of this Agreement, the representations and warranties of the parties
hereto contained herein shall survive the Closing and shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Seller
or the Purchaser, for a period of one year after the Closing Date; provided,
however, that (a) the representations and warranties contained in Section 3.10
shall remain in full force and effect for a period of three years after the
Closing Date and (b) the representations and warranties relating to the Seller's
title to the Assets (other than the Owned Real Property) contained in Section
3.12(a) and the representations and warranties contained in Section 3.16 shall
remain in full force and effect until the applicable period under the statute of
limitations therefor has expired. The covenants and agreements of the parties
contained in this Agreement shall survive the Closing. The indemnities provided
for in Sections 9.02(a)(i) and 9.03(a)(i) shall survive with respect to any
claim of a breach of any specific representation, warranty, covenant or
agreement for the period for which such representation, warranty, covenant or
agreement survives pursuant to this Section 9.01 (except with respect to any
claim for indemnification as to which the indemnified party shall have given
notice in accordance with the requirements of this Article IX to the
indemnifying party prior to such date, which claim shall survive until payment
in full by the indemnifying party of any liabilities or damages arising out of
such claim following a final settlement or non-appealable judgment with respect
to such claim).
SECTION 9.02. Indemnification by the Purchaser. (a) The
Purchaser agrees, subject to the other terms and conditions of this Agreement to
indemnify the Seller and its Affiliates, officers, directors, employees, agents,
successors and assigns (as used in this Section 9.02, each an "Indemnified
Party") against and hold them harmless from all liabilities, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees and expert
witness fees) suffered, sustained, incurred or required to be paid by an
Indemnified Party (collectively, the "Seller Damages") arising out of:
(i) the breach of any representation, warranty, covenant
or agreement of the Purchaser in this Agreement;
(ii) the conduct of the Business by the Purchaser
following the Closing;
(iii) the Assumed Liabilities; and
(iv) any and all violations of Environmental Law relating to
the Business which occur after the Closing, regardless of whether any
conditions giving rise to such violations existed or occurred prior to
the Closing so long as such conditions
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were not a violation of Environmental Law prior to the Closing and so
long as such conditions were the result of the operation of the
Business both prior to and after the Closing.
Anything in Section 9.01 to the contrary notwithstanding, no claim may be
asserted nor may any action be commenced against the Purchaser for breach of any
representation, warranty, covenant or agreement contained herein, unless written
notice of such claim or action is received by the Purchaser describing in
reasonable detail the facts and circumstances with respect to the subject matter
of such claim or action on or prior to the date on which the representation,
warranty, covenant or agreement on which such claim or action is based ceases to
survive as set forth in Section 9.01, irrespective of whether the subject matter
of such claim or action shall have occurred before or after such date.
(b) No claim may be made against the Purchaser for
indemnification pursuant to Section 9.02(a)(i) with respect to any individual
item of Seller Damages, unless such item exceeds $50,000 and unless the
aggregate of all Seller Damages with respect to Section 9.02(a)(i) shall exceed
1% of the Cash Amount and the Purchaser shall not be required to pay or be
liable for the first 1% of the Cash Amount in aggregate amount of any Seller
Damages. No Indemnified Party shall be indemnified pursuant to Section
9.02(a)(i) with respect to any additional individual item of Seller Damages if
the aggregate of all Seller Damages for which the Indemnified Parties have
received indemnification pursuant to Section 9.02(a)(i) shall have exceeded an
amount equal to 10% of the Cash Amount. Notwithstanding the foregoing, the
limitations set forth in this Section 9.02(b) shall not apply to claims for
indemnification made against the Purchaser pursuant to Sections 6.05, 6.08, 6.10
or 7.01 or claims for indemnification made against the Purchaser for breach of
its reimbursement obligations under Sections 5.14, 6.01(a), 6.04 or 6.06.
(c) Payments by the Purchaser pursuant to Section 9.02(a)
shall be limited to the amount of any Seller Damages that remains after
deducting therefrom any Tax benefit to the Indemnified Party and any insurance
proceeds and any indemnity, contribution or other similar payment recovered by
the Indemnified Party from any third party with respect thereto; provided,
however, that an Indemnified Party shall use its best efforts to recover all
such insurance proceeds and indemnity, contribution or other similar payments to
which it may be entitled. A Tax benefit will be considered to be recognized by
the Indemnified Party for purposes of this Section 9.02 in the tax period in
which the indemnity payment occurs, and the amount of the Tax benefit shall be
determined by applying the alternate minimum tax rate for corporations,
regardless of the tax rate used by such Indemnified Party in calculating its
taxes in the tax period in which the indemnity payment occurs.
(d) An Indemnified Party shall give the Purchaser prompt
written notice of any claim, assertion, event or proceeding by or in respect of
a third party of which it has knowledge concerning any Seller Damages as to
which an Indemnified Party may request
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56
indemnification hereunder or any Seller Damages as to which the 1% of the Cash
Amount referred to in Section 9.02(b) may be applied. If the Purchaser
acknowledges in writing to the Indemnified Party its obligation to indemnify
such Indemnified Party hereunder for all Seller Damages with respect to such
third party claim or proceeding, the Purchaser shall have the right to direct,
through counsel of its own choosing, the defense or settlement of any such claim
or proceeding at its own expense. If the Purchaser elects to assume the defense
of any such claim or proceeding, the Indemnified Party may participate in such
defense, but in such case the expenses of the Indemnified Party shall be paid by
the Indemnified Party. The Indemnified Party shall provide the Purchaser with
access to its records and personnel relating to any such claim, assertion, event
or proceeding during normal business hours and shall otherwise cooperate with
the Purchaser in the defense or settlement thereof, and the Purchaser shall
reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in
connection therewith. Upon assumption of the defense of any such claim or
proceeding by the Purchaser, the Indemnified Party shall not pay, or permit to
be paid, any part of any claim or demand arising from such asserted liability,
unless the Purchaser consents in writing to such payment or unless a final
judgment from which no appeal may be taken by or on behalf of the Purchaser is
entered against the Indemnified Party for such liability. No such third party
claim may be settled by the Purchaser without the written consent of the
Indemnified Party, which consent shall not be unreasonably withheld. If the
Purchaser shall fail to defend or fail to prosecute or withdraws from such
defense, the Indemnified Party shall have the right to undertake the defense or
settlement thereof, at the Purchaser's expense. If the Indemnified Party assumes
the defense of any such claim or proceeding pursuant to this Section 9.02(c) and
proposes to settle such claim or proceeding prior to a final judgment thereon or
to forego appeal with respect thereto, then the Indemnified Party shall give the
Purchaser prompt written notice thereof and the Purchaser shall have the right
to participate in the settlement or assume or reassume the defense of such claim
or proceeding. Notwithstanding anything to the contrary herein, in the event
that the Purchaser is not liable for a third party claim because the aggregate
Seller Damages for which the Indemnified Parties shall have received
indemnification shall have exceeded an amount equal to 10% of the Cash Amount,
the Indemnified Party shall direct the defense of any such third party claim.
(e) The Purchaser shall have no liability under any provision
of this Agreement for any Seller Damages to the extent that such Seller Damages
relate to actions taken by the Seller or any of its Affiliates after the Closing
Date and in no event shall the Purchaser be liable for consequential damages.
The Seller shall take all reasonable steps to mitigate all such Seller Damages
upon and after becoming aware of any event which could reasonably be expected to
give rise to such Seller Damages.
(f) The Seller hereby acknowledges and agrees that the sole
and exclusive remedy of Indemnified Parties with respect to any and all claims
relating to the subject matter of this Agreement shall be pursuant to the
indemnification provisions set forth in this
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Article IX. In furtherance of the foregoing, the Seller hereby waives, to the
fullest extent permitted under applicable law, any and all rights, claims and
causes of action it may have against the Purchaser arising under or based upon
any Federal, state or local statute, law, ordinance, rule or regulation
(including, without limitation, any such rights, claims or causes of action
arising under or based upon common law or otherwise, but excluding, however, any
such rights, claims or causes of action based upon fraud).
SECTION 9.03. Indemnification by the Seller. (a) The Seller
agrees, subject to the other terms and conditions of this Agreement to indemnify
the Purchaser and its stockholders, Affiliates, officers, directors, employees,
agents, successors and assigns (as used in this Section 9.03, each an
"Indemnified Party") against and hold them harmless from all liabilities,
damages, costs and expenses (including, without limitation, reasonable
attorneys' fees and expert witness fees) suffered, sustained, incurred or
required to be paid by an Indemnified Party (collectively, the "Purchaser
Damages") arising out of:
(i) the breach of any representation, warranty, covenant
or agreement of the Seller in this Agreement;
(ii) any and all violations of Environmental Law relating
to the Business that exist at or prior to the Closing; and
(iii) the Excluded Liabilities.
Anything in Section 9.01 to the contrary notwithstanding, no claim may be
asserted nor may any action be commenced against the Seller for breach of any
representation, warranty, covenant or agreement contained herein, unless written
notice of such claim or action is received by the Seller describing in
reasonable detail the facts and circumstances with respect to the subject matter
of such claim or action on or prior to the date on which the representation,
warranty, covenant or agreement on which such claim or action is based ceases to
survive as set forth in Section 9.01, irrespective of whether the subject matter
of such claim or action shall have occurred before or after such date.
(b) No claim may be made against the Seller for
indemnification pursuant to Section 9.03(a)(i) or 9.03(a)(iii) with respect to
any individual item of Purchaser Damages, unless such item exceeds $50,000 and
unless the aggregate of all Purchaser Damages with respect to Sections
9.03(a)(i) and 9.03(a)(iii) combined shall exceed 1% of the Cash Amount and the
Seller shall not be required to pay or be liable for the first 1% of the Cash
Amount in aggregate amount of any such Purchaser Damages. No Indemnified Party
shall be indemnified pursuant to Section 9.03(a)(i) with respect to any
additional individual item of Purchaser Damages if the aggregate of all
Purchaser Damages for which the Indemnified Parties have received
indemnification pursuant to Section 9.03(a)(i) shall have exceeded an amount
equal to 10% of the Cash Amount. Notwithstanding the foregoing, the
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limitations set forth in this Section 9.03(b) shall not apply to claims for
indemnification made against the Seller pursuant to Sections 2.01(e), 5.07,
5.08(e), 5.15 or 6.05.
(c) Payments by the Seller pursuant to Section 9.03(a) shall
be limited to the amount of any Purchaser Damages that remains after deducting
therefrom (i) any Tax benefit to the Indemnified Parties, (ii) any insurance
proceeds and any indemnity, contribution or other similar payment recovered by
the Indemnified Parties from any third party with respect thereto; provided,
however, that an Indemnified Party shall use its best efforts to recover all
such insurance proceeds and indemnity, contribution or other similar payments to
which it may be entitled, (iii) any reserves provided for the item in question
in the Closing Balance Sheet and (iv) any adjustments to the Purchase Price paid
pursuant to Section 2.07 with respect to the subject matter in dispute. A Tax
benefit will be considered to be recognized by an Indemnified Party for purposes
of this Section 9.03 in the tax period in which the indemnity payment occurs,
and the amount of the Tax benefit shall be determined by applying the alternate
minimum tax rate for corporations, regardless of the tax rate used by such
Indemnified Party in calculating its taxes in the tax period in which the
indemnity payment occurs.
(d) An Indemnified Party shall give the Seller prompt written
notice of any claim, assertion, event or proceeding by or in respect of a third
party of which such Indemnified Party has knowledge concerning any Purchaser
Damages as to which such Indemnified Party may request indemnification hereunder
or any Purchaser Damages as to which the 1% of the Cash Amount referred to in
Section 9.03(b) may be applied. If the Seller acknowledges in writing to the
Indemnified Party its obligation to indemnify such Indemnified Party hereunder
for all Purchaser Damages with respect to such third party claim or proceeding,
the Seller shall have the right to direct, through counsel of its own choosing,
the defense or settlement of any such claim or proceeding at its own expense. If
the Seller elects to assume the defense of any such claim or proceeding, the
Indemnified Party may participate in such defense, but in such case the expenses
of the Indemnified Party shall be paid by the Indemnified Party. The Indemnified
Party shall provide the Seller with access to its records and personnel relating
to any such claim, assertion, event or proceeding during normal business hours
and shall otherwise cooperate with the Seller in the defense or settlement
thereof, and the Seller shall reimburse the Indemnified Party for all its
reasonable out-of-pocket expenses in connection therewith. Upon assumption of
the defense of any such claim or proceeding by the Seller, the Indemnified Party
shall not pay, or permit to be paid, any part of any claim or demand arising
from such asserted liability unless the Seller consents in writing to such
payment or unless a final judgment from which no appeal may be taken by or on
behalf of the Seller is entered against the Indemnified Party for such
liability. No such third party claim may be settled by the Seller without the
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld. If the Seller shall fail to defend or fail to prosecute
or withdraws from such defense, the Indemnified Party shall have the right to
undertake the defense or settlement thereof, at the Seller's expense. If the
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59
Indemnified Party assumes the defense of any such claim or proceeding pursuant
to this Section 9.03(d) and proposes to settle such claim or proceeding prior to
a final judgment thereon or to forego any appeal with respect thereto, then the
Indemnified Party shall give the Seller prompt written notice thereof and the
Seller shall have the right to participate in the settlement or assume or
reassume the defense of such claim or proceeding. Notwithstanding anything to
the contrary herein, (i) in the event that the Seller is not liable for a third
party claim because the aggregate Purchaser Damages for which the Indemnified
Parties shall have received indemnification shall have exceeded an amount equal
to 10% of the Cash Amount, the Indemnified Party shall direct the defense of any
such third party claim and (ii) in the event that any such claim, assertion,
event or proceeding by or in respect of a third party involves a customer of the
Purchaser and the Seller has elected to assume the defense thereof, the Seller
shall cooperate with the Purchaser to settle and/or resolve such claim or
proceeding in an expeditious manner and shall permit the Purchaser, at the
Purchaser's election, to participate fully in the defense thereof, with all
costs of the Purchaser incurred with respect to its participation in such
defense being the responsibility of the Purchaser.
(e) The Purchaser hereby acknowledges and agrees that the sole
and exclusive remedy of Indemnified Parties with respect to any and all claims
relating to the subject matter of this Agreement shall be pursuant to the
indemnification provisions set forth in this Article IX. In furtherance of the
foregoing, the Purchaser hereby waives, to the fullest extent permitted under
applicable law, any and all rights, claims and causes of action it may have
against the Seller arising under or based upon any Federal, state or local
statute, law, ordinance, rule or regulation (including, without limitation, any
such rights, claims or causes of action arising under or based upon common law
or otherwise, but excluding, however, any such rights, claims or causes of
action based upon fraud).
(f) The Seller shall have no liability under any provision of
this Agreement for any Purchaser Damages to the extent that such Purchaser
Damages relate to actions taken by the Purchaser or any of its Affiliates after
the Closing Date and in no event shall the Seller be liable for consequential
damages. The Purchaser shall take all reasonable steps to mitigate all such
Purchaser Damages upon and after becoming aware of any event which could
reasonably be expected to give rise to such Purchaser Damages.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.01. Termination. This Agreement may be terminated
at any time prior to the Closing:
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(a) by the mutual written consent of the Seller and the
Purchaser;
(b) by the Purchaser (i) if any Government Antitrust Authority
shall have commenced, or indicated its intention to commence,
litigation challenging the transactions contemplated by this Agreement
or (ii) if the Seller shall not have received the French Government
Approval within 30 days of the date of this Agreement; or
(c) by either the Seller or the Purchaser, if the Closing
shall not have occurred prior to December 31, 1995; provided, however,
that the right to terminate this Agreement under this Section 10.01(c)
shall not be available to any party whose failure to fulfill any
obligation under this Agreement shall have been the cause of, or shall
have resulted in, the failure of the Closing to occur prior to such
date.
Time shall be of the essence in this Agreement.
SECTION 10.02. Effect of Termination. In the event of
termination of this Agreement as provided in Section 10.01, this Agreement shall
forthwith become void and there shall be no liability on the part of any party
hereto (a) except as set forth in Section 5.05 and Section 11.01 and (b) nothing
herein shall relieve either party from liability for any willful breach hereof.
SECTION 10.03. Waiver. At any time prior to the Closing, any
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto or (c) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party to be
bound thereby and only for the specific purpose thereof.
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the negotiation and consummation of the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses, whether or not the Closing shall have occurred.
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61
SECTION 11.02. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be delivered
personally or sent by telecopier or by a nationally recognized overnight
courier, postage prepaid, and shall be deemed to have been duly given when so
delivered personally or sent by telecopier, with receipt confirmed, or one (1)
Business Day after the date of deposit with such nationally recognized overnight
courier, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to the Seller:
8770 West Bryn Mawr Avenue
Chicago, IL 60631-3542
Attention: Corporate Secretary
Telecopy: (312) 399-3527
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: David W. Heleniak
Telecopy: (212) 848-7179
(b) if to the Purchaser:
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
Telecopy: (203) 975-7902
with a copy to:
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
Stamford, CT 06904
Attention: G. William Sisley
Telecopy: (203) 965-8226
SECTION 11.03. Public Announcements. Except as required by
applicable law, no party to this Agreement shall make, or cause to be made, any
public announcements
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62
in respect of this Agreement or the transactions contemplated herein or
otherwise communicate with any news media without the prior written consent of
the other party, and the parties shall cooperate as to the timing and contents
of any such announcement.
SECTION 11.04. Headings. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
SECTION 11.06. Disclosure Schedule. Disclosure of information
in any portion of the Disclosure Schedule shall be deemed disclosure in any
other portion of the Disclosure Schedule.
SECTION 11.07. Entire Agreement. This Agreement and the other
writings referred to herein or delivered pursuant hereto constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and undertakings, both written and oral, other
than the Confidentiality Agreement, with respect to the subject matter hereof
and except as otherwise expressly provided herein.
SECTION 11.08. Assignment. This Agreement shall not be
assigned by either party hereto without the prior written consent of the other
party; provided, however, that either party may, without the consent of the
other party, assign its rights under this Agreement to any Affiliate of such
party now existing or hereafter formed or to any person that shall acquire
(whether by merger, acquisition of the capital stock of such party or otherwise)
all or substantially all of the assets of such party; provided further, however,
that no such assignment shall release such party from its obligations hereunder
without the written consent of the other party.
SECTION 11.09. No Third-Party Beneficiaries. Except for the
provisions of Article IX relating to Indemnified Parties, this Agreement is for
the sole benefit of the parties hereto and their successors and permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other person or entity any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.
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63
SECTION 11.10. Amendment; Waiver. This Agreement may not be
amended or modified except by (a) an instrument in writing signed by the Seller
and the Purchaser or (b) by a waiver in accordance with Section 10.03. Waiver of
any term or condition of this Agreement shall not be construed as a waiver of
any subsequent breach or waiver of the same term or condition, or a waiver of
any other term or condition of this Agreement.
SECTION 11.11. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed entirely in that State.
SECTION 11.12. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 11.13. Parties in Interest. Subject to Section 11.08
hereof, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the parties
hereto.
SECTION 11.14. Actions and Proceedings. (a) All actions and
proceedings arising out of or relating to this Agreement must be brought in any
court of competent jurisdiction in the State of New York and by execution and
delivery of this Agreement each party (i) accepts, generally and
unconditionally, the exclusive jurisdiction of such courts and any related
appellate court and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement and (ii) irrevocably waives any
objection it may now or hereafter have as to the venue of any such suit, action
or proceeding brought in such court or that such court is an inconvenient forum.
THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY
ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT.
(b) The foregoing consents to jurisdiction shall not
constitute general consents to service of process in the State of New York for
any purpose except as provided above and shall not be deemed to confer rights on
any person other than the respective parties to this Agreement and their
respective successors and permitted assigns.
SECTION 11.15. Confidentiality. Notwithstanding anything
herein to the contrary, each party shall hold in strict confidence documents and
information concerning the other, the other's Affiliates and their respective
businesses and properties (including that of the Business) and the transactions
contemplated hereby, except that either party may disclose such documents and
information to (a) any governmental authority reviewing the transactions
<PAGE>
64
contemplated hereby or as required in either party's judgment pursuant to
applicable federal or state laws; or (b) such persons as are required to have
such information in either party's good faith judgment in order to assist either
party in consummating the transactions contemplated hereby, and except that upon
consummation of the transactions contemplated by this Agreement, subject to
Section 5.05 hereof, the Purchaser may disclose such documents and information
to such persons as it may desire in order to carry on the Business.
<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
AMERICAN NATIONAL CAN COMPANY
By /s/ Walter T. Stelzel
---------------------------------------
Title: Senior Executive Vice President
SILGAN CONTAINERS CORPORATION
By /s/ R. Philip Silver
---------------------------------------
Title: Vice President
<PAGE>
SECOND AMENDED AND RESTATED BORROWERS GUARANTY
SECOND AMENDED AND RESTATED GUARANTY (as amended, modified or
supplemented from time to time, this "Guaranty"), dated as of June 18, 1992, as
amended and restated as of December 21, 1993, and as further amended and
restated as of August 1, 1995, made by each of the undersigned (each a
"Guarantor", and together with any other entity that becomes a party to this
Guaranty pursuant to Section 21 hereof, the "Guarantors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement (as
hereinafter defined) shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, Silgan Corporation ("Silgan"), Silgan Containers
Corporation ("Containers"), Silgan Plastics Corporation ("Plastics", and
together with Containers and Silgan, collectively, the "Borrowers", and each a
"Borrower"), the lenders from time to time party thereto (the "Banks"), Bank of
America Illinois, as a Co-Arranger and as Documentation Agent, and Bankers Trust
Company, as a Co-Arranger and as Administrative Agent (the "Administrative
Agent," and together with the Banks and the Collateral Agent, the "Bank
Creditors") are party to the Credit Agreement, dated as of August 1, 1995 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
providing for the making of the Loans and the issuance of, and participation in,
Letters of Credit, as contemplated therein;
WHEREAS, one or more of the Borrowers are, or may from time to
time in the future be, party to one or more interest rate protection agreements
(including, without limitation, interest rate swaps, caps, floors, collars, and
similar agreements) (collectively, "Interest Rate Protection Agreements") with
any Bank or an affiliate of a Bank, each such Bank or affiliate, even if the
respective Bank subsequently ceases to be a Bank under the Credit Agreement for
any reason, together with such Bank's or affiliate's successors and assigns, are
herein called the "Interest Rate Protection Creditors", and together with the
Bank Creditors, the "Secured Creditors");
WHEREAS, each Guarantor (other than Silgan) is a Wholly-
Owned Subsidiary of Silgan;
WHEREAS, the Guarantors (other than AN Can) have heretofore
entered into a Guaranty, dated as of June 18, 1992, as amended and restated as
of December 21, 1993 (as amended, modified or supplemented to the date hereof,
the "Original Borrowers Guaranty");
<PAGE>
WHEREAS, it is a condition to the above-mentioned extensions
of credit to the Borrowers that each Guarantor shall have executed and delivered
this Guaranty; and
WHEREAS, each Guarantor will obtain benefits as a result of
the extensions of credit to the Borrowers under the Credit Agreement and the
execution, delivery and performance of the Interest Rate Protection Agreements
and, accordingly, each Guarantor desires to enter into this Guaranty in order to
satisfy the condition described in the preceding paragraph and to amend and
restate the Original Borrowers Guaranty in the form of this Guaranty;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Secured Creditors and hereby covenants and agrees with
each Secured Creditor as follows:
1.(a) Silgan hereby irrevocably and unconditionally guarantees
(x) to each Bank Creditor the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of the principal of and interest
on each Revolving Note and Swingline Note issued to such Bank Creditor under the
Credit Agreement, together with all other liabilities and obligations of each
other Borrower (including, without limitation, to repay all Revolving Loans,
Swingline Loans and Unpaid Drawings with respect to Letters of Credit and all
Fees, indemnities and interest related to the foregoing) to such Bank Creditor
incurred or to be incurred under the Credit Agreement or any other Credit
Document and the due performance and compliance by each other Borrower with the
terms, conditions and agreements contained in the Credit Documents, in each case
in respect of the Revolving Notes, the Swingline Notes and the Letters of Credit
(all such Notes, liabilities and obligations are herein collectively called the
"Silgan Guaranteed Credit Agreement Obligations") and (y) to each Interest Rate
Protection Creditor the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations of any other Borrower
owing under any Interest Rate Protection Agreement, whether now in existence or
hereafter arising, and the due performance and compliance with all the terms,
conditions and agreements contained therein (all such obligations and
liabilities being herein collectively called the "Silgan Guaranteed Interest
Rate Protection Obligations"; and together with the Silgan Guaranteed Credit
Agreement Obligations are herein collectively called the "Silgan Guaranteed
Obligations");
(b) Containers hereby irrevocably and unconditionally
guarantees (x) to each Bank Creditor the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of the principal
of and interest on each A Term Note and B Term Note issued by Silgan, and each
Revolving Note and Swingline
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Note issued by Plastics, in each case to such Bank Creditor under the Credit
Agreement, together with all other liabilities and obligations of each other
Borrower (including, without limitation, to repay all such A Term Loans, B Term
Loans, Revolving Loans, Swingline Loans and Unpaid Drawings with respect to
Letters of Credit issued for the account of Plastics and all Fees, indemnities
and interest related to the foregoing) to such Bank Creditor incurred or to be
incurred under the Credit Agreement or any other Credit Document and the due
performance and compliance by each other Borrower with the terms, conditions and
agreements contained in the Credit Documents, in each case in respect of such A
Term Notes, B Term Notes, Revolving Notes, Swingline Notes and Letters of Credit
(all such Notes, liabilities and obligations are herein collectively called the
"Containers Guaranteed Credit Agreement Obligations") and (y) to each Interest
Rate Protection Creditor the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations of any other
Borrower owing under any Interest Rate Protection Agreement, whether now in
existence or hereafter arising, and the due performance and compliance with all
the terms, conditions and agreements contained therein (all such obligations and
liabilities being herein collectively called the "Containers Guaranteed Interest
Rate Protection Obligations"; and together with the Containers Guaranteed Credit
Agreement Obligations are herein collectively called the "Containers Guaranteed
Obligations");
(c) Plastics hereby irrevocably and unconditionally guarantees
(x) to each Bank Creditor the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of the principal of and interest
on each A Term Note and B Term Note issued by Silgan, and each Revolving Note
and Swingline Note issued by Containers, in each case to such Bank Creditor
under the Credit Agreement, together with all other liabilities and obligations
of each other Borrower (including, without limitation, to repay all such A Term
Loans, B Term Loans, Revolving Loans, Swingline Loans and Unpaid Drawings with
respect to Letters of Credit issued for the account of Containers and all Fees,
indemnities and interest related to the foregoing) to such Bank Creditor
incurred or to be incurred under the Credit Agreement or any other Credit
Document and the due performance and compliance by each other Borrower with the
terms, conditions and agreements contained in the Credit Documents, in each case
in respect of such A Term Notes, B Term Notes, Revolving Notes, Swingline Notes
and Letters of Credit (all such Notes, liabilities and obligations are herein
collectively called the "Plastics Guaranteed Credit Agreement Obligations") and
(y) to each Interest Rate Protection Creditor the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations of any other Borrower owing under any Interest Rate Protection
Agreement, whether now in existence or hereafter arising, and the due
performance and compliance with all the terms, conditions and agreements
contained therein (all such obligations and liabilities being herein
collectively called the "Plastics Guaranteed Interest Rate Protection
Obligations"; and together with the Plastics
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<PAGE>
Guaranteed Credit Agreement Obligations are herein collectively called the
"Plastics Guaranteed Obligations"); and
(d) Each Guarantor (other than Silgan, Containers and
Plastics) hereby irrevocably and unconditionally guarantees (i) to each Bank
Creditor the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of (x) the principal of and interest on each Note
issued to such Bank Creditor under the Credit Agreement, together with all other
liabilities and obligations of each Borrower (including, without limitation, to
repay all Loans and Unpaid Drawings with respect to Letters of Credit, and all
Fees, indemnities and interest related to the foregoing) to such Bank Creditor
incurred or to be incurred under the Credit Agreement or any other Credit
Document and the due performance and compliance by each Borrower with the terms,
conditions and agreements contained in the Credit Documents (all such Notes,
obligations and liabilities being herein collectively referred to as the "Other
Guaranteed Credit Agreement Obligations") and (ii) to each Interest Rate
Protection Creditor the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations of any Borrower owing
under any Interest Rate Protection Agreement, whether now in existence or
hereafter arising, and the due performance and compliance with all the terms,
conditions and agreements contained therein (all such obligations and
liabilities being herein collectively called the "Other Guaranteed Interest Rate
Protection Obligations"; and together with the Other Credit Agreement
Obligations are herein collectively called the "Other Guaranteed Obligations,"
and the Other Guaranteed Obligations, together with the Silgan Guaranteed
Obligations, the Containers Guaranteed Obligations and the Plastics Guaranteed
Obligations are herein collectively called the "Guaranteed Obligations").
(e) Each Guarantor understands, agrees and confirms that each
Secured Creditor may enforce this Guaranty up to the full amount of such
Guarantor's Guaranteed Obligations without proceeding against any Borrower,
against any security such Guaranteed Obligations, against any other Guarantor,
against any other guarantor or under any other guaranty covering such Guaranteed
Obligations. This Guaranty shall constitute a guaranty of payment and not of
collection.
2. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liabilities, suit or taking of other action by the Secured Creditors
against, and any other notice to, any party liable thereon (including such
Guarantor or any other guarantor).
3. Any Secured Creditor may at any time and from time to time
without the consent of, or notice to, any Guarantor, without incurring
responsibility to any Guarantor and without impairing or
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<PAGE>
releasing the obligations of any Guarantor hereunder, upon or without any terms
or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations, any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
any of the Borrowers or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly, in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of any Borrower to
creditors of such Borrower other than the Secured Creditors and the
Guarantors;
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of any Borrower to the Secured Creditors
regardless of what liability or liabilities of such Borrower remain
unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or the
Credit Documents, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements or the Credit Documents or any of
such other instruments or agreements; and/or
(g) act or fail to act in any manner referred to in this
Guaranty which may deprive any Guarantor of its right to subrogation
against any Borrower to recover full indemnity for any payments made
pursuant to this Guaranty.
4. No invalidity, irregularity or unenforceability of all or
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty is a primary
obligation of each of the Guarantors.
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<PAGE>
5. If and to the extent that any Guarantor makes any payment
to a Secured Creditor or to any other Person pursuant to or in respect of this
Guaranty, any claim which such Guarantor may have under the Contribution
Agreement or otherwise against any Borrower by reason thereof shall be subject
and subordinate to the prior payment in full of (i) the Guaranteed Obligations
of each Secured Creditor and (ii) the obligations of each Guarantor under the
Existing Senior Secured Note Documents.
6. (a) Each Guarantor hereby waives (i) all rights of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code, or otherwise) to
the claims of the Secured Creditors against any Borrower or any other guarantor
of the Guaranteed Obligations (collectively, the "Other Parties") and all
contractual, statutory or common law rights of reimbursement, contribution or
indemnity from any Other Party which it may at any time otherwise have as a
result of this Guaranty, (ii) any right to enforce any other remedy which the
Secured Creditors now have or may hereafter have against any Other Party, any
endorser or any other guarantor of all or any part of the indebtedness of any
Borrower and any benefit of, and any right to participate in, any security or
collateral given to or for the benefit of the Secured Creditors to secure
payment of the indebtedness of any Borrower and (iii) all claims (as such term
is defined in the Bankruptcy Code) it may at any time otherwise have against any
Other Party arising from any transaction whatsoever, including without
limitation its right to assert or enforce any such claims; provided that in the
case of clause (i), (ii) and (iii) above, each Guarantor (other than Silgan)
does not waive its right of contribution from any other Guarantor (other than
Silgan), in each case as provided in the Contribution Agreement.
(b) Each Guarantor understands, is aware and hereby
acknowledges that to the extent the Guaranteed Obligations are secured by real
property located in the State of California, such Guarantor shall be liable for
the full amount of its liability hereunder notwithstanding foreclosure on such
real property by trustee sale or any other reason impairing such Guarantor's or
any Secured Creditors' right to proceed against any Borrower. Each Guarantor
hereby waives, to the fullest extent permitted by law, all rights and benefits
under Section 2809 of the California Civil Code purporting to reduce a
guarantor's obligation in proportion to the principal obligation. Each Guarantor
hereby waives all rights and benefits under Section 580a of the California Code
of Civil Procedure purporting to limit the amount of any deficiency judgment
which might be recoverable following the occurrence of a trustee's sale under a
deed of trust and all rights and benefits under Section 580b of the California
Code of Civil Procedure stating that no deficiency may be recovered on a real
property purchase money obligation. Each Guarantor further understands, is aware
and hereby acknowledges that if the Secured Creditors elect to nonjudicially
foreclose on any real property security located in the State of California any
right of subrogation of such Guarantor
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<PAGE>
against the Secured Creditors may be impaired or extinguished and that as a
result of such impairment or extinguishment of subrogation rights, such
Guarantor will have a defense to a deficiency judgment arising out of the
operation of (i) Section 580d of the California Code of Civil Procedure which
states that no deficiency may be recovered on a note secured by a deed of trust
on real property in case such real property is sold under the power of sale
contained in such deed of trust, and (ii) related principles of estoppel. To the
fullest extent permitted by law, each Guarantor waives all rights and benefits
and any defense arising out of the operation of Section 580d of the California
Code of Civil Procedure and related principles of estoppel, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against any Borrower or
any other party or any security. In addition, each Guarantor hereby waives, to
the fullest extent permitted by applicable laws, without limiting the generality
of the foregoing or any other provision hereof, all rights and benefits which
might otherwise be available to such Guarantor under Section 726 of the
California Code of Civil Procedure and all rights and benefits which might
otherwise be available to such Guarantor under California Civil Code Sections
2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 and 3433.
(c) Each Guarantor hereby further waives: (1) all rights and
defenses arising out of an election of remedies by the Secured Creditors, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for a Guaranteed Obligation, has destroyed such Guarantor's rights
of subrogation and reimbursement against the principal by the operation of
Section 580d of the California Code of Civil Procedure or otherwise; (2) such
Guarantor's rights of subrogation and reimbursement and any other rights and
defenses available to such Guarantor by reason of: (a) California Civil Code
Sections 2787 to 2855, inclusive, including, without limitation, (i) any
defenses such Guarantor may have to the Guaranteed Obligations by reason of an
election of remedies by the Secured Creditors and (ii) any rights or defenses
such Guarantor may have by reason of protection afforded to the principal
borrower with respect to the obligation so guaranteed pursuant to the
antideficiency or other laws of the State of California limiting or discharging
the borrower's indebtedness, including, without limitation, California Code of
Civil Procedure Sections 580a, 580b, 580d or 726.
7. In order to induce the Bank Creditors to make the Loans and
to issue the Letters of Credit pursuant to the Credit Agreement, and in order to
induce the Interest Rate Protection Creditors to perform the Interest Rate
Protection Agreements, each Guarantor hereby makes and confirms each and every
representation and warranty made by it in Section 6 of the Credit Agreement to
the same extent as if set forth herein in their entirety.
8. This Guaranty is a continuing one and all liabilities
to which it applies or may apply under the terms hereof shall be
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<PAGE>
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of any Secured Creditor in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly specified are cumulative and
not exclusive of any rights or remedies which any Secured Creditor would
otherwise have. No notice to or demand on any Guarantor in any case shall
entitle any Guarantor to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Secured Creditor to
any other or further action in any circumstances without notice or demand.
9. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and assigns.
10. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of the
Required Banks.
11. Each Guarantor acknowledges that an executed (or
conformed) copy of the Credit Agreement has been made available to its principal
executive officers and such officers are familiar with their respective
contents.
12. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence of an Event of Default (such term to mean and include any "Event
of Default" as defined in the Credit Agreement or any payment default under any
Interest Rate Protection Agreement) or any condition, event, or act which with
notice or lapse of time, or both, would constitute such an Event of Default,
each Secured Creditor is hereby authorized at any time or from time to time with
the prior consent of the Administrative Agent or the Required Banks, without
notice to any Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured
Creditor to or for the credit or the account of any Guarantor, against and on
account of the obligations and liabilities of such Guarantor to such Creditor
under this Guaranty, irrespective of whether or not such Secured Creditor shall
have made any demand hereunder and although said obligations, liabilities,
deposits or claims, or any of them, shall be contingent or unmatured.
13. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to such
party at (i) in the
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case of a Guarantor, at its address set forth opposite its signature below, (ii)
in the case of any Bank Creditor, as provided in the Credit Agreement and (iii)
in the case of any Interest Rate Protection Creditor, at such address as such
Interest Rate Protection Creditor shall have specified in writing to any
Guarantor and the Administrative Agent; or in any case at such other address as
any of the Persons listed above may hereafter notify the others in writing.
14. If claim is ever made upon any Secured Creditor for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (a) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property, or (b) any settlement or compromise of any such claim effected by such
payee with any such claimant (including any Borrower), then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any revocation hereof or
the cancellation of any A Term Note, B Term Note, Revolving Note or Swingline
Note, as the case may be, or any Interest Rate Protection Agreement or other
instrument evidencing any liability of any Borrower, and each Guarantor shall be
and remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
15. Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by any Borrower or others
(including any Guarantor), with respect to any of the Guaranteed Obligations
shall, if the statute of limitations in favor of the Guarantors against any
Secured Creditor shall have commenced to run, toll the running of such statute
of limitations, and if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
16. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR ANY OTHER CREDIT DOCUMENT TO WHICH ANY GUARANTOR IS A PARTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS GUARANTY, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH GUARANTOR HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEMS, 1633 BROADWAY, NEW
YORK, NEW YORK 10019, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT
AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED
IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND
AGENT SHALL CEASE TO BE
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AVAILABLE TO ACT AS SUCH, EACH GUARANTOR AGREES TO DESIGNATE A NEW DESIGNEE,
APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS
PROVISION SATISFACTORY TO THE AGENT FOR THE BANKS UNDER THIS GUARANTY. EACH
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO EACH
GUARANTOR AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY OF THE SECURED CREDITORS TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY GUARANTOR IN ANY OTHER JURISDICTION.
(B) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
GUARANTY OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
17. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantors and the
Administrative Agent.
18. The indebtedness and obligations evidenced hereby are
secured by, among other things, the Security Documents, including, without
limitation, those certain Deed of Trust, Assignment of Leases and Rents and
Security Agreements, in each case dated as of August 28, 1987, executed by
Containers to David Frantze, Trustee, for the benefit of Bankers Trust Company,
as Collateral Agent, which Deed of Trust, Assignment of Leases and Rents and
Security Agreements create liens upon real property in Buchanan and Lawrence
counties, Missouri.
19. In the event that all of the capital stock of one or more
Guarantors is sold in connection with a sale permitted by the Credit Agreement
and the proceeds of such sale or sales are applied in accordance with the
provisions of Section 4.02 of the Credit Agreement, to the extent applicable,
each Guarantor (x) all of the capital stock of which is so sold or (y) which is
a Subsidiary of a Guarantor all of the capital stock of which is so sold, shall
be released from this Guaranty and this Guaranty shall, as to each Guarantor or
Guarantors, terminate, and have no further force or effect.
20. All payments made by any Guarantor hereunder will be
made without setoff, counterclaim or other defense.
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21. It is understood and agreed that any Subsidiary of Silgan
that is required to execute a counterpart of this Guaranty after the date hereof
pursuant to the Credit Agreement shall automatically become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to the
Administrative Agent.
22. Notwithstanding anything to the contrary contained in this
Guaranty, the Original Borrowers Guaranty continues in full force and effect as
to the guaranteed obligations covered thereby in the event that Section 14 of
the Original Borrowers Guaranty becomes applicable.
* * *
-11-
<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.
Address:
4 Landmark Square SILGAN CORPORATION
Suite 400
Stamford, Connecticut 06901
Attention: President By /s/ Harley Rankin, Jr.
----------------------------------
Title: Executive Vice President
and Chief Financial Officer
4 Landmark Square SILGAN CONTAINERS CORPORATION
Suite 400
Stamford, Connecticut 06901
Attention: President By /s/ Harley Rankin, Jr.
----------------------------------
Title: Vice President
4 Landmark Square SILGAN PLASTICS CORPORATION
Suite 400
Stamford, Connecticut 06901
Attention: President By /s/ Harley Rankin, Jr.
----------------------------------
Title: Vice President and
Treasurer
4 Landmark Square CALIFORNIA-WASHINGTON CAN
Suite 400 CORPORATION
Stamford, Connecticut 06901
Attention: President
By /s/ Harley Rankin, Jr.
----------------------------------
Title: Vice President
4 Landmark Square SCCW CAN CORPORATION
Suite 400
Stamford, Connecticut 06901
Attention: President
By /s/ Harley Rankin, Jr.
----------------------------------
Title: Vice President
-12-
<PAGE>
ACCEPTED AND AGREED TO:
BANKERS TRUST COMPANY,
as Administrative Agent
for the Banks
By /s/ Dana Klein
Title: Vice President
-13-
<PAGE>
