SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
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): March 25, 1994
SILGAN HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
Delaware 33-28409 06-1269834
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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
Item 7: Financial Statements and Exhibits
The Registrant hereby files herewith the following exhibits in
anticipation of the filing of the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993:
(c) Exhibits
1. Restated Certificate of Incorporation of Silgan Holdings Inc.,
dated December 20, 1993.
2. Amended and Restated Organization Agreement, dated as of
December 21, 1993, among R. Philip Silver, D. Greg Horrigan, The Morgan
Stanley Leveraged Equity Fund II, L.P., Bankers Trust New York Corporation,
First Plaza Group Trust and Silgan Holdings Inc.
3. Stockholders Agreement, dated as of December 21, 1993, among
R. Philip Silver, D. Greg Horrigan, The Morgan Stanley Leveraged Equity Fund
II, L.P., Bankers Trust New York Corporation, First Plaza Group Trust and
Silgan Holdings Inc.
4. Amended and Restated Management Services Agreement, dated as
of December 21, 1993, between S&H, Inc. and Silgan Holdings Inc.
5. Amended and Restated Management Services Agreement, dated as
of December 21, 1993, between S&H, Inc. and Silgan Corporation.
6. Amended and Restated Management Services Agreement, dated as
of December 21, 1993, between S&H, Inc. and Silgan Containers Corporation.
7. Amended and Restated Management Services Agreement, dated as
of December 21, 1993, between S&H, Inc. and Silgan Plastics Corporation.
8. Stock Purchase Agreement, dated as of December 21, 1993,
between Silgan Holdings Inc. and First Plaza Group Trust.
9. Credit Agreement, dated as of December 21, 1993, among Silgan
Corporation, Silgan Containers Corporation, Silgan Plastics Corporation, the
lenders from time to time party thereto, Bank of America National Trust and
Savings Association, as co-agent, and Bankers Trust Company, as agent.
10. Amended and Restated Holdings Guaranty, dated as of December
21, 1993, made by Silgan Holdings Inc.
11. Amended and Restated Borrowers Guaranty, dated as of December
21, 1993, made by Silgan Corporation, Silgan Containers Corporation, Silgan
Plastics Corporation and California-Washington Corporation.
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 HOLDINGS INC.
By: /s/ Harold J. Rodriguez, Jr.
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Harold J. Rodriguez, Jr.
Vice President, Controller and
Assistant Treasurer
Date: March 25, 1994
INDEX TO EXHIBITS
Exhibit No. Exhibit
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1. Restated Certificate of Incorporation of Silgan Holdings Inc.,
dated December 20, 1993.
2. Amended and Restated Organization Agreement, dated as of
December 21, 1993, among R. Philip Silver, D. Greg Horrigan,
The Morgan Stanley Leveraged Equity Fund II, L.P., Bankers
Trust New York Corporation, First Plaza Group Trust and Silgan
Holdings Inc.
3. Stockholders Agreement, dated as of December 21, 1993, among
R. Philip Silver, D. Greg Horrigan, The Morgan Stanley
Leveraged Equity Fund II, L.P., Bankers Trust New York
Corporation, First Plaza Group Trust and Silgan Holdings Inc.
4. Amended and Restated Management Services Agreement, dated as
of December 21, 1993, between S&H, Inc. and Silgan Holdings
Inc.
5. Amended and Restated Management Services Agreement, dated as
of December 21, 1993, between S&H, Inc. and Silgan
Corporation.
6. Amended and Restated Management Services Agreement, dated as
of December 21, 1993, between S&H, Inc. and Silgan Containers
Corporation.
7. Amended and Restated Management Services Agreement, dated as
of December 21, 1993, between
S&H, Inc. and Silgan Plastics Corporation.
8. Stock Purchase Agreement, dated as of December 21, 1993,
between Silgan Holdings Inc. and First Plaza Group Trust.
9. Credit Agreement, dated as of December 21, 1993, among Silgan
Corporation, Silgan Containers Corporation, Silgan Plastics
Corporation, the lenders from time to time party thereto, Bank
of America National Trust and Savings Association, as co-
agent, and Bankers Trust Company, as agent.
10. Amended and Restated Holdings Guaranty, dated as of December
21, 1993, made by Silgan Holdings Inc.
11. Amended and Restated Borrowers Guaranty, dated as of December
21, 1993, made by Silgan Corporation, Silgan Containers
Corporation, Silgan Plastics Corporation and California-
Washington Corporation.
Exhibit 1
RESTATED CERTIFICATE OF INCORPORATION
OF
SILGAN HOLDINGS INC.
PURSUANT TO SECTIONS 242 AND 245
OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
SILGAN HOLDINGS INC., a Delaware corporation, the original
Certificate of Incorporation of which was filed with the Secretary of State
of the State of Delaware on April 6, 1989, HEREBY CERTIFIES that this
Restated Certificate of Incorporation, restating, integrating and amending
its Certificate of Incorporation, was duly proposed by its Board of Directors
and adopted by its stockholders in accordance with Sections 242 and 245 of
the General Corporation Law of the State of Delaware, and that the capital of
the Corporation is not being reduced under or by reason of any amendment in
this Restated Certificate of Incorporation.
FIRST: The name of this corporation (the "Corporation") is:
SILGAN HOLDINGS INC.
SECOND: The address of the registered office of the Corporation
in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in
the City of Wilmington, County of New Castle. The name of its registered
agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware (the "GCL").
FOURTH: The name and mailing address of the Sole Incorporator of
the Corporation is as follows:
Ronald R. Adee, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
FIFTH: Prior to the occurrence of a Change of Control (as
defined in Article TENTH), the number of directors of the Corporation shall
be six, and from and after a Change of Control, the number of directors of
the Corporation shall be increased to eight, as provided in Article SEVENTH.
At each annual meeting of stockholders, three Class A Directors (as defined
in Article SEVENTH) of the Corporation shall be elected by the vote of the
holders of a majority of the outstanding shares of the Class A Stock (as
defined in Article SEVENTH), and three Class B Directors (as defined in
Article SEVENTH) shall be elected by the vote of the holders of a majority of
the outstanding shares of the Class B Stock (as defined in Article SEVENTH).
A. When and after a Change of Control occurs, the number of Class
B Directors shall be increased to five, and the holders of a majority of the
outstanding shares of Class B Stock shall be entitled to nominate and elect a
total of five Class B Directors.
B. In the event that a vacancy among the Class A Directors or the
Class B Directors shall occur at any time prior to the election of directors
at the next scheduled annual meeting of stockholders, the vacancy shall be
filled, in the case of the Class A Directors, by either (i) the vote of the
holders of a majority of the outstanding shares of Class A Stock, at a
special meeting of stockholders, or (ii) by written consent of the holders of
a majority of the outstanding shares of Class A Stock, and, in the case of
the Class B Directors, by either (i) the vote of the holders of a majority of
the outstanding shares of Class B Stock at a special meeting of stockholders,
or (ii) by written consent of the holders of a majority of the outstanding
shares of Class B Stock.
C. (i) Prior to a Change of Control (but not thereafter), at all
meetings of the Board of Directors, two Class A Directors and two Class B
Directors shall be required to constitute a quorum ("Quorum") for the
transaction of business. Prior to a Change of Control (but not thereafter),
the approval of the majority of the entire Board of Directors, voting
together as a single class, such majority to include at least one Class A
Director and one Class B Director ("Required Majority"), at a meeting at
which there is a Quorum, shall be required to approve the actions set forth
in Article SIXTH hereof and, except as set forth in Article EIGHTH hereof,
all other matters submitted to the Board of Directors; provided, however,
that prior to a Change of Control (but not thereafter), the Class A Directors
shall have the sole right to appoint any Class A Director to any committee of
the Board of Directors, the Class B Directors shall have the sole right to
appoint any Class B Director to any committee of the Board of Directors, and
the approval of a majority of the members of any such committee, voting
together as a single class, shall be required to approve all matters
submitted to such committee.
(ii) When and after a Change of Control occurs, at all
meetings of the Board of Directors, a majority of the entire Board of
Directors (regardless of class) shall be sufficient to constitute a quorum
for the transaction of business and, except as set forth in Article EIGHTH
hereof, the act of a majority of the directors (regardless of class) present
at any meeting at which there is a quorum present shall be sufficient to
constitute the act of the Board of Directors.
D. There shall be an Audit Committee consisting of two or more of
the directors of the Corporation, which shall include at least one Class A
Director and one Class B Director who shall perform such functions as shall
be established by the Board of Directors; provided, however, that prior to a
Change of Control (but not thereafter) if a majority of the Class B Directors
so determine at any time, such committee shall consist of one Class A
Director and two Class B Directors. From and after a Change of Control, such
committee shall consist of such number of directors of such classes as shall
be determined by a majority of the Board of Directors.
E. There shall be an Investment Opportunity Committee, which
shall have sole authority to consider and approve of any investment
opportunity that is submitted to the Board of Directors by a holder of Class
A Stock who, under the terms of any agreement then in effect among one or
more of the stockholders and the Corporation, is required to first offer such
opportunity to the Corporation. Prior to a Change of Control (but not
thereafter), such committee shall consist of one Class A Director and two
Class B Directors. From and after a Change of Control, such committee shall
consist of such number of directors of such classes as shall be determined by
a majority of the Board of Directors.
F. (i) In the event that, prior to a Change of Control, and while
the Initial Investors (as defined below) are parties to an Organization
Agreement among themselves, Bankers Trust New York Corporation, First Plaza
and the Corporation, the Board of Directors shall be unable to reach
agreement upon any particular matter submitted to it (an "Open Matter"), The
Morgan Stanley Leveraged Equity Fund II, L.P., a Delaware limited partnership
("MS Equity"), R. Philip Silver ("Silver") and D. Greg Horrigan ("Horrigan"),
and their respective Affiliates (collectively, the "Initial Investors"),
acting through either Silver or Horrigan and through a designee of MS Equity,
have agreed to hold one or more informal meetings promptly in an effort to
discuss and resolve such Open Matter. The Initial Investors have agreed to
seek to cause any conclusions arrived at during such meetings to be
implemented, where necessary, by action of the Required Majority of the Board
of Directors.
(ii) If the procedure specified in paragraph (i) has not led to a
satisfactory resolution regarding an Open Matter within 30 days of any
Initial Investor seeking such an informal meeting with respect to such Open
Matter, then, upon a finding by any two directors (regardless of class) that
failure to resolve the Open Matter threatens the continued existence of, or
will result in irreparable injury to, the Corporation, the Open Matter shall
be submitted for determination in the following manner; provided, however,
that (a) of the items set forth in subparagraphs one through twenty of
Article SIXTH, only item number five may be so submitted and (b) any Open
Matter not involving an item set forth in subparagraphs one through twenty of
Article SIXTH may be submitted to arbitration only if the Initial Investors
have agreed that such item shall be so submitted. The directors in favor of
the Open Matter as a group and the directors opposed to the Open Matter as a
group shall, within ten days of such request, each appoint an independent
person as arbitrator to resolve the Open Matter. The arbitrators so chosen
promptly shall agree upon and appoint an independent person as an additional
arbitrator. The arbitrators promptly shall determine whether the Open Matter
meets the standard set forth in this paragraph as to matters which are to be
submitted to arbitration by the Initial Investors, and, if so, promptly shall
seek to resolve the Open Matter. The decision of the arbitrators shall be
final and binding upon the Corporation and the stockholders. The Board of
Directors or, if the Board of Directors shall not have done so within five
days of the arbitrators' decision, the stockholders, shall take any and all
action necessary to implement such decision. If, pursuant to the preceding
sentence, the resolution of an Open Matter is submitted to the stockholders
for authorization, the Initial Investor which is in favor of such resolution
shall be entitled to vote all of the shares of Class A Stock and Class B
Stock held by any other Initial Investors in favor of such resolution, and
the action of a majority of the holders of outstanding Class A Stock and
Class B Stock, voting as a single class, shall be sufficient to approve such
resolution.
(iii) If the arbitrators chosen by the directors are unable to
agree upon and appoint an additional arbitrator, the Open Matter shall be
resolved by three arbitrators appointed by the American Arbitration
Association (the "AAA") in accordance with the then prevailing Commercial
Arbitration Rules thereof (the "Rules"). The AAA shall be required to
endeavor to appoint experts in a discipline relevant to the Open Matter and,
if the same issue or an issue similar to the Open Matter has been submitted
to arbitration by the Initial Investors before, to appoint one or more of the
same arbitrators to determine the Open Matter and each such same (or similar)
issue, but the failure to do any of the foregoing shall not be a basis for
avoiding, setting aside or altering the arbitral award.
(iv) Any arbitration referred to in subparagraph F(iii) of Article
FIFTH shall be conducted under the Rules in the City of Wilmington, Delaware
unless the Initial Investors mutually agree to have the arbitration held
elsewhere, and the award made therein shall be entered in the applicable
State Courts of Delaware or, as the case may be, the United States District
Court for Delaware.
SIXTH: The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors, provided that
the Corporation may retain such qualified persons (as determined by the Board
of Directors) to provide the Corporation with general management, supervision
and administrative services relating to the operations of the Corporation.
Approval of the following actions shall not be delegated to any
officer, employee or agent of the Corporation:
1. Amendment of the Certificate of Incorporation or By-Laws of
the Corporation or any of its subsidiaries.
2. Issuance, sale, purchase or redemption of any capital stock,
warrants, options or other securities of the Corporation or any of its
subsidiaries (other than, in the case of any issuance or sale, to the
Corporation or any direct or indirect wholly owned subsidiary of the
Corporation) except as may be otherwise provided in this Restated Certificate
of Incorporation.
3. Sale of assets other than inventory to or from the Corporation
or any of its subsidiaries in excess of $2 million (i) in one or a series of
related transactions (regardless of the period of time in which such
transaction or series of related transactions take place) or (ii) in any
number of transactions within a six-month period.
4. Merger, consolidation, dissolution or liquidation of the
Corporation or any of its subsidiaries.
5. Filing of any petition by or on behalf of the Corporation
seeking relief under the federal bankruptcy act or similar relief under any
law or statute of the United States or any state thereof.
6. Setting aside, declaration or making of any payment or
distribution by way of dividend or otherwise to the Corporation's
stockholders (or setting dividend policy).
7. Incurrence (other than in the ordinary course of business) of
new indebtedness (including capitalized leases, but excluding indebtedness
incurred pursuant to debt instruments of the Corporation in existence on the
Closing Date (as defined in Article TENTH) and excluding indebtedness
incurred under the Bank Financing pursuant to commitments approved by the
Board of Directors) or any fixed or contingent liabilities in excess of $2
million.
8. Creation or incurrence of a lien or encumbrance on the
property of the Corporation or any of its subsidiaries, except for liens
relating to the Bank Financing (as defined in Article TENTH) or other minor
liens, including liens for taxes or those arising by operation of law,
permitted to exist under the terms of the Bank Financing.
9. Guarantees in excess of $1 million of payment by or
performance of obligations of third parties other than in the ordinary course
of business.
10. The Corporation's institution of, termination or settlement of
litigation not in the ordinary course of the Corporation's business (in each
case where such litigation represents a case or controversy in excess of $2
million).
11. Surrendering or abandoning any property, tangible or
intangible, or any rights having a book value in excess of $1 million.
12. Except as set forth in subsection 16 below with respect to
leases which are not capitalized, any commitment of the Corporation (other
than in the ordinary course of its business) which creates a liability or
commitment in excess of $2 million.
13. Capital expenditures in excess of the amounts permitted under
the Bank Financing.
14. Donations of money or property in excess of $100,000 in a
single year.
15. Any investment of the Corporation or any of its subsidiaries
in another corporation, partnership or joint venture in excess of $2 million
(in one or a series or related transactions or in any number of transactions
within six months).
16. Entering into any lease (other than a capitalized lease which
shall be subject to the limitation set forth in subsection 12 above) of any
assets of the Corporation located in any one place having a book value in
excess of $4 million, or in excess of $1 million if the lease has a term of
more than five years.
17. Entering into agreements or material transactions between the
Corporation and a director or officer of any of the following companies or
their Affiliates (as defined in Article TENTH): the Corporation and MS
Equity.
18. Replacement of independent accountants for the Corporation or
any of its subsidiaries.
19. Modification of significant accounting methods, practices,
procedures and policies.
20. Removal of officers.
SEVENTH: The total number of shares of capital stock which the
Corporation shall have authority to issue is 3,167,500 shares, consisting of
500,000 shares of Class A common stock, par value $.01 per share (the "Class
A Stock"), 667,500 shares of Class B common stock, par value $.01 per share
(the "Class B Stock"), 1,000,000 shares of Class C common stock, par value
$.01 per share (the "Class C Stock") (the Class A Stock, Class B Stock and
Class C Stock being sometimes referred to herein collectively as the "Common
Stock"), and 1,000,000 shares of preferred stock, par value $.01 per share
(the "Preferred Stock").
A. Except as set forth below, the rights, privileges and powers,
including the voting powers, of the Class A Stock and the Class B Stock shall
be identical, with each share of each class being entitled to one vote on all
matters to come before the stockholders of the Corporation.
(i) Until the occurrence of a Change of Control, but not
thereafter, the affirmative vote of the holders of not less than a majority
of the outstanding shares of Class A Stock and Class B Stock, voting as
separate classes, shall be required for the approval of any matter to come
before the stockholders of the Corporation, except as follows:
(a) The holders of a majority of the outstanding shares of Class A
Stock, voting as a separate class, shall have the sole right to vote for and
elect three directors (such directors being referred to herein as "Class A
Directors") and to remove any Class A Director with or without cause.
(b) The holders of a majority of the outstanding shares of Class B
Stock, voting as a separate class, shall have the sole right to vote for and
elect (i) prior to a Change of Control, three directors other than the Class
A Directors (the directors elected by the holders of Class B Stock being
referred to herein as "Class B Directors"), and (ii) from and after a Change
of Control, five Class B Directors, and to remove any Class B Director with
or without cause.
(c) The vote of the holders of not less than a majority of the
outstanding shares of Class B Stock shall be required (x) to determine
whether a product is similar to such products as are manufactured or sold or
proposed to be manufactured or sold in North America by the Corporation or
its subsidiaries or is otherwise directly competitive with products produced
by the Corporation and its subsidiaries and (y) to authorize any action
necessary to be taken by the stockholders to implement the decision of an
arbitrator as provided in paragraph F of Article FIFTH.
(ii) From and after a Change of Control, the affirmative vote of
the holders of not less than a majority of the outstanding shares of Class A
Stock and Class B Stock, voting together as a single class, shall be required
for the approval of any matter to come before the stockholders of the
Corporation, except that the provisions of subparagraphs A(i)(a) and A(i)(b)
of this Article SEVENTH shall continue to apply from and after a Change of
Control and except as otherwise provided in Article ELEVENTH.
B. The holders of Class C Stock will not have any voting rights
except as provided by applicable law and except that such holders shall be
entitled to vote as a separate class on certain amendments to this Restated
Certificate of Incorporation as provided in Article ELEVENTH.
C. The Board of Directors of the Corporation may cause dividends
to be paid to the holders of shares of Common Stock out of funds legally
available for the payment of dividends by declaring an amount per share as a
dividend. When and as dividends are declared, other than dividends declared
with respect to the Preferred Stock, whether payable in cash, in property or
in shares of stock of the Corporation, other than shares of Class A Stock,
Class B Stock or Class C Stock, the holders of Class A Stock, the holders of
Class B Stock and the holders of Class C Stock shall be entitled to share
equally, share for share, in such dividends. No dividends shall be declared
or paid in shares of Class A Stock, Class B Stock or Class C Stock or
options, warrants, or rights to acquire such stock or securities convertible
into or exchangeable for shares of such stock, except dividends payable
ratably in shares of, or securities convertible into or exchangeable for,
Class A Stock to holders of that class of stock, and in shares of, or
securities convertible into or exchangeable for, Class B Stock to holders of
that class of stock, and in shares of, or securities convertible into or
exchangeable for, Class C Stock to holders of that class of stock. If, in
connection with any (i) reorganization, reclassification or change of shares
of Common Stock of the Corporation (other than a change in par value, or from
par value to no par value as a result of a subdivision or combination), or
(ii) consolidation of the Corporation with one or more other corporations or
a merger of the Corporation with another corporation (other than a
consolidation or merger in which the Corporation is the continuing
corporation and which does not result in any reclassification or change of
outstanding shares of Common Stock), or (iii) sale, lease or other
disposition to another corporation (other than a wholly owned subsidiary of
the Corporation) of all or substantially all the assets of the Corporation
(any such transaction set forth in clause (i), (ii) or (iii) is hereinafter
referred to as a "Reorganization Transaction"), the holders of any class of
Common Stock receive shares of any class of common stock of the resulting or
surviving corporation, effective provision shall be made in the certificate
of incorporation of the resulting or surviving corporation or otherwise for
the protection of the rights afforded by this paragraph C.
D. (i) Any Regulated Stockholder (as defined below) shall be
required to convert all of the shares of Class A Stock or Class B Stock held
by such stockholder into the same number of shares of Class C Stock in
accordance with the provisions of paragraph D(ii) below. The term "Regulated
Stockholder" shall mean (a) any stockholder that is subject to the provisions
of Regulation Y of the Board of Governors of the Federal Reserve System (12
C.F.R. Part 225) or any successor to such regulation ("Regulation Y") that
holds shares of Common Stock originally issued to such stockholder or
acquired by such stockholder pursuant to a right of first refusal granted to
the stockholder under the terms of an agreement among one or more of the
stockholders and the Corporation, (b) any Affiliate of any such Regulated
Stockholder that is a transferee of any shares of Common Stock, so long as
such Affiliate shall hold, and only with respect to, such shares of Common
Stock and (c) any Person (x) to which such Regulated Stockholder or any of
its Affiliates has transferred such shares, so long as such transferee shall
hold, and only with respect to, any shares of Common Stock transferred by
such stockholder or Affiliate and (y) which is, or any Affiliate of which is,
subject to the provisions of Regulation Y.
(ii) In the event the Corporation effects a Public Offering
(as defined below), upon compliance with the provisions of paragraph D(iii)
below, any Regulated Stockholder shall be entitled to convert, at any time
and from time to time, any and all shares of Class C Stock held by such
stockholder into the same number of shares of Class B Stock (or, to the
extent such Class C Stock was issued upon the conversion of Class A Stock,
into the same number of shares of Class A Stock); provided, however, that no
holder of any shares of Class C Stock shall be entitled to convert any such
shares into shares of Class A Stock or Class B Stock if, as a result of such
conversion, (i) such holder and its Affiliates, directly or indirectly, would
own, control or have the power to vote a greater number of shares of Common
Stock or other securities of any kind issued by the Corporation than such
holder and its Affiliates shall be permitted to own, control or have the
power to vote under any law, regulation, rule or other requirement of any
governmental authority at the time applicable to such holder or its
Affiliates, or (ii) the rights, activities or business of the Corporation
would become limited in any respect as a result of the application of
Regulation Y.
(iii) (a) Each conversion of shares of Common Stock of the
Corporation into shares of another class of Common Stock shall be effected by
the surrender of the certificate or certificates evidencing the shares of the
class of stock to be converted (the "Converting Shares") at the principal
office of the Corporation (or such other office or agency of the Corporation
as the Corporation may designate by notice in writing to the holders of
Common Stock), at any time during its usual business hours, together with
written notice by the holder of such Converting Shares, (1) stating that the
holder desires to convert the Converting Shares evidenced by such certificate
or certificates into an equal number of shares of the class into which such
shares may be converted (the "Converted Shares"), and (2) giving the name or
names (with addresses) and denominations in which the certificate or
certificates evidencing the Converted Shares shall be issued, and
instructions for the delivery thereof. The Corporation shall promptly notify
each Regulated Stockholder of record of its receipt of such notice. Upon
receipt of the notice described in the first sentence of this paragraph
D(iii)(a), together with the certificate or certificates evidencing the
Converting Shares, the Corporation shall be obligated to, and shall, issue
and deliver in accordance with such instructions the certificate or
certificates evidencing the Converted Shares issuable upon such conversion
and a certificate (which shall contain such legends, if any, as were set
forth on the surrendered certificate or certificates) representing any shares
which were represented by the certificate or certificates surrendered to the
Corporation in connection with such conversion but which were not Converting
Shares and, therefore, were not converted. Such conversion, to the extent
permitted by law, shall be deemed to have been effected as of the close of
business on the date on which such certificate or certificates shall have
been surrendered and such written notice shall have been received by the
Corporation, and at such time the rights of the holder of such Conversion
Shares as such holder shall cease, and the person or persons in whose name or
names any certificates evidencing the Converted Shares are to be issued upon
such conversion shall be deemed to have become the holder or holders of
record of the Converted Shares. The Corporation shall be entitled to rely
conclusively as to the truth of the statements made in such written notice,
and the Corporation shall not be liable to any person with respect to any
action taken or omitted to be taken by it in connection with such conversion
in reliance on the statements made in such written notice.
(b) Notwithstanding any provision of paragraph D(iii)(a) to the
contrary, the Corporation shall not be required to record the conversion of,
and no holder of shares shall be entitled to convert, shares of Class C Stock
into shares of Class A Stock or Class B Stock, as the case may be, unless
such conversion is permitted under applicable law and this Restated
Certificate of Incorporation; provided, however, that the Corporation shall
be entitled to rely without independent verification upon the representation
of any holder, that the conversion of shares by such holder is permitted
under applicable law, and in no event shall the Corporation be liable to any
such holder or any third party arising from any such conversion whether or
not permitted by applicable law.
(c) Upon the issuance of the Converted Shares in accordance with
this paragraph D, such shares shall be deemed to be duly authorized, validly
issued, fully paid and non-assessable.
(d) The Corporation shall not directly, or indirectly redeem,
purchase or otherwise acquire any shares of Class A or B Stock or take any
other action affecting the voting rights of such shares, if such action will
increase the percentage of outstanding voting securities known by the
Corporation to be owned or controlled by any Regulated Stockholder unless the
Corporation gives written notice (the "First Notice") of such action to each
such Regulated Stockholder. The Corporation will defer making any
conversion, redemption, purchase or other acquisition or taking any such
other action for a period of 30 days (the "Deferral Period") after giving the
First Notice in order to allow each such Regulated Stockholder to determine
whether it wishes to convert or take any other action with respect to the
Common Stock it owns, controls or has the power to vote, and if any such
Regulated Stockholder then elects to convert any shares of Common Stock, it
shall notify the Corporation in writing within 20 days of the issuance of the
First Notice, in which case the Corporation (x) shall defer taking the
pending action until the end of the Deferral Period, (y) shall promptly
notify each other Regulated Stockholder holding shares of which it has
knowledge of each proposed conversion and the proposed transactions, and (z)
effect the conversion requested by all Regulated Stockholders in response to
the notices issued pursuant to this paragraph D(iii)(d) at the end of the
Deferral Period or as soon thereafter as is reasonably practicable.
(e) The issue of certificates evidencing shares of any class of
Common Stock upon conversion of shares of any other class of Common Stock
pursuant to this Article SEVENTH shall be made without charge to the holders
of such shares for any issue tax in respect thereof or other cost incurred by
the Corporation in connection with such conversion; provided, however, the
Corporation shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the Common Stock
converted.
(iv) If the Corporation shall in any manner subdivide (by
stock split, stock dividend or otherwise) or combine (by reverse stock split
or otherwise) the outstanding shares of any class of Common Stock, the
outstanding shares of the other classes of Common Stock shall be
proportionately subdivided or combined, as the case may be, and effective
provision shall be made for the protection of all conversion rights, if any,
hereunder. In case of any Reorganization Transaction, each holder of a share
of Common Stock, irrespective of class, shall have the right at any time
thereafter, so long as the conversion right hereunder with respect to such
shares of Common Stock would exist had such event not occurred, to convert
such share into the kind and amount of shares of stock and other securities
and property receivable upon such Reorganization Transaction by a holder of
the number of shares of the class of Common Stock into which such shares of
Common Stock might have been converted immediately prior to such
Reorganization Transaction. If, in connection with such Reorganization
Transaction, the holders of Class C Stock receive shares of any class of non-
voting common stock of the resulting or surviving corporation, effective
provision shall be made in the certificate of incorporation of the resulting
or surviving corporation or otherwise for the protection of the conversion
rights of the shares of Class C Stock that shall be applicable, as nearly as
reasonably may be, to any such other shares of stock and other securities and
property deliverable upon conversion of shares of Class C Stock into which
such Class C Stock might have been converted immediately prior to such event.
In connection with a Reorganization Transaction, effective provision shall be
made in the agreement relating to such Reorganization Transaction for the
receipt by holders of Class C Stock of the equivalent amount per share and
form of consideration as the holders of Class B Stock are entitled to receive
pursuant to such Reorganization Transaction; provided, however,
notwithstanding the foregoing, to the extent holders of Class B Stock receive
voting equity securities of the resulting or surviving corporation in a
Reorganization Transaction, holders of Class C Stock shall be entitled to
receive only non-voting equity securities of the resulting or surviving
corporation with the protections afforded by this subparagraph D(iv).
(v) In the event the Corporation effects a Public Offering (as
defined below), the following shall occur on the first day shares are sold to
the public:
(a) The distinction between Class A Stock and Class B Stock and all
special rights and limitations and quorum and required vote provisions
applicable to such classification shall terminate. Following a Public
Offering, the rights, privileges and powers, including the voting powers, of
the Class A Stock and Class B Stock shall be identical, with each share of
each such class being entitled to one vote on all matters to come before the
stockholders of the Corporation, and all quorum and required vote provisions
applicable to the Class A Stock and Class B Stock voting as a single class
shall be as provided by applicable Delaware law as then in effect.
(b) The distinction between the Class A Directors and Class B
Directors and all rights and voting and quorum requirements applicable
thereto shall be abolished and the quorum and required vote provisions
applicable to action by the Board of Directors shall be as provided by
applicable Delaware law as then in effect. The holders of a majority of the
outstanding shares of the Class A Stock and Class B Stock voting as a single
class shall elect all of the directors of the Corporation.
(c) "Public Offering" shall mean the sale of shares of Common Stock
to the public, pursuant to an effective registration statement, registered
under the Securities Act of 1933, as amended.
E. Shares of Preferred Stock of the Corporation may be issued
from time to time in one or more classes or series, each of which class or
series shall have such distinctive designation or title as shall be fixed by
the Board of Directors of the Corporation prior to the issuance of any shares
thereof. Each such class or series of Preferred Stock shall have such voting
powers, full or limited, or no voting powers, and such preferences and
relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated in
such resolution providing for the issue of such class or series of Preferred
Stock as may be adopted from time to time by the Board of Directors prior to
the issuance of any shares thereof pursuant to the authority hereby expressly
vested in it, all in accordance with the laws of the State of Delaware.
EIGHTH: A. Prior to a Change of Control, the Executive Officers
shall be the Chairman of the Board of Directors who shall preside at all
meetings of the stockholders and of the Board of Directors and the President.
All officers of the Corporation shall serve until voluntary resignation or
retirement, or removal by the Board of Directors in accordance with the
provisions set forth herein. Any number of offices may be held by the same
person, unless otherwise prohibited by law, this Restated Certificate of
Incorporation or the By-Laws. The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the Chairman of
the Board of Directors, need such officers be directors of the Corporation.
B. Prior to a Change of Control, the officers of the Corporation
shall be nominated and elected to their positions by the Class A Directors
and may be removed by the Required Majority (as defined in Article FIFTH) of
the Board of Directors present at a meeting at which a quorum shall be
present throughout. Prior to a Change of Control, any vacancy occurring in
any office of the Corporation shall be filled by vote of the Class A
Directors.
C. From and after a Change of Control, all of the officers of the
Corporation shall be nominated and elected to their positions by the Class B
Directors and may be removed by the Class B Directors and any vacancy
occurring in any office of the Corporation shall be filled by vote of the
Class B Directors.
D. All officers of the Corporation shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors; and all officers of
the Corporation shall hold office until their successors are chosen and
qualified, or until their earlier resignation or removal. The salaries of
all officers of the Corporation shall be fixed by the Board of Directors.
NINTH: In furtherance and not in limitation of the powers
conferred by statute, the By-Laws of the Corporation may be altered, amended
or repealed in whole or in part, or new By-Laws may be adopted by approval of
the Required Majority present at a meeting of the Board of Directors at which
a Quorum is present and acting throughout, until a Change of Control occurs,
and thereafter by a majority of the Board of Directors voting at a meeting at
which a quorum is present and acting throughout.
TENTH: As used in this Restated Certificate of Incorporation,
the following terms shall have the meanings indicated below:
1. "Affiliate" shall mean with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common
control with such Person. For the purpose of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of management and policies of such Person,
whether through the ownership of voting securities or by contract or
otherwise.
2. "Bank Financing" shall mean the Amended and Restated Credit
Agreement, dated as of August 31, 1987, amended and restated as of March 1,
1989 and amended and restated as of July 13, 1990 and further amended and
restated as of June 18, 1992 (the "Credit Agreement"), among Silgan
Corporation, Silgan Containers Corporation, Silgan Plastics Corporation, the
financial institutions parties thereto and Bankers Trust Company, as agent,
as in effect from time to time, and any refinancings, renewals, amendments or
extensions thereof or additional borrowings thereunder.
3. "Closing Date" shall mean the date and time at which the
merger of Silgan Acquisition Inc., a wholly owned subsidiary of the
Corporation, with and into Silgan Corporation was effective in accordance
with the GCL.
4. "Change of Control" shall mean the occurrence of any of the
following events: (i) Silver and Horrigan shall collectively own, directly or
indirectly, less than one-half of the aggregate number of outstanding shares
of Class A Stock owned by them directly or indirectly on the Closing Date on
a common stock equivalent basis and as adjusted for stock splits,
recapitalizations and the like, or (ii) the acceleration of the Bank
Financing or the Senior Discount Debentures, by the trustee under the
indenture relating thereto, as a result of the occurrence of an event of
default under the terms of the Bank Financing or the Senior Discount
Debentures, as the case may be, relating to a payment default or financial
covenant default.
5. "Senior Discount Debentures" shall mean the 13-1/4% Senior
Discount Debentures due 2002 of the Corporation, and any refinancings or
amendments thereof.
ELEVENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Restated Certificate of
Incorporation in the manner now or hereafter prescribed by law, provided that
(i) the resolution approving such amendment, alteration, change or repeal be
adopted by the Board of Directors by approval of the Required Majority
present at a meeting at which the quorum is present and acting throughout,
until a Change of Control occurs, and thereafter by a majority of the members
of the Board of Directors voting together as a single class present at a
meeting at which a quorum is present and acting throughout and (ii) the
proposed amendment, alteration, change or repeal be approved by a majority of
the outstanding shares of Class A Stock and Class B Stock, each voting as a
separate class, until a Change of Control occurs and thereafter by a majority
of the outstanding shares of Class A Stock and Class B Stock, voting together
as a single class; provided, however, that from and after a Change of
Control, any amendment, alteration, change or repeal of subparagraph A(i)(a)
of Article SEVENTH or of this sentence shall also be approved by a majority
of the outstanding shares of Class A Stock, voting as a separate class, and
any amendment, alteration, change or repeal of subparagraph A(i)(b) and
paragraph D of Article SEVENTH or paragraph C of Article EIGHTH or of this
sentence shall also be approved by a majority of the outstanding shares of
Class B Stock, voting as a separate class. With respect to any amendment,
alteration, change or repeal of paragraph B, C or D of Article SEVENTH or of
this sentence which would adversely affect the rights of the holders of the
Class C Stock, such amendment shall require, in addition to the approval of
the holders of the Class A Stock and the Class B Stock as provided in the
first sentence of this Article ELEVENTH, approval by a majority of the
outstanding shares of Class C Stock, voting as a separate class.
TWELFTH: A. The Corporation shall indemnify to the full extent
authorized or permitted by law (as now or hereafter in effect) any person
made, or threatened to be made, a defendant or witness to any action, suit or
proceeding (whether civil or criminal or otherwise) by reason of the fact
that he, his testator or intestate, is or was a director or officer of the
Corporation or by reason of the fact that such director or officer, at the
request of the Corporation, is or was serving any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
in any capacity. Nothing contained herein shall effect any rights to
indemnification to which employees other than directors and officers may be
entitled to by law. No amendment or repeal of this paragraph A of Article
TWELFTH shall apply to or have any effect on any right to indemnification
provided hereunder with respect to any acts or omissions occurring prior to
such amendment or repeal.
B. No director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty by such a director as a director. Notwithstanding the
foregoing sentence, a director shall be liable to the extent provided by
applicable law (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the GCL, or (iv) for any transaction from which
such director derived an improper personal benefit. No amendment to or
repeal of this paragraph B of Article TWELFTH shall apply to or have any
effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.
C. In furtherance and not in limitation of the powers conferred
by statute:
(i) the Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of
law; and
(ii) the Corporation may create a trust fund, grant a security
interest and/or use other means (including, without limitation, letters of
credit, surety bonds and/or other similar arrangements), as well as enter
into contracts providing indemnification to the full extent authorized or
permitted by law and including as part thereof provisions with respect to any
or all of the foregoing to ensure the payment of such amounts as may become
necessary to effect indemnification as provided therein, or elsewhere.
THIRTEENTH: Meetings of stockholders may be held within or without
the State of Delaware, as the By-Laws of the Corporation may provide. The
books of the Corporation may be kept (subject to any provision contained in
the GCL) outside the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors or in the By-Laws of
the Corporation.
IN WITNESS WHEREOF, SILGAN HOLDINGS INC. has caused this Restated
Certificate of Incorporation to be executed in its corporate name by its
President and attested by its Assistant Secretary on the ___ day of December,
1993.
SILGAN HOLDINGS INC.
/s/ R. Philip Silver
--------------------------------
R. Philip Silver
President
Attest:
By: /s/ Sharon E. Budds
-----------------------------
Sharon E. Budds
Assistant Secretary
Exhibit 2
AMENDED AND RESTATED
ORGANIZATION AGREEMENT
DATED AS OF DECEMBER 21, 1993
AMONG
R. PHILIP SILVER
D. GREG HORRIGAN
THE MORGAN STANLEY LEVERAGED EQUITY FUND II, L.P.
BANKERS TRUST NEW YORK CORPORATION
FIRST PLAZA GROUP TRUST
and
SILGAN HOLDINGS INC.
TABLE OF CONTENTS
Page
ARTICLE I PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III REPRESENTATIONS AND WARRANTIES; LEGEND . . . . . . . . . 9
3.1 Representations and Warranties of the Stockholders . . . . . . 9
3.2 Representations and Warranties of Holdings . . . . . . . . . 12
3.3 Legend on Certificates . . . . . . . . . . . . . . . . . . . 13
ARTICLE IV MANAGEMENT PROVISIONS . . . . . . . . . . . . . . . . . 14
4.1 Management Services Contract . . . . . . . . . . . . . . . . 14
4.2 Day-to-Day Operations . . . . . . . . . . . . . . . . . . . . 15
4.3 Arbitration of Deadlocks . . . . . . . . . . . . . . . . . . 15
4.4 Investment Opportunities . . . . . . . . . . . . . . . . . . 18
4.5 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE V RESTRICTIONS ON TRANSFER . . . . . . . . . . . . . . . . . . 20
5.1 Limitations of Transfer . . . . . . . . . . . . . . . . . . . 20
5.2 Transfers to Affiliates . . . . . . . . . . . . . . . . . . . 22
5.3 Effect of Void Transfers . . . . . . . . . . . . . . . . . . 22
5.4 Right of First Refusal . . . . . . . . . . . . . . . . . . . 23
5.5 Right to Sell Stock Upon Death or Disability; Purchase Price;
Terms of Purchase . . . . . . . . . . . . . . . . . . . . . . 40
5.6 Right to Purchase Stock; Purchase Price; Terms of Purchase . 43
ARTICLE VI CALL OPTION OF HOLDINGS . . . . . . . . . . . . . . . . 45
6.1 First Plaza's Obligation to Sell . . . . . . . . . . . . . . 45
6.2 Exercise of Call . . . . . . . . . . . . . . . . . . . . . . 45
6.3 Adjustment of Shares and Call Purchase Price . . . . . . . . 46
ARTICLE VII LIQUIDITY . . . . . . . . . . . . . . . . . . . . . . . 46
7.1 Right to Demand an Initial Public Offering of the Common Stock 46
7.2 Expenses of Registration . . . . . . . . . . . . . . . . . . 50
7.3 Indemnification Relating to Registration . . . . . . . . . . 51
7.4 Contribution Relating to Registration . . . . . . . . . . . . 55
ARTICLE VIII TERMINATION . . . . . . . . . . . . . . . . . . . . . . 57
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.2 Extension . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IX INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 58
9.1 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE X REPORTS AND ACCESS TO INFORMATION . . . . . . . . . . . . . . 62
10.1 Books and Records . . . . . . . . . . . . . . . . . . . . . . 62
10.2 Financial Statements . . . . . . . . . . . . . . . . . . . . 62
10.3 Access to Information . . . . . . . . . . . . . . . . . . . . 63
10.4 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE XI CERTAIN OTHER AGREEMENTS . . . . . . . . . . . . . . . 63
11.1 Certain Agreement Relating to Approval of Post-IPO Charter,
By-Laws and Management Services Contract . . . . . . . . . . 63
11.2 Restriction on Voting by MS Equity . . . . . . . . . . . . . 64
11.3 Certain Agreement Relating to Nomination of and Voting for One
Class B Director . . . . . . . . . . . . . . . . . . . . . . 64
11.4 Voting Agreement for Certain Purchasers of Class A Stock . . 64
11.5 Voting Agreement for Certain Purchasers of Class B Stock . . 65
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 65
12.1 Certain Agreement Relating to Conversion Rights . . . . . . . 65
12.2 Appointment of Agent . . . . . . . . . . . . . . . . . . . . 66
12.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
12.4 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.5 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.6 Curative Actions; Severability . . . . . . . . . . . . . . . 69
12.7 Action of a Stockholder . . . . . . . . . . . . . . . . . . . 71
12.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 71
12.9 Construction . . . . . . . . . . . . . . . . . . . . . . . . 71
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . 71
12.11 Successors and Assigns . . . . . . . . . . . . . . . . 72
12.12 Cumulative Rights . . . . . . . . . . . . . . . . . . . 72
12.13 Further Assurances . . . . . . . . . . . . . . . . . . 72
12.14 Specific Performance . . . . . . . . . . . . . . . . . 72
12.15 Compliance with Applicable Laws . . . . . . . . . . . . 73
12.16 Accuracy of Information . . . . . . . . . . . . . . . . 73
12.17 Disclosure . . . . . . . . . . . . . . . . . . . . . . 73
12.18 Survival of Certain Terms . . . . . . . . . . . . . . . 73
12.19 No Third Party Beneficiaries . . . . . . . . . . . . . 73
12.20 Effectiveness; Entire Agreement . . . . . . . . . . . . 73
12.21 ERISA Limitation . . . . . . . . . . . . . . . . . . . 74
EXHIBITS
Exhibit A Form of Post-IPO Charter
Exhibit B Form of Post-IPO By-Laws
Exhibit C Form of Post-IPO Management Services Contract
ORGANIZATION AGREEMENT
This Amended and Restated Organization Agreement made and entered into
as of the 21st day of December, 1993, by and among R. PHILIP SILVER
("Silver"), D. GREG HORRIGAN ("Horrigan"), THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P., a Delaware limited partnership ("MS Equity"), BANKERS
TRUST NEW YORK CORPORATION, a New York corporation ("BTNY"), FIRST PLAZA
GROUP TRUST, a group trust established under the laws of the State of New
York ("First Plaza"), and SILGAN HOLDINGS INC., a Delaware corporation
("Holdings"). Capitalized terms used in this Agreement shall have the
meanings ascribed to them in Article II hereof or in any other Section.
ARTICLE I
PURPOSE
1.1 Purpose. The purpose of this Agreement is to amend and restate the
Organization Agreement dated June 30, 1989, by and among Silver, Horrigan, MS
Equity, BTNY and Holdings (the "Existing Organization Agreement"), in order
to set forth the various agreements and understandings among the Stockholders
and Holdings concerning (a) the organization of Holdings; (b) the investment
by First Plaza in Holdings; and (c) the terms governing the relationship
among the Stockholders and between the Stockholders and Holdings for the term
of this Agreement.
ARTICLE II
DEFINITIONS
2.1 Definitions.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations as in effect
on the date of this Agreement under the Exchange Act (as hereinafter defined)
and, with respect to First Plaza, such terms shall include any successor or
underlying trust; provided, however, that with respect to MS Equity such
terms shall not include any person which is not an Investment Entity.
"Bank Financing" shall mean the Credit Agreement, dated as of December
21, 1993, among Silgan, Containers, Plastics, the financial institutions
parties thereto, Bank of America National Trust and Savings Association, as
Co-Agent, and Bankers Trust Company, as Agent, as in effect from time to
time, and any refinancings, renewals, amendments or extensions thereof or
additional borrowings thereunder.
"Board of Directors" shall mean the board of directors of Holdings.
"By-Laws" shall mean the By-Laws of Holdings as in effect on the date
hereof.
"Certificate of Incorporation" shall mean the Restated Certificate of
Incorporation of Holdings, as amended, substantially in the form of Exhibit E
to the Stock Purchase Agreement, as filed with the Secretary of State of the
State of Delaware and as in effect on the Closing Date.
"Class A Stock" shall mean the Class A common stock, par value $.01 per
share, of Holdings.
"Class B Stock" shall mean the Class B common stock, par value $.01 per
share, of Holdings.
"Class C Stock" shall mean the Class C common stock, par value $.01 per
share, of Holdings.
"Closing Date" shall mean the date and time at which the Del Monte
Acquisition is effective.
"Common Stock" shall mean the Class A Stock, the Class B Stock and the
Class C Stock.
"Containers" shall mean Silgan Containers Corporation, a Delaware
corporation which is an indirect wholly owned subsidiary of Holdings.
"Del Monte Acquisition" shall mean the purchase by Containers of certain
assets and the assumption by Containers of certain liabilities of Del Monte
Corporation pursuant to the terms of a Purchase Agreement dated as of
September 3, 1993 between Containers and Del Monte Corporation, as amended by
the Amendment to Purchase Agreement dated as of December 10, 1993.
"Estate" shall mean any and all assets left by a decedent and any
executor, administrator or legal representative charged with the
administration of such assets.
"Exchange Act" shall mean the Securities Exchange Act of 1934 as in
effect on the date of this Agreement.
"Fair Market Value" shall mean the product of (i) the percentage of
Holdings' outstanding common stock (assuming that there is only one class of
Holdings' common stock as provided in (iii) below), owned at the date of
determination by the Stockholder whose stock is the subject of the Transfer,
multiplied by (ii) the number of shares of Holdings' common stock assumed to
be outstanding as a result of the recapitalization referred to in clause
(iii) below, multiplied by (iii) the price per share at which the common
stock of Holdings (assuming that there is only one class of common stock and
a recapitalization on a basis that is determined by the investment banking
firms involved in determining Fair Market Value to be appropriate for an
optimal trading market in Holdings' common stock) would trade on a national
securities exchange, on NASDAQ or otherwise, assuming full liquidity and the
absence of any significant concentration of ownership of Holdings' common
stock in any holder or group of holders in the opinion of such investment
banking firms. In reaching such determination, such firm or firms shall set
the fair market value of Holdings' common equity, after taking into account
the amount of financial leverage in its capital structure and shall consider
whatever factors it or they deem relevant, including the price to earnings
ratio, the debt to equity ratio, the market value to book value ratio and the
market value to cash flow ratio of the common stock of publicly traded
companies in the same industry that are deemed reasonably comparable for this
purpose.
"Family Transferees" shall mean the spouse, children or grandchildren
of, or any trust for the benefit of the spouse, children or grandchildren of,
Silver or Horrigan.
"Group" shall mean, collectively, Silver and Horrigan and their
respective Affiliates and related Family Transferees and Estates (Silver and
his Affiliates, Silver's Family Transferees and Silver's Estate deemed to be
collectively one member of the Group; and Horrigan and his Affiliates,
Horrigan's Family Transferees and Horrigan's Estate deemed to be collectively
one member of the Group).
"Initial Investors" shall mean, collectively, MS Equity, Silver and
Horrigan and their respective Affiliates.
"Initial Stockholders" shall mean, collectively, MS Equity, Silver,
Horrigan and BTNY.
"Investment Entity" shall mean any Person who (i) is primarily engaged
in the business of investing in securities of other companies and not taking
an active role in the management or operations of such companies and (ii)
does not permit the participation or involvement in any way in the business
or affairs of Holdings of a Person who is engaged in a business not described
in clause (i); provided, however, that a Person shall not fail to be an
Investment Entity solely because employees of such Person are directors or
officers of a company described in clause (i).
"Investment Entity Sale" shall mean the sale or transfer of shares of
Common Stock to an Investment Entity.
"Investors" shall mean Silver, Horrigan, BTNY, MS Equity, First Plaza
and their respective Affiliates.
"IPO" shall mean the consummation of the first public offering of Common
Stock pursuant to a registration statement which has been declared effective
under the Securities Act.
"Morgan Stanley" shall mean Morgan Stanley & Co. Incorporated, financial
advisor to Holdings.
"Permanent Disability" shall mean the inability of Silver or Horrigan by
reason of illness or injury to perform substantially all of his duties in any
office in Holdings or its Affiliates during any continuous period of three
hundred sixty-five (365) days.
"Permitted Transfer" shall mean any transfer of shares of Common Stock
permitted pursuant to Article V hereof.
"Permitted Transferee" shall mean any Person to whom shares of Common
Stock are transferred in a Permitted Transfer.
"Person" shall mean an individual, a corporation, a partnership, a joint
venture, a trust or unincorporated organization, a joint stock company or
other similar organization or any other legal entity.
"Plastics" shall mean Silgan Plastics Corporation, a Delaware
corporation which is an indirect wholly owned subsidiary of Holdings.
"Prime Rate" shall mean the rate of interest which Bankers Trust Company
announces from time to time as its prime lending rate.
"Pro Rata Amount" with respect to any holder of Class A Stock, Class B
Stock or Class C Stock shall mean a fraction, the numerator of which shall be
the total number of shares of Class A Stock, Class B Stock and/or Class C
Stock owned by such holder (treating all such stock as a single class), and
the denominator of which shall be the total number of shares of Class A
Stock, Class B Stock and Class C Stock outstanding (treating all such shares
as a single class).
"Registration Expenses" shall mean in connection with any registration
and related offering of securities under Article VII of this Agreement (i)
all registration and filing fees, (ii) all fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements
of counsel) in connection with blue sky qualifications, (iii) all printing
expenses, (iv) all internal expenses of Holdings and its subsidiaries, (v)
all fees and expenses incurred in connection with the listing of such
securities on an exchange, (vi) the fees and disbursements of counsel for
Holdings and customary fees and expenses for independent certified public
accountants retained by Holdings (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter), (vii) the reasonable fees and expenses of
one counsel for the Stockholders selling shares of Common Stock in the
Secondary Tranche (as defined in Section 7.1(h)), and (viii) any other fees
and expenses of any such registration and related offering of securities
which are not Selling Expenses.
"S&H Inc." shall mean S&H Inc., a Connecticut corporation.
"Securities Act" shall mean the Securities Act of 1933 as in effect on
the date of this Agreement.
"Selling Expenses" shall mean in connection with any registration and
related offering of securities under Article VII of this Agreement all
underwriting discount, selling commissions and stock transfer taxes
applicable to any such securities and all fees and disbursements of counsel
for any of the Stockholders selling shares of Common Stock in the Secondary
Tranche (other than the fees and disbursements of one counsel designated by
such selling Stockholders).
"Silgan" shall mean Silgan Corporation, a Delaware corporation which is
a wholly owned subsidiary of Holdings.
"Stock Purchase Agreement" shall mean the agreement, dated as of the
date hereof, between Holdings and First Plaza, concerning the purchase by
First Plaza of 250,000 shares of Class B Stock.
"Stockholders" shall mean the Investors or any of their Permitted
Transferees.
"Stockholder" shall mean any of them or any of their Permitted
Transferees.
"Third Party Sale" shall mean the sale or transfer by any Stockholder of
such Stockholder's shares of Common Stock other than to an Affiliate of such
Person, or such Person's Estate or to a Trust all the beneficiaries of which
are Family Transferees, or an Estate or Trust of such Person or to a Family
Transferee.
"Transfer" shall mean sell, assign, transfer, exchange, mortgage, pledge
or grant a security interest in, or otherwise dispose of or encumber an
interest in, Holdings or shares of its capital stock.
"Trust" shall mean any trust created by will or inter vivos transfer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; LEGEND
3.1 Representations and Warranties of the Stockholders.
(a) Each of Silver and Horrigan represents and warrants to each of
the other Stockholders and Holdings that he is the record and beneficial
owner of 208,750 shares of Class A Stock; that he has the full power and
authority to enter into this Agreement; that this Agreement has been duly
authorized, executed and delivered by him; that the consummation of the
transactions contemplated hereunder will not result in a breach or violation
of, or a default under, any material agreement by which he or any of his
properties is bound or any statute, rule, regulation, order or other law to
which he is subject, nor require the obtaining of any consent or approval,
permit or license from or filing with, any governmental authority or other
Person by him in connection with the execution, delivery and performance by
him of this Agreement, except for violations which would not, or consents or
filings which, if not obtained or made, would not, in the aggregate, affect
materially and adversely the business or financial condition of Silver or
Horrigan and their respective Affiliates, taken as a whole; and that this
Agreement constitutes (assuming its due authorization and execution by the
other Stockholders and Holdings) his legal, valid and binding obligation.
(b) MS Equity represents and warrants to each of the other
Stockholders and Holdings that it is the record and beneficial owner of
417,500 shares of Class B Stock; that it is a limited partnership duly
organized and validly existing under the laws of its jurisdiction of
organization; that it has the power and authority under its agreement of
limited partnership to enter into and perform this Agreement; that the
execution of this Agreement by it has been duly authorized by all required
partnership action; that the consummation of the transactions contemplated
hereunder will not result in a breach or violation of, or a default under,
its agreement of limited partnership or under any agreement of partnership of
the general partner, or any material agreement by which it or any of its
properties or any of its general partner's properties is bound or any
statute, rule, regulation, order or other law to which it is subject, nor
require the obtaining of any consent, approval, permit or license from or
filing with, any governmental authority or other Person by MS Equity in
connection with the execution, delivery and performance by it of this
Agreement, except for violations which would not, or consents or filings
which, if not obtained or made, would not, in the aggregate, affect
materially and adversely the business, financial condition or results of
operation of MS Equity; and that this Agreement constitutes (assuming its due
authorization and execution by the other Stockholders and Holdings) its
legal, valid and binding obligation. MS Equity further represents and
warrants to Holdings that it is an "accredited investor" as such term is
defined in Rule 501 under the Securities Act.
(c) BTNY represents and warrants to the other Stockholders and
Holdings that it is the record and beneficial owner of 50,000 shares of Class
C Stock; that it is duly incorporated and validly existing as a corporation
under the laws of the state of its jurisdiction of incorporation, and is in
good standing therein; that it has the power and authority under its
certificate of incorporation to enter into and perform this Agreement; that
the execution of this Agreement by it has been duly authorized by all
required corporate actions; that the consummation of the transactions
contemplated hereunder will not result in a breach or violation of, or a
default under, its certificate of incorporation, its by-laws, or any material
agreement by which it or any of its properties is bound or any statute, rule,
regulation, order or other law to which it is subject, nor require the
obtaining of any consent, approval, permit or license from or filing with,
any governmental authority or other Person by BTNY in connection with the
execution, delivery and performance by it of this Agreement except for
violations which would not, or consents or filings which, if not obtained or
made, would not, in the aggregate, affect materially and adversely the
business, financial condition or results of operation of BTNY and its
Affiliates, taken as a whole; and that this Agreement constitutes (assuming
its due authorization and execution by the other Stockholders and Holdings)
its legal, valid and binding obligation.
(d) First Plaza represents and warrants to each of the other
Stockholders and Holdings that it is a trust duly organized and validly
existing under the laws of its jurisdiction of organization; that it has the
power and authority under its trust agreement to enter into and perform this
Agreement; that the execution of this Agreement by it has been duly
authorized; that the consummation of the transactions contemplated hereunder
will not result in a breach or violation of, or a default under, its trust
agreement or any material agreement by which it or any of its properties is
bound or any statute, rule, regulation, order or other law to which it is
subject, nor require the obtaining of any consent, approval, permit or
license from or filing with, any governmental authority or other Person by
First Plaza in connection with the execution, delivery and performance by it
of this Agreement, except for violations which would not, or consents or
filings which, if not obtained or made, would not, in the aggregate, affect
materially and adversely its ability to consummate the transactions
contemplated by, or fulfill its obligations under, this Agreement; and that
this Agreement constitutes (assuming its due authorization and execution by
the other Stockholders and Holdings) its legal, valid and binding obligation.
3.2 Representations and Warranties of Holdings. Holdings represents and
warrants to the Stockholders that it is duly incorporated and validly
existing as a corporation under the laws of the state of its jurisdiction of
incorporation, and is in good standing therein; that it has the power and
authority under its Certificate of Incorporation to enter into and perform
this Agreement; that the execution of this Agreement by it has been duly
authorized by all required corporate actions; that the consummation of the
transactions contemplated hereunder will not result in a breach or violation
of, or a default under, its Certificate of Incorporation, its By-Laws, or any
material agreement by which it or any of its properties is bound or any
statute, rule, regulation, order or other law to which it is subject, nor
require the obtaining of any consent, approval, permit or license from or
filing with, any governmental authority or other Person by Holdings in
connection with the execution, delivery and performance by it of this
Agreement, except for violations which would not, or consents or filings
which, if not obtained or made, would not, in the aggregate, affect
materially and adversely the business, financial condition or results of
operation of Holdings and its Affiliates, taken as a whole; and that this
Agreement constitutes (assuming its due authorization and execution by the
Stockholders) its legal, valid and binding obligation.
3.3 Legend on Certificates.
(a) The certificate (or certificates) representing the shares of
Class B Stock to be purchased by First Plaza pursuant to the Stock Purchase
Agreement shall bear the following legend on the face thereof:
The shares represented by this certificate may not be sold,
assigned, transferred, exchanged, mortgaged, pledged or otherwise
disposed of or encumbered without compliance with the provisions
of, and are otherwise restricted by the provisions of, that certain
Amended and Restated Organization Agreement among R. Philip Silver,
D. Greg Horrigan, The Morgan Stanley Leveraged Equity Fund II,
L.P., Bankers Trust New York Corporation, First Plaza Group Trust
and Silgan Holdings Inc. (the "Company") dated as of December 21,
1993 (the "Organization Agreement") and that certain Stockholders
Agreement dated as of December 21, 1993 among the same parties as
the parties to the Organization Agreement (the "Stockholders
Agreement"). Notice is given that the Company's Restated
Certificate of Incorporation and the Organization Agreement and
Stockholders Agreement contain provisions with respect to the
management of the Company, the composition and authority of its
Board of Directors and the transferability of the shares
represented by this certificate. Copies of the Organization
Agreement and Stockholders Agreement are on file and available for
inspection at the principal offices of the Company. Except as may
otherwise be provided in the Organization Agreement and
Stockholders Agreement, no transfer, sale, assignment, pledge,
hypothecation or other disposition of the shares represented by
this certificate may be made except (a) pursuant to an effective
registration statement under the Securities Act of 1933, as amended
(the "Act"), and all applicable state securities laws or (b) if the
Company has been furnished with an opinion of counsel for the
holder, which opinion and counsel shall be satisfactory to the
Company, to the effect that no registration under the Act is
required for such transfer, sale, assignment, pledge, hypothecation
or other disposition because of the availability of an exemption
from registration under the Act and the rules and regulations in
effect thereunder and all applicable state securities laws.
(b) The Initial Stockholders agree to exchange the certificates
delivered to them at the time of original issuance of their shares of Common
Stock (or any certificates subsequently issued to any Initial Stockholder)
for certificates bearing the legend set forth in Section 3.3(a) above.
ARTICLE IV
MANAGEMENT PROVISIONS
4.1 Management Services Contract. As of the Closing Date, the
Management Services Agreement, dated June 30, 1989, between Holdings and S&H
Inc., as amended by Amendment No. 1 thereto, dated July 13, 1990, and
Amendment No. 2 thereto, dated as of June 29, 1992 (the "Management
Contract"), shall be amended and restated by an agreement substantially in
the form of Exhibit D to the Stock Purchase Agreement (the Management
Contract as so amended and restated being referred to as the "Amended
Management Contract").
4.2 Day-to-Day Operations. The parties to this Agreement shall take
all necessary steps and actions (including, in the case of the Stockholders,
voting their shares of Common Stock) in order to accomplish, comply with and
maintain the following provisions: (i) the day-to-day operations of Holdings
shall be managed by its Executive Officers and its other officers, in
accordance with the duties and responsibilities ascribed to those officers in
the Certificate of Incorporation and the By-Laws and (ii) such officers shall
perform their duties in a manner consistent with the Amended Management
Contract and, as to those matters not delegated under the Amended Management
Contract, with directions which may be given from time to time by the Board
of Directors.
4.3 Arbitration of Deadlocks.
(a) In the event that, from time to time, the Board of Directors
shall be unable to reach agreement upon any particular matter submitted to it
(an "Open Matter"), the Initial Investors, acting through either Silver or
Horrigan and through a designee of MS Equity, shall hold one or more informal
meetings promptly in an effort to discuss and resolve such Open Matter. The
Initial Investors will seek to cause any conclusions arrived at during such
meetings to be implemented, where necessary, by action of the Required
Majority (as defined in the Certificate of Incorporation) of the Board of
Directors.
(b) If the procedure specified in paragraph (a) has not led to a
satisfactory resolution regarding an Open Matter within 30 days of any
Initial Investor seeking such an informal meeting with respect to such Open
Matter, then, upon a finding by any two directors that failure to resolve the
Open Matter threatens the continued existence of, or will result in
irreparable injury to, Holdings, the Open Matter shall be submitted for
determination in the following manner; provided, however, that (i) of the
items set forth in subparagraphs one through twenty of Article SIXTH of
Holdings' Certificate of Incorporation, only item number five may be so
submitted and (ii) any Open Matter not involving an item set forth in
subparagraphs one through twenty of Article SIXTH of Holdings' Certificate of
Incorporation may be submitted to arbitration only if the Initial Investors
agree that such item shall be so submitted. The directors in favor of the
Open Matter as a group and the directors opposed to the Open Matter as a
group shall, within ten days of such request, each appoint an independent
person as arbitrator to resolve the Open Matter. The arbitrators so chosen
promptly shall agree upon and appoint an independent person as an additional
arbitrator. The arbitrators promptly shall determine whether the Open Matter
meets the standard set forth in this paragraph as to matters which are to be
submitted to arbitration by the Initial Investors, and, if so, promptly shall
seek to resolve the Open Matter. The decision of the arbitrators shall be
final and binding upon Holdings and the Stockholders. The Board of Directors
or, if the Board of Directors shall not have done so within five days of the
arbitrators' decision, the Stockholders shall take any and all action
necessary to implement such decision. If, pursuant to the preceding
sentence, the resolution of an Open Matter is submitted to the Stockholders
for authorization, the Initial Investor which is in favor of such resolution
shall be entitled to vote all of the shares of Class A Stock and Class B
Stock held by any other Initial Investors in favor of such resolution, and
the action of a majority of the holders of outstanding Class A Stock and
Class B Stock, voting as a single class, shall be sufficient to approve such
resolution.
(c) If the arbitrators chosen by the Board of Directors are unable
to agree upon and appoint an additional arbitrator, the Open Matter shall be
resolved by three arbitrators appointed by the American Arbitration
Association (the "AAA") in accordance with the then prevailing Commercial
Arbitration Rules thereof (the "Rules"). The AAA shall be required to
endeavor to appoint experts in a discipline relevant to the Open Matter and,
if the same issue or an issue similar to the Open Matter has been submitted
to arbitration by the Initial Investors before, to appoint one or more of the
same arbitrators to determine the Open Matter and each such same (or similar)
issue, but the failure to do any of the foregoing shall not be a basis for
avoiding, setting aside or altering the arbitral award.
(d) Any arbitration referred to in this Agreement shall be
conducted under the Rules in the City of Wilmington, Delaware unless the
parties mutually agree to have the arbitration held elsewhere, and the award
made therein shall be entered in the applicable State Courts of Delaware or,
as the case may be, the United States District Court for Delaware. Solely for
the purposes of applying for an order confirming, modifying, correcting or
vacating the award, the parties hereby consent and submit themselves to the
personal jurisdiction of State Courts of Delaware or, as the case may be, the
United States District Court for Delaware. Each party agrees that the
arbitration provisions in the Certificate of Incorporation shall be binding
upon the heirs or successors and the assigns and any trustee, receiver or
executor of such party. Each party hereto shall bear the expense of its own
representatives and any other expenses of the arbitration proceeding shall be
borne by the parties as may be determined by the Rules or as may be assessed
by the arbitrators. Except to the extent required by law, no party,
arbitrator, representative, counsel or witness shall disclose or confirm to
any person not present at the arbitration hearings, any information about the
hearings, including the names of the parties and arbitrators, the nature and
amount of the claims, the financial condition of any party, the expected date
of hearing or the award made.
4.4 Investment Opportunities. Nothing in this Agreement shall be
construed so as to prohibit any Stockholder from owning or investing in any
business of any nature and description, independently or with others, and no
Stockholder need disclose its intention to make any such investment to the
other, nor advise Holdings of the opportunity presented by any such
prospective investment; provided, however, that if the Group or either of its
members is presented with any such opportunity which concerns the manufacture
or sale of metal or plastic containers in North America (or such other
products, if any, which the Stockholders determine, by majority vote of the
outstanding shares of Class B Stock, are similar to such products as are
manufactured or sold or proposed to be manufactured or sold in North America
by Containers or Plastics or are otherwise directly competitive with products
produced by Holdings and its subsidiaries), such member or members must first
offer such opportunity to Holdings by submitting such opportunity to the
Investment Opportunity Committee (as defined in the Certificate of
Incorporation) of Holdings' Board of Directors for action. If such committee
fails to approve the making of such investment by Holdings within 5 business
days after receipt of the notice pursuant to which such submission to
Investment Committee is made, the Group or either of its members shall then
be free to take any action with respect to such investment as it, in its sole
discretion, shall decide.
4.5 Confidentiality. The Stockholders and Holdings agree that for the
term of this Agreement and for a period of ten years after the termination
hereof, (a) each shall use its best efforts to cause its respective directors
and officers to keep confidential all intellectual property and other
proprietary information of Holdings and its subsidiaries, including all
information concerning pricing and terms of sale of products, and (b) each
shall hold and shall cause its consultants and advisors to hold in strict
confidence, unless compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other requirements of law, all
documents and information concerning any other party hereto furnished it by
such other party or its representatives in connection with the transactions
contemplated by this Agreement, except to the extent that any other
information referred to in clause (a) or (b) above can be shown to have been
(i) previously known by the party to which it is furnished, (ii) in the
public domain through no fault of such party, or (iii) later lawfully
acquired from other sources by the party to which it was furnished.
ARTICLE V
RESTRICTIONS ON TRANSFER
5.1 Limitations of Transfer.
(a) Except as specifically permitted in this Article and in
Articles VI and VII hereof and except in the case of Silver or Horrigan with
respect to Transfers to a Family Transferee of Silver or Horrigan,
respectively, no Stockholder shall, without the prior written consent of MS
Equity, Silver and Horrigan, transfer any shares of Common Stock; provided,
however, that First Plaza may transfer any shares of Common Stock held by it
to one more successor trusts, and any such successor trust may transfer
shares of Common Stock held by it to one or more successor trusts. Any
Permitted Transfer shall not relieve a Stockholder from its obligations under
this Agreement and shall not be effected unless and until the transferee
agrees in writing prior to the Transfer to be bound by the terms of this
Agreement, including all representations and warranties contained in Article
III hereof with the appropriate changes reflecting the organization of such
transferee, as and to the same extent that the transferor Stockholder was
bound by this Agreement immediately prior to such Transfer.
(b) Any Stockholder that effects a Permitted Transfer of the
shares of Common Stock it holds understands and agrees with Holdings that:
(i) it may do so only in compliance with the Securities Act, as then in
effect; (ii) no Transfer of any of the shares of Common Stock shall be
permitted without a written opinion of counsel of recognized standing in
securities laws (including in-house counsel) to the effect that the proposed
Transfer of the shares of Common Stock would not be in violation of the
Securities Act or any applicable state securities laws, which opinion shall
be, at such Stockholder's expense, submitted to Holdings and shall be
satisfactory in form and substance to Holdings and (iii) it will give notice
of any such Permitted Transfer to each of the Investors. In addition, the
Stockholders agree not to transfer any of the shares of Common Stock except
for transfers made in compliance with the terms of this Agreement, the terms
of Holdings' Certificate of Incorporation as in effect from time to time and
all applicable federal and state securities laws.
(c) Any purported Transfer which does not comply with this Section
5.1 shall be deemed void and of no effect and shall be governed by the
provisions of Section 5.3 hereof.
5.2 Transfers to Affiliates. Each of MS Equity, BTNY, First Plaza,
Silver, Horrigan and their Permitted Transferees shall be entitled from time
to time, without the consent of any other Stockholders, to Transfer any or
all of the shares of capital stock of Holdings owned by it to an Affiliate of
such of MS Equity, BTNY, First Plaza, Silver, Horrigan and their Permitted
Transferees; provided, however, that such transferee shall, prior to the
Transfer, agree in writing to, and thereafter shall, re-transfer ownership of
any shares of capital stock of Holdings owned by such transferee back to the
transferor Stockholder prior to the time such transferee ceases to be an
Affiliate of such Stockholder, if the transferor Stockholder is at the time
of such re-transfer an Affiliate of an Initial Stockholder or, if not, to
whichever of the Initial Stockholders was the original transferor of the
shares in question. In the event that the transferee ceases to be an
Affiliate of the transferor Stockholder without a transfer to the transferor
Stockholder or the Initial Stockholder which was the original transferor, as
the case may be, having taken place, the ownership of such shares by such
transferee shall be governed by the provisions of Section 5.3 hereof.
5.3 Effect of Void Transfers. In the event a Transfer of any shares of
Common Stock has taken place or, with regard to Section 5.2 hereof, remains
in place in violation of the provisions of this Article, such Transfer shall
be void and of no effect, and no dividend of any kind whatsoever nor any
distribution pursuant to liquidation or otherwise shall be paid by Holdings
to the transferee in respect of such shares (all such dividends and
distributions being deemed waived), and the voting rights of such shares on
any matter whatsoever shall remain vested in the transferor, during the
period commencing with such party's initial failure of compliance and ending
when compliance shall have occurred.
5.4 Right of First Refusal.
(a) Other than Transfers permitted by Sections 5.1 and 5.2 hereof,
at any time prior to June 30, 1994, MS Equity may sell or transfer any shares
of Common Stock owned by it only as follows: MS Equity must give notice (the
"MS Offer Notice") to the Group setting forth the number of shares of Common
Stock (the "MS Offered Shares") proposed to be sold, the terms and conditions
of such sale or transfer, and the price or method for determining such price.
Except as set forth in the last sentence of this Section 5.4(a), the Group
shall have the right to purchase some or all of the MS Offered Shares at such
price and on such terms and conditions set forth in the MS Offer Notice.
Within fifty-five (55) days of receipt of the MS Offer Notice, the Group
shall notify MS Equity whether it will exercise its right to purchase the MS
Offered Shares. Failure of the Group to so notify MS Equity shall be deemed
a determination by the Group not to purchase the MS Offered Shares. If the
Group exercises its respective right to purchase the MS Offered Shares, the
Group must consummate the purchase within ninety (90) days after the date of
the notice of such exercise at a price equal to or greater than the price and
upon the same terms and conditions set forth in the MS Offer Notice. No
shares of Common Stock may be purchased pursuant to this Section 5.4(a)
unless all the shares of Common Stock set forth in the MS Offer Notice are
purchased or unless MS Equity consents to the purchase of less than all the
MS Offered Shares.
(b) Other than Transfers permitted by Sections 5.1 and 5.2 hereof,
at any time prior to June 30, 1994, each member of the Group may sell or
transfer any shares of Common Stock owned by such member only as follows:
such member of the Group (the "Group Offeror") must give notice (the "Group
Offer Notice") to the other member of the Group and MS Equity setting forth
the number of shares of Common Stock (the "Group Offered Shares") proposed to
be sold, the terms and conditions of such sale or transfer, and the price or
method for determining such price. Except as set forth in the last sentence
of this Section 5.4(b), the other member of the Group shall have the right to
purchase some or all of the Group Offered Shares at such price and on such
conditions set forth in the Group Offer Notice. Within fifty-five (55) days
of the receipt of the Group Offer Notice, the other member of the Group shall
notify the Group Offeror and MS Equity whether it will exercise its right to
purchase the Group Offered Shares. Failure of the other member of the Group
to so notify all such parties shall be deemed a determination by such other
member of the Group not to purchase the Group Offered Shares. If such other
member of the Group elects to purchase none, or less than all, of the Group
Offered Shares, MS Equity shall have the right to purchase all the Group
Offered Shares not purchased by the other member of the Group. Within sixty
(60) days of receipt of the Group Offer Notice, MS Equity shall notify the
Group whether they will exercise their right to purchase such remaining Group
Offered Shares. Failure of MS Equity to so notify all such parties shall be
deemed a determination by MS Equity not to purchase the Group Offered Shares.
If either the other member of the Group or MS Equity exercises its respective
right to purchase the Group Offered Shares, such party must consummate the
purchase within ninety (90) days after the date of the notice of such
exercise at a price equal to or greater than the price and upon the same
terms and conditions set forth in the Group Offer Notice. No shares of
Common Stock may be purchased pursuant to this Section 5.4(b) unless all the
shares of Common Stock set forth in the Group Offer Notice are purchased or
unless the Group Offeror consents to the purchase of less than all the Group
Offered Shares.
(c) Other than Transfers permitted by Sections 5.1 and 5.2 hereof,
at any time prior to June 30, 1994, BTNY may sell or transfer any of its
shares of Common Stock only as follows: BTNY must give notice (the "BTNY
Offer Notice") to MS Equity and the Group (the "Section 5.4(c) Offerees")
setting forth the number of shares of Common Stock (the "BTNY Offered
Shares") proposed to be sold, the terms and conditions of such sale or
transfer, and the price or method for determining such price. Except as set
forth in the sixth sentence of this Section 5.4(c), each Section 5.4(c)
Offeree shall have the right to purchase that percentage of the BTNY Offered
Shares determined by dividing the total number of shares of Common Stock
owned by such Section 5.4(c) Offeree by the total number of shares of Common
Stock owned by both Section 5.4(c) Offerees; provided that in the event a
Section 5.4(c) Offeree elects to purchase less than its full proportionate
share, then the other Section 5.4(c) Offeree shall have the right to purchase
all of such remaining BTNY Offered Shares. Within fifty-five (55) days of
the receipt of the BTNY Offer Notice, each Section 5.4(c) Offeree shall
notify BTNY and the other Section 5.4(c) Offeree whether it will exercise its
right to purchase its proportionate share and the maximum number of BTNY
Offered Shares such Section 5.4(c) Offeree would elect to purchase. Failure
of a Section 5.4(c) Offeree to so notify all such parties shall be deemed a
determination by such Section 5.4(c) Offeree not to purchase the BTNY Offered
Shares. If either of the Section 5.4(c) Offerees exercises its respective
right to purchase the BTNY Offered Shares, such party must consummate the
purchase within ninety (90) days after the date of the notice of exercise of
such right at a price equal to or greater than the price and upon the same
terms and conditions set forth in the BTNY Offer Notice. No shares of Common
Stock may be purchased pursuant to this Section 5.4(c) unless all the shares
of Common Stock set forth in the BTNY Offer Notice are purchased or unless
BTNY consents to the purchase of less than all the BTNY Offered Shares.
(d) Other than Transfers permitted by Sections 5.1 and 5.2 hereof,
at any time prior to June 30, 1994, First Plaza may sell or transfer any of
its shares of Common Stock only as follows: First Plaza must give notice
(the "First Plaza Offer Notice") to MS Equity and the Group (the "Section
5.4(d) Offerees") setting forth the number of shares of Common Stock (the
"First Plaza Offered Shares") proposed to be sold, the terms and conditions
of such sale or transfer, and the price or method for determining such price.
Except as set forth in the sixth sentence of this Section 5.4(d), each
Section 5.4(d) Offeree shall have the right to purchase that percentage of
the First Plaza Offered Shares determined by dividing the total number of
shares of Common Stock owned by such Section 5.4(d) Offeree by the total
number of shares of Common Stock owned by both Section 5.4(d) Offerees;
provided that in the event a Section 5.4(d) Offeree elects to purchase less
than its full proportionate share, then the other Section 5.4(d) Offeree
shall have the right to purchase all of such remaining First Plaza Offered
Shares. Within fifty-five (55) days of the receipt of the First Plaza Offer
Notice, each Section 5.4(d) Offeree shall notify First Plaza and the other
Section 5.4(d) Offeree whether it will exercise its right to purchase its
proportionate share and the maximum number of First Plaza Offered Shares such
Section 5.4(d) Offeree would elect to purchase. Failure of a Section 5.4(d)
Offeree to so notify all such parties shall be deemed a determination by such
Section 5.4(d) Offeree not to purchase the First Plaza Offered Shares. If
either of the Section 5.4(d) Offerees exercises its respective right to
purchase the First Plaza Offered Shares, such party must consummate the
purchase within ninety (90) days after the date of the notice of exercise of
such right at a price equal to or greater than the price and upon the same
terms and conditions set forth in the First Plaza Offer Notice. No shares of
Common Stock may be purchased pursuant to this Section 5.4(d) unless all the
shares of Common Stock set forth in the First Plaza Offer Notice are
purchased or unless First Plaza consents to the purchase of less than all of
the First Plaza Offered Shares.
(e) In addition to transfers permitted by Sections 5.1 and 5.2
hereof, at any time on or after June 30, 1994, MS Equity may effect any
Investment Entity Sale (or, if an Event of Default has occurred and is
continuing under Paragraph 5(a) of the Amended Management Contract, any Third
Party Sale) if MS Equity first offers such MS Offered Shares to Holdings, the
Group and BTNY (the "Section 5.4(e) Offerees") for purchase in compliance
with this Section 5.4(e). Subject to the last paragraph of this Section
5.4(e), MS Equity may not sell or transfer (including without limitation in a
transaction of the type set forth in Section 5.1 hereof) shares of Common
Stock held by MS Equity to a transferee other than the Section 5.4(e)
Offerees unless MS Equity shall have made available to BTNY and First Plaza
the opportunity to participate in such sale or transfer, by selling before or
simultaneously with the closing of any such sale by MS Equity, a percentage
of BTNY's shares of Common Stock and a percentage of First Plaza's shares of
Common Stock, each of which is equal to the percentage of MS Equity's shares
of Common Stock to be sold or offered, at the same price per share and on the
same terms and conditions as those of the Investment Entity Sale or the Third
Party Sale, as the case may be (such rights of BTNY and First Plaza are
referred to herein as the "Pro Rata Rights"). MS Equity shall promptly
provide an MS Offer Notice to the Section 5.4(e) Offerees and to First Plaza
setting forth the terms of the proposed Investment Entity Sale or Third Party
Sale, including the identity of the proposed purchaser, the number of shares
of Common Stock being sold, the terms and conditions of the Investment Entity
Sale or Third Party Sale, and the price or method of determining such price.
The MS Offer Notice shall notify BTNY and First Plaza of each of their Pro
Rata Rights, if applicable. Within fifteen (15) days of the receipt of the
MS Offer Notice, Holdings shall notify MS Equity and the other Section 5.4(e)
Offerees whether it will exercise its right to purchase up to all the MS
Offered Shares. Failure of Holdings to so notify all such parties shall be
deemed a determination by Holdings not to purchase the MS Offered Shares. If
Holdings determines to purchase less than all the MS Offered Shares, and if
the Group desires to purchase any or all of such remaining MS Offered Shares,
the Group shall notify MS Equity and the other Section 5.4(e) Offerees within
twenty-five (25) days of the receipt of the MS Offer Notice of the number of
MS Offered Shares, if any, that the Group will exercise its right to
purchase. Failure of the Group to so notify all such parties shall be deemed
a determination by the Group not to purchase the MS Offered Shares. If
Holdings and the Group determine to purchase in the aggregate less than all
the MS Offered Shares, and if BTNY desires to purchase all of such remaining
MS Offered Shares, BTNY shall notify MS Equity and the other Section 5.4(e)
Offerees within thirty (30) days of receipt of the MS Offer Notice that BTNY
will exercise its right to purchase such remaining MS Offered Shares.
Failure of BTNY to so notify all such parties shall be deemed a determination
by BTNY not to purchase the MS Offered Shares. No shares of Common Stock may
be purchased by any of the Section 5.4(e) Offerees, or a combination thereof,
pursuant to this Section 5.4(e) unless all the shares of Common Stock set
forth in the MS Offer Notice are purchased or unless MS Equity consents to
the purchase of less than all the MS Offered Shares. If any of the Section
5.4(e) Offerees exercises its respective right to purchase the MS Offered
Shares, such party must consummate the purchase within ninety (90) days after
the date of the notice of such exercise at a price equal to or greater than
the price and upon the same terms and conditions set forth in the MS Offer
Notice. If none of the Section 5.4(e) Offerees, or a combination thereof,
determines to purchase in the aggregate all the MS Offered Shares, and if MS
Equity has not consented to the purchase of less than all the MS Offered
Shares, MS Equity shall, subject to the Pro Rata Rights, be free to sell the
MS Offered Shares to the purchaser designated in the MS Offer Notice,
provided that (i) such sale is consummated within ninety (90) days after the
expiration of the thirty (30) day period referred to above at a price equal
to or greater than the price and upon the same terms and conditions as set
forth in the MS Offer Notice and (ii) the transferee agrees to be bound by
all of the terms and provisions of this Agreement.
In addition to the rights and obligations set forth above, if MS Equity
proposes to make an Investment Entity Sale or Third Party Sale pursuant to
this Section 5.4(e), MS Equity may give notice (the "Pro Rata Notice") to
BTNY and First Plaza (each a "Pro Rata Rights-Holder") setting forth the
price range within which MS Equity intends to sell its shares of Common
Stock. The Pro Rata Notice shall also set forth that such notice is being
delivered pursuant to this paragraph and that the failure of a Pro Rata
Rights-Holder to provide the Response Notice (as defined below) shall be
deemed a determination by such Pro Rata Rights-Holder not to exercise its Pro
Rata Rights with respect to the proposed sale which is the subject of such
Pro Rata Notice. The maximum price set forth in the Pro Rata Notice shall
not exceed by more than 25% the minimum price set forth in the Pro Rata
Notice. Within fifteen (15) days after the receipt of the Pro Rata Notice,
each Pro Rata Rights-Holder shall notify MS Equity (the "Response Notice")
whether, subject to such Pro Rata Rights-Holder's right of first refusal, if
any, as provided herein, such Pro Rata Rights-Holder intends to exercise its
Pro Rata Rights, the price at which such Pro Rata Rights-Holder would be
willing to exercise its Pro Rata Rights and the number of shares of Common
Stock that such Pro Rata Rights-Holder wishes to include in the proposed
Investment Sale or Third Party Sale. Subject to a Pro Rata Rights-Holder's
right of first refusal, if any, as provided herein, the Response Notice shall
be deemed an irrevocable commitment of such Pro Rata Rights-Holder to
exercise its Pro Rata Rights to sell the number of shares of Common Stock
specified therein for at least the price specified therein (the "Designated
Price"); provided, however, that if MS Offered Shares are sold at a price
which exceeds the Designated Price, such Pro Rata Rights-Holder shall have
the right to sell the number of shares of Common Stock specified in the
Response Notice at such higher price. Failure of a Pro Rata Rights-Holder to
notify MS Equity shall be deemed a determination by such Pro Rata Rights-
Holder not to exercise its Pro Rata Rights with respect to the Investment
Entity Sale or Third Party Sale which is the subject of the Pro Rata Notice.
(f) In addition to Transfers permitted by Sections 5.1 and 5.2
hereof, at any time on or after June 30, 1994, each member of the Group may
effect any Third Party Sale if such Group Offeror first offers such Group
Offered Shares to the other member of the Group, Holdings, MS Equity and BTNY
(the "Section 5.4(f) Offerees") for purchase in compliance with this Section
5.4(f). The Group Offeror shall promptly provide a Group Offer Notice to the
Section 5.4(f) Offerees with a copy to First Plaza setting forth the terms of
the proposed Third Party Sale, including the identity of the proposed
purchaser, the number of shares of Common Stock being sold, the terms and
conditions of such sale, and the price or method for determining such price.
Within fifteen (15) days of the receipt of the Group Offer Notice, the other
member of the Group shall notify the Group Offeror and the other Section
5.4(f) Offerees whether it will exercise its right to purchase up to all the
Group Offered Shares. Failure of the other member of the Group to so notify
all such parties shall be deemed a determination by such other member of the
Group not to purchase the Group Offered Shares. If the other member of the
Group determines to purchase less than all the Group Offered Shares, and
Holdings desires to purchase any or all of such remaining Group Offered
Shares, then Holdings shall, within twenty (20) days of receipt of the Group
Offer Notice, notify the Group Offeror and the other Section 5.4(f) Offerees
of the number of Group Offered Shares, if any, that Holdings will exercise
its right to purchase. Failure of Holdings to so notify all such parties
shall be deemed a determination by Holdings not to purchase the Group Offered
Shares. If the other member of the Group and Holdings determine to purchase
in the aggregate less than all the Group Offered Shares, and if MS Equity
desires to purchase any or all of such remaining Group Offered Shares, MS
Equity shall notify the Group Offeror and the other Section 5.4(f) Offerees
within twenty-five (25) days of the receipt of the Group Offer Notice of the
number of Group Offered Shares, if any, that MS Equity will exercise its
right to purchase. Failure of MS Equity to so notify all such parties shall
be deemed a determination by MS Equity not to purchase the Group Offered
Shares. If the other member of the Group, Holdings and MS Equity determine
to purchase in the aggregate less than all the Group Offered Shares, and if
BTNY desires to purchase all of such remaining Group Offered Shares, BTNY
shall notify the Group Offeror and the other Section 5.4(f) Offerees within
thirty (30) days of receipt of the Group Offer Notice that BTNY will exercise
its right to purchase such remaining Group Offered Shares. Failure of BTNY
to so notify all such parties shall be deemed a determination by BTNY not to
purchase the Group Offered Shares. No shares of Common Stock may be
purchased by any of the Section 5.4(f) Offerees, or a combination thereof,
pursuant to this Section 5.4(f) unless all the shares of Common Stock set
forth in the Group Offer Notice are purchased or unless the Group Offeror
consents to the purchase of less than all the Group Offered Shares. If any
of the Section 5.4(f) Offerees exercises its respective right to purchase the
Group Offered Shares, such party must consummate the purchase within ninety
(90) days after the date of the notice of such exercise at a price equal to
or greater than the price and upon the same terms and conditions set forth in
the Group Offer Notice. If none of the Section 5.4(f) Offerees, or a
combination thereof, determines to purchase in the aggregate all the Group
Offered Shares, the Group Offeror shall be free to sell the Group Offered
Shares to the purchaser designated in the Group Offer Notice, provided that
(i) such sale is consummated within ninety (90) days after the expiration of
the thirty (30) day period referred to above at a price equal to or greater
than the price and upon the same terms and conditions as set forth in the
Group Offer Notice and (ii) the transferee agrees in writing to be bound by
all of the terms and provisions of this Agreement.
(g) In addition to Transfers permitted by Sections 5.1 and 5.2
hereof, at any time on or after June 30, 1994, BTNY may effect any Third
Party Sale if BTNY first offers such BTNY Offered Shares to Holdings, MS
Equity and the Group (MS Equity and the Group being referred to herein as the
"Section 5.4(g) Offerees"). BTNY shall promptly provide a BTNY Offer Notice
to Holdings and the Section 5.4(g) Offerees with a copy to First Plaza
setting forth the terms of the proposed Third Party Sale, including the
identity of the proposed purchaser, the number of shares of Common Stock
being sold, the terms and conditions of such sale, and the price or method
for determining such price. Within fifteen (15) days of the receipt of the
BTNY Offer Notice, Holdings shall notify BTNY and the Section 5.4(g) Offerees
whether it will exercise its right to purchase up to all the BTNY Offered
Shares. Failure of Holdings to so notify all such parties shall be deemed a
determination by Holdings not to purchase the BTNY Offered Shares. If
Holdings determines to purchase less than all the BTNY Offered Shares, then
each Section 5.4(g) Offeree shall have the right to purchase up to that
percentage of the BTNY Offered Shares determined by dividing the total number
of shares of Common Stock owned by such Section 5.4(g) Offeree by the total
number of shares of Common Stock owned by both Section 5.4(g) Offerees;
provided that in the event a Section 5.4(g) Offeree elects to purchase less
than its full proportionate share, then the other Section 5.4(g) Offeree
shall have the right to purchase such remaining BTNY Offered Shares. Within
twenty (20) days of the receipt of the BTNY Offer Notice, each Section 5.4(g)
Offeree shall notify BTNY, Holdings and the other Section 5.4(g) Offeree
whether it will exercise its right to purchase its proportionate share and
the maximum number of BTNY Offered Shares such Section 5.4(g) Offeree would
elect to purchase. Failure of a Section 5.4(g) Offeree to so notify all such
parties shall be deemed a determination by such Section 5.4(g) Offeree not to
purchase BTNY Shares. No shares of Common Stock may be purchased by Holdings
or the Section 5.4(g) Offerees, or a combination thereof, pursuant to this
Section 5.4(g) unless all the shares of Common Stock set forth in the BTNY
Offer Notice are purchased or unless BTNY consents to the purchase of less
than all the BTNY Offered Shares. If any of Holdings or the Section 5.4(g)
Offerees exercises its respective right to purchase the BTNY Offered Shares,
such party must consummate the purchase within ninety (90) days after the
date of the notice of such exercise at a price equal to or greater than the
price and upon the same terms and conditions set forth in the BTNY Offer
Notice. If none of Holdings or the Section 5.4(g) Offerees, or a combination
thereof, determines to purchase in the aggregate all the BTNY Offered Shares,
BTNY shall be free to sell the BTNY Offered Shares to the purchaser
designated in the BTNY Offer Notice, provided that (i) such sale is
consummated within ninety (90) days after the expiration of the twenty (20)
day period referred to above at a price equal to or greater than the price
and upon the same terms and conditions as set forth in the BTNY Offer Notice
and (ii) the transferee agrees in writing to be bound by all of the terms and
provisions of this Agreement.
(h) The purchase price for any shares of Common Stock purchased by
a Stockholder or Holdings pursuant to this Section 5.4 shall be paid by the
purchaser at the closing of such sale in immediately available funds against
delivery by the seller of the shares of Common Stock being sold, free and
clear of all liens, charges and encumbrances, in the form of the certificate
or certificates representing such shares of Common Stock, accompanied by
appropriate stock powers, duly executed or endorsed in blank, with the
appropriate transfer tax stamps affixed.
(i) In the event either member of the Group, MS Equity, BTNY or
First Plaza fails to comply with the provisions of this Section 5.4 in
respect of any sale, such sale shall be void and of no effect, and the shares
of Common Stock so sold shall be governed by the terms of Section 5.3 hereof
for the period commencing with the initial failure of compliance with this
Section 5.4 and ending when all parties having such rights of first refusal
shall have been given a full opportunity to exercise its rights under and in
accordance with the terms of this Agreement, or when such parties having a
right of first refusal shall have waived their respective rights of first
refusal in writing.
(j) At any time on or after June 30, 1994, either MS Equity or the
Group shall have the right to require a Recapitalization Transaction (as
hereinafter defined) to be consummated, such right to be the subject of at
least sixty (60) days' prior written notice (the "Recapitalization Notice")
by whichever of MS Equity or the Group desires to exercise such right (the
"Initiating Party") to the other party (the "Receipt Party"), BTNY and First
Plaza specifying the terms of such Recapitalization Transaction. Upon
receipt of the Recapitalization Notice, the Receipt Party, BTNY and First
Plaza shall promptly take all reasonable steps necessary to assist in the
consummation of the Recapitalization Transaction including the voting of its
shares of Common Stock in favor thereof. "Recapitalization Transaction"
shall mean any transaction involving Holdings, including a merger,
consolidation, exchange of securities or liquidation, pursuant to which MS
Equity and the Group or their respective Permitted Transferees retain their
proportionate ownership of shares of Common Stock in Holdings or of the
shares of a Resultant Entity; provided that: (i) the value of any securities
of the Resultant Entity which the Receipt Party acquires or retains does not
exceed 67% of the difference between (x) the value of such securities and
cash, if any, received by the Receipt Party and (y) all federal, state and
local taxes payable by the Receipt Party as a result of the Recapitalization
Transaction; (ii) if MS Equity or its Permitted Transferee is the Initiating
Party and MS Equity or its Permitted Transferee will not own all of the
voting equity securities in the Resultant Entity not owned by the Group (the
"MS Equity Securities"), (A) the Group shall have the right to purchase all
or a portion of the MS Equity Securities in the same manner and under the
same procedure as provided in Section 5.4(e) with respect to the Group and
(B) to the extent the Group determines to purchase less than all of the MS
Equity Securities and such partial purchase is agreed to by MS Equity as in
the case of partial purchases under Section 5.4(e), the successor in interest
to MS Equity or its Permitted Transferees shall be an Investment Entity (the
"Successor Entity"); (iii) if the Group or its Permitted Transferees is the
Initiating Party and the Group or its Permitted Transferees will not own all
of the voting equity securities in the Resultant Entity not owned by MS
Equity (the "Group Securities"), MS Equity shall have the right to purchase
all of the Group Securities in the same manner and under the same procedure
as provided in Section 5.4(f); and (iv) the majority in principal amount of
the indebtedness incurred in connection with such Recapitalization
Transaction shall be held at closing, and for at least one year after
closing, by a Person or Persons who are not Affiliates of the Group, MS
Equity or their respective Permitted Transferees or the Successor Entity,
except insofar as such indebtedness is held by an Affiliate of MS Equity
performing normal functions as an underwriter or in connection with normal
market making procedures in the aftermath of an underwriting. "Resultant
Entity" shall mean the corporation, partnership, joint venture, trust or
unincorporated organization, joint stock company or other similar
organization or other entity that is the surviving or continuing entity after
a Recapitalization Transaction.
5.5 Right to Sell Stock Upon Death or Disability; Purchase Price; Terms
of Purchase.
(a) If prior to June 30, 1994, the active provision of services by
either Silver or Horrigan (collectively, the "Managers", and individually, a
"Manager") to Holdings or any of its subsidiaries shall be terminated by
reason of such Manager's (x) death or (y) Permanent Disability, each of such
Manager and his Affiliates, Family Transferees, Estate and any of his Trusts
(collectively, the "Manager Seller") shall have the right to sell all the
shares of Class A Stock held by the Manager Seller to Holdings; provided that
the Manager Seller shall first offer to sell all such shares to the member of
the Group not affiliated with the Manager Seller at the price and upon the
terms and conditions set forth in this Section 5.5. The Manager Seller shall
give written notice (the "Manager Seller Notice") to the other member of the
Group and Holdings within six months after the date that the Manager's
provision of services ended. Within fifty-five (55) days of the receipt of
the Manager Seller Notice, the other member of the Group shall notify the
Manager Seller and Holdings of the number of shares of Class A Stock, if any,
that it will exercise its right to purchase. Failure of such other member of
the Group to so notify all such parties shall be deemed a determination by
such other member of the Group not to purchase such shares. If the other
member of the Group determines to purchase less than all the Manager Seller's
shares of Class A Stock, the Manager Seller shall have the right to sell to
Holdings, and, subject to the provisions of this Section 5.5, Holdings shall
be obligated to purchase, all such remaining shares at the price and upon the
terms and conditions set forth in this Section 5.5.
(b) Unless otherwise specified, all shares of Class A Stock
purchased by the other member of the Group or Holdings pursuant to Section
5.5(a) hereof shall be purchased at Fair Market Value. The aggregate
purchase price shall be paid in cash or, at the option of the purchaser, by a
promissory note of such purchaser (a "Note"), against delivery by the Manager
Seller of the shares of Class A Stock being sold, free and clear of all
liens, charges and encumbrances, in the form of the certificate or
certificates representing such shares, accompanied by appropriate stock
powers, duly executed or endorsed in blank, with the appropriate transfer tax
stamps affixed. Such Note shall bear simple interest at a rate of not less
than the Prime Rate plus 5% per annum and shall be payable semiannually.
Such Note shall mature on a date selected by the purchaser, which date (the
"Maturity Date"), if permitted under the terms of the Holdings Agreements (as
defined below), shall be no later than the earlier of (i) five (5) years from
the date hereof and (ii) the date of an IPO, and which Maturity Date, in any
event, shall be no later than July 1, 2002, subject to acceleration or
prepayment at the option of the purchaser; provided, however, in the case of
Holdings, that such acceleration or prepayment shall be permitted only if it
would be permitted under the terms of the Holdings Agreements. For purposes
of this Agreement, the term "Holdings Agreements" shall mean the Indenture
dated June 29, 1992, relating to Holdings' 13-1/4% Discount Debentures due
2002 (the "Debentures"), or any credit agreement or agreements replacing, or
representing a refinancing of the Debentures, and the Amended and Restated
Holdings Guaranty, dated as of June 30, 1989, and amended and restated as of
June 18, 1992, and further amended and restated as of December 21, 1993,
entered into in connection with the Bank Financing (as the same may be
amended, modified, supplemented or replaced from time to time, the
"Guaranty").
(c) Holdings shall not be obligated to purchase any shares of
Class A Stock pursuant to this Agreement, regardless of whether it has
delivered a notice of its election to purchase any such shares, (i) if the
purchase thereof would result in a violation of any law, statute, order,
writ, injunction, decree, judgment, rule, regulation, policy or guideline
promulgated, or judgment entered, by any federal, state, local or foreign
court or governmental authority applicable to Holdings or any of its
subsidiaries or any of its or their property, or (ii) to the extent that,
after giving effect thereto, Holdings would be in default (or with notice or
lapse of time or both would be in default) under the terms of the Holdings
Agreements.
(d) The closing of any purchase of shares of Class A Stock by the
other member of the Group or Holdings pursuant to Section 5.5(a) shall take
place at the principal office of Holdings within twenty (20) business days
after the giving of notice by the purchaser in accordance with this
Agreement.
5.6 Right to Purchase Stock; Purchase Price; Terms of Purchase.
(a) If prior to June 30, 1994, the active provision of services of
either of the Managers to Holdings or any of its subsidiaries shall be
terminated by reason of such Manager's (x) death or (y) permanent Disability;
or (z) if either of the Managers at any time is convicted of a felony
directly related to the business conduct of Silgan, the member of the Group
not affiliated with such Manager shall have the right to purchase all of the
shares of Common Stock (of any class) then held by such Manager Seller at the
price and upon the terms and conditions set forth in this Section 5.6. If
the other member of the Group determines to purchase less than all the
Manager Seller's shares of Common Stock, Holdings shall have the right to
purchase all such remaining shares of Common Stock at the price and upon the
terms and conditions set forth in this Section 5.6. Within fifty-five (55)
days of the date that the Manager's provision of services ended, the other
member of the Group shall notify the Manager Seller and Holdings of the
number of shares of Common Stock, if any, that it will exercise its right to
purchase. Failure of the other member of the Group to so notify all such
parties shall be deemed a determination by such other member of the Group not
to purchase such shares of Common Stock. If the other member of the Group
determines to purchase less than all the shares of Common Stock held by the
Manager Seller, Holdings shall, within sixty (60) days of the date that such
Manager's provision of services ended, notify the Manager Seller and the
other member of the Group whether it will exercise its right to purchase all
of such remaining shares of Common Stock. Failure of Holdings to so notify
all such parties shall be deemed a determination by Holdings not to purchase
such shares of Common Stock. No shares of Common Stock may be purchased by
the other member of the Group or Holdings, or a combination thereof, pursuant
to this Section 5.6 unless all the Manager Seller's shares of Common Stock
are purchased or unless the Manager Seller consents to the purchase of less
than all such Manager Seller's shares of Common Stock.
(b) All shares of Common Stock purchased by the other member of
the Group or Holdings pursuant to this Section 5.6 shall be purchased at Fair
Market Value in the case of termination pursuant to clauses (x) and (y) of
subsection (a) of this Section 5.6, and Adjusted Book Value in the case of
any event described in clause (z) of subsection (a) of this Section 5.6, and
on terms in accordance with the provisions of Section 5.5(b) hereof;
provided, however, that the aggregate purchase price for all shares of Common
Stock purchased by Holdings pursuant to Section 5.6(a) shall be paid in cash.
"Adjusted Book Value" per Share shall mean (a) the sum of (i) an amount equal
to the total number of shares of Common Stock outstanding on the Closing Date
multiplied by $35 plus (ii) the aggregate exercise prices of all outstanding
stock options and other rights to acquire shares of Common Stock, if any, and
the aggregate conversion prices of all securities convertible into shares of
Common Stock, if any, divided by (b) the sum of (i) the number of shares of
Common Stock then outstanding plus (ii) the number of shares of Common Stock,
if any, issuable upon the exercise of all outstanding stock options and other
rights to acquire shares of Common Stock, if any, and the conversion of all
securities convertible into shares of Common Stock, if any, plus (c) interest
accrued to the date of exercise on such amount since the Closing Date at a
rate of twelve percent (12%) per annum.
ARTICLE VI
CALL OPTION OF HOLDINGS
6.1 First Plaza's Obligation to Sell. At any time prior to the fifth
(5th) anniversary of the Closing Date, Holdings shall have the right and
option from time to time to purchase from First Plaza, and First Plaza shall
have the obligation to sell to Holdings, all (but not less than all) of the
250,000 shares of Class B Stock being purchased by First Plaza pursuant to
the Stock Purchase Agreement (hereinafter referred to as the "Call"), for a
price per share (as such price may be adjusted pursuant to Section 6.3) equal
to the Call Purchase Price and otherwise pursuant to the terms and conditions
of this Article VI. For purposes of this Agreement, the "Call Purchase
Price" shall be a price per share equal to the greater of (i) $120 per share
and (ii) the purchase price necessary to yield on an annual basis a compound
return on investment of forty percent (40%).
6.2 Exercise of Call. Holdings may exercise the Call by delivering an
irrevocable written and dated notice of exercise (the "Notice of Exercise")
to First Plaza indicating Holdings' intention to exercise the Call. Within
thirty (30) days of the date of such Notice of Exercise, Holdings shall pay
the Call Purchase Price to First Plaza, and upon receipt of such payment
First Plaza shall deliver one or more stock certificates representing the
total number of shares subject to the Call, together with one or more duly
executed stock powers attached thereto, all in proper form for transfer. The
Call Purchase Price shall be payable entirely in cash by wire transfer of
immediately available funds.
6.3 Adjustment of Shares and Call Purchase Price. In the event of any
stock dividend, stock split, combination of shares, subdivision or other
recapitalization of the capital stock of Holdings, the number of shares
subject to the Call and the Call Purchase Price payable hereunder shall be
proportionately adjusted to take into account each of any such events.
ARTICLE VII
LIQUIDITY
7.1 Right to Demand an Initial Public Offering of the Common Stock.
(a) At any time after June 15, 1996, the holders of a majority of
the issued and outstanding shares of Class A Stock and Class B Stock
(considered together as a class and being referred to herein as the "Required
Majority") may by written notice to Holdings (an "IPO Notice") require
Holdings to pursue an IPO on the terms and conditions herein provided.
(b) The IPO Notice shall set forth (i) the total number of shares
of Common Stock which such holders propose be included in the IPO, (ii) the
number of shares of Common Stock proposed to be included in the Primary
Tranche (as such term is defined below); (iii) the number of shares of Common
Stock, if any, which such holders desire to offer for sale in the Secondary
Tranche (as such term is defined below) and (v) the name of the investment
banking firm designated by such holders to act as managing underwriter for
the IPO, which investment banking firm shall be Morgan Stanley (or an
Affiliate of Morgan Stanley) or another firm designated by MS Equity
reasonably acceptable to Holdings. The Required Majority shall deliver
copies of the IPO Notice to the other Stockholders promptly upon delivery of
the IPO Notice to Holdings.
(c) The IPO Notice shall be accompanied by a letter (the
"Underwriter's Letter") from a major underwriter of national reputation
(which may be Morgan Stanley or an Affiliate of Morgan Stanley) expressing
its belief that an IPO could be successfully effected at such time at a price
per share not less than the Minimum Price (as defined below).
(d) Upon receipt of the IPO Notice and the Underwriter's Letter,
Holdings shall promptly (i) commence preparation of a registration statement
and (ii) take the actions described in Section 2.7 of the Stockholders
Agreement, dated as of the date hereof, among Silver, Horrigan, MS Equity,
BTNY, First Plaza and Holdings. Holdings and the Stockholders agree to use
their best efforts to effect the IPO on terms and conditions consistent with
the terms of this Section 7.1 as soon as practicable.
(e) Any Stockholder may, within fifteen (15) days following the
receipt by it from the Required Majority of the IPO Notice (the "Request
Notice Period") give a written notice to Holdings specifying the number of
shares of Common Stock which such Stockholder wishes to include in the
Secondary Tranche. Any Stockholder who fails to request inclusion of his or
its Common Stock within the Request Notice Period shall not be permitted to
have any of his or its shares of Common Stock included in the Secondary
Tranche. The parties agree that during a fifteen (15) day period after
delivery of the IPO Notice, Holdings shall have the right to offer to the
other holders of Common Stock the inclusion of their shares of Common Stock
in the Secondary Tranche.
(f) If the managing underwriter determines that, in order to not
adversely affect the marketing of the offering, the number of shares of
Common Stock to be included in the Secondary Tranche should be limited, the
managing underwriter may reduce the number of such shares to be included in
such Secondary Tranche. Such reduction shall be allocated among all
stockholders participating in the Secondary Tranche based upon each such
stockholder's Proportionate Percentage. For purposes of the foregoing,
"Proportionate Percentage" shall mean that percentage figure which expresses
the ratio which (x) the number of shares of Common Stock held by such
stockholder immediately prior to the IPO bears to (y) the aggregate number of
shares of Common Stock which are held by all stockholders participating in
the Secondary Tranche immediately prior to the IPO. Holdings shall advise
all Stockholders participating in such underwriting as to any such limitation
and the number of shares that may be included in the offering. If any
Stockholder disapproves of the terms of any such underwriting, such
Stockholder may elect to withdraw from participation in the IPO by written
notice to Holdings and the managing underwriter.
(g) Notwithstanding the foregoing,
(i) the holders of a majority of the issued and outstanding
shares of Class A Stock may by written notice to Holdings and the
Stockholders require Holdings to suspend pursuing the IPO if, at any
time, such holders are advised by the managing underwriter that the
price to public per share of Common Stock in the IPO is likely to be
less than the Minimum Price; provided, however, that after the passage
of sixty (60) days from the date of receipt of such notice by Holdings,
the Required Majority shall again have the right to require Holdings to
pursue an IPO in accordance with the terms of this Section 7.1; and
(ii) without the consent of the holders of a majority of the
issued and outstanding shares of Class A Stock, Holdings shall not (x)
effect an IPO where the aggregate price to public exceeds the Maximum
Amount (as defined below); or (y) permit the inclusion in the Secondary
Tranche of more than 25% of the number of shares to be sold in the
Primary Tranche.
(h) For purposes of this Section 7.1 and this Agreement the
following terms shall have the meanings provided:
"Primary Tranche" means the portion of the IPO which shall consist
of shares of Common Stock to be sold by Holdings.
"Secondary Tranche" means the portion of the IPO which shall
consist of shares of Common Stock to be sold by the Stockholders and other
stockholders of Holdings.
"Maximum Amount" means in connection with the offering of Common
Stock pursuant to the IPO an aggregate price to public of (i) $100 million
plus (ii) the amount, if any, payable in respect of any Note (as such term is
defined in Section 5.5(b) hereof) outstanding on the date of any IPO Notice
or issued after such date and payable on or before the date of the IPO.
"Minimum Price" means forty-five dollars ($45) per share, as such
price may be adjusted to take into account any stock dividend, stock split,
combination of shares, subdivision or other recapitalization of the capital
stock of Holdings after the date hereof.
7.2 Expenses of Registration. If any shares of Common Stock of the
Stockholders are included in any Secondary Tranche, all Registration Expenses
incurred in connection therewith shall be borne by Holdings. All Selling
Expenses relating to shares of Common Stock registered on behalf of the
Stockholders shall be borne by such Stockholders pro rata based upon the
total number of shares included in the registration or, if such Selling
Expenses are specifically allocable to shares sold by specific Stockholders,
by such Stockholders to the extent related to the sale of such shares.
7.3 Indemnification Relating to Registration.
(a) Holdings will indemnify each Stockholder whose shares of
Common Stock have been registered pursuant to this Article VII, its officers,
directors, general partners or agents and each underwriter, if any, and each
person who controls any such Stockholder or underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and any
named fiduciary acting for First Plaza and the advisors acting for the named
fiduciary in connection with this Agreement and the respective directors,
officers, trustees and employees of the foregoing persons, against any and
all losses, claims, damages, liabilities or expenses (including any of the
foregoing incurred in settlement or investigation of any litigation,
commenced or threatened or in connection with enforcement of rights under
this Article VII) ("Damages"), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement or prospectus (including a preliminary prospectus), or
any amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances in which
they were made, not misleading, or any violation by Holdings of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to Holdings in connection with any such registration; provided,
however, that Holdings will not be liable in any such case to the extent that
any Damages arise out of or are based on any untrue statement or omission or
alleged untrue statement or omission, made in reliance upon and in conformity
with written information furnished to Holdings by such Stockholder or
underwriter for use therein. Holdings will reimburse each indemnitee under
this Section 7.3(a) for any legal and other expenses reasonably incurred, as
such expenses are incurred, in connection with investigating, preparing or
defending any such Damages.
(b) Each Stockholder will severally and not jointly, if shares of
Common Stock held by such Stockholder are included in the securities as to
which such registration is being effected pursuant to this Article VII,
indemnify Holdings, each of its directors and officers, each other
Stockholder, each underwriter, if any, of Holdings' securities covered by
such a registration statement, each Person who controls Holdings, any other
Stockholder or such underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each other such
Stockholder and any named fiduciary acting for First Plaza and the advisors
acting for the named fiduciary in connection with this Agreement and the
respective directors, officers, trustees and employees of the foregoing
persons against any and all Damages arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
such registration statement or prospectus, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and will reimburse Holdings, such
Stockholders, underwriters, control persons and any named fiduciary acting
for First Plaza and the advisors acting for the named fiduciary in connection
with this Agreement and the respective directors, officers, trustees and
employees of the foregoing persons for any legal or any other expenses
reasonably incurred, as such expenses are incurred, in connection with
investigating or defending any such Damages, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement or
prospectus in reliance upon and in conformity with written information
furnished to Holdings by such Stockholder specifically for use therein.
Notwithstanding the foregoing, the liability of each Stockholder under this
subsection (b) of Section 7.3 shall be limited to an amount equal to the net
proceeds received by such Stockholder from the sale of shares of Common Stock
pursuant to Section 7.1 hereof.
(c) Each party entitled to indemnification under this Section 7.3
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and the Indemnifying Party shall assume the defense of any such claim or any
litigation resulting therefrom and the payment of all related fees and
expenses; provided, however, that counsel for the Indemnifying Party who
shall conduct the defense of such claim or litigation shall be approved by
the Indemnified Party (which approval shall not be unreasonably withheld).
In any such proceeding, an Indemnified Party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be borne by
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties)
include both the Indemnified Party and the Indemnifying Party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them; provided, however,
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of an unconditional release from all liability in respect
of such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required
in connection with the defense of such claim and the litigation resulting
therefrom.
7.4 Contribution Relating to Registration.
(a) If the indemnification provided for in Section 7.3 hereof is
unavailable to the Indemnified Parties in respect of any Damages, then each
such Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Damages. As between Holdings on the one hand and each
Stockholder with respect to which registration has been effected pursuant to
this Article VII on the other, such contribution shall be in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and the Indemnified Party on the other in connection with the
statement or omission which resulted in such Damages, as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue statement (or alleged
untrue statement) of a material fact or the omission (or alleged omission) to
state a material fact relates to information supplied by the Indemnifying
Party or the Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Holdings and each Stockholder agree that it would not be just and
equitable if contribution pursuant to this Section 7.4 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above. The amount paid
or payable by an Indemnified Party as a result of the Damages referred to
above in this Section 7.4 shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim.
(b) Notwithstanding anything to the contrary contained herein, the
obligation of each Stockholder to contribute pursuant to this Section 7.4 is
several and not joint and no selling Stockholder shall be required to
contribute any amount in excess of the amount by which the net proceeds
received by such Stockholder from the sale of shares of Common Stock in a
public offering exceeds the amount of any damages which such selling
Stockholder has otherwise been required to pay by reason of such untrue
statement (or alleged untrue statement) or omission (or alleged omission).
The selling Stockholders' obligations to contribute pursuant to this Section
7.4 are several in the proportion that the proceeds of the offering received
by such selling Stockholder bears to the total proceeds of the offering
received by all the selling Stockholders unless it is determined that, based
upon the relative fault of the several Selling Stockholders, it would be
equitable to otherwise allocate such obligations.
(c) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement shall terminate upon the earlier of:
(a) the termination of the Purchase Agreement dated as of
September 3, 1993 between Containers and Del Monte Corporation, as amended by
the Amendment to Purchase Agreement dated as of December 10, 1993, in
accordance with the terms of Article XVI thereof;
(b) upon mutual agreement of all the Investors (excluding any
Investors which are no longer Stockholders);
(c) such time as (i) it becomes unlawful for an Initial Investor,
Holdings or First Plaza to comply with the terms of this Agreement, or (ii)
it shall become unlawful or impossible for Holdings to conduct, or an Initial
Stockholder to be affiliated with Holdings in the conduct of, its business
substantially in the manner contemplated by this Agreement and the Amended
Management Contract;
(d) the completion of an IPO; and
(e) June 30, 1999.
8.2 Extension. Within two months prior to expiration of this Agreement
pursuant to Section 8.1(e), the parties hereto may, by written agreement,
extend the duration hereof for an additional period which shall terminate
upon the earlier of any of the events set forth in Section 8.1(b), (c), (d)
or ten years from the expiration date then in effect, in which case this
Agreement, as extended, shall be binding on the parties hereto.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification.
(a) Each of MS Equity, Silver, Horrigan, BTNY and First Plaza (for
purposes of this subparagraph (a), a "Section A Indemnifying Person" and, for
purposes of subparagraph (d) below, an "Indemnifying Person") hereby agrees
and covenants, in addition to any other liability it may have to an
Indemnified Person (defined below), at law or in equity, to hold harmless and
indemnify each Indemnified Person from and against any actual loss, expense
or liability whatsoever, joint or several (including but not limited to, any
and all expenses reasonably incurred in investigating, preparing or defending
any litigation or proceeding, commenced or threatened, or any other claim
whatsoever), as and when incurred arising out of or based upon a breach of
this Agreement, including the representations and warranties set forth
herein, by such Section A Indemnifying Person.
(b) Holdings (for purposes of this subparagraph, the "Section B
Indemnifying Person" and, for purposes of subparagraph (d) below, an
"Indemnifying Person") hereby agrees and covenants, in addition to any other
liability it may have to an Indemnified Person, at law or in equity, to hold
harmless and indemnify each Indemnified Person from and against any actual
loss, expense or liability whatsoever, joint or several (including but not
limited to, any and all expenses reasonably incurred in investigating,
preparing or defending any litigation or proceeding, commenced or threatened,
or any other claim whatsoever), as and when incurred by the Indemnified
Person, arising out of, based upon or in connection with any matter related
to (i) the conduct and operation of the business of Holdings, (ii) any action
or failure to act by Holdings, or (iii) any matter as to which such
Indemnified Person is entitled to indemnity pursuant to subparagraph (a)
above; provided, however, that no Indemnified Person shall be entitled to
indemnity under this paragraph for any matter as to which such Indemnified
Person is or would be a Section A Indemnifying Person. Nothing contained in
this paragraph shall limit or otherwise affect the rights or obligations of
any party hereto pursuant to paragraph (a) above.
(c) "Indemnified Person" for purposes of this Section shall mean
each of MS Equity, Silver, Horrigan, BTNY, First Plaza and Holdings and any
Affiliates and Associates (which, for purposes of this Section, shall be
deemed to include any director, officer, partner or controlling Person) of
any Person or entity which would itself be an Indemnified Person, including
Morgan Stanley.
(d) If a claim is made against any Indemnified Person as to which
such Indemnified Person may seek indemnity against any Indemnifying Person
under this Article IX, such Indemnified Person shall notify each Indemnifying
Person promptly after any written assertion of such claim threatening to
institute an action or proceeding with respect thereto and shall notify each
Indemnifying Person promptly of any action commenced against such Indemnified
Person within a reasonable time after such Indemnified Person shall have been
served with a summons or other first legal process giving information as to
the nature and basis of the claim. Failure so to notify the Indemnifying
Person shall not, however, relieve any Indemnifying Person from any liability
which it may have on account of the indemnity under this Article IX unless
the Indemnifying Person shall sustain the burden of proving that it has been
prejudiced in any material respect by such failure. Each Indemnifying Person
shall be entitled to participate at its own expense in the defense of any
such litigation or proceeding and, if it so elects, to assume the defense
thereof, and in the latter event such defense shall be conducted by counsel
chosen by the Indemnifying Person and reasonably satisfactory to the
Indemnified Person, and the Indemnified Person shall bear the fees and
expenses of any additional counsel retained by it and incurred by such
Indemnified Person after notice from the Indemnifying Person to such
Indemnified Person of its election to assume the defense thereof; but if the
Indemnifying Person shall not elect to assume the defense of any such
litigation or proceeding, the Indemnifying Person will reimburse such
Indemnified Person for the reasonable fees and expenses of counsel retained
by such Indemnified Person, which counsel shall be reasonably satisfactory to
the Indemnifying Person. Notwithstanding the foregoing, if the defendants in
any such litigation or proceeding (i) include one or more of the Indemnified
Persons, but not the Indemnifying Person, or (ii) include both the
Indemnifying Person and one or more Indemnified Persons and either (a) the
Indemnified Person or Persons and the Indemnifying Person mutually agree, or
(b) representation of both the Indemnifying Person and the Indemnified Person
or Persons by the same counsel is inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between
them, then the Indemnifying Person shall not have the right to assume the
defense of such litigation or proceeding with respect to the Indemnified
Person or Persons and will reimburse the Indemnified Person or Persons for
the reasonable fees and expenses of counsel retained by it or them and
reasonably satisfactory to the Indemnifying Person. It is understood that
the Indemnifying Person shall not, in connection with any litigation or
proceeding or related litigation or proceedings in the same jurisdiction, be
liable under this Agreement for the fees and expenses of more than one
separate firm for all such Indemnified Persons. No Indemnifying Person shall
be liable for any settlement of any litigation or proceeding effected without
the written consent of such Indemnifying Person, which consent shall not be
unreasonably withheld, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees, subject to
the provisions of this Article IX, to indemnify the Indemnified Person from
and against any loss, damage, liability or expense by reason of such
settlement or judgment.
ARTICLE X
REPORTS AND ACCESS TO INFORMATION
10.1 Books and Records. Holdings shall at all times keep at its
principal office true and correct books and accounts pertaining to all
operations reflecting, in accordance with generally accepted accounting
principles, all receipts and expenditures of Holdings and all other data
necessary and proper to keep the Investors informed of the financial state of
Holdings. Upon request, the Investors shall be furnished with copies of any
financial records of Holdings, in addition to those financial statements of
Holdings which will be furnished pursuant to Section 10.2 hereof.
10.2 Financial Statements. As soon as practicable after the end of
each of its fiscal years, Holdings shall cause to be prepared and furnished
to the Stockholders, an audited consolidated balance sheet and profit and
loss statement of Holdings and its subsidiaries, and an audited statement of
changes in financial position as at the end of and for such fiscal year,
prepared in accordance with generally accepted accounting principles
consistently maintained by Holdings and certified by Holdings' independent
public accountants. Holdings shall also prepare and furnish to the
Stockholders, as soon as practicable following the end of the first, second
and third quarterly accounting periods, an unaudited consolidated balance
sheet and profit and loss statement of Holdings and its subsidiaries, and an
unaudited statement of changes in financial position as at the end of and for
such quarterly accounting period, prepared in accordance with generally
accepted accounting principles consistently maintained by Holdings.
10.3 Access to Information. Employees and agents of each of the
Investors shall have access to the plants and properties of Holdings and its
subsidiaries for the purpose of inspecting such plants and properties and the
operations thereon from time to time during the regular business hours of
such facilities. The books and records of Holdings and each of its
subsidiaries shall be available for inspection and review by employees and
agents of each of the Investors from time to time during Holdings' and its
subsidiaries' regular working hours. The costs and expenses incurred in
connection with any such inspections or reviews shall be borne by the party
making such inspection or review.
10.4 Fiscal Year. The fiscal year of Holdings shall be the calendar
year.
ARTICLE XI
CERTAIN OTHER AGREEMENTS
11.1 Certain Agreement Relating to Approval of Post-IPO Charter, By-
Laws and Management Services Contract. Each of the Stockholders hereby
agrees to take all action (including voting its shares of Common Stock) to
approve the adoption of a Restated Certificate of Incorporation, as amended,
substantially in the form of Exhibit A hereto (with Article SEVENTH thereof
appropriately completed) (the "Post-IPO Charter"), an Amended and Restated
By-Laws, substantially in the form of Exhibit B hereto (the "Post-IPO By-
Laws"), and an Amended and Restated Management Services Agreement,
substantially in the form of Exhibit C hereto (the "Post-IPO Management
Services Contract"), in each case to become effective at the time an IPO is
completed.
11.2 Restriction on Voting by MS Equity. MS Equity hereby agrees that
it will not vote its shares of Class B Stock in favor of any changes in the
Certificate of Incorporation or By-laws of Holdings which would adversely
affect the rights of First Plaza, unless First Plaza has consented in writing
to such change.
11.3 Certain Agreement Relating to Nomination of and Voting for One
Class B Director. So long as First Plaza shall hold not less than 18.73% of
the issued and outstanding shares of Class B Stock, First Plaza shall have
the right to nominate one of the Class B Directors (as defined in Article
SEVENTH of the Certificate of Incorporation) to be elected at each annual
meeting of stockholders in accordance with the provisions of Article SEVENTH
of the Certificate of Incorporation, and the holders of Class B Stock parties
to this Agreement agree to vote their shares of Class B Stock in favor of
such nominee.
11.4 Voting Agreement for Certain Purchasers of Class A Stock. In the
event that First Plaza, MS Equity or BTNY shall purchase any shares of Class
A Stock, such purchaser hereby agrees that it shall vote such shares in
accordance with the directions of the holders of a majority of the shares of
Class A Stock held by the Group until such time as a Change of Control (as
defined in Article Tenth of the Certificate of Incorporation) has occurred.
For purposes of this Section 11.4, the term "holders of a majority of the
shares of Class A Stock held by the Group" shall mean the holders of a
majority of the aggregate of 417,500 shares of Class A Stock held by Messrs.
Silver and Horrigan at the Closing Date (the "Original Holding") which at the
time of any such determination have been continuously and are held by the
Group. No shares of Class A Stock which are acquired by any member of the
Group (other than shares of the Original Holding) shall be counted for
purposes of making such determination.
11.5 Voting Agreement for Certain Purchasers of Class B Stock. In the
event that Silver or Horrigan shall purchase any shares of Class B Stock,
such purchaser hereby agrees that it shall vote such shares in accordance
with the directions of MS Equity, unless MS Equity and First Plaza (together
with their respective Affiliates) shall hold directly or indirectly less than
one-half of the aggregate number of shares of Class B Stock held by MS Equity
and First Plaza immediately following the closing under the Stock Purchase
Agreement.
ARTICLE XII
MISCELLANEOUS
12.1 Certain Agreement Relating to Conversion Rights.
(a) Each of the Stockholders hereby agrees to take all action
(including voting its shares of Common Stock) necessary to approve any
increase in the number of authorized shares of Class A Stock, Class B Stock
and Class C Stock in order to enable any Regulated Stockholder (as defined in
the Certificate of Incorporation) to convert, concurrently with the purchase
thereof, any and all of its shares of Class A Stock or Class B Stock into
shares of Class C Stock to the extent provided in the Certificate of
incorporation and to convert any and all of its shares of Class C Stock into
shares of Class A Stock or Class B Stock to the extent provided in the
Certificate of Incorporation.
(b) Each of the Stockholders hereby agrees to take all action
(including voting its shares of Common Stock to amend the Certificate of
Incorporation or otherwise) (i) to permit the conversion of any shares of
Class C Stock held by BTNY into shares of Class B Stock in connection with
the sale by BTNY of any of its shares of Class C Stock pursuant to Section
5.4(a) or (e) hereof and (ii) to give BTNY the right to convert its Class C
Stock to Class B Stock in the event of the termination of this Agreement
pursuant to any of clauses (b), (c) or (e) of Section 8.1 hereof.
12.2 Appointment of Agent. Each of the Group, MS Equity, BTNY and
First Plaza appoints that Person or those Persons which may from time to time
be identified by notice to the parties as its duly authorized agent and
attorney-in-fact to perform any act, give any notice, execute any agreement,
give any approval or consent or exercise any discretion contemplated herein
to be performed, executed, agreed, or exercised by such Stockholder, and any
other Stockholder may rely upon any instrument signed by such agent and
attorney. Each such Stockholder may change any of such agents and attorneys
at any time by the giving of notice to such effect to the parties hereto in
the manner provided in Section 12.3 hereof.
12.3 Notices. Any notice or request specifically provided for or
permitted to be given under this Agreement must be in writing, but may be
served by depositing same in the mail, addressed to the party to be notified,
postage prepaid, and registered or certified, with a return receipt
requested. Notice given by registered mail or certified mail shall be deemed
delivered and effective on the date of delivery as shown on the return
receipt. Notice may be served in any other manner, including telex,
telecopy, telegram, but shall be deemed delivered and effective as of the
time of actual delivery thereof to the addressee. For purposes of notice the
addresses of the Investors and of Holdings shall be as follows:
If to Silver:
c/o Silgan Holdings Inc.
4 Landmark Square, Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
Telecopy No.: (203) 975-7902
If to Horrigan:
c/o Silgan Holdings Inc.
4 Landmark Square, Suite 301
Stamford, CT 06901
Attention: D. Greg Horrigan
Telecopy No.: (203) 975-7902
If to Holdings:
Silgan Holdings Inc.
4 Landmark Square, Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
Telecopy No.: (203) 975-7902
If to MS Equity:
The Morgan Stanley Leveraged
Equity Fund II, L.P.
Morgan Stanley Leveraged Equity Fund II, Inc.,
General Partner
1251 Avenue of the Americas
New York, NY 10020
Attention: Robert H. Niehaus
Telecopy No.: (212) 703-6503
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: John R. Ettinger, Esq.
Telecopy No.: (212) 450-4800
If to BTNY:
Bankers Trust New York Corporation
130 Liberty Street
New York, NY 10006
Attention: Joseph T. Wood
Telecopy No.: (212) 250-7651
With a copy to:
White & Case
1155 Avenue of the Americas
New York, NY 10036
Attention: Eric L. Berg, Esq.
Telecopy No.: (212) 354-8113
If to First Plaza:
General Motors Investment Management
Corporation
767 Fifth Avenue
New York, NY 10153
Attention: James K. Kelliher
Telecopy No.: (212) 418-3651
with a copy to:
Kirkland & Ellis
55 East 52nd Street
New York, NY 10055
Attention: Frederick Tanne, Esq.
Telecopy No.: (212) 838-4223
If a notice is sent to any of the above, a copy shall be sent to:
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
P. O. Box 6760
Stamford, CT 06904-6760
Attention: Frode Jensen, III, Esq.
Telecopy No.: (203) 965-8226
Each party may change its address and that of its representative for
notice by the giving of notice thereof in the manner hereinabove provided.
12.4 Amendment. This Agreement shall not be amended, modified or
revoked except by written instrument executed together or in counterparts by
the parties hereto.
12.5 Waiver. The failure of a party to insist upon strict performance
of any provision hereof shall not constitute a waiver of, or estoppel against
asserting, the right to require such performance in the future, nor shall a
waiver or estoppel with respect to a later breach of a similar nature or
otherwise.
12.6 Curative Actions; Severability.
(a) In the event that any of the covenants, terms or conditions of
this Agreement are held illegal by any court or administrative body of
competent jurisdiction and in the further event that any director or
stockholder action, including, but not limited to, the execution of any
documents or instruments, such as an amendment of the Certificate of
Incorporation, will make such covenants, terms or conditions valid and
enforceable, each of the parties hereby agrees that it shall take such action
as may reasonably be required to make any such covenant, term or condition
valid and enforceable. In the event that any of the parties hereto refuses
to take such action, the remaining Stockholders who are parties hereto are
hereby jointly and severally appointed as the attorney-in-fact for the other
Stockholders for the purpose of taking any action that is authorized by the
terms of this paragraph, including, but not limited to:
(i) the voting of the other Stockholder's shares of capital stock;
(ii) the removal of the Stockholder or its appointee(s) in breach
of this Section as directors and/or officers; and
(iii) the nomination and election of one or more directors and/or
officers for the purpose of initiating and completing such action as may
be required to implement any agreement of the parties set forth in this
Agreement or to make any illegal or unenforceable covenant, term or
condition of this Agreement valid and enforceable.
(b) If any provision of this Agreement is held invalid, such
invalidity shall not affect the other provisions hereof which can be given
effect without the invalid provision, and to this end the provisions of this
Agreement are intended to be and shall be deemed severable; provided,
however, that if the provision or provisions so held to be invalid, in the
reasonable judgment of the parties hereto, is or are so fundamental to the
intent of the parties hereto and the operation of this Agreement that the
enforcement of the other provisions hereof, in the absence of such invalid
provision or provisions, would damage irreparably the intent of the parties
in entering into this Agreement, the parties hereto shall agree (i) to
terminate this Agreement pursuant to Section 8.1 hereof, or (ii) to amend or
otherwise modify this Agreement so as to carry out the intent and purposes
hereof and the transactions contemplated hereby.
12.7 Action of a Stockholder. Subject to any other agreement which a
transferor or transferee may make in the event of a Transfer permitted by the
terms of this Agreement and notice of which agreement is given to Holdings,
at any time that a Stockholder as defined herein includes more than one
Person, any action of a Stockholder hereunder shall be authorized by the
approval of a majority in interest of such parties.
12.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware without regard
to its provisions concerning conflicts of law.
12.9 Construction. The headings in this Agreement are inserted for
convenience and identification only and are not intended to describe,
interpret, define or limit the scope, extent, or intent of this Agreement or
any provision hereof. Whenever the context requires, the gender of all words
used in this Agreement shall include the masculine, feminine, and neuter, and
the number of all words shall include the singular and the plural.
12.10 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all of the parties had signed the
same document. All counterparts shall be construed together and shall
constitute one and the same instrument.
12.11 Successors and Assigns. Except as provided to the contrary
hereinabove, this Agreement shall apply to, and shall be binding upon the
Stockholders and Holdings, their respective successors and assigns, and all
Persons claiming by, through, or under any of the aforesaid Persons.
12.12 Cumulative Rights. The rights and remedies provided by this
Agreement are cumulative, and the use of any right or remedy by any party
shall not preclude or waive its right to use any or all other remedies.
12.13 Further Assurances. Each party agrees (i) to vote its Shares of
Holdings; and (ii) to execute (and acknowledge, if requested) and deliver
such additional documents and instruments and (iii) to perform such
additional acts as may be necessary or appropriate, in order to effectuate,
carry out, and perform all of the terms, provisions, conditions and purposes
of this Agreement and all the transactions contemplated by this Agreement.
12.14 Specific Performance. Each of the parties acknowledge that the
other parties would not have an adequate remedy at law for money damage in
the event that any of the covenants or agreements of any other party set
forth in Articles IV, V and IX in this Agreement were not performed in
accordance with its terms and therefore agrees that the affected party shall
be entitled to injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
12.15 Compliance with Applicable Laws. Each party shall comply with
all laws and regulations applicable to the subject matter of this Agreement.
12.16 Accuracy of Information. Each Stockholder shall furnish to any
other Stockholder all information regarding such Stockholder required by law
for inclusion in documents to be prepared or filed in connection with their
respective stockholdings in Holdings, and all such information will be true
and correct in all material respects and will not omit to state any material
fact necessary to be stated therein in order that such information not be
misleading.
12.17 Disclosure. No Stockholder shall make disclosure or any public
announcement of this Agreement or the subject matter hereof, unless (a)
consented to by MS Equity and the Group, or (b) required by law, regulation
or judicial process.
12.18 Survival of Certain Terms. The provisions of Sections 4.5, 7.3,
7.4 and 12.1(b) and Article IX of this Agreement shall survive any
termination of this Agreement.
12.19 No Third Party Beneficiaries. Nothing in this Agreement
(including the Exhibits hereto) is intended to confer upon any Person not a
party hereto or an Affiliate or an Associate of a party hereto any rights or
remedies hereunder.
12.20 Effectiveness; Entire Agreement. The Existing Organization
Agreement shall continue to be effective for the period of time from June 30,
1989, the date of its effectiveness, until the consummation of the closing of
the purchase of shares of Class B Stock by First Plaza pursuant to the Stock
Purchase Agreement; provided, however, that the provisions of Article VII of
the Existing Organization Agreement shall survive such termination of the
Existing Organization Agreement and further provided that if this Agreement
shall terminate pursuant to Section 8.1(a) hereof, the Existing Organization
Agreement shall be reinstated and in full force and effect as of the time of
effectiveness hereof and this Agreement shall be deemed null and void ab
initio. This Agreement shall become effective upon the consummation of such
closing. This Agreement and the Exhibits and Schedules hereto, which
incorporate all prior understandings relating to the subject matter hereof,
sets forth the entire agreement of the Stockholders and Holdings from and
after the consummation of such closing with respect to the matters set forth
herein.
12.21 ERISA Limitation. Notwithstanding any other provision of this
Agreement, First Plaza and its Affiliates shall not be required to sell any
shares of Common Stock to any Person if doing so would constitute a non-
exempt prohibited transaction under Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); provided that the foregoing
clause shall apply to a sale to Holdings only if Holdings shall be a Party in
Interest (as defined in Section 3(14) of ERISA, or any successor provision)
with respect to First Plaza as a result of another Party in Interest's
ownership of the stock of Holdings. First Plaza shall use its reasonable
best efforts to obtain an exemption under ERISA to permit any sale of Common
Stock held by it referred to in the previous sentence that would otherwise
constitute such a non-exempt prohibited transaction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day first above written.
/s/ R. Philip Silver
---------------------------------
Name: R. Philip Silver
/s/ D. Greg Horrigan
---------------------------------
Name: D. Greg Horrigan
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.
By: Morgan Stanley Leveraged Equity
Fund II, Inc. (General Partner)
By: /s/ Robert H. Niehaus
------------------------------
Name: Robert H. Niehaus
Title: Director
BANKERS TRUST NEW YORK CORPORATION
By: /s/ Joseph T. Wood
------------------------------
Name: Joseph T. Wood
Title: Senior Vice President
FIRST PLAZA GROUP TRUST
By: Mellon Bank, N.A., Trustee (as directed by
General Motors Investment Management
Corporation)
By: /s/ Judith A. Manion
------------------------------
Name: Judith A. Manion
Title: Paralegal
SILGAN HOLDINGS INC.
By: /s/ R. Philip Silver
------------------------------
Name: R. Philip Silver
Title: President
Exhibit 3
_________________________________________________
STOCKHOLDERS AGREEMENT
DATED AS OF DECEMBER 21, 1993
AMONG
R. PHILIP SILVER
D. GREG HORRIGAN
THE MORGAN STANLEY LEVERAGED EQUITY FUND II, L.P.
BANKERS TRUST NEW YORK CORPORATION
FIRST PLAZA GROUP TRUST
AND
SILGAN HOLDINGS INC.
_________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . 7
2.1 Right of Certain Investors to Demand Registration . . . . . . . 7
2.2 Obligation of the Company to Register Common Stock Pursuant to
Demand Registration . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Piggyback Registration Rights . . . . . . . . . . . . . . . . 10
2.4 Underwriter's Cut-back . . . . . . . . . . . . . . . . . . . 12
2.5 Waiting Period for Demand Registrations . . . . . . . . . . . 13
2.6 Expenses of Registration . . . . . . . . . . . . . . . . . . 13
2.7 Registration Procedures . . . . . . . . . . . . . . . . . . . 14
2.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 21
2.9 Contribution . . . . . . . . . . . . . . . . . . . . . . . . 25
2.10 Exchange Act Registration . . . . . . . . . . . . . . . . . . 27
2.11 Transfer or Assignment of Registration Rights . . . . . . . . 29
ARTICLE III
CERTAIN RESTRICTIONS ON TRANSFER OF SHARES . . . . . . . . . . . . 30
3.1 Limitations on Transfer . . . . . . . . . . . . . . . . . . . 30
3.2 Transfers to Affiliates . . . . . . . . . . . . . . . . . . . 32
3.3 MSLEF Distribution; Pledges . . . . . . . . . . . . . . . . . 32
3.4 Rights of First Refusal . . . . . . . . . . . . . . . . . . . 33
3.5 Effect of Void Transfers . . . . . . . . . . . . . . . . . . 38
3.6 ERISA Limitation . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IV VOTING . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.1 Election of Certain Directors . . . . . . . . . . . . . . . . 39
4.2 Mergers and Sales . . . . . . . . . . . . . . . . . . . . . . 41
4.3 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE V MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . 43
5.1 Due Authorization . . . . . . . . . . . . . . . . . . . . . . 43
5.2 Agreement Binding; Transfers . . . . . . . . . . . . . . . . 43
5.3 Surviving Corporation . . . . . . . . . . . . . . . . . . . . 44
5.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.5 Equitable Relief for Breach of Agreement . . . . . . . . . . 47
5.6 Entire Agreement; Amendments . . . . . . . . . . . . . . . . 48
5.7 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.9 Unenforceable Provisions . . . . . . . . . . . . . . . . . . 48
5.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 48
5.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 49
5.12 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . 49
STOCKHOLDERS AGREEMENT
This Stockholders Agreement made and entered into as of the 21st
day of December, 1993, by and among R. PHILIP SILVER ("Silver"), D. GREG
HORRIGAN ("Horrigan"), THE MORGAN STANLEY LEVERAGED EQUITY FUND II, L.P., a
Delaware limited partnership ("MS Equity"), BANKERS TRUST NEW YORK
CORPORATION, a New York corporation ("BTNY"), FIRST PLAZA GROUP TRUST, a
group trust established under the laws of the State of New York ("First
Plaza"), and SILGAN HOLDINGS INC., a Delaware corporation (the "Company").
Capitalized terms used in this Agreement shall have the meanings ascribed to
them in Article I hereof or in any other Section.
W I T N E S S E T H:
WHEREAS, simultaneously herewith, the Company and the Investors are
entering into an Amended and Restated Organization Agreement (the
"Organization Agreement") concerning the terms governing the relationship
among the Investors and between the Investors and the Company for the term
thereof; and
WHEREAS, the Company and the Investors, believing it to be in their
respective best interests, desire to provide further for certain registration
and other rights and obligations of the Company and the Investors, and
certain additional prospective rights and obligations of the Company and the
Investors, all to take effect upon the occurrence of the Initial Public
Offering.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows.
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings set forth below:
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement and, with respect to First Plaza, such
terms shall include any successor or underlying trust.
"Class A Stock" shall mean the Class A common stock, par value $.01
per share, of the Company.
"Class B Stock" shall mean the Class B common stock, par value $.01
per share, of the Company.
"Class C Stock" shall mean the Class C common stock, par value $.01
per share, of the Company.
"Closing Date" shall mean the closing date for the purchase by
Silgan Containers Corporation of certain assets of Del Monte Corporation,
pursuant to the terms of the Purchase Agreement relating thereto.
"Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"Common Stock" shall mean shares of the Company's common stock,
including any shares of common stock resulting from the conversion of the
Company's Class A Stock, Class B Stock and Class C Stock.
"Estate" shall mean any and all assets left by a decedent and any
executor, administrator or legal representative charged with the
administration of such assets.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute and the rules and regulations of
the Commission thereunder, all as the same shall be amended from time to
time.
"Family Transferees" shall mean the spouse, children or
grandchildren of, or any trust for the benefit of the spouse, children or
grandchildren of, Silver or Horrigan.
"Group" shall mean, collectively, Silver and Horrigan and their
respective Affiliates and related Family Transferees and Estates (Silver and
his Affiliates, Family Transferees and Estate deemed to be collectively one
member of the Group and Horrigan and his Affiliates, Family Transferees and
Estate deemed to be collectively one member of the Group).
"Initial Public Offering" shall mean the consummation of the first
Public Offering.
"Investment Entity" shall mean any Person who is primarily engaged
in the business of investing in securities of other companies and not taking
an active role in the management or operations of such companies and shall
include MS Equity, First Plaza (and any successor or underlying trust of
First Plaza) and BTNY.
"Investment Entity Sale" shall mean the sale or Transfer of shares
of Common Stock to an Investment Entity.
"Liquidating Distribution" shall mean a Transfer of shares of
Common Stock held by MS Equity to its partners pursuant to a liquidating
distribution of such shares.
"Investors" shall mean Silver, Horrigan, BTNY, MS Equity and First
Plaza.
"MSLEF Distribution" means a distribution by MS Equity of all or
substantially all of the shares of Common Stock then owned by MS Equity to
the partners of MS Equity.
"Person" shall mean an individual, a corporation, a partnership, a
joint venture, a trust or unincorporated organization, a joint stock company
or other similar organization or any other legal entity.
"Public Offering" shall mean any underwritten public offering of
shares of Common Stock pursuant to an effective registration statement under
the Securities Act.
"Permitted Private Transfer" shall have the meaning provided in
Section 3.1(b) hereof.
"Register" and the terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement
by the Commission.
"Registrable Securities" shall mean the Common Stock subject to
registration under Sections 2.1 and 2.3 hereof.
"Registration Expenses" shall mean (i) all registration and filing
fees, (ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel) in connection with
blue sky qualifications of the Registrable Securities, (iii) printing
expenses, (iv) internal expenses of the Company and its subsidiaries, (v) the
fees and expenses incurred in connection with the listing of the Registrable
Securities on an exchange, (vi) the fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter pursuant to Section 2.7(a)(vi) hereof), (vii)
reasonable fees and expenses of one counsel for the Selling Stockholders and
(viii) any other fees and expenses of any registration and related offering
of securities under this Agreement which are not Selling Expenses.
"Restricted Transferor" shall have the meaning provided in Section
3.1 hereof.
"Restricted Voting Transferee" shall have the meaning provided in
Section 4.3 hereof.
"Rule 144 Open Market Transaction" shall mean any sale of shares of
Common Stock in a transaction under Rule 144 of the Securities Act (or any
successor rule) if such sale is in compliance with the requirements of such
Rule.
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any successor federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be amended from time to time.
"Selling Expenses" shall mean all underwriting discount, selling
commissions and stock transfer taxes applicable to the securities registered
by the Investors and all fees and disbursements of counsel for any Investor
(other than fees and disbursements of one counsel designated by the Selling
Stockholders).
"Selling Stockholder" means an Investor that elects to sell shares
of Common Stock pursuant to Section 2.1 or 2.3 or an assignee or transferee
of any such Investor pursuant to Section 2.11 that elects to sell shares of
Common Stock pursuant to Section 2.1 or 2.3.
"Stock Purchase Agreement" shall mean the agreement, dated as of
the date hereof, between the Company and First Plaza, concerning the purchase
by First Plaza of 250,000 shares of Class B Stock.
"Stockholder" shall mean each of the Investors and any other Person
who at the time holds shares of Common Stock. "Third Party
Sale" shall mean the sale or Transfer by MS Equity or either member of the
Group of such Stockholder's shares of Common Stock other than to an Affiliate
of such Person, or such Person's Estate or to a Trust all the beneficiaries
of which are Family Transferees, or an Estate or Trust of such Person or to a
Family Transferee.
"Transfer" shall mean to sell, assign, transfer, exchange,
mortgage, pledge or grant a security interest in, or otherwise dispose of or
encumber an interest in, shares of Common Stock or, as a noun, any such sale,
assignment, transfer, exchange, mortgage, pledge, grant, disposition or
encumbrance.
ARTICLE II
REGISTRATION RIGHTS
2.1 Right of Certain Investors to Demand Registration.
(a) For a period of eight (8) years after the Initial Public
Offering, each of MS Equity and First Plaza shall have the right to demand
two separate registrations (each a "Demand Registration") of its shares of
Common Stock (equalling a total of four separate Demand Registrations),
subject to the provisions of Section 2.4; provided, however, that this demand
right will terminate as to MS Equity or First Plaza, as the case may be, at
such time as MS Equity or First Plaza, as the case may be, together with its
Affiliates, owns less than five percent (5%) of the issued and outstanding
shares of Common Stock at any time. Any request for a Demand Registration
shall be in writing and will specify the aggregate number of shares of Common
Stock to be sold and the book-running managing underwriter for the proposed
public sale, which will be Morgan Stanley & Co. Incorporated, one of its
Affiliates or an underwriter reasonably acceptable to the Company.
(b) If the Company causes a shelf registration to become
effective, MS Equity and First Plaza each shall have the right to sell its
shares of Common Stock pursuant to such shelf registration; provided,
however, that if the Company shall furnish to each of MS Equity and First
Plaza that elects to exercise such right a certificate signed by an officer
of the Company stating that the Board of Directors of the Company has
determined (which determination shall be made in good faith in the sole
discretion of the Board of Directors) that the shelf registration statement
should not remain effective as to the shares of Common Stock of the Investors
because the offering of Common Stock contemplated by the registration would
be significantly disadvantageous to the Company, then the Company may, prior
to any sale thereunder, direct that such registration with respect to such
shares be withdrawn for such period of time as the basis for the Board of
Directors' judgment continues to exist and provided, further, that at no time
shall the terms of this Section 2.1 require the Company to effect any such
shelf registration.
2.2 Obligation of the Company to Register Common Stock Pursuant to
Demand Registration.
(a) The Company shall, as soon as practicable following the
receipt of a written request for a Demand Registration, use its best efforts
to effect such registration and to facilitate the sale and distribution of
all or such portion of such shares of Common Stock as are permitted to be
registered pursuant to the terms of this Agreement. Subject to the
provisions of this Agreement, the Company shall use its best efforts to file
a registration statement covering the shares of Common Stock so requested to
be registered as soon as practicable after receipt of a request for a Demand
Registration and thereupon to cause such registration statement to be
declared effective.
(b) The Selling Stockholder that requests a Demand
Registration shall enter into an underwriting agreement with the underwriters
in the form customarily used by the managing underwriter (including, without
limitation, a reasonable lock-up period, not to exceed one hundred twenty
(120) days), with such changes thereto as the parties thereto shall agree.
If such Selling Stockholder disapproves of the terms of any such
underwriting, it may elect to withdraw all (but not less than all) of its
shares of Common Stock from the proposed offering and will give written
notice to the Company and the managing underwriter terminating its Demand
Registration. In such event, the Company will have no obligation to proceed
with the proposed offering.
(c) If the Company shall furnish to the Selling Stockholder
requesting a Demand Registration a certificate signed by an officer of the
Company stating that the Board of Directors of the Company has determined
(which determination shall be made in good faith in the sole discretion of
the Board of Directors) that the filing of the registration statement should
be deferred because the offering contemplated by the Demand Registration
would be significantly disadvantageous to the Company, then the Company may
direct that such registration be delayed for as long as the basis for the
Board of Directors' judgment continues to exist; provided, however, that in
such event, the Selling Stockholder shall be entitled to withdraw from the
offering and the Company will pay all Registration Expenses in connection
with such proposed registration and, provided, further, that (i) the Company
may not delay such registration for a period of more than three (3) months
from the date a notice for a Demand Registration is first received by the
Company, and (ii) the Company may not defer its obligation in this manner
more than once in respect of any particular request for a Demand Registration
under Section 2.1.
(d) Any registration which shall not have become effective or
remained effective in accordance with the provisions of Section 2.7(a)(ii)
hereof, or any registration from which a Selling Stockholder has withdrawn
pursuant to Section 2.2(b), 2.2(c) or 2.4, shall not be deemed to be a Demand
Registration for any purpose hereunder.
2.3 Piggyback Registration Rights.
(a) If, at any time or from time to time for a period of
eight (8) years after the Initial Public Offering, the Company shall
determine to register any of its Common Stock (either for its own account or
the account of a security holder or holders), or shall be required to
register Common Stock pursuant to a Demand Registration or otherwise, other
than (i) a registration relating solely to stock option or employee benefit
plans, or (ii) a registration relating solely to a transaction or
transactions covered by Rule 145 under the Securities Act, the Company will
promptly give each Investor written notice thereof, and such notice will
offer each Investor the opportunity to register such number of shares of
Common Stock as each such Investor may request (a "Piggyback Registration").
The Company shall use its best efforts to cause the managing underwriter of
the proposed offering to include in such registration (and any related
qualification under blue sky or other state securities laws), and in any
underwriting involved therein (including with respect to any over-allotment
shares), all of the Registrable Securities specified in a written request or
requests made by any Investor within fifteen (15) days after receipt of such
written notice from the Company.
(b) If the registration of which the Company gives notice is
for a Public Offering involving an underwriting, the Company shall so advise
the Investors as part of the written notice given pursuant to Section 2.3(a).
In such event, the right of any Investor to registration pursuant to Section
2.3(a) shall be conditioned upon such Investor's participation in such
underwriting and the inclusion of the Common Stock owned by the Investor in
the underwriting to the extent provided under this Section 2.3. All Selling
Stockholders proposing to distribute their Common Stock through such
underwriting shall (together with the Company and any other holders of
securities of the Company distributing their securities through such
underwriting) enter into an underwriting agreement with the underwriters in
the form customarily used by the managing underwriter (including, without
limitation, a reasonable lock-up period, not to exceed one hundred twenty
(120) days), with such changes thereto as the parties thereto shall agree.
2.4 Underwriter's Cut-back. (a) Notwithstanding any provision of
Section 2.1 or 2.3, if the managing underwriter states in writing to the
Company that marketing factors require that the number of shares of Common
Stock requested to be included in a registration be limited, the managing
underwriter may reduce the number of shares to be included in such
registration. In the event of any such reduction, the shares of Common Stock
proposed to be sold by the Selling Stockholders will be treated as a class
(the "Selling Stockholders' Shares"). In the case of a Demand Registration,
the reduction will be allocated first to shares of Common Stock that are not
Selling Stockholders' Shares and then to the Selling Stockholders' Shares and
in the case of a Piggyback Registration triggered by an event other than a
Demand Registration, the reduction will be allocated first to the Selling
Stockholders' Shares and the shares of any other stockholders of the Company
to be included in the registration, taken as a class, and then to the other
shares to be sold in the proposed offering.
(b) In the event any reduction of the Selling Stockholders'
Shares and the shares of any other stockholders is required pursuant to this
Section 2.4, such reduction will be allocated pro rata (according to the
number of Registrable Securities proposed to be sold by each Selling
Stockholder and the number of shares of any other stockholders proposed to be
included in connection with the proposed registration) among all Selling
Stockholders and the other selling stockholders, taken as a class.
(c) The Company shall advise all Selling Stockholders as to
any such reduction and the number of shares that may be included in the
registration and underwriting. If any Selling Stockholder disapproves of the
terms of any such underwriting, such Selling Stockholder may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(d) In the case of a Demand Registration, if as a result of
the provisions of this Section 2.4 the Selling Stockholder that requested the
Demand Registration sells less than 66 2/3% of the shares requested to be
registered by him in the notice delivered pursuant to Section 2.1(a), such
offering shall not be deemed to be a Demand Registration for any purpose
hereunder.
2.5 Waiting Period for Demand Registrations. After the closing of
a sale of shares (a "Sale Closing") pursuant to a Demand Registration, no
subsequent Demand Registration shall be permitted until the expiration of one
(1) year after the date of the Sale Closing. Nothing in this Section 2.5
will limit the ability of Investors to request registrations pursuant to
Sections 2.1(b) and 2.3.
2.6 Expenses of Registration. All Registration Expenses incurred
in connection with all registrations pursuant to Sections 2.1 and 2.3 hereof
shall be borne by the Company. All Selling Expenses relating to Registrable
Securities registered on behalf of the Selling Stockholders shall be borne by
the Selling Stockholders pro rata based upon the total number of Registrable
Securities included in the registration or, if such Selling Expenses are
specifically allocable to Registrable Securities held by specific Selling
Stockholders, by such Selling Stockholders to the extent related to the sale
of such Registrable Securities.
2.7 Registration Procedures.
(a) If and whenever the Company is required to effect the
registration of any Registrable Securities under the Securities Act as
provided in Sections 2.1 and 2.3 hereof, the Company shall as expeditiously
as is reasonable:
(i) prepare and file with the Commission on any
appropriate form a registration statement with respect to such
Registrable Securities and use its best efforts to cause such
registration statement to become effective;
(ii) prepare and file with the Commission such
amendments (including post-effective amendments) and supplements to such
registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities and other securities covered
by such registration statement for a period of 180 days or until the
Selling Stockholder or Selling Stockholders have completed the
distribution described in such registration statement, whichever occurs
first;
(iii) furnish to each Selling Stockholder such number of
conformed copies of such registration statement and of each such
amendment and supplement thereto (at least one of which shall include
all exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any
summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such
registration statement or prospectus, and such other documents, as such
seller may reasonably request in order to facilitate the sale or
disposition of such Registrable Securities;
(iv) after the filing of a registration statement,
notify each Selling Stockholder of any stop order issued or threatened
by the Commission and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered;
(v) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or "blue sky" laws of such
jurisdictions as the underwriter shall reasonably request, and do any
and all other acts and things as may be reasonably necessary to
consummate the disposition in such jurisdictions of its Registrable
Securities covered by such registration statement, except that the
Company shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified, or to subject itself to taxation in respect of
doing business in any such jurisdiction, or to consent to general
service of process in any such jurisdiction unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act;
(vi) furnish to each Selling Stockholder and to each
underwriter a signed counterpart, addressed to such Selling Stockholder
or underwriter, of (1) an opinion of counsel for the Company, dated the
date of the closing under the underwriting agreement, and (2) "cold
comfort" letters signed by the independent public accountants who have
issued a report on the Company's financial statements included in such
registration statement dated the date of effectiveness of the
registration statement and the date of the closing under the
underwriting agreement, covering substantially the same matters with
respect to such registration statement (and the prospectus included
therein) and, in the case of such accountants' letters, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities and, in the case of the accountants' letters, covering such
other financial matters as such sellers or underwriters may reasonably
request;
(vii) immediately notify each Selling Stockholder of
Registrable Securities covered by such registration statement, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing or if it is necessary, in the opinion of
counsel to the Company, to amend or supplement such prospectus to comply
with law, and at the request of any such seller prepare and furnish to
such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing and shall otherwise comply in all material
respects with law and so that such prospectus, as amended or
supplemented, will comply with law;
(viii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve (12) months, beginning
with the first month of the first fiscal quarter after the effective
date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act;
(ix) use its best efforts to list such securities on
each securities exchange or over-the-counter market on which shares of
Common Stock are then listed, if such securities are not already so
listed and if such listing is then permitted under the rules of such
exchange; and, if shares of Common Stock are not then listed on a
securities exchange or over-the-counter market, to use its best efforts
to cause such securities to be listed on such securities exchange or
over-the-counter market as the managing underwriter shall reasonably
request;
(x) use its best efforts to provide a transfer agent and
registrar for such Registrable Securities not later than the effective
date of such registration statement;
(xi) issue to any underwriter to which any holder of
Registrable Securities may sell such Registrable Securities in
connection with any such registration (and to any direct or indirect
transferee of any such underwriter) certificates evidencing shares of
Common Stock without restrictive legends; and
(xii) take such other actions as are reasonably required
consistent with the terms hereof in order to expedite or facilitate the
disposition of the Registrable Securities.
(b) If requested by the managing underwriter for any
underwritten offering of Registrable Securities on behalf of a Selling
Stockholder or Selling Stockholders, the Company will enter into an
underwriting agreement with the underwriters of such offering, such agreement
to contain such representations and warranties by the Company and each such
Selling Stockholder and such other terms and conditions as are contained in
underwriting agreements customarily used by such managing underwriter
(including, without limitation, a reasonable lock-up period, not to exceed
one hundred twenty (120) days and provisions relating to indemnification and
contribution in lieu thereof) with such changes as the parties thereto shall
agree.
(c) The Selling Stockholder or Selling Stockholders shall
furnish to the Company such information regarding such Selling Stockholder or
Selling Stockholders, the Registrable Securities held by them and the
distribution proposed by such Selling Stockholder or Selling Stockholders as
the Company may from time to time reasonably request as required in
connection with any registration, qualification or compliance referred to in
this Agreement.
(d) The Selling Stockholder or Selling Stockholders shall,
upon request by the Company and the managing underwriter, execute and deliver
custodian agreements and powers of attorney in form and substance reasonably
satisfactory to the Company and such Selling Stockholder or Selling
Stockholders and as shall be reasonably necessary to consummate the offering.
(e) In connection with any registration pursuant to this
Agreement, the Company will make available for inspection by any Selling
Stockholder, any underwriter participating in the proposed disposition and
any attorney, accountant or other professional retained by any such Selling
Stockholder or underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any Inspectors in connection with such registration.
Records which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in the registration statement or
(ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction. Each Selling Stockholder
agrees that information obtained by it as a result of such inspections shall
be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company unless and until such
information is made generally available to the public. Each Selling
Stockholder of such Registrable Securities further agrees that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential. In the event First Plaza Transfers shares pursuant to
Section 3.4(a) to a Person that is not an Investment Entity, and the Board of
Directors of the Company reasonably determines that such Person could use the
information provided hereunder to the disadvantage of the Company, then the
rights under this paragraph (e) will be unavailable to such Person and its
Inspectors.
2.8 Indemnification.
(a) The Company will indemnify each Selling Stockholder, its
officers, directors, general partners or agents, and each underwriter, if
any, and each person who controls any Selling Stockholder or underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and any named fiduciary acting for First Plaza and the advisors
acting for the named fiduciary in connection with this Agreement and the
respective directors, officers, trustees and employees of the foregoing
persons, against any and all losses, claims, damages, liabilities or expenses
(including any of the foregoing incurred in settlement or investigation of
any litigation, commenced or threatened or in connection with enforcement of
rights under this Agreement) ("Damages"), arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any registration statement or prospectus (including a preliminary
prospectus), or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, or any violation by
the Company of the Securities Act or any rule or regulation promulgated under
the Securities Act applicable to the Company in connection with any such
registration; provided, however, that the Company will not be liable in any
such case to the extent that any Damages arise out of or are based on any
untrue statement or omission, or alleged untrue statement or omission, made
in reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder or underwriter for use therein. The
Company will reimburse each indemnitee under this Section 2.8(a) for any
legal and other expenses reasonably incurred, as such expenses are incurred,
in connection with investigating, preparing or defending any such Damages.
(b) Each Selling Stockholder will severally and not jointly,
if Registrable Securities held by such Selling Stockholder are included in
the securities as to which such registration is being effected, indemnify the
Company, each of its directors and officers, each of the other Selling
Stockholders, each underwriter, if any, of the Company's securities covered
by such a registration statement, each Person who controls the Company, any
other Selling Stockholder or such underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act and each other
such Selling Stockholder and any named fiduciary acting for First Plaza and
the advisors acting for the named fiduciary in connection with this Agreement
and the respective directors, officers, trustees and employees of the
foregoing persons against any and all Damages arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement or prospectus, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and will reimburse the Company,
such Selling Stockholders, underwriters, control persons and any named
fiduciary acting for First Plaza and the advisors acting for the named
fiduciary in connection with this Agreement and the respective directors,
officers, trustees and employees of the foregoing persons for any legal or
any other expenses reasonably incurred, as such expenses are incurred, in
connection with investigating or defending any such Damages, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement or prospectus in reliance upon and in conformity with
written information furnished to the Company by such Selling Stockholder
specifically for use therein. Notwithstanding the foregoing, the liability
of each Selling Stockholder under this Section 2.8 shall be limited to an
amount equal to the net proceeds received by such Selling Stockholder from
the sale of Registrable Securities hereunder.
(c) Each party entitled to indemnification under this Section
2.8 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and the Indemnifying Party shall assume the defense of any such
claim or any litigation resulting therefrom and the payment of all related
fees and expenses; provided, however, that counsel for the Indemnifying Party
who shall conduct the defense of such claim or litigation shall be approved
by the Indemnified Party (which approval shall not be unreasonably withheld).
In any such proceedings, any Indemnified Party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be borne by
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties)
include both the Indemnified Party and the Indemnifying Party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them; provided, however,
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of an unconditional release from all liability in respect
of such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required
in connection with the defense of such claim and the litigation resulting
therefrom.
2.9 Contribution.
(a) If the indemnification provided for in Section 2.8 hereof
is unavailable to the Indemnified Parties in respect of any Damages, then
each such Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Damages. As between the Company on the one hand and each
Selling Stockholder on the other, such contribution shall be in such
proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on the other in
connection with the statement or omission which resulted in such Damages, as
well as any other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things, whether the untrue
statement (or alleged untrue statement) of a material fact or the omission
(or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and each Investor agree
that it would not be just and equitable if contribution pursuant to this
Section 2.9 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to above. The amount paid or payable by an Indemnified Party as a
result of the Damages referred to above in this Section 2.9 shall be deemed
to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such
action or claim.
(b) Notwithstanding anything to the contrary contained
herein, the obligation of each Selling Stockholder to contribute pursuant to
this Section 2.9 is several and not joint and no Selling Stockholder shall be
required to contribute any amount in excess of the amount by which the net
proceeds received by the Selling Stockholder in the offering exceeds the
amount of any damages which such Selling Stockholder has otherwise been
required to pay by reason of such untrue statement (or alleged untrue
statement) or omission (or alleged omission). The Selling Stockholders'
obligations to contribute pursuant to this Section 2.9 are several in the
proportion that the proceeds of the offering received by such Selling
Stockholder bears to the total proceeds of the offering received by all the
Selling Stockholders unless it is determined that, based upon the relative
fault of the several Selling Stockholders, it would be equitable to otherwise
allocate such obligations.
(c) No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
2.10 Exchange Act Registration.
The Company covenants and agrees that until such time as there
shall be no Common Stock outstanding:
(a) it will, if required by law, maintain an effective
registration statement (containing such information and documents as the
Commission shall specify) with respect to the Common Stock under Section
12(g) of the Exchange Act and will file in a timely manner such information,
documents and reports as the Commission may require or prescribe for
companies whose stock has been registered pursuant to said Section 12(g);
(b) it will, if a registration statement with respect to the
Common Stock under Section 12(b) or Section 12(g) of the Exchange Act is
effective, make whatever filings with the Commission or otherwise make
generally available to the public such financial and other information as may
be necessary in order to enable the Investors to sell shares of Common Stock
pursuant to the provisions of Rule 144 promulgated under the Securities Act,
or any successor rule or regulation thereto or any statute hereafter adopted
to replace or to establish the exemption that is now covered by said Rule 144
("Rule 144");
(c) it will, if no longer required to file reports pursuant
to Section 12(g) of the Exchange Act, upon the request of any Investor, make
publicly available the information specified in subparagraph (c)(2) of Rule
144, and will take such further action as any Investor may reasonably
request, all to the extent required from time to time to enable such Investor
to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (x) Rule 144 or (y) any
similar rule or regulation hereafter adopted by the Commission; and
(d) upon the request of any Investor, it will deliver to such
Investor a written statement as to whether it has complied with the
requirements of this Section 2.10.
The Company represents and warrants that such registration
statement or any information, documents or report filed with the Commission
in connection therewith or any information so made public shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
contained therein not misleading. The Company agrees to indemnify and hold
harmless (or to the extent the same is not enforceable, make contribution to)
the Selling Stockholders, their partners, advisory committee members,
officers, directors and employees acting for any Selling Stockholder in
connection with any offering or sale by such Investor of Registrable
Securities or any person, firm or corporation controlling (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act)
such Selling Stockholder, and any named fiduciary acting for First Plaza and
the advisors acting for the named fiduciary in connection with this Agreement
and the respective directors, officers, trustees and employees of the
foregoing persons, from and against any and all Damages arising out of or
resulting from any breach of the foregoing representation or warranty, all on
terms and conditions comparable to those set forth in Sections 2.8 and 2.9;
provided, however, that the Company shall be given written notice and an
opportunity to assume the defense thereof on terms and conditions comparable
to those set forth in Sections 2.8 and 2.9.
2.11 Transfer or Assignment of Registration Rights.
(a) The rights granted to the Investors under this Article II
are not transferable or assignable to any Person other than an Affiliate
thereof or, in the case of Silver and Horrigan, to a member of the Group, and
provided that any such Affiliate of MS Equity, BTNY or First Plaza shall be
an Investment Entity.
(b) Notwithstanding the foregoing, the rights granted to any
Investor under this Article II may be transferred or assigned by such
Investor or its Affiliate, subject to the terms and conditions of this
Agreement, to a third party which in the case of MS Equity and BTNY shall be
an Investment Entity; provided, in the case of transfers by First Plaza or MS
Equity or their Affiliates of their rights, if any, under Section 2.1 hereof,
that such transfer is made in connection with the Transfer by First Plaza of
at least fifty percent (50%) of the shares of Common Stock acquired by First
Plaza pursuant to the Stock Purchase Agreement or by MS Equity in connection
with the Transfer of all of its shares of Common Stock.
ARTICLE III
CERTAIN RESTRICTIONS ON TRANSFER OF SHARES
3.1 Limitations on Transfer.
(a) Until June 30, 1999, except as otherwise specifically
provided in this Article III, none of MS Equity, Silver or Horrigan (each, a
"Restricted Transferor", and collectively, the "Restricted Transferors") or
First Plaza shall, without the prior written consent of the Restricted
Transferors, Transfer any shares of Common Stock unless such Transfer is (i)
made in connection with a Public Offering or a Rule 144 Open Market
Transaction, (ii) a Permitted Private Transfer or (iii) in the case of MS
Equity, a MSLEF Distribution. The transfer restrictions in this Article III
will terminate on June 30, 1999; provided that any such restrictions
applicable to First Plaza shall terminate on the fifth anniversary of the
Closing Date.
(b) For purposes of this Agreement, "Permitted Private
Transfer means (i) a Transfer to an Affiliate pursuant to the terms of
Section 3.2 or (ii) a Transfer pursuant to the procedures, terms and
conditions of Section 3.4.
(c) No Permitted Private Transfer shall be effected unless
and until notice thereof shall be given by the Restricted Transferor or First
Plaza, as the case may be, to the Company and the transferee shall agree in
writing prior to the Transfer to be bound by the provisions of this Agreement
as and to the extent that the Restricted Transferor was bound, except as
specifically provided by this Agreement.
(d) Each of First Plaza and the Restricted Transferors
understand and agree with the Company that it may effect a Permitted Private
Transfer or a MSLEF Distribution: (i) only in compliance with the Securities
Act, as then in effect; (ii) no Transfer of any of the shares of Common Stock
shall be permitted without a written opinion of counsel of recognized
standing in securities laws (including in-house counsel) to the effect that
the proposed Transfer of the shares of Common Stock would not be in violation
of the Securities Act or any applicable state securities laws, which opinion
shall be, at such Restricted Transferor's expense, submitted to the Company
and shall be satisfactory in form and substance to the Company and (iii) it
will give notice of any such Permitted Transfer or MSLEF Distribution to each
of the Restricted Transferors. In addition, the Restricted Transferors and
First Plaza agree not to transfer any of the shares of Common Stock except
for transfers made in compliance with the terms of this Agreement, the terms
of the Company's Certificate of Incorporation as in effect from time to time
and all applicable federal and state securities laws.
3.2 Transfers to Affiliates. Each of the Restricted Transferors
and First Plaza shall be entitled from time to time, without the consent of
the Company or any other Stockholders, to Transfer any or all of the shares
of capital stock of the Company owned by it to an Affiliate of such
Restricted Transferor or First Plaza, as the case may be; provided, however,
that in the case of a Transfer by First Plaza or MS Equity to an Affiliate,
such Affiliate must be an Investment Entity, and provided, further, that such
transferee shall, prior to the Transfer, agree in writing to, and thereafter
shall, re-transfer ownership of any shares of capital stock of the Company
owned by such transferee back to the Restricted Transferor or First Plaza
prior to the time such transferee ceases to be an Affiliate of such
Restricted Transferor. In the event that the transferee ceases to be an
Affiliate of the Restricted Transferor or First Plaza, as the case may be,
without a transfer to the Restricted Transferor or First Plaza, as the case
may be, having taken place, the ownership of such shares by such transferee
shall be governed by the provisions of Section 3.5 hereof.
3.3 MSLEF Distribution; Pledges.
(a) Without prior notice to, or the consent of, the Company or
any other Stockholder, MS Equity may distribute the shares of Common Stock
held by it to the partners of MS Equity pursuant to a MSLEF Distribution.
(b) Notwithstanding anything else in this Agreement, MS
Equity may pledge its shares of Common Stock to a lender or lenders
reasonably acceptable to the Company to secure a loan or loans to MS Equity.
In the event of any proposed foreclosure of such pledge, such shares will be
subject to the right of first refusal of the Group as provided in Section
3.4(b).
3.4 Rights of First Refusal.
(a) Until the fifth (5th) anniversary of the Closing Date,
First Plaza may Transfer any shares of Common Stock held by it to any third
party (other than any shares which First Plaza wishes to Transfer pursuant to
Sections 3.2 or 3.3 hereof) only as follows. First Plaza or such Affiliate
must give notice (the "First Plaza Offer Notice") to each of the Group and MS
Equity (the "First Plaza Offerees") setting forth the number of shares of
Common Stock (the "First Plaza Offered Shares") proposed to be sold, the
terms and conditions of such sale, and the price or method for determining
such price. Subject to the last sentence of this Section 3.4, each First
Plaza Offeree shall have the right to purchase one-half (1/2) of the First
Plaza Offered Shares; provided that, in the event a First Plaza Offeree
elects to purchase less than its full proportionate share, then the other
First Plaza Offeree shall have the right to purchase all of such remaining
First Plaza Offered Shares. Within fifty-five (55) days of the receipt of
the First Plaza Offer Notice, each First Plaza Offeree shall notify First
Plaza and the other First Plaza Offeree whether it will exercise its right to
purchase its proportionate share and the maximum number of First Plaza
Offered Shares such First Plaza Offeree would elect to purchase. Failure of
a First Plaza Offeree to so notify all such parties shall be deemed a
determination by such First Plaza Offeree not to purchase the First Plaza
Offered Shares. If either of the First Plaza Offerees exercises its
respective right to purchase the First Plaza Offered Shares, such party must
consummate the purchase within ninety (90) days after the date of the notice
of exercise of such right at a price equal to or greater than the price and
upon the same terms and conditions set forth in the First Plaza Offer Notice.
No shares of Common Stock may be purchased by MS Equity or the Group pursuant
to this Section 3.4(a) unless all the shares of Common Stock set forth in the
First Plaza Offer Notice are purchased or unless First Plaza consents to the
purchase of less than all the First Plaza Offered Shares.
(b) Until June 30, 1999, MS Equity may effect any Investment
Entity Sale (or any Third Party Sale if an Event of Default has occurred and
is continuing under Paragraph 5(a) of the Amended and Restated Management
Services Agreement between the Company and S&H Inc., dated as of December 21,
1993, as the same may be amended from to time) if MS Equity first offers such
shares proposed to be sold (the "MS Offered Shares") to the Group for
purchase in compliance with this Section 3.4(b). MS Equity shall promptly
provide notice (the "MS Offer Notice") to the Group setting forth the terms
of the proposed Investment Entity Sale or Third Party Sale, including the
identity of the proposed purchaser, the number of shares of Common Stock
being sold, the terms and conditions of the Investment Entity Sale or Third
Party Sale, and the price or method of determining such price. Within
fifteen (15) days of the receipt of the MS Offer Notice, the Group shall
notify MS Equity whether it will exercise its right to purchase the MS
Offered Shares. Failure of the Group to so notify MS Equity shall be deemed
a determination by the Group not to purchase the MS Offered Shares. No
shares of Common Stock may be purchased by the Group pursuant to this Section
3.4(b) unless all the shares of Common Stock set forth in the MS Offer Notice
are purchased or unless MS Equity consents to the purchase of less than all
the MS Offered Shares. If the Group exercises its right to purchase the MS
Offered Shares, the Group must consummate the purchase within ninety (90)
days after the date of the notice of such exercise at a price equal to or
greater than the price and upon the same terms and conditions set forth in
the MS Offer Notice. If the Group determines to purchase in the aggregate
less than all the MS Offered Shares, and if MS Equity has not consented to
the purchase of less than all the MS Offered Shares, MS Equity shall be free
to sell all of the MS Offered Shares to the purchaser designated in the MS
Offer Notice, provided that such sale is consummated within ninety (90) days
after the expiration of the fifteen (15) day period referred to above at a
price equal to or greater than the price and upon the same terms and
conditions as set forth in the MS Offer Notice.
(c) Until the fifth anniversary of the Closing Date, each member
of the Group may effect any Third Party Sale if such member of the Group (the
"Group Offeror") first offers such shares proposed to be sold (the "Group
Offered Shares") to the other member of the Group and MS Equity (the "Section
3.4(c) Offerees") for purchase in compliance with this Section 3.4(c). The
Group Offeror shall promptly provide a notice (the "Group Offer Notice") to
the Section 3.4(c) Offerees setting forth the terms of the proposed Third
Party Sale, including the identity of the proposed purchaser, the number of
shares of Common Stock being sold, the terms and conditions of such sale, and
the price or method for determining such price. Within fifteen (15) days of
the receipt of the Group Offer Notice, the other member of the Group shall
notify the Group Offeror and the other Section 3.4(c) Offeree whether it will
exercise its right to purchase up to all the Group Offered Shares. Failure
of the other member of the Group to so notify all such parties shall be
deemed a determination by such other member of the Group not to purchase the
Group Offered Shares. If the other member of the Group determines to
purchase in the aggregate less than all the Group Offered Shares, and if MS
Equity desires to purchase any or all of such remaining Group Offered Shares,
MS Equity shall notify the Group Offeror and the other Section 3.4(c) Offeree
within twenty (20) days of the receipt of the Group Offer Notice of the
number of Group Offered Shares, if any, that MS Equity will exercise its
right to purchase. Failure of MS Equity to so notify all such parties shall
be deemed a determination by MS Equity not to purchase the Group Offered
Shares. No shares of Common Stock may be purchased by any of the Section
3.4(c) Offerees, or a combination thereof, pursuant to this Section 3.4(c)
unless all the shares of Common Stock set forth in the Group Offer Notice are
purchased or unless the Group Offeror consents to the purchase of less than
all the Group Offered Shares. If any of the Section 3.4(c) Offerees
exercises its respective right to purchase the Group Offered Shares, such
party must consummate the purchase within ninety (90) days after the date of
the notice of such exercise at a price equal to or greater than the price and
upon the same terms and conditions set forth in the Group Offer Notice. If
none of the Section 3.4(c) Offerees, or a combination thereof, determines to
purchase in the aggregate all the Group Offered Shares, the Group Offeror
shall be free to sell the Group Offered Shares to the purchaser designated in
the Group Offer Notice, provided that (i) such sale is consummated within
ninety (90) days after the expiration of the twenty (20) day period referred
to above at a price equal to or greater than the price and upon the same
terms and conditions as set forth in the Group Offer Notice.
(d) Unless the parties to the Transfer shall agree otherwise,
the purchase price for any shares of Common Stock purchased by MS Equity or
either member of the Group pursuant to this Section 3.4 shall be paid by the
purchaser at the closing of such sale in immediately available funds against
delivery by the seller of the shares of Common Stock being sold, free and
clear of all liens, charges and encumbrances, in the form of the certificate
or certificates representing such shares of Common Stock, accompanied by
appropriate stock powers, duly executed or endorsed in blank, with the
appropriate transfer tax stamps affixed.
(e) In the event that MS Equity and the Group shall fail to
purchase any shares of Common Stock identified in any First Plaza Offer
Notice, MS Offer Notice or Group Offer Notice and any such shares shall be
sold to any third party in compliance with the terms and conditions of this
Section 3.4, the restrictions on transfer set forth in this Article III
(other than Section 3.1(d) hereof) will terminate with respect to such shares
and the holder or holders thereof.
(f) MS Equity may assign its rights of first refusal under
this Section 3.4 to any Affiliate that is an Investment Entity (or to Morgan
Stanley & Co. Incorporated in the case of purchases from First Plaza). In
the event that any such Affiliate wishes to purchase shares of Common Stock
offered for sale pursuant to this Section 3.4, such Affiliate will agree in
writing prior to such purchase to be bound by the provisions of this
Agreement as and to the extent MS Equity is bound.
3.5 Effect of Void Transfers. In the event a Transfer of any
shares of Common Stock takes place in violation of the provisions of this
Article III, such Transfer shall be void and of no effect, and no dividend of
any kind whatsoever nor any distribution pursuant to liquidation or otherwise
shall be paid by the Company to the transferee in respect of such shares (all
such dividends and distributions being deemed waived), and the voting rights
of such shares on any matter whatsoever shall remain vested in the
transferor, during the period commencing with such party's initial failure of
compliance and ending when compliance shall have occurred.
3.6 ERISA Limitation. Notwithstanding any other provision of this
Agreement, First Plaza and its Affiliates shall not be required to sell any
shares of Common Stock to any Person if doing so would constitute a non-
exempt prohibited transaction under Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). First Plaza shall use its
reasonable best efforts to obtain an exemption under ERISA to permit any sale
of Common Stock held by it referred to in the previous sentence that would
otherwise constitute such a non-exempt prohibited transaction.
ARTICLE IV
VOTING
4.1 Election of Certain Directors.
Until the fifth (5th) anniversary of the Closing Date:
(a) for so long as MS Equity and its Affiliates (excluding
the limited partners of MS Equity who may acquire shares of Common Stock from
MS Equity in a MSLEF Distribution) shall hold at least one-half of the number
of shares of Common Stock held by MS Equity at the Closing Date (as adjusted,
if necessary, to take into account any stock dividend, stock split,
combination of shares, subdivision or recapitalization of the capital stock
of the Company), the parties hereto and their Restricted Voting Transferees
shall use their best efforts (including to vote any shares of Common Stock
owned or controlled by such Investor or otherwise) to cause the nomination
and election of two (2) members of the Board of Directors of the Company to
be chosen by MS Equity; provided, however, that each such nominee shall be
(i) either an employee of Morgan Stanley & Co. Incorporated whose primary
responsibility is managing investments for MS Equity (or a successor or
related partnership) or (ii) a person reasonably acceptable to the Group not
engaged in (as a director, officer, employee, agent or consultant or as a
holder of more than five percent of the equity securities of) a business
competitive with that of the Company, and
(b) for so long as the Group shall hold at least one-half of
the number of shares of Common Stock held by it in the aggregate at the
Closing Date (as adjusted, if necessary, to take into account any stock
dividend, stock split, combination of shares, subdivision or recapitalization
of the capital stock of the Company), the parties hereto and their Restricted
Voting Transferees shall use their best efforts (including to vote any shares
of Common Stock owned or controlled by such Investor or otherwise) to cause
the nomination and election of two (2) individuals nominated by the holders
of a majority of the shares of Common Stock held by the Group as members of
the Board of Directors of the Company; provided, however, that at least one
(1) of such nominees shall be Silver or Horrigan and the other person, if not
Silver or Horrigan, shall be a person reasonably acceptable to MS Equity, so
long as MS Equity and its Affiliates (other than any Affiliate which is not
an Investment Entity and excluding the limited partners of MS Equity who may
acquire shares of Common Stock from MS Equity in a MSLEF Distribution) shall
hold at least one-half of the number of shares of Common Stock held by MS
Equity at the Closing Date (as adjusted, if necessary, to take into account
any stock dividend, stock split, combination of shares, subdivision or
recapitalization of the capital stock of the Company), and
(c) subject to the foregoing, for so long as the Group shall
hold at least one-half of the number of shares of Common Stock held by it in
the aggregate at the Closing Date (as adjusted, if necessary to take into
account any stock dividend, stock split, combination of shares, subdivision
or recapitalization of the capital stock of the Company), First Plaza and its
Restricted Voting Transferees shall vote all shares of Common Stock held by
them in favor of any other directors standing for election to the Company's
Board of Directors for whom the holders of a majority of the shares of Common
Stock held by the Group shall direct First Plaza to vote.
4.2 Mergers and Sales.
(a) Until the fifth (5th) anniversary of the Closing Date, MS
Equity and its Restricted Voting Transferees shall vote all shares of Common
Stock held by them against any unsolicited merger, or sale of the Company's
business or its assets, if such transaction is opposed by the holders of a
majority of the shares of Common Stock held by the Group, unless as of the
applicable record date for such vote, the Group holds less than ninety
percent (90%) of the number of shares of Common Stock held by it in the
aggregate at the Closing Date (as adjusted, if necessary, to take into
account any stock dividend, stock split, combination of shares, subdivision
or recapitalization of the capital stock of the Company).
(b) Until the fifth (5th) anniversary of the Closing Date,
First Plaza and its Restricted Voting Transferees shall vote all shares of
Common Stock held by them against any unsolicited merger, or sale of the
Company's business or its assets, if such transaction is opposed by the
holders of a majority of the shares of Common Stock held by the Group;
provided, however, that First Plaza and its Restricted Voting Transferees
shall not be required to vote their shares of Common Stock in accordance with
the foregoing if:
(i) in connection with such merger or sale, (x) First Plaza
and its Restricted Voting Transferees propose to sell or otherwise
transfer all of their shares of Common Stock to a third party for
aggregate cash consideration of less than $10 million and (y) the Group
and/or MS Equity has not exercised their right of first refusal pursuant
to Section 3.4(a) hereof in respect of such sale or transfer by First
Plaza or such right of first refusal in respect of the shares of Common
Stock held by First Plaza shall have terminated; or
(ii) as of the applicable record date for such vote, the Group
holds less than ninety percent (90%) of the number of shares of Common
Stock held by it in the aggregate at the Closing Date (as adjusted, if
necessary, to take into account any stock dividend, stock split,
combination of shares, subdivision or recapitalization of the capital
stock of the Company).
4.3 Defined Terms. For purposes of this Article IV, the following
terms shall have the following meanings:
"holders of a majority of the shares of Common Stock held by
the Group" shall mean the holders of a majority of the aggregate of 417,500
shares of Class A Stock held by Messrs. Silver and Horrigan at the Closing
Date (the "Original Holding") which at the time of any such determination
have been continuously and are held by the Group. No shares of Common Stock
which are acquired by any member of the Group (other than shares of the
Original Holding) shall be counted for purposes of making such determination;
and
"Restricted Voting Transferee" shall mean any holder of shares
of Common Stock held by any of the Investors at the time of the IPO which
have been sold or transferred to any third party otherwise than pursuant to a
Public Offering, a Rule 144 Open Market Transaction or a MSLEF Distribution.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 Due Authorization. Each of the parties to this Agreement
represents that this Agreement has been duly authorized, executed and
delivered by such party and constitutes the legal, valid and binding
obligation of such party enforceable against it in accordance with its terms.
5.2 Agreement Binding; Transfers. (a) Except to the extent
expressly provided herein, the parties hereto agree that this Agreement shall
be binding upon and inure to the benefit of their respective heirs,
executors, legal representatives, successors and assigns, including, without
limitation, any transferee of shares of Common Stock of the parties hereto
(other than transferees pursuant to a Public Offering, a Rule 144 Open Market
Transaction) or a MSLEF Distribution.
(b) The parties hereto and their transferees acknowledge the
legend which pursuant to Section 3.3 of the Organization Agreement has been
placed on the certificates for the shares of Common Stock held by the parties
hereto and agree that, until the fifth anniversary of the Closing Date, they
will not transfer shares of Common Stock to any Person other than pursuant to
a Public Offering, a Rule 144 Open Market Transaction or a MSLEF Distribution
unless notice thereof shall be given by the transferor to the Company and the
transferee shall agree to be bound by the provisions of this Agreement
applicable to such transferee.
(c) The Company agrees that it will upon the request of any
Investor in connection with any Transfer of shares of Common Stock in
connection with any Public Offering, Rule 144 Open Market Transaction or
MSLEF Distribution, and to the extent otherwise appropriate, remove any
legends setting forth any restrictions under this Agreement on the
certificate or certificates evidencing such shares and confirm to any such
transferee in writing the absence of any such restrictions hereunder.
5.3 Surviving Corporation. In addition to any other restrictions
on mergers, consolidations and reorganizations contained in the charter, by-
laws or agreements of the Company, the Company covenants and agrees that it
shall not, directly or indirectly, enter into any merger, consolidation or
reorganization in which the Company shall not be the surviving corporation
unless the surviving corporation shall, prior to the consummation of such
merger, consolidation or reorganization, agree in a writing satisfactory in
form, scope and substance to the holders of a majority of the Common Stock to
assume the obligations of the Company under this Agreement, and for that
purpose references hereunder to "Common Stock" shall be deemed to include the
securities which such holders would be entitled to receive in exchange for
Common Stock pursuant to any such merger, consolidation or reorganization.
5.4 Notices. Any and all notices, offers or other communications
provided for herein shall be given in writing and shall be delivered
personally or by prepaid registered or certified mail or by prepaid
nationally recognized overnight courier service, or by facsimile transmission
or telex, all at the following addresses and facsimile numbers:
If to Silver:
c/o Silgan Holdings Inc.
4 Landmark Square, Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
Telecopy No.: (203) 975-7902
If to Horrigan:
c/o Silgan Holdings Inc.
4 Landmark Square, Suite 301
Stamford, CT 06901
Attention: D. Greg Horrigan
Telecopy No.: (203) 975-7902
If to Holdings:
Silgan Holdings Inc.
4 Landmark Square, Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
Telecopy No.: (203) 975-7902
If to MS Equity:
The Morgan Stanley Leveraged
Equity Fund II, L. P.
Morgan Stanley Leveraged Equity
Fund II, Inc., General Partner
1251 Avenue of the Americas
New York, NY 10020
Attention: Robert H. Niehaus
Telecopy No.: (212) 703-6503
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: John R. Ettinger, Esq.
Telecopy No.: (212) 450-4800
If to BTNY:
Bankers Trust New York Corporation
130 Liberty Street
New York, NY 10006
Attention: Joseph T. Wood
Telecopy No.: (212) 250-7651
with a copy to:
White & Case
1155 Avenue of the Americas
New York, NY 10036
Attention: Eric L. Berg, Esq.
Telecopy No.: (212) 354-8113
If to First Plaza:
General Motors Investment Management
Corporation
767 Fifth Avenue
New York, NY 10153
Attention: James K. Kelliher
Telecopy No.: (212) 418-3651
with a copy to:
Kirkland & Ellis
55 East 52nd Street
New York, NY 10055
Attention: Frederick Tanne, Esq.
Telecopy No.: (212) 838-4223
If a notice is sent to any of the above, a copy shall be sent to:
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
P.O. Box 6760
Stamford, CT 06904-6760
Attention: Frode Jensen, III, Esq.
Telecopy No.: (203) 965-8226
Notice shall be deemed given, for all purposes, (i) if given by mail as
hereinabove provided or such overnight courier service, upon two (2) business
days after deposit in the United States mail or with such overnight courier
service, or (ii) when personally delivered to the person or persons named
above, or sent by facsimile transmission or telex; provided, however, that
any notice of change of address shall be effective only upon receipt.
5.5 Equitable Relief for Breach of Agreement. Without limiting
the remedies available to any of the parties hereto, each of the parties
hereto stipulates and agrees that damages at law will be an insufficient
remedy in the event that any party violates the terms of this Agreement, and
each of the parties hereto further agrees that each of the other parties
hereto may apply for and have injunctive or other equitable relief in any
court of competent jurisdiction to restrain the breach or threatened breach
of, or otherwise specifically to enforce, the terms of this Agreement.
5.6 Entire Agreement; Amendments. This Agreement contains the
entire understanding of the parties hereto with respect to the subject matter
hereof. This Agreement may not be amended, modified or revoked in whole or
in part except by written instrument executed together or in counterparts by
the parties hereto.
5.7 Waiver. No waivers of any breach or other term or condition
of this Agreement extended by any party hereto to any other party shall be
construed as a waiver of any rights or remedies with respect to any
subsequent breach or with respect to any other term or condition.
5.8 Headings. The headings and subheadings in this Agreement are
inserted for convenience of reference only and are not to be considered in
construction of the provisions hereof.
5.9 Unenforceable Provisions. The provisions of this Agreement
shall be applied and interpreted in a manner consistent with each other so as
to carry out the purposes and intent of the parties hereto, but if for any
reason any provision hereof is determined to be unenforceable or invalid,
such provision or such part thereof as may be unenforceable or invalid shall
be deemed automatically amended to the extent necessary to make such
provision or such part thereof valid and enforceable, and the remaining
provisions shall remain in full force and effect.
5.10 Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed an original,
but all of which, taken together, shall constitute one and the same
agreement.
5.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
giving effect to any principles of conflicts of law.
5.12 Effectiveness. This Agreement shall become effective on the
later of the Closing Date and the date that this Agreement has been duly
executed and delivered by all of the parties hereto. Notwithstanding the
foregoing, the parties acknowledge that the operative provisions of this
Agreement do not take effect until after the occurrence of the Initial Public
Offering.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
/s/ R. Philip Silver
---------------------------------
Name: R. Philip Silver
/s/ D. Greg Horrigan
---------------------------------
Name: D. Greg Horrigan
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.
By: Morgan Stanley Leveraged Equity
Fund II, Inc. (General Partner)
By: /s/ Robert H. Niehaus
------------------------------
Name: Robert H. Niehaus
Title: Director
BANKERS TRUST NEW YORK CORPORATION
By: /s/ Joseph T. Wood
------------------------------
Name: Joseph T. Wood
Title: Senior Vice President
FIRST PLAZA GROUP TRUST
By: Mellon Bank, N.A., Trustee
(as directed by General
Motors Investment Management
Corporation)
By: /s/ Judith A. Manion
------------------------------
Name: Judith A. Manion
Title: Paralegal
SILGAN HOLDINGS INC.
By: /s/ R. Philip Silver
-------------------------------
Name: R. Philip Silver
Title: President
[TEXT]
Exhibit 4
AMENDED AND RESTATED
MANAGEMENT SERVICES AGREEMENT
This Amended and Restated Management Services Agreement (the
"Agreement") is made as of this 21st day of December, 1993 by and between S&H
INC., a Connecticut corporation ("S&H"), and SILGAN HOLDINGS INC., a Delaware
corporation ("Holdings").
W I T N E S S E T H:
WHEREAS, S&H and Holdings have entered into the Management Services
Agreement dated June 30, 1989, as amended by Amendment No. 1 thereto dated
July 13, 1990 and Amendment No. 2 thereto dated as of June 29, 1992 (as
amended by Amendment No. 1 and Amendment No. 2, the "Management Services
Agreement"), pursuant to which S&H provides general management, supervision,
administrative and other services to Holdings in accordance with the terms of
the Management Services Agreement;
WHEREAS, simultaneously herewith, R. Philip Silver ("Silver"), D.
Greg Horrigan ("Horrigan"), The Morgan Stanley Leveraged Equity Fund II, L.P.
("MS Equity"), Bankers Trust New York Corporation, First Plaza Group Trust
and Holdings are entering into an Amended and Restated Organization Agreement
(the "Organization Agreement") providing for, among other things, the terms
governing the relationship among the parties for the term thereof and the
amendment and restatement of the Management Services Agreement; and
WHEREAS, S&H and Holdings desire to amend and restate hereby such
Management Services Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, S&H and Holdings agree as follows:
1. Management Services.
(a) S&H and Holdings hereby agree that, during the period
beginning on the Closing Date (as defined in the Organization Agreement) and
continuing throughout the term hereof, S&H and its Affiliates shall provide
to Holdings general management, supervision and administrative services,
including, without limitation, the preparation of the annual and long-term
business plans of Holdings, and perform such other duties and provide such
other services as Holdings shall be permitted to request of S&H pursuant to
the Restated Certificate of Incorporation or By-Laws of Holdings or pursuant
to applicable law, which power and authority Holdings hereby grants to S&H
("General Management Services"). (The General Management Services are
hereinafter collectively referred to as the "Services" and individually as a
"Service").
(b) Any Service hereunder shall be provided to Holdings only by
S&H or its Affiliates or such consultants, subcontractors or agents as may be
selected from time to time by S&H. It is understood and agreed that S&H
shall retain the services of Morgan Stanley & Co. Incorporated as financial
advisor to Holdings.
2. Fees; Payment.
(a) In consideration for General Management Services provided by
S&H to Holdings hereunder, Holdings shall pay to S&H aggregate fees or
compensation therefor (not including any related out-of-pocket expenses), (i)
on a monthly basis, five thousand dollars ($5,000) plus an amount equal to
2.475% of EBDIT (as defined in Paragraph 2(j) hereof) for such calendar month
of Holdings until EBDIT for the calendar year to date has reached the
Scheduled Amount for such calendar year (as defined in Paragraph 2(e) hereof)
and 1.65% of EBDIT for such calendar month of Holdings to the extent that
EBDIT for the calendar year to date exceeds the Scheduled Amount but is not
greater than the Maximum Amount (as defined in Paragraph 2(e) hereof) (the
"Monthly Management Fee"); and (ii) on a quarterly basis, an amount equal to
2.475% of EBDIT for such calendar quarter of Holdings until EBDIT for the
calendar year to date has reached the Scheduled Amount, and 1.65% of EBDIT
for such calendar quarter of Holdings to the extent that EBDIT for the
calendar year to date exceeds the Scheduled Amount but is not greater than
the Maximum Amount (the "Quarterly Management Fee").
(b) Such Quarterly Management Fee shall continue to accrue, but
shall not be paid, to S&H by Holdings in the event that, and from the date on
which, Silgan Corporation, a wholly owned subsidiary of Holdings ("Silgan"),
shall have received written notice ("Notice") from the Agent (as defined
below) that an Event of Default (as such term is defined in the Credit
Agreement, dated as of December 21, 1993, among Silgan, Silgan Containers
Corporation ("Containers"), Silgan Plastics Corporation ("Plastics"), the
financial institutions parties thereto, Bankers Trust Company, as Agent (the
"Agent"), and Bank of America National Trust and Savings Association, as Co-
Agent, as amended, supplemented or modified from time to time (the "Credit
Agreement")) exists under any of Sections 9.01, 9.03 (but only to the extent
resulting from the violation of one or more of Sections 8.08, 8.09, 8.10, and
8.11 of the Credit Agreement), 9.04(i)(x), 9.04(ii) or 9.05 of the Credit
Agreement (each of the foregoing Events of Default, a "Financial Covenant
Event of Default") until, and shall be paid by Holdings to S&H on, the
earliest to occur of (x) the first date after receipt of such Notice upon
which no Financial Covenant Event of Default to which the Notice related or
otherwise known to S&H or Holdings, shall be in existence (and so long as no
such Financial Covenant Event of Default would be in existence after giving
effect to the payment of such unpaid portion of the Quarterly Management
Fee), (y) the first date occurring 180 days or more after receipt by Silgan
of a notice stating that no Event of Default exists under Section 9.01 of the
Credit Agreement, or (z) the date that Silgan, Containers, Plastics and
California-Washington Can Corporation, a wholly owned subsidiary of
Containers, shall have paid all outstanding Obligations (as such term is
defined under the Credit Agreement). In the event that a Notice is delivered
by the Agent, Holdings shall pay to S&H that portion of any unpaid Quarterly
Management Fee that has accrued with respect to that portion of such calendar
quarter prior to the occurrence of any Financial Covenant Event of Default to
which such Notice relates.
(c) Nothing contained in Paragraph 2(b) shall prevent the Agent
from giving successive Notices of the type described in Paragraph 2(b) (in
which case the rules set forth in Paragraph 2(b) shall apply to, and the time
periods set forth therein shall begin to run on, the date of such subsequent
Notice); provided that only one Notice relating to a single Financial
Covenant Event of Default and all other Financial Covenant Events of Default
in existence at the date of the giving of any such Notice may be given.
Notwithstanding anything to the contrary stated herein, if at any time after
the giving of Notice by the Agent to Silgan, S&H shall certify to Holdings
that all Financial Covenant Events of Default to which such Notice relates
have been cured or waived, and that S&H knows of no other Financial Covenant
Event of Default then in existence, then Holdings shall, unless it knows of
the existence of a Financial Covenant Event of Default which has not yet been
cured or waived, pay to S&H any accrued and unpaid Quarterly Management Fee
or portion thereof in the manner set forth in Paragraph 2(h) hereof. S&H
shall not be required to deliver any such certification to Holdings upon the
occurrence of the dates or events set forth in clauses (y) or (z) of
Paragraph 2(b), and promptly after the occurrence of such date or event,
Holdings will pay to S&H any accrued and unpaid Quarterly Management Fee or
portion thereof.
(d) In addition to the management fees payable pursuant to
Paragraph 2(a) hereof, Holdings shall pay to S&H on the closing date of the
IPO (as defined in the Organization Agreement) an amount, if any (the
"Additional Amount"), equal to the sum of the present values, calculated for
each year or portion thereof, of (i) the amount of the annual management fee
for such year or portion thereof that otherwise would have been payable to
S&H for each such year or portion thereof for the period beginning as of the
time of the IPO and ending on June 30, 1999 (the "Remaining Term") pursuant
to Paragraph 2(a) hereof but for the occurrence of the IPO, minus (ii) the
amount payable to S&H for the Remaining Term at the rate of $2.0 million per
year. S&H may elect to have up to two-thirds (but no more than two-thirds)
of the Additional Amount paid to S&H in cash with the balance of the
Additional Amount being paid in fully-vested shares of common stock of
Holdings, valued for the purposes of such payment at the public offering
price per share in the IPO. The amounts described in clause (i) of this
Paragraph 2(d) will be calculated based upon S&H's good faith projections of
Holdings' EBDIT for each such year (or portion thereof) during the Remaining
Term (the "Estimated Fees"), which projections shall be made on a basis
consistent with S&H's past projections. The difference between the amount of
Estimated Fees for any particular year and $2 million shall be discounted to
present value at the time of the IPO using a discount rate of eight percent
(8%) per annum, compounded annually.
(e) For any given year during the term of this Agreement, the
Scheduled Amount and the Maximum Amount for such year will be the amounts set
forth in Schedule I hereto.
(f) In addition to the fees referred to in Paragraphs 2(a) and
2(d), Holdings shall also reimburse S&H in an amount equal to all out-of-
pocket expenses paid by S&H in providing the Services hereunder including
fees and expenses paid to consultants, subcontractors and other third
parties, in connection with such services. Such expenses shall be paid by
Holdings to S&H on a monthly basis.
(g) (i) Not later than fifteen (15) days after the end of each
calendar month during the term hereof with respect to the Monthly Management
Fee and (ii) not later than thirty (30) days after the end of each full
calendar quarter during the term hereof with respect to the Quarterly
Management Fee, S&H shall furnish Holdings with a bill for an amount equal to
the Monthly Management Fee and the Quarterly Management Fee, respectively,
then owing with respect to periods ended on or before the end of such
calendar month or such calendar quarter.
(h) Each bill furnished to Holdings hereunder shall be paid in
full within thirty (30) days of the receipt of such bill, except that any
accrued and unpaid Quarterly Management Fee or portion thereof shall be paid
on the earliest date on which such payment is permitted to be made pursuant
to Paragraphs 2(a), 2(b) and 2(c) hereof. All payments of such bills shall
be sent to:
S&H Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
or to such other address as S&H may specify from time to time by written
notice to Holdings.
(i) All fees and expenses paid to S&H by Silgan, Containers and
Plastics, pursuant to their respective Amended and Restated Management
Services Agreements with S&H, each dated as of the date hereof (collectively,
the "Subsidiary Agreements"), shall be credited to the fees and expenses
referred to in Paragraphs 2(a), 2(d) and 2(f) hereof.
(j) For purposes of this Section 2, EBDIT shall mean, for any
period, the consolidated net income of Holdings and its subsidiaries, before
interest expense and provision for income taxes and without giving effect to
any extraordinary non-cash gains or extraordinary non-cash losses and any
adjustments resulting from changes in the value of employee stock options
and/or stock appreciation rights, and adjusted by adding thereto (i) the
amount of any fees and expenses paid pursuant to this Agreement or the
Subsidiary Agreements, (ii) the amount of all charges and expenses incurred
in connection with the Refinancing (as defined in Amendment No. 5 to
Holdings' Registration Statement on Form S-1, dated June 23, 1992, relating
to Holdings' Senior Discount Debentures due 2002 (Commission File No. 33-
47632))(which charges and expenses have been charged against the consolidated
net income of Holdings or its subsidiaries), and (iii) the amount of all
amortization of intangibles, covenants not to compete, goodwill and debt
financing costs and all depreciation (which amortization and depreciation
have been charged against the consolidated net income of Holdings and its
subsidiaries, before interest expense), computed in accordance with generally
accepted accounting principles.
3. Direct Expenses.
It is understood that the consideration to be paid by Holdings to S&H
for Services hereunder shall not be in lieu of, and that Holdings shall be
directly liable for, direct expenses incurred by Holdings, or by S&H on
Holdings' behalf (other than the out-of-pocket expenses billed to Holdings by
S&H pursuant to Paragraph 2(f) hereof), for services rendered to Holdings by
third parties, including, but not limited to, legal and accounting fees and
insurance premiums. Holdings shall pay any compensation (including employee
benefit costs and any related out-of-pocket expenses) to officers and other
employees of Holdings who provide substantially full-time services to
Holdings, other than Silver and Horrigan who shall receive no salaries,
notwithstanding that said officers and other employees may simultaneously be
officers or employees of S&H or one of its subsidiaries or Affiliates.
4. Term.
(a) The term of this Agreement shall commence on the date hereof
and shall continue until the earliest of: (i) the completion of an IPO; (ii)
June 30, 1999; (iii) at the option of Holdings, the occurrence of an Event of
Default pursuant to Paragraph 5(a) hereof; (iv) at MS Equity's option, the
occurrence of any Event of Default other than an Event of Default pursuant to
Paragraph 5(a) hereof; or (v) a Change of Control (as defined in the Restated
Certificate of Incorporation of Holdings in effect from time to time) shall
take place. The Monthly Management Fee and the Quarterly Management Fee will
cease to accrue on the date this Agreement is terminated pursuant to this
Paragraph 4(a).
(b) If any default specified in Paragraphs 5(b)-(f) hereof occurs
or exists with respect to Holdings as a result of an Event of Force Majeure
(as such term is defined in Paragraph 7 hereof) this Agreement shall continue
in full force and effect except that S&H shall be entitled only to the
Monthly Management Fee.
5. Events of Default.
Any one of the following defaults shall constitute an Event of Default
(other than by reason of an Event of Force Majeure in the case of each of
Paragraphs 5(a)-(f)):
(a) The failure or refusal of S&H to comply with or perform its
obligations under this Agreement if such failure or refusal continues
unremedied for more than sixty (60) days after written notice of the
existence of such failure or refusal shall have been given to the failing or
refusing party by any of the parties;
(b) S&H or Holdings is declared insolvent or bankrupt by any court
of competent jurisdiction, or a voluntary petition in bankruptcy is filed in
any court of competent jurisdiction by either of them;
(c) An involuntary petition in bankruptcy is filed in any court of
competent jurisdiction against S&H or Holdings and within forty-five (45)
days thereafter shall not have been dismissed or stayed (and, in the event of
any such stay, such stay shall not have been set aside and the petition
dismissed within forty-five (45) days after the stay shall have been
granted);
(d) A trustee or receiver is appointed for S&H or Holdings and
remains undischarged for more than forty-five (45) days after being
appointed;
(e) A proceeding seeking a reorganization, arrangement,
liquidation or dissolution of S&H or Holdings is instituted in a court of
competent jurisdiction and remains undismissed for more than forty-five (45)
days after being instituted;
(f) S&H or Holdings voluntarily seeks any such reorganization or
arrangement or makes an assignment for the benefit of creditors; or
(g) Death or permanent disability of both Horrigan and Silver.
For the purposes of this Agreement, "permanent disability" shall mean the
inability of Horrigan or Silver, as the case may be, by reason of illness or
injury to perform substantially all of his duties as Chairman of the Board or
as President of Holdings (or in performing his duties in any other office in
Holdings or any of its respective Affiliates to which he may be duly
appointed) during any continuous period of one hundred eighty (180) days.
6. Limitation of Liability; Indemnification.
(a) S&H and its Affiliates shall not be liable to Holdings, to any
director, officer, stockholder, consultant or subcontractor of Holdings, or
to any person or entity controlling Holdings or any such stockholder,
consultant or subcontractor of Holdings, for any cost, damage, expense or
loss, including without limitation any special, indirect, consequential or
punitive damages, of Holdings or any such officer, director, stockholder,
consultant, subcontractor or controlling person or entity, allegedly arising
out of (i) S&H's and/or its Affiliates' failure to perform any services for
Holdings hereunder or the misperformance of any such service, or (ii)
Holdings' or such officer's, director's, stockholder's, consultant's,
subcontractor's or controlling person's or entity's reliance on any advice or
data S&H and its Affiliates may provide to Holdings pursuant to this
Agreement.
(b) Holdings shall indemnify S&H and each of its Affiliates,
officers, directors, employees, consultants and subcontractors, and any
Person or entity controlling S&H and each of its Affiliates or any such
consultant or subcontractor and shall hold S&H and each of its Affiliates and
each such officer, director, employee, consultant, subcontractor and
controlling person or entity, harmless against any damage, loss, cost or
expense (including court costs and reasonable attorneys' fees which S&H and
its Affiliates or any such officer, director, employee, consultant,
subcontractor or controlling Person or entity, may sustain or incur by reason
of any claim, demand, suit or recovery by any Person or entity arising in
connection with this Agreement or out of S&H's or its Affiliates', or any
consultant's or subcontractor's, performance of S&H's obligations under this
Agreement); provided, however, that no officer of S&H may benefit from the
foregoing indemnity in the event of his serious criminal conduct or in the
event that the Required Majority (as defined in the Restated Certificate of
Incorporation of Holdings) of the Board of Directors of Holdings so decides,
with MS Equity agreeing to cause the Class B Directors (as defined in the
Restated Certificate of Incorporation) to vote in accordance with the Class A
Directors (as defined in the Restated Certificate of Incorporation) on such
matter.
(c) Nothing contained in this Section shall limit or affect
Holdings' rights to submit any matter to arbitration as set forth herein.
(d) The manner of any indemnification under this Agreement shall
be in accordance with Section 9.1 of the Organization Agreement.
(e) No salaried officer or employee of S&H shall have any
liability to MS Equity or any Affiliate or Associate thereof arising in
connection with this Agreement nor will such entities make any claim seeking
damages arising out of such individual's performance as an officer or
employee of Holdings, except for performance which could constitute serious
criminal conduct or, in the case of an officer or employee of Holdings, as
otherwise approved by the Required Majority of the Board of Directors of
Holdings, with MS Equity agreeing to cause the Class B Directors to vote in
accordance with the Class A Directors on such matter.
7. Force Majeure.
The term "Event of Force Majeure" as used herein shall mean any failure
of a party to perform any of its obligations hereunder if such failure is due
to circumstances beyond its control, including but not limited to, any
requisition by any government authority, act of war, strike, boycott,
lockout, picketing, riot, sabotage, civil commotion, insurrection, epidemic,
disease, act of God, fire, flood, accident, explosion, earthquake, storm,
failure of public utilities or common carriers, mechanical failure, embargo,
or prohibition imposed by any governmental body or agency having authority
over the party, which would have constituted an Event of Default but for the
fact that such events constituted an Event of Force Majeure. The party
affected by an Event of Force Majeure shall give prompt notice thereof to the
other parties hereto and each party shall use its best efforts to minimize
the duration and consequences of, and to eliminate, any such Event of Force
Majeure. At such time as an Event of Force Majeure no longer exists, the
respective obligations of the parties hereto shall be reinstated and this
Agreement shall continue in full force and effect.
8. Insurance.
S&H agrees that for the term of this Agreement it shall cause Holdings
to obtain and maintain insurance for such risks and in such amounts similar
to companies of comparable size which are engaged in similar business
activities, provided that if Holdings maintains a level of insurance which
complies with the applicable terms of the Credit Agreement, S&H shall be
deemed to be in compliance with the provisions of this paragraph.
9. Definitions.
Terms not defined herein which are defined in the Organization Agreement
shall have the meanings ascribed to them therein.
10. Notices.
All notices and other communications required by or specifically
provided for in this Agreement shall be in writing and shall be deemed to
have been given (a) when delivered in person, (b) when sent by telex or
telecopier with answerback received, or (c) seventy-two (72) hours after
having been deposited in the U.S. mails, certified mail with return receipt
requested and postage prepaid, and in any case addressed to the party for
which it is intended at that party's address as set forth below, or at such
other address as the addressee shall have designated by notice hereunder to
the other party.
If to S&H:
S&H Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
If to Holdings:
Silgan Holdings Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
If a notice is sent to any of the above, a copy shall be sent to each of
the following:
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
P.O. Box 6760
Stamford, CT 06904-6760
Attention: Frode Jensen, III, Esq.
The Morgan Stanley Leveraged
Equity Fund II, L.P.
Morgan Stanley Leveraged Equity
Fund II, Inc., General Partner
1251 Avenue of the Americas
New York, NY 10020
Attention: Robert H. Niehaus
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: John R. Ettinger, Esq.
Any notice or request sent by telecopier or similar facsimile
telecommunication shall be confirmed promptly by the sending of a copy of
such notice or request to the addressee thereof by prepaid certified mail,
return receipt requested.
11. Amendment; Assignment; Binding Effect.
This Agreement may be amended or modified only by a written instrument
signed by the parties hereto. No party shall assign or transfer this
Agreement, in whole or in part, or any of such party's rights or obligations
hereunder, to any other person or entity without the prior written consent of
the other parties, except that S&H may transfer or assign all of its rights
and obligations hereunder to any entity directly or indirectly succeeding to
S&H by merger, consolidation or reorganization. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective permitted assigns.
12. Waiver; Severability.
The failure of a party to insist in any instance upon the strict and
punctual performance of any provision of this Agreement shall not constitute
a continuing waiver of such provision. No party shall be deemed to have
waived any right, power, or privilege under this Agreement or any provisions
hereof unless such waiver shall have been in writing and duly executed by the
party to be charged with such waiver, and such waiver shall be a waiver only
with respect to the specific instance involved and shall in no way impair the
rights of the waiving party or the obligations of any other party in any
other respect or at any other time. If any provision of this Agreement shall
be waived, or be invalid, illegal or unenforceable, the remaining provisions
of this Agreement shall be unaffected thereby and shall remain binding and in
full force and effect.
13. Relationship of the Parties.
In all matters relating to this Agreement, each party hereto shall be
solely responsible for the acts of its employees, and employees of one party
shall not be considered employees of the other party. Except as otherwise
provided herein, no party shall have any right, or authority to create any
obligation, express or implied, on behalf of any other party.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to its conflict of laws
rules and laws.
15. Entire Agreement.
This Agreement, the Organization Agreement and the agreements and
documents executed and delivered with respect thereto, constitute the entire
Agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, either oral
or written, with respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
S&H INC.
By: /s/ R. Philip Silver
---------------------------------
Title: Chairman and Chief Executive
Officer
SILGAN HOLDINGS INC.
By: /s/ R. Philip Silver
--------------------------------
Title: President
Accepted and Agreed to:
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.
By: MORGAN STANLEY LEVERAGED
EQUITY FUND II, INC. (General Partner)
By: /s/ Robert H. Niehaus
-------------------------------
Name: Robert H. Niehaus
Title: Director
SCHEDULE I
(000's omitted)
Scheduled Amount Maximum Amount
---------------- --------------
1993 $ 65,500 1993 N/A
1994 71,500 1994 $ 90,197
1995 77,500 1995 95,758
1996 83,500 1996 98,101
1997 89,500 1997 100,504
1998 95,500 1998 102,964
1999 101,500 1999 105,488
Exhibit 5
AMENDED AND RESTATED
MANAGEMENT SERVICES AGREEMENT
This Amended and Restated Management Services Agreement (the
"Agreement") is made as of this 21st day of December, 1993 by and between S&H
INC., a Connecticut corporation ("S&H"), and SILGAN CORPORATION, a Delaware
corporation ("Silgan").
W I T N E S S E T H:
WHEREAS, S&H and Silgan have entered into the Management Services
Agreement dated June 30, 1989, as amended by Amendment No. 1 thereto dated
July 13, 1990 and Amendment No. 2 thereto dated as of June 29, 1992 (as
amended by Amendment No. 1 and Amendment No. 2, the "Original Management
Services Agreement"), pursuant to which S&H provides general management,
supervision, administrative and other services to Silgan in accordance with
the terms of the Original Management Services Agreement;
WHEREAS, R. Philip Silver ("Silver"), D. Greg Horrigan
("Horrigan"), The Morgan Stanley Leveraged Equity Fund II, L.P. ("MS
Equity"), Bankers Trust New York Corporation, First Plaza Group Trust and
Silgan Holdings Inc. ("Holdings") are entering into an Amended and Restated
Organization Agreement dated as of the date hereof (the "Organization
Agreement") providing for, among other things, the terms governing the
relationship among the parties for the term thereof and the amendment and
restatement of the management services agreement between S&H and Holdings
dated June 30, 1989, as amended by Amendment No. 1 thereto dated July 13,
1990 and Amendment No. 2 thereto dated as of June 29, 1992;
WHEREAS, S&H also is a party to a management services agreement
dated June 30, 1989, as amended by Amendment No. 1 thereto dated July 13,
1990 and Amendment No. 2 thereto dated as of June 29, 1992 with each of
Silgan Containers Corporation, a wholly owned subsidiary of Silgan
("Containers"), and Silgan Plastics Corporation, a wholly owned subsidiary of
Silgan ("Plastics");
WHEREAS, S&H and each of Holdings, Containers and Plastics are
entering into an amended and restated management services agreement dated as
of the date hereof (collectively, as so amended and restated, the "Affiliate
Management Services Agreements"); and
WHEREAS, S&H and Silgan desire to amend and restate hereby the
Original Management Services Agreement in order to make certain changes in
light of the terms of the Affiliate Management Services Agreements.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, S&H and Silgan agree as follows:
1. Management Services.
(a) S&H and Silgan hereby agree that, during the period
beginning on the Closing Date (as defined in the Organization Agreement) and
continuing throughout the term hereof, S&H and its Affiliates shall provide
to Silgan general management, supervision and administrative services,
including, without limitation, the preparation of the annual and long-term
business plans, and perform such other duties and provide such other services
as Silgan shall be permitted to request of S&H pursuant to the Restated
Certificate of Incorporation or By-Laws of Holdings or pursuant to applicable
law, which power and authority Silgan hereby grants to S&H ("General
Management Services"). (The General Management Services are hereinafter
collectively referred to as the "Services" and individually as a "Service").
(b) Any Service hereunder shall be provided to Silgan only by
S&H or its Affiliates or such consultants, subcontractors or agents as may be
selected from time to time by S&H. It is understood and agreed that S&H
shall retain the services of Morgan Stanley & Co. Incorporated as financial
advisor to Silgan.
2. Fees; Payment.
(a) In consideration for General Management Services provided
by S&H to Silgan hereunder, Silgan shall pay to S&H aggregate fees or
compensation therefor (not including any related out-of-pocket expenses), (i)
on a monthly basis, five thousand dollars ($5,000) plus an amount equal to
2.475% of EBDIT (as defined in Paragraph 2(j) hereof) for such calendar month
until EBDIT for the calendar year to date has reached the Scheduled Amount
for such calendar year (as defined in Paragraph 2(e) hereof) and 1.65% of
EBDIT for such calendar month to the extent that EBDIT for the calendar year
to date exceeds the Scheduled Amount but is not greater than the Maximum
Amount (as defined in Paragraph 2(e) hereof), (the "Monthly Management Fee");
and (ii) on a quarterly basis an amount equal to 2.475% of EBDIT for such
calendar quarter until EBDIT for the calendar year to date has reached the
Scheduled Amount, and l.65% of EBDIT for such calendar quarter to the extent
that EBDIT for the calendar year to date exceeds the Scheduled Amount but is
not greater than the Maximum Amount (the "Quarterly Management Fee").
(b) Such Quarterly Management Fee shall continue to accrue,
but shall not be paid, to S&H by Silgan in the event that, and from the date
on which, Silgan shall have received written notice ("Notice") from the Agent
(as defined below) that an Event of Default (as such term is defined in the
Credit Agreement, dated as of December 21, 1993, among Silgan, Containers,
Plastics, the financial institutions parties thereto, Bankers Trust Company,
as Agent (the "Agent"), and Bank of America National Trust and Savings
Association, as Co-Agent, as amended, supplemented or modified from time to
time (the "Credit Agreement")) exists under any of Sections 9.01, 9.03 (but
only to the extent resulting from the violation of one or more of Sections
8.08, 8.09, 8.10, and 8.11 of the Credit Agreement), 9.04(i)(x), 9.04(ii) or
9.05 of the Credit Agreement (each of the foregoing Events of Default, a
"Financial Covenant Event of Default") until, and shall be paid by Silgan to
S&H on, the earliest to occur of (x) the first date after receipt of such
Notice upon which no Financial Covenant Event of Default to which the Notice
related or otherwise known to S&H or Silgan, shall be in existence (and so
long as no such Financial Covenant Event of Default would be in existence
after giving effect to the payment of such unpaid portion of the Quarterly
Management Fee), (y) the first date occurring 180 days or more after receipt
by Silgan of a notice stating that no Event of Default exists under Section
9.01 of the Credit Agreement, or (z) the date that Silgan, Containers,
Plastics and California-Washington Can Corporation, a wholly owned subsidiary
of Containers, shall have paid all outstanding Obligations (as such term is
defined under the Credit Agreement). In the event that a Notice is delivered
by the Agent, Silgan shall pay to S&H that portion of any unpaid Quarterly
Management Fee that has accrued with respect to that portion of such calendar
quarter prior to the occurrence of any Financial Covenant Event of Default to
which such Notice relates.
(c) Nothing contained in Paragraph 2(b) shall prevent the
Agent from giving successive Notices of the type described in Paragraph 2(b)
(in which case the rules set forth in Paragraph 2(b) shall apply to, and the
time periods set forth therein shall begin to run on, the date of such
subsequent Notice), provided that only one Notice relating to a single
Financial Covenant Event of Default and all other Financial Covenant Events
of Default in existence at the date of the giving of any such Notice may be
given. Notwithstanding anything to the contrary stated herein, if at any
time after the giving of Notice by the Agent to Silgan, S&H shall certify to
Silgan that all Financial Covenant Events of Default to which such Notice
relates have been cured or waived, and that S&H knows of no other Financial
Covenant Event of Default then in existence, then Silgan shall, unless it
knows of the existence of a Financial Covenant Event of Default which has not
yet been cured or waived, pay to S&H any accrued and unpaid Quarterly
Management Fee or portion thereof in the manner set forth in Paragraph 2(h)
hereof. S&H shall not be required to deliver any such certification to
Silgan upon the occurrence of the dates or events set forth in clauses (y) or
(z) of Paragraph 2(b), and promptly after the occurrence of such date or
event, Silgan will pay to S&H any accrued and unpaid Quarterly Management Fee
or portion thereof.
(d) In addition to the management fees payable pursuant to
Paragraph 2(a) hereof, Silgan shall pay to S&H on the closing date of the IPO
(as defined in the Organization Agreement) an amount, if any (the "Additional
Amount"), equal to the sum of the present values, calculated for each year or
portion thereof, of (i) the amount of the annual management fee for such year
or portion thereof that otherwise would have been payable to S&H for each
such year or portion thereof for the period beginning as of the time of the
IPO and ending on June 30, 1999 (the "Remaining Term") pursuant to Paragraph
2(a) hereof but for the occurrence of the IPO, minus (ii) the amount payable
to S&H for the Remaining Term at the rate of $2.0 million per year. S&H may
elect to have up to two-thirds (but no more than two-thirds) of the
Additional Amount paid to S&H in cash with the balance of the Additional
Amount being paid in fully-vested shares of common stock of Holdings, valued
for the purposes of such payment at the public offering price per share in
the IPO. The amounts described in clause (i) of this Paragraph 2(d) will be
calculated based upon S&H's good faith projections of Holdings' EBDIT for
each such year (or portion thereof) during the Remaining Term (the "Estimated
Fees"), which projections shall be made on a basis consistent with S&H's past
projections. The difference between the amount of Estimated Fees for any
particular year and $2 million shall be discounted to present value at the
time of the IPO using a discount rate of eight percent (8%) per annum,
compounded annually.
(e) For any given year during the term of this Agreement, the
Scheduled Amount and the Maximum Amount for such year will be the amounts set
forth in Schedule I hereto.
(f) In addition to the fees referred to in Paragraphs 2(a)
and 2(d), Silgan shall also reimburse S&H in an amount equal to all out-of-
pocket expenses paid by S&H in providing the Services hereunder, including
fees and expenses paid to consultants, subcontractors and other third
parties, in connection with such Services. Such expenses shall be paid by
Silgan to S&H on a monthly basis.
(g) (i) Not later than fifteen (15) days after the end of
each calendar month during the term hereof with respect to the Monthly
Management Fee and (ii) not later than thirty (30) days after the end of each
full calendar quarter during the term hereof with respect to the Quarterly
Management Fee, S&H shall furnish Silgan with a bill for an amount equal to
the Monthly Management Fee and the Quarterly Management Fee, respectively,
then owing with respect to periods ended on or before the end of such
calendar month or such calendar quarter.
(h) Each bill furnished to Silgan hereunder shall be paid in
full within thirty (30) days of the receipt of such bill, except that any
accrued and unpaid Quarterly Management Fee or portion thereof shall be paid
on the earliest date on which such payment is permitted to be made pursuant
to Paragraphs 2(a), 2(b) and 2(c) hereof. All payments of such bills shall
be sent to:
S&H Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
or to such other address as S&H may specify from time to time by written
notice to Silgan.
(i) All fees and expenses paid to S&H by Holdings, Containers
and Plastics, pursuant to their respective Affiliate Management Services
Agreements with S&H, shall be credited to the fees and expenses referred to
in Paragraphs 2(a), 2(d) and 2(f) hereof.
(j) For purposes of this Section 2, EBDIT shall mean, for any
period, the consolidated net income of Holdings and its subsidiaries, before
interest expense and provision for income taxes and without giving effect to
any extraordinary non-cash gains or extraordinary non-cash losses and any
adjustments resulting from changes in the value of employee stock options
and/or stock appreciation rights, and adjusted by adding thereto (i) the
amount of any fees and expenses paid pursuant to this Agreement or the
Affiliate Management Services Agreements, (ii) the amount of all charges and
expenses incurred in connection with the Refinancing (as defined in Amendment
No. 5 to Holdings' Registration Statement on Form S-1, dated June 23, 1992,
relating to Holdings' Senior Discount Debentures due 2002 (Commission File
No. 33-47632)) (which charges and expenses have been charged against the
consolidated net income of Holdings or its subsidiaries), and (iii) the
amount of all amortization of intangibles, covenants not to compete, goodwill
and debt financing costs and all depreciation (which amortization and
depreciation have been charged against the consolidated net income of
Holdings and its subsidiaries, before interest expense), computed in
accordance with generally accepted accounting principles.
3. Direct Expenses.
It is understood that the consideration to be paid by Silgan to S&H
for Services hereunder shall not be in lieu of, and that Silgan shall be
directly liable for, direct expenses incurred by Silgan, or by S&H on
Silgan's behalf (other than the out-of-pocket expenses billed to Silgan by
S&H pursuant to Paragraph 2(f) hereof), for services rendered to Silgan by
third parties, including, but not limited to, legal and accounting fees and
insurance premiums. Silgan shall pay any compensation (including employee
benefit costs and any related out-of-pocket expenses) to officers and other
employees of Silgan who provide substantially full-time services to Silgan
other than Silver and Horrigan who shall receive no salaries, notwithstanding
that said officers and other employees may simultaneously be officers or
employees of S&H or one of its subsidiaries or Affiliates.
4. Term.
(a) The term of this Agreement shall commence on the date
hereof and shall continue until the earliest of: (i) the completion of an
IPO; (ii) June 30, 1999; (iii) at the option of Silgan, the occurrence of an
Event of Default pursuant to Paragraph 5(a) hereof; (iv) at MS Equity's
option, the occurrence of any Event of Default other than an Event of Default
pursuant to Paragraph 5(a) hereof; or (v) a Change of Control (as defined in
the Restated Certificate of Incorporation of Holdings in effect from time to
time) shall take place. The Monthly Management Fee and the Quarterly
Management Fee will cease to accrue on the date this Agreement is terminated
pursuant to this Paragraph 4(a).
(b) If any default specified in Paragraphs 5(b)-(f) hereof
occurs or exists with respect to Holdings as a result of an Event of Force
Majeure (as such term is defined in Paragraph 7 hereof), this Agreement shall
continue in full force and effect except that S&H shall be entitled only to
the Monthly Management Fee.
5. Events of Default.
Any one of the following defaults shall constitute an Event of Default
(other than by reason of an Event of Force Majeure in the case of each of
Paragraphs 5(a)-(f)):
(a) The failure or refusal of S&H to comply with or perform
its obligations under this Agreement if such failure or refusal continues
unremedied for more than sixty (60) days after written notice of the
existence of such failure or refusal shall have been given to the failing or
refusing party by any of the parties;
(b) S&H or Holdings is declared insolvent or bankrupt by any
court of competent jurisdiction, or a voluntary petition in bankruptcy is
filed in any court of competent jurisdiction by either of them;
(c) An involuntary petition in bankruptcy is filed in any
court of competent jurisdiction against S&H or Holdings and within forty-five
(45) days thereafter shall not have been dismissed or stayed (and, in the
event of any such stay, such stay shall not have been set aside and the
petition dismissed within forty-five (45) days after the stay shall have been
granted);
(d) A trustee or receiver is appointed for S&H or Holdings
and remains undischarged for more than forty-five (45) days after being
appointed;
(e) A proceeding seeking a reorganization, arrangement,
liquidation or dissolution of S&H or Holdings is instituted in a court of
competent jurisdiction and remains undismissed for more than forty-five (45)
days after being instituted;
(f) S&H or Holdings voluntarily seeks any such reorganization
or arrangement or makes an assignment for the benefit of creditors; or
(g) Death or permanent disability of both Horrigan and
Silver. For the purposes of this Agreement, "permanent disability" shall
mean the inability of Horrigan or Silver, as the case may be, by reason of
illness or injury to perform substantially all of his duties as Chairman of
the Board or as President of Holdings (or in performing his duties in any
other office in Holdings or any of its respective Affiliates to which he may
be duly appointed) during any continuous period of one hundred eighty (180)
days.
6. Limitation of Liability; Indemnification.
(a) S&H and its Affiliates shall not be liable to Silgan, to
any director, officer, stockholder, consultant or subcontractor of Silgan, or
to any person or entity controlling Silgan or any such stockholder,
consultant or subcontractor of Silgan, for any cost, damage, expense or loss,
including without limitation any special, indirect, consequential or punitive
damages, of Silgan or any such officer, director, stockholder, consultant,
subcontractor or controlling person or entity, allegedly arising out of (i)
S&H's and/or its Affiliates' failure to perform any services for Silgan
hereunder or the misperformance of any such service, or (ii) Silgan's or such
officer's, director's, stockholder's, consultant's, subcontractor's or
controlling person's or entity's reliance on any advice or data S&H and its
Affiliates may provide to Silgan pursuant to this Agreement.
(b) Silgan shall indemnify S&H and each of its Affiliates,
officers, directors, employees, consultants and subcontractors, and any
Person or entity controlling S&H and each of its Affiliates or any such
consultant or subcontractor and shall hold S&H and each of its Affiliates and
each such officer, director, employee, consultant, subcontractor and
controlling Person or entity, harmless against any damage, loss, cost or
expense (including court costs and reasonable attorneys' fees which S&H and
its Affiliates or any such officer, director, employee, consultant,
subcontractor or controlling Person or entity, may sustain or incur by reason
of any claim, demand, suit or recovery by any Person or entity arising in
connection with this Agreement or out of S&H's or its Affiliates', or any
consultant's or subcontractor's, performance of S&H's obligations under this
Agreement), provided, however, that no officer of S&H may benefit from the
foregoing indemnity in the event of his serious criminal conduct or in the
event that the Required Majority (as defined in the Restated Certificate of
Incorporation of Holdings) of the Board of Directors of Holdings so decides,
with MS Equity agreeing to cause the Class B Directors (as defined in the
Restated Certificate of Incorporation of Holdings) to vote in accordance with
the Class A Directors (as defined in the Restated Certificate of
Incorporation of Holdings) on such matter.
(c) Nothing contained in this Section shall limit or affect
Silgan's rights to submit any matter to arbitration.
(d) The manner of any indemnification under this Agreement
shall be in accordance with Section 9.1 of the Organization Agreement.
(e) No salaried officer or employee of S&H shall have any
liability to MS Equity or any Affiliate or Associate thereof arising in
connection with this Agreement nor will such entities make any claim seeking
damages arising out of such individual's performance as an officer or
employee of Holdings, except for performance which could constitute serious
criminal conduct or, in the case of an officer or employee of Holdings, as
otherwise approved by the Required Majority of the Board of Directors of
Holdings, with MS Equity agreeing to cause the Class B Directors to vote in
accordance with the Class A Directors on such matter.
7. Force Majeure.
The term "Event of Force Majeure" as used herein shall mean any
failure of a party to perform any of its obligations hereunder if such
failure is due to circumstances beyond its control, including but not limited
to, any requisition by any government authority, act of war, strike, boycott,
lockout, picketing, riot, sabotage, civil commotion, insurrection, epidemic,
disease, act of God, fire, flood, accident, explosion, earthquake, storm,
failure of public utilities or common carriers, mechanical failure, embargo,
or prohibition imposed by any governmental body or agency having authority
over the party, which would have constituted an Event of Default but for the
fact that such events constituted an Event of Force Majeure. The party
affected by an Event of Force Majeure shall give prompt notice thereof to the
other parties hereto and each party shall use its best efforts to minimize
the duration and consequences of, and to eliminate, any such Event of Force
Majeure. At such time as an Event of Force Majeure no longer exists, the
respective obligations of the parties hereto shall be reinstated and this
Agreement shall continue in full force and effect.
8. Insurance.
S&H agrees that for the term of this Agreement it shall cause
Silgan to obtain and maintain insurance for such risks and in such amounts
similar to companies of comparable size which are engaged in similar business
activities, provided, that if Silgan maintains a level of insurance which
complies with the applicable terms of the Credit Agreement, S&H shall be
deemed to be in compliance with the provisions of this paragraph.
9. Definitions.
Terms not defined herein which are defined in the Organization
Agreement shall have the meanings ascribed to them therein.
10. Notices.
All notices and other communications required by or specifically
provided for in this Agreement shall be in writing and shall be deemed to
have been given (a) when delivered in person, (b) when sent by telex or
telecopier with answerback received, or (c) seventy-two (72) hours after
having been deposited in the U.S. mails, certified mail with return receipt
requested and postage prepaid, and in any case addressed to the party for
which it is intended at that party's address as set forth below, or at such
other address as the addressee shall have designated by notice hereunder to
the other party.
If to S&H:
S&H Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
If to Silgan:
Silgan Corporation
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
If a notice is sent to any of the above, a copy shall be sent to each of
the following:
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
P.O. Box 6760
Stamford, CT 06904-6760
Attention: Frode Jensen, III, Esq.
The Morgan Stanley Leveraged Equity
Fund II, L.P.
Morgan Stanley Leveraged Equity
Fund II, Inc., General Partner
1251 Avenue of the Americas
New York, NY 10020
Attention: Robert H. Niehaus
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: John R. Ettinger, Esq.
Any notice or request sent by telecopier or similar facsimile
telecommunication shall be confirmed promptly by the sending of a copy of
such notice or request to the addressee thereof by prepaid certified mail,
return receipt requested.
11. Amendment; Assignment; Binding Effect.
This Agreement may be amended or modified only by a written
instrument signed by the parties hereto. No party shall assign or transfer
this Agreement, in whole or in part, or any of such party's rights or
obligations hereunder, to any other person or entity without the prior
written consent of the other parties, except that S&H may transfer or assign
all of its rights and obligations hereunder to any entity directly or
indirectly succeeding to S&H by merger, consolidation or reorganization. This
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted assigns.
12. Waiver; Severability.
The failure of a party to insist in any instance upon the strict
and punctual performance of any provision of this Agreement shall not
constitute a continuing waiver of such provision. No party shall be deemed
to have waived any right, power, or privilege under this Agreement or any
provisions hereof unless such waiver shall have been in writing and duly
executed by the party to be charged with such waiver, and such waiver shall
be a waiver only with respect to the specific instance involved and shall in
no way impair the rights of the waiving party or the obligations of any other
party in any other respect or at any other time. If any provision of this
Agreement shall be waived, or be invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain binding and in full force and effect.
13. Relationship of the Parties.
In all matters relating to this Agreement, each party hereto shall
be solely responsible for the acts of its employees, and employees of one
party shall not be considered employees of the other party. Except as
otherwise provided herein, no party shall have any right, or authority to
create any obligation, express or implied, on behalf of any other party.
14. Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to its conflict
of laws rules and laws.
15. Entire Agreement; Termination of Original Management Services
Agreement.
This Agreement, the Organization Agreement and the agreements and
documents executed and delivered with respect thereto constitute the entire
Agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, either oral
or written, with respect thereto. Upon the execution and delivery of this
Agreement, the Original Management Services Agreement shall be terminated and
shall be of no effect whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
S&H INC.
By: /s/ D. Greg Horrigan
---------------------------------
Title: President
SILGAN CORPORATION
By: /s/ Harley Rankin, Jr.
---------------------------------
Title: Executive Vice President and
Chief Financial Officer
Accepted and Agreed to:
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.
By: MORGAN STANLEY LEVERAGED
EQUITY FUND II, INC. (General Partner)
By: /s/ Robert H. Niehaus
---------------------------
Name: Robert H. Niehaus
Title: Director
SCHEDULE I
(000's Omitted)
Scheduled Amount Maximum Amount
----------------- ---------------
1993 $ 65,500 1993 N/A
1994 71,500 1994 $ 90,197
1995 77,500 1995 95,758
1996 83,500 1996 98,101
1997 89,500 1997 100,504
1998 95,500 1998 102,964
1999 101,500 1999 105,488
Exhibit 6
AMENDED AND RESTATED
MANAGEMENT SERVICES AGREEMENT
This Amended and Restated Management Services Agreement (the
"Agreement") is made as of this 21st day of December, 1993 by and between S&H
INC., a Connecticut corporation ("S&H"), and SILGAN CONTAINERS CORPORATION, a
Delaware corporation ("Containers").
W I T N E S S E T H:
WHEREAS, S&H and Containers have entered into the Management
Services Agreement dated June 30, 1989, as amended by Amendment No. 1 thereto
dated July 13, 1990 and Amendment No. 2 thereto dated as of June 29, 1992 (as
amended by Amendment No. 1 and Amendment No. 2, the "Original Management
Services Agreement"), pursuant to which S&H provides general management,
supervision, administrative and other services to Containers in accordance
with the terms of the Original Management Services Agreement;
WHEREAS, R. Philip Silver ("Silver"), D. Greg Horrigan
("Horrigan"), The Morgan Stanley Leveraged Equity Fund II, L.P. ("MS
Equity"), Bankers Trust New York Corporation, First Plaza Group Trust and
Silgan Holdings Inc. ("Holdings") are entering into an Amended and Restated
Organization Agreement dated as of the date hereof (the "Organization
Agreement") providing for, among other things, the terms governing the
relationship among the parties for the term thereof and the amendment and
restatement of the management services agreement between S&H and Holdings
dated June 30, 1989, as amended by Amendment No. 1 thereto dated July 13,
1990 and Amendment No. 2 thereto dated as of June 29, 1992;
WHEREAS, S&H also is a party to a management services agreement
dated June 30, 1989, as amended by Amendment No. 1 thereto dated July 13,
1990 and Amendment No. 2 thereto dated as of June 29, 1992 with each of
Silgan Corporation, the parent holding company of Containers ("Silgan"), and
Silgan Plastics Corporation, a wholly owned subsidiary of Silgan
("Plastics");
WHEREAS, S&H and each of Holdings, Silgan and Plastics are entering
into an amended and restated management services agreement dated as of the
date hereof (collectively, as so amended and restated, the "Affiliate
Management Services Agreements"); and
WHEREAS, S&H and Containers desire to amend and restate hereby the
Original Management Services Agreement in order to make certain changes in
light of the terms of the Affiliate Management Services Agreements.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, S&H and Containers agree as follows:
1. Management Services.
(a) S&H and Containers hereby agree that, during the period
beginning on the Closing Date (as defined in the Organization Agreement) and
continuing throughout the term hereof, S&H and its Affiliates shall provide
to Containers general management, supervision and administrative services,
including, without limitation, the preparation of the annual and long-term
business plans, and perform such other duties and provide such other services
as Containers shall be permitted to request of S&H pursuant to the Restated
Certificate of Incorporation or By-Laws of Holdings or pursuant to applicable
law, which power and authority Containers hereby grants to S&H ("General
Management Services"). (The General Management Services are hereinafter
collectively referred to as the "Services" and individually as a "Service").
(b) Any Service hereunder shall be provided to Containers
only by S&H or its Affiliates or such consultants, subcontractors or agents
as may be selected from time to time by S&H. It is understood and agreed
that S&H shall retain the services of Morgan Stanley & Co. Incorporated as
financial advisor to Containers.
2. Fees; Payment.
(a) In consideration for General Management Services provided
by S&H to Containers hereunder, Containers shall pay to S&H aggregate fees or
compensation therefor (not including any related out-of-pocket expenses), (i)
on a monthly basis, Containers' Proportionate Percentage (as defined below)
of five thousand dollars ($5,000) plus an amount equal to 2.475% of EBDIT (as
defined in Paragraph 2(j) hereof) for such calendar month until EBDIT for the
calendar year to date has reached the Scheduled Amount for such calendar year
(as defined in Paragraph 2(e) hereof) and 1.65% of EBDIT for such calendar
month to the extent that EBDIT for the calendar year to date exceeds the
Scheduled Amount but is not greater than the Maximum Amount (as defined in
Paragraph 2(e) hereof) (the "Monthly Management Fee"); and (ii) on a
quarterly basis, an amount equal to Containers' Proportionate Percentage of
2.475% of EBDIT for such calendar quarter until EBDIT for the calendar year
to date has reached the Scheduled Amount, and 1.65% of EBDIT for such
calendar quarter to the extent that EBDIT for the calendar year to date
exceeds the Scheduled Amount but is not greater than the Maximum Amount (the
"Quarterly Management Fee"). For purposes of this Paragraph 2,
"Proportionate Percentage" means such percentage of EBDIT for a given period
that is attributable to the results of Containers for such period.
(b) Such Quarterly Management Fee shall continue to accrue,
but shall not be paid, to S&H by Containers in the event that, and from the
date on which, Containers or Silgan shall have received written notice
("Notice") from the Agent (as defined below) that an Event of Default (as
such term is defined in the Credit Agreement, dated as of December 21, 1993,
among Silgan, Containers, Plastics, the financial institutions parties
thereto, Bankers Trust Company, as Agent (the "Agent"), and Bank of America
National Trust and Savings Association, as Co-Agent, as amended, supplemented
or modified from time to time (the "Credit Agreement")) exists under any of
Sections 9.01, 9.03 (but only to the extent resulting from the violation of
one or more of Sections 8.08, 8.09, 8.10, and 8.11 of the Credit Agreement),
9.04(i)(x), 9.04(ii) or 9.05 of the Credit Agreement (each of the foregoing
Events of Default, a "Financial Covenant Event of Default") until, and shall
be paid by Containers to S&H on, the earliest to occur of (x) the first date
after receipt of such Notice upon which no Financial Covenant Event of
Default to which the Notice related or otherwise known to S&H or Silgan,
shall be in existence (and so long as no such Financial Covenant Event of
Default would be in existence after giving effect to the payment of such
unpaid portion of the Quarterly Management Fee), (y) the first date occurring
180 days or more after receipt by Silgan of a notice stating that no Event of
Default exists under Section 9.01 of the Credit Agreement, or (z) the date
that Silgan, Containers, Plastics and California-Washington Can Corporation,
a wholly owned subsidiary of Containers, shall have paid all outstanding
Obligations (as such term is defined under the Credit Agreement). In the
event that a Notice is delivered by the Agent, Containers shall pay to S&H
that portion of any unpaid Quarterly Management Fee that has accrued with
respect to that portion of such calendar quarter prior to the occurrence of
any Financial Covenant Event of Default to which such Notice relates.
(c) Nothing contained in Paragraph 2(b) shall prevent the
Agent from giving successive Notices of the type described in Paragraph 2(b)
(in which case the rules set forth in Paragraph 2(b) shall apply to, and the
time periods set forth therein shall begin to run on, the date of such
subsequent Notice); provided that only one Notice relating to a single
Financial Covenant Event of Default and all other Financial Covenant Events
of Default in existence at the date of the giving of any such Notice may be
given. Notwithstanding anything to the contrary stated herein, if at any
time after the giving of Notice by the Agent to Silgan, S&H shall certify to
Silgan that all Financial Covenant Events of Default to which such Notice
relates have been cured or waived, and that S&H knows of no other Financial
Covenant Event of Default then in existence, then Containers shall, unless it
knows of the existence of a Financial Covenant Event of Default which has not
yet been cured or waived, pay to S&H any accrued and unpaid Quarterly
Management Fee or portion thereof in the manner set forth in Paragraph 2(h)
hereof. S&H shall not be required to deliver any such certification to
Silgan upon the occurrence of the dates or events set forth in clauses (y) or
(z) of Paragraph 2(b), and promptly after the occurrence of such date or
event, Containers will pay to S&H any accrued and unpaid Quarterly Management
Fee or portion thereof.
(d) In addition to the management fees payable pursuant to
Paragraph 2(a) hereof, Containers shall pay to S&H on the closing date of the
IPO (as defined in the Organization Agreement) an amount, if any (the
"Additional Amount"), equal to the sum of the present values, calculated for
each year or portion thereof, of (i) the amount of the annual management fee
for such year or portion thereof that otherwise would have been payable to
S&H for each such year or portion thereof for the period beginning as of the
time of the IPO and ending on June 30, 1999 (the "Remaining Term") pursuant
to Paragraph 2(a) hereof but for the occurrence of the IPO, minus (ii)
Containers' Average Proportionate Percentage (as defined below) of the amount
payable to S&H for the Remaining Term at the rate of $2.0 million per year.
S&H may elect to have up to two-thirds (but no more than two-thirds) of the
Additional Amount paid to S&H in cash with the balance of the Additional
Amount being paid in fully-vested shares of common stock of Holdings, valued
for the purposes of such payment at the public offering price per share in
the IPO. The amounts described in clause (i) of this Paragraph 2(d) will be
calculated based upon S&H's good faith projections of both Holdings' EBDIT
and Containers' Proportionate Percentage for each such year (or portion
thereof) during the Remaining Term (the "Estimated Containers Fees"), which
projections shall be made on a basis consistent with S&H's past projections.
The difference between the amount of the Estimated Containers Fees for any
particular year and $2 million shall be discounted to present value at the
time of the IPO using a discount rate of eight percent (8%) per annum,
compounded annually. For purposes of this Paragraph 2(d), "Average
Proportionate Percentage" shall mean a weighted average of the percentage of
EBDIT for each year or portion thereof during the Remaining Term that would
be attributable to the results of Containers for each such year or portion
thereof, as calculated based upon S&H's good faith projections which shall be
made on a basis consistent with S&H's past projections.
(e) For any given year during the term of this Agreement, the
Scheduled Amount and the Maximum Amount for such year will be the amounts set
forth in Schedule I hereto.
(f) In addition to the fees referred to in Paragraphs 2(a)
and 2(d), Containers shall also reimburse S&H in an amount equal to all out-
of-pocket expenses paid by S&H in providing the Services hereunder, including
fees and expenses paid to consultants, subcontractors and other third
parties, in connection with such Services. Such expenses shall be paid by
Containers to S&H on a monthly basis.
(g) (i) Not later than fifteen (15) days after the end of
each calendar month during the term hereof with respect to the Monthly
Management Fee and (ii) not later than thirty (30) days after the end of each
full calendar quarter during the term hereof with respect to the Quarterly
Management Fee, S&H shall furnish Containers with a bill for an amount equal
to the Monthly Management Fee and the Quarterly Management Fee, respectively,
then owing with respect to periods ended on or before the end of such
calendar month or such calendar quarter.
(h) Each bill furnished to Containers hereunder shall be paid
in full within thirty (30) days of the receipt of such bill, except that any
accrued and unpaid Quarterly Management Fee or portion thereof shall be paid
on the earliest date on which such payment is permitted to be made pursuant
to Paragraphs 2(a), 2(b) and 2(c) hereof. All payments of such bills shall
be sent to:
S&H Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
or to such other address as S&H may specify from time to time by written
notice to Containers.
(i) All fees and expenses paid to S&H by Holdings and Silgan,
pursuant to their respective Affiliate Management Services Agreements with
S&H, shall be credited to the fees and expenses referred to in Paragraphs
2(a), 2(d) and 2(f) hereof.
(j) For purposes of this Section 2, EBDIT shall mean, for any
period, the consolidated net income of Holdings and its subsidiaries, before
interest expense and provision for income taxes and without giving effect to
any extraordinary non-cash gains or extraordinary non-cash losses and any
adjustments resulting from changes in the value of employee stock options
and/or stock appreciation rights, and adjusted by adding thereto (i) the
amount of any fees and expenses paid pursuant to this Agreement or the
Affiliate Management Services Agreements, (ii) the amount of all charges and
expenses incurred in connection with the Refinancing (as defined in Amendment
No. 5 to Holdings' Registration Statement on Form S-1, dated June 23, 1992,
relating to Holdings' Senior Discount Debentures due 2002 (Commission File
No. 33-47632)) (which charges and expenses have been charged against the
consolidated net income of Holdings or its subsidiaries), and (iii) the
amount of all amortization of intangibles, covenants not to compete, goodwill
and debt financing costs and all depreciation (which amortization and
depreciation have been charged against the consolidated net income of
Holdings and its subsidiaries, before interest expense), computed in
accordance with generally accepted accounting principles.
3. Direct Expenses.
It is understood that the consideration to be paid by Containers to S&H
for Services hereunder shall not be in lieu of, and that Containers shall be
directly liable for, direct expenses incurred by Containers, or by S&H on
Containers' behalf (other than the out-of-pocket expenses billed to
Containers by S&H pursuant to Paragraph 2(f) hereof), for services rendered
to Containers by third parties, including, but not limited to, legal and
accounting fees and insurance premiums. Containers shall pay any
compensation (including employee benefit costs and any related out-of-pocket
expenses) to officers and other employees of Containers who provide
substantially full-time services to Containers, other than Silver and
Horrigan who shall receive no salaries, notwithstanding that said officers
and other employees may simultaneously be officers or employees of S&H or one
of its subsidiaries or Affiliates.
4. Term.
(a) The term of this Agreement shall commence on the date
hereof and shall continue until the earliest of: (i) the completion of an
IPO; (ii) June 30, 1999; (iii) at the option of Containers, the occurrence of
an Event of Default pursuant to Paragraph 5(a) hereof; (iv) at MS Equity's
option, the occurrence of any Event of Default other than an Event of Default
pursuant to Paragraph 5(a) hereof; or (v) a Change of Control (as defined in
the Restated Certificate of Incorporation of Holdings in effect from time to
time) shall take place. The Monthly Management Fee and the Quarterly
Management Fee will cease to accrue on the date this Agreement is terminated
pursuant to this Paragraph 4(a).
(b) If any default specified in Paragraphs 5(b)-(f) hereof
occurs or exists with respect to Holdings as a result of an Event of Force
Majeure (as such term is defined in Paragraph 7 hereof), this Agreement shall
continue in full force and effect except that S&H shall be entitled only to
the Monthly Management Fee.
5. Events of Default.
Any one of the following defaults shall constitute an Event of
Default (other than by reason of an Event of Force Majeure in the case of
each of Paragraphs 5(a)-(f)):
(a) The failure or refusal of S&H to comply with or perform
its obligations under this Agreement if such failure or refusal continues
unremedied for more than sixty (60) days after written notice of the
existence of such failure or refusal shall have been given to the failing or
refusing party by any of the parties;
(b) S&H or Holdings is declared insolvent or bankrupt by any
court of competent jurisdiction, or a voluntary petition in bankruptcy is
filed in any court of competent jurisdiction by either of them;
(c) An involuntary petition in bankruptcy is filed in any
court of competent jurisdiction against S&H or Holdings and within forty-five
(45) days thereafter shall not have been dismissed or stayed (and, in the
event of any such stay, such stay shall not have been set aside and the
petition dismissed within forty-five (45) days after the stay shall have been
granted);
(d) A trustee or receiver is appointed for S&H or Holdings
and remains undischarged for more than forty-five (45) days after being
appointed;
(e) A proceeding seeking a reorganization, arrangement,
liquidation or dissolution of S&H or Holdings is instituted in a court of
competent jurisdiction and remains undismissed for more than forty-five (45)
days after being instituted;
(f) S&H or Holdings voluntarily seeks any such reorganization
or arrangement or makes an assignment for the benefit of creditors; or
(g) Death or permanent disability of both Horrigan and
Silver. For the purposes of this Agreement, "permanent disability" shall
mean the inability of Horrigan or Silver, as the case may be, by reason of
illness or injury to perform substantially all of his duties as Chairman of
the Board or as President of Holdings (or in performing his duties in any
other office in Holdings or any of its respective Affiliates to which he may
be duly appointed) during any continuous period of one hundred eighty (180)
days.
6. Limitation of Liability; Indemnification.
(a) S&H and its Affiliates shall not be liable to Containers,
to any director, officer, stockholder, consultant or subcontractor of
Containers, or to any person or entity controlling Containers or any such
stockholder, consultant or subcontractor of Containers, for any cost, damage,
expense or loss, including without limitation any special, indirect,
consequential or punitive damages, of Containers or any such officer,
director, stockholder, consultant, subcontractor or controlling person or
entity, allegedly arising out of (i) S&H's and/or its Affiliates' failure to
perform any services for Containers hereunder or the misperformance of any
such service, or (ii) Containers' or such officer's, director's,
stockholder's, consultant's, subcontractor's or controlling person's or
entity's reliance on any advice or data S&H and its Affiliates may provide to
Containers pursuant to this Agreement.
(b) Containers shall indemnify S&H and each of its
Affiliates, officers, directors, employees, consultants and subcontractors,
and any Person or entity controlling S&H and each of its Affiliates or any
such consultant or subcontractor and shall hold S&H and each of its
Affiliates and each such officer, director, employee, consultant,
subcontractor and controlling Person or entity, harmless against any damage,
loss, cost or expense (including court costs and reasonable attorneys' fees
which S&H and its Affiliates or any such officer, director, employee,
consultant, subcontractor or controlling Person or entity, may sustain or
incur by reason of any claim, demand, suit or recovery by any Person or
entity arising in connection with this Agreement or out of S&H's or its
Affiliates', or any consultant's or subcontractor's, performance of S&H's
obligations under this Agreement), provided, however, that no officer of S&H
may benefit from the foregoing indemnity in the event of his serious criminal
conduct or in the event that the Required Majority (as defined in the
Restated Certificate of Incorporation of Holdings) of the Board of Directors
of Holdings so decides, with MS Equity agreeing to cause the Class B
Directors (as defined in the Restated Certificate of Incorporation of
Holdings) to vote in accordance with the Class A Directors (as defined in the
Restated Certificate of Incorporation of Holdings) on such matter.
(c) Nothing contained in this Section shall limit or affect
Containers' rights to submit any matter to arbitration.
(d) The manner of any indemnification under this Agreement
shall be in accordance with Section 9.1 of the Organization Agreement.
(e) No salaried officer or employee of S&H shall have any
liability to MS Equity or any Affiliate or Associate thereof arising in
connection with this Agreement nor will such entities make any claim seeking
damages arising out of such individual's performance as an officer or
employee of Holdings, except for performance which could constitute serious
criminal conduct or, in the case of an officer or employee of Holdings, as
otherwise approved by the Required Majority of the Board of Directors of
Holdings, with MS Equity agreeing to cause the Class B Directors to vote in
accordance with the Class A Directors on such matter.
7. Force Majeure.
The term "Event of Force Majeure" as used herein shall mean any
failure of a party to perform any of its obligations hereunder if such
failure is due to circumstances beyond its control, including but not limited
to, any requisition by any government authority, act of war, strike, boycott,
lockout, picketing, riot, sabotage, civil commotion, insurrection, epidemic,
disease, act of God, fire, flood, accident, explosion, earthquake, storm,
failure of public utilities or common carriers, mechanical failure, embargo,
or prohibition imposed by any governmental body or agency having authority
over the party, which would have constituted an Event of Default but for the
fact that such events constituted an Event of Force Majeure. The party
affected by an Event of Force Majeure shall give prompt notice thereof to the
other parties hereto and each party shall use its best efforts to minimize
the duration and consequences of, and to eliminate, any such Event of Force
Majeure. At such time as an Event of Force Majeure no longer exists, the
respective obligations of the parties hereto shall be reinstated and this
Agreement shall continue in full force and effect.
8. Insurance.
S&H agrees that for the term of this Agreement it shall cause
Containers to obtain and maintain insurance for such risks and in such
amounts similar to companies of comparable size which are engaged in similar
business activities, provided that if Containers or Silgan maintains a level
of insurance which complies with the applicable terms of the Credit
Agreement, S&H shall be deemed to be in compliance with the provisions of
this paragraph.
9. Definitions.
Terms not defined herein which are defined in the Organization
Agreement shall have the meanings ascribed to them therein.
10. Notices.
All notices and other communications required by or specifically
provided for in this Agreement shall be in writing and shall be deemed to
have been given (a) when delivered in person, (b) when sent by telex or
telecopier with answerback received, or (c) seventy-two (72) hours after
having been deposited in the U.S. mails, certified mail with return receipt
requested and postage prepaid, and in any case addressed to the party for
which it is intended at that party's address as set forth below, or at such
other address as the addressee shall have designated by notice hereunder to
the other party.
If to S&H:
S&H Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
If to Containers:
Silgan Containers Corporation
21800 Oxnard Street
Suite 600
Woodland Hills, CA 91367
Attention: James D. Beam
If a notice is sent to any of the above, a copy shall be sent to each of
the following:
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
P.O. Box 6760
Stamford, CT 06904-6760
Attention: Frode Jensen, III, Esq.
The Morgan Stanley Leveraged
Equity Fund II, L.P.
Morgan Stanley Leveraged Equity
Fund II, Inc., General Partner
1251 Avenue of the Americas
New York, NY 10020
Attention: Robert H. Niehaus
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: John R. Ettinger, Esq.
Any notice or request sent by telecopier or similar facsimile
telecommunication shall be confirmed promptly by the sending of a copy of
such notice or request to the addressee thereof by prepaid certified mail,
return receipt requested.
11. Amendment; Assignment; Binding Effect.
This Agreement may be amended or modified only by a written
instrument signed by the parties hereto. No party shall assign or transfer
this Agreement, in whole or in part, or any of such party's rights or
obligations hereunder, to any other person or entity without the prior
written consent of the other parties, except that S&H may transfer or assign
all of its rights and obligations hereunder to any entity directly or
indirectly succeeding to S&H by merger, consolidation or reorganization. This
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted assigns.
12. Waiver; Severability.
The failure of a party to insist in any instance upon the strict
and punctual performance of any provision of this Agreement shall not
constitute a continuing waiver of such provision. No party shall be deemed
to have waived any right, power, or privilege under this Agreement or any
provisions hereof unless such waiver shall have been in writing and duly
executed by the party to be charged with such waiver, and such waiver shall
be a waiver only with respect to the specific instance involved and shall in
no way impair the rights of the waiving party or the obligations of any other
party in any other respect or at any other time. If any provision of this
Agreement shall be waived, or be invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain binding and in full force and effect.
13. Relationship of the Parties.
In all matters relating to this Agreement, each party hereto shall
be solely responsible for the acts of its employees, and employees of one
party shall not be considered employees of the other party. Except as
otherwise provided herein, no party shall have any right, or authority to
create any obligation, express or implied, on behalf of any other party.
14. Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to its conflict
of laws rules and laws.
15. Entire Agreement; Termination of Original Management Services
Agreement.
This Agreement, the Organization Agreement and the agreements and
documents executed and delivered with respect thereto, constitute the entire
Agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, either oral
or written, with respect thereto. Upon the execution and delivery of this
Agreement, the Original Management Services Agreement shall be terminated and
shall be of no effect whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
S&H INC.
By: /s/ D. Greg Horrigan
-----------------------------
Title: President
SILGAN CONTAINERS CORPORATION
By: /s/ Harley Rankin, Jr.
----------------------------
Title: Vice President
Accepted and Agreed to:
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.
By: MORGAN STANLEY LEVERAGED
EQUITY FUND II, INC. (General Partner)
By: /s/ Robert H. Niehaus
--------------------------
Name: Robert H. Niehaus
Title: Director
SCHEDULE I
(000's omitted)
Scheduled Amount Maximum Amount
----------------- --------------
1993 $ 65,500 1993 N/A
1994 71,500 1994 $ 90,197
1995 77,500 1995 95,758
1996 83,500 1996 98,101
1997 89,500 1997 100,504
1998 95,500 1998 102,964
1999 101,500 1999 105,488
Exhibit 7
AMENDED AND RESTATED
MANAGEMENT SERVICES AGREEMENT
This Amended and Restated Management Services Agreement (the
"Agreement") is made as of this 21st day of December, 1993 by and between S&H
INC., a Connecticut corporation ("S&H"), and SILGAN PLASTICS CORPORATION, a
Delaware corporation ("Plastics").
W I T N E S S E T H:
WHEREAS, S&H and Plastics have entered into the Management Services
Agreement dated June 30, 1989, as amended by Amendment No. 1 thereto dated
July 13, 1990 and Amendment No. 2 thereto dated as of June 29, 1992 (as
amended by Amendment No. 1 and Amendment No. 2, the "Original Management
Services Agreement"), pursuant to which S&H provides general management,
supervision, administrative and other services to Plastics in accordance with
the terms of the Original Management Services Agreement;
WHEREAS, R. Philip Silver ("Silver"), D. Greg Horrigan
("Horrigan"), The Morgan Stanley Leveraged Equity Fund II, L.P. ("MS
Equity"), Bankers Trust New York Corporation, First Plaza Group Trust and
Silgan Holdings Inc. ("Holdings") are entering into an Amended and Restated
Organization Agreement dated as of the date hereof (the "Organization
Agreement") providing for, among other things, the terms governing the
relationship among the parties for the term thereof and the amendment and
restatement of the management services agreement between S&H and Holdings
dated June 30, 1989, as amended by Amendment No. 1 thereto dated July 13,
1990 and Amendment No. 2 thereto dated as of June 29, 1992;
WHEREAS, S&H also is a party to a management services agreement
dated June 30, 1989, as amended by Amendment No. 1 thereto dated July 13,
1990 and Amendment No. 2 thereto dated as of June 29, 1992 with each of
Silgan Corporation, the parent holding company of Plastics ("Silgan"), and
Silgan Containers Corporation, a wholly owned subsidiary of Silgan
("Containers");
WHEREAS, S&H and each of Holdings, Silgan and Containers are
entering into an amended and restated management services agreement dated as
of the date hereof (collectively, as so amended and restated, the "Affiliate
Management Services Agreements"); and
WHEREAS, S&H and Plastics desire to amend and restate hereby the
Original Management Services Agreement in order to make certain changes in
light of the terms of the Affiliate Management Services Agreements.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, S&H and Plastics agree as follows:
1. Management Services.
(a) S&H and Plastics hereby agree that, during the period
beginning on the Closing Date (as defined in the Organization Agreement) and
continuing throughout the term hereof, S&H and its Affiliates shall provide
to Plastics general management, supervision and administrative services,
including, without limitation, the preparation of the annual and long-term
business plans, and perform such other duties and provide such other services
as Plastics shall be permitted to request of S&H pursuant to the Restated
Certificate of Incorporation or By-Laws of Holdings or pursuant to applicable
law, which power and authority Plastics hereby grants to S&H ("General
Management Services"). (The General Management Services are hereinafter
collectively referred to as the "Services" and individually as a "Service").
(b) Any Service hereunder shall be provided to Plastics only
by S&H or its Affiliates or such consultants, subcontractors or agents as may
be selected from time to time by S&H. It is understood and agreed that S&H
shall retain the services of Morgan Stanley & Co. Incorporated as financial
advisor to Plastics.
2. Fees; Payment.
(a) In consideration for General Management Services provided
by S&H to Plastics hereunder, Plastics shall pay to S&H aggregate fees or
compensation therefor (not including any related out-of-pocket expenses), (i)
on a monthly basis, Plastics' Proportionate Percentage (as defined below) of
five thousand dollars ($5,000) plus an amount equal to 2.475% of EBDIT (as
defined in Paragraph 2(j) hereof) for such calendar month until EBDIT for the
calendar year to date has reached the Scheduled Amount for such calendar year
(as defined in Paragraph 2(e) hereof) and 1.65% of EBDIT for such calendar
month to the extent that EBDIT for the calendar year to date exceeds the
Scheduled Amount but is not greater than the Maximum Amount (as defined in
Paragraph 2(e) hereof) (the "Monthly Management Fee"); and (ii) on a
quarterly basis, an amount equal to Plastics' Proportionate Percentage of
2.475% of EBDIT for such calendar quarter until EBDIT for the calendar year
to date has reached the Scheduled Amount and 1.65% of EBDIT for such calendar
quarter to the extent that EBDIT for the calendar year to date exceeds the
Scheduled Amount but is not greater than the Maximum Amount (the "Quarterly
Management Fee"). For purposes of this Paragraph 2, "Proportionate
Percentage" means such percentage of EBDIT for a given period that is
attributable to the results of Plastics for such period.
(b) Such Quarterly Management Fee shall continue to accrue,
but shall not be paid, to S&H by Plastics in the event that, and from the
date on which, Plastics or Silgan shall have received written notice
("Notice") from the Agent (as defined below) that an Event of Default (as
such term is defined in the Credit Agreement, dated as of December 21, 1993,
among Silgan, Containers, Plastics, the financial institutions parties
thereto, Bankers Trust Company, as Agent (the "Agent"), and Bank of America
National Trust and Savings Association, as Co-Agent, as amended, supplemented
or modified from time to time (the "Credit Agreement")) exists under any of
Sections 9.01, 9.03 (but only to the extent resulting from the violation of
one or more of Sections 8.08, 8.09, 8.10, and 8.11 of the Credit Agreement),
9.04(i)(x), 9.04(ii) or 9.05 of the Credit Agreement (each of the foregoing
Events of Default, a "Financial Covenant Event of Default") until, and shall
be paid by Plastics to S&H on, the earliest to occur of (x) the first date
after receipt of such Notice upon which no Financial Covenant Event of
Default to which the Notice related or otherwise known to S&H or Silgan,
shall be in existence (and so long as no such Financial Covenant Event of
Default would be in existence after giving effect to the payment of such
unpaid portion of the Quarterly Management Fee), (y) the first date occurring
180 days or more after receipt by Silgan of a notice stating that no Event of
Default exists under Section 9.01 of the Credit Agreement, or (z) the date
that Silgan, Containers, Plastics and California-Washington Can Corporation,
a wholly owned subsidiary of Containers, shall have paid all outstanding
Obligations (as such term is defined under the Credit Agreement). In the
event that a Notice is delivered by the Agent, Plastics shall pay to S&H that
portion of any unpaid Quarterly Management Fee that has accrued with respect
to that portion of such calendar quarter prior to the occurrence of any
Financial Covenant Event of Default to which such Notice relates.
(c) Nothing contained in Paragraph 2(b) shall prevent the
Agent from giving successive Notices of the type described in Paragraph 2(b)
(in which case the rules set forth in Paragraph 2(b) shall apply to, and the
time periods set forth therein shall begin to run on, the date of such
subsequent Notice); provided that only one Notice relating to a single
Financial Covenant Event of Default and all other Financial Covenant Events
of Default in existence at the date of the giving of any such Notice may be
given. Notwithstanding anything to the contrary stated herein, if at any
time after the giving of Notice by the Agent to Silgan, S&H shall certify to
Silgan that all Financial Covenant Events of Default to which such Notice
relates have been cured or waived, and that S&H knows of no other Financial
Covenant Event of Default then in existence, then Plastics shall, unless it
knows of the existence of a Financial Covenant Event of Default which has not
yet been cured or waived, pay to S&H any accrued and unpaid Quarterly
Management Fee or portion thereof in the manner set forth in Paragraph 2(h)
hereof. S&H shall not be required to deliver any such certification to
Silgan upon the occurrence of the dates or events set forth in clauses (y) or
(z) of Paragraph 2(b), and promptly after the occurrence of such date or
event, Plastics will pay to S&H any accrued and unpaid Quarterly Management
Fee or portion thereof.
(d) In addition to the management fees payable pursuant to
Paragraph 2(a) hereof, Plastics shall pay to S&H on the closing date of the
IPO (as defined in the Organization Agreement) an amount, if any (the
"Additional Amount"), equal to the sum of the present values, calculated for
each year or portion thereof, of (i) the amount of the annual management fee
for such year or portion thereof that otherwise would have been payable to
S&H for each such year or portion thereof for the period beginning as of the
time of the IPO and ending on June 30, 1999 (the "Remaining Term") pursuant
to Paragraph 2(a) hereof but for the occurrence of the IPO, minus (ii)
Plastics' Average Proportionate Percentage (as defined below) of the amount
payable to S&H for the Remaining Term at the rate of $2.0 million per year.
S&H may elect to have up to two-thirds (but no more than two-thirds) of the
Additional Amount paid to S&H in cash with the balance of the Additional
Amount being paid in fully-vested shares of common stock of Holdings, valued
for the purposes of such payment at the public offering price per share in
the IPO. The amounts described in clause (i) of this Paragraph 2(d) will be
calculated based upon S&H's good faith projections of both Holdings' EBDIT
and Plastics' Proportionate Percentage for each such year (or portion
thereof) during the Remaining Term (the "Estimated Plastics Fees"), which
projections shall be made on a basis consistent with S&H's past projections.
The difference between the amount of the Estimated Plastics Fees for any
particular year and Plastics' Average Proportionate Percentage of $2 million
shall be discounted to present value at the time of the IPO using a discount
rate of eight percent (8%) per annum, compounded annually. For purposes of
this Paragraph 2(d), "Average Proportionate Percentage" shall mean a weighted
average of the percentage of EBDIT for each year or portion thereof during
the Remaining Term that would be attributable to the results of Plastics for
each such year or portion thereof, as calculated based upon S&H's good faith
projections which shall be made on a basis consistent with S&H's past
projections.
(e) For any given year during the term of this Agreement, the
Scheduled Amount and the Maximum Amount for such year will be the amounts set
forth in Schedule I hereto.
(f) In addition to the fees referred to in Paragraphs 2(a)
and 2(d), Plastics shall also reimburse S&H in an amount equal to all out-of-
pocket expenses paid by S&H in providing the Services hereunder, including
fees and expenses paid to consultants, subcontractors and other third
parties, in connection with such Services. Such expenses shall be paid by
Plastics to S&H on a monthly basis.
(g) (i) Not later than fifteen (15) days after the end of
each calendar month during the term hereof with respect to the Monthly
Management Fee and (ii) not later than thirty (30) days after the end of each
full calendar quarter during the term hereof with respect to the Quarterly
Management Fee, S&H shall furnish Plastics with a bill for an amount equal to
the Monthly Management Fee and the Quarterly Management Fee, respectively,
then owing with respect to periods ended on or before the end of such
calendar month or such calendar quarter.
(h) Each bill furnished to Plastics hereunder shall be paid
in full within thirty (30) days of the receipt of such bill, except that any
accrued and unpaid Quarterly Management Fee or portion thereof shall be paid
on the earliest date on which such payment is permitted to be made pursuant
to Paragraphs 2(a), 2(b) and 2(c) hereof. All payments of such bills shall
be sent to:
S&H Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
or to such other address as S&H may specify from time to time by written
notice to Plastics.
(i) All fees and expenses paid to S&H by Holdings and Silgan,
pursuant to their respective Affiliate Management Services Agreements with
S&H, shall be credited to the fees and expenses referred to in Paragraphs
2(a), 2(d) and 2(f) hereof.
(j) For purposes of this Section 2, EBDIT shall mean, for any
period, the consolidated net income of Holdings and its subsidiaries, before
interest expense and provision for income taxes and without giving effect to
any extraordinary non-cash gains or extraordinary non-cash losses and any
adjustments resulting from changes in the value of employee stock options
and/or stock appreciation rights, and adjusted by adding thereto (i) the
amount of any fees and expenses paid pursuant to this Agreement or the
Affiliate Management Services Agreements, (ii) the amount of all charges and
expenses incurred in connection with the Refinancing (as defined in Amendment
No. 5 to Holdings' Registration Statement on Form S-1, dated June 23, 1992,
relating to Holdings' Senior Discount Debentures due 2002 (Commission File
No. 33-47632)) (which charges and expenses have been charged against the
consolidated net income of Holdings or its subsidiaries), and (iii) the
amount of all amortization of intangibles, covenants not to compete, goodwill
and debt financing costs and all depreciation (which amortization and
depreciation have been charged against the consolidated net income of
Holdings and its subsidiaries, before interest expense), computed in
accordance with generally accepted accounting principles.
3. Direct Expenses. It is understood that the consideration to
be paid by Plastics to S&H for Services hereunder shall not be in lieu of,
and that Plastics shall be directly liable for, direct expenses incurred by
Plastics, or by S&H on Plastics' behalf (other than the out-of-pocket
expenses billed to Plastics by S&H pursuant to Paragraph 2(f) hereof), for
services rendered to Plastics by third parties, including, but not limited
to, legal and accounting fees and insurance premiums. Plastics shall pay any
compensation (including employee benefit costs and any related out-of-pocket
expenses) to officers and other employees of Plastics who provide
substantially full-time services to Plastics, other than Silver and Horrigan
who shall receive no salaries, notwithstanding that said officers and other
employees may simultaneously be officers or employees of S&H or one of its
subsidiaries or Affiliates.
4. Term.
(a) The term of this Agreement shall commence on the date
hereof and shall continue until the earliest of: (i) the completion of an
IPO; (ii) June 30, 1999; (iii) at the option of Plastics, the occurrence of
an Event of Default pursuant to Paragraph 5(a) hereof; (iv) at MS Equity's
option, the occurrence of any Event of Default other than an Event of Default
pursuant to Paragraph 5(a) hereof; or (v) a Change of Control (as defined in
the Restated Certificate of Incorporation of Holdings in effect from time to
time) shall take place. The Monthly Management Fee and the Quarterly
Management Fee will cease to accrue on the date this Agreement is terminated
pursuant to this Paragraph 4(a).
(b) If any default specified in Paragraphs 5(b)-(f) hereof
occurs or exists with respect to Holdings as a result of an Event of Force
Majeure (as such term is defined in Paragraph 7 hereof), this Agreement shall
continue in full force and effect except that S&H shall be entitled only to
the Monthly Management Fee.
5. Events of Default.
Any one of the following defaults shall constitute an Event of
Default (other than by reason of an Event of Force Majeure in the case of
each of Paragraphs 5(a)-(f)):
(a) The failure or refusal of S&H to comply with or perform
its obligations under this Agreement if such failure or refusal continues
unremedied for more than sixty (60) days after written notice of the
existence of such failure or refusal shall have been given to the failing or
refusing party by any of the parties;
(b) S&H or Holdings is declared insolvent or bankrupt by any
court of competent jurisdiction, or a voluntary petition in bankruptcy is
filed in any court of competent jurisdiction by either of them;
(c) An involuntary petition in bankruptcy is filed in any
court of competent jurisdiction against S&H or Holdings and within forty-five
(45) days thereafter shall not have been dismissed or stayed (and, in the
event of any such stay, such stay shall not have been set aside and the
petition dismissed within forty-five (45) days after the stay shall have been
granted);
(d) A trustee or receiver is appointed for S&H or Holdings
and remains undischarged for more than forty-five (45) days after being
appointed;
(e) A proceeding seeking a reorganization, arrangement,
liquidation or dissolution of S&H or Holdings is instituted in a court of
competent jurisdiction and remains undismissed for more than forty-five (45)
days after being instituted;
(f) S&H or Holdings voluntarily seeks any such reorganization
or arrangement or makes an assignment for the benefit of creditors; or
(g) Death or permanent disability of both Horrigan and
Silver. For the purposes of this Agreement, "permanent disability" shall
mean the inability of Horrigan or Silver, as the case may be, by reason of
illness or injury to perform substantially all of his duties as Chairman of
the Board or as President of Holdings (or in performing his duties in any
other office in Holdings or any of its respective Affiliates to which he may
be duly appointed) during any continuous period of one hundred eighty (180)
days.
6. Limitation of Liability; Indemnification.
(a) S&H and its Affiliates shall not be liable to Plastics,
to any director, officer, stockholder, consultant or subcontractor of
Plastics, or to any person or entity controlling Plastics or any such
stockholder, consultant or subcontractor of Plastics, for any cost, damage,
expense or loss, including without limitation any special, indirect,
consequential or punitive damages, of Plastics or any such officer, director,
stockholder, consultant, subcontractor or controlling person or entity,
allegedly arising out of (i) S&H's and/or its Affiliates' failure to perform
any services for Plastics hereunder or the misperformance of any such
service, or (ii) Plastics' or such officer's, director's, stockholder's,
consultant's, subcontractor's or controlling person's or entity's reliance on
any advice or data S&H and its Affiliates may provide to Plastics pursuant to
this Agreement.
(b) Plastics shall indemnify S&H and each of its Affiliates,
officers, directors, employees, consultants and subcontractors, and any
Person or entity controlling S&H and each of its Affiliates or any such
consultant or subcontractor and shall hold S&H and each of its Affiliates and
each such officer, director, employee, consultant, subcontractor and
controlling Person or entity, harmless against any damage, loss, cost or
expense (including court costs and reasonable attorneys' fees which S&H and
its Affiliates or any such officer, director, employee, consultant,
subcontractor or controlling Person or entity, may sustain or incur by reason
of any claim, demand, suit or recovery by any Person or entity arising in
connection with this Agreement or out of S&H's or its Affiliates', or any
consultant's or subcontractor's, performance of S&H's obligations under this
Agreement), provided, however, that no officer of S&H may benefit from the
foregoing indemnity in the event of his serious criminal conduct or in the
event that the Required Majority (as defined in the Restated Certificate of
Incorporation of Holdings) of the Board of Directors of Holdings so decides,
with MS Equity agreeing to cause the Class B Directors (as defined in the
Restated Certificate of Incorporation of Holdings) to vote in accordance with
the Class A Directors (as defined in the Restated Certificate of
Incorporation of Holdings) on such matter.
(c) Nothing contained in this Section shall limit or affect
Plastics' rights to submit any matter to arbitration.
(d) The manner of any indemnification under this Agreement
shall be in accordance with Section 9.1 of the Organization Agreement.
(e) No salaried officer or employee of S&H shall have any
liability to MS Equity or any Affiliate or Associate thereof arising in
connection with this Agreement nor will such entities make any claim seeking
damages arising out of such individual's performance as an officer or
employee of Holdings, except for performance which could constitute serious
criminal conduct or, in the case of an officer or employee of Holdings, as
otherwise approved by the Required Majority of the Board of Directors of
Holdings, with MS Equity agreeing to cause the Class B Directors to vote in
accordance with the Class A Directors on such matter.
7. Force Majeure.
The term "Event of Force Majeure" as used herein shall mean any
failure of a party to perform any of its obligations hereunder if such
failure is due to circumstances beyond its control, including but not limited
to, any requisition by any government authority, act of war, strike, boycott,
lockout, picketing, riot, sabotage, civil commotion, insurrection, epidemic,
disease, act of God, fire, flood, accident, explosion, earthquake, storm,
failure of public utilities or common carriers, mechanical failure, embargo,
or prohibition imposed by any governmental body or agency having authority
over the party, which would have constituted an Event of Default but for the
fact that such events constituted an Event of Force Majeure. The party
affected by an Event of Force Majeure shall give prompt notice thereof to the
other parties hereto and each party shall use its best efforts to minimize
the duration and consequences of, and to eliminate, any such Event of Force
Majeure. At such time as an Event of Force Majeure no longer exists, the
respective obligations of the parties hereto shall be reinstated and this
Agreement shall continue in full force and effect.
8. Insurance.
S&H agrees that for the term of this Agreement it shall cause
Plastics to obtain and maintain insurance for such risks and in such amounts
similar to companies of comparable size which are engaged in similar business
activities, provided that if Plastics or Silgan maintains a level of
insurance which complies with the applicable terms of the Credit Agreement,
S&H shall be deemed to be in compliance with the provisions of this
paragraph.
9. Definitions.
Terms not defined herein which are defined in the Organization
Agreement shall have the meanings ascribed to them therein.
10. Notices.
All notices and other communications required by or specifically
provided for in this Agreement shall be in writing and shall be deemed to
have been given (a) when delivered in person, (b) when sent by telex or
telecopier with answerback received, or (c) seventy-two (72) hours after
having been deposited in the U.S. mails, certified mail with return receipt
requested and postage prepaid, and in any case addressed to the party for
which it is intended at that party's address as set forth below, or at such
other address as the addressee shall have designated by notice hereunder to
the other party.
If to S&H:
S&H Inc.
4 Landmark Square
Suite 301
Stamford, CT 06901
Attention: R. Philip Silver
If to Plastics:
Silgan Plastics Corporation
16216 Baxter Road, Suite 300
P.O. Box 1080
Chesterfield, MO 63006
Attention: Russell F. Gervais
If a notice is sent to any of the above, a copy shall be sent to each of
the following:
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
P.O. Box 6760
Stamford, CT 06904-6760
Attention: Frode Jensen, III, Esq.
The Morgan Stanley Leveraged
Equity Fund II, L.P.
Morgan Stanley Leveraged Equity
Fund II, Inc., General Partner
1251 Avenue of the Americas
New York, NY 10020
Attention: Robert H. Niehaus
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: John R. Ettinger, Esq.
Any notice or request sent by telecopier or similar facsimile
telecommunication shall be confirmed promptly by the sending of a copy of
such notice or request to the addressee thereof by prepaid certified mail,
return receipt requested.
11. Amendment; Assignment; Binding Effect.
This Agreement may be amended or modified only by a written
instrument signed by the parties hereto. No party shall assign or transfer
this Agreement, in whole or in part, or any of such party's rights or
obligations hereunder, to any other person or entity without the prior
written consent of the other parties, except that S&H may transfer or assign
all of its rights and obligations hereunder to any entity directly or
indirectly succeeding to S&H by merger, consolidation or reorganization. This
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted assigns.
12. Waiver; Severability.
The failure of a party to insist in any instance upon the strict
and punctual performance of any provision of this Agreement shall not
constitute a continuing waiver of such provision. No party shall be deemed
to have waived any right, power, or privilege under this Agreement or any
provisions hereof unless such waiver shall have been in writing and duly
executed by the party to be charged with such waiver, and such waiver shall
be a waiver only with respect to the specific instance involved and shall in
no way impair the rights of the waiving party or the obligations of any other
party in any other respect or at any other time. If any provision of this
Agreement shall be waived, or be invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain binding and in full force and effect.
13. Relationship of the Parties.
In all matters relating to this Agreement, each party hereto shall
be solely responsible for the acts of its employees, and employees of one
party shall not be considered employees of the other party. Except as
otherwise provided herein, no party shall have any right, or authority to
create any obligation, express or implied, on behalf of any other party.
14. Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to its conflict
of laws rules and laws.
15. Entire Agreement; Termination of Original Management Services
Agreement.
This Agreement, the Organization Agreement and the agreements and
documents executed and delivered with respect thereto, constitute the entire
Agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, either oral
or written, with respect thereto. Upon the execution and delivery of this
Agreement, the Original Management Services Agreement shall be terminated and
shall be of no effect whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
S&H INC.
By: /s/ D. Greg Horrigan
-------------------------------
Title: President
SILGAN PLASTICS CORPORATION
By: /s/ Harley Rankin, Jr.
-------------------------------
Title: Vice President
Accepted and Agreed to:
THE MORGAN STANLEY LEVERAGED
EQUITY FUND II, L.P.
By: MORGAN STANLEY LEVERAGED
EQUITY FUND II, INC. (General Partner)
By: /s/ Robert H. Niehaus
---------------------------
Name: Robert H. Niehaus
Title: Director
SCHEDULE I
(000's omitted)
Scheduled Amount Maximum Amount
----------------- --------------
1993 $ 65,500 1993 N/A
1994 71,500 1994 $ 90,197
1995 77,500 1995 95,758
1996 83,500 1996 98,101
1997 89,500 1997 100,504
1998 95,500 1998 102,964
1999 101,500 1999 105,488
Exhibit 8
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 21, 1993
BETWEEN
SILGAN HOLDINGS INC.
AND
FIRST PLAZA GROUP TRUST
TABLE OF CONTENTS
Page
1. Purchase and Sale of Common Stock . . . . . . . . . . . . . . . . . 4
1.1 Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2 Payment and Delivery . . . . . . . . . . . . . . . . . . . . . 5
1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Representations and Warranties of the Company . . . . . . . . . . . 5
2.1 Corporate Organization and Authority . . . . . . . . . . . . . 5
2.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Validity of Shares . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Subsidiary Stock . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 Title to Shares . . . . . . . . . . . . . . . . . . . . . . . . 7
2.7 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.8 Options, Warrants and Similar Rights . . . . . . . . . . . . . 8
2.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . 8
2.10 Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.11 Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.12 Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.13 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.14 Compliance with Statutes; Environmental and Safety Laws . . . . 10
2.15 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.16 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3. Representations and Warranties of the Investor . . . . . . . . . . . 12
3.1 Organization and Authority . . . . . . . . . . . . . . . . . . 12
3.2 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . 12
3.3 Experience . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.4 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.5 Information . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.6 Domicile . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Federal Securities Laws . . . . . . . . . . . . . . . . . . . . 13
3.8 State Securities Laws . . . . . . . . . . . . . . . . . . . . . 13
3.9 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.10 Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.11 Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . 14
4. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Compliance with Agreements . . . . . . . . . . . . . . . . . . 14
4.2 Current Public Information . . . . . . . . . . . . . . . . . . 14
4.3 Public Disclosures . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Repurchase of Shares . . . . . . . . . . . . . . . . . . . . . 15
5. Conditions of the Investor's Obligation at the Closing . . . . . . . 15
5.1 Representations and Warranties; Performance . . . . . . . . . . 15
5.2 Organization Agreement . . . . . . . . . . . . . . . . . . . . 15
5.3 Stockholders Agreement . . . . . . . . . . . . . . . . . . . . 15
5.4 Asset Purchase Agreement . . . . . . . . . . . . . . . . . . . 16
5.5 Supply Agreement . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Bank Agreement . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Management Services Agreement . . . . . . . . . . . . . . . . . 16
5.8 Amendment of Certificate of Incorporation . . . . . . . . . . . 16
5.9 Opinion of the Company's Counsel . . . . . . . . . . . . . . . 16
5.10 Closing Documents . . . . . . . . . . . . . . . . . . . . . . . 16
5.11 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.2 Indemnification and Contribution . . . . . . . . . . . . . . . 18
6.3 Governing Law; Jurisdiction; Venue . . . . . . . . . . . . . . 18
6.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 19
6.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.9 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 19
6.10 Costs of Enforcement . . . . . . . . . . . . . . . . . . . . . 19
Exhibit A - Form of Organization Agreement
Exhibit B - Form of Stockholders Agreement
Exhibit C - Form of Bank Agreement
Exhibit D - Form of Management Services Agreement
Exhibit E - Form of Amended and Restated Certificate of Incorporation
Exhibit F - Opinion of Winthrop, Stimson, Putnam & Roberts
Exhibit G - Addresses for Notices
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement dated as of December 21, 1993 (the
"Agreement") is entered into by and between Silgan Holdings Inc., a Delaware
corporation (the "Company"), and First Plaza Group Trust, a New York Trust
(the "Investor").
RECITALS
A. Pursuant to a Purchase Agreement, dated as of September 3,
1993, as amended by the Amendment to Purchase Agreement dated as of December
10, 1993 (as amended, the "Asset Purchase Agreement"), between Silgan
Containers Corporation, an indirect wholly-owned subsidiary of the Company
("SCC"), and Del Monte Corporation ("Del Monte"), SCC is purchasing certain
of the U.S. can manufacturing assets of Del Monte (the "Del Monte Asset
Acquisition").
B. The Investor desires to purchase from the Company 250,000
shares (the "Shares") of the Company's Class B Common Stock, par value $.01
per share (the "Class B Common Stock").
C. The Company is willing to sell the Shares to the Investor
and the Investor is willing to purchase the Shares from the Company only on
the terms and subject to the conditions contained in this Agreement, the
Amended and Restated Organization Agreement of even date herewith among R.
Philip Silver ("Silver"), D. Greg Horrigan ("Horrigan"), The Morgan Stanley
Leveraged Equity Fund II, L.P. ("MS Equity"), Bankers Trust New York
Corporation ("BT"), the Investor and the Company (the "Organization
Agreement"), the Stockholders Agreement of even date herewith among Silver,
Horrigan, MS Equity, BT, the Investor and the Company (the "Stockholders
Agreement") and the agreements referred to herein and therein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein contained, the Company and the Investor agree as follows:
1. Purchase and Sale of Common Stock.
1.1 Purchase. On the terms and subject to the conditions
contained in this Agreement, the Company hereby agrees to issue and sell to
the Investor, and the Investor hereby agrees to purchase from the Company,
the Shares at a purchase price of $60.00 per share, for an aggregate purchase
price of $15,000,000 (the "Purchase Price").
1.2 Payment and Delivery. On or before the Closing Date (as
defined in Section 1.3), the Investor will pay the Purchase Price to the
Company. The Purchase Price shall be paid by the Investor by wire transfer
in immediately available funds to the Company's account, No. 00-228-515, at
Bankers Trust Company. On the Closing Date, the certificate(s) representing
the Shares will be delivered to the Investor.
1.3 Closing. The closing of the transaction provided for in
this Agreement (the "Closing") shall take place at the offices of White &
Case, 1155 Avenue of the Americas, New York, New York at 9:00 a.m. New York
time on December 21, 1993, or at such other date and time as is mutually
acceptable to the parties hereto (the "Closing Date").
2. Representations and Warranties of the Company. As an inducement to
the Investor to purchase the Shares, the Company makes the following
representations and warranties (which representations and warranties shall
survive the Closing Date), and authorizes the Investor to rely upon the same:
2.1 Corporate Organization and Authority. The Company and each
of its consolidated subsidiaries (the "Subsidiaries") (i) is a corporation
duly organized, validly existing, authorized to exercise all its corporate
powers, rights and privileges, and in good standing under the laws of the
State of its incorporation; (ii) is duly qualified as a foreign corporation
to transact business in, and is in good standing in, every jurisdiction in
which the ownership of its properties or the conduct of its business makes
such qualification necessary, 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 the Company and its Subsidiaries taken
as a whole; and (iii) has the corporate power and corporate authority to own
and operate its properties and to carry on its business as now conducted and
as presently proposed to be conducted after consummation of the Del Monte
Asset Acquisition and to carry out the transactions contemplated by this
Agreement.
2.2 Capitalization.
(a) Currently Authorized. The authorized capital stock of
the Company currently consists of three million one hundred sixty-seven
thousand five hundred (3,167,500) shares, consisting of five hundred thousand
(500,000) shares of Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), six hundred sixty-seven thousand five hundred
(667,500) shares of Class B Common Stock, one million (1,000,000) shares of
Class C Common Stock, par value $.01 per share (the "Class C Common Stock"),
and one million (1,000,000) shares of Preferred Stock, par value $.01 per
share.
(b) Currently Issued and Outstanding. As of the date of
this Agreement, prior to giving effect to the transaction contemplated by
this Agreement, the issued and outstanding capital stock of the Company
consists of four hundred and seventeen thousand five hundred (417,500) shares
of Class A Common Stock registered in the names of Silver (208,750 shares)
and Horrigan (208,750 shares), four hundred and seventeen thousand five
hundred (417,500) shares of Class B Common Stock registered in the name of MS
Equity and fifty thousand (50,000) shares of Class C Common Stock registered
in the name of BT.
(c) Post Closing. After giving effect to the transaction
contemplated by this Agreement, the issued and outstanding capital stock of
the Company will be four hundred and seventeen thousand five hundred
(417,500) shares of Class A Common Stock, six hundred and sixty seven
thousand five hundred (667,500) shares of Class B Common Stock and fifty
thousand (50,000) shares of Class C Common Stock.
(d) Outstanding Options. The Company has issued and there
are currently outstanding options to purchase up to 15,000 shares of Class C
Common Stock pursuant to the Company's Amended and Restated Stock Option
Plan, which options are held by certain officers of the Company (the "Company
Options"). In addition, SCC has issued and there are currently outstanding
options to purchase up to 816 shares of SCC common stock, par value $.01 per
share, pursuant to the SCC Amended and Restated 1989 Stock Option Plan (the
"SCC Option Plan"), which options are held by certain officers of SCC (the
"SCC Options"), and Silgan Plastics Corporation, an indirect wholly-owned
subsidiary of the Company ("SPC"), has issued and there are currently
outstanding options to purchase up to 300 shares of SPC common stock, par
value $.01 per share, pursuant to the SPC Amended and Restated 1989 Stock
Option Plan (the "SPC Option Plan"), which options are held by certain
officers of SPC (the "SPC Options"). The SCC Options and the SPC Options are
convertible under certain circumstances pursuant to the terms of the SCC
Option Plan and the SPC Option Plan, respectively, into options to purchase
Class C Common Stock of the Company or any securities issued in exchange
therefor. In addition, pursuant to the terms of the SCC Option Plan and the
SPC Option Plan, if any SCC Option or SPC Option, as the case may be, has
been exercised prior to a "public offering" of the common stock of the
Company or a "change of control" of the Company, the shares of SCC common
stock or SPC common stock issued upon such exercise (the "Underlying Shares")
are convertible into shares of Class C Common Stock of the Company or any
securities issued in exchange therefor in accordance with the terms and
conditions of the SCC Option Plan and the SPC Option Plan, respectively. The
Company Options, the SCC Options, the SPC Options and the Underlying Shares
are herein referred to as the "Outstanding Options."
(e) As of the date of this Agreement, each Subsidiary of
the Company is wholly-owned by the Company or by a Subsidiary of the Company.
2.3 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution, delivery and performance of all obligations under
this Agreement, the Organization Agreement and the Stockholders Agreement and
for the issuance and delivery of the Shares has been taken, and this
Agreement, the Organization Agreement and the Stockholders Agreement
constitute legally binding valid obligations of the Company enforceable in
accordance with their terms except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors rights and general principles of
equity (whether considered in an action at law or in equity).
2.4 Validity of Shares. The Shares, when issued, sold and
delivered in accordance with the terms of, and for the consideration
expressed in, this Agreement, shall be duly authorized, validly issued and
fully-paid and nonassessable, are not subject to preemptive rights of any
stockholder of the Company and, subject to the accuracy of the
representations and warranties made by the Investor in this Agreement, will
have been issued in compliance with all applicable federal and state
securities laws.
2.5 Subsidiary Stock. All of the outstanding capital stock of
each of the Subsidiaries have been duly authorized, validly issued and are
fully paid and nonassessable and all outstanding shares of capital stock of
each Subsidiary are owned by the Company or another Subsidiary free and clear
of any lien, mortgage, security interest, charge or encumbrance (other than
security interests granted pursuant to the Bank Agreement (as defined in
Section 2.7)).
2.6 Title to Shares. Upon delivery of the Shares to the
Investor and payment therefor, the Investor will acquire good and valid title
to the Shares, free and clear of any and all claims, liens, restrictions,
pledges, charges, options, security interests, encumbrances or other rights
of third parties, including any imposed by operation of law, except such
claims, liens, restrictions, pledges, charges, options, security interests,
encumbrances or other rights (i) created by the Investor or the Trustee or
(ii) arising in connection with this Agreement, the Organization Agreement or
the Stockholders Agreement.
2.7 No Conflict. The execution, delivery and performance of
this Agreement (including any repurchase of Shares pursuant to Section 4.5
hereof), the Organization Agreement, the Stockholders Agreement, the Asset
Purchase Agreement, the Credit Agreement among Silgan Corporation, SCC, SPC,
the lenders from time to time party thereto, Bank of America National Trust
and Savings Association, as Co-Agent and Bankers Trust Company, as Agent,
dated as of December 21, 1993 (the "Bank Agreement"), and the Supply
Agreement between SCC and Del Monte dated as of September 3, 1993, as amended
by the Amendment to Supply Agreement dated as of December 21, 1993 (as so
amended, the "Supply Agreement"), will not (i) conflict with or result in a
breach of the terms, conditions or provisions of, (ii) constitute a default
under, (iii) result in the creation of any lien, security interest, charge or
encumbrance upon the Company's or any of the Subsidiaries' capital stock or
assets pursuant to (other than consensual liens, security interests, charges
or encumbrances to secure obligations to lenders that do not affect the
Company's capital stock), (iv) give any third party the right to accelerate
any obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice to
any court or administrative or governmental body (except such authorizations,
consents, approvals, exemptions or other actions as have been obtained or
taken) pursuant to, the Company's or any Subsidiary's Certificate of
Incorporation, the Company's or any Subsidiary's by-laws or any law, statute,
rule or regulation to which the Company or any Subsidiary is subject, or any
agreement, instrument, order, judgement or decree to which the Company or any
Subsidiary is subject.
2.8 Options, Warrants and Similar Rights. Except as provided
for in the Restated Certificate of Incorporation of the Company, the
Organization Agreement and the Outstanding Options, there are no options,
warrants, conversion privileges, preemptive, subscription or other rights
presently outstanding to purchase any of the authorized but unissued capital
stock of the Company or any Subsidiary, nor is the Company required to
repurchase or redeem any shares of its capital stock.
2.9 Financial Statements. The Company's consolidated audited
financial statements at and for the fiscal year ended December 31, 1992 and
its unaudited financial statements at and for the nine-month period ended
September 30, 1993 contained in the Company's reports filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") with the
Securities and Exchange Commission (the "Financial Statements") are complete
and correct in all material respects and have been prepared, in the case of
the audited financial statements, in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, and are consistent with each other (except as disclosed in the
notes to the Financial Statements) and the books and records of the Company.
The Financial Statements present fairly in all material respects the
financial condition and operating results of the Company on a consolidated
basis as of the dates, and for the periods, indicated therein, subject, in
the case of unaudited financial statements, to normal year-end audit
adjustments. Except as set forth in the Financial Statements, none of the
Company or any Subsidiary has liabilities, contingent or otherwise, other
than (i) liabilities incurred in the ordinary course of business subsequent
to September 30, 1993 and (ii) liabilities incurred in the ordinary course of
business and not required under generally accepted accounting principles to
be reflected in the Financial Statements, which, individually or in the
aggregate, are not material to the financial condition or operating results
of the Company and the Subsidiaries taken as a whole.
2.10 Changes. Since September 30, 1993, there has not been:
(a) any change in the assets, liabilities, financial condition
or operating results of the Company or any Subsidiary from that reflected in
the Financial Statements, except changes in the ordinary course of business
which have not been, in the aggregate, materially adverse; or
(b) any other event or condition of any character which has
materially and adversely affected the assets, properties, financial
condition, operating results or business of the Company or any Subsidiary.
2.11 Tax Filings. The Company and each of its Subsidiaries have
filed all federal tax returns and material state tax returns required to be
filed, which returns are complete and correct in all material respects, and
neither the Company nor any subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto.
2.12 Filings. The Company has filed all material applications
and has obtained all permits, approvals, licenses, franchises, certificates
and authorizations of all Federal, state or local governmental or regulatory
authorities ("Permits") as are necessary to own its properties and to conduct
its business in the manner now being conducted; the Company has fulfilled and
performed all of its obligations with respect to such Permits in all material
respects and no event has occurred that allows, or after notice or lapse of
time would allow, revocation or termination thereof or would result in any
other material impairment of the rights of the holder of any such Permit; and
none of such Permits contain any restrictions that are materially burdensome
to the holder thereof.
2.13 Properties. Except for liens granted to the Secured
Creditors (as defined in the Bank Agreement), the Company and each of the
Subsidiaries has good and marketable title to all property (real and
personal) owned by it, free and clear of all liens, claims, security
interests or other encumbrances except those which would not, individually or
collectively, have a material adverse effect on the condition (financial or
otherwise), business, net worth or results of operation of the Company or any
Subsidiary, and the property held under lease by the Company and each of the
Subsidiaries is held under valid subsisting and enforceable leases.
2.14 Compliance with Statutes; Environmental and Safety Laws.
(a) The Company 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 the Company and its Subsidiaries taken as a whole.
(b) The Company and each of its Subsidiaries have complied with
all applicable federal, state and local environmental laws (including,
without limitation, the Resources Conservation and Recovery Act, as amended
from time to time, 42 U.S.C. 6901 et seq., and the Comprehensive
Environmental Response Compensation of Liability Act of 1980, as amended from
time to time, 42 U.S.C. 9601 et seq.), 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 the Company or of
the Company and its Subsidiaries taken as a whole, and neither the Company
nor its 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.
(c) All material licenses, permits or registrations required for
the business of the Company and its Subsidiaries, as presently conducted,
under any federal, state or local environmental laws, regulations or
ordinances have been secured and the Company and its Subsidiaries is in
substantial compliance therewith.
(d) Neither the Company nor any of its 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 or 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 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.
(e) There are no legal or governmental proceedings pending or,
to the best of the Company's knowledge after reasonable investigation,
threatened which (i) question the validity, term or entitlement of the
Company or any of its Subsidiaries for any material permit, license, order or
registration required for the operation of any facility which the Company or
any of its Subsidiaries currently operates and (ii) wherein an unfavorable
decision, ruling or finding could have a material adverse effect on the
financial viability of any of its facilities.
(f) To the best of the Company's knowledge and belief, neither
the Company nor any of its 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 the Company or of the Company and its Subsidiaries taken as
a whole.
2.15 Disclosure. To the best of the Company's knowledge, neither
this Agreement, the Organization Agreement, the Asset Purchase Agreement, or
any of the schedules, attachments, written statements, documents,
certificates or other items prepared or supplied to the Investor by or on
behalf of the Company with respect to the transactions contemplated hereby or
thereby contain any untrue statement of a material fact or omit a material
fact necessary to make each statement contained herein or therein not
misleading. To the best of the Company's knowledge, there is no fact which
has not been disclosed to the Investor which materially affects adversely or
could reasonably be anticipated to materially affect adversely the Company's
or any Subsidiary's business, financial condition, operating results,
earnings, assets or business prospects.
2.16 Litigation. Other than as disclosed in the Company's [Post-
Effective Amendment No. 1 to Form S-1 Registration Statement (Registration
No. 33-47632) dated June 18, 1993 or Annual Report on Form 10-K for the
fiscal year ended December 31, 1992], there are no actions, suits,
proceedings, orders, investigations or claims pending or, to the Company's
knowledge, threatened against the Company or any Subsidiary, at law or in
equity, or before or by any governmental department, commission, board,
bureau, agency or instrumentality that, if adversely determined, would
adversely affect any action taken or to be taken by the Company or any
Subsidiary under this Agreement, the Organization Agreement, the Asset
Purchase Agreement or the Supply Agreement, or that, if adversely determined
would materially adversely affect the business, operations, properties or
financial position of the Company or any Subsidiary; and, to the Company's
knowledge, there is no reasonable basis for any such actions, suits,
proceedings, orders, investigations or claims.
3. Representations and Warranties of the Investor. As an inducement
to the Company to issue the Shares, and in order to establish the suitability
for the Investor of such an investment, the Investor hereby makes the
following representations and warranties (which representations and
warranties shall survive the Closing Date), and authorizes the Company to
rely upon the same:
3.1 Organization and Authority. The Investor is a trust duly
organized and validly existing under the laws of its jurisdiction of
organization; it has the power and authority under its trust agreement to
enter into and perform this Agreement; the execution of this Agreement by it
has been duly authorized; the consummation of the transactions contemplated
hereunder will not result in a breach or violation of, or a default under,
its trust agreement or any material agreement by which it or any of its
properties is bound or any statute, rule, regulation, order or other law to
which it is subject, nor require the obtaining of any consent, approval,
permit or license from or filing with, any governmental authority or other
person by the Investor in connection with the execution, delivery and
performance by it of this Agreement, except for violations which would not,
or consents or filings which, if not obtained or made, would not, in the
aggregate, affect materially and adversely its ability to consummate the
transactions contemplated by, or fulfill its obligations under, this
Agreement; and this Agreement constitutes (assuming its due authorization and
execution by the Company) its legal, valid and binding obligation.
3.2 Investment Intent. The Investor is aware of and familiar
with the business affairs and financial condition of the Company and has
acquired sufficient information about the Company to reach a knowledgeable
and informed decision to purchase the Shares. The Investor is acquiring the
Shares for investment for the Investor's own account, not for resale, without
any intention of, or view toward, or for participating, directly or
indirectly, in, a distribution of the Shares or any portion thereof.
3.3 Experience. The Investor: (i) has such knowledge and
experience in financial and business matters (or the professional advisors or
representatives of the Investor who are unaffiliated with and who are not
compensated directly or indirectly by the Company or by any affiliate or
selling agent of the Company have such knowledge and experience in financial
and business matters) that the Investor (or the Investor's professional
advisors or representatives, as the case may be) is capable of evaluating the
merits and risks of the purchase of the Shares, protecting the Investor's
interest in connection with the purchase of the Shares, and making an
informed investment decision with respect thereto, (ii) has investigated the
purchase of the Shares to the extent the Investor has deemed necessary or
desirable, and has been provided with any assistance the Investor has
requested from the Company in connection therewith and (iii) has determined
that the Shares are a suitable investment for the Investor and that at this
time the Investor could bear a complete loss of an investment in the Shares.
3.4 Risks. The Investor understands that an investment in the
Company is speculative, that any possible profits therefrom are uncertain,
and that the Investor must bear the economic risks of the investment in the
Company for an indefinite period of time. The Investor is able to bear these
economic risks and to hold the Shares for an indefinite period.
3.5 Information. The Investor has received all information and
data with respect to the Company which the Investor has requested and has
deemed relevant in connection with an evaluation of the merits and risks of
the purchase of the Shares, and the Investor does not desire any further
information or data with respect to the Company prior to the purchase of the
Shares.
3.6 Domicile. The Trustee is domiciled in the State of
Pennsylvania. The Investor's investment decisions made in connection with
this Agreement, including the decision to purchase the Shares, were made in
the State of New York.
3.7 Federal Securities Laws. The Investor understands that the
Shares have not been registered under the Securities Act of 1933, as amended
(the "Act"), in reliance on the exemption from registration provided by
Section 4(2) of the Act. In furtherance thereof, the Investor represents and
warrants to the Company that:
(a) The Investor has the financial ability to bear the
economic risk of this investment, has adequate means for providing for
the current needs and contingencies of the Investor and has no need for
liquidity with respect to the investment in the Company; and
(b) The Investor is an entity that qualifies as an
"accredited investor" under Rule 501 of Regulation D.
3.8 State Securities Laws. The Investor understands that the
Shares have not been registered or qualified with, nor has a permit been
obtained for the issuance of the Shares from, any state securities authority.
The Investor is aware of any and all restrictions imposed by the Company in
the Organization Agreement and the Stockholders Agreement on the further
distribution of the Shares, including, but not limited to, any restrictive
legends appearing on the stock certificates evidencing the Shares, required
holding periods, stop transfer orders or buyback rights of the Company or the
holders of its securities.
3.9 Transfers. The Investor understands that the Shares may
have to be held indefinitely unless they are subsequently registered under
the Act and qualified or registered under other applicable securities laws,
including state securities laws, or unless an exemption from such
qualification or registration is available. The Company has no obligation to
so qualify or register the Shares except such obligations, if any, as are
contained in the Organization Agreement and the Stockholders Agreement.
3.10 Legend. The Investor understands and agrees that a legend
in the form provided in Section 3.3 of the Organization Agreement will be
placed on the certificate evidencing the Shares and on certificates issued to
transferees.
3.11 Solicitation. To the Investor's knowledge, the offer and
sale of the Shares was not effected by any form of general solicitation or
general advertising or accomplished by the publication of any advertisement.
4. Covenants. As an inducement to the Investor to purchase the
Shares, the Company makes the following covenants (which covenants shall
survive the Closing Date);
4.1 Compliance with Agreements. The Company shall perform and
observe (i) all of its obligations to stockholders of the Company set forth
in the Company's Certificate of Incorporation and by-laws and (ii) all of its
obligations to the Investor as set forth in the Organization Agreement.
4.2 Current Public Information. The Company shall file all
reports required to be filed by it under the Act and the Exchange Act and the
rules and regulations adopted by the Securities and Exchange Commission
thereunder and shall take such further action as the Investor may reasonably
request, all to the extent required to enable the Investor to sell Shares
pursuant to (i) Rule 144 adopted by the Securities and Exchange Commission
under the Act (as such rule may be amended from time to time) or any similar
rule or regulation hereafter adopted by the Securities and Exchange
Commission or (ii) a registration statement on Form S-2 or S-3 or any similar
registration form hereafter adopted by the Securities and Exchange
Commission. Upon request, the Company shall deliver to the Investor a
written statement as to whether it has complied with such requirements.
4.3 Public Disclosures. The Company shall not, nor shall it
permit any subsidiaries to, disclose the Investor's name or identity as an
investor in the Company in any press release or other public announcement or
in any document or material filed with any governmental entity, without the
prior written consent of the Investor, unless such disclosure is required by
applicable law or governmental regulations or by order of a court of
competent jurisdiction, in which case prior to making such disclosure the
Company shall give written notice to the Investor describing in reasonable
detail the proposed content of such disclosure and shall permit the Investor
to review and comment upon the form and substance of such disclosure.
4.4 Repurchase of Shares. In the event that the Del Monte Asset
Acquisition is not consummated on the Closing Date, the Company shall invest
the $15 million received as the purchase price of the Shares in a short-term
(i.e., open-ended or overnight) investment fund designated by the Investor,
which fund shall be of a type in which pension funds are generally permitted
to invest. If the Del Monte Asset Acquisition does not occur within three
days after the Closing Date, then (i) the Company shall seek further
instruction from the Investor and the Investor shall have the right at such
time to require the Company to repurchase the Shares at a price equal to $15
million plus any amounts earned from the investment of such funds pursuant to
this Section 4.5 and (ii) the Company shall have the right at such time to
rescind the sale of the Shares to the Investor.
5. Conditions of the Investor's Obligation at the Closing. The
obligation of the Investor to purchase the Shares at the Closing is subject
to the satisfaction as of the Closing of the following conditions:
5.1 Representations and Warranties; Performance. The
representations and warranties contained in Section 2 hereof shall be true
and correct in all material respects at and as of the Closing as though then
made, and the Company shall have performed and complied with in all material
respects all of the agreements, obligations and conditions required to be
performed or complied with by it hereunder on or prior to the Closing.
5.2 Organization Agreement. The Organization Agreement shall
have been entered into by the parties thereto, shall be substantially in the
form attached hereto as Exhibit A and the Organization Agreement shall be in
full force as of the Closing.
5.3 Stockholders Agreement. The Stockholders Agreement shall
have been entered into by the parties thereto, shall be substantially in the
form attached hereto as Exhibit B and shall be in full force as of the
Closing.
5.4 Asset Purchase Agreement. The Asset Purchase Agreement
shall be in full force and effect as of the Closing and shall not have been
amended or modified in any material respect from the executed agreement dated
as of September 3, 1993 and amended as of December 10, 1993. The conditions
in Article X of the Asset Purchase Agreement shall have been satisfied in
full (without reliance on any waiver by SCC). The Investor shall be
satisfied that the Del Monte Asset Acquisition will be consummated promptly
after the Closing.
5.5 Supply Agreement. The Supply Agreement shall be in full
force and effect as of the Closing and shall not have been amended or
modified in any material respect from the executed agreement dated as of
September 3, 1993 and amended as of December 21, 1993.
5.6 Bank Agreement. The Bank Agreement shall have been entered
into by the parties thereto, shall be substantially in the form attached
hereto as Exhibit C and shall be in full force as of the Closing.
5.7 Management Services Agreement. The Amended and Restated
Management Services Agreement between S&H Inc. and the Company shall have
been entered into, shall be substantially in the form attached hereto as
Exhibit D and shall be in full force as of the Closing.
5.8 Amendment of Certificate of Incorporation. The Company's
Restated Certificate of Incorporation shall have been amended and restated to
be substantially in the form of Exhibit E hereto.
5.9 Opinion of the Company's Counsel. The Investor shall have
received from Winthrop, Stimson, Putnam & Roberts, counsel for the Company,
an opinion with respect to the matters set forth in Exhibit F hereto, which
shall be addressed to the Investor, dated the date of the Closing and in form
and substance reasonably satisfactory to the Investor.
5.10 Closing Documents. The Company shall have delivered to the
Investor all of the following documents:
(i) certified copies of the resolutions duly adopted by the
Company's board of directors authorizing the execution, delivery and
performance of this Agreement, the Organization Agreement and the
Stockholders Agreement, the issuance and sale of the Shares and
consummation of all other transactions contemplated by this Agreement;
(ii) a certified copy of the Certificate of Incorporation
of the Company as in effect at the Closing;
(iii) copies of all third party and governmental consents,
approvals and filings required in connection with the consummation of
the transactions hereunder (including, without limitation, all blue sky
law filings);
(iv) a certificate of the President or Executive Vice
Prsident of the Company, dated as of the date of Closing, stating that
the conditions specified in paragraphs 5.1 through 5.8, inclusive, have
been fully satisfied; and
(v) such other documents relating to the transactions
contemplated by this Agreement, the Organization Agreement, the
Stockholders Agreement, the Bank Agreement, the Asset Purchase Agreement
and the Supply Agreement as the Investor or its counsel may reasonably
request.
5.11 Proceedings. All corporate and other proceedings taken or
required to be taken in connection with the transactions contemplated by this
Agreement or the Organization Agreement to be consummated at or prior to the
Closing and all documents incident thereto shall be satisfactory in form and
substance to the Investor and its counsel.
5.12 Litigation. No suit, action, investigation, inquiry or
other proceeding by any governmental authority shall be pending and no
preliminary or permanent injunction or order by a state or federal court
shall have been entered, and no hearing relating to any such injunction or
order to be issued shall be pending or noticed, as to which there is a
reasonable likelihood of an adverse determination and which if determined
adversely would be likely in the good-faith opinion of the Investor to have a
material adverse effect on (x) the consummation of the Del Monte Asset
Acquisition, (y) the ability of the Company to enforce its rights or to
perform its obligations under the Supply Agreement or (z) the ability of the
Company to perform its obligations under this Agreement or the Organization
Agreement or the validity or enforceability of this Agreement or the
Organization Agreement or the rights, remedies and benefits of the Investor
under this Agreement or the Organization Agreement.
6. Miscellaneous.
6.1 Expenses. The Company agrees to pay, and hold the Investor
harmless against liability for the payment of all of the Investor's out of
pocket expenses relating to the transactions contemplated by this Agreement,
including but not limited to, (i) the reasonable fees and expenses of its
counsel arising in connection with the negotiation and execution of this
Agreement and the Organization Agreement and the consummation of the
transactions contemplated herein and therein (including, without limitation,
the due diligence review performed by the Investor) which shall be payable at
the Closing and (ii) stamp and other taxes which may be payable in respect of
the execution and delivery of this Agreement and the Organization Agreement
or the issuance, delivery or acquisition of the Shares.
6.2 Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Investor, the beneficial owner of the Shares
held by a nominee or any named fiduciary acting for the Investor, and the
advisors acting for any such named fiduciary in connection with this
Agreement, and the respective directors, officers, trustees, fiduciaries,
employees and agents of the foregoing persons from and against all losses,
claims, damages, liabilities and expenses (including expenses of litigation
and preparation therefor and other reasonable fees and disbursements of
counsel) (collectively, "Losses") which any such indemnified party may incur
or which may be asserted against any such indemnified party in connection
with or arising out of any breach of any representations, warranties or other
agreements of the Company contained in this Agreement.
(b) The Investor agrees to indemnify and hold harmless the
Company and the directors, officers, employees and agents of the Company from
and against all Losses which any such indemnified party may incur or which
may be asserted against any such indemnified party in connection with or
arising out of any breach of any representations, warranties or other
agreements of the Investor contained in this Agreement.
(c) If the indemnification provided for in subparagraphs
(a) and (b) of this Section 6.2 is unavailable to any party entitled to
indemnification thereunder (an "Indemnified Party") in respect of any Losses,
then each party required to provide indemnification thereunder (an
"Indemnifying Party"), in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and the Indemnified
Party on the other in connection with such Losses, as well as any other
relevant equitable considerations.
6.3 Governing Law; Jurisdiction; Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York without giving effect to any choice of law or conflicts of law provision
or rule (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
State of New York.
6.4 Notices. All notices and other communications under this
Agreement shall be in writing, and shall be deemed to have been duly given on
the date of service if served personally or on the second day after mailing
if mailed to the parties to whom notice is to be given by first-class mail,
registered or certified, postage prepaid at the address of such party (until
such address is changed by notice duly given) set forth on Exhibit G.
6.5 Severability. In the event one or more of the provisions of
this Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
6.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but all of which, when
taken together, shall constitute one and the same agreement. This Agreement
shall become effective when one or more counterparts has been signed by each
of the parties and delivered to the other party.
6.7 Entire Agreement. This Agreement (including the exhibits
hereto, which are hereby incorporated herein by reference) constitutes and
contains the entire agreement of the parties with respect to the transactions
contemplated by this Agreement and supersedes all prior or contemporaneous
negotiations, correspondence, arrangements, letters of intent, understandings
and agreements relating to those transactions.
6.8 Headings. The section headings in this Agreement have been
inserted for identification and reference and shall not by themselves
determine the meaning or interpretation of any provision of this Agreement.
6.9 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, personal representatives and permitted assigns.
6.10 Costs of Enforcement. If any party to this Agreement seeks
to enforce its rights under this Agreement by legal proceedings or otherwise,
or seeks a declaration of any rights or obligations under this Agreement, the
non-prevailing party shall pay all costs and expenses incurred by the
prevailing party, including, without limitation, all legal fees and expenses.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
COMPANY: SILGAN HOLDINGS INC.
a Delaware corporation
By: /s/ Harley Rankin, Jr.
----------------------------------
Title: Executive Vice President
INVESTOR: FIRST PLAZA GROUP TRUST
By: MELLON BANK, N.A. as Trustee (as directed by
General Motors Investment Management Corporation)
By: /s/ Judith A. Manion
----------------------------------
Title: Paralegal
Exhibit G
ADDRESSES
FIRST PLAZA GROUP TRUST
c/o General Motors Investment
Management Corporation
767 Fifth Avenue
New York, New York 10153
Attn: Private Market Investments
Facsimile: (212) 418-3651
SILGAN HOLDINGS INC.
4 Landmark Square, Suite 301
Stamford, Connecticut 06901
Attention: R. Philip Silver
Facsimile: (203) 975-7902
Exhibit 9
CREDIT AGREEMENT
among
SILGAN CORPORATION,
SILGAN CONTAINERS CORPORATION,
SILGAN PLASTICS CORPORATION,
VARIOUS BANKS,
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION,
as CO-AGENT
and
BANKERS TRUST COMPANY,
as AGENT
___________________
Dated as of December 21, 1993
___________________
TABLE OF CONTENTS
-----------------
Page
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 . . . . . . . . . . . . . . . . . . . . . 5
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . 6
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.06 Conversions . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . 9
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . 10
1.10 Increased Costs, Illegality, etc. . . . . . . . . . . . . . . 11
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.12 Change of Applicable Lending Office . . . . . . . . . . . . . 14
Section 2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 15
2.01 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 15
2.02 Minimum Stated Amount . . . . . . . . . . . . . . . . . . . . 17
2.03 Letter of Credit Requests . . . . . . . . . . . . . . . . . . 17
2.04 Letter of Credit Participations . . . . . . . . . . . . . . . 17
2.05 Agreement to Repay Letter of Credit Drawings . . . . . . . . . 19
2.06 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3. Fees; Commitments; Reductions of Commitments . . . . . . . . 20
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.02 Voluntary Termination of Working Capital Commitments . . . . . 22
3.03 Mandatory Reduction or Termination of Commitments . . . . . . 22
Section 4. Prepayments; Payments; Commitment and Available Amount
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . 23
4.02 Mandatory Prepayments; Commitment and Available Amount
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . . 27
4.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . 30
5.01 Conditions to Loans on the Initial Borrowing Date . . . . . . 30
(a) Execution of Agreement; Notes . . . . . . . . . . . . . 30
(b) Officer's Certificate . . . . . . . . . . . . . . . . . 30
(c) Opinions of Counsel . . . . . . . . . . . . . . . . . . 30
(d) Corporate Documents; Proceedings . . . . . . . . . . . . 30
(e) Plans; Shareholders' Agreements; Management Agreements;
Debt Agreements . . . . . . . . . . . . . . . . . . . . 31
(f) Holdings Common Stock Issuance . . . . . . . . . . . . . 31
(g) Repayment and Termination of Commitments under the
Existing Credit Agreements. . . . . . . . . . . . . . . 32
(h) The Acquisition . . . . . . . . . . . . . . . . . . . . 32
(i) Guaranties . . . . . . . . . . . . . . . . . . . . . . . 32
(j) Contribution Agreement . . . . . . . . . . . . . . . . . 33
(k) Pledge Agreements . . . . . . . . . . . . . . . . . . . 33
(l) Security Agreement . . . . . . . . . . . . . . . . . . . 34
(m) Mortgages; Title Insurance; Surveys; etc. . . . . . . . 35
(n) Adverse Change, etc. . . . . . . . . . . . . . . . . . . 36
(o) Litigation . . . . . . . . . . . . . . . . . . . . . . . 37
(p) Fees, etc. . . . . . . . . . . . . . . . . . . . . . . . 37
(q) Solvency Certificate; Environmental Analyses . . . . . . 37
(r) Notices to Holders of Certain Indebtedness and to the
Collateral Agent . . . . . . . . . . . . . . . . . . . . 37
(s) Consent Letter . . . . . . . . . . . . . . . . . . . . . 38
(t) Financial Projections . . . . . . . . . . . . . . . . . 39
(u) Initial Borrowing Base Certificate and Report of
Inventory
and Accounts Receivable . . . . . . . . . . . . . . . . 39
(v) Tax Sharing Agreement . . . . . . . . . . . . . . . . . 39
(w) Insurance . . . . . . . . . . . . . . . . . . . . . . . 39
(x) Intercompany Agency Agreement . . . . . . . . . . . . . 40
5.02 Conditions to Working Capital Loans and Letters of Credit on
and
after the Initial Borrowing Date . . . . . . . . . . . . . . 40
(a) No Borrowing Base Deficiency . . . . . . . . . . . . . . 40
(b) Additional PCP Acquisition Conditions . . . . . . . . . 40
5.03 Conditions to All Credit Events . . . . . . . . . . . . . . . 40
(a) No Default . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Representations and Warranties . . . . . . . . . . . . . 40
(c) Notice of Borrowing; Letter of Credit Request . . . . . 40
(d) Subsequent Legal Opinions . . . . . . . . . . . . . . . 41
(e) Corporate Proceedings . . . . . . . . . . . . . . . . . 41
(f) No Future Advances Notice . . . . . . . . . . . . . . . 41
Section 6. Representations, Warranties and Agreements . . . . . . . . . 42
6.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . 42
6.02 Corporate Power and Authority . . . . . . . . . . . . . . . . 42
6.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.04 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 43
6.05 Pledge Agreements . . . . . . . . . . . . . . . . . . . . . . 43
6.06 Security Agreement; Mortgages; Real Property . . . . . . . . . 43
6.07 Financial Statements; Financial Condition; etc. . . . . . . . 44
6.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.09 True and Complete Disclosure . . . . . . . . . . . . . . . . . 45
6.10 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . 46
6.11 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . 46
6.12 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . 46
6.13 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 47
6.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.15 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . 48
6.16 Investment Company Act . . . . . . . . . . . . . . . . . . . . 49
6.17 Public Utility Holding Company Act . . . . . . . . . . . . . . 49
6.18 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . 50
6.19 Patents, Licenses, Franchises and Formulas . . . . . . . . . . 50
6.20 Transaction . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.21 Representations and Warranties in Acquisition Documents . . . 51
6.22 Subordination . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . 51
7.01 Information Covenants . . . . . . . . . . . . . . . . . . . . 51
7.02 Books, Records and Inspections . . . . . . . . . . . . . . . . 54
7.03 Maintenance of Property, Insurance . . . . . . . . . . . . . . 55
7.04 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . 55
7.05 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . 55
7.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.07 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . 56
7.08 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.09 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.10 Additional Security; Further Assurances; etc. . . . . . . . . 57
7.11 Foreign Subsidiaries Security . . . . . . . . . . . . . . . . 58
7.12 Registry . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 8. Negative Covenants . . . . . . . . . . . . . . . . . . . . . 59
8.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.02 Consolidation, Merger, Sale of Assets, etc. . . . . . . . . . 60
8.03 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.04 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.05 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.06 Advances, Investments and Loans . . . . . . . . . . . . . . . 65
8.07 Transactions with Affiliates . . . . . . . . . . . . . . . . . 68
8.08 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . 68
8.09 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . 69
8.10 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . 69
8.11 Total Indebtedness to Consolidated Net Worth . . . . . . . . . 70
8.12 Limitation on Voluntary Payments and Modifications of Senior
Notes or Senior Subordinated Notes; Modifications of
Documents, Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. . . . . . . . . . . . . . . . . . . . 70
8.13 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.14 Limitation on Restrictions on Subsidiary Dividends and Other
Distributions . . . . . . . . . . . . . . . . . . . . . . . . 71
8.15 Limitation on Issuances of Capital Stock by Subsidiaries . . . 72
8.16 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.17 Change of Name . . . . . . . . . . . . . . . . . . . . . . . . 72
8.18 Consummation of PCP Acquisition . . . . . . . . . . . . . . . 72
Section 9. Events of Default . . . . . . . . . . . . . . . . . . . . . . 73
9.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.02 Representations, etc. . . . . . . . . . . . . . . . . . . . . 74
9.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.04 Default Under Other Agreements . . . . . . . . . . . . . . . . 74
9.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . 74
9.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.07 Pledge Agreements . . . . . . . . . . . . . . . . . . . . . . 75
9.08 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.09 Security Agreements; Mortgages; Additional Security Documents 76
9.10 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.11 Ownership; Change of Control . . . . . . . . . . . . . . . . . 76
Section 10. Definitions and Accounting Terms . . . . . . . . . . . . . . 77
10.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 77
10.02 Principles of Construction . . . . . . . . . . . . . . . . . 101
Section 11. The Agent and Co-Agent . . . . . . . . . . . . . . . . . . . 102
11.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.02 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . 102
11.03 Lack of Reliance on the Agent and Co-Agent . . . . . . . . . 102
11.04 Certain Rights of the Agent . . . . . . . . . . . . . . . . . 103
11.05 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . 103
11.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 103
11.07 The Agent and the Co-Agent in Their Individual Capacity . . . 103
11.08 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
11.09 Resignation by the Agent and the Co-Agent . . . . . . . . . . 104
Section 12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 105
12.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . . 105
12.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . 106
12.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
12.04 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . 106
12.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . 108
12.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . 108
12.07 Calculations; Computations . . . . . . . . . . . . . . . . . 109
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE . . . . . . 109
12.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 110
12.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . 110
12.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . 111
12.12 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . 111
12.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 112
12.14 Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . 112
12.15 Provision Inserted Pursuant to Local Real Estate Law . . . . 112
12.16 Confidentiality . . . . . . . . . . . . . . . . . . . 112
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 Working Capital Note
Exhibit B-4 Swingline Note
Exhibit C Letter of Credit Request
Exhibit D Section 4.04(b)(iii) 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 Amendment to Silgan Pledge Agreement
Exhibit H-2 Amendment to Subsidiaries Pledge Agreement
Exhibit H-3 Amendment to Holdings Pledge Agreement
Exhibit I Amendment to Security Agreement
Exhibit J Solvency Certificate
Exhibit K Consent Letter
Exhibit L Inventory and Accounts Receivable Report
Exhibit M Borrowing Base Certificate
Exhibit N Assignment and Assumption Agreement
CREDIT AGREEMENT, dated as of December 21, 1993, among SILGAN COR-
PORATION, 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"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Co-Agent (in such
capacity, the "Co-Agent"), and BANKERS TRUST COMPANY, as Agent (in such
capacity, the "Agent"). 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, on the Initial Borrowing Date, a term loan (each,
an "A Term Loan" and, collectively, the "A Term Loans") to Silgan, which A
Term Loans (x) shall be made and initially maintained as a single Borrowing
of Base Rate Loans (subject to the option to convert such A Term Loans
pursuant to Section 1.06) and (y) shall not exceed for any Bank, in initial
aggregate principal amount, that amount which equals 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 on or prior to such date pursuant to Section
3.03(b)(i)(y)). Once repaid, A Term Loans incurred herunder 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. Notwithstanding anything to the
contrary contained in this Agreement, if the aggregate principal amount of
Term Loans incurred on the Initial Borrowing Date is less than the Total Term
Loan Commitment as then in effect, Silgan shall be required to borrow A Term
Loans and B Term Loans pro rata based upon the amount of the Total A Term
Loan Commitment, on the one hand, and the Total B Term Loan Commitment, on
the other hand.
(c) Subject to and upon the terms and conditions set forth herein,
each Bank with a Working Capital Commitment severally agrees, at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Working Capital Loan Maturity Date, to make a revolving loan or revolving
loans (each, a "Working Capital Loan" and, collectively, the "Working Capital
Loans") to Containers or Plastics, as the case may be, which Working Capital
Loans:
(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 Working Capital Loans made as part of the same Borrowing shall,
unless otherwise specifically provided herein, be of the same Type and
(B) no Working Capital Loans maintained as Eurodollar Loans may be
incurred prior to the earlier of (x) the 90th day after the Initial
Borrowing Date and (y) 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 Working Capital 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
Working Capital Loans) then outstanding, equals the Working Capital
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 Working Capital 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
Working Capital 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 Working Capital 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
Working Capital Loans) then outstanding, equals the Total Working
Capital 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 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 Working Capital 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 Working Capital 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
Working Capital 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 Working Capital Loans) at such time, an amount equal to
the Total Working Capital 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 Working Capital Loans (provided that such notice shall be
deemed to have been automatically given upon the occurrence of a Default or
an Event of Default under Section 9.05 or 9.11(iii) 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 Working Capital 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 Working Capital Commitment (without giving effect to any termination
thereof pursuant to the last paragraph of Section 9) pro rata based on each
Bank's Percentage (determined before giving effect to any termination of the
Working Capital 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 Working Capital 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 not-
withstanding (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 Working
Capital 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 Working Capital 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 Working Capital 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 and, if greater, shall be in an integral multiple of
$1,000,000.
(b) The aggregate principal amount of each Borrowing of Working
Capital Loans shall be not less than $1,000,000 and, if greater, shall be in
an integral multiple of $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 and, if greater, shall be in an
integral multiple of $50,000.
(d) More than one Borrowing may occur on the same date, but at no
time shall there be outstanding more than ten Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever a Borrower desires to
make a Borrowing of Loans hereunder (excluding Borrowings of Swingline Loans
and Mandatory Borrowings), it shall give the 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 made
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 Working Capital
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
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 make a
Borrowing of 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 made,
written notice or telephonic notice promptly confirmed in writing of each
Swingline Loan to be made 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 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 so 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. Except as otherwise specifically
provided in the immediately succeeding sentence, 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
Agent, and the 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 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 Agent such
Bank's portion of any Borrowing to be made on such date, the Agent may assume
that such Bank has made such amount available to the Agent on such date of
Borrowing and the 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 Agent by such Bank, the 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
Agent's demand therefor, the Agent shall promptly notify the relevant
Borrower and such Borrower shall immediately pay such corresponding amount to
the Agent. The 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 Agent to such Borrower until the date such cor-
responding amount is recovered by the 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 respec-
tive Borrowing, as determined pursuant to Section 1.08. Nothing in this
Section 1.04 shall be deemed to relieve any Bank from its 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 here-
under.
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 Working Capital Loans, by promissory notes duly executed
and delivered by each of Containers and Plastics substantially in the form of
Exhibit B-3 (each, a "Working Capital Note" and, collectively, the "Working
Capital 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
principal amount of A Term Loans made by such Bank on the Initial Borrowing
Date and 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 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 Working Capital Note issued by each of Containers and
Plastics to each Bank with a Working Capital 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 Working Capital Commitment of such
Bank and be payable in the outstanding principal amount of the Working
Capital Loans evidenced thereby, (iii) mature on the Working Capital 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 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 and (v) 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 earlier of (x) the 90th day
after the Initial Borrowing Date and (y) the Syndication Date, all or a
portion equal to at least $5,000,000 (and, if greater, in an integral
multiple of $1,000,000) in the case of a Borrowing of any Tranche of Term
Loans and equal to at least $1,000,000 (and, if greater, in an integral
multiple of $500,000) in the case of a Borrowing of Working Capital 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 $1,000,000 in the case of a Borrowing of Working Capital 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 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 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 to which
such Loans were made and, if to be converted into Eurodollar Loans, the
Interest Period to be initially applicable thereto. The 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 Working Capital Loans under this Agreement shall be incurred from
the Banks pro rata on the basis of their A Term Loan Commitments, B Term Loan
Commitments or Working Capital 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 to make its 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.
(e) Upon each Interest Determination Date, the 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 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 or six 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;
(vi) no Interest Period in respect of any Borrowing of A Term Loans
shall be selected which extends beyond any date upon which a mandatory
repayment of A Term Loans will be required to be made under Section
4.02(c) if the aggregate principal amount of A Term Loans which have
Interest Periods which will expire after such date will be in excess of
the aggregate principal amount of A Term Loans 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 Bor-
rowing 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 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
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 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 Agent of such determination (which notice the 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 Agent notifies the respective Borrowers and the respective Banks that the
circumstances giving rise to such notice by the 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 Agent telephonic notice (confirmed in
writing) thereof on the same date that such Borrower was notified by the Bank
or the 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 Agent, require the affected Bank to convert each
such Eurodollar Loan 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 such 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 compensa-
tion 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 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 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 4.02 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 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) in the case of a refusal by
a Bank to consent to a proposed change, waiver, discharge or termination with
respect to this Agreement which has been approved by the Required Banks as
provided in Section 12.12(b), Silgan shall have the right, if no Default or
Event of Default then exists, to replace such Bank (the "Replaced Bank") with
one or more other Eligible Transferee or Transferees (collectively, the
"Replacement Bank") acceptable to the 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 Replaced
Bank's Percentage of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) 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 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, which shall survive as to such Replaced
Bank.
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 Working Capital 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 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. 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 the Bank Default, including by cash collateralizing such
Bank's Percentage of the Letter of Credit Outstandings.
(b) 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 Working Capital
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 compen-
sated) 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).
(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) $15,000,000 and (y) when added to the
aggregate principal amount of all Working Capital Loans and Swingline Loans
then outstanding, an amount equal to the Total Working Capital Commitment at
such time (after giving effect to any reductions to the Total Working Capital
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 respective Letter of Credit) at such time and (y) the
aggregate principal amount of all Working Capital Loans and Swingline Loans
then outstanding, would exceed an amount equal to the Borrowing Base at such
time, and (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 Working Capital Loan Maturity Date, on
terms acceptable to BTCo) and (y) the Working Capital Loan Maturity Date.
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 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 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 Agent and each Bank of such issuance or amendment and deliver to the
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 Working Capital 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 therefor or guaranty
pertaining thereto. Upon any change in the Working Capital Commitments of
the Banks pursuant to Section 12.04, 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 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 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 Agent, which shall promptly notify each Participant
of such failure, and each Participant shall promptly and unconditionally pay
to the 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 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 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 Agent
for the account of BTCo, such Participant agrees to pay to the 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 Agent for the account of BTCo at the overnight Federal Funds Rate. The
failure of any Participant to make available to the 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 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
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 Agent has received for the account of BTCo any payments from
the respective Participants pursuant to clause (c) above, BTCo shall pay to
the Agent and the 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 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 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 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
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 in-
accurate 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 Agent in immediately available funds at the Payment Office, for any pay-
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 Working Capital 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 Working Capital 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 copy of which
notice shall be sent by BTCo or such Participant to the 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
Working Capital 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 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 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 or, if earlier, on 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 Agent for distribution to each Bank with a Working Capital
Commitment a commitment commission (the "Working Capital Commitment
Commission") for the period from the Effective Date to but excluding the
Working Capital Loan Maturity Date (or such earlier date as the Total Working
Capital Commitment shall have been terminated), computed at a rate equal to
1/2 of 1% per annum on the daily average Unutilized Working Capital
Commitment of such Bank. Accrued Working Capital Commitment Commission shall
be due and payable quarterly in arrears on each Quarterly Payment Date and on
the Working Capital Loan Maturity Date or upon such earlier date as the Total
Working Capital Commitment shall have been terminated.
(c) Each of Containers and Plastics jointly and severally agrees
to pay to the Agent for proportionate distribution to each Bank with a
Working Capital 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 Letters of Credit, from the
Initial Borrowing Date) to and including the termination of such Letter of
Credit, computed at a rate per annum of 3% on the daily average 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 Working Capital Commitment upon
which no Letters of Credit remain outstanding.
(d) Each of Containers and Plastics jointly and severally agrees
to pay to the Agent, for the account of BTCo, 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 Working Capital Commitment
upon which no Letters of Credit remain outstanding.
(e) Each of Containers and Plastics jointly and severally agrees
to pay to the Agent, for the account of BTCo, 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 Agent
and the Co-Agent, for their own accounts, such fees as may be agreed to from
time to time between the Borrowers and the Agent and Co-Agent.
3.02 Voluntary Termination of Working Capital Commitments. Upon
at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) by any Borrower to the Agent at its Notice
Office (which notice the Agent shall promptly transmit to each of the Banks),
any Borrower shall have the right, with out premium or penalty, to terminate
the Total Unutilized Working Capital 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 Working Capital Commitment of
each 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 Working Capital Commitment of each Bank) shall terminate on December
31, 1993 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) terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of the A Term Loans
on such date) and (y) prior to the termination of the Total A Term Loan
Commitment as provided in clause (x) 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 giving effect to the making of the B Term Loans
on such date) and (y) prior to the termination of the Total B Term Loan
Commitment as provided in clause (y) 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 Working Capital Commitment (and the
Working Capital Commitment of each Bank) shall terminate in its entirety on
the Working Capital 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), (g), (h) and/or (j) is required (and exceeds in amount the aggregate
principal of Term Loans then outstanding) or would be required if Term Loans
were then outstanding, the Total Working Capital 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.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Working Capital Commitment shall be
permanently reduced at the time of any voluntary prepayment of B Term Loans
made pursuant to Section 4.01 in an amount which equals the Total Working
Capital Commitment at such time multiplied by a fraction the numerator of
which is the principal amount of B Term Loans so prepaid and the denominator
of which is the total principal amount of B Term Loans then outstanding
(immediately before giving effect to such prepayment).
(f) Each reduction to the Total A Term Loan Commitment, the Total
B Term Loan Commitment and the Total Working Capital 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 Working Capital Commitment, as
the case may be, of each Bank with such a Commitment.
Section 4. Prepayments; Payments; Commitment and Available Amount
Reductions.
4.01 Voluntary Prepayments. 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 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, Working Capital Loans or Swingline Loans shall be
prepaid, the amount of such prepayment and the Types of Loans to be prepaid
and, in the case of Eurodollar Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice the 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 $1,000,000 in the case of a Borrowing of
Working Capital Loans, then such Borrowing may not be continued as a
Borrowing of Eurodollar Loans and any election of an Interest Period with
respect thereto given by such Borrower shall have no force or effect; (iii)
prepayments of Eurodollar Loans made pursuant to this Section 4.01 may only
be made on the last day of an Interest Period applicable thereto; (iv)
prepayments of B Term Loans pursuant to this Section 4.01 may only be made
after all A Term Loans have been repaid in full; (v) each prepayment in
respect of any Tranche of Loans made pursuant to a Borrowing shall be applied
pro rata among such Tranche of Loans and (vi) each voluntary prepayment of B
Term Loans shall be accompanied by a reduction to the Total Working Capital
Commitment as provided in Section 3.03(e).
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 Working
Capital Loans in an amount equal to such remaining Borrowing Base Deficiency
and, to the extent such Borrowing Base Deficiency exceeds the principal
amount of then outstanding Working Capital 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 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 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 Working Capital Loans, Swingline Loans and the Letter of
Credit Outstandings exceeds the Total Working Capital Commitment as then in
effect, Containers and/or Plastics shall prepay on such day principal of
Swingline Loans and, after the Swingline Loans have been repaid in full,
Working Capital Loans in an amount equal to such excess. If, after giving
effect to the prepayment of all outstanding Swingline Loans and Working
Capital Loans, the aggregate amount of the Letter of Credit Outstandings
exceeds the Total Working Capital Commitment as then in effect, Containers
and/or Plastics shall pay to the 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 Working Capital Commitment as then
in effect equals or exceeds the sum of the aggregate outstanding principal
amount of Working Capital 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
and Section 4.02(i), an "A Term Loan Scheduled Repayment," and each such
date, an "A Term Loan Scheduled Repayment Date"):
A Term Loan
Scheduled Repayment Date Amount
------------------------ ------
September 30, 1994 $ 5,000,000
December 31, 1994 $15,000,000
September 30, 1995 $ 5,000,000
December 31, 1995 $15,000,000
September 15, 1996 $20,000,000
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, Silgan shall be required to repay
in full on the B Term Loan Maturity Date the principal amount of all B Term
Loans then outstanding.
(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 75% of Excess Cash Flow for the relevant Excess Cash
Payment Period shall be applied as required by 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 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 $100,000 per sale) by Silgan or any of
its Subsidiaries on or after the Effective Date, and on the date of each sale
or issuance of equity by any Subsidiary of Silgan (except sales or issuances
of equity to Silgan to the extent that the sale or issuance thereof does not
give rise to a repayment of (or an obligation to make an offer to repay)
Senior Notes in accordance with the terms of the Senior Note Agreement), an
amount equal to 80% of the Net Sale Proceeds from such sale of assets or 100%
of the Net Equity Proceeds from such sale or issuance of equity, shall in
each case be applied as a mandatory repayment (or, in the case of the Bank
Debt, a repayment and/or commitment reduction, together with any prepayments
or cash collateralizations required as a result thereof) of the then
outstanding Senior Debt, with each Issue of Senior Debt to receive its Share
of the amount required to be so applied (except to the extent the holders of
the Senior Notes do not require that their full Share be so applied to prepay
Senior Notes, in which case the amount of their Share not so applied to
prepay Senior Notes shall be applied to the Bank Debt as required below) and
with the amount required to repay Bank Debt to be applied as required by the
immediately succeeding sentence; provided, however, that to the extent the
amount of Net Sale Proceeds from any sale of assets, together with the amount
of all prior Net Sale Proceeds realized from such sales of assets by Silgan
and any of its Subsidiaries from and after June 29, 1992, equals or is
greater than $7,000,000 an amount equal to 100% of such Net Sale Proceeds
from such sale shall be applied as a mandatory repayment of Senior Debt in
the manner provided in this clause (f). All amounts required to be applied
to Bank Debt pursuant to this Section 4.02(f) shall be applied as required by
Section 4.02(i).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, following any mandatory repayment
of Senior Debt required by Section 4.02(f) with respect to which the Shares
of the various Issues of Senior Debt have been calculated in accordance with
clause (A) of the definition of "Share", on the first date thereafter upon
which it is subsequently determined that the amount which will actually be
used to mandatorily prepay Senior Notes is less than the Share applicable
thereto (whether because the holders of the Senior Notes elected not to
receive such prepayment, or otherwise), then the amount which will not be so
used to mandatorily prepay the Senior Notes shall instead be applied to Bank
Debt on the same basis as is required by the last sentence of Section
4.02(f).
(h) Upon receipt thereof by Silgan or Holdings, an amount equal to
50% of the Net Equity Proceeds of any sale of equity by Silgan (except sales
of equity to Holdings) or Holdings (except sales of equity referred to in
Section 5.01(f)) shall be applied by Silgan in accordance with Section
4.02(i).
(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)
and (ii) second, to the extent in excess of the amount required to be applied
pursuant to preceding clause (i), such amount shall be applied to reduce the
Total Working Capital Commitment. The amount to be applied to repay
principal of Term Loans (or, if prior to the Initial Borrowing Date, as a
mandatory reduction to the Total Term Loan Commitment) as required by this
Section 4.02(i) shall be applied pro rata to each Tranche of Term Loans (with
each Tranche of Terms Loans to be allocated that percentage of the amount to
be applied as is equal to a fraction (expressed as a percentage) the
numerator of which is the then outstanding principal amount of such Tranche
of Term Loans (or, if prior to the Initial Borrowing Date, the Total A Term
Loan Commitment or the Total B Term Loan Commitment, as the case may be, as
then in effect) and the denominator of which is equal to the then outstanding
principal amount of all Term Loans (or, if prior to the Initial Borrowing
Date, the Total Term Loan Commitment as then in effect). The amount of each
principal repayment of A Term Loans (or, if prior to the Initial Borrowing
Date, the amount of each reduction to the Total A Term Loan Commitment) made
as required by this Section 4.02(i) shall be applied to reduce the then
remaining A Term Loan Scheduled Repayments on a pro rata basis (after giving
effect to all prior reductions thereto).
(j) If as a result of any Change of Control Silgan repurchases
less than 25% of the aggregate principal amount of Senior Notes then
outstanding pursuant to the terms of the Senior Note Agreement, Silgan shall,
on the date or dates that it is required to repurchase such Senior Notes,
apply as a mandatory repayment (or a repayment and/or commitment reduction,
together with any repayments or cash collateralizations required as a result
thereof) of then outstanding Bank Debt an amount equal to the aggregate
amount so applied to repurchase Senior Notes multiplied by a fraction the
numerator of which is the Bank Debt Amount immediately before giving effect
to such repayment and the denominator of which is the aggregate principal
amount of outstanding Senior Notes immediately before giving effect to the
respective repurchase of Senior Notes on such date. All amounts so required
to be applied to repay Bank Debt shall be applied as provided in Section
4.02(i).
(k) 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 $1,000,000 in the case of a Borrowing of Working Capital
Loans) such Borrowing shall immediately be converted into Base Rate Loans;
and (iii) each repayment of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans. In the absence of a designation by the
respective Borrower as described in the preceding sentence, the Agent shall,
subject to the above, make such designation in its sole discretion.
(l) 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.
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 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 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 immediately
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 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. 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. Each Borrower will furnish to the 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 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 which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for United States Federal income
tax purposes agrees (i) in the case of any such Bank that is a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and which constitutes a Bank
hereunder on the Initial Borrowing Date, to provide to each Borrower and the
Agent on or prior to the Initial Borrowing Date two original signed copies of
Internal Revenue Service Form 4224 or Form 1001 certifying to such Bank's
entitlement to an exemption from United States withholding tax with respect
to payments to be made under this Agreement and under any Note, (ii) in the
case of any such Bank that is a "bank" within the meaning of Section
881(c)(3)(A) of the Code, that, to the extent legally entitled to do so, (x)
with respect to a Bank that is an assignee or transferee of an interest under
this Agreement pursuant to Section 12.04 (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or transfer),
upon the date of such assignment or transfer to such Bank, and (y) with
respect to any such Bank, from time to time upon the reasonable written
request of any Borrower or the Agent after the Initial Borrowing Date, such
Bank will provide to such Borrower and the Agent two original signed copies
of Internal Revenue Service Form 4224 or Form 1001 (or any successor forms)
certifying to such Bank's entitlement to an exemption from, or reduction in,
United States withholding tax with respect to payments to be made under this
Agreement and under any Note, (iii) in the case of any such Bank (other than
a Bank described in clause (i) or (ii) above) which constitutes a Bank
hereunder on the Initial Borrowing Date, to provide to such Borrower and the
Agent, on or prior to the Initial Borrowing Date (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(iii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8, certifying to such Bank's
entitlement at the date of such certificate (assuming compliance by such
Borrower with Section 7.12) to an exemption from United States 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 and (iv) in the
case of any such Bank (other than a Bank described in clause (i) or (ii)
above), to the extent legally entitled to do so, (x) with respect to a Bank
that is an assignee or transferee of an interest under this Agreement
pursuant to Section 12.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), upon the date of
such assignment or transfer to such Bank, and (y) with respect to any such
Bank, from time to time upon the reasonable written request of such Borrower
or the Agent after the Initial Borrowing Date, to provide to such Borrower
and the Agent such other forms as may be required in order to establish the
entitlement of such Bank to an exemption from withholding with respect to
payments under this Agreement and under any Note. Notwithstanding anything
to the contrary contained in Section 4.04(a), but subject to 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 United States 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). Notwithstanding
anything to the contrary contained in the preceding sentence and except as
set forth in Section 12.04(b) in the case of subsequent assignees, 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.
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 Agent for the account of each of
the Banks the appropriate A Term Note, B Term Note and/or Working
Capital 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
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), (h), (n), (o),
and (p), 5.02 and 5.03 have been satisfied on such date.
(c) Opinions of Counsel. On the Initial Borrowing Date, the Agent
shall have received (i) from Winthrop, Stimson, Putnam & Roberts,
counsel to the Borrowers, an opinion addressed to the Agent, the Co-
Agent and each of the Banks and dated the Initial Borrowing Date
covering the matters set forth in Exhibit E and such other matters inci-
dent to the transaction contemplated herein as the Agent or Co-Agent may
reasonably request and (ii) from local counsel reasonably satisfactory
to the Agent and the Co-Agent opinions each of which shall be in form
and substance satisfactory to the Agent, the Co-Agent and the Required
Banks 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 Agent, the Co-Agent or the
Required Banks may reasonably request.
(d) Corporate Documents; Proceedings. (i) On the Initial
Borrowing Date, the 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 Agent and the Co-Agent in their reasonable
discretion.
(ii) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this
Agreement and the other Credit Documents and the Acquisition Documents
shall be satisfactory in form and substance to the Agent, the Co-Agent
and the Required Banks, and the Agent and the Co-Agent shall have
received all information and copies of all documents and papers, includ-
ing records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams, if any, which the Agent
or the Co-Agent 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 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 respec-
tive 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 Agent, the Co-Agent
and the Required Banks and shall be in full force and effect on the
Initial Borrowing Date.
(f) Holdings Common Stock Issuance. On or prior to the Initial
Borrowing Date, (x) Holdings shall have received cash proceeds in an
aggregate amount of at least $15,000,000 in connection with the issuance
by Holdings of its common stock to First Plaza Group Trust (a group
trust under and for the benefit of certain pension plans of General
Motors Corporation and its Subsidiaries), (y) Holdings shall have
contributed all of the proceeds received by it pursuant to the
immediately proceeding clause (x) to Silgan, which cash proceeds, when
aggregated with the amount available under the Total Term Loan
Commitment plus no more than $35,000,000 of Working Capital Loans
incurred on the Initial Borrowing Date, shall be sufficient to
consummate the Transaction and to pay all fees and expenses owing in
connection therewith, and (z) the Banks shall have received true and
correct copies of all documents executed and delivered in connection
with such issuance, each of which shall be in full force and effect and
shall be in form and substance satisfactory to the Agent, the Co-Agent
and the Required Banks. In addition, all new owners of the common stock
of Holdings and their relative equity interests in Holdings shall be
satisfactory to the Agent, the Co-Agent and the Required Banks.
(g) Repayment and Termination of Commitments under the Existing
Credit Agreements. On the Initial Borrowing Date, concurrently with the
consummation of the Transaction and the incurrence of Term Loans and
Working Capital 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 Agent and the Co-Agent shall have received
evidence in form, scope and substance satisfactory to them that the
matters set forth in this Section 5.01(g) have been satisfied on such
date.
(h) 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 form and substance
satisfactory to the Agent, the Co-Agent 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 Agent,
the Co-Agent and the Required Banks, to the satisfaction of the Agent,
the Co-Agent 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 and Containers shall have entered into the Supply
Contract. The assets constituting the Acquired Business shall have been
purchased by Containers free and clear of all Liens other than Permitted
Liens.
(i) Guaranties. (i) On the Initial Borrowing Date, Holdings
shall have duly authorized, executed and delivered an 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 and DM Can shall have duly authorized, executed and delivered
an 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.
(j) Contribution Agreement. On the Initial Borrowing Date, DM Can
shall have duly authorized, executed and delivered a counterpart to the
Contribution Agreement, whereby DM 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 Agent, the Co-Agent and the Required Banks, and the
Contribution Agreement shall be in full force and effect.
(k) 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 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 and
DM 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 DM 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 DM 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.
(l) Security Agreement. On the Initial Borrowing Date, (i)
Containers, Plastics and DM 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 DM 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(l), 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 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 DM 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 DM Can and the predecessor company
that owned such Security Agreement Collateral prior to the
consummation of the Acquisition, in each case as debtor and that
are filed in the jurisdictions referred to in said clause (a),
together with copies of such other Financing Statements (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.
(m) 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 Agent and the Co-Agent, 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 endorsements to the existing
Mortgage Policies assuring the Collateral Agent that each Existing
Mortgage is a valid and enforceable first priority mortgage 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 or by DM
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.
(n) Adverse Change, etc. (i) On the Initial Borrowing Date,
nothing shall have occurred (and the Banks shall have become aware of no
facts or conditions not previously known) which the Agent, the Co-Agent
or the Required Banks shall determine has, or could have, a material
adverse effect on the rights or remedies of the Agent, the Co-Agent or
the Banks, or on the ability of any Credit Party to perform its obliga-
tions to the Agent, the Co-Agent and the Banks or which has, or could
have, a materially adverse effect on the Acquired Business, Del Monte
and its Subsidiaries taken as a whole or the business, operations, prop-
erty, 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 third party approvals and
consents in connection with the Transaction and the transactions
contemplated by the Documents and otherwise referred to herein or there-
in 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 Senior
Notes, the Senior Discount Debentures or the Senior 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.
(o) 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 or which the Agent, the Co-Agent 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 Del Monte and its
Subsidiaries taken as a whole, any Credit Party or of any Credit Party
and its Subsidiaries taken as a whole.
(p) Fees, etc. On the Initial Borrowing Date, Holdings and each
Borrower shall have paid to the Agent, the Co-Agent and the Banks all
costs, fees and expenses (including, without limitation, legal fees and
expenses) payable to the Agent, the Co-Agent and the Banks or payable in
respect of the Transaction to the extent then due.
(q) Solvency Certificate; Environmental Analyses. On the Initial
Borrowing Date, Silgan shall have delivered to the 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 in-
curred 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 Green
Environmental, Inc. covering the Real Property acquired or leased by
Containers and DM Can pursuant to the Acquisition, the results of which
shall be in form and substance satisfactory to the Agent, the Co-Agent
and the Required Banks.
(r) 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 indenture governing the terms of
the Senior Discount Debentures, notice to the effect that this Agreement
(and only this Agreement) constitutes the "Silgan Amended Credit
Agreement" (as defined in such indenture), and Holdings shall have taken
all other action as may be necessary or, in the opinion of the Agent or
the Co-Agent desirable, to ensure that this Agreement is entitled to all
the rights and benefits afforded the "Silgan Amended Credit Agreement"
under such indenture.
(ii) On the Initial Borrowing Date, Silgan shall have delivered to
the trustee under the indenture governing the terms of the Senior
Subordinated Notes, notice to the effect that this Agreement (and only
this Agreement) constitutes the "Amended Credit Agreement" (as defined
in such indenture), and Silgan shall have taken all other action as may
be necessary or, in the opinion of the Agent or the Co-Agent desirable,
to ensure that this Agreement is entitled to all the rights and benefits
afforded the "Amended Credit Agreement" under such indenture.
(iii) On the Initial Borrowing Date, Silgan shall have
delivered to the purchasers of the Senior Notes, notice to the effect
that this Agreement (and only this Agreement) constitutes the "Amended
Credit Agreement" (as defined in the Senior Note Agreement), and Silgan
shall have taken all other action as may be necessary, or in the opinion
of the Agent or the Co-Agent desirable, to ensure that this Agreement is
entitled to all the rights and benefits afforded the "Amended Credit
Agreement" under the Senior Note Agreement.
(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 Agent or the Co-Agent 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 Agent and the Co-Agent evidence in form, scope and substance
satisfactory to the Agent and the Co-Agent that the matters set forth in
this Section 5.01(r) have been satisfied as of such date.
(s) Consent Letter. On the Initial Borrowing Date, the 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.
(t) Financial Projections. On or prior to the Initial Borrowing
Date, there shall have been delivered to each Bank detailed projected
financial statements for Silgan and its Subsidiaries for the period
through December 31, 2002 (the "Projections"), which Projections (x)
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 (y) shall otherwise be in form and substance
satisfactory to the Agent, the Co-Agent 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 should 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.
(u) Initial Borrowing Base Certificate and Report of Inventory and
Accounts Receivable. On the Initial Borrowing Date, Silgan shall have
delivered to the Agent and the Co-Agent the initial Borrowing Base
Certificate and the initial report of Inventory and Accounts Receivable
meeting the requirements of Section 7.01(i) and, after giving effect to
the incurrence of Working Capital Loans and the Letter of Credit
Outstandings on the Initial Borrowing Date, no Borrowing Base Deficiency
will exist.
(v) Tax Sharing Agreement. On the Initial Borrowing Date, DM Can
shall have duly authorized, executed and delivered a counterpart to the
Tax Sharing Agreement whereby DM 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 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 Agent, the Co-Agent and the
Required Banks.
(w) Insurance. On the Initial Borrowing Date, Silgan shall have
delivered to the 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 30 days' prior written notice by the respective
insurer to the Collateral Agent.
(x) Intercompany Agency Agreement. On the Initial Borrowing Date,
Silgan shall have delivered to the Agent and the Co-Agent a true and
correct copy of the Intercompany Agency Agreement, and the Intercompany
Agency Agreement shall be in form and substance satisfactory to the
Agent, the Co-Agent and the Required Banks, and shall be in full force
and effect.
5.02 Conditions to Working Capital Loans and Letters of Credit on
and after the Initial Borrowing Date. The obligation of each Bank to make
Working Capital 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
conditions:
(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 of the Borrowing Base Certificate last
delivered to each Bank, there is no reason to believe that a Borrowing
Base Deficiency will exist.
(b) Additional PCP Acquisition Conditions. At the time of the
incurrence of any Working Capital Loans by Containers to consummate the PCP
Acquisition, Containers shall have fully complied with the terms and
conditions set forth in Sections 7.10 and 8.18.
5.03 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 5.02), 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 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 Agent, the Co-Agent
or the Required Banks shall have reasonably requested same, the Agent
shall have received from counsel (who shall be Winthrop, Stimson, Putnam
& Roberts or such other counsel reasonably satisfactory to the Agent and
the Co-Agent) for the Borrowers an opinion in form and substance
satisfactory to the Agent, the Co-Agent and the Required Banks,
addressed to the Agent, the Co-Agent 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 Agent, the Co-Agent or the Required Banks shall specify or such
other matters incident to the transactions contemplated herein as the
Agent, the Co-Agent or the Required Banks may reasonably request.
(e) Corporate Proceedings. All corporate and legal proceedings
and all instruments and agreements in connection with the transaction
contemplated by this Agreement and the other Credit Documents shall be
satisfactory in form and substance to the Agent, the Co-Agent and the
Required Banks and the Agent shall have received all information and
copies of all documents and papers, including good standing
certificates, records of corporate proceedings and governmental
approvals, if any, which any such Bank reasonably may have requested in
connection therewith, such documents and papers were appropriate to be
certified by proper corporate or governmental authorities.
(f) No Future Advances Notice. Neither the Agent, the Co-Agent
nor any Bank shall have received notice from any Credit Party pursuant
to 443.055 of the Missouri Revised Statutes to the effect that any
Credit Party elects to terminate the 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 Agent at the 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 any Credit Party or
of any Credit Party 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 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, injunc-
tion 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 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 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 Section 8.01(i) and
(ii)). 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 Encum-
brances and Liens permitted to exist under Section 8.01(i), (ii) and (vii)).
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 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, 1992 and September 30, 1993 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 nine-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, 1992, have been certified by nationally
recognized independent certified public accountants satisfactory to the Agent
and the Co-Agent 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, 1992, 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 any Credit Party or of any Credit Party
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
their 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 their
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 their 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) 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) 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.
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 or (ii) that
are reasonably likely to materially and adversely affect 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.
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 here-
with 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, in part, the repayment of
amounts owing pursuant to the Existing Credit Agreement, (ii) to finance, in
part, the purchase price of the Acquisition, (iii) to pay, in part, the cost
of the 303 to 300 can conversion described in the Acquisition Agreement and
(iv) to pay, in part, the fees and expenses incurred in connection with the
Transaction.
(b) (i) Proceeds of Working Capital Loans incurred on the Initial
Borrowing Date may be used for the purposes described in Section 6.10(a),
provided, that such Working Capital Loans shall not exceed $35,000,000 and
(ii) proceeds of each Working Capital Loan and Swingline Loan incurred after
the Initial Borrowing Date will be used by Containers or Plastics, as the
case may be, for its general corporate purposes and for the general corporate
purposes of DM Can and Express, including the payment of Dividends, the
repayment of certain Indebtedness and the making of advances to the extent
and for the purposes permitted pursuant to Sections 8.03, 8.05 and 8.06,
provided that Working Capital Loans incurred to consummate the PCP
Acquisition may only be incurred on the date such acquisition is consummated
and no more than $15,000,000 of Working Capital Loans in the aggregate may be
incurred by Containers to consummate the PCP Acquisition..
(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.
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 Subsidi-
aries 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)
13,000 shares of common stock, $.01 par value per share, of which 10,800
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;
(c) the authorized capital stock of Plastics consists of (i)
13,000 shares of common stock, $.01 par value per share, of which 10,800
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; and
(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.
All such outstanding shares of capital stock of Silgan, Containers, Plastics
and DM 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 Con-
tainers 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 Amended and Restated 1989 Stock Option
Plans of Containers and 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 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 such Credit Party or of such Credit Party 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 such Credit Party
or of such Credit Party and its Subsidiaries taken as a whole, and none of
the Credit Parties nor their Subsidiaries is liable for any material penal-
ties, 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 or 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
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 entitle-
ment of any Borrower or any of its Subsidiaries for 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 material
adverse effect on the financial viability of any of its facilities.
(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 environ-
mental laws and regulations which could have a materially 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.
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 its
Subsidiaries is engaged in any unfair labor practice that could have a
material adverse effect on such Credit Party or on such Credit Party and its
Subsidiaries taken as a whole. There is (i) no significant 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 significant grievance or
significant 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 significant 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 any Credit Party or of any Credit Party and its
Subsidiaries taken as a whole.
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 any Credit Party or of any Credit Party
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
have been obtained, given, filed or taken and are or will be in full force
and effect (or effective judicial relief with respect thereto has been ob-
tained). 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 representa-
tions 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 Senior Subordinated Notes and (ii) the Senior Discount Debentures in
the event that same become the obligations of Silgan pursuant to the terms
thereof, 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 Senior
Subordinated Note Documents and Senior Discount Debenture Documents.
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 Commitments 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 and Plastics, the management information reports for such
month delivered by Containers and Plastics to Silgan, containing a
monthly operating profit and loss statement for each such Subsidiary and
each plant of Containers and Plastics, 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 Silgan, the
consolidated and consolidating balance sheets of Silgan 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 Silgan, the consolidated and consolidating
balance sheets of Silgan 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 Agent and the Co-Agent, and in the case of the
consolidating financial statements, by the chief financial officer,
treasurer or controller of Silgan, in each case together with a report
of such accounting firm stating that in the course of its regular audit
of the financial statements of Silgan 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 Event of Default has
occurred and is continuing, a statement as to the nature thereof.
(d) Management Letters. Promptly after Silgan's receipt thereof,
a copy of any "management letter" received by Silgan from its certified
public accountants.
(e) Budgets; Forecasts. Within 60 days after the first day of
each fiscal year of Silgan, (i) a budget in form and scope reasonably
satisfactory to the Agent and the Co-Agent (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 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 (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
or available amount reductions required pursuant to Sections 3.03 and/or
4.02 during such fiscal year and whether the 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.
(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 con-
stitutes a Default or 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 (finan-
cial 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 Senior Notes or the Senior Subordinated
Notes.
(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) a report of
Inventory and Accounts Receivable of each of Containers and DM Can on a
consolidated basis and Plastics in the form of Exhibit L, setting forth
(i) with respect to the Inventory of Containers and DM Can on a
consolidated basis and Plastics, 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
Containers and DM Can on a consolidated basis and Plastics, 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 DM Can on a consolidated basis and
Plastics 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 Agent, the Co-Agent 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 Agent, the Co-Agent 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 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,
all at such reasonable times and intervals and to such reasonable extent as
the Agent, the Co-Agent or such Bank may request. In connection with the
foregoing, the Agent, the Co-Agent 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
Agent, the Co-Agent 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 Agent, the Co-Agent 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 Agent, the Co-Agent or the Banks, (d) which has been
publicly 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 Agent's, the Co-Agent's or the Banks' legal counsel and
independent auditors in connection with the business of the Agent, the Co-
Agent 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
shall, and shall 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 any Credit Party or
of any Credit Party 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 amorti-
zation period under Section 412 of the Code, that a Plan has been or is
likely 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 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 Agent, upon request by the 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 shall
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 any Credit Party or of any
Credit Party 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
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, 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 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 Subsidiary
as are not covered by the original Security Documents and as are acquired by
Containers in connection with the PCP Acquisition 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 from granting a security interest therein,
provided that such Borrower shall use reasonable good faith efforts (x) at
the time it enters into any such lease, to have any such restrictive terms
eliminated and, if it is unsuccessful, (y) 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, 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 (i) in the case of assets acquired in
connection with the PCP Acquisition, on the date such acquisition is
consummated and (ii) in all other cases, 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 Agent, the Co-Agent
or the Required Banks, counsel for Silgan acceptable to the Agent and the Co-
Agent does not within 30 days after such request deliver a written opinion,
in form and substance satisfactory to the Agent and the Co-Agent, 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 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 Registry. Each Borrower hereby covenants that it shall
maintain a register on which it will record 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. Upon the written
request of any Borrower, the Agent hereby agrees to use its reasonable
efforts to provide to such Borrower such information as such Borrower shall
reasonably request from time to time in order to enable it to fulfill its
obligations pursuant to this Section 7.12 and such Borrower shall have no
obligation to make any such recordation until it receives such requested
information from the Agent. Without limiting each Borrower's obligations
hereunder, each Borrower shall indemnify any Bank described in Section
4.04(b)(iii) or (iv) for any losses (including withholding of Taxes required)
arising as a result of such Borrower's failure to comply with this Section
7.12. With respect to any Bank described in Section 4.04(b)(iii) or (iv), (a)
the transfer of the Commitments of such Bank and the rights to the principal
of, and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the register maintained by such
Borrower with respect to ownership of such Commitments and Loans and prior to
such recordation all amounts owing to the transferor with respect to such
Commitments and Loans shall remain owing to the transferor and (b) such
Borrower shall immediately record all such transfers when notified thereof by
the transferor Bank and such transfer shall be made only through (x) the
surrender of a Note and the reissuance of such Note by such Borrower to the
new holder of the old Note or the issuance by such Borrower of a new Note to
the new holder (the "Issuance System") or (y) a register maintained by such
Borrower and referred to in the first sentence of this Section (the "Book
Entry System"). Each Borrower agrees to indemnify any transferee Bank from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any amounts paid by the transferee to the transferor in
connection with the transfer and all amounts which would otherwise be owing
to the transferee if the transfer had been properly recorded) resulting from
such Borrower's failure to record any such transfer through either the
Issuance System or the Book Entry System.
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 Commitments 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 crea-
tion, 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 any 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;
(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 $1,000,000;
(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 Subsid-
iaries 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; and
(ix) Liens not otherwise permitted by the provisions of this
Section 8.01 to the extent securing liabilities not in excess of
$2,500,000; 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 $3,000,000.
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 Real Property) in the ordinary course of business
not in excess of $100,000 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) DM Can may merge with and into Containers so long as (x)
Containers is the surviving corporation of 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 pursuant to the respective Security Documents
to which it is a party;
(vi) 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); and
(vii) the PCP Acquisition shall be permitted in accordance with
the requirements of Sections 7.10 and 8.18.
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 (and such sale is
otherwise permitted by the terms of the Senior Note Agreement and such
Collateral is released (or permitted to be released) from the Liens created
by the respective Security Document) such Collateral in each such case shall
be sold free and clear of the Liens created by the Security Documents and the
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, "Divi-
dends"), 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, upon the termination of employment of the
holder 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 Op-
tions, 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 aggre-
gated 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);
(ii) each of Containers and Plastics may declare and pay dividends
to Silgan so as long as Containers or Plastics, as the case may be, is a
Wholly-Owned Subsidiary of Silgan at the time of such declaration and
payment of such dividends;
(iii) each Subsidiary created pursuant to Section 8.13, as well
as each Subsidiary of Containers and Plastics existing on the Effective
Date, may pay 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 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
simultaneously 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, Containers, Plastics and/or DM Can 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 Consoli-
dated Net Worth limitation set forth in clause (i) above for all
payments made pursuant to said clause (i) and this clause (vii),
Dividends or other 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 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,
$1,000,000 so long as Holdings simultaneously uses such dividends to pay
administrative expenses; and
(ix) so long as no Default or Event of Default then exists or would
result therefrom, Silgan may pay additional 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 shall 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) (i) by Silgan
and its Subsidiaries on a consolidated basis, to exceed $13,600,000 in the
calendar year ended December 31, 1993 and increasing by $700,000 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 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 not to exceed $50,000,000 (as reduced
by any repayments of principal thereof) in aggregate principal amount
evidenced by the Senior Notes;
(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 Senior 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 same 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, 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);
(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 to DM Can to the extent
permitted by Section 8.06(xix);
(xiv) Indebtedness of DM Can to Containers to the extent
permitted by Section 8.06(xix); and
(xv) unsecured guarantees by (x) Silgan of Containers', Plastics'
and/or DM Can's respective lease obligations under leases entered into
in compliance with Section 8.04 and (y) Container's of DM Can's lease
obligations to Del Monte under leases entered into in compliance with
Section 8.04.
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 officers, employees and agents in the ordinary course of
business equal in the aggregate for Silgan and its Subsidiaries to no
more than $600,000 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;
(vi) each Borrower may establish Wholly-Owned Subsidiaries to the
extent permitted pursuant to Section 8.13;
(vii) Silgan may own the capital stock of Containers, Plastics
and NRO, Containers may own the capital stock of DM Can, Plastics may
own the capital stock of Canadian Holdco, and Canadian Holdco may own
the capital stock of Express;
(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 $15,000,000 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 pay
interest which is then due and payable on the Senior Subordinated Notes
provided that 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 Agent and the Co-Agent in
their sole discretion;
(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 simultaneously 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 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,
$1,000,000 so long as Holdings simultaneously uses such advances to pay
administrative expenses;
(xix) Containers may make intercompany loans to DM Can, and DM
Can 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 pursuant to the Subsidiaries Pledge
Agreement;
(xx) Containers may from time to time make capital contributions to
DM Can so long as the aggregate amount of all such contribution does not
exceed $5,000,000; and
(xxi) 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 con-
ditions 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 (i) each of Holdings, Silgan, Containers, Plastics and DM Can
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, $1,000,000 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 and DM Can may
enter into the 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 Sec-
tions 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 (taken as one accounting period) which exceeds in the
aggregate for Silgan and its Subsidiaries the amount set forth opposite such
period below:
Period Amount
------ ------
Calendar Year ended
December 31, 1993 $46,500,000
Calendar Year ended
December 31, 1994 $35,000,000
Calendar Year ended
December 31, 1995 $30,000,000
Calendar Year ended
December 31, 1996 $30,000,000
Notwithstanding anything to the contrary contained above, to the extent that
capital expenditures made during any period set forth above are less than the
amounts 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 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.
(b) In addition to the capital expenditures permitted pursuant to
the preceding clause (a), capital expenditures made on the Initial Borrowing
Date in connection with Acquisition shall be permitted and capital
expenditures made in connection with the PCP Acquisition shall be permitted
to the extent provided in Section 8.18.
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 2.00:1.
8.10 Interest Coverage Ratio. None of the Borrowers will permit
the ratio of (i) EBITDA to (ii) Interest Expense for any period of four
consecutive fiscal quarters (or, if shorter, the period beginning on January
1, 1994 and ending on the last day of a fiscal quarter ended after January 1,
1994) (in each case, taken as one accounting period) ended during a period
set forth below to be less than the ratio set forth opposite such period
below:
Period Ratio
------ -----
Fiscal quarter ending March 31, 1994 2.25:1
Fiscal quarter ending June 30, 1994 2.35:1
Fiscal quarter ending September 30, 1994 2.70:1
Fiscal quarter ending December 31, 1994 2.70:1
January 1, 1995 to and including December
31, 1995 3.00:1
January 1, 1996 to and including September
30, 1996 3.40:1
8.11 Total Indebtedness to Consolidated Net Worth. None of the
Borrowers will permit the ratio of (i) Total Indebtedness to (ii)
Consolidated Net Worth to exceed on any date set forth below the ratio set
forth opposite such date:
Date Amount
---- ------
December 31, 1994 5.00:1
December 31, 1995 3.25:1
August 31, 1996 2.75:1
8.12 Limitation on Voluntary Payments and Modifications of Senior
Notes or Senior Subordinated Notes; 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 Senior Notes or Senior Subordinated
Notes, or any purchase, redemption or acquisition for value of (or any offer
to purchase, redeem or acquire) any Senior Notes or Senior Subordinated
Notes, whether as a result of an Other Indebtedness Change of Control, the
consummation of asset sales or otherwise (except that the Senior Notes may
receive their Share of the Net Sale Proceeds and Net Equity Proceeds as
provided in Section 4.02(f)), or (ii) amend or modify, or permit the
amendment or modification of, any provision of the Senior Note Documents or
any Senior Subordinated Note Documents or (iii) amend or modify, or permit
the amendment or modification of, any provision of the Acquisition Agreement,
the Tax Sharing Agreement, the 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 and (y) immaterial changes to the Employee Stock
Options and the Stock Option Agreements which could not adversely affect the
Banks), 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 Agent on or prior to the
Effective Date shall, subject to Section 7.09, be permitted).
8.13 Subsidiaries. Silgan shall have no Subsidiaries other than
Containers, Plastics, NRO and their respective Subsidiaries, Containers shall
have no Subsidiaries other than DM Can, NRO shall have no Subsidiaries,
Plastics shall have no Subsidiaries other than Express and Canadian Holdco,
and Canadian Holdco shall have no Subsidiaries other than Express, provided
that, with the prior written consent of the Required Banks, any of Silgan,
Containers or Plastics may create any other Wholly-Owned Subsidiaries. The
respective Borrower establishing any such Subsidiary shall, and agrees to
cause each Subsidiary to, grant to the Collateral Agent, for the benefit of
the Banks and the other respective Secured Creditors, security interests and
mortgages in the stock of, and such assets and properties owned by, each such
Subsidiary, and to enter into such guaranties of the Obligations, in each
case as may be requested by the Agent or the Required Banks. Such security
interests, mortgages, and guaranties shall be granted pursuant to documen-
tation that is satisfactory in form and substance to the Agent and the
Required Banks.
8.14 Limitation on Restrictions on Subsidiary Dividends and Other
Distributions. None of the Borrowers shall, nor shall 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 Senior Note Documents, (iv) the Senior
Subordinated Note Documents and (v) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of such
Borrower or a Subsidiary of such Borrower.
8.15 Limitation on Issuances of Capital Stock by Subsidiaries.
None of the Borrowers shall 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 Containers or Plastics to Silgan so long as such issuances
either do not give rise to any Net Equity Proceeds or to the extent there are
Net Equity Proceeds such proceeds are not required to be applied to repay
(and Silgan shall not be required to make an offer to repay) Senior Notes,
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 unless and until (i) it shall have given to the
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 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 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 Consummation of PCP Acquisition. None of the Borrowers will,
nor will it permit any of its Subsidiaries to, consummate the PCP Acquisition
unless each of the following conditions shall be satisfied:
(i) There shall have been delivered to the Banks prior to the date
of the consummation of the PCP Acquisition true and correct copies of all PCP
Acquisition Documents, and all material terms and conditions of such PCP
Acquisition Documents shall be in form and substance reasonably satisfactory
to the Agent and the Co-Agent, and the Required Banks shall not have
otherwise objected in writing to any such terms and conditions. The Agent
and the Co-Agent shall be satisfied with the nature of and the amount and
type of assets being acquired in connection with the PCP Acquisition and
shall be satisfied that no material liabilities (contingent or otherwise) are
being acquired in connection with the PCP Acquisition other than those
reasonably acceptable to the Agent and Co-Agent, and the Required Banks shall
not have otherwise objected in writing to any such assets or liabilities.
All necessary governmental and third party consents and approvals in
connection with the PCP Acquisition shall have been obtained and shall be in
full force and effect. The representations and warranties set forth in the
PCP Acquisition Documents shall be true and correct in all material respects
as if made on and as of the date the PCP Acquisition is to be consummated.
Each of the conditions precedent to Container's obligation to consummate the
PCP Acquisition as set forth in the PCP Acquisition Documents shall have been
satisfied to the satisfaction of the Agent and the Co-Agent, or waived with
the consent of the Agent and the Co-Agent, and the PCP Acquisition shall have
been consummated in accordance, in all material respects, with applicable law
and the PCP Acquisition Documents. The total purchase price for the PCP
Acquisition shall not exceed $15,000,000.
(ii) Prior to the consummation of the PCP Acquisition, Silgan
shall have delivered to the Banks (x) a certificate of its chief financial
officer certifying that Silgan and its Subsidiaries shall have sufficient
availability under the Total Working Capital Commitment to meet their ongoing
working capital requirements after giving effect to the PCP Acquisition and
the financing thereof and (y) detailed projections which reflect the
forecasted financial condition and results of operation and projected working
capital requirements of Silgan and its Subsidiaries after giving effect to
the PCP Acquisition and the related financing thereof, which projections
shall be done on a monthly basis for the 12 month period following the
consummation of the PCP Acquisition and on an annualized basis for the
remainder of the term of this Agreement, and the Required Banks shall not
have determined that such projections and certification are unreasonable or
unattainable.
(iii) No Default or Event of Default shall be in existence at the
time of the consummation of the PCP Acquisition or shall exist immediately
after giving effect thereto.
(iv) The Agent and the Co-Agent shall have received such opinions
of counsel as may have reasonably requested in connection with the PCP
Acquisition, which opinions shall be in form and substance reasonably
satisfactory to the Agent and the Co-Agent.
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 Agent, the Co-Agent 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 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 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 (except that the Senior Notes may
receive their Share of the Net Sale Proceeds and Net Equity Proceeds as
provided in Section 4.02(f)), prior to the stated maturity thereof, provided
that 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 $100,000; 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 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) which 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, 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 Agreements, 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 Agreement 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 any Security Agreement or 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 of Silgan and its Subsidiaries, a liability (not
paid or fully covered by insurance) 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) Holdings shall cease to
own 100% of the capital stock of Silgan, (ii) a Change of Control shall occur
or (iii) 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 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 Agent, the Co-
Agent, 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(iii) shall
occur, the result which would occur upon the giving of written notice by the
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
Commitments 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 Agent at the Payment
Office such additional amount of cash, to be held as security by the 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.
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):
"Acquired Business" shall mean certain fixed assets and working
capital (excluding finished goods (other than certain finished ends))
constituting the containers manufacturing business of Del Monte and the
capital stock of DM 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 Purchase Agreement, dated as
of September 3, 1993, between Containers and Del Monte, as the same may be
amended, modified or supplemented pursuant to the terms hereof and thereof.
"Acquisition Documents" shall mean the Acquisition Agreement, the
Supply Contract and all other documents and agreements entered into or
delivered in connection with the Acquisition Agreement.
"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 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
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 Agent for determining the
current annual assessment payable by the 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 Silgan and its Subsidiaries for such period (after provision for
taxes) plus the amount of all net non-cash charges (including, without
limitation, depreciation, 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 Silgan 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.
"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 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.
"Agent" shall have the meaning provided in the first paragraph of
this Agreement, and shall include any successor Agent appointed pursuant to
Section 11.09.
"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 as a result of any payment or payments made by Silgan after the
Effective Date to third parties which are not Affiliates of Silgan in respect
of the Reorganization; provided, that, any reduction in excess of $14,000,000
shall not be deemed to be an Allowed Reduction without the consent of the
Required Banks.
"Applicable Margin" shall mean (w) in the case of A Term Loans
which are maintained as (i) Base Rate Loans, 1-3/4% and (ii) Eurodollar
Loans, 2-3/4%, (x) in the case of B Term Loans which are maintained as (i)
Base Rate Loans, 2-1/4% and (ii) Eurodollar Loans, 3-1/4%, (y) in the case of
Working Capital Loans which are maintained as (i) Base Rate Loans, 2% and
(ii) Eurodollar Loans, 3% and (z) in the case of Swingline Loans, 2%.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit N (appropriately
completed).
"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.
"A Term Loan Maturity Date" shall mean September 15, 1996.
"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).
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Debt" shall mean and include all Loans, Letters of Credit,
Unpaid Drawings and the Unutilized Total Working Capital Loan Commitment
outstanding hereunder.
"Bank Debt Amount" at any time shall mean that amount which equals
the sum of the aggregate principal amount of all Loans then outstanding, the
Letter of Credit Outstandings at such time and the Unutilized Total Working
Capital Loan Commitment, if any, at such time.
"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 Agent that it does not intend to comply with
its obligations under Section 1.01(c) or 1.01(f) 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.
"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.
"Book Entry System" shall have the meaning provided in Section
7.12.
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowers Guaranty" shall have the meaning provided in Section
5.01(i)(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 re-
sulting 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" as at any date, shall mean 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 Working Capital
Loans and Swingline Loans then outstanding plus the Letter of Credit
Outstandings at such time exceeds the Borrowing Base.
"Borrowing Base Surplus" at any time shall mean the amount, if any,
by which the Borrowing Base exceeds the aggregate principal amount of Working
Capital Loans and Swingline Loans then outstanding plus the Letter of Credit
Outstandings at such time.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity.
"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 Term Loan Maturity Date" shall mean September 15, 1996.
"B Term Note" shall have the meaning provided in Section 1.05(a).
"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(b).
"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 Corporation 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. 9601 et seq.
"Change of Control" shall mean any of (i) the occurrence of an
event described in Section 9(g) of the Holdings Guaranty or (ii) the
occurrence of any Other Indebtedness Change of Control.
"Co-Agent" 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 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 Working Capital 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 Working Capital
Loan Commitment.
"Consolidated Current Assets" shall mean the current assets of
Silgan and its Subsidiaries determined on a consolidated basis, provided that
the Unutilized Total Working Capital Commitment shall be considered current
assets of Silgan in making the foregoing determination.
"Consolidated Current Liabilities" shall mean the current
liabilities of Silgan 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
Senior Notes and the Senior Subordinated Notes 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 obliga-
tion 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 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.
"Contribution Agreement" shall mean the Contribution Agreement,
dated as of June 18, 1992, by and among Containers, Plastics and DM 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
each 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 and DM Can, and after the creation thereof, any Subsidiary of
Silgan created pursuant to Section 8.13 which has executed and delivered an
Additional 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.
"Del Monte" shall mean Del Monte Corporation, a New York
corporation.
"Dividends" shall have the meaning provided in Section 8.03.
"DM Can" shall mean California-Washington Can Corporation, a
California corporation.
"Documents" shall mean the Credit Documents, the Acquisition
Documents, the Senior Note Documents, the Senior Discount Debenture Documents
and the Senior Subordinated Note 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
Silgan 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 from sales of assets (other than
sales of inventory in the ordinary course of business), 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 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 Containers', Plastics' and DM Can's 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
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 Containers', Plastics' and
DM Can's 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 mate-
rials), 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.
"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 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, supple-
mental, 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 (ii) the sum of (v) 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, (w) the aggregate principal amount of
permanent payments or prepayments on Indebtedness for borrowed money of
Silgan and its Subsidiaries (other than repayments of loans under the
Intercompany Notes and any other intercompany loans among Holdings and its
Subsidiaries and 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) or (2) made as a voluntary prepayment (but in the case of a voluntary
prepayment of Working Capital Loans, only to the extent accompanied by a
voluntary reduction to the Total Working Capital Commitment)) on a consoli-
dated basis during such period, (x) the increase, if any, in Working Capital
from the first day to the last day of such period, (y) 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, provided that no more than $13,000,000 in the aggregate may be
deducted pursuant to his clause (y) and (z) the aggregate amount of cash
payments actually made during such period to third parties which are not
Affiliates of Silgan in respect of the Reorganization to the extent such
amounts have not reduced Adjusted Net Income for such period, provided that
no more than $14,000,000 in the aggregate may be deducted pursuant to his
clause (z).
"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, 1994).
"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 Amended and Restated
Credit Agreement, dated as of August 31, 1987, as amended and restated as of
March 31, 1989, and amended and restated as of July 13, 1990, and further
amended and restated as of June 18, 1992, among the Borrowers, the financial
institutions party thereto 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 and Plastics listed on Schedule III and designated as "Existed
Mortgaged Properties" therein.
"Existing Mortgages" shall mean all Mortgages granted by Containers
and Plastics pursuant to the Existing Credit Agreement and which have not
been released by the lenders thereunder prior to the Effective Date.
"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 Agent from three
Federal Funds brokers of recognized standing selected by the 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 and/or any Subsidiary of Silgan required to
deliver a Guaranty pursuant to Section 8.13, as the case may be).
"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 Guaranty" shall have the meaning provided in Section
5.01(i)(i).
"Holdings Pledge Agreement" shall mean the Amended and Restated
Holdings Pledge Agreement, dated as of June 30, 1989, and amended and
restated as of June 18, 1992, between Holdings and the Collateral Agent, as
the same may be modified, supplemented and amended pursuant to the terms
hereof and thereof.
"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.
"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 Intercompany Agency
Agreement, dated as of December 21, 1993, between Containers and DM Can.
"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 or DM Can, 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 hereof 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 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 Silgan and its Subsidiaries for such period.
"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.
"Inventory" of any Person shall mean "Inventory" as defined in the
Security Agreement.
"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, between Containers and Van Dorn Company, an Ohio
corporation, acting through its Central States Can Co. division.
"Issuance System" shall have the meaning provided in Section 7.12.
"Issue" shall mean each of the two different types of Senior Debt,
there being two separate Issues for purposes of this Agreement, i.e., the
Bank Debt and the Senior Notes.
"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).
"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 Working
Capital Loan and each Swingline Loan.
"Majority Banks" shall mean collectively (and not individually) (i)
Banks whose outstanding A Term Loans (or, if prior to the Initial Borrowing
Date, A Term Loan Commitments) and Working Capital Commitments (or, if after
the Total Working Capital Commitment has been terminated, outstanding Working
Capital Loans and Percentages of outstanding Swingline Loans and Letter of
Credit Outstandings) constitute at least a majority of the total outstanding
A Term Loans (or, if prior to the Initial Borrowing Date, the Total A Term
Loan Commitment) and the Working Capital Commitment (or, if after the Total
Working Capital Commitment has been terminated, the total outstanding Working
Capital Loans and the aggregate Percentages of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time) and (ii)
Banks whose outstanding B Term Loans (or, if prior to the Initial Borrowing
Date, B Term Loan Commitments) constitute at least a majority of the total
outstanding B Term Loans (or, if prior to the Initial Borrowing Date, the
Total B Term Loan Commitment).
"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 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 or the Working Capital Loan Maturity Date, as the
case may be.
"Maximum Swingline Amount" shall mean $5,000,000.
"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 Senior Notes, the Senior Subordinated Notes and the Term
Loans.
"Mortgage Amendments" shall have the meaning provided in Section
5.01(m)(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 Required Banks, 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(m)(ii).
"New Mortgages" shall mean those Mortgages which have been granted
with respect to the New Mortgaged Properties.
"Note" shall mean each A Term Note, each B Term Note, each Working
Capital 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 Agent located at One
Bankers Trust Plaza, New York, New York 10006, or such other office as the
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 Agent, the Co-
Agent, 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 Senior Note Agreement, the
Senior Subordinated Note Documents or the Senior Discount Debenture
Documents.
"Other Indebtedness Change of Control Excess Repayment" shall mean
any of (i) the repurchase (or the tender for repurchase by the respective
holder or holders thereof) of 25% or more of the aggregate principal amount
of the then outstanding Senior Notes as a result of an Other Indebtedness
Change of Control or (ii) the repurchase (or the tender for repurchase by the
respective holder or holders thereof) of any Senior Subordinated Note or
Senior Discount Debenture (or a 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 Agent located at One
Bankers Trust Plaza, New York, New York 10006, or such other office as the
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.
"PCP Acquisition" shall mean the purchase by Containers of the PCP
Acquired Business pursuant to the PCP Acquisition Documents.
"PCP Acquired Business" shall mean certain fixed assets and working
capital constituting the containers and manufacturing business of Pacific
Coast Producers, Inc. as set forth in the PCP Acquisition Documents.
"PCP Acquisition Documents" shall mean the Purchase Agreement to be
entered into between Containers and Del Monte pursuant to Section 6.2 of the
Acquisition Agreement relating to the purchase by Containers from Del Monte
of the PCP Acquired Business, and all other documents and agreements entered
into or delivered in connection with such Purchase Agreement.
"Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Working Capital
Commitment of such Bank at such time and the denominator of which is the
Total Working Capital Commitment at such time; provided, that if the
Percentage of any Bank is to be determined after the Total Working Capital
Commitment has been terminated, then the Percentages of the Banks shall be
determined immediately prior (and without giving effect) to such termination.
"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 Liens" shall have the meaning provided in Section
8.01(iii).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, 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, or
by any Subsidiary of any Borrower or an ERISA Affiliate.
"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(t).
"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. 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
Sharonville, Ohio, Nampa, Idaho, Mansville, Texas, Westport, Missouri,
Maysville, Kentucky, Hillsboro, Oregon, Cambridge Springs, Pennsylvania and
Smithfield, Utah, in each case in accordance with Section 8.02(vi).
"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.
"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.
"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 Banks" shall mean Banks, the sum of whose outstanding
Term Loans (or, if prior to the Initial Borrowing Date, Term Loan
Commitments) and Working Capital Commitments (or after the termination
thereof, outstanding Working Capital 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 (or, if prior to
the Initial Borrowing Date, the Total Term Loan Commitment) and the Total
Working Capital Commitment (or after the termination thereof, the sum of the
then total outstanding Working Capital Loans, Swingline Loans and Letter of
Credit Outstandings).
"Required Secured Creditors" shall have the meaning provided in the
respective Security Document.
"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).
"Section 4.04(b)(iii) Certificate" shall have the meaning provided
in Section 4.04(b).
"Secured Creditors" shall mean (x) the Banks, the Agent, the Co-
Agent, the Collateral Agent and certain lenders of Indebtedness which
refinance Indebtedness under this Agreement, (y) the Interest Rate Protection
Creditors (as defined in the Security Agreement) and (z) the holders of
Senior Notes; provided, however, the Holdings Pledge Agreement shall not
secure the obligations under any Senior Note or other Senior Note Document.
"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.
"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, among Plastics, Containers, DM Can and the Collateral Agent, as the
same may be amended pursuant to 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.
"Senior Debt" shall mean the Bank Debt and the Senior Notes.
"Senior Discount Debenture Documents" shall mean and include each
of the Senior Discount Debentures and all securities purchase agreements,
indentures and other documents and agreements related thereto.
"Senior Discount Debentures" shall mean the 13-1/4% Senior Discount
Debentures due 2002 issued by Holdings.
"Senior Note Agreement" shall mean the Note Purchase Agreement,
dated as of June 29, 1992, between Silgan and each of the purchasers party
thereto, as same may be amended, modified or supplemented from time to time
in accordance with the terms of this Agreement.
"Senior Note Documents" shall mean and include each of the Senior
Notes and all securities purchase agreements, indentures and other documents
and agreements related thereto, including, without limitation, the Senior
Note Agreement.
"Senior Notes" shall mean the $50,000,000 aggregate principal
amount of Senior Secured Floating Rate Notes due 1997 issued by Silgan.
"Senior Subordinated Note Documents" shall mean and include each of
the Senior Subordinated Notes and all securities, purchase agreements,
indentures and other documents and agreements related thereto.
"Senior Subordinated Notes" shall mean the $135,000,000 aggregate
principal amount of Silgan's 11-3/4% Senior Subordinated Notes due 2002.
"Share" shall mean, for each Issue, (A) if the event requiring a
repayment of Senior Debt pursuant to Section 4.02(f) would, in accordance
with the terms of the Senior Note Agreement (in each case except to the
extent same has been made more stringent after June 29, 1992 as to required
prepayments based on asset sales or dispositions or equity issuances), give
rise to a mandatory prepayment or redemption of Senior Notes, or a mandatory
offer to prepay same, then the "Share" (x) of the Senior Notes shall equal
the lesser of (1) the amount required to be applied to the repayment of
Senior Debt pursuant to Section 4.02(f) multiplied by a fraction the
numerator of which is the then outstanding principal amount of Senior Notes
and the denominator of which is the then aggregate principal amount of all
then outstanding Senior Notes and the Bank Debt Amount at such time or (2)
the maximum amount which would be required to be used to make a mandatory
prepayment or redemption of Senior Notes in accordance with the terms of the
Senior Note Agreement (in each case except to the extent same has been made
more stringent after June 29, 1992 as to required prepayments based on asset
sales or dispositions or equity issuances), or a mandatory offer to prepay
same, as a result of such event requiring a repayment of Senior Debt pursuant
to Section 4.02(f) and (y) of the Bank Debt shall equal the remainder of the
amount required to be applied to Senior Debt pursuant to Section 4.02(f),
less the "Share" of the Senior Notes as determined pursuant to preceding
clause (x), and (B) if the event giving rise to a mandatory repayment of
Senior Debt would not require a mandatory repayment or redemption of Senior
Notes in accordance with the terms of the Senior Note Agreement (in each case
except to the extent same has not been made more stringent after June 29,
1992 as to required prepayment based on asset sales of dispositions or equity
issuances), or a mandatory offer to prepay same, the "Share" of each Issue
shall equal (x) in the case of the Senior Notes, $0 and (y) in the case of
the Bank Debt, the amount required to be applied to Senior Debt pursuant to
Section 4.02(f).
"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, and amended and
restated as of March 1, 1989, and amended and restated as of July 13, 1990,
and further amended and restated as of June 18, 1992, between Silgan and the
Collateral Agent, as the same may be modified, supplemented and amended from
time to time in accordance with the terms hereof and thereof.
"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.
"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 corpor-
ation (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, among Containers,
Plastics, DM Can and the Collateral Agent, as the same may be modified,
supplemented and amended pursuant to the terms hereof and thereof.
"Supply Contract" shall mean the Supply Agreement, dated as of
September 3, 1993, between Containers and Del Monte.
"Swingline Expiry Date" shall mean, at any time, the date which is
two Business Days prior to the Working Capital 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 90th day after the Initial Borrowing Date and
(ii) the date upon which the Agent and the Co-Agent 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) 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, by and among Holdings and each of its Subsidiaries party thereto.
"Taxes" shall have the meaning provided in Section 4.04.
"Term Loan" shall mean each A Term Loan and each B Term Loan.
"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).
"Total A Term Loan Commitment" shall mean, at any time, the sum of
the A Term Loan Commitments of each of the Banks.
"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 Indebtedness" shall mean the aggregate Indebtedness of
Silgan 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 Term Loan Commitment" shall mean, at any time, the sum of
the Total A Term Loan Commitment and the Total B Term Loan Commitment.
"Total Unutilized Working Capital Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the then Total Working Capital
Commitment less (y) the sum of the aggregate principal amount of Working
Capital Loans and Swingline Loans then outstanding plus the then aggregate
amount of Letter of Credit Outstandings.
"Total Working Capital Commitment" shall mean, at any time, the sum
of the Working Capital Commitments of each of the Banks.
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being four separate Tranches,
i.e., A Term Loans, B Term Loans, Working Capital Loans and Swingline Loans.
"Transaction" shall mean each of (i) the issuance of the common
stock of Holdings as described in Section 5.01(f), (ii) the consummation of
the Acquisition and (iii) the termination of the commitments under the
Existing Credit Agreement and the repayment of all loans outstanding
thereunder.
"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 Working Capital Commitment" with respect to any Bank,
at any time, shall mean such Bank's Working Capital Commitment at such time
less the sum of (i) the aggregate outstanding principal amount of Working
Capital Loans made by such Bank and (ii) such Bank's Percentage of the Letter
of Credit Outstandings.
"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.
"Working Capital" shall mean Consolidated Current Assets (excluding
cash, Cash Equivalents and the portion of the Unutilized Total Working
Capital Commitment otherwise included therein) less Consolidated Current Lia-
bilities.
"Working Capital Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Working Capital 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).
"Working Capital Commitment Commission" shall have the meaning
provided in Section 3.01(b).
"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.
"Working Capital Loans" shall have the meaning provided in Section
1.01(c).
"Working Capital Loan Maturity Date" shall mean September 15, 1996.
"Working Capital Note" shall have the meaning provided in Section
1.05(a).
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 Agent and Co-Agent.
11.01 Appointment. The Banks hereby designate Bankers Trust
Company as Agent (for purposes of this Section 11, the term "Agent" shall
include Bankers Trust Company in its capacity 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 National Trust and
Savings Association as Co-Agent to act as specified herein and in the other
Credit Documents. Each Bank hereby irrevocably authorizes the Agent and the
Co-Agent 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 Agent and the Co-Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto. The Agent and the
Co-Agent may perform any of its duties hereunder by or through their
respective officers, directors, agents or employees.
11.02 Nature of Duties. Neither the Agent nor the Co-Agent shall
have any duties or responsibilities except those expressly set forth in this
Agreement and the Security Documents. Neither the Agent, the Co-Agent nor
any of their respective officers, directors, agents 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 negligence or willful misconduct. The duties of the
Agent and the Co-Agent shall be mechanical and administrative in nature;
neither the Agent nor the Co-Agent 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 Agent
or the Co-Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein.
11.03 Lack of Reliance on the Agent and Co-Agent. Independently
and without reliance upon the Agent or the Co-Agent, 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 creditworthiness of each of the Borrowers and,
except as expressly provided in this Agreement, neither the Agent nor the Co-
Agent shall have any duty or responsibility, either initially or on a contin-
uing 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 Agent nor the Co-
Agent shall be responsible to any Bank for any recitals, statements, infor-
mation, 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 Agent. If the 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 Agent shall be entitled to refrain
from such act or taking such action unless and until the Agent shall have
received instructions from the Required Banks or the Required Secured
Creditors, as the case may be, and the 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 Agent as a result of
the Agent acting or refraining from 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 Agent and the Co-Agent 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 Agent or the Co-Agent believed 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 Agent or the Co-Agent is
not reimbursed and indemnified by the Borrowers, the Banks will reimburse and
indemnify the Agent and the Co-Agent, in proportion to their respective
"percentages" as used in determining the Required 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 Agent
or the Co-Agent 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 Agent's or the Co-Agent's gross negligence or willful misconduct.
11.07 The Agent and the Co-Agent in Their Individual Capacity.
With respect to its obligation to make Loans and, to participate in Letters
of Credit under this Agreement, the Agent and the Co-Agent shall have the
rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it 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 Agent and the Co-
Agent in their individual capacity. The Agent and the Co-Agent 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 Agent and the Co-Agent may
also be an equity investor in any Borrower or any Affiliate of any Borrower
without any consent required from any Banks.
11.08 Holders. The 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 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 Agent and the Co-Agent. (a) The Agent
and/or the Co-Agent 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 written notice to the Borrowers
and the Banks. In the case of the resignation by the Agent, such resignation
shall take effect upon the appointment of a successor Agent pursuant to
clauses (b) and (c) below or as otherwise provided below. In the case of a
resignation by the Co-Agent, such resignation shall become effective
immediately.
(b) Upon any such notice of resignation, the Banks shall appoint a
successor Agent hereunder or thereunder who shall be a commercial bank or
trust company reasonably acceptable to the Borrowers.
(c) If a successor Agent shall not have been so appointed within
such 15 Business Day period, the Agent, with the consent of the Borrowers,
shall then appoint a successor Agent who shall serve as Agent hereunder or
thereunder until such time, if any, as the Banks appoint a successor Agent as
provided above.
(d) If no successor 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 Agent, the Agent's resignation shall become
effective and the Banks shall thereafter perform all the duties of the 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 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, pay all reasonable out-of-pocket costs and
expenses of the Agent and the Co-Agent in connection with the preparation,
execution and delivery of the Credit Documents and the documents and instru-
ments 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-Agent) and of the Agent and the Co-Agent in
connection with their syndication efforts with respect to this Agreement and
of the Agent, the Co-Agent, 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 Agent, the Collateral
Agent and for each of the Banks); (ii) pay and hold each of the Banks harm-
less 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 Agent, the Co-Agent,
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 Agent, the Co-Agent 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) applic-
able 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 indemnify, pay or hold harmless the Agent, the
Co-Agent 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 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 Agent, at its
Notice Office; or, as to any Borrower or the 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 Agent.
All such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, or 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 Agent shall not be effective until
received by the 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, 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 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 Working Capital 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 connec-
tion 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 hereunder in which such parti-
cipant 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 execu-
tion 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 Agent shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) above and (iv)
the 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
$3,000. 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. 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, to the extent legally entitled to do so, provide to the
Borrower in the case of a Bank described in clause (ii) or (iv) of Section
4.04(b), the forms described in such clause (ii) or (iv), as the case may be.
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 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 Agent, the Co-Agent 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 Agent, the Co-
Agent 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 Agent, the Co-Agent 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 Agent, the Co-Agent, the Banks or the holder of
any Note to any other or further action in any circumstances without notice
or demand.
12.06 Payments Pro Rata. (a) The 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 pay-
ment 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,
except as otherwise specifically provided herein, all computations
determining compliance with Section 4.02 and Section 8 shall utilize account-
ing 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); provided further that in determining the Net Worth of Silgan
for any period, no effect shall be given to the Allowed Reduction.
(b) All computations of interest, Commitment Commission and 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 RE-
SPECT 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, AP-
POINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS
PROVISION SATISFACTORY TO THE AGENT. EACH OF THE BORROWERS FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFORE-
MENTIONED 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 AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY
BORROWER IN ANY OTHER JURISDICTION.
(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 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 Agent at its Notice
Office or, in the case of the Banks, shall have given to the 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 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 (with Obligations being directly affected in the case of
following clause (i)), (i) extend the final scheduled maturity of any Loan or
Note or extend the stated maturity of any Letter of Credit beyond the Working
Capital 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 Working Capital Loan Commitments are included on the Effective
Date) or (v) consent to the assignment or transfer by any Borrower of any of
its rights and obligations under this Agreement; provided further, that no
such change, waiver, discharge or termination shall (v) 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), (w) 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, (x) without the consent of
the Agent or the Co-Agent, amend, modify or waive any provision of Section 11
as same applies to the Agent or the Co-Agent or any other provision as same
relates to the rights or obligations of the Agent or the Co-Agent or, (y)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent or
(z) without the consent of the Majority Banks, amend the definition of
Majority Banks or alter the application of any prepayments or repayments (or
commitment reductions) pursuant to Section 3.03(d), Section 4.01 or Section
4.02(i), as the case may be (although the Required Banks may waive, in whole
or in part, any such prepayment, repayment or commitment reduction so long as
the application of any such prepayment, repayment or commitment reduction
which is still required to be made is not altered).
(b) If, in connection with any proposed change, waiver, discharge
or termination to any of the provisions of this Agreement as contemplated by
clause (a)(i) through (v), inclusive, of this Section 12.12, 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 replace each such non-consenting 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, provided that the Borrower 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 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 or the Federal Deposit Insurance Corporation 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 Working Capital
Commitments or any interest therein by such Bank, provided, that such
prospective transferee executes an agreement with such Bank containing
provisions substantially identical to those 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).
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 301
Stamford, CT 06901 By /s/ Harley Rankin Jr.
-------------------------------------
Attn: Harley Rankin, Jr. Title: Executive Vice President
Telephone: (203) 975-7110
Fax: (203) 975-7902
SILGAN CONTAINERS CORPORATION
4 Landmark Square
Suite 301
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 301
Stamford, CT 06901 By /s/ Harley Rankin Jr.
-------------------------------------
Attn: Harley Rankin, Jr. Title: Vice President
Telephone: (203) 975-7110
Fax: (203) 975-7902
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ Daniel Toscano
------------------------------------------
Title: Associate
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
Individually and as Co-Agent
By /s/ Elizabeth Borow
------------------------------------------
Title: Vice President
SCHEDULE I
TO
CREDIT AGREEMENT
----------------
COMMITMENTS
-----------
A Term Loan B Term Loan Working Capital
Bank Commitment Commitment Commitment
- ----- ----------- ----------- ---------------
Bankers Trust $30,000,000 $40,000,000 $35,000,000
Company
Bank of America $30,000,000 $40,000,000 $35,000,000
National Trust and
Savings Association
_________________ ______________________________
Total $60,000,000 $80,000,000 $70,000,000
SCHEDULE II
TO
CREDIT AGREEMENT
-----------------
EXISTING LETTERS OF CREDIT
--------------------------
Letters of Credit
Number Beneficiary Stated Amount Expiry Date
---------------- ----------- ------------- -----------
S-02498 Insurance Company of $300,000 5/1/94
North America
S-07651 National Union Fire $1,995,000 3/1/94
Insurance Company
S-03407 Travelers Indemnity $169,511 8/31/94
S-05970 Transportation Insurance $3,504,500 8/31/94
S-08794 General Mills Inc. $125,000 9/30/94
SCHEDULE III
TO
CREDIT AGREEMENT
----------------
REAL PROPERTY
-------------
1. Silgan Containers Corporation
-----------------------------
Owned Properties
---------------- Plant*
3250 Patterson Road
Riverbank, CA 95367
1815 Navy Drive Plant*
Stockton, CA 95206
224 Silgan Way Plant* 1/
Nampa, ID 83651
305 West North Street Plant*
Mt. Vernon, MO 65712
165 Railroad Street Plant*
Cambridge Springs, PA 16403
1500 East Broad Plant*
Mansfield, TX 76063
Wisteria Street & Dallas Warehouse*
Mansfield, TX 76063
N90 W14600 Commerce Drive Plant*
Menomonee Falls, WI 53051-
2337
505 Libby Street Plant*
Waupun, WI 53963
Jefferson Industrial Park Plant 2/*
Fort Madison, IA 52627
1100 East Third Street Plant*
Maysville, KY 41056
2115 Lower Lake Road Plant*
St. Joseph, MO 64504
669 South First Street Plant*
Hillsboro, OR 97123
520 West Second Street Plant*
Oconomowoc, WI 53066
Rochelle 115 Plant**
15th Street
Rochelle, IL 61608
Smithfield 140 Plant**
521 S. Main Street
Smithfield, Utah 84335
Leased Properties
-----------------
21800 Oxnard Street (Landlord: Warren Properties
Suite 600 III; lease dated 9/3/93)
Woodland Hills, CA 91367
3591 Maple Drive (Landlord: Fort Dodge
Fort Dodge, IA 50501 Betterment Foundation; lease
dated 11/7/86, assigned
8/31/87)*
Warehouse #5 (Landlord: Lincoln Paper
1605 Tillie-Lewis Drive Company; lease dated
Stockton, CA 95205 12/21/88)*
3591 Maple Drive (Landlord: Fort Dodge Better-
Fort Dodge, IA 50501 ment Foundation; lease dated
11/20/89)*
1416 Indian Head Drive (Landlord: Northern Can
Menomonee, WI 54715 Systems of Wisconsin, Inc.;
lease dated 5/25/93)
1409 Indian Head Drive (Landlord: Northern Can
Memomonee, WI 54715 Systems Warehouse, Inc.; lease
dated 5/25/93)
6180 Roselle Avenue (Landlord: Riverbank Venture:
Riverbank, CA 95367 lease dated May 1, 1990)
Parker Tobacco (Landlord: Parker Tobacco:
697 Parker Road lease dated 6/1/91)
Maysville, KY 41056
Herro-Radthe West (Landlord: Herro-Radthe:
1325 Wall Street lease dated 3/1/89)*
Oconomowoc, WI 53066
Warehouse N57 W39593 (Landlord: Herro-Radthe:
Highway 16 West lease dated 11/20/90)*
Oconomowoc, WI 53066
Alsman Warehouse (Landlord: Bill Alsman:
2808 Patterson Road lease dated 7/1/90)
Riverbank, CA 95367
Robert B. Schilli (Landlord: Robert B. Schilli:
Jefferson Industrial Park lease dated 1/1/89)
Ft. Madison, Iowa 52627
1 Mile East of Plover (Landlord: Del Monte
on County Track Highway B Corporation: lease dated
Plover, WI 54467 12/17/93)**
Farm Road 393 (Landlord: Del Monte
Crystal City, TX 78839 Corporation: lease dated
12/17/93)**
2. Silgan Plastics Corporation
---------------------------
Owned Properties
----------------
27 Bridge Street Plant*
Deep River, CT 06417
910 Gerber Street Plant*
Ligonier, IN 46767
3574 East Kemper Road Plant*
Sharonville, OH 45231
2337 Centerline (Unimproved land)*
Industrial Drive
Westport, MO 63141
Vine Street and Adamson Plant*
Drive
Monroe, GA 30655
3779 North Country Road Plant*
850 East
Seymour, IN 47274
Leased Properties
-----------------
1858 Meca Way (Sublease from Amoco 11/3/78,
Norcross, GA 30093 amended 4/1/91)
2337 Centerline (Landlord: Crow - St. Louis;
Industrial Drive lease dated 11/21/67, amended
Westport, MO 63141 11/26/69, 11/23/74, 3/17/80
(Plant) and 2/15/85)*
910 Gerber Street (Landlord: The Northwestern
Ligonier, IN 46767 Mutual Life Insurance Company;
lease dated 10/1/61, amended
4/1/65 and 2/20/69)*
379 Thornall (Landlord: Metro Four Assoc.,
Edison, NJ 08837 L.P.; lease dated 6/5/88,
amended 3/16/93)
611 East Cerritos Avenue (Landlord: Anaheim/Cerritos
Anaheim, CA 92803 Investment Group; lease dated
7/26/88)
16216 Baxter Road, (Landlord: Land Corp, Inc.;
Suite 300 lease dated 9/25/87, amended
Chesterfield, MO 63017 11/18/87 and 4/22/91)
377 East Butterfield Road (Landlord: Homart Development
Suite 440 Co.; lease dated 12/3/92)
Lombard, IL 60148-5681
Building #460 (Landlord: USCO Distribution
Erie Industrial Park Services, Inc.; lease dated
Port Clinton, OH 43452 2/18/85, amended 9/1/88 and
6/7/91)
Building #2 (Landlord: USCO Distribution
Erie Industrial Park Services, Inc.; lease dated
Port Clinton, OH 43452 9/22/86, amended 9/1/87 and
6/7/91)
7600 White Pine Road (Landlord: Armal Corporation;
Richmond, VA 23237 lease dated 3/31/89, subleased
(Chesterfield County) to American Sitronia
Corporation 7/1/92)
700 and 715 Orange St. (Landlord: Armal Corporation;
Franklin, KY 42134 lease dated 3/31/89)*
109, 110, 111 and 112 (Landlord: Kylou, Inc.; lease
Watterson Warehouse Center dated 3/20/84, amended
3899 Produce Road 8/17/88)
Louisville, KY 40218
121 Wheeler Court (Landlord: Adwin Realty Co.;
Bucks County Business Park lease dated 8/16/78, extended
Langhorne, PA 19047 9/3/93)
181 Wheeler Court (Landlord: Prudential Ins.
Bucks County Business Park Co. of America; lease dated
Langhorne, PA 19047 4/12/90, expires 1994, a
portion subleased to Schwartz
Paper Co. 8/23/93)
3. Express Plastic Containers
Limited
----------------------------
Owned Properties
----------------
None.
Leased Properties
-----------------
1575 Drew Road (Landlord: 827531 Ontario
Mississauga, Ontario Limited; lease dated 3/31/89)
Canada
2380 Drew Road (Landlord: Morgan Mae
Mississauga, Ontario Enterprises Limited and Mid
Canada King Investments Limited d/b/a
Alness Properties; leases
dated February 3, 1987 and
April 30, 1987)
4. Silgan Corporation
------------------
Owned Properties
----------------
None.
Leased Properties
-----------------
None.
5. California-Washington Can
Corporation
--------------------------
Owned Properties
----------------
49 E. Third Avenue Plant**
Toppenish, WA 98948
Leased Properties
-----------------
2716 E. Miner Avenue (Landlord: Del Monte
Stockton, CA 95205 Corporation; lease dated
12/17/93**
Kern & Marion Street (Landlord: Del Monte
Kingsburg, CA 93631 Corporation; lease dated
12/17/93)**
400 Yosemite Blvd. (Landlord: Del Monte
Modesto, CA 95354 Corporation; lease dated
12/17/93)**
3100 E. 9th Street (Landlord: Del Monte
Oakland, CA 94601 Corporation; lease dated
12/17/93)
- -----------------------
*/ Existing Mortgaged Properties.
**/ New Mortgaged Properties.
1/ Mortgage Amendment will be prepared and filed within 45 days following the
Initial Borrowing Date.
2/ Mortgage Amendment will be prepared and filed within 45 days following the
Initial Borrowing Date.
SCHEDULE IV
TO
CREDIT AGREEMENT
----------------
INSURANCE REQUIREMENT
---------------------
See Annex A attached hereto for the amounts insured and types of
coverage provided.
SCHEDULE V
TO
CREDIT AGREEMENT
----------------
Permitted Liens
---------------
Liens evidenced by filings permitted by Annex A to the Security
Agreement and Annex A to the First Amendment to the Amended and Restated
Security Agreement.
SCHEDULE VI
TO
CREDIT AGREEMENT
----------------
Existing Indebtedness
---------------------
1. Silgan Containers Corporation
-----------------------------
Trade payables and accruals $46,000,000
2. Silgan Plastics Corporation
---------------------------
Trade payables and accruals $28,500,000
3. Express Plastic Container Limited
---------------------------------
Trade payables and accruals $ 1,500,000
4. California-Washington Can Corporation
-------------------------------------
Trade payables and accruals $ 1,300,000
SCHEDULE VII
TO
CREDIT AGREEMENT
-----------------
MIRROR INTERCOMPANY NOTES
-------------------------
Containers Senior Subordinated Debt $ 92,425,000
Intercompany Note
Plastics Senior Subordinated Debt 42,575,000
Intercompany Note
Containers Senior Secured Debt Intercompany 17,225,000
Note
Plastics Senior Secured Debt Intercompany
Note 32,775,000
Containers Acquisition Intercompany Note A 60,000,000
Containers Acquisition Intercompany Note B 15,000,000
Plastics Acquisition Intercompany Note B 61,000,000
Express Acquisition Intercompany Note C $ 6,598,256
Canadian Holdco Acquisition Intercompany
Note C $ 6,598,256
Containers Short Term B Loan Intercompany Note 19,000,000
SCHEDULE VIII
TO
CREDIT AGREEMENT
-----------------
CERTAIN CAPITALIZED LEASES
--------------------------
Silgan Containers Corporation None
Silgan Plastics Corporation None
Express Plastic Containers Limited None
California-Washington Can Corporation None
SCHEDULE IX
TO
CREDIT AGREEMENT
----------------
EXISTING INVESTMENTS
--------------------
None
SCHEDULE X
TO
CREDIT AGREEMENT
----------------
BANK ADDRESSES
--------------
Bankers Trust Company
One Bankers Trust Plaza
New York, New York 10006
Attention: Daniel Toscano
Telephone No.: (212) 250-9568
Telecopier No.: (212) 250-7218
Bank of America National Trust
and Savings Association
335 Madison Avenue
New York, New York 10017
Attention: Elizabeth Borow
Telephone No.: (212) 503-8236
Telecopier No.: (212) 503-7771
Exhibit 10
AMENDED AND RESTATED HOLDINGS GUARANTY
AMENDED AND RESTATED GUARANTY (as amended, modified or supplemented
from time to time, this "Guaranty"), dated as of June 30, 1989, and amended
and restated as of June 18, 1992, and further amended and restated as of
December 21, 1993, made by SILGAN HOLDINGS INC., a Delaware corporation (the
"Guarantor"). 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, each, a "Borrower" and, collectively,
the "Borrowers"), the lenders from time to time party thereto (the "Banks"),
Bank of America National Trust and Savings Association, as Co-Agent (the "Co-
Agent"), and Bankers Trust Company, as Agent (the "Agent", and together with
the Banks and the Co-Agent, the "Bank Creditors") are party to the Credit
Agreement, dated as of December 21, 1993 (as the same may be amended,
modified or supplemented from time to time, the "Credit Agreement"),
providing for the making of Loans and the issuing of Letters of Credit as
provided 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, the Guarantor has heretofore entered into a Guaranty,
dated as of June 30, 1989 and amended and restated as of June 18, 1992 (as
amended, modified or supplemented to the date hereof, the "Original Holdings
Guaranty");
WHEREAS, each of the Borrowers is a Wholly-Owned Subsidiary of the
Guarantor;
WHEREAS, it is a condition to the above-mentioned extensions of
credit to the Borrowers that the Guarantor shall have executed and delivered
this Guaranty; and
WHEREAS, the Guarantor will obtain benefits as a result of the
entering into of the Credit Agreement, the consummation of the Transaction
and the extensions of credit to the Borrowers under the Credit Agreement and,
accordingly, the Guarantor desires to enter into this Guaranty in order to
satisfy the conditions described in the preceding paragraph and to amend and
restate the Original Holdings Guaranty in the form of this Guaranty;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to the Guarantor, the receipt and sufficiency of which are
hereby acknowledged, the Guarantor hereby makes the following representations
and warranties to the Secured Creditors and hereby covenants and agrees with
each Secured Creditor as follows:
1. The Guarantor 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 Note issued to such Bank Creditor under the Credit
Agreement, together with all other liabilities and obligations of the
Borrowers to the Bank Creditors (including, without limitation, to repay all
Loans, Unpaid Drawings, Fees, indemnities and interest) incurred or to be
incurred under, arising out of or in connection with, the Credit Agreement or
any other Credit Document and the due performance of and compliance with the
terms, conditions and agreements contained in the Credit Documents by each
Borrower (all such Notes, liabilities and other obligations are herein
collectively called the "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 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 "Interest Rate Protection Obligations"; and together
with the Credit Agreement Obligations are herein collectively called the
"Guaranteed Obligations"). The Guarantor understands, agrees and confirms
that each Secured Creditor may enforce this Guaranty up to the full amount of
the Guaranteed Obligations against it without proceeding against the
Borrowers, against any security for the Guaranteed Obligations, against any
other guarantor or under any other guaranty covering the Guaranteed
Obligations. This Guaranty shall constitute a guaranty of payment and not of
collection.
2. The 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 the
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, the Guarantor, without incurring
responsibility to the Guarantor, without impairing or releasing the
obligations of the 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 Guarantor;
(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 Credit Documents, or otherwise amend, modify or
supplement any 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 the 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 the Guarantor.
5. If and to the extent that the Guarantor makes any payment to a
Secured Creditor or to any other Person pursuant to or in respect of this
Guaranty, any claim which the Guarantor may have against any Borrower by
reason thereof shall be subject and subordinate to the prior payment in full
of the Guaranteed Obligations of each Secured Creditor.
6. As used in this Guaranty, 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):
"Common Stock Issuance" shall mean the issuance by Holdings on or
prior to the Initial Borrowing Date of 250,000 shares of its Class B Common
Stock, $.01 par value, to Mellon Bank, N.A., as trustee for First Plaza Group
Trust, a group trust established under the laws of the State of New York
("First Plaza").
"Dividend" shall mean, with respect to any Person, the payment of
any dividends to, or return any capital to, its stockholders or the
authorization of or making of any other distribution, payment or delivery of
property or cash to its stockholders as such, or redemption, retirement,
purchase or other acquisition, directly or indirectly, for a consideration,
of 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
Person with respect to its capital stock), or the setting aside of any funds
for any of the foregoing purposes.
"Holdings Employee Stock Options" shall have the meaning provided
in Section 7(h) of this Guaranty.
"Holdings Stock Option Agreement" shall mean those various stock
option agreements pursuant to which the Guarantor has issued, or may from
time to time issue, Holdings Employee Stock Options.
"Shareholders Agreement" shall mean the Amended and Restated
Organization Agreement, dated as of December 21, 1993, among Mr. R. Philip
Silver ("Silver"), Mr. D. Greg Horrigan ("Horrigan"), the Guarantor, The
Morgan Stanley Leveraged Equity Fund, II, L.P. ("MS Equity"), First Plaza and
Bankers Trust New York Corporation ("BTNY"), as amended, modified or
supplemented to the date hereof.
7. In order to induce the Bank Creditors to enter into the Credit
Agreement and to make the Loans and issue Letters of Credit pursuant to the
Credit Agreement, the Guarantor makes the following representations,
warranties and agreements:
(a) Corporate Status. Each of the Guarantor and 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 (iii) is duly
qualified as a foreign corporation and in good standing in each
jurisdiction where the ownership, leasing or operation of its property
or the conduct of its business requires such qualification, except where
the failure to be so qualified would not have a material adverse effect
on the business, operations, property, assets or condition (financial or
otherwise) of the Guarantor or of the Guarantor and its Subsidiaries
taken as a whole.
(b) Corporate Power and Authority. The Guarantor has the
corporate power and authority to execute, deliver and carry out the
terms and provisions of each of the Credit 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 the Credit
Documents to which it is a party. The Guarantor has duly executed and
delivered each of the Credit Documents to which it is party, and each of
the Credit Documents to which it is a party 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).
(c) No Violation. Neither the execution, delivery and performance
by each of the Guarantor and its Subsidiaries of any Credit Document to
which it is a party nor compliance by it with 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 the Guarantor 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 the
Guarantor 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 is subject, or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws of
the Guarantor or any of its Subsidiaries.
(d) Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the Guarantor, threatened with
respect to the Guarantor or any of its Subsidiaries or with respect to
any Document or the Transaction that are reasonably likely to have a
material adverse effect on (i) the business, operations, property,
assets or condition (financial or otherwise) of the Guarantor and its
Subsidiaries taken as a whole, or (ii) the ability of the Guarantor or
any of its Subsidiaries to perform its obligations under the Documents
to which it is party.
(e) Liabilities; Assets. (i) Other than pursuant to the
Documents to which the Guarantor is a party and advances made to the
Guarantor pursuant to Section 8.06(xvi), (xviii) and (xxi) of the Credit
Agreement and certain liabilities to certain former stockholders of
Silgan in connection with the Reorganization there were as of the
Effective Date no liabilities or obligations with respect to the
Guarantor of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individ-
ually or in the aggregate, would be material to the Guarantor and its
Subsidiaries taken as a whole. Except as described in the previous
sentence, as of the Effective Date, the Guarantor does not know of any
basis for the assertion against the Guarantor of any liability or
obligation of any nature whatsoever which, either individually or in the
aggregate, is reasonably likely to be material to the Guarantor and its
Subsidiaries taken as a whole.
(ii) As of the Effective Date, the Guarantor has no
significant assets other than its ownership interest in Silgan.
(f) Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration
with (except as have been obtained or 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 by the Guarantor of any Document to
which it is party or (ii) the legality, validity, binding effect or
enforceability of any Document to which the Guarantor is party.
(g) Holdings Pledge Agreement. The Holdings Pledge Agreement is
in full force and effect on and after the Effective Date and is one of
the Documents subject to the representations and warranties made in
preceding clause (b) of this Section 7. The security interests created
in favor of the Collateral Agent under the Holdings Pledge Agreement
constitute first priority perfected security interests in the respective
Pledge Agreement Collateral in favor of the Collateral Agent and subject
to no Lien of any other Person. No consents, filings or recordings are
required in order to perfect (or maintain the perfection or priority of)
the security interests in the Pledged Securities purported to be created
by the Holdings Pledge Agreement.
(h) Capitalization. The authorized capital stock of the Guarantor
consists of 3,167,500 shares of capital stock, consisting of (i) 500,000
shares of Class A Common Stock, $0.01 par value, of which 417,500 shares
are issued and outstanding, (ii) 667,500 shares of Class B Common Stock,
$0.01 par value, all of which shares are issued and outstanding,
(iii) 1,000,000 shares of Class C Common Stock, $0.01 par value, of
which 50,000 shares are issued and outstanding, and (iv) 1,000,000
shares of preferred stock, none of which are issued and outstanding.
All such outstanding shares of capital stock of the Guarantor have been
duly and validly issued, are fully paid and non-assessable. The
Guarantor has issued and there are currently outstanding options to
purchase up to 15,000 shares of Class C Common Stock of the Guarantor
pursuant to the Guarantor's Amended and Restated Stock Option Plan,
which options are held by certain officers of the Company (the
"Guarantor Options"). The Guarantor does not have 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) the right of the
Guarantor to call, and the obligation of the Guarantor to repurchase,
the Class A Common Stock held by Silver and Horrigan (or certain related
Persons) as set forth in Sections 5.5 and 5.6 of the Shareholders
Agreement, provided that any payment obligation with respect thereto
shall be evidenced by a promissory note of the Guarantor issued in the
form of Exhibit A hereto (a "Shareholder Subordinated Note"), (ii) the
right of the Guarantor to call, and the obligation of the Guarantor to
repurchase, certain options (the "Holdings Employee Stock Options") or
common stock held by certain other employees of the Guarantor, provided
that any payment obligation with respect thereto shall be evidenced by a
Shareholder Subordinated Note which may not provide for payment of
interest in cash before the earlier of (a) March 31, 1997 and (b) any
date after the termination of the Guaranteed Obligations, (iii) the
rights of first refusal granted under the Shareholders Agreement and the
Stockholders Agreement, dated as of December 21, 1993, among Silver,
Horrigan, MS Equity, BTNY, First Plaza and the Guarantor (the
"Stockholders Agreement"), (iv) the right of the Guarantor to call the
Class B Common Stock held by Mellon Bank, N.A., as trustee for First
Plaza pursuant to Article VI of the Shareholders Agreement, (v) payments
relating to the Holdings Employee Stock Options in respect of 15,000
shares of common stock of the Guarantor to be issued to certain
employees and/or officers of the Guarantor pursuant to the Holdings
Stock Option Agreement, provided that such payments shall be subject to
the limits set forth in Section 8(b)(iii) of this Guaranty and in
Section 8.03(i) and (vii) of the Credit Agreement, (vi) pursuant to the
Containers Amended and Restated 1989 Stock Option Plan (the "Containers
Option Plan"), under which options are held by certain officers of
Containers (the "Containerrs Options"), and the Plastics Amended and
Restated 1989 Stock Option Plan (the "Plastics Option Plan"), under
which options are held by certain officers of Plastics (the "Plastics
Options"), in the event of a "public offering" of the common stock of
the Guarantor, or a "change of control" of the Guarantor, Containers
Options and Plastics Options shall, pursuant to the terms of the
Containers Option Plan and the Plastics Option Plan, respectively, be
converted into options to purchase common stock of the Guarantor, and
shares previously issued upon the exercise of Containers Options or
Plastics Options shall, pursuant to the terms of the Containers Option
Plan or the Plastics Option Plan, respectively, be converted into shares
of common stock of the Guarantor, and (vii) the rights and obligations
of any Regulated Stockholder of the Guarantor (as defined in the
Restated Certificate of Incorporation of the Guarantor) to convert
shares of one class of common stock of the Guarantor into shares of
another class of common stock of the Guarantor pursuant to the terms of
Paragraph D of Article SEVENTH of the Restated Certificate of
Incorporation of the Guarantor.
(i) Compliance with Statutes, etc. Each of the Guarantor and 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, equal opportunity employment and employee
safety), except for such non-compliances which, in the aggregate for the
Guarantor and its Subsidiaries, would not have a material adverse effect
on the business, property, assets or condition (financial or otherwise)
of the Guarantor and its Subsidiaries taken as a whole.
(j) Tax Returns and Payments. Each of the Guarantor and 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.
The Guarantor and each of its Subsidiaries has paid, or has provided
adequate reserves (in the good faith judgment of the management of the
Guarantor) 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.
(k) Investment Company Act. The Guarantor is not an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(l) True and Complete Disclosure. To the best of the Guarantor's
knowledge after due inquiry, each Document to which the Guarantor is
party and all other written information furnished to the Secured
Creditors by or on behalf of the Guarantor in connection herewith and
therewith did not taken as a whole contain any untrue statement of
material fact or omit to state a material fact (taken as a whole)
necessary in order to make the information contained herein and therein
not misleading.
(m) Holdings. The Guarantor owns all of the outstanding and
issued capital stock of Silgan. The Guarantor has no direct Wholly-
Owned Subsidiaries other than Silgan.
(n) Representations and Warranties in Other Agreements. All
representations and warranties made by any Credit Party in the Documents
to which it is a party are true and correct in all material respects as
of the time as of which such representations and warranties were made or
deemed made.
(o) Absence of Default and Events of Default. No event has
occurred and no condition exists, or by reason of any of the
transactions contemplated by the Documents or otherwise will occur or
exist, which would constitute a Default or an Event of Default under the
Credit Agreement.
8. The Guarantor covenants and agrees that on and after the
Effective Date and for so long as the Credit Agreement is in effect and until
the Total Commitments 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, it will:
(a) Liens. Not create, assume or suffer to exist any Lien upon
any of its properties or assets, whether now owned or hereafter
acquired, except (i) Liens in favor of the Collateral Agent pursuant to
the Holdings Pledge Agreement, (ii) inchoate tax Liens for taxes not yet
due and payable and (iii) 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 the Guarantor) have been
established.
(b) Distributions. Not declare or make any Dividend to its
shareholders, except that (i) the Guarantor may, upon the death,
disability or termination of employment of Silver and/or Horrigan and
pursuant to the terms and conditions set forth in Sections 5.5 and 5.6
of the Shareholders Agreement, purchase the Class A Common Stock held by
such persons, their estates or certain other related Persons, provided
that the total consideration paid to such persons or their estate for
such purchase shall be evidenced by a Shareholder Subordinated Note,
(ii) the Guarantor may, upon death, disability or termination of certain
other employees and/or officers of the Guarantor, purchase certain
options or common stock of such employees, provided that the total
consideration paid for such purchase shall be evidenced by a Shareholder
Subordinated Note containing subordination provisions contained in
Annex A thereto and upon which no interest shall be payable in cash
before the earlier of (a) March 31, 1997 and (b) the date of the
termination of the Guaranteed Obligations and (iii) the Guarantor may
(x) repurchase or redeem its Holdings Employee Stock Options and (to the
extent such Holdings Employee Stock Options have been validly exercised)
the common stock of the Guarantor issued upon the exercise thereof upon
the termination of employment of the holder thereof, all as set forth in
the Holdings Stock Option Agreement and (y) make required payments with
respect to the stock appreciation rights granted in connection with its
Holdings Employee Stock Options, provided that no payment of the types
described in this clause (iii) may be made if (1) at the time of such
payment a Default or an Event of Default then exists or would result
therefrom and (2) the amount of such payment, when aggregated with the
amount of all other such payments permitted pursuant to Section 8.03(i)
and (vii) of the Credit Agreement made after the Effective Date and
including such date by Silgan, Containers, Plastics and the Guarantor 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) of the Credit Agreement.
(c) Indebtedness. Not create, incur, assume or suffer to exist
any Indebtedness except (i) Indebtedness incurred under this Guaranty,
(ii) Indebtedness represented by the Senior Discount Debentures in an
aggregate face amount not to exceed $275,000,000 (as reduced by any
repayments of principal thereof), (iii) Indebtedness represented by
advances made to the Guarantor pursuant to Section 8.06(xvi), (xviii)
and (xxi) of the Credit Agreement and (iv) upon the purchase of the
common stock and/or options as permitted by Section 8(b) hereof,
Indebtedness of the Guarantor represented by a Shareholder Subordinated
Note issued by the Guarantor as consideration therefor.
(d) Advances, Investments and Loans. Not make or permit to remain
outstanding any loans or advances by it to any other 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,
except that (i) the Guarantor may own the capital stock of Silgan and
(ii) the Guarantor may make capital contributions to Silgan. If at any
time after the Initial Borrowing Date the Guarantor holds cash or Cash
Equivalents which exceed $250,000 in the aggregate for any period of
five consecutive Business Days, such excess shall be contributed to
Silgan on the sixth such Business Day.
(e) Merger and Sale of Assets; Issuance of Stock. Not (i) 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 of
any Person and (ii) sell, assign, lease, transfer or otherwise dispose
of any shares of capital stock of Silgan.
(f) Business. Not engage in any business, enter into any material
agreements or incur, assume or suffer to exist any significant
liabilities, in either case on and after the Effective Date other than
the (i) ownership of the capital stock of Silgan, (ii) the issuance of
Shareholder Subordinated Notes referred to in Section 8(b)(i) and (ii)
hereof, (iii) the transactions in connection with the investments,
advances and loans permitted under Section 8(d) hereof, (iv) in respect
of the transactions, agreement and liabilities permitted by the terms of
this Guaranty and (v) management and administration of Holdings and its
Subsidiaries substantially as conducted on the date hereof.
(g) Preservation of Existence, etc. Preserve and maintain its
corporate existence, rights, franchises and privileges in the
jurisdiction of its organization.
(h) Compliance with Statutes, etc. Comply, and 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 noncompliances as would not, in the
aggregate, have a material adverse effect on the business, operations,
property, assets or condition (financial or otherwise) of the Guarantor
or any of its Subsidiaries or the Guarantor and its Subsidiaries taken
as a whole.
(i) Information Covenants. Furnish to each Bank copies of any
financial information provided, or required to be provided, to the
holders of the Senior Discount Debentures pursuant to the terms thereof
and of the respective indentures governing the terms of the Senior
Discount Debentures, and also the following:
(A) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after an officer of the Guarantor
obtains knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or Event of Default, (ii) any
litigation or governmental proceeding (x) against the Guarantor or
any of its Subsidiaries which is reasonably likely to materially
and adversely affect the business, operations, property, assets or
condition (financial or otherwise) of the Guarantor 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 the Guarantor or any of its Subsidiaries.
(B) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, (i) which the Guarantor shall file with the SEC,
or (ii) which the Guarantor shall deliver to the holders of, or to
the trustee with respect to, the Senior Discount Debentures or its
capital stock.
(C) Other Information. From time to time, such other
information or documents (financial or otherwise) as the Agent, the
Co-Agent or the Required Banks may reasonably request.
(j) Inspection of Records. Permit any Person designated by the
Agent, the Co-Agent or any Bank to examine the books and financial
records of the Guarantor and make copies thereof or extracts therefrom
and to discuss its affairs, finances and accounts with the principal
officers of the Guarantor and its independent public accountants, all at
such reasonable times and as often as the Agent, the Co-Agent or any
Bank may reasonably request.
(k) Properties and Accounts. Keep true books of records and
accounts in which full and correct entries will be made of all its
business transactions, and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with
generally accepted accounting principles.
(l) Taxes. Pay when due, and 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 the Guarantor or any of its
Subsidiaries or of the Guarantor 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 the
Guarantor) have been established with respect thereto.
(m) Holdings. Not at any time own less than 100% of the
outstanding capital stock of Silgan.
(n) Transactions with Affiliates. Not enter into any transaction
or series of transactions, whether or not in the ordinary course of
business, with any Affiliate other than on terms and conditions
substantially as favorable to the Guarantor as would be obtainable by
the Guarantor at the time in a comparable arm's-length transaction with
a Person other than an Affiliate, provided that (i) the Guarantor may
make payments as are required pursuant to and perform its obligations
under the Management Services Agreement to which it is a party, provided
that the Quarterly Management Fee (as defined in such Management
Services Agreement) shall accrue but not be paid by the Guarantor upon
the occurrence of certain events, and to the extent, provided in such
Management Services Agreement, (ii) Silgan may make distributions,
advances and loans to the Guarantor to the extent permitted by Sections
8.03, 8.05 and 8.06 of the Credit Agreement, (iii) each of the
Guarantor, Silgan, Containers, Plastics and DM Can may execute, deliver
and perform the Tax Sharing Agreement, (iv) each of the Guarantor and
its Subsidiaries may execute, deliver and perform the Documents to which
it is a party, (v) the Guarantor may execute, deliver and perform the
Shareholders Agreement and Stockholders Agreement and (vi) the Guarantor
may perform certain administrative functions for Silgan and its
Subsidiaries and the Guarantor may receive the amounts permitted by
Section 8.07(iv) of the Credit Agreement.
(o) Limitation on Modifications of Documents; Voluntary
Prepayments. Not (i) make any voluntary or optional payment or
prepayment on or redemption or acquisition for value of (including,
without limitation, by depositing with the trustee with respect thereto
any money or securities before due for the purpose of paying when due),
or exchange, the Senior Discount Debentures or any Shareholder
Subordinated Notes permitted to be issued by the Guarantor pursuant to
Section 8(b)(i) and (ii) of this Guaranty, or make any purchase,
redemption or acquisition for value (or any offer to purchase, redeem or
acquire) of any Senior Discount Debentures, whether as a result of an
Other Indebtedness Change of Control, the consummation of asset sales or
otherwise or (ii) amend or modify, or permit the amendment or
modification of, any provision of the Documents (including the Senior
Discount Debenture Documents, but excluding any amendment to any of the
Documents on the Initial Borrowing Date required as a result of the
Transaction), any Shareholder Subordinated Notes permitted to be issued
by the Guarantor pursuant to Section 8(b)(i) and (ii) of this Guaranty
or of any agreement (including, without limitation, any purchase
agreement, indenture or loan agreement) relating to any of the foregoing
or (iii) amend or modify, or permit the amendment or modification of,
any provision of the Tax Sharing Agreement or any Management Services
Agreement or (iv) amend, modify or change the Shareholders Agreement,
Stockholders Agreement, the Holdings Stock Option Agreement, the
Holdings Employee Stock Options (except, in the case of the Holdings
Stock Option Agreement and the Holdings Employee Stock Options,
immaterial changes which could not adversely affect the Secured
Creditors), its Certificate of Incorporation (including, without
limitation, by the filing or modification of any certificate of designa-
tion) or By-Laws, or any other agreement entered into by the Guarantor
with respect to its capital stock, or enter into any new agreement with
respect to its capital stock (except that the issuance of new Holdings
Employee Stock Options by Holdings in substantially the form furnished
to the Banks on or prior to the Effective Date shall, subject to Section
9(g) hereof, be permitted).
(p) ERISA. Comply with ERISA with respect to each Plan and will
not incur any material obligation to PBGC, any material withdrawal
liability to any Multi-employer Plan or any material accumulated funding
deficiency within the meaning of ERISA, in each of the foregoing cases
so as to have a materially adverse effect on the assets, business,
financial condition, operations or prospects of the Guarantor or so as
to impair the ability of the Guarantor to perform its obligations
hereunder.
(q) Limitation on Issuances of Capital Stock by Subsidiaries. Not
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
direct or indirect percentage ownership of the Guarantor in any class of
the capital stock of such Subsidiary, (iii) subject to Section 7.09 of
the Credit Agreement, the Employee Stock Options (and any common stock
issuable upon exercise thereof) and (iv) subject to Section 8.15 of the
Credit Agreement, issuances of common stock by Containers and Plastics
to Silgan.
(r) Compliance with Credit Documents. Cause each other Credit
Party to comply with each term, covenant and agreement set forth in the
Credit Documents, and, if the Guarantor receives any amounts in
contravention of such terms, covenants and agreements, the Guarantor
shall immediately pay such amounts to the Collateral Agent to be applied
to the Guaranteed Obligations if then due and payable, and otherwise, to
be held as collateral for the Guaranteed Obligations.
(s) Contributions. Contribute to Silgan, upon receipt thereof, an
amount equal to 50% of the Net Equity Proceeds of any sale of equity
(except sales of equity described in Section 5.01(f) of the Credit
Agreement) by the Guarantor and cause Silgan to apply such proceeds to a
mandatory prepayment of the Term Loans as required by Section 4.02(h) of
the Credit Agreement.
9. The occurrence of any of the following specified events shall
constitute an event of default (an "Event of Default") hereunder:
(a) Payment. Any payment default shall exist with respect to any
of the Guaranteed Obligations which continues unremedied for two or more
Business Days; or
(b) Representations, etc. (i) Any representation, warranty or
statement made by the Guarantor herein or any other Credit Party 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.
(ii) Any representation, warranty or statement made in the
Shareholders Agreement made by any party thereto shall prove to be
untrue or misleading, and all such untrue and misleading
representations, warranties and statements shall evidence a material
adverse difference in the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Guarantor or
Silgan.
(c) Covenants. The Guarantor shall (i) default in the due
performance or observance by it of any term, covenant or agreement
(other than those referred to in Section 9(a) and (b) above and clause
(ii) of this Section 9(c)) contained in this Guaranty and such default
shall continue unremedied for a period of 30 days after written notice
to the Guarantor by the Agent, the Co-Agent or any Bank or (ii) default
in the due performance or observance by it of any term, covenant or
agreement contained in Sections 8(a), (b), (c), (d), (e), (f), (g),
(i)(A)(i), (m), (n), (o), (p), (q) and (s); or
(d) Default Under Other Agreements; etc. (i) The Guarantor or any
of its Subsidiaries shall (A) default in any payment of any Indebtedness
(other than the Intercompany Notes) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness
was created, (B) default in the observance or performance of any
agreement or condition relating to any Indebtedness (other than 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 (C) have any Indebtedness (other
than the Intercompany Notes) of the Guarantor or any of its Subsidiaries
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 (except that the Senior Notes may receive their Share of the Net
Sale Proceeds and Net Equity Proceeds as provided in Section 4.02(f) of
the Credit Agreement); provided that it shall not be an Event of Default
under this subsection (d) unless the aggregate Indebtedness referred to
in subclauses (A), (B) and (C) above exceeds $100,000; or (ii) any
Credit Document shall cease to be in full force and effect, or any Secu-
rity Document 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 Collateral), in favor of
the Collateral Agent for the benefits of the Secured Creditors, superior
to and prior to the rights of all third Persons (except that the
security interests created by the Security Agreement 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 of the Credit Agreement), or any party
to any Security Document shall default in the due performance or
observance of any term, covenant or agreement on its part to be
performed pursuant to such Security Document; or
(e) Bankruptcy, etc. The Guarantor shall commence a voluntary
case concerning itself under the Bankruptcy Code; or an involuntary case
is commenced against the Guarantor 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 the Guarantor or any of its
Subsidiaries, or the Guarantor or any of its Subsidiaries commences any
other proceeding under any reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation or simi-
lar law of any jurisdiction whether now or hereafter in effect relating
to the Guarantor or any of its Subsidiaries, or there is commenced
against the Guarantor or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days or the Guarantor 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 the Guarantor 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 the Guarantor or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is
taken by the Guarantor or any of its Subsidiaries for the purpose of
effecting any of the foregoing; or
(f) Judgments. One or more judgments or decrees shall be entered
against the Guarantor or any of its Subsidiaries involving, when added
to any other judgments or decrees of the Guarantor and its Subsidiaries,
a liability (not paid or fully covered by insurance) 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
(g) Change in Control. The Group and/or MS Equity (each as
defined in the Shareholders Agreement) and/or any person (other than
First Plaza or any transferee thereof (other than any other shareholder
of the Guarantor party to the Shareholders Agreement on the Effective
Date)) exercising rights of first refusal under the Shareholders
Agreement shall fail to own a majority of the Class A Common Stock of
the Guarantor, or the Group and/or MS Equity and/or any person (other
than First Plaza or any transferee thereof (other than any other
shareholder of the Guarantor party to the Shareholders Agreement on the
Effective Date)) exercising rights of first refusal under the
Shareholders Agreement shall fail to own a majority of the Class B
Common Stock of the Guarantor.
10. (a) The Guarantor hereby waives 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 the Borrowers or any other guarantor
of the 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. The Guarantor hereby further waives 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 the Borrowers 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 the Borrowers.
The Guarantor also waives 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.
(b) Notwithstanding the provisions of the preceding clause (a),
the Guarantor shall have and be entitled to (i) all rights of subrogation
otherwise provided by law in respect of any payment it may make or be
obligated to make under this Guaranty and (ii) all claims (as defined in the
Bankruptcy Code) it would have against any Other Party in the absence of the
preceding clause (a), and to assert and enforce same, in each case on and
after, but at no time prior to, the date (the "Subrogation Trigger Date")
which is one year and five days after the date on which all indebtedness of
the Borrowers owing to the Secured Creditors has been paid in full if and
only if (x) no Default or Event of Default of the type described in Section
9.05 of the Credit Agreement with respect to the respective Other Party has
existed at any time on and after the date of this Guaranty to and including
the Subrogation Trigger Date and (y) the existence of the Guarantor's rights
under this clause (b) would not make the Guarantor a creditor (as defined in
the Bankruptcy Code) of the respective Other Party in any insolvency,
bankruptcy, reorganization or similar proceeding commenced on or prior to the
Subrogation Trigger Date.
(c) The 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, the 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 the Guarantor's
or any Secured Creditors' right to proceed against any Borrower. The
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.
The 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.
The 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 the
Guarantor against the Secured Creditors may be impaired or extinguished and
that as a result of such impairment or extinguishment of subrogation rights,
the 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, the 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 the
Guarantor against any Borrower or any other party or any security. In
addition, the 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 the Guarantor under Section 726 of the California Code of Civil
Procedure and all rights and benefits which might otherwise be available to
the Guarantor under California Civil Code Sections 2809, 2810, 2815, 2819,
2821, 2839, 2845, 2848, 2849, 2850, 2899 and 3433.
11. This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be 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 the Guarantor in any case shall
entitle the 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 further action in any circumstances without notice or
demand.
12. This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Secured
Creditors and their successors and assigns.
13. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the
Required Banks.
14. The 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 the contents thereof.
15. 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 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 Agent or the Required Banks,
without notice to the 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 the
Guarantor, against and on account of the obligations and liabilities of the
Guarantor to such Secured Creditor under this Guaranty, irrespective of
whether or not such Secured Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits and claims, or any of them,
shall be contingent or unmatured.
16. 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 case of any Bank Creditor, as
provided in the Credit Agreement, (ii) in the case of any Interest Rate
Protection Creditor, at such address as such Interest Rate Protection
Creditor shall have specified in writing to the Guarantor and the Agent and
(iii) in the case of the Guarantor, at its address set forth opposite its
signature below; or in any case at such other address as any of the Persons
listed above may hereafter notify the others in writing.
17. 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 the 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 Note or instrument evidencing
any liability of any Borrower, and the 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.
18. Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by any Borrower or others
(including the Guarantor), with respect to any of the Guaranteed Obligations
shall, if the statute of limitations in favor of the Guarantor 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.
19. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS, THE HOLDERS OF THE NOTES AND THE GUARANTOR 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 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, the Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Guarantor
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, the 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. The 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 the
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 the Agent, the Co-Agent, any other Secured Creditor or the
holder of any Note to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the Guarantor in
any other jurisdiction. The Guarantor hereby irrevocably waives any objec-
tion 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 the
Guaranty brought in the courts referred to 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.
20. The indebtedness and obligations evidenced hereby are secured
by, among other things, the Holdings Pledge Agreement.
21. All references to Sections are to Sections in this Guaranty
unless otherwise specified.
22. All payments made under the Guaranty shall be made without
setoff, counterclaim or other defense.
* * *
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address
4 Landmark Square SILGAN HOLDINGS INC.
Suite 301
Stamford, CT 06901
Attention: Harley Rankin, Jr. By /s/ Harley Rankin, Jr.
--------------------------------
Title: Executive Vice President
ACCEPTED AND AGREED TO:
BANKERS TRUST COMPANY,
as Agent for the Banks
By /s/ Daniel Toscano
---------------------------
Title: Associate
Exhibit 11
AMENDED AND RESTATED BORROWERS GUARANTY
AMENDED AND RESTATED GUARANTY (as amended, modified or supplemented
from time to time, this "Guaranty"), dated as of June 18, 1992, and amended
and restated as of December 21, 1993, made by each of the undersigned (each,
a "Guarantor" and, collectively, 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, each, a "Borrower" and, collectively,
the "Borrowers"), the lenders from time to time party thereto (the "Banks"),
Bank of America National Trust and Savings Association, as Co-Agent, and
Bankers Trust Company, as Agent (the "Agent," and together with the Banks and
the Co-Agent, the "Bank Creditors") are party to the Credit Agreement, dated
as of December 21, 1993 (as amended, modified or supplemented from time to
time, the "Credit Agreement"), providing for the making of the Loans and the
issuing of Letters of Credit as provided 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, California-Washington Can Corporation ("DM Can") is an
indirect Wholly-Owned Subsidiary of Silgan and a direct Wholly-Owned
Subsidiary of Containers:
WHEREAS, the Guarantors (other than DM Can) have heretofore entered
into a Guaranty, dated as of June 18, 1992 (as amended, modified or
supplemented to the date hereof, the "Original Borrowers Guaranty");
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 para-
graph 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 representa-
tions 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 Working Capital 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 Working Capital 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 Working Capital 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
Working Capital Note and Swingline Note issued by Plastics, in each case to
such Bank Creditor under the Credit Agreement, together with all other lia-
bilities and obligations of each other Borrower (including, without
limitation, to repay all such A Term Loans, B Term Loans, Working Capital
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 such A Term Notes, B Term Notes, Working Capital
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
Working Capital 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, Working Capital
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 such A Term Notes, B Term Notes, Working Capital
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
Guaranteed Credit Agreement Obligations are herein collectively called the
"Plastics Guaranteed Obligations"); and
(d) DM Can 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 "DM Can 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 "DM Can Guaranteed Interest
Rate Protection Obligations"; and together with the DM Can Credit Agreement
Obligations are herein collectively called the "DM Can Guaranteed
Obligations," and the DM Can 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 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.
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 Senior 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, Plastics does not waive
its right of contribution from Containers or DM Can, as the case may be,
Containers does not waive its right of contribution from Plastics or DM Can,
as the case may be, and DM Can does not waive its right of contribution from
Containers or Plastics, as the case may be, 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 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.
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 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 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 case of a Guarantor and any
Bank Creditor, as provided in the Credit Agreement and (ii) 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
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,
Working Capital 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 DELI-
VERY 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 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 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.
* * *
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 301
Stamford, Connecticut 06901
Attention: President By /s/ Harley Rankin, Jr.
-----------------------------
Title: Executive Vice President
4 Landmark Square SILGAN CONTAINERS CORPORATION
Suite 301
Stamford, Connecticut 06901
Attention: President By /s/ Harley Rankin, Jr.
------------------------------
Title: Vice President
4 Landmark Square SILGAN PLASTICS CORPORATION
Suite 301
Stamford, Connecticut 06901
Attention: President By /s/ Harley Rankin, Jr.
-----------------------------
Title: Vice President
4 Landmark Square CALIFORNIA-WASHINGTON CAN
Suite 301 CORPORATION
Stamford, Connecticut 06901
Attention: President
By /s/ Harley Rankin, Jr.
-----------------------------
Title: Vice President
ACCEPTED AND AGREED TO:
BANKERS TRUST COMPANY,
as Agent for the Banks
By /s/ Daniel Toscano
---------------------------
Title: Associate
