SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 22, 1996
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
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Item 5: Other Events.
General. On July 22, 1996, Silgan Holdings Inc. (the
"Company") issued and sold 50,000 shares (the "Shares") of its 13 1/4%
Cumulative Exchangeable Preferred Stock (the "Preferred Stock") to "Qualified
Institutional Buyers" in a private placement in reliance on Rule 144A
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
A portion of the net proceeds ($35.7 million) from the sale of the Shares were
used by the Company to purchase, on July 22, 1996, 250,000 shares of its Class B
Common Stock (the "Class B Stock") held by Mellon Bank, N.A., as trustee for
First Plaza Group Trust ("Mellon"), which Class B Stock was canceled on such
purchase date. The remaining net proceeds from the sale of the Shares ($12
million) will be used to redeem an equal principal amount of the Company's 13
1/4% Senior Discount Debentures due 2002 (the "Discount Debentures") on August
26, 1996. Upon completion of this redemption, the Company will have outstanding
approximately $59 million principal amount of Discount Debentures, and will have
redeemed and repurchased an aggregate of approximately $216 million principal
amount at maturity of Discount Debentures since 1995 with borrowings under the
Company's and its subsidiaries' lower cost bank credit facility and with
proceeds from the sale of the Shares. As a result, the Company has lowered its
average cost of indebtedness, will realize $11.5 million of annual cash interest
savings, and will realize $19.5 million of current cash tax savings as a result
of the deduction by the Company of the accreted interest on the retired Discount
Debentures. In addition, the use of a portion of the net proceeds from the sale
of the Shares to purchase the Class B Stock held by Mellon enabled the Company
to purchase such stock at a lower cost than in the future.
The Company may consider refinancing all or a portion of the
remaining Discount Debentures through debt and/or equity financings. Any such
financings will depend upon the market conditions existing at the time and will
have to be effected in compliance with the Company's agreements governing its
indebtedness.
Terms of Preferred Stock. The following is a summary of the
terms of the Preferred Stock.
The Preferred Stock has a liquidation preference of $1,000 per
share and ranks senior to all outstanding capital stock of the Company. The
Company is required to redeem the Preferred Stock at its liquidation preference
of $1,000 per share, plus accrued and unpaid dividends, on July 15, 2006.
Dividends on the Preferred Stock are cumulative from the date
of issuance at 13-1/4% per annum on the liquidation preference thereof, and are
payable quarterly in cash or, on or prior to July 15, 2000 at the sole option of
the Company, in additional shares of Preferred Stock, on January 15, April 15,
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July 15 and October 15, commencing October 15, 1996. If by July 22, 1997 the
Preferred Stock has not been exchanged for the Company's Subordinated Debentures
due 2006 (the "Exchange Debentures"), the dividend rate on the Preferred Stock
will increase by 0.5% per annum to 13-3/4% per annum of the liquidation
preference thereof until such exchange occurs.
The Preferred Stock is exchangeable into Exchange Debentures
at any time at the option of the Company, in whole but not in part, subject to
(i) such exchange being permitted under the Company's and its subsidiaries'
instruments and agreements governing their indebtedness, including the Company's
and its subsidiaries' credit agreement and the Discount Debentures, and (ii) the
conditions therefor described in the Certificate of Designation being satisfied.
On or after July 15, 2000, the Preferred Stock is redeemable,
at the option of the Company, in whole or in part, at the rate of 109.938%
(declining ratably to 100% by July 15, 2003) of the liquidation preference
thereof, plus accrued and unpaid dividends to the redemption date. In addition,
at any time, or from time to time, on or prior to July 15, 2000, the Company
may, at its option, redeem all (but not less than all) of the outstanding shares
of Preferred Stock at a redemption price equal to 110% of the liquidation
preference thereof, plus accrued and unpaid dividends to the redemption date,
with the proceeds of one or more sales of common stock of the Company.
Upon a Change of Control (as defined in the Certificate of
Designation), the Company is required to make an offer to purchase all shares of
Preferred Stock at a purchase price equal to 101% of their liquidation
preference, plus accrued and unpaid dividends to the date of purchase.
Holders of the Preferred Stock have no voting rights except as
provided by law and as provided in the Company's Restated Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), or in the
Certificate of Designation of the Company for the Preferred Stock (the
"Certificate of Designation"). In the event that dividends are not paid for four
consecutive quarters or upon certain other events as described in the
Certificate of Designation (including failure to comply with covenants under the
Certificate of Designation and failure to pay the mandatory redemption price on
the Preferred Stock when due), then the number of directors constituting the
Company's Board of Directors will be adjusted to permit the holders of the
majority of the then outstanding Preferred Stock, voting separately as a class,
to elect the number of directors that is equal to the greater of (i) one and
(ii) the whole number obtained (rounding down to the nearest whole number) by
(a) multiplying 1/6 by the number of directors then in office and (b) adding
one. The Certificate of Incorporation provides that, until the occurrence of
certain events, even if a majority of the directors of the Company vote
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in favor of an action, the directors elected by either of the Company's Class A
Common Stock or Class B Common Stock could block such action.
The Certificate of Designation contains certain covenants
which, among other things, restricts the ability of the Company and its
subsidiaries to incur additional indebtedness and issue preferred stock; pay
dividends or make distributions in respect of their capital stock; purchase,
redeem or otherwise acquire for value shares of capital stock; make any
voluntary or optional principal payments or voluntary or optional redemption,
repurchase, defeasance or other acquisition or retirement for value of any
securities ranking junior to the Preferred Stock; make investments in any
affiliate or unrestricted subsidiary; enter into transactions with shareholders
or affiliates; create restrictions on the ability of the Company's subsidiaries
to make certain payments; issue or sell stock of the Company's subsidiaries;
engage in sales of assets; and engage in mergers or consolidations. Generally,
these covenants are no more restrictive, and in some cases are less restrictive,
than the covenants for the Discount Debentures.
The Company is obligated to consummate an exchange offer (the
"Preferred Stock Exchange Offer") pursuant to an effective registration
statement or cause the Preferred Stock to be registered under the Securities Act
pursuant to a shelf registration statement and, if the Preferred Stock Exchange
Offer is not consummated and such shelf registration statement is not declared
effective on or prior to December 22, 1996, the per annum dividend rate on the
Preferred Stock will be increased by 0.5%, payable in additional shares of
Preferred Stock on each dividend payment date, until the Preferred Stock
Exchange Offer is consummated or such shelf registration statement is declared
effective.
Terms of Exchange Debentures. The following is a summary of
the terms of the Exchange Debentures.
If issued, the aggregate principal amount of the Exchange
Debentures will be equal to the aggregate liquidation preference of, and accrued
but unpaid dividends on, the Preferred Stock outstanding on the date that the
Preferred Stock is exchanged for the Exchange Debentures (the "Exchange Date").
The Exchange Debentures will mature on July 15, 2006.
The Exchange Debentures will be subordinated indebtedness of
the Company, subordinated to the prior payment when due of the principal of, and
premium, if any, and accrued and unpaid interest on, all existing and future
"Senior Indebtedness" (as such term will be defined in the indenture relating to
the Exchange Debentures (the "Exchange Debenture Indenture") to be executed by
the Company and the trustee therefor) of the Company (including indebtedness
under the Company's and its subsidiaries credit agreement and the Discount
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Debentures). In addition, the Exchange Debentures will be effectively
subordinated to all liabilities (including trade payables) of the Company's
subsidiaries.
Each Exchange Debenture will bear interest at the dividend
rate in effect with respect to the Preferred Stock on the date the Exchange
Debentures are issued from the Exchange Date or from the most recent interest
payment date to which interest has been paid or provided for. Interest will be
payable on January 15 and July 15 of each year, commencing with the first of
such dates to occur after the Exchange Date. On or prior to July 15, 2000, the
Company will be permitted to pay interest on the Exchange Debentures by issuing
additional Exchange Debentures.
On or after July 15, 2000, the Exchange Debentures will be
redeemably, at the option of the Company, in whole or in part, at the rate of
109.938% of the principal amount thereof (declining ratable to 100% by July 15,
2003), plus accrued and unpaid interest to the redemption date. In addition, at
any time, or from time to time, on or prior to July 15, 2000, the Company will
be able, at its option, to redeem all (but not less than all) outstanding
Exchange Debentures at a redemption price equal to 110% of the principal amount
thereof, plus accrued and unpaid interest to the redemption date, with the
proceeds of one or more sales of common stock of the Company.
Upon a Change of Control, the Company will be required to make
an offer to purchase all of the Exchange Debentures at a purchase price equal to
101% of their principal amount on the date of purchase, plus accrued and unpaid
interest to the date of purchase.
The Exchange Debenture Indenture will contain certain
covenants which, among other things, will restrict the ability of the Company
and its subsidiaries to incur additional indebtedness; pay dividends or make
distributions in respect of their capital stock; purchase, redeem, or otherwise
acquire for value shares of their capital stock; make any voluntary or optional
principal payments or voluntary or optional redemption, repurchase, defeasance
or other acquisition or retirement for value of any indebtedness subordinated to
the Exchange Debentures; make investments in any affiliate or unrestricted
subsidiary of the Company; enter into transactions with shareholders or
affiliates; create restrictions on the ability of the Company's subsidiaries to
make certain payments; issue or sell stock of the Company's subsidiaries; engage
in sales of assets; and engage in mergers or consolidations. Generally, these
covenants will be no more restrictive than the covenants contained in the
Certificate of Designation for the Preferred Stock.
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Item 7: Exhibits
(c) Exhibits
(1) Restated Certificate of Incorporation of the Company, dated
December 20, 1993.
(2) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company, dated July 19, 1996.
(3) Silgan Holdings Inc. Certificate of Designation of the
Powers, Preferences and Relative, Participating, Optional
and Other Special Rights of 13 1/4% Cumulative Exchangeable
Redeemable Preferred Stock and Qualifications, Limitations
and Restrictions Thereof
(4) Form of the Company's 13 1/4% Cumulative Exchangeable
Redeemable Preferred Stock Certificate
(5) Registration Rights Agreement, dated July 22, 1996, between
the Company and Morgan Stanley & Co. Incorporated
(6) Placement Agreement between the Company and Morgan Stanley &
Co. Incorporated, dated July 17, 1996.
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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/ Harley Rankin, Jr.
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Harley Rankin, Jr.
Executive Vice President,
Chief Financial Officer
and Treasurer
Date: August 2, 1996
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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
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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,
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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
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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
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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.
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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
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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
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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
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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
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(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
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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
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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
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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
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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.
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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
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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.
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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 20th 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
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Exhibit 2
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
SILGAN HOLDINGS INC.
Silgan Holdings Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify as follows:
FIRST: That the Board of Directors of the Corporation has duly
and unanimously adopted the following resolutions setting forth proposed
amendments to the Restated Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation"):
RESOLVED, that the Certificate of Incorporation be, and it
hereby is, amended pursuant to Section 242 of the Delaware General
Corporation Law by adding the following sentence at the end of the
first paragraph of Article FIFTH:
"Upon the occurrence and during the continuation of a
Voting Rights Triggering Event (as defined in the Certificate
of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 13 1/4%
Cumulative Exchangeable Redeemable Preferred Stock and
Qualifications, Limitations and Restrictions Thereof (the
"Certificate of Designation"), the number of directors of the
Corporation shall be increased as provided in the Certificate
of Designation and the holders of a majority of the then
outstanding shares of the Corporation's 13 1/4% Cumulative
Exchangeable Redeemable Preferred Stock (the "Preferred
Stock") issued pursuant to the Certificate of Designation,
voting as a separate class, shall be entitled to elect that
number of directors of the Corporation as provided in the
Certificate of Designation."
; and be it further
RESOLVED, that the Certificate of Incorporation be, and it
hereby is, amended pursuant to Section 242 of the Delaware General
Corporation Law by deleting the last sentence of paragraph D(v)(b) of
Article SEVENTH in its entirety and replacing it with the following:
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,
subject to the rights of the holders of Preferred Stock set
forth in the Certificate of Designation.
<PAGE>
SECOND: That pursuant to a written consent of the holders of
all of the outstanding shares of Class A Common Stock, par value $.01 per share
(the "Class A Common Stock"), of the Corporation and the holder of a majority of
the outstanding shares of Class B Common Stock, par value $.01 per share (the
"Class B Common Stock"), of the Corporation, voting separately as a class (the
Class A Common Stock and the Class B Common Stock being the only voting stock of
the Corporation), dated as of July 19, 1996, given in accordance with the
provisions of Section 228 of the General Corporation Law of the State of
Delaware, the holders of all of the outstanding shares of Class A Common Stock
and the holder of a majority of the outstanding shares of Class B Common Stock,
voting as separate classes, approved the adoption of the aforesaid resolutions
and amendments and, as provided in Section 228 of the General Corporation Law of
the State of Delaware, written notice thereof has been given to those holders of
the Class B Common Stock of the Corporation who had not consented in writing as
provided in Section 228 of the General Corporation Law of the State of Delaware.
THIRD: That the foregoing amendments to the Certificate of
Incorporation have been duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, said Corporation has caused this
Certificate of Amendment of the Restated Certificate of Incorporation to be
signed by its Executive Vice President and attested by its Assistant Secretary
as of this 19th day of July, 1996.
SILGAN HOLDINGS INC.
By/s/Harley Rankin, Jr.
_________________________
Harley Rankin, Jr.
Executive Vice President
Attest:
By/s/Sharon Budds
___________________________
Sharon Budds
Assistant Secretary
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Exhibit 3
SILGAN HOLDINGS INC.
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF
13 1/4% CUMULATIVE EXCHANGEABLE REDEEMABLE
PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
-----------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-----------------------------------------
Silgan Holdings Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Company"), does
hereby certify that, pursuant to authority conferred upon the board of directors
of the Company (or any committee of such board of directors, the "Board of
Directors") by its Restated Certificate of Incorporation, as amended
(hereinafter referred to as the "Certificate of Incorporation"), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, said Board of Directors with full power and authority to act on behalf
of the Board of Directors, by unanimous written consent dated July 8, 1996, duly
approved and adopted the following resolution (the "Resolution"):
RESOLVED, that, pursuant to the authority vested in the Board
of Directors by its Certificate of Incorporation, the Board of Directors does
hereby create, authorize and provide for the issue of 13 1/4% Cumulative
Exchangeable Redeemable Preferred Stock, par value $0.01 per share, with a
liquidation preference of $1,000 per share, consisting of 90,000 shares, having
the designations, preferences, relative, participating, optional and other
special rights and the qualifications, limitations and restrictions thereof that
are set forth in the Certificate of Incorporation and in this Resolution as
follows (the terms used herein, unless otherwise defined herein, are used herein
as defined in paragraph (n) hereof):
(a) Designation. There is hereby created out of the authorized
and unissued shares of preferred stock of the Company a series of preferred
stock designated as the "13 1/4% Cumulative Exchangeable Redeemable Preferred
Stock" (the "Redeemable Preferred Stock"). The number of shares constituting
such series shall be 90,000 shares of Redeemable Preferred Stock, consisting of
an initial issuance of 50,000 shares of Redeemable Preferred Stock plus
additional shares of Redeemable Preferred Stock which may be issued to pay
dividends on the Redeemable Preferred Stock if the Company elects to pay
<PAGE>
dividends in additional shares of Redeemable Preferred Stock. The liquidation
preference of the Redeemable Preferred Stock shall be $1,000 per share.
(b) Rank. The Redeemable Preferred Stock shall, with respect
to dividend distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank senior to all classes of common stock of the
Company and to each other class of capital stock or series of preferred stock
hereafter created by the Board of Directors, the terms of which do not expressly
provide that it ranks senior to or on a parity with the Redeemable Preferred
Stock as to dividend distributions and distributions upon the liquidation,
winding-up and dissolution of the Company (collectively referred to herein,
together with all classes of common stock of the Company, as the "Junior
Securities"). The Redeemable Preferred Stock will, with respect to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company, rank on a parity with any class of capital stock or series of
preferred stock hereafter created by the Board of Directors, the terms of which
have been approved by the Holders of the Redeemable Preferred Stock in
accordance with subparagraph (f)(ii)(A) hereof and which expressly provide that
it ranks on a parity with the Redeemable Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company (collectively referred to herein as the "Parity Securities"). The
Redeemable Preferred Stock shall, with respect to dividend distributions and
distributions upon the liquidation, winding-up and dissolution of the Company,
rank junior to each class of capital stock or series of preferred stock
hereafter created by the Board of Directors, the terms of which have been
approved by the Holders of the Redeemable Preferred Stock in accordance with
subparagraph (f)(ii)(B) hereof and which expressly provide that it ranks senior
to the Redeemable Preferred Stock as to dividend distributions and distributions
upon the liquidation, winding-up and dissolution of the Company (collectively
referred to herein as the "Senior Securities").
(c) Dividends. (i) Beginning on the Preferred Stock Issuance
Date, the Holders of the outstanding shares of Redeemable Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors, out
of funds legally available therefor, dividends on each share of Redeemable
Preferred Stock, at a rate per annum equal to 13 1/4% of the liquidation
preference per share of the Redeemable Preferred Stock, payable quarterly. All
dividends shall be cumulative, whether or not earned or declared, on a daily
basis from the Preferred Stock Issuance Date, and shall be payable quarterly in
arrears on each Dividend Payment Date, commencing on the first Dividend Payment
Date after the Preferred Stock Issuance Date. On and before July 15, 2000, the
Company may pay dividends, at its option, in cash or in additional fully paid
and non-assessable shares of Redeemable Preferred Stock having an aggregate
liquidation preference equal to the amount of such dividends. After July 15,
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2000, dividends shall be paid only in cash. If any dividend (or portion thereof)
payable on any Dividend Payment Date after July 15, 2000 is not declared or paid
in full in cash on such Dividend Payment Date, the amount of such dividend that
is payable and that is not paid in cash on such date shall increase at the rate
of 0.5% per annum (or 1.0% or 0.5% per annum, as the case may be, if the
conditions described in subparagraphs (c)(ii)(A) and/or (c)(ii)(B) hereof are
not satisfied) from such Dividend Payment Date until declared and paid in full.
Each distribution in the form of a dividend (whether in cash or in additional
shares of Redeemable Preferred Stock) shall be payable to Holders of record as
they appear on the stock books of the Company on such record date, not less than
10 nor more than 60 days preceding the relevant Dividend Payment Date, as shall
be fixed by the Board of Directors. Dividends shall cease to accumulate in
respect of shares of the Redeemable Preferred Stock on the Mandatory Exchange
Date (as defined in paragraph (g)(i)(A) hereof) or on the date of their earlier
redemption unless the Company shall have failed to issue the appropriate
aggregate principal amount of Exchange Debentures (as defined in paragraph
(g)(i)(A) hereof) in respect of the Redeemable Preferred Stock on the Mandatory
Exchange Date or shall have failed to pay the relevant redemption price on the
date fixed for redemption.
(ii) Notwithstanding anything else provided herein, (A) if by
one year after the Preferred Stock Issuance Date, the Redeemable Preferred Stock
has not been exchanged for Exchange Debentures, the dividend rate on the
Redeemable Preferred Stock will increase by 0.5% per annum to 13 3/4% per annum
of the liquidation preference per share of Redeemable Preferred Stock until the
Mandatory Exchange Date; and (B) if the Company fails to file and cause to
become effective a registration statement with respect to a registered offer to
exchange the Redeemable Preferred Stock for Exchange Preferred Stock and a shelf
registration statement with respect to the Redeemable Preferred Stock is not
declared effective on or prior to five months after the Preferred Stock Issuance
Date, the dividend rate on the Redeemable Preferred Stock will increase 0.5% per
annum to 13 3/4% per annum of the liquidation preference per share of Redeemable
Preferred Stock from January 1, 1997, payable in additional shares of Preferred
Stock quarterly in arrears on each Dividend Payment Date, commencing April 15,
1997 until such Preferred Stock Exchange Offer is consummated or such shelf
registration statement is declared effective.
(iii) All dividends paid with respect to shares of the
Redeemable Preferred Stock pursuant to paragraph (c)(i) hereof shall be paid pro
rata to the Holders entitled thereto.
(iv) Nothing herein contained shall in any way or under any
circumstances be construed or deemed to require the Board of Directors to
declare, or the Company to pay or set apart for payment, any dividends on shares
of the Redeemable Preferred Stock at any time.
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(v) Dividends on account of arrears for any past Dividend
Period and dividends in connection with any optional redemption pursuant to
paragraph (e)(i) hereof may be declared and paid at any time, without reference
to any regular Dividend Payment Date, to Holders of record on such date, not
more than 45 days prior to the payment thereof, as may be fixed by the Board of
Directors.
(vi) No full dividends shall be declared by the Board of
Directors or paid or funds set apart for payment of dividends by the Company on
any Parity Securities for any period unless full cumulative dividends shall have
been or contemporaneously are declared and paid in full, or declared and (in the
case of dividends payable in cash) a sum in cash set apart sufficient for such
payment on the Redeemable Preferred Stock for all Dividend Periods terminating
on or prior to the date of payment of such full dividends on such Parity
Securities. If any dividends are not paid in full, as aforesaid, upon the shares
of the Redeemable Preferred Stock and any other Parity Securities, all dividends
declared upon shares of the Redeemable Preferred Stock and any other Parity
Securities shall be declared pro rata so that the amount of dividends declared
per share on the Redeemable Preferred Stock and such Parity Securities shall in
all cases bear to each other the same ratio that accrued dividends per share on
the Redeemable Preferred Stock and such Parity Securities bear to each other.
(vii) (A) Holders of shares of Redeemable Preferred Stock
shall be entitled to receive the dividends provided for in paragraph (c)(i)
hereof in preference to and in priority over any dividends upon any of the
Junior Securities.
(B) So long as any shares of Redeemable Preferred Stock are
outstanding, the Company shall not declare, pay or set apart for payment any
dividend on any of the Junior Securities or make any payment on account of, or
set apart for payment money for a sinking or other similar fund for, the
purchase, redemption or other retirement of any of the Junior Securities or any
warrants, rights, calls or options exercisable for or convertible into any of
the Junior Securities (other than the repurchase, redemption or other
acquisition or retirement for value of Junior Securities (and any warrants,
rights, calls or options exercisable for or convertible into such Junior
Securities) held by certain employees of or consultants or advisors to the
Company or any of its Subsidiaries, which repurchase, redemption or other
acquisition or retirement shall have been approved by a majority of the Board of
Directors, provided that such Junior Securities may only be repurchased,
redeemed or otherwise acquired or retired either in exchange for Junior
Securities or upon the termination, retirement, death or disability of such
employee, consultant or advisor), or make any distribution in respect thereof,
either directly or indirectly, and whether in cash, obligations or shares of the
Company or other property (other than distributions or dividends in Junior
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Securities to the holders of Junior Securities) and shall not permit any
corporation or other entity directly or indirectly controlled by the Company to
purchase or redeem any of the Junior Securities or any such warrants, rights,
calls or options, unless full cumulative dividends determined in accordance
herewith have been paid in full on the Redeemable Preferred Stock.
(C) So long as any shares of the Redeemable Preferred Stock
are outstanding, the Company shall not make any payment on account of, or set
apart for payment money for a sinking or other similar fund for, the purchase,
redemption or other retirement of any of the Parity Securities or any warrants,
rights, calls or options exercisable for or convertible into any of the Parity
Securities, and shall not permit any corporation or other entity directly or
indirectly controlled by the Company to purchase or redeem any of the Parity
Securities or any such warrants, rights, calls or options, unless the dividends
determined in accordance herewith on the Redeemable Preferred Stock have been
paid in full.
(viii) Dividends payable on shares of the Redeemable Preferred
Stock for any period less than a year shall be computed on the basis of a
360-day year of 12 30-day months and the actual number of days elapsed in the
period for which dividends are payable. If any Dividend Payment Date occurs on a
day that is not a Business Day, any accrued dividends otherwise payable on such
Dividend Payment Date shall be paid on the next succeeding Business Day.
(d) Liquidation Preference. (i) Upon any voluntary or
involuntary liquidation, dissolution or winding-up of the affairs of the
Company, the Holders of shares of Redeemable Preferred Stock then outstanding
shall be entitled to be paid, out of the assets of the Company available for
distribution to its stockholders, $1,000 per share of Redeemable Preferred
Stock, plus an amount in cash equal to accumulated and unpaid dividends thereon
to the date fixed for liquidation, dissolution or winding-up (including an
amount equal to a prorated dividend for the period from the last Dividend
Payment Date to the date fixed for liquidation, dissolution or winding-up),
before any payment shall be made or any assets distributed to the holders of any
of the Junior Securities, including, without limitation, common stock of the
Company. Except as provided in the preceding sentence, Holders of shares of
Redeemable Preferred Stock shall not be entitled to any distribution in the
event of liquidation, dissolution or winding-up of the affairs of the Company.
If the assets of the Company are not sufficient to pay in full the liquidation
payments payable to the Holders of outstanding shares of the Redeemable
Preferred Stock and holders of all outstanding shares of all Parity Securities,
then the Holders of all such Redeemable Preferred Stock and the holders of all
such Parity Securities shall share equally and ratably in such distribution of
assets of the Company in accordance with the amounts which would be payable on
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such distribution if the amount to which the Holders of outstanding shares of
Redeemable Preferred Stock and the holders of outstanding shares of all Parity
Securities are entitled were paid in full.
(ii) For the purposes of paragraph (d)(i), neither the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with or into one or more
corporations shall be deemed to be a liquidation, dissolution or winding-up of
the affairs of the Company (unless such sale, conveyance, exchange or transfer
is in connection with a dissolution or winding-up of the business of the
Company).
(e) Redemption. (i) Optional Redemption. (A) The Company may
(subject to contractual and other restrictions with respect thereto and the
legal availability of funds therefor), at the option of the Board of Directors,
redeem at any time on or after July 15, 2000, from any source of funds legally
available therefor, in whole or in part, in the manner provided in paragraph
(e)(iii), any or all of the shares of the Redeemable Preferred Stock, at the
redemption prices (expressed as a percentage of the liquidation preference
thereof) set forth below, plus, without duplication, an amount in cash equal to
all accumulated and unpaid dividends per share (including an amount in cash
equal to a prorated dividend for the period from the Dividend Payment Date
immediately prior to the Redemption Date to the Redemption Date) (the "Optional
Redemption Price"), if redeemed during the 12-month period beginning on July 15
of each of the years indicated below:
2000...................................109.938%
2001. .................................106.625%
2002...................................103.313%
2003 and thereafter ...................100.000%;
provided that no optional redemption pursuant to this subparagraph (e)(i)(A)
shall be authorized or made (i) unless prior thereto full unpaid cumulative
dividends for all Dividend Periods terminating on or prior to the Redemption
Date, and for an amount equal to a prorated dividend on the Redeemable Preferred
Stock to be redeemed for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date, shall have been, or
immediately prior to the Redemption Date are, declared and paid in cash or
declared and a sum set apart sufficient for such cash payment on the Redemption
Date on such Redeemable Preferred Stock or (ii) at less than 101% of the
liquidation preference of the Redeemable Preferred Stock at any time when the
Company is making or purchasing shares of Redeemable Preferred Stock under a
Change of Control Offer in accordance with the provisions of paragraph (h)
hereof or an Excess Proceeds Offer in accordance with the provisions of
paragraph (m)(vi) hereof.
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(B) In addition, on or prior to July 15, 2000, in the manner
provided in paragraph (e)(iii) hereof, the Company or a Successor Corporation
may redeem all (but not less than all) outstanding shares of Redeemable
Preferred Stock, at a redemption price equal to 110% of the liquidation
preference, plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends per share (including an amount equal to a
prorated dividend for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date, subject to the right of
Holders of Redeemable Preferred Stock on relevant record dates to receive
dividends due on relevant Dividend Payment Dates (the "Contingent Redemption
Price"), with the proceeds of any sale of its common stock; provided that such
redemption occurs within 180 days after consummation of such sale, and provided
further that no optional redemption pursuant to this subparagraph (e)(i)(B)
shall be authorized or made unless prior thereto full unpaid cumulative
dividends for all Dividend Periods terminating on or prior to the Redemption
Date and for an amount equal to a prorated dividend for the period from the
Dividend Payment Date immediately prior to the Redemption Date to the Redemption
Date shall have been, or immediately prior to the Redemption Notice are,
declared and paid in full in cash or declared and a sum set apart sufficient for
such payment in full in cash on the Redemption Date on the outstanding shares of
the Redeemable Preferred Stock.
(C) In the event of a redemption pursuant to paragraph (e)(i)
hereof of only a portion of the then outstanding shares of the Redeemable
Preferred Stock, the Company shall effect such redemption as it determines, pro
rata according to the number of shares held by each Holder of Redeemable
Preferred Stock, provided that the Company may redeem such shares held by any
Holder of fewer than 100 shares of Redeemable Preferred Stock without regard to
such pro rata redemption requirement, or by lot, in each case, as may be
determined by the Company in its sole discretion.
(ii) Mandatory Redemption. On July 15, 2006 (the "Mandatory
Redemption Date"), the Company shall redeem from any source of funds legally
available therefor, in the manner provided in paragraph (e)(iii) hereof, all of
the shares of the Redeemable Preferred Stock then outstanding at a redemption
price equal to 100% of the liquidation preference per share, plus, without
duplication, an amount in cash equal to all accumulated and unpaid dividends per
share (including an amount equal to a prorated dividend for the period from the
Dividend Payment Date immediately prior to the Redemption Date to the Redemption
Date) (the "Mandatory Redemption Price").
(iii) Procedures for Redemption. (A) At least 30 days and not
more than 60 days prior to the date fixed for any redemption of the Redeemable
Preferred Stock, written notice (the "Redemption Notice") shall be given by
first-class mail, postage prepaid, to each Holder of record on the record date
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fixed for such redemption of the Redeemable Preferred Stock at such Holder's
address as the same appears on the stock register of the Company, provided that
no failure to give such notice nor any deficiency therein shall affect the
validity of the procedure for the redemption of any shares of Redeemable
Preferred Stock to be redeemed except as to the Holder or Holders to whom the
Company has failed to give said notice or except as to the Holder or Holders
whose notice was defective. The Redemption Notice shall state:
(1) whether the redemption is pursuant to subparagraph
(e)(i)(A), (e)(i)(B) or (e)(ii) hereof;
(2) the Optional Redemption Price, the Contingent Redemption
Price or the Mandatory Redemption Price, as the case may be;
(3) whether all or less than all the outstanding shares of the
Redeemable Preferred Stock are to be redeemed and the total number of
shares of the Redeemable Preferred Stock being redeemed;
(4) the number of shares of Redeemable Preferred Stock held,
as of the appropriate record date, by the Holder that the Company intends to
redeem;
(5) the date fixed for redemption;
(6) that the Holder is to surrender to the Company, at the
place or places where certificates for shares of Redeemable Preferred
Stock are to be surrendered for redemption, in the manner and at the
price designated, his certificate or certificates representing the
shares of Redeemable Preferred Stock to be redeemed; and
(7) that dividends on the shares of the Redeemable Preferred
Stock to be redeemed shall cease to accrue on such Redemption Date
unless the Company defaults in the payment of the Optional Redemption
Price, the Contingent Redemption Price or the Mandatory Redemption
Price, as the case may be.
(B) Each Holder of Redeemable Preferred Stock shall surrender
the certificate or certificates representing such shares of Redeemable Preferred
Stock to the Company, duly endorsed, in the manner and at the place designated
in the Redemption Notice and on the Redemption Date. The full Optional
Redemption Price, the Contingent Redemption Price or the Mandatory Redemption
Price, as the case may be, for such shares of Redeemable Preferred Stock shall
be payable in cash to the Person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered certificate shall be
canceled and retired. In the event that less than all of the shares represented
by any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.
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(C) Unless the Company defaults in the payment in full of the
applicable redemption price, dividends on the Redeemable Preferred Stock called
for redemption shall cease to accumulate on the Redemption Date, and the Holders
of such redeemed shares shall cease to have any further rights with respect
thereto from and after the Redemption Date, other than the right to receive the
Optional Redemption Price, the Contingent Redemption Price or the Mandatory
Redemption Price, as the case may be, without interest.
(f) Voting Rights. (i) The Holders of shares of the Redeemable
Preferred Stock, except as otherwise required under Delaware law or as set forth
in paragraphs (f)(ii), (f)(iii) and (f)(iv) hereof, shall not be entitled or
permitted to vote on any matter required or permitted to be voted upon by the
stockholders of the Company.
(ii) (A) So long as any shares of Redeemable Preferred Stock
are outstanding, the Company shall not authorize any class of Parity Securities
without the affirmative vote or consent of Holders of at least a majority of the
outstanding shares of Redeemable Preferred Stock, voting or consenting, as the
case may be, separately as one class, given in person or by proxy, either in
writing or by resolution adopted at an annual or special meeting, except that,
without the approval of Holders of the Redeemable Preferred Stock, the Company
may issue shares of Parity Securities in exchange for, or the proceeds of which
are used to redeem or repurchase, any or all shares of Redeemable Preferred
Stock or indebtedness of the Company then outstanding, provided that, in the
case of Parity Securities issued in exchange for, or the proceeds of which are
used to redeem or repurchase, less than all shares of Redeemable Preferred Stock
then outstanding, (1) the aggregate liquidation preference of such Parity
Securities shall not exceed the aggregate liquidation preference of, premium and
accrued and unpaid dividends on, and expenses in connection with the refinancing
of, the Redeemable Preferred Stock so exchanged, redeemed or repurchased, (2)
such Parity Securities shall not be Redeemable Stock and (3) such Parity
Securities shall not be entitled to the payment of cash dividends prior to July
15, 2000.
(B) So long as any shares of the Redeemable Preferred Stock
are outstanding, the Company shall not authorize any class of Senior Securities
without the affirmative vote or consent of Holders of at least a majority of the
outstanding shares of Redeemable Preferred Stock, voting or consenting, as the
case may be, separately as one class, given in person or by proxy, either in
writing or by resolution adopted at an annual or special meeting.
(C) So long as any shares of the Redeemable Preferred Stock
are outstanding, the Company shall not amend this Certificate of Designation so
as to affect adversely the specified rights, preferences, privileges or voting
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rights of Holders of shares of Redeemable Preferred Stock, or to authorize the
issuance of any additional shares of Redeemable Preferred Stock, without the
affirmative vote or consent of Holders of at least a majority of the outstanding
shares of Redeemable Preferred Stock, voting or consenting, as the case may be,
separately as one class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting. The Holders of at least a
majority of the outstanding shares of Redeemable Preferred Stock, voting or
consenting, as the case may be, separately as one class, whether voting in
person or by proxy, either in writing or by resolution adopted at an annual or
special meeting, may waive compliance with any provision of this Certificate of
Designation.
(D) Prior to the exchange of Redeemable Preferred Stock for
Exchange Debentures, the Company shall not amend or modify, after originally
executed and delivered, the indenture for the Exchange Debentures (the "Exchange
Indenture") (except as expressly provided therein in respect of amendments
without the consent of holders of Exchange Debentures) without the affirmative
vote or consent of Holders of a majority of the outstanding shares of Redeemable
Preferred Stock, voting or consenting, as the case may be, separately as one
class, given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting.
(E) Except as set forth in subparagraphs (f)(ii)(A) and
(f)(ii)(B) hereof, (1) the creation, authorization or issuance of any shares of
any Junior Securities, Parity Securities or Senior Securities, or (2) the
increase or decrease in the amount of authorized capital stock of any class,
including any preferred stock, shall not require the consent of Holders of
Redeemable Preferred Stock and shall not, unless not complying with
subparagraphs (f)(ii)(A) and (f)(ii)(B) hereof, be deemed to affect adversely
the rights, preferences, privileges or voting rights of Holders of shares of
Redeemable Preferred Stock.
(iii) (A) If (1) dividends on the Redeemable Preferred Stock
are in arrears and unpaid (and if, after July 15, 2000, such dividends are not
paid in cash) for four consecutive quarterly periods (each, a "Dividend
Default"); or (2) the Company fails to discharge any redemption obligation with
respect to the Redeemable Preferred Stock (each, a "Redemption Default"); or (3)
the Company fails to make an offer to purchase (and to complete such purchase)
all of the outstanding shares of Redeemable Preferred Stock following a Change
of Control, if such offer to purchase is required to be made pursuant to
paragraph (h) hereof (each, a "Change of Control Default"); or (4) the Company
breaches or violates one of the provisions set forth in paragraph (m) hereof and
the breach or violation continues for a period of 30 consecutive days or more
after notice thereof to the Company by Holders of 25% or more of the liquidation
preference of the Redeemable Preferred Stock then outstanding (each, a
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"Restriction Default"); or (5) there occurs with respect to any issue or issues
of Indebtedness of the Company and/or any Significant Subsidiary having,
individually or in the aggregate, an outstanding principal amount of $20 million
or more for all such issues of the Company and/or any Significant Subsidiary,
whether such Indebtedness exists on the Preferred Stock Issuance Date or is
incurred thereafter, (I) an event of default that has caused the holder thereof
to declare such Indebtedness to be due and payable prior to its Stated Maturity
and such Indebtedness has not been discharged in full or such acceleration has
not been rescinded or annulled within 30 days of such acceleration and/or (II)
the failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default (each, a "Cross/Payment Default"), then
the number of directors constituting the Board of Directors shall be adjusted as
set forth in the Certificate of Incorporation to permit the Holders of the
majority of the then outstanding Redeemable Preferred Stock, voting separately
as one class, to elect the Maximum Redeemable Preferred Stock Directors. Holders
of a majority of the issued and outstanding shares of the Redeemable Preferred
Stock, voting separately as one class, shall have the exclusive right to elect
the Maximum Redeemable Preferred Stock Directors (as defined in subparagraph
(f)(iii)(E) hereof) at a meeting therefor called upon occurrence of any one or
more of a Dividend Default, Redemption Default, Change of Control Default,
Restriction Default or Cross/Payment Default, as the case may be, and at every
subsequent meeting at which the terms of office of the directors so elected by
the Holders of Redeemable Preferred Stock expire (other than as described in
subparagraph (f)(iii)(B) hereof). Each event described in clauses (1), (2), (3),
(4) and (5) of this subparagraph (f)(iii)(A) is a "Voting Rights Triggering
Event." Within 15 days of the time the Company becomes aware of the occurrence
of any default referred to in clause (4) or (5) of this subparagraph
(f)(iii)(A), the Company shall give written notice thereof to the Holders.
(B) The right of the Holders of Redeemable Preferred Stock
voting separately as one class to elect the Maximum Redeemable Preferred Stock
Directors shall continue until such time as (1) in the event such right arises
due to a Dividend Default, all accumulated dividends that are in arrears on the
Redeemable Preferred Stock and that gave rise to such Dividend Default are paid
in full (and, in the case of dividends payable after July 15, 2000, paid in
cash); and (2) in the event such right arises due to a Redemption Default, a
Change of Control Default, a Restriction Default or a Cross/Payment Default, the
Company remedies any such failure, breach or default, at which time the term of
any directors elected pursuant to subparagraph (f)(iii)(A) hereof shall
terminate, subject always to the same provisions for the renewal and divestment
of such special voting rights in the case of any future Voting Rights Triggering
Event. At any time after voting power to elect directors shall have become
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vested and be continuing in the Holders of shares of the Redeemable Preferred
Stock pursuant to subparagraph (f)(iii)(A) hereof, or if vacancies shall exist
in the offices of directors elected by the Holders of shares of the Redeemable
Preferred Stock, a proper officer of the Company may, and upon the written
request of the Holders of record of at least 25% of the shares of Redeemable
Preferred Stock then outstanding addressed to the Secretary of the Company
shall, call a special meeting of the Holders of Redeemable Preferred Stock, for
the purpose of electing the directors which such Holders are entitled to elect.
If such meeting shall not be called by the proper officer of the Company within
30 days after personal service of said written request upon the Secretary of the
Company, or within 30 days after mailing the same within the United States by
certified mail, addressed to the Secretary of the Company at its principal
executive offices, then the Holders of record of at least 25% of the outstanding
shares of the Redeemable Preferred Stock may designate in writing one of their
number to call such meeting at the expense of the Company, and such meeting may
be called by the Person so designated upon the notice required for the annual
meetings of stockholders of the Company and shall be held at the place for
holding the annual meetings of stockholders or such other place in the United
States as shall be designated in such notice. Notwithstanding the provisions of
this subparagraph (f)(iii)(B), no such special meeting shall be called if any
such request is received less than 40 days before the date fixed for the next
ensuing annual or special meeting of stockholders of the Company. Any Holder of
shares of the Redeemable Preferred Stock so designated shall have, and the
Company shall provide, access to the lists of Holders of shares of the
Redeemable Preferred Stock for purposes of calling a meeting pursuant to the
provisions of this subparagraph (f)(iii)(B).
(C) At any meeting held for the purpose of electing directors
at which the Holders of Redeemable Preferred Stock shall have the right, voting
separately as one class, to elect directors as aforesaid, the presence in person
or by proxy of the Holders of at least a majority of the outstanding Redeemable
Preferred Stock shall be required to constitute a quorum of such Redeemable
Preferred Stock.
(D) Any vacancy occurring in the office of a director elected
by the Holders of shares of the Redeemable Preferred Stock may be filled by the
remaining directors, if any, elected by the Holders of shares of the Redeemable
Preferred Stock unless and until such vacancy shall be filled by the Holders of
shares of the Redeemable Preferred Stock.
(E) "Maximum Redeemable Preferred Stock Directors" means the
maximum number of directors of the Company that the Holders of Redeemable
Preferred Stock are entitled to elect equal to the greater of (x) one and (y)
the whole number (including zero) obtained (rounding down to the nearest whole
number) by (1) multiplying 1/6 by the number of members of the Board of
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Directors in office immediately prior to the occurrence of a Voting Rights
Triggering Event and (2) adding one.
(iv) In any case in which the Holders of shares of the
Redeemable Preferred Stock shall be entitled to vote pursuant to this paragraph
(f) or pursuant to Delaware law, each Holder of shares of the Redeemable
Preferred Stock shall be entitled to one vote for each share of Redeemable
Preferred Stock held.
(g) Exchange. (i) Requirements. (A) The Company may exchange
all, but not less than all, of the then outstanding shares of Redeemable
Preferred Stock for the Company's Subordinated Notes due 2006 (the "Exchange
Debentures") at any time. In order to effect such exchange, the Company shall
(1) if necessary to satisfy the condition set forth in clause (II) of this
subparagraph (g)(i)(A), based upon the written advice of counsel to the Company,
file a registration statement with the Securities and Exchange Commission (the
"SEC") relating to such exchange, (2) if a registration statement is filed with
the SEC pursuant to clause (1) above, use its best efforts to cause such
registration statement to be declared effective as soon as practicable by the
SEC and (3) if a registration statement is not filed with the SEC pursuant to
clause (1) above, qualify, to the extent required, the Exchange Indenture and
the trustee thereunder (the "Trustee") under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). In order to effectuate such exchange, the
Company shall send a written notice (the "Exchange Notice") of exchange by mail
to each Holder of record of shares of Redeemable Preferred Stock, which notice
shall state: (v) that the Company is exchanging the Redeemable Preferred Stock
into Exchange Debentures pursuant to this Certificate of Designation; (w) the
date fixed for exchange (the "Mandatory Exchange Date"), which date shall not be
less than 15 days nor more than 60 days following the date on which the Exchange
Notice is mailed (except as provided in the last sentence of this subparagraph
(g)(i)(A)); (x) that the Holder is to surrender to the Company, at the place or
places where certificates for shares of Redeemable Preferred Stock are to be
surrendered for exchange, in the manner designated in the Exchange Notice, such
Holder's certificate or certificates representing the shares of Redeemable
Preferred Stock to be exchanged; (y) that dividends on the shares of Redeemable
Preferred Stock to be exchanged shall cease to accrue on the Mandatory Exchange
Date whether or not certificates for shares of Redeemable Preferred Stock are
surrendered for exchange on the Mandatory Exchange Date unless the Company shall
default in the delivery of Exchange Debentures; and (z) that interest on the
Exchange Debentures shall accrue from the Mandatory Exchange Date whether or not
certificates for shares of Redeemable Preferred Stock are surrendered for
exchange on the Mandatory Exchange Date. On the Mandatory Exchange Date, if the
conditions set forth in clauses (I) through (VI) of this subparagraph (g)(i)(A)
are satisfied, the Company shall issue Exchange Debentures in exchange for the
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Redeemable Preferred Stock as provided in subparagraph (g)(ii)(A), provided that
on the Mandatory Exchange Date: (I) there shall be legally available funds
sufficient therefor (including, without limitation, legally available funds
sufficient therefor under Sections 160 and 170 (or any successor provisions) of
the Delaware General Corporation Law); (II) either (x) a registration statement
relating to the Exchange Debentures shall have been declared effective under the
Securities Act of 1933, as amended (the "Securities Act"), prior to such
exchange and shall continue to be in effect on the Mandatory Exchange Date or
(y) (i) the Company shall have obtained a written opinion of counsel that an
exemption from the registration requirements of the Securities Act is available
for such exchange and that upon receipt of such Exchange Debentures pursuant to
such exchange made in accordance with such exemption, each Holder that is not an
Affiliate of the Company will not be subject to any restrictions imposed by the
Securities Act upon the resale thereof and (ii) such exemption is relied upon by
the Company for such exchange; (III) the Exchange Indenture shall have been duly
executed by the Company and the Trustee with irrevocable instructions to
authenticate the Exchange Debentures necessary for such exchange, (IV) the
Exchange Indenture and the Trustee shall have been qualified under the Trust
Indenture Act; (V) immediately after giving effect to such exchange, no Default
or Event of Default (each as defined in the Exchange Indenture) would exist
under the Exchange Indenture; and (VI) the Company shall have delivered to the
Trustee a written opinion of counsel, dated the date of the exchange, regarding
the satisfaction of the conditions set forth in clauses (I), (II), (III) and
(IV). In the event that the issuance of the Exchange Debentures is not permitted
on the Mandatory Exchange Date or any of the conditions set forth in clauses (I)
through (VI) of the preceding sentence are not satisfied on the Mandatory
Exchange Date, the Company shall use its best efforts to satisfy such conditions
and effect such exchange as soon as practicable.
(B) Upon any exchange pursuant to subparagraph (g)(i)(A)
hereof, Holders of outstanding shares of Redeemable Preferred Stock shall be
entitled to receive a principal amount of Exchange Debentures for shares of
Redeemable Preferred Stock, the liquidation preference of which, plus the amount
of accumulated and unpaid dividends (including a prorated dividend for the
period from the immediately preceding Dividend Payment Date to the Mandatory
Exchange Date) with respect to which, equals such amount; provided that the
Company at its option may pay cash for any or all accrued and unpaid dividends
on the Redeemable Preferred Stock in lieu of issuing an Exchange Debenture in
respect of such dividends.
(ii) Procedure for Exchange. (A) On or before the Mandatory
Exchange Date, each Holder of Redeemable Preferred Stock shall surrender the
certificate or certificates representing such shares of Redeemable Preferred
Stock, in the manner and at the place designated in the Exchange Notice. The
Company shall cause the Exchange Debentures to be executed on the
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Mandatory Exchange Date and, upon surrender in accordance with the Exchange
Notice of the certificates for any shares of Redeemable Preferred Stock so
exchanged (properly endorsed or assigned for transfer, if the notice shall so
state), such shares shall be exchanged by the Company into Exchange Debentures.
The Company shall pay interest on the Exchange Debentures at the rate and on the
dates specified therein from the Mandatory Exchange Date.
(B) If notice has been mailed as aforesaid, and if before the
Mandatory Exchange Date (1) the Exchange Indenture shall have been duly executed
and delivered by the Company and the Trustee and (2) all Exchange Debentures
necessary for such exchange shall have been duly executed by the Company and
delivered to the Trustee with irrevocable instructions to authenticate the
Exchange Debentures necessary for such exchange, then dividends will cease to
accrue on the Redeemable Preferred Stock on and after the Mandatory Exchange
Date and the rights of the Holders of shares of the Redeemable Preferred Stock
as stockholders of the Company shall cease on and after the Mandatory Exchange
Date (except the right to receive Exchange Debentures), and the Person or
Persons entitled to receive the Exchange Debentures issuable upon exchange shall
be treated for all purposes as the registered Holder or Holders of such Exchange
Debentures as of the Mandatory Exchange Date.
(h) Change of Control. (i) Subject to paragraph (h)(v) hereof,
upon the occurrence of a Change of Control, the Company shall make an offer (a
"Change of Control Offer") to each Holder of shares of Redeemable Preferred
Stock to repurchase all or any part of such Holder's shares of Redeemable
Preferred Stock at a cash purchase price equal to 101% of the liquidation
preference thereof plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends per share (including an amount in cash equal to
a prorated dividend for the period from the Dividend Payment Date immediately
prior to the Change of Control Payment Date (as defined in subparagraph
(h)(ii)(B) hereof) to the Change of Control Payment Date) (the "Change of
Control Payment").
(ii) Within 30 days following any Change of Control, the
Company shall mail a notice to such Holder stating: (A) that the Change of
Control Offer is being made pursuant to this Certificate of Designation and
that, to the extent lawful, all shares of Redeemable Preferred Stock tendered
will be accepted for payment; (B) the purchase price and the purchase date,
which shall be no earlier than 30 days nor later than 40 days from the date such
notice is mailed (the "Change of Control Payment Date"); (C) that any shares of
Redeemable Preferred Stock not tendered will continue to accrue dividends in
accordance with the terms of this Certificate of Designation; (D) that, unless
the Company defaults in the payment of the Change of Control Payment, all shares
of Redeemable Preferred Stock accepted for payment pursuant to the Change of
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Control Offer shall cease to accrue dividends on and after the Change of Control
Payment Date and all rights of the Holders of such Redeemable Preferred Stock
shall terminate on and after the Change of Control Date; and (E) a description
of the procedures to be followed by such Holder in order to have its shares of
Redeemable Preferred Stock repurchased.
(iii) On the Change of Control Payment Date, (A) the Company
shall, to the extent lawful, (1) accept for payment shares of Redeemable
Preferred Stock tendered pursuant to the Change of Control Offer and (2)
promptly mail to each Holder of shares of Redeemable Preferred Stock so accepted
payment in an amount equal to the Change of Control Payment for such shares and
(B) unless the Company defaults in the payment for the shares of Redeemable
Preferred Stock tendered pursuant to the Change of Control Offer, dividends will
cease to accrue with respect to the shares of Redeemable Preferred Stock
tendered and all rights of Holders of such tendered shares will terminate,
except for the right to receive payment therefor, on the Change of Control
Payment Date. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(iv) The Company shall comply with Rule 14e-1 under the
Exchange Act and any securities laws and regulations to the extent such laws and
regulations are applicable to the repurchase of shares of the Redeemable
Preferred Stock in connection with a Change of Control.
(v) Notwithstanding the foregoing, the Company shall not
make (or be required to make) a Change of Control Offer if any Indebtedness
outstanding upon the occurrence of a Change of Control is (or may be) required
to be repaid, redeemed or repurchased in full pursuant to the terms thereof (or
if any such Change of Control constitutes a default under such Indebtedness)
until such Indebtedness is repaid, redeemed or repurchased in full, in which
case the date on which all indebtedness is so repaid, redeemed or repurchased
for purposes of this paragraph (h) shall be deemed to be the date on which such
Change of Control shall have occurred. In no event will the Company be required
to commence a Change of Control offer until all Indebtedness under the Silgan
Credit Agreement is paid in full or the Company obtains the requisite consent of
the lenders thereunder.
(i) Conversion or Exchange. The Holders of shares of
Redeemable Preferred Stock shall not have any rights hereunder to convert such
shares into or exchange such shares for shares of any other class or classes or
of any other series of any class or classes of Capital Stock of the Company.
(j) Preemptive Rights. No shares of Redeemable Preferred
Stock shall have any rights of preemption whatsoever as to any securities of the
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Company, or any warrants, rights or options issued or granted with respect
thereto, regardless of how such securities or such warrants, rights or options
may be designated, issued or granted.
(k) Reissuance of Redeemable Preferred Stock. Shares of
Redeemable Preferred Stock that have been issued and reacquired in any manner,
including shares purchased or redeemed or exchanged, shall (upon compliance with
any applicable provisions of the laws of Delaware) have the status of authorized
but unissued shares of preferred stock of the Company undesignated as to series
and may be designated or redesignated and issued or reissued, as the case may
be, as part of any series of preferred stock of the Company, provided that any
issuance of such shares as Redeemable Preferred Stock must be in compliance with
the terms hereof.
(l) Business Day. If any payment, redemption or exchange shall
be required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately succeeding
Business Day.
(m) Certain Additional Provisions. (i) Limitation on
Indebtedness. (A) The Company shall not, and shall not permit any Subsidiary
(other than Silgan and its Subsidiaries) to, Incur any Indebtedness (other than
the Discount Debentures, the Exchange Debentures and Indebtedness existing on
the Preferred Stock Issuance Date) or issue any Redeemable Stock unless, after
giving effect to the Incurrence of such Indebtedness or issuance of Redeemable
Stock and the receipt and application of the proceeds therefrom, the Interest
Coverage Ratio of the Company would be greater than 1.75:1. Notwithstanding the
foregoing, the Company and its Subsidiaries (other than Silgan and its
Subsidiaries) may Incur each and all of the following: (1) Indebtedness in an
aggregate principal amount not to exceed $100 million outstanding at any time;
(2) Indebtedness to the Company or any Restricted Subsidiary; (3) Indebtedness
or Redeemable Stock issued in exchange for, or the net proceeds of which are
used to exchange, refinance or refund, outstanding Indebtedness or Redeemable
Stock, other than Indebtedness Incurred under clauses (1) and (8) of this
subparagraph (m)(i)(A) and any refinancings thereof, in an amount (or, if such
new Indebtedness provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount exchanged, refinanced or refunded
(plus premiums, accrued interest, fees and expenses); provided that Indebtedness
or Redeemable Stock the proceeds of which are used to exchange, refinance or
refund Redeemable Stock, determined as of the date of Incurrence of such new
Indebtedness or issuance of such Redeemable Stock, does not mature prior to the
Stated Maturity or have a mandatory redemption date prior to the Redeemable
Stock to be exchanged, refinanced or refunded, and the Average Life of such
Indebtedness or Redeemable Stock is at least equal to the remaining Average
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Life of the Redeemable Preferred Stock to be exchanged, refinanced or refunded;
(4) Indebtedness issued in exchange for, or the net proceeds of which are used
to exchange, refinance or refund, Silgan Indebtedness; provided that (I) the
principal amount (or, if such Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, the original issue price) of such new Indebtedness shall
not exceed the principal amount of Silgan Indebtedness exchanged, refinanced or
refunded (plus premiums, if any, accrued interest, fees and expenses) and (II)
the Average Life of such new Indebtedness, determined as of the date of
Incurrence of such new Indebtedness, is at least equal to the remaining Average
Life of the Silgan Indebtedness being exchanged, refinanced or refunded; (5)
Indebtedness Incurred in connection with the purchase, redemption, acquisition,
cancellation or other retirement for value of shares of Capital Stock of the
Company, Silgan or any other Restricted Subsidiary, options on any such shares
or related stock appreciation rights or similar securities held by officers or
employees or former officers or employees (or their estates or beneficiaries
under their estates) and which were issued pursuant to any Stock Based Plan,
upon death, disability, retirement or termination of employment or pursuant to
the terms of such Stock Based Plan or any other agreement under which such
shares of Capital Stock, options, related rights or similar securities were
issued; provided that (I) such Indebtedness (other than any Shareholder
Subordinated Notes, which must be pari passu with, or subordinated in right of
payment to, the Exchange Debentures), by its terms or by the terms of any
agreement or instrument pursuant to which such Indebtedness is issued, is
expressly made subordinate in right of payment to the Exchange Debentures at
least to the extent that the Exchange Debentures would be subordinated in right
of payment to Senior Indebtedness, (II) such Indebtedness, by its terms or by
the terms of any agreement or instrument pursuant to which such Indebtedness is
issued, provides that no payments of principal of such Indebtedness by way of
sinking fund, mandatory redemption or otherwise (including defeasance) may be
made by the Company (including, without limitation, at the option of the holder
thereof, other than an option given to a holder pursuant to a "change of
control" or an "asset sale" provision that is no more favorable to the holders
of such Indebtedness than the provisions contained in paragraphs (h) and (m)(vi)
hereof), and such Indebtedness specifically provides that the Company will not
repurchase or redeem such Indebtedness pursuant to such provisions prior to the
Company's repurchase of the Redeemable Preferred Stock required to be
repurchased by the Company under paragraphs (h) and (m)(vi) hereof) at any time
prior to the Mandatory Redemption Date of the Redeemable Preferred Stock and
(III) the scheduled maturity of all principal of such Indebtedness is beyond the
Mandatory Redemption Date of the Redeemable Preferred Stock; (6) Guarantees of
Indebtedness of Silgan and other Restricted Subsidiaries under the Silgan Credit
Agreement; (7) Indebtedness (I) in respect of performance bonds, bankers'
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acceptances and surety or appeal bonds provided in the ordinary course of
business, (II) under (or in respect of) Currency Agreements and Interest Rate
Agreements; provided that, in the case of Currency Agreements that relate to
other Indebtedness, such Currency Agreements do not increase the Indebtedness of
the Company and its Subsidiaries outstanding at any time other than as a result
of fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder and (III) arising from
agreements providing for indemnification, adjustment of purchase price or
similar options, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Subsidiaries pursuant to such agreements, in any case Incurred in connection
with the disposition of any business, assets or Subsidiary of the Company, other
than Guarantees of Indebtedness Incurred by any Person acquiring all or any
portion of such business, assets or Subsidiary of the Company for the purpose of
financing such acquisition; and (8) unsecured Indebtedness of the Company;
provided that such Indebtedness (I) determined as of the date of Incurrence of
such Indebtedness, does not mature prior to the Mandatory Redemption Date of the
Redeemable Preferred Stock, and the Average Life of such Indebtedness is greater
than the remaining Average Life of the Redeemable Preferred Stock, (II) by its
terms or by the terms of any agreement or instrument pursuant to which such
Indebtedness is issued, provides that no payments of principal of such
Indebtedness by way of sinking fund, mandatory redemption or otherwise
(including defeasance) may be made by the Company (including, without
limitation, at the option of the holder thereof other than an option given to a
holder pursuant to a "change of control" or an "asset sale" provision that is no
more favorable to the holders of such Indebtedness than the provisions contained
in paragraphs (h) and (m)(vi) hereof) and such Indebtedness specifically
provides that the Company will not repurchase or redeem such Indebtedness
pursuant to such provisions prior to the Company's repurchase of the Redeemable
Preferred Stock required to be repurchased by the Company under paragraphs (h)
and (m)(vi) hereof) at any time prior to the Mandatory Redemption Date of the
Redeemable Preferred Stock and (III) by its terms or the terms of any agreement
or instrument pursuant to which such Indebtedness is issued, is not scheduled to
pay interest in cash prior to the first date on which dividends on the
Redeemable Preferred Stock are required to be paid in cash.
(B) The Company shall not permit Silgan or any Subsidiary of
Silgan to Incur any Indebtedness or issue any Redeemable Stock unless (1) after
giving effect to the Incurrence of such Indebtedness or issuance of Redeemable
Stock and the receipt and application of the proceeds therefrom, the Interest
Coverage Ratio of Silgan would be greater than 1.75:l or (2) such Indebtedness
so Incurred by Silgan or such Subsidiary of Silgan constitutes Silgan
Indebtedness; provided, however, that any Indebtedness or Redeemable Preferred
Stock so Incurred or issued pursuant to clause (1) or (2) of this subparagraph
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(m)(i)(B) may not prohibit the payment of dividends to the Company (but any such
Indebtedness may condition such payments on the absence of any defaults or
events of defaults thereunder and on compliance with financial tests) in amounts
sufficient to make mandatory interest and principal payments due on the Exchange
Debentures at the times and in the amount due and payable; and provided further,
however, that, in the event the Redeemable Preferred Stock is changed or
exchanged into securities of a Successor Corporation, nothing in this
subparagraph (m)(i)(B) shall prohibit the Successor Corporation from assuming or
otherwise becoming liable for existing Indebtedness of the Company or its
Subsidiaries.
(C) Notwithstanding any other provision of this paragraph
(m)(i), (1) the maximum amount of Indebtedness that the Company, Silgan or any
of their respective Subsidiaries may Incur pursuant to this paragraph (m)(i)
shall not be deemed to be exceeded due solely to the result of fluctuations in
the exchange rates of currencies and (2) for purposes of calculating the amount
of Indebtedness outstanding at any time under clause (1) of subparagraph
(m)(i)(A) hereof, no amount of Indebtedness of the Company, Silgan or any of
their respective Subsidiaries outstanding on the Preferred Stock Issuance Date
shall be considered to be outstanding.
(D) For purposes of determining any particular amount of
Indebtedness under this paragraph (m)(i), Guarantees of, or obligations with
respect to letters of credit supporting, Indebtedness otherwise included in the
determination of such particular amount shall not be included. For purposes of
determining compliance with this paragraph (m)(i), (1) in the event that an item
of Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above clauses, the Company, in its sole discretion, shall
classify such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in one of such clauses and (2) the amount of
Indebtedness issued at a price that is less than the principal amount thereof
shall be equal to the amount of the liability in respect thereof determined in
conformity with GAAP.
(E) Notwithstanding any of the foregoing, nothing in this
paragraph (m)(i) shall prohibit the occurrence of (1) a Company Merger, (2) the
sale of all or substantially all of the property and assets of Silgan or its
successors to the Company and the assumption by the Company of all or
substantially all of the liabilities of Silgan or its successors, or (3) the
change or exchange of the Redeemable Preferred Stock into preferred stock of
Silgan having the same rights and privileges as the Redeemable Preferred Stock.
Immediately upon the occurrence of an event specified in clause (1), (2) or (3)
of this subparagraph (m)(i)(E), (1) paragraphs (m)(i)(A) and (E) (other than
clause (1) hereof) shall be of no further force and effect and (2) all
references to Silgan in subparagraph (m)(i)(B) hereof shall refer to the
Successor Corporation.
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(ii) Limitation on Restricted Payments. (A) The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
(1) declare or pay any dividend or make any distribution on its Junior
Securities (other than dividends or distributions payable solely in shares of
its Junior Securities or such Restricted Subsidiary's Capital Stock (other than
Redeemable Stock) of the same class held by such holders or in options, warrants
or other rights to acquire such shares of Junior Securities or Capital Stock)
held by Persons other than the Company or another Restricted Subsidiary (other
than in respect of the repurchase or redemption of the Company Class B Stock
with the proceeds of the Redeemable Preferred Stock), (2) purchase, redeem,
retire or otherwise acquire for value any Junior Securities (other than in
respect of the repurchase or redemption of the Company Class B Stock with the
proceeds of the Redeemable Preferred Stock) or any shares of Capital Stock of
any Restricted Subsidiary or any Unrestricted Subsidiary (including options,
warrants or other rights to acquire such shares of Junior Securities or Capital
Stock) held by Persons other than the Company or another Restricted Subsidiary
or (3) make any investment in any Affiliate (other than the Company or a
Restricted Subsidiary) or Unrestricted Subsidiary (such payments or any other
actions described in clauses (1) through (3) hereof being, collectively,
"Restricted Payments") if at the time of and after giving effect to the proposed
Restricted Payment: (I) a Voting Rights Triggering Event shall have occurred and
be continuing, (II) the Company (in the case the Company or its Restricted
Subsidiaries will make the Restricted Payment) could not Incur at least $1.00 of
Indebtedness under subparagraph (m)(i)(A) hereof or Silgan (in the case Silgan
or its Restricted Subsidiaries will make the Restricted Payment) could not Incur
at least $1.00 of Indebtedness under subparagraph (m)(i)(B) hereof, (III) the
aggregate amount expended for all Restricted Payments (the amount so expended,
if other than in cash, to be determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution)
after the Preferred Stock Issuance Date (other than any Restricted Payments
under clauses (2) or (4) of subparagraph (m)(ii)(B) hereof) shall exceed the sum
of (w) 50% of the aggregate amount of Adjusted Consolidated Net Income (or, if
Adjusted Consolidated Net Income is a loss, minus 100% of such amount) of the
Company (determined by excluding income resulting from the transfers of assets
received by the Company or a Restricted Subsidiary from an Unrestricted
Subsidiary) accrued on a cumulative basis during the period (taken as one
accounting period) beginning on the first day of the month immediately following
the Preferred Stock Issuance Date and ending on the last day of the last fiscal
quarter preceding the Transaction Date plus (x) the aggregate net cash proceeds
received by the Company from the issuance and sale of Junior Securities of the
Company (other than Redeemable Stock) to any Person other than a Subsidiary of
the Company, including an issuance or sale permitted by this Certificate of
Designation for cash or other property upon the conversion of any Indebtedness
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of the Company subsequent to the Preferred Stock Issuance Date, or from the
issuance of any options, warrants or other rights to acquire Junior Securities
of the Company (in each case, exclusive of any Redeemable Stock or any options,
warrants or other rights that are redeemable at the option of the holder, or are
required to be redeemed, prior to the Mandatory Redemption Date of the
Redeemable Preferred Stock) plus (y) an amount equal to the net reduction in
Investments in Unrestricted Subsidiaries resulting from payments of interest on
Indebtedness, dividends, repayments of loans or advances, or other transfers of
assets, in each case to the Company or any Restricted Subsidiary from
Unrestricted Subsidiaries, or from redesignations of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each case as provided in the definition of
"Investments" set forth in paragraph (n) hereof), not to exceed in the case of
any Unrestricted Subsidiary the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary plus (z)
$25 million, or (IV) all dividends in respect of the Redeemable Preferred Stock
shall not have been declared and paid in full as provided in this Certificate of
Designation.
(B) The foregoing provision shall not be violated by reason
of: (1) the payment of any dividend within 60 days after the date of declaration
thereof if, at the date of declaration, such payment would comply with
subparagraph (m)(ii)(A) hereof; (2) the making of Investments in Unrestricted
Subsidiaries in an aggregate amount not to exceed $75 million outstanding at any
time; (3) the declaration and payment of dividends on the Common Stock of the
Company or Silgan, following an initial public offering of the Common Stock of
the Company or Silgan, as the case may be, of up to 6% per annum of the net
proceeds received by the Company or Silgan, as the case may be, in such initial
public offering; (4) the repurchase, redemption, refinancing or other payment or
prepayment of Junior Securities with the proceeds of Indebtedness incurred under
clauses (1), (3) or (8) of subparagraph (m)(i)(A) hereof; (5) the purchase,
redemption, acquisition, cancellation or other retirement for value of Junior
Securities of the Company, Silgan or any other Restricted Subsidiary, options on
any such shares or related stock appreciation rights or similar securities held
by officers or employees or former officers or employees (or their estates or
beneficiaries under their estates) and which were issued pursuant to any Stock
Based Plan, upon death, disability, retirement or termination of employment or
pursuant to the terms of such Stock Based Plan or any other agreement under
which such Junior Securities, options, related rights or similar securities were
issued; provided that the aggregate cash consideration paid for such purchase,
redemption, acquisition, cancellation or other retirement for value of such
shares of Junior Securities, options, related rights or similar securities after
the Preferred Stock Issuance Date does not exceed $25 million and that any
additional consideration in excess of such $25 million is in the form of
Indebtedness that would be permitted to be Incurred under clause (5) of
subparagraph (m)(i)(A) hereof; (6) the repurchase of Junior Securities of the
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Company or Capital Stock of Silgan followed immediately by the reissuance
thereof for consideration in an amount at least equal to the consideration paid
to acquire such stock, or the redemption, repurchase or other acquisition for
value of Common Stock of the Company or Capital Stock of any Subsidiary of the
Company in exchange for, or with the proceeds of a substantially concurrent
offering of, other Common Stock or shares of the Capital Stock, as the case may
be, of such entity (other than Redeemable Stock); and (7) payments or
distributions pursuant to or in connection with a consolidation, merger or
transfer of assets that complies with the provisions of the Exchange Indenture
applicable to mergers, consolidations and transfers of all or substantially all
of the property and assets of the Company; provided that, in the case of clauses
(2), (3), (4), (5) and (7) of this subparagraph (m)(ii)(B), no Voting Rights
Triggering Event shall have occurred and be continuing or shall occur as a
consequence thereof.
(iii) Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. (A) The Company shall not, and shall not
permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Restricted Subsidiary to (1) pay dividends or make any
other distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(2) pay any Indebtedness owed to the Company or any other Restricted Subsidiary,
(3) make loans or advances to the Company or any other Restricted Subsidiary or
(4) transfer, subject to certain exceptions, any of its property or assets to
the Company or any other Restricted Subsidiary.
(B) Notwithstanding anything else provided herein,
subparagraph (m)(iii)(A) hereof shall not restrict or prohibit any encumbrances
or restrictions existing: (I) in the Silgan Credit Agreement, the Silgan Notes,
the Discount Debentures (including any agreement pursuant to which the Silgan
Notes or the Discount Debentures were issued), or any other agreements in effect
on the Preferred Stock Issuance Date, including extensions, refinancings,
renewals or replacements thereof, provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements are
no less favorable in any material respect to the holders thereof than those
encumbrances or restrictions that are then in effect and that are being
extended, refinanced, renewed or replaced; (II) under or by reason of applicable
law, rule or regulation (including, without limitation, applicable currency
control laws and applicable state corporate statutes restricting the payment of
dividends in certain circumstances); (III) with respect to any Person or the
property or assets of such Person acquired by the Company or any Restricted
Subsidiary and existing at the time of such acquisition, which encumbrances or
restrictions are not applicable to any Person or the property or assets of any
Person other than such Person or the property or assets of such Person so
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acquired; (IV) in the case of clause (4) of subparagraph (m)(iii)(A) hereof, (x)
that restrict in a customary manner the subletting, assignment or transfer of
any property or asset that is a lease, license, conveyance or contract or
similar property or asset, (y) by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or assets of
the Company or any Restricted Subsidiary not otherwise prohibited by this
Certificate of Designation, or (z) arising or agreed to in the ordinary course
of business and that do not, individually or in the aggregate, detract from the
value of the property or assets of the Company or any Restricted Subsidiary in
any manner material to the Company or such Restricted Subsidiary, or (V) with
respect to any Restricted Subsidiary and imposed pursuant to an agreement that
has been entered into for the sale or disposition of all or substantially all of
the Capital Stock of, or property and assets of, such Restricted Subsidiary.
(C) Nothing contained in this paragraph (m)(iii) shall prevent
the Company or any Restricted Subsidiary from restricting the sale or other
disposition of property or assets of the Company or any of its Subsidiaries that
secure Indebtedness of the Company or any of its Subsidiaries.
(iv) Limitation on Transactions with Shareholders and
Affiliates. (A) The Company shall not, and shall not permit any Subsidiary of
the Company to, directly or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any holder
(or any Affiliate of such holder) of 5% or more of any class of Capital Stock of
the Company (other than the Bank Agent or any of its Affiliates) or any
Subsidiary of the Company or with any Affiliate of the Company or any Subsidiary
of the Company, except upon fair and reasonable terms no less favorable to the
Company or such Subsidiary of the Company than could be obtained in a comparable
arm's-length transaction with a Person that is not such a holder or an
Affiliate.
(B) The foregoing limitation does not limit, and shall not
apply to: (1) any transaction between the Company and any Subsidiary of the
Company or between Subsidiaries of the Company; (2) transactions (A) for which
the Company or any Subsidiary of the Company delivers to the Transfer Agent a
written opinion of a nationally recognized investment banking firm stating that
the transaction is fair to the Company or such Subsidiary of the Company from a
financial point of view or (B) approved by a majority of the disinterested
members of the Board of Directors; (3) the payment of fees pursuant to the
Management Agreements or pursuant to any similar management contracts entered
into by the Company or any Subsidiary of the Company; (4) the payment of
reasonable and customary regular fees to directors of the Company or any
Subsidiary of the Company who are not employees of the Company or such
Subsidiary of the Company; (5) any payments or other transactions pursuant to
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any tax-sharing agreement between the Company and Silgan or any other Person
with which the Company is required or permitted to file a consolidated tax
return or with which the Company is or could be part of a consolidated group for
tax purposes; (6) any Restricted Payments not prohibited by paragraph (m)(ii);
(7) the payment of fees to Morgan Stanley, S&H or their respective Affiliates
for financial, advisory, consulting or investment banking services that the
Board of Directors deems to be advisable or appropriate for the Company or any
Subsidiary of the Company to obtain (including the payment to Morgan Stanley of
any underwriting discounts or commissions or placement agency fees) in
connection with the issuance and sale of any securities by the Company or any
Subsidiary of the Company; or (8) any transaction contemplated by any of the
Stock Based Plans.
(C) Notwithstanding any of the foregoing, nothing in this
paragraph (m)(iv) shall prohibit the occurrence of (1) a Company Merger, (2) the
sale of all or substantially all of the property and assets of Silgan or its
successors to the Company and the assumption by the Company of all or
substantially all of the liabilities of Silgan or its successors, or (3) the
issuance by Silgan or its successors of preferred stock in exchange for or in
replacement of the Redeemable Preferred Stock having the same rights and
privileges as the Redeemable Preferred Stock. Immediately upon the occurrence of
an event specified in clause (1), (2) or (3) of the preceding sentence, all
references to the Company in this paragraph (m)(iv) shall refer to the Successor
Corporation.
(v) Limitation on the Issuance of Capital Stock of
Restricted Subsidiaries. (A) The Company shall not permit any Restricted
Subsidiary to, directly or indirectly, issue or sell any shares of its Capital
Stock (including options, warrants or other rights to purchase shares of such
Capital Stock), except (1) to the Company or another Restricted Subsidiary that
is a Wholly Owned Subsidiary of the Company, (2) pursuant to options on such
Capital Stock granted to officers and directors of such Restricted Subsidiary,
(3) if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary or (4)
in connection with an initial public offering of the Common Stock of such
Restricted Subsidiary; provided that, within 12 months after the date the Net
Cash Proceeds of an initial public offering are received by such Restricted
Subsidiary, such Restricted Subsidiary shall (I) apply an amount equal to such
Net Cash Proceeds to repay Indebtedness or Senior Securities of the Company or
Indebtedness of a Restricted Subsidiary, in each case owing to a Person other
than the Company or any of its Subsidiaries, (II) apply an amount equal to such
Net Cash Proceeds to the repurchase of Indebtedness or Senior Securities
pursuant to mandatory repurchase or repayment provisions applicable to such
Indebtedness or Senior Securities or (III) invest an equal amount, or the amount
not so applied pursuant to clause (I) or (II) of this paragraph (m)(v)(A) (or
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enter into a definitive agreement committing to so invest within 12 months of
the date of such agreement), in property or assets that (as determined in good
faith by the Board of Directors, whose determination shall be conclusive and
evidenced by a Board Resolution) are of a nature or type or are used in a
business (or in a company having property and assets of a nature or type, or
engaged in a business) similar or related to the nature or type of the property
and assets of, or the business of, any Restricted Subsidiary and its
Subsidiaries existing on the date thereof.
(B) Notwithstanding any of the foregoing, nothing in paragraph
(m)(v) hereof shall prohibit the occurrence of (1) a Company Merger, (2) the
sale of all or substantially all of the property and assets of Silgan or its
successors to the Company, and the assumption by the Company of all or
substantially all of the liabilities of Silgan or its successors, or (3) the
issuance by Silgan or its successors of preferred stock having the same rights
and privileges as the Redeemable Preferred Stock in exchange or replacement for
the Redeemable Preferred Stock. Immediately upon the occurrence of an event
specified in clause (1), (2) or (3) of the preceding sentence, all references to
the Company in this paragraph (m)(v) shall refer to the Successor Corporation.
(vi) Limitation on Asset Sales. (A) In the event and to the
extent that the Net Cash Proceeds received by the Company or any Restricted
Subsidiary from one or more Asset Sales occurring on or after the Preferred
Stock Issuance Date in any period of 12 consecutive months (other than Asset
Sales by the Company or any Restricted Subsidiary to the Company or another
Restricted Subsidiary) exceed 15% of Consolidated Net Tangible Assets in any one
fiscal year (determined as of the date closest to the commencement of such
12-month period for which a consolidated balance sheet of the Company and its
Subsidiaries has been prepared), then the Company shall, or shall cause such
Restricted Subsidiary to, (1) within 12 months after the date the Net Cash
Proceeds so received exceed 15% of Consolidated Net Tangible Assets in any one
fiscal year (determined as of the date closest to the commencement of such
12-month period for which a consolidated balance sheet of the Company and its
Subsidiaries has been prepared), (I) apply an amount equal to such excess Net
Cash Proceeds to repay Indebtedness or Senior Securities of the Company or
Indebtedness of a Restricted Subsidiary, in each case owing to a Person other
than the Company or any of its Subsidiaries or (II) invest an equal amount, or
the amount not so applied pursuant to clause (I) of this subparagraph (m)(vi)(A)
(or enter into a definitive agreement committing to so invest within 12 months
of the date of such agreement), in property or assets that (as determined in
good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution) are of a nature or type or are used in a
business (or in a company having property and assets of a nature or type, or
engaged in a business) similar or related to the nature or type of the property
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and assets of, or the business of, the Company and its Subsidiaries existing on
the date thereof and (2) apply such excess Net Cash Proceeds (to the extent not
applied pursuant to clause (1) of this subparagraph (m)(vi)(A)) as provided in
the following subparagraphs of this paragraph (m)(vi). The amount of such excess
Net Cash Proceeds required to be applied (or to be committed to be applied)
during such 12-month period as set forth in clause (I) or (II) of the preceding
sentence of this subparagraph (m)(vi)(A) and not applied as so required by the
end of such period shall constitute "Excess Proceeds."
(B) If, as of the first day of any calendar month, the
aggregate amount of Excess Proceeds not theretofore subject to an Excess
Proceeds Offer (as defined below) totals at least $10 million, the Company must,
not later than the 15th Business Day of such month, make an offer (each, an
"Excess Proceeds Offer") to purchase from the Holders on a pro rata basis an
aggregate liquidation value of shares of Redeemable Preferred Stock equal to the
Excess Proceeds on such date, at a redemption price equal to 101% of the
liquidation preference thereof, plus accrued and unpaid dividends to the date of
redemption (the "Excess Proceeds Payment"); provided, however, that no Excess
Proceeds Offer shall be required to be commenced with respect to the Redeemable
Preferred Stock until the Business Day following the dates that payments are
made pursuant to similar offers that are made to holders of Indebtedness and
need not be commenced if the Excess Proceeds remaining after application to
Indebtedness purchased in the offers made to the holders of Indebtedness are
less than $10 million; provided further, however, that no Redeemable Preferred
Stock may be purchased under this subparagraph (m)(vi)(B) unless the Company
shall have purchased all Indebtedness tendered pursuant to the offers applicable
thereto and shall have obtained the consent required under the Silgan Credit
Agreement to make such an Excess Proceeds Offer.
(C) The Company shall commence an Excess Proceeds Offer by
mailing a notice to the Transfer Agent and each Holder stating: (1) that the
Excess Proceeds Offer is being made pursuant to subparagraph (m)(vi)(B) hereof
and that all Redeemable Preferred Stock validly tendered will be accepted for
payment on a pro rata basis; (2) the redemption price and the date of redemption
or purchase (which shall be a Business Day no earlier than 30 days nor later
than 60 days from the date such notice is mailed) (the "Excess Proceeds Payment
Date"); (3) that any share of Redeemable Preferred Stock not tendered will
continue to accumulate and pay dividends pursuant to its terms; (4) that, unless
the Company defaults in the payment of the Excess Proceeds Payment, any share of
Redeemable Preferred Stock accepted for payment pursuant to the Excess Proceeds
Offer shall cease to accumulate dividends on and after the Excess Proceeds
Payment Date and all rights of the Holders of such Redeemable Preferred Stock
shall terminate on and after the Change of Control Date; (5) that Holders
electing to have any share of Redeemable Preferred Stock purchased pursuant to
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the Excess Proceeds Offer will be required to surrender such Redeemable
Preferred Stock, together with the form entitled "Option of the Holder to Elect
Purchase" on the reverse side of the share of Redeemable Preferred Stock
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day immediately preceding the Excess
Proceeds Payment Date; (6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the third Business Day immediately preceding the Excess Proceeds Payment Date, a
telegram, telex, facsimile transmission or letter, setting forth the name of
such Holder, the liquidation preference of the shares of Redeemable Preferred
Stock delivered for redemption and a statement that such Holder is withdrawing
his election to have such Redeemable Preferred Stock redeemed; and (7) that
Holders whose Redeemable Preferred Stock is being redeemed or being purchased
only in part will be issued new shares of Redeemable Preferred Stock equal in
liquidation preference to the unredeemed Redeemable Preferred Stock surrendered.
(D) On the Excess Proceeds Payment Date, the Company shall:
(1) accept for payment on a pro rata basis Redeemable Preferred Stock or
portions thereof tendered pursuant to the Excess Proceeds Offer; (2) deposit
with the Transfer Agent money sufficient to pay the redemption price of all
Redeemable Preferred Stock or portions thereof so accepted; and (3) deliver, or
cause to be delivered, to the Transfer Agent all Redeemable Preferred Stock or
portions thereof so accepted, together with an Officer's Certificate specifying
the shares of Redeemable Preferred Stock or portions thereof accepted for
payment by the Company. The Transfer Agent shall promptly mail to the Holders of
Redeemable Preferred Stock so accepted payment in an amount equal to the
redemption price, and the Trustee shall promptly authenticate and mail to such
Holders new shares of Redeemable Preferred Stock equal in liquidation preference
to any unredeemed portion of the Redeemable Preferred Stock surrendered. The
Company will publicly announce the results of the Excess Proceeds Offer as soon
as practicable after the Excess Proceeds Payment Date. For purposes of this
paragraph (m)(vi), the Transfer Agent shall act as the Paying Agent.
(E) The Company will comply with Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder, to the extent such
laws and regulations are applicable, in the event that such Excess Proceeds are
received by the Company under this paragraph (m)(vi) and the Company is required
to redeem Redeemable Preferred Stock as described above.
(F) Notwithstanding the foregoing, nothing in this paragraph
(m)(vi) shall prohibit the occurrence of (1) a Company Merger or (2) the sale of
all or substantially all of the property and assets of Silgan or its successors
to the Company and the assumption by the Company of all or substantially all of
the liabilities of Silgan or its successors. Immediately upon
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the occurrence of an event specified in clause (1) or (2) of the preceding
sentence, all references to the Company in this paragraph (m)(vi) shall refer to
the Successor Corporation.
(vii) Consolidation, Merger and Sale of Assets. The Company
shall not consolidate with, merge with or into, or sell, convey, transfer, lease
or otherwise dispose of all or substantially all of its property and assets (as
an entirety or substantially as an entirety in one transaction or a series of
related transactions) to, any Person (other than a Restricted Subsidiary that is
a Wholly Owned Subsidiary of the Company; provided that, in connection with any
merger of the Company with any Restricted Subsidiary that is a Wholly Owned
Subsidiary of the Company, no consideration (other than common stock in the
surviving Person or the Company) shall be issued or distributed to the
stockholders of the Company) or permit any Person to merge with or into the
Company, unless: (A) the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of the
Company shall be a corporation organized and validly existing under the laws of
the United States of America or any jurisdiction thereof and the Redeemable
Preferred Stock shall be converted or exchanged for and shall become shares of
such successor company having in respect of the successor company the same
rights and privileges that the Redeemable Preferred Stock had immediately prior
to such transaction; (B) immediately after giving effect to such transaction, no
Voting Rights Triggering Event, and no event that after the giving of notice or
lapse of time or both would become a Voting Rights Triggering Event, shall have
occurred and be continuing; (C) immediately after giving effect to such
transaction on a pro forma basis, the Interest Coverage Ratio of the Company (or
any Person becoming the successor issuer of the Redeemable Preferred Stock) is
at least 1:1; provided that, if the Interest Coverage Ratio of the Company
before giving effect to such transaction is within the range set forth in column
(A) below, then the Interest Coverage Ratio of the Company (or any Person
becoming the successor issuer of the Redeemable Preferred Stock) shall be at
least equal to the lesser of (I) the ratio determined by multiplying the
percentage set forth in column (B) below by the Interest Coverage Ratio of the
Company prior to such transaction and (II) the ratio set forth in column (C)
below:
(A) (B) (C)
1.11:1 to 1.99:1......... 90% 1.5:1
2.00:1 to 2.99:1......... 80% 2.1:1
3.00:1 to 3.99:1......... 70% 2.4:1
4.00:1 or more........... 60% 2.5:1
and provided further that, if the Interest Coverage Ratio of the Company (or any
Person becoming the successor issuer of the Redeemable Preferred Stock) is 3:1
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or more, the calculation in the preceding proviso shall be inapplicable and such
transaction shall be deemed to have complied with the requirements of this
clause (C) of this paragraph (m)(vii); (D) immediately after giving effect to
such transaction on a pro forma basis, the Company (or any Person that becomes
the successor issuer of the Redeemable Preferred Stock) shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
the Company immediately prior to such transaction; and (E) the Company delivers
to the Registrar an Officer's Certificate (attaching the arithmetic computations
to demonstrate compliance with clauses (C) and (D) of this paragraph (m)(vii))
and an Opinion of Counsel, in each case stating that such consolidation, merger
or transfer comply with this provision and that all conditions precedent
provided for herein relating to such transaction have been complied with;
provided, however, that clause (D) of this paragraph (m)(vii) does not apply to,
and the Interest Coverage Ratio required by clause (C) of this paragraph
(m)(vii) (1) shall be 1.75:1 with respect to, (I) a Company Merger, (II) the
sale of all or substantially all of the property and assets of Silgan or its
successors to the Company, and the assumption by the Company of all or
substantially all of the liabilities of Silgan or its successors or (III) the
issuance by Silgan or its successors of preferred stock complying with clause
(A) of this paragraph (m)(vii) and (2) does not apply if, in the good faith
determination of the Board of Directors, whose determination shall be evidenced
by a Board Resolution, the principal purpose of such transaction is to change
the state of incorporation of the Company; and provided further, however, that
any such transaction shall not have as one of its purposes the evasion of the
limitations of this paragraph (m)(vii).
(viii) Reports. So long as any shares of Redeemable Preferred Stock
are outstanding, the Company shall file with the SEC and send to the Holders of
the Redeemable Preferred Stock the annual reports, quarterly reports and the
information, documents and other reports required to be filed by the Company
with the SEC pursuant to Section 13 or 15 of the Exchange Act, whether or not
the Company has or is required to have a class of securities registered under
the Exchange Act, at the time it is or would be required to file the same with
the SEC and, within 15 days after the Company is or would be required to file
such reports, information or documents with the SEC.
(n) Definitions. As used in this Certificate of Designation,
the following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of any Person and its consolidated Subsidiaries
for such period determined in conformity with GAAP; provided that the following
items shall be excluded in computing Adjusted Consolidated Net Income (without
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duplication): (i) the net income (or loss) of such Person (other than a
Subsidiary of such Person) in which any other Person (other than such Person or
any of its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to such Person or any
of its Subsidiaries by such other Person during such period; (ii) solely for the
purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (III) of subparagraph (m)(ii)(A) hereof (and, in such case,
except to the extent includible pursuant to clause (i) above), the net income
(or loss) of such Person accrued prior to the date it becomes a Subsidiary of
any other Person or is merged into or consolidated with such other Person or any
of its Subsidiaries or all or substantially all of the property and assets of
such Person are acquired by such other Person or any of its Subsidiaries; (iii)
the net income (or loss) of any Subsidiary of any Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
of such net income is not at the time permitted by the operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Subsidiary; (iv) any gains or
losses (on an after-tax basis) attributable to Asset Sales; (v) any amounts paid
or accrued as dividends on preferred stock of such Person or preferred stock of
any Subsidiary of such Person; and (vi) all extraordinary gains and
extraordinary losses; provided that, solely for the purposes of calculating the
Interest Coverage Ratio (and in such case, except to the extent includible
pursuant to clause (i) above), "Adjusted Consolidated Net Income" of the Company
shall include the amount of all cash dividends received by the Company or any
Subsidiary of the Company from an Unrestricted Subsidiary.
"Affiliate" is defined to mean, as applied to any Person, any
other Person directly or indirectly controlling, controlled by or under direct
or indirect common control with such Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as applied to
any Person, is defined to mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, neither the Bank Agent nor any Bank
nor any affiliate of any of them shall be deemed to be an Affiliate of the
Company or any Subsidiary of the Company.
"Asset Acquisition" means (i) an investment by the Company or
any of its Subsidiaries in any other Person pursuant to which such Person shall
become a Subsidiary of the Company or any of its Subsidiaries or shall be merged
into or consolidated with the Company or any of its Subsidiaries or (ii) an
acquisition by the Company or any of its Subsidiaries of the property and assets
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of any Person other than the Company or any of its Subsidiaries that constitute
substantially all of an operating unit or business of such Person.
"Asset Disposition" means the sale or other disposition by the
Company or any of its Subsidiaries (other than to the Company or another
Subsidiary of the Company) of (i) all or substantially all of the Capital Stock
of any Subsidiary of the Company or (ii) all or substantially all of the
property and assets that constitute an operating unit or business of the Company
or any of its Subsidiaries.
"Asset Sale" means, with respect to any Person, any sale,
transfer or other disposition (including by way of merger, consolidation or
sale-leaseback transaction) in one transaction or a series of related
transactions by such Person or any of its Subsidiaries to any Person other than
the Company or any of its Subsidiaries of (i) all or any of the Capital Stock of
any Subsidiary of such Person, (ii) all or substantially all of the property and
assets of an operating unit or business of such Person or any of its
Subsidiaries or (iii) any other property and assets of such Person or any of its
Subsidiaries outside the ordinary course of business of such Person or such
Subsidiary and, in each case, that is not governed by paragraph (m)(vi) hereof;
provided that sales or other dispositions of inventory, receivables and other
current assets shall not be included within the meaning of such term.
"Average Life" means, at any date of determination with
respect to any debt security, the quotient obtained by dividing (i) the sum of
the product of (a) the number of years from such date of determination to the
dates of each successive scheduled principal payment of such debt security and
(b) the amount of such principal payment by (ii) the sum of all such principal
payments.
"Bank Agent" means Bankers Trust Company, as co-arranger and
administrative agent for the Banks pursuant to the Silgan Credit Agreement, and
any successor or successors thereto.
"Banks" means the lenders which are from time to time parties
to the Silgan Credit Agreement.
"Board Resolution" means, with respect to any person, a copy
of a resolution, certified by the Secretary or Assistant Secretary of such
person to have been duly adopted by the Board of Directors of such person and to
be in full force and effect on the date of such certification.
"Business Day" means any day except a Saturday or Sunday or
other day on which commercial banks in The City of New York or in the city of
the Corporate Trust Office of the Trustee are required or authorized by law or
other governmental action to be closed.
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"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or nonvoting) of capital stock of such Person, including, without
limitation, all Common Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in conformity
with GAAP, is required to be capitalized on the balance sheet of such Person;
and "Capitalized Lease Obligation" means the rental obligations, as aforesaid,
under such lease.
"Change of Control" means such time as (i) (a) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
other than MSLEF II, Mr. Horrigan, Mr. Silver and their respective Affiliates,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 40% of the total voting power of the then outstanding Voting Stock
of the Company and (b) MSLEF II, Mr. Horrigan, Mr. Silver and their respective
Affiliates beneficially own, directly or indirectly, less than 25% of the total
voting power of the then outstanding Voting Stock of the Company; (ii)
individuals who at the beginning of any period of two consecutive calendar years
constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
members of the Board of Directors then still in office who either were members
of the Board of Directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the Board of Directors then in office;
or (iii) the Company shall not beneficially own, directly or indirectly, at
least a majority of the issued and outstanding Voting Stock of Silgan other than
as a result of the Company Merger.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations and other equivalents (however designated,
whether voting or nonvoting) of common stock of such Person, including, without
limitation, all series and classes of such common stock.
"Company Merger" means the merger or consolidation of the
Company and Silgan or either of their successors.
"Consolidated EBITDA" means, with respect to any Person for
any period, the sum of the amounts for such period of (i) Adjusted Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) income taxes (other than
income taxes (either positive or negative) attributable to extraordinary and
nonrecurring gains or losses or sales of assets), (iv) depreciation expense, (v)
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amortization expense and (vi) all other noncash items reducing Adjusted
Consolidated Net Income, less all noncash items increasing Adjusted Consolidated
Net Income, all as determined on a consolidated basis for such Person and its
Subsidiaries in conformity with GAAP; provided that, if a Person has any
Subsidiary that is not a Wholly Owned Subsidiary of such Person, Consolidated
EBITDA of such Person shall be reduced by an amount equal to (a) the Adjusted
Consolidated Net Income of such Subsidiary multiplied by (b) the quotient of (1)
the number of shares of outstanding Common Stock of such Subsidiary not owned on
the last day of such period by such Person or any Subsidiary of such Person
divided by (2) the total number of shares of outstanding Common Stock of such
Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, with respect to any
Person for any period, the aggregate amount of interest in respect of
Indebtedness (including amortization of original issue discount on any
Indebtedness and the interest portion of any deferred payment obligation,
calculated in accordance with the interest method of accounting; all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing; and the net costs associated with
Interest Rate Agreements) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or accrued by such Person during such period; excluding, however, (i) any amount
of such interest of any Subsidiary of such Person if the net income (or loss) of
such Subsidiary is excluded in the calculation of Adjusted Consolidated Net
Income for such Person pursuant to clause (iii) of the definition thereof (but
only in the same proportion as the net income (or loss) of such Subsidiary is
excluded from the calculation of Adjusted Consolidated Net Income for such
Person pursuant to clause (iii) of the definition thereof), (ii) any premiums,
fees and expenses (and any amortization thereof) payable in connection with the
Refinancing and (iii) amortization of any other deferred financing costs, all as
determined on a consolidated basis in conformity with GAAP. For purposes of this
Certificate of Designation, Consolidated Interest Expense shall include all
amounts paid or accrued as dividends on Preferred Stock of any Person or any
Subsidiary of such Person.
"Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Subsidiaries (less applicable depreciation,
amortization and other valuation reserves), except to the extent resulting from
write-ups of capital assets (excluding write-ups in connection with accounting
for acquisitions in conformity with GAAP), after deducting therefrom (i) all
current liabilities of the Company and its consolidated Subsidiaries (excluding
intercompany items) and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recently available consolidated balance sheet of the Company
and its consolidated Subsidiaries prepared in conformity with GAAP.
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"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available consolidated
balance sheet of the Company and its consolidated Subsidiaries (which shall be
as of a date not more than 60 days prior to the date of such computation), less
any amounts attributable to Redeemable Stock or any equity security convertible
into or exchangeable for Indebtedness, the cost of treasury stock and the
principal amount of any promissory notes receivable from the sale of Capital
Stock of the Company or any of its Subsidiaries, each item to be determined in
conformity with GAAP (excluding the effects of foreign currency exchange
adjustments under Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 52).
"Containers" means Silgan Containers Corporation, a
Delaware corporation.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company or any of its Subsidiaries against fluctuations in currency
values to or under which the Company or any of its Subsidiaries is a party or a
beneficiary on the date of the Exchange Indenture or to which the Company or any
of its Subsidiaries becomes a party or a beneficiary thereafter.
"Discount Debentures" means the 13 1/4% Senior Discount
Debentures due 2002 of the Company.
"Dividend Payment Date" means January 15, April 15, July 15
and October 15 of each year.
"Dividend Period" means the Initial Dividend Period
and, thereafter, each Quarterly Dividend Period.
"Exchange Preferred Stock" means any issue of preferred stock
of the Company with terms identical to the Redeemable Preferred Stock issued by
the Company in connection with a registered offer to exchange the Redeemable
Preferred Stock.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Preferred Stock Issuance Date
applied on a basis consistent with the principles, methods, procedures and
practices employed in the preparation of the Company's audited financial
statements, including, without limitation, those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession. All ratios and
computations based on GAAP contained in this Certificate of Designation shall be
computed in conformity with GAAP, except that calculations made for purposes of
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determining compliance with the provisions hereof shall be made without giving
effect to (i) the amortization of any expenses incurred in connection with the
Refinancing, and (ii) except as otherwise provided, the amortization of any
amounts required or permitted by Accounting Principles Board Opinion Nos. 16 and
17.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay or advance or supply funds for the purchase or
payment of such Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to keep well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term "Guarantee" shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Holder" means a holder of shares of Redeemable
Preferred Stock.
"Incur" means, with respect to any Indebtedness, to incur,
create, issue, assume, Guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of, contingently or otherwise, such
Indebtedness; provided that neither the accrual of interest (whether such
interest is payable in cash or kind) nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date
of determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services, except Trade Payables, (v) all obligations of such Person as
lessee under Capitalized Leases, (vi) all Indebtedness of other Persons secured
by a Lien on any asset of such Person, whether or not such Indebtedness is
assumed by such Person; provided that the amount of such Indebtedness shall be
the lesser of (a) the fair market value of such asset at such date of
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determination and (b) the amount of such Indebtedness, (vii) all Indebtedness of
other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person, (viii) all obligations of such Person in respect of
borrowed money under the Silgan Credit Agreement, the Silgan Notes, the Discount
Debentures and any Guarantees thereof and (ix) to the extent not otherwise
included in this definition, all obligations of such Person under Currency
Agreements and Interest Rate Agreements. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations at such date; provided that the amount outstanding at any time of
any Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with GAAP
and, in clarification of this definition, any unused commitment under the Silgan
Credit Agreement or any other agreement relating to Indebtedness shall not be
treated as outstanding.
"Initial Dividend Period" means the dividend period commencing
on the Preferred Stock Issuance Date and ending on the day before the first
Dividend Payment Date to occur thereafter.
"Interest Coverage Ratio" means, with respect to any Person on
any Transaction Date, the ratio of (i) the aggregate amount of Consolidated
EBITDA of such Person for the four fiscal quarters for which financial
information in respect thereof is available immediately prior to such
Transaction Date to (ii) the aggregate Consolidated Interest Expense of such
Person during such four fiscal quarters. In making the foregoing calculation,
(a) pro forma effect shall be given to (1) any Indebtedness Incurred subsequent
to the end of the four-fiscal-quarter period referred to in clause (i) and prior
to the Transaction Date (other than Indebtedness incurred under a revolving
credit or similar arrangement) to the extent of the commitment thereunder (or
under any predecessor revolving credit or similar arrangement on the last day of
such period), (2) any Indebtedness Incurred during such period to the extent
such Indebtedness is outstanding at the Transaction Date and (3) any
Indebtedness to be Incurred on the Transaction Date, in each case as if such
Indebtedness had been incurred on the first day of such four-fiscal-quarter
period and after giving effect to the application of the proceeds thereof; (b)
Consolidated Interest Expense attributable to interest on any Indebtedness
(whether existing or being Incurred) computed on a pro forma basis and bearing a
floating interest rate shall be computed as if the rate in effect on the date of
computation (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12 months) had been the applicable rate for the entire period; (c) there shall
be excluded from Consolidated Interest Expense any Consolidated Interest Expense
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related to any amount of Indebtedness that was outstanding during such
four-fiscal-quarter period or thereafter but which is not outstanding or which
is to be repaid on the Transaction Date, except for Consolidated Interest
Expense accrued (as adjusted pursuant to clause (b)) during such
four-fiscal-quarter period under a revolving credit or similar arrangement to
the extent of the commitment thereunder (or under any successor revolving credit
or similar arrangement) on the Transaction Date; (d) pro forma effect shall be
given to Asset Dispositions and Asset Acquisitions that occur during such
four-fiscal-quarter period or thereafter and prior to the Transaction Date
(including any Asset Acquisition to be made with the Indebtedness Incurred
pursuant to clause (i) above) as if they had occurred on the first day of such
four-fiscal-quarter period; (e) with respect to any such four-fiscal-quarter
period commencing prior to the Refinancing, the Refinancing shall be deemed to
have taken place on the first day of such period; and (f) pro forma effect shall
be given to asset dispositions and asset acquisitions that have been made by any
Person that has become a Subsidiary of the Company or has been merged with or
into the Company or any Subsidiary of the Company during the four-fiscal-quarter
period referred to above or subsequent to such period and prior to the
Transaction Date and that would have been Asset Dispositions or Asset
Acquisitions had such transactions occurred when such Person was a Subsidiary of
the Company as if such asset dispositions or asset acquisitions were Asset
Dispositions or Asset Acquisitions that occurred on the first day of such
period.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement or
arrangement designed to protect the Company or any of its Subsidiaries against
fluctuations in interest rates to or under which the Company or any of its
Subsidiaries is a party or a beneficiary or becomes a Party or a beneficiary
thereafter.
"Investment" means any direct or indirect advance, loan (other
than advances to customers in the ordinary course of business that are recorded
as accounts receivable on the balance sheet of any Person or its Subsidiaries)
or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others) or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued by,
any other Person. For purposes of the definition of "Unrestricted Subsidiary"
and paragraph (m)(ii) hereof, (i) "Investment" shall include the fair market
value of the net assets of any Subsidiary of the Company at the time that such
Subsidiary of the Company is designated an Unrestricted Subsidiary and shall
exclude the fair market value of the net assets of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Subsidiary of the
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Company and (ii) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such transfer, in each
case as determined by the Board of Directors in good faith.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof, any sale with recourse against the seller or any Affiliate of the
seller, or any agreement to give any security interest).
"Morgan Stanley" means Morgan Stanley & Co.
Incorporated or its affiliates.
"MSLEF II" means The Morgan Stanley Leveraged Equity
Fund II, L.P.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Subsidiary of the Company) and
proceeds from the conversion of other property received when converted to cash
or cash equivalents, net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale, (ii) provisions for all taxes (whether or not such taxes
will actually be paid or are payable) as a result of such Asset Sale computed
without regard to the consolidated results of operations of the Company and its
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (a) is
secured by a Lien on the property or assets sold or (b) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Subsidiary of the Company as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP.
"Organization Agreement" means the Amended and Restated
Organization Agreement, dated as of December 21, 1993, among the Company and the
other parties thereto.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
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"Plastics" means Silgan Plastics Corporation, a
Delaware corporation.
"preferred stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of preferred or preference stock of such Person,
including, without limitation, the Preferred Stock.
"Preferred Stock Issuance Date" means the date on which 50,000
shares of Redeemable Preferred Stock are originally issued by the Company under
this Certificate of Designation.
"Preferred Stock Exchange Offer" means each registered
offer to exchange the Redeemable Preferred Stock for Exchange
Preferred Stock.
"Quarterly Dividend Period" means the quarterly dividend
period commencing on each January 15, April 15, July 15 and October 15 and
ending on the day before the following Dividend Payment Date.
"Redeemable Stock" means any class or series of Capital Stock
of any Person that by its terms or otherwise is (i) required to be redeemed
prior to the Stated Maturity of the Exchange Debentures or the mandatory
redemption date of the Preferred Stock, as the case may be, (ii) redeemable at
the option of the holder of such class or series of Capital Stock at any time
prior to the Stated Maturity of the Exchange Debentures or the mandatory
redemption date of the Preferred Stock, as the case may be, or (iii) convertible
into or exchangeable for Capital Stock referred to in clause (i) or (ii) above
or Indebtedness having a scheduled maturity prior to the Stated Maturity of the
Exchange Debentures or the mandatory redemption date of the Preferred Stock, as
the case may be; provided that any Capital Stock that would not constitute
Redeemable Stock but for provisions thereof giving holders thereof the right to
require the Company to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or a "change of control" occurring prior to the
Stated Maturity of the Exchange Debentures or the mandatory redemption date of
the Preferred Stock, as the case may be, shall not constitute Redeemable Stock
if the "change of control" or "asset sale" provision applicable to such Capital
Stock is no more favorable to the holders of such Capital Stock than the
provisions contained in paragraphs (h) and (m)(vi) hereof and such Capital Stock
specifically provides that the Company will not repurchase or redeem any such
Capital Stock pursuant to such provisions prior to the Company' repurchase of
Exchange Debentures or Preferred Stock required to be repurchased by the Company
under paragraphs (h) and (m)(vi).
"Redemption Date", with respect to any shares of Redeemable
Preferred Stock, means the date on which such shares of Redeemable Preferred
Stock are redeemed by the Company.
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"Restricted Subsidiary" means any Subsidiary of the
Company other than an Unrestricted Subsidiary.
"S&H" means S&H, Inc., a Connecticut corporation wholly
owned by R. Philip Silver and D. Greg Horrigan.
"Senior Indebtedness" is defined to mean the following
obligations of the Company or a Successor Corporation: (i) all Indebtedness and
other monetary obligations of the Company or a Successor Corporation under (or
in respect of) the Silgan Credit Agreement, the Discount Debentures and, in the
event of a Company Merger or similar transaction, the Silgan Notes (including
any agreement pursuant to which the Silgan Notes or the Discount Debentures were
issued), any Interest Rate Agreement or any Currency Agreement, (ii) all other
Indebtedness of Holdings or a Successor Corporation (other than Indebtedness
evidenced by the Exchange Debentures), including principal and interest on such
Indebtedness, unless such Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such Indebtedness is issued, is pari
passu with, or subordinated in right of payment to, the Exchange Debentures and
(iii) all fees, expenses and indemnities payable in connection with the Silgan
Credit Agreement, the Silgan Notes (including any agreement pursuant to which
the Silgan Notes are issued) and, if applicable, Currency Agreements and
Interest Rate Agreements; provided that the term "Senior Indebtedness" shall not
include (a) any Indebtedness of the Company or a Successor Corporation that,
when Incurred and without respect to any election under Section 1111(b) of the
United States Bankruptcy Code, was without recourse to the Company or a
Successor Corporation, (b) any Indebtedness of the Company or a Successor
Corporation to a Subsidiary of the Company or a Successor Corporation or to a
joint venture in which the Company or a Successor Corporation has an interest,
(c) any Indebtedness of the Company or a Successor Corporation (other than such
Indebtedness already described in clause (i) above) of the type described in
clause (ii) above and not permitted by paragraph (m)(i), (d) any repurchase,
redemption or other obligation in respect of Redeemable Stock, (e) any
Indebtedness to any employee or officer of the Company or a Successor
Corporation or any of its Subsidiaries, (f) any liability for federal, state,
local or other taxes owed or owing by the Company or a Successor Corporation or
(g) any Trade Payables. "Senior Indebtedness" will also include interest
accruing subsequent to events of bankruptcy of Holdings or a Successor
Corporation and its Subsidiaries at the rate provided for in the document
governing such Indebtedness, whether or not such interest is an allowed claim
enforceable against the debtor in a bankruptcy case under federal bankruptcy
law.
"Shareholder Subordinated Notes" shall have the same meaning
given such term in the Silgan Credit Agreement (including the exhibits thereto)
as in effect on the Preferred Stock Issuance Date.
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"Significant Subsidiary" means, at any date of determination,
any Subsidiary of the Company that, together with its Subsidiaries, (i) for the
most recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company or (ii) as of the end of such fiscal year,
was the owner of more than 10% of the consolidated assets of the Company, all as
set forth on the most recently available consolidated financial statements of
the Company and its consolidated Subsidiaries for such fiscal year prepared in
conformity with GAAP.
"Silgan" means Silgan Corporation, a Delaware
corporation.
"Silgan Notes" means the 11 3/4% Senior Subordinated Notes
due 2002 of Silgan.
"Silgan Credit Agreement" means the Credit Agreement, dated as
of August 1, 1995, as amended, among Silgan, Containers, Plastics, the Banks
party thereto and the Bank Agent and Bank of America Illinois, as co-arranger
and as documentation agent, together with the related documents thereof
(including without limitation any Guarantees and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented, replaced or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing or otherwise
restructuring (including, but not limited to, the inclusion of additional
borrowers thereunder that are Subsidiaries of Silgan whose obligations are
Guaranteed by Silgan thereunder and who are included as additional borrowers
thereunder) all or any portion of the Indebtedness under such agreement or any
successor agreement.
"Silgan Indebtedness" means any of the following Indebtedness
of Silgan and/or any of its Subsidiaries: (i) Indebtedness outstanding at any
time in an aggregate principal amount not to exceed the sum of (a) the aggregate
outstanding Indebtedness and unutilized commitments on the Preferred Stock
Issuance Date under the Silgan Credit Agreement plus (b) an aggregate amount not
to exceed $200 million outstanding at any time; (ii) Indebtedness issued in
exchange for or the net proceeds of which are used directly or indirectly to
refinance, redeem or repurchase all (but not less than all) of the outstanding
Preferred Stock or Exchange Debentures; (iii) $150 million outstanding at any
time of Capitalized Lease Obligations; (iv) Indebtedness in respect of letters
of credit (other than letters of credit issued pursuant to the Silgan Credit
Agreement) in an aggregate amount not to exceed $30 million outstanding at any
time; (v) Indebtedness in an aggregate amount not to exceed $50 million
outstanding at any time; provided that such Indebtedness (a) by its terms or by
the terms of any agreement or instrument pursuant to which such Indebtedness is
issued, is expressly made subordinate in right of payment to the Exchange
Debentures at least to the extent that the Exchange Debentures
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are subordinated to Senior Indebtedness, (b) does permit or require payments of
interest in cash prior to July 15, 2000, (c) does not mature prior to July 15,
2006, (d) the Average Life of such Indebtedness (determined as of the date of
Incurrence of such Indebtedness) is greater than the remaining Average Life of
the Redeemable Preferred Stock or Exchange Debentures, as the case may be, and
(e) by its terms or by the terms of any agreement or instrument pursuant to
which such Indebtedness is issued, provides that no payments of principal of
such Indebtedness by way of sinking fund, mandatory redemption or otherwise
(including defeasance) may be made by Silgan (including, without limitation, at
the option of the holder thereof other than an option given to a holder pursuant
to a "change of control" or "asset sale" provision that is no more favorable to
the holders of such Indebtedness than the provisions contained in the paragraphs
(h) and (m)(vi) and such Indebtedness specifically provides that Silgan will not
repurchase or redeem such Indebtedness pursuant to such provisions prior to
Silgan's repurchase of the Redeemable Preferred Stock or Exchange Debentures
required to be repurchased by Silgan under paragraphs (h) and (m)(vi)) at any
time prior to July 15, 2006; and (vi) any Indebtedness of Silgan or any of its
Subsidiaries that is permitted to be Incurred under the Silgan Note Indenture as
in effect on the date hereof (other than under clauses (i), (ix) and (x) of the
second paragraph of part (a) of Section 4.03 of the Silgan Note Indenture (which
clauses are similar to clauses (i), (iv) and (v) above other than the dollar
amounts)).
"Silgan Note Indenture" means the indenture, dated as of June
29, 1992, between Silgan and Shawmut Bank, N.A., as trustee, relating to the
Silgan Notes, as it may be amended or supplemented from time to time by one or
more indentures supplemental thereto entered into pursuant to the applicable
provisions thereof.
"Stated Maturity" means, with respect to any debt security or
any installment of interest thereon, the date specified in such debt security as
the fixed date on which any principal of such debt security or any such
installment of interest is due and payable.
"Stock Based Plan" means any stock option plan, stock
appreciation rights plan or other similar plan or agreement of the Company or
any Subsidiary of the Company relating to Capital Stock of the Company or any
Subsidiary of the Company established and in effect from time to time,
including, without limitation, the Company's Organization Agreement or any stock
option plan, stock appreciation rights plan or other similar plan or agreement
for the benefit of employees of the Company and its Subsidiaries.
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
outstanding Voting Stock is owned, directly or indirectly, by the Company or by
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one or more other Subsidiaries of the Company, or by such Person and one or more
other Subsidiaries of such Person; provided that, except as the term
"Subsidiary" is used in the definition of "Unrestricted Subsidiary" described
below, an Unrestricted Subsidiary shall not be deemed to be a Subsidiary of the
Company.
"Successor Corporation" is defined to mean (i) the surviving
entity of any Company Merger, (ii) Silgan, upon the assumption by Silgan of the
liabilities of the Company represented by the Exchange Debentures or (iii) any
successor corporation to Silgan that becomes the successor obligor on the
Exchange Debentures, whether by merger, consolidation, sale of assets,
assumption of liabilities or otherwise.
"Trade Payables" means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation to trade
creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.
"Transaction Date" means, with respect to the Incurrence of
any Indebtedness or the issuance of Redeemable Stock by the Company or any of
its Subsidiaries, the date such Indebtedness is to be Incurred or such
Redeemable Stock is to be issued and, with respect to any Restricted Payment,
the date such Restricted Payment is to be made.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, the Company or any other Subsidiary of the Company that is not a Subsidiary
of the Subsidiary to be so designated; provided that either (a) the Subsidiary
to be so designated has total assets of $1,000 or less or (b) if such Subsidiary
has assets greater than $1,000, such designation would be permitted under
paragraph (m)(ii) hereof. The Board of Directors may designate any Unrestricted
Subsidiary to be a Subsidiary of the Company; provided that immediately after
giving effect to such designation (1) the Company could Incur $1.00 of
additional Indebtedness under subparagraph (m)(i)(A) hereof and (2) no Event of
Default, or event or condition that through the giving of notice or the lapse of
time or both would become an Event of Default, shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing promptly with the Trustee a copy of the Board Resolution
giving effect to such designation and an Officer's Certificate certifying that
such designation complied with the foregoing provisions.
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"Voting Stock" means, with respect to any Person, Capital
Stock of any class or kind ordinarily having the power to vote for the election
of directors of such Person.
"Wholly Owned Subsidiary" means (i) with respect to Silgan and
the Company, Plastics and Containers, and (ii) with respect to any Person, any
Subsidiary of such Person if all of the Common Stock or other similar equity
ownership interests (but not including Preferred Stock) in such Subsidiary
(other than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) is owned directly or indirectly by such Person.
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IN WITNESS WHEREOF, Silgan Holdings Inc. has caused
this Certificate to be executed in its corporate name by Harley
Rankin, Jr., its Executive Vice President and Chief Financial
Officer and attested by Sharon E. Budds, its Assistant Secretary,
this 18th day of July, 1996.
SILGAN HOLDINGS INC.
By: /s/ Harley Rankin, Jr.
--------------------------
Harley Rankin, Jr.
Executive Vice President and
Chief Financial Officer
Attest:
By: /s/ Sharon E. Budds
---------------------
Sharon E. Budds
Assistant Secretary
[corporate seal]
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Exhibit 4
NUMBER SHARES
Cusip No. 827048208 See Reverse for
Certain Definitions
COUNTERSIGNED AND REGISTERED
FLEET NATIONAL BANK, AS TRANSFER AGENT
BY ___________________________________
AUTHORIZED OFFICER
INCORPORATED UNDER THE LAWS OF
THE STATE OF DELAWARE
SILGAN HOLDINGS INC.
(see legend on reverse side)
This Certifies that [SPECIMEN] is the owner of
__________________
_____________________________________________________________________ fully paid
and non-assessable Shares of Exchangeable Preferred Stock, par value $.01 per
share, of the above named Corporation transferable only on the books of the
Corporation by the holder hereof in person or by duly authorized Attorney upon
surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate
to be signed by its duly authorized officers and its Corporate Seal to be
hereunto affixed this _______________ day of______________________ A.D. 19___.
____________________ ____________________
<PAGE>
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT - ............. Custodian ....................
(Cust) (Minor)
under Uniform Gifts to Minors Act ...................
(State)
Additional abbreviations may also be used though not in the above list
For value received ________ hereby sell, assign and transfer unto
________________________________________________________________________________
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE)
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING
POSTAL ZIP CODE OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint ____________________________________ Attorney to transfer
the said Shares on the books of the within named Corporation with full power of
substitution in the premises.
Dated_________________________, 19____
In presence of
__________________________________________
______________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERNATIVE
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THIS PREFERRED STOCK HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS PREFERRED STOCK IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO
<PAGE>
UNDER RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE
TRANSFER OF THIS PREFERRED STOCK, RESELL OR OTHERWISE TRANSFER THIS PREFERRED
STOCK EXCEPT (A) TO SILGAN HOLDINGS INC. OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRANSFER AGENT A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS PREFERRED STOCK (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRANSFER AGENT) OR (F) AFTER REGISTRATION UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS PREFERRED STOCK IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS PREFERRED STOCK WITHIN THE TIME PERIOD REFERRED TO
ABOVE, THE HOLDER MUST EXECUTE A LETTER (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRANSFER AGENT) RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRANSFER AGENT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE CERTIFICATE OF
DESIGNATION CONTAINS A PROVISION REQUIRING THE TRANSFER AGENT TO REFUSE TO
REGISTER ANY TRANSFER OF THIS PREFERRED STOCK IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
UNLESS THIS PREFERRED STOCK IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO SILGAN HOLDINGS INC. OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED STOCK ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
CERTIFICATE OF INCORPORATION OF SILGAN HOLDINGS INC.
<PAGE>
Exhibit 5
REGISTRATION RIGHTS AGREEMENT
Dated July 22, 1996
between
SILGAN HOLDINGS INC.
and
MORGAN STANLEY & CO. INCORPORATED
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into July 22, 1996, between SILGAN HOLDINGS INC., a Delaware
corporation (the "Company"), and MORGAN STANLEY & CO. INCORPORATED (the
"Placement Agent").
This Agreement is made pursuant to the Placement Agreement
dated July 17, 1996, between the Company and the Placement Agent (the "Placement
Agreement"), which provides for the sale by the Company to the Placement Agent
of 50,000 shares of the Company's 13 1/4% Exchangeable Preferred Stock, which
will be mandatorily redeemable 2006 (the "Shares"), as set forth in the
Certificate of Designation relating to the Shares (the "Certificate of
Designation"), and will be exchangeable, at the option of the Company, in whole
but not in part, into Subordinated Debentures due 2006 (the "Exchange
Debentures") to be issued, if applicable, pursuant to an Indenture to be dated
as of the date of such exchange (the "Exchange Indenture"). In order to induce
the Placement Agent to enter into the Placement Agreement, the Company has
agreed to provide to the Placement Agent and its direct and indirect transferees
the registration rights with respect to the Shares and the PIK Shares (as
defined herein) set forth in this Agreement. The execution of this Agreement is
a condition to the closing under the Placement Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended
from time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Certificate of Designation" shall have the meaning set
forth in the preamble.
"Closing Date" shall mean the Closing Date as defined
in the Placement Agreement.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"Exchange Debentures" shall have the meaning set forth
in the preamble.
<PAGE>
"Exchange Indenture" shall have the meaning set forth
in the preamble.
"Exchange Offer" shall mean the exchange offer by the
Company of Exchange Shares for Registrable Shares pursuant
to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the 1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
"Exchange Shares" shall mean securities issued by the Company
containing terms identical to the Shares and the PIK Shares (except
that such Exchange Shares shall bear no legend and shall be free from
restrictions on transfers), to be offered to Holders of Shares and PIK
Shares in exchange for Shares and PIK Shares pursuant to the Exchange
Offer.
"Holder" shall mean the Placement Agent, for so long as it
owns any Registrable Shares, and each of its successors, assigns and
direct and indirect transferees who become registered owners of
Registrable Shares under the Certificate of Designation; provided that
for purposes of Sections 4 and 5 of this Agreement, the term "Holder"
shall include Participating Broker-Dealers (as defined in Section
4(a)).
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation preference of outstanding Registrable Shares;
provided that whenever the consent or approval of Holders of a
specified percentage of Registrable Shares is required hereunder,
Registrable Shares held by the Company or any of its affiliates (as
such term is defined in Rule 405 under the 1933 Act) (other than the
Placement Agent or subsequent holders of Registrable Shares if such
subsequent holders are deemed to be such affiliates solely by reason of
their holding of such Registrable Shares) shall not be counted in
determining whether such consent or approval was given by the Holders
of such required percentage or amount.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"PIK Shares" shall mean any shares of the Company's 13 1/4%
Exchangeable Preferred Stock which is mandatorily redeemable 2006
issued as payment in kind dividends to any holder of shares of the
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<PAGE>
Company's 13 1/4% Exchangeable Preferred Stock which is mandatorily
redeemable 2006.
"Placement Agent" shall have the meaning set forth in
the preamble.
"Placement Agreement" shall have the meaning set forth
in the preamble.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Shares covered by a
Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, and in each case including all material
incorporated by reference therein.
"Registrable Shares" shall mean the Shares and the PIK Shares;
provided, however, that the Shares and the PIK Shares shall cease to be
Registrable Shares (i) when a Registration Statement with respect to
such Shares and such PIK Shares shall have been declared effective
under the 1933 Act and such Shares and such PIK Shares shall have been
disposed of pursuant to such Registration Statement, (ii) when such
Shares and such PIK Shares have been sold to the public pursuant to
Rule 144(k) (or any similar provision then in force, but not Rule 144A)
under the 1933 Act or (iii) when such Shares and such PIK Shares shall
have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable
fees and disbursements of counsel for any Underwriters or Holders in
connection with blue sky qualification of any of the Exchange Shares or
Registrable Shares), (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and
other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, if any, (v) the fees and
disbursements of counsel for the Company and, in the case of a Shelf
Registration Statement, the fees and disbursements of one counsel for
the Holders (which counsel shall be selected by the Majority Holders
and which counsel may also be counsel for the Placement Agent) and (vi)
the fees and disbursements of the independent public accountants of
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<PAGE>
the Company, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and
compliance, but excluding fees and expenses of counsel to the
Underwriters (other than fees and expenses set forth in clause (ii)
above) or the Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of
Registrable Shares by a Holder.
"Registration Statement" shall mean any registration statement
of the Company that covers any of the Exchange Shares or Registrable
Shares pursuant to the provisions of this Agreement and all amendments
and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SEC" shall mean the Securities and Exchange
Commission.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the Registrable
Shares on an appropriate form under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference
therein.
"Transfer Agent" shall mean Fleet National Bank.
"Trustee" shall mean the trustee with respect to the Exchange
Debentures under the Exchange Indenture.
"Underwriters" shall have the meaning set forth in
Section 3 hereof.
"Underwritten Registration" or "Underwritten Offering" shall
mean a registered offering in which Registrable Shares are sold to an
Underwriter for reoffering to the public.
-4-
<PAGE>
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any applicable law or
applicable interpretation of the Staff of the SEC, the Company shall cause to be
filed an Exchange Offer Registration Statement covering the offer by the Company
to the Holders to exchange all of the Registrable Shares for Exchange Shares and
to use its best efforts to have such Registration Statement declared effective
by the SEC and remain effective until the closing of the Exchange Offer and to
consummate the Exchange Offer on or prior to December 22, 1996. The Company
shall commence the Exchange Offer promptly after the Exchange Offer Registration
Statement has been declared effective by the SEC and use its best efforts to
have the Exchange Offer consummated on or prior to December 22, 1996. The
Company shall commence the Exchange Offer by mailing the related exchange offer
Prospectus and accompanying documents to each Holder stating, in addition to
such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Agreement and that all Registrable Shares validly tendered will be
accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a
period of at least 30 days from the date such notice is mailed) (the
"Exchange Dates");
(iii) that any Registrable Shares not tendered will remain
outstanding and shall accumulate dividends at the initial rate borne by
the Registrable Shares and, other than Registrable Shares referred to
in Section 2(b)(iii) below, will not retain any rights under this
Agreement;
(iv) that Holders electing to have Registrable Shares
exchanged pursuant to the Exchange Offer will be required to surrender
such Registrable Shares, together with the enclosed letters of
transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) specified in the notice
prior to the close of business on the last Exchange Date; and
(v) that Holders will be entitled to withdraw its election,
not later than the close of business on the last Exchange Date, by
sending to the institution and at the address (located in the Borough
of Manhattan, The City of New York) specified in the notice a telegram,
telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Shares delivered for
exchange and a statement that such Holder is withdrawing his election
to have such Registrable Shares exchanged.
-5-
<PAGE>
As soon as practicable after the last Exchange Date, the
Company shall:
(i) accept for exchange Registrable Shares or portions
thereof tendered and not validly withdrawn pursuant to the Exchange
Offer; and
(ii) deliver, or cause to be delivered, to the Transfer Agent
for cancellation all Registrable Shares or portions thereof so accepted
for exchange by the Company and issue, and cause the Transfer Agent
promptly to countersign and register, and mail to each Holder, an
Exchange Share with an aggregate liquidation preference equal to the
aggregate liquidation preference of the Registrable Shares surrendered
by such Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the Staff of the SEC. The Company shall inform the
Placement Agent of the names and addresses of the Holders to whom the Exchange
Offer is made, and the Placement Agent shall have the right, subject to
applicable law, to contact such Holders and otherwise facilitate the tender of
Registrable Shares in the Exchange Offer.
(b) In the event that (i) the Company determines that the
Exchange Offer Registration provided for in Section 2(a) above is not available
or may not be consummated as soon as practicable after the last Exchange Date
because it would violate applicable law or the applicable interpretations of the
Staff of the SEC, (ii) the Exchange Offer is not for any other reason
consummated on or prior to December 22, 1996 or (iii) in the opinion of counsel
for the Placement Agent a Registration Statement must be filed and a Prospectus
must be delivered by the Placement Agent in connection with any offering or sale
of Registrable Shares, the Company shall use its best efforts to cause to be
filed as soon as practicable after such determination, date or notice of such
opinion of counsel is given to the Company, a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Shares and to
have such Shelf Registration Statement declared effective by the SEC. In the
event the Company is required to file a Shelf Registration Statement solely as a
result of the matters referred to in clause (iii) of the preceding sentence, the
Company shall file and have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all Registrable
Shares and a Shelf Registration Statement (which may be a combined Registration
Statement with the Exchange Offer Registration Statement) with respect to offers
-6-
<PAGE>
and sales of Registrable Shares held by the Placement Agent after completion of
the Exchange Offer. The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective for the period referred to in Rule
144(k) or until all of the Registrable Shares covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement. The
Company further agrees to supplement or amend the Shelf Registration Statement
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the 1933 Act or by any other rules and regulations thereunder for shelf
registration or if reasonably requested by a Holder with respect to information
relating to such Holder, and to use its best efforts to cause any such amendment
to become effective and such Shelf Registration Statement to become usable as
soon as practicable thereafter. The Company agrees to furnish to the Holders of
Registrable Shares copies of any such supplement or amendment promptly after its
being used or filed with the SEC.
(c) The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or Section 2(b). Each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable Shares
pursuant to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of Registrable Shares pursuant to a Shelf Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have become effective during the
period of such interference until the offering of Registrable Shares pursuant to
such Registration Statement may legally resume. As provided for in the
Certificate of Designation, in the event the Exchange Offer is not consummated
and, if a Shelf Registration Statement is required hereby, the Shelf
Registration Statement is not declared effective, on or prior to December 22,
1996, the dividend rate on the Shares and the PIK Shares will increase 0.5% per
annum to 13 3/4% per annum of the liquidation preference thereof from January 1,
1997, payable in additional Shares quarterly in arrears on each December 15,
March 15, June 15 and September 15, commencing April 15, 1997 until such
Exchange Offer is consummated or such Shelf Registration Statement is declared
effective; provided that if a Shelf Registration Statement is required solely as
a result of the matters referred to in clause (iii) of the first sentence of
Section 2(b), such increase in dividends shall be payable only to the Placement
Agent, with respect to Shares held by it, and only with respect to any period
(after December 22, 1996) during which such Shelf Registration Statement is not
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<PAGE>
effective; provided further that if, after any such dividend rate increase, the
Exchange Offer is consummated or the Shelf Registration Statement is declared
effective, the dividend rate on the Exchange Shares and/or the Shares, as the
case may be, and the PIK Shares will reduce to the original dividend rate on the
date of such consummation or declaration of effectiveness.
(e) Without limiting the remedies available to the Placement
Agent and the Holders, the Company acknowledges that any failure by the Company
to comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Placement Agent or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Placement Agent or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Section 2(a)
and Section 2(b) hereof.
3. Registration Procedures.
In connection with the obligations of the Company with respect
to the Registration Statements pursuant to Sections 2(a) and Section 2(b)
hereof, the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on
the appropriate form under the 1933 Act, which form (x) shall be
selected by the Company and (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Shares by
the selling Holders thereof and (z) shall comply as to form in all
material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith, and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
applicable period and cause each Prospectus to be supplemented by any
required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the 1933 Act; to keep each Prospectus
current during the period described under Section 4(3) and Rule 174
under the 1933 Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Shares or Exchange Shares;
(c) in the case of a Shelf Registration, furnish to each
Holder of Registrable Shares, to counsel for the Placement Agent, to
counsel for the Holders and to each Underwriter of an Underwritten
-8-
<PAGE>
Offering of Registrable Shares, if any, without charge, as many copies
of each Prospectus, including each preliminary Prospectus, and any
amendment or supplement thereto and such other documents as such Holder
or Underwriter may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Shares; and the
Company consents to the use of such Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the
selling Holders of Registrable Shares and any such Underwriters in
connection with the offering and sale of the Registrable Shares covered
by and in the manner described in such Prospectus or any amendment or
supplement thereto in accordance with applicable law;
(d) use its best efforts to register or qualify, by the time
the applicable Registration Statement is declared effective by the SEC,
the Registrable Shares under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder of Registrable Shares
covered by a Registration Statement shall reasonably request in
writing, to cooperate with such Holder in connection with any filings
required to be made with the National Association of Securities
Dealers, Inc. and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable Shares
owned by such Holder; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required
to qualify but for this Section 3(d), (ii) file any general consent to
service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Shares, counsel for the Holders and counsel for the
Placement Agent promptly and, if requested by any such Holder or
counsel, confirm such advice in writing (i) when a Registration
Statement has become effective and when any post-effective amendment
thereto has been filed and becomes effective, (ii) of any request by
the SEC or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Shares covered
thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
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<PAGE>
agreement, if any, relating to the offering cease to be true and
correct in all material respects or if the Company receives any
notification with respect to the suspension of the qualification of the
Registrable Shares for sale in any jurisdiction or the initiation of
any proceeding for such purpose, (v) of the happening of any event
during the period a Shelf Registration Statement is effective which
makes any statement made in such Shelf Registration Statement or the
related Prospectus untrue in any material respect or which requires the
making of any changes in such Shelf Registration Statement or
Prospectus in order to make the statements therein not misleading and
(vi) of any determination by the Company that a post-effective
amendment to a Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment and provide immediate notice to each
Holder of the withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Shares, without charge, at least one conformed
copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Shares to facilitate the timely
preparation and delivery of certificates representing Registrable
Shares to be sold and not bearing any restrictive legends and enable
such Registrable Shares to be in such denominations (consistent with
the provisions of the Certificate of Designation) and registered in
such names as the selling Holders may reasonably request at least two
business days prior to the closing of any sale of Registrable Shares;
(i) in the case of a Shelf Registration, upon the occurrence
of any event contemplated by Section 3(e)(v) hereof, use its best
efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Shares, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Company agrees to notify the Holders to
suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and the Holders hereby agree to suspend
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<PAGE>
use of the Prospectus until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission;
(j) within a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a Registration
Statement or amendment or supplement to a Prospectus or any document
which is to be incorporated by reference into a Registration Statement
or a Prospectus after initial filing of a Registration Statement,
provide copies of such document to the Placement Agent and its counsel
(and, in the case of a Shelf Registration Statement, the Holders and
its counsel) and make such representatives of the Company as shall be
reasonably requested by the Placement Agent or its counsel (and, in the
case of a Shelf Registration Statement, the Holders or its counsel)
available for discussion of such document, and shall not at any time
file or make any amendment to the Registration Statement, any
Prospectus or any amendment of or supplement to a Registration
Statement or a Prospectus or any document which is to be incorporated
by reference into a Registration Statement or a Prospectus, of which
the Placement Agent and its counsel (and, in the case of a Shelf
Registration Statement, the Holders and its counsel) shall not have
previously been advised and furnished a copy or to which the Placement
Agent or its counsel (and, in the case of a Shelf Registration
Statement, the Holders or its counsel) shall reasonably object, except
for any amendment or supplement or document (a copy of which has been
previously furnished to the Placement Agent and its counsel (and, in
the case of a Shelf Registration Statement, the Holders and its
counsel)) which counsel to the Company shall advise the Company, in the
form of a written legal opinion, is required in order to comply with
applicable law; the Placement Agent agrees that, if it receives timely
notice and drafts under this clause (j), it will not take actions or
make objections pursuant to this clause (j) such that the Company is
unable to comply with its obligations under Section 2(a);
(k) obtain a CUSIP number and, if applicable, a CINS number,
for all Exchange Shares or Registrable Shares, as the case may be, not
later than the first effective date of a Registration Statement;
(l) cause the Exchange Indenture to be qualified under the
Trust Indenture Act of 1939, as amended (the "TIA"), in connection with
the registration of the Exchange Shares or Registrable Shares, as the
case may be, cooperate with the Trustee and the Holders to effect such
changes to the Exchange Indenture as may be required for the Exchange
Indenture to be so qualified in accordance with the terms of the TIA
and execute, and use its best efforts to cause the Trustee to execute,
all documents as may be required to effect such changes and all other
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forms and documents required to be filed with the SEC to enable the
Exchange Indenture to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for
inspection by a representative of the Holders of the Registrable
Shares, any Underwriter participating in any disposition pursuant to
such Shelf Registration Statement, and attorneys and accountants
designated by the Holders, at reasonable times and in a reasonable
manner, all financial and other records, pertinent documents and
properties of the Company, and cause the officers, directors and
employees of the Company to supply all information reasonably requested
by any such representative, Underwriter, attorney or accountant in
connection with a Shelf Registration Statement;
(n) in the case of a Shelf Registration, use its best efforts
to cause all Registrable Shares to be listed on any securities exchange
or any automated quotation system on which similar securities issued by
the Company are then listed if requested by the Majority Holders, to
the extent such Registrable Shares satisfy applicable listing
requirements;
(o) use its best efforts to cause the Exchange Shares or
Registrable Shares, as the case may be, to be rated by two nationally
recognized statistical rating organizations (as such term is defined in
Rule 436(g)(2) under the 1933 Act);
(p) if reasonably requested by any Holder of Registrable
Shares covered by a Registration Statement, (i) promptly incorporate in
a Prospectus supplement or post-effective amendment such information
with respect to such Holder as such Holder reasonably requests to be
included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Company has
received notification of the matters to be incorporated in such filing;
and
(q) in the case of a Shelf Registration, enter into such
customary agreements and take all such other actions in connection
therewith (including those requested by the Holders of a majority of
the Registrable Shares being sold) in order to expedite or facilitate
the disposition of such Registrable Shares including, but not limited
to, an Underwritten Offering and in such connection, (i) to the extent
possible, make such representations and warranties to the Holders and
any Underwriters of such Registrable Shares with respect to the
business of the Company and its subsidiaries, the Registration
Statement, Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in
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underwritten offerings and confirm the same if and when requested, (ii)
obtain opinions of counsel to the Company (which counsel and opinions,
in form, scope and substance, shall be reasonably satisfactory to the
Holders and such Underwriters and its counsel) addressed to each
selling Holder and Underwriter of Registrable Shares, covering the
matters customarily covered in opinions requested in underwritten
offerings, (iii) obtain "cold comfort" letters from the independent
certified public accountants of the Company (and, if applicable, any
other certified public accountant of any business acquired by the
Company for which financial statements and financial data are or are
required to be included in the Registration Statement) addressed to
each selling Holder and Underwriter of Registrable Shares, such letters
to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten
offerings, and (iv) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority in principal amount
of the Registrable Shares being sold or the Underwriters, and which are
customarily delivered in underwritten offerings, to evidence the
continued validity of the representations and warranties of the Company
made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company may
require each Holder of Registrable Shares to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Shares as the Company may from time to time reasonably request
in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 3(e)(v) hereof, such Holder will
forthwith discontinue disposition of Registrable Shares pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at its
expense) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Shares
current at the time of receipt of such notice. If the Company shall give any
such notice to suspend the disposition of Registrable Shares pursuant to a
Registration Statement, the Company shall extend the period during which the
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
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received copies of the supplemented or amended Prospectus necessary to resume
such dispositions.
The Holders of Registrable Shares covered by a Shelf
Registration Statement who desire to do so may sell such Registrable Shares in
an Underwritten Offering. In any such Underwritten Offering, the investment
banker or investment bankers and manager or managers (the "Underwriters") that
will administer the offering will be selected by the Majority Holders of the
Registrable Shares included in such offering.
4. Participation of Broker-Dealers in Exchange Offer.
(a) The Staff of the SEC has taken the position that any
broker-dealer that receives Exchange Shares for its own account in the Exchange
Offer in exchange for Shares or PIK Shares that were acquired by such
broker-dealer as a result of market-making or other trading activities (a
"Participating Broker-Dealer"), may be deemed to be an "underwriter" within the
meaning of the 1933 Act and must deliver a prospectus meeting the requirements
of the 1933 Act in connection with any resale of such Exchange Shares.
The Company understands that it is the Staff's position that
if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and
the means by which Participating Broker-Dealers may resell the Exchange Shares,
without naming the Participating Broker-Dealers or specifying the amount of
Exchange Shares owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the 1933
Act in connection with resales of Exchange Shares for their own accounts, so
long as the Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other
provisions of this Agreement, the Company agrees that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an Exchange
Offer Registration to the extent, and with such reasonable modifications thereto
as may be, reasonably requested by the Placement Agent or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Shares by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:
(i) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement,
as would otherwise be contemplated by Section 3(i) of this Agreement,
for a period exceeding 60 days after the last Exchange Date (as such
period may be extended pursuant to the penultimate paragraph of Section
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3 of this Agreement) and Participating Broker-Dealers shall not be
authorized by the Company to deliver and shall not deliver such
Prospectus after such period in connection with the resales
contemplated by this Section 4; and
(ii) the application of the Shelf Registration procedures set
forth in Section 3 of this Agreement to an Exchange Offer Registration,
to the extent not required by the positions of the Staff of the SEC or
the 1933 Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to the Company by the Placement
Agent or with the reasonable request in writing to the Company by one
or more broker-dealers who certify to the Placement Agent and the
Company in writing that they anticipate that they will be Participating
Broker-Dealers; and provided further that, in connection with such
application of the Shelf Registration procedures set forth in Section 3
of this Agreement to an Exchange Offer Registration, the Company shall
be obligated (x) to deal only with one entity representing the
Participating Broker-Dealers, which shall be the Placement Agent
unless it elects not to act as such representative, (y) to pay the fees
and expenses of only one counsel representing the Participating
Broker-Dealers, which shall be counsel to the Placement Agent unless
such counsel elects not to so act and (z) to cause to be delivered only
one, if any, "cold comfort" letter with respect to the Prospectus in
the form existing on the last Exchange Date and with respect to each
subsequent amendment or supplement, if any, effected during the period
specified in clause (i) above.
(c) The Placement Agent shall have no liability to the Company
or any Holder with respect to any request that it may make pursuant to Section
4(b) above.
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Placement Agent, each Holder and each Person, if any, who controls the Placement
Agent or any Holder within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act, or is under common control with, or is controlled
by, the Placement Agent or any Holder, from and against all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by the Placement Agent, any Holder or any such
controlling or affiliated Person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Exchange Shares or Registrable Shares were
registered under the 1933 Act, including all documents incorporated therein by
reference, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
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<PAGE>
therein not misleading, or caused by any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to the Placement Agent or any Holder furnished to the Company in
writing by the Placement Agent or any selling Holder expressly for use therein.
In connection with any Underwritten Offering permitted by Section 3 of this
Agreement, the Company will also indemnify the Underwriters, if any, selling
brokers, dealers and similar securities industry professionals participating in
the distribution, their officers and directors and each Person who controls such
Persons (within the meaning of the 1933 Act and the 1934 Act) to the same extent
as provided above with respect to the indemnification of the Holders, if
requested in connection with any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Placement Agent and the other
selling Holders, and each of their directors, officers who sign the Registration
Statement and each Person, if any, who controls the Company, the Placement Agent
and any other selling Holder within the meaning of either Section 15 of the 1933
Act or Section 20 of the 1934 Act, to the same extent as the foregoing indemnity
from the Company to the Placement Agent and the Holders, but only with reference
to information relating to such Holder furnished to the Company in writing by
such Holder expressly for use in any Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of 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
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both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Placement Agent and all Persons,
if any, who control the Placement Agent within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and expenses of more
than one separate firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each Person, if
any, who controls the Company within the meaning of either such Section and (c)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Holders and all Persons, if any, who control any Holders within
the meaning of either such Section, and that all such reasonable fees and
expenses shall be reimbursed as they are incurred. In such case involving the
Placement Agent and Persons who control the Placement Agent, such firm shall be
designated in writing by the Placement Agent. In such case involving the Holders
and such Persons who control Holders, such firm shall be designated in writing
by the Majority Holders. In all other cases, such firm shall be designated by
the Company. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party for such fees and expenses of counsel in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 4 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
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indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Holders shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holders' obligations to contribute pursuant to this
Section 5(d) are several in proportion to the principal amount of Registrable
Shares of such Holder that were registered pursuant to a Registration Statement.
(e) The Company and each Holder agree that it would not be
just or equitable if contribution pursuant to this Section 5 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, no Holder shall be required to contribute any
amount in excess of the amount by which the total price at which Registrable
Shares were sold by such Holder exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) Survival. The indemnity and contribution provisions
contained in this Section 5 shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of the Placement Agent, any Holder or any person controlling the
Placement Agent or any Holder, or by or on behalf of the Company, its officers
or directors or any Person controlling the Company, (iii) acceptance of any of
the Exchange Shares and (iv) any sale of Registrable Shares pursuant to a Shelf
Registration Statement.
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6. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered
into, and on or after the date of this Agreement will not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Shares in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of the
Company's other issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate liquidation preference of the outstanding
Registrable Shares affected by such amendment, modification, supplement, waiver
or consent; provided, however, that no amendment, modification, supplement,
waiver or consents to any departure from the provisions of Section 5 hereof
shall be effective as against any Holder of Registrable Shares unless consented
to in writing by such Holder.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Placement Agent,
the address set forth in the Placement Agreement; (ii) if to the Company,
initially at 4 Landmark Square, Stamford, Connecticut 06901, Attention: H.
Rankin, Jr., and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 6(c), with a copy to Winthrop
Stimson Putnam & Roberts, Financial Centre, 695 Main Street, Stamford,
Connecticut 06904-6760, Attention: Frank W. Hogan, III, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the person giving the same to the Transfer
Agent, at Fleet National Bank, RI/MO/0199, 111 Westminster Street, Providence,
RI 02903, Attention: Rosemarie Pavao.
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(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Shares in violation of the terms of the Placement Agreement. If any transferee
of any Holder shall acquire Registrable Shares, in any manner, whether by
operation of law or otherwise, such Registrable Shares shall be held subject to
all of the terms of this Agreement, and by taking and holding such Registrable
Shares such person shall be conclusively deemed to have agreed to be bound by
and to perform all of the terms and provisions of this Agreement and such person
shall be entitled to receive the benefits hereof. The Placement Agent (solely in
its capacity as Placement Agent) shall have no liability or obligation to the
Company with respect to any failure by a Holder to comply with, or any breach by
any Holder of, any of the obligations of such Holder under this Agreement.
(e) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Placement Agent, on the other hand, and each Holder shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(f) Counterparts. This Agreement may be executed manually or
by telecopier in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(h) Governing Law. The laws of the State of New York
applicable to contracts to be performed entirely in that state
shall govern this Agreement.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
SILGAN HOLDINGS INC.
By /s/ Harley Rankin, Jr.
----------------------------
Harley Rankin, Jr.
Executive Vice President
and Chief Financial Officer
Confirmed and accepted as of the date first above written:
MORGAN STANLEY & CO.
INCORPORATED
By /s/ Katina J. Dorton
--------------------
Katina J. Dorton
Vice President
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Exhibit 6
SILGAN HOLDINGS INC.
PLACEMENT AGREEMENT
July 17, 1996
Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036-8293
Dear Sirs:
Silgan Holdings Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Placement Agent") 50,000 shares of the
Company's Exchangeable Preferred Stock, par value $.01 per share, which will be
mandatorily redeemable on July 15, 2006 (the "Preferred Stock"), as set forth in
the Certificate of Designation of the Company relating to the Preferred Stock
(the "Certificate of Designation"), and will be exchangeable, at the option of
the Company, in whole but not in part, into Subordinated Debentures due 2006
(the "Exchange Debentures" and, together with the Preferred Stock and the
Additional Preferred Stock (as defined below), the "Securities") to be issued,
if applicable, pursuant to an Indenture to be dated as of the date of such
exchange (the "Exchange Indenture").
The Securities will be offered without being registered under
the Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom.
The Placement Agent and its direct and indirect transferees
will be entitled to the benefits of a Registration Rights Agreement, to be dated
the Closing Date (as defined below) and to be substantially in the form attached
hereto as Exhibit A.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum (the "Preliminary Memorandum") and
will prepare a final offering memorandum (the "Final Memorandum" and, with the
Preliminary Memorandum, each a "Memorandum") setting forth or including a
description of the terms of the Securities, the terms of the offering and a
description of the Company and its business. As used herein, the term
"Memorandum" shall include in each case the documents incorporated by reference
therein. The terms "supplement," "amendment" and "amend" as used herein shall
include all documents deemed to be incorporated by reference in the Preliminary
Memorandum or Final Memorandum that are filed subsequent to the date of such
Memorandum with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
<PAGE>
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, you that as of the date hereof:
(a) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in either Memorandum
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations thereunder and
(ii) the Preliminary Memorandum does not contain and the Final
Memorandum, in the form used by the Placement Agent to confirm sales
and on the Closing Date (as defined below), will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this Section 1(a) do not apply to
statements or omissions in either Memorandum based upon information
relating to the Placement Agent furnished to the Company in writing by
the Placement Agent through you expressly for use therein.
(b) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in each Memorandum and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(c) Each subsidiary of the Company set forth on Schedule I
hereto has been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in each Memorandum
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) This Agreement has been duly authorized, executed
and delivered by the Company.
(e) The Preferred Stock has been duly authorized by
the Company and, when executed and delivered to and paid for
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by the Placement Agent in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and will not be
subject to any preemptive or similar rights.
(f) The additional shares of Preferred Stock of the Company,
$.01 par value per share (the "Additional Preferred Stock"), that may
be issued in payment of dividends in respect of the Preferred Stock,
have been duly authorized and reserved by the Company and, when
executed and delivered in accordance with the terms of the Certificate
of Designation, will be validly issued, fully paid and non-assessable
and will not be subject to any preemptive or similar rights.
(g) The Exchange Debentures, when issued, will have
substantially the terms set forth in the Final Memorandum and will have
been duly authorized by the Company and, when executed, authenticated
and delivered upon exchange of all, but not less than all, of the then
outstanding Preferred Stock in accordance with the terms of the
Exchange Indenture and the Certificate of Designation, (x) will be
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration, if applicable, and the availability of equitable remedies
may be limited by equitable principles of general applicability and (y)
will be entitled to the benefits of the Exchange Indenture.
(h) The Certificate of Designation creating the Preferred
Stock and the Additional Preferred Stock, the proposed form of which
has been furnished to you, will have been duly filed with the Secretary
of State of the State of Delaware and with all other offices where such
filing is required, on or before the Closing Date.
(i) The Registration Rights Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable against the Company in
accordance with its terms except as (x) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws affecting the rights and remedies of
creditors, (y) remedies may be limited by general principles of equity,
whether applied by a court of law or equity and (z) any right to
indemnity and contribution may be limited by federal and state
securities laws and public policy considerations.
(j) Upon the issuance of the Exchange Debentures, the Exchange
Indenture will have substantially the terms set forth in the Final
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Memorandum and will have been authorized and, when executed and
delivered by the Company, will be a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
except as (x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(y) rights of acceleration, if applicable, and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Certificate of Designation, the Exchange Indenture (upon execution
and delivery thereof), the Registration Rights Agreement and the
Securities will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or any agreement
or other instrument (except that the Silgan Credit Agreement, the
Discount Debentures Indenture and the 11 3/4% Notes Indenture (each as
defined in the Final Memorandum) contain certain restrictions on the
payment of dividends as disclosed in the Final Memorandum) binding upon
the Company or any of its subsidiaries that is material to the Company
and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by the Company of its
obligations under this Agreement, the Certificate of Designation, the
Exchange Indenture (upon execution and delivery thereof), the
Registration Rights Agreement or the Securities, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities.
(l) There has not occurred any material adverse change, or any
development reasonably likely to result in a material adverse change,
in the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Preliminary Memorandum.
(m) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject, other than proceedings
accurately described in all material respects in each Memorandum and
proceedings that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, or on the power or
ability of the Company to perform its obligations under this Agreement,
the Certificate of Designation, the Exchange Indenture, the
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Registration Rights Agreement or the Securities or to consummate the
transactions contemplated by the Final Memorandum.
(n) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approval, orders, certificates and permits of
and from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its business
in the manner described in each Memorandum, except to the extent where
the failure to obtain or make a filing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(o) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") of the
Company has, to the knowledge of the Company, directly, or through any
agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities
Act) which is or will be integrated with the sale of the Securities in
a manner that would require the registration under the Securities Act
of the Securities or (ii) engaged in any form of general solicitation
or general advertising in connection with the offering of the
Securities (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(p) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), assuming Morgan Stanley Leveraged Equity Fund II, L.P. ("MSLEF")
is not an "investment company" and is not "controlled" by an
"investment company."
(q) It is not necessary in connection with the offer, sale and
delivery of the Preferred Stock to the Placement Agent in the manner
contemplated by this Agreement to register the Preferred Stock under
the Securities Act or to qualify the Exchange Indenture under the Trust
Indenture Act of 1939, as amended.
(r) Except as described in each Memorandum, the Company and
its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
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respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(s) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
material capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any
material permit, license or approval, any related constraints on
operating activities material to the Company and its subsidiaries,
taken as a whole, and any potential material liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly
or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(t) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(u) None of the Company, its Affiliates or any person acting
on its or their behalf (other than (i) the Placement Agent, (ii) MSLEF,
(iii) any entity which controls MSLEF, (iv) any entity under common
control with any such entity and (v) any subsidiary of any such entity
other than any subsidiary of MSLEF) has engaged in any directed selling
efforts (as that term is defined in Regulation S under the Securities
Act ("Regulation S")) with respect to the Preferred Stock and the
Company and its Affiliates and any person acting on its or their behalf
(other than the Placement Agent, (ii) MSLEF, (iii) any entity which
controls MSLEF, (iv) any entity under common control with any such
entity and (v) any subsidiary of any such entity other than any
subsidiary of MSLEF) has complied with the offering restrictions
requirement of Regulation S. To the knowledge of the Company, none of
(i) MSLEF, (ii) any entity which controls MSLEF, (iii) any entity under
common control with any such entity and (iv) any subsidiary of any such
entity other than any subsidiary of MSLEF (other than the Placement
Agent) has engaged in any directed selling efforts (as that term is
defined in Regulation S under the Securities Act ("Regulation S")) with
respect to the Preferred Stock and, to the knowledge of the Company,
(i) MSLEF, (ii) any entity which controls MSLEF, (iii) any entity under
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common control with any such entity and (iv) any subsidiary of any such
entity other than any subsidiary of MSLEF (other than the Placement
Agent) has complied with the offering restrictions requirement of
Regulation S.
(v) As of March 31, 1996 and on the date hereof, each of
827599 Ontario Inc., a Canadian corporation and an indirect
wholly-owned subsidiary of the Company ("Ontario Inc."), and Express
Plastics Containers Limited, a Canadian corporation and an indirect
wholly-owned subsidiary of the Company ("Express Plastics"), did not
own assets in an aggregate amount in excess of 1.5% of the consolidated
assets of the Company and its subsidiaries and for the three months
ended March 31, 1996, Ontario Inc. and Express Plastics did not have
revenues in an aggregate amount in excess of 1.5% of the consolidated
revenues of the Company and its subsidiaries for such period.
2. Offering. You have advised the Company that you will make
an offering of the Preferred Stock purchased by you hereunder on the terms set
forth in the Final Memorandum as soon as practicable after this Agreement is
entered into as in your judgment is advisable.
3. Purchase and Delivery. Upon the basis of the
representations, warranties and agreements herein contained, but subject to the
conditions hereinafter stated, the Company hereby agrees to sell to you and you
agree to purchase from the Company, the Preferred Stock at a purchase price of
$965.00 per share.
Payment for the Preferred Stock shall be made against delivery
of the Preferred Stock at a closing (the "Closing") to be held at the office of
Shearman & Sterling, 599 Lexington Avenue, New York, New York, at 10:00 A.M.,
local time, on July 22, 1996, or at such other time on the same or such other
date, not later than July 31, 1996, as shall be designated in writing by you
(the "Closing Date"). The time and date of such payment are herein referred to
as the Closing Date. Payment for the Preferred Stock shall be made by wire
transfer to accounts specified by the Company in writing.
Certificates for the Preferred Stock shall be in definitive
form and registered in such names and in such denominations as you shall request
in writing not less than two full business days prior to the Closing Date. The
certificates evidencing the Preferred Stock shall be delivered to you on the
Closing Date, with any transfer taxes payable in connection with the transfer of
the Preferred Stock to the Placement Agent duly paid, against payment of the
purchase price therefor.
4. Conditions to Closing. The several obligations of the
Placement Agent under this Agreement to purchase the Preferred Stock will be
subject to the following conditions:
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(a) Subsequent to the date of this Agreement and prior
to the Closing Date,
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
whole, from that set forth in the Preliminary Memorandum that,
in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Securities on
the terms and in the manner contemplated in the Final
Memorandum.
(b) Concurrently with the Closing, (i) the Company shall give
an irrevocable written notice to Mellon Bank, N.A., as trustee (the
"Class B Holder") for First Plaza Group Trust in accordance with
Section 6.2 of the Amended and Restated Organization Agreement, dated
as of December 21, 1993, as amended (the "Organization Agreement") and
(ii) the Company shall pay the Call Purchase Price (as defined in the
Organization Agreement) in accordance with Section 6.3 thereof to the
Class B Holder, whereupon all the shares of Class B Stock of the
Company, $.01 par value per share, held of record and beneficially by
the Class B Holder (the "Class B Stock") shall be purchased by the
Company and the Class B Stock shall no longer be outstanding.
(c) You shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in clause (a)(i) above and to the
effect that the representations and warranties of the Company contained
in this Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied pursuant to
this Agreement on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
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(d) You shall have received on the Closing Date an opinion of
Winthrop, Stimson, Putnam & Roberts, independent counsel for the
Company, dated the Closing Date, to the effect set forth in Exhibit B.
(e) You shall have received on the Closing Date opinions of
McKenna & Cuneo, independent counsel for the Company, dated the Closing
Date, to the effect set forth in Exhibits C-1 and C-2.
(f) You shall have received on the Closing Date an opinion of
Proskauer Rose Goetz & Mendelsohn LLP, independent counsel for the
Company, dated the Closing Date, to the effect set forth in Exhibit D.
(g) You shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Placement Agent, dated the Closing
Date, in form and substance satisfactory to you.
(h) You shall have received on each of the date hereof and the
Closing Date (i) a letter, dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, from
Ernst & Young LLP, the Company's independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Final Memorandum and (ii) a letter,
dated the date hereof or the Closing Date, as the case may be, in form
and substance satisfactory to you, from Price Waterhouse L.L.P.,
American National Can Company's independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Final Memorandum.
5. Covenants of the Company. In further consideration of the
agreements of the Placement Agent contained in this Agreement, the Company
covenants as follows:
(a) To furnish to you, without charge, during the period
mentioned in paragraph (c) below, as many copies of the Final
Memorandum, any documents incorporated by reference therein and any
supplements and amendments thereto as you may reasonably request and to
use its best efforts to deliver such copies to you by 5 P.M. (New York
time) on the business day next following the execution of this
Agreement.
(b) Before amending or supplementing either Memorandum, to
furnish to you a copy of each such proposed amendment or supplement and
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not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and prior to
the date on which all of the Preferred Stock shall have been sold by
the Placement Agent, any event shall occur or condition exist as a
result of which it is necessary in your judgment to amend or supplement
the Final Memorandum in order to make the statements therein, in the
light of the circumstances when such Memorandum is delivered to a
purchaser, not misleading, or if, with the opinion of counsel to the
Placement Agent it is necessary to amend or supplement such Memorandum
to comply with applicable law, forthwith to prepare and furnish, at its
own expense, to the Placement Agent, either amendments or supplements
to such Memorandum so that the statements in such Memorandum as so
amended or supplemented will not, in the light of the circumstances
when such Memorandum is delivered to a purchaser, be misleading or so
that such Memorandum, as so amended or supplemented, will comply with
applicable law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) Whether or not any sale of the Preferred Stock is
consummated, to pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation of
each Memorandum and all amendments and supplements thereto, (ii) the
preparation, issuance and delivery of the Securities, (iii) the fees
and disbursements of the Company's counsel and accountants, the
transfer agent for the Preferred Stock and the trustee under the
Exchange Indenture, (iv) the qualification of such Securities under
securities or Blue Sky laws in accordance with the provisions of
Section 5(d), including filing fees and the fees and disbursements of
counsel for the Placement Agent in connection therewith and in
connection with the preparation of any Blue Sky or legal investment
memoranda, (v) the printing and delivery to the Placement Agent in
quantities as hereinabove stated of copies of each Memorandum and any
amendments or supplements thereto, (vi) any fees charged by rating
agencies for the rating of such Securities, (vii) all document
production charges and expenses of counsel to the Placement Agent (but
not including its fees for professional services) in connection with
the preparation of this Agreement, (viii) the fees and expenses, if
any, incurred in connection with the admission of such Securities for
trading in PORTAL or any other appropriate market system, (ix) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
Preferred Stock, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses
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of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and
lodging expense of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (x) all other costs and expenses
incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section.
(f) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which could be integrated
with the sale of the Preferred Stock in a manner which would require
the registration under the Securities Act of such Securities.
(g) Not to solicit any offer to buy or offer or sell the
Preferred Stock by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(h) While any of the Securities remain outstanding, to make
available, upon request, to any seller of such Securities the
information specified in Rule 144A(d)(4) under the Securities Act,
unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act.
(i) None of the Company, its Affiliates or any person acting
on its or their behalf (other than the Placement Agent) will engage in
any directed selling efforts (as that term is defined in Regulation S)
with respect to the Preferred Stock, and the Company and its Affiliates
and each person acting on its or their behalf (other than the Placement
Agent) will comply with the offering restrictions of Regulation S.
(j) To use its best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market; unless so requested by
you, the Company will not take any action to permit the Securities to
be designated PORTAL securities without your prior consent, which shall
not be unreasonably withheld.
6. Offering of Securities; Restrictions on Transfer.
(a) The Placement Agent represents and warrants that it is a
qualified institutional buyer as defined in Rule 144A under the Securities Act
(a "QIB"). The Placement Agent agrees with the Company that (i) it will not
solicit offers for, or offer or sell, such Preferred Stock by any form of
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general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act and (ii) it
will solicit offers for such Preferred Stock only from, and will offer such
Preferred Stock only to, persons that it reasonably believes to be (A) in the
case of offers inside the United States, (x) QIBs or (y) other institutional
accredited investors (as defined in Rule 501(a) (1), (2), (3) or (7) under the
Securities Act) ("institutional accredited investors") that, prior to their
purchase of the Preferred Stock, deliver to the Placement Agent a letter
containing the representations and agreements set forth in Appendix A to the
Memorandum and (B) in the case of offers outside the United States in compliance
with Regulation S under the Securities Act, to persons other than U.S. persons
("foreign purchasers," which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)) that, in each case, in
purchasing such Preferred Stock are deemed to have represented and agreed as
provided in the Final Memorandum under the caption "Transfer Restrictions."
(b) The Placement Agent represents, warrants, and agrees with
respect to offers and sales outside the United States that:
(i) it understands that no action has been or will
be taken in any jurisdiction by the Company that would permit a public
offering of the Preferred Stock, or possession or distribution of
either Memorandum or any other offering or publicity material relating
to the Preferred Stock, in any country or jurisdiction where action for
that purpose is required;
(ii) the Placement Agent will comply with all
applicable laws and regulations in each jurisdiction in which it
acquires, offers, sells or delivers Preferred Stock or has in its
possession or distributes either Memorandum or any such other material,
in all cases at its own expense;
(iii) the Preferred Stock have not been and will not
be registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Securities Act
or pursuant to an exemption from the registration requirements of the
Securities Act;
(iv) the Placement Agent has offered the Preferred
Stock and will offer and sell the Preferred Stock (A) as part of their
distribution at any time and (B) otherwise until 40 days after the
later of the commencement of the offering of the Preferred Stock and
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the Closing Date, only in accordance with Rule 903 of Regulation S or
another exemption from the registration requirements of the Securities
Act. Accordingly, neither the Placement Agent, its Affiliates nor any
persons acting on its or their behalf have engaged or will engage in
any directed selling efforts (within the meaning of Regulation S) with
respect to the Preferred Stock, and the Placement Agent, its Affiliates
and any such persons have complied and will comply with the offering
restrictions requirements of Regulation S;
(v) the Placement Agent has (A) not offered or sold
and will not offer or sell any Preferred Stock to persons in the United
Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer
to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 (the "Regulations"); (B) complied
and will comply with all applicable provisions of the Financial
Services Act 1986 and the Regulations with respect to anything done by
it in relation to the Preferred Stock in, from or otherwise involving
the United Kingdom; and (C) only issued or passed on and will only
issue or pass on to any person in the United Kingdom any document
received by it in connection with the issue of the Preferred Stock if
that person is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or is a person to whom such document may otherwise lawfully be issued
or passed on;
(vi) the Placement Agent understands that the
Preferred Stock have not been and will not be registered under the
Securities and Exchange Law of Japan, and represents that it has not
offered or sold, and agrees that it will not offer or sell, any
Preferred Stock, directly or indirectly in Japan or to any resident of
Japan except (A) pursuant to an exemption from the registration
requirements of the Securities and Exchange Law of Japan and (B) in
compliance with any other applicable requirements of Japanese law; and
(vii) the Placement Agent agrees that, at or prior to
confirmation of sales of the Preferred Stock, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases any Preferred Stock from it during
the restricted period a confirmation or notice to substantially the
following effect:
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"The Preferred Stock covered hereby have not been
registered under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered and
sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution
at any time or (ii) otherwise until 40 days after the
Closing Date, except in either case in accordance with
Regulation S (or Rule 144A) under the Securities Act. Terms
used above have the meaning given to them by Regulation S."
Terms used in this Section 6 have the meanings given to them by Regulation S.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Placement Agent, and each person, if any, who
controls such Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, the Placement Agent, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by the Placement Agent or any such
controlling of affiliated person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in either Memorandum (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to the Placement Agent furnished to the Company in writing by such
Placement Agent through you expressly for use therein.
(b) The Placement Agent agrees to indemnify and hold harmless
the Company, its directors, its officers and each person, if any, who controls,
or is under common control with or is controlled by the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company to the
Placement Agent, but only with reference to information relating to the
Placement Agent furnished to the Company in writing by the Placement Agent
through you expressly for use in either Memorandum or any amendments or
supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
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indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of 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 indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such reasonable fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Morgan Stanley & Co. Incorporated in the case of parties indemnified pursuant to
paragraph (a) above and by the Company in the case of parties indemnified
pursuant to paragraph (b) above. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
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indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Placement Agent, on
the other hand, from the offering of such Preferred Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Placement Agent on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Placement
Agent on the other hand in connection with the offering of such Preferred Stock
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Preferred Stock (before deducting expenses) received
by the Company and the total discounts and commissions received by the Placement
Agent in respect thereof bear to the aggregate offering price of such Preferred
Stock. The relative fault of the Company on the one hand and of the Placement
Agent on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Placement Agent and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company and the Placement Agent agree that it would
not be just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, the Placement Agent shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Preferred Stock resold by it in the initial placement of such Preferred
Stock were offered to investors exceeds the amount of any damages that the
Placement Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
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(f) The indemnity and contribution provisions contained in
this Section 7 and the representations and warranties of the Company contained
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Placement Agent or any person controlling the Placement Agent or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Preferred Stock. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
8. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event singly or
together with any other such event makes it, in your judgment, impracticable to
market the Preferred Stock on the terms and in the manner contemplated in the
Final Memorandum.
9. Miscellaneous. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
If this Agreement shall be terminated by the Placement Agent
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Placement Agent for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably
incurred by the Placement Agent in connection with this Agreement or the
offering contemplated hereunder.
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
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The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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Please confirm your agreement to the foregoing by signing in
the space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
SILGAN HOLDINGS INC.
By/s/ Harley Rankin, Jr.
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Agreed, July 17, 1996
Morgan Stanley & Co.
Incorporated
By/s/ Katina J. Dorton
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SCHEDULE I
Significant Subsidiaries
Silgan Corporation
Silgan Plastics Corporation
Silgan Containers Corporation
California - Washington Can Corporation
SCCW Can Corporation
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