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 29, 1997
SILGAN HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-22117 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.
Refinancing of Bank Credit Facility
On July 29, 1997, Silgan Holdings Inc., a Delaware
corporation ("Silgan"), and its wholly owned subsidiaries, Silgan Containers
Corporation ("Containers") and Silgan Plastics Corporation ("Plastics"),
completed the refinancing of approximately $600 million of existing bank
indebtedness by entering into a new $1.0 billion senior secured credit facility
(the "New Credit Agreement") with various lenders from time to time party to the
New Credit Agreement (the "Banks"), Bankers Trust Company ("Bankers Trust"), as
Administrative Agent and as a Co-Arranger, Bank of America National Trust &
Savings Association, as Syndication Agent and as a Co-Arranger, Goldman Sachs
Credit Partners L.P., as Co-Documentation Agent and as a Co-Arranger, and Morgan
Stanley Senior Funding, Inc., as Co-Documentation Agent and as a Co-Arranger.
All amounts owing under Silgan's previous credit agreement, dated as of August
1, 1995 (as amended, the "Previous Credit Agreement"), were repaid with proceeds
from loans made under the New Credit Agreement, and the Previous Credit
Agreement and the various security documents entered into in connection
therewith were terminated.
This refinancing represents another step in Silgan's
previously announced strategy to refinance higher cost indebtedness in order to
improve cash flow and increase its operating and financial flexibility. The New
Credit Agreement lowers interest rates, increases the amount of borrowings
available, extends maturities and provides more flexibility to make
acquisitions, pay dividends, repurchase stock and refinance existing
indebtedness.
Description of New Credit Agreement
The following is a summary of certain terms of the New
Credit Agreement and certain other agreements entered into in connection
therewith and is qualified in its entirety by reference to the New Credit
Agreement and such other agreements, copies of which are filed as exhibits
hereto.
The Available Credit Facility. Pursuant to the New Credit
Agreement, the Banks (i) loaned to Silgan $250,000,000 of term loans designated
as "A Term Loans" and $200,000,000 of term loans designated as "B Term Loans"
and (ii) have agreed to lend to Containers, Plastics and certain other wholly
owned domestic subsidiaries of Silgan (collectively with Containers and
Plastics, the "Revolving Borrowers") up to $550,000,000 of revolving loans (the
"Revolving Loans"). The New Credit Agreement also gives Silgan the right to
request one or more Banks to increase its commitment for Revolving Loans by up
to an aggregate of an additional $200,000,000 without the consent of the other
Banks, with no Bank being obligated to so increase its commitment.
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Under the New Credit Agreement, the aggregate amount of
Revolving Loans which may be outstanding at any time is not subject to any
borrowing base limitation. However, the Revolving Borrowers are required to
maintain, for at least one period of 30 consecutive days during each period
beginning February 15 of each year through the following February 15, total
average unutilized commitments for Revolving Loans of at least $125 million.
Pursuant to the New Credit Agreement, proceeds from future
Revolving Loans may be used for general corporate and working capital purposes.
The New Credit Agreement increases Silgan's current borrowing capacity for
Revolving Loans by approximately $325 million. Silgan intends to use these
available funds to pursue its growth strategy through strategic acquisitions in
the metal food can, plastic bottle and closure businesses, and by acquiring
businesses in complementary areas of the North American consumer goods packaging
market. In addition, Silgan may use this additional borrowing capacity for other
purposes, including operating needs.
Each of the Term Loans and each of the Revolving Loans, at
the respective borrower's election, consists of loans designated as Eurodollar
Rate (as defined below) loans or as Base Rate (as defined below) loans. Each of
the Term Loans and each of the Revolving Loans can be converted from a Base Rate
loan into a Eurodollar Rate loan and vice versa. The interest periods for
Eurodollar Rate loans may be one, two, three, six or, to the extent available,
twelve months.
As of July 29, 1997, the outstanding principal amounts of
A Term Loans, B Term Loans and Revolving Loans under the New Credit Agreement
were $250 million, $200 million and $143.75 million, respectively. All such
proceeds were used to refinance amounts outstanding under the Previous Credit
Agreement and pay fees and expenses in connection therewith.
Security and Guarantees. Pursuant to the terms of a
Borrowers/Subsidiaries Guaranty made in favor of the Banks, Silgan and each of
its U.S. subsidiaries guaranteed on a secured basis all of the obligations of
the borrowers under the New Credit Agreement. Additionally, Silgan and each of
its U.S. subsidiaries pledged substantially all of their respective assets and
properties as collateral to secure the obligations under the New Credit
Agreement. In the event that Silgan receives a "senior unsecured implied" rating
with respect to its long-term indebtedness of at least BBB- from Standard &
Poor's Rating Services or at least Baa3 from Moody's Investors Service, Inc.,
Silgan has the right to require the release of all of the collateral pledged as
security for the New Credit Agreement.
Payment of Loans. The Revolving Loans generally can be
borrowed, repaid and reborrowed from time to time until December 31, 2003, on
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which date all Revolving Loans mature and are payable in full. Amounts repaid
under the Term Loans cannot be reborrowed.
The A Term Loans mature on December 31, 2003 and are
payable in installments as follows:
A Term Loan
Installment Repayment Date Principal Amount
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December 31, 1998..................................... $25,000,000
December 31, 1999..................................... 30,000,000
December 31, 2000..................................... 35,000,000
December 31, 2001..................................... 40,000,000
December 31, 2002..................................... 55,000,000
December 31, 2003..................................... 65,000,000
The B Term Loans mature on June 30, 2005 and are payable in
installments as follows:
B Term Loan
Installment Repayment Date Principal Amount
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December 31, 1997...................................... $ 1,000,000
December 31, 1998...................................... 2,000,000
December 31, 1999...................................... 2,000,000
December 31, 2000...................................... 2,000,000
December 31, 2001...................................... 2,000,000
December 31, 2002...................................... 2,000,000
December 31, 2003...................................... 2,000,000
December 31, 2004...................................... 2,000,000
June 30, 2005.......................................... 185,000,000
Under the New Credit Agreement, Silgan is required to repay Terms
Loans in an amount equal to (i) 50% of Silgan's Excess Cash Flow (as defined in
the New Credit Agreement) in any fiscal year during the New Credit Agreement
(beginning with the 1997 fiscal year) unless Silgan's Leverage Ratio (as defined
below) for such year is less than or equal to 3.50:1.00; (ii) 100% of the net
sale proceeds received from certain asset sales; provided that if the net sale
proceeds from such asset sales are less than $50 million, such proceeds may be
used by Silgan and its subsidiaries within 12 months to purchase assets for use
in their business; (iii) 100% of the net insurance proceeds from casualty or
condemnation events, provided that up to $25,000,000 of such proceeds may be
used within 12 months to replace or restore the damaged or lost properties or
assets; (iv) 100% of the net proceeds from the incurrence of indebtedness,
except generally for indebtedness incurred as permitted under the New Credit
Agreement; (v) 75% of the cash proceeds from sales of accounts receivable
pursuant to an asset securitization involving accounts receivable; and (vi) 75%
of the net sale proceeds in excess of the first $10 million in any fiscal year
from certain sale and leaseback transactions.
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Interest and Fees. Interest on the Term Loans and the Revolving
Loans is payable at certain margins over certain rates as summarized below.
Interest on Term Loans maintained as Base Rate loans accrues at
floating rates of 0.375% less the then applicable Interest Reduction Discount
(as defined below) (in the case of A Term Loans) and 0.875% less the then
applicable Interest Reduction Discount (in the case of B Term Loans) (but in any
case not less than zero) over the Base Rate. Interest on Term Loans maintained
as Eurodollar Rate loans accrues at floating rates of 1.375% less the then
applicable Interest Reduction Discount (in the case of A Term Loans) and 1.875%
less the then applicable Interest Reduction Discount (in the case of B Term
Loans) over a formula rate (the "Eurodollar Rate") determined with reference to
the rate offered by Bankers Trust for dollar deposits in the New York interbank
Eurodollar market. Interest on Revolving Loans maintained as (i) Base Rate loans
accrues at floating rates of 0.375% less the then applicable Interest Reduction
Discount (but in any case not less than zero) over the Base Rate or (ii)
Eurodollar Rate loans accrues at floating rates of 1.375% less the then
applicable Interest Reduction Discount over the Eurodollar Rate.
Initially, the margins over the Base Rate and the Eurodollar Rate
for Term Loans and Revolving Loans will be 150 basis points less than under the
Previous Credit Agreement. The interest rate for A Term Loans and Revolving
Loans is Base Rate or Eurodollar Rate plus 1% and for B Term Loans is Base Rate
plus 0.5% or Eurodollar Rate plus 1.5%. The interest rates will be reset
quarterly (beginning after December 31, 1997) to give effect to the then
applicable Interest Reduction Discount. Based upon current bank borrowings
outstanding, Silgan expects that the New Credit Agreement will provide an annual
reduction in interest expense of approximately $8.0 million.
Under the New Credit Agreement, the Revolving Borrowers have agreed
to pay to the Banks a commitment commission calculated initially as 0.25% per
annum on the daily average unused portion of the Banks' revolving commitment in
respect of the Revolving Loans until such revolving commitment is terminated.
The commitment commission rate is subject to change, ranging from 0.15% to
0.375%, on a quarterly basis (beginning after December 31, 1997) depending upon
Silgan's Leverage Ratio. Additionally, each of the Revolving Borrowers is
required to pay to the Banks, on a quarterly basis in arrears, a letter of
credit fee at a rate per annum of 1.375% less the then applicable Interest
Reduction Discount, and to pay to Bankers Trust a facing fee of 1/4 of 1% per
annum, each on the average daily stated amount of each letter of credit issued
for the account of such Revolving Borrower.
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In connection with the New Credit Agreement, the Banks (including
Bankers Trust) also received certain financing fees amounting to $2.3 million.
Certain Covenants. The New Credit Agreement contains numerous
financial and operating covenants, under which Silgan and its subsidiaries must
operate. The New Credit Agreement provides Silgan and its subsidiaries with more
flexibility than under the Previous Credit Agreement to, among other things,
make acquisitions, pay dividends, repurchase stock and refinance indebtedness.
The New Credit Agreement limits Silgan's and its subsidiaries'
abilities: (i) to create certain liens; (ii) to consolidate, merge, sell or
lease assets and to purchase assets, except that, among other things, (a) Silgan
and its subsidiaries generally may make stock or asset acquisitions of
businesses primarily engaged in the packaging business; and (b) Silgan and its
subsidiaries may sell up to an aggregate of $100,000,000 of assets and may enter
into certain sale and leaseback transactions, so long as, among other things,
the net proceeds therefrom are applied and/or reinvested as required by the New
Credit Agreement; (iii) to pay dividends on, or repurchase shares of, its
capital stock, except that, among other things: (a) Silgan may pay cash
dividends in an amount not to exceed $6,000,000 per year (as increased by
Silgan's Cumulative Consolidated Net Income (as defined in the New Credit
Agreement)), as provided in the New Credit Agreement; and (b) Silgan may redeem
or repurchase shares of its stock in an amount not to exceed $25,000,000 per
year (as increased by Silgan's Cumulative Consolidated Net Income), as provided
in the New Credit Agreement; (iv) to create additional indebtedness, except for,
among other things: (a) unsecured subordinated indebtedness of Silgan, the
proceeds of which are used within 60 days to refinance other existing
subordinated indebtedness of Silgan; (b) certain indebtedness assumed in
connection with permitted acquisitions; (c) certain unsecured guarantees of
obligations of Joint Ventures (as defined in the New Credit Agreement); and (d)
additional indebtedness not otherwise permitted in an amount not to exceed
$25,000,000; (v) to make certain advances, investments and loans, except for,
among other things, investments in, or transfers of assets to, Joint Ventures,
subject to certain limitations; (vi) to enter into certain transactions with
affiliates outside of the ordinary course; (vii) to make certain capital
expenditures, except for, among other things, capital expenditures which do not
exceed in the aggregate $50 million for the period from July 29, 1997 to
December 31, 1997 and $75 million for each calendar year thereafter during the
term of the New Credit Agreement (such amount for any given calendar year to be
increased by 7% of the annual sales attributable to any permitted acquisition),
provided that to the extent capital expenditures made during any period are less
than the amounts that are otherwise permitted to be made during such period,
such amount may be carried forward and utilized to make capital expenditures in
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the immediately succeeding calendar year, and provided further that additional
capital expenditures may be made with Net Equity Proceeds Amount, Net Insurance
Proceeds, Retained Excess Cash Flow Amount and Net Sale Proceeds (each as
defined in the New Credit Agreement) as provided in the New Credit Agreement;
(viii) with certain exceptions, to permit Silgan's direct and indirect
subsidiaries to issue capital stock or to create limitations on the ability of
any such subsidiary to (a) pay dividends or make other distributions, (b) make
loans or advances, or (c) transfer assets; (ix) to engage in any business other
than the packaging business; and (x) to designate any indebtedness as
"Designated Senior Indebtedness" for purposes of the 9% Debentures, the Exchange
Debentures or any refinancing indebtedness issued by Silgan.
The New Credit Agreement requires that the ratio of EBITDA (as
defined below) to Interest Expense (as defined below) may not be less than, for
each Test Period ending through December 31, 1998 (beginning with the Test
Period ending December 31, 1997), 2.25:1; for each Test Period ending from March
31, 1999 through December 31, 1999, 2.50:1; for each Test Period ending from
March 31, 2000 through December 31, 2000, 2.75:1; and for each Test Period
ending from and after March 31, 2001, 3.00:1. In addition, the New Credit
Agreement requires that the Leverage Ratio for any Test Period (beginning with
the Test Period ending December 31, 1997) not exceed, in the case of all Test
Periods ending on or before December 31, 1999, 4.50:1, and in the case of all
Test Periods ending on or after March 31, 2001, 4.00:1.
Events of Default. Events of default under the New Credit Agreement
include, among others: (i) the failure to pay any principal on the Term Loans or
the Revolving Loans, the failure to reimburse drawings under any letters of
credit when due or the failure to pay within three business days after the date
such payment is due interest on the Term Loans, the Revolving Loans or any
unpaid drawings under any letter of credit or any fees or other amounts owing
under the New Credit Agreement; (ii) subject to certain limited exceptions, any
failure to pay amounts due under certain other agreements or any defaults that
result in or permit the acceleration of certain other indebtedness; (iii)
subject to certain limited exceptions and any applicable grace periods, the
breach of any covenants, representations or warranties contained in the New
Credit Agreement or any related document; (iv) certain events of bankruptcy,
insolvency or dissolution; (v) the occurrence of certain judgments or decrees
not vacated, discharged, stayed or bonded pending appeal; (vi) the occurrence of
certain ERISA related liabilities; (vii) a default under or invalidity of any of
the security or guarantee documents entered into in connection with the New
Credit Agreement or of the security interests granted to the Banks pursuant to
the New Credit Agreement; and (viii) a Change of Control (as defined in the New
Credit Agreement).
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Upon the occurrence of any event of default under the New Credit
Agreement, the Banks are permitted, among other things, to accelerate the
maturity of the Term Loans and the Revolving Loans and all other outstanding
indebtedness under the New Credit Agreement and terminate their commitment to
make any further Revolving Loans or to issue any letters of credit.
Certain Definitions. For purposes of the foregoing description of
the New Credit Agreement, the following terms have the meanings indicated below:
"Base Rate" means, at any time, the highest of (i) 1/2 of 1% in
excess of an adjusted certificate of deposit rate as set forth in the New Credit
Agreement, (ii) 1/2 of 1% in excess of the Federal Funds Rate generally
determined on the basis of a weighted average of rates on overnight Federal
Funds transactions and (iii) the rate which Bankers Trust announces from time to
time as its prime lending rate.
"EBIT" means, for any period, the consolidated net income of Silgan
and its subsidiaries for such period, before Interest Expense and provision for
taxes and (to the extent not already otherwise excluded from the calculation
thereof under the New Credit Agreement) without giving effect to any
extraordinary non-cash gains or extraordinary non-cash losses and gains or
losses from sales of assets (other than sales of inventory in the ordinary
course of business), or any non-cash adjustments resulting from changes in value
of employee stock options.
"EBITDA" means, for any period, EBIT for such period, adjusted by
adding thereto the amount of all depreciation and all amortization of
intangibles (including covenants not to compete), goodwill and loan fees that
were deducted in arriving at EBIT for such period.
"Interest Expense" means, for any period, the total consolidated
interest expense of Silgan and its subsidiaries for such period (without giving
effect to any amortization or write-off of up-front fees and expenses in
connection with any debt issuance).
"Interest Reduction Discount" means initially .375%, and, from and
after Silgan's delivery to the Banks of financial statements for the fiscal
quarter ending December 31, 1997, (A) .125% if, but only if, the Leverage Ratio
for the current Test Period is less than 4.25:1 and greater than or equal to
4.00:1; (B) .250% if, but only if, the Leverage Ratio for the current Test
Period is less than 4.00:1 and greater than or equal to 3.75:1; (C) .375% if,
but only if, the Leverage Ratio for the current Test Period is less than 3.75:1
and greater than or equal to 3.50:1; (D) .500% if, but only if, the Leverage
Ratio for the current Test Period is less than 3.50:1 and greater than or equal
to 3.25:1; (E) .625% if, but only if, the Leverage Ratio for the current Test
Period is less than 3.25:1 and greater than or equal to 3.00:1; (F) .750% if,
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but only if, the Leverage Ratio for the current Test Period is less than 3.00:1
and greater than or equal to 2.75:1; (G) .875% if, but only if, the Leverage
Ratio for the current Test Period is less than 2.75:1 and greater than or equal
to 2.50:1; or (H) 1.00% if, but only if, the Leverage Ratio for the current Test
Period is less than 2.50:1. Notwithstanding anything to the contrary above in
this definition, the Interest Reduction Discount will be reduced to zero at all
times when a default or an event of default under the New Credit Agreement
exists.
"Leverage Ratio" means, for any period, the ratio of (x) the sum of
(I) total indebtedness (excluding Revolving Loans outstanding) as of the last
day of such period plus (II) the Revolving Loans outstanding on the December
31st immediately preceding the last day of such period (or, in the case of a
Test Period ended on December 31 in any fiscal year, the Revolving Loans
outstanding on such December 31) to (y) EBITDA for the most recently ended Test
Period. In determining the Leverage Ratio for any period, the unrestricted cash
and cash equivalents on the consolidated balance sheet of Silgan as of the last
day of such period of up to $50 million are subtracted from total indebtedness
to the extent, but only to the extent, no Revolving Loans are outstanding on
such day, except that for purposes of determining whether repayments are
required out of Excess Cash Flow for the fiscal year ending on December 31, 1997
only, up to $70,000,000 of unrestricted cash and cash equivalents may be
deducted in determining total indebtedness as of the last day of such year.
"Test Period" shall mean each period of four consecutive fiscal
quarters of Silgan (in each case taken as one accounting period).
For purposes of the various computations under the New Credit
Agreement, (i) all computations utilize accounting principles in conformity with
those used to prepare the statements of consolidated and consolidating financial
condition of Silgan and its subsidiaries at December 31, 1996 and March 31, 1997
and the related consolidated and consolidating statements of income and cash
flow of Silgan and its subsidiaries for the fiscal year and three-month periods
ended on such dates, (ii) all computations determining compliance with the ratio
of EBITDA to Interest Expense, the Leverage Ratio and the definitions of the
applicable commitment commission percentage and the Interest Reduction Discount
are determined on a Pro Forma Basis (as defined in the New Credit Agreement),
and (iii) in determining EBITDA for any period, no effect is given to certain
other matters as provided in the New Credit Agreement.
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Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
Exhibit No. Description
99.1 Credit Agreement, dated as of July 29, 1997, among
Silgan Holdings Inc., Silgan Containers
Corporation, Silgan Plastics Corporation, certain
other subsidiaries of any of them, various banks,
Bankers Trust Company, as Administrative Agent and
as a Co-Arranger, Bank of America National Trust &
Savings Association, as Syndication Agent and as a
Co-Arranger, Goldman Sachs Credit Partners L.P., as
Co-Documentation Agent and as a Co-Arranger, and
Morgan Stanley Senior Funding, Inc., as Co-
Documentation Agent and as a Co-Arranger.
99.2 Security Agreement, dated as of July 29, 1997,
among Silgan Holdings Inc., Silgan Containers
Corporation, Silgan Plastics Corporation, certain
other subsidiaries of any of them and Bankers Trust
Company, as Collateral Agent.
99.3 Pledge Agreement, dated as of July 29, 1997, made
by Silgan Holdings Inc., Silgan Containers
Corporation, Silgan Plastics Corporation,
California-Washington Can Corporation and SCCW Can
Corporation, as Pledgors, in favor of Bankers Trust
Company, as Collateral Agent and as Pledgee.
99.4 Borrowers/Subsidiaries Guaranty, dated as of July
29, 1997, made by Silgan Holdings Inc., Silgan
Containers Corporation, Silgan Plastics
Corporation, California-Washington Can Corporation
and SCCW Can Corporation.
In accordance with Item 601(b)(2) of Regulation S-K, the schedules,
exhibits and annexes referenced in the New Credit Agreement and in the Pledge
Agreement, the Security Agreement and the Borrowers/Subsidiaries Guaranty
referenced above have not been filed as part of the exhibits to this Form 8-K.
The Registrant agrees to furnish supplementally a copy of the omitted schedules,
exhibits and annexes to the Commission upon request.
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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 7, 1997
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INDEX TO EXHIBITS
Exhibit No. Description
99.1 Credit Agreement, dated as of July 29, 1997, among
Silgan Holdings Inc., Silgan Containers
Corporation, Silgan Plastics Corporation, certain
other subsidiaries of any of them, various banks,
Bankers Trust Company, as Administrative Agent and
as a Co-Arranger, Bank of America National Trust &
Savings Association, as Syndication Agent and as a
Co-Arranger, Goldman Sachs Credit Partners L.P., as
Co-Documentation Agent and as a Co-Arranger, and
Morgan Stanley Senior Funding, Inc., as Co-
Documentation Agent and as a Co-Arranger.
99.2 Security Agreement, dated as of July 29, 1997,
among Silgan Holdings Inc., Silgan Containers
Corporation, Silgan Plastics Corporation, certain
other subsidiaries of any of them and Bankers Trust
Company, as Collateral Agent.
99.3 Pledge Agreement, dated as of July 29, 1997, made
by Silgan Holdings Inc., Silgan Containers
Corporation, Silgan Plastics Corporation,
California-Washington Can Corporation and SCCW Can
Corporation, as Pledgors, in favor of Bankers Trust
Company, as Collateral Agent and as Pledgee.
99.4 Borrowers/Subsidiaries Guaranty, dated as of July
29, 1997, made by Silgan Holdings Inc., Silgan
Containers Corporation, Silgan Plastics
Corporation, California-Washington Can Corporation
and SCCW Can Corporation.
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EXHIBIT 99.1
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CREDIT AGREEMENT
among
SILGAN HOLDINGS INC.,
SILGAN CONTAINERS CORPORATION,
SILGAN PLASTICS CORPORATION,
CERTAIN OTHER SUBSIDIARIES OF
SILGAN HOLDINGS INC.,
VARIOUS BANKS,
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT,
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
as SYNDICATION AGENT,
GOLDMAN SACHS CREDIT PARTNERS L.P.
and
MORGAN STANLEY SENIOR FUNDING, INC.,
as CO-DOCUMENTATION AGENTS,
and
BANKERS TRUST COMPANY,
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
GOLDMAN SACHS CREDIT PARTNERS L.P.
and
MORGAN STANLEY SENIOR FUNDING, INC.,
as CO-ARRANGERS
--------------------------------------------------
Dated as of July 29, 1997
--------------------------------------------------
================================================================================
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TABLE OF CONTENTS
Page
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Section 1. Amount and Terms of Credit..................................... 1
1.01 Commitments..................................................... 1
1.02 Minimum Amount of Each Borrowing................................ 5
1.03 Notice of Borrowing............................................. 5
1.04 Disbursement of Funds........................................... 7
1.05 Notes........................................................... 8
1.06 Conversions..................................................... 10
1.07 Pro Rata Borrowings............................................. 11
1.08 Interest........................................................ 11
1.09 Interest Periods................................................ 12
1.10 Increased Costs, Illegality, etc................................ 13
1.11 Compensation.................................................... 16
1.12 Change of Applicable Lending Office............................. 17
1.13 Replacement of Banks............................................ 17
Section 2. Letters of Credit.............................................. 19
2.01 Letters of Credit............................................... 19
2.02 Minimum Stated Amount........................................... 20
2.03 Letter of Credit Requests....................................... 20
2.04 Letter of Credit Participations................................. 21
2.05 Agreement to Repay Letter of Credit Drawings.................... 24
2.06 Increased Costs................................................. 25
Section 3. Fees; Commitments; Reductions of Commitments................... 25
3.01 Fees............................................................ 25
3.02 Voluntary Termination of Revolving Commitments.................. 27
3.03 Mandatory Reduction or Termination of Commitments............... 27
Section 4. Prepayments; Payments; Commitment Reductions................... 29
4.01 Voluntary Prepayments........................................... 29
4.02 Mandatory Prepayments and Commitment Reductions................. 32
4.03 Method and Place of Payment..................................... 39
4.04 Net Payments.................................................... 40
Section 5. Conditions Precedent........................................... 42
(i)
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Page
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5.01 Conditions to Loans on the Initial Borrowing Date............... 42
(a) Execution of Agreement; Notes.............................. 42
(b) Officer's Certificate...................................... 42
(c) Opinions of Counsel........................................ 43
(d) Corporate Documents; Proceedings........................... 43
(e) Management Agreements; Debt Agreements..................... 44
(f) Repayment and Termination of Commitments under the
Existing Credit Agreement..................................... 44
(g) Borrowers/Subsidiaries Guaranty............................ 44
(h) Pledge Agreement........................................... 44
(i) Security Agreement......................................... 45
(j) Mortgages; Title Insurance; Surveys, etc................... 46
(k) Adverse Change, etc........................................ 47
(l) Litigation................................................. 48
(m) Fees, etc.................................................. 48
(n) Notices to Holders of Certain Indebtedness................. 48
(o) Financial Projections; Pro Forma Balance Sheet............. 49
(p) Insurance.................................................. 49
5.02 Conditions to All Credit Events................................. 50
(a) No Default................................................. 50
(b) Representations and Warranties............................. 50
(c) Notice of Borrowing; Letter of Credit Request.............. 50
5.03 Revolving Borrowers, etc........................................ 50
Section 6. Representations, Warranties and Agreements..................... 51
6.01 Corporate Status................................................ 52
6.02 Corporate Power and Authority................................... 52
6.03 No Violation.................................................... 52
6.04 Governmental Approvals.......................................... 53
6.05 Pledge Agreements............................................... 53
6.06 Security Agreement; Mortgages; Real Property.................... 53
6.07 Financial Statements; Financial Condition; etc.................. 54
6.08 Litigation...................................................... 55
6.09 True and Complete Disclosure.................................... 56
6.10 Use of Proceeds; Margin Regulations............................. 56
6.11 Tax Returns and Payments........................................ 56
6.12 Compliance with ERISA........................................... 57
(ii)
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6.13 Subordination................................................... 57
6.14 Subsidiaries.................................................... 58
6.15 Compliance with Statutes, etc................................... 58
6.16 Investment Company Act.......................................... 59
6.17 Public Utility Holding Company Act.............................. 59
6.18 Labor Relations................................................. 59
6.19 Patents, Licenses, Franchises and Formulas...................... 60
Section 7. Affirmative Covenants.......................................... 60
7.01 Information Covenants........................................... 60
(a) Quarterly Financial Statements............................. 60
(b) Annual Financial Statements................................ 61
(c) Management Letters......................................... 61
(d) Budgets; Forecasts......................................... 61
(e) Officer's Certificates..................................... 62
(f) Notice of Default or Litigation............................ 62
(g) Other Reports and Filings.................................. 63
(h) Other Information.......................................... 63
7.02 Books, Records and Inspections.................................. 63
7.03 Maintenance of Property, Insurance.............................. 64
7.04 Corporate Franchises............................................ 64
7.05 Compliance with Statutes, etc................................... 64
7.06 ERISA........................................................... 65
7.07 End of Fiscal Years; Fiscal Quarters............................ 66
7.08 Taxes........................................................... 66
7.09 Additional Security; Further Assurances; etc.................... 66
7.10 Foreign Subsidiaries Security................................... 67
7.11 Real Estate Appraisals.......................................... 68
7.12 Margin Stock.................................................... 68
Section 8. Negative Covenants............................................. 68
8.01 Liens........................................................... 69
8.02 Consolidation, Merger, Sale of Assets, etc...................... 72
8.03 Dividends....................................................... 76
8.04 Indebtedness.................................................... 77
8.05 Advances, Investments and Loans................................. 80
8.06 Transactions with Affiliates.................................... 82
8.07 Capital Expenditures............................................ 84
8.08 Interest Coverage Ratio......................................... 85
8.09 Leverage Ratio.................................................. 86
8.10 Limitation on Voluntary Payments and Modifications of Certain
Indebtedness; Modifications of Documents, Certificate of
(iii)
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Incorporation, By-Laws and Certain Other Agreements; etc........ 86
8.11 Creation of Subsidiaries........................................ 87
8.12 Limitation on Restrictions on Subsidiary Dividends and Other
Distributions................................................... 88
8.13 Limitation on Issuances of Capital Stock........................ 89
8.14 Business........................................................ 89
8.15 Change of Name.................................................. 89
8.16 Designated Senior Indebtedness.................................. 90
Section 9. Events of Default.............................................. 90
9.01 Payments........................................................ 90
9.02 Representations, etc............................................ 90
9.03 Covenants....................................................... 90
9.04 Default Under Other Agreements.................................. 90
9.05 Bankruptcy, etc................................................. 91
9.06 ERISA........................................................... 91
9.07 Pledge Agreement................................................ 92
9.08 Borrowers/Subsidiaries Guaranty................................. 92
9.09 Security Agreements; Mortgages; Additional Security Documents... 93
9.10 Judgments....................................................... 93
9.11 Ownership; Change of Control.................................... 93
9.12 Accounts Receivable Facility.................................... 93
Section 10. Definitions and Accounting Terms.............................. 94
10.01 Defined Terms.................................................. 94
10.02 Principles of Construction..................................... 130
Section 11. The Administrative Agent and the Co-Arrangers................. 130
11.01 Appointment.................................................... 130
11.02 Nature of Duties............................................... 131
11.03 Lack of Reliance on the Administrative Agent and Co-Arrangers.. 131
11.04 Certain Rights of the Administrative Agent..................... 132
11.05 Reliance....................................................... 132
11.06 Indemnification................................................ 132
11.07 The Administrative Agent and the Co-Arrangers in Their
Individual Capacity............................................ 133
11.08 Holders........................................................ 133
11.09 Resignation by the Administrative Agent and the Co-Arrangers... 133
Section 12. Miscellaneous................................................. 134
(iv)
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12.01 Payment of Expenses, etc....................................... 134
12.02 Right of Setoff................................................ 136
12.03 Notices........................................................ 137
12.04 Benefit of Agreement........................................... 137
12.05 No Waiver; Remedies Cumulative................................. 139
12.06 Payments Pro Rata.............................................. 140
12.07 Calculations; Computations..................................... 141
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE............... 141
12.09 Counterparts................................................... 142
12.10 Effectiveness.................................................. 143
12.11 Headings Descriptive........................................... 143
12.12 Amendment or Waiver............................................ 143
12.13 Survival....................................................... 145
12.14 Domicile of Loans.............................................. 145
12.15 Confidentiality................................................ 146
12.16 Register....................................................... 147
12.17 Increase of Revolving Loan Commitments; Release of Collateral.. 148
12.18 Certain Agreements with Respect to the Subordinated Exchange
Debentures and the 9% Senior Subordinated Debentures........... 149
12.19 Limitation on Additional Amounts, etc.......................... 149
12.20 Maximum Amount................................................. 150
SCHEDULES
Schedule I Commitments
Schedule II Existing Letters of Credit
Schedule III Real Property
Schedule IV Insurance Requirement
Schedule V Subsidiaries
Schedule VI Permitted Liens
Schedule VII Existing Indebtedness
Schedule VIII Existing Investments
Schedule IX Bank Addresses
(v)
<PAGE>
EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B-1 A Term Note
Exhibit B-2 B Term Note
Exhibit B-3 Revolving Note
Exhibit B-4 Swingline Note
Exhibit C Letter of Credit Request
Exhibit D Section 4.04(b)(ii) Certificate
Exhibit E-1 Opinion of Frank Hogan, Esq., General Counsel
Exhibit E-2 Opinion of Winthrop, Stimson, Putnam & Roberts
Exhibit F Officers' Certificate
Exhibit G Borrowers/Subsidiaries Guaranty
Exhibit H Pledge Agreement
Exhibit I Security Agreement
Exhibit J Election to Become a Revolving Borrower
Exhibit K Assignment and Assumption Agreement
(vi)
<PAGE>
CREDIT AGREEMENT, dated as of July 29, 1997, among SILGAN
HOLDINGS INC., a Delaware corporation ("Silgan"), SILGAN CONTAINERS CORPORATION,
a Delaware corporation ("Containers"), SILGAN PLASTICS CORPORATION, a Delaware
corporation ("Plastics"), each other Revolving Borrower (together with Silgan,
Containers and Plastics, the "Borrowers," and each individually, a "Borrower"),
the lenders from time to time party hereto (each a "Bank" and, collectively, the
"Banks"), BANKERS TRUST COMPANY, as Administrative Agent (in such capacity, the
"Administrative Agent"), BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
as Syndication Agent (in such capacity, the "Syndication Agent"), GOLDMAN SACHS
CREDIT PARTNERS L.P. and MORGAN STANLEY SENIOR FUNDING, INC., as
Co-Documentation Agents (in such capacity, the "Co-Documentation Agents"), and
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, BANKERS TRUST COMPANY,
GOLDMAN SACHS CREDIT PARTNERS L.P. and MORGAN STANLEY SENIOR FUNDING, INC., as
Co-Arrangers (in such capacity, the "Co-Arrangers"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Banks are willing to make available to the Borrowers the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
Section 1. Amount and Terms of Credit.
1.01 Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with an A Term Loan Commitment severally
agrees to make, on the Initial Borrowing Date, a term loan (each an "A Term
Loan" and, collectively, the "A Term Loans") to Silgan, which A Term Loans:
(i) shall, at the option of Silgan, be either Base Rate Loans
or Eurodollar Loans, provided that all A Term Loans made as part of the
same Borrowing shall, unless
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otherwise specifically provided herein, be of the same Type; and
(ii) shall not exceed for any such Bank, in initial aggregate
principal amount, that amount which equals the A Term Loan Commitment
of such Bank on the Initial Borrowing Date (before giving effect to the
termination thereof on such date pursuant to Section 3.03(b)).
Once repaid, A Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth
herein, each Bank with a B Term Loan Commitment severally agrees to make, on the
Initial Borrowing Date, a term loan (each a "B Term Loan" and, collectively, the
"B Term Loans") to Silgan, which B Term Loans:
(i) shall, at the option of Silgan, be either Base Rate Loans
or Eurodollar Loans, provided that all B Term Loans made as part of the
same Borrowing shall, unless otherwise specifically provided herein, be
of the same Type; and
(ii) shall not exceed for any such Bank, in initial aggregate
principal amount, that amount which equals the B Term Loan Commitment
of such Bank on the Initial Borrowing Date (before giving effect to the
termination thereof on such date pursuant to Section 3.03(b)).
Once repaid, B Term Loans incurred hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth
herein, each Bank with a Revolving Loan Commitment severally agrees, at any time
and from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, to make a revolving loan or revolving loans (each
a "Revolving Loan" and, collectively, the "Revolving Loans") to each Revolving
Borrower, which Revolving Loans:
(i) shall, at the option of the respective Revolving Borrower,
be either Base Rate Loans or Eurodollar Loans, provided that all
Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, be of the same Type;
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(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iii) shall not exceed for any such Bank at any time
outstanding in respect of all Revolving Borrowers that aggregate
principal amount which, when added to the product of (A) such Bank's
Adjusted Percentage and (B) the sum of (I) the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of,
the respective incurrence of Revolving Loans) at such time and (II) the
aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) then outstanding, equals the Revolving Loan Commitment
of such Bank at such time; and
(iv) shall not exceed for all such Banks at any time
outstanding in respect of all Revolving Borrowers that aggregate
principal amount which, when added to the sum of (I) the aggregate
amount of all Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) at
such time and (II) the aggregate principal amount of all Swingline
Loans (exclusive of Swingline Loans which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Total
Revolving Loan Commitment at such time.
(d) Subject to and upon the terms and conditions set forth
herein, BTCo in its individual capacity agrees to make, at any time and from
time to time on and after the Initial Borrowing Date and prior to the Swingline
Expiry Date, a revolving loan or revolving loans (each a "Swingline Loan" and,
collectively, the "Swingline Loans") to each Revolving Borrower, which Swingline
Loans:
(i) shall be made and maintained as Base Rate Loans;
(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iii) shall not exceed in aggregate principal amount at any
time outstanding, when added to the sum of
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(I) the aggregate principal amount of all Revolving Loans made by
Non-Defaulting Banks then outstanding and (II) the amount of all Letter
of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) at such time, an amount equal
to the Adjusted Total Revolving Loan Commitment at such time (after
giving effect to any changes thereto on such date); and
(iv) shall not exceed in aggregate principal amount at any
time outstanding the Maximum Swingline Amount.
Notwithstanding anything to the contrary in this Section
1.01(d), BTCo will not make a Swingline Loan after it has received written
notice from any Borrower or the Required Banks stating that a Default or an
Event of Default exists until such time as BTCo shall have received written
notice of (x) rescission of all such notices from the party or parties
originally delivering such notice or notices or (y) the cure or waiver of such
Default or Event of Default in accordance with the requirements of this
Agreement.
(e) On any Business Day, BTCo may, in its sole discretion,
give notice to the Banks with Revolving Loan Commitments that BTCo's outstanding
Swingline Loans shall be funded with a Borrowing of Revolving Loans (provided
that such notice shall be deemed to have been automatically given upon the
occurrence of a Default or an Event of Default under Section 9.05 or upon the
exercise of any of the remedies provided in the last paragraph of Section 9), in
which case one or more Borrowings of Revolving Loans constituting Base Rate
Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day from all such Banks (without giving effect
to any termination of the Total Revolving Loan Commitment pursuant to the last
paragraph of Section 9) pro rata based on each such Bank's Adjusted Percentage
(determined before giving effect to any termination of the Total Revolving Loan
Commitment pursuant to the last paragraph of Section 9), and the proceeds
thereof shall be applied directly to BTCo to repay BTCo for such outstanding
Swingline Loans. Each such Bank hereby irrevocably agrees to make Revolving
Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the date
specified in writing by BTCo notwithstanding (i) the amount of the Mandatory
Borrowing may not comply with the minimum amount for Borrowings otherwise
required hereunder, (ii) whether any conditions specified in Section 5 are then
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satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the
date of such Mandatory Borrowing and (v) the amount of the Total Revolving Loan
Commitment or the Adjusted Total Revolving Loan Commitment at such time. In the
event that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding of the type referred to in Section 9.05 with
respect to any of the Revolving Borrowers), then each such Bank hereby agrees
that it shall forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from the
Revolving Borrowers on or after such date and prior to such purchase) from BTCo
such participations in the outstanding Swingline Loans as shall be necessary to
cause such Banks to share in such Swingline Loans ratably based upon their
respective Adjusted Percentages (determined before giving effect to any
termination of the Total Revolving Loan Commitment pursuant to the last
paragraph of Section 9); provided, that (x) all interest payable on the
Swingline Loans shall be for the account of BTCo until the date as of which the
respective participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the participant
from and after such date and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Bank shall be
required to pay BTCo interest on the principal amount of participation purchased
for each day from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the overnight Federal Funds Rate for the first three days and
at the rate otherwise applicable to Revolving Loans maintained as Base Rate
Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of Loans under a respective Tranche shall not be less
than the Minimum Borrowing Amount for such Tranche of Loans. More than one
Borrowing may occur on the same date, but at no time shall there be outstanding
more than thirty Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever a Borrower desires to
incur Term Loans or Revolving Loans hereunder (excluding Revolving Loans
incurred pursuant to a Mandatory Borrowing), such Borrower shall give the
Administrative Agent at the Notice Office at least one Business Day's prior
notice of each Base Rate Loan and at
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least three Business Days' prior notice of each Eurodollar Loan to be incurred
hereunder; provided that any such notice shall be deemed to have been given on a
certain day only if given before 12:00 Noon (New York time) on such day. Each
such notice (each a "Notice of Borrowing"), except as otherwise expressly
provided in Section 1.10, shall be irrevocable and shall be given by the
respective Borrower in writing, or by telephone promptly confirmed in writing,
in the form of Exhibit A, appropriately completed to specify the name of such
Borrower, the aggregate principal amount of the Loans to be made pursuant to
such Borrowing, the date of such Borrowing (which shall be a Business Day),
whether the Loans being made pursuant to such Borrowing shall constitute A Term
Loans, B Term Loans or Revolving Loans and whether the Loans being made pursuant
to such Borrowing are to be initially maintained as Base Rate Loans or
Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto. The Administrative Agent shall promptly give each Bank which
is required to make Loans of the Tranche specified in the respective Notice of
Borrowing, notice of such proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.
(b) (i) Whenever a Revolving Borrower desires to incur
Swingline Loans hereunder, such Revolving Borrower shall give BTCo not later
than 1:00 P.M. (New York time) on the date that a Swingline Loan is to be
incurred hereunder, written notice or telephonic notice promptly confirmed in
writing of each Swingline Loan to be incurred hereunder. Each such notice shall
be irrevocable and specify in each case (A) the date of Borrowing (which shall
be a Business Day) and (B) the aggregate principal amount of the Swingline Loans
to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(e), with each Revolving Borrower irrevocably agreeing,
by its incurrence of any Swingline Loan, to the making of Mandatory Borrowings
as set forth in Section 1.01(e).
(c) Without in any way limiting the obligation of any
Borrower to confirm in writing any telephonic notice of any Borrowing of Loans,
the Administrative Agent or BTCo, as the case may be, may act without liability
upon the basis of telephonic notice of such Borrowing, reasonably believed by
the Administrative Agent or BTCo, as the case may be, in good faith to be from
the president, a vice president, the chief
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financial officer, the treasurer or an assistant treasurer of such Borrower (or
any other officer or employee of such Borrower designated in writing to the
Administrative Agent and BTCo by the president, a vice president, the chief
financial officer, the treasurer or an assistant treasurer of such Borrower as
being authorized to give such notices under this Agreement) prior to receipt of
written confirmation. In each such case, each Borrower hereby waives the right
to dispute the Administrative Agent's or BTCo's record of the terms of such
telephonic notice of such Borrowing of Loans.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than 3:00 P.M. (New York time) on the date specified
pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no
later than 12:00 Noon (New York time) on the date specified in Section 1.01(e)),
each Bank with a Commitment of the respective Tranche will make available its
pro rata portion of each such Borrowing requested to be made on such date (or in
the case of Swingline Loans, BTCo shall make available the full amount thereof).
All such amounts shall be made available in Dollars and in immediately available
funds at the Payment Office of the Administrative Agent, and the Administrative
Agent will make available to the relevant Borrower at the Payment Office the
aggregate of the amounts so made available by the Banks. Unless the
Administrative Agent shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the Administrative
Agent such Bank's portion of any Borrowing to be made on such date, the
Administrative Agent may assume that such Bank has made such amount available to
the Administrative Agent on such date of Borrowing and the Administrative Agent
may, in reliance upon such assumption, make available to the relevant Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Bank, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
relevant Borrower and such Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or such Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to such
Borrower until the date such corresponding
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<PAGE>
amount is recovered by the Administrative Agent, at a rate per annum equal to
(i) if recovered from such Bank, at the overnight Federal Funds Rate and (ii) if
recovered from such Borrower, the rate of interest applicable to the respective
Borrowing, as determined pursuant to Section 1.08. Nothing in this Section 1.04
shall be deemed to relieve any Bank from its obligation to make Loans hereunder
or to prejudice any rights which the Borrower may have against any Bank as a
result of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) Each Borrower's obligation to pay the
principal of, and interest on, all the Loans made by each Bank to such Borrower
shall be evidenced (i) if A Term Loans, by a promissory note duly executed and
delivered by Silgan substantially in the form of Exhibit B-1 (each an "A Term
Note" and, collectively, the "A Term Notes"), (ii) if B Term Loans, by a
promissory note duly executed and delivered by Silgan substantially in the form
of Exhibit B-2 (each a "B Term Note" and, collectively, the "B Term Notes"),
(iii) if Revolving Loans, by promissory notes duly executed and delivered by
each Revolving Borrower substantially in the form of Exhibit B-3 (each a
"Revolving Note" and, collectively, the "Revolving Notes") and (iv) if Swingline
Loans, by promissory notes duly executed and delivered by each Revolving
Borrower substantially in the form of Exhibit B-4 (each a "Swingline Note and,
collectively, the Swingline Notes"), in each case with blanks appropriately
completed in conformity herewith.
(b) The A Term Note issued by Silgan to each Bank with an A
Term Loan Commitment or outstanding A Term Loans shall (i) be payable to such
Bank or its registered assigns and be dated the Initial Borrowing Date (or, if
issued after the Initial Borrowing Date, be dated the date of issuance thereof),
(ii) be in a stated principal amount equal to the principal amount of the A Term
Loans made by such Bank on the Initial Borrowing Date (or, if issued after the
Initial Borrowing Date, be in a stated principal amount equal to the outstanding
principal amount of A Term Loans of such Bank at such time) and be payable in
the outstanding principal amount of A Term Loans evidenced thereby, (iii) mature
on the A Term Loan Maturity Date, (iv) bear interest as provided in the
appropriate clause of Section 1.08 in respect of Base Rate Loans and Eurodollar
Loans, as the case may be, evidenced thereby, (v) be subject to voluntary
prepayment as provided in Section 4.01, and mandatory repayment as provided in
Section 4.02, and (vi) be entitled to the benefits of this Agreement and the
other Credit Documents.
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(c) The B Term Note issued by Silgan to each Bank with a B
Term Loan Commitment or outstanding B Term Loans shall (i) be payable to such
Bank or its registered assigns and be dated the Initial Borrowing Date (or, if
issued after the Initial Borrowing Date, be dated the date of issuance thereof),
(ii) be in a stated principal amount equal to the principal amount of the B Term
Loans made by such Bank on the Initial Borrowing Date (or, if issued after the
Initial Borrowing Date, be in a stated principal amount equal to the outstanding
principal amount of B Term Loans of such Bank at such time) and be payable in
the principal amount of the B Term Loans evidenced thereby, (iii) mature on the
B Term Loan Maturity Date, (iv) bear interest as provided in the appropriate
clause of Section 1.08 in respect of Base Rate Loans and Eurodollar Loans, as
the case may be, evidenced thereby, (v) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02,
and (vi) be entitled to the benefits of this Agreement and the other Credit
Documents.
(d) The Revolving Note issued by each Revolving Borrower to
each Bank with a Revolving Loan Commitment or outstanding Revolving Loans shall
(i) be payable to such Bank or its registered assigns and be dated the Initial
Borrowing Date, (ii) be in a stated principal amount equal to the Revolving Loan
Commitment of such Bank (or, if issued after the termination thereof, be in a
stated principal amount equal to the outstanding Revolving Loans of such Bank at
such time) and be payable in the outstanding principal amount of the Revolving
Loans to such Revolving Borrower evidenced thereby, (iii) mature on the
Revolving Loan Maturity Date, (iv) bear interest as provided in the appropriate
clause of Section 1.08 in respect of Base Rate Loans and Eurodollar Loans, as
the case may be, evidenced thereby, (v) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02,
and (vi) be entitled to the benefits of this Agreement and the other Credit
Documents.
(e) The Swingline Note issued by each Revolving Borrower to
BTCo shall (i) be payable to BTCo or its registered assigns and be dated the
Initial Borrowing Date, (ii) be in a stated principal amount equal to the
Maximum Swingline Amount and be payable in the outstanding principal amount of
Swingline Loans to such Revolving Borrower evidenced thereby, (iii) mature on
the Swingline Expiry Date, (iv) bear interest as provided in the appropriate
clause of Section 1.08 in the case of the Base Rate Loans evidenced thereby, (v)
be subject to voluntary prepayment as provided
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in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vi)
be entitled to the benefits of this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of
each Loan made by it and each payment and conversion in respect thereof and will
prior to any transfer of any of its Notes endorse on the reverse side thereof
the outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation or any error in such notation shall not affect the respective
Borrower's obligations in respect of such Loans.
1.06 Conversions. Each Borrower shall have the option to
convert, on any Business Day occurring on or after the Initial Borrowing Date,
all or a portion equal to at least the Minimum Borrowing Amount of the
outstanding principal amount of Loans made to such Borrower pursuant to one or
more Borrowings (so long as of the same Tranche) of one or more Types of Loans
into a Borrowing (of the same Tranche) of another Type of Loan, provided that
(i) except as otherwise provided in Section 1.10(b), Eurodollar Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Loans being converted and no such partial conversion of
Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion, (iii) no conversion pursuant to this Section 1.06 shall
result in a greater number of Borrowings of Eurodollar Loans than is permitted
under Section 1.02 and (iv) Swingline Loans may not be converted pursuant to
this Section 1.06. Each conversion pursuant to this Section 1.06 shall be
effected by the respective Borrower by giving the Administrative Agent at the
Notice Office prior to 12:00 Noon (New York time) at least three Business Days'
prior notice (each a "Notice of Conversion") specifying the Loans to be so
converted, the Borrowing(s) pursuant to which such Loans were made and, if to be
converted into Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Bank prompt notice of any such
proposed conversion affecting any of its Loans. Upon any such conversion the
proceeds thereof will be applied directly on the day of such conversion to
prepay the outstanding principal amount of the Loans being converted.
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1.07 Pro Rata Borrowings. All Borrowings of A Term Loans, B
Term Loans and Revolving Loans shall be incurred from the Banks pro rata on the
basis of their A Term Loan Commitments, B Term Loan Commitments or Revolving
Loan Commitments, as the case may be; provided, that all Borrowings of Revolving
Loans made pursuant to a Mandatory Borrowing shall be incurred from the Banks
with Revolving Loan Commitments pro rata on the basis of their Adjusted
Percentages. It is understood that no Bank shall be responsible for any default
by any other Bank of its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Bank or Banks to make its or their Loans
hereunder.
1.08 Interest. (a) Each Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan made to such
Borrower hereunder from the date of Borrowing thereof until the maturity thereof
(whether by acceleration or otherwise) at a rate per annum which shall be equal
to the sum of the Applicable Margin plus the Base Rate in effect from time to
time.
(b) Each Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan made to such Borrower from the
date of Borrowing thereof until the maturity thereof (whether by acceleration or
otherwise) at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to the
greater of (x) 2% per annum in excess of the rate otherwise applicable to Base
Rate Loans of the respective Tranche from time to time and (y) the rate which is
2% in excess of the rate then borne by such Loans, in each case with such
interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on the last day
of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three-month
intervals after the first day of
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such Interest Period and (iii) in respect of each Loan, on any repayment or
prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative
Agent shall determine the interest rate for the Eurodollar Loans for which such
determination is being made and shall promptly notify the respective Borrower
and the respective Banks thereof. Each such determination shall, absent manifest
error, be final and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the respective Borrower
gives any Notice of Borrowing or Notice of Conversion in respect of the making
of, or conversion into, a Borrowing of Eurodollar Loans (in the case of the
initial Interest Period applicable thereto) or on the third Business Day prior
to the expiration of an Interest Period applicable to such a Borrowing of
Eurodollar Loans (in the case of subsequent Interest Periods), such Borrower
shall have the right to elect, by giving the Administrative Agent notice
thereof, the interest period (each an "Interest Period") applicable to such
Borrowing, which Interest Period shall, at the option of such Borrower, be
either a one, two, three, six or, to the extent available to all Banks with
obligations in respect of the respective Tranche of Loans, twelve month period,
provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan
shall commence on the date of Borrowing of such Eurodollar Loan
(including the date of any conversion thereto from a Base Rate Loan)
and each Interest Period occurring thereafter in respect of such
Eurodollar Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
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(iv) if any Interest Period would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; provided, however, that if any
Interest Period for a Eurodollar Loan would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time when
an Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of A
Term Loans or B Term Loans shall be selected which extends beyond any
date upon which a mandatory repayment of A Term Loans or B Term Loans,
as the case may be, will be required to be made under Section 4.02(b)
or 4.02(c), as the case may be, if the aggregate principal amount of A
Term Loans or B Term Loans, as the case may be, which have Interest
Periods which will expire after such date will be in excess of the
aggregate principal amount of A Term Loans or B Term Loans, as the case
may be, then outstanding less the aggregate amount of such required
repayment; and
(vii) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the respective
Maturity Date for such Tranche of Loans.
If, upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the relevant Borrower has failed to elect, or is
not permitted to elect, a new Interest Period to be applicable to such
Eurodollar Loans as provided above, such Borrower shall be deemed to have
elected to convert such Eurodollar Loans into Base Rate Loans effective as of
the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
any Bank shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the Effective Date
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affecting the interbank Eurodollar market, adequate and fair means do
not exist for ascertaining the applicable interest rate on the basis
provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loans because of (x) any change since
the Effective Date in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payment to any
Bank of the principal of or interest on the Notes or any other amounts
payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Bank
pursuant to the laws of the jurisdiction in which it is organized or in
which its principal office or applicable lending office is located or
any subdivision thereof or therein) or (B) a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the
Eurodollar Rate and/or (y) other circumstances since the Effective Date
affecting such Bank or the interbank Eurodollar market or the position
of such Bank in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having the
force of law) or (z) impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall on such date give notice (by telephone confirmed in
writing) to the respective Borrowers and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be
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available until such time as the Administrative Agent notifies the respective
Borrowers and the respective Banks that the circumstances giving rise to such
notice by the Administrative Agent no longer exist, and any Notice of Borrowing
or Notice of Conversion given by any Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by such Borrower, (y) in the case of clause (ii) above, the
respective Borrower agrees, subject to the provisions of Section 12.19 (to the
extent applicable), to pay to such Bank, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice in
reasonable detail as to the additional amounts owed to such Bank, showing the
basis for the calculation thereof, submitted to the respective Borrower by such
Bank in good faith shall, absent manifest error, be final and conclusive and
binding upon all the parties hereto) and (z) in the case of clause (iii) above,
take one of the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a) (ii) or (iii), the respective
Borrower may (and in the case of a Eurodollar Loan affected pursuant to Section
1.10 (a)(iii) shall) either (i) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel such Borrowing by giving the
Administrative Agent telephonic notice (confirmed in writing) thereof on the
same date that such Borrower was notified by the affected Bank or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii), or (ii) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written notice to the Administrative Agent, require the affected Bank to convert
each such Eurodollar Loan into a Base Rate Loan; provided, that if more than one
Bank is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If at any time after the Effective Date any Bank
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law and including, without limitation, those
announced or published prior to the Effective Date)
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concerning capital adequacy, or any change in interpretation or administration
thereof by the NAIC or any governmental authority, central bank or comparable
agency, will have the effect of increasing the amount of capital required or
expected to be maintained by such Bank or any corporation controlling such Bank
based on the existence of such Bank's Commitments hereunder or its obligations
hereunder, then the Borrowers jointly and severally agree, subject to the
provisions of Section 12.19 (to the extent applicable), to pay to any such Bank,
upon such Bank's written demand therefor, such additional amounts as shall be
required to compensate such Bank or such other corporation for the increased
cost to such Bank or such other corporation or the reduction in the rate of
return to such Bank or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Bank will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable; provided, that such Bank's determination of compensation owing under
this Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all parties hereto. Each Bank, upon determining that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the respective Borrowers, which notice shall show in
reasonable detail the basis for calculation of such additional amounts, although
the failure to give any such notice shall not release or diminish any of the
respective Borrowers' obligations to pay additional amounts pursuant to this
Section 1.10(c).
1.11 Compensation. Each Borrower agrees, subject to the
provisions of Section 12.19 (to the extent applicable), to compensate each Bank,
upon such Bank's written request (which request shall be made in good faith and
shall set forth in reasonable detail the basis for requesting such
compensation), for all losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the liquidation
or reemployment of deposits or other funds required by such Bank to fund its
Eurodollar Loans) which such Bank may sustain: (i) if for any reason (other than
a default by such Bank or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion given by such Borrower
(whether or not withdrawn by the respective Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any prepayment or repayment (including any
prepayment or repayment made pursuant to Section 4.01, 4.02 or 12.17(a) or as a
result of an acceleration of Loans
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pursuant to Section 9) or conversion of any of such Borrower's Eurodollar Loans
occurs on a date which is not the last day of an Interest Period with respect
thereto; (iii) if any prepayment of any of such Borrower's Eurodollar Loans is
not made on any date specified in a notice of prepayment given by such Borrower;
or (iv) as a consequence of (x) any other default by such Borrower to repay its
Loans when required by the terms of this Agreement or the respective Notes or
(y) an election made, or action required to be taken, by such Borrower pursuant
to Section 1.10(b).
1.12 Change of Applicable Lending Office. Each Bank agrees
that, upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect
to such Bank, it will, if requested by the applicable Borrower, use reasonable
efforts (subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit affected by such
event; provided, that such designation is made on such terms that such Bank and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the operation
of any such Section. Nothing in this Section 1.12 shall affect or postpone any
of the obligations of any Borrower or the right of any Bank provided in Sections
1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) Upon the occurrence of any
event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 with respect to any Bank which results in
such Bank charging to any Borrower increased costs in excess of those being
generally charged by the other Banks or (y) if any Bank (A) becomes a Defaulting
Bank or otherwise defaults in its obligations to make Loans or fund Unpaid
Drawings or (B) refuses to consent to a proposed change, waiver, discharge or
termination with respect to any of the matters set forth in clauses (i) through
(vi), inclusive, of the first proviso in Section 12.12(a) which has been
approved by the Required Banks, the Borrowers shall have the right (subject to
the requirements of Section 12.12(b)), if no Default or Event of Default will
exist immediately after giving effect to the respective replacement, to replace
such Bank (the "Replaced Bank") with one or more other Eligible Transferee or
Transferees (collectively, the "Replacement Bank") none of whom shall constitute
a Defaulting Bank at the time of such replacement and each of whom shall be
reasonably acceptable to the Administrative Agent, provided, that:
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(i) at the time of any replacement pursuant to this
Section 1.13, the Replacement Bank shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 12.04(b) (and
with all fees payable pursuant to said Section 12.04(b) to be paid by
the Replacement Bank) pursuant to which the Replacement Bank shall
acquire all of the Commitments and outstanding Loans of, and in each
case participations in Letters of Credit by, the Replaced Bank and, in
connection therewith, shall pay to (x) the Replaced Bank in respect
thereof an amount equal to the sum of (I) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Replaced Bank, (II) an amount equal to all Unpaid Drawings that have
been funded by (and not reimbursed to) such Replaced Bank, together
with all then unpaid interest with respect thereto at such time and
(III) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank pursuant to Section 3.01 and (y) BTCo an
amount equal to such Replaced Bank's Adjusted Percentage (for this
purpose, determined as if the adjustment described in clause (y) of the
immediately succeeding sentence had been made with respect to such
Replaced Bank) of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) and any Mandatory Borrowing, in each case to the extent
such amount was not theretofore funded by such Replaced Bank; and
(ii) all obligations (including, without limitation, all
obligations under Section 1.11) of the respective Borrowers then owing
to the Replaced Bank (other than those specifically described in clause
(i) above in respect of which the assignment purchase price has been,
or is concurrently being, paid) shall be paid in full to such Replaced
Bank concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreements, the
payment of all amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes executed by the appropriate Borrower, (x) the
Replacement Bank shall become a Bank hereunder and the Replaced Bank shall cease
to constitute a Bank hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.10,
1.11, 2.06, 4.04, 12.01 and 12.06), which shall survive as to such Replaced Bank
and (y) in the case of a replacement of a Defaulting Bank with a Non-
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Defaulting Bank, the Adjusted Percentages of the respective Banks shall be
automatically adjusted at such time to give effect to such replacement.
Section 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, any Revolving Borrower may request that BTCo in its
individual capacity issue, at any time and from time to time on and after the
Initial Borrowing Date and prior to the 5th day (or, in the case of trade
Letters of Credit, the 30th day) prior to the Revolving Loan Maturity Date, for
the account of such Revolving Borrower, (x) an irrevocable standby letter of
credit in a form customarily used by BTCo, or in such other form as has been
approved by BTCo, in support of such obligations of Silgan or any of its
Subsidiaries as may be requested by the respective Revolving Borrower, and (y)
an irrevocable sight trade letter of credit in a form customarily used by BTCo,
or in such other form as has been approved by BTCo, in support of commercial
transactions of any Revolving Borrower or any of its Subsidiaries (each letter
of credit issued pursuant to this Section 2.01(a), together with each letter of
credit described in the immediately succeeding sentence, a "Letter of Credit").
It is hereby acknowledged and agreed that each of the letters of credit
described in Schedule II (the "Existing Letters of Credit"), which were issued
by BTCo under the Existing Credit Agreement and remain outstanding on the
Initial Borrowing Date, shall constitute a "Letter of Credit" for all purposes
of this Agreement and shall be deemed issued under this Agreement on the Initial
Borrowing Date.
(b) Subject to and upon the terms and conditions set forth
herein, BTCo hereby agrees that it will, at any time and from time to time on
and after the Initial Borrowing Date and prior to the 5th day (or, in the case
of trade Letters of Credit, the 30th day) prior to the Revolving Loan Maturity
Date, following its receipt of the respective Letter of Credit Request, issue
for the account of the respective Revolving Borrower, one or more Letters of
Credit, provided, that BTCo shall be under no obligation to issue any Letter of
Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain BTCo from issuing such Letter of Credit or any requirement of
law applicable to BTCo or any request or directive (whether or not
having
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the force of law) from any governmental authority with jurisdiction
over BTCo shall prohibit, or request that BTCo refrain from, the
issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon BTCo with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which
BTCo is not otherwise compensated) not in effect on the Effective Date,
or any unreimbursed loss, cost or expense which was not applicable, in
effect or known to BTCo as of the Effective Date and which BTCo in good
faith deems material to it; or
(ii) BTCo shall have received notice from the Required
Banks prior to the issuance of such Letter of Credit of the type
described in the penultimate sentence of Section 2.03(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed the lesser of (x) $30,000,000 and (y) when added to the aggregate
principal amount of all Revolving Loans made by Non-Defaulting Banks then
outstanding and Swingline Loans then outstanding, an amount equal to the
Adjusted Total Revolving Loan Commitment at such time, (ii) each Letter of
Credit shall by its terms terminate on or before the earlier of (x) (A) in the
case of standby Letters of Credit, one year after the date of issuance thereof
(although any such standby Letter of Credit may be extended for successive
periods up to one year, but not beyond the Business Day immediately preceding
the Revolving Loan Maturity Date, on terms acceptable to BTCo) and (B) in the
case of trade Letters of Credit, 180 days after the date of issuance thereof and
(y) the Business Day immediately preceding the Revolving Loan Maturity Date (or
the 30th day preceding the Revolving Loan Maturity Date in the case of trade
Letters of Credit) and (iii) each Letter of Credit shall be denominated in
Dollars.
2.02 Minimum Stated Amount. The initial Stated Amount of each
Letter of Credit shall be not less than $100,000 or such lesser amount as is
acceptable to BTCo.
2.03 Letter of Credit Requests. (a) Whenever a Revolving
Borrower desires that a Letter of Credit be issued for its account, such
Revolving Borrower shall give the Administrative Agent and BTCo at least two
Business Days'
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prior written notice thereof. Each notice shall be in the form of Exhibit C
(each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the respective Revolving Borrower
that such Letter of Credit may be issued in accordance with, and will not
violate the requirements of, Section 2.01(c). Unless BTCo has received notice
from the Required Banks before it issues a Letter of Credit that one or more of
the conditions specified in Section 5.01 or 5.02, as the case may be, are not
then satisfied, or that the issuance of such Letter of Credit would violate
Section 2.01(c), then BTCo may issue the requested Letter of Credit for the
account of the respective Revolving Borrower in accordance with BTCo's usual and
customary practices. Upon its issuance of, or its entering into any amendment
with respect to, any standby Letter of Credit, BTCo shall promptly notify the
Administrative Agent and each Bank of such issuance or amendment and deliver to
the Administrative Agent and each Bank a copy of the Letter of Credit actually
issued or amended, as the case may be.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by BTCo of any Letter of Credit, BTCo shall be deemed to have sold to
each Bank with a Revolving Loan Commitment, other than BTCo (each such Bank, in
its capacity under this Section 2.04, a "Participant"), and each such
Participant shall be deemed irrevocably and unconditionally to have purchased
from BTCo, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Adjusted Percentage in such
Letter of Credit, each substitute letter of credit, each drawing made thereunder
and the obligations of the respective Revolving Borrower under this Agreement
with respect thereto, in the respective Letter of Credit Fees payable with
respect thereto, and any security therefor or guaranty pertaining thereto. Upon
any change in the Revolving Loan Commitments or Adjusted Percentages of the
Banks pursuant to Section 1.13 or 12.04(b) or as a result of Bank Default, it is
hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new Adjusted Percentages of the assignor and
assignee Bank or all of the Banks with Revolving Loan Commitments, as the case
may be.
(b) In determining whether to pay under any Letter of Credit,
BTCo shall not have any obligation relative to the Participants therein other
than to confirm that any documents
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required to be delivered under such Letter of Credit appear to have been
delivered and that they appear to substantially comply on their face with the
requirements of such Letter of Credit. Any action taken or omitted to be taken
by BTCo under or in connection with any Letter of Credit if taken or omitted in
the absence of gross negligence or willful misconduct, shall not create for BTCo
any resulting liability to any Revolving Borrower, any other Credit Party, any
Participant or any other Bank.
(c) In the event that BTCo makes any payment under any Letter
of Credit and the respective Revolving Borrower shall not have reimbursed such
amount in full to BTCo pursuant to Section 2.05(a), BTCo shall promptly notify
the Administrative Agent, which shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of BTCo, the amount of such Participant's
Adjusted Percentage of such unreimbursed payment in Dollars and in same day
funds. If the Administrative Agent so notifies, prior to 11:00 A.M. (New York
time) on any Business Day, any Participant required to fund a payment under a
Letter of Credit, such Participant shall make available to the Administrative
Agent for the account of BTCo such Participant's Adjusted Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Adjusted Percentage of the
amount of such payment available to the Administrative Agent for the account of
BTCo, such Participant agrees to pay to the Administrative Agent for the account
of BTCo, forthwith on demand such amount, together with interest thereon, for
each day from such date until the date such amount is paid to the Administrative
Agent for the account of BTCo at the overnight Federal Funds Rate. The failure
of any Participant to make available to the Administrative Agent for the account
of BTCo such Participant's Adjusted Percentage of any payment under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of BTCo such
Participant's Adjusted Percentage of any Letter of Credit on the date required,
as specified above, but no Participant shall be responsible for the failure of
any other Participant to make available to the Administrative Agent for the
account of BTCo such other Participant's Adjusted Percentage of any such
payment.
(d) Whenever BTCo receives a payment of a reimbursement
obligation as to which the Administrative Agent has
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received for the account of BTCo any payments from the respective Participants
pursuant to clause (c) above, BTCo shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each such Participant which has paid
its Adjusted Percentage thereof, in Dollars and in same day funds, an amount
equal to such Participant's share (based upon the proportionate aggregate amount
originally funded by such Participant to the aggregate amount funded by all
Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, BTCo shall furnish
to such Bank copies of any standby Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.
(f) The obligations of the respective Participants to make
payments to the Administrative Agent for the account of BTCo with respect to
Letters of Credit shall be irrevocable and not subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever and shall be
made in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right which any Revolving Borrower or any other Credit Party may have
at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, BTCo, any Bank, or
any other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between any
Revolving Borrower or any other Credit Party and the beneficiary named
in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
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(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) Each
Revolving Borrower hereby agrees to reimburse BTCo, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by BTCo under any Letter of Credit issued for
such Revolving Borrower's account (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") immediately after, and in any event on the date
of, such payment or disbursement with interest on the amount so paid or
disbursed by BTCo, to the extent not reimbursed prior to 12:00 Noon (New York
time) on the date of such payment or disbursement, from and including the date
paid or disbursed to but not including the date BTCo was reimbursed therefor at
a rate per annum which shall be the Base Rate in effect from time to time plus
the Applicable Margin in respect of Revolving Loans maintained as Base Rate
Loans; provided, however, to the extent such amounts are not reimbursed prior to
12:00 Noon (New York time) on the fourth Business Day following notice of such
payment or disbursement (although no such notice shall be required to be given
if a Default or an Event of Default under Section 9.05 shall exist, in which
case interest shall accrue on such amounts as hereinafter provided in this
proviso), interest shall thereafter accrue on the amounts so paid or disbursed
by BTCo (and until reimbursed by such Revolving Borrower) at a rate per annum
which shall be the Base Rate in effect from time to time plus the Applicable
Margin in respect of Revolving Loans maintained as Base Rate Loans plus 2%, in
each such case, with such interest to be payable on demand.
(b) The obligations of each Revolving Borrower under this
Section 2.05 to reimburse BTCo with respect to Unpaid Drawings (including, in
each case, interest thereon) shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which such Revolving Borrower may have or have had against any Bank
(including in such Bank's capacity as issuer of the Letter of Credit or as a
Participant with respect thereto), including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit or any
non-application or misapplication by
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the beneficiary of the proceeds of such Drawing; provided, however, that no
Revolving Borrower shall be obligated to reimburse BTCo for any wrongful payment
made by BTCo under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of BTCo.
2.06 Increased Costs. If at any time after the Effective Date,
the introduction of or any change in applicable law, rule or regulation,
guideline or in the interpretation or administration thereof by the NAIC or any
governmental authority charged with the interpretation or administration
thereof, or compliance by BTCo or any Participant with any request or directive
by any such authority (whether or not having the force of law), or any change in
generally accepted accounting principles, shall either (i) impose, modify or
deem applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by BTCo or participated in by any Participant,
or (ii) impose on BTCo or any Participant any other conditions relating,
directly or indirectly, to this Agreement or any respective Letter of Credit,
and the result of any of the foregoing is to increase the cost to BTCo or any
Participant of issuing, maintaining or participating in any such Letter of
Credit, or reduce the amount of any sum received or receivable by BTCo or any
Participant hereunder, then, upon demand to the respective Revolving Borrower by
BTCo or such Participant (a copy of which notice shall be sent by BTCo or such
Participant to the Administrative Agent), such Revolving Borrower shall, subject
to the provisions of Section 12.19 (to the extent applicable), pay to BTCo or
such Participant the additional amount or amounts as will compensate BTCo or
such Participant for such increased cost or reduction. A certificate submitted
to the respective Revolving Borrower by BTCo or such Participant, as the case
may be (a copy of which certificate shall be sent by BTCo or such Participant to
the Administrative Agent), setting forth the basis for the determination of such
additional amount or amounts necessary to compensate BTCo or such Participant as
aforesaid, shall be conclusive and binding on such Revolving Borrower, absent
manifest error, as to the amount thereof.
Section 3. Fees; Commitments; Reductions of Commitments.
3.01 Fees. (a) Each Revolving Borrower jointly and severally
agrees to pay to the Administrative Agent for distribution to each
Non-Defaulting Bank with a Revolving
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Loan Commitment a commitment commission (the "Commitment Commission") for the
period from the Effective Date to but excluding the Revolving Loan Maturity Date
(or such earlier date as the Total Revolving Loan Commitment shall have been
terminated), computed at a rate equal to the Applicable Commitment Commission
Percentage on the daily average Unutilized Revolving Loan Commitment of such
Non-Defaulting Bank. Accrued Commitment Commission shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the Revolving Loan
Maturity Date or upon such earlier date as the Total Revolving Loan Commitment
shall have been terminated.
(b) Each Revolving Borrower jointly and severally agrees to
pay to the Administrative Agent for proportionate distribution to each
Non-Defaulting Bank with a Revolving Loan Commitment (based upon each such
Bank's Adjusted Percentage) a fee in respect of such Non-Defaulting Bank's
participation in each Letter of Credit issued hereunder (the "Letter of Credit
Fee") for the period from and including the date of issuance of such Letter of
Credit to and including the termination of such Letter of Credit, computed at a
rate per annum equal to the Applicable Margin for Revolving Loans maintained as
Eurodollar Loans, as in effect from time to time, on the daily Stated Amount of
such Letter of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and upon the first day after
the termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(c) Each Revolving Borrower jointly and severally agrees to
pay to BTCo, for its own account, a facing fee in respect of each Letter of
Credit issued by BTCo hereunder (the "Facing Fee"), computed at a rate of 1/4 of
1% per annum on the daily Stated Amount of such Letter of Credit. Accrued Facing
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and upon the first day after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(d) Each Revolving Borrower jointly and severally agrees to
pay to BTCo, for its own account, in respect of each Letter of Credit issued
hereunder, such amount or amounts as BTCo customarily charges as processing fees
for issuing, amending and paying on letters of credit.
(e) The Borrowers jointly and severally agree to pay to the
Administrative Agent and the Co-Arrangers, for
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their own accounts, such fees as may be agreed to from time to time between the
Borrowers and the Administrative Agent and the Co-Arrangers.
3.02 Voluntary Termination of Revolving Commitments. (a) Upon
at least two Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) by any Borrower to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Banks), any Borrower shall have the right, without premium or penalty, to
terminate the Total Unutilized Revolving Loan Commitment, in whole or, if in
part, in integral multiples of $1,000,000, provided, that (i) each such
reduction shall apply proportionately to permanently reduce the Revolving Loan
Commitment of each Bank and (ii) the reduction to the Total Unutilized Revolving
Loan Commitment shall in no case be in an amount which would cause the Revolving
Loan Commitment of any Bank to be reduced (as required by preceding clause (i))
by an amount which exceeds the remainder of (x) the Unutilized Revolving Loan
Commitment of such Bank as in effect immediately before giving effect to such
reduction minus (y) such Bank's Adjusted Percentage of the aggregate principal
amount of all Swingline Loans then outstanding.
(b) In the event of the refusal by a Bank to consent to a
proposed change, waiver, discharge or termination with respect to any of the
matters set forth in clauses (i) through (vi), inclusive, of the first proviso
in Section 12.12(a) which has been approved by the Required Banks, the Borrowers
shall have the right (subject to the requirements of Section 12.12(b)), upon
five Business Days' prior written notice to the Administrative Agent at the
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Banks), to terminate the entire Revolving Loan Commitment of such
Bank, so long as all Loans, together with accrued and unpaid interest, Fees and
all other amounts owing to such Bank are repaid concurrently with the
effectiveness of such termination pursuant to Section 4.01(b) (at which time
Schedule I shall be deemed modified to reflect such changed amounts), and at
such time, such Bank shall no longer constitute a "Bank" for purposes of this
Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.01 and
12.06), which shall survive as to such repaid Bank.
3.03 Mandatory Reduction or Termination of Commitments. (a)
The Total Commitment (and the A Term Loan
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Commitment, the B Term Loan Commitment and the Revolving Loan Commitment of each
Bank) shall terminate in their entirety on August 31, 1997 unless the Initial
Borrowing Date has occurred on or prior to such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total A Term Loan Commitment and the Total B
Term Loan Commitment (and the A Term Loan Commitment and the B Term Loan
Commitment of each Bank) shall terminate in their entirety on the Initial
Borrowing Date (after the incurrence of the respective Tranches of Term Loans on
such date).
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Initial Borrowing Date
upon which a mandatory repayment of Term Loans pursuant to Section 4.02(d), (e),
(f), (g), (h) or (i) is required (and exceeds in amount the aggregate principal
amount of Term Loans then outstanding) or would be required if Term Loans were
then outstanding, the Total Revolving Loan Commitment shall be permanently
reduced on such date by the amount, if any, by which the amount of such required
repayment (determined as if an unlimited amount of Term Loans were actually
outstanding) exceeds the aggregate principal amount of Term Loans then
outstanding.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, (i) on the date on which Silgan Plastics Canada
and/or Canadian Holdco enter into the Canadian Credit Facility, the Total
Revolving Loan Commitment shall be permanently reduced by an amount equal to the
Dollar equivalent of the amount of the revolving credit facility thereunder on
such date and (ii) on each date thereafter on which such revolving credit
facility is increased, the Total Revolving Loan Commitment shall be permanently
reduced by an amount equal to the Dollar equivalent of such increase.
(f) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, (i) on the date on which Silgan or any of its
Subsidiaries enters into the Accounts Receivable Facility, the Total Revolving
Loan Commitment shall be permanently reduced by an amount equal to
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75% of the commitment amount in respect of the revolving facility component of
the Accounts Receivable Facility and (ii) on each date thereafter on which the
commitment amount of such revolving facility component is increased, the Total
Revolving Loan Commitment shall be permanently reduced on each such date by an
amount equal to 75% of the amount of such increase.
(g) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 shall be applied proportionately to reduce the
Revolving Loan Commitment of each Bank with such a Commitment.
Section 4. Prepayments; Payments; Commitment Reductions.
4.01 Voluntary Prepayments. (a) Each Borrower shall have the
right to prepay the Loans made to such Borrower, without premium or penalty, in
whole or in part at any time and from time to time on the following terms and
conditions: (i) such Borrower shall give the Administrative Agent at the Notice
Office (x) at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay Base Rate Loans
(or same day notice in the case of Swingline Loans provided such notice is given
prior to 3:00 P.M. (New York time) on such Business Day) and (y) at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Eurodollar Loans, whether A Term Loans, B Term
Loans, Revolving Loans or Swingline Loans shall be prepaid, the amount of such
prepayment, the Types of Loans to be prepaid and, in the case of Eurodollar
Loans, the specific Borrowing or Borrowings pursuant to which made, and, in the
case of any voluntary prepayment of Term Loans, whether or not such prepayment
is to be made with Net Equity Proceeds received by Silgan from the sale or
issuance of its capital stock or with the Retained Excess Cash Flow Amount,
which notice the Administrative Agent shall promptly transmit to each of the
Banks; (ii) each prepayment shall be in an aggregate principal amount of at
least $1,000,000 (or $250,000 in the case of Swingline Loans), provided, that if
any partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall
reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto, then such
Borrowing shall be converted at the end of the then current Interest Period into
a Borrowing of Base Rate Loans and any election of an Interest Period thereafter
with respect thereto given by such Borrower shall have no force or effect;
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(iii) except as otherwise provided in the proviso to clause (iv) of this Section
4.01(a), each prepayment in respect of any Term Loans made pursuant to this
Section 4.01(a) shall be allocated among the A Term Loans and the B Term Loans
on a pro rata basis (based upon the then relative aggregate outstanding
principal amounts of A Term Loans and B Term Loans); (iv) each prepayment of any
Tranche of Term Loans pursuant to this Section 4.01(a) shall be applied (1)
first, to reduce the A Term Loan Scheduled Repayment and the B Term Loan
Scheduled Repayment which are due on December 31 of the year in which such
prepayment is made (it being understood that any voluntary prepayments of A Term
Loans or B Term Loans pursuant to this Section 4.01(a) which are made in 1997
shall be applied first (A) in the case of A Term Loans, to the A Term Loan
Scheduled Repayment which is due on December 31, 1998 and (B) in the case of B
Term Loans, to the B Term Loan Scheduled Repayment which is due on December 31,
1997 and then to the B Term Loan Scheduled Repayment which is due on December
31, 1998) and (2) second, to the extent in excess thereof, to reduce the then
remaining A Term Loan Scheduled Repayments and B Term Loan Scheduled Repayments
on a pro rata basis (based upon the then remaining principal amounts of A Term
Loan Scheduled Repayments and B Term Loan Scheduled Repayments after giving
effect to all prior reductions thereto), provided that any voluntary prepayments
of Term Loans which are made with Net Equity Proceeds received by Silgan from
the sale or issuance of its capital stock or with the Retained Excess Cash Flow
Amount, may be allocated between the A Term Loans and the B Term Loans, or
applied solely to the A Term Loans or the B Term Loans, as Silgan shall
determine in its sole discretion and, to the extent allocated to any such
Tranche of Term Loans, shall be applied (1) first, to reduce the A Term Loan
Scheduled Repayment and/or the B Term Loan Scheduled Repayment, as the case may
be, which is due on December 31 of the year in which such prepayment is made (it
being understood that any such voluntary prepayments of A Term Loans or B Term
Loans which are made in 1997 shall be applied first (A) in the case of A Term
Loans, to the A Term Loan Scheduled Repayment which is due on December 31, 1998
and (B) in the case of B Term Loans, to the B Term Loan Scheduled Repayment
which is due on December 31, 1997 and then to the B Term Loan Scheduled
Repayment which is due on December 31, 1998) and (2) second, to the extent in
excess thereof, to reduce the then remaining A Term Loan Scheduled Repayments
and/or B Term Loan Scheduled Repayments, as the case may be, on a pro rata basis
(based upon the then remaining principal amount of A Term Loan Scheduled
Repayments and/or B Term Loan Scheduled Repayments, as the case may be); and (v)
each prepayment in respect of
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any Tranche of Loans shall be applied pro rata among the Banks with outstanding
Loans of such Tranche, provided that at the respective Revolving Borrower's
election in connection with any prepayment of Revolving Loans pursuant to this
Section 4.01(a), such prepayment shall not be applied to any Revolving Loan of a
Defaulting Bank.
(b) In the event of the refusal by a Bank to consent to a
proposed change, waiver, discharge or termination with respect to any of the
matters described in clauses (i) through (vi), inclusive, of the first proviso
in Section 12.12(a) which have been approved by the Required Banks, the
Borrowers shall have the right (subject to the requirements of Section
12.12(b)), upon five Business Days' prior written notice to the Administrative
Agent at the Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks) to repay all Loans, together with accrued and
unpaid interest, fees and other amounts (including, without limitation, all
obligations under Section 1.11), then owing to such Bank in accordance with said
Section 12.12(b) so long as (A) the Revolving Loan Commitment, if any, of such
Bank is terminated concurrently with such repayment pursuant to Section 3.02(b)
(at which time Schedule I shall be deemed modified to reflect the changed
Revolving Loan Commitments) and (B) the consents required by Section 12.12(b) in
connection with the repayment pursuant to this clause (b) have been obtained.
(c) Notwithstanding anything to the contrary contained in
this Section 4.01 or elsewhere in this Agreement (including, without limitation,
in Section 12.12), at any time that A Term Loans are outstanding, Silgan shall
have the option, in its sole discretion, to give the Banks with outstanding B
Terms Loans (the "B Banks") the option to waive their pro rata share of a
voluntary prepayment of B Term Loans which is to be made pursuant to Section
4.01(a) (such prepayment, a "Waivable Voluntary Prepayment") upon the terms and
provisions set forth in this Section 4.01(c). If Silgan elects to exercise the
option referred to in the immediately preceding sentence, Silgan shall give to
the Administrative Agent written notice of Silgan's intention to give the B
Banks the right to waive a Waivable Voluntary Prepayment (including in such
notice, the aggregate amount of such proposed prepayment) at least five Business
Days prior to the date of the proposed prepayment, which notice the
Administrative Agent shall promptly forward to all B Banks (indicating in such
notice the amount of such prepayment to be applied to each such B Bank's
outstanding B Term Loans). Silgan's offer to permit the B Banks to waive any
such
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Waivable Voluntary Prepayment may apply to all or part of such prepayment,
provided that any offer to waive part of such prepayment must be made ratably to
the B Banks on the basis of their outstanding B Term Loans. In the event that
any such B Bank desires to waive such B Bank's right to receive its pro rata
share of any such Waivable Voluntary Prepayment in whole or in part, such B Bank
shall so advise the Administrative Agent no later than 4:00 p.m. (New York time)
on the date which is two Business Days after the date of such notice from the
Administrative Agent, which notice shall also include the amount such B Bank
desires to receive in respect of such prepayment. If any B Bank does not reply
to the Administrative Agent within the two Business Days, such B Bank will be
deemed not to have waived any part of such prepayment. If any B Bank does not
specify an amount it wishes to receive, such B Bank will be deemed to have
accepted 100% of its share of such prepayment. In the event that any such B Bank
waives all or part of its share of any such Waivable Voluntary Prepayment, the
Administrative Agent shall apply 100% of the amount so waived by such B Bank
solely to the outstanding A Term Loans in accordance with Section 4.01(a).
4.02 Mandatory Prepayments and Commitment Reductions. (a) (i)
On any day on which the sum of (I) the aggregate outstanding principal amount of
Revolving Loans made by Non-Defaulting Banks, (II) the aggregate outstanding
principal amount of Swingline Loans and (III) the aggregate amount of Letter of
Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then
in effect, the Revolving Borrowers shall prepay on such day principal of
outstanding Swingline Loans and, after all Swingline Loans have been repaid in
full, Revolving Loans of Non-Defaulting Banks in an amount equal to such excess.
If, after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans of Non-Defaulting Banks, the aggregate amount of the Letter of
Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then
in effect, the Revolving Borrowers shall pay to the Administrative Agent at the
Payment Office on such day an amount of cash and/or Cash Equivalents equal to
the amount of such excess (up to a maximum amount equal to the Letter of Credit
Outstandings at such time), such cash or Cash Equivalents to be held as security
for all obligations of the Revolving Borrowers to the Non-Defaulting Banks
hereunder in a cash collateral account maintained by the Administrative Agent
(the "Cash Collateral Account"), provided, that such amounts shall, so long as
no Default or Event of Default then exists, be released to the Revolving
Borrowers, from time to time in the
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amount by which the Adjusted Total Revolving Loan Commitment as then in effect
exceeds the sum of (I) the aggregate outstanding principal amount of Revolving
Loans made by Non-Defaulting Banks, (II) the aggregate outstanding principal
amount of Swingline Loans and (III) the aggregate amount of the Letter of Credit
Outstandings at such time.
(ii) On any day on which the aggregate outstanding principal
amount of the Revolving Loans made by any Defaulting Bank exceeds the Revolving
Loan Commitment of such Defaulting Bank, the Revolving Borrowers shall repay on
such day principal of Revolving Loans of such Defaulting Bank in an amount equal
to such excess.
(b) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, Silgan shall be required to repay that principal amount of A Term Loans,
to the extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced in amount as provided in Section 4.01(a)
and Section 4.02(j), an "A Term Loan Scheduled Repayment"):
A Term Loan
Scheduled Repayment Date Amount
------------------------ ------
December 31, 1998 $25,000,000
December 31, 1999 $30,000,000
December 31, 2000 $35,000,000
December 31, 2001 $40,000,000
December 31, 2002 $55,000,000
December 31, 2003 $65,000,000
(c) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, Silgan shall be required to repay that principal amount of B Term Loans,
to the extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced in amount as provided in Section 4.01(a)
and Section 4.02(j), a "B Term Loan Scheduled Repayment"):
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B Term Loan
Scheduled Repayment Date Amount
------------------------ ------
December 31, 1997 $ 1,000,000
December 31, 1998 $ 2,000,000
December 31, 1999 $ 2,000,000
December 31, 2000 $ 2,000,000
December 31, 2001 $ 2,000,000
December 31, 2002 $ 2,000,000
December 31, 2003 $ 2,000,000
December 31, 2004 $ 2,000,000
June 30, 2005 $185,000,000
(d) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each Excess Cash Payment
Date, an amount equal to 50% of Excess Cash Flow for the relevant Excess Cash
Payment Period shall be applied as a mandatory repayment and/or commitment
reduction in accordance with the requirements of Section 4.02(j), provided,
however, that no such mandatory repayment or commitment reduction shall be
required on any Excess Cash Payment Date to the extent that (i) no Default or
Event of Default then exists and (ii) the Leverage Ratio as of the last day of
the relevant Excess Cash Payment Period is less than or equal to 3.50:1.00.
(e) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date on or after
the Initial Borrowing Date upon which Silgan or any of its Subsidiaries receives
any cash proceeds from any Asset Sale, an amount equal to 100% of the Net Sale
Proceeds therefrom shall be applied on such date as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Section 4.02(j);
provided, however, (x) except as provided in clause (y) below, such Net Sale
Proceeds shall not be required to be so applied on such date so long as no
Default or Event of Default then exists and such Net Sale Proceeds shall be used
to purchase assets (other than current assets) used or to be used in the
businesses of Silgan and its Subsidiaries as are permitted by Section 8.14
within 12 months following the date of such Asset Sale, and provided further,
that if all or any portion of such Net Sale Proceeds not required to be so
applied as a mandatory repayment and/or commitment reduction as provided above
are not so reinvested within such 12 month period, such remaining portion shall
be applied on the last day of such 12 month period as a mandatory repayment
and/or commitment reduction in accordance with the requirements of Section
4.02(j) and (y) if the cash proceeds from any Asset Sale, or
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series of related Asset Sales in any 12 month period, in either case equals or
exceeds $50,000,000, then 100% of the Net Sale Proceeds therefrom shall be
applied on the date of receipt thereof as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Section 4.02(j).
(f) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 10 days following
each date on or after the Initial Borrowing Date upon which Silgan or any of its
Subsidiaries receives any cash proceeds from any Recovery Event, an amount equal
to 100% of the Net Insurance Proceeds from such Recovery Event shall be applied
as a mandatory repayment and/or commitment reduction in accordance with the
requirements of Section 4.02(j); provided, however, that so long as no Default
or Event of Default then exists and such proceeds do not exceed $25,000,000,
such proceeds shall not be required to be so applied on such date to the extent
that such proceeds shall be used to replace or restore any properties or assets
in respect of which such proceeds were paid within 12 months following the date
of the receipt of such proceeds (or to reimburse Silgan or any such Subsidiary
on the date of receipt of such proceeds for amounts theretofore expended by
Silgan or such Subsidiary to replace or restore any such properties or assets),
and provided further, that (i) if the amount of such proceeds exceeds
$25,000,000, then only the portion of such proceeds in excess of $25,000,000
shall be applied as a mandatory repayment and/or commitment reduction in
accordance with the requirements of Section 4.02(j) and (ii) if all or any
portion of such proceeds not required to be so applied as a mandatory repayment
and/or commitment reduction as provided above are not so used within 12 months
after the date of the receipt of such proceeds, such remaining portion shall be
applied on the last day of such 12 month period as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Section 4.02(j).
(g) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date on or after
the Initial Borrowing Date upon which Silgan or any of its Subsidiaries receives
any cash proceeds from any incurrence by Silgan or any of its Subsidiaries of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 8.04 (other than pursuant to clause
(xiv) thereof in respect of any term loans incurred under the Canadian Credit
Facility) as such Section is in effect on the Effective
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Date), an amount equal to 100% of the Net Debt Proceeds of the respective
incurrence of Indebtedness shall be applied on such date as a mandatory
repayment and/or commitment reduction in accordance with the requirements of
Section 4.02(j).
(h) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, (i) on the date on which
Silgan or any of its Subsidiaries receives any cash proceeds from the initial
sale of accounts receivable pursuant to the Accounts Receivables Facility, 75%
of the cash proceeds therefrom (net of underwriting discounts and commissions
and other reasonable costs associated therewith) to the extent that such
proceeds relate to a fixed amount of funded principal shall be applied on such
date as a mandatory repayment and/or commitment reduction in accordance with the
requirements of Section 4.02(j) and (ii) on each date thereafter on which the
fixed amount of funded principal under the Accounts Receivable Facility is
increased, 75% of the cash proceeds from such increased amount (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) shall be applied on each such date as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Section 4.02(j).
(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date on or after
the Initial Borrowing Date upon which Silgan or any of its Subsidiaries receives
any cash proceeds from a sale and leaseback transaction for any asset or
property of Silgan or any of its Subsidiaries, an amount equal to 75% of the Net
Sale Proceeds therefrom shall be applied on such date as a mandatory repayment
and/or commitment reduction in accordance with the requirements of Section
4.02(j); provided, however, (x) with respect to the first $10,000,000 in the
aggregate of such proceeds in any fiscal year of Silgan, none of such Net Sale
Proceeds shall be required to be so applied as provided above so long as no
Default or Event of Default then exists and (y) to the extent that any such sale
and leaseback transaction constitutes an "Asset Sale" under, and as defined in,
the Subordinated Exchange Debenture Indenture, the 9% Senior Subordinated
Debenture Indenture or any Refinancing Subordinated Indebtedness Documents, 100%
of the Net Sale Proceeds therefrom either shall be applied as a mandatory
repayment and/or commitment in accordance with the requirements of Section
4.02(j) and/or reinvested in assets (other than current assets) used or to be
used in the businesses of
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Silgan and its Subsidiaries as are permitted by Section 8.14 within 12 months
following the date of such sale and leaseback transaction, and to the extent
that all or any portion of such Net Sale Proceeds that have not been applied as
a mandatory repayment and/or commitment reduction as provided above are not so
reinvested within such 12 month period, such remaining portion shall be applied
on the last day of such 12 month period as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Section 4.02(j).
(j) Any amount required to be applied pursuant to this
Section 4.02(j) shall be applied (i) first, as a mandatory repayment of the then
outstanding principal amount of Term Loans and (ii) second, to the extent in
excess of the amount required to be applied pursuant to the preceding clause
(i), as a mandatory reduction to the Total Revolving Loan Commitment. The amount
to be applied to repay principal of outstanding Term Loans shall, except as
provided in the proviso below, be allocated among the A Term Loans and the B
Term Loans on a pro rata basis (based upon the relative outstanding principal
amounts of A Term Loans and B Term Loans), and with the amount allocated to each
such Tranche of Term Loans to be applied (1) first, to reduce the A Term Loan
Scheduled Repayment and the B Term Loan Scheduled Repayment which is due on
December 31 of the year in which such repayment is made (it being understood
that any mandatory repayments of A Term Loans or B Term Loans which are required
to be applied pursuant to this Section 4.02(j) in 1997 shall be applied first
(A) in the case of A Term Loans, to the A Term Loan Scheduled Repayment which is
due on December 31, 1998 and (B) in the case of B Term Loans, to the B Term Loan
Scheduled Repayment which is due on December 31, 1997 and then to the B Term
Loan Scheduled Repayment which is due on December 31, 1998) and (2) second, to
the extent in excess thereof, to reduce the then remaining A Term Loan Scheduled
Repayments and B Term Loan Scheduled Repayments on a pro rata basis (based upon
the then remaining principal amounts of A Term Loan Scheduled Repayments and B
Term Loan Scheduled Repayments after giving effect to all prior reductions
thereto), provided, however, that with respect to any mandatory repayment of
Term Loans pursuant to Section 4.02(g) with proceeds of term loans incurred
under the Canadian Credit Facility, such proceeds shall be applied (1) first, to
repay outstanding A Term Loans as provided above in this Section 4.02(j) and (2)
second, to the extent in excess thereof, to repay outstanding B Term Loans as
provided above in this Section 4.02(j).
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(k) Notwithstanding anything to the contrary contained in
this Section 4.02 or elsewhere in this Agreement (including, without limitation,
in Section 12.12), at any time that A Term Loans are outstanding, Silgan shall
have the option, in its sole discretion, to give the B Banks the option to waive
their pro rata share of a mandatory repayment of B Term Loans which is to be
made pursuant to Section 4.02(d), (e), (f), (g), (h) and/or (i) (each such
repayment, a "Waivable Mandatory Repayment") upon the terms and provisions set
forth in this Section 4.02(k). If Silgan elects to exercise the option referred
to in the immediately preceding sentence, Silgan shall give to the
Administrative Agent written notice of Silgan's intention to give the B Banks
the right to waive a Waivable Mandatory Repayment (including in such notice, the
aggregate amount of such proposed repayment) at least five Business Days prior
to the date of the proposed repayment, which notice the Administrative Agent
shall promptly forward to all B Banks (indicating in such notice the amount of
such repayment to be applied to each such B Bank's outstanding B Term Loans).
Silgan's offer to permit the B Banks to waive any such Waivable Mandatory
Repayment may apply to all or part of such repayment, provided that any offer to
waive part of such repayment must be made ratably to the B Banks on the basis of
their outstanding B Term Loans. In the event that any such B Bank desires to
waive its pro rata share of such B Bank's right to receive any such Waivable
Mandatory Repayment in whole or in part, such B Bank shall so advise the
Administrative Agent no later than 4:00 P.M. (New York time) on the date which
is two Business Days after the date of such notice from the Administrative
Agent, which notice shall also include the amount such B Bank desires to receive
in respect of such repayment. If any B Bank does not reply to the Administrative
Agent within the two Business Days, such B Bank will be deemed not to have
waived any part of such repayment. If any B Bank does not specify an amount it
wishes to receive, such B Bank will be deemed to have accepted 100% of its share
of such repayment. In the event that any such B Bank waives all or part of its
share of any such Waivable Mandatory Repayment, the Administrative Agent shall
apply 100% of the amount so waived by such B Bank to the outstanding A Term
Loans in accordance with Section 4.02(j).
(l) On the 30th day preceding February 15 of each year
(commencing on the 30th day preceding February 15, 1998), if a Clean-Down Period
shall not have occurred since the eleven month period ending on January 16 of
such year, the Revolving Borrowers shall repay outstanding Swingline
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Loans and/or Revolving Loans in an amount necessary to cause the average Total
Unutilized Revolving Loan Commitment to be equal to or greater than $125,000,000
for an entire Clean-Down Period which shall begin (or continue in existence, as
the case may be) on or from such date and shall continue until a Clean-Down
Period has occurred.
(m) With respect to each repayment of any Tranche of Loans
required by this Section 4.02, the respective Borrower may designate the Types
of Loans which are to be repaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, provided that: (i)
repayments of Eurodollar Loans made pursuant to this Section 4.02 may only be
made on the last day of an Interest Period applicable thereto unless all such
Eurodollar Loans of the respective Tranche with Interest Periods ending on such
date of required repayment and all Base Rate Loans of the respective Tranche
have been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto
such Borrowing shall be converted at the end of the then current Interest Period
into a Borrowing of Base Rate Loans; and (iii) except for the differing
treatments of Defaulting Banks and Non-Defaulting Banks as expressly provided in
Section 4.02(a), each repayment of any Tranche of Loans shall be applied pro
rata among the Banks with outstanding Loans of such Tranche. In the absence of a
designation by the respective Borrower as described in the preceding sentence,
the Administrative Agent shall, subject to the above, make such designation in
its sole discretion.
(n) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (i) all then outstanding Loans of a respective
Tranche shall be repaid in full on the respective Maturity Date for such Tranche
of Loans and (ii) in the event that any Revolving Borrower is sold pursuant to
the terms of this Agreement, all Revolving Loans and Swingline Loans incurred by
such Revolving Borrower and outstanding at such time shall be repaid in full at
the time of such sale and all Letters of Credit issued for the account of such
Revolving Borrower and outstanding at such time shall be cash collateralized in
the Cash Collateral Account.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the
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Administrative Agent for the account of the Bank or Banks entitled thereto not
later than 12:00 Noon (New York time) on the date when due and shall be made in
Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 Net Payments. (a) All payments made by each Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or profits of a Bank pursuant to the
laws of the jurisdiction in which it is organized or in which the principal
office or applicable lending office of such Bank is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities with
respect thereto (collectively, "Taxes"). If any Taxes are so levied or imposed,
such Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such Note.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, then such Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income or
profits of such Bank pursuant to the laws of the jurisdiction in which it is
organized or in which the principal office or applicable lending office of such
Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction and for any withholding of income or similar
taxes imposed by the United States as such Bank shall determine are payable by,
or withheld from, such Bank in respect of such amounts so paid to or on behalf
of such Bank pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Bank pursuant to this sentence. Each Borrower will
furnish to the Administrative Agent within 45 days after the
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date the payment of any Taxes is due pursuant to applicable law certified copies
of tax receipts evidencing such payment by such Borrower. Each Borrower agrees
to indemnify and hold harmless each Bank, and to reimburse such Bank upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Bank.
(b) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to each Borrower and the Administrative Agent on or
prior to the Effective Date, or in the case of a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or 12.04
(unless the respective Bank was already a Bank hereunder immediately prior to
such assignment or transfer), on the date of such assignment or transfer, (i)
two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or Form 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note or (ii)
if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 4224 or 1001
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit D (any such certificate, a "Section 4.04(b)(ii) Certificate") and (y)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8 (or successor form) certifying to such Bank's entitlement to a complete
exemption from U.S. withholding tax under the provisions of Section 881(c) of
the Code with respect to payments to be made under this Agreement and under any
Note. In addition, each Bank agrees that from time to time after the Effective
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, such Bank will
deliver to each Borrower and the Administrative Agent two new accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or successor forms), or Form W-8 (or successor form) and a Section 4.04(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Bank to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify each
Borrower and the Administrative Agent of its inability to deliver any such Form
or Certificate. Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to Section 12.04(b) and the immediately succeeding
sentence, each
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Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder (without any obligation to pay the
respective Bank additional amounts with respect thereto) for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes and which has not
provided to such Borrower such forms required to be provided to such Borrower
pursuant to the first sentence of this Section 4.04(b) (or to the extent such
forms do not establish a complete exemption from such withholding).
Notwithstanding anything to the contrary contained in the preceding sentence and
except as set forth in Section 12.04(b), each Borrower agrees to indemnify each
Bank in the manner set forth in Section 4.04(a) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.
Section 5. Conditions Precedent.
5.01 Conditions to Loans on the Initial Borrowing Date. The
obligation of each Bank to make Loans, and the obligation of BTCo to issue
Letters of Credit, in each case on the Initial Borrowing Date is subject at the
time of the making of such Loans or the issuance of such Letters of Credit to
the satisfaction of the following conditions:
(a) Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii)
there shall have been delivered to the Administrative Agent for the
account of each of the Banks the appropriate A Term Note, B Term Note
and/or Revolving Note executed by the appropriate Borrower, and to BTCo
the appropriate Swingline Notes executed by the appropriate Borrower,
in each case in the amount, maturity and as otherwise provided herein.
(b) Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate dated the
Initial Borrowing Date signed by the President or any Vice President of
Silgan stating that all of the applicable conditions in Sections
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5.01(f), (k), (l) and (m) and 5.02 have been satisfied on such date.
(c) Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received (i) from Frank Hogan, Esq.,
General Counsel to Silgan, an opinion addressed to the Administrative
Agent, the Co-Arrangers and each of the Banks and dated the Initial
Borrowing Date covering the matters set forth in Exhibit E-1 and such
other matters incident to the transactions contemplated herein as the
Co-Arrangers may reasonably request, (ii) from Winthrop, Stimson,
Putnam & Roberts, counsel to the Borrowers, an opinion addressed to the
Administrative Agent, the Co-Arrangers and each of the Banks and dated
the Initial Borrowing Date covering the matters set forth in Exhibit
E-2 and such other matters incident to the transactions contemplated
herein as the Co-Arrangers may reasonably request and (iii) from local
counsel reasonably satisfactory to the Co-Arrangers, opinions each of
which shall be in form and substance reasonably satisfactory to the
Co-Arrangers and shall cover the perfection of the security interests
granted pursuant to the Security Documents and such other matters
incident to the transactions contemplated herein as the Co-Arrangers
may reasonably request.
(d) Corporate Documents; Proceedings. (i) On the Initial
Borrowing Date, the Administrative Agent shall have received a
certificate, dated the Initial Borrowing Date, signed by the President
or any Vice President of each Credit Party, and attested to by the
Secretary or any Assistant Secretary of such Credit Party, in the form
of Exhibit F with appropriate insertions, together with copies of the
Certificate of Incorporation and ByLaws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and
the foregoing shall be reasonably acceptable to the Co-Arrangers.
(ii) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be reasonably
satisfactory in form and substance to the Co-Arrangers and the Required
Banks, and the Administrative Agent shall have received all information
and copies of all documents and papers, including records of corporate
proceedings, governmental approvals, good standing certificates and
bring-down telegrams, if any, which the Co-Arrangers
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reasonably may have requested in connection therewith, such documents
and papers where appropriate to be certified by proper corporate or
governmental authorities.
(e) Management Agreements; Debt Agreements. On the Initial
Borrowing Date, there shall have been delivered to the Administrative
Agent true and correct copies, certified as true and complete by an
appropriate officer of Silgan of (i) all agreements with members of, or
with respect to, the management of Silgan or any of its Subsidiaries
(collectively, the "Management Agreements") and (ii) the Subordinated
Exchange Debenture Indenture and the 9% Senior Subordinated Debenture
Indenture (in each case together with all amendments thereto).
(f) Repayment and Termination of Commitments under the
Existing Credit Agreement. On the Initial Borrowing Date and
concurrently with the incurrence of Term Loans and Revolving Loans on
such date, the total commitments under the Existing Credit Agreement
shall have been terminated, and all loans thereunder shall have been
repaid in cash in full, together with all accrued interest and fees
thereon, all letters of credit (other than the Existing Letters of
Credit, if any) issued thereunder shall have been terminated, and all
other amounts owing pursuant to the Existing Credit Agreement shall
have been repaid in full. The Administrative Agent shall have received
evidence in form, scope and substance reasonably satisfactory to it
that the matters set forth in this Section 5.01(f) have been satisfied
on such date.
(g) Borrowers/Subsidiaries Guaranty. On the Initial Borrowing
Date, each Credit Party shall have duly authorized, executed and
delivered a Borrowers/Subsidiaries Guaranty in the form of Exhibit G
(as modified, supplemented or amended from time to time, the
"Borrowers/Subsidiaries Guaranty"), and the Borrowers/Subsidiaries
Guaranty shall be in full force and effect.
(h) Pledge Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered a
Pledge Agreement in the form of Exhibit H (as modified, supplemented or
amended from time to time, the "Pledge Agreement") and shall have
delivered to the Collateral Agent, as pledgee
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thereunder, all of the Pledged Securities, if any, referred to therein
and owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with
executed and undated stock powers in the case of capital stock
constituting Pledged Securities, and the Pledge Agreement shall be in
full force and effect.
(i) Security Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered a
Security Agreement in the form of Exhibit I (as modified, supplemented
or amended from time to time the "Security Agreement") covering all of
such Credit Party's present and future Security Agreement Collateral,
together with:
(1) proper Financing Statements (Form UCC-1 or the
appropriate equivalent) fully executed for filing under the
UCC of each jurisdiction as may be necessary or, in the
opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the Security
Agreement;
(2) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, listing all
effective Financing Statements that name Silgan and its
Subsidiaries, in each case as debtor and that are filed in the
jurisdictions referred to in clause (1) above, together with
copies of such other Financing Statements that name Silgan or
any of its Subsidiaries as debtor (none of which shall cover
the Security Agreement Collateral except to the extent
evidencing Permitted Liens);
(3) evidence of the completion of all other
recordings and filings of, or with respect to, the Security
Agreement as may be necessary or, in the reasonable opinion of
the Collateral Agent, desirable to perfect the security
interests purported to be created by the Security Agreement;
and
(4) evidence that all other actions necessary or, in
the reasonable opinion of the Collateral Agent, desirable to
perfect and protect the security interests purported to be
created by the Security Agreement have been taken;
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and the Security Agreement shall be in full force and effect.
(j) Mortgages; Title Insurance; Surveys, etc. On the Initial
Borrowing Date, the Collateral Agent also shall have received:
(x) fully executed counterparts of Mortgages (or,
with the consent of the Administrative Agent with respect to
certain of the Existing Mortgages, mortgage amendments to such
Existing Mortgages) covering such of the Real Property owned
or leased by any Credit Party as shall be designated as such
on Schedule III, together with evidence that counterparts of
the Mortgages (or mortgage amendments, as the case may be)
have been delivered to the title insurance company insuring
the Lien of the Mortgages for recording in all places to the
extent necessary or desirable, in the reasonable judgment of
the Collateral Agent, effectively to create a valid and
enforceable first priority mortgage Lien (subject to Permitted
Encumbrances relating thereto) on each Mortgaged Property in
favor of the Collateral Agent (or such other trustee as may be
required or desired under local law) for the benefit of the
Secured Creditors;
(y) Mortgage Policies on each Mortgaged Property (or,
with respect to the Existing Mortgages for which mortgage
amendments are delivered, endorsements to the existing
Mortgage Policies) issued by title insurers reasonably
satisfactory to the Collateral Agent in amounts reasonably
satisfactory to the Collateral Agent and assuring the
Collateral Agent that the Mortgages are valid and enforceable
first priority mortgage Liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances and such Mortgage Policies shall
otherwise be in form and substance reasonably satisfactory to
the Collateral Agent and shall include, as appropriate, an
endorsement for future advances under this Agreement and the
Notes and for any other matter that the Collateral Agent in
its reasonable discretion may reasonably request, shall not
include an exception for mechanics' liens, and shall provide
for affirmative insurance
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and such reinsurance as the Collateral Agent in its reasonable
discretion may request; and
(z) a survey, in form and substance reasonably
satisfactory to the Collateral Agent, of each owned Mortgaged
Property, certified by a licensed professional surveyor
reasonably satisfactory to the Collateral Agent (or, in the
case of a Mortgaged Property subject to an Existing Mortgage,
a certificate of an authorized officer of the respective
Credit Party certifying that there have been no material
changes to such Mortgaged Property since the date of the last
survey thereof).
(k) Adverse Change, etc. (i) Since December 31, 1996, nothing
shall have occurred (and neither the Co-Arrangers nor the Banks shall
have become aware of any facts or conditions not previously known)
which the Co-Arrangers or the Required Banks shall determine has, or
could reasonably be expected to have, a material adverse effect on the
rights or remedies of the Administrative Agent, the Co-Arrangers or the
Banks, or on the ability of any Credit Party to perform its obligations
to the Administrative Agent, the Co-Arrangers and the Banks or which
has, or could reasonably be expected to have, a materially adverse
effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of Silgan and its Subsidiaries
taken as a whole.
(ii) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and material third party approvals
and/or consents in connection with the transactions contemplated by the
Credit Documents and otherwise referred to herein or therein shall have
been obtained and remain in effect, and all applicable waiting periods
shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the transactions contemplated by
the Credit Documents and otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief
or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the consummation of the transactions
contemplated by the Credit Documents, the
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making of the Loans or issuance of any Letters of Credit.
(iii) No consents or approvals shall be required to be
obtained by Silgan from the holders of the Subordinated Exchange
Debentures or the 9% Senior Subordinated Debentures in connection with
the entering into of this Agreement or any of the other documents
referred herein (including, without limitation, any of the Security
Documents) and the incurrence of all Loans hereunder. The full amount
of the Loans may be incurred under the Subordinated Exchange Debentures
and the 9% Senior Subordinated Debentures, and all Obligations incurred
hereunder and under the other Credit Documents constitute "senior
indebtedness" for purposes of the Subordinated Exchange Debentures and
the 9% Senior Subordinated Debentures. The Co-Arrangers shall have
received evidence (including appropriate legal opinions and a
certificate of the chief financial officer of Silgan) in form, scope
and substance reasonably satisfactory to them that the matters set
forth in this clause (iii) have been satisfied.
(l) Litigation. On the Initial Borrowing Date, no litigation
by any entity (private or governmental) shall be pending or threatened
with respect to this Agreement or any documentation executed in
connection herewith or the transactions contemplated hereby or which
the Co-Arrangers or the Required Banks shall determine could reasonably
be expected to have a materially adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or
prospects of Silgan and its Subsidiaries taken as a whole.
(m) Fees, etc. On the Initial Borrowing Date, each Borrower
shall have paid to the Administrative Agent, the Co-Arrangers and the
Banks all costs, fees and expenses (including, without limitation,
legal fees and expenses) payable to the Administrative Agent, the
Co-Arrangers and the Banks to the extent then due.
(n) Notices to Holders of Certain Indebtedness. (i) On the
Initial Borrowing Date, Silgan shall have delivered to the trustee
under the Subordinated Exchange Debenture Indenture, notice to the
effect that this Agreement (and only this Agreement) constitutes the
"Silgan Credit Agreement" (as defined in the Subordinated Exchange
Debenture Indenture), and Silgan shall have taken all other action as
may be necessary
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or, in the reasonable opinion of the Co-Arrangers desirable, to ensure
that this Agreement is entitled to all the rights and benefits afforded
the "Silgan Credit Agreement" under the Subordinated Exchange Debenture
Indenture.
(ii) On the Initial Borrowing Date, Silgan shall have
delivered to the Administrative Agent evidence in form, scope and
substance reasonably satisfactory to the Co-Arrangers that the matters
set forth in this Section 5.01(n) have been satisfied as of such date.
(o) Financial Projections; Pro Forma Balance Sheet. On or
prior to the Initial Borrowing Date, there shall have been delivered to
each Co-Arranger (i) detailed projected financial statements for Silgan
and its Subsidiaries for the period through December 31, 2005 (the
"Projections"), which Projections shall reflect the forecasted
financial condition and results of operations of Silgan and its
Subsidiaries after giving effect to the transactions contemplated
hereby and (ii) an estimated consolidated balance sheet as of June 30,
1997 of Silgan and its Subsidiaries after giving effect to the
transactions contemplated hereby, which Projections and balance sheet
shall be in form and substance reasonably satisfactory to the
Co-Arrangers and the Required Banks. There are no statements or
conclusions in any of the Projections which are based upon or include
information known to any Borrower to be misleading in any material
respect or which fail to take into account material information
regarding the matters reported therein. On the Initial Borrowing Date,
each Borrower believes that the Projections were reasonable and
attainable, it being recognized, however, that projections as to future
events are not to be viewed as facts and that actual results during the
period or periods covered thereby may differ from the projected results
and that the differences may be material.
(p) Insurance. On the Initial Borrowing Date, Silgan shall
have delivered to the Administrative Agent certificates from the
respective insurer with respect to each insurance policy listed in
Schedule IV, which certificates shall name the Collateral Agent as an
additional insured and/or loss payee and shall state that such
insurance shall not be cancelled without at least 30 days' prior
written notice by the respective insurer to the Collateral Agent.
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5.02 Conditions to All Credit Events. The obligation of each
Bank to make any Loans (including, without limitation, Loans made on the Initial
Borrowing Date), and of BTCo to issue any Letters of Credit, is subject at the
time of each such Credit Event, to the satisfaction of the following conditions:
(a) No Default. There shall exist no Default or Event of
Default.
(b) Representations and Warranties. All representations and
warranties contained herein and in the other Credit Documents shall be
true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of
the date of such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects
only as of such specified date).
(c) Notice of Borrowing; Letter of Credit Request. Prior to
the making of any Loan (other than a Swingline Loan or a Revolving Loan
made pursuant to a Mandatory Borrowing), the Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of Section
1.03(a). Prior to the making of any Swingline Loan, BTCo shall have
received the notice required by Section 1.03(b)(i). Prior to the
issuance of any Letter of Credit (other than the Existing Letters of
Credit), the Administrative Agent and BTCo shall have received a Letter
of Credit request meeting the requirements of Section 2.03.
The acceptance of the benefits of each Credit Event (and the occurrence of the
Initial Borrowing Date) shall constitute a representation and warranty by each
of the Borrowers to each of the Banks that all the applicable conditions
specified in this Section 5 are satisfied as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in this
Section 5, unless otherwise specified, shall be delivered to the Administrative
Agent at the Notice Office for the account of each of the Banks and, except for
the Notes, in sufficient counterparts or copies for each of the Banks and shall
be satisfactory in form and substance to the Required Banks.
5.03 Revolving Borrowers, etc. At any time that Silgan desires
that an additional Wholly-Owned Domestic
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Subsidiary of Silgan become a Revolving Borrower hereunder, such Revolving
Borrower shall satisfy the following conditions at the time it becomes a
Revolving Borrower:
(i) the consent of the Administrative Agent shall have
been obtained (which consent shall not be unreasonably withheld or
delayed);
(ii) such Revolving Borrower shall have executed and
delivered Revolving Notes and Swingline Notes satisfying the conditions
set forth in Section 1.05;
(iii) such Revolving Borrower shall have executed and
delivered an Election to Become a Revolving Borrower in the form of
Exhibit J, which shall be in full force and effect; and
(iv) to the extent any of the documents, writings, records,
instruments, consents and opinions that would have been required by
Sections 5.01(c) and (d) if such Revolving Borrower had been subject
thereto on the Initial Borrowing Date had not been heretofore
delivered, such items shall have been delivered to, and shall be
reasonably satisfactory to, the Administrative Agent.
Section 6. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans and
issue or participate in Letters of Credit, each of the Borrowers makes the
following representations, warranties and agreements, in each case after giving
effect to the refinancing of the Existing Credit Agreement, all of which shall
survive the execution and delivery of this Agreement and the Notes and the
making of the Loans and the issuance of the Letters of Credit, with the
occurrence of each Credit Event on and after the Initial Borrowing Date being
deemed to constitute a representation and warranty that the matters specified in
this Section 6 are true and correct in all material respects on and as of the
Initial Borrowing Date and on the date of each such Credit Event (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date); provided, that each Revolving
Borrower makes the following representations, warranties and agreements only as
to itself and its Subsidiaries:
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6.01 Corporate Status. Each Credit Party and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified as a foreign corporation and in good standing in each
jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification, except in those
jurisdictions where the failure to be so qualified could not reasonably be
expected to, individually or in the aggregate, have a material adverse effect on
the business, operations, property, assets or condition (financial or otherwise)
of Silgan and its Subsidiaries taken as a whole.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of each of the Credit Documents to which it is party and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of each of such Credit Documents. Each Credit Party has duly
executed and delivered each of the Credit Documents to which it is party and
each of such Credit Documents constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, except to the extent that
the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by equity principles (regardless of whether enforcement is sought in equity or
at law).
6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of any Credit Document to which it is a party,
nor compliance by it with any of the terms and provisions thereof, (i) will
contravene any provision of any law, statute, rule or regulation or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict or be inconsistent with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the property or
assets of such Credit Party or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement, contract or instrument to which such Credit Party or any of its
Subsidiaries is a party or by which it or any of its property or
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assets is bound or to which it may be subject or (iii) will violate any
provision of the certificate of incorporation or by-laws (or equivalent
organizational documents) of such Credit Party or any of its Subsidiaries.
6.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made and except for any filings of
financing statements, mortgages and other documents required by the Security
Documents, all of which have been made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Credit Document or (ii) the legality, validity, binding effect or
enforceability of any such Credit Document.
6.05 Pledge Agreements. The security interests created in
favor of the Collateral Agent for the benefit of the Secured Creditors under the
Pledge Agreement constitute first priority perfected security interests in the
Pledge Agreement Collateral subject to no Lien of any other Person. No consents,
filings or recordings are required in order to perfect, and/or maintain the
perfection and priority of, the security interests purported to be created by
the Pledge Agreement.
6.06 Security Agreement; Mortgages; Real Property. (a) The
Security Agreement creates, in favor of the Collateral Agent for the benefit of
the Secured Creditors, a valid and enforceable perfected security interest in
and Lien on all of the Security Agreement Collateral referred to therein, as may
be perfected by the filing of financing statements or by the taking of
possession by the Collateral Agent, superior to and prior to the rights and
Liens of all third Persons and subject to no other Liens other than Permitted
Liens. Except as have been obtained or made, no consents, filings or recordings
are required to maintain the perfection and priority of the security interests
purported to be created by the Security Agreement. At the time of the granting
of any security interests pursuant to the Security Agreement, the respective
Credit Party thereunder shall have good and marketable title to all Security
Agreement Collateral referred to therein free and clear of all Liens except
those described above in this Section 6.06.
(b) The Mortgages create a valid and enforceable perfected
security interest in and Lien on all of the respective Mortgaged Properties, in
favor of the Collateral
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Agent for the benefit of the Secured Creditors, superior to and prior to the
rights and Liens of all third Persons and subject to no other Liens other than
Permitted Encumbrances. No consents, filings or recordings are required to
maintain the perfection and priority of the security interests purported to be
created by the Mortgages, except for the filings and recordings of the Mortgages
(or mortgage amendments, as the case may be). At the time of the granting of any
Mortgage, the respective mortgagor shall have good and marketable title (subject
to the respective Permitted Encumbrances) to all Mortgaged Properties covered
thereby, free and clear of Liens except those described in the second preceding
sentence. Schedule III sets forth all Real Property owned and leased
(beneficially or otherwise) by each Credit Party (all as indicated therein) on
the Initial Borrowing Date.
(c) The Additional Security Documents, after the execution
and delivery thereof, will create, in favor of the Collateral Agent for the
benefit of the Secured Creditors, a valid and enforceable perfected security
interest in and Lien on all of the Additional Collateral, superior to and prior
to the rights and Liens of all third Persons and subject to no other Liens other
than Permitted Liens existing on the date of execution of such Additional
Security Documents. The respective Credit Party will have good and marketable
title to the respective Additional Collateral, free and clear of all Liens,
except those described in the preceding sentence.
6.07 Financial Statements; Financial Condition; etc. (a) The
statements of consolidated and consolidating financial condition of Silgan and
its Subsidiaries at December 31, 1996 and March 31, 1997 and the related
consolidated and consolidating statements of income and cash flow of Silgan and
its Subsidiaries for the fiscal year and three-month period ended on such date,
as the case may be (which (x) in the case of the financial statements for the
fiscal year ended on December 31, 1996, have been certified by nationally
recognized independent certified public accountants satisfactory to the
Co-Arrangers and (y) in the case of all such financial statements, have
heretofore been furnished to the Banks), present fairly the financial position
of Silgan and its Subsidiaries at the date of such statements and for the
periods covered thereby and have been prepared in accordance with generally
accepted accounting principles and practices consistently applied. Since
December 31, 1996, there has been no material adverse change in the operations,
business, property, assets or condition
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(financial or otherwise) of Silgan and its Subsidiaries taken as a whole.
(b) On the Initial Borrowing Date and after giving effect to
the transactions and financings contemplated hereby, (i) the sum of the assets
of each of Silgan and its Subsidiaries (taken as a whole) and each Borrower (on
a stand alone basis), at a fair valuation, will exceed its respective
liabilities, including contingent liabilities, (ii) each of Silgan and its
Subsidiaries (taken as a whole) and each Borrower (on a stand alone basis) will
have sufficient capital with which to conduct its respective businesses and
(iii) each of Silgan and its Subsidiaries (taken as a whole) and each Borrower
(on a stand alone basis) will not have incurred debts, and does not intend to
incur debts, beyond its ability to pay such debts as they mature. For purposes
of this Section 6.07(b), "debt" means any liability on a claim, and "claim"
means (x) any right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, or (y) any right
to an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) Except as fully disclosed in the financial statements
delivered pursuant to clause (ii) of the first sentence of Section 5.01(o) and
pursuant to Section 6.07(a), there were as of the Initial Borrowing Date no
liabilities or obligations with respect to Silgan or any of its Subsidiaries of
any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due), which, either individually or in the aggregate, would be
material to Silgan and its Subsidiaries taken as a whole. As of the Initial
Borrowing Date, each Borrower knows of no Material Loss Contingency (as defined
in Statements of Financial Accounting Standards No. 5) as to Silgan and its
Subsidiaries taken as a whole.
6.08 Litigation. There are no actions, suits, investigations
or proceedings pending or, to the best of the knowledge of any Borrower,
threatened (i) with respect to any Credit Document or (ii) that are reasonably
likely to materially and adversely affect the business, operations, property,
assets or condition (financial or otherwise) of Silgan and its Subsidiaries
taken as a whole.
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6.09 True and Complete Disclosure. To the best of each
Borrower's knowledge after due inquiry, this Agreement and all other written
information furnished to the Banks by or on behalf of the Borrowers in
connection herewith did not taken as a whole contain any untrue statement of
material fact or omit to state a material fact necessary in order to make the
information contained herein and therein not misleading.
6.10 Use of Proceeds; Margin Regulations. (a) All proceeds of
the Term Loans shall be used (i) to finance the repayment of amounts owing
pursuant to the Existing Credit Agreement and (ii) to pay the fees and expenses
incurred in connection with the transactions contemplated hereby.
(b) The proceeds of all Revolving Loans and Swingline Loans
incurred by each Revolving Borrower shall be utilized (i) (x) to finance the
repayment of amounts owing pursuant to the Existing Credit Agreement and (y) to
pay the fees and expenses incurred in connection with the transactions
contemplated hereby and (ii) for such Revolving Borrower's general corporate and
working capital purposes and for the general corporate and working capital
purposes of its respective Subsidiaries, including the payment of Dividends, the
repayment of certain Indebtedness, the financing of Permitted Acquisitions and
the making of Investments, in each case to the extent and for the purposes
permitted herein.
(c) No part of any Credit Event (or the proceeds thereof)
will be used by any Borrower or any Subsidiary thereof to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock except to the extent permitted by Section 8.03(iv).
The value of all Margin Stock at any time owned by Silgan and its Subsidiaries
does not, and will not, exceed 25% of the value of the assets of Silgan and its
Subsidiaries taken as a whole. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
6.11 Tax Returns and Payments. Each of the Borrowers and each
of its Subsidiaries has filed all federal tax returns and all material state and
other tax returns required to be filed by it and has paid all income taxes
payable by it which have become due pursuant to such tax returns and all other
taxes and assessments payable by it which have become
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due, other than those not yet delinquent and except for those contested in good
faith and for immaterial taxes. Each of the Borrowers and each of its
Subsidiaries has paid, or has provided adequate reserves (in the good faith
judgment of the management of such Borrower) for the payment of, all federal and
material state and other income taxes applicable for all prior fiscal years and
for the current fiscal year to the date hereof.
6.12 Compliance with ERISA. Each Plan is in substantial
compliance with ERISA and the Code; no Plan is insolvent or in reorganization;
no Plan other than a Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) has a material Unfunded Current Liability; no Plan has an
accumulated or waived material funding deficiency or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Code; no Borrower nor any Subsidiary of any Borrower nor any ERISA Affiliate has
incurred any material liability to or on account of a Plan which is a
single-employer plan (as defined in Section 4001(a)(15) of ERISA) pursuant to
Section 4062, 4063 or 4064 of ERISA or a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) pursuant to Section 515, 4201 or 4204 of ERISA; no
proceedings have been instituted to terminate any Plan; and no condition exists
which presents a material risk to any Borrower or any Subsidiary of any Borrower
or any ERISA Affiliate of incurring a material liability to or on account of a
Plan pursuant to any of the foregoing Sections of ERISA or the Code; no lien
imposed under the Code or ERISA on the assets of any Borrower or any Subsidiary
of any Borrower or any ERISA Affiliate exists or is likely to arise on account
of any Plan; and each of the Borrowers and their Subsidiaries may terminate
contributions to any other employee benefit plans maintained by them (except as
provided pursuant to collective bargaining agreements) without incurring any
material liability to any person interested therein other than with respect to
benefits accrued prior to the date of termination. Notwithstanding anything to
the contrary contained in this Section 6.12, all representations and warranties
made in this Section 6.12 with respect to a Plan that is a multiemployer plan
(as defined in Section 4001(a)(3) of ERISA) shall be to the best knowledge of
the Borrowers.
6.13 Subordination. The subordination provisions contained in
all notes, debentures and other instruments entered into or issued in respect of
(i) the Subordinated Exchange Debentures, (ii) the 9% Senior Subordinated
Debentures and (iii) any Refinancing Subordinated
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Indebtedness, in each case are, or will be, enforceable against the issuer of
the respective security and the holders thereof and the Loans and all other
Obligations are, or will be, within the definition of "Senior Indebtedness"
contained therein.
6.14 Subsidiaries. Schedule V correctly sets forth, as of the
Initial Borrowing Date, each of the Subsidiaries of Silgan, the percentage
ownership (direct or indirect) of Silgan in each class of capital stock or other
equity interest of its Subsidiaries and also identifies the direct owner
thereof.
6.15 Compliance with Statutes, etc. (a) Each Borrower and each
of its Subsidiaries is in compliance with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except for
any failure to be in compliance therewith which could not reasonably be expected
to, individually or in the aggregate, have a material adverse effect on the
business, operations, property, assets or condition (financial or otherwise) of
Silgan and its Subsidiaries taken as a whole.
(b) Each Borrower and each of its Subsidiaries has complied
with all applicable federal, state and local environmental laws (including,
without limitation, RCRA and CERCLA), regulations and ordinances governing its
business products, properties or assets with respect to all discharges into the
ground and surface water, emissions into the ambient air and generation,
accumulation, storage, treatment, transportation, labeling or disposal of waste
materials or process by-products, and none of the Borrowers nor any of their
Subsidiaries is liable for any penalties, fines or forfeitures. All licenses,
permits or registrations required for the business of the Borrowers and their
Subsidiaries, as presently conducted, under any federal, state or local
environmental laws, regulations or ordinances have been secured and each of the
Borrowers and their Subsidiaries is in substantial compliance therewith. None of
the Borrowers nor any of their Subsidiaries is in noncompliance with, breach of
or default under any applicable writ, order, judgment, injunction, or decree to
which any such Person is a party and no event has occurred and is continuing
which, with the passage of time or the giving of notice or both, would
constitute a noncompliance, breach of or default
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thereunder. There are no legal or governmental proceedings pending or, to the
best of the Borrowers' knowledge after reasonable investigation, threatened
which (a) question the validity, term or entitlement of any Borrower or any of
its Subsidiaries of or to any material permit, license, order or registration
required for the operation of any facility which any Borrower or any of its
Subsidiaries currently operates and (b) wherein an unfavorable decision, ruling
or finding could have a adverse effect on the financial viability of any of its
facilities. To the best of the Borrowers' knowledge and belief, none of the
Borrowers nor any of their Subsidiaries has disposed of or otherwise discharged
any hazardous waste, toxic substances or similar materials, the disposal of
which could give rise to any liability under applicable environmental laws and
regulations. Notwithstanding anything to the contrary in this Section 6.15(b),
the representations and warranties made in this Section 6.15(b) shall only be
untrue if the aggregate effect of all failures, noncompliances and penalties,
fines or forfeitures of the types described above in this Section 6.15(b) could
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, or condition (financial or otherwise) of Silgan
and its Subsidiaries taken as a whole.
6.16 Investment Company Act. None of the Borrowers nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
6.17 Public Utility Holding Company Act. None of the Borrowers
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.18 Labor Relations. None of the Borrowers nor any of their
respective Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a material adverse effect on Silgan and its
Subsidiaries taken as a whole. There is (i) no unfair labor practice complaint
pending against any Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrowers, threatened against any of them, before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out of
or under collective bargaining agreements is so pending against any Borrower or
any of its Subsidiaries or, to the best
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knowledge of the Borrowers, threatened against any of them and (ii) no strike,
labor dispute, slowdown or stoppage pending against any Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrowers, threatened against any
Borrower or any of its Subsidiaries, except (with respect to any matter
specified in clause (i) or (ii) above, either individually or in the aggregate)
such as could not reasonably be expected to have a material adverse effect on
the business, operations, property, assets or condition (financial or otherwise)
of Silgan and its Subsidiaries taken as a whole.
6.19 Patents, Licenses, Franchises and Formulas. Each of the
Borrowers and each of its Subsidiaries owns all the patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises and
formulas, or rights with respect to the foregoing, and has obtained assignments
of all leases and other rights of whatever nature, necessary for the present
conduct of its business, without any known conflict with the rights of others
which, or the failure to obtain which, as the case may be, could not reasonably
be expected to result in a material adverse effect on the business, operations,
property, assets or condition (financial or otherwise) of Silgan and its
Subsidiaries taken as a whole.
Section 7. Affirmative Covenants. The Borrowers jointly and
severally covenant and agree (provided that each Revolving Borrower covenants
and agrees only as to itself and its Subsidiaries) that on and after the
Effective Date and until the Total Commitment and all Letters of Credit have
terminated and the Loans, Notes and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder and thereunder, are paid in
full:
7.01 Information Covenants. Silgan will furnish to each Bank:
(a) Quarterly Financial Statements. Within 60 days (or 120
days in the case of the fourth fiscal quarter) after the close of each
quarterly accounting period in each fiscal year of Silgan, the
consolidated and consolidating balance sheets of Silgan and its
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated and consolidating statements of income and cash
flow for such quarterly accounting period and for the elapsed portion
of the fiscal year ended with the last day of such quarterly accounting
period, in each case setting forth comparative figures for the related
periods in the prior
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fiscal year, all of which shall be certified by the chief financial
officer, treasurer or controller of Silgan, subject to normal year-end
audit adjustments.
(b) Annual Financial Statements. Within 120 days after the
close of each fiscal year of Silgan, the consolidated and consolidating
balance sheets of Silgan and its Subsidiaries as at the end of such
fiscal year and the related consolidated and consolidating statements
of income and cash flow for such fiscal year, in each case setting
forth comparative figures for the preceding fiscal year and certified,
in the case of the consolidated financial statements, by independent
certified public accountants of recognized national standing reasonably
acceptable to the Co-Arrangers, and in the case of the consolidating
financial statements, by the chief financial officer, treasurer or
controller of Silgan, in each case together with a report of such
accounting firm stating that in the course of its regular audit of the
financial statements of Silgan and its Subsidiaries, which audit was
conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Default or Event of
Default which has occurred and is continuing or, if in the opinion of
such accounting firm such a Default or an Event of Default has occurred
and is continuing, a statement as to the nature thereof.
(c) Management Letters. Promptly after Silgan's receipt
thereof, a copy of any "management letter" received by Silgan from its
certified public accountants.
(d) Budgets; Forecasts. Within 60 days after the first day of
each fiscal year of Silgan, (i) a budget in form and scope reasonably
satisfactory to the Co-Arrangers (including budgeted statements of
income and sources and uses of cash and balance sheets) prepared by
Silgan for each of the twelve months beginning on the first day of such
fiscal year accompanied by the statement of the chief financial
officer, treasurer or controller of Silgan to the effect that, to the
best of such officer's knowledge, the budget is a reasonable estimate
for the period covered thereby and (ii) a forecast of operations and
sources and uses of cash for the five-year period beginning on the
first day of such fiscal year, setting forth the assumptions made in
preparing such forecast and accompanied by the statement of the chief
financial officer, treasurer or controller
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of Silgan to the effect that, to the best of such officer's knowledge,
the forecast is a reasonable estimate for the period covered thereby.
(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Sections 7.01(a) and (b), a
certificate of the chief financial officer, treasurer or controller of
Silgan to the effect that, to the best of such officer's knowledge, no
Default or Event of Default has occurred and is continuing or, if any
Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof, which certificate shall set forth (in
reasonable detail) the calculations required to establish (i) in the
case of the statements delivered pursuant to Section 7.01(a), (I)
whether the Borrowers were in compliance with the provisions of
Sections 4.02(e), 4.02(f), 4.02(g), 4.02(i), 8.03(iii), 8.03(iv),
8.04(xiii), 8.05(xiii), 8.08 and 8.09 at the end of such fiscal
quarter, (II) the amount of Cumulative Consolidated Net Income, the Net
Equity Proceeds Amount, the Permitted Additional Investment Basket
Amount and the Retained Excess Cash Flow Amount at the end of such
fiscal quarter, and (III) the Interest Reduction Discount and the
Applicable Commitment Commission Percentage at such time, and (ii) in
the case of the statements delivered pursuant to Section 7.01(b), (I)
the amount of the Excess Cash Flow for the respective fiscal year, (II)
the amount of any mandatory prepayments and/or commitment reductions
required pursuant to Sections 3.03 and/or 4.02 during such fiscal year,
(III) whether the Borrowers were in compliance with the provisions of
Sections 8.03, 8.04, 8.05 and 8.07 through 8.09, inclusive, at the end
of such fiscal year, (IV) the amount of Cumulative Consolidated Net
Income, the Net Equity Proceeds Amount, the Permitted Additional
Investment Basket Amount and the Retained Excess Cash Flow Amount at
the end of such fiscal year, and (V) the Interest Reduction Discount
and the Applicable Commitment Commission Percentage at such time.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after an officer of any Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or an Event of Default, (ii) any litigation
or governmental proceeding pending (x) against any Borrower or any of
its Subsidiaries which could reasonably be expected to materially and
adversely
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affect the business, operations, property, assets or condition
(financial or otherwise) of Silgan and its Subsidiaries taken as a
whole or (y) with respect to any Credit Document and (iii) any other
event (including any such event relating to environmental matters)
which is likely to materially and adversely affect the business,
operations, property, assets or condition (financial or otherwise) of
Silgan and its Subsidiaries taken as a whole.
(g) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, (i) which any Borrower shall file with the Securities
and Exchange Commission or any governmental agencies substituted
therefor (the "SEC") or (ii) which Silgan shall deliver to the holders
of, or to the trustee with respect to, the Subordinated Exchange
Debentures, the 9% Senior Subordinated Debentures or any Refinancing
Subordinated Indebtedness.
(h) Other Information. From time to time, such other
information or documents (financial or otherwise) as the Administrative
Agent, any Co-Arranger or the Required Banks may reasonably request.
7.02 Books, Records and Inspections. Each of the Borrowers
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries in conformity with generally
accepted accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. Each of
the Borrowers will, and will cause each of its Subsidiaries to, permit officers
and designated representatives of the Administrative Agent, any Co-Arranger or
any Bank to visit and inspect, under guidance of officers of such Borrower or
such Subsidiary, any of the properties of such Borrower or such Subsidiary, and,
under guidance of officers of such Borrower or such Subsidiary, to examine the
books of account of such Borrower or such Subsidiary and discuss the affairs,
finances and accounts of such Borrower or such Subsidiary with, and be advised
as to the same by, its and their officers and independent public accountants (so
long as an officer of such Borrower or Subsidiary is present), all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent, such Co-Arranger or such Bank may request upon reasonable
prior notice. In connection with the foregoing, the Administrative Agent, the
Co-Arrangers and the Banks agree to keep any information delivered or made
available by
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the Borrowers which the Borrowers clearly indicate to be confidential
information confidential in accordance with Section 12.15.
7.03 Maintenance of Property, Insurance. Schedule IV sets
forth a true and complete listing of all insurance maintained by each of the
Borrowers and its Subsidiaries as of the Effective Date, with the amounts
insured on the Effective Date set forth therein. Each of the Borrowers will, and
will cause each of its Subsidiaries to, (i) keep all property useful and
necessary in its business in reasonable working order and condition, ordinary
wear and tear excepted, (ii) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks as is consistent with prudent risk management and
industry practice and (iii) furnish to each Bank, upon written request, full
information as to the insurance carried.
7.04 Corporate Franchises. Each of the Borrowers will, and
will cause each of its Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
rights, franchises, licenses and patents, except for those rights, franchises,
licenses and patents the loss of which could not reasonably be expected to have
a material adverse effect on the business, operations, property, assets or
condition (financial or otherwise) of Silgan and its Subsidiaries taken as a
whole, provided, however, that nothing in this Section 7.04 shall prevent (i)
the withdrawal by any Borrower or any of its Subsidiaries of its qualification
as a foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets or condition (financial or otherwise) of Silgan and
its Subsidiaries taken as a whole or (ii) any transaction permitted by Section
8.02.
7.05 Compliance with Statutes, etc. Each of the Borrowers
will, and will cause each of its Subsidiaries to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except for any failure to be in compliance therewith which could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations,
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property, assets or condition (financial or otherwise) of Silgan and its
Subsidiaries taken as a whole.
7.06 ERISA. As soon as possible and in any event within 30
days after any Borrower or any Subsidiary of any Borrower or any ERISA Affiliate
knows or has reason to know that a Reportable Event has occurred with respect to
a Plan (except to the extent that such Borrower has previously delivered to the
Banks a certificate and notice (if any) concerning such event pursuant to the
next clause hereof); that a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the
advance reporting requirement of PBGC Regulation Section 4043.61 (without regard
to subparagraph (b) (1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days, that with
respect to a Plan, a material accumulated funding deficiency has been incurred
or an application is to be or has been made to the Secretary of the Treasury for
a waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code, that a Plan has been or is likely to be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA, that a
Plan other than a Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) has a material Unfunded Current Liability, that proceedings
have been instituted or may reasonably be expected to be instituted to terminate
a Plan, or that any Borrower, any Subsidiary of any Borrower or any ERISA
Affiliate will incur or is likely to incur any material liability to or on
account of a Plan which is a single-employer plan (as defined in Section
4001(a)(15) of ERISA) under Section 4062, 4063 or 4064 of ERISA, or which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) under Section
515, 4201 or 4204 of ERISA, such Borrower will deliver to the Administrative
Agent a certificate of the chief financial officer of such Borrower setting
forth details as to such occurrence and action, if any, which such Borrower or
Subsidiary or ERISA Affiliate is required or proposes to take, together with any
notices required to be given to or filed with or by such Borrower or Subsidiary,
the ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with
respect thereto. Each Borrower will deliver to the Administrative Agent, upon
request by the Administrative Agent, a complete copy of the annual report (Form
5500) of each Plan that is not (i) a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) or (ii) a Plan
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which is no longer maintained or contributed to by any Borrower, any Subsidiary
of any Borrower or an ERISA Affiliate, in each case which is required to be
filed with the Internal Revenue Service. Copies of any other notices required to
be delivered to the Banks hereunder shall be delivered no later than 30 days
after the later of the date such report or notice has been filed with the
Internal Revenue Service or the PBGC, given to Plan participants or received by
any Borrower or any of its Subsidiaries or any ERISA Affiliate.
7.07 End of Fiscal Years; Fiscal Quarters. Each Borrower will
cause (i) each of its, and each of its Subsidiaries', fiscal years to end on
December 31 and (ii) each of its, and each of its Subsidiaries', fiscal quarters
to end on March 31, June 30, September 30 and December 31.
7.08 Taxes. Each of the Borrowers will, and will cause each of
its Subsidiaries to, pay when due all taxes which, if not paid when due, could
reasonably be expected to materially and adversely affect the business,
operations, property, assets or condition (financial or otherwise) of Silgan and
its Subsidiaries taken as a whole, except as contested in good faith and by
appropriate proceedings if adequate reserves (in the good faith judgment of the
management of Silgan) have been established with respect thereto.
7.09 Additional Security; Further Assurances; etc. (a) (i)
Each of the Borrowers will, and will cause each of the Subsidiary Guarantors to,
grant to the Collateral Agent, for the benefit of the Banks and the other
Secured Creditors described in the Security Documents, security interests and
mortgages in such assets and properties of such Borrower or such Subsidiary
Guarantors as are not covered by the original Security Documents or as may be
requested from time to time by the Required Banks (the "Additional Security
Documents"). Such security interests and mortgages shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent and shall (except as otherwise consented to by the Required
Banks) constitute valid and enforceable perfected security interests superior to
and prior to the rights of all third Persons and subject to no other Liens,
except such Liens as are permitted by Section 8.01. The Additional Security
Documents or other instruments related thereto shall have been duly recorded or
filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens, in favor of the Collateral Agent for
the benefit of the Banks
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and the other Secured Creditors, required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable in
connection therewith shall have been paid in full. Notwithstanding the
foregoing, this Section 7.09(a) shall not apply to any operating lease which by
its terms prevents the respective Credit Party from granting a security interest
therein, provided that such Credit Party shall use reasonable good faith efforts
at the time it enters into any such lease, to have any such restrictive terms
eliminated.
(b) Each of the Borrowers will, and will cause each of its
Subsidiaries to, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to
time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, real property surveys, reports and other
assurances or instruments and take such further steps relating to the
collateral covered by any of the Security Documents or Additional
Security Documents as the Collateral Agent may reasonably require.
Furthermore, the Borrowers shall cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other
related documents as may be reasonably requested by the Administrative
Agent to assure themselves that this Section 7.09 has been complied
with.
(c) Each of the Borrowers agrees that each action required by
this Section 7.09 shall be completed as soon as possible, but in no
event later than 90 days after such action is requested to be taken by
the Required Banks.
7.10 Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code and at the request of the Administrative
Agent, any Co-Arranger or the Required Banks, counsel for Silgan acceptable to
the Administrative Agent and the Co-Arrangers does not within 30 days after such
request deliver a written opinion, in form and substance reasonably satisfactory
to the Administrative Agent and the Co-Arrangers, with respect to any Foreign
Subsidiary whose capital stock is owned by a Credit Party, to the effect that a
pledge (x) of 66-2/3% or more of the total combined voting power of all classes
of capital stock of such Foreign Subsidiary entitled to vote and (y) of any
promissory notes issued by such Foreign Subsidiary to Silgan or any other Credit
Party, in either case would cause the earnings of such Foreign Subsidiary to be
treated as a deemed dividend to such Foreign Subsidiary's United States parent,
then in the case of a failure to deliver the opinion described above,
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that portion of such Foreign Subsidiary's outstanding capital stock or any
promissory notes so issued by such Foreign Subsidiary, in each case not
theretofore pledged pursuant to (and to the extent required by) the Pledge
Agreement, shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement. The Banks understand and
agree that to the extent the capital stock of Canadian Holdco, Silgan Plastics
Canada or any other Subsidiary of Canadian Holdco is required to be pledged
pursuant to the Canadian Credit Facility such capital stock shall not be
required to be pledged pursuant to this Agreement (and to the extent that such
capital stock has theretofore been pledged pursuant to the Pledge Agreement such
capital stock shall be released from the Liens created thereunder).
7.11 Real Estate Appraisals. In the event that the
Administrative Agent, any Co-Arranger or the Required Banks at any time after
the Effective Date determine in its or their good faith discretion (as a result
of events or circumstances affecting the Collateral Agent or the Required Banks
after the Effective Date) that real estate appraisals satisfying the
requirements set forth in 12 C.F.R., Part 34- Subpart C, or any successor or
similar statute, rule, regulation, guideline or order (any such appraisal a
"Required Appraisal") are or were required to be obtained, or should be
obtained, in connection with any Mortgaged Property or Mortgaged Properties,
then, within 120 days after receiving written notice thereof from the
Administrative Agent, such Co-Arranger or the Required Banks, as the case may
be, such Required Appraisal shall be delivered, at the expense of Silgan, to the
Administrative Agent, which Required Appraisal, and the respective appraiser,
shall be reasonably satisfactory to the Co-Arrangers.
7.12 Margin Stock. Each of the Borrowers will, and will cause
each of their respective Subsidiaries to, take any and all actions as may be
required to ensure that no capital stock pledged, or required to be pledged,
pursuant to any Security Document shall constitute Margin Stock.
Section 8. Negative Covenants. Each of the Borrowers jointly
and severally covenants and agrees (provided that each of Containers and
Plastics covenants and agrees only as to itself and its Subsidiaries) that on
and after the Effective Date and until the Total Commitment and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other
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Obligations incurred hereunder and thereunder, are paid in full:
8.01 Liens. None of the Borrowers will, nor will it permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of such Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to any Borrower
or any of its Subsidiaries), or assign any right to receive income or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute; provided that the provisions
of this Section 8.01 shall not prevent the creation, incurrence, assumption or
existence of the following Liens (collectively, "Permitted Liens"):
(i) inchoate Liens for taxes not yet due and payable, or Liens
for taxes being contested in good faith and by appropriate proceedings
for which adequate reserves (in the good faith judgment of the
management of Silgan) have been established;
(ii) Liens in respect of property or assets of any Borrower or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business, such as carriers', warehousemen's and
mechanics' liens and other similar Liens arising in the ordinary course
of business, and (x) which do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of such Borrower or such
Subsidiary or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
such Lien;
(iii) Liens in existence on the Effective Date which are
listed, and the property subject thereto described, in Schedule VI,
plus any renewals, replacements and extensions of any such Liens,
provided that (x) the aggregate principal amount of the Indebtedness,
if any, secured by such Liens does not increase from that amount
outstanding at the time of any such renewal, replacement or extension,
(y) the terms of any such Indebtedness are no more restrictive in any
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material respect than the terms of the Indebtedness being renewed,
replaced or extended and (z) any such renewal, replacement or extension
does not encumber any additional assets or properties of Silgan or any
of its Subsidiaries;
(iv) Liens created pursuant to the Security Documents;
(v) pledges or deposits in connection with worker's
compensation, unemployment insurance and other social security
legislation;
(vi) deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) to
secure the performance of tenders, bids, leases, contracts (other than
for the repayment of Indebtedness), statutory obligations and other
similar obligations, provided that the aggregate amount of cash and
value of non-cash collateral so deposited shall at no time exceed
$5,000,000;
(vii) Permitted Encumbrances on the Mortgaged Properties, and
easements, rights-of-way, zoning restrictions and other similar
restrictions, charges or encumbrances which do not materially interfere
with the ordinary conduct of the business of any Borrower or any of its
Subsidiaries and which do not materially detract from the value of the
property to which they attach or impair the use thereof to any Borrower
or any of its Subsidiaries;
(viii) Liens created by virtue of Capitalized Lease
Obligations, provided that such Liens are only in respect of the
property or assets subject to, and secure only, the respective
capitalized lease;
(ix) leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct
of the business of any Borrower or any of its Subsidiaries;
(x) Liens placed upon equipment, machinery or other materials
used in the ordinary course of business of any Borrower or any of its
Subsidiaries (other than the Receivables Subsidiary) at the time of the
acquisition thereof by such Borrower or such Subsidiary or within 120
days thereafter to secure Indebtedness incurred to pay all or a portion
of the purchase price
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thereof or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of any such equipment, machinery or other
materials or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that (x) the
aggregate outstanding principal amount of all Indebtedness secured by
Liens permitted by this clause (x) shall not at any time exceed
$15,000,000 and (y) in all events, the Lien encumbering the equipment,
machinery or other materials so acquired does not encumber any other
asset of such Borrower or such Subsidiary (other than the proceeds of
such equipment, machinery or other materials);
(xi) statutory and common law landlords' liens under leases to
which any Borrower or any of its Subsidiaries is a party;
(xii) Liens existing on any asset prior to the acquisition
thereof pursuant to a Permitted Acquisition so long as any such Liens
were not created in contemplation of such acquisition, any such Liens
do not extend to any other assets of any Borrower or any of its
Subsidiaries and the secured Indebtedness assumed in connection with
the Permitted Acquisition does not exceed 30% of the total value of the
assets so acquired, plus any renewals, replacements and extensions of
any such Liens, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal, replacement or
extension plus the reasonable fees and expenses incurred in connection
therewith, (y) the terms of any such Indebtedness are no more
restrictive in any material respect than the terms of the Indebtedness
being renewed, replaced or extended and (z) any such renewal,
replacement or extension does not encumber any additional assets or
properties of Silgan or any of its Subsidiaries;
(xiii) Liens granted by the Receivables Subsidiary on those
accounts receivable and related assets sold by it pursuant to the
Accounts Receivable Facility Documents to the extent that such Liens
are created by the Accounts Receivable Facility Documents;
(xiv) Liens on the capital stock of Canadian Holdco and on the
assets of Canadian Holdco and/or any of its Subsidiaries to secure the
obligations under the Canadian Credit Facility so long as such Liens do
not
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extend to any other assets of any Borrower or any of its other
Subsidiaries;
(xv) Liens arising out of judgments or awards in respect of
which Silgan or any of its Subsidiaries shall in good faith be
prosecuting an appeal or proceedings for review in respect of which
there shall have been secured a subsisting stay of execution pending
such appeal or proceedings, provided that the aggregate amount of such
judgments and the aggregate amount of any cash and the fair market
value of any property pledged by Silgan and its Subsidiaries to secure
such Liens does not exceed $7,500,000 at any time outstanding;
(xvi)Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods; and
(xvii) Liens (other than in respect of the Receivables
Subsidiary) not otherwise permitted by the provisions of this Section
8.01 to the extent securing liabilities not in excess of $15,000,000,
provided, however, that if such Liens are consensual Liens, those Liens
shall not encumber properties or assets with an aggregate fair value in
excess of $20,000,000.
8.02 Consolidation, Merger, Sale of Assets, etc. None of the
Borrowers will, nor will it permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets, or purchase or otherwise acquire (in one or a series of
related transactions) any part of the property or assets (other than purchases
or other acquisitions of inventory, materials and equipment in the ordinary
course of business) of any Person (or agree to do any of the foregoing at any
future time unless any such agreement is expressly made subject to obtaining the
consent of the Required Banks), or permit any of its Subsidiaries so to do any
of the foregoing, except that:
(i) such Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business and sales of other assets
in the ordinary course of business not in excess of $500,000 per sale
or series of related sales in any twelve month period;
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(ii) such Borrower and its Subsidiaries may, in the ordinary
course of business, sell equipment and materials which are uneconomic
or obsolete;
(iii) Capital Expenditures shall be permitted (other than by
the Receivables Subsidiary) to the extent not in violation of Section
8.07;
(iv) the Designated Credit Parties and the Receivables
Subsidiary may transfer and sell accounts receivable and related assets
pursuant to, and in accordance with the terms of, the Accounts
Receivable Facility Documents;
(v) Subsidiaries of Silgan may enter into sale and leaseback
transactions with respect to their equipment and Real Property, so long
as (u) no Default or Event of Default then exists or would result
therefrom, (v) each such sale and leaseback transaction is in an arm's-
length transaction and the respective Subsidiary receives at least fair
market value (as determined in good faith by Silgan or such
Subsidiary), (w) the total consideration received by such Subsidiary is
cash and is paid at the time of the closing of such sale, (x) the Net
Sale Proceeds therefrom are applied and/or reinvested as (and to the
extent) required by Section 4.02(i), (y) the aggregate amount of
proceeds received from all sale and leaseback transactions pursuant to
this clause (v) shall not exceed $50,000,000 in any fiscal year of
Silgan and (z) the aggregate amount of proceeds received from all sale
and leaseback transactions pursuant to this clause (v) shall not exceed
$100,000,000;
(vi) such Borrower and its Subsidiaries may sell other assets
(other than (i) accounts receivable, (ii) pursuant to a sale and
leaseback transaction or (iii) the capital stock of the Receivables
Subsidiaries or the capital stock of any Subsidiary Guarantor unless
all of such capital stock of such Subsidiary Guarantor is sold), so
long as (v) no Default or Event of Default then exists or would result
therefrom, (w) each such sale is in an arm's-length transaction and
such Borrower or such Subsidiary receives at least fair market value
(as determined in good faith by such Borrower or such Subsidiary, as
the case may be), (x) the total consideration received by such Borrower
or such Subsidiary is at least 80% cash and such cash is paid at the
time of the closing of such sale, (y) the Net Sale Proceeds
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therefrom are applied and/or reinvested as (and to the extent) required
by Section 4.02(e) and (z) the aggregate amount of the proceeds
received from all assets sold pursuant to this clause (vi) shall not
exceed $100,000,000;
(vii) Investments may be made to the extent permitted by
Section 8.05;
(viii) any Subsidiary Guarantor may merge with and into any
other Subsidiary Guarantor so long as (i) if only one such Subsidiary
Guarantor is a Wholly-Owned Subsidiary of Silgan, such Wholly-Owned
Subsidiary is the surviving corporation of such merger, (ii) if only
one such Subsidiary Guarantor also is a Revolving Borrower, such
Revolving Borrower is the surviving corporation of such merger, (iii)
the security interests granted to the Collateral Agent for the benefit
of the Secured Creditors pursuant to the Security Documents in the
assets of the Subsidiary Guarantor which is being merged out of
existence shall remain in full force and effect and perfected and (iv)
if the Subsidiary Guarantor that is being merged out of existence is a
non-Wholly-Owned Subsidiary of Silgan, the only consideration paid to
the minority shareholders of such non-Wholly-Owned Subsidiary is common
stock of Silgan, Qualified Preferred Stock of Silgan and/or cash and
with the payment of the merger consideration to be treated as a
Permitted Acquisition made pursuant to (and Silgan shall be required to
satisfy the requirements of) Section 8.02(x);
(ix) any Subsidiary of Silgan (other than a Subsidiary
Guarantor and the Receivables Subsidiary) may merge with and into any
other Subsidiary of Silgan (other than the Receivables Subsidiary) so
long as (i) in the case of any merger involving a Subsidiary Guarantor,
the Subsidiary Guarantor is the surviving corporation of such merger,
(ii) in the case of any merger involving a Revolving Borrower, the
Revolving Borrower is the surviving corporation of such merger, (iii)
if only one such Subsidiary is a Wholly-Owned Subsidiary of Silgan,
such Wholly-Owned Subsidiary is the surviving corporation of such
merger and (iv) if the Subsidiary that is being merged out of existence
is a non-Wholly-Owned Subsidiary of Silgan, the only consideration paid
to the minority shareholders of such non-Wholly-Owned Subsidiary is
common stock of Silgan, Qualified Preferred Stock of Silgan and/or cash
and with
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the payment of the merger consideration to be treated as a Permitted
Acquisition made pursuant to (and Silgan shall be required to satisfy
the requirements of) Section 8.02(x);
(x) Silgan and its Wholly-Owned Subsidiaries (other than the
Receivables Subsidiary) may acquire at least 80% of the capital stock
of, and Wholly-Owned Subsidiaries of Silgan (other than the Receivables
Subsidiary) may acquire all or substantially all of the assets of, any
Person (or any product line or division of such Person) so long as (i)
no Default or Event of Default then exists or would result therefrom,
(ii) to the extent any such acquisition is structured as a merger, such
acquisition must be effected by a Wholly-Owned Subsidiary of Silgan
which shall be the surviving corporation of such merger, (iii) to the
extent applicable, all of the provisions of Section 8.11 shall have
been complied with in respect of such acquisition, (iv) the Person or
assets so acquired was engaged or were used, as the case may be,
primarily in the packaging business, (v) the only consideration paid by
Silgan or the respective Wholly-Owned Subsidiary consists of cash,
common stock of Silgan, Qualified Preferred Stock of Silgan and/or
Indebtedness permitted to be incurred under Sections 8.04(xi) and
(xvii) and (vi) at least 5 Business Days prior to the consummation of
any such acquisition in which the aggregate purchase price, together
with the aggregate amount of Indebtedness assumed in connection
therewith, equals or exceeds $5,000,000, Silgan shall have delivered to
the Administrative Agent a certificate of its chief financial officer
setting forth (in reasonable detail) the recalculation of the Leverage
Ratio on a Pro Forma Basis for the Test Period then most recently ended
prior to the date of such acquisition for which financial statements
have been delivered to the Banks under this Agreement, and such
recalculation shall show that Silgan would have been in compliance with
Section 8.09 as of the last day of such Test Period (any acquisition
pursuant to this Section 8.02(x), a "Permitted Acquisition").
To the extent any Collateral is sold as permitted by this Section 8.02 or the
Required Banks waive the provisions of this Section 8.02 with respect to the
sale of any Collateral as provided in Section 12.12 such Collateral in each such
case shall be sold free and clear of the Liens created by the Security Documents
and the Administrative Agent and
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Collateral Agent shall be authorized to take any action deemed appropriate to
effect the foregoing.
8.03 Dividends. None of the Borrowers will, nor will it permit
any of its Subsidiaries to, authorize, declare or pay any Dividends with respect
to such Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of Silgan may pay cash Dividends to Silgan
or to a Wholly-Owned Subsidiary of Silgan;
(ii) any non-Wholly-Owned Subsidiary of Silgan may pay cash
Dividends to its shareholders or partners generally so long as (x) the
Borrower or its respective Subsidiary which owns the equity interest or
interests in the Subsidiary paying such cash Dividends receives at
least its proportionate share thereof (based upon its relative holdings
of the equity interest or interests in the Subsidiary paying such cash
Dividends and taking into account the relative preferences, if any, of
the various classes of equity interests in such Subsidiary) and (y) no
cash Dividends may be paid by any Subsidiary of the Borrower pursuant
to this clause (ii) at any time that any Intercompany Loans are
outstanding to such Subsidiary;
(iii) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may pay cash Dividends (other than to
repurchase or redeem any shares of its capital stock) so long as the
aggregate amount of such cash Dividends paid on or after the Initial
Borrowing Date pursuant to this clause (iii) does not exceed an amount
equal to the sum of (1) $6,000,000 in any fiscal year of Silgan plus
(2) the remainder of, if positive, (x) 50% of Cumulative Consolidated
Net Income (it being understood that if Cumulative Consolidated Net
Income is less than zero, then minus 100% of the amount of such loss)
minus (y) the amount of Dividends paid pursuant to clause (iv) of this
Section 8.03 in excess of $25,000,000;
(iv) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may redeem or repurchase shares of its
capital stock and/or pay cash Dividends on its Qualified Preferred
Stock in an aggregate amount not to exceed the sum of (1) $25,000,000
plus (2) the remainder of, if positive, (x) 50% of Cumulative
Consolidated Net Income (it being
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understood that if Cumulative Consolidated Net Income is less than
zero, then minus 100% of the amount of such loss) minus (y) the amount
of cash Dividends paid pursuant to clause (iii) of this Section 8.03 in
excess of $6,000,000 in any fiscal year of Silgan plus (3) the Net
Equity Proceeds Amount at such time; and
(v) so long as no Default or Event of Default then exists or
would result therefrom, Silgan may make the required payments with
respect to certain stock options as provided in its 1989 stock option
plan in an aggregate amount not to exceed $1,500,000 for all such
payments.
8.04 Indebtedness. None of the Borrowers will, nor will it
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred under the Credit Documents;
(ii) existing Indebtedness (other than the Subordinated
Exchange Debentures and the 9% Senior Subordinated Debentures) listed
on Schedule VII ("Existing Indebtedness"), plus any renewals,
replacements or extensions thereof to the extent permitted by Section
8.01(iii);
(iii) obligations under trade letters of credit incurred by
such Borrower or any of its Subsidiaries (other than the Receivables
Subsidiary) in the ordinary course of business, which, in each case,
are to be repaid in full not more than one year after the date on which
such Indebtedness is originally incurred to finance the purchase of
goods by such Borrower or such Subsidiary;
(iv) obligations under letters of credit incurred by such
Borrower or any of its Subsidiaries (other than the Receivables
Subsidiary) in the ordinary course of business in support of
obligations incurred in connection with worker's compensation,
unemployment insurance and other social security legislation in an
aggregate amount not to exceed $25,000,000 at any time outstanding;
(v) Indebtedness of Silgan not to exceed $300,000,000 (as
reduced by any repayments of principal
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thereof) in aggregate principal amount evidenced by the 9% Senior
Subordinated Debentures;
(vi) Indebtedness of Silgan not to exceed $56,206,000 (as
increased through the payment of interest in kind rather than in cash
in accordance with the terms thereof and as reduced by any repayments
of principal thereof) in aggregate principal amount evidenced by the
Subordinated Exchange Debentures;
(vii) intercompany Indebtedness among Silgan and its
Subsidiaries to the extent permitted by Sections 8.05(vii) and (viii);
(viii)Indebtedness consisting of Capitalized Lease Obligations
(other than by the Receivables Subsidiary) to the extent permitted by
Section 8.07;
(ix) unsecured guarantees by Silgan or any of its Subsidiaries
(other than the Receivables Subsidiary) of Silgan's or such
Subsidiaries' respective lease obligations under operating leases
entered into by any such Person;
(x) unsecured subordinated Indebtedness of Silgan
("Refinancing Subordinated Indebtedness") the proceeds of which are
used within 60 days after the incurrence thereof to Refinance
outstanding Subordinated Exchange Debentures, 9% Senior Subordinated
Debentures and/or Refinancing Subordinated Indebtedness theretofore
issued by Silgan so long as (i) no Default or Event of Default then
exists or would result therefrom, (ii) all of the terms and conditions
of such Refinancing Subordinated Indebtedness (including, without
limitation, subordination provisions, covenants, events of default,
interest rates, remedies, amortizations and maturities) are reasonably
acceptable to the Co-Arrangers, it being understood that in any event
such Refinancing Subordinated Indebtedness shall not have any scheduled
maturity, amortization or sinking fund payment earlier than the final
maturity of the Indebtedness to be Refinanced, (iii) the aggregate
principal amount of such Refinancing Subordinated Indebtedness does not
exceed the aggregate principal amount of the Indebtedness to be
Refinanced with such Refinancing Subordinated Indebtedness, together
with all accrued interest thereon, any prepayment premium associated
therewith and all costs and expenses incurred in connection therewith
and (iv) until such proceeds are used to Refinance such
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outstanding Indebtedness, such proceeds are (x) applied to repay
outstanding Revolving Loans and/or Swingline Loans and/or (y) placed in
a cash collateral account established and maintained by, and pursuant
to arrangements satisfactory to, the Administrative Agent;
(xi) Indebtedness of any Subsidiary of Silgan assumed in
connection with a Permitted Acquisition so long as (i) such
Indebtedness was not issued or created in contemplation of such
acquisition, (ii) such Indebtedness does not contain any covenants that
are in the aggregate more restrictive in any material respect than
those covenants set forth in the 9% Senior Subordinated Debenture
Indenture and, in any event, does not contain any restrictions on the
ability of such Subsidiary to pay cash dividends on its capital stock
and (iii) except as provided below in this clause (xi), such
Indebtedness does not exceed 30% of the total value of the assets so
acquired, provided however, such Indebtedness may exceed 30% of the
total value of the assets so acquired if, but only if, (x) the portion
of such Indebtedness in excess of such 30% does not have any required
or scheduled amortization prior to the B Term Loan Maturity Date (other
than as a result of a change of control thereunder which is no more
favorable to the holders of such Indebtedness than a Change of Control
hereunder) and (y) the average per annum interest rate on all such
Indebtedness does not exceed 11-1/2%; plus any renewals, replacements
or extensions thereof to the extent permitted by Section 8.01(xii);
(xii) Indebtedness of Silgan under Interest Rate Protection
Agreements related to Indebtedness otherwise permitted under this
Section 8.04;
(xiii) unsecured guaranties (including any payments made
thereunder) by Silgan and its Subsidiaries (other than the Receivables
Subsidiary) of obligations of Joint Ventures and Subsidiaries of Silgan
which are not Subsidiary Guarantors (other than the Receivables
Subsidiary) in an aggregate amount not to exceed at any time
outstanding, when added to the aggregate amount of Investments made
pursuant to Section 8.05(xiii), an amount equal to the sum of (I)
$100,000,000 and (II) the Permitted Additional Investment Basket Amount
at such time (determined without regard to any write-downs or
write-offs of such Investments);
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(xiv) Indebtedness of Canadian Holdco and/or any of its
Subsidiaries under the Canadian Credit Facility so long as (i) the
aggregate outstanding principal amount of term loans, revolving loans,
letters of credit and/or bankers acceptances thereunder does not exceed
$40,000,000 (or the Canadian Dollar equivalent thereof), as reduced by
any permanent repayments of principal thereof or permanent reductions
of the revolving credit commitments thereunder and (ii) the proceeds
therefrom are applied as, and to the extent, required by Section
3.03(e) or Section 4.02(g), as the case may be, which Indebtedness may
be guaranteed on an unsecured basis by Silgan, Containers and/or
Plastics (although the guaranty of Plastics may be secured by the
capital stock of Canadian Holdco);
(xv) Indebtedness permitted by Section 8.01(x);
(xvi) Indebtedness of the Receivables Subsidiary under the
Accounts Receivable Facility to the extent that the obligations
thereunder are required to be reflected as a liability on the
consolidated balance sheet of Silgan in accordance with generally
accepted accounting principles in the United States; and
(xvii) additional Indebtedness of the Borrower and its
Subsidiaries (other than the Receivables Subsidiary) not otherwise
permitted hereunder not exceeding $25,000,000 in aggregate principal
amount at any time outstanding.
8.05 Advances, Investments and Loans. None of the Borrowers
will, nor will it permit any of its Subsidiaries to, lend money or credit or
make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person (each of the foregoing, an "Investment" and, collectively,
"Investments"), or permit any of its Subsidiaries so to do, except that the
following shall be permitted:
(i) such Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms;
(ii) such Borrower and its Subsidiaries may acquire and hold
Cash Equivalents;
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(iii) such Borrower and its Subsidiaries may make loans and
advances to their respective officers, employees and agents in the
ordinary course of business in an aggregate amount not to exceed
$5,000,000 at any one time outstanding (determined without regard to
any write-downs or write-offs thereof);
(iv) each Borrower and each of its Subsidiaries may establish
Subsidiaries to the extent permitted pursuant to Section 8.11;
(v) Silgan and its Subsidiaries may own the capital stock of
their respective Subsidiaries;
(vi) the Borrowers and their Subsidiaries may continue to hold
any investment they held as of the Effective Date as set forth on
Schedule VIII;
(vii) the Borrowers and the Subsidiary Guarantors may make
Intercompany Loans to one another so long as each such Intercompany
Loan is evidenced by an Intercompany Note which shall be pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(viii) (x) the Borrowers and the Subsidiary Guarantors may
make Intercompany Loans to Wholly-Owned Subsidiaries of Silgan which
are not Subsidiary Guarantors (other than the Receivables Subsidiary)
in an aggregate principal amount not to exceed $50,000,000 at any time
outstanding (determined without regard to any write-downs or write-offs
thereof) and (y) Subsidiaries of Silgan which are not Subsidiary
Guarantors may make Intercompany Loans to one another (other than to
the Receivables Subsidiary) and to Silgan and the Subsidiary Guarantors
so long as in the case of any such Intercompany Loans made to Silgan
and/or to any Subsidiary Guarantor, such Intercompany Loans are
subordinated to the Obligations on a basis reasonably satisfactory to
the Administrative Agent (which, in any event, shall provide that no
payment shall be made thereunder upon the occurrence and during the
continuance of any Default or Event of Default);
(ix) the Borrowers and the Subsidiary Guarantors may make cash
common equity contributions to their Subsidiaries which are Subsidiary
Guarantors;
(x) Plastics may make capital contributions to Canadian
Holdco from time to time to the extent and only
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in the amounts necessary for Canadian Holdco to comply with certain
Canadian laws and regulations relating to minimum equity
capitalization;
(xi) Canadian Holdco may make capital contributions to Silgan
Plastics Canada from time to time to the extent and only in the amounts
necessary for Silgan Plastics Canada to comply with certain Canadian
laws and regulations relating to minimum equity capitalization;
(xii) Permitted Acquisitions consisting of stock acquisitions
shall be permitted;
(xiii) so long as no Default or Event of Default then exists
or would result therefrom, Silgan and its Wholly-Owned Subsidiaries
(other than the Receivables Subsidiary) may make cash Investments in,
or transfer assets to, any Joint Venture or any Subsidiary of Silgan
which is not a Subsidiary Guarantor (other than the Receivables
Subsidiary), so long as the aggregate amount of such cash Investments
and the fair market value of all assets so transferred (as determined
in good faith by Silgan), when added to the amount of guaranties
outstanding under Section 8.04(xiii) (and including any payments made
under any such guaranties), does not exceed the sum of (I) $100,000,000
and (II) the Permitted Additional Investment Basket Amount at such time
(determined without regard to any write-downs or write-offs of any
Investments made pursuant to this clause (xiii)); and
(xiv) Silgan and its Subsidiaries may receive and hold
non-cash consideration in connection with any Asset Sale to the extent
permitted by Section 8.02(vi).
8.06 Transactions with Affiliates. None of the Borrowers will,
nor will it permit any of its Subsidiaries to, enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of such Borrower, other than on terms and
conditions substantially as favorable to such Borrower or such Subsidiary as
would be obtainable by such Borrower or such Subsidiary at the time in a
comparable arm's-length transaction with a Person other than an Affiliate,
provided that:
(i) each of Silgan and its Domestic Subsidiaries may execute,
deliver and perform their obligations under the Tax Sharing Agreement;
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(ii) transactions among Silgan and its Wholly-Owned
Subsidiaries shall be permitted to the extent that such transactions
are otherwise not restricted by the terms of this Agreement or any
other Credit Document;
(iii) Silgan, Containers, Plastics and other Subsidiaries of
Silgan may each make such payments as are required pursuant to, and
perform its obligations under, its Management Services Agreement,
provided that the Quarterly Management Fee (as defined in the
respective Management Services Agreement) shall accrue but not be paid
by Silgan, Containers and/or Plastics, as the case may be, upon the
occurrence of certain events, and to the extent, provided in the
respective Management Services Agreement, and provided further that the
aggregate payments payable pursuant to this clause (iii) shall not
exceed at any time the amount which would be payable under the
Management Services Agreement of Silgan if the payment under the other
Management Services Agreements were zero;
(iv) the payment of reasonable and customary regular fees and
granting of options to directors of Silgan who are not employees of
Silgan or any of its Subsidiaries shall be permitted; and
(v) the payment of fees to Morgan Stanley & Co. Incorporated
and its Affiliates on an arm's-length basis for financial, advisory,
consulting or investment banking services that the Board of Directors
of Silgan (or an authorized committee thereof) deems to be advisable or
appropriate for Silgan or any Subsidiary of Silgan to obtain
(including, without limitation, the payment to Morgan Stanley & Co.
Incorporated of any underwriting discounts or commissions or placement
agency fees in connection with the issuance and sale of any securities
by Silgan) shall be permitted.
Notwithstanding anything to the contrary contained above, this Section 8.06
shall not prohibit (i) the transfer of any assets, the making of any Dividends
or the making of any Investments permitted pursuant to Sections 8.02, 8.03, 8.04
and 8.05 or otherwise specifically permitted by the terms of this Agreement or
(ii) transactions with Affiliates (A) approved by a majority of the
disinterested members of the Board of Directors (or an authorized committee
thereof) of Silgan or, to the extent that the value of such transaction is less
than $5,000,000, by a majority of the Board of Directors (or an authorized
committee thereof) of Silgan or
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(B) for which Silgan or its respective Subsidiary delivers to the Administrative
Agent a written opinion of an unaffiliated nationally recognized investment
banking firm stating that such transaction is fair to Silgan or such Subsidiary
from a financial point of view, provided that if the value of any such
transaction not otherwise permitted under clauses (i) through (v) of the first
paragraph of this Section 8.06 exceeds $8,000,000, then the foregoing
determination must be made in the manner provided in clause (B) above.
8.07 Capital Expenditures. (a) None of the Borrowers will, nor
will it permit any of its Subsidiaries to, make any Capital Expenditure during
any period set forth below which exceeds in the aggregate for Silgan and its
Subsidiaries the amount set forth opposite such period below:
Period Amount
------ ------
Initial Borrowing Date through
December 31, 1997 $50,000,000
Calendar Year ended
December 31, 1998 $75,000,000
Calendar Year ended
December 31, 1999 $75,000,000
Calendar Year ended
December 31, 2000 $75,000,000
Calendar Year ended
December 31, 2001 $75,000,000
Calendar Year ended
December 31, 2002 $75,000,000
Calendar Year ended
December 31, 2003 $75,000,000
Calendar Year ended
December 31, 2004 $75,000,000
Notwithstanding anything to the contrary contained above, (i) each of
the amounts set forth in the table above shall be increased at the time of any
Permitted Acquisition of a Person by an amount equal to 7% of the annual sales
of the Person or assets acquired as part of such Permitted Acquisition (provided
that in the case of a Permitted Acquisition effected after the first day of any
fiscal year, the actual additional amount permitted to be expended pursuant to
this clause (i) in such fiscal year shall be the amount set forth above
multiplied by a fraction, the numerator of which is the number of days remaining
during such fiscal year and the denominator of which is 365) and (ii) to the
extent that Capital Expenditures made during any period set forth in the table
above are less than the amount set forth opposite such period in the table above
(as
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adjusted pursuant to preceding clause (i)), such amount (the "Carryover Amount")
may be carried forward and utilized to make Capital Expenditures in excess of
the amount permitted in the table above (as adjusted pursuant to preceding
clause (i)) in the immediately succeeding calendar year but not in any calendar
year thereafter, it being understood and agreed that any Capital Expenditures
made in such immediately succeeding calendar year shall be deemed to have first
utilized the Carryover Amount in respect of such immediately preceding calendar
year.
(b) In addition to the Capital Expenditures permitted pursuant to the
preceding clause (a) and succeeding clause (c), Capital Expenditures made with
any of the following shall be permitted: (i) proceeds utilizing the Net Equity
Proceeds Amount, (ii) Net Insurance Proceeds (except to the extent that such
proceeds are required to be applied pursuant to Section 4.02(f)), (iii) proceeds
utilizing the Retained Excess Cash Flow Amount and (iv) Net Sale Proceeds from
any Asset Sale or sale and leaseback transaction to the extent that such Net
Sale Proceeds are not required to be used by Silgan or any of its Subsidiaries
to repay any Indebtedness.
(c) In addition to the Capital Expenditures permitted pursuant to the
preceding clauses (a) and (b), Capital Expenditures made in connection with
plant rationalizations associated with any Permitted Acquisition shall be
permitted so long as (i) such Capital Expenditures are of the type that would
have been recorded under generally accepted accounting principles as a purchase
accounting liability prior to EITF 95-3 and (ii) the aggregate amount thereof
does not exceed $15,000,000 in any calendar year, it being understood and
agreed, however, that any such Capital Expenditures committed to be made by
Silgan and its Subsidiaries as of the Initial Borrowing Date with respect to any
acquisitions made under the Existing Credit Agreement also shall be permitted.
8.08 Interest Coverage Ratio. None of the Borrowers will
permit the Interest Coverage Ratio for any Test Period ended on the last day of
a fiscal quarter set forth below to be less than the ratio set forth opposite
such fiscal quarter below:
Fiscal Quarter Ended Ratio
- -------------------- -----
December 31, 1997 2.25:1.00
March 31, 1998 2.25:1.00
June 30, 1998 2.25:1.00
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September 30, 1998 2.25:1.00
December 31, 1998 2.25:1.00
March 31, 1999 2.50:1.00
June 30, 1999 2.50:1.00
September 30, 1999 2.50:1.00
December 31, 1999 2.50:1.00
March 31, 2000 2.75:1.00
June 30, 2000 2.75:1.00
September 30, 2000 2.75:1.00
December 31, 2000 2.75:1.00
March 31, 2001 and
the last day of
each fiscal quarter
thereafter 3.00:1.00
8.09 Leverage Ratio. None of the Borrowers will permit the
Leverage Ratio for any Test Period ended on the last day of a fiscal quarter set
forth below to be greater than the ratio set forth opposite such fiscal quarter
below:
Fiscal Quarter Ended Ratio
- -------------------- -----
December 31, 1997 4.50:1.00
March 31, 1998 4.50:1.00
June 30, 1998 4.50:1.00
September 30, 1998 4.50:1.00
December 31, 1998 4.50:1.00
March 31, 1999 4.50:1.00
June 30, 1999 4.50:1.00
September 30, 1999 4.50:1.00
December 31, 1999 4.50:1.00
March 31, 2000 and 4.00:1.00
each fiscal quarter
thereafter
8.10 Limitation on Voluntary Payments and Modifications of
Certain Indebtedness; Modifications of Documents, Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. None of the Borrowers will, nor will
it permit any of its Subsidiaries to, (i) make any voluntary or optional payment
or prepayment on or redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due) or exchange any
Subordinated Exchange Debentures, any 9% Senior Subordinated Debentures or any
Refinancing Subordinated Indebtedness, or make any purchase, redemption or
acquisition for value of (or any offer to purchase, redeem or acquire) any
Subordinated Exchange Debentures, any 9% Senior
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Subordinated Debentures or any Refinancing Subordinated Indebtedness, whether as
a result of a Change of Control, the consummation of asset sales or otherwise;
provided, however, that Silgan may Refinance outstanding Subordinated Exchange
Debentures, 9% Senior Subordinated Debentures and any Refinancing Subordinated
Indebtedness through Permitted Subordinated Debt Repurchases, (ii) amend or
modify, or permit the amendment or modification of, any provision of the
Subordinated Exchange Debenture Documents, the 9% Senior Subordinated Debenture
Documents or any Refinancing Subordinated Indebtedness Documents, (iii) amend or
modify, or permit the amendment or modification of, any provision of any
Management Services Agreement, (iv) after the execution or delivery thereof,
amend or modify, or permit the amendment or modification of, any provision of
the Accounts Receivable Facility Documents other than any amendments or
modifications thereto which could not be adverse to the interests of the Banks
or (v) amend, modify or change its certificate of incorporation (including,
without limitation, by the filing or modification of any certificate of
designation) or by-laws (or equivalent organizational documents) other than
amendments, modifications or changes thereto which could not reasonably be
expected to be adverse to the interests of the Banks.
8.11 Creation of Subsidiaries. Notwithstanding anything to the
contrary contained in this Agreement, none of the Borrowers will, nor will it
permit any of its Subsidiaries to, establish, create or acquire after the
Initial Borrowing Date any Subsidiary; provided that, Silgan and its
Wholly-Owned Subsidiaries shall be permitted to (I) establish or create
Wholly-Owned Subsidiaries, (II) acquire Subsidiaries which are at least 80%
owned by Silgan and its Wholly-Owned Subsidiaries to the extent permitted by
Section 8.02(x) and (III) acquire other non-Wholly-Owned Subsidiaries to the
extent permitted by Section 8.05(xiii), so long as (i) in the case of preceding
clauses (I) and (II), at least 10 Business Days' prior written notice thereof is
given to the Administrative Agent (or such shorter period of time as is
acceptable to the Administrative Agent), (ii) the capital stock of such new
Subsidiary is pledged pursuant to (and to the extent required by) the Pledge
Agreement and the certificates representing such stock, together with stock
powers duly executed in blank, are delivered to the Collateral Agent and (iii)
to the extent that such Subsidiary constitutes a Subsidiary Guarantor, such
Subsidiary executes and delivers a counterpart of the Pledge Agreement, the
Security Agreement and the Borrowers/Subsidiaries Guaranty and takes all such
other actions as may be required by
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Section 7.09. In addition, each Borrower will cause each new Subsidiary
Guarantor to deliver to the Administrative Agent all other relevant
documentation of the type described in Sections 5.01(c) and (d) as such new
Subsidiary Guarantor would have had to deliver if it were a Credit Party on the
Initial Borrowing Date.
8.12 Limitation on Restrictions on Subsidiary Dividends and
Other Distributions. None of the Borrowers will, nor will it permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary to (a) pay dividends or make any other distributions on its
capital stock or any other interest or participation in its profits, owned by
such Borrower or any Subsidiary of such Borrower, or pay any Indebtedness owed
to such Borrower or a Subsidiary of such Borrower, (b) make loans or advances to
such Borrower or (c) transfer any of its properties or assets to such Borrower,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii) the
Subordinated Exchange Debenture Documents, the 9% Senior Subordinated Debenture
Documents or any Refinancing Subordinated Indebtedness Documents (so long as
such restrictions are no more restrictive in any material respect than those set
forth in the 9% Senior Subordinated Debenture Documents), (iv) customary
provisions restricting subletting or assignment of any lease or other contract
of such Borrower or a Subsidiary of such Borrower, (v) restrictions on the
transfer of any asset subject to a Lien permitted by Section 8.01, (vi)
restrictions on the Receivables Subsidiary to the extent set forth in the
Accounts Receivable Facility Documents, (vii) agreements with principal
customers of Silgan and its Subsidiaries restricting the transfer of assets
substantially dedicated to products sold to such customers (although such
restrictions shall not apply to the granting of Liens pursuant to the Security
Documents), (viii) restrictions imposed on Canadian Holdco and its Subsidiaries
pursuant to the Canadian Credit Facility and (ix) restrictions only of the type
described in clauses (b) and (c) above in this Section 8.12 which are imposed on
any Subsidiary of Silgan acquired pursuant to a Permitted Acquisition to the
extent such restrictions are set forth in any Indebtedness assumed in connection
with such Permitted Acquisition so long as such restrictions are not applicable
to any Subsidiary of Silgan other than the Subsidiary being acquired and such
restrictions were not created or imposed in connection with or in contemplation
of such Permitted Acquisition.
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8.13 Limitation on Issuances of Capital Stock. (a) None of the
Borrowers will permit any of its Subsidiaries to issue any capital stock
(including by way of sales of treasury stock) or any options or warrants to
purchase, or securities convertible into, capital stock, except for (i)
transfers and replacements of then outstanding shares of capital stock, (ii)
stock splits, stock dividends and similar issuances which do not decrease the
percentage ownership of such Borrower or any of its Subsidiaries in any class of
the capital stock of such Subsidiary and (iii) issuances of common stock by
Wholly-Owned Subsidiaries of Silgan to Silgan or a Wholly-Owned Domestic
Subsidiary thereof.
(b) None of the Borrowers will, nor will it permit any of its
Subsidiaries to, issue any class of (i) preferred stock other than Qualified
Preferred Stock of Silgan or (ii) redeemable common stock other than at the sole
option of such Borrower or such Subsidiary.
8.14 Business. (a) None of the Borrowers will, nor will it
permit any of its Subsidiaries to, engage (directly or indirectly) in any
business other than the packaging business.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Borrowers will not permit the Receivables Subsidiary to engage in
any business activities (including, but not limited to, making acquisitions or
Investments) or incur or assume any liabilities other than, in each case, solely
in connection with the transactions contemplated by the Accounts Receivable
Facility Documents.
8.15 Change of Name. None of the Borrowers will, nor will it
permit any of its Subsidiaries which are Credit Parties to, change its legal
name from that which exists on the Effective Date unless and until (i) it shall
have given to the Administrative Agent and the Collateral Agent 15 days' prior
written notice of its intention so to do, clearly describing such new name and
providing such other information in connection therewith as the Administrative
Agent and the Collateral Agent may reasonably request, and (ii) with respect to
such new name, it shall have taken all action, reasonably satisfactory to the
Administrative Agent and the Collateral Agent, to maintain the security
interests granted by any Borrower or any such other Credit Party to the
Collateral Agent in the Collateral pursuant to any Security Document at all
times fully perfected and in full force and effect.
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8.16 Designated Senior Indebtedness. Silgan will not designate
any Indebtedness, other than the Obligations, as "Designated Senior
Indebtedness" for purposes of the Subordinated Exchange Debentures, the 9%
Senior Subordinated Debentures or any Refinancing Subordinated Indebtedness.
Section 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. Any Borrower shall (i) default in the payment
when due of any Unpaid Drawings or of any principal of the Loans or the Notes,
or (ii) default, and such default shall continue unremedied for three or more
Business Days, in the payment when due of any interest on Unpaid Drawings or of
any interest on the Loans or the Notes or of any Fees or any other amounts owing
hereunder or thereunder; or
9.02 Representations, etc. Any representation, warranty or
statement made or deemed made by any Credit Party herein or in any other Credit
Document or in any certificate delivered pursuant hereto or thereto shall prove
to be untrue or inaccurate in any material respect on the date as of which made
or deemed made; or
9.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement (other than
those referred to in Sections 9.01 and 9.02 and clause (ii) of this Section
9.03) contained in this Agreement and such default shall continue unremedied for
a period of 30 days after written notice to the Borrowers by either the
Administrative Agent, any Co-Arranger or any Bank or (ii) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(f)(i), 7.07 or Section 8; or
9.04 Default Under Other Agreements. (i) Any Borrower or any
of its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Notes and the Intercompany Notes) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (y) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Notes and the
Intercompany Notes) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the
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holder or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause (determined without regard to whether any notice is
required but giving effect to any grace period), any such Indebtedness to become
due prior to its stated maturity or (ii) any Indebtedness of any Borrower or any
of its Subsidiaries shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof, provided that it shall not constitute an Event of
Default under this Section 9.04 unless the aggregate amount of all Indebtedness
referred to in clauses (i) and (ii) above equals or exceeds $7,500,000; or
9.05 Bankruptcy, etc. Any Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against any Borrower or any of its Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
any Borrower or any of its Subsidiaries, or any Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to any Borrower or any of its Subsidiaries, or there is
commenced against any Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days, or any Borrower or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or any Borrower or
any of its Subsidiaries suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or any Borrower or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by any Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or
9.06 ERISA. (i) (a) A single-employer plan (as defined in
Section 4001(a)(15) of ERISA) established by any Borrower, any Subsidiary of any
Borrower or any ERISA Affiliate shall fail to maintain the minimum funding
standard required by Section 412 of the Code for any plan year or part thereof
or a waiver of such standard or the extension of any
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amortization period is sought or granted under Section 412 of the Code, (b) any
Plan is, shall have been or is likely to be terminated or the subject of
termination proceedings under ERISA or an event has occurred entitling the PBGC
to terminate a Plan under Section 4042(a) of ERISA, (c) any Plan other than a
Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA)
shall have an Unfunded Current Liability, or (d) any Borrower, any Subsidiary of
any Borrower or an ERISA Affiliate has incurred or is likely to incur a
liability to or on account of a Plan under Section 515, 4062, 4063, 4064, 4201
or 4204 of ERISA; (ii) there shall result from any such event or events
described in clause (i) (a) the imposition of a lien upon the assets of any
Borrower, any Subsidiary of any Borrower or an ERISA Affiliate, (b) the
provision of security to induce the issuance of a waiver or extension of any
funding requirement under Section 412 of the Code, or (c) liability or a
material risk of incurring liability to the PBGC or the Internal Revenue Service
or a Plan or a trustee appointed under ERISA; and (iii) the events described in
clauses (i) and (ii) in the opinion of the Required Banks, could reasonably be
expected to have a material adverse effect upon the business, operations,
property, assets or condition (financial or otherwise) of Silgan and its
Subsidiaries taken as a whole; or
9.07 Pledge Agreement. The Pledge Agreement shall cease to be
in full force and effect, or shall cease to give the Collateral Agent the Liens,
rights, powers and privileges purported to be created thereby (including,
without limitation, a first priority perfected security interest in, and Lien
on, all of the Pledge Agreement Collateral except as provided herein), in favor
of the Collateral Agent for the benefit of the Secured Creditors and securing
the Secured Obligations, superior to and prior to the rights of all third
Persons and subject to no other Liens, or any Credit Party shall default in the
due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to the Pledge Agreement; or
9.08 Borrowers/Subsidiaries Guaranty. The
Borrowers/Subsidiaries Guaranty or any provision thereof shall cease to be in
full force or effect, or any Guarantor, or any Person acting by or on behalf of
such Guarantor, shall deny or disaffirm its obligations under the
Borrowers/Subsidiaries Guaranty, or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Borrowers/Subsidiaries Guaranty; or
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9.09 Security Agreements; Mortgages; Additional Security
Documents. The Security Agreement or any of the Mortgages or Additional Security
Documents shall, after the execution and delivery thereof, cease to be in full
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a perfected security interest in, and Lien on, all the Collateral or
Additional Collateral, as the case may be, covered thereby except as provided in
such Security Documents), in favor of the Collateral Agent for the benefit of
the Secured Creditors, superior to and prior to the rights and Liens of all
third Persons, or any Credit Party shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to the Security Agreement or any Mortgage or Additional
Security Document beyond the period of grace, if any, provided for therein; or
9.10 Judgments. One or more judgments or decrees shall be
entered against any Borrower or any of its Subsidiaries involving, when added to
any other judgments or decrees against any Borrower and its Subsidiaries, a
liability (not paid or fully covered by a reputable and solvent insurance
company) of $7,500,000 or more, and all such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 60 days from
the entry thereof; or
9.11 Ownership; Change of Control. A Change of Control shall
occur; or
9.12 Accounts Receivable Facility. After the execution and
delivery thereof, the Receivables Subsidiary shall default in any payment of any
amounts beyond the period of grace, if any, provided in the Accounts Receivable
Facility Documents or (ii) the Borrower or any of its Subsidiaries shall default
in the observance or performance of any agreement or condition contained in the
Accounts Receivable Facility Documents to which they are a party, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of the obligations
of the Receivables Subsidiary under the Accounts Receivable Facility (or a
trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required but giving effect to any grace
period), the Accounts Receivable Facility to become due (or unwind) prior to its
stated maturity or (iii) the obligations of the Receivables
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Subsidiaries under the Accounts Receivable Facility shall be declared to be due
and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrowers, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Co-Arranger, any Bank or the holder of any Note to enforce its claims
against any Borrower (provided, that, if an Event of Default specified in
Section 9.05 shall occur with respect to any Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent to the
Borrowers as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon all Commitments shall forthwith terminate immediately and
any Commitment Commission shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each of the Borrowers; (iii) exercise any rights or
remedies under the Borrowers/Subsidiaries Guaranty and/or in its capacity as
Collateral Agent under any of the Security Documents; (iv) direct the Revolving
Borrowers to pay (and the Revolving Borrowers agree that upon receipt of such
notice they will pay) to the Administrative Agent at the Payment Office such
additional amount of cash, to be held as security by the Administrative Agent in
the Cash Collateral Account, as is equal to the aggregate Stated Amount of all
then outstanding Letters of Credit; and (v) terminate any Letter of Credit which
may be terminated in accordance with its terms.
Section 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"A Term Loan" shall have the meaning provided in Section
1.01(a).
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"A Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "A Term Loan Commitment", as same may be (x) terminated pursuant to
Sections 3.03 and 9 or (y) adjusted from time to time as a result of assignments
to or from such Bank pursuant to Sections 1.13 and/or 12.04(b).
"A Term Loan Maturity Date" shall mean December 31, 2003.
"A Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(b).
"A Term Note" shall have the meaning provided in Section
1.05(a).
"Accounts Receivable Facility" shall mean the transactions
contemplated by the Accounts Receivable Facility Documents pursuant to which the
Designated Credit Parties sell their accounts receivable and related assets to
the Receivables Subsidiary for resale by the Receivables Subsidiary as part of a
customary asset securitization transaction involving accounts receivable and
related assets.
"Accounts Receivable Facility Documents" shall mean the
pooling and servicing agreement, the receivables purchase agreement and each of
the other documents and agreements entered into in connection with the Accounts
Receivable Facility, all of the terms and conditions of which shall be required
to be reasonably satisfactory in form and substance to the Co-Arrangers (it
being understood that at least 15 Business Days prior to the entering into of
any Accounts Receivable Facility, drafts of the Accounts Receivable Facility
Documents with respect thereto shall be distributed to the Co-Arrangers for
their review, and the Co-Arrangers shall receive all subsequent drafts of such
Accounts Receivable Facility Documents).
"Additional Collateral" shall mean any assets or properties of
any Credit Party given as collateral pursuant to any Additional Security
Document.
"Additional Security Documents" shall have the meaning
provided in Section 7.09(a) and shall include any additional security
documentation executed and delivered pursuant to Section 8.11.
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"Adjusted Certificate of Deposit Rate" shall mean, on any day,
the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by
dividing (x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for determining
the current annual assessment payable by the Administrative Agent to the Federal
Deposit Insurance Corporation for insuring three-month certificates of deposit.
"Adjusted Consolidated Net Income" shall mean, for any period,
Consolidated Net Income of Silgan and its Subsidiaries for such period plus the
amount of all net non-cash charges (including, without limitation, depreciation,
amortization, deferred tax expense, non-cash interest expense, write-downs of
inventory and other non-cash charges) that were deducted in arriving at the
Consolidated Net Income of Silgan and its Subsidiaries for such period less the
amount of all net non-cash gains and gains from sales of assets (other than
sales of inventory in the ordinary course of business) that were added in
arriving at said Consolidated Net Income for such period.
"Adjusted Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank, such Bank's Percentage and (y) at a time when a
Bank Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii)
for each Bank that is a Non-Defaulting Bank, the percentage determined by
dividing such Bank's Revolving Loan Commitment at such time by the Adjusted
Total Revolving Loan Commitment at such time, it being understood that all
references herein to Revolving
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Loan Commitments and the Adjusted Total Revolving Loan Commitment at a time when
the Total Revolving Loan Commitment or Adjusted Total Revolving Loan Commitment,
as the case may be, has been terminated shall be references to the Revolving
Loan Commitments or Adjusted Total Revolving Loan Commitment, as the case may
be, in effect immediately prior to such termination, provided that (A) no Bank's
Adjusted Percentage shall change upon the occurrence of a Bank Default from that
in effect immediately prior to such Bank Default if after giving effect to such
Bank Default, and any repayment of Revolving Loans and Swingline Loans at such
time pursuant to Section 4.02(a) or otherwise, the sum of (I) the aggregate
outstanding principal amount of Revolving Loans of all Non-Defaulting Banks,
plus (II) the aggregate outstanding principal amount of all Swingline Loans,
plus (III) the aggregate amount of Letter of Credit Outstandings, exceeds the
Adjusted Total Revolving Loan Commitment; (B) the changes to the Adjusted
Percentage that would have become effective upon the occurrence of a Bank
Default but that did not become effective as a result of the preceding clause
(A) shall become effective on the first date after the occurrence of the
relevant Bank Default on which the sum of (I) the aggregate outstanding
principal amount of the Revolving Loans of all Non-Defaulting Banks, plus (II)
the aggregate outstanding principal amount of all Swingline Loans, plus (III)
the aggregate amount of Letter of Credit Outstandings is equal to or less than
the Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-Defaulting
Bank's Adjusted Percentage is changed pursuant to the preceding clause (B) and
(ii) any repayment of such Bank's Revolving Loans, Swingline Loans or Unpaid
Drawings that were made during the period commencing after the date of the
relevant Bank Default and ending on the date of such change to its Adjusted
Percentage must be returned to such Revolving Borrower as a preferential or
similar payment in any bankruptcy or similar proceeding of such Revolving
Borrower then the change to such Non-Defaulting Bank's Adjusted Percentage
effected pursuant to said clause (B) shall be reduced to that positive change,
if any, as would have been made to its Adjusted Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted
Percentage would have resulted in the sum of the outstanding principal of
Revolving Loans made by such Bank plus such Bank's new Adjusted Percentage of
Swingline Loans and Letter of Credit Outstandings equalling such Bank's
Revolving Loan Commitment at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any
time the Total Revolving Loan Commitment less the aggregate Revolving Loan
Commitments of all Defaulting Banks.
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"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement, and shall include any successor
Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to, all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise. The term "Affiliate" with respect to the Credit Parties and any of
their Subsidiaries shall not include BTCo or any of its affiliates.
"Agreement" shall mean this Credit Agreement, as same may be
modified, supplemented or amended from time to time.
"Applicable Commitment Commission Percentage" shall mean (i)
for the period from the Effective Date through but not including the first Start
Date, .250% and (ii) from and after any Start Date to and including the
corresponding End Date, the respective percentage per annum set forth in clause
(A), (B), (C), (D) or (E) below if, but only if, as of the Test Date for such
Start Date the applicable condition set forth in clause (A), (B), (C), (D) or
(E) below, as the case may be, is met:
(A) .375% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be greater than or equal to 4.25:1.00;
(B) .3125% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 4.25:1.00 and greater than or equal to 4.00:1.00;
(C) .250% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 4.00:1.00 and greater than or equal to 3.50:1.00;
(D) .200% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period
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ended on such Test Date shall be less than 3.50:1.00 and greater than
or equal to 3.00:1.00; and
(E) .150% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 3.00:1.00.
Notwithstanding anything to the contrary contained above in this definition, the
Applicable Commitment Commission Percentage shall be .375% at all times when (i)
a Default under Section 7.01(a), 7.01(b), 9.01 or 9.05 shall exist or
(ii) any Event of Default shall exist.
"Applicable Margin" shall mean a percentage per annum equal to
(x) in the case of A Term Loans and Revolving Loans which are maintained as (i)
Base Rate Loans, .375% less the then applicable Interest Reduction Discount, if
any, and (ii) Eurodollar Loans, 1.375% less the then applicable Interest
Reduction Discount, if any, (y) in the case of B Term Loans which are maintained
as (i) Base Rate Loans, .875% less the then applicable Interest Reduction
Discount, if any, and (ii) Eurodollar Loans, 1.875% less the then applicable
Interest Reduction Discount, if any, and (z) in the case of Swingline Loans,
.375% less the then applicable Interest Reduction Discount, if any; provided,
however, that notwithstanding anything to the contrary contained above in this
definition or in the definition of Interest Reduction Discount, in no case will
the Applicable Margin ever be less than zero.
"Asset Sale" shall mean any sale, transfer or other
disposition by Silgan or any of its Subsidiaries to any Person other than to
Silgan or a Wholly-Owned Subsidiary of Silgan of any asset (including, without
limitation, any capital stock or other securities of, or equity interests in,
another Person) other than sales of assets pursuant to Sections 8.02 (i), (ii),
(iv) and (v).
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit K
(appropriately completed).
"B Banks" shall have the meaning provided in Section 4.01(c).
"B Term Loan" shall have the meaning provided in Section
1.01(b).
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"B Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "B Term Loan Commitment," as same may be (x) terminated pursuant to
Sections 3.03 and/or 9 or (y) adjusted from time to time as a result of
assignments to or from such Bank pursuant to Sections 1.13 and/or 12.04(b).
"B Term Loan Maturity Date" shall mean June 30, 2005.
"B Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(c).
"B Term Note" shall have the meaning provided in Section
1.05(a).
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(c) or (ii) a Bank having notified in writing any Borrower
and/or the Administrative Agent that such Bank does not intend to comply with
its obligations under Section 1.01(a), (b), (c) or 1.01(e) or Section 2, in case
of either clause (i) or (ii) as a result of any takeover of such Bank by any
regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" shall mean, at any time, the highest of (i) 1/2 of
1% in excess of the Adjusted Certificate of Deposit Rate, (ii) 1/2 of 1% in
excess of the Federal Funds Rate and (iii) the Prime Lending Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii)
any other Loan designated or deemed designated as a Base Rate Loan by the
respective Borrower at the time of the incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowers/Subsidiaries Guaranty" shall have the meaning
provided in Section 5.01(g).
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"Borrowing" shall mean the borrowing of one Type of Loan of a
single Tranche from all the Banks having Commitments of the respective Tranche
(or from BTCo in the case of Swingline Loans) on a given date (or resulting from
a conversion or conversions on such date) having in the case of Euro-dollar
Loans the same Interest Period; provided that Base Rate Loans incurred pursuant
to Section 1.10(b) shall be considered part of the related Borrowing of
Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking institutions
are authorized by law or other government action to close and (ii) with respect
to all notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a Business Day described in
clause (i) above and which is also a day for trading by and between banks in the
New York interbank Eurodollar market.
"Calculation Period" shall mean the Test Period most recently
ended on or prior to the date that any determination is required to be made
hereunder on a Pro Forma Basis.
"Canadian Credit Facility" shall mean a credit facility to be
entered into by Canadian Holdco and/or its Subsidiaries satisfying the
requirements of Section 8.04(xiv).
"Canadian Holdco" shall mean 827599 Ontario Inc., an Ontario
corporation and a Wholly-Owned Subsidiary of Plastics.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person (but excluding Permitted
Acquisitions).
"Capitalized Lease Obligations" shall mean, with respect to
any Person, all rental obligations of such Person which, under generally
accepted accounting principles, are or will be required to be capitalized on the
books of such
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Person, in each case taken at the amount thereof accounted for as indebtedness
in accordance with such principles.
"Carryover Amount" shall have the meaning provided in Section
8.07(a).
"Cash Collateral Account" shall have the meaning provided in
Section 4.02(a).
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than one year from the date of acquisition, (ii) time deposits,
certificates of deposit and money market deposits of any commercial bank
incorporated in the United States or Canada of recognized standing having
capital and surplus in excess of $50,000,000 with maturities of not more than
one year from the date of acquisition by such Person or any money-market fund
sponsored by a registered broker dealer or mutual fund distributor, (iii)
repurchase obligations with a term of not more than thirty days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (ii) above, (iv) commercial paper
issued by the parent corporation of any commercial bank (provided that the
parent corporation and the bank are both incorporated in the United States or
Canada) of recognized standing having capital and surplus in excess of
$500,000,000 and commercial paper issued by any Person incorporated in the
United States or Canada rated at least A-1 or the equivalent thereof by Standard
& Poor's Ratings Services or at least P-1 or the equivalent thereof by Moody's
Investors Service, Inc. and in each case maturing not more than one year after
the date of acquisition by such Person, (v) marketable direct obligations issued
by the District of Columbia or any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition and, at the time of acquisition,
rated at least "A" by Standard & Poor's Ratings Services or Moody's Investors
Service, Inc. and (vi) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (i)
through (v) above.
"CERCLA" shall mean the Comprehensive Environmental Response
Compensation of Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
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"Change of Control" shall mean (i)(a) any "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange
Act), other than MSLEF II, Mr. D. Greg Horrigan, Mr. R. Philip Silver and their
respective Affiliates, becomes the ultimate "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act), of more than 40% of the total
voting power of the Voting Stock of Silgan and (b) MSLEF II, Mr. D. Greg
Horrigan, Mr. R. Philip Silver and their respective Affiliates and any spouse,
parent, brother, sister or lineal descendant of Mr. D. Greg Horrigan or Mr. R.
Philip Silver beneficially own, directly or indirectly, less than 18% of the
total voting power of the Voting Stock of Silgan, (ii) individuals who on the
Effective Date constitute the Board of Directors of Silgan (together with any
new directors whose election by the Board of Directors of Silgan or whose
nomination by the Board of Directors of Silgan for election by Silgan's
stockholders was approved by a vote of at least a majority of the members of the
Board of Directors of Silgan then in office who either were members of the Board
of Directors of Silgan on the Effective Date 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 of Silgan then in office or
(iii) "change of control" or similar event shall occur under the Subordinated
Exchange Debentures, the 9% Senior Subordinated Debentures or any Refinancing
Subordinated Indebtedness.
"Clean-Down Period" shall mean any 30 consecutive day period
during which the average amount of the Total Unutilized Revolving Loan
Commitment shall be equal to or greater than $125,000,000 for such consecutive
30-day period.
"Co-Arrangers" shall have the meaning provided in the first
paragraph of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder and
rulings issued thereunder. Section references to the Code are to the Code as in
effect at the date of this Agreement, and to any subsequent provisions of the
Code amendatory thereof, supplemental thereto or substituted therefor.
"Co-Documentation Agents" shall have the meaning provided in
the first paragraph of this Agreement.
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"Collateral" shall mean all Pledge Agreement Collateral, all
Security Agreement Collateral, all Mortgaged Properties and all Additional
Collateral.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Secured Creditors pursuant to the Security
Documents, and shall include any successor Collateral Agent appointed pursuant
to the terms of the respective Security Document.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Commitments" shall mean any of the commitments of any Bank,
i.e., whether the A Term Loan Commitment, B Term Loan Commitment or Revolving
Loan Commitment.
"Consolidated Current Assets" shall mean the current assets of
Silgan and its Subsidiaries determined on a consolidated basis.
"Consolidated Current Liabilities" shall mean the current
liabilities of Silgan and its Subsidiaries determined on a consolidated basis,
provided that the current portion of the Loans (including any accrued interest
with respect to such current portion and accrued interest on the Subordinated
Exchange Debentures, the 9% Senior Subordinated Debentures or any Refinancing
Subordinated Indebtedness, in each case from the last regularly scheduled
interest payment date) shall not be considered current liabilities for purposes
of making the foregoing determination.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of Silgan and its Subsidiaries for such period, determined on a
consolidated basis, provided that (i) the net income of any other Person which
is not a Subsidiary of Silgan or is accounted for by Silgan by the equity method
of accounting shall be included only to the extent of the payment of dividends
or distributions by such other Person to Silgan or a Subsidiary thereof during
such period, (ii) the net income of any Subsidiary of Silgan shall be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of its income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument or law
applicable to such Subsidiary and (iii) there shall be excluded from such
calculation (to the extent otherwise included therein) (A) any non-cash charges
incurred in connection with the entering into of this Agreement, the
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issuance of Silgan's 13-1/4% Exchangeable Preferred Stock (and the exchange of
same into the Subordinated Exchange Debentures) and the issuance of the 9%
Senior Subordinated Debentures and (B) any extraordinary non-cash gains or
extraordinary non-cash charges.
"Containers" shall have the meaning provided in the first
paragraph of this Agreement.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person as a result of such Person being a general partner of
the other Person, unless the underlying obligation is expressly made
non-recourse as to such general partners, and any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall, unless expressly limited by its terms to a lesser
amount, be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
(or such lesser amount) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, each Note, the
Borrowers/Subsidiaries Guaranty, the Pledge Agreement, each Mortgage, the
Security Agreement and, after the execution and delivery thereof, each
Additional Security Document and each Election to Become a Revolving Borrower.
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"Credit Event" shall mean the making of any Loan or the
issuance of any Letter of Credit.
"Credit Party" shall mean and include Silgan, each of the
Revolving Borrowers and each of the other Subsidiary Guarantors.
"Cumulative Consolidated Net Income" shall mean, at any time
for any determination thereof, the Consolidated Net Income of Silgan and its
Subsidiaries for the period (taken as one accounting period) commencing on April
1, 1997 and ending on the last day of the then most recently ended fiscal
quarter of Silgan.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Designated Credit Parties" shall mean those Credit Parties
that are from time to time party to the Accounts Receivables Facility Documents.
"Dividend" shall mean, with respect to any Person, that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock of such Person and, in the case
of Silgan, other than additional shares of Qualified Preferred Stock) or cash to
its stockholders or partners as such, or redeemed, retired, purchased or
otherwise acquired, directly or indirectly, for a consideration any shares of
any class of its capital stock or any partnership interests outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock or any partnership interests of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock).
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
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"Domestic Subsidiary" shall mean each Subsidiary of Silgan
incorporated or organized in the United States or any State or territory
thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"EBIT" shall mean, for any period, the Consolidated Net Income
of Silgan and its Subsidiaries for such period, before Interest Expense and
provision for taxes and (to the extent not already otherwise excluded from the
calculation thereof under this Agreement) without giving effect to any
extraordinary non-cash gains or extraordinary non-cash losses and gains or
losses from sales of assets (other than sales of inventory in the ordinary
course of business), or any non-cash adjustments resulting from changes in value
of employee stock options.
"EBITDA" shall mean, for any period, EBIT for such period,
adjusted by adding thereto the amount of all depreciation and all amortization
of intangibles (including covenants not to compete), goodwill and loan fees that
were deducted in arriving at EBIT for such period.
"Effective Date" shall have the meaning provided in Section
12.10.
"Election to Become a Revolving Borrower" shall mean a
certificate in the form of Exhibit J.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution, any fund that invests in loans or any other
"accredited investor" (as defined in Regulation D of the Securities Act).
"End Date" shall mean, for any Margin Reduction Period, the
last day of such Margin Reduction Period.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any person (as defined in Section
3(9) of ERISA) (including each trade or business (whether or not incorporated))
which together with any
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Borrower or any Subsidiary of any Borrower would be deemed to be a "single
employer" or a member of the same "controlled group" of "contributing sponsors"
within the meaning of Section 4001 of ERISA.
"Eurodollar Loan" shall mean each Loan (other than a Swingline
Loan) designated as a Eurodollar Loan by any Borrower at the time of the
incurrence thereof or conversion thereto by such Borrower.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Euro-dollar market by BTCo for
Dollar deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the Eurodollar Loan of BTCo with maturities
comparable to the Interest Period applicable to such Eurodollar Loan commencing
two Business Days thereafter as of 10:00 A.M. (New York time) on the date which
is two Business Days prior to the commencement of such Interest Period, divided
(and rounded off to the nearest 1/100 of 1%) by (b) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section
9.
"Excess Cash Flow" shall mean, for any period, the remainder
of (i) the sum of (I) Adjusted Consolidated Net Income for such period and (II)
the decrease, if any, in Working Capital from the first day to the last day of
such period, minus, without duplication, (ii) the sum of (I) the amount of
Capital Expenditures made by Silgan and its Subsidiaries on a consolidated basis
during such period, other than Capital Expenditures to the extent financed
through insurance or condemnation proceeds, Asset Sale proceeds, proceeds from a
sale and leaseback transaction, proceeds utilizing the Net Equity Proceeds
Amount or the Retained Excess Cash Flow Amount or Indebtedness (other than
Revolving Loans or Swingline Loans) during such period, (II) the aggregate
principal amount of permanent payments or prepayments on Indebtedness for
borrowed money of Silgan and its Subsidiaries (other than (A) repayments of
Intercompany Loans, (B) repayments of Subordinated Exchange Debentures, 9%
Senior Subordinated Debentures or any Refinancing
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Subordinated Indebtedness and (C) repayments of Loans, provided that repayments
of Loans shall be deducted in determining Excess Cash Flow if such repayments
were (1) required as a result of an A Term Loan Scheduled Repayment under
Section 4.02(b), (2) required as a result of a B Term Loan Scheduled Repayment
under Section 4.02(c) or (3) made as a voluntary prepayment other than a
voluntary prepayment made with Net Equity Proceeds or with the Retained Excess
Cash Flow Amount (but in the case of a voluntary prepayment of Revolving Loans
or Swingline Loans, only to the extent accompanied by a voluntary reduction to
the Total Revolving Loan Commitment)) on a consolidated basis during such
period, (III) the increase, if any, in Working Capital from the first day to the
last day of such period, (IV) the aggregate amount of costs and expenses
incurred by Silgan and its Subsidiaries during such period in connection with
the consolidation and plant rationalization of their operations to the extent
such amounts have not reduced Adjusted Consolidated Net Income for such period
or constituted Capital Expenditures made during such period, (V) the aggregate
amount of Investments made under Section 8.05(xiii) during such period except to
the extent utilizing proceeds from the Permitted Additional Investment Basket
Amount and (VI) the aggregate amount of Dividends paid pursuant to Sections
8.03(iii), (iv) and (v) during such period (but, in the case of Section 8.03(v),
only to the extent that the payment of such Dividends have not already reduced
Adjusted Consolidated Net Income for such period).
"Excess Cash Payment Date" shall mean the date occurring 120
days after the last day of each fiscal year of Silgan (beginning with its fiscal
year ending on December 31, 1997).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of Silgan.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of August 1, 1995, among Silgan, Containers, Plastics, the financial
institutions party thereto, BTCo, as administrative agent, Bank of America
Illinois, as documentation agent and BTCo and Bank of America Illinois, as
co-arrangers, as amended, modified or supplemented through the Initial Borrowing
Date.
"Existing Indebtedness" shall have the meaning provided in
Section 8.04(ii).
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"Existing Letters of Credit" shall have the meaning provided
in Section 2.01.
"Existing Mortgages" shall mean all Mortgages granted by the
Credit Parties pursuant to the Existing Credit Agreement and which have not been
released by the lenders thereunder prior to the Effective Date.
"Facing Fees" shall have the meaning provided in Section
3.01(d).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"Foreign Subsidiary" shall mean each Subsidiary of Silgan
which is not a Domestic Subsidiary.
"Guarantor" shall mean Silgan, each Revolving Borrower and
each other Subsidiary Guarantor in their capacities as such.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price of
property or services, (ii) indebtedness under all bankers' acceptances, and the
face amount of all letters of credit issued for the account of such Person and
all drafts drawn thereunder, (iii) all liabilities secured by any Lien on any
property owned by such Person, whether or not such liabilities have been assumed
by such Person, (iv) the aggregate amount required to be capitalized under
leases under which such Person is the lessee and (v) all Contingent Obligations
of such Person. Notwithstanding the foregoing, Indebtedness (x) shall not
include trade payables and accrued expenses incurred by any Person in accordance
with customary practices and in the
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ordinary course of business of such Person and (y) shall include the obligations
under the Accounts Receivable Facility to the extent that such obligations are
required to be reflected as a liability on the consolidated balance sheet of
Silgan in accordance with generally accepted accounting principles in the United
States.
"Initial Borrowing Date" shall mean the date occurring on or
after the Effective Date on which the initial Borrowing of Loans hereunder
occurs.
"Intercompany Loan" shall mean any intercompany loan or
advance between Silgan and any of its Subsidiaries or between any Subsidiaries
of Silgan, which in the case of an Intercompany Loan made by a Credit Party,
shall be evidenced by an Intercompany Note.
"Intercompany Note" shall mean a promissory note in form and
substance reasonably satisfactory to the Administrative Agent evidencing an
Intercompany Loan.
"Interest Coverage Ratio" shall mean, for any period, the
ratio of (x) EBITDA for such period to (y) Interest Expense for such period.
"Interest Determination Date" shall mean the second Business
Day prior to the commencement of any Interest Period relating to a Eurodollar
Loan.
"Interest Expense" shall mean for any period, the total
consolidated interest expense of Silgan and its Subsidiaries for such period
(without giving effect to any amortization or write-off of up-front fees and
expenses in connection with any debt issuance).
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate cap agreement, interest rate swap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"Interest Reduction Discount" shall mean (i) for the period
from the Effective Date through but not including the first Start Date, .375%
and (ii) from and after any Start Date to and including the corresponding End
Date, the percentage set forth in clause (A), (B), (C), (D), (E), (F), (G) or
(H) below if, but only if, as of the Test Date for
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such Start Date the applicable condition set forth in clause (A), (B), (C), (D),
(E), (F), (G) or (H) below, as the case may be, is met:
(A) .125% if, but only if, as of the Test Date for such Start
Date, the Leverage Ratio for the Test Period ended on such Test Date is
less than 4.25:1.00 and greater than or equal to 4.00:1.00;
(B) .250% if, but only if, as of the Test Date for such Start
Date, the Leverage Ratio for the Test Period ended on such Test Date is
less than 4.00:1.00 and greater than or equal to 3.75:1.00;
(C) .375% if, but only if, as of the Test Date for such Start
Date, the Leverage Ratio for the Test Period ended on such Test Date is
less than 3.75:1.00 and greater than or equal to 3.50:1.00;
(D) .500% if, but not only if, as of the Test Date for such
Start Date, the Leverage Ratio for the Test Period ended on such Test
Date is less than 3.50:1.00 and greater than or equal to 3.25:1.00;
(E) .625%% if, but only if, as of the Test Date for such Start
Date, the Leverage Ratio for the Test Period ended on such Test Date is
less than 3.25:1.00 and greater than or equal to 3.00:1.00;
(F) .750% if, but only if, as of the Test Date for such Start
Date, the Leverage Ratio for the Test Period ended on such Test Date is
less than 3.00:1.00 and greater than or equal to 2.75:1.00;
(G) .875% if, but only if, as of the Test Date for such Start
Date, the Leverage Ratio for the Test Period ended on such Test Date is
less than 2.75:1.00 and greater than or equal to 2.50:1.00; or
(H) 1.000% if, but only if, as of the Test Date for such Start
Date, the Leverage Ratio for the Test Period ended on such Test Date is
less than 2.50:1.00.
Notwithstanding anything to the contrary above in this definition the Interest
Reduction Discount shall be zero at all times when (i) a Default under Section
7.01(a), 7.01(b), 9.01, or 9.05 shall exist or (ii) any Event of Default shall
exist.
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"Joint Venture" shall mean any Person (other than a Subsidiary
of Silgan) in which Silgan (directly or through one or more of its Subsidiaries)
owns 50% or less of the equity interests.
"Leaseholds" of any Person shall mean all of the right, title
and interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements, and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fees" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, for any period, the ratio of (x)
the sum of (I) Total Indebtedness (excluding Revolving Outstandings) as of the
last day of such period plus (II) the Revolving Outstandings on the December 31
immediately preceding the last day of such period (or, in the case of a Test
Period ended on December 31 in any fiscal year of Silgan, the Revolving
Outstandings on such December 31) to (y) EBITDA for then the most recently ended
Test Period. In determining the Leverage Ratio for any period, there shall be
excluded from Total Indebtedness an amount equal to the amount of unrestricted
cash and Cash Equivalents on the consolidated balance sheet of Silgan as of the
last day of such period to the extent, but only to the extent, no Revolving
Loans or Swingline Loans are outstanding on such day, provided, that in no event
shall more than $50,000,000 be deducted in determining Total Indebtedness as of
the last day of such period (or, in the case of calculating the Leverage Ratio
for purposes of Section 4.02(d) for the Excess Cash Payment Period ending on
December 31, 1997 only, no more than $70,000,000 may be deducted in determining
Total Indebtedness as of the last day of such Excess Cash Payment Period).
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien
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(statutory or other), preference, priority or other security agreement of any
kind or nature whatsoever (including, without limitation, any conditional sale
or other title retention agreement and any lease having substantially the same
effect as any of the foregoing).
"Loan" shall mean each A Term Loan, each B Term Loan, each
Revolving Loan and each Swingline Loan.
"Majority Banks" of any Tranche shall mean those
Non-Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if all outstanding Obligations of the other Tranches
under this Agreement were repaid in full and all Commitments with respect
thereto were terminated.
"Management Agreements" shall have the meaning provided in
Section 5.01(e).
"Management Services Agreements" shall mean each of the
Amended and Restated Management Service Agreements, each dated as of February
14, 1997, between each of Silgan, Containers and Plastics and S&H Inc., as any
such Management Services Agreement may be amended, modified or supplemented from
time to time pursuant to the terms hereof and thereof, as well as any additional
Management Services Agreement entered into between any other Subsidiary of
Silgan and S&H Inc. so long as the terms and conditions thereof are
substantially similar to the Management Services Agreements existing on the
Initial Borrowing Date.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(e).
"Margin Reduction Period" shall mean each period which shall
commence on a date on which the financial statements are delivered pursuant to
Section 7.01(a) (other than in respect of the fourth fiscal quarter of any
fiscal year of Silgan) or Section 7.01(b), as the case may be, and which shall
end on the earlier of (i) the date of actual delivery of the next financial
statements pursuant to Section 7.01(a) (other than in respect of the fourth
fiscal quarter of any fiscal year of Silgan) or Section 7.01(b), as the case may
be, and (ii) the latest date on which the next financial statements are required
to be delivered pursuant to Section 7.01(a) (other than in respect of the fourth
fiscal quarter of any fiscal year of Silgan) or Section 7.01(b), as the case may
be; provided that the first Margin Reduction Period shall commence on the date
of delivery of the financial statements
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in respect of the fiscal quarter of Silgan ending on December 31, 1997.
"Margin Stock" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System.
"Maturity Date" shall mean the A Term Loan Maturity Date, the
B Term Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline
Expiry Date, as the case may be.
"Maximum Amount" shall have the meaning provided in Section
12.20.
"Maximum Swingline Amount" shall mean $20,000,000.
"Minimum Borrowing Amount" shall mean (i) for Term Loans,
$5,000,000, (ii) for Revolving Loans, $2,500,000 and (iii) for Swingline Loans,
$250,000.
"Mortgage Policies" shall mean the mortgage title insurance
policies issued in respect of each of the Mortgaged Properties.
"Mortgaged Properties" shall mean all Real Property of the
Credit Parties listed on Schedule III and designated as a "Mortgaged Property"
therein, as well as any additional Real Property subject to a Mortgage after the
Initial Borrowing Date.
"Mortgages" shall mean mortgages, deeds of trust, leasehold
mortgages and leasehold deeds of trust granted in favor of the Collateral Agent
for the benefit of the respective Secured Creditors with respect to the
Mortgaged Properties, which mortgages, deeds of trust, leasehold mortgages and
leasehold deeds of trust are or shall be in a form which is satisfactory to the
Administrative Agent, with such changes as are necessary or desirable in the
opinion of local counsel to conform with applicable state law and procedure.
"MSLEF II" shall mean The Morgan Stanley Leveraged Equity Fund
II, L.P., a Delaware limited partnership.
"NAIC" shall mean the National Association of Insurance
Commissioners.
"Net Debt Proceeds" shall mean, with respect to any incurrence
of Indebtedness for borrowed money, the cash
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proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith) received by the respective Person from the
respective incurrence of such Indebtedness for borrowed money.
"Net Equity Proceeds" shall mean, with respect to each sale or
issuance by Silgan of its equity, the cash proceeds received by Silgan therefrom
(net of underwriting discounts and commissions and other costs associated
therewith).
"Net Equity Proceeds Amount" shall mean, at any time, an
amount equal to the Net Equity Proceeds received by Silgan after the Initial
Borrowing Date, with the Net Equity Proceeds Amount to be immediately reduced by
(i) the amount of any voluntary prepayments of Term Loans made pursuant to
Section 4.01(a) with Net Equity Proceeds, (ii) the amount of any Permitted
Subordinated Debt Repurchases made with Net Equity Proceeds, (iii) the amount of
any Capital Expenditures or Permitted Acquisitions made with Net Equity
Proceeds, (iv) the amount of any Investments made pursuant to Section 8.05(xiii)
or guarantees entered into pursuant to Section 8.04(xiii) in each case with Net
Equity Proceeds and (v) the amount of Dividends paid pursuant to Section
8.03(iv) made with Net Equity Proceeds.
"Net Insurance Proceeds" shall mean, with respect to any
Recovery Event, the cash proceeds (net of reasonable costs and taxes associated
therewith) received by the respective Person therefrom.
"Net Sale Proceeds" shall mean, for any Asset Sale or sale and
leaseback transaction, the gross cash proceeds (including any cash received by
way of deferred payment pursuant to a promissory note, receivable or otherwise,
but only as and when received) received from such Asset Sale or sale and
leaseback transaction net of (i) the reasonable costs incurred in connection
therewith, (ii) the amount of such gross cash proceeds required to be used to
repay any Indebtedness (other than Indebtedness under this Agreement) which is
secured by the respective assets which were sold and (iii) the estimated
marginal increase in taxes which will be payable by Silgan's consolidated group
with respect to the year in which sale occurs as a result thereof.
"9% Senior Subordinated Debenture Indenture" shall mean the
Indenture, dated as of June 9, 1997, between Silgan and The First National Bank
of Chicago, as Trustee, and as
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amended by the First Supplemental Indenture thereto, dated as of June 24, 1997.
"9% Senior Subordinated Debenture Documents" shall mean the 9%
Senior Subordinated Debentures, the 9% Senior Subordinated Debenture Indenture
and each of the other documents executed in connection therewith.
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
"Note" shall mean each A Term Note, each B Term Note, each
Revolving Note and each Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at 130 Liberty Street, New York, New York 10006, or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Co-Arrangers, the Collateral Agent or any Bank
pursuant to the terms of this Agreement or any
other Credit Document.
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Office" shall mean the office of the Administrative
Agent located at 130 Liberty Street, New York, New York 10006, or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time; provided, that if the Percentage of
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any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"Permitted Acquisition" shall have the meaning provided in
Section 8.02(x).
"Permitted Additional Investment Basket Amount" shall mean, at
any time, an amount equal to the sum of (I) the Net Equity Proceeds Amount at
such time and (II) the Retained Excess Cash Flow Amount at such time.
"Permitted Encumbrance" shall mean, with respect to any
Mortgaged Property, such exceptions to title as are set forth in the Mortgage
Policy delivered with respect thereto, all of which exceptions must be
acceptable to the Administrative Agent in its reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section
8.01.
"Permitted Subordinated Debt Repurchases" shall mean one or
more open market or privately negotiated transactions or voluntary Refinancings
pursuant to which Silgan Refinances outstanding 9% Senior Subordinated
Debentures, Subordinated, Exchange Debentures or Refinancing Subordinated
Indebtedness so long as (i) at the time of each such Refinancing, no Default or
Event of Default then exists or would result therefrom, (ii) the sources of
funds used to effect any such Refinancing derive solely from the Net Equity
Proceeds Amount at such time, the Retained Excess Cash Flow Amount at such time,
Refinancing Subordinated Indebtedness and, in the case of the Subordinated
Exchange Debentures, Revolving Loans and (iii) immediately following any such
Refinancing, the 9% Senior Subordinated Debentures, the Subordinated Exchange
Debentures or the Refinancing Subordinated Indebtedness so Refinanced are
cancelled by Silgan.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) or any single-employer plan (as defined in Section
4001(a)(15) of ERISA), subject to
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Title IV of ERISA, which is maintained or contributed to, or at any time during
the five calendar years preceding the date of this Agreement was maintained or
contributed to by any Borrower, any Subsidiary of any Borrower or any ERISA
Affiliate.
"Plastics" shall have the meaning provided in the first
paragraph of this Agreement.
"Pledge Agreement" shall have the meaning provided in Section
5.01(h).
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall have the meaning provided in the
Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, in connection with any
calculation of compliance with any financial covenant or financial term required
by this Agreement to be determined on a Pro Forma Basis, the calculation thereof
after giving effect on a pro forma basis to (w) the assumption, incurrence or
issuance of any Indebtedness or capital stock (other than revolving
Indebtedness, except to the extent same is incurred to refinance other
outstanding Indebtedness, or to finance Permitted Acquisitions or Investments
made pursuant to Section 8.05(xiii)) during (and, in the case of determining
compliance with Section 8.02(x), after the first day of) the relevant
Calculation Period as if such Indebtedness had been incurred or capital stock
issued (and the proceeds thereof applied) on the first day of the relevant
Calculation Period, it being understood that to the extent any Indebtedness is
incurred to purchase any working capital in connection with a Permitted
Acquisition, such amount shall be based on the average working capital of the
Person or assets so acquired for the four quarter period immediately preceding
the date of such acquisition, (x) the permanent repayment of any Indebtedness
(other than revolving Indebtedness (except to the extent accompanied by a
permanent commitment reduction)
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and any A Term Loan Scheduled Repayment, B Term Loan Scheduled Repayment or
scheduled principal amortization payment under the Canadian Credit Facility)
during (and, in the case of determining compliance with Section 8.02(x), after
the first day of) the relevant Calculation Period as if such Indebtedness had
been retired or redeemed on the first day of the relevant Calculation Period,
(y) the consummation of any Specified Asset Sale or sale and leaseback
transaction during (and, in the case of determining compliance with Section
8.02(x), after the first day of) the relevant Calculation Period as if such
Specified Asset Sale or sale and leaseback transaction had been consummated on
the first day of the relevant Calculation Period and (z) all Permitted
Acquisitions, consummated during (and, in the case of determining compliance
with Section 8.02(x), after the first day of) the relevant Calculation Period
and, in the case of determining compliance with Section 8.02(x), on or prior to
the date of the respective Permitted Acquisition then being effected, with the
following rules to apply in connection with the foregoing:
(i) all Indebtedness and capital stock (x) (other than
revolving Indebtedness, except to the extent same is incurred to
refinance other outstanding Indebtedness or to finance Permitted
Acquisitions or Investments made pursuant to Section 8.05(xiii))
assumed, incurred or issued during (and, in the case of determining
compliance with Section 8.02(x), after the first day of) the relevant
Calculation Period (whether incurred to finance a Permitted Acquisition
or an Investment made pursuant to Section 8.05(xiii), to refinance
Indebtedness or otherwise) shall be deemed to have been incurred or
issued (and the proceeds thereof applied) on the first day of the
respective Calculation Period and remain outstanding through the date
of determination and (y) (other than revolving Indebtedness (except to
the extent accompanied by a permanent commitment reduction))
permanently retired or redeemed during (and, in the case of determining
compliance with Section 8.02(x), after the first day of) the relevant
Calculation Period shall be deemed to have been retired or redeemed on
the first day of the respective Calculation Period and remain retired
through the date of determination;
(ii) all Indebtedness assumed to be outstanding pursuant to
preceding clause (i) shall be deemed to have borne interest at (x) the
rate applicable thereto, in the case of fixed rate indebtedness or (y)
in the case of floating rate Indebtedness, the average rate which
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would have been applicable thereto during the respective period when
same was deemed outstanding (although interest expense with respect to
any Indebtedness for periods while same was actually outstanding during
the respective period shall be calculated using the actual rates
applicable thereto while same was actually outstanding); and
(iii) in making any determination of EBITDA, pro forma effect
shall be given to any Permitted Acquisition and any Specified Asset
Sale and sale and leaseback transaction for the periods described
above, taking into account, in the case of any Permitted Acquisition,
any factually supportable and identifiable cost savings and expenses
which are directly attributable to such Permitted Acquisition as if
such cost savings or expenses were realized on the first day of the
respective period.
In connection with any Permitted Acquisition in which the aggregate
consideration exceeds $50,000,000, or after more than $100,000,000 in Permitted
Acquisitions have occurred in any twelve-month period (including, for this
purpose, any Permitted Acquisition then being consummated which would cause the
aggregate consideration for all such Permitted Acquisitions to exceed
$100,000,000), Silgan also shall deliver a statement to the Banks in connection
with any such Permitted Acquisition, in form and substance reasonably acceptable
to the Administrative Agent, of a nationally recognized independent accounting
firm verifying the methodology used by Silgan in making the pro forma
adjustments for the cost savings and expenses, if any, which are directly
attributable to any such Permitted Acquisition. In addition, to the extent that
either historical financial information of the Person or assets acquired as part
of any Permitted Acquisition is not available or pro forma adjustments have been
made to any available historical financial information, Silgan also shall
provide a certificate of its chief financial officer certifying that the
financial information used to determine such pro forma calculations reasonably
reflects the results that would have occurred had such Permitted Acquisition
occurred on the first day of the most recently ended Test Period, and in the
case of any Permitted Acquisition in which the aggregate consideration exceeds
$50,000,000, or after more than $100,000,000 in Permitted Acquisitions have
occurred in any twelve-month period (including, for this purpose, any Permitted
Acquisition then being consummated which would cause the aggregate consideration
for all such Permitted
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Acquisitions to exceed $100,000,000), Silgan also shall deliver to the Banks in
connection with any such Permitted Acquisition, a statement in form and
substance reasonably acceptable to the Administrative Agent, of a nationally
recognized independent accounting firm verifying the methodology used by Silgan
in making the pro forma calculations referred to above. It is understood and
agreed that for purposes of the definition of Pro Forma Basis, a Permitted
Acquisition shall include the three permitted acquisitions consummated by Silgan
and its Subsidiaries in 1997 pursuant to the Existing Credit Agreement.
"Projections" shall have the meaning provided in Section
5.01(o).
"Qualified Preferred Stock" shall mean any preferred stock of
Silgan so long as the terms of any such preferred stock (i) do not contain any
mandatory put, redemption, repayment, sinking fund or other similar provision
occurring before June 30, 2006, (ii) do not require the cash payment of
dividends prior to the fifth anniversary after the date of the issuance thereof
(provided that the terms of such Qualified Preferred Stock shall provide that
the payment of such Dividends are otherwise subject to the provisions set forth
in this Agreement, as the same may be amended, modified, replaced or refinanced
from time to time), (iii) do not contain any covenants that are more restrictive
in any material respect than those covenants contained in the 9% Senior
Subordinated Debenture Indenture, (iv) do not grant the holders thereof any
voting rights except for (x) voting rights required to be granted to such
holders under applicable law and (y) limited customary voting rights on
fundamental matters such as mergers, consolidations, sales of all or
substantially all of the assets of Silgan, liquidations involving Silgan or
amendments to any of the covenants set forth therein, and (v) are otherwise
reasonably satisfactory to the Co-Arrangers.
"Quarterly Payment Date" shall mean the last Business Day of
each March, June, September and December.
"RCRA" shall mean the Resources Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all of the right,
title and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
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"Receivables Subsidiary" shall mean a special purpose
Wholly-Owned Domestic Subsidiary of Silgan formed to enter into the Accounts
Receivable Facility.
"Recovery Event" shall mean the receipt by Silgan or any of
its Subsidiaries of any cash insurance proceeds or casualty or condemnation
awards payable by reason of theft, loss, physical destruction, damage, taking or
any other similar event with respect to any property or assets of Silgan or any
of its Subsidiaries.
"Refinance," "Refinanced" or "Refinancing" shall mean, when
used in respect of the Subordinated Exchange Debentures, the 9% Senior
Subordinated Debentures and/or any Refinancing Subordinated Indebtedness, to
refinance, redeem, repay, repurchase, acquire or defease any such issue of
Indebtedness.
"Refinancing Subordinated Indebtedness" shall have the meaning
provided in Section 8.04(x).
"Refinancing Subordinated Indebtedness Documents" shall mean
all indentures, securities purchase agreements, note agreements and other
documents and agreements entered into in connection with any Refinancing
Subordinated Indebtedness.
"Register" shall have the meaning provided in Section 12.16.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
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"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC.
"Required Appraisal" shall have the meaning provided in
Section 7.11.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose outstanding Term Loans and Revolving Loan Commitments (or after the
termination thereof, outstanding Revolving Loans and Adjusted Percentage of
outstanding Swingline Loans and Letter of Credit Outstandings) represent an
amount greater than 50% of the sum of all outstanding Term Loans of
Non-Defaulting Banks and the Adjusted Total Revolving Loan Commitment (or, if
after the Total Revolving Loan Commitment has been terminated, the sum of the
then total outstanding Revolving Loans of Non-Defaulting Banks and the aggregate
Adjusted Percentages of all Non-Defaulting Banks of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time).
"Retained Excess Cash Flow Amount" shall mean, initially zero
and at any time on or after January 1, 1998, a cumulative amount equal to the
remainder of (x) 100% of Excess Cash Flow for each Excess Cash Payment Period
less (y) the amount (if any) required to be repaid pursuant to Section 4.02(d)
in respect of each such Excess Cash Payment Period, with the Retained Excess
Cash Flow Amount to be immediately reduced by (i) the amount of any voluntary
prepayments of Term Loans made pursuant to Section 4.01(a) utilizing the
Retained Excess Cash Flow Amount, (ii) the amount of any Permitted Subordinated
Debt Repurchases made with the proceeds of the Retained Excess Cash Flow Amount
(including all amounts expended in respect of principal, premium, and fees, but
excluding interest), (iii) the amount of any Capital Expenditures made with the
proceeds of the Retained Excess Cash Flow Amount and (iv) the amount of any
Investments made pursuant to Section 8.05(xiii) or guaranties
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entered into pursuant to Section 8.04(xiii) in excess of $100,000,000 in the
aggregate in each case made with the proceeds of the Retained Excess Cash Flow
Amount.
"Revolving Borrower" shall mean each of Containers, Plastics
and any other Wholly-Owned Domestic Subsidiary of Silgan (other than the
Receivables Subsidiary) that becomes a Revolving Borrower pursuant to Section
5.03.
"Revolving Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 9,(y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to
Sections 1.13 and/or 12.04(b) or (z) increased from time to time pursuant to
Section 12.17.
"Revolving Loan Maturity Date" shall mean December 31, 2003.
"Revolving Loans" shall have the meaning provided in Section
1.01(c).
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"Revolving Outstandings" shall mean, at any time, the sum of
the aggregate principal amount of Revolving Loans and Swingline Loans then
outstanding plus the aggregate amount of all Letter of Credit Outstandings at
such time, provided that the term Revolving Outstandings shall not include any
Revolving Loans or Swingline Loans the proceeds of which were used to effect a
Permitted Acquisition, an Investment pursuant to Section 8.05(xiii) or a
Permitted Subordinated Debt Repurchase.
"SEC" shall have the meaning provided in Section 7.01(g).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b).
"Secured Creditors" shall have the meaning provided in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
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"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
"Security Agreement" shall have the meaning provided in
Section 5.01(i).
"Security Agreement Collateral" shall mean and include all
"Collateral" as defined in the Security Agreement.
"Security Documents" shall mean and include the Pledge
Agreement, the Mortgages, the Security Agreement and, after the execution and
delivery thereof, each Additional Security Document.
"Silgan" shall have the meaning provided in the first
paragraph of this Agreement.
"Silgan Plastics Canada" shall mean Silgan Plastics Canada
Inc., an Ontario corporation and a Wholly-Owned Subsidiary of Canadian Holdco.
"Specified Asset Sale" shall mean any Asset Sale in which the
gross cash proceeds received therefrom is at least $1,000,000.
"Start Date" shall mean, with respect to any Margin Reduction
Period, the first day of such Margin Reduction Period.
"Stated Amount" of each Letter of Credit shall mean the
maximum amount available to be drawn thereunder, determined without regard to
whether any conditions to drawing could then be met.
"Subordinated Exchange Debenture Documents" shall mean the
Subordinated Exchange Debentures, the Subordinated Exchange Debenture Indenture
and each of the other documents executed in connection therewith.
"Subordinated Exchange Debenture Indenture" shall mean the
Indenture, dated as of July 22, 1996, between Silgan and State Street Bank and
Trust Company, as Trustee.
"Subordinated Exchange Debentures" shall mean Silgan's 13-1/4%
Exchange Debentures due 2006 which were issued pursuant to the Subordinated
Exchange Debenture Indenture.
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"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, limited
liability company, joint venture or other entity in which such Person and/or one
or more Subsidiaries of such Person has more than a 50% equity interest at the
time. Unless the context indicates otherwise, all references herein to
Subsidiaries are references to Subsidiaries of any Borrower.
"Subsidiary Guarantor" shall mean (i) each Revolving Borrower
in its capacity as a guarantor under the Borrowers/Subsidiaries Guaranty and
(ii) each other Domestic Subsidiary of Silgan (other than the Receivables
Subsidiary) which is at least 80% owned (directly or indirectly) by Silgan.
"Supermajority Banks" of any Tranche shall mean those
Non-Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if (x) all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50% contained therein
were changed to "66-2/3%".
"Swingline Expiry Date" shall mean the date which is two
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(d).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Tax Sharing Agreement" shall mean the Tax Allocation
Agreement, dated as of July 13, 1990, as amended on December 21, 1993 and August
1, 1995, by and among Silgan and each of its Domestic Subsidiaries party
thereto, as amended, modified or supplemented from time to time.
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"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall mean each A Term Loan and each B Term Loan.
"Test Date" shall mean, with respect to any Start Date, the
last day of the most recent fiscal quarter of Silgan ended immediately prior to
such Start Date.
"Test Period" shall mean each period of four consecutive
fiscal quarters of Silgan (in each case taken as one accounting period).
"Total A Term Loan Commitment" shall mean, at any time, the
sum of the A Term Loan Commitments of each of the Banks.
"Total B Term Loan Commitment" shall mean, at any time, the
sum of the B Term Loan Commitments of each of the Banks.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Indebtedness" shall mean, at any time, the aggregate
amount of Indebtedness of Silgan and its Subsidiaries determined on a
consolidated basis at such time.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment less (y) the sum of the aggregate principal amount of Revolving Loans
and Swingline Loans then outstanding plus the then aggregate amount of Letter of
Credit Outstandings.
"Tranche" shall mean the respective facilities and commitments
utilized in making Loans hereunder, with there being four separate Tranches,
i.e., A Term Loans, B Term Loans, Revolving Loans and Swingline Loans.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
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"UCC" shall mean the Uniform Commercial Code as in effect in
the relevant jurisdictions.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the present value of the accrued benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto determined in accordance with Section 412 of the
Code.
"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided in Section
2.05(a).
"Unutilized Revolving Loan Commitment" with respect to any
Bank, at any time, shall mean such Bank's Revolving Loan Commitment at such time
less the sum of (i) the aggregate outstanding principal amount of Revolving
Loans made by such Bank and (ii) such Bank's Adjusted Percentage of the Letter
of Credit Outstandings.
"Voting Stock" shall mean the capital stock of Silgan
ordinarily having the power to vote for the election of directors of Silgan.
"Waivable Mandatory Repayment" shall have the meaning provided
in Section 4.02(k).
"Waivable Voluntary Prepayment" shall have the meaning
provided in Section 4.01(c).
"Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person that is a Domestic
Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture, limited liability company or other
entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such
Person has a 100% equity interest at such time.
"Working Capital" shall mean, at any time, Consolidated
Current Assets (excluding cash and Cash Equivalents) less Consolidated Current
Liabilities at such
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time; provided, however, for purposes of calculating Excess Cash Flow for any
Excess Cash Payment Period, Working Capital shall be calculated on a pro forma
basis to give effect to any Permitted Acquisitions made during such period.
10.02 Principles of Construction. (a) All references to
sections, schedules and exhibits are to sections, schedules and exhibits in or
to this Agreement unless other- wise specified.
(b) All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles in the
United States in conformity with those used in the preparation of the last
audited financial statements referred to in Section 6.07(a).
Section 11. The Administrative Agent and the Co-Arrangers.
11.01 Appointment. The Banks hereby designate Bankers Trust
Company as Administrative Agent (for purposes of this Section 11, the term
"Administrative Agent" shall include Bankers Trust Company in its capacity as a
Co-Arranger and as Collateral Agent pursuant to the Security Documents) to act
as specified herein and in the other Credit Documents. The Banks hereby
designate Bank of America National Trust & Savings Association as a Co-Arranger
(for purposes of this Section 11, the term "Co-Arranger" as it applies to Bank
of America Illinois shall include Bank of America National Trust & Savings
Association in its capacity as Syndication Agent) to act as specified herein and
in the other Credit Documents. The Banks hereby designate Goldman Sachs Credit
Partners L.P. and Morgan Stanley Senior Funding, Inc. as a Co-Arranger (for
purposes of this Section 11, the term "Co-Arranger" as it applies to Goldman
Sachs Credit Partners L.P. and Morgan Stanley Senior Funding, Inc. shall include
Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior Funding, Inc. in
their capacity as a "Co-Documentation Agent") to act as specified herein and in
the other Credit Documents. Each Bank hereby irrevocably authorizes the
Administrative Agent and the Co-Arrangers to take such action on its behalf
under the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent and the Co-Arrangers by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. The Administrative Agent and the Co-
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Arrangers may perform any of their respective duties hereunder by or through
their respective officers, directors, agents or employees.
11.02 Nature of Duties. Neither the Administrative Agent nor
any Co-Arranger shall have any duties or responsibilities except those expressly
set forth in this Agreement and the other Credit Documents. Neither the
Administrative Agent, any Co-Arranger nor any of their respective officers,
directors, agents, affiliates or employees shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross negligence
or willful misconduct. The duties of the Administrative Agent and the
Co-Arrangers shall be mechanical and administrative in nature; neither the
Administrative Agent nor any Co-Arranger shall have by reason of this Agreement
or any other Credit Document a fiduciary relationship in respect of any Bank;
and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the
Administrative Agent or any Co-Arranger any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein.
Notwithstanding anything to the contrary contained in this Agreement, the Co-
Documentation Agents and the Syndication Agent, in their capacity as such, shall
have no duties or responsibilities under this Agreement or under the other
Credit Documents.
11.03 Lack of Reliance on the Administrative Agent and
Co-Arrangers. Independently and without reliance upon the Administrative Agent
or any Co-Arranger, each Bank, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of Silgan and its Subsidiaries in connection with the
making and the continuance of the Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of Silgan and its Subsidiaries and, except as expressly provided in this
Agreement, neither the Administrative Agent nor any Co-Arranger shall have any
duty or responsibility, either initially or on a continuing basis, to provide
any Bank with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans, or at any time or
times thereafter. Neither the Administrative Agent nor any Co-Arranger shall be
responsible to any Bank for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection
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herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of Silgan or
any of its Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of Silgan or
any of its Subsidiaries or the existence or possible existence of any Default or
Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, as the case may be, the Administrative
Agent shall be entitled to refrain from such act or taking such action unless
and until the Administrative Agent shall have received instructions from the
Required Banks and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Bank shall
have any right of action whatsoever against the Administrative Agent as a result
of the Administrative Agent acting or refraining from acting hereunder or under
any other Credit Document in accordance with the instructions of the Required
Banks.
11.05 Reliance. The Administrative Agent and each of the
Co-Arrangers shall be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, statement, certificate, telex,
teletype or facsimile message, cablegram, radiogram, order or other document or
telephone message signed, sent or made by any Person that the Administrative
Agent or such Co-Arranger believes to be the proper Person, and, with respect to
all legal matters pertaining to this Agreement and any other Credit Document and
its duties hereunder and thereunder, upon advice of counsel selected by it.
11.06 Indemnification. To the extent the Administrative Agent
or any Co-Arranger is not reimbursed and indemnified by the Borrowers, the Banks
will reimburse and indemnify the Administrative Agent and such Co-Arranger, in
proportion to their respective "percentages" as used in determining the Required
Banks (determined as if there are no Defaulting Banks), for and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted
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against the Administrative Agent or such Co-Arranger, in their respective
capacities as such, in performing their duties hereunder or under any other
Credit Document, in any way relating to or arising out of this Agreement or any
other Credit Document; provided that no Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's or such Co-Arranger's gross negligence or willful misconduct.
11.07 The Administrative Agent and the Co-Arrangers in Their
Individual Capacity. With respect to its obligation to make Loans and, to
participate in Letters of Credit under this Agreement, the Administrative Agent
and each of the Co-Arrangers shall have the rights and powers specified herein
for a "Bank" and may exercise the same rights and powers as though they were not
performing the duties specified herein; and the term "Banks," "Required Banks,"
"Majority Banks," "Supermajority Banks" or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent and each
of the Co-Arrangers in their individual capacities. The Administrative Agent and
each of the Co-Arrangers may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with, or purchase an
equity interest in, Silgan or any Affiliate of Silgan as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Silgan for services in connection with this Agreement and
otherwise without having to account for the same to the Banks. The
Administrative Agent and each of the Co-Arrangers may also be an equity investor
in Silgan or any Affiliate of Silgan without any consent required from any
Banks.
11.08 Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as the case may be, of such Note or of any note or notes issued in
exchange therefor.
11.09 Resignation by the Administrative Agent and the
Co-Arrangers. (a) The Administrative Agent and/or any
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of the Co-Arrangers may resign from the performance of all their respective
functions and duties hereunder and/or under the other Credit Documents (other
than under the Security Documents except to the extent provided therein) at any
time by giving 15 Business Days' prior (or, in the case of a Co-Arranger, same
day) written notice to the Borrowers and the Banks. In the case of the
resignation by the Administrative Agent, such resignation shall take effect upon
the appointment of a successor Administrative Agent pursuant to clauses (b) and
(c) below or as otherwise provided below. In the case of a resignation by any
Co-Arranger, such resignation shall become effective immediately.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Administrative Agent hereunder or thereunder who shall
be a commercial bank or trust company reasonably acceptable to Silgan.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of Silgan, shall then appoint a successor Administrative Agent who shall
serve as Administrative Agent hereunder or thereunder until such time, if any,
as the Required Banks appoint a successor Administrative Agent as provided
above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date such
notice of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document (other than under any Security Document except to the
extent so appointed in accordance with the terms thereof) until such time, if
any, as the Required Banks appoint a successor agent as provided above.
Section 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrowers jointly and
severally agree that they will: (i) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent and each of the Co-Arrangers in connection
with the preparation, execution and delivery of the Credit Documents and the
documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the
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reasonable fees and disbursements of White & Case, local counsel and, without
duplication, the allocated costs of in-house counsel for the Co-Arrangers) and
of the Administrative Agent and each of the Co-Arrangers in connection with
their syndication efforts with respect to this Agreement and of the
Administrative Agent, each of the Co-Arrangers, the Collateral Agent and each of
the Banks in connection with the enforcement of the Credit Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Administrative Agent,
each of the Co-Arrangers, the Collateral Agent and each of the Banks); (ii) pay
and hold each of the Banks harmless from and against any and all present and
future stamp, excise and other similar taxes with respect to the foregoing
matters and save each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Bank) to pay such taxes; and (iii) indemnify
the Administrative Agent, each of the Co-Arrangers, the Collateral Agent and
each Bank, its officers, directors, employees, representatives and agents from
and hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not the Administrative Agent, any Co-Arranger or
any Bank is a party thereto) related to the entering into and/or performance of
this Agreement or any other Credit Document or the use of any Letter of Credit
or the proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents, or
(b) the actual or alleged presence of hazardous materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property owned
or at any time operated by Silgan or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of hazardous materials at any
location, whether or not owned or operated by Silgan or any of its Subsidiaries,
the non-compliance of any Real Property with foreign, federal, state and local
laws, regulations, and ordinances (including applicable permits thereunder)
applicable to any Real Property, or any environmental claim asserted against
Silgan, any of its Subsidiaries or any Real Property owned or at any
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time operated by Silgan or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the undertaking
to indemnify, pay or hold harmless the Administrative Agent, any Co-Arranger or
any Bank set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrowers shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Bank is hereby authorized at any time or from time to time with the prior
consent of the Administrative Agent or the Required Banks, without presentment,
demand, protest or other notice of any kind to any Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of such Borrower against and on account of the
Obligations and liabilities of such Borrower to such Bank under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 12.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
such Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
Notwithstanding anything to the contrary contained in this Section 12.02, no
Bank shall exercise any such right of set-off without the prior consent of the
Administrative Agent or the Required Banks so long as the Obligations shall be
secured by any Real Property located in the State of California, it being
understood and agreed, however, that this sentence is for the sole benefit of
the Banks and may be amended, modified or waived in any respect by the Required
Banks without the requirement of prior notice to or consent
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by any Credit Party and does not constitute a waiver of any rights against any
Credit Party or against any Collateral.
12.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Borrower, at
its address specified opposite its signature below; if to any Bank, at its
office specified opposite its name on Schedule IX; and if to the Administrative
Agent, at its Notice Office; or, as to any Borrower or the Administrative Agent,
at such other address as shall be designated by such party in a written notice
to the other parties hereto and, as to each other party, at such other address
as shall be designated by such party in a written notice to the Borrowers and
the Administrative Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, cabled or sent by overnight courier,
be effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Administrative Agent
shall not be effective until received by the Administrative Agent.
12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, no Borrower may
assign or transfer any of its rights, obligations or interest hereunder or under
any other Credit Document without the prior written consent of the Banks and,
provided further, that, although any Bank may transfer, assign or grant
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments or outstanding Loans hereunder except as provided in Sections 1.13
and 12.04(b)) and the transferee, assignee or participant, as the case may be,
shall not constitute a "Bank" hereunder and, provided further, that no Bank
shall transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or Fees thereon
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(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default or
of a mandatory reduction in the Total Commitment shall not constitute a change
in the terms of such participation, and that an increase in any Commitment or
Loan shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof), (ii) consent
to the assignment or transfer by any Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by any Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Commitments and related outstanding Obligations hereunder to (i) its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (ii) in the case of any
Bank that is a fund that invests in loans, any other fund that invests in loans
and is managed and/or advised by the same investment advisor of such Bank or by
an Affiliate of such investment advisor or (y) assign all, or if less than all,
a portion equal to at least $5,000,000 in the aggregate for the assigning Bank
or assigning Banks, of such Commitments and related outstanding Obligations
hereunder to one or more Eligible Transferees (treating any fund that invests in
loans and any other fund that invests in loans and is managed and/or advised by
the same investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Transferee), each of which assignees shall become a
party to this Agreement as a Bank by execution of an Assignment and Assumption
Agreement, provided that, (i) at such time Schedule I shall be deemed modified
to reflect the Commitments (or outstanding Term Loans, as the case may be) of
such new Bank and of the existing Banks, (ii) new Notes will be issued, at the
Borrowers' expense, to such
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new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Commitments (or outstanding Term Loans, as the case may be), (iii)
the consent of the Administrative Agent shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) above (which consent
shall not be unreasonably withheld) and (iv) the Administrative Agent shall
receive at the time of each such assignment, from the assigning or assignee
Bank, the payment of a non-refundable assignment fee of $3,500, provided
further, that no assignment pursuant to this Section 12.04(b) shall be effective
until recorded in the Register by the Administrative Agent. At the time of each
assignment pursuant to this Section 12.04(b) to a Person which is not already a
Bank hereunder and which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Bank shall provide to the Borrowers and the Administrative
Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent of
any assignment pursuant to this Section 12.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Commitments.
To the extent that an assignment of all or any portion of a Bank's Commitments
and related outstanding Obligations pursuant to Section 1.13 or this Section
12.04(b) would, at the time of such assignment, result in increased costs under
Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the respective
assigning Bank prior to such assignment, then the Borrowers shall not be
obligated to pay such increased costs (although the Borrowers shall be obligated
to pay any other increased costs of the type described above resulting from
changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and, with
the consent of the Administrative Agent, any Bank which is a fund may pledge all
or any portion of its Loans and Notes to its trustee in support of its
obligations to its trustee. No pledge pursuant to this clause (c) shall release
the transferor Bank from any of its obligations hereunder.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent, any Co-
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Arranger or any Bank or any holder of a Note in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between any Borrower and the Administrative Agent, any Co-Arranger or any Bank
or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Administrative Agent, any Co-Arranger or any Bank or the holder of any
Note would otherwise have. No notice to or demand on any Borrower in any case
shall entitle any Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the
Administrative Agent, any Co-Arranger, any Bank or the holder of any Note to any
other or further action in any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of any
Borrower in respect of any Obligations of such Borrower hereunder, the
Administrative Agent shall distribute such payment to the Banks (other than any
Bank that has consented in writing to waive its pro rata share of any such
payment) pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, the Unpaid Drawings, Commitment Commission or Letter of Credit
Fees, of a sum which with respect to the related sum or sums received by other
Banks is in a greater proportion than the total of such Obligation then owed and
due to such Bank bears to the total of such Obligation then owed and due to all
such Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of such Borrower to such Banks in
such amount as shall result in a proportional participation by all of the Banks
in such amount; provided that if all or any portion of
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such excess amount is thereafter recovered from such Bank, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery, but
without interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 12.06(a) and (b) shall be subject to
the express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by Silgan to the Banks);
provided that, except as otherwise specifically provided herein, (i) all
computations determining compliance with Section 4.02, Section 8 and the
definitions of Applicable Commitment Commission Percentage and Interest
Reduction Discount shall utilize accounting principles and policies in
conformity with those used to prepare the audited historical financial
statements delivered to the Banks pursuant to Section 6.07(a) and (ii) all
computations determining compliance with Sections 8.08 and 8.09 and the
definitions of Applicable Commitment Commission Percentage and Interest
Reduction Discount shall be determined on a Pro Forma Basis; provided further,
that in determining EBITDA for any period, no effect shall be given (but only to
the extent not already otherwise excluded from the calculation of EBITDA under
this Agreement) (I) to FAS 106, (II) to any unusual charges to the extent that
cash is not expended during such period or (III) to any premiums paid during
such period in connection with Silgan's refinancing of its 11-3/4% Senior
Subordinated Notes due 2002 or in connection with any future Refinancing of the
Subordinated Exchange Debentures.
(b) All computations of interest, Commitment Commission and
other Fees hereunder shall be made on the actual number of days elapsed over a
year of 360 days.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (A)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
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ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK PERSONAL JURISDICTION OVER SUCH BORROWER, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH
COURTS LACK PERSONAL JURISDICTION OVER SUCH BORROWER. EACH BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH BORROWER AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO
SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER
CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY BANK TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY BORROWER IN ANY OTHER JURISDICTION.
(B) EACH BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when
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so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrowers and the Administrative
Agent.
12.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which each of the Borrowers and the Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Administrative Agent at
its Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or telex notice
(actually received) at such office that the same has been signed and mailed to
it. The Administrative Agent will give each Borrower and each Bank prompt
written notice of the occurrence of the Effective Date.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
12.12 Amendment or Waiver. (a) Except to the extent set forth
in Section 12.17(a), neither this Agreement nor any other Credit Document nor
any terms hereof or thereof may be changed, waived, discharged or terminated
unless such change, waiver, discharge or termination is in writing signed by the
Borrowers and the Required Banks, provided that no such change, waiver,
discharge or termination shall, without the consent of each Bank (other than a
Defaulting Bank) (with Obligations being directly affected thereby), (i) extend
the final scheduled maturity of any Loan or Note or extend the stated maturity
of any Letter of Credit beyond the Revolving Loan Maturity Date, or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with the waiver of applicability of any post-default increase in
interest rates), or reduce the principal amount thereof (it being understood
that any amendment or modification to the financial definitions in this
Agreement or to Section 12.07(a) shall not constitute a reduction in the rate of
interest or Fees for the purposes of this clause (i), notwithstanding the fact
that such amendment or modification actually results in such a reduction,
provided that such amendment or modification was not consummated for the purpose
of lowering the interest rate or Fees hereunder), (ii) release all or
substantially all of the Collateral (except as
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expressly provided in the Credit Documents) under all the Security Documents,
(iii) amend, modify or waive any provision of this Section 12.12, (iv) reduce
the percentage specified in the definition of Required Banks (it being
understood that, with the consent of the Required Banks, additional extensions
of credit pursuant to this Agreement may be included in the determination of the
Required Banks on substantially the same basis as the extensions of Term Loans
and Revolving Loan Commitments are included on the Effective Date), (v) consent
to the assignment or transfer by any Borrower of any of its rights and
obligations under this Agreement or (vi) consent to the release of Silgan,
Containers or Plastics from its obligations under the Borrowers/Subsidiaries
Guaranty except, in the case of Containers or Plastics, in connection with a
sale of all or substantially all of the assets of, or all of the capital stock
of, Containers or Plastics in a transaction permitted under this Agreement or
that has been approved by the Required Banks; provided further, that no such
change, waiver, discharge or termination shall (u) increase the Commitments of
any Bank over the amount thereof then in effect without the consent of such Bank
(it being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any Bank,
and that an increase in the available portion of any Commitment of any Bank
shall not constitute an increase in the Commitment of such Bank), (v) without
the consent of BTCo, amend, modify or waive any provision of Section 2 or alter
its rights or obligations with respect to Letters of Credit or Swingline Loans,
(w) without the consent of the Administrative Agent or the Co-Arrangers, amend,
modify or waive any provision of Section 11 as same applies to the
Administrative Agent or the Co-Arrangers or any other provision as same relates
to the rights or obligations of the Administrative Agent or the Co-Arrangers,
(x) without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent, (y)
without the consent of the Majority Banks of each Tranche which is being
allocated a lesser prepayment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Majority Banks of
each Tranche in the case of an amendment to the definition of Majority Banks),
amend the definition of Majority Banks or alter the required application of any
prepayments or repayments (or commitment reduction), as between the various
Tranches, pursuant to Section 4.01 or 4.02 (excluding Section 4.02(b) or (c))
(although the Required Banks may waive, in whole or
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in part, any such prepayment, repayment or commitment reduction, so long as the
application, as amongst the various Tranches, of any such prepayment, repayment
or commitment reduction which is still required to be made is not altered) or
(z) without the consent of the Supermajority Banks of the respective Tranche,
amend the definition of Supermajority Banks or reduce the amount of, or shorten
or extend, any A Term Loan Scheduled Repayment or B Term Loan Scheduled
Repayment, as the case may be.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (vi), inclusive, of the first proviso to
Section 12.12(a), the consent of the Required Banks is obtained but the consent
of one or more of other Banks whose consent is required is not obtained, then
Silgan shall have the right to either (A) replace each such non-consenting Bank
or Banks (so long as all non-consenting Banks are so replaced) with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Commitments
and repay in full its outstanding Loans in accordance with Sections 3.02(b)
and/or 4.01(b), provided that, unless the Commitments terminated, and Loans
repaid, pursuant to preceding clause (B) are immediately replaced in full at
such time through the addition of new Banks or the increase of the Commitments
and/or outstanding Loans of existing Banks (who in each case must specifically
consent with respect to such increase in respect of itself), then in the case of
any action pursuant to preceding clause (B) the Required Banks (determined
before giving effect to the proposed action) shall specifically consent thereto,
provided that Silgan shall not have the right to replace a Bank solely as a
result of the exercise of such Bank's rights (and the withholding of any
required consent by such Bank) pursuant to the second proviso to Section
12.12(a).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 11.06 and 12.01 shall
survive the execution and delivery of this Agreement and the Notes and the
making and repayment of the Loans and all Unpaid Drawings hereunder and the
termination of the Commitments.
12.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any office, Subsidiary or Affiliate of such
Bank. Notwithstanding
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anything to the contrary contained herein, to the extent that a transfer of
Loans pursuant to this Section 12.14 would, at the time of such transfer, result
in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from those being
charged by the respective Bank prior to such transfer, then no Borrower shall be
obligated to pay such increased costs (although each Borrower shall be obligated
to pay any other increased costs of the type described above resulting from
changes after the date of the respective transfer).
12.15 Confidentiality. (a) Subject to the provisions of clause
(b) of this Section 12.15, each Bank agrees that it will not disclose without
the prior consent of Silgan (other than on a confidential basis to its
employees, partners, directors, officers, auditors or counsel or to another Bank
or such Bank's holding or parent company if such Bank determines in its sole
discretion that any such party should have access to such information) any
information with respect to Silgan or any of its Subsidiaries which is now or in
the future furnished pursuant to this Agreement or any other Credit Document and
which is designated by any Borrower to the Banks in writing as confidential,
provided that any Bank may disclose any such information (i) as has become
generally available to the public, (ii) as may be required in any report,
statement or testimony submitted to any municipal, state or Federal regulatory
body having or claiming to have jurisdiction over such Bank or to the Federal
Reserve Board, the Federal Deposit Insurance Corporation or the NAIC or similar
organizations (whether in the United States or elsewhere) or their successors,
(iii) as may be required in respect to any summons or subpoena or in connection
with any litigation, (iv) in order to comply with any law, order, regulation or
ruling applicable to such Bank, (v) that is already in possession of such Bank
on a non- confidential basis, (vi) that is provided to such Bank on a
non-confidential basis by a Person who in doing so has not violated a duty of
confidentiality owing to any Bank or to Silgan or any of its Subsidiaries and
(vii) to any prospective or actual transferee or participant in connection with
any contemplated transfer or participation of any of the Notes or Revolving
Commitments or any interest therein by such Bank, provided that such prospective
transferee (x) agrees with such Bank, to maintain the confidentiality provisions
contained in this Section or (y) is a direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's professional
advisor so long as such contractual counterparty or professional advisor to such
contractual counterparty agrees in writing to keep such
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information confidential to the same extent required of the Banks hereunder.
(b) Each Borrower hereby acknowledges and agrees that each
Bank may share with any of its Affiliates (including, in the case of any Bank
that is a fund, such Bank's investment advisor) any information related to
Silgan or any of its Subsidiaries (including, without limitation, any nonpublic
customer information regarding the creditworthiness of Silgan and its
Subsidiaries, provided that such affiliates shall be subject to the provision of
clause (a) of this Section 12.15 to the same extent as such Bank).
12.16 Register. Each Borrower hereby designates the
Administrative Agent to serve as such Borrower's agent, solely for purposes of
this Section 12.16, to maintain a register (the "Register") on which it will
record the name, address and taxpayer identification number, if any, of each of
the Banks, the Commitments from time to time of each of the Banks, the Loans
made by each of the Banks and each repayment in respect of the principal amount
of the Loans of each Bank. Failure to make any such recordation, or any error in
such recordation shall not affect such Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitment of such Bank and
the rights to the principal of, and interest on, any Loan made pursuant to such
Commitment shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitment and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitment and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Commitment and Loan shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. Each Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on,
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asserted against or incurred by the Administrative Agent in performing its
duties under this Section 12.16, provided that no Borrower shall be liable for
any portion of such losses, claims, damages and liabilities resulting from the
Administrative Agent's gross negligence or willful misconduct.
12.17 Increase of Revolving Loan Commitments; Release of
Collateral. (a) So long as no Default or Event of Default then exists, Silgan
shall have the right at any time and from time to time on and after the Initial
Borrowing Date to request one or more Banks to increase its Revolving Loan
Commitment, it being understood and agreed, however, that (i) no Bank shall be
obligated to increase its Revolving Loan Commitment as a result of any request
by Silgan, (ii) any Bank may so increase its Revolving Loan Commitment without
the consent of any other Bank or the Administrative Agent, (iii) any increase in
the Total Revolving Loan Commitment pursuant to this Section 12.17(a) shall be
in a minimum amount of at least $5,000,000 and in integral multiples of
$1,000,000 in excess thereof, (iv) the Total Revolving Loan Commitment may not
be increased by more than $200,000,000 pursuant to this Section 12.17(a) and (v)
any increase in the Revolving Loan Commitment of any Bank pursuant to this
Section 12.17(a) shall be done in coordination with the Administrative Agent. At
the time of any increase in the Total Revolving Loan Commitment pursuant to this
Section 12.17(a), (i) the Revolving Borrowers and the Administrative Agent shall
take all such actions as may reasonably be practicable to avoid or minimize any
breakage or similar costs incurred by the Banks in connection with any increase
of the Total Revolving Loan Commitment pursuant to this Section 12.17(a) and so
that the Banks continue to participate in each Borrowing of Revolving Loans on a
pro rata basis based on their revised Revolving Loan Commitments, it being
understood and agreed, however, that the Borrowers shall be jointly and
severally obligated to pay to the respective Banks such breakage or similar
costs in connection therewith, (ii) Schedule I shall be deemed modified to
reflect the revised Revolving Loan Commitments of the affected Banks (and no
further amendment to this Agreement shall be required), (iii) upon surrender of
the old Revolving Notes by those Banks that have increased their Revolving Loan
Commitments pursuant to this Section 12.18(a), new Revolving Notes will be
issued, at the Revolving Borrowers' expense, to such Banks to be in conformity
with the requirements of Section 1.05 (with appropriate modifications) to the
extent needed to reflect the revised Revolving Loan Commitments and (iv) Silgan
shall deliver such opinions of counsel in
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connection therewith as shall reasonably be requested by the Administrative
Agent.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any Security Document, the Banks hereby acknowledge and agree
that from and after the time that Silgan receives a written stated "senior
unsecured implied" rating of at least BBB- from Standard & Poor's Rating
Services or at least Baa3 from Moody's Investors Service, Inc., in either case
with respect to Silgan's long-term Indebtedness, Silgan shall have the right, so
long as no Default or Event of Default then exists, to request the Collateral
Agent to release all of the Collateral under all of the Security Documents, and
the Collateral Agent is hereby authorized by the Banks to (and the Collateral
Agent agrees to) execute and deliver all such documents and releases as may be
necessary or appropriate to effectuate such release. The Collateral Agent agrees
that it shall promptly notify the Banks of such release of Collateral described
in this Section 12.17(b).
12.18 Certain Agreements with Respect to the Subordinated
Exchange Debentures and the 9% Senior Subordinated Debentures. The Borrowers
covenant and agree that they will take, and will cause each of their
Subsidiaries to take, all such actions as may be necessary so as to ensure that
all Indebtedness incurred under this Agreement and the other Credit Documents
(other than any portion of the Term Loans incurred hereunder which is justified
as being incurred under clause (i) of Section 4.3(b) of the Subordinated
Exchange Debenture Indenture and the first paragraph of Section 4.03(a) of the
9% Senior Subordinated Debenture Indenture) will always be permitted to be
incurred under clause (i) of the definition of "Silgan Indebtedness" under the
Subordinated Exchange Debenture Indenture and under clause (i) of the second
paragraph of Section 4.03(a) of the 9% Senior Subordinated Debenture Indenture
without relying on any other provision of any such Section of the Subordinated
Exchange Debenture Indenture or the 9% Senior Subordinated Debenture Indenture.
12.19 Limitation on Additional Amounts, etc. Not-withstanding
anything to the contrary contained in Sections 1.10, 1.11 or 2.06, unless a Bank
gives notice to Silgan that Silgan or another Borrower is obligated to pay an
amount under any such Section within 135 days after the later of (x) the date
such Bank incurs the respective increased costs, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital or
(y) the date
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such Bank has actual knowledge of its incurrence of the respective increased
costs, loss, expense or liability, reductions in amounts received or receivable
or reduction in return on capital, then such Bank shall only be entitled to be
compensated for such amount by the Borrowers pursuant to said Section 1.10, 1.11
or 2.06, as the case may be, to the extent the respective increased costs, loss,
expense or liability, reduction in amounts received or receivable or reduction
in return on capital are incurred or suffered on or after the date which occurs
135 days prior to such Bank giving notice to Silgan that Silgan or another
Borrower is obligated to pay the respective amounts pursuant to said Section
1.10, 1.11 or 2.06, as the case may be. This Section 12.19 shall have no
applicability to any Section of this Agreement other than said Sections 1.10,
1.11 or 2.06.
12.20 Maximum Amount. (a) It is the intention of the Borrowers
and the Banks to conform strictly to the usury and similar laws relating to
interest from time to time in force, and all agreements between or among the
Borrowers, the Administrative Agent and the Banks, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever, whether by acceleration of maturity
hereof or otherwise, shall the amount paid or agreed to be paid in the aggregate
to the Banks or to Administrative Agent on behalf of the Banks as interest
hereunder or under the other Credit Documents or in any other security agreement
given to secure the Obligations, or in any other document evidencing, securing
or pertaining to the Indebtedness evidenced hereby or thereby, exceed the
maximum amount permissible under applicable usury or such other laws (the
"Maximum Amount"). If under any circumstances whatsoever fulfillment of any
provision hereof, or of any of the other Credit Documents, at the time
performance of such provision shall be due, shall involve exceeding the Maximum
Amount, then, ipso facto, the obligation to be fulfilled shall be reduced to the
Maximum Amount. For the purposes of calculating the actual amount of interest
paid and/or payable hereunder in respect of laws pertaining to usury or such
other laws, all sums paid or agreed to be paid to the Banks for the use,
forbearance or detention of the Indebtedness of the Borrowers evidenced hereby,
outstanding from time to time shall, to the extent permitted by applicable law,
be amortized, pro rated, allocated and spread from the date of disbursement of
the proceeds of the Loans until payment in full of all of such Indebtedness, so
that the actual rate of interest on account of such Indebtedness is uniform
throughout the term hereof. The terms and provisions of this subsection shall
control and
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supersede every other provision of all agreements between or among the
Borrowers, the Administrative Agent and the Banks.
(b) If under any circumstances the Banks shall receive an
amount which would exceed the Maximum Amount, such amount shall be deemed a
payment in reduction of the principal amount of the Loans and shall be treated
as a voluntary prepayment under subsection 4.01(a), and shall be so applied in
accordance with Section 4.01(a) or if such amount exceeds the unpaid balance of
the Loans and any other Indebtedness of the Borrowers in favor of the Banks, the
excess shall be deemed to have been a payment made by mistake and shall be
refunded to the Borrowers.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
SILGAN HOLDINGS INC.
4 Landmark Square
Suite 400
Stamford, CT 06901 By /s/ Harley Rankin, Jr.
Attn: Harley Rankin, Jr. _______________________________________
Telephone: (203) 975-7110 Title: Executive Vice President, Chief
Fax: (203) 975-7902 Financial Officer and Treasurer
SILGAN CONTAINERS CORPORATION
4 Landmark Square
Suite 400
Stamford, CT 06901 By /s/ Harley Rankin, Jr.
Attn: Harley Rankin, Jr. _______________________________________
Telephone: (203) 975-7110 Title: Vice President
Fax: (203) 975-7902
SILGAN PLASTICS CORPORATION
4 Landmark Square
Suite 400
Stamford, CT 06901 By /s/ Harley Rankin, Jr.
Attn: Harley Rankin, Jr. _______________________________________
Telephone: (203) 975-7110 Title: Vice President
Fax: (203) 975-7902
BANKERS TRUST COMPANY,
Individually, and as
Administrative Agent
and as a Co-Arranger
By /s/ Gregg Shefrin
_______________________________________
Title: Vice President
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
Individually, and
as Syndication Agent
and as a Co-Arranger
By /s/ Linda Carper
_______________________________________
Title: Managing Director
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Silgan Holdings Inc. Credit Agreement
GOLDMAN SACHS CREDIT PARTNERS L.P.,
Individually, and as a Co-
Documentation Agent and
as a Co-Arranger
By /s/ Stephen B. King
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
MORGAN STANLEY SENIOR FUNDING, INC.,
Individually, and as a Co-
Documentation Agent and
as a Co-Arranger
By /s/ Christopher A. Pucillo
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company
Its Investment Manager
By /s/ Jonathan R. Insull
_______________________________________
Title: Vice President
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda), Ltd.,
as General Partner
By /s/ Jonathan R. Insull
_______________________________________
Title: Vice President
By: TCW Investment Management Company,
as Investment Adviser
By /s/ Jonathan R. Insull
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
Continental Assurance Company
Separate Account (E)
By: TCW Asset Management Company
As Attorney-in-Fact
By /s/ Jonathan R. Insull
_______________________________________
Title: Managing Director
By /s/ Jonathan R. Insull
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
THE BANK OF NOVA SCOTIA
By /s/ Kevin McCarthy
_______________________________________
Title: Unit Head
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Silgan Holdings Inc. Credit Agreement
BANK POLSKA KASA OPIEKI, S.A.
By /s/ William A. Shea
_______________________________________
Title: Vice President, Senior
Lending Officer
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Silgan Holdings Inc. Credit Agreement
CIBC INC.
By /s/ Timothy E. Doyle
_______________________________________
Title: Managing Director
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Silgan Holdings Inc. Credit Agreement
CITIBANK, N.A.
By /s/ Hans L. Christensen
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By /s/ Brian O'Leary
_______________________________________
Title: Vice President
By /s/ Sean Mounier
_______________________________________
Title: First Vice President
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Silgan Holdings Inc. Credit Agreement
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Mark Koneval
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
FLEET NATIONAL BANK
By /s/ Steve Kalin
_______________________________________
Title: Assistant Vice President
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Silgan Holdings Inc. Credit Agreement
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ Janet K. Williams
_______________________________________
Title: Duly Authorized Signatory
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Silgan Holdings Inc. Credit Agreement
KZH-SOLEIL CORPORATION
By /s/ Virginia Conway
_______________________________________
Title: Authorized Agent
KZH CRESCENT CORPORATION
By /s/ Virginia Conway
_______________________________________
Title: Authorized Agent
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Silgan Holdings Inc. Credit Agreement
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By /s/ John B. Wheeler
_______________________________________
Title: Managing Director
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Silgan Holdings Inc. Credit Agreement
SENIOR HIGH INCOME PORTFOLIO, INC.
By /s/ R. Douglas Henderson
_______________________________________
Title: Authorized Signatory
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Silgan Holdings Inc. Credit Agreement
MERITA BANK LTD.
By /s/ Clifford Abramsky
_______________________________________
Title: Vice President
By /s/ Frank Maffei
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
NATIONAL CITY BANK
By /s/ Robert C. Rowe
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ James W. Peterson
_______________________________________
Title: As Authorized Agent
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Silgan Holdings Inc. Credit Agreement
PNC BANK, NATIONAL ASSOCIATION
By /s/ Donald V. Davis
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
DEEP ROCK & COMPANY
By: Eaton Vance Management,
as Investment Advisor
By /s/ Barbara Campbell
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
THE BANK OF NEW YORK
By /s/ Ken Sneider
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
BANK OF SCOTLAND
By /s/ Joseph Fratus
_______________________________________
Title: Assistant Vice President
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Silgan Holdings Inc. Credit Agreement
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, Successor to Merger to
The Bank of Tokyo Trust Company, as
a Bank
By /s/ David McLaughlin
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By /s/ Jun Kawada
_______________________________________
Title: Joint General Manager
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Silgan Holdings Inc. Credit Agreement
THE SAKURA BANK, LIMITED
By /s/ Yoshikazu Nagura
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
WELLS FARGO BANK N.A.
By /s/ James I. Chu
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Toshihiro Hayashi
_______________________________________
Title: Senior Vice President
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Silgan Holdings Inc. Credit Agreement
THE TOKAI BANK, LIMITED NEW YORK BRANCH
By /s/ Kaoru Oda
_______________________________________
Title: Assistant General Manager
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Silgan Holdings Inc. Credit Agreement
THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Ronald Wolinsky
_______________________________________
Title: Vice President and Group Leader
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Silgan Holdings Inc. Credit Agreement
BANK LEUMI TRUST COMPANY OF NEW YORK
By /s/ Steven R. Navarro
_______________________________________
Title: First Vice President
By /s/ Gloria Bucher
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
THE SUMITOMO TRUST & BANKING CO., LTD.
NEW YORK BRANCH
By /s/ Suraj P. Bhatia
_______________________________________
Title: Senior Vice President
Manager, Corporate Finance Dept.
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Silgan Holdings Inc. Credit Agreement
THE ROYAL BANK OF SCOTLAND PLC
By /s/ Russell M. Gibson
_______________________________________
Title: Vice President and
Deputy Manager
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Silgan Holdings Inc. Credit Agreement
FIRSTRUST SAVINGS BANK
By /s/ Edward D. Ancona
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ Rene LeBlanc
_______________________________________
Title: Vice President, Team Leader
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Silgan Holdings Inc. Credit Agreement
THE SANWA BANK, LIMITED
By /s/ Shayn P. March
_______________________________________
Title: Assistant Vice President
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Silgan Holdings Inc. Credit Agreement
SUMMIT BANK
By /s/ Richard Sobrevinas
_______________________________________
Title: Managing Director
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Silgan Holdings Inc. Credit Agreement
U.S. NATIONAL BANK OF OREGON
By /s/ Roger H. Weis
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/ Shuichi Tajima
_______________________________________
Title: Deputy General Manager
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Silgan Holdings Inc. Credit Agreement
THE FUJI BANK, LIMITED NEW YORK BRANCH
By /s/ Teiji Teramoto
_______________________________________
Title: Vice President and Manager
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Silgan Holdings Inc. Credit Agreement
BANQUE PARIBAS
By /s/ Duane Helkowski
_______________________________________
Title: Vice President
By /s/ Robert G. Carino
_______________________________________
Title: Vice President
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Silgan Holdings Inc. Credit Agreement
SOCIETE GENERALE
By /s/ Michelle Martin
_______________________________________
Title: Assistant Vice President
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EXHIBIT 99.2
SECURITY AGREEMENT
among
SILGAN HOLDINGS INC.,
SILGAN CONTAINERS CORPORATION,
SILGAN PLASTICS CORPORATION,
CERTAIN OTHER SUBSIDIARIES OF SILGAN HOLDINGS INC.
and
BANKERS TRUST COMPANY,
as Collateral Agent
Dated as of July 29, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I SECURITY INTERESTS........................................ 2
1.1. Grant of Security Interests.................................. 2
1.2. Power of Attorney............................................ 3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND
COVENANTS................................................. 3
2.1. Necessary Filings............................................ 3
2.2. No Liens..................................................... 4
2.3. Other Financing Statements................................... 4
2.4. Chief Executive Office; Records.............................. 4
2.5. Location of Inventory and Equipment.......................... 5
2.6. Recourse..................................................... 5
2.7. Trade Names; Change of Name.................................. 5
ARTICLE III SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS................. 6
3.1. Additional Representations and Warranties.................... 6
3.2. Maintenance of Records....................................... 6
3.3. Direction to Account Debtors; Contracting
Parties; etc.............................................. 6
3.4. Modification of Terms; etc................................... 7
3.5. Collection................................................... 7
3.6. Instruments.................................................. 7
3.7. Assignors Remain Liable Under Receivables.................... 8
3.8. Assignors Remain Liable Under Contracts...................... 8
3.9. Further Actions.............................................. 8
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS............ 9
4.1. Additional Representations and Warranties.................... 9
4.2. Licenses and Assignments..................................... 9
4.3. Infringements................................................ 9
4.4. Preservation of Marks........................................ 10
4.5. Maintenance of Registration.................................. 10
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Page
4.6. Future Registered Marks...................................... 13
4.7. Remedies..................................................... 13
ARTICLE V SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS..................... 14
5.1. Additional Representations and Warranties.................... 14
5.2. Licenses and Assignments..................................... 15
5.3. Infringements................................................ 15
5.4. Maintenance of Patents and Copyrights........................ 15
5.5. Prosecution of Patent and Copyright
Applications.............................................. 16
5.6. Other Patents and Copyrights................................. 16
5.7. Remedies..................................................... 16
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL................ 17
6.1. Protection of Collateral Agent's Security.................... 17
6.2. Warehouse Receipts Non-negotiable............................ 17
6.3. Further Actions.............................................. 17
6.4. Financing Statements......................................... 18
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF
DEFAULT................................................. 18
7.1. Remedies; Obtaining the Collateral Upon De-
fault..................................................... 18
7.2. Remedies; Disposition of the Collateral...................... 20
7.3. Waiver of Claims............................................. 21
7.4. Application of Proceeds...................................... 22
7.5. Remedies Cumulative.......................................... 25
7.6. Discontinuance of Proceedings................................ 26
ARTICLE VIII INDEMNITY..................................................... 26
8.1. Indemnity.................................................... 26
8.2. Indemnity Obligations Secured by
Collateral; Survival...................................... 27
ARTICLE IX DEFINITIONS......................................... 28
ARTICLE X MISCELLANEOUS............................................. 34
10.1. Notices..................................................... 34
10.2. Waiver; Amendment........................................... 35
10.3. Obligations Absolute........................................ 35
10.4. Successors and Assigns...................................... 35
10.5. Headings Descriptive........................................ 36
10.6. Governing Law............................................... 36
10.7. Assignor's Duties........................................... 36
10.8. Termination; Release........................................ 36
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Page
10.9. Counterparts................................................ 37
10.10. The Collateral Agent....................................... 37
10.11. Severability............................................... 38
10.12. Additional Assignors....................................... 38
ANNEX A Schedule of Chief Executive Offices and other Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Trade and Fictitious Names
ANNEX D List of Marks
ANNEX E List of Patents and Applications
ANNEX F List of Copyright Registrations and Applications
ANNEX G Assignment of Security Interest in United States Trademarks and Patents
ANNEX H Assignment of Security Interest in United States Copyrights
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SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of July 29, 1997, among each of
the undersigned assignors (each, an "Assignor" and, together with any other
entity that becomes an assignor hereunder pursuant to Section 10.12 hereof, the
"Assignors") and Bankers Trust Company, as Collateral Agent (the "Collateral
Agent"), for the benefit of the Secured Creditors (as defined below). Except as
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Silgan Holdings Inc. ("Silgan"), Silgan Containers
Corporation ("Containers"), Silgan Plastics Corporation ("Plastics"), each other
Revolving Borrower (together with Silgan, Containers and Plastics, the
"Borrowers," and each individually, a "Borrower"), the lenders from time to time
party thereto (each a "Bank" and, collectively, the "Banks"), Bankers Trust
Company, as Administrative Agent (in such capacity and together with any
successor administrative agent, the "Administrative Agent"), Bank of America
National Trust & Savings Association, as Syndication Agent, Goldman Sachs Credit
Partners L.P. and Morgan Stanley Senior Funding, Inc., as Co-Documentation
Agents, and Bank of America National Trust & Savings Association, Bankers Trust
Company, Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior Funding,
Inc., as Co-Arrangers (in such capacity, the "Co- Arrangers"), have entered into
a Credit Agreement, dated as of July 29, 1997 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrowers as contemplated therein (the Banks, the Administrative Agent, the
Collateral Agent and the Co-Arrangers are collectively referred to herein as the
"Bank Creditors");
WHEREAS, one or more of the Borrowers are, or may from time to
time in the future be, party to one or more Interest Rate Protection Agreements
with any Bank or an
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affiliate of a Bank (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any reason,
together with such Bank's or affiliate's successors and assigns, are herein
called the "Other Creditors", and together with the Bank Creditors, the "Secured
Creditors");
WHEREAS, pursuant to the Borrowers/Subsidiaries Guaranty, each
Assignor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all obligations and liabilities of each Borrower under or
with respect to the Credit Documents and the Interest Rate Protection
Agreements;
WHEREAS, it is a condition precedent to the making of Loans to
each Borrower and the issuance of Letters of Credit for the account of each
Revolving Borrower under the Credit Agreement that the Assignors shall have
executed and delivered to the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of its Obligations,
each Assignor does hereby assign and transfer unto the Collateral Agent, and
does hereby pledge and grant to the Collateral Agent, in each case for the
benefit of the Secured Creditors, a continuing security interest of first
priority, subject only to Permitted Liens, in all of the right, title and
interest of such Assignor in, to and under all of the following, whether now
existing or hereafter from time to
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time acquired: (i) each and every Receivable, (ii) all Contracts (other than
Excluded Contracts, except to the extent provided in the definition thereof),
together with all Contract Rights arising thereunder, (iii) all Inventory, (iv)
all Equipment, (v) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of such Assignor symbolized
by the Marks, (vi) all Patents and Copyrights, (vii) all computer programs of
such Assignor and all intellectual property rights therein (to the extent not
constituting Excluded Contracts, except to the extent provided in the definition
thereof) and all other proprietary information of such Assignor, including, but
not limited to, trade secrets and Trade Secret Rights, (viii) all other Goods,
General Intangibles, Chattel Paper, Documents and Instruments (other than
Pledged Securities), (ix) the Cash Collateral Account and all monies, securities
and instruments deposited or required to be deposited in such Cash Collateral
Account, and (x) all Proceeds and products of any and all of the foregoing (all
of the above, collectively, the "Collateral"). Notwithstanding the foregoing,
the term "Collateral" shall not include any Receivable and related asset from
and after the time that same is transferred to the Receivables Subsidiary
pursuant to the Accounts Receivable Facility Documents.
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem to be reasonably necessary or advisable to
protect the interests of the Secured Creditors, which appointment as attorney is
coupled with an interest.
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ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve and perfect the security
interest granted by such Assignor to the Collateral Agent hereby in respect of
the Collateral have been accomplished or will be accomplished within 10 Business
Days from the date hereof and, upon such filings, registrations or recordations,
the security interest granted to the Collateral Agent pursuant to this Agreement
in and to the Collateral creates a perfected security interest therein prior to
the rights of all other Persons therein and subject to no other Liens (other
than Permitted Liens) and is entitled to all the rights, priorities and benefits
afforded by the Uniform Commercial Code or other relevant law as enacted in any
relevant jurisdiction to perfected security interests, in each case to the
extent that the Collateral consists of the type of property in which a security
interest may be perfected by filing a financing statement under the Uniform
Commercial Code as enacted in any relevant jurisdiction or by the filing of an
Assignment of Security Interest in the form of Annex G or H hereto in the United
States Patent and Trademark Office or the United States Copyright Office, as the
case may be.
2.2. No Liens. Such Assignor is, and as to Collateral acquired
by it from time to time after the date hereof such Assignor will be, the owner
of, or has rights in, all Collateral free from any Lien, security interest,
encumbrance or other right, title or interest of any Person (other than
Permitted Liens), and such Assignor shall defend the Collateral to the extent of
its rights therein against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent (other
than in respect of Permitted Liens).
2.3. Other Financing Statements. As of the date hereof, there
is no financing statement (or similar state- ment or instrument of registration
under the law of any jurisdiction) covering or purporting to cover any interest
of any kind in the Collateral (other than financing
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statements filed in respect of Permitted Liens), and so long as the Total
Commitment has not been terminated or any Note remains unpaid or any of the
Obligations remain unpaid (other than indemnities described in Section 8.1
hereof and described in Section 12.13 of the Credit Agreement, and any other
indemnities set forth in any other Security Document, in each case which are not
then due and payable) or any Interest Rate Protection Agreement entitled to the
benefits of this Agreement or Letter of Credit remains in effect or any
Obligations are owed with respect thereto, such Assignor will not execute or
authorize to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or
statements relating to the Collateral, except financing statements filed or to
be filed in respect of and covering the security interests granted hereby by
such Assignor or as permitted by the Credit Agreement.
2.4. Chief Executive Office; Records. The chief executive
office of such Assignor is located at the address or addresses indicated on
Annex A hereto for such Assignor. Such Assignor will not move its chief
executive office except to such new location as such Assignor may establish in
accordance with the last sentence of this Section 2.4. The originals of all
documents evidencing all Receivables and Contract Rights of such Assignor and
the only original books of account and records of such Assignor relating thereto
are, and will continue to be, kept at such chief executive office, at one or
more of the locations set forth on Annex A hereto or at such new locations as
such Assignor may establish in accordance with the last sentence of this Section
2.4. All Receivables and Contract Rights of such Assignor are, and will continue
to be, maintained at, and controlled and directed (including, without
limitation, for general accounting purposes) from, the office locations
described above or such new location established in accordance with the last
sentence of this Section 2.4. No Assignor shall establish new locations for such
offices until (i) it shall have given to the Collateral Agent not less than 30
days' prior written notice of its intention to do so, clearly describing such
new location and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (ii) with respect to such new
location, it shall have taken all action, reasonably satisfactory to the
Collateral Agent, to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
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2.5. Location of Inventory and Equipment. All Inventory and
Equipment (other than Equipment and Inventory the aggregate fair market value of
which does not exceed $250,000 or Inventory held on consignment) held on the
date hereof by each Assignor is located at one of the locations shown on Annex B
hereto for such Assignor or is in transport thereto. Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex B
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5. Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent not less than 10 days prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Collateral Agent may reasonably request and (ii)
with respect to such new location, it shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the secur- ity interest of the
Collateral Agent in the Collateral in- tended to be granted hereby at all times
fully perfected and in full force and effect.
2.6. Recourse. This Agreement is made with full recourse to
each Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
other Credit Documents, in the Interest Rate Protection Agreements entitled to
the benefits of this Agreement and otherwise in writing in connection herewith
or therewith.
2.7. Trade Names; Change of Name. No Assignor has or operates
in any jurisdiction under, or in the preceding 12 months has had or has operated
in any jurisdiction under, any trade names, fictitious names or other names
except its legal name and such other trade or fictitious names as are listed on
Annex C hereto. No Assignor shall change its legal name or assume or operate in
any jurisdiction under any trade, fictitious or other name except those names
listed on Annex C hereto and new names established in accordance with the last
sentence of this Section 2.7. No Assignor shall assume or operate in any
jurisdiction under any new trade, fictitious or other name until (i) it shall
have given to the Collateral Agent not less than 10 days' prior written notice
of its intention so to do, clearly describing such new name and the
jurisdictions in which such new name shall be used and providing such other
information in connection therewith as
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the Collateral Agent may reasonably request and (ii) with respect to such new
name, it shall have taken all action reasonably requested by the Collateral
Agent, to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time
when each of its Receivables (other than Receivables in an immaterial aggregate
amount) arises, each Assignor shall be deemed to have represented and warranted
that such Receivable, and all records, papers and documents relating thereto (if
any) are what they purport to be, and that all papers and documents (if any)
relating thereto will be the only original writings evidencing and embodying
such obligation of the account debtor named therein (other than copies created
for general accounting purposes).
3.2. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense accurate records of its Receivables and
Contracts, records of all payments received, all credits granted thereon, all
merchandise returned and all other dealings therewith, and such Assignor will
make the same available on such Assignor's premises to the Collateral Agent for
inspection, at such Assignor's own cost and expense, to the extent permitted by,
and subject to, the conditions set forth in the Credit Agreement. Upon the
occurrence and during the continuance of an Event of Default and at the request
of the Collateral Agent, such Assignor shall, at its own cost and expense,
deliver all tangible evidence of its Receivables and Contract Rights (including,
without limitation, all documents evidencing the Receivables and all Contracts)
and such books and records to the Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by such
Assignor). Upon the occurrence and during the continuance of an Event of Default
and if the Collateral Agent so directs, such Assignor shall legend, in form and
manner satisfactory to the Collateral Agent, the Receivables and the Contracts,
as well as books, records and documents (if any) of such Assignor evidencing or
pertaining to such Receivables and Contracts with an appropriate reference to
the fact that
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such Receivables and Contracts have been assigned to the Collateral Agent and
that the Collateral Agent has a security interest therein.
3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause
all payments on account of the Receivables and Contracts to be made directly to
the Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x) and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Assignor.
Without notice to or assent by any Assignor, the Collateral Agent may apply any
or all amounts then in, or thereafter deposited in, the Cash Collateral Account,
which application shall be effected in the manner provided in Section 7.4 of
this Agreement. The costs and expenses (including reasonable attorneys' fees) of
collection, whether incurred by the Assignor or the Collateral Agent, shall be
borne by the relevant Assignor. The Collateral Agent shall deliver a copy of
each notice referred to in the preceding clause (y) to the relevant Assignor;
provided, that the failure by the Collateral Agent to so notify such Assignor
shall not affect the effectiveness of such notice or the other rights of the
Collateral Agent created by this Section 3.3.
3.4. Modification of Terms; etc. Except (x) as permitted under
the Credit Agreement, (y) as permitted by Section 3.5 hereof or (z) in the
ordinary course of business and consistent with past practice, no Assignor shall
rescind or cancel any indebtedness evidenced by any Receivable or under any
Contract, or modify in any material respect any term thereof or make any
material adjustment with respect thereto, or extend or renew the same, or
compromise or settle any material dispute, claim, suit or legal proceeding
relating thereto, or sell any Receivable or Contract, or interest therein,
without the prior written consent of the Collateral Agent. Each Assignor will
duly fulfill all of its material obligations on its part to be fulfilled under
or in connection with the Receivables and Contracts and will do nothing to
impair the security
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interest of the Collateral Agent in the Receivables or Contracts.
3.5. Collection. Each Assignor shall endeavor in accordance
with reasonable business practices to cause to be collected from the account
debtor named in each of its Receivables or obligor under any Contract, as and
when due (including, without limitation, amounts which are delinquent, such
amounts to be collected in accordance with generally accepted lawful collection
procedures) any and all amounts owing under or on account of such Receivable or
Contract, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Receivable or under such Contract,
except that, prior to the occurrence of an Event of Default, any Assignor may
allow in the ordinary course of business as adjustments to amounts owing under
its Receivables and Contracts (i) an extension or renewal of the time or times
of payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any
Instrument constituting Collateral in excess of $100,000 and having a maturity
of longer than 60 days, such Assignor will within 10 Business Days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
3.7. Assignors Remain Liable Under Receivables. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Receivables to observe and perform all of the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to such Receivables. Neither the
Collateral Agent nor any other Secured Creditor shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the Collateral Agent or
any other Secured
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Creditor of any payment relating to such Receivable pursuant hereto, nor shall
the Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by them
or as to the sufficiency of any performance by any party under any Receivable
(or any agreement giving rise thereto), to present or file any claim, to take
any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.
3.8. Assignors Remain Liable Under Contracts. Anything herein
to the contrary notwithstanding, the Assignors shall remain liable under each of
the Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.9. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
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ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true, lawful, sole and exclusive owner of
or otherwise has the right to use the material registered Marks listed in Annex
D hereto for such Assignor, and that said listed Marks include all the United
States marks and applications for United States marks registered in the United
States Patent and Trademark Office that such Assignor presently owns or uses in
connection with its business. Each Assignor represents and warrants that it
owns, is licensed to use or otherwise has the right to use all material Marks
that it uses. Each Assignor further warrants that it has no knowledge of any
material third party claim that any aspect of such Assignor's present or
contemplated business operations infringes or will infringe in any material
respect any trademark, service mark or trade name. Each Assignor represents and
warrants that upon the recordation of an Assignment of Security Interest in
United States Trademarks and Patents in the form of Annex G hereto in the United
States Patent and Trademark Office, together with filings on Form UCC-1 pursuant
to this Agreement, all filings, registrations and recordings necessary or
appropriate to perfect the security interest granted to the Collateral Agent in
the United States Marks covered by this Agreement under federal law will have
been accomplished. Each Assignor agrees to execute such an Assignment of
Security Interest in United States Trademark and Patents covering all right,
title and interest in each United States Mark, and the associated goodwill, of
such Assignor, and to record the same. Each Assignor hereby grants to the
Collateral Agent an absolute power of attorney to sign, upon the occurrence and
during the continuance of an Event of Default, any document which may be
required by the United States Patent and Trademark Office or secretary of state
or equivalent governmental agency of any State of the United States in order to
effect an absolute assignment of all right, title and interest in each Mark, and
record the same.
4.2. Licenses and Assignments. Except as otherwise permitted
by the Credit Agreement or this Agreement, each Assignor hereby agrees not to
divest itself of any right under any Mark absent prior written approval of the
Collateral Agent.
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4.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available with
respect to, any party who such Assignor believes is infringing or diluting or
otherwise violating in any material respect any of such Assignor's rights in and
to any material Mark, or with respect to any party claiming that such Assignor's
use of any material Mark violates in any material respect any property right of
that party. Each Assignor further agrees, unless otherwise agreed by the
Collateral Agent, to prosecute any Person infringing any material Mark owned by
such Assignor in accordance with reasonable business practices.
4.4. Preservation of Marks. Each Assignor agrees to use its
material Marks in interstate commerce during the time in which this Agreement is
in effect, sufficiently to preserve such Marks as trademarks or service marks
under the laws of the United States; provided, that no Assignor shall be
obligated to preserve, or prosecute any Person infringing, any Mark in the event
such Assignor determines, in its reasonable business judgment, that the
preservation of such Mark is no longer desirable in the conduct of its business.
4.5. Maintenance of Registration. Each Assignor shall, at its
own expense, diligently process all documents required by the Trademark Act of
1946, 15 U.S.C. ss.ss. 1051 et seq. to maintain trademark registrations,
including but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
registered Marks pursuant to 15 U.S.C. ss.ss. 1058(a), 1059 and 1065, and shall
pay all fees and disbursements in connection therewith and shall not abandon any
such filing of affidavit of use or any such application of renewal prior to the
exhaustion of all administrative and judicial remedies without prior written
consent of the Collateral Agent; provided, that no Assignor shall be obligated
to maintain the registration of any Mark in the event that such Assignor
determines, in its reasonable business judgment, that the maintenance of such
Mark is no longer necessary or desirable in the conduct of its business. Each
Assignor agrees to notify the Collateral Agent thirty (30) days prior to the
dates on which the affidavits of use or the applications for renewal
registration are due with respect to any registered Mark which is required to be
maintained pursuant to this Section
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4.5, that the affidavits of use or the renewal is being processed or being
abandoned, as the case may be.
4.6. Future Registered Marks. If any Mark registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral Agent
a copy of such certificate, and an assignment for security in such Mark, to the
Collateral Agent and at the expense of such Assignor, confirming the assignment
for security in such Mark to the Collateral Agent hereunder, the form of such
security to be substantially the same as the form hereof or in such other form
as may be reasonably satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title and interest of such Assignor in and to each of the Marks, together
with all trademark rights and rights of protection to the same, vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
rights, title and interest shall immediately vest in the Collateral Agent for
the benefit of the Secured Creditors, and the Collateral Agent shall be entitled
to exercise the power of attorney referred to in Section 4.1 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency; (ii) take and use or sell the Marks and the goodwill of
such Assignor's business symbolized by the Marks and the right to carry on the
business and use the assets of such Assignor in connection with which the Marks
have been used; and (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from using the Marks in any manner whatsoever, directly
or indirectly, and, if requested by the Collateral Agent, change such Assignor's
corporate name to eliminate therefrom any use of any Mark and execute such other
and further documents that the Collateral Agent may request to further confirm
this and to transfer ownership of the Marks and registrations and any pending
trademark application in the United States Patent and Trademark Office or any
equivalent government agency or office in any foreign jurisdiction to the
Collateral Agent.
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ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of all
rights in (i) the material Patents listed in Annex E hereto for such Assignor
and that said listed Patents constitute all the patents and applications for
patents that such Assignor now owns and (ii) the material Copyrights listed in
Annex F hereto for such Assignor and that said listed Copyrights constitute all
material registrations of copyrights and applications for copyright
registrations that such Assignor now owns. Each Assignor further represents and
warrants that it is the true and lawful exclusive owner or licensee of all
rights in all material United States trade secrets and proprietary information
necessary to operate the business of the Assignor (the "Trade Secret Rights").
Each Assignor further represents and warrants that it has the exclusive right to
use and practice under all material Patents and material Copyrights that it
owns, uses or practices under and has the exclusive right to exclude others from
using or practicing under any material Patents it owns, uses or practices under.
Each Assignor further warrants that, as of the date hereof it has no knowledge
of any material third party claim that any aspect of such Assignor's present or
contemplated business operations infringes or will infringe in any material
respect any rights in any patent or copyright or such Assignor has
misappropriated in any material respect any trade secret or proprietary
information. Each Assignor represents and warrants that upon the recordation of
an Assignment of Security Interest in United States Trademarks and Patents in
the form of Annex G hereto in the United States Patent and Trademark Office and
the recordation of an Assignment of Security Interest in United States
Copyrights in the form of Annex H hereto in the United States Copyright Office,
together with filings on Form UCC-1 pursuant to this Agreement, all filings,
registrations and recordings necessary or appropriate to perfect the security
interest granted to the Collateral Agent in the United States Patents and United
States Copyrights covered by this Agreement under federal law will have been
accomplished. Each Assignor agrees to execute such an Assignment of Security
Interest in United States Trademarks and Patents covering all right, title and
interest in each United States Patent of such Assignor and to record the same,
and to execute such an Assignment of
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Security Interest in registered United States Copyrights covering all right,
title and interest in each registered United States Copyright of such Assignor
and to record the same. Each Assignor hereby grants to the Collateral Agent an
absolute power of attorney to sign, upon the occurrence and during the
continuance of any Event of Default, any document which may be required by the
U.S. Patent and Trademark Office or the U.S. Copyright Office in order to effect
an absolute assignment of all right, title and interest in each Patent and
registered Copyright, and to record the same.
5.2. Licenses and Assignments. Except as otherwise permitted
by the Credit Agreement or this Agreement, each Assignor hereby agrees not to
divest itself of any right under any Patent or Copyright absent prior written
approval of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe in any material
Patent or material Copyright or to any claim that the practice of any material
Patent or the use of any material Copyright violates any property right of a
third party, or with respect to any misappropriation of any material Trade
Secret Right or any claim that practice of any material Trade Secret Right
violates any property right of a third party. Each Assignor further agrees,
absent direction of the Collateral Agent to the contrary, diligently to
prosecute any Person infringing any material Patent or material Copyright or any
Person misappropriating any material Trade Secret Right.
5.4. Maintenance of Patents and Copyrights. At its own
expense, each Assignor shall make timely payment of all post-issuance fees
required pursuant to 35 U.S.C.ss. 41 to maintain in force rights under each
Patent, and to apply as permitted pursuant to applicable law for any renewal of
each Copyright, in any case absent prior written consent of the Collateral
Agent; provided, that no Assignor shall be obligated to maintain, or prosecute
any Person infringing, any Patent or Copyright in the event such Assignor
determines, in its reasonable business judgment, that the maintenance of such
Patent or Copyright is no longer necessary or desirable in the conduct of its
business.
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5.5. Prosecution of Patent and Copyright Applications. At its
own expense, each Assignor shall diligently prosecute all applications for
Patents listed in Annex E hereto and for Copyrights listed in Annex F hereto for
such Assignor and shall not abandon any such application prior to exhaustion of
all administrative and judicial remedies, absent written consent of the
Collateral Agent; provided, that no Assignor shall be obligated to prosecute any
such application in the event such Assignor determines, in its reasonable
business judgment, that the prosecuting of such application is no longer
necessary or desirable in the conduct of its business.
5.6. Other Patents and Copyrights. Within 30 days of the
acquisition or issuance of a United States Patent, registration of a Copyright,
or acquisition of a registered Copyright, or of filing of an application for a
United States Patent or Copyright, the relevant Assignor shall deliver to the
Collateral Agent a copy of said Copyright or certificate or registration of, or
application therefor, said Patents, as the case may be, with an assignment for
security as to such Patent or Copyright, as the case may be, to the Collateral
Agent and at the expense of such Assignor, confirming the assignment for
security, the form of such assignment for security to be substantially the same
as the form hereof or in such other form as may be reasonably satisfactory to
the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may by written notice to the relevant Assignor,
take any or all of the following actions: (i) declare the entire right, title,
and interest of such Assignor in each of the Patents and Copyrights vested in
the Collateral Agent for the benefit of the Secured Creditors, in which event
such right, title, and interest shall immediately vest in the Collateral Agent
for the benefit of the Secured Creditors, in which case the Collateral Agent
shall be entitled to exercise the power of attorney referred to in Section 5.1
hereof to execute, cause to be acknowledged and notarized and to record said
absolute assignment with the applicable agency; (ii) take and practice or sell
the Patents, Copyright and Trade Secret Rights; and (iii) direct such Assignor
to refrain, in which event such Assignor shall refrain, from practicing the
Patents and using the Copyrights and/or Trade Secret Rights directly or
indirectly, and such Assignor shall execute such other and further documents as
the Collateral Agent may reasonably request further to
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confirm this and to transfer ownership of the Patents, Copyrights and Trade
Secret Rights to the Collateral Agent for the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Except as may
be permitted by this Agreement and the Credit Agreement, each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at such Assignor's own expense to the extent and in the
manner provided in the Credit Agreement. If any Assignor shall fail to insure
its Inventory and Equipment in accordance with the preceding sentence, or if any
Assignor shall fail to so endorse and deposit all policies or certificates with
respect thereto, the Collateral Agent shall have the right (but shall be under
no obligation) to procure such insurance and such Assignor agrees to promptly
reimburse the Collateral Agent for all costs and expenses of procuring such
insurance. Except to the extent proceeds of insurance are permitted to be
retained by the relevant Assignor pursuant to the Credit Agreement, the
Collateral Agent shall, at the time such proceeds of such insurance are
distributed to the Secured Creditors, apply such proceeds in accordance with
Section 7.4 hereof. Each As- signor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of such Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued with respect to any of its Inventory, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law).
6.3. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time
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such lists, descriptions and designations of its Collateral, warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments and take such further steps relating
to the Collateral and other property or rights covered by the security interest
hereby granted, which the Collateral Agent deems reasonably appropriate or
advisable to perfect, preserve or protect its security interest in the
Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first priority
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby all in accordance with the Uniform
Commercial Code as enacted in any and all relevant jurisdictions or any other
relevant law. Each Assignor will pay any applicable filing fees, recordation
taxes and related expenses relating to its Collateral. Each Assignor hereby
authorizes the Collateral Agent, as the Collateral Agent shall reasonably deem
necessary or desirable, to file any such financing statements without the
signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law, shall have all rights
as a secured creditor under the Uniform Commercial Code in all relevant
jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
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without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent;
(iii) withdraw all monies, securities and instruments in
the Cash Collateral Account for application to the Obligations in
accordance with Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof,
or direct the relevant Assignor to sell, assign or otherwise liquidate
any or all of the Collateral or any part thereof, and, in each case,
take possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof,
by directing the relevant Assignor in writing to deliver the same to
the Collateral Agent at any place or places designated by the
Collateral Agent, in which event such Assignor shall at its own
expense:
(x) forthwith cause the same to be moved to the place
or places so designated by the Collateral Agent and there
delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 7.2
hereof; and
(z) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in reasonable working condition; and
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(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as
the Collateral Agent shall in its sole judgment determine (taking into
account such provisions as may be necessary to protect and preserve
such Marks, Patents or Copyrights);
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Secured Creditors and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent for the benefit of the Secured
Creditors upon the terms of this Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
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to the right of the relevant Assignor or any nominee of such Assignor to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time and place of such sale and, in the absence of applicable
requirements of law, shall be by public auction (which may, at the Collateral
Agent's option, be subject to reserve), after publication of notice of such
auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York. To the extent permitted by any such
requirement of law, the Collateral Agent may bid for and become the purchaser of
the Collateral or any item thereof, offered for sale in accordance with this
Section without accountability to the relevant Assignor. If, under mandatory
requirements of applicable law, the Collateral Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to the relevant Assignor as hereinabove specified, the
Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of
applicable law.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession
except to the extent that any damages which are the direct result of
the Collateral Agent's gross negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
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(iii) all rights of redemption, appraisement, valuation,
stay, extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of this
Agreement or the absolute sale of the Collateral or any portion
thereof, and each Assignor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the
benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement, the Mortgages or the
Additional Security Documents require proceeds of collateral under such Security
Documents to be applied in accordance with the provisions of this Agreement, the
Pledgee or Mortgagee under such other Security Document) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all amounts owing the
Collateral Agent of the type described in clauses (iii) and (iv) of the
definition of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, with each Secured
Creditor receiving an amount equal to such outstanding Primary
Obligations or, if the proceeds are insufficient to pay in full all
such Primary Obligations, its Pro Rata Share of the amount remaining to
be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the
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Secured Creditors as provided in Section 7.4(e) hereof, with each
Secured Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all
such Secondary Obligations, its Pro Rata Share of the amount remaining
to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Document Obligations, all principal of, and interest on, all
Loans, all Unpaid Drawings and all Fees and (ii) in the case of the Other
Obligations, all amounts due under the Interest Rate Protection Agreements
entitled to the benefits of this Agreement (other than indemnities, fees
(including, without limitation, attorneys' fees) and similar obligations and
liabilities) and (z) "Secondary Obligations" shall mean all Obligations other
than Primary Obligations.
(c) When payments to the Secured Creditors are based upon
their respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to
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such excess amount multiplied by a fraction the numerator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of such
Secured Creditor and the denominator of which is the unpaid Primary Obligations
or Secondary Obligations, as the case may be, of all Secured Creditors entitled
to such distribution.
(d) Each of the Secured Creditors, by their acceptance of the
benefits hereof, agrees and acknowledges that if the Bank Creditors are to
receive a distribution on account of undrawn amounts with respect to Letters of
Credit issued under the Credit Agreement (which shall only occur after all
outstanding Loans and Unpaid Drawings with respect to such Letters of Credit
have been paid in full), such amounts shall be paid to the Administrative Agent
under the Credit Agreement and held by it, for the equal and ratable benefit of
the Bank Creditors, as cash security for the repayment of Obligations owing to
the Bank Creditors as such. If any amounts are held as cash security pursuant to
the immediately preceding sentence, then upon the termination of all outstanding
Letters of Credit, and after the application of all such cash security to the
repayment of all Obligations owing to the Bank Creditors after giving effect to
the termination of all such Letters of Credit, if there remains any excess cash,
such excess cash shall be returned by the Administrative Agent to the Collateral
Agent for distribution in accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be made
(x) if to the Bank Creditors, to the Administrative Agent under the Credit
Agreement for the account of the Bank Creditors, and (y) if to the Other
Creditors, to the trustee, paying agent or other similar representative (each a
"Representative") for the Other Creditors or, in the absence of such a
Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance
with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i)
the Administrative Agent under the Credit Agreement and (ii) the Representative
for the Other Creditors or, in the absence of such a Representative, upon the
Other Creditors for a determination (which the Administrative Agent, each
Representative for any Other Creditors and the Secured Creditors agree (or shall
agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Bank Creditors or the
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Other Creditors, as the case may be. Unless it has actual knowledge (including
by way of written notice from a Bank Creditor or an Other Creditor) to the
contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
from an Other Creditor) to the contrary, the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements are in existence.
(g) It is understood that the Assignors shall remain jointly
and severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Obligations.
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection Agreements, the other Credit Documents or now or
hereafter existing at law, in equity or by statute and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time or simultaneously and as often and in such order as
may be deemed expedient by the Collateral Agent. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of the exercise
of one shall not be deemed a waiver of the right to exercise any other or
others. No delay or omission of the Collateral Agent in the exercise of any such
right, power or remedy and no renewal or extension of any of the Obligations
shall impair any such right, power or remedy or shall be construed to be a
waiver of any Default or Event of Default or an acquiescence therein. No notice
to or demand on any Assignor in any case shall entitle it to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Collateral Agent to any other or further
action in any circumstances without notice or demand. In the event that the
Collateral Agent shall bring any suit to enforce any of its rights hereunder and
shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
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7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Collateral Agent, each other Secured
Creditor and their respective successors, permitted assigns, employees, agents
and servants (hereinafter in this Section 8.1 referred to individually as
"Indemnitee," and collectively as "Indemni- tees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements (a)
(including reasonable attorneys' fees and expenses) (for the purposes of this
Section 8.1(a) the foregoing are collectively called "expenses") of whatsoever
kind and nature imposed on, asserted against or incurred by any of the
Indemnitees in any way relating to or arising out of this Agreement, any
Interest Rate Protection Agreement entitled to the benefits of this Agreement,
any other Credit Document or any other document executed in connection herewith
or therewith or the enforcement of any of the terms of, or the preservation of
any rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any
country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property
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damage), or contract claim; provided that no Indemnitee shall be indemnified
pursuant to this Section 8.1(a) for any expenses to the extent caused by the
gross negligence or willful misconduct of such Indemnitee. Each Assignor agrees
that upon written notice by any Indemnitee of the assertion of such a liability,
obligation, damage, injury, penalty, claim, demand, action, suit or judgment,
the relevant Assignor shall assume full responsibility for the defense thereof.
Each Indemnitee agrees to use its best efforts to promptly notify the relevant
Assignor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof,
each Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements and Letters of Credit and the payment of all other
Obligations and notwithstanding the discharge thereof.
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ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals to this Agreement.
"Agreement" shall mean this Security Agreement as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first
paragraph of this Agreement.
"Bank Creditors" shall have the meaning provided in the
recitals to this Agreement.
"Banks" shall have the meaning provided in the recitals to
this Agreement.
"Borrower" shall have the meaning provided in the recitals to
this Agreement.
"Cash Collateral Account" shall mean a cash collateral
account maintained with, and in the sole dominion and control of, the Collateral
Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Class" shall have the meaning provided in Section 10.2 of
this Agreement.
"Co-Arrangers" shall have the meaning provided in the
recitals to this Agreement.
"Collateral" shall have the meaning provided in Section
1.1(a) of this Agreement.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
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"Contract Rights" shall mean all rights of any Assignor under
each Contract, including, without limitation, (i) any and all rights to receive
and demand payments under any or all Contracts, (ii) any and all rights to
receive and compel performance under any or all Contracts and (iii) any and all
other rights, interests and claims now existing or in the future arising in
connection with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor and
one or more additional parties (including, without limitation, any Interest Rate
Protection Agreements, any partnership agreements and any limited liability
company agreements).
"Copyrights" shall mean any United States copyright owned by
any Assignor, including any registrations of any Copyrights, in the United
States Copyright Office, as well as any application for a United States
copyright registration now or hereafter made with the United States Copyright
Office by any Assignor.
"Credit Agreement" shall have the meaning provided in the
recitals to this Agreement.
"Credit Document Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor and, in any event,
shall include, but shall not be limited to, all machinery, equipment,
furnishings, movable trade fixtures and vehicles now or hereafter owned by any
Assignor and any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
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"Event of Default" shall mean any Event of Default under, and
as defined in, the Credit Agreement, any payment default with any Interest Rate
Protection Agreement entitled to the benefits of this Agreement (after the
expiration of any applicable grace period) and shall in any event, without
limitation, include any payment default on any of the Obligations after the
expiration of any applicable grace period.
"Excluded Contracts" shall mean one or more Contracts which
by their terms would be breached by the grant of the security interests created
therein pursuant to the terms of this Agreement (it being understood and agreed,
however, that notwithstanding the foregoing, all rights to payment for money due
or to become due pursuant to any such excluded contract shall be subject to the
security interests created by this Agreement).
"General Intangibles" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Goods" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1
of this Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and
all additions, substitutions and replacements thereof, wherever located,
together with all goods, supplies, incidentals, packaging materials, labels,
materials and any other items used or usable in manufacturing, processing,
packaging or shipping same; in all stages of production -- from raw materials
through work-in-process to finished goods -- and all products and proceeds of
whatever sort and wherever located and any portion thereof which may be
returned, rejected, reclaimed or repossessed by the Collateral Agent from any
Assignor's customers, and shall specifically include all "inventory" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York, now or hereafter owned by any Assignor.
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"Liens" shall mean any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
in a financing lease or analogous instrument, in, of, or on any Assignor's
property.
"Marks" shall mean all right, title and interest in and to
any United States trademarks, service marks and trade names now held or
hereafter acquired by any Assignor, including any registration or application
for registration of any trademarks and service marks in the United States Patent
and Trademark Office or the equivalent thereof in any State of the United States
and any trade dress including logos, trade names, company names, business names,
fictitious names, other business identifiers and/or designs used by any Assignor
in the United States.
"Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor, whether now existing or hereafter incurred under, arising out of or in
connection with any Credit Document to which each Assignor is a party (including
all such obligations and liabilities under the Borrowers/Subsidiaries Guaranty)
and the due performance and compliance by each Assignor with all of the terms
and conditions of each such Credit Document (all such obligations and
liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Protection Agreements
entitled to the benefits of this Agreement, being herein collectively called the
"Credit Document Obligations"); (ii) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor, whether now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection Agreement entitled to the benefits
of this Agreement (including all such obligations and liabilities of such
Assignor under the Borrowers/Subsidiaries Guaranty in respect of such Interest
Rate Protection Agreements (all such obligations and liabilities under this
clause (ii) being herein collectively called the "Other Obligations"); (iii) any
and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the
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Collateral; (iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of each Assignor
referred to in clauses (i), (ii) and (iii) above, after an Event of Default
shall have occurred and be continuing, the reasonable expenses of retaking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Collateral Agent of its
rights hereunder, together with reasonable attorneys' fees and court costs; and
(v) all amounts paid by any Indemnitee as to which such Indemnitee has the right
to reimbursement under Section 8.1 of this Agreement.
"Other Creditors" shall have the meaning provided in the
recitals to this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any United States patent to which any
Assignor now or hereafter has title and any divisions or continuations thereof,
as well as any application for a United States patent now or hereafter made by
any Assignor.
"Primary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
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"Receivables" shall mean any "account" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all of such Assignor's rights to payment
for goods sold or leased or services performed by such Assignor, whether now in
existence or arising from time to time hereafter, including, without limitation,
rights evidenced by an account, note, contract, security agreement, chattel
paper, or other evidence of indebtedness or security, together with (a) all
security pledged, assigned, hypothecated or granted to or held by such Assignor
to secure the foregoing, (b) all of any Assignor's right, title and interest in
and to any goods, the sale of which gave rise thereto, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (d) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith, (e) all books, records, ledger cards,
and invoices relating thereto, (f) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(g) all credit information, reports and memoranda relating thereto and (h) all
other writings related in any way to the foregoing.
"Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.
"Required Secured Creditors" shall mean (i) the Required
Banks (or, to the extent required by Section 12.12 of the Credit Agreement, each
of the Banks) under the Credit Agreement so long as any Credit Document
Obligations remain outstanding and (ii) in any situation not covered by the
preceding clause (i), the holders of a majority of the outstanding principal
amount of the Other Obligations.
"Requisite Creditors" shall have the meaning provided in
Section 10.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the
recitals to this Agreement.
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"Termination Date" shall have the meaning provided in Section
10.8 of this Agreement.
"Trade Secret Rights" shall have the meaning provided in
Section 5.1 of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered to
the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement, addressed:
(a) if to any Assignor, at:
c/o Silgan Holdings Inc.
4 Landmark Square
Suite 400
Stamford, Connecticut 06901
Attention: General Counsel
Telephone No.: (203) 975-7110
Telecopier No.: (203) 975-4598
(b) if to the Collateral Agent:
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: Anthony Logrippo
Telephone No.: (212) 250-4886
Facsimile No.: (212) 250-7218;
(c) if to any Bank Creditor (other than the Collateral Agent),
at such address as such Bank Creditor shall have specified in the
Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the
Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
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10.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly affected
thereby and the Collateral Agent (with the prior written consent of the Required
Secured Creditors; provided, that any change, waiver, modification or variance
affecting the rights and benefits of a single Class of Secured Creditors (and
not all Secured Creditors in a like or similar manner) shall require the written
consent of the Requisite Creditors of such Class of Secured Creditors. For the
purpose of this Agreement the term "Class" shall mean each class of Secured
Creditors, i.e., whether (x) the Bank Creditors as holders of the Credit
Document Obligations or (y) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of (x) with respect to the Credit Document
Obligations, the Required Banks and (y) with respect to the Other Obligations,
the holders of at least a majority of all obligations outstanding from time to
time under the Interest Rate Protection Agreements entitled to the benefits of
this Agreement.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any such Interest Rate Protection Agreement entitled to the benefits of this
Agreement; or (c) any amendment to or modification of any Credit Document or any
such Interest Rate Protection Agreement or any security for any of the
Obligations; whether or not any Assignor shall have notice or knowledge of any
of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding
upon each Assignor and its successors and assigns and shall inure to the benefit
of the Collateral Agent and its successors and assigns; provided, that no
Assignor may transfer or assign any or all of its rights or obligations
hereunder, except in accordance with the terms of the Credit Agreement. All
agreements, statements, representations and warranties made by each Assignor
herein or in any certificate or other instrument delivered by such Assignor or
on its behalf under this Agreement shall be considered to have been relied upon
by the Secured
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Creditors and shall survive the execution and delivery of this Agreement, the
other Credit Documents and the Interest Rate Protection Agreements entitled to
the benefits of this Agreement regardless of any investigation made by the
Secured Creditors or on their behalf.
10.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.7. Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of each
Assignor under or with respect to any Collateral.
10.8. Termination; Release. (a) After the Termination Date,
this Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on Form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the earlier of (i) the date upon
which the Total Commitment and all Interest Rate Protection Agreements entitled
to the benefits of this Agreement have been terminated, no Note or Letter of
Credit is outstanding and all other Obligations (other than indemnities
described in Section 8.1 hereof and described in Section 12.13 of the Credit
Agreement, and any
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other indemnities set forth in any other Security Documents, in each case which
are not then due and payable) have been paid in full and (ii) that date upon
which the conditions described in Section 12.17(b) of the Credit Agreement with
respect to the release of the collateral under all of the Security Documents
shall have been satisfied and Silgan shall have requested the release of such
collateral under such Security Documents.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 8.02 of the Credit Agreement or is
otherwise released at the direction of the Required Secured Creditors, the
Collateral Agent, at the request and expense of such Assignor, will duly release
from the security interest created hereby (and will execute and deliver such
documentation, including UCC- 3 termination or partial release statements and
the like in connection therewith) and assign, transfer and deliver to such
Assignor (without recourse and without any representation or warranty) such of
the Collateral as is then being (or has been) so sold or released and as may be
in the possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement.
(c) At any time that the respective Assignor desires that
Collateral be released as provided in the foregoing Section 10.8(a) or (b), it
shall deliver to the Collateral Agent a certificate signed by an authorized
officer of such Assignor stating that the release of the respective Collateral
is permitted pursuant to Section 10.8(a) or (b) hereof.
10.9. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Assignors and the Collateral Agent.
10.10. The Collateral Agent. The Collatera Agent will hold
in accordance with this Agreement all items of the Collateral at any time
received under this Agreement. It is expressly understood and agreed that the
obligations of the Collateral Agent as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement. The
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Collateral Agent shall act hereunder on the terms and conditions set forth in
Section 11 of the Credit Agreement.
10.11. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.12. Additional Assignors. It is understood and agreed that
any Subsidiary of Silgan that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart hereof and
delivering the same to the Collateral Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
SILGAN HOLDINGS INC.,
as an Assignor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
SILGAN CONTAINERS
CORPORATION, as an
Assignor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
SILGAN PLASTICS CORPORATION,
as an Assignor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
CALIFORNIA-WASHINGTON CAN
CORPORATION, as an
Assignor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
SCCW CAN CORPORATION,
as an Assignor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
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BANKERS TRUST COMPANY,
as Collateral Agent
By /s/ Gregg Shefrin
-------------------------------
Title: Vice President
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EXHIBIT 99.3
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of July 29, 1997 (as amended,
modified or supplemented from time to time, this "Agreement"), made by each of
the undersigned pledgors (each, a "Pledgor" and, together with any other entity
that becomes a pledgor hereunder pursuant to Section 22 hereof, the "Pledgors"),
in favor of BANKERS TRUST COMPANY, as Collateral Agent (the "Pledgee"), for the
benefit of the Secured Creditors (as defined below). Except as otherwise defined
herein, capitalized terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Silgan Holdings Inc. ("Silgan"), Silgan Containers
Corporation ("Containers"), Silgan Plastics Corporation ("Plastics"), each other
Revolving Borrower (together with Silgan, Containers and Plastics, the
"Borrowers," and each individually, a "Borrower"), the lenders from time to time
party thereto (each a "Bank" and, collectively, the "Banks"), Bankers Trust
Company, as Administrative Agent (in such capacity and together with any
successor administrative agent, the "Administrative Agent"), Bank of America
National Trust & Savings Association, as Syndication Agent, Goldman Sachs Credit
Partners L.P. and Morgan Stanley Senior Funding, Inc., as Co-Documentation
Agents, and Bank of America National Trust & Savings Association, Bankers Trust
Company, Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior Funding,
Inc., as Co-Arrangers (in such capacity, the "Co-Arrangers"), have entered into
a Credit Agreement, dated as of July 29, 1997 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrowers as contemplated therein (the Banks, the Administrative Agent, the
Pledgee and the Co-Arrangers are collectively referred to herein as the "Bank
Creditors");
WHEREAS, one or more of the Borrowers are, or may from time to
time in the future be, party to one or more Interest Rate Protection Agreements
with any Bank or an affiliate of a Bank (each such Bank or affiliate, even if
<PAGE>
the respective Bank subsequently ceases to be a Bank under the Credit Agreement
for any reason, together with such Bank's or affiliate's successors and assigns,
are herein called the "Other Creditors", and together with the Bank Creditors,
the "Secured Creditors");
WHEREAS, pursuant to the Borrowers/Subsidiaries Guaranty, each
Pledgor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all obligations and liabilities of each Borrower under or
with respect to the Credit Documents and the Interest Rate Protection Agreements
with the Other Creditors;
WHEREAS, it is a condition precedent to the making of Loans to
each Borrower and the issuance of Letters of Credit for the account of each
Revolving Borrower under the Credit Agreement that each Pledgor shall have
executed and delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
for the benefit of the Secured Creditors and hereby covenants and agrees with
the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by
each Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) of such
Pledgor, whether now existing or hereafter incurred under, arising out
of or in connection with any Credit Document to which such Pledgor is a
party (including all such obligations and liabilities under the
Borrowers/ Subsidiaries Guaranty) and the due performance and
compliance by such Pledgor with all of the terms and conditions of
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each such Credit Document (all such obligations and liabilities under
this clause (i), except to the extent consisting of obligations or
indebtedness with respect to Interest Rate Protection Agreements
entitled to the benefits of this Agreement, being herein collectively
called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities of
such Pledgor, whether now existing or hereafter incurred under, arising
out of or in connection with any Interest Rate Protection Agreement
with any Other Creditor (including all such obligations and liabilities
of such Pledgor under the Borrowers/ Subsidiaries Guaranty in respect
of such Interest Rate Protection Agreements) (all such obligations and
liabilities under this clause (ii) being herein collectively called the
"Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred
to in clauses (i), (ii) and (iii) above, after an Event of Default
(such term, as used in this Agreement, shall mean any Event of Default
under, and as defined in, the Credit Agreement, or any payment default
by any Borrower under any Interest Rate Protection Agreement with any
Other Creditor and shall in any event include, without limitation, any
payment default (after the expiration of any applicable grace period)
on any of the Obligations (as hereinafter defined)) shall have occurred
and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court
costs; and
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(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of
this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein: (i) the term "Stock" shall mean (x) with respect to corporations
incorporated under the laws of the United States or any State or territory
thereof (each a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock of any Domestic Corporation at any time owned by each
Pledgor and (y) with respect to corporations not Domestic Corporations (each a
"Foreign Corporation"), all of the issued and outstanding shares of capital
stock at any time owned by any Pledgor of any Foreign Corporation, provided
that, (A)(I) except as provided in the last sentence of this Section 2, such
Pledgor shall not be required to pledge hereunder more than 66% of the total
combined voting power of all classes of capital stock of any Foreign Corporation
entitled to vote and (II) such Pledgor shall not be required to pledge the
capital stock of any Joint Venture entered into by any Pledgor to the extent
that such capital stock has been (or will be) pledged to support such Pledgor's
guaranty of the obligations of such Joint Venture, in each case, to the extent
that such guaranty and pledge are permitted by the Credit Agreement, and (B) the
term "Stock" shall not include any Margin Stock; (ii) the term "Notes" shall
mean (x) all Intercompany Notes at any time issued to each Pledgor and (y) all
other promissory notes from time to time issued to, or held by, each Pledgor,
provided, that, except as provided in the last sentence of this Section 2, no
Pledgor shall be required to pledge hereunder any promissory notes (including
any Intercompany Notes) issued to such Pledgor by any Foreign Subsidiary and
(iii) the term "Securities" shall mean all of the Stock and Notes. Each Pledgor
represents and warrants that on the date hereof (i) the Stock held by such
Pledgor consists of the number and type of shares of the stock of the
corporations as described in Annex A hereto; (ii) such Stock constitutes that
percentage of the issued and outstanding capital stock of the issuing
corporation as is set forth in Annex A hereto; (iii) the Notes held by such
Pledgor consist of the promissory notes described in Annex B hereto where such
Pledgor is listed as the lender; and (iv) on the date hereof, such Pledgor owns
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no Securities other than those listed on Annexes A and B. In the circumstances
and to the extent provided in Section 7.10 of the Credit Agreement, the 66%
limitation set forth in clause (i)(y) and the limitation in the proviso of
clause (ii) in each case of this Section 2 and in Section 3.2 hereof shall no
longer be applicable and such Pledgor shall duly pledge and deliver to the
Pledgee such of the Securities not theretofore required to be pledged hereunder.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations of such Pledgor and for
the purposes set forth in Section 1 hereof, each Pledgor hereby: (i) grants to
the Pledgee for the benefit of the Secured Creditors a security interest in all
of the Collateral owned by such Pledgor; (ii) pledges and deposits as security
with the Pledgee for the benefit of the Secured Creditors the Securities owned
by such Pledgor on the date hereof, and delivers to the Pledgee certificates or
instruments therefor, duly endorsed in blank in the case of Notes and
accompanied by undated stock powers duly executed in blank by such Pledgor in
the case of Stock, or such other instruments of transfer as are reasonably
acceptable to the Pledgee; and (iii) assigns, transfers, hypothecates,
mortgages, charges and sets over to the Pledgee for the benefit of the Secured
Creditors all of such Pledgor's right, title and interest in and to such
Securities (and in and to all certificates or instruments evidencing such
Securities), to be held by the Pledgee, upon the terms and conditions set forth
in this Agreement.
3.2. Subsequently Acquired Securities. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, such Pledgor will forthwith
pledge and deposit such Securities (or certificates or instruments representing
such Securities) as security with the Pledgee and deliver to the Pledgee
certificates therefor or instruments thereof, duly endorsed in blank in the case
of Notes and accompanied by undated stock powers duly executed in blank in the
case of Stock, or such other instruments of transfer as are reasonably
acceptable to the Pledgee, and will promptly thereafter deliver to the Pledgee a
certificate executed by any authorized officer of such Pledgor describing such
Securities and certifying that the same have been duly pledged with the Pledgee
hereunder. Subject to the last sentence of Section 2 hereof, no Pledgor shall be
required at any time to pledge hereunder (i) any Stock which is more than 66%
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of the total combined voting power of all classes of capital stock of any
Foreign Corporation entitled to vote or (y) any Notes issued by any Foreign
Subsidiary.
3.3. Uncertificated Securities. Notwithstanding anything to
the contrary contained in Sections 3.1 and 3.2 hereof, if any Securities
(whether now owned or hereafter acquired) are uncertificated securities, the
respective Pledgor shall promptly notify the Pledgee thereof, and shall promptly
take all actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York UCC, if applicable). Each Pledgor further agrees to take such actions
as the Pledgee deems reasonably necessary or desirable to effect the foregoing
and to permit the Pledgee to exercise any of its rights and remedies hereunder,
and agrees to provide an opinion of counsel reasonably satisfactory to the
Pledgee with respect to any such pledge of uncertificated Securities promptly
upon request of the Pledgee.
3.4 Definition of Pledged Stock, Pledged Notes, Pledged
Securities and Collateral. All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock," all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes," all of the Pledged Stock and Pledged Notes together are
hereinafter called the "Pledged Securities," which together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, is hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Securities, which may be held (in
the discretion of the Pledgee) in the name of such Pledgor, endorsed or assigned
in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or
a sub-agent appointed by the Pledgee. The Pledgee agrees to promptly notify the
relevant Pledgor after the appointment of any sub-agent; provided, however, that
the failure to give such notice shall not affect the validity of such
appointment.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
(i) an Event of Default shall have occurred and be continuing and (ii) written
notice thereof shall have been given by the Pledgee to the relevant Pledgor
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(provided, that if an Event of Default specified in Section 9.05 of the Credit
Agreement shall occur, no such notice shall be required), each Pledgor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Securities and to give all consents, waivers or ratifications in
respect thereof; provided, that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement, any other Credit Document or any
Interest Rate Protection Agreement (collectively, the "Secured Debt
Agreements"), or which would have the effect of impairing the position or
interests of the Pledgee or any other Secured Creditor under this Agreement. All
such rights of such Pledgor to vote and to give consents, waivers and
ratifications shall cease in case an Event of Default shall occur and be
continuing and written notice shall have been given to the relevant Pledgor
pursuant to clause (ii) above, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of
Default shall have occurred and be continuing, all cash dividends payable in
respect of the Pledged Stock and all payments in respect of the Pledged Notes
shall be paid to the respective Pledgor. The Pledgee shall be entitled to
receive directly, and to retain as part of the Collateral:
(i) all other or additional stock or other securities or
property (other than cash) paid or distributed by way of dividend or
otherwise in respect of the Pledged Stock;
(ii) all other or additional stock or other securities or
property (including cash) paid or distributed in respect of the Pledged
Stock by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement; and
(iii) all other or additional stock or other securities or
property which may be paid in respect of the Collateral by reason of
any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
Nothing contained in this Section 6 (other than as set forth in the first
sentence hereof) shall limit or restrict in any way the Pledgee's right to
receive proceeds of the Collateral in any form in accordance with Section 3 of
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this Agreement. All dividends, distributions or other payments which are
received by any Pledgor contrary to the provisions of this Section 6 and Section
7 hereof shall be received in trust for the benefit of the Pledgee, shall be
segregated from other property or funds of such Pledgor and shall be forthwith
paid over to the Pledgee as Collateral in the same form as so received (with any
necessary endorsement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be contin- uing, the Pledgee shall be entitled
to exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other Secured Debt Agreement or by law) for the protection
and enforcement of its rights in respect of the Collateral, and the Pledgee
shall be entitled, without limitation, to exercise the following rights, which
each Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the
Collateral payable to such Pledgor under Section 6 hereof;
(ii) to transfer all or any part of the Pledged Securities
into the Pledgee's name or the name of its nominee or nominees (the
Pledgee agrees to promptly notify the relevant Pledgor after such
transfer; provided, however, that the failure to give such notice shall
not affect the validity of such transfer);
(iii) to accelerate any Pledged Note which may be accelerated
in accordance with its terms, and take any other action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(iv) subject to the giving of written notice to the relevant
Pledgor in accordance with clause (ii) of Section 5 hereof, to vote all
or any part of the Pledged Stock (whether or not transferred into the
name of the Pledgee) and give all consents, waivers and ratifications
in respect of the Collateral and otherwise act with respect thereto as
though it were the outright owner thereof (each Pledgor hereby
irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do
so); and
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(v) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by each Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine; provided, that at least 10 days' written notice of the time
and place of any such sale shall be given to such Pledgor.
Each Pledgor hereby waives and releases to the fullest extent permitted by law
any right or equity of redemption with respect to the Collateral, whether before
or after sale hereunder, and all rights, if any, of marshalling the Collateral
and any other security for the Obligations or otherwise. At any such sale,
unless prohibited by applicable law, the Pledgee on behalf of the Secured
Creditors may bid for and purchase all or any part of the Collateral so sold
free from any such right or equity of redemption. Neither the Pledgee nor any
other Secured Creditor shall be liable for failure to collect or realize upon
any or all of the Collateral or for any delay in so doing nor shall any of them
be under any obligation to take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or in any other Secured Debt
Agreement or now or hereafter existing at law or in equity or by statute shall
be cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or in any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. The Secured Creditors
agree that this Agreement may be enforced only by the action of the
Administrative Agent or the Pledgee, in each case acting upon the instructions
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of the Required Secured Creditors (as defined in the Security Agreement) and
that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised only by the Administrative Agent or the Pledgee for the benefit of
the Secured Creditors upon the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i)
to indemnify and hold harmless the Pledgee in such capacity and each other
Secured Creditor from and against any and all claims, demands, losses, judgments
and liabilities of whatsoever kind or nature, and (ii) to reimburse the Pledgee
and each other Secured Creditor for all costs and expenses, including reasonable
attorneys' fees and expenses, in the case of each of clauses (i) and (ii) above,
growing out of or resulting from this Agreement or the exercise by the Pledgee
of any right or remedy granted to it hereunder or under any other Secured Debt
Agreement except, with respect to clauses (i) and (ii) above, to the extent that
same arose from the Pledgee's or such other Secured Creditor's gross negligence
or willful misconduct. In no event shall the Pledgee be liable, in the absence
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of gross negligence or willful misconduct on its part, for any matter or thing
in connection with this Agreement other than to account for moneys actually
received by it in accordance with the terms hereof. If and to the extent that
the obligations of the Pledgors under this Section 11 are unenforceable for any
reason, each Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law.
12. FURTHER ASSURANCES. Each Pledgor agrees that it will join
with the Pledgee in executing and, at such Pledgor's own expense, file and
refile under the applicable UCC or appropriate local equivalent, such financing
statements, continuation statements and other documents in such offices as the
Pledgee may deem necessary or appropriate and wherever required or permitted by
law in order to perfect and preserve the Pledgee's security interest in the
Collateral and hereby authorizes the Pledgee to file financing statements and
amendments thereto relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably require or deem advisable to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. The Pledgee shall act hereunder on the
terms and conditions set forth herein and in Section 11 of the Credit Agreement.
14. TRANSFER BY PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as may be
permitted in accordance with the terms of this Agreement or the Credit
Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. Each
Pledgor represents, warrants and covenants that (i) it is the legal, record and
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beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by this Agreement and the other Security
Documents; (ii) it has full power, authority and legal right to pledge all the
Securities pledged by it pursuant to this Agreement; (iii) this Agreement has
been duly authorized, executed and delivered by such Pledgor and constitutes a
legal, valid and binding obligation of such Pledgor enforceable in accordance
with its terms, except to the extent that the enforceability hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
(iv) no consent of any other party (including, without limitation, any
stockholder or creditor of such Pledgor or any of its Subsidiaries) and no
consent, license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental
authority is required to be obtained by such Pledgor in connection with the
execution, delivery or performance of this Agreement, or in connection with the
exercise of its rights and remedies pursuant to this Agreement, except as may be
required in connection with the disposition of the Securities by laws affecting
the offering and sale of securities generally; (v) the execution, delivery and
performance of this Agreement by such Pledgor does not violate any provision of
any applicable law, statute, rule or regulation or of any order, writ,
injunction or decree of any court or governmental authority, domestic or
foreign, or of the certificate of incorporation or by-laws of such Pledgor or of
any securities issued by such Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, deed of trust, loan agreement, credit agreement or any
other agreement, instrument or undertaking to which such Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon such Pledgor or any
of its Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition of any lien or encumbrance on any of the assets of
such Pledgor or any of its Subsidiaries except as contemplated by this
Agreement; (vi) all the shares of Stock of Subsidiaries of Silgan have been duly
and validly issued, are fully paid and non-assessable; (vii) each of the Pledged
Notes constituting Intercompany Notes, when executed by the obligor thereof,
will be the legal, valid and binding obligation of such obligor, enforceable in
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accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
and (viii) the pledge and assignment of the Securities pursuant to this
Agreement, together with the delivery of the Securities pursuant to this
Agreement (which delivery has been made), creates a valid and perfected first
security interest in such Securities and the proceeds thereof, subject to no
prior lien or encumbrance or to any agreement purporting to grant to any third
party a lien or encumbrance on the property or assets of such Pledgor which
would include the Securities. Each Pledgor covenants and agrees that it will
defend the Pledgee's right, title and security interest in and to the Securities
and the proceeds thereof against the claims and demands of all persons
whomsoever; and such Pledgor covenants and agrees that it will have like title
to and right to pledge any other property at any time hereafter pledged to the
Pledgee as Collateral hereunder and will likewise defend the right thereto and
security interest therein of the Pledgee and the other Secured Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, with- out limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument or this Agreement; (iii) any furnishing of any
additional security to the Pledgee or its assignee or any acceptance thereof or
any release of any security by the Pledgee or its assignee; (iv) any limitation
on any party's liability or obligations under any such instrument or agreement
or any invalidity or unenforceability, in whole or in part, of any such
instrument or agreement or any term thereof; or (v) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to such Pledgor or any Subsidiary of such Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
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any court, in any such proceeding, whether or not such Pledgor shall have notice
or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and any Pledgor shall have received from the Pledgee
a written request or requests that such Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock, such Pledgor
as soon as practicable and at its expense will use its reasonable efforts to
cause such registration to be effected (and be kept effective) and will use its
reasonable efforts to cause such qualification and compliance to be effected
(and be kept effective) as may be so requested and as would permit or facilitate
the sale and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act as then in effect (or any similar statute
then in effect), appropriate qualifications under applicable blue sky or other
state securities laws and appropriate compliance with any other government
requirements; provided, that the Pledgee shall furnish to such Pledgor such
information regarding the Pledgee as such Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Such Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee, each other Secured Creditor and all others participating in the
distribution of the Pledged Stock against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to such
Pledgor by the Pledgee or such other Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall deter- mine to
exercise its right to sell all or any part of the Pledged Securities pursuant to
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Section 7 hereof, such Pledged Securities or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Securities or part thereof by private sale in such manner and
under such circumstances as the Pledgee may deem necessary or advisable in order
that such sale may legally be effected without such registration; provided, that
at least 10 days' notice of the time and place of any such sale shall be given
to such Pledgor. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion: (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Pledged Securities or part thereof shall have been filed
under such Securities Act; (ii) may approach and negotiate with a single
possible purchaser to effect such sale; and (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Pledged Securities or part thereof. In the event of any such sale, the
Pledgee shall incur no responsibility or liability for selling all or any part
of the Pledged Securities at a price which the Pledgee, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until after registration as aforesaid.
18. TERMINATION, RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will promptly execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly release from the security interest created hereby and
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Pledgee and as has not theretofore been sold or otherwise applied or
released pursuant to this Agreement. As used in this Agreement, "Termination
Date" shall mean the earlier of (i) the date upon which the Total Commitment and
all Interest Rate Protection Agreements entitled to the benefits of this
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Agreement have been terminated, no Note (as defined in the Credit Agreement) or
Letter of Credit is outstanding and all other Obligations (other than
indemnities described in Section 11 hereof and described in Section 12.13 of the
Credit Agreement, and any other indemnities set forth in any other Security
Documents, in each case which are not then due and payable) have been paid in
full and (ii) that date upon which the conditions set forth in Section 12.17(b)
of the Credit Agreement with respect to the release of the collateral under all
of the Security Documents shall have been satisfied and Silgan shall have
requested the release of all such collateral under such Security Documents.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 8.02 of the Credit Agreement or is
otherwise released at the direction of the Required Secured Creditors, the
Pledgee, at the request and expense of such Pledgor, will duly release from the
security interest created hereby and assign, transfer and deliver to such
Pledgor (without recourse and without any representation or warranty) such of
the Collateral as is then being (or has been) so sold or released and as may be
in possession of the Pledgee and has not theretofore been released pursuant to
this Agreement.
(c) At any time that a Pledgor desires that Collateral be
released as provided in the foregoing Section 18(a) or (b), it shall deliver to
the Pledgee a certificate signed by an authorized officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
Section 18(a) or (b).
19. NOTICES, ETC. All notices and other communications
hereunder shall be in writing and shall be delivered or mailed by first class
mail, postage prepaid, addressed:
(a) if to any Pledgor, at:
c/o Silgan Holdings Inc.
4 Landmark Square
Suite 400
Stamford, Connecticut 06901
Attention: General Counsel
Telephone No.: (203) 975-7110
Telecopier No.: (203) 975-4598
(b) if to the Pledgee, at:
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Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: Anthony Logrippo
Telephone No.: (212) 250-4886
Telecopier No.: (212) 250-7218
(c) if to any Bank (other than the Pledgee), at such address
as such Bank shall have specified in the
Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Pledgor directly affected
thereby and the Pledgee (with the written consent of the Required Secured
Creditors); provided, that any change, waiver, modification or variance
affecting the rights and benefits of a single Class (as defined below) of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors (as defined below)
of such Class. For the purpose of this Agreement, the term "Class" shall mean
each class of Secured Creditors, i.e., whether (i) the Bank Creditors as holders
of the Credit Document Obligations or (ii) the Other Creditors as holders of the
Other Obligations. For the purpose of this Agreement, the term "Requisite
Creditors" of any Class shall mean each of (i) with respect to the Credit
Document Obligations, the Required Banks and (ii) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection Agreements with the Other
Creditors.
21. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of each Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns, provided that no
Pledgor may assign any of its rights or obligations under this Agreement, except
in accordance with the terms of the Credit Agreement. THIS AGREEMENT SHALL BE
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CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE
OF NEW YORK. The headings in this Agreement are for purposes of reference only
and shall not limit or define the meaning hereof. This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which shall constitute one instrument.
22. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of Silgan that is required to execute a counterpart of this Agreement
after the date hereof pursuant to the Credit Agreement shall automatically
become a Pledgor hereunder by executing a counterpart hereof and delivering the
same to the Pledgee.
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IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
SILGAN HOLDINGS INC., as a Pledgor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
SILGAN CONTAINERS CORPORATION,
as a Pledgor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
SILGAN PLASTICS CORPORATION,
as a Pledgor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
CALIFORNIA-WASHINGTON CAN
CORPORATION, as a Pledgor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
SCCW CAN CORPORATION, as a Pledgor
By /s/ Frank W. Hogan III
-------------------------------
Title: Vice President, General Counsel
and Secretary
BANKERS TRUST COMPANY,
as Collateral Agent and as Pledgee
By /s/ Gregg Shefrin
-------------------------------
Title: Vice President
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EXHIBIT 99.4
BORROWERS/SUBSIDIARIES GUARANTY
GUARANTY, dated as of July 29, 1997 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by each of the
undersigned guarantors (each, a "Guarantor" and, together with any other entity
that becomes a guarantor hereunder pursuant to Section 25 hereof, the
"Guarantors"). Except as otherwise defined herein, capitalized terms used herein
and defined in the Credit Agreement (as defined below) shall be used herein as
therein defined.
W I T N E S S E T H :
WHEREAS, Silgan Holdings Inc. ("Silgan"), Silgan Containers
Corporation ("Containers"), Silgan Plastics Corporation ("Plastics"), each other
Revolving Borrower (together with Silgan, Containers and Plastics, the
"Borrowers," and each individually, a "Borrower"), the lenders from time to time
party thereto (each a "Bank" and, collectively, the "Banks"), Bankers Trust
Company, as Administrative Agent (in such capacity and together with any
successor administrative agent, the "Administrative Agent"), Bank of America
National Trust & Savings Association, as Syndication Agent, Goldman Sachs Credit
Partners L.P. and Morgan Stanley Senior Funding, Inc., as Co-Documentation
Agents, and Bank of America National Trust & Savings Association, Bankers Trust
Company, Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior Funding,
Inc., as Co-Arrangers (in such capacity, the "Co-Arrangers"), have entered into
a Credit Agreement, dated as of July 29, 1997 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrowers as contemplated therein (the Banks, the Administrative Agent, the
Collateral Agent and the Co-Arrangers are collectively referred to herein as the
"Bank Creditors");
WHEREAS, one or more of the Borrowers are, or may from time to
time in the future be, party to one or more Interest Rate Protection Agreements
with any Bank or an affiliate of a Bank (each such Bank or affiliate, even if
the respective Bank subsequently ceases to be a Bank under the Credit Agreement
for any reason, together with such Bank's or affiliate's successors and assigns,
are herein called the "Other Creditors", and together with the Bank Creditors,
the "Secured Creditors");
<PAGE>
WHEREAS, each Guarantor (other than Silgan) is a Subsidiary of
Silgan;
WHEREAS, it is a condition precedent to the making of Loans to
each Borrower and the issuance of Letters of Credit for the account of each
Revolving Borrower under the Credit Agreement that each Guarantor shall have
executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the
incurrence of Loans and the issuance of Letters of Credit under the Credit
Agreement and the entering into of Interest Rate Protection Agreements and,
accordingly, desires to execute this Guaranty in order to satisfy the conditions
described in the preceding paragraph and to induce the Banks to make the Loans
and issue (and/or participate in) the Letters of Credit under the Credit
Agreement and to induce the Other Creditors to enter into the Interest Rate
Protection Agreements;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warran-ties to the Secured Creditors and hereby covenants and agrees with
each Secured Creditor as follows:
1. Each Guarantor, jointly and severally, and absolutely
irrevocably and unconditionally, guarantees: (i) to the Bank Creditors the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of (x) the principal of and interest on the Notes issued by, and the
Loans made to, each Borrower under the Credit Agreement, and all reimbursement
obligations and Unpaid Drawings with respect to Letters of Credit issued under
the Credit Agreement and (y) all other obligations (including obligations which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due) and liabilities owing by each Borrower to the Bank Creditors under
the Credit Agreement (including, without limitation, indemnities, Fees and
interest thereon) and the other Credit Documents to which such Borrower is a
party, whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement and each such other Credit Document and the
due performance and compliance by each Borrower with all of the terms and
conditions of the Credit Agreement and each such other Credit Document (all such
principal, interest, liabilities and obligations under this clause (i) being
herein collectively called the "Credit Document Obligations"); and (ii) to each
Other Creditor the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities owing by each Borrower to
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each such Other Creditor under any Interest Rate Protection Agreements, whether
now in existence or hereafter arising, and the due performance and compliance by
each Borrower with all terms, conditions and agreements contained therein (all
such obligations and liabilities under this clause (ii) being herein
collectively called the "Other Obligations", and together with the Credit
Document Obligations, are herein collectively called the "Guaranteed
Obligations"). Each Guarantor understands, agrees and confirms that the Secured
Creditors may enforce this Guaranty up to the full amount of the Guaranteed
Obligations against each Guarantor without proceeding against any other
Guarantor, any Borrower, against any security for the Guaranteed Obligations, or
under any other guaranty covering all or a portion of the Guaranteed
Obligations. All payments by each Guarantor under this Guaranty shall be made on
the same basis as payments are made by the Borrowers under Sections 4.03 and
4.04 of the Credit Agreement. For purposes of this Guaranty, the term
"Guarantor" as applied to any Borrower shall refer to such Borrower as a
guarantor of indebtedness incurred by the other Borrowers, as opposed to
indebtedness directly incurred by it. This Guaranty constitutes a guaranty of
payment, and not of collection.
2. Additionally, each Guarantor, jointly and severally, and
absolutely, unconditionally and irrevocably, guarantees the payment of any and
all Guaranteed Obligations of each Borrower thereof to the Secured Creditors
whether or not due or payable by such Borrower upon the occurrence in respect of
such Borrower of any of the events specified in Section 9.05 of the Credit
Agreement, and absolutely, unconditionally and irrevocably, and jointly and
severally, promises to pay such Guaranteed Obligations to the Secured Creditors,
or to their order, on demand, in lawful money of the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
of any Borrower whether executed by such Guarantor, any other Guarantor, any
other guarantor or by any other party, and the liability of each Guarantor
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by any Borrower or by any other party, (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the Guaranteed Obligations of any Borrower, (c) any
payment on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by any
Borrower or (e) any payment made to any Secured Creditor on the Guaranteed
Obligations which any Secured Creditor repays any Borrower pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
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<PAGE>
4. The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor, any other guarantor or any Borrower,
and a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or any Borrower and whether or not any other Guarantor, any
other guarantor of any Borrower or any Borrower be joined in any such action or
actions. Any payment by a Borrower or other circumstance which operates to toll
any statute of limitations as to such Borrower shall operate to toll the statute
of limitations as to each Guarantor.
5. Any Secured Creditor may (except as shall be required by
applicable statute and cannot be waived) at any time and from time to time
without the consent of, or notice to, any Guarantor (in its capacity as
Guarantor), without incurring responsibility to such Guarantor, without
impairing or releasing the obligations of such Guarantor hereunder, upon or
without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Guaranteed Obligations, any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the
guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) sell, exchange, release, impair, surrender, realize upon
or otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against any
Borrower, any other Credit Party or otherwise act or refrain from
acting;
(d) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of any Borrower to
creditors of such Borrower other than the Secured Creditors;
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of any Borrower to the Secured Creditors
regardless of what liabilities of such Borrower remain unpaid;
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<PAGE>
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements, the
Credit Documents or any of the instruments or agreements referred to
therein, or otherwise amend, modify or supplement any of the Interest
Rate Protection Agreements, the Credit Documents or any of such other
instruments or agreements; and/or
(g) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against any Borrower to recover full indemnity for any payments made
pursuant to this Guaranty.
6. No invalidity, irregularity or unenforceability of all or
any part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
7. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Secured Creditor in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies which any Secured Creditor would otherwise
have. No notice to or demand on any Guarantor in any case shall entitle such
Guarantor to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Creditor to any other
or further action in any circumstances without notice or demand. It is not
necessary for any Secured Creditor to inquire into the capacity or powers of any
Guarantor or any Borrower or the officers, directors, partners or agents acting
or purporting to act on its behalf, in connection with the execution of the
Credit Documents, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
8. Any indebtedness of any Borrower now or hereafter held by
any Guarantor is hereby subordinated to the indebtedness of such Borrower to the
Secured Creditors; and such indebtedness of such Borrower to any Guarantor, if
the Administrative Agent or the Collateral Agent, after an Event of Default has
occurred and is continuing, so requests, shall be collected, enforced and
received by such Guarantor as trustee for the Secured Creditors and be paid over
to the Secured Creditors on account of the indebtedness of such Borrower to the
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<PAGE>
Secured Creditors, but without affecting or impairing in any manner the
liability of such Guarantor under the other provisions of this Guaranty. Prior
to the transfer by any Guarantor of any note or negotiable instrument evidencing
any indebtedness of any Borrower to such Guarantor, such Guarantor shall mark
such note or negotiable instrument with a legend that the same is subject to
this subordination. Without limiting the generality of the foregoing, each
Guarantor hereby agrees with the Secured Creditors that it will not exercise any
right of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
9. (a) Each Guarantor waives any right (except as shall be required
by applicable statute or law and cannot be waived) to require the Secured
Creditors to: (i) proceed against any Borrower, any other Guarantor, any other
guarantor of any Borrower or any other party; (ii) proceed against or exhaust
any security held from any Borrower, any other Guarantor, any other guarantor of
any Borrower or any other party; or (iii) pursue any other remedy in the Secured
Creditors' power whatsoever. Each Guarantor waives (to the fullest extent
permitted by applicable law) any defense based on or arising out of any defense
of any Borrower, any other Guarantor, any other guarantor of any Borrower, any
Subsidiary thereof or any other party other than payment in full of the
Guaranteed Obligations, including, without limitation, any defense based on or
arising out of the disability of any Borrower, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party, or the
unenforceability of the Guaranteed Obligations or any part thereof for any
reason. The Secured Creditors may, at their election, foreclose on any security
held by the Administrative Agent, the Collateral Agent or the other Secured
Creditors by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, or exercise any other right
or remedy the Secured Creditors may have against any Borrower or any other
party, or any security, without affecting or impairing in any way the liability
of any Guarantor hereunder except to the extent the Guaranteed Obligations have
been paid in full. Each Guarantor waives any defense arising out of any such
election by the Secured Creditors, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of such Guarantor against any Borrower or any other party or any security.
(b) Each Guarantor hereby waives (to the fullest extent
permitted by applicable law) promptness, diligence, presentment, demands for
payment or performance, protests and notices, including, without limitation,
notices of nonpayment or nonperformance, notices of protest, notices of
dishonor, notices of acceptance of this Guaranty, notices of any liability to
which it may apply, notices of the existence, creation or incurring of new or
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additional indebtedness, notices of suit or taking of other action by the
Administrative Agent or any other Secured Creditor against, and any other notice
to, any party liable thereon (including such Guarantor or any other guarantor or
any Borrower). Each Guarantor assumes all responsibility for being and keeping
itself informed of each Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.
(c) Each Guarantor hereby acknowledges, affirms and
understands that to the extent the Guaranteed Obligations are secured by Real
Property located in the State of California, each Guarantor shall be liable for
the full amount of the liability hereunder notwithstanding the foreclosure on
such Real Property by trustee sale or any other reason impairing such
Guarantor's or any Secured Creditor's right to proceed against any Borrower, any
other Guarantor or any other guarantor of the Guaranteed Obligations. In
accordance with Section 2856 of the California Civil Code, each Guarantor hereby
waives:
(i) all rights of subrogation, reimbursement, indemnification,
and contribution and any other rights and defenses that are or may
become available to such Guarantor by reason of Sections 2787 to 2855,
inclusive, 2899 and 3433 of the California Civil Code;
(ii) all rights and defenses that such Guarantor may have
because the Guaranteed Obligations are secured by Real Property located
in the State of California. This means, among other things: (A) the
Secured Creditors may collect from any Guarantor without first
foreclosing on any real or personal property collateral pledged by any
Borrower; and (B) if the Secured Creditors foreclose on any Real
Property collateral pledged by any Borrower, (1) the amount of the
Guaranteed Obligations may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is
worth more than the sale price, and (2) the Secured Creditors may
collect from any Guarantor even if the Secured Creditors, by
foreclosing on the Real Property collateral, have destroyed any right
such Guarantor may have to collect from any Borrower. This is an
unconditional and irrevocable waiver of any rights and defenses each
Guarantor may have because the Guaranteed Obligations are secured by
Real Property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d or 726
of the California Code of Civil Procedure; and
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(iii) all rights and defenses arising out of an election of
remedies by the Secured Creditors, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security
for the Guaranteed Obligations, has destroyed any Guarantor's rights of
subrogation and reimbursement against any Borrower by the operation of
Section 580d of the California Code of Civil Procedure or otherwise.
Each Guarantor warrants and agrees that each of the waivers set forth above is
made with full knowledge of its significance and consequences and that if any of
such waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the maximum extent permitted by
law.
10. The Secured Creditors agree that this Guaranty may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Secured Creditors (as defined
in the Security Agreement) and that no other Secured Creditor shall have any
right individually to seek to enforce or to enforce this Guaranty or to realize
upon the security to be granted by the Security Documents, it being understood
and agreed that such rights and remedies may be exercised by the Administrative
Agent or the Collateral Agent for the benefit of the Secured Creditors upon the
terms of this Guaranty and the Security Documents. The Secured Creditors further
agree that this Guaranty may not be enforced against any director, officer,
employee, member or stockholder of any Guarantor (except to the extent such
member or stockholder is also a Guarantor hereunder).
11. In order to induce the Banks to make Loans and issue or
participate in Letters of Credit pursuant to the Credit Agreement, and in order
to induce the Other Creditors to execute, deliver and perform the Interest Rate
Protection Agreements, each Guarantor represents, warrants and covenants (as to
itself and each of its Subsidiaries), in each case after giving effect to the
refinancing of the Existing Credit Agreement, that:
(a) Such Guarantor and each of its Subsidiaries (i) is a duly
organized and validly existing corporation in good standing under the
laws of the jurisdiction of its organization, (ii) has the corporate
power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and
(iii) is duly qualified as a foreign corporation and is in good
standing in each jurisdiction where the ownership, leasing or operation
of property or the conduct of its business requires such qualification,
except in the jurisdictions where the failure to be so qualified could
not reasonably be expected to, individually or in the aggregate, have a
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material adverse effect on the business, operations, property, assets
or condition (financial or otherwise) of Silgan and its Subsidiaries
taken as a whole.
(b) Such Guarantor has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this
Guaranty and each other Credit Document to which it is a party and has
taken all necessary corporate action to authorize the execution,
delivery and performance by it of each such Credit Document. Such
Guarantor has duly executed and delivered this Guaranty and each other
Credit Document to which it is a party and each such Credit Document
constitutes the legal, valid and binding obligation of such Guarantor
enforceable in accordance with its terms, except to the extent that the
enforceability hereof or thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Credit Document to which it is
a party, nor compliance by it with any of the terms and provisions
hereof or thereof (i) will contravene any applicable provision of any
law, statute, rule or regulation, or any order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict
or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under,
or result in the creation or imposition of (or the obligation to create
or impose) any Lien (except pursuant to the Security Documents) upon
any of the property or assets of such Guarantor or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement, loan agreement or any other agreement,
contract or instrument to which such Guarantor or any of its
Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) will violate any
provision of the certificate of incorporation or by-laws (or equivalent
organizational documents) of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as
have been obtained or made and except for any filings of financing
statements, mortgages and other documents required by the Security
Documents, all of which have been made), or exemption by, any
governmental or public body or authority, or any subdivision thereof,
is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Guaranty or any other
Credit Document to which such Guarantor is a party or (ii) the
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legality, validity, binding effect or enforceability of this Guaranty
or any other Credit Document to which such Guarantor is a party.
(e) There are no actions, suits, investigations or proceedings
pending or, to the best knowledge of such Guarantor, threatened (i)
with respect to any Credit Document or (ii) that are reasonably likely
to materially and adversely affect the business, operations, property,
assets or condition (financial or otherwise) of Silgan and its
Subsidiaries taken as a whole.
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitment and all Interest Rate
Protection Agreements entitled to the benefits of the Guaranty and when no Note
or Letter of Credit remains outstanding and all Guaranteed Obligations have been
paid in full (other than indemnities described in Section 12.13 of the Credit
Agreement and analogous provisions in the Security Documents which are not then
due and payable), such Guarantor shall take, or will refrain from taking, as the
case may be, all actions that are necessary to be taken or not taken so that no
violation of any provision, covenant or agreement contained in Section 7 or 8 of
the Credit Agreement, and so that no Default or Event of Default, is caused by
the actions of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses of each Secured Creditor in
connection with the enforcement of this Guaranty and of the Administrative Agent
and each Co-Arranger in connection with any amendment, waiver or consent
relating hereto (including, without limitation, the reasonable fees and
disbursements of one counsel (including in-house counsel) employed by each of
the Secured Creditors).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and assigns, provided that no Guarantor may assign any of
its rights or obligations hereunder, except in accordance with the terms of the
Credit Agreement.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated, except with the written consent of each
Guarantor directly affected thereby and the Administrative Agent (with the prior
written consent of the Required Secured Creditors); provided, that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Creditors (and not all Secured Creditors in
a like or similar manner) shall require the written consent of the Requisite
Creditors (as defined below) of such Class of Secured Creditors (it being
understood that the addition or release of any Guarantor hereunder shall not
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constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released). For the purpose of this
Guaranty, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Bank Creditors as holders of the Credit Document Obligations or
(y) the Other Creditors as the holders of the Other Obligations. For the purpose
of this Guaranty, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Banks and (y)
with respect to the Other Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection
Agreements entitled to the benefits of this Guaranty.
16. Each Guarantor acknowledges that an executed (or conformed)
copy of each of the Credit Documents and Interest Rate Protection Agreements
entitled to the benefits of the Guaranty has been made available to its
principal executive officers and such officers are familiar with the contents
thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement continuing
after any applicable grace period), each Secured Creditor is hereby authorized
at any time or from time to time, without notice to any Guarantor or to any
other Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Secured Creditor to or for the
credit or the account of such Guarantor, against and on account of the
obligations and liabilities of such Guarantor to such Secured Creditor under
this Guaranty, irrespective of whether or not such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or claims,
or any of them, shall be contingent or unmatured. Notwithstanding anything to
the contrary contained in this Section 17, no Secured Creditor shall exercise
any such right of set-off without the prior consent of the Administrative Agent
or the Required Secured Creditors so long as the Guaranteed Obligations shall be
secured by any Real Property located in the State of California, it being
understood and agreed, however, that this sentence is for the sole benefit of
the Secured Creditors and may be amended, modified or waived in any respect by
the Required Secured Creditors without the requirement of prior notice to or
consent by any Credit Party and does not constitute a waiver of any rights
against any Credit Party or against any Collateral.
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18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at c/o Silgan Holdings Inc., 4 Landmark Square,
Suite 400, Stamford, Connecticut 06901, Attention: General Counsel, Telephone
No.: (203) 975-7110, Telecopier No.: (203) 975-4598 and (iii) in the case of any
Other Creditor, at such address as such Other Creditor shall have specified in
writing to the Guarantors; or in any case at such other address as any of the
Persons listed above may hereafter notify the others in writing.
19. If claim is ever made upon any Secured Creditor for repayment
or recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including any Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of any Borrower, and such Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty or any other Credit Document to which such
Guarantor is a party may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Guaranty, each Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby
further irrevocably waives any claim that any such courts lack jurisdiction over
such Guarantor, and agrees not to plead or claim, in any legal action or
proceeding with respect to this Guaranty or any other Credit Document to which
such Guarantor is a party brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such Guarantor. Each Guarantor further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
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certified mail, postage prepaid, to each Guarantor at its address set forth
above, such service to become effective 30 days after such mailing. Each
Guarantor hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other Credit Document to which such
Guarantor is a party that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any of the Secured
Creditors to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Guaranty or any other credit document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that such action or proceeding brought in any such
court has been brought in an inconvenient forum.
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 8.02 of the Credit Agreement (or such sale or other
disposition or liquidation has been approved in writing by the Required Secured
Creditors), upon the consummation of such sale, disposition or liquidation such
Guarantor shall be released from this Guaranty and this Guaranty shall, as to
each such Guarantor or Guarantors, terminate, and have no further force or
effect (it being understood and agreed that the sale of one or more Persons that
own, directly or indirectly, all of the capital stock or other equity interests
of any Guarantor shall be deemed to be a sale of such Guarantor for the purposes
of this Section 21).
22. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with each Guarantor and the Agent.
23. EACH GUARANTOR AND EACH OF THE SECURED CREDITORS HEREBY
IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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24. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
25. It is understood and agreed that any Subsidiary of Silgan that
is required to execute a counterpart of this Guaranty after the date hereof
pursuant to the Credit Agreement shall automatically become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to the
Administrative Agent.
26. At any time a payment in respect of the Guaranteed Obligations
is made under this Guaranty, the right of contribution of each Guarantor against
each other Guarantor shall be determined as provided in the immediately
following sentence, with the right of contribution of each Guarantor to be
revised and restated as of each date on which a payment (a "Relevant Payment")
is made on the Guaranteed Obligations under this Guaranty. At any time that a
Relevant Payment is made by a Guarantor that results in the aggregate payments
made by such Guarantor in respect of the Guaranteed Obligations to and including
the date of the Relevant Payment exceeding such Guarantor's Contribution
Percentage (as defined below) of the aggregate payments made by all Guarantors
in respect of the Guaranteed Obligations to and including the date of the
Relevant Payment (such excess, the "Aggregate Excess Amount"), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less than such other
Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantors. A Guarantor's right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of any subsequent computation; provided, that
no Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been paid in full and the Total Commitment and all Letters of
Credit and Interest Rate Protection Agreements have been terminated, it being
expressly recognized and agreed by all parties hereto that any Guarantor's right
of contribution arising pursuant to this Section 26 against any other Guarantor
shall be expressly junior and subordinate to such other Guarantor's obligations
and liabilities in respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this Section 26: (i) each
Guarantor's "Contribution Percentage" shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y)
the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net
Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as defined
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below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of each
Guarantor shall mean the amount by which the fair salable value of such
Guarantor's assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty) on such
date. All parties hereto recognize and agree that, except for any right of
contribution arising pursuant to this Section 26, each Guarantor who makes any
payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment. Each of the Guarantors recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. In this connection, each Guarantor has the right
to waive its contribution right against any Guarantor to the extent that after
giving effect to such waiver such Guarantor would remain solvent, in the
reasonable determination of the Required Banks.
27. Each Secured Creditor and each Guarantor hereby confirms that
it is its intention that this Guaranty not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent
Conveyance Act or any similar Federal or state law. To effectuate the foregoing
intention, each Secured Creditor and each Guarantor hereby irrevocably agrees
that the Guaranteed Obligations guaranteed by each Guarantor under this Guaranty
shall be limited to such amount as will, after giving effect to such maximum
amount and all of such Guarantor's other (contingent or otherwise) liabilities
that are relevant under such laws, and after giving effect to any rights to
contribution pursuant to any agreement providing for an equitable contribution
among the Guarantors (including pursuant to Section 26 hereof), result in the
Guaranteed Obligations of such Guarantor in respect of such maximum amount not
constituting a fraudulent transfer or conveyance.
* * *
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.
SILGAN HOLDINGS INC.,
as a Guarantor
By /s/ Harley Rankin, Jr.
-------------------------------
Title: Executive Vice President,
Chief Financial Officer and Treasurer
SILGAN CONTAINERS CORPORATION,
as a Guarantor
By /s/ Harley Rankin, Jr.
-------------------------------
Title: Vice President
SILGAN PLASTICS CORPORATION,
as a Guarantor
By /s/ Harley Rankin, Jr.
-------------------------------
Title: Vice President
CALIFORNIA-WASHINGTON CAN
CORPORATION, as a Guarantor
By /s/ Harley Rankin, Jr.
-------------------------------
Title: Vice President
SCCW CAN CORPORATION, as a Guarantor
By /s/ Harley Rankin, Jr.
-------------------------------
Title: Vice President
BANKERS TRUST COMPANY,
as Administrative Agent for the Banks
By /s/ Gregg Shefrin
-------------------------------
Title: Vice President
<PAGE>
