-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dz9qXXE0NfKggBa2FWXIW03pnHduCmZxxmO3HiV4osi6QGtz0CkiPy1fQlrPhSuq 5epR7Ukvuze8wBxElwzHOg== 0000849869-02-000008.txt : 20020712 0000849869-02-000008.hdr.sgml : 20020712 20020712170820 ACCESSION NUMBER: 0000849869-02-000008 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020628 ITEM INFORMATION: Other events FILED AS OF DATE: 20020712 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SILGAN HOLDINGS INC CENTRAL INDEX KEY: 0000849869 STANDARD INDUSTRIAL CLASSIFICATION: METAL CANS [3411] IRS NUMBER: 061269834 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22117 FILM NUMBER: 02702222 BUSINESS ADDRESS: STREET 1: 4 LANDMARK SQ CITY: STAMFORD STATE: CT ZIP: 06901 BUSINESS PHONE: 2039757110 8-K 1 creditagmt8k.txt FORM 8-K DATED JUNE 28, 2002 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): June 28, 2002 Silgan Holdings Inc. -------------------- (Exact Name of Registrant as Specified in Charter) Delaware 000-22117 06-1269834 - -------------------------------- ------------------ -------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 4 Landmark Square, Stamford, Connecticut 06901 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (203) 975-7110 Item 5. Other Events. Refinancing of U.S. Senior Secured Credit Facility On June 28, 2002, we and certain of our wholly owned subsidiaries completed the refinancing of our previous U.S. senior secured credit facility by entering into a new $850 million senior secured credit facility with Deutsche Bank Trust Company Americas, as Administrative Agent, Bank of America, N.A. and Citicorp USA, Inc., as Co-Syndication Agents, Morgan Stanley Senior Funding, Inc. and Fleet National Bank, as Co-Documentation Agents, Deutsche Bank Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers, Deutsche Bank Securities Inc., Banc of America Securities LLC and Salomon Smith Barney Inc., as Joint Book Managers, and various lenders. Our new credit facility also contains an incremental uncommitted term loan facility of up to $275 million. All amounts owing under our previous U.S. senior secured credit facility, dated as of July 29, 1997 (as amended), were repaid with proceeds from loans made under the new credit facility. As result of this refinancing, we will record an extraordinary charge, net of tax, of approximately $0.6 million in the second quarter of 2002 for the write-off of unamortized debt financing costs related to our previous credit facility. Description of the New Credit Facility The following is a summary of certain terms of our new credit facility and is qualified in its entirety by reference to the agreements filed as exhibits hereto. The Available Credit Facility Our new credit facility provides us with $100 million of term loans designated A term loans and $350 million of term loans designated B term loans and provides Silgan Containers Corporation, Silgan Plastics Corporation and certain of our other wholly owned subsidiaries up to $400 million of revolving loans, letters of credit and swingline loans. The revolving loans generally can be borrowed, repaid and reborrowed from time to time until June 28, 2008, on which date all revolving loans mature and are payable in full. Amounts repaid under the term loans cannot be reborrowed. The aggregate amount of revolving loans that 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 January 1 of each year through December 1 of such year (beginning in 2002), total average unutilized commitments for revolving loans of at least $90 million. We may use proceeds from future revolving loans for general corporate and working capital purposes, including permitted acquisitions. 2 The A term loans mature on June 28, 2008 and are payable in installments as follows: A Term Loan Scheduled Repayment Date Amount ------------------------- ------ December 31, 2003................... $16,670,000 December 31, 2004................... 16,670,000 December 31, 2005................... 16,670,000 December 31, 2006................... 16,670,000 December 31, 2007................... 16,670,000 A term loan maturity date........... 16,650,000 The B Term Loans mature on November 30, 2008 and are payable in installments as follows: B Term Loan Scheduled Repayment Date Amount ------------------------ ------ December 31, 2002....................... $ 1,750,000 December 31, 2003....................... 3,500,000 December 31, 2004....................... 3,500,000 December 31, 2005....................... 3,500,000 December 31, 2006....................... 3,500,000 December 31, 2007....................... 3,500,000 B term loan maturity date............... 330,750,000 Our new credit facility also contains certain mandatory repayment provisions, including requirements to prepay loans with proceeds received from the incurrence of certain indebtedness, with proceeds received from certain asset sales, and, under certain circumstances, with 50% of our excess cash flow. The mandatory repayment provisions are no more restrictive in the aggregate than under our previous credit facility. The incremental uncommitted term loan facility provides, among other things, that any incremental term loan borrowing shall: o be denominated in a single currency, either in U.S. dollars or certain foreign currencies; o be in a minimum aggregate amount for all lenders participating in a given tranche of at least $30 million; o have a maturity date no earlier than the maturity date for the B Term Loans and a weighted average life to maturity of no less than the weighted average life to maturity as then in effect for the B Term Loans; and o be used to finance permitted acquisitions and refinance any indebtedness assumed as a part of such permitted acquisition, to refinance or repurchase permitted subordinated debt and to repay outstanding revolving loans. 3 Each of the term loans, the revolving loans and, when committed, the incremental term loans, at our election, may consist of loans designated as Euro Rate loans or as Base Rate loans. Each of the loans can be converted from a Base Rate loan into a Euro Rate loan and vice versa. The interest periods for Euro Rate loans may be one (and under certain circumstances, less than one), two, three, six or, to the extent available, twelve months. As of June 28, 2002, the outstanding principal amounts of A term loans, B term loans and revolving loans under our new credit facility were $100 million, $350 million and $158 million, respectively. All such proceeds were used to refinance amounts outstanding under our previous credit facility and to pay fees and expenses in connection therewith. Security and Guarantees Under the terms of a security agreement, a pledge agreement and a borrowers/subsidiaries guaranty made in favor of the lenders, we and certain of our subsidiaries guarantee on a secured basis all of the obligations of the borrowers under the new credit facility and pledge substantially all of our respective assets and properties as collateral to secure the obligations under the new credit agreement, subject to limited exceptions. Interest and Fees We pay interest on borrowings under our new credit facility at rates that are set with reference to our leverage ratio. To the extent that amounts under our new credit facility remain unused, we pay commitment fees on the unused portion of the available loan commitment. The commitment fees are also set with respect to our leverage ratio. Interest on term loans and revolving loans maintained as Base Rate loans accrues at floating rates equal to the sum of the Base Rate plus the applicable margin. The Base Rate is the higher of the prime lending rate of Deutsche Bank Trust Company Americas or 1/2 of 1% in excess of the overnight federal funds rate. Interest on term loans and revolving loans maintained as Euro Rate loans accrues at floating rates equal to the sum of the applicable margin plus a formula rate called the Eurodollar Rate determined with reference to the rate offered by Deutsche Bank Trust Company Americas for dollar deposits in the New York interbank eurodollar market. The applicable margin varies depending upon our leverage ratio. Initially, the interest rate for all loans is the Base Rate plus a margin of 1% or the Eurodollar Rate plus a margin of 2%. After December 31, 2002, the margin will be reset quarterly based on our leverage ratio. Prior to the refinancing, the interest rate for A term loans and revolving loans under our previous credit facility was LIBOR plus a margin of 1.0% or the prime lending rate of Deutsche Bank, and for B term loans an additional 0.5%. 4 The revolving borrowers have agreed to pay to the applicable lenders a commitment commission calculated initially as 0.50% per annum on the daily average unused portion of the lenders' revolving commitment in respect of the revolving loans until such revolving commitment is terminated. The commitment commission rate ranges from 0.250% to 0.500% and is subject to change on a quarterly basis beginning after December 31, 2002 depending upon our leverage ratio. Prior to the refinancing, the most recent applicable commitment commission under our prior credit facility was 0.25% per annum. Each of the revolving borrowers is also required to pay to the applicable lenders under our new credit facility a letter of credit fee equal to the applicable margin in effect from time to time for revolving loans maintained as Eurodollar loans, and to pay to the issuers of the letter of credit a facing fee of 1/4 of 1% per annum, in each case calculated on the aggregate stated amount of all letters of credit for the stated duration. Additionally, in connection with the closing of our new credit facility, the agents and the lenders also received certain other fees. Certain Covenants Our new credit facility contains certain financial and operating covenants that are generally no more restrictive in the aggregate than the covenants contained in our previous credit facility. Subject to certain exceptions as described in the new credit facility, the covenants limit, among other things, our ability to: o incur additional indebtedness; o create liens; o consolidate, merge or sell assets; o make certain capital expenditures; o make certain advances, investments and loans; o enter into certain transactions with affiliates; o engage in any business other than the packaging business; o pay dividends; and o repurchase stock. Our new credit facility requires our interest coverage ratio for any test period ended on the last day of a fiscal quarter set forth below not to be less than the ratio set forth opposite such fiscal quarter below: Fiscal Quarter Ended Ratio -------------------- ----- June 30, 2002 2.75:1.00 September 30, 2002 2.75:1.00 December 31, 2002 2.75:1.00 March 31, 2003 2.75:1.00 June 30, 2003 2.75:1.00 September 30, 2003 2.75:1.00 December 31, 2003 2.75:1.00 5 Fiscal Quarter Ended Ratio -------------------- ----- March 31, 2004 2.75:1.00 June 30, 2004 2.75:1.00 September 30, 2004 2.75:1.00 December 31, 2004 2.75:1.00 March 31, 2005 and the last day of each fiscal quarter thereafter 3.00:1.00 Our new credit facility also requires our total leverage ratio for any test period ended on the last day of a fiscal quarter set forth below not to be greater than the ratio set forth opposite such fiscal quarter below: Fiscal Quarter Ended Ratio -------------------- ----- June 30, 2002 4.50:1.00 September 30, 2002 4.50:1.00 December 31, 2002 4.50:1.00 March 31, 2003 4.50:1.00 June 30, 2003 4.50:1.00 September 30, 2003 4.25:1.00 December 31, 2003 4.25:1.00 March 31, 2004 4.25:1.00 June 30, 2004 4.25:1.00 September 30, 2004 4.00:1.00 December 31, 2004 4.00:1.00 March 31, 2005 4.00:1.00 June 30, 2005 4.00:1.00 September 30, 2005 and each fiscal quarter thereafter 3.75:1.00 Events of Default Our new credit facility contains certain customary provisions concerning events of default. Upon the occurrence of any such event of default under our new credit facility, the lenders are permitted, among other things, to accelerate the maturity of the term loans and the revolving loans and all other outstanding indebtedness under the facility and terminate their commitment to make any further revolving loans or to issue any letters of credit. 6 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits Exhibit No. Description ----------- ----------- 99.1 Credit Agreement, dated as of June 28, 2002, among Silgan Holdings Inc., Silgan Containers Corporation, Silgan Plastics Corporation, Silgan Containers Manufacturing Corporation, Silgan Can Company, each other Revolving Borrower party thereto from time to time, each other Incremental Term Loan Borrower party thereto from time to time, the lenders from time to time party thereto, Deutsche Bank Trust Company Americas, as Administrative Agent, Bank of America, N.A. and Citicorp USA, Inc., as Co-Syndication Agents, Morgan Stanley Senior Funding, Inc.. and Fleet National Bank, as Co-Documentation Agents, Deutsche Bank Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers, and Deutsche Bank Securities Inc., Banc of America Securities LLC and Salomon Smith Barney Inc., as Joint Book Managers. 99.2 US Security Agreement, dated as of June 28, 2002, among Silgan Holdings Inc., Silgan Containers Corporation, Silgan Plastics Corporation, Silgan Containers Manufacturing Corporation, Silgan Can Company, Silgan Corporation, Silgan LLC, RXI Plastics, Inc., Silgan Vacuum Closure Holding Company and Deutsche Bank Trust Company Americas, as Collateral Agent. 99.3 US Pledge Agreement, dated as of June 28, 2002, among Silgan Holdings Inc., Silgan Containers Corporation, Silgan Plastics Corporation, Silgan Containers Manufacturing Corporation, Silgan Can Company, Silgan Corporation, Silgan LLC, RXI Plastics, Inc., Silgan Vacuum Closure Holding Company and Deutsche Bank Trust Company Americas, as Collateral Agent. 99.4 US Borrower/Subsidiaries Guaranty, dated as of June 28, 2002, made by each of Silgan Holdings Inc., Silgan Containers Corporation, Silgan Plastics Corporation, Silgan Containers Manufacturing Corporation, Silgan Corporation, Silgan LLC, RXI Plastics, Inc., Silgan Vacuum Closure Holding Company in favor of the creditors thereunder. 7 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/ Anthony J. Allott --------------------- Executive Vice President and Chief Financial Officer Date: July 12, 2002 INDEX TO EXHIBITS Exhibit No. Description ----------- ----------- 99.1 Credit Agreement, dated as of June 28, 2002, among Silgan Holdings Inc., Silgan Containers Corporation, Silgan Plastics Corporation, Silgan Containers Manufacturing Corporation, Silgan Can Company, each other Revolving Borrower party thereto from time to time, each other Incremental Term Loan Borrower party thereto from time to time, the lenders from time to time party thereto, Deutsche Bank Trust Company Americas, as Administrative Agent, Bank of America, N.A. and Citicorp USA, Inc., as Co-Syndication Agents, Morgan Stanley Senior Funding, Inc.. and Fleet National Bank, as Co-Documentation Agents, Deutsche Bank Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers, and Deutsche Bank Securities Inc., Banc of America Securities LLC and Salomon Smith Barney Inc., as Joint Book Managers. 99.2 US Security Agreement, dated as of June 28, 2002, among Silgan Holdings Inc., Silgan Containers Corporation, Silgan Plastics Corporation, Silgan Containers Manufacturing Corporation, Silgan Can Company, Silgan Corporation, Silgan LLC, RXI Plastics, Inc., Silgan Vacuum Closure Holding Company and Deutsche Bank Trust Company Americas, as Collateral Agent. 99.3 US Pledge Agreement, dated as of June 28, 2002, among Silgan Holdings Inc., Silgan Containers Corporation, Silgan Plastics Corporation, Silgan Containers Manufacturing Corporation, Silgan Can Company, Silgan Corporation, Silgan LLC, RXI Plastics, Inc., Silgan Vacuum Closure Holding Company and Deutsche Bank Trust Company Americas, as Collateral Agent. 99.4 US Borrower/Subsidiaries Guaranty, dated as of June 28, 2002, made by each of Silgan Holdings Inc., Silgan Containers Corporation, Silgan Plastics Corporation, Silgan Containers Manufacturing Corporation, Silgan Corporation, Silgan LLC, RXI Plastics, Inc., Silgan Vacuum Closure Holding Company in favor of the creditors thereunder. 9 EX-99.1 3 creditagmt.txt CREDIT AGREEMENT DATED JUNE 28, 2002 EXECUTION COPY CREDIT AGREEMENT among SILGAN HOLDINGS INC., SILGAN CONTAINERS CORPORATION, SILGAN PLASTICS CORPORATION, SILGAN CONTAINERS MANUFACTURING CORPORATION, SILGAN CAN COMPANY, CERTAIN OTHER BORROWERS, VARIOUS LENDERS, DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent, BANK OF AMERICA, N.A. and CITICORP USA, INC., as Co-Syndication Agents, MORGAN STANLEY SENIOR FUNDING, INC. and FLEET NATIONAL BANK, as Co-Documentation Agents, DEUTSCHE BANK SECURITIES INC. and BANC OF AMERICA SECURITIES LLC, as Joint Lead Arrangers, and DEUTSCHE BANK SECURITIES INC., BANC OF AMERICA SECURITIES LLC and SALOMON SMITH BARNEY INC., as Joint Book Managers _________________________ Dated as of June 28, 2002 _________________________ TABLE OF CONTENTS ----------------- Page ---- Section 1. Amount and Terms of Credit........................................1 1.01 Commitments.......................................................1 1.02 Minimum Amount of Each Borrowing..................................6 1.03 Notice of Borrowing...............................................6 1.04 Disbursement of Funds.............................................7 1.05 Notes.............................................................8 1.06 Conversions......................................................10 1.07 Pro Rata Borrowings..............................................10 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..............................16 1.13 Replacement of Lenders...........................................17 1.14 Incremental Term Loan Commitments................................18 1.15 Special Sharing and Conversion Provisions Applicable to Lenders Upon the Occurrence of a Sharing Event ...............22 Section 2. Letters of Credit................................................26 2.01 Letters of Credit................................................26 2.02 Minimum Stated Amount............................................28 2.03 Letter of Credit Requests........................................28 2.04 Letter of Credit Participations..................................29 2.05 Agreement to Repay Letter of Credit Drawings.....................31 2.06 Increased Costs..................................................31 Section 3. Fees; Commitments; Reductions of Commitments.....................32 3.01 Fees.............................................................32 3.02 Voluntary Termination of Revolving Commitments...................33 3.03 Mandatory Reduction or Termination of Commitments................34 Section 4. Prepayments; Payments; Commitment Reductions.....................35 4.01 Voluntary Prepayments............................................35 4.02 Mandatory Prepayments and Commitment Reductions..................38 4.03 Method and Place of Payment......................................45 4.04 Net Payments.....................................................45 Section 5. Conditions Precedent.............................................47 5.01 Conditions to Loans on the Initial Borrowing Date................47 5.02 Conditions to All Credit Events..................................52 5.03 No Excess Cash...................................................53 (i) 5.04 Revolving Borrowers etc..........................................53 5.05 Incremental Term Loans...........................................53 Section 6. Representations Warranties and Agreements........................54 6.01 Organizational Status............................................54 6.02 Power and Authority..............................................54 6.03 No Violation.....................................................54 6.04 Governmental Approvals...........................................55 6.05 Security Documents...............................................55 6.06 Insurance........................................................56 6.07 Financial Statements; Financial Condition; etc...................56 6.08 Litigation.......................................................57 6.09 True and Complete Disclosure.....................................57 6.10 Use of Proceeds; Margin Regulations..............................57 6.11 Tax Returns and Payments.........................................58 6.12 Compliance with ERISA............................................58 6.13 Subordination....................................................59 6.14 Subsidiaries.....................................................59 6.15 Compliance with Statutes etc.....................................59 6.16 Investment Company Act...........................................60 6.17 Public Utility Holding Company Act...............................60 6.18 Labor Relations..................................................60 6.19 Patents, Licenses, Franchises and Formulas.......................60 Section 7. Affirmative Covenants............................................61 7.01 Information Covenants............................................61 7.02 Books, Records and Inspections...................................63 7.03 Maintenance of Property; Insurance...............................63 7.04 Franchises.......................................................64 7.05 Compliance with Statutes; etc....................................64 7.06 ERISA............................................................64 7.07 End of Fiscal Years; Fiscal Quarters.............................65 7.08 Taxes............................................................65 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 7.13 CanCo Capital Contributions......................................68 7.14 Use of Proceeds..................................................68 7.15 Maintenance of Corporate Separateness............................68 Section 8. Negative Covenants...............................................69 8.01 Liens............................................................69 8.02 Consolidation, Merger, Sale of Assets, etc.......................72 8.03 Dividends........................................................75 8.04 Indebtedness.....................................................76 (ii) 8.05 Advances; Investments and Loans..................................79 8.06 Transactions with Affiliates and Unrestricted Subsidiaries.......81 8.07 Capital Expenditures.............................................83 8.08 Interest Coverage Ratio..........................................84 8.09 Total Leverage Ratio.............................................84 8.10 Limitation on Voluntary Payments and Modifications of Certain Indebtedness; Modifications of Documents; Certificate of Incorporation; By-Laws and Certain Other Agreements; etc......85 8.11 Creation of Subsidiaries and Unrestricted Subsidiaries...........86 8.12 Limitation on Restrictions on Subsidiary Dividends and Other Distributions....................................................86 8.13 Limitation on Issuances of Capital Stock.........................87 8.14 Business.........................................................87 8.15 Change of Name...................................................88 8.16 Designated Senior Indebtedness...................................88 Section 9. Events of Default................................................88 9.01 Payments.........................................................88 9.02 Representations, etc.............................................88 9.03 Covenants........................................................88 9.04 Default Under Other Agreements...................................89 9.05 Bankruptcy, etc..................................................89 9.06 ERISA............................................................89 9.07 Guaranties.......................................................90 9.08 Security Documents...............................................90 9.09 Judgments........................................................90 9.10 Change of Control................................................90 9.11 Accounts Receivable Facility.....................................90 Section 10. Definitions and Accounting Terms................................91 10.01 Defined Terms...................................................91 10.02 Principles of Construction.....................................125 Section 11. The Administrative Agent and the Other Agents..................126 11.01 Appointment....................................................126 11.02 Nature of Duties...............................................126 11.03 Lack of Reliance on the Administrative Agent and the Other Agents.........................................................126 11.04 Certain Rights of the Administrative Agent.....................127 11.05 Reliance.......................................................127 11.06 Indemnification................................................127 11.07 The Administrative Agent and the other Agents in Their Individual Capacity............................................127 11.08 Holders........................................................128 11.09 Resignation by the Administrative Agent and the Other Agents...128 Section 12. Miscellaneous..................................................129 12.01 Payment of Expenses, etc.......................................129 12.02 Right of Setoff................................................130 (iii) 12.03 Notices........................................................130 12.04 Benefit of Agreement...........................................130 12.05 No Waiver; Remedies Cumulative.................................132 12.06 Payments Pro Rata..............................................133 12.07 Calculations: Computations.....................................133 12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE...............134 12.09 Counterparts...................................................135 12.10 Effectiveness..................................................136 12.11 Headings Descriptive...........................................136 12.12 Amendment and Waiver...........................................136 12.13 Survival.......................................................138 12.14 Domicile of Loans..............................................138 12.15 Confidentiality................................................139 12.16 Register.......................................................139 12.17 Certain Agreements with Respect to the 9% Senior Subordinated Debentures........................................140 12.18 Limitation on Additional Amounts, etc..........................140 12.19 Maximum Amount.................................................140 12.20 Campbell Standstill Period/Campbell Repurchase.................141 12.21 Judgment Currency..............................................142 12.22 Euro...........................................................143 12.23 Immunity.......................................................143 SCHEDULES Schedule I Commitments Schedule II Existing Letters of Credit Schedule III Real Property Schedule IV Insurance Schedule V Subsidiaries Schedule VI Existing Liens Schedule VII Existing Indebtedness Schedule VIII Existing Investments Schedule IX Lender Addresses Schedule X Associated Costs Rate EXHIBITS Exhibit A-1 Form of Notice of Borrowing Exhibit A-2 Form of Notice of Conversion/Continuation Exhibit B-1 Form of A Term Note Exhibit B-2 Form of B Term Note Exhibit B-3 Form of Incremental Term Note Exhibit B-4 Form of Revolving Note Exhibit B-5 Form of Swingline Note (iv) Exhibit C Form of Letter of Credit Request Exhibit D Form of Section 4.04(b)(ii) Certificate Exhibit E-1 Form of Opinion of Frank Hogan, Esq., General Counsel Exhibit E-2 Form of Opinion of Pillsbury Winthrop LLP Exhibit F Form of Officers' Certificate Exhibit G Form of US Borrowers/Subsidiaries Guaranty Exhibit H Form of US Pledge Agreement Exhibit I Form of US Security Agreement Exhibit J Form of Election to Become a Revolving Borrower Exhibit K Form of Assignment and Assumption Agreement Exhibit L Form of Incremental Term Loan Commitment Agreement (v) CREDIT AGREEMENT, dated as of June 28, 2002, among SILGAN HOLDINGS INC., a Delaware corporation ("Silgan"), SILGAN CONTAINERS CORPORATION, a Delaware corporation ("Containers"), SILGAN PLASTICS CORPORATION, a Delaware corporation ("Plastics"), SILGAN CONTAINERS MANUFACTURING CORPORATION, a Delaware corporation ("Manufacturing"), SILGAN CAN COMPANY, a Delaware corporation ("CanCo"), each other Revolving Borrower party hereto from time to time, each other Incremental Term Loan Borrower party hereto from time to time (together with Silgan, Containers, Plastics, Manufacturing, CanCo and each other Revolving Borrower, the "Borrowers," and each individually, a "Borrower"), the lenders from time to time party hereto (each a "Lender" and, collectively, the "Lenders"), DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent (in such capacity, the "Administrative Agent"), BANK OF AMERICA, N.A. and CITICORP USA, INC., as Co-Syndication Agents (in such capacity, the "Co-Syndication Agents"), MORGAN STANLEY SENIOR FUNDING, INC. and FLEET NATIONAL BANK, as Co-Documentation Agents (in such capacity, the "Co-Documentation Agents"), DEUTSCHE BANK SECURITIES INC. and BANC OF AMERICA SECURITIES LLC, as Joint Lead Arrangers (in such capacity, the "Joint Lead Arrangers"), and DEUTSCHE BANK SECURITIES INC., BANC OF AMERICA SECURITIES LLC and SALOMON SMITH BARNEY INC., as Joint Book Managers (in such capacity, the "Joint Book Managers"). 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 Lenders 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 Lender 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 be denominated in Dollars; (ii) 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 otherwise specifically provided herein, be of the same Type; and (iii) shall not exceed for any such Lender, in initial aggregate principal amount, that amount which equals the A Term Loan Commitment of such Lender 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 Lender with a B Term Loan Commitment severally agrees to make, on the Initial Borrowing Date, a term loan (each a "B Term Loan" and, collectively, the "B Term Loans") to Silgan, which B Term Loans: (i) shall be denominated in Dollars; (ii) 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 (iii) shall not exceed for any such Lender, in initial aggregate principal amount, that amount which equals the B Term Loan Commitment of such Lender 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 in Section 1.14 and the other provisions set forth herein, each Lender with an Incremental Term Loan Commitment for a given Tranche of Incremental Term Loans severally agrees, at any time and from time to time on and after the date that such Incremental Term Loan Commitment is obtained pursuant to Section 1.14 and prior to the Incremental Term Loan Commitment Termination Date for such Tranche of Incremental Term Loans, to make a term loan or term loans (each an "Incremental Term Loan" and, collectively, the "Incremental Term Loans") to the Incremental Term Loan Borrower for such Tranche, which Incremental Term Loans: (i) shall be incurred on an Incremental Term Loan Borrowing Date; (ii) shall be denominated in the Applicable Currency for such Tranche of Incremental Term Loans; (iii) shall, if Dollar Loans, at the option of the applicable Incremental Term Loan Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that all Incremental Term Loans that are Dollar Loans comprising the same Borrowing under such Tranche shall, unless otherwise specifically provided herein, be of the same Type; (iv) shall, if an Alternate Currency Incremental Term Loan, at the option of the applicable Incremental Term Loan Borrower, be incurred and maintained in one or more Borrowings of Alternate Currency Incremental Term Loans under such Tranche; and (v) shall not exceed for any such Incremental Term Loan Lender at the time of any incurrence thereof, that aggregate principal amount which equals the Incremental Term Loan Commitment of such Incremental Term Loan Lender for such Tranche at -2- such time (before giving effect to any reduction thereof at such time pursuant to Section 3.03(c)). Once repaid, Incremental Term Loans incurred hereunder may not be reborrowed. (d) Subject to and upon the terms and conditions set forth herein, each Lender 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 be denominated in Dollars; (ii) 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; (iii) may be repaid and reborrowed in accordance with the provisions hereof; (iv) shall not exceed for any such Lender at any time outstanding in respect of all Revolving Borrowers that aggregate principal amount which, when added to the product of (A) such Lender's RL 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 Lender at such time; (v) shall not exceed for all such Lenders 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; and (vi) shall not exceed for CanCo at any time outstanding that aggregate principal amount which, (A) 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 by CanCo) in respect of all Letters of Credit issued for the account of CanCo 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) incurred by CanCo then -3- outstanding, equals the CanCo Revolving Sub-Limit then in effect or (B) when added to the sum of (I) the aggregate amounts calculated in the preceding clause (A) and outstanding at such time and (II) the aggregate amount of all other CanCo Included Debt outstanding at such time, equals the CanCo Permitted Debt Amount at such time. (e) Subject to and upon the terms and conditions set forth herein, the Swingline Lender 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 denominated in Dollars and 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 in respect of all Revolving Borrowers, when added to the sum of (I) the aggregate principal amount of all Revolving Loans 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 Total Revolving Loan Commitment at such time; (iv) shall not exceed for CanCo at any time outstanding that aggregate principal amount which, (A) 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 by CanCo) in respect of all Letters of Credit issued for the account of CanCo at such time and (II) the aggregate principal amount of all Revolving Loans incurred by CanCo then outstanding, equals the CanCo Revolving Sub-Limit then in effect or (B) when added to the sum of (I) the aggregate amounts calculated in the preceding clause (A) and outstanding at such time and (II) the aggregate amount of all other CanCo Included Debt outstanding at such time, equals the CanCo Permitted Debt Amount at such time; and (v) shall not exceed in aggregate principal amount at any time outstanding in respect of all Revolving Borrowers, the Maximum Swingline Amount. Notwithstanding anything to the contrary in this Section 1.01(e), (i) the Swingline Lender shall not be obligated to make any Swingline Loans at a time when a Lender Default exists with respect to a Lender with a Revolving Loan Commitment unless the Swingline Lender has entered into arrangements satisfactory to it and Silgan to eliminate the Swingline Lender's risk with respect to the Defaulting Lender's or Lenders' participation in such Swingline Loans, including by cash collateralizing such Defaulting Lender's or Lenders' RL Percentage of the outstanding Swingline Loans, and (ii) the Swingline Lender will not make a Swingline Loan after it has received written notice from any Borrower or the Required Lenders stating that a -4- Default or an Event of Default exists until such time as the Swingline Lender 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. (f) On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the Lenders with Revolving Loan Commitments or with outstanding Revolving Loans that the Swingline Lender's outstanding Swingline Loans shall be funded with a Borrowing of Revolving Loans denominated in Dollars (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 Lenders (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 Lender's RL 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 the Swingline Lender to repay the Swingline Lender for such outstanding Swingline Loans. Each such Lender 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 the Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing may not comply with the minimum amount for Borrowings otherwise required hereunder, (ii) whether any conditions specified in Section 5 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the date of such Mandatory Borrowing and (v) the amount of the 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 Lender 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 the Swingline Lender such participations in the outstanding Swingline Loans as shall be necessary to cause such Lenders to share in such Swingline Loans ratably based upon their respective RL 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 the Swingline Lender 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 Lender shall be required to pay the Swingline Lender 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. -5- 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 Euro Rate Loans in the aggregate. 1.03 Notice of Borrowing. (a) Whenever (x) a Borrower desires to incur Dollar Loans hereunder (excluding Swingline Loans and Revolving Loans incurred pursuant to a Mandatory Borrowing), such Borrower shall give the Administrative Agent at the applicable Notice Office at least one Business Day's prior notice of each Base Rate Loan, and at least three Business Days' prior notice of each Eurodollar Loan, to be incurred hereunder, and (y) an Incremental Term Loan Borrower desires to incur Alternate Currency Incremental Term Loans hereunder, such Incremental Term Loan Borrower shall give the Administrative Agent at the applicable Notice Office at least three Business Days' prior notice of each such Alternate Currency Incremental Term Loan to be incurred hereunder, provided that (in each case) any such notice shall be deemed to have been given on a certain day only if given before 1:00 P.M. (Local 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-1, appropriately completed to specify (i) the name of such Borrower, (ii) the aggregate principal amount of the Loans to be made pursuant to such Borrowing (stated in Dollars or, in the case of Alternate Currency Incremental Term Loans, in the relevant Alternate Currency), (iii) the date of such Borrowing (which shall be a Business Day), (iv) in the case of Incremental Term Loans, the Applicable Currency, (v) whether the Loans being made pursuant to such Borrowing shall constitute A Term Loans, B Term Loans, Incremental Term Loans or Revolving Loans, (vi) in the case of Dollar Loans, whether such Dollar Loans being made pursuant to such Borrowing are to be initially maintained as Base Rate Loans or, to the extent permitted hereunder, Eurodollar Loans, and (vii) in the case of all Euro Rate Loans, the initial Interest Period to be applicable thereto. The Administrative Agent shall promptly give each Lender which is required to make Loans of the Tranche specified in the respective Notice of Borrowing, notice of such proposed Borrowing, of such Lender'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 the Swingline Lender not later than 1:00 P.M. (Local 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(f), 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(f). (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 the -6- Swingline Lender, 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 the Swingline Lender, as the case may be, in good faith to be from the president, a vice president, the chief 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 the Swingline Lender 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 the Swingline Lender'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 (Local 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. (Local 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 (Local Time) on the date specified in Section 1.01(f)), each Lender 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, the Swingline Lender shall make available the full amount thereof). All such amounts shall be made available in Dollars (or, in the case of Alternate Currency Incremental Term Loans, in the Alternate Currency for the relevant Tranche) and in immediately available funds at the applicable Payment Office, and the Administrative Agent will make available to the relevant Borrower at such Payment Office in Dollars (or, in the case of Alternate Currency Incremental Term Loans, in the Alternate Currency for such Tranche) the aggregate of the amounts so made available by the Lenders. Unless the Administrative Agent shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to the Administrative Agent such Lender's portion of any Borrowing to be made on such date, the Administrative Agent may assume that such Lender 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 Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender 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 Lender or such Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to such Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, at the overnight Federal Funds Rate (or, in the case of Alternate Currency Incremental Term Loans, the Administrative Agent's customary rate for interbank advances in the relevant Alternate Currency) for the first three days and at the rate of interest otherwise applicable to such Loans for each day thereafter 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 Lender from its obligation to make Loans hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any failure by such Lender to make Loans hereunder. -7- 1.05 Notes. (a) Each Borrower's obligation to pay the principal of, and interest on, all the Loans made by each Lender to such Borrower shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 12.16 and, subject to the provisions of Section 1.05(h), also 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 Incremental Term Loans, by a promissory note duly executed and delivered by the respective Incremental Term Loan Borrower substantially in the form of Exhibit B-3 (each an "Incremental Term Note" and, collectively, the "Incremental Term Notes"), (iv) if Revolving Loans, by promissory notes duly executed and delivered by each Revolving Borrower substantially in the form of Exhibit B-4 (each a "Revolving Note" and, collectively, the "Revolving Notes") and (v) if Swingline Loans, by promissory notes duly executed and delivered by each Revolving Borrower substantially in the form of Exhibit B-5 (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 Lender with an A Term Loan Commitment or outstanding A Term Loans shall (i) be payable to such Lender 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 (expressed in Dollars) equal to the principal amount of the A Term Loans made by such Lender on the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be in a stated principal amount (expressed in Dollars) equal to the outstanding principal amount of A Term Loans of such Lender 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. (c) The B Term Note issued by Silgan to each Lender with a B Term Loan Commitment or outstanding B Term Loans shall (i) be payable to such Lender 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 (expressed in Dollars) equal to the principal amount of the B Term Loans made by such Lender on the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be in a stated principal amount (expressed in Dollars) equal to the outstanding principal amount of B Term Loans of such Lender 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 Incremental Term Note issued by each Incremental Term Loan Borrower to each Lender with an Incremental Term Loan Commitment or outstanding -8- Incremental Term Loans under a given Tranche shall (i) be payable to such Lender or its registered assigns and be dated the date of issuance thereof, (ii) be in a stated principal amount (expressed in the relevant Applicable Currency) equal to the Incremental Term Loan Commitment of such Lender on the effective date of the respective Incremental Term Loan Commitment Agreement (prior to the incurrence of any Incremental Term Loans pursuant thereto on such date) (or, if issued thereafter, be in a stated principal amount (expressed in the relevant Applicable Currency) equal to the sum of the then remaining amount of the Incremental Term Loan Commitment of such Lender plus the outstanding principal amount of the Incremental Term Loans of such Lender on the date of issuance thereof) and be payable in the relevant Applicable Currency in the outstanding principal amount of the Incremental Term Loans evidenced thereby, (iii) mature on the respective Incremental Term Loan Maturity Date, (iv) bear interest as provided in the appropriate clause of Section 1.08 in respect of Base Rate Loans and Euro Rate 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 Revolving Note issued by each Revolving Borrower to each Lender with a Revolving Loan Commitment or outstanding Revolving Loans shall (i) be payable to such Lender 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 (expressed in Dollars) equal to the Revolving Loan Commitment of such Lender (or, if issued after the termination thereof, be in a stated principal amount (expressed in Dollars) equal to the outstanding Revolving Loans of such Lender 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. (f) The Swingline Note issued by each Revolving Borrower to the Swingline Lender shall (i) be payable to the Swingline Lender or its registered assigns and be dated the Initial Borrowing Date, (ii) be in a stated principal amount (expressed in Dollars) 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 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. (g) Except as otherwise provided in Section 1.05(h), each Lender 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. -9- (h) Notwithstanding anything to the contrary contained above in this Section 1.05 or elsewhere in this Agreement, Notes shall only be delivered to Lenders which at any time specifically request the delivery of such Notes. No failure of any Lender to request or obtain a Note evidencing its Loans to any Borrower shall affect or in any manner impair the obligations of any Borrower to pay the Loans (and all related Obligations) incurred by it which would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the various Credit Documents. Any Lender which does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations otherwise described in preceding clause (g). At any time when any Lender requests the delivery of a Note to evidence any of its Loans, the respective Borrower shall promptly execute and deliver to the respective Lender the requested Note in the appropriate amount or amounts to evidence 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 Dollar Loans made to such Borrower pursuant to one or more Borrowings (so long as of the same Tranche) of one or more Types of Dollar Loans into a Borrowing (of the same Tranche) of another Type of Dollar 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) unless the Required Lenders otherwise agree, 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 applicable Notice Office prior to 1:00 P.M. (Local Time) at least three Business Days' prior notice (each a "Notice of Conversion/Continuation") in the form of Exhibit A-2, appropriately completed to specify the Dollar Loans to be so converted, the Borrowing(s) pursuant to which such Dollar 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 Lender prompt notice of any such proposed conversion affecting any of its Dollar 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 Dollar Loans being converted. 1.07 Pro Rata Borrowings. All Borrowings of A Term Loans, B Term Loans, Incremental Term Loans under a given Tranche and Revolving Loans shall be incurred from the Lenders pro rata on the basis of their A Term Loan Commitments, B Term Loan Commitments, Incremental Term Loan Commitments for such Tranche 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 Lenders pro rata on the basis of their respective RL Percentages. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans hereunder and that each Lender shall be obligated to -10- make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender or Lenders 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 (including with respect to any Euro Rate Loan converted into a Base Rate Loan pursuant to Section 1.15) made to such Borrower hereunder from the date of Borrowing thereof (or, in the circumstances described in the immediately preceding parenthetical, from the date of conversion of the respective Euro Rate Loan into a Base Rate Loan) until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per annum which shall be equal to the sum of the Applicable Margin plus the Base Rate each as in effect from time to time. (b) Each Borrower agrees to pay interest in respect of the unpaid principal amount of each Euro Rate Loan made to such Borrower from the date of Borrowing thereof until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) (A) in the case of Dollar Loans, the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, or (B) in the case of an Alternate Currency Incremental Term Loan, the conversion of such Alternate Currency Incremental Term Loan to a Base Rate Loan pursuant to Section 1.15, at a rate per annum which shall, during each Interest Period applicable thereto, be equal to the sum of the Applicable Margin as in effect from time to time during such Interest Period plus the applicable Euro Rate for such Interest Period plus, except in the case of Eurodollar Loans, the Associated Costs Rate, if any. (c) Overdue principal and, to the extent permitted by law, overdue interest in respect of each Loan and any other overdue amount payable hereunder or under any other Credit Document shall, in each case, bear interest at a rate per annum (i) in the case of overdue principal of, and interest or other overdue amounts owing with respect to, Alternate Currency Incremental Term Loans under a given Tranche, equal to 2% in excess of the rate otherwise applicable to such Tranche of Alternate Currency Incremental Term Loans from time to time, (ii) in the case of overdue principal of, and interest on, Dollar Loans, equal to the greater of (x) the rate which is 2% in excess of the rate otherwise applicable to Base Rate Loans maintained pursuant to the respective Tranche from time to time and (y) the rate which is 2% in excess of the rate then borne by such Dollar Loans, and (iii) in the case of all other overdue amounts payable under this Agreement or under any other Credit Document, equal to the rate which is 2% in excess of the rate applicable to Revolving Loans maintained as Base Rate Loans from time to time. Interest that accrues under this Section 1.08(c) shall be payable on demand. (d) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of each Base Rate Loan, (x) quarterly in arrears on each Quarterly Payment Date, (y) on the date of any repayment or prepayment in full of all outstanding Base Rate Loans of any Tranche, and (z) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand, and (ii) in respect of each Euro Rate Loan, (x) on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period, and (y) on the date of any repayment or prepayment (on the amount repaid or prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. -11- (e) Upon each Interest Determination Date, the Administrative Agent shall determine the interest rate for the Euro Rate Loans for which such determination is being made and shall promptly notify the respective Borrower and the respective Lenders 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/Continuation in respect of the making of, or conversion into, a Borrowing of Euro Rate Loans (in the case of the initial Interest Period applicable thereto) or prior to 1:00 P.M. (Local Time) on the third Business Day prior to the expiration of an Interest Period applicable to such a Borrowing of Euro Rate 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, (x) be either a one, two, three, six or, to the extent available to all Lenders with obligations in respect of the respective Tranche of Loans, twelve-month period, and (y) in the case of Alternate Currency Incremental Term Loans under a given Tranche, such other period of less than one month to the extent approved by the Administrative Agent and otherwise available to all Lenders with obligations in respect of such Tranche, provided that (in each case): (i) all Euro Rate Loans comprising a Borrowing shall at all times have the same Interest Period; (ii) the initial Interest Period for any Euro Rate Loan shall commence on the date of Borrowing of such Euro Rate Loan (including, in the case of Eurodollar Loans, the date of any conversion thereto from a Borrowing of Base Rate Loans) 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 Euro Rate Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month; (iv) if any Interest Period for a Euro Rate Loan 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 Euro Rate 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) unless the Required Lenders otherwise agree, no Interest Period for a Eurodollar Loan may be selected at any time when a Default or an Event of Default is then in existence; -12- (vi) unless the Required Lenders otherwise agree, no Interest Period, other than a one month or less period, for an Alternate Currency Incremental Term Loan may be selected at any time when a Default or an Event of Default is then in existence; (vii) except for Alternate Currency Incremental Term Loans, no Interest Period in respect of any Borrowing of any Tranche of Term Loans shall be selected which extends beyond any date upon which a mandatory repayment of such Tranche of Term Loans will be required to be made under Section 4.02(b), 4.02(c) or 4.02(d), as the case may be, if the aggregate principal amount of such Tranche of Term Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal amount of such Tranche of Term Loans then outstanding less the aggregate amount of such required repayment; and (viii) 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, by 1:00 P.M. (Local Time) on the third Business Day prior to the expiration of any Interest Period applicable to a Borrowing of Euro Rate Loans, the relevant Borrower has failed to elect, or is not permitted to elect, a new Interest Period to be applicable to such Euro Rate Loans as provided above, such Borrower shall be deemed to have elected (x) in the case of Eurodollar Loans, to convert such Eurodollar Loans into Base Rate Loans, and (y) in the case of Alternate Currency Incremental Term Loans, to select a one month Interest Period for such Alternate Currency Incremental Term Loans, in each case, with such new Interest Period to be effective as of the expiration date of such current Interest Period. 1.10 Increased Costs, Illegality, etc. (a) In the event that any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but, with respect to clauses (i) and (iv) below, may be made only by the Administrative Agent): (i) on any Interest Determination Date that, by reason of any changes arising after the Effective Date affecting the applicable interbank market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Euro Rate; (ii) at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Euro Rate Loans (other than in respect of Taxes to the extent covered under Section 4.04(a)) because of 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 Lender of the principal of or interest on the Loans or any other amounts payable hereunder (except for changes in the rate of tax on, or determined by reference to, the net income or net profits of such Lender pursuant to the laws of the jurisdiction in which it is organized or in -13- 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 (I) reserves required under Regulation D to the extent included in the computation of the respective Euro Rate and (II) amounts included in the computation of the Associated Costs Rate; (iii) at any time, that the making or continuance of any Euro Rate Loan has been made (x) unlawful by any law or governmental rule, regulation or order, (y) impossible by compliance by any Lender 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 applicable interbank market; or (iv) at any time that any Alternate Currency is not available in sufficient amounts, as determined in good faith by the Administrative Agent; then, and in any such event, such Lender (or the Administrative Agent, in the case of clause (i) or (iv) above) shall on such date give notice (by telephone confirmed in writing) to the respective Borrowers and, except in the case of clauses (i) and (iv) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (w) in the case of clause (i) above, (A) in the event that Eurodollar Loans are so affected, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the respective Borrowers and the respective Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion/Continuation 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, and (B) in the event that Alternate Currency Incremental Term Loans are so affected, the applicable Euro Rate shall be determined (I) in the case of Alternate Currency Incremental Term Loans denominated in a Primary Alternate Currency, on the basis provided in the proviso of the definition of Primary Alternate Currency LIBOR, and (II) in the case of Alternate Currency Incremental Term Loans denominated in an Other Alternate Currency, by the Administrative Agent as the all-in-cost of funds for the Administrative Agent to fund the respective Alternate Currency Incremental Term Loan, (x) in the case of clause (ii) above, the respective Borrower agrees, subject to the provisions of Section 12.18 (to the extent applicable), to pay to such Lender, 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 Lender in its sole discretion shall determine) as shall be required to compensate such Lender 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 Lender, showing the basis for the calculation thereof, submitted to the respective Borrower by such Lender in good faith shall, absent manifest error, be final and conclusive and binding upon all the parties hereto), (y) 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, and (z) in the case of clause (iv) above, Alternate Currency Incremental Term Loans denominated in the affected Currency (other than any such Alternate Currency Incremental Term Loans which have theretofore been funded) shall no longer be available until such time as the Administrative Agent notifies the respective Incremental Term Loan Borrower and the Lenders of the relevant Tranche -14- that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing given by the respective Incremental Term Loan Borrower with respect to such Alternate Currency Incremental Term Loans which have not yet been incurred shall be deemed rescinded by the respective Incremental Term Loan Borrower. (b) At any time that any Euro Rate 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 Euro Rate Loan affected pursuant to Section 1.10(a)(iii) the respective Borrower shall) either (i) if the affected Euro Rate 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 Lender or the Administrative Agent pursuant to Section 1.10(a)(ii) or (iii), or (ii) if the affected Euro Rate Loan is then outstanding, upon at least three Business Days' written notice to the Administrative Agent, (A) in the case of any Eurodollar Loan, require the affected Lender to convert each such Eurodollar Loan into a Base Rate Loan, and (B) in the case of any Alternate Currency Incremental Term Loan, require the applicable Euro Rate to be determined on the basis provided in clause (w)(B) of the second sentence of Section 1.10(a); provided that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 1.10(b). (c) If at any time after the Effective Date any Lender determines that the introduction of or any change in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law and including, without limitation, those announced or published prior to the Effective Date) concerning capital adequacy, or any change in interpretation or administration thereof by 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 Lender or any corporation controlling such Lender based on the existence of such Lender's Commitments hereunder or its obligations hereunder, then the respective Borrower or Borrowers agree, subject to the provisions of Section 12.18 (to the extent applicable), to pay to any such Lender, upon such Lender's written demand therefor, such additional amounts as shall be required to compensate such Lender or such other corporation for the increased cost to such Lender or such other corporation or the reduction in the rate of return to such Lender or such other corporation as a result of such increase of capital. In determining such additional amounts, each Lender will act reasonably and in good faith and will use averaging and attribution methods which are reasonable; provided that such Lender'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 Lender, 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). (d) In the event that any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding on all parties hereto) at any time after providing an Incremental Term Loan Commitment hereunder that such Lender is required to maintain reserves (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) which have been established by any -15- Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body with jurisdiction over such Lender (including any branch, Affiliate or funding office thereof) in respect of any Alternate Currency Incremental Term Loans or any category of liabilities which includes deposits by reference to which the interest rate on any Alternate Currency Incremental Term Loan is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Lender to non-United States residents in each case by reason of any change since that time in any applicable law or governmental rule, regulation order, guideline or request (whether or not having the force of law) or any change in the interpretation or administration thereof by the NAIC or any governmental authority, central bank or comparable agency, then, unless such reserves already are included in the calculation of the interest rate applicable to such Alternate Currency Incremental Term Loans or in Section 1.10(a)(ii), such Lender shall promptly notify the applicable Borrower in writing specifying the additional amounts required to indemnify such Lender against the cost of maintaining such reserves (such written notice to provide in reasonable detail a computation of such additional amounts) and such Borrower agrees, subject to the provisions of Section 12.18 (to the extent applicable), to pay to such Lender such specified amounts on written demand therefor by such Lender. 1.11 Compensation. Each Borrower agrees, subject to the provisions of Section 12.18 (to the extent applicable), to compensate each Lender, upon such Lender'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 Lender to fund its Euro Rate Loans) which such Lender may sustain: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of, or conversion from or into, Euro Rate Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation 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 or 4.02 or as a result of an acceleration of Loans pursuant to Section 9) or conversion of any of such Borrower's Euro Rate 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 Euro Rate 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 Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 1.l0(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Lender, it will, if requested by the applicable Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) 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 Lender 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 Lender provided in Sections 1.10, 2.06 and 4.04. -16- 1.13 Replacement of Lenders. (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 Lender which results in such Lender charging to any Borrower increased costs in excess of those being generally charged by the other Lenders or (y) if any Lender (A) becomes a Defaulting Lender 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 (vii), inclusive, of the first proviso in Section 12.12(a) which has been approved by the Required Lenders, 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 Lender (the "Replaced Lender") with one or more other Eligible Transferee or Transferees (collectively, the "Replacement Lender") none of whom shall constitute a Defaulting Lender at the time of such replacement and each of whom shall be reasonably acceptable to the Administrative Agent, provided that: (i) at the time of any replacement pursuant to this Section 1.13, the Replacement Lender 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 Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding Loans (or, in the case of the replacement of only (a) the Revolving Loan Commitment, the Revolving Loan Commitment and outstanding Revolving Loans and participations in Letters of Credit, (b) A Term Loans, the outstanding A Term Loans, (c) B Term Loans, the outstanding B Term Loans and (d) Incremental Term Loans under a given Tranche, the then remaining Incremental Term Loan Commitment and the outstanding Incremental Term Loans under such Tranche) of, and in each case (except for the replacement of only outstanding Term Loans of the respective Lender) participations in Letters of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x) the Replaced Lender in respect thereof an amount equal to the sum of (A) an amount equal to the principal of, and all accrued interest on, all outstanding Loans (or, in the case of the replacement of only (I) the Revolving Loan Commitment, the outstanding Revolving Loans, (II) the A Term Loans, the outstanding A Term Loans, (III) the B Term Loans, the outstanding B Term Loans, or (IV) the Incremental Term Loan Commitments and Incremental Term Loans under a given Tranche, the outstanding Incremental Term Loans of such Tranche) of the Replaced Lender, (B) except in the case of the replacement of only outstanding Term Loans of a Replaced Lender, an amount equal to all Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced Lender, together with all then unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender (but only with respect to the relevant Tranche, in the case of the replacement of less than all Tranches of Loans then held by the respective Replaced Lender) pursuant to Section 3.01, (y) except in the case of the replacement of only outstanding Term Loans of a Replaced Lender, each Issuing Lender an amount equal to such Replaced Lender's RL Percentage of any Unpaid Drawing with respect to a Letter of Credit issued by such Issuing Lender (which at such time remains an Unpaid Drawing) and (z) in the case of any replacement of Revolving Loan Commitments, the Swingline Lender an amount equal to such Replaced Lender's -17- RL Percentage of any Mandatory Borrowing to the extent such amount was not theretofore funded by such Replaced Lender; and (ii) all obligations (including, without limitation, all obligations under Section 1.11) of the respective Borrowers then owing to the Replaced Lender (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 Lender 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 Lender, delivery to the Replacement Lender of the appropriate Note or Notes executed by the appropriate Borrower or Borrowers, the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender 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 Lender. 1.14 Incremental Term Loan Commitments. (a) Silgan shall have the right, in consultation and coordination with the Administrative Agent as to all of the matters set forth below in this Section 1.14, but without requiring the consent of any of the Lenders, to request at any time and from time to time after the Initial Borrowing Date and prior to the Incremental Term Loan Commitment Termination Date for the respective Tranche of Incremental Term Loans that one or more Lenders (and/or one or more other Persons which are Eligible Transferees and which will become Lenders) provide to the Incremental Term Loan Borrower for the respective Tranche of Incremental Term Loan Commitments under such Tranche of Incremental Term Loans as designated in the respective Incremental Term Loan Commitment Agreement and, subject to the terms and conditions contained in this Agreement and in the respective Incremental Term Loan Commitment Agreement, make Incremental Term Loans pursuant thereto, so long as (i) no Default or Event of Default then exists or would result therefrom and all of the representations and warranties contained herein and in the other Credit Documents are true and correct in all material respects at such time (unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), (ii) Silgan and its Subsidiaries will be in compliance with Sections 8.08 and 8.09 on a Pro Forma Basis after giving effect to each incurrence of Incremental Term Loans and the application of the proceeds therefrom, and (iii) at the time of each incurrence of Incremental Term Loans, Silgan shall have delivered to the Administrative Agent a certificate of its chief financial officer or treasurer certifying which provisions of the 9% Senior Subordinated Debenture Indenture and any other Permitted Subordinated Indebtedness Document that the respective incurrence of Incremental Term Loans will be justified under and demonstrating in reasonable detail that the full amount of such Incremental Term Loans may be incurred in accordance with, and will not violate the provisions of, Section 4.03 of the 9% Senior Subordinated Debenture Indenture and any comparable provision in any other Permitted Subordinated Indebtedness Document. Furthermore, it is understood and agreed that (i) no Lender shall be obligated to provide an Incremental Term Loan Commitment, and until such time, if any, as such Lender has agreed in its sole discretion to provide an Incremental Term Loan Commitment and executed and -18- delivered to Silgan, the respective Foreign Incremental Term Loan Borrower (if applicable) and the Administrative Agent an Incremental Term Loan Commitment Agreement as provided in clause (b) of this Section 1.14, such Lender shall not be obligated to fund any Incremental Term Loans, (ii) any Lender (including any Eligible Transferee who will become a Lender) may so provide an Incremental Term Loan Commitment without the consent of the Administrative Agent or any other Lender, (iii) each Tranche of Incremental Term Loan Commitments shall be made available to a single Incremental Term Loan Borrower and shall be denominated in a single Currency which, in the case of an Other Alternate Currency, shall be approved by the Administrative Agent, (iv) the amount of each Tranche of Incremental Term Loan Commitments shall be in a minimum aggregate amount for all Lenders which provide an Incremental Term Loan Commitment under such Tranche of Incremental Term Loans (including Eligible Transferees who will become Lenders) of at least $30,000,000 (or the Dollar Equivalent thereof as determined at the time that Incremental Term Loan Commitments are obtained), (v) the aggregate amount of all Incremental Term Loan Commitments permitted to be provided pursuant to this Section 1.14 shall not exceed $275,000,000 (or the Dollar Equivalent thereof as determined at the time that such Incremental Term Loan Commitments are obtained) (it being understood and agreed, however, to the extent that any such Incremental Term Loan Commitments are obtained but later expire, terminate or are voluntarily reduced in each case without being utilized, the amount of such Incremental Term Loan Commitments so expired, terminated or voluntarily reduced may again be available to be obtained under this Section 1.14 within the limits set forth herein), (vi) the up-front fees and, if applicable, any unutilized commitment fees and/or other fees, payable in respect of each Incremental Term Loan Commitment shall be separately agreed to by Silgan, the respective Foreign Incremental Term Loan Borrower (if applicable) and each Incremental Term Loan Lender (and with all such fees to be disclosed by Silgan to the Administrative Agent), (vii) each Tranche of Incremental Term Loans shall have (I) an Incremental Term Loan Maturity Date of no earlier than the B Term Loan Maturity Date and (II) a Weighted Average Life to Maturity of no less than the Weighted Average Life to Maturity as then in effect for the B Term Loans, (viii) the proceeds of all Incremental Term Loans shall be used only for the purposes permitted by Section 6.10, (ix) any Incremental Term Loans being incurred under any single Incremental Term Loan Commitment Agreement only shall be incurred on the date of the consummation of a Permitted Acquisition (as well as on the date on which any Indebtedness assumed as part of such Permitted Acquisition is to be refinanced), the date of a Permitted Subordinated Debt Repurchase or the date on which Revolving Loans are being prepaid with the proceeds of such Incremental Term Loans, as the case may be, (x) each Incremental Term Loan Commitment Agreement shall specifically designate, with the approval of the Administrative Agent, the Tranche of the Incremental Term Loan Commitments being provided thereunder (which Tranche shall be a new Tranche (i.e., not the same as any existing Tranche of Incremental Term Loans, Incremental Term Loan Commitments or other Term Loans) unless the requirements of Section 1.14(c) are satisfied), (xi) all Incremental Term Loans (and all interest, fees and other amounts payable thereon) (including, without limitation, Incremental Term Loans incurred by a Foreign Incremental Term Loan Borrower) shall be Obligations under this Agreement and the other applicable Credit Documents and shall be secured by the US Collateral, and guaranteed under the US Borrowers/Subsidiaries Guaranty, on a pari passu basis with all other Term Loans, (xii) all Incremental Term Loans (and all interest, fees and other amounts payable thereon) incurred by a Foreign Incremental Term Loan Borrower also shall be secured and guaranteed to the extent required by Section 1.14(d) -19- and (xiii) each Lender (including any Eligible Transferee who will become a Lender) agreeing to provide an Incremental Term Loan Commitment pursuant to an Incremental Term Loan Commitment Agreement shall, subject to the satisfaction of the relevant conditions set forth in this Agreement, make Incremental Term Loans under the Tranche specified in such Incremental Term Loan Commitment Agreement as provided in Section 1.01(c) and such Loans shall thereafter be deemed to be Incremental Term Loans under such Tranche for all purposes of this Agreement and the other applicable Credit Documents. (b) At the time of the provision of Incremental Term Loan Commitments pursuant to this Section 1.14, Silgan, the respective Foreign Incremental Term Loan Borrower (if applicable), each other Credit Party, the Administrative Agent and each such Lender or other Eligible Transferee which agrees to provide an Incremental Term Loan Commitment (each, an "Incremental Term Loan Lender") shall execute and deliver to Silgan, the respective Foreign Incremental Term Loan Borrower (if applicable) and the Administrative Agent an Incremental Term Loan Commitment Agreement, appropriately completed (with the effectiveness of the Incremental Term Loan Commitment provided therein to occur on the date set forth in such Incremental Term Loan Commitment Agreement, which date in any event shall be no earlier than the date on which all fees required to be paid in connection therewith at the time of such effectiveness shall have been paid, all conditions set forth in this Section 1.14 shall have been satisfied and all other conditions precedent that may be set forth in such Incremental Term Loan Commitment Agreement shall have been satisfied). In addition, (x) on or prior to the effective date of the respective Incremental Term Loan Commitment Agreement, (I) Silgan and its Subsidiaries shall have delivered such technical amendments, modifications and/or supplements to the respective Security Documents as are reasonably requested by the Administrative Agent to ensure that the additional Obligations to be incurred pursuant to the Incremental Term Loan Commitments are secured by, and entitled to the benefits of, the Security Documents (to the extent required by the terms of this Agreement), and each of the Lenders hereby agrees to, and authorizes the Collateral Agent to enter into, any such technical amendments, modifications and/or supplements, (II) the Administrative Agent shall have received from the president, any vice president, the chief financial officer or the treasurer of Silgan a certificate certifying that the conditions set forth in clause (i) of the first sentence of Section 1.14(a) have been satisfied, (III) Silgan shall have delivered to the Administrative Agent an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Credit Parties reasonably satisfactory to the Administrative Agent and dated such date, covering such of the matters set forth in the opinions of counsel delivered to the Administrative Agent on the Initial Borrowing Date pursuant to Section 5.01(c) as may be reasonably requested by the Administrative Agent, and such other matters incident to the transactions contemplated thereby as the Administrative Agent may reasonably request, (IV) Silgan and the other Credit Parties shall have delivered to the Administrative Agent such other officers' certificates, resolutions and evidence of good standing as the Administrative Agent shall reasonably request, (V) to the extent requested by such Incremental Term Loan Lenders, Incremental Term Notes will be issued, at Silgan's expense, to such Incremental Term Loan Lenders, to be in conformity with the requirements of Section 1.05 (with appropriate modifications) to the extent needed to reflect the Incremental Term Loan Commitments and outstanding Incremental Term Loans made by such Incremental Term Loan Lenders, and (VI) if the respective Incremental Term Loan Borrower is a Wholly-Owned Foreign Subsidiary of Silgan, the provisions of Section 1.14(d) shall have been satisfied to the extent provided therein, and (y) on or prior to each Incremental Term Loan -20- Borrowing Date, in addition to the applicable conditions precedent set forth in Section 5.02, the Administrative Agent shall have received from the chief financial officer or treasurer of Silgan a certificate certifying that the conditions set forth in clauses (ii) and (iii) of the first sentence of Section 1.14(a) have been satisfied (together with calculations demonstrating same (where applicable) in reasonable detail and copies of the certificate set forth in such clause (ii)). The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Incremental Term Loan Commitment Agreement and, at such time, Schedule I shall be deemed modified to reflect the Incremental Term Loan Commitments of such Incremental Term Loan Lenders. (c) Notwithstanding anything to the contrary contained above in this Section 1.14, the Incremental Term Loan Commitments provided by an Incremental Term Loan Lender or Incremental Term Loan Lenders, as the case may be, pursuant to each Incremental Term Loan Commitment Agreement shall constitute a new Tranche, which shall be separate and distinct from the existing Tranches pursuant to this Agreement (with a designation which may be made in letters (i.e., A, B, C, etc.), numbers (1, 2, 3, etc.) or a combination thereof (i.e., A-1, A-2, B-1, B-2, C-1, C-2, etc.), provided that, with the consent of the Administrative Agent, the parties to a given Incremental Term Loan Commitment Agreement may specify therein that the respective Incremental Term Loans made pursuant thereto shall constitute part of, and be added to, an existing Tranche of Incremental Term Loans or to the outstanding Tranche of B Term Loans, in either case so long as the following requirements are satisfied: (i) the Incremental Term Loans to be made pursuant to such Incremental Term Loan Commitment Agreement shall have the same Borrower, shall be denominated in the same Currency, shall have the same Maturity Date and shall have the same Applicable Margins as the Tranche of Term Loans to which the new Incremental Term Loans are being added; (ii) the new Incremental Term Loans shall have the same Term Loan Scheduled Repayment dates as then remain with respect to the Tranche to which such new Incremental Term Loans are being added (with the amount of each Term Loan Scheduled Repayment applicable to such new Incremental Term Loans to be the same (on a proportionate basis) as is theretofore applicable to the Tranche to which such new Incremental Term Loans are being added, thereby increasing the amount of each then remaining Term Loan Scheduled Repayment of the respective Tranche proportionately; and (iii) on the date of the making of such new Incremental Term Loans, and notwithstanding anything to the contrary set forth in Section 1.09, such new Incremental Term Loans shall be added to (and form part of) each Borrowing of outstanding Term Loans of the respective Tranche on a pro rata basis (based on the relative sizes of the various outstanding Borrowings), so that each Lender will participate proportionately in each then outstanding Borrowing of Term Loans of the respective Tranche, and so that the existing Lenders with respect to such Tranche continue to have the same participation (by amount) in each Borrowing as they had before the making of the new Term Loans of such Tranche. -21- To the extent the provisions of preceding clause (iii) require that Lenders making new Incremental Term Loans add such Incremental Term Loans to the then outstanding Borrowings of Euro Rate Loans of such Tranche, it is acknowledged that the effect thereof may result in such new Incremental Term Loans having short Interest Periods (i.e., an Interest Period that began during an Interest Period then applicable to outstanding Euro Rate Loans of such Tranche and which will end on the last day of such Interest Period). In connection therewith, the respective Incremental Term Loan Borrower may agree, in the respective Incremental Term Loan Commitment Agreement, to compensate the Lenders making the new Incremental Term Loans of the respective Tranche for funding Euro Rate Loans during an existing Interest Period on such basis as may be agreed by such Incremental Term Loan Borrower and the respective Lender or Lenders. (d) Silgan may, if consented to by the Administrative Agent and the Lenders under the relevant Tranche of Incremental Term Loans, designate that the Incremental Term Loan Borrower under such Tranche be a Wholly-Owned Foreign Subsidiary of Silgan, provided that (i) the proceeds of such Incremental Term Loans only shall be used to finance a Permitted Acquisition to be made by such Foreign Incremental Term Loan Borrower or any other member of such Foreign Incremental Term Loan Borrower's Related Foreign Company Group (and to pay the fees and expenses related thereto) and to refinance any Indebtedness assumed as part of any such Permitted Acquisition (including all accrued and unpaid interest thereon, any premium associated therewith and the fees and expenses related thereto), (ii) if and to the extent permitted by applicable law (after complying with any "whitewash" and other applicable proceedings), all Obligations of such Foreign Incremental Term Loan Borrower under the Credit Documents shall be guaranteed, pursuant to a guaranty reasonably satisfactory in form and substance to the Administrative Agent (each a "Related Foreign Company Guaranty"), by each member of the Related Foreign Company Group of such Foreign Incremental Term Loan Borrower (each such member providing such guaranty, a "Related Foreign Company Guarantor") as well as by any other existing Foreign Credit Party and (iii) if and to the extent permitted by applicable law (after complying with any "whitewash" and other applicable proceedings), all Obligations of such Foreign Incremental Term Loan Borrower under the Credit Documents and all Obligations of the Related Foreign Company Guarantors, as well as all other Foreign Credit Parties, under the Related Foreign Company Guarantees shall be secured, pursuant to documentation reasonably satisfactory in form and substance to the Administrative Agent (the "Foreign Security Documents"), by a first priority perfected security interest in the assets of such Person (including, without limitation, real property, personal property (whether tangible or intangible) and capital stock and other equity interests), in each case (in the case of preceding clauses (ii) and (iii)) subject to such exceptions as may be reasonably acceptable to the Administrative Agent. 1.15 Special Sharing and Conversion Provisions Applicable to Lenders Upon the Occurrence of a Sharing Event. (a) On the date of the occurrence of a Sharing Event, automatically (and without the taking of any action) (x) all then outstanding Alternate Currency Incremental Term Loans of a given Tranche shall be converted into Alternate Currency Incremental Term Loans of such Tranche which are maintained in Dollars (in an amount equal to the Dollar Equivalent of the aggregate principal amount of the respective Alternate Currency Incremental Term Loans on the date such Sharing Event first occurred), which Alternate Currency Incremental Term Loans (i) shall continue to be owed by the respective Incremental -22- Term Loan Borrowers, (ii) shall at all times thereafter be deemed to be Base Rate Loans and (iii) shall be immediately due and payable on the date such Sharing Event has occurred, and (y) all principal, accrued and unpaid interest and other amounts owing with respect to such Alternate Currency Incremental Term Loans shall be immediately due and payable in Dollars (in an amount equal to the Dollar Equivalent of such principal, accrued and unpaid interest and other amounts). The occurrence of any conversion of Alternate Currency Incremental Term Loans as provided above in this Section 1.15(a) shall be deemed to constitute, for purposes of Section 1.11, a prepayment of the respective Alternate Currency Incremental Term Loans before the last day of any Interest Period relating thereto. (b) Upon the occurrence of a Sharing Event, and immediately after giving effect to any automatic conversion pursuant to Section 1.15(a), the Lenders shall automatically and without further action be deemed to have exchanged interests in the respective Tranches of Loans (including, in the case of the Total Revolving Loan Commitment, interests in each outstanding Letter of Credit and Unpaid Drawing) such that, in lieu of the interests of each Lender in each Tranche in which it participated as of such date, such Lender shall hold an interest in all Tranches (including, in the case of the Total Revolving Loan Commitment, an interest in each outstanding Letter of Credit, each Unpaid Drawing and each LC Reserve Account established pursuant to Section 1.15(g)), whether or not such Lender shall previously have participated therein, equal to such Lender's Exchange Percentage thereof. The foregoing exchanges shall be accomplished through the purchases and sales of participations in the relevant Tranches and each Lender hereby agrees to enter into customary participation agreements approved by the Administrative Agent to accomplish same. All purchases and sales of participating interests pursuant to this Section 1.15 shall be made in Dollars. Upon any such occurrence, the Administrative Agent shall notify each Lender and shall specify the net amount of Dollars (if any) required from each such Lender to effect the purchases and sales by the various Lenders of participating interests in the amounts required above (together with accrued interest with respect to the period for the most recent interest payment date through the date of the Sharing Event plus any additional amounts payable by the Borrowers pursuant to Section 4.04 in respect of such accrued but unpaid interest); it being understood and agreed, however, in the event that a Sharing Event shall have occurred, each Lender shall be deemed to have purchased, automatically and without request, such participating interests (and, as a result thereof, shall be entitled to receive from, or shall owe to, the other Lenders the respective amounts owing as a result of the purchases and sales of participations contemplated herein). Promptly upon receipt of such request, each Lender shall deliver to the Administrative Agent (in immediately available funds in Dollars) the net amounts (if any) as specified by the Administrative Agent. The Administrative Agent shall promptly deliver the amounts so received to the various Lenders in such amounts as are needed to effect the purchases and sales of participations as provided above. Promptly following receipt thereof, each Lender which has sold participations in any of its Tranches as provided above (through the Administrative Agent) will deliver to each Lender (through the Administrative Agent) which has so purchased a participating interest in such Tranches a participation certificate dated the date of receipt of such funds and in such amount. It is understood that the amount of funds delivered by each Lender shall be calculated on a net basis, giving effect to both the sales and purchases of participations by the various Lenders as required above. -23- (c) Upon, and after, the occurrence of a Sharing Event (i) no further Credit Events shall be made or occur, (ii) all amounts from time to time accruing with respect to, and all amounts from time to time payable on account of, Alternate Currency Incremental Term Loans (including, without limitation, any interest and other amounts which were accrued but unpaid on the date of such Sharing Event) shall be payable in Dollars as if each such Alternate Currency Incremental Term Loans had originally been made in Dollars and shall be distributed by the relevant Lenders to the Administrative Agent for the account of the Lenders which made such Loans or are participating therein, (iii) all of the Incremental Term Loan Commitments of all of the Incremental Term Loan Lenders that have provided such Incremental Term Loan Commitments shall be automatically terminated, and (iv) all Revolving Loan Commitments of all Lenders that have provided the Revolving Loan Commitments shall be automatically terminated. Notwithstanding anything to the contrary contained above, the failure of any Lender to purchase its participating interest as required above in any extensions of credit upon the occurrence of a Sharing Event shall not relieve any other Lender of its obligation hereunder to purchase its participating interests in a timely manner, but no Lender shall be responsible for the failure of any other Lender to purchase the participating interest to be purchased by such other Lender on any date. (d) If any amount required to be paid by any Lender pursuant to Section 1.15(b) is not paid to the Administrative Agent on the date upon which such Lender receives notice from the Administrative Agent of the amount of its participations required to be purchased pursuant to said Section 1.15(b), such Lender shall, in addition to such aforementioned amount, also pay to the Administrative Agent on demand an amount equal to the product of (i) the amount so required to be paid by such Lender for the purchase of its participations, (ii) the daily average Federal Funds Rate, during the period from and including the date of request for payment to the date on which such payment is immediately available to the Administrative Agent and (iii) a fraction the numerator of which is the number of days that elapsed during such period and the denominator of which is 360. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts payable under this Section 1.15 shall be conclusive in the absence of manifest error. Amounts payable by any Lender pursuant to this Section 1.15 shall be paid to the Administrative Agent for the account of the relevant Lenders, provided that, if the Administrative Agent (in its sole discretion) has elected to fund on behalf of such other Lender the amounts owing to such other Lenders, then the amounts shall be paid to the Administrative Agent for its own account. (e) Whenever, at any time after the relevant Lenders have received from any other Lenders purchases of participations pursuant to this Section 1.15, the various Lenders receive any payment on account thereof, such Lenders will distribute to the Administrative Agent, for the account of the various Lenders participating therein, such Lenders' participating interests in such amounts (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such participations were outstanding) in like funds as received; provided, however, in the event that any such payment received by any Lenders is required to be returned, the Lenders who received previous distributions in respect of their participating interests therein will return to the respective Lenders any portion thereof previously so distributed to them in like funds as such payment is required to be returned by the respective Lenders. -24- (f) Each Lender's obligation to purchase participating interests pursuant to this Section 1.15 shall be absolute and unconditional and shall not be affected by any circumstance including, without limitation, (a) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against any other Lender, any Borrower, any other Credit Party or any other Person for any reason whatsoever, (b) the occurrence or continuance of a Default or an Event of Default, (c) any adverse change in the condition (financial or otherwise) of any Borrower, any other Credit Party or any other Person, (d) any breach of this Agreement by any Borrower, any other Credit Party, any Lender or any other Person, or (e) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. (g) In the event that upon the occurrence of a Sharing Event any Letter of Credit shall be outstanding and undrawn in whole or in part, or there shall exist any Unpaid Drawing with respect to any Letter of Credit theretofore issued, each Lender with a Revolving Loan Commitment (immediately prior to the occurrence of such Sharing Event) or outstanding Revolving Loans shall on the date of such occurrence, before giving effect to the purchases and sales of participations on such date pursuant to Section 1.15(b), promptly pay over to the Administrative Agent, in immediately available funds in Dollars, an amount equal to such Lender's RL Percentage of such undrawn face amount or such Unpaid Drawing, as applicable, together with interest thereon from the date of the Sharing Event to the date on which such amount shall be paid to the Administrative Agent at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. The Administrative Agent shall establish a separate account or accounts for each Lender (each, an "LC Reserve Account") in an amount equal to such Lender's Exchange Percentage of the amounts received with respect to each such Letter of Credit pursuant to the preceding sentence. The Administrative Agent shall have sole dominion and control over each such LC Reserve Account, and the amounts deposited in each LC Reserve Account shall be held in such LC Reserve Account until withdrawn as provided in clause (h), (i) or (j) below in this Section 1.15. The Administrative Agent shall maintain records enabling it to determine the amounts paid over to it and deposited in the LC Reserve Accounts in respect of each Letter of Credit and the amounts on deposit in respect of each Letter of Credit attributable to each Lender's Exchange Percentage. The amounts paid to the Administrative Agent pursuant to this clause (g) shall be held as a reserve against the Letter of Credit Outstandings, shall not constitute Loans to any Borrower and shall not give rise to any obligation on the part of any Borrower to pay interest to such Lender, it being agreed that the Borrowers' reimbursement obligations in respect of Letters of Credit shall arise only at such times as drawings or payments are made thereunder, as provided in Section 2.05. (h) In the event that after the occurrence of a Sharing Event any drawing or payment shall be made in respect of a Letter of Credit, the Administrative Agent shall, at the request of the respective Issuing Lender, withdraw from the LC Reserve Account of each of the Lenders (in accordance with each Lender's Exchange Percentage) any amounts, up to the aggregate amount of such drawing or payment, deposited in respect of such Letter of Credit and remaining on deposit and deliver such amounts to such Issuing Lender in satisfaction of the reimbursement obligations of the Lenders under Section 2.04(c) (but not of the applicable Borrower under Section 2.05(a)). In the event that any Lender shall default on its obligation to pay over any amount to the Administrative Agent in respect of any Letter of Credit as provided in Section 1.15(g), the respective Issuing Lender shall, in the event of a drawing or payment -25- thereunder, have a claim against such Lender to the same extent as if such Lender had defaulted on its obligations under Section 2.04(c), but shall have no claim against any other Lender, notwithstanding the exchange of interests in the applicable Borrower's reimbursement obligations pursuant to Section 1.15(b). Each other Lender shall have a claim against such defaulting Lender for any damages sustained by it as a result of such default, including, in the event such Letter of Credit shall expire undrawn, its Exchange Percentage of the defaulted amount. (i) In the event that after the occurrence of a Sharing Event any Letter of Credit shall expire undrawn, the Administrative Agent shall withdraw from the LC Reserve Account of each Lender the amount remaining on deposit therein in respect of such Letter of Credit and distribute such amount to such Lender. (j) Pending the withdrawal of any amounts from its LC Reserve Account as contemplated above in this Section 1.15, the Administrative Agent will, at the direction of such Lender and subject to such rules as the Administrative Agent may prescribe for the avoidance of inconvenience, invest such amounts in Cash Equivalents. (k) Notwithstanding anything to the contrary contained elsewhere in this Agreement, upon any purchase of participations as required above, (i) each Lender which has purchased such participations shall be entitled to receive from the respective Borrowers any increased costs and indemnities (including, without limitation, pursuant to Sections 1.10, 1.11, 1.12, 2.06 and 4.04) directly from the respective Borrowers, to the same extent as if it were the direct Lender as opposed to a participant therein, which increased costs shall be calculated without regard to Section 1.13, Section 12.04(a) or the last sentence of Section 12.04(b), and (ii) each Lender which has sold such participations shall be entitled to receive from the respective Borrowers indemnification from and against any and all taxes imposed as a result of the sale of the participations pursuant to this Section 1.15. Each Borrower acknowledges and agrees that, upon the occurrence of a Sharing Event and after giving effect to the requirements of this Section 1.15, increased Taxes may be owing by it pursuant to Section 4.04, which Taxes shall be paid (to the extent provided in Section 4.04) by the respective Borrowers, as the case may be, without any claim that the increased Taxes are not payable because same resulted from the participations effected as otherwise required by this Section 1.15. (l) Notwithstanding anything to the contrary contained above in this Section 1.15, the provisions of this Section 1.15 only shall apply in the event that either (x) any Incremental Term Loans are outstanding to a Foreign Incremental Term Loan Borrower at the time that a Sharing Event occurs or (y) any Loans or Unpaid Drawings are owed by CanCo, or any Letters of Credit issued for the account of CanCo are outstanding, in either case at a time when a Sharing Event occurs and the CanCo Restrictions are still in effect. 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 an Issuing Lender 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 sight standby -26- letter of credit in a form customarily used by such Issuing Lender, or in such other form as has been approved by such Issuing Lender, in support of such obligations of Silgan or any of its Subsidiaries as may be requested by the respective Revolving Borrower (other than obligations in respect of any Permitted Subordinated Indebtedness), and (y) an irrevocable sight trade letter of credit in a form customarily used by such Issuing Lender, or in such other form as has been approved by such Issuing Lender, 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 Deutsche Bank 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, each Issuing Lender 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 no Issuing Lender shall be under any 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 such Issuing Lender from issuing such Letter of Credit or any requirement of law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any governmental authority with jurisdiction over such Issuing Lender shall prohibit, or request that such Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Lender with respect to such Letter of Credit any restriction or reserve or capital requirement (for which such Issuing Lender is not otherwise compensated hereunder) not in effect on the Effective Date, or any unreimbursed loss, cost or expense which was not applicable, in effect or known to such Issuing Lender as of the Effective Date and which such Issuing Lender in good faith deems material to it; or (ii) such Issuing Lender shall have received notice from the Required Lenders prior to the issuance of such Letter of Credit of the type described in the second 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) $50,000,000 and (y) when added to the aggregate principal amount of all Revolving Loans and Swingline Loans then outstanding, an amount equal to the Total 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 -27- 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 the respective Issuing Lender) 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. (d) Notwithstanding anything to the contrary contained above in this Section 2.01, no Letter of Credit shall be issued for the account of CanCo the Stated Amount of which, (A) when added to the sum of (I) the aggregate amount of all other 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) in respect of all other Letters of Credit issued for the account of CanCo at such time and (II) the aggregate principal amount of all Revolving Loans and Swingline Loans incurred by CanCo and then outstanding, would exceed an amount equal to the CanCo Revolving Sub-Limit then in effect or (B) when added to the sum of (I) the aggregate amounts calculated in the preceding clause (A) and outstanding at such time and (II) the aggregate amount of all other CanCo Included Debt outstanding at such time, would exceed the CanCo Permitted Debt Amount at such time. 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 the respective Issuing Lender. 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 the respective Issuing Lender at least two Business Days' prior written notice thereof. Each notice shall be in the form of Exhibit C (each a "Letter of Credit Request"). (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, Sections 2.01(c) and, if applicable, 2.01(d). Unless the respective Issuing Lender has received notice from the Required Lenders 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 Sections 2.01(c) and/or, if applicable, 2.01(d), then such Issuing Lender may issue the requested Letter of Credit for the account of the respective Revolving Borrower in accordance with such Issuing Lender's usual and customary practices. Upon its issuance of, or its entering into any amendment with respect to, any standby Letter of Credit, the respective Issuing Lender shall promptly notify the Administrative Agent and each Lender of such issuance or amendment and deliver to the Administrative Agent and each Lender a copy of the Letter of Credit actually issued or amended, as the case may be. In addition, at the time of each issuance of a trade Letter of Credit and on the first Business Day of each week thereafter, each Issuing Lender shall furnish the Administrative Agent with a written (including via facsimile) report of (x) with respect to the issuance of such trade Letter of Credit, the Stated Amount thereof, and (y) thereafter, the daily aggregate Letter of Credit Outstandings of all trade Letters of Credit issued by such Issuing Lender for the immediately preceding week. Notwithstanding anything to the contrary contained in this Agreement, in the event that a Lender Defaults exists with respect to a -28- Lender with a Revolving Loan Commitment, no Issuing Lender shall be required to issue any Letter of Credit unless such Issuing Lender has entered into arrangements satisfactory to it and the Borrowers to eliminate such Issuing Lender's risk with respect to the participation in Letters of Credit by the Defaulting Lender or Lenders, including by cash collateralizing such Defaulting Lender's or Lender's RL Percentage of the Letter of Credit Outstandings. 2.04 Letter of Credit Participations. (a) Immediately upon the issuance by an Issuing Lender of any Letter of Credit, such Issuing Lender shall be deemed to have sold to each Lender with a Revolving Loan Commitment, other than such Issuing Lender (each such Lender, in its capacity under this Section 2.04, a "Participant"), and each such Participant shall be deemed irrevocably and unconditionally to have purchased from such Issuing Lender, without recourse or warranty, an undivided interest and participation, to the extent of such Participant's RL 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 (but not Facing Fees) payable with respect thereto, and any security therefor or guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments or RL Percentages of the Lenders pursuant to Section 1.13 or 12.04(b), it is hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment to the participations pursuant to this Section 2.04 to reflect the new RL Percentages of the assignor and assignee Lender, as the case may be. (b) In determining whether to pay under any Letter of Credit, no Issuing Lender shall have any obligation relative to the Participants therein other than to confirm that any documents required to be delivered under such Letter of Credit appear to have been delivered and that they appear to substantially comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by an Issuing Lender under or in connection with any Letter of Credit issued by it shall not create for an Issuing Lender any resulting liability to any Revolving Borrower, any other Credit Party, any Participant or any other Lender unless such action is taken or omitted to be taken with gross negligence or willful misconduct on the part of such Issuing Lender (as determined by a court of competent jurisdiction in a final and non-appealable decision). (c) In the event that any Issuing Lender makes any payment under any Letter of Credit issued by it and the respective Revolving Borrower shall not have reimbursed such amount in full to such Issuing Lender pursuant to Section 2.05(a), such Issuing Lender 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 the respective Issuing Lender, the amount of such Participant's RL Percentage of such unreimbursed payment in Dollars and in same day funds. If the Administrative Agent so notifies, prior to 11:00 A.M. (Local 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 the respective Issuing Lender such Participant's RL 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 RL Percentage of the amount of such payment available to the Administrative Agent for the account of the respective Issuing Lender, such Participant agrees to pay to the Administrative Agent for the account of such Issuing Lender, forthwith on demand such amount, together with interest thereon, for each day from such date until the date -29- such amount is paid to the Administrative Agent for the account of such Issuing Lender at the overnight Federal Funds Rate for the first three days and at the interest rate applicable to Revolving Loans maintained as Base Rate Loans for each day thereafter. The failure of any Participant to make available to the Administrative Agent for the account of an Issuing Lender such Participant's RL Percentage of any payment under any Letter of Credit issued by such Issuing Lender shall not relieve any other Participant of its obligation hereunder to make available to the Administrative Agent for the account of such Issuing Lender such Participant's RL Percentage of any Letter of Credit issued by such Issuing Lender 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 such Issuing Lender such other Participant's RL Percentage of any such payment. (d) Whenever an Issuing Lender receives a payment of a reimbursement obligation as to which the Administrative Agent has received for the account of such Issuing Lender any payments from the respective Participants pursuant to clause (c) above, such Issuing Lender shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each such Participant which has paid its RL 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, each Issuing Lender shall furnish to such Participant 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 each Issuing Lender with respect to Letters of Credit issued by it 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, any other Credit Party or any Subsidiary thereof 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, such Issuing Lender, any Lender 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, any other Credit Party or any Subsidiary thereof and the beneficiary named in any such Letter of Credit); -30- (iii) any draft, certificate or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents; or (v) the occurrence of any Default or Event of Default. 2.05 Agreement to Repay Letter of Credit Drawings. (a) Each Revolving Borrower hereby agrees to reimburse each Issuing Lender, by making payment to the Administrative Agent in Dollars and in immediately available funds at the Payment Office, for any payment or disbursement made by such Issuing Lender under any Letter of Credit issued by it 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 such Issuing Lender, to the extent not reimbursed prior to 12:00 Noon (Local Time) on the date of such payment or disbursement, from and including the date paid or disbursed to but not including the date such Issuing Lender was reimbursed therefore at a rate per annum which shall be the Base Rate in effect from time to time plus the Applicable Margin in effect from time to time in respect of Revolving Loans that are maintained as Base Rate Loans; provided, however, to the extent such amounts are not reimbursed prior to 12:00 Noon (Local 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 such Issuing Lender (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 effect from time to time in respect of Revolving Loans that are 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 each Issuing Lender 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 Lender (including in such Lender's capacity as issuer of the Letter of Credit or as a Participant with respect thereto), including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit (each a "Drawing") to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such Drawing; provided, however, that no Revolving Borrower shall be obligated to reimburse an Issuing Lender for any wrongful payment made by such Issuing Lender under a Letter of Credit issued by it as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Issuing Lender (as determined by a court of competent jurisdiction in a final and non-appealable decision). 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 -31- administration thereof by the NAIC or any governmental authority charged with the interpretation or administration thereof, or compliance by an Issuing Lender 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 such Issuing Lender or participated in by any Participant, or (ii) impose on such Issuing Lender 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 such Issuing Lender 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 such Issuing Lender or any Participant hereunder, then, upon demand to the respective Revolving Borrower by such Issuing Lender or such Participant (a copy of which notice shall be sent by such Issuing Lender or such Participant to the Administrative Agent), such Revolving Borrower shall, subject to the provisions of Section 12.18 (to the extent applicable), pay to such Issuing Lender or such Participant the additional amount or amounts as will compensate such Issuing Lender or such Participant for such increased cost or reduction. A certificate submitted to the respective Revolving Borrower by an Issuing Lender or a Participant, as the case may be (a copy of which certificate shall be sent by such Issuing Lender or such Participant to the Administrative Agent), setting forth the basis for the determination of such additional amount or amounts necessary to compensate such Issuing Lender 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 Lender with a Revolving 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 per annum equal to the Applicable Commitment Commission Percentage on the daily average Unutilized Revolving Loan Commitment of such Non-Defaulting Lender. 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 Lender with a Revolving Loan Commitment or with outstanding Revolving Loans (based upon each such Lender's RL Percentage) a fee in respect of such Lender'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 or expiration of such Letter of Credit, computed at a rate per annum equal to the Applicable Margin for Revolving Loans that are 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. -32- (c) Each Revolving Borrower jointly and severally agrees to pay to each Issuing Lender, for its own account, a facing fee in respect of each Letter of Credit issued by such Issuing Lender 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 on or 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 each Issuing Lender, for its own account, in respect of each Letter of Credit issued by it hereunder, such amount or amounts as such Issuing Lender 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 other Agents, for their own accounts, such fees as may be agreed to from time to time between the Borrowers and the Administrative Agent and/or the other Agents. (f) Silgan and each other Incremental Term Loan Borrower agrees to pay to the Incremental Term Loan Lenders, for their own accounts, such fees as may be separately agreed to with such Incremental Term Loan Lenders pursuant to Section 1.14. (g) Notwithstanding anything to the contrary contained in this Section 3.01, CanCo shall not be jointly or severally liable with the other Borrowers for any Fees obligated to be paid by the other Borrowers to the extent prohibited by the applicable CanCo Restrictions then in effect; although CanCo will remain obligated for its portion of the accrued Commitment Commission, Letter of Credit Fees, Facing Fees and other Fees except upon a sale or other disposition pursuant to Section 12.20(b), in which case Containers and the other Borrowers (in no event to include CanCo) shall be solely jointly and severally liable for the amount of all Fees owing by CanCo as otherwise provided above in this Section 3.01. 3.02 Voluntary Termination of Revolving Commitments. (a) (I) Upon at least two Business Days' prior written notice (or telephonic notice promptly confirmed in writing) by any Borrower to the Administrative Agent at the applicable Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), any Borrower shall have the right, without premium or penalty, to terminate the Total Unutilized Revolving Loan Commitment, in whole or, if in part, in integral multiples of $1,000,000, provided that each such reduction shall apply proportionately to permanently reduce the Revolving Loan Commitment of each Lender. (II) Upon at least two Business Days' prior written notice (or telephonic notice promptly confirmed in writing) by an Incremental Term Loan Borrower to the Administrative Agent at the applicable Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), such Incremental Term Loan Borrower shall have the right, without premium or penalty, to terminate or partially reduce the Total Incremental Term Loan Commitment under the Tranche with respect to such Incremental Term Loan Borrower, provided that (x) any such termination or partial reduction shall apply proportionately to permanently reduce the Incremental Term Loan Commitment of each of the Lenders with such a Commitment -33- under such Tranche and (y) any partial reduction pursuant to this Section 3.02(a)(II) shall be in integral multiples of $1,000,000 (or the Dollar Equivalent thereof). (b) In the event of the refusal by a Lender to consent to a proposed change, waiver, discharge or termination with respect to any of the matters set forth in clauses (i) through (vii), inclusive, of the first proviso in Section 12.12(a) which has been approved by the Required Lenders, 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 applicable Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), to terminate the entire Revolving Loan Commitment and Incremental Term Loan Commitments of such Lender, so long as all Loans, together with accrued and unpaid interest, Fees and all other amounts owing to such Lender 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 Lender shall no longer constitute a "Lender" 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 Lender. 3.03 Mandatory Reduction or Termination of Commitments. (a) The Total Commitment (and the A Term Loan Commitment, the B Term Loan Commitment and the Revolving Loan Commitment of each Lender) shall terminate in their entirety on June 30, 2002 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 Lender) 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 Incremental Term Loan Commitment under a given Tranche shall (i) be permanently reduced (x) on each Incremental Term Loan Borrowing Date in respect of such Tranche in an amount equal to the aggregate principal amount of Incremental Term Loans of such Tranche incurred on each such date, (ii) terminate in its entirety (to the extent not theretofore terminated) on the Incremental Term Loan Commitment Termination Date for such Tranche of Incremental Term Loans (after giving effect to any Incremental Term Loans of such Tranche to be made on such date) and (iii) prior to the termination of the Total Incremental Term Loan Commitment in respect of such Tranche, be permanently reduced from time to time to the extent required by Section 4.02(k). (d) 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 Lender) shall terminate in its entirety on the Revolving Loan Maturity Date. (e) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment shall be permanently reduced from time to time to the extent required by Section 4.02(k). -34- (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 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, and/or termination of, the Total Revolving Loan Commitment pursuant to this Section 3.03 shall be applied proportionately to permanently reduce, and/or terminate, the Revolving Loan Commitment of each Lender with such a Commitment. Each reduction to, and/or termination of, the Total Incremental Term Loan Commitment under a given Tranche pursuant to this Section 3.03 shall be applied proportionately to permanently reduce, and/or terminate, the Incremental Term Loan Commitment of each Lender with such a Commitment under such Tranche; provided, however, any mandatory reduction to the Incremental Term Loan Commitments pursuant to Section 4.02(k) shall be applied to proportionately and permanently reduce the Incremental Term Loan Commitments of all Lenders for all Tranches on a pro rata basis (based on the then remaining amounts of such Incremental Term Loan Commitments). 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 applicable 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. (Local 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 Euro Rate Loans, (ii) which notice (x) shall specify whether A Term Loans, B Term Loans, Incremental Term Loans under a given Tranche, 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 Euro Rate 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, and (y) the Administrative Agent shall promptly transmit to each of the Lenders; (iii) each partial prepayment shall be in an aggregate principal amount of at least $1,000,000 (or $250,000 in the case of Swingline Loans) or, in the case of Incremental Term Loans of a given Tranche, the minimum principal amount set forth in the Incremental Term Loan Commitment Agreement for such Tranche) , provided that if any partial prepayment of Euro Rate Loans made pursuant to any Borrowing shall reduce the outstanding Euro Rate Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto, then (A) if such Borrowing is a Borrowing of Eurodollar Loans, 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 -35- such Borrower shall have no force or effect, and (B) if such Borrowing is a Borrowing of Alternate Currency Incremental Term Loans under a given Tranche, the respective Incremental Term Loan Borrower shall cooperate with the Administrative Agent in selecting Interest Periods at the end of the then current Interest Period or Interest Periods so as to align such Borrowing with the Interest Period or Interest Periods applicable to one or more other Borrowings of such Tranche of Incremental Term Loans; (iv) except as otherwise provided in the proviso to clause (v) 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 each of the Tranches of Term Loans on a pro rata basis, with each Tranche of Term Loans to be allocated its Term Loan Percentage of the amount of such prepayment; (v) each prepayment of any Tranche of Term Loans pursuant to this Section 4.01(a) shall be applied (1) first, to reduce the Term Loan Scheduled Repayment of each such Tranche of Term Loans which is due on December 31 of the year in which such prepayment is made (it being understood that any voluntary prepayments of A Term Loans, B Term Loans or Incremental Term Loans pursuant to this Section 4.01(a) which are made in 2002 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, 2003, (B) in the case of B Term Loans, to the B Term Loan Scheduled Repayment which is due on December 31, 2002 and then to the B Term Loan Scheduled Repayment which is due on December 31, 2003, and (C) in the case of Incremental Term Loans under a given Tranche, to the Incremental Term Loan Scheduled Repayment (if any) for such Tranche which is due on December 31, 2002 and then to the Incremental Term Loan Scheduled Repayment (if any) for such Tranche which is due on December 31, 2003) and (2) second, to the extent in excess thereof, to reduce the then remaining Term Loan Scheduled Repayments of each such Tranche of Term Loans on a pro rata basis (based upon the then remaining principal amounts of Term Loan Scheduled Repayments of each such Tranche of Term Loans 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 among the Term Loans, or applied solely to the A Term Loans, the B Term Loans or any Tranche of Incremental 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, the B Term Loan Scheduled Repayment and/or the Incremental Term Loan Scheduled Repayment of such Tranche, 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, B Term Loans or Incremental Term Loans which are made in 2002 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, 2003, (B) in the case of B Term Loans, to the B Term Loan Scheduled Repayment which is due on December 31, 2002, and then to the B Term Loan Scheduled Repayment which is due on December 31, 2003, and (C) in the case of Incremental Term Loans under a given Tranche, to the Incremental Term Loan Scheduled Repayment (if any) for such Tranche which is due on December 31, 2002 and then to the Incremental Term Loan Scheduled Repayment (if any) for such Tranche which is due on December 31, 2003) and (2) second, to the extent in excess thereof, to reduce the then remaining Term Loan Scheduled Repayment of such Tranche of Term Loans on a pro rata basis (based upon the then remaining principal amount of such Term Loan Scheduled Repayments after giving effect to all prior reductions thereto); and (vi) each prepayment in respect of any Tranche of Loans shall be applied pro rata among the Lenders with outstanding Loans of such Tranche, provided that at the -36- respective Revolving Borrower's election in connection with any prepayment of Revolving Loans pursuant to this Section 4.01(a), such prepayment shall not, so long as no Default or Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender. (b) In the event of the refusal by a Lender to consent to a proposed change, waiver, discharge or termination with respect to any of the matters described in clauses (i) through (vii), inclusive, of the first proviso in Section 12.12(a) which have been approved by the Required Lenders, 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 applicable Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders) 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 Lender (or, at the Borrowers' discretion, owing to such Lender solely with respect to the Tranche which gave rise to the need to obtain such Lender's individual consent) in accordance with said Section 12.12(b) so long as (A) in the case of the repayment of Revolving Loans of any Lender pursuant to this Section 4.01(b), the Revolving Loan Commitment of such Lender 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), (B) in the case of the repayment of Incremental Term Loans of any Lender under a given Tranche, the Incremental Term Loan Commitment of such Lender under such Tranche 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 Incremental Term Loan Commitments of such Tranche) and (C) the consents required by Section 12.12(b) in connection with the repayment pursuant to this Section 4.01(b) have been obtained. Each prepayment of any Term Loans pursuant to this Section 4.01(b) shall be applied to reduce the then remaining Term Loan Scheduled Repayments of such Tranche of Term Loans on a pro rata basis (based upon the then remaining principal amount of such Term Loan Scheduled Repayments after giving effect to all prior reductions thereto). (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 Lenders with outstanding B Terms Loans (the "B Lenders") and the Incremental Term Loan Lenders with outstanding Incremental Term Loans the option to waive their pro rata share of a voluntary prepayment of B Term Loans and Incremental 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 at the applicable Notice Office of Silgan's intention to give the B Lenders and the Incremental Term Loan Lenders 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 Lenders and Incremental Term Loan Lenders (indicating in such notice the amount of such prepayment to be applied to each such B Lender's outstanding B Term Loans and Incremental Term Loans). Silgan's offer to permit the B Lenders and the Incremental Term Loan Lenders to waive any such 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 Lenders and the Incremental Term Loan Lenders on the basis of their -37- outstanding B Term Loans and Incremental Term Loans. In the event that any such B Lender or Incremental Term Loan Lender desires to waive such Lender's right to receive its pro rata share of any such Waivable Voluntary Prepayment in whole or in part, such Lender shall so advise the Administrative Agent no later than 4:00 p.m. (Local 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 Lender desires to receive in respect of such prepayment. If any B Lender or Incremental Term Loan Lender does not reply to the Administrative Agent within the two Business Days, such Lender will be deemed not to have waived any part of such prepayment. If any B Lender or Incremental Term Loan Lender does not specify an amount it wishes to receive, such Lender will be deemed to have accepted 100% of its share of such prepayment. In the event that any such B Lender or Incremental Term Loan Lender 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 Lender 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 all Revolving Loans, (II) the aggregate outstanding principal amount of all Swingline Loans and (III) the aggregate amount of all Letter of Credit Outstandings exceeds the 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 or if no Swingline Loans are then outstanding, Revolving Loans in an amount equal to such excess. If, after giving effect to the prepayment of all outstanding Swingline Loans and Revolving Loans, the aggregate amount of all Letter of Credit Outstandings exceeds the 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 hereunder in a cash collateral account maintained by the Administrative Agent (the "Cash Collateral Account"); provided, however, 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 so long as the Total Revolving Loan Commitment as then in effect exceeds the sum of (I) the aggregate outstanding principal amount of all Revolving Loans, (II) the aggregate outstanding principal amount of all Swingline Loans and (III) the aggregate amount of all Letter of Credit Outstandings at such time. (ii) On any day on which (A) the sum of (I) the aggregate outstanding principal amount of all Revolving Loans made to CanCo, (II) the aggregate outstanding principal amount of all Swingline Loans made to CanCo and (III) the aggregate amount of all Letter of Credit Outstandings in respect of all Letters of Credit issued for the account of CanCo at such time exceeds the CanCo Revolving Sub-Limit then in effect or (B) the sum of (I) the aggregate amounts calculated in the preceding clause (A) and outstanding at such time and (II) the aggregate amount of all other CanCo Included Debt outstanding at such time exceeds the CanCo Permitted Debt Amount at such time, CanCo shall (in either case) repay on such day principal of Swingline Loans made to CanCo and, after all such Swingline Loans have been repaid in full or if no such Swingline Loans are then outstanding, Revolving Loans made to CanCo in an amount equal to such excess. If, after giving effect to the prepayment of all outstanding Swingline Loans -38- and Revolving Loans made to CanCo, either (A) the aggregate amount of all Letter of Credit Outstandings in respect of all Letters of Credit issued for the account of CanCo at such time exceeds the CanCo Revolving Sub-Limit then in effect or (B) the sum of (I) the aggregate amount of all Letter of Credit Outstandings in respect of all Letters of Credit issued for the account of CanCo at such time and (II) the aggregate amount of all other CanCo Included Debt outstanding at such time exceeds the CanCo Permitted Debt Amount at such time, CanCo shall (in either case) 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 such Letter of Credit Outstandings at such time), such cash or Cash Equivalents to be held as security for all Obligations of CanCo hereunder in the Cash Collateral Account; provided, however, that such amounts shall, so long as no Default or Event of Default then exists, be released to CanCo from time to time so long as both (x) the CanCo Revolving Sub-Limit then in effect exceeds the sum of (I) the aggregate outstanding principal amount of all Revolving Loans made to CanCo, (II) the aggregate outstanding principal amount of all Swingline Loans made to CanCo and (III) the aggregate amount of all Letter of Credit Outstandings at such time in respect of all Letters of Credit issued for the account of CanCo and (y) the CanCo Permitted Debt Amount at such time exceeds the sum of (I) the aggregate amounts referred to in preceding clause (x) and outstanding at such time and (II) the aggregate outstanding amount of all other CanCo Included Debt at such time. (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 Sections 4.01(a), 4.01(b) and 4.02(k), an "A Term Loan Scheduled Repayment"): A Term Loan Scheduled Repayment Date Amount ------------------------ ------ December 31, 2003 $16,670,000 December 31, 2004 $16,670,000 December 31, 2005 $16,670,000 December 31, 2006 $16,670,000 December 31, 2007 $16,670,000 A Term Loan Maturity Date $16,650,000 (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 Sections 4.01(a), 4.01(b) and 4.02(k) and as the same may be increased as provided in clause (ii) of Section 1.14(c), a "B Term Loan Scheduled Repayment"): B Term Loan Scheduled Repayment Date Amount ------------------------ ------ December 31, 2002 $1,750,000 -39- B Term Loan Scheduled Repayment Date Amount ------------------------ ------ December 31, 2003 $3,500,000 December 31, 2004 $3,500,000 December 31, 2005 $3,500,000 December 31, 2006 $3,500,000 December 31, 2007 $3,500,000 B Term Loan Maturity Date $330,750,000 (d) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, Silgan shall be required to make, with respect to each Tranche of Incremental Term Loans, to the extent then outstanding, scheduled amortization payments of such Tranche of Incremental Term Loans on the dates and in the principal amounts set forth in the respective Incremental Term Loan Commitment Agreement (each such repayment, as the same may be reduced as provided in Sections 4.01(a), 4.01(b) and 4.02(k), an "Incremental Term Loan Scheduled Repayment" and, together with the A Term Loan Scheduled Repayments and the B Term Loan Scheduled Repayments, the "Term Loan Scheduled Repayments"); provided that, if any Incremental Term Loans are incurred which will be added to (and form part of) an existing Tranche of Incremental Term Loans, the amount of the then remaining Incremental Term Loan Scheduled Repayments of the respective Tranche shall be proportionally increased (with the aggregate amount of increases to the then remaining Incremental Term Loan Scheduled Repayments to equal the aggregate principal amount of such new Incremental Term Loans then being incurred) in accordance with the requirements of clause (ii) of Section 1.14(c). (e) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, on each Excess Cash Payment Date, an amount equal to 50% of Excess Cash Flow for the relevant Excess Cash Payment Period shall be applied as a mandatory repayment and/or commitment reduction in accordance with the requirements of Section 4.02(k); 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 Total Leverage Ratio as of the last day of the relevant Excess Cash Payment Period is less than or equal to 3.50:1.00. (f) 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 (including pursuant to Section 12.20(b)), 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(k); provided, however, 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 -40- 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(k). (g) 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(k); provided, however, that so long as no Default or Event of Default then exists and the proceeds from any such Recovery Event do not exceed $75,000,000, 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 (and/or to invest in a then existing manufacturing facility to accommodate for the loss of capacity at the manufacturing facility subject to such Recovery Event) 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 or to invest in a then existing manufacturing facility, as the case may be), and provided further, that (i) if the amount of such proceeds exceeds $75,000,000, then only the portion of such proceeds in excess of $75,000,000 shall be applied as a mandatory repayment and/or commitment reduction in accordance with the requirements of Section 4.02(k) 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(k). Notwithstanding anything to the contrary contained above in this Section 4.02(g), so long as no Default or Event of Default then exists which results in the termination of the Total Commitment, any cash proceeds (even if such cash proceeds exceeds $75,000,000) received by CanCo from any Recovery Event in respect of its assets may be reinvested as provided above in this Section 4.02(g) to the extent that CanCo is otherwise required to reinvest all such proceeds by the terms of the applicable Campbell Can Acquisition Documents. (h) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, (i) 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, except as provided below in this clause (h), Indebtedness for borrowed money permitted to be incurred pursuant to Section 8.04 as such Section is in effect on the Effective Date) and (ii) on each date on or after the Initial Borrowing Date upon which Silgan receives any cash proceeds from any issuance of Additional Permitted Subordinated Indebtedness the proceeds of which have not been used to Refinance then outstanding Permitted Subordinated Indebtedness or to finance a Permitted Acquisition, in each case 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(k); provided, however, if all or any portion of any Net Debt Proceeds from the issuance of Additional Permitted Subordinated Indebtedness are to be used to Refinance then outstanding Permitted Subordinated Indebtedness as otherwise permitted by this Agreement within 60 days from the date of the issuance thereof, -41- such portion shall not be required to be applied pursuant to Section 4.02(k) on such date (although if all or any portion of such Net Debt Proceeds are not actually used to Refinance outstanding Permitted Subordinated Indebtedness within such 60 day period, such remaining portion shall be applied on the last day of such period (or such earlier date, if any, as Silgan determines not to proceed with such Refinancing) as a mandatory repayment and/or commitment reduction in accordance with the requirements of Section 4.02(k). (i) 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(k) 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(k). (j) 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(k); 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 9% Senior Subordinated Debenture Indenture or any other Permitted 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(k) and/or reinvested in 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 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(k). (k) Any amount required to be applied pursuant to this Section 4.02(k) shall be applied (i) first, as a mandatory repayment of the then outstanding principal amount of Term Loans, (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 Incremental Term Loan Commitment for each Tranche of Incremental Term Loans and (iii) third, to the extent in excess of the amount required to be applied pursuant to the preceding clauses (i) and (ii), as a mandatory reduction to -42- the Total Revolving Loan Commitment. The amount to be applied to repay principal of outstanding Term Loans shall be allocated among each of the Tranches of Term Loans on a pro rata basis, with each Tranche of Term Loans to be allocated its Term Loan Percentage of the amount of such prepayment and with the amount allocated to each such Tranche of Term Loans to be applied (1) first, to reduce the Term Loan Scheduled Repayment of each such Tranche of Term Loans 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, B Term Loans or Incremental Term Loans which are required to be applied pursuant to this Section 4.02(k) in 2002 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, 2003, (B) in the case of B Term Loans, to the B Term Loan Scheduled Repayment which is due on December 31, 2002 and then to the B Term Loan Scheduled Repayment which is due on December 31, 2003, and (C) in the case of Incremental Term Loans under a given Tranche, to the Incremental Term Loan Scheduled Repayment (if any) for such Tranche which is due on December 31, 2002 and then to the Incremental Term Loan Scheduled Repayment (if any) for such Tranche which is due on December 31, 2003) and (2) second, to the extent in excess thereof, to reduce the then remaining Term Loan Scheduled Repayments of each such of Tranche of Term Loans on a pro rata basis (based upon the then remaining principal amounts of such Term Loan Scheduled Repayments of such Tranche of Term Loans after giving effect to all prior reductions thereto). (l) 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 Lenders and the Incremental Term Loan Lenders the option to waive their pro rata share of a mandatory repayment of B Term Loans and Incremental Term Loans which is to be made pursuant to Section 4.02(e), (f), (g), (h), (i) and/or (j) (each such repayment, a "Waivable Mandatory Repayment") upon the terms and provisions set forth in this Section 4.02(l). If Silgan elects to exercise the option referred to in the immediately preceding sentence, Silgan shall give to the Administrative Agent written notice at the applicable Notice Office of Silgan's intention to give the B Lenders and Incremental Term Loan Lenders 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 Lenders and Incremental Term Loan Lenders (indicating in such notice the amount of such repayment to be applied to each such Lender's outstanding B Term Loans and Incremental Term Loans). Silgan's offer to permit the B Lenders and Incremental Term Loan Lenders 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 Lenders and Incremental Term Loan Lenders on the basis of their outstanding B Term Loans and Incremental Term Loans. In the event that any such B Lender or Incremental Term Loan Lender desires to waive its pro rata share of such Lender's right to receive any such Waivable Mandatory Repayment in whole or in part, such Lender shall so advise the Administrative Agent no later than 4:00 P.M. (Local 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 Lender desires to receive in respect of such repayment. If any B Lender or Incremental Term Loan Lender does not reply to the Administrative Agent within the two Business Days, such Lender will be deemed not to have waived any part of such repayment. If any B Lender or Incremental Term Loan Lender does not specify an amount it wishes to -43- receive, such Lender will be deemed to have accepted 100% of its share of such repayment. In the event that any such B Lender or Incremental Term Loan Lender 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 Lender to the outstanding A Term Loans in accordance with Section 4.02(k). (m) On the 30th day preceding December 31 of each year (commencing on the 30th day preceding December 31, 2002), if a Clean-Down Period shall not have occurred since the eleven month period ending on December 1 of such year, the Revolving Borrowers shall repay outstanding Swingline 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 the Clean-Down Amount 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. (n) 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 of such Tranche and, in the case of Euro Rate Loans, the specific Borrowing or Borrowings pursuant to which such Euro Rate Loans were made, provided that: (i) repayments of Euro Rate 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 Euro Rate 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 Euro Rate 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, (x) in the case of Eurodollar Loans, such Borrowing shall be converted at the end of the then current Interest Period into a Borrowing of Base Rate Loans, and (y) in the case of Alternate Currency Incremental Term Loans of a given Tranche, the respective Incremental Term Loan Borrower shall cooperate with the Administrative Agent in selecting Interest Periods at the end of the then current Interest Period or Interest Periods so as to align such Borrowing with the Interest Periods applicable to one or more other Borrowings of Alternate Currency Incremental Term Loans of such Tranche; and (iii) each repayment of any Tranche of Loans shall be applied pro rata among the Lenders 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. (o) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, (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 in a manner reasonably satisfactory to the Administrative Agent. (p) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, upon any receipt by CanCo of any cash capital contribution only -44- pursuant to (and only to the extent required by) Section 7.13, an amount equal to 100% of such cash capital contribution shall be applied as a mandatory repayment of principal of outstanding Swingline Loans and, if no Swingline Loans are or remain outstanding, Revolving Loans, in each case made to CanCo. (q) So long as the CanCo Restrictions are in effect and in addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, CanCo shall be required to repay outstanding Swingline Loans and, if no Swingline Loans are or remain outstanding, Revolving Loans, in each case made to it with 100% the Net Sale Proceeds from any Asset Sale made by CanCo or any of its Subsidiaries to the extent that such Net Sale Proceeds are not reinvested by CanCo or any of its Subsidiaries as permitted by Section 4.02(f). (r) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, in the event that Campbell Soup or a Subsidiary thereof purchases all of the capital stock or all or substantially all of the assets of CanCo, whether pursuant to the terms of the Campbell Can Acquisition Documents or otherwise, all then outstanding Revolving Loans and Swingline Loans made to CanCo shall have been (or shall concurrently be) repaid in full at such time and all Letters of Credit issued for the account of CanCo shall have been (or shall concurrently be) cash collateralized in a manner satisfactory to the Administrative Agent. (s) For purposes of making calculations pursuant to this Section 4.02, the Administrative Agent shall be entitled to use the Dollar Equivalent of any such amounts stated in a currency other than Dollars. 4.03 Method and Place of Payment. Except as otherwise specifically provided herein, all payments under this Agreement and under any Note shall be made to the Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 12:00 Noon (Local Time) on the date when due and shall be made in immediately available funds at the applicable Payment Office in (x) Dollars if such payment is made in respect of (i) principal of or interest on Dollar Loans owing by any Borrower or any increased costs or similar obligations owing by any Borrower in respect of Dollar Loans or (ii) except as provided in following clause (y), any other Obligation of any Borrower under this Agreement or under any Note issued by such Borrower and (y) in the applicable Alternate Currency if such payment is made in respect of (i) principal of or interest on Alternate Currency Incremental Term Loans or Commitments in respect thereof or (ii) any increased costs, indemnities or other amounts owing with respect to Alternate Currency Incremental Term Loans or Commitments in respect thereof; provided that, from and after any Sharing Event, all payments of principal, interest and fees in respect of any outstanding Alternate Currency Incremental Term Loans shall be made in Dollars. Any payments under this Agreement or under any Note which are made later than 12:00 Noon (Local Time) on any Business Day shall be deemed to have been made on the next succeeding Business Day. 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 and under any Note will be made without setoff, counterclaim or other defense. Except as provided -45- 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 net profits of a Lender pursuant to the laws of the jurisdiction in which it is organized or in which the principal office or applicable lending office of such Lender 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 and 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 Lender, upon the written request of such Lender, for taxes imposed on or measured by the net income or net profits of such Lender pursuant to the laws of the jurisdiction in which it is organized or in which the principal office or applicable lending office of such Lender 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 any such jurisdiction as such Lender shall determine are payable by, or withheld from, such Lender in respect of such amounts so paid to or on behalf of such Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Lender pursuant to this sentence. Each Borrower will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts evidencing such payment by such Borrower (or if such receipts are unavailable, such other evidence reasonably satisfactory to the Administrative Agent). Each Borrower agrees to indemnify and hold harmless each Lender, and to reimburse such Lender upon its written request, for the amount of any Taxes so levied or imposed and paid by such Lender. (b) Each Lender that is lending to a US Borrower and 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 such US Borrower and the Administrative Agent on or prior to the Effective Date, or in the case of (x) a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 1.13 or 12.04 (unless the respective Lender was already a Lender to a US Borrower hereunder immediately prior to such assignment or transfer) or (y) an Eligible Transferee that becomes a Lender pursuant to Section 1.14, on the date of such assignment or transfer or on the date such Eligible Transferee becomes a Lender hereunder, as the case may be, (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or successor forms) certifying to such Lender's entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made by such US Borrower under this Agreement and under any Note or (ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or W-8BEN (with respect to a complete exemption under an income tax treaty) (or successor forms) 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-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Lender's -46- entitlement as of such date to a complete exemption from U.S. withholding tax with respect to payments of interest to be made by such US Borrower under this Agreement and under any Note. In addition, each Lender that is lending to a US Borrower 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 Lender will deliver to each such US Borrower and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) 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 Lender to a continued exemption from or reduction in United States withholding tax with respect to payments by such US Borrower under this Agreement and under any Note, or it shall immediately notify each such US Borrower and the Administrative Agent of its inability to deliver any such Form or Certificate in which case such Lender shall not be required to deliver any such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a), but subject to Section 12.04(b) and the immediately succeeding sentence, (x) each US 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 for the account of any Lender that is lending to such US Borrower and 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 to the extent that such Lender has not provided to such US Borrower, the U.S. Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (y) no US Borrower shall be obligated pursuant to Section 4.04(a) to gross-up payments to be made to a Lender in respect of income or similar taxes imposed by the United States if (I) such Lender has not provided to such US Borrower the Internal Revenue Service Forms required to be provided to such US Borrower pursuant to this Section 4.04(b) or (II) in the case of a payment by such US Borrower, other than interest, to a Lender described in clause (ii) above, to the extent that such Forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in the preceding sentence and except as set forth in Section 12.04(b), the respective US Borrower or US Borrowers agree to indemnify each Lender in the manner set forth in Section 4.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes that are effective 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 Lender to make Loans, and the obligation of each Issuing Lender 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 Lenders that has requested same -47- the appropriate A Term Note, B Term Note and/or Revolving Note executed by the appropriate Borrower, and to the Swingline Lender to the extent requested by it 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 certifying that all of the applicable conditions in Sections 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 other Agents and each of the Lenders 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 Agents may reasonably request, (ii) from Pillsbury Winthrop LLP, counsel to the Borrowers, an opinion addressed to the Administrative Agent, the other Agents and each of the Lenders 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 Agents may reasonably request and (iii) from local counsel reasonably satisfactory to the Agents, opinions each of which shall be in form and substance reasonably satisfactory to the Agents 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 Agents may reasonably request. (d) Corporate Documents; Proceedings. (i) On the Initial Borrowing Date, the Administrative Agent shall have received a certificate, dated the Initial Borrowing Date, signed by the president or any vice president of each Credit Party, and attested to by the secretary or any assistant secretary of such Credit Party, in the form of Exhibit F with appropriate insertions, together with copies of the Certificate of Incorporation and By-Laws of such Credit Party and the resolutions of such Credit Party referred to in such certificate, and the foregoing shall be reasonably acceptable to the Agents. (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 Agents and the Required Lenders, 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 Agents 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; Tax Sharing Agreement; Campbell Can Acquisition Documents. 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 management, consulting and similar agreements entered into by Silgan or any of its Subsidiaries (collectively, the -48- "Management Agreements"), (ii) the 9% Senior Subordinated Debenture Indenture (together with all amendments thereto), (iii) the Tax Sharing Agreement and (iv) all Campbell Can Acquisition Documents (other than the Campbell Can Supply Agreement). (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 (and all security interests) 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) US Borrowers/Subsidiaries Guaranty. On the Initial Borrowing Date, each US Credit Party (other than CanCo) shall have duly authorized, executed and delivered the US Borrowers/Subsidiaries Guaranty in the form of Exhibit G (as modified, supplemented or amended from time to time, the "US Borrowers/Subsidiaries Guaranty"), and the US Borrowers/Subsidiaries Guaranty shall be in full force and effect. (h) US Pledge Agreement. On the Initial Borrowing Date, each US Credit Party shall have duly authorized, executed and delivered the US Pledge Agreement in the form of Exhibit H (as modified, supplemented or amended from time to time, the "US Pledge Agreement") and shall have delivered to the Collateral Agent, as pledgee thereunder, all of the Certificated Securities, if any, referred to (and as defined) therein and owned by such US Credit Party, (x) endorsed in blank in the case of promissory notes constituting Certificated Securities and (y) together with executed and undated stock powers in the case of capital stock constituting Certificated Securities, and the US Pledge Agreement shall be in full force and effect. (i) US Security Agreement. On the Initial Borrowing Date, each US Credit Party shall have duly authorized, executed and delivered the US Security Agreement in the form of Exhibit I (as modified, supplemented or amended from time to time the "US Security Agreement") covering all of such US Credit Party's present and future US 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 US 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 or any of 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 filed in any other jurisdiction that name Silgan or any of its -49- Subsidiaries as debtor (none of which shall cover the US 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 US 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 US 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 US Security Agreement have been taken; and the US Security Agreement shall be in full force and effect. (j) US Mortgages; Title Insurance; Surveys, etc. On the Initial Borrowing Date, the Collateral Agent also shall have received: (x) fully executed counterparts of US Mortgages covering such of the Real Property owned or leased by any US Credit Party as shall be designated as a "US Mortgaged Property" on Schedule III, together with evidence that counterparts of the US Mortgages have been delivered to the title insurance company insuring the Lien of the US 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 such US 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 US Mortgaged Property 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 US Mortgages are valid and enforceable first priority mortgage Liens on the respective US 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 and such reinsurance as the Collateral Agent in its reasonable discretion may request; and (z) to the extent reasonably requested by the Collateral Agent, a survey, in form and substance reasonably satisfactory to the Collateral Agent, of each owned US Mortgaged Property, certified by a licensed professional surveyor reasonably satisfactory to the Collateral Agent (or, in the case of a US Mortgaged Property subject to a mortgage under the Existing Credit Agreement, a certificate of an authorized officer of the respective US Credit Party certifying that there -50- have been no material changes to such US Mortgaged Property since the date of the last survey thereto except as noted in the Mortgage Policy or such officer's certificate with respect to such US Mortgaged Property). (k) Adverse Change, etc. (i) Since December 31, 2001, nothing shall have occurred (and neither any Agent nor the Lenders shall have become aware of any facts or conditions not previously known) which any Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, (i) a material adverse effect on (x) the rights or remedies of the Administrative Agent or the Lenders hereunder or under the other Credit Documents or (y) the ability of any Credit Party to perform its obligations to the Administrative Agent or the Lenders hereunder or under the other Credit Documents or (ii) a Material Adverse Effect. (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 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 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 9% Senior Subordinated Debenture Indenture and all Obligations incurred hereunder and under the other Credit Documents constitute "Senior Indebtedness" and "Designated Senior Indebtedness" for purposes of the 9% Senior Subordinated Debenture Indenture. The Agents shall have received evidence (including appropriate legal opinions and a certificate of the chief financial officer or treasurer 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 any Agent or the Required Lenders shall determine could reasonably be expected to have a Material Adverse Effect. (m) Fees, etc. On the Initial Borrowing Date, each Borrower shall have paid to the Administrative Agent, the other Agents and the Lenders all costs, fees and expenses -51- (including, without limitation, reasonable legal fees and expenses) payable to the Administrative Agent, the other Agents and the Lenders to the extent then due. (n) Financial Projections; Pro Forma Balance Sheet. On or prior to the Initial Borrowing Date, there shall have been delivered to each Agent (i) detailed projected financial statements for Silgan and its Subsidiaries for the period through December 31, 2008 (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) a pro forma consolidated balance sheet as of March 31, 2002 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 Agents and the Required Lenders. 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 prepared in good faith based upon reasonable assumptions, 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. (o) 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. 5.02 Conditions to All Credit Events. The obligation of each Lender to make any Loans (including, without limitation, Loans made on the Initial Borrowing Date), and of each Issuing Lender 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. At the time of each such Credit Event and also immediately after giving effect thereto, there shall exist no Default or Event of Default. (b) Representations and Warranties. At the time of each such Credit Event and also immediately after giving effect thereto, 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 -52- the requirements of Section 1.03(a). Prior to the making of any Swingline Loan, the Swingline Lender 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 the respective Issuing Lender shall have received a Letter of Credit request meeting the requirements of Section 2.03. 5.03 No Excess Cash. The obligation of each Lender with a Revolving Loan Commitment to make Revolving Loans (other than pursuant to a Mandatory Borrowing) and the obligation of the Swingline Lender to make Swingline Loans, in each case shall be subject to the satisfaction of the condition that at the time of each such Credit Event and immediately after giving effect thereto, the sum of (i) the aggregate amount of all cash and Cash Equivalents held by Silgan and its Domestic Subsidiaries at such time plus (ii) the Foreign Intercompany Loan Amount at such time (in each case after giving effect to the incurrence of such Credit Event and the application of proceeds therefrom and any other cash or Cash Equivalents on hand (to the extent such proceeds and/or other cash or Cash Equivalents are actually utilized by Silgan and/or any Subsidiary of Silgan on the respective date of incurrence of the respective Credit Event for a permitted purpose other than an investment in Cash Equivalents)) shall not exceed $100,000,000. 5.04 Revolving Borrowers etc. At any time that Silgan desires that an additional Wholly-Owned Domestic 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) to the extent requested by any Lender or the Swingline Lender, 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. 5.05 Incremental Term Loans. Prior to the incurrence of any Incremental Term Loans, Silgan shall have satisfied (or caused to be satisfied) all of the applicable conditions set forth in Section 1.14. 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 the Administrative Agent and each of the Lenders that all the applicable conditions specified in this Section 5 with respect to such Credit Event are satisfied as of that time. All of the Notes, -53- 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 applicable Notice Office for the account of each of the Lenders and, except for the Notes, in sufficient counterparts in the case of Credit Documents or copies for each of the Lenders and shall be reasonably satisfactory in form and substance to the Required Lenders. Section 6. Representations Warranties and Agreements. In order to induce the Lenders 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 as to itself and its Subsidiaries, in each case after giving effect to the transactions to occur on the Initial Borrowing Date, 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): 6.01 Organizational Status. Each Credit Party and each of its Subsidiaries (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company, as the case may be, 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, partnership or limited liability company, as the case may be, 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, either individually or in the aggregate, have a Material Adverse Effect. 6.02 Power and Authority. Each Credit Party has the corporate, partnership or limited liability company, as the case may be, 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, partnership or limited liability company, as the case may be, 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 -54- 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 material agreement, contract or instrument to which such Credit Party or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or (iii) will violate any provision of the certificate of incorporation or by-laws (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 Security Documents. (a) The security interests created in favor of the Collateral Agent for the benefit of the Secured Creditors under the US Pledge Agreement constitute first priority perfected security interests in the US Pledge Agreement Collateral referred to therein 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 US Pledge Agreement. (b) The US 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 US 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 (other than Permitted 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 US Security Agreement. At the time of the granting of any security interests pursuant to the US Security Agreement, the respective US Credit Party thereunder shall have good and marketable title to all US Security Agreement Collateral referred to therein free and clear of all Liens except those described above in this Section 6.05. (c) The US Mortgages create a valid and enforceable perfected security interest in and Lien on all of the respective US Mortgaged Properties, in favor of the Collateral Agent for the benefit of the Secured Creditors, superior to and prior to the rights and Liens (other than Permitted 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 US Mortgages, except for the filings and recordings of the US Mortgages (and related UCC fixture filings). At the time of the granting of any US Mortgage, the respective US Credit Party shall have good and marketable title (subject to the respective Permitted Encumbrances) to, or a valid Leasehold interest, as -55- applicable, to the US 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 US Credit Party (all as indicated therein) on the Initial Borrowing Date. (d) The Foreign Security Documents, after the execution and delivery thereof, will create in favor of the Collateral Agent for the benefit of the respective Secured Creditors, a valid and enforceable perfected security interest in and Lien on all of the Foreign Collateral specified therein, superior to and prior to the rights and Liens of all third Persons (other than Permitted Liens) and subject to no other Liens other than Permitted Liens. The respective Foreign Credit Party will have good and marketable title to, or a valid Leasehold interest in, as applicable, the respective Foreign Collateral, free and clear of all Liens, except those described in the preceding sentence. (e) 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 referred to therein, a valid and enforceable perfected security interest in and Lien on all of the Additional Collateral covered thereby, superior to and prior to the rights and Liens of all third Persons (other than Permitted Liens) and subject to no other Liens other than Permitted Liens. The respective Credit Party will have good and marketable title to, or a valid Leasehold interest in, as applicable, the respective Additional Collateral, free and clear of all Liens, except those described in the preceding sentence. 6.06 Insurance. Schedule IV sets forth, as of the Initial Borrowing Date, a listing of all insurance maintained by each of the Borrowers and its Subsidiaries, with the amounts insured set forth therein. 6.07 Financial Statements; Financial Condition; etc. (a) The statements of consolidated and consolidating financial condition of Silgan and its Subsidiaries at December 31, 2001 and March 31, 2002 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, 2001, have been certified by nationally recognized independent certified public accountants satisfactory to the Agents and (y) in the case of all such financial statements, have heretofore been furnished to the Lenders), 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 accounting principles generally accepted in the United States and practices consistently applied. Since December 31, 2001, nothing has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect. (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 -56- 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(n) 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 have a Material Adverse Effect. 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 Lenders 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 A Term Loans and B 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. All proceeds of Incremental Term Loans incurred by Silgan shall be used (i) to finance Permitted Acquisitions (and to pay the fees and expenses related thereto) and to refinance any Indebtedness assumed as part of any such Permitted Acquisitions (and to pay all accrued and unpaid interest thereon, any prepayment premium associated therewith and the fees and expenses related thereto), (ii) to finance Permitted Subordinated Debt Repurchases (and to pay all accrued and unpaid interest thereon, any prepayment premium associated therewith and the fees and expenses related thereto) and (iii) to prepay outstanding Revolving Loans. All proceeds of Incremental Term Loans incurred by any Foreign Incremental Term Loan Borrower shall be used to finance Permitted Acquisitions (and to pay the fees and expenses related thereto) made by any member of the Related Foreign Company Group of such Foreign Incremental Term Loan Borrower and to refinance any Indebtedness assumed as part of any such Permitted Acquisitions (and to pay all accrued and unpaid interest thereon, any prepayment premium associated therewith and the fees and expenses related thereto). (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 -57- 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 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 timely filed with the appropriate taxing authority all federal tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all income taxes payable by it which have become due pursuant to such tax returns and all other taxes and assessments payable by it which have become due, other than those not yet delinquent and except for those contested in good faith 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 other material income taxes, domestic and foreign, applicable for all prior fiscal years and for the current fiscal year to the date hereof. 6.12 Compliance with ERISA. (a) 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 -58- multiemployer plan (as defined in Section 4001(a)(3) of ERISA) shall be to the best knowledge of the Borrowers. (b) Each Foreign Pension Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities. All material contributions required to be made with respect to a Foreign Pension Plan have been timely made. Neither Silgan nor any of its Subsidiaries has incurred any material obligation in connection with the termination of or withdrawal from any Foreign Pension Plan. The present value of the accrued benefit liabilities (whether or not vested) under all Foreign Pension Plans, determined as of the end of Silgan's most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plans allocable to such benefit liabilities by an amount which is material in relation to Silgan and its Subsidiaries taken as a whole. 6.13 Subordination. The subordination provisions contained in all notes, debentures, indentures and other instruments entered into or issued in respect of any Permitted Subordinated Indebtedness 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 sets forth, as of the Initial Borrowing Date, (i) each of the Subsidiaries of Silgan, (ii) the legal name of each such Subsidiary, (iii) the jurisdiction of organization and the organizational identification number (if any) of each such Subsidiary and (iv) 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, either individually or in the aggregate, have a Material Adverse Effect. (b) Each Borrower and each of its Subsidiaries has complied with all applicable federal, state, provincial, foreign 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 material 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 -59- 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 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 an 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. 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, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against any Borrower or any of its Subsidiaries or, to the best knowledge of the Borrowers, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements is so pending against any Borrower or any of its Subsidiaries or, to the best knowledge of the Borrowers, threatened against any of them 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. 6.19 Patents, Licenses, Franchises and Formulas. Each Borrower and each of its Subsidiaries owns all the patents, trademarks, permits, service marks, trade names, copyrights, domain names, 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, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. -60- Section 7. Affirmative Covenants. Each Borrower covenants and agrees 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 the Administrative Agent (who will then promptly furnish a copy of same to each Lender): (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 and Unrestricted Subsidiaries as at the end of such quarterly accounting period and the related consolidated and consolidating statements of income and cash flow for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, in each case setting forth comparative figures for the related periods in the prior fiscal year, all of which shall be certified by the chief financial officer, treasurer or controller of Silgan, subject to normal year-end audit adjustments. (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 and Unrestricted 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 Administrative Agent, and in the case of the consolidating financial statements, by the chief financial officer, treasurer or controller of Silgan, in each case together with a report of such accounting firm stating that in the course of its regular audit of the financial statements of Silgan and its Subsidiaries and Unrestricted 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 75 days after the first day of each fiscal year of Silgan, (i) a budget in form and scope reasonably satisfactory to the Administrative Agent (including budgeted statements of income and sources and uses of cash and balance sheets) prepared by Silgan for each of the twelve months beginning on the first day of such fiscal year accompanied by the statement of the chief financial officer, treasurer or controller of Silgan to the effect that, to the best of such officer's knowledge, the budget is a reasonable estimate for the period covered thereby and (ii) a forecast of operations and sources and uses of cash for the five-year period beginning on the first day of such fiscal year, setting forth the assumptions made in preparing such forecast and -61- accompanied by the statement of the chief financial officer, treasurer or controller of Silgan to the effect that, to the best of such officer's knowledge, the forecast is a reasonable estimate for the period covered thereby. (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, (A) 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(f), 4.02(g), 4.02(h), 4.02(j), 8.03(iii), 8.03(iv), 8.04(xiii), 8.05(xiv), 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, the Consolidated Tangible Assets and the Retained Excess Cash Flow Amount at the end of such fiscal quarter, (III) the Senior Leverage Ratio at the end of such fiscal quarter, and (IV) the Applicable Margin 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 8.01(xx), 8.02(v), 8.02(vi), 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, the Consolidated Tangible Assets and the Retained Excess Cash Flow Amount at the end of such fiscal year, (V) the Senior Leverage Ratio at the end of such fiscal year, and (VI) the Applicable Margin and the Applicable Commitment Commission Percentage at such time and (B) no changes are required to be made to any of Annexes C and F of the US Security Agreement or Annexes A through F, inclusive, and Annex H, in each case of the US Pledge Agreement, in each case so as to make the information set forth therein accurate and complete as of the date of such certificate, or to the extent that such information is no longer accurate and complete as of such date, list in reasonable detail all information necessary to make all such Annexes accurate and complete (at which time such Annexes shall be deemed modified to reflect such information). (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 have a Material Adverse Effect or (y) with respect to any Credit Document and (iii) any other event (including any such event relating to environmental matters) which is reasonably likely to have a Material Adverse Effect. -62- (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 9% Senior Subordinated Debentures or any Additional Permitted Subordinated Indebtedness. (h) CanCo Monthly Reports. So long as the CanCo Restrictions are in effect, within 30 days after the end of each fiscal month of CanCo, (i) the unaudited balance sheet of CanCo as at the end of such fiscal month which shall be certified by the chief financial officer, treasurer or controller of Silgan or CanCo or by the president or vice-president of finance of CanCo and (ii) a certificate of the chief financial officer, treasurer or controller of Silgan or CanCo or of the president or vice-president of finance of CanCo setting forth (in reasonable detail) (A) the calculations required to establish the CanCo Permitted Debt Amount and the aggregate outstanding amount of all CanCo Included Debt as at the end of such fiscal month and (B) the aggregate outstanding amount of all Revolving Loans and Swingline Loans made to CanCo and the aggregate outstanding amount of all Letter of Credit Outstandings in respect of Letters of Credit issued for the account of CanCo as at the end of the Business Day immediately preceding the date of such certificate. (i) Other Information. From time to time, such other information or documents (financial or otherwise) as the Administrative Agent, any other Agent or the Required Lenders 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 accounting principles generally accepted in the United States (or, in the case of a Foreign Subsidiary of Silgan, in the jurisdiction of organization of such Foreign Subsidiary) 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 other Agent or any Lender 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 other Agent or such Lender may request upon reasonable prior notice. In connection with the foregoing, the Administrative Agent, the other Agents and the Lenders agree to keep any information delivered or made available by the Borrowers which the Borrowers clearly indicate to be confidential information confidential in accordance with Section 12.15. 7.03 Maintenance of Property; Insurance. (a) 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 -63- financially sound and reputable insurance companies insurance on all of its property and against at least such risks and in at least such amounts as (in each case) is consistent with prudent risk management and industry practice and (iii) furnish to the Administrative Agent and each Lender, upon written request, full information as to the insurance carried. (b) To the extent that insurance is required to be maintained in accordance with clause (a) above in this Section 7.03, each Borrower will, and will cause each of the other Credit Parties to, at all times keep its property insured in favor of the Collateral Agent, and all policies or certificates (or certified copies thereof) with respect to such insurance (and any other insurance maintained by such Borrower and/or such other Credit Parties) (i) shall be endorsed to the Collateral Agent's satisfaction for the benefit of the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss payee and/or additional insured), (ii) shall state that such insurance policies shall not be canceled without at least 30 days' prior written notice thereof by the respective insurer to the Collateral Agent, and (iii) shall be deposited with the Collateral Agent. 7.04 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, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; 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, partnership or limited liability company, as the case may be, in any jurisdiction where such withdrawal, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect 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, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 7.06 ERISA. (a) 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 Lenders 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 -64- 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, Silgan will (in each such case) deliver to the Administrative Agent a certificate of the chief financial officer or treasurer of Silgan 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. Silgan will deliver to the Administrative Agent, upon request by the Administrative Agent, a complete copy of the annual report (Form 5500) of each Plan that is not (i) a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) or (ii) a Plan which is no longer maintained or contributed to by any Borrower, any Subsidiary of any Borrower or an ERISA Affiliate, in each case which is required to be filed with the Internal Revenue Service. Copies of any other notices required to be delivered to the Lenders 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. (b) As soon as possible and in any event within 30 days after any Borrower or any Subsidiary of any Borrower knows or has reason to know of the occurrence of any of the following events (to the extent that any such events, either individually or in the aggregate, could reasonably be expected to be material to Silgan and its Subsidiaries taken as a whole), Silgan will deliver to the Administrative Agent, a certificate of the chief financial officer or treasurer of Silgan setting forth the full details as to such occurrence and the action, if any, that Silgan or such Subsidiary is required or proposes to take, together with any notices required or proposed to be given to or filed with or by Silgan, such Subsidiary or a Foreign Pension Plan participant with respect thereto: that any contribution required to be made with respect to a Foreign Pension Plan has not been timely made; or that Silgan or any Subsidiary of Silgan may incur any liability pursuant to any Foreign Pension Plan. In addition to any certificates or notices delivered to the Administrative Agent pursuant to the first sentence hereof, copies of any material notices received by Silgan or any Subsidiary of Silgan with respect to any Foreign Pension Plan shall be delivered to the Administrative Agent no later than 30 days after the date such notice has been received by Silgan or such Subsidiary, as applicable. 7.07 End of Fiscal Years; Fiscal Quarters. Each Borrower will cause (i) each of its, and each of its Domestic Subsidiaries', fiscal years to end on December 31 and (ii) each of its, and each of its Domestic 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 have a -65- Material Adverse Effect 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. (i) Each of the Borrowers will, and will cause each of the US Subsidiary Guarantors and Related Foreign Company Guarantors to, grant to the Collateral Agent, for the benefit of the Secured Creditors described in the Security Documents to which such Credit Party is a party, security interests and Mortgages in such assets and properties of such Credit Party as are not covered by the original Security Documents to which such Credit Party is a party, or as may be requested from time to time by the Required Lenders (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 Lenders) 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 Permitted Liens. The Additional Security Documents or other instruments related thereto shall have been duly recorded or filed in such manner and in such places as are required by law to establish, perfect, preserve and protect the Liens, in favor of the Collateral Agent for the benefit of the respective 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, (x) 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 and (y) unless otherwise permitted (or not restricted) by the applicable CanCo Restrictions then in effect, any Additional Security Documents entered into by CanCo shall only secure CanCo's direct obligations under the Credit Documents to which it is a party. (b) Each of the Borrowers will, and will cause each of the other Credit Parties 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, landlord-lender agreements and other assurances or instruments and take such further steps relating to the Collateral covered by any of the 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 above 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 Administrative Agent or the Required Lenders. (d) At such time as the applicable CanCo Restrictions cease to be effective, (i) Silgan will cause CanCo Holding to pledge and deliver to the Collateral Agent pursuant to the US Pledge Agreement all of the capital stock of CanCo, (ii) CanCo will execute and deliver to the Administrative Agent a counterpart of the US Borrowers/Subsidiaries Guaranty and (iii) -66- CanCo will deliver to the Administrative Agent such officer's certificates, board of directors resolutions and opinions of counsel as may be reasonably requested by, and in form, scope and substance reasonably satisfactory to, the Administrative Agent. 7.10 Foreign Subsidiaries Security. (a) If following a change in the relevant sections of the Code or the regulations, rules, revenue rulings, notices or other official pronouncements issued or promulgated thereunder, counsel for Silgan reasonably acceptable to the Administrative Agent does not within 30 days after a request from the Administrative Agent or the Required Lenders deliver a written opinion or other evidence, in form and substance reasonably satisfactory to the Administrative Agent, with respect to any Foreign Subsidiary of Silgan which has not already had all of its stock pledged pursuant to the US Pledge Agreement that (i) a pledge 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 to secure the Obligations of the US Credit Parties, (ii) the entering into by such Foreign Subsidiary of a security agreement in substantially the form of the US Security Agreement to secure the Obligations of the US Borrowers and of such Foreign Subsidiary under the US Borrowers/Subsidiaries Guaranty, (iii) the entering into by such Foreign Subsidiary of a pledge agreement substantially in the form of the US Pledge Agreement to secure the Obligations of the US Borrowers and of such Foreign Subsidiary under the US Borrowers/Subsidiaries Guaranty and (iv) the entering into by such Foreign Subsidiary of a guaranty in substantially the form of the US Borrowers/Subsidiaries Guaranty guaranteeing the Obligations of the US Borrowers, in any such case could reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S. Federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary's United States parent for Federal income tax purposes, then (A) in the case of a failure to deliver the evidence described in clause (i) above, that portion of such Foreign Subsidiary's outstanding capital stock so issued by such Foreign Subsidiary not theretofore pledged pursuant to the US Pledge Agreement to secure the Obligations of the US Credit Parties shall be pledged to the Collateral Agent for the benefit of the Secured Creditors pursuant to the US Pledge Agreement (or another pledge agreement in substantially similar form, if needed), (B) in the case of a failure to deliver the evidence described in clause (ii) or (iii) above, such Foreign Subsidiary (only to the extent that same is a Foreign Credit Party) shall execute and deliver the US Security Agreement (or another security agreement in substantially similar form, if needed) and the US Pledge Agreement (or another pledge agreement in substantially similar form, if needed), as the case may be, granting to the Collateral Agent for the benefit of the Secured Creditors a security interest in all of such Foreign Subsidiary's assets or the capital stock and promissory notes owned by such Foreign Subsidiary, as the case may be, and securing the Obligations of the US Borrowers and, in the event the US Borrowers/Subsidiaries Guaranty shall have been executed by such Foreign Subsidiary, the obligations of such Foreign Subsidiary thereunder, and (C) in the case of a failure to deliver the evidence described in clause (iv) above, such Foreign Subsidiary (to the extent that same is a Foreign Credit Party) shall execute and deliver the US Borrowers/Subsidiaries Guaranty (or another guaranty in substantially similar form, if needed), guaranteeing the Obligations of the US Borrowers, in each case to the extent that the entering into of the US Security Agreement, the US Pledge Agreement or the US Borrowers/Subsidiaries Guaranty (or substantially similar documents) is permitted by the laws of the respective foreign jurisdiction (after complying with any "whitewash" or other applicable proceedings) and with all documents delivered pursuant to this Section 7.10 to be in form and substance reasonably satisfactory to the Administrative Agent. -67- (b) The Lenders 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 US 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 other Agent or the Required Lenders at any time after the Initial Borrowing Date determine in its or their good faith discretion (as a result of events or circumstances affecting the Collateral Agent or the Required Lenders after the Initial Borrowing 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 other Agent or the Required Lenders, 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 Agents. 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. 7.13 CanCo Capital Contributions. If, at any time that CanCo has any Revolving Loans or Swingline Loans outstanding, CanCo makes or pays any Dividend to Silgan or any of its Subsidiaries, then immediately after Silgan or any of its Subsidiaries receives any such Dividend from CanCo, Silgan will, and will cause its respective Subsidiaries to, immediately contribute the full amount of such Dividend to CanCo as an equity contribution, and CanCo shall use the full amount of any such cash capital contribution to make a payment pursuant to (and to the extent required by) Section 4.02(p). 7.14 Use of Proceeds. Each Borrower will use the proceeds of the Loans incurred by it only as provided in Section 6.10. 7.15 Maintenance of Corporate Separateness. Each Borrower will cause each of its Unrestricted Subsidiaries to satisfy customary corporate formalities, including, as applicable, the holding of regular board of directors' and shareholders' meetings or action by directors or shareholders without a meeting and the maintenance of corporate offices and records. No Borrower nor any of its Subsidiaries shall make any payment to a creditor of any Unrestricted Subsidiary in respect of any liability of any Unrestricted Subsidiary except pursuant to any guaranty given by such Borrower or Subsidiary to such creditor pursuant to Section 8.04(xiii), and no bank account or similar account of any Unrestricted Subsidiary shall be commingled with any bank account or similar account of Silgan or any of its Subsidiaries. Any financial statements distributed to any creditors of any Unrestricted Subsidiary shall clearly establish or indicate the corporate separateness of such Unrestricted Subsidiary from Silgan and its -68- Subsidiaries. Finally, neither Silgan nor any of its Subsidiaries shall take any action, or conduct its affairs in a manner, which is likely to result in the corporate existence of Silgan or any of its Subsidiaries or Unrestricted Subsidiaries being ignored, or in the assets and liabilities of Silgan or any of its Subsidiaries being substantively consolidated with those of any other such Person or any Unrestricted Subsidiary in a bankruptcy, reorganization or other insolvency proceeding. Section 8. Negative Covenants. Each Borrower covenants and agrees as to itself and its Subsidiaries that on and after the Effective Date and until the Total Commitment and all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings, together with interest, Fees and all other Obligations incurred hereunder and thereunder are paid in full: 8.01 Liens. None of the Borrowers will, nor will it permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible) of such Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to any Borrower or any of its Subsidiaries), or assign any right to receive income or permit the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute; provided that the provisions of this Section 8.01 shall not prevent the creation, incurrence, assumption or existence of 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 Initial Borrowing 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 plus, in the case of a revolving credit facility, any unutilized commitments thereunder at such time (but only to the extent that such commitments were in effect on the Initial Borrowing Date), (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; -69- (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) 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 the fair market value (as determined in good faith by management of Silgan) of non-cash collateral so deposited shall at no time exceed $10,000,000; (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 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 $50,000,000 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 and any such Liens do not extend to any other assets of any Borrower or any of its Subsidiaries, plus any renewals, replacements and extensions of any such Liens, provided that (x) the aggregate principal amount of the Indebtedness, if any, -70- secured by such Liens does not increase from that amount outstanding at the time of any such renewal, replacement or extension plus (I) in the case of a revolving credit facility, any unutilized commitments thereunder at such time (but only to the extent that such commitments were in effect at the time of such acquisition and were not created in contemplation thereof) and (II) 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 Foreign Subsidiaries that are organized under the laws of Canada (or any province thereof) to secure the obligations under the Canadian Credit Facility so long as such Liens do not extend to any other assets of any Borrower or any of its other Subsidiaries; (xv) Liens arising out of judgments or awards (including deposits to secure appeal bonds) 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 (as determined in good faith by management of Silgan) of any other 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; (xvii) so long as the applicable CanCo Restrictions are in effect, Liens on the capital stock of CanCo in favor of Campbell Soup solely to secure the respective Credit Parties' obligations to Campbell Soup under the Campbell Can Acquisition Documents; (xviii) so long as the applicable CanCo Restrictions are in effect, Liens on the capital stock and assets of CanCo created by virtue of Campbell Soup's option to purchase all of CanCo's capital stock or assets as set forth in the Campbell Can Acquisition Documents; (xix) Liens placed upon the accounts receivable and inventory of a Foreign Subsidiary of Silgan to secure such Foreign Subsidiary's Indebtedness incurred pursuant to Section 8.04(xviii); provided, however, to the extent that such Foreign Subsidiary is a Foreign Credit Party, the Collateral Agent shall retain a second Lien on such accounts receivable and inventory pursuant to intercreditor arrangements reasonably acceptable to the Administrative Agent; and -71- (xx) Liens (other than in respect of the Receivables Subsidiary and, so long as the CanCo Restrictions are in effect, CanCo) not otherwise permitted by the provisions of this Section 8.01 to the extent securing liabilities not in excess of $25,000,000 in the aggregate; provided, however, that if such Liens are consensual Liens, those Liens shall not encumber properties or assets with an aggregate fair market value (as determined in good faith by management of Silgan) in excess of $35,000,000. 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 Lenders), 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 $1,000,000 per sale or series of related sales; (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 (v) no Default or Event of Default then exists or would result therefrom, (w) 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), (x) the total consideration received by such Subsidiary is cash and is paid at the time of the closing of such sale, (y) the Net Sale Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section 4.02(j) and (z) the aggregate amount of all proceeds received from all sale and leaseback transactions pursuant to this clause (v) shall not exceed the greater of (I) $150,000,000 and (II) 10% of the Consolidated Tangible Assets at such time (based on the most recently delivered financial statements pursuant to Section 7.01); (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 of Silgan which is a Credit Party unless all of such capital stock of such Subsidiary is sold), so long -72- 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 (although Containers and Manufacturing may sell their seaboard containers facility and related assets located at 1951 West 21st Street, Broadview, Illinois for consideration of less than 80% cash so long as the aggregate purchase price for such sale does not exceed $3,500,000), (y) the Net Sale Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section 4.02(f) and (z) the aggregate amount of all proceeds received from all assets sold pursuant to this clause (vi) shall not exceed $150,000,000; (vii) Investments may be made to the extent permitted by Section 8.05; (viii) (A) any Domestic Subsidiary of Silgan that is a US Credit Party may merge with and into any other Domestic Subsidiary of Silgan that is a US Credit Party, and (B) any Foreign Subsidiary of Silgan that is a Foreign Credit Party may merge with and into any other Foreign Subsidiary of Silgan that is a Foreign Credit Party, in each case so long as (i) if only one such Subsidiary is a Wholly-Owned Subsidiary of Silgan, such Wholly-Owned Subsidiary is the surviving corporation of such merger, (ii) if only one such Subsidiary also is a Borrower, such 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 respective Security Documents in the assets of the Subsidiary which is being merged out of existence shall remain in full force and effect and perfected and (iv) if the Subsidiary that is being merged 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) (A) any Domestic Subsidiary of Silgan (other than a US Credit Party and the Receivables Subsidiary) may merge with and into any other Domestic Subsidiary of Silgan (other than the Receivables Subsidiary), and (B) any Foreign Subsidiary of Silgan (other than a Foreign Credit Party) may merge with and into any other Foreign Subsidiary of Silgan, in each case so long as (i) in the case of any merger involving a Credit Party, the Credit Party is the surviving corporation of such merger, (ii) in the case of any merger involving a Borrower, such 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 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); -73- (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 or any manufacturing facility of such Person so long as the acquisition of any such manufacturing facility does not constitute a Capital Expenditure) 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 (and the surviving entity must remain or become) a Wholly-Owned Subsidiary of Silgan, (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 (xix) and (vi) at least five 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 $10,000,000, Silgan shall have delivered to the Administrative Agent a certificate of its chief financial officer or treasurer setting forth (in reasonable detail) the recalculation of the Total 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 Lenders 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"); (xi) Subsidiaries of Silgan may from time to time sell individual accounts receivable (other than as part of the Accounts Receivable Facility) so long as (i) no Default or Event of Default then exists or would result therefrom, (ii) each such sale is for cash which is paid at the time of such sale and (iii) no more than $50,000,000 of accounts receivable in the aggregate are sold pursuant to this clause (xi) in any fiscal year of Silgan; (xii) such Borrower and its Subsidiaries (other than CanCo and its Subsidiaries) may sell inventory, materials, supplies, equipment and spare parts to CanCo and its Subsidiaries, and CanCo may sell such items to other Credit Parties, in each case, so long as all such sales are on an arm's-length basis and are for cash (although in the case of the sale of materials, supplies, equipment or spare parts, the consideration may be in the form of the substantially simultaneous exchange for materials, supplies, equipment or spare parts, as applicable, of equivalent value); and (xiii) any Subsidiary of Silgan that conducts no operations, has no assets (other than immaterial assets) and has no liabilities (other than immaterial liabilities) may be dissolved or liquidated. Notwithstanding anything to the contrary contained above in this Section 8.02 or elsewhere in this Agreement, so long as the CanCo Restrictions are in effect, (x) in no event shall -74- CanCo or any of its Subsidiaries be permitted to engage in any transaction otherwise permitted by clauses (viii), (ix) and (x) of this Section 8.02, and (y) in no event shall the capital stock of CanCo or any of its Subsidiaries be sold directly, or through the sale of any parent company of CanCo, other than as expressly permitted by Section 12.20(b) (which sale shall be in addition to those already permitted under clause (vi) of this Section 8.02). To the extent any Collateral is sold as permitted by this Section 8.02 or the Required Lenders 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 respective Security Documents and the Administrative Agent and Collateral Agent shall be authorized to take any action deemed appropriate to effect the foregoing. 8.03 Dividends. None of the Borrowers will, nor will it permit any of its Subsidiaries to, 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, partners or members generally so long as (x) the respective 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 Silgan 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 or to pay any cash Dividends on its Qualified Preferred 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) $16,000,000 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 aggregate amount of Dividends paid pursuant to clause (iv) of this Section 8.03 in excess of $50,000,000; and (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) $50,000,000 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 -75- aggregate amount of cash Dividends paid pursuant to clause (iii) of this Section 8.03 in excess of $16,000,000 in any fiscal year of Silgan plus (3) the Net Equity Proceeds Amount at such time. 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 9% Senior Subordinated Debentures and the other Indebtedness specifically permitted under clauses (iv), (vi) and (xiv) of this Section 8.04) 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 $30,000,000 at any time outstanding; (v) Indebtedness of Silgan not to exceed $500,000,000 (as reduced by any repayments of principal thereof) in aggregate principal amount evidenced by the 9% Senior Subordinated Debentures; (vi) Indebtedness of CanCo under the Campbell Seller Note in an aggregate principal amount not to exceed $3,000,000 (as reduced by any repayments of principal thereof); (vii) intercompany Indebtedness among Silgan and its Subsidiaries to the extent permitted by Sections 8.05(vii), (viii), (ix) and (xiv); (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 ("Additional Permitted Subordinated Indebtedness") the Net Debt Proceeds of which are used solely to finance a Permitted Acquisition (and to pay the fees and expenses related thereto) and to refinance any Indebtedness assumed as part of such Permitted Acquisition (including to pay for all -76- accrued and unpaid interest thereon, any prepayment premium associated therewith and all costs and expenses incurred in connection therewith), to repay outstanding Term Loans pursuant to Section 4.02(h) or within 60 days after the incurrence thereof to Refinance outstanding Permitted Subordinated Indebtedness theretofore issued by Silgan (including to pay for all accrued and unpaid interest thereon, any prepayment premium associated therewith and all costs and expenses incurred in connection therewith) pursuant to a Permitted Subordinated Debt Repurchase, so long as (i) no Default or Event of Default then exists or would result therefrom, (ii) at least five Business Days prior to the issuance of any such Additional Permitted Subordinated Indebtedness, Silgan shall have delivered to the Administrative Agent a certificate of its chief financial officer or treasurer detailing the intended use of the proceeds from such Additional Permitted Subordinated Indebtedness and setting forth (in reasonable detail) the recalculation of the Interest Coverage Ratio and the Total Leverage Ratio on a Pro Forma Basis for the Test Period then most recently ended prior to the date of such issuance for which financial statements have been delivered to the Lenders under this Agreement, and such recalculation shall show that Silgan would have been in compliance with Sections 8.08 and 8.09 as of the last day of such Test Period, (iii) all of the terms and conditions of such Additional Permitted Subordinated Indebtedness (other than interest rates, but including, without limitation, subordination provisions, covenants (other than the restricted payments covenant), events of default, remedies, amortizations and maturities) are no less favorable in any material respect to the Lenders (although the subordination provisions contained in any such Additional Permitted Subordinated Indebtedness shall be no less favorable in any respect to the Lenders) or materially more restrictive on Silgan and its Subsidiaries than those terms and conditions contained in the 9% Senior Subordinated Debenture Documents, (iv) no more than $250,000,000 in aggregate principal amount of Additional Permitted Subordinated Indebtedness may be issued to finance Permitted Acquisitions (and to pay the fees and expenses related thereto) and to refinance any Indebtedness assumed as part of Permitted Acquisitions, and (v) in the case of Additional Permitted Subordinated Indebtedness the Net Debt Proceeds of which are to be used to Refinance then outstanding Permitted Subordinated Indebtedness, until such proceeds are so used to effect such Refinancing, 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 and (ii) all of the terms and conditions of such Indebtedness are reasonably acceptable to the Administrative Agent; (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, Unrestricted Subsidiaries and Subsidiaries of Silgan which are not US Credit Parties (other than the Receivables Subsidiary) in an aggregate amount not to exceed at -77- any time outstanding, when added to the aggregate amount of Investments made pursuant to Section 8.05(xiv), an amount equal to the sum of (I) $175,000,000 and (II) the Permitted Additional Investment Basket Amount at such time (determined without regard to any write-downs or write-offs of such Investments); provided, however, the aggregate amount of all guaranties (and including all payments made thereunder) made pursuant to this Section 8.04(xiii) for the benefit of Unrestricted Subsidiaries, when added to the aggregate amount of all Investments made pursuant to Section 8.05(xiv) in Unrestricted Subsidiaries, shall not exceed $75,000,000; (xiv) Indebtedness of Canadian Holdco and/or any of its Foreign Subsidiaries that are organized under the laws of Canada (or any province thereof) under the Canadian Credit Facility so long as the aggregate outstanding principal amount of all term loans, revolving loans, letters of credit and/or bankers acceptances thereunder does not exceed $50,000,000, 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 accounting principles generally accepted in the United States; (xvii) an unsecured guaranty by Silgan, Containers, Containers Operating, CanCo Holding and CanCo of each other's obligations to Campbell Soup under the Campbell Can Acquisition Documents, although such guaranty may be secured by the capital stock of CanCo; (xviii) Indebtedness of any Foreign Subsidiary of Silgan (other than Canadian Holdco or any of its Subsidiaries) under lines of credit extended by third Persons to such Foreign Subsidiary the proceeds of which Indebtedness are used for such Foreign Subsidiary's working capital and Capital Expenditure purposes, provided that the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (xviii) shall not exceed $30,000,000 at any time outstanding; and (xix) additional Indebtedness of Silgan and its Subsidiaries (other than the Receivables Subsidiary) not otherwise permitted hereunder not exceeding $50,000,000 in aggregate principal amount at any time outstanding. Notwithstanding anything to the contrary contained above in this Section 8.04, so long as the CanCo Restrictions are in effect, (x) in no event shall CanCo or any of its Subsidiaries incur any Indebtedness under clauses (xi), (xiii) and (xix) of this Section 8.04 and (y) in no event shall Silgan or any of its Subsidiaries guaranty any obligations of CanCo or any of its Subsidiaries to Campbell Soup or any Subsidiary thereof other than as expressly permitted by clause (xvii) of this Section 8.04. -78- 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 or become liable for the purchase or sale of any currency at a future date pursuant to a futures contract or similar agreement (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; (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 $10,000,000 at any one time outstanding (determined without regard to any write-downs or write-offs thereof); (iv) such Borrower and 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 Initial Borrowing Date as set forth on Schedule VIII, provided that any additional Investments made with respect thereto shall be permitted only if permitted under the other provisions of this Section 8.05; (vii) (A) the US Credit Parties may make Intercompany Loans to one another and (B) the Foreign Credit Parties may make Intercompany Loans to one another and to the US Credit Parties so long as (x) in the case of any Intercompany Loans made to a US Credit Party by a Foreign Credit Party, such Intercompany Loans are subordinated to the Obligations of the US Credit Parties on a basis reasonably satisfactory to the Administrative Agent (which, in any event, shall provide that no payments shall be made thereunder upon the occurrence and during the continuance of any Default or Event of Default) and (y) each Intercompany Loan made pursuant to this clause (vii) is evidenced by an Intercompany Note which shall be pledged to the Collateral Agent pursuant to the applicable Security Document; (viii) (A) the Credit Parties may make Intercompany Loans to Wholly-Owned Subsidiaries of Silgan which are not US Credit Parties (other than the Receivables Subsidiary) in an aggregate principal amount not to exceed $75,000,000 at any time outstanding (determined without regard to any write-downs or write-offs thereof) and (B) Subsidiaries of Silgan which are not Credit Parties may make Intercompany Loans to one another (other than to the Receivables Subsidiary) and to Silgan and the other Credit -79- Parties so long as (x) in the case of any such Intercompany Loans made to Silgan and/or to any other Credit Party, 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), and (y) each Intercompany Loan made pursuant to this clause (viii) by a Credit Party is evidenced by an Intercompany Note which shall be pledged to the Collateral Agent pursuant to the applicable Security Document; (ix) Silgan and the other US Credit Parties may make Intercompany Loans and/or cash common equity contributions to Wholly-Owned Foreign Subsidiaries of Silgan for the purpose of enabling such Wholly-Owned Foreign Subsidiaries to consummate a Permitted Acquisition (including to refinance any Indebtedness assumed as part of such Permitted Acquisition) so long as (i) any such Intercompany Loan and/or cash common equity contribution is funded with proceeds from Incremental Term Loans incurred by Silgan and/or Revolving Loans incurred by a Revolving Borrower; provided, however, no more than $50,000,000 of proceeds of Revolving Loans in the aggregate may be used to make Investments pursuant to this Section 8.05(ix), and (ii) each such Investment that is made as an Intercompany Loan shall be evidenced by an Intercompany Note that is pledged to the Collateral Agent pursuant to the applicable Security Document; (x) the US Credit Parties may make cash common equity contributions to their Subsidiaries which also are US Credit Parties and (B) the Foreign Credit Parties may make cash common equity contributions to their Subsidiaries which also are Foreign Credit Parties; (xi) Plastics may make capital contributions to Canadian Holdco from time to time to the extent and only in the amounts necessary for Canadian Holdco to comply with certain Canadian laws and regulations relating to minimum equity capitalization; (xii) 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; (xiii) Permitted Acquisitions consisting of stock acquisitions shall be permitted; (xiv) 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, Unrestricted Subsidiary or any Subsidiary of Silgan which is not a US Credit Party (other than the Receivables Subsidiary), so long as the aggregate amount of such cash Investments and the fair market value of all other 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) $175,000,000 and (II) the Permitted Additional Investment Basket Amount -80- at such time (determined without regard to any write-downs or write-offs of any Investments made pursuant to this clause (xiv)); provided, however, the aggregate amount of all Investments made pursuant to this Section 8.05(xiv) in Unrestricted Subsidiaries, when added to the aggregate amount of all guaranties outstanding under Section 8.04(xiii) made for the benefit of Unrestricted Subsidiaries (and including any payments made under any such guaranties), shall not exceed $75,000,000; (xv) 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); and (xvi) Silgan and its Subsidiaries may enter into Other Hedging Agreements in the ordinary course of business providing protection against fluctuations in currency values in connection with Silgan's or any of its Subsidiaries' operations so long as management of Silgan or such Subsidiary, as the case may be, has determined in good faith that the entering into of such Other Hedging Agreements are bona fide hedging activities and are not for speculative purposes. Notwithstanding anything to the contrary contained above in this Section 8.05, so long as the CanCo Restrictions are in effect, (x) in no event shall CanCo or any of its Subsidiaries be permitted to make any Investments otherwise permitted by clauses (ix), (xiii) and (xiv) of this Section 8.05 and (y) in no event shall Silgan or any of its other Subsidiaries be permitted to make any Investments in CanCo or any of its Subsidiaries otherwise permitted to be made under this Section 8.05, although Containers and its other Wholly-Owned Subsidiaries may (A) make cash equity Investments in, and Intercompany Loans to, CanCo in an aggregate amount outstanding for all such Investments not to exceed $50,000,000 at any time (determined without regard to any write-downs or write-offs thereof), (B) make a cash equity Investment in CanCo on the Initial Borrowing Date with proceeds of Loans incurred on such date in an aggregate amount not to exceed $75,000,000 to refinance outstanding loans incurred by CanCo under the Existing Credit Agreement and (C) make equity Investments in CanCo as, and to the extent, required by Section 7.13 (it being understood and agreed that (i) all Investments made to CanCo as an Intercompany Loan shall be evidenced by an Intercompany Note which shall be pledged to the Collateral Agent under the Pledge Agreement and (ii) all Investments made in or to CanCo as permitted in this sentence shall be in addition to the Investment amounts permitted by clauses (vii), (viii) and (xiv) of this Section 8.05, provided that no portion of the Investment amounts set forth in such clauses (vii), (viii) and (xiv) may be used to make Investments in CanCo or any of its Subsidiaries). 8.06 Transactions with Affiliates and Unrestricted Subsidiaries. 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 or Unrestricted Subsidiary 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 and Unrestricted Subsidiaries may execute, deliver and perform their obligations under the Tax Sharing Agreement; -81- provided, however, to the extent that any such Unrestricted Subsidiary is a party thereto, such Unrestricted Subsidiary shall be treated no more favorably thereunder than the manner in which any Domestic Subsidiary of Silgan is treated; (ii) transactions among Silgan and its 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 and so long as no minority shareholder in any such Subsidiary that is party to any such transaction is otherwise an Affiliate of Silgan; (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, Plastics and/or such other Subsidiaries, 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, (x) 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, and (y) to the extent that any Unrestricted Subsidiary is a party to any Management Services Agreement, such Unrestricted Subsidiary shall be treated no more favorably thereunder than the manner in which the Subsidiaries of Silgan are treated under those Management Services Agreements to which such Subsidiaries are a party; (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; (v) Silgan and its Subsidiaries may sell raw materials to Unrestricted Subsidiaries for cash and at the same price or prices that Silgan or such Subsidiaries pay for such raw materials; and (vi) Silgan and its Subsidiaries may provide administrative services to Unrestricted Subsidiaries. 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 (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 (vi) of the first paragraph of -82- 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, 2002 $83,000,000 Calendar Year ended December 31, 2003 $125,000,000 Calendar Year ended December 31, 2004 $125,000,000 Calendar Year ended December 31, 2005 $125,000,000 Calendar Year ended December 31, 2006 $125,000,000 Calendar Year ended December 31, 2007 $125,000,000 Calendar Year ended December 31, 2008 $125,000,000 Notwithstanding anything to the contrary contained above in this Section 8.07, (i) each of the amounts set forth in the table above shall be increased at the time of any Permitted Acquisition by an amount equal to 7% of the annual sales of the Person or assets acquired as part of such Permitted Acquisition for the most recently ended consecutive four quarter period of such Person prior to such Permitted Acquisition (provided that in the case of a Permitted Acquisition effected after the first day of any calendar year, the actual additional amount permitted to be expended pursuant to this clause (i) in such calendar year shall be the amount set forth above in this clause (i) multiplied by a fraction, the numerator of which is the number of days remaining during such calendar 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 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(g)), -83- (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 (or reduce any unutilized commitments in respect thereof). (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. 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 -------------------- ----- June 30, 2002 2.75:1.00 September 30, 2002 2.75:1.00 December 31, 2002 2.75:1.00 March 31, 2003 2.75:1.00 June 30, 2003 2.75:1.00 September 30, 2003 2.75:1.00 December 31, 2003 2.75:1.00 March 31, 2004 2.75:1.00 June 30, 2004 2.75:1.00 September 30, 2004 2.75:1.00 December 31, 2004 2.75:1.00 March 31, 2005 and the last day of each fiscal quarter thereafter 3.00:1.00 8.09 Total Leverage Ratio. None of the Borrowers will permit the Total 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 -------------------- ----- June 30, 2002 4.50:1.00 September 30, 2002 4.50:1.00 December 31, 2002 4.50:1.00 March 31, 2003 4.50:1.00 June 30, 2003 4.50:1.00 September 30, 2003 4.25:1.00 December 31, 2003 4.25:1.00 March 31, 2004 4.25:1.00 -84- Fiscal Quarter Ended Ratio -------------------- ----- June 30, 2004 4.25:1.00 September 30, 2004 4.00:1.00 December 31, 2004 4.00:1.00 March 31, 2005 4.00:1.00 June 30, 2005 4.00:1.00 September 30, 2005 and each fiscal quarter thereafter 3.75:1.00 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 9% Senior Subordinated Debentures or any Additional Permitted Subordinated Indebtedness, or make any purchase, redemption or acquisition for value of (or any offer to purchase, redeem or acquire) any 9% Senior Subordinated Debentures or any Additional Permitted 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 Permitted Subordinated Indebtedness through Permitted Subordinated Debt Repurchases, (ii) amend or modify, or permit the amendment or modification of, any provision of the 9% Senior Subordinated Debenture Documents or any other Permitted Subordinated Indebtedness Documents other than any amendments or modifications which could not reasonably be expected to be adverse to the interests of the Lenders and which have been approved by the Administrative Agent, (iii) amend or modify, or permit the amendment or modification of, any provision of any Management Services Agreement other than any amendments or modifications to the non-monetary terms thereof which could not reasonably be expected to be adverse to the interests of the Lenders, (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 reasonably be expected to be adverse to the interests of the Lenders 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 Lenders. In addition to the foregoing, 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 or exchange the Campbell Seller Note or (ii) amend or modify, or permit the amendment or modification of, any provision of the Campbell Seller Note, the Campbell Can Guaranty, Section 6(b) of the Campbell Can Pledge Agreement or any Campbell Can Acquisition Document to the extent that such amendment or modification would decrease the purchase price required to be paid by Campbell Soup or a Subsidiary thereof for the capital stock or assets of CanCo and its Subsidiaries upon the exercise of its remedies under the Campbell Can Acquisition Documents, change the assets on which Campbell Soup has a Lien or an option to purchase or alter in any way the obligation of Campbell Soup or a Subsidiary thereof to repay in full all Obligations (other than accrued Fees) of CanCo up to the CanCo Permitted Debt Amount -85- or, with respect to accrued Fees of CanCo, the obligation of Containers or any other Borrower other than CanCo to repay in full all such accrued Fees, upon the exercise by Campbell Soup of its remedies under the Campbell Can Pledge Agreement. 8.11 Creation of Subsidiaries and Unrestricted Subsidiaries. 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 or Unrestricted Subsidiary; provided that, Silgan and its Wholly-Owned Subsidiaries shall be permitted to (I) establish or create Wholly-Owned Subsidiaries, (II) establish, create or acquire Unrestricted Subsidiaries to the extent permitted by Section 8.05(xiv), (III) 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 (IV) acquire or create other non-Wholly-Owned Subsidiaries to the extent permitted by Section 8.05(xiv), so long as (i) in the case of preceding clauses (I), (II), (III) and (IV), 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 or Unrestricted Subsidiary is pledged pursuant to (and to the extent required by) the applicable Security Document, and the certificates representing such stock, together with stock powers duly executed in blank, are delivered to the Collateral Agent, (iii) in the case of a Domestic Subsidiary, such new Domestic Subsidiary executes and delivers a counterpart of the US Borrowers/Subsidiaries Guaranty, the US Pledge Agreement and the US Security Agreement, (iv) in the case of any Foreign Subsidiary that is (or is required to become) a Foreign Credit Party, such new Foreign Subsidiary executes and delivers counterparts of the applicable Foreign Security Documents (or new Foreign Security Documents) and Related Foreign Company Guaranty, and (v) such new Subsidiary takes all such other actions as may be required by Section 7.09. In addition, Silgan will cause each new Subsidiary that is required to become a Credit Party to deliver to the Administrative Agent all other relevant documentation of the type described in Sections 5.01(c), (d) and (i)(2) as such new Subsidiary would have had to deliver if it were a Credit Party on the Initial Borrowing Date. Notwithstanding anything to the contrary contained in this Section 8.11, so long as the CanCo Restrictions are in effect, in no event shall CanCo or any of its Subsidiaries establish, create or acquire any Subsidiary or Unrestricted Subsidiary. 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 9% Senior Subordinated Debenture Documents or any other Permitted 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 -86- 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, (ix) customary restrictions imposed by any agreement or instrument governing Indebtedness of any Foreign Subsidiary incurred under Section 8.04(xviii) so long as (A) such restrictions are not applicable to any Subsidiary of Silgan other than the Foreign Subsidiary incurring such Indebtedness and its Foreign Subsidiaries and (B) Silgan has made a good faith determination that the imposition of such restrictions could not reasonably be expected to cause Silgan or any of its other Subsidiaries to fail to comply with all of their respective obligations under agreements which they are a party to or subject to (including, but not limited to, the Credit Documents and the Permitted Subordinated Indebtedness Documents), and (x) restrictions only of the type described in clauses (a), (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. 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, (iii) issuances of common stock by Wholly-Owned Subsidiaries of Silgan to Silgan or a Wholly-Owned Domestic Subsidiary thereof, (iv) issuances of common stock by Foreign Subsidiaries of Silgan to Silgan or a Wholly-Owned Subsidiary thereof, (v) issuances of common stock by newly created Subsidiaries in accordance with the terms of this Agreement and (vi) in the case of Foreign Subsidiaries of Silgan, nominal shares to local nationals and to qualify directors, in each case to the extent required by applicable law. (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 any Borrower permit any of its Subsidiaries or Unrestricted 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. -87- (c) Notwithstanding anything to the contrary contained in this Agreement, so long as the CanCo Restrictions are in effect, CanCo Holding (1) will hold no assets other than the capital stock of CanCo and Intercompany Loans to Silgan and its other Subsidiaries otherwise permitted to be made under this Agreement and engage in no business other than (i) those activities that are incidental to (x) the maintenance of its corporate existence in compliance with applicable law, (y) legal, tax and accounting matters in connection with any of the permitted activities under this clause (c) and (z) the entering into, and performing its obligations under, this Agreement, the other Credit Documents to which it is a party and the Campbell Can Acquisition Documents to which it is a party and (2) may in no event transfer the capital stock of CanCo to Silgan or any other Subsidiary or Affiliate. 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 or jurisdiction of organization 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/or jurisdiction of organization 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 and/or jurisdiction of organization, 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. 8.16 Designated Senior Indebtedness. Silgan will not designate any Indebtedness, other than the Obligations, as "Designated Senior Indebtedness" for purposes of the 9% Senior Subordinated Debentures or any Additional Permitted 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 the Administrative Agent or the Required Lenders 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, 7.13 or -88- Section 8 and, in the case of a default pursuant to Section 7.13, such default shall continue unremedied for a period of 14 days; 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 Obligations 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 Obligations and the Intercompany Notes) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required but giving effect to any grace period), any such Indebtedness to become due prior to its stated maturity or (ii) any Indebtedness of any Borrower or any of its Subsidiaries shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof, provided that 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 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 -89- a Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) shall have an Unfunded Current Liability, (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 or (e) a contribution required to be made with respect to a Foreign Pension Plan has not been timely made, or any Borrower or any Subsidiary of any Borrower has incurred liabilities pursuant to one or more Foreign Pension Plans; (ii) there shall result from any such event or events described in clause (i) (x) the imposition of a lien upon the assets of any Borrower, any Subsidiary of any Borrower or an ERISA Affiliate, (y) the provision of security to induce the issuance of a waiver or extension of any funding requirement under Section 412 of the Code, or (z) 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 Lenders, could reasonably be expected to have a Material Adverse Effect; or 9.07 Guaranties. Any 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 any Guaranty to which it is party, 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 any Guaranty to which it is party; or 9.08 Security Documents. Any Security Document 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 covered thereby except as provided in such Security Document), in favor of the Collateral Agent for the benefit of the respective Secured Creditors, in each case superior to and prior to the rights and Liens of all third Persons (other than Permitted 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 any Security Document beyond the period of grace, if any, provided for therein; or 9.09 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 9.10 Change of Control. A Change of Control shall occur; or 9.11 Accounts Receivable Facility. After the execution and delivery thereof, (i) 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) Silgan 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 -90- 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 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 Lenders, 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 other Agent, any Lender 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 any of the Guaranties 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). "A Term Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender'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 Lender pursuant to Sections 1.13 and/or 12.04(b). "A Term Loan Maturity Date" shall mean June 28, 2008. "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). -91- "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 Agents (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 Agents for their review, and the Agents 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 Permitted Subordinated Indebtedness" shall have the meaning provided in Section 8.04(x). "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 Sections 7.10 and/or 8.11. "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 (or excluded from) 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. "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 another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. "Agents" shall mean and include the Administrative Agent, the Co-Syndication Agents and the Co-Documentation Agents. -92- "Agreement" shall mean this Credit Agreement, as same may be modified, supplemented or amended from time to time. "Alternate Currency" shall mean each Currency other than Dollars. "Alternate Currency Incremental Term Loan" shall mean each Incremental Term Loan denominated in an Alternate Currency. "Applicable Commitment Commission Percentage" and "Applicable Margin" shall mean: from and after any Start Date to and including the corresponding End Date, (i) with respect to the Commitment Commission, the respective per annum percentage set forth below under the column "Applicable Commitment Commission Percentage" and (ii) with respect to A Term Loans, B Term Loans, Revolving Loans and Swingline Loans, the respective percentage per annum set forth below under the respective Tranche and Type of Loans and (in the case of preceding clauses (i) and (ii)) opposite the respective Level (i.e., Level 1, Level 2, Level 3, Level 4 or Level 5, as the case may be) indicated to have been achieved on an applicable Test Date for such Start Date (as shown in the respective officer's certificate delivered pursuant to Section 7.01(e) or the first proviso below):
A Term Loans and Revolving Loans A Term Loans and B Term Loans Applicable maintained as Revolving Loans B Term Loans maintained as Commitment Total Base Rate Loans maintained as maintained as Eurodollar Commission Level Leverage Ratio and Swingline Loans Eurodollar Loans Base Rate Loans Loans Percentage ----- -------------- ------------------- ---------------- --------------- ------------- ---------- 1 Less than 2.50:1.00 0.250% 1.250% 1.000% 2.000% 0.250% 2 Greater than or equal to 2.50:1.00 but less than 3.00:1.00 0.500% 1.500% 1.000% 2.000% 0.375% 3 Greater than or equal to 3.00:1.00 but less than 3.50:1.00 0.750% 1.750% 1.000% 2.000% 0.500% 4 Greater than or equal to 3.50:1.00 but less than 4.00:1:00 1.000% 2.000% 1.000% 2.000% 0.500% 5 Greater than or equal to 1.250% 2.250% 1.250% 2.250% 0.500% 4.00:1.00
-93- ; provided, however, that if Silgan fails to deliver the financial statements required to be delivered pursuant to Section 7.01(a) or (b) (accompanied by the officer's certificate required to be delivered pursuant to Section 7.01(e) showing the applicable Total Leverage Ratio on the relevant Test Date) on or prior to the respective date required by such Sections, then Level 5 pricing shall apply until such time, if any, as the financial statements required as set forth above and the accompanying officer's certificate have been delivered showing the pricing for the respective Margin Reduction Period is at a level which is less than Level 5 (it being understood that, in the case of any late delivery of the financial statements and officer's certificate as so required, any reduction in the Applicable Commitment Commission Percentage or in the Applicable Margin shall apply only from and after the date of the delivery of the complying financial statements and officer's certificate); provided further, that Level 5 pricing shall apply at all times when a Specified Default or an Event of Default is in existence. Notwithstanding anything to the contrary contained in the immediately preceding sentence (other than the further proviso thereof), (A) Level 4 pricing shall apply for the period from the Initial Borrowing Date through, but not including, the first Start Date after the Initial Borrowing Date, (B) in no event shall pricing below Level 4 apply for the period from the Initial Borrowing Date to the date of the delivery of Silgan's financial statements (and related officer's certificate) in respect of its fiscal year ending December 31, 2002 and (C) with respect to each Tranche of Incremental Term Loans (to the extent then outstanding), the Applicable Margin shall be that percentage set forth in, or calculated in accordance with, Section 1.14 and the relevant Incremental Term Loan Commitment Agreement. "Applicable Currency" shall mean, for any Tranche of Incremental Term Loans, the Currency for such Tranche designated in the Incremental Term Loan Commitment Agreement for such Tranche. "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). "Associated Costs Rate" shall mean the percentage rate per annum to be charged in addition to the interest rate which is intended to compensate each Lender for the cost to such Lender of compliance with (a) the cash ratios and special deposit requirements of the Bank of England and/or the banking supervision or other costs imposed by the UK Financial Services Authority (or in either case, any other authority which replaces all or any of its functions), determined in accordance with Schedule X, and (b) any reserve asset requirements of the European Central Bank. "B Lenders" shall have the meaning provided in Section 4.01(c). "B Term Loan" shall have the meaning provided in Section 1.01(b). -94- "B Term Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender'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 Lender pursuant to Sections 1.13 and/or 12.04(b). "B Term Loan Maturity Date" shall mean November 30, 2008. "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). "Bankruptcy Code" shall have the meaning provided in Section 9.05. "Base Rate" shall mean, at any time, the higher of (i) 1/2 of 1% in excess of the Federal Funds Rate and (ii) the Prime Lending Rate. "Base Rate Loan" shall mean (i) each Swingline Loan and (ii) any other Loan (other than an Alternate Currency Incremental Term Loan except as otherwise provided in Section 1.15) 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. "Borrowing" shall mean the borrowing of one Type of Loan of a single Tranche from all the Lenders having Commitments of the respective Tranche (or from the Swingline Lender 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 Rate 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. "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 or with respect to, Euro Rate Loans any day which is a Business Day described in clause (i) above and which is also (A) a day for trading by and between banks in the relevant interbank market and which shall not be a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close in the city where the applicable Payment Office of the Administrative Agent is located in respect of such Euro Rate Loans and (B) in relation to any payment in Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open. "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. -95- "Campbell Can Acquisition" shall mean the prior purchase of substantially all of the prior steel manufacturing assets of Campbell Soup by CanCo in accordance with the Campbell Can Acquisition Documents. "Campbell Can Acquisition Documents" shall mean (i) the Purchase Agreement by and among Campbell Soup, CanCo and Containers, (ii) the Campbell Can Pledge Agreement, (iii) the Campbell Can Guaranty, (iv) the Campbell Can Supply Agreement, (v) the Campbell Seller Note, (vi) the Shared Services Agreement by and among Campbell Soup, CanCo and Containers, (vii) the Labor Supply Agreement by and among Campbell Soup, CanCo and Containers, (viii) the Intercompany Agreement by and among Containers, Manufacturing, CanCo and Campbell Soup, (ix) all leases by and among CanCo, Containers and Campbell Soup, (x) CanCo's certificate of incorporation and (xi) CanCo's bylaws. "Campbell Can Guaranty" shall mean the guaranty entered into in connection with the Campbell Can Acquisition which was made by Silgan, Containers, Manufacturing, CanCo and CanCo Holding in favor of Campbell Soup. "Campbell Can Pledge Agreement" shall mean the Pledge and Rights Agreement entered into in connection with the Campbell Can Acquisition by and among CanCo Holding, Containers, CanCo and Campbell Soup. "Campbell Can Supply Agreement" shall mean the Supply Agreement entered into in connection with the Campbell Can Acquisition by and among Containers, CanCo, CanCo Holding and Campbell Soup. "Campbell Seller Note" shall mean the promissory note issued by CanCo to Campbell Soup in an aggregate principal amount of $3,000,000 which is due on May 31, 2008, bears interest at a rate of 16-2/3% per annum and which interest is payable quarterly in arrears. "Campbell Soup" shall mean Campbell Soup Company, a New Jersey corporation. "Canadian Credit Facility" shall mean a credit facility entered into by Canadian Holdco and/or its Foreign Subsidiaries organized under the laws of Canada (or any province thereof) and 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, or any other Wholly-Owned Foreign Subsidiary or Subsidiaries of Plastics organized under the laws of Canada (or any province thereof) which replace 827599 Ontario Inc. as the ultimate Canadian parent or parent companies of Silgan Plastics Canada. "CanCo" shall have the meaning provided in the first paragraph of this Agreement. "CanCo Holding" shall mean Silgan Corporation, a Delaware corporation. -96- "CanCo Included Debt" shall mean all Indebtedness of CanCo that is required to be included in the calculation of the CanCo Permitted Debt Amount. "CanCo Permitted Debt Amount" shall mean, at any time, the "Permitted Debt Amount" calculated at such time under, and as defined in, CanCo's certificate of incorporation (as such certificate of incorporation was in effect on June 3, 1998). "CanCo Restrictions" shall mean, collectively, (i) the restrictions imposed on CanCo pursuant to the applicable Campbell Can Acquisition Documents limiting CanCo's ability to (x) guaranty the Obligations of the other Borrowers pursuant to the US Borrowers/Subsidiaries Guaranty and to secure such guaranty pursuant to the applicable Security Documents and (y) become jointly and severally liable with the other Credit Parties as provided for in this Agreement and in certain of the other Credit Documents, (ii) the pledge of the capital stock of CanCo pursuant to the applicable Campbell Can Acquisition Documents and (iii) the contractual right of Campbell Soup or any Affiliate thereof to purchase the capital stock of CanCo or any of the assets of CanCo (other than inventory in the ordinary course of business in accordance with supply arrangements) whether upon the occurrence of a Triggering Event or otherwise. "CanCo Revolving Sub-Limit" shall mean, initially, $75,000,000, with the amount of the CanCo Revolving Sub-Limit to be reduced from time to time thereafter by the principal amount of any repayment required to be made under Section 4.02(p) or 4.02(r) (whether or not any Revolving Loans or Swingline Loans are actually outstanding at such time), provided that, notwithstanding anything to the contrary contained above, but except as provided below, the CanCo Revolving Sub-Limit shall not be reduced to below $25,000,000. Notwithstanding the foregoing, the CanCo Revolving Sub-Limit shall be reduced to zero upon any requirement to repay all outstanding Revolving Loans and Swingline Loans incurred by CanCo pursuant to Section 4.02(r) (whether or not any Revolving Loans or Swingline Loans are actually outstanding at such time). "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 all Capitalized Lease Obligations incurred by such Person (but excluding any such expenditures that constitute Permitted Acquisitions). "Capitalized Lease Obligations" shall mean, with respect to any Person, all rental obligations of such Person which, under accounting principles generally accepted in the United States, are or will be required to be capitalized on the books of such 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 -97- of deposit and money market deposits of any commercial bank incorporated in the United States 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) of recognized standing having capital and surplus in excess of $500,000,000 and commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by Standard & Poor's Ratings 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., (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, and (vii) in the case of a Foreign Subsidiary, substantially similar investments of the type described above denominated in foreign currencies and from similarly capitalized and rated foreign banks in the jurisdiction in which such Foreign Subsidiary is organized. "CERCLA" shall mean the Comprehensive Environmental Response Compensation of Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C. ss. 9601 et seq. "Change of Control" shall mean (i)(a) any "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act), other than 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) 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) any "change of control" or similar event shall occur under the 9% Senior Subordinated Debentures or any Additional Permitted Subordinated Indebtedness. "Clean-Down Amount" shall mean an amount equal to $90,000,000. -98- "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 the Clean-Down Amount for such consecutive 30-day period. "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. "Collateral" shall mean all US Collateral, all Foreign Collateral and all cash and Cash Equivalents deposited into the Cash Collateral Account. "Collateral Agent" shall mean the Administrative Agent acting as collateral agent for the respective Secured Creditors pursuant to the respective Security Documents, and shall include any successor Collateral Agent appointed pursuant to the terms of this Agreement or the respective Security Document, as the case may be. "Commitment Commission" shall have the meaning provided in Section 3.01(a). "Commitments" shall mean any of the commitments of any Lender, i.e., whether the A Term Loan Commitment, the B Term Loan Commitment, each Incremental Term Loan Commitment or the Revolving Loan Commitment. "Consolidated Current Assets" shall mean, at any time, the current assets of Silgan and its Subsidiaries at such time determined on a consolidated basis. "Consolidated Current Liabilities" shall mean, at any time, the current liabilities of Silgan and its Subsidiaries at such time 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 9% Senior Subordinated Debentures and any Additional Permitted 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 (including each Unrestricted Subsidiary) or is accounted for by Silgan by the equity method of accounting shall be included only to the extent of the payment of cash dividends or cash 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, (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 and the -99- issuance of the 9% Senior Subordinated Debentures and (B) any extraordinary non-cash gains or extraordinary non-cash charges, and (iv) there shall be deducted from such calculation (to the extent not otherwise deducted in accordance with accounting principles generally accepted in the United States), any cash payments made in such period on account of an extraordinary non-cash charge incurred in such period or in a prior period. "Consolidated Tangible Assets" shall mean, at any time, the assets of Silgan and its Subsidiaries determined on a consolidated basis at such time less the amount of all intangible assets of Silgan and its Subsidiaries at such time, including, without limitation, all goodwill, customer lists, franchises, licenses, computer software, patents, trademarks, trade names, copyrights, service marks, brand names, unamortized deferred charges, unamortized debt discount and capitalized research and development costs. "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 partner, 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. "Co-Syndication Agents" shall have the meaning provided in the first paragraph of this Agreement. "Credit Documents" shall mean and include this Agreement, each Note, each Guaranty, each Security Document and, after the execution and delivery thereof, each Election to Become a Revolving Borrower and each Incremental Term Loan Commitment Agreement. "Credit Event" shall mean the making of any Loan or the issuance of any Letter of Credit. -100- "Credit Party" shall mean and include each US Credit Party and each Foreign Credit Party. "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 January 1, 2002 and ending on the last day of the then most recently ended fiscal quarter of Silgan. "Currency" shall mean Dollars, Euros, Pounds Sterling and any other freely transferable currency to the extent that such currency is approved by the Administrative Agent and the respective Incremental Term Loan Lender and/or Incremental Term Loan Lenders providing the Incremental Term Loans subject to such Other Alternate Currency. "Default" shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default. "Defaulting Lender" shall mean any Lender with respect to which a Lender 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. "Deutsche Bank" shall mean Deutsche Bank Trust Company Americas, in its individual capacity, and any successor entity thereto by merger, consolidation or otherwise. "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, partners or members or authorized or made any other distribution, payment or delivery of property (other than common equity of such Person and, in the case of Silgan, other than additional shares of Qualified Preferred Stock) or cash to its stockholders, partners or members 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 or membership interest outstanding on or after the Effective Date (or any options or warrants issued by such Person with respect to its capital stock or such other equity interests), 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 or membership 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 or such other equity interests). "Dollar Equivalent" shall mean, at any time for the determination thereof, with respect to an amount of an Alternate Currency (or another foreign currency), the amount of Dollars which could be purchased with such amount of such Alternate Currency (or such other foreign currency, as applicable) at the spot exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M. (Local Time) on the date two Business Days prior to the date of any determination thereof for purchase on such date (or, in the case of any determination pursuant to Section 12.21, on the date of determination). "Dollar Loan" shall mean each Loan denominated in Dollars. -101- "Dollars" and the sign "$" shall each mean freely transferable lawful money of the United States. "Domestic Subsidiary" shall mean each Subsidiary of Silgan incorporated or organized in the United States or any State or territory thereof. "Drawing" shall have the meaning provided in Section 2.05(b). "EBIT" shall mean, for any period, the Consolidated Net Income of Silgan and its Subsidiaries 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 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, an insurance company, a finance company, a financial institution, any fund that invests in loans or any other "accredited investor" (as defined in Regulation D of the Securities Act), but excluding Silgan or any of its Subsidiaries. "EMU Legislation" shall mean the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency. "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 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. -102- "Euro" shall mean the single currency of the participating member states as described in any EMU Legislation. "Euro Equivalent" shall mean, at any time for the determination thereof, the amount of Euros which could be purchased with the amount of Dollars involved in such computation at the spot rate of exchange therefor as quoted by the Administrative Agent as of 11:00 A.M. (Local Time) on the date two Business Days prior to the date of any determination thereof for purchase on such date (or, in the case of any determination pursuant to Section 12.21, on the date of determination). "Euro Rate" shall mean (i) for any Borrowing of Loans denominated in Dollars or a Primary Alternate Currency, the relevant interest rate, i.e., the Eurodollar Rate in the case of Dollar Loans or the relevant Primary Alternate Currency LIBOR in the case of Alternate Currency Incremental Term Loans denominated in a Primary Currency, as the case may be, and (ii) for any Borrowing of Loans denominated in an Other Alternate Currency, such rate per annum as shall be agreed upon by the respective Incremental Term Loan Borrower, the Administrative Agent and the relevant Incremental Term Loan Lenders and set forth in the relevant Incremental Term Loan Commitment Agreement. "Euro Rate Loan" shall mean each Loan other than a Base Rate Loan. "Eurodollar Loan" shall mean each Dollar Loan (other than a Swingline Loan) designated as a Eurodollar Loan by any Borrower at the time of the incurrence thereof or conversion thereto by such Borrower. "Eurodollar Rate" shall mean (a) the offered quotation to first-class banks in the New York interbank Eurodollar market by the Administrative Agent in its individual capacity for Dollar deposits of amounts in immediately available funds comparable to the outstanding principal amount of the Eurodollar Loan of the Administrative Agent in its individual capacity with maturities comparable to the Interest Period applicable to such Eurodollar Loan commencing two Business Days thereafter as of 10:00 A.M. (Local 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). "Euro-zone" shall mean the region composed of the member states as described in any EMU Legislation. "Event of Default" shall have the meaning provided in Section 9. "Excess Cash Flow" shall mean, for any period, the remainder of (a) 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, (b) the sum of (I) the amount of all Capital Expenditures made by Silgan and its Subsidiaries on a consolidated basis during such period, other than Capital Expenditures to the extent financed through -103- 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 or prepayments of Intercompany Loans, (B) repayments or prepayments of Indebtedness to the extent made with insurance or condemnation proceeds, Asset Sale proceeds, proceeds from a sale and leaseback transaction, equity proceeds or proceeds from the incurrence or issuance of any 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 a Term Loan Scheduled Repayment or (2) 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 corresponding 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(xiv) 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) and (iv) during such period except to the extent utilizing proceeds from the Net Equity Proceeds Amount. "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, 2003). "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. "Exchange Percentage" shall mean, as to each Lender, a fraction, expressed as a decimal, of which (a) the numerator shall be the sum of (i) the aggregate outstanding principal amount of the Loans owed to such Lender and (ii) the LC Exposure of such Lender, and (b) the denominator shall be the sum of (i) the aggregate outstanding principal amount of the Loans owed to all the Lenders and (ii) the aggregate LC Exposure of all the Lenders. "Existing Credit Agreement" shall mean the Credit Agreement, dated as of July 29, 1997, among Silgan, Containers, Plastics, certain other Subsidiaries of Silgan, the financial institutions party thereto, Deutsche Bank, as administrative agent, Bank of America, N.A., as syndication agent, Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior Funding, Inc., as co-documentation agents and Bank of America, N.A., Deutsche Bank, Goldman Sachs Credit Partners, L.P. and Morgan Stanley Senior Funding, Inc., 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). "Existing Letters of Credit" shall have the meaning provided in Section 2.01. -104- "Facing Fees" shall have the meaning provided in Section 3.01(c). "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 Collateral" shall mean all assets or properties of any Foreign Credit Party covered by any of the Foreign Security Documents, including all Additional Collateral covered thereby. "Foreign Credit Party" shall mean each Foreign Incremental Term Loan Borrower and each Related Foreign Company Guarantor. "Foreign Incremental Term Loan Borrower" shall mean any Wholly-Owned Foreign Subsidiary of Silgan that becomes an Incremental Term Loan Borrower pursuant to Section 1.14(d). "Foreign Intercompany Loan Amount" shall mean, at any time, an amount equal to the aggregate outstanding principal amount of Intercompany Loans made by Silgan and its Domestic Subsidiaries to Foreign Subsidiaries of Silgan, provided that for purposes of this definition, the principal amount of an Intercompany Loan made to a Foreign Subsidiary of Silgan shall not be included to the extent that such principal amount exceeds the amount of all cash and Cash Equivalents held by such Foreign Subsidiary and its Subsidiaries at such time. "Foreign Pension Plan" shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program (other than a statutorily required program) established or maintained outside the United States of America by Silgan or any one or more of its Subsidiaries primarily for the benefit of employees of Silgan or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code. "Foreign Security Documents" shall have the meaning provided in Section 1.14(d) and, after the execution and deliver thereof, shall include each Additional Security Document entered into by a Foreign Credit Party. "Foreign Subsidiary" shall mean, as to any Person, each Subsidiary of such Person which is not a Domestic Subsidiary. "Guarantor" shall mean and include each US Guarantor and each Related Foreign Company Guarantor. -105- "Guaranty" shall mean and include the US Borrowers/Subsidiaries Guaranty, each Related Foreign Company Guaranty and each other guaranty that may be executed and delivered pursuant to Section 7.10. "Incremental Term Loan" shall have the meaning provided in Section 1.01(c). "Incremental Term Loan Borrower" shall mean Silgan (if Silgan incurs Incremental Term Loans) and each Foreign Incremental Term Loan Borrower. "Incremental Term Loan Borrowing Date" shall mean, with respect to each Tranche of Incremental Term Loans, each date on which Incremental Term Loans of such Tranche are incurred pursuant to Section 1.01(c) and as otherwise permitted by Section 1.14. "Incremental Term Loan Commitment" shall mean, for each Lender, any commitment to make Incremental Term Loans provided by such Lender pursuant to Section 1.14, in such amount as agreed to by such Lender in the respective Incremental Term Loan Commitment Agreement and as set forth opposite such Lender's name in Schedule I (as modified in accordance with Section 1.14) directly below the column entitled "Incremental Term Loan Commitment", as the same may be (x) reduced from time to time or terminated pursuant to Sections 3.02, 3.03, 4.02 and/or 9 or (y) adjusted from time to time as a result of assignments to and from such Lender pursuant to Sections 1.13 and/or 12.04(b). "Incremental Term Loan Commitment Agreement" shall mean each Incremental Term Loan Commitment Agreement in the form of Exhibit L (appropriately completed) executed in accordance with Section 1.14. "Incremental Term Loan Commitment Termination Date" shall mean, with respect to any Tranche of Incremental Term Loans, the last date by which Incremental Term Loans under such Tranche may be incurred under this Agreement, which date shall be set forth in the respective Incremental Term Loan Commitment Agreement but may be no later than June 28, 2008. "Incremental Term Loan Lender" shall have the meaning provided in Section 1.14(b). "Incremental Term Loan Maturity Date" shall mean, for any Tranche of Incremental Term Loans, the final maturity date set forth for such Tranche of Incremental Term Loans in the respective Incremental Term Loan Commitment Agreement relating thereto, provided that the final maturity date for all Incremental Term Loans of a given Tranche shall be the same date. "Incremental Term Loan Scheduled Repayment" shall have the meaning provided in Section 4.02(d). "Incremental Term Note" shall have the meaning provided in Section 1.05(a). "Indebtedness" shall mean, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money -106- 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, (v) all obligations under Interest Rate Protection Agreements and (vi) 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 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 accounting principles generally accepted 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 Euro Rate Loan. "Interest Expense" shall mean, for any period, the sum of (i) 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) net of any total consolidated interest income of Silgan and its Subsidiaries for such period and (ii) the product of (A) the aggregate amount of all cash Dividend payments made on any class of Qualified Preferred Stock prior to the fifth anniversary after the issuance of such Qualified Preferred Stock and (B) a fraction, the numerator of which is one and the denominator of which is one minus the current effective consolidated federal, state, local and foreign income tax rate of Silgan expressed as a decimal. "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. "Investments" shall have the meaning provided in Section 8.05. "Issuing Country" shall have the meaning provided in Section 12.22. -107- "Issuing Lender" shall mean (i) with respect to standby Letters of Credit, Deutsche Bank, and (ii) with respect to trade Letters of Credit, any Lender (and, in the case of Deutsche Bank (to the extent that it subsequently agrees to be an issuer of trade Letters of Credit hereunder), any bank affiliate thereof which have agreed to issue trade Letters of Credit hereunder) which, at the request of Silgan and with the consent of the Administrative Agent, agrees in such Lender's sole discretion to become an Issuing Lender for purposes of issuing trade Letters of Credit pursuant to Section 2. "Joint Book Managers" shall have the meaning provided in the first paragraph of this Agreement. "Joint Lead Arrangers" shall have the meaning provided in the first paragraph of this Agreement. "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. "Judgment Currency" shall have the meaning provided in Section 12.21(a). "Judgment Currency Conversion Date" shall have the meaning provided in Section 12.21(a). "LC Exposure" shall mean, at any time, the sum of (i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings that have not yet been reimbursed by or on behalf of the Revolving Borrowers at such time. "LC Reserve Account" shall have the meaning provided in Section 1.15(g). "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. "Lender" shall have the meaning provided in the first paragraph of this Agreement. "Lender Default" shall mean (i) the refusal (which has not been retracted) of a Lender 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 Lender having notified in writing any Borrower and/or the Administrative Agent that such Lender does not intend to comply with its obligations under Section 1.01(a), (b), (c), (d) or (f) or Section 2. "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). -108- "Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the amount of all Unpaid Drawings. "Letter of Credit Request" shall have the meaning provided in Section 2.03(a). "Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any lease having substantially the same effect as any of the foregoing). "Loan" shall mean each A Term Loan, each B Term Loan, each Incremental Term Loan, each Revolving Loan and each Swingline Loan. "Local Time" shall mean the local time in effect at (x) the applicable Notice Office in the case of Notices of Borrowing, Notices of Conversions/Continuances and Letter of Credit Requests and (y) the applicable Payment Office in the case of all payments and disbursements of Loans, other Obligations or Letters of Credit. "Majority Lenders" of any Tranche shall mean those Non-Defaulting Lenders which would constitute the Required Lenders 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 or Unrestricted 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(f). "Manufacturing" shall have the meaning provided in the first paragraph of this Agreement. "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 -109- 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 in respect of the fiscal quarter of Silgan ending on June 30, 2002. "Margin Stock" shall have the meaning provided in Regulation U of the Board of Governors of the Federal Reserve System. "Material Adverse Effect" shall mean a material adverse effect on the business, operations, property, assets, liabilities or condition (financial or otherwise) of Silgan and its Subsidiaries taken as a whole. "Maturity Date" shall mean the A Term Loan Maturity Date, the B Term Loan Maturity Date, each Incremental 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 12.19. "Maximum Swingline Amount" shall mean $30,000,000. "Minimum Borrowing Amount" shall mean (i) for Term Loans that are Dollar Loans, $5,000,000, (ii) for Incremental Term Loans denominated in an Alternate Currency, an amount in such Alternate Currency to be determined by the Administrative Agent and the respective Incremental Term Lenders as set forth in the relevant Incremental Term Loan Commitment Agreement, (iii) for Revolving Loans, $2,500,000 (except that, in the case of Revolving Loans made to CanCo that are maintained as Base Rate Loans, the Minimum Borrowing Amount in respect thereof shall be $1,000,000) and (iv) for Swingline Loans, $250,000. "Mortgage Policy" shall mean the mortgage title insurance policy or a binding commitment with respect thereto. "Mortgaged Properties" shall mean all Real Property of the Credit Parties subject to a Mortgage. "Mortgages" shall mean mortgages, deeds of trust, leasehold mortgages and leasehold deeds of trust (or similar instruments) 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 (or similar instruments) 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 or foreign counsel to conform with applicable law and procedure. "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 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 -110- "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 reasonable 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(xiv) 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 received by the respective Person therefrom (net of (i) reasonable costs and taxes associated therewith, (ii) in the case of insurance or condemnation proceeds received by Silgan or any of its Foreign Subsidiaries solely in respect of the assets or property of Canadian Holdco or any of its Foreign Subsidiaries organized under the laws of Canada (or any province thereof), any amounts required to be applied under the Canadian Credit Facility and (iii) the amount of such insurance or condemnation proceeds required to be used to repay any Indebtedness (other than Indebtedness under this Agreement) which is secured by the respective assets subject to such Recovery Event). "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 Documents" shall mean the 9% Senior Subordinated Debentures, the 9% Senior Subordinated Debenture Indenture and each of the other documents executed in connection therewith. "9% Senior Subordinated Debenture Indenture" shall mean the Indenture, dated as of June 9, 1997, between Silgan and Bank One Trust Company, N.A. (as successor in interest to The First National Bank of Chicago), as Trustee, and as amended by the First Supplemental Indenture thereto, dated as of June 24, 1997 and the Second Supplemental Indenture thereto, dated as of April 23, 2002. "9% Senior Subordinated Debentures" shall mean Silgan's 9% Senior Subordinated Debentures due June 1, 2009, which were issued prior to the Initial Borrowing Date pursuant to the 9% Senior Subordinated Debenture Indenture. As used herein, the term "9% Senior Subordinated Debentures" shall include any 9% Senior Subordinated Debentures -111- which are identical securities to the 9% Senior Subordinated Debentures issued prior to the Initial Borrowing Date (other than with respect to transfer restrictions and registration rights), but which shall be issued pursuant to a registered exchange offer for the 9% Senior Subordinated Debentures theretofore issued pursuant to the 9% Senior Subordinated Debenture Indenture. In no event will the issuance of any such exchange 9% Senior Subordinated Debentures increase the aggregate principal amount of 9% Senior Subordinated Debentures then outstanding or otherwise result in an increase in an interest rate applicable to the 9% Senior Subordinated Debentures. "Non-Defaulting Lender" shall mean and include each Lender other than a Defaulting Lender. "Note" shall mean each A Term Note, each B Term Note, each Incremental 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/Continuation" shall have the meaning provided in Section 1.06. "Notice Office" shall mean (i) except as provided in clause (ii) below, the office of the Administrative Agent located at 90 Hudson Street, Fifth Floor, Jersey City, NJ 07302, or such other office or offices as the Administrative Agent may designate in writing to the Borrowers and the Lenders from time to time, and (ii) in the case of Incremental Term Loans of a given Tranche to a Foreign Incremental Term Loan Borrower, the office of the Administrative Agent designated as the "Notice Office" for such Tranche of Incremental Term Loans in the respective Incremental Term Loan Commitment Agreement (which office may be the same as that in the preceding clause (i), although if such office is not the same, a copy of the relevant notice also shall be delivered to the Administrative Agent at the Notice Office referred to in the preceding clause (i)), or such other office or offices as the Administrative Agent may designate in writing to the Borrowers and the Lenders from time to time. "Obligation Currency" shall have the meaning provided in Section 12.21(a). "Obligations" shall mean all amounts owing to the Administrative Agent, the other Agents, the Collateral Agent, the Swingline Lender, any Lender or any Issuing Lender pursuant to the terms of this Agreement or any other Credit Document. "Other Alternate Currency" shall mean an Alternate Currency other than a Primary Alternate Currency. "Other Hedging Agreements" shall mean any foreign exchange contracts, currency swap agreements or other similar agreements or arrangements designed to protect against fluctuations in currency values. "Participant" shall have the meaning provided in Section 2.04(a). -112- "Payment Office" shall mean (i) except as provided in clause (ii) below, the office of the Administrative Agent located at 90 Hudson Street, Fifth Floor, Jersey City, NJ 07302, or such other office as the Administrative Agent may designate in writing to the Borrowers and the Lenders from time to time, and (ii) in the case of Incremental Term Loans of a given Tranche to a Foreign Incremental Term Loan Borrower, the office of the Administrative Agent designated as the "Payment Office" for such Tranche of Incremental Term Loans in the respective Incremental Term Loan Commitment Agreement (which office may be the same as that in the preceding clause (i)), or such other office or offices as the Administrative Agent may designate in writing to the Borrowers and the Lenders from time to time. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto. "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 or Additional Permitted 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) at the time of each such Refinancing and immediately after giving effect thereto, the Senior Leverage Ratio for the Test Period then most recently ended for which financial statements have been delivered to the Lenders under this Agreement, on a Pro Forma Basis, would have been no greater than 2.50:1.00, (iii) within five Business Days prior to the consummation of any such Refinancing, Silgan shall deliver to the Administrative Agent a certificate of its chief financial officer or treasurer setting forth (in reasonable detail) the calculation of the Senior Leverage Ratio on a Pro Forma Basis for the Test Period then most recently ended prior to the date of such Refinancing for which the financial statements have been delivered to the Lenders under this Agreement, and such calculation shall show that the Senior Leverage Ratio as of the last day of such Test Period was no greater than 2.50:1.00, (iv) at the time of each such Refinancing and immediately after giving effect thereto, the Total Unutilized Revolving Loan Commitment shall be at least (x) $200,000,000 to the extent that any such Refinancing occurs during the period from and including November 1 of any year through and including June 30 of the succeeding year or (y) $150,000,000 to the extent that any such Refinancing occurs at any other time during any year, and (v) immediately following any such Refinancing, the 9% Senior Subordinated Debentures or the Additional Permitted Subordinated Indebtedness so Refinanced are cancelled by Silgan. -113- "Permitted Subordinated Indebtedness" shall mean the 9% Senior Subordinated Debentures and any Additional Permitted Subordinated Indebtedness. "Permitted Subordinated Indebtedness Documents" shall mean all indentures, securities purchase agreements, note agreements and other documents and agreements entered into in connection with any Permitted Subordinated Indebtedness. "Person" shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof. "Plan" shall mean any multiemployer plan (as defined in Section 4001(a)(3) of ERISA) or any single-employer plan (as defined in Section 4001(a)(15) of ERISA), subject to Title IV of ERISA, which is maintained or contributed to, or at any time during the five calendar years preceding the date of this Agreement was maintained or contributed to by any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate. "Plastics" shall have the meaning provided in the first paragraph of this Agreement. "Pounds Sterling" shall mean freely transferable lawful money of the United Kingdom. "Pounds Sterling Equivalent" shall mean, at any time for the determination thereof, the amount of Pounds Sterling which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M. (Local Time) on the date two Business Days prior to the date of any determination thereof for purchase on such date (or, in the case of any determination pursuant to Section 12.21, on the date of determination). "Primary Alternate Currency" shall mean each of Euros and Pounds Sterling. "Primary Alternate Currency LIBOR" shall mean, with respect to each Interest Period applicable to any Alternate Currency Incremental Term Loan denominated in a Primary Alternate Currency, the British Bankers Association Interest Settlement Rate that appears on page 3750 (or other appropriate page if the relevant Primary Alternate Currency does not appear on such page) of the Dow Jones Telerate Screen (or any successor page) for deposits in the relevant Primary Alternate Currency with maturities comparable to such Interest Period as of 11:00A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period or, if such rate does not appear on the Dow Jones Telerate Screen (or any successor page), the offered quotations to first-class banks in the London interbank market by the Administrative Agent for deposits in the relevant Primary Alternate Currency of amounts in same day funds comparable to the outstanding principal amount of such Alternate Currency Incremental Term Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period; provided that in the event the Administrative Agent has made any determination pursuant to Section 1.10(a)(i) in respect of Alternate Currency Incremental Term Loans denominated in such Primary Alternate Currency, or in the circumstances described in -114- clause (i) to the proviso to Section 1.10(b) in respect of Alternate Currency Incremental Term Loans denominated in such Primary Alternate Currency, Primary Alternate Currency LIBOR determined pursuant to this definition with respect to such Primary Alternate Currency shall instead be the rate determined by the Administrative Agent as the all-in-cost of funds for the Administrative Agent to fund the respective Alternate Currency Incremental Term Loan denominated in such Primary Alternate Currency with maturities comparable to the Interest Period applicable thereto. "Prime Lending Rate" shall mean the rate which Deutsche Bank 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. Deutsche Bank 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 (including any Indebtedness assumed as part of any Permitted Acquisition and any Permitted Subordinated Indebtedness pursuant to a Refinancing), or to finance Permitted Acquisitions or Investments made pursuant to Section 8.05(xiv)) 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 corresponding permanent commitment reduction) and any 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 (including any Indebtedness assumed as part of any Permitted Acquisition and any Permitted Subordinated Indebtedness pursuant to a Refinancing) or to finance Permitted Acquisitions or Investments -115- made pursuant to (Section 8.05(xiv)) 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(xiv), 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 corresponding 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 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, but only to the extent that such cost savings and expenses would otherwise be permitted to be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act. 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 or treasurer 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. "Projections" shall have the meaning provided in Section 5.01(n). "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 May 30, 2009, (ii) provide that the payment of all Dividends thereunder are 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 -116- 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 Administrative Agent. "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. "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 9% Senior Subordinated Debentures and/or any Additional Permitted Subordinated Indebtedness, to refinance, redeem, repay, repurchase, acquire or defease any such issue of Permitted 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 T" shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. "Regulation U" shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. "Regulation X" shall mean Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. "Related Foreign Company Group" shall mean, with respect to any Foreign Incremental Term Loan Borrower, the Foreign Subsidiaries which are parents of such Foreign Incremental Term Loan Borrower and the Subsidiaries of such Foreign Incremental Term Loan Borrower. -117- "Related Foreign Company Guarantor" shall have the meaning provided in Section 1.14(d). "Related Foreign Company Guaranty" shall have the meaning provided in Section 1.14(d). "Relevant Currency Equivalent" shall mean the Dollar Equivalent, the Euro Equivalent or the Pounds Sterling Equivalent, as applicable. "Replaced Lender" shall have the meaning provided in Section 1.13. "Replacement Lender" 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 Lenders" shall mean Non-Defaulting Lenders the sum of whose outstanding Term Loans, Incremental Term Loan Commitments and Revolving Loan Commitments (or after the termination thereof, outstanding Revolving Loans and RL Percentage of outstanding Swingline Loans and Letter of Credit Outstandings) represent an amount greater than 50% of the sum of (i) all outstanding Term Loans of Non-Defaulting Lenders, (ii) the Total Incremental Term Loan Commitment in respect of all Tranches of Incremental Term Loans less the Incremental Term Loan Commitments of all Defaulting Lenders and (iii) the Total Revolving Loan Commitment less the Revolving Loan Commitments of all Defaulting Lenders (or, if after the Total Revolving Loan Commitment has been terminated, the sum of the then total outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL Percentages of all Non-Defaulting Lenders of the total outstanding Swingline Loans and Letter of Credit Outstandings at such time). For purposes of this definition, the calculation of the outstanding principal amount of all Alternate Currency Incremental Term Loans shall be determined by taking the Dollar Equivalent thereof at the time of any such calculation. "Required US Lenders" shall mean those Non-Defaulting Lenders holding Loans and Revolving Loan Commitments of the US Borrowers which would constitute the Required Lenders under, and defined in, this Agreement if all the outstanding Obligations of the Foreign Incremental Term Loan Borrowers were repaid in full and all the Commitments with respect thereto were terminated. "Retained Excess Cash Flow Amount" shall mean, initially zero and at any time on or after January 1, 2004, a cumulative amount equal to the remainder of (x) 100% of Excess Cash Flow for each Excess Cash Payment Period (commencing with the Excess Cash Payment Period ending December 31, 2003) less (y) the amount (if any) required to be repaid pursuant to Section 4.02(e) 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 -118- 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(xiv) or guaranties entered into pursuant to Section 8.04(xiii) in excess of $175,000,000 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, Manufacturing, CanCo and any other Wholly-Owned Domestic Subsidiary of Silgan (other than the Receivables Subsidiary) that becomes a Revolving Borrower pursuant to Section 5.04. "Revolving Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender's name in Schedule I directly below the column entitled "Revolving Loan Commitment," as same may be (x) reduced from time to time or terminated pursuant to Sections 3.02, 3.03, 4.02 and/or 9, or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Sections 1.13 and/or 12.04(b). "Revolving Loan Maturity Date" shall mean June 28, 2008. "Revolving Loans" shall have the meaning provided in Section 1.01(d). "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 all Revolving Loans and Swingline Loans then outstanding plus the aggregate amount of all Letter of Credit Outstandings at such time; provided, however, (i) that the term Revolving Outstandings shall not include any Revolving Loans or Swingline Loans the proceeds of which were used to finance a Permitted Acquisition (including to refinance any Indebtedness assumed as part of any Permitted Acquisition), an Investment pursuant to Section 8.05(xiv), a payment under a guaranty provided under Section 8.04(xiii) or a Permitted Subordinated Debt Repurchase and (ii) for the period through, but not including, December 31, 2002, the Revolving Outstandings amount shall be equal to $3,000,000. "RL Percentage" of any Lender at any time shall mean a fraction (expressed as a percentage) the numerator of which is the Revolving Loan Commitment of such Lender at such time and the denominator of which is the Total Revolving Loan Commitment at such time; provided that if the RL Percentage of any Lender is to be determined after the Total Revolving Loan Commitment has been terminated, then the RL Percentages of the Lenders shall be determined immediately prior (and without giving effect) to such termination. "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 respective Security Documents. -119- "Securities Act" shall mean the Securities Act of 1933, as amended. "Securities Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Security Document" shall mean and include each Foreign Security Document and each US Security Document. "Senior Leverage Ratio" shall mean, at any time, the Total Leverage Ratio at such time but calculated without regard to any outstanding Permitted Subordinated Indebtedness at such time. "Sharing Event" shall mean (i) the occurrence of any Event of Default with respect to any Borrower pursuant to Section 9.05, (ii) the acceleration of the maturity of the Loans pursuant to the last paragraph of Section 9 or (iii) if the Required US Lenders so elect, the failure to pay any Tranche of Loans in full at the respective Maturity Date therefor. "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. "Specified Default" shall mean any Default under Section 9.01 or 9.05. "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. "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. Notwithstanding the foregoing (and except for purposes of Sections 6.11, 6.12, 7.06, 7.08, 9.06 and 12.01, and the definition of Unrestricted Subsidiary contained herein), an Unrestricted Subsidiary shall be deemed not to be a Subsidiary of Silgan or any of its other Subsidiaries for purposes of this Agreement or any other Credit Document. Unless the context indicates otherwise, all references herein to Subsidiaries are references to Subsidiaries of any Borrower. -120- "Supermajority Lenders" of any Tranche shall mean those Non-Defaulting Lenders which would constitute the Required Lenders 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 text "an amount greater than 50%" contained therein were changed to "an amount equal to at least 66-2/3%". "Swingline Expiry Date" shall mean the date which is two Business Days prior to the Revolving Loan Maturity Date. "Swingline Lender" shall mean Deutsche Bank. "Swingline Loan" shall have the meaning provided in Section 1.01(e). "Swingline Note" shall have the meaning provided in Section 1.05(a). "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. "Taxes" shall have the meaning provided in Section 4.04(a). "Term Loan" shall mean each A Term Loan, each B Term Loan and each Incremental Term Loan. "Term Loan Percentage" of a Tranche of Term Loans shall mean, at any time, a fraction (expressed as a percentage), the numerator of which is equal to the aggregate outstanding principal amount of all Term Loans of such Tranche (which, in the case of Alternate Currency Incremental Term Loans, shall be the Dollar Equivalent of such aggregate outstanding principal amount) at such time and the denominator of which is equal to the aggregate outstanding principal amount of all Term Loans of all Tranches (which, in the case of Alternate Currency Incremental Term Loans, shall be the Dollar Equivalent of such aggregate principal amount) at such time. "Term Loan Scheduled Repayment" shall have the meaning provided in Section 4.02(d). "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 Lenders at such time. "Total B Term Loan Commitment" shall mean, at any time, the sum of the B Term Loan Commitments of each of the Lenders at such time. -121- "Total Commitment" shall mean, at any time, the sum of the Commitments of each of the Lenders at such time. "Total Incremental Term Loan Commitment" shall mean, at any time and for any Tranche of Incremental Term Loans, the sum of the Incremental Term Loan Commitments of such Tranche of each of the Lenders at such time. "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 (but excluding (x) obligations in respect of Interest Rate Protection Agreements and (y) any premiums or discounts associated with the issuance of any Indebtedness to the extent that accounting principles generally accepted in the United States would require such amounts to be reflected as Indebtedness on a consolidated balance sheet of Silgan). "Total 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 Total 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 and its Subsidiaries 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); it being understood and agreed, however, for purposes of determining Total Indebtedness or Revolving Loans or Swingline Loans at any time that the CanCo Restrictions are in effect, there shall be excluded from such calculation that aggregate principal amount of all Revolving Loans and Swingline Loans made to CanCo which equals the aggregate amount of unrestricted cash and Cash Equivalents held by Silgan and its Subsidiaries (other than CanCo and its Subsidiaries) as reflected on the consolidated balance sheet of Silgan and its Subsidiaries as of the last day of such period. "Total Revolving Loan Commitment" shall mean, at any time, the sum of the Revolving Loan Commitments of each of the Lenders at such time. "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 all Revolving Loans and Swingline Loans then outstanding plus the then aggregate amount of all Letter of Credit Outstandings. "Tranche" shall mean the respective facilities and commitments utilized in making Loans hereunder, with there being four separate Tranches on the Effective Date, i.e., A Term Loans, B Term Loans, Revolving Loans and Swingline Loans. In addition, and notwithstanding the foregoing, any Incremental Term Loans extended after the Initial Borrowing Date shall, except to the extent provided in Section 1.14(c), be made pursuant to one or more additional Tranches which shall be designated pursuant to the respective Incremental Term Loan -122- Commitment Agreements in accordance with the relevant requirements specified in Section 1.14, provided that, for purposes of Section 1.15 only, for so long as the CanCo Restrictions remain in effect and CanCo has not become a party to the US Borrowers/Subsidiaries Guaranty, Revolving Loans and Letter of Credit Outstandings made to CanCo shall be deemed to be a separate Tranche. "Triggering Event" shall mean (i) any of the events described in Section 6(a) of the Campbell Can Pledge Agreement, (ii) the non-renewal of the term under the Campbell Can Supply Agreement and purchase by Campbell Soup of all of CanCo's assets, all as described in Article 8 of the Campbell Can Supply Agreement and (iii) any other event that allows Campbell Soup to purchase all or substantially all of the assets or capital stock of CanCo. "Type" shall mean (i) for any Dollar Loan, the type of such Dollar Loan determined with regard to the interest option available thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan, and (ii) for any Alternate Currency Incremental Term Loan, the Applicable Currency of such Alternate Currency Incremental Term Loan. "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). "Unrestricted Subsidiary" shall mean any Subsidiary of Silgan that is (i) acquired or created after the Initial Borrowing Date and (ii) designated by Silgan as an Unrestricted Subsidiary hereunder by written notice to the Administrative Agent at the time that such Subsidiary is created or acquired, provided that Silgan shall only be permitted to so designate such Subsidiary as an Unrestricted Subsidiary after the Initial Borrowing Date so long as (w) no Default or Event of Default then exists or would result therefrom, (x) all of the provisions of Section 8.11 shall have been complied with in respect of such newly-designated Unrestricted Subsidiary, (y) such Unrestricted Subsidiary shall be capitalized (to the extent capitalized by Silgan or any of its Subsidiaries) through Investments as permitted by, and in compliance with, Section 8.05(xiv), and with any assets owned by such Unrestricted Subsidiary at the time of the initial designation thereof to be treated as Investments in such Unrestricted Subsidiary pursuant to Section 8.05(xiv), and (z) at least five Business Days prior to the designation of any Person as an Unrestricted Subsidiary, Silgan shall have delivered to the Administrative Agent a certificate of its chief financial officer or treasurer setting forth (in reasonable detail) the recalculation of the Interest Coverage Ratio and the Total Leverage Ratio on a Pro Forma Basis for the Test Period then most recently ended prior to the date of such designation for which financial statements have been delivered to the Lenders under this Agreement, and such recalculation shall -123- show that Silgan would have been in compliance with Sections 8.08 and 8.09 as of the last day of such Test Period. "Unutilized Revolving Loan Commitment" with respect to any Lender, at any time, shall mean such Lender's Revolving Loan Commitment at such time less the sum of (i) the aggregate outstanding principal amount of Revolving Loans made by such Lender and (ii) such Lender's RL Percentage of the Letter of Credit Outstandings. "US Borrower" shall mean Silgan or any Revolving Borrower. "US Borrowers/Subsidiaries Guaranty" shall have the meaning provided in Section 5.01(g). "US Collateral" shall mean all assets or properties of any US Credit Party covered by any of the US Security Documents, including all Additional Collateral covered thereby. "US Credit Party" shall mean each of Silgan, each Revolving Borrower and each other US Guarantor. "US Guarantor" shall mean Silgan, each Revolving Borrower and each other US Subsidiary Guarantor in their capacities as such, although neither CanCo nor any of its Subsidiaries shall be a Guarantor for so long as the applicable CanCo Restrictions remain in effect. "US Mortgage" shall mean a Mortgage encumbering a US Mortgaged Property. "US Mortgaged Property" shall mean any Mortgaged Property owned or leased by a US Credit Party. "US Pledge Agreement" shall have the meaning provided in Section 5.01(h). "US Pledge Agreement Collateral" shall mean all "Collateral" as defined in the US Pledge Agreement. "US Security Agreement" shall have the meaning provided in Section 5.01(i). "US Security Agreement Collateral" shall mean and include all "Collateral" as defined in the US Security Agreement. "US Security Documents" shall mean and include the US Pledge Agreement, the US Mortgages, the US Security Agreement and, after the execution and delivery thereof, each Additional Security Document entered into by a US Credit Party. "US Subsidiary Guarantor" shall mean (i) each Revolving Borrower in its capacity as a guarantor under the US Borrowers/Subsidiaries Guaranty and (ii) each other Domestic Subsidiary of Silgan (other than the Receivables Subsidiary), although neither CanCo nor any of its Subsidiaries shall be a US Subsidiary Guarantor for so long as the applicable CanCo Restrictions are in effect. -124- "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(l). "Waivable Voluntary Prepayment" shall have the meaning provided in Section 4.01(c). "Weighted Average Life to Maturity" shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the then outstanding principal amount of such Indebtedness into (ii) the product obtained by multiplying (x) the amount of each then remaining installment or other required scheduled payments of principal, including payment at final maturity, in respect thereof, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment. "Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person that is a Domestic Subsidiary. "Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person that is a Foreign Subsidiary. "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation 100% of whose capital stock (other than directors' qualifying shares and/or other nominal amounts of shares required to be held by local nationals under applicable law) 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 (other than nominal interests required to be held by local nationals under applicable law). "Working Capital" shall mean, at any time, Consolidated Current Assets (excluding cash and Cash Equivalents) less Consolidated Current Liabilities at such 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 otherwise specified. (b) All accounting terms not specifically defined herein shall be construed in accordance with accounting principles generally accepted 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). -125- Section 11. The Administrative Agent and the Other Agents. 11.01 Appointment. The Lenders hereby designate Deutsche Bank as Administrative Agent (for purposes of this Section 11 and Section 12.01, the term "Administrative Agent" shall also include Deutsche Bank in its capacity as Collateral Agent pursuant to the Security Documents) to act as specified herein and in the other Credit Documents. The Lenders hereby designate Bank of America, N.A. and Citicorp USA, Inc., as Co-Syndication Agents, to act as specified herein and in the other Credit Documents. The Lenders hereby designate Morgan Stanley Senior Funding, Inc. and Fleet National Bank as Co-Documentation Agents to act as specified herein and in the other Credit Documents. Each Lender hereby irrevocably authorizes the Administrative Agent and the other Agents 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 other Agents by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent and the other Agents 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 other Agent shall have any duties or responsibilities except those expressly set forth in this Agreement and in the other Credit Documents. Neither the Administrative Agent, any other Agent 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 (as determined by a court of competent jurisdiction in a final and non-appealable decision). The duties of the Administrative Agent and the other Agents shall be mechanical and administrative in nature; neither the Administrative Agent nor any other Agent shall have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Lender; 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 other Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein. 11.03 Lack of Reliance on the Administrative Agent and the Other Agents. Independently and without reliance upon the Administrative Agent or any other Agent, each Lender, 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 other Agent shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender 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 other Agent shall be responsible to any Lender for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, -126- 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 Lenders 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 Lenders and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender 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 Lenders. 11.05 Reliance. The Administrative Agent and each of the other Agents 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 other Agent 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 other Agent is not reimbursed and indemnified by the Borrowers, the Lenders will reimburse and indemnify the Administrative Agent and such other Agent, in proportion to their respective "percentages" as used in determining the Required Lenders (determined as if there are no Defaulting Lenders), for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent or such other Agent, 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 Lender 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 other Agent's gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). 11.07 The Administrative Agent and the other Agents 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 other Agents shall have the rights and powers specified herein for a "Lender" and may exercise the same rights and powers as though they were not performing the duties specified herein; and the term "Lenders," "Required Lenders," "Majority Lenders," "Supermajority Lenders" or any similar terms shall, -127- unless the context clearly otherwise indicates, include the Administrative Agent and each of the other Agents in their individual capacities. The Administrative Agent and each of the other Agents 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 and its Subsidiaries for services in connection with this Agreement and otherwise without having to account for the same to the Lenders. The Administrative Agent and each of the other Agents may also be an equity investor in Silgan or any Affiliate of Silgan without any consent required from any Lender. 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 Other Agents. (a) The Administrative Agent and/or any of the other Agents may resign from the performance of all their respective functions and duties hereunder and/or under the other Credit Documents at any time by giving 15 Business Days' prior (or, in the case of an other Agent, same day) written notice to the Borrowers and the Lenders. 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 other Agent, such resignation shall become effective immediately. (b) Upon any such notice of resignation, the Required Lenders shall appoint a successor Administrative Agent hereunder and/or under the other Credit Documents 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 and/or under the other Credit Documents until such time, if any, as the Required Lenders 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 Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor agent as provided above. -128- 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 other Agents in connection with the preparation, execution and delivery of the Credit Documents and the documents and instruments referred to therein and any amendment, waiver or consent relating thereto (including, without limitation, the reasonable fees and disbursements of White & Case, local and foreign counsel and, without duplication, the allocated costs of in-house counsel for the other Agents) and of the Administrative Agent and each of the other Agents in connection with their syndication efforts with respect to this Agreement and of the Administrative Agent, each of the other Agents, the Collateral Agent and each of the Lenders in connection with the enforcement of the Credit Documents and the documents and instruments referred to therein or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings (including, without limitation, the reasonable fees and disbursements of counsel and consultants for the Administrative Agent, each of the other Agents and the Collateral Agent as a group and, after the occurrence of an Event of Default, one additional counsel for the Lenders as a group); (ii) pay and hold each of the Lenders 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 Lenders 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 Lender) to pay such taxes; and (iii) indemnify the Administrative Agent, each of the other Agents, the Collateral Agent and each Lender, its officers, directors, employees, affiliates, 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 other Agent or any Lender 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 by or of (or on behalf of or at the direction of) Silgan or any of its Subsidiaries 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 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 (as determined by a court of competent jurisdiction -129- in a final and non-appealable decision)). To the extent that the undertaking to indemnify, pay or hold harmless the Administrative Agent, any other Agent or any Lender 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, the Administrative Agent and each Lender is hereby authorized at any time or from time to time 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 Administrative Agent or such Lender (including, without limitation, by branches and agencies of the Administrative Agent or such Lender (or Affiliates thereof) 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 the Administrative Agent or such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations purchased by such Lender 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 the Administrative Agent or such Lender 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 Lender shall exercise any such right of set-off without the prior consent of the Administrative Agent or the Required Lenders 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 Lenders and may be amended, modified or waived in any respect by the Required Lenders 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. 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 Lender, at its office specified opposite its name on Schedule IX; and if to the Administrative Agent, at the 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; -130- 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 Lender may transfer, assign or grant participations in its rights hereunder, such Lender shall remain a "Lender" 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 "Lender" hereunder and, provided further, that no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the final scheduled maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in which such participant is participating, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) (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 payable hereunder) 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 Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by any Borrower hereunder shall be determined as if such Lender had not sold such participation. (b) Notwithstanding the foregoing, any Lender (or any Lender together with one or more other Lenders) may (x) assign all or a portion of its Commitments and related outstanding Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding Obligations) hereunder to (i)(A) its parent company and/or any affiliate of such Lender which is at least 50% owned by such Lender or its parent company or (B) to one or more other Lenders or any affiliate of any such other Lender which is at least 50% owned by such other Lender or its parent company (provided that any fund that invests in loans and is managed or advised by the same investment advisor of another fund which is a Lender (or by an affiliate of such investment advisor) shall be treated as an affiliate of such other Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in the case of any Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor of any Lender or by an affiliate of such investment advisor or (y) assign all, or if less than all, a portion equal to at least $1,000,000 in the aggregate for the assigning Lender or assigning Lenders, of such Commitments and related outstanding Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding Obligations) hereunder to one or more Eligible Transferees (treating any fund that invests in loans and any other fund -131- that invests in loans and is managed 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 Lender by execution of an Assignment and Assumption Agreement, provided that (i) at such time, Schedule I shall be deemed modified to reflect the Commitments and/or outstanding Loans, as the case may be, of such new Lender and of the existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning Lender (or, upon such assigning Lender's indemnifying the respective Borrower or Borrowers for any lost Note pursuant to a customary indemnification agreement) new Notes will be issued, at the Borrowers' expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, 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 and/or outstanding Loans, as the case may be, (iii) the consent of the Administrative Agent shall be required in connection with any such assignment pursuant to clause (y) above (which consent shall not be unreasonably withheld or delayed), (iv) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500 and (v) no such transfer or assignment will be effective until recorded by the Administrative Agent in the Register pursuant to Section 12.16. At the time of each assignment pursuant to this Section 12.04(b) to a Person which is not already a Lender 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 Lender 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 Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments and outstanding Loans. To the extent that an assignment of all or any portion of a Lender'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 Lender 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 Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and, with prior notification to the Administrative Agent (but without the consent of the Administrative Agent or any Borrower), any Lender which is a fund may pledge all or any portion of its Loans and Notes to its trustee or to any other representative of holders of obligations owed or securities issued by such fund, in each case as security for such obligations or securities; provided, however, that (i) any foreclosure or similar action by such trustee or representative shall be subject to the provisions of this Section 12.04 concerning assignments and (ii) no pledge pursuant to this clause (c) shall release the transferor Lender from any of its obligations hereunder. 12.05 No Waiver; Remedies Cumulative. No failure or delay on the part of the Administrative Agent, any other Agent or any Lender 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 other Agent or any Lender or the -132- 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 and in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent, any other Agent, any Lender 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 other Agent, any Lender 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) Except as otherwise provided in this Agreement, 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 Lenders entitled thereto (other than any Lender 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 Lenders 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 Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all such Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of such Borrower to such Lenders in such amount as shall result in a proportional participation by all of the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lender, 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 Lenders as opposed to Defaulting Lenders. 12.07 Calculations: Computations. (a) The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with accounting principles generally accepted 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 Lenders); 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, Applicable Margin and Senior Leverage Ratio shall utilize accounting principles and policies in conformity with those used to prepare the audited -133- historical financial statements referred to in 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, Applicable Margin and Senior Leverage Ratio shall be determined on a Pro Forma Basis; provided further that (i) 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 non-cash amounts recorded (or required to be recorded) in accordance with FAS 133 or (III) to any unusual charges to the extent that cash is not expended during such period, but effect shall be given (and shall reduce EBITDA) in any future period to the extent that any cash payment is made on account of a non-cash unusual charge taken in a previous period, and (ii) for purposes of calculating the Applicable Commitment Commission Percentage, the Applicable Margin and all financial ratios and financial terms, the financial results of Unrestricted Subsidiaries shall be ignored. (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. (c) Notwithstanding anything to the contrary contained in clause (a) of this Section 12.07, for purposes of determining compliance with any incurrence tests set forth in Section 8 (excluding Sections 8.08 and 8.09 and the definitions of Applicable Commitment Commission Percentage, Applicable Margin, Senior Leverage Ratio and Consolidated Tangible Assets), any amounts so incurred or expended (to the extent incurred or expended in a currency other than Dollars) shall be converted into Dollars on the basis of the relevant exchange rates (as shown on the relevant page of Reuters or (x) if Reuters does not provide such exchange rates, as shown on the relevant page of the Wall Street Journal or (y) if the Wall Street Journal does not provide such exchange rates, on such other basis as is satisfactory to the Administrative Agent) as in effect on the date of such incurrence or expenditure under any provision of any such Section that has an aggregate Dollar limitation provided for therein. 12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (A) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND, EXCEPT TO THE EXTENT PROVIDED IN CERTAIN OF THE MORTGAGES, OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY 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 JURIS- -134- DICTION 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. WITHOUT LIMITING THE FOREGOING, EACH FOREIGN INCREMENTAL TERM LOAN BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS SILGAN (AND SILGAN HEREBY IRREVOCABLY ACCEPTS SUCH APPOINTMENT) AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF THE PROPERTY OF EACH SUCH FOREIGN INCREMENTAL TERM LOAN BORROWER, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER 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 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. -135- 12.10 Effectiveness. This Agreement shall become effective on the date (the "Effective Date") on which each of the Borrowers and the Lenders 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 Lenders, 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 Lender 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 and Waiver. (a) Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the Borrowers and the Required Lenders (although (i) modifications to, or supplements of, the Annexes to the respective Security Documents may be made in accordance with the provisions of such Security Documents and (ii) additional parties may be added to, and Subsidiaries of Silgan may be released from, the respective Guaranties and the Security Documents in accordance with the provisions thereof, in each case without the consent of the other Credit Parties party thereto or the Required Lenders), provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (with Obligations being directly affected thereby in the case of the following clauses (i) and (vi)), (i) extend the final scheduled maturity of any Loan or Note or extend the stated maturity of any Letter of Credit or the Total Revolving Loan Commitment beyond the Revolving Loan Maturity Date, or reduce the rate, or extend the time of payment, of interest or of 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 expressly provided in the Credit Documents (x) in connection with the termination of all Commitments hereunder and repayment in full of all Obligations owing pursuant hereto and pursuant to the other Credit Documents and (y) with respect to sales or other dispositions of property otherwise permitted under the Credit Documents) under all the Security Documents, (iii) amend, modify or waive any provision of this Section 12.12 (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Term Loans and the Revolving Loan Commitments on the Effective Date), (iv) reduce the percentage specified in the definition of Required Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders 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, (vi) amend, modify or waive (x) any -136- provisions in Sections 1.01(a), 1.01(b), 1.01(c), 1.01(d), 1.01(f), 1.15, 2.04 and 11.06 providing for Loans to be made, participations to be acquired, reimbursement payments to be made and/or indemnity payments to be made, ratably by the Lenders or Lenders of the respective Tranche, as the case may be, or (y) except as otherwise provided for in this Agreement, any provisions in Section 12.06 providing for payments to be made to, or shared in, ratably by the Lenders or Lenders of the respective Tranche, as the case may be (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in determining any ratable share pursuant to any such Sections referred to in this clause (vi) and adjustments to any such Section may be made consistent therewith), or (vii) consent to the release of Silgan, Containers, Manufacturing or Plastics from its obligations under the US Borrowers/Subsidiaries Guaranty except, in the case of Containers, Manufacturing or Plastics, in connection with a sale of all or substantially all of the assets of, or all of the capital stock of, Containers, Manufacturing or Plastics in a transaction permitted under this Agreement or that has been approved by the Required Lenders; provided further, that no such change, waiver, discharge or termination shall (t) (A) with respect to any required voluntary or mandatory Commitment reduction for any Tranche of Loans under Section 3.02(a) or 3.03(g), effect a non-pro rata reduction of any such Commitments of any Lender which would result in any such Lender receiving less than its pro rata share thereof without the consent of such Lender or (B) increase the Commitments of any Lender over the amount thereof then in effect without the consent of such Lender (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 Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase in the Commitment of such Lender), (u) without the consent of the Swingline Lender, alter its rights or obligations with respect to Swingline Loans, (v) without the consent of each Issuing Lender amend, modify or waive any provision of Section 2 or alter its rights or obligations with respect to Letters of Credit, (w) without the consent of the Administrative Agent or the other Agents, amend, modify or waive any provision of Section 11 as same applies to the Administrative Agent or the other Agents or any other provision as same relates to the rights or obligations of the Administrative Agent or the other Agents, (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) (A) without the consent of the Majority Lenders 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 Lenders of each Tranche in the case of an amendment to the definition of Majority Lenders), amend the definition of Majority Lenders 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), (c) or (d)) (although the Required Lenders may waive, in whole or in part, any such prepayment, repayment or commitment reduction, so long, as the application, as amongst the various Tranches, of any such prepayment, repayment or commitment reduction which is still required to be made is not altered) or (B) without the consent of the Majority Lenders of each Tranche, amend, modify or waive the definition of Sharing Event or the provisions of Section 1.15 (other than for technical amendments or modifications thereto that do not otherwise adversely affect the Lenders under any Tranche of Loans in a manner disproportionate from the effect on the Lenders under the other Tranches of Loans) or (z) without the consent of the Supermajority Lenders of the respective Tranche, amend the definition of Supermajority Lenders (it being understood that, -137- with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Supermajority Lender on substantially the same basis as the extensions of Term Loans and Revolving Loan Commitments are included on the Effective Date) or reduce the amount of, or shorten or extend, any A Term Loan Scheduled Repayment, B Term Loan Scheduled Repayment or Incremental 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 (vii), inclusive, of the first proviso to Section 12.12(a), the consent of the Required Lenders is obtained but the consent of one or more of the other Lenders whose consent is required is not obtained, then Silgan shall have the right, so long as all non-consenting Lenders whose individual consent is required are treated as described in either clause (A) or (B) below, to either (A) replace each such non-consenting Lender or Lenders (or, at the option of Silgan if the respective Lender's consent is required with respect to less than all Tranches of Loans (or related Commitments), to replace only the respective Tranche of Commitments and/or Loans of the respective non-consenting Lender which gave rise to the need to obtain such Lender's individual consent) with one or more Replacement Lenders pursuant to Section 1.13 so long as at the time of such replacement, each such Replacement Lender consents to the proposed change, waiver, discharge or termination or (B) terminate such non-consenting Lender's Revolving Loan Commitment and/or Incremental Term Loan Commitment (if such Lender's consent is required as a result of its Revolving Loan Commitment and/or Incremental Term Loan Commitment) and/or repay each Tranche of outstanding Loans of such Lender which gave rise to the need to obtain such Lender's consent and/or cash collateralize its applicable RL Percentage of the Letter of Credit of Outstandings, in accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless the Commitments which are terminated and Loans which are repaid pursuant to preceding clause (B) are immediately replaced in full at such time through the addition of new Lenders or the increase of the Commitments and/or outstanding Loans of existing Lenders (who in each case must specifically consent thereto), then in the case of any action pursuant to preceding clause (B) the Required Lenders (determined after giving effect to the proposed action) shall specifically consent thereto, provided further, that Silgan shall not have the right to replace a Lender, terminate its Commitments or repay its Loans solely as a result of the exercise of such Lender's rights (and the withholding of any required consent by such Lender) 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 Lender may transfer and carry its Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender. Notwithstanding anything to the contrary contained herein, to the extent that a transfer of Loans pursuant to this Section 12.14 would, at the time of such transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the respective Lender prior to such transfer, then no Borrower shall be obligated to pay such increased costs (although each Borrower shall be -138- 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 Lender 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 Lender or such Lender's holding or parent company if such Lender 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 Lender in writing as confidential, provided that any Lender 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 Lender 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 Lender, (v) that is already in possession of such Lender on a non-confidential basis, (vi) that is provided to such Lender on a non-confidential basis by a Person who in doing so has not violated a duty of confidentiality owing to any Lender 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 Obligations or Commitments or any interest therein by such Lender, provided that such prospective transferee (x) agrees with such Lender, to maintain the confidentiality provisions contained in this Section 12.15 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 information confidential to the same extent required of the Lender hereunder. (b) Each Borrower hereby acknowledges and agrees that each Lender may share with any of its Affiliates (including, in the case of any Lender that is a fund, such Lender'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 Lender). 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 Lenders, the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders and each repayment in respect of the principal amount of the Loans of each of the Lenders. 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 Lender, the transfer of the Commitment of such Lender 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 -139- 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 Lender shall surrender the Note (if any) evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender at the request of any such Lenders. Each Borrower agrees to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing 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 (as determined by a court of competent jurisdiction in a final and non-appealable decision). 12.17 Certain Agreements with Respect to 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 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 second paragraph of Section 4.03(a) of the 9% Senior Subordinated Debenture Indenture without relying on any other provision of the 9% Senior Subordinated Debenture Indenture. 12.18 Limitation on Additional Amounts, etc. Notwithstanding anything to the contrary contained in Sections 1.10, 1.11 or 2.06, unless a Lender 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 Lender 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 such Lender 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 Lender 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 Lender 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; provided however, that if the circumstances giving rise to such claims have a retroactive effect, such 135 day period shall be extended to include the period of such retroactive effect. This Section 12.18 shall have no applicability to any Section of this Agreement other than said Sections 1.10, 1.11 or 2.06. 12.19 Maximum Amount. (a) It is the intention of the Borrowers and the Lenders to conform strictly to the usury and similar laws relating to interest from time to time in -140- force, and all agreements between or among the Borrowers, the Administrative Agent and the Lenders, 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 Lenders or to Administrative Agent on behalf of the Lenders 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 supersede every other provision of all agreements between or among the Borrowers, the Administrative Agent and the Lenders. (b) If under any circumstances the Lenders 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 Lenders, the excess shall be deemed to have been a payment made by mistake and shall be refunded to the Borrowers. 12.20 Campbell Standstill Period/Campbell Repurchase. (a) Each of the Lenders hereby expressly acknowledges and agrees for the sole benefit of Campbell Soup that (i) the Administrative Agent shall be required to give Campbell Soup 30 days' prior written notice of the Lenders' decision to exercise any remedies against CanCo or CanCo Holding that may be available to the Lenders under the Credit Documents upon the occurrence of an Event of Default and (ii) neither the Administrative Agent nor the Lenders shall exercise any such remedies against CanCo or CanCo Holding until the expiration of such 30 day period; it being expressly understood and agreed, however, that (x) nothing in this Section 12.20 shall prevent either (A) the Total Commitment being automatically terminated and all Obligations becoming automatically due and payable upon the occurrence of an Event of Default under Section 9.05 or (B) the termination of the Total Commitment upon the occurrence of an Event of Default, (y) the 30 day standstill period referred to above in the case of an Event of Default under Section 9.05 shall commence upon the occurrence of such Event of Default and no notice to Campbell Soup shall be required and (z) the provisions of this Section 12.20(a) shall not apply to any Credit Party other than CanCo and CanCo Holding. Each of the Lenders and each of the Borrowers hereby acknowledges and agrees that the provisions of this Section 12.20(a) are for the sole benefit of Campbell Soup (and may not be amended, modified or waived without the prior -141- written consent of Campbell Soup) and that Campbell Soup shall be (and is hereby) a third party beneficiary of such provisions; it being understood and agreed, however, that the provisions of this Section 12.20(a) shall not affect any of the obligations that the Borrowers or any other Credit Party may have under this Agreement or any other Credit Document to which they are a party. (b) Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence of a Triggering Event, (i) the sale or other disposition (including by way of foreclosure or other purchase under the Campbell Can Pledge Agreement) of all, but not less than all, of the capital stock or assets of CanCo shall be permitted in accordance with the terms of the respective Campbell Can Acquisition Documents so long as at the time of such sale or other disposition, Campbell Soup has repaid directly to the Administrative Agent all outstanding Obligations of CanCo (other than accrued Fees which shall be repaid by Containers or any other Borrower other than CanCo) up to the CanCo Permitted Debt Amount at such time and in connection therewith, the assets so sold to Campbell Soup shall be sold free and clear of the Liens created by the respective Security Documents, it being understood that if the respective sale is of all of the capital stock of CanCo, CanCo shall be released of any further liabilities in respect of any Obligations incurred by it (although such other Obligations shall not be extinguished and shall remain outstanding and the other Credit Parties shall remain fully obligated in respect of all such Obligations under the Borrowers/Subsidiaries Guaranty) and (ii) Silgan shall promptly give the Administrative Agent written notice of such Triggering Event. Each of the Lenders and each of the Borrowers hereby acknowledges and agrees that the provisions of this Section 12.20(b) are for the sole benefit of Campbell Soup (and may not be amended, modified or waived without the prior written consent of Campbell Soup; although the provisions of this Section 12.20(b) are also for the benefit of (and binding against) the Borrowers and all the other Credit Parties to the extent necessary to enable them to effect such sale or other disposition and cause the release of the Liens on the respective assets) and that Campbell Soup shall be (and is hereby) a third party beneficiary of this Section 12.20(b). (c) Notwithstanding anything to the contrary contained in this Agreement, in no event shall Section 7.13 or 8.14(c)(2) or any of the terms thereof be changed, waived, discharged or terminated without the prior written consent of Campbell Soup. 12.21 Judgment Currency. (a) Each Credit Party's obligation hereunder and under the other Credit Documents to make payments in Dollars or in the case of an Alternate Currency Incremental Term Loan, the applicable Alternate Currency (in any such case, the "Obligation Currency") shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent, the Collateral Agent, the respective Issuing Lender or the respective Lender of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent, the Collateral Agent, such Issuing Lender or such Lender under this Agreement or the other Credit Documents. If for the purpose of obtaining or enforcing judgment against any Credit Party in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the "Judgment Currency") an amount due in the Obligation Currency, the conversion shall be made, at the Relevant Currency Equivalent thereof or, in the case of a conversion into currencies other than Dollars or a Primary Alternate Currency, at the rate of exchange -142- quoted by the Administrative Agent (or, if the Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by the Administrative Agent), determined, in each case, as of the day on which the judgment is given (such Business Day being hereinafter referred to as the "Judgment Currency Conversion Date"). (b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the respective Borrower or Borrowers covenant and agree to pay such additional amounts, if any (but in any event not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date. (c) For purposes of determining the Relevant Currency Equivalent or any other rate of exchange for this Section 12.21, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency. 12.22 Euro. (a) If at any time that an Alternate Currency Incremental Term Loan denominated in a Currency other than Euros is outstanding, the relevant Alternate Currency is replaced as the lawful currency of the country that issued such Approved Currency (the "Issuing Country") by the Euro so that all payments are to be made in the Issuing Country in Euros and not in the Alternate Currency previously the lawful currency of such country, then such Alternate Currency Incremental Term Loan shall be automatically converted into an Alternate Currency Incremental Term Loan denominated in Euros in a principal amount equal to the amount of Euros into which the principal amount of such Alternate Currency Incremental Term Loan would be converted pursuant to the EMU Legislation and thereafter no further Alternate Currency Incremental Term Loans will be available in such Alternate Currency, with the basis of accrual of interest, notice requirements and payment offices with respect to such converted Alternate Currency Incremental Term Loan to be that consistent with the convention and practices in the Euro-zone interbank market for Euro denominated loans. (b) In each case, to the maximum extent permitted under applicable law, the applicable Borrowers shall from time to time, at the request of any Lender, pay to such Lender the amount of any losses, damages, liabilities, claims, reduction in yield, additional expense, increased cost, reduction in any amount payable, reduction in the effective return of its capital, the decrease or delay in the payment of interest or any other return forgone by such Lender or its affiliates with respect to an Alternate Currency Incremental Term Loan affected by this Section 12.22 as a result of the tax or currency exchange resulting from the introduction, changeover to or operation of the Euro in any applicable nation or eurocurrency market. 12.23 Immunity. To the extent that any Foreign Incremental Term Loan Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, or otherwise) with respect to itself or its property, the respective Foreign Incremental Term Loan Borrower hereby irrevocably waives such immunity in respect of its obligations hereunder and under the other Credit Documents to which it is a party to the extent -143- permitted by applicable law and, without limiting the generality of the foregoing, agrees that the waivers set forth in this Section 12.23 shall be to the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States and are intended to be irrevocable for purposes of such Act. * * * -144- 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: 4 Landmark Square SILGAN HOLDINGS INC. Suite 400 Stamford, CT 06901 Attn: Treasurer By /s/ Frank W. Hogan, III Telephone: (203) 975-7110 ---------------------------------- Fax: (203) 975-7902 Name: Frank W. Hogan, III Title: Senior Vice President, General Counsel & Secretary 4 Landmark Square SILGAN CONTAINERS CORPORATION Suite 400 Stamford, CT 06901 Attn: Treasurer By /s/ Frank W. Hogan, III Telephone: (203) 975-7110 ---------------------------------- Fax: (203) 975-7902 Name: Frank W. Hogan, III Title: Vice President, General Counsel & Secretary 4 Landmark Square SILGAN PLASTICS CORPORATION Suite 400 Stamford, CT 06901 Attn: Treasurer By /s/ Frank W. Hogan, III Telephone: (203) 975-7110 ---------------------------------- Fax: (203) 975-7902 Name: Frank W. Hogan, III Title: Vice President, General Counsel & Secretary 4 Landmark Square SILGAN CONTAINERS MANUFACTURING Suite 400 CORPORATION Stamford, CT 06901 Attn: Treasurer By /s/ Frank W. Hogan, III Telephone: (203) 975-7110 ---------------------------------- Fax: (203) 975-7902 Name: Frank W. Hogan, III Title: Vice President, General Counsel & Secretary [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] 4 Landmark Square SILGAN CAN COMPANY Suite 400 Stamford, CT 06901 Attn: Treasurer By /s/ Frank W. Hogan, III Telephone: (203) 975-7110 ---------------------------------- Fax: (203) 975-7902 Name: Frank W. Hogan, III Title: Vice President, General Counsel & Secretary [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] DEUTSCHE BANK TRUST COMPANY AMERICAS, Individually and as Administrative Agent By /s/ Gina S. Thompson --------------------------------- Name: Gina S. Thompson Title: Director BANK OF AMERICA, N.A., Individually and as a Co-Syndication Agent By /s/ John W. Pocalyko --------------------------------- Name: John W. Pocalyko Title: Managing Director CITICORP USA, INC., Individually and as a Co-Syndication Agent By /s/ Dale R. Goncher --------------------------------- Name: Dale R. Goncher Title: Director [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] MORGAN STANLEY SENIOR FUNDING, INC., Individually and as a Co- Documentation Agent By /s/ Eric H. Coombs --------------------------------- Name: Eric H. Coombs Title: Vice President FLEET NATIONAL BANK, Individually and as a Co-Documentation Agent By /s/ Marwan Isbaih -------------------------------- Name: Marwan Isbaih Title: Director [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] NATIONAL CITY BANK By: /s/John Platek -------------------------------- Name: John Platek Title: Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] CREDIT INDUSTRIEL ET COMMERCIAL By: /s/Anthony Rock ------------------------------- Name: Anthony Rock Title: Vice President By: /s/Brian O'Leary ------------------------------- Name: Brian O'Leary Title: Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] MIZUHO CORPORATE BANK, LTD. By: /s/Nobuoki Koike ------------------------------- Name: Nobuoki Koike Title: Senior Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] BNP PARIBAS By: /s/Duane Helkowski -------------------------------- Name: Duane Helkowski Title: Director & Head of U.S. MidCap Group By: /s/Stephanie Rogers -------------------------------- Name: Stephanie Rogers Title: Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] Cooperative Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank International", New York Branch By: /s/Betty Mills ------------------------------- Name: Betty Mills Title: Executive Director By: /s/Barbara A. Hyland ------------------------------- Name: Barbara A. Hyland Title: Managing Director [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] ING CAPITAL LLC By: /s/William C. Povey ------------------------------- Name: William C. Povey Title: Managing Director [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] CITIZENS BANK OF MASSACHUSETTS By: /s/Daniel G. Eastman ------------------------------- Name: Daniel G. Eastman Title: Senior Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] ALLFIRST BANK By: /s/Mark X. Fidati ------------------------------- Name: Mark X. Fidati Title: Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] TRANSAMERICA BUSINESS CAPITAL CORPORATION By: /s/Stephen K. Goetschius ------------------------------- Name: Stephen K. Goetschius Title: Senior Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] ALLIED IRISH BANKS plc By: /s/Rima Terradista ------------------------------- Name: Rima Terradista Title: Senior Vice President By: /s/John Farrace ------------------------------- Name: John Farrace Title: Senior Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG By: /s/Brandon A. Meyerson ------------------------------- Name: Brandon A. Meyerson Title: Vice President Erste Bank New York Branch By: /s/John S. Runnion ------------------------------- Name: John S. Runnion Title: Managing Director Erste Bank New York Branch [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] BANK LEUMI USA By: /s/Aliz Sadan ------------------------------- Name: Aliz Sadan Title: Assistant Treasurer [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] PEOPLE'S BANK By: /s/David K. Sherrill ------------------------------- Name: David K. Sherrill Title: Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] WEBSTER BANK By: /s/Gail Bruhn ------------------------------- Name: Gail Bruhn Title: Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] PROTECTIVE LIFE INSURANCE COMPANY By: /s/Richard J. Bielen ------------------------------- Name: Richard J. Bielen Title: Sr. VP, CIO & Treasurer [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] THE SUMITOMO TRUST & BANKING CO., LTD. New York Branch By: /s/Frances Wynne ------------------------------- Name: Frances Wynne Title: Vice President [SIGNATURE PAGE TO SILGAN CREDIT AGREEMENT] EX-99.2 4 securityagmt.txt US SECURITY AGREEMENT DATED AS OF JUNE 28, 2002 EXECUTION COPY US SECURITY AGREEMENT among SILGAN HOLDINGS INC., SILGAN CONTAINERS CORPORATION, SILGAN PLASTICS CORPORATION, SILGAN CONTAINERS MANUFACTURING CORPORATION, SILGAN CAN COMPANY, CERTAIN OTHER SUBSIDIARIES OF SILGAN HOLDINGS INC. and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent ------------------------- Dated as of June 28, 2002 -------------------------
TABLE OF CONTENTS ----------------- Page ---- ARTICLE I SECURITY INTERESTS......................................................................................2 1.1 Grant of Security Interests..........................................................................2 1.2 Power of Attorney....................................................................................4 ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS......................................................4 2.1 Necessary Filings....................................................................................4 2.2 No Liens.............................................................................................5 2.3 Other Financing Statements...........................................................................5 2.4 Chief Executive Office, Record Locations.............................................................5 2.5 Location of Inventory and Equipment..................................................................5 2.6 Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc....................................................5 2.7 Trade Names; Etc.....................................................................................6 2.8 Certain Significant Transactions.....................................................................6 2.9 Non-UCC Property.....................................................................................7 2.10 As-Extracted Collateral; Timber-to-be-Cut...........................................................7 2.11 Collateral in the Possession of a Bailee............................................................7 2.12 Recourse............................................................................................7 ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL.................................................................................8 3.1 Additional Representations and Warranties............................................................8 3.2 Maintenance of Records...............................................................................8 3.3 Direction to Account Debtors; Contracting Parties; etc...............................................8 3.4 Modification of Terms; etc...........................................................................9 3.5 Collection...........................................................................................9 3.6 Instruments.........................................................................................10 3.7 Assignors Remain Liable Under Accounts..............................................................10 3.8 Assignors Remain Liable Under Contracts.............................................................10 3.9 Deposit Accounts; Etc...............................................................................10 3.10 Letter-of-Credit Rights............................................................................11 3.11 Commercial Tort Claims.............................................................................12 3.12 Chattel Paper......................................................................................12 3.13 Further Actions....................................................................................12 ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS..............................................................12 4.1 Additional Representations and Warranties...........................................................12 4.2 Licenses and Assignments............................................................................13 (i) 4.3 Infringements.......................................................................................13 4.4 Preservation of Marks...............................................................................13 4.5 Maintenance of Registration.........................................................................13 4.6 Future Registered Marks.............................................................................14 4.7 Remedies............................................................................................14 ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS....................................15 5.1 Additional Representations and Warranties...........................................................15 5.2 Licenses and Assignments............................................................................15 5.3 Infringements.......................................................................................15 5.4 Maintenance of Patents or Copyright.................................................................16 5.5 Prosecution of Patent 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 Additional Information..............................................................................17 6.4 Further Actions.....................................................................................18 6.5 Financing Statements................................................................................18 ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT......................................................18 7.1 Remedies; Obtaining the Collateral Upon Default.....................................................18 7.2 Remedies; Disposition of the Collateral.............................................................20 7.3 Waiver of Claims....................................................................................20 7.4 Application of Proceeds. (a).......................................................................21 7.5 Remedies Cumulative.................................................................................24 7.6 Discontinuance of Proceedings.......................................................................24 ARTICLE VIII INDEMNITY...........................................................................................24 8.1 Indemnity...........................................................................................24 8.2 Indemnity Obligations Secured by Collateral; Survival...............................................26 ARTICLE IX DEFINITIONS...........................................................................................26 ARTICLE X MISCELLANEOUS..........................................................................................33 10.1 Notices............................................................................................33 10.2 Waiver; Amendment..................................................................................34 10.3 Obligations Absolute...............................................................................34 10.4 Successors and Assigns.............................................................................34 10.5 Headings Descriptive...............................................................................35 10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.............................35 (ii) 10.7 Assignor's Duties..................................................................................36 10.8 Termination; Release...............................................................................36 10.9 Counterparts.......................................................................................37 10.10 Severability......................................................................................37 10.11 The Collateral Agent and the other Secured Creditors..............................................37 10.12 Benefit of Agreement..............................................................................37 10.13 Additional Assignors..............................................................................38 ANNEX A Schedule of Chief Executive Offices Address(es) of Chief Executive Office ANNEX B Schedule of Inventory and Equipment Locations ANNEX C Schedule of Legal Names, Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility), Jurisdiction of Organization, Location and Organizational Identification Numbers ANNEX D Schedule of Trade and Fictitious Names ANNEX E Description of Certain Significant Transactions Occurring Within One Year Prior to the Date of the Security Agreement ANNEX F Schedule of Deposit Accounts ANNEX G Form of Control Agreement Regarding Deposit Accounts ANNEX H Schedule of Commercial Tort Claims ANNEX I Schedule of Marks ANNEX J Schedule of Patents ANNEX K Schedule of Copyrights ANNEX L Grant of Security Interest in United States Trademarks ANNEX M Grant of Security Interest in United States Patents ANNEX N Grant of Security Interest in United States Copyrights (iii)
SECURITY AGREEMENT ------------------ SECURITY AGREEMENT, dated as of June 28, 2002 (as the same may be amended, modified and/or supplemented from time to time, this "Agreement"), made by each of the undersigned assignors (each an "Assignor" and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.13 hereof, the "Assignors") in favor of DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent (together with any successor Collateral Agent, the "Collateral Agent"), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, all 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"), Silgan Containers Manufacturing Corporation ("Manufacturing"), Silgan Can Company ("CanCo"), each other Borrower from time to time party thereto, the lenders from time to time party thereto (the "Lenders", and each, a "Lender"), Deutsche Bank Trust Company Americas, as Administrative Agent (in such capacity, and together with any successor administrative agent, the "Administrative Agent"), Bank of America, N.A. and Citicorp USA, Inc., as Co-Syndication Agents (in such capacity, the "Co-Syndication Agents"), Morgan Stanley Senior Funding, Inc. and Fleet National Bank, as Co-Documentation Agents (in such capacity, the "Co-Documentation Agents"), Deutsche Bank Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers (in such capacity, the "Joint Lead Arrangers"), and Deutsche Bank Securities Inc., Banc of America Securities LLC and Salomon Smith Barney Inc., as Joint Book Managers (in such capacity, the "Joint Book Managers") have entered into a Credit Agreement, dated as of June 28, 2002 (as amended, modified and/or supplemented from time to time, the "Credit Agreement"), providing for the making of Loans to and the issuance of, and participation in, Letters of Credit for the account of, the Borrowers as contemplated therein (the Lenders, the Administrative Agent, the Issuing Lenders, the Co-Syndication Agents, the Co-Documentation Agents, the Joint Lead Arrangers, the Joint Book Managers and the Collateral Agent are collectively referred to herein as the "Lender Creditors"); WHEREAS, (i) Silgan has heretofore entered into two Interest Rate Protection Agreements with The Bank of New York (together with its affiliates, collectively "BNY") (as such Interest Rate Protection Agreements are in effect on the date hereof and without giving effect to any extension, renewal or replacement thereof, the "Existing BNY Interest Rate Protection Agreements"), and (ii) one or more of the Borrowers or Subsidiaries thereof are, or may from time to time be, party to one or more other Interest Rate Protection Agreements or Other Hedging Agreements with any Lender or an affiliate of a Lender (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns and BNY solely in respect of the Existing BNY Interest Rate Protection Agreements, are herein called the "Other Creditors", and together with the Lender Creditors are herein called, the "Secured Creditors"); WHEREAS, pursuant to the US Borrowers/Subsidiaries Guaranty, each Assignor (other than CanCo except as may be required after the date hereof pursuant to the Credit Agreement) has jointly and severally guaranteed to the Secured Creditors the payment when due of all indebtedness, obligations and liabilities of each Borrower and Subsidiary thereof under or with respect to the Credit Documents, the Interest Rate Protection Agreements and the Other Hedging Agreements; WHEREAS, it is a condition precedent to the making of Loans to each Borrower and the issuance of, and participation in, 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 will obtain benefits from the incurrence of Loans by and the issuance of, and participation in, Letters of Credit for the account of, the Borrowers under the Credit Agreement and the entering into by one or more of the Borrowers or Subsidiaries thereof of Interest Rate Protection Agreements and Other Hedging Agreements and, accordingly, each Assignor desires to enter into this Agreement in order to satisfy the condition 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, for the benefit of the Secured Creditors, in each case a continuing security interest in all of the right, title and interest of such Assignor in, to and under all of the following personal property and fixtures (and all rights therein) of such Assignor, or in which or to which such Assignor has any rights, in each case whether now existing or hereafter from time to time acquired: (i) each and every Account; (ii) all cash; (iii) the Cash Collateral Account and all monies, securities, Instruments and other investments deposited or required to be deposited in the Cash Collateral Account; (iv) all Chattel Paper ( including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper); (v) all Commercial Tort Claims described in Annex H hereto; -2- (vi) all computer programs of such Assignor and all intellectual property rights therein and all other proprietary information of such Assignor, including, but not limited to, Trade Secret Rights; (vii) all Contracts, together with all Contract Rights arising thereunder; (viii) all Copyrights; (ix) all Equipment; (x) all Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts maintained by such Assignor with any Person and all monies, securities, Instruments and other investments deposited or required to be deposited in any of the foregoing; (xi) all Documents; (xii) all General Intangibles; (xiii) all Goods; (xiv) all Instruments (other than Instruments constituting Pledged Securities); (xv) all Inventory; (xvi) all Investment Property (other than Investment Property required to be pledged under the US Pledge Agreement); (xvii) all Letter-of-Credit Rights (whether or not the respective letter of credit is evidenced by a writing); (xviii) 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; (xix) all Patents; (xx) all Permits; (xxi) all Software and all Software licensing rights, all writings, plans, specifications and schematics, all engineering drawings, customer lists, goodwill and licenses, and all recorded data of any kind or nature, regardless of the medium of recording; (xxii) all Supporting Obligations; and (xxiii) all Proceeds and products of any and all of the foregoing (all of the above including this clause (xxiii), the "Collateral"). -3- Notwithstanding the foregoing, the term "Collateral" shall not include any Account and related asset from and after the time that the 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, or with respect to which any Assignor may obtain rights, at any time during the term 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. 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, recordings and other actions necessary 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 recordations or other actions, the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral creates a valid and, together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein (other than Permitted Liens) 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 possession or control (within the meaning of the UCC as in effect on the date hereof in the State of New York), by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction or by the filing of a Grant of Security Interest in the respective form attached hereto (as Annex L, M or N) in the United States Patent and Trademark Office or in the United States Copyright Office, as the case may be. 2.2 No Liens. Such Assignor is, and as to all 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 -4- (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 (after giving effect to the Loans incurred on the date hereof), there is no financing statement (or similar statement 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 in respect of Permitted Liens), and so long as the Termination Date has not occurred, 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 in connection with Permitted Liens. 2.4 Chief Executive Office, Record Locations. The chief executive office of such Assignor is, on the date of this Agreement, located at the address indicated on Annex A hereto for such Assignor. During the period of the four calendar months preceding the date of this Agreement, the chief executive office of such Assignor has not been located at any address other than that indicated on Annex A in accordance with the immediately preceding sentence, in each case unless each such other address is also indicated on Annex A hereto for such Assignor. 2.5 Location of Inventory and Equipment. All Inventory and Equipment held on the date hereof, or held at any time during the four calendar months prior to the date hereof, by each Assignor is located at one of the locations shown on Annex B hereto for such Assignor. 2.6 Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc. As of the date hereof, the exact legal name of each Assignor, the type of organization of such Assignor, whether or not such Assignor is a Registered Organization, the jurisdiction of organization of such Assignor, such Assignor's Location, the organizational identification number (if any) of each Assignor, and whether or not such Assignor is a Transmitting Utility, is listed on Annex C hereto for such Assignor. No Assignor shall change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its status as a Transmitting Utility or as a Person which is not a Transmitting Utility, as the case may be, its jurisdiction of organization, its Location, or its organizational identification number (if any) from that listed on Annex C hereto for such Assignor, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) any Assignor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 10 days' prior written notice of each change to the information listed on Annex C (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex C which shall correct all information contained therein for the respective Assignor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral -5- Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Assignor does not have an organizational identification number on the date hereof and later obtains one, such Assignor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect. 2.7 Trade Names; Etc. No Assignor has or operates in any jurisdiction under, or in the preceding five years has had or has operated in any jurisdiction under, any trade names, fictitious names or other names except its legal name as specified in Annex C and such other trade or fictitious names as are listed on Annex D hereto for such Assignor. 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' written notice of its intention so to do, clearly describing such new name and the jurisdictions in which such new name will be used and providing such other information in connection therewith as 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. 2.8 Certain Significant Transactions. During the one year period preceding the date of this Agreement, no Person has merged or consolidated with or into any Assignor, and no Person has liquidated into, or transferred all or substantially all of its assets to, any Assignor, in each case except as described in Annex E hereto. With respect to any transactions so described in Annex E hereto, the respective Assignor shall have furnished such information with respect to the Person (and the assets of the Person and locations thereof) which merged with or into or consolidated with such Assignor, or was liquidated into or transferred all or substantially all of its assets to such Assignor, and shall have furnished to the Collateral Agent such UCC lien searches as may have been requested with respect to such Person and its assets, to establish that no security interest (excluding Permitted Liens) continues perfected on the date hereof with respect to any Person described above (or the assets transferred to the respective Assignor by such Person), including without limitation pursuant to Section 9-316(a)(3) of the UCC. 2.9 Non-UCC Property. The aggregate fair market value (as determined by the Assignors in good faith) of all property of the Assignors of the types described in clauses (1), (2) and (3) of Section 9-311(a) of the UCC does not exceed $5,000,000. If the aggregate value of all such property at any time owned by all Assignors exceeds $5,000,000, the Assignors shall provide prompt written notice thereof to the Collateral Agent and, upon the request of the Collateral Agent, the Assignors shall promptly (and in any event within 30 days) take such actions (at their own cost and expense) as may be required under the respective United States, State or other laws referenced in Section 9-311(a) of the UCC to perfect the security interests granted herein in any Collateral where the filing of a financing statement does not perfect the security interest in such property in accordance with the provisions of Section 9-311(a) of the UCC. -6- 2.10 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof, no Assignor owns, or expects to acquire, any property which constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut in an aggregate amount for all Assignors of $2,000,000 or more. If at any time after the date of this Agreement the Assignors own, acquire or obtain rights to As-Extracted Collateral or Timber-to-be-Cut in an aggregate amount of $1,000,000 or more, such Assignors shall furnish the Collateral Agent with prompt written notice thereof (which notice shall describe in reasonable detail or the As-Extracted Collateral and/or Timber-to-be-Cut and the locations thereof) and shall take all actions as may be deemed reasonably necessary or desirable by the Collateral Agent to perfect the security interest of the Collateral Agent therein. 2.11 Collateral in the Possession of a Bailee. If any Inventory or other Goods in an aggregate amount for all Assignors of $2,000,000 or more are at any time in the possession of a bailee, the respective Assignors shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its reasonable best efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of the respective Assignors. The Collateral Agent agrees with the Assignors that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to any such bailee. 2.12 Recourse. This Agreement is made with full recourse to each Assignor pursuant to upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL 3.1 Additional Representations and Warranties. As of the time when each of its Accounts (other than Accounts in an immaterial aggregate amount) arises, each Assignor shall be deemed to have represented and warranted that each such Account, and all records, papers and documents relating thereto (if any) are genuine and 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 Accounts and Contracts, including, but not limited to, originals (with facsimile copies being deemed to constitute originals) of all documentation (including each Contract) with respect thereto, 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 -7- 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 Accounts and Contract Rights (including, without limitation, all documents evidencing the Accounts 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 Accounts and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Accounts and Contracts with an appropriate reference to the fact that such Accounts 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 Accounts 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 Accounts 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 Accounts 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 of collection (including reasonable attorneys' fees), whether incurred by an 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 (x) 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 and (y) no such notice shall be required if an Event of Default of the type described in Section 9.05 of the Credit Agreement has occurred and is continuing. 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 practices of such Assignor, no Assignor shall rescind or cancel any indebtedness evidenced by any Account 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 Account 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 Accounts or Contracts and will not do anything to impair any rights of the Collateral Agent in the Accounts 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 Accounts 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 -8- collection procedures) any and all amounts owing under or on account of such Account or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account 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 Accounts 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 $250,000 and having a maturity longer than 60 days and otherwise constituting Collateral, such Assignor will within 10 Business Days thereafter 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 additional Collateral hereunder. 3.7 Assignors Remain Liable Under Accounts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Accounts 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 Accounts. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Account (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 Creditor of any payment relating to such Account 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 Account (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 Account (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 -9- 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 Deposit Accounts; Etc. (a) No Assignor maintains, or at any time after the date of this Agreement shall establish or maintain, any demand, time, savings, passbook or similar account, except for such accounts maintained with a bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in accordance with Section 9-304 of the UCC) is within a State of the United States. Annex F hereto accurately sets forth, as of the date of this Agreement, for each Assignor, each Deposit Account maintained by such Assignor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account is maintained, and the jurisdiction of the respective Lender with respect to such Deposit Account, in each case except for local Deposit Accounts which in the aggregate for all of the Assignors do not hold more than $5,000,000 of cash and Cash Equivalents at any one time (although no more than $200,000 in the aggregate may be held in any single local Deposit Account). For each Deposit Account (other than the Cash Collateral Account or any other Deposit Account maintained with the Collateral Agent), the respective Assignor shall use its commercially reasonable efforts to cause the bank with which the Deposit Account is maintained to execute and deliver to the Collateral Agent, within 90 days after the date of this Agreement or, if later, at the time of the establishment of the respective Deposit Account, a "control agreement" in the form of Annex G hereto (appropriately completed), with such changes thereto as may be acceptable to the Collateral Agent. If any bank with which a Deposit Account is maintained refuses to, or does not, enter into such a "control agreement", then the respective Assignor shall, to the extent reasonably requested by the Collateral Agent, promptly close the respective Deposit Account and transfer all balances therein to another Deposit Account meeting the requirements of this Section 3.9. If any bank with which a Deposit Account is maintained refuses to subordinate all its claims with respect to such Deposit Account to the Collateral Agent's security interest therein on terms satisfactory to the Collateral Agent, then the Collateral Agent, in its reasonable discretion, may (but will have no obligations to) (x) require that such Deposit Account be terminated in accordance with the immediately preceding sentence or (y) agree to a "control agreement" without such subordination, provided that in such event the Collateral Agent may at any time, at its option, subsequently require that such Deposit Account be terminated (within 30 days after notice from the Collateral Agent) in accordance with the requirements of the immediately preceding sentence. (b) After the date of this Agreement, no Assignor shall establish any new demand, time, savings, passbook or similar account, except for Deposit Accounts established and maintained with banks and meeting the requirements of preceding clause (a). At the time any such Deposit Account is established, the appropriate "control agreement" shall be entered into in accordance with the requirements of preceding clause (a) and the respective Assignor shall furnish to the Collateral Agent a supplement to Annex F hereto containing the relevant information with respect to the respective Deposit Account and the bank with which same is established. 3.10 Letter-of-Credit Rights. If any Assignor is at any time a beneficiary under a letter of credit with a stated amount of $500,000 or more, such Assignor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, such Assignor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, -10- use its reasonable best efforts to (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of such letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in this Agreement after the occurrence and during the continuance of an Event of Default. 3.11 Commercial Tort Claims. All Commercial Tort Claims of each Assignor as of the date of this Agreement are described in Annex H hereto. If any Assignor shall at any time and from time to time after the date of this Agreement become aware of any Commercial Tort Claim in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $3,000,000 or more, such Assignor shall (i) promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest in all such Commercial Tort Claims and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agent and (ii) perform all actions reasonably requested by the Collateral Agent to perfect such security interest in such Commercial Tort Claims. 3.12 Chattel Paper. Upon the request of the Collateral Agent made at any time or from time to time, each Assignor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper held or owned by such Assignor. Furthermore, if requested by the Collateral Agent, each Assignor shall promptly take all actions which are reasonably practicable so that the Collateral Agent has "control" of all Electronic Chattel Paper in accordance with the requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in any event within 20 days) following any request by the Collateral Agent, deliver all of its Tangible Chattel Paper to the Collateral Agent. 3.13 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, including any and all actions as may be necessary or required under the Federal Assignment of Claims Act, relating to its Accounts, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require. 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 I 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 -11- 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 a Grant of Security Interest in United States Trademarks in the form of Annex L 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 a Grant of Security Interest in United States Trademarks 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 Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Mark absent prior written approval of the Collateral Agent. 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 in accordance with reasonable business practices any Person infringing any material Mark owned by such Assignor. 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 and to take all such other actions as are necessary to preserve such material 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 material Mark in the event such Assignor determines, in its reasonable business judgment, that the preservation of such material 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 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, 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, -12- 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 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 is issued 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 in the form of Annex L hereto 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. 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 J 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 K 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 -13- 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 the claims of 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 on any rights in any third party patent or copyright or that such Assignor has misappropriated in any material respect any trade secret or proprietary information. Each Assignor represents and warrants that upon the recordation of a Grant of Security Interest in United States Patents in the form of Annex M hereto in the United States Patent and Trademark Office and the recordation of a Grant of Security Interest in United States Copyrights in the form of Annex N hereto in the United States Copyright Office, together with filings on Form UCC-1 pursuant to this Agreement, all filings, registrations and recordings necessary 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 a Grant of Security Interest in United States Patents covering all right, title and interest in each United States Patent of such Assignor and to record the same and to execute such a Grant of 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 United States. Patent and Trademark Office or the United States 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 Secured Debt Agreements, 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, to prosecute in accordance with reasonable business practice any Person infringing any material Patent or material Copyright or any Person misappropriating any material Trade Secret Right. 5.4 Maintenance of Patents or Copyright 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, -14- 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. 5.5 Prosecution of Patent Applications. At its own expense, each Assignor shall diligently prosecute all applications for (i) United States Patents listed in Annex J hereto and (ii) Copyrights listed on Annex K hereto, in each case 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 or not to abandon any such application in the event such Assignor determines, in its reasonable business judgment, that the prosecuting or maintenance of any 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 Patent, or certificate or registration of, or application therefor, 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 in the form of Annex M or N hereto, as appropriate, 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, Copyrights and Trade Secret Rights 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, Copyrights 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 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 otherwise permitted by the Secured Debt Agreements, 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 Secured Debt Agreements. If any Assignor shall fail to insure -15- 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 terms of 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 Assignor 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 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 Additional Information. Each Assignor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 20 days after its receipt of the respective request) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be reasonably requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it shall promptly (and in any event within 20 days after its receipt of the respective request) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent. 6.4 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 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, as the Collateral Agent reasonably requests to perfect, preserve or protect its security interest in the Collateral. 6.5 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 (subject to Permitted Liens) as provided herein and the other rights and security contemplated hereby all in accordance with the UCC 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, -16- 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 AN 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 and under the other provisions of this Agreement, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect 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 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 Accounts 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 and may exercise any and all remedies of such Assignor in respect of such Collateral; (iii) instruct all banks which have entered into a control agreement with the Collateral Agent to transfer all monies, securities and instruments held by such depositary bank to the Cash Collateral Account; (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 reasonable 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 -17- (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 the Collateral in reasonable working condition; (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); (vii) apply any monies constituting Collateral or proceeds thereof in accordance with the provisions of Section 7.4; and (viii) take any other action as specified in clauses (1) through (5), inclusive, of Section 9-607 of the UCC; 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. By accepting the benefits of this Agreement and each other Security Document, the Secured Creditors expressly acknowledge and agree that this Agreement and each other Security Document 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 any other Security Document or to realize upon the security to be granted hereby or thereby, 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 and the other Security Documents. 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 sale, lease or other disposition may be effected by means of a public disposition or private disposition, effected in accordance with the applicable requirements (in each case if and to the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements of applicable law as may apply to the respective disposition. The Collateral Agent may, without notice or publication, adjourn any public or private disposition or cause the same to be adjourned from time to time by announcement at the time and place fixed for the disposition, and such disposition may be made at any time or place to which the disposition may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may -18- bid for and become the purchaser (and may pay all or any portion of the purchase price by crediting Obligations against the purchase price) of the Collateral or any item thereof, offered for disposition in accordance with this Section 7.2 without accountability to the relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted 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 the applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be necessary to make such disposition or dispositions of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor's expense. 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 each Assignor hereby further waives, to the extent permitted by law: (i) all damages occasioned by such taking of possession or any such disposition except to the extent any damages are the result of the Collateral Agent's gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision); (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 (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 monies collected by the Collateral Agent (or, to the extent the US Pledge Agreement, the US Mortgages or the Additional Security Documents constituting US Security Documents require proceeds of collateral under such US Security Documents to be applied in accordance with the provisions of this Agreement, the -19- Pledgee or Mortgagee under such other US Security Document) upon any sale or other disposition of the Collateral, together with all other monies 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), (iv) and (v) of the definition of "Obligations"; (ii) second, to the extent proceeds remain after the application pursuant to the preceding clause (i), to the payment of all amounts owing to the Administrative Agent of the type described in clauses (v) and (vi) of the definition of "Obligations"; (iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), 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 its 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; (iv) fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, an amount equal to the outstanding Secondary 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 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 (v) fifth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), 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 and using the Dollar Equivalent thereof in the case of an amount expressed in a currency other than Dollars) 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, premium and interest on, all Loans, all Unpaid Drawings, the Stated Amount on all outstanding Letters of Credit and all Fees and (ii) in the case of the Other Obligations, all amounts due under the Interest Rate Protection Agreements and the Other Hedging 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. -20- (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 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 Lender 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 Lender Creditors, as cash security for the repayment of Obligations owing to the Lender 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 Lender 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 Lender Creditors, to the Administrative Agent under the Credit Agreement for the account of the Lender 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 such Representative for any Other Creditors or the Other Creditors, as the case may be 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 Lender Creditors or the Other Creditors, as the case may be. Unless the Collateral Agent has received written notice from a Lender Creditor or an Other Creditor to the contrary, the Administrative Agent and each Representative, in furnishing information pursuant to the preceding sentence, the -21- Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations are outstanding. Unless the Collateral Agent has received 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 and the Other Hedging Agreements entitled to the benefits of this Agreement 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. (h) Notwithstanding anything to the contrary contained in this Section 7.4, it is understood that, until such time as CanCo is no longer subject to the restrictions contained in the relevant Campbell Can Acquisition Documents restricting CanCo from being jointly liable with the other Assignors, CanCo shall not be jointly and severally liable with the other Assignors for any deficiency described in Section 7.4(g) to the extent such joint and several liability is prohibited by such Campbell Can Acquisition Documents, but shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral hereunder and the amount of its own 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 to the Collateral Agent under this Agreement, the other Secured Debt Agreements 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 thereof. 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 reasonable attorneys' fees, and the amounts thereof shall be included in such judgment. 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. -22- 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, assigns, employees, affiliates, servants and agents (hereinafter in this Section 8.1 referred to individually as "Indemnitee," and collectively as "Indemnitees") harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable attorneys' fees and expenses) (for the purposes of this Section 8.1 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 other Secured Debt Agreement or any other document executed in connection herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby 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 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 (as determined by a court of competent jurisdiction in a final and non-appealable decision). 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) Without limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by any Assignor in -23- this Agreement, any other Secured Debt Agreement or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Secured Debt Agreement. (d) 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. (e) Notwithstanding anything to the contrary contained in this Section 8.1, until such time as the CanCo Restrictions are no longer in effect, CanCo shall not be jointly and severally liable with the other Assignors for any indemnity obligations under this Section 8.1 to the extent such joint and several liability is prohibited by such CanCo Restrictions, but will remain obligated for indemnity obligations with respect to its own actions. 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 of the other Obligations and notwithstanding the full payment of all the Notes issued, and Loans made, under the Credit Agreement, the termination of all Letters of Credit issued under the Credit Agreement, the termination of all Interest Rate Protection Agreements and Other Hedging Agreements entered into with the Other Creditors and the payment of all other Obligations and notwithstanding the discharge thereof. 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. "Account" 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, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State. Without limiting the foregoing, the term "account" shall include all Health-Care-Insurance Receivables. "Administrative Agent" shall have the meaning provided in the recitals to this Agreement. -24- "Agreement" shall have the meaning provided in the first paragraph hereof. "As-Extracted Collateral" shall mean "as-extracted collateral" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Assignor" shall have the meaning provided in the first paragraph of this Agreement. "BNY" shall have the meaning provided in the recitals to this Agreement. "Borrower" shall have the meaning provided in the recitals to this Agreement. "CanCo" 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 mean "chattel paper" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. Without limiting the foregoing, the term "Chattel Paper" shall in any event include all Tangible Chattel Paper and all Electronic Chattel Paper. "Class" shall have the meaning provided in Section 10.2 of this Agreement. "Co-Documentation Agents" shall have the meaning provided in the recitals to this Agreement. "Co-Syndication Agents" 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. "Commercial Tort Claims" shall mean "commercial tort claims" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Containers" shall have the meaning provided in the recitals to this Agreement. "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. -25- "Contracts" shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, licensing agreements and any partnership agreements, joint venture agreements, operating agreements and limited liability company agreements), but excluding any contract that is governed by a law other than that of the United States or any State thereof to the extent that the terms of any such contract prohibit the granting of a security interest therein which would be enforceable under any such applicable foreign law. "Copyrights" shall mean any United States copyright owned by any Assignor, including any registrations of any copyrights, in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent 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. "Deposit Accounts" shall mean all "deposit accounts" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Documents" shall mean "documents" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Electronic Chattel Paper" shall mean "electronic chattel paper" as such term is defined 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, and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto. "Event of Default" shall mean any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Obligations after the expiration of any applicable grace period. "Existing BNY Interest Rate Protection Agreements" shall have the meaning provided in the recitals to this Agreement. -26- "General Intangibles" shall mean "general intangibles" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Goods" shall mean "goods" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Health-Care-Insurance Receivable" shall mean any "health-care-insurance receivable" as such term is defined 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(a) of this Agreement. "Instruments" shall mean "instruments" as such term is defined 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 and all accessions thereto, 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. "Investment Property" shall mean "investment property" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Joint Book Managers" shall have the meaning provided in the recitals to this Agreement. "Joint Lead Arrangers" shall have the meaning provided in the recitals to this Agreement. "Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Lender Creditors" shall have the meaning provided in the recitals to this Agreement. "Lenders" shall have the meaning provided in the recitals to this Agreement. "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. -27- "Location" of any Assignor, shall mean such Assignor's "location" as determined pursuant to Section 9-307 of the UCC. "Manufacturing" shall have the meaning provided in the recitals to this Agreement. "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 in any equivalent foreign 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 and include all of the following: (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, principal, premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor or any Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, fees, costs and indemnities) of each Assignor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Assignor is a party (including, in the case of each Assignor that is a Guarantor, all such obligations, liabilities and indebtedness of such Assignor under the US Borrowers/Subsidiaries Guaranty) and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations, liabilities or indebtedness with respect to Interest Rate Protection Agreements or Other Hedging 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, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor or any Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Assignor to the Other Creditors under, or with respect to (including, in the case of each Assignor that is a Guarantor, all such obligations, liabilities and indebtedness of such Assignor under the US Borrowers/Subsidiaries Guaranty), each Interest Rate Protection Agreement and Other Hedging Agreement entitled to the benefits of this Agreement, whether such Interest Rate -28- Protection Agreement or Other Hedging Agreement is now in existence or hereafter arising, and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained therein (all such obligations, liabilities and indebtedness described in 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 Collateral; (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Assignor referred to in clauses (i) and (ii) 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; (v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 8.1 of this Agreement; and (vi) all amounts owing to the Administrative Agent pursuant to any of the Credit Documents in its capacity as such; it being acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. "Other Creditors" shall have the meaning provided in the recitals of 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 any right, title or interest therein, and any divisions, continuations (including, but not limited to, continuations-in-parts) and improvements thereof, as well as any application for a United States patent now or hereafter made by any Assignor. "Permits" shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency. "Plastics" shall have the meaning provided in the recitals to this Agreement. "Primary Obligations" shall have the meaning provided in Section 7.4(b) of this Agreement. "Pro Rata Share" shall have the meaning provided in Section 7.4(b) of this Agreement. -29- "Proceeds" shall mean all "proceeds" as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof and, in any event, shall also 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. "Registered Organization" shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York. "Representative" shall have the meaning provided in Section 7.4(e) of this Agreement. "Required Secured Creditors" shall mean (i) at any time when any Credit Document Obligations are outstanding or any Commitments under the Credit Agreement exist, the Required Lenders (or, to the extent provided in Section 12.12 of the Credit Agreement, each of the Lenders) and (ii) at any time after all of the Credit Document Obligations have been paid in full in cash and all Commitments under the Credit Agreement have been terminated and no further Commitments may be provided thereunder, 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. "Secured Debt Agreements" shall mean and include this Agreement, the other Credit Documents and the Interest Rate Protection Agreements and Other Hedging Agreements entitled to the benefits of this Agreement entered into with an Other Creditor. "Silgan" shall have the meaning provided in the recitals to this Agreement. "Software" shall mean "software" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Supporting Obligations" shall mean any "supporting obligation" 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, or in which any Assignor has any rights, and, in any event, shall include, but shall not be limited to all of such Assignor's rights in any Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all -30- security for, any Account, Chattel Paper, Document, General Intangible, Instrument or Investment Property. "Tangible Chattel Paper" shall mean "tangible chattel paper" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Termination Date" shall have the meaning provided in Section 10.8(a) of this Agreement. "Timber-to-be-Cut" shall mean "timber-to-be-cut" as such term is used in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Trade Secret Rights" shall have the meaning provided in Section 5.1 of this Agreement. "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction. 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 sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by 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 Collateral Agent or any Assignor shall not be effective until received by the Collateral Agent or such Assignor, as the case may be. All notices and other communications shall be in writing and addressed as follows: (a) if to any Assignor, at: c/o Silgan Holdings Inc. 4 Landmark Square Suite 400 Stamford, CT 06901 Tel: (203) 975-7110 Fax: (203) 975-4598 Attention: General Counsel (b) if to the Collateral Agent, at: Deutsche Bank Trust Company Americas 233 S. Wacker Drive 84th Floor -31- Chicago, Illinois 60606 Tel: (312) 993-8116 Fax: (312) 993-8150 Attention: Marla Brefka Heller (c) if to any Lender Creditor, other than the Collateral Agent, at such address as such Lender 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 Silgan and the Collateral Agent; or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. 10.2 Waiver; Amendment. Except as provided in Sections 10.8 and 10.13 hereof, none of the terms and conditions of this Agreement, any other Security Document or any Guaranty may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor (or Guarantor, as the case may be) directly affected thereby and the Collateral Agent (with the written consent of the Required Secured Creditors); provided, however, 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) also shall require the written consent of the Requisite Creditors of such affected Class. For the purpose of this Agreement, the term "Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender 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 Lenders (or, to the extent provided in Section 12.12 of the Credit Agreement, each of the Lenders), and (y) with respect to the Other Obligations, the holders of at least a majority of the outstanding principal amount of all Other Obligations outstanding from time to time. 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 or any other Secured Debt Agreement; or (c) any amendment to or modification of any Secured Debt Agreement or any security for any of the Obligations; whether or not such 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 (although no Assignor may assign its rights and obligations hereunder except in accordance with the provisions of the Secured Debt Agreements) and shall inure to the benefit of the Collateral Agent and the other Secured Creditors and their respective successors and assigns. 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 -32- the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements 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; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) 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. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR 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 ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH ASSIGNOR 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 SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION. (b) EACH ASSIGNOR 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 -33- 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. 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 date upon which the Total Commitment and all Interest Rate Protection Agreements and Other Hedging Agreements entitled to the benefits of this Agreement have been terminated, no Note, Loan 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 other indemnities set forth in any other Security Documents, in each case which are not then due and payable) have been paid in full in cash. (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, such Collateral shall be sold or released free and clear of the Liens created by this Agreement and the Collateral Agent, at the request and expense of such Assignor, will execute and deliver such documentation to evidence such release ( including UCC-3 termination or partial release statements and the like) and will 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. -34- (d) The Collateral Agent shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with this Section 10.8. 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 each Assignor and the Collateral Agent. 10.10 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. 10.11 The Collateral Agent and the other Secured Creditors. The Collateral 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 and in the Credit Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in Section 11 of the Credit Agreement. 10.12 Benefit of Agreement. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns. 10.13 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 requirements of the Credit Agreement or any other Credit Document shall automatically become an Assignor hereunder by executing a counterpart hereof and delivering the same to the Collateral Agent. Silgan agrees that it shall and shall cause any such Subsidiary that becomes an Assignor hereunder to (i) deliver supplements to Annexes A through F, inclusive, and H through K, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Assignor on such date and (ii) take all actions as specified in this Agreement as would have been taken by such Assignor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken to the reasonable satisfaction of the Collateral Agent. ***** -35- 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 --------------------------------- Name: Frank W. Hogan, III Title: Senior Vice President, General Counsel and Secretary SILGAN CONTAINERS CORPORATION, as an Assignor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN PLASTICS CORPORATION, as an Assignor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN CONTAINERS MANUFACTURING CORPORATION, as an Assignor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN CAN COMPANY, as an Assignor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN CORPORATION, as an Assignor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN LLC, as an Assignor By: SILGAN CONTAINERS MANUFACTURING COMPANY, as Manager By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary RXI PLASTICS, INC., as an Assignor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN VACUUM CLOSURE HOLDING COMPANY, as an Assignor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary Accepted and Agreed to: DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent By: /s/Gina S. Thompson --------------------------------- Name: Gina S. Thompson Title: Director EX-99.3 5 pledgeagmt.txt US PLEDGE AGREEMENT DATED AS OF JUNE 28, 2002 EXECUTION COPY US PLEDGE AGREEMENT ------------------- PLEDGE AGREEMENT, dated as of June 28, 2002 (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 30 hereof, the "Pledgors") to DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent (together with any successor 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"), Silgan Containers Manufacturing Corporation ("Manufacturing"), Silgan Can Company ("CanCo"), each other Borrower from time to time party thereto, the lenders from time to time party thereto (the "Lenders", and each, a "Lender"), Deutsche Bank Trust Company Americas, as Administrative Agent (in such capacity, and together with any successor administrative agent, the "Administrative Agent"), Bank of America, N.A. and Citicorp USA, Inc., as Co-Syndication Agents (in such capacity, the "Co-Syndication Agents"), Morgan Stanley Senior Funding, Inc. and Fleet National Bank, as Co-Documentation Agents (in such capacity, the "Co-Documentation Agents"), Deutsche Bank Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers (in such capacity, the "Joint Lead Arrangers"), and Deutsche Bank Securities Inc., Banc of America Securities LLC and Salomon Smith Barney Inc., as Joint Book Managers (in such capacity, the "Joint Book Managers"), have entered into a Credit Agreement, dated as of June 28, 2002 (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 Lenders, the Administrative Agent, the Issuing Lenders, the Co-Syndication Agents, the Co-Documentation Agents, the Joint Lead Arrangers, the Joint Book Managers and the Pledgee are collectively referred to herein as the "Lender Creditors"); WHEREAS, (i) Silgan has heretofore entered into two Interest Rate Protection Agreements with The Bank of New York (together with its affiliates, collectively "BNY") (as such Interest Rate Protection Agreements are in effect on the date hereof and without giving effect to any extension, renewal or replacement thereof, the "Existing BNY Interest Rate Protection Agreements"), and (ii) one or more of the Borrowers or Subsidiaries thereof are, or may from time to time be, party to one or more other Interest Rate Protection Agreements or Other Hedging Agreements with any Lender or an affiliate of a Lender (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns and BNY solely in respect of the Existing BNY Interest Rate Protection Agreements, are herein called the "Other Creditors" and, together with the Lender Creditors, are herein called the "Secured Creditors"); WHEREAS, pursuant to the US Borrowers/Subsidiaries Guaranty, each Pledgor (other than CanCo except as may be required after the date hereof pursuant to the Credit Agreement) has jointly and severally guaranteed to the Secured Creditors the payment when due of all indebtedness, obligations and liabilities of each Borrower and Subsidiary thereof under or with respect to the Credit Documents, the Interest Rate Protection Agreements and the Other Hedging Agreements; WHEREAS, it is a condition precedent to the making of Loans to each Borrower and the issuance of, and participation in, Letters of Credit for the account of each Revolving Borrower under the Credit Agreement that the Pledgors shall have executed and delivered to the Pledgee this Agreement; and WHEREAS, each Pledgor will obtain benefits from the incurrence of Loans by, and the issuance of, and participation in, Letters of Credit for the account of, the Borrowers under the Credit Agreement and the entering into by one or more of the Borrowers and/or Subsidiaries thereof of Interest Rate Protection Agreements and Other Hedging Agreements and, accordingly, each Pledgor desires to enter into this Agreement in order to satisfy the condition 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, liabilities and indebtedness (including, without limitation, principal, premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor or any Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, fees, costs and indemnities) of such Pledgor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Pledgor is a party (including, in the case of each Pledgor that is a Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under the US Borrowers/Subsidiaries Guaranty) and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations, liabilities or indebtedness with respect to Interest Rate Protection Agreements or Other Hedging Agreements entitled to the benefits of this Agreement, being herein collectively called the "Credit Document Obligations"); 2 (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor or any Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Pledgor to the Other Creditors under, or with respect to (including, in the case of each Pledgor that is a Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under the US Borrowers/Subsidiaries Guaranty), each Interest Rate Protection Agreement and Other Hedging Agreement entitled to the benefits of this Agreement, whether such Interest Rate Protection Agreement or Other Hedging Agreement is now in existence or hereafter arising, and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained therein (all such obligations, liabilities and indebtedness described in 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 of such Pledgor 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 Pledgee of its rights hereunder, together with reasonable attorneys' fees and court costs; (v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 11 of this Agreement; and (vi) all amounts owing to any Agent or any of its affiliates pursuant to any of the Credit Documents in its capacity as such; all such indebtedness, obligations, liabilities, sums and expenses set forth in clauses (i) through (vi) of this Section 1 being herein collectively called the "Obligations;" it being acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. 2. DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa. (b) The following capitalized terms used herein shall have the definitions specified below: "Administrative Agent" shall have the meaning provided in the recitals hereof. "Adverse Claim" shall mean "adverse claim" as such term defined in Section 8-102(a)(1) of the UCC. 3 "Agreement" shall have the meaning provided in the first paragraph hereof. "Borrower" shall have the meaning provided in the recitals hereof. "BNY" shall have the meaning provided in the recitals hereof. "CanCo" shall have the meaning provided in the recitals hereof. "Certificated Security" shall mean "certificated security" as such term is defined in Section 8-102(a)(4) of the UCC. "Clearing Corporation" shall mean "clearing corporation" as such term is defined in Section 8-102(a)(5) of the UCC. "Co-Documentation Agents" shall have the meaning provided in the recitals hereof. "Collateral Accounts" shall mean any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited. "Collateral" shall have the meaning provided in Section 3.1 of this Agreement. "Containers" shall have the meaning provided in the recitals hereof. "Co-Syndication Agents" shall have the meaning provided in the recitals hereof. "Credit Agreement" shall have the meaning provided in the recitals hereof. "Credit Document Obligations" shall have the meaning provided in Section 1 of this Agreement. "Domestic Corporation" shall have the meaning provided in the definition of "Stock" in this Section 2. "Event of Default" shall mean any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Obligations after the expiration of any applicable grace period. "Excluded Equity Interests" shall mean any Stock, Limited Liability Company Interest or Partnership Interest in any Person that is not a Subsidiary of Silgan to the extent that such equity interests are prohibited from being pledged hereunder by the terms of the respective stockholders agreement, partnership agreement, membership agreement, operating agreement, joint venture agreement or other agreement, as the case may be; provided that (i) any equity interests constituting Excluded Equity Interests shall only constitute Excluded Equity Interests until such time as such Person becomes a Subsidiary of Silgan or such Excluded Equity Interests are no longer subject to such prohibitions and (ii) notwithstanding the foregoing, any distributions or dividends received or to be received by a Pledgor in respect of an Excluded Equity Interest shall be subject to the security interests created by this Agreement (other than any such distributions or dividends paid in Stock, Limited Liability Company Interests or Partnership Interests, as applicable, of such Person). 4 "Existing BNY Interest Rate Protection Agreements" shall have the meaning provided in the recitals hereof. "Financial Asset" shall mean "financial asset" as such term is defined in Section 8-102(a)(9) of the UCC. "Foreign Corporation" shall have the meaning provided in the definition of "Stock" of this Agreement. "Indemnitees" shall have the meaning provided in Section 11 of this Agreement. "Instrument" shall mean "instrument" as such term is defined in Section 9-102(a)(47) of the UCC. "Investment Property" shall mean "investment property" as such term is defined in Section 9-102(a)(49) of the UCC. "Joint Book Managers" shall have the meaning provided in the recitals hereof. "Joint Lead Arrangers" shall have the meaning provided in the recitals hereof. "Lender Creditors" shall have the meaning provided in the recitals hereof. "Lenders" shall have the meaning provided in the first recital hereof. "Limited Liability Company Assets" shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned or represented by any Limited Liability Company Interest. "Limited Liability Company Interests" shall mean the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company. "Location" of any Pledgor, shall mean such Pledgor's "location" as determined pursuant to Section 9-307 of the UCC. "Manufacturing" shall have the meaning provided in the recitals hereof. "Non-Voting Stock" shall mean all capital stock of a foreign corporation which is not Voting Stock. "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. "Obligations" shall have the meaning provided in Section 1 of this Agreement. "Other Creditors" shall have the meaning provided in the recitals hereof. 5 "Other Obligations" shall have the meaning provided in Section 1 of this Agreement. "Partnership Assets" shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned or represented by any Partnership Interest. "Partnership Interest" shall mean the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership. "Plastics" shall have the meaning provided in the recitals hereof. "Pledged Notes" shall have the meaning provided in Section 3.5 of this Agreement. "Pledgee" shall have the meaning provided in the first paragraph of this Agreement. "Pledgor" shall have the meaning provided in the first paragraph of this Agreement. "Proceeds" shall mean all "proceeds" as such term is defined in Section 9-102(a)(64) of the UCC and, in any event, shall also include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Pledgee or any Pledgor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due any payable to any Pledgor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by and 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. "Registered Organization" shall mean "registered organization" as such term is defined in 9-102(a)(70) of the UCC. "Required Secured Creditors" shall have the meaning provided in the US Security Agreement. "Secured Creditors" shall have the meaning provided in the recitals hereof. "Secured Debt Agreements" shall have the meaning provided in Section 5 of this Agreement. "Securities Account" shall mean "securities account" as such term is defined in Section 8-501(a) of the UCC. "Securities Act" shall mean the Securities Act of 1933, as amended, as in effect from time to time. 6 "Security Entitlement" shall mean "security entitlement" as such term is defined in Section 8-102(a)(17) of the UCC. "Security" shall mean a "security" as such term is defined in Section 8-102(a)(15) of the UCC and shall in any event include all Stock and Notes. "Silgan" shall have the meaning provided in the recitals hereof. "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 corporation at any time owned by any Pledgor of any Domestic Corporation 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. "Termination Date" shall have the meaning provided in Section 20 of this Agreement. "Transmitting Utility" shall mean "transmitting utility" as such term is defined in Section 9-102(a)(80) of the UCC. "UCC" means the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific sections or subsections of the UCC are references to such sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof. "Uncertificated Security" shall mean an "uncertificated security" as such term is defined in Section 8-102(a)(18) of the UCC. "Voting Stock" shall mean all classes of capital stock of any Foreign Corporation entitled to vote. 3. PLEDGE OF SECURITIES, ETC. ------------------------- 3.1 Pledge. To secure the Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Pledgee for the benefit of the Secured Creditors, and does hereby create, in each case a continuing security interest in favor of the Pledgee for the benefit of the Secured Creditors in all of the right, title and interest of such Pledgor in and to the following, whether now existing or hereafter from time to time acquired (collectively, the "Collateral"): (a) each of the Collateral Accounts, including any and all assets of whatever type or kind deposited by such Pledgor in any such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, monies, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in any such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise 7 distributed in respect of or in exchange for any or all of the foregoing; (b) all Securities held or owned by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities; (c) all Limited Liability Company Interests held or owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: (A) all the capital thereof and its interest in all profits, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests; (B) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; (C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests; (D) all present and future claims, if any, of such Pledgor against any such limited liability company for monies loaned or advanced, for services rendered or otherwise; (E) all of such Pledgor's rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and (F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; 8 (d) all Partnership Interests held or owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: (A) all the capital thereof and its interest in all profits, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests; (B) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; (C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests; (D) all present and future claims, if any, of such Pledgor against any such partnership for monies loaned or advanced, for services rendered or otherwise; (E) all of such Pledgor's rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing (with all of the foregoing rights only to be exercisable upon the occurrence and during the continuation of an Event of Default); and (F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; (e) all Financial Assets and Investment Property of such Pledgor from time to time; (f) all Security Entitlements of such Pledgor from time to time in any and all of the foregoing; and 9 (g) all Proceeds of any and all of the foregoing. Notwithstanding anything to the contrary contained in this Section 3.1 or in Section 3.3 hereof, (x) except as otherwise provided in Section 7.10 of the Credit Agreement, no Pledgor (to the extent that it is a Borrower or a Domestic Subsidiary of a Borrower) shall be required at any time to pledge hereunder, and clause (b) above shall not apply to, more than 65% of the Voting Stock of any Foreign Corporation, (y) each Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at any time and from time to time acquired by such Pledgor of any Foreign Corporation and (z) in no event shall the term "Collateral" include, and no Pledgor shall be required to pledge, (I) the Stock of CanCo (until such time as such Stock is no longer subject to the terms of the Campbell Can Pledge Agreement or otherwise prohibited to be pledged hereunder by any of the Campbell Can Acquisition Documents) or (II) any Excluded Equity Interests (except as otherwise provided in the definition thereof). 3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) for the benefit of the Pledgee and the Secured Creditors: (i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall physically deliver such Certificated Security to the Pledgee, endorsed to the Pledgee or endorsed in blank; (ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall cause the issuer of such Uncertificated Security (or, in the case of an issuer that is not a Subsidiary of a Pledgor, use its reasonable efforts to cause such issuer) to duly authorize, execute and deliver to the Pledgee an agreement for the benefit of the Pledgee and the other Secured Creditors substantially in the form of Annex H hereto (appropriately completed to the satisfaction of the Pledgee and with such modifications, if any, as shall be satisfactory to the Pledgee) pursuant to which such issuer agrees to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction; (iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), the respective Pledgor shall promptly notify the Pledgee thereof and shall promptly take all actions required (i) to comply with the applicable rules of such Clearing Corporation and (ii) to perfect the security interest of the Pledgee under applicable law (including, in any event, under Sections 9-314(a) and (c), 9-106 and 8-106 (d) of the UCC). The Pledgor further agrees to take such actions requested by the Pledgee as the Pledgee deems reasonably necessary or desirable to effect the foregoing; 10 (iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii) hereof; and (v) with respect to any Note, physical delivery of such Note to the Pledgee, endorsed to the Pledgee or endorsed in blank. (b) In addition to the actions required to be taken pursuant to preceding Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Securities and Collateral: (i) with respect to all Collateral of such Pledgor of which the Pledgee may obtain "control" within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), the respective Pledgor shall take all actions as may be reasonably requested from time to time by the Pledgee so that "control" of such Collateral is obtained and at all times held by the Pledgee; and (ii) each Pledgor shall from time to time cause appropriate financing statements (on Form UCC-1 or other appropriate form) under the Uniform Commercial Code as in effect in the various relevant States, in form satisfactory to the Pledgee and covering all Collateral hereunder, to be filed in the relevant filing offices so that at all times the Pledgee has a security interest in all Investment Property and other Collateral which is perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-312(a) of the UCC). 3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend or otherwise) any additional Collateral at any time or from time to time after the date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, the Pledgor will promptly thereafter take (or cause to be taken) all action with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Pledgee (i) a certificate executed by an executive officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii) supplements to Annexes A through F hereto as are necessary to cause such annexes to be complete and accurate at such time. 3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral. 11 3.5 Definition of Pledged Notes. All Notes at any time pledged or required to be pledged hereunder are hereinafter called the "Pledged Notes". 3.6 Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that on the date hereof (i) the exact legal name of such Pledgor, the type of organization of such Pledgor, whether or not such Pledgor is a Registered Organization, the jurisdiction of organization of such Pledgor, such Pledgor's Location, the organizational identification number (if any) of such Pledgor, and whether or not such Pledgor is a Transmitting Utility, is listed on Annex A hereto; (ii) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex B hereto; (iii) the Stock held by such Pledgor consists of the number and type of shares of the stock of the corporations as described in Annex C hereto; (iv) such Stock referenced in clause (iii) of this paragraph constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex C hereto; (v) the Notes held by such Pledgor consist of the promissory notes described in Annex D hereto where such Pledgor is listed as the lender; (vi) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (vii) each such Limited Liability Company Interest referenced in clause (vi) of this paragraph constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex E hereto; (viii) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex F hereto; (ix) each such Partnership Interest referenced in clause (viii) of this paragraph constitutes that percentage or portion of the entire partnership interest of the Partnership as set forth in Annex F hereto; (x) such Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes C through F hereto; (xi) the Excluded Equity Interests owned by such Pledgor on the date hereof are described in Annex H hereto; and (xii) other than Excluded Equity Interests, on the date hereof, such Pledgor owns no other Securities, Limited Liability Company Interests or Partnership Interests. 4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If and to the extent necessary to enable the Pledgee to perfect its security interest in any of the Collateral or to exercise any of its remedies hereunder, the Pledgee shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the discretion of the Pledgee) in the name of the relevant 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. 5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing an Event of Default and written notice thereof shall have been given by the Pledgee to the relevant Pledgor (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 Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate or be inconsistent with any of the terms of this Agreement, the Credit Agreement, any other Credit Document or any Interest Rate Protection Agreement or Other Hedging Agreement entitled to the benefits of this 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 in the Collateral. 12 All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing and written notice thereof shall have been given to the relevant Pledgor as (but only to the extent) described above, and Section 7 hereof shall become applicable. 6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have occurred and be continuing an Event of Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral 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, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash dividends other than as set forth above) paid or distributed by way of dividend or otherwise in respect of the Collateral; (ii) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash other than as set forth above) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and (iii) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash other than as set forth above) 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 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. Each Pledgor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Pledgee, in addition to any rights now or hereafter existing under applicable law, the other provisions of this Agreement or any other Secured Debt Agreement, shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, 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 to exercise all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in any relevant jurisdiction and also 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 otherwise payable under Section 6 hereof to the respective Pledgor; 13 (ii) to transfer all or any part of the Collateral into the Pledgee's name or the name of its nominee or nominees (although the Pledgee agrees to promptly notify the relevant Pledgor after any such transfer; provided, however, that the failure to give such notice shall not affect the validity of any such transfer); (iii) to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful 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 in accordance with (and to the extent required by) Section 5 hereof, to vote all or any part of the Collateral (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); (v) at any time and 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 purchase (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 the respective Pledgor. The Pledgee shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. 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; and (vi) to set-off any and all Collateral against any and all Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations; it being understood that each Pledgor'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 Pledgee shall be entitled to a decree requiring specific performance by such Pledgor of said obligation. By accepting the benefits of this Agreement and each other Security Document, the Secured Creditors expressly acknowledge and agree that this Agreement and each other Security Document may be enforced only by the action of the Administrative Agent or the Pledgee acting upon the instructions of the Required Secured Creditors and that no other Secured Creditor shall have any right individually to seek to enforce this Agreement or any other Security Document or 14 to realize upon the security to be granted hereby or thereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement and the other Security Documents. 8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and remedy of the Pledgee or any other Secured Creditor 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 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. No notice to or demand on any Pledgor 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 Pledgee or any other Secured Creditor to any other or further action in any circumstances without notice or demand. 9. APPLICATION OF PROCEEDS. (a) All monies collected by the Pledgee upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies received by the Pledgee hereunder, shall be applied in the manner provided in Section 7.4 of the US 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. (c) Notwithstanding anything to the contrary contained in this Section 9, CanCo shall not be jointly and severally liable with the other Pledgors for any deficiency described in Section 9(b) above to the extent that such joint and several liability is prohibited by the applicable CanCo Restrictions then in effect, although CanCo shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the amount of its own 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, reimburse and hold harmless the Pledgee in such capacity, each other Secured Creditor and their respective successors, assigns, employees, affiliates, agents and servants (hereinafter in this Section 11 referred to individually an "Indemnitee," and, collectively the "Indemnitees") from and against any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and losses of whatsoever kind or nature, and (ii) to reimburse each 15 Indemnitee for any and all costs, expenses and disbursements, including reasonable attorneys' fees and expenses, in each case growing out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding any liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments, losses, expenses, costs or disbursements to the extent incurred by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision)). In no event shall the Pledgee be liable, in the absence of gross negligence or willful misconduct on its part, for any matter or thing in connection with this Agreement other than to account for monies actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. Notwithstanding anything to the contrary contained in this Agreement, CanCo shall not be jointly and severally liable with the other Pledgors for any indemnity obligations under this Section 11 to the extent such joint and several liability is prohibited by the applicable CanCo Restrictions then in effect, although CanCo shall remain obligated for indemnity obligations with respect to its own actions. 12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or as a partner of any partnership and neither the Pledgee nor any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor, any Pledgor and/or any other Person. (b) Except as provided in the last sentence of paragraph (a) of this Section 12, the Pledgee, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor or any limited liability company or partnership either before or after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12. (c) The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected. (d) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral. 16 13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees to execute and deliver to the Pledgee such financing statements, in form reasonably acceptable to the Pledgee, as the Pledgee may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Pledgee to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby. Each Pledgor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Pledgor hereby authorizes the Pledgee to file any such financing statements without the signature of such Pledgor where permitted by law (and such authorization includes describing the Collateral as "all assets" of such Pledgor). (b) Each Pledgor hereby constitutes and appoints the Pledgee 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 Pledgor or otherwise) to act, require, demand, receive, compound and give acquaintance for any and all monies and claims for monies due or to become due to such Pledgor 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 Pledgee may deem to be necessary or advisable to protect the interests of the Secured Creditors, which appointment as attorney is coupled with an interest. 14. THE PLEDGEE AS COLLATERAL 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 by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees 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 and in Section 11 of the Credit Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Section 11 of the Credit Agreement. 15. TRANSFER BY THE 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 the Secured Debt Agreements). 16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants that: (i) it is the legal, beneficial and record owner of, and has good and marketable title to, all Collateral pledged by it hereunder and that it has sufficient interest in all Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement); (ii) it has full power, authority and legal right to pledge all the Collateral 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 17 against such Pledgor 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 generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); (iv) except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, member, partner 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 (a) the execution, delivery or performance of this Agreement, (b) the validity or enforceability of this Agreement (except as set forth in clause (iii) above), (c) the perfection or enforceability of the Pledgee's security interest in the Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein; (v) the execution, delivery and performance of this Agreement will not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to such Pledgor, or of the certificate of incorporation, operating agreement, limited liability company agreement, partnership agreement or by-laws of such Pledgor or of any securities issued by such Pledgor or any of its Subsidiaries, or of any mortgage, deed of trust, indenture, lease, loan agreement, credit agreement or other material contract, agreement or 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 (or the obligation to create or impose) 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 of the Collateral (consisting of Securities, Limited Liability Company Interests or Partnership Interests) has been duly and validly issued and acquired, is fully paid and non-assessable and is subject to no options to purchase or similar rights; (vii) each of the Pledged Notes constituting Intercompany Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in 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 generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); and (viii) the pledge, collateral assignment and delivery to the Pledgee of the Collateral consisting of Certificated Securities pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated 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 and the Pledgee is entitled to all the rights, 18 priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and (ix) "control" (as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over all Collateral consisting of Securities with respect to which such "control" may be obtained pursuant to Section 8-106 of the UCC; provided that in the case of the Pledgee obtaining "control" over Collateral consisting of a Security Entitlement, such Pledgor shall have taken all steps in its control so that the Pledgee obtains "control" over such Security Entitlement. (b) 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 each 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. (c) Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Secured Debt Agreement. 17. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC. The exact legal name of each Pledgor, the type of organization of such Pledgor, whether or not such Pledgor is a Registered Organization, the jurisdiction of organization of such Pledgor, such Pledgor's Location, the organizational identification number (if any) of each Pledgor, and whether or not such Pledgor is a Transmitting Utility, is listed on Annex A hereto for such Pledgor. No Pledgor shall change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its status as a Transmitting Utility or as a Person which is not a Transmitting Utility, as the case may be, its jurisdiction of organization, its Location, or its organizational identification number (if any) from that listed on Annex A hereto for such Pledgor, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) any Pledgor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Pledgee not less than 10 days' prior written notice of each change to the information listed on Annex A (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex A which shall correct all information contained therein for the respective Pledgor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Pledgee to maintain the security interests of the Pledgee in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Pledgor does not have an organizational identification number on the date hereof and later obtains one, such Pledgor shall promptly thereafter notify the Pledgee of such organizational identification number and shall take all actions reasonably satisfactory to the Pledgee to the extent necessary to maintain the security interest of the Pledgee in the Collateral intended to be granted hereby fully perfected and in full force and effect. 19 18. 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, without 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 including, without limitation, 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 any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding; whether or not such Pledgor shall have notice or knowledge of any of the foregoing. 19. REGISTRATION, ETC. (a) If there shall have occurred and be continuing an Event of Default then, and in every such case, upon receipt by any Pledgor from the Pledgee of 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 Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests, 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 declared effected (and be kept effective) as may be so requested and as would permit or facilitate the sale and distribution of such Collateral, 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 reasonably 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 such Collateral 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 determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or 20 Partnership Interests pursuant to Section 7 hereof, and the Collateral 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 Collateral, as the case may be, 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. 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 Collateral 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 Collateral 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 Collateral at a price which the Pledgee, in its sole and absolute discretion, in good faith deems 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. 20. TERMINATION; RELEASE. (a) After the Termination Date, this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive 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 (including Uniform Commercial Code termination statements on Form UCC-3) 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 date upon which the Total Commitment and all Interest Rate Protection Agreements and Other Hedging Agreements entitled to the benefits of this Agreement have been terminated, no Note, Loan 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 in cash. (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 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 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 the possession of the Pledgee and has not theretofore been released pursuant to this Agreement. (c) At any time that the respective Pledgor desires that Collateral be released as provided in the foregoing Section 20(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 20(a) or (b) hereof. 21 (d) The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with this Section 20. 21. NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled or sent by 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 Pledgee or any Pledgor shall not be effective until received by the Pledgee or such Pledgor, as the case may be. All notices and other communications shall be in writing addressed as follows: (a) if to any Pledgor, at: c/o Silgan Holdings Inc. 4 Landmark Square Suite 400 Stamford, CT 06901 Tel: (203) 975-7110 Fax: (203) 975-4598 Attention: General Counsel (b) if to the Pledgee, at: Deutsche Bank Trust Company Americas 233 S. Wacker Drive 84th Floor Chicago, Illinois 60606 Tel: (312) 993-8116 Fax: (312) 993-8150 Attention: Marla Brefka Heller (c) if to any Lender Creditor, other than the Pledgee, either (x) to the Administrative Agent, at the address of the Administrative Agent specified in the Credit Agreement or (y) at such address as such Lender 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 Silgan 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. 22. WAIVER; AMENDMENT. Except as provided in Sections 20 and 30 hereof, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in accordance with the terms of the US Security Agreement. 22 23. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon each Pledgor and its successors and assigns (although no Pledgor may assign its rights and obligations hereunder except in accordance with the provisions of the Secured Debt Agreements) and shall inure to the benefit of the Pledgee and the other Secured Creditors and their respective successors and assigns. All agreements, statements, representations and warranties made by each Pledgor herein or in any certificate or other instrument delivered by such Pledgor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf. 24. 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. 25. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) 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. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PLEDGOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PLEDGOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH PLEDGOR. EACH PLEDGOR 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 ANY SUCH PLEDGOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 21 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PLEDGOR 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 SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PLEDGEE UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION. (b) EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY 23 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. 26. PLEDGOR'S DUTIES. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Pledgor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Pledgee shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Pledgee be required or obligated in any manner to perform or fulfill any of the obligations of any Pledgor under or with respect to any Collateral. 27. 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 each Pledgor and the Pledgee. 28. 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. 29. RECOURSE. This Agreement is made with full recourse to each Pledgor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Pledgor contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. 30. 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 requirements of the Credit Agreement or any other Credit Document, shall automatically become a Pledgor hereunder by executing a counterpart hereof and delivering the same to the Pledgee. Silgan agrees that it shall and shall cause any Subsidiary of Silgan that becomes a Pledgor hereunder to (i) deliver supplements to Annexes A through F, inclusive, hereto, and Annex H hereto, as are necessary to cause such Annexes to be complete and accurate with respect to such additional Pledgor on such date and (ii) take all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Pledgee and 24 with all documents and actions required above to be taken to the reasonable satisfaction of the Pledgee. * * * * 25 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 an Pledgor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Senior Vice President, General Counsel and Secretary SILGAN CONTAINERS CORPORATION, as an Pledgor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN PLASTICS CORPORATION, as an Pledgor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN CONTAINERS MANUFACTURING CORPORATION, as an Pledgor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN CAN COMPANY, as an Pledgor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN LLC, as an Pledgor By: SILGAN CONTAINERS MANUFACTURING COMPANY, as Manager By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN CORPORATION, as an Pledgor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary RXI PLASTICS, INC., as an Pledgor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN VACUUM CLOSURE HOLDING COMPANY, as an Pledgor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary Accepted and Agreed to: DEUTSCHE BANK TRUST COMPANY AMERICAS, as Pledgee, Collateral Agent By: /s/ Gina S. Thompson ----------------------------- Name: Gina S. Thompson Title: Director EX-99.4 6 guaranty.txt US BORROWER/SUBSIDIARIES GUARANTY, JUNE 28, 2002 EXECUTION COPY US BORROWERS/SUBSIDIARIES GUARANTY ---------------------------------- GUARANTY, dated as of June 28, 2002 (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"), Silgan Containers Manufacturing Corporation ("Manufacturing"), Silgan Can Company ("CanCo"), each other Borrower from time to time party thereto, the lenders from time to time party thereto (the "Lenders", and each, a "Lender"), Deutsche Bank Trust Company Americas, as Administrative Agent (in such capacity, and together with any successor administrative agent, the "Administrative Agent"), Bank of America, N.A. and Citicorp USA, Inc., as Co-Syndication Agents (in such capacity, the "Co-Syndication Agents"), Morgan Stanley Senior Funding, Inc. and Fleet National Bank, as Co-Documentation Agents (in such capacity, the "Co-Documentation Agents"), Deutsche Bank Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers (in such capacity, the "Joint Lead Arrangers"), and Deutsche Bank Securities Inc., Banc of America Securities LLC and Salomon Smith Barney Inc., as Joint Book Managers (in such capacity, the "Joint Book Managers"), have entered into a Credit Agreement, dated as of June 28, 2002 (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 Lenders, the Administrative Agent, the Collateral Agent, the Issuing Lenders, the Co-Syndication Agents, the Co-Documentation Agents, the Joint Lead Arrangers and the Joint Book Managers are collectively referred to herein as the "Lender Creditors"); WHEREAS, (i) Silgan has heretofore entered into two Interest Rate Protection Agreements with The Bank of New York (together with its affiliates, collectively "BNY") (as such Interest Rate Protection Agreements are in effect on the date hereof and without giving effect to any extension, renewal or replacement thereof, the "Existing BNY Interest Rate Protection Agreements"), and (ii) one or more of the Borrowers or Subsidiaries thereof are, or may from time to time be, party to one or more other Interest Rate Protection Agreements or Other Hedging Agreements with any Lender or an affiliate of a Lender (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns and BNY solely in respect of the Existing BNY Interest Rate Protection Agreements, are herein called the "Other Creditors" and, together with the Lender Creditors, are herein called the "Secured Creditors"); 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, and participation in, Letters of Credit for the account of each Revolving Borrower under the Credit Agreement that each Guarantor shall have executed and delivered to the Administrative Agent this Guaranty; and WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans and the issuance of, and participation in, Letters of Credit under the Credit Agreement and the entering into by one or more of the Borrowers or Subsidiaries thereof of Interest Rate Protection Agreements and Other Hedging Agreements and, accordingly, desires to execute this Guaranty in order to satisfy the conditions described in the preceding paragraph and to induce the Lenders 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 and Other Hedging 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 warranties 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 Lender Creditors, the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all principal, premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Borrower or any Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, fees, costs and indemnities) of each Borrower to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents and the due performance and compliance by each Borrower with all of the terms, conditions and agreements contained in the Credit Agreement and in the other Credit Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations, liabilities or indebtedness with respect to Interest Rate Protection Agreements and Other Hedging Agreements entitled to the benefits of this Guaranty, being herein collectively called the "Credit Document Obligations"); and (ii) to the Other Creditors, the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Borrower or Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by each Borrower and Subsidiary thereof to the Other Creditors under, or with respect to, each Interest Rate Protection Agreement and Other Hedging Agreement entitled to the benefits of this Guaranty, whether such Interest Rate Protection Agreement or Other Hedging Agreement is now in existence or hereafter arising, and the due performance and compliance by each Borrower and each Subsidiary thereof with all of the terms, conditions and agreements contained therein (all such obligations, liabilities and indebtedness described in this 2 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, any Subsidiary thereof, 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 in the currency or currencies in which the respective Guaranteed Obligations are required to be paid and on the same basis as payments are made by the respective 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 party thereto 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 to the Secured Creditors whether or not due or payable by such Borrower or any Subsidiary thereof upon the occurrence in respect of such Borrower or such Subsidiary 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 the currency or currencies in which the respective Guaranteed Obligations are required to be paid. 3. The liability of each Guarantor hereunder is primary, absolute, irrevocable, joint and several and unconditional and is exclusive and independent of any security for or other guaranty of the Guaranteed Obligations 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 any circumstance or occurrence whatsoever, including without limitation: (a) any direction as to application of payment by any Borrower, any Subsidiary thereof 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, (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 any Subsidiary thereof, (e) any payment made to any Secured Creditor on the Guaranteed Obligations which any Secured Creditor repays any Borrower, any Subsidiary thereof or any other Person 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 or (f) any action or inaction by the Secured Creditors as contemplated by Section 5 hereof. 4. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor, any other guarantor, any Borrower or any Subsidiary thereof, 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, any Borrower or any Subsidiary thereof and whether or not any other Guarantor, any other guarantor, any Borrower or any Subsidiary thereof be joined in any such action or actions. Each Guarantor waives, to the fullest extent permitted by law, the benefits of any statute of limitations affecting its liability 3 hereunder or the enforcement thereof. Any payment by any Borrower or any Subsidiary thereof or any other circumstance which operates to toll any statute of limitations as to such Borrower or such Subsidiary 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 (including any increases or decreases in the rate of interest thereon or the principal amount thereof), 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) take and hold security for the payment of the Guaranteed Obligations and 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 any Subsidiary thereof 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 or any Subsidiary thereof to creditors of such Borrower or such Subsidiary other than the Secured Creditors; (e) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of any Borrower or any Subsidiary thereof to the Secured Creditors regardless of what liabilities of such Borrower or such Subsidiary remain unpaid; (f) consent to or waive any breach of any act, omission or default under any of the Interest Rate Protection Agreements, the Other Hedging 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 Other Hedging Agreements, the Credit Documents or any of such other instruments or agreements; (g) act or fail to act in any manner which may deprive such Guarantor of its right to subrogation against any Borrower or any Subsidiaries thereof to recover full indemnity for any payments made pursuant to this Guaranty; 4 (h) release or substitute any one or more endorsers, Guarantors, other guarantors, any Borrower, any Subsidiary thereof or other obligors; and/or (i) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of such Guarantor from its liabilities under 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 irrevocable, joint and several, 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 in cash 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 under any other Credit Document, any Interest Rate Protection Agreement, any Other Hedging Agreement, applicable law or otherwise. 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 Secured 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, any Borrower or any Subsidiary thereof or the officers, directors, partners, members or agents acting or purporting to act on its or their behalf, in connection with the execution of the Credit Documents, the Interest Rate Protection Agreements or the Other Hedging Agreements, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 8. Any indebtedness, obligations or other liabilities of any Borrower or any Subsidiary thereof now or hereafter held by any Guarantor is hereby subordinated to the indebtedness, obligations or other liabilities of such Borrower or Subsidiary to the Secured Creditors, and (x) if a Default or an Event of Default under Section 9.05 of the Credit Agreement exists, no Borrower or Subsidiary thereof (or any Person acting on behalf of any Borrower or any Subsidiary thereof) may make any payment of any kind or character in respect of such indebtedness, obligations or other liabilities and to the extent that any Guarantor (or any Person acting on behalf of any Guarantor) shall receive any such payment, such Guarantor shall hold such amounts in trust for the benefit of the of the Secured Creditors and shall immediately pay such amounts over to the Administrative Agent on behalf of the Secured Creditors on account of the Guaranteed Obligations, or (y) if the Administrative Agent or the Collateral Agent, after the occurrence and during the continuance of any other Event of Default, so requests, all such indebtedness, obligations or other liabilities of such Borrower or Subsidiary shall be collected, enforced and received by such Guarantor as trustee for the Secured Creditors and be paid over to 5 the Secured Creditors on account of the indebtedness, obligations or other liabilities of such Borrower or Subsidiary to the Secured Creditors, but (in each case) 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 or any Subsidiary thereof 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 and indefeasibly paid in full in cash. 9. (a) Each Guarantor waives all rights (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 Subsidiary thereof, any other Guarantor, any other guarantor or any other party; (ii) proceed against or exhaust any security held from any Borrower, any Subsidiary thereof, any other Guarantor, any other guarantor 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, any Subsidiary of any Borrower or any other party other than the indefeasible payment in full in cash of the Guaranteed Obligations, including, without limitation, any defense based on or arising out of the disability of any Borrower, any other Subsidiary of any Borrower, any other Guarantor, any other guarantor or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof for any reason or the cessation from any cause of the liability of any Borrower or any Subsidiary thereof other than the indefeasible payment in full in cash of the Guaranteed Obligations. 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, any Subsidiary thereof 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 indefeasibly paid in full in cash. 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, any Subsidiary thereof 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 additional indebtedness, notices of suit or taking of other action by the Administrative Agent, the Collateral Agent or any other Secured Creditor against, and any other notice to, any party liable thereon (including such Guarantor, any other guarantor, any Borrower or any Subsidiary thereof). Each Guarantor assumes all responsibility for being and keeping itself informed of each Borrower's and each Subsidiary's financial condition and assets, and of all other circumstances bearing upon 6 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, any other Subsidiary of any Borrower 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 or any Subsidiary thereof; and (B) if the Secured Creditors foreclose on any Real Property collateral pledged by any Borrower or any Subsidiary thereof, (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 or any Subsidiary thereof. 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 (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 or any Subsidiary thereof 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. 7 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 US 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, partner or stockholder of any Guarantor (except to the extent such member, partner or stockholder is also a Guarantor hereunder). 11. In order to induce the Lenders 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 and Other Hedging Agreements, each Guarantor represents, warrants and covenants (as to itself and each of its Subsidiaries), in each case after giving effect to the transactions to occur on the Initial Borrowing Date, that: (a) Such Guarantor and each of its Subsidiaries (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company power and authority, as the case may be, 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, partnership or limited liability company, as the case may be, 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, either individually or in the aggregate, have a Material Adverse Effect. (b) Such Guarantor has the corporate, partnership or limited liability company, as the case may be, 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, partnership or limited liability company action, as the case may be, 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 8 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 material 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 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 this Guaranty or any other Credit Document to which such Guarantor is a party or (ii) that are reasonably likely, either individually or in the aggregate, to have a Material Adverse Effect. 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 and Other Hedging Agreements entitled to the benefits of the Guaranty and when no Loan, Note or Letter of Credit remains outstanding and all Guaranteed Obligations have been indefeasibly paid in full in cash (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, and shall cause each of its Subsidiaries to take, or refrain from taking, as the case may be, all actions that are necessary to be taken or not taken so that neither such Guarantor nor any of its Subsidiaries are in 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 other Agent in connection with any amendment, waiver or consent relating hereto (including, without limitation, the reasonable fees and disbursements of counsel (including, without duplication, in-house counsel) and consultants employed or retained by the Administrative Agent and, after the occurrence of an Event of Default, one additional counsel employed or retained by the other Secured Creditors as a group). 9 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 as provided in the US Security Agreement. 16. Each Guarantor acknowledges that an executed (or conformed) copy of each of the Credit Documents and Interest Rate Protection Agreements and Other Hedging 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 or Other Hedging 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 indebtedness, obligations and liabilities of such Guarantor to such Secured Creditor under this Guaranty, irrespective of whether or not such Secured Creditor shall have made any demand hereunder and although said indebtedness, 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. 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 Lender 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 ease of any Other Creditor, at such address as such Other Creditor shall have specified in writing to Silgan; or in any case at such other address as any of the Persons listed above may hereafter notify the others in writing. 10 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 or any Subsidiary thereof), 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 or any Subsidiary thereof, 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, in each case which are located in the County 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 personal 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 personal 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 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 11 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 Administrative Agent. 23. EACH GUARANTOR AND EACH OF THE SECURED CREDITORS (BY THEIR ACCEPTANCE OF THE BENEFITS HEREOF) 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. 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 12 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 indefeasibly paid in full in cash and the Total Commitment and all Letters of Credit and Interest Rate Protection Agreements and Other Hedging 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 indebtedness, 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 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 and, to the maximum extent permitted by applicable law, any liabilities of such Guarantor in respect of any Permitted Subordinated Indebtedness or any other indebtedness that is subordinated to the Guaranteed Obligations or any 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 that 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 Lenders. 27. Each Secured Creditor (by its acceptance of the benefits hereof) 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 Transfer 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 (but excluding, to the maximum extent permitted by applicable law, any liabilities of a Guarantor arising under any Permitted Subordinated Indebtedness or any other indebtedness that is subordinated to the Guaranteed Obligations or any obligations under this Guaranty), 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. 28. (a) The Guarantors' obligations hereunder to make payments in the respective currency or currencies in which the respective Guaranteed Obligations are required to be paid (such currency being herein called the "Obligation Currency") shall not be discharged or 13 satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent, the Collateral Agent or the respective Secured Creditor of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent, the Collateral Agent or such other Secured Creditor under this Guaranty, the other Credit Documents or the Interest Rate Protection Agreements or Other Hedging Agreements, as applicable. If for the purpose of obtaining or enforcing judgment against any Guarantor in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the "Judgment Currency") an amount due in the Obligation Currency, the conversion shall be made at the Relevant Currency Equivalent thereof or, in the case of a conversion into currencies other than Dollars or a Primary Alternate Currency, the rate of exchange (quoted by the Administrative Agent) or if the Administrative Agent does not quote a rate of exchange on such currency, by a known dealer in such currency designated by the Administrative Agent) determined, in each case, as of the day on which the judgment is given (such Business Day being hereinafter referred to as the "Judgment Currency Conversion Date"). (b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Guarantors jointly and severally covenant and agree to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate or exchange prevailing on the Judgment Currency Conversion Date. (c) For purposes of determining the Relevant Currency Equivalent or any other rate of exchange for this Section 28, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency. ***** 14 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 an Guarantor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Senior Vice President, General Counsel and Secretary SILGAN CONTAINERS CORPORATION, as an Guarantor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN PLASTICS CORPORATION, as an Guarantor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN CONTAINERS MANUFACTURING CORPORATION, as an Guarantor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN LLC, as an Guarantor By: SILGAN CONTAINERS MANUFACTURING COMPANY, as Manager By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN CORPORATION, as an Guarantor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary RXI PLASTICS, INC., as an Guarantor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary SILGAN VACUUM CLOSURE HOLDING COMPANY, as an Guarantor By: /s/ Frank W. Hogan, III --------------------------------- Name: Frank W. Hogan, III Title: Vice President, General Counsel and Secretary 16 Accepted and agreed: DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent By: /s/ Gina S. Thompson ----------------------------- Name: Gina S. Thompson Title: Director 17 -----END PRIVACY-ENHANCED MESSAGE-----