FIRST AMENDMENT

EX-10.4 8 dex104.htm FIRST AMENDMENT TO THE CREDIT AGREEMENT DATED AS OF NOVEMBER 4, 2003 First amendment to the Credit Agreement dated as of November 4, 2003

EXHIBIT 10.4

FIRST AMENDMENT

FIRST AMENDMENT (this “Amendment”), dated as of November 4, 2003, 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” and, together with Silgan, Containers, Plastics and Manufacturing, the “Borrowers,” and each individually, a “Borrower”), the lenders from time to time party to the Credit Agreement (each a “Lender” and, collectively, the “Lenders”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent (in such capacity, the “Administrative Agent”). Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement referred to below are used herein as therein defined.

WITNESSETH :

WHEREAS, the Borrowers, the Lenders, the Co-Syndication Agents, the Co-Documentation Agents, the Joint Lead Arrangers, the Joint Book Managers and the Administrative Agent have entered into a Credit Agreement, dated as of June 28, 2002 (the “Credit Agreement”); and

WHEREAS, subject to the terms and conditions set forth below, the parties hereto wish to amend certain provisions of the Credit Agreement as provided herein;

NOW, THEREFORE, it is agreed;

A.	Amendments to the Credit Agreement

1. Section 1.14(a) of the Credit Agreement is hereby amended by (i) deleting the amount “$275,000,000” appearing in clause (v) of the second paragraph thereof and inserting the text “$475,000,000 (subject to reduction as provided below)” in lieu thereof and (ii) inserting the following new sentence at the end thereof:

“Notwithstanding anything to the contrary contained in clause (v) above in this paragraph, at 5:00 P.M. (New York time) on the earlier of (A) the date of the incurrence of any Incremental Term Loans on or after the First Amendment Effective Date and (B) December 31, 2003, the $475,000,000 aggregate limitation set forth therein shall be permanently reduced by the remainder (if positive) of (x) $200,000,000 minus (y) the aggregate amount of Incremental Term Loan Commitments obtained and funded on or after the First Amendment Effective Date and on or before December 31, 2003.”

2. The definition of “Applicable Commitment Commission Percentage” and “Applicable Margin” appearing in Section 10.01 of the Credit Agreement is hereby amended by

(i) deleting the ratio “4.00:1.00” each place such ratio appears under the column entitled “Total Leverage Ratio” and inserting the ratio “3.75:1.00” in lieu thereof in each such place, (ii) inserting the following text immediately after the text “December 31, 2002” appearing in clause (B) of the final sentence thereof:

“, (C) Level 5 pricing shall apply for the period from the First Amendment Effective Date through and including the date that is six months after the First Amendment Effective Date (after which time the Applicable Commitment Commission Percentage and Applicable Margin shall be determined as otherwise provided in this definition without regard to this clause (C) and initially determined by reference to the financial statements 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)) for the then most recently ended Test Period”,

and (iii) re-designating clause “(C)” of such final sentence as clause “(D)”.

3. The definition of “Issuing Lender” appearing in Section 10.01 of the Credit Agreement is hereby amended to read in its entirety as follows:

“Issuing Lender” shall mean each of Deutsche Bank and any other Lender reasonably acceptable to the Administrative Agent which, at the request of Silgan, agrees in such Lender’s sole discretion to issue Letters of Credit hereunder. Any Issuing Lender may, in its discretion, arrange for one or more Letters of Credit to be issued by one or more Affiliates of such Issuing Lender (in which case each such Affiliate shall be the Issuing Lender of such Letters of Credit).

4. The definition of “Permitted Subordinated Debt Repurchases” appearing in Section 10.01 of the Credit Agreement is hereby amended to read in its entirety as follows:

“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) except as provided in the immediately succeeding sentence, at the time of each such Refinancing and immediately after giving effect thereto, the Senior Leverage Ratio at such time, determined on a Pro Forma Basis, is no greater than 3.00:1.00, (iii) except as provided in the immediately succeeding sentence, 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 at such time, determined on a Pro Forma Basis, and such calculation shall show that the Senior Leverage Ratio is no greater than 3.00:1.00, (iv) except as provided in the immediately succeeding sentence, at the time of each such Refinancing and immediately after giving effect thereto, the Total Unutilized Revolving Loan Commitment shall be at least (x) $150,000,000 to the extent that any such Refinancing occurs during the period from and including November 1 of any year through and including May 31 of the

-2-

succeeding year or (y) $100,000,000 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 Indebtedess so Refinanced are cancelled by Silgan. Notwithstanding the foregoing, clauses (ii), (iii) and (iv) above in this definition shall not apply to (x) any Refinancing of the 9% Senior Subordinated Debentures to the extent such Refinancing occurs on or prior to December 31, 2003 and Silgan effects any such Refinancing utilizing, among other funds, at least $200,000,000 in aggregate principal amount of Additional Permitted Subordinated Indebtedness and up to $200,000,000 in aggregate principal amount of Incremental Term Loans or (y) any Refinancing of Additional Permitted Subordinated Indebtedness so long as the only proceeds used to effect such Refinancing are from the incurrence of Additional Permitted Subordinated Indebtedness.

5. The definition of “Senior Leverage Ratio” appearing in Section 10.01 of the Credit Agreement is hereby amended to read in its entirety as follows:

“Senior Leverage Ratio” shall mean, at any time, the ratio of (x) the sum of (I) Total Indebtedness (excluding Revolving Outstandings) at such time but calculated without regard to any outstanding Permitted Subordinated Indebtedness at such time plus (II) the Revolving Outstandings on the December 31 immediately preceding the date of the required calculation of the Senior Leverage Ratio (or, in the case of any such calculation on a December 31, the Revolving Outstandings on such December 31) to (y) EBITDA for the Test Period then most recently ended for which financial statements have been delivered to the Lenders under this Agreement. In determining the Senior Leverage Ratio at any time, there shall be excluded from Total Indebtedness an amount equal to the amount of unrestricted cash and Cash Equivalents that would appear on a consolidated balance sheet of Silgan and its Subsidiaries prepared at such time to the extent, but only to the extent, no Revolving Loans or Swingline Loans are outstanding at such time, provided, that in no event shall more than $50,000,000 be deducted in determining Total Indebtedness at such time; 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 would be reflected on a consolidated balance sheet of Silgan and its Subsidiaries prepared at such time.

6. The definition of “Total Indebtedness” appearing in Section 10.01 of the Credit Agreement is hereby amended by inserting the word “principal” immediately after the phrase “the aggregate” appearing therein.

7. Section 10.01 of the Credit Agreement is hereby further amended by inserting the following new definition in the appropriate alphabetical order:

-3-

“First Amendment Effective Date” shall have the meaning provided in the First Amendment, dated as of November 4, 2003, to this Agreement.

8. Section 12.07(a) of the Credit Agreement is hereby amended by (i) redesignating clause (ii) in the further proviso thereof as clause (iii) thereof and (ii) inserting the following new clause (ii) in such further proviso immediately at the end of clause (i) thereof:

“(ii) in determining Interest Expense for any period, no effect shall be given (but only to the extent not already otherwise excluded for the calculation of Interest Expense under this Agreement) to non-cash amounts recorded (or required to be recorded) in accord with FAS 133,”.

9. Section 12.15 of the Credit Agreement is hereby amended by adding the following new paragraph (c) at the end thereof:

“(c) Notwithstanding anything provided in this Agreement, any amendments to this Agreement or any other agreement or document relating to the transactions contemplated by this Agreement, each Credit Party, each Agent and each Lender hereby agrees and acknowledges that each Credit Party, each Agent and each Lender (and each of their employees, representatives or other agents) is authorized to disclose to any and all persons, beginning immediately upon commencement of their discussions concerning the transactions contemplated by this Agreement and without limitation of any kind, the tax treatment and tax structure of such transactions, and all materials of any kind (including opinions or other tax analyses) that are provided by any Credit Party, any Agent or any Lender to the other relating to such tax treatment and tax structure, except to the extent that such disclosure is subject to restrictions reasonably necessary to comply with securities laws. For purposes of this paragraph, “tax treatment” and “tax structure” have the meanings provided, respectively, in Treasury Regulations section 1.6011-4(c)(8) and (9). This paragraph is intended to reflect the understanding of each Credit Party, each Agent and each Lender that the transactions contemplated by this Agreement have not been offered under “conditions of confidentiality,” as that phrase is used in Treasury Regulation §§ 1.6011-4(b)(3)(i) and ###-###-####-2(c)(i), and shall be interpreted in a manner consistent therewith. Nothing herein is intended to imply that any Credit Party, any Agent or any Lender has made or provided to, or for the benefit of, the other any oral or written statement as to any potential U.S. federal tax consequences that are related to, or may result from, such transactions. None of the Credit Parties, the Agents or the Lenders provides accounting, tax or legal advice, and each of them has or will consult its own advisors regarding its participation in such transactions.”

10. Silgan also covenants and agrees with the Lenders (which covenant and agreement shall constitute a “covenant” and “agreement” for purposes of Section 9.03(i) of the Credit Agreement) that it shall deliver a notice of redemption to the trustee for the 9% Senior Subordinated Debentures within five Business Days after the First Amendment Effective Date (as defined below) to redeem at least $200,000,000 in aggregate principal amount of 9% Senior Subordinated Debentures (or, if less, the remaining aggregate principal amount of 9% Senior Subordinated Debentures not theretofore called for redemption) within 40 days after such trustee’s receipt of such notice of redemption.

-4-

B.	Miscellaneous Provisions

1. Silgan acknowledges that it has incurred $150,000,000 of Incremental Term Loans pursuant to Section 1.14 of the Credit Agreement prior to the First Amendment Effective Date.

2. In order to induce the Lenders to enter into this Amendment, each Borrower hereby represents and warrants to each of the Lenders that (i) all of the representations and warranties contained in the Credit Agreement and in the other Credit Documents are true and correct in all material respects on and as of the First Amendment Effective Date, both before and after giving effect to this Amendment (unless such representations and warranties relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date), and (ii) there exists no Default or Event of Default on the First Amendment Effective Date, both before and after giving effect to this Amendment.

3. This Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement or any other Credit Document.

4. This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts executed by all the parties hereto shall be lodged with Silgan and the Administrative Agent.

5. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

6. This Amendment shall become effective on the date (the “First Amendment Effective Date”) when each Borrower and the Required Lenders shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of telecopier) the same to the Administrative Agent at the Notice Office.

7. From and after the First Amendment Effective Date, all references in the Credit Agreement and in the other Credit Documents to the Credit Agreement shall be deemed to be referenced to the Credit Agreement as modified hereby.

* * *

-5-

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed and delivered as of the date first above written.

SILGAN HOLDINGS INC.

By:		/s/ Frank W. Hogan, III

		Title: Senior Vice President, General Counsel and Secretary

SILGAN CONTAINERS CORPORATION

By:		/s/ Frank W. Hogan, III

		Title: Vice President, General Counsel and Secretary

SILGAN PLASTICS CORPORATION

By:		/s/ Frank W. Hogan, III

		Title: Vice President, General Counsel and Secretary

SILGAN CONTAINERS MANUFACTURING CORPORATION

By:		/s/ Frank W. Hogan, III

		Title: Vice President, General Counsel and Secretary

SILGAN CAN COMPANY

By:		/s/ Frank W. Hogan, III

		Title: Vice President, General Counsel and Secretary

DEUTSCHE BANK TRUST COMPANY AMERICAS, Individually and as Administrative Agent

By:		/s/ Marguerite Sutton

		Title: Vice President

Galaxy CLO 1999-1, Ltd.
by AIG Global Investment Adviser, Inc.
its Collateral Manager

[NAME OF LENDER]

By:		/s/ John G. Lapham, III

		Title: Managing Director